Tuesday 6 August 2024

HR Perspective: Closing theLoopholes – Are you ready for26 August?
Presented by Michaela Moloney, Partner, Leila Moddel,Special Counsel and John Monroe, Special Counsel© Copyright 2024 by K&L Gates LLP. All rights reserved.

WHAT'S CHANGING ON 26 AUGUST?

Casual Employment

Right to Disconnect

Employee vs Contractor

2024

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RIGHT TO DISCONNECT

RIGHT TO DISCONNECT
New workplace right for all employees: Employees may refuse to monitor, read or respond tocontact, or attempted contact, from an employer or a third party about work outside of their working
hours unless the refusal is unreasonable.

Employer likely to bear theonus of establishing that
refusal is unreasonable.

2024

Will be added into allmodern Awards from 26
August 2024, with 12-monthdelayed commencement forsmall business.

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Dispute mechanism.

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New workplace right.

3

Right to Disconnect term in Modern Awards.

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Practical application likely toturn on whether employee
refusal is unreasonable.

4THE TEST

It does not prevent employers from attempting
to make contact with employees outside ofnormal working hours or prevent employeesfrom contacting one another, including acrosstime zones.

It does give employees the right to refuse tomonitor, read or respond to contact, orattempted contact, from an employer or thirdparty (such as a client or supplier) relating totheir work, outside of their working hours
unless their refusal is unreasonable.

New provisions will be added into Part 2-9 of the Fair Work Act and will be effective on 26 August 2024
(26 August 2025 for small business employees).

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5WHEN WILL AN EMPLOYEE’S REFUSAL BE
UNREASONABLE?
Whether an employee’s refusal to respond to contact is unreasonable will depend on thecircumstances and will be considered with reference to the following factors:

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The reason for theattempted contact.

How the contact orattempted contact ismade and the levelof disruption it
causes theemployee.

The extent that theemployee iscompensated forremaining available
during the period that
contact is made orattempted.

The extent that theemployee iscompensated forworking additional
hours outside of theemployee’s ordinary
working hours.

The nature of theemployee’s role.

The employee’s levelof responsibility.

The employee’spersonalcircumstances(including caring andfamily
responsibilities).

Other factors such as
patterns ofbehaviour.

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DISPUTE RESOLUTION
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Attempt to resolve at workplace level
Apply to Fair Work Commission to make an order or to otherwise deal with the dispute

The Commission may resolve the dispute through mediation, conciliation, making a recommendation
or expressing an opinion. If both parties agree, the Commission may arbitrate.
The Commission may make an order to:▪

Prevent employees from continuing to unreasonably refuse▪

Prevent employers from taking disciplinary actions against an employee for exercising right todisconnect

▪

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Prevent employers from continuing to require the employee to monitor, read or respond to contact

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WORKPLACE RIGHT AND ADVERSEACTIONNew
workplaceright

Employee’s right todisconnect is aworkplace right for thepurposes of the Fair
Work Act

Implications

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This means that
employers areprohibited from taking
adverse action against
an employee (e.g.,dismissal or demotion)
because they exercise
or propose to exercise
this right8DRAFT MODERN AWARD RIGHT TODISCONNECT CLAUSE▪

▪

Unless it is unreasonable to do so, anemployee may refuse to monitor, read or
respond to contact or attempted contact from:▪ Their employer outside of theemployee’s working hours; or▪ A third party if the contact or attempted
contact relates to, their work and isoutside of the employee's workinghours.
An employer must not prevent an employee
from exercising their right to disconnect underthe Act

Exceptions:
Employee is paid astand-downallowance.

The contact is to
notify an employee
they are to attendwork.

Contact aligns withusual
arrangements for
notifications.

Contact is for an
emergency rosterchange.

Contact is forrecall to work.

2024

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9PRACTICAL CONSIDERATIONSCommunicate
with employees
about what is
expected interms of out ofhours work.

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Include any outof hours
expectations inposition
descriptions andemploymentcontracts.

The Commission
will issue
guidelines once
modern award
term finalised.

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Employers
should set
expectations
clearly including
via training /policies.

Does not limit
employers fromcontactingemployees (butwatch this space
for awardemployees).

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CASUALSNEW DEFINITION OF ‘CASUAL’
New definition for casual employees: the definition of casual employment focusses on the totality ofthe employment relationship.

Casual employment will
now consider the totality ofthe employmentrelationship.

2024

This is a departure from theprevious assessment ofcasual employment, which
focused on the terms of theemployment contract.

These provisionscommence on 26 August2024.

1

New framework requires (one) an absence of a ‘firm advance commitment to continuing andindefinite work’ & (two) the employee is paid a casual loading or a specific rate of pay forcasual employees.

2‘Firm advance commitment’ is assessed based on a number of factors, including: the real
substance & practical reality of the relationship, the contract of employment, an ability to offer
and refuse work, patterns of work and future availability of work.

3

Practitioners will be familiar with this approach. This is a return to the broader test for casual
employment, which was narrowed following the High Court decision in WorkPac v Rossato[2021] HCA 23.
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CHANGES TO CASUAL CONVERSION
New workplace right for all employees: Casual employees may now give an employer written
notification if they would like to change their employment status to full-time or part-time employment
after six months' employment (12 months for small businesses).
The existing casualconversion provisions arebeing replaced with asimilar, but separate,"employee choice"framework.

12024

This will replace the existing
regime where thepredominant onus is on theemployer to offer
conversion to qualifying
employees.

These provisionscommence on 26 August2024.

Employers will be required to respond to written notifications from casual employees within 21 days
after the notification is given to the employer.

2

The employer may not accept the employee notification if the employee does not qualify forconversion; there are fair and reasonable operational grounds for not accepting the request; or, it
may result in non-compliance with a Government recruitment or selection process or an award /EBA.

3

Disputes regarding conversion are intended to be resolved at the workplace level. However, theFWC has powers to resolve the dispute if necessary.
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NEW DEFINITION OF ‘CASUAL’
An employee is only a casual if:▪ The employment relationship is characterised by an absence of a firm advanced commitment tocontinuing and indefinite work
▪ The employee is entitled to a casual loading
Must be assessed on:▪ Real substance, practical reality and true nature▪ Not limited to looking at contract can include mutual understanding or expectation

2024

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14ABSENCE OF A FIRM ADVANCECOMMITMENT?
Consider:▪ Whether there is an inability of the employer to elect to offer or not offer work or an inability of theemployment to elect to accept of reject work
▪ Whether there will be future availability of continuing work
▪ Whether full time or part time employees are performing the same work
▪ Whether there is a regular pattern of work for the employee (can be regular even if not absolutely
uniform and includes fluctuation and variation over time)2024

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CASUAL CONVERSION FROM 26 AUGUST
2024Employee ChoiceCasual employees will be able to give the employer written notification of their intention tochange their employment status to full-time or part-time employment if:a)They have been employed for at least six months (12 months for small business employers);
andb)

They believe they no longer meet the requirements of the new casual employee definition.

Note: A casual employee cannot notify their employer if:(a) they are currently engaged in a dispute about casual conversion; or(b) in the last six months the employer has refused a previous notification or has resolved adispute with the employee about casual conversion.

2024

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CHANGES FROM 26 AUGUST 2024
Employer Response
The employer must formally consult with the employee and give a written response within
21 days as to whether it accepts the notification.

The written response must include:

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▪

Whether the employment will be full-time or part-time▪

What the hours of work will be▪

The day the change to permanent employment will take effectklgates.com

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IF THE EMPLOYER DOES NOT ACCEPT
If the employer does not accept the notification, it must be on one of the following grounds

2024

i.

The employee still meets the definition of a casual;ii.

Accepting the notification would result in the employer not complying with a recruitment or
selection process required by law; oriii.

There are fair and reasonable grounds for not granting conversion, including that:a)

Substantial changes would be required to the way the employer’s work is organised;b)

There would be significant impacts on the employer’s operations;c)Substantial changes to the employee’s employment conditions
would be necessary so that the employer does not contravene an award or enterpriseagreement.

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WHAT THIS MEANS FOR EMPLOYERS
An employer’s current obligations to offer casual conversion will continue to apply to employment
relationships entered into before 26 August 2024, for a period of six months from that date.

An employer must ensure that its written contracts of employment for casual employees conformwith these new changes and specify that:- Casual employment is being offered- There is no firm advanced commitment to continuing and indefinite work
- There is a specific casual loading such as 25%

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CONTRACTORSEMPLOYMENT V CONTRACTING
New distinction between ‘employee’ and ‘contractor’:Involves an assessment of
the real substance, practicalreality and true nature of therelationship between theparties.

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2024

This amendment unwinds
previous decisions which
held that primacy was to begiven to contractual terms,
as opposed to thebehaviour of the parties.

Commence on 26 August2024.

To make an assessment concerning the real substance, practical reality and true nature of therelationship, consider: degree of control, remuneration (loading, invoices, tax etc) and hours ofwork.

A return to the common law multi-factorial test as exemplified in Hollis v Vabu [2001] HCA 44and Stevens v Bodribb Sawmilling Co Pty Ltd (1986) 160 CLR 16.

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EMPLOYMENT V CONTRACTING CONT.
Opt-out provisions:▪ Contractor high income threshold▪ Not yet available
Other impacts:▪ Not intended to interfere with definition of ‘contractor’ in tax, superannuation and workers’
compensation context
Minimum Standards:▪ Performing work on digital labour platforms▪ Road Transport Industry

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SHAM ARRANGEMENTS & UNFAIRCONTRACTS
New employer/contractor protections: a new defence for employers against sham contracting
claims and provides contractors a means to fight unfair contract terms as well.

The sham contracting
defence applies if
it’s reasonably believed thecontract of employment wasa contract for services.

2024

A new framework forindependent contractors toset aside perceived unfair
contract terms in service
contracts has been
introduced.

These provisionscommence on 27 Feb and26 August respectively.

1

In determining whether an employer's belief was reasonable, regard will be had to the size andnature of the enterprise and any other related matters.

2

Unfair contracts, or their terms will be determined through a broad multi-factor test (e.g.
bargaining power, interests, harsh unjust and unreasonable).

3

When dealing with these disputes, the FWC may choose to either conduct a private
conference to deal with the matter or proceed to hearing.
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SHAM CONTRACTING
Sham contracting is misrepresenting an employment arrangement as an independent contractor
arrangement:

Reckless civil breaches ofprescribed provisions may betreated as serious
contraventions, with increased
maximum penalties.

Employers need to show theyreasonably believed the contract
was for services.

2024

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QUESTIONS?

PRESENTERS
Michaela Moloney
Partner, Melbourne+61 3 9640 4430
Michaela.Moloney@klgates.com

Leila Moddel
Special Counsel, Sydney+61 2 9513 2321
Leila.Moddel@klgates.com

John Monroe
Special Counsel, Melbourne+61 3 9205 2141
John.Monroe@klgates.com

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