Background
All Australian employers will be acutely aware that the Federal government has, since the last election, embarked on a fairly aggressive program of targeted changes to the nation’s industrial relations laws.
So far, we’ve had changes aimed at supporting Australia’s jobs and economic recovery[1], gained more respect at work[2], we’ve secured our jobs and got better pay[3]. We’ve closed one lot of loopholes[4] and now, with the passing of the Fair Work Legislation Amendment (Closing Loopholes No 2) Act 2023 (Closing Loopholes No 2), we’re about to close some more.
This latest round of changes is arguably the most sweeping to date, with potentially significant implications for those who engage casuals and contractors in particular. We will elaborate on those in further upcoming editions of this bulletin but for now, below is a summary of the key changes under both sets of Closing Loopholes legislation and what employers should be doing in preparation and response:
Date of change |
Change |
Actions for employers |
Closing Loopholes No 1 |
||
| 15 December 2023 | Small business redundancy exemption commences – retains redundancy entitlements for employees where the employer becomes a small business employer (i.e. they have less than 15 employees) as a result of downsizing in circumstances of bankruptcy or insolvency.
|
Consider when effecting redundancies
Consider whether any redundancy policies or procedures need updating
|
| 15 December 2023 (but any orders made now won’t come into effect until 1 November 2024) | Labour hire worker rules – employees, unions, host employers can now apply to the FWC for a “regulated labour hire arrangement order” requiring employers to pay their employees the same as employees of the host enterprise.
|
Consider impact on any labour hire arrangements the employer may use – whether as supplier or user of the labour |
| 15 December 2023 | Health and safety representative right of entry – union officials assisting a HSR are entitled to do so without a Fair Work entry permit and are afforded certain powers and protections when carrying out that role.
|
Ensure that those who deal with union officials are aware of this change. |
| 15 December 2023 | Family and domestic violence discrimination protection – “subjection to family and domestic violence” is now a protected attribute under the FW Act’s anti-discrimination jurisdiction. | Ensure that those who are responsible for disciplining employees are aware of the inclusion of this right as a “workplace right”
Update: · anti-discrimination policy; · disciplinary policy.
|
| Later of 1 January 2025 or the day after the Minister declares the Voluntary Small Business Wage Compliance Code | Criminal Wage theft – once effective, these provisions will impose substantial criminal penalties on employers who deliberately underpay wages.
Will not apply to small businesses that comply with the Voluntary Small Business Wage Compliance Code (yet to be developed).
|
Ensure that employees are paid correctly – undertake an audit if necessary.
Ensure that any underpayments, once discovered, are rectified immediately.
Small businesses should comply with the Voluntary Small Business Wage Compliance Code.
|
Closing Loopholes No 2 |
||
| 26 August 2024 | Personal services contractors – following 2 High Court cases in 2022[5] the legislation reinstates the state of the law before those cases regarding the difference between contractors and employees – that this is to be determined by the “real substance, practical reality and true nature of the working relationship”, meaning that post-contractual conduct will be relevant as well as the terms of the contract.
There is an ability for contractors to “opt out” where they earn over the Contractor High Income Threshold (yet to be determined).
Those alleged to have engaged in the civil liability offence of “sham contracting” must prove their belief that the putative contractor was in fact a contractor, was objectively reasonable (note – this change is effective from 27 February 2024).
|
Review all independent contracting arrangements to determine whether any contractors should more properly be engaged as employees. Consider making offers of employment to any contractors in relation to whom you consider you may have some liability.
Ensure that all contractor agreements contain provisions which satisfy the common law definition of a contractor.
Ensure that all arrangements with contractors reflect the terms of the Contractor Agreement.
|
| 26 August 2024 | Casual employment – changes the definition of a casual worker so that, having regard to the real substance, practical reality and the true nature of the employment relationship (i.e. not just the terms of the contract), taking into account of a range of factors (including whether the employee has a regular pattern of work) to determine if there is a firm advance commitment to continuing and indefinite work (i.e. if there is such a commitment, the employee will not be a casual at law, despite what you call them).
Also introduces an “employee choice” process whereby casuals can notify their employer that they no longer meet the requirements of the new definition of a casual employee and so wish to have their employment converted from casual to full or part time employment.
Such requests can be rejected on fair and reasonable operational grounds.
Changes to the obligation to provide Casual Employment Information Statement mean that it must now be provided to casuals: · before they commence; · 6 months after they commence; · 12 months after they commence; and · every 12 months thereafter.
|
Undertake an immediate review of all casual arrangements to determine whether such employees should be properly characterised as part time or full time employees instead.
Remember that existing obligations about offering casual conversion continue to apply for now.
Update systems and processes to unsure that the employer is able to respond to employee choice requests when made. This should include the process for considering such requests.
Update systems and processes to ensure that the Casual Employment Information Statement is provided to casual employees in accordance with the new schedule (opposite). |
| 26 August 2024 | Workplace delegates’ rights – union delegates to have additional rights and protections such as reasonable access to the workplace to communicate with members about industrial issues and payment for attending training. These rights will be included as “workplace rights” for general protections provisions purposes. | Ensure that those who deal with union delegates are aware of this change.
Ensure that those who are responsible for disciplining employees are aware of the inclusion of this right as a “workplace right”
Update any disciplinary policy.
|
| 1 July 2024 | Right of entry for suspected contraventions – unions will have a right to enter workplaces without notice to investigate suspected contraventions of the FWA, provided they first obtain an exemption certificate from the FWC stating that the usual 24 hour notice is not required.
|
Note this new right. |
| 27 February 2024 | Increased maximum civil penalties – these will increase fivefold for “selected civil remedy provisions” only.
Increase does not apply to small business employers.
|
Note these increased penalties. |
| 26 August 2024 | Gig workers and transport contractors – FWC will have powers to set minimum standards for road transport contractors and ’employee-like’ digital platform workers in the gig economy. | Employers who are NDIS providers or who use digital platforms such as apps to engage contractors should consider whether they use any ‘digital labour platform’ for the purposes of the FWA and if so, whether there are any minimum standards that must be applied to the engagement.
Road transport operators who engage contractors should also consider whether there are any minimum standards that must be applied to the engagement.
|
| 26 August 2024 | Right to disconnect – employees will have the right to refuse contact outside of work hours unless it is unreasonable to do so.
Unreasonableness depends on various factors, including the nature and level of responsibility of the role, the reason for the contact, whether the employee is already compensated for out of hours work or will be paid, the level of disruption the contact or attempted contact caused the employee and the employee’s personal circumstances. |
Review roles to identify where it would be reasonable to expect contact out of hours and update position descriptions to reflect the likelihood of such contact.
Ensure employment contracts for employees in such roles contain provisions ensuring that they are adequately compensated (either in an all-inclusive salary or through overtime payments) and which expressly permit the out of hours contact.
Consider implementing an out of hours contact policy.
|
If you need any help understanding or getting on top of any of the above changes, please let us know.
[1] Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021
[2] The Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Act 2022.
[3] Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022. As part of the Secure Jobs, Better Pay legislation, the new rules limiting the use of fixed/maximum term contracts came into effect on 6 December 2023. We noted those changes in our article ” What’s new in Employment Law and Industrial Relations in 2023?“.
[4] Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Closing Loopholes No 1)
[5] Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2
Article by:
Melissa Fitzpatrick
Special Counsel
Email Melissa
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