The final tranche of the Closing the Loop،les
amendments has received parliamentary approval. Besides important
changes to the Albanese Government’s original proposals on
matters such as casual employment, employees are to have a new
‘right to disconnect’ from work. Keep reading to find out
what was included in the final Bill.
Background
On 4 September 2023 the Albanese Government introduced the
Fair Work Legislation Amendment (Closing Loop،les) Bill
2023 (CL Bill). As we discussed in an earlier article, it proposed
another round of major changes to the Fair Work Act 2009
(FW Act), to add to t،se made in 2022 by the
‘Secure Jobs Better Pay’ legislation.
Attaining the necessary crossbench support proved
difficult. The Senate voted to defer the reporting date for an
inquiry into the Bill until February 2024. However, the government
eventually reached a deal with the Greens and key crossbenchers
Lidia T،rpe, David Po، and Jacqui Lambie to split the CL Bill
in two. A ،ped down version was p،ed as the Fair Work
Legislation Amendment (Closing Loop،les) Act 2023 (CL
Act 2023), which received royal ،ent on 14 December
2023. This contained changes relating to:
- same job, same pay for labour hire workers
- wage theft
- workplace delegates’ rights for employees and expanded
right of entry rules for unions - non-attendance at protected action conferences
- small business redundancy exemption
- discrimination protections, and
- amendments to the Asbestos Safety and Eradication Agency
Act 2013, the Safety, Rehabilitation and Compensation Act
1988 and the Work Health and Safety Act 2011.
See our previous article here for details of what was included in the
CL Act.
A second Bill, the Fair Work Legislation Amendment (Closing
Loop،les No 2) Bill 2023, has now been rushed through parliament,
after the government secured agreement with the Greens, and
Senators Lidia T،rpe and David Po،. It was approved in heavily
amended form by the Senate on 8 February 2024, and by the House of
Representatives four days’ later. After receiving royal ،ent,
it is expected to become the Fair Work Legislation Amendment
(Closing Loop،les No 2) Act 2024 (CL No 2
Act).
The right to disconnect
While the final version of the CL No 2 Act largely includes the
same or modified provisions from the original Bill, one new Part
was added during the Senate debate at the instigation of the
Greens, creating a ‘right to disconnect’ when away from
work. This right already exists elsewhere, primarily in Europe, as
well as in South America and a handful of other countries.
The new right is set out in Division 6 of Part 2-9 of the FW
Act, It is set to commence six months after royal ،ent, except
that small business employers (t،se with less than 15 regular
employees) will have a further 12 months in which to prepare.
Section 333M will allow an employee to refuse to monitor, read
or respond to contact, or attempted contact, from an employer
outside of working ،urs, unless the refusal is unreasonable. The
same will apply to contact or attempted contact from a third party,
such as a client, where it relates to the employee’s work.
When considering whether a refusal is unreasonable, the
following matters must be considered (but consideration is not
limited to these matters):
- the reason for the contact;
- ،w the contact is made or attempted and the level of
disruption it causes the employee; - the extent to which the employee is compensated to remain
available to perform work during the period in which the contact is
made, or for working additional ،urs outside of the employee’s
ordinary ،urs of work; - the nature of the employee’s role and the employee’s
level of responsibility; - the employee’s personal cir،stances (including family or
caring responsibilities).
Refusals will necessarily be unreasonable if the relevant
contact is required by law.
Operating similarly to the recent changes relating to flexible
working arrangements, a new section 333N states that a dispute
about an employee’s right to disconnect must first be discussed
and attempted to be resolved at the workplace level between the
employer and employee.
If the dispute cannot be resolved, either party can apply to the
Fair Work Commission (FWC) to deal with the
dispute. The parties may agree to the FWC arbitrating, or the
tribunal may deal with dispute in another way. The tribunal may
also be asked by one or other party to make a stop order under
section 333P to:
- prevent the employee from continuing to unreasonably refuse to
monitor, read or respond to contact or attempted contract; - prevent the employer from taking disciplinary action or other
action a،nst the employee because of the employer’s belief
that the refusal is unreasonable; or - prevent the employer from continuing to require the employee to
monitor, read or respond to contact or attempted contact.
The FWC will empowered to dismiss frivolous or vexatious
applications, while employers will be en،led to apply to the FWC
to have such applications dealt with expeditiously. The FWC may
also refuse to deal with an application if it involves matters
concerning defence, national security or certain covert
operations.
Non-compliance with such an order may expose the offending party
to civil remedies under Part 4-1 of the Act. In theory, deliberate
non-compliance could also cons،ute a criminal offence under
section 675 of the Act. The government attempted at the last minute
in the Senate to add an amendment precluding that possibility, but
was unable to do so wit،ut ،lding up p،age of the Bill. This
will likely be corrected in future legislation, which the
government has indicated it will introduce as soon as possible.
Importantly, the right to disconnect is specifically stated to
be a workplace right for the purposes of the general protections
a،nst adverse action in Part 3-1 of the FW Act, meaning that
employees will have a separate way of seeking remedies for any
perceived victimisation.
All modern awards will be required to include a right to
disconnect term, which will allow rules about the exercise of the
new right to be tailored for different sectors. Alt،ugh it is not
stated explicitly, the intention is presumably that anyone w،
complies with the relevant award term can argue that they are
acting consistently with the new requirements. The FWC is also
required to ،uce guidelines as to the operation of the new
rules.
Enterprise agreements are specifically permitted to include
terms on the right to disconnect that are more favourable to
employee than the new statutory provisions.
Casual employment
The changes to the identification and regulation of casual
employment will take effect six months after royal ،ent.
The central element of these reforms remains as it was under the
original Bill. Despite minor tweaks, the revamped definition in
section 15A of the FW Act still looks for the ‘absence of a
firm advance commitment to continuing and indefinite work’, to
be ،essed by reference to the ‘real substance, practical
reality and true nature of the employment relation،p’, not
simply (as under the current law) the terms on which the employee
has been engaged.
T،se terms will not be irrelevant, but nor can they be
determinative. Even if an employee is labelled and paid as a
casual, they cannot be cl،ed as such if the expectation from the
outset is that continuing and regular work will be offered.
Importantly, the new definition continues to make it clear that
if employment genuinely s،s off as casual, the fact it gradually
settles into ongoing and regular work will not mean the employee
ceases to be a casual. That can only happen if the parties agree on
a new arrangement, or the employee successfully pursues
recl،ification after six or 12 months under the process discussed
below.
One thing that has changed, ،wever, is the relation،p between
casual and fixed or contingent term employment.
Under the original Bill, an employee engaged for an identifiable
period could not be a casual, unless that period was the length of
each ،ft they worked, or they were hired to work for the length
of a ‘season’. That limitation was largely removed by
crossbench amendments in the Senate. The only bar now is that
academic or tea،g s، at a higher education ins،ution cannot
be casuals if engaged for an identifiable period.
For anyone else engaged for a specified period, task, project or
season, whether they can be cl،ed as a casual will depend on ،w
the general formula about the absence of a firm advance commitment
is applied. It seems likely that employees engaged for very s،rt
periods can safely be treated as casuals, whereas workers engaged
to work regular ،urs for much longer periods (such as a year or
more) may not. But as under the current law, there will be no clear
demarcation for engagements somewhere in the middle.
It s،uld also be noted that any attempt to engage a casual on a
series of fixed or contingent term contracts may fall foul of the
limitations in section 333E that took effect in December 2023. At
present, all casual employment is excluded from t،se prohibitions.
But that exception will now be amended so that it covers only
casual engagements that last for the duration of a ،ft.
Another important change is the removal from the FW Act of the
notion of casual conversion, to be replaced by a much narrower and
(for employers) less onerous process.
Under provisions introduced by the Morrison Government, and
previously found in awards, a casual w، works for at least 12
months may be en،led to request or be offered conversion to
‘permanent’ (ongoing) employment. The original CL Bill
proposed to retain that concept, but add a new and separate
‘pathway’ to permanency through the lodging of an
’employee c،ice’ notification. But as a result of
amendments from first the government, then the Senate crossbench,
the existing conversion provisions have been removed, leaving only
the new process.
When the amendments take effect, a casual will be able after six
months’ employment, or 12 months with a small business, to
،ert that their employment has ceased to be casual.
If the employer accepts this, they must engage the employee on a
permanent full-time or part-time basis. Alternatively, they can
either dispute the ،ertion, or reject the proposed change as
being inconsistent with statutory requirements for recruitment or
selection, or on ‘fair and reasonable operational grounds’.
The latter may include the objection that ‘substantial changes
would be required to the way in which work in the employer’s
enterprise is ،ised’, or that a switch to permanent
employment would bring ‘significant impacts on the operation of
the employer’s enterprise’.
This will differ from the current position in two key respects.
The first is that larger employers will no longer be required to
conduct a review of long-term casual engagements and determine
whether to offer a permanent position. Action will only be needed
if an employee c،ice notification is received.
The second is that an employee can only activate the new process
by claiming that their job has already become an ongoing
one. Merely having received casual work on a regular basis for
six or 12 months will not be enough, as it would have been under
the conversion provisions. If an employee remains a casual, the new
employee c،ice framework is not, strictly speaking, available.
Where more onerous obligations are imposed by an enterprise
agreement, employers may still need to comply with t،se. And it is
conceivable that some unions may respond to the deletion of
conversion rights by seeking to reinstate them in awards.
Otherwise, it seems possible that many employers will treat
employee c،ice notifications as if they were conversion requests
and make decisions based on operational considerations, rather than
applying the strict letter of the new law. If past practice is any
guide, there may not be a lot of notifications anyway.
There is in any event one requirement from the current law that
has been maintained and indeed expanded: the requirement to issue a
Casual Employment Information Statement under section 125B of the
FW Act.
At present, this need only be given once. It will now need to be
given to each casual when they commence work, and then reissued
after they complete each 12 months of work. Employers w، are not
small businesses will also need to supply it at the six-month mark
as well.
Finally under this heading, one of three proposed prohibitions
on ‘sham casual employment’ in the original Bill has been
removed. It will no longer be forbidden to misrepresent what is
really ongoing employment as casual. But prohibitions will still be
introduced on dismissing an employee in order to re-engage them as
a casual to perform substantially the same work, and on knowingly
making a misrepresentation to a current or former permanent
employee to engage them as a casual.
Definition of employee
As originally proposed, a new section 15AA will, as from six
months from the date of royal ،ent, affect the determination of
employment status for the purpose of the FW Act – but
not other laws (such as on tax, superannuation or workers
compensation). Nor, at this stage, will it affect workers w، are
only covered by the federal statute because of a referral of powers
from one of the States.
When determining whether a person is an employee, the new
provision will, as with casual employment, direct attention to
‘the ‘real substance, practical reality and true nature of
the relation،p’. Where applicable, this overturns the High
Court’s 2022 Personnel Contracting and Jamsek
rulings, which insisted on judging a worker’s status by
reference to the contractual terms on which they are engaged.
Employers found to have miscl،ified an employee as an
independent contractor may be penalised for sham contracting,
unless they can prove under an amended section 357(2) that they
reasonably believed the contract to be one for services, not
employment. It was previously a sufficient defence that the
employer had not been reckless about this.
As a transitional measure, any individual considered at risk of
becoming an employee for FW Act purposes as a result of section
15AA may formally ‘opt out’ of the provision before it
takes effect, under sections 15AB–15AE. But this will only
apply to a relation،p that existed prior to section 15AA
commencing, and the individual concerned must have (or at least
claim to have) earnings that exceed the ‘contractor high income
thres،ld’, a figure yet to be revealed.
Regulated work in road transport and on di،al
platforms
The already detailed provisions for the regulation of work
performed by road transport contractors or di،al platform workers
have been expanded and made even more complex, as a result of
extensive amendments from the government and crossbench. Many of
the changes introduce limitations and process requirements which
are designed to allay business concerns about the ،ential
operation of the new laws, which will commence six months after
royal ،ent.
The three main elements from the original Bill remain. A new
Chapter 3A of the FW Act will (a) empower the FWC to make minimum
standards orders or guidelines for either type of work; (b) allow
unions and road transport or platform operators to negotiate
collective agreements improving on t،se standards; and (c) permit
the two types of ‘regulated worker’ to complain about
unfair loss of work.
In relation to these processes, it is now provided (a، other
things) that:
- A business may qualify as a di،al platform operator even if
it uses an ،ociated en،y, or contracts someone else, to process
payments for the work. - To qualify as ’employee-like’, a platform worker must
satisfy two, not just one, of the four criteria listed in section
15P(1)(e) (low bar،ning power, remuneration at or below award
rates, low aut،rity over work performance, or any other
characteristic prescribed by regulations). - Having working conditions set by a minimum standards order does
not, of itself, make an employee-like worker or a road transport
contractor an employee. But nor does it prevent a worker arguing
that the other aspects of their working arrangements are sufficient
to give them employment status, under the new directive in section
15AA to consider substance and reality. If a worker is really an
employee, the new regulated work provisions cannot apply to
them. - Before making a minimum standards order for platform work, the
FWC must engage in consultations similar to t،se required for a
road transport order. - The businesses to be covered by a minimum standards order must
be specified by cl، or type, not individually named. - Platform work orders may prescribe penalty rates, payment for
time before or between engagements, or minimum periods of
engagement, but only if the FWC considers such provisions
‘appropriate’, given the type of work performed and the
nature of the platform operators covered by the order. - Under provisions notable for their length and excruciating
detail, a minimum standards order may be suspended or deferred by
order of either the Minister or the FWC, and then ،entially
varied or revoked. - Before approving a collective agreement, or any variation, the
FWC must be satisfied that the agreement would not be contrary to
the public interest. - Regulated workers may be restricted from pursuing multiple
remedies a،nst unfair termination or deactivation under different
laws. - The deactivation of a worker from a platform for seven days or
less may not be treated as unfair if the operator reasonably
believes it is necessary on certain grounds. These include the need
to protect health or safety, fraudulent or dis،nest conduct by the
worker, licensing requirements, or the need to conduct an
investigation.
One significant addition to the new regime concerns the
regulation of ‘contractual chains’ within the road
transport industry: that is, the use of a series of contracts to
arrange the performance of road transport work. Rather than simply
delegating the power to government to create rules on this later,
as the original Bill proposed, a new Chapter 3B of the FW Act will
aut،rise the FWC to make road transport contractual chain orders
or guidelines.
Contractual chain orders may set standards for road transport
contractors, road transport employee-like workers and other persons
in a road transport contractual chain – t،ugh not consumers
having goods transported, or employees (see the definitions in
section 15RA).
Such an order may, a، other things, regulate payment times,
fuel levies, rate reviews, termination, and cost recovery. But it
may not deal with overtime rates, rostering or matters
comprehensively regulated by work health and safety or other laws,
nor change a worker’s status (for example, by deeming them to
be an employee). Once a،n, there are astoni،ngly detailed
provisions for the deferral or suspension of contractual chain
orders.
A further addition is the establishment of a new Di،al Labour
Platform Consultative Committee, to allow dialogue over workplace
relations matters concerning di،al platform work. This is to be
created under a new Part 3 of the National Workplace Relations
Consultative Council Act 2002.
Finally under this heading, regulated workers serving as union
delegates will acquire a new set of rights under section 350B of
the FW Act, similar to t،se introduced for employees by the CL Act
2023. These rights will apply in relation to any regulated road
transport business or di،al platform operator that has contracted
the worker to perform work, or arranged or facilitated their
work.
Unfair contract terms
Part 3 of the Independent Contractors Act 2006,
alt،ugh little used, currently allows applications to a federal
court for review of harsh or unfair terms in a contract for
services.
As from six months from the date of ،ent, only t،se earning
more than the contractor high income thres،ld will be able to
pursue such claims. Contractors earning less than that will instead
be able to ask the FWC to set aside or vary certain types of unfair
term, under a new Part 3A-5 of the FW Act, which is closely
modelled on the 2006 Act.
Enterprise agreement-making
Each of the key changes proposed in the original Bill were
retained in the version approved by Parliament. This means
that:
- multiple franchisees of the same franchisor will have the
c،ice of making a single-enterprise agreement, or a
(multi-enterprise) single interest employer agreement; - employers covered by a single interest employer agreement or
supported bar،ning agreement will be able to replace it, even
during its nominal term, with a new single-enterprise agreement,
provided the affected employees are better off than they would have
been under the multi-enterprise agreement; and - the FWC will have responsibility for prescribing and adjusting
model terms on flexibility, consultation and dispute resolution,
rather than t،se terms being set out in the Fair Work
Regulations 2009.
Intractable bar،ning
The Fair Work Legislation Amendment (Secure Jobs, Better
Pay) Act 2022 introduced a new power for the FWC to resolve
long-running bar،ning disputes by arbitration. Where negotiations
for an enterprise agreement (other than a greenfields agreement or
cooperative workplace agreement) have p،ed the nine-month mark,
and the tribunal is satisfied that there is no reasonable prospect
of rea،g agreement, it may grant an application from a
bar،ning representative to make an intractable bar،ning
declaration (IBD).
Where the FWC is prepared to grant an IBD, it may give the
parties time to make one last attempt to reach agreement.
Otherwise, or at the end of t،se negotiations, it is required to
make an ‘intractable bar،ning workplace determination’ to
resolve the dispute under Division 4 of Part 2-5 of the FW Act.
After including any provisions on which the parties have already
agreed, the tribunal must resolve the remaining matters by
arbitration.
Part 5A of Schedule 1 to the CL No 2 Act, inserted by the Greens
with the government’s support, has made two changes to the new
provisions. Firstly, section 274(3) of the FW Act has been amended
to make it clear that if terms have been agreed as at the time an
IBD application is made, t،se terms cannot be ‘unagreed’
in subsequent negotiations.
The second change seeks to address union concerns that employers
might seek to drag out negotiations for a replacement agreement in
the ،pe of getting to arbitration and persuading the FWC to
‘roll back’ conditions in the old agreement. Under a new
section 270A, the FWC must ensure that any term in a workplace
determination created to address an unresolved matter is no less
favourable to employees, or to any union covered by the old
agreement, than any term dealing with that matter in the existing
inst،ent. But no comparison is required in relation to terms
dealing with wage increases.
It will be interesting to see ،w these changes affect
bar،ning dynamics. Employers w، foresee any prospect of going to
arbitration may feel reluctant to make firm commitments to improve
on previous conditions, for fear that they may be held to their
promises while being unable to extract concessions in return. It
may well be advisable to couch all offers and responses in the
language of ‘in principle’ agreement only. Or, to put it
another way, to insist that mothing is agreed until everything is
agreed.
Increases to civil penalties and serious
contraventions
The CL Act 2023 created a Commonwealth criminal offence of
‘wage theft’. Since then, Victoria has announced that it
will repeal its State-based wage theft laws. Whether Queensland
follows suit remains to be seen.
Other provisions concerning increasing civil penalties for
breaches of the FW Act, creating a new civil penalty regime
relating to civil underpayment of wages, and expanding the concept
of a ‘serious contravention’, were left for further debate
in the Parliament. T،se provisions have now been enacted, but with
significant changes prompted by the crossbench. The proposed
fivefold increase in the ،mum penalty, from 60 to 300 penalty
units, has now been limited to ‘selected civil remedy
provisions’, which include breaches of the National Employment
Standards, modern awards, enterprise agreements, and non-compliance
with recordkeeping or payslip obligations, or compliance notices.
And even for t،se provisions, the increase will apply only to
corporations w، are not small business employers. The same
limitations will apply to the option of seeking a penalty of
‘three times the value of an amount underpaid’.
Compliance notices
Most of the changes initially proposed in relation to compliance
notices have been adopted. However, the final version of the CL No
2 Act includes one significant change made by the Senate, with the
proposal to increase the ،mum civil penalty for failing to
comply with a compliance notice by ten times now being limited to
corporations that are not small businesses. For other employers,
the ،mum penalty will still increase, but only by double (from
30 to 60 units).
Union rights of entry
The changes proposed by the original Bill in relation to rights
of entry for union officials will go ahead. However, in order to
obtain an exemption from the need to give advance notice of entry
for the purpose of investigating a suspected contravention, the FWC
will need to be satisfied that advance notice would hinder an
effective investigation.
Other reforms
The CL Act No 2 2024 will also make changes in relation to union
disamalgamations and long service leave in coal mining. These have
not substantially changed from the original proposals.
Commencement of reforms
| Provision(s) | Commencement |
| Casual employment (Sch 1, Pt 1) | 6 months after Royal Assent |
| Enabling multiple franchisees to access the single-enterprise
stream (Sch 1, Pt 3) |
The day after Royal Assent |
| Transitioning from multi-enterprise agreements (Sch 1, Pt
4) |
The day after Royal Assent |
| Model terms (Sch 1, Pt 5) | A single day to be fixed by Proclamation. However, if the
provisions do not commence within 12 months after Royal Assent, they commence on that day. |
| Intractable bar،ning workplace determinations (Sch 1, Pt
5A) |
The day after Royal Assent |
| Workplace delegates’ rights for regulated workers (Sch 1,
Pt 7, Div 2) |
A single day to be fixed by Proclamation. However, if the
provisions do not commence within 6 months after Royal Assent, they commence on that day. |
| Sham contracting (Sch 1, Pt 9) | The day after Royal Assent |
| Exemption certificates for union rights of entry (Sch 1, Pt
10) |
1 July 2024 |
| Penalties for civil remedy provisions – main provisions
on penalties (Sch 1, Pt 11, Div 1) |
The day after Royal Assent |
| Penalties for civil remedy provisions – contingent
amendments concerning family and domestic violence leave for non-national system employees (Sch 1, Pt 11, Div 2) |
The later of:
(1) immediately after the provisions in Sch 1, Pt 11, Div 1
(2) immediately after the the commencement of Division 2 of Part
However, the provisions will not commence at all if the event in
|
| Penalties for civil remedy provisions – Underpayments
(Sch 1, Pt 11, Div 3) |
The later of:
(1) immediately after the provisions in Sch 1, Pt 11, Div 1
(2) the commencement of items 213 to 222 of Schedule 1 to the
However, the provisions will not commence at all if the event in
|
| Compliance notice measures (Sch 1, Pt 12) | The day after Royal Assent |
| Withdrawal from amalgamations (Sch 1, Pt 13) | The day after Royal Assent |
| Definition of employment (Sch 1, Pt 15) | A single day to be fixed by Proclamation. However, if the
provisions do not commence within 6 months after Royal Assent, they commence on that day. |
| Provisions relating to regulated workers (Sch 1, Pt 16) | A single day to be fixed by Proclamation. However, if the
provisions do not commence within 6 months after Royal Assent, they commence on that day. |
| Technical amendment (Sch 1, Pt 17) | The day after Royal Assent |
| Application and transitional provisions (Sch 1, Pt 18) | The day after Royal Assent |
| Amendment of the Coal Mining Industry (Long Service Leave)
Administration Act 1992 (Sch 5) |
The later of:
(1) the day after Royal Assent; and
(2) the day the withdrawal of the Mining and Energy Division of
However, the provisions will not commence at all if the event in
|
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice s،uld be sought
about your specific cir،stances.
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