Slimmed-down Closing Loopholes Bill passes Australian parliament

In a surprise development the Australian government has managed to push through a shortened form of its Fair Work Legislation Amendment (Closing Loopholes) Act 2023. On 7 December, the bill passed through both houses of parliament and represents what many commentators have described as the most substantial reforms to workplace legislation in over a decade. We’ll speak to a Sydney-based lawyer about the changes and what they mean for employers.

This is fairly controversial and very wide-ranging legislation designed to fundamentally reform a number of aspects of the country’s labour laws. Following a deal between the Albanese Government and several crossbench senators, the Bill was amended and divided across two pieces of legislation. Some of the changes, in the current Bill, are already in force whilst the remainder, in a separate Bill, will be debated later in the year. 

In summary, the changes include significant labour hire reforms, expanded union delegate rights and the introduction of a federal wage and superannuation theft offence. They will affect most employers, especially smaller businesses, and employers are being encouraged to take steps to mitigate the impact which, in some case, will be significant and immediate. 

So, let’s hear more about the changes. Neil Napper is an Australian employment lawyer advising clients on the impact of the changes and earlier he joined me by video-link from Sydney to discuss it. First question, do the changes mean extra costs for employers? 

Neil Napper: “Certainly it's one of the things that I think will be a consequence of this, Joe, increased compliance costs, yes. The length and complexity and the breadth of scope of these changes mean that there will be, inevitably, an increased compliance cost for most employers. That cost will vary depending on the nature of the business and the particular application of these changes to that business. For example, users of labour hire will be much more affected by the current changes than those who don't use labour hire, or use it infrequently, but, by and large, yes, all employers I fear will face increased compliance costs as a result of these changes, and there are more to come.”

Joe Glavina: “Back in October, I talked to your colleague Aaron about this Bill and, looking ahead, he said the key point for clients to grasp is the need to get the different parts of the business talking to each other, communicating effectively. So, HR, internal counsel, finance and so on, all working together to help to mitigate the impact of the changes. I guess you agree, that’s what’s needed?” 

Neil Napper: “Yes, I think that's right. I think that's a very sensible approach. I think, though, that really there's no substitute for experience and expertise in the area and so larger organisations will have inbuilt expertise to deal with these sorts of issues, by and large, although there will be more time as necessary to get across the nature of these changes and the impact on the business. So, larger organisations, I think, are relatively well placed to deal with it. The impact, I think, will be greater on small to medium sized businesses that don't necessarily have that in-house capability and who will, by necessity, either have to rely on external consultants, or assistants, or run the risk of non-compliance.”

Joe Glavina: “I see the Act includes a raft of new ‘union-friendly’ rules, Neil, enhancing the rights of workplace delegates to communicate with and represent workers, and to attend paid training, and a new right of entry for union officials to assist health and safety representatives. Are the new ‘union-friendly’ rules a big chunk of the changes?”

Neil Napper: “I wouldn't say it's a big chunk but certainly you're right, Joe, it’s certainly a union friendly Act and, in particular, in this first part of the closing loopholes legislation that became law in December 2023 one of those changes is these increased rights for workplace delegates, as they’re called, the union's representatives who are employed by employers on site. That’s really a small piece of legislation but it really is indicative of the overall flavour of the closing loopholes legislation. This particular tranche of it, and what we expect to see in 2024, there are dotted throughout the legislation little snippets that are favourable to the union movement and, indeed, we would see that in unexpected areas, perhaps, like in the sexual harassment law changes where you can now effectively have class actions run by unions on behalf of more than one individual.”

Joe Glavina: “Some of these changes came into force in December and, a few weeks on, I’m wondering what kind of impact they’ve had. What has your experience been?” 

Neil Napper: “Really the main change, in my experience, in my practice, with the December changes has been the regulation that the changes have introduced around labour hire, really targeting the labour hire industry in what appears to be either a deliberate or effective, I might want to say annihilation, of the industry because it's certainly not helpful for the labour hire industry. So, in my experience, the users, people within that industry, or external employers who use labour hire to a large degree, are looking very, very carefully and very, very closely at that legislation which is extremely detailed, extremely complicated, and we don't yet know the full implications of it, but that's certainly an area of close scrutiny by many people right now.”

Joe Glavina: “Finally, Neil, anything else to add for our HR viewers?”

Nei; Napper: “I think, sadly, that employees are going to have to strap in. It’s going to be a wild ride in 2024 I think, Joe. We've seen lots and lots of changes, quite extraordinary amounts of legislative changes in the last 18 months to two years, and there's going to be more in the coming 12 months.”

The other significant recent development to be aware of is in relation to the positive duty on employers to prevent workplace sexual harassment in Australia. The Australian Human Rights Commission has recently been given new enforcement powers to crack down on employers who fail to actively prevent workplace sexual harassment and it’s something we covered a fortnight ago with Neil Napper, again, providing the insight. That’s ‘AHRC to crack down on employers who fail to actively prevent workplace sexual harassment’ and we’ve put a link to it in the transcript of this programme for you.

LINKS
- Link to HRNews programme: ‘AHRC to crack down on employers who fail to actively prevent workplace sexual harassment’