By Nigel Ward
The Federal Government successfully passed the Fair Work Legislation Amendment (Closing Loopholes) Bill No 2 2024 (the Closing Loopholes Bill) on Monday, February 12.
Together with the first Closing Loopholes Bill which was passed in December 2023, the government has now completed its third tranche of IR reforms.
Australian Business Lawyers and Advisers has published four reform updates on the new laws introduced by both Closing Loopholes Bills, including all the updates associated with the legislation passed on Monday.
The government’s reform agenda represents a historical shift in the industrial relations and workplace landscape of Australia. Some areas of the reforms will have an immediate impact on your business, requiring a review of workforce structures, process, bargaining strategy, contractual documents, and policies.
Other elements will likely take a little longer to materially impact risk, cost, or culture. This will include the new multi-employer bargaining framework which will take several years to evolve in practice; although you should be planning now for this.
While this will likely see an end to substantial legislative change this year, 2024 will see ongoing activity as the Fair Work Commission (FWC) gives effect to many of the new laws by including terms in modern awards.
ABLA is currently engaged in several large ‘test case’ reviews before the FWC concerning award simplification, job security, the care sector, gender-based undervaluation, union delegate rights, and the right to disconnect.
The total list of reforms is lengthy:
Passed Monday 12 February 2024
- New ‘right to disconnect’ introduced into the Fair Work Act
- Definition of employment changed
- Employee-like workers regulated
- Road transport contractor regulation introduced
- Union delegate rights for independent contractors
- New unfair contract disputes can be referred to FWC for contractors
- Casual employment definition changed with new casual conversion provisions
- Sham arrangement laws modified
- Right of entry changes (where underpayment suspected)
- Rules varied for withdrawals from amalgamations of unions
- The new bargaining arbitration provisions restricting FWC ability to arbitrate on merit in intractable bargaining disputes
- Small business redundancy changes (for employers going into administration/liquidation)
- Franchisees’ access to single-enterprise bargaining transitioning from multi-EAs
- Model terms for EAs
- Increase in civil penalties (up to five-fold increase) will require Courts to have regard to the substance of the relationship between the parties and not just the terms of the employee’s contract.
- Labour hire regulation arrangements
- Union delegate rights
- Anti-discrimination measures
- Criminalisation of underpayment
- WHS measures pertaining to first responders
Our guides cover all of the above reforms in detail.
Important changes to note. A few reforms warrant immediate comment:
A new casual employment definition
This will introduce greater uncertainty over the status of a casual employee’s engagement. However, the maintenance of existing mechanisms allowing employers to rely on casual loadings paid historically to offset NES permanent employment liabilities that might be owed to the employee (e.g. leave, redundancy or notice entitlements) should prevent employees from ‘double-dipping’ and receiving both a casual loading and permanent employment entitlements.
The repeal of existing casual conversion obligations requiring employers to proactively offer casual conversion and their replacement with a single legislated pathway for conversion by employee choice after six months of regular and systematic service provides a simpler pathway to conversion, compared to the prospect of having multiple regimes operate simultaneously (i.e. employers required to offer conversion and employees separately having their own right to elect to convert).
The introduction of a new right for employees to refuse to monitor, read, or respond to contact from an employer outside of the employee’s working hours unless the refusal is unreasonable represents the beginning of a new era in relation to the regulation of out-of-work hours contact.
A new regime has been introduced to regulate road transport contractors, comprised of new minimum ‘award-like’ determinations regulating key working conditions, a right to bring claims in response to the termination of contracting engagements, and the ability to collectively negotiate for road transport contractors.
Employee-like work will now be regulated, with new minimum ‘award-like’ determinations regulating key working conditions, a right to bring claims in response to ‘unfair de-activations’ from software platforms, and the ability to collectively negotiate for employee-like workers.
Enterprise bargaining disputes will be materially altered because, where there is a pre-existing enterprise agreement in place, then in any arbitration of a bargaining dispute, the FWC must ensure each term arbitrated is not less favourable to each of the employees and unions who were covered by a term dealing with the same matter in the pre-existing enterprise agreement.
This change is arguably the most significant of all the reforms because it will significantly hamper an employer’s ability to ‘bargain-out’ of its agreements any cumbersome or non-productive clauses. Unions will understand that if any union or employer claim is not agreed to between the parties when the claim is arbitrated by the FWC, any new term cannot be less favourable to employees than the term in the current enterprise agreement – thereby reducing the incentive for unions to concede changes without substantial compensation (and increasing their appetite to pursue their own claims).
Timeline for changes
The Bill is expected to receive Royal Assent in the coming week. The reforms will commence under the following timeline:
Changes commencing on the day after Royal Assent:
- changes to arbitration rules for bargaining disputes (requiring terms to be no less favourable than a previous EA term)
- changes to defence for sham contracting
- changes to ability of parties to exit multi-EA bargaining and re-enter single EA bargaining
- increase in civil penalties
- changes to rules about withdrawing from union amalgamations.
1 July 2024
- changes to right of entry provisions where underpayment suspected
- FWC can deal with unfair contract disputes.
Six months after Royal Assent (mid-August 2024)
- casual employment definition and casual conversion law changes
- definition of employment introduced
- regulation of employee-like work
- FWC regulation of road transport contractors
- ‘right to disconnect’ laws
- union delegate rights for regulated contractor businesses commence.
1 November 2024
- Labour hire arrangement orders take effect.
1 January 2025
- Criminalisation of wage theft commences.
Expert guidance for businesses
Business NSW and Australian Business Lawyers and Advisors – together with the Australian Chamber of Commerce and Industry – will be providing businesses with a step-by-step guide through the new laws and how they will impact businesses.
There are 25 planned events across the state before June 30, with at least two events per region. Those events will include online live workshops as well as an on-demand series. These will all be accessible via our website.
Because the events are live, there will be a Q&A component where business owners can ask workplace law experts about the changes and how they will affect them.
Everyone who attends the workshops will also receive access to tools (including templated letters, explainer workbooks, and presentations) to further assist them.
Nigel Ward is the CEO and Director at Australian Business Lawyers & Advisors.
