Work Wonders
Back in late 2021, we decided that instead of chatting to each other about the challenges and triumphs of people management in small businesses, we should invite you to join the conversation. And the Work Wonders podcast was born! Managing people is serious business. We bring you all the latest, practical advice without the pain. The podcast is brought to you by Aster HR https://www.asterhr.com.au/ and your hosts are Angela Gauci and Susan Rochester
Work Wonders
S5 Ep 2: What you need to know about the 'Closing Loopholes' Bill
The Closing Loopholes Bill is another change in employment legislation in Australia.
In this episode, we discuss what you need to know.
* What has changed
* What exceptions apply
* What this means for your business
You can find the show notes for this episode here
Would you like to submit a question to the show? Let us know on our website or via LinkedIn.
Brought to you by Aster HR, the Work Wonders Podcast is hosted by Angela Gauci & Susan Rochester and is recorded at Launch Pad at Western Sydney University.
All information or advice included in this podcast is general, has been developed as a starting point for your business, and should be tailored to your specific requirements. It should not be considered legal advice. We have made every attempt to ensure the accuracy and currency of this information at the time of recording. However, references to things like employment laws are subject to change. For specific advice relating to your business, please get in touch with us.
Welcome to the WorkWonders podcast brought to you by AsterHR, where we simplify the human side of business.
Speaker 2:I'm Angela and I'm Susan. Let's dive into today's episode and find out what you've been wondering about.
Speaker 1:In today's episode, we're going to talk about something that's been getting a lot of attention in the media the new bills that have been passed and are coming into play throughout, or phased in throughout the rest of this year the closing loopholes bill and also the right to disconnect. There's a lot to unpack here, but we'll keep it interesting and relevant for you, so let's dive in. This is the WorkWonders podcast. Hi Susan, hi Angela. So there's been lots of talk around more legislation change.
Speaker 2:Yeah, it's feeling like this is always going to be a topic on our podcast, isn't it I?
Speaker 1:think so, and I think fair work are getting into a pattern now of producing these lovely PDFs and timelines for us of when things will be phased in.
Speaker 2:The great thing is the feedback we're getting from listeners is they like our simplification of things. We like to keep it simple for us, so hopefully we can make it easier for you to understand what you need to pay attention to and what's maybe not as important.
Speaker 1:Yeah, well, certainly the media has grabbed hold of the right to disconnect, one that's soon to be coming in, but we're still waiting on.
Speaker 2:Well, it's passed, but it won't come into play until July.
Speaker 1:That's right, yes, july.
Speaker 2:So I think that's really topical because, well, it's been all over the media and people saying, oh you know, the country's going to collapse.
Speaker 1:I wonder how many people share our view that it's kind of all nonsense, that we surely don't need a law to be responsible in a common sense.
Speaker 2:Yeah, it does really make me wonder about where society is headed, if we've got to tell people that they have the right to not respond to emails outside of working hours or answer the phone or respond to an SMS.
Speaker 1:And that's what it is, isn't it so the right to ignore your boss if they email you or Teams message you or send you a text or a phone call outside of your normal business hours, and the E-Camp have reprimand of that. So if they come in the next day and say why didn't you answer me?
Speaker 2:Yeah, there should be no negative consequences for doing that, and it also extends to third parties, so the employee has a choice whether or not to respond to a supplier or a customer or in the cases of, say, school teachers to parents, students.
Speaker 2:So there's a lot of interesting areas of things that we might have assumed always happen or can happen, but the test is going to be whether they're reasonable or not. But before we go on to what's reasonable and what's unreasonable, it was interesting that Ari did a survey last year and they found that 40% of their respondents CEOs from over 600 companies. I think it was said that they already have something like that.
Speaker 1:Yeah, and I'd like to think that I think majority of people don't treat their employees with disrespect, because I think we all deserve the right to go home and have a rest.
Speaker 2:Interestingly, though, as the legislation was getting to finally being passed, there were some late amendments, and one of those was excluding small businesses.
Speaker 1:Right. So small businesses is anyone with 14 employees or fewer. I believe so, so it doesn't include them.
Speaker 2:No, so you can ring me anytime, angela.
Speaker 1:Well, I won't. That's good, because I wasn't going to answer Well, see, that's what you could do as a small business owner, couldn't you? You could still adopt the same principles and interests of looking after your employees.
Speaker 2:Yeah, I know what you mean. There's no penalties for employers for trying to contact okay. It's only that an employee can refuse to respond without any backlash on them.
Speaker 1:Right, okay, so there must be cases where it's okay for an employer to do it and it would be unreasonable for an employee to refuse that.
Speaker 2:Exactly though unreasonable refusal to respond.
Speaker 1:So we love that word reasonable in employment law, don't we?
Speaker 2:Yes, what would the reasonable person consider?
Speaker 1:reasonable.
Speaker 2:So things like what was the reason? There should be another word for that what was the intention behind the contact or attempted contact? What sort of? How was that contact made? You know, whether it was reasonable to send a text rather than make a phone call under the situation, in that situation, in terms of the disruption to the person's life.
Speaker 1:Yeah, okay.
Speaker 2:Whether there's actually compensation for the employee. So we were chatting earlier, angela, about someone who's on call. Well, obviously they're compensated via a non-call allowance, so it would be unreasonable for them to not take a call. Likewise, if someone's part of a global team, the expectation would be that they might be available outside hours to attend online meetings, different time zones yeah, exactly. And then there's things like the employee's personal circumstances and what's reasonable from the aspects of their caring responsibility and things like that.
Speaker 1:It's really common sense, isn't it? I think, if you, I know I look.
Speaker 2:most of what we talk about is common sense, but we live in an era era, I'm sorry, an era of regulation, where but if you're having those conversations with your employees and you have a spirit of, you know, sharing and being really intentional in your communications and being fair and you're going to hopefully have that trust with your employee and they're going to give that back to you.
Speaker 1:It should open up the place for it just to work really.
Speaker 2:Well, you'd hope so.
Speaker 1:Yeah.
Speaker 2:And really a lot of those things which it's been going through. About what's reasonable and what's not. We're not really going to know until that's tested in the courts.
Speaker 1:That's true.
Speaker 2:You'd like to think it doesn't get to that point and there'll be someone.
Speaker 1:And then look with people working remotely and things like that and certainly the aftermath of COVID. People do work different hours and you know, I've heard it said that people go. Oh well, I might email you at this time of night, because that's when I'm working, but I don't expect you to respond, you know. I know that's certainly how we work as well.
Speaker 2:I know exactly, because I am not going to reply at the time. You're working at night time.
Speaker 1:You know, if you have that communication, that's a way around, isn't it? Well, exactly, we know what the expectations are.
Speaker 2:And likewise you see people who have you know on their signature what days they work, or making that clear and open. Yeah, so that was the right to disconnect. The other thing we wanted to cover in this episode, and which is also being getting some airtime, is the closing loopholes legislation.
Speaker 1:Yeah, the other half of that. So yeah, closing loopholes Another big set of things to go through. Look, I think let's keep it relevant to what we think would be most likely for our listeners to be aware of and to do things about.
Speaker 2:Yeah, sure, so that means that there's a few things in the legislation that we're not going to touch on today. So there are things around the right of entry for unions. What else was there?
Speaker 1:Compulsory conciliation when there's industrial action, protections for union delegates in the workplace as well.
Speaker 2:I think that was basically it. So if you would like to know more about any of those, are we not sure? Please don't hesitate to ask.
Speaker 1:Yeah, and we'll make sure to put a link in our show notes of the information that's been published by Fair Work Commission so that can go through all of it if you choose to go through that.
Speaker 2:If you like detail go for your life.
Speaker 1:For now, let's start with things that have already come in. So 15th of December 2023. There were a couple of things that came in. Let's start with labour hire workers. So the right for them to earn the same amount of pay as an employee or a traditional employee would.
Speaker 2:Yeah, so there's going to be a thing called an order, which fair work can make.
Speaker 1:Yes, they can, and that they'll have the rights to start doing that from the 1st of November this year.
Speaker 2:just to complicate things, okay so you're supposed to be doing the right thing from December last year, but we'll give you two November issue orders.
Speaker 1:Similar to what they did last year. They give you some time to get used to it.
Speaker 2:So basically, under the labour hire changes, the rules for labour hire workers, as you said, it means that labour hire workers should be paid the same as employees in the same job.
Speaker 1:I guess we should define what we mean by labour hire worker system. A labour hire worker is someone that's actually employed by someone else. They're employed by a labour hire agency, or they might be called an employment agency or staffing agency. They sort of more or less rent the employee out to you and you can work with them and whatever you ask them to do but the contract of employment is actually with that labour hire agency, not yourself.
Speaker 1:So that's the difference there. There's no contract of employment between you and that individual that's there working the labour hire worker, as with the other person, and they're paid by that labour hire agency.
Speaker 2:So under the new rules, employees, unions and even the host employers can actually apply to the commission for these orders that we're talking about relating to labour hire employees. And when an order's made a labour hire employer, so the person who is employing must make sure that when they're supplying those employees to a host employer so we've got two different employers it's easier if we just say the host isn't it? The host company then those employees must be paid the same rate as they'd receive if they were employed directly by the host.
Speaker 1:Right, okay. So if you were the labour hire agency and I'm the employer, susan, you're going to send me someone to work for me? Yep, but you're paying them, I'm paying them. And if the fair work order says, oh, susan, you're not paying them the right amount, they're entitled to get the same amount as if I cut you out of the picture and employed them myself.
Speaker 2:Exactly so. If someone doing the same work is working under an above-award rate in your business as the host, then I should be paying the same rate as the labour hire company. Likewise, if you've got an enterprise agreement and it's above whatever conditions might be the basic conditions that I'd like to pay, obviously because I'd like to make more money out of my labour, hire employees, then that's just not on anymore.
Speaker 1:Okay, so it's about equal pay Same word same pay. Well, under the theme of pay, the other big thing that's probably got a lot of attention as well is criminalising underpayment underpayment of wages, which, very importantly, also includes superannuation. Yes, so we're talking here about if you intentionally underpay your employees, it's now a criminal offence.
Speaker 2:I think it's the intentional part that makes a difference. At the moment, what we've noticed is a lot of smaller businesses now getting caught out under paying wages. So fair work's getting quite aggressive in getting out there and talking to all sorts of businesses and they might even target a specific area and they might go okay, this suburb, we're going to look at takeaways in this area and see if they're underpaying. The issue for a business in those cases is hey, you might have done it unintentionally. Hopefully not. I mean hopefully you're not underpaying, hopefully you've stayed on top of things, including paying super, where that applies. So when underpayment is identified, then fair work will send a notice to respond and there'll be a time limit to get all your papers together and give them to fair work. There are penalties for not responding as well as penalties for the underpayment, so a business can find itself up for repaying the unpaid wages penalties for not responding and penalties for the underpayment.
Speaker 2:So now, on top of all that, if it's found to have been done intentionally, then that's a criminal offence, right? So we're unfortunately talking jail time. It can be. If a court finds that there has been an underpayment, then the penalty for the company will be the greater of three times the amount of the underpayment and 7.825 million. Or if the court can't determine the amount of the underpayment, it'll just be a 7.825 million. Oh wow, so we're talking about a lot of money here. They're getting serious. If the business owner has been actively involved in that underpayment and part of that intentional underpayment, the penalties could be a maximum of 10 years in prison, plus a financial penalty which will be three times the amount of underpayment and 1.565 million. Or if they can't determine the amount of the underpayment, 1.565 million.
Speaker 1:So that's attached to the individual. So the business itself could be fined and the individual court could be fined Exactly and so the fair work on Bidsman is going to have the responsibility for investigating any suspected underpayments. Okay, ouch, well, basically, I mean, obviously this is critical. Business owners need to know what the minimum requirements are for payment and making sure they're doing that and, I guess, auditing payroll and being on top of that, those numbers.
Speaker 2:Yeah, exactly, and you know we've seen some really big companies recently who've had infeasible undertakings or, you know, big fines. I mean, one of those recently was one of our biggest banks.
Speaker 1:Yes, we were talking billions of dollars, millions, millions.
Speaker 2:Yeah, so it underpaid their staff by 16 million, right, and then had to pay nearly 12 million in penalties. Now that we've scheduled, we probably should point out that there will be a voluntary small business wage compliance code. It's a bit of a mouthful, isn't it, and we're yet to see what that is, but if a small business complies with the voluntary code, then they won't be criminally prosecuted if they underpay their employees.
Speaker 1:Okay, so good news if you're in that bracket of 14 employees or fewer.
Speaker 2:So they're still working on that voluntary code and I'm guessing we'll know about it sometime this year. Yeah, this will all be very relevant from the 1st of January 2025.
Speaker 1:Yeah, we've got a bit of time, so watch this space. They're proposing it to begin 1 January next year, unless they decide to deem it earlier, but we'll keep you informed. Did you know that we have lots of free resources available to you on our website, things like templates that you could download, or a checklist for a process or even recordings of our previous workshops? If you're looking for help in a particular area or just some inspiration, check out the resources page on our website, astahrcomau. And now it's back to the episode.
Speaker 2:So is your head spinning. Yet We've only got two more that we wanted to talk about.
Speaker 1:Is that right yeah, that's right yeah. So redundancy is something that comes into play when you know, that you no longer need the job.
Speaker 2:Yeah, you no longer require that job to be done, so the position's made redundant. Therefore, the person who is holding that position no longer has a job.
Speaker 1:Yeah, so, as it stands right now, there is a small business dismissal code. So if you're in that bracket of the 14 employees or fewer and class yourselves as a small business, you don't need to pay what's called a redundancy pay in those sort of cases.
Speaker 2:So the main change with the redundancy exemption for small businesses is the rules now prevent an organisation from downsizing and becoming a small business and then avoiding having to pay redundancy because it's become a small business.
Speaker 1:In the case of some, fewer than 15 employees.
Speaker 2:So the easiest way to think about this, I think, is that up until this legislation it would have been possible for an organisation to downsize to the point where they had 14 or fewer employees and they would have had to pay redundancy pay to everyone they got rid of to get down to that level, and then that last lot of employees they wouldn't have had to pay redundancy because of the small business exemption for paying redundancy.
Speaker 1:This change means they can't do that anymore.
Speaker 2:Exactly Okay. So the staff will have to pay redundancy pay on all the employees who lose their jobs because of redundancies.
Speaker 1:Okay. So what's important to note here is if you are a business that is larger and doesn't classify as a small business, but you might find yourself in a situation of downsizing that you can't get around it by calling yourself small business to not have to pay that, yeah, we can't call yourself a small business.
Speaker 2:It's going to depend on the number of employees, yes, and you can't avoid necessarily. There will be conditions where you don't have to pay it. But you can't essentially avoid paying it because you've downsized so far that you're now a small business when you weren't before.
Speaker 1:Yeah, yeah. So our final one, susan, is around increased rights against discrimination, and particularly this is in the case of employees who might choose to use their right to take family and domestic violence leave.
Speaker 2:Yeah, that could be part of it. But, in any case, it's now a specified protection against any adverse action, including dismissal, against an employee because they're experiencing family and domestic violence, or even if they have been experiencing family and domestic violence. So this is the same as other discriminatory practices? Yeah, and again common sense.
Speaker 1:Yeah.
Speaker 2:But sometimes these things need to be specified.
Speaker 1:So this one here. I guess for an employer it'd be about knowing that that information can't be used against a person.
Speaker 1:So, they can't be performance managed because they're taking time off work because of that, or they can't be fired because of that, I guess, and things like that. Well, we've done our best to take you through all that legislation change. Like we said, we'll put the link in our show notes to the PDF and the more information on the Fair Work website if you want to go and have a read of that yourself and put yourself to sleep. But they have a lot more information on there and we'll keep you updated as things you know come to me.
Speaker 1:Yeah, yeah, evolve yeah that's a good way to put it. Our compliance checklist on our website has been updated to include these things, so if you haven't already got that, jump over to our website and you can download that for free.
Speaker 2:Well, that was quite a bit, wasn't it? Yeah, I'm feeling a bit worn out after that one. Hopefully you've been able to pick on anything that you think you might be affected by, and we're always happy to answer any questions.
Speaker 1:Thanks for listening to the Work Wonders podcast brought to you by Asta HR. Hit the subscribe button now to never miss an episode, and if you'd like to continue the conversation with us, you can find us over at astahrcomau. See you in the next episode.
