This article applies to all national system employers in Australia.

Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Cth)

On 15 December 2023, relevant parts of the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Cth), (the Amending Act) amended the Fair Work Act 2009 (Cth) (the Act).

The Amending Act has introduced a number of important new changes, which are discussed below.

Stronger protections against employee discrimination

Organisations will already be aware that section 351 of the Act already prohibits an employer from taking discriminatory adverse action against a person who is a current or prospective employee because of the person’s protected attribute.

The Amending Act has amended the Act to add ‘subjection to family and domestic violence’ to the existing list of protected attributes. As a result of this change, employers must not discriminate by taking adverse action against their employees (or prospective employees), because they have been subjected to family and domestic violence.

Similarly, section 772 now also prohibits an employer from terminating an employee’s employment because of their subjection to family and domestic violence. Moreover, enterprise agreements must now not contain terms which discriminate on the basis of subjection to family and domestic violence.

New workplace delegates’ rights

The Amending Act has introduced new protections in the Act for workplace delegates. A workplace delegate is a person appointed or elected, in accordance with the rules of an employee organisation, to be a delegate or representative (however described) for members of the organisation who work in a particular enterprise.

Newly introduced section 350A of the Act now prohibits an employer of a workplace delegate from:

• unreasonably failing or refusing to deal with the workplace delegate; or
• knowingly or recklessly making a false or misleading representation to the workplace delegate; or
• unreasonably hindering, obstructing or preventing the exercise of the rights of the workplace delegate under the Act or a fair work instrument.

Under the Act, workplace delegates are now also entitled to:

• represent the industrial interests of members and potential members of the employee organisation (including in disputes with their employer);
• reasonable communication with members and potential members about their industrial interests;
• reasonable access to the workplace and its facilities to represent those industrial interests.

Importantly, those workplace delegates who are employed by non-small businesses are entitled to have reasonable access to paid time during normal working hours for the purposes of workplace delegate training.

Small business redundancy changes

Prior to 15 December 2023, section 121 of the Act provided that a business with fewer than 15 employees (a small business employer) was not required to make redundancy payments to employees if those employees’ redundancy entitlements were covered by the National Employment Standards contained in the Act. The Amending Act has sought to address that anomaly by amending section 121. As a result of the amendments, section 121 of the Act now provides that a small business employer will no longer be exempt from the obligation to make redundancy payments, if:

• at the time of the employee termination, the employer was bankrupt or in liquidation (other than by way of a members voluntary winding up); and
• the employer is a small business employer due to the termination of one or more employees, where those terminations occurred, either 6 months before the employer became bankrupt or went into liquidation, or 6 months before an insolvency practitioner was appointed, or due to insolvency of the employer.

Regulated labour hire arrangements

The Amending Act has introduced new obligations to the Act which are designed to close the ‘labour hire loophole’, to essentially ensure that employees who perform the same job alongside each other receive the same pay.

The new changes introduced by the Amending Act permit the Fair Work Commission (Commission) to make a regulated labour hire arrangement order (Order) regarding the pay arrangements between the employer who supplies employees to perform work for a regulated host (i.e a labour hire provider), the labour hire employees (employees) and the procurer of those employees. Under the Act, the procurer of those employees is referred to as the regulated host.

Newly introduced section 306E of the Act provides that, on application, the Commission may make an Order where:

• an employer supplies, or will supply, either directly or indirectly, one or more employees to perform work for a regulated host; and
• an enterprise agreement (or other employment instrument) that applies to the regulated host would apply to the employees if the regulated host were to employ those employees directly, for work of that kind;
• the regulated host is not a small business employer.

In addition, the Commission must also be satisfied that the performance of the work by the employees is not for the provision of a service, rather than the supply of labour. Moreover, the Commission is also not permitted to make the Order if it is not fair and reasonable in the circumstances.

We note that no Orders come into effect until 1 November 2024. From 1 November 2024, when an Order is in force, employers that supply labour to a regulated host and are covered by an Order will be required to ensure that employees working as part of the arrangement are paid no less than the rate at which they would be paid under the regulated host’s enterprise agreement or equivalent instrument, (this is referred to in the Act as the protected rate of pay).

Regulated hosts are required under new section 306EE of the Act to notify any tenderers in connection with the supply of labour that they may become subject to an Order. In addition, regulated hosts are also required under section 306H of the Act to provide the employer with information about the protected rate of pay.

It is important to note that the new amendments do not apply where employees are working for a regulated host under a training arrangement. In addition, we note that an Order will not apply to any employee supply for a period of 3 months or less.

Anti-avoidance provisions

It is important to note that the Amending Act has also introduced a number of ‘anti-avoidance’ provisions to the Act (being sections 306S to 306V of the Act) which essentially all prevent employers and regulated hosts from entering into arrangements for the purposes of preventing the Commission from making an Order, or to avoid the application of an Order. These anti-avoidance provisions operate retrospectively from 4 September 2023, and attract significant penalties if breached.

Conclusion

Organisations should ensure relevant staff (including HR staff) are made aware of the new changes discussed above relating to the new discrimination protections, workplace delegates’ rights, small business redundancies, and labour hire arrangements discussed above. Where relevant, organisations should update their policies and procedures, to ensure they reflect these new changes.