Secure Jobs, Better Pay Bill – Changes to the Fair Work Act

19 December 2022

On 2 December 2022, the Australian Federal Government led by Anthony Albanese passed the Fair Work Amendment (Secure Jobs, Better Pay) Bill 2022 (“the Bill”) that fundamentally re-set the balance of power in the nation’s workplace.

What will change under these new laws?

The Bill makes several significant changes to the Fair Work Act (FWA), including:

  • three streams of multi-employer bargaining;
  • the ability for the Fair Work Commission (FWC) to arbitrate disputes about flexible working arrangements and parental leave;
  • the outlawing of pay secrecy clauses;
  • the outlawing of fixed-term contracts for periods of longer than two years (except in exceptional circumstances);
  • modifications to the Better Off Overall Test that may (or may not) make it easier for enterprise agreements to be approved.
  • prohibition of the advertisement of jobs lower than the minimum rate of pay.
  • extension of anti-discrimination protections.
  • prohibition of sexual harassment in the workplace
  • modifications to the test for terminating enterprise agreements after nominal expiry.

The new reforms will be implemented over the next 12 months, however here’s what you need to know about what was implemented as of 7 December 2022 and what will be implemented on 7 January 2023.

Prohibition of Pay Secrecy Laws

The reforms have introduced new rights in regard to conditions of employment and rates of pay.

Employees now have the right to ask another employee about their rates of pay, and they also have the right to disclose or not to disclose their rates of pay or pay-related conditions. This newly constitutes as a workplace right under the reforms.

Furthermore, it is now unlawful to include any clauses prohibiting persons from discussing their pay in contracts of employment or industrial instruments.

Existing contracts with pay secrecy clauses are not subject to the prohibitions on pay secrecy, however, once an existing contract is varied, it must comply with the new pay secrecy ban provisions. For existing contracts of employment that do not contain pay secrecy clauses, the new pay secrecy provisions apply straight away.

In June 2023, it will become an offence for an employer to enter into a contract with an employee that contains a pay secrecy clause. The penalty is up to $63,000 for an employer.

Expanded Anti-Discrimination Protections

The reforms have added three new forms of discrimination to the existing protections against discrimination in the Fair Work Act, to cover breastfeeding, gender identity and intersex status.

In particular, this means that the general protection provision, which makes it unlawful for an employer to terminate or take adverse action against an employee or prospective employee because they have a protected attribute (race, sex, age, marital status, pregnancy, religion, political opinion etc), now also covers breastfeeding, gender identity and intersex status.

Terminating Enterprise Agreements After Nominal Expiry

Previously, employers have increasingly sought to use the ability to terminate enterprise agreements (EAs) after passing the nominal expiry date, and without employee agreement, as leverage in protracted bargaining disputes with the unions.

Agreements will continue to operate after their nominal expiry dates until they are replaced or terminated by the FWC.

Under the reforms, EAs will only be able to be terminated without employee agreement where they have passed their nominal expiry date and fall into one of the following categories:

  1. the FWC is satisfied that the continued operation of the EA would be unfair for the employees covered by the EA.
  • the FWC is satisfied that the EA does not, and is not likely to, cover any employees.
  • or – all of the following apply:
    • the FWC is satisfied that the continuing operation of the EA would pose a significant threat to the viability of a business carried on by the employer or employers covered by the agreement; and
    • the FWC is satisfied that the termination of the EA would be likely to reduce the potential of termination of employment by reason of redundancy, insolvency or bankruptcy of the employer (for employees covered by the agreement); and
    • if the agreement contains terms providing entitlements relating to the termination of employment – each employer covered by the agreement has given the FWC a guarantee of termination entitlements in relation to the termination of the agreement.

A guarantee of termination entitlements in relation to the termination of EA must be given for the earlier of the following periods:

  • four years; or
  • a shorter period the FWC may determine if appropriate; or
  • until the employees become covered by another EA that covers the same or substantially the same group of employees.

These provisions will apply to all new and existing termination applications, provided that in relation to existing termination applications the FWC has not yet terminated (or refused to terminate) a particular EA.

Advertisement of Jobs Lower than the Minimum Rate of Pay

The Bill proposes to make it an offence for an employer to advertise an employment with a rate of pay that contravenes the Fair Work Act or a Fair Work instrument such as a modern award or enterprise agreement.

This does not require affected employers to specify the actual rate of pay in their advertisement of the role. The prohibition will only apply if the employer opts to specify a rate of pay in their advertising.

Timeline for all Reforms

Secure Jobs, Better Pay Bill - Changes to the Fair Work Act -

If you would like more information in regard to the Secure Jobs, Better Pay Bill, please contact Martina via the link below.