The next tranche of Australian employment reforms are coming – are you ready?

A new definition of casual employment will apply, which requires that the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work and the employee is paid a casual loading or a specific rate of pay for casual employees. The nature of employment will be determined objectively having regard to the ‘real substance, practical reality and true nature of the employment relationship’. 

The above definitional change is supported by the following reforms: 

• A casual employee will remain a casual until a ‘specified event’ occurs, being that their employment status changes to full-time or part-time in accordance with the employee choice framework (see below), by Fair Work Commission (FWC) order, in accordance with an industrial instrument or by mutual agreement between the employee and their employer. 
• A new employee choice framework will replace the existing casual conversion provisions, enabling a casual employee to issue a written notification to their employer if they would like to change their employment status to full-time or part-time employment (and setting out a procedure for dealing with such requests). 
• The Casual Employment Information Statement must be provided to casual employees at the commencement of employment, after six and 12 months of employment, and every 12 months thereafter. Small businesses are only required to provide it on commencement and after 12 months of employment.
• Casual employees will have increased access to the small claims jurisdiction, as well as dispute resolution mechanisms in the FWC about the categorisation of their employment.
   

1. Casual employment contracts – This is an opportunity to reflect on the language used in casual employment contracts to ensure that it aligns with the new definition under the FW Act, and how such casual employees are onboarded at the commencement of their employment. 
2. Audit existing casual relationships – Organisations should review how they currently engage and manage casual employees to assess the risk of them being found to be permanent employees under this new definition (noting the approach is to consider the totality of the relationship, meaning both the contractual terms but also what happens on the ground). 
3. Review and update casual engagement processes – Organisations should consider their existing casual processes to ensure persons with the appropriate level of knowledge about the day-to-day working arrangements of individual casual employees are tasked with, or have input into, the employee choice framework and ensuring that casuals receive the Casual Employment Information Statement at the required frequency. 
    

The reforms undo the effect of these HCA Decisions. The FW Act will have a new “ordinary meaning” definition of employee and employer, which is to be determined by “ascertaining the real substance, practical reality, and true nature of the relationship” between the parties. This requires the totality of the relationship to be considered, including the terms of the contract governing the relationship and any other factors such as how the contract is performed in practice.

Independent contractors who earn over the new contractor high income threshold (which has been set at $175,000 per annum) will be empowered to issue “opt out” notices recording their election that the new employee definition not apply to them, thereby preserving their status as an independent contractor for the period of the “opt-out” notice. However, a contractor is subsequently able to revoke the opt out notice during the relationship, should they choose to do so.
 

1. Review existing contractor engagements – Organisations should review their independent contractor engagements to ensure they are not, at law, employment relationships, and that the parties are acting in a manner consistent with the intended relationship. This is to mitigate the risk of such individuals being considered employees at law. 
2. Consider contractor engagement strategies – Principals should consider how they engage with contractors on the ground. Given the various new minimum conditions being imposed on some principal/contractor relationships, and the new avenues available for dealing with disputes, it will be increasingly important for principals to get ahead of disputes and grievances before they arise. 
3. Consider the use of opt-out notices – For businesses who engage independent contractors who exceed the contractor high income threshold, it is worth considering the use of such notices to provide certainty about the nature of the relationship with those contractors. However, the ability of an individual to unilaterally revoke such a notice means businesses will still need to carefully assess their arrangements with those contractors to ensure they do not, based on the totality of the relationship, meet the new employee definition set out above.
    

The right to disconnect is a positive right for employees to refuse to monitor, read or respond to contact, or attempted contact, from an employer outside of the employee’s working hours unless the refusal is unreasonable. This right will be a protected attribute for the purposes of the general protections regime in the FW Act.

While there is no limitation on the matters that may be considered when determining whether contact is unreasonable, the FW Act will require the following factors to be taken into account:

• the reason for the contact or attempted contact;
• how the contact is made and the level of disruption the contact or attempted contact causes the employee;
• the extent to which the employee is compensated to remain available to perform work during the period in which the contact or attempted contact is made;
• the nature of the employee’s role and the employee’s level of responsibility; and 
• the employee’s personal circumstances, including family or caring responsibilities.

The FWC will have powers to deal with a dispute raised by either an employer or employee regarding the right, as well as the ability for a person to make an application to the FWC for a ‘Stop Order’. Orders that the FWC may make include that the employee be prevented from continuing to unreasonably refuse to monitor, read or respond to contact or attempted contact, that the employer be prevented from taking disciplinary action against the employee for a reasonable refusal, or that the employer be prevented from making unreasonable contact with the employee.

All modern awards will also have a term that specifies that employees can exercise this new right from 26 August 2024. 
Small business are exempt from these provisions until 26 August 2025.
 

1. Consider existing work practices – Employers should consider how the introduction of this right impacts on existing operations or work patterns at their workplace. This includes thinking about how the right to disconnect may impact on employees with flexible work arrangements and impact employees who may work across different time zones or roster patterns. 
2. Consider implementing policies and protocols – Employers should turn an eye to how existing work practices and policies could be updated to ensure that managers are aware of these new rights and consider what training or organisational changes are needed to ensure employees are not subject to unreasonable contact outside of their work hours.
3. Take complaints seriously – Employers should take note that the ‘right to disconnect’ now forms one of the protected attributes under the FW Act and should therefore be vigilant in responding to complaints raised about this new employee right. This also means that employees could make both dismissal and non-dismissal related general protections claims if they believe that adverse action was taken against them in connection with exercising their workplace ‘right to disconnect’. This may well become a regular feature in performance-related dismissals, and its possible we will see these new rights referred to in the context of complaints about assessment of bonus eligibility and general performance appraisals (particularly where they influence remuneration).
    

• See pages 86-88 of our CL Act summary
• Australian Employees Given New Right to Disconnect
• The right to disconnect - practical tips and key learnings for employers
• 'Right to Disconnect' Checklist
   

This new regime establishes the following framework for road transport workers:

• The establishment of an Expert Panel for the road transport industry and a Road Transport Advisory Group to provide a forum for discussion and advice on matters relevant to the road transport industry. 
• The ability for the FWC to make a ‘road transport contractual chain order’ (CCO) that sets standards for regulated road transport contractors, road transport ‘employee like’ workers and other persons in a road transport contractual chain.
• The ability for the FWC to make a ‘road transport minimum standards order’ that sets standards for regulated road transport contractors (in a manner not dissimilar to modern awards by regulating minimum terms and conditions of engagement).
• The ability for a road transport business and an eligible union to make a ‘road transport collective agreement’, which sets out the terms and conditions on which road transport contractors covered by the agreement perform work under services contracts to the road transport business (in a manner not dissimilar to enterprise agreements for employees).
• A new jurisdiction to provide eligible road transport workers with protection from ‘unfair termination’ (in a manner not dissimilar to the unfair dismissal regime for employees). 
   

1. Preparing for applications and orders – Road transport businesses and those in a road transport contractual chain should ready themselves for the making of submissions in response to applications for road transport contractual chain orders or minimum standards orders, particularly to think about what their stance on the content of such matters might be, and then what robust controls can be put in place in order to manage compliance risks associated with their implementation if orders are made.
2. Considering collective agreements – Road transport businesses will need to familiarise themselves with the process for negotiating collective agreements and ensure that they have robust controls in place in order to manage compliance risks associated with the application of enforceable road transport collective agreements. If a collective agreement comes into operation, road transport businesses will need to ensure that they have robust procedures for determining whether contractors fall within the class of regulated workers covered by the collective agreement. 
3. Formalise termination procedures – Road transport businesses should take steps to review their standard contractual terms with regulated road transport workers to ensure their commercial prerogative is protected to the fullest extent possible. They should also put in place processes generally designed to ensure that there is a valid reason for the termination of a services contract and a regulated road transport worker is afforded procedural fairness before a decision is made to do so – much like employers do before dismissing an employee from their employment.
    

This new regime establishes the following framework for ‘employee-like’ workers:

• The ability for the FWC to make a ‘minimum standards order’ that sets standards for employee-like workers (in a manner not dissimilar to modern awards by regulating minimum terms and conditions of engagement), including an obligation to consult with parties to be covered by that order before finalising its terms.
• The ability for a digital labour platform operator to negotiate a collective agreement with an organisation that represents employee-like workers in relation to the terms and conditions that such workers are engaged on that platform (in a manner not dissimilar to enterprise agreements with employees).
• A new jurisdiction to provide eligible employee-like workers with protection from ‘unfair deactivation’ (in a manner not dissimilar to the unfair dismissal regime for employees). 
• The expansion of the general protections regime to include adverse action taken by or against digital labour platform operators, employee-like workers and/or industrial associations, as well as expanding the definition of industrial action to apply to employee-like workers. 
• A new Digital Labour Platform Consultative Committee to provide a regular means by which representatives of the Government, digital labour platform operators, workers performing digital platform work and the Minister may consult on workplace relations matters relating to digital platform work.
   

1. Preparing for applications and orders – Digital labour platform operators should ready themselves for the making of submissions in response to applications for minimum standards orders, including to think about what their stance on the content of such matters might be, and then what controls can be put in place in order to manage compliance risks associated with their implementation.
2. Considering collective agreements – Digital labour platform operators should consider the terms and conditions on which they currently engage workers, and how they can mitigate the risks of the process of negotiating a collective agreement being triggered. If such process is enlivened, digital labour platform operators will need to familiarise themselves with the process for negotiating such instruments (which could involve considerable time and resources) and ensure that they have controls in place in order to manage compliance risks associated with the application of enforceable collective agreements. 
3. Formalise termination procedures – Digital labour platform operators should take steps to review their standard contractual terms with workers to ensure their commercial prerogative is protected to the fullest extent possible. They should also put in place processes designed to ensure that there is a valid reason for the termination of a services contract and a worker is afforded procedural fairness before a decision is made– much like employers do before dismissing an employee from their employment. Such preparatory steps will also assist in mitigating potential contraventions of the general protections regime. 
    

A new regime will be introduced into the FW Act, which will divide this existing jurisdiction between the jurisdiction of the FWC and the Federal Courts. 

A person who is a party to a services contract (or an organisation that represents their industrial interests), whether they are an employee-like worker or not, provided that they earn less than the contractor high income threshold (which has been set at $175,000 per annum), will be eligible to make an application to the FWC that a services contract contains an ‘unfair term’ if that term relates to a workplace relations matter (if the parties were in an employment relationship). If satisfied that the contract contains unfair terms, the FWC may make an order setting aside all or part of the services contract or amending/varying the terms of the contract which relate to a workplace relations matter (if the parties were in an employment relationship).

The existing regime under the Independent Contractors Act 2006 (Cth) continues to operate, but only for contractors who earn above the contractor high income threshold.
 

1. Assess coverage of existing contractors – In order to understand the potential risk that may apply to any specific contractor relationship, organisations should consider whether any specific contractors earn above or below the contractor high income threshold to understand whether that contractor may have recourse to either the FWC or the Federal Courts. 
2. Consider existing contractual terms – For those organisations that engage contractors who will likely be covered by the FW Act regime, it will be important to determine whether the terms of those engagement can be considered ‘fair’ having regard to the relevant factors, and whether the organisation can take any proactive steps to mitigate the potential risks of a claim being brought. 
3. Consider template contracts – In a similar way, for any future engagements of independent contractors, organisations should carefully consider and potentially re-evaluate their template contract terms through this lens in order to reduce the risk of being subject to unfair contract applications and orders. 
    

1. Understand your union presence – Operators in these industries should develop a solid understanding of which union(s) or employee organisation(s) have rules which entitle them to represent the industrial interests of these workers. 
2. Develop internal policies and procedures – Operators should consider developing or updating internal policies and procedures so that these rights and entitlements are well understood. This is especially the case as the changes require organisations to take a variety of steps to afford workplace delegates ‘reasonable’ access to the workplace and workplace facilities. These terms are not clearly defined and, as such, there will be considerable scope for dispute over what rights must be conferred to delegates. 
3. Training and development – Organisations should consider implementing training and development for managers and people leaders so that they understand their requirements and obligations to comply with this regime.
    

• See pages 19-21 and 37 of our CL Act summary.  
• Workplace delegates' rights: what employers need to know
• InsideIR podcast: Workplace Delegates’ Rights (Vlog, Apple or Spotify)