Part Three: Comparison of the Employment Rights Bill 2024 and the Fair Work Act 2009 (Cth): similarities, impact on employers and possible lessons to be learnt from the Australian experience

Informing workers of their rights

Fair Work Information Statement

Under the FWA, employers must issue new employees with a Fair Work Information Statement (FWIS) before, or as soon as practicable after, the employee starts employment. Failure to do so exposes the employer to pecuniary penalties for contravention of the FWA. Amongst other things, the FWIS includes a statement that employees have the right to join a union or choose not to, and to take part in lawful industrial activity or choose not to.

Statement of right to join a trade union

The ERB proposes to require employers to provide workers with a written statement informing them that they have the right to join a trade union, at the same time as the statement employers must provide under section 1 of the Employment Rights Act 1996 (i.e. by the worker's start date). Employers will also have to reissue the statement at other times, which will be specified in regulations.

Possible lessons to be learned from Australia

Employees, trade unions or the Fair Work Ombudsman (Australia’s government agency with jurisdiction to enforce the FWA) will often include a claim for failure to provide the FWIS along with other claims for contravention of the FWIS. The contravention is not litigated on its own. Penalties for the contravention can be significant – in one case, an employer was fined $18,000 for failing to give employees the FWIS. However, Australia does not see an increase in trade union membership or activity simply because of the FWIS. Usually, other factors (in particular, union campaigning) are the driving force.

If the GB experience matches Australia's, then the requirement to inform workers of their right to join a trade union may not have that great an impact. However, it is just one element of a package of proposals in the ERB which, together, have the potential to lead to greater union presence in many workplaces and an increase in the number of employees whose terms are determined by collective bargaining.

Trade union right of access

Right of access to specific areas, with entry permit

The FWA gives trade union officials who hold a valid entry permit a legal right to enter workplaces under specific conditions.

Permit holders may enter a workplace to: investigate suspected contraventions of the FWA or industrial instruments or to hold discussions with employees who are or may be union members, during non-working times (e.g. meal breaks). A permit holder must provide a valid entry notice to the employer and occupier at least 24 hours (but not more than 14 days) before entry. They must also comply with reasonable requests regarding occupational health and safety and must not unduly hinder the employer’s operations.

Entry is limited to areas where relevant employees work or take breaks and permit holders must not misuse their rights. Employers must not refuse or obstruct lawful entry without a valid reason.

Similar but separate right of entry provisions exist for permit holders under occupational health and safety laws.

New right of access for specific purposes

The ERB aims to give unions a right of access to workplaces to allow them to meet, represent, recruit or organise workers (regardless of whether they are members of a trade union), and to facilitate collective bargaining. "Access" will include communication with workers by any means (effectively, covering digital as well as physical access).

There will be a statutory process to facilitate the making of access agreements between employers and unions, with the possibility for the Central Arbitration Committee (CAC) to order access based on default statutory terms where the parties fail to reach agreement and a fast-track approval process for agreements that meet certain criteria.

Access agreements will be presumed not to be legally binding, but the employer or the union will be able to complain to the CAC in the event of a breach.

Possible lessons to be learned from Australia

Trade unions in Australia have enthusiastically taken up and regularly use their rights of entry to meet, represent, recruit or organise workers. Certain trade unions are known for abusing their right of entry powers by entering a workplace under the pretext of lawful purposes and then causing disruption, intimidation or deliberately accessing non-permitted parts of the workplace.

Right of entry disputes – litigated in the Fair Work Commission – are common, arising due to failure to give adequate notice, disagreement over where the union can meet its members or the route it should follow to get there, and permit holders’ conduct during the entry. Union right of entry is a key factor in increasing industrial activity, membership and collective bargaining. Unions will not hesitate to bring civil penalty proceedings against employers alleged to have unlawfully refused a valid right of entry.

The extent to which trade unions in GB take up the right of access is likely to depend on their resources (particularly how many officials they have available to attend workplaces). It is possible that they may focus on obtaining access agreements with larger employers first.

Trade union recognition

Recognition subject to strict conditions

Under the Fair Work (Registered Organisations) Act 2009 (Cth), an employee association must be registered by the Fair Work Commission to enjoy the rights (and obligations) of a trade union under the FWA. To be eligible for registration, an employee association must:

• Be a genuine employee association
• Exist to further or protect its members’ interests
• Have at least 50 employees as members
• Have a different name to other existing registered organisations

Registration gives an organisation certain rights, including to:

• Represent its members at the Fair Work Commission
• Hold elections under its rules (run by the Australian Electoral Commission at no cost to the organisation)
• Become a body corporate
• Have perpetual succession
• Buy, hold, sell, lease, mortgage, exchange or own property
• Sue or be sued in its registered name

Registration also comes with a number of obligations for organisations including:

• Financial reporting
• Annual reporting
• Officer and related party disclosures and reporting
• Elections
• Officer duties

Simplifying recognition requirements

Under the current law, the CAC can only accept an application for statutory trade union recognition if it is satisfied that:

• At least 10% of the workers in the proposed bargaining unit are union members, and
• A majority of the workers in the bargaining unit would be likely to be in favour of the union being recognised

The ERB gives government the power to make regulations reducing the current 10% threshold to anywhere between 2% and 10%, and removes the requirement that the majority of workers would be likely to be in favour of recognition entirely.

Where the CAC orders a ballot on recognition, the current law requires the CAC to declare that the union is recognised if at least 50% of the workers voting in the ballot vote in favour of recognition and those who vote in favour make up at least 40% of the bargaining unit. The ERB removes the 40% threshold, so only a simple majority of those voting will be required.

The ERB also strengthens the provisions designed to prevent unfair practices during the trade union recognition process, e.g. by preventing employers from increasing the number of employees in the bargaining unit via recruitment once CAC has accepted an application for recognition, or agreeing recognition with a non-independent union to stop an independent union gaining recognition.

Possible lessons to be learned from Australia

Union recognition is not easily obtained in Australia. Attempts at registration as a recognised trade union are scrutinised and subject to challenge. During the COVID pandemic, the so-called ‘Red Unions’ appeared. These organisations offer services to workers, including legal representation and support in workplace issues. However, they are not registered under workplace or industrial laws as trade unions. While they can represent members including in litigation, they have limitations in accessing certain legal avenues. The difficulty in union recognition tends to keep out newcomers and maintain the power of existing unions.

The changes proposed by the ERB will make union recognition in GB easier to achieve, and employers may find themselves having to deal with an increase in union recognition applications. With easier routes to legal recognition, we are less likely to see an equivalent of Australia's Red Unions emerging.

Industrial action

Balloting and notification requirements for action to be protected

Australian employers cannot set minimum service levels during ‘protected’ industrial action (see below). However, an employer can apply to the Fair Work Commission for orders suspending or terminating protected industrial action if:

• It is causing or threatening to cause significant economic harm to the employer or employees, or
• It is endangering life, personal safety, health or welfare of the population or part of it

In practice, these are difficult for an employer to establish.

Employees can only take lawful industrial action if it is protected, which requires a protected action ballot after obtaining an order from the Fair Work Commission to hold the ballot. The ballot is a formal process that allows employees to vote on whether they want to take protected industrial action during enterprise bargaining. The industrial action must then be within the parameters of the protected action ballot order granted by the Fair Work Commission. There are certain strict conditions which must be met for a lawful ballot, including notice and information requirements, and a simple majority of the eligible employees who do vote having voted in favour of the action.

There are specific notice requirements that must be met before taking protected industrial action. A party intending to take protected industrial action must give at least 3 working days’ written notice to the other party (usually the employer). An exception is where the action relates to a proposed multi-enterprise agreement, in which case the notice period is at least 120 hours (5 days), unless the Protected Action Ballot Order specifies a longer period.

Employers must also give at least 3 working days’ notice before taking protected response action (e.g., a lockout).

The notice must include: the nature of the action (e.g., strike, work ban), the intended start time and date and the group of employees who will be involved.

The notice must be in writing and clearly communicated to the employer.

Repeal of previous government's restrictions on industrial action

The ERB repeals the Strikes (Minimum Service Levels) Act 2023, which allowed employers to set minimum service levels that had to be maintained during strikes in certain key sectors such as health, transport, fire and rescue, etc. These provisions have never been used, so their removal will not make a difference to industrial relations in practice.

Many requirements imposed by the Trade Union Act 2016 are also being repealed or amended by the ERB:

• The requirement – in industrial action ballots in important public services – for at least 40% of those entitled to vote, to vote in favour of industrial action will be repealed
• The 50% turnout requirement in industrial action ballots in all sectors will also be repealed (this change will be linked to the introduction of e-balloting)
• The amount of information unions must include in ballot notices and industrial action notices provided to employers will be reduced, although not to the same extent. The government considers that employers need more specific information at the point when industrial action is being called, as opposed to merely being a potential outcome of a ballot
• The notice of industrial action that unions must provide to employers will be reduced from the current 14 days to 10 days
• The period for which a ballot in favour of industrial action provides a valid mandate is to be increased from six months to 12 months
• The requirement for union supervision of picketing (by a union official either present at the picket line or readily contactable) in order for industrial action to be protected is being repealed

Possible lessons to be learned from Australia

Industrial action, once a norm in Australia, is now relatively rare due to the strictures imposed by the protected action ballot process and the limitations on taking protected industrial action. However, industrial action is still used by trade unions as an effective enterprise bargaining strategy. The use is likely to increase with the relatively recent introduction of multi-enterprise bargaining agreements, which involve unions/employees negotiating a single collective agreement with multiple distinct businesses in an industry. It is expected that unions will use multi-enterprise industrial action to place significant pressure on employers across an industry to accept the union’s proposed terms.

In GB, while the removal of ballot thresholds does make it easier for a union to gain sufficient support for industrial action, and the increase in the period for which a ballot provides a valid mandate means that strikes may go on for longer, whether or not employers will be faced with an increase in strikes depends more on the general industrial relations climate than on the legislation. As for multi-enterprise bargaining, the ERB will introduce sectoral collective bargaining in adult social care and for school support staff. It remains to be seen how this will impact the appetite for industrial action in those sectors.

Time off and facilities for union officials and reps

Mandatory terms with significant liabilities for breach

Under the FWA, workplace delegates—union representatives elected or appointed to represent union members—have specific rights and protections. These are now included as mandatory terms in industrial awards, enterprise (‘collective’) agreements, and workplace determinations (collective agreements made by the Fair Work Commission).

Amongst other significant protections, workplace delegates are entitled to reasonable paid time off to attend union training (subject to notice and operational requirements), reasonable access to workplace facilities for union purposes, and the right to communicate with members and potential members about industrial matters during work hours, without loss of pay. Employers must respect the entitlements or face legal proceedings for pecuniary penalties. This includes not taking adverse action against union officials or representatives because they are entitled to or do exercise (or propose to exercise) these workplace rights.

Expansion of rights under the ERB

Currently, trade union officials and learning representatives have a right to a reasonable amount of paid time off to carry out certain duties/activities within the scope of their role.

The ERB introduces a requirement for employers who permit union officials and learning representatives to take such time off to provide them with facilities for carrying out their duties/activities should they request this.

The ERB also introduces a new right to a reasonable amount of paid time off, and the provision of facilities, for trade union equality representatives (whose role broadly involves working towards eliminating discrimination, advancing equality of opportunity and fostering good relations between people with different protected characteristics).

Union officials and representatives will be able to complain to an employment tribunal if the employer fails to comply with these requirements, and the tribunal will have the power to award compensation if it finds against the employer.

Possible lessons to be learned from Australia

Employers must recognise and respect the rights of union officials and representatives to exercise workplace delegates’ rights. Otherwise, they can be exposed to significant liability. In Australia, trade unions are prepared to litigate breaches of workplace delegates’ rights - and workplace delegates to bring personal civil proceedings if they are subjected to adverse action in connection with their rights. Employers in GB may face similar claims. However, employers should also be aware of – and be ready to enforce – the limits of workplace delegates’ / union representatives' rights. Workplace delegates / union representatives may engage in overreach and push the boundaries of their entitlements. They may attempt to take advantage of ill-informed or under-resourced employers.

Protection from detriment and dismissal for union reps and members

Broad protection from adverse action

Under the FWA, the general protections provisions safeguard individuals from adverse action in relation to their involvement in industrial activities. Industrial activities are lawful actions related to participation in industrial associations (such as trade unions) and include:

• Choosing to become or not become a member of an industrial association
• Participating in lawful activities of an industrial association (e.g., meetings, campaigns)
• Representing or promoting the views of an industrial association
• Seeking to be represented by an industrial association
• Refusing to participate in unlawful industrial activities

It is unlawful for an employer to take adverse action against another person (such as an employee or contractor) because they:

• Are or are not a member of an industrial association
• Engage or propose to engage in industrial activities
• Refuse to engage in unlawful industrial activities

Adverse action includes: dismissal or demotion; discrimination in terms and conditions of employment; altering an employee’s position to their prejudice; threats or intimidation; refusal to hire or offer employment.

Extending protection under the ERB

The ERB provides that a worker will have the right not to be subjected to a detriment by their employer (by any act or deliberate failure to act), whose sole or main purpose is to prevent or deter the worker from taking protected industrial action, or to penalise them for doing so. This is intended to address the gap in the current law identified by the Supreme Court in the Mercer case (see our report on that case here).

The ERB also simplifies and reinforces the current protection from dismissal for taking part in protected industrial action, so that an employee will be regarded as automatically unfairly dismissed where the sole or principal reason for dismissal is that they took protected industrial action, regardless of the length of the industrial action. It does this by removing the current limitation which restricts protection to the 12 week "protected period" which begins with the date the employee first took part in the industrial action.

Possible lessons to be learned from Australia

These protections from adverse action are a frequent source of litigation in Australia. Employers have a reverse onus of proof in such claims. This means employers considering taking any adverse action against employees who are participating in industrial activities must ensure they can prove the reason for taking the action does not include the employee’s industrial activities.

Similarly, in GB, an employer wishing to dismiss an employee during long-running industrial action will have to take extra care to demonstrate that the dismissal is for reasons other than the employee's participation in the industrial action.

Protection from 'blacklisting'

Protection from ‘blacklisting’ under general provisions on industrial activity

The FWA does not specifically deal with ‘blacklisting’ but the general protections provisions relating to industrial activity, and separate provisions protecting freedom of association, make ‘blacklisting’ unlawful.

Certain State equal opportunity and anti-discrimination legislation (such as the Equal Opportunity Act 2010 (Vic)) makes it unlawful to collect information which could be used to discriminate against a person on grounds protected under the legislation, such as industrial activity, unless there are reasonable grounds to do so. This would make it unlawful for an employer to collect information about union membership.

Extension of protection under the ERB

Blacklisting, i.e. compiling information on individuals concerning their trade union membership and activities, with a view to that information being used to discriminate in relation to recruitment or treatment, is prohibited under the current law.

The ERB strengthens protection from blacklisting by giving the government power to introduce regulations prohibiting the use, sale or supply of lists of union members or people who have taken part in trade union activities for the purposes of discrimination, even where the lists were not created for such purposes, or where lists are compiled by third parties who don't have a direct employment relationship with the individuals being blacklisted.

Possible lessons to be learned from Australia

Employers should not obtain, create, use or supply lists of trade union members or of employees or contractors who engage in any industrial activities. Employers in Australia should not even ask whether an employee is a union member. Taking any of these steps could be used as evidence that the employer is taking or is intending to take unlawful adverse action because of union membership. Further, in certain state jurisdictions the mere collection of the information can be unlawful.

In GB, it is also important to bear in mind that information about an employee's trade union membership counts as special category data under the UK GDPR, so employers that do collect this information must take extra care to comply with data protection requirements.

Public sector check-off

Deduction of union subscriptions with employee agreement

The FWA permits deduction of union membership fees from employee wages but only if the employee agrees in writing to the deduction. There are no restrictions applying to public sector employers but not all public sector employers are covered by the FWA.

The FWA imposes strict rules and limits on deductions from employee wages and other entitlements. Failure to comply with the rules and limits exposes an employer to liability for contravention of the FWA.

Repeal of previous government's restrictions

Check-off is where employers deduct trade union subscriptions from workers' pay on the union's behalf and transfer the money to the union. This is only permitted with the worker's agreement (otherwise it could be an unlawful deduction under the Employment Rights Act 1996).

In the public sector, legislation that was introduced by the previous government prohibits check-off unless workers have the option to pay their subscriptions by other means and the union makes reasonable payments to the employer to cover its costs of administering check-off. These restrictions will be repealed by the ERB.

Possible lessons to be learned from Australia

Employers should be very careful and seek advice before making any deductions from employee wages. Employers can deduct union membership fees from employee wages but must ensure they comply with all applicable authorisation requirements.

Statutory sick pay

Personal/carer’s leave

Under the FWA, ‘sick leave’ is termed ‘personal leave’. Employees other than casual employees are entitled to 10 days of paid personal/carer’s leave per year. This leave accrues progressively throughout the year based on ordinary hours worked. It carries over from year to year if unused. It is payable from the first day of an employee’s illness or injury.

The leave can be used for personal illness or injury (sick leave) or caring responsibilities for an immediate family or household member who is sick or injured or affected by an unexpected emergency.

Leave is paid at the employee’s base rate of pay for their ordinary hours. Employers can request reasonable evidence, such as a medical certificate or statutory declaration, to support the asserted reason for taking the leave.

Enhancing SSP rights

Employees in GB are entitled to up to SSP for up to 28 weeks' sickness absence. Under current rules, SSP is only payable from an employee's fourth day of sickness absence, and employees are only eligible if they earn at least the lower earnings limit (£125 per week). The ERB proposes to broaden rights to SSP by making it payable from the first day of sickness absence and removing the lower earnings limit for eligibility.

The current rate of SSP is £118.75 per week. However, for employees earning below the lower earnings limit, SSP will be payable at the normal rate or 80% of their normal weekly earnings – whichever is lower.

Possible lessons to be learned from Australia

Employers should have clear policies which explain the entitlement and their processes for employees requesting and evidencing their entitlement to paid personal/carer’s leave (Australia) and to sick leave and pay (GB).

Enforcement

Fair Work Ombudsman

The Fair Work Ombudsman (FWO) is an independent statutory agency established under the FWA. Its primary role is to promote and enforce compliance with the FWA, industrial awards and enterprise agreements - most commonly focussing on employee entitlements to minimum wages, statutory personal/carer’s (sick) and annual (holiday) leave, notice of termination of employment, paid breaks, and keeping of employee records. The FWO provides extensive information on its website to assist employers with compliance.

The FWO maintains a large inspectorate to enforce compliance with the FWA, particularly in industries employing vulnerable workers. The FWO has a wide range of powers, including:

• Conducting audits and investigations into potential breaches of workplace laws dating back six years (the applicable limitation period)
• Entering workplaces (without a warrant) to inspect records and interview staff
• Compelling the production of documents and information
• Issuing compliance notices for underpayment of wages and other contraventions of the FWA
• Issuing infringement notices
• Entering into enforceable undertakings with employers
• Commencing legal proceedings - against employers, directors and officers or any individual allegedly involved with a contravention - to seek court orders to enforce compliance with the FWA, remedy underpayments dating back six years, and obtain pecuniary penalties for contraventions of the FWA.

Fair Work Agency – a new enforcement body under the ERB

The ERB gives the government power to create a single labour market enforcement body, which will be known as the Fair Work Agency. (Unlike the majority of the ERB's provisions, which only extend to England, Wales and Scotland, the provisions relating to the Fair Work Agency also cover Northern Ireland, so the Fair Work Agency will be responsible for labour market enforcement across the whole of the UK.)

This body will take over the functions of various existing enforcement bodies, covering minimum wage, statutory sick pay, and modern slavery, and will be given responsibility for enforcing holiday pay rights. Its powers will include the power to:

• Impose notices of underpayment on employers who have failed to pay certain statutory payments (such as the national minimum wage, or SSP) to their workers
• Apply for court orders to enforce compliance with notices of underpayment and bring employment tribunal proceedings on workers' behalf
• Provide, or arrange for provision of, legal advice and representation for any person who is or may become party to proceedings relating to employment or trade union law
• Recover its costs of enforcement from any person who has failed to comply with any relevant labour market legislation.

Possible lessons to be learned from Australia

The FWO is a well-resourced and sophisticated government agency, with sharp teeth and a healthy appetite for litigation. It regularly prosecutes employers and individuals for contraventions of the FWA - even where the non-compliance is inadvertent. The FWO does not ‘settle’ litigation against employers, though may accept an enforceable undertaking as an alternative to prosecution. If prosecuted, rather than defend a matter (if no defence is reasonably available) an employer can admit liability but contest quantum and penalties.

Employers must comply with the FWO’s lawful exercise of powers and should not hinder or obstruct or mislead a FWO inspector in the course of their duties. However, employers are entitled to only comply with the FWO to the extent required under the FWA and can avail themselves of legal representation and the protection of legal professional privilege. Voluntary cooperation can prejudice an employer’s ability to later defend a prosecution. Worse still, misconceived failure to comply with FWO notices can give rise to further contraventions of the FWA.

For these reasons, if the FWO contacts an employer about an alleged contravention of workplace laws, employers should immediately seek legal advice from an employment lawyer before substantively engaging with the FWO. While it is not yet known how well resourced the UK's Fair Work Agency will be, the significant powers it will be afforded under the ERB indicate that the government intends it to have real teeth. Employers who are contacted by the Fair Work Agency would therefore be encouraged to follow the Australian example and seek prompt legal advice.

Holiday pay record keeping requirements

Strict requirements apply

Under the FWA and associated regulations, employers in Australia have strict employee record-keeping obligations. This includes making and keeping accurate records about pay, hours of work, leave taken and leave balances. Employers must keep records for seven years from the date the record is made.

ERB introduces new obligations

The ERB includes a requirement for employers to keep records to demonstrate their compliance with workers' rights to paid annual leave under the Working Time Regulations 1998 (WTR) for six years. Failure to comply will amount to a criminal offence (punishable by fine).

Possible lessons to be learned from Australia

Employers in both Australia and GB should already be making and keeping employee records in accordance with applicable legislation. This applies even if the employer is using an external payroll or human resources information system provider. An outsourcing arrangement will not excuse non-compliance, so employers must take care in selecting a reputable provider, providing accurate information to the provider, and ensuring the provider gives the employer the required (and compliant) employee records. The new GB holiday pay record keeping requirements being introduced by the ERB impose an additional administrative burden on employers, particularly given the complexity of the statutory requirements for the calculation of holiday pay. Employers unsure of their employee record-keeping obligations should seek legal advice and/or visit the FWO’s website (Australia) or the gov.uk website (GB).

Umbrella companies

Recent rights for labour hire workers

Australian law does not separately regulate pay conditions for employees of ‘umbrella companies’, although employees of labour hire companies are entitled to the same pay as direct employees for doing the same work. This ‘same job, same pay’ legislation was recently introduced and provides that labour hire workers must receive at least the same pay as employees of the host business performing the same duties under an enterprise agreement. Labour hire workers or their unions can apply to the Fair Work Commission for a Same Job, Same Pay order.

The Commission assesses whether the labour hire workers are doing the same work as directly employed staff. If so, the Commission can make binding orders (raising employee pay rates) with which the labour hire company must comply.

Proposed new regulation

The ERB will define what is meant by the term 'umbrella company' in order to allow for the regulation of such entities.

Those working through umbrella companies will enjoy comparable rights and protections to those who are directly engaged by recruitment agencies.

For enforcement purposes, umbrella companies will be brought within scope of the Employment Agency Standards Inspectorate’s (and subsequently, the Fair Work Agency’s) remit.

Possible lessons to be learned from Australia

In Australia, labour hire companies facing increased labour costs will almost certainly pass the costs on to their employer clients. In turn, employers are likely to reduce the reliance on labour hire workers as the cost of doing so increases and the commercial advantage decreases. Labour hire companies should consider opposing Same Job, Same Pay applications where there are reasonable grounds to do so. In GB, if workers engaged via umbrella companies have the same rights as those working through recruitment agencies, end clients may reconsider their use of umbrella companies going forwards. Umbrella companies will need to adapt their operations to comply with the new rules.