On 4 September 2023, the Federal Government introduced to Parliament their third tranche of industrial relations changes via the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023. The Bill, which has been referred to a Senate enquiry due to report by February 2024, seeks to drastically change several industrial relations laws, including:
Casual Employees
Whilst the Federal Government is proposing to keep the characterisation of casual employment as being an absence of a firm advance commitment to continuing and indefinite work, they are seeking to change how this test will be assessed. The changes will mean:
- the employment relationship will be assessed on the real substance, practical reality and true nature of the employment relationship;
- a firm advance commitment can be in the form of a mutual understanding or expectation inferred from the conduct of the employer and employee;
- regard will be had to whether there is an inability of the employee to elect to accept or reject work and whether this occurs in practice;
- regard will be had to whether it is reasonably likely that there will be future availability of continuing work of the kind usually performed by the employee;
- regard will be had to whether there are permanent employees performing the same kind of work being performed by the employee;
- regard will be had to whether there is a regular pattern of hours, even if this pattern is not absolutely uniform and includes some fluctuation or variation over time.
Significant financial penalties are also proposed for employers that misrepresent to an employee that they are a casual employee. If charged with this offence, an employer would need to show that they reasonably believed that the employee met the requirements of a casual employee as above.
It is also proposed that casual employees have the right to notify their employer that they no longer meet the requirements of the casual employee definition, and seek to become permanent employees. In such circumstances, employers will need to respond to this notification in consultation with the employee and there will be limited grounds to reject an employee notification.
If these changes are passed, they will take effect from 1 July 2024.
Industrial Manslaughter
It is proposed that Commonwealth work health and safety legislation be amended, to commence in July 2024, to include an offence of industrial manslaughter which will apply in circumstances where:
A person conducting a business or undertaking (or an officer) breaches a health and safety duty by causing the death of an individual, and
The person was reckless or negligent as to whether the conduct would cause the death of an individual.
The maximum penalty for this proposed offence will be:
- 25 years imprisonment for individuals;
- $18 million for body corporates.
There are currently industrial manslaughter amendments working through South Australian Parliament which provide maximum penalties of 20 years for individuals and $18 million for body corporates.
Equally, the Northern Territory currently has industrial manslaughter laws in place similar to the proposed Commonwealth legislation. The maximum penalties available in the Northern Territory are 20 years for individuals and $11.5m for body corporates.
MTA will follow these changes closely to see how the proposed Commonwealth changes may result in amendments to the South Australian or Northern Territory legislation.
Wage Theft
The Federal Government proposes to make wage theft a criminal offence, to commence in January 2025. This is to target circumstances where employers deliberately underpay workers and is not intended to affect employers who make honest errors through their payroll. The proposed maximum penalties for wage theft will be:
- 10 years imprisonment;
- $7.8 million (or three times the amount that was underpaid).
The South Australian Government had previously indicated an intention to introduce similar laws in SA. Given the introduction of these laws by the Commonwealth, any changes to SA laws may now be unnecessary.
Finally, the Fair Work Ombudsman will prepare a “voluntary small business wage compliance code” which, if complied with, will result in a small business not being referred to for criminal prosecution in the event they fail to pay a required amount to an employee.
Minimum standards for ‘employee-like’ workers
The Federal Government wants to empower the Fair Work Commission to set minimum standards for ‘employee-like’ workers. These are people who perform work through a digital labour platform, such as food delivery and ride share. These changes are likely to commence in July 2024. It is not expected that these changes will affect MTA members, but we will continue to monitor these changes.
The Federal Government wishes to address situations where an employer brings in workers through a labour hire agreement and pays these workers less than the pay rates agreed to with their regular workers via enterprise agreements. If passed, these changes will require employers to pay a labour hire employee no less than the rate at which they would be paid under the host employer’s enterprise agreement if they were directly employed. The government anticipates this change to come into effect in November 2024.
The MTA will continue to update members on these changes as they progress through Federal Parliament. If you have any questions relating to these changes, please contact the MTA Workplace Relations Team on (08) 8291 2000 or email wr@mtasant.com.au
