The 10 Key Changes to Workplace Relations Introduced in 2023

On 23 May 2022, Mr Anthony Albanese was sworn in as the new Prime Minister of Australia, commencing the first Australian Labour Government since 2013.

One of the critical areas the Labour Government is the review and amendment of Fair Work (one of Rudd’s Government’s critical changes in Australian Workplace Relations in 2009).

Although the Fair Work Commission still evolved and became a very strong presence in Australia during the decade under the Liberal Government, it is apparent the Labour Government was anxious to refine the Fair Work Act and close some of the gaps left by their predecessors. Particularly in the areas concerning sex discrimination and the gender gap, two pivotal topics of the Albanese election campaign.

In 2022 the Albanese Government proposed a range of amendments to most of the Fair Work Bills originally implemented in 2009.

The amendments resulted in the creation of three significant Bills introduced by the Australian Government in 2023 and 2024:

• The Secure Jobs Better Pay Act 2022;
• The Fair Work Amendment (Closing Loopholes Part 1) Act 2023, and
• The Fair Work Amendment (Closing Loopholes Part 2) Act 2024.

This blog article focuses on the 10 key changes to Australian Workplace Relations introduced between December 2022 and January 2024, mostly introduced as part of the Secure Jobs Better Pay Act Bill.

However, additional amendments were also the result of changes to the Taxation Act or the outcome of the Federal Court ruling.

The key 10 amendments selected in this blog are the changes that directly impact payroll for small and medium-sized employers. However, The Secure Jobs Better Pay Act 2022 Bill introduced additional amendments impacting larger businesses as well as areas concerning Human Resources.

As our expertise lies within Payroll for small and medium-sized employers, we have decided to leave the review of other amendments to the expert in these fields.

Finally, the article only provides a brief overview of each amendment. We have developed more detailed blogs to cover any of the topics that require more comprehensive analysis.

7 December 2022

The Secure Jobs Better Pay Act

The Secure Jobs Better Pay Act 2022′ receives Royal Assent on December 7, 2022, and introduces a range of amendments to the Fair Work Act, the Fair Work Registered Organisations Act 2009 and The Fair Work Transitional Provisions and Consequential Amendments Act 2009.

On top of the key Payroll changes included in this blog article, as a whole, the Bill includes the following amendments, all enacted over the course of 2023:

• Objects of the Fair Work Act, modern awards objective, minimum wages objective;
• Equal remuneration;
• Prohibiting pay secrecy;
• Anti-discrimination and special measures;
• Termination of enterprise agreements after the nominal expiry date;
• Sunsetting of “zombie” agreements;
• Initiating bargaining;
• Dealing with errors in enterprise agreements;
• Communications to be available in multiple languages.
• Prohibiting sexual harassment in connection with work;
• Expert Panels;
• Absorb the functions of the Registered Organisations Commission;
• Flexible work and unpaid parental leave requests;
• Enterprise agreement approval and the Better off overall test;
• Bargaining disputes, industrial action, supported bargaining, single-interest employer authorisations, varying enterprise; agreements to remove employers and their employees, and co-operative workplaces;
• Fixed-term contracts.

1 February 2023 & 1 August 2023

1. Paid Family and Domestic Violence Leave

The Family and Domestic Violence Leave National Employment Standard changes from a 5-day unpaid entitlement (originally introduced in 2018) to a 10-day paid entitlement, available to all employees (including casuals).

The new paid entitlement is rolled out to Australian Businesses in two stages:

1. From 1 February 2023 to Non-Small Business Employers, and
2. From 1 August 2023 to Small Business Employers.

From this date, pending on the Employer size, employees can access a maximum of 10 days per year of Family and Domestic Violence Leave to deal with the impact of family and domestic violence at home, including:

• making arrangements for their safety or the safety of a close relative (including relocation);
• attending court hearings;
• accessing police services or other support services;
• attending healthcare, such as counselling, therapy or doctor’s appointments;
• attending appointments with financial counsellors or legal professionals.

For more information about Family and Domestic Violence Leave, refer to the Blog article: ‘Understanding Family and Domestic Violence Leave in Australia‘, published on our website.

28 March 2023

2. Rostering Employees to work on Public Holidays

This change is introduced as the result of a ruling issued by the Federal Court in the case of CFMEU v OS MCAP Pty Ltd.

As a result of this case, Employers can no longer automatically roster employees to work on public holidays without requesting consent from the employee.

It is only after discussion or negotiation that an employer may “require an employee to work on a public holiday if the request is reasonable and the employee’s refusal is unreasonable”.

This rule even applies when the requirement to work on public holidays is included as a core condition stipulated in the Employment Agreement.

Although there is no detailed information on the format of the request that should be made to the employee, we strongly suggest managing such requests in writing or by using an approval process using a Rostering software application.

For more information about Public Holidays in Australia, refer to the Blog article: ‘Understanding Public Holidays in Australia‘, published on our website.

1 May 2023

3. Provisions for Directing Annual Leave during Temporary Shutdowns

New rules regarding the ability for employers to direct their employees to take Annual Leave when the business shuts down temporarily (for example, during the Christmas and New Year period) are introduced across a number of Awards starting from 1 May 2023.

The new rules include the requirement for employers to:

1. provide a minimum of 28 days written notice to employees about the upcoming shut-down period;
   Note: the notice period can be reduced in agreement with the employees.
2. reasonably direct the employee to take Annual Leave during the shutdown period;
3. offer alternative options when the employee does not have enough leave balances, including using accrued time off, taking Annual Leave in advance or taking Unpaid Leave;

7 June 2023

4. Prohibition of the Secrecy of Pay

This amendment is part of the ‘The Secure Jobs Better Pay Act 2022’. It prohibits employers from introducing pay secrecy clauses in Employment Agreements.

The bill does not remove the privacy component as a right available to the employee, it centres this right exclusively on the employee.

Upon the implementation of this amendment, employees are free to discuss their pay with their colleagues, providing that they are comfortable doing so.

Employees are still free to decline to discuss their pay with other workers if they do not wish to.

The core component of the bill is to stop employers not allowing these conversations in the workplace.

Furthermore, legal action (such as unfair dismissal claims) can be lodged against employers that terminate their employees from disclosing their pay to other workers.

According to the Albanese Government, this ban helps to promote transparency and fairness at work, as it allows employees to have open and honest discussions about compensation.

Finally, it reduces gender pay discrimination risk by allowing women to compare their pay with that of their male co-workers without fear.

1 July 2023

5. Changes to the Paid Parental Leave Scheme

The following amendments are introduced to the Government Paid Parental Leave Scheme:

1. Paid Parental Leave and Dad and Partner Pay are combined into one scheme, extending the Paid Parental Leave Scheme to a total of 20 weeks;
2. The decision to join the two schemes together allows both single parents to access the whole period of Parental Leave. However, this also means that parents can share the Parental Leave Pay and even take it at the same time both as paid leave and between periods of paid work;
3. Although the additional 10 days are no longer defined as ‘Dad and Partners Pay’ these 10 days are still reserved for the spouse/partner, providing that the birth mother or principal parent gives approval;
4. The income threshold is also amended. When the employee doesn’t meet the individual income limit of $156,647, the Government applies a combined family income limit of $350,000 instead. The family limit applies in both instances if the employee is in a partnership or a single parent;
5. Parents can access Government Paid Parental Leave up to the child’s 2nd birthday. Any unused Parental Leave Pay is lost if not used before the child turns 2.

The changes start for all parents giving birth or adopting a child from 1 July 2023. Parents who gave birth or adopted a child prior to this date still fall under the old rules.

The Australian Government is currently reviewing further changes to the scheme, including the extension of the Paid Parental Leave period to 26 weeks by 2026.

For more information about Paid Parental Leave in Australia, refer to the Blog article: ‘Understanding Paid Parental Leave in Australia‘, published on our website.

6 December 2023

6. Sunsetting of Zombie Agreements

Zombie agreements include specific types of Enterprise Agreements and Australian Workplace Agreements issued and registered by the Australian Government before the introduction of the Fair Work Act in 2009-2010.

From 7 December 2023, these agreements are terminated (unless the Fair Work Commission has granted a further extension).

All employees covered by any of these Agreements must now be covered by a Modern Award or a new Enterprise Agreement that has been registered and approved by the Fair Work Commission.

7. Limitation to Fixed-Term Employment Contracts

The final change included in ‘The Secure Jobs Better Pay Act 2022’ starts exactly 12 months from the bill receiving Royal Assent.

The amendment relates to new limitations imposed on employees engaged on Fixed-Term contracts starting from 6 December 2023.

The new Fixed-Term contracts must be limited to either a fixed-term employment of 2 years or a maximum of 2 renewals, whichever is shorter.

Exemptions apply to fixed-term contracts over a set amount, as well as Training and Government programs.

For more information on Fixed-Term Employment Contract restrictions, refer to the Blog: ‘New Fair Work Regulations on Fixed Term Contracts‘ published on our website.

8. New ATO Employee v Contractor Classification Rules

The ATO has also updated the Taxation ruling about the determination of employee vs contractor in relation to Pay As You Go Withholding.

The new Taxation ruling TR 2023/4 provide new guidelines to help businesses determine if a worker is an employee or contractor in relation to the business obligation to withhold Pay As You Go Withholding taxes. The new Tax ruling exclusively applies to Companies (Propriety Limited).

The new ruling finally outlines the most influential factors that lead to the determination between employee or contractor, which are:

1.  the written agreement between the two parties, and
2. how such an agreement reflects how the workers perform their tasks.

The ATO has also published a document called Practical Compliance Guideline (PCG 2023/2).

This document outlines the ATO’s risk framework for worker classification arrangements based on the actions taken by the parties when entering into the arrangement. Parties can self-assess against this risk framework to understand the risk of the agreement being reviewed and possibly reversed upon an ATO audit.

The issue of making the correct determination for a worker to be an employee or a contractor is one of the most challenging in Australian Workplace Relations.

The key factors that drive the determination vary significantly depending on the various worker’s obligations and entitlements as they are outlined in several different pieces of legislation.

These are:

• Pay As You Go Withholding (determined by the ATO Tax Ruling TR2023/4);
• access to entitlements (determined by the Fair Work Act 2009);
• Superannuation Guarantee (determined by the Super Guarantee Act SGR 2009/2);
• Workers’ Compensation (determined by the Workers’ Compensation Act of the relevant State or Territory);
• Payroll Tax (determined by the Payroll Tax Act of the relevant State or Territory).

We are currently working on a new blog article, which will provide comprehensive guidelines on the key factors that drive the determination of employee versus contractor based on the various rulings.

30 December 2023

9. Employee-Authorised Payroll Deductions

Employers can only process deductions from employees’ pay where the deductions are either primarily for the employee’s benefit or when specifically instructed by a Government Body (i.e. Child Support Australia).

From 30 December 2023, additional rules are introduced regarding the employer’s ability to process deductions without specific employee authority when such deductions directly or indirectly benefit the employer.

These include predominantly repayments of employee loans and overpayments.

The new regulations stipulate the following conditions:

1. All deductions must be authorised by the employee in writing. The deduction authority must be genuine and not coerced by the employer.
   The employee’s written authorisation must include the following:
   • One-off deduction:
     • the deduction amount;
     • the deduction reason;
     • the pay period that the deduction will be taken from the pay;
     • the name of the person that will receive the deduction amount (if applicable);
   • Ongoing deductions:
     (whether the deductions are for a fixed or variable amount)
     • the deduction amount (if the amount is the same for each period)
       Note: if the fixed deduction amount detailed in the employee authority changes over the course of the arrangement, a new written authority must be obtained by the Employer;
     • the deduction reason;
     • the start pay period and frequency of the deduction;
     • the name of the person that will receive the deduction amount (if applicable);
2. The employee can withdraw from the deduction agreement at any time;
3. The employer must retain records of all deductions’ written authorities;
4. The Employee’s payslip must display:
   • the deduction amount;
   • name, or name and number of the fund or account the deduction was paid into.

1 January 2024

10. Superannuation Guarantee becomes the 12th National Employment Standard

On 1 January 2024 Superannuation Guarantee becomes the first and only employee entitlement to be shared by both the ATO and Fair Work Australia.

Although, at this stage, no other compliance amendments have been introduced that affect the Superannuation Guarantee, this is a very significant change.

Superannuation falling under Fair Work purview means any breach of compliance is now subject to Fair Work penalties, traditionally much steeper than the ATOs.

Fair Work penalties also include Accessorial Liability (Section 550 of the Fair Work Act), which extends the responsibility of the compliance breach beyond the company owner/Director to Tax Agents, Partners and even some employees.

This update also includes the issuing of a new version of the Fair Work Information Statement. Employers should download the latest version of this document and update their employment onboarding document packs.

Conclusions

The ever-changing world of Australian Workplace Relations presents a continuous challenge for small and medium-sized employers.

Keeping up to date with these changes is only the first of the many challenges for employers.

Awareness must be followed by action, which includes the review, change, implementation and training of internal policies, employment contracts and systems.

When the limited funds of a company prevent a business from employing a dedicated internal resource to look after this area, partnering with a specialist in the field is the only viable solution.

Bury your head in the sand can be a very expensive attitude in the long run.

Contact Evolution Cloud Accounting to discuss how we can support your organisation in navigating these changes.

References

https://www.fairwork.gov.au/pay-and-wages/tax-and-superannuation#super-guarantee

https://www.fairwork.gov.au/pay-and-wages/deductions-and-related-issues/deducting-pay

https://www.fairwork.gov.au/about-us/workplace-laws/legislation-changes/secure-jobs-better-pay#:~:text=The%20Australian%20Government%20has%20passed,laws%20start%20on%20different%20dates.

https://www.fairwork.gov.au/leave/family-and-domestic-violence-leave

https://www.fairwork.gov.au/newsroom/news/new-shutdown-rules-for-awards

https://www.ato.gov.au/businesses-and-organisations/hiring-and-paying-your-workers/employee-or-contractor/difference-between-employees-and-contractors