The latest Closing Loopholes changes to workplace laws – casual employment and the right to disconnect

As of 26 August 2024, the latest tranche of significant changes to workplace laws under the Fair Work Act 2009 (Cth) (FW Act) are set to commence as part of the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024 (Cth) (the Closing Loopholes No 2 Act). These changes continue the workplace law shake up that the Closing Loopholes No 2 Act has brought. We have outlined below some aspects of the latest tranche that employers should be aware of when managing their workforce.

The next tranche of changes

The changes commencing on 26 August 2024 include (but are not limited to):

• changes to the definition of casual employee and the pathway to full-time and part-time employment for casual employees;
• the introduction of the ‘right to disconnect’ to non-small businesses (commencing on 26 August 2025 for small businesses); and
• changes to the intervals and requirements to provide the Casual Employment Information Statement.

Additionally, several changes which may commence on 26 August 2024 (or a date to be proclaimed), include reforms to:

• provisions for ‘employee-like’ workers and the road transport industry;
• collective agreements for regulated workers;
• the determination of whether a relationship constitutes employment; and  
• the resolution of independent contractor ‘unfair contract’ disputes.

Casual Employment Redefined

Part 1 of Schedule 1 to the Closing Loopholes No. 2 Act repeals and replaces section 15A of the FW Act, introducing a new definition of ‘casual employee’. The new definition shifts the focus back to the reality of the employment relationship, rather than strictly relying on the terms of the written employment contract. Under this new definition, an employee is only casual if there is not a firm advance commitment to continuing and indefinite work (taking into account the practical reality of the employment relationship amongst other factors) and they are entitled to receive a casual loading, or a specific casual pay rate.

Incorrectly classifying an employee and relying on the old definition of causal employment  may result in underpaymentsand/or pecuniary penalties against the employer.

Employee choice pathway to full-time and part-time employment

The current casual conversion arrangements will be abolished, and employers will no longer be required to make casual conversion offers to employees. Instead, employees who have worked for at least six months (12 months if employed by a small business employer) may choose to notify their employer in writing if they believe they no longer meet the new definition of a casual employee.

Employers must consult with the employee about their notification and what arrangements will change if the notification is accepted and conversion occurs to part-time or full-time. The employer must provide a written response to the employee within 21 days after receiving the notification. The Fair Work Commission will have jurisdiction to hear any disputes regarding casual conversion.

Right to Disconnect

Section 333M of the FW Act will contain a new ‘right to disconnect’ for employees. This right will allow employees to refuse to engage in work-related communications outside of their regular working hours, unless that refusal is unreasonable. Several factors must be considered when determining whether an employee’s refusal is unreasonable including the employee’s role and responsibility, the reason for the afterhours contact and their pay. The FairWork Commission will have jurisdiction to hear any disputes regarding right to disconnect, where they cannot be resolved at a local level.

Causal Employment Information Statement

The Causal Employment Information Statement (CEIS) is a document with information about employment conditions that an employer must provide to all new casual employees. From 26 August 2024, employers will also need to provide the CEIS to casual employees at the following intervals:

• when employed by non-small businesses, as soon as possible after 6 months of employment, 12 months of employment and every subsequent 12 month period thereafter; and
• when employed by small businesses, as soon as possible after 12 months of employment.

What should employers do?

We recommend that employers:

• Review their casual workforce to identify if the working arrangements of their employees (in practice) are consistent with the new casual employee definition.
• Review their casual conversion procedures to identify whether they will comply with the new conversion laws.
• Review their employment contracts considering the right to disconnect, whether an employee will be required to be contactable afterhours and the factors for determining whether a refusal is reasonable.
• Diarise new obligations to provide casual employees with a CEIS at the required intervals.

Conclusion

As these changes commence it is essential that employers stay informed in order to adapt to the evolving regulatory landscape. Pragma is hosting a seminar on Wednesday, 3 July with Ian Neil SC to discuss these significant changes and what it means for employers. If you are interested in attending this seminar, please contact events@pragma.law.

If you require assistance in relation to any of the information provided above, Pragma’s Employment lawyers can provide advice to you and your business to minimise your future risk. Contact us today by clicking here or call us on (08) 6188 3340.