The imminent IR law change of Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (Bill) is upon us as the crossbench and Greens provide support to the Bill in the Senate.
There are a number of headline changes that have already incited a lot of discussion, such as:
- The final nail in the coffin for the construction industry watchdog, Australian Building and Construction Commission, with its powers shifting to the Fair Work Commission;
- The set up of an Economic Inclusion Advisory Committee to examine the suitability of income support payments ahead of each federal budget;
- Preservation of the BOOT (Better Off Overall) Test, that is with any new enterprise bargaining employees will not go backwards in new negotiations;
Putting aside the headlines, here are some of the more practical changes that employers need to be aware of — and get ready for:
Pay secrecy (and therefore transparency)
We already foreshadowed this potential change in a previous NB Employment Law article with the prohibition of “pay secrecy” clauses and the ability for employees to ask and disclose their remuneration. This will also form a workplace right, which has some consequences in the General Protections provisions.
There are a number of ramifications for this. Firstly, confidentiality clauses in contracts that set out remuneration as confidential will not be prohibited under the proposed Bill. Secondly, such clauses will have no effect.
This causes some consternation from a number of vantage points:
- Rewarding discretionary effort;
- Succession planning;
- Keeping up with market salaries;
- Using increases in pay to retain key personnel;
- Creating a workplace culture where staff are constantly asking for pay rises (at least initially) and potentially causing toxic behaviour as staff get paid different remuneration.
On the other hand, the purpose of this transparency is twofold; the first being that gender equity has been put forward as a key object of the Bill. The argument here is that pay transparency will generally lift the remuneration of all staff whatever gender they may be.
The second purpose applies to contexts such as where two people are working on one site. There may well be one employee who works for the Principal while the other is a labour-hire employee. The idea of this potential transparency change is that if they do the same work (with all else being equal), the remuneration should be – in theory – the same.
Contract reviews and communication with staff will be integral to combat this change.
Sexual harassment
The Bill expressly prohibits sexual harassment and is a natural extension of the workplace health and safety laws – in particular, it specifies that unlawful sexual harassment and discrimination are work health and safety hazards.
The Bill stresses the positive obligation of employers to manage the psychosocial risks and take all reasonable steps to eliminate sexual harassment. This is a much more proactive obligation and although there have been avenues in the past in unfair dismissal, general protections and discrimination, this Bill provides more express provisions for “stop sexual harassment orders” – similar to the current FWC workplace bullying jurisdiction.
However, one prime difference between the bullying jurisdiction and the new sexual harassment provisions is that there is a compensatory avenue.
The new provisions also capture behaviours that are not directed at an individual, such as sexual innuendo, banter of a sexual nature, sexualised jokes and displays of offensive material – which would constitute a breach.
Employers and human resources must expect that sexual harassment complaints will likely increase – and unlike bullying complaints, there is a direct avenue for compensation for such complaints.
This increases the risk substantially, and policies – in particular, management training – will be integral.
Flexible workplace requests
As part of the post-covid 19 workplace – and with employer branding, the war for talent and “quiet quitting” being headlines across all Australian workplaces – flexibility has some extended protections under the Bill.
The Bill will enable employees to directly arbitrate any decisions on flexible workplace arrangements in the Fair Work Commission if it cannot be resolved in the workplace. This is a guaranteed dispute resolution mechanism that many outside of Enterprise-Agreement-covered employees have not been able to access.
In particular, it will speed up the process of making a decision for a request, with a requirement to either approve or reject the request in writing within 21 days.
Flexible working arrangements, such as carer responsibilities and family or domestic violence, obtain an extension where an employee may request a flexible working arrangement if the employee has a disability or where a member of the employee’s immediate family or household, experiences family or domestic violence.
Enterprise bargaining
There has been no doubt that many Employers have found the current bargaining system ineffectual and of negligible commercial value. The new changes saw a number of employer and industry associations provide submissions on the proposed changes.
The biggest change is the single-interest bargaining authorisation. It will allow the making of multi-employer agreements with a group of employers, such as franchisees, who share “clearly identifiable common interests”.
This change was particularly pushed by the Union movement to allow traditionally non-unionised workplaces to negotiate as a collective. Employers, especially those in franchise or quasi-franchise arrangements, should expect an uptick in Union-initiated bargaining with multiple employers. Those employers should be looking at legal advice as a matter of urgency to mitigate liability and risk.
Thankfully, small businesses with less than 20 staff will be excluded (one of the last-minute changes from the crossbench) from the multi-employer bargaining. Furthermore, businesses with less than 50 staff can opt out of the bargaining, with the onus on Unions to set out a case as to why they should be included.
Another change that may affect companies with long-expired enterprise agreements is that a majority-support determination will no longer be required and a Union can initiate bargaining after 5 years have lapsed (past the nominal expiry date).
Fixed term contracts
Fixed term contracts have come under the microscope with the aim of preventing rolling contracts and, in principle, providing better job security.
Namely, any fixed term contracts exceeding two years will be restricted and require an identifiable term of termination. Some of the restrictions include:
- Changes to the period of time or terms of a fixed term contract;
- Delaying re-engaging an employee for a period;
- Changing the nature of the work or tasks the employee is required to perform.
There are exclusions, including one-off government-funded positions, training arrangements and contracts for distinct and identifiable tasks expressly permitted under a modern award.
Other requirements include:
- A ‘Fixed Term Contract Information Statement’ to be issued;
- Prohibition for longer than 2-year fixed term contracts;
- Requirement for employers to issue a new ‘Fixed Term Contract Information Statement’ to employees engaged for a fixed or maximum term;
- Prohibition of fixed term or maximum term contracts for a total of more than two years (including under rolling contracts or extension/s) and a right to renew the contract more than once; and,
- Rendering ineffective any contract that breached these prohibitions (subject to exceptions, e.g. if an applicable modern award expressly permits a particular provision).
Employers with regular fixed term contracts and non-government-funded positions should be careful about their engagement of fixed term contracts. The above restrictions will need to be taken into account because penalties could be as high as $82,500, or $16,500 for an individual.
Jonathan Mamaril is a Director with NB Employment Law, leading the Employment Law and Workplace Relations team. Jonathan assists employers in mitigating risk and liability and advises clients on all aspects of Employment Law. His focus is on being practical and providing value for clients through education and training; and advising on matters to prevent problems from occurring and solve problems when matters become litigious and difficult.