Further protection for workers’ entitlements – the Fair Work Legislation Amendment (Protecting Worker Entitlements) Act 2023

The Fair Work Legislation Amendment (Protecting Worker Entitlements) Act 2023 (the Act)received Royal Assent on 30 June 2023.  It contains a series of amendments to the Fair Work Act 2009 (FW Act) further to the changes from the Secure Jobs Better Pay Act, to provide stronger protections for workers in Australia. These include new provisions to:

• protect migrant workers, regardless of their immigration status
• enshrine a guaranteed right to superannuation for employees under the National Employment Standards (NES).
• provide stronger access to unpaid parental leave which complement recent changes under the Paid Parental Leave Act 2010 (Cth) (PPL Act).
• ensure that casual employees working in the black coal mining industry are not disadvantaged and treated less favourably than permanent employees in the accrual, reporting and payment of their long service leave (LSL) entitlements in the Coal Mining Industry (Long Service Leave Funding) Scheme (the Scheme).
• expand the circumstances in which employees can authorise employers to valid deductions from payments due to employees, where the deductions are principally for the employee’s benefit.
• clarify the operation of Fair Work Commission (FWC) workplace determinations and enterprise agreements.

We provide a summary of the key changes below.

Key changes

Protection for migrant workers

• Clarity is now provided through a new section 40B of the FW Act to expressly deal with the interaction between the FW Act and the Migration Act 1958 (Cth) (Migration Act). A breach of the Migration Act, or an instrument made under it, does not affect the validity of a contract of employment, or the validity of a contract for services, for the purposes of the FW Act.
• The effect of this provision is to ensure that migrant workers (including temporary migrant workers) working in Australia are entitled to the benefits and protections of the FW Act (i.e. protections from unfair dismissal, discrimination, general protections, freedom of association, collective bargaining, and wages entitlements) regardless of their immigration status.  The migrant worker will be entitled to those protections including where he or she has breached a work-related visa condition or does not have work rights in Australia.

Superannuation

• The FW Act has not historically required that employers make minimum superannuation contributions on behalf of employees to avoid the superannuation guarantee charge. The effect of this has been that employees have no direct cause of action against employers for shortfalls in superannuation contributions, and are forced to rely on the intervention of the Australian Taxation Office.
• The Act introduces a new requirement in the NES for employers to make superannuation contributions for employees, and this extends to award-free employees. Where superannuation is not paid, employees will now be able to take direct action in court to recover their unpaid superannuation.
• Non-compliance will attract civil penalties as for other breaches of the NES. Employers should also note that from 1 July 2026, superannuation is to be paid at the same time as wages to employees rather than quarterly.

Unpaid parental leave

• The Act significantly increases the entitlement to flexible unpaid parental leave from 30 to 100 days over a 24 month period.  Other amendments have also been introduced to allow parents access unpaid parental leave with greater flexibility.
• This unpaid leave can be taken flexibly within 6 weeks of the expected birth of a child, or otherwise at any time in the 24 month period following birth. This is a NES entitlement.
• Changes to unpaid parental leave by couples also mean couples can cake unpaid parental leave of up to 12 months at the same time.
• The right to request a further 12 months of unpaid parental leave (24 months each in total) will also afford additional flexibility. An alert detailing a summary of the proposed changes to unpaid parental leave already effect under the Act can be accessed here.

Coal mining long service leave scheme

• This Scheme is a Federal Government initiative dating back 1949 established under the Coal Mining Industry (Long Service Leave) Administration Act 1992 (Cth) (the Administration Act).
•  The Scheme was reviewed in June 2021 with recommendations to ensure that casual employees are treated no less favourably than permanent employees in the Scheme. The Act amends the Administration Act and the Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992 (Cth). Some of the amendments include:
  1. The definition of ‘eligible wages’ as the employee’s base rate of pay, including incentive-based payments, bonuses and the casual loading; or the employee’s ordinary rate of pay paid to the employee, including incentive-based payments and bonuses.
  2. Expanding the meaning of ‘qualifying service’ to deem that certain weeks where a casual employee does not work due to specific rostering arrangements are periods of qualifying service;
  3. Amending the method for calculating a casual employee’s ‘working hours’ per week to produce an average of all hours worked by an employee across all the weeks that commence in a quarter (see section 39A of the Administration Act); and
  4. Introducing a new civil penalty provision for non-compliance with the new obligation to pay a casual employee in the coal mining industry LSL entitlements in accordance with the amendments to the Administration Act.

Employee authorised deductions

• Previously, section 324 of the FW Act provided that employees can authorise employers to make deductions from payments due to employees, where the deductions are principally for the employee’s benefit.
• Where the amount of the authorised deduction varied, this required employees to provide a new written authority on each occasion, increasing administrative burden.
• The Act will permit employees to authorise employers, in writing, to make regular deductions for amounts that vary from time to time provided that the deductions are not for the direct or indirect benefit of the employer.
• Existing deduction arrangements may continue if they meet the requirements of the amendments.

Workplace determinations

• The amendments insert new provisions in the FW Act to make clear that if an Enterprise Agreement applies to an employee in relation to particular employment, and a workplace determination that covers the employee in relation to the same employment comes into operation, the Enterprise Agreement ceases to apply to the employee in relation to that employment and can never so apply again.
• Existing workplace determinations continue to operate on the basis that they replaced previous enterprise agreements (if any).

When does this impact employers?

Most of the changes commenced effective on 1 July 2023 and other changes are scheduled to take effect this year and early 2024 and are as follows:

Employers should consider the recent changes and their impact on operations, and requests for flexible unpaid parental leave.

Employers should prioritise the review their employment contracts, template documents and policies to ensure there is no breach of the provisions under the new legislation, or any inconsistencies that may be misapplied, which may attract penalties.

EMA Legal can assist employers in providing advice regarding the new obligations and the review of existing relevant documents, templates, and policies in line with the new legislation.