Changes to Industrial Relations Laws

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (‘Bill’) has now passed both Houses, and is, at the time of writing this IR Alert, awaiting Royal Assent.

 The Bill amends several Acts, including the Fair Work Act 2009 (Cth) (‘FW Act’).

Objects and Modern Awards Objective

 The Bill will insert a new object into the FW Act to ensure the workplace laws promote job security and gender equality. This new Object is one to ensure the workplace laws promote job security and gender equality.

 The Bill will also amend section 134, the Modern Awards Objective, by providing modern awards must operate to improve job security, to improve gender equality

Sexual Harassment

 The Bill will amend the FW Act and provide sexual harassment in connection with work (a worker or a potential worker) is prohibited.

 The Fair Work Commission (FWC) will be empowered to deal with a sexual harassment complaint (‘dispute’) lodged by an individual, or by an industrial association.

 In dealing with a complaint, the FWC will be able to conciliate the dispute and issue a certificate which would allow the applicant to seek the arbitration of the dispute at the FWC, or in the Federal Court / Federal Circuit Court. In addition, the FWC will have the powers to issue a compensation order against the person who has engaged in the sexual harassment and/or the employer (via vicarious liability).

 Where Royal Assent is given in December, this new FWC power will commence in March 2023.

Anti-Discrimination

 The FW Act provides an employer must not take adverse action against an employee, or a prospective employee on the basis of a protected attribute.

 A protected attribute is an attribute that a person has and cannot be subjected to discrimination due to having that attribute.

 Section 351(1) of the FW Act lists those discriminatory attributes as person’s:

•             race,

•             colour,

•             sex,

•             sexual orientation,

•             age,

•             physical or mental disability,

•             marital status,

•             family or carer’s responsibilities,

•             pregnancy,

•             religion,

•             political opinion,

•             national extraction,

•             social origin.

The Bill extends the list of attributes that are protected to include breastfeeding, gender identity and inter-sex status. The additional attributes will form part of section 351(1) from the day after the Bill receives Royal Assent.

 Fixed term contracts

 The Bill proposes to limit the use of fixed term contracts for the same role. This means employers will not be able to use a fixed term contract for a period exceeding two years, or for two consecutive contracts, whichever is the shorter period. Employers who do not comply with this limitation will run the risk of an employee being found to be a permanent employee at the end of the relevant period as referred to above.

 A number of exemptions will apply to the limited use of fixed term contracts including:

•             Contracts for specialist skills,

•             Contracts where the remuneration exceeds the high income threshold (currently $162,000 for a full-time employee), and

•             Where a modern award allows for fixed term employment.

The changes that will be brought in via the Bill will take effect on a date that is yet to be proclaimed, or 12 months from when the Bill receives Royal Assent (i.e., no later than December 2023 if Royal Assent occurs this month).

 Flexible Work Arrangements

 Eligibility requirements for an employee to request a flexible work arrangement will not change under the Bill, however, new employer obligations will be introduced into the FW Act. Those obligations will reflect obligations currently in modern awards and will represent legal obligations.

 In addition, an employee who is unhappy with their employer’s decision to not grant a flexible work request will be able to apply to the FWC to conciliate, and if needed, arbitrate the matter. This is limited to where the refusal has been made on ‘reasonable business grounds’.

 An individual employee will be able to make an application, and an industrial association will be able to do so as well.

 Changes to this National Employment Standard take effect six months after the day following the Bill receiving Royal Assent. Employers therefore have six months to prepare and update relevant policies and protocols in anticipation of these changes to section 65 of the FW Act.

 Pay Secrecy

 From the date the Bill receives Royal Assent, the following will apply:

•             Pay secrecy clauses will be prohibited in employment contracts, meaning employers will no longer be able to require employees to keep their pay and pay related conditions (i.e., working hours) confidential.

•             An employee will have the right to disclose, or not disclose, their pay and pay related conditions.

•             An employee will have the right to ask another employee about their pay and pay related conditions.

•             An employer cannot take adverse action against an employee for exercising their right to disclose, or not disclose their pay and pay related conditions.

Employers should review their employment contracts and ensure they do not include pay secrecy clauses. For existing contracts with clauses that require confidentiality, employers should check the impact of the clause, and if it does prevent disclosure, seek to vary the application of the clause.

Zombie Agreements

 Collective Agreements that were made before the FW Act took effect are commonly referred to as Zombie Agreements. Zombie Agreements did not terminate at the nominal expiry date and have had continuing legal application. The Bill provides these Zombie Agreements will automatically terminate 12 months after the FW Act is amended - which is from the day after the Bill receives Royal Assent.

Employers will be required to notify employees covered by Zombie Agreements within six months of the FW Act being amended.

 This means employers with Zombie Agreements would revert to needing to comply with the relevant modern award for their employees or negotiate new Enterprise Agreements with its workforce.

 New Equal Remuneration Panels

 The Bill will establish the following Panels:

•             Pay Equity Expert Panel; and

•             Care Community Sector Expert Panel.

Where Royal Assent is given in December, the Panels will be established in March 2023.

 Increases to Unpaid Wages Cap

 Unpaid wages claims brought before the small claims’ jurisdiction of the Federal Circuit Court are currently capped at $20,000. The Bill will increase the cap to $100,000.

 Where Royal Assent is given in December, the cap increase will occur in July 2023.

 Australian Building and Construction Commission (ABCC)

 The Bill will abolish the ABCC with the Fair Work Ombudsman to take on those functions. Where Royal Assent is given in December, this will occur in February 2023.

 Registered Organisations Commission

 The Bill will abolish the Registered Organisations Commission, and the Fair Work Commission will absorb those functions. Where Royal Assent is given in December, this will occur in June 2023.