Is your practice ready for the new workplace law reforms?

The National Minimum Wage has increased by 3.75% to $24.10 per hour, or $915.90 per week for a full-time employee.

The minimum rates of pay under modern awards also increased by 3.75%.

A new statutory definition of ‘casual employee’ has been introduced under the FW Act.

A person will now be a ‘casual employee’ where:

1.     the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work; and

2.     they are entitled to receive a casual loading or specific casual pay under the terms of an industrial instrument or their contract of employment.

Determining the existence of a “firm advance commitment to continuing and indefinite work” is assessed based on the “real substance, practical reality and true nature” of the employment relationship between the employee and employer, not just the terms of the employment contract.

Practices will need to review and update their casual employment contract templates to ensure they are consistent with the new definition of ‘casual employee’.

Practices should also critically review the working arrangements of existing casuals, particularly those who have been employed for a long time or on a regular and systematic basis and seek legal advice if they have concerns that the arrangements suggest a commitment to continuing and indefinite work.

The current casual conversion pathway is being replaced with a new ‘employee choice’ process.

Under the ‘employee choice’ process, after 6 months of employment (or 12 months for a business with less than 15 employees) a casual employee can issue a written notification to their employer that they would like to change their employment status to full time or part time.

A strict process will then apply that requires the employer to consult with the employee about the notification and respond in writing to the notification within 21 days. An employer can only refuse a notification on the following grounds:

1.     the employee still meets the new statutory definition of a casual employee;

2.     there are fair and reasonable operational grounds for not accepting the notification; or

3.     accepting the notification would result in the employer not complying with a recruitment or selection process required by or under an applicable law.

Where there is a dispute about the ‘employee choice’ process, an employee or employer can apply to the Fair Work Commission to resolve the dispute.

Currently, employers must provide the Casual Employment Information Statement (CEIS) to all new casual employees before or as soon as practicable after the casual employee commences employment.

Employers will now also be required to give a casual employee a copy of the CEIS at additional various points during the employee’s employment.

Practices must now give a casual employee a copy of the CEIS:

1.     before, or as soon as practicable after, the start of their employment.

2.     for non-small businesses (ie businesses with 15 or more employees) as soon as possible after the casual employee has been employed for: 

a)     6 months;

b)     12 months and every subsequent 12-month period of employment;

3.     for small businesses (ie businesses with less than 15 employees) as soon as possible after the casual employee has been employed for a year.

The new laws introduce anti-avoidance measures which prohibit an employer from:

1.     dismissing an employee to engage them as a casual employee; or

2.     knowingly making a false statement to a current or former employee with the intention of persuading or influencing that employee to become a casual employee.

Pecuniary penalties will apply for contravening the anti-avoidance measures.

26 August 2024 for businesses with 15 or more employees

26 August 2025 for businesses with less than 15 employees

Employees will have the right to refuse to monitor, read or respond to contact or attempted contact from their employer or a third-party outside of their working hours unless that refusal is unreasonable.

The right to disconnect does not prohibit an employer or third party from contacting, or attempting to contact, an employee outside the employee's working hours. Rather the employee has the right to refuse to monitor, read or respond to contact, or attempted contact, outside their working hours.

An employee may exercise the right to disconnect outside of their working hours unless the refusal is unreasonable. When determining whether a refusal is unreasonable, the following matters will be taken into account:

1.     the reason for the contact or attempted contact;

2.     how the contact is made and the level of disruption the contact or attempted contact causes the employee;

3.     the extent to which the employee is compensated;

4.     the nature of the employee’s role and the employee’s level of responsibility; and

5.     the employee’s personal circumstances, including family or caring responsibilities.

The Fair Work Commission will be empowered to deal with disputes by either an employer or an employee regarding the right to disconnect.

Importantly, the right to disconnect is a ‘workplace right,’, so an employer cannot take adverse action against an employee because they exercise their right to disconnect.

Practices should:

1.     Identify and limit out-of-hours contact to what is absolutely necessary.

2.     Educate practice managers and staff about the right to disconnect.

3.     Review employment contracts to clarify expectations and compensation for after-hours work.

A new statutory definition of ‘employee’ and ‘employer’ has been introduced into the FW Act for the purpose of determining if a worker is an employee or an independent contractor.

Whether a person is an employee will be determined based on the real substance, practical reality and true nature of the working relationship, including consideration of the ‘totality of the relationship’ between the individual and the person’. This includes not only the terms of the contract but also how the contract is performed in practice.

The new definitions mean that a practice cannot rely on simply labelling a person an employee or contractor to indicate what the relationship is.

Practices should review working arrangements with  contractors and obtain legal advice where any uncertainty arises, especially if the worker does not provide services to others or works alongside employees performing the same or similar work.

A person who is a party to a services contract (ie an independent contractor agreement) will now be able to make an application to the Fair Work Commission that a term of the services contract is ‘unfair’.

A person will only be able to make an application if they earn less than the ‘contractor high income threshold,’ which has not yet been set.

The Fair Work Commission can make an order setting aside all or part of a services contract or amending the terms of the contract if they are satisfied a term of the contract is unfair, having regard to several prescribed matters.

Intentional underpayment of employees will now be a criminal offence and increased civil penalties will apply.

A Voluntary Small Business Wage Compliance Code will be established so that small businesses that comply with the Code can avoid criminal prosecution.