Alert: The New ‘Closing the Loopholes’ Legislation Has Been Passed

Late last year, the new Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 was enacted. The legislation continues the Federal Government’s ongoing reform of the Australian workplace relations system, and introduces a number of significant changes of which employers should be aware.

The New Laws

The key changes introduced by the new legislation are as follows:

• Union Delegates: A union delegate is a person elected or appointed under the rules of a union to be a delegate or representative for members of the union who work at a particular enterprise. The new laws expressly provide that union delegates are entitled to represent the industrial interests of any union members and any other persons eligible to be a member of the union who work at the enterprise. The delegate is entitled to reasonable communication with those persons in relation to their industrial interests and, for the purpose of representing those interests, reasonable access to the workplace as well as reasonable access to paid time, during normal working hours, for the purposes of related training. Employers are prohibited from unreasonably failing or refusing to deal with a delegate, making a false or misleading representation to a delegate, and hindering or preventing a delegate from exercising their rights. From 1 July 2024, a term that provides for the exercise of the rights of union delegates is to be included in all modern awards and new enterprise agreements.
• “Same Work, Same Pay” Orders for Labour Hire Workers: Applications can now be made to the Fair Work Commission for labour hire workers to be paid at the same rate of pay as that prescribed by an enterprise agreement that applies to the employees of the “host” employer. This does not apply if the host employer is a small business employer under the Fair Work Act, and to labour hire employees performing work for a host for 3 months or less (with some exceptions).
• Wage Theft: The underpayment of wages by employers will become a criminal offence. Employers will be exposed to a maximum penalty equal to 3 times the total amount of the underpayment or $7.825 million, whichever is greater. These laws will not commence before 1 January 2025.

Implications for Employers

The upcoming criminalisation of the underpayment of employees is yet another compelling reason why employers need to remain vigilant to ensure they are meeting their minimum pay obligations. Further, employers with workers who are union members will need to ensure they comply with their new obligations towards union delegates. While employers that engage labour hire workers should understand the exposure to a potential “same work, same pay” order in relation to those workers.