Untangling the Closing Loopholes Bill

This week, the Federal Government introduced its long awaited Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 (Bill). Although the title of the Bill suggests it addresses a few gaps in the Fair Work Act 2009 (Cth) (FW Act), the Bill is a game changer with respect to casual employees, contractors and labour hire and wage theft.

Our employment team have outlined a summary of the key changes proposed by the Bill along with proposed actions for employers in the attached.

Although the passage of the Bill has been delayed until after a Senate Committee report is handed down on 1 February 2024, employers should start considering strategies to address the impact of the Bill on their current employment arrangements and whether to make submissions to the Committee.

Key changes include:

1. Casual employment: a new definition of casual employee that looks at the whole employment relationship and a right for casuals to request conversion, as well as increased penalties for misrepresentations regarding casuals.
2. Employee/contractor relationships: a new definition of employee and employer based on the “ordinary meaning” of the terms, designed to restore the employee versus independent contractor test to the multi-factorial test.
3. Sham contractor arrangements: a change to the employer defence to misrepresenting employment as an independent contractor arrangement.
4. Regulation of labour hire: giving the Fair Work Commission (FWC) the power to make orders requiring employers who provide their employees to work for a ‘regulated host’ to pay their employees the same pay as employees of the host who do the same kind of work.
5. Increased maximum penalties and criminal offences: significant changes to penalties for underpayments and sham contracting, and the test for ‘serious contraventions’ and new criminal offences for underpayments.
6. Unfair contracts regime; giving power to the FWC to amend, vary or set aside certain terms of services contracts that it finds to be unfair.
7. Regulated workers: special provisions for workers in the road transport industry and employee like workers in the gig economy.
8. Work health and safety: introducing a Commonwealth industrial manslaughter offence and increasing maximum penalties.
9. Family and domestic violence protections: stronger protections against discrimination for employees who have experienced, or are experiencing family and domestic violence.
10. Enterprise bargaining: changes regarding interaction between single and multi- employer enterprise agreements and enhanced rights and protections for workplace delegates.