Changes to workplace laws – what it means for your business

You would have heard about the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill and the sweeping changes to workplace relations coming with it.

In a recently published article we discussed some of these changes and what they will mean from a legal perspective. But how will it all work in practice? And who will it impact?

The Pragma Lawyers employment law team unpack the most important changes, what they actually mean for your business and what your HR team should be doing now to prepare.

1.       In some circumstances, you will not be allowed to use fixed term contracts

Fixed or maximum terms contracts are contracts which come to an end at specified time. They are often used by employers as a way of letting staff go by ‘not renewing’ their contract.

Under the proposed new laws, it will be unlawful to use fixed term contracts for the same role for more than 2 years or two consecutive fixed contracts. Where fixed term contracts are used in this way, the employees on the contracts will be deemed permanent and the contracts will be unenforceable.

This will mean that employers can no longer rely on rolling fixed term contracts as a way of limiting an employee’s tenure. The practical effect of this will be that the impacted employee will be deemed permanent and can sue for unfair dismissal. Substantial penalties may be imposed against employers for breaching the Fair Work Act 2009 (Cth) (FW Act) if fixed term contracts are used unlawfully.

What should your business do?

Review your employee contracts. Are any employees on fixed term contracts which keep being renewed?. If an exemption does not apply and rolling fixed term contracts are being used, you will need to transition impacted employees to permanent contracts. Remember your obligations to consult and seek advice on the process before making major changes. Employees must agree to variations to their contracts.

2.       Your obligations to protect employees from sexual harassment and discrimination are changing and will require proactive steps

Under the proposed laws, it will be unlawful to discriminate against employees because of breastfeeding, gender identity and intersex status (in addition to the existing grounds).

Changes to sexual harassment laws mean that if your clients or customers sexually harass your staff, you may be liable as the employer.

What should your business do?

You should update your workplace policies to ensure that breastfeeding, gender identity and intersex status are specifically referred to as being protected attributes.

If you have staff who are breastfeeding, gender diverse or intersex, your business must ensure they are supported to avoid direct or indirect discrimination. This is in addition to your obligations to protect all staff from discrimination on the existing grounds (including race, sex, marital status, pregnancy, caring responsibilities etc).

Your policies must be amended so they extend to protecting staff from harassment from clients and customers. In addition to updating your policies, you should take proactive steps which may include a sexual harassment prevention plan for your workplace.

3.       If you receive a request for a flexible work arrangement (FWA), you will need to respond in a certain way with 21 days

The proposed laws allow employees who are experiencing domestic violence a statutory right to request a FWA. This is in addition to the other reasons an employee may seek a FWA, including having caring responsibilities, being over 55 or having a disability. There will also be increased obligations on employers to consider the response and respond, in detail and in writing, within 21 days.

What should your business do?

Your HR team should review your process for responding to FWA requests. You will need to discuss the request, genuinely try to reach agreement, provide alternative arrangements where available and provide detailed reasons when refusing a FWA request. These reasons must be linked to reasonable business grounds and clearly expressed as such.

A template response letter should be prepared outlining the considerations which will be addressed with each FWA request. These considerations will include operational factors such as the impact of the change on other staff, productivity, costs and customer service. Written responses must be provided within 21 days or employees may take the employer through an arbitration process. For this reason, each FWA request must be considered promptly and thoroughly.

4.       You may not be able to prevent your employees from discussing their remuneration with their colleagues

If the changes to the FW Act are passed, disciplining an employee for discussing their pay will become unlawful. This will mean that you cannot require employees to keep their remuneration confidential.

What should your business do?

Remuneration is generally a confidential term of an employment contract, which employees were forbidden from discussing with their colleagues. If employees are allowed to discuss these conditions, and consistency amongst employees performing the same job with the same level of experience is not maintained, employees will become disgruntled.

Employers should ensure that all promotion and pay increases are supported by valid and demonstrable performance-based criteria.  If the changes become law in their current form, it may be necessary to review your employment contracts to ensure they do not contain unlawful ‘pay secrecy’ clauses.

5.       If you are involved in enterprise bargaining or have an enterprise agreement in place, you should prepare for a change in process.

The criteria for passing enterprise agreement is set to change, as will the process. This will impact employers who engage in enterprise bargaining or have an EA in place. As the Bill was originally drafted, there was a possibility that employers in some sectors could be drawn into bargaining with other businesses.

What should your business do?

EAs should be reviewed as part of broader review of your business’ industrial strategy. The Government is amending these aspects of the Bill currently. Businesses should keep a close eye on the changes as amendments are likely.

Get in touch

The Government wants the Bill passed by early 2023.  Consultation with industry is ongoing and amendments to the Bill are likely. The guidance in this article is based on the Bill in its current form.

The Pragma Lawyers employment team are assisting businesses to take the steps necessary to prepare for the changes, which are the most substantial since the FW Act commenced in 2009.

Get in contact here. 

The comments in this article are general in nature and based on the Bill as at the date of this article. This article does not constitute legal advice. Pragma Lawyers recommends employers obtain specific advice on their business’ circumstances.