A number of Acts have recently passed which amend the Fair Work Act and other legislation which affects employers.
The amendments are complex but there are some key points for employers to note, particularly as some of these changes attract civil penalties for a breach.
A key focus of the updated Act is gender equality, with a number of the changes aimed at improving gender pay discrepancies and increasing the scope of support for those experiencing family and domestic violence.
Prohibition of pay secrecy
It is common for employment contracts to contain a clause that requires employees to keep details of their remuneration and terms and conditions of employment confidential.
This is now prohibited under the Fair Work Act and a penalty will apply to employers if pay secrecy clauses are included in new contracts. Any current pay secrecy clauses will have no effect.
Asking about or disclosing pay is now considered a workplace right, which means that employers cannot take ‘adverse action’ against an employee if they exercise this right by asking another employee about their pay or sharing their own remuneration details.
The intent behind this change is to promote transparency and encourage gender equality in pay.
Paid family and domestic violence leave[1]
From 1 February 2023 (1 August 2023 for small business employers), employees will be entitled to 10 days paid family and domestic violence leave. This replaces the current 5 days unpaid leave, which continues to apply until the paid entitlement comes into effect.
The entitlement does not have to be accrued and will be available to employees upon commencement. However, it will not accumulate from year to year.
The leave can be used to deal with the impact of family and domestic violence, for example to attend court hearings, to access police services, to attend counselling or medical appointments.
Employees who are part time or full time can take paid family and domestic violence leave at their full pay rate for the hours they would have worked during that period.
Casual employees will be paid at their full pay rate for the hours they were rostered to work in the period they took leave.
The Act also introduces a right for employees experiencing family and domestic violence (or who have an immediate family or household member who is) to request flexible working arrangements.
Employers can only refuse a request if they have ‘reasonable business grounds’ for doing so and are obliged to make ‘genuine efforts’ to find alternative arrangements and provide a written explanation for any refusal.
Limits on fixed and maximum term contracts
Employers can no longer engage employees on a fixed term contract:
- For more than 2 years (either through a single contract or consecutive agreements); or
- On more than 2 consecutive fixed or maximum term contracts (regardless of their length).
There are some exceptions to this rule, if:
- a Modern Award specifically allows it;
- the person earns above the high-income threshold when the contract is entered into; or
- the role is for a true, fixed-term purpose such as to cover during emergencies, peak periods or temporary staff absences, to perform a particular task, or where the work is government-funded for more than 2 years and there is no reasonable prospect of funding being renewed.
Employers must also provide fixed-term employees with a Fixed Term Information Statement.
The change will be formally introduced after a 12-month transition period starting 8 December 2022.
The Fair Work Act is a federal piece of legislation, meaning these changes affect employers and employees across Australia.
If you require advice regarding your employment contracts and arrangements, please contact Heather Richardson or Isabella Royce to discuss.
[1] Fair Work Amendment (Paid Family and Domestic Violence Leave) Act 2022
