We hope you all got to enjoy some time off over the Christmas and New Year period. There are a lot of changes on the cards this year from a HR perspective, with phase one of the new Secure Jobs, Better pay legislation now in operation. In this monthly update, we:

• discuss these changes and what action you should be taking to ensure your business is compliant
• discuss the new family and domestic violence leave entitlement from 1 February 23
• look at the HR Workplace trends for 2023
• provide you with advice on factors to consider when turning down a pay increase request

 Secure Jobs, Better Pay Act

On 6 December 2022 the Fair Work Legislation Amendment (Secure Jobs Better Pay) Act 2022 received royal assent. The new amendments are the most significant changes we have seen since the introduction of the Fair Work Act (2009).

Some of the changes have come into operation immediately, whilst others will be introduced over the coming 12 months. Some of the dates are subject to change to an earlier date if they are fixed by proclamation.

Below we have highlighted the most significant changes that are effective now and recommended what you need to do to ensure your organisation is compliant with the new legislation.

Additional changes will be coming into operation in March 2023, June 2023 and December 2023. For an overview of all changes, you can visit https://www.dewr.gov.au/secure-jobs-better-pay or view our previous blog on the changes available here.

1. Prohibiting pay secrecy: Many employment contracts contain provisions requiring employees to keep their remuneration confidential. Under the new provisions, this is no longer allowed, and employees are free to discuss and/or ask other employees about their remuneration.

Pay secrecy terms in current contracts of employment and written agreements will continue to operate, until they are varied or a new contract is entered into, in which case they will no longer have effect.

This provision was effective from 7 December 2022 (however the prohibition will take effect on 7 June 2023 to provide employers with a six-month grace period).

Recommended actions:

• Review employment contract templates and remove any pay secrecy provisions.
• Review remuneration increase/bonus templates and remove any pay secrecy provisions.
• Review your overall remuneration strategy and equity.

2. Prohibiting Job Advertisements that breach the Fair Work Act (2009)

While it is unlawful under the Act to pay someone incorrectly, it was previously not unlawful to advertise a job with a pay rate that would breach the Act. This has now changed.

Changes apply to jobs being advertised on or after 7 January 2023.

Recommended actions:

• If you include the rate of pay in job advertisements, ensure the rate of pay is equal to or greater than the minimum rate in the applicable modern award or agreement.

3. Termination of Enterprise Agreements passed their nominal expiry date 

It will now be more difficult to terminate agreements that have passed their nominal expiry date

In the past the FWC needed to be satisfied that terminating an agreement which had passed its nominal expiry date was not contrary to the public interest, as well as considering the views of the parties to the agreement.

The FWC now needs to be satisfied of one of the following before approving a termination:

• the continued operation of the agreement would be unfair to the employees it covers;
• the agreement does not and is not likely to cover any employees; or
• the continued operation of the agreement would pose a significant threat to the viability of the business, terminating the agreement would reduce the risk of terminations, and the employer gives a guarantee that it will preserve termination entitlements under the agreement.

Recommended actions:

• If you have an agreement in operation at your workplace that has passed its nominal expiry date – be prepared to bargain for a new agreement, unless you can demonstrate one of the new criteria can be met.

Family and Domestic Violence Leave

A reminder that 10 days paid family and domestic violence leave commences from 1 February 2023 (1 August 2023 for businesses with less than 15 employees as at 1 February 2023).

A quick snapshot:

• Full time, part time and casual employees are entitled to this leave.
• 10 days will be credited on the commencement date to each employee for a 12 month period
• The leave will not accumulate from year to year
• The leave will renew on the employees work anniversary
• Employers are required to keep a record of family and domestic violence leave, but should not include this information on the employees payslip

Clients should refer to the Liquid HR Resource Hub to access an updated Family and Domestic Violence Leave policy.

HR Workplace Trends for 2023

2023 is upon us and HR trends are continuing to rapidly evolve due to the pandemic’s ongoing impact on the workplace environment.

For organisations to remain competitive, leaders must adapt their business operations to meet these ongoing changes affecting the workplace environment.  Key trends for 2023 are forecasted to focus on flexible work arrangements, diversity and inclusion and employee well-being.

These are the top HR trends for 2023:

• Employee wellbeing: Employers will need to focus on and combat the rise of workplace stress by creating workplace environments that support employee wellbeing. Additionally, employees will be seeking organisations who offer wellbeing focused employee benefits that support their overall wellness.  Incentives that are aimed towards fitness, nutrition, stress reduction and mental health support.
• Human skills are the new hard skills: Employers are evaluating soft skills in the hiring process more so than in prior years. Top sought after skills employers are seeking: communication, customer service, leadership, attention to detail and collaboration.
• Flexible workplace arrangements: Employees value flexibility and work-life balance, employers who don’t offer flexible work arrangements will have more difficulty recruiting and retaining top talent over competitors that do offer flexible options.
• Hybrid working is the new normal: Work from home options continue to be the number one search term across employment platforms such as Seek. With remote working becoming commonplace and the future of work, there is no longer a one size fits all approach.  Leaders must focus on keeping employees engaged and motivated and creating an environment where employees feel valued and appreciated.
• Diversity, inclusion, and equity: Employees want to be part of a workplace culture where they feel they are treated equally and have an equal opportunity for success regardless of their gender, race, religion etc. Employees are looking for organisations that promote diversity and inclusion in their workplace and recruitment processes.
• The four-day work week gains momentum: in 2022 the four-day work week gained momentum overseas, with some large organisations in Australia following suite by officially rolling out this workplace strategy. This modern approach to the work week is offering employees a 32-hour work week, with no loss of pay.
• More employers will offer paid parental leave: there is a continuing upward trend of employers offering paid parental leave to employees and this is expected to continue into 2023.
• Talent shortage: Employers need to ensure they have clear strategic plans to attract and retain top talent. Fostering a positive workplace culture will be integral to retaining top talent, along with what benefits are on offer to employees (flexible work arrangements, development opportunities, work/life balance, salary and employee benefits).

Tips on how to turn down an employee requested pay rise

According to a recent salary survey, the most important career goal for employees for 2023 is a pay rise.  This result may not be surprising due to the increasing pressures Australian’s are feeling from the costs of living.

Some organisations are not in a position to approve an employee’s request for a pay rise, whether it’s due to financial budget limitations or the employee’s performance or skill set doesn’t currently warrant one.  Managers need to consider the best way to turn an employee down, whilst also minimising the possible fallout from declining the request. Possible implications from declining a pay rise could result in the employee choosing to leave the organisation, or the employee loses morale or motivation.

Below are some recommended approaches for organisations to consider when faced with this type of request:

• Show consideration towards the request: it’s important not to react and regret it, you don’t want to say no on the spot and risk offending the employee. Be open to hearing what they have to say, acknowledge their request and give a commitment that you will think about it and get back to them soon.
• Do your research: check current annual salary guides before making a final decision.   Check to see if the pay level you are offering the employee is at market rate comparative to similar levels of skills and expertise.  If the employee’s earnings are comparable to current market rates, you can use this market data to support your decision.
• Assess the request carefully: assess all factors relating to the request, employers should provide employees with a valid reason why they are declining the request.
• Be transparent: make sure you are transparent and honest with your employees and that you clearly and carefully explain the reason/s why you are declining the request. Be clear about the organisation’s budget and discuss what the employee can do to earn a pay increase in the future. This will help the employee understand your decision.
• Be empathetic: it’s important to show empathy and understanding towards the employee. Let them know that you are aware of their financial needs and that you aren’t disputing they are worth the pay increase however, now is not the right time.
• Consider other options to reward the employee: if there isn’t going to be a pay rise for the foreseeable future, consider other ways you can recognise the employee.  For example, what flexible work arrangements could be offered, are there other employee benefits they could be entitled to, or what training and development opportunities may be available to them.
• Set a clear development plan: if the employee needs to develop certain skills or experience to achieve the pay rise, it’s important to provide constructive feedback and set a development plan that outlines the goals they need to achieve and how they can achieve them.
• Highlight the positive attributes of the employee: when declining a pay rise request, make sure the employee knows how valued they are. Use this opportunity to provide them with positive feedback about their performance.
• Prepare a succession development plan: if there is training and development opportunities the employee can advance to, explain what options are available to them and how this will help them to achieve their financial goals. Prepare a succession plan with the employee to support their training and development goals.
• Set up a follow up meeting: where possible, give them hope for a future pay rise by offering to revisit the conversation in six months.

For more information on the above, please contact us on 1300 887 458 and speak with one of our HR Consultants in Melbourne, Sydney or Brisbane. If you are interested in learning more about our HR services, including HR Outsourcing, HR Consulting, HR Advisory Services, contact us at enquiries@liquidhr.com.au.