Change at pace: What you need to know about recent changes to the Fair Work Act 2009 (Cth)

Workplace laws are changing following the passage of the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Cth) (Closing Loopholes No.1) and the Fair Work Legislation Amendment (Closing Loopholes No.2) Act 2024 (Cth) (Closing Loopholes No.2) in the past few months. The changes are some of the most significant workplace law reforms seen in some years. Some changes have commenced already while others will come into effect at different points between now and 2025.

We summarise some of the main changes in this article.

1. ‘Same job, same pay’ – labour hire

Intended to close the ‘loophole’ with labour hire arrangements, changes have been made to achieve the ‘same job same pay’ objective for labour hire workers.

The Fair Work Commission (FWC) can now make a ‘regulated labour hire arrangement order’, compelling a labour hire employer to pay their employees no less than the ‘protected rate of pay’ – the full rate of pay that would be payable to the employee if the host employer’s enterprise agreement/instrument applied. Orders can be made from November 2024.

Labour hire is distinguished from a contract to procure or provide ‘services’ and some analysis may be required to identify if the framework applies or not.

Anti-avoidance rules carry significant penalties for employers and individuals and apply now.

2. Casual employment

In a shift away from recent case law, the definition of casual employment will revert to a ‘multi factor’ test as had been the test previously.

The new definition focuses on the totality of the employment relationship. Relevant factors will include whether there is an absence of a firm advance commitment to continuing and indefinite work and whether the employee is entitled to a casual loading or specific rate of pay. The factors will replace the primacy previously placed on the contract terms (that is, the written contract).

Employers will need to provide casual employees with a new ‘Casual Employment Information Statement’ (CEIS) before or soon after starting casual employment, at the 6 month mark and at the 12 month mark. There are some exceptions to the timeframes for small business employers and rules about the ongoing provision of the CEIS during employment.

Casual conversion will now be an employee right where an employee can request conversion to permanent employment after 6 months (longer for a small business) by notifying their employers.

3. Right to disconnect

A new workplace right will allow employees to:

• refuse to monitor, read or respond to contact, or attempted contact from their employer (or third party) where the contact or attempted contact is outside of the employee’s ‘working hours’;
• but not if the refusal is unreasonable.

What is ‘unreasonable’ will depend on a range of factors including the reason for the contact, how the contact is made, and the extent to which the employee is compensated for working additional hours.

As this will be a workplace right, an employer will be prohibited under existing general protections provisions in the Fair Work Act 2009 (Cth) (FW Act) from taking adverse action against an employee for reasons that include the new right.

Where disputes arise and they are not resolved at the workplace level, either party will be able to apply to the FWC to deal with the dispute and/or to make a ‘stop order’.

Many awards and enterprise agreements deal with how additional hours of work are treated and paid. The right to disconnect may overlap with those existing frameworks and is also likely to impact those employees to whom an award and enterprise agreement does not apply.

Employers can prepare for the new right by reviewing their contracts and policies to deal with out-of-hours contact, set expectations, and appropriately deal with workplace flexibility arrangements in place that allow employees to work in a way that suits them and the business.

4. New definitions of ‘employee’ and ’employer’

A new definition of ‘employee’ and ‘employer’ will require a multiple factor assessment to determine if a person is an independent contractor or employee, as was the case a few years ago. The focus is now on the totality of the relationship by assessing the ‘real substance, practical reality and true nature of the relationship between the individual and the person..’

In addition, a new ‘opt-out’ mechanism will be available to permit an independent contractor earning over the ‘contractor high income threshold’ (which has not been set yet) to remain as a contractor rather than converting to an employment relationship. Opt-out notices can be revoked at any time by the individual.

5. Employee-like worker

Gig workers are set to get more protections. The changes will apply to employee-like workers who perform paid work through a digital platform, such as ride share and meal delivery workers. The Fair Work Commission will have the power to set Minimum Standards Orders which provide for basic entitlements as well as set ‘guidelines’ for employee-like work.

Additional rights to challenge an unfair ‘deactivation’ of their engagement are also part of the changes.

6. Wage theft

A new federal criminal offence will be introduced in the FW Act to address intentional wage theft.

Read our article where we take an in-depth look at this change.

7. Intractable bargaining

Intractable bargaining provisions allow the FWC to intervene with arbitration if parties cannot reach agreement. To assist a resolution, the FWC may issue intractable bargaining declarations and intractable bargaining workplace determinations.

The FWC’s power will extend to ensuring the workplace determinations provide for no less than an existing enterprise agreement benefit. This is a significant shift which may have wide ranging implications for bargaining because of the potential for legacy terms to remain in place where the Commission intervenes to resolve bargaining.

8. Union delegates rights

Union delegates rights will soon form part of modern awards and be a required term in new enterprise agreements approved from July 2024.

New rights include the right to represent the interests of members and non-members eligible for membership, reasonable communication with other employees (union members or employees eligible to be members) about union matters and access to workplace facilities for that purpose, and the right to paid time to attend union training. The new protections will also extend to regulated workers (employee-like workers and regulated road transport contractors) who are workplace delegates.

9. Other changes

There are other changes which will also impact some employers. They include reforms to minimum employee-like worker standards in the road transport industry, right of entry rules for suspected wage underpayments, likely changes to the model enterprise agreement consultation and flexibility terms and more.

Get in touch with the Gadens Workplace Advisory team for further updates and guidance on the changes.

Read our other articles in the Let’s chat: Work series:

• Restructuring and downsizing: Tips and traps | Gadens
• From fine to felony: The looming criminalisation of wage underpayments | Gadens

If you found this insight article useful and you would like to subscribe to Gadens’ updates, click here.

Authored by:

Amanda Junkeer, Partner
Diana Diaz, Special Counsel
Olivia Torchia, Lawyer