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How will the Secure Jobs, Better Pay reforms affect your business?

The Federal Governments’ Secure Jobs, Better Pay Bill passed Federal Parliament this week, enacting significant reforms to the Fair Work Act 2009 (Cth) (FW Act). These reforms come hot on the heels of the Respect@Work Act.

Secure Jobs, Better Pay amends the FW Act, changing existing rules and adding a range of new laws. These changes range from pay secrecy to enterprise bargaining.

Many of the changes are coming into effect immediately and affect all employers. 

Pay secrecy, job ads and flexible work

As of 7 December 2022, employers can’t prohibit pay secrecy in employment contracts. Employees now have a legislated right to share (or not share) information about their salary and the employment terms and conditions needed to work out their pay, for example, their work hours.

From 7 June 2023, pay secrecy terms in employment contracts or other written agreements entered into on or after 7 December 2022 are prohibited. Including a pay secrecy clause after this date will attract penalties from Fair Work Australia.

The new Bill also affects job advertising. Effective as of 7 January 2023, it’s a penalty-incurring offence to advertise employment at a rate of pay that breaches the FW Act. Effectively, job ads can’t include pay rates or workplace conditions that undercut minimum entitlements.

Fixed-term contracts have also been significantly affected by the changes. From 6 December 2023, employers can’t employ an employee on a fixed-term contract for more than two years (including extensions), can be extended more than once or is a new contract similar to the employee’s previous position.

Additionally, employers will need to give new fixed-contract employees a Fixed Term Contract Information Statement, which will be available on the Fair Work Website.

Some exceptions will apply.

Gender equality measures and small claims process

The Bill addresses recommendations from the Respect@Work report; above the recommendations in the Respect at Work Bill. 

The Secure Jobs, Better Pay Bill amends the FW Act to expressly protect gender identity, intersex status, and breastfeeding against workplace discrimination. This change flows through to FW Act provisions dealing with discriminatory terms in agreements and awards.

The reform also enhances the small claims process, increasing the monetary cap for recovering unpaid entitlements from $20,000 to $100,000.

Enterprise agreements and enterprise bargaining

The Secure Jobs, Better Pay Act significantly changes enterprise agreements and bargaining. The Act reduces obstacles to multi-enterprise bargaining, changes approval processes for enterprise agreements, and expands the Fair Work Commission’s (FWC) powers to resolve disputes.

The Act opens the doors to bargaining; employers who have bargained with employees have fewer options to resist bargaining for new enterprise agreements.

These include simplifying enterprise agreement approval requirements, including the Better-Off-Overall-Test, and empowering the FWC to assist bargaining parties in overcoming bargaining disputes and reaching agreements.

The most significant changes are to multi-employer bargaining, with more information available soon.

Immediate Action Required

Most businesses will have to implement immediate changes to areas of their workforce or change workforce planning for future employees.

In immediacy, businesses should:

  • Ensure that all new or variations to employment contracts after 7 December 2022 do not contain provisions requiring employees to keep their remuneration secret
  • Ensure the pay rates in current job adverts comply with the Fair Work Act and applicable industrial instruments
  • Assess job advertising procedures to ensure future adverts are compliant
  • Ensure adverts for piecework include the periodic rate of pay
  • Review workforce planning and contract templates
  • Assess required steps to prevent and prohibit sexual harassment in their organisation

For more information and a complete list of the changes to the FW Act, please see the Department of Employment & Workplace Relations.

References: Clayton UtzFair Work OmbudsmanDepartment of Employment & Workplace Relations Factsheets

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