Major Changes To The Fair Work Act - What You Need To Know

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Published by Preston Law on 06/02/2023

The Federal Governments Fair Work Legislation Amendment (secure Jobs, betters pay) Bill 2022 passed parliament on 2 December 2022. These amendments are some of the most significant changes to Australia’s industrial relations system that we have seen in a very long time.

The proposed amendments will come into effect in several stages, and it is fundamental that you as an employer are aware of your obligations under the new amendment.

There are a few key areas that have been changed:

  • Prohibiting pay secrecy;
  • Job advertisements;
  • Flexible working arrangements; and
  • Fixed-term contracts.

Prohibiting pay secrecy

It is fairly common for employment contracts to contain requirements that employees do not disclose or discuss their salary with their colleagues.

From 7 December 2022, these clauses no longer have any effect. From this date, the Fair Work Act gives existing employees and future employees the right to share or not share information about their pay.

Employees may also share information about their employment terms, such as hours of work or KPIs. These changes give employees the right to ask other employees about this information, but employees are under no obligation to share this information.

In light of these changes, it is crucial that employers review their contracts to ensure that any clauses around pay secrecy are removed and further consider reissuing amended contracts to existing employees with these clauses removed.

Job Advertisements

From 7 January 2023, it is unlawful for an employer to advertise a pay rate that would breach either the Fair Work Act or a Fair Work Instrument, such as an award or enterprise agreement.

This means that job advertisements cannot include a pay rate that is under the minimum entitlements.

Employers may face fines for breaching such provisions and therefore, it is fundamental that employers review any existing job advertisements and ensure that any future advertisements are compliant.

Flexible Working Arrangements

Flexible working arrangements are becoming more common, with employees regularly requesting that flexible arrangements are considered.

From 6 June 2023, employees who are either experiencing domestic violence or a member of their immediate family or household are experiencing family and domestic violence; or are pregnant, are able to request flexible working arrangements from their employer.

Flexible working arrangements may include changes to start and finish times, compressed hours, job sharing, working from home or irregular hours.

An employer must not refuse a request made by an employee until they have:

  • discussed the request properly with the employee;
  • made a genuine effort to accommodate the employee’s circumstances;
  • considered the consequences to the employee if the request is refused; and
  • if the request is refused, the employer must provide a written response to the employee that includes an explanation of the reasonable grounds for refusing the request, how the grounds apply to the request, other changes the employee can make to accommodate the employee, and information about referring the dispute to the Fair Work Commission.

Once the employer and employee have agreed on an arrangement, the employer must confirm any agreed changes in writing within 21 days of the request being made by the employee.

Fixed Term Contracts

Significant changes have also been made to fixed-term contracts that will be enforceable from 6 December 2023. These new changes make if an offence, subject to a few exceptions, for employers to employ an employee on a fixed term contract that is:

  • for two or more years;
  • that allows for the contract to be extended or renewed for a period that exceeds two years;
  • where the contract continues the same or substantially similar employment relationship and work duties as a previous fixed-term contract and:
    • the contract and previous fixed term contract exceed two years in length;
    • the contract or previous fixed term contract contains a right of renewal or extension; or
    • the employee has previously been engaged under two consecutive fixed-term contracts.

Employers will need to review their existing contracts and ensure that they are implementing the above provisions as soon as possible. There are some exceptions that may apply such as if the fixed-term contract is for a training arrangement, or the employee is covered by an award that allows fixed-term contracts in the above circumstances.

From 6 December 2023, employers will have to give employees a Fixed Term Contract Information Statement if they wish to engage them on new fixed-term contracts.

Conclusion

The above changes are substantial and may involve significant changes in your workplace. It is important that you review and understand these changes, and how they apply to you.

We understand that this information can be confusing, and it may be difficult to know what changes you need to make. For more information about the above changes and how we can assist you in implementing them within your workplace, speak to an employment lawyer at Preston Law today. 

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