Changes to Industrial Relations Law
Businesses should not be on the back foot when it comes to understanding and implementing the new changes ushered in by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Secure Jobs Act) and the Fair Work Legislation Amendment (Protecting Worker Entitlements) Act 2023 (Cth) (PWE Act).
Now is the time for employers to analyse their contracts and enterprise agreements and policies to iron out any creases before any penalties apply or claims can be made.
The changes introduced by the Secure Jobs Act and the PWE Act are part of a long string of workplace law and safety reforms by the current federal government.
We may also see further changes implemented as a result of the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 which was recently introduced in Parliament on 4 September 2023.
On 7 September 2023, the Senate referred the provisions of the Bill 2023 to the Education and Employment Legislation Committee for inquiry and report by 1 February 2024.
The table below is designed to help you and your business understand changes that have been introduced so that you can respond pro-actively and fairly to your employees whilst knowing your rights and your employees’ rights and entitlements.
We have summarised:
- The key significant changes the Secure Jobs Act and PWE Act introduced for 2023, and when they will take place for businesses to be aware of.
- Some ways that businesses can respond to these changes.
- Some areas of possible further reform identified by the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 – although this Bill is yet to be reviewed by the Senate.
Changes which are already law
|Prohibiting pay secrecy|
|Significant change in laws:|
An employee may disclose or not disclose their remuneration details or related information (eg hours of work)
An employee may ask another employee the other employee’s remuneration details.
These rights are enshrined as workplace rights, so employees cannot be treated adversely for exercising them.
A term of an enterprise agreement or a contract of employment has no effect to the extent the term is inconsistent with these provisions.
An employer will break the law if it enters into a new contract of employment that includes a term that is inconsistent with these rights. For example, a term prohibiting the employee from disclosing their remuneration details or related information (e.g. hours of work).
|What to do about it:|
Employment contracts that define “Confidential Information” to include employee remuneration (or contain other prohibitions on disclosure of remuneration) will have to be amended.
Do not treat employees adversely because they exercise these rights to disclose, not disclose or ask another employee about remuneration. Ensure new contracts do not contain the prohibited terms.Came into effect:
7 December 2022
Flexible work arrangements
Requests for flexible work arrangements can only be refused if the employer has
|What to do about it:|
Declining requests for flexible work arrangements will have to be a lot more process driven and in line with the Secure Jobs Act. It will be important to ensure business grounds for refusal are explained in detail an in writing.
Came into effect: 6 June 2022
|There will be an express prohibition on sexual harassment in connection with work. The prohibition would apply broadly to protect ‘workers’, (using the broad meaning from WHS legislation), including prospective workers.|
What to do about it:
Employers will have to re-double their efforts to prevent sexual harassment, by adopting a risk management approach that seeks to identify hazards and implement control measures, such as
Came into effect: 6 June 2022
Zombie agreements, that is, workplace agreements made before the Fair Work Act 2009 (FW Act) (and during the bridging period of 1 July to 31 December 2009) will automatically terminate on 6 December 2023.
Employers will also have to give employees notice of automatic sunsetting by 6 May 2023.
Changes to the types of enterprise agreements, the current low paid bargaining stream will be replaced by the supported bargaining stream.
New co-operative agreements will become a type of multi-employer agreement.
An employer will be able to apply to be party to a co-operative agreement after it is made, but their employees will have to vote it up.
Once a supported bargaining agreement is made unions will be able to apply to the Commission for the agreement to cover (or rope in) additional employers.
What to do about it:
Employers without existing enterprise agreements who want to avoid the risk of being roped-in to a supported bargaining agreement should consider making an enterprise agreement with their employees.
Employees will have more access to unpaid parental leave (unpaid parental leave)
The changes further strengthen access to unpaid parental leave and removes barriers to parents sharing responsibility for caring, by:
|What to do about it: It is critical for all employers to review and update their parental leave policies (and employment agreements) to ensure they are consistent with the new laws. |
Employers should also ensure managers, human resources, payroll and any other staff involved in approving and managing unpaid parental leave are aware of the changes.Came into effect: 1 July 2023
Employees can authorise employers to make more deductions from payments due to employees, where the deductions are principally for the employee’s benefit
Employees will be permitted to authorise employers, in writing, to make regular deductions for amounts that vary from time to time, provided that the deductions are not for the direct or indirect benefit of the employer.
This means that where an employer offers deductions, an employee will be able to choose whether they authorise only a set amount be deducted or whether they authorise an ongoing deduction for an amount that varies from time to time. The employee will be able to specify a monetary cap above which deductions cannot increase.
|What to do about it: Employers should ensure payroll staff are aware of the changes and consider whether wage deduction forms or policies need updating, to reflect the ability for employees to specify increasing amounts of deductions and monetary caps on deductions.|
Came into effect: 1 July 2023
Changes coming into effect soon
The most significant changes are:
Fixed term contracts
|A person will contravene the Act if:|
a) they enter into a contract of employment that includes a term that provides the contract will terminate at the end of a period; and
b)the period of the contract is greater than two years (and in certain other circumstances)
Some fixed term contracts are excluded from this regime, including:
a) Employees engaged to perform only a distinct and identifiable task involving specialised skills;
b) The employee earns above the high income threshold
c) The employee is engaged under the contract to undertake essential work during a peak demand period;
d) The contract is funded in whole or part by Government funding and the funding is payable for a period of two years or more and there are no reasonable prospects the funding will be renewed.
If a contract of employment is entered into in contravention of the provisions that contract will have no effect.
Employers will also have to provide a fixed term contract information statement to employees who enter into fixed term contracts.
What to do about it: Employers who use term contracts for employees will have to review their practices in line with the changes.
In particular, they will have to determine if an exemption applies. If not, they will need to cease using the fixed term contracts.
Employers will have to provide a fixed term contract information statement to employees who enter into fixed term contracts.
Will come into effect: 6 December 2023
Entitlement to superannuation under the National Employment Standards
Employees will have an enforceable entitlement to superannuation in the National Employment Standards (NES) and will be able to seek civil penalties for failure to pay superannuation.
From 1 January 2024, Part 2-2 of the FW Act will include a new entitlement to superannuation contributions as part of the NES. Employers will have a statutory obligation under the NES to make contributions to a superannuation fund for the benefit of an employee. This is not only to avoid liability to pay the superannuation guarantee charge under the Superannuation Guarantee Charge Act 1992 (Cth) in relation to the employee but also to avoid contravening the NES.
The changes also provide a right for employees to pursue their unpaid superannuation as a workplace entitlement. This means there will be a statutory mechanism by which a broad range of employees can enforce and recover unpaid superannuation.
There will be new civil penalties for failure to comply with the obligation to make superannuation contributions: up to 60 penalty units ($16,500) for an individual and up to 300 penalty units ($82,500) for a body corporate (600 penalty units / $165,000 and 3,000 penalty units / $825,000 for a serious contravention). Courts could also make other orders, including compensation and even general damages, if an employer contravenes these provisions.
|What to do about it: Employers should already be paying superannuation in accordance with law. However, given the new penalties and changes in superannuation minimum rates, it is a good opportunity for employers to review their superannuation payment arrangements.|
Making sure that your contracts and/or superannuation arrangements align with the NES will also ensure that you mitigate any risk of misrepresenting an entitlement to your employees which can form the basis of other kinds of claims against your business, as well as creating reducing exposure to contractual claims.
Will come into effect: from 1 January 2024
Changes which are likely to come - watch this space!
As mentioned above, a third round of changes was proposed with the introduction of the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 (the Bill).The bill has yet to pass both houses of Parliament so is not yet law however we have provided a summary of the key changes proposed so that you are aware of possible reform to take place in 2024 and prepare accordingly.
The most significant changes are:
|The Bill aims to provide a clearer definition of casual employment and establish a new pathway for casual employees to transition to permanent roles after 6 months’ service. The ‘new’ definition is a case of ‘back to the future’ for employers, and draws from the elements of casual employment routinely used before the High Court’s decision in WorkPac Pty Ltd v Rossato  HCA 23|
|Stricter criminal penalties are proposed to be introduced for intentional underpayments as well as a new criminal offence of wage theft. The Minister for Workplace Relations said, “it has always been a crime if a worker steals from the till, it should also be a crime if an employer steals from a worker”.|
If the Bill is passed, certain road transport workers and digital labour platform workers (i.e. gig economy workers) will be entitled to receive extensive minimum standards and protection from unfair termination or ‘unfair deactivation’. They will have recourse to the Fair Work Commission to resolve disputes over termination/deactivation and unfair contract terms.
Businesses operating in these industries will need to adapt to a new system of collective bargaining with these workers and be prepared to respond to claims over terminations or contractual rights.
Statutory definition of ‘employee’
|The Bill proposes a statutory definition of ‘employee’ and ‘employment’ for the first time in Australia, though only applying to the FW Act and even then, only parts of it. Under these proposed changes, courts and tribunals will need to revert to assessing the totality of the employment relationship – not just the terms of the contract between the parties – when determining if a person is an employee or an independent contractor. This would overturn the effect of the High Court’s decisions in Jamsek and Personnel Contracting for certain employees (see our article here).|
Protection from discrimination based on family and domestic violence
The Bill adds ‘subjection to family and domestic violence’ to the existing list of attributes protected by the FW Act from discrimination. It would not apply to perpetrators who are not also subject to family and domestic violence.
For more information regarding these changes, please contact Gilchrist Connell via our website: www.gclegal.com.au
This publication constitutes a summary of the information of the subject matter covered. This information is not intended to be nor should it be relied upon as legal or any other type of professional advice. For further information in relation to this subject matter please contact the author.
About the Author
Natasha is a Lawyer in Gilchrist Connells’ workplace relations and safety team. Natasha has a deep understanding of employment related issues with experience acting on both sides of a case.
She comes from a strong plaintiff background which she applies to her experience in representing employers in the Fair Work Commission, Federal Circuit and Family Court of Australia and the Federal Court of Australia. This breadth of experience allows her to find quick and cost-effective resolutions.
Natasha has broad experience in all areas of employment law and workplace relations. She has acted in matters involving termination of employment, workplace investigations, employee entitlements, interpretation of contracts of employment, statutory discrimination and occupational health and safety.
Natasha is an active member of the Law Reform Committee for Victorian Women Lawyers.