Recent developments in employment law

The latest issues, decisions and proposed changes impacting business and workplace risk 5 min read

Strengthening employee protections: new wage theft laws in 2025

By: Tarsha Gavin, Lawrence Mai, Anouscha Green

Prioritise a corporate culture of compliance with the FW Act

Provisions criminalising wage theft—one of the last Closing Loopholes reforms to commence—will come into effect under the Fair Work Act 2009 (Cth) (FW Act) from 1 January 2025.

What entitlements are captured?

Under the new wage theft provisions, employers (both companies and individuals) will be guilty of a criminal offence if they intentionally underpay their employees amounts owed under the FW Act, a fair work instrument or a transitional instrument. This includes modern awards or enterprise agreements. However, it does not include entitlements arising solely from an employment contract, as well as superannuation contributions, long service leave and certain payments relating to jury duty and emergency services duties.

The new criminal offence attracts significant maximum penalties, including:

• for companies, the greater of $7.825 million or three times the underpayment amount; and
• for individuals, up to 10 years' imprisonment and/or the greater of $1.565 million or three times the underpayment amount.

Voluntary disclosures and exemptions

If there has been an underpayment of entitlements within the scope of the new wage theft provisions, employers may have an opportunity to enter into a discretionary 'cooperation agreement' with the Fair Work Ombudsman (FWO). In assessing whether to enter into a cooperation agreement, the FWO will consider a range of factors including, but not limited to:

• the extent to which the disclosure was 'voluntary, frank and complete';
• the nature and gravity of the underpayments; and
• whether the employer has a historical 'corporate culture' of compliance with the FW Act.

While a cooperation agreement is in effect, the FWO cannot refer the matter for criminal prosecution. However, employers may still be exposed to potential civil penalties.

For small business employers as defined under the FW Act, demonstrated compliance with the Voluntary Small Business Wage Compliance Code (which is currently under development) means the FWO cannot refer the underpayment for criminal prosecution.

Key takeaways

As the new year approaches, employers should ensure that a corporate culture of compliance with the FW Act is a high priority within their organisation, and that there are systems and processes in place to proactively and quickly address payroll issues and underpayments if and when they arise.

For more information regarding the criminalisation of wage theft, see our previous Insight here.

One and done: protected action ballot order upheld after only one bargaining meeting

By: Sarah Lunny, Samuel Jackson

The 'genuinely trying to reach agreement' test

In a decision¹ considering the test for determining whether a party has been, and is genuinely, trying to reach an agreement in enterprise bargaining, the Full Bench of the Fair Work Commission (FWC) upheld a decision to grant a protected action ballot order (PABO) despite the applicant union having only attended one bargaining meeting with the employer by the time the application was determined.

Background

Under section 443(1)(b) of the FW Act, before granting a PABO to enable employees to vote on taking protected industrial action, the FWC must be satisfied that the applicant has been, and is, genuinely trying to reach agreement with the employer of the employees who are to be balloted.

This decision was an appeal by the employer, Kuiper Australia (Kuiper), against an earlier decision of the FWC to grant a PABO to the Australian Workers' Union (AWU), after finding that the AWU satisfied the 'genuinely trying' test notwithstanding it had:

• not attended any bargaining meetings with Kuiper at the time the application was filed; and
• only attended one bargaining meeting (on the day of the hearing) by the time the FWC determined the application,

(Earlier Decision).

Decision upheld

On appeal, the Full Bench of the FWC upheld the Earlier Decision to grant the PABO.

In its decision, the FWC suggested that all it is required to do, in assessing whether an applicant is genuinely trying to reach agreement, is 'to make an impressionistic assessment … in light of the particular circumstances of each application'. This test, the FWC said, is consistent with previous authorities that have 'sensibly' refused to establish 'rigid or generally applicable rules'.

Additionally, the FWC observed that it is 'not helpful' to draw a distinction between 'preparatory steps' and 'substantive bargaining' for the purpose of the genuinely trying test, and that preparatory steps are 'not irrelevant' to the consideration. Applying this logic to this case, the FWC emphasised that, although the AWU had only attended one bargaining meeting before applying for a PABO, this had to be considered in circumstances where the AWU had been requesting that Kuiper commence bargaining for months and had already communicated its log of claims to Kuiper (both of which could be regarded as 'preparatory steps' to bargaining).

The FWC also determined that it is appropriate (and relevant) for it to consider evidence of an applicant's overall industrial strategy in determining whether the applicant is genuinely trying to reach an agreement. In this case, the FWO accepted the AWU's evidence about its broader strategy for bargaining, which helped explain why it was seeking to engage in protected industrial action at such an early stage of the bargaining process.

Key takeaways

Although emphasising that it will 'depend on the circumstances' as to whether an applicant will satisfy the 'genuinely trying to reach an agreement' test, the FWC's observations in this case suggest that s443(1)(b) of the FW Act imposes a relatively low threshold for the FWC to be satisfied in order to grant a PABO.

Beefing up wages under 'Same Job, Same Pay'

By: Sayomi Ariyawansa, Laney Facchinetti

Union succeeds in 'Same Job, Same Pay' application at meat processing facility

Labour hire workers at a Queensland meat processing facility will receive a substantial pay rise following a regulated labour hire arrangement order made by the FWC.

Background

Employees of the meat processing facility, Australian Country Choice Production Pty Ltd (ACC), were covered by an enterprise agreement. Labour hire workers at the facility were employed by two separate labour hire providers—one provider paid rates in accordance with the Meat Industry Award 2020, while the other paid above award rates. In both cases, ACC employees were paid at higher rates than the labour hire workers—at a minimum, about 25% higher than the rates paid to the labour hire workers.

The Australasian Meat Industry Employees Union (AMIEU) applied to the FWC for a regulated labour hire arrangement order and led unchallenged evidence that ACC employees and labour hire workers performed the same work. The FWC determined that if the labour hire workers were directly employed by ACC, they would have been covered by the same enterprise agreement that applied to other ACC employees.

Supply of labour and not a provision of services

In considering whether to make the order, the FWC had to be satisfied that the work performed by the labour hire workers was not for the provision of a service, but was instead for the supply of labour. The FWC held that this was the case for reasons including:

• there was no evidence that the labour providers had any involvement in matters relating to the performance of work by the labour hire workers at the meat processing facility;
• ACC supervised and controlled the work of their employees and the labour hire workers—there was no evidence that the labour hire providers directed, supervised or controlled the labour hire workers;
• ACC employees and the labour hire workers used the same systems and operated the same machinery while working on the same meat processing chain; and
• the work undertaken by the labour hire workers was not work of a specialist or professional nature.

The FWC made orders requiring both labour hire providers to pay their labour hire workers in accordance with the ACC enterprise agreement.

Key takeaways

• Labour hire providers may be ordered to pay employees higher wages under a regulated labour hire order. The costs of higher wages are likely to be passed on by labour hire providers to host employers.
• Host employers should consider the impact of a potential regulated labour hire arrangement order when determining the composition of its workforce and engagement of labour hire workers.

An employee checklist for establishing unreasonable hours

By: Anthony Hallal and Olivia Brumm

What can constitute unreasonable additional working hours?

In the recent decision of Doherty v Prospa Advance Pty Ltd (No 2),² the Federal Circuit and Family Court (Court) rejected an employee's request to amend her application to provide better particulars in a breach of maximum hours case brought against her former employer under section 62 of the FW Act. This decision clarifies the material facts and information employees have to outline to support a claim of unreasonable working hours.

Background

Ms Doherty claimed she had been required to work 70 hours per week throughout her employment. She argued (among other things) that this breached the FW Act's prohibition against requesting or requiring fulltime employees to work more than 38 hours per week unless the additional hours are reasonable.

The Court considered two main issues: first, whether Ms Doherty's complaint sufficiently articulated a reasonable cause of action in circumstances where her employer's working hours requirement was not explicit but instead part of a course of conduct; and second, whether her complaint contained the requisite material facts necessary to support her claim.

In respect of the first issue, the Court decided that there is no difference in principle between an employer expressly requiring an employee to work unreasonable additional hours and an employer who requires an employee to perform tasks by certain times that can only be completed through additional hours of work. 

However, Ms Doherty's complaint did not meet the second threshold as she did not outline, in sufficient detail, the workload, tasks or deadlines she was required to complete, which rendered her work hours unreasonable.

The Court outlined a checklist of material facts an employee must provide to support their claim, including that they must be able to identify:

• the work the employer requested the employee to perform;
• the time by, or period within, which the employer required the employee to complete the work;
• the basis for alleging that the employee could not complete the work by the time or within the period the employer required or requested it be performed; and
• the basis for alleging that the employer knew or ought reasonably to have known that the employee could not complete the work within the required time, and that, while having that knowledge, the employer continued to require or request the employee to perform the work within that time.

Key takeaways

This case highlights that claims regarding unreasonable additional hours are not limited to instances where an employer explicitly requires an employee to work additional hours, but can include where an employer requires an employee to perform tasks within tight timeframes which the employee can only do by working excessive additional hours. It also outlines the particular facts that employees would need to prove in order to make out such a claim.