Key changes under Closing Loopholes take effect this week

This article summarises several of the changes which came into effect recently as a result of changes to the Fair Work Act (FW Act) from the ‘Closing Loopholes’ legislation.

Casual employment

Closing Loopholes (No 2) will introduce a new definition of casual employee in section 15A of the FW Act, being that an employee is only casual if:

1. The employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work; and
2. The employee would be entitled to a casual loading or a specific rate of pay for casual employees under the terms of a fair work instrument if the employee were a casual employee, or the employee is entitled to such a loading or rate of pay under the contract of employment.

Additionally, there is now a legislated right in relation to conversion to permanent employment. Casual employees may give an employer written notification if their current employment relationship no longer meets the definition of casual employment (the notification). Within 21 days, the employer must give the employee a written response to the notification, stating whether the employer accepts or does not accept the notification, reasons for the same, information about changes to the employee’s employment, and setting out the dispute resolution measures available to the employee.

We refer to our previous article for further information on the changes to casual employment.

The right to disconnect

Closing Loopholes (No 2) amended the FW Act to include an enforceable workplace right to disconnect from their employers and third parties (if the contact or attempted contact is related to the employee’s work. This right does not apply to employees of small businesses until 26 August 2025.

Employees may now refuse to monitor, read or respond to contact or attempted contact, outside working hours, unless such refusal is unreasonable. Employers should be mindful that whether the refusal is reasonable will be determined on a case-by-case basis. As this is a workplace right within the general protection (adverse action) provisions of the FW Act, employers are prohibited from taking adverse action against an employee because of that right.

We refer to our previous article for further information on the right to disconnect.

Independent contractors

Several changes have been made with respect to independent contractors:

• A new definition of ’employee’ and ’employer in the FW Act, and introduced a ‘whole of relationship’ test for determining whether a worker is a contractor or an employee, which requires consideration of the real substance, practical reality and true nature of the working relationship.
• A new unfair contracts jurisdiction within the FWC which is accessible to certain independent contractors.
• A new contractor high income threshold into the FW Act, the amount of which is prescribed by the regulations (presently $175,000). Applications for orders in relation to unfair contract terms, can only be made by contractors whose annual rate of earnings is less than the high income threshold, in the year the application is made.
• A new category of contractor has been created, known as regulated workers. Regulated workers, including gig economy contractors and road transport contractors, have additional rules and minimum standards which act as protections compared to most contractors. The minimum standards will allow the FWC to implement orders and guidelines over payments, insurance and deductions.

We refer to our previous article for further insights into the changes effecting independent contractors.

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