Closing the Loopholes Legislation (Australia): Everything you need to know to prepare.

What happened on 26th August?  

• 1768 – James Cook sailed off on the HMS Endeavour, finally reaching Botany Bay in April 1770. 

• 1955 – The first tennis match was telecast in Colour by NBN, it was the Davis Cup match between Australia and the US. 

• 2024 – Fair work will provide a new definition of “employment”, there will be changes to “casual” employment, and eligible employees will be given a “right to disconnect.” 

There is never a dull moment in the Australian employment landscape, so, what does this all mean for your business?  Let’s break it down. 

1. Definition of Employment

Don’t expect any significant change with this one – unless you engage a person as an Independent Contractor.  The Fair Work Act will be updated to consider the practicality of how the relationship between the employer and employee works, rather than solely relying on the employment or independent contractor agreement that governs the relationship.   

As a reminder, the more control the entity has over ‘how’ the ‘independent contractor’ works, the more likely the relationship is to be that of employer/employee.  

For those clients that do have independent contractors, they will now have access to engage the Fair Work Commission to make decisions when there are disputes within their agreements. If the Fair Work Commission does deem a contract term to be unfair, it will have the power to change the terms and make parts of the contract or the whole contract ineffective.   

Please reach out to us if you wish to discuss your current independent contractor arrangements. The penalties can be steep if you get this wrong so better to do your due diligence now rather than be fined for it later.  

2. Right to Disconnect

From 26 August 2024 the Fair Work Act will provide most employees (including those covered by Modern Awards) the right to refuse to monitor, read or respond to contact (or attempted contact) from an employer outside of working hours – unless the refusal is unreasonable.  Naturally for occasions such as emergencies or by virtue of a role requiring the employee to be available out of hours, contact would be reasonable.   

If you are a large employer, please make sure your leaders are aware that out of work hours contact may no longer be reasonable, especially if they are expecting the employee to respond to calls or emails.  This does become challenging with a workforce that works flexibly, especially if there are shifts or time zones to consider.  How do you know if the communication you aren’t required to check is an emergency? Well, if this is the case, you may wish to consider developing a communication plan or development of a policy that sets the expectation that no employee is required to respond to work communications outside of their workday – but if there is an emergency – communication will flag in such a way to alert them to the matter.   

3. Casual Employment

This change will apply to large employers from 26 August 2024 and small employers (with less than 15 employees) from 26 August 2025. 

The definition of a casual worker is changing. The new definition says that an employee is a casual only if: 

• There isn’t a firm advance commitment to continuing and indefinite work, factoring in the real substance, practical reality, and true nature of the employment relationship.  

• The employee is entitled to be paid a casual loading or specific pay rate for casuals (this means it must be clear in Contracts and on payslips that their pay rate is inclusive of the casual loading) 

So, what does this mean? 

Depending on a myriad of factors, if your business is rostering your casual employees to shifts in advance, this potentially widens their access to permanent employment, even if they are not working regular and systematic hours.  

The good news story in all of this is that the process of managing casual conversion for the employer will become less onerous. Hooray you say!   

Casual employees that commence on or after 26 August 2024 will have the ability to request a move to full or part-time employment if: 

• they have been employed for at least 6 months (or 12 months for small employers with less than 15 employees), and 

• they believe that their relationship with the employer no longer meets the requirements of being “casual”. 

The employee can request to convert every six months, if their first application is not accepted by the employer.  

As an employer you will no longer need to assess if a casual is eligible for conversion, then write to them to say if they are being offered permanent employment or not.  All you need to do is provide your casual workers with a Casual Information Statement when they start employment, at 6 months service, and then on each anniversary of employment.  

There is a transition period for your casuals that started on or after 26 February 2024.  This will be the last group of casuals where you will need to follow the old regime of reviewing their eligibility to offer a conversion or not.  If these casual employees are not offered or do not accept an offer of permanency, they will transition to the new casual conversion process of being offered a Casual Information Statement on each work anniversary.   

If you do get a written request by a casual employee to convert to permanent employment, please reach out to Streamline HR who will be able to help with the consultation and review process.   

A new Casual Information Statement will be available for use from 26 August 2024 – please refer to the Fair Work website closer to that date to get your copy.  

Fair Work Information Statement - Fair Work Ombudsman