Whilst some of the changes have already been enacted, many of them will be rolled out over the course of the next 12 months. Employers should understand what these new requirements are and how they can take proactive steps to ensure compliance to the changes.

To assist in the matter, we have summarised the key points below and the dates in which they will be enforced.

What is changing?

Pay Secrecy

Date of Commencement : 7^th December 2022.

The Act introduces a workplace right for Employees to disclose (or not disclose) information about their remuneration. That means that employees can ask other employees (whether employed by the same or a different employer) about their remuneration. The Act invalidates any existing pay secrecy terms in contracts of employment.

As such, you cannot take disciplinary or adverse action including termination against an Employee if they do ask. This is now a workplace right that all employees are entitled to.

Date of Commencement : 7^th June 2023.

The Act also prohibits employers from including any pay secrecy terms in a new contract of employment. Non-compliance may result in civil penalties.

Job Advertisements

Date of Commencement : 7^th December 2022.

Penalties may now be imposed on employers who advertise employment opportunities at a rate of pay that would contravene the FW Act or an industrial instrument. What that means is that Employers cannot pay below the minimum rate of pay that this legislation requires.

Termination of Enterprise Agreements

Date of Commencement : 7^th December 2022.

The Act introduces a more difficult testing process which must be satisfied before the Fair Work Commission (FWC) will approve the termination of an enterprise agreement which has passed its nominal expiry date.

Zombie Agreements

Date of Commencement : 7^th December 2022, Sunset period ending 6 December 2023, unless formally extended by FWC

“Zombie agreements” (individual and collective agreements made prior to the commencement of the FW Act and during the “bridging period” from 1 July to 31 December 2009) will inevitably cease on 6 December 2023.

Before 7 June 2023, Employers are required to notify Employees that are affected by this change. If Employees are still covered by a zombie agreement, Employers can make an application to extend the agreement.

Sexual Harassment

Date of Commencement : 6^th March 2022.

The Respect at Work Bill 2022 is still waiting for Royal Assent but is a significant change in the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill 2022. These amendments are expected to shift the responsibility for making complaints away from victims of sexual harassment. It seeks to impose a positive obligation on duty holders to take proactive steps to eliminate such conduct in the first place.

The Act provides the FWC with the power to mediate a stop-sexual harassment application by consent. It will also enable the FWC to issue a certificate allowing an application to be made to the Federal Circuit or Federal Court of Australia.

BOOTs

Date of Commencement : 6^th June 2023, or an earlier date to be fixed by proclamation.

The changes simplify and streamlines the Better Off Overall Test (BOOTs). The FWC have now got clearer expectations around how these assessments of proposed enterprise agreements will be accessed. They can now determined whether an employee is better off under the terms, as opposed to a line-by-line analysis compared to the relevant modern award.

The FWC will also have power to amend an enterprise agreement during the approval process rather then the current practice that requires an undertaking or conciliation. In addition, parties may apply for a reassessment of the BOOTs during the life of an enterprise agreement, rather then wait for the next period.

Flexible Working Arrangements

Date of Commencement : 6 June 2023

Under the FW Act, employees are able to request flexible working arrangements in certain circumstances (such as where they are a carer or have a disability). The personal circumstances giving rise to a right to request such an arrangement have been expanded to include employees who are pregnant or where they have experienced family and domestic violence.

Additional obligations will be placed on employers when considering an employee’s request for a flexible working arrangement. An employer can now only refuse such a request where, amongst other things, the request has been discussed with the employee, the employer has genuinely tried to reach an agreement, the refusal is on reasonable business grounds and the employer has provided the employee with detailed reasons for the refusal in writing.

Similar provisions have also been introduced concerning the obligations of employers in responding to a request for an extension of unpaid parental leave. The Act also introduces a new dispute resolution mechanism for resolving such disputes before the FWC.

Multi-employer bargaining

Date of Commencement:  6 June 2023, or an earlier date to be fixed by proclamation

 The Act makes significant changes to the enterprise bargaining framework in Australia. In particular, it expands the existing multi-enterprise bargaining regime and provides employees and trade unions with greater powers to compel employers to bargain for agreements that cover multiple employers, which could include competitors. The building and construction industry has, however, been carved out from these reforms.

A “supported bargaining stream” will replace the former (and seldom used) “low-paid bargaining stream” under the FW Act. Under this renamed stream, the FWC can make a supported bargaining authorisation requiring multiple employers to bargain together having regard to, amongst other things, whether the employers have “clearly identifiable common interests”. The test is therefore broader with the intention of reducing barriers to accessing this form of bargaining.

Further, “single-interest employer authorisations” can be made under the Act by employee bargaining representatives, not just employees themselves.

The FWC can also grant an authorisation covering an employer without its consent (compelling it to bargain with other employers) provided the business employs at least 20 employees and it is not covered by an enterprise agreement which has not passed its nominal expiry date.

Small Claims Procedure

Date of Commencement: 1 July 2023

The Act increases the cap for small claims proceedings from $20,000 to $100,000. Further, under the changes, an unsuccessful party may be liable for the other party’s costs for any filing fees paid.

Fixed Term Contracts

Date of Commencement: 6 December 2023, or an earlier date to be fixed by proclamation

The Act prohibits the use of fixed term contracts for a period greater than 2 years (including renewals).  In addition, fixed term contracts cannot be extended more than once.

There are a number of exceptions, including where an employee earns more than the high income threshold (currently, $162,000 per annum) or is engaged to perform essential work during a peak demand period.

An employer must also provide an employee who will be engaged on a fixed term basis with a copy of the Fixed Term Contract Information Statement (which the Fair Work Ombudsman has been tasked to prepare).

Discrimination

Date of Commencement : 7 December 2023

There are a number of existing provisions in the FW Act which prohibit unlawful discrimination against an employee (or prospective employee) because they have a protected attribute (including race, sex or age). The Act introduces three new protected characteristics, being “breastfeeding”, “gender identity” and “intersex status”.

What should Employers do now?

We recommend Employers take the following steps to ensure compliance with the changes introduced by the Act:

• Review employment contracts and remove pay secrecy clauses.
• Employers should determine if they have any employees under fixed term contracts which exceed 2 years or have already been extended. It’s a good time to proactively planning your staffing requirements for when those contracts expire.
• Employers should ensure their job advertisements set out lawful rates of pay which are no less than the minimum rates required by law.
• Employers should review their policies and procedures concerning sexual harassment, unlawful discrimination and flexible working arrangements to ensure they align with the new requirements.
• Employers should take proactive steps to ensure appropriate measures are in place to prevent and prohibit sexual harassment in the workplace. Such steps may include induction training and regular refreshers for staff, reviewing policies and procedures, monitoring workplace culture and ensuring complaints are investigated promptly.
• Employers should consider whether their business could potentially be compelled to participate in the supported bargaining or single interest enterprise bargaining schemes and (if so) review their bargaining strategies prior to the commencement of the relevant changes.
• Prior to lodging a proposed enterprise agreement for approval before the FWC, employers should carefully consider whether it passes the new BOOT over the life of the agreement with a view to reducing the risk of amendments being made by the FWC during the approval process, and/or an application for review being made during the term of the agreement.
• Employers should consider whether they have any zombie agreements covering their business and what the impact would be if those agreement were terminated on the sunsetting date.
• Employers should address any underpayment of wages risks now as there may be a higher degree of risk of employees bringing recovery proceedings once the small claims compensation cap increases on 1 July 2023.

If you need any help with the above – [email protected]