Shopping Cart

Close

No products in the cart.

Fair Work Australia Closes Legal Loopholes: How employees have more rights in 2024

​[[{“value”:”

Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Closing Loopholes Act) aims to erase the legal loopholes embedded within the workforce that are rooted in underpayments, lack of efficiency and a lack of inclusion.

The Fair Work Act 2009 (Clth) is the central piece of legislation that regulates, governs and monitors employment within Australia. Consequently, these modifications are groundbreaking as an employer or employee. 

This article will break down the key introductions and modifications that are already effective or will be in effect this year. 

Criminalising Wage Theft

The Closing Loopholes Act will be introducing a criminal offence for intentional underpayments when businesses and employers engage in wage theft

In response to intentional underpayments from employees and businesses, the penalties for underpayment have also increased.

As of January 1, 2025, employers who commit wage theft have the potential of facing:

A maximum of ten years in prison and/or a maximum fine and/or;

A fine equivalent to three times the amount of the underpayments or;

$1,565,000 for individuals and $7,825,000 for corporations.

The Fair Work Ombudsman (FWO) holds the responsibility of investigating these criminal offences and will report to the DPP and Federal Police for consideration and prosecution when appropriate. 

Employers who genuinely mistook underpaying their employees are not encompassed under the new criminalisation of wage theft. 

In response, employees are more protected from underpayment due to the Closing Loopholes Act.

Changes to Labour Hire Arrangement Orders

A key change in relation to the Closing Loopholes Act is the modification of employees, unions and host employers to apply to the Fair Work Commission for labour hire employees to be paid what they would earn under a host’s enterprise agreement.

The Commission is prohibited from approving any applications unless it has satisfied that the work to be performed for the host employer is not for the service, but rather a product of the labour. The Commission also has discretion in deciding whether or not an order made is fair or not, and can decline an application based on ‘reasonability’.

This change means that labour hire employees covered by an order of the Commission will be entitled to be paid what they would earn under the host’s enterprise agreement. Labour hire employees are also granted the right to request information from their host to calculate the correct rate of pay– hosts are legally obliged to comply with these requests.

These changes commenced on 15 December, 2023, however, regulated labour hire arrangement orders will not come into force until 1 November, 2024. 

Stronger Discrimination Protections

One of the key changes that will be introduced through the Closing Loopholes amendment is the strengthening on discrimination laws.

The Fair Work Legislation Amendment (Closing Loopholes) 2023 Act commenced this strengthening on December 15, 2023. 

The reforms include ensuring employees who have been/are subject to family and domestic violence (FDV) are not fired or refused hiring on the basis that they are victims of such violence.

The Fair Work Commission (FWC) has also ensured that any enterprise agreements or modern awards that discriminate against victims are subject to legal action. These changes coincide with the FWC introducing 10 days of paid leave for domestic and family violence victims within the Fair Work Act. 

These changes will be applicable to full-time and part-time workers, and casual employees and are entitled to a payment that equals the amount earned on the hours they were rostered. Evidence may be required from employers when an employee claims their leave. 

For those who are subject to such violence, evidence may be required to employers granting the leave, however, is ultimately up to the discretion of those allowing the FDV leave.

Constructing a Family and Domestic Violence Leave Policy supports employees in the event that they are a victim of violence and alleviates employers from having to provide clarity to those claiming FDV leave. This also ensures a smoother process when applying for the leave as the procedure is set out within the policy. 

To adjust to these changes, employers should ensure their discrimination policy includes FDV and is framed around these new changes. 

Redundancy Payments for Small Businesses

The new reforms will also address an anomaly which leads to employers and employees who are undergoing liquidation or are bankrupt, to miss out on the NES entitlement of redundancy pay.

When an employer downsizes due to insolvency to their business having less than fifteen staff members, they become a small business employer and are exempt from providing redundancy pay. 

These changes mean that employees who are made redundant later than other employees will not be disadvantaged in regards to attaining a redundancy payment. These changes came into effect on 15 December 2023. 

Modifications to Work, Health & Safety Laws

The Closing Loopholes Act will also modify aspects of health and safety within the workplace. 

These reforms are more niche and include:

An introduction of presumptive liability to the Safety, Rehabilitation and Compensation Act 1988 for first responders who sustain PTSD. This means that there will be a more efficient process when making a compensation claim in relation to PTSD.

Amending the Asbestos Safety and Eradication Agency Act 2013 to include matters regarding silica and silica-related diseases.

Amending the Work Health and Safety Act 2011 (WHS Act) to introduce the ‘industrial manslaughter’ offence. The penalties for industrial manslaughter will also be increasing. 

Conclusion

The Closing Loopholes Act introduces crucial reforms to combat wage theft, strengthen discrimination protections, ensure fair compensation for labour hire employees, address redundancy payment disparities, and enhance workplace safety. By criminalising intentional underpayments and imposing severe penalties, the Act aims to deter exploitative practices while safeguarding against inadvertent errors. 

Changes to labour hire arrangements empower workers, while stronger discrimination protections and provisions for family and domestic violence victims promote inclusivity and support. Additionally, adjustments to redundancy payments ensure equitable treatment for all employees.

 Modifications to health and safety laws prioritise worker well-being, with measures to address emerging risks and enhance accountability. Overall, the Act signifies a significant advancement in promoting fairness, equity, and safety in the workplace, underlining the commitment to protecting workers’ rights and fostering a positive work environment.

Penned by Raja Abbas, Lawpath author

Lawpath is not a law firm and does not provide legal advice. Information, documents and any other material provided by Lawpath or Dynamic Business is general in nature and not to be considered legal advice. 

Keep up to date with our stories on LinkedInTwitterFacebook and Instagram.

“}]] 

Leave a Reply