Closing loopholes: Unpacking the third tranche of workplace relations changes
On 4 September 2023, the Federal Government introduced its long awaited third tranche of workplace law changes to Federal Parliament. The Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 proposes to make significant amendments to the Fair Work Act 2009 (Cth) (FW Act).
Some of these changes could result in employers and employment practices liability/management liability insurers experiencing an increase in claims.
This article provides a summary of the key amendments in the bill and is the first in a series examining the amendments in more detail, to ensure employers and insurers are ready for the changes.
The key changes are as follows:
Casual employment: The bill aims to provide a clearer definition of casual employment and establish a new pathway for casual employees to transition to permanent roles after 6 months’ service. The ‘new’ definition is a case of ‘back to the future’ for employers, and draws from the elements of casual employment routinely used before the High Court’s decision in WorkPac Pty Ltd v Rossato  HCA 23.
Wage theft: Stricter criminal penalties are proposed to be introduced for intentional underpayments as well as a new criminal offence of wage theft. The Minister for Workplace Relations said, “it has always been a crime if a worker steals from the till, it should also be a crime if an employer steals from a worker”.
Labour hire: It is proposed that the Fair Work Commission is granted the power to make orders to ensure labour hire workers receive the same pay as employees covered by an employer’s enterprise agreement, addressing the issue of the use of labour hire to undercut wage rates bargained for under enterprise agreements. There are proposed exceptions for where a labour hire employee is engaged for a short-term period or where a training arrangement applies to the employee.
Gig economy: If the bill is passed, certain road transport workers and digital labour platform workers (i.e. gig economy workers) will be entitled to receive extensive minimum standards and protection from unfair termination or ‘unfair deactivation’. They will have recourse to the Fair Work Commission to resolve disputes over termination/deactivation and unfair contract terms.
Businesses operating in these industries will need to adapt to a new system of collective bargaining with these workers and be prepared to respond to claims over terminations or contractual rights.
Statutory definition of ‘employee’
The bill proposes a statutory definition of ‘employee’ and ‘employment’ for the first time in Australia, though only applying to the FW Act and even then, only parts of it. Under these proposed changes, courts and tribunals will need to revert to assessing the totality of the employment relationship – not just the terms of the contract between the parties – when determining if a person is an employee or an independent contractor. This would overturn the effect of the High Court’s decisions in Jamsek and Personnel Contracting (see our article here).
Protection from discrimination based on family and domestic violence
The bill adds ‘subjection to family and domestic violence’ to the existing list of attributes protected by the FW Act from discrimination. It would not apply to perpetrators who are not also subject to family and domestic violence.
Next steps for employers and EPL/ML insurers
Employers should expect the bill will pass in a substantially similar form to present, before the end of the year. It is contemplated that the majority of changes proposed in the bill will take effect in early to mid-2024, giving employers some time to prepare.
Management liability and employment practices liability underwriters will need to consider whether their existing policy wordings would respond to termination claims and other disputes by gig economy workers and independent contractors in the transport sector. Further, claims managers will need to be ready to consider coverage under existing policy wordings for new types of claims.
Employers should be proactive and seek advice early regarding these proposed changes. Stay tuned for our subsequent articles unpacking the bill in greater detail, including discussion about the likely effects on employers and their insurers.
Please contact Gilchrist Connell’s national Workplace law team for assistance and guidance about the workplace law reforms or any other workplace law matter.