Attention Employers- Amendments to the Fair Work Act

On 6 December 2022, The Federal Government has passed the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (‘the Amendment Act’), which will affect employment agreements and contracts.

Here we discuss some of the key changes to employment contract compliance requirements

Fixed or Maximum-Term Contracts   

Traditionally, fixed or maximum-term contracts prevent employees from claiming an unfair dismissal when their contract has expired. As of 6 December 2023, the Amendment Act now restricts employers from using such contracts.

To avoid unfair dismissal claims, the employment contract would be drafted in a way that has no guarantee of further employment. The Amendment Act prevents fixed or maximum-term contracts if:

  1. The contract’s term exceeds two years;
  2. The contract allows for renewal that would see the term exceeding two years; or
  3. There are consecutive contracts for the employee to perform the same or substantially similar work

Section 333F of the Amendment Act outlines some exceptions to this.

Family and Domestic Violence Leave

Currently, all employees are entitled to five days of unpaid family and domestic violence leave each year. Some businesses may provide more to their employees in their contracts or workplace policies.

From 1 February 2023 (or 1 August 2023 for small business employers), all employees, including casual and part-time, will be entitled to 10 days of paid family and domestic violence leave each year.

If a request is made for flexible work due to caring for family members over the age of 55 or in domestic violence situations, an employer cannot unreasonably withhold consent to the leave request.

Pay Secrecy Clauses

Pay secrecy clauses were commonly included in employment contracts to prevent employees from discussing remuneration.

Historically, employers argued that such clauses allowed them to assess remuneration individually based on experience and performance. It also prevented co-workers from comparing salaries and pushing for pay rises, incentives, or bonuses.

From 7 December 2022, pay secrecy clauses are no longer allowed. The Amendment Act creates a workplace right for employees to ask, disclose or discuss their remuneration and any associated terms. The drive for this change is to reduce gender-based pay discrimination and increase workplace transparency.

What does this mean for employers?

Employers should review their workplace contracts and policies to ensure they are compliant with the new provisions. A lack of action may be the basis of adverse action proceedings or penalties. Some key actions to take are:

  • Review workplace contracts and remove/amend all clauses that would be in breach these new provisions under the Amendment Act
  • Review internal policies and procedures for considering flexible work arrangements
  • Ensure any changes to payroll systems are made to account for changes Family and Domestic Violence Leave entitlements.

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