Closing Loopholes Changes: Closing Loopholes Bill Attains Royal Assent

Closing Loopholes Changes: Closing Loopholes Bill Attains Royal Assent

The Fair Work Legislation Amendment (Closing Loopholes No 2) came into effect on 26 February 2024. The new legislation introduces new rules and changes some existing laws, including the Fair Work Act 2009 and comes into effect at various times between now and 2025.

A timeline of those changes is outlined below.

27 February 2024

Civil penalties, serious contraventions and compliance notices

For non- small business employers there will be an increase in the maximum civil penalties that a court may impose in relation to contraventions of the Fair Work Act.

The amendment also introduces a new threshold for what is a serious contravention.

A court may also make an order for failing to comply with a compliance notice. A compliance notice can now require an employer to calculate and pay the amount of an underpayment that is owed to an employee.

Enterprise bargaining

Terms in a bargaining determination made by the Commission will not be less favourable to employees than existing terms of an enterprise agreement that deals with the same matters.

New rules will apply to transitioning single-interest employer agreements and where multiple employers are franchises (of the same franchisor) they will be able to access the single-enterprise stream enterprise bargaining framework.

Technical change

A technical change removes an expired provision of the act, that allowed the Commission to dismiss an application to vary, revoke or make an award if the matters outlined in such application were dealt with already as part of the Commission’s 4 yearly review of modern awards. The provision previously expired on 1 January 2020.

1 July 2024

Right of entry

A registered organisation will be able to apply for an exemption certificate to waive the current 24 hours’ notice requirement to gain entry to investigate suspected underpayments where notice in advance might interfere or impede and investigation.

 26 August 2024

Right to disconnect

These changes enable employees to a new “right to disconnect” outside of work hours.

From 26 August 2024 (for non-small business employers) and 26 August 2025 (for small business employers) respectively, employees will have the right to refuse to monitor, read or respond to any contact from an employer or a third party related to the employees’ employment outside of their normal working hours, unless that refusal is unreasonable.

Employers and employees will be able to seek an order from the Commission in determination of this right and rules will apply when determining whether the refusal is unreasonable.

Casual employment

From 26 August 2024, the definition of casual employee will be amended in the Fair Work Act to state that an employee is a casual only if;  

  • There isn’t a firm advance commitment to continuing and indefinite work, factoring in the real substance, practical reality, and true nature of the employment relationship.      
  • The employee is entitled to be paid a casual loading or a specific pay rate for casuals.

A new pathway will replace the existing rule for eligible employees to change to permanent if they want to, including the reduction of the minimum employment period for employees of non-small businesses.

Employers will be unable to dismiss or threaten to dismiss an employee in order to engage them as a casual employee, or to make certain misrepresentations in relation to casual employment.

Defining employment

In application of the new rules, when determining whether a worker is an employee or an independent contractor, consideration must be given to the:     

  • Real substance, practical reality, and true nature of the relationship
  • Whole relationship between the parties, including the terms of the contract and how the contract is performed in practice.

New definitions of “employer” and “employee” will be added to the Fair Work Act with effect from 26 August 2024. There will be some exceptions to the definitions including the provision for some workers to “opt out” of being employees via a notification process and meet the eligibility criteria.

“Employee like” workers

The Commission will be able to set fair minimum standards for “employee like workers” such as those performing work in the gig economy, in contractual chains in the road transport industry and through a digital labour platform. The commission will also be able to deal with any matters relating to deactivation of an employee like worker from a digital labour platform. A digital labour platform consultative committee will also be established.

The Commission will be able to set standards for employee like workers in the road transport industry and for independent contractors. The Commission will be able to also deal with disputes regarding unfair termination of services.

A new general protection will also be added to the Fair Work Act for workplace delegates representing roadworkers and certain employee-like workers.

Independent Contractors

The Commission will have the power to deal with disputes about unfair contract terms in an independent contractor agreement, provided that the contractor earns less than the defined contractor high income threshold.

The Independent Contractors Act will also be updated to reflect the relevance of the high income threshold, which is yet to be set.

1 January 2025

Civil penalties for wage underpayments

Courts may impose new maximum penalties to non-small business employers, where a contravention occurs that is associated with underpayments.

26 February 2025

Enterprise Agreements

Considering all prescribed matters, the Commission will determine the model flexibility, consultation and dispute resolution terms for Enterprise Agreements.

We urge employers to be proactive, be prepared and plan (as far as reasonably practical) the extent to which these changes will impact your employees and your workplace.

For assistance with understanding how the amendment will affect your workplace or for support with any other HR matter, please contact AES partner, HR Advice Online, via or 1300 720 004.