NEW AUSTRALIAN FINANCIAL YEAR 2024-2025 AND CHANGES TO THE FAIR WORK ACT 2009 (CTH): ACTIONS FOR EMPLOYERS

Date: June 11, 2024

·         The Fair Work Commission (FWC)’s decision on minimum pay increases the national minimum wage and minimum modern award rates by 3.75%.

·         The superannuation guarantee rate is 11.5% effective from 1 July 2024.

·         Significant and numerous changes have been made to the Fair Work Act 2009 (Cth) (FW Act) in relation to various matters.  This update focusses only on a few of the recent changes to casual employment, independent contracting arrangements, a new right to disconnect and new workplace delegates’ rights.

ISSUE 1: INCREASE TO AUSTRALIAN NATIONAL MINIMUM WAGE AND MODERN AWARD RATES

The FWC’s annual wage review decision handed down on 3 June 2024 increases the national minimum wage and minimum pay rates under modern awards by 3.75%.  The weekly national minimum wage is $915.90 per week (based on a 38 hour week), or $24.10, with effect from 1 July 2024.

The increases will operate from 1 July 2024 and take effect in relation to a particular employee on the start of the employee’s first full pay period on or after 1 July 2024.

ISSUE 2: INCREASE TO MINIMUM AUSTRALIAN SUPERANNUATION CONTRIBUTIONS

Employers’ minimum superannuation contribution rates will be as follows:

  • From 1 July 2024 – 11.5%;
  • From 1 July 2025 – 12%.

ISSUE 3: CASUAL EMPLOYMENT CHANGES

Changes relating to casual employment take effect on 26 August 2024.

It is more difficult for an employer to engage a person as a casual employee.  Under the new definition, an employee is only a casual if “(a) the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work; and (b) the employee would be entitled to a casual loading or a specific rate of pay for casual employees under the terms of a fair work instrument if the employee were a casual employee, or the employee is entitled to such a loading or rate of pay under the contract of employment”.

For the purposes of assessing whether the employment relationship is, or is not, characterised by “an absence of a firm advance commitment to continuing and indefinite work”, it will be necessary to consider “the real substance, practical reality and true nature of the employment relationship” including any mutual understanding of the employer and employee beyond which is written in a contract of employment.  What happens in practice after the contract is entered into can be relevant in considering this issue.

Employers should consider their existing arrangements with casual employees and consider updating their practices and employment contracts for new casual employees.

ISSUE 4: INDEPENDENT CONTRACTOR CHANGES

A new definition in the FW Act to help determine the meaning of “employee” and “employer” take effect on 26 August 2024, which may have an impact on agreements with independent contractors.

The question of whether a person is an employee or independent contractor must be determined by “ascertaining the real substance, practical reality and true nature of the relationship between the individual and the person” and in ascertaining this, “(a) the totality of the relationship between the individual and the person must be considered; and (b) in considering the totality of the relationship between the individual and the person, regard must be had not only to the terms of the contract governing the relationship, but also to other factors relating to the totality of the relationship including, but not limited to, how the contract is performed in practice”.

A note in the legislation states that this “section was enacted as a response to the decisions of the High Court of Australia in CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2”.  This statutory change is overtly intended to extinguish the effect of recent High Court case law in relation to the distinction between employees and independent contractors.

ISSUE 5: RIGHT TO DISCONNECT

The new “right to disconnect” laws take effect on 26 August 2024 (for non-small business employers) and on 26 August 2025 for small business employers.  (A “small business employer” is one that employs fewer than 15 employees, including in any “associated entities”.)

An employee may refuse to monitor, read or respond to contact, or attempted contact, from their employer (or a third party in relation to their work) outside of the employee’s working hours unless the refusal is unreasonable.

In determining whether any refusal by an employee is unreasonable, but without limiting what other factors might also be relevant, the following must be taken into account: “(a) the reason for the contact or attempted contact; (b) how the contact or attempted contact is made and the level of disruption the contact or attempted contact causes the employee; (c) the extent to which the employee is compensated: (i) to remain available to perform work during the period in which the contact or attempted contact is made; or (ii) for working additional hours outside of the employee’s ordinary hours of work; (d) the nature of the employee’s role and the employee’s level of responsibility; (e) the employee’s personal circumstances (including family or caring responsibilities)”.

The FWC is also required to insert a right to disconnect term into all modern awards by 26 August 2024 and issue written guidelines about how the right to disconnect will operate.

Employers should consider their existing practices and consider updating their policies and contracts of employment.

ISSUE 6: WORKPLACE DELEGATES’ RIGHTS

The FWC is required to insert a workplace delegates’ rights term into all modern awards by 30 June 2024 (to take effect on 1 July 2024).  This will provide delegates with consultation and related rights in the workplace.

A workplace delegate is “a person appointed or elected, in accordance with the rules of an employee organisation, to be a delegate or representative…for members of the organisation who work in a particular enterprise”.  The workplace delegate is entitled to “represent the industrial interests of those members, and any other persons eligible to be such members, including in disputes with their employer”.

Employers should review the modern awards which cover their business and familiarise themselves with the new delegates’ rights and employer obligations.  (Note that enterprise agreements made on or after 1 July 2024 must also include a delegates’ rights term.)

CONTACT

Please contact us if your organisation requires assistance with employment law or industrial relations matters.

Whitehall Workplace Law

Level 14, 330 Collins Street, Melbourne, VIC 3000

T +61 (0)3 8605 4841

M +61 (0)428 041 272

This publication is for general reference purposes only.  It does not constitute legal advice and should not be relied upon as such.  Specific legal advice should always be obtained before taking any action based on this publication.  Liability limited by a scheme approved under professional standards legislation.

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