The Closing Loopholes Bill is being introduced to amend the Fair Work Act 2009 (Cth) (FW Act) and related legislation to close any existing loopholes that undermine pay and conditions and to improve the work health and safety (WHS) framework so as to better protect employees in the workplace.
The House of Representatives has 4 weeks to debate the proposed legislation.
The Closing Loopholes Bill intends to introduce extensive changes including the following key provisions:
- Underpayments and criminal wage theft
- New penalties for intentional underpayments will apply from next year and the introduction of the criminal wage theft offence will begin by no later than 2025.
- This includes potential prison terms for employers of up to 10 years imprisonment who intentionally engage in wage theft and maximum fine of up to $8million or up to three times the amount stolen if it exceeds the cap in both criminal and civil contexts to allow penalties to be proportionate to the scale of misconduct.
- According to Tony Burke, employers ‘who take reasonable steps to pay the correct amounts or who make honest mistakes, will not be criminally prosecuted’.
- The Fair Work Ombudsman may exercise discretion not to proceed with criminal wage theft proceedings if businesses enter into cooperative agreements.
- A new Voluntary Small Business Wage Compliance Code will provide assurances to small-business employers that they cannot be pursued criminally if they take appropriate steps to comply with the law.
- Expanding the powers of the FWC to permit right of entry to investigate suspected underpayments. There are also new protections and rights for workplace delegates including paid access to relevant training (small businesses are exempt).
- Introduction of definition of ‘employee’ and ‘employee like’ category for gig workers
- The definition of employee will be based on the former common law test of considering the reality of the working relationship rather than just the contractual terms as confirmed in the High Court decision of Jamsek last year.
- The Fair Work Commission (FWC) will have the power to set minimum standards for ‘employee-like’ gig workers including minimum pay.
- Closing the forced permanent casual worker loophole
- A casual employee who is working as a permanent worker will be able to access secure employment if they want to do so.
- A casual employee will still be defined as someone who does not have a firm advance commitment to continuing and indefinite work.
- Employees will be able to notify their employer if they wish to be permanent and do not meet the casual definition. In those circumstances no back pay will accrue.
- Closing the loophole for labour hire workers
- The FWC will have the power to make an order to ensure that labour hire workers are paid at least the minimum rates in the host business’s enterprise agreement (excluding specialised or expert services) provided it is fair and reasonable to do so.
- This will not apply to small businesses, independent contractors or training arrangements.
- A default three-month exemption will also apply to avoid impacting labour hire arrangement for surge work and temporary replacements.
- Increase in maximum penalties for Federal Occupational Health and Safety (OHS) Laws
- Penalties increase to $15million for category one offences involving reckless or criminally negligent breaches of OHS Duties and increase maximum imprisonment from five to fifteen years;
- Industrial manslaughter to be a criminal offence with a maximum prison term of up to 25 years for an individual and body corporates to be fined up to $18million. This will take effect in July next year.
Other additional provisions to be aware of
- Introduction of a new jurisdiction into the FWC to allow businesses to challenge unfair contract terms;
- The Bill contains anti-avoidance protections;
- FWC will be able to set minimum standards for the road transport industry. An expert panel within the FWC will take account of advice from a road transport advisory group;
- The Asbestos Safety and Eradication Agency will be expanded to include silica safety and silica related disease;
- Workers’ compensation processes for first responders with post-traumatic stress disorder will be simplified;
- FWC will have the power to make enterprise agreement model terms, allowing franchisees to bargain together and allowing employers covered by a multi- enterprise agreement to bargain with their employees for a replacement single enterprise agreement at any time;
- Stronger workplace protections for employees subjected to family and domestic violence.
The above is a quick overview of key proposals and additional provisions in the Closing Loopholes Bill. This is a developing area that we will be watching closely. Please contact the Workplace Health and Safety Team at Panetta McGrath on (08) 9321 0522 for any further advice that you may require in relation to the Closing Loopholes Bill or any other employment or safety matters. We would be happy to assist.
