Mar 19th, 2024
The third of three major amendments to the Australian industrial relations landscape is the Fair Work Legislation Amendment (Closing Loopholes No. 2) Bill 2023, which will be referred to in this article as Part 2. This bill received royal assent on the 26th of February 2024 and began coming into effect from the 27th of February 2024.
The key changes contained within it are as follows:
Right to Disconnect
This amendment creates a workplace right for employees to refuse to engage with out-of-hours contact from their employers. By making this a workplace right, employers who enact adverse action on employees for choosing to disconnect can be exposed to claims of having breached their general protections.
That said, the amendment underscores that any refusal to engage with out-of-hours contact is contingent upon the reasonableness of the request. Factors determining reasonableness include, but are not limited to, the extent of disruption caused by the contact to the employee and the nature of their role and duties. Furthermore, there is an implicit understanding that employees compensated at higher rates are being remunerated for potential out-of-hours work, which will weigh on the assessment of reasonableness.
As a note, employers should be aware that this amendment will not penalise them for contacting employees out of hours provided the employee is not unreasonably expected to respond.
Defining Casual Employment
There will be a new definition of ‘casual employee’ in the Fair Work Act 2009 (the FW Act) that no longer relies on the substance of the employment contract alone, but also considers the practical reality of the employment arrangement.
Casual Conversion
A 2021 addition to the FW Act has created a requirement for non-small business employers to offer conversion to permanent employment for eligible casual employees after 12 months, as well as allowing these employees to request it themselves. This had been contentious, in part due to the onus being placed on the employer.
The “employee choice” amendment in Part 2 aims to address employers’ concerns by removing the requirement for them to offer casual conversion. Eligible employees will remain empowered to request conversion by written notification, and employers will still be required to respond within 21 days.
Employment vs Contracting
A 2022 High Court decision found that the text of the contract was the key to determining if someone was an employee or a genuine independent contractor. Much like the definitional change to casual employment, Part 2 has added a term to the FW Act that reverts the focus to the nature of the engagement instead – this means that the behaviour of both parties will once again be the central focus when determining if a relationship is that of employment or of contracting.
As a summary, the changes in Part 2 of the Closing Loopholes bill aim to address grey areas in legislation. Employers & employees are encouraged to keep up-to-date on the changes as they come into place.
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