09 Dec Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022
On 6 December 2022, the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (“the Act”) received royal assent.
The Act introduces significant changes into the area of employment law, which will impact employers of all sizes and how they manage their workplace. We set out below some of the key changes employers will need to be aware of and prepare for.
The scope of multi-employer bargaining has been extended, giving employees and unions increased power to require multiple employers to bargain for agreements. There are two new streams of multi-employer bargaining, namely the supported bargaining stream and the cooperative workplace bargaining stream.
Supported bargaining agreements
The Fair Work Commission (“FWC”), through a supported bargaining authorisation can require multiple employers to bargain together. Factors that the FWC will consider include whether low rates prevail in a particular industry or sector, or identifiable common interests are held between employers. The Minister will also have the power to declare an industry, occupation or sector eligible for this stream. A supported bargaining authorisation must be made by the FWC with respect to the employees if the Minister so declares.
Single interest employer authorisations
The Act enables applications to be made to the FWC by an employee bargaining representative for a “single interest employer authorisation”. A single interest employer authorisation can be granted by the FWC (it does not need the employer’s consent) to compel an employer to bargain with other employers if the employer has at least 20 employees and the employer is not covered by an agreement that has not nominally expired.
The FWC must be satisfied that the employees have a clearly identifiable interest and the majority of employees who will be covered by the agreement want to bargain with the employers, as well as the FWC applying the public interest test to ensure it will not be contrary to the public interest to grant a multi-employer authorisation.
While employers are covered by the single interest employer authorisation they are prohibited from bargaining with employees for any other agreement. An employer may be excluded from the authorisation if the FWC is satisfied the employer is bargaining in good faith, has a history of effectively bargaining and less than nine months have passed since the nominal expiry date.
Better off overall test
The Act aims to simplify the operation of the Better off overall test (“BOOT”) by:
- changing the term “prospective award covered employee” to “reasonably foreseeable employee”;
- the FWC undertaking a global assessment as to whether an employee will be better offer regarding the more beneficial and less beneficial terms of the Enterprise Agreement as compared with the relevant award;
- the FWC considering the views of the employer, employees and bargaining representatives and whether there is a common view between the parties that the Enterprise Agreement passes the BOOT (the common view is the primary consideration for the FWC); and
- the FWC regarding reasonably foreseeable patterns, kind of work or employment types as opposed to hypothetical kinds of work – this will involve the FWC considering the nature of the enterprise and views expressed by employers, employees or bargaining representatives as to the patterns, kind of work and employment type.
The FWC can directly amend the Enterprise Agreement during the approval process if it considers the Enterprise Agreement will not pass the BOOT test. The FWC can directly amend or remove relevant terms if necessary. The FWC must seek the views of the employer, employees and the bargaining representative if it intends to do so.
If patterns of work or types of employment were not considered by the FWC at the approval stage, an application can be made to the FWC during the life of the Enterprise Agreement to reconsider the BOOT. The FWC’s assessment will be undertaken on the relevant Award and Enterprise Agreement as assessed at the approval stage, or any varied forms of the award or Enterprise Agreement that came into effect after the approval stage. If it is determined the Enterprise Agreement does not meet the BOOT, an undertaking can be given or the FWC can undertake the amendment process as set out above. Any amendments will operate seven days after the amendment, or a date specified in the amendment.
Flexible work requests
Whilst there was provision for employees to request flexible working arrangements prior to the introduction of the Act, the Act now strengthens the employee’s right to request and negotiate flexible working arrangements and to reduce the ability of employers to refuse such requests.
The right to request flexible working arrangements has been expanded, so requests can be made for those experiencing family and domestic violence or where the employee is pregnant.
An employer is required to respond in writing to the request within 21 days, either granting the request, detailing agreed amendments to the request, or refusing the request (if refused, setting out grounds of refusal). The Act requires that a request can only be refused if the employer and the employee have tried to reach agreement and consequences for refusal have been considered by the employer.
An employee can now apply to the FWC if an employer does not grant the request or respond within 21 days. The FWC can now deal with this type of dispute by conciliation or mediation. Should the matter not resolve during conciliation or mediation, the FWC may arbitrate the dispute and issue orders if there is no reasonable prospect of success of the parties resolving the dispute. The order cannot be inconsistent with the Fair Work Act 2009 (Cth) (“FW Act”) or a term of a fair work instrument that applies to the employer and employee.
Fixed/maximum term contracts
The Act will prohibit an employer from engaging an employee on a fixed/maximum term contract:
- of more than two years;
- two such contracts that cumulatively exceed two years;
- a contract that allows for renewal so the employee will be employed for more than two years; or
- on consecutive contracts of employment where the employee is performing the same work or substantially similar work under the consecutive contracts.
Employers will be prohibited from engaging employees under the fixed/maximum term contracts even if there has been a gap in employment but a substantial continuity between the two periods of employment. This is to prevent employers:
- terminating then re-engaging an employee in order to break continuity of employment;
- delaying the re-engagement of an employee for the purposes of breaking continuity of employment; or
- artificially changing the terms or duties in a contract to break continuity of employment.
There are exceptions to the two year rule, which include:
- engaging employees with specialised skills required to complete a specific task;
- apprentices or trainees;
- essential work during a peak period, including seasonal work;
- emergency situations or where a permanent employee needs to be replaced on leave; and
- when an employee earns more than the high-income threshold (FY2022/2023 $162,000.00), calculated from the first year of the contract.
Employers will also be required to provide a “Fixed Term Contract Information Statement”.
An employee can make a request to their employer to agree to an extension of unpaid parental leave for a further period of up to 12 months following the end of available parental leave. The changes are similar to the process for an employee making a request for flexible working arrangements. Requests can only be refused on reasonable business grounds, including when the request is too costly for the employer, there is no capacity to change the working arrangements, the changes are impractical, the changes would impact existing employee work arrangements, would require the employer to hire new employees or it would result in significant efficiency and productivity losses.
Similar to flexible work request, an employee can apply to the FWC if an employer does not grant the request or respond within 21 days. The FWC can now deal with the dispute by conciliation or mediation. Should the matter not resolve during conciliation or mediation, the FWC may arbitrate the dispute and issue orders if there is no reasonable prospect of success of the parties resolving the dispute.
Pay equality and reducing the “gender pay gap”
The Act aims to address the gender gap by:
- Amending provisions to the Equal Remuneration Orders:
- The FWC can make an Equal Remuneration order on its own initiative.
- Provide the FWC with guidance on gender equality when considering equal remuneration for work of equal or comparable value, for example, comparisons within and between occupations and industries on the basis of gender, historical gender based undervalues and terms of an industrial instrument.
- Banning pay secrecy:
- Employees have been given a workplace right to disclose, or seek disclosure from a person, of their remuneration or terms and conditions of their employment reasonably necessary to determine remuneration outcomes.
- The workplace right will be captured by the general protection provisions of the FW Act.
- Employers can no longer contract with an employee to prevent the employee discussing remuneration and any existing contract clauses that included non-disclosure will be invalid. Employers risk a civil penalty if pay secrecy clauses are contained in new contracts.
- Two new FWC expert panels are to be established to exercise pay equity and focus on low pay and conditions in female dominated industries.
Respect@Work and sexual harassment
There is now an express prohibition for a person to sexually harass another person in connection with work. A person may make an application to the FWC to deal with a dispute of alleged contraventions of the FW Act, including making a stop sexual harassment order. The FWC will need to deal with the dispute either through firstly conciliation or mediation. A certificate may be issued by the FWC if the FWC is satisfied that all reasonable attempts to resolve the dispute have been unsuccessful. The FWC is then empowered to arbitrate the dispute by consent, or an application may be made to the Federal Court.
The anti-discrimination provisions of the FW Act have been amended to be consistent with other Commonwealth anti-discrimination legislation. The protected attributes of grounds of discrimination have been expanded to include gender identity, breastfeeding and intersex status. The term “Special measures to achieve equality” is clarified to have the purpose of achieving substantive equality for employees who have a particular attribute and is a matter pertaining to the employment relationship and may be included in an enterprise agreement so long as a reasonable person would consider it necessary to achieve substantive equality.
Other changes to the FW Act include:
- The objects of the FW Act have been expanded to include job security and gender equality.
- The Australian Building and Construction Commission has been abolished with the FWC assuming remaining functions.
- A National Construction Industry Forum has been established to advise the Government regarding work in the building and construction industry.
- The Registered Organisation Commission will be abolished and its functions transferred to the FWC.
- The requirement to review the operation of the amendments. This review is to commence within the next two years and a report is to be provided within six months of the commencement date of the review.
- The expansion of the small claim proceedings division in the FW Act from $20,000.00 to $100,000.00.
The above is an overview of some of the new industrial law changes that your business needs to be aware of to ensure it is complying with its workplace law obligations. HR Law will be conducting a Webinar covering these new laws and what they will mean for your business.
We will advise on when and how you can join us for this informative Webinar.
The contents of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.