The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022
‘Closing Loopholes’ – Key Amendments – Edition 1
The Australian industrial relations landscape is currently changing after the Federal Government introduced the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act in December of 2022.
Since its implementation, the proposed changes under this amendment have received significant criticism by businesses and politicians as to its complexity and their resulting consequences long-term. As a result on September 4, 2023, the Australian Labor Government introduced the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023. These new changes under the Closing the Loopholes Bill, have aimed to close the ‘loopholes’ and gaps within Australian workplace laws that have been perceived to undermine pay and working conditions in the Commonwealth jurisdiction.
The Bill was divided into two tranches with the first tranche receiving Royal Assent on 14 December 2022 and the second tranche on 26 February 2024.
As both Bills bring significant changes to the Fair Work Act 2009 (Cth) (FW Act) and other related legislation, it is critical that employers understand the changes to ensure their workplaces are compliant. Over the next couple of weeks, we will provide information on the main changes that are being introduced.
In this edition of our three-part series, we will be outlining the amendments proposed and approved for implementation from December 6, 2023, these include changes to rules of using fixed term contracts, updated penalties for pay secrecy, anti-discrimination protected attributes, respect at work, and new Australian workplace laws regarding sham-contracting.
Key Amendments
Limitations on fixed term contracts
Since 6 December 2023, employers can no longer employ an employee on a fixed term contract:
- which exceeds two years (including any extension or renewal period); or
- which contains the right to extend or renew the contract more than once; or
- where the contract comes into effect after another fixed term contract that the employee has previously been engaged under and relates to the same or a substantially similar role as the previous contract with substantial continuity of the employment relationship, where the total period of the contracts is more than two years.
Anti-avoidance provisions also prevent employers from taking action to avoid the new limitations on the use of fixed term contracts. For example, an employer must not end employment or delay re-employing an employee or employ someone new to do the same or substantially similar work.
Employers must provide employees on a fixed term contract with a copy of the Fixed Term Information Statement.
Pay Secrecy — Penalties Commenced
Since 7 December 2022, gender equality and job security have been included as statutory objectives of the FW Act. That means that every provision of the FWA must be interpreted consistently with the purpose of gender equality and job security.
With the rationale of addressing gender pay gaps, the federal Government has prohibited efforts by employers to require employees to treat their remuneration as secret. Employees have had the right to disclose or not disclose their remuneration and employers cannot exercise adverse action against employees who exercise this right.
Pre-existing pay secrecy terms in employment contracts now have no effect and cannot be enforced. Pay secrecy terms cannot be included on new employment contracts and employers can face penalties if they are included.
Anti-discrimination Provisions
New protected attributes were added to the existing protected attributes under the FWA. These include:
- breast-feeding;
- gender identity; and
- intersex status.
These protected attributes align the FWA with the attributes in the Sex Discrimination Act 1984 (Cth) and other Commonwealth anti-discrimination legislation.
Respect at Work
Workplace sexual harassment has been prohibited under the FW Act since 6 March 2023.
The federal Government has introduced more proactive obligations on employers to take positive steps to prevent and address gender-based discrimination and sexual harassment in the workplace.
The FW Act was amended to prohibit sexual harassment in connection with work, including in the workplace. The protection applies to ‘workers’ including employees, contractors, work experience students and volunteers, prospective workers and PCBUs (persons conducting a business or undertaking).
Since 6 March 2023 FWA has included definitions of ‘sexually harass’ and ‘sexually harassed at work’.
Employers can be held vicariously liable for sexual harassment unless they take all reasonable steps to prevent it.
In addition to existing powers to issue a ‘stop sexual harassment order’ the FWC can deal with disputes about sexual harassment by conciliation, mediation or making recommendations. Where a dispute remains unresolved, the FWC can arbitrate the dispute if both parties consent, or otherwise issue a certificate enabling the applicant to make a sexual harassment court application.
Sham contracting
The FW Act prohibits sham contracting — being employment arrangements disguised as independent contractor relationships.
Previously, employers could defend liability for sham contracting on the basis that they did not know and were not reckless as to whether a contract was a contract of employment rather than a contract for services. The amendment to the FW Act now requires an employer to prove that it reasonably believed the contract was a contract for services.
What Should Employers Do?
Fixed Term Contracts
Employers should review any fixed term contract arrangements they have in place to ensure they do not extend beyond 2 years.
Pay Secrecy
Employers need to be aware that any pay secrecy or confidentiality clauses cannot be enforced. Further, contracts should be reviewed to remove any such clauses.
Respect at Work and Anti-Discrimination Clauses
Employers need to review their policies and procedures relating to Sexual Harassment and Discrimination. Employees also need to be trained in these policies and procedures to mitigate an employer’s vicarious liability as much as possible.
Sham Contracting
It is very important for employers that sub-contract work to others to have in place a sub-contractor agreement and ensure certain criteria are met. This is common in the building and construction and cleaning industries.
Further advice
For employers, it is essential to be across these important changes to Australian workplace laws and understand how they may impact your workforce and your obligations as employer.
Bramwell Partners can work with employers to discuss and put in place reasonable steps to mitigate risk to your business as outlined above.
Contact Us Today to Learn More
Discover how our dedicated HR consultants can help mitigate risks and ensure workplace compliance calling us for a free consultation on 07 3630 5695.
Disclaimer
The content contained in this publication is intended only to provide a summary and general overview on matters of interest. It is not intended to be comprehensive, nor does it constitute legal advice. We attempt to ensure that the Content is current, but we do not guarantee its currency. We advise all readers to seek professional and legal advice to suit their individual circumstances.
