On Tuesday 6 June 2023, a number of changes to the Fair Work Act 2009 (Cth) (Act) introduced by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 commence.
Below is an overview of the changes.
The amendments to the Act will:
- extend the right to request flexible work to include:
- pregnant employees; and
- where an employee, or a member of their immediate family or household, experiences “threatening or other abusive behaviour” from a family/household member or partner, rather than being limited to “violence”;
- require employers to follow a much more detailed procedure when responding to requests for flexible work arrangements, including:
- discussing the request with the employee;
- genuinely trying to reach agreement;
- having regard to the consequences to the employee if the request is refused; and
- identifying the specific reasonable business grounds justifying the refusal.
If such a request is refused, the Fair Work Commission (FWC) will be empowered to deal with the dispute; firstly, by means other than arbitration (e.g. conciliation, mediation, making a recommendation or expressing an opinion), or dealing with the dispute by arbitration if the first method is unsuccessful. Previously, employees had no right of review.
Employers must ensure that requests for flexible working arrangements are properly considered in line with the new requirements and only refused on genuine reasonable business grounds.
Unpaid parental leave
Employees can request an extra 12 months unpaid parental leave at the end of the first 12 months parental leave.
The obligations on employers to respond to requests for extensions of unpaid parental will be expanded. Employers will need to agree or refuse a request within 21 days, after discussion with the employee and genuinely trying to reach an agreement.
If refused, employers must consider the consequences of refusal, and may only do so on reasonable business grounds – which must be explained to the employee, along with their right to dispute the decision in the FWC.
The changes will also give the FWC powers to resolve disputes about an employer’s refusal to extend unpaid parental leave, including by arbitration.
The approval of enterprise agreements will be simplified by removing:
- the requirement to provide employees with access to the enterprise agreement during a 7 day ‘access’ period ending immediately before voting commences; and
- in some circumstances, the requirement to issue a notice of employee representative rights (NERR) and to wait 21 days after the issue of the last NERR before requesting employees to vote on the agreement.
These steps will be replaced with a principled-based approach where the FWC only needs to be satisfied that an enterprise agreement has been genuinely agreed to by the employees covered by the agreement. The FWC published the Statement of Principles on Genuine Agreement on 12 May 2023 (read more on the FWC website here). The FWC will also need to be satisfied that the employees voting on the agreement have “sufficient interest in the terms of the agreement” and are “sufficiently representative, having regard to the employees the agreement is expressed to cover”.
The FWC will be given the power to arbitrate long running enterprise agreement disputes via “intractable bargaining declarations” on application if satisfied that:
- the parties have bargained for at least 9 months, or at least 9 months has elapsed since the nominal expiry date of the previous enterprise agreement; and
- there is no reasonable prospect of agreement being reached if the Commission does not make the declaration.
The FWC will be able to make an “intractable bargaining workplace determination” to resolve any specific matters that have not been agreed between the parties – effectively giving the FWC the power to arbitrate any disputed or contentious terms in an enterprise agreement.
Eligible employers or employees will also be able to apply for a single interest employer authorisation and remove the requirement for certain employers to apply for a Ministerial declaration. The FWC will also be able to make such an Authorisation without consent in certain circumstances.
For all bargaining, the notice period for protected industrial action will be extended from 3 business days to 120 hours.
The Better Off Overall Test (BOOT) will also be simplified by removing the requirement for all terms and conditions in a proposed enterprise agreement to be more favourable than the relevant award. It should theoretically be easier for agreements to be approved when supported by the employer/s, their bargaining representatives and any registered union bargaining representatives.
The FWC will also be given the power to:
- amend proposed agreements that do not meet the BOOT; and
- ‘reconsider’ whether an existing enterprise agreement still meets the BOOT if satisfied that employees are engaging in patterns of work or types of employment not considered when the agreement was approved.
There will also be other minor changes to the bargaining process, including the ability for bargaining representatives to compel an employer to bargain – without requiring support from a majority of employees – if the previous enterprise agreement expired less than 5 years ago.
In addition to the general changes to bargaining detailed above, there will be three separate bargaining “streams” for different types of multi-enterprise agreements:
- supported bargaining agreements (replacing the existing low-paid bargaining stream), enabling the FWC to make a supported bargaining authorisation to compel multiple employers – generally those in lower paid industries, excluding the construction industry – to bargain together after considering a number of factors, such as low pay/conditions in the relevant industry (e.g. aged care, disability care, early childhood education) and common interest of employers;
- single interest employer agreements, which will apply to employers with clearly identifiable common interests with reasonably comparable business operations and activities; and
- cooperative workplaces agreements, which will apply to any multi-enterprise agreements that do not fall into the two streams above. These agreements will not be available to employees who perform general building and construction work – or their employers.
Protected industrial action will be available to those bargaining for supported bargaining agreements and single interest employer agreements, but only after the bargaining representatives attend a conference or mediation with the FWC. Industrial action will remain unavailable for those bargaining for a cooperative workplace agreement.
Multi-enterprise agreements can be varied to remove employers and employees, subject to the FWC being satisfied that employees had a reasonable opportunity to vote on the variation, that there was genuine majority approval, and that each union representing affected employees agrees to the variation.
Other changes commencing soon
In addition to the changes detailed above:
- from 1 July 2023
- the National Construction Industry Forum will be established to advise on a wide range of issues related to work in the building and construction industry, including workplace relations, industry culture, skills and training, safety, gender equity, and productivity;
- the small claims process will be enhanced by:
- increasing the amount a worker can be awarded through small claims procedure when recovering unpaid work entitlements to $100,000 (currently $20,000); and
- allow a successful employee to claim court filing fees from the employer; and
- from 7 June 2023, pay secrecy clauses in new employment contracts will be unlawful and unenforceable, with potentially significant financial penalties facing employers offering prospective employees employment contracts with pay secrecy/confidentiality clauses (read our previous article here).
If you would like more information about the legal implications of these changes and how they may affect your business, or require further detail, please contact our Employment and Workplace Relations team via email at [email protected] or call us on 8414 3400.