Stay Compliant: Key Changes from the Closing Loopholes Bill Effective 26 August 2024

The Fair Work Legislation Amendment (Closing Loopholes Bill No. 2) Act 2024 has been making waves since it passed through Parliament in February. With several changes already in place and more on the horizon, it’s important to stay on top of what’s coming, especially with the next round of updates kicking in later this month and in 2025.

We’ve put together a friendly guide to help you understand some of the key changes coming your way from 26 August 2024, along with a few pointers on what they mean for your business:

1. The Right to Disconnect

Starting 26 August 2024 (or 26 August 2025 for businesses with fewer than 15 employees), employees will officially have the right to unplug and disconnect after hours. This means they can choose not to respond to work calls, emails, or messages outside their working hours.

Key Takeaways:

• This right gives employees the choice to ignore after-hours contact, but it doesn’t stop you or a client from reaching out. The key here is that employees won’t be penalised for choosing to disconnect.
• The right to disconnect isn’t absolute. If there’s a reasonable need for the employee to respond—like the nature of their role or an urgent matter—the refusal might not be considered reasonable.
• If an employee reasonably exercises this right and faces negative consequences, they can file a claim with the Fair Work Commission.

Now’s the perfect time to review your policies and employment agreements! 

It’s a good idea to talk with your team about this new right and assess which roles might require after-hours contact. 

2. Updates to Casual Employment

As of 26 August 2024, there’s a new definition of what it means to be a casual employee. Here’s the gist: an employee is considered casual if there’s no firm commitment to ongoing work, and they’re entitled to a casual loading or specific casual rate of pay.

Key Takeaways:

• The Fair Work Act (FWA) will look beyond what’s written in the contract and focus on the ‘real substance’ of the employment relationship to determine if it’s truly casual.
• Several factors will come into play, like whether the employee can accept or reject shifts, how regular the work is, and the likelihood of future work.
• If an employee is misclassified as casual from the start, they may be entitled to back-pay and other penalties.
• The Casual Conversion process will be replaced with an ‘Employee Choice’ process. Casual employees can now request conversion to permanent status if they believe they no longer fit the casual definition, after 6 months (or 12 months for small businesses).
• Employers will need to provide the Casual Employment Information Statement at different stages of employment. For businesses with fewer than 15 employees, this is required at the start and after 12 months.

It’s important to check your recruitment practices to ensure new casual hires meet the new definition. Training your team on the new Employee Choice process and staying on top of the requirements for the Casual Employment Statement will help keep you compliant.

3. Employee vs. Contractor – New Definition of Employment

From 26 August 2024, the definition of employment under the FWA will focus on the ‘real substance, practical reality, and true nature’ of the relationship—meaning it’s not just about what’s written in the contract anymore.

Key Takeaways:

• The new definition requires a holistic look at the relationship to determine if someone is an employee or a contractor.
• This change brings back the ‘multifactorial’ test, where various aspects of the relationship are assessed.
• Contractors earning above the Contractor High Income Threshold (set at $175,000) can opt out of this new definition through a notification process.
• Those earning below the threshold can seek dispute resolution with the Fair Work Commission for unfair contract terms.

If you work with contractors, now is the time to review those relationships and reach out to our team about our audit tool to ensure they align with the new definition. A multifactorial test will help clarify whether they should be classified as employees or contractors.

Get Ready for the Changes

By staying informed and taking proactive steps, you can ensure your business is ready for these upcoming changes. Now’s the time to review your policies, train your teams, and update your practices to keep everything running smoothly and compliant!  

If you’d like more detailed advice or just want to chat about how these changes might affect your business, the Growth HR team is here to help.