As of the 14 December 2023, the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 has received royal assent.
This brings about significant changes to the Fair Work Act 2009 (FW Act) that employers should be aware of, effective from 15 December 2023 including:
- The Fair Work Commission (FWC) now has the authority to issue labour hire orders.
- Workplace delegates who are employees now have expanded rights and protections and access to paid time off for training.
While the changes relating to labour hire are now in effect, the most contentious requirement whereby labour providers must pay employees covered by a labour hire order the same amount as under the host business’ enterprise agreement (same job, same pay or ‘projected rate of pay’), will not commence until 1 November 2024.
This means that although the FWC can issue a labour hire order right away, the requirement to pay the protected rate of pay under such an order will not begin until 1 November 2024. This will give employers time to prepare themselves for the changes in systems, procedures and contracts that will be required to ensure compliance with the new law.
We will provide our members with a more detailed explanation of the labour hire changes and how to ensure compliance with this new requirement in due course.
In addition to the major changes, some minor and less contested amendments have also been made to the FW Act and are in effect from 15 December 2023, such as:
- The small business redundancy exemption under the ‘Fair Entitlements Guarantee’ has been revised.
- Anti-discrimination protections for victims of family and domestic violence have been strengthened.
- The impact of compliance with the FWC’s mediation and conciliation conference orders on industrial action will change.
- Union officials can now more easily enter workplaces with regard to workplace health and safety (WHS) matters.
We note that although it has been passed that the intentional underpayment of wages and superannuation will be criminalised, this does not come into effect until 1 January 2025, unless the Minister fails to prescribe the Voluntary Small Business Wage Compliance Code by that date.
Please see below table for further information on each of the above changes:
| Measure | Description | Impact | Commencement |
| Small Business Redundancy | There is a small business redundancy exemption for claims under the Fair Entitlements Guarantee. This change amends the exemption to ensure that larger employers that downsize and become small businesses because they fall below the 15-employee threshold in the period leading up to insolvency are not exempted (s 121 FW Act). | The change will ensure that employees of larger businesses are entitled to redundancy pay even if their employer downsizes before becoming insolvent. Overall, this change will not have any significant impact on most NECA members. | 15 December 2023 |
| Labour Hire | The FWC will be given new powers to make orders covering arrangements that involve the supply of labour between businesses (s 306E FW Act). Under these orders, the business supplying the workers will be required to pay the labour resource the same amount as the person would be entitled to if they were an employee of the host business covered by the host business’s enterprise agreement (s 306F FW Act). Host businesses will also have associated new obligations, such as needing to provide information to the labour provider (s 306H FW Act). | Businesses that use labour hire or similar arrangements will be at risk of an application for a labour hire order being made by a worker or union. Where a labour hire order is in place, businesses may face substantial additional costs in administration and labour. Businesses that supply labour to other businesses principally for the provision of services may be exempted from the orders, however, they may be at risk of having to demonstrate the applicability of the exemption to the FWC. New systems, procedures and contract and enterprise agreement terms may be required to ensure compliance with this new requirement. | 15 December 2023 However, the requirement for labour providers to pay the supplied workers the same rate of pay as a host employee would receive does not commence until 1 November 2024. |
| Workplace Delegates Rights | Union delegates will obtain a series of new workplace rights and protections (s 350A FW Act), including access to paid time off for training (s 350C FW Act). The FWC will insert further new rights in all modern awards on an industry-basis that must then be replicated in enterprise agreements. | Businesses will face greater exposure to legal claims when dealing with union delegates. Employers will need to take care to ensure they do not unlawfully refuse to deal with, make misleading statements to, or hinder the exercise of rights of a union delegate as well as provide access to paid time off for training. | 15 December 2023 |
| Anti-Discrimination | A new protected attribute of “subjection to family and domestic violence” will be inserted into the FW Act. Employers would be prohibited taking adverse action against (s 351 FW Act) or terminating the employment of a person on the basis of this new attribute (s 772 FW Act). | Most of the conduct now explicitly prohibited was already included in other anti- discrimination law or FW Act protections. The impact on most employers will be negligible. NECA did not contest this change. | 15 December 2023 |
| FWC Mediation and Conciliation Orders | Non-compliance with an order by the FWC to attend a mediation or conciliation conference prior to a protected action ballot will no longer make subsequent industrial action taken by employees unprotected, unless it was the bargaining representative who applied for the protected action ballot who did not comply with the order (s 409 FW Act). | Employees will still be able to take protected industrial action even if some bargaining representatives disobey an order of the FWC to attend a conference. This change will only impact some NECA members in these relatively uncommon circumstances. | 15 December 2023 |
| WHS Right of Entry | Union officials will no longer need an entry permit or to comply with other FW Act requirements to enter a workplace to assist a health and safety representative perform their functions under state or territory WHS law (s 494 FW Act). | Union officials will be able to enter workplaces more easily and more attention will be paid by unions to the role of health and safety representatives. Employers will need to be aware of this change to avoid penalties for refusing or unduly delaying the entry of union officials into workplaces who now have a right to do so. | 15 December 2023 |
| Wage Theft | The intentional underpayment of wages, allowances, superannuation and other amounts employers must pay employees will be criminalised (s 327A FW Act). The maximum penalties for the offence will be 10 years imprisonment or the greater of 3 times the amount of the underpayment and $1,565,000 ($7,825,000 for body corporates), or both. | Employers who intentionally underpay employees will be at risk of criminal investigation and penalties under this new law. In some circumstances, employers who deliberately delay payments to employees (even if for good faith reasons) may also be at risk of criminal liability and prosecution. Small businesses will be able to comply with a prescribed Voluntary Small Business Wage Compliance Code that will provide them with safe harbour from criminal investigation (s 327B FW Act). | 1 January 2025 or on the date the Minister declares the Voluntary Small Business Wage Compliance Code (whichever is later). |
This summary is a guide only and is not legal advice. If you require assistance with updating your sexual harassment policy to align with the new Positive Duty Obligation, please contact us on 02 9021 9699.