The Secure Jobs, Better Pay Bill (‘the Bill’) was passed by both houses of Federal Parliament on 2 December 2022. This represents the most extensive legislative reform for employers since the introduction of the Fair Work Act in 2009.
(Secure Jobs, Better Pay) Bill 2022 – What Does it Mean for Employers?
This article is the first part in our series on the Secure Jobs, Better Pay Bill 2022 (‘the Bill’) and focuses on what the changes mean for employers.
Our review of the changes on workplace laws following the Bill have been covered in a series of 3 articles:
- Article 1: What Does it mean for Employers?
- Article 2: Amendments to the building and construction industry
- Article 3: Bargaining and Enterprise Agreements
This article will focus on the main amendments for all employers which includes the implementation and use of fixed term contracts, changes to equal pay, changes to sexual harassment laws, flexible working arrangements and small claims jurisdiction.
Fixed Term Contracts
Employers are now limited to use fixed-term contracts for the same role (or substantially similar works) to two (2) consecutive contracts or a maximum period of two (2) years.
The exceptions to this maximum fixed-term contract occur if;
- the employee is engaged under the contract to perform a specific task involving a specialised skill,
- the employee is engaged relating to a training arrangement,
- the employee is performing essential work during a peak demand period,
- the contract is to cover an employee in emergency situations or a temporary absence,
- the contract is above the high income threshold,
- the position will be funded by the government for more than 2 years but there are no reasonable prospects of being renewed, or
- the contract relates to a governance position.
Employers that use fixed term contracts will need to evaluate the continuity of employees who are employed on this basis, the expiry date of the contracts and the steps to take when approaching the expiry of the second contract. If the contract is before The Fair Work Commission, they will convert a prohibited fixed term contract into a permanent employment contract. If you use short-time employment contracts, you may renew the contract only once before you will be required to transition the employee to permanent employment.
The change to legislation related to fixed-term contracts will take place on 6 December 2023, with contracts entered into on or after that date being subject to the new legislation. Contracts entered into prior to this date will be used for determining whether the parties subsequently enter a prohibitive fixed-term contract.
Employers that use fixed term contracts should consider the implications for conversion of their employees to permanent contracts noting that termination of these employees may require redundancies in the case of business downturn.
Key Takeaway: Employers that use fixed term contracts should be aware when employees are approaching the point of the contract rolling into permanent employment upon which termination of the contract will likely trigger redundancy payments. It is also worth noting that the Bill does not allow for employers to terminate the employee and soon after re-hire them in a substantially similar role or alternatively replace them to avoid triggering the permanent employment contract.
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Changes to Equal Pay
One of the most significant changes that affects all employers is that pay secrecy provisions have now been removed. Employees will now have a workplace right to discuss their renumeration or any terms and conditions of their employment that are reasonably necessary to determine remuneration outcomes. The main implication of this change is that terminating a permanent employee who discusses their renumeration will likely lead to a general protections application.
Any contracts of employment that have terms drafted which require confidentiality around renumeration will no longer have effect and future employment contracts which are executed inconsistent with the new workplace right will contravene the Fair Work Act. The maximum penalty for a contravention of the Fair Work Act is $66,600 (or $666,000 for a serious contravention) by a corporation.
On 8 December 2022 the pay secrecy provisions were ratified.
Key Takeaway: It is vitally important that all employers consider their current and future employment contracts because provisions which require confidentiality will now be removed from the contract itself (which could create some further concerns if there is no severability clause). Employers should also prepare for potential questions from employees if there are discrepancies in renumeration between employees of similar experience.
Sexual Harassment
All workers, prospective workers, customers or clients (irrespective whether they are employees, contractors, subcontractors, students, trainees and volunteers) have protection from workplace harassment.
Previously, employees that allege sexual harassment would ordinarily go through the Australian Human Rights Commission to make a complaint. This course of action is still available to employees, however the Fair Work Commission now has the ability to hear complaints involving sexual harassment. The amendment will mean that these claims will be resolved in a more efficient manner and ensure that employers will need to conduct their investigations quickly to respond to the claim as the Fair Work Commission will request a response to the application within seven (7) days and set the matter down for a Conciliation.
A person that alleges they have been sexually harassed in connection with their work, may apply to the Fair Work Commission to:
- Make a “stop sexual harassment order” under the existing provisions of the Fair Work Act; or
- Deal with the dispute in the same manner as general protections dismissal disputes under the Fair Work Act. The process will involve the applicant bringing the claim to the Fair Work Commission where a Conciliation or mediation will take place with the Commission to give the parties an opportunity to resolve the dispute. If the dispute cannot be resolved, the parties can either consent to the Fair Work Commission arbitrating the dispute or a certificate will be issued so the complainant can bring proceedings in the Federal Court.
At this stage, it is not clear on the damages that will be awarded by Courts for claims of harassment brought under the Fair Work Act so this will be an interesting space to watch as the claims are ultimately brought in the coming months.
The Bill also makes the following amendments to the Fair Work Act:
- A vicarious liability provision, modelled on the existing provision in the Sex Discrimination Act 1984 (Cth) making the person or organisation liable for the actions of their employee or agent;
- Individuals may now bring joint applications against one or more perpetrators which will allow industrial associations to represent multiple individuals simultaneously; and
- The time limit to bring a claim for a sexual harassment dispute is 24 months from the last contravention.
The changes to the sexual harassment legislation commence on 6 March 2023.
Key Takeaway: It is important that as an employer, prior to the amendments you:
- - Draft or amend your relevant policies to ensure consistency with the amendments;
- - Implement targeted and effective anti-discrimination and harassment training to ensure that all staff are aware of the new changes and ensure a culture that minimises risk of harassment;
- - Monitor and observe the workplace culture and environment.
Flexible Work
Employees can now formally make requests for flexible work arrangements and employers have an obligation to engage in a consultation. If an agreement cannot be reached, an employee may apply to the Fair Work Commission to resolve the dispute.
Key Takeaway: Employers must adequately consider any request for a flexible work arrangement from an employee. Employees can take the dispute to the Fair Work Commission for resolution if an agreement is not reached informally.
Small Claims
The monetary cap for claims brought in the Small Claim Division of courts for matters under the Fair Work Act has been increased to $100,000.
Changes to this procedure will commence on 1 July 2023.
Key Takeaway: The relevance of the increase for the jurisdictional limit is that in the Small Claims Division, parties require leave of the court to obtain legal representation, the rules of evidence do not apply and the costs associated with the claim cannot be claimed. We expect to see more employees bringing claims under the Fair Work Act, as the process is much easier to navigate.
Conclusion
The Bill has other significant changes affecting the building and construction industry and enterprise bargaining and agreements which are covered in articles 2 and 3 on our website.
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The information in this article is not legal advice and is intended to provide commentary and general information only. It should not be relied upon or used as a definitive or complete statement of the relevant law. You should obtain formal legal advice specific to your particular circumstance. Liability limited by a scheme approved under Professional Standards Legislation.
