Published 5 June 2023
This article is a follow-up to our Legislation Update published on 2 March 2023 after the legislative changes under the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth), amending the Fair Work Act 2009 (Cth) (FW Act). Employers should note the date of 6 June 2023, which is a key date for the implementation of a certain number of changes under the new legislation relating to:
- Unpaid parental leave;
- Flexible working arrangements;
- ‘Zombie’ agreements; and
- Enterprise bargaining and multi-enterprise agreements.
Further changes relating to pay secrecy clauses and the small claims process will also be implemented shortly.
Unpaid Parental Leave
The current law provides that employees who have taken 12 months of unpaid parental leave can request their employer to agree to an extension of unpaid parental leave for a further period of up to 12 months. The employer must respond to the request:
- in writing;
- within 21 days after the request is made;
- by stating whether the request is granted or refused – it can only be refused on reasonable business grounds and must include details of the reasons for the refusal.
From 6 June 2023, the FW Act will include a new section 76A outlining the requirements and procedures for employers when responding to such requests. The Employer will only be able to refuse the request after discussing it with the employee, genuinely attempting to reach an agreement, considering the consequences, and having reasonable business grounds for such refusal. The new section lists examples of reasonable business grounds, including cost, the employers’ capacity to accommodate the extension, the impact on efficiency and productivity, or on customer service.
The amendments will also grant the Fair Work Commission (FWC) the authority to address the dispute arising from an employer’s refusal to extend unpaid parental leave.
Required Step: Employers with parental leave policies should ensure to review their policies and procedures to include these changes.
Flexible Working Arrangement
The current law provides that employees who have completed at least 12 months of continuous service can request a change in their working arrangements if those changes are requested on the grounds that employees:
- are parents or carers;
- have a disability;
- are 55 years or older; or
- are experiencing family violence, or providing care or support to a family member experiencing violence.
A request could be refused in writing by employers on the basis of any ‘reasonable business grounds’. However, the FWC did not have the power to deal with a dispute under this section, which meant that it has been relatively easy for employers to deny requests without legal consequences, as employees were required to bring an application to the court.
From 6 June 2023, the new section 65A of the FW Act will impose further requirements on the employer’s response to the employee’s request for flexible working arrangements, including:
- discussing the request for flexible work;
- genuinely trying to reach an agreement with the employee;
- if the employer intends to refuse the request, specify the reasonable business grounds for the refusal. The Act will also provide examples of reasonable business grounds that can justify refusing a request for flexible working arrangements.
The FWC will now have the power to deal with the dispute arising from a refusal to grant a flexible working arrangement request, including by arbitration.
Required Step: Employers with policies and procedures relating to flexible working arrangements should review their policies to implement those changes.
Zombie Agreement
All ‘Zombie’ agreements (that is agreements still in operation made before the commencement of the FW Act) will automatically ‘sunset’ on 7 December 2023.
On or before 6 June 2023, employers who have employees covered by these agreements must notify those employees, in writing, that the agreement will be terminating on 7 December 2023 unless an application for extension is made to the Commission. Applications can be made to the FWC to extend a ‘Zombie’ agreement for up to 4 years, on a number of grounds, including:
- that the employees would be ‘better off overall’ under the ‘zombie agreement’ compared to the applicable modern award; or
- that bargaining had commenced for a new agreement.
This application can be made any time up to 6 December 2023 (the day before the sunsetting of the agreement). However, notice must be provided by 6 June 2023.
Required Step: Notify employees covered by a ‘Zombie’ agreement whether the employer will apply for an extension or allow the agreement to expire.
Employers should also consider whether they wish to apply for an extension on one of the proscribed grounds. In many cases, this will involve deciding whether to commence bargaining for a new agreement, or revert to the applicable modern award.
Enterprise Bargaining and Multi-Enterprise Agreements
From 6 June 2023, a number of changes will be implemented related to enterprise bargaining and agreement making, such as:
- the implementation of a new cooperative workplace bargaining agreement, which is a type of multi-enterprise agreement;
- the possibility for 2 or more employers and their employees to make a single interest employer agreement, and for a single interest employer agreement to be varied to add employers and their employees;
- the replacement of the low-paid bargaining arrangements with the supported bargaining agreements and the possibility to vary a supported bargaining agreement to add employers and their employees;
- the possibility for employers and their employees to apply to vary a non-greenfields multi-enterprise agreement to cease coverage by agreement;
- changes to protected action ballot order applications, including a new requirement to attend a conference and new rules in relation to multi-enterprise agreements and ballot agents;
- the replacement of serious breach declarations and bargaining related workplace determinations by intractable bargaining declarations and intractable bargaining workplace determinations; and
- the simplification of the operation of the Better Off Overall Test (BOOT).
Required Step: Employers should be aware of changes to enterprise agreement making and the new multi-enterprise streams.
Further changes to commence shortly – Prohibiting Pay Secrecy
Under the new sections 333 B and 333 C of the FW Act, employees are now free to choose whether or not to discuss and reveal their remuneration (and any other terms and conditions reasonably necessary to determine their remuneration) to others.
From 7 June 2023, employers will contravene the FW Act, and face civil penalties, if an employment contract is entered into that contains terms that are inconsistent with an employee’s rights to disclose or not to disclose their remuneration.
Required Step: Employers should ensure that pay secrecy clauses have been removed from their contract of employment templates.
Further changes to commence shortly – Small Claims Process
From 1 July 2023, the maximum monetary limit for recovering unpaid entitlements through the small claims process will rise from $20,000 to $100,000.
If you would like any guidance or assistance in how any of these changes affect your workplace, please reach out to a member of the team.
This content is general in nature and provides a summary of the issues covered. It is not intended to be, nor should it be relied upon, as legal or professional advice for specific employment situations.
Olexo Workplace Law recommends that specialist legal advice should be sought about specific legal issues.
