Labor introduces industrial relations bill to Parliament, with potential impact for ECEC

The Australian Labor Party has introduced the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 to Parliament, paving the way for employers and employees in the early childhood education and care (ECEC) sector to develop enterprise agreements.

Core changes that fall into six major categories of relevance to ECEC are: 

Arbitration: Fair Work now has the power to step in when employers and employees cannot reach an agreement around enterprise bargaining agreements. 

Better off overall test: The test will be clarified so that hypothetical roster patterns will not prevent registration of pay deals and so that deals are judged with “a global, rather than line-by-line” comparison with the award, Workplace Relations Minister Tony Burke explained.

Minimum pay and unpaid wages: The Bill makes it easier to recover unpaid wages by increasing the small claims cap from $20,000 to $100,000, allowing employees to go through the Fair Work Commission rather than courts. Job ads which offer positions under the minimum wage will be banned. 

Gender pay equity:  Two specialist panels on pay equity and the care and community sector will be established, and breastfeeding, gender identity and intersex status will be added to the protected attributes under the Fair Work Act, which will have gender pay equity at its heart. 

Flexible work: Employers will be legally required to try to reach agreement with eligible employees (outlined below) who request flexible work hours or arrangements, including proposing an alternative if the employee’s request cannot be accommodated on reasonable business grounds.

Job security: New limits will be placed on rolling fixed term contracts so that workers “can’t be effectively put on an endless probation period,” Mr Burke said. 

The Bill provides access to multi-employer bargaining, simplifies the approval process for enterprise bargaining agreements (EA), and gives the Fair Work Commission the power to arbitrate EA terms where there is a protracted dispute. The ability for employers to terminate enterprise agreements and force workers onto award rates will be curtailed.

Supported bargaining will be possible for sectors such as ECEC, with the Bill also aiming to simplify the processes for agreements to run across multiple enterprises. Importantly, in the context of ECEC, the Government believes the changed legislation will promote wage growth and limit industrial action.

Essentially the bill replaces the existing low-paid bargaining stream with the “supported stream”, delivering a simpler way for workers in sectors such as ECEC, community services and cleaning to negotiate one pay deal across multiple employers.

The bill also expands the “single-interest stream” by allowing the Fair Work Commission to authorise workers with common interests – such as being employed in the ECEC sector – to bargain together, where it is in the public interest for them to do so.

Certain workers, such as parents with school-aged children, people with a disability, those experiencing family violence, carers and people over 55 years of age will be able to negotiate more flexible hours to meet their needs under the legislative changes in the Bill.

Employers who refuse to accommodate requests for roster flexibility for those groups could face  arbitration before the Fair Work Commission.

Commenting on the introduction of the Bill, Early Learning Association Australia (ELAA) Acting CEO, Megan O’Connell shared the experience of negotiating the Victorian Early Childhood Teachers and Educators Agreement (VECTEA) for over a decade, describing it as “long and complex, requiring ministerial approval to enter into an agreement with close to 400 Kindergartens.”

Under the new legislation, negotiations such as these will be simpler and faster as the Fair Work Commission can approve these processes.

“When we negotiated the VECTEA not all kinders were ready to take part,” she explained.

“That meant we had to negotiate another two agreements over time and still some kinders missed out. We’re pleased that the government is making it easier for employers to raise pay and conditions for their workforce.”

The changes have caused peak bodies representing the needs of employers and businesses to express some concerns, with Andrew McKellar from the Australian Chamber of Commerce and Industry saying the multi-employer agreements “would be a backwards step.”

“It’s a major concern for business because we really could see a seismic shift in the way in which bargaining is structured in Australia,” he said.

Consultation about the Bill, Mr Burke said, will be ongoing. The Sector will provide further insights in coming days about what the Bill means for ECEC, reactions from peak bodies, and how the Bill will play out in day to day operations for employees and providers. 

To access the Legislation, please see here.