Disclaimer: The material in this guide is of a general nature and should not be regarded as legal advice or relied on for assistance in any particular circumstance or situation. In any important matter, you should seek appropriate independent professional advice in relation to your own circumstances.
Summary of the key changes:
The Act brought significant changes to Australian employment law, primarily aimed at improving job security, enhancing pay equity, and promoting fairness in workplaces. The amendments reflect the government’s commitment to modernising the workplace relations framework, with a focus on gender equality, job security, and collective bargaining.
These amendments mark a significant shift in the direction of Australian workplace relations, aiming to balance the power between employers and employees, improve job security, enhance gender pay equity, and strengthen protections against workplace discrimination and harassment.
1. Pay Equity and Gender Equality
- Gender Equality Focus: A new objective to promote gender equality has been added to the Fair Work Act 2009. This includes addressing gender pay gaps and eliminating gender-based discrimination.
- Prohibition on Pay Secrecy: Employers are no longer allowed to enforce pay secrecy clauses. Employees now have the right to share or not share information about their pay and employment conditions with others. This change aims to enhance pay transparency and reduce gender pay gaps.
- Equal Remuneration and Expert Panels: The Fair Work Commission (FWC) has been given new powers to order pay increases in undervalued, low-paid, female-dominated industries. It also establishes a new Expert Panel on Pay Equity.
2. Enterprise Bargaining and Multi-Employer Bargaining
- Encouragement of Multi-Employer Bargaining: The amendments introduce three streams for multi-employer bargaining: single-interest employer agreements, supported bargaining, and cooperative workplace agreements. This aims to simplify the bargaining process for industries or sectors with a common interest.
- Introduction of the “Single Interest” Bargaining Stream: This stream allows groups of employers who share common interests (like location or business type) to negotiate a single enterprise agreement with their employees, improving the efficiency of the bargaining process.
- Amendment of the “Better Off Overall Test” (BOOT): Changes were made to the BOOT to make it more practical. Now, the BOOT is assessed based on the circumstances that are “reasonably foreseeable” at the time the agreement is made, reducing the burden on employers in the agreement-making process.
- Sunsetting of Zombie Agreements: The Act mandates the termination of “zombie agreements” (agreements made before the commencement of the Fair Work Act 2009), giving employers and employees a grace period of 12 months to negotiate new agreements.
3. Job Security and Fixed-Term Contracts
- Limitations on Fixed-Term Contracts: The legislation introduces a limit on the use of fixed-term contracts to a maximum of two consecutive contracts or two years. This change is intended to prevent employees from being kept on rolling fixed-term contracts and provide more job security.
- Job Security Focus: The changes include new provisions for job security by making it an object of the Fair Work Act, reflecting its importance in modern employment relationships.
4. Changes to the Fair Work Commission (FWC)
- More Power to the FWC: The FWC has been given greater authority to resolve disputes and approve agreements. It now plays a more active role in promoting bargaining and can assist parties in reaching agreements, especially in industries where bargaining has been traditionally difficult.
- Changes to the Termination of Employment Provisions: The FWC can now intervene in disputes over whether an employer can unilaterally terminate an enterprise agreement, ensuring that workers are not disadvantaged.
5. Anti-Discrimination and Sexual Harassment Protections
- New Protections Against Sexual Harassment: The Act expands protections against sexual harassment in the workplace, including express prohibitions against sexual harassment. Workers can make complaints directly to the FWC, which can issue orders to stop the harassment.
- Broader Anti-Discrimination Protections: The legislation expands the list of protected attributes to include breastfeeding, gender identity, and intersex status. This brings the Fair Work Act in line with other anti-discrimination laws in Australia.
6. Small Claims Process Enhancement
- Increase in the Small Claims Threshold: The small claims process threshold has been increased from $20,000 to $100,000. This change is designed to make it easier for workers to recover unpaid wages and entitlements through a simpler, more accessible process.
7. Termination of Employment
- Procedural Fairness Enhancements: The legislation introduces more stringent requirements for procedural fairness in cases of termination, ensuring fair treatment for employees during disciplinary and dismissal processes.
8. Expanded Definition of Family and Domestic Violence Leave
- Paid Family and Domestic Violence Leave: The Act introduces a new entitlement for employees to 10 days of paid family and domestic violence leave in a 12-month period, applying to all employees, including casuals.
Key Start Dates
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 received Royal Assent on 6 December 2022. The provisions of the Act came into effect on various dates, primarily in stages, as follows:
- 7 December 2022: Some initial provisions commenced the day after Royal Assent, including the repeal of certain outdated parts of the Fair Work Act 2009 and provisions around gender equality, changes to enterprise bargaining, prohibiting pay secrecy, new protected attributes, sunsetting of ‘zombie’ agreements, and Fair Work Commission has powers to correct errors in enterprise agreements.
- 7 January 2023: Provisions around job advertisements can’t include pay rates that breach the Fair Work Act, or a fair work instrument (such as an award or enterprise agreement)
- 6 February 2023: Abolition of the Australian Building and Construction Commission (ABCC)
- 6 March 2023: Amendments around prohibition of sexual harassment in the workplace, and creation of expert panels at FWC to focus on pay equity and the care and community sector.
- 6 June 2023: Provisions regarding changes to agreement making, changes to extending unpaid parental leave, changes to access to flexible working arrangements
- 1 July 2023: Creation of the National Construction Industry Forum, increase in monetary cap for recovering unpaid entitlements via the small claims process also became effective.
- 6 December 2023: Limitations on fixed-term contracts and the requirement to give Fixed Term Contract Information Statement.
The link below provides a timeline of key start dates for changes under the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022:
10 Key Steps Employers Need to Take
Employers must take proactive steps to ensure compliance with the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 These steps involve reviewing and updating employment policies, agreements, and practices to align with the new legal requirements.
By updating contracts, policies, training, and workplace practices, and engaging with employees, businesses can meet their legal obligations and foster a fair, equitable, and supportive work environment.
Here is a detailed guide for employers:
1. Review and Update Employment Contracts and Agreements
- Remove Pay Secrecy Clauses: Employers must remove any pay secrecy clauses from existing employment contracts and ensure new contracts do not include such clauses. Employees should be informed of their rights to discuss their pay and conditions with others.
- Limit Fixed-Term Contracts: Employers should review the use of fixed-term contracts and ensure they comply with the new limitations (no more than two consecutive contracts or a total of two years). They should assess whether current employees on fixed-term contracts need to be offered permanent roles or new contracts.
- Address “Zombie Agreements”: Employers must identify any old enterprise agreements (pre-Fair Work Act 2009) that are still in effect. These “zombie agreements” will automatically sunset by 6 December 2023, so employers need to negotiate new agreements or transition to modern awards.
2. Update Workplace Policies and Procedures
- Implement Anti-Discrimination and Sexual Harassment Policies: Employers should revise their anti-discrimination and sexual harassment policies to include the new protections for gender identity, intersex status, breastfeeding, and sexual harassment. Ensure these policies are communicated effectively to all employees.
- Establish Procedures for Flexible Work Requests: Update policies to reflect the new rights regarding flexible working arrangements. Employers must respond to requests within 21 days and can only refuse requests on reasonable business grounds after genuinely discussing alternatives with the employee.
3. Train Managers and HR Staff
- Provide Training on New Laws: Ensure that all managers, supervisors, and HR staff are fully aware of the changes brought about by the Act. This includes training on handling flexible work requests, understanding pay equity obligations, and addressing sexual harassment and discrimination complaints.
- Procedural Fairness Training: Managers should be trained on the new procedural fairness requirements related to employee terminations to avoid unfair dismissal claims.
4. Update Enterprise Bargaining Strategies
- Understand New Multi-Employer Bargaining Streams: Employers should familiarise themselves with the new bargaining options, such as single interest, supported, and cooperative workplace agreements, and consider whether they apply to their business.
- Prepare for Changes to the Better Off Overall Test (BOOT): Employers need to understand the practical changes to the BOOT assessment, which now focuses on “reasonably foreseeable” circumstances at the time the agreement is made. This may require a reassessment of current enterprise agreements and their compliance.
5. Ensure Compliance with New Leave Entitlements
- Implement Paid Family and Domestic Violence Leave: Employers must update payroll systems and policies to provide 10 days of paid family and domestic violence leave to all employees, including casuals. Ensure employees are aware of their entitlements and how to access this leave.
- Communicate New Leave Entitlements: Clearly communicate the details of the new leave entitlement to all employees and ensure that processes for applying and approving this leave are well-defined.
6. Conduct a Pay Equity Review
- Review Pay Structures and Practices: Conduct a pay equity review to identify any gender pay gaps and take steps to address any disparities. This may involve adjusting pay rates, revising job classifications, and ensuring equal pay for equal work.
- Prepare for Potential Fair Work Commission (FWC) Involvement: Be aware that the FWC now has more power to make equal remuneration orders and address gender-based pay disparities.
7. Prepare for Increased FWC Involvement
- Prepare for FWC Mediation and Dispute Resolution: Employers should be prepared for the possibility of more active involvement by the Fair Work Commission in mediating disputes, especially related to enterprise bargaining and termination of employment. This may require a more proactive approach to dispute resolution.
8. Utilise the Small Claims Process for Unpaid Wages
- Ensure Payroll Compliance: Employers should ensure that payroll systems are updated to comply with all entitlements under the Fair Work Act. This includes timely payment of wages, penalties, and other entitlements to avoid claims in the small claims process.
9. Regularly Review Compliance and Monitor Legislative Updates
- Conduct Regular Audits: Employers should perform regular audits of their employment practices, contracts, and agreements to ensure ongoing compliance with the Act. Engage legal counsel or HR consultants if needed.
- Stay Updated on Changes: The workplace relations landscape can continue to evolve. Employers should stay informed about any further legislative changes, updates, or guidance from the Fair Work Ombudsman and other regulatory bodies.
10. Engage Employees and Encourage Feedback
- Promote Open Communication: Encourage an open dialogue with employees about the changes and their rights. Engage with them during policy updates and encourage feedback to ensure the changes are understood and supported.
Stay Ahead with Fair Work Compliance! Protect your business and create a fair, equitable workplace by ensuring compliance with the latest Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022. Review your employment contracts, update workplace policies, and train your team to align with these crucial changes. Need support in navigating the new requirements? Reach out to us for comprehensive advice and tailored solutions to keep your organisation compliant and thriving!
References
To ensure a full understanding of the many changes, here are some suitable resources:
- Fair Work Ombudsman: Secure Jobs, Better Pay: changes to Australian workplace laws – Fair Work Ombudsman
- Fair Work Commission: Secure Jobs Better Pay Act – what’s changing
- Federal Register of Legislation: Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022
- Department of Employment and Workplace Relations: Secure Jobs, Better Pay – Information Sheets
- Department of Employment and Workplace Relations: Secure Jobs, Better Pay – Small business fact sheet
- Department of Employment and Workplace Relations: Secure Jobs, Better Pay – Bargaining and workplace relations
- Australian Human Resources Institute (AHRI- Members Only): AHRI Assist | Employee Conditions and Entitlements | FAQs – Secure Jobs, Better Pay
- Australian Chamber of Commerce and Industry (ACCI): Secure Jobs, Better Pay – Employer Guide to Non-Bargaining Changes
- Law Firms Specialising in Employment Law (e.g., Ashurst, Lander & Rogers, Herbert Smith Freehills, MinterEllison, King & Wood Mallesons) Example Reference: Lander & Rogers: Secure jobs, better pay: 6 June and beyond
- Australian Council of Trade Unions (ACTU): Reference: Senate Inquiry into the: Secure Jobs Better Pay Bill 2022 ACTU Submission
