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Labour’s Secure Jobs Better Pay Bill: Part 2

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On 21 November 2022, the Government’s Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (Bill) moved to a second reading in the Senate, bringing it one step closer to being passed as law.

The Bill proposes some of the biggest changes to Australian workplace law since the Fair Work Act 2009 (Cth) (FW Act) was introduced. For a summary of these proposed changes, see our article, Labour’s Secure Jobs, Better Pay Bill Unveiled, with Big Changes for Business.

Government’s priorities for the Bill’s passage

In his address to the National Press Club on 16 November 2022, the Honorable Tony Burke MP, Minister for Employment and Workplace Relations (Minister) indicated that getting the Bill through Parliament was a priority to getwages moving”, with the Bill’s key objectives being to “deal with insecure work…gender inequality…(and)…flatlining wages“.

What you need to know about the details

This article takes a deep dive into some of the key features of the Bill as they relate to secure jobs, gender equality, and pay secrecy, and what these changes could mean for employers. However, it is important to note that until the Bill is passed as law, the changes outlined below are only proposed changes.

We will deal with the proposed changes in relation to sexual harassment, enterprise agreements and industrial action in separate articles.

  1. Changes to fixed term contracts

The Bill includes a new provision in the FW Act, making it illegal to have fixed or maximum term contracts for longer than 2 years, or where the total length of renewable contracts is longer than 2 years, in circumstances where the person being employed is not a casual employee.

These prohibitions will not apply in certain circumstances, including where workers:

  • earn over the high-income threshold;
  • have a specialized skillset;
  • are subject to training arrangements; or
  • are engaged to perform essential work during peak demand periods or in emergencies.

The Bill also includes a provision making it illegal to terminate an employee’s employment, delay re-engaging an employee for a period, change the nature of work or tasks an employee is required to perform, or otherwise alter an employment relationship, so as to avoid the obligations with respect to fixed term contracts.

Disputes about fixed term contracts will be able to be arbitrated in the Fair Work Commission by agreement between the parties, or via the small claims processes in the Federal Courts.

  1. Harder for employers to refuse requests for flexible working arrangements

The Bill includes a new provision of the FW Act relating to requests for flexible working arrangements. Following an eligible employee’s request for flexible working arrangements, an employer must respond by:

  • agreeing to that request;
  • setting out a different change that has been discussed and agreed to with the employee; or
  • refusing the request subject to certain requirements.

Importantly, employers will only be able to refuse requests if they have discussed the request with the employee and have genuinely tried to reach an agreement but have been unable to do so. Employers will also need to have regard to the consequences of refusing the request and consider if the refusal is on reasonable business grounds (eg, due to costs, inefficiencies, loss of productivity or negative impact on customer service).

Furthermore, the Fair Work Commission will be empowered to deal with disputes about requests for flexible working arrangements.

  1. Promoting job security and gender equality

If passed, parts 4-5 of the Bill will amend the objectives of the FW Act to promote job security and gender equity.

The FW Act will also be amended to create new key objectives in modern awards of improving access to secure work across the economy, creating equal pay for equal work, or work of comparable value, eliminating gender-based undervaluation of work and providing working conditions that facilitate women’s full economic participation.

The Bill also empowers the Fair Work Commission to make equal remuneration orders via other amendments to the FW Act, and to take gender equity into consideration when doing this.

  1. Prohibition on pay secrecy

The Bill creates new workplace rights allowing employees to disclose their pay to each other, by amending the FW Act to insert several new provisions.

These laws will enable employees to discuss their pay and/or terms and conditions of employment which affect pay outcomes and will also ban pay secrecy clauses such that they have no effect. Employers will be contravening the FW Act if they enter into contracts that contain pay secrecy clauses.

What does all of this mean for employers?

It is important that employers are preparing themselves for these likely changes (potentially with some amendments).

In particular, now is a good time to start thinking about how you engage your workforce (including the use of casual employees and employees on fixed or maximum term contracts), flexible work policies and practices, and potential changes to your employment contracts.

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