Closing Loopholes’ Laws - 26 August 2024

There have been changes to the Fair Work Act as part of the new ‘Closing Loopholes’ laws which have taken place from 23 December 2023 and will continue until August 2025.

Those commencing from 26 August 2024 which may impact GTOs are noted below. These changes are part of the Fair Work Legislation (Closing Loopholes No. 2) Act 2024 amendments.

Right to Disconnect

The Fair Work Commission has settled on the wording of a 'right to disconnect' term which was inserted into 155 modern awards. The award variation came into operation on and takes effect from 26 August 2024.

In July, the Commission published a draft term for the Business Equipment Award 2020, explaining how it could be adapted across all awards. A subsequent consultation process received 18 submissions.

As a result of these, a Full Bench of the Commission issued a decision on 23 August 2024, stating: "We have determined not to make any fundamental changes to the draft term, which is intentionally minimalist in nature reflecting the novelty of the right to disconnect and the likelihood that future variations to the term in particular awards will be necessary once the issues affecting specific industries and occupations are better understood."

The finalised term begins:
**XXA. Employee right to disconnect.
------------------------------------------------------------
** XXA.1 Clause XXA provides for the exercise of an employee’s right to disconnect under section 333M of the Act (http://www.legislation.gov.au/Series/C2009A00028).
------------------------------------------------------------

NOTE:
(a) Section 333M provides that, unless it is unreasonable to do so, an employee may refuse to monitor, read, or respond to contact, or attempted contact, from:

their employer outside of the employee’s working hours,
a third party if the contact or attempted contact relates to, their work and is outside of the employee's working hours.

(b) Section 333M (3) lists matters that must be taken into account in determining whether an employee’s refusal is unreasonable.
(c) Section 333M (5) provides that an employee’s refusal will be unreasonable if the contact or attempted contact is required under a law of the Commonwealth, a State, or a Territory.
(d) Section 333N provides for the resolution of disputes about whether an employee’s refusal is unreasonable and about the operation of section 333M.
(e) The general protections in Part 3–1 of the Act prohibit an employer taking adverse action against an employee because of the employee’s right to disconnect under section 333M of the Act.

Source: FWC

Further subclauses set out that:

the term will apply from 26 August 2024 for non-small employers and from one year later for small employers.
an employer must not directly or indirectly prevent an employee from exercising their right to disconnect under the Fair Work Act.
an employer is not prevented from requiring an employee to monitor, read or respond to out-of-hours contact if they are being paid a stand-by allowance or if the contact is related to the stand-by; and
an employer is not prevented from contacting an employee about an emergency roster change, or a recall to work.

The bench also confirmed that it did not intend to make guidelines about the right to disconnect "at the present time".

"We consider that the Commission will be in a better position to make guidelines once it has dealt with at least some disputes concerning the operation of the right, since this will allow it to have some understanding of the practical issues for which guidance may be required."

The terms will be reviewed in approximately 12 months, the bench said.
"This will give parties the opportunity to raise any practical difficulties which they perceive have arisen in the operation of the terms either generally or in particular industries or occupations. This does not of course prevent any party withstanding to do so from applying to vary the terms in particular awards pursuant to s 158 of the FW Act prior to that review."

Additionally, the Commission has inserted a note in the form of a table at the end of existing dispute resolution clauses to alert readers to s 333N, which prescribes a procedure for resolving disputes about an employee’s right to disconnect. This table incorporates existing notes about the statutory dispute resolution procedures for the entitlements to request flexible working arrangements and extensions to unpaid parental leave.

GTOs should ensure that when host employers are aware of their obligations under the right to disconnect provisions when communicating with apprentices and trainees out of hours.

Changes to Definition of "employment"

Section 15AA of the Fair Work Act 2009 took effect from 26 August 2024. It sets out how to determine whether a relationship is an employment relationship for the purposes of the Fair Work Act. The new ordinary meaning of employee assesses the real substance, practical reality, and true nature of the relationship between the worker and the employer.

This reverts to the common law multi-factorial assessment which considers the written terms of the contract and how the services are performed in practice.
While there is no exhaustive list, key factors for the multi-factorial assessment include:

the degree of control over, or the right to control, the worker;
whether the worker exclusively performs work for the principal;
whether the worker permitted to delegate or subcontract work;
who bears financial risk and insurance in the arrangement;
whether the worker is provided with tools and equipment;
whether there is an expectation of continuing work;
how the worker is remunerated (for example, if they are paid based on time worked rather than work performed and how taxes are managed);
whether the worker is required to wear a uniform or display material which associates them with the principal business; and
whether the worker can decide their working hours

Under the new ordinary meaning, some relationships may be characterised differently which may result in different rights and obligations for the affected workers. For example, workers whose services were previously engaged as independent contractors may have their engagement status reclassified as an employee which carries its own separate rights and obligations.

Changes to " Casual Employee"

On 26 August 2024, the definition of casual employee was changed to consider the real substance, practical reality, and true nature of the employment and rather than just the terms of the written employment contract.
An employee will now only be defined as a casual employee if:

there is an absence of a firm advance commitment to continuing and indefinite work; and
the employee is entitled to casual loading, or a specific casual rate of pay.

Employees who start work as a casual employee remain as such until a specified event occurs to change the nature of their employment e.g. electing to convert to a permanent employee in accordance with casual conversion provisions in the relevant award.
For casuals employed from 26 August 2024, the new casual employee definition will apply.

Click here for the FWO Casual Employment Fact sheet

Fair Work Ombudsman Update

Right to Disconnect

Changes to Definition of "employment"