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Federal Government overhauls IR laws with new Secure Jobs Better Pay Bill

01 November 2022

#Workplace Relations & Safety

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Federal Government overhauls IR laws with new Secure Jobs Better Pay Bill

In what is the broadest set of changes to industrial laws in a decade, the Federal Government has introduced the Secure Jobs Better Pay Bill 2022 to amend the Fair Work Act 2009 (Cth) (FW Act).

Many of its provisions seek to implement the workplace relations changes that were the subject of Labor’s election policy commitments, including abolishing the Australian Building & Construction Commission (ABCC) and Registered Organisations Commission (ROC) and improving job security and gender equity. Other changes give effect to reform proposals debated in the recent Jobs & Skills Summit a few months ago, and a further tranche of changes dealing with labour hire and the gig economy is slated to be introduced in 2023.

In the coming weeks, we will deep dive into each of these changes to help you understand the possible impact on your organisation. The changes, if passed through Parliament, will have far-reaching implications on the daily and transactional people functions, and the strategic industrial and people landscape. With the Greens indicating support for the Bill, the Government only needs the support of a single cross-bencher to pass the Bill through Parliament. This may require the Bill to be referred to a Senate Committee.

The Commonwealth Parliament also passed the Fair Work Amendment (Paid Family and Domestic Violence Leave) Bill 2022 (FDV Bill) on 27 October 2022. This follows its election commitment to introduce a universal paid entitlement to family and domestic violence leave (FDV leave) for national system employees. These changes will have significant implications for payroll systems and HR records, and supervisors will need to equip themselves with the right skills to manage these disclosures. Jump to our summary of the FDV Bill here.

This first article provides a summary of the changes arising from the two Bills. If you wish to discuss these developments with us, please get in touch with us here or contact one of our Workplace Relations & Safety partners at the end of this article.

Secure Jobs Better Pay Bill

If passed, the legislation will bring significant changes to the industrial landscape for all participants. We set out the key changes below.

Bargaining and collective agreements

The legislation will:

  • simplify the Better Off Overall Test (BOOT) in various ways including, by allowing the BOOT to be applied globally so that it is no longer a line-by-line comparison between the proposed agreement and the modern award. The Fair Work Commission (FWC) will also have the power to directly amend or remove a term in an agreement that does not meet the BOOT and to reassess the BOOT if there has been a material change in working arrangements that were not properly considered during the approval process
  • simplify the current pre-approval requirements employers must meet for an enterprise agreement to be approved by the FWC with focus on a broader requirement of genuine agreement from employees covered by the agreement
  • simplify the correction of errors, defects and irregularities in enterprise agreements
  • exclude persons and employee organisations from bargaining where they have contravened the FW Act in the preceding 18 months
  • make multi-employer bargaining easier in government-funded sectors, such as those in the NDIS, aged care and child care sectors, as well as bargaining by two or more employers with common interests and single interest employer authorisation to bargain together for a single enterprise agreement
  • enable a separate stream of multi-employer bargaining to be available for other employers, with limited rights to take protected industrial action and greater access to FWC if bargaining stalls, including expanded FWC powers of compulsory arbitration on discrete issues in dispute
  • impose restrictions on parties seeking termination of an enterprise agreement that has passed its expiry date (except for the “Zombie” agreements made under the old WorkChoices legislation, which are likely to be extinguished by 2025) and preserve termination entitlements for certain employees whose enterprise agreements have been terminated (in certain circumstances)
  • promote conciliation of disputes and arbitration and FWC intractable bargaining declarations for disputes where there is no reasonable prospect of the bargaining parties reaching an agreement
  • change ballot and notice requirements when taking industrial action.

Fixed term contracts

The legislation will:

  • make job security an express objective of the FW Act
  • limit the use of fixed term contracts for the same role to two consecutive contracts or one with a maximum duration, including renewals, of two years. Exceptions will apply where fixed term contracts have a legitimate purpose, such as where the contract is related to a specific time period or project, or to manage an expected but temporary surge in work, or where a modern award includes a term permitting fixed term contracts (an employer that contravenes these provisions will attract liability to remedial orders and a penalty)
  • require employers to provide to new employees before, or as soon as practicable after, entering into a fixed term contract the Fixed Term Contract Information Statement, to be drafted by the Fair Work Ombudsman.

Prohibiting sexual harassment at work

The legislation will:

  • amend the FW Act to prohibit sexual harassment in connection with work, including against a worker, prospective worker or a person conducting a business or undertaking (PCBU), and extends to sexual harassment by third parties, such as customers or clients, against a worker, prospective worker or a PCBU (although sexual harassment against third parties, e.g. by a worker against a customer, will remain exclusively regulated by anti-discrimination laws)
  • create a new dispute resolution framework (modelled on the framework that applies to general protections dismissal disputes) to deal with sexual harassment disputes, with a time limitation of 24 months after the contravention
  • empower the FWC to make stop sexual harassment orders to protect applicants from future harm, as well as deal with the dispute by mediation or conciliation, making a recommendation or expressing an opinion
  • where a dispute is not resolved, the FWC will issue a certificate, after which the dispute may proceed to arbitration or court.

Flexible work

The legislation will:

  • permit employees to request a flexible working arrangement when they, or a family member, are experiencing family or domestic violence
  • in conjunction, there will be requirements on employers to respond to these requests in certain terms within 21 days
  • introduce a dispute resolution process for the FWC to arbitrate and make orders where an employer has refused an employee’s request for a flexible working arrangement or did not respond to the request within 21 days.

An employer that contravenes these provisions will attract liability to remedial orders and a penalty.

Prohibiting pay secrecy

The legislation will:

  • give employees a positive right to disclose (or not disclose) information about their own remuneration and any related terms and conditions of their employment to any other person, as well as to ask other employees (whether or not they work for the same employer) about their remuneration and other related terms and conditions of their employment
  • invalidate provisions in employment contracts that would be inconsistent with the above positive rights
  • create a new workplace right in the FW Act to protect against adverse action. This means if an employee is subject to adverse action because the employee disclosed their remuneration, the employee can bring a general protections claim against the employer.

The legislation also prohibits employers from including these pay secrecy terms in a contract of employment entered into after the commencement of the legislation. An employer that contravenes this prohibition will attract liability to remedial orders and a penalty.

Anti-discrimination and special measures

The legislation will:

  • make gender equity an objective of the FW Act to guide the FWC in exercising its various powers, particularly in relation to award-making and wage-setting
  • introduce three further protected attributes into the anti-discrimination provisions in the FW Act – breastfeeding, gender identity and intersex status
  • permit a term in an enterprise agreement that is a “special measure to achieve [substantive] equality” without it being discriminatory
  • establish two new expert panels in the FWC to address the gender pay gap in the care and community sector and to advise the FWC on pay equity
  • give the FWC greater authority to order pay increases in sectors dominated by female workers through an “equal remuneration principle” that will consider gender when assessing the value of work.

Misleading job advertisements

Employers will be prohibited from advertising a position with a rate of pay that would contravene the FW Act or instrument (for example, a modern award). The provision would also require a job advertisement where a piecework rate is being paid to specify the rate of pay and include a statement that a periodic rate of pay is payable in relation to the employment.

A defence of “reasonable excuse” for non-compliance with the advertisement requirements will apply and an employer is protected from being penalised multiple times for the same breach. The FW Inspectors will also have the power to issue compliance notices.

An employer that contravenes these provisions will attract liability to remedial orders and a penalty.

Other changes

The legislation will abolish the ROC and the ABCC. It will also increase access and eligibility to small claims proceedings under the FW Act by raising the cap on what can be awarded from $20,000 to $100,000 (excluding interest) and permitting an order for costs for a successful applicant’s filing fees.

Fair Work Amendment (Paid Family and Domestic Violence Leave) Bill 2022

The FDV Bill, which was passed by the Commonwealth Parliament on 27 October 2022, amends the current unpaid FDV leave provisions of the FW Act to increase the current entitlement of five days of unpaid FDV leave to 10 days. This entitlement will commence from 1 February 2023 for most employers. However, small businesses (i.e. employers with fewer than 15 employees, including regular casuals) have been granted until 1 August 2023.

The entitlement to paid FDV leave will also be available to casual employees, a departure from the general position that casual employees are not entitled to paid leave benefits.

Employees are entitled to take their entitlement to paid FDV leave in limited circumstances where the employee requires leave to deal with the impacts of family and domestic violence which is impractical for the employee to do outside their ordinary hours of work.  

The definition of “family and domestic violence” for the purpose of FDV leave has also been expanded to include violent, threatening or other abusive behaviour by members of the employee’s household, as well as current and former intimate partners (in addition to a close relative of the employee).

The entitlement will be paid at the employee’s full rate of pay as if the employee had not taken leave. This means that the relevant rate of pay should include allowances, loadings, overtime/penalties, bonuses and incentives or any other monetary entitlements in relation to the performance of work. Casual employees will be entitled to be paid for FDV leave taken on any day that a casual was rostered to work (being a shift which has been offered by the employer and accepted by the employee).

The entitlement will not accrue from year to year. Instead, the entitlement to 10 days of paid FDV will “refresh” after each 12-month anniversary of an employee’s employment. 

Notice and evidence requirements apply to the entitlement, as well as confidentiality in respect to the notice and evidence provided by an employee. There will also be prescriptive provisions made by way of regulations in relation to the recording of FDV leave on an employee’s pay slip.

The amendments also include a protection from an employer taking adverse action against an employee in relation to family and domestic violence. These amendments will also be subject to an independent review 12 months after the FDV leave entitlements commence.

If you have any questions or wish to discuss these developments with us, please get in touch with us here or contact one of our Workplace Relations & Safety partners below.

Authors: Charles Power & Megan Cant

The information in this article is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

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