In a surprise deal done as the last day of the 2023 Parliamentary year dawned, the Albanese Government came to an agreement with Senate crossbench members David Pocock and Jaquie Lambie to pass key elements of the Government’s Draft Closing Loopholes Bill 2023. The deal resulted in the separation of the original Fair Work Amendment (Closing Loopholes) Bill 2023 into two parts – Closing Loopholes Bill No. 1 and Closing Loopholes Bill No. 2.
Closing Loopholes Bill No. 1 included all of the non-contentious elements of the original legislation with three of the more contentious elements added in what was a surprise to many. These three elements included – reforms to labour hire, the criminalisation of wage theft in Australia, and the expansion of some union delegate rights in Australian workplaces. This first Bill (No. 1) was immediately approved by the Australian Senate and then formally passed by the Australian Parliament by the end of the day – with elements of it coming into law immediately.
Parliamentary debate on the Closing Loopholes Bill No. 2 will commence when the Australian Parliament resumes on 6 February 2024, after formal consideration of the findings of a review by a Senate Standing Committee. The key IR elements that have been carried over in this second draft Bill include three areas that have been the focus of the majority of ACAPMA’s IR advocacy activity this year, namely:
(a) the proposed road transport reforms,
(b) the further expansion of a union delegates right of entry to workplaces, and
(c) changes to the definition of casual employment.
“The majority of the changes that were passed by the Australian Parliament yesterday were largely uncontentious with the exception of the Labour Hire Reforms, which have been hotly opposed by those industries that use labour hire extensively – particularly mining and construction”, said ACAPMA CEO Mark McKenzie.
“While we understand that there are a small number of businesses in our industry that have engaged labour hire firms in response to labour shortages – particularly businesses in regional and remote areas – we do not believe these changes will have a major adverse impact on our industry”, said Mark.
In respect of the other key element – the new Wage Theft laws – the introduction of criminal penalties for businesses that engage in deliberate and systemic wage underpayment is a welcome move.
“While no-one likes to see civil penalties replaced with criminal laws in the business sector, these laws strictly target those that are deliberately underpaying staff – with a view to gaining an unfair financial advantage over the vast majority of Australian businesses that are doing the right thing on wages”, said Mark.
“There is absolutely no room for businesses in our industry that engage in ‘wage theft’ and ACAPMA has been openly supportive of this particular element of the new laws”, said Mark.
The new laws mean that companies who engage in intentional wage theft, will be subject to maximum fines that are the greater of either:
- $7.825 million, or
- three times the amount of the underpayment.
For individuals who engage in intentional wage theft, the proposed offence will carry a maximum of 10 years’ imprisonment and/or a maximum fine of the greater of either:
- $1.565 million, or
- three times the amount of the underpayment.
“Importantly, the new laws will not capture businesses that have inadvertently done the wrong thing as a result of an incorrect interpretation of the Award”, added Mark.
The new laws include a ‘safe harbour’ provision that allows businesses to self-report wage underpayment. This means that businesses that identify a wage underpayment can report the underpayment to the Fair Work Ombudsman (FWO) and then enter into an agreement to remedy their breach without criminal prosecution.
These agreements will be struck at the sole discretion of the FWO. In exercising its’ discretion, the FWO will give consideration to a range of factors before approving an agreement. These factors include:
- whether the employer has made a “voluntary, frank and complete disclosure of the conduct”, and
- the employer’s past compliance with the Act.
While the new laws were passed by the Australian Parliament yesterday, criminal penalties for wage underpayment do not take effect until 1 January 2025.
“This 12-month period provides an opportunity for all businesses to check that their wage payment practices comply with Australian employment law, and we strongly urge all members to take reasonable steps to check that their wage practices are lawful”, said Mark.
Members seeking clarification of the new laws, or wanting to discuss aspects of their current wage payment practices, can contact the ACAPMA Employment team by emailing email@example.com or calling the ACAPMA Secretariat on 1300 160 270.