Substantial Changes to IR & Discrimination Law

The much-anticipated Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill and Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill have now passed Parliament. These changes, among other effects, shall amend the Fair Work Act (“FW Act”) and apply to employers in the national system of employment laws, such as electrical contracting companies. The Secure Jobs, Better Pay Bill received Royal Assent on 6 December 2022 and some amendments took effect from 7 December 2022, while others commence in stages over the next 12 months. Employers should prepare for the changes summarised below.

Limit on fixed-term contracts

There is a general two-year limitation on fixed-term contracts (including extensions). There are exceptions, however, such as apprenticeships. This limitation takes effect next year on 6 December 2023 or earlier if fixed by proclamation.

Advertising and pay secrecy

It is unlawful for employers to advertise for positions at rates below the Award or Enterprise Agreement rates.

A contract that prevents employees from disclosing their pay details is prohibited. A new workplace right is created to allow employees to disclose their pay details to other employees, and to ask them what their pay details are. However, there is no obligation on employees to disclose their pay. These changes took effect from 7 December 2022.

Flexible work requests

Employees who are eligible to request flexible working arrangements under the FW Act (such as carers, over 55s, persons with disability or experiencing domestic violence) and, who dispute their employer’s decision, can now have the matter dealt with by arbitration by the Fair Work Commission (“FWC”). This empowers the FWC to decide whether the business must grant a flexible working request. These changes take effect 7 June 2023.

Enterprise agreement changes

Commencement of bargaining 

By giving notice, a union may compel an employer to commence bargaining for a new Enterprise Agreement in these conditions: 

1. The nominal expiry date of the current Enterprise Agreement has passed. 
2. Less than 5 years has lapsed since the nominal expiry date.
3. The union seeks to replace the previous Enterprise Agreement.
4. The new proposed Enterprise Agreement covers substantially the same workforce.
   

These changes took effect from 7 December 2022.

New multi-employer agreements

Employers who share a common interest can now be required to bargain with other employers for a multi-enterprise agreement that covers all their workforces. This is known as the “single interest bargaining stream.” Whether employers share a common interest may be determined by the FWC having regard to geographical location, regulatory regime, or nature of the enterprises. 

Despite the above:

• Small businesses with less than 20 employees; and
• Employees in relation to “general building and construction work” 

... are excluded from the single interest bargaining stream. Some businesses with existing Enterprise Agreements may also be excluded.

New arbitration provisions during bargaining

The FWC has powers to arbitrate any issues or disputes and make binding determinations on the parties. 

Better Off Overall Test (BOOT) 

The FWC will undertake a global assessment of whether employees will be better off overall and can only consider patterns of work which are reasonably foreseeable at the time of the BOOT. There will be a “reconsideration process” that enables employees and unions to apply to have the Enterprise Agreement re-tested at any point against the relevant Award in certain circumstances. 

Sufficient representation

Employers can only make an Enterprise Agreement if the FWC is satisfied that the employees bargaining and voting on agreement provide sufficient representation of the actual workforce that the agreement will eventually cover. The above changes to enterprise bargaining will take effect 6 June 2023 or earlier if fixed by proclamation. 

Pre-reform agreements (“zombie agreements”)

Enterprise Agreements that commenced operation prior to 2009 (before the FW Act was introduced) will have a sunset date at which time they will cease operation and will revert to the relevant Modern Award unless a new agreement is made. These changes took effect from 7 December 2022. 

Sexual harassment and discrimination

New obligations for employers to be aware of include:

• a prohibition on conduct creating a 'hostile' workplace environment on the basis of sex (i.e., displaying pornographic materials, sexual banter, or offensive jokes);
  
• a positive duty on employers to take "reasonable and proportionate measures" to eliminate sex discrimination, sexual harassment, and victimisation at work.
  

What are considered "reasonable and proportionate" measures vary and depend on an employer’s circumstances, including:

• size and nature of the business;
• resources available; and 
• the practicability and costs associated with implementing reasonable and proportionate measures.
  

The positive duty obligation will commence 12 months after Royal Assent, providing employers time to comply. The Australian Human Rights Commission is empowered to enforce compliance with the positive duty and the FWC can make stop sexual harassment orders. 

There are also new protections for employees against discrimination including for breastfeeding, gender identity, and intersex status.

Other institutional changes to note 

The ABCC, ROC and the Federal Building Code

The Australian Building and Construction Commission (ABCC) and the Registered Organisations Commission (ROC) will be abolished, and their functions transferred to the Fair Work Ombudsman (FWO) and the Fair Work Commission (FWC) respectively.

The Code for the Tendering and Performance of Building Work 2016 will be repealed but in WA the State Building and Construction Industry Code of Conduct 2016 for State funded projects worth more than $10m will still apply. 

Objects of the Fair Work Act and small claims jurisdiction

Gender equity and secure work are included in the “Objects” of the FW Act which means the FWC must take these concepts into account when performing its duties or exercising its powers.  Pay Equity and Care Community Sector Expert Panels are established.

Jurisdictional limit for small claims that employees can bring about issues such as adverse action or underpayment claims will increase from $20,000 to $100,000. Legal representation is not permitted in small claims.

Employers should pre-emptively start reviewing their current employment practices and policies to ensure compliance with the new changes. 

Further information on the changes can be found on the Fair Work Commission website >

Disclaimer: This summary is a guide only and is not legal advice. For further information, call ECA Legal on (08) 6241 6129 or email ecalegal@ecawa.org.au