In this blog post, we will delve into some of the key amendments made to the Fair Work Act 2009 (Cth) ("Fair Work Act") under the Secure Jobs, Better Pay Act 2022 (Cth) ("SJBP"). Our aim is to provide an understanding of the implications of these changes, exploring their direct impact on employee rights and the obligations faced by employers.
Pay Secrecy Clauses
Pay secrecy clauses have long been a controversial topic in the workplace, often creating an environment of secrecy and inequality surrounding employee remuneration and entitlements.
One of the new changes brought about by the SJBP is that the ability of employees to discuss and disclose their remunerations along with other conditions of their employment is now a protected workplace right under the Fair Work Act. Employers are therefore unable to take adverse action against the employees as the provisions under section 340 of the Fair Work Act cover this right.
An additional effect of the SJBP changes is that any employment contract or industrial instrument that contains terms that violate the prohibition on pay secrecy are of no force. Inserting pay secrecy clauses is also not permitted on any future employment contracts and any attempt to do so risks prosecution and the imposition of penalties on the employer.
The elimination of pay secrecy clauses necessitates employers to conduct a thorough re-evaluation of current and future employee contracts, as well as a shift in policies and procedures. Any employment agreements entered into on or after 7 December 2022, or any agreements entered into prior to that date that are subsequently modified, cannot include or enforce pay secrecy clauses. It is important for employers to be aware that including pay secrecy clauses from 7 June 2023, onward can result in penalties of up to $66,000.00 per violation. Furthermore, employers should refrain from preventing employees from discussing their remuneration, as this could potentially violate an employee's workplace rights and lead to a general protections claim against the employer.
Zombie Agreements
Zombie Agreements are a term used to describe enterprise agreements that were made prior to the commencement of the Fair Work Act and are still in effect. There has been significant apprehension that these agreements are not aligned with current workplace agreements due to their age and as such may lead to problematic inconsistency with modern employee entitlements.
New amendments to the Fair Wok Act brought about by the SJBP have sought to rectify this issue with the introduction of a new provision called automatic sunsetting for these ongoing zombie agreements. The effect of this is that any remaining zombie agreements that have yet to be terminated will automatically terminate on 7 December 2023 unless an extension is granted by the Fair Work Commission. Employers will also be required to provide a written notice to each employee covered by their zombie agreement by 6 June 2023. This notice will need to advise the employee that the employee is covered by a zombie agreement, the sunsetting process began on 7 December 2022 and the zombie agreement will terminate on 7 December 2023.
Employers that operate under zombie agreements will need to begin considering their future arrangements (if they have not already done so) and whether it is more appropriate to negotiate a new enterprise agreement or instead revert to the appropriate award conditions for their employees.
Flexible Work Arrangements
The COVID-19 Pandemic has caused a global shift in attitudes regarding flexible work arrangements. Part of the changes introduced by the SJBP have sought to resolve confusion on how employers are to handle requests for flexible work arrangements.
One change is the introduction of section 65A into the Act which looks to provide a prescriptive method for employers to follow when receiving a request for a flexible work arrangement from an employee.
The SJBP has also introduced a new dispute resolution process into the Act for the parties to follow in circumstances where a dispute arises between the parties regarding a flexible work request. However, the act sets out that barring "exceptional circumstances", the parties will first need to seek to resolve their dispute through conciliation.
If conciliation between the employee and employer is unsuccessful or the request is a matter of urgency, the Fair Work Commission will be empowered to resolve the dispute through new powers granted under the new arbitration clause created for the Act.
Job Advertisements
Prior to the introduction of the SJBP, there were underlying concerns that migrant workers who do not understand their workplace entitlements are being subject to misleading advertisements for employment.
To address the issue of misleading job advertisements and protect employee entitlements, the SJBP has introduced a new section of the Fair Work Act. This section prohibits employers from advertising employment with pay rates that violate fair work instruments, such as modern awards or enterprise agreements. Consequently, job advertisements cannot list remuneration rates that undercut the minimum entitlements of employees. Additionally, employers creating pieceworker job advertisements, where employees are paid a fixed price for each unit produced or action performed, must specify the periodic pay rate in the advertisement. These changes came into effect on 7 January 2023.
Employers who fail to adhere to the job advertisement regulations may face penalties, unless they can provide a valid reason for non-compliance. Therefore, it is crucial for employers to ensure that the salary mentioned in job advertisements aligns accurately with the entitled remuneration, should they choose to include it.
Unpaid Parental Leave
The existing entitlement prior to the changes provided employees who had elected to take unpaid parental leave with an entitlement to request an extension of a further 12 months (unless their partner had also taken 12 months of unpaid parental leave).
From 6 June 2023, the new alterations to the Act will require employers to respond within 21 days when an eligible employee informs their employer of the employees intention to extend their unpaid leave. If the employer denies the request, the employer will need to have given the employee a reasonable opportunity to discuss the request with the employer and the refusal will need to be founded upon reasonable business grounds. The employer will also need to let the employee know in writing if there exists any other period of extension of unpaid parental leave the employer would agree to.
What constitutes reasonable grounds may include:
- the extension being too costly for the employer,
- the extension having a negative impact on customer service;
- the extension causing a loss in productivity or efficiency; or
- if recruiting new employees, or changing the working arrangement of other employees, would be impractical.
Employees also now have greater access to resolving unpaid parental leave disputes through the Fair Work Commission if they cannot resolve the dispute in the workplace.
The effect of these changes is that employers will now be encouraged to try and accommodate new individuals seeking to further extend their unpaid parental leave. Employers should update their policies and procedures surrounding unpaid parental leave and make sure that those responsible for dealing with extension requests understand the new processes and details required to be provided to employers.
Sexual Harassment and Discrimination
The recent amendment to the Fair Work Act establishes a clear and unequivocal prohibition on sexual harassment in the workplace. It is now unlawful for any person to engage in sexual harassment towards an individual who is an existing or prospective worker of a business or undertaking, or a person conducting a business or undertaking. This includes contractors, subcontractors, apprentices, trainees, students, volunteers as well as employees.
The Act also now provides for a new method for resolving disputes. This new dispute resolution system will now provide the complainant with the capacity to apply to the Fair Work Commission to resolve the dispute either in addition to or as an alternative to the 'Stop Sexual Harassment Order'. The FWC may then deal with the dispute by either conciliation or mediation or alternatively by making a recommendation or giving an opinion.
If these methods cannot resolve the dispute, the FWC will be required to issue a certificate which will allow either of the parties to apply to the FWC by consent for arbitration of the dispute, or alternatively it will enable the aggrieved individual to commence court proceedings.
New changes have also introduced the potential for employers to be held vicariously liable for sexual harassment committed by their employees or agents in connection with their employment. Employees who are victims of sexual harassment will therefore be able to bring claims against one of or both the offender and the employer or principal. Employers meanwhile will now bare the burden of demonstrating that they took all reasonable steps to prevent sexual harassment to avoid being held vicariously liable for the actions of their employees or agents.
Other changes designed to reduce discrimination include the addition of "breastfeeding", "gender identity" and "intersex" status as protected attributes into the discrimination provisions of the Fair Work Act . The rationale behind this change is to bring the Fair Work Act in line with other anti-discrimination legislation.
The changes referred to above went into effect on 6 March 2023. Employers should review these changes as well as the SJBP and make a determination on what steps they need to take to stop sexual harassment. Potential internal changes can range from implementing appropriate and effective anti-discrimination training with staff that occurs on a regular basis to analysing current policies and procedures to ensure that they block discrimination and harassment to all persons now covered by the amendments. It will also be critical for employers to stay alert and monitor their workplace environment and culture to ensure they can respond appropriately to any potential problems or incidents.
Fixed Term Contracts
Fixed Term employment contracts describe employment contracts that include provisions that state that an employee's employment will end after a specific period.
A result of the new amendments, from 6 December 2023 new restrictions on Fixed Term Contracts come into affect that prohibit a fixed term contract in circumstances where the fixed term contract:
- is for a period greater than 2 years;
- permits the contract to be renewed or extended for a length of time greater than 2 years or renewed/extended more than once;
- continues the same or a substantially similar employment relationship and work duties as the employees previous fixed term contract.
Employers should additionally be aware that any action performed as a means to circumvent the criteria described above will be deemed an offence.
There are however exceptions to the restrictions described above which include circumstances where the employee under the contract:
- is engaged to perform a distinct task that involves specialised skills;
- is participating in a training agreement (e.g. an apprenticeship)
- is earning greater than the high income threshhold;
- is undertaking essential work in a period of peak demand;
- is engaged to perfrom work during emergency services or during a temporary absence of another employee;
- is covered under the exception related to government funding;
- is employed in a governance position that contains a time limit under the governing rules of a corporation or association of persons; or
- is permitted by the modern award to permit the otherwise prohibited term.
Employers will also now need to provide employees who enter into a fixed term contract with the Fixed Term Contract Information Statement before or as soon as practicable after the employee enters into the fixed term contract.
Employers should therefore review the way in which they use fixed term contracts. This should include an assessment of any template fixed term contracts to determine if any of the exceptions permitted by the SJBP will apply to their fixed term contracts and, if necessary, updating their fixed term contracts to reflect the SJBP amendments. Employers should also ensure that from 7 December 2023 onward that any employees employed under a fixed term contract are provided with a Fixed Term Contract Information Statement prior to commencement.
Takeaways
The changes made to the Fair Work Act through the SJBP impose additional responsibilities and limitations on employers. Therefore, it is crucial for employers to conduct a thorough evaluation of their policies and procedures concerning their workforce, and ensure that all employment contracts adhere to the new amendments.
Disclaimer
The information in this article is general in nature and is not intended to address the circumstances of any person or other entity. Although we do our best to provide timely and accurate information, we do not guarantee that the information in this article is accurate or that it will continue to be accurate in the future.
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