Upcoming Changes to Employment law – What you need to know

Upcoming Seminar

To learn about these employment law changes and more register here for our upcoming Employment Law and HR Changes Workshop on 18 October 2023.

KEY TAKE OUTS

• NSW will continue to see changes to employment laws and awards from June 2023 till the end of the year.
• Workplace legislation will be placing limits on fixed term contracts, with a limit of a period of 2 years, and will require employers to issue employees the new Fixed Term Contract Information Statement.
• Casual employees have new rights to improve job security.
• To learn about these employment changes and more, join us for an upcoming information session at our Employment Law and HR Changes Workshop on 18 October 2023.

---

Between June to December 2023, NSW will see some key workplace changes to the relevant legislation and awards.

It’s important to stay up to date with these changes, to ensure that as an employer you are managing your employees correctly and as an employee, you are receiving the benefits and entitlements owed to you.

In this blog, we discuss two of those key changes relating to Fixed Term Contracts and Casual Employees.

Fixed Term Contracts

Recently, The Australian Government has recognised that Fixed Term Contracts can create a sense of job insecurity for employees. Especially when contractors cover an extended period of time or when employment would otherwise be ongoing.

From 6 December 2023, amendments to the Fair Work Act 2009 (Cth) will come into effect to include new obligations regarding fixed term employment contracts. The changes to the Fair Work Act 2009 (Cth) will limit the period of a fixed term contract to two years. Employers will also be required to provide employees on fixed term contracts with a ‘Fixed Term Contract Information Statement’. Failure to comply with these changes will expose employers to General Protection claims in the Fair Work Commission.

What constitutes a fixed term contract?

Fixed term employment contracts consist of true fixed term contracts and maximum term contracts. True fixed term contracts contain a term that states employment will be completed after a certain period and the employment cannot be terminated any earlier. Maximum term contracts are contracts that may be terminated, but on notice prior to the expiry of the term.

Schedule an Appointment Now

Who does the Fixed term contract limitations apply to?

The new changes will apply when:

• An employer enters a contract of employment with an employee; and
• The contract states a termination date; and
• The employee is not a casual employee; and
• Any of the following apply:
  • The contract is for more than two years; or
  • The contract is renewable for a period greater than two years or can be extended or renewed more than once; or the
  • Prescribed “consecutive contracts” criteria is satisfied.

What are the exceptions to the fixed term limits:

Fixed term and maximum term employment contracts exceeding 2 years will be permitted were the employee:

• Relates to a trainee agreement such as an apprenticeship or traineeship.
• Is only for the performance of an identifiable or distinct task which involves the use of specialist skills for a specific period.
• The employee is earning more than the high-income threshold, which is currently $167,500.
• Undertaking temporary work by replacing an employee on long leave.
• Performing a government position for a limited time under a company’s governing rules.
• A prescribed government funding exception applies.
• Employed to undertake essential work during a peak demand period.
• Employed under an applicable modern award.
• The employer will have the onus of proving the exceptions apply.

Fixed Term Contract Information Statement

Employers will be required to provide a Fixed Term Contract Information Statement (FTCIS) to all employees entering a fixed term contract. After employment has commenced, employers will need to provide this document as soon as reasonably possible. The FTCIS is not currently available, however it will be developed by the Fair Work Ombudsman. The Fair Work Ombudsman will set out details on the fixed term contract limitations, any exceptions that may apply and an outline of the dispute resolution process.

What does this mean for you?

Employers will be required to amend the fixed term contract to a period of two years if it does not meet one of the outlined exceptions. Prior to doing so, they will be required to provide employees with the Fixed Term Contract Information Statement (FTCIS). Employers will also need to consider any previous contracts and count them towards the 2-year limitation.

For any breach of the proposed changes, employers will be liable for monetary penalties. Further, if employers actively take steps to avoid enforcing the fixed term restrictions, then they can be held accountable under anti avoidance rules.

If you are an employee on a fixed term contract, you should ensure that when the changes come into effect that your employer makes those changes. If your employer is not willing to make those changes or doesn’t take action to make those changes, then Coutts can assist you to ensure that your rights and entitlements are being met.

New rights for Casual employees

The Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021 made changes to the National Employment Standards (NES) in the Fair Work Act 2009 (Cth). Some of these changes have created amendments to casual employment laws.

Pursuant to the changes under the NES, casual employees will receive:

• Access to a pathway to become a permanent employee
• 2 days unpaid carer’s leave per occasion
• 2 days compassionate leave per occasion
• Paid family and domestic violence leave
• Unpaid community service leave

A casual employee will only be able to request flexible working arrangements and take unpaid parental leave if:

• They have been employed as a casual employee on a regular and systematic basis for at least 12 months.
• It is reasonably expected that the casual employee will continue to be an employee on a regular and systematic basis.

Schedule an Appointment Now

What is a casual employee?

In 2021, the former Coalition Government stated that the definition of a casual employee is to be determined through the offer of employment. Recently, it was decided that new laws would replace this definition with a definition based on ‘the real substance, practical reality and true nature of the employment relationships.’

The proposed changes will also introduce an ‘employee choice’ process where a casual employee could notify their employee that they no longer meet the definition of a casual employee. Employers will be restricted in their ability to reject an employee choice notification, as the employer would have to provide a detailed explanation of why the employee notification was denied.

Any disputes regarding the employee choice provision and casual conversion process can be arbitrated by the Fair Work Commission. New offences will also be introduced to hold employers accountable for any misrepresentation of employment.

Pathway to permanent employment

It is said that the amendments will aim to address a legal ‘loophole’ in employment law. Claiming that some employers treat their casual workers as permanent employees, but without access to job security and leave benefits. Casual employees will now be able to transition from a casual employee to full time or part time employment. Employees can access this process if they have worked for their employer for more than 12 months and if it is agreed upon by both the employer and employee.

Other Possible Changes

At present in NSW, casual employees are not entitled to receive paid sick or annual leave outside the changes set out above to the NES. Whilst this is currently the position in NSW, other states such as Victoria are leading the path to change by introducing paid sick pay for Victorian casual employees. Casual and self-employed workers in Victoria now have the financial safety net to take time off work when they are sick or need to care for a loved one through the Victorian Sick Pay Guarantee.

Eligible Victorian workers who sign up can access up to 38 hours a year of sick and carer’s pay. The program is an Australian-first and is fully funded by the Victorian Government at no cost to businesses. At this stage, there is no word as to whether other states such as NSW will adopt the same changes, however, if the initiative is successful in Victoria, we may slowly see other states such as NSW consider such schemes.

How Coutts can help Employers

If you are an employer and you wish to prepare or need any assistance implementing the new employment changes, feel free to reach out to our employment team at Coutts Lawyers and Conveyancers.

How Coutts can help Employees

If you are an employee and are seeking more information about the employment amendments and what this means for your rights, please contact our employment team at Coutts Lawyers and Conveyancers.

Schedule an Appointment Now

---

ABOUT MELISSA CARE: