The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill (the “Bill”) has passed parliament and brings into force the most significant reforms to the Fair Work Act 2009 (“FW Act”) since it was introduced. The workplace reforms aim to deliver the Government’s agenda of providing more secure jobs and better pay for Australian workers.

All employers will be affected by the Bill and have little time to get across the detail of the reforms, with many of the changes coming into effect immediately (although some of the changes will allow up to 12 months for compliance).

The areas of reform are broad and while there is a focus on bargaining and gender equity the reforms also encompass contractual terms, restrictions on the use of fixed-term contracts and increasing the powers of the Fair Work Commission (“FWC”). A follow-up trance of legislative amendments is expected in 2023, which the Government says will “close the loopholes that are undermining job security and wage growth”.

Enterprise bargaining and industrial relations

Some of the key bargaining reforms include:

• the introduction of new “streams” for multi-enterprise bargaining, which provides employees and unions with greater scope to compel employers with common interests to come together and negotiate an enterprise agreement;
• changes to the enterprise agreement approval process which includes the removal of some pre-approval steps, as well as updates to the Better Off Overall Test (the “BOOT”). For example, the FWC will be required to undertake a global assessment rather than a line-by-line assessment of whether an employee is considered “better off”;
• expanded powers for the FWC to be involved in the bargaining process, including new powers to arbitrate bargaining disputes; and
• changes to the criteria to terminate an enterprise agreement which will reduce an employer’s ability to apply to the FWC to terminate an expired enterprise agreement.

Gender equity

The Bill implements some of the remaining recommendations of the Australian Human Rights Commission’s Respect@Work report. The reforms are in addition to the recent Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill 2022 which brings into force a number of amendments to the Sex Discriminaton Act 1984. Most significantly, the positive obligation on employers to take reasonable steps to eliminate sexual harassment in the workplace (read our article about these changes here).

The Bill expressly prohibits sexual harassment in connection with work. It prohibits the sexual harassment of workers (which includes employees, but also extends to contractors, sub-contractors, trainees etc.) and prospective workers. The reforms also give workers the option to make an application for the FWC to deal with a sexual harassment dispute. Where the parties agree, the FWC may arbitrate the dispute and make Orders, including an Order for compensation.

Employment relations

The reforms introduce a number of changes which will affect the employer/employee relationship. These changes will require employers to take immediate steps to amend template contracts and review existing contracts, policies and procedures. These changes include:

• providing employees with the right to discuss and disclose their pay with colleagues;
• higher threshold requirements for employers who wish to reject flexible work arrangement requests and the ability of the FWC to make a decision in relation to a flexible work arrangement dispute; and
• capping fixed-term and maximum-term contracts to no longer than 2 years.

While the capping of fixed-term and maximum-term contracts is significant, there are numerous exemptions, which mean that employers will be able to continue using fixed-term contracts in certain circumstances. For example, where an employee earns above the high-income threshold.

 SPECIAL EVENT

PCS Client Briefing: Australia’s New Workplace Laws

On 9 February 2023, PCS will be running a half-day training program specifically targeted at executives, senior managers and HR professionals. The program will:

• provide participants with a comprehensive review of the reforms;
• examine what employers need to do now to ensure compliance with the new legislation;
• discuss the need for employers to formulate an industrial relations and employment relations strategy in response to the reforms; and
• highlight the opportunities for employers.

Please review the agenda for the training program and register here. Spaces will be limited.

Kirryn West James, Director and Vanessa Yol, Graduate Associate