Promoting Secure Work, Gender Equity and Pay Transparency

What do you need to know?

You might have heard recently there are a number of changes to Industrial Relations Laws in Australia. The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 represents one of the most significant changes to industrial relations in the last 10 years. It will impact several Australian business owners, employees and leaders. The changes are quite substantive and up to interpretation, so we thought it was best that we break them down and summarise what you need to know. That way you’ll be able to have some practical tips that transferable into your business to support the changes being made.

In case you’re wondering, Fair Work Australia 2009 (Cth) underpins the Australian workplace relation system. It is critical for setting the legislation on how we work and why we do what we do. You might remember our previous article on this, and if you’ve forgotten where their responsiblties lie, now might be the time to check up on this.  None the less, a lot of work has been done to come to these new proposed changes. The workplace relations system in Australia is one of the most difficult and complex systems to navigate, so understanding how these changes apply to you is crucial for your success.

The focus of these changes will expand the objective of the Fair Work Act 2009 (Cth) to promote more secure work, gender equality and pay transparency.  With the Bill scheduled to become passed as law before the end of this year (if not earlier) we have deep dived into what the proposed new changes to the legislation.  We offer some practical recommendations for organisations to get a head start on their preparations for the changes ahead.

Promoting secure work

Insecure work has been a focus of the Government, particularly after the COVID19 Pandemic. The notion being that as the economy goes into recovery, employees having access  to more secure work will have a greater positive impact on the economy.  What that means is that Employers that engage highly casualized workforces will be on notice. The reliance upon on insecure models of work( i.e fixed term contracts, casuals and contractors) means that they (Employers) must take action to reassess and seek to provide more secure employment arrangements within their business. Under the proposed changes, the Fair Work Ombudsman (FWO) will be required to provide more education and resources to workers on the impacts on fixed-term employment arrangements and what it means to be employed under this.

The FWO will be required to provide a Fixed Term Contract Information Statement. It is expected that this will be like the current Fair Work Information Statement that is provided to all new employees and the Casual Fair Work Information Statement that is provided to casual employees.  The newly proposed Fixed Term Contract Information Statement will be required to be provided by the employer to any new employees engaged on a fixed term employment arrangement.

Under the proposed changes any fixed term contract arrangements greater than two years will generally not be permitted. However there will be some exceptions to the rule, particularly if the employee is engaged above the high-income threshold and other exceptions expressly set out in the legislation, ie if the roles is dependent on government funding.

What do you need to do?

Suggestions:

• Review existing fixed term employment arrangements – are you currently engaging employees on these types of fixed term contracts exceeding a two-year period? If yes, carefully consider what you’ll do at the expiry of the next term? It’s worth considering other options.
• When released update the new Fixed Term Contract Information Statement to be contained within your onboarding pack. Ensure those responsible for onboarding understand that there is an additional form that needs to be provided.

Promoting gender equality

Gender equality is another key focus of the Bill.  This is no surprise given reports on the gender-pay gap, that the Government would like to address it. It goes without saying that research supports the notion that there is a  systemic undervaluation of women’s work. That time spent looking after children does have a financial impact on women. With the goal of same job same pay, it is looking like more of a reality then an expectation. These changes also supplemented the implementation of the review conducted to support the Respect @Work Report. This report had 55 recommendations to strengthen laws around preventing sexual harassment in the workplace. This changes supplement those already outlined in the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill 2022. The changes will give the Fair Work Commission (FWC) new powers to promote gender equality and protect employees from sexual harassment at work.

The FWC will have stronger powers in relation to making an ‘equal remuneration order.’ Whilst this is something that is already encouraged under the current legislation, it allows the FWC to make the choice to enable its own order of initiative in comparison to only acting upon it when a application has been lodged. What this means is that the FWC can play a more proactive role in the promotion and advancement of gender equality in workplaces.

By encouraging this to occur the FWC will also develop a mechanism for comparing and accessing whether or not renumeration is equal amongst roles and positions in the business. This tool will enable business owners to delineate between the pay gap and address any discrepancies. This is not limited to roles traditionally carried out by men but for all positions within businesses. Part of this shift is about re-educating the notion that females will receive less pay in traditionally male dominated fields.

What do you need to do?

Suggestions:

• Review existing sexual harassment prevention policies and procedures. If you don’t have a specific sexual harassment prevention policy then it is time to implement one.
• Review your remuneration policies and procedures, including employment contracts to ensure there is no inbuilt pay inequity based on gender.
• Review your remuneration review process to ensure that there is an objective way to determine the most appropriate renumeration structure for your business, free from bias.

Promoting pay transparency

Traditionally we know talking about money is seen as taboo. One of the things that support this was in contracts, Employees were forbidden to discuss their salaries with co workers. The introduction of this change, is a unique twist on an old practice.  Many Employers discourage open conversations amongst employees about pay and other terms and conditions of employment.  This for most workplaces is about protecting the confidentiality and privacy of employees.  It is commonly known that conversations at work about pay can often cause conflict amongst people, who in turn become angry to learn that someone else is getting paid more than they are.  It is an issue that can become very difficult to manage from a practical perspective in the workplace.

In saying that, it has been suggested in the newly proposed Part 7 – Prohibiting Pay Secrecy included in the Bill that some employers are taking these requirements a step too far. Employers are including pay secrecy clauses in employment contracts and agreements to forbid employees discussing pay and conditions altogether.  The reforms to the legislation in this area will prevent employers from subjecting employees to pay secrecy clauses in employment contracts and enterprise agreements.  This will promote pay transparency and will aim to encourage some cultural shifts inside organisations that traditionally discourage these types of conversations amongst employees.

What do you need to do?

Suggestions:

• Review contracts of employment and enterprise agreements to remove any references to pay secrecy.
• Review existing policies and procedures, including specifically Privacy and Code of Conduct policies to ensure there is nothing included that prevents employees from discussing their pay or asking other employees questions about pay.

These are just some of the high level overview changes that are likely to impact you. Whilst we hope there are not too many changes that occur once the bill passes, we know that changes will need to occur. That’s were we’ll be able to help. Once the change are through we will be adjust our documentation to reflect the above, but if you don’t have the above in the meantime, please reach out to contact@nowactually.com.au