Australia’s industrial relations landscape has undergone a significant transformation, starting with the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth). As the first comprehensive review of these reforms progresses, the question remains: are these changes achieving their intended outcomes?
Key findings from the Secure Jobs, Better Pay Review
On 3 February 2025, the independent Review, led by Professors Mark Bray and Alison Preston, released an interim report featuring 19 draft recommendations. While employee representatives have largely welcomed the reforms, viewing them as a rebalancing of workplace power, the business community has voiced concerns over their operational impacts and long-term economic implications.
The Review Panel identified four key “aspirations” of the Government’s Secure Jobs, Better Pay reforms, focusing on whether these changes are meeting their objectives.
Advancing wages
The reforms, particularly those related to multi-employer bargaining and the better off overall test (BOOT), aim to expand the reach and scope of collective bargaining, thereby increasing wages and improving workers’ financial circumstances.
The Review Panel acknowledges that insufficient time has passed since the amendments came into effect to assess their long-term impact. However, early signs indicate a significant increase in the coverage of collective bargaining. Between September 2022 and September 2024, the number of employees covered by a collective agreement rose by 27%, aligning with the intended outcomes of the amendments.
Multi-employer bargaining provisions are designed to enhance union representation, requiring unions to be involved in proceedings and allowing them to initiate bargaining in certain circumstances, even without proving majority support. Although there have been modest improvements in union coverage, the Review notes that small wage increases prompted by the reforms have not fully offset historical wage stagnation, with a significant gap remaining between real wages and labour productivity.
Employer groups have been critical of the reforms, particularly those that empower unions to secure wage increases. They argue these provisions could lead to more industrial action and increased costs, while unions contend they are crucial for breaking wage stagnation.
Integrating institutions
One of the most significant changes was the abolition of the Australian Building and Construction Commission (ABCC) and the Registered Organisations Commission (ROC), with their functions transferred to the Fair Work Ombudsman (FWO) and Fair Work Commission (FWC). The Review notes that the FWO has taken a more conciliatory approach, resulting in higher wage recoveries in the construction sector. However, employer groups argue that this has weakened enforcement against union misconduct. The Review supports this concern, pointing out that the FWO’s enforcement powers are now less robust than those of the ABCC, particularly with regard to contraventions such as unlawful picketing.
Closing the gender pay gap and improving gender equality
The introduction of paid family and domestic violence leave, pay transparency laws, and adjustments to Equal Remuneration Orders are cited as significant steps toward closing the gender pay gap. The Review Panel suggests these measures are working as intended, although their long-term impact remains to be seen. For instance, the FWC’s ability to issue Equal Remuneration Orders is still largely untested, with only one case heard since the new laws took effect.
The Review also highlights significant wage increases in female-dominated sectors, such as aged care, as a result of the Secure Jobs, Better Pay reforms. However, stakeholders have expressed concerns over the financial burden of work value cases, often funded by union members, many of whom are low-paid. Employers also worry about absorbing wage increases without additional government funding.
Job security
The new restrictions on fixed-term contracts aim to improve job security, but they have created challenges for employers in project-based industries. The Review recommends revisiting these restrictions to provide greater flexibility, offering hope to employers grappling with the current regime.
Draft recommendations: the path forward
The Review presents several draft recommendations to ensure the reforms continue to achieve their goals;
- Conduct a further review in 2-3 years to assess long-term impacts, particularly on bargaining, job security, and gender equity (Recommendation 1)
- Strengthen employer guidance to assist in understanding obligations when receiving a written request to bargain, including providing a template written request (Recommendation 5)
- Amend the mandatory conciliation conference under s 448A of the Fair Work Act 2009 (Cth) (FW Act) to allow discretion if the parties agree (Recommendation 6)
- Monitor the impact of gender pay equity measures to ensure sustained progress (Various Recommendations)
- The Australian Government should consider whether it is appropriate to extend the protected attributes in the FW Act to cover menopause, as well as other reproductive health issues (Recommendation 15).
- Refine fixed-term contract restrictions to balance flexibility with job security (Recommendation 16)
- Improve enforcement mechanisms by engaging digital job platforms and enhancing FWO resources (Recommendations 18 and 19)
Conclusion: a work in progress
Interested parties now have until 16 February 2025 to respond to the draft report, with a final report expected by the end of March. While the draft report provides some insight into the current industrial relations environment, its findings are limited by the fact that not enough time has passed to fully evaluate the reforms’ effects. That is reflected in the modest nature of the draft recommendations.
The implementation of the Review’s final recommendations will depend on the outcome of the upcoming federal election, to be held by May 2025. Regardless of the outcome, employers should prepare for further reviews before any substantial changes are made to the system.
To keep up with the latest developments across employment, workplace relations and workplace health and safety law, sign up to our e-newsletter, Kingston Reidable by emailing [email protected].
The views expressed in this article are general in nature only and do not constitute legal advice.
Please do not hesitate to contact us if you require specific advice tailored to the needs of your organisation in relation to the implications of these changes for your organisation.