The IR Laws Are Changing, How Will This Impact Your Workforce

On 2 December 2022, the Federal Government passed the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (The Act). 

The Act includes a wide array of proposed changes in the following areas:

  • Gender Equity,
  • Flexible Working Arrangements,
  • Sexual Harassment,
  • Discrimination,
  • Job Security,
  • Bargaining,
  • Institutional Changes.

Of particular importance for the real estate employers are the amendments relating to ‘flexible work requests’, ‘prohibiting pay secrecy’ and ‘limiting the use of fixed term contracts’.

 

Flexible Work Requests

Currently Section 65 of the Fair Work Act 2009 (Cth) (FW Act) allows an employee to request a flexible working arrangement if they are parents of school-aged or younger children or carers, have a disability, are over 55 years of age, or are a victim of family violence or supporting such a victim.

The Act has expanded the definition of family and domestic violence to include abusive and threatening behaviour, not just violence.

When an employee makes a request for flexible working arrangements, Employers will need to discuss the request with the employee, genuinely try to reach agreement to accommodate the employee’s circumstances, and have regard to the consequences of the refusal for the employee.

Employers are required to not only provide written reasons for any refusal, but to identify the reasonable business grounds justifying that refusal. Employers will also have to state what other changes (if any) to the employee’s working arrangements they will be willing to make, and inform the employee of their right to dispute the refusal. A failure to do any of these things could result in penalties being imposed.

Currently, refusals can only be challenged if the employer consents, or has previously consented (for example as part of an enterprise agreement) to arbitration. That limitation under the new Act no longer exists.

Where an employer refuses a request for flexible working arrangements, or did not respond within 21 days, the employee and employer will first have to attempt to settle the dispute at the workplace level. If no resolution was reached, either party could apply to the Fair Work Commission (FWC) to resolve the dispute. The FWC could deal with such disputes in any manner that it considered appropriate, such as mediation, conciliation, making a recommendation, expressing an opinion, or arbitration.

Where the FWC considered that arbitration was appropriate, it could order the employer to provide a written response or additional details, or make any other order to achieve compliance with the obligations set out above.

The FWC could also determine whether reasonable business grounds existed to refuse a request and, if not, order that the request be granted or that alternative arrangements be put in place to accommodate the employee’s request. In resolving such disputes the FWC will be directed to consider fairness as between the parties, and they must not make orders unless strictly necessary.

Prohibiting Pay Secrecy

The new Act prohibits pay secrecy, both retrospectively and in the future. There are four points to consider:

  1. employees will be allowed to ask other employees (of either the same or different employers) about their remuneration and other relevant conditions, including the number of hours worked;
  2. employees will be free either to disclose, or not disclose, their remuneration and any other employment conditions that determine that remuneration. Nothing within the amendments is intended to compel any employee to disclose such information. Both this and the right to ask other employees about their pay will be treated as workplace rights, for the purpose of the adverse action provisions in Part 3-1 of the FW Act (i.e. any breach will allow for a general protections claim to be made);
  3. any provision in an employment contract, award or enterprise agreement that prohibited employees from asking about or disclosing their remuneration and other relevant conditions will be treated as unenforceable; and
  4. employers will be prohibited from including any pay secrecy clauses in new contracts or other written agreements.

Pay secrecy clauses in employment contracts agreed to before the amendments take effect will remain enforceable, but only up to the point at which any variation to that contract was agreed. Employers will also have a six-month grace period before being exposed to penalties for including such clauses in their new contracts.

Limiting The Use Of Fixed Term Contracts

The Act now limits an employer’s ability to offer fixed term employment for periods of more than two years. Fixed term contracts with a right to renew if the total period extended beyond two years, or if there was a right to renew the period more than once, will also be prohibited.

Consecutive fixed term contracts are now prohibited where each contract was for a fixed term, the job or position was substantially the same in each, there was “substantial continuity” between the contracts, and the total period was either more than two years, or the previous contract contained an option to renew. According to the Explanatory Memorandum, the reference to substantial continuity is intended to cover a situation where there is a break between contracts, but the employment is expected to continue: for example, a break between teaching semesters, or a short period of unpaid leave.

Entering into any of the prohibited types of contract after the amendments take effect, or seeking to avoid the new limitations, will constitute a breach of a civil remedy provision. A prohibited contract will still be enforceable, except that any term that provided that the contract will terminate at the end of the fixed term will have no effect. Essentially, the contract will be treated as indefinite in nature and presumably terminable by reasonable notice even in the absence of expressly agreed notice periods.

There are a large number of exceptions to the limitations, which will allow fixed term contracts beyond two years where:

  • the employee is contracted to “perform only a distinct and identifiable task involving specialised skills”;
  • there is a training arrangement;
  • the contract is to accommodate essential work during an emergency or a period of peak demand, or to cover a temporary absence of another employee;
  • the contract provides payment in excess of the high income threshold (currently $162,000), or a pro rata amount for part-time or partial year employees;
  • the work is funded by a government funding scheme of a kind prescribed by regulations and the funding is payable for more than two years, but there is no reasonable prospect that the funding will be renewed beyond that period;
  • the work relates to a governance position that is time-limited by the governing rules of a corporation;
  • a modern award provides that fixed term contracts of the relevant type are permissible (such as the awards covering schools and higher education); or
  • any other class of contract prescribed by regulation.

It is also made clear that the new prohibition is not intended to apply to casuals. The Explanatory Memorandum explains that this is “to avoid unintended consequences, for example in circumstances where casuals enter into contracts on a shift-by-shift basis”.

Employees will be able to raise disputes about the new fixed term employment provisions with the FWC, providing that they had attempted to resolve the dispute at the workplace level first. The FWC will be obliged to deal with the dispute, but it can only do so by arbitration with the consent of all parties.

Finally, the Fair Work Ombudsman (FWO) will be charged with drafting a Fixed Term Contract Information Statement, which employers will need to provide to each fixed term employee at the time of making such a contract, regardless of whether the contract falls within any of the exceptions listed above.

In terms of timing, the new restrictions will not apply to contracts entered into before the amendments take effect, unless a further fixed term contract is subsequently created that takes the total period of employment over two years.

Please contact REEFWA on (08) 9365 7510 or reefwa@cciwa.com if you require assistance in managing any of these legislative changes within your workplace.

Written By Justin Lilleyman

Real Estate Employers’ Federation of WA (REEFWA), the Chamber of Commerce and Industry of WA (CCI) and Business Law WA (BLWA) has taken all reasonable care in preparing this document.  The contents of this document do not constitute legal advice and should not be relied upon as such.  Specific advice for your situation should be sought from CCIWA, BLWA or a professional adviser before any action is taken. Neither REEFWA, CCIWA nor Business Law WA accept responsibility for any claim that arises from any person acting or refraining from acting on the information contained in this document.

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