New draft legislation aims to close employment loopholes

At a glance

• The Fair Work Legislation Amendment (Closing Loopholes) Bill (Bill) was introduced in parliament on 4 September 2023. The 278 paged Bill aims to close the loopholes which some businesses are using to undermine pay and working conditions.

The Bill is currently at a very early stage and is subject to parliamentary debate. The House of Representatives has four weeks to debate the legislation. The proposed reforms may therefore change and / or fall during the legislative process.

A summary of the key changes:

• A proposed definition of a casual employee, which is based on the reality of a working relationship.
• The creation of an employee-like category for digital platform gig workers.
• The Fair Work Commission (FWC) to be given the power to set minimum standards for gig workers, including a minimum wage.
• The FWC to provide gig workers with protection from ‘deactivation’ – the FWC would have the power to step in if a gig worker is ‘deactivated'.
• Independent contractors to have the opportunity to bring a claim with the FWC.
• FWC to be given the power to make sure labour hire workers are paid the same as directly employed employees.
• Wage theft to become a federal crime and civil fines to be increased.
  • The maximum fine for knowingly committing wage theft to increase to AUD8million or three times the underpayment where this amount would exceed AUD8million.
  • Potential sanction of up to ten years' imprisonment.
  • The Fair Work Ombudsman, as the enforcement body, to introduce compliance notices and to have a discretion to not proceed with criminal charges where an employer complies.
• Industrial manslaughter to be criminalised.
  • Individuals could face imprisonment for up to 25 years and, body corporates, fines of up to AUD18million.
  • Where an offence involves reckless or criminally negligent beaches of health and safety duties, the fines would increase to AUD15million and maximum imprisonment would rise to 15 years.
• Increased ability of unions to go into the workplace to inspect for breaches, without the need for prior notice.
• A paid leave requirement for union representatives (in non-small businesses) to allow them to attend union training sessions.