In response to evolving workplace dynamics, the Australian government introduced the Closing the Loopholes Act. This legislation, which has been delivered in two phases, aims to address gaps in existing legislation and enhance protections for workers.
Both phases of the legislation have been a focal point of discussion and scrutiny within the legal and business communities. These reforms, implemented to address immediate concerns and gaps in worker protection, have significant implications for employers across various industries. The Phase One reforms are set out below.
Wage Theft and Underpayment
A primary focus of phase one is tackling wage theft and underpayment. This legislation criminalises intentional theft of wages and superannuation and empowers regulatory bodies to take decisive action against businesses engaging in such practices, reinforcing the importance of fair remuneration for all workers. Intentional underpayments of wages and superannuation will have heavy penalties. This change will take effect from 1 January 2025.
Labour Hire
The legislation introduces a new ‘same job, same pay’ provision, allowing the Fair Work Commission to make an order that employees working under a labour-hire arrangement are paid no less than the rate of pay under the host employer’s enterprise agreement. These provisions will come into effect on 1 November 2024.
Small Business Redundancy Exemption
The legislation closes the loophole in which large employers claim the small business redundancy exemption under the Fair Work Act 2009 (Cth) in circumstances where they have incrementally downsized due to insolvency. Under the new rules, employees will be entitled to redundancy pay if they are made redundant in connection with bankruptcy or liquidation, and the employer only qualified as a ‘small business’ at the time because they had recently terminated other employees.
New Protections against Adverse Action
The legislation will strengthen protections by including ‘subjection to family and domestic violence’ in the list of protected attributes in the Fair Work Act. These changes (which are now in force) make it unlawful to take adverse action against an employee because they have been or are being subjected to domestic or family violence.
Work Health and Safety (WHS) Protections
The legislation introduces a new Post Traumatic Stress Disorder (PTSD) presumption that if any first responder covered by the Safety, Rehabilitation and Compensation Act 1988 is diagnosed with PTSD it will be assumed, for worker’s compensation purposes, that their employment significantly contributed to their condition. This change is now in force.
The Asbestos Safety and Eradication Agency will now cover silica and rename itself as the Asbestos and Silica Safety and Eradication Agency, and a Silica National Strategic Plan will also be created.
Manslaughter
Currently Queensland, Victoria, the Northern Territory and the Australian Capital Territory have industrial manslaughter laws. The Work Health and Safety Act 2011 (Cth) will now be amended to criminalise the offence of industrial manslaughter at the Commonwealth level. The new legislation will also increase penalties for reckless or negligent conduct which causes the death of a worker.
Industrial Relations
Recognising the importance of collective bargaining in achieving fair employment conditions, the Closing the Loopholes Act strengthens the rights of workers to engage in collective bargaining. This empowers employees to negotiate better wages and working conditions collectively, fostering a more balanced employer-employee relationship. These changes have taken effect.
The legislation introduces new rights and protections for workplace delegates which ensure that delegates are given reasonable access to union members (and potential members), to paid time (during normal work hours) for training and to workplace facilities. These changes to the Fair Work Act also prevent the exercise of workplace delegates’ rights from being hindered or obstructed by an employer. Some of these rights and protections (which are now in force) will be enshrined in all Modern Awards and future Enterprise Agreements.
Second Phase Amendments
The second phase of the legislation includes amendments dealing with more complex and controversial measures including casual employment, the definition of employment in the Fair Work Act, minimum standards for gig economy workers and road transport workers, intractable bargaining workplace determinations,sham arrangements and the right to disconnect. The second phase amendments are set out in a separate article.
Employer Implications and Compliance
For employers, these reforms require a thorough review of existing employment practices to ensure compliance with the new legislation. The introduction of stricter penalties for wage theft and underpayment emphasises the importance of accurate record-keeping and adherence to minimum wage standards. Employers must carefully review their practices to ensure compliance with the new legislation and embrace the principles of transparency and fairness in their workplaces.
This information provides a general overview only and we recommend obtaining professional advice relevant to your circumstances. If you or someone you know wants more information or needs help or advice, please contact us on (02) 5127 5261 or email [email protected].