A new financial year in workplace law – Find out what is changing

As we step into the new financial year, there are various changes that are impacting employers in Australia. Keep reading to find out everything you need to know about the changes to the employment law landscape this financial year.

National Minimum Wage

On Monday 3 June 2024, the Fair Work Commission handed down its Annual Wage Review, announcing a 3.75% increase to minimum wages prescribed by Modern Awards. This decision increases the National Minimum Wage (NMW) to $24.10 per hour.

The NMW is the base rate of pay for ordinary hours worked by adult employees who are not covered by a modern award or enterprise agreement, and it applies to businesses who are in the national system. If your employees are covered by an applicable award or enterprise agreement, the national minimum wage does not apply to them, rather, the applicable rates are prescribed by the relevant award or enterprise agreement.

The new base rate of $24.10 is utilised to calculate and will raise the special national minimum wage. The special national minimum wage applies to employees who are apprentices/trainees, have disabilities or are under 21 years of age.

In the event that a business is a National System Employer, they have a statutory obligation to comply with the National Employment Standards and any applicable industrial instruments such as any applicably award.

Superannuation Increase

Employers must also note that on 1 July 2024 the superannuation guarantee will increase to 11.5%. This increases the superannuation contributions made by employers into superannuation funds on behalf of employees by 0.5% and is based on a percentage of an employee’s earnings.

What does this mean for employers?

Following the Closing Loopholes Amendments, where underpayments and wage theft were criminalised, employers need to be vigilant in ensuring that employee renumeration meets the new minimums. If employers fail to make the necessary adjustments, they risk underpaying their employees and as a result they leave themselves exposed to severe criminal and financial penalties. Click here for more information about the new amendments: It takes two: Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 – Chamberlains Law Firm

Employers can prepare for the wage increase in the following ways:

• Reviewing the terms of non-award covered employees and preparing for any variations that will be required, as from 1 July 2024 they will be entitled to the new NMW;
• Reviewing the terms of any awards that apply to their employees as the pay rates contained in there may increase from 1 July 2024;
• Reviewing any annualised salary agreements to ensure employees are still better off overall in light of these increases;
• If enterprise agreements apply, ensure that the base rates contained in these agreements are consistent with the new minimum rates specified in the awards.

Employers are advised to exercise due diligence and as a matter of priority, take all possible steps to ensure their payroll operations are compliant and prepared for the change.

High Income Threshold

For dismissals which occur after 1 July 2024, the threshold for high income earners has been raised to $175,000. The compensation available to be claimed has also been raised to a new limit for $87,500.

Industrial Manslaughter

From 1 July 2024, a new criminal offence for industrial manslaughter and significant penalty increases will be introduced into the Work Health and Safety Act 2011 (Cth) (WHS Act) following the Closing Loopholes Amendment.

The industrial manslaughter offence will attract the following penalties:

• A fine of $18,000,000 for a body corporate; or
• 25 years imprisonment for an individual.

The penalty increases for Category 1 offences are:

• $3 million to $15 million for a body corporate;
• $600,000 to $3 million for a person conducting a business or undertaking or an officer; and
• $300,000 to $1.5 million for any other person.

Additionally, there will be a 39.03% increase to all other penalties in the WHS Act.

Casual Employment

From 26 August 2024, casual employees will be defined differently under the Fair Work Act. The new definition will only allow employees to be deemed as casual if:

• There is no firm advance commitment to continuing and indefinite work. This will consider numerous factors including the real substance, practical reality and true nature of the employment relationship.
• They are entitled to receive a casual loading or specific casual pay rate.

These changes will not affect employees who were employed as casuals before 26 August 2024.

A new casual conversion process will also be introduced.

From 26 August 2024, employees who are employed for at least 6 months (or 12 months if employed by a small business) will be able to notify their employer of their intention to change to permanent employment. These employees may also request casual conversion if they believe they no longer meet the requirements of the new casual employee definition.

Employers must note that employees cannot request to become a permanent employee if they:

• Are currently engaged in an ongoing dispute with their employer about casual conversion: or
• In the last six months:
  • Their employer refused a previous notification
  • They have resolved a dispute with their employer about casual conversion

Employers in response to a request for casual conversion must:

• Begin consultation with the employee and inform them of the changes that will occur once becoming a permanent employee
• Respond in 21 days to the request either accepting or rejecting the change

The Casual Employment Information Statement must be provided to the following:

• All new casual employees before, or as soon as possible after the start of their employment;
• All casual employees who:
  • Are employed by non-small businesses after 6 months of employment and 12 months of employment and for every 12-month period following
  • Are employed by small businesses after 12 months of employment.

The Right to Disconnect

For all non-small business employers, the right to disconnect will come into effect on 26 August 2024. For small businesses, this will change will come into effect on 26 August 2025.

Employers must note awards will be changing as all modern awards will be required to include a ‘right to disconnect term’ by 26 August 2024.

Please see the following article to see how this change will affect your business. The Right to Disconnect… What Does it Mean? – Chamberlains Law Firm

Independent Contractor Changes

From 26 August 2024, to determine whether a worker is an employee or independent contractor, considerations must be had to:

• The real substance, practical reality, and true nature of the working relationship
• All parts of the working relationship between the parties.

Contractors will be able to apply to the FWC if they believe that their service contract contains an unfair term.

The FWC will be able to:

• determine whether a term is unfair:
• make an order to set aside, amend or vary all or part of the contract if a services contract contains one or more unfair contract terms.

The new laws will only apply where there is a ‘constitutional connection’.

Contractors earning over the “contractor high income threshold” however, will not be able to apply for an unfair contract remedy with the FWC. The contractor high income threshold has not yet been set; however, it is anticipated that it will be determined by the Fair Work Commission shortly.

Contractors can apply to a court for a review of their services contract under the rules of the Independent Contractors Act 2006 if they think the contract is harsh or unfair. This provides different pathways for review for contractors at different income levels.

A New Framework to Protect Independent Contractors who are Employee-like Workers or are in the Road Transport Industry.

From 26 August 2024 a new framework will be set up to protect independent contractors who:

• perform work on digital labour platforms (employee-like workers); or
• work in the road transport industry.

Independent contractors who perform digital platform work in the gig economy are called ‘employee-like workers’.

A contractor will only be an employee-like worker if they meet the new definition. This includes that the contractor satisfies 2 or more of the following:

• low-bargaining power in negotiations in relation to their contract;
• payment at or below the pay rate of an employee performing similar work;
• low authority over performance of work; and/or
• any other characteristic prescribed by regulations.

Independent contractors in the road transport industry who meet a set criterion are known as ‘regulated road transport contractors’.

Workplace Delegates

From 26 August 2024, workplace delegates will be afforded new rights and protections.

A workplace delegate will include a person appointed or elected under the rules of an employee organisation to represent members of the organisation who perform work:

• for a particular regulated business, or
• that has been arranged or facilitated by a particular regulated business.

Workplace delegates will be entitled to represent the industrial interests of union members, current or prospective. Workplace delegates will also be entitled to reasonable communication with regulated workers and access to workplace facilities for the purpose of representing those workers industrial interests.

Want to learn more?

At Chamberlains Law Firm we can help you navigate these changes and assist you with solving any complications arise. Additionally, Chamberlains HR offers a way for us to provide ongoing support to your business. Reach out to find out more about how Chamberlains HR can benefit your business in a meaningful way or follow the link to find out more: Do you need professional HR services? Chamberlains HR can help you.

 

This article was prepared with the assistance of Challita Tahhan*