26 August Workplace Law Changes – Are You Ready?

Next Monday, 26 August 2024, a new round of changes to the Fair Work Act 2009 (Cth) (FW Act) will come into effect under the “Closing Loopholes Legislation”. A quick guide to the changes your business needs to know about is below.    

1. Right to disconnect

   
   

   The highly anticipated “Right to Disconnect” will form part of the National Employment Standards as of 26 August 2024 and applies to all employees (except those employed in a small business – for small businesses, the right to disconnect does not come into effect until 26 August 2025). With the right to disconnect, employees will have a workplace right to “refuse to monitor, read or respond to contact, or attempted contact,” from an employer or third party “outside of the employee’s working hours unless the refusal is unreasonable”. Whether an employee’s refusal to monitor, read or respond to out of hours contact or attempted out of hours contact is unreasonable will need to be assessed on a case-by-case basis, having regard to a variety of factors set out in the new section 333M(3) of the FW Act.  As a workplace right, employers cannot contract out of the right to disconnect, however, it may be appropriate to make revisions to employment agreements and position descriptions to clarify employer expectations with respect to employees responding to and monitoring out of hours contact.

2. Changes to casual employment

   
   

   Under the new definition of “casual employee” in section 15A of the FW Act, an employee will be a casual employee if:

   1. from the outset of their employment, the employer did not make any firm advance commitment to ongoing work (taking into account the multiple factors in the new section 15A); and

   2. the employee is entitled to a casual loading or a specific casual pay rate under an award, registered agreement, or employment contract.

   Employers should consider the drafting of their casual employment agreements and ensure that they align with the new section 15A.  A new “Casual Employment Information Statement” has also been prepared by the Fair Work Ombudsman which reflects the changes to the definition of casual employment.  Employers will need to take care to ensure that they provide casual employees employed from 26 August 2024 with the right version of the “Casual Employment Information Statement”.

   Employers will also likely need to update casual conversion practices. From 26 August 2024, casual employees, who have been employed for at least 6 months (12 months if employed by a small business) and believe they no longer meet the requirements of the casual employee definition in section 15A, will have a new casual conversion pathway open to them.  Casual employees will be able to provide their employer with written notice of their desire to move to permanent employment and employers must provide a response in line with the parameters set out in the new section 66AAC of the FW Act.

3. Changes to independent contracting

   
   

   For the first time, the FW Act will set out a test to determine whether an individual is an employee or an independent contractor. The new section 15AA of the FW Act requires regard to be had to the “real substance, practical reality and true nature of the relationship between the individual and the person” to determine if the individual is an employee or independent contractor, overturning the “primacy of contract” test that was established by the High Court in its Jamsek and Personnel Contracting decisions and returning to the previous common law multi-factorial test.  

   There will also be a new “opt-out” regime for independent contractors who earn above a high-income threshold (which is yet to be determined), and want to remain as independent contractors.  If these contractors are concerned that they may be classified as an employee pursuant to the test in the new section 15AA, and want to remain an independent contractor, they will be able to “opt out” of the new test in section 15AA.

   The FW Act will now include a framework, based on the concept of a “fair go all round”, for dealing with unfair contract terms in services contracts, under which independent contractors are usually engaged. The Fair Work Commission will have jurisdiction to hear applications relating to unfair contract terms in services contracts and, where the Fair Work Commission considers a term of a services contract to be unfair, it will be able to make orders to amend or vary the term, or to set the contract aside.

   In light of both the new test in section 15AA of the FW Act and the provisions relating to unfair contract terms, organisations that engage independent contractors should consider the terms of their services contracts and the way in which the independent contractor performs the services to ensure that they do not fall foul of either provision.

4. New category of employment: “employee-like workers” 

   
   

   “Employee-like workers” (as defined in the new section 15P of the FW Act) are a brand new category of employment aimed at capturing workers in the gig-economy. “Employee-like workers” are independent contractors who perform work via a “digital labour platform” (as defined in the new section 15L of the FW Act) and who have low bargaining power in negotiating their contract, are paid at or below the pay rate of an employee performing similar work and have low authority over the performance of their work.

   Employee-like workers will be given a number of rights and protections, including:

   
   

   1. an entitlement to bring “unfair deactivation” claims before the Fair Work Commission.  It is expected that claims for “unfair deactivation” will be dealt with in a similar way to unfair dismissal claims;

   2. a right to appoint workplace delegates; and

   3. a right for unions who represent employee-like workers to enter into “collective agreements” with digital labour platform operators.  Collective agreements will operate in a similar manner to enterprise agreements.

   
   

   We recommend that organisations that engage independent contractors via a digital platform seek legal advice to confirm whether their independent contractors fall into the category of “employee-like workers”.

Is your business ready for the changes?

Employers should prepare for the changes happening from 26 August 2024 by ensuring they are informed, and by considering whether they need to revise employment contracts, policies and procedures, position descriptions and other relevant workplace documents and practices. We can assist with this, as well as provide:

1. further information about these changes;

2. training for managers and staff about the impact of these changes and how to remain compliant;

3. advice about the likely impact of these changes on your organisation; and

4. assistance implementing any relevant changes in your business.