2024 Upcoming Changes – ‘Closing Loopholes’
The Australian Government has introduced the Fair Work Legislation Amendment (Closing Loopholes) to focus on minimising gaps in employment laws which have historically been exploited for unfair practices. Both employers and employers should stay informed of these changes as they may impact their workplace. With the imposed changes taking effect between 2024 and 2025, this article will provide an overview of significant changes.
Changes to Fixed or Maximum Term Employment:
From 6 December 2023, new rules were introduced to the Fair Work Act 2009 (FWA) to limit the use of maximum term contracts. Employers are prohibited from engaging an employee on a fixed or maximum term contract, which exceeds a duration of two years from the commencement date.
Additionally, these types of arrangements cannot be extended more than once and cannot be placed under consecutive contracts of employment where the employee is performing the same, or substantially the same work under consecutive contracts.
Lastly, employers are now obligated to provide any fixed or maximum term employee with a copy of the Fixed-Term Fair Work Information Statement in addition to the standard Fair Work Information Statement upon commencement of employment.
Small business redundancy exemption:
From 15 December 2023, new rules were introduced regarding business redundancy exemptions. Small business employers are not usually required to pay redundancy to employees who are made redundant. However, a non-small business can become a small business due to the process of downsizing its workforce. This may occur in the period leading up to (or after) bankruptcy or liquidation.
Previously, this meant that employers were not required to pay redundancy to employees made redundant if the business had fewer than 15 employees. Under these new provisions, non-small business employers which become a small business employer in these circumstances may still be required to pay their employees redundancy pay.
Superannuation guarantee increase and annual wage review:
From 1 July 2024, the Annual Wage Review usually sees an increase to the National Minimum Wage and award rates of pay.
As well as this, the Superannuation Guarantee will also increase by 0.5% bringing the 2024-2025 Superannuation Guarantee to 11.5%. It is important to note that this is set to further increase to 12% on 1 July 2025. The increase means that employers must make a compulsory Superannuation contribution of 11.5% to employees for the 2024-2025 financial year.
Changes to casual employment:
From 26 August 2024, the existing definition of a ‘casual employee’ in the FWA will be replaced with a new definition. The updated definition stipulates that an individual will be considered a casual employee if:
there isn’t a firm advance commitment to continuing and indefinite work, factoring in the real substance, practical reality and true nature of the employment relationship;
the employee is entitled to be paid a casual loading or a specific pay rate for casuals.
New rules will also be established to prevent employers from dismissing or threatening to dismiss workers to engage them as casual employees. Additionally, employers will not be allowed to make false claims about casual employment i.e. an employer intentionally disguising a different type of employment relationship as a casual employment relationship for their own benefit.
Right to disconnect for non-small business employers:
From 26 August 2024, the “right to disconnect” term will grant employees a right to refuse to monitor, read or respond to contact from an employer outside of their ordinary working hours, unless the refusal is unreasonable.
For non-small business employers, the new “right to disconnect” term is intended to roll out on 26 August 2024. However, for small business employers, the anticipated changes are intended to roll out a year later on 26 August 2025. For further information regarding the upcoming “right to disconnect” term, click here to view our full article.
Criminalising intentional wage underpayments:
From 1 January 2025, intentional underpayments of wages by employers will become a criminal offence with serious consequences. There are new maximum penalties that courts may impose for certain contraventions associated with underpayment. It is important to note, these penalties can apply against companies who are not small business employers.
Be sure to stay tuned for more updates from HRBA on the new legislations covered in this article so that you can be sure of what this may mean for your business and its employees.
If you feel uncertain about these changes or wish to gain further information, please contact the team at HR Business Assist on 1300 138 551.