Employers, Take Note: Employment Changes Taking Effect

On 1 July 2024, significant employment changes took effect, impacting Australian employers. Major changes include an increase in the Super Guarantee to 11.5%, new rights and protections for workplace delegates, and a new right of entry for unions in the case of suspected underpayments. Additional changes are due to take effect from 26 August 2024, including changes to the definition of casual employment and amendments to the existing casual conversion provisions, along with a new "right to disconnect" for employees. Amended definitions of "employee" and "employer" and new regulations for road transport and gig economy workers are also forthcoming. In this article, we outline these upcoming changes and their anticipated impact on employers.

1 July 2024 – Increase in Superannuation to 11.5%

The Federal Budget in May 2023 maintained the Super Guarantee’s legislated increase to 12%. From 1 July 2024, the?Super Guarantee increased to 11.5%. It will continue to increase by 0.5% on 1?July each year until it reaches 12% in 2025.

Employers continue to have a duty to pay at least the minimum superannuation guarantee contributions to their employees’ superannuation fund. This rate has risen to 11.5% of an employee's ordinary time earnings, as of 1 July 2024. Failure to pay the minimum superannuation contribution amount may result in penalties being imposed on non-compliant employers pursuant to the Superannuation Guarantee (Administration) Act 1992?(Cth).

1 July 2024 – Variation of Modern Awards to Include a Workplace Delegates' Rights Term

The Closing Loopholes changes introduced amendments granting new rights to workplace delegates representing the interests of union members and prospective union members within a workplace. Under the new changes, delegates must have reasonable access to communicate with members and potential members about industrial matters and to use workplace facilities. In non-small businesses, delegates will also have reasonable access to paid time for related training. What constitutes reasonable access will vary based on the size, nature, and resources of the employer's business. The amendments also introduce protections for workplace delegates, ensuring employers cannot unreasonably refuse to engage with them, mislead them, or hinder their activities as delegates.

From 1 July 2024, the Fair Work Commission will introduced modern award terms purposed with ensuring that these rights are appropriately adapted for particular industries and occupations. Enterprise agreements and workplace determinations made after 1 July 2024 must also include a delegates’ rights term. Agreements approved by employees before this date are exempt from including this term.

1 July 2024 – Union Rights of Entry in Relation to Suspected Underpayments

From 1 July 2024, unions are able to obtain an exemption certificate from the FWC to waive the minimum 24-hour notice requirement for exercising the union's right of entry into an employer's premises, if the union reasonably suspects that the wages or entitlements owed to a member of the union have been underpaid by the employer.

Before the FWC will issue an exemption certificate, the Commission must be satisfied that advance notice of entry into the workplace would hinder an effective investigation into the underpayment by resulting in the destruction or concealment of relevant evidence relating to the underpayment.

The FWC does not itself need to be satisfied that there has been an underpayment of wages or entitlements, or that there is a reasonable basis for the union's suspicion that such an underpayment has occurred. Rather, the Commission must simply be satisfied that the union suspects a contravention involving an underpayment in order to grant the exemption certificate.

26 August 2024 – Changes to Casual Employment

From 26 August 2024, the changes with respect to casual employment as introduced by the Closing Loopholes amendments will come into effect. A new definition of "casual employee" will come into effect which focuses on the practical reality of the employment relationship rather than strictly on the terms of the written employment contract. An employee will now be considered "casual" if there is an absence of a firm advance commitment from the employer to ongoing, indefinite work and if the employee is entitled to a casual loading or specific rate of pay for casuals. Whether there is a firm commitment of ongoing work is to be assessed according to the real substance and nature of the employment relationship, the employer's and employee's ability to elect to offer to accept work, the likely availability of future continuing work, the presence of permanent employees doing similar work, and regular work patterns, although regular patterns alone will not indicate a firm commitment.

Additionally, the amendments replace the existing casual conversion provisions with "employee choice" provisions. From 26 August 2024, casual employees can request a change to permanent full-time or part-time status after six months, or twelve months for small businesses, by providing written notification to their employer. Employers must consult with the employee and respond within 21 days, detailing whether they accept or reject the request and providing reasons for any refusal. Employers can refuse based on the employee still fitting the casual definition or on operational grounds. These changes, effective from 26 August 2024, shift the responsibility to employees to request permanent status, rather than requiring employers to proactively offer it.

26 August 2024 – Right to Disconnect

From 26 August 2024 (or 26 August 2025 for small businesses), employees will have a workplace right to refuse to monitor, read or respond to contact by employers or third parties outside of their working hours, unless such a refusal is unreasonable.

An employer who takes adverse action against an employee because that employee exercises their right to disconnect may be exposed to a general protections claim brought by the employee.

Employers and employees will both be able to seek orders from the Fair Work Commission with respect to a dispute arising from an employee exercising their right to disconnect.

26 August 2024 – Definition of Employment

The Closing Loopholes changes will amend the definition of "employee" and "employer" under the Fair Work Act so that the courts must now have regard to the “real substance”, “practical reality” and “true nature" of the working relationship when considering whether a worker is an independent contractor or an employee.

The amendment expressly reverses the 2022 decisions of the High Court, which ruled that primacy was to be given to the written terms of the contract when determining where a worker was an employee or independent contractor. Under the new approach, how the contract is performed in practice must be considered by the court.

26 August 2024 – "Regulated workers" (road transport and digital labour/gig economy)

The Closing Loopholes amendments introduced significant workplace reforms covering the road transport industry and the gig economy, with these changes due to commence on 26 August 2024, or an earlier date fixed by the government. These reforms will provide a new framework of rights for "regulated road transport contractors" and "employee-like" workers who would otherwise be classed as contractors in the road transport industry and gig economy.

The Fair Work Commission will also be able to make minimum working standards orders and guidelines which deal with matters including payment terms, deductions, record-keeping, insurance, consultation requirements and delegates' rights. Orders cannot be made with respect to overtime rates, rostering arrangements penalty rates and loadings, minimum engagement periods.

Employee-like workers who have performed work on a regular basis through a digital labour platform for at least 6 months, and who earn less than the "contractor high income threshold" will be able to make an unfair deactivation claim, if their access to the digital platform is deactivated. This process will be similar to the current unfair dismissal protection afforded to employees.

If you would like further advice on how best to navigate these recent changes to the Fair Work Act 2009, or how these changes might affect you or your business, please contact the experienced Employment Law Team at Hunt & Hunt Lawyers on 9391 3113.

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