Significant amendments have been made to the Fair Work Act through the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Act)
The Fair Work Commission (the Commission) will be able authorise multi-employer bargaining agreements through the new “single interest bargaining stream”
Employers who already have, or soon initiate enterprise bargaining agreements with their employees, will not be required to participate in the single interest bargaining stream
Workplace Bargaining across businesses
Understood as the single-interest multi-employer bargaining stream, this will allow pay deals to be brokered across a range of similar businesses. This will also allow the Commission to authorise workers with common interests in businesses which are “reasonably comparable” to bargain together, where it is in the public interest. That means that employees in a similar industry (for example, workers in childcare) may bargain collectively on pay and conditions.
The Commission will need to consider common interests such as the type of businesses, as well as the employee’s terms and conditions of work. The single interest stream requires the majority of employees at each employer to agree to take part in a multi-employer pay deal. That means that employers can be compelled to take part in this kind of agreement if their workers vote for it.
Bargaining changes for low paid workers
This is understood as the supported bargaining stream. It changes the former “low paid” bargaining stream and allows multi-employer bargaining for certain types of low paid work. The changes remove restrictions and broaden the test considered by the Commission when deciding if multi-employer bargaining can take place.
The government has also introduced a new “deeming” provision. This means that some workers in low-paid occupations, who have received a pay rise that would otherwise push them out of the low-paid stream, will retain their entitlement to continue to use multi-employer bargaining.
Small business exception – multi employer bargaining
For these laws, small businesses (those with less than 20 employees) are exempt from single-interest multi-employer bargaining (see above). Additionally, businesses with less than 50 employees have also been accommodated in the changes. Those businesses will be able to argue to the Commission that they are not reasonably comparable (similar) to other employers in a multi-employer bargaining process. If approved, those businesses may not be compelled to participate.
Flexible working arrangements
Under current laws, employees may request flexible work hours, but employers have no obligation to agree to the request. The new legislation legally requires employers to try to reach agreement with eligible employees who request flexible work hours or arrangements. This includes the requirement that, where an employee’s request cannot be accommodated on reasonable business grounds, an employer will need to propose an alternative arrangement.
If no agreement is reached, employees will be able to take the refusal to the Commission to reach agreement by conciliation and, where that fails, receive a binding decision through arbitration.
Eligible employees are
- parents with children of school age or younger;
- people with a disability;
- those aged 55 or older;
- employees experiencing or caring for someone experiencing domestic violence.
Single enterprise agreements
Under the changes, employers who have agreed with an employee organisation (Union) to start bargaining for a single enterprise agreement are exempt from the single-interest multi-employer bargaining stream. The Commission will have the capacity to exempt an employer from the single-interest multi-employer stream for up to nine months after the expiry of an enterprise agreement.
Workplace Relations Minister Tony Burke has said that for: “…any businesses that are concerned, that actually don’t want to be involved in multi-employer bargaining, the simple fix for them is … to negotiate with their staff now and to do it over the next six months. So that opportunity will happen.”
Employers may take this as a serious consideration now, to reduce future business risk and ensure greater certainty in their employment arrangements.
Employer group concerns
Positioned by the government as a way to increase the wages of working Australians, aspects of the Act have raised concerns from some employer groups, particularly regarding the changes to bargaining agreements. Many have argued that the changes will burden businesses with lengthy and complex negotiations and increase the likelihood of industrial action.
The Business Council of Australia has noted concerns that the Act will allow unions to organise industry-wide strikes, however this is mainly related to the new multi-employer bargaining arrangements.
The Australian Industry Group has highlighted the conflict and uncertainty the amendments create for employers, with CEO Innes Willox arguing that the Act is vague regarding who will be included in the single interest scheme.
The Australian Chamber of Commerce and Industry have flagged that there is a risk that businesses could be forced into unsuitable agreements and have also expressed concerns that the cost of negotiating agreements will be enormous.
More workplace law changes to come
All indications point to the fact that these amendments are just the first in a long line of changes to Australian workplace law. The new government has signalled its intention to address the regulation of labour hire and workers in the gig economy in the new year.
However, more changes across the entire employment law landscape are expected. As announced in a joint statement released by the Prime Minister and Workplace Relations Minister upon the passing of the bill into law “The Secure Jobs Better Pay Bill is the next step in that commitment - but it won’t be the last”.
The pace of the current changes provides Australian businesses with an opportunity to review their current employment contracts, policies and arrangements and consider the impact the government decisions may have.
As pointed out by the Minister, there is a small, but rapidly closing opportunity for employers to act now to ensure ongoing business certainty.
We recommend that professional advice be sought to ensure business employment arrangements are robust and will withstand the coming changes.
Please contact Hicksons’ Partner, Warwick Ryan, at warwick.[email protected] should you need any assistance or guidance.
Blog post written by Partner, Warwick Ryan, Senior Associate, Helen Sexton and Graduate, Zoe Waskett