The Australian Federal Government is pushing ahead with the most extensive industrial relations reform seen since the introduction of the Fair Work Act some 13 years ago, commencing with the tabling of the Secure Jobs, Better Pay Bill in the House of Representatives on 27 October 2022, together with further amendments to the Bill on 9 November 2022.
Our full summary provides an overview of the key elements of the Bill as at 10 November 2022. The amendments to the Bill tabled in the House of Representatives on 9 November 2022 are shown in the document in mark-up. The Bill may also be subject to further amendment in the Senate.
While further industrial relations reform (such as on ‘same job, same pay’, among other topics) is expected to follow next year, the reforms tabled are significant and will substantively impact how Australian employers structure and manage their workforces and set terms and conditions of employment.
In summary, the key changes relate to:
- agreements covering multiple employers – employers can be forced to bargain for agreements that cover multiple employers (including, potentially, competitors, external companies within supply chains, or internal group companies, among others) as the FWC can make a supported bargaining authorisations and a single interest employer authorisations to enable this. Employees are able to take protected industrial action or seek bargaining orders in support of these agreements and there are limits on employers’/employees’ ability to remove themselves as parties to them. Employee organisations are also given significant power in the negotiation of these agreements, as each employee organisation bargaining representative must provide written consent before a multi-enterprise agreement can be put to a vote;
- bargaining disputes – broader powers for the FWC to intervene and make workplace determinations (effectively arbitrating an enterprise agreement) where bargaining is ‘intractable’;
- industrial action –the removal of limitations on protected industrial action in relation to multi-enterprise agreements, but the inclusion of an obligation to attend FWC mediation/conciliation before protected industrial action is taken (which applies to all forms of enterprise agreements except the ‘cooperative’ multi-enterprise stream where protected industrial action is not available);
- terminating agreements – materially reduced scope for termination of enterprise agreements, particularly during bargaining, and the sunsetting of ‘zombie’ agreements within 12 months of commencement (unless an extension is granted of up to 4 years);
- enterprise agreement approval process (BOOT and pre-approval requirements) – bargaining can start when an employee bargaining representative gives notice in certain circumstances (and without a MSD), certain pre-approval requirements have been removed, the ‘genuinely agreed’ test remains, there are limits on the use of start-up enterprise agreements (the voting employees must have a sufficient interest in its terms, and must be representative of the employees to be covered), the BOOT has been simplified and must involve a global (not line by line) assessment, the FWC can amend an enterprise agreement during the approval process rather than relying on employer undertakings, and parties may apply for a reassessment of the BOOT during the life of the enterprise agreement, e.g. if employees’ work patterns change;
- pay equity – expanded scope for the FWC to make Equal Remuneration Orders, prohibitions on and invalidation of pay secrecy clauses in employment contracts with penalties for non-compliance, and the establishment of two new expert panels within the FWC on pay equity and the care and community sector to tackle low pay in female dominated industries;
- Respect @ Work – introduction of a positive duty to prevent sexual harassment in the workplace;
- discrimination – minor amendments to the anti-discrimination provisions in the FW Act to reflect other Commonwealth anti-discrimination legislation. These include adding protected attributes (breast feeding, gender identity, intersex status), and clarifying the operation of special measures to achieve equality;
- fixed term contracts – prohibitions on fixed term contracts of more than two years, with anti-avoidance provisions and exceptions for certain roles, industries, and uses of fixed term contracts;
- flexible work requests – expanded scope for employees to request flexible work arrangements, including a requirement for businesses to give reasons for any refusal of a flexible working request, limits on reasons for refusing a request, and FWC arbitration powers to deal with disputes;
- the objects of the FW Act – these have been expanded to include promotion of job security and gender equality;
- abolishing the Australian Building and Construction Commission – the ABCC would be abolished, with its remaining functions assumed by the Fair Work Ombudsman;
- establishment of the National Construction Industry Forum – with the role of providing advice to the Government in relation to work in the building and construction industry;
- abolishing the Registered Organisations Commission – the ROC would be abolished, with its functions transferred to the FWC; and
- other matters – there are a range of other discrete amendments, including prohibitions on advertising roles at less than the applicable minimum rate of pay, an expansion of the small claims proceedings division in the FW Act from $20,000 to $100,000, and certain other changes.
The Government has indicated a continued willingness to amend the proposed reforms on the basis of further consultation. The Bill will be subject to further political debate and possible changes as the Government will be required to seek the support of crossbench Senators.
We will provide updates of any major changes to the Bill and will provide additional insight and analysis once the Bill passes the Senate.
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.
Our team is already working with clients on how to approach many of the issues raised by these reforms. Please don’t hesitate to reach out if you would like to discuss the reforms, or how best to plan for them, including if a tailored briefing session for your team would be of interest.
This article was originally published on 31 October 2022.