Employment law update: Key changes in 2025
2 mins reading time
The impacts of the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Cth) and Fair Work Legislation Amendment (Closing Loopholes No.2) Act 2024 (Cth) (the Closing Loopholes Legislation) continue to be felt as further changes commence operation in early 2025.
Employers should be aware of recent and upcoming changes, some of which are scheduled to occur as soon as this week.
What: New wage theft provisions
When: 1 January 2025
As of 1 January 2025, new ‘wage theft’ provisions took effect as part of the Closing Loopholes Legislation. Employers that intentionally underpay an employee’s wages or entitlements can now be criminally charged. Additionally, the maximum civil penalties pertaining to underpayments have also increased.
Under the new section 327A(1) of the Fair Work Act 2009 (the Act) an employer commits an offence if it engages in intentional conduct to fail to pay a ‘required amount’ due to an employee in full or before the day when the required amount is due for payment. A required amount includes wages, allowances, superannuation, leave entitlements and salary sacrifice arrangements.
What: New ‘employee choice pathway’ for casual conversion
When: 26 February 2025 and 26 August 2025
On 26 February 2025, casual employees will have a new pathway to full-time or part-time work. The onus is currently on employers to offer conversion from casual to permanent employment after 12 months service when certain criteria are met, but the Closing Loopholes Legislation shifts the responsibility onto employees to now request conversion.
Under the new ‘employee choice pathway’ a casual employee can provide written notice to their employer to convert to permanent employment if they have been employed for at least 6 months, and they believe they no longer meet the requirements of the new casual employee definition.
As per section 15A(1) of the Act, the new casual employee definition introduced by the Closing Loopholes Legislation considers whether:
- the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work; and
- the employee would be entitled to a casual loading or a specific rate of pay.
For small businesses the conversion pathway is the same. However, the casual employee must have been employed for 12 months rather than 6 months. The changes do not come into effect for small businesses until 26 August 2025.
What: New model enterprise agreement flexibility consultation and dispute terms
When: 26 February 2025
The Closing Loopholes Legislation amended the Act so that the Fair Work Commission (FWC) was required to create new model terms for enterprise agreements and a new model dispute resolution term for copied State instruments.
The amendments require the FWC to make the following model terms:
- a flexibility term for enterprise agreements;
- a consultation term for enterprise agreements;
- a term about dealing with disputes for enterprise agreements; and
- a term for setting disputes about matters arising under a copied State instrument for a transferring employee.
Businesses will be able to include their own flexibility and consultation terms in enterprise agreements or otherwise rely on the model terms made by the FWC. However, where an enterprise agreement is not compliant or silent, the model terms will be inserted during the process of approval.
The changes will be coming into effect by no later than 26 February 2025.
What: New regulation on unfair deactivations and termination of contract for regulated workers
When: 26 February 2025
On 26 February 2025, the new Digital Labour Platform Deactivation Code and Road Transport Industry Termination Code will come into effect. The codes will respectively protect “employee-like” gig economy workers (such as Uber drivers) from unfair deactivation by digital platform businesses, and regulated road transport workers (such as truck drivers engaged as independent contractors) from unfair contract termination.
Key facts
- Regulated road transport workers will be protected from unfair dismissal where they have performed work under a service contact for a period of 6 months after 26 August 2024.
- Employee-like workers will be protected from unfair deactivation where they have been working through a digital labour platform, an app, or under a service contract managed through an app, for at least 6 months after 26 August 2024.
From 26 February 2025, the FWC will accept applications from eligible persons regarding the above. The FWC in both instances will consider whether there was a valid reason for termination or deactivation. They will also consider whether processes under the relevant new Code were followed.
How employers can prepare for these changes
In light of the new and recently implemented Closing the Loopholes Legislation, businesses should seek to take the following steps.
- Review any applicable awards or enterprise agreements and confirm employees’ award coverage and job classifications to ensure full understanding of employee entitlements.
- Perform audits to investigate any suspected underpayments (we suggest that such audits be conducted with assistance from lawyers under legal professional privilege).
- Review the employment status of casual employees against the new statutory definition of casual employment.
- Carefully consider the new Closing Loopholes protections in the context of any proposed terminations of contracts with road transport workers or employee-like workers, and when seeking approval of new enterprise agreements.
How Macpherson Kelley’s Employment lawyers can help
This array of changes that have been entering the employment law sphere since 2023 continues in early 2025 and should be on the radar of businesses and HR teams alike. If you would like to learn more about the above changes or need further advice on how you can best prepare, please contact Macpherson Kelley’s Employment, Safety and Migration lawyers.
This article was written by Christian Potgieter and Stella Fordham.
The information contained in this article is general in nature and cannot be relied on as legal advice nor does it create an engagement. Please contact one of our lawyers listed above for advice about your specific situation.
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Employment law update: Key changes in 2025
The impacts of the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (Cth) and Fair Work Legislation Amendment (Closing Loopholes No.2) Act 2024 (Cth) (the Closing Loopholes Legislation) continue to be felt as further changes commence operation in early 2025.
Employers should be aware of recent and upcoming changes, some of which are scheduled to occur as soon as this week.
What: New wage theft provisions
When: 1 January 2025
As of 1 January 2025, new ‘wage theft’ provisions took effect as part of the Closing Loopholes Legislation. Employers that intentionally underpay an employee’s wages or entitlements can now be criminally charged. Additionally, the maximum civil penalties pertaining to underpayments have also increased.
Under the new section 327A(1) of the Fair Work Act 2009 (the Act) an employer commits an offence if it engages in intentional conduct to fail to pay a ‘required amount’ due to an employee in full or before the day when the required amount is due for payment. A required amount includes wages, allowances, superannuation, leave entitlements and salary sacrifice arrangements.
What: New ‘employee choice pathway’ for casual conversion
When: 26 February 2025 and 26 August 2025
On 26 February 2025, casual employees will have a new pathway to full-time or part-time work. The onus is currently on employers to offer conversion from casual to permanent employment after 12 months service when certain criteria are met, but the Closing Loopholes Legislation shifts the responsibility onto employees to now request conversion.
Under the new ‘employee choice pathway’ a casual employee can provide written notice to their employer to convert to permanent employment if they have been employed for at least 6 months, and they believe they no longer meet the requirements of the new casual employee definition.
As per section 15A(1) of the Act, the new casual employee definition introduced by the Closing Loopholes Legislation considers whether:
- the employment relationship is characterised by an absence of a firm advance commitment to continuing and indefinite work; and
- the employee would be entitled to a casual loading or a specific rate of pay.
For small businesses the conversion pathway is the same. However, the casual employee must have been employed for 12 months rather than 6 months. The changes do not come into effect for small businesses until 26 August 2025.
What: New model enterprise agreement flexibility consultation and dispute terms
When: 26 February 2025
The Closing Loopholes Legislation amended the Act so that the Fair Work Commission (FWC) was required to create new model terms for enterprise agreements and a new model dispute resolution term for copied State instruments.
The amendments require the FWC to make the following model terms:
- a flexibility term for enterprise agreements;
- a consultation term for enterprise agreements;
- a term about dealing with disputes for enterprise agreements; and
- a term for setting disputes about matters arising under a copied State instrument for a transferring employee.
Businesses will be able to include their own flexibility and consultation terms in enterprise agreements or otherwise rely on the model terms made by the FWC. However, where an enterprise agreement is not compliant or silent, the model terms will be inserted during the process of approval.
The changes will be coming into effect by no later than 26 February 2025.
What: New regulation on unfair deactivations and termination of contract for regulated workers
When: 26 February 2025
On 26 February 2025, the new Digital Labour Platform Deactivation Code and Road Transport Industry Termination Code will come into effect. The codes will respectively protect “employee-like” gig economy workers (such as Uber drivers) from unfair deactivation by digital platform businesses, and regulated road transport workers (such as truck drivers engaged as independent contractors) from unfair contract termination.
Key facts
- Regulated road transport workers will be protected from unfair dismissal where they have performed work under a service contact for a period of 6 months after 26 August 2024.
- Employee-like workers will be protected from unfair deactivation where they have been working through a digital labour platform, an app, or under a service contract managed through an app, for at least 6 months after 26 August 2024.
From 26 February 2025, the FWC will accept applications from eligible persons regarding the above. The FWC in both instances will consider whether there was a valid reason for termination or deactivation. They will also consider whether processes under the relevant new Code were followed.
How employers can prepare for these changes
In light of the new and recently implemented Closing the Loopholes Legislation, businesses should seek to take the following steps.
- Review any applicable awards or enterprise agreements and confirm employees’ award coverage and job classifications to ensure full understanding of employee entitlements.
- Perform audits to investigate any suspected underpayments (we suggest that such audits be conducted with assistance from lawyers under legal professional privilege).
- Review the employment status of casual employees against the new statutory definition of casual employment.
- Carefully consider the new Closing Loopholes protections in the context of any proposed terminations of contracts with road transport workers or employee-like workers, and when seeking approval of new enterprise agreements.
How Macpherson Kelley’s Employment lawyers can help
This array of changes that have been entering the employment law sphere since 2023 continues in early 2025 and should be on the radar of businesses and HR teams alike. If you would like to learn more about the above changes or need further advice on how you can best prepare, please contact Macpherson Kelley’s Employment, Safety and Migration lawyers.
This article was written by Christian Potgieter and Stella Fordham.