The Closing Loopholes And Other Reforms: The Many Changes To IR Laws That Will Impact Business In 2024


As we usher in 2024, there are a number of notable changes to the laws governing the workplace that will affect the way in which organisations conduct their business. These changes have been driven by the current Labour Government’s desire to reform the Australian workforce to deal with discrimination at work, wage theft, engagement of employees and a number of other matters. Major changes include amendments to the Fair Work Act 2009 (Cth) (“Act”), passed in late 2023 under the Fair Work Legislation Amendment (Protecting Worker Entitlements) Act 2023 (Cth) (“Worker Entitlements Act”) and the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Cth) (“Closing Loopholes Act”).

The Worker Entitlements Act

The current Labour Government presented the Worker Entitlements Act as a means to enhance worker entitlements and streamline administrative process. On 30 June 2023, the new legislation received royal assent with some amendments taking effect in 2023 and others in 2024.

The key changes include:

Superannuation Entitlements:

As of 1 January 2024, all employees are entitled to superannuation in accordance with amendments to the Act. These changes standardise superannuation entitlements by incorporating into the National Employment Standards the requirement to make superannuation contributions to employees (NES). Accordingly, employers must ensure that all employees are receiving superannuation payments in accordance with the superannuation guarantee legislation. This means that all employees are now able to pursue a claim for underpaid superannuation in much the same way as they are able to pursue unpaid wages, as a breach of the NES, and the Workplace Ombudsman will now have jurisdiction to deal with complaints regarding unpaid superannuation.

Authorised Employee Deductions:

As of 30 December 2023, employees only need to provide written authorisation once to approve reoccurring and varying deductions from their remuneration benefits. This amendment works to simplify the process which allows employers to set-off deductions from salary or wages. It is important to note that unless the employer has written consent from an employee to deduct amounts from their remuneration, such deductions are not allowed and will constitute a breach of the Act.

The Closing Loopholes Act

On 14 December 2023, the Closing Loopholes Act received royal assent and introduced a number of amendments to the Act. The approved amendments were originally part of the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023, however this Bill was split in two, leaving the Fair Work Legislation Amendment (Closing Loopholes No.2) Bill 2023 (“Bill”) with more controversial proposals before Parliament to be considered this year.

Employers should take note of key amendments introduced by the Closing Loopholes Act, including:

Small Business Redundancy Exemption

As of 15 December 2023, small businesses who are the subject of an insolvency event, may need to provide redundancy payments to their employees in accordance with s 121(4) of the Act. Prior to the amendment, small businesses were exempt from providing redundancy payments. However, the new provisions safeguard redundancy entitlements for employees who work for larger businesses that have become a small business, due to insolvency event. This amendment is aimed at protecting employees who stay on to assist a larger business wind up its affairs, or transition to liquidation, in circumstances of insolvency.

Rules For Labour Hire Workers

As of 15 December 2023, the Fair Work Commission may make “same job same pay orders” relating to labour hire arrangements. Specifically, the Commission can now make orders requiring labour hire employers to pay their employees the same rate of pay as employees of the host employer, who perform the same work, if the host employer is covered by an industrial agreement other than a modern award. It is important to note that this amendment will apply to any entity supplying employees to a third party (example a secondment) as long as the employee is not providing a service. However, orders do not come into force until 1 November 2024.

Workplace Delegates’ Rights

The Act has been amended such that as of 15 December 2023, it now requires employers to allow workplace delegates to communicate with other employees who are current or prospective union members. In order to facilitate such communication, the Act requires that workplace delegates are provided:

  • a right to represent employees who are current and prospective members of the union;
  • reasonable access to the workplace and workplace facilities to conduct their duties as workplace delegates; and
  • Other than small business employers, reasonable access to paid time, during normal working hours for the purpose of undertaking training in relation to the role of a workplace delegate.

As of 1 July 2024, modern awards will incorporate these new workplace rights for union delegates. Following 1 July 2024, enterprise agreements will be required to incorporate the same delegate rights stipulated in the modern awards.

Discrimination Protections

As of 15 December 2023, protections for employees experiencing family and domestic violence have been strengthened. It is now unlawful for employers to take adverse action against current or future employees because they are experiencing (or have experienced) family and domestic violence. In addition, the Act now prohibits the termination of employment on the basis that the employee has been or continues to be subjected to family and domestic violence.

The Act also prohibits the inclusion in modern awards or enterprise agreements, of terms that discriminate against a person because the person has been the subject of family or domestic violence.

The Act now includes family and domestic violence as one of the prescribed attributes that the Commission must consider when performing its functions to help prevent and eliminate discrimination.

It is worth noting that changes to the Sex Discrimination Act (Cth) 1984, came into effect on 12 December 2023. These changes introduced a positive duty on employers to take reasonable and proportionate measures to eliminate sexual harassment, harassment on the basis of sex, victimisation and hostile work environments from the workplace.

The amendments introduced by the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Act 2022 (Cth), came into effect on 12 December 2023, and pursuant to the amendments to the Australian Human  Rights Commission Act 1986 (Cth), the powers of the Commission have now been greatly increased such that it can enquire into employer compliance with respect to the positive duty, issue compliance notices, apply to the Court for orders directing compliance; and enter into enforceable undertakings.

Changes to Workplace Health and Safety and Workers Compensation

As of 15 December 2023, amendments introduced by the Closing Loopholes Act to the Commonwealth Work Health and Safety Act 2011 (Cth) and the Safety, rehabilitation and Compensation Act 1988 (Cth), amongst other things, introduces the offence of industrial manslaughter and increase protections to first responders experiencing post-traumatic stress disorder.

Right of Entry – assisting health and safety representatives

As of 15 December 2023, an amendment to the Act allows officials of a trade union or employee organisation to enter a workplace without a permit, if the purpose is to assist a health and safety representative of the workplace, and such assistance has been requested by the health and safety representative.

Criminalising Intentional Wage Underpayment

The Closing Loopholes legislation amends the Act, to introduce criminal liability for intentional wage theft. From 1 January 2025, companies may be found guilty of intentional wage theft if:

  1. The employer is required to pay an amount to the employee under the Act, an industrial instrument (modern award, enterprise agreement or workplace determination) and the employer fails to make the payment; and
  2. the employer intentionally engaged in the act or omission and intended that it result in the failure to make payment; and

Worthy of note, it is possible that an employer can rely on a defence of ignorance or mistake, if they can show that they did not intend the act or omission to result in an underpayment.

For a company, the offence is punishable with a fine of the greater of three times the amount owing (assuming the underpayment amount can be established) or $7.825 million, and if the Court cannot determine the underpayment liability, $7.825 million.

As to an individual, if found guilty, they may be imprisoned for up to 10 years or face a fine of the greater of three times the amount owing (assuming the underpayment amount can be established) or $1.565 million, and if the Court cannot determine the underpayment liability, $1.565 million.

It should be noted that only the Department of Public Prosecutions or Australian Federal Police are able to commence a prosecution of intentional wage theft under the Act, and must do so within 6 years of the contravention.

Notably a Voluntary Small Business Wage Compliance Code will be established in 2025 that will shield small businesses from criminal liability, if they have complied with the Code.

In addition to enforceable undertakings and compliance notices, the Fair Work Ombudsman may also enter into written agreements, known as Cooperation Agreements regarding conduct that the person has self-reported as being a possible intentional wage theft. This will have the effect of preventing the matter being referred for possible prosecutorial proceedings. It will not however prevent the Fair Work Ombudsman from pursuing civil liability.

Fair Work Legislation Amendment (Closing Loopholes No. 2) Bills 2023

As mentioned above, the Fair Work Legislation Amendment (Closing Loopholes) Bill was split with only part of the original Bill becoming law. The part that remains in Bill form is known as the Fair Work Legislation Amendment (Closing Loopholes No. 2) Bill (“Second Bill”). We will look at the changes that are contemplated by the Second Bill in our next publication, however as a precursor to this, the matters covered include:

  • A new ordinary meaning of “employee” and “employer” – designed to change the current test for determining whether a person is an employee or independent contractor;
  • New provisions to be introduced into the Act to protect GIG workers and road transport contractors;
  • A new definition of a “casual employee” and protections for casual employees;
  • introduction of a new jurisdiction to challenge unfair contract terms for independent contractors; and
  • Changes to enterprise agreement making and the power of the Commission, in circumstances of intractable bargaining determinations.

Key Takeaways

The changes brought by the various amendments discussed above are far reaching and may have practical for almost all areas of your business. In this regard, we suggest employers take the following proactive steps:

  1. Ensure that they are paying superannuation appropriately;
  2. Ensure they are aware of the modern awards covering their employees and the business is compliant;
  3. Consider whether accommodation needs to be given to union delegates to ensure compliance with the new obligations. In this regard, we recommend employers carefully consider the possibility of increased union activity and what this may mean for their business; and
  4. Review employment contracts and policies to ensure they are compliant with changes to the discrimination laws and other changes, including the prohibition on fixed term contracts for a duration exceeding 2 years.

If you wish to discuss any aspect of this client alert, require specialist advice in relation to determining whether your business will be affected by these amendments, or assistance reviewing current employment practices or processes, please do not hesitate to contact us.

This alert is not intended to constitute, and should not be treated as, legal advice.

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