The Federal Government has introduced two Bills into Parliament that will make significant amendments to employment law in Australia, if passed. These are the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (Cth) (‘the Fair Work Bill’) and the
Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill 2022 (Cth) (‘the Respect at Work Bill 2022).
The Government is pushing the legislation through as quickly as it can, which could mean that the legislation is approved as soon as December this year. If it is approved, it is proposed that certain of the changes will come into effect immediately (such as amendments to the BOOT test, fixed term contracts and pay secrecy) whilst other amendments will come into effect at a later date.
We discuss the key changes proposed below.
Enterprise agreement bargaining
The Fair Work Bill proposes significant amendments in respect of enterprise bargaining and enterprise agreements. The proposed amendments include the following:
- Terminating “zombie agreements” (old enterprise agreements made prior to 1 January 2010). The agreements will terminate automatically after 12 months from the date the new legislation is passed. Employees will then be covered by an applicable modern award, unless a new enterprise agreement is entered into.
- Restricting employer’s abilities to unilaterally terminate agreements that have passed their nominal expiry date.
- Making the process of negotiating an enterprise agreement easier by removing certain pre-approval requirements relating to employers’ obligations re: explaining the terms of agreements, etc.
- A relaxation of the Better Off Overall Test (‘BOOT’), to restore the previous “global assessment approach” rather than the Fair Work Commission scrutinising proposed enterprise agreements line-by-line.
The Fair Work Bill proposes to introduce “job security” as an objective of the Fair Work Act. This will mean that all decisions of the Fair Work Commission – including decisions relating to the drafting of modern awards, the setting of the minimum wage and disputes such as unfair dismissal applications – will need to consider an underlying objective of creating job security.
Ban on successive use of fixed term contracts
Increased job security will also be encouraged through limitations on the use of fixed term contracts. Subject to limited exceptions, employees will only be able to be engaged on a maximum of two consecutive contracts or a maximum duration of two years.
Flexible working requests
The Fair Work Bill will broaden the circumstances that employees can make flexible working requests and provide stricter obligations on employers to consider them. The Fair Work Commission will also have new powers to intervene where an employee is not satisfied with how their request has been handled.
It is proposed that the promotion of gender equality be included as an objective of the Fair Work Act. As with job security, this will mean that all decisions of the Fair Work Commission – including decisions relating to the drafting of modern awards, the setting of the minimum wage and disputes such as unfair dismissal applications – will need to consider an underlying objective of promoting gender equality.
The Fair Work Bill also introduces new powers for the Fair Work Commission to make orders to increase the minimum wages of employees in industries where there is gender pay disparity.
Ban on pay secrecy clauses
The legislation proposes to ban pay secrecy clauses in new employment contracts and other written agreements. Employees will also have new workplace rights to ask about, and disclose, their remuneration (or not ask about, or disclose, their remuneration).
These provisions aim to promote greater transparency regarding remuneration and to promote that principle that employees are paid equally regardless of gender.
Prohibition on sexual harassment in connection with work
The Fair Work Bill proposes for the first time to include the prohibition on sexual harassment in connection with work in the Fair Work Act.
If passed, the legislation will introduce a simple dispute resolution framework modelled on the general protections regime. This will include a conciliation process in the Fair Work Commission and then an ability to pursue a claim in court.
Employees will therefore have an easier method to pursue sexual harassment claims than is currently the case.
Under these provisions, employers will be vicariously liable for unlawful sexual harassment by their employees unless they could prove that they took all reasonable steps to prevent the employee from contravening acts.
Prohibition on hostile workplace environments
Separately to the Fair Work Bill’s provisions dealing with sexual harassment, the Respect at Work Bill proposes to amend the federal Sex Discrimination Act 1984 (Cth) to introduce an express prohibition on conduct that subjects another person to a hostile workplace environment on the ground of sex.
Positive duty to eliminate sex discrimination
The Respect at Work Bill also proposes to create a new positive duty in the Sex Discrimination Act 1984 (Cth) for employers to take measures to eliminate unlawful discrimination (subject to reasonableness requirements).
It is likely that this will mean that most employers will need to take proactive steps to regularly educate and train employees in respect of sex discrimination and harassment, and to make sure all employees are regularly reminded of the employer’s policies and complaint methods. EI Legal and Employment Innovations are developing various resources to support our clients in this area.
Greater powers for the Australian Human Rights Commission to investigate systematic discrimination
The Bill also proposes to give the Australian Human Rights Commission new powers to inquire into actual or suspected systemic unlawful discrimination, being unlawful discrimination that affects a group of people and is continuous, repetitive or forms a pattern.
Parties to bear their own costs in proceedings under the Australian Human Rights Commission Act
It is also proposed that as a default position, each party is to bear its own legal costs in an unlawful discrimination proceeding, albeit a court may depart from this position if it considers it just to do so.
By reducing the risk of an employee being required to pay their employer’s legal costs in a discrimination proceeding, the amendment will reduce perceived barriers for employees to bring claims in this area.
Keeping you up-to-date
EI Legal and Employment Innovations will keep you informed of how the proposed legislation develops, and look out for a webinar on this area coming soon. We will also have resources available for clients to support them through the changes (including updated contracts, policies, etc). If you require any information in the meantime, please contact us.