On 27 October 2022, the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 was introduced to Parliament, proposing significant changes to Australia’s industrial relations landscape.
On 11 November, QHA, in conjunction with AHA, filed submissions (attached), targeting the proposed amendments that may have the most impacts to our members and the hospitality industry. On 15 November 2022, QHA alongside AHA, attended the Senate Committee Hearing to further press our concerns on behalf of members and provide additional evidence.
After 157 amendments in the House of Representatives and further amendments made in the Senate, it passed both houses on 2 December 2022 (‘the Act’) and on 6 December 2022, it received Royal Assent, making it operative.
This high-level overview will cover the following areas that are relevant to members:
- Multi-employer bargaining
- Terminating enterprise agreements and zombie agreements
- Flexible working arrangement
- Prohibiting sexual harassment tin the workplace
- Expanded anti-discrimination protections
- Other changes
QHA will be preparing additional resources to assist members through these changes in the New Year.
- Multi-employer bargaining
Perhaps the biggest impact of the Act is the shake up of multi-employer bargaining provisions. The Act proposes to expand multi-employer bargaining across three streams:
a) Single interest employer authorisation stream
b) Supported bargaining stream
c) Cooperative workplace stream
The collective effect of these changes shifts the focus towards industry level bargaining and expands the ability for employees or unions to unilaterally compel their employer to bargain and become subject to agreements after approval by the Fair Work Commission (‘the Commission’).
Across all three multi-employer bargaining steams, the employer must first obtain written agreement from each union involved in the bargaining process, before the agreement can be put to a vote. If a union withholds its consent, employers can apply to the Commission for an order that the vote proceed. When considering whether to approve the order, the Commission must assess if the union is withholding its written consent ‘unreasonably’ and whether issuing an order would be inconsistent with good faith bargaining.
a) Single interest employer authorisation stream
Although single interest authorisations are not new to the Fair Work Act 2009 (‘FW Act’), they were rarely utilised and were originally something only sought by employers (e.g. franchises). The changes this stream introduces allows employee bargaining representative to seek a single interest employer authorisation from the Commission, in turn requiring an employer to bargain for an agreement in conjunction with other employers. When determining whether to issue a single interest employer authorisation, the Commission must be satisfied that:
- the employers subject to the application must have clearly identifiable “common interests” (e.g. geographical location of employers, the regulator regimes and the nature of the enterprise) and the business must be “reasonably comparable”; and
- at least some employees that will be covered by the agreement are represented by a union; and
- the employer and any unions affected have had the opportunity to express their views on the application; and
- it is not contrary to the public interest to make the authorisation
The Commission must also be satisfied of the following when a union seeks a single interest employer authorisation:
- the employer is not a small business employer employing 20 employees or less (this is a new definition of small business employer and applies only to the new multi-bargaining provisions);
- the employer is not subject to a supported bargaining authorisation;
- the majority of employees who will be covered by the proposed agreement want to bargain for the agreement;
- the employer has not made their own application for an authorisation; and
- there is no single enterprise agreement currently in force or being bargained.
Employees can take industrial action in support of multi-employer agreement in this steam.
As raised at the Senate Committee Hearing and in QHA/AHA’s submissions, our concerns were centred around employers being forced into bargaining for a multi-employment agreement, with very limited options to opt out. These include:
- an employer and union agree to enter into a single-enterprise agreement (unless a single authorisation has already been granted by the Commission);
- the employer has a change in circumstances where it is no longer appropriate for them to be covered by the authorisation and makes an application to be removed; or
- through a vote, an employer with fewer than 50 employees and its employees jointly apply to vary the authorisation to remove themselves as parties.
If the Commission makes a single interest employer authorisation, any employer named in that authorisation is compelled to comply with good faith bargaining obligations, which includes attending meetings at reasonable times, considering and responding to bargaining proposals in a timely manner and disclosing relevant information in a timely manner.
In addition, the common interest test in the Act is broad and subjective, meaning it could encompass any hospitality establish in the same geographical location that is subject to the same liquor laws.
At this stage, these changes won’t take effect until June 2023. The early application of the common interest test by the Commission will be critical in determining how widely this steam is adopted.
QHA is preparing resources for members about this stream which will made available well before June 2023. Should any members have concerns about this streams, please contact the ER Department.
b) Supported bargaining
The second stream of multi-employer bargaining is the ‘supported bargaining’ stream. This stream is a modification of the existing low paid bargaining provisions that exist in the Act at section 242.
When determining whether the Commission is satisfied that it is appropriate for the employers and employees to commence bargaining in this stream, the Commission must have regard to:
- The prevailing pay and conditions within the relevant industry (including whether low rates of pay prevail); and
- Whether the employers have clearly identifiable common interest; and
- Whether the likely number of bargaining representatives for the agreement would be consistent with a manageable collective bargaining process; and
- At least some of the employees are represented by a union; and
- Any other matters the Commission considers appropriate.
If the Commission grants a supported bargaining authorisation, an employer subject to that authorisation is compelled to comply with good faith bargaining obligation. Employees can also take industrial action in this stream. Further, any approved supported bargaining agreement prevails over any other agreement that may already apply to an employer.
At this stage, QHA does not believe this will have significant impact on our industry. However, one of the 157 amendments made to the Bill allows the Minister to declare industries, occupations or sectors for the purposes of supported bargaining. Resources will be prepared by QHA on this stream. This changes will become operative by 7 June 2023.
c) Co-operative workplaces
This stream of multi-employer bargaining already exists in the Act. Under this steam, employers can seek to join with other employers to make a cooperative workplace agreement. The Act is amended to enhance access to enterprise bargaining by providing an option for employees and employers to reach agreements and help overcome the difficulty smaller businesses can have in bargaining for a new agreement. Notably, no protected industrial action is available in this stream.
- Terminating enterprise agreements and zombie agreements
a) Sunsetting of ‘zombie agreements’
‘Zombie agreements’ are agreements made before the commencements of the FW Act on 1 July 2009 or during the ‘bridging period’ of 1 July 2009 to 31 December 2009. Under the Act, the Zombie agreements will automatically expire on 7 December 2023.
By 7 June 2023, employers who still have a zombie agreement will be required to give employees notice of the date on which the agreement will terminate. Once the agreement terminates, the employees will revert to the applicable Award. For most of QHA members, it will be the Hospitality Industry (General) Award 2020 (‘the HIGA’). If the employees remain better off overall under the zombie agreement, then an application may be made to the Commission for an extension of the Agreement of up to 4 years.
QHA is currently compiling a list of members who may still have a zombie agreement in operation. The ER Department will be contacting those members directly to provide advice and guidance on this reform. If you believe you do have a zombie agreement, and have not heard from the ER Department by March 2023, please contact the team.
b) Terminating enterprise agreements
The Act amends section 226 of the FW Act as a means to address alleged disputes surrounding employers applying to terminate expired enterprise agreements during protracted enterprise bargaining. The amendments to the FW Act requires the Commission to terminate the agreement if:
- it is satisfied that the continued operation of the agreement would be unfair to the employees; or
- it is satisfied that the agreement does not, or is unlikely to, cover any employees; or
- all of the following circumstances apply:
- the continued operation of the agreement would pose a significant threat to the viability of the employer’s business which is subject to the agreement;
- the termination of the agreement would likely reduce the potential for termination of employment by way of redundancy, or due to insolvency or bankruptcy; and
- where the agreement contains termination entitlements the employer has given a guarantee to the Commission in respect of its compliance with those obligations (which last for four years, or another period approved by the Commission).
The amendments will direct the Commission to question whether the proposed application to terminate the agreement is merely a bargaining tactic. Ultimately, this will mean that employers will either need to implement a replacement enterprise agreement or convince a majority of those employees eligible to vote to vote to terminate the existing agreement. These amendments came into effect on 6 December 2022.
- Flexible Working Arrangements
The Act amends section 65 of the FW Act by increasing an employee’s right to request flexible working arrangements. Previously, eligible employees had the right to make a flexible working arrangement request and employers could refuse the request on reasonable business grounds. After that, the employee had no avenue of review or appeal available.
The Act expands who is eligible to make a request, now capturing pregnant employees, and introduces a new regime, as follows:
- Employers must first discuss the request with the employee and genuinely try to reach agreement on the request; and
- Employers must give the employee a written response within 21 days – failure to do so will be deemed a refusal; and
- Employers can only refuse a request where:
- Agreement cannot be reached;
- The employer has had regard to consequences of their refusal on the employee; and
- The refusal is based on reasonable business grounds.
- Employers who refuse the request must do so in writing, which is to include:
- The exact business grounds on which the request was refused;
- What alternative arrangements were offered to meet the employee’s circumstances and
- That the employee has a right to challenge the refusal under the Act
The Act will now allow the Commission to arbitrate on whether the business grounds relied on by the employer in refusing the request were, or were not, reasonable business grounds. The Commission can order the employer to grant the employee’s request or vary the request in such matters.
In addition, employee will also be able to seek civil penalties for a refusal of a flexible working arrangement for anything other than reasonable business grounds. This introduces a significant risk that an employer facing further legal action if the Commission makes a ruling of such effect.
QHA/AHA’s submissions dealt with flexible working arrangements, raising that this legislative change places all the obligation on the employer to reach an agreement with the employee and the employee still having the capacity to commence arbitration in the Commission despite the efforts of the employer. Fortunately, the final amendments made to the Act prior to it being passed included the requirement for the Commission to attempt to resolve the dispute without arbitrating first, meaning that conciliation and mediation is to be utilised in the first instance. This was a small but important win for our members, allowing parties engage in a more informal process before proceeding to arbitration.
This changes come into effect in June 2023. QHA is currently updating its policies to capture the above legislative change. In addition, QHA is developing a toolkit that will guide members through this process to ensure that they meet their legislative obligations when a request for flexible work arrangements is made.
- Prohibiting sexual harassment in the workplace
Last year, the Morrison Government amended the FW Act by introducing the ‘stop sexual harassment’ orders. The Act expands these previous amendments by:
- Prohibiting sexual in the workplace where harassment occurs ‘in connection with’ a worker, a prospective worker or a person conducting a business or undertaking; and
- Imposing a civil penalty for sexual harassment.
The prohibition will apply to sexual harassment perpetrated by a customer, client or member of the public, against an employee, so long as there is some connection at the time the conduct occurs to the employee performing work related to their duties.
The commencement date for this legislative change is 6 March 2023. QHA is currently amending its policies in the HR Manual and subscribers will receive an updated policy once complete. QHA is also revamping its Discrimination, Bullying and Sexual training to reflect these legislative changes and the ER Department will be able to deliver these training sessions in the new year. We strongly encourage that you reach out to us to secure your spot.
- Expanded anti-discrimination protections
The Act has added three new forms of discrimination to the existing protections against discrimination in the FW Act to now cover breast feeding, gender identity and intersex status.
For members, this means that the general protection provisions cover these three attributes, in addition to the protected attributes already included in the FW Act (race, sex, age, marital status, pregnancy, religion, political opinion, etc).
- Other Changes
a) Changes to the bargaining framework
In addition to the multi-employer bargaining streams introduced and the sunsetting of zombie agreements discussed above, the Act also introduces the following amendments to the bargaining framework:
- Intractable bargaining declarations. The Commission will now be empowered to intervene and make determinations in the scenario of intractable bargaining disputes, once a minimum good faith bargaining period of nine months has occurred and provided that the bargaining is truly intractable (i.e., there is no reasonable prospect of the par-ties reaching agreement).
- Changes to the Better Off Overall Test (BOOT) to move away from a line-by-line comparison between a proposed enterprise agreement and the relevant modern award and towards a more global assessment to ensure that current and prospective employees would be better off overall under the terms of the proposed agreement.
- Changes to the approval requirements for enterprise agreements by providing a more flexible principles-based requirement for the Commission to be satisfied that an enterprise agreement has been genuinely agreed to by employees and removing the strict timeframes employers are currently bound to comply with if they seek to have an agreement approved.
- Simplified process to initiate bargaining for a replacement agreement by written request only for single employer agreements will also be introduced into the FW Act.
- Protected industrial action amendments will require bargaining representatives to attend a conciliation conference before the Commission during the Protected Action Ballot period prior to voting closing, 120 hours’ notice must be provided before commencing protected industrial action and ballot providers other than the AEC will be authorised to conduct PABs.
- The Commission will be able to vary enterprise agreements to correct or amend obvious errors, defects or irregularities in approved enterprise agreements, in an attempt to streamline the process to deal with errors in agreements.
b) Job security and gender equality
Job security and gender equality are now included as key objectives of the FW Act. The Act empowers the Commission to make equal renumeration orders, establish expert panels on pay equity and for the care and community sector and explicitly exclude pay secrecy clauses in employment contracts. Employees will be able to disclose information pertaining to their pay and conditions, and to speak freely with colleagues regarding their individual terms of employment.
Other changes that fall within the broader job security and gender equality reforms include:
- The use of fixed-term contracts will be limited, to prohibit an employer from engaging an employee on a fixed-term contract for the same role beyond two years, or on a contract which may be extended for a combined total of two years, subject to limited exceptions. Disputes about fixed-term contracts will be able to be arbitrated in the Commission by agreement between the parties, or via the small claims processes in the Federal Courts. These provisions will not take effect until December 2023.
- The monetary cap on the amounts that can be awarded in small claims proceedings will be increased from $20,000 to $100,000, with capacity to award a successful claimant any filing fees they paid to the court as costs from the other party.
- A prohibition from advertising employment at a rate of pay that would contravene the FW Act or another instrument will also be inserted into the Act, to ensure employment is advertised with correct renumeration details.
We appreciate that there is a lot of information to take in in this article and we encourage members to take the time to carefully review this summary. You aren’t alone in these changes; QHA’s ER Department will work with members through these amendments and will continue to issue material about these and other legislative changes that were not explored in this article.
If you or a member of your team are not yet subscribed to the ER Bulletin, it is important to subscribe to the ER Bulletin so you can remain up to date and across these changes. Please email us at er@qha.org.au advising you wish to subscribe to the ER Bulletin.
You can contact the ER Department team on 07 3221 6999 or er@qha.org.au
