Fair Work Legislation Amendment (Closing Loopholes) Bill 2023

13 September 2023

On Monday 4 September 2023, the Federal Government introduced the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 into Parliament. The Bill aims to ‘close loopholes’ in the Fair Work Act 2009 (Cth) with significant reforms to Australia’s workplace health and safety laws.

The Bill proposes the following key changes to workplace relations issues and sets out new protections for employees:

The Definition of Casual Employment

A new objective test for the meaning of a ‘casual employee’, based on the terms of the contract and the “real substance, practical reality and true nature of the employment relationship”. Classifying someone as a casual employee would be assessed and characterised by “an absence of a firm advance commitment to continuing and indefinite work”, which would include the basis of ongoing work that is performed on a regular basis over a sufficient period of time.

Changes to Casual Conversion

Casual employees would be able to request a change to full-time or part-time employment after working for their employer for 6 months (or 12 months for small business employers). Casual employees would be able to exercise this right when they want to become a permanent employee and believe that they are no longer a casual employee at the time of making the request to their employer.

The Definition of Employment

New statutory definitions for the meaning of an ‘employee’ and an ‘employer’, which would be assessed by the totality of the relationship between the parties. The employment relationship would be assessed beyond the contractual rights and obligations of the parties and would be characterised through a ‘multi-factorial’ assessment, which examines the manner of performance in the employment contract.

Minimum Conditions for Gig Workers

The establishment of minimum working conditions for independent contractors who are either:

  • “Employee-like” workers performing digital platform work (such as ride-share drivers and food delivery drivers); or
  • Engaged in the Road Transport Industry.

“Employee-like” workers performing digital platform would benefit from a new “unfair deactivation” jurisdiction, which would provide protection from being unfairly deactivated from a digital labour platform. Similarly, independent contractors performing work in the Road Transport Industry would be protected from “unfair termination”. These workers would be able to seek reactivation or reinstatement under these changes.

Labour Hire Arrangements

In relation to businesses that pay employees under an Enterprise Bargaining Agreement (EBA), labour hire workers would be required to be paid the same as workers who are employed under the EBA. This aims to protect labour hire workers from being paid less than those who are employed directly by a business. Small businesses would be exempt from this.

Unfair Contracts Terms (Sham Arrangements)

Currently, the Fair Work Act 2009 (Cth) prohibits employees from misrepresenting an employment contract as an independent contracting arrangement. The Bill proposes to change the defence to sham contracting from a test of ‘recklnessness’ to one of ‘reasonable belief’.

General protections against sham arrangements would extend to casual employment arrangements too.

Protections against Discrimination

The Bill proposes to establish a new protected attribute to provide protection against discrimination for employees who have been, or continue to be, subjected to family and domestic violence.

New Criminal Offences

A new criminal offence for wage theft, where employers who are caught deliberately underpaying workers could face penalties of up to 10 years imprisonment and fines of up to $8 million. Employers who unintentionally underpay or pay incorrect amounts in error would not be captured under this criminal offence. Industrial manslaughter would also be introduced as a Commonwealth offence under the changes.

Rights of Unions and Workplace Delegates

Unions would be able to apply to the Fair Work Commission to remove the requirement to provide 24 hours’ notice to inspect employee wage records where there is a reasonable suspicion of an underpayment. Employers would be required to pay workplace delegates for training and time spent communicating with employees that are current or prospective union members.

Our Employment and Safety team are also providing short video updates regarding Fair Work Legislation Amendments on LinkedIn here.

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