Employment Update – Closing Loopholes No.2 Is Go

The Fair Work Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 came into effect on 26 February 2024.

Here’s what to expect and when:

Changes to casual employment

Start date: 26 August 2024

  • New Look: A ‘casual’ employee will be defined as an employee whose relationship is characterised by an absence of firm advanced commitment to ongoing work and if the employee is entitled to casual loading under their contract or Fair Work instrument (e.g. Award).
  • Employee choice: the conversion process will now rest with/be initiated by the employee.
  • Read all about it: employers will be required to provide their casual employees with a Casual Employment Information Statement periodically:
    • at the start of casual employment;
    • 6 months into casual employment (unless you are a small business);
    • 12 months into casual employment; and
    • every 12 months thereafter.

Employee and employer must first genuinely attempt to resolve any disputes at the workplace level. If that fails, either party can apply to the Fair Work Commission to deal with the dispute. 

Right to disconnect

Start date: non-small business – 26 August 2024, small business – 24 August 2025

Employees will have a right at law to disconnect outside of working hours – they do not have to monitor, read or respond to contact from their employer unless that refusal is unreasonable.

‘Reasonableness’ will consider factors such as, amongst other things:

  • why the contact occurred;
  • how the contact was made and how disruptive it is to the employee;
  • whether there is compensation, and if so to what extent, to the employee for being available outside ordinary working hours;
  • the employee’s role and their level of responsibility; and
  • the employee’s personal circumstances (e.g. family/caring responsibilities).

Employee and employer must first genuinely attempt to resolve any disputes at the workplace level. If that fails, either party can apply to the Fair Work Commission to deal with the dispute. 

What is an “employee”

Start date: 26 August 2024 (or an earlier date if set by the Government)

A new section 155A will be added to the Fair Work Act 2009 (Cth) to explicitly state that an ‘employee’ is identifiable by the ‘real substance, the practical reality and the true nature of the relationship’.

This legislative amendment overturns the recent High Court decisions in 2022 which held that this point is determined by first looking at the terms of the written contract (refer to our previous article: https://www.nextgenlegal.com.au/employees-vs-independent-contractors/). The whole of the relationship must now be examined- not just the terms of the contract, but also how the contract is performed in practice.

Test for sham contracting

Start date: 27 February 2024

Sham contracting refers to the misrepresentation of an employment relationship as an independent contractor arrangement.

The test for defending against sham contracting has now changed from whether the employer did not know and was not reckless to a test of whether the employer ‘reasonably believed’ it was an independent contractor arrangement.

Digital labour and road transport

Start date: 26 August 2024 (or an earlier date if set by the Government)

Fair Work Commission will soon be permitted to set minimum standards for workers ‘employee-like workers’ performing work for a ‘digital labour platform’ (broadly defined to include “online application, website and systems operated to arrange, allocate or facilitate the provision of labour services” ) or for road transport contractors.

The following are also being introduced for the digital platform workers and road transport contractors:

  • protections against unfair deactivation/termination; and
  • a framework allowing/registering consent-based collective agreements.

Civil penalties

Start date:          Underpayment provisions – the later of 1 January 2025 or the day after the declaration of the Voluntary Small Business Wage Compliance Code

                              All other provisions – 27 February 2024

Civil penalties will increase for contraventions of selected civil remedy provisions, including provisions relating to:

  • the National Employment Standards;
  • modern awards;
  • enterprise agreements;
  •  record-keeping and document production;
  • sham arrangements; and
  • infringement and compliance notices.

Non-small business: maximum penalties for some contraventions by corporations will be up to five times greater.

Civil penalties will also increase for underpayment – in certain circumstances, the maximum penalty might be three times the value of the underpayment.

If you have any queries regarding any of these points, please do not hesitate to contact NextGen Legal on (03) 9039 2142.

By | 2024-03-14T12:46:41+11:00 March 14th, 2024|General News, Workplace & Employment|