Secure Jobs, Better Pay: Pay is no longer a secret + no fixed term contracts longer than 2 years
The Fair Work Amendment (Secure Jobs, Better Pay) Act 2022 came into force on 7 December 2022 – introducing the most significant changes to industrial relations laws in Australia in nearly 2 decades.
As the name of the Act suggests, the new changes are geared towards improving pay conditions, pay equity and job security.
There are some immediate impacts for employers which will require many to implement changes within their business and to their employment contracts.
Pay secrecy
From 7 December 2022, an employee is allowed to disclose to any other person their pay, and any terms and conditions of their employment which determine their pay (e.g. the number of hours they work).
An employee may now also ask any other employee (whether employed by the same employer or a different employer) about the other employee’s pay, and any terms or conditions which determine their pay.
Both of the above rights are now expressly stated as being “workplace rights” of an employee – and an employee cannot have adverse action (e.g. warning, dismissal) taken against them as a result of exercising those rights – otherwise they could have grounds for bringing a general protections claim against the employer.
Despite the above, employees cannot be forced to give this information to another employee if they do not want to.
Also, employees can exercise these rights even after they leave their employment.
As a result an employer is now prohibited against including pay secrecy clauses in their employment contracts (otherwise they can be subject to penalties) and any existing terms will cease to have any effect.
Fixed term contracts
From 6 December 2023, there will be a prohibition against the use of fixed term contracts which exceed 2 years for the same role.
This includes any renewal of an existing fixed term contract, or consecutive contracts – i.e. the total term cannot exceed 2 years.
There are some limited exceptions, whereby a fixed term contract in excess of 2 years will be permitted, including:
the employee is engaged under a training arrangement
the employee is engaged to cover the temporary absence of another employee (e.g. maternity cover)
the employee earns above the high income threshold (currently $162,000 p.a.)
From 6 December 2023, employers will need to issue a Fixed Term Contract Information Statement to all employees they’re engaging on new fixed term contracts – before or as soon as practicable after entering into the contract (which will be available to download from Fair Work at a later date).
Importantly, if a fixed term contract is made in breach of the new provisions, the employee will automatically become a permanent employee, with all terms of the contract (except for the expiry date) continuing to apply.
The new rules only apply to new fixed term contracts made after 6 December 2023 – however, will apply to renewals to existing contracts made after that date. Employers should also start reviewing their existing arrangements and amending their employment contracts to ensure they are prepared.
Next steps for employers
If your business utilises fixed term arrangements:
review your current HR processes to monitor and ensure the duration of any new fixed term contracts (including any renewals or consecutive contracts) do not exceed 2 years (subject to any of the exceptions)
review and seek legal advice on your current fixed term employment contract templates to check if any amendments are required
review and seek legal advice on your current fixed term arrangements to check if they are captured by the changes (e.g. whether any one of the exceptions apply)
for any of your current fixed term arrangements which are captured, put mechanisms in place to ensure there are no renewals or consecutive contracts after 6 December 2023 which will cause the total fixed term to exceed 2 years
ensure any new fixed term employee is given a Fixed Term Contract Information Statement from 6 December 2023 onwards
Remove pay secrecy clauses in your employment contracts and become familiar with the new prohibitions and workplace rights introduced in your dealings with employees
Other important changes
The IR reforms also included significant changes to enterprise bargaining, terminating enterprise agreements, the sunsetting of “zombie” enterprise agreements, sexual harassment and flexible working arrangements.
Stay tuned for our further articles on these changes so that you can stay informed about your obligations as an employer under the new (and significant) reforms.
You can contact our employment law team if you have any questions about your obligations as an employer or need help to update your employment contracts.