The Fair Work Amendment (Secure Jobs, Better Pay) Bill 2022 was passed on December 2. The Bill represents the most substantial set of amendments ever made to the Fair Work Act 2009 (Cth) (FW Act). There is so much detail in the amendments made by the Bill it is almost impossible to cover everything in this article, but we explain below the changes that are most likely to impact on the retail industry.

A. Objects of the Act

The amendments insert two new objects in the FW Act – gender equity and job security. The two matters will be added to the Modern Awards Objective, which guides how the Fair Work Commission (FWC) decides on Modern Award variation applications. We may see unions applying to vary Modern Awards relevant to the retail industry based on these two new objects.

B. Enterprise bargaining 

The enterprise bargaining area will see the most substantial set of changes. The key areas of change for retailers are:

Better Off Overall Test (BOOT)

The BOOT is likely to be applied in a much more practical way. The FWC will be directed to take an overall, rather than a line-by-line, approach to the BOOT assessment. Additionally, the FWC will be required to only look at the way the business operates (roster patterns etc) rather than applying hypothetical situations in carrying out the BOOT. This is likely to result in more agreements being made in the retail industry and a simpler approval process. The challenge will be in the way the FWC applies the changes. A last-minute amendment agreed with the Greens means that the requirement to consider the prospective employees (referred to as reasonably foreseeable employees) has been retained, and it will be interesting to see how the FWC applies this new test. To protect employees, the amendments provide the opportunity for an employee (or union on their behalf) or the employer to apply for a reassessment of an approved agreement if there is a change in the patterns or kinds of work from when the agreement was originally assessed.

Procedural requirements

Currently, there is a raft of procedural requirements that must be met for an agreement to be approved. The amendments largely remove those requirements and replaces them with a fundamental requirement that employees have genuinely agreed to the agreement. The FWC will publish a Statement of Principles that will guide this.

Industry bargaining

The amendments provide two avenues for multi-employer bargaining – the supported bargaining stream and the single interest stream. Both streams have the potential to impact retailers, most significantly in the context of potentially being dragged involuntarily into a single-interest bargaining process. While it is noted that small business employers (fewer than 20 employees) cannot be forced into a single interest process, the potential for a group of retailers to be forced to participate in a bargaining process, potentially based on their geographic location or simply because they are retailers, is very real. There is also a very real risk of retailers who are not part of an initial bargaining process being forced to become a party to the agreement later without their consent. There are safeguards in the legislation for employers with between 20 and 50 employees empowering them to exit single-interest processes. At the time of writing, the detail of this was unknown.

Zombie agreements

Agreements entered under predecessor legislation to the FW Act will automatically expire 12 months after the amendments commence unless the FWC allows an extension of this period.

C. Fixed/maximum term contracts

The amendments propose to substantially limit the use of fixed and maximum term contracts, prohibiting such contracts from extending beyond two years and allowing them only to be renewed once. If an employee is on such a contract that runs for two years this cannot be extended. If an employee is on such a contract for one year it can be extended once only, and for a maximum of one year. There are some limited exceptions to this, including for high-income earners, employees who are replacing temporarily absent employees (including those on parental leave and who are suffering an illness or injury) and some limited instances where roles are subject to government funding.

D. Pay secrecy

The amendments give employees the right to disclose their remuneration (including terms and conditions that are reasonably necessary to determine remuneration) and to ask others about their remuneration. Contract clauses that require confidentiality of remuneration will be of no effect, and employers will be at risk of civil penalties if they enter contracts with such a clause after the provisions commence. The right to pay secrecy will be listed as a workplace right, and an employer who takes adverse action against an employee because of this right will be exposed to General Protections claims.

E. Flexible Work Arrangements

The amendments will impose additional procedural requirements on employers who receive requests from employees for flexible work arrangements. Also, persons experiencing or assisting a family or household member experiencing, family or domestic violence will be added to the existing circumstances in which an employee is entitled to make a flexible work request. Employers will be required to:

1. Discuss the request with the employee.
2. Genuinely try to reach agreement.
3. Inform the employee of alternative working arrangements they would be willing to implement.
4. Provide details of the business grounds they are relying on if rejecting a request.
5. The amendments will also empower the FWC to deal with disputes about flexible work requests, including via arbitration (although the dispute must first be the subject of conciliation).

F. Prohibition of sexual harassment

The amendments:

1. Prohibit the sexual harassment of workers (which is broader than employees and covers contractors etc).
2. Make employers and principals vicariously liable for the conduct of employees or agents.
3. Give the FWC power to deal with sexual harassment disputes, including by issuing stop sexual harassment orders and awarding compensation.

Summary

The amendments made by the Bill are expected to come into effect with minimal changes to those that have already been agreed. Those changes are very substantial, and retailers need to ensure they understand and can respond to them to ensure they are compliant and protected.

Next year will be a big year of changes in the Industrial Relations space. Somewhat lost in all the talk about this Bill, another critical piece of legislation was passed on 28 November 2022. The Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill 2022 makes several changes to anti-discrimination legislation, including imposing a positive obligation on employers to take all reasonable steps to prevent conduct that amounts to sex discrimination, sexual harassment and subjecting a person to a hostile work environment or victimisation.

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