Changes to the Fair Work Act: Closing Loopholes

The Fair Work Legislation Amendment (Closing Loopholes) Act 2023 has made several important changes the Fair Work Act 2009 (“the Act”), some of which has already come into effect and others with upcoming deadlines. As businesses are slowly coming back after the holiday period, it is important to familiarise yourself with the new rules to ensure that you are starting 2024 with the best foot forward. Failure to comply may result in significant penalties imposed on your business.

The following changes to legislation have been summarised as follows:

i. Family and Domestic Violence (“FDV”)

From 15 December 2023, employees (or potential employees) are protected from any adverse action or discrimination on the basis of being subject to family and domestic violence.

An adverse action could include dismissal (or threat of dismissal) and actions that may affect that employee’s position in the workplace (for example, cutting shifts, reducing hours, refusal to promote, demotion). The Act prohibits an adverse action from being taken against an employee if such action is taken due to the employee’s race, colour, sex, sexual orientation, breastfeeding, gender identity, intersex status, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

As a result of this legislative change, employees are now protected from adverse actions if such actions are taken because they are subject to FDV, in addition to the above.

What can I do?

If presented with an employee who has/is currently dealing with family and domestic violence, it is important to be extremely careful to ensure that any decision taken by an organisation does not discriminate against the employee because of the family and domestic violence situation they are in. If you are in a position where it may be necessary to discipline an employee who may be subject to FDV, you may need to seek legal advice before proceeding.

ii. “Same job, Same pay”

The principle behind the “Same job, Same pay” legislation was for labour hire employees to be paid the same as an employee covered by their host employer’s enterprise agreement.

As of 15 December 2023, employees, unions, and/or host employers may apply to the Commission for regulated labour hire arrangement orders. If granted by the Commission, these orders will require the labour hire employees to be paid no less than employees of the host should they be covered by an enterprise agreement. Exceptions may apply to trainees, small business owners (less than 15 employees), or where employment is less than 3 months (although this is only a default guide).

This means you are no longer able to pay labour hire workers lesser rates than employees performing the same duties under an enterprise agreement you have in place.

In considering whether such orders should be granted, the Commission will have to decide whether the work performed by the worker constitutes supply of labour or provision of services as only supply of labour can be covered by these orders. Simply put, the Commission will determine if the labour hire workers are employees (similar to existing employees employed by the host employer) or service providers (more similar to an independent contractors) and will take into account the following factors when making this determination:

· How much control does the employer have over the work performed? (for example, control over managing rosters, assigning tasks or reviewing the quality of the work);

· Does the employee use their own systems, plant or structures of the employer to perform the work?

· Is the host employer subject to industry or professional standards or responsibilities in relation to the employees?

· Is the work performed of a specialist or expert nature?

Please be aware that while these orders can be made as of 15 December 2023, they cannot come into any effect until at least 1 November 2024.

What can I do?

· Check if you are currently employing any labour hire workers in your business.

· Conduct pay reviews between employees who perform similar duties if you employ labour hire workers. Take note of any discrepancies in pay that arise from any pay review. This includes workers who are considered independent contractors.

· Prepare for a potential increase in labour costs if you are currently employing or intend to employ labour hire employees.

iii. Criminalising Wage Theft

From 1 January 2025, intentional wage theft will be considered a criminal offence. This means that underpayment of wages will pose more serious consequences for employers who are found to have intentionally underpaid their employees (including superannuation), such as a significant fine or imprisonment (of up to 10 years).

It is important to note that wage theft covers more than just an employees’ unpaid salary/hourly rate but also any owed superannuation contributions, paid long service leave, and paid jury service/ emergency services leave. Employers should therefore start taking steps to ensure that their record-keeping practices are in order and to consider carefully if there may be any potential for wage underpayments at this stage.

What can I do?

· Keep comprehensive records of employee pay slips as poor record-keeping can easily lead to inadvertent underpayments.

· Conduct regular pay reviews to ensure that employees are paid correctly in accordance with the appropriate industrial instrument (such as an enterprise agreement or modern award)

· Seek legal advice immediately if you discover any instance of underpayments within your system to ensure it is rectified as soon as possible.

If you need assistance with ensuring your business is compliant with the new changes, please contact our Workplace Relations Team at admin@constructivelegalsolutions.com.au via our Contact Us page.

Please note that this article is not intended to provide legal advice, but rather constitutes general guidance on upcoming changes in the rules. For more information, you may wish to contact our Workplace Relations team to assist you further.