• Legislation & regulations

Labour hire providers and hosts should be aware of changes to the Fair Work Act 2009 to ensure they continue to meet their legal obligations.

Some of these changes are already in effect, while others come into effect later in 2024 and into 2025.

These changes are in addition to recent Fair Work Act changes introduced last year.

More information on the changes is available on the Fair Work Ombudsman (FWO) website.

Increased civil penalties for underpayments

From 27 February 2024, there will be a five-fold increase in the maximum civil penalties that courts may impose for underpayments and sham contracting, rising to $469,500. These penalties can apply against companies that are not small business employers.

There will also be an increase in the maximum civil penalty a court can order for failing to comply with a Fair Work Ombudsman issued compliance notice.

Compliance notices

From 27 February 2024, there will be a change clarifying that Fair Work Ombudsman compliance notices can require an employer to calculate and pay the amount of an underpayment that is owed to an employee.

Often, the burden of calculating underpayments in a backpay claim falls to workers or the Fair Work Ombudsman — this puts the onus on the employer.

Enterprise bargaining and agreements

From 27 February 2024, multiple employers who are franchisees of the same franchisor (or related bodies corporate of the same franchisor) can access the single-enterprise stream in the enterprise bargaining framework if they want to.

There will be new rules allowing the transition from a single-interest employer agreement, or supported bargaining agreement, to a single-enterprise agreement.

From 27 February 2025 or an earlier date set by the Australian Government, the Fair Work Commission must determine the model flexibility, consultation and dispute resolution terms for enterprise agreements taking into account prescribed matters.

The Fair Work Commission can also now vary and replace these model terms.

Sham contracting

From 27 February 2024, there are changes to the defence to misrepresenting employment as an independent contractor arrangement.

The current test that an employer didn’t know and wasn’t ‘reckless’ when entering into sham contracting arrangements will change to a test of ‘reasonably believed’ — meaning the employer thought it was an independent contracting arrangement (with certain factors applying).

For more information on sham contracting, visit Employee or independent contractor? Know the rules and classify workers correctly.

Right of entry exemption certificates

From 1 July 2024, a registered organisation (such as a union) will be able to get an exemption certificate from the Fair Work Commission to waive the 24 hours’ notice requirement for entry to investigate suspected underpayments.

This applies where advance notice would interfere with the investigation.

There are also new powers for the Fair Work Commission to impose conditions on entry permits and exemption certificates.

Minimum standards for ‘employee-like’ workers

From 26 August 2024, there will be a new framework for protecting the interests of certain workers in the gig economy.

These workers are called ‘employee-like workers’ and are independent contractors who perform work through a digital labour platform and who have low bargaining power, low pay or little say in how they perform their work.

The Fair Work Commission will be able to set fair minimum standards for these ‘employee-like workers’ by making minimum standards orders or guidelines. They will also be able to deal with disputes on unfair deactivation of an ‘employee-like worker’ from a digital labour platform.

Registered organisations (like a union) representing ‘employee-like workers’ will be able to make collective agreements with digital labour platform operators.

Casual employment

From 26 August 2024, the existing definition of ‘casual employment’ in the Fair Work Act will be replaced by a new definition that says that an employee is a ‘casual’ only if:

• 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 entitled to be paid a casual loading or a specific pay rate for casuals.

A new pathway will replace the existing rules for eligible employees to change to permanent employment if they want to.

There will also be new rules against:

• dismissing or threatening to dismiss workers to engage them as a casual
• making certain misrepresentations in relation to casual employment.

Right to disconnect

From 26 August 2024 for non-small business employers, and from 26 August 2025 for small business employers, eligible employees will be given a new ‘right to disconnect’ outside of work hours.

Employees will have the right to refuse to monitor, read or respond to contact (or attempted contact) from an employer or a third party outside of their working hours, unless that refusal is unreasonable.

Rules will apply when determining whether an employee’s refusal is unreasonable or not.

Employers and employees will be able to go to the Fair Work Commission to seek orders on this right.

Definition of employment

From 26 August 2024 or an earlier date set by the Australian Government, new definitions of ‘employee’ and ‘employer’ will be added into the Fair Work Act.

When determining whether a worker is an employee or an independent contractor, consideration must be given to the:

• real substance, practical reality and true nature of the relationship
• whole relationship between the parties, including the terms of the contract and how the contract is performed in practice.

There will be some exceptions to the application of the new definitions. This includes that certain workers will be able to ‘opt out’ of being employees through a notification process if they earn more than the contractor high income threshold, which hasn’t been set yet.

Independent contractors

From 26 August 2024 or an earlier date set by the Australian Government, the Fair Work Commission will be able to deal with disputes about unfair terms in a contract that an independent contractor is a party to (known as a services contract). This will apply if the independent contractor earns less than the contractor high income threshold, which hasn’t been set yet.

Independent contractors who earn above the contractor high income threshold will continue to have access to remedies for unfair or harsh contract terms under the Independent Contractors Act 2006.

Criminalising intentional wage underpayments

From not before 1 January 2025, and conditional on a Ministerial declaration, intentional underpayments of wages by employers will become a criminal offence with serious consequences.

For a company, a maximum fine of $7.825 million or three times the amount of the underpayment, whichever is greater, can be imposed.

For individuals, a maximum of ten years in prison and/or a fine of $1.565 million or three times the amount of underpayment, whichever is greater, can be imposed.

The Fair Work Ombudsman will be responsible for investigating suspected underpayment offences.