Labor's Industrial Relations Reforms - how will they impact you?

The Act came into force on the 6th of December last year and a brief summary of the key sections, together with their various commencement dates are highlighted below.

To access additional information and commentary, click here to access a copy of the presentation or click here to see a recording of the presentation. For ease of use, the recording has been sectioned by topic, allowing you to easily navigate between the topics as they appear below.

New objectives in Fair Work legislation and Modern Awards

Fair Work Commission (FWC) is required to take the below into account when performing its functions including when varying Modern Awards and reviewing and setting minimum wages:

• The need to improve access to secure work across the economy; and
• The need to achieve gender equality in the workplace by ensuring equal remuneration for work of equal or comparable value, eliminating gender–based undervaluation of work and providing workplace conditions that facilitate women’s full economic participation.

Prohibiting pay secrecy clauses (effective from 7 December 2022, civil penalty applies after 7 June 2023)

New Workplace right for employees to disclose or not disclose remuneration and ask any other employee (whether with same employer or not) about their remuneration and any other terms and conditions reasonably necessary to determine remuneration outcomes e.g.s. pay increases, bonus etc.

Whilst employees have the right to ask, that does not require an employer to disclose remuneration of other employees which the employer will be expected to treat as confidential.

Prohibition from sexual harassment (commences 6 March 2023)

New FWC sexual harassment stop orders are already in place and were introduced by the Morrison Government. From 6 March 2023 there will also be imposed:

• Pecuniary penalty provisions for sexual harassment;
• Vicarious liability for employers.

The FWC will not have power to award compensation but applicants will have two years to bring claims.

Enforceable right to request flexible work arrangements and extend unpaid parental leave for a further 12 months (commences 6 June 2023)

The right to request Flexible Work Arrangements (FWA) has been extended to include employees who are pregnant as well as situations where an employee, or a member of their immediate family or household, experience family and domestic violence.

Employer must still respond in writing within 21 days but must have first discussed and consulted with employee prior to refusal and genuinely tried to reach agreement.

Employee has a new right of appeal to FWC which must attempt to resolve the dispute primarily by conciliation unless there are exceptional circumstances in which case arbitration will apply.

Request to extend unpaid parental leave for a further 12 months can be refused on reasonable business grounds and the following additional guidance is now provided:

• The extension of the period of unpaid parental leave request would be too costly;
• There is no capacity to change the working arrangements of other employees to accommodate the extension of unpaid parental leave requested;
• It would be impracticable to change the working arrangements of other employees, or recruit new employees to accommodate the extension requested;
• The extension of the period of unpaid parental leave requested would likely result in a significant loss and efficiency or productivity;
• The extension requested would be likely to add a significant impact on customer services.

Specific circumstances of the business including its size and nature are relevant to whether the employer has “reasonable business grounds” to refuse a request.

Limiting the use of fixed term contracts (commences 6 December 2023)

Does not apply to existing contracts but an existing contract is counted as a consecutive contract.

Limits the use of fixed term contracts (or maximum term contracts which are more common) for the same role beyond two years or two consecutive contracts, whichever is the shorter, including renewals.

Multi-Employer Bargaining (commences from 6 June 2023)

Utilises, renames and expands the existing enterprise bargaining streams to create a new emphasis on multi-employer bargaining away from single-enterprise bargaining through:

• Single Interest Employer Authorisations (SIEA);
• Supported Bargaining which replaces the low paid bargaining stream; and
• Cooperative Workplaces Bargaining Stream which replaces the current multi-enterprise agreement stream on a voluntary basis.

Single-enterprise Agreements

New initiation process for existing enterprise agreements with an expired nominal expiry date.

A bargaining representative (i.e. union) can invoke bargaining for a new agreement by giving an employer a written request to commence bargaining for a new agreement if:

• The proposed agreement will replace an earlier single-enterprise agreement that has passed its nominal expiry date;
• No more than five years has expired since the nominal expiry date; and
• The proposed agreement will cover the same, or substantially the same group of employees as the earlier agreement; and
• A SIEA did not previously operate in relation to the making of the earlier agreement.

Single Interest Employer Authorisation

Union or other employer can apply to the FWC to require the employer to bargain with other employers on a multi-employer or single interest basis.
FWC must grant the order if:

• The employers have “clearly identifiable common interests” which may include the nature of their enterprises and terms and conditions of employment in those enterprises, their geographical location, and where they are subject to a common regulatory regime;
• The operations and business activities of the common interest employers are “reasonably comparable”;
• It is not contrary to the public interest for the common interest employers to bargain together; taking into account the broader economic ramifications of including a new employer in a single interest employer authorisation or agreement;
• Employers and unions have had an opportunity to express their views to the FWC on whether the bargaining in the stream should be authorised; and
• At least some of the employees are represented by a union.

Changes to role of Fair Work Commission in Bargaining Disputes (commences 6 June 2023)

FWC will be empowered to resolve bargaining disputes that have gone on for a minimum period of nine months or at least nine months has elapsed since the nominal expiry date of the previous enterprise agreement.

FWC can make an intractable disputes declaration and arbitrate unresolved matters after the expiration of a post declaration negotiation period for a specified time.

Changes to Enterprise Agreement Making Process (commences 6 June 2023)

Removal of some of the more prescriptive pre-approval requirements for enterprise agreements to be replaced by a single broad requirement that the FWC be satisfied that the agreement has been genuinely agreed – watch this space!

For proposed multi-employer single interest enterprise agreements the employer must obtain written agreement from each bargaining representative for the agreement prior to putting to the vote.

Changes to Enterprise Agreement Approval Process (commences 6 June 2023)

Clarify that the Better Off Overall Test (BOOT) is a global assessment to ensure each employee is better off overall, and is not a line by line comparison between the proposed agreement and the relevant modern award.

Require the FWC to consider only existing patterns or kinds of work, or types of employment that are reasonably foreseeable, rather than hypothetical possibilities as currently happens.

However, the agreement can be reassessed against the BOOT after it has been approved if relevant circumstances were not properly considered upon approval and for the agreement to be amended including with retrospective effect.

FWC can also will make amend agreement (including with retrospective effect) where it is necessary to comply with BOOT.

Zombie Agreements entered into pre-2009 but still in use

Must now expire on 6 December 2023 and employers must give six months notice to all affected employees.

If no new agreement is entered into by that date, then award conditions will apply to employees.

Furthermore, the termination of other enterprise agreements which have expired on their normal expiry date are now subject to much more stringent requirements with contested applications to be determined by a Full Bench of the FWC and expressly requiring consideration of whether the application is related to bargaining of a new agreement.

Recommendation

We recommend that all employers review their current employment strategy and policies.

Should you wish to further discuss any aspect of this, please contact Workplace Relations Special Counsel Tim Greenall.