Insights & News

May 25, 2023

6 June 2023 heralds more change in workplace relations for business.

Revamped and much expanded multi-employer bargaining will commence, employees may be dragged into enterprise agreements whether willing or not, employees seeking flexibility and parental leave get ramped up rights, and pay secrecy prohibitions will be expanded and penalties for non-compliance are applied.

Business is reeling under this onslaught of change. We will tell you what it means.

What are the changes to bargaining disputes procedures (intractable bargaining disputes) and PABOs?

Do I have to bag a bargain even if I don’t want one?

Enterprise bargaining is where terms and conditions of employment are set at an individual enterprise level, rather than through an industry or occupation level award.

In the new world, it’s much easier for employee organisations (unions) to start the process of bargaining with an employer for a single-enterprise agreement without the employer’s agreement. In particular, they’ll be able to force an employer to bargain where:

• the proposed single-employer agreement replaces an earlier single-employer agreement;
• it has been less than five years since the earlier agreement’s nominal expiry date; and
• the proposed agreement will cover the same, or substantially the same, employees that were covered by the earlier agreement.

These changes operate alongside new provisions about bargaining orders which enable unions to apply to the FWC for bargaining orders if they have made a written request to an employer to bargain for a single-enterprise agreement.

So does the FWC have more power to impose decisions on the parties?

Under the old system, the FWC had limited power to arbitrate disputes. This was mainly confined to circumstances where there was a serious and sustained breach of good faith bargaining in respect of which a serious breach declaration has been made, or protected industrial action was terminated by the FWC.

The FWC now has beefed up powers to arbitrate bargaining disputes, with intractable bargaining declarations replacing serious breach declarations and determinations.

In the new world, any bargaining representative can apply for an intractable bargaining declaration except in relation to a proposed cooperative multi-enterprise agreement (which we explain below).

The FWC will make the declaration where:

• the FWC has dealt with a bargaining dispute;
• the applicant participated in the dispute;
• there is no reasonable prospect of agreement; and
• it is reasonable in all the circumstances to do so.

The FWC may order a post-declaration negotiation period for a specified time.

The Full Bench of the FWC may make an intractable bargaining workplace determination if there are outstanding disputes after a declaration is made, or if there is post-declaration negotiation period, after that period. The FWC will determine the outstanding issues in dispute, with the FWC determination becoming part of the determination and binding on the employer and employees.

This means unions and employers have an alternative source of leverage and bargaining strategies will need to adapt to address this.

What about industrial action?

Before 6 June, a protected action ballot order (PABO) pressed the button for employees to vote up protected industrial action. Protected industrial action then usually commenced within 30 days of the ballot approval result.

However, in the new world those bargaining for single enterprise agreements will be forced back to the table before the PABO closes for a mandatory conciliation conference. A “no show – big stick” will punish bargaining representatives who fail to attend where any subsequent industrial action will be unprotected.

This mandatory conciliation may present an opportunity to resolve bargaining. It will also take resources away from a business at a time when contingency planning may be occurring.

If the conciliation is not successful, employees still have 30 days from PABO results to commence industrial action. They must provide either three days’ notice (for single enterprise agreements) or 120 hours’ notice (for multi enterprise agreements) or up to seven days’ notice (if ordered by the FWC).

What does this mean for employers?

The balance of power between employees and employers when conducting negotiations on enterprise agreements has been changed. We suggest employers review their bargaining strategies and make necessary changes to plans to take these changes into account (including by contingency planning in advance).

What are the changes to the Enterprise Agreement approval process and Better Off Overall Test and why should I care?

Is the approval process simpler?

The process for FWC approval of enterprise agreements has been ‘simplified’ for employers and focuses on whether there is genuine agreement between the parties.

The FWC’s decision about “genuine agreement” will align with the Statement of Principles on Genuine Agreement.

Broadly speaking, genuine agreement requires employers to demonstrate an authentic exercise in agreement-making, including:

• by giving employees information about bargaining and their right to be represented by a bargaining representative;
• by providing employees with a reasonable opportunity to consider a proposed agreement and become informed about it prior to a vote;
• by explaining the proposed agreement terms and their effects to employees; and
• by providing employees with a reasonable opportunity to vote on an agreement.

The FWC will also consider any other matters it considers are relevant. For example, it is likely the FWC will look at employees’ comparable rates of pay under the proposed enterprise agreement when deciding whether employees have sufficient interest in the agreement. This is consistent with Full Federal Court decision in One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union (2018) 262 FCR 527. In that case the Full observed that whether an agreement has been genuinely agreed involves consideration of the authenticity of the agreement of the employees, including whether the employees who voted for the agreement had an informed and genuine understanding of what was being approved.

What does this mean for employers?

The stated goal is simplification but the increased discretion given to the FWC means it is very important for employers to be aware of the Statement of Principles and monitor how it is applied in future decisions of the FWC.

Also, voting employees must have a “sufficient interest” and be “sufficiently representative” of employees who will be covered. This means the voter cohort must authentically represent employees in terms of size and industry, occupation and classification.

Businesses must ensure they avoid:

• a small cohort of employees (paid above the agreement) voting up an agreement that will cover more employees in the future; and
• employees engaged in one industry, occupation or classification voting up an agreement that covers employees across a substantially wider range of industries, occupations or classifications.

Are the changes to the Better Off Overall Test better?

The Better Off Overall Test (BOOT) provisions have been revised to make significant changes to:

• which employees need to be better off overall;
• how the FWC approaches the application of the BOOT (i.e. “reasonably foreseeable employees” rather than “prospective award covered employees” and reasonably foreseeable patterns or kinds of work or types of work); and
• the measures the FWC can take to address any BOOT concerns.

The post 6 June BOOT removes unnecessary complexity. The FWC will no longer conduct line-by-line assessments of a proposed enterprise agreement against the terms of the underlying Modern Award. This was a source of much frustration for employers.

Instead, the BOOT will be a global assessment, with the FWC having regard only to patterns or kinds of work, or types of employment, that are reasonably foreseeable at the time of the BOOT.

As a motivator for all parties, if the agreement does not satisfy the BOOT, the FWC can amend or remove terms so the agreement passes the BOOT. It is the FWC who decides these amendments and not the employers, employees or unions – although the FWC must consider their views. Most parties will wish to avoid this outcome, especially employers.

If the reasonably foreseeable employees or patterns or kinds of work, or types of work change after the test time, employers, employees and unions may apply to the FWC to reconsider whether the agreement continues to satisfy the BOOT. If it doesn’t, the FWC may accept an undertaking or amend the agreement. An amendment operates seven days after the Commission makes the amendment or another day specified in the amendment, which may be a day before the amendment is made.

What does this mean for employers?

It should be easier for employers to demonstrate that employees have genuinely agreed to a proposed agreement, and they are less likely to trip up on technicalities.

The FWC is less likely to raise BOOT issues for enterprise agreements especially if the employer and bargaining representatives share a common view. Employer undertakings may be less common as the FWC may amend an agreement on its own motion.

However, agreements are no longer “set and forget”. Employers covered by enterprise agreements will need to revisit BOOT assessments even after the agreement has been approved by the Commission to avoid applications for the BOOT to be reassessed where there has been a material change in working arrangements or the relevant circumstances were not properly considered during the approval process.

Of course, there is also the safeguard against agreements which are not the result of collective bargaining in good faith, including “unrepresentative” and “low voter cohort” agreements.

Businesses will be well advised to:

• undertake a proper analysis of voting cohorts to make sure they are representative;
• be familiar with Statement of Principles on genuine agreement; and
• proactively timetable reviews of BOOT.

What do the new supported bargaining and single interest authorisation bargaining streams do?

We will have three types of multi-enterprise agreements: cooperative workplace agreements, single interest employer agreements and supported bargaining agreements.

Bargaining for a multi-enterprise agreement must involve employee organisations.

The type of multi-enterprise agreement being bargained for will (at least initially) be determined by how the bargaining commenced.  For example, if the bargaining commenced:

• by consent, it will be a cooperative workplace agreement;
• because of a single interest employer authorisation, it will be a single interest employer agreement; or
• because of a supported bargaining authorisation, it will be a supported bargaining agreement.

The type of agreement ultimately made will be determined by the authorisation (if any) in place immediately before the agreement was made. For example, if a single interest employer authorisation was in place immediately before the agreement was made, it will be a single interest employer agreement.

Also, the FWC cannot approve a cooperative workplace agreement unless it is satisfied that at least some of the employees covered by the agreement were represented by a union in bargaining.

Which industries are likely to see supported bargaining authorisations?

The supported bargaining authorisation replaces the low-paid bargaining provisions. It is intended to assist employees who have difficulty bargaining at the single-enterprise level. This new authorisation is easier to access and has less stringent criteria.

For example, supported bargaining is likely to feature in low-paid industries such as childcare, aged care etc.

When an application for a supported bargaining authorisation is made, the FWC will assess whether it is appropriate for the parties to bargain together. It will look at prevailing pay and conditions in the relevant industry, whether employers have clearly identifiable common interests (eg, location, nature of enterprise and terms and conditions) and whether the number of bargaining representatives would be consistent with a manageable collective bargaining process and other matters the FWC sees as relevant. For example, imagine what it might be if you had more than 100 employee representatives as is the case in the Apple bargaining dispute. This required the Deputy President of the FWC, DP Hamptom, to make a statement and recommendations on how such difficulties may be managed.

If an employer is specified in a supported bargaining authorisation, the employer cannot bargain for a different type of agreement. That is, they’re locked into making a supported bargaining agreement. The only means of avoiding this is to make an application to vary the authorisation on the basis that the employer’s circumstances have changed.

An employer specified in a supported bargaining authorisation may apply to the Commission for a variation to remove its name from the authorisation. The Commission must vary the authorisation to remove the employer’s name if it is satisfied that, because of a change in the employer’s circumstances, it is no longer appropriate for the employer to be specified in the authorisation. An employer, an employee bargaining representative or a union entitled to represent the industrial interests of an employee in relation to work to be performed under that agreement, may also apply to have an employer’s name added to the authorisation.

What do these changes to multi-employer bargaining mean for employers?

Bargaining will be a reality even for the unwilling or, indeed, the unaware.

The new provisions are designed to make it easier for employees (and their representatives) to bargain for multi-enterprise agreements. The broader eligibility and relaxed preconditions for making authorisations mean employers are much more likely to be compelled to bargain for a multi-enterprise agreement. Moreover, once they’re locked in, it will be extremely difficult for them to extricate themselves from the process. This stream of bargaining will be particularly relevant for medium-sized employers that have traditionally “fallen under the radar”.

What about the single interest authorisation?

Before 6 June, two or more employers who would be covered by a proposed enterprise agreement could apply for a single interest employer authorisation. However, this was limited to certain employers such as franchisees or employers who had obtained a ministerial declaration based on their common interests. This meant it had limited application.

In the new world, the existing limits on access to single interest employer authorisations have been removed and the application process has been simplified so:

• employers with common interests (who are not franchisees) no longer need to obtain a ministerial declaration before applying for a single interest employer authorisation;
• employee bargaining representatives can apply for a single interest employer authorisation, subject to majority support of the relevant employees; and
• both employers and employee bargaining representatives can apply to vary a single interest employer authorisation to add or remove employers.

This is of much wider application and should be on an employer’s radar.

A single interest employer authorisation ceases operation when the relevant enterprise agreement is made or after 12 months (or a longer period, if extended by the FWC). The FWC may extend the period if it is satisfied:

• there are reasonable prospects that the agreement will be made if the authorisation is in operation for a longer period; and
• it is appropriate in all the circumstances to extend the period.

What does this mean for business?

If an employer thinks a single interest employer authorisation or a supported bargaining authorisation will likely be made by the FWC (i.e. the employer will be required to bargain), the best approach may be to consent to that bargaining.

This has two significant upsides:

• employees cannot take protected industrial action; and
• the FWC will not be able to arbitrate the terms and conditions by making an intractable bargaining workplace determination.

So, what about Flexible Working Requests?

More employees are now able to request flexible working arrangements, including those who are experiencing family domestic violence and pregnant employees.

Also dispute resolution has been made available to employees with flexible working arrangements entitlements. Previously only modern award covered employees could seek dispute resolution from the FWC.

Refusal is no longer a slam dunk for award free employees and employers must:

• discuss the request and genuinely try to reach agreement with the employee about other changes that can be made to accommodate their circumstances;
• consider the consequences of the refusal for the employee;
• refuse only on reasonable business grounds; and
• provide the refusal in writing, including the details of the reasons for refusal and any other changes the employer would be willing to make that could accommodate the employee’s circumstances.

Only after taking these steps may an employer refuse a request, on account of reasonable business grounds (which are unchanged). The decision must also have regard to the consequences of the refusal for the employee.

If the dispute is referred to the FWC, the FWC will mediate to try and come to an agreed outcome or may make a recommendation or express an opinion. In some circumstances, the FWC may also arbitrate and issue an order to affirm the refusal, grant the employee’s request or make other changes to accommodate the employee. Employers must comply with this otherwise they may be fined.

For employers already dealing with Modern Award based flexible working requests, this is more of the same. Of course, this may change too after the FWC reviews modern awards regarding this NES entitlement and makes necessary consequential amendments.

The President of the FWC, Justice Hatcher, has issued a Statement providing guidance on how the FWC will deal with this new entitlement.

So, what does this mean for business?

Yoga may be an option. At a minimum there needs to be genuine thought to whether an arrangement of some kind can be permitted for eligible employees.

The President’s Statement should also be a doorstop for HR practitioners.

If a flexible arrangement is agreed, give careful thought to what additional policies or contractual arrangements may be appropriate to ensure that the arrangement aligns with performance and conduct management and is safe.

What about unpaid parental leave extensions?

What do I do with a request to spend more time with their child?

Similar to requests for flexible working arrangements, employers must now give more regard to requests to extend unpaid parental leave. It is no longer a question of simple technical compliance accompanied by a refusal.

When an employee makes a request to extend a period of unpaid parental leave, employers must discuss the request with them, and if they refuse the request, must provide the reasons for refusal in writing. If there is a different extension period that the employer can agree to or is willing to consider, the employee should be informed of this in the written notice.

As is the case for requests for flexible working, the FWC can deal with disputes about refusing to extend unpaid parental leave, including by conciliation, mediation or arbitration. If the FWC arbitrates and an order is issued, a failure to comply may mean a fine.

What does this mean for employers?

The President’s Statement provides excellent guidance on how the FWC will approach requests to extend unpaid parental leave.

Employers must give genuine consideration about whether to agree to an extension. If agreeing, employers would likely benefit from some agreed keeping in touch incentive to ensure that the parent remains embedded in the workforce.

What about pay secrecy?

Pay secrecy prohibitions started on 7 December 2022 for employment contracts entered into after that date and older contracts without pay secrecy provisions. However, those provisions did not apply to older contracts with pay secrecy provisions, unless the contract was varied. In the new world, it is now unlawful for employers to enter new contracts (or other written agreements) with employees that contain pay secrecy clauses. The prohibition does not, however, extend to contractor/consulting arrangements.

Employees will also have a workplace right to ask other employees about, and disclose their own, remuneration and relevant conditions of employment, such as hours of work (i.e. except for older contracts with existing pay provisions). Employees may use this information to determine if their remuneration is fair and comparable to others in the same workplace and/or industry.

Employees cannot be compelled to disclose information about their remuneration and retain the right not to share this information if they do not want to. An employer will breach the general protections provisions of the FW Act if they take adverse action against employees who ask for pay information or employees who wish to keep it secret.

What does this mean for employers?

The only permissible pay secrecy provisions are those in contracts made before 7 December 2022. This exception continues until the contract is varied by agreement. In practice though, the exception will have negligible impact save for the extent of liability if there is widespread non-compliance, in which case it only applies to eligible contracts or instruments.

If an employer is applying a discretionary approach to bonus or incentive awards it may pay to have a structured approach to discrimination. Otherwise, an employee getting a lower award who also has a protected attribute may allege discrimination.

May 17, 2023

Unpacking the Fair Work Commission Statement of Principles on Genuine Agreement which appears to replace technicality with uncertainty

From 6 June 2023, the process for approval of agreements was set to become clearer and move away from the prescriptive steps that employers must currently follow.

Following consultation with key stakeholders, the Fair Work Commission (FWC) has now released the final version of its Statement of Principles on Genuine Agreement in enterprise bargaining (Statement of Principles).

• Is it clear? Not necessarily – Technicality may be replaced with uncertainty about interpretation.
• Is it less prescriptive? Maybe – New steps and considerations could potentially be applied in a prescriptive way.

There are new obligations that employers must endeavour to satisfy in order to meet the genuine agreement test.

The Statement of Principles essentially codifies and condenses to a single document a number of the tests and considerations that have, until now, been expressly stated in the FW Act or developed by the FWC and Federal Courts in previous cases.

It marks a key milestone in the FWC’s preparation for numerous bargaining-related amendments to the Fair Work Act 2009 (Cth) (FW Act) (refresh your memory with Kingston Reid’s Secure Jobs, Better Pay Act Overview).

How will the Statement of Principles change enterprise agreement approval applications?

Informing employees of their right to be represented by a bargaining representative

What is clear: Employers may be able to continue to meet this requirement by issuing a Notice of Employee Representational Rights.

What is uncertain: There is a new provision which provides that employers should not mislead employees (by words, action or otherwise) as to their rights to be represented or the role of an employee organisation as the default bargaining representative.

• There is no clarification on whether this is subjective or objective.
• There is no express statement as to intention.
• The terms “by words, action or otherwise” are uncertain and may be disputed.

Providing employees with a reasonable opportunity to consider a proposed enterprise agreement

What is clear: Employers will be able to continue to meet this requirement by providing employees with a copy of the agreement and the material incorporated by reference for 7 full calendar days before the voting starts (or such other reasonable period agreed with an employee organisation – as distinct from any bargaining representative). This can be a hard copy, an electronic copy or a combination of both.

What is uncertain: There is a new provision which provides that employers can only do so provided that employees have a reasonable opportunity to access and read the material during the whole of the period from the time the material is provided until completion of the voting process.

Explaining to employees the terms of a proposed enterprise agreement and their effect

What is clear: Employers will be able to continue to meet this requirement by taking all reasonable steps to explain the terms of a proposed enterprise agreement, and the effect of those terms, to employees employed at the time who will be covered by the agreement. This should include at a minimum explaining to employees how the proposed agreement will alter their existing minimum entitlements and other terms and conditions of employment.

What is uncertain: This is set as a minimum requirement. When is “more” going to be required?

• There are new requirements which provide for what might “generally be sufficient”. This leaves it open as to when, and in what circumstances, it would not be sufficient.
• It will generally be sufficient to explain the differences in entitlements and other terms and conditions between the proposed agreement and any applicable modern award provisions that have been varied since a predecessor agreement was made (including award variations that have not yet come into effect). There is no reference to the timeframe for new variations to come into effect or what might otherwise be reasonable.
• There are new provisions which set out that there is usually no need to explain “trivial differences” between the proposed agreement and an existing enterprise agreement or modern award that have no effect on employees’ entitlements or obligations. Disputes will arise around what makes it trivial and the extent to which an employer was required to explain a “triviality”.
• There is a provision which provides that section 180(5) will generally not be satisfied if the employer makes an incorrect representation or misleads employees (by words, action or otherwise) about a “significant term” of the proposed enterprise agreement or its effect. All the same issues arise about what makes something “misleading” but there is a question about what is deemed to be “incorrect” about a “significant term”.
• Where oral explanations are given, there must now be a written record or summary of the oral explanation. Additionally, employees should have a reasonable opportunity to attend the oral explanation. There will likely be disputation over what a “reasonable opportunity” is and over what percentage of the employee voting group this applies to (for example, where employees are on leave throughout the relevant period).

Providing employees with a reasonable opportunity to vote on a proposed agreement in a free and informed manner, including by informing the employees of the time, place and method for the vote

What is clear: Employers will be able to continue to meet this requirement by ensuring employees are informed of the time, place and method for the vote at least 7 full calendar days before the day the vote commences (or such other reasonable period agreed with an employee organisation – as distinct from any bargaining representative).

What is uncertain: The method and period of voting should provide all employees entitled to vote with a fair and reasonable opportunity to cast a vote. Who and what determines whether the method and period make it fair and reasonable will likely be put to employers in challenging an approval application.

Other matters considered relevant

What is clear: The matters which the FWC may take into account in determining whether employees have sufficient interest in the terms of an enterprise agreement and whether those employees are sufficiently representative.

What is uncertain: When the following matters will be appropriate to take into account.

• The inference that an enterprise agreement should not be a safety net agreement for employees but rather, a paid rates agreement so that employees are not going backwards in enterprise agreement provisions and have a “sufficient interest”.
• The inference that the employee voting group for an enterprise agreement must cover:
• the full range of classifications in the enterprise agreement;
• the full range of types of employment contemplated (e.g. full time, part time, casual etc);
• the full range of geographic locations the enterprise agreement covers; and
• the full range of industries and occupations the enterprise agreement covers.
• The starting position that an enterprise agreement has not been genuinely agreed unless it was the product of an “authentic exercise”. What makes it “authentic” and, according to who, will be the subject of dispute upon an application for approval.
• The “significant weight” attributed to an employee organisation having “concerns that the agreement was not genuinely agreed to by the employees”. An area of dispute will likely be around the basis of those concerns – specifically, whether they need to be reasonable and in good faith.

Getting ready for the Statement of Principles

It remains to be seen how the Statement of Principles will ultimately be used by employee organisations or applied by the FWC in enterprise agreement approval applications that come before it.

Irrespective of this, employers should:

• be ready to engage with the Statement of Principles as effectively as possible;
• be prepared for a lengthy and more complicated approach to bargaining (and more importantly, approval processes); and
• consider approaches to bargaining.

If your business requires advice or assistance relating to enterprise bargaining, please reach out to the team at Kingston Reid.

April 24, 2023

‘Psychosocial’ hazards have become a buzz word in recent years – largely due to an increase in psychological harm people are suffering in relation to work – and equally due to our increasing awareness about the issues. Psychosocial hazards create a stressful work environment which may cause psychological or physical injuries in the workplace, including worker burnout or depression.

Psychosocial hazards arise in all facets of the workplace and can stem from workers’ social and physical work environments, and include bullying, sexual harassment, poor support, low role clarity, low recognition and poor workplace relationships. Psychosocial hazards can also come from poor job design, a lack of organisational justice and management and the social context of work.

On 1 April 2023, new Work Health and Safety (Psychosocial Risks) Amendment Regulation 2022 (Qld) and the Queensland Code of Practice on Managing Psychosocial Hazards at Work 2022 (Code) commenced to assist persons conducting a business or undertaking (PCBUs) in discharging their obligations to workers regarding psychosocial hazards in the workplace.

The driver for these changes was the Boland Review of the Model WHS Laws in 2018 which concluded that the Model WHS Laws did not do enough to address psychosocial hazards in the workplace. Following this, Safe Work Australia created the ‘Model Code of Practice: Managing psychosocial hazards at work’, the basis for Queensland’s Code. Other harmonised states have already adopted versions of the Code.

What’s changed?

At first glance, not much. PCBUs are already required to address psychosocial hazards. The Work Health and Safety Act 2011 (Qld) (Act) requires PCBUs to ensure the health and safety of their workers which includes both physical and psychological health.

As Workplace Health and Safety Queensland have pointed out, the duty to ensure psychological health of workers is not new. Society just has a better understanding now of the hazards that give rise to psychological harm.

The Code commenced in Queensland on 1 April 2023. A new provision was also added to the Work Health and Safety Regulations 2011 (Qld) requiring PCBUs to manage risks in accordance with the legislative hierarchy of controls (discussed below).

The Code addresses how PCBUs can address psychosocial hazards in the workplace. The Code clarifies existing obligations around psychosocial hazards and aims to help PCBUs implement more effective risk management practices.

In Queensland, the Code has statutory force.

Section 26A of the Act requires PCBUs to comply with codes of practice, or manage hazards and risks in a way that provides a standard of health and safety that is equivalent to or higher than the standard required under a code of practice. A failure to comply with the Code may lead to fines or imprisonment.

By contrast, codes of practice in other harmonised Australian jurisdictions do not create additional duties and no penalties are imposed. They are admissible as evidence of whether a PCBU has complied with their duty. Codes of practice are frequently produced in other jurisdictions as evidence by prosecutors to establish what a PCBU knew or ought reasonably to have known about a hazard or risk, and ways to eliminate or minimise that hazard or risk.

What’s in the Code?

The Code outlines a four-step psychosocial risks management process:

1. identify psychosocial hazards
2. assess psychosocial risks
3. control the risk of psychosocial hazards; and
4. maintain and review control measures.

The Code provides prescriptive guidance about the matters PCBUs must have regard to when completing each step.

This risk management process is not a one-time activity that PCBUs can set and forget. PCBUs must be constantly aware of and engaged in this four-step process to address new psychosocial hazards in the workplace.

An emphasis is placed on the need for and benefit of involving workers in the psychosocial risk management process. PCBUs are encouraged to consult with their workers about how they plan to and how they are going about the psychosocial risk management process.

Workers are encouraged to report psychosocial hazards to PCBUs under the code and a process for responding to these reports is set out to guide users. The hazards workers report will naturally guide PCBUs in their engagement with the risk management process.

What controls should PCBUs implement?

Implementation of effective control measures requires cooperation and communication of PCBUs and their workers. What is effective in one workplace might not be in another. Effective controls should be tailored to the particular hazards and risks identified in the risk management process.

The Code refers to the hierarchy of controls throughout. The hierarchy is a framework created by the Act which sets out the most to least effective forms of risk management available to duty holders.

First, where risks cannot be eliminated entirely duty holders should minimise the risk by substituting or isolating a hazard which gives rise to a risk and by implementing engineering controls (i.e. physical barriers).

Second, duty holders can implement administrative controls like policies and standard operating procedures that minimise exposure and provide information, training and instruction about hazards and risks.

Finally, duty holders can equip workers with personal protective equipment. This may be difficult to envisage for psychosocial hazards. The Code gives examples like hearing protection to reduce stress, and face shields to protect health care workers from distressing environments and patients.

Examples of possibly effective controls are provided throughout the Code.

What do PCBUs need to do?

A Workplace Health and Safety Queensland representative recently gave some simple advice during a public webinar: ‘you should read the code and you should comply with the code’. It is simplistic advice for what is a complex issue – particularly given the intangible nature of many of the hazards the Code is aimed at addressing – but it’s not necessarily untrue.

PCBUs need to know what is in the Code. They should be reviewing their existing controls and consulting with workers to determine if they are currently complying, or if more needs to be done.

As a starting point, review the examples provided throughout the Code. Think about whether any of them resonate with your workplace.

Go through the risk management process. Be guided by the Code to determine if there is more you can do to not only comply, but effectively control psychosocial hazards in the workplace.

Assess your current policies and procedures. Consider whether they deal with, or even contemplate, psychosocial hazards. If they don’t, update them.

Finally, keep a record of the risk assessments you do undertake, and the changes you make. Workplace Health and Safety Queensland have expressed a clear intention to engage in enforcement activity throughout the community. Proper records will be helpful evidence to have when the inspectors come knocking.

April 19, 2023

On remittal from the High Court, ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2, the Full Federal Court considered the last outstanding issue in this long-running saga.

Were the truck drivers entitled to compulsory superannuation under the extended definition of “employee” in section 12(3) of the Superannuation Guarantee Administration Act 1992 (Cth) (SGA Act)?

In Jamsek v ZG Operations Australia Pty Ltd (No 3) [2023] FCAFC 48, channelling the ‘contract is king’ approach (adopted by the High Court in CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2), the Full Court decided they were not.

What is the section 12(3) extended employee definition?

Section 12(3) of the SGA Act provides that a person who works under a contract that is wholly or principally for their labour will be an employee of the other party to the contract. Independent contractors who fall under this definition are deemed by the SGA Act to be employees (for superannuation purposes), and as such, are entitled to compulsory superannuation.

For the truck drivers in this case, the central question was whether the provision of trucking services through a partnership structure fell within this extended employee definition.

The Full Court said three elements needed to be satisfied for s 12(3) and two were not.

First, there was no contract with a natural person in their individual capacity.

Second, the contracts were not wholly or principally for the labour of a person.

There was no contract with a person

The Full Court said that a contract under s 12(3) must be with an identified natural person who is party to the contract in their individual capacity.

However, the truck drivers (and their wives) were parties in another capacity, as partners in a partnership. This meant the contract was not covered by section 12(3).

The deeming of a partnership as a legal person under section 72(1) of the SGA Act, so that obligations, liability and penalties can be imposed on a partnership as an employer, did not change this position. Section 72(1) did not make a partnership capable of being an employee under section 12(3).

Additionally, the Court observed that the requirement of a “natural person contracting in their individual capacity” does not automatically mean that a tripartite contractual arrangement will always fall outside the extended employee definition. Rather, the key focus is on whether there is a bilateral exchange of promises between a natural person (who provides their labour) and another party to the contract (who provides payment for this labour).

It is not simply a matter of counting the number of parties to a contract and looking at who the named parties to a contract are (as this would permit parties to circumvent the superannuation guarantee regime by simply forming contracts with more than two parties). In this regard, the Full Court referred to its earlier judgment in Dental Corporation Pty Ltd v Moffet [2020] FCAFC 118 as an example of a case where an individual was found to be an employee under section 12(3) despite being party to a tripartite services agreement.

The contract was not wholly or principally for the labour of a person

The Full Court agreed that the contracts were not wholly or principally for the labour of a person.

This was to be assessed from the “employer’s” perspective, and the starting point for the enquiry was the terms of the contract.

The contractual terms key to the Court’s conclusion were:

• While the contracts required the provision of labour, they also required the drivers to provide functional and properly maintained equipment, namely their trucks. This was described as “a substantial capital asset” for which the drivers’ partnerships were wholly responsible (this included making arrangements to insure the trucks).
• The partnerships could delegate the drivers’ work to a substitute driver (although this was only with the consent of ZG Operations).

These contractual terms demonstrated that the truck drivers had undertaken to provide a goods delivery service and not a labour service. Labour was a component of the service but was not the “principal benefit” received by ZG Operations (although the Full Court did observe that the truck drivers had failed to adduce evidence of the market value of their labour vis-a-vis the market value of their equipment).

Tips for principals

This is an important case providing principals with guidance on the operation of section 12(3) of the SGA Act.

The case demonstrates that if principals wish to avoid compulsory superannuation, a partnership structure may assist. However, the terms of the relevant engagement contract must be closely scrutinised and must not disclose a bilateral exchange of promises for the provision of, and payment for, an individual’s labour. Of course, care must be taken with this approach as a partnership is not a legal entity distinct from its members.

Even where interposed legal entities such as corporations are utilised, principals need to be careful to ensure that the terms of any services agreement do not entail a bilateral exchange with an individual for their labour. Where possible, and particularly where a principal wishes to avoid liability for compulsory superannuation, it would be wise for a principal to refrain from entering into tripartite arrangements of this kind (which are different to a traditional labour hire arrangement) altogether. Rather, the safest approach may be for a principal to contract directly with a corporate entity, with the parties’ written agreement not making any references to services or labour provided by an individual.

Getting this right is important, particularly as the issue of superannuation underpayments has received significant attention in recent years. The introduction of the Fair Work Legislation Amendment (Protecting Worker Entitlements) Bill 2023 (Cth) into Federal Parliament on 29 March 2023 demonstrates this shift, as this bill seeks to make superannuation entitlements an enforceable right under the National Employment Standards. That said, as currently drafted, this new right under the bill only applies to individuals who fall within the ordinary meaning of “employee” under the Fair Work Act 2009 (Cth) and does not apply to individuals who are employees by virtue of the extended meaning of employee under the SGA Act.

Kingston Reid can assist with any issues relating to the engagement of workers within your organisation, including advising on the most appropriate labour engagement model for your business and assisting with any entitlement-related questions or issues that may arise.

April 18, 2023

Why is this happening?

In 2021, the Queensland Government asked the Queensland Human Rights Commission (QHRC) to review the Anti-Discrimination Act 1991 (Qld) (AD Act) to see if the AD Act needed updating to support equality, non-discrimination and human rights.

On 1 September 2022, the QHRC made 122 recommendations for change and the Government provided an interim response indicating its support.

The Government issued its final response on 28 March 2023 and confirmed its in-principle support for all recommendations.

How extensive are the proposed reforms?

This reform is substantial and the AD Act will be repealed and replaced.

The Government plans to introduce a Bill before its term ends in October 2024 and will consult extensively with stakeholders and the community.

Which changes are the most important?

There are six key changes to keep in mind:

1. Specific objects and beneficial interpretation requirements, where ambiguities in the new Act will be interpreted to benefit the person with a protected attribute.
2. A revised definition of discrimination, a reverse onus of proof and a longer 2 year time limit to make a complaint.
3. Positive duties to eliminate discrimination and sexual harassment and accommodate persons with a protected attribute.
4. A modernised list of protected attributes.
5. Changes to the QHRC’s discrimination complaint and dispute resolution.
6. An enhanced proactive role for the QHRC to ensure organisational compliance.

Many employers will need to make significant workplace changes to prevent unlawful discrimination and harassment if these changes become law.

How will discrimination be defined?

Discrimination will be defined as direct or indirect (or both).

A person directly discriminates against another person if they treat, or propose to treat, that other person unfavourably because of one or more protected attributes, or because of the effect of a combination of protected attributes. For example, a person may directly discriminate if they do not employ a person because of the person’s carer responsibilities.

A person indirectly discriminates if they impose an unreasonable condition, requirement or practice in the workplace which has or is likely to have the effect of disadvantaging a person with a protected attribute or a combination of protected attributes. For example, requiring people to attend out-of-hours meetings may have the effect of disadvantaging persons with carer responsibilities, even if they are paid for their time.

Unlawful discrimination may involve one or more protected attributes and the protected attribute(s) need not be the only reason for the unfavourable treatment. Previously the protected attribute had to be the substantial reason for the treatment.

The burden of proof is now shared. This means a complainant must first show a prima facie case. After that, the employer must then prove the unlawful discrimination did not occur. This is similar to the approach in general protections claims under the Fair Work Act 2009 (Cth).

What is the extent of the positive duty?

There will be a positive duty to make reasonable accommodation for a person with a disability (and their carers) with a non-exhaustive list of criteria for guidance.

Unsurprisingly and consistent with other jurisdictions, there will be a positive duty to take reasonable and proportionate measures to eliminate discrimination and sexual harassment for Respect@Work.

What are the new additional protected attributes?

These are the new protected attributes:

• Addiction as a form of disability
• Sex workers
• Assistance animals (not limited to dogs)
• Immigration or migration status as part of a person’s race, except where discrimination occurs in direct compliance with a state or Commonwealth law
• Sex characteristics (including in respect of people who identify with a certain sex)
• Irrelevant criminal record, including expunged homosexual convictions, spent convictions and the imputation of a record relating to arrest, interrogation or criminal proceedings of any sort. This would not remove an employer’s ability to discriminate based on a criminal record that is relevant to the particular position
• Physical features, including a person’s weight, size, height, birth marks, scars and bodily characteristics. Protected physical features would not include a person’s chosen alterations to their physical appearance, such as tattoos, piercings or hair styles
• Domestic or family violence
• Homelessness.

Which protected attributes are going to change?

These existing protected attributes will be modernised:

• Impairment → Disability
• Sexuality → Sexual orientation
• Family responsibilities → Family, carer or kinship responsibilities
• “Gender identity”, “Sex” and “Gender” will be redefined to be more inclusive.

Are there any changes to specific areas of work?

These changes target specific areas of work:

• religious bodies such as schools will be prohibited from discriminating against employees based on religion where the employee is not directly involved in teaching, observing or practicing a certain religion, and
• employers working with children will no longer be able to discriminate against a person based on their lawful sexual activity or gender identity.

How will the complaint and dispute resolution processes change

The complaints process is more accessible for employees.

The QHRC may reasonably assist a complainant who needs help to put their complaint in writing. For example, transcribing an oral complaint.

The QHRC has more flexibility in handling complaints. It may make preliminary inquiries into complaints and offer suitable alternative dispute resolution services instead of conciliation. The QHRC has more discretion to decline dispute resolution services for frivolous, trivial, vexatious, baseless or out of time complaints.

This time limit for a claim extends from one to two years, with a discretion to extend.

Complaints may be made on behalf of a group of people with a protected attribute. For example, unions may make discrimination complaints against an employer on behalf of a group of employees who share the same attribute.

Organisations may make complaints of unlawful conduct as if they were an individual.

What else will the QHRC be doing?

The QHRC will have these additional functions:

• Publishing practice guidelines about discrimination and sexual harassment
• Conducting reviews of an organisation’s programs and practices for compliance
• Advising on action plans; and
• Conducting investigations on its own initiative and providing findings and recommendations (for example, publishing a public report with recommendations, issuing a compliance notice or requiring employers to enter into an enforceable undertaking with the QHRC).

What should employers do to prepare?

The new Act makes it easier for employees to make claims and on more grounds. Along with the commencement from 1 April 2023 of new Work Health and Safety (Psychosocial Risks) Amendment Regulation 2022 and the Code of Practice on Managing Psychosocial Hazards at Work, employers now have more obligations than ever to ensure a workplace is free from discrimination and harassment.

The new positive duties for disability, sex discrimination and sexual harassment, the reverse onus or proof and proactive investigatory role of the QHRC mean that employers need to take proactive steps in the workplace.

For example, employers must

• Conduct workplace risk assessments to identify risk factors for discrimination and sexual harassment.
• Implement prevention plans for discrimination and sexual harassment in the workplace.
• Deliver refresher training to employees to identify discrimination and sexual harassment and what to do about it, including active bystander intervention
• Review recruitment processes to prevent irrelevant information about protected attributes being collected and used and ensuring decisions are merit-based.

The team at Kingston Reid are here to assist if you need support identifying and mitigating the risks within your workplace.

April 4, 2023

After extensive changes to the Fair Work Act 2009 (Fair Work Act) as part of the Secure Jobs, Better Pay amendments, the Federal Government has introduced the Fair Work Legislation Amendment (Protecting Worker Entitlements) Bill 2023 (Protecting Workers Entitlement Bill).

What are the key amendments?

The Protecting Workers Entitlement Bill has six key amendments:

1. Increasing protections for migrant workers by ensuring contracts of employment or services will continue to be valid irrespective of immigration status.
2. Changes to unpaid parental leave to align with the recent paid parental leave changes as well as an increase in flexibility in how unpaid parental leave can be taken and the amount of leave that can be taken flexibly.
3. Creating a National Employment Standard entitlement to superannuation.
4. Clarifying that enterprise agreements cease to apply when replaced by a workplace determination.
5. Allowing regular employee authorised deductions for varying amounts to be authorised by a single authority rather than a new one for each deduction.
6. Changes to coal mining long service leave so casuals are treated the same as permanent employees.

The House of Representatives has referred the Protecting Workers Entitlement Bill to the Senate Education and Employment Legislation Committee. The report is due 28 April 2023. We expect the Bill will pass through the Senate with little, if any, real opposition.

Increasing protections for migrant workers

The amendments address the interaction between the Fair Work Act and the Migration Act 1958 (Migration Act).

Migrant workers (including temporary migrant workers) working in Australia will be entitled to the benefit of the Fair Work Act regardless of their immigration status, including where there is a breach of the Migration Act or an instrument made under that act, such as a visa. For example, a migrant worker working in breach of their visa conditions would be entitled to benefits such as annual leave or notice of termination.

The changes will not impact whether a person has the right to work in Australia under the Migration Act, or any consequences of non-compliance with the Migration Act.

Changes to unpaid parental leave

 The use of gendered language such as “he” and “she” and “maternity leave” will be replaced with gender-neutral terms such as “the employee” and “parental leave”.

A further five key changes are in store for unpaid parental leave provisions:

• Employees who are members of “employee couples” (that is, two employees covered by the Fair Work Act even though they may be employed by different employers) will be able to take unpaid parental leave at the same time. They will not be limited to an 8-week concurrent leave period as is the current entitlement.
• Employees will be able to commence unpaid parental leave at any time in the 24 months following the birth or placement of their child.
• Employees will be able to request an extension of their unpaid parental leave regardless of the amount of leave the other parent has taken. Presently, the parental couple is limited to a total of 24 months leave between them.
• The number of flexible unpaid parental leave days will be increased from 30 to 100 to align with changes to the government’s paid parental leave scheme.
• Pregnant employees will be able to access flexible unpaid parental leave in the 6 weeks prior to the expected date of birth.

These amendments will apply where the child’s date of birth, or day of placement, is on or after 1 July 2023.

 Superannuation

The Protecting Workers Entitlement Bill introduces compulsory superannuation contributions to the National Employment Standards.

The proposed entitlement reflects the current obligation under superannuation legislation for employers to make minimum contributions to superannuation funds in order to avoid liability to pay a superannuation guarantee charge.

Inclusion of superannuation as a National Employment Standard entitlement will allow employees, unions, or the Fair Work Ombudsman to directly pursue employers for unpaid superannuation contributions. Consequential amendments will prevent multiple claims being commenced against an employer for the same superannuation shortfall (e.g., Australian Taxation Office under superannuation legislation).

The changes will ensure alignment between these National Employment Standard terms relating to superannuation and terms in Modern Awards.

Workplace determinations

 The Protecting Workers Entitlement Bill clarifies that when a workplace determination comes into operation any earlier enterprise agreement will cease to apply.

This is consistent with the Fair Work Commission’s approach to this issue however it is not currently stated in the Fair Work Act. The amendments expressly clarify the position and remove any doubt as to this sequence of operation.

Authorised deductions

The Bill expands the circumstances in which employees can authorise deductions from wages where they are principally for the benefit of employees.

If ongoing deductions are made, for example for health insurance premiums or under salary sacrificing arrangements, an employee will not need to provide a new written authority to their employer if the amount of the deduction varies.  A single authority will be agreed between the employee and employer for regular deductions.

This provides better protection for employees who potentially could lose the benefit that they receive from deductions. For example, where authorisations have not been proactively managed administratively by the employer by obtaining a new written agreement when the value of the deduction is varied, and a health premium is not paid for health insurance coverage.

A single authority cannot be used where the deduction indirectly or directly benefits the employer, even if the deduction principally benefits the employee.

Coal Mining Long Service Leave

 The Coal Mining Industry (Long Service Leave) Administration Act 1992 (Cth) and Coal Mining Industry (Long Service Leave) Payroll Levy 9 Collection Act 1992 (Cth) will be amended to ensure that casual employees are not treated less favourably than permanent employees in respect of their long service leave entitlements.

Further reforms

 It is likely there will be more amendments to the Fair Work Act this year.

The Government is consulting on further reforms including:

• the characterisation of casual work
• providing the same pay and conditions for labour hire workers as directly engaged employees
• criminalising wage theft
• extending the powers of the Fair Work Commission to include “employee-like” forms of work
• giving workers the right to challenge unfair contractual terms
• allowing the Fair Work Commission to set minimum standards to ensure the road transport industry is safe, sustainable and viable
• providing stronger protections against discrimination, adverse action and harassment
• establishing a single national framework for labour hire regulation
• addressing the impact of the small business redundancy exemption in winding up scenarios to support equitable outcomes for claimants under the Fair Entitlements Guarantee
• further reforms to enterprise bargaining provisions; and
• limiting when demerger ballot applications can be made for registered organisation.

Consultation on these further changes closes in April, and we expect to see further amendments proposed around the middle of this year.

Kingston Reid will keep you updated as these changes unfold.

March 30, 2023

On 28 March 2023, the Full Federal Court of Australia decided employers who require employees to work public holidays breached section 114 of the Fair Work Act 2009 (Cth): Construction, Forestry, Maritime, Mining and Energy Union v OS MCAP Pty Ltd

The handing down of this decision just before the Easter and Anzac Day public holidays will ring alarm bells for employers who traditionally roster on public holidays.

Why can’t we just make them work?

Section 114 of the Fair Work Act 2009 (Cth) is a National Employment Standard which entitles employees to not work and be paid for the public holiday.

There is flexibility. However, it requires negotiation and discussion. Employers must first reasonably request the employee to work. The employee may then reasonably refuse the request.

If the employer makes an unreasonable request (ie, a requirement) and the employee works the public holiday, the employer will breach section 114.

Where did they go wrong?

In this case, the employer required its employees to work on Christmas Day and Boxing Day by:

• automatically rostering employees to work public holidays;
• having employment contracts which stated employees “may be required to work on public holidays”;
• providing employees with rosters on a laminated card when they started employment identifying all shifts (including public holidays) they would be required to work; and
• requiring new starters to attend an induction session before starting work during which they were told “employees are rostered to work 24/7 365 days a year. This includes all public Holidays including Christmas and New Years [sic]…”

The employees complied with the requirement to work on public holidays.

What is the difference between a requirement and a request?

The Court analysed the fundamental differences between a “requirement” and a “request.”

It looked at the ordinary meaning of those word and observed “[t]o “request” means “to ask or beg”, “especially politely or formally”. To “require” is to demand or make obligatory”. A “request” is to have a choice as opposed to having an obligation to work.

In this case, the employer required employees to work on Christmas and Boxing Day. This was not a reasonable request under s 114(2).

Importantly, the Court said employees were entitled to ignore the requirement. The employees could have simply not worked and the employer would have had to pay them.

The breach occurred for the employer when the employees complied with the unlawful requirement.

We await the outcome on penalty. The maximum penalty is 60 or 600 penalty units depending on the seriousness of the contravention. This may be significant.

When is a request to work a public holiday reasonable?

Sub-section 114(4) identifies these criteria as being relevant to the reasonableness of either the request or refusal:

• the nature of the employer‘s workplace or enterprise (including its operational requirements), and the nature of the work performed by the employee;
• the employee‘s personal circumstances, including family responsibilities;
• whether the employee could reasonably expect that the employer might request work on the public holiday;
• whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, work on the public holiday;
• the type of employment of the employee (for example, whether full‑time, part‑time, casual or shift-work);
• the amount of notice in advance of the public holiday given by the employer when making the request;
• in relation to the refusal of a request–the amount of notice in advance of the public holiday given by the employee when refusing the request;

Other circumstances may also be relevant.

For example, it may be reasonable to request employees in critical services such as police, ambulances, fire services and hospitals to request employees to work public holidays. A refusal may be difficult to justify if employees were given enough notice and have no reasonable excuse.

What do employers need to do?

This Decision has significant implications for employers, especially those which are not providing critical services.

For example, when rostering for public holidays:

• issue the roster in draft; and
• give the employees the opportunity of refusing or accepting the request to work a public holiday before it is finalised – this could be supplemented by a separate communication.

Also – make sure that employees are given enough notice.

If employees refuse then speak with them to understand why.

If the refusal is reasonable employees can choose not to work the public holiday irrespective of what the roster says.

Employment contracts may still foreshadow working on public holidays but cannot make that a requirement. Employers should check the wording of their contracts.

March 22, 2023

Employers often direct employees with insufficient accrued annual leave to instead take unpaid leave during temporary shutdown periods, such as over the Christmas holiday period.

However, from 1 May 2023 this option will not be available for many award-covered employers.

Where did this come from?

On 22 December 2022, as part of its plain language four yearly review, the Fair Work Commission (Commission) determined to include a new annual shut down model provision in 77 modern awards. These awards include:

• Hospitality Industry (General) Award 2020;
• Building and Construction General On-site Award 2020;
• Clerks—Private Sector Award 2020;
• Higher Education Industry—General Staff—Award 2020; and
• Manufacturing and Associated Industries and Occupations Award 2020.

The list of affected modern awards can be found at Attachment A of the Commission’s 25 August 2022 decision here.

Importantly, the Full Bench considered varying the black coal award, however, decided to not make any changes, which means that employees covered by the Black Coal Mining Industry Award 2020 retain the right to take annual leave without pay even if they have accrued annual leave.

Employees can say no to unpaid leave!

The new provisions entitle employees with insufficient accrued annual leave to refuse to take unpaid leave over Christmas shutdown periods.

Instead, those employees may be entitled to continue to work during shutdown or, if there are no suitable duties, be paid additional annual leave while not working.

Employers must comply with notice periods

Employers must satisfy new notice requirements.

Written notice of a temporary shutdown period must be given to employees 28 days before it starts. Some awards may have a longer notice period. Employers and the majority of employees can agree to a lesser notice period.

If an employee starts work after the notice is provided, then the relevant employee must be given notice of the temporary shutdown period as soon as reasonably practicable after starting.  For example, notice could be given in a contract of employment.

What does your organisation need to do

Employers may consider these steps:

• plan tentative dates for proposed shutdowns for the 2023/24 Christmas period so you know exactly how much annual leave must be accrued (don’t forget to factor in gazetted public holidays and pro-rata requirements for part-time employees);
• add a rule to HR/ leave systems so annual leave requests cannot be approved if an employee will not have enough annual leave for the temporary shutdown period or has not agreed to otherwise take unpaid leave, rostered days off, time off in lieu or annual leave in advance of accrual;
• update leave policies and contractual documents to reflect these changes.

It is likely an employer may lawfully refuse an annual leave request of an employee if the primary purpose of that refusal is to ensure the employee has enough accrued annual leave to facilitate the direction to take annual leave during a temporary shutdown period.

In limited circumstances, an employer may be able to rely on the stand down provisions in s 524 of the Fair Work Act 2009 (Cth). For example, if a head contractor closes down a site for a period that may give rise to a stoppage of work for which a subcontractor employer cannot reasonably be held responsible and thus enable a stand down under s 524.

As always, Kingston Reid is well placed to ensure that your organisation is ready for this change. Please reach out and we would be delighted to assist you.

January 25, 2023

On the 23 January 2023, a Full Bench of the Fair Work Commission (Commission) issued a Draft Determination to vary the Professional Employees Award 2020 (Award) which will affect employees who work in the engineering, IT, medical research, auditing and science sectors.

What are the key changes?

The Draft Determination sets out details of how the Commission plans to address two issues.

1. The hours of employment and overtime for employees covered by the Award; and
2. Clarifying the coverage of the Award.

Hours of employment and overtime

Currently the Award only includes general statements regarding hours of employment and overtime. It requires employers to compensate employees for work outside of their “ordinary hours”, however it is currently silent about how this compensation will be calculated.

The Commission is proposing to vary the Award to include:

• a specific provision that all hours worked in excess of 38 hours per week for a full-time employee must be paid at the applicable minimal hourly rate (including call backs and work performed on electronic devices or otherwise remotely)
• a 25% loading on hours worked, Monday to Saturday that are before 6:00am or after 10:00pm
• a 50% loading on hours worked on Sunday or a public holiday
• the requirement for employers to keep records of all hours worked by an employee:
  • in excess of 38 hours per week
  • before 6:00am or after 10pm from Monday – Saturday; and
  • on a Sunday or Public Holiday.
• specific provisions that need to be followed by an employer and employee if an employee wishes to utilise time off in lieu (TOIL), rather than being paid for a particular period of over time.

Importantly, the Draft Determination also includes a provision to exclude the requirement for overtime, TOIL, penalty rates and record keeping where an employee is entitled to an annual salary which exceeds their applicable minimum annual wage (under the Award) by at least 25%. This is an interesting development given the push for “exemption rates” by employers in other modern awards.

Clarifying coverage

There has been much litigation concerning the extent to which the Award covers employees. This has had a particular focus on determining if an employee is eligible to lodge an unfair dismissal claim. The Commission is proposing to amend the Award to clarify the coverage of the Award. In the Draft Determination the Commission proposes to add the following provision:

An employee performing professional engineering duties, professional scientific duties, professional information technology duties or quality auditing must be classified in one of the following classifications provided that the employee is not employed in a wholly or principally managerial position.

This makes it clear that an employee who is wholly or principally employed in a managerial position is not covered by the Award. This proposed amendment is a point of clarification which restates the law as it has been applied by the Commission and is unlikely to have a significant impact on employers. Whether a position is wholly or principally managerial will ultimately turn on the quality of evidence presented by employers.

What does this mean?

The proposed variations to the Award haven’t been enacted yet. The Commission has invited parties to make submissions on the Draft Determination by 4:00pm Friday 10 February 2023. As such, the exact date these changes come into effect will be known after this date.

Before the introduction of the changes to the Award, employers should:

• take the opportunity to re-evaluate whether employees who work in an engineering, scientist, IT or medical research capacity are correctly classified under the Award;
• review working arrangements to determine what impact the changes could have on payment and record keeping obligations;
• consider whether the annual salaries of relevant employees could exempt the new provisions; and
• put in place a strategy to make the necessary operational and contractual adjustments before the new provisions have an impact.

As always, the team at Kingston Reid will continue to keep you informed on the progression of these changes. We are well placed to support organisations in reviewing current practices and developing strategies for managing the change.