Employer obligations guidance

Overview

Australia’s energy transition is a significant source of economic opportunity for our industries, regions and workers.

This guidance material summarises key employer obligations under sections (ss) 58 and 59 of the Net Zero Economy Authority Act 2024 (the Act). This material will be of particular use to employers who have been specified as a closing or dependent employer (“specified employer”) under a community of interest determination by the Fair Work Commission (FWC) and where an Energy Industry Jobs Plan (the Plan) has commenced.

This material should be read in conjunction with the Act and instruments made under the Act. The Plan complements the existing workplace relations framework. Specified employers should read the Act in conjunction with relevant sections of the Fair Work Act 2009 (Fair Work Act) and industrial instruments including enterprise agreements.

Who is a specified employer?

Under the Act, a specified employer is an employer identified by the FWC in a community of interest determination as either a closing employer or a dependent employer.

It is the responsibility of each specified employer to ensure they are familiar with the content and requirements of this Guidance, the Act and instruments.

Specified employers have obligations to ensure their employees are provided with meaningful support to make decisions about their future and prepare for their next job, if they intend to keep working.

Employee eligibility

The Act defines 2 categories of workers eligible for support under the Plan – transition employees and participating employees:

Transition employees, as defined in s 7 of the Act, are employees of a closing or dependent
employer who work at a power station, coal mine, or in other relevant businesses whose job
will be directly affected by the power station’s closure.
Participating employees, as defined in s 5 of the Act, are transition employees that have
given an expression of interest to their employer in finding other employment once the power
station closes.

All employees who meet these definitions are eligible for support, regardless of whether they are casual or permanent, or work part-time or full-time.

Specified employers are required to provide supports to their direct employees. Where a worker at a power station is employed by another business that business would be responsible for any supports for their employees if specified by the FWC in a community of interest determination.

Employer Obligations under ss 58 and 59 of the Act

Obligations under the Act are designed so employees can make informed decisions about their future and are supported to prepare for their next job, if they intend to keep working. Many specified employers already provide transition supports which may contribute to meeting their obligations.

While the Act prescribes what actions specified employers should undertake to meet their obligations, it does not quantify the level of supports to be provided. This recognises that the business operations and circumstances of each specified employer are different, and the level and nature of the support offered to employees may differ based on operational requirements, the needs of those employees, and the existing supports available through applicable modern awards or enterprise agreements.

Obligations under s58 of the Act

Specified employers must:

Provide transition employees with information about the employer’s obligations under s 59 of
the Act.
Seek expressions of interest from transition employees in finding other employment.
Inform transition employees that, if the employee becomes a participating employee of the
employer, personal information about the employee may be given to the Authority’s CEO
under s 64 or disclosed by the Authority’s CEO under s 66 of the Act.
Cooperate with the Authority in the administration of the Plan, including in the provision of
information or documents sought by the Authority’s CEO under s 64 of the Act.

Obligations under s59 of the Act

It is important to note that the supports required under the Act operate in addition to any existing obligations an employer has under an enterprise agreement or other industrial instruments.

Specified employers must:

Provide career planning and financial advice to all transition employees on their request.
Employers can choose to arrange this advice or allow employees to arrange on an
individual basis. An employer would need to offer one option only:
- where an employer arranges the advice, the employer must pay all costs associated
- where employees individually arrange the advice, the employee must be able to take
  time off work or have flexible working arrangements to attend, and the employer must
  make a financial contribution to the cost of the advice.
Support participating employees to undertake requested training relevant to finding other
employment:
- The employee must be able to take time off work or have flexible working arrangements
  to attend, and the employer must make a financial contribution to the cost of the training.
Work with receiving employers, as identified by the Authority, to help participating
employees secure new employment, including by supporting recruitment processes,
sharing relevant information, and agreeing reasonable start dates.
Allow participating employees time off work, at their normal rate of pay, or access to
flexible working arrangements to attend activities relevant to the recruitment of the
employee.
Permit transition employees to receive advice and support, in relation to the operation of
the Plan, from any employee organisation that is entitled to represent their industrial
interests and in accordance with existing arrangements under an enterprise agreement or
other industrial instruments.

Specified employers must continue to meet all agreed terms and conditions under an enterprise agreement or other industrial instruments and also provide reasonable supports to help employees during the transition.

Considerations when determining supports

Specified employers should provide supports unless doing so would be unnecessary or unreasonable. In determining the level of support, employers are able to consider operational requirements and situations where employees are unaffected by the closure or the impact on employees is minor or negligible.

Operational requirements that may mean particular supports cannot be provided (or can only be provided in a limited way) could include, system reliability and security obligations, safe operating crew requirements, plant availability and outage constraints, regulatory and licence conditions. These kinds of requirements may be relevant to assessing reasonableness particularly where providing a support would compromise safety, reliability or compliance obligations.

If employees choose not to access some supports, employers may rely on this, provided offers for support are made in good faith. In all cases, employers should document the rationale for not providing supports to demonstrate that decisions are proportionate, reasonable, and aligned with obligations under the Act.

Employee Obligations

When seeking supports, employees need to comply with their requirements under s 59 of the Act.

Transition employees must provide reasonable notice to their employer when requesting
time off work or access to flexible working arrangements to receive career planning or financial
advice arranged by the employee.
Participating employees must provide reasonable notice when requesting time off work or
access to flexible working arrangements to undertake training to assist the employee to find
other employment or to attend activities relating to the recruitment of the employee.
Transition and participating employees must also provide reasonable evidence that the time
off work or flexible working arrangements was used to receive career or financial advice or to
access training or attend recruitment activities, if required by the employer.
Where an employer is making a financial contribution towards the cost of advice or training
arranged by a transition or participating employee respectively, reasonable evidence must
be provided by the employee as to the total cost of the advice, if required by the employer.

What do I have to do now?

As a specified employer, you must take immediate and proactive steps to provide supports. As employers develop policies, procedures or guidelines to meet their obligations under the Act, they must continue to comply with any consultation, bargaining or notification requirements set out in their enterprise agreement or other industrial instruments. This includes engaging with employees and their representatives in line with agreed consultation clauses.

Employers should:

Develop and maintain internal policies and procedures that set out how transition
supports will be identified, delivered, and monitored.
Identify employees likely to be affected by the closure and consider the full range of
reasonable supports that could be offered, including skills development, career planning
and financial advice.
Consult with employees and their representatives to ensure supports are appropriately
tailored, effectively implemented, and responsive to employee needs.
Link supports to impact: any supports offered must be proportionate to the scale and
nature of the impact on employees. Supports should be tailored to the specific needs of
employees and the roles they occupy.
Determine whether a support is reasonable in the circumstances, having regard to the
nature and extent of the support needed to help an employee prepare for retirement or new
employment, the link between the support and the identified need, proportionality and the
employer’s capacity to provide the support, and operational requirements
Establish clear governance and decision-making arrangements for authorising,
monitoring and recording support activities.
Maintain records of decisions, consultations, and planned supports so that
preparedness and good-faith engagement can be demonstrated to the Authority, including
what supports are being provided.

What's next in the process?

After a community of interest determination is made by the FWC, the Act sets out a clear pathway for how support arrangements can be finalised and delivered, providing the framework for agreeing, approving and giving effect to supports for eligible employees, and resolving any disputes that may arise.

Section 60 allows a specified employer and employee organisations to jointly apply to the
FWC for a determination on what actions the employer will take to satisfy its obligations
under the Act. This process is intended to result in supports that are proportionate and
flexible, recognising differences in business size, structure and capacity.
Section 61 empowers the FWC to make a determination upon application where a specified
employer and an employee organisation have been negotiating for 3 months and have
failed to reach agreement on what actions the specified employer will take to satisfy its
obligations under the community of interest determination.
Section 62 provides the ability to clarify legal or policy issues and the flexibility to vary
or finalise arrangements made under ss 60, 61 ensuring determinations remain appropriate
as circumstances change. Under this section, the Authority’s CEO, a transition employee of
a specified employer, or an employee organisation may apply to the FWC for an order.

Importantly, not all specified employers are required to undertake processes outlined in sections 60-61 of the Act. For example, smaller employers or employers with a limited number of affected employees may be able to meet their obligations without a formal process, provided the required supports are delivered in line with obligations under the Act.

Working with the Net Zero Economy Authority

The Authority is responsible for upholding the integrity and effective operation of the Act. Under s 68 of the Act, the Authority’s CEO is also responsible for promoting and managing compliance with employer obligations under Part 5. Employer obligations are active once a community of interest determination is made by the FWC and are compulsory.

The Authority is committed to working closely with employers to help them meet their obligations and achieve the best outcomes for impacted workers, including by providing education, assistance and advice. Our approach reflects the Authority’s role as a Commonwealth regulator, and is guided by principles of transparency, consistency, and fairness. You can read more about the Authority’s regulatory approach on our website.

Non-compliance

Where necessary, the Authority may take regulatory action to monitor and enforce employer’s compliance with their obligations under the Act, including obligations arising from a determination or order. This may include requesting information, reviewing employer practices and decision-making, and taking proportionate compliance or enforcement action where an employer has failed to meet statutory requirements. The Authority’s approach to regulation is intended to support compliance and continuous improvement, while ensuring that transition employees receive the supports to which they are entitled, and the objects of the Act are achieved.

Contacts

If you have any questions please visit our website or contact us at EIJP.Governance@pmc.gov.au.