Closing Loopholes

Background

On 15 December 2023, the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Closing Loopholes Act) made a number of changes  to the Fair Work Act 2009 (FW Act) and the functions of the Fair Work Commission (FWC). The Government has said that the changes are intended to remove perceived “loopholes” that were used to undermine wages and working conditions.

The amendments by the Closing Loopholes Act include:

• Small business redundance exemption
• Regulated labour hire arrangement provisions
• Workplace delegate rights provisions
• Protections against discrimination for that subject the family and domestic violence
• Amendments to compulsory conciliation conferences in protected actions ballot matters
• Amendments to Right of entry – assisting health and safety representatives.

This article provides an overview of these changes below.

Small Business Redundancy Exemption

The Closing Loopholes Act has amended the exemption for small business employers from the obligation to pay redundancy under FW Act. Previously, a small business employer was entirely exempt from the obligation to make redundancy payments, where an employee is terminated, either, at the employer initiative, where the role is no longer required, or due to the employer becoming insolvent or bankrupt.

The amendments mean 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.

Regulated Labour Hire Arrangement Jurisdiction

The Closing Loopholes Act has introduced Part 7-2A into the FW Act, which empowers the FWC to make certain orders regarding labour hire arrangements. Labour hire arrangements ordinarily involve the supply of one or more employers from the employer to a host employer, being either a person, entity, or otherwise, to perform work for the benefit of the host employer. The amendment enables the FWC, on application, to make a regulated labour hire arrangement order (RLHA order) if satisfied that:

1. An employer supplies their employees to a regulated host (other than a small business) to perform work for the benefit of the regulated host or an enterprise carried on by the regulated host; and
2. A covered employment instrument, such as an enterprise agreement or workplace determination, would apply to the employees if they are employed by the regulated host for the same work.

A RLHA order made by the FWC must specify the employer, regulated host, employees, and host employment instrument covered by the order and the date the RLHA order may come into force (with the earliest date being 1 November 2024).Once an RLHA order is in force, the employees being supplied to a regulated host must not be paid less than the ‘protected rate of pay’, being a rate of pay that would be otherwise payable if the employees had been engaged as employees of the regulated host under a covered employment instrument. An employer will be exempt from this requirement only in very limited  circumstances, namely, where a training arrangement applies in relation to work being performed for the regulated host, or where the regulated employee is performing work for the host for a period no longer than 3 months or as otherwise specified by the FWC.

The amendments also give the FWC the  power to make further orders that extend, vary, and resolve disputes for existing RLHA orders, including any alternative protected rate of pay arrangements.

Workplace delegates’ rights and delegates’ rights terms

The Closing Loopholes Act has also introduced specific rights and general protections for workplace delegates into the FW Act, which, from 1 July 2024, must be included in modern awards, enterprise agreements and workplace determinations in the form of a delegate’s rights terms.

A workplace delegate is a person appointed by an employee organisation to be a delegate or representative for members of the organisation. A workplace delegate has a right to represent the industrial interest of members and is entitled to engage in reasonable communication with those members – and for the purpose of representing those interests, they are also entitled to reasonable access to the workplace or workplace facilities. An employer must not unreasonably fail to deal with the workplace delegate, or make false or misleading representation, or unreasonably hinder the exercise of the workplace delegate’s rights.

A delegate rights term in an enterprise agreement cannot be less favourable than a delegate term in one or more modern award that cover the workplace delegate. A delegate’s rights term that is less favourable than the equivalent term, in one or more modern awards, will be taken to have no effect and will be replaced by the most favourable delegate rights term from the modern awards.

Protections against discrimination for those subjected to family and domestic violence

The Closing Loopholes Act has introduced new protections to safeguard against discrimination for those subjected to family and domestic violence. The protected attribute will be added to the prohibitions of:

• discriminatory terms in modern awards and enterprise agreements
• an employer taking adverse action on specified discriminatory grounds, and
• an employer terminating employment on specified discriminatory grounds.

The new protection also requires the Commission to have regard to family and domestic violence when performing and exercising its functions.

Amendments in relation to compulsory conciliation conferences in protected action ballot matters

The Closing Loopholes Act has introduced compulsory conciliation conferences for bargaining representatives in protected ballot matters. Under the FW Act, a bargaining representative acting for employee who will be covered by a proposed enterprise agreement may apply for a protected action ballot order requiring a protected action ballot to be conducted to determine whether employees wish to engage in protected industrial action. The amendment to the FW Act requires the bargaining representative who makes the application for protected action ballot order to attend the FWC conference, for the industrial action to be protected. Whilst the requirement to attend the FWC conference extends to the other parties, non-attendance by other parties will not impact whether the industrial action is protected.

Right of entry – assisting health and safety representatives

The Closing Loopholes Act also amends provisions relating to entry permits requirements for the officials of organisations who require entry into an employer premises to exercise occupational health and safety functions (OHS). Under the FW Act, an official of organisation seeking to exercise functions of an OHS officer must hold an entry permit. The amendment exempts an official of an organisation who is entering a workplace to assist a health and safety representative from the requirement to hold  an entry permit.

If you would like any further advice on changes to the FW Act may impact you, please contact our Employment, Workplace Relations, and Safety group at McCabes Lawyers.