Recent developments in employment law

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

New guidance from the FWO on compliance, enforcement and criminalisation of wage theft

By Tarsha Gavin, Lawrence Mai, Grace Strik

An overview of the new guidance

In January, the Fair Work Ombudsman (FWO) released an update to its Compliance and Enforcement Policy, as well as its Guide to Cooperation Agreements, relevant for employers navigating the new criminal wage theft offence.

FWO sets out its focus on compliance and enforcement for 2025

The updated Compliance and Enforcement Policy (Policy) outlines how the FWO intends to exercise its compliance and enforcement functions under the Fair Work Act 2009 (Cth) (FW Act) and Fair Work Regulations 2009 (Cth).

In particular, the Policy indicates that the FWO's regulatory model comprises of the following three main responses to allegations or instances of non-compliance:

1. Encouraging voluntary compliance by providing information, education and advice to facilitate cooperation between the parties involved as part of the FWO's commitment to promoting productive, cooperative and harmonious workplaces.
2. Guiding compliance where necessary by requiring employers to undertake certain specified actions and demonstrate compliance with workplace laws through, for example, compliance notices or contravention letters.
3. Enforcing the law when it is in the public interest, which involves having regard to the nature or impact of an employer's suspected non-compliant behaviour, the degree of cooperation with an FWO-initiated investigation and whether civil proceedings would help clarify workplace laws. Criminal enforcement action will generally be reserved for serious contraventions of the FW Act.

The Policy also indicates that the FWO will be publishing a Remediation Guide later this year, which will set out the FWO's views on best-practice for large-scale remediation programs and further insights into the FWO's approach to assessing compliance.

The FWO's guide for employers seeking to enter into cooperation agreements

The FWO has also released its Guide to Cooperation Agreements (Guide) to align with the commencement of the new federal wage theft laws.

A key component of the new wage theft regime is the opportunity for employers to enter into a cooperation agreement with the FWO if they suspect they may be criminally liable. This is intended to be a safe harbour to protect employers from criminal prosecution under the new criminal offence provisions. While a cooperation agreement is in place, the FWO cannot refer the conduct subject to the agreement for criminal prosecution. Although civil proceedings may still be brought against the employer, the presence of a cooperation agreement may be a mitigating factor when, for example, determining civil penalties.

While the standard expiry date for a cooperation agreement will be six years from the end of the conduct that is the subject of the agreement, it may be terminated by the FWO at any time if it believes there has been a breach of a term of the agreement, or false or misleading information has been provided by the employer. Once a cooperation agreement has been terminated by the FWO, it may then decide to refer the matter for criminal prosecution. Cooperation agreements may otherwise be withdrawn by the employer or varied between the parties in limited circumstances.

It is anticipated that all cooperation agreements will contain a combination of standard terms and additional terms depending on the circumstances of each matter. The Guide indicates that the standard terms are likely to address the following matters (among others):

• acknowledgements that are given by the employer in relation to the contravening conduct
• an explanation of the conduct that is the subject of the cooperation agreement
• obligations on the employer relating to remediation programs, as well as employee consultation mechanisms, independent audits and mandatory training on FW Act compliance
• corporate governance measures, including regular reports to its board of directors on FW Act compliance and breaches, and reviews of internal processes
• provision of regular updates and letters of assurance on compliance actions for a specified period.

For more information regarding the criminalisation of wage theft, see our previous Insights on Strengthening employee protections: new wage theft laws in 2025 and Wage Theft

Full Bench decision keeps 'labour hire loophole' closed

By Anthony Hallal, Samuel Jackson

Same job, same pay order approved by the Fair Work Commission

In an application for a regulated labour hire arrangement (RLHA) order at a mine in NSW, a Full Bench of the Fair Work Commission (FWC) ruled against a labour hire company's attempt to prevent same job, same pay orders from applying to workers on roster arrangements that were not permitted by the host employment instrument.¹

Key takeaways

• The Commission's decision in this matter highlights the breadth of the same job, same pay laws, and confirms that attempts to limit the reach of the laws will be closely examined.
• The decision also clarifies that the same job, same pay provisions cannot be circumvented simply by varying rostering arrangements of potentially impacted employees.

The decision

On 11 June 2024, the Mining and Energy Union (MEU) filed an application for an RLHA order under section 306E of the Fair Work Act 2009 (Cth) (FW Act) in respect of labour hire workers employed by Workpac Mining Pty Ltd (WorkPac) who perform work for Rix's Creek Pty Ltd (Rix's Creek). The host employment instrument was the Rix’s Creek Mine Enterprise Agreement 2021 (as varied in 2023) (Agreement).

The MEU's proposed RLHA order covered all WorkPac employees who perform work at the Rix's Creek Mine and who would, if employed by Rix's Creek, be covered by the Agreement. WorkPac opposed the MEU's proposed order on the basis that it would extend, or operate, to cover employees who work roster arrangements that are not permitted for employees covered by the Agreement. Specifically, WorkPac opposed the MEU's application on two grounds:

1. while accepting that the FWC could make an RLHA order covering labour hire workers performing weekday shifts under the Agreement, WorkPac argued the FWC did not have jurisdiction to make an RLHA order that extends, or operates, to cover workers who work roster arrangements not permitted under the Agreement; and
2. WorkPac argued the orders sought would not be fair and reasonable within the meaning of s306E(2) of the FW Act.

The FWC rejected each of WorkPac's grounds.

Given the Agreement covered all production employees of Rix's Creek, the FWC observed that the Agreement would apply to all employees supplied by WorkPac to perform production work if those employees were directly employed by Rix's Creek to undertake the same kind of work. The Full Bench of the FWC decided this was 'plainly the case irrespective of the pattern of hours or roster arrangement worked by the WorkPac employee', and that 'restrictions on rostering imposed by [the Agreement] do not alter the coverage of the Agreement but regulate the rostering arrangements that apply to all employees who are covered by the Agreement'.

The Full Bench also decided that WorkPac's proposed interpretation of s306E of the FW Act would 'substantially undermine' the object and effectiveness of the same job, same pay provisions because it would mean the operation of the entire scheme could be avoided if labour hire employees were engaged on a basis that differs marginally from the hours of work or rostering arrangements permitted under the host employment instrument. Finally, the Full Bench concluded there was nothing to suggest it would be unfair and unreasonable to make the MEU's proposed orders.

FWC approves supported bargaining variation in early childhood and care sector

By Sarah Lunny, Olivia Brumm

First variation to a supported bargaining agreement

The FWC has approved the first variation to a supported bargaining agreement, adding 33 new employers to an agreement that already covered 60 employers in the early childhood and care sector.

Key takeaways

• This decision provides a roadmap for businesses considering joining an existing supported bargaining agreement by providing important guidance on how the FWC will assess a variation application.
• Employers considering joining a supported bargaining agreement should be aware of the procedural steps required, as well as the strategic implications of multi-employer bargaining.

Background

The initial supported bargaining agreement, the Early Childhood Education and Care Multi-Employer Agreement 2024-2026 (ECEC Agreement), was approved by the Full Bench of the FWC in December 2024. The ECEC Agreement covered 60 employers and approximately 12,000 employees, as well as the United Workers’ Union, Australian Education Union and the Independent Education Union of Australia.

The new employers applied under section 216AA of the FW Act to vary the ECEC Agreement to cover them. This was in part driven by the new employers seeking access to the Early Childhood Education and Care Worker Retention Payment (EWRP), a federally funded initiative designed to boost wages in the sector.

The employees of each of the new employers had approved of the employers making the variation application by either a majority or unanimous vote.

The decision

The FWC emphasised that it must approve a variation application if it is satisfied it would have been required to make a supported bargaining authorisation in the circumstances (subject to satisfaction of any other requirements and exceptions). This involves the FWC considering:

• industry pay and conditions, particularly whether low wages prevail in the sector;
• common interests among employers, such as shared regulatory requirements or business operations; and
• any other relevant factors the FWC deems appropriate.

The FWC was comfortable that the circumstances of the new employers and their employees were consistent with those found by the Full Bench of the FWC in originally approving the ECEC Agreement. On that basis, the FWC was readily satisfied that these considerations had been met in respect of the variation application.

The FWC also considered the issue of whether employees genuinely understood the terms and effects of joining the ECEC Agreement, adopting a similar analysis to s188 of the FW Act and referring to the FWC's Statement of Principles on Genuine Agreement. Acknowledging that the majority of employees had voted in favour of the variation application (amongst other things), the FWC was satisfied of this requirement.

Another important matter the FWC took into consideration was that 'appropriate assurances' (including formal undertakings and other commitments) had been given by each of the new employers to apply for the EWRP before the variations would take effect, which was a consideration by the Full Bench of the FWC in originally approving the ECEC Agreement.

Finally, the FWC considered whether there were any serious public interest grounds for not approving the variation application, finding there were no such grounds weighing against approval.

Suppression order takes network's stoush off air

By Tarsha Gavin, Eden Sweeney, Laney Facchincetti

Five-year long suppression orders granted in the interest of encouraging settlements

In the recent decision² of the Federal Court of Australia, five-year suppression orders were granted over materials filed in a general protections claim made by a former employee of Seven Network (Operations) Ltd.

Key takeaways

• When deciding whether to grant suppression orders in employment cases, courts may consider whether the proposed suppression orders serve the public interest of having cases being settled out of court.
• Any orders granted will likely depend on how much information is already in the public domain. Employers seeking to ensure that allegations raised in disputes with employees remain confidential by way of a suppression order should therefore move quickly to make such an application before the details of the matter enter the public domain.

Background

In October 2024, the court granted interim suppression orders over relevant material filed in the employee's general protections claim.³ The court considered the interim orders to be in the interests of the administration of justice, as maintaining confidentiality over the relevant material would give the scheduled mediation between the parties the best chance of success, and it was in the interests of justice that the matter settle during this mediation.

The parties subsequently came to a settlement agreement during the mediation, conditional on the granting of suppression orders over certain materials filed in the court during the matter and a further application for suppression and non-publication orders was made to the court.

The decision

In this proceeding, the court contemplated whether confidentiality was necessary to give effect to the settlement. It determined that:

• the details of the allegations made by the employee in the matter were yet to enter the public domain and so the proposed suppression orders could enable the maintenance of confidentiality over the material, as contemplated by the settlement agreement;
• the fact that the nature of the allegations was clearly connected to the fact of the settlement was also relevant; and
• in these circumstances, the suppression and non-publication orders were necessary to facilitate the terms of the settlement.

The court also considered the broader public interest of litigious matters being settled between the parties. It reasoned that suppression orders are an incentive for respondents to settle a matter, noting that respondents may be less inclined to agree to a settlement without assurance that potentially negative details in a statement of claim would remain confidential.

To both give effect to the settlement agreement between the parties in this case and encourage respondents to settle in future matters, the court granted the requested suppression orders. In determining the length of the orders, the court suggested that the details of the allegations were unlikely to remain 'topical' after five years. For this reason, the suppression order will last five years, but the parties are able to apply for a further extension if required.

Full Bench grants extension for alleged disability discrimination claim

By Tegan Ayling, Jessica Hodgson, Grace Strik

The Full Bench of the Fair Work Commission has agreed to extend time for a general protections application, accepting that a medical diagnosis was critical to formulate the claim and so justified the delay.⁴

Key takeaway

General protections claims can be complex and this decision highlights that employers should always exercise caution when terminating the employment of an employee for poor performance where there is a possibility the manifestations of an employee's disability are impacting their work performance.

Background

Mr Kurtev's employment with KCB Australia (KCB) was allegedly terminated for poor performance. Leading up to the termination, Mr Kurtev experienced a significant decline in his health, but did not know the reason until he was diagnosed with Parkinson's disease nearly a month after the dismissal.

Following his diagnosis, Mr Kurtev filed a general protections application 12 days late. He alleged KCB dismissed him because of his physical or mental disability, and specifically that the reasons for his dismissal 'perfectly match the symptoms of Parkinson's disease', including slow performance and learning difficulties. Initially, Mr Kurtev was not granted an extension of time as his circumstances were not considered exceptional on the basis that he had not suffered significant cognitive impairment affecting his ability to prepare the application and he had prioritised seeking medical treatment.

Decision

On appeal, the Full Bench granted the extension of time, recognising that Mr Kurtev's need to understand if he had a disability before forming his claim amounted to exceptional circumstances.

The Full Bench accepted that Mr Kurtev's reason for the delay was that he required a diagnosis so he could properly formulate his claim. It was not possible to articulate a claim that he had been dismissed because of a disability until he had been diagnosed and knew whether his symptoms—which he says KCB viewed as poor performance—were manifestations of his diagnosed disability.

The Full Bench noted in its decision that an allegation that a person has been dismissed because of 'the features of a disability' may amount to discrimination for the purposes of the FW Act. However, this raises complex issues about whether a distinction can be drawn between a disability and its manifestations. The High Court previously considered that question for the purposes of the Disability Discrimination Act 1992 (Cth),⁵ after which that legislation was amended to clarify that symptoms or manifestations of a disability are part of the disability.⁶ In the context of the FW Act, the Federal Court has accepted that a disability can include its manifestations while also recognising there is a difference between the manifestations of a disability and its consequences.⁷

This decision opens the door for the FWC to further consider the meaning of 'disability' for the purposes of the FW Act, as well as the question of knowledge of the decision-maker given KCB could not have known of Mr Kurtev's disability when it decided to terminate his employment given he had not yet been diagnosed.