Employer Assist: Unloading The Fair Work Act Reforms

HVIA Employer Assist provider Industry Legal Group provides a comprehensive overview of the Federal Government’s significant changes to the Fair Work Act, including the implications for employers and employees.

The passage of the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 and the Fair Work Legislation Amendment (Closing Loopholes No.2) Act 2024 (Closing Loopholes No. 2 Act) has brought significant reforms to the Fair Work Act 2009 (Act).

Some reforms have already commenced, while others will take effect between now and 2025. A summary of key reforms taking effect in 2024 is provided below.

Enterprise Bargaining Changes

From February 27, 2024, the Closing Loopholes No. 2 Act introduces amendments relating to enterprise bargaining, including:

• Franchisees with a common franchisor can choose to bargain for a single-enterprise agreement, with the result that allowing employees to vote as a single cohort instead of each workplace voting separately. The multi-enterprise agreement bargaining stream will also remain available;
• Changing to single-enterprise agreements before a multi-enterprise agreement expires is permitted provided certain requirements are met, including that the employee is better off overall under the new agreement; and
• In the event of a dispute during an enterprise agreement bargaining process, and where the requirements are satisfied, the Fair Work Commission (FWC) may make an intractable bargaining determination to resolve the disputes, ensuring the outcome provided is no less favourable to employees than the existing enterprise agreement.

Entry Permits and Delegates Rights

From July 1, 2024, the FWC can grant an exemption certificate waiving the 24-hour notice period for an entry permit, if the FWC is satisfied of a suspected underpayment and that an investigation may be hindered by the advance notice. Conditions can be imposed on exemption certificates if misused (in addition to revocation or suspension).

Additionally, terms relating to delegates rights, such as reasonable communication with members, will be included in modern awards and enterprise agreements.

Penalties

From February 27, 2024, the amendments increase penalties and change the concept of ‘serious contravention’.

A ‘serious contravention’ now occurs if a person knowingly contravened the provision or was reckless as to whether the contravention of the provision would occur. It is no longer required for the contravention to be part of a systematic pattern of conduct.

Casual Employment

Casual Definition

From August 26, 2024, the definition of ‘casual employee’ will change. The new definition considers the totality of the employment relationship, rather than solely the terms of the initial offer and acceptance of employment. This is a significant shift from the current definition and precedent set by the High Court in the WorkPac v Rossato [2021] HCA 23.

Under the new definition, an employee will be casual employee if:

• The employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work; and
• The employee would be entitled to a casual loading or a specific rate of pay for casual employees, either under an industrial instrument or an employment contract.

Assessing whether there is a firm advance commitment to continuing an indefinite work includes consideration of:

• The real substance, practical reality, and true nature of the employment relationship;
• Whether there is an inability of the employer to offer work or not, or an inability of the employee to accept or reject work (and whether this occurs in practice);
• Whether, having regard to the nature of the employer’s enterprise, there will likely be future availability of continuing work usually performed by the employee;
• Whether permanent employees perform the same kind of work; and
• Whether there is a regular pattern of work for the employee.

A firm advance commitment can be in the form of a contract or a mutual understanding or expectation.

Employers are prohibited from dismissing and re-engaging employees to perform the same (or substantially the same) work as casuals and from making false statements to persuade non-casual or former employees to work as casuals. These provisions carry civil penalties.

Employees engaged as casual employees remain so until a specified event occurs (e.g. they transition to permanent employment under the casual conversion provisions or otherwise accept a permanent employment offer).

Casual Conversion

An employee can notify their employer in writing if they believe they are no longer a casual employee after six months of employment (or 12 months for small businesses).

The employer must consult with the employee and respond within 21 days. The FWC can resolve disputes in this area.

CEIS

Currently, casual employees must receive a Casual Employment Information Statement (CEIS) on commencing employment.

From August 26, 2024, casual employees, except for those in small businesses, must also receive a CEIS six months after commencing employment and every 12 months thereafter.

Employment Definition

From August 26, 2024 (or earlier proclamation), whether a person is an ‘employee’ or ‘employer’ for the purpose of the Act will be determined by ascertaining the ‘real substance, practical reality and true nature of the relationship’ between the parties.

This assessment will consider the totality of the relationship including the contract terms governing the relationship and other factors relating to the employment relationship, including how the contract is performed in practice.

The intention of this change is to return to the ‘multi-factorial’ assessment applied by courts and tribunals before the High Court of Australia’s decisions in February 2022 in CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2.

Individuals earning above the contractor high-income threshold can give notice to opt out, which can be revoked by the individual.

Right to Disconnect

From August 24, 2024 (August 24, 2025 for a small business), employees may refuse to monitor, read, or respond to contact or attempted contact from their employer (or a third party where the contact or attempted contact relates to their work) outside the employee’s working hours, unless such refusal is deemed unreasonable.

Factors to be considered include the reason for the contact, how it is made and level of disruption, the employee’s role and responsibility, compensation for availability and personal circumstances, such as family or caring responsibilities. It is unreasonable to refuse contact required under a Federal, State or Territory law.

The employer and the employee must attempt to resolve any right to disconnect dispute. If unresolved, the FWC has authority to issue orders preventing unreasonable out-of-hours contact.

Other Reforms

This article contains a brief summary of some of the key proposed changes. However, the Closing Loopholes No. 2 Act contains a range of other proposed changes including in relation to independent contractors in the road transport industry and employee-like workers performing digital platform work (gig economy). For further advice, contact Employer Assist.

Takeaways

The key takeaways are:

• Be mindful of amendments to the Fair Work Act and consider if your business is complying;
• Consider if current casual employees will come within the new casual employment definition;
• Consider if independent contractors would be ‘employees’ under the new interpretative principle for ‘employer’ and ‘employee’;
• Consider current practices for compliance with the right to disconnect; and
• Review and adjust policies, contracts and practices for compliance with the above.

Staying informed and proactive will help your business smoothly transition to these new requirements.

Member Service

Employer Assist provides advice on all aspects of employment law. Please contact Employer Assist on (07) 3376 6266 or hvia@employerassist.com.au if you have any questions relating to this article or to discuss any employment issues that arise in your business.

This article is intended for information purposes only and should not be regarded as legal advice. Please contact Employer Assist for advice.

Liability limited by a scheme approved under professional standards legislation.