On 6 December 2022, the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 received royal assent and became the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (the Act). These changes from the Secure Jobs, Better Pay Act marked the most extensive industrial relations reforms to the Fair Work Act 2009 (Cth) since its introduction.
These amendments have been embedded as objects in the Fair Work Act 2009 (Cth), forming part of the commitment of the Australian Government to improve job security and put gender equality at the centre of the workplace relations system.
Key Amendments
Prohibiting Pay Secrecy Clauses
The Act prohibits the inclusion of pay secrecy clauses in an employee’s contract of employment. This amendment also provides the workplace right for both current and future employees to share, or not share, information about their pay and employment terms and conditions. Employees are given the positive right to discuss their pay and employment terms and conditions with other employees, with the purpose of creating transparency, protecting employees from adverse action for exercising this right, and to enable employees to assess whether they are being fairly paid.
The amendments apply to new employment contracts or other written agreements entered into after 7 December 2022. Existing employment contracts that include pay secrecy terms will continue to operate until they are varied or a new contract is entered into, in which case the pay secrecy terms will cease to have effect. Current contracts of employment which do not contain pay secrecy clauses will not be impacted by these amendments.
Pay secrecy clauses included in new employment contracts that were entered into from 7 December 2022 will have no effect and will attract penalties from 7 June 2023, allowing employers time to ensure their employment contracts comply with the amendment.
Prohibiting Job Advertisements
From 7 January 2023, job advertisements that include pay rates in breach of the Fair Work Act 2009 (Cth) or workplace instrument below an employee’s minimum entitlements will be prohibited. A new civil remedy provision which allows compliance notices to be issued will also be implemented which require an employer to take specified action in relation to noncompliant advertisements.
Right to Request Flexible Work Arrangements
The Act aims to strengthen the right for eligible employees to request and negotiate flexible working arrangements. This includes an expansion of the circumstances in which employees may make a request, including where an employee, or a member of their immediate family or household, is experiencing family or domestic violence, or where an employee is pregnant. Employers have an obligation to discuss an employee’s request with them and are now also required to provide reasons for any refusal of a flexible working requests in writing. In addition, there are new limits on reasons for refusing a request. These amendments will come into effect from 6 June 2023. To view a blog summarising a recent Fair Work Commission decision relating to requests for flexible working arrangements, see this blog.
Limiting the Use of Fixed-Term Contracts
Employers can continue to use fixed-term contracts however the Act introduces limits to the use of such contracts. From 6 December 2023 (unless an earlier date is decided), employers will be restricted from using fixed-term contracts for the same role beyond two years, or two consecutive contracts of employment, where the employee is performing the same or substantially similar work under the consecutive contracts. If in breach, the contract will be valid except for the term of the contract which specifies the expiry on a set date, meaning the employee will be considered as permanently engaged. A range of exceptions exist to allow for fixed-term contracts to extend beyond these limits, which include performance of a discrete task for a fixed period, or engagement as an apprentice or trainee. To view a deeper analysis of changes affecting fixed-term contracts, see this blog.
Prohibiting Sexual Harassment in the Fair Work Act
Reflective of the positive duties for employers to prevent sexual harassment in the workplace, the changes from the Secure Jobs, Better Pay Act introduced a new prohibition on sexual harassment in connection with work will be included in the Fair Work Act 2009 (Cth) from 6 March 2023 to protect workers, prospective workers and persons conducting or undertaking a business. An employer will be vicariously liable for sexual harassment committed by employees or agents in connection with work, unless the employer can demonstrate that reasonable steps to prevent the sexual harassment were taken. The amendment also introduces broader powers to the Fair Work Commission to deal with sexual harassment disputes.
Strengthening Protections Against Discrimination
From 7 December 2022, new attributes will be included in the Fair Work Act 2009 (Cth) for protection against workplace discrimination. These amendments will allow individuals who experience discrimination in the workplace because of breastfeeding, gender identity and intersex status to pursue complaints through the Fair Work Commission.
Unpaid Parental Leave
The Act will require employers to discuss an employee’s request for an extension of unpaid parental leave when employees make a request for an extension. The employer may agree to the extension or discuss with the employee and agree to a different extension period. The employer must also respond to the request, in writing, within 21 days. The amendments also allow the Fair Work Commission to deal with a dispute about a request for an extension. These changes will come into effect on 6 June 2023.
Reforming the Equal Remuneration Provisions
In order to align with best practice considerations, the Act aims to guide the Fair Work Commission in respect of equal remuneration cases and orders, and gender-based assumptions in work value cases. The amendment aims to address and guide the Fair Work Commission to deal with gender-based undervaluation of work and allows for consideration of industry comparison and workplace instruments when hearing an equal remuneration matter.
Small Claims Process
From 1 July 2023, the Act will increase the compensation cap for small claims proceedings under the Fair Work Act 2009 (Cth) from $20,000 to $100,000 and unsuccessful party’s may be liable for the other party’s costs including filing fees.
Bargaining and Workplace Relations
One of the changes from the Secure Jobs, Better Pay Act enhances access to multi-enterprise bargaining and provides employees and unions with greater powers to force employers to bargain for agreements covering multiple employers. This is achieved through new streams, through which agreements can be made.
From 6 June 2023, the supported bargaining agreements stream will reform the existing low-paid bargaining stream to allow the Fair Work Commission to declare that an industry or occupation is eligible for supported multi-employer bargaining. When it is considered appropriate, the Fair Work Commission is required to make a Supported Bargaining Authorisation that allows employers and employees to bargain together, reducing the barriers between employees and employers that require support in accessing multi-enterprise bargaining.
Barriers have also been removed from the single interest employer authorisations stream, allowing employers and unions to apply to the Fair Work Commission for a single interest employer authorisation from 6 June 2023. The Fair Work Commission requires that a least some of the employers to be covered by the agreement are represented by a registered employee organisation, that the operations and business activities of common interest employers are “reasonably comparable” in order for an employer to be included in a single interest authorisation or agreement, and that the common interest employers bargaining together is not contrary to the public interest.
The ‘Better Off Overall Test’ (BOOT) which ensures that employees covered by an enterprise agreement are better off overall when compared to their relevant modern award, will be simplified under the Act. This will include requiring the Fair Work Commission to apply a global assessment concerning whether an employee is ‘better off’ by balancing the more beneficial aspects of the agreement against the less beneficial aspects, as well as other industry specific considerations.
From 6 June 2023, the requirements for enterprise agreement approval will be simplified, to be less prescriptive and complex. Broadly, the Act will introduce a measures to ensure broad ‘genuine agreement’ is reached for enterprise agreement approval, achieved through the requirement of the Fair Work Commission to be satisfied that an enterprise agreement has been genuinely agreed to by employees.
The power to resolve intractable bargaining disputes sooner, reducing the prospect of industrial action and providing incentive for parties to negotiate in good faith and reach agreements quickly, will be introduced for the Fair Work Commission from 6 June 2023. This includes resolving disputes dealt with under section 240 of the Act, the ‘minimum bargaining period’ exceeds nine months, if it is likely that bargaining will not progress further, and it is reasonable in all the circumstances to make the declaration.
Termination of Enterprise Agreements after the Nominal Expiry Date
The amendment reduces the ability to apply to terminate expired enterprise agreements. The Fair Work Commission will now terminate an enterprise agreement on application, if it is satisfied that it is appropriate in the circumstances and that:
- the continued operation of the agreement would be unfair to employees covered by the agreement, or
- the agreement does not, and is not likely to, cover any employees, or
- the continued operation of the agreement would pose a significant threat to the viability of the employer’s business.
Sunsetting of Zombie Agreements
All agreements made before the commencement of the Act that are still in operation will automatically terminate on 7 December 2023. By 7 June 2023, employers must give written notice to employees covered by these agreements, advising that the agreement will be terminated on 7 December 2023.
If you require assistance in identifying and managing the changes associated with the Secure Jobs, Better Pay Act in your workplace please contact our team on (02) 9181 5001 or by email at .
Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022