New Government, new IR laws – Albanese Government introduces first Bill for significant IR reform

The ALP federal government has released its much anticipated first tranche of industrial relations reform.

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 proposes to overhaul the Fair Work Act 2009 (Cth) (FW Act), abolish the Registered Organisations Commission and put the final nail in the coffin of the Australian Building and Construction Commission, with the Fair Work Ombudsman to take over compliance and enforcement in the construction sector.

We plan to publish a series of blogs looking at some of the key proposed changes to the FW Act in some detail. For now, we set out a brief summary.

SEXUAL HARASSMENT

The Bill would introduce new provisions into the FW Act prohibiting sexual harassment of (as defined in safety laws) a worker, prospective worker or PCBU. Employers would be vicariously liable for their employees’ or agents’ contraventions, unless they have taken all reasonable steps to prevent the acts. This would dovetail with existing anti-discrimination and safety laws.

The Fair Work Commission (FWC) would have power to make ‘stop sexual harassment orders’, on application made within 24 months of the last alleged contravention.  Similar to the FWC’s ‘stop workplace bullying’ jurisdiction, the FWC would need to be satisfied that sexual harassment would continue without an order.

Mirroring existing general protections processes, the FWC could deal with a sexual harassment dispute in other ways, including by arbitration with the consent of the parties which could lead to compensation orders, or the FWC could issue a certificate allowing the dispute to go to court.

INCREASING FLEXIBLE WORK REQUEST PROTECTIONS

The Bill would build on employees’ existing right to request flexible working arrangements (for example, to help manage certain carer responsibilities or a disability, or to help deal with family or domestic violence). Critically, if an employer does not approve a request in writing in 21 days, or rejects the request, the matter can be referred to the FWC for resolution, including by arbitration.

LIMITING USE OF FIXED/MAXIMUM TERM CONTRACTS

The Bill would limit the use of fixed or maximum term engagements.  It would:

• require employers to issue a new ‘Fixed Term Contract Information Statement’ to employees engaged for a fixed or maximum term;
• prohibit fixed term or maximum term contracts for a total of more than two years (including under rolling contracts or extension/s) and a right to renew the contract more than once; and
• render ineffective any contract that breached these prohibitions (subject to exceptions eg if an applicable modern award expressly permits a particular provision).

Civil penalties would be available for breach.

ENTERPRISE AGREEMENTS (EAs)

One of several changes to bargaining options would be to replace multi-enterprise agreements with ‘cooperative workplace agreements’ (CWAs).  Harking back to roping-in applications of yesteryear, one or more employers could become covered by a CWA that is already in operation, but protected industrial action would not be available in support of a CWA.

The better off overall test (BOOT) has been criticised for being too complex and generally acting as a barrier for the approval of enterprise agreements (EAs).  The Bill proposes to deal with this by:

• giving the FWC the right to amend a proposed EA to address a BOOT issue before approving it (unconstrained by any need to seek the agreement, or even the views, of the parties covered by the EA or to avoid making a substantial change to what they agreed);
• clarifying that the BOOT requires a global assessment of whether each employee is better or worse off compared to the modern award, having regard to patterns or kinds of work that are reasonably foreseeable at the test time; and
• imposing a requirement on the FWC to give primary consideration to a common view held by parties covered by a proposed EA, about whether it passes the BOOT.

A party to an existing EA could ask the FWC to reconsider whether the EA still meets the BOOT, after the EA commences operation.  If the FWC is concerned that there is a BOOT issue, it may be resolved by the employer giving undertakings or exercising its new power to amend the EA.

The Bill would also change certain procedural steps to gain employee approval of a single EA.  It removes both an employer’s obligation to give employees certain information about the proposed EA and the vote before/during the ‘access period’, and the test of when employees have ‘genuinely agreed’ to approve a proposed EA, and replaces these with a need to convince the FWC that the voting employees:

• have a sufficient interest in the terms of the proposed EA; and
• are sufficiently representative of the employees who the EA is expressed to cover.

Employee organisations (unions) would be able to initiate bargaining for a new single EA by giving an employer a written request to bargain, on behalf of employees the organisation is entitled to represent.  The employer would then be forced to commence bargaining if the current EA is no more than 5 years past its nominal expiry date, has not been replaced and covers the same or substantially the same group of employees as the proposed EA.  If bargaining for a new EA has reached an impasse (after certain pre-conditions are met), the FWC would be able to make an ‘intractable bargaining workplace determination’ – which is essentially a replacement for the FWC’s current jurisdiction to make a bargaining related workplace determination.  

Terminating enterprise agreements: an employer, employee or union presently has a right to ask the FWC for an order terminating an enterprise agreement after it has passed its nominal expiry date.  The Bill would make that harder. In some circumstances, the FWC might require an employer to give a ‘guarantee of termination entitlements’ to employees covered by a terminating enterprise agreement, effectively ‘grandfathering’ EA termination entitlements.

Undead ‘zombie agreements’ entered into before the FW Act commenced in 2009 / 2010 would officially cease to have effect generally 12 months after the Bill commences operation.

PROMOTING EQUAL PAY

The Bill would prohibit pay secrecy clauses in employment contracts, with civil penalties available for breach, and protect the right of employees to share pay information with other employees (including of other employers), including what they are paid, and how their pay is calculated.  It would also bolster the FWC’s powers to make equal remuneration orders if the FWC Expert Panel considers that work is undervalued, giving the FWC power, for the first time, to make an order without any party applying for it.

NEXT STEPS

These proposed changes are still in their infancy.  Thomson Geer will work closely with our clients to assist you to understand what the changes mean and recommend practical compliance steps as any changes are approved by parliament and introduced as law.

Please contact a member of our Employment & Safety team for further information.

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