Federal Workplace Relations Minister Tony Burke will introduce legislation to Parliament on Monday called the Fair Work Amendment (Closing Loopholes) Bill 2023. Our Policy and Advocacy team summarises what Minister Burke announced at the National Press Club yesterday.
Minister Burke has provided a list of reform areas that the Government considers to be loopholes, which he says this legislation will address.
The Minister clarified that most underpayments were not wage theft and that the proposed reforms in this area appear to capture conduct where an employer deliberately and intentionally underpays an employee which will constitute a criminal offence.
The Government is seeking to legislate to reverse the High Court’s decision of Rossato, which considered the nature of casual employment and provided employers and employees with certainty about casual employment. Employees will be entitled to request conversion to permanent employment after six months, and employers will be required to make an offer of conversion to permanent employment after 12 months.
This reform has been described by the Government as the ‘Same Job, Same Pay’ changes and is intended to create new laws that will apply where a business has an enterprise agreement in place. It appears to be designed to prevent employers paying labour hire workers lower rates than those specified in the business’ enterprise agreement.
The Government says this reform is intended to set minimum standards for workers in the gig economy. However, to do so the Government is seeking to create a new definition of “employee” which reflects the common law position before the recent High Court decisions of Jamsek and Personnel Contracting. These decisions gave primacy to contractual terms that are agreed between the parties, rather than a subjective analysis of their conduct, providing certainty to who is and isn’t an employee.
Following on from this definition of employee, the Government will then create a new definition for “employee-like” workers which is intended to be a middle ground between contractors and employees
The Fair Work Commission (FWC) will be able to set minimum standards for “employee-like” workers, including minimum pay rates and will have the jurisdiction to resolve disputes at the request of the worker and to hear challenges where a worker is removed from a digital platform, a process that appears similar to an unfair dismissal claim for employees.
To fall within this new FWC jurisdiction, there will be a two-tier test:
- Is the worker on a digital platform; and
- Does the worker satisfy the new definition of “employee-like”.
Minister Burke provided the criteria for establishing whether a worker satisfies this new definition, which includes:
- Does the worker have low bargaining power;
- Does the worker have low control over their work; and
- Is the worker low-paid.
The requirement for a worker to be engaged under a digital platform is intended to limit this new jurisdiction to the gig-economy, however, importantly it appears the regulations will also provide the Minister power to prescribe further characteristics of an “employee-like” worker.
CCIWA will provide more detail about these reforms next week when the new legislation is released, however, the changes that Minister Burke has outlined are concerning and will add complexity, costs, and reduce the certainty for businesses when employing people or engaging contractors.
The Government intends for the laws to be made effective from 1 July 2024.
Are you concerned about the Federal Government’s IR reforms? Get in touch with our workplace experts today by calling our Employee Relations Advice Centre on 9365 7660 or CCIWA Members can book a free consultation with one of our employment lawyers by emailing [email protected]