On 6 December 2022 the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 received Royal Assent, introducing significant legislative amendments. The key changes are summarised below.
Limitations on fixed term contracts
From 6 December 2023, there have been new limitations on the use of fixed term contracts, limiting an employer’s ability to offer fixed term contracts, and resulting in the automatic conversion of employees from fixed term contracts to permanent contracts in certain circumstances.
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, and where any of the following applies:
-
- the total period of the contracts is more than two years;
- the new contract can be renewed or extended;
- the previous contract was extended; or
- the previous contract had come into effect after another fixed term contract and was for the same or substantially similar work and there was substantial continuity of the employment relationship (i.e. there has already been two consecutive fixed term contracts).
There are some exceptions, for example if an employee’s earnings under the contract are above the high-income threshold.
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.
The new limitations do not apply to casual employees.
The amendments empower the Fair Work Commission to resolve disputes about fixed term contracts via conciliation, mediation or consent arbitration.
It is essential that employers understand and comply with these changes. Failing to do so is a breach of the Fair Work Act 2009 (Cth) (FWA) and can result in the term of the contract that provides for termination at the end of an identifiable period being of no effect.
This exposes the employer to the risk of claims for unfair dismissal, breach of contract and/or redundancy pay or payment in lieu of notice upon an employer seeking to terminate the contract at the end of the fixed term.
Equal Remuneration Orders (EROs)
Since 7 December 2022 gender equality and job security have been included as statutory objectives of the FWA. That means that every provision of the FWA must be interpreted consistently with the purpose of gender equality and job security.
The Fair Work Commission (FWC) can now make EROs which require employees to be given equal remuneration for work of equal or comparable value.
An application for an ERO can be made by an affected employee, their union or the Sex Discrimination Commissioner. The FWC can also make an ERO of its own initiative.
EROs operate prospectively, to ensure equal remuneration going forward from the date of the order and the FWC does not compensate employees retrospectively: Sabbatini v Peter Rowland Group Pty Ltd [2023] FWCFB 127.
Two new expert panels have been established for pay equity and for the care and community sector. These expert panels can make determinations and decide on EROs.
Pay secrecy — penalties commenced
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. Since 7 December 2022 employees have had the right to disclose or not disclose their remuneration and employers cannot exercise adverse action against employees who exercise this right.
Employees can also disclose the terms and conditions of their employment as reasonably necessary to determine their remuneration outcomes (e.g. working hours).
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.
Penalties for breaching the pay secrecy prohibitions commenced from 7 June 2023.
Anti-discrimination provisions
Since 7 December 2022, three new protected attributes were added to the existing protected attributes under the FWA. These are:
- 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.
Request for flexible working arrangements
The Government has introduced measures for greater entitlements to flexible work arrangements. Since 6 June 2023, employers have been required to provide a response to an employee’s request for a flexible working arrangement within 21 days. Employers cannot refuse the request unless it has been discussed and the refusal is on reasonable business grounds. Employers must also explain the grounds for the refusal in a written response and where no agreement is reached, the FWC can deal with the dispute.
The additional new grounds to request a flexible working arrangement now include pregnancy and family or domestic violence.
Respect at Work
Workplace sexual harassment has been prohibited under the FWA 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 FWA 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/expressing opinions. 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.
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.
MDC Legal is a specialist employment law firm providing advice on all aspects of employment law, including understanding and compliance with the Closing Loopholes amendments.
Get in touch with one of our lawyers today for assistance with understanding these new changes.
Part 3 our employment law update covers the key amendments under the Fair Work Legislation Amendment (Protecting Worker Entitlements) Act 2023 (Cth).
