07 Mar HR LAW NEWSLETTER – FEBRUARY 2024

Welcome to the February 2024 HR Law Newsletter.  It has been a busy start to the year in the workplace relations space with the passing of the Fair Work Legislation Amendment Closing Loopholes No. 2 Act 2024 (“the CL Act”).  This month, we provide an overview of the key changes from the CL Act, including what the changes mean for employers and important upcoming dates. 

CLOSING LOOPHOLES NO. 2 ACT

On 26 February 2024, the CL Act received Royal Assent.  The passing of the CL Act has introduced the second part of reforms under the Closing Loopholes Legislation.  The first portion of reforms was introduced under the The Fair Work Legislation Amendment (Closing Loopholes) Act 2023, which received royal assent on 14 December 2023.  To read more about the changes under the Closing Loopholes Legislation, access our December 2023 Newsletter here.

Key Legislative Changes

Some of the changes under the CL Act include:

• changes to the definition of a casual employee and changes to casual conversion;

• changes to the definition of employment;

• changes to intractable bargaining provisions;

• changes to enterprise bargaining provisions relating to multi-enterprise agreements and franchisees;

• a process for the Commission to make model terms for enterprise agreements;

• powers relating to “employee-like” workers performing digital platform work in the gig economy including:
  • the ability to make minimum standards orders; and
  • dealing with employee-like worker disputes about unfair deactivation from a digital platform;

• functions relating to a right to disconnect including:
  • a new dispute function; and
  • a process for the Commission to make a model term for awards;

• an “unfair contracts” dispute resolution function for independent contractors (below the contractor high-income threshold); and

• workplace delegates’ rights for regulated workers.

We discuss some of these changes in detail below.

Definition of Employment

New definitions of “employee” and “employer” will be added into the Fair Work Act 2009 (Cth) (“FW Act”). As outlined in section 15AA of the FW Act, in determining whether a worker is an employee or an independent contractor, consideration of the real substance, practical reality and true nature of the relationship between the employer and the individual must be considered.  In ascertaining this:

• the totality of the relationship between the employer and the individual must be considered; and

• in considering the totality of the relationship between the employer and the individual, regard must be had not only to the terms of the contract governing the relationship, but also to other factors relating to the totality of the relationship including, but not limited to, how the contract is performed in practice.

Notably, this section was enacted as a response to the decisions of the High Court of Australia in CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2.  To read our case note, click here.

Importantly, the CL Act inserts a new section 15AB in the FW Act, which provides a mechanism for an individual who would be considered an employee under the new definition in section 15AA to “opt out” of being classified as an employee.  To be eligible to opt out, the employee’s earnings must exceed the “contractor high-income threshold”.  Currently, there is no prescribed contractor high-income threshold, although this will be prescribed by the Fair Work Regulations 2009 (Cth) at a later date.

The opt out mechanism may be exercised by either an individual or the employer of the individual by providing a written opt out notice, which must include a statement of earnings. An individual can revoke an opt out notice, although each individual may only give one opt out notice in respect of a particular relationship.

The new definition of employment will come into effect on 27 August 2024.

Casual employees

Amendment to definition of a “casual employee”

Replacing s15A of the FW Act, the new definition of a casual employee will be met if:

• the casual employment relationship is characterised by the absence of a firm advance commitment to continuing and indefinite work; and

• the casual employee is entitled to casual loading or rate of pay under the relevant fair work instrument or employment contract.

The amendment to the definition will now allow a more practical approach when considering if an employee has been engaged as a casual employee.  When assessing whether there is a firm advance commitment, the following is to be considered:

• on the basis of the real substance, the practical reality and true nature of the employment relationship;

• that a firm advance commitment can be in the form of the contract of employment or, in addition to the terms of that contract, in the form of a mutual understanding or expectation between the employer and employee not rising to the level of a term of the contract (or to a variation of any such term); and

• having regard to, but not limited to, the following considerations (which may indicate the presence, rather than an absence, of such a commitment):
  • whether there is an inability of the employer to elect to offer, or not offer, work or an inability of the employee to elect to accept or reject work (and whether this occurs in practice);
  • whether, having regard to the nature of the employer’s enterprise, it is reasonably likely that there will be future availability of continuing work in that enterprise of the kind usually performed by the employee;
  • whether there are full-time employees or part-time employees performing the same kind of work in the employer’s enterprise that is usually performed by the employee; and
  • whether there is a regular pattern of work for the employee.

Changes to the Casual Conversion Process

A new employee choice provision has been included, which will replace the current conversion process. Under the new changes, casual employees are able to notify their employers in writing of a desire to change their employment status to either part-time or full-time.  Casual employees are eligible to apply for this conversion after a period of employment of six months, or 12 months for small businesses (and not subject to dispute regarding their casual employment).

Employers will be required to respond to this request within 21 days following the requirements set out by the FW Act. 

Changes to Employer Obligations to Casual Employees

Employers have previously been obligated to provide casual employees with a Casual Employment Information Statement (“CEIS”).  Following the amendments, employers are now required to provide casual employees with a CEIS on a more frequent basis, including:

• before or at the time the employee commences their employment;

• after six months (excluding small business employers);

• after 12 months; and

• after every 12 month period following the employee’s commencement of employment.

The provisions relating to casual employees will take effect on 27 August 2024, although a transitional period will apply for the employee choice pathway provisions.

Right to Disconnect

Employees now have the right to refuse to monitor, read or respond to contact (or attempted contact) from an employer outside of their working hours – unless that refusal is unreasonable.

As a workplace right, employees have more control over outside of working hours contact.  If bringing a general protections claim, employees are now able to rely on this right to disconnect provision.  In addition, this term will be added to all modern awards.

What is unreasonable?

The Fair Work Commission will consider disputes in determining whether a refusal of contact is unreasonable.  In assessing whether a refusal is unreasonable, the following will be considered:

• the reason for the contact or attempted contact;

• the method by which the contact was made and the level of disruption the contact or attempted contact causes the employee;

• the extent to which the employee is compensated;  

• the nature of the employee’s role and level of responsibility; and

• the personal circumstances of the employee (including family and/or caring responsibilities).

The provisions relating to the right to disconnect will take effect on 27 August 2024.

Intractable Bargaining Workplace Determinations

Under the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022, the intractable bargaining regime was introduced.  These changes increased the arbitration powers of the Fair Work Commission for certain bargaining disputes.

Following these recent amendments, the CL Act stipulates that if the Fair Work Commission make a workplace determination, other than in respect of wage increases and agreed terms, the workplace determination must not be less favourable to employees or employee organisations than corresponding terms in an existing relevant enterprise agreement. The definition of “agreed term” has also been updated under the CL Act.

The intractable bargaining workplace determinations provision took effect on 27 February 2024.

Resources

To view the timeline of these additional changes, click here.

To view the CL Act, click here.

These amendments and updates will have a significant impact on the operation of workplace law throughout Australia.  We recommend that you review your processes and policies to comply with these new legislative changes.

HR LAW ANNOUNCEMENTS

2024 Doyle’s Guide

Jill Hignett, Managing Partner of HR Law and Accredited Specialist – Workplace Relations, has been listed in the 2024 Doyle’s Guide for Queensland Employer & WHS Law rankings as a recommended employment lawyer (Employer Representation).  This exclusive list is for solicitors practising within the areas of employment and industrial relations law in Queensland whose practice has a strong employer representation focus and are identified by Queensland employment law solicitors for their expertise and abilities in these areas.  Jill Hignett has extensive experience and knowledge in all areas of workplace law and assists numerous large, medium and small employer clients at State, Federal and International levels. 

HR Law has also been recognised in the 2024 Doyle’s Guide as a recommended employer-focused Queensland employment law firm practising within the areas of employment and industrial relations whose practice has a strong employer representation focus.  HR Law provides strategic, practical and commercially realistic workplace relations legal advice to employers.

The focus in this specialist field of law enables Jill Hignett and the HR Law team to offer clients cutting edge strategic advice based upon the teams’ extensive experience and knowledge.  Get in touch with Jill Hignett and the HR Law team for all of your workplace relations needs. 

To access the list, click here.

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The content of this newsletter is intended to provide a general guide to the subject matter.  Specialist advice should be sought about your specific circumstances.