The Closing Loopholes Bill tabled in October 2023 proposed some of the most significant changes to industrial relations law in Australian history.
Federal Government split the Bill into 2 parts, with the Part 1 of Closing Loopholes Bill passed on Thursday 7 December 2023. Part 2 of the Bill is potentially expected to pass in February 2024.
Below is a summary of the Key Takeaways for Employers of Part 1 of the Bill passed:
1. Same Job, Same Pay
There was a loophole that allowed some employers to pay labour hire employees differently to those they employ directly. The amendments close this loophole by regulating labour hire arrangements.
The changes have determined that if a Host Employer’s Enterprise Agreement terms are better than the employment terms of the Labour Hire Employee; the Fair Work Commission can enforce equivalent rates and conditions as if they were an employee that was directly employed by the Host Employer.
The change also imposes a number of other obligations on Host Employers. Labour Hire Workers who are paid higher rates than directly employed workers would not be affected. This obligation only applies if the Commission has made an order against the Labour Hire Agency.
First orders will be effective from 1 November 2024, however, applications for an order will commence within the new year.
2. Increased Penalties and Criminalisation of Underpayments
Intentional wage theft will now be criminalised, in which an employer has intentionally engaged in the act or omission of underpayments. The penalties are:
- Where an individual is found to be guilty, up to 10 years jail time or a fine of the greater of 3 times the underpayment amount or $1.565M can be imposed.
- Where a company is found guilty, a fine of the greater of 3 times the underpayment amount or $7.825M can be imposed.
The criminal provisions will commence 1 January 2025 (or earlier).
Family and domestic violence is now a protected attribute under anti-discrimination law. The new provisions prevent an employer from taking adverse action against an employee on the basis that they are subject to family and domestic violence.
4. Small business redundancy exemption
The legislation closes a pre-existing loophole where Large Businesses subject to a winding up order or downsizing due to insolvency were claiming the Small Business redundancy exemption.
There are now more comprehensive restrictions within the act that prevents a Large Business from claiming this exemption if they are trading insolvent, in liquidation, or become classified as a Small Business due to the termination of one or more employees occurring on or after 6 months before the employer became bankrupt or went into liquidation.
The changes also ensure that administrators or insolvency practitioners wind up the business as quickly as possible to prevent them from relying on the existing loophole.
A Business is considered a Large Business if they employ 15 or more employees, Small Businesses employ less than 15 employees.
5. Union delegate rights for employees
Increased rights and protections for union delegates, including the right to represent the industrial interests of members of the union, reasonably communicate with members in relation to their industrial interests, and reasonably access paid time off for the purpose of union delegate training.
Furthermore, union delegates are protected from unreasonable hindrance, obstruction, and prevention of exercising their rights. This includes failing or refusing to deal with a union delegate, or knowingly and recklessly making false or misleading representations to a union delegate.
6. Industrial Manslaughter now included in the Work Health and Safety Act 2011 (Cth)
The amendments mean that Industrial Manslaughter will be federally criminalised. Corporations may be imposed with a fine of $18 million, and individuals may face up to 25 years in jail if gross negligence or recklessness is found to have contributed to the death of a worker.
These changes will come into effect from 1 July 2024.
Should you need support with understanding the recent changes to the Closing Loopholes legislative changes or how these changes apply to your business, contact one of our HR and Health and Safety experts at WCA Solutions on 08 9383 3293.