2023 has been another big year in the industrial relations landscape. Most of the major legislative changes passed by the federal government over the past 12-18 months have now come into legal effect, but there are plenty more changes on the horizon.
This alert summarises the following:
- Changes made over the last year or so which are now in effect;
- Recent legislation which has been passed by the federal government, and coming into effect in the future; and
- Proposed changes by the federal government and which are due to be considered by the Parliament in 2024.
Recent changes which are now in effect
Limitation on fixed term contracts
As of 6 December 2023, the limitations on the use of fixed term contracts have come into effect. The effect of these changes is to prohibit fixed term permanent employment contracts:
- providing for a term which is longer than 2 years; or
- that are extended or renewed more than once.
There are several exceptions to the above rules:
- Specialised Task Exception – the contract is only for the performance of a distinct and identifiable task involving specialised skills;
- Training Exception – the contract is part of a training arrangement;
- Essential Work Exception – the contract is for the performance of essential work during a peak demand period;
- Emergency Exception – the contract is for the performance of work during emergency circumstances or during a temporary absence of another employee;
- High Income Exception – in the year the contract is entered into the amount of the employee’s earnings under the contract is above the high income threshold for that year ($167,500 for 2023/2024);
- Government Funding Exception – the contract relates to a position that is funded in whole or in part by government funding which is payable for more than 2 years and there are no reasonable prospects that the funding will be renewed after the end of that period;
- Governance Position Exception – the contract relates to a governance position that has a time limit under the governing rules of a corporation or association of persons; or
- Modern Award Exception – a modern award that covers the employee includes terms that permit the employee to be engaged in a manner which falls under one of the prohibitions set out above.
Employers are also required to provide a Fixed Term Contract Information Statement (FTCIS) to all employees engaged on a new fixed term contract (which is available to download from the Fair Work Ombudsman’s website).
Limitation on fixed term contracts
Further to the general limitations set out above, on 23 November 2023, the Fair Work Amendment (Fixed Term Contracts) Regulations 2023 were published which delay the commencement of those legislative changes for some industries until 1 July 2024, providing employers in the following categories an additional 7 months to prepare for the changes:
- organised sport, including athletes, coaches, performance support professionals, match officials, governing bodies and their members;
- organising bodies for international sporting events which are not regularly held in Australia,
- live performance;
- higher education; and
- employees funded by charities, including philanthropic funding, and testamentary gifts or contributions for charitable purposes.
Sunsetting of ‘zombie’ agreements
Certain kinds of registered agreements made before 1 January 2010 continued to operate when the Fair Work Act 2009 (Cth) (FW Act) fully commenced on 1 January 2010, these have generally been called ‘zombie agreements’. Zombie agreements include:
- Australian Workplace Agreements (AWAs)
- individual transitional employment agreements (ITEAs)
- collective agreements entered into before 1 January 2010
Unless a party obtained an order from the Fair Work Commission (FWC) to extend their zombie agreement, all zombie agreements were automatically sunsetted effective 7 December 2023. This means that any zombie agreement which did apply to an employee or employees no longer covers the employee/s and has ceased to operate.
AHRC regulating the positive duty to eliminate sexual harassment
A positive duty for employers and ‘persons conducting a business or undertaking’ (PCBUs)to prevent workplace sexual harassment and similar conduct was introduced into the Sex Discrimination Act 1984 (Cth) (SD Act) in late 2022. The Australian Human Rights Commission (AHRC) has been equipped with a range of new regulatory tools to monitor, assess and enforce organisations’ compliance with the positive duty, commencing from 12 December 2023.
Although the AHRC has long had the power to inquire into matters when it received a complaint, the new powers bring the AHRC into line with other regulators, like WorkSafe or the Fair Work Ombudsman (FWO). These powers follow the staged approach set out below:
- Inquiries – the AHRC can make inquiries into compliance with the positive duty in order to make a finding. An inquiry can be made even in circumstances where the AHRC only holds a ‘reasonable suspicion’ of non-compliance. An inquiry may include the AHRC seeking a response from the person or organisation, compelling the production of documents and compelling attendance upon the AHRC to answer questions (including answering questions whilst under an oath or affirmation). There are penalties for failing to provide information or documents, as well as penalties for hindering or interfering with an AHRC inquiry.
- Compliance notices – where the AHRC finds non-compliance with the positive duty, the AHRC can issue a compliance notice which sets out specific details of actions to take or refrain from taking in order to address the failure. Compliance notices will also include a timeframe for the action to be taken. Where a person breaches the terms of a compliance notice, the AHRC can seek an order from the federal courts requiring compliance, as well an ‘any other order that the court considers appropriate’.
- Enforceable undertakings – following an inquiry, the AHRC may accept an enforceable undertaking with persons to ensure compliance with the positive duty, which will generally require the person to make “significant and ongoing commitments to remedy past breaches of the law, as well as to prevent future contraventions” of the positive duty. Where there is an enforceable undertaking in place, a compliance notice cannot be served unless the undertaking is withdrawn, cancelled or expires. Enforceable undertakings may also be published on the AHRC’s website at the AHRC’s discretion, as a further enforcement tool.
The AHRC has published guidance material on its website for complying with the positive duty which is a useful resource for all organisations.
Recently passed legislation
Closing Loopholes Bill No. 1
On 7 December 2023 the Senate passed part of the government’s proposed Fair Work Act Legislation Amendment (Closing Loopholes Bill) 2023, with other aspects to be considered early next year. The legislation that passed included some uncontroversial provisions regarding PSTD claims for emergency service workers, protecting FDV victims from adverse action and coordination on silica safety and silica diseases. The legislation also included provisions regarding:
- redundancy payments for workers whose employer has become a ‘small business’ due to insolvency;
- ‘Same Job, Same Pay’ amendments directed at the use of labour hire;
- federal wage theft laws;
- new union delegates’ right of entry;
- introducing a federal criminal offence of industrial manslaughter.
More details about the major changes are set out below.
‘Same Job, Same Pay’:
The ‘Same Job, Same Pay’ provisions give the FWC power to make a Regulated Labour Hire Arrangement Order (RLHAO) requiring a labour hire provider to pay its employees the ‘full rate of pay’ received by the employees of a host employer who are broadly performing the ‘same’ work. These orders can apply on or after 1 November 2024, however the anti-avoidance provisions will have retrospective effect from the date the bill was first introduced (4 September 2023).
Wage Theft:
The new federal wage theft provisions cannot commence any earlier than 1 January 2025, and they will not commence at all until the Minister implements a ‘Voluntary Small Business Wage Compliance Code’ which will act as a potential shield for small business employers from the new sanctions on wage and superannuation theft. The legislation also requires the FWO to publish a compliance and enforcement policy, including guidelines relating to the circumstances in which the FWO will or will not accept undertakings.
Offences will be punishable on conviction as follows:
- for an individual – a maximum of 10 years’ imprisonment or a fine which is the greater of 5,000 penalty units (currently $1,565,000) or 3x the underpayment amount.
- for a body corporate – a fine which is the greater of 25,000 penalty units (currently $3,756,000) or 3x the underpayment amount.
Workplace delegates:
New terms will be introduced into modern awards, and will be required to be included in enterprise agreements and workplace determinations, to include a ‘workplace delegates rights term’, providing union delegates the right to:
- represent members (and eligible members);
- reasonable communication with members (and eligible members) in relation to their industrial interests;
- reasonable access to the workplace and workplace facilities to represent those interests; and
- reasonable access to paid time for related training during normal working hours (with small businesses exempt).
These changes also include the ability for union officials without an ‘entry permit’ under the FW Act to enter workplaces on request from a Health and Safety Representative (under State or Territory OHS laws) to provide assistance.
These changes will commence on 1 July 2024.
Proposed future changes
The separate Closing Loopholes Bill No. 2 will be debated in early 2024. It contains provisions dealing with:
- independent contracting;
- gig workers;
- road transport workers;
- a new definition of casual employment and prohibitions on sham casual employment;
- enabling multiple franchisees to access the single-enterprise bargaining stream;
- transitioning from multi-enterprise agreements;
- model flexibility, consultation and dispute terms for enterprise agreements to be developed by the FWC;
- intractable bargaining workplace determinations; and
- exemption certificates related to right of entry for suspected underpayments.
Negotiations will continue in the Senate in relation to the passage of the Closing Loopholes Bill No. 2. Senator Lambie has described the remaining proposals as more complex and therefore justifying closer scrutiny, so further changes may be made to the above ‘wish list’ of IR reforms.
If you are an employer and you would like further advice on the matters raised in this alert, feel free to reach out to one of our team on (03) 9448 9600.
The above is general information, which is current at the time of publication, and should not be taken as legal advice.
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