Legislation Updates January 2024

Superannuation Entitlements Embedded in the NES

From 1 January 2024, the National Employment Standards (NES)  include a right to superannuation contributions. This means that unpaid or underpaid superannuation can be enforced under the Fair Work Act.

Employers already have an obligation to pay superannuation contributions for eligible employees under superannuation guarantee laws.

The obligation and the amount of Superannuation doesn’t change. What changes is that Fair Work now also has powers of enforcement. Employers who are meeting their Superannuation obligations have no reason to worry or change systems.  However if an employer is not meeting their obligations, this will now constitute a contravention of the NES provision.

The Australian Taxation Office (ATO) will continue to have the main responsibility for ensuring compliance with employer obligations under superannuation guarantee laws.

For further information, you can access the Department of Employment and Workplace Relations’ fact sheet Superannuation in the National Employment Standards

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Increased Flexibility for Authorised Salary Deductions

From 30 December 2023, employees will be able to authorise salary deductions made by their employer that are:

• recurring
• for amounts that vary from time to time.

This means an employee can make a single written authorisation that allows their employer to deduct amounts from their salary even where the deduction amount may vary from year to year. It can be withdrawn by the employee in writing at any time.

At the moment, a new written authorisation between an employee and employer has to be made if a deduction amount changes, so this change is a positive one in that it will potentially reduce the amount of paperwork required for employees who utilise deductions in how they receive their pay.

It is important to remember that deductions from an employee’s pay can only occur by agreement.  And even with agreement, there are limitations to when an employer can perform deductions. As a rule of thumb, deductions can be made where:

• the amount is clearly specified
• the deduction is principally for the employee’s benefit
• it is agreed to in writing

For more information you can download the Department of Employment and Workplace Relations’ fact sheet, Employee authorised deductions.

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Closing the Loopholes Act

The first round of Closing Loopholes amendments to the Fair Work Act 2009 (Cth) (FW Act) have now been passed by both houses of Parliament. These changes cover regulated labour hire, workplace delegates, criminalising wage theft and the introduction of an offence for industrial manslaughter, as well as family and domestic violence discrimination.

A second round of amendments will be considered early next year under the Closing Loopholes No.2 Bill.

A summary of the changes and the dates on which they come into effect are:

Below we will provide an overview of those that were triggered on 15^th December.  As always, if you have in depth questions on these issues, please contact the QFVG Workplace Relations support line on 07 3620 3844 or email wrteam@qfvg.com.au.

‘Same Job, Same Pay’ for Regulated Labour Hire

The Fair Work Commission (FWC) now have the power to make orders requiring employers who provide their employees to work for a third party, described as a ‘regulated host’, to pay their employees the same pay as employees of the host who do the same kind of work.

The new labour hire provisions create a right for various parties to apply to the Fair Work Commission (FWC) for a regulated labour hire arrangement order (RLHAO).

The FWC must make a RLHAO if:

• an employer supplies or will supply, either directly or indirectly, one or more employees of the employer to a host to perform work for the host;
• a ‘covered employment instrument’ (generally an enterprise agreement) that applies to the host would apply to the employees if the host employed the employees directly to perform work of that kind; and
• the host is not a small business employer.

If a RLHAO is made by the FWC, the employer cannot, subject to limited exceptions, pay its employees less than the relevant rate of pay which would apply to the employee under the host’s covered employment instrument. The rate of pay is the full rate (including bonuses, loadings, allowances, overtime and penalty rates).

While this legislation comes into effect on 15^th December, RLHAOs can take effect on or after 1 November 2024.

A host employer must give notice of the RLHAO to any employer covered by an RLHAO and must, at the request of the employer, provide information to the employer to enable the employer to determine the rate of pay to be paid.

Some exceptions apply

Employers will not need to comply with RLHAO to the extent it captures employees to whom training arrangements are in place. Employees performing work for the host for less than 3 months will also fall outside the scope of a RLHAO. This 3 month period is subject to applications to either extend or reduce it.

Service-based contractors are excluded from the RLHAO regime, however a party relying on such an exclusion would need to satisfy the FWC that the arrangement is one for the provision of a service, and not the supply of labour.

RLHAO must be fair and reasonable in the circumstances

The FWC must not make a RLHAO if it is not satisfied that it is fair and reasonable in all the circumstances to make a RLHAO. There are a variety of matters for the FWC to consider, including:

• pay arrangements;
• the nature and scope of the host’s covered employment instrument;
• the history of industrial instruments applying to the host and employer;
• the terms and nature of the arrangement under which the work will be performed (including duration of the arrangement, location where the work is being performed, number of employees performing the work, and industry where the work is being performed); and
• any other matter the FWC considers relevant.

Anti-avoidance provisions

Anti-avoidance provisions have been included centering around arrangements and schemes being entered into which preclude or restrict the FWC’s ability to make RLHAOs, including:

• An employer must not try to enliven the exemption that an RLHAO will not apply to work of less than 3 months by engaging different employees to perform the same or similar work.
• A host must not enter into such short-term arrangements where different people perform the same or substantially the same work in order to avoid the requirement of the employer to pay the required rate of pay.
• Employees should not be terminated and reengaged as independent contractor in order to avoid the provisions.

Workplace Delegates’ Rights

There are also important changes to the rights of workplace delegates (a person appointed or elected in accordance with the rules of a union to be a delegate or representative for members who work in a particular enterprise). These changes operate at the Award, enterprise agreement and individual rights level for a workplace delegate.

At the Modern Award Level …

At the Award level, the FWC will be required by 30 June 2024 to have included within all Awards a “delegate’s rights” term. These terms must ensure that a workplace delegate is entitled to:

• reasonable communication with members and persons eligible to be members in relation to their industrial interests;
• reasonable access to the workplace and workplace facilities for the purpose of representing member and potential members interests; and
• unless the business is a small business, reasonable access to paid training during normal working hours for the purpose of their role as a workplace delegate.

Whilst the availability of workplace delegates training for the purpose of dispute resolution training is a feature currently of some Awards, it is not generally a feature across the Award system. Nor are the new “delegate’s rights” concerning reasonable access to facilities and communication with members and potential members.

At the Enterprise Agreement level…

All Enterprise Agreements which commence their access period from 1 July 2024 (that is the employer has asked employees to vote on the Enterprise Agreement before that date), need to have a “delegate’s rights” clause that is at least as favourable as the clause within any Award that would otherwise apply to the employee.

If there is no term in the proposed enterprise agreement, or the term is not as favourable as any aspect of the Award clause, then the Award clause applies as a term of the Enterprise Agreement.

At an individual delegate’s rights level…

At an individual delegate’s rights level, there are new “workplace rights” under the banner of “industrial activities” defined for workplace delegates. An employer of a workplace delegate must not:

• unreasonably fail or refuse to deal with the workplace delegate;
• knowingly or recklessly make a false or misleading representation to the workplace delegate; or
• unreasonably hinder, obstruct or prevent the exercise of the rights of the workplace delegate (i.e. the right to reasonable communication, reasonable access to facilities and reasonable access to training for their role as a delegate).

Small Business redundancy exemption

Employees of small business employers (with less than 15 employees) are not generally entitled to redundancy pay.

The small business redundancy exemption is intended to remove the redundancy pay carve out for small businesses for circumstances where a larger business incrementally downsizes to become a ‘small business employer’ due to insolvency.

When a business incrementally downsizes in the lead up to liquidation or bankruptcy, the residual employees who are helping with the winding-up of the business (e.g., payroll and bookkeeping staff) historically have lost their entitlement to redundancy pay because the employer dropped to having <15 employees, thus becoming exempt from paying redundancies.  This exemption will now no longer apply in that circumstance.

Strengthening protections against discrimination for employees subjected to family and domestic violence

These changes extend existing anti-discrimination provisions within the FW Act to offer better protection for employees who have been, or continue to be, subjected to family and domestic violence (FDV), in the following ways:

• prohibit the creation and enforcement of ‘discriminatory’ terms within modern awards and enterprise agreements that discriminate against an employee on the basis of FDV or reasons relating to FDV;
• include subjection to FDV as a matter that the FWC must take into account when performing its functions or exercising powers; and
• expressly making subjection to FDV a ‘protected attribute’ (for the purposes of the FW Act’s general protections provisions), to offer more express protection for employees (and prospective employees) against adverse action (and unlawful termination) because they have, or are currently, being subjected to FDV.

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Shutdown Provisions

New shut down provisions will apply to periods of shut down this year. The list of Modern Award impacted can be viewed here.

Under the new rules:

1. Employers must give at least 28 days written notice of the temporary closure for a particular period. If an employee is hired after notice is given, the employer must give them notice as soon as reasonably possible.
2. An employee may be directed in writing to use their accrued annual leave during the shutdown period, provided that direction is reasonable.
3. If an employee hasn’t accrued sufficient annual leave to cover the shutdown period, the employer and an individual employee may agree for the employee to take leave without pay during the part of the shutdown period there is insufficient annual leave for. This agreement must be in writing. Importantly, it is no longer possible to direct employees to take leave without pay during the shutdown period.

A clause in an employment contract which provides for unpaid leave during a period of annual shutdown may satisfy the requirement for an employee’s agreement in writing. However, this point has not yet been considered by the FWC or a Court.

Employees without sufficient leave to cover the shutdown

If an employee doesn’t have enough paid annual leave to cover all of the shutdown, the employee and employer can agree in writing to other options for the days not covered such as using:

• annual leave in advance in accordance with the relevant provision in the applicable modern award
• leave without pay
• other paid time such as time off in lieu

If there is no agreement, an employer’s options are limited to:

• allowing the employee to perform work (if there is any) during the shutdown period, or,
• paying the employee for the time for which annual leave cannot be used.

The shutdown notice period can be reduced if a majority of affected employees and the employer agree.