By Dominic Mather, Australian Business Lawyers & Advisors.

Australia has a rich history of using natural resources to power the nation and it's undeniable that coal and gas fired power stations have been crucial infrastructure in generating that power. 

However, as Australia attempts to meet its 2050 goal of net zero emissions, it is anticipated that these power stations will be redundant in their current form which will have significant impacts for workers that are dependent on their continuing operation.

In an attempt to support these affected workers, the Net Zero Economy Authority Act 2024 (the Act) was introduced in March 2024 and came into effect in September 2024. 

What is the Net Zero Economy Authority Act?

The Act introduces three main changes: 

• Firstly, the Act establishes a new federal statutory agency, the Net Zero Economy Authority (the Authority), which will, among other things, facilitate a consultation process known as a “community of interest process” to discuss the transition away from coal or gas fired power stations.
• Secondly, the Act confers new functions on the Fair Work Commission (FWC) that allow it to hear submissions from relevant parties involved in a “community of interest process” and then determine if a “community of interest determination” should be made.
• Thirdly, the Act imposes obligations on “closing employers” and “dependent employers” who are specified within a “community of interest determination” made by the FWC.

We consider each of these briefly below.

What does the community of interest process involve?

The community of interest process requires the CEO of the Authority to undertake a process of:

• identifying employers that are the owners or operators of a coal or gas fired power station (closing employers)
• identifying employers that have a commercial relationship with a closing employer and will likely cease a substantial part of its business operations at the station or within that area because of the power station’s closure (dependent employers)
• identifying the number of employees employed by the closing employers or dependent employers who perform work at the relevant power station (transition employees)
• identifying the kind of jobs performed by the transition employees and obtaining details relating to the employment of the transition employees
• estimating the number of transition employees who may be seeking other work (participating employees)
• seeking expressions of interest from other employers that may be able to offer employment to transition employees, and
• consulting with the closing employers, dependent employers and employer organisations who are entitled to represent the interests of the transition employees.

At the completion of this consultation process, the CEO of the Authority may then apply to the FWC for a “community of interest determination” (a determination).

Why is the Fair Work Commission involved?

The Fair Work Commission is Australia’s workplace relations tribunal and already has extensive functions and powers under the Fair Work Act 2009 in relation to resolving workplace disputes.

Where the CEO of the Authority applies to the FWC for a determination, the FWC will hear submissions from impacted parties on whether an employer should be specified within a determination.

What effect does a determination have on these employers?

Where an employer is specified as a closing employer or dependent employer in a determination, they will then be required to comply with specific obligations.

These will likely include a requirement to:

• seek expressions of interest from each transition employee of the employer in finding other employment;
• arrange, at the employer’s cost, the provision of career planning advice or financial to those employees; and
• allow those employees time off work, or access to flexible working arrangements, to:
  • receive career planning advice or financial help
  • attend training to assist those employees find new employment
  • attend activities relating to the recruitment of those employees, and
  • receive advice from employer organisations about the operation of these specific provisions of the Act.

Alternatively, employers and employee organisations may agree on the actions that a closing employer and dependent employers will take for transition employees. Similar to an enterprise agreement, the agreement reached between an employer and employee organisation will require approval of the FWC to be effective.

Will this impact me as an employer?

In its current form, the Act will only have potential effects on employers who might be a closing employer or dependent employer.

This means that the legislation will only impact:

• owners or operators (jointly or alone) of coal or gas fired power stations;
• businesses that employ people at those power stations or have a commercial relationship with a power station.

For “dependent employers”, the government has made it clear that the Act is not designed to capture employers who will not be substantially impacted by the closure of the relevant power station or those employers that have the ability to redeploy people within their other regional operations, or other businesses in the same geographic area that will be indirectly impacted by the closure of the power station.

Conclusion

At its heart, this new process is designed to support the coal and gas power industry in its transition and to impose requirements to ensure affected employees are supported to move into new jobs where a power station is being closed.  

For businesses who may fall within the scope of the new laws, we recommend that you familiarise yourself with the new laws to understand potential obligations and impact. 

If your business is heavily reliant on the continued operation of a gas or coal fired power station, please contact Australian Business Lawyers & Advisors. 

Dominic Mather is an Associate at Australian Business Lawyers & Advisors.

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