It is official. As of 26 August 2024, significant changes to the Fair Work Act 2009 (Cth) pursuant to the “Closing Loopholes” reforms are now in place. These reforms affect everything from worker classifications to employee rights and contractor agreements. Here’s what you need to know:
Revised Definitions of “Employee” and “Employer”
The Fair Work Act 2009 (Cth) now prioritises the reality of the working relationship over just the contractual terms. This means that how your workers are treated day-to-day will define whether they’re considered employees, regardless of what their contracts say. Misclassification could lead to severe penalties, including back payments and potential legal action. It’s crucial to revisit and possibly revise your contracts to ensure they accurately reflect the nature of the working relationship under this new framework.
New Right to Disconnect
Employees now have a legal right to disconnect from work-related communications outside of their standard working hours, unless there’s a ‘reasonable cause’ to respond. This reform reflects the growing need to protect personal time in the era of remote work and constant digital communication. Businesses relying on after-hours availability must update their policies and may need to renegotiate employment terms or offer compensation for after-hours work.
Unfair Contracts for Independent Contractors
A new unfair contract regime allows independent contractors earning below a certain threshold to challenge their contracts if they feel the terms are unjust. This shift could see many existing contracts, which were previously enforceable, now coming under scrutiny. Employers must ensure their contracts with independent contractors are fair, transparent, and balanced to avoid them being set aside or varied by the Fair Work Commission.
Redefined Casual Employment
The definition of casual employment has been overhauled to focus on the practical nature of the employment relationship. Casual employees now have stronger rights to request conversion to permanent positions, especially if their work arrangements suggest a more ongoing relationship. This change is expected to lead to more requests for conversion from casual to permanent roles.
New Protections for Gig Economy Workers
The Act introduces significant new protections for “employee-like” workers in the gig economy, such as those working through platforms like UberEATS or DoorDash. These workers now have the right to challenge unfair deactivations and benefit from collective bargaining agreements. This change requires businesses to reassess their engagement strategies and ensure they are compliant with these new standards.
Take Immediate Action
These reforms are now in full effect, and action is recommended to ensure your business is compliant. By reviewing and updating your contracts, policies, and practices, you can protect your business from legal challenges and align with these new requirements. If you need guidance on navigating these changes, Hitch Advisory are here to help you every step of the way. Contact us today to ensure your business is fully compliant and prepared for the future.