There’s no denying that 2023 and 2024 has been a tough time for small businesses. We’ve seen an unusually tight labour market and an ever increasing cost of doing business. All at a time where consumers are facing a cost of living crisis and watching their spending.

Small businesses are feeling the pressure on all fronts – how to keep prices competitive, while still trying to cover costs. Adding to such a difficult environment is what feels like an ever changing employment law framework. It’s easy to delay getting across the changes, but with increasing risks, small business owners need to invest in keeping up to speed.

Let’s take a look at relevant recent and upcoming changes for small businesses, regardless of your industry.

Wage and Superannuation Increase – July 2024
Like clockwork, the Fair Work Commission has passed an increase to the minimum and Award wages. This year, a 3.75% increase takes effect on the first full pay period on/after 01 July 2024. As has felt like the norm for the last few years, the Superannuation Guarantee also increased by 0.5% to 12% (effective 01 July 2024).

Both increases feel rather modest, but as many small business owners know, it’s tough keeping up with the endless list of increased costs. Especially when passing this onto consumers is fraught with risk, all thanks to the cost of living crisis.

Casual Employment – 26 August 2024
Even though we specialise in HR for the modern world, I have to say that the never-ending changes to casual employment are confusing. Why is it so difficult to settle on a position and stick with it?

My thoughts aside, from 26 August 2024, casual employment will yet again have some changes. Let’s take a look at the key items to remember:

1. There is a new process for casuals to request conversion to permanent employment.
2. If the employee is eligible for conversion, they can “notify” their employer of their intention to change to permanent employment. If this occurs, the employer must:
   • Consult with the employee about the change.
   • Respond in writing within 21 days outlining if the notification is accepted or refused.
   • Only refuse the request if the employee still meets the new definition of casual, or if there are reasonable business grounds for refusal.
3. The Fair Work Commission has the authority to help resolve disputes. This includes the ability to order employers to convert casual employees to permanent if certain criteria have been met.

Of course, when accepting or refusing requests, the employer also needs to include specific information in writing for the employee – reach out to wattsnext for further advice if needed.

Independent Contractors – 26 August 2024
As you may be aware, high court decisions essentially made a “Contract is King” rule when it comes to independent contractors. Essentially this meant anyone could be engaged as an independent contractor if:

• There was a comprehensive written contract; and
• The contract wasn’t a “Sham” contract (e.g., one entered into to avoid minimum pay obligations).

There were broad concerns that this could lead to employees being engaged as contractors and undercutting of employment protections/entitlements. As a result, the Fair Work Act will soon include a definition of employment. This aims to overturn the above principle and reimplement the ‘multi-factorial test.’ This test looks at a few features to determine if someone is an employee or a contractor.

From 26 August 2024, federal courts will once again be able to use this test and rule that a contractor was/is an employee. This can open up claims for entitlements (e.g., leave) and dismissal protections (e.g., unfair dismissal) for unsuspecting businesses. The changes do come with some flexibility for high income earners, but definitely seek advice if you have or will have independent contractors.

Right to Disconnect – 26 August 2024 (26 August 2025 for small businesses)
The much talked about Right to Disconnect is set to come into place for businesses with more than 15 employees in August this year.

In my view the scare campaign against this right has been much too high for what we feel the impact in reality will be. The right effectively means that employees have the right to refuse contact outside of their working hours, unless their refusal is unreasonable. When considering if contact is unreasonable, the following can be considered:

• The reason for contact.
• Whether the employee is compensated for:
  • Being available in the period when contact was made; or
  • Working additional hours outside their ordinary hours of work.
• The nature of the employee’s role and their level of responsibilities.
• The employee’s personal circumstances (including family or caring responsibilities).

If anything, this workplace right may help employers develop more structure and responsibility around work outside of usual hours. Our advice to prepare for the changes includes:

• Develop policies that clearly explain what type of contact may occur outside of usual work hours, and why.
• Outline any responsibilities employees have if they are required to be available for contact outside of their usual working hours.
• Ensure employees are compensated for this. I’ve generally recommended it’s best to have something outside of an all-inclusive salary for lower level employees (e.g., provide an allowance).

Of course, we do expect some teething issues and up until when the currently being drafted modern award clause will be tested, the real implications of this change won’t be clear.

How can I learn more about employment law changes?
It can be difficult to keep up with changes, let alone understand them. Thankfully small business owners do have access to a range of free resources. Check out the below links for further details of past and upcoming changes:

• The Fair Work Ombudsman.
• The Fair Work Commission.

Of course, nothing really beats getting an expert in to learn your business and partner with you. Having a team of HR Consultants not only reduces the stress of the unknown, but it also helps you build a better business. Consider reaching out the team at wattsnext for a commercial minded HR Team to help you focus on what you do best.