The Secure Jobs, Better Pay and Respect@Work Bills Pass Parliament: What This Means for Employers and Employees

The passing of these Bills brings about the most significant reform in the industrial relations and employment law space since the introduction of the Fair Work Act in 2009 (FW Act). In this Insight, we outline the key changes under these Bills and what these changes mean for employers and employees.

1. Secure Jobs, Better Pay

1.1 Prohibiting Pay Secrecy Clauses

The FW Act will be amended to grant employees an express workplace right to disclose (or not disclose) their remuneration and the relevant terms and conditions of their employment to others. Pay secrecy clauses will also be rendered invalid and unenforceable, with any attempt by an employer to enforce such clauses likely to place the employer in breach of the general protections regime under the FW Act.

1.2 Prohibition of Sexual Harassment in Connection with Work

Adopting a recommendation in the Respect@Work Report, the FW Act will be amended to include an express provision prohibiting sexual harassment of workers, prospective workers, employers as well as third parties, such as customers or clients. The Fair Work Commission will be able to deal with sexual harassment disputes by making a “stop sexual harassment order” or by mediation and conciliation. If the dispute remains unresolved, the parties can agree to the FWC arbitrating the dispute or make an application to a Federal Court.

Employers may be held vicariously liable for any sexual harassment perpetrated by their employee or agent if they failed to take reasonable steps to prevent the relevant sexual harassment, with the maximum penalty being $66,600 for a body corporate and $13,320 for an individual. In light of this and the positive duty imposed on employers to prevent sexual harassment under the Respect@Work Act, which we discuss below, employers should review their existing policies and training initiatives to mitigate and eliminate sexual harassment in the workplace.

1.3 Limiting Set Term Contracts

The FW Act will be amended to prohibit employers from entering into fixed-term or maximum-term agreements with their employees in circumstances where:

(a) the duration of the agreement exceeds two years;

(b) the contract could be extended or renewed for a period that, in total across all contracts, exceeds two years; or

(c) the contract could be extended or renewed more than once.

There are some exceptions, including where the employer needs additional workers to do essential work during a peak period (such as for fruit picking or other seasonal work) or where the employer needs to replace a permanent employee who is absent for personal or other reasons (e.g., for parental leave or long service leave). Employers will also be required to provide employees engaged on a set term contract with a new Fixed Term Contract Information Statement, to be published by the Fair Work Ombudsman.

1.4 Expanding the Eligibility for Flexible Working Arrangements

The circumstances in which an employee may request flexible working arrangements under the FW Act will be expanded to include where the employee, or member of their immediate family or household, experiences family or domestic violence.

The procedures employers must follow when responding to requests for flexible working arrangements will also be amended to align with the procedures set out under the modern awards. Namely, employers will be required to discuss the request with the employee and must genuinely attempt to reach an agreement before refusing the employee’s request on reasonable business grounds.

Further, where an employee believes that the employer has unreasonably refused a request, the employee may, after attempting to resolve the dispute at the workplace level, make an application to the Fair Work Commission to deal with the dispute.

1.5 Expansion of Protected Attributes

The list of protected attributes under the FW Act will be amended to include breastfeeding, gender identity and intersex status.

1.6 Enterprise Agreements

There will be a number of significant changes to the enterprise bargaining process in Australia. Some of these changes include:

(a) Simplifying the ‘Better Off Overall Test’ (BOOT), by:

(i) applying the BOOT as a global assessment (i.e., instead of a direct comparison between the relevant modern award and the proposed enterprise agreement);

(ii) requiring the FWC to only consider patterns of work, or types of employment, that are reasonably foreseeable at the test time;

(iii) enabling the FWC to directly amend a term in an EA where necessary to meet the BOOT; and

(iv) enabling the BOOT to be reassessed in limited circumstances (e.g., where there has been a material change in the working environment).

(b) Restricting the FWC’s power to terminate EAs to circumstances where the FWC is satisfied that the continued operation of the EA would be unfair for the employees, or that the EA does not, and is not likely to, cover any employees, or where all of the following apply:

(i) the continued operation of the EA would pose a significant threat to the viability of the employer’s business;

(ii) the termination of the EA would likely reduce the potential of terminations of employment; and

(iii) the employer has given the FWC a ‘guarantee of termination entitlements’ if it makes an employee redundant or if the employer becomes insolvent or bankrupt.

(c) Terminating “zombie agreements”, being agreement-related instruments made prior to the FW Act and during the bridging period between 1 July 2009 and 31 December 2009, in 12 months’ time unless the agreement is extended following an application to the FWC.

(d) Changing the EA bargaining process, as follows:

(i) Initiating Bargaining: A single interest employee will be able to initiate the bargaining process for an EA by making a written request to the employer, rather than waiting for the employer to determine when bargaining will commence.

(ii) Approving EAs: In order for the FWC to approve an EA, there will need to be a genuine agreement between the employer and employees. This will require the FWC to be satisfied that the employees requested to vote on the EA have a sufficient interest in its terms and are sufficiently represented.

(iii) Bargaining Disputes: The FWC will now be empowered to arbitrate bargaining disputes if it is satisfied that there is no reasonable prospect of the bargaining parties reaching agreement.

(iv) Changes to ‘Single Interest Employer’: Single interest employer authorisations under the FW Act will be simplified, with the ‘supported bargaining’ stream replacing the previous ‘low-paid bargaining stream’ in the FW Act, intended to assist employees and employers who may have difficulty bargaining at the single-enterprise level.

(v) Multiple-Employer Agreements: The FWC has discretion to ‘rope in’ employers into single interest EAs if the employers share clearly identifiable common interests and are reasonably comparable. Employees will be able to participate in protected industrial action to support multi-enterprise agreements.

2. Respect@Work

2.1 Positive Duty to Eliminate Sexual Discrimination

As noted in our earlier Insight on the Respect@Work Bill, the most significant change is the imposition of a “positive duty” on employers under the Sex Discrimination Act 1984 (Cth) to take reasonable and proportionate measures to eliminate sexual discrimination, sexual harassment, and victimisation, as far as is possible. The “reasonable and proportionate” measures employers must take depends on the size, nature and circumstances of the employer’s business, the employer’s resources, and the practicality and cost associated with the relevant measures.

Further, in 12 months’ time, the Australian Human Rights Commission will be given several powers to monitor and assess employers’ compliance with this positive duty, including the power to initiate inquiries if it reasonably suspects that a person is not complying with the positive duty, provide recommendations to achieve compliance, issue compliance notices and apply to the Federal Court for orders enforcing a compliance notice.

In addition, the AHRC will be empowered with a broad inquiry function, to inquire into systematic unlawful discrimination or suspected unlawful discrimination within an individual business or within a broader industry or sector.

2.2 Hostile Workplace Environments

The Sex Discrimination Act 1984 (Cth) will be amended to include an express prohibition on conduct that subjects another person to a workplace environment that is hostile on the grounds of sex. The circumstances to be considered in determining whether the conduct subjects a person to a hostile workplace environment include the seriousness of the conduct, whether the conduct was continuous or repetitive, and the role, influence or authority of the person engaging in the conduct.

If you have any questions about the changes and what they mean for you or your business, contact Addisons’ employment team.