Mar 6th, 2024
The second of three major recent amendments to industrial relations in Australia has been the Fair Work Legislation Amendment (Closing Loopholes) Act 2023, also known as the CL Act. Originally presented as a single bill, it was later divided into two parts, with Part 1 being enacted on December 7, 2023.
The key changes within this bill are as follows –
Criminalisation of wage theft:
Multiple instances of large-scale wage theft have made the news lately, and the updated bill further underscores the importance of employees being compensated adequately. While modern awards can be complex and mistakes can be made, this update to the legislation specifically criminalises intentional underpayment.
As this is to be a criminal offence, prosecutors must be able to prove the intentionality of any underpayment to the criminal standard of ‘beyond reasonable doubt’ – should this high standard be met, liable parties may potentially face significant financial penalties.
Industrial manslaughter:
Industrial manslaughter has also been criminalised within the Work Health and Safety Act 2011 (WHS Act), which makes persons in charge of an entity responsible, should they intentionally engage in workplace conduct that result in the death of another individual. In addition to this, the boards of entities which foster a negligent environment can also be held liable for such incidents.
The 2022 Secure Jobs, Better Pay amendment significantly broadened protected attributes in workplace adverse action cases. The CL Act builds on this further by strengthening protections for employees impacted by family and domestic violence (FDV) and prohibiting discriminatory terms in awards and agreements. This legislation serves to empower FDV victims facing adverse action to pursue general protections claims through the FWC.
Small business redundancy:
Finally, a loophole in the small business exemption from paying redundancy has been closed. Employees of larger businesses that become small businesses while a business gradually shutters will be entitled to redundancy pay, even if they are made redundant after the business has under 15 employees.
Labour hire loophole:
Another primary ‘loophole’ targeted by the CL Act was the labour hire loophole - this refers to the practice of businesses with enterprise agreements in place undercutting covered employees by using labour hire to outsource the work to lower-paid contractors.
Going forward, parties may apply to the FWC for the creation of a regulated labour hire arrangement orders (RLHAO). Provided the necessary conditions are met, employers are required to pay labour hire employees at the rate specified by the existing enterprise agreement. That said, exemptions will continue to exist where appropriate.
Overall, the changes to the Fair Work Act 2009 contained within Part 1 of the Closing Loopholes Bill aim to resolve gaps in existing legislation, promoting fairness and consistency in the workforce. Moving forward, employers should review current systems and process to ensure compliance with the new legislations.
6/03/2024
Back to News