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The Secure Jobs, Better Pay Act 2022 is now law: How does it affect your business?

By Francine Hoyne-Clancy in Legal Updates Posted December 20, 2022

On 6 December 2022, the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 received royal assent and became the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (SJBP Act).

The provisions of the SJBP Act will commence in stages over the next 12 months. However, some have already commenced on 7 December 2022. It is imperative that businesses are aware of the changes to ensure they implement change where necessary, and ensure their business is well positions to adhere to the new laws.
The provisions that commenced on 7 December 2022 are set out below. Stay tuned for further updates in the coming months, as the rest of the reforms come into force.

Changes affecting ALL employers

Objectives of legislation and awards
The objects of the Fair Work Act 2009 (Cth) (Fair Work Act) now include the promotion of job security and gender equality. The objectives of modern awards will also include the need to improve access to secure work, the need to achieve gender equality in the workplace by ensuring equal remuneration, eliminating gender-based undervaluation of work, and providing workplace conditions that facilitate women’s full economic participation. Similar objectives will be included in the minimum wage objectives in s284 of the Fair Work Act.

Pay Equality and Reducing the “Gender Pay Gap”
The SJBP Act has introduced amendments to the Fair Work Act that aim to address the gender pay gap. Those which are already in effect, as at 7 December 2022, relate to prohibitions on pay secrecy and updates to the provisions relating to Equal Remuneration Orders.

Banning ‘pay secrecy
Previously, employers have been able to require staff – via their employment contracts – to keep their remuneration confidential. The reforms include certain prohibitions on, and invalidation of, pay secrecy clauses in employment contracts – with exposure to liability for civil penalties in the event of non-compliance.

Consequently, employers should urgently review their employment agreement templates so that they don’t issue any new employment contracts that contain pay secrecy clauses. They should also seek advice regarding pay secrecy provisions in existing contracts as any variation to an existing employment contract will render such provisions invalid.

Equal Remuneration Orders
The reforms confer greater flexibility on the Fair Work Commission (Commission) by allowing it to make an Equal Remuneration Order on its own initiative. The amendments to the Fair Work Act also provide guidance on ‘general equality’ considerations the Commission must take into account when considering if there is equal remuneration for work of equal or comparable value.

The SJBP Act makes several changes to the anti-discrimination provisions in the Fair Work Act. This includes inserting the protected attributes “breastfeeding”, “gender identity” and “intersex status” as prohibited grounds of discrimination. These changes bring the Fair Work Act into line with existing Commonwealth anti-discrimination legislation – but serve as a reminder to check your HR policies and training are up to date and list all of the prohibited grounds of discrimination.

In addition, the amendments clarify that “special measures to achieve equality” (being a term that has the purpose of achieving substantive equality for employees who have a particular attribute), is a matter pertaining to the employment relationship and therefore may be included in an enterprise agreement.

Sunsetting of ‘Zombie Agreements’
What is a ‘Zombie Agreement’, you might ask? These are industrial agreements between an employer and employee, entered into before the commencement of the Fair Work Act. Examples are collective agreements, workplace agreements and Australian workplace agreements, made under the (no longer in force) Workplace Relations Act 1996 (Cth) (Workplace Relations Act).

The SJBP Act provides that 12 months post-commencement of the act, Zombie Agreements will automatically terminate (unless an extension has been sought and granted). Extensions must be applied for by employers or employees covered by the agreement in question, or industrial associations entitled to represent such employees. The relevant modern award will apply from the end of the sunset period. Employers will also be required to notify employees in writing of the impending termination.

Employers will need to identify whether they have any operative individual or collective agreements that were made under the Workplace Relations Act (prior to the Fair Work Act coming into operation), or during the ‘bridging period’ under the Fair Work Act between 1 July – 31 December 2009. Once identified, employers will need to assess whether they wish to seek to extend the sunset period, or allow the automatic sunset period to lapse (in which case employees will be covered by a modern award, where there is an applicable one).

Job advertisements
The SJBP Act has been amended to prohibit employers from advertising employment at a rate of pay that would contravene the Fair Work Act or a Fair Work Instrument. This has been enacted to seek to protect migrant workers, who are often the target of job advertisements below minimum rates.

Changes specific to employers with enterprise agreements

Termination of enterprise agreements after nominal expiry date
The SJBP Act narrows the circumstances in which an enterprise agreements that has reached its nominal expiry date can be terminated, by replacing the existing requirement that the Commission be satisfied that it is ‘not contrary to the public interest’. The Commission is now constrained by a range of additional requirements and limits on the exercise of its discretion.

If you are considering making an application to terminate an enterprise agreement after its nominal expiry date is reached, please contact us for specific advice.
Enterprise agreement approval processes (including the BOOT and pre-approval requirements)
There are several proposed changes under this category, but we have set out below only those changes that commenced on 7 December 2022:

Initiating bargaining
The existing position was that bargaining only commences when an employer agrees to bargain or initiates the bargaining, or where a majority support a determination or a scope order is made by the Commission. But the SJBP Act now enables employee bargaining representatives to initiate bargaining for a single enterprise agreement by giving notice to the employer where certain criteria are me. This notification will then trigger the good faith bargaining obligations and compel the employer to commence the bargaining process.

Dealing with errors in enterprise agreements
The reforms simplify the process for correcting any obvious errors, defects or irregularities (including situations where the wrong version is submitted to and approved by the Commission) and give the Commission discretion to vary an enterprise agreement to correct such errors.

But wait, there’s more…
As mentioned above, many of the reforms will come into force over the next 2 – 12 months, with many set to commence in approximately 6 months’ time.
2023 is going to be a busy year in the workplace relations space, with the SJBP Act marking the most extensive industrial relations reforms in more than a decade, and the Respect@Work reforms placing additional responsibilities on employer with respect to the prevention of sexual harassment, sex discrimination and victimisation.

There is no time like the present to start reviewing your contracts, policies and procedures to identify the changes that your business will need to make to comply with the new reforms – although we suspect many businesses won’t have bandwidth to get to work until the new year.

The team at Toop Workplace Law looks forward to working with its clients to achieve compliance and continue to build thriving workforces. We are here to help!

This is general information only, is current as at 20 December 2022 and may not be applicable to your organisation or situation. It is not a substitute for legal advice and it is important that you obtain specific advice. 

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