The Act seeks to amend the Fair Work Act 2009, the Fair Work (Registered Organisations) Act 2009 and the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 to stimulate wage growth, boost job security, tackle gender inequality and modernise the workplace bargaining system (see our article about the Bill that was introduced in October here).
The Act implements critical reforms in the following areas:
Prohibiting sexual harassment in connection with work
The Act creates a new prohibition on sexual harassment in connection with work. Importantly, this amendment will, in some circumstances, deem businesses to be vicariously liable for acts of their employees or agents. If alleged, a business will be required to prove that they took all reasonable steps to prevent the sexual harassment from occurring.
A new dispute resolution function for the Fair Work Commission (FWC) will be created to deal with sexual harassment claims, which is modelled on the existing dispute resolution mechanism for general protections dismissal claims.
Prohibiting pay secrecy
The Act will give employees the positive right to disclose (or not disclose) 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, this does not compel an employee to make such disclosures.
The amendment expressly prohibits employers from including any pay secrecy clauses in new employment contracts and other written agreements and renders existing pay secrecy clause void and unenforceable.
Fixed term contracts
The Act introduces amendments that limits the use of fixed term contracts. The amendment will limit the use of fixed term contracts for the same role to two consecutive contracts, or a maximum of 2 years.
Multi-employer bargaining regime
The Act expands multi-employer bargaining, meaning that multiple employers in a given sector can collectively bargain together. Other than for Greenfields agreements, the Act excludes general building and construction work, and work within the civil construction sector from multi-enterprise bargaining.
The better off overall test (BOOT) is being amended to address the inflexibilities in its implementation. The BOOT test will be applied as a global assessment, and the FWC will no longer have regard to hypothetical working arrangements for existing employees as well as "reasonably foreseeable" employees. A reasonably foreseeable employee is a person who, if they were an employee covered by the agreement at the test time, would be covered by the agreement or relevant award.
Whilst the FWC are no longer required to consider hypothetical working patterns, if an employer, employee or bargaining representative express a view as to whether a particular arrangement, kind of work or type of employment is reasonably foreseeable, then the FWC must consider and determine on that matter.
Flexible work and equal pay
In addition to employees (or a member of their immediate family or household) experiencing family and domestic violence, pregnant employees will also be able to request and access flexible working arrangements.
An employer must provide an employee with their reasons for any decision to refuse a flexible work arrangement request, however, where the FWC is satisfied that the employer did not adequately respond to the employee, or engage in adequate discussions, they are empowered to order the employer to take further steps the FWC consider appropriate.
The amendments to the Act will commence in stages over a 12 month period as follows:
7 December 2022 (day after Royal Assent)
- Objects of the Fair Work Act, modern awards objective and minimum wages objective
- Equal remuneration
- Prohibiting pay secrecy
- Anti-discrimination and special measures
- Termination of enterprise agreements after the nominal expiry date
- Sunsetting of "zombie" agreements
- Initiating bargaining
- Dealing with errors in enterprise agreements
- Communications to be available in multiple languages
6 March 2023
- Prohibiting sexual harassment in connection with work
6 March 2023, or an earlier date to be fixed by proclamation
- Expert panels
6 June 2023
- Flexible work and unpaid parental leave requests
6 June 2023, or an earlier date to be fixed by proclamation
- Enterprise agreement approval and the BOOT
- Bargaining disputes, industrial action, supported bargaining, single-interest employer authorisations, varying enterprise agreements to remove employers and their employees, and co-operative workplaces
- Absorb the functions of the Registered Organisations Commission
6 December 2023, or an earlier date to be fixed by proclamation
- Fixed term contracts
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 contribution of Sally Coburn (Solicitor) to this article.