The Labor Government has managed to strike a deal with Senator Pocock which will lead to its Secure Jobs, Better Pay Bill (the Bill), which provides amendments to the Fair Work Act, being passed by the Parliament.
Labor indicated what its’ industrial plans were in the lead up to the election which we discussed in our previous alert in May 2022 (and can be viewed here).
The Bill was introduced to Parliament on Thursday 27 October 2022, with its main focus to bring forth a range of changes to workplace relations laws relating to bargaining, job security, gender equity, compliance and enforcement. It also proposes amendments to workplace conditions and protections, and other workplace relations institutions. The main focus of the Bill is twofold – to ensure better ‘security’ of employment and to increase wages.
How will the Bill practically affect our SME clients?
Multi-employer workplace bargaining
Multi-employer bargaining will allow employees across different businesses who have identifiable common interests (in the same industry/geographical region/regulatory regime) to collectively bargain for their workplace rights and negotiate enterprise agreements (EAs). Traditionally, EAs have operated between employees and their employer, not multiple employers. Government funded industries such as child care, aged care and disability care are likely to be the first to utilise the new rights, but other industries are not excluded. In all likelihood, it will be unions negotiating on behalf of employees across a number of workplaces with the owners of the various businesses.
Employers can never be forced to agree to an EA. However, if employees want to bargain, employers must participate in bargaining in good faith, otherwise employees can go to Fair Work who can make orders to force a business to bargain.
There is a potential for large scale striking while bargaining is underway. While this already happens in a number of industries, this can be expected to increase with these amendments.
In order for a business to be ‘caught up’ in the bargaining, the majority of employees of each employer to be covered must want to bargain for the agreement and the business must have more than 20 employees.
Businesses whose employees are covered under the Building and Construction General On-site Award 2020 are not affected by the reforms.
Unions must provide evidence that a business should be covered by a multi-employer EA if the business has less than 50 employees.
The Liberal government maintains its opposition to the changes, arguing that businesses could be forced into EAs which are unsuitable to their particular workplace. We will know more as the law comes into effect but businesses need to be made aware that their employees now have these rights and may wish to start exercising them.
The Bill is not just about multi-employer bargaining, even though that topic has received the most press coverage. Other important aspects of the Bill which will affect our SME clients are as follows:
- Pay secrecy clauses will be illegal and businesses can be penalised for including them in employment contracts. Employees will have a workplace right to disclose their own or enquire about another employee’s pay. Therefore, employers will be unable to prohibit their employees from discussing their pay with other employees.
- Prohibition of sexual harassment in connection with work. The insertion of Part 3-5A means principals (individual owners) may be vicariously liable for the acts of their employees or agents.
- Extension of anti-discrimination rules to encompass:
- Breastfeeding; and
- Gender identity or intersex status.
- The use of fixed term contracts will be significantly curtailed. The availability of fixed term contracts will be dealt with under the Award. In addition, they will be prohibited if the fixed period extends beyond two years or if it allows the contract to be renewed so that the employee is employed for more than 2 years (unless the modern award allows for this). There are some limited exceptions to the prohibition including:
- If a training arrangement applies;
- If the employee earns over the high income threshold;
- If the contract relates to the performance of work funded by a government contract where the funding is payable for a period of more than 2 years and there are no reasonable prospects that the funding will be renewed after the end of that period.
What Can our SME clients do?
There are a number of actions which SMEs can take now, including:
- Some businesses may get on the front foot and negotiate their own EAs. However, if the business or industry is specified by Fair Work in a supported bargaining authorisation, then it must have a supported bargaining agreement and cannot have its own negotiated agreement.
- Review and update employment contract templates, especially around pay secrecy clauses.
- Review fixed term contract use if they are used in the business.
- Check BOOT calculations to ensure that employees are receiving entitlements consistent with or better off than the Award, and that any remuneration which seeks to incorporate Award benefits and roll into a higher hourly rate, is properly
The Employment team at Osborn Law can assist with advice concerning the new amendments, updating employment contracts, award interpretation and BOOT calculations and also any enquiries regarding workplace bargaining and enterprise agreements.
If you wish to discuss any of the above or have questions relevant to your specific workplace please contact our team on (02) 4927 2900.