Bills Digest No.
34, 2022–23
PDF Version [814KB]
Jaan Murphy and Scanlon WIlliams
Law and Bills Digest Section
Elliott King
Economic Policy Section
7 November 2022
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Key points
- The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 aims to make numerous changes to industrial relations legislation with the intention of:
- encouraging and facilitating enterprise bargaining, and multi-business enterprise bargaining in particular
- simplifying the bargaining and approval processes for enterprise agreements, including simplifying the better off overall test (BOOT)
- improving job security and gender equity, including by limiting the use of fixed term contracts and prohibiting pay secrecy clauses
- improving workplace conditions and protections by providing an enforceable right to request flexible working arrangements
- abolishing the Australian Building and Construction Commission and making the Fair Work Ombudsman the workplace relations regulator for the building and construction industry
- abolishing the Registered Organisations Commission and transferring its functions to the General Manager of the Fair Work Commission and
- enacting other measures not examined in this Digest.
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Contents
Purpose of the Bill
Structure of the Bill
Background
Committee consideration
Policy position of non-government
parties/independents and major interest groups
Financial implications
Statement of Compatibility with Human
Rights
A brief history of Commonwealth
enterprise agreement legislation
Key issues and provisions
Key issue #1: changes to enterprise
agreement processes
Key issue #2: changes to
multi-business enterprise bargaining
Key issue #3: abolition of the ABCC
Key issue #4: improving job security
Key issue #5: promoting flexible
working arrangements
Key issue #6: promoting gender equity
by prohibiting pay secrecy
Concluding comments
Date introduced: 27
October 2022
House: House of
Representatives
Portfolio: Employment
and Workplace Relations
Commencement: As
set out in the body of this Bills Digest.
Links: The links to the Bill,
its Explanatory Memorandum and second reading speech can be found on the
Bill’s home page, or through the Australian
Parliament website.
When Bills have been passed and have received Royal Assent,
they become Acts, which can be found at the Federal Register of Legislation
website.
All hyperlinks in this Bills Digest are correct as
at November 2022.
Table of
acronyms
Purpose of
the Bill
The purpose of the Fair Work Legislation Amendment (Secure
Jobs, Better Pay) Bill 2022 (the Bill) is to amend the Fair Work Act 2009
(FW Act), Fair
Work (Registered Organisations) Act 2009 (FWRO Act), Building and
Construction Industry (Improving Productivity) Act 2016 (BCIIP Act)
and related legislation.
These amendments aim to:
- abolish
the Australian Building and Construction
Commission (ABCC) and transfer amended regulatory responsibilities and
existing ABCC matters to the Fair Work
Ombudsman (FWO)
- abolish
the Registered Organisations Commission
(ROC) and transfer regulatory responsibilities and existing matters to the General
Manager (GM) of the Fair Work Commission
(FWC), as well as providing additional enforcement options
- improve
job security by prohibiting certain fixed-term contracts
- promote
flexible working arrangements (FWAs) by:
- allowing
employees to enforce the existing right to request FWAs
- increasing
obligations on employers to genuinely consider, negotiate and respond to requests
for FWAs, including applying penalties for refusing FWA requests on
unreasonable grounds and
- empowering
the FWC to deal with disputes about requests for FWAs
- promote
gender equity and strengthening the legal framework in respect of sexual
harassment and anti-discrimination protections
- promote
wage growth by:
- revising
the enterprise agreement (EA) bargaining, approval, termination and dispute
resolution processes, including compulsory arbitration by the FWC for
intractable EA bargaining disputes
- bargaining,
approval and terminations processes
- revising
and renaming existing multi-business EA processes and
- revising
the existing ‘single interest employer authorisation’ regime to allow multiple
employers to bargain together in wider circumstances and
- revise
when and how protected industrial action (PIA) can be taken, including:
- changes
to timeframes for the taking of PIA (designed to avoid disruptions to business,
whilst also allowing businesses to arrange contingencies)
- allowing
PIA to be taken in relation to some, but not all, multi-business EAs and
- changes
to de-escalate disputes by requiring the FWC to direct parties to a dispute to
attend mandatory conciliation conferences and prior to the closure of voting on
a PIA ballot.[1]
Structure of the Bill
The Bill has 27 Parts:
- Parts
1 and 2 deal with the abolition of the ROC
- Part
3 provides for abolition of the ABCC
- Parts
4 and 10 deal with improving job security
- Parts
4 to 9 deal broadly with gender equity and strengthening the legal
framework in respect of sexual harassment and anti-discrimination protections
- Part
11 deals with promoting workplace flexibility
- Parts
12 to 18 deal with enterprise bargaining, approval, termination and
dispute resolution
- Part
19 deals with Protected Industrial Action (PIA)
- Parts
20 to 23 deal with multi-business enterprise bargaining
- Part
24 proposes changes to improve access to the small claims process under the
FW Act (e.g. in relation to wage theft claims)
- Part
25 prohibits national system employers from advertising employment at a
rate of pay below minimum wages, and addresses some issues around advertisements
of piecework.
- Part
26 contains various application, transitional, saving and consequential
amendments and
- Part
27 changes workers’ compensation presumptive liability provisions for members
of the ACT Fire and Rescue Service.
Background
As the Bill contains a number of discrete measures,
background information is provided separately below in relation to each measure.
Which
workers are covered by the Bill?
Due to the constitutional powers of the Commonwealth, the FW
Act currently covers most, but not all, employers and employees in
Australia. Those that are covered form the national workplace relations system
(national system). The national system sets out clear entitlements and rules
for employers and employees.
As a result, certain parts of the Bill will not apply to
some workers and some employers, generally being those who are outside the
national workplace relations system. This includes workers and employers
outside the system as independent contractors or sole traders, or in the state
public sector in Western Australia, New South Wales, Queensland, South
Australia and Tasmania (see further details in footnote).[2]
Committee consideration
Senate Education and Employment Legislation Committee
The Bill has been referred to the Senate
Education and Employment Legislation Committee (the Committee) for inquiry
and report by 17 November 2022. Details of the inquiry are at the
inquiry homepage.
Selection of Bills Committee
At its meeting on 26 October 2022, the Senate Selection of
Bills Committee considered the Bill but was unable to reach agreement.[3]
The Bill was ultimately referred to the Senate Education and Employment
Legislation Committee for inquiry by the Senate. [4]
While, as set out above, a reporting date of 17 November 2022 was set by the
Senate, Senator David Pocock moved an amendment to the referral to instead
provide that the Committee would report on the first sitting day in 2023. This
amendment was narrowly defeated, by 33 votes to 32.[5]
Senate Standing Committee for the Scrutiny of Bills
At the time of writing, the Senate
Standing Committee for the Scrutiny of Bills had not yet commented on the Bill.
Policy position of non-government parties/independents and
major interest groups
The policy position of non-government parties,
independents and major interest groups in relation to the discrete measures
examined in this Digest are set out later in this Digest.
Financial implications
The Explanatory Memorandum notes that the Government has
committed $111.6 million over 4 years to support the implementation of measures
in the Bill.[6]
In terms of the financial implications of the measures proposed by the Bill on
employers and employees, the Office of Best Practice Regulation (OBPR) assessed
the quality of the regulatory impact analysis of the Bill as adequate and
sufficient to inform a decision. However, the OBPR noted that to be considered
‘good practice,’ the Regulatory Impact Statement would have benefited from,
among other things:
- additional
analysis setting out the potential impacts on productivity, real wages and
other distributional impacts, in particular on gender and
- statements
or evidence that the regulatory costs and their assumptions had been tested
with stakeholders, or otherwise an acknowledgement why this had not been
undertaken.
Statement of Compatibility
with Human Rights
As required under Part 3 of the Human Rights
(Parliamentary Scrutiny) Act 2011 (Cth), the Government has assessed the
Bill’s compatibility with the human rights and freedoms recognised or declared
in the international instruments listed in section 3 of that Act. The
Government considers that the Bill is compatible.[7]
Parliamentary Joint Committee on Human Rights
At the time of writing, the Parliamentary Joint Committee
on Human Rights had not yet commented on the Bill.
A
brief history of Commonwealth enterprise agreement legislation
Australia’s industrial relation system has previously
featured both what would be understood today as multi-enterprise agreements
(MEAs), and mandatory binding arbitration of bargaining disputes.
As Parts 12 to 16 of the Bill deal with EAs
in general, Parts 20 to 23 deal with various existing types of
MEAs, and Part 18 increases access to mandatory binding arbitration of
EA related disputes and extends it to some MEAs bargaining disputes, a
brief history of the evolution of the Commonwealth industrial relations system
is provided to give context to amendments proposed by the Bill in relation to
EAs in general, MEAs in particular, and the proposed arbitration powers of the
FWC.
Centralised wage setting via ‘awards’
The Conciliation and
Arbitration Act 1904 (the 1904 Act) established a Court
of Conciliation and Arbitration to deal with interstate industrial
disputes.[8]
Under the 1904 Act the Court was empowered to use various means to
encourage negotiated resolutions but, where this could not be achieved, also to
resolve disputes by mandatory, binding arbitration. Its decisions – the outcome
of that mandatory, binding arbitration – were called ‘awards’ and were legally
enforceable under the 1904 Act. In that regard, an ‘award’ under the 1904
Act was more akin to a workplace determination or multi-business enterprise
agreement under the FW Act than to modern awards in existence today.
The shift to enterprise bargaining
Gradual moves away from the centralised system began in
the late 1980s. The introduction of enterprise bargaining occurred from 1991,
when the first principles of enterprise bargaining were adopted by the
Australian Industrial Relations Commission.[9]
However, it only became the central focus of the Commonwealth industrial
relations system in 1993 with the introduction of the Industrial
Relations Reform Act 1993 (the 1993 Reform Act), which presented
a historic break from the past.
Enterprise bargaining carried the expectation that
employees and employers should work together at the enterprise level to agree
on conditions of employment, subject to a safety net of awards. The more
decentralised system heralded by enterprise bargaining created greater
potential for wages and conditions to match the individual circumstances of
employers and employees, while still giving employees the benefits of
collective action.
In 2015 the Productivity Commission’s (PC) inquiry into
the workplace relations framework concluded that the system on the whole ‘is
not dysfunctional — it needs repair not replacement’ and that ‘enterprise
bargaining generally works well, although it is often ill-suited to smaller
enterprises’.[10]
The following table shows how the focus moved from a
centralised wage-fixing system built around ‘awards’ to enterprise bargaining
under the Keating Government, the shift to individual agreements under the
Howard Government, followed by a shift back to enterprise bargaining in 2009
under the Rudd Government.[11]
Since then there also has been a gradual return to modern award coverage since
2010.
Table 1: How collective bargaining has evolved in
Australia
| Pre-1993 |
Centralised wage fixing and arbitration
Enterprise level variations negotiated between unions and
employers, and ratified by the Australian Industrial Relations Commission
(AIRC) through firm specific clauses or standalone enterprise awards.
Informal bargaining also occurred. If agreement was
reached on a ‘matter pertaining’, AIRC could make a consent award; if no
agreement was reached, AIRC could arbitrate.
|
| 1993 |
Enterprise bargaining
introduced
Underpinned by a safety net of
awards, introduction of good faith bargaining rules and a no-disadvantage
test.
Union (Certified Agreements) and
non-union (Enterprise Flexibility Agreements) agreements could be made.
Parties could bargain about ‘matters pertaining’. If agreement was reached,
collective agreement was made; if no agreement was reached, AIRC could
arbitrate.
|
| 1996 |
Enterprise bargaining
continues, individual statutory agreements introduced
Australian Workplace Agreements
(AWAs) prevailed over awards and any collective agreement, and could be
offered as a condition of employment, subject to a no-disadvantage test.
Union and non-union certified
agreements could be made, subject to a no-disadvantage test in comparison to
the award. Parties could bargain about ‘matters pertaining’; AIRC had
conciliation powers, but no power to arbitrate. Good faith bargaining
requirements were removed.
|
| 2006 |
Further changes to individual
statutory agreements
AWAs could undercut awards, until
a no-disadvantage test was restored in May 2007.
‘Enterprise flexibility’ terms in
collective agreements were prohibited; no new enterprise awards were to be
created.
Employers could put collective
agreements directly to an employee vote. Parties could bargain about ‘matters
pertaining’ but not ‘prohibited content’ or ‘pattern’ claims. AIRC had voluntary
conciliation powers, but could not arbitrate.
|
| Since 2009 |
Enterprise bargaining given
primacy again
Ability to make AWAs was removed,
collective bargaining was given precedence.
Parties can bargain about lawful
terms, but term unenforceable if not a ‘matter pertaining’.
Good faith bargaining
reintroduced. Fair Work Commission cannot arbitrate.
Enterprise agreements can be
modified through individual flexibility arrangements (IFAs), subject to a
better off overall test in comparison to the agreement. IFAs cannot be made a
condition of employment, and can be unilaterally withdrawn by an employee.
|
Source: Productivity Commission, Workplace
Relations Framework Inquiry Report, Volume 2,
(2015, 647)
Employees covered by enterprise agreement and impacts on
wages
Since they were first introduced, there was a steady
uptake of enterprise agreements from December 1991 to a peak of 25,152 in
December 2010. From that peak, the number of agreements that were current has
more than halved to 9,823 in the September quarter 2020 and then rose slightly
to 11,053 in June 2022, as the figure below demonstrates.
Figure 1 Number of current federal enterprise agreements
Source: Department of Employment and Workplace Relations
(DEWR), Trends
in Federal Enterprise Bargaining, (Canberra: DEWR, 2022).
In addition, the number of employees covered by current
enterprise agreement agreements shows similar trends — peaking at just over 2.6
million at its peak in the March quarter 2014 – before falling to just over 1.7
million in June 2022, as the figure below demonstrates.
The number of employees covered by current Federal
bargaining agreements shows similar trends — peaking at 2,626,100 in the March
quarter 2014 — before falling to just over 1.7 million in June 2022.
Figure 2 Number of employees covered by federal enterprise agreements
Source: DEWR, Trends
in Federal Enterprise Bargaining,
(Canberra: DEWR, 2022)
In terms of the effect of enterprise bargaining on wage
growth, available data shows that employees covered by enterprise agreements
have been receiving higher average annual wage increases (AAWI) than the
average for all employees, as measured by the Wage Price Index (WPI) since the
September quarter 2012.
The gap has narrowed considerably more recently as the
annual change in the WPI has continued to climb from 1.4% in the December
quarter 2020 to 2.6% in June 2022 while the AAWI series has continued to
plateau at around 2.6% per annum. (Figure3).
Figure 3 AAWI for federal enterprise agreements and WPI
Source: DEWR, Trends
in Federal Enterprise Bargaining, (Canberra:
DEWR, 2022); Australian Bureau of Statistics (ABS), Wage
Price Index, Australia, (Canberra: ABS, 2022): Table 1.
The decline in the number of employees covered by
collective agreements is supported by ABS data, albeit the extent of the
decline is much less pronounced than the data collected by the Department of
Employment and Workplace Relations (DEWR). Note that those on collective
agreements shown in the ABS data includes all employees potentially covered by
Federal or state industrial tribunals or authorities while the DEWR data refers
to those covered by the Federal system.
Data from the ABS
Employee Earnings and Hours survey shows employees covered by collective
agreements fell by 2,200 between May 2014 and May 2021 while the number covered
by awards increased by 798,700. This equates to an annual average increase of
5.2% for employees covered by awards between May 2014 and May 2021 while the
number covered by collective agreements virtually stagnated.
Key issues
and provisions
Due to the limited time in which to consider the large
number of measures contained in the Bill, this Digest only examines selected
elements of the Bill that deal with:
-
Changes to enterprise agreement processes – regarding EA bargaining,
approval, termination, and dispute resolution processes (including compulsory
arbitration for intractable EA bargaining disputes) and
-
Changes to multi-business enterprise bargaining – including revising and
renaming existing EA processes, with changes to the existing ‘single interest
employer authorisation’ regime
-
the abolition of the ABCC
-
improving job security
-
promoting flexible working arrangements and
-
promoting gender equity by prohibiting pay secrecy.
Key issue #1: changes to
enterprise agreement processes
An enterprise agreement is a legally enforceable agreement
made at the enterprise level between employees and their employer that contains
terms and conditions of employment, including wages. They operate for up to
four years from when approved by the FWC.[12]
The ALP’s Platform for the 2022
election included commitments to:
- ‘improve
access to collective bargaining’ (that is, enterprise agreements) and ‘ensure
that collective agreements are negotiated in good faith and genuinely agreed to
by a representative cohort of the workers to which they apply’ including
‘giving parties access to arbitration’ and
- prevent
‘unilateral terminations of collective agreements that reduce workers’
entitlements’.[13]
Parts 12 to 16 and 18 of the Bill
gives effect to those commitments with respect to enterprise agreements.
Initiating bargaining for certain replacement
enterprise agreements
Part 15 of the Bill will change how bargaining for
an enterprise agreement can be initiated.
The point at which the parties start the bargaining and
agreement making process is the notification time.[14]
Currently the notification time is when the employer agrees to or
initiates bargaining, or when a majority support determination, scope order, or
eligible authorisation in relation to a proposed new enterprise agreement made
by the FWC comes into operation.
The Bill expands the definition of notification time
and makes other changes, the effect of which is to permit an employee
bargaining representative to initiate bargaining for a single-enterprise
agreement where the proposed agreement will replace an earlier agreement that
has expired and:
- the
expiry date of the earlier agreement was within the last 5 years
- the
making of that agreement did not cause a single interest employer
authorisation to cease to operate and
- the
same, or substantially the same, group of employees will be covered by the
proposed agreement as was covered by the earlier agreement.[15]
However, the simplified process cannot be used to initiate
bargaining for a proposed greenfields agreement, a multi-enterprise agreement
or a single-enterprise agreement in relation to which a single interest
employer authorisation is in operation.[16]
The effect of the proposed changes is that an employee’s
bargaining representative could meet the definition of notification time,
and therefore initiate bargaining for a new enterprise agreement without
needing either the consent of the employer to bargain or the FWC to have made a
relevant determination, order or authorisation.[17]
In turn, this will simplify and speed up the process by which employees or
employee organisations can successfully initiate bargaining for a new
enterprise agreement, following the expiry of an existing single-enterprise
agreement.
Commencement of Part 15
Part 15 will commence on the day after the Bill
receives Royal Assent.[18]
Approval of enterprise agreements
Outside of the application of the better of overall test (BOOT)
discussed later in this Digest, concerns have existed for many years about how
the FWC approves enterprise agreements generally, and in particular in relation
to:
- so-called
‘small cohort’ agreements: ‘agreements with small groups of unrepresented and,
often casual, employees, that will then apply to large numbers of
yet-to-be-hired employees’[19]
and
- an
undue emphasis being placed on procedural requirements when agreements are
submitted for approval, leading to concerns with the rigidity and
process-driven nature of the EA approval process.[20]
What does the Bill do in relation to how enterprise
agreements are approved?
Part 14 of the Bill aims to simplify the
requirements for approval of an enterprise agreement by removing the current
rigid pre-approval steps and rules-based approach to bargaining, replacing them
with a more flexible, principles-based approach. It does this by removing:
- the
requirement to provide employees with access to the enterprise agreement during
a 7 day ‘access’ period ending immediately before voting commences and
- in
some circumstances, the requirement to issue a notice
of employee representative rights (NERR) and to wait 21 days after the
issue of the last NERR before requesting employee vote on the agreement.[21]
The Bill replaces the existing pre-approval steps with a
principled-based approach to the approval of EAs, namely that the FWC be
satisfied that an enterprise agreement has been genuinely agreed
to by the employees covered by the agreement.[22]
Importantly, in order to be satisfied that an EA has been genuinely agreed to,
the FWC must be satisfied that:
- the
employees are sufficiently representative of the agreement, having
regard to the employees the agreement is expressed to cover and
- the
employees have a sufficient interest in the agreement.[23]
The effect of this, and the note to proposed subsection
188(2), is that a small cohort of employees will not be considered
sufficiently representative where the EA is intended to cover a much wider
workforce, and therefore the agreement of unrepresentative small cohorts cannot
be used as basis for approval of a proposed EA.
Finally, the Bill will require the FWC to publish a
statement of principles that sets out guidance for employers on the
requirements for ensuring that an EA is genuinely agreed, and the FWC will be
required to take into consideration that guidance when determining whether an
EA has been genuinely agreed.[24]
The statement of principles on genuine agreement must deal with a range of
matters, including informing employees of bargaining for a proposed EA, their
right to be represented by a bargaining representative and explaining to
employees the terms of the proposed EA and their effect.[25]
Commencement of changes to the approval process
Part 14 will commence on the earlier of a day fixed
by Proclamation or after six months after the Bill receives Royal Assent. The
changes will not apply to a proposed EA for which the notification time occurs
before the commencement, and will not apply to variations of an EA where the
employer’s request that employees vote to approve the variation occurs before
the commencement.[26]
Changes to the Better Off Overall Test
Currently, an EA passes the BOOT if the FWC is satisfied
that each award covered employee, and each prospective award covered
employee, would be better off overall if the EA applied to the employee than if
the relevant modern award applied to the employee.[27]
(In essence, that each employee would be better off under the EA than
under the Award). Critically, it is not sufficient that a majority of the
employees would be better off.[28]
A persistent criticism of the current application of the
BOOT is that it can be applied in an overly technical (and on occasions,
hypothetical) way, including on a line-by-line basis.[29]
Changes to how the BOOT is applied
Part 16 of the Bill amends the BOOT with the aim of
removing unnecessary complexity and proposing what is said to be a ‘simple,
flexible, and fair’ assessment process.[30]
It does this by:
- requiring
the FWC, when applying the BOOT, to give primary consideration to the views of
specified persons, including employer and employee representatives
- specifically
stating that the BOOT requires a global assessment of whether each employee
would be better off overall if the EA applied
- providing
that the FWC may only have regard to work patterns or kinds of work if they are
reasonably foreseeable at the test time (thus removing consideration of
hypothetical scenarios) and
- providing
the FWC power to amend or remove a term in an EA that does not meet the BOOT (designed
to limit the use of undertakings).[31]
Part 16 also establishes a reconsideration process
for existing EAs. Where it is later discovered that award covered employees
engaged (or currently engage) in other patterns or kinds of work that were not
properly considered during the previous EA approval process, parties can apply
to the FWC to have the EA reconsidered.[32]
That is, reconsideration of an EA can occur where there is a material change in
working arrangements of award covered employees, or where there was a material
oversight of working arrangements of award-covered employees at the time an EA
was considered by the FWC. Where this occurs, the FWC will have the power to
accept an undertaking or amend the EA, if concerned that it did not pass the
BOOT.[33]
The Explanatory Memorandum notes that the reconsideration process is:
to permit adjustments to the bargained outcome to the extent
necessary to address the FWC’s concerns, not to reduce the entitlements or
interfere with the working arrangements for employees who are not affected by
the concerns, or unnecessarily disrupt the operations of the enterprise.[34]
Commencement
Part 16 will commence on the day after the Bill
receives Royal Assent. Notably, any amendments made to the BOOT will not
operate retrospectively.[35]
Mandatory arbitration of intractable disputes
Currently under the FW Act, the FWC can only
arbitrate a bargaining dispute where:
- the
parties to a proposed EA have agreed or
- in
very limited circumstances related to:
- the
termination of PIA or
- where
there are serious and sustained contraventions of a bargaining order that
significantly undermine the bargaining process.[36]
This means that for intractable EA bargaining disputes,
arbitration is generally unavailable as ‘the bar for reaching arbitration’
under the FW Act ‘is high’.[37]
Increased availability of mandatory arbitration
Part 18 will repeal the existing EA arbitration
provisions. It would replace them with a new regime to address intractable
bargaining disputes. The changes will allow EA bargaining disputes to be
resolved by the FWC where there is no reasonable prospect of the parties
reaching agreement. This would involve the FWC making an intractable
bargaining declaration and/or workplace determination.
A bargaining representative for an EA other than a
‘greenfields agreement’[38],
or a proposed cooperative workplace agreement can apply to the FWC for an intractable
bargaining declaration.[39]
The FWC can only make an intractable bargaining
declaration where:
- steps
were taken to deal with the dispute under section 240 of the FW Act
(which allows bargaining representatives to seek the assistance of the FWC)
- there
is no reasonable prospect of agreement being reached if the FWC does not make
the declaration and
- it
is reasonable in all the circumstances to make the declaration, taking into account
the views of all the bargaining representatives for the EA.[40]
If the FWC makes an intractable bargaining
declaration, the FWC can impose a post-declaration negotiating
period. Where such negotiations are unsuccessful in the period
specified by the FWC, or, where a post-declaration negotiating period
was not imposed, the FWC must then make an intractable
bargaining workplace determination. This results in the FWC determining
the terms of the EA, other than those agreed to by the parties.[41]
Commencement of changes to application of the BOOT
Part 18 will commence at the same time as Part 20
of the Bill, which relates to supported bargaining. However, in making an intractable
bargaining declaration the FWC may have regard to conduct engaged in before
or after the changes commence.[42]
Changes to when enterprise agreements can be terminated
Whilst the BOOT only requires comparison against the
modern award, not against any previous or existing EA, in practice employees
will generally compare the terms of any existing EA to the terms in a proposed
EA. The Productivity Commission notes this means that whilst employees might
conceivably receive lower rates of pay than under a previous EA, ‘in normal
circumstances this is unlikely’.[43]
However, the threat of, or actual, termination of an EA during bargaining for a
new EA is a circumstance that can lead to such an outcome, as well as
disrupting bargaining itself.[44]
When can enterprise agreements currently be terminated?
Currently once an EA has passed its nominal expiry date,
an employer, employee, or union covered by the EA may apply to the FWC to have
the agreement unilaterally terminated.[45]
The FWC is required to terminate the agreement if:
- it
is satisfied that termination is not contrary to the public interest, and
- it
considers that it is appropriate to terminate the agreement having regard to
all the circumstances, including the views of the employers, employees and
employee organisations covered by the agreement, and the likely effect that
termination would have on each of them.[46]
Factors which can lead to a stronger case for termination
are the length of time since the expiry of the EA, relevance to the workplace
and degree of coverage of the workforce.[47]
New rules about termination of enterprise agreements
Part 12 of the Bill overhauls the rules for
terminating an EA after its nominal expiry date. It aims to stop employers from
applying to the FWC to unilaterally terminate an EA agreement where the
termination would result in reducing employees’ entitlements, other than in
particular circumstances related, broadly speaking, to business viability. Part
12 of the Bill will do this by providing that an expired EA can only be
terminated (and must be terminated) where one of the following is satisfied:
- the
continued operation of the EA would be unfair for the employees covered
- the
EA agreement does not, and is not likely to, cover any employees or
- all
of the following apply:
- the
continued operation of the EA would pose a significant threat to the
viability of a business carried on by the employer
- termination
of the EA would be likely to reduce the potential of terminations of employment
due to redundancy or insolvency or bankruptcy of the employer and
- each
employer has given the FWC a guarantee of termination entitlements contained
within the EA (this would prevent a reduction in termination entitlements for a
defined period).[48]
Termination during bargaining
In addition, Part 12 of the Bill effectively
provides that when an application to terminate an EA is made during bargaining
for a new EA, the FWC must consider the effect this may have on the
employees’ bargaining position during negotiations for a new EA.[49]
The Explanatory Memorandum notes this:
is intended to prevent an enterprise agreement being
terminated as a bargaining tactic, which would be unfair for the employees
covered by the agreement .[50]
Other considerations
Part 12 requires the FWC to consider the views of
employees and any employers and employee organisations before deciding whether
to terminate an EA or not.[51]
In addition, the FWC may also consider other relevant matters in deciding
whether to terminate an EA.[52]
Finally, if any of the employers, employees, or employee
organisations oppose the termination, the matter must be heard by a Full Bench
of the FWC (except in limited defined circumstances).[53]
Commencement
The items in Part 12 commence the day after the Bill
receives Royal Assent.[54]
Position of non-government parties/independents and major
stakeholders
Whilst at the time of writing the position of the
Opposition, non-government parties and independents in relation to the changes
proposed by Parts 12 to 16 and 18 of the Bill in particular
could not be determined:
- the
Opposition has
indicated it will oppose the Bill as a whole[55]
and
- the
Australian Greens 2022 election platform included removing ‘the right to
terminate agreements as a bargaining tactic’.[56]
The Australian
Industry Group argues the proposed capacity for the FWC to arbitrate
intractable bargaining disputes ‘will only encourage unions to make unreasonable
demands and risks, taking us back to a system of centralised setting of wages
and conditions’.
The Australian
Chamber of Commerce and Industry welcomed the changes to the BOOT, but
stated that the proposed capacity for the FWC to arbitrate intractable
bargaining disputes would ‘see bargaining disputes quickly referred to
compulsory arbitration’. The Business
Council of Australia also expressed support for the changes to the BOOT,
but expressed concern about other aspects of the Bill. The Australian
Council of Trade Unions supports the Bill, but did not make any specific
comments about the changes proposed by Parts 12 to 16 and 18
of the Bill.
Key issue #2: changes to multi-business enterprise
bargaining
The number of employees covered under enterprise
agreements has declined sharply over the last decade, with both employee and
employer groups claiming that the enterprise bargaining system is ‘broken’.[57]
The Productivity Commission took a different view, that ‘enterprise bargaining
generally works well, although it is often ill-suited to smaller enterprises’.[58]
The Bill intends to address both decline in EA coverage
and bargaining for EAs by:
- adjusting
the enterprise bargaining framework to facilitate bargaining generally
(discussed above) and
- facilitating
bargaining in specific industries, primarily low-paid industries and employers
with ‘common interests’ (see below).
Extensive adjustments specifically to the
multi-enterprise bargaining framework raises questions about the industrial
relations systems trajectory since the early 1990s. Since the reforms commenced
in the 1990s, the Australian industrial relations system has shifted from a
mostly centralised system where specialised federal and state courts/tribunals
effectively set wage and employment conditions, to a mostly federalised and
decentralised wage setting system where such matters are negotiated at
individual enterprises.[59]
The primary justification for decentralised industrial
relations is that it provides the flexibility for individual enterprises to
adopt productivity enhancing work practices.[60]
Although the evidence that this has been achieved is mixed due to numerous
confounding factors, there is a generally accepted view that it did lead to a
permanent increase in productivity in the 1990s.[61]
However, since the 2000s, enhancements to labour productivity do not appear to
have yielded similar results, despite ongoing reforms to the industrial relations
system, including the creation of the Fair Work system.[62]
There has also been a general stagnation in wage growth
over the last decade, with wages declining in real terms due to the current
inflationary shock.[63]
The proposed changes to the bargaining framework are proffered as a solution to
this crisis, with multi-enterprise bargaining taking a central role. This
implies that there is a deficiency in enterprise-level bargaining which the
government considers will not be resolved through further decentralisation.
How common or unusual is multi-employer bargaining?
Most OECD countries employ some form of collective
bargaining in their industrial relations systems.[64]
The systems range from decentralised models, such as Australia’s
enterprise-level focused bargaining framework, to highly centralised
sector-level arrangements employed in Norway, and include systems that feature
firm (or enterprise) level bargaining, sector-level or even national-level
bargaining.[65]
In that regard the Australian system is, in practice, focused on single
enterprise-level bargaining, despite containing provisions that allow
multi-enterprise bargaining.[66]
The OECD’s analysis does find favourable evidence
concerning wage premiums and collective bargaining coverage, particularly for
those engaged in bargaining at the firm-level, but, overall performance tended
to be more strongly associated with how well ‘co-ordinated’[67]
a collective bargaining system is.[68]
The evidence concerning macroeconomic linkages with
collective bargaining was weak, and faced numerous methodological constraints –
bargaining systems differ considerably across OECD countries, even among those
sharing similar characteristics. This limits the practicability of
international comparisons for policy makers.[69]
Current multi-employer enterprise bargaining streams
under the Fair Work Act
The FW Act already provides for three different
types of multi-employer EAs:
- low
paid authorisations,
- multi-enterprise
agreements and
- single
interest employer authorisations.[70]
What is the Bill seeking to change?
The Bill proposes numerous amendments to bargaining for,
approval of, and variation of the three existing types of multi-enterprise bargaining
agreements. The table below summarises the relevant parts of the Bill.
Table 2: multi-enterprise agreement related amendments
| Part of Bill |
What does it do? |
| Part 20 |
Amends and renames the low paid authorisations regime
as the ‘supported bargaining’ stream and allows for the creation of Supported
Bargaining Agreements (SBAs). |
| Part 21 |
Makes substantial amendments to how single interest
employer authorisations (SIAs) are made, and how single
interest employer agreements (SIEAs) can be made. |
| Part 22 |
Makes amendments to how and when various MEAs can be
varied to remove employers and employees. |
| Part 23 |
Makes changes to the bargaining process for multi-employer
enterprise agreements and renames them cooperative workplace agreements
(CWAs). |
These changes accord with the Labor
Party’s 2021 Platform, and appear to align with the Jobs and Skills Summit
outcome:
Ensures workers and businesses have flexible options for
reaching agreements, including removing unnecessary limitations on access to
single and multi-employer agreements[71]
All agreements are subject to the exclusion of persons to
which proposed section 178C apply.[72]
That section would allow the FWC to make an order excluding a
person from being a bargaining representative due to the person having a record
of non-compliance with the FW Act.
Supported bargaining stream (Part 20)
Part 20 replaces the current ‘low-paid bargaining’
framework with a ‘supported bargaining’ stream.
Background
to the supported bargaining stream
The current low-paid bargaining stream set out in Part
2-4 Division 9 of the FW Act is a form of multi-enterprise
bargaining that intended to ‘to assist and encourage low‑paid employees and their employers, who
have not historically had the benefits of collective bargaining, to make an
enterprise agreement that meets their needs’.[73]
The low-paid bargaining stream is a special type of
multi-enterprise bargaining available only to ‘low-paid’ employees. Note that
‘low-paid employee’ is not defined in the FW Act, nor is the low-paid bargaining
stream available for the negotiation of greenfield agreements. To commence
bargaining under this stream, a representative can apply to the FWC for a ‘low-paid
authorisation’. If granted, an authorisation must specify the envisaged
coverage of employers and employees.
However, the requirements that must be met for an
authorisation to be granted are restrictive, requiring the FWC to take into
account a plethora of factors when considering an authorisation, including the
history of bargaining in that industry.[74]
The result has been that applications in the low-paid bargaining stream have
been rare. No applications were made between 2014–15 to 2020–21, and only five between
2009–10 and 2013–14.[75]
How the new supported bargaining stream will operate
The supported bargaining stream will permit
bargaining across multiple employers in low paid industries (such as aged care,
disability care, and early childhood education) and those who may face barriers
to bargaining.
Under the changes, a bargaining representative or an
employee organisation entitled to represent the industrial interests of an
employee (unless excluded by the FWC) can apply to the FWC for supported bargaining authorisation requiring
multiple employers to bargain together for a supported
bargaining agreement (SBA).[76]
The FWC can only make an authorisation where satisfied
that at least some of the employees are represented by an employee organisation
and it is appropriate, having regard to factors including:
One notable change is that the FWC will no longer be
required to consider the history of bargaining in the industry in which
employees work.
Further, a supported bargaining authorisation
cannot specify an employee who is covered by a single-enterprise agreement
which has not passed its nominal expiry date, unless the FWC is satisfied that
an employer sought to make a single-enterprise agreement with the intention of
avoiding being specified in an authorisation.[78]
In addition, if made, any employer specified in a SBA must not initiate
bargaining, agree to bargain or be required to bargain for any other kind of EA
(unless an application is made to the Commission to remove the authorisation).[79]
Additionally, proposed subsection 58(3) ensures that for specified
employees and employers who are currently under a single-enterprise agreement
when a SBA comes into effect, the single-enterprise agreement will cease
to apply to the employee and can ‘never so apply again’.[80]
Importantly, once made, a SBA can be varied to add further
employers or employees on application to the FWC, with or without the consent
of the employer. In the absence of employer consent, the FWC must vary
the authorisation if:
- a
majority of employees want to be covered by the SBA and
- it
is appropriate for the employees to be covered by the SBA, having regard to the
views of each employee organisation covered and employer who would be covered.[81]
The FWC may also have regard to the factors that it is
required to consider when deciding whether to makes a supported bargaining
authorisation (discussed above).
The FWC may reject an application for
a variation of an SBA which has been applied for with the consent of both
employer and employees if it is satisfied that there are ‘serious public
interest grounds’ for doing so or the FWC considers that compliance with the
terms of the SBA will lead to a person committing an offence or becoming liable
for a pecuniary penalty; and must reject such an application if the employer is
excluded under proposed section 178C .[82]
The FWC must reject an application for a variation of an SBA made without the
consent of the employer, if the employee organisation that applied for the
variation is excluded under proposed section 178C, or if affected
employees are covered by an EA that has not passed its nominal expiry date. The
FWC may reject such an application if it considers that compliance with the
terms of the SBA will led to a person committing an offence or becoming liable
for a pecuniary penalty.[83]
Likely effect of the supported bargaining stream
Part 20 will overhaul the current low-paid bargaining
stream which has been generally disregarded and rename it as the supported
bargaining stream. These would permit the ‘roping-in’ of employers in
the same industry into a multi-enterprise agreement once a SBA is made,
provided the FWC is satisfied that it is appropriate to do so.
Significantly, amendments made to sections 241 and 242 of
the FW Act remove all reference to ‘low-paid’ employees.[84]
The cohort of employees and employers to whom the supported bargaining
framework would apply appears to now be ‘employees and their employers who
require support to bargain’ (proposed paragraph 241(a)). Additionally, proposed
paragraph 243(2)(c) means that organisations that receive public funds
could conceivably fall into this bargaining stream beyond the flagged
industries of aged care, child care and disability care.[85]
Commencement of the supported bargaining stream
Part 20 will commence on the earlier of a day fixed
by Proclamation, or 6 months after Royal Assent.[86]
Single interest employers bargaining authorisations and
agreements (Part 21)
Currently, division 10 of Part 2-4 of the FW Act
provides for two or more employers that will be covered by a proposed EA to
apply for a single interest employer authorisation (SIA). Despite
a SIA permitting certain employers to bargain together for a single
interest enterprise agreement (SIEA), in effect a SIA is a form of
multi-employer EA bargaining.[87]
Currently two or more employers can be treated as ‘single
interest employers’ if they are franchisees, they are engaged in a joint
venture or common enterprise, are related bodies corporate or have obtained a
Ministerial declaration, based on meeting specified criteria regarding their
common interests.[88]
The Explanatory Memorandum notes that employers with common interests may
include schools in a common education system or public entities providing
health services.[89]
Once applied for, a SIA
can be made by the FWC under section
249 or by the
Minister under section 247. If made, a SIA enables employers who wish to
bargain together to do so for a SIEA. Applications for SIAs have usually
accounted for less than 5 per cent of all bargaining applications in a given
year.[90]
What the Bill will change regarding SIAs
Part 21 of the Bill will allow employee bargaining
representatives, as well as just employers, to apply for a SIA. Critically, the
Bill will remove the requirement for certain employers to apply for a
Ministerial declaration prior to obtaining a SIA from the FWC.[91]
Further, the FWC will be able to make a SIA covering an employer with or
without its consent, in circumstances where:
- the
employer(s) agree to bargain or a majority of employees who are employed by the
employer(s) and who will be covered want to bargain
- the
employers have clearly identifiable common interests (such as geographical
location, being regulated by a common regulatory regime and the nature of the
enterprises to which the SIEA will relate)
- the
group of employees to be covered by the SIA was fairly chosen (having regard to
whether the group is geographically, operationally or organisationally
distinct)
- at
least some of the employees that will be covered by the SIA are represented by
an employee organisation
- the
employers and bargaining representatives of employees of those employers have
had an opportunity to express to the FWC their views on the SIEA and
- it
is not contrary to public interest to do so.[92]
However, the Bill contains various limitations on the
ability of employees and employee organisations to apply to the FWC for a SIA.
This is because even if the common interests criteria noted above are met, the
FWC cannot make a SIA unless the FWC is satisfied that all of
the following apply:
- the
employer is not a small business
- the
employer is not currently awaiting a decision for another single
interest employer authorisation
- the
employer is not specified in a SIEA or SBA in relation to employees that
would be covered by a single interest authorisation being considered or
- the
employer is not currently covered by an EA that has passed is nominal
expiry date.[93]
This will ensure that small businesses may consent to be
included in a SIA, but cannot be included without their consent, and
hence can elect to remain outside the SIA and SIEA regime.[94]
The effect of making a SIA is that an employer is required
to bargain with other employers as well as employee bargaining
representatives. Further, an employer specified in a SIA must not bargain for
any other EA with an employee who will be covered by the proposed EA until they
are removed from the SIA or the SIA ceases to be in operation.[95]
The Bill
will allow SIEAs to be applied to new employers
In addition to the changes in relation to who can apply
for a SIA and when a SIA can be made, the Bill also changes when
the FWC can make and vary a SIEA. In effect, amended subdivision 7 of
Part 2-4 of the FW Act will enable:
- joint
applications by employers and employees to have a SIEA varied to apply to them[96]
and
- applications
by employee organisations to have a SIEA varied to apply to an employer not
covered by the SIEA.[97]
Importantly, when an employee organisation applies
unilaterally for a variation to an SIEA to cover an employer not covered by the
SIEA, the FWC can approve such a variation without the consent of the
employer(s) provided, in broad terms, the conditions for the original SIA remain
satisfied on inclusion of the new employer.[98]
Likely
effect of changes to SIAs and SIEAs
The proposed variations to single-interest employer
bargaining arrangements broaden the criteria for which employers and employees
may apply for a SIA, or apply to have an existing SIEA varied to include a new
employer, potentially expanding the scope of these arrangements beyond
franchisees and joint ventures, as is currently the case.
Similar to the arrangements described in the supported
bargaining stream, the proposed changes to the single interest employer
stream will make it easier for a single interest employer agreement (SIEA) to
be varied to extend coverage to an employer that is currently not covered under
an applicable agreement.
Proposed subsection 249(3) will expand the meaning
of ‘employers that may bargain together for the agreement’.[99]
Notably, proposed subsection 249(3) includes a similar paragraph
concerning a ‘common interests’ criteria for the FWC to consider when
considering a single interest employer authorisation. Common interests in this
case differ slightly from the common interests set out in proposed
subsection 243(2) for supported bargaining arrangements.
In the case of a SIA, common interests does not
necessarily include receipt of public funds, but does include being covered by
a common ‘regulatory regime’ that applies to the employers specified in the
application (proposed paragraph 249(3C)(b)). This raises the question as
to how widely this bargaining stream may apply.
Finally, the proposed changes to the single interest
bargaining stream will make it easier for a SIEA made under a SIA to be varied
to extend coverage of a SIEA to an employer that is currently not covered under
an applicable agreement. However, from a practical perspective employers and
employees who become covered by such an agreement may have limited
opportunities to remove themselves from those agreements.
This is because the removal process introduced by Part
22 will require both employee and employee organisation approval.[100]
This means an employee organisation covered by the agreement could potentially
block the approval of the variation to remove the employer, despite the
employees voting to do so and notwithstanding the views of the employer.
Finally, the process will also require the FWC to
determine that because of a ‘change in the employer’s circumstances’, it is no
longer appropriate for the employer to be covered, similar to the existing
process under the FW Act for varying enterprise agreements.[101]
Commencement of Part 21
Part 21 will commence at
the same time as the provisions of Part 20—on the earlier of proclamation or 6 months after Royal
Assent.
Cooperative workplace agreements (Part 23)
Currently the FW Act allows a multi-enterprise
agreement (MEA) to be made between two or more employers that are not
single interest employers with the employees who are employed at the time the
agreement is made and who will be covered by the agreement.[102]
Current requirements for MEAs to be approved are largely the same as
single-enterprise agreements with the additional requirement that:
- a
majority of employees in each enterprise to be covered by the MEA have voted
for the agreement, if an agreement is made but was not approved by
employees of all of the employers proposed to be covered by the agreement, then
the agreement must be varied to expressly cover only those employers whose
employees did approve the agreement[103]
- the
agreement has been genuinely agreed to by each employer covered by the
agreement, and that no person coerced, or threatened to coerce, any of the
employers to make the agreement.[104]
Multi-enterprise agreements are uncommon, accounting for
less than 1% of all current agreements.[105]
What the Bill will change in relation to cooperative
workplace agreements
The proposed variation to multi-enterprise will replace
the current MEA bargaining process and agreement making with the new
‘cooperative workplace agreement’ (CWA) framework. CWAs will apply where a
supported bargaining authorisation is not in operation.[106]
Part 23 will make changes to when the FWC can
approve a CWA. Most notably proposed subsection 186(2A) requires that
the FWC is satisfied that at least some of the employees to be covered by the
CWA were represented by an employee organisation in relation to bargaining for
the agreement. The Explanatory Memorandum notes:
As cooperative workplace agreements are by definition
intended to cover multiple businesses and their employees, they can potentially
affect the rights and obligations of a large number of individuals. This item
acts as a safeguard to balance bargaining power between employees to be covered
under a cooperative workplace agreement and their many employers. The
requirement that at least some employees are represented by an employee
organisation is intended as a safeguard.[107]
The proposed CWA regime differs to the existing MEA regime
as it will allow the FWC to:
- in
certain circumstances, exclude persons for the purposes of an enterprise
agreement[108]
and
- vary
an existing CWA to add employers and employees where necessary.[109]
In relation to variation of a CWA to add employers and
employees, importantly, this can only be done by a joint application by an
employer and employees.[110]
As with MEAs, PIA remains unavailable in relation to CWAs.[111]
The Bill does not propose changes to pattern bargaining arrangements.
The proposed amendments under Part 22 in the Bill
provide the process by which employers and employees may jointly apply to the
FWC to be removed from a SIEA or CWA.
Commencement for Parts 22 and 23
Parts 22 and 23 will commence at the same
time as the provisions of Part 20—on the earlier of proclamation or 6
months after Royal Assent.[112]
Likely effect of the proposed cooperative workplace
agreement regime
The proposed CWA regime will broaden the criteria under
which employers and employees may bargain for a CWA, potentially expanding the
scope of these arrangements. The changes are also likely to prevent ‘small
cohort’ CWAs from being approved.
Similar to the arrangements described in the supported
bargaining stream, the proposed changes to the CWA stream will make it
easier for a CWA to be varied to extend coverage of a CWA to an employer that
is currently not covered under an applicable agreement. However, from a
practical perspective employers and employees who become covered by a CWA may
have limited opportunities to remove themselves from those agreements.
This is because the removal process introduced by Part
22 will require both employee and employee organisation approval.[113]
This means an employee organisation covered by the CWA could potentially block
the approval of the variation to remove the employer, despite the employees
voting to do so and notwithstanding the views of the employer.
Stakeholder views on changes to the existing
multi-enterprise bargaining streams
These changes have attracted a significant level of
commentary surrounding their potential effects. Employer groups, such as the BCA,
Ai Group, ACCI, and the Minerals Council of Australia are opposed to the
proposed changes to the multi-enterprise bargaining framework.[114]
A central claim in their opposition to the multi-enterprise bargaining
framework is the potential for these agreements to become industry-wide
agreements, which could ‘lead to another layer of ill-suited, industry-wide
terms and conditions’ imposed on employers.[115]
The Council of Small Business Organisation Australia’s
(COSBOA) position statement does not clearly indicate its position on the Bill,[116]
however in the lead-up to the Jobs and Skills Summit, COSBOA and the ACTU did
reach agreement on changes to multi-employer bargaining.[117]
Additionally, the COSBOA’s response to the 2022–23 October Budget indicates a
favourable position to the Government’s budget measures concerning agreement
making and disputes.[118]
The Australian Council of Trade Unions (ACTU) has not
explicitly stated a position on the multi-enterprise agreement changes, however
it has indicated its general support for the Bill.[119]
The Opposition has expressed blanket opposition to the
Bill. In an opinion piece, Shadow Minister for Employment and Workplace
Relations Michaelia Cash argued:
Industry-wide, or pattern bargaining, which Labor’s Bill
allows, will increase strikes across the economy, including in the resources
sector. Multi-employer bargaining will tarnish Australia’s reputation among
international investors and we will be seen as a high-cost jurisdiction with
complex and prescriptive workplace regulations. The entire supply chain in the
mining industry could be dragged into protracted disputes which lead to
protected strike action.[120]
The Australian Greens stated support for multi-employer
bargaining.[121]
They have long argued against limitations on ‘pattern bargaining or
multi-employer bargaining’ and against restrictions on strike action.[122]
Reporting indicates that other minor party and independent members of the
Senate may be undecided on these specific aspects of the Bill.[123]
Protected industrial action (Part 19)
In addition to the proposed changes to the
multi-enterprise bargaining, the Bill will amend subsection 413(2) and
paragraph 437(2)(b) of the FW Act to specify that PIA cannot be taken
in relation to a proposed greenfields agreement or CWA.[124]
However, the Bill does not extend the same coverage to the now expanded SIEA or
the new SBA bargaining streams. This means that PIA will be available in
relation to single-interest agreements and SBAs, whereas previously it was not
available in relation to single-interest agreements or the low paid
authorisations regime (which SBAs replace).
In addition, Divisions 4 and 5 of Part 19
of the Bill will introduce additional notice requirements and a new mediation
and conciliation pathway, respectively. The minimum notice period for PIA for a
non-SEIA or non-SBA agreements remains at ‘3 working days’, while the minimum
notice period for a SIEA or SBA will be set at 120 hours.[125]
The proposed mediation and conciliation changes will
require the attendance of bargaining representatives at a conciliation
conference, conducted by the FWC, during a protected action ballot (PAB)
period.[126]
Proposed changes to subsection 443(3A) will require the FWC when specifying a
PAB date to set a minimum 14 day period for votes to be cast in a PAB.[127]
Proposed subdivision BA of Division 8 of Part 3-3 of the FW Act
will require the FWC to conduct a conference once a protected action ballot
order has been given.
Commentary surrounding these reforms has frequently
claimed that the changes to the multi-enterprise bargaining arrangements will
permit industry-wide strikes.[128]
Given the restrictions placed on CWAs, and industrial action more generally, it
is difficult to say the extent to which this may or may not occur.
Conceivably, the expanded SBA and SIEA bargaining streams
could lead to a greater number of employers and employees involved in strike
action in a given year due to their simply being multiple enterprises involved
in a dispute rather than a single enterprise.
Commencement of changes to protected industrial action
Division 1 of Part 19 will commence on the
earlier of proclamation or 6 months after Royal Assent. Divisions 2 to 5
will commence immediately after Division 1.[129]
Key issue #3: abolition
of the ABCC
The ABCC has
existed in several forms since 2005.[130]
Throughout its life, the ABCC has been a point of contention between employers
and unions.[131]
Employer groups have argued that the ABCC is vital to
securing productivity improvements in the construction sector, and for policing
militant union activity.[132]
Unions counter that the ABCC has aggressively and disproportionately targeted
construction unions for minor contraventions of the FW Act and the BCIIP
Act, whilst failing to lift productivity in the construction industry.[133]
Prior to the 2022 election, the Australian
Labor Party (ALP) pledged to ‘abolish the Australian Building and
Construction Commission and repeal the BCIIP Act, including the Code for the Tendering and
Performance of Building Work 2016 (the Building and Tendering Code)’.[134]
In accordance with this commitment, since winning the
election, the Labor Government has taken steps to curtail the ABCC. In July
2022, the Minister for Employment and Workplace Relations amended the Building and Tendering
Code by removing ‘most
of the obligations’ contained therein.[135]
Following this, the 2022–23 October Budget signalled a redirection of the
ABCC’s resources to the FWO.[136]
On 27 October 2022, the ABCC
announced that as of 10 November 2022 its oversight
and enforcement functions with respect to the FW Act would be
transferred to the FWO. On 27 October 2022, the Government introduced the
Bill, which will abolish the ABCC.
What will the Bill do
to the ABCC?
Part 3 of the Bill will formally abolish the ABCC. From
10 November 2022 the FWO will cover many functions that are currently performed
by the ABCC. The Bill facilities this by preserving the Federal Safety Commissioner and its role in
promoting health and safety in the building industry.
Division 1 of Part 3 will limit the scope of
the BCIIP Act to promoting health and safety in relation to the building
industry, and will remove all reference to the Australian Building and
Construction Commissioner (ABC Commissioner), whilst omitting and replacing
references to authorised officers with Federal Safety Officers.
Furthermore, Division 1 will abolish the Building
and Tendering Code, repeal rules concerning unenforceable agreements in the
building sector, and abolish certain offences under the BCIIP Act,
including picketing offences, and coercion and discrimination offences relating
to allocation of duties, superannuation and enterprise agreements in the
building industry.
Division 1 also strips the power to issue
examination notices from the ABC Commissioner, and vests in Federal Safety
Officers powers to enter premises, inspect work, conduct interviews, ask for a
person’s name and address, compel production of records and keep those records.
Division 2 will then abolish the ABCC and rename
the BCIIP Act as the Federal Safety Commissioner Act 2022 (items
308 to 310). Division 4 will then repeal the entirety
of the Building
and Construction Industry (Consequential and Transitional Provisions) Act 2016
and Building and
Construction Industry Improvement (Consequential and Transitional) Act 2005.
Division 5 sets out transitional provisions that
apply to support the ABCC’s abolition, including termination payments for
redundant staff, and the transfer of ABCC assets and liabilities to the FWO. Division
5 also provides that the FWO will replace the ABCC in any legal proceedings
or FWC proceedings on foot.
The Fair Work Ombudsman as the new regulator
Notably, the Bill does not appear to be re-establishing a
specialist industrial inspectorate for the building industry. This differs from
the previous approach adopted by the Labor Government between 2007 and 2013,
which abolished the ABCC but transferred many of its functions to the Fair Work
Building Industry Inspectorate, which was a specialist division within Fair
Work Australia (now the FWO).[137]
Instead, the FWO will regulate the building industry in accordance with its
current role under the FW Act, without the enhanced oversight functions
and powers afforded to the ABCC under the BCIIP Act. This will end the
specialised treatment of the building industry.
Commencement
Divisions 1
and 5 of Part 3 commence on the day after the Bill receives Royal
Assent.[138]
Divisions 2 to 4 of Part 3 will not take effect until the
earlier of a day fixed by Proclamation or 2 months after the Bill receives
Royal Assent.[139]
Position of non-government parties/independents and major
stakeholders
Whilst the Opposition has
indicated it will oppose the Bill as a whole,[140]
it has also previously
indicated its opposition to the abolition of the ABCC, arguing:
jobs would be lost, one of the nation’s most militant unions
would run riot, and building costs will skyrocket.[141]
The Australian
Chamber of Commerce and Industry, and the Australian
Industry Group have previously expressed concern about the abolition of the
ABCC.
Senator Jacqui Lambie has
expressed concern about the proposed abolition of the ABCC.[142]
At the time of writing, other independent Senators had not commented on the
proposed dismantling of the ABCC. Furthermore, the Australian Greens have not
commented on the proposed abolition of the ABCC and have not
yet fully committed to supporting the Bill generally.
Similarly, whilst the Australian Council of Trade Unions
(ACTU) has signalled
its support for the Bill, it has not commented on the measures concerning
the ABCC. The CFMEU has argued that the ABCC should be abolished on
the grounds that it has pursued unions and workers but has paid little
attention to ‘sham contracting and wage theft’.
Key issue #4: improving job security
The ALP’s National
Platform for the 2022 Election included policy commitments to tackle
insecure employment, including ‘the abuse of fixed term contracts of
employment’.[143]
Part 10 of the Bill is intended to give effect to that commitment.
Current law in relation to fixed term employment
contracts
A fixed-term employment contract is one that operates for
a specified period of time, such as one year. At the end of the specified time
the contract comes to an end and employment is terminated automatically, which
means there is no need for a resignation or a dismissal. Currently the FW
Act excludes the automatic termination of a fixed-term employee from the
unfair dismal regime.[144]
The Explanatory Memorandum notes that fixed-term
employment contracts can help businesses engage workers to perform discrete
tasks for a fixed period and can ‘be used genuinely for many purposes’.[145]
However, consistent with previous inquiries and reports, the Explanatory
Memorandum notes that fixed term contracts can exacerbate job insecurity for
employees when:
they are used for the same role over an extended period, or
where employees are subject to rolling contract renewals for jobs that would
otherwise be ongoing.[146]
The Government describes the effect of such rolling fixed term
contracts as amounting to ‘a permanent probation period for employees’.[147]
What does the Bill do?
Part 10 will limit an employer’s ability to utilise
fixed term contracts, subject to various exceptions. It also clarifies the FWC
can include terms in modern awards that allow employees to be engaged under
fixed term contracts that would otherwise be prohibited.[148]
New limits on fixed term contracts
Part 10 prohibits an employer from entering
into:
- a fixed
term employment contract with an employee for the same role for longer than two
years
- consecutive
fixed term contracts with an employee for the same role that, in total across
all contracts, exceeded two years or
- a
fixed term contract with an employee for the same role that could be extended
or renewed more than once[149],
subject to anti-avoidance measures (and the exceptions, which are discussed
below).
Where an employer breaches the limits, civil penalties
will apply: maximum of 60 penalty units for an ordinary contravention ($13,320),
and a maximum of 600 penalty units for a serious contravention (that is, $133,200).[150]
Exceptions to the limits on fixed term employment
contracts
The proposed prohibitions do not apply to fixed term
contracts entered into by casual employees, or those permitted by a modern
award.[151]
Proposed section 333F provides additional exceptions to some of the
prohibitions noted above, but not the exception to entering into consecutive
fixed term contracts. Instead, the exceptions allow an employer to enter into a
fixed term employment contract that is for longer than two years or that
contains more than one option for renewal, including where the employee:
- has
specialised skills that the employer does not have, but needs, to complete a
distinct and identifiable task involving those skills
- is
engaged as part of a training arrangement (for example, an apprentice or a
trainee)
- is
engaged to do essential work during a peak period or
- is
engaged to undertake work during an emergency or during the temporary absence
of another employee (for example parental leave, or workers’ compensation
related absence).[152]
These reflect long-established and accepted uses of
fixed-term employment contracts such as ‘temp’ work, project-based work,
traineeships and seasonal work such as in the ski industry or horticulture.
However, in addition the Bill also provides exemptions for employment that is
reliant upon non-recurring government or similar funding, or where governance
rules of a corporation or association limit the period a person may be employed
in a role.[153]
Finally, the Bill also allows the Regulations to prescribe
types of contracts that are excluded.[154]
This will enable future governments, subject to any disallowance motions, to
respond flexibly to the genuine needs of particular industries or sectors,
should the need for contracts over on-going employment be established.
If an employer relies on one of the exceptions, they bear
an evidential burden in relation to the exception.[155]
The Explanatory Memorandum notes this is because ‘they
are best placed to explain why fixed term employment was necessary in their
particular business circumstances’.[156]
Anti-avoidance mechanisms
The Bill contains various anti-avoidance mechanisms. The
first is that the Bill prohibits an employer from making contrived or
artificial changes to the timing or terms of a fixed term contract as a means
of avoiding the prohibitions.[157]
The Explanatory Memorandum gives the example of where a hypothetical employer:
artificially changes the work duties of the employee between
two contracts, so that the employee could not be said to be performing the same
or similar work for the employer.[158]
The second is that periods between consecutive fixed terms
contracts that are not intended to end the relationship between the employer
and the employee are ignored.[159]
Examples provided by Explanatory Memorandum are contracts that finish at the
end of one semester and start at the beginning of the next, and contracts that
start after an employee has taken a short break for personal reasons.[160]
Protections for employees covered by prohibited fixed term
contract
The Bill ensures that an employee covered by a prohibited
fixed term contract can rely on the contract to enforce the terms and
conditions of their employment.[161]
This allows employees to enforce their rights under such contracts if a dispute
arises.
Further, proposed paragraph 333G(1)(a) provides
that where an employer enters into a prohibited fixed term contract, the term
that ends the contract after a certain period is invalid. This means that the
contract would otherwise apply, except that the contract does not end at the
nominal expiry date. This ensures that an employee would, effectively, be an
on-going employee despite the inclusion of a prohibited term that purported to
end the employment at a particular time.
Finally, the effect of note 2 to proposed
subsection 333G(2) is that ‘the employee is not covered’ by the current exclusion
from the unfair dismal regime. This means that employees are able to claim
unfair dismissal, despite the automatic termination of their employment at a
specific time under the terms of a prohibited fixed-term contract.
Likely effect of the prohibition of certain fixed term
contracts
As the changes seek to prohibit ‘rolling’ fixed term
contracts, employers not covered by an exception must either employ staff as
on-going employees or on fixed-term casual contracts, which will attract casual
loadings. In the case of employees, this would either result in improved job
security (if they are employed on an on-going basis) or improved remuneration
with less job security (if they are employed as a casual).
Despite this, the changes are unlikely to significantly
decrease the ability of employers to use fixed term employment contracts in
‘traditional’ manners such as for ‘temp’ cover, project-based or seasonal work.
Dealing with disputes about fixed term contracts
If a dispute about the new prohibitions cannot be resolved
between employer and employee at the workplace, the Bill will enable the
parties to:
- apply
to the FWC to resolve the dispute by any means the FWC sees fit, including
mediation, conciliation, making recommendations or expressing an opinion and,
if both parties agree, by binding arbitration[162]
or
- apply
for an order from a Magistrates’ Court or the Federal Circuit and Family Court
using the small claims procedure.[163]
Commencement of Part 10
The changes proposed by Part 10 will commence the
day after the Bill receives Royal Assent.
Position of non-government parties/independents and
stakeholders
Whilst at the time of writing the position of the
Opposition, non-government parties and independents in relation to the
prohibition on fixed-term contracts proposed by the Bill could not be
determined:
- the
Opposition has
indicated it will oppose the Bill as a whole[164]
and
- the
Australian Greens 2022 election platform included ‘establishing the presumption
that all employment must be ongoing’ unless a ‘genuine case’ for contract
employment exists.[165]
Whilst not commenting directly on the prohibition on
fixed-term contracts proposed by the Bill, the Australian
Chamber of Commerce and Industry, Business
Council of Australia and Australian
Industry Group have expressed concern about other aspects of the Bill. The Australian
Council of Trade Unions supports the Bill, and in relation to the
prohibition on fixed-term contracts proposed by the Bill, argues:
Whilst the Bill makes a start on delivering Labor’s election
commits to make jobs more secure, by putting limits on fixed term contracts,
much more needs to be done, especially for workers in casual, gig or labour
hire work.[166]
Key issue #5: promoting flexible working arrangements
The ALP’s National
Platform for the 2022 Election included a policy commitment to give
employees an enforceable right to request a change of hours or other
flexible work arrangements (FWAs) for people with parenting or caring
responsibilities.[167]
Part 11 of the Bill gives effect to that commitment.
Current law with respect to flexible working
arrangements
Section 65 of the FW Act deals with when employees
with various caring responsibilities, disabilities, who are over the age of 55,
are experiencing domestic violence or are providing care or support to a member
of their immediate family or household because they are experiencing domestic violence,
can request FWAs.[168]
FWAs can include changes in hours, patterns, or location of work.[169]
It allows such employees (other than casual employees) to
request FWAs after 12 months continuous service. A casual employee
is not entitled to make a request unless, immediately before making the request:
- they
are a regular casual employee: a casual who has
been employed on a regular and systematic basis and
- have
been employed on that basis for a sequence of periods of employment over at
least 12 months and
- have
a reasonable expectation of continuing employment on a regular and systematic
basis.[170]
Employers may only refuse a request on ‘reasonable
business grounds’. If so, a written response must include details of the
reasons for the refusal.[171]
Examples of ‘reasonable business grounds’ are set out in subsection 65(5A) and,
include that the requested FWA would be too costly or likely to have a
significant negative impact on customer service.
Currently the FW Act does not allow
employees to challenge a refusal of a requests for a FWA. Unlike most of the other
National Employment Standards (NES), no civil penalty applies when an employer
contravenes the requirement to have reasonable business grounds
for a refusal.[172]
What does the Bill do?
Part 11 will expand the categories of employee who
can seek FWAs. It will also impose new requirements that employers:
- must
genuinely try to reach agreement with an employee before refusing a request and
- provide
detailed reasons for refusal plus information on alternative arrangements they would
be willing to consider.
Part 11 will allow the FWC to deal with refusals to
grant FWAs, including by mandatory binding arbitration.
Expanded application
Currently an employee may request FWAs in a variety of
situations including where they are experiencing family violence. Items
446 and 447 will provide that such requests may be made where the
employee, or a member of their immediate family or household, is experiencing ‘family
and domestic violence’, rather than experiencing ‘violence from a member of the
employee’s (or other person’s) family’ (as relevant).
The effect of item 448, and the passage of Fair
Work Amendment (Paid Family and Domestic Violence Leave) Bill 2022, would be that family and domestic violence will
capture conduct perpetrated by a member of a person’s household, a current or
former intimate partner, and a person related to the employee, according to
Aboriginal or Torres Strait Islander kinship rules.[173]
New discussion and consideration requirement
Proposed section 65A will provide a more detailed
procedure for responding to requests for FWAs. In summary it requires an
employer to discuss an employee’s request and genuinely try to reach agreement
before notifying the employee of a decision within 21 days.[174]
If the request is refused, the employer must:
- provide
detailed reasons for the refusal (including the ‘reasonable business grounds’
on which it relies) and
- set
out any other changes the employer is willing to make to the employee’s working
arrangements that would accommodate the employee’s circumstances or state that
there are no such changes that the employer is willing to make to accommodate
the employee’s circumstances and
- provide
information on the new dispute resolution procedures.[175]
New dispute resolution processes in relation to
requests for flexible working arrangements
The Bill provides that where an employer refuses an
employee’s request for FWAs or does not respond within 21 days, both parties must
try and resolve the dispute at the workplace.[176]
Where the dispute is not resolved, either party can refer
the matter to the FWC who then must deal with the dispute, including by
mandatory and binding arbitration.[177]
Where this occurs, the FWC can make various orders including that the employer
must grant the employee’s request or make accommodations.[178]
Penalties
The Bill extends the application of current civil
penalties to breaches of the requirements discussed above, and to breach of FWC
arbitration orders.[179]
Thus, consistent with court powers in relation to
contraventions of the NES provisions, employees, employee organisations or an
inspector will be able to apply to a court for various orders in relation to a
contravention of section 65 and proposed section 65A, including orders
imposing a penalty of up to 60 penalty units on an employer.[180]
Likely effect of changes in relation to requests for
flexible working arrangements
In general, currently no binding dispute resolution
processes apply to requests for FWAs and no penalties apply. As such, the
changes are likely to encourage employers to genuinely discuss and consider
such requests with employees. It is also likely to deter employers from
refusing to negotiate.
Commencement of Part 11
The changes proposed by Part 11 will commence six
months after Royal Assent.
Position of non-government parties/independents and major
stakeholders
Whilst at the time of writing the position of the
Opposition, non-government parties and independents in relation to the changes
proposed by Part 11 by the Bill could not be determined:
- the
Opposition has
indicated it will oppose the Bill as a whole[181]
and
- the
Australian Greens 2022 election platform included requiring ‘employers to grant
reasonable requests for family friendly working arrangements’.[182]
The Australian
Industry Group argues the proposed change ‘would expose employers to
litigation over rostering and working arrangements that should otherwise be
resolved at the workplace level’.
Key issue #6: promoting gender
equity by prohibiting pay secrecy
In 2022, as part of Labor’s
Secure Australian Jobs Plan, the ALP announced that, if it won election, it
intended to prohibit pay secrecy clauses as one mechanism to reduce the gender
wage gap. Part 7 of the Bill seeks to gives effect to this
commitment.
Background to pay secrecy clauses in employment
contracts
Pay secrecy clauses in employment contracts, which are not
currently illegal in Australia, allow employers to prohibit employees from
disclosing their remuneration. It is lawful for employers to prevent employees from
discussing and comparing their pay, thereby constraining employees from
challenging wage conditions. Consequently, it has
been argued that pay secrecy clauses also contribute to the gender
pay gap by making it harder
for women to negotiate better rates of pay.
Current protections for breaching pay secrecy clauses are
limited
Nevertheless, some protections exist, allowing employees
to share pay details, despite pay secrecy clauses. The FW Act prohibits
employers from taking adverse action against employees who exercise or decide
not to exercise workplace rights, including the right
to make a complaint or inquiry in relation to an employee’s employment.
This may
provide employees with some protections from adverse
action taken in response to disclosures made in connection with remuneration
inquiries made to the Fair Work
Ombudsman or to other third parties. Whilst the scope of these provisions
remain ‘unchallenged’,
a report
by the Finance Sector Union suggests that current FW Act provisions
offer only ‘limited protections’. For these reasons, there are calls
for pay secrecy clauses to be banned.
Previous Bills
To address this, and to ‘reduce
the gender pay gap by removing legal prohibitions on workers discussing their
own pay’, the Australian Greens introduced the Fair
Work Amendment (Gender Pay Gap) Bill 2015.
That Bill sought to amend the FW Act to provide
that any term of an employment contract, modern award or enterprise agreement
would have no effect to the extent that such a term prohibited disclosure of
remuneration information, or to the extent that such a term permitted adverse
action in response to such disclosures. That Bill was not enacted, nor did it
receive support from the Senate
Employment Legislation Committee.
What does the Bill do about
pay secrecy clauses in employment contracts?
Part 7 inserts proposed Division 4 into
existing Part 2-9 of Chapter 2 of the FW Act. Proposed Division 4
will add proposed section 333B to the FW Act to make it
permissible (but not compulsory) for an employee:
- to
disclose information about their remuneration and
- share
details about their employment terms and conditions that are reasonably
necessary in order to determine remuneration outcomes, such as the employee’s
weekly hours of work.
By making disclosure of pay details permissible, proposed
section 333B also provides employees with a workplace
right under the FW Act, the exercise or non-exercise of which is
protected from adverse action.[183]
Supplementing this, proposed section 333C provides that any term that
prohibits disclosure of the remuneration information referred to in proposed
section 333B has no effect.
Both these measures will apply to all new contracts of
employment entered into on or after commencement (the day after the Bill
receives Royal Assent), as well as to existing contracts, where those contracts
do not contain a pay secrecy clause. It will also apply to existing contracts
containing a clause related to pay secrecy, where those contracts are varied by
mutual agreement of the parties after commencement.[184]
Proposed section 333D introduces a prohibition on
employment contracts that include terms that make it impermissible for an
employee to disclose the remuneration information referred to in proposed
section 333B. A breach of this prohibition will attract maximum penalties
of 60 penalty units ($13,320—general contraventions) and 600 penalty units ($133200—serious
contraventions).[185]
This prohibition would not come into force until
six months after the Bill receives Royal Assent.[186]
According to the Explanatory
Memorandum , ‘[t]his delay is intended to provide employers with sufficient
time to arrange compliance with the new prohibition on pay secrecy terms’.[187]
As noted by law firm Herbert
Smith Freehills, as a result employers should ‘urgently review their
template contracts of employment’.
Position of non-government parties/independents and major
stakeholders
As mentioned previously, the Opposition has
indicated it will oppose the Bill as a whole.[188]
Shadow Minister for Employment and Workplace Relations, Senator Michaelia Cash,
has also stated that the Bill ‘is
going to wreak industrial and economic chaos on this country’. However, the
Opposition has not commented specifically on the proposed reforms to pay
secrecy.
Similarly, the Australian
Chamber of Commerce and Industry, the Business
Council of Australia and the Australian
Industry Group have all expressed concern with elements of the Bill;
however, no particular concerns have been raised about the proposed abolition
of pay secrecy clauses. The Australian Council of Trade Unions (ACTU) has signalled
its support for the pay secrecy reforms.
Independent Senators David
Pocock and Jacqui
Lambie have expressed concern about the timeframe available to debate the
reforms proposed in the Bill. Nevertheless, Senator
Pocock has expressed support for banning pay secrecy clauses.
The Australian Greens have welcomed
the announcement that the Bill includes rules concerning pay secrecy clauses.
Nevertheless, the Greens have also stated that ‘this move is not the panacea to
close the persistent gender pay gap’.
Concluding comments
This is an omnibus Bill addressing a wide range of
industrial relations issues. As with many Bills relating to industrial
relations, it is likely to attract controversy. In particular, the changes to
the existing MEA bargaining streams and the extension of PIA to some, but not
all, of those streams is likely to generate debate. Further, as the changes to
how and when PIA can be taken both broaden the availability of PIA but also
potentially dilute its effectiveness, those changes may also attract criticism
from both employer and employee organisations.
In contrast, the changes to when fixed term contracts are
permitted would appear to be aimed at ensuring that the ‘traditional’ uses of
fixed-term contact, such as the use of ‘temps’ to cover employees on extended
or unexpected absences and for clearly defined projects remains unaffected
whilst tackling the more recent ways in which some employers have used fixed
term contracts to, in effect, replace what would otherwise have been ongoing
roles. In that regard, it is likely to improve job security for workers in
industries that have engaged in that practice or, alternatively, result in
workers receiving casual loadings for fixed-term contract work.
[1]. Explanatory
Memorandum, Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill
2022, iii to xii, 5, 23, 29-30, 65, 68, 71, 80, 97, 101, 108, 116, 125, 133,
143, 150, 156, 159, 171, 187, and 189.
[2]. As
explained
by the FWC on its website: 'Some employers and employees are outside the
national system. You are outside the system if you work or employ people: in a
non-constitutional corporation; as an independent contractor or sole trader;
as an unpaid volunteer; as an unpaid trainee or intern through a school,
university or other institution; in WA in the state public sector or for a
non-constitutional corporation in local government or private industry; in NSW,
Qld or SA in the state public sector or local government; in Tasmania in the
state public sector.’
[3]. Selection
of Bills Committee, Report,
6, 2022, 27 October 2022: 4
[4]. Australia, Senate, Selection
of Bills—Standing Committee—Report no. 6 of 2022, Journals, 18,
2022, 27 October 2022, 525.
[5]. Australia,
Senate, Selection
of Bills—Standing Committee—Report no. 6 of 2022, Journals, 18,
2022, 27 October 2022, 525.
[6]. Explanatory
Memorandum, iii.
[7]. The
Statement of Compatibility with Human Rights can be found at page v of the
Explanatory Memorandum to the Bill.
[8]. The
basis for this power was section 51(xxxv) of the Constitution
(conciliation and arbitration for the prevention and settlement of
industrial disputes extending beyond the limits of any one State) which, until
the expanded use of the external affairs and corporations’ powers by the Hawke,
Keating and Howard Governments, underpinned the operation of Commonwealth
industrial relations laws for many decades.
[9]. Peter
Gahan and Andreas Pekarek, The rise and
rise of enterprise bargaining in Australia, 1991-2011, Labour and
Industry, May 2012, 23(3), 196-22, 218.
[10]. Productivity
Commission (PC), Workplace
relations framework: Volume 1, (Canberra: PC, 2015): 2-3.
[11]. PC,
Workplace
Relations Framework Inquiry Report: Volume 2, (2015, 647).
[12]. Fair
Work Commission (FWC), Benchbook:
Enterprise Agreements, (Melbourne: FWC, 2021): 18.
[13]. ALP,
ALP
National Platform as adopted at the 2021 Special Platform Conference,
ALP policy document, Election 2022: 30 & 26.
[14]. FW
Act, section 173.
[15]. Proposed
paragraphs 173(2)(aa), 230(2)(aa), subsection 173(2A) of the FW Act,
at items 522 to 524 of the Bill.
[16]. Proposed
subsection 173(2A) of the FW Act, at item 523 of the Bill.
For ‘greenfields agreement’ see FW Act, section 172.
[17]. Explanatory
Memorandum, 133-135.
[18]. Clause
2.
[19]. Department
of Education, Employment and Workplace Relations, Towards
more productive and equitable workplaces: an evaluation of the Fair Work
Legislation, 2012, 168: ‘enterprise agreements should not be permitted
with only one employee’; Productivity Commission (PC), Workplace
relations framework: Volume 1, (Canberra: PC, 2015): 38; Kurt Walpole,
Nic Kimberley, Shae McCrystal, ‘The
Fair Work Act in 2020 hindsight: the current multifaceted crisis and prospects
for the future’, Australian Journal of Labour Law, July 2020, 33(1),
11; Andrew Stewart, Shae McCrystal, Joellen Riley Munton, ‘The
(omni)bus that broke down: changes to casual employment and the remnants of the
Coalition's industrial relations agenda’, Australian Journal of Labour
Law, December 2021, 34(3), 161: ‘…the FW Act does not require employee
representation in agreement-making, and where employees are unrepresented, the
agreement approval phase may be the only time at which the agreement, and the
making of that agreement, are scrutinised… outside scrutiny of agreement
approvals, which has been very valuable to date, not least in identifying
suspect 'small cohort' agreement practices’.
[20]. Productivity
Commission (PC), Workplace
relations framework: Volume 2, (Canberra: PC, 2015): 662-667.
[21]. Items
489 to 494, 497 and 506 to 509.
[22]. Items
488 and 509 (proposed section 188) and proposed section
188B of the FW Act, at item
511.
[23]. Proposed
subsection 188(2) of the FW Act.
[24]. Proposed
section 188B and subsection 188(1).
[25]. Proposed
subsection 188B(3).
[26]. Clause
2 and Part 26, item 660, proposed clause 66 of
Schedule 1 to the FW Act.
[27]. FW
Act, section 193.
[28]. Fair
Work Commission (FWC), Benchbook:
Enterprise Agreements, (Melbourne: FWC, 2021), 100.
[29]. Jack
de Flamingh and John Casey, ‘The
delicate balancing act that is industrial relations reform’, Law Society Journal, March 2021, vol. 75,
71.
[30]. Explanatory
Memorandum, 136.
[31]. Proposed
section 193A.
[32]. Proposed
section 227A of the FW Act, at item 534.
[33]. Proposed
subsection 227B(3) of the FW Act, at item 534 .
[34]. Explanatory
Memorandum, 136.
[35]. Clause
2 and Part 26, item 660, proposed clause 67 of
Schedule 1 to the FW Act.
[36]. FW
Act, subsections 240(4) and 269(1).
[37]. Department
of Education, Employment and Workplace Relations, Towards
more productive and equitable workplaces: an evaluation of the Fair Work
Legislation, 2012, 148.
[38]. A greenfields
agreement is defined in section 172 of the FW Act as an agreement
that relates to a genuine new enterprise that the employer(s) are proposing to
establish and the employer or employers have not employed any of the
persons who will be necessary for the normal conduct of that enterprise and
will be covered by the agreement.
[39]. Proposed
section 234 of the FW Act, at item 543.
[40]. Proposed section 235 of the FW Act, at item
543.
[41]. Proposed
sections 235A and 269, and proposed subsection 274(3) of the FW Act, at items 543, 546 and 552.
[42]. Clause
2 and Part 26, item 660, proposed clause 71 of Schedule 1 to the FW
Act.
[43]. PC,
Workplace
relations framework: Volume 2, (Canberra: PC, 2015): 657.
[44]. Shae
McCrystal, ‘Termination
of enterprise agreements under the Fair Work Act 2009 (Cth) and final offer
arbitration’, Australian Journal of
Labour Law, October 2018, 31(2).
[45]. FW
Act, section 225.
[46]. FW Act, section 226.
[47]. See:
Energy Resources of Australia Ltd v LHMU [2010]
FWA 2434; Wollongong Coal Ltd t/a Wollongong Coal v Construction,
Forestry, Maritime, Mining and Energy Union [2020]
FWCFB 3676 Wollongong Coal Ltd t/a Wollongong Coal [2021]
FWCFB 2161.
[48]. Proposed
subsection 226(1), section 226A of the FW Act, at item 471.
[49]. Proposed
subsection 226(4) of the FW Act, at item 471.
[50]. Explanatory
Memorandum, 117-118.
[51]. Proposed
subsection 226(3) of the FW Act, at item 471.
[52]. Proposed
subsection 226(5) of the FW Act, at item 471.
[53]. Items
473 to 475.
[54]. Clause
2.
[55]. Peter
Dutton (Leader of the Opposition), ‘Transcript
of interview with Andrew Clennell’, media release, 23 October 2022.
[56]. Australian
Greens, Rewrite
our Labour Laws, Australian Greens policy document, Election 2022: 4.
[57]. Department
of Employment and Workplace Relations (DEWR), Trends
in federal enterprise bargaining, June quarter 2022, (Canberra: DEWR,
2022). For a succinct overview of this debate, see Jonathan Hamberger, ‘Reviving
Australia’s system of enterprise bargaining’, Journal of Industrial
Relations, 62, no. 3, (22 March 2020): 461–476.
[58]. PC,
Workplace
relations framework: Volume 1, (Canberra: PC, 2015): 2-3.
[59]. Andrew
Stewart, Anthony Forsyth, Mark Irving, Richard Johnstone and Shae McCrystal, Creighton
& Stewart’s Labour Law, 6th edn, (Sydney: The
Federation Press, 2016).
[60]. Stewart
et al, Labour Law: 61–77. See also the Minister’s second reading speech:
Tony Burke, ‘Second
reading speech: Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill
2022’, House of Representatives, Debates, 27 October 2022.
[61]. Joanne
Loundes, Yi-Ping Tseng and Mark Wooden, ‘Enterprise
Bargaining and Productivity in Australia: What do We Know?’, Economic
Record, 79. No. 245, (June 2003): 245–258.
[62]. PC,
Workplace
Relations Framework: Volume 2, (Canberra: PC, 2015): 1127–1135. It
could be argued that the productivity pay-off from the industrial relations
reforms of the 1990s, which moved many workers away from a reliance on awards
towards enterprise bargaining, also was concentrated in that decade. The
macroeconomic relationship between these reforms and productivity is hard to
isolate because the reforms themselves were gradual (three milestones being the
adoption in 1991 of an enterprise bargaining principle by the Australian
Industrial Relations Commission, the Industrial Relations Reform Act
1993 (Cth) and the Workplace Relations Act 1996 (Cth)).
[63]. Parliamentary
Library, Key
Economic and Social Indicators, dashboard, (Canberra: Parliamentary
Library, 2022): Chapter 2, Wages and Prices. See also: Geoff Gilfillan, ‘The
extent and causes of the wage growth slowdown in Australia’, research paper
series, 2018–2019, (Canberra: Parliamentary Library, 2019).
[64]. OECD,
OECD
Employment Outlook 2018, Chapter 3, (Paris: OECD, 2018).
[65]. OECD,
OECD
Employment Outlook 2018, 74.
[66]. See
for example subsection 172(3) of the FW Act.
[67]. ‘Co-ordination’
is taken to mean wage bargaining that ‘helps take into account the
macroeconomic effects of wage agreements by ensuring that these agreements do
not undermine external competitiveness and are set in line with the
business-cycle situation. This may be one factor behind the empirical
association of co-ordinated systems with higher aggregate employment. The
strongest form of wage co-ordination establishes a wage norm that defines the
maximum for the collectively-agreed wage increase in every sector.’ OECD
Employment Outlook 2018: 75.
[68]. OECD
Employment Outlook 2018, 75.
[69]. OECD
Employment Outlook 2018, 75.
[70]. FW
Act, section 172, Part 2-4, Division 9 (low-paid bargaining) and Division
10 (single interest employer authorisations).
[71]. Australian
Government, Jobs
+ Skills Summit: Outcomes, 1–2 September, (Canberra: Department of
Treasury, 2022): 7.
[72]. Item
644, in Part 23 of the Bill.
[73]. FW Act, paragraph 241(a).
[74]. FW
Act, section 243.
[75]. Fair
Work Commission (FWC), General
Manager’s report into developments in making enterprise agreements under the Fair
Work Act 2009 (Cth): 2018–2021, (Melbourne: FWC, 2021): 31; FWC, General
Manager’s report into developments in making enterprise agreements under the
Fair Work Act 2009 (Cth): 2015–2018, (Melbourne: FWC, 2018): 23; FWC, General
Manager’s report into developments in making enterprise agreements under the
Fair Work Act 2009 (Cth): 2012–2015, (Melbourne: FWC, 2015): 12 and 54.
[76]. Section
242 of the FW Act, as amended by items 607
to 610.
[77]. Proposed
subsections 243(1) and (2) of the FW Act,
at item 611.
[78]. Proposed
subsections 243A(1) to (3) of the FW Act, at item 611.
[79]. Proposed
subsection 172(7) of the FW Act, at item 592.
[80]. Item
590.
[81]. Proposed
sections 216B to 216BA of the FW Act, at item 597.
[82]. Proposed
sections 216AB and 216AE of the FW Act,
at item 597.
[83]. Proposed
sections 216BA and 216BB of the FW Act, at item 597.
[84]. Items
603 to 610.
[85]. Explanatory
Memorandum, x.
[86]. Clause
2.
[87]. Tony
Burke, ‘Second
reading speech: Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill
2022’, House of Representatives, Debates, 27 October 2022, 9:
‘Multi-employer bargaining is already contemplated by the act through three
streams—single interest, multi-employer and low paid.’
[88]. FW
Act, subsection 172(5), section 247.
[89]. Explanatory
Memorandum, 170.
[90]. FWC,
General Manager’s report, various years.
[91]. Item
631.
[92]. Proposed
subsection 249(3) to (3D) of the FW Act,
at item 634.
[93]. Proposed
subsection 249(3A) of the FW Act, at item 634.
[94]. Explanatory
Memorandum, 180.
[95]. Proposed
section 249A of the FW Act, at item 636.
[96]. Proposed
sections 216D to 216DA of the FW Act, at item 629.
[97]. Proposed
section 216DB of the FW Act, at item 634.
[98]. Proposed
sections 216DC to 216DE of the FW Act, at item 634.
[99]. Item
634.
[100]. Item
641.
[101]. Item
637. To compare the proposed changes with the current variation provisions
for an enterprise agreement, see FW Act section 207.
[102]. FW
Act, subsection 172(3).
[103]. FW
Act, subsections 184(1) and (2)
[104]. FW
Act, subsections 182(2), 186(2), (3A) and paragraph 186(2)(b).
[105]. DEWR,
Trends
in Federal Enterprise Bargaining, (Canberra: DEWR, 2022): 19.
[106]. Item
642.
[107]. Explanatory
Memorandum, 189.
[108]. Proposed
sections 178C, 183A of the FW Act, at items 644 and 646.
[109]. Proposed
sections 216C to 216CD of the FW Act, at item 649.
[110]. Item
649.
[111]. Item
650.
[112]. Clause
2.
[113]. Item
641.
[114]. ACCI,
‘Joint
press conference with the Australian Industry Group, the Business Council of
Australia and the Minerals Council of Australia’, media release, 30
October 2022; BCA, ACCI, Ai Group, ‘Joint
statement from BCA, ACCI and Ai Group: Business cautions against rushed IR
changes’, media release, 21 October 2022; BCA, ‘Australia
can’t afford workplace relations own goal’, media release, 27
October 2022; Ai Group, ‘Workplace
Relations Legislation’, media release, 27 October 2022.
[115]. BCA,
ACCI, Ai Group, ‘Joint
statement from BCA, ACCI and Ai Group: Business cautions against rushed IR
changes’, media release, 21 October 2022
[116]. COSBOA,
‘COSBOA
IR Statement 27 October 2022’, media release, 27 October 2022.
[117]. COSBOA
and ACTU, ‘Small
business and unions agree to developing the right workplace system’, media
release, 29 August 2022.
[118]. COSBOA,
‘COSBOA
rates budget 7/10: solid foundations for small business recovery in a
post-COVID era’, media release, 25 October 2022.
[119]. ACTU,
‘Finally,
action on wage growth’, media release, 27 October 2022.
[120]. Michaelia
Cash, ‘Industrial
relations Bill is a big concern for WA’, The West Australian, 29
October 2022.
[121]. Patricia
Karvelas, ‘Adam
Bandt: Greens support multi-employer bargaining’, ABC RN, Australian
Broadcasting Corporation, 26 August 2022. [5:30]
[122]. Senate
Standing Committee on Education, Employment, and Workplace Relations, Fair
Work Bill 2008 [Provisions], (Canberra: The Senate, 2009): 159–184.
[123]. Phillip
Coorey, ‘Push
to rush IR laws before Christmas appears doomed’, Australian Financial
Review, 31 October 2022.
[124]. Proposed
subsection 413(2) and proposed subparagraph 437(2)(b) of the FW
Act, at items 577 and 626.
[125]. Proposed
subparagraph 414(2)(a) of the FW Act, at item
579.
[126]. Proposed
subsection 409(6A) of the FW Act, at item
581.
[127]. Item
584.
[128]. James
Massola and Angus Thompson, ‘Business
on warpath over workplace changes’, The Age, 28 October 2022; David
Marin-Guzman, Phillip Coorey and Carrie LaFrenz, ‘Business
slams sector-strike rights in IR blitz’ , The Australian Financial
Review, 27 October 2022; ‘Editorial:
IR reforms go back to the future’, The Australian, 26 October 2022
[129]. Clause
2.
[130]. For
a history of the ABCC, see the following Parliamentary Library publications: Jaan
Murphy, ‘Building
and Construction Industry (Improving Productivity) Bill 2013 [No. 2] [and]
Building and Construction Industry (Consequential and Transitional Provisions)
Bill 2013 [No. 2]’, Bills Digest, 100, 2015–16, (Canberra:
Parliamentary Library, 2016); Steve O’Neill and Mary Anne Neilson, ‘Building
and Construction Industry Improvement Amendment (Transition to Fair Work) Bill
2011’, Bills Digest, 80, 2011–12, (Canberra: Parliamentary Library,
2011); Steve O’Neill, ‘Building
Industry Royal Commission: background, findings and recommendations’, Background
note, 30, 2002–03, (Canberra: Parliamentary Library, 2003).
[131]. See
stakeholder views in Jaan Murphy, ‘Building
and Construction Industry (Improving Productivity) Bill 2013 [No. 2] [and]
Building and Construction Industry (Consequential and Transitional Provisions)
Bill 2013 [No. 2]’, Bills Digest, 100, 2015–16, (Canberra:
Parliamentary Library, 2016), and Steve O’Neill and Mary Anne Neilson, ‘Building
and Construction Industry Improvement Amendment (Transition to Fair Work) Bill
2011’, Bills Digest, 80, 2011–12, (Canberra: Parliamentary Library,
2011).
[132]. See
stakeholder views in Jaan Murphy, ‘Building
and Construction Industry (Improving Productivity) Bill 2013 [No. 2] [and]
Building and Construction Industry (Consequential and Transitional Provisions)
Bill 2013 [No. 2]’, Bills Digest, 100, 2015–16, (Canberra:
Parliamentary Library, 2016), and Steve O’Neill and Mary Anne Neilson, ‘Building
and Construction Industry Improvement Amendment (Transition to Fair Work) Bill
2011’, Bills Digest, 80, 2011–12, (Canberra: Parliamentary Library,
2011).
[133]. See
stakeholder views in Jaan Murphy, ‘Building
and Construction Industry (Improving Productivity) Bill 2013 [No. 2] [and]
Building and Construction Industry (Consequential and Transitional Provisions)
Bill 2013 [No. 2]’, Bills Digest, 100, 2015–16, (Canberra:
Parliamentary Library, 2016), and Steve O’Neill and Mary Anne Neilson, ‘Building
and Construction Industry Improvement Amendment (Transition to Fair Work) Bill
2011’, Bills Digest, 80, 2011–12, (Canberra: Parliamentary Library,
2011).
[134]. Code for the Tendering
and Performance of Building Work 2016, as amended by the Code for the
Tendering and Performance of Building Work Amendment Instrument 2022; ALP National Platform:
31.
[135]. Tony
Burke (Minister for Employment and Workplace Relations), ‘Restoring
equal rights for construction workers’, media release, 24 July 2022.
[136]. Australian
Government, ‘Part
2: Expense Measures’, Budget Measures: Budget Paper no. 2: 2022–23
October: 98.
[137]. Emma
Goodwin, ‘Building on shifting sands:
from the Fair Work (Building Industry) Act 2012 (Cth) to the Building and
Construction Industry (Improving Productivity) Bill 2013 (Cth)’, Australian
Journal of Law, 27, no. 1, (1 May 2014): 97–110; Irina Kolodizner and Neil
Napper, ‘From
ABCC to FWBC: Tides of Change?’, Workplace Review, 3, no. 2 (June
2012): 58–60.
[138]. Clause
2.
[139]. Clause
2.
[140]. Peter
Dutton (Leader of the Opposition), ‘Transcript
of interview with Andrew Clennell’, media release, 23 October 2022.
[141]. Michael
Pelly and David Marin Guzman, ‘Building
watchdog loss would be economic ‘disaster’: Cash’, Financial Review,
19 May 2022.
[142]. Senator
Lambie, Senate
Education and Employment Legislation Committee Fair Work Legislation Amendment
(Secure Jobs, Better Pay) Bill 2022 [provisions], 4 November 2022, 29:
‘I'm just a bit worried we're abolishing the ABCC; there's no more watchdog’.
[143]. Australian
Labor Party (ALP), ALP
National Platform as adopted at the 2021 Special Platform Conference,
ALP policy document, Election 2022: 26 (see also 5, 23, 108, 133)
[144]. FW
Act, subsection 386(2).
[145]. Explanatory
Memorandum, 101.
[146]. Explanatory
Memorandum, 101. See also: Professor Anthony Forsyth, Inquiry
into the Labour Hire Industry and Insecure Work, Victoria (2015 - 2016), 262:
‘The very notion of insecure work was challenged by many employer submissions
to the Inquiry. However, I heard extensive evidence about the extent and impact
of non-permanent working arrangements – especially casual and fixed term
engagement – that demonstrated characteristics commonly described in the
Australian and international literature on insecure or precarious work’
(emphasis added); Standing Committee on Education, Employment and Youth Affairs
(ACT Legislative Assembly), Inquiry
into the Extent, Nature and Consequence of Insecure Work in the ACT (2017),
67: ‘As with other forms of non-ongoing work, fixed term employees face
unpredictability around future work opportunities and a power imbalance which
can discourage employees from speaking up about pay or workplace safety issues
for fear of missing out on further contracts’ and Senate Select Committee on
Job Security, The
job insecurity report, February 2022, 1: ‘the inquiry focussed on forms of
employment considered to be 'prone to insecure work, including… fixed-term
contracts, seasonal work, contracting and labour hire’.
[147]. Tony
Burke, ‘Second
Reading Speech: Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill
2022’, House of Representatives, Debates, 27 October: 3.
[148]. Proposed
section 141A of the FW Act, at item 439.
[149]. Proposed
subsections 333E(2), (3) and (4) of the FW
Act, at item 441.
[150]. Item
442. Crimes
Act 1914, section 4AA and the Notice of Indexation
of the Penalty Unit Amount made under that section set the current
value of a penalty unit at $222.
[151]. Proposed
paragraphs 333E(1)(c) and 333F(h) and proposed section 141A of
the FW Act, at items 439 and 441.
[152]. Proposed
paragraphs 333F(1)(a), (b), (c) and (d) of the FW Act, at item
441.
[153]. Proposed
paragraphs 333F(1)(f) and (g) of the FW Act, at item 441.
[154]. Proposed
paragraph 333F(1)(i) of the FW Act, at item 441.
[155]. Proposed
subsection 333F(4) of the FW Act, at item 441.
[156]. Explanatory
Memorandum, 104.
[157]. Proposed
section 333H of the FW Act, at item 441.
[158]. Explanatory
Memorandum, 105.
[159]. Proposed
subsections 333E(4) and (5) of the FW Act, at item 441.
[160]. Explanatory
Memorandum, 103.
[161]. Proposed
section 333G of the FW Act, at item 441.
[162]. Proposed
section 333L of the FW Act, at item 441.
[163]. Item
444.
[164]. Peter
Dutton (Leader of the Opposition), ‘Transcript
of interview with Andrew Clennell’, media release, 23 October 2022.
[165]. Australian
Greens, ‘End
the insecure work crisis’, 25 May 2022, 2.
[166]. Australian
Council of Trade Unions (ACTU), ‘Finally,
action on wage growth’, media release, 27 October 2022.
[167]. ALP,
ALP
National Platform as adopted at the 2021 Special Platform Conference,
ALP policy document, Election 2022: 24.
[168]. FW
Act, subsections 65(1) and (1A).
[169]. FW
Act, note to subsection 65(1).
[170]. FW
Act, paragraph 65(2)(b), sections 12 and 15A.
[171]. FW
Act, subsections 65(5) and (6).
[172]. FW
Act, subsections 739(2), 44(2).
[173]. Explanatory
Memorandum, 108-109.
[174]. Proposed
sections 65A(1) and (3) of the FW Act, at item 459 and
item 458 (repeals existing subsections 65(4) to (6)).
[175]. Proposed
subsections 65A(2) and (6), proposed sections 65B and 65C of
the FW Act, at items 459 and 463.
[176]. Proposed
subsections 65B(1) and (2) of the FW Act, at item 463.
[177]. Proposed
subsections 65B(3) and (4) of the FW Act,
at item 463.
[178]. Proposed
section 65C of the FW Act, at item 463 and item
469.
[179]. Items
461, 462, and 465 to 468.
[180]. Item
466. Relevant Courts are the Federal Court, Federal Circuit and Family
Court of Australia and an eligible State or Territory court.
[181]. Peter
Dutton (Leader of the Opposition), ‘Transcript
of interview with Andrew Clennell’, media release, 23 October 2022.
[182]. Australian
Greens, Economic
security for women, Australian Greens policy document, Election 2022:
4.
[183]. Proposed
subsection 333B(3) of the FW Act, at item 383 .
[184]. Part
26, item 59.
[185]. Item
384. Crimes
Act 1914, section 4AA and the Notice of
Indexation of the Penalty Unit Amount made under that section set the
current value of a penalty unit at $222.
[186]. Part
26, item 660, proposed subclause 59(6) of Schedule 1 to the FW Act.
[187]. Explanatory
Memorandum, 198.
[188]. Peter
Dutton (Leader of the Opposition), ‘Transcript
of interview with Andrew Clennell’, media release, 23 October 2022.
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