As of 26 August 2024, several significant changes to employment laws will come into effect as part of the Federal Government’s “Closing Loopholes” legislation. These updates are crucial for all business owners, particularly those with 15 or more employees.
In this blog post, we will explore the new “Right to Disconnect” rule, changes to casual employment, and updates regarding independent contractors.
Understanding the “Right to Disconnect”
One of the most notable changes is the introduction of the “Right to Disconnect” rule. This new provision allows employees to refuse to monitor, read, or respond to work-related communications outside their designated working hours. The legislation applies immediately to businesses with 15 or more employees, while smaller businesses (with fewer than 15 employees) will see this rule take effect on 26 August 2025.
What Does the “Right to Disconnect” Mean for Employers?
Under the Fair Work Act 2009 (Cth), employees now have a positive right to disconnect. They can choose not to engage with any work-related communications outside of their regular hours unless such refusal is deemed unreasonable. This shift in policy requires employers to rethink how they interact with their employees beyond standard working hours.
When is Refusing Contact Considered Unreasonable?
While employers can still reach out to employees outside work hours, employees are entitled to ignore or decline to respond to such contact unless it is unreasonable. Situations in which an employee’s refusal may be considered unreasonable include:
- Legal obligations that necessitate contact.
- The nature and urgency of the contact.
- The level of disruption caused by the contact.
- Compensation arrangements for being available outside normal hours.
- The employee’s personal circumstances, including family or caring responsibilities.
Changes to Casual Employment
The rules surrounding casual employment have also undergone significant revisions. A new definition of “casual employee” has been introduced, impacting how casual work is defined and the pathways available for transitioning to permanent employment.
New Definition of Casual Employee
From 26 August 2024, a person will be classified as a casual employee if, at the start of their employment:
- There is no firm commitment to ongoing work, and
- They are entitled to a casual loading or specific casual pay rate under an award, registered agreement, or employment contract.
Importantly, employees who were classified as casual before this date will retain their casual status unless they opt for permanent employment.
Pathway to Permanent Employment
The new “employee choice pathway” allows eligible casual employees to request a transition to full-time or part-time permanent employment. This pathway is available to casuals who have been employed for at least six months (or twelve months for small businesses) and believe they no longer fit the casual employee definition. Employers can only refuse this request under specific circumstances.
Independent Contractor Changes
Another significant update is the addition of a new definition of employment, which clarifies the distinctions between employees and independent contractors. This definition is crucial for businesses determining the classification of their workers.
The Whole of Relationship Test
From 26 August 2024, a new method for distinguishing between contractors and employees, known as the whole of relationship test, will be applied. This test examines the real substance, practical reality, and true nature of the working relationship.
Factors to consider when determining the relationship include:
- The degree of control over how work is performed.
- Financial responsibility and risk associated with the work.
- Who provides the necessary tools and equipment.
- The ability to delegate or subcontract work.
- Hours of work and expectations for continuity.
Need Assistance?
With these employment law changes being complex and potentially impactful for your business, it’s crucial to stay informed and compliant. If you need help navigating these new regulations or require assistance from a specialist Employment Lawyer, please contact us.
At Rubiix Business Accountants, we’re here to support you every step of the way.
