Global Employment Updates 2023: Australia

Employment Laws of Australia 2023

An Overview

1. MINIMUM WAGE

The National Minimum Wage applies to employees not covered by an award or registered agreement. Employees covered by an award or registered agreement are entitled to the minimum pay rates, including penalty rates and allowances in their award or agreement. As of 1 July 2022, the National Minimum Wage is $21.38 per hour or $812.60 per week. Each year, the Fair Work Commission reviews both the National Minimum Wage and minimum pay rates under awards (Annual wage review). The minimum wage under awards is scheduled to increase on or after 1st July 2023.

2. SEXUAL HARASSMENT

Most significantly for employers, the reforms to the Sex Discrimination Act (1984) have introduced a positive duty on employers to take reasonable and proportionate measures to eliminate unlawful sex discrimination and sexual harassment as far as possible.  The changes also created a new offence which makes it unlawful to subject a person to a hostile workplace environment. These changes have effect from 13 December 2022.

3. ANTI-DISCRIMINATION PROTECTIONS

On 7 December 2022, the discrimination provisions contained in the Fair Work Act were amended to include three new grounds of protection against discrimination including breastfeeding, gender identity and intersex status. Modern awards and enterprise agreements also cannot discriminate based on these attributes. These attributes were already included in the Sex Discrimination legislation, but this change allows for easier access to complaints processes via the Fair Work Commission.

4. PAY SECRECY

Many standard form employment contracts have confidentiality clauses that prohibit employees from exposing their pay to anybody other than family members and personal advisers. Pay secrecy clauses are no longer permitted in Australia. The Fair Work Law Amendment (Secure Jobs, Better Pay) Act 2022 grants employees the ‘workplace right’ to ask other employees about their pay or disclose their salary to other staff members. Job ads with pay rates lower than the legal minimum entitlements that apply to the job are prohibited.

Any employment contract entered into or amended on or after December 7, 2022, shall acquire such rights on entering into that contract. However, the new legislation has created three degrees of beginning for some employment contracts:

• Contracts entered into before December 7, 2022, remain valid but are no longer enforceable if the contract is amended.
• The clause is not enforceable and has no effect in employment contracts taken into on or after December 7, 2022.
• Pay-secrecy clauses will be prohibited in employment contracts entered into on or after June 7, 2023. Employers who violate this prohibition will be subject to penalties.

5. FLEXIBLE WORK

The Fair Work Act contains a right for certain employees to request flexible working arrangements, and employers are obliged to consider those requests, but may refuse requests on reasonable business grounds. An employee can request a flexible working arrangement under the Fair Work Act when they have had 12 months of service and they:

• are the parent or have responsibility for the care of a child who is school-aged or younger.
• are a carer within the meaning of the Carer Recognition Act 2010.
• have a disability.
• are 55 or older.
• are experiencing family or domestic violence; or
• provide care or support to a member of their household or immediate family who requires care and support because of family or domestic violence.

From June 2023, the scope of who can make flexible work requests has been extended to include pregnant employees and those at risk of family and domestic violence.

6. FIXED TERM CONTRACTS

The Fair Work Act will now limit the use of fixed-term and maximum-term contracts to 2-year terms, and no more than one renewal. These changes will take effect from 6 December 2023, unless brought forward by the workplace Relations minister. There are exemptions to the new restrictions, including:

• where the work is for a distinct and identifiable task involving specialised skills.
• Where the employee is a trainee engaged under a training arrangement with an RTO.
• Where the employee is engaged to undertake essential work during a peak demand period.
• Where the employee is engaged to undertake work during emergency circumstances or a temporary absence of another employee.
• where the employee earns above the high-income threshold during the year the contract is entered into.
• the contract is for a position funded in whole or in part by government funding, the funding is payable for more than two years, and there are no reasonable prospects that the funding will be renewed.

7. PAID FAMILY AND DOMESTIC VIOLENCE LEAVE

The National Employment Standards under the Fair Work Act have been amended to include an additional 10 days paid leave for permanent and casual workers who are involved with family or domestic violence. Full-time, part-time, and casual employees will be entitled to 10 days paid FDV leave per annum from 1 February 2023 for non-small business employees (employers with 15 or more employees), or 1 August 2023 for small business employees (employers with less than 15 employees).

8. PARENTAL LEAVE EXTENDED

From 1 July 2023, Parental Leave Entitlements are extended to up to 20 weeks, at the national minimum wage rate, enabling both parents to take parental leave at the same time. The leave entitlement increases by two weeks every year from 1 July 2024 to 1 July 2026 to a total of 26 weeks. A threshold limit of $156,647 for individuals and $350,000 for families will apply. Parental Leave Pay will be allowed to be taken in blocks as small as one day at a time, with periods of work in between within 2 years of the date of birth.

9. SUPERANNUATION INCREASE

On 1st July, the minimum superannuation guarantee percentage will increase from 10.5 % to 11% per annum.