Late in 2022, significant changes to Australia’s industrial relations system became law and will impact all businesses at various stages throughout 2023.
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (Amendment Act) was passed by the Commonwealth Parliament on 2 December and received Royal Assent on 6 December 2022.
The Amendment Act introduced major changes to the Fair Work Act 2009 (Cth) (FW Act) and other laws.
Further details regarding the date on which each of the changes take effect is shown below along with a discussion on some of the key amendments, and how they will affect businesses:
Ai Group was actively engaged in confidential consultations with the Department of Employment and Workplace Relations regarding the development of the Amendment Act. We also lodged the following submission to a Senate inquiry into the proposed legislation:
Available resources for Members
Ai Group Members can refer to the following exclusive resources to help them navigate the significant changes introduced by the Amendment Act:
Ai Group and Ai Group Workplace Lawyers can provide detailed advice and representation regarding the Amendment Act and any workplace issue business may have. For expert assistance please contact us or call 1300 55 66 77 to arrange an initial consultation.
Members who wish to discuss the Government’s reform agenda more broadly, should contact Brent Ferguson, Ai Group’s Head of National Workplace Relations Policy.
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Ai Group and Ai Group Workplace Lawyers are available to assist all organisations, at commercial rates, in providing detailed advice and representation regarding the Amendment Act and any other workplace issues they may have.
Amendment Act - Operative dates of major changes
The following list provides the commencement dates for the various changes introduced by the Amendment Act:
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7 December 2022
- Changes to initiating bargaining for single-enterprise agreements
- The FWC can deal with errors in enterprise agreements (EAs)
- Termination of EAs after the nominal expiry date and sunsetting of "Zombie" Agreements
- Pay Secrecy provisions commence (with transitional arrangements)
- Prohibition on job advertisements that breach the FW Act.
- New protected attributes added to the anti-discrimination framework
- Changes to equal remuneration principles and the Objects of the FW Act in respect of pay equity
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Earlier of 6 February 2023 or day to be proclaimed
- Abolition of the ABCC and the transfer of regulatory functions to the FWO.
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6 March 2023
- Prohibition on sexual harassment in connection with work
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Earlier of 6 March 2023 or day to be proclaimed
- The establishment of two new FWC Expert Panels
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6 June 2023
- Changes to flexible work and arbitration of disputes
- Changes to requests for extension of unpaid parental leave and dispute resolution
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Earlier of 6 June 2023 or day to be proclaimed
- New provisions for multi-enterprise bargaining commence
- Changes to the EA Approval Processes and the BOOT (except dealing with errors in EAs)
- Amendments to industrial action commence
- Intractable bargaining disputes and arbitration
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1 July 2023
- Changes to the small claims jurisdiction
- The establishment of the National Construction Industry Forum
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Earlier of 6 December 2023 or day to be proclaimed
- Limitation on fixed term contracts
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Other
- New Paid Family & Domestic Violence Leave Payslip Requirements
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Termination of enterprise agreements
What do the new laws do?
The new laws introduce a significantly more restrictive test for the termination of an enterprise agreement after its nominal expiry date.
Further detail regarding these changes is available in our Termination of Enterprise Agreements Summary.
How will this impact business?
- When enterprise bargaining has reached a stalemate, employers have traditionally had the option of seeking to terminate an enterprise agreement that has passed its nominal expiry date
- The more restrictive test for terminating an expired enterprise agreement means that if bargaining is reaching a stalemate, employers will need to find other sources of leverage to progress bargaining.
How can we help?
Ai Group can help by:
- Supporting you in establishing a clear bargaining strategy, including plans for what levers you have available to you if bargaining reaches a stalemate
- Assisting you in understanding the circumstances in which you can apply to have an enterprise agreement terminated
- Providing strategic advice around the merits of pursuing the renegotiation of a nominally expired enterprise agreement
- Supporting you in negotiating a new enterprise agreement.
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Multi-enterprise bargaining
What do the new laws do?
The new laws significantly expand the circumstances in which multi-enterprise bargaining is available. Following the commencement of the changes, there will be three streams of multi-enterprise bargaining:
- Supported bargaining, where the Fair Work Commission is satisfied that it’s appropriate for employers to bargain together, having regard to matters including the pay and conditions within the relevant sector and whether the employers have clearly identifiable interests
- Single interest employer bargaining, where the Fair Work Commission is satisfied of matters including that the employers are either franchises, or have clearly identifiable common interests and it is not contrary to the public interest for the employers to bargain together
- Cooperative workplace bargaining, where two or more employers agree voluntarily to bargain together.
Protected industrial action will be permitted to be taken in the ‘supported bargaining’ and ‘single interest employer’ streams.
Further detail regarding these changes is available through the following Summaries:
How will this impact business?
- The new laws mean that there will be significantly greater opportunities for employers to be pulled into enterprise bargaining with other employers, regardless of whether the employer has consented to this.
- This means that employers may face a situation where their terms and conditions are no longer determined at an enterprise level and are instead generated at an industry level, potentially resulting in the employer having a significantly reduced ability to influence the applicable terms and conditions for their business.
- Once supported bargaining and single-interest employer agreements start being made new employers may be roped into agreements, where the majority of their employees support this. In many instances this will be able to occur regardless of whether the employer has consented to this (with some protections on roping-in for employers with less than 20 employees, as well as employers of all sizes who have an existing in-term single enterprise agreement).
How can we help?
Ai Group can help by:
- Working with you to establish your bargaining strategy, and how you can best position yourself to avoid being caught in a multi-enterprise agreement, if this is what you’re seeking to achieve
- Assisting you with negotiating and drafting your enterprise agreement, as well as supporting you through the process of having the agreement approved by the Fair Work Commission
- If attempts are made to pull you into multi-enterprise bargaining, supporting you to manage this process, including those steps that are available to you to resist such an application if appropriate.
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Flexible work
What do the new laws do?
The new laws change the rules relating to employee requests for flexible work arrangements work substantial ways, including:
- Firstly, expanding those circumstances in which a request for flexible work arrangements can be made under the National Employment Standards (NES), and
- Secondly, introducing new procedural obligations on employers in relation to how they respond to such requests (and an ability for the Fair Work Commission (FWC) to arbitrate an outcome where these requests result in a dispute).
- Introducing significant new financial penalties being imposed upon an employer who inappropriately rejects and employee request.
Further detail regarding these changes is available in our Flexible Work Arrangements Summary.
How will this impact business?
- The changes will introduce to the NES a process which employers must follow when a flexible working request is made, including requirements to take steps such as:
- Genuinely trying to reach an agreement with the employee to find a flexible way of working that will accommodate their personal circumstances; including discussing this with them, and
- Providing written reasons for any refusal within 21 days of receiving the request, as well as outlining alternative flexible arrangements that could be accommodated (if any) and information about how flexible work disputes can be referred to and resolved by the FWC.
- If the parties are unable to resolve matters within the workplace, the FWC will also have the power to arbitrate an outcome, meaning that it will determine the applicable working arrangements for the relevant employee.
How can we help?
Ai Group can help by:
- Working with you to review and update your existing policies and templates regarding flexible working, to ensure that they reflect the new process requirements
- Supporting you to review and prepare a response to any flexible working request that you receive
- Providing advice around the circumstances in which you refuse a flexible working request.
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Prohibition on pay secrecy
What do the new laws do?
The new laws made two changes in relation to pay secrecy:
- Firstly, by creating a new workplace right allowing employees to ask one another about, and disclose, their remuneration and other conditions of employment reasonably necessary to determine remuneration outcomes– although employees are not required to disclose their remuneration if asked. Employees with an existing pay secrecy obligation under an employment contract entered into before 6 December 2022, only access this right once their contract is replaced or varied (for any reason).
- Prohibit an employment contract entered into after 6 December 2022, to contain terms that provide that remuneration must be kept secret; and provide that terms in a fair work instrument or contract of employment that contravene the pay secrecy requirements have no effect (subject to transitional arrangements for contracts).
Further detail regarding these changes is available in our Pay Secrecy Summary.
How will this impact business?
- In some industries, it is standard practice to require employees to keep their remuneration secret. Under these changes, employers are no longer permitted to take this approach for new employees, or any employee who has a pay secrecy obligation in an existing contract once that contract is varied. From 6 June 2023, employers will be liable to a civil penalty if pay secrecy terms are included in contracts made after that date, as well as those entered into since 6 December 2022.
- Employees (who are not covered by a pre-existing pay secrecy obligation) will be able to ask one another about their remuneration, and will be protected from any adverse action if they do so – but will not be required to disclose their remuneration and may still opt to keep this information confidential.
- However, where an employee does decide to disclose their salary, this may create difficulties for employers who may be faced with challenges from their employees around why different rates of pay exist. This may result in more requests for pay rises.
How can we help?
Ai Group can help by:
- Working with you to review your contracts of employment to ensure that any terms which require pay secrecy are removed
- If you receive a complaint regarding differential rates of pay, support you in responding to this to explain the rationale behind any differences.
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Fixed term contracts
What do the new laws do?
The new laws significantly restrict the ability of employers (with some exceptions) to engage employees under fixed term contracts by limiting the maximum duration of a fixed term contract to the shorter of two years or two successive contracts.
Where a new contract (including a contract that is a renewal or extension of an earlier contract) is made on or after 7 December 2023 in breach of these provisions, the term in the contract that states it will terminate at a particular time will be taken to have no effect; in practical terms, this means the employee will become a permanent employee.
Employers must give current and prospective employees a Fixed Term Contract Information Statement, which is produced by the Fair Work Ombudsman and available here.
Further detail regarding these changes is available in our Limitations on Fixed Term Contracts resource.
.How will this impact business?
- Employers who currently rely on fixed term contractors need to determine whether they will be able to continue those practices in relation to new fixed term arrangements and extensions of any existing fixed-term arrangements entered into after the new restrictions commence (7 December 2023, unless an earlier date is proclaimed).
- Where there is a current practice to use successive fixed term contracts, and an employer wishes to be able to continue that practice for new arrangements (or contract extensions) entered into after the changes commence, they will need to consider whether any of the exemptions apply and if not, how they can restructure the work to comply with the restrictions on fixed term contracts.
How can we help?
Ai Group can help by:
- Working with you to establish whether exemptions apply in relation to the types of employees you typically (and might in future) engage on a fixed term basis, to determine whether you will be able to continue to employ them on a fixed term basis without being subject to the new restrictions
- Support you in updating your practices and standard employment contracts for use once the restrictions commence, to ensure compliance with the new laws.
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