IR Reform

IR Reform

November 4, 2022 Compliance, Uncategorized
IR Reform -

The Federal Government has introduced into Parliament landmark IR reforms that will have an impact on all workplaces across Australia, as part of its Secure Jobs and Better Pay Bill 2022.  It is likely that the Government will try to finalise and pass the reforms before the end of the year.

In summary, the reforms to the Fair Work Act address:

– enterprise bargaining (which will be fundamentally altered)

– overhaul of the Better Off Overall Test (BOOT) and Enterprise Agreement approval requirements

– changes to the rules pertaining to the taking of industrial action

– termination of enterprise agreements

– flexible work arrangement requests

– limitations on fixed term contracting

– prohibition of pay secrecy clauses in contracts and industrial instruments

– facilitation of gender-based pay equity claims

– the introduction of new expert panels to address gender-based pay equity and the Community and  Care sector

– expanded sexual harassment protections

– advertising positions at rates that could not satisfy any underlying industrial instrument safety net

– expansion of the small claims process for hearing underpayment claims up to a value of $100,000

– abolition of the Australian Building & Construction Commission

Enterprise Bargaining and Collective Agreements

The proposed legislation will:

1) expand multi-employer bargaining across three streams:

– the ‘single-interest employer authorisation’ stream – employers or employee bargaining representatives can seek an authorisation from the Fair Work Commission (FWC) requiring the employer to bargain in conjunction with other employers

– the newly named ‘supported bargaining’ stream – focused on enabling employees to apply to the FWC for an authorisation compelling their employer to bargain in conjunction with other employers

– the newly named ‘cooperative workplaces’ stream – enables employees and employers to jointly seek to have their enterprise joined to another cooperative workplace agreement (that is, a multi-enterprise agreement that is not made through a supported bargaining authorisation process)

– each stream expands the ability for employees/unions to unilaterally compel their employer to join into bargaining with other employers or alternatively to become covered by existing multi-employer agreements.

2) simplify the better off overall test (BOOT) in a number of ways, including by:

– allowing the BOOT to be applied globally (i.e. not a line-by-line comparison between the proposed agreement and a modern award)

– allowing the FWC to directly amend or remove a term in an agreement that does not meet the BOOT

– allowing the BOOT to be reassessed if there has been a material change in working arrangements that were not properly considered during the approval process

3) confine the making of enterprise agreements to a ‘representative cohort’ of employees

4) limit rights to take protected industrial action

5) introduce ‘unilateral arbitration’ by FWC into enterprise bargaining, that is, a scenario where one party can effectively disagree to the claims made in bargaining and seek to have terms imposed on all parties by way of arbitration

6) make it harder for a party to seek termination of an enterprise agreement that has passed its expiry date

Flexible work arrangement requests

The proposed legislation will:

– Require an employer to first discuss a request for flexible work arrangements with the employee

–  Allow employers to refuse a request where:

~ an agreement cannot be reached with an employee

~ the employer has had regard to consequences of the refusal on the employee

~ the refusal is based on reasonable business grounds

– Allow employees to challenge a refusal by filing a dispute in the Fair Work Commission for arbitration

Employers can be compelled by the Commission to change how they organise their labour to meet operational demands, in response to employee’s claims.

Next steps for employers

Review to ensure flexible work request policies and processes are up to date and provide the best possible guidance to managers so as to minimise claims in the Fair Work Commission arising from flexible work arrangement requests.

Pay secrecy clauses

The proposed legislation will:

– provide a right to employees to ask other employees about their rates of pay and any related terms and conditions of employment

– provide a right to employees to disclose or not disclose their rates of pay and any related terms and conditions of employment

– make it unlawful for employers to include pay secrecy clauses in employment contracts

Transitional provisions will be implemented to cover existing contracts that contain pay secrecy clauses.

Next steps for employers

Review and amend any contracts that prohibit rates of pay being discussed amongst employees.

Gender pay equity claims

The proposed legislation will:

– make gender equity an objective of the Fair Work Act to guide the FWC in exercising its various powers, particularly in relation to award-making and wage-setting

– establish new expert panels in the FWC to address the gender pay gap in the Care and Community Sector and to advise the FWC on pay equity

– give the FWC greater authority to order pay increases in sectors dominated by female workers through an ‘equal remuneration principle’ that will consider gender when assessing the value of work

Sexual harassment

The proposed legislation will:

1) amend the Fair Work Act to prohibit sexual harassment in connection with a worker, a prospective worker or a person conducting a business or undertaking – covering the conduct beyond that which occurs between two employees (the most common scenario subject to sexual harassment laws) e.g. where sexual harassment is perpetrated by a customer, client or member of the public against an employee

2) creates a new dispute resolution framework (modelled on the framework that applies to general protections dismissal disputes) to deal with sexual harassment disputes, beyond existing stop sexual harassment orders.  Relief could include:

– compensation

– payment for remuneration lost

– an order to take any reasonable action or course of conduct to redress any loss or damage suffered   by an aggrieved person.   

Next steps for employers

Review and amend sexual harassment policies to address the expanded definition of sexual harassment that now appears in the Fair Work Act and has also recently been included in anti discrimination laws.

Expanded anti-discrimination protections

The proposed legislation will:

add three new forms of discrimination to the existing protections against discrimination in the Fair Work Act, to cover breastfeeding, gender identity and intersex status

Job security and fixed term contracts

The proposed legislation will:

1) amend the Fair Work Act to make job security an object of the Fair Work Act

2) limit fixed term contracts for the same role to two consecutive contracts or one contract with a maximum duration, including renewals, of 2 years.  Exceptions include:

– employees engaged to perform only a distinct and identifiable task involving specialised skills

– employees engaged by way of a training arrangement

– employees engaged to undertake essential work during a peak demand period

– employees engaged to undertake work during emergency circumstances

– employees who earn more than the high income threshold for the year that employee enters into the contract

– employees engaged in a governance role which is prescribed a time limit under the governing – – rules of a corporation or association of persons

– the contract is wholly or partly funded by government funding (or a type of funding allowed by – the regulations) and the funding is for a period of more than two years and there are no reasonable prospects that the funding will be renewed after that period

– a modern award covering the employee permits the employee to be employed for more than two years under a fixed term contract, a renewable contract and/or a consecutive contract

3) require employers to provide a Fixed Term Contract Information Statement to new employees

Next steps for employers

Employers engaging employees on fixed term contracts that extend beyond two years will need to reset how these contracts are used and reassess the alternate options available where there is a lack of certainty in relation to the permanency of a position.

Advertising for jobs

The proposed legislation will:

1) prohibit employers from advertising employment at pay rates that would contravene the Fair Work Act or a Fair Work instrument, which includes a Modern Award or an enterprise agreement

Small claim jurisdiction

The proposed legislation will:

1) increase the cap on small claims from claims up to $20,000 in value to claims up to $100,000 in value

We will provide further information to you as it comes to hand.  In the meantime, please don’t hesitate to reach out if you have any questions on the proposed legislation:

Email Address:

Phone: 1300 55 99 62

Set up a meeting: this link 

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