What are the Closing Loopholes (1&2) Acts about?

The Closing Loopholes Acts, specifically the Closing Loopholes Act 2023 and the Closing Loopholes No. 2 Act 2024, are legislative changes affecting Australian workplaces. These have implications for all small businesses. It’s important for business owners to be across the changes and understand their compliance obligations.

These new laws take effect at different times between December 2023 and August 2025. Small business owners should review the specific provisions relevant to their operations and take the steps necessary to implement them.

Here’s a summary of what they each encompass.

Closing Loopholes Act 2023:

Key Changes:

• Right to disconnect: Eligible employees now have the right to refuse employer or third-party contact outside of working hours. This aims to promote work-life balance and protect employees from excessive after-hours communication.
• Criminalising wage underpayments: The Act imposes severe penalties for wage theft, including imprisonment or fines up to three times the underpayment amount. Employers must ensure accurate payment of wages to avoid legal consequences.
• Protection against discrimination: The Act extends protection against discrimination to cover employees facing family and domestic violence. Employers should be aware of these provisions and support affected employees.
• Labour hire changes: The Act ensures that labour hire employees earn at least the same as directly hired employees. However, this measure does not apply if the host is a small business employer (fewer than 15 employees).
• Independent contractor changes: The Act introduces minimum standards for independent contractors who perform work similar to employees. Small business employers should understand these changes.
• Enterprise bargaining and agreements: Updates to enterprise bargaining and the process for making awards and agreements are part of the Act. Small businesses should stay informed about these modifications.

Closing Loopholes No. 2 Act 2024:

Key Changes:

• Definition of casual employment: The Act clarifies the definition of casual employees. Now, the practical reality of the employment relationship matters, not just the terms in the employment contract. A casual employee is characterized by an absence of a firm advance commitment to continuing and indefinite work. They must also receive a casual loading or a specific rate of pay for casuals.
• Workplace right to disconnect: Employers must recognize the new workplace right to disconnect. This means that eligible employees have the right to refuse employer or third-party contact outside of working hours. The aim is to promote work-life balance and protect employees from excessive after-hours communication.
• Classification criteria for employees vs. independent contractors: Closing Loopholes No 2 updates the criteria for distinguishing between employees and independent contractors. It considers the real substance and practical nature of the employment relationship which might include contracts, mutual understandings, or expectations to indicate a firm advance commitment.
• Workplace delegate rights for regulated workers: Workplace delegate rights are expanded for regulated workers (except for those in specific industries)
• Intractable bargaining powers: The Act amends intractable bargaining powers, affecting negotiations between employers and employees. Employers need to understand their rights and obligations during bargaining processes.
• Minimum Conditions for Gig Economy Workers: Certain gig economy workers will now have minimum conditions under the Act. Employers in this sector should review their practices and ensure compliance.

To help you navigate your workplace obligations we have free, plain English toolkits you can access here. For more detailed information, you can refer to the official resources provided by the Fair Work Commission and the Fair Work Ombudsman here.