Fair Work Act changes now in force

The amended Fair Work Act is now in operation, and whilst some changes will be phased in, there are a number of key changes that employers need to be immediately aware of.

A union bargain representative can now provide a written request to bargain to the employer and the employer must then bargain in good faith with them if:

• the proposed agreement replaces a single enterprise agreement that has passed its expiry date,
• no more than 5 years have passed since the expiration of the agreement, and
• the proposed agreement will cover the same, or substantially the same, group of employees as the current agreement.

Previously, a union would have needed to obtain a majority support determination to compel an employer to bargain. The practical implication is that a union acting on behalf of a single member can now force an employer to commence bargaining.

What should we be doing? If you have an enterprise agreement that will soon pass its expiry date, or you have an expired EA, you should review your strategy to determine any potential risks and if you should commence negotiations for a new EA.

Many employment contracts require that employees keep their remuneration details confidential, and the employer has been able to take disciplinary action against an employee if that requirement is not met.

Employment contracts entered into from 7 December 2022, or current contracts that do not contain pay confidentiality requirements, must not include such requirements and those employees are free to disclose or not disclose their remuneration with other employees.

Pay confidentiality requirements in current employment contracts will continue to operate until the contract is varied or a new contract is entered into.

What should we be doing? Employers should review their standard contracts to remove any pay confidentiality clauses for future employees. Employers should also be mindful of any future contracts or contract amendments for current employees such as promotions.

From 6 December 2023, the use of fixed term contracts for the same role will be limited to 2 years or 2 consecutive contracts, whichever is the shorter. A fixed term contract that breaches these requirements will continue to operate in all respects except the purported end date meaning that the employee will become a permanent employee.

Some exceptions identified by the Federal Government to these limits will apply where it is genuinely necessary and appropriate, including:

• performing a discrete task for a fixed period,
• apprentices and trainees,
• undertaking essential work during a peak demand period (such as a harvest),
• temporarily replacing another employee on long leave (such as workers compensation leave, long service leave, parental leave), or
• earning above the high-income threshold (currently $162,000 plus superannuation).

Existing fixed term contracts will not be affected by this change, however if a subsequent fixed term contract is entered into the time period of the first contract will need to be taken into account.

What should we be doing? Employers should review why and how fixed term contracts are used. Alternative options will need to be explored in preparation  for the change.

Agreements made before 31 December 2009 will automatically cease operation on 6 December 2023.

Employers who still have such agreements are required to notify affected employees prior to 6 June 2023 that a zombie agreement applies to their employment, and that the agreement will cease on 6 December 2023 unless an extension application is made to the Fair Work Commission.

After the agreement ceases, the employer and the employee will revert to the applicable modern award unless a new enterprise agreement is negotiated.

What should we be doing? Employers who use zombie agreements should use the next six months to plan the transition to the modern award, and if appropriate proactively negotiate a new enterprise agreement. Transition to the modern award will likely require the implementation of a range of payroll and operational changes.

Our consultants are continually monitoring the implementation of the amendments to the Fair Work Act, and their implications. If you would like more information on the impact the IR reforms might have on your organisation, please contact us here and a Mapien Workplace Strategist will be in touch ASAP.