Australia: Major changes to federal employment law

Employer Action Code: Act

The Fair Work Amendment (Secure Jobs Better Pay) Act has amended the Fair Work Act (FWA) to among other things restrict the use of fixed-term contracts and pay secrecy clauses; strengthen provisions on gender pay equity, anti-discrimination and sexual harassment protections; and improve access to flexible work arrangements. The Act also creates more employee-friendly enterprise bargaining procedures and introduces multiemployer bargaining in some sectors.

Key details

• Fixed-term employment (under one or more consecutive contracts or extensions) will be limited to two years. Exceptions include the employment of individuals earning more than the high-income threshold (AUD $162,000 per year), apprenticeships and trainees, fixed-task agreements requiring special skills and essential work during peak periods.
• The regime for flexible work arrangements under the FWA has been amended to accommodate requests based on family or domestic violence or where the employee is pregnant, to shorten the timetable for reviewing and approving or denying requests, and to require employers to justify refusals based on “reasonable” business grounds (such as cost, impracticality or loss of productivity, adjusted to a degree for the size and nature of the business). Employees will also have the right to appeal decisions (or non-action by the employer within 21 days) with the Fair Work Commission (FWC), which will be empowered to provide binding arbitration of such disputes, generally after attempting to resolve them by other means, including mediation and conciliation.     
• Employees will have the right to disclose their compensation information (or to decline to do so) and to request that other employees disclose their pay information and terms and conditions of employment as considered reasonably necessary for comparison purposes. Accordingly, pay secrecy clauses will be prohibited for new employment contracts, and existing pay secrecy clauses will no longer be enforceable, regardless of the clause’s term.
• The FWC has been authorized to make Equal Remuneration Orders (EROs) at its own initiative rather than on application only. Prior to the amendments, the FWC could make EROs only if it made a determination of unequal remuneration for comparable work after application by an employee, union or the Sex Discrimination Commissioner. Two new expert panels within the FWC will tackle low pay in female dominated industries.

The Act has significantly expanded the multi-enterprise bargaining system. Among other changes, employees and trade unions will, with certain exceptions, have greater power to force employers to bargain for agreements covering multiple employers. The Act also brings new streams of multi-enterprise bargaining and changes to how the FWC deals with bargaining disputes and when protected industrial action can be taken.

Employer implications

The new framework will be implemented gradually, as some provisions took effect immediately upon Royal Assent and others will take effect at a later date. Employers should familiarize themselves with the changes and ensure they are ready to comply when required.

Contacts

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Jackie Downham

Senior Director, Retirement

email Email phone +61 2 9285 4000

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