What your small business should know before workplace rules change on June 6

Major changes to Australia’s industrial relations landscape are less than a week away from taking effect, as a result of last year’s seismic Secure Jobs, Better Pay bill.

From June 6, Australian workplaces will face new multi-employer bargaining rules, provisions around flexible working, and tweaks to pay secrecy clauses.

Here’s a list of what employers need to know.

Expansion of multi-employer bargaining

June 6 marks the kick-off to one of the most significant industrial relations reforms in years: the expansion of bargaining pathways for workforces across multiple businesses.

Cooperative workplaces bargaining

The newly-named cooperative workplaces bargaining stream will make it easier for multiple workplaces to band together under a singular agreement.

The new cooperative workplace bargaining stream will allow additional workplaces and their employees to join an existing agreement.

The new employer and its employees must agree to be covered by the cooperative bargaining agreement, with workplaces holding a vote to gauge the sentiment of affected employees.

“A majority must genuinely agree to the variation” for the new workplace to join the agreement, the FWC says.

Some exceptions apply.

Workplaces seeking entry to a cooperative bargaining agreement must not be covered by a supported bargaining authorisation (supported bargaining being the new name for the prior low-paid bargaining stream) nor a single interest authorisation (see the next section for more on single interest bargaining).

Cooperative workplace agreements will not apply to greenfields agreements in the building and construction sectors, and cannot be altered to cover employees in those industries, either.

“Protected industrial action is not available under this stream,” the FWC adds.

“Dispute resolution options, such as conciliation and arbitration, can occur with the consent of all parties.”

Single interest bargaining

Single interest bargaining allows two or more workplaces with common attributes ― be they franchises under a corporate banner, or businesses with similar focuses, location, or regulatory oversight ―to bargain with their workforces on a collective basis.

Previously, employers (who were not franchisees) and employee representatives had to gain Ministerial authorisation before obtaining a single interest authorisation.

The FWC will be empowered to make those decisions from June 6.

When employee bargaining representatives seek a bargaining authorisation covering a workplace with 50 employees or more, it will be up to the business itself to prove their operations are not reasonably similar to the other workplaces targeted by the authorisation.

But to stop small businesses from being pulled into single interest bargaining agreements against their will, employers with fewer than 20 employees will be exempt from this stream ― unless they proactively choose to be included in the process.

The FWC can also push back against single interest authorisation requests if it finds the business is already bargaining in good faith with its employees, it has a solid track record of honest bargaining, and no more than nine months have passed since its prior enterprise agreement expired.

Protected industrial action will be allowed under this stream, but with some guardrails: employee representatives must take part in mandatory conciliation and offer 120 hours’ notice.

The civil construction sector is not covered by this form of bargaining.

Changes to the Better Off Overall Test (BOOT)

The Better Off Overall Test, which establishes if workers will face better conditions on a new enterprise agreement compared to an underlying modern award, will change for enterprise agreements made on or after June 6.

Headline changes include the ability for the FWC to amend an agreement after it is lodged, if it believes it no longer passes the BOOT.

The FWC will be empowered to reconsider agreements which have already been approved, if the Commission argues the relevant circumstances have changed or were not fully considered in the first place.

The changes are designed to give the FWC the power to intervene if the terms of an enterprise agreements are no longer relevant for employees, without dragging those employees to another vote on the matter.

The changes require the FWC to undertake the BOOT as a global assessment, meaning the FWC should not judge if each and every term in a proposed enterprise agreement is ‘better’ for an employee than the underlying modern award.

Under the Secure Jobs, Better Pay changes, legislation will ensure the FWC judges if any “reasonably foreseeable” employee will be better off overall, making it harder for off-the-wall hypotheticals to endanger a potential agreement.

Flexible working arrangements

Many employees already have the right to ask for flexible working conditions, but new amendments to the Fair Work Act will expand and strengthen access to those variations for long-term workers.

From June 6, employees who are pregnant can ask their employees for flexible working conditions.

So too can employees, or members of their immediate family or household, who are experiencing family or domestic violence.

There will be no change to the underlying principle that employers can refuse the request on reasonable business grounds, but employers will need to take extra steps when turning down a request.

As per the FWC, they must:

• discuss the request with their employee
• genuinely try to find alternative working arrangements, and consider the consequences of refusing
• offer a written response explaining why they refused the request, other tweaks to work around the employee’s circumstances, and information about bringing the dispute to the FWC.

On that note, the FWC will have the power to hear disputes over flexible working requests, and will be free to launch court proceedings for alleged breaches of the legislation.

There is something of a carve-out for small business, though.

“In recognition that small businesses may not have the same capacity as larger employers to accommodate these requests, the legislation clarifies that the specific circumstances of the employer, including the size and nature of the employer’s business, are relevant when considering whether the employer has reasonable business grounds for refusing a request,” the FWC says.

‘Zombie’ agreements

In an attempt to modernise working conditions for thousands of workers, ‘zombie’ agreements ― ageing workplace agreements entered into before 2010 ― will automatically expire on December 7 this year.

Employers have until June 6 to issue a written warning to employees covered by ‘zombie’ agreements about the changes.

Pay secrecy rules

The Secure Jobs, Better Pay Act cracks down on pay secrecy clauses barring employees from discussing their wages with others.

Pay secrecy terms written into new contracts since December 7, 2022 cannot be enforced; pay secrecy terms can’t be included in any new written agreements like awards of fair work instruments, either.

From June 7, pay secrecy terms can’t be included in contracts at all.

Employers who do pen those clauses into their contracts could face penalties.

There are some grandfathering provisions, however.

Pay secrecy clauses included in contracts entered into before December 7, 2022, will remain active until such point as the contract is varied.