Closing Loopholes Legislation
Key changes taking effect from 15 December 2023
In late 2023, the Federal Government passed the first of two tranches of legislation (Closing Loopholes Legislation) which introduced major changes to the Fair Work Act 2009 (FW Act) and other laws relating to Australian workplaces. These changes came into effect from 15 December 2023 with more to follow at various intervals until 1 January 2025. The following slides provide an outline of some of the more salient aspects of the first tranche of the Closing Loopholes Legislation.
The first tranche of the Closing Loopholes Legislation includes changes relating to:
- Criminalising intentional wage underpayments or late payments (wage theft)
- Regulating certain labour hire arrangements
- Introducing stronger protections against unlawful discrimination and adverse action
- Enhancing union official’s rights of entry to assist Health and Safety Representatives
- Addressing technical issues relating to small business redundancy exceptions
Criminalising wage theft
The change: From 1 January 2025, it will be a criminal offence under the Closing Loopholes Legislation for employers to intentionally underpay or intentionally fail to make payment on due date of wages and entitlements to their employees under an industrial instrument or to do so in relation to superannuation contributions.
What does it mean?
- Miscalculations or an honest mistake will not be considered a wage theft offence
- A Voluntary Small Business Wage Compliance Code will be developed to assist small businesses who may have inadvertently underpaid a worker (while being compliant with their obligations)
- Cooperation agreements will be made available to employers who have self-reported this conduct. However, the Fair Work Ombudsman will look into other factors before offering this arrangement
Regulated labour hire arrangement orders
The change: Certain labour hire employees are allowed to apply to the Fair Work Commission (FWC) for an order to be paid at least what they would receive under a host’s enterprise agreement or an equivalent public sector determination. The FWC can only make an order if satisfied that the agreement applies to the labour hire worker’s circumstances. The changes, however, do not apply to employees working for a host business under a training arrangement or for a small business with less than 15 employees.
What does it mean?
The changes do not impact the wages of host employees or labour hire employees (as part of the Closing Loopholes Legislation updates) who are already being paid what they would receive under the host employer’s enterprise agreement. These changes commenced on 15 December 2023. However, any regulated labour hire arrangement order that may be made will only be effective until at least 1 November 2024.
Stronger protections against discrimination and adverse action
The change: The list of protected attributes in the FW Act has been amended to include protections against discrimination for employees experiencing family and domestic violence.
What does it mean?
The change strengthens the Act to protect those employees who have been, or are facing family and domestic violence, from being discriminated against or being treated unfairly in the workplace.
It is now unlawful for an employer to take adverse action against an employee or potential employee (including dismissing an employee or refusing to hire a prospective employee) because they have been, or are being, subjected to family and domestic violence.
It is also prohibited to include any terms in enterprise agreements and modern awards that discriminate against a person on the basis of that person experiencing family and domestic violence.
These changes came into effect on 15 December 2023.
Entry to assist Health and Safety Representatives
The change: From now on, Health and Safety Representatives (HSRs) may be able to request the assistance of a union official (HSR assistant) to perform their role in the workplace under state or territory health and safety laws even if that union official does not have a Fair Work Act right of entry permit. It is the employer’s duty to provide such an HSR assistant access to the workplace in order for the assistance to be provided.
What does it mean?
The changes arise as a commitment to improve health and safety in the workplace, by enabling officials of registered organisations to provide assistance to an HSR in the workplace (without requiring a Fair Work entry permit).
Small Business Redundancy Exceptions
The change: Prior to the first tranche of the Closing Loopholes Legislation, businesses who had more than 15 employees or more were obliged to make redundancy payments to employees whose employment was terminated because of redundancy.
What does it mean?
However, in the course of downsizing because of insolvency, those businesses would become a small business (i.e. they would have fewer than 15 employees) and would therefore be exempted from the obligation . Under the changes, from 15 December 2023, employees of a business that was not previously a small business and which becomes a small business because of insolvency, will not lose their right to receive redundancy pay.
The second tranche of the Closing Loopholes Legislation will be published soon. Follow us on LinkedIn to never miss an update from our series, #InTheNews
Where to next?
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