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The Australian Government passes Secure Jobs, Better Pay Act 2022: What it means for your business

07 December 2022 | Insight
Legal Briefings

On 2 December 2022, the landmark Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (Bill) passed both houses of Parliament. 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 the Act marks the most extensive industrial relations reform seen since the introduction of the Fair Work Act some 13 years ago, and the impact of this legislation is significant.

While further industrial relations reform (such as on ‘same job, same pay’, among other topics) is expected to follow next year, the reforms passed are significant and will substantively impact how Australian employers structure and manage their workforces and set terms and conditions of employment.

SUMMARY OF THE REFORMS

Our full summary provides an overview of the key elements of the Act and what it means for Australian employers.

We have created two versions – one in clean, and another showing in mark-up the changes made to the Bill since it was first tabled in the House of Representatives on 27 October 2022.

Download our full summary (clean)

Download our full summary (with markups)

AMENDMENTS TO THE BILL IN THE SENATE

A significant number of changes were made to the Bill in the Senate, many of which related to the multi-enterprise bargaining provisions. For example:

  • Review - Inserting a commitment for Government to review the operation of amendments, with such a review to start within 2 years after Royal Assent;
  • Multi-enterprise bargaining:
    • Excluding small businesses with fewer than 20 employees from the single interest, multi-employer bargaining stream;
    • Adding an additional requirement to the single interest, multi-employer bargaining stream that the operations and business activities of the employers must be ‘reasonably comparable’;
    • Setting a reverse onus for the single interest, multi employer bargaining stream, in that employers with 50 or more employees must prove that they are not a common interest employer or its operations and business activities are not reasonably comparable with the other employers, in order to avoid being included in the authorisation;
    • Allowing the FWC to potentially exclude employers from the single interest, multi-employer bargaining stream if the employer is bargaining in good faith, has a history of effectively bargaining, and less than 9 months have passed since the nominal expiry date of the employer’s existing agreement;
    • Granting the Minister power to declare an industry, occupation or sector eligible for the supported bargaining stream;
    • Enabling the FWC to make orders permitting a vote on a multi-enterprise agreement despite not all employee organisations giving written approval for the vote;
    • Excluding on-site building and construction (including civil construction) from the multi-employer bargaining framework (subject to limited exceptions);
  • Better off overall test – Reinstating the requirement for the FWC to consider prospective employees (now called ‘reasonably foreseeable employees’);
  • Intractable bargaining - Redefining the ‘minimum bargaining period’ that is required before an intractable bargaining declaration can be made;
  • Flexible work - Allowing a pregnant employee to request a flexible working arrangement; and
  • Unpaid parental leave - Imposing stricter obligations on employers in responding to requests to extend unpaid parental leave, including empowering the FWC to deal with such disputes.

SUGGESTED NEXT STEPS FOR EMPLOYERS

Given many of the reforms come into effect on the date of, or 6 months after, Royal Assent, now is the time to review the reforms and ensure that your business is prepared for them.

The most pressing issues that will require your consideration are below:

Reform

What does this mean for your business?

Multi-enterprise bargaining

The Act expands the concept of multi-enterprise bargaining which means more employees will be covered by enterprise agreements and many employers will likely be forced to bargain together (including, potentially, competitors and supply chain participants). You should consider whether your organisation is likely to be susceptible to multi-employer bargaining or roping-in applications, and revise your bargaining strategies in light of the increased union leverage created by these reforms.

Bargaining generally

There are a number of changes to the enterprise bargaining framework that will significantly shift bargaining power away from employers, and require different bargaining tactics. For example, more employers will see bargaining end in the FWC given the new ‘intractable bargaining’ workplace determination jurisdiction. It will be important to revisit your bargaining strategy well ahead of your next bargaining round. Preparing for bargaining, and industrial action mitigations strategies, are more important than ever. Plans for start-up EAs and terminating existing agreements will also need to be re-considered.

Sunsetting of ‘Zombie’ Agreements

The Act provides for an automatic sunset period for Zombie Agreements (pre-FW Act and FW Act bridging period individual and collective agreements). You should consider the extent to which you have these agreements and the impact that termination will have on your business and workforce. It may be possible to apply for the sunset period to be extended.

Prohibition on sexual harassment in the workplace and dispute resolution processes

There are greater employer obligations in relation to preventing and responding to sexual harassment, which operate in conjunction with the positive duty under the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill 2022 which also passed both houses of parliament on 28 November 2022. You should consider whether your business is equipped to manage the risk of sexual harassment in the workplace and ensure you have effective controls in place.

Prohibition on fixed term contracts

You will need to consider both your current employee arrangements and how you hire new employees as there are new prohibitions on the operation of fixed term contracts in certain circumstances. These prohibitions operate on a day to be fixed, or the day after 12 months from the date of Royal Assent.

Flexible work and unpaid parental leave extension requests

You will need to review existing processes for responding to such requests and ensure that your organisation complies with the new process requirements, and has reasonable business grounds for any refusal (noting the new arbitration jurisdiction in the FWC).

Pay equality

You will need to review your template employment contracts and remove pay secrecy provisions. It is also worth giving some thought to how pay transparency might impact organisational reputation, the morale of staff and relationships between staff. Consideration should be given to whether any changes are required to remuneration as a result. It is also an opportune time to consider how your organisation is managing gender pay equality more generally.

FURTHER INSIGHTS

Over the course of the last few months, we have been keeping a close eye on industrial relations reform. Some of our insights can be found on our Australian Industrial Relations and Workplace Reform Hub, which you can access here, or on our dedicated industrial relations video podcast, InsideIR, which you can access here.

Please don’t hesitate to reach out to a member of our team if you would like to discuss the reforms, or how best to deal with them, including if a tailored briefing session would be of interest.

 

This article was originally published on 31 October 2022 and updated on 11 November 2022 and 7 December 2022.

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