Here are the key changes employers need to be aware of which come into effect on 26 August 2024:
Changes to casual employment
Multiple changes to casual employment in the Fair Work Act 2009 (Cth) (FW Act) commence on 26 August 2024.
New definition of casual employment
A person will be a casual employee if, when they start employment;
- There isn't a firm advance commitment to ongoing work (taking into account the real substance, practical reality and true nature of the employment relationship based on multiple defined factors); and
- They are entitled to receive a casual loading or specific casual pay rate.
New pathway to permanent employment
The casual conversion process will be replaced with an employee notification process (subject to some transitional arrangements).
Casuals who have been employed for 6 months (12 months for small business) can provide written notice to their employer they intend to change to permanent employment. The employer must respond in writing within 21 days and may only refuse for certain reasons (such as based on fair and reasonable operational grounds). Following a refusal, an employee apply to the Fair Work Commission to resolve the dispute.
Casual employees will remain casual until the occurrence of a specified event. Namely:
- Accepting an offer of permanent employment offer following a notification process, or,
- Conversion following an order of the Fair Work Commission (FWC)
Sham Arrangements
Civil penalties apply for sham arrangements including:
- Employers who knowingly mislead a permanent employee so that they become casual and,
- Employers who dismiss or threaten to dismiss an permanent employee to engage them as casual to perform the same work.
Casual Information Statement
An updated Casual Employment Information Statement (CEIS) will be available from 26 August 2024. Employers will need to provide the CEIS to:
- New casual employees at or as soon as practicable after the commencement of their employment;
- Ongoing casual employees employed by non-small businesses as
soon as possible after:
- Six-months of employment; or
- 12-months of employment and every subsequent period of 12-months of employment.
- Ongoing casual employees of small businesses as soon as possible after 12-months of employment.
Independent Contractor Changes
There are also far-reaching changes affecting independent contractors and services agreements.
Definition of Employment
A new definition will be added to the Fair Work Act to assist in determining the meaning of 'employee' and 'employer' for the purposes of determining whether a worker is an independent contractor or employee. The new interpretative principal requires consideration of the real substance, practical reality and true nature of the relationship by considering the 'totality' of the relationship. The intention is to return to the multifactorial approach
Opting out of the new definition
Principals may provide a notice to contractors earning above the 'contractor high income threshold' that they can opt out of the new definition. If the contractor then provides an opt out notice, the definition will not apply to the relationship. While the threshold has not been released, it is likely to be equivalent to or similar to the employee high income threshold (currently $175,000 per annum).
New Unfair Contracts Jurisdiction
Contractors earning below the high-income threshold will be able to apply to FWC for dispute resolution in relation to unfair terms in services contracts. The new jurisdiction is designed to be low cost, flexible and informal. The FWC will be able to determine whether a term of a services contract is unfair and make an order to set aside, amend or vary all or part of the contract. Contractors earning above the threshold continue to have access to remedies within the Independent Contractors Act 2006 (Cth).
Minimum Standards for regulated workers
Frameworks will be set up to protect 'regulated workers' including contractors performing work on digital labour platforms (employee-like workers) and road transport industry workers
Key changes in this new framework include:
- The FWC will be empowered to make minimum standards orders and guidelines for regulated workers including terms about pay, insurance and deductions.
- Registered organisations (such as Unions) will be able to make collective agreements with digital labour platform operators and road transport businesses.
- The FWC will be empowered to determine disputes where a regulated worker has been 'unfairly deactivated' from a digital platform or a road transport worker's contract has been unfairly terminated.
- Workplace delegates' rights will apply delegates representing interests of union members who are also regulated workers (ie representation, reasonable communication with union members and potential union members, reasonable access to the workplace, access to paid time off for delegate training);
- New advisory groups will be established to consult and advise on the changes including a digital labour platform consultative committee and a road transport advisory group.
Right to Disconnect
Eligible employees will have the right to refuse contact outside of their working hours, unless that refusal is unreasonable. This will take place from 26 August 2024 for non-small business employers and from 26 August 2025 for small business employers. Exercising that right is a workplace right and will be subject to the general protections provisions of the Act. The Fair Work Commission will also have jurisdiction to determine disputes about the right to disconnect and make orders preventing contact by an employer or preventing an employee from refusing contact unreasonably.
To manage the change, employers should:
- review their employment contracts to assess whether remuneration clauses have been drafted with the expectation that employees are contactable outside of normal working hours
- review their current policies and practices in relation to out of hours contact and provide information to employees on the new laws on what is considered reasonable and what is not.
- Provide training to managers on the new laws and the prohibition on adversely treating employees for exercising the right to disconnect.
A handy resource of the changes
Here is a link to a useful resource for you, summarising the key workplace changes.
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.