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Labor Government makes wide sweeping changes to industrial relations landscape

28 October 2022

The Federal Government's Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (the Bill) was introduced to Parliament yesterday, 27 October 2022. 

The Bill, which can be accessed here, would amend the Fair Work Act 2009 (FW Act), and related legislation, aiming to stimulate wage growth, boost job security, tackle gender inequality and modernise the workplace bargaining system.

The Bill if passed would see significant changes across a range of matters relevant to the Australian industrial relations landscape:

Objects of the FW Act

The objects of the FW Act would be amended to introduce the promotion of job security and gender equality in the object section of the Act. This is particularly relevant as the Fair Work Commission (FWC) must take into account the object/s of the FW Act when exercising its powers.

Prohibiting sexual harassment in connection with work

Part 8 would insert a new prohibition on sexual harassment in connection with work into the FW Act. This would apply to protect workers, prospective workers and persons conducting businesses or undertakings. Importantly, this amendment would, in some circumstances, deem Principals to be vicariously liable for acts of their employees or agents. Further, this amendment would also create a new dispute resolution function for the FWC, which is modelled on the existing dispute resolution mechanism for general protections dismissal claims.

Part 8 would allow flexibility for applications to be made jointly by one or more aggrieved persons against one or more perpetrators or Principals. The intention behind this amendment is to provide the FWC with the ability and flexibility to deal with multiple parties and circumstances in situations where there is a common perpetrator or Principal, or where the sexual harassment has occurred in the same business or undertaking. It is also noted that an industrial association would be permitted to represent an aggrieved person or persons in such a circumstance.

A reference to an employee and employer in Part 8 would have their ordinary meaning, which means that employee and employer references in the vicarious liability provision are not only a reference to national system employers and employees. Consequently, government workers are captured in this amendment.

The prohibition contained in Part 8 also extends to sexual harassment perpetrated by third parties, such as customers or clients. Similarly, sexual harassment of third parties by a worker is also prohibited.

Vicarious liability

The amendments would make a Principal vicariously liable for any sexual harassment perpetrated by the Principal's employee or agent, in contravention of the relevant provisions of the Act, if the contravention occurred in connection with the employment of the employee. This amendment ensures that the aggrieved has access to a remedy from the Principal in addition to, or instead of, the perpetrator themselves.

However, a Principal would not be vicariously liable if they can prove that they took all reasonable steps to prevent their employee or agent from contravening the prohibition. On the contrary, a Principal who fails to prove that they took all reasonable steps to prevent the contravention would also face the risk of enforcement action.

Dealing with sexual harassment disputes

Applications could be made by a person who alleges they were sexually harassed in connection with work by a person or persons. Applications may also be made by an industrial association entitled to represent the interests of the aggrieved. Such an application would be called a "sexual harassment FWC application", and would give the FWC the power to make a stop sexual harassment order, or otherwise deal with the dispute.

Prohibiting pay secrecy

Part 7 would insert a new provision in the FW Act that gives employees the positive right to disclose (or not) information about their remuneration package, including relevant terms and conditions of their employment, to any other person. This also includes the right to ask another employee about the details of their remuneration package, however, does not compel an employee to make such disclosures. Importantly, an employee is able to use this information to assess the fairness and comparability of their own remuneration to that of other employees in the same workplace or industry.

The amendment provides that any past employment contracts (prior to the introduction of the amendments) that contain a pay secrecy clause would be inconsistent with the FW Act and therefore void.

The amendment would expressly prohibit employers from including any pay secrecy clauses in new employment contracts and other written agreements. A contravention of this prohibition would allow an employee, prospective employee, employee organisation or an inspector to bring an action for an alleged contravention in a federal court or eligible State or Territory court. 

Multi-employer bargaining regime

Part 20 would amend the low-paid bargaining provisions of the FW Act and create the supported bargaining stream which would effectively provide flexible options at the multi-employer level.

Workplace Relations Minister, Tony Burke, says that the new measures surrounding the multi-employer bargaining regime involves a choice to get wages moving, and end deliberate wage stagnation.

The Bill introduces a new multi-employer bargaining regime, however, includes safeguards that eliminate participation by unions with a history of flouting workplace laws. This will effectively limit industrial action to unions in the supported bargaining stream and exclude the commercial construction sector. Whilst these organisations will still be provided the opportunity to bargain for single enterprise agreements, the explanatory memorandum specifies that the exclusions are to "recognise that the ability to participate in the new bargaining streams introduced by the Bill is a special right, and that where a bargaining representative has not complied with the FW Act, they should not be entitled to enjoy this special right".

The explanatory memorandum identifies the high-risk groups included in this stream, including low-paid occupations, government funded industries, female dominated sectors, and employees with a disability, employees who are culturally and linguistically diverse and First Nations employees. 

Abolition of the Registered Organisations Commission (ROC) and the Australian Building and Construction Commission (ABCC)

Parts 1 and 2 would amend the Fair Work (Registered Organisations) Act 2009 to repeal the provision that establishes the ROC, including the position of the Registered Organisations Commissioner.

Part 3 would abolish the ABCC and repeal the Code for the Tendering and Performance of Building Work 2016 (Building Code) and parts of the Building and Construction Industry (Improving Productivity) Act 2016 that relate to the ABCC and Building Code. This amendment will ensure that workers in the building and construction industry are afforded the same rights as other workers in relation to the enforcement of the FW Act.

Equal remuneration

Part 5 would amend the FW Act to require that the FWC's consideration of remuneration be free of assumptions based on gender, and to include consideration of whether there has been historical gender-based undervaluation of the specific work under consideration.

In particular, the requirement to provide evidence of a "male comparator" will no longer be a relevant consideration for the FWC in granting an equal remuneration order (ERO). The amendments will also allow the FWC to make an ERO of its on fruition, as well as on application.

Anti-discrimination and special measures

Part 9 would implement and strengthen the existing anti-discrimination framework in the FW Act with the inclusion of three further protected attributes, "breastfeeding", "gender identity" and "intersex status".

Fixed term contracts

Part 10 introduces amendments that would limit the use of fixed term contracts, not to delegitimise them, but to further provide job security for employees. Whilst it is noted that some industries will use fixed term contracts for legitimate purposes (such as businesses that source workers to perform discrete tasks), they are also used for the same role, over an extended period of time, and often exacerbates an employee's job insecurity. Consequently, the amendment would limit the use of fixed term contracts for the same role to two consecutive contracts, or a maximum of 2 years.

Flexible work

Part 11 would amend the FW Act to widen the circumstances in which an employee can request flexible working arrangements. This amendment will include situations where the employee, or a member of their immediate family or household, experiences family and domestic violence.

Part 11 also empowers the FWC to resolve disputes regarding flexible working arrangements, including by mandatory arbitration.

Sunsetting of "zombie" agreements

Part 13 would amend the FW Transactional Act to sunset all remaining transitional instruments that are currently preserved by the Act. This includes agreement-based transitional instruments, employment agreements, and enterprise agreements.

Enhancing the small claims process

Part 24 would increase the limit on the amounts that can be awarded in small claims proceedings under the FW Act from $20,000.00 to $100,000.00.

Enterprise agreement approval

Part 14 would amend the FW Act to simplify the current requirements to be met for an enterprise agreement to be approved by the FWC. Currently, enterprise agreements are overly prescriptive and complex, and the amendment intends to simplify the pre-approval stage.

Prohibiting employment advertisements with pay rate that would contravene the Act

Part 25 would insert a new provision that prohibits national system employers from advertising a role at a pay rate that contravenes the FW Act or a fair work instrument. This prohibition addresses concerns that migrant workers are targeted with advertised pay rates below the minimum wage.

Civil remedy provisions

It is important to note that there are a number of amendments that stipulate if a contravention of a prohibition occurs, it would be captured by the civil remedy provisions in the FW Act, and consequently entail a fine or compensation to be paid. A summary of these is set out in the table below.



Section 44

Non-compliance with flexible working arrangement provisions

Section 65C(1) (s 65C(6))

Non-compliance with a term of a FWC order made under new subsection

Section 226A

Non-compliance with a guarantee of termination entitlements

Section 333D

Prohibition on pay secrecy terms

Section 333E(1)

Limitations on fixed term contracts

Section 333K

Failure to provide Fixed Term Contract Information Statement

Section 527D

Prohibiting sexual harassment in connection with work

Section 527K

Contravening a stop sexual harassment order

Section 527S(4)

Contravening a compensation order in an arbitrated sexual harassment dispute

Section 536AA(1)

Advertising employment with a rate of pay that contravenes the FW Act

Section 536AA(2)

Advertising piecework without including periodic rate of pay

Schedule 16, item 4C

Non-compliance with obligation to notify employees about automatic sunsetting

If you require further information or have any queries in relation to this legal update, please contact Matthew Smith or Mason Fettell. 

We would like to acknowledge the contributions of Sally Coburn (Solicitor) to this article.

Further Reading