The Fair Work Ombudsman is urging workplace participants to get educated and comply with the further changes to workplace laws, or risk facing new significantly higher penalties - including multi-million-dollar fines.
The second set of ‘Closing Loopholes’ changes have now received Royal Assent after passing the Parliament in February, and follow the Australian Government’s first ‘Closing Loopholes’ changes which passed the Parliament in December.
The changes in the second Closing Loopholes laws take effect at various dates across this year and into next year, with many changes already in effect. This includes increases to maximum civil penalties, which only apply to employers who aren’t individuals or small businesses.
These maximum penalties have increased by five times, to a total of $469,500 per contravention for a company. For serious contraventions, maximum penalties have also increased by five times to $4,695,000 for a company (previously $939,000).
The maximum civil penalties available for non-compliance with a Compliance Notice have doubled for all employers of any size, to a total of $18,780 per contravention for an individual and $93,900 per contravention for a company.
In addition, from January 1, 2025, penalties for underpayment-related contraventions by non-small businesses can be three-times the amount of the underpayment if an applicant chooses this method.
What constitutes a serious contravention under the Fair Work Act has now changed to one done either knowingly or recklessly, and it is no longer required to prove a breach was done knowingly and systematically.
Other major changes include the definition of ‘casual employment’ and ‘employment’, a new framework for gig economy workers, and the right to disconnect for employees in medium to large enterprises, all taking effect on August 26 this year.
Regarding definition changes, an employee can only be called casual only when there isn’t a firm advance commitment to continuing and indefinite work, factoring in the real substance, practical reality and true nature of the employment relationship. The employee is also entitled to be paid a casual loading or a specific pay rate for casuals.
A new pathway will also replace the existing rules for eligible casual employees to change to permanent employment if they want to.
In 2021, there were 453,000 casuals in the retail trade industry, when the total workforce was around 1.29 million people according to Australian Industry Group. In November 2023, the total number hit 1.32 million people, according to the latest data shared by the Australian Bureau of Statistics.
There will also be new definitions of ‘employee’ and ‘employer’ under the Fair Work Act from August 26. In determining whether an employment relationship exists, the totality of the relationship must be considered, including the real substance, practical reality and true nature of the working relationship.
Meanwhile, a new framework is coming into law from August 26 to protect the interests of certain workers in the gig economy - who are now called “employee-like workers”. These workers perform work through a digital labour platform and may have low bargaining power, low pay and little say in how they perform their work.
The Fair Work Commission – a separate government organisation from the FWO – will be able to set minimum standards by making orders, and will be able to make guidelines. They will also be able to deal with disputes on the unfair deactivation of an employee-like worker from a digital labour platform.
Unions that are registered organisations representing employee-like workers will be able to make collective agreements with digital labour platform operators.
Whilst gig economy workers currently work predominantly in food delivery, retail experts such as Paul Greenberg expect this to roll into other areas of retail - including fashion.
Brands and retailers such as Incu, Designerex, and Cue already offer same-day delivery through Uber.
In conversation with Ragtrader last month, Greenberg said he is excited about the continued investment in the uberisation of transport and delivery.
“I think we'll see a lot more in that asset sharing economy. So I've got a van, you've got a retailer…
“Utimately, technology is the glue that will really wrap this together, otherwise, it'll always be quite hokey. But I think we'll see more of that.”
The final key change is the introduction of ‘right to disconnect’ laws on August 26, with small business employers being given a longer runway to shift processes to match disconnect laws, by August 2025.
Employees will soon have the right to refuse to monitor, read or respond to contact or attempted contact from an employer or third party outside of their working hours, unless their refusal is unreasonable.
Whether a refusal is unreasonable will depend on factors including the reason for the contact, level of disruption, any compensation the employee receives to be available or work additional hours, and the employee’s role, responsibilities and circumstances. Disputes can be taken to the Fair Work Commission if they can’t be resolved at the workplace level. The FWC will be able to make orders or otherwise deal with the dispute.
There are a range of other changes to the Fair Work Act as a result of these latest laws, with FWO offering a complete guide on its website.
Fair Work Ombudsman Anna Booth urged those across workplaces to educate themselves on the new laws.
“Employers, employees and independent contractors need to understand the changes, which create new or changed responsibilities and rights in a range of areas,” Booth said.
“We offer free information and advice on the various changes to help all workplace participants.
“The changes substantially increase the penalties which a court can order for non-compliance with a range of workplace laws, by up to five times for non-small business employers.
“This sends a clear message and expectation - employers must invest the time and resources to meet their new legal obligations. We are here to help them get it right.”