The Fair Work Legislation Amendment (Closing Loopholes) Bill 2023, which sought to make significant changes to Australia’s employment and workplace relations laws, was ultimately split into two parts:

1. Part 1 is now reflected in the Fair Work Legislation Amendment (Closing Loopholes) Act 2023; and
2. Part 2, which was tabled for further discussion in 2024, was passed by both houses on 12 February 2024.[1]

Below is a snapshot of how Part 1 and Part 2 will affect Australia’s employment and workplace relations laws.

Closing loopholes part 1

Part 1, which was introduced in December 2023, rolls out various changes to the Fair Work Act between December 2023 and January 2025, including:

1. amending the small business redundancy exemption to confirm the exemption not to pay redundancy does not apply to an employer who downsizes (effectively, falling within the definition of a small business) due to insolvency;
2. new ‘same job, same pay’ provisions for labour hire workers allowing the Fair Work Commission to order that an employee under a labour hire agreement be paid no less than that employee would be paid under the employer’s enterprise agreement (or other relevant workplace instrument);
3. new workplace delegates rights and protections including the right to represent the industrial interests of union members;
4. criminalisation of wage and superannuation theft commencing January 2025;
5. strengthening discrimination protections allowing greater protection for employees experiencing family and domestic violence; and
6. changes to workplace health and safety and workers compensation including introducing a new criminal offence for industrial manslaughter and significantly increasing penalties for other offences.

Closing loopholes part 2

Part 2 is contained in the Fair Work Legislation Amendment (Closing Loopholes No. 2) Bill 2023 (Part 2 Bill).

The bill includes the following changes:

1. amending the definition of employee to clarify that post-contractual conduct will be relevant in determining whether an individual is an ’employee’ for the purpose of the Fair Work Act (which is a position inconsistent with two recent High Court decisions on this point);[2]
2. changes to casual employment confirming that 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 rights as a permanent employee;
3. new right to disconnect allowing employees to refuse the unreasonable employment-related contact out of office hours including the right for the employee to apply to the Fair Work Commission for an order to stop the employer from contacting the employee; and
4. allowing contractors to dispute unfair contracts to the Fair Work Commission which will have informal jurisdiction to resolve disputes about unfair contract terms in service agreements involving independent contractors who are below the high-income threshold.

These changes will impact Australian employers and employees. If you would like to discuss the changes in more detail or seek clarification on how they may impact you, please contact commercial Partner, Antony Harrison or Associate, Sabrina Austin.

[1] Fair Work Legislation Amendment (Closing Loopholes No. 2) Bill 2023.

[2] Construction, Forestry, Maritime, Mining and Energy Union & Anor v Personnel Contracting Pty Ltd [2022] HCA 1; ZG Operations Australia Pty Ltd & Anor v Jamsek & Ors [2022] HCA 2.

Written by Sabrina Austin

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