The Fair Work Legislation Amendment (Closing Loopholes No. 2) Bill 2023 (Closing Loopholes No. 2 Bill), which introduced the second tranche of significant workplace law changes, has come into force this week.

These new laws will impact government agencies covered by Fair Work and also enterprises that are engaged by NSW Government.

The key changes are:

  • personal service contractors – the legislation restores the state of the law regarding the distinction between contractors and employees to that prior to the two High Court decisions in Construction, Forestry, Maritime, Mining and Energy Union v Personnel Contracting Pty Ltd [2022] HCA and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2. Whether a personal service worker is an employee or contractor will be determined by the "real substance, practical reality and true nature of the working relationship", meaning that post-contractual conduct and the terms of the contract will be relevant. At the same time, the defence to the civil liability offence of "sham contracting" is made harder for alleged offenders, by requiring putative principals to prove their belief that the putative contractor they had engaged was in fact a contractor, was objectively reasonable. This change will commence from 26 August 2024
  • casual employment – the new legislation reflects the law prior to the Workpac decisions, whereby an employment relationship will not be a casual engagement if the practical reality of the employment relationship is one of permanent employment, resulting in the employee having the same rights as a permanent employee. A broader number of factors will be taken into account to make that assessment. There are also changes to the right to request casual conversion. These changes will commence from 26 August 2024
  • gig contractors – the FWC is now empowered to set minimum standards for 'employee-like' workers in the gig economy and in the road transport industry. The FWC has announced that it will publish a report on the implementation of its new powers. This change will commence from 26 August 2024
  • right to disconnect – employees will have the right to refuse unreasonable employment-related contact outside of work hours. Employees will have the right to apply to the FWC for an order that the employer stops unreasonable out of hours contact. The FWC has indicated that it will initiate a new case to insert this right into modern awards. This change will commence from 26 August 2024
  • unfair contracts – a jurisdiction of the FWC has been created to resolve disputes about unfair contract terms in service agreements between independent contractors who are below a high-income threshold and the principals who engage them. Contractors above the threshold will rely on the current Independent Contractors Act. This change will commence from 26 August 2024
  • enterprise bargaining – the amendments fine-tune the sweeping changes introduced last year by the Secure Jobs, Better Pay legislation to enterprise bargaining arrangements. The FWC cannot make a term in an intractable bargaining workplace determination less favourable to each employee and employee organisation, than a term in the existing enterprise agreement. The FWC will determine model terms for enterprise agreements, allowing multiple franchisees to bargain together for a single enterprise agreement and providing for single interest employer agreements to be replaced by single enterprise agreements. This change commenced from 27 February 2024

This publication does not deal with every important topic or change in law and is not intended to be relied upon as a substitute for legal or other advice that may be relevant to the reader's specific circumstances. If you have found this publication of interest and would like to know more or wish to obtain legal advice relevant to your circumstances please contact one of the named individuals listed.