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Understanding the next stages of workplace reform

14 April 2023

Following on from the significant legislative changes with the passing of the Fair Work Legislation Amendment Bill, the Commonwealth Government introduced its Fair Work Legislation Amendment Bill 2023 to Parliament on 29 March 2023.

Although less sweeping than the Secure Jobs, Better Pay changes, this more recent legislation contains some important proposals to be aware of.

The Bill has been referred to a Senate Committee, with a report due at the end of April 2023.

The Victorian Chamber’s Workplace Relations Consultants have reviewed the proposed changes and provide their insights and observations below.

#1: Superannuation entitlements in the NES

Perhaps the most significant change under this proposed legislation is the inclusion of employer superannuation contribution entitlements in the National Employment Standards (NES), giving Australian workers the right to pursue any unpaid superannuation as a workplace entitlement.

This further expansion to the NES will complement the regulatory powers of the Australian Tax Office (ATO). It will allow for a broader range of employees, an employee organisation (such as union) or the Fair Work Ombudsman (FWO) to enforce and recover unpaid superannuation on their behalf.

Although this proposed change does not increase or alter employer superannuation obligations, we consider it may risk confusing regulatory responsibilities and add to the compliance requirements for employers.

#2: More flexible unpaid parental leave

This change is intended to align the entitlement to Unpaid Parental Leave (UPL) under the NES, with amendments to the Government Paid Parental Leave (PPL) scheme. This is a significant set of changes to the way UPL currently operates.

Generally, unpaid parental leave must be taken in one continuous period. The exception to this rule is the entitlement to access up to 30 days’ flexible UPL, which may be taken a day at a time within the first 24 months of the child’s birth or adoption placement.

Under the proposed changes, flexible UPL may be used by pregnant employees in the six weeks prior to the expected date of birth. Flexible UPL days will also be extended to up to 100 days to align with increases to PPL days and may be used by any parent before or after a single continuous period of UPL. This effectively means that taking flexible UPL days would not represent a break in a continuous period of UPL.

The Fair Work Act will also be amended to introduce gender-neutral language, allowing any parent to access UPL provisions equally, removing the current barriers preventing employee couples from taking UPL at the same time.

Importantly, the provisions allow for further extension of flexible UPL by regulation in line with the future planned extension of the PPL scheme, meaning we will need to keep an eye out for future rule changes.

#3: Protection for migrant workers

The intent of these changes is to ensure migrant workers (including temporary migrant workers working in Australia) enjoy the protection of the Fair Work Act 2009 regardless of immigration status under the Migration Act 1958.

That is, regardless of any breach of a visa condition or the worker no longer holding a visa entitling them to remain in Australia, migrant workers would have access to the benefits of the Fair Work Act.

Employers will need to carefully monitor and consider the impact of these broader obligations.

#4: Workplace determinations

In certain enterprise bargaining circumstances, when specific requirements are met and the negotiating parties cannot reach agreement, a full bench of the Fair Work Commission (FWC) may determine terms and conditions of employment. This is called a ‘workplace determination’.

When a workplace determination comes into operation and applies to a group of employees, an earlier enterprise agreement should cease to apply. The Fair Work Act does not currently expressly state this. This proposal is intended to remove any ambiguity or doubt and ensure a specific rule sets out the interaction between a workplace determination and an earlier enterprise agreement.

This proposed change under the Protecting Worker Entitlements Bill is intended to clarify rather than alter the current operation of the Fair Work Act.

#5: Other amendments

The Protecting Worker Entitlements Bill proposes to decrease the administrative burden for employers when making deductions from employee wages, which are principally for the employee’s benefit and not for the benefit of the employer. The change is also intended to provide protection to employees against any undue coercion by employers, regarding deductions from wages.

Employees would no longer be required to provide a new written authorisation every time the amount of a deduction from their pay varies. Employees would be able to provide a single authorisation, allowing employers to make deductions for varying amounts (for example, to accommodate changes in fees for a specified deduction).

This amendment would come into force six months after commencement of the legislative change, to allow time for employers and employees to adjust their arrangements.

The Bill also contains amendments to the Coal Mining Long Service Leave Scheme, which will ensure that casual employees are treated equal to permanent employees, regarding the accrual and access of long service leave entitlements. This amendment will be limited in application, although affected employers may wish to seek our assistance with potential compliance challenges.

Finally, the Bill proposes to correct some minor technical issues in the Fair Work Act and will provide for transitional arrangements for some of the elements outlined above.

These proposed changes are not yet law, and no action is required at this stage. The Victorian Chamber will continue to monitor the passage of the Protecting Worker Entitlements Bill through Parliament and will provide further updates where necessary.

This article was originally published by The Victorian Chamber of Commerce

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