On 2 December 2022, the Australian Federal Government passed the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (Bill).
On 6 December 2022, the Bill received royal assent and became the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Act). The passage of this Act marks the most extensive industrial relations reform seen since the introduction of the Fair Work Act some 13 years ago.
While the amendment has come out with a lot of changes, some of the important ones and of relevance to employer has been highlighted below:
|Changes||What it means for Companies||Date of commencement|
|Changes to fixed/maximum term contracts
Employers will be prohibited from engaging an employee on a fixed/maximum term contract of more than two years, two such contracts that cumulatively exceed two years, a contract that allows for renewal so that the employee will be employed for more than two years, or on consecutive contracts of employment (where the employee is performing the same or substantially similar work under the consecutive contracts). The prohibition also applies even if there is a gap in employment, but there is “substantial continuity” between two periods of employment.
This is not an absolute prohibition, and the Act contains prescribed exceptions to the two-year rule.
Under the Act, employers are prohibited from making changes to the timing or terms of a fixed/maximum term contract, or not re- engaging an employee, to avoid the operation of the section, with civil penalties attaching to those that contravene these safeguards. The FWC (Fair Works Commission) will also be given additional powers to deal with disputes under these new provisions and employers will also be required to provide a “Fixed Term Contract Information Statement” to a prospective employee who is entering into a fixed/maximum term contract.
|The amendment presents a major change to how employers can structure their workforces.
In sectors that use fixed/maximum term, these changes have the ability to substantially impact common employment practices. The changes will require the introduction of processes to ensure that whenever a business engages a fixed/maximum term employee and no relevant exemption applies, the contract complies with the new provisions. This could include additional training and information sessions for HR practitioners and business partners whose duties include preparing contracts and hiring employees, and perhaps system-based solutions to monitor service and flag potential breaches.
|A day to be fixed, or the day after 12 months from the date of Royal Assent.|
|Pay equality and reducing the “gender pay gap”
||In relation to pay transparency, employers will need to consider how transparency of wages might impact their reputation, the morale of staff and relationships between staff. Consideration should be given to whether any changes are required ahead of the commencement of these reforms.
Employers should be aware that the amendments include a civil remedy provision where an employer enters into a contract of employment which prohibits employees from discussing their pay. As such, employers should urgently review their template contracts of employment. More broadly, employers may wish to review their remuneration policies and company messaging around remuneration.
In relation to pay equality, it is also an opportune time to consider how your organisation approaches this topic, and whether there is any pay discrepancy between genders.
|The day after the Royal assent|
|Respect@Work reforms and sexual harassment
The new amendment implements the remaining recommendations in the Respect@Work report by introducing an express prohibition for a person to sexually harass another person in connection with work. Similar to the anti-bullying jurisdiction that has existed for some 10 years now, a person may make an application to the FWC to deal with a dispute about an alleged contravention of this Part of the FW Act, including by making a stop sexual harassment order. This process generally requires the FWC to deal with the dispute within 14 days of the application being made, and requires the FWC to first deal with a dispute by conciliation or mediation.
If, following taking such initial steps, the FWC is satisfied that all reasonable attempts to resolve the dispute have been unsuccessful, it may issue a certificate to that effect. The FWC is then empowered to arbitrate the dispute by consent, or otherwise an application may be made to a Federal Court to deal with the dispute within 60 days of a certificate being issued. An order may be made if a finding is that an aggrieved person has been sexually harassed, and there is a risk that they will continue to be sexually harassed by the person(s).
The Act clarifies that the sexual harassment provisions will operate concurrently with State and Territory law.
|The prohibition on sexual harassment in connection with work will operate in conjunction with the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Act 2022, which introduces a positive duty on employers and PCBUs to take reasonable and proportionate measures to eliminate, as far as possible, unlawful sex discrimination, sexual harassment, sex-based harassment, work environments that are hostile on the ground of sex, and victimisation.
Employers will be required to manage the risk of sexual harassment in the workplace in the same way that safety risks are managed, with risk identification, assessment, elimination, and ongoing review of the effectiveness of controls.
Note that employers can also be held vicariously liable for the acts of their employees and agents within this new jurisdiction (unless they can demonstrate that they took all reasonable steps to prevent such sexual harassment occurring). Steps such as ongoing training, regular check ins with employees and updating policies and procedures are all part of an employer’s toolkit to demonstrate that it has taken reasonable steps to avoid such conduct occurring.
|The day after 3 months from the date of Royal Assent.|
The Act makes a number of minor changes to the anti-discrimination provisions in the FW Act to bring them into line with other Commonwealth anti-discrimination legislation. The amendments involve:
|Although these reforms mirror employers’ existing obligations under Commonwealth anti- discrimination legislation, the Act serves as a timely reminder to employers to consider updating their employment policies and training in relation to anti-discrimination.||The day after Royal Assent.|
The FW Act currently has provisions that allow an employee to request a change to his or her working arrangements in certain circumstances, such as requesting a change in hours or location of work due to parenting/caring responsibilities, being over 55 years of age, or a disability. A number of changes have been made to these provisions in the Act, designed to facilitate better access to such requests, and reduce the ability of employers to reject those requests.
|Businesses must update their processes and train HR staff on these changes. The Act requires the provision of more detailed information and prescribes tighter timeframes for responding to a request and employers will need to familiarise themselves with and prepare for the introduction of these new regimes, including the dispute settlement powers. There are significant penalties for non- compliance.||The day after 6 months from the date of Royal Assent.|
The Act provides that an employee may request an employer to agree to an extension of unpaid parental leave for a further period of up to 12 months following the end of available parental leave.
Requests can only be refused on reasonable business grounds (with the grounds of refusal to be explained to the employee).
|Businesses must update their processes and train HR staff on these changes. The Act requires the provision of more detailed information and prescribes tighter timeframes for responding to a request and employers will need to familiarise themselves with and prepare for the introduction of these new regimes, including the dispute settlement powers. There are significant penalties for non- compliance.||6 months from the date of Royal Assent.|