Civil penalties and serious contraventions
From 27 February 2024, the maximum civil penalties for “serious contraventions” for breaches of the Fair Work Act 2009 has increased from $12,600 to $126,000 for individuals and from $63,000 to $630,000 for bodies corporate
A serious contravention happens when the court finds that:
- a person or business knew they were contravening an obligation under workplace laws
- the contravention was part of a systematic pattern of conduct affecting one or more people.
Serious contraventions apply to breaches of:
- the National Employment Standards
- a modern award
- an enterprise agreement
- a workplace determination
- a national minimum wage order
- an equal remuneration wage order
- method and frequency of paying wages
- unlawful deductions including cashback schemes
- guarantees of annual earnings
- record-keeping requirements, and
- pay slip requirements.
If someone else was involved in the contravention and knew it was a contravention, they could also face higher penalties.
Sham Contracting
From 27 February 2024, a new defence applies for employers who engage an independent contractor, who is found to be an employee. Previously, the employer had to prove that, at the time of making the representation, the employer:
- did not know; and
- was not reckless as to whether,
there was an employment relationship.
The new changes require the employer to prove that at time of making the representation, they “reasonably believed” that there was an independent contractor arrangement.
This changes the defence from a subjective defence, based on an employer’s knowledge and recklessness, to an objective defence, based on an assessment of reasonableness. This gives the Court a wide discretion to determine whether the employer’s belief was reasonable.
The size and nature of the employer’s enterprise is the only mandatory consideration, which aligns with the Fair Work Act’s objectives to acknowledge the special circumstances of small and medium sized businesses. Otherwise, a Court may consider “any other relevant matters”, examples of which include the following:
- the employer’s skills and experience;
- the employer’s industry;
- how long the employer has been operating;
- the presence or absence of a designated human resources or industrial relations team within the employer’s enterprise; and
- whether the employer sought legal or other professional advice about the proper classification of the individual and if so, acted in accordance with that advice.
Casual Employment
Casual Employee definition
From 26 August 2024, the definition of “casual employee” in the Fair Work Act 2009 will state that an employee is a casual employee only 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.
This definition makes the assessment of causal employment objective, and broadens the various factors that are relevant.
Relevant factors would include:
- whether there is a mutual understanding or expectation between the employer and employee;
- whether the employee can elect to accept or reject work;
- the future availability of continuing work;
- whether there are other employees performing the same work who are part-time or full-time employees; and
- whether there is a regular pattern of work.
A casual employee who has a regular pattern of work may still be a casual employee if there is no firm advance commitment to continuing and indefinite work.
For example, an employee might indicate she can only accept casual shifts on Friday and Saturday nights, and in fact is only offered shifts at these times. However, if the employer makes it clear in the contract that there is no firm advance commitment to continuing and indefinite work in the business, then the employee is correctly classified as a casual within the meaning of the FW Act.
Right to initiate casual conversion
Casual employees, who work regular or predicable shifts, will now be able to apply for conversion after 6 months of regular working arrangements (12 months if employed by a small business).
Employers will be required to respond to written notification from casual employees within 21 days after the notification is given to the employer. Employers must comply with a range of form, content and notice requirements for a response to be properly provided. Employers may not accept an employee notification for conversion, if:
- the employee does not meet the definition of a casual employee;
- there are fair and reasonable operational ground for not accepting the notification; or
- accepting the notification would result in the employer not complying with recruitment or selection processes required by Commonwealth, State or Territory laws.
The new “employee choice” pathway differs to the previous process of casual conversion as it is now up to the employee to initiate the shift to permanent employment, as opposed to the employer who was required to review their casual workforce and offer casual conversion where appropriate.
Right to disconnect
From 26 August 2024 for non-small business employers and from 26 August 2025 for small business employers, employees will have the right to refuse to monitor, read, or respond to contact (or attempted contact) from an employer or a third party outside their working hours, unless that refusal is unreasonable.
It is important to note that the right to disconnect does not oblige employers to refrain from any contract with employees outside of working hours. Instead, it gives employees a right not to engage with attempts at contact outside of their working hours where it is reasonable for them to do so.
Employers should take steps now to prepare for the new right to disconnect. This includes:
- reviewing employment contracts;
- considering updating or introducing policies regarding out-of-hours contact;
- updating recruitment policies and procedures to be clear about expectations for out-of-hours contact, particularly where a role will involve being part of an international team; and
- designing new processes to manage communication protocols and expectations.
Employers who need help can contact BetterHR’s experienced HR consultants, and qualified lawyers on 1300 659 563 or visit: https://betterhr.com.au/
