Changes to workplace laws start on 26 August

Changes to workplace laws will come into effect on 26 August as part of the Closing Loopholes reforms.

The reforms include changes to how casual work is defined, new independent contractor rules, the right to disconnect, and new minimum standards and protections for “employee-like workers” in the gig economy and select industries.

The Fair Work Ombudsman is set to release additional information and resources on 26 August, but here’s what we know so far.

Changes to casual employment

A new definition of “casual employee” will be introduced to the Fair Work Act.

A person will be categorised as a casual employee under two conditions: “the employment relationship has no firm advance commitment to ongoing work, taking into account a number of factors” and “they’re entitled to a casual loading or specific casual pay rate under an award, registered agreement, or employment contract”.

Workers who were employed on a casual basis before 26 August will remain casual under the new definition, unless they move to a permanent position.

A new pathway will be introduced for eligible employees who want to change to full-time or permanent part-time work alongside the introduction of a Casual Employment Information Statement.

The document details the employment conditions that must be provided to all casual employees as well as information on the definition of a casual employee, how casual employment can be changed, reasons why an employer may not accept an employee’s notice, and the role of the Fair Work Commission to deal with disputes.

Business owners must provide the document to new casual employees before or shortly after they have commenced employment.

Employers need to issue the statement to existing casual employers after 12 months of employment (small businesses) and after six and 12 months of employment, followed by every 12 months (other employers).

Sham arrangements have also been addressed in the new reforms. New protections will be ushered in that make it illegal for employers to knowingly say something false to current or former full-time or part-time workers to enter into a contract for casual employment to do the same or similar work. It will also be illegal for employers to dismiss or threaten a worker to engage them as a casual employee to do the same work.

New penalties will also be in force, with businesses and individuals risking penalties of $469,500 and $93,900 respectively when engaging in sham arrangements.

Right to disconnect

Employees will have the right to refuse contact outside of working hours unless the refusal is unreasonable.

Workers can soon refuse to monitor, read, or respond to contact from an employer or third-party person.

Employers must consider whether an employee’s refusal is unreasonable according to the reason for the contact; how the contact is made; how disruptive it is, the employee’s role and level of responsibility; their personal circumstances; and whether they are being compensated for being available to work additional hours, among other factors.

All awards will be required to include a “right to disconnect” term by 26 August.

The changes come into effect on 26 August 2024 for non-small business employers and 26 August 2025 for small business employers.

Independent contractor changes

A new definition covering the meaning of “employee” and “employer” will be added to the Fair Work Act.

The following must be considered when determining if a worker is an employee or an independent contractor:

• “The real substance, practical reality and true nature of the working relationship. This also applies when determining whether a person is an employer or a principal for outworkers.
• All parts of the working relationship between the parties. This includes the terms of the contract and how the contract is performed in practice. This is a change from the existing test, which focuses mainly on the terms of a contract.”

The definition does not affect the meaning of employee and employer in other existing laws defining employment including tax, superannuation, and workers compensation.

Select workers who earn more than the contractor high income threshold (to be set) will also be able to opt out of applying the new definition through a notification process.

Contractors will be able to apply to the Fair Work Commission if they believe their contracts contain unfair terms, with new minimum standards protecting contractors who perform work on digital labour platforms also in place from 26 August.

For more information on the upcoming changes, click here.