On 27 October 2022 the Albanese Labor government introduced its Secure Jobs, Better Pay Bill into the House of Representatives for its second reading.

If the legislation is passed, these will be the most significant changes to Industrial Relations in Australia since the introduction of the Fair Work Act in 2009.

The Legislation is designed to ease wage stagnation, reduce the gender pay gap and promote job security.

Workplace Relations Minister Tony Burke introduced the Bill by stating “These reforms reflect our vision for a fairer, safer and more inclusive Australia…This bill delivers on the government's commitment to ensure a fairer workplace relations system that provides Australians with job security, gender equity and sustainable wage growth.”

While the Bill is still up for debate, it doesn’t look like we’ll be waiting long for legislation to be passed.

The Senate inquiry into the Bill will report on 17 November 2022, which could feasibly mean the legislation is passed on 1 December 2022.

We summarise the top 8 proposals from the Secure Jobs, Better Pay Bill below:

1. Flexible Work Arrangements

At present, any flexible working arrangement must be agreed upon by the employer and the employee. If the employer doesn’t agree to the employee’s proposal, there is no ‘appeal’ process for the employee.

Under the new legislation, employers would be obliged to make a “genuine effort” to discuss flexible working arrangements with an employee. If the parties are unable to come to an agreement, the matter can be referred to the Fair Work Commission for a conciliation. If the parties cannot agree on a flexible working arrangement at conciliation, the matter may be referred to arbitration where a Commissioner will be able to make a binding decision about the flexible working arrangement.

The purpose of implementing this process is to make flexible working more accessible to women and others with carer responsibilities, which will promote gender equality in the workplace and reduce the pay gap.

2. Fixed term contracts

Another proposal to improve job security in the workplace is limiting the use of fixed term contracts. At present, there are no limitations to fixed term contracts. The new legislation will limit fixed term contracts to 2 years, or two consecutive contracts, whichever is shorter. The purpose of this is to provide employees with long term job security by compelling employers to offer either genuine fixed term arrangements or permanent employment.

3. Changes to Bargaining

While enterprise agreements often benefit employers and employees alike they are underutilised; only 14.7% of employees are covered by an enterprise agreement that is in date.

At present, employers (who are not franchisees) must obtain a declaration from the Minister for Employment and Workplace Relations before they can make an application to the Fair Work Commission to bargain together. This process is drawn out, costly and underutilised.

The new legislation seeks to abolish this process and make bargaining faster and more accessible. The new legislation introduces the ‘supported bargaining stream’ which allows employers with common interests (including their industries, geographical location, or being subject to the same regulatory regime) to come together to negotiate an enterprise agreement, without having to obtain a declaration form the Minister to do so.

This is intended to increase engagement with enterprise bargaining process, which will have the effect of delivering more equitable wages to workers within the same industry.

4. Termination of Zombie Agreements

The Bill proposes to automatically terminate enterprise agreements made prior to the commencement of the Fair Work Act 2009. When these agreements were created, employers were not required to undertake a ‘better off overall test’, meaning these agreements are not up to date with pay and conditions in modern awards.

These enterprise agreements would automatically terminate 12 months after the legislation is passed, allowing employers and employees time to come to a new agreement.

5. Simplifying the Better Off Overall Test

When negotiating a new enterprise agreement employers are required to undertake a ‘better off overall test’. The purpose of this test is to ascertain whether the employees would be better off overall under the agreement or the modern award. Employers must go through the modern award, line by line, and compare this to the proposed enterprise agreement, which is an onerous and time consuming process.

The Bill proposes to remove the ‘better off overall test’, and instead apply a ‘global’ test that looks at the actual workers, the patterns and types of work they are undertaking, and whether the enterprise agreement is truly more beneficial. If the employer and union agree that the proposed enterprise agreement passes the global test, this will be of significant weight to the Fair Work Commission when considering the agreement.

6. Gender Equity

The Albanese government is seeking to make gender equity a central goal of Australian Workplace Laws.

If the legislation is passed, gender equity will be included as an overarching object of the Fair Work Act, in the modern awards objective and in the minimum wages objective.

7. Prohibiting pay secrecy clauses

An initiative aimed at promoting gender equity in the workplace is prohibiting pay secrecy clauses in employment contracts.

At present, many employees are prohibited from disclosing their pay to any third parties. Prohibiting pay secrecy clauses would allow employees to discuss their pay with each other, promoting transparency and putting pressure on employers to ensure men and women are paid equally.

8. Prohibiting sexual harassment in the workplace

At present, there is no express prohibition of sexual harassment under the Fair Work Act. Employees can apply to the Fair Work Commission for Stop Sexual Harassment orders, however there is no avenue through the Fair Work Commission through which employees can obtain compensation.

The new legislation will introduce a new dispute resolution process, which will allow the Fair Work Commission to deal with allegations of sexual harassment through conciliation or mediation, with recourse available including compensation.

The express prohibition of sexual harassment in the workplace will also mean that the Fair Work Ombudsman will have jurisdiction to investigate past and/or ongoing allegations of sexual harassment.

This proposal is reflective of a recommendation from the Respect@Work Report.

Conclusion

The Australian industrial landscape is set to change substantially if or when the proposed Bill passes both House of Parliament. Employers should monitor progress of the legislation and seek advice about the implications of the industrial changes relevant to their workplace.