On 4 September 2023, the Federal Government introduced the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 (Bill), its third tranche of Industrial Relations reform in the last 12 months following the passing of the Secure Jobs, Better Pay and the Same Job, Same Pay amendments to the Fair Work Act 2009 (Cth) (Act).
While it was initially anticipated that this Bill would be passed by Parliament before the end of 2023, the Bill will now not be considered by parliament until after 1 February 2024 due to a senate inquiry. This delay will be welcome news to businesses that are already inundated with significant additional workplace regulations and change.
We set out below a summary of the main proposed amendments to the Act. However, we anticipate significant change ahead of the amendments being passed by parliament. Gadens will provide updates in due course.
It is proposed that the existing definition of casual employee in the Act will be amended to implement a legislative checklist definition for casual employee. This is largely a multi-factorial test (taking many businesses back to how the test was for employees prior to the recent High Court decision in ZG Operations v Jamsek (Jamsek). In this respect, employers that have a largely casual employee workforce may be significantly impacted by this change as they may need to review their business practices and engagement methodology with regard to casual employees. Further opportunities for casual conversion to permanent employment are also proposed.
Further, amendments propose to update the Casual Employment Information Statement to be provided employees again after 12 months of casual employment.
Further in response to Jamsek, the Federal Government has legislated to undermine the High Court’s decision (even stating in a note in the Bill that the intention of the amendment is a response to Jamsek and associated decisions).
This will take us back to being required to analyse the totality of the employment relationship. Businesses engaging independent contractors should be mindful of their engagement practices should these amendments be passed.
In circumstances where a business has downsized to fewer than 15 employees due to insolvency-like events, the remaining employees will still be entitled to redundancy pay in circumstance where the business becomes bankrupt or is in liquidation. That is, the small business redundancy exemption will not apply in those circumstances.
New provisions will allow employees and employee organisations (unions) to apply to the Fair Work Commission (FWC) for a regulated labour hire arrangement order.
This will require a labour hire provider to pay their employees no less than what they would be entitled to be paid under a relevant host business’ enterprise agreement (or other employment instrument) if the employee were directly employed by the host. There will be limited exemptions to these provisions. We expect to see changes in the proposed amendments in this space.
Amendments are proposed to the sham-contracting provisions (that is, where a worker is engaged as an independent contractor when the worker would more appropriately be engaged as an employee) to make it more difficult for employers to defend such claims.
While wage theft has been introduced in some states, the Federal Government proposes to introduce a new federal criminal offence for wage theft, which applies to intentional conduct on behalf of the employers.
The offence of wage theft will carry a maximum of 10 years’ imprisonment, and/or a maximum fine of the greater of up to three times the amount of the underpayment or for an individual, $1,565,000 and for a body corporate, $7,825,000.
To assist with this change, the following is also proposed:
One of the most controversial proposals is the introduction of provisions within the Act that will apply to gig-economy workers.
It is proposed the FWC will be empowered to:
This is a significant shift in approach to these workers. However, the ramifications of this change is difficult to foresee, particularly in circumstances where the Bill is likely to change further.
The Bill also includes the additional amendments:
|It is proposed that the FWC will have the ability to make and vary enterprise agreement model terms for flexibility, consultation and dispute resolution in place of the existing provisions.
|Strengthening protections against discrimination
|Proposing to establish a new protected attribute in the Act to protect from discrimination against employees who have been, or continue to be, subjected to family and domestic violence.
|Enabling multiple franchisees to access the single-enterprise stream
|Proposing to make amendments to the bargaining framework by enabling multiple franchisees to access the single-enterprise stream.
|Transitioning from multi-enterprise agreements
|Proposing to make amendments to the bargaining framework to allow supported bargaining and single interest employer agreements to be replaced by single-enterprise agreements at any time (if certain conditions are met).
|Proposing to repeal sunsetted provisions regarding applications to vary modern awards if already being dealt with in a four yearly review.
|Workplace delegates’ rights
|Proposing to introduce a framework for workplace delegates’ rights, including protections for them when they seek to exercise those rights.
|Withdrawal from amalgamations
|Repealing amendments made by the Fair Work (Registered Organisations) Amendment (Withdrawal from Amalgamations) Act 2020 (Cth), relating to the withdrawal of parts of amalgamated organisations (i.e. unions divisions seeking to demerge).
We have not included the work health and safety amendments in this article. However, will do so separately.
We will be closely following the Bill as it is reviewed by the Senate Committee and when it is debated in Federal Parliament in 2024.
Please reach out to our team if you have any questions or concerns about how this proposed legislation may impact your business and we would be happy to assist.
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George Haros, Partner
William Marshall, Senior Associate
Lauren Chappill, Lawyer