In November’s HR Breakfast Club Forum, BAL Lawyer within Employment & Investigations Team, Dogu Yesildag, discussed the proposed reforms to the Fair Work Act 2008 (Cth) (‘the FWA’). The FWA Amendment (Secure Jobs, Better Pay) Bill, which is currently being debated in Parliament, represents the most significant changes to the FWA since it was introduced.
Some of the topics Dogu covered included:
The first significant change is the addition of section 64A. The proposed amendment will govern how employers navigate requests for flexible working arrangements. Under the current regime, employers may refuse any request if they find ‘reasonable business grounds’ to do so. The new provision imposes legal obligation for employers to participate in discussions and genuinely try to reach an agreement with the requesting employee. If there is a refusal, the employer must furnish the employee with detailed reasons for that decision.
Where the parties cannot agree, the subsequent additions of ss65B and C provide conciliation and arbitration mechanisms through the Fair Work Commission (‘FWC’). These provisions certainly weigh in favour of a stronger right and easier access to flexible work.
The Bill promises a revamp of the existing legal framework for enterprise agreements. The application of the Better Off Overall Test or ‘BOOT’ has been codified in the amendment under s193A. The test, which is currently without a statutory application guide, requires the FWC to be satisfied that each award covered employee would be better off overall if the relevant enterprise agreement applied instead of the relevant award. Section 193A would require the FWC to undertake a ‘global assessment’ of each employee’s gain-loss calculus before it can be approved by the commission.
This change would encourage enterprise-based agreements and make the application of the BOOT test more streamline. However, a stringent and lengthy approval process has contributed to a decline in enterprise agreements over the past few years and some in Parliament have expressed concern about the new provision exacerbating that trend.
But perhaps more contentious are the suite of changes being proposed to bargaining processes and industrial actions. The Labor Government has since offered concessions in order to push the Bill through the House of Representatives. Multi-employer bargaining has been proposed to replace the low-paid bargaining stream. This refers to agreements which apply to one or more employers, and sometimes one or more unions. The object of these amendments, as stated, is to make wages more flexible and thus more responsive to rapidly changing economic conditions.
Some provisions, such as the proposed s218A, are house-keeping amendments that would allow the FWC to vary an enterprise agreement to correct errors, defects or irregularities. Zombie Agreements, those made prior to the FWA, are slated to sunset in s20A of the amendment. The provision specifies that each employee covered by an agreement-based traditional instrument must receive a written notice informing them of its termination.
Other proposals add complexity to the existing legal framework. Section 266 currently governs the termination of an enterprise agreement, providing that the FWC must terminate an agreement if it is ‘not contrary to the public interest to do so’ and the Commission considers that it is appropriate to terminate considering all the circumstances. The new s226 requires the FWC to consider whether the agreement poses a ‘significant threat’ to the viability of a business, whether termination would reduce the potential of terminations of employment and whether each covered employee has given the FWC a guarantee of termination entitlements. The long and short of these changes seems to be that it will be more difficult to terminate enterprise agreements under the new regime.
Significant limitations have been proposed to fixed term contracts through the insertion of s333E. The provision prohibits employers from entering non-casual employees into contracts that terminate at the end of an identifiable period. For a contravention to have occurred, the fixed term contract must be greater than 2 years or provides an option for renewal that can extend beyond two years or there is a continuing employment relationship maintained by consecutive contracts over a period. Section 333G provides that any agreements made in contravention of s333E (i.e., fixed term contracts) will not terminate at the end of a specified period and will instead continue to function as normal contracts.
The new section is accompanied by s333F which provides exceptions to s333E. For example, if the individual is engaged under a contract to perform a distinct task involving specialised skills, or in relation to a training arrangement, their contract will be exempt from the operation of s333E.
A range of other amendments, aimed at a vision of a ‘fairer, safer and more inclusive’ workplace, are included in the Bill. Section 333B, for instance, prohibits pay secrecy clauses in contracts. Corporations have often implemented these clauses to stop employees from comparing remuneration and pushing for wage rises. Labor believes that this amendment will foster greater transparency and thus facilitate discussion around wages and work conditions. It forms part of a larger strategy to provide individuals with more bargaining power and address issues such as pay inequality.
In that vein, additions have been made to the equal remuneration provisions of the Act. ‘Work value reasons’, as defined in s 157(2A), are the reasons justifying how much employees should be paid for their work. The insertion of s157(2B) would require the FWC’s consideration of work value reasons to be free of assumptions based on gender and include consideration of whether the work has been historically undervalued because of assumptions on gender.
This sentiment is evident in the proposal for two-expert panels inside the FWC, ‘the pay equity’ and ‘care and community sector’ panels. The function of these panels will be to address low-paid, female dominated industries. It is also reflected in changes to the Objects of the FWA, through insertion of 134(1)(ab):
‘the need to achieve gender equity in the workplace by ensuring equal renumeration for work of equal or comparable value, eliminating gender-based undervaluation of work and providing workplace conditions that facilitate women’s full economic participation.’
Refreshed anti-discrimination provisions are also on the menu, with s195(1) now including ‘breastfeeding’, ‘gender identity’ and ‘intersex status’ as attributes protected against discriminatory terms in enterprise agreements. These attributes have been added as protected attributes and gender pay equality has been written in as an objective of the FWA.
While the general protections categories have been serviceable, the current workplace legislation makes no explicit prohibition of workplace sexual harassment. In an effort to implement the recommendations flowing from the Respect@Work National Inquiry Report, the Bill proposes a suite of provisions which relate to resolving workplace sexual harassment disputes. Perhaps most noticeably, s527D creates a positive duty to refrain from sexual harassment in the workplace. Some of the other provisions are:
Other amendments have been made relating to compliance with the FWA and enforcement of its penalties. For example, in the amendment of s 548(2)(a), the threshold of what can be awarded in small claims proceedings has increased from $20,000 to $100,000. The Bill also proposes s536AA which would be the prohibition of advertisement of pay rates that contravene the FWA, or an industrial instrument’s minimum pay rates. This would make it a contravention to prescribe rates of pay below minimum employment standards and send a strong message to employers who intend on employing below the minimum wage.
To register for future HR Breakfast Club forums, visit our monthly forum page and register to attend.If you have any questions or wish to discuss your circumstances with a lawyer, please contact the BAL Lawyers Employment Law & Investigations team on 02 6274 0999.