There is a lot to cover in this fortnight’s edition of KHQ’s Workplace Watch. 26 August 2024 is a significant date, with a raft of reforms from the Closing Loopholes amendments having now come into effect. This includes changes to casual employment, the highly publicised right to disconnect, the new definition of ‘employee’, independent contractor reforms and new regimes for ‘employee-like workers’ and the road transport industry. We provide an update on the new legislation passed by the Commonwealth, which has already resulted in an administrator being appointed. There have also been some significant developments in the Fair Work Commission, with the Commission ordering three black coal mining operators in New South Wales to bargain for a multi-enterprise agreement. We share some interesting data regarding the Fair Work Commission’s workload over the last 12 months and mention the potential law reform regarding post-employment restraints and non-disclosure agreements.
New reforms operational
A new batch of reforms have now taken effect. This includes:
- changes to casual employment
- the new right to disconnect
- the new definition of “employee”
- reforms for independent contractors
- new regimes for ‘employee-like’ workers and the road transport industry.
Further information can be found at the Fair Work Ombudsman’s website here and below.
Changes to casual employment
These changes include:
- a new definition of ‘casual employee’
- a new pathway for conversion to permanent employment (available from 26 February 2025 and from 26 August 2025 for small businesses)
- a new jurisdiction for dealing with disputes about casual employment
- new workplace rights.
See the Fair Work Commission’s fact sheet regarding the casual employment changes here. See also the guidance material published by the Fair Work Ombudsman regarding the casual employment reforms here.
The new right to disconnect
The highly publicised right to disconnect is now in effect for all businesses other than small businesses (for small businesses, the right to disconnect will take effect from 26 August 2025).
Employees can now refuse to monitor, read or respond to contact, or attempted contact, from their employer or third parties outside of their working hours unless it is unreasonable to do so.
All modern awards now contain a right to disconnect term. The model term was published by the Fair Work Commission last Friday. The model term largely reflects the legislation. However, it also includes additional obligations on employers to “not directly or indirectly prevent an employee from exercising their right to disconnect”. This arguably expands the new right to disconnect so that it is also imposes obligations on employers in relation to its attempts to contact employees outside of their working hours. We can expect this issue to receive further attention as disputes arise over the coming months.
See the guidance material published by the Fair Work Ombudsman here and the new education material published by the Fair Work Commission here (which includes a short animation video and a fact sheet). The Commission has stated that it will consider publishing more detailed guidance material in the future, after it has dealt with some disputes, and it has a better understanding of some of the practical issues for which guidance may be required.
The Fair Work Commission’s decision regarding the variation of modern awards to include a right to disconnect term is here.
Definition of “employee”
In order to ascertain whether a worker is an employee, the real substance, practical reality and true nature of the working relationship is to be considered. In effect, this definition reverses the effect of the High Court decisions in Personnel Contracting and Jamsek from 2022.
Importantly, the new definition only applies to the Fair Work Act 2009 (Cth); it will not affect the meaning of “employee” in other existing laws dealing with employment, such as tax, superannuation and workers’ compensation.
Independent contractors who earn more than the new contractor high income threshold ($175,000 per annum) will be able to “opt out” and remain independent contractors despite this new definition.
See further information here.
Reforms for independent contractors
The Fair Work Commission now has the jurisdiction to hear claims from a party to a services contract that their contract should be set aside or varied due to an unfair term. This jurisdiction is only available where the individual’s earnings do not exceed the contractor high income threshold of $175,000 per annum. The existing unfair contract regime will continue to operate under the Independent Contractors Act 2006 (Cth) in respect of individual’s who earn above the contractor high income threshold.
See the guidance material published by the Fair Work Ombudsman here.
New regimes for ‘employee-like’ workers and the road transport industry
The Fair Work Commission has new jurisdictions for regulating terms and conditions for ‘employee-like’ and road transport workers (referred to collectively as “regulated workers”). The changes also affect business engaging regulated workers, and independent contractors and others who work in a ‘road transport contractual chain’.
See the guidance material published by the Fair Work Ombudsman here.
Fair Work Commission publishes statement about its FY24 performance
Justice Hatcher, President of the Fair Work Commission, has issued a statement about the Commission’s work and performance for the 2023-24 financial year.
The statement covers the Commission’s operational performance, major cases, and changes arising from the recent reforms in the Secure Jobs, Better Pay Act and Closing Loopholes Act.
Notably, the statement confirms:
- the Commission received over 40,000 applications in the last financial year – the highest number since the commencement of the Fair Work Act;
- 82% of matters were finalised within 8 weeks and 96% of matters were finalised within 16 weeks;
- less than 0.5% of appeals were upheld; and
- there were over 4,500 applications for the approval of enterprise agreements, with 90% being approved within 37 calendar days.
Some key figures concerning the new reforms include:
- there were 207 applications to deal with disputes concerning flexible working arrangements and 6 applications to deal with requests for an extension of unpaid parental leave.
- there were 95 applications under the new sexual harassment jurisdiction.
- the Commission extended 299 ‘zombie agreements’.
The Statement can be viewed here.
CFMEU administration Bill passes Parliament
The Commonwealth has passed new legislation to put the CFMEU’s Construction and General Division and branches into administration.
Amongst other things, the stated features of the Bill include:
- enabling the Minister to determine a scheme for the administration
- making the General Manager of the Fair Work Commission responsible for appointing the administrator
- requiring the CFMEU to pay for the costs of administration
- conferring functions and powers of the administrator to allow for the administration to be conducted fairly and efficiently (including by requiring assistance from the CFMEU and others)
- empowering the administrator to take certain compliance and enforcement action in relation to the conduct of union officers and employees
- preventing “removed persons” from acting as a bargaining representative in enterprise bargaining, running for office or being elected to another office or obtaining employment in another union
- increasing the penalty for “removed persons” who make certain misrepresentations about right of entry
- providing an internal complaints mechanism that provides whistleblower protections to complainants and requires cooperation between the administrator and relevant law enforcement agencies and regulators.
Following the passage of the Bill, the CFMEU’s Construction and General Division has now been placed under administration for up to 5 years, and the Attorney-General has determined a scheme for the administration.
See further information here.
The Fair Work (Registered Organisations) Amendment (Administration) Bill 2024 can be viewed here.
The revised Explanatory Memorandum can be viewed here.
Further information regarding the Bill can be found here.
Significant decision on multi-employer bargaining
The Fair Work Commission has issued its decision in the first significant contested application for a single-interest employer authorisation since the Secure Jobs, Better Pay reforms were introduced in June last year.
A Full Bench of the Commission issued the authorisation in respect of three operators in the New South Wales black coal mining industry: Peabody, Ulan Coal and Whitehaven Coal. The effect of this authorisation is that those three operators will now be required to bargain for one agreement that will cover all of them in respect of their Deputies, Undermanagers, Shift Engineers, and Control Room Operators. The fourth respondent, Delta Coal, escaped being included in the authorisation.
This is a very significant development. We expect that following this decision, we will likely see an increase in the number of applications for single-interest employer authorisations, forcing employers to bargain for enterprise agreements that include other employers who arguably share a common interest.
See a link to the lengthy Full Bench decision in [2024] FWCFB 253 here.
Transgrid bargaining update
There have been several new developments in relation to the high-profile bargaining dispute at Transgrid.
Deputy President Cross suspended protected industrial action for two months. See decision here and order here.
Three days later, Deputy President Slevin made good faith bargaining orders requiring Transgrid to provide the CEPU with the remuneration paid to General Managers and Executive General Managers for the last 3 years, the key financial indicators of the business and the total expenses associated with the use of contractors over the last 3 years. See decision here.
Transgrid has now reportedly applied to the Fair Work Commission for an intractable bargaining declaration.
Work value case – roll in the experts
The ACTU has been unsuccessful in securing an agreed methodology for assessing work value in the gender-based undervaluation proceedings. The proceedings will progress by the exchange of expert evidence.
See the Statement of the Full Bench in [2024] FWCFB 334 here.
Cleanaway and workplace delegates’ rights
The new model workplace delegates terms have been considered by the Full Bench in relation to one of Cleanaway’s workplace determination proceedings. The Transport Workers’ Union argued that the model award term did not go far enough, and that workplace delegates should have rights under the workplace determination to represent all eligible workers at the workplace including contractors or employees of other employers.
The Full Bench concluded:
“[68] Notwithstanding the fact that the Full Bench responsible for determining the content of the model delegates’ rights term has not yet published its reasons for making the model provision in the terms that it has, we are not persuaded that that Full Bench has taken a plainly erroneous view of s 350C of the Act. Nor are we persuaded that the other amendments proposed by the TWU to the model delegates’ rights term should be adopted in the circumstances of this case. Having regard to the particular enterprise in which employees based at the Unanderra depot work, we consider that a delegates’ rights term which is based on the model term appropriately balances the statutory rights and obligations relating to workplace delegates and should provide the basis for the delegates’ rights term to be included in our workplace determination. Contrary to the submissions made by the TWU, we do not consider that the model delegates’ rights term, including the provision replicated in clause 27A.9 of the Waste Award, on its proper construction, neuters or impermissibly qualifies the exercise by a workplace delegate of their rights under s 350C of the Act.”
See Full Bench decision in TWU v Cleanaway Operations Pty Ltd [2024] FWCFB 342 here.
Potential law reform
There is increasing momentum for legislative reform in relation to post-employment restraints as well as non-disclosure agreements in Victoria.
Reform regarding post-employment restraints
The Competition Taskforce on Post-Termination Work Restraints has received almost 50 submissions, including from former Fair Work Commission President, Dr Iain Ross, and workplace relations academic, Professor Andrew Stewart, which calls for significant reform to the regulation of non-compete clauses in employment contracts. Amongst other things, they advocate for limiting restraints to high income earners, with fixed limitations on the duration of any restraint (e.g. 6 months) and the introduction of a requirement that the former employee is adequately compensated during the period of the restraint.
However, others have submitted that there is insufficient evidence to justify a significant change to the law governing post-employment restraints.
You can find the 44 various non-confidential submissions to the Competition Taskforce here.
Banning non-disclosure agreements in Victoria
The Victorian government is considering reforms aimed at restricting the use of non-disclosure (or confidentiality) agreements in relation to workplace sexual harassment cases. The government is seeking feedback on a discussion paper.
See further information here.
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