Now is not the time to “Zombie Out”
The clock is ticking to transition to the SCHADS Award for NDIS & Home Care providers covered by Zombie Agreements
By David Cuda
Community Services providers whose Support Workers are covered by ‘Zombie agreements’ need to take some prompt action as the clock is now ticking to transition to the Social, Community, Home Care and Disability Services Industry Award 2010 (SCHADS Award) or establish a new enterprise agreement.
‘Zombie’ agreements is a term used to describe enterprise agreements that have passed their nominal expiry date but currently remain preserved in law. These include enterprise agreements made between 1 July 2009 to 31 December 2009 in the ‘bridging period’ prior to the introduction of the Fair Work Act 2009 (Cth). The key difference between zombie agreements made (and approved) during the ‘bridging period’ or earlier and those made and approved from 1 January 2010, is that the terms and conditions of zombie agreements are not required to be as favourable as the terms of the SCHADS Award.
Sunsetting of zombie agreements
Zombie agreements that are not yet terminated will automatically terminate on 7 December 2023 unless you apply for and are granted an extension. Such extension will be based on very specific parameters, such as demonstrating employees are better off if the zombie agreement continued to apply to them, rather than if the SCHADS Award applied to their employment.
Numerous Community Service providers across Australia are still operating under zombie agreements and will accordingly need to promptly address the impending sunset of these agreements. When a zombie agreements sunset on 7th December 2023, they will automatically terminate, so that they will no longer operate.
Significant Support Workforce engagement and deployment structural changes lie ahead for the many remaining NDIS and Home Care providers still covered by zombie agreements.
What will be the main impacts of transitioning to the SCHADS Award?
The transition to the SCAHDS Award will bring about considerable changes to NDIS and Home Care providers frontline workforce cost structures and rostering practices. The key impacts for providers currently covered by zombie agreements to consider are outlined briefly below.
Material increases in frontline Support Workforce labour costs impairing gross margins
Support Workers that have zombie agreements applied to their employment are merely required to be paid no less than the minimum base rate of pay (for a permanent employee) to their corresponding modern award.This means NDIS and Home Care service providers currently covered by zombie agreements are legally able to pay their Support Workers the permanent employee base rate of pay as per the SCHADS Award minimum, but, subject to the specific terms of their zombie agreements, potentially be able to legally pay no penalties, loadings and allowances at all, or pay penalties, loadings, and allowances lower than prescribed in the SCHADS Award.
For zombie agreement holders the ability to pay Support Workers lower than the SCHADS Award is afforded due to the various terms and conditions impacting the calculation of pay rates such as casual loading, overtime penalties, shift penalties, sleepovers and motor vehicle allowances.
Accordingly, when lower penalties, loadings or allowances are applied to the minimum base rate of pay, overall pay rates to their Support Workers across the range of shifts will certainly be below the SCHADS Award prescribed pay scales.
Some NDIS and Home Care providers currently still covered by zombie agreements have chosen to transition to pay rates, terms and conditions as per the SCHADS Award (even though they were not legally required to do so) upon the role out of the NDIS, but many have not.
For providers transitioning from zombie agreements to the SCHADS Award, any pay rate increases to be applied to fall in-line with the SCHADS Award pay scales will reduce their future gross margins on services delivered, as frontline Support Workforce labour costs will increase against the current NDIS or Home Care packages pricing. Furthermore, increases in wage costs to frontline Support Workers will flow-on to increases in on costs such as superannuation, workers compensation and portable long service leave, further reducing future gross margins.
Significant changes required to rostering practices, many of which will increase labour costs and impair gross margins
The SCHADS Award is complex and the correct application of the multitude of terms and conditions are challenging for Community Services providers. Working with many Community Services providers covered by the SCAHDS Award over the years it is astonishing to see the disparity in interpretation of clauses between providers and how these are consistently incorrectly applied to rostering and payroll practices. The incorrect application of the SCHADS Award is a real ticking time bomb of backpays for many providers, but that’s a topic for another day.
For providers transitioning from zombie agreements to the SCHADS Award they will have to implement some significant changes in rostering practices of their frontline Support Workers because of the numerous updates to the SCHADS Modern Award since its inception. Plenty of changes have occurred in the SCHADS Award since 2010.The transition from rostering per zombie agreements to the SCHADS Award will impact workforce deployment and optimisation practices for providers, which in-turn will likely increase the number of Support Workers needed to fulfil current operating requirements and reduce gross margins due to the increases in labour costs inherent by the application of better-off SCHADS Award terms and conditions in comparison to zombie agreements.
Some of the key areas in rostering and payroll practices for providers transitioning to the SCHADS Award from zombie agreements will need to comprehensively assess and address, include:
· Minimum hours per shift
· Types of shifts and relation to ordinary hours
· Shiftwork
· Rest break between shifts
· Broken shifts and broken shift allowances
· Overtime
· Sleepovers
· Classification structures
· Allowances
· Notification of rosters
Each of these areas have a range of terms and conditions that need to be carefully interpreted and applied.
For example, just in relation to Sleepovers, some of the loaded rostering rules applications per the SCHADS Award include:
o Shifts are worked in one continuous block including the sleepover period, so the hours worked before and/or after a sleepover period is counted as one continuous shift. This alone has numerous impacts to rostering practices including:
- all worked periods during Sleepover shifts during weekdays are classified as “night shifts” as the sleepover “continuous shift” finishes after midnight.
- if the total worked period during the sleepover shift (being the sum of both the hours worked before and/or after the sleepover period) is beyond the maximum ordinary hours in a day or per shift, then overtime is incurred.
o A minimum of 4 hours work is required for at least one of the work periods either side of the sleepover period. That’s not 4 hours in total, but a minimum of 4 hours on either before, or after the sleepover period.
o Only work before and/or after the Sleepover period counts as time worked.
o Any time worked during a Sleepover is overtime with minimum payment of one hour. Therefore, if the work performed disturbance period is 15 minutes, a minimum of 1 hour needs to be paid.
The SCHADS Award has significantly evolved since its inception in 2010 and its application in the context of how rostering is executed needs to be assessed with care and expertise.
Nest Step?
If a zombie agreement currently applies in your NDIS or Home Care services business, we recommend promptly undertaking a review to determine the likely increases in frontline labour costs and assess the raft of changes to rostering practices required if the SCHADS Award becomes the applicable industrial instrument for your frontline Support Workforce.
Author - David Cuda, Managing Partner – Support Worker Co – david@supportworker.co
Would You Like to Chat? How About a Free Consultation Session?
Support Worker Co. is a pioneering and bespoke Staffing and Consulting Services firm. Our solutions leverage a combined 100 years of expertise and insight our leadership team has in designing and successfully executing tailored Support Workforce-related services and solutions that drive results and solve complex and important Support Workforce-related challenges of Community Services providers.
Book in a free consultation today with our Managing Partners and receive a “Solved Path”.