Publication
Generative AI: A global guide to key IP considerations
Artificial intelligence (AI) raises many intellectual property (IP) issues.
Australia | Publication | 十二月 2023
This article was co-authored with Millie Jones.
As mentioned in our article when the Fair Work Legislation Amendment (Closing Loopholes Bill 2023 (Bill) was introduced to Parliament in September 2023, Australia is set for further industrial relations reform – albeit in a slimmed down manner for the moment.
The Government decided to split the Bill in two after reaching agreement with the Greens and the crossbench, enabling some of its workplace reforms to be passed on the last parliamentary sitting day of the year. The remaining elements will be considered when Parliament resumes early next year.
The amendments which were passed include:
The amendments have not yet commenced. Many of the provisions will commence shortly after the Act receives Royal Assent, but this date is not yet known.
Despite the measures which were passed being described as less contentious than the balance of the original Bill, there are significant consequences for employers who rely on a labour hire workforce. In this article, we consider in detail what the labour hire amendments could mean for your business.
In order to “close the labour hire loophole”, the Act amends the Fair Work Act 2009 (Cth) (FW Act) to introduce provisions which aim to prevent bargained rates in enterprise agreements from being undercut by the use of labour hire.
Labour hire is popular across the mining, agriculture and transport sectors – sectors in which businesses traditionally negotiate enterprise agreements with their employees to set minimum rates of pay.
However, most enterprise agreements do not apply to labour hire workers hosted by businesses, meaning they often receive lower rates of pay when compared to enterprise agreement-covered employees they work alongside.
Under the new regime, labour hire workers, unions, host businesses, and employees of host businesses, can apply to the Fair Work Commission (FWC) for a regulated labour hire arrangement order (Order) requiring that hosted labour hire employees are paid no less than what they would receive if:
While the new provisions of the FW Act dealing with the new labour hire regime will commence on the day after the Act receives Royal Assent, the FWC will only be able to make Orders effective from 1 November 2024.
Section 306E of the FW Act will provide that, upon application, the FWC may make an Order where:
Firstly, the FWC must be satisfied that the performance of the work by the hosted workers is not “for the provision of a service”, rather than the supply of labour. Broadly, this seeks to distinguish between:
Secondly, the FWC can only make an Order if it is fair and reasonable in the circumstances, having regard to any submissions made with respect to:
The Act also contains provisions dealing with the extension of Orders to cover new labour suppliers which begin supplying workers to a host business after the original Order is made, and replacement enterprise agreements.
Commencing from 1 November 2024, where an Order is in force, the supplier must pay the hosted workers at no less than the “protected rate of pay” in connection with the work being performed by the workers for the host business.
For these purposes, protected rate of pay means the full rate of pay that would be payable to the hosted worker if they were covered by the enterprise agreement of the host business.
Further, where an Order is in force, the supplier must use the protected rate of pay when calculating any termination payments which are calculated on the basis of a “full rate of pay”, such as statutory notice payments.
Host businesses are subject to obligations to provide the supplier with information about the protected rate of pay.
Exceptions may apply to the requirement to pay the protected rate of pay, including:
The FW Act will contain broad anti-avoidance provisions to stop employers from entering arrangements for the purpose of preventing the FWC making an Order or avoiding the application of an Order, including dismissing an employee and engaging them as an independent contractor. As these are civil remedy provisions, employers who engage in anti-avoidance schemes could face significant penalties.
The anti-avoidance provisions will operate retrospectively from 4 September 2023 to catch any avoidance arrangements entered into from that time.
The FWC will be able to deal with disputes concerning Orders - including in relation to the amount of a protected rate of pay, and whether a hosted worker is being paid the protected rate of pay –if the dispute cannot be resolved at the workplace level.
The FWC must deal with disputes by means other than arbitration (such as mediation) in the first instance, unless there are exceptional circumstances, but may arbitrate if the matter does not resolve.
As noted, the new labour hire provisions will commence on the day after the Act receives Royal Assent, but the FWC will only be able to make Orders effective from 1 November 2024.
Labour hire companies, and host businesses, should ensure that they are prepared to navigate the new regime well in advance of that time.
If you would like to discuss the proposed changes in more detail, including what they may mean for your organisation, please don’t hesitate to contact us.
Our next article will be released in the new year, and will consider the introduction of the criminal offence of wage theft, protection for employees experiencing family and domestic violence, and the impact of the new limits on the small business redundancy exemption.
Our Workplace Health and Safety team will also be releasing an article with respect to WHS-related aspects of the new Act.
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Artificial intelligence (AI) raises many intellectual property (IP) issues.
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