There are 11 changes to Fair Work laws you need to know about. They are significant and have the potential to affect your organisation’s policies and procedures as well as employment contracts with your staff. Any delays in implementing these changes could mean you are non-compliant and placing your organisation in a vulnerable position with the Fair Work Commission.
To help you get your head around the changes, below is a brief summary. For specific assistance in how these changes will affect your business, please contact us on 02 8977 4002. If you would like to look up the changes for yourself, the legislation is called Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022.
Change 1: Removal of Pay Secrecy Requirements
Your employees now have the freedom to discuss their pay rate (and details such as hours of employment and bonus payments) with others. If this occurs at your workplace, you cannot take any adverse action against staff if they share this information. Adverse action includes things like disciplinary action, demotion or termination.
As an employer, there are significant penalties if you continue to insist on pay secrecy between staff.
Changes you need to make:
a) For existing contracts, any conditions that prohibit employees from disclosing their remuneration and other related terms cannot be enforced
b) For new employment contracts, it is an offence to include clauses that require pay secrecy
Change 2: Clearer Procedures for Negotiating Flexible Working Arrangements
Employee eligibility for flexible work has expanded to include pregnant employees and people who are experiencing domestic violence or who are supporting people experiencing domestic violence.Strict criteria have also been introduced if employers wish to refuse flexible working arrangements including the need to document:
- Why you are refusing flexible work arrangements
- The business reasons for the refusal
- What working arrangements you are prepared to offer
- How you and your employee have tried to reach an agreement
Getting this right and avoiding arbitration before the Fair Work Commission is complex. In addition, you only have 21 days to respond to an employee’s request for flexible work. So if you find yourself in this situation, we urge you to contact us promptly so we can help you work through your legal requirements.
Change 3: Fixed Term Contracts Restricted
Employees cannot be placed on a fixed term contract that lasts more than 2 years unless they fulfil exceptional criteria. In addition, you can only renew a fixed term contract once and in total, the term must remain under the 2 year cap. There are strict and limited exceptions to this rule and we suggest you contact us for tailored advice to suit your situation.
Changes you need to make:
If you have any employees with fixed term contracts that exceed the limit, they may be entitled to claim permanent, ongoing employment.
When engaging an employee on a fixed term contract, you need to provide them with a Fixed Term Contract Information Statement and the Fair Work Information Statement.
Change 4: Sunsetting All Zombie Workplace Agreements
Zombie Workplace Agreements are employment contracts that were entered into before the commencement of the Fair Work Act 2009. Therefore, the sunset provision is designed to terminate these old agreements.
You have 12 months’ grace to identify which employees have zombie workplace agreements and to negotiate new ones. There are exceptional situations where the 12 month time limit can be extended. But don’t rely on it.
Changes you need to make:
Start by reviewing all your workplace agreements but really, this change is complicated so we strongly recommend you get in touch with us if you have any employees with employment agreements that commenced before 2009.
Change 5: Enterprise Agreement Pre-Approval Process Replaced
The Fair Work Commission has replaced the pre-approval process for enterprise agreements. Instead, they have introduced procedures and a statement of principles to ensure employees are genuinely agreeing to an enterprise agreement.
Changes you need to make:
On the basis of this change, you will need to ensure your employees:
- Are informed about the enterprise bargaining process
- Understand they have the right to obtain representation
- Have received an explanation of the terms of their new enterprise agreement
To ensure any new enterprise agreements are valid, you will need to follow these processes carefully. To avoid problems, we urge you contact us for assistance.
Change 6: Introduction of Supported Bargaining
Supported bargaining allows employers to collectively negotiate an enterprise agreement if they have distinct common interests. You and your fellow employers will need to apply to the Fair Work Commission for a Supported Bargaining Authorisation.
You cannot obtain a Supported Bargaining Authorisation unless some of your employees have union representation. The employees from each employer must vote to approve the enterprise agreement. If your employees don’t provide a majority vote in favour of the agreement, it won’t be approved and you’ll need to start your own negotiations for a new agreement.
Changes you need to make:
You need to prepare for the possibility of being involuntarily added to another Supported Bargaining agreement. To do this, a union can apply to the Fair Work Commission to add your business to the agreement. In this situation, the union must be able to show that the majority of your employees want to be covered by the agreement.
Change 7: Intractable Bargaining Declaration Introduced
Essentially, an Intractable Bargaining Declaration means you and your employees will be told what to do if you can’t reach an agreement. Therefore, it’s likely neither side will be happy and you’ll be stuck with an agreement no-one likes. This has the potential to affect your business for years to come.
Changes you need to make:
When negotiating with staff, you need to be open and interested in changing what you currently do. You also need to be completely transparent when explaining any negative impact to your business if you agree to an employee’s request. From there, both sides need to continue talking, making suggestions and seeking alternatives. Otherwise you are at risk of receiving an Intractable Bargaining Declaration.
That’s why we suggest clients seek our advice and even engage us to assist with negotiations. It’s amazing how our third party perspective can find workable alternatives. We can also help to keep the peace if tempers flare.
Change 8: Expansion of Anti-Discrimination Protections
Your business is already obliged to protect staff from discrimination on the basis of age, race, gender, marital status, pregnancy etc. This change to the Fair Work Act adds 3 new characteristics where your staff are protected by law from any form of discrimination – whether direct or indirect. They are:
- Breast feeding
- Gender identity
- Intersex status
If you aren’t familiar with the term Intersex status, the United Nations High Commissioner for Human Rights describes its meaning as people who “do not fit typical binary notions of male or female bodies”.
Changes you need to make:
You need to update your organisation’s policies to include these new protected characteristics. We are happy to assist you with updating and reviewing your workplace policies and procedures.
Change 9: Prohibiting Sexual Harassment in the Workplace
As an employer, you will now be considered liable for any sexual harassment perpetrated by your workers, clients, suppliers etc. if the harassment occurred in connection with work. If you are found liable, you can be subject to enforcement action and penalties.
The definition of a “worker” is broad and includes:
- Employees
- Contractors or subcontractors
- An outsourced worker
- Apprentice or trainee
- A volunteer or a student gaining work experience in your organisation
Importantly, employers will not be considered liable if they can prove they took reasonable steps to prevent sexual harassment at work.
Changes you need to make:
To demonstrate you have taken all reasonable actions to prevent sexual harassment, you need to review your current policies and training on what constitutes sexual harassment in the workplace. In addition, if an employee accuses another of sexual harassment, you need to act quickly and diligently. We can help you prevent and resolve any sexual harassment disputes.
Change 10: An Emphasis on Gender Equality
Gender Equality has been included as an objective of the Fair Work Act. This sets a clear expectation that the Fair Work Commission must work towards achieving greater gender equality – including greater pay equity.
Change 11: A New Approach to Boot (aka the Better Off Overall Test)
When evaluating a proposed workplace agreement against the relevant modern award, the Better Off Overall Test will be applied as an overarching consideration. Some other changes of note include:
- Reviewing patterns of work in the foreseeable future. Previously, the Commissioner needed to consider hypothetical situations as well
- The addition of the Reconsideration Safeguard allows the Fair Work Commission to reassess matters if material changes occur that were not considered in the original application
Managing staff and ensuring compliance are complicated!
These changes to the Fair Work Act are significant and need to be actioned now if you wish to remain compliant. Don’t delay. For help, get in touch with End2end Business Solutions – your friendly, practical and knowledgeable HR team.