Following a substantial period of Parliamentary debate and public commentary, on 6 December, the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 was passed, introducing a number of significant reforms to the Fair Work Act 2009, including enterprise bargaining, fixed-term contracts and gender equality in the workplace. 

To help employers better understand potential impacts on their business, we have summarised the key changes below: 

Prohibiting Pay Secrecy

Effective immediately, all employees now have a workplace right to discuss pay details with other employees. Employees may choose to disclose or not disclose information about their pay (including information required to work out pay, such as hours of work) and cannot be forced to provide this information if they do not wish to. Clauses in employment contracts attempting to create “pay secrecy” will have no effect. 

Was does this mean for employers?

Existing contracts which contain pay secrecy clauses will not be impacted, unless the contract is varied (such as a position change or wage increase) and this new workplace right will apply. From June 2023, employers could face penalties for including pay secrecy terms in their employment contracts. It is advised that employers consider how pay transparency might impact employee morale. Further, employers should review their pay structures for pay equity, in particular gender pay equity. 

Requests for Flexible Work Arrangements 

Extending the existing right to request flexible working arrangements, pregnant employees and employees or a member of their immediate family or household who experiences family and domestic violence, can soon also request flexible work arrangements. There are greater obligations upon employers when refusing requests and employees can now challenge a refusal in the Fair Work Commission. 

Was does this mean for employers?

For eligible employees that make a request, employers now have the following obligations before they can refuse the request:

• have a discussion with the employee
• genuinely try to find alternative arrangements to accommodate the request
• consider the effect of refusal
• provide a written response within 21 days that outlines:
• the reasons for refusal, relying upon the reasonable business grounds;
• alternatives the employer have agreed to make to accommodate the employee’s situation; and
• the right under the Fair Work Act to dispute the refusal. 

Employers must make sure that they comply with these new requirements and have robust policies and procedures in place now for responding to such requests

.

Fixed Term Contracts

Employers can no longer use a fixed term contract that spans for 2 or more years, is continually extended or is a new contract for substantially the same work. Exceptions will apply, including where a relevant Award allows fixed term contracts. 

Was does this mean for employers?

Employers must review the circumstances in which they are currently using fixed-term contracts and the possible exceptions that may apply. From 6 December 2022, employers must provide a Fixed Term Contract Information Statement to employees that enter into new fixed term contracts. 

Sexual Harassment 

The sexual harassment definition has expanded and now applies beyond conduct which occurs between two employees. The provisions also apply to sexual harassment perpetrated by third parties against employees – such as customers or clients. However, this must occur “in connection with” the employee performing work. Employees, prospective employees and unions on behalf of an employee can apply to the Fair Work Commission for relief in dealing with workplace sexual harassment. 

Was does this mean for employers?

Operating in line with the increased obligations imposed on employers to prevent and respond to sexual harassment, employers must consider whether their business has effective measures and controls in place and is equipped to manage the risk of sexual harassment in the workplace. 

Multi-Employer Bargaining

These are arguably the most significant reforms made to the Fair Work Act 2009, specifically reducing the barriers to multi-enterprise bargaining. Employees and unions now have greater powers to bargain for agreements covering multiple employers. This bargaining is expanded upon through the following streams:

Supported bargaining

This stream supports low-paying industries, allowing employees to apply to the Fair Work Commission to compel their employer to bargain with other like employers. This allows the Commission to consider matters such as the current pay and conditions in the industry and whether the employers have common interests.

Single interest employer authorisations

Employers who have “common interests” can easily bargain together, especially if: 

• the business activities of the employers are “reasonably comparable”;
• the employer and union, if applicable, have expressed their views;
• the majority of the employees of the employers want to bargain; and
• it is not contrary to the public interest. 

This stream makes it simpler for employers to be added to an existing single enterprise agreement but can be exempted if the employer has less than 20 employees. 

Was does this mean for employers?

Employers could be forced to bargain together, meaning that employers must assess whether they could potentially be compelled to participate in either of the bargaining streams. 

When do these reforms come into effect?

Prohibition on pay secrecy Immediate effect (from 7 December 2022)

Penalties for pay secrecy clauses From 7 June 2023

Flexible work arrangement requests From 6 June 2023

Fixed term contracts From 6 December 2023 

Prohibition of sexual harassment in connection with work From 6 March 2023

Agreements covering multiple employers A day to be fixed, or from 7 June 2023

For more information please contact Cecilia White – Director, Perks People Solutions.