Part two of the Closing Loopholes amendments – An action plan for employers

Written by Admin | Mar 28, 2024 2:29:59 PM

On 26 February 2024, the second tranche of Closing Loopholes amendments was legislated by the Federal Government under the Fair Work Legislation Amendment (Closing Loopholes No.2) Act 2024 (Cth) (Closing Loopholes No.2 Act).

The first tranche of Closing Loopholes amendments was passed in December last year, a summary of which you can find here.

What are the changes?

Under the Closing Loopholes No.2 Act, employers should be prepared for further amendments to the Fair Work Act 2009 (Cth) (FW Act) with various commencement dates.

The changes which are already in effect and commenced on 27 February 2024, include:

Enterprise bargaining rules: Franchisees now have access to the single-enterprise bargaining stream and new rules have been introduced allowing the transition from multi-enterprise agreements.
Compliance notice measures: The Fair Work Ombudsman (FWO) may now issue a notice requiring an employer to calculate and pay underpayment amounts to employees. The Fair Work Commission (FWC) may also now order an employer issued with a compliance notice to comply with it.
Penalties: Increased maximum civil penalties for certain contraventions by companies and a new threshold for what constitutes a ‘serious contravention’.
Sham contracting: Changes to the defences available for misrepresenting employment as an independent contracting arrangement.

The changes which are due to commence from 1 July 2024 include:

Exemption certificates: A union will be able to obtain an exemption certificate to waive the minimum 24 hours’ notice requirement for entry to an employer’s premises if they reasonably suspect underpayments of employees.
Workplace delegates’ rights: Delegates’ right terms will be included in determinations varying modern awards, workplace determinations made on or after 1 July 2024, and enterprise agreements approved by vote on or after 1 July 2024.

The more significant changes under the Closing Loopholes No.2 Act are due to commence from 26 August 2024, or an earlier date fixed by the Government. In summary, these changes include:

Casual employment: A new definition of “casual employee” and a new “employee-choice pathway” for eligible casual employees to request conversion to permanent employment. The FW Act will also contain new distribution and ongoing redistribution requirements for the Casual Employment Information Statement (CEIS).
Right to disconnect: A new “right to disconnect” which allows eligible employees to reasonably refuse to monitor, read or respond to contact (or attempted contact) from an employer or third party outside of their working hours. The FWC will also have the power to issue orders in relation to the right to disconnect.

Definition of employment: A new definition of employment to be used when determining the ordinary meaning of “employee” and “employer”. There is also a new mechanism allowing eligible individuals to “opt-out” of the application of the new definition, which commenced on 27 February 2024.

Regulated workers: New minimum standards for “employee-like” workers performing digital platform work in the gig economy and contractors in the road transport industry. There will also be new protections relating to unfair deactivation from digital platforms and unfair termination of these workers.

Finally, employers can expect to see the following changes due to commence next year:

From 1 January 2025, there will be increased maximum civil penalties for non-compliance with provisions relating to underpayments and exploitation of workers.
On 26 February 2025 (or an earlier date fixed by the Government), the FWC will release new model flexibility, consultation and dispute terms for enterprise agreements.

An action plan for employers

It is essential that employers are informed of these changes and take action now to ensure the appropriate checks and processes are in place in time for the various commencement dates.

A useful checklist for employers is set out below:

New laws	Checklist for employers
Right to disconnect	§ Develop “disconnection” policy guidelines for employees clearly setting out the employer’s expectations in relation to reasonable out of hours contact. § Update employment contracts to make out of hours requirements clear and identifying any compensation attributable to the requirements.
Casual employment	§ Update casual employment contracts to ensure that they reflect the new definition of a “casual employee”. § Update contracts and internal procedures for the new CEIS distribution and redistribution requirements. § Prepare for the new “employee-choice pathway”, noting the timeframes for responses and limited grounds for not accepting a casual employee’s notification.
New definition of employment	§ Carefully consider the new definition of employment when distinguishing between employment and contractor arrangements. § Consider the opt-out notice requirements for contractors who may fall within the new definition of employment. § Review contracting arrangements to ensure none could be found to be sham contracting.
Regulated workers	§ If hiring or engaging digital platform or road transport workers, ensure a substantial review is conducted into working arrangements and hire/engagement terms to manage the new raft of regulations for those previously unregulated industries. § Note the new protections against unfair termination and unfair deactivation.
Workplace delegates’ rights	§ Developing policy guidelines for managing recognition of workplace delegates and procedures for dealing with their exercise of rights.
Exemption certificates	§ Prepare for union right of entry with no prior notice in cases where underpayment of employees is reasonably suspected.
Compliance notices	§ Note the new compliance notice powers of the FWO to remedy the direct effects of a contravention, including new powers to issue notices requiring calculation and payment of an underpayment.

Your next steps

If you need any assistance navigating these changes please do not hesitate to contact our Directors at sydney@workplacelaw.com.au or you can call us at (02) 9256 7500.

Information provided in this news alert is not legal advice and should not be relied upon as such. Workplace Law does not accept liability for any loss or damage arising from reliance on the content of this blog, or from links on this website to any external website. Where applicable, liability is limited by a scheme approved under Professional Standards Legislation.

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