On 27 October 2022, the Federal Government introduced the Secure Jobs Better Pay Bill (“the bill”). The bill seeks to amend the Fair Work Act by addressing wage stagnation, closing the gender pay gap, promoting job security, strengthening protections for workers, and strengthening the role of the Fair Work Commission.
Despite some of the comments in the media, the reforms are modest and limited. It is to be hoped that there will more changes coming to address the underlying issues that arise from the decimation of Union, and the increasing gap between high and low income earners.
Wage Stagnation and the Gender Pay Gap
To address the rapid rise in the cost of living, the bill introduces reforms aimed at achieving better pay and conditions through bargaining. The most significant of these is multi-employer bargaining, which would give workers, most of them in feminised industries, access to bargaining.
It is hoped that multi-employer bargaining will be most beneficial for those in the childcare, aged car and cleaning sectors, which mostly employ women.
As compared to enterprise bargaining where one (usually large) employer bargains solely with its employees, multi-employer bargaining will encourage employees in one sector to band together and bargain with several employers. Business interests have expressed concern that multi-employer bargaining will lead to industrial action. Such a response is generally very typical of industry organisations in the face of any change that may allow employees to organise better in their own interests. Indeed, most academic studies show that multi-employer bargaining leads to better outcomes than enterprise bargaining in several countries, such as Germany, Denmark, and Norway.
Secondly, the bill will ban pay secrecy clauses, which prohibits workers from discussing their salary with others. This will discourage companies from concealing gender pay discrepancies, and instead, will improve transparency, and empower women to negotiate for better pay. The practice of pay secrecy has long permitted entrenched pay differences to go unnoticed.
Thirdly, under the bill, fixed term contracts will be limited to two years and a term of a contract that provides for a longer duration will be ineffective. It will also prohibit the consequent renewal of a fixed term contract so the worker is employed for more than 2 years. In his second reading speech, the Minister alleged that more than half of those employed under fixed term contracts are women. To limit the term to two years will prevent employers from using fixed term contracts for prohibited reasons and encourage job security. The prohibition does not apply, however, where there is an exception in a modern award.
Fourthly, the bill will include a new prohibition on sexual harassment in the workplace, which would apply not just to current workers but to potential workers as well. The bill also seeks to introduce a new dispute resolution under the Fair Work Commission (“FWC”), which will be merged with the existing jurisdiction of the FWC to make stop orders. The FWC, under this new process, can order the payment of compensation to the aggrieved party and even hold principals vicariously liable for the acts of their agents or employees. There are significant concerns around these changes which seem likely to actually water down existing protections. A better option may be to just increase funding to the Australian Human Rights Commission.
Fifthly, the bill will strengthen the existing anti-discrimination framework by including in the list of protected attributes, breastfeeding, gender identity, and intersex status.
Expanding the powers of the Fair Work Commission
As a result of the many reforms under the bill comes the expansion of the powers of the Fair Work Commission. This includes providing the FWC with powers to resolve disputes involving pay inequity, sexual harassment and flexible working arrangements. The bill also aims to increase the scope of assistance the FWC can provide to parties in a bargaining dispute.
However, given the record of the Commission in unfair dismissal claims, and the extent to which its membership is made up of individuals appointed by the Coalition Government, it remains to be seen whether this will have any beneficial effect.
In addition, the bill seeks to abolish the Registered Organisations Commission and the Australian Building and Construction Commission (“ABCC”) and transfer their functions and powers to the FWC. Given the extent to which the ABCC was a statutory organisation focused on the destruction of Unions, this is to be welcomed.
Access to the bill, the Explanatory Memorandum and Minister’s Second Reading Speech can be found here.