Changes to Fair Work laws (Dec 2022)

2 December 2022

The Secure Jobs, Better Pay Act has received Royal Assent and is now in force

All employers will be impacted by these changes and should be aware of the proposed new rules.

All employers will be impacted by the changes to the Fair Work Laws and should be aware of the proposed new rules.

Update - 6 December 2022

The Act is now in force. Here are the key things you need to know about what these laws mean for members

Construction largely ‘carved-out’ from new ‘industry-wide’ bargaining laws

• Residential and commercial construction, and civil, has been excluded from the new “Multi-employer” (or ‘industry-wide’) bargaining streams
• For most members who have enterprise bargaining agreements (EBA’s), the current arrangements for those will continue to apply
• Unions have been given the power to initiate bargaining for enterprise agreements under relevant circumstances by making a written request to the employer.

Bargaining disputes

• It will be far easier for the Fair Work Commission (FWC) to intervene in any bargaining disputes, and for the first time, they will have powers to arbitrate if parties cannot agree
• This means that if a bargaining dispute lasts for more than 9 months, the FWC will be able to intervene and make a workplace determination to resolve matters in dispute.

Terminating expired agreements and sunsetting of old agreements

• Employers will face new restrictions on when they can apply to terminate an expired EBA
• The FWC, when hearing such applications, will now be required to consider the views of the parties and the impact termination will have on employees’ bargaining power. If there is any opposition to termination, such as from a union, the application must be heard by a Full Bench of the Commission.

ABCC has been abolished

• The ABCC and Building Code 2016 have now been formally abolished, leaving the Fair Work Ombudsman (FWO) as the main workplace regulator for all industries and workplaces.

Sexual harassment

• Laws that prohibit sexual harassment in connection with work will be strengthened
• Under these changes, members could be vicariously liable for sexual harassment of their employees, unless an employer can demonstrate they took “all reasonable steps to prevent the conduct from occurring”
• The FWC will have new powers to deal with “sexual harassment disputes" and issue "stop sexual harassment orders". The Commission will now be able to arbitrate disputes if it considers that "all reasonable attempts to resolve the dispute are likely to be unsuccessful” and also has the additional option to order compensation.

Anti-discrimination

• Some minor changes will align the Fair Work laws with other anti-discrimination legislation by including protection against discrimination on the basis of breastfeeding, gender identity and intersex status as protected attributes.

Expanded flexible work arrangements

• Employees will now be able to request flexible work arrangements in a wider range of circumstances
• In addition to existing grounds (such as family responsibilities) employees can now request flexible work arrangements if they experience family and domestic violence
• The steps an employer must take in considering requests for flexible work have also changed. Employers will now need to respond within 21 days and set out 'reasonable business grounds' for any refusal, including any cost or productivity reasons for not granting the request
• An employee can raise disputes about refusal to grant flexible work arrangements with the FWC which has been given the power to arbitrate under certain circumstances.

Limitations on fixed-term contracts

• The offering of fixed-term contracts will be limited to circumstances where the period of engagement is less than two years.
• Fixed-term contracts which provide for extension greater than two years, or for more than one extension, will also be prohibited and employers will be unable to offer a third consecutive fixed-term contract for substantially the same role.

More information

Master Builders will continue to provide information and how it will affect members via our usual communication channels. We will also conduct face to face member briefings in the New Year. For immediate advice, please contact the Workplace Relations team on 1300 30 50 10.

Update - 10 November

Following the introduction of the ‘Secure Jobs Better Pay’ Bill on 27 October 2022, the Federal Government introduced the Bill to the House of Representatives, containing about 150 amendments, on 10 November. This Bill was passed and is currently before a Senate Inquiry.

The key amendments affecting our industry include:

• Preventing multi-employer agreements from covering “general building and construction” work, as defined in the Award:
  • Being the construction, alteration, extension, restoration, repair, demolition or dismantling of buildings, structures or works that form, or are to form, part of land, whether or not the buildings, structures or works are permanent and maintenance undertaken of such buildings, structures or works”
  • Civil construction and metal and engineering construction (as defined in the Award) is not excluded, nor is electrical services, plumbing or fire sprinkler fitting, concrete products industry, or premixed concrete industry (as defined in those relevant Awards).
• The creation of a National Construction Industry Forum as a statutory body advisory body, whose members are appointed by the minister. This Forum will provide advice on
  • workplace relations
  • skills and training
  • safety
  • productivity
  • diversity and gender equity
  • industry culture.
• According to the amendments, the Minister must appoint an equal number of union and employer association representatives as members.

Provisions abolishing the ABCC remain, and the ABCC’s remaining functions have already been transferred to the Fair Work Ombudsman.

The Senate Inquiry is due to report by 17 November 2022. While the Federal Government is still hopeful that the Bill can be passed in 2022, it is not yet law.

Secure Jobs, Better Pay Bill – what is it?

The Bill proposes major changes to the Fair Work laws, including a mix of both election promises and announcements made following the recent Jobs & Skills Summit.

The Government has flagged an intention to pass the laws before the end of 2022 with a view to having Parliament vote on the Bill within weeks. All building and construction employers will be impacted if the changes become law.

What are the key areas of change for building and construction?

While the Bill contains a wide range of proposed changes, the areas most relevant for building and construction employers include changes that will:

• Abolish the ABCC but retain the Office of the Federal Safety Commissioner (OFSC)
• Overhaul enterprise bargaining rules to allow:
  • Multi-employer enterprise barganing agreements (EBAs) that will create one set of standard conditions that apply across multiple businesses and workplaces in a specific industry
  • Roping-in of businesses to industry-wide deals by making it legal to require workplaces to enter into multi-employer EBAs, including as soon as their existing agreements expire
  • Broader powers for the Fair Work Commission (FWC) to arbitrate single employer enterprise bargaining disputes and make binding determinations about EBA conditions, where the parties cannot agree
  • More discretion for the FWC to approve proposed EBAs, including a less technical approach to the better off overall test (BOOT), more discretion to decide if and how a majority of employees have voted to support a proposed EBA, and a more flexible approach to existing tests about ensuring a proposed EBA was ‘genuinely agreed’.
• Allow unions to unilaterally initiate bargaining in a workplace
• Change the current tests that define ‘sham contracting’ to acknowledge different levels of knowledge and experience of industry participants
• Expand existing rights for workers to request flexible working conditions, and allow the FWC to decide when a business has ‘reasonable business grounds’ to refuse a request
• Make it illegal for contracts or employment instruments to contain ‘pay secrecy’ clauses, or to have fixed term contracts that last for more than two years; and
• Create tougher rules for anti-discrimination and workplace sexual harassment, including
  • Making employers vicariously liable for conduct of workers, contractors and agents
  • Allowing the FWC to order employers to pay compensation to workers.

Specific provisions relating to the CFMEU and commercial construction EBAs

CFMEU: The Bill as introduced does contain some restrictions that are designed to target the CFMEU – however they will only apply in limited circumstances, and only apply for a short period of time. The Bill will otherwise preserve and keep all the rights they have under the current law and these won’t change.

Commercial construction: When introducing the Bill, the Workplace Relations Minister, Tony Burke, stated that he may consider future amendments that make it clear “that multi-employer bargaining is not extended to industries in which it is neither appropriate nor necessary, in particular commercial construction.”

However, this is not in the Bill before the Parliament. Members should assume that commercial construction will be captured and all other sectors of the industry will definitely be covered, including residential and civil.

When these changes will become law

The Government is keen to have the Parliament vote on these changes as soon as possible. It is extremely likely that they will pass into law before the end of 2022.

More information

Contact the Workplace Relations team on 1300 30 50 10 for more information about these changes, or to get advice about your specific business needs.