Closing Loopholes Laws – Employment Law

The Australian Government is making some changes to the Fair Work Act 2009 (Cth) (the Act) in an attempt to close a number of loopholes. These have, or will, come into effect between December 2023 and August 2025. Below are a summary of some of these changes:

Right to disconnect

Eligible employees will have a ‘right to disconnect’ beyond their regular work hours.

This means employees can decline communication outside their designated work hours, unless such refusal is deemed unreasonable. This includes refusing to monitor, read, or respond to messages from employers or third parties.

This right extends to attempts at communication outside an employee’s regular work hours.

Several factors must be taken into account to determine the reasonableness of an employee’s refusal, including:

• The purpose of the communication
• Whether the employee is compensated for being available during non-working hours or for working additional hours beyond their regular schedule
• The nature of the employee’s role and level of responsibility
• The employee’s personal circumstances, such as familial or caregiving responsibilities
• Other relevant factors may also apply

Disputes regarding an employee’s right to disconnect should initially be addressed and resolved at the workplace level. If resolution isn’t feasible at this level, either party can escalate the matter to the Fair Work Commission (the Commission) for resolution.

Moreover, the right to disconnect will be recognised as a workplace right under general protection laws, safeguarding all employees under the Act.

Criminalising underpayment of wages

Deliberately withholding wages by employers will be classified as a criminal offence.

Employers will commit a criminal offence if:

• They are obligated to remunerate an employee (e.g., wages) or make payments on behalf of or for the employee’s benefit (e.g., superannuation) under the Act or any industrial agreement; and
• They purposefully conduct themselves in a manner that leads to their failure to pay those amounts to, or for, the employee by their due date.

New casual employment definition

The Act will incorporate a revised definition of ‘casual employee’.

According to this definition, an individual is considered a casual employee only if:

• There is no established, firm commitment to ongoing and indefinite employment, considering various factors such as the actual nature, practical circumstances, and true essence of the employment arrangement.
• They are entitled to receive a casual loading, or a specific pay rate designated for casual employees.

Employees initially engaged as casuals will retain this status until their employment situation undergoes a change, which may occur through:

• A conversion process or an order from the Fair Work Commission.
• Acceptance of an alternative employment offer, and commencement of work based on that arrangement.

Labour Hire Changes

Workers, trade unions, and host companies have the option to petition the Commission for a regulated labor hire arrangement order (an order)

Under the terms of an order, labour hire personnel employed by a specific host organisation must be remunerated at least at the same rate they would receive under the host’s enterprise agreement (or any other pertinent workplace document). This designated rate is termed a ‘protected pay rate’.

Independent contractor changes

A fresh definition aimed at clarifying the concepts of ’employee’ and ’employer’.

To distinguish between an employee and an independent contractor, the following criteria will be taken into consideration:

• The genuine essence, practical dynamics, and fundamental essence of the work arrangement. This criterion also extends to determining whether an individual serves as an employer or a principal for outworkers.
• All aspects of the working relationship between the involved parties, encompassing the contractual terms and the actual implementation of the agreement. This marks a departure from the existing assessment, which predominantly focuses on contractual terms.

Application of the new definition might:

• Lead to the categorisation of certain work relationships in a different manner.
• Imply varied entitlements and responsibilities for those involved. This divergence might arise when the stipulations of a written contract don’t align with other contextual factors, such as the practical execution of the agreement.

However, the new definition will not be applicable to certain individuals. This category includes individuals who, if categorised as employees or employers, would only fall under the national workplace relations system due to their state’s transfer of authority to the Commonwealth for the enactment of workplace regulations.

Furthermore, the introduction of the new definition will not alter the interpretation of ’employee’ and ’employer’ as defined in other existing legislations relating to employment, such as:

• Tax regulations
• Superannuation laws
• Workers’ compensation statutes.

If you would like any assistance with employment law or have any questions, please contact our team today.