Government reforms: ‘Secure Jobs, Better Pay’

The Government’s “Secure Jobs, Better Pay” legislation, which passed Parliament on December 2, 2022, represents a significant overhaul of workplace laws in Australia. The amendments aim to create fairer, more inclusive work environments and address long-standing issues like gender pay gaps, sexual harassment, and outdated workplace agreements. These changes affect a wide range of workplace practices, from employment contracts to bargaining processes. Here’s a detailed breakdown of the key reforms.

The Government’s legislation also simplifies aspects of enterprise bargaining, streamlining processes for initiating and approving agreements. For instance, unions and representatives no longer require a majority work determination to replace an existing single-employer agreement. Instead, they can make a written request directly to the employer, removing some administrative hurdles. The Government has published fact sheets on the Department of Employment and Workplace Relations website to help stakeholders understand these changes. Employers and workers are encouraged to consult industrial relations specialists for tailored advice.

Fixed term contracts limited to 2 years

The Government has introduced limits on fixed-term contracts, restricting their duration to a maximum of two years across all contracts for the same or similar roles. This reform prevents indefinite renewals of short-term contracts, ensuring greater job security for workers. Exceptions exist for casual employees, apprentices, trainees, high-income earners, and roles requiring specialized skills or covering peak demand periods. Employers must also provide a Fixed Term Contract Information Statement, which will be drafted by the Fair Work Ombudsman. Starting January 2023, violations of these rules could result in penalties of up to $82,500 for corporations and $16,500 for individuals. Employers should review existing contracts to ensure compliance with the new laws.

 

Gender equality and addressing the pay gap

Incorporating gender equality as an object in the Fair Work Act demonstrates the Government’s commitment to addressing systemic inequities. The removal of the male comparator requirement in Equal Remuneration Orders allows the Fair Work Commission (FWC) to consider historical undervaluation of female-dominated industries without needing direct comparisons to male workers. This change acknowledges that gender bias can exist independently of specific discriminatory practices, broadening the scope for addressing pay disparities. The FWC can also now initiate Equal Remuneration Orders without waiting for claims, signaling a proactive approach to tackling gender-based wage gaps.

Pay secrecy banned

To further promote transparency and equality, the Government has outlawed pay secrecy clauses in employment contracts and agreements. Employees are now entitled to disclose their remuneration if they choose, fostering a culture of openness and fairness. Employers must ensure that any existing contracts comply with this new requirement.

Flexible work requests strengthened

The Government’s reforms Provides stronger access to flexible working arrangements by enabling employees to seek arbitration before the FWC to contest employer decisions or where the employer has not responded to a request for flexible work conditions within the required 21 days.

If an employer refuses a request for flexible work conditions, the requirements for refusal have been expanded so that employers must discuss requests with the employee and genuinely try and reach agreement prior to refusing an employee’s request. Now, to refuse a request the employer must have:

• Discussed the request with the employee; and
• Genuinely tried to reach an agreement with the employee about making changes to the employee’s working arrangements that would accommodate the employee’s circumstances; and
• the employer and employee have been unable to reach agreement;
• the employer has had regard to the consequences of the refusal for the employee; and
• the refusal is based on reasonable business grounds.

The provisions also expand the circumstances in which an employee may request a flexible working arrangement, for example where they, or a member of their immediate family or household, experiences family or domestic violence.

Accountability for sexual harassment in the workplace

The amendments introduce stronger provisions to prevent sexual harassment and a new dispute resolution framework. Employers may be vicariously liable for acts of their employees or agents unless they can prove they took all reasonable steps to prevent sexual harassment. The amendments build on the Respect@Work report and the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill 2022 that passed through government in late November 2022.  Broadly, the amendments:

• Apply to workers, prospective workers and persons conducting businesses or undertakings; and
• Create a new dispute resolution function for the FWC that enables people who experience sexual harassment in the workplace to initiate civil proceedings if the FWC is unable to resolve the dispute.

Anti-discrimination

The Government has expanded anti-discrimination protections under the Fair Work Act, including provisions to safeguard against discrimination based on breastfeeding, gender identity, and intersex status. These changes underscore the Government’s commitment to fostering inclusive workplaces.

Aligning pay rates in job advertising with the FWA     

To address concerns about underpayment, the Government has mandated that employers covered by the Fair Work Act must advertise roles with pay rates compliant with the law. This measure ensures that job advertisements reflect accurate compensation, particularly for piecework, preventing exploitation and aligning with recommendations from the Migrant Workers’ Taskforce.

Multi-employer enterprise bargaining

The Government has introduced pathways for multi-employer enterprise bargaining to support workers in similar industries. These include supported bargaining for low-paid industries like aged care, early childhood education, and disability care, where employers often lack the resources to negotiate agreements independently. The Minister can designate eligible industries for supported bargaining, and the FWC determines whether parties can bargain collectively. Single-interest multi-employer bargaining also enables businesses with shared characteristics to negotiate collectively, provided the FWC authorizes the process and there is majority support from employees.

Supported bargaining for low paid industries

Applies to low-paid industries and is intended to support those who have difficulty negotiating at a single enterprise level – e.g., aged care, disability care, and early childhood education and care. The Minister will have authority to declare an industry or occupation eligible for supported multi-employer bargaining (MEB) and the FWC will decide if it is appropriate for the parties to bargain together. The employer does not have to give their consent to be included.

Employers cannot negotiate a separate agreement once they are included in supported multi-employer bargaining – they need to apply to the FWC to be removed from the supported bargaining authorisation.

Single interest multi-employer bargaining

Single interest multi-employer bargaining draws together employers with “common interests”. These may include geographical location, regulatory regime, and the nature of the enterprise and the terms and conditions of employment. It’s a very broad test.

Unless the employer consents, the FWC will not authorise multi-employer bargaining where it applies to a business with fewer than 20 employees. For businesses with less than 50 employees, to be excluded, the employer needs to prove that they are not a common interest employer or its operations and business activities are not reasonably comparable with the other employers.

For the FWC to authorise single interest multi-employer bargaining, the applicant will need to prove that they have the majority support of the relevant employees.

‘Zombie’ enterprise agreements

The reforms aim to phase out outdated enterprise agreements, often referred to as ‘zombie agreements,’ which remained enforceable despite being misaligned with modern awards. By sunsetting these agreements, the Government seeks to ensure that all workers benefit from fair and current employment terms. Businesses operating under these agreements must transition to updated arrangements that comply with modern awards.

The Government’s “Secure Jobs, Better Pay” reforms represent a comprehensive effort to modernize workplace laws and promote fairness, inclusivity, and accountability. While these changes bring significant benefits to employees, they also impose new responsibilities on employers. Businesses are urged to seek professional advice to navigate these reforms and ensure compliance.

Read our other articles related to the Australian Government.