Major Changes to the Fair Work Act 2009 (Cth)

Parliament has recently enacted two major law reforms to the Fair Work Act 2009 (Cth):

1. Fair Work Legislation Amendment (Closing Loopholes) Act 2023
2. Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024

These reforms to the Fair Work Act will have a significant impact on employers – the most notable reforms include:

Changes in the definition of ‘Employee’

In determining whether a worker is an employee or an independent contractor, consideration must now be given to:

• the real substance, practical reality and true nature of the relationship; and
• the whole relationship between the parties, including the terms of the contract and how the contract is performed in practice.

This overturns High Court rulings in ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2 & WorkPac Pty Ltd v Rossato [2021] HCA 23 which determined a worker’s status by reference to an employee’s contractual terms. The test for determining an employee will now revert back to the ‘multi-factorial test’ used for decades prior to the aforementioned High Court decisions.

Changes to the definition of a ‘Casual Employee’

An employee is a casual employee only if:

1. There is an absence of commitment to guarantee ongoing or permanent work by the employer; and
2. The employee is entitled to casual loading or a specific rate of pay specifically for casual employees under a Modern Award.

Criminalisation of Wage Theft

Wage theft will now become a criminal offence with a maximum penalty of up to 10 years imprisonment.

The financial penalties have also been increased five-fold from 60 penalty units to 300 penalty units (as at 11 April 2024 the fine is $93,900) for contravention of any of the following provisions:

• National Employment Standards
• Modern Awards
• Enterprise Agreements
• Remedy Provisions

Employee Right to Disconnect

Employees will now have the statutory right to reasonably refuse to monitor, read or respond to contact from an employer outside of working hours.

How can DSA Law Help You?

If you require assistance in determining how such changes may affect you, please reach out to the Employment Law Team at DSA Law on (03) 8595 9580.