Closing Loopholes sees significant changes to the Fair Work Act from December 2023

Closing Loopholes sees significant changes to the Fair Work Act from December 2023

In December 2023, the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 received royal assent, which will see significant changes to the Fair Work Act (Cth) (‘FWA’). The various changes will take effect at different times from December 2023 through to 2025. None of the changes will operate retrospectively.

In this blog, we explore some of the key changes benefitting employees, including:

  1. Criminalisation of wage theft by employers;
  2. Regulated labour hire arrangement orders (RLHAO);
  3. Enhancing delegates’ rights;
  4. Stronger protections for workers experiencing domestic violence;
  5. Conciliation conference orders related to protected industrial action;
  6. Right of entry to assist Health and Safety Representatives;
  7. Amendments to address the harm caused by silica dust;
  8. Streamlining worker’s compensation entitlements for first responders diagnosed with PTSD;
  9. Introducing the new criminal offence of industrial manslaughter and other WHS reforms.

Criminalisation of wage theft by employers

The Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (‘Closing Loopholes Act’) has introduced the criminal offence of intentionally underpaying employees.

This change will apply to employee entitlements under the FWA or a fair work instrument (an industrial Award or enterprise bargaining agreement) but not to sole contractual agreements (individual contracts).

This offence has a maximum of 10 years imprisonment and/or a maximum fine of:

  • three times the monetary amount of the underpayment (if the court can calculate this); OR
  • a penalty of 5,000 penalty units ($1,565,000) for an individual; OR
  • a penalty of 25,000 penalty units ($7,825,000) for a body corporate.

Regulated labour hire arrangement orders (RLHAO)

This amendment allows employees, unions and host employers (the employer where the worker performs their work) to apply to the FWC for an order that labour-hire employees be paid at least the amount they would receive under a host business’ enterprise agreement or public sector determination.

This will only apply if the FWC believes it appropriate that the host’s enterprise agreement would apply to the labour-hire worker if they were directly employed by them. The FWC must consider whether the work that is to be carried out is for the supply of labour and whether the order would be fair and reasonable given all the circumstances. However, RLHAO does not apply when an employee is working for a host business under a training arrangement or if they are a small business employer.

This change should provide improved wages and conditions for labour-hire workers.

Enhancing delegates’ rights

Specific rights and protections have been legislated for workplace delegates (union and employee association representatives) that represent the industrial interests of union members.

Workplace delegates will be able to have sufficient access to interact with members and potential members on industrial concerns, and they will have access to workplace facilities. Protections for the delegates include the prevention of an employer from unreasonably refusing to deal with them, misleading them or stopping or interfering with their workplace rights.

Stronger protections for workers experiencing domestic violence

The amendments aim to strengthen anti-discrimination provisions in the FWA to protect employees who are being subject to domestic and family violence from discrimination in the workplace.

This means that an employer who takes adverse action (including dismissal) against an employee experiencing domestic violence) or does not hire a person because they are experiencing domestic and family violence, will have committed an offence.

Additionally, the amendment criminalises terms in enterprise agreements and modern awards that have a discriminatory effect on people subject to domestic violence.

Small business redundancy exemptions in insolvency situations

Under the National Employment Standards, small businesses (under 15 employees) are not usually required to pay employees who are made redundant.

The changes to redundancy entitlements relate to businesses that go into liquidation or become bankrupt. This is best explained using an example:

  • Company ‘ABC Pty Ltd’ employs 35 staff;
  • Due to a downturn in the amount of work coming into the business, ABC Pty Ltd goes into liquidation.
  • A liquidator is appointed and as part of the liquidation process makes 30 staff redundant. The liquidator retains 5 staff to perform duties to wind up the business over the coming months.
  • ABC Pty Ltd, who originally employed 35 staff, now employs 5 staff. Prior to the changes to the Act, this would make them a small business for the purposes of the National Employment Standards and redundancy obligations. They would have been exempt from paying redundancy to the remaining staff.
  • When the business is formally closed, the 5 remaining staff are no longer employed.
  • Changes to the Act, however, will now make those 5 staff eligible for redundancy pay as they were employed by a non-small business prior to the liquidation.

Conciliation conference orders related to protected industrial action

Before the Closing Loopholes amendments, all employee bargaining representatives (for example, union officials and representatives, sometimes from multiple unions) had to attend a conciliation conference when a protected action ballot order (PABO) was made. Non-attendance meant that any future industrial action by employees would be unprotected (that is, not legal/authorised industrial action).

The amendments mean that only the bargaining representative(s) who applied for the PABO are the ones that need to attend compulsory conciliation, for employee industrial action to be protected.

Right of entry to assist Health and Safety Representatives

There is no longer a requirement for officials of registered organisations (for example, union officials) to have a Fair Work entry permit to help/assist a Health and Safety Representative (HSR).

These people, called HSR assistants, will, however, be required to:

  • adhere to reasonable directions from employers relating to work health and safety;
  • not intentionally stop or interfere with any persons or behave in an inappropriate manner;
  • not misrepresent their HSR assistant rights and entitlements; and
  • not use or distribute information or documents that they obtained from their role as a HSR assistant for any other purpose.

Additionally, employers and/or occupiers cannot refuse or unreasonably delay entry for HSR assistants or stop or interfere with their work in aiding a Health and Safety Representative.

Amendments to the address the harm caused by silica dust

The Closing Loopholes amendments renamed the Government agency responsible for asbestos safety to include the word ‘silica’. The agency is now called the Asbestos and Silica Safety and Eradication Agency.

This renaming, amongst other amendments, demonstrates the agency’s new function in dealing with silica-related incidents. As its new name suggests, the agency will now be able to investigate harm caused to people because of silica exposure.

The agency will now report, monitor and create responses to asbestos and silica disease across Australia.

Streamlining worker’s compensation entitlements for first responders diagnosed with PTSD

First responder workers who have been diagnosed with PTSD by a legally qualified medical practitioner or psychologist and are covered under the Safety Rehabilitation and Compensation Act 1988 (Cth), no longer have to prove that their employment significantly contributed to their diagnosis to be eligible for worker’s compensation.

The definition of first responder includes the following employees:

  • Australian Federal Police;
  • Australian Border Force;
  • Ambulance officers;
  • Firefighters;
  • Emergency service communications operators; and
  • Any other member of an emergency service defined in the Emergencies Act 2004 (ACT),

Introducing the new criminal offence of industrial manslaughter and other WHS reforms

Changes to the Work Health and Safety Act 2011 (Cth) (‘WHS Act’) strengthen the penalties for work health and safety offences which include:

  • A penalty in the Commonwealth jurisdiction of $18 million for a body corporate and 25 years imprisonment for an individual if they are found guilty of industrial manslaughter.
  • Category 1 offence penalties will increase from:
    • $3 million to $15 million for a body corporate;
    • $600,000 to $3 million for a person conducting a business or undertaking (PCBU) or an officer;
    • $300,000 to $1.5 million for any other person.
  • A 39.03% increase to all penalties in the WHS Act.
  • The creation of an indexing method to increase penalties annually in accordance with the national consumer price index.
  • Additional criminal responsibility provisions for body corporates and the Commonwealth.

The amendments also created a Family and Injured Workers Advisory Committee. Their role is to provide advice to the Minister for Employment and Workplace Relations and to Commonwealth work health and safety regulators on what support is needed for people who are affected by serious workplace incidents.

The new criminal offence of industrial manslaughter comes into effect from 1 July 2024.

What do the Closing Loopholes changes mean for workers?

The Closing Loopholes changes are definitely a shift towards improving workplace protections for workers and making employers more accountable for their actions.

Need help with an employment issue?

At Hall Payne, we have an award-winning team of employment lawyers. If you’re in dispute with your employer or you have any employment-related concerns, you should seek advice and assistance early. The sooner you act in relation to a workplace dispute, the better the chances are of a successful resolution.

Contacting Hall Payne Lawyers

You can contact us by phone or email to arrange your consultation; either face-to-face at one of our offices, by telephone or by videoconference consultation.

Phone: 1800 659 114

  This article relates to Australian law; either at a State or Federal level.

The information contained on this site is for general guidance only. No person should act or refrain from acting on the basis of such information. Appropriate professional advice should be sought based upon your particular circumstances. For further information, please do not hesitate to contact Hall Payne Lawyers.

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