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What you need to know about latest tranche of IR Reforms

What you need to know about latest tranche of IR Reforms

Published: 14 Sep 2023

What you need to know about latest tranche of IR Reforms
Written by
Caitlin Vincent
Caitlin Vincent
Associate Director
Julian Arndt
Julian Arndt
Director

What you need to know about latest tranche of IR Reforms

Published: 14 Sep 2023

 

Third-Tranche-Reforms-Summary.PNG

On 4 September 2023 the Federal Government introduced to Parliament the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 (the Bill); the third tranche of significant reforms to Australia’s workplace relations and industrial laws.

With so much legislative reform, it is understandable that employers and HR managers are overwhelmed by the breadth of reforms to get across.
 
Whilst the reforms are significant, not all the reforms under the Bill apply to employers at large.  Accordingly, it is key that HR managers understand which of the new laws may end up applying to their organisation. We've created a summary of the key elements of the reforms which you can download above - just click the image.
 
The reforms can be grouped into three categories.

 

Part 1 - Contracts: Casuals and Contractors

A key component of the Bill is the repeal of the existing definition of “casual employee” at section 15A in Division 3 of Part 1-2, and introduction of a new casual employee definition that empowers the Courts to have regard to post contractual conduct when assessing whether an employee is a casual, as well as new casual to permanent conversion processes.
 
This means that if the Bill is passed, from 1 July 2024 an employee will be considered a casual employee if the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work having regard to the ‘real substance, practical reality and true nature of the employment relationship’ and the employee is entitled to a casual loading.
 
Broadly speaking, this change will revert the legal position regarding casuals to the common law position prior to the High Court’s WorkPac Pty Ltd v Rossato [2021] HCA 23 and the introduction of the current “casual employee” definition. Parties will no longer be able to rely simply on the terms of a written contract and will need to assess real substance, practical reality and true nature of the relationship.
 
The Bill also introduces the following changes which will apply from 1 July 2024 (if the Bill is passed):
  • A new definition determining who is an employee to overcome the High Court’s decision in the Personnel Contracting and Jamsek cases.
  • A new ability for the Fair Work Commission (FWC) to set minimum standards applicable to ‘employee-like’ forms of work through a digital labour platform (ie the ‘gig economy’).
  • The new ability of independent contractors earning under the high-income threshold to challenge ‘unfair deactivations’ and ‘unfair contractual terms’ in the FCW.
If your organisation engages casual employees or independent contractors we recommend referring to our more detailed analysis on the Casual and Contractor reforms available on our website.
 

Part 2 - Pay and Union Reforms

One of the most publicly controversial aspects of the government’s reform agenda has been the so-called ‘same job, same pay’ reforms.
 
The actual reforms contained in the Bill allow parties to apply for ‘Regulated Labour Hire Arrangement Orders’ that requires an employer providing labour to pay the applicable rate pay under the host employer’s enterprise agreement.
 
Broadly, this reform will mean that where an enterprise agreement covers a particular type of work at a host employer, orders can be made requiring employees provided to the host employer to be paid in accordance with the host employer’s enterprise agreement, even if they are not direct employees of the host employer or covered by the host employer’s enterprise agreement.
 
Notably, the Bill also introduces anti-avoidance provisions regarding Regulated Labour Hire Arrangement Orders that apply retrospectively.
 
Another key component of the Bill is the criminalisation of the underpayment of wages, referred to in the Bill as ‘Wage Theft’.  This means that employers who intentionally underpay an employee are liable for penalties and may be prosecuted by the Director of Public Prosecutions or the Australian Federal Police anytime within six years after the offence.  However, it is important to note that the wage theft reforms do not capture inadvertent underpayments (even if reckless or negligent) or failure to pay superannuation, long service leave, or jury or paid emergency service leave.
 
The Bill also introduces the following changes:
  • New entry rights for unions and training payments for workplace delegates
  • Bargaining changes including new powers of the FWC to issue model terms for enterprise agreements, amendments to allow parties to voluntarily replace a supported bargaining or a single-interest agreement with a single enterprise agreement at any time
  • Measures to address the impact of the small business redundancy exemption.
If your organisation engages labour hire workers, is unsure about whether you are underpaying employees or have a union presence in your workplace, we recommend referring to our more detailed analysis on the Pay and Union reforms.
 

Part 3 - Road Transport

These aspects of the Bill cover the road transport industry (which has been defined broadly) and introduces:
  • The ability for the FWC to set minimum standards applicable to road transport workers (but not terms relating to the engagement of employees vs workers, WHS matters or Heavy Vehicle National Laws), ratify collective agreements for road transport contractors (not employees) made by consent between the parties and resolve disputes about ‘unfair terminations’ relating to contractors who have been performing work for at least 12 months.
  • A new regulation making power for the Minister in relation to the 'Road Transport Contract Chain'.
  • Creation of a new expert panel for the road transport industry and advisory body.
Notably, the legislation expressly confirms that the existing regulation in NSW and VIC regulated Owner-Driver laws will continue to operate.  The same exemption does not apply to the WA Owner-Drivers laws, however, this may occur by way of regulation in the coming weeks.
 
If your organisation falls or likely falls within the “road transport industry” we recommend referring to our more detailed analysis on the Road Transport reforms.
 
These changes, together with the previous round of industrial relations reforms can present challenges for businesses. ABLA’s team of experts are available to help. Reach out at info@ablawyers.com.au if you have any queries. 

                                                              

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The content of this article is general in nature, and is intended to provide commentary only. It does not constitute advice, and should not be relied upon as legal advice. Targeted formal legal advice should be obtained prior to any action being taken in relation to a matter arising in response to the content of this article.

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