The Fair Work Ombudsman is encouraging workplace participants to get educated and compliant with the further changes to workplace laws, or risk facing the new significantly higher penalties.
The second set of ‘Closing Loopholes’ changes have now received Royal Assent after passing the Parliament in February, and follow the Australian Government’s first ‘Closing Loopholes’ changes which passed the Parliament in December.
The changes in the second Closing Loopholes laws take effect at various dates across this year and into next year, with many changes already in effect. See the timeline of changes.
Fair Work Ombudsman Anna Booth urged those across workplaces to educate themselves on the new laws, which cover gig work, casual employment and the right to disconnect among many other areas.
“Employers, employees and independent contractors need to understand the changes, which create new or changed responsibilities and rights in a range of areas,” Ms Booth said.
“We offer free information and advice on the various changes to help all workplace participants.
“The changes substantially increase the penalties which a court can order for non-compliance with a range of workplace laws, by up to five times for non-small business employers.
“This sends a clear message and expectation – employers must invest the time and resources to meet their new legal obligations. We are here to help them get it right.”
Changes to the definition of casual employment and employment
Commencing on 26 August, definition changes mean an employee is a casual only when:
- 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; and
- the employee is entitled to be paid a casual loading or a specific pay rate for casuals.
A new pathway will also replace the existing rules for eligible casual employees to change to permanent employment if they want to.
From no later than 26 August, there will be new definitions of employee and employer under the Fair Work Act. In determining whether an employment relationship exists, the totality of the relationship must be considered, including the real substance, practical reality and true nature of the working relationship.
Increases to maximum civil penalties
New maximum penalties that courts can impose for certain contraventions are now in effect. These only apply to employers who aren’t individuals or small business employers.
These maximum penalties have increased by five times, to a total of $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 (previously $939,000).
These increased maximum penalties do not apply to individuals and small businesses – generally, maximum penalties for these employers are $18,780 per contravention for an individual and $93,900 for a company.
The maximum civil penalties available for non-compliance with a Compliance Notice have doubled for all employers of any size, to a total of $18,780 per contravention for an individual and $93,900 per contravention for a company.
In addition, from no earlier than 1 January 2025, penalties for underpayment-related contraventions by non-small businesses can be three-times the amount of the underpayment if an applicant chooses this method.
What constitutes a serious contravention under the Fair Work Act has now changed to one done either knowingly or recklessly (it is no longer required to prove a breach was done knowingly and systematically).
Creation of minimum standards for gig workers
Also from no later than 26 August, there will be a new framework for protecting the interests of certain workers in the gig economy, who are called “employee-like workers”. These workers perform work through a digital labour platform and may have low bargaining power, low pay and little say in how they perform their work.
The Fair Work Commission – a separate government organisation from the FWO – will be able to set minimum standards by making orders, and will be able to make guidelines. They will also be able to deal with disputes on the unfair deactivation of an employee-like worker from a digital labour platform.
Unions that are registered organisations representing employee-like workers will be able to make collective agreements with digital labour platform operators.
Independent contractors who earn less than the contractor high income threshold, including employee-like workers, will be able to apply to the Commission if they think their services contract contains unfair terms. The contractor high income threshold is yet to be set.
Similar rules and processes will also apply to independent contractors in the road transport industry.
Right to disconnect
In 18 months for small business employers and in six months (on 26 August) for other employers, employees will have the right to refuse to monitor, read or respond to contact or attempted contact from an employer or third party outside of their working hours, unless their refusal is unreasonable.
Whether a refusal is unreasonable will depend on factors including the reason for the contact, level of disruption, any compensation the employee receives to be available or work additional hours, and the employee’s role, responsibilities and circumstances. Disputes can be taken to the Fair Work Commission if they can’t be resolved at the workplace level. The Commission will be able to make orders or otherwise deal with the dispute.
There are a range of other changes to the Fair Work Act as a result of these latest laws – for more information see our Closing Loopholes: Additional Fair Work Act changes webpage. You can also subscribe to updates via the FWO’s subscription centre.
Small business employers can access our Employer Advisory Service for free tailored written advice about pay and conditions.
