Secure jobs, better pay: your guide to the reforms

Abolition of the ABCC

What's changed

Part 3 of the Secure Jobs, Better Pay Act abolishes the Australian Building and Construction Commission (ABCC).

The ABCC dealt with workplace relations matters in the building and construction industry, including investigating and taking legal action for breaches of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (BCIIP Act) and the Fair Work Act 2009 (Cth).

From 10 November 2022, the Fair Work Ombudsman (FWO) will become the workplace relations regulator responsible for enforcing the Fair Work Act for the construction industry, and all proceedings currently instituted by the ABCC will be transferred to the FWO.

The Code for the Tendering and Performance of Building Work 2016 (Building Code) has also been repealed as part of a tranche of changes to the BCIIP Act. The Code governed the standards of conduct for building industry participants involved in Commonwealth funded building work. (Note the Building Code was substantially amended in July 2022, and the content that remained is primarily to meet existing legislative requirements of the BCIIP Act and existing exemptions).

The Act will repeal provisions in the BCIIP Act relating to penalties for building industry participants. Matters such as unlawful industrial action, coercion, adverse action, freedom of association and discrimination will now be dealt with under provisions of the Fair Work Act and will continue to apply to building industry participants, as will provisions relating to right of entry, and prohibiting pattern bargaining in industrial action.

The FWO may commence compliance and enforcement procedures, albeit with lower penalties compared to those applicable for this type of conduct under the BCIIP Act, and also has a range of other powers to investigate and address breaches of the Fair Work Act, including to acquire information under notice, but does not have the same compulsory examination powers as the ABCC’s.

Part 25A of the Act also establishes the National Construction Industry Forum, which will commence on 1 July 2023. The Forum is not meant to replace the ABCC but will be a statutory advisory body for the building and construction industry, chaired by the Minister for Employment and Workplace Relations. Its members will have experience representing employees and employers in the building and construction industry, the idea being that employees and employers will be equally represented by the Forum. The Act gives the Forum a broad remit to provide advice to the Government on matters relating to work in the building and construction industry, and sets out a non-exhaustive list of matters the Forum may advise on.

What does this mean for you?

Building industry participants will no longer need to comply with the requirements previously prescribed by the BCIIP Act and the Building Code, however will need to familiarise themselves with and continue to comply with relevant provisions of the Fair Work Act.

The building industry will no longer have a regulator with a sole focus on activities in this sector so it should prepare itself to take action and address any non-compliance with industrial laws, such as breaches of right of entry requirements, unlawful industrial action, freedom of association and coercion.

When do I need to take action?

The abolition of the ABCC will occur the day after the Act receives royal assent (on 7 December 2022). Any consequential amendments and repeals as a result of the abolition of the ABCC will occur by proclamation or 2 months after the date of royal assent (6 February 2023).

Entities should review their industrial relations policies now in light of the abolition of the ABCC and be prepared to take action themselves for the breaches of any requirements of the Fair Work Act in terms of right of entry, unlawful industrial action, coercion, adverse action, and discrimination.

Changes to the Building and Construction Industry

The Government’s amendments to the Fair Work Act through the Secure Jobs, Better Pay Act have a significant impact on the building and construction industry. The Act will now establish the National Construction Industry Forum and carves out the building and construction industry from the multi-employer bargaining provisions of the Act.

National Construction Industry Forum

The National Construction Industry Forum will be established to provide advice to the Government in relation to work in the building and construction industry. This follows concerns regarding how the Government would handle building and construction industry issues once the Bill abolishes the Australian Building and Construction Commission.

The Forum will be made up of the Minister for Employment and Workplace Relations (currently the Hon Tony Burke MP) (the Minister), the Minister for Industry and Science (currently the Hon Ed Husic MP), the Minister for Infrastructure, Transport, Regional Development and Local Government (currently the Hon Catherine King MP) and members appointed by the Minister. The Minister must appoint one or more members who have experience representing employees in the building and construction industry, and the same number of members who have experience representing employers in the building and construction industry, including at least one member who has experience representing contractors in the building and construction industry.

The Forum must meet twice in each calendar year and will provide advice in relation to workplace relations, skills and training, safety, productivity, diversity and gender equity and industry and culture amongst other matters.

The provisions establishing the Forum commence on 1 July 2023.

Building and construction industry carve-out

The building and construction industry will now no longer be subject to the multi-employer bargaining provisions of the Act. The phrase “general building and construction work” has the meaning given by paragraph 4.3(a) of the Building and Construction General On-site Award 2020 as in force at the applicable time. Paragraph 4.3(a) states:

“(i) the construction, alteration, extension, restoration, repair, demolition or dismantling of buildings, structures or works that form, or are to form, part of land, whether or not the buildings, structures or works are permanent and maintenance undertaken by employees of employers covered by clause 4.1 of such buildings, structures or works;

(ii) site clearance, earth-moving, excavation, site restoration, landscaping and the provision of car parks and other access works associated with the activities within clause 4.3(a)(i); and

(iii) the installation in any building, structure or works of fittings and services.”

Despite the broad definition above, the carve-out does not apply to the following work:

• civil construction;
• metal and engineering construction;
• manufacturing and associated industries and occupations;
• joinery and building;
• electrical services;
• plumbing or fire sprinkler fitting;
• black coal mining;
• mining;
• quarrying;
• concrete products;
• premixed concrete; and
• lift, escalator, air-conditioning or ventilation installation, major modernisation, serving, repair or maintenance.

Changes to equal pay

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) introduces measures to secure equal pay objectives for employees including to address the gender pay gap by prohibiting pay secrecy and establishing new Expert Panels.

What's changed

Work of equal or comparable value

The Fair Work Act 2009 (Cth) currently allows the Fair Work Commission (FWC) to make a determination varying modern award minimum wages if the FWC is satisfied by work value reasons on application by an employee, employee organisation or the Sex Discrimination Commissioner. Work value reasons are related to any of:

• the nature of the work;
• the level of skill or responsibility involved in doing the work; or
• the conditions under which the work is done.

This provision was intended to ensure that the FWC could determine a wage floor for work of equal or comparable value.

The Act legislates that the FWC can now make determinations on its own initiative and the FWC's consideration of work value reasons must be free of assumptions based on gender, and include consideration of whether historically the work has been undervalued because of assumptions based on gender.

Prohibiting pay secrecy

Employment contracts commonly contain provisions requiring employees to keep their remuneration confidential. The Act introduces provisions intended to promote pay transparency by prohibiting pay secrecy. Employees will now have a workplace right to disclose their remuneration or any terms and conditions of their employment that are reasonably necessary to determine remuneration outcomes. Employees will also be free to ask other employees about that information.

Any terms of contracts of employment which are inconsistent with the new workplace rights will have no effect, and an employer who enters a contract of employment which contains a provision inconsistent with the new workplace rights after the provisions come into effect will contravene the Act.

New expert panels

The Act introduces the Expert Panels for pay equity, the Care and Community Sector and pay equity in the Care and Community Sector. These Expert Panels must be constituted with a majority of members who have knowledge of, or experience in, gender pay equity or anti-discrimination (Expert Panel for pay equity), or the Care and Community Sector (Expert Panel for the Care and Community Sector).

The provisions relating to the new Expert Panels require that decisions involving substantive gender pay equity matters or, in relation to the Care and Community Sector, varying a modern award or making an equal remuneration order are made by Expert Panels constituted for that purpose. This ensures that decisions about these matters are made by panels with a majority of their members having knowledge of, or experience in, the relevant matter.

What does this mean for you?

The pay secrecy provisions will have immediate effect on employers because contractual terms which are inconsistent with the prohibition will have no effect. Employees will be free to disclose their remuneration to other employees, thereby giving employees more bargaining power during pay negotiations.

Any new contract entered into by an employer which contains a term inconsistent with the new workplace rights will contravene the Act. Employers should consider their existing contracts and new or varied contracts to ensure any terms inconsistent with the new workplace rights are no longer included. The maximum penalty for contravention by a corporation is $66,600 (or $666,000 for a serious contravention).

When do I need to take action?

The provisions relating to equal pay including the changes to pay secrecy will come into effect the day after the Bill receives Royal Assent (on 7 December 2022). Contracts of employment entered into before this date which contain a term inconsistent with the new workplace rights will not be affected unless they are varied after commencement.

Sexual harassment and discrimination

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 has a number of key amendments that respond to the recommendation in the Australian Human Rights Commission’s Respect@Work report that the Fair Work Act 2009 expressly prohibit sexual harassment. The amendments expand the way in which sexual harassment matters can be handled by the Fair Work Commission (FWC) and the Federal Courts.

Under the Act, sexual harassment in the workplace is expressly prohibited and a breach of this prohibition can result in claims and civil penalties. Separately, the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Act 2022 introduced a positive duty for employers to take reasonable and proportionate measures to eliminate unlawful sexual harassment, which requires employers to significantly step up their current sexual harassment risk management practices.

What will change

Prohibiting sexual harassment in the workplace

The prohibition of sexual harassment in the workplace extends to all “workers”, including employees, contractors, subcontractors, outworkers, apprentices, trainees, students and/or volunteers, as well as prospective workers and third parties such as clients and customers. Workers, prospective workers, and persons conducting a business or undertaking will each be able to seek remedies under the Fair Work Act.

The Act allows for the FWC to deal with sexual harassment by:

1. continuing to provide for mechanisms for workers to seek a “stop sexual harassment order” to prevent future harassment; and
2. dealing with a dispute and ordering compensation to remedy past harm caused by sexual harassment through mediation and conciliation. If the matter remains unresolved, the parties can consent to arbitration in the FWC, or the worker(s) or their union can proceed to the Federal Court or the Federal Circuit and Family Court of Australia within 60 days of the FWC issuing a certificate confirming that the matter remains unresolved.

The FWC will be provided with the discretion to dismiss an application made more than 24 months after the relevant contravention (or the last of the contraventions) is alleged to have occurred, consistent with the limitation period under the Sex Discrimination Act 1984 (SDA).

Central to these changes is the ability for applications to be made jointly by multiple aggrieved persons, as well as by a union, as opposed to a single individual. This will enable the FWC to deal with multiple parties together if it is appropriate to do so – for example, where there is a common perpetrator or principal or work location of where the sexual harassment has occurred, from a practical perspective.

These amendments enhance the equivalent provisions in state and federal discrimination legislations in seeking remedies for past harm. One or more workers can have their matter handled by their union instead of the burden being on them to pursue a claim, the FWC and Federal Courts will handle the matters in an efficient and timely manner, and the flexibility to deal with multiple parties can minimise re-traumatisation of aggrieved persons for example, by limiting the number of times that an aggrieved person is required to give evidence. Additionally, the FWC must conduct any conferences in private, as a protection for victim survivors and witnesses.

Pursuant to the Act, a person can make a single application seeking to stop sexual harassment and later seek remedy for past harm caused by sexual harassment but is not otherwise able to double-dip by obtaining multiple remedies for the same conduct under the Fair Work Act, as well as an anti-discrimination law or the Australian Human Rights Commission Act 1986 (Cth).

In addition to this new avenue for workers to seek compensation, the regulator, the Fair Work Ombudsman (FWO) will have powers to investigate and bring civil penalty proceedings against employers or individuals for contraventions of the prohibition on sexual harassment in the workplace.

Anti-discrimination and special measures

“Breastfeeding”, “gender identity” and “intersex status” definitions will be included into the anti-discrimination provisions of the Fair Work Act, allowing for the harmonisation of defined terms with other Commonwealth anti-discrimination laws, including the SDA.

The changes relating to anti-discrimination will come into effect the day after the Act receives Royal Assent (on 7 December2022).

What will this mean for you?

We expect to see an increase in action taken to remediate sexual harassment, noting that under the Act:

• unions are able to bring matters relating to sexual harassment in the workplace on behalf of workers;
• the FWO has additional powers to investigate and bring civil penalty proceedings for contraventions of the prohibition on sexual harassment; and
• workers can bring joint applications.

Similar to the experience of the stop-bullying jurisdiction of the FWC, we envisage that the stop sexual harassment jurisdiction will be less utilised in the absence of compensation orders being available than the remedial jurisdiction.

The amendments are also accompanied by a vicarious liability provision (modelled on the vicarious liability provisions in the SDA, ensuring a coherent federal framework in the differing jurisdictions) – which means that an aggrieved person can seek remedy from their employer in addition to the individual perpetrator for a breach of the prohibition, where the employer did not take all reasonable steps to prevent the relevant sexual harassment. Separately, the proposed positive duty to be inserted into the SDA means that employers or principals who fail to take reasonable steps to prevent workplace sexual harassment more broadly in the workplace may also be subject to enforcement action.

As part of the FWO’s ability to investigate suspected contraventions either proactively or in response to a complaint, the FWO will now be able to issue statutory notices compelling the production of documents and records or the examination of individuals. If the complaint is sustained, the FWO can take a number of enforcement outcomes such as compliance notices, enforceable undertakings or litigation seeking civil penalties and/or compensation.

The dispute resolution powers to remedy past harm are intended to be utilised in a timelier and more accessible forum and allow for workers themselves (or a union) to now seek compensation in the FWC or the Federal Courts (the latter which was only previously available under the SDA) as well as civil penalties in the Federal Courts.

The maximum civil penalty is 60 penalty units (currently $13,320 for an individual and $66,600 for a body corporate) and there is no cap on compensation orders in the federal jurisdiction.

When do I need to take action?

The changes relating to sexual harassment commence 3 months after the day after the Act receives Royal Assent (on 6 March 2023).

Employers should critically assess what steps need to be taken within their organisation to prevent and prohibit sexual harassment – which as a starting point may include:

• supporting a “safe to speak up” culture, including via leadership endorsement of the organisation’s “speak up” channels, to encourage complainants of sexual harassment to raise any grievances or concerns so they can be dealt with by the organisation;
• reviewing and updating policies to ensure they clearly prohibit discrimination and harassment and apply to the broad spectrum of workers, prospective workers and other parties that will come within the scope of the new framework;
• reviewing and updating procedures available to resolve grievances or disputes, including investigation processes, noting the FWC must have regard to these matters when considering an application for a “stop sexual harassment” order;
• assessing reward and consequence management frameworks, and ensuring employees understand that discrimination and harassment may result in disciplinary action, to support the prohibition against sexual harassment;
• developing targeted and effective discrimination and harassment training that is rolled out periodically to staff (including bystander training) and keeping clear records of staff attendance – to ensure all staff are made aware that discrimination and harassment is prohibited and how to raise any concerns; and
• continuous monitoring of the workplace environment and culture and responding to any risks or incidents – including undertaking a sexual harassment-specific risk assessment and implementing appropriate controls in response to any risks identified.

Bargaining

The Secure Jobs, Better Pay Act makes significant changes to the enterprise bargaining framework. To encourage bargaining, the Act reduces barriers to multi-enterprise bargaining and expands the FWC’s powers to resolve bargaining disputes, up to and including by arbitration.

What's changed

The big change everyone is focused on are the changes to multi-employer bargaining. However, the changes go beyond this and include reduced barriers to FWC arbitration and changed approval process for agreements.

Multi-employer bargaining

The Act does not introduce new streams of multi-employer bargaining, but reduces barriers to access the existing multi-employer bargaining streams:

• Supported bargaining – this is a stream of multi-enterprise bargaining designed to assist industries with low agreement coverage. The administrative side of the new supported bargaining stream is not dissimilar to the low paid bargaining stream (which it replaces), but the Act has sought to overcome the historical issues with the low paid stream by removing the definition of low paid, which was interpreted narrowly and precluded employees accessing the stream, with a broader common interest test. This allows the FWC to consider matters such as the prevailing pay and conditions in the industry and whether the employers have common interests. The intention is to make it easier for employees to access this stream than the old low paid bargaining stream. While employees can apply to the FWC to have themselves and their employer added to a supported bargaining authorisation without the employer’s consent, the vote is done by employer cohort, meaning that if employees of one named employer don’t vote in favour of the agreement, the agreement won’t apply to them.
  
  
• Single interest employer authorisations – the Act makes significant changes to the single interest employer authorisation scheme. One such change is that it repeals the term “single interest employers”, instead introducing “common interest employers” who can bargain together for a multi-enterprise agreement. Despite removing this term, the FWC may still issue a single-interest employer authorisation using updated criteria for assessing whether employers are common interest employers. The Act clarifies that single interest employer agreements will now be a form of multi-enterprise agreement. The Act amends the Fair Work Act to ensure employers with clearly identifiable common interests can more easily bargain together. It provides that the operations and business activities of common interest employers must be reasonably comparable for the purposes of making or varying a single interest authorisation or agreement. For employers with 50 or more employees, the onus is on the employer to establish it is not a common interest employer or its operations and business activities are not reasonably comparable with the other employers. The changes also make it easier for employers to be added to an existing single enterprise agreement, or an existing single-interest employer authorisation, including without the employer’s consent (provided a majority of employees approve), with the following caveats:
  • Employers who employ fewer than 20 employees may not be added to a single interest employer agreement or authorisation without their agreement; and
  • The FWC will have the discretion to refuse an application to add a new employer to a single interest employer agreement or authorisation if the FWC is satisfied that, on the day it will approve the relevant application, less than 9 months have passed since the most recent nominal expiry date of an agreement.
• Co-operative workplaces – the new term for multi-enterprise agreements, the co-operative workplaces stream will have some key differences, including the ability for employer and employees to become covered by an existing multi-enterprise agreement and to be added to a multi-enterprise agreement.

Other key changes also include:

• A new requirement that an employer negotiating as part of a multi-enterprise agreement must obtain written consent from each union acting as a bargaining representative for the agreement prior to putting the agreement to an employee vote to either approve or vary the agreement. This effectively gives the unions an extraordinary veto power over multi-enterprise agreement voting.
• A carve-out for the construction industry. Under the changes, employees who perform excluded work, defined as “general building and construction work”, cannot be covered by a multi-enterprise agreement (including work in the “civil construction” sector, and not including work in the asphalt industry). This is a significant change and marks a significant victory for the construction industry.

Fewer barriers to commencing bargaining

The Act reduces barriers to commence bargaining for replacement agreements, meaning that employers who have previously bargained with employees have fewer options to resist bargaining for new agreements.

Replacement agreements

The Act removes the need for a notice of employee representational rights to be issued to commence bargaining for a replacement enterprise agreement. A replacement agreement is defined as one which will replace an existing agreement which had a nominal expiry date within the last 5 years and which covers a substantially similar scope of employees. In that case, bargaining will commence on written request from an employee bargaining representative. This is a much simpler and less procedural approach to commencing bargaining. It also removes opportunities for employers to resist bargaining; in the case of an existing expired Agreement, a majority support determination will no longer be required to force an employer to commence bargaining.

Enhanced bargaining dispute powers

Complementing the reduced barriers to bargaining and enhanced access to multi-employer bargaining are stronger powers for the FWC to assist in resolving bargaining disputes, including a simpler and faster pathway to arbitration.

• Intractable bargaining declarations – These new declarations are an alternative to the serious breach declaration scheme, which sanctioned bargaining representatives who breached a bargaining order requiring them to comply with the good faith bargaining requirements.
  
  The new intractable bargaining scheme shifts the focus from individual bargaining representatives’ compliance to the overall progress of the dispute. Where negotiations have become “intractable”, the FWC will now have the power to issue an intractable bargaining declaration and, after an optional period of time for the parties to continue negotiating, proceed to issue a workplace determination. The Act provides for a minimum bargaining period which is the later of 9 months after the nominal expiry date of any existing agreement, or the day that is 9 months after the day bargaining starts. This minimum period must have passed before the parties can be issued an intractable bargaining declaration.
  
  
• Fewer barriers to arbitration – As part of the intractable bargaining declaration scheme, the FWC is able to arbitrate bargaining disputes by issuing a workplace determination after they’ve issued an intractable bargaining declaration. The process to arbitration therefore has fewer steps (no need to get a bargaining order, then a serious breach declaration), which may lead to more arbitration. The Act also reduces the requirements for all parties to consent to FWC assistance with a bargaining dispute, making access to FWC intervention easier than before.
  
  
• The Act also provides that no party can unreasonably withhold agreement for a proposed enterprise agreement being put to a vote, and the FWC is able to resolve any associated disputes. This amendment may reduce the number of disputes which make it to the “Intractable disputes” process as an alternative strategy may be to put the proposed Agreement to a vote.

What does this mean for you?

Expect more pressure to bargain and if you have an expired Agreement to be required to bargain.

In particular, employers in certain industries targeted by the supported bargaining and single interest employer streams face an increased risk of being included in multi-enterprise bargaining. Target industries include those with high proportions of First Nations employees or employees with disabilities, and those which traditionally pay at or close to Award wages, including:

• aged care;
• disability care; and
• early childhood education.

There is some relief for small business owners, who are exempt from being added into a single interest employer authorisation without consent. The Act amends the definition of small business in these circumstances to be increased to 20 employees (including casual).

For employers who are at less risk of being co-opted into multi-employer bargaining, the renewed focus on collective bargaining makes it more likely that your employees will seek to bargain.

When do I need to take action?

The Act has passed as law, with amendments commencing by proclamation, or 6 months after the Act receives Royal Assent (on 6 June 2023). If you have an enterprise agreement which has passed its nominal expiry date, carefully consider if it would be worth negotiating a replacement agreement before the significant changes to bargaining commence in 2023. All employers with expired Enterprise Agreements should be considering their Industrial Strategy now. Employers likely to commence bargaining in the next six months should get advice on their industrial strategy now.

Enterprise agreements

The Secure Jobs, Better Pay Act makes changes to enterprise agreements which sound relatively minor but may have major impacts. Employers should review and understand what this might mean for any future bargaining.

What's changed

The biggest changes around enterprise agreements relate to the procedural requirements for approval of an agreement, unilateral termination and the Better Off Overall Test (BOOT).

Procedural requirements

The Act replaces the current prescriptive pre-approval requirements for agreements – such as issuing a notice of employee representational rights and strict timeframes for key steps in the voting process – replaced by a broader requirement that the FWC be satisfied the employees “genuinely agreed” to the agreement.

While the Bill originally proposed to remove some key employee safeguards such as the requirement to explain the effects of key terms of the agreement to certain groups of employees such as young employees, this change was abandoned after debate in the House of Representatives and these important safeguards were retained. The removal of the administrative requirements currently in the Fair Work Act are welcome relief to many employers who have been tripped up by small procedural oversights during the agreement approval process.

Termination

A significant change is that to the process for unilaterally terminating an enterprise agreement which has passed its nominal expiry date. Previously, the FWC need only be satisfied that terminating an agreement which has passed its nominal expiry date is “not contrary to the public interest” and take into account the views of the parties to the agreement. The Act changes this, requiring the FWC to instead be satisfied of one of the following before terminating an existing agreement:

• the continued operation of the agreement would be unfair to the employees it covers;
• the agreement does not and is not likely to cover any employees; or
• the continued operation of the agreement would pose a significant threat to the viability of the business, terminating the agreement would reduce the risk of terminations, and the employer gives a guarantee that it will preserve termination entitlements under the agreement.

The Act requires the FWC to only terminate the agreement if one of the above criteria is met and if the FWC is satisfied that it is appropriate in all the circumstances to terminate it.

The new considerations make it much more difficult to employers to terminate out-of-date agreements.

The changes relating to termination are due to commence the day after the Act receives Royal Assent (on 7 December 2022). Accordingly, employers with agreements that require termination should consider their industrial strategy now.

BOOT

The Act also changes the BOOT to address some of the concerns that have been raised about its application. In particular, the changes require the FWC to undertake the BOOT as a global assessment, instead of a line-by-line comparison. The FWC also only needs to apply the BOOT to reasonably foreseeable patterns or types of work under the agreement, reducing the risk of a hypothetical scenario bringing down the entire agreement.

Another significant change is that the FWC is now able to amend proposed agreements itself, to amend or remove terms which don’t meet the BOOT. This means the proposed agreement won’t need to be voted on again by employees.

While this change is a welcome one, it may have unintended consequences with the ability for bargaining representatives to have a much more significant influence on the outcome of what any agreement may look like – after it has been approved by employees.

Employers need to consider the BOOT process carefully before they submit an Agreement to reduce the risk of changes being made to the Agreement during the approval process.

The key changes are a new requirement for the FWC to seek the views of the parties who will be covered by the agreement if the FWC proposes to make an amendment to the agreement to address a concern about the BOOT. A new pathway for reconsideration of the application of the BOOT has also been added. This is to ensure that new employees who are engaged after an agreement has already been assessed for BOOT compliance can apply for reconsideration. If they do so, the BOOT will be applied as at the time the original application for the agreement to be approved or varied was made.

The changes in respect of the BOOT are due to commence by proclamation, or 6 months after the Act receives Royal Assent (on 6 June 2023).

What does this mean for you?

In general, this is good news for employers. The modified BOOT is simpler, and the ability for the FWC to amend the agreement without employees having to vote on it again is beneficial for all parties to an agreement. Considered with the reduced procedural pre-approval requirements, the overall process for the FWC to approve an agreement may be simpler, faster, and less likely to be torpedoed by administrative errors.

The same can’t be said for the termination provisions. The tightening of conditions for unilateral termination may mean employers are saddled with agreements which are outdated and not fit for purpose well past their use-by date, with no alternative but to bargain.

When do I need to take action?

Employers with out-of-date agreements but not in a position to bargain should consider moving to termination as soon as possible, to make sure any termination action is considered under the current requirements.

For employers who are concerned about administrative compliance in an existing bargaining process, it would be worth delaying putting your agreement up for approval until the New Year, when the changes to approval considerations come into effect.

In any event, advice should be sought on your industrial strategy to make sure you can take the opportunity of the changes while avoiding the new risks have been introduced.

Fixed-term contracts

The Secure Jobs, Better Pay Act introduces significant amendments to limit the use of fixed-term contracts and move more employees into permanent employment. Employers will need to undertake better workforce planning, ensure that the intended use of fixed-term contracts is permitted and that they appropriately engage, remunerate and manage the cessation of employment of fixed-term employees.

What's changed?

The Act introduces provisions to limit the use of fixed-term contracts for the same role (or substantially similar work) to two consecutive contracts or a maximum duration of two years (subject to certain exceptions).

The provisions also convert fixed-term contracts to permanent employment contracts in certain circumstances.

The prohibitions and regulation apply to both fixed-term and outer-limit contracts (ie. a contract with an expiry date but with a general right to terminate prior to that date).

The use of these types of contracts is prohibited where:

• the engagement under the contract is for a period greater than two years (including any extensions or renewals);
• the contract includes an option to renew or extend the contract more than once; or
• the employee has been engaged on consecutive fixed-term contracts and:
  • the employee's total engagement under the contracts is greater than two years; or
  • oone of the contracts contains an option to renew of extend the contract.

For a contract to be a consecutive fixed-term contract, the employee must be engaged to perform the same, or substantially similar work. In addition, there must be substantial continuity of the employment relationship between the contracts.

The Act sets out a number of exceptions to the prohibition, such as where an employee is engaged:

• to perform only a distinct and identifiable task involving specialised skills;
• to perform essential work during a peak demand period, emergency, or a temporary absence of another employee; or
• under a training arrangement or government funding arrangement of no more than two years
• the employee earns above the high-income threshold for the year in which the contract is entered into (currently $162,000pa)
• it is appointment to a governance position that is time limited under the governing rules of a corporation or association;
• it is wholly or partly government-funded (as prescribed) for more than two years and "there is no reasonable prospect that the funding will be renewed at the end of that period";
• a modern award permits the use of fixed-term contracts in those circumstances and permits the term of the contract.

Employers are now required to provide employees with a fixed-term contract information statement before or as soon as practicable after the contract is entered into. The Fair Work Commission has also been empowered to create additional exceptions in modern awards.

Employers who wish to rely on an exception will bear an evidential burden to demonstrate the exception applies. So a mere assertion that the exception is met or if you get it wrong will see the employment contract deemed continuing and constitute a breach of the Act.

What does this mean for you?

Employers need to review the make-up and composition of their workforce and audit the circumstances in which they are using fixed-term contracts.

Employers need to identify the relevant exceptions that may apply to them and should prepare a guideline and put in place controls as to when a fixed-term contract can be offered and when they expire.

Fixed-term contract templates should be reviewed to ensure compliance (eg. by not having provisions referencing potential for multiple renewals).

Given that two consecutive contracts, even for a very brief period (eg. two x three month contracts) mean that a further fixed-term contract cannot be offered, employers should review the periods offered and whether a contract is a renewal or a variation of an existing contract will need to be carefully applied.

Under the Act, a prohibited fixed-term contract will be effectively converted into a contract for permanent employment. The Act does this by providing that the fixed end-date in the contract will cease to have effect.

Employers will need to be mindful of this conversion – fixed-term employees who are captured by the prohibition may be eligible to notice of termination, redundancy pay, and could be eligible to bring an application to the Fair Work Commission for unfair dismissal.

The Fair Work Commission will also have a role in resolving disputes about the operation of the fixed-term contract provisions, although it will not be permitted to arbitrate the dispute. Employees will instead be able to seek orders from a court regarding their employment status using the existing small claims procedure.

Employers should also be aware that the Act includes an anti-avoidance provision to prevent employers manufacturing circumstances to avoid the prohibition. This may include delaying re-hiring an employee or artificially changing the tasks the employee is to perform.

When do I need to take action?

Workforce planning and contract template reviews should be being considered now.

The provisions relating to fixed-term contracts will come into effect 12 months after the Act receives Royal Assent (on 6 December 2022) with Minister Burke confirming he will not be making a proclamation and will apply to contracts entered into on or after that date. However, fixed-term contracts entered into prior to commencement will be relevant to determining whether the parties have subsequently entered into a prohibited consecutive contract.

Flexible work

The Secure Jobs, Better Pay Act 2022 amends rules relating to requests for flexible work arrangements and introduces new provisions empowering the Fair Work Commission to resolve disputes regarding such requests.

Employers will now be required to meet with employees to discuss requests for flexible work arrangements and cannot refuse a request before discussing alternative working arrangements with employees.

What's changed

The Act builds on the existing rights to request flexible working arrangements under section 65(1A) of the Fair Work Act 2009 (Cth) by expanding the circumstances in which an employee may request flexible work arrangements to include situations where an employee, or a member of their immediate family or household experiences "family and domestic violence", as defined in section 106B(2) of the Act.

The Act also inserts a new section 65A, which requires an employer who receives a request for flexible working arrangements to:

• meet with an employee to discuss their flexible work request; and
• where the employer intends to refuse the flexible work request, agree upon alternative changes to the employee’s working arrangements and note the agreed changes in the employer's written response; or
• if the employer still intends to refuse the request, outline the employer's reasonable business grounds for refusal and address the following:
• changes to the employee's working arrangement that would accommodate (to any extent) the employee's circumstances and that the employer would be willing to make; or
• that there are no such changes the employer could make to accommodate the employee's circumstances.

For the first time the Act introduces a dispute resolution mechanism for circumstances where an employer has:

• refused a flexible work request; or
• not provided a written response to a flexible request within 21 days; and
• the parties are unable to resolve the dispute through discussion at the workplace level.

The Act stipulates that, where a flexible working arrangement dispute arises, conciliation should be the first avenue of dispute resolution (unless there are “exceptional circumstances”).

Where conciliation is unsuccessful, or “if urgency is required”, the Fair Work Commission will have the power to "deal with a dispute as it considers appropriate" or through mandatory arbitration, in accordance with new section 65C (Arbitration Clause), under which the Fair Work Commission can make binding decisions, including:

• an order that an employer be taken to have refused a flexible work request, where the employer has not responded within the prescribed 21 days; or
• where the employer has refused the request, an order that it would be appropriate for the grounds on which the employer refused the request to be taken, or not to be taken, as reasonable business grounds; or
• an order that the employer provide the employee with a written response to their flexible work request under s 65A of the Act.

Orders under the new section 65C cannot be inconsistent with the Fair Work Act, or a term of a fair work instrument (other than another Fair Work Commission order of the same kind).

What does this mean for you?

Practically, the changes expand an employer's current obligations under the Act in relation to flexible work requests, to also include:

• an obligation to meet with the employee and discuss their request for flexible work arrangements;
• an obligation to inform the employee of any changes to working arrangements the employer is willing to consider to accommodate the employee’s circumstances; and
• potentially engaging with a Fair Work Commission process to resolve disputes around the management and refusal of flexible work requests.

When do I need to take action?

The flexible work amendments in the Act commence six months after the day after the Act receives Royal Assent (on 6 June 2023).

Employers should therefore be reviewing their current practices for considering and responding to requests for flexible working arrangements now, including updating or implementing policies or procedures on flexible working arrangements to ensure they align with the criteria and timeframes set out in the Act.

In particular, employers should consider:

• how they will approach any future discussions with employees regarding flexible work requests; and
• what limitations exist in relation to their ability to offer flexible working arrangements (taking into account the nature of the business) and how these limitations might be evidenced.

Small claims procedure

The Secure Jobs, Better Pay Act introduces changes to seek to enhance access to the small claims procedure set out in section 548 of the Fair Work Act. Under this procedure, employees can commence their own legal action against their employer to seek to recover underpayments, and in respect of certain disputes regarding casual conversion requests, in the Federal Circuit and Family Court (Division 2) and State and Territory Magistrates’ Courts or their equivalent. In such proceedings, the Court is not bound by rules of evidence and can act in an informal matter without regard to legal forms and technicalities. Parties need to obtain leave to be represented.

Recent inquiries (including by the Migrant Workers’ Taskforce and the Senate Unlawful Underpayments Inquiry) highlighted concerns that the benefits of the procedure are not being fully realised, and the low cap threshold (of up to $20,000) and filing fees are a barrier and disincentive to employees using the process and seeking redress for wage theft. Employers will see an increase in claims that they need to defend in this space.

What's changed

The two key changes in Part 24 of the Act are:

1. To increase the monetary cap on the amount that can be awarded under the Fair Work Act in a small claims proceeding from $20,000 to $100,000.

   The primary objective of this change is to allow more prospective claimants with modest claims to benefit from the “simpler, quicker and cheaper” approach to dispute resolution, and to avoid prospective complainants with modest claims that exceed $20,000 from abandoning part of their claim to bring it within the monetary cap or not using the procedure at all (and instead having to use the full court process which is expensive, time-consuming and complex.

2. to enable the Court in a small claims proceeding, to award to a successful claimant any filing fees they paid to the Court as costs from the other party.
   
   This is intended to override the general rule as to costs under section 570 of the Fair Work Act and enable the Court to apply the “usual rule” (subject to the Court’s overriding discretion in the interests of justice) that a successful party is entitled to their costs. This means that an applicant employee (or organisation) can generally expect to recover their filing fee if their claim is successful and also ensures that any compensation received is not diminished by the costs incurred in lodging the claim, therefore encouraging more claimants to use the small claims procedure.

What does this mean for you?

The increased monetary cap and likely award of any filing fees to successful claimants may incentivise more employees to bring claims through the small claims procedure. Currently, employees with claims over $20,000 must use the traditional court process, which involves formal legal proceedings with more drawn-out processes, including stricter rules of evidence and higher filing fees. For that reason, there are likely employees who don’t bring claims at all. However, if employees bring claims through a traditional court process employers may be required to settle those claims for a higher amount and spend more on legal fees in that process.

Accordingly, although employers might see an increase in claims under the small claims procedure that need to be defended (perhaps without legal representation), the utilisation of this process may consequently reduce the cost and complexity for employers to respond to and settle the claims, as opposed to an employee making the same claim in another court.

When do I need to take action?

Changes to small claims procedures are due to commence on 1 July 2023, whichever is later. Employers should be taking appropriate action to avoid, and where relevant, address underpayment risks and should otherwise be aware of the potential increase in claims in this jurisdiction.

Miscellaneous changes

The Secure Jobs, Better Pay Act introduces changes to several other miscellaneous provisions in the Fair Work Act, which will:

• abolish the Registered Organisations Commission (ROC);
• prohibit employment advertisements with pay rates that would contravene the Act or a Fair Work instrument; and
• amend existing presumptive liability provisions in the Safety, Rehabilitation and Compensation Act 1988 (Cth) (SRC Act) relating to firefighters.

What's changed

Abolition of the Registered Organisations Commission

The Act currently empowers the ROC as the independent regulator of Unions and Employer Associations. After the prevalence of financial misconduct within registered organisations, the ROC was established in 2014 to ensure better governance and financial transparency of registered organisations.

Part 1 of the Act abolishes the ROC and has the ROC’s powers and functions absorbed by the Fair Work Commission (FWC), while the ROC’s regulatory functions will be transferred to the General Manager of the FWC. The Act also modernises and expands enforcement options through introducing infringement notices and enforceable undertaking schemes, bringing the regulator’s powers consistent with other comparable Commonwealth regulators.

Abolition of the ROC will occur by proclamation, or otherwise 6 months after the date the Act received Royal Assent (on 6 June 2023).

Prohibited non-compliant job advertisements

Part 25 of the Act introduces penalties imposed on employers who advertise employment opportunities at a rate of pay that would contravene the Act or a fair work instrument (for example, an award or enterprise agreement). Special provisions apply for piecework, which is work that is paid at a fixed rate based on the amount done rather than the time it takes to do the job. The Act requires advertisements of piecework to include any periodic rate of pay which the pieceworker would be entitled.

There is a defence for employers if they had a “reasonable excuse” for non-compliance. Reasonable excuse is not defined in the Act, however it will depend on the circumstances of the case – for example, if an employer reasonably relied on incorrect advice about the applicable pay rates.

Presumptive liability provisions for firefighters

Part 27 of the Act is a discrete change which relates to access to compensation for firefighters who contract any of the prescribed diseases contained in the SRC Act.

The changes reflect outcomes of the Government’s “Review of the firefighter provisions of the SRC Act 1988”, including that:

• the qualifying period for oesophageal cancer will be reduced from 25 years to 15 years;
• the current list of prescribed diseases will be expanded to include malignant mesothelioma with a qualifying period of 15 years; and
• given the current provisions of the SRC Act only apply to firefighters employed by the ACT Government, Airservices Australia and the Department of Environment and Energy, the Act legislates to extend the provisions to persons taken to be employed by the ACT (i.e. volunteer firefighters of the ACT Fire and Rescue Service). The Act introduces the ability for the ACT to establish an “ACT firefighting advisory committee” to assist in the determination of whether firefighting or related duties make up a “not insubstantial” portion of the duties for ACT volunteer firefighters. Whether firefighting duties make up a “not insubstantial” portion of the persons duties has implications for whether they are deemed an employed firefighter for the purposes of the SRC Act.

What does this mean for you?

The prohibition on non-compliant job advertisements is the key “miscellaneous” change for employers to be aware of and to action. This measure addresses concerns raised in the Migrant Workers’ Taskforce and the Senate Unlawful Underpayments Inquiry. This could indicate that there will be higher scrutiny on industries or companies that employ migrant workers.

This provision requires employers to fully understand their workplace obligations before advertising for jobs, and ensure they incorporate any additional entitlements in the advertised rates of pay, for example, casual loadings payable to the employee under an award, if the employment is on a casual basis.

In relation to the abolition of the ROC, employers need to be aware that the FWC will likely not have the same resources that the ROC did to deal with disputes relating to Unions and Registered Organisations. This could mean that such organisations are not held to as much scrutiny as they were previously, which in turn could affect the operation of some businesses.

When do I need to take action?

Action needs to be taken immediately to:

• assess and confirm that jobs currently advertised are complaint, and
• implement processes to ensure that any new jobs that are advertised, are compliant.

To do this, employers need to understand their workplace obligations, including employee’s minimum rates of pay under the Act, relevant award or enterprise agreement, and any additional entitlements that may affect their pay rate.

Commencement dates

Podcast: Secure jobs, better pay

Join Clayton Utz Partner Shae McCartney in conversation with a panel of remarkable Labour Law experts to discuss the Secure Jobs, Better Pay Act and its implications. In this interview, we go beyond the surface noise to find out what you need to know and what does this mean for your business.