Australia: The 1 July 2018 workplace changes that might impact your business

At the start of the new financial year, employers need to review their employment framework, including the impact of increases to minimum wages and proposed changes to modern awards that might affect your business. These changes are particularly relevant to Award covered employees, with approximately 2.3 million Australian employees, or 22.7% of all employees having their wages and other entitlements set by a modern award.

1. Increases to minimum wage on 1 July 2018

On 1 July 2018, the minimum wage in all modern awards increased by 3.5%. For any business that has employees covered by a modern award and are paying at or close to the minimum wage for the employee's classification under the award, it is important to increase employee's minimum wages in line with this decision by the Fair Work Commission (FWC).??For employees who are not covered by a modern award or enterprise agreement, they must be paid at the least the national minimum wage, which on 1 July 2018, increased by 3.5% to $719.20 per week based on 38 hours, or $18.93 per hour. ??It is crucial that businesses increase an employee's pay if they receive award wages or the national minimum wage. The Fair Work Ombudsman (FWO), who handles complaints regarding compliance with workplace laws can impose significant penalties on employers who fail to meet their minimum wage obligations.

2. Increase in the high-income threshold for 2018/2019

The high-income threshold refers to the highest salary one can earn and still be protected from unfair dismissal. Anyone who earns more than the high-income threshold (and is not covered by a modern award or enterprise agreement) is not protected from unfair dismissal, however they are still protected from other actions relating to unlawful termination.

The high-income threshold increased to $145,400 (from $142,000) on 1 July 2018.

The maximum compensation limit in unfair dismissal cases increased to $72,700 from ($72,000), representing half the amount of the high-income threshold.

3. Unpaid family violence leave to be added to awards

Earlier this year, the Fair Work Commission ruled that all Australian employees covered by modern awards will be entitled to five days of unpaid leave if they are affected by family or domestic violence. The FWC is currently drafting the "model term" outlining the exact clause to be included in modern awards. A model clause means the terms of the clause will be identical in all 122 modern awards and it is expected to be finalised in the coming weeks.

Whilst this provision will only apply to Award covered employees in the short term, the Turnbull government has indicated it will amend the Fair Work Act 2009 (Cth) to extend these same entitlements to all national system workers (approximately six million people). Meanwhile the Australian Labor Party if elected, has pledged to legislate for 10 days paid domestic and family violence leave in the national employment standards. In any event, research which considers the actual experience of several Australian employers who have already implemented paid leave policies shows that in practice, paid leave entitlements are not frequently utilised. The significance of the Award provision is the statement that main stream Australian society is committed to taking steps to reduce the incidence and impact of family violence.

4. Flexible working

As we advised in our newsletter in June 2018, the FWC has recommended that all modern awards should be varied to incorporate a model term related to facilitating flexible working arrangements. The provisional model term would enhance an employer's obligation to consider the request, and the bolster the information they are required to provide if they refuse the request.

Additionally, the model term would allow casual employees with at least six months' continuous service, and who have a reasonable expectation of continued work, to access flexible working arrangements provided they have parental or carers responsibilities.

The proposed new clause will mean some greater obligations on employers around consultation with Award covered employees seeking flexible arrangements, however the proposed model term retains the employer's right of refusal on 'reasonable business grounds' without any right of review or appeal.

5. Casual conversion clause

Currently, a number of modern awards include a casual conversion clause, which broadly provides employees with the right to convert to permanent employment if employed on a regular and systematic basis, for a period of 6 or 12 months (depending on the award).

The FWC has developed a draft model conversion clause for insertion in modern awards which will allow casual employees to request full or part-time employment status, provided that certain criteria have been met, including being employed on a regular basis for a period of 12 months. Similar to the model term concerning a request for flexible working arrangements, the employer can refuse to convert their employment, but they must consult with the employee first and they can only refuse to convert the employee's employment if they have reasonable grounds.

Whilst casual workers do not have access to annual or sick leave, they are entitled to a higher rate of hourly pay. As such, the impact of such a clause is not expected to be significant, as anecdotal evidence suggests that many casual employees who currently have the ability to request conversion, do not do so as they prefer to retain their casual loading.

6. Continuing focus on sham contracting

In mid-June 2018, the FWO commenced a prosecution of food delivery business Foodora Australia Pty Ltd for allegedly engaging in sham contracting activity that led to underpayments. It is being seen as a major gig economy test case. FWO is asserting that Foodora made misrepresentations to food delivery workers that they were independent contractors when they were in fact employees. Whilst the workers signed an "Independent Contractor Agreement" and each had an ABN, the FWO argues each of the workers was not genuinely conducting their own delivery business, pointing to indicia suggestive that the workers were in fact employees. The FWO alleges that amounts Foodora paid the workers was not sufficient to meet the minimum wage rates under the Fast Food Industry Award 2010.

We expect a continued focus in the new financial year by the FWO and unions on employers who inappropriately engage workers as contractors, particularly within the gig economy, where the distinction between who is an employee and an independent contract is becoming increasingly unclear. Employers need to ensure that they balance the need for flexibility in worker arrangements with their obligations to comply with workplace laws. The FWO has made it quite clear that it will use the accessorial liability provisions to prosecute individuals, such as HR managers and directors, who they consider to be complicit in drafting contracts which misrepresent an employment relationship as an independent contracting arrangement.

7. #Metoo and Sexual Harassment in the Workplace

In the past financial year, there were increasing numbers of people coming forward with complaints of workplace sexual harassment in the wake of the #metoo and #timesup movements. The momentum is expected to continue in the new financial year, with Australia set to have a national inquiry into workplace sexual harassment, headed up by the Sex Discrimination Commissioner Kate Jenkins and the Australian Human Rights Commission (AHRC). The AHRC says it will examine the scale, drivers and consequences of workplace sexual harassment and develop recommendations drawn from current best practice as part of a 12-month inquiry. The inquiry intends to draw on economic modelling to assess the financial impact on both victims, as well as to employers, with organisational impacts of sexual harassment including reduced productivity, high staff turnover, absenteeism, compensation claims and early retirement.

In year ahead, employers should expect a continued interest by stakeholders on allegations made by employees, and the manner in which employers respond to those allegations, including steps to address any cultural issues, and the adequacy of any policies and procedures they have in place to prevent and address sexual harassment.

8. Proposed Modern Slavery Bill

On 28 June 2018 the Federal Government introduced draft legislation of a Modern Slavery Bill. The legislation requires corporations with annual turnover over $100m (approximately 3,000 big companies) to report on all potential modern slavery risks and practices in their operations and supply chains. Estimates suggest about 4,300 people in Australia are the victims of modern slavery, including through human trafficking, debt bondage, forced labour and other slavery-like practices. Earlier in June, the NSW parliament passed the "NSW Modern Slavery Bill 2018" which applies to commercial organisations who have employees in NSW, supply goods or services for profit, and have an annual turnover of over $50m. The compliance obligations include the preparation and publication of an annual modern slavery statement. Failure to comply will attract penalties of up to $1.1m. The NSW legislation provides that the reporting obligations do not apply if the organisation is subject to obligations under a law of the Commonwealth that is prescribed by the NSW government as a corresponding law.
Whilst the NSW bill, and the proposed Federal bill contain reporting requirements targeted at larger Australian corporations, the smaller enterprises that make up their supply chains will need to start paying more attention to how their work practices would stand up to scrutiny in terms of forced labour. Modern slavery legislation in Australia is expected to utilise the buying power of Australian companies to influence change, driving up employment standards throughout their networks.

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

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions