Pay attention to the fine print… changes to Australian workplace laws taking effect from 6 June 2023
Market Insight 02 June 2023 02 June 2023
Employment, Pensions & Immigration
With considerable amendments made to the Fair Work Act 2009 (Cth) in December 2022 now coming into effect, organisations should be aware of and ready to navigate these new changes. In this article we outline and discuss these amendments and what organisations can do to be best prepared.
In December 2022, the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) received Royal Assent and with it, a whole suite of amendments were made to the Fair Work Act 2009 (Cth) (Fair Work Act). These amendments did not take effect immediately and have been (and continue to be) progressively introduced. From 6 June 2023, a number of these amendments will come into force concerning flexible working arrangements, parental leave, enterprise bargaining and the making of workplace agreements.
We summarise below the current position under the Fair Work Act and highlight some of the more pertinent changes that will take effect from 6 June 2023.
1. Flexible Working Arrangements
An eligible employee (in particular circumstances) may request changes to their working arrangements. There are limited provisions in relation to how an employer needs to respond to a request for flexible working arrangements.
From 6 June 2023
More employees will be eligible to request flexible working arrangements. This right will now extend to:
- employees who have a member of their immediate family or household who is experiencing domestic violence; and
- employees who are pregnant.
New obligations will also apply to employers before they are able to refuse a request for flexible working arrangements. Employers will need to:
- discuss the request with the employee;
- make a genuine effort to seek out alternative arrangements that will accommodate their employee’s circumstances; and
- consider the consequences that could result from a refusal of the request.
If an employer agrees to make changes that are different to the arrangements requested by the employee, an employer must confirm these changes in writing within 21 days of the request.
Most notably, the Fair Work Commission (Commission) will now be able to hear and make orders about disputes relating to requests for flexible working arrangements.
2. Requests to Extend Unpaid Parental Leave
The Fair Work Act contains limited provisions in relation to how employers must handle a request to extend unpaid parental leave. Currently, employers are required to respond to a request for an extension of unpaid parental leave in writing within 21 days. If an employer refuses a request, they must discuss the reasons for their decision with their employee. Any refusal must be communicated in writing within 21 days.
From 6 June 2023
The Fair Work Act will now include a more prescriptive process that employers must follow when responding to an employee’s request for an extension of unpaid parental leave.
Following a request to extend unpaid parental leave, an employer can agree to the request or discuss the request with the employee and agree to a different extension period.
Whatever the outcome, the employer must put this in writing and provide it to the employee within 21 days of making the request.
The Fair Work Act will now prescribe certain matters that must be included in the notification for refusal of a request such as the reasons for the refusal and an alternative period of extension of unpaid parental leave that the employer is willing to agree to.
An employer can only refuse an extension request if all of the below are satisfied:
- a genuine attempt has been made to discuss the request;
- the consequences of the refusal have been considered; and
- the refusal is on reasonable business grounds.
The Commission will have the power to deal with disputes arising from requests, which includes conducting arbitration. The Commission can also commence court proceedings for breaches of orders made if the Commission arbitrates a dispute.
3. Simplified Enterprise Bargaining
Prescriptive pre-approval requirements exist for the making and approval of enterprise agreements such as the issuing of a notice of employee representational rights as well as strict timeframes and requirements for key steps leading up to and including the voting process.
Currently, the Commission undertakes the Better Off Overall Test (BOOT) as a line-by-line comparison when determining whether it will approve the agreement against the underpinning modern award. The Commission does not account for hypothetical scenarios when applying the BOOT nor does it consider reasonably foreseeable patterns or types of work.
From 6 June 2023
Commission Members will now be required to consider a statement of principles (available at Schedule 1 of the Fair Work (Statement of Principles on Genuine Agreement) Instrument 2023) (Statement of Principles) when making an assessment as to whether an enterprise agreement has been “genuinely” agreed to by the employees. The Statement of Principles provides guidance to employers with respect to what they must do to ensure that their employees have genuinely agreed to a proposed enterprise agreement.
Employees who vote for an agreement must have:
- been informed of their right to be represented by a bargaining representative;
- have been given a reasonable opportunity to consider a proposed enterprise agreement and had the terms explained to them;
- been provided with a reasonable opportunity to vote on a proposed enterprise agreement;
- sufficient interest in the agreement; and
- must be sufficiently representative of the coverage of the agreement.
As a consequence of the amendments, steps that an employer must currently take within strict timeframes will be removed.
Other changes to the Fair Work Act extend to the BOOT. These changes will allow the Commission to:
- amend an agreement after its lodged if the Commission believes it does not pass the BOOT; or
- reconsider an agreement after it has been approved.
The Commission must also make a “global” assessment about whether any reasonably foreseeable employee is better off under the enterprise agreement than if the relevant modern award applied. In doing so, the Commission must consider a prescribed set of factors.
4. Increased Access to Multi-Employer Bargaining
Parties entering single interest agreements are required to obtain Ministerial approval. Consequently, there are barriers to eligibility for common interest employers wishing to bargain for single interest agreements.
The purpose of the low paid bargaining stream has been to provide access to the benefits of bargaining for employees in low-paid industries. Onerous criteria are required to be met to access the stream and this means that the low-paid bargaining stream is scarcely used.
The purpose of the multi-employer bargaining stream is to facilitate the joining of multiple employers in making a multi-employer bargaining agreement.
From 6 June 2023
There will be increased access to multi-employer bargaining as a result of the amendments to the Fair Work Act.
Unions and employers will be able to apply to the Commission for a “single interest employer authorisation” (SIEA). Ministerial approval to commence multi-employer bargaining will no longer be required.
It will be possible to nominate any employer to be party to the proposed SIEA. Employers subject to a SIEA will be required to bargain, with the possibility to nominate multiple employers as a party. Employers will be able to be added to an existing SIEA by application.
An employee organisation will need to represent at least some of the employees in the application.
What was previously the low-paid bargaining stream is now the supported bargaining stream. The Commission will now grant a supported bargaining authorisation if it is appropriate upon consideration of work conditions, common interests of employers, number of bargaining representatives and any other relevant matters.
The Commission will need to be satisfied that an employee organisation represents at least some of the employees in the application.
The Commission is required to make a supported bargaining authorisation if the application concerns employees in an industry, occupation or sector specified by declaration of the Minister.
The current multi-employer bargaining stream will be called the ‘Cooperative Workplaces’ bargaining stream. Under this stream, multiple employers can join together to establish a cooperative workplace agreement.
A proposed cooperative workplace agreement needs to be approved by the majority of employees of each employer party to the agreement.
As with single-interest and supported bargaining streams, there is a requirement that at least some employees be represented by a registered employee organisation.
What does this mean for your organisation?
- Employers need to take additional care when considering and responding to requests for flexible working arrangements and extensions to unpaid parental leave in accordance with the process prescribed under the Fair Work Act from 6 June 2023 onwards. This is particularly the case given that employees will have increased access to dispute resolution mechanisms in the Commission should a request be refused.
- Employers should be aware of and ready to navigate the new changes to enterprise bargaining and workplace agreement making as they have the potential to have far ranging implications for the underpinning terms and conditions of your workforce. Employers with current enterprise agreements in place and those soon to expire, ought to ensure they understand the new processes required prior to considering whether to negotiate for a new agreement and ensure that they are aware of and comply with the Statement of Principles.
- Employers should also be aware that the amendments to the Fair Work Act are intended to reduce barriers to bargaining for new enterprise agreements. This means that businesses may be engaged in the enterprise agreement process where such agreements were previously rarely used.
If you have any queries in relation to the changes which will be implemented to the Fair Work Act, please do not hesitate to contact us.