What you need to know about the Government’s new IR law reforms: Promoting secure work, gender equality and pay transparency
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 represents one of the most significant changes to industrial relations in over a decade that will impact many Australian business owners, leaders and workers. To help take the guesswork out what you can do to prepare we have provided a summary of the key changes along with some practical recommendations around promoting secure work, gender equality and pay transparency that are included in the Bill.
The Fair Work Act 2009 (Cth) that was introduced over a decade ago to modernise the Australian workplace relations system plays a critical role in setting the foundations for ‘how’ we work. This ‘how’ includes important protections for workers in terms of what they are paid and how they are treated at work. For employers, the workplace relations system can be complex to navigate, and changes can have very real impacts on ‘how’ employers run their businesses.
The focus of these changes will expand the objective of the Fair Work Act 2009 (Cth) to promote more secure work, gender equality and pay transparency. With the Bill scheduled to become passed as law before the end of this year (if not earlier) we have analysed the proposed new changes to the legislation. We offer some practical recommendations for organisations to get a head start on their preparations for the changes ahead.
Promoting secure work
Insecure work is a focus of the Government, as they believe providing access to more secure work will have positive impacts on the economy. Employers that engage highly casualised workforces are on notice that if they are relying on insecure models of work that they must take action to reassess and seek to provide more secure employment arrangements and alternatives. Under the proposed changes, the Fair Work Ombudsman (FWO) will be required to provide more education and resources to workers on the impacts on fixed-term employment arrangements.
The FWO will be required to provide a Fixed Term Contract Information Statement
Like the current Fair Work Information Statement that is provided to all new employees and the Casual Fair Work Information Statement that is provided to casual employees, the Bill sets out to introduce a Fixed Term Contract Information Statement. The newly proposed Fixed Term Contract Information Statement will be required to be provided by the employer to any new employees engaged on a fixed term employment arrangement.
Any fixed term contract arrangements greater than two years are generally not permitted under the changes proposed to the legislation, except for some circumstances for example if the employee is engaged above the high-income threshold and other exceptions expressly set out.
Recommendations:
Review existing fixed term employment arrangements – are you currently engaging employees on these types of fixed term contracts exceeding a two-year period? If yes, carefully examine to explore other alternatives.
Review onboarding processes to ensure that steps are implemented to provide the Fair Work Information Statement(s) (standard employee, casual employee and fixed term employee) and that those responsible for administering this process understand the changes.
Promoting gender equality
Gender equality is another key focus of the Bill. This is no surprise given reports on the gender-pay gap widening and research that continually demonstrates a systemic undervaluation of women’s work. The changes supplement the implementation of the review conducted by Kate Jenkins, the Sex Discrimination Commissioner in the Respect @Work Report that included 55 recommendations to strengthen laws around preventing sexual harassment. The changes proposed in the Bill will support those included in the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill 2022 and provide the Fair Work Commission (FWC) with several new powers designed to promote gender equality and protect employees from sexual harassment at work.
The FWC will have stronger powers in relation to making an ‘equal remuneration order’
An ‘equal remuneration order’ is a mechanism that is already available under the current legislation. However, the strengthening includes the FWC being able to make an order of its ‘own initiative’ as opposed to only acting when an application has been made. This implies that the expectation is for the FWC to play a more proactive role in the promotion of gender equality in our workplaces.
Additionally, in the process the FWC must use to assess whether equal remuneration for work of equal or comparable value, a ‘comparator’ must be established, that is a person who is in an equal position to that of the position that is subject to the order. The ‘comparator’ is not limited to similar work and/or does not need to be a comparison with an historically male-dominated occupation or industry. This is of course designed to combat ingrained views that often fuel the gender-pay gap, in that women working in traditionally ‘male-dominated’ fields will receive less pay than their male counterparts for performing the same role.
Recommendations:
Review existing sexual harassment prevention policies and procedures, and if you don’t have a specific sexual harassment prevention policy then it is important to ensure you have one in place.
Review remuneration policies and procedures, including employment arrangements to ensure there is no inbuilt pay inequity based on gender.
Review current approaches to determining work value for specific positions to ensure an objective assessment is used that is free from assumptions based on gender.
Promoting pay transparency
This would have to be one of the most interesting, if not unique additions to the reforms proposed from a workplace culture perspective. Many workplaces will generally discourage open conversations amongst employees about pay and other terms and conditions of employment. This for most workplaces is about protecting the confidentiality and privacy of employees. It is commonly known that conversations at work about pay can often cause conflict amongst people who can become quickly aggrieved to learn that someone else is getting paid more than they are. It is an issue that can become very difficult to manage from a practical perspective in the workplace.
However, it is evident from the focus of the newly proposed Part 7 – Prohibiting Pay Secrecy included in the Bill that some employers are taking these requirements a step too far by including pay secrecy clauses in employment contracts and agreements to forbid employees discussing pay and conditions altogether. The reforms to the legislation in this area will prevent employers from subjecting employees to pay secrecy clauses in employment contracts and enterprise agreements. This will promote pay transparency and no doubt will result in some cultural shifts inside organisations that traditionally discourage these types of conversations amongst employees.
Recommendations:
Review contracts of employment and enterprise agreements to remove any references to pay secrecy.
Review existing policies and procedures, including specifically Privacy and Code of Conduct policies to ensure there is nothing included that prevents employees from discussing their pay or asking other employees questions about pay.
Work with us
Humanify HR Consulting specialise in workplace relations and supporting organisations to ensure that their HR processes and workplace arrangements are compliant and fit-for-purpose. To find out more about how we can support you with these new IR reforms please contact our team at hello@humanifyhr.com.au
Important Disclaimer: The material contained in this article is provided as general information only. It is not, nor is intended to be legal advice. If you wish to take any action based on the content of this article we recommend that you seek professional advice.
