The new financial year has introduced several important changes that employers should keep abreast of. For our client’s convenience, we have summarised the changes made in the employment law field from 1 July 2024 below.
National Minimum Wage
On 3 June 2024, the Fair Work Commission announced, following their Annual Wage Review, an increase of 3.75% to minimum wages. In line with this decision, the National Minimum Wage (NMW) is now $24.10 per hour.
The NMW applies to ordinary hours for an adult employee in the national system that is not covered by an enterprise agreement or modern award. Employees that are employed under an enterprise agreement or modern award are to be paid in line with the applicable rates set out in their relevant enterprise agreement or modern award. The NMW does not apply to these employees.
Superannuation
From 1 July 2024, the superannuation rate has increased from 11% to 11.5%.
What does this mean for employers?
Employers need to ensure that their employee remuneration meets the new minimums. If employers fail to review their employee remuneration, they risk underpaying their employees and as a result they leave themselves exposed to severe criminal and financial penalties that are set to take effect on 1 January 2025.
Employers should prepare for the wage increase by:
- Reviewing the terms of non-award covered employees and preparing for any variations that will be required, as from 1 July 2024 they will be entitled to the new NMW
- Reviewing the terms of any awards that apply to their employees as the pay rates contained in each may increase from 1 July 2024
- Reviewing any annualised salary agreements to ensure employees are still better off, overall, in light of these increases
- If enterprise agreements apply, ensure that the base rates contained in these agreements are consistent with the new minimum rates specified in the awards.
If you’re an employer seeking to safeguard your company, or an individual enforcing your rights, it’s important to seek the expert advice of an employment law specialist, such as a member of our Employment Law Team at Tonkin Drysdale Partners.
Unfair Dismissal – High Income Threshold
From 1 July 2024 onwards, an employee seeking to make an unfair dismissal claim will need to establish that they fall below the high-income threshold of $175,000.00. It is important to note that the threshold does not just relate to salary and/or wage payments, but also includes the agreed monetary value of non-monetary benefits, such as the private usage of a company car. Compensation for successful unfair dismissal claims is now capped at $87,500.00.
The Right to Disconnect
The much debated right to disconnect laws will commence on 26 August 2024. Initially, the right to disconnect laws will only apply to non-small business employers. The right to disconnect laws will apply to small business employers from 26 August 2025.
From 26 August 2024, all awards must include a ‘right to disconnect’ term.
The right to disconnect laws will fall under the general provisions scope of the Fair Work Act 2009 (Cth).
Protected employees will have the right to refuse to monitor, read or respond to contact or attempted contact outside of work hours, from their employer or third parties, i.e. clients. In exercising their right to disconnect, an employer must not take adverse action against an employee.
Casual Employment and Independent Contractor Changes
It is not uncommon for disputes in the workplace to arise regarding how a worker is defined.
From 26 August 2024, the following applies:
Casuals
To be considered a casual, the Fair Work Act 2009 (Cth) requires that:
- There is no firm advance commitment to continuing indefinite work for the worker.
- The worker is entitled to receive a casual loading or a specific casual pay rate.
These changes will not affect employees who were employed as casuals before 26 August 2024.
A new casual conversion process will also be introduced. After a casual has been employed for at least 6 months, they are able to inform the employer that it is their intention to change to permanent employment. The same applies for small business casual employees, however they need to have been employed for at least 12 months.
In some circumstances, a casual conversion request may not be permitted. These include: if the employee and employer are currently engaged in a dispute regarding their casual conversion; or in the last 6 months the employer has refused a casual conversion request; or in the last 6 months a dispute about casual conversion has been resolved.
If a permitted casual conversion request is made by an employee, the employer is required to: commence a consultation process with the employee, in which the employee is informed of any changes that may occur as a result of the employee becoming a permanent employee, and; respond within 21 days of the conversion request being made.
Independent Contractors
To distinguish if a worker is an employee or independent contractor, you must consider:
- The nature, practical reality and substance of the working relationship;
- All aspects of the working relationship.
If you are an independent contractor that has signed a contract that you feel may be unfair, you may be able to apply to the Fair Work Commission, who will:
- Determine if the term or clause in dispute is unfair,
- Make an order to set aside, amend or vary all or part of the contract.
The new laws will only apply where there is a ‘constitutional connection’.
Such protection is only available to independent contractors who earn less than the ‘contractor high income threshold.’ As at the date of this article, the Fair Work Commission has not yet established the threshold amount.
In circumstances where a contractor earns more than the ‘contractor high income threshold,’ the contractor may be able to apply to the Court if they feel their contract contains any unfair terms.
Contact Us!
Should you have any queries in relation to how the above will affect you or your employees, or if you wish to discuss any other employment law matters, please do not hesitate to contact the Employment Law Team at Tonkin Drysdale Partners.
