Industrial relations laws: what’s changed?

Industrial relations laws: what’s changed?

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a baker stands behind a bakery counter sliding a loaf of bread into a brown paper bag (industrial relations)

2023 brought with it a slew of changes to national industrial relations laws, many of which affect the owners of small businesses around the country. The end of the 2022–23 financial year brought about even more changes. Baking Business sat down with leading barrister in the area of industrial relations (IR) law, Anton Duc, to see what these changes mean in practice.


The major recent changes

The Labor Government and the Minister, Tony Burke, have hit the ground running with two tranches of IR reforms, and a third on the way.

The first tranche of legislation in the Secure Jobs, Better Pay Act made changes to the enterprise bargaining system to allow for multi-employer bargaining and terminate older zombie agreements (from December 2023), to close the gender pay gap, prohibit pay secrecy, and introduce a new law to prohibit sexual harassment in the workplace—to give employers a positive obligation to stop sexual harassment in the workplace.

Additionally, the new laws prohibit job advertisements offering rates of pay inconsistent with the relevant award or agreement. And to top it off, small claims in courts rose from $20,000 to $100,000, meaning very large claims can be run in court without lawyers being able to represent employers.

The second tranche of laws is about improving flexibility in unpaid parental leave (including allowing employee couples to take leave at the same time), inserting rights to superannuation within the National Employment Standards, changing provisions regarding deductions from wages, and allowing migrant workers the same rights as citizens to workplace entitlements.

Lastly, of course, there was the large pay increase commencing on 1 July 2023.

How these changes affect the baking industry

For the baking industry, which is mainly small employers, the changes are going to have a very big impact. As I said, the government has come out of the blocks to make changes that favour employees. The main changes are that many employers have ‘zombie agreements’ that employers need to be prepared to terminate the agreement on 7 December 2023, with the changes to shift rates, penalties, and hours of work.

Secondly, the baking industry should ensure they take steps towards meeting the positive duty standard for sexual harassment in the workplace, because it is still a huge issue that woman suffer socially, and very large penalties will apply if an incident occurs, Employers cannot say, ‘We did what we could’.  Courts will say, ‘Well, did you? Let’s examine that.’

Finally, the larger business players may find themselves being roped into multi-employer enterprise bargaining as the union movement seeks to have similar employers paying similar conditions in large enterprise agreement negotiations.

Things to keep in mind going into the new financial year

Obviously the first one is the increase to superannuation from 10.5 per cent to 11 per cent. Second, the changes to parental leave to make paid leave 20 weeks and allow couples to access that leave, whereas previously partners have taken the leave separately.

On 1 August 2023, the law introduced 10 days of paid leave per year for all employees including casuals, accruing differently from annual and sick leave, with strict confidentiality requirements. This will apply to businesses with fewer than 15 employees, with these changes starting earlier this year for larger employers.

Harassment in the workplace

From 6 March 2023 this year, a person or company can be liable for sexual harassment conducted by an employee or agent in connection with work. The onus is on the employer to prove that they took all reasonable steps to prevent the sexual harassment, so there is a positive obligation to stop sexual harassment occurring. That means looking at your policies, procedures, and training to make sure that it is up to date. It means being proactive, which is a big change. Sometimes, employers can be a bit reactive when dealing with this topic.

New powers have also been conferred on the Australian Human Rights Commission to investigate and enforce compliance with the positive duty, and the Commission’s compliance powers will commence in December 2023. Employers will be getting knocks on their doors from early next year from this agency.

Employee superannuation

From 1 July 2023, the super guarantee rate will increase from 10.5 per cent to 11 per cent.

In addition, superannuation has not been, strangely, part of the National Employment Standards, i.e., the minimum conditions that apply to all employees. That will change, so superannuation becomes part of the NES minimum standards. The government has therefore made any non-payment of superannuation a breach of the Fair Work Act and thus allows the courts to deal with this in legal claims (rather than needing to be chased by the Tax Office).

Termination of casual employees

Two things that come to mind are employees making claims they have been terminated for making complaints, which is unlawful and contrary to the adverse actions provisions of the Fair Work Act. That opens up penalties in the tens of thousands of dollars ordered by courts. So, if an employer complains about their rate of pay, and they have their hours cut or are terminated because they made the complaint of inquiry, then that is unlawful.

The other trend is I’ve seen is, strangely, it’s been more difficult to counsel and discipline staff. There has been a reluctance to speak to staff about issues, because employers are worried that staff will leave if they are pushed too hard. So, it has given rise to employers putting up with behaviour they would otherwise deal with—lateness, taking breaks, back chat, etc.

The new family and domestic leave provisions

The scourge of family violence is gaining in importance in the workplace—if you experience family violence, it affects your attendance and attention at work. All employees in the Fair Work system (including part-time and casual employees) will be entitled to 10 days of paid family and domestic violence leave in a 12-month period. It used to be five days, so there is recognition that the five days was not enough to deal with issues of accommodation, police involvement, family law, childcare, etc.

It’s a standalone minimum leave entitlement, like annual leave or paid sick and carer’s leave. Employees are entitled to the full 10 days upfront, meaning they won’t have to accumulate it over time; however, it doesn’t accumulate from year to year if it isn’t used. That started for larger business on 1 February 2023 and small business on 1 August 2023.

Payment/underpayment of workers

The most obvious example of this is the Fair Work Ombudsman’s recent action against the franchisor of the Bakers Delight chain, alleging it is legally liable for extensive underpayments at three Hobart stores formerly operated by one of its franchisees, alleging Bakers Delight Holdings is liable for $642,162 in underpayments.

So, when paying workers, my top tips are that small businesses should ensure they stay on top of correct rates. There are a lot of resources out there to make sure you get it right. The Awards are changing all the time, so check the relevant award online and keep up to date. I know it’s hard in a busy bakery, but it will also give you comfort that you are on top of things. Get professional help from a bookkeeper or accountant—make your life easier and you will sleep better.

Last reminders

Small businesses tends to fall behind on these and a reminder might not hurt to make sure all staff are recording their start and finish times and break times, that payslips are correctly completed, and rosters are put up and kept.

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