11 December, 2023
The Senate has agreed to split the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 (Cth) (“Bill”), passing the first half of the Bill with the less controversial amendments. This EMA Note sets out what this means for your organisation.
The Bill originally included vast amendments to the Fair Work Act 2009 (Cth) (“FW Act”), including changes in response to recent High Court decisions on casual employment and contractors.
The Senate proposed to separate the Bill into two separate parts, and the House of Representatives has agreed to the first half, which includes the less controversial elements of the Bill such as those regarding small business redundancy exemptions, labour hire, introducing workplace delegate rights into modern awards, strengthening protections against discrimination, wage theft, asbestos safety, post-traumatic stress disorder for first responders, and industrial manslaughter.
We set out below some of the key changes that may have a more notable effect on your organisation. If you have any questions about any of the upcoming changes, please contact one of our consultants who will be able to assist you.
Where a host employer has an enterprise agreement, a person may apply to the Fair Work Commission to ensure that any labour-hire worker is paid not less than a ‘protected rate of pay’ determined in the order—which will ordinarily be the same as the rate in the host employer’s enterprise agreement, but may be a different rate if the Commission so orders.
The intention and effect of these amendments is that host employers will be less likely to engage labour hire workers to save on labour costs. There is still nothing to prevent a host employer engaging labour hire workers, but before doing so, it should seek specific advice on the various implications so it is fully aware of the likely costs of doing so.
The Fair Work Commission will be required to amend modern awards to include provisions on workplace delegate rights, and enterprise agreements must also include such a term. While the specifics of the standard term that will go into modern awards has not yet been decided by the Commission (and it will require considerable submissions from interested parties before the Commission makes any determination), the rights set out in the Bill are similar to common terms bargained into enterprise agreements at the moment, providing a workplace delegate with reasonable paid time to assist in disputes and to receive training for those disputes.
If you are currently covered by an enterprise agreement with a term dealing with workplace delegate rights, these changes are unlikely to have a significant impact on your business. If you are covered by a modern award or enterprise agreement without such a term, your union workplace delegates will have some additional rights arising out of these changes; and new enterprise agreements will be required to include a term (or incorporate the model term in the relevant modern award). Once the standard term has been decided by the Commission, we will send an EMA Note to update you on the specifics of the term.
The amendments proposed by the Senate to the Bill also include a minor change to the right of entry provisions to the FW Act. The effect of these changes will be that a union official will be permitted to enter premises if they are accompanying a health and safety representative—even if the union official themselves is not a permit holder. However, if an official enters on this basis, they are doing so for the purpose of assisting the health and safety representative, and the rules around hindrance and obstruction continue to apply.
A common term used in recent times, and something which has been introduced in various state/territory legislation, ‘wage theft’ will be incorporated into the FW Act, creating an offence if an employer engages in conduct that results in an employee not being paid their correct entitlements under the FW Act or a workplace instrument. This will include superannuation contributions.
Notably, if an employer enters into a ‘cooperation agreement’ with the Fair Work Ombudsman, the Ombudsman must not refer the matter to either the Director of Public Prosecutions or Federal Police.
Practically speaking, these amendments should have little effect on organisations to the extent that organisations should already be paying all staff members correctly; however, it will now be more important than ever for employers to ensure that their interpretation of their industrial instruments are correct and implemented correctly into their payroll system, noting that a reasonable mistake of fact will not be a valid defence in a wage theft claim.
If your organisation is concerned that it may have underpaid staff members, it will be imperative to seek advice as soon as practicable to confirm whether there has been any such underpayment based on the rules of the applicable workplace instrument, and if so, what steps the organisation should take to correct the underpayment.
Another relatively common term in recent times, as it has been introduced in various state/territory work health and safety legislation, the amendments will incorporate industrial manslaughter penalties of up to 25 years imprisonment for an individual and up to $18,000,000 for a corporation.
These amendments emphasise the importance of work health and safety, especially so for higher risk industries. Organisations should ensure that they have undertaken up-to-date risk assessments and taken all necessary steps to eliminate or minimise those risks so far as reasonably practicable. Keep in mind that any officer of a company—such as a director of the company—will have due diligence obligations which include staying informed of how the organisation is complying with its safety obligations. Any identified gaps in health and safety must be addressed as a matter of priority.
Edit: Note that these amendments apply to the Commonwealth (including its agencies). These amendments do not affect industrial manslaughter provisions in state and territory workplace health and safety legislation.
This EMA Note is not comprehensive advice about your situation and does not cover all your obligations. If you require further information or advice, please contact your Consultant.
EMA Consulting is not a law firm and therefore does not provide legal advice or services. The information contained within this document and associated material is general in nature and should not be relied upon. If you require specific advice on a particular matter, we recommend that you contact EMA Consulting on 08 8203 1700. Subject to the matter at hand, your EMAC Consultant may recommend that you obtain formal legal advice. If formal legal advice is required, upon your written instruction EMAC will brief your matter to a legal practitioner for this purpose. The contents of this document and associated materials do not represent legal advice.