Closing Loopholes Bill Summary
Facts every employer needs to know
On Thursday 8th February, the Federal Government passed workplace relations reforms through the Senate, with the reforms likely to pass through parliament at the end of February. With these reforms comes Amendments to the Fair work Act and the Work Health and Safety Act. The full set of fact sheets explaining each change is on the members login area of the website.
Small business Redundancy Provisions
If a non-small business employer downsizes due to bankruptcy or insolvency to a point where it becomes a small business employer, the employee will remain entitled to redundancy pay. To note the small business redundancy provisions do not apply to companies working under the Building and Construction General Onsite Award. (Effective from 15th December 2023)
Rules for labour hire workers
Employees, unions, and host employers can now apply to the FWC for a regulated labour hire arrangement order. These orders require the labour hire employer to pay their labour hire employees the same full rate of pay that employees under the host employer’s Enterprise Bargaining Agreement get paid. Small Business employers and employees working under a training arrangement such as apprentices are exempt from this scheme. Applications can be made now but any orders will not come into effect until November 2024.
Workplace delegates rights (Union Delegates)
Workplace delegates which are employees that have been appointed to represent members of an employee organisation in the workplace are granted specific additional rights and protections. These rights include the requirement of employers to allow delegates reasonable access to the workplace to communicate with members and prospective members about industrial issues as well as paid time during work to attend training. From July 2024, modern awards and new Enterprise Bargaining Agreements must include a term providing for workplace delegates rights.
Health and Safety representatives right of entry
Officials of a registered organisation assisting a health and safety representative are no longer required to hold a Fair Work Entry permit to enter workplaces to assist the HSR and will be entitled to specific powers and protection under the Fair work Act.
Strengthening Protections against discrimination
It is now unlawful for employers to take adverse action or discriminate against an employee or potential employee who has been subjected to family and domestic violence.
Commonwealth Industrial Manslaughter Offence
This bill makes industrial manslaughter a crime with individuals facing imprisonment for up to 25 years and body corporate fines up to $18 million. The changes to the Federal WHS laws will also increase maximum penalties to $15 million for offences involving reckless or criminally negligent breaches of WHS duties. This brings the Commonwealth Scheme in line with the States and Territories.
A person conducting a business will have committed industrial manslaughter if they have a health and safety duty, intentionally engaging in conduct that breaches the health and safety duty and conduct that causes the death of an individual. (Effective from 1st July 2024)
Changes to Casual employment
The existing definition explicitly requires the assessment of whether an employee is casual to be based only on the initial offer of employment. The proposed definition will allow consideration of the practical reality of what is going on in the workplace, not just what was in the employment contract on day one.
The existence of a regular pattern of work does not itself indicate a firm advance commitment to continuing and indefinite work. In fact, no single consideration is determinative of an employee being casual or not. Employees engaged as casual employees remain casual until an event occurs, underpinned by employee choice, to change their status. Employees who have worked for 6 months will be able to initiate a change from casual to permanent employment.
The right to disconnect
Employees will be afforded the right to refuse to monitor, read or respond to contact outside work hours from their employer or a third party, if that contact is work related and unless the refusal is unreasonable.
Unfair Contract Terms
This proposal would amend the Fair Work Act 2009 to establish a new low cost, flexible and informal jurisdiction in the Fair Work Commission (the Commission) for resolving disputes between independent contractors (below a high-income threshold) and principals about unfair contract terms in services contracts. The dispute must be about a term in the contract that, if the relationship were an employment relationship, would be a workplace relations matter.
Sham Contracting Arrangements
The proposed amendment will change the defence to misrepresenting employment as an independent contractor arrangement, known as ‘sham contracting’. Employers will only be able to successfully establish the defence if they can show that they reasonably believed the contract was a contract for services.
For civil contraventions related to underpayment (including sham contracting, unlawful job advertisements and employee records misconduct), maximum penalties will increase fivefold. Maximum penalties for these provisions will be the greater of:
- 300 penalty units ($93,900) for individuals (currently 60 penalty units or $18,780), or 1,500 penalty units ($469,500) for bodies corporate (currently 300 penalty units or $93,900)
- three times the amount of any associated underpayment, if the applicant seeks this kind of penalty.
For serious contraventions, maximum penalties will increase to the greater of:
- 3,000 penalty units ($939,000) for individuals (currently 600 penalty units or $187,800), or 15,000 penalty units ($4,695,000) for bodies corporate (currently 3,000 penalty units or $939,000)
- three times the amount of any associated underpayment, if the applicant seeks this kind of penalty.
Meaning of Employee and Employer
This change would mean a fairer test applies when determining whether a person is an employee or an independent contractor, or an employer or principal. It would mean the practical reality of the working relationship could be considered, not just the written terms of any contract governing that relationship.
Strengthening the rights of entry to investigate underpayments.
This proposed measure will amend the right of entry provisions of the Fair Work Act 2009 (the Act) to enhance the ability of permit holders to enter a workplace to investigate suspected wage underpayments.
Wage and Superannuation Theft
The deliberate and intentional delay and underpayment of superannuation, wages and allowances will be a criminal offence with a maximum penalty of 10 years in prison and fines of up to $8 million dollars.