May 2023 – Three Secure Jobs Bill changes that are about to come into effect

There are many changes to come out of the Fair Work Legislative Amendment, but here are three that HR needs to keep on their radar in coming months.

While some of the Fair Work Legislation Amendment (Secure Jobs, Better Pay Bill) Act 2022 changes first came into effect when the bill was passed in December 2022, such as the elimination of pay secrecy clauses, many are due to be enshrined in the coming months.

Three legal/employee relations experts outline some key changes HR professionals and employers need to take into account.

1. Small claims jurisdiction cap increase

By Victor Song, Solicitor, Australian Business Lawyers & Advisors

The Secure Jobs, Better Pay Bill will expand the small claims cap from $20,000 (as it’s currently set) to $100,000, as of 1 July 2023. This will allow employees to bring a claim for an underpayment of wages up to the value of $100,000 in the small claims jurisdiction of the Federal Circuit Court and state and territory courts.

This means there will be more informal processes available under the small claims jurisdiction, enabling staff to easily bring an underpayment claim of greater value.

It’s worth noting that these changes do not affect the jurisdiction of the Fair Work Commission (FWC), which remains largely excluded from underpayment matters.

Calls to lift the small claims cap were prompted by the Migrant Workers’ Taskforce and the Senate Unlawful Underpayments Inquiry, both of which found compelling evidence of wage theft, especially among vulnerable workers in certain industries.

Currently, underpayment claims which exceed the small claims cap can only be determined by way of a formal court process. Unsurprisingly, particularly for a low-skilled employee, this process can be significantly complex, expensive and time-consuming, often leading the employee to either drop parts of their claim in order to meet or fall below the small claims threshold, or abandon their claim entirely.

The government hopes that by lifting the cap, as well as allowing successful claimants to claim filing fee costs, it will make it more accessible for employees to bring an underpayment claim and allow claims to be resolved more quickly and cheaply.

Lessons for HR and employers

The change to the small claims threshold takes effect from 1 July 2023, and experts anticipate there will be a greater number of claims for underpayments from this date.

Employers and HR practitioners are encouraged to undertake comprehensive reviews into their workforce to ensure employees are receiving the correct entitlements. Where an underpayment has been identified, employers are strongly recommended to reconcile any of these well before 1 July 2023.

2. Changes to fixed-term contracts

By Michaela White, ER/IR Manager, Cleanaway

The government is focused on addressing insecure work this year. As a result, employers who use fixed-term contracts to engage staff will need to review their practices as new rules take effect in December 2023.

The new amendments to the Fair Work Act place limits on the use of fixed-term contracts exceeding two years, or for more than one renewal. There are a number of exemptions, including contracts for the completion of specialised tasks, training arrangements, contracts that cover an employee’s temporary absence, contracts to complete projects funded by government grants and any circumstance permitted by a Modern Award.

Lessons for HR and employers

Previously, employers could generally end fixed-term contracts of longer than two years without being subject to actions such as an unfair dismissal. Now the usual termination requirements that would apply to a permanent employee, through the Fair Work Act, a Modern Award or an Industrial Instrument may apply.

Ending a contract of two years or more may be found to be grounds for unfair dismissal. This could create additional administrative work for employers because they are going to need to make sure they don’t inadvertently cross that boundary.

Some employers have people on rolling fixed-term contracts for years and years, but I think they’re a minority, or are contracts which may be in those exceptions categories.

“Employers and HR should also remember that they can still deny a [flexible work] request, if it’s due to reasonable business grounds.” – Nick Ruskin, Partner at K&L Gates

3. Changes to flexible work requests

By Nick Ruskin, Partner at K&L Gates

As of June 2023, certain employees will soon have more avenues to fight back against employers who deny requests for flexible working arrangements.

Currently, employers must consider and respond ‘reasonably’ to flexible work requests from employees who are:

  • Over 55
  • Living with a disability
  • Caring for infants or school-aged children
  • Carers (within the meaning of the Carer Recognition Act 2010), or
  • Experiencing family and domestic violence, or caring for someone else who is.

The new regulations will apply only to these groups, plus the new addition of pregnant employees. These employees will be given the right to bring a dispute over a flexible work request denial to the FWC, which will have the power to order their employer to grant the request.

However, employers and HR should also remember that they can still deny a request, if it’s due to reasonable business grounds.

Supply chain delays and the administrative costs associated with bringing in another employee to do the job are other potential financial considerations that could constitute ‘reasonable grounds’ to refuse the request.

It will also depend on the nature of the business. What’s costly for one employer might not be costly for a larger employer.

Or there might not be capacity to change working arrangements without disrupting the working arrangements of other employees.

For example, let’s say the applicant says, “I don’t want to work Thursdays because that’s the day I take my elderly relative that I’m caring for to the doctor, and I’ll work another day.” It’s a reasonable request, but maybe five other people have already been granted Thursday off, and the employer can’t grant it to a sixth person.

If a business can clearly demonstrate that it has assessed a request for flexibility and found that it was not reasonably feasible due to cost or operational factors, the employer will have reasonably declined the request as required by the Act.

Lessons for HR and employers

Although the bill’s new regulations do not apply to all workers, the decision could have a knock-on effect that could make it easier for other employees to negotiate flexible work arrangements in their employment contracts.

With the growth in enterprise bargaining and multi-employer bargaining, if the legislation has the impact the government wants it to have, more employees will be covered by enterprise agreements. And those enterprise agreements could provide for a widening of who could ask for flexible work arrangements – and those decisions would be legally binding.

In cases where employers breach these enterprise agreements by denying flexible work requests without reasonable grounds, the matter could still be taken to the FWC
for arbitration.

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