Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022

The Secure Jobs, Better Pay amendment represents some significant changes to the Fair Work Act 2009 (“Fair Work Act”).  The Bill received Royal Assent on 6 December 2022.

The amendments include:

• Prohibition on pay secrecy terms
• Reform of the low paid bargaining stream to a new supported bargaining stream
• Changes to enterprise agreements
• Increase in the small claims limit for amounts that can be awarded under the Fair Work Act
• Changes to fixed term contract laws
• Prohibition of sexual harassment in the workplace
• Abolition of the Australian Building and Construction Commission (ABCC) and Registered Organisations Commission (ROC)
• Responding to requests for flexible working arrangements

Prohibition on Pay Secrecy

Employees will now have the option of whether to disclose, or not disclose, their remuneration and any terms and conditions of their employment to any person. It also allows employees to ask any other employee about their remuneration and any terms of their contract with regard to the right that they have the option to disclose or not.

The introduction of this amendment has given employees a new workplace right which employers can not prohibit through terms of a contract. In cases where such prohibited terms are included, they will be taken to have no effect and an employer may be in contravention which is subject to a civil remedy.

Enterprise Agreements

There are multiple changes to the approval process, termination and better off overall test (BOOT) which will affect the current laws surrounding enterprise agreements. The BOOT will now be undertaken as a global assessment and will only need to apply the BOOT to reasonably foreseeable types of work, reducing the risk of hypothetical situations being considered when bargaining for an enterprise agreement. In addition, the Fair Work Commission will now be able to amend proposed agreements to remove or change any terms which do not meet the BOOT.

Another important change can be seen in the approval process of agreements with many of the strict time frames being replaced by a statement that the Fair Work Commission must be satisfied that employees genuinely agreed to the agreement. The Fair Work Commission will be able to deal with amending errors within an Agreement.

Multi-Enterprise Agreements

Employers who employee 20 or more employees with a “common interest” and are not covered by the Enterprise Agreement that is still within its nominal term, may be required to bargain with a union organisation for a single interest Multi‑Enterprise Agreement. For employers to be covered by a single interest agreement, the operations and business activities of the employers must be “reasonably comparable”.

Small Claims Limit Increase

The primary change to the small claims process involves raising the limit that can be awarded for proceedings under the Fair Work Act from $20,000 to $100,000 (not including interest).

The other major amendment relating to the small claims process enables the Court to make an order as to costs in certain cases. It will operate despite the general rule provided in the Fair Work Act which limits costs to cases where proceedings are instituted vexatiously. The amendments will come into effect from 1 July 2023 and will operate by allowing a costs award to be issued to a successful claimant in regard to any filing fees they paid to the Court.

Changes to Fixed Term Contracts

The Secure Jobs, Better Pay Act has placed significant limitations on the use of length of fixed term contracts that can be used by employers. Essentially the amendments place limits on fixed term contracts to a 2-year maximum period or two consecutive contracts, whichever is shorter. Terms which provide for an option or right to extend or renew the contract more than once will also result in contravention of the new laws.

There are a number of exceptions which have been drafted into the legislation to allow certain contracts to be excluded from the new laws. Some of the more relevant exceptions are an employee:

• engaged to perform only a distinct and identifiable task involving specialised skills
• engaged in relation to a training arrangement
• engaged to undertake work in the temporary absence of another employee
• whose earnings under a contract are above the high-income threshold ($162,000 from 1 July 2022)

Other exceptions:

• Some positions where the performance of work is funded by government funding or funding prescribed by the Fair Work Regulations. 
• If a modern award that covers the employee includes terms that permit the circumstances mentioned above.

If contracts are entered into after 6 December 2022 which contravene the above new laws, the term that provides the termination of contract at the end of an identifiable period will have no effect within the contract. This will not affect the validity of any other term of the contract, but it will result in the contract becoming a permanent contract subject to the terms of the contract.

The Fair Work Ombudsman must prepare a Fixed Term Contract Information Statement which must be given to certain current and prospective employees.

The Statement must be given to a person who has entered into a contract of employment which includes a term that provides the contract will terminate at the end of an identifiable period. Any disputes regarding the operations of the amendments can be brought to the Fair Work Commission.

Prohibition on Sexual Harassment

The amendments makes it clear that if an employee or an agent of a person sexually harasses another then the principal / employer will be vicariously responsible unless the employer / principal can establish they took all reasonable steps to prevent the employee or agent from sexually harassing another in the workplace. The Fair Work Commission has the power to make a Stop Sexual Harassment Order. Applications for a Stop Sexual Harassment Order must be made within 24 months of the alleged harassment. The Fair Work Commission must start to deal with the Application within 14 days after the Application is made. Failure to comply with a Stop Sexual Harassment Order is a civil remedy provision which means that the Respondent to the Order could be ordered to pay penalties as a consequence of a breach to comply with the Order. The Fair Work Commission can make an order for payment of compensation including an order for payment of remuneration lost. The Fair Work Act makes it clear that a Claimant cannot double dip and seek compensation in the Fair Work Commission and then pursue a claim in any other jurisdiction for compensation for the same sexual harassment.

Responding to Requests for Flexible Working Arrangements

The Fair Work Commission now has jurisdiction to deal with a dispute regarding a request for flexible working conditions and can make orders that the employer grant the request or make specified changes to the employee’s working arrangements.

If you wish to discuss these or any other amendments to the Fair Work Act or review of your documentation please contact a member of our team.