Attwood Marshall Lawyers Commercial Litigation Senior Associate Jade Carlson explores Australia’s recent employment law reforms under the “Closing Loopholes” Bill, which aims to enhance workplace conditions and safeguard workers from discrimination and underpayment.
A new set of employment laws has come into effect to improve workplaces across Australia and enhance protection and empowerment of staff, with more changes due to roll out later in the year.
The Department of Employment and Workplace Relations introduced the new legislation to address critical loopholes in the existing Fair Work Act. Some of the changes include better protecting workers who are victims of domestic and family violence from discrimination, safeguarding redundancy payments for those working for larger businesses that downsized due to insolvency, and introducing offences for the deliberate underpayment of staff and industrial manslaughter.
The reforms are part of legislation fittingly known as the “Closing Loopholes” Bill after businesses were found to be shirking their responsibilities and exploiting ambiguities in the existing laws to the detriment of their workers.
At the end of last year, the Senate voted to divide the Bill into two parts, which allowed some of the less controversial – though no less impactful – changes to pass through Parliament.
Here, we look deeper at some of the most significant amendments and what to expect from the government’s reform agenda.
The Senate approved the first set of reforms – taking the form of the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Act) – on 7 December 2023, and several rule changes are now already in place.
Redundancy pay in small businesses
People who lose their jobs because their company goes bankrupt are now eligible for redundancy pay, even if their company reverts to a small business with fewer than 15 employees. The change addresses a gap in the law where large business employers avoided making redundancy payouts by downsizing and fitting into the exempt small business category.
Imagine a restaurant with 20 employees is insolvent and terminates employment of ten employees. Under the old rules, the employees would not be eligible for redundancy pay because the remaining 10 employees meant the restaurant was classified as a small business. Now, those 10 fired employees would get redundancy pay.
The changes will ensure that employees do not miss out on redundancy pay under the National Employment Standards, which they would have otherwise been entitled to, had the company not downsized due to insolvency.
It is a step towards fairer treatment for employees caught in unfortunate circumstances. It also protects staff who are kept on to help with the insolvency process and subsequently let go.
Under the changes, it is now unlawful for an employer to dismiss or refuse to hire an employee because that individual has been, or is being, subjected to family and domestic violence.
“Subjection to family and domestic violence” has been added to the list of protected attributes under the anti-discrimination provisions of the Fair Work Act 2009.
This means that employers cannot include in their agreements or awards any terms that discriminate against somebody because they have been subjected to family and domestic violence.
The change comes after the Australian government recently stepped up its focus on the treatment of victims, by introducing ten days of paid family and domestic violence leave in the Fair Work laws.
Criminalising wage theft
The Act also includes a new provision to criminalise the intentional underpayment of wages. If an employer is found to have intentionally underpaid their employees, including by not meeting the required superannuation contributions, they will face a maximum of 10 years imprisonment and a fine that is three times the amount of the underpayment. If the court cannot determine the amount, it can hit individuals with a maximum fine of $1.56 million and body corporates $7.82 million.
Cooperation agreements may be available when offences are self-reported, and small businesses who have inadvertently underpaid a worker by honest mistake or miscalculation will not be caught out by the legislative changes so long as they can show they have tried to comply with their obligations since discovering the oversight.
The Act has given the Fair Work Ombudsman the power to investigate any suspected underpayment of staff and refer matters to the Commonwealth Director of Public Prosecutions or the Australian Federal Police.
Other changes include:
- Closing loopholes in labour-hire arrangements so that employees or unions can apply to the Fair Work Commission for regulated orders that set out the rates of pay for employees that work under a labour-hire arrangement, ensuring they are entitled to payment that is at least what they would have received under the host’s enterprise agreement (also known as “same job, same pay orders”);
- Enhancing the rights of a “workplace delegate” (i.e. the union representative in the workplace) and changing the attendance requirements for conciliation conferences;
- Easing the entry of Health and Safety Representatives into workplaces;
- Amending the Asbestos Safety and Eradication Agency Act 2013 to include specific references to silica (bringing it into line with asbestos);
- Amending the Safety Rehabilitation and Compensation Act 1988 to better support first responders with post-traumatic stress disorder; and
- Amending the Work Health and Safety Act 2011 (Cth) to introduce the offence of industrial manslaughter.
When do the new provisions come into force?
Since 15 December 2023, the following provisions have been in force:
- Small business redundancy exemption;
- Protections for those subject to family and domestic violence;
- Regulated labour-hire arrangements;
- Workplace delegates’ rights;
- Amendments relating to compulsory conciliation conferences in protection action ballot matters; and
- Assisting the right of entry of health and safety representatives (although this will be reviewed after nine months).
The changes requiring workplace awards, agreements and determinations to include a delegates’ rights term will commence on 1 July 2024.
The earliest date for regulated labour-hire arrangement orders to come into force is 1 November 2024.
The criminalisation of intentional underpayment commences on 1 January 2025. Charges can only be brought for underpayments that occur after that date.
There should be no doubt that these changes will be significant for employers, who will need to ensure their business can respond and comply with the new requirements.
Employees should also ensure they are kept abreast of these changes. Hence, they are aware of their rights in the workplace and can seek legal assistance if they feel these are being violated.
Keep an eye out for the Voluntary Small Business Wage Compliance Code, which the government will develop in coordination with specialist employment groups. The criminalisation of wage theft cannot become an offence without it.
The second Bill – the Fair Work Legislation Amendment (Closing Loopholes No. 2) Bill 2023 – is still before Parliament.
The government has left the thornier aspects of the reform package to this second Bill, such as extending the powers of the Fair Work Commission, giving workers the right to challenge unfair contract terms, and changing policies to better benefit casual workers.
Indeed, this second Bill is expected to include drastic changes to the rights of individuals who work in the gig economy and the road transport industry, as well as the process for casual employees’ transferring to permanent employment.
The Senate should debate these outstanding measures in early 2024.
Attwood Marshall Lawyers – helping employers and employees resolve disputes effectively
Employees often encounter unfair and unjust behaviour in the workplace and do not know where to turn when their superiors or workplace do not provide the support or resolution processes they require.
We have a dedicated team of employment lawyers at Attwood Marshall Lawyers who can help individuals understand their rights and how to resolve disputes with employers. We understand the sensitive nature of these matters and are here to support people through these challenging times.
We can also advise employers about disputes, helping resolve allegations that arise from their employees. Resolving disputes effectively reduces any interruption to business operations and helps all parties move on as quickly as possible.
If you are involved in an employment dispute and would like to have a confidential discussion about something that you have experienced in the workplace, please get in touch with our Commercial Litigation Department Manager, Amanda Heather, on direct line 07 5506 8245, email email@example.com or free call 1800 621 071.