How will the Secure Jobs, Better Pay Bill affect your workplace?

The Federal Government’s Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (the Bill) was introduced to the House of Representatives on 27 October 2022.

In its second reading, the Minister for Employment and Workplace Relations, The Hon Tony Burke MP, noted that the Bill was being introduced to address issues in the labour market including the gender wage gap, poor job security and low wage growth.

The Bill contains proposed changes to a wide variety of provisions of the Fair Work Act 2009 (Cth) (FW Act), a number of which are summarised below.

Equal remuneration

The Bill introduces several mechanisms in an attempt to improve gender wage disparities, including:

• requiring the Fair Work Commission (FWC) to consider whether work in the relevant industries has historically been undervalued because of assumptions based on gender while assessing minimum wages under awards;
• removing the requirement for employees to identify a male comparator when making an application for an equal remuneration order, given that it can be difficult to identify an appropriate male comparator in certain industries; and
• establishing a specialist panel on pay equity.

Pay secrecy

Pay secrecy clauses in employment contracts will be expressly prohibited and penalties will be introduced for employers entering into contracts which contain a prohibited pay secrecy term.

Sexual harassment

The Bill includes a number of key changes to strengthen existing sexual harassment and sex discrimination legislation. Those changes include:

• prohibiting sexual harassment in connection with work; and
• the introduction of an application, based on the FW Act’s general protections provisions, to deal with sexual harassment disputes, which can include stop sexual harassment orders and orders to remedy past harm.

Flexible working conditions

The Bill proposes that employees be entitled to request flexible working arrangements when they, or a member of their immediate family or household, experience domestic violence.

Greater obligations will also be placed on employers when they consider requests for flexible working arrangements. Employers will be required to provide detailed reasons when they refuse a request for flexible working arrangements, set out other changes they are willing to make to accommodate the request, and provide information on the new dispute resolution procedures (under which the parties will be required to try to resolve the dispute before it is referred to the FWC who will be able to deal with the dispute through arbitration).

Fixed term contracts

One of the most significant changes in the Bill is the imposition of a limit on the employer’s ability to use fixed term contracts, to resolve issues of ‘insecure work’ when employees are subject to repeated contract renewals for roles that are otherwise ongoing in nature.

The Bill introduces a civil penalty where employers enter into a fixed term contract with an employee for a period of longer than two years, or where the contract could either be extended or renewed for a period that, in total across all contracts, exceeds two years, where the employee is expected to perform the same, or substantially similar, work. Further, the end date of any fixed term contract which contravenes this provision will be deemed to be invalid (but the rest of the contract will otherwise continue to apply).

However, fixed-term contracts will continue to be permitted in certain circumstances, including where:

• the employee has specialised skills that the employer needs to complete a specific task;
• the role is directly financed by government funding;
• the employer is permitted to enter into a fixed-term contract by a term specified in an applicable modern award; or
• the employee is casual.

Enterprise agreements

The Bill proposes a raft of changes to the enterprise bargaining process, as well as to the process by which enterprise agreements are to be approved and terminated.

Those changes include:

• upon application, requiring the FWC to terminate an enterprise agreement after its nominal expiry date has passed if it is satisfied that its continued operation is unfair on the employees or if it does not, and is not likely to, cover any employees;
• limiting the circumstances in which a party to an enterprise agreement can apply to unilaterally terminate an enterprise agreement;
• sunsetting ‘zombie agreements’ such as remaining agreement based transitional instruments;
• simplifying the currently prescriptive and complex requirements to be met for an enterprise agreement to be approved, with an intent to encourage enterprise bargaining and reduce the number of enterprise agreements which are refused due to minor procedural deficiencies. A broad requirement that the FWC be satisfied that an enterprise agreement has been ‘genuinely agreed’ by the employees will be introduced in place of some of the existing requirements;
• allowing employees, via a bargaining representative, to initiate bargaining by making a written request to the employer in certain circumstances;
• making the Better Off Overall Test (BOOT) which is applied when the FWC determines whether to approve an enterprise agreement simpler and more flexible;
• allowing the FWC to directly amend or remove terms from an enterprise agreement that do not otherwise meet the BOOT, reducing the need for employers to enter into undertakings;
• introducing a new process by which the FWC can assist parties to resolve disputes arising in bargaining; and
• providing support to bargaining in industries where bargaining at an enterprise level is difficult (e.g. community services, cleaning and early childhood education).

Other changes

Other changes proposed under the Bill include:

• an increase of the monetary cap on ‘small claims proceedings’ from $20,000 to $100,000 to enable more employees to benefit from its simpler and cheaper dispute resolution processes;
• the abolition of the Australian Building and Construction Commission and the Registered Organisations Commission (with their duties to be undertaken by the Fair Work Ombudsman and the FWC); and
• a prohibition on advertising a job for less than the applicable minimum rate.

Take Home Messages

While the Bill has not yet been passed, the proposed changes are clearly wide reaching and are likely to affect all employers in the Commonwealth jurisdiction in some way. Further workplace relations reform is also likely in the future, with a second tranche of changes expected in the New Year.

Norman Waterhouse will keep you updated with any changes to workplace relations legislation and can assist with any queries you may have about the applicability of these new provisions to your workplace.

For more specific information on any of the material contained in this article please contact Lincoln Smith on + 61 8 8210 1203 or lsmith@normans.com.au, Anastasia Gravas on + 61 8 8210 1331 or agravas@normans.com.au, or Annabelle Narayan on +61 8 8210 1292 or anarayan@normans.com.au.