Session 1 - Pay secrecy and fixed term contracts

Maddocks Employment & Workplace Spotlight series training program resource.

View the recording of this session on Zoom.

The Fair Work Amendment (Secure Jobs, Better Pay) Act 2022 has introduced some of the most significant changes to the Fair Work Act 2009 (Cth), since its commencement on 1 January 2010.

Two of those changes were discussed in the first of our Spotlight Series presentation considering pay secrecy and fixed term contracts.

When it comes to pay secrecy, employers need to know that:
  • Employees can now disclose (or not disclose) and ask other employees about their remuneration and any terms and conditions of their employment that are reasonably necessary to determine remuneration outcomes.
  • ‘Remuneration’ in this context extends beyond base salary.
  • Employers will, from 7 June 2023, be precluded from including pay secretary provisions in employment contracts or agreements, and where such clauses are included, employers risk the imposition of civil penalties.
  • Employers should look beyond mere compliance, and consider questions of performance and reward generally, and how the metrics of remuneration are measured and communicated to employees.
When it comes to fixed and maximum terms contracts, employers need to know that:
  • The use of fixed and maximum term contracts (and particularly rolling contracts of this type) will be significantly curtailed from 6 December 2023 (or an earlier date if set by proclamation).
  • From 6 December 2023, such contracts will be limited (for the same role) to a maximum duration of two years, or two consecutive contracts (whether or not the total period of the engagement is two years or less).
  • There are a number of prescribed exceptions to the new provisions, with more fulsome details to follow through regulations which have not yet been introduced.
  • The Act will also include anti-avoidance provisions, which will impose civil penalties in circumstances where employers seek to by-pass the changes to fixed and maximum term arrangements.
  • The Fair Work Ombudsman will prepare and publish a Fixed Term Contract Information Statement, and employers will need to provide a copy of this Statement to in-scope employees. A failure to do so will also attract civil penalties.
  • In light of the restriction on engaging employees on fixed and maximum term contracts, employers should take stock of their resource needs, and determine what arrangements may be best to meet those needs.
  • The provisions may not be applicable to state government employees, but advice should be sought on this issue before reaching a conclusion.

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