The recently approved Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 has brought historic changes to Australia’s industrial relations (IR). The reforms are set to have far-reaching effects on the nation’s employment and business landscape for both employers and employees, meaning new opportunities and challenges are on the horizon.

In the recently held webinar “Fair Work Amendment Act 2022: New Opportunities and Challenges in Australia,” Craig Goldblatt, VP of Partnerships and Alliances at G-P, joined Nicholas Potter, legal expert and Employment Counsel at G-P, to discuss what these legislative updates mean for companies and how to navigate the reforms’ impending challenges while maximizing opportunities.

What the law changes

The Fair Work Amendment Act 2022 made the most substantive changes to the following areas:

  • Fixed term contracts
  • Pay secrecy prohibition
  • Flexible work arrangements
  • Sexual harassment
  • Enterprise bargaining
  • Anti-discrimination
  • Equal remuneration
  • Pay rates

Key themes

A poll question at the start of the session revealed that 81 percent of the participants were not confident in their understanding of the IR reforms. Fortunately, while the changes are complex, the speakers pointed out a few main themes, making it easier to grasp the law’s intentions and ideas.

For example, many of the reforms are geared towards increasing statutory protections for employees. These include the expansion of the anti-discrimination and sexual harassment provisions and the prohibition of pay secrecy, which, according to Potter, is intended to promote “frank and fearless discourse about pay and create a fairer and more balanced workforce.”

When it comes to flexible working, the Amendment Act has brought about significant changes. Given the prevalence of remote and hybrid work during the pandemic, the reforms expanded the circumstances in which an employee may request flexible working arrangements, and introduces important mechanisms to support pregnant employees or workers experiencing domestic violence. Employers are required to follow a prescriptive process regarding these requests, including providing a written response within 21 days. The Fair Work Commission (FWC), Australia’s national workplace relations tribunal, will also be empowered to resolve flexible work disputes.

In fact, another key aim of the reforms is precisely to boost the scope and powers of the FWC and the Fair Work Ombudsman (FWO) to improve the efficiency of processes related to industrial relations, which means business operations can start or resume more quickly.

Challenges companies can expect

Aside from the considerable challenge of understanding the nuances of the IR reforms, Potter noted a couple of other potential areas of concern for companies.

Penalties for noncompliance, for example, have increased. The cap for small claims proceedings went from AUD 20,000 to AUD 100,000. Potter added that under the small claims jurisdiction, a successful party may be able to claim their filing fees back (as costs) from the opposing party.

He also mentioned that the prohibition of pay secrecy can be particularly challenging, especially for international employers, since it’s a common inclusion in most employment contracts outside of Australia. He recommends that companies review their employment contracts to make sure pay secrecy clauses are removed for Australia-based workers because, “by virtue of this new prohibition, that pay secrecy clause will inherently be invalidated.” For contracts that will be made after June 2023, including the clause may result in fines.

Potter clarified that the prohibition of pay secrecy does not mean there is an obligation for employers to proactively publicize salary rates. However, if an employee posts their pay details on social media, for example, employers would have to evaluate whether it is actionable. While workers do have the freedom to share their monetary rate, they could inadvertently reveal internal company information that might be confidential.

It is also worth noting that the increased employee protections also apply to international employees working in Australia, whether they are citizens of the country or not. Before the pandemic, international employees held more than a quarter of the nation’s jobs, underscoring Australia’s reliance on global talent.

Opportunities to consider

There are certain industries that are expected to grow from the IR reforms. According to Potter, education and training, and travel and entertainment, which were particularly hit hard during the pandemic, will benefit from these changes. He stressed, however, that STEM (science, technology, engineering, and mathematics) industries are the “absolute winners” in terms of growth potential resulting from these reforms.

While the Fair Work Amendment Act 2022 increases the protections for employees, it also benefits employers in a few key ways.

According to Potter, the more streamlined approach to industrial relations is designed to make Australia’s “complex [Fair Work] system more approachable.” Essential functions of the Registered Organisations Commission (ROC), the independent regulator of unions and employer associations, and the Australian Building and Construction Commission (ABCC), enforcers of the Fair Work Act in the construction industry, will be absorbed by the FWC and FWO, respectively.

Potter added that by consolidating the market regulators, “those looking to engage more robustly with the Australian industrial relations system, whether to expand in-country or to grow, won’t have to worry about all these random side commissions and agencies, and they really just have that single source of truth and that single contact point.”

Goldblatt also agreed that the change is positive. He said it used to be that “each time there’s a change, they produce another organization. Bringing those together into a one-stop shop is tremendous.”

This simplification extends to enterprise agreements. Potter noted that in noncontentious environments where all parties are amenable to the terms of a proposed agreement, the approval process is much more streamlined, which can result in getting the workforce up and running much faster.

Where to go from here

In another poll question, it was revealed that 79 percent of participants considered access to talent as a top priority when entering new jurisdictions. This result is particularly insightful because of how critically tight the Australian labor market is, which can be seen in the record-low unemployment rates the country has experienced in recent months.

Potter, however, offered a different take. He said the high participation rate is a reflection of Australia’s skilled and motivated workforce. The challenge for employers is to “create an environment to draw and attract these employees.” He added that “for an employer that wants high-quality talent, it’s open season.”

In a previous interview, Potter emphasized that “in this post-pandemic environment, a lot of companies are looking to make the most of this remote work, war-for-talent environment.”

Amid these opportunities, Potter cautioned employers to make sure they stay informed and compliant. He claimed that “the worst thing an employer could do would be to assume that Australia operates the same way as another jurisdiction.”

Goldblatt supported Potter’s statement, adding “there are a number of suppliers in the Australian market where you can essentially dip into for advice without having in-house lawyers.”

Build your everywhere workforce with confidence

HR, legal, compliance, hiring — there’s a lot to think about when you’re expanding, and many companies don’t have the bandwidth to cover it all. Don’t let the stress of compliance slow your plans for global success. ​The value of partnering with an expansion expert like G-P is that you never have to worry about juggling complicated labor laws and evolving regulations again. Our industry-leading global employment solution offers everything you need to build your global workforce faster, with the largest team of HR and legal experts at your side to handle the details.

Learn more about how G-P can help your company quickly and compliantly hire talent in 180+ countries, including Australia, in minutes. Book a demo today.

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