Reforms to industrial relations laws have been high on the Labor government’s agenda since its election in May 2022, and the recent passing of the Secure Jobs, Better Pay Bill is cementing a lot of those promises. Here’s what HR needs to know about the first wave of reform.

Editor’s note: This article has been updated and was originally published on 21 November 2022.

The first tranche of industrial relations (IR)  reforms has landed with the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill, tabled in Parliament on 27 October 2022 and passed by the Federal government on 2 December 2022.

The Bill includes a wide array of changes in the areas such as gender equity, job security and flexible working arrangements.

Below are some of the key areas of change that HR should be across.

1. Gender equity

There are some significant changes in the area of gender equity. Firstly, gender equity will be included as an object of the Fair Work Act and the modern award/minimum wage objective.

 Pay secrecy clauses will banned, and it will be a civil penalty contravention for an employer to include such a term in a contract or written agreement. 

The new provisions define employees’ entitlement to share pay information as a workplace right for the purpose of the general protections in the Fair Work Act.

The current equal remuneration provisions will be amended to incorporate the substance of Queensland’s equal remuneration principle, including the removal of the need for a male comparator (a direct male counterpart performing the same role whose pay demonstrates discrimination). The work value provisions will be amended to include consideration of past gender-based assumptions.

To assist the Fair Work Commission (FWC), two expert panels will be created for Pay Equity and the Care and Community Sector.

2. Flexible working arrangements

The right to request a flexible working arrangement in certain circumstances, for example to manage carer responsibilities, is currently a national employment standard (NES). However, the present provisions have been criticised for failing to include a guaranteed dispute resolution mechanism in cases where an employer has refused a request. 

The Bill includes an amendment that would enable employees to access the FWC for arbitration where disputes over requests for flexible working arrangements cannot be resolved in the workplace.

3. Sexual Harassment

New provisions prohibiting sexual harassment “in connection with work” will be enacted to implement Recommendation 28 of the Respect @Work: National Inquiry into Sexual Harassment in Australian Workplaces. The new division will include a dispute resolution process modeled on the General Protections framework. 

The provisions allowing the FWC to make “stop sexual harassment orders” will be moved into this new division. The FWC will also be empowered to make other orders, including compensatory orders to deal with sexual harassment complaints if parties agree to arbitration. 

Complaints would need to be flagged within 24 months of the most recent incident. If the FWC is unable to resolve a matter, it will issue a certificate to that effect, and the matter can progress to court.

New grounds of discrimination of breastfeeding, gender identity and intersex status will be included for purposes of modern awards and general protections provisions.

4. Job Security

Job security will now be included in the objects of the Fair Work Act.

In addition, new restrictions on the use of fixed-term contracts exceeding a period of two years will be introduced. These provisions will allow several exceptions, including contracts for specialised tasks, government-funded positions or as permitted by a modern award. 

The lower house made amendments to the Bill proposing that employers would be allowed a period of 12 months to adjust to changes to fixed-term contracts, and the anti-avoidance provisions will be strengthened by adding a prohibition on failing to re-engage an employee and instead engaging another person to do the same work.

5. Bargaining

The most contentious changes proposed in the Bill are in enterprise bargaining, and this is where the majority of public debate has been focused since the Bill was tabled. The changes include:

• Initiating bargaining: a majority support determination will no longer be required when negotiating a replacement agreement where no more than five years have elapsed and the proposed agreement covers the same group of employees.
• Types of agreements: existing provisions are to be amended for greater access to multi-employer bargaining. Participation is voluntary and industrial action is not available.
• Single interest bargaining authorisation: It is proposed to extend this stream to allow employee bargaining representatives to initiate the making of multi-employer agreements with groups of employers (such as franchisees in the same franchise) who share “clearly identifiable common interests”. Small businesses would be excluded from these provisions. 
• Supported bargaining authorisation: ‘supported bargaining’ will replace the low paid bargaining scheme which was introduced into the FW Act on inception to encourage bargaining in low paid sectors. This would permit greater FWC involvement in supervising bargaining, including access to arbitration where the FWC has made an intractable dispute declaration. 
• Industrial Action: The FWC must make an order directing the parties to attend a compulsory conference if it makes an order for a protected action ballot.
• Intractable disputes arbitration: It is proposed that a bargaining representative can apply for an intractable dispute declaration for a proposed enterprise agreement, except a greenfield agreement.
• Better Off Overall Test (BOOT): Clarification that the BOOT requires a global assessment that considers whether the terms of the agreement overall are more beneficial to employees when compared with the applicable modern award.
• Termination of Enterprise Agreements: A change to the FWC’s powers to terminate expired enterprise agreements on the initiative of employers during industrial action. The Bill proposes that s 226 be amended to require the FWC to consider whether termination of an expired agreement would be in the public interest, taking account of the following: continued operation of the agreement would be unfair for employees covered; or the agreement does not or will not cover employees; or the continued operation of the agreement will pose a significant threat to the viability of the business and that termination of the agreement would reduce redundancies.

An employer will also be required to guarantee that any employees made redundant following the termination of the agreement (and for up to 5 years) would be guaranteed the redundancy entitlements in the terminated agreement. Employers will be required to notify employees of termination of the agreement, and failure to do so would attract civil penalties.

So called ‘zombie agreements’ that remain operational as a consequence of the original transitional provisions in the Fair Work legislation would be subject to a sunset provision so they expire at the end of a grace period’ of 12 months after the commencement of the Act.

6. Institutional Changes

The Bill abolishes the Australian Building and Construction Commission and the Registered Organisations Commission, with their functions transferred to the Fair Work Ombudsman.

The lower house made an amendment to the Bill stating that a National Construction Industry Forum will be established as a statutory advisory body.

The Government has indicated that there will be further legislative proposals in the new year and a whitepaper is currently being developed by the Employment Taskforce in Treasury to be released in September 2023.

This article was republished, with permission, from Harmers Workplace Lawyers. The content was originally published on 18 November 2022. Joellen Munton is an Executive Counsel & Team Leader at Harmers Workplace Laywers, and Julie Gordon is a Solicitor.

Disclaimer: This news alert provides a summary only of the subject matter covered without the assumption of a duty of care by the firm. No person should rely on the contents as a substitute for legal or other professional advice.

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