Expert Blog: The Big F (Fair Work amendments)

There’s a lot to stay on top of when running a disability or aged care business. With significant workplace reforms now in effect, there are some important updates that affect how you manage your team. 

Employment Hero’s top employment lawyer and Head of HR Advisory, Simon Obee, breaks down the key changes and what they mean.

Right to disconnect
The headlines about the new right to disconnect might have you worried about providing round-the-clock care, but don’t stress. It’s still possible to require employees to respond to out-of-hours contact, so long as the requirement is reasonable. 

The key to showing this contact is reasonable is managing expectations and making sure your workers understand the requirements of their role regarding contact after hours. We’d recommend including details of this in employment contracts and in a dedicated Right to Disconnect Policy.

The SCHADS Award also contains provisions which make clear that the right to disconnect is not breached when an employee is contacted about an emergency change in roster and that employees can also be required to monitor for, and respond to, out of hours contact when they are being paid an “on-call” allowance. The Aged Care Award states that the right to disconnect will not be breached where employees are contacted about emergency roster changes or being recalled to work.

“If your organisation needs to communicate with staff out of hours, it can still do this. Just make sure you’re only doing this when it’s reasonably required. If a response isn’t needed until tomorrow – make that clear” says Simon Obee.

Fresh take on casual employment
The way casual employment is defined has changed. Instead of focusing solely on what’s in the contract, the new rules look at how things actually work day-to-day. Key factors include the ability to accept or reject shifts, likelihood of ongoing work, regular work patterns, and whether permanent staff do similar work.

For care providers who rely on casuals, you’ll need to make sure the working arrangements support the view that new hires are going to be engaged on a truly casual arrangement. This means that merely calling them a casual employee in their employment contract isn’t going to be enough.

Rules about casual conversion have changed too. Casual team members can now request permanent employment after just 6 months (12 months for small businesses) if their working pattern suggests they’re no longer being treated as a true casual employee. 

“So long as you get things right at the start, there’s nothing to worry about. If the employee doesn’t request to convert to permanent employment, they can continue working as a casual indefinitely, there’s no longer a duty to proactively offer them permanent employment”, says Simon Obee.

A new definition for independent contractors
The new definition of “employee” in the Fair Work Act means the line between employees and contractors has been redrawn, and is now based on the real-world relationship. Factors like control over the worker, task delegation, and payment methods are the key deciders, rather than what is stated in a written contractor agreement. The changes also make it easier for contractors to challenge unfair contract terms.

Care providers engaging independent contractors should review their arrangements with contractors to ensure they still pass the “contractor test”. Misclassification could lead to liability for employee entitlements and sham contracting penalties.

“The chief risk in using independent contractors has always been that they will be found, in reality, to be employees. The terms of their written agreement are no longer going to be key, it’s all about how their engagement works in practice”, says Simon Obee.

SCHADS, Aged Care & Nurses Award changes
Some big updates are coming to the Social, Community, Home Care and Disability Services Industry Award,  the Aged Care Award and the Nurses Award from January 2025:

• The classification structure for direct care aged care workers will be amended in both the SCHADS and Aged Care Awards
• Wage increases for aged care workers under SCHADS and the Aged Care Award will roll out in two stages (January and October 2025)
• Assistants in Nursing working in home care or residential aged care won’t come under the Nurses Award anymore, they’ll be under SCHADS or the Aged Care Award, as appropriate

“The biggest changes are going to be the classification structures for aged care, home care employees under the SCHADS Award and direct care workers in the Aged Care Award. There are different provisions depending on whether employees are employed before or after 1 January 2025, so take the time to understand the new classifications which the Fair Work Commission has already published the details of”, says Simon.

Criminalisation of wage theft
The new law criminalising wage theft is likely to come into force on 1 January 2025, and will only apply to underpayments that occur after this date.

The new provisions will target intentional underpayments of staff, meaning honest mistakes leading to pay discrepancies will not be caught by the new law.

The penalties for deliberate wrong-doing will be severe: up to ten years in jail or fines of several millions of dollars.

The legislation contains “safe-harbour” provisions meaning that the Fair Work Ombudsman will be able to choose not to prosecute an employer if it enters into a “co-operation agreement” with them. These agreements are generally used where employers self-report underpayment issues and then agree steps with the FWO about putting things right. 

Small businesses (less than 15 employees) will also be able to avoid prosecution if they comply with the “Voluntary Small Business Wage Compliance Code (which is still yet to be published).

“The new legislation targets the tiny percentage of employers who are deliberately underpaying staff. However the real risk for most employers is discovering an underpayment and then continuing to underpay the employee. Once you know about it and don’t do something about it, there’s an argument that future underpayments are deliberate. So if you discover an issue, act fast and get some proper advice”, Simon says.

Know your employer obligations in the care sector
2024 was a big year for employment law updates, and 2025 is set to be another big one.

To manage these updates effectively, it’s important to understand how they look in practice. To protect your business, start with a review of your current workforce, update any relevant policies, and make sure your managers understand what’s changed.

Disclaimer: Information in this article has been prepared by Employment Hero Pty Ltd (ABN 11 160 047 709) and its related bodies corporate (Employment Hero). The information in this article is relevant as of 19 November, 2024. Employment Hero is not affiliated, endorsed, or associated with any government body. The views, resources or content provided in the article are general information only, are provided in good faith to assist employers and their employees, and should not be relied on as professional employment or legal advice. Any reference to government policies, regulations, or guidance is for informational purposes only and should not be considered official government advice. Accessing, downloading, relying, or using the content on the website is at your own risk. The information is based on data supplied by third parties. While such data is believed to be accurate, it has not been independently verified and no warranties are given that it is complete, accurate, up to date or fit for the purpose for which it is required. Employment Hero does not accept responsibility for any inaccuracy in such data and is not liable for any loss or damages arising either directly or indirectly as a result of reliance on, use of or inability to use any information provided in the article. You should undertake your own research and seek professional advice before making any decisions or relying on the information on this website.