16/08/2023
Pay secrecy, flexible working arrangements and parental leave entitlements
Employment law is in a state of flux. There are a number of significant changes which are now in effect. We have set out a brief summary of each of these changes, and encourage you to reach out if your workplace requires assistance in ensuring its policies and procedures are up to date. We can also assist with training on these changes.
Pay secrecy changes
When?
Now. These changes commenced in December 2022, with a grace period until June 2023
What is the change?
There is now a positive right for employees to:
• disclose (or choose not to disclose) information about their remuneration; and
• to ask any other person (whether employed by the same employer or not) about their remuneration.
Pay secrecy provisions in new employment contracts are prohibited, and pay secrecy provisions in existing employment contracts are invalidated.
Practically, it means employees have a right to discuss their pay with other employees, including employees in another business.
What action is required?
Revise employment contracts.
Don’t enforce any existing pay secrecy provisions.
Employers should be aware that non-compliance may result in civil penalties.
Flexible Working Arrangements
When?
Now. These changes commenced in June 2023.
What is the change?
Employers are required to meet with employees to discuss requests for flexible work arrangements and cannot refuse requests before discussing alternative working.
On receiving a request, an employer must:
• meet with the employee to discuss; and
• if the employer refuses, propose alternative changes or outline reasonable business grounds for refusal.
Eligibility to access flexible working arrangements is expanded to include:
• pregnancy; and
• employees experiencing family violence or supporting an immediate family member or household member facing family violence.
A key part of the change is that a refusal to grant a request can now be arbitrated by the Fair Work Commission, who can determine whether the refusal is reasonable or not.
As to what is “reasonable business grounds” we will need to wait for case law, but at currently the following may be reasonable business grounds – depending on the size and nature of the employer’s business:
• the requested arrangements are too costly;
• other employees’ working arrangements can’t be changed to accommodate the request;
• the change would be impractical to change other employees’ working arrangements or hire new employees to accommodate the request;
• the change is likely to result in a significant loss in efficiency or productivity, or
• the change would have a significant negative impact on customer service.
What action is required?
Employers should urgently update their policies and procedures to incorporate the new procedure.
If a request for flexible working arrangement is made and you are thinking of refusing it, it may be worth seeking legal advice first.
Paid Parental Leave
When?
Commenced 1 July 2023
What is the change?
Dad and Partner Pay entitlement has been removed and couples can now claim 20 weeks’ paid parental leave between them. Single parents may claim all 20 weeks themselves.
A family income limit of $350,000 has been introduced. A family earning more than this amount is not entitled to the paid parental leave.
Employees can claim the leave in multiple blocks until the child turns 2, and there is no longer a requirement to return to work to be eligible for paid parental leave.
What action is required?
Employers should update their policies, procedures and forms.
Employers should also ensure that staff with approval delegations are aware of the changes and are properly trained in these new entitlements.
Unpaid Parental Leave
When?
Commenced 1 July 2023
What is the change?
Employees:
• are entitled to commence unpaid parental leave at any time in the 24 months following the birth or placement of a child;
• may request an extension to their period of unpaid parental leave to a total of 24 months each, regardless of the amount of leave the other parent has taken;
• have increased flexible unpaid parental leave of 100 days, which can be claimed in blocks of one or more days.;
• that are pregnant may access flexible unpaid parental leave in the six weeks prior to the expected birth of their child.
The changes to these provisions also removes provisions relating to couples both employed at the same workplace and allow both parents to take unpaid parental leave at the same time (previously limited to 8 weeks).
The Fair Work Legislation Amendment (Secure Jobs Better Pay) Act 2022 (Cth) also introduced changes that commenced in June 2023 around employer obligations when receiving a request to extend unpaid parental leave. Under these changes employees also now have the right to dispute a rejected request to extend unpaid parental leave.
Employees must still comply with the notice requirements in the Act when taking flexible unpaid parental leave, which include:
• 10 weeks prior to commencing leave—provide notice of the total number of flexible unpaid parental leave dates they intend to take, though this period can be reduced in certain circumstances if it is not practicable for the employee to give notice 10 weeks before.
• 4 weeks prior to an intended flexible leave day—provide notice must be given of which day will be flexible unpaid parental leave, though if this is not possible, the employee must give the notice as soon as practicable.
What action is required?
Employers should update their policies, procedures and forms.
Employers should also ensure that staff with approval delegations are aware of the changes and are properly trained in these new entitlements.