Secure Jobs, Better Pay Bill

Earlier this month, the ‘Secure Jobs, Better Pay’ bill (‘the Bill’) passed the lower house and proposes a number of landmark changes to the nation’s industrial relations laws. The Bill follows many of the suggestions emerging from the Jobs & Skills Summit in September and aims to boost wage growth and work toward gender equality in the workplace. However, there has been contention from the Opposition and independents over some of the proposed changes under the Bill, with the Bill likely to be subjected to several changes before being passed by the Senate. The Bill passed the Senate with 35 votes to 31 on Friday 2 December 2022.

The Key Changes

The Bill proposes a series of changes to the Fair Work Act 2009 (Cth) (‘Fair Work Act’), Australia’s core workplace law which was first introduced by Kevin Rudd’s Labor Government. Here are some of the key changes:

Changes to enterprise bargaining

Enterprise bargaining describes the negotiation and approval process that employers undergo when drafting enterprise agreements, which act as an alternative to the relevant Modern Award and detail the pay and conditions for each category of staff employed. Enterprise bargaining has been on the decline over the last decade, triggering the Labor Government to propose new alternatives in the name of wage growth.

The most contentious component of the Bill is the introduction of non-voluntary multi-enterprise bargaining. This change aims to shift the focus away from enterprise level bargaining and toward industry level bargaining. When the Bill passed the lower house, it allowed for businesses with over 15 employees to be non-voluntarily compelled into multi-employer enterprise bargaining. However, there was great contention over this section of the Bill, with many arguing that the threshold for small businesses should be raised.

Recent negotiations between the Labor government and Independent ACT Senator, David Pocock, have amended this section so that businesses with 20 employees or fewer cannot be compelled into multi-employer agreements. In addition to this, further safeguards have been added so that it will be more difficult for businesses with 50 or fewer employees to be compelled into multi-enterprise bargaining, with an onus on unions to show cause as to why such businesses should be forced into multi-enterprise bargaining.

There are also proposed changes to the ‘Better Off Overall Test’, also known as the ‘BOOT’. The BOOT is the current threshold for approving enterprise agreements and requires agreements to be better off overall than the relevant industry’s Modern Award. The Bill would allow the Fair Work Commission (‘FWC’) to streamline the process. While all current employees must be deemed “better off overall,” the amendment ensures that agreements won’t be getting held up by hypothetical scenarios for potential future employees.

Other significant changes

• Limiting the use of fixed term contracts in a bid to encourage more secure and permanent employment. The Bill will prohibit fixed term contracts that span for a period of two years or more and ones that can be extended more than once.

• Restricting pay secrecy as a means to even out wage inequality. Employers have benefitted from preventing their workers from disclosing any individual pay increases so as to avoid other workers asking for higher pay. However, pay secrecy can often lead to wage inequality and contributes to entrenching race and gender wage disparity.

• Introduction of positive duties against workplace sexual harassment. A number of changes from the Respect@Work Report are being implemented in order to improve workplace environments. See our October Edition Vision Article for these changes explained in greater detail.

• Abolishing Zombie Agreements. Zombie Agreements describe enterprise agreements that have passed their expiry date but remain legally valid as they were passed in a bridging period just prior to the passing of the Fair Work Act. These agreements usually contain archaic pay rates and conditions that are well below what is currently accepted under Modern Awards, hence many workers will benefit from such agreements being ceased.

• Flexible working arrangements will be enshrined into legislation for certain circumstances; including mechanisms to support workers affected by family and domestic violence, and a requirement for employers to provide their employees with reasons if they decide to refuse a flexible work arrangement.

• The Bill controversially abolishes the Australian Building and Construction Commission (ABCC), a statutory authority tasked with promoting and enforcing appropriate workplace relations within the building and construction industry. The Albanese Government argues that the funding of the ABCC is a waste of taxpayer money.

The Takeaway

Given the extensive list of changes proposed by the Bill, employers will have a great deal to consider in ensuring their workplace policies align with the imminent new legislation. If you have any questions arising from these proposed changes, either as an employee or employer, please do not hesitate to contact Nick Stevens, Peter Hindeleh, Daphne Klianis or Josh Hoggett, who can provide professional legal advice to ensure your business meets the impending new requirements and restrictions to be instituted by the Bill.