Additional Fair Work Act Changes

Casual employment

The existing definition of ‘casual employee’ in the Fair Work Act will be replaced with a new one.

The new definition says that an employee is a casual only if:

• there isn’t a firm advance commitment to continuing and indefinite work, factoring in the real substance, practical reality and true nature of the employment relationship
• the employee is entitled to be paid a casual loading or a specific pay rate for casuals.
• A new pathway will replace the existing rules for eligible employees to change to permanent employment if they want to.

There will be new rules against:

• dismissing or threatening to dismiss workers to engage them as a casual
• making certain misrepresentations in relation to casual employment.The Australian Government has made further workplace laws as part of its ‘Closing Loopholes’ changes.

These build on initial changes that were introduced in December 2023.

Right to disconnect

• Eligible employees will be given a new ‘right to disconnect’ outside of work hours.
• Employees will have the right to refuse to monitor, read or respond to contact (or attempted contact) from an employer or a third party outside their working hours, unless that refusal is unreasonable.
• Rules will apply when determining whether an employee’s refusal is unreasonable or not.
• Employers and employees will be able to go to the Commission to seek orders on this right.

Definition of employment

• New definitions of ’employee’ and ’employer’ will be added into the Fair Work Act.
• When determining whether a worker is an employee or an independent contractor, consideration must be given to the:
• real substance, practical reality and true nature of the relationship
• whole relationship between the parties, including the terms of the contract and how the contract is performed in practice.
• There will be some exceptions to the application of the new definitions. This includes that certain workers will be able to ‘opt out’ of being employees through a notification process if they earn more than the contractor high income threshold. The contractor high income threshold hasn’t been set yet.

Definition of employment

• The Commission will be able to deal with disputes about unfair terms in a contract that an independent contractor is a party to (known as a services contract). This is provided that the independent contractor earns less than the contractor high income threshold. The contractor high income threshold hasn’t been set yet.
• The Independent Contractors Act will also be updated to provide that an independent contractor can only apply for review of a harsh or unfair services contract if they earn above the contractor high income threshold.

Sham contracting

• There are changes to the defence to misrepresenting employment as an independent contractor arrangement. This is known as ‘sham contracting’.
• The current test that an employer didn’t know and wasn’t ‘reckless’ will change to a test of ‘reasonably believed’ – meaning the employer thought it was an independent contracting arrangement (with certain factors applying).

Right of entry exemption certificates

• A registered organisation (such as a union) will be able to get an exemption certificate from the Commission to waive the 24 hours’ notice requirement for entry to investigate suspected underpayments. This applies where advance notice would interfere with the investigation.
• There are new powers for the Commission to impose conditions on entry permits and exemption certificates.

Minimum standards for ’employee-like’ workers

• There is a new framework for protecting the interests of certain workers in the gig economy.
• These workers are called ’employee-like workers’ and are independent contractors who perform work through a digital labour platform and who have low bargaining power, low pay or little say in how they perform their work.
• The Commission will be able to set fair minimum standards for these ’employee-like’ workers by making minimum standards orders or guidelines. They will also be able to deal with disputes on unfair deactivation of an employee-like worker from a digital labour platform.