What Is The Fair Work Legislation Amendment (Closing Loopholes) Act 2023? (2024 UPDATE)

Written by

Raja Abbas

The Fair Work Act 2009 (Clth) is the key legislation that governs all aspects of employment in Australia. The Act regulates all employers and employees who work in Australia, alongside how businesses interact with those who are employed by them. The Act also deals with issues of compliance and non compliance and establishes administrative bodies such as the Fair Work Commission (FWC) and the Fair Work Ombudsman (FWO)

In response to issues of non compliance and the need to strengthen protection of employees, the Fair Work Legislation Amendment (Closing Loopholes) 2023 Act was introduced late 2023 and has commenced changes already in early 2024. This article will explore everything you need to know in relation to these changes and how it will impact you, your employees or your business. 

What Is The Fair Work Act?

The Fair Work Act 2009 (Clth) is a central piece of legislation that governs all aspects of employment in Australia. The act establishes the legal framework businesses, employers and employees must follow when working. These include the National Employment Standards (NES), equal pay and flexible working arrangements. The Act also governs discrimination in the workplace alongside the remedies that should be implemented. 

The workplace is constantly changing due to the evolving values, technology and demographics that exist within the workplace. In response, there has been legal reform which has already begun taking place this year. 

What Is The Closing Loopholes Act?

The Fair Work Legislation Amendment (Closing Loopholes) Act 2023 aims to eradicate the legal loopholes that exist within the workplace which have increased issues of non compliance alongside amending fundamental aspects of fair employment practices.

Below are key following measures the Closing Loopholes will reform:

Criminalising Underpayments

The amendment in question aims to address the issue of intentional wage theft, which occurs when individuals or businesses deliberately underpay their employees in violation of labor laws. 

This can take various forms, such as not paying the minimum wage, denying overtime pay, misclassifying workers as independent contractors to avoid paying benefits, or engaging in other deceptive practices to withhold rightful wages from employees. 

Penalties for Intentional Wage Theft: The primary goal of the amendment is to deter intentional wage theft by imposing significant penalties on those who engage in such practices. It does so by prescribing a maximum penalty of 10 years imprisonment or substantial fines. 

Monetary Penalties: The amendment establishes a financial penalty structure for individuals and corporations found guilty of intentional wage theft. This structure is designed to be punitive and proportionate to the amount of underpayment. Specifically, it stipulates that those responsible for intentional wage theft could face a fine ranging from three times the amount of underpayment.

Differing Penalties for Individuals and Corporations: The amendment distinguishes between penalties for individuals and corporations. For individuals involved in intentional wage theft, the maximum fine is set at $1.5 million, while corporations may face a maximum fine of $7.8 million. 

This differentiation acknowledges that corporations often have larger financial resources and potentially greater impacts on employees, and thus, their penalties are set at a higher level to serve as a stronger deterrent.

Regulated Labour Hire Arrangement Orders

The Closing Loopholes Amendment includes changes to labour hire arrangements and the pay workers must receive when working under labour hire arrangement orders. Labour hire agreements are contracts made between a labour hire agency and a company which outlines the terms and conditions of the employment in which the company is going to hire. The amendment dictates that labour hire employees must be paid at least what they would receive under a host’s enterprise agreement or equivalent public sector determination. This means labour hire employees will be entitled to a payment which they would receive under the host’s enterprise agreements. 

Stronger Discrimination Protections

The Closing Loopholes Amendment will modify the Fair Work Act to include victims of family or domestic violence to the list of protected attributes. This means the Act’s anti-discrimination framework will include employees who have been subjected to family or domestic violence and complement the Australian Government’s introduction of 10 days of paid family and domestic violence leave within the Act. 

Small Business Redundancy Payments & Insolvency

The amendment will address the existing anomaly for small businesses undergoing liquidation or are bankrupt to provide employees with redundancy payments. This change means that employees will no longer be disadvantaged if they are made redundant later than other employees during the insolvency process. 

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Modifications to Work Health and Safety & Workers Compensation

The Fair Work Legislation Amendment (Closing Loopholes) 2023 Act will also include changes to work health and safety alongside workers compensation. 

These changes include:

  • Expanding the application of the Asbestos Safety and Eradication Agency Act 2013 to encompass silica. This means the agency will be renamed, alongside providing mechanisms to eliminate silica-related diseases and regulating silica within the workforce.
  • An introduction of presumptive liability provisions within the Safety, Rehabilitation and Compensation Act 1988. This change will mean that a first responder who is diagnosed with PTSD will not need to demonstrate that their employment significantly contributed to their condition whilst filing a workers’ compensation claim. 
  • Introducing a new guide in relation to arranging, assessing and requiring rehabilitation examinations to be prepared and conducted by Comcare. This guide states the steps and procedures that should be followed.

Conclusion

In conclusion, the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 represents a significant step towards strengthening employment protection laws and eradicating unfair practices within the Australian workplace. These changes address issues of intentional wage theft, regulate labor hire arrangements, enhance discrimination protections, and provide much-needed support for employees in small businesses facing insolvency. Furthermore, the modifications to work health and safety, including the expansion of regulations to cover silica-related diseases, demonstrate a commitment to the well-being of workers. Overall, these reforms reflect a commitment to fair employment practices, aligning with the evolving needs and values of the modern workplace. Employers, employees, and businesses alike should be aware of these changes and their implications for the Australian labor landscape.

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