What has changed under the ‘Secure Jobs, Better Pay’ industrial relations reforms?

The Federal Labor Government has introduced their industrial relations reforms through their Secure Jobs, Better Pay Bill which has now been passed and is also known as the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022. In this legislation there are a number of key changes that businesses will have to adapt to, now that it has been passed. These changes impact various diverse areas, from enterprise bargaining to sexual harassment prevention. Note: This is updated as of 22/02/2023.

Table of contents

Bargaining and Workplace Relations

Better Off Overall Test

Supported Bargaining Stream

Cooperative Workplace Bargaining

Initiating Bargaining – Single Enterprise Bargaining

Removing Barriers to the Single Interest Bargaining Stream

Zombie Agreements

Simplifying Enterprise Agreement Approval Requirements

Termination of Enterprise Agreements

Bargaining Disputes

Sexual Harassment

Flexible Arrangements

Other Changes

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Bargaining and workplace relations

The Government has significantly overhauled the enterprise bargaining system in response to being overly cumbersome in several areas i.e. the Better Off Overall Test (BOOT) and commencing the EA process. In addition, the Government in line with its intention of increasing underlying real wage growth, has made significant changes to “single interest” and “multi-employer” bargaining.

Better Off Overall Test (BOOT)

The BOOT is used to ensure that all employees covered by an enterprise agreement (EA) are better off under the agreement than if they were covered by the relevant award. The changes  are:

  • The BOOT is applied as a global assessment, as opposed to a line-by-line comparison;
  • The Commission will only have to review existing employees and work patterns, or kinds of work that are reasonably foreseeable at the test time;
  • The Commission can directly amend or remove a term in an agreement that does not otherwise meet the BOOT;
  • Primary consideration will be given to any common views shared by a registered employee organisation involved as a bargaining agent and the employer, about whether the agreement passes the BOOT. By inference, unregistered organisations (such as RAFFWU in the Fast Food and Retail sectors) will have less impact on the FWC’s decision than registered unions, such as the SDA.

Initiating bargaining – Single Enterprise Agreements

The legislation has removed the current requirement for employee bargaining representatives to obtain a majority support determination to initiate bargaining, where the proposed agreement would replace an earlier single‑enterprise agreement that had passed its nominal expiry date and no more than 5 years had passed since the nominal expiry date.

Removing barriers to the Single Interest Bargaining Stream

Under the new legislation, 2 or more employers will now have much easier access to enter into a single enterprise agreement together. Instead of the previous requirements to be either franchisees in the same network, a joint venture, common enterprise, a related body corporate or having obtained a Ministerial Declaration, they will now only have to apply for a Single Interest Employer Authorisation (SIEA). Under these proposed laws, the FWC can make an SIEA to cover an employer with or without its consent, in circumstances where:

  • The various employers agree to bargain together, or a majority of employees who will be covered want to bargain.
  • The employers have clearly identifiable common interests such as geographical location, nature of their enterprises, etc.
  • The group of employees being covered by the SIEA was fairly chosen (having regard to geography, operational or organisational considerations).
  • At least some of the employees to be covered by the SIEA are represented by an employee organisation.
  • Both sides have had an opportunity to express their views on the agreement to the FWC.
  • It is not contrary to public interest to do so.

However, the FWC cannot make an SIEA if the employer is a small business employer or covered by an enterprise agreement that has passed its nominal expiry date.

Supported Bargaining Stream

The legislation has renamed the previous Low-Paid Bargaining Stream, to the ‘Supported Bargaining Stream’. The Supported Bargaining Stream permits bargaining across multiple employers in low paid industries (such as aged care, disability care, and early childhood education). Under the changes, a bargaining representative or an employee organisation entitled to represent the industrial interests of an employee (unless excluded by the FWC) can apply to the FWC for a Supported Bargaining Authorisation, requiring multiple employers to bargain together for a Supported Bargaining Agreement (SBA).

Within the new stream:

  • Bargaining orders are available and applications to deal with bargaining disputes can be made by a single bargaining representative.
  • If the parties are unable to reach an agreement, the FWC can make a binding workplace determination through the new “intractable bargaining” declaration process.
  • Protected industrial action is permitted, with a requirement for mandatory conciliation and for 120 hours’ notice.

Cooperative Workplace Bargaining

Previous multi-enterprise bargaining processes have been replaced with the Cooperative Workplace Agreement (CWA) framework, where it will continue to be voluntarily entered into by employers, with protected industrial action not available. Under the legislation:

  • Any employer can seek to make a CWA, consistent with current arrangements.
  • Employers will not be able to be covered by a CWA if they have a current enterprise agreement.
  • Employees will be required to vote to approve the agreement and the BOOT would apply.

The CWA stream will also allow the FWC to, in certain circumstances, exclude persons from an agreement and vary an existing CWA to add employers and employees where necessary. To bargain for a CWA, the FWC must be satisfied that at least some of the employees to be covered by the CWA were represented by an employee organisation.

Zombie agreements

‘Zombie’ agreements are enterprise agreements that generally were created prior to the commencement of the Fair Work Act 2009 prior to 1 January 2010. Zombie agreements generally don’t have to be as favourable as the applicable award, as long as the base rates of pay are no less than the current award rates. Under the new legislation, all ‘zombie’ agreements will be terminated on 7 December 2023, unless they the FWC extends the agreement as a result of an application. Otherwise, they either must draft a new agreement and have that approved or move to pay employees under the relevant modern award.

Simplifying enterprise agreement approval requirements

The legislation aims to simplify the requirements for approval of an EA. It does this by removing:

  • The strict requirement to provide employees with access to the enterprise agreement during a 7 day ‘access’ period ending immediately before voting commences.
  • 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 an employee vote on the agreement.

These steps are replaced with the more flexible notion that the EA has been “genuinely agreed” to by the employees covered by the EA. The FWC must be satisfied that the employees had an informed and genuine understanding of the agreement being approved. The FWC will be required to publish a ‘statement of principles’ to provide guidance to employers about how they can meet the genuine agreement requirement.

It also gives the FWC the ability to ignore minor procedural or technical errors if it is satisfied that the employees were not likely to have been disadvantaged by the error.

Termination of enterprise agreements after nominal expiry date

The previous public interest test for termination has been replaced with the requirement for the FWC to be satisfied that the continued operation of the agreement:

  • Is it unfair for the employees covered by the agreement.
  • Is it  not likely to cover any employees.
  • Would it pose a significant threat to the viability of a business and the termination of the agreement would reduce the likelihood of employees being terminated (and if there are termination entitlements in the agreement, the employees must have been given a guarantee of termination entitlements, to preserve their redundancy entitlements).

The FWC must also consider whether termination of the agreement would adversely impact the bargaining position of employees negotiating a new agreement.

Bargaining disputes

The legislation also aims to increase the scope of the Fair Work Commission (FWC) to resolve intractable bargaining disputes. The legislation has repealed the ‘serious breach declaration’ provisions (which have rarely been used) and introduced a new ‘intractable bargaining declaration’ scheme.

Under the legislation, the FWC must be satisfied before making an intractable bargaining declaration that:

  • It has dealt with the dispute (for example by conciliation) under section 240 of the Act and the applicant participated in the processes to deal with the dispute.
  • There is no reasonable prospect of an agreement being reached if the Commission does not make the declaration.
  • It is reasonable in all the circumstances to make the declaration, taking into account the views of all the bargaining representatives for the agreement.

A bargaining representative (except for Greenfields agreements or the proposed cooperative workplace agreement) can apply to the FWC for an intractable bargaining declaration.

Following any post-declaration negotiation period, the FWC would make an intractable bargaining workplace determination to determine the terms of the Enterprise Agreement (EA), other than those already agreed to by the parties.

Sexual harassment

­ The legislation has made the following changes:

  • Prohibiting sexual harassment in connection to work – with a broader definition of a worker (using definitions from WHS legislation).
  • Expanding the Fair Work Commission’s jurisdiction in utilising ‘stop sexual harassment’ orders.

The changes give victims more access to legal pathways to protections and put the onus on employers to prevent sexual harassment from occurring in the workplace, as opposed to just acting after the fact.

Secure jobs

Just as the name suggests, part of the Government’s purpose of this legislation is to create higher job security in a job market that it sees is becoming increasingly populated with short term and/or casual roles.

The legislation specifically focuses on fixed term contracts. Employers will be unable to use fixed term contracts for the same role for two consecutive contracts, or one with a maximum duration of two years. However, if the contract is for a specific project, or there is another legitimate reason, employers can be exempt from these limitations.

Lastly, employers will have to provide fixed term contract workers with a Fixed Term Contract Information Statement, in the same way they have to for other types of employees, such as casuals.

Flexible arrangements

Previously, employers have no onus to accept an employee’s request for flexible working arrangements. The legislation:

  • Makes employers genuinely consider and attempt to come to some sort of agreement with the employee.
  • Have employers provide detailed reasons for the refusal plus any information on an alternative solution they would be willing to consider, where they are unable to grant the requested flexibility for the employee.

Either party can refer matters to the FWC who must then deal with the dispute, including by mandatory or binding arbitration.

Other changes

There are a number of changes relating to various areas of workplace law. Some of these changes include:

  • Adding gender identity, intersex status and breastfeeding in the list of protected attributes in the anti-discrimination provisions of the Fair Work Act.
  • Amending the minimum wages objective to include gender equity, which will likely lead to more cases seeking to remedy the issue of lower pay for industries where women are more likely to be employed.
  • Increasing the cap on the amount that can be awarded through small claims court proceedings from $20,000 to $100,000.
  • Allow the courts’ award filing fees as costs to successful small claims applications.
  • Prohibiting job advertisements with a pay rate that would breach the Fair Work Act.

If you want to view all the changes in the legislation, click here.

Need assistance?

Australian employment law is highly complex making it difficult to ensure your business is compliant, especially when you have a hundred other things to worry about. That’s where ER Strategies can help. 

We are experts at employment compliance and assist plenty of employers to manage their obligations whilst still being able to run their businesses. Get in touch with us on 1300 55 66 37, or click the button below to contact us.

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