Australia’s workplace laws could be about to receive the biggest overhaul in 14 years

The ‘Closing Loopholes’ Bill could be about to change Australia’s workplace laws in the most significant way since the Fair Work Act was introduced. 

If the Bill passes through both houses, the Albanese government will be able to implement its workplace relations agenda, changing everything from the rights of casual workers to the laws around industrial manslaughter and from minimum employment conditions through to the definition of employment itself.

We explore how the Closing Loopholes Bill will impact your organisation if it becomes law.

What is the Closing Loopholes Bill?

The Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 aims to introduce some of Labor’s workplace relations-based pre-election promises, as well as some of the outcomes agreed at last year’s Jobs and Skills Summit. 

While the Bill may not be law yet, it will likely pass through parliament in some form after February next year, after a Senate Committee Report. (Although independent Senator David Pocock, whose vote is likely to be needed, supports splitting the Bill). 

That means all organisations should start preparing now. Here are some of the key provisions you need to know about. 

A re-written (and more onerous) definition of casual workers

Over the past couple of years, several high-profile court cases attempted to define what constitutes a casual employee. Then, in early 2021, the Morrison government stepped in, legislating that the written contract – rather than the patterns of behaviour – should be paramount.

The Albanese government wants to change this – by introducing a new test that considers the totality of the relationship between employer and employee. The idea behind this is to end what the government calls “the permanent casual” to look at “what’s really going on”. If passed, the test will require employers to continually assess their workforce and the nature of the way they engage employees to make sure they are genuine casuals.

This could impose a real burden on employers in sectors that rely heavily on a casual workforce, such as retail and hospitality.

A new definition of employment itself?

Another area the government is targeting is the distinction between employer/employee and principal/contractor. Again, this has been a long-litigated and contentious area of employment law.

Under the government’s proposed definition, we’ll see a return to a test based on many factors, effectively expanding the definition of who counts as an employee. This also reverses recent High Court authority, including WorkPac Pty Ltd v Rossato [2021] HCA 23 and Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA 1, both of which adopted a narrow definition of who was an employee.

Tied in with this are new ‘same job, same pay’ provisions. These give the Fair Work Commission authority to make orders preventing employers from undercutting the wage provisions of enterprise agreements by using labour-hire workers.

If passed, the new provisions could also impact several sectors, especially those that rely heavily on contractors.

Stronger penalties for underpayment

New ‘wage theft’ provisions in the Closing Loopholes Bill will make deliberately underpaying employees a criminal offence. 

The Fair Work Ombudsman will handle any initial investigation and has the power to make ‘snap’ entries. If they find something amiss, the Commonwealth DPP can take legal action based on information from the Australian Federal Police. Prosecutions can start up to six years after the alleged offence, and the penalties are severe – up to 10 years in jail for individuals and fines that could go as high as $7.8 million for companies.

But there is a safety net. The FWO is offering a “cooperation agreement” for businesses that self-report wage theft. This agreement serves as a ‘safe harbour,’ protecting you from further prosecution. 

So, while the Bill brings more accountability and stringent rules, it also provides an avenue for rectification for those businesses and individuals that find they have breached the Act.

Greater protections for gig economy workers

The FWC will also be able to set fair minimum standards for ‘employee-like’ workers, such as those working through ride-sharing and food delivery apps. They’ll also be able to hear claims concerning unfair deactivation or termination from a service.

This further regulates one of the most controversial and vulnerable workplace sectors and one that is growing more important to the overall economy. 

New rights for union workplace delegates

There are new rules around workplace delegates’ rights and protections, including in employer disputes. Workplace delegates will be allowed ‘reasonable access’ to workplace facilities, as well as to communicate with current and potential union members about industrial matters. 

A general protection will also apply to workplace delegates. This includes preventing employers from unreasonably refusing to deal with them. Employers are also prevented from obstructing workplace delegates or misleading them.

Workplace delegates also receive paid time off for training in their role, unless they’re employed by a small business.

Tougher anti-discrimination laws

Stronger protections will apply to workers who face discrimination as a result of family or domestic violence. This aims to bring the Fair Work Act into line with federal anti-discrimination legislation.

Industrial manslaughter

Industrial manslaughter laws already exist at the State level. The Closing Loopholes Bill will introduce a federal industrial manslaughter office that could land an individual 25 years in jail. Meanwhile, companies could face fines of up to $18 million if they’re found to be reckless or grossly negligent. 

In short…

These are just some of the changes that the Closing Loopholes Bill aims to introduce. If enacted, it will bring about new responsibilities for most employers and change the definition of many workplace tests.

That’s why it’s vital you stay on top of the legislation, especially if you have a high number of contractors or casual staff. 

If you’d like to know more about the impact this is likely to have on your workplace, get in touch.