Employment law update – changes you may have missed

April 14, 2023 Jessie Lapthorne

Nothing ever stays the same, especially in the world of employment law. That is particularly true now, with a host of significant changes that have recently come into effect or are imminent.

 

Fair Pay Agreements Act 2022

 

The recent passing of the Fair Pay Agreements Act 2022 (FPA Act) represents the biggest change to employment law in more than 20 years.

 

The FPA Act sets a framework for negotiating fair pay agreements. These agreements will apply to all workers across entire industries or occupations and will provide minimum terms and conditions of employment for a whole industry, regardless of the employer. Unions will be able to initiate bargaining for a fair pay agreement if they represent at least 1,000 employees or 10% of the employees in the proposed industry. Alternatively, the union could meet a public interest test based on specified criteria such as low pay, little bargaining power or lack of pay progression. Although the criteria are principally aimed at lower-wage sectors, they could apply to any industry. The first groups beginning the process are bus and coach drivers, workers in supermarkets and grocery stores, plus those in the hospitality sector.

 

For negotiation, employees will be represented by a union and the employers will be represented by an organisation; they will not be choosing one employer in an industry to negotiate on behalf of all employers in that industry. Once a fair pay agreement has been finalised, it will apply to all employers within its coverage, regardless of whether they participated in the bargaining process. Likewise, all employees within coverage will receive the new minimum employment terms, even if they are not union members. The fair pay agreement will need to be ratified by both employees and employers, but that doesn’t mean 100% approval. So some people may have an FPA imposed on them, whether they agreed to it or not.

 

Employees and employers will still be able to negotiate their own agreements outside of the fair pay agreement, but only if the terms do not fall below those set out in the fair pay agreement.

 

It is unclear how long the FPA Act will be around for. It came in to force in December 2022, but the National party has already said it will repeal it if they win this year’s election; the ACT party was also opposed to it.

 

Employment Relations (Extended Time for Personal Grievance for Sexual Harassment) Amendment Bill

 

An upcoming change to this bill will extend the time to raise a personal grievance based on sexual harassment to 12 months.

 

Previously, personal grievances had to be raised within 90 days of the incident; however, studies have shown, in the context of sexual harassment, 90 days may not be long enough, as it can take people some time to feel safe to raise it with others.

 

Although the bill is still in the final stages of the parliamentary process, it has been supported by all parties and is likely to be passed in the next few months, after which it will come into effect immediately.

 

Employment Relations (Restraint of Trade) Amendment Bill

 

Another potential change on the horizon is the Employment Relations (Restraint of Trade) Amendment Bill. This bill has been introduced to parliament but is not yet being actively considered. However, if passed, it could have significant effects for businesses seeking to restrict an employee’s activities post-employment.

 

This bill will prohibit the use of restraints of trade in employment agreements for lower- and middle-income employees by rendering restraints of trade non-applicable wherever an employee earns less than three times the minimum wage. This will prevent situations such as a barista being unable to move to a nearby coffee shop because of a restraint provision. The bill will also limit the duration of such restraints to no more than six months.

 

For employers continuing to use restraints of trade, the bill will require them to pay affected employees an amount equal to half the employee’s weekly earnings for each week the restraint of trade remains in effect.

 

Minimum wage increase

 

On 1 April 2023, the adult minimum wage will increase to $22.70 per hour, an increase of $1.50. Businesses which are living-wage-accredited should keep an eye out for that change as well.

 

Jessie Lapthorne is a partner in Duncan Cotterill’s employment team. If you have any questions about any of these changes, or would like any additional information, Jessie can be contacted on jessie.lapthorne@duncancotterill.com.