Legislation passed: huge employment law changes on the way

In this article we summarise the key changes that will be made to employment law over the next year, following the successful passage through Parliament of the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill 2022, the Fair Work Amendment (Paid Family and Domestic Violence Leave) Bill 2022 and the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022.

We also indicate the dates that the changes will come into effect and what steps employers need to take to best prepare for these changes.

Key changes include:

• A positive duty to eliminate sex discrimination and sexual harassment in the workplace
• A new offence of subjecting someone to a hostile environment on the grounds of sex
• 10 days paid family and domestic leave for all employees (including casuals)
• Bans on pay secrecy clauses
• A right to discuss pay with colleagues
• Limits on use of fixed-term contracts
• Greater rights for employees regarding flexible working
• Significant changes regarding enterprise agreements and enterprise bargaining (likely only to impact employees who have an enterprise agreement in place, enter into an enterprise agreement in the future or who operate in an industry with a union presence)

Respect at Work Bill

The Respect at Work legislation introduces two key changes to the law:

Positive duty to eliminate sexual harassment and discrimination

The new legislation places a positive duty on employers to implement measures to eliminate, as far as possible, sex discrimination and sexual harassment.

This duty will not be enforceable until 12 months after the Bill receives “royal assent” (ie the date the Bill achieves final approval - likely to be in the next few days - so not before December 2023).

The significance of this change is that whereas the law currently “bites” when there is an incident of sexual harassment in the workplace (and holds employers liable if it is found that they did not do all they reasonable could to prevent it from occuring), under these new duties, an employer will have breached their duty (and can be subject to financial penalties) even if no sexual harassment has occurred.

Regulators will be able to assess whether the employer is currently taking active steps to eliminate any potential sexual harassment and discrimination in the workforce, even before an incident has occurred.

It will therefore be imperative that an employer can show that they are regularly taking active steps to prevent against harassment and discrimination (see “to do” list below).

Prohibition on subjecting others to hostile workplace environments on the grounds of sex 

Another key change is that there will be a new prohibition on subjecting others to hostile workplace environments on the grounds of sex.

Whereas previously unlawful sexual harrassment had to be directed towards someone (inappropriate comments about someone’s appearance, non-consensual touching of a person, etc) the new offence will apply even if behaviour is not directed at a specific person.

For example, offensive material displayed at the workplace or general office banter or chat that is found to be hostile, could fall foul of this provision.

To do: we would recommend that all employers consider doing the following:

• Update policies and procedures for dealing with sexual harassment (including complaint processes, etc)
• Implement a risk- based approach to sexual harassment (eg regularly consider whether particular work practices or events contain the risk of sexual harassment and have records of measures taken to control the risks)
• Carry out regular training for staff and managers on appropriate behaviour, how to deal with complaints, etc
• Carry out and keep records of periodic audits of your systems and process in this area to show that they are working satisfactorily

Our team will be working to develop further materials and resources to assist with these matters available shortly.

Paid family and domestic violence leave

10 days paid family and domestic violence leave will be introduced for all employees (including casuals) from 1 February 2023 (for non-small businesses) and from 1 August 2023 (for small-businesses of less than 15 employees).

The 10 days paid leave will be available in full each year, it does not accrue or carry over from year to year.

When an employee takes this leave, it should not be referenced as as family and domestic violence leave in payslips - more regulations are to follow to give greater guidance on this.

To do: update policies, procedures and contracts as necessary. We will have updated documents available to assist with this shortly.

Fair Work Act (Secure Jobs, Better Pay)

 As noted above, the new legislation introduces a whole raft of new changes including:

• Bans on pay secrecy clauses
• A right to discuss pay with other colleagues
• Limits on use of fixed-term contracts
• Greater rights for employees regarding flexible working
• Significant changes regarding enterprise agreements and enterprise bargaining

As the changes to enterprise agreements and enterprise bargaining are likely only to impact employees who have an enterprise agreement in place, enter into one in the future or who operate in an industry with a union presence, they are unlikely to have a significant impact on the hair and beauty industry. Please contact us if you require further information.

We deal with each of the other changes below in further detail:

Pay secrecy clauses 

 Effective immediately from the date of royal assent (ie in the next few days) pay secrecy clauses can no longer be introduced into new employment contracts.

Employees also will now have a positive right to choose to disclose (or to choose not to disclose) information about their remuneration to any other person as a workplace right.

Given it is a workplace right employees will be protected from being adversely treated in relation to their exercise of this right. For example, you could not now dismiss someone for discussing their pay with a colleague.

For any contracts with existing pay secrecy clauses, these will remain valid until the contract is varied. Given that contracts are technically varied whenever an employee receives any form of pay rise, such a clause will fall away at this point.

From June 2023 employers can receive a financial penalty for entering into a contract with a pay secrecy clause (of up to $63,000).

To do: review contracts and policies for offending provisions and amend as necessary.

Gender equality

 The objects of the FWA and modern awards will be amended immediately from royal assent to include an objective of greater gender equality in the workplace. This means that any decisions the Fair Work Commission (‘FWC’) makes (including in relation to minimum wages, etc) will have gender equality at the heart.

The FWC will also now have greater powers to make Equal Remuneration Orders to increase wages across whole industries where the FWC considers workers in industries with a large proportion of women (or men) are underpaid compared to work of comparable value in another industry with greater numbers of the opposite sex.

This power has only been used once before to increase wages for certain employees covered by the SCHADS Award (which typically covers more women than men, and was found to have lower wages than in industries involving work of comparable value where more men than women were employed). However the door could now be open to further orders.

Key Takeaway: we may see more orders to increase wages in low paid industries with high proportions of female workers eg aged care, childcare, health, etc.

Anti-discrimination 

Some minor changes will be made to align the Fair Work Act 2009 (Cth) (‘FW Act’) with other anti-discrimination legislation by including protections against discrimination on the basis of breastfeeding, gender identity and intersex status as protected attributes.

To do: review policies to ensure they reflect all protected characteristics. We will have updated documents to assist with this available shortly.

Sexual harassment 

 A new ability for employees to bring claims in the FWC for sexual harassment is being introduced. Currently employees have to bring claims in state/territory tribunals, in courts or in the Australian Rights Commission. Often the process is long-winded and expensive.

Previously employees could only bring a claim for a “stop” order, to prevent ongoing harassment in the FWC. Going forward employees will be able to bring a claim for previous sexual harassment, including claims for damages.

Pursuing this matter through the FWC will be a more simple claims process (like unfair dismissal and general protections claims) and the general rule is that each party will pay their own legal costs.

A claim for sexual harassment will be able to be brought by an employee (or prospective employee) against employers and work colleagues as well as against third parties such as a customer, client or member of the public, so long as there is some connection at the time the conduct occurs to the employee performing work.

These changes will take effect in March 2023.

Key Takeaway: a more simple claims process could lead to an increase in claims numbers, make sure that processes and policies for dealing with and eliminating sexual harassment are fit for purpose (see further comments above).

Job security

A new objective will be introduced into the FW Act and modern awards to ensure job security is at the heart of all of the FWC decisions including in how modern awards are drafted.

Limitations on fixed-term contracts 

From December 2023 employers cannot:

• Use one or more fixed-term contract for a period totalling more than 2 years
• Use more than two successive fixed-term contracts (ie can only renew once)

There will be limited exceptions including:

• Employees who are engaged to perform a distinct and identifiable task involving specialised skills;
• Employees who are engaged by way of a training arrangement (eg apprenticeship)
• Employees who earn more than the high income threshold ($162,000 p.a.)
• The contract is wholly or partly funded by government funding (or a type of funding allowed by the regulations) and the funding is for a period of more than two years and there are no reasonable prospects that the funding will be renewed after that period.

The use of fixed-term contracts simply as a method to move on difficult employees quickly (as a quasi-probationary period) or as a substitute for ongoing employment will no longer be possible.

Employers must provide employees with a Fixed Term Contract Information Statement.

To do: if your business uses fixed term contracts it will be important to review practices to ensure that you will be compliant with the new rules and/or to consider other models of engaging staff.

 Flexible work requests and request to extend unpaid parental leave

Key take-away: more detailed requirements will exist for employers when responding to flexible-working requests, employees will now have ability to challenge refusal to agree to flexible-working requests in the FWC. Similar provisions will be introduced in respect of a request to extend periods of unpaid parental leave.

Currently, employees with at least 12 months service have rights to request flexible working arrangements (eg flexibility with hours, working from home, etc) if they satisfy certain criteria eg caring responsibilities, etc.

From June 2023 employees will be able to request flexible work arrangements in a wider range of circumstances, including on the grounds of family and domestic violence.

The steps an employer will have to take once a request has been received will now be much more onerous:

• Employers must first discuss the request with the employee and genuinely try to reach agreement on the request (including informing the employee of alternative arrangements that the employer is willing to make which may accommodate).

• Employers must give the employee a written response to the request within 21 days.

• Employers can only refuse on reasonable business grounds.

• Employers who refuse a request must in their written response to their employee:

a. explain the reasons for the refusal including the reasonable business grounds being relied on;

b. state any alternative arrangement (other than those requested) that the employee would be willing to accommodate or state that no such changes exist; and

c. explain that an employee has a right under the FW Act to challenge the refusal.

At the moment, an employee cannot challenge an employer’s refusal to agree to a flexible work request (so long as the employer has followed the correct process). Going forward an employee will have a right to apply to the FWC to challenge a refusal, and the FWC will have powers to order the employer to accommodate it.

Similar provisions will be introduced re: dealing with requests for an extension of unpaid parental leave (ie for a period of longer than 12 months). Employees will be able to challenge a refusal to accept a request in the FWC.

To do: ensure policies and procedures for dealing with flexible working requests and unpaid parental leave are updated to reflect new changes. We will have resources available to assist with this shortly.

Advertising for jobs with rates below those contained in a modern award or enterprise agreement prohibited

 Effective immediately from royal assent, a new offence will be created of advertising for a job and including pay rates in the advert which are below those required by a modern award or enterprise agreement. This only applies where pay rates are mentioned in the job advert.

Expansion of small claims process

The small claims process is a cheap and informal way for employees to bring underpayment claims at court. The current cap on the value of a small claim is $20,000. Changes to the FW Act increases the cap to $100,000 per claim. This change is effective immediately on royal assent.

Even more changes to come in 2023…

Further changes are likely to come next year including those dealing with:

• gig workers and independent contracting;
• the characterisation of who constitutes a casual employee;
• ‘same job same pay’ and labour-hire regulation
• further criminalisation of wage theft.

If you require any further information, please refer to The Fairwork Ombudsman for more information.

ABIC Clinic Members - please contact your HR Advisory Team who will be able to assist you further, or contact our ABIC Facilitators on 1800MYABIC (1800 692 242).

ABIC HR Advisory Specialist