The Federal Government has successfully passed a raft of changes to the workplace legal environment with the Fair Work Legislation Amendment (Secure Jobs, Better pay) Act recently receiving royal assent. The Government promises that the Act will modernise the current industrial relations laws with an emphasis on boosting wages and closing the gender pay gap but employer groups are concerned that the changes may in fact lead to job losses.
The changes being implemented are extensive and any employers with concerns about how they will be impacted should contact our office to discuss their particular situation.
We have identified the key changes and provided a summary of those changes below. These changes will be implemented in stages over the next 12 months. Watch out for future legal alerts where we will highlight key changes as they come into effect.
You can click on the link below to jump to key items or scroll down to review the full article.
- The introduction of multi-employer bargaining (MEB)
- The right to flexible working arrangements for eligible employees
- The Limitation on fixed term contracts
- The prohibition of pay secrecy in employment contracts
- The right to secure work and greater gender pay equality
- Eliminating sexual harassment in the workplace
- President’s statement
- Key takeaways for employers
The introduction of multi-employer bargaining (MEB)
MEB would allow employees with a “common interest”, such as working in the same industry, to bargain for one agreement to cover multiple employers. It is anticipated that the sector-wide bargaining will primarily focus on low-paid industries, such as cleaners or early education workers, however industry groups are concerned that it may apply to other business sectors.
Small businesses will be able to opt out of this bargaining process. The Fair Work Act 2009 (Cth) (FWA) defines small businesses as a business that has less than 15 employees. For the purpose of MEB, the Act will be increasing this number to 20 employees. If a business has less than 50 employees, then workplaces with more than 50 employees must provide evidence that the business should be covered by a multi-employer executive agreement.
Employer groups, whilst admitting that the current enterprise agreement system is not working, are not in support of this proposal and claim that such agreements would take employers back to industry-wide pattern agreements and potentially lead to more industrial action and job losses.
The civil construction sector will be excluded from multi-employer bargaining unless bargaining is in relation to a greenfield agreement.
The right to flexible working arrangements for eligible employees
Currently employees can request flexible working hours, but an employer has no obligation to agree. Under the Act, if an “eligible employee” requests flexibility, employers would be legally bound to try and reach an agreement, which includes an obligation on employers to make “genuine efforts” to identify alternative arrangements when an employee’s request cannot be accommodated on reasonable business grounds.
If the parties cannot agree, the employee will be entitled to seek the assistance of the Fair Work Commission (FWC) to reach an agreement and if no agreement is reached, the Commission will be able to make a binding decision.
It is important to note that these rights apply only to eligible employees – ie: employees with children of school age or younger, pregnant women, people aged 55 and over, someone with a disability, domestic violence victims and carers. This applies to all businesses regardless of their size and is available to part-time or full-time employees.
The Limitation on fixed term contracts
Fixed term contracts with a period of two or more years will be prohibited by some modern awards. An employer will have contravenes this prohibition if they enter into an employment contract with an employee and the contract states that it will conclude at the end of an identifiable period that is equal to or greater than 2 years.
However, if this situation arises, the employee will not be deprived of their employment. The employment contract will continue as if the fixed termination date was invalid, and the employee will be entitled to notice of termination and redundancy pay under the (FWA).
Parties to an illegible fixed term contract will be able to exercise the option to renew or extend their first fixed term contract, subject to the two year limit. However, where the parties decide to extend the first fixed term contract, they will be prohibited from subsequently entering a consecutive fixed term contract. Parties will be able to renew or extend the contract at least once but not more.
The intent behind this new provision is to ensure that workers on fixed term contracts have access to secure and permanent employment, unless an appropriate exception applies.
The prohibition of pay secrecy in employment contracts
Pay secrecy terms in employment contracts will now be prohibited. Employees will have a positive right to disclose or not to disclose information about their own remuneration and any related terms and conditions about their employment to any person. Employees will also be able to ask other people about their remuneration and any related terms and conditions of their employment.
The intent behind this is to create gender transparency and accountability for employers to eliminate discrimination against women from their workplaces relating to their remuneration and human resources practices.
The right to secure work and greater gender pay equality
The Act will introduce a Pay Equity Expert Panel (Panel) within the FWC to determine equal remuneration cases and certain award cases. This Panel will hear wage-related matters to help address low wages and challenging workplace conditions faced in the sector and will be able to exercise certain functions. The Panel members will have an expertise in gender pay equity, anti-discrimination, and the Care and Community Sector.
The Act will incorporate ‘gender equity’ into the objectives of the FWA, the modern awards, and minimum wages.
The aim of this is to ensure that pay equity claims and relevant award variation applications are considered by Commission members with knowledge and experience in these areas to appropriately manage these matters. This will guarantee that gender equity and job security are given appropriate weight.
Eliminating sexual harassment in the workplace
The Act will implement recommendation 28 of the Respect@Work Act, which has recently been passed. The recommendation suggested a review of the Fair Work system to ensure and clarify that sexual harassment is expressly prohibited. Therefore, the Act will be introducing a prohibition against sexual harassment in the FWA.
A new dispute resolution process will be introduced allowing the FWCto deal with sexual harassment disputes through conciliation or mediation. If there is no agreement reached, the FWC will have the capacity to settle the dispute and make orders.
The Act aims to increase protections against workplace sexual harassment in the FWA and give workers a new way to deal with sexual harassment complaints.
President’s statement
On 8 December 2022, the FWC President released a statement regarding the Act. The statement provides a brief overview of the amendments contained in the Act that relate to the FWC and outlines the approach the FWC proposes to take concerning consultation and engagement throughout the implementation process. This will occur in stages over the next 12 months. Watch out for future legal alerts where we will highlight key changes as they come into effect.
If you are interested in reading the statement, the link is provided below.
Key takeaways for employers
The passing of the Act will bring significant changes to Australian workplaces. Some Australians have voiced their support for the changes believing them to be well overdue and others believe the Act will bring more hardship into the industrial landscape.
Either way, the Act has been passed and will be coming into effect early next year. Employers are urged to take the holiday period as an opportunity to plan their 2023 business year and assess the possible implications their businesses may have to face.
For further information contact Danny Clifford, Director of Employment and Workplace Law.
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