Closing Loopholes No 2 Bill – new laws regarding casuals, contractors and the right to disconnect

The second round of the Federal Government’s “Closing Loopholes” amendments to the Fair Work Act 2009 (Cth) (FW Act) were passed by Parliament on 12 February 2024 and received Royal Assent on 26 February 2024. These amendments mean employers will need to review their contractor arrangements, casual employee contracts and policies, hours of work provisions in employment contracts and policies as well as their practices, and enterprise bargaining strategies.  

These amendments follow the Fair Work Legislation Amendment (Closing Loopholes No.1) Act 2023 amendments which received Royal Assent on 14 December 2023. See our previous article for a summary of these amendments.

We outline the key changes and proposed actions for employers in our latest information sheet.

Key changes include:

1. Right to disconnect: a new “right to disconnect” for employees, which allows them to refuse contact or attempted contact from their employer (or a third party regarding their work) outside their working hours, unless the refusal is unreasonable.
2. Casual employment: a new definition of casual employee that looks at the true nature of the employment as well as other new indicia, a new pathway for casual conversion at the employee’s election, and increased penalties for misrepresentations regarding casuals.
3. Definition of employer and employee: 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.
4. Sham contractor arrangements: a change to the employer defence to misrepresenting employment as an independent contractor arrangement.
5. Regulated workers: special provisions for workers in the road transport industry and employee like workers in the gig economy.
6. Unfair contracts regime: giving power to the Fair Work Commission (FWC) to amend, vary or set aside certain terms of services contracts that it finds to be unfair.
7. 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.
8. Enterprise agreements and bargaining: a major change to the intractable bargaining provisions means that preparing for protracted industrial action will be a critical part of enterprise bargaining planning in many industries.

This article was written with the assistance of  Naomi Cooper, Megan Prouatt, Joseph El Hagg and Shifra Shoib.