Happy New Year to all our members.
As there are a few significant changes in employment law space in 2025, it would be prudent for our members as employers to be familiar with these changes and be proactive to implement these and amend the workplace policies and procedures accordingly. This approach would enable you to be efficient and compliant with the relevant laws. Below are some of the areas which require the update:
Right to Disconnect
The Right to Disconnect laws commenced from 26 August 2024 for non-small business employers. They will commence from 26 August 2025 for small business employers.
It is important for employers to understand these laws and allow their employees to exercise their positive rights to refuse monitoring, reading or responding to contact from the employer or third-party outside of their working hours. Most Modern Awards have been updated to include Right to disconnect provisions. You can read more about the Right to Disconnect on the BetterHR website: https://betterhr.com.au/news/right-to-disconnect-laws/
New Casual Employee Definition
Employers must also be familiar with the new casual employee definition pursuant to s 15A of the Fair Work Act, which was introduced on 26 August 2024. Under this new definition, an employee is casual if:
– the employment relationship has no firm advance commitment to ongoing work, taking into account a number of factors, and
– they’re entitled to a casual loading or specific casual pay rate under an award, registered agreement, or employment contract.
If the employee does not meet the above requirements, they could be identified as permanent employees. This could affect their workplace rights, entitlements and their eligibility for the unfair dismissal claim. You can read more about his on the BetterHR website: https://betterhr.com.au/news/casual-employment-changes/
New Casual Conversion (Employee Choice) Pathway
From 26 August 2024, the new laws allow casual employees to have a new pathway to full-time or part-time (permanent) employment under the National Employment Standards.
The ‘employee choice pathway’ allows eligible casuals to notify their employer in writing of their intention to change to permanent employment. An employer can only refuse the notice for certain reasons.
The old casual conversion pathway does not apply for the casual employees engaged on or after 26 August 2024 but still continues to apply for 6 months (12 months if employed by a small business) from 26 August 2024, i.e., until 25 February 2025 for casual employees of non-small business employers and until 25 August 2025 for casual employees of small business employers.
This effectively means that eligible casual employees can make a notification under the new pathway from 26 February 2025 (or 26 August 2025 if employed by a small business) to choose to be a permanent employee. Learn more about the new casual conversion pathway at https://betterhr.com.au/news/casual-employment-changes/
New definitions of Employer and Employee (Independent Contractors)
From 26 August 2024, the Fair Work Act has amended the way an employee and independent contractor are defined by applying a multi-factorial assessment in determining whether a relationship is one of employment or not.
The new section requires determination of the employer and employee to be within the ordinary meaning of that expression in the terms of a written contract and by ascertaining the real substance, practical reality and true nature of the relationship between the individual and the person/principal.
It is important for the employers to understand the difference between an employee and independent contractor. A misunderstanding of the employee to be an independent contractor can cause the employer to be liable for “sham contracting” and consequent penalties.
Restrictions on Hiring Casual Employees on Fixed Term Contracts
From 26 August 2024, an employee cannot be hired as a casual on a fixed-term contract if all of the following apply to them:
– they’re a member of the academic or higher education teaching staff of a higher education institution;
– they’re not a state public sector employee;
– they’re covered by the Higher Education Academic Staff Award or Higher Education General Staff Award.
Criminal underpayment (wage theft) laws start 1 January 2025
From 1 January 2025, intentionally underpaying an employee’s wages or entitlements can be a criminal offence. This does not include honest mistakes. The Voluntary Small Business Wage Compliance Code is now available to help businesses prepare and protect themselves. A small business employer will comply with the Code if they do not intend to underpay their employees. The Voluntary Small Business Wage Compliance Code can be accessed at: https://www.legislation.gov.au/F2024L01635/asmade/text
Therefore, it is of utmost importance for the employers to accurately classify the employees and identify their correct pay rates, overtime, penalties and allowances pursuant to the applicable Modern Award/Enterprise Agreement or NES. A proper process and regular internal audits in this regard can ensure that the employer is not committing the wage theft.
Superannuation
Superannuation Guarantee (SG) is scheduled to increase from the current 11.5% to 12% from 1 July 2025. This is the final increase in accordance with the annual 0.5% stepped increases since 2021.
Paid Parental Leave Pay Scheme
From 1 July 2025, the amount of Parental Leave Pay available to families will increase again from 22 weeks to 24 weeks, with 3 weeks reserved for each parent/partner. Moreover, the parents will be able to take up to 4 weeks of paid parental leave pay under this Scheme concurrently with the other parent/partner.
The BetterHR Advice team is here to assist with any questions relating to the above employment law changes or any other HR or employment law matters. We wish you a very happy and prosperous 2025.
If you need further information or assistance, please contact BetterHR’s experienced HR consultants, and qualified lawyers on 1300 659 563 or visit: Subscribe to BetterHR.
