The new era of industrial relations in Australia is here. We are seeing some of the most significant changes to the Federal Industrial Relations system since the introduction of the Fair Work Act in 2009.
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 received royal assent on 6 December 2022, passing it into law. The countdown now begins as many amendments take effect in the next six to twelve months.
These changes are not straight forward. They will require business owners and leaders to invest in understanding what changes will mean to their business.
There are some industry bodies saying this new bill will burden employers and shift the balance of power toward employees.
We have provided a snapshot of the most pressing issues for consideration:
Flexible Work Arrangements
What changes
The right to request flexible working arrangements will be enforceable. That means if an employer refuses a request for a flexible work arrangement, the employee can take the matter to the Fair Work Commission for arbitration. This means employers must have clear policies and procedures on flexible working arrangements .
What action is required
Review your existing policies, procedures and potentially forms and templates on flexible working arrangements to incorporate the new requirements. Your review will need to consider how you comply with the legislation, your review process, how you negotiate and consult, and how you respond. It will also need to reflect the legal rights of your employees.
You will also need to consider what reasonable business grounds may look like in your business, in accordance with the definitions in the Secure Jobs Better Pay Act.
When
This amendment takes effect 6 June 2023.
Who does it impact
All organisations including small businesses.
What are the penalties?
If the matter is taken to Fair Work, arbitration orders are issued, and the employer fails to comply with those orders, there is a penalty of up to $13,320 (60 penalty units).
Parental Leave Extension
What changes
People taking parental leave will have a legally enforceable right to request an unpaid extension of leave. They have the right to request up to 12 months additional unpaid leave.
If an employer refuses a request for an unpaid parental leave extension, the employee can take the matter to the Fair Work Commission for arbitration. This means employers must have clear policies and procedures on parental leave.
What action is required
You will need to review parental leave clauses in your employment agreements, your policies and procedures to reflect this change. The review will need to consider how you comply with the legislation, your review process, how you negotiate and consult, and how you respond. It will also need to reflect the legal rights of your employees.
You will also need to consider what reasonable business grounds may look like in your business, in accordance with the definitions in the Secure Jobs Better Pay Act.
When
This amendment takes effect 6 June 2023.
Who does it impact
All organisations including small businesses.
What are the penalties?
If the matter is taken to Fair Work, arbitration orders are issued, and the employer fails to comply with those orders, there is a penalty of up to $13,320 (60 penalty units).
Fixed Term Contracts
What changes
Businesses will be prohibited from entering into fixed term employment contracts with an employee for the same role for longer than two years, including extensions and renewals.
There are exceptions, and the Fair Work Commissions can update modern awards that allow employees to be engaged under fixed term agreements that would otherwise be prohibited. This makes the change complex and full of grey areas.
But overall, you will have to offer permanent employment for anyone engaged in the same role for more than two years.
What action is required
You will need to review all agreements and documentation governing your existing employees and how you will hire people into the future.
This may include:
- Reviewing the employment terms and contracts of every employee in your business to ensure you comply.
- Monitoring the Fair Work Commission for any specific exceptions or changes that are introduced to your modern award or industry.
- Reviewing the exceptions in the legislation to understand where the laws may not apply to you.
- Reviewing and updating your policies and procedures around recruitment.
When
This amendment takes effect 6 December 2023.
Who does it impact
All organisations including small businesses.
What are the penalties?
If an employer breaches the limits on fixed term contracts, civil penalties apply. The penalties range from $13,320 to $133,200 (60 – 600 penalty units) depending on the seriousness of the breach.
Multi-Employer Bargaining
What changes
This is the most significant and talked about aspect of the legislation. It incorporates several amendments within the legislation and is complex to navigate as there are a number of types of bargaining agreements, depending on your business and industry.
In a nutshell, the new architecture has expanded the options for multi-employer bargaining and now has two new separate categories: supported bargaining agreements (SBAs) and cooperative workplace agreements (CWAs). Essentially a CWA is just an ordinary multi-enterprise agreement that is not an SBA.
Supported Bargaining is based on low paid bargaining industries such as childcare, aged care, disability that is primarily state, commonwealth and government funded. There are no small business exemptions for this sector.
There will be mandatory Fair Work Commission arbitration of intractable bargaining that may result in the Commission making a declaration, or decision, on more bargaining agreements.
Ultimately, many more businesses – including small businesses – will be forced into enterprise bargaining agreements and an increased involvement in industrial relations. This will put an unprecedented burden on businesses across Australia.
What action is required
This is an area that will require ongoing monitoring and consideration. This change will shift bargaining power away from employers, meaning you need a strategic approach to bargaining and different tactics to those you may have used in the past.
You will need to prepare for bargaining and have industrial action mitigation strategies that are compliant with the Act.
You will need to consider what parts of the legislation affect you, depending on your industry and whether Supported Bargaining impacts you. You may also need to consider which businesses – including competitors and supply chain participants – you may be forced to bargain together with.
Regional Businesses face a unique impact. If two or more metro businesses in your industry form an agreement, you may be forced to join it, pushing up you wages and employment costs. For example, if you are a franchisee and operate in a regional town, franchisees in metro locations may form an agreement you must then comply with.
When
The Multi-Enterprise Bargaining Changes take effect from 6 June 2023.
Who does it impact
All businesses. The only exception is a small business with less than 20 employees.
What are the impacts?
The impact of this change is increased industrial relations costs and more businesses finding themselves in the Fair Work Commission, resulting in legal fees and intangible stress and disruption.
Sexual Harassment & Discrimination
What changes
These amendments place a positive duty on employers to take reasonable and proportionate measures to eliminate sex discrimination, sexual harassment and victimisation in their workplace. The amendments include explicit clauses on pay equity and sexual harassment in connection with work.
There are some aspects that also require the Fair Work Commission to exclude gender as a factor in their decision making to prevent bias or discrimination.
What action is required
You need to assess your risk and review your sexual harassment education as well as your policies and procedures. You will need to consider whether you have adequate strategies to prevent sexual harassment, and if you are equipped to manage an incident. Employers must have effective controls in place to prevent being taken to Fair Work Commission or facing court.
When
The Pay Secrecy provisions take effect from 6 June 2023.
Who does it impact
All businesses.
What are the penalties?
If an employer breaches the sexual harassment provisions, penalties range from $13,320 to $133,200 (60 – 600 penalty units) depending on the seriousness of the breach.
Zombie Agreements
What changes
Zombie agreements are pre-Fair Work Act individual and collective agreements, that were provisioned for as transitional instruments when the Act took effect in 2009.
The Secure Jobs, Better Pay Act provides for an automatic sunset period for these agreements. They will be terminated at the end of that period, unless an application is made to Fair Work prior.
What action is required
You will need to review your existing agreements to confirm if you have any “Zombie agreements” in place. If you do, you will need to look at how their termination will impact your business – how it will change pay and conditions, and your employment costs. You are required to notify and consult with affected employees. You will also need to confirm what will replace them, or if Multi-Employer Bargaining may be involved in setting up new agreements.
If new arrangements cannot be made prior to the end of the sunset period, you will need to apply to Fair Work for an extension.
When
The Sunset period began 6 December 2022, and will end 6 December 2023.
Who does it impact
All businesses.
What are the penalties?
If you breach the sunset provisions, the penalty is $13,320 (60 penalty units).
This is a minefield – but you don’t have to navigate it alone
HR Blueprint will be running in person workshops for regional businesses in the New Year. We have a team of experts who have extensive experience in HR, OHS and Industrial Relations. We have decades of experience, and have been through the era of collective agreements, the introduction of the Fair Work Act, and are now helping businesses navigate with the Better Pay, Secure Jobs Act.
Please follow the link to register your interest on the link provided. If you would like to set up a discovery, call before that reach out to admin@hrblueprint.com.au
Register your interest
Secure Jobs, Better Pay Workshops
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