The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 passed Federal Parliament on Friday the 2nd of December 2022 and is now only one small step away from becoming law.
When the bill receives royal assent, we will see some of the biggest changes to Australian workplace law since the Fair Work Act 2009 (Cth) was introduced.
A broad overview of the key changes are below. Please note that this is a summary only and more detail will be coming as the Bill progresses through royal assent:
- Zombie Agreements
- Agreements that commenced before the Fair Work Act 2009 (Cth) and during the 1 July to 31 December 2009 bridging period will automatically terminate 12 months after the Bill commences or at another date by approval of an extension from the Fair Work Commission (FWC). Employers will be required to give 6 months’ notice of the expiry to each employee covered by a zombie agreement. Once terminated, employees’ pay and conditions will be set by the relevant modern award or a new enterprise agreement that has been approved by the FWC.
- Approving new agreements
- The Better Off Overall Test (BOOT) has been simplified to make bargaining and the approval process easier. The FWC will consider any common views held by bargaining participants and must undertake a ‘global assessment’ under the BOOT as opposed to a line-by-line comparison, taking into account reasonably foreseeable patterns of work.
- Bargaining disputes
- The FWC will have greater power to deal with bargaining disputes including issuing bargaining declarations where the ‘minimum bargaining period’ exceeds nine months.
- Amending agreements
- Agreements will be easier to amend by application to the FWC to rectify drafting errors.
- Equal Remuneration
- The FWC’s powers will be increased to better enforce/improve gender pay equality by issuing Equal Remuneration Orders where it has determined that work has been undervalued on the basis of gender.
- Fixed Term Contracts
- There will be a two year limitation on fixed term contracts and prohibits against extensions greater than two years, or for more than one extension (meaning employers will be prohibited from offering a third consecutive fixed-term contract for substantially the same role).
- Pay secrecy
- Prohibitions against pay secrecy clauses and clauses which stop employees from discussing their pay. Employees will have a protected right to disclose (or not disclose) information about their remuneration to any other person. It is important to note that any existing pay secrecy clauses will be invalid.
- Sexual Harassment
- Increased protections against sexual harassment in the workplace by holding employers accountable to a positive duty to prevent sexual harassment in the workplace. Employers will be held vicariously liable for sexual harassment in their workplace, unless they can prove they took all reasonable steps to prevent the conduct from occurring.
- Adding to the anti-discrimination provisions by including protection against discrimination on the basis of breastfeeding, gender identity and intersex status as protected attributes.
- Flexible work arrangements
- Employers will need to respond to requests for flexible work arrangements within 21 days, and must set out the ‘reasonable business grounds’ for refusal. Disputes regarding refusals to grant flexible work arrangements can be taken to the Fair Work Commission who will be able to order that they be implement if it believes there were not ‘reasonable business grounds’ that support the rejection of the request.
- Multi-employer Bargaining
- Multi-employer bargaining has been a significant focus during the progression of the Bill and includes new ‘streams’ through which agreements can be made. The Workplace Minister can declare that an industry or occupation is eligible for supported multi-employer bargaining and the FWC will have the power to make a supported bargaining authorisation that requires employers to bargain together. The FWC will be able to determine “whether there is a common interest” and “public interest” in multi-employer bargaining when considering various factors, such as the presence of low pay-rates, and use of the common interest test. These provisions will not, however, apply to businesses that employ fewer than 50 employees.
The changes relating to zombie agreements, equal remuneration and anti-discrimination (amongst other changes) are likely to commence the day after the Bill receives Royal Assent. The changes to the BOOT, industrial action, bargaining disputes and alike will likely commence no later than 6 months after, with the changes to sexual harassment commencing with 3 months. The changes to fixed term contracts will likely have a 12 month delay of commencement.
What Businesses Should Do
Businesses should be aware of these changes and consider how they may impact including:
- Is there a need to review/update policies? In particular, think about how robust your sexual harassment policies and training are and whether you have policies relating to employees not discussing pay rates.
- Do your Contracts of Employment need updating?
- Review your rolling, fixed term contract employees to prepare for which may need to be converted to permanent employees.
- Examine your pay rates to self-assess whether there are any pay equity issues based on gender.
- If you have a collective agreement in place, check whether it is now classified as a ‘Zombie Agreement’ and start to think about whether reverting to the Award or renegotiating a new Enterprise Agreement is the best course of action.
If you have any questions, please contact your trusted consultant at Focus HR.