Bills Digest No. , Bills Digests alphabetical index 2022–23

Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022

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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

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.

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

Abbreviation  Definition 
ABCC Australian Building and Construction Commission
BCIIP Act Building and Construction Industry (Improving Productivity) Act 2016
BOOT Better Off Overall Test
CWA Cooperative Workplace Agreement
EA Enterprise Agreement
FWAs Flexible Working Arrangements
FW Act Fair Work Act 2009
FWC Fair Work Commission
FWO Fair Work Ombudsman
FWRO Act Fair Work (Registered Organisations) Act 2009
MEA Multi-Enterprise Agreement
NERR Notice of Employee Representative Rights
NES National Employment Standards
PAB/ PABO Protected Action Ballot
PABO Protected Action Ballot Order
PC Productivity Commission
PIA Protected industrial action
RO Registered Organisation
ROC Registered Organisations Commission
SBA Supported Bargaining Agreement
SIA Single Interest Employer Authorisation
SIEA Single Interest Employer Agreement

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

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

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

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:

  1. Changes to enterprise agreement processes – regarding EA bargaining, approval, termination, and dispute resolution processes (including compulsory arbitration for intractable EA bargaining disputes) and
  2. Changes to multi-business enterprise bargaining – including revising and renaming existing EA processes, with changes to the existing ‘single interest employer authorisation’ regime
  3. the abolition of the ABCC
  4. improving job security
  5. promoting flexible working arrangements and
  6. 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 20on 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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