The employment law landscape has seen a lot of changes over the last 12-24 months, with a raft of legal changes impacting the way employers manage their workforce. Changes to wage theft laws, support for domestic violence victims, casual employees and fixed-term contractors – are just a few.
Below we share the high-level overview of some of the key changes in the Closing Loopholes Bill No. 2 that we know will impact our clients once approved by Parliament. The timeline of effective dates for the below changes will range from immediately through to 6 or 12 months’ post approval (noting that for small businesses, some later effective dates apply).
Casual Employees
Definitions
Amendments to the definition of casual employment will strengthen casual employee rights as the new definition considers the practical reality of the employment relationship and not just the terms of the contract.
The new casual employment definition will be defined as:
- where there is an absence of a firm advance commitment to continuing and indefinite work; and
- where the employee is entitled to a casual loading or a specific rate of pay for casual employees (under a fair work instrument or contract).
Importantly, in determining whether there is an ‘absence of a firm commitment to continuing and indefinite work’, there is a list of indicative factors that need to be considered when determining whether an employee is genuinely a casual employee.
Casual Conversion
Currently, employers are generally required to offer conversion to casual employees after 12 months’ employment. Under the amendments, this process of employers offering casual conversion will be replaced with the following:
- casuals with 12+ months employment at a small business (less than 15 employees) may request conversion.
- casuals with 6+ months employment at a non-small business may request conversion.
- Employers must consult with the casual employee, before making a formal written response to the request.
- Where an employer refuses the request for conversion, detailed reasoning for the refusal must be provided by the employer.
Fair Work Casual Employment Information Statement
Employers will be required to provide the Fair Work Casual Information Statement to casual employees more often: at the time of their commencement, after 6 months (small business employer’s excluded) and at 12 months of employment.
Independent Contractors
Definitions
From 1 July 2024, there will be a new ‘employee’ and ‘employer’ definition which in turn affects the definition of Independent Contractor. This new definition, reverts back to the previously upheld multi-factor test which assesses the ‘totality of the relationship’, and rather than relying solely on the contract itself, looks at how the work is performed in practice.
In making this assessment, factors include:
- the degree of control;
- remuneration, including any loading, invoices, registration for GST, and whether tax is withheld; and
- who decides the hours worked by the individuals.
Independent Contractor High Income Threshold
Another key change to Independent Contractors arrangements is that parties may elect to opt out of the abovementioned Independent Contractor provisions, if the individual contractor earns more than the contractor high income threshold (the amount is yet to be confirmed). This will effectively allow either party to provide notice to the other that they wish to opt out of the provisions that may otherwise deem the relationship to be that of employee/employer relationship.
Right to Disconnect
There will be a new general employee right to “refuse to monitor, read or respond to contact, or attempted contact, from an employer or third party outside the employee’s working hours unless the refusal is unreasonable.” The key point will hinge on ‘unless the refusal is unreasonable’ and factors in the reason for the attempted contact.
The Fair Work Commission is expected to provide guidelines on how the ‘right to disconnect’ will operate in practice, guidelines which all employers should be across when published.
We are here to assist if you need help in navigating these legal changes and/or are concerned about how these might affect your workforce.
Nick Hedges is the founder of Resolve HR, a Sydney-based HR consultancy specialising in providing workplace advice to managers and business owners. He recently published his first book, “Exiting Underperforming Team Members – The Inside Scoop”. It is a practical response to the most pressing HR challenges, which can be found at https://resolvehr.com.au/.
Disclaimer: The contents written do not constitute legal advice and does not cater for individual circumstances. The information contained herein is not intended to be a substitute for legal advice and should not be relied upon as such.
References:
https://www.minterellison.com/articles/closing-loopholes-no-2-bill-passes-both-houses