Our Employment team discuss the new legislation that is coming into effect.
What are the key Fair Work “Closing Loopholes” changes taking effect from 26 August 2024, and how could they affect employers?
The Fair Work “Closing Loopholes” reforms introduce significant workplace changes, including a new right for employees to disconnect from work-related contact outside ordinary hours, updated definitions of casual employment and independent contractors, new protections for gig workers, enhanced rights for workplace delegates, and substantially higher penalties for breaches of workplace laws. Employers should review their employment contracts, workplace policies, and management practices to ensure compliance. Failure to adapt to the new laws could expose businesses to increased legal and financial risks.
Closing Loopholes Updates
Some of the ‘Closing Loopholes’ updates to the Fair Work Act 2009 (Act) come into effect on 26 August 2024[1]. We provide a summary of key aspects of these important updates below.
The right to disconnect
- Unless “the refusal is unreasonable”, an employee will have a new right to refuse to read & respond to emails, or to refuse attempted contact such as telephone calls from their employer outside of their working hours.
- Additionally, employees have a right to refuse to read and respond to work-related emails or work-related telephone messages from third parties outside their working hours unless the refusal is unreasonable.
- The rights to refuse to respond to work-related contact outside of an employee’s working hours are now a “workplace rights” which are protected under the General Protections provisions of the Act.
- The question of whether it may be reasonable to refuse after-hours contact will depend upon the circumstances of each case. The new amendments list a number of factors that must be taken into account, including –
- the reason for the contact or attempted contact;
- how the contact or attempted contact is made, and the level of disruption the contact or attempted contact causes the employee;
- the extent to which the employee is compensated to remain available or for additional work performed outside of ordinary hours of work.
- the nature of the employee’s role and the employee’s level of responsibility;
- the employee’s personal circumstances (including family or caring responsibilities).
- All awards will be required to now include a ‘right to disconnect term’.
- A dispute in relation to after-hours contact which is not resolved at a workplace level can be brought to the Fair Work Commission. The Commission can make orders and can determine whether an employee’s refusal to read or to respond to contact is reasonable. However, the Commission cannot make orders for the payment of money.
- Key employer takeaways in relation to the right to disconnect:
- Take reasonable steps to limit after hours contact with employees;
- Engage in consultation with employees to seek an understanding about when after hours contact may be acceptable;
- Provide training to supervisors on the right to disconnect; and
- Update workplace policies and employment contracts as needed.
New definition of casual employment
- The new definition of casual employment now requires an individual assessment of the “true nature” of an employment relationship.
- The new definition refers to a number of key indicators listed in the Act, the substance of which relate to whether or not there is a ‘firm advance commitment’ to ongoing and indefinite work based on a set pattern of work.
- The Act now also lists particular circumstances where an employee who has commenced employment as a casual employee will be considered to have become a permanent employee.
New ‘employee’ and ‘employer’ definitions
- The Act now contains new definitions that seek to reverse High Court decisions[2] that focussed on contractual terms in order to identify whether a person was an employee or an independent contractor.
- In determining whether an employment relationship exists, the “true nature” of the relationship must now be considered.
New gig worker protections
- Certain “gig” workers, such as uber drivers, will receive protections and will be deemed to be “employee-like workers”.
- The Fair Work Commission will be able to deal with work-related disputes and set minimum standards by making orders and will be able to make guidelines for these types of workers.
- Unions will now be able to make collective agreements with digital labour platform operators.
Workplace delegate rights
- New provisions apply to the way that a business may interact with Union workplace delegates.
Increases to maximum civil penalties
- Maximum penalties have increased to $469,500 per contravention for a company.
- For serious contraventions, maximum penalties have also increased by five times to $4,695,000 for a company.
Should you wish to discuss these updates and how they will affect your business, please contact the HHG Legal Group.
[1] Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024.
[2] CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2