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Wages, gender pay gap, and flexible work

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Last week, the Federal Government introduced a bill to Parliament to change workplace laws.
Workplace laws

Last week, the Federal Government introduced a bill to Parliament to change workplace laws.

It aims to reduce the gender pay gap, curb sexual harassment, limit insecure work, and to encourage more flexible work arrangements.

It would also change the rules for pay negotiations. Unions say this will boost wages, while business groups say it “risks tipping the economy over the edge”.

Here’s what you need to know.

Background

The bill makes changes to the Fair Work Act – the law that sets up Australia’s workplace tribunal, the Fair Work Commission (FWC).

The FWC sets minimum and award wages. It also oversees negotiations between employers and employees (or their unions) over pay and conditions.

The bill includes changes to what the FWC does, the principles that guide its decisions, and the rules that shape negotiations.

Gender pay

The FWC is required to consider a range of objectives when making decisions. This bill would add “the need to achieve gender equity” to the list.

It would direct the FWC to address gender pay gaps, including historical “gender-based undervaluation” of work in female-dominated sectors. For example, the FWC could approve a pay rise in aged care or child care if it determined these sectors had been historically undervalued due to sexism.

The Bill also prevents ‘pay secrecy’ clauses in employment contracts.

Insecure work

The Bill would add “job security” as an objective for the FWC to consider.

It would also ban the use of fixed-term contracts of more than two years (with some exceptions). The bill notes fixed contracts “have a legitimate purpose… [but] exacerbate job insecurity for employees when they are used for the same role over an extended period… [and] for jobs that would otherwise be ongoing”.

The bill also strengthens employee rights to recover unpaid wages.

Sexual harassment

The Bill strengthens employee rights to seek protection and compensation for sexual harassment. This includes sexual harassment by ‘third parties’ such as customers or clients.

In a separate bill, the Government is making changes to impose a ‘positive duty’ on employers to stamp out sexual harassment.

This could result in employers “who fail to take all reasonable steps to prevent workplace sexual harassment” facing penalties.

Discrimination

The Bill introduces three new categories to the anti-discrimination framework, which stops employers from firing or otherwise discriminating against employees because they have certain attributes.

The three new categories are breastfeeding, gender identity, and intersex status.

Flexible work

The bill adds new requirements for employers when employees request flexible working arrangements (e.g. varied hours or work from home). Employers would need to provide specific reasons for refusing the request and demonstrate that they “genuinely tried” to accommodate.

The bill also adds family violence as an allowable reason to make a flexible work request, including family violence experienced by an immediate family member. Parenting and carer responsibilities, disabilities, and old age are already included.

Wage bargaining

The bill aims to increase the use of “enterprise bargaining” – pay negotiations between an employer and their employees, who may be represented collectively by unions.

Despite evidence bargaining leads to higher wages, it is uncommon in sectors with small employers or with low unionisation, like childcare. One reason is barriers to bargaining with multiple employers at once. The bill reduces some of these barriers. Unions say it will help to grow wages, but business groups say it gives unions too much power and could lead to more strikes. The Government denies this.

Will the bill pass?

The Government wants to vote on the bill by the end of the year. Crossbenchers have asked for more time to consider the bill, or to split it up into smaller parts to be voted on individually.

However, Federal Employment and Workplace Relations Minister Tony Burke has resisted delays, saying “Australians have already been waiting 10 years for wages to get moving”.

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