The Right to Disconnect: What you Need to Know!

The Fair Work Legislation Amendment (Closing Loopholes No.2) Act 2024 (Closing Loopholes Act) has introduced a range of substantial changes to employment law, effective today. 

Employers will need to understand these reforms and adapt changes to their workplace to ensure compliance. Employees will also need to understand their new set of rights under the reforms and enforce them, where applicable.

The three main areas of reform include:

Introduction of the ‘Right to Disconnect’

The ‘Right to Disconnect’ empowers employees to refuse to respond to contact by their employer outside of their ordinary work hours unless the refusal is ‘unreasonable’. Employers are prohibited from taking adverse action against an employee who exercises such a right, including dismissing them.

Read our full article on this change here

How this Impacts You

Employers are still able to contact employees outside of their normal working hours for work-related queries, however, employees now have the right to refuse to respond to the contact, unless their refusal is unreasonable.

To comply with this reform, employers are recommended to adapt practical changes to their workplace, including updating policies and making note of which employee refusal to respond to contact is ‘unreasonable.’

Changes to the Definition of ‘Employee’ and ‘Employer’ & Unfair Contractor Agreements 

A clear distinction is drawn between an ‘employee’ of a business and an ‘independent contractor.’ Traditionally, in defining which individual is an employee/ an independent contractor, Courts looked to various indicators and the day-to-day employment relationship.

The Closing Loopholes Act reverses this and allows Courts to consider the ‘totality of the employment relationship.’

How this Impacts You

Wrongly classifying an individual as an ‘independent contractor’ is a breach of Fair Work legislation and may lead to underpayment claims, fines and penalties and financial impacts on a business. For individuals, if you are wrongly deemed an ‘independent contractor,’ you may be forgoing substantial benefits, such as wages and entitlements, protections and employment security.

Further, the Closing Loopholes Act has introduced an expanded ‘unfair contract’ policy, allowing independent contractors to escalate disputes in relation to their contracts. Employers will need to review existing independent contractor agreements and ensure that they meet the new minimum standards.

Changes to Casual Employment

Employees will only be defined as a ‘casual’ if there is no firm advance commitment to continuing work. There are also a number of changes to the casual conversion process providing new notification and time limit requirements on both employees and employers.

How this Impacts You

Employers will need to ensure that all casual employees are correctly classified. Employers will need to review contracts, policies and conversion procedures to ensure compliance with the new reforms.

Employees will have new pathways to request a conversion from casual employment to permanent.

Next Steps

The Closing Loopholes Act provides extensive and challenging changes to the workplace. While they may be difficult to navigate, compliance with them is mandatory. By complying, businesses will avoid breaches, penalties and financial repercussions, and employees will be afforded greater protections.

If you need assistance in approaching these changes, whether as a business or an individual, please contact Hannah Lennon-Mather for legal advice at hlennon-mather@marsdens.net.au

The contents of this publication are for reference purposes only. This publication does not constitute legal advice and should not be relied upon as legal advice. Specific legal advice should always be sought separately before taking any action based on this publication.