From the lawyers: What you need to know about workplace reforms

Confused about the number of workplace law reforms coming into effect? Here, three lawyers break down the biggest takeaways.

On 6 June 2023, several amendments to workplace laws came into effect through the government’s Fair Work Legislation (Secure Jobs, Better Pay) Act 2022.

These changes revolved around five core areas:

1. Flexible work requests

2. Unpaid parental leave

3. Multi-employer bargaining

4. Better off overall test (BOOT)

5. Agreement making

In a recent blog post to the firm’s website, Colin Biggers & Paisley Lawyers’ Leanne Dearlove, Megan Kavanagh, Jay Keenan, and Joel Beveridge discussed how these changes are set to impact employers.

Flexible work requests

As previously covered by HR Leader, the changes to flexible work requests is arguably the amendment with the biggest impact on employers.

While previously, an employee had the right to request flexible work arrangements under the National Employment Standards (NES), an employer’s decision about such requests was final and they were not required to negotiate or compromise on arrangements if they did not accept the terms of the request.

Now, employers have to discuss any request with the employee and make genuine efforts to reach an agreement. If an employee and an employer cannot reach an agreement, an employee can refer the dispute to the Fair Work Commission, at which point the commission will make an order as to whether or not the employer’s reasons for denying a flexible work arrangement are within “reasonable business grounds’. Alternatively, the commission will order the employer to grant the request or grant the request with certain changes.

“Employers are still entitled to deny a request on ‘reasonable business grounds’ within 21 days of receiving the request. The criteria for this remains the same (i.e. cost, capacity to change, impracticality of request, loss in efficiency or productivity etc.); however, employers must now specifically refer to these reasons in their written reasons for denial under section 65A(6),” the lawyers explained.

Unpaid parental leave

Also covered by HR Leader, employees are given greater power to take extended parental leave.

The amendment means employers are required to discuss requests for extended unpaid parental leave with eligible employees and provide written reasons for requests being denied.

“Employers can propose counter-proposals,” the lawyers explained, noting that the criteria for “reasonable business grounds” remain the same as they do for flexible work requests.

“Similar to disputes for flexible work requests, new provisions have been inserted allowing employees to lodge a dispute in relation to a refusal of an extension for unpaid parental leave. Any dispute can be referred to the FWC for up to and including arbitration,” the lawyers added.

“The extended jurisdiction of the FWC to deal with disputes in relation to these matters is a strong incentive to respond to any requests carefully and in a reasonable manner.”

Multi-employer bargaining

There are different “streams” employers need to understand regarding the bargaining process, defined as multi-enterprise agreements:

a. Single-interest bargaining stream

Both employers and employees (including their bargaining representatives) can apply to the FWC for a single-interest employer authorisation (SIEA), the lawyers explained.

“The FWC must make the authorisation if it is satisfied that:

• The employers have agreed to bargain collectively and were not coerced into doing so;
• The employers are ‘common interest’ employers and carry on similar business activities, which may have regard to factors set out in s.249(3) of the FWA, including:
  • geographical location;
  • regulatory regime;
  • the nature of the enterprises (size and scope) to which the agreement will relate, and the terms and conditions of employment in those enterprises;
  • where it is not contrary to public interest to make the SIEA;
• At least some of the employees to be covered by the proposed agreement are represented by a union; and
• Each of the parties has had an opportunity to express their views to the FWC.

“Importantly for employers with at least 20 employees, if a union applies for a SIEA, the FWC can make the SIEA without the consent of the employers to be covered if the majority of the employer’s employees want to bargain for the agreement,” the lawyers said.

b. Supported bargaining stream

This stream replaces the “low-paid bargaining stream”, which was in place prior to 6 June 2023.

Under the new section 242 of the Fair Work Act, the power to apply for a supported bargaining authorisation (SBA) is extended to bargaining representatives and authorised employee organisations.

“This stream is more forgiving than the SIEA: to be added to an SBA, the employer cohort (i.e. the majority of the employer’s employees) must vote in favour of being added,” the lawyers explained.

“In any application, the FWC will have regard to factors set out in the new section 243 of the FWA, including:

• Pay and conditions prevailing in the relevant industry, including whether low rates of pay are prevalent.
• Common interests of the employers (regarding the same factors as SIEA’s).

“SBA’s cannot be made for general building or construction companies or companies with existing agreements not passed their nominal expiry.

“In each of the above streams, the FWC has broad powers to make bargaining orders with respect to disputes or stalemates and employees or their representatives are entitled to take protected industrial action.”

c. Cooperative bargaining stream

According to the lawyers, if neither of the above authorisations is made under the new Secure Jobs, Better Pay (SJBP) reforms, then a cooperative workplace agreement can be made.

“This is a voluntary multi-employer bargaining stream that is familiar to existing practices. It excludes bargaining orders, and protected industrial action is not allowed,” they said.

Better off overall test

Simply referred to as the BOOT, this is a test the Fair Work Commission uses to assess registered agreements against awards.

“The registered agreement is compared to the relevant award to ensure the employee is better off overall under the registered agreement in order for it to be approved,” the commission’s website explained.

The lawyers noted: “In making this assessment, the FWC will only consider the patterns or kinds of work that are reasonably foreseeable with respect to the nature of the enterprise(s) to be covered by the proposed agreement.

“The 6 June 2023 amendments also ensure the parties’ views towards an agreement are given primacy, particularly where each party holds a common view about whether the agreement should pass the BOOT, subject to independent assessment. Importantly, the FWC will have power to make amendments as necessary to ensure the agreement passes the BOOT.”

Agreement making

This sees provisions amended when it comes to dealing with making and approving enterprise agreements.

The changes are intended to simplify the approval process, replacing existing requirements for approval with a single broad requirement that the enterprise agreement has been “genuinely agreed to” by the employees.

“Genuine agreement will be established with respect to an amended section 188 of the Fair Work Act, factoring in:

• The matters set out in the Fair Work (Statement of Principles on Genuine Agreement) Instrument 2023;
• Whether the employees who are requested to vote on the agreement have a sufficient interest in its terms and are sufficiently representative of the employees to be covered;
• For multi-enterprise agreements, whether written agreement to put the agreement to a vote is obtained from the relevant employee organisations;
• Where notice of employee representational rights was required, whether such notice was given;
• Whether the terms of the agreement have been sufficiently explained to the employees who are requested to vote.

“The existing safeguard which allows for enterprise agreement approval despite minor technical or procedural deficiencies will continue,” the lawyers explained.

They continued: “The statement of principles, provided for in section 188B of the Fair Work Act, sets out several prescribed factors that may influence if an assessment has been ‘genuinely agreed to’, including things like:

• Informing employees of bargaining for a proposed enterprise agreement;
• Informing employees of their right to be represented by a bargaining representative;
• Providing employees with a reasonable opportunity to consider a proposed enterprise agreement;
• Explaining to employees the terms of a proposed enterprise agreement and their effect;
• Providing employees with a reasonable opportunity to vote on a proposed agreement in a free and informed manner, including by informing employees of the time, place and method for the vote;
• Any matter prescribed by the regulations for the purposes of this paragraph;
• Any other matters the FWC considers relevant.

“Employers who are approaching or engaging in bargaining must be aware of these amendments and ensure that they are complying with Statement of Principles to get the genuine agreement of their employees.”