Changes to employment law: Protecting Worker Entitlements Act 2023

The Parliament of Australia has enacted the Fair Work Legislation Amendment (Protecting Worker Entitlements) Act 2023, complementing last year's Secure Jobs and Better Pay legislation. This new act brings significant changes to the employment law landscape, focusing on five key areas.

While certain changes have already taken effect, others will be gradually introduced over the coming months. In this article, our HR Specialists explore the modifications included in this legislation, their implications for employers, and their respective implementation timelines.

1. Unpaid parental leave

As of 1st July 2023, significant revisions to the entitlement of unpaid parental leave have been implemented, bringing about sweeping changes including:

• The ability for both parents to take up to 24 months of unpaid parental leave, regardless of how much leave the other parent has taken; and
• An increase in flexible parental leave days from 30 to 100 days.

How does this impact employers: It is crucial for employers to be aware of the enhanced entitlements for employees taking parental leave. Going forward, updating leave policies to accommodate these changes will be essential.

2. Migrant Workers

Taking effect 1 July 2023, changes were made to clarify that migrant workers are entitled to protections under the Fair Work Act 2009. This holds even if they have breached their visa conditions or lost rights to work in this country.

This means migrant workers are still entitled to protections such as: minimum notice periods and minimum wages when their employment is terminated, to be paid out accrued annual leave when their employment ends, and can still make claims for unfair dismissal. This applies even when they have lost their rights to work in Australia, or did not have any rights to work in the first place.

How does this impact employers: When handling employees who have lost their work rights or violated their visa conditions, special attention must be given to their situation. It's important to note that even if there is a valid reason for termination, these employees retain the right to contest their dismissal. To avoid the risk of an unfair dismissal claim, it is crucial to follow the proper termination process diligently. Seeking professional advice is highly recommended when dealing with these circumstances.

3. Deductions from employees’ pay

Taking effect from the 30th December 2023, new changes will allow an employee to authorise an ongoing deduction of pay where the amount of deduction varies, e.g. where the price of a service or product changes periodically or over time. Currently, the Fair Work Act includes some very strict rules about when an employer is allowed to deduct any sums from an employee’s pay, which include:

• The deduction is principally for the employee’s benefit; and
• The employee has authorised the deduction in writing, which must specify the exact amount that the employee authorises to be deducted.

The effect of the current wording of the legislation is that it is not possible for the employee to authorise an ongoing deduction where the amount of the deduction is not fixed or will vary; this would require a new written authority whenever the amount of deduction changes.

The new changes, which instead allow an employee to authorise an ongoing deduction of pay where the amount of deduction varies, should reduce admin and bureaucracy for both employers and employees.

To protect employees from potentially being coerced into doing something against their will, an authorisation for varying deductions will not be allowed where the deduction directly or indirectly benefits the employer or a party related to the employer, subject to very limited exceptions.

How does this impact employers: Employers will have to deal with reduced admin when dealing with authorisations for ongoing and variable deductions from employees’ pay.

4. Superannuation to be included in the National Employment Standards (NES)

Employers are currently required to pay minimum superannuation contributions on behalf of employees, and nothing is changing surrounding this.

However, taking effect 1 January 2024, the effect of bringing the entitlement to superannuation within the NES means it will be easier for employees to bring claims against their employer for unpaid super, rather than having to pursue this through the ATO. A trade union and/or a Fair Work Inspector will also be able to apply to the court to enforce superannuation obligations for the employee’s benefit.

How does this impact employers: Employees will have simpler, quicker and cheaper ways to bring claims against employers when superannuation is not paid.

5. Long service leave in the coal mining industry

Employees in the coal mining industry have the benefit of “portable” long service leave entitlements. This means they accrue long service leave based on their length of service in the industry, regardless of whether they change employers or not. This is administered by employers paying levies into a central fund, based on their employee numbers and the number of hours the employees work.

The changes to legislation, which take effect 1 January 2024 (unless an earlier date is decided upon), provide greater rights for casual employees by ensuring that they are treated no less favourably than permanent employees for the purposes of their entitlements under the scheme. It ensures that, going forward, their casual loading will be applied to levy payments by the employer and the payment of the long service leave entitlement to the employee.

Additionally, there will also be updated methods for calculating the accrual of a casual employees’ long service leave entitlement.

How does this impact employers: Employers in the coal mining industry will need to ensure they understand the new obligations in respect of casual employee levies and entitlements.

Summary

Staying informed about parental leave changes is crucial in order for businesses to adapt their policies and practices, ensuring alignment with evolving legal requirements. Our ABIC HR Advisory Team suggest business owners regularly reflect on current policies internally, as employment compliance is subject to frequent revisions.