Private Client Specific Docs

Confidential Report – NOT for Distribution | ©Crain Communications Inc. All rights reserved. 2 Asia Pacific Legal Update | Q1 2024 Asia Pacific Australia 1. Changes to classification of employees, casual workers and platform workers in Closing Loopholes No.2 Act In September 2023, the Government introduced the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 (CL Bill). Attaining the necessary crossbench support proved difficult and a deal was reached to split the CL Bill in two. A stripped-down version was passed as the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (CL Act 2023), which received royal assent on 14 December 2023. This introduced Regulated Labour Hire Arrangement Orders to provide "same job, same pay" for labour hire workers and criminalization of wage theft. The other parts of the CL Bill were included in the Fair Work Legislation Amendment (Closing Loopholes No 2) Act 2024 (CL No 2 Act) which received royal assent on 27 February 2024. The changes in the CL No2 Act include those parts concerning regulation of the gig economy, amendments relating to casual employment conversion, and further changes to the bargaining regime. It also creates a "right to disconnect" for employees when away from work. All modern awards will be required to include a right to disconnect term, which will allow rules about the exercise of the new right to be tailored for different sectors. Casual employment. The Fair Work Act currently defines a casual employee by reference to the terms of the employment contract, without consideration of the employment relationship in practice. Instead, the CL No2 Act states that the "absence of a firm advance commitment to continuing and indefinite work" will be assessed by reference to the "real substance, practical reality and true nature of the employment relationship", not simply the terms on which the employee has been engaged. Even if an employee is labelled and paid as a casual, they cannot be classed as such if the expectation from the outset is that continuing and regular work will be offered. However, if employment genuinely starts off as casual, the fact it gradually settles into ongoing and regular work will not mean the employee ceases to be a casual. That can only happen if the parties agree on a new arrangement, or the employee successfully pursues conversion to permanent (ongoing) employment after six or 12 months under a new framework process. These provisions become effective from 26 August 2024. Definition of employee. When determining whether a person is an employee, a new section 15AA will, as with casual employment, direct attention to "the 'real substance, practical reality and true nature of the relationship". This overturns the High Court's 2022 Personnel Contracting and Jamsek rulings, which insisted on judging a worker's status by reference to the contractual terms on which they are engaged. Employers found to have misclassified an employee as an independent contractor may be penalised for sham contracting, unless they can prove under an amended section 357(2) that they reasonably believed the contract to be one for services, not employment. It was previously a sufficient defence that the employer had not been reckless about this. These provisions become effective from 26 August 2024. Digital platform workers. A new Chapter 3A of the FW Act will (a) empower the Fair Work Commission to make minimum standards orders or guidelines for work performed by road transport contractors or digital platform workers; (b) allow unions and road transport or platform operators to negotiate collective agreements improving on those standards; and (c) permit the two types of 'regulated worker' to complain about unfair loss of work. To qualify as "employee-like", a platform worker must satisfy two of the four criteria listed in section 15P(1)(e): low bargaining power, remuneration at or below award rates, low authority over work

• Cover