As we ease into the New Year, we reflect on key employment law trends and learnings from 2024, and consider what lies ahead in 2025 – the Year of the Wood Snake.
It has been a transformative period in workplace relations over the past three years as Australia’s employment regulatory landscape continues to evolve. We provide a snapshot of the key legislative changes at the end of this Alert .
Reflections and learnings from 2024
In 2024, we saw a continuing demand for flexibility and hybrid work arrangements, enhanced protections for diverse workforces and greater focus on mental health support in the modern workplace.
Workers are becoming more informed about their rights and company policies, and increasingly, they are actively taking steps to enforce those rights including legal action. This is reflected in the following 3 trends from 2024:
1. Surge in employment-related claims
The Fair Work Commission released some telling statistics for the 2023-2024 year in their annual ‘Access to Justice’ report. The Commission reported an increase of 27% in applications lodged, and the rate of lodgements during this period was the highest ever received by the Commission since the inception of the Fair Work Act 2009 (Cth). This reflects our observation that matters for our clients which in previous years might have resolved at the workplace level are progressing to the Commission and the Federal Court.
Half of the Commission’s caseload was made up of unfair dismissal applications (37%) together with general protections involving dismissal applications (14%).
2. Rise of psychological injury claims
According to Safe Work Australia’s latest report, claims for psychological injury at work have risen by 36.9 per cent since 2017.
Out of approximately 10,000 serious psychological injury claims filed between 2021 and 2022, the highest proportion were attributable to:
- harassment and bullying at work (27.5%);
- excessive work pressure (25.2%); and
- exposure to workplace or occupational violence (16.4%).
One of the key findings from the report was that exposure to psychosocial hazards places a worker at a greater risk of developing a work-related psychological injury and leads to poorer mental health outcomes.
We are seeing a growing trend of psychological injury claims arising in the context of organisational restructures, change management or performance improvement process. Each of these processes can give rise to a range of psychosocial hazards and risks that need to be viewed collectively rather than in isolation.
The changing dynamics of the modern workplace where the boundaries of work and personal life are becoming increasingly blurred provides an added layer of complexity for organisations seeking to implement measures to prevent psychosocial hazards at work.
3. Increase in workplace complaints
In recent years, there has been a noticeable increase in workplace complaints, particularly involving allegations of bullying, harassment and discrimination as well as corruption and fraud.
There are a range of factors contributing to this trend, including:
- the post-COVID hybrid working model has significantly changed workforce management, and created new challenges for both employers and workers;
- following the global #MeToo movement and recent legislative reforms, we have seen a cultural shift in the Australian media, workplaces and wider communities towards a no tolerance policy to sexual harassment and sex based harassment;
- employees’ personal issues (including health concerns, family challenges and financial pressures) are manifesting themselves in the workplace, which can exacerbate work-related stress and interpersonal conflicts at work; and
- regular training on behavioural expectations in the workplace has led to increased awareness by staff of their rights and responsibilities as well as greater willingness to report behavioural or conduct concerns and to participate in workplace investigations.
Improved staff awareness and education have also given rise to a growing trend of employees challenging the findings of workplace investigations and disputing the fairness of investigative processes.
What can we expect for 2025?
In 2025, we expect unfair dismissal and general protections claims to remain the primary legal avenues for employees as the Commission provides a cost-effective and accessible jurisdiction for them to seek redress. With economic challenges and financial pressures facing Australian businesses, the upward trend of employment-related claims will continue. Ongoing review and improvement of your organisation’s change management and performance management processes will help minimise exposure to these types of claims.
We expect psychological injury claims to continue to rise at a rate that well outpaces physical injury claims. Psychosocial hazards in the workplace and claims involving mental health issues will remain challenging for employers to manage and prevent effectively. While implementing a psychosocial hazard policy is good starting point, employers must also provide adequate training to support the policy (see Samad v Phosphate Resources). These matters can be highly complex to navigate and require employers to take a flexible and multifaceted approach.
The trend towards greater staff awareness of their workplace rights and legal protections means that employers need to tailor the investigation process for each employee grievance or complaint while maintaining compliance with any applicable policies, and carefully consider the nature and seriousness of the allegations, the complexity of the issues and potential witnesses.
Our Workplace Relations and Employment Safety team are ready to help you with your legal needs. We have particular experience in working with organisations to manage employee claims, implement preventative measures, and conduct privileged workplace investigations while ensuring procedural fairness. Please contact any of our team if you need any advice or have questions about this Alert.
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Annexure: Snapshot of key legislative changes
Change
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Commencement date
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New protected attributes
New protected attributes under the Fair Work Act, which probits employers from taking adverse action against current or prospective employees:
- Breastfeeding;
- Gender identity; and
- Intersex status.
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7 December 2022
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Prohibition of sexual harassment in connection with work
The jurisdiction of the Fair Work Commission has been expanded to deal with sexual harassment claims and to make orders to stop sexual harassment.
The scope of these protections extends to:
- different types of workers including employees, contractors, work experience students and volunteers;
- prospective workers such as job applicants; and
- people conducting a business or undertaking.
Under these new provisions, an individual involved in the contravention can be personally liable, unless they can prove all reasonable steps were taken to prevent the sexual harassment.
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6 March 2023
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Unpaid parental leave changes
New requirements in relation to how employers respond to request for extending unpaid parental leave. For example, an employer is required to respond to an employee’s extension request in writing with 21 days.
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6 June 2023
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Broader access to flexible working arrangements
The right to request flexible working arrangements are now extended to the following categories of employees:
- employees, or a member of their immediate family or household, experiencing family and domestic violence; and
- employees who are pregnant.
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6 June 2023
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Protection for Migrant workers
Clarifying protections for migrant workers - that is, these workers have the same rights and entitlements under workplace laws as other employees, regardless of their migration status.
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1 July 2023
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Interaction between enterprise agreements and workplace determinations
Changes to the ways the Fair Work Commission can deal with bargaining disputes. For example, the Commission can make a workplace determination that sets terms and conditions of employment which replace an enterprise agreement in some circumstances.
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1 July 2023
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Unpaid Parental Leave
Changes to rules relating to unpaid parental leave, including greater flexibility for employees to take this leave entitlement.
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1 July 2023
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New rules for fixed term contracts
Fixed term or maximum term contracts must not exceed a term of two years, and cannot provide an option to extend or renew more than once. This time limitation applies to:
- extension or renewal of contracts that would result in the employment period exceeding two years; and
- consecutive contract arrangements that would result in the total period of employment being more than two years.
There are certain limited exceptions to this rule.
Employers are also required to provide all employees engaged under a new fixed term or maximum term contract a copy of the Fixed Term Contract Information Statement when the employee enters, or as soon as possible after entering, that contract.
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6 December 2023
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Closing the labour hire loophole
New powers for the Fair Work Commission to make ‘same job same pay’ orders for labour hire workers, preventing companies from underpaying labour hire workers. The changes enable employees, unions and host employees to apply to the Commission for an order (Regulated Labour Hire Order Arrangement Orders) that labour hire employees must be paid at least what they would receive under the host company’s enterprise agreement as a direct employee.
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15 December 2023
However, orders could only be made under this regime from 1 November 2024.
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New protections under the General Protections regime
People experiencing family and domestic violence are now protected from discrimination and adverse action.
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15 December 2023
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New workplace delegates’ protections
Workplace delegates have additional rights and powers when carrying out their role. For example, an employer must not unreasonably fail or refuse to deal with the workplace delegate.
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15 December 2023
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Closing the gap on redundancy payments
New protection for redundancy payments for employees, which ensures that they do not lose their right to redundancy pay even if their employer becomes a "small business" during insolvency or liquidation and claims the small business redundancy exemption.
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15 December 2023
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Employee authorised deductions
New rules that allow employee to authorise their employers to make salary deductions that are recurring, and for specific amounts or amounts that vary from time to time.
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30 December 2023
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Superannuation and the National Employment Standards
Employee entitlement to superannuation now forms part of the National Employment Standards, which allows employees to take legal action under the Fair Work Act to recover unpaid or underpaid superannuation.
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1 January 2024
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Causal employees in the black coal mining industry
Changes to rules relating to portable long service leave entitlements that apply to casual employees working in the black coal mining industry.
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1 January 2024
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Increased of civil penalties
New civil remedy provisions, including relating to the National Employment Standards, modern awards, enterprise agreements, record-keeping and document production, sham arrangements, and infringement and compliance notices (only apply to employers who are not individuals or small business employers).
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27 February 2024
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Changes to Federal Work Health and Safety laws
Introduction of a new criminal offence of industrial manslaughter under the Federal Work Health and Safety Act 2011 (Cth).
Maximum penalties apply including up to 25 years imprisonment for individuals.
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1 July 2024
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New contractor high income threshold
This regulation prescribes the contractor high income threshold to be eligible to apply for an unfair deactivation, unfair termination or unfair contract term remedy.
The current threshold is $175,000 per annum and is subject to change annually on 1 July.
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1 July 2024
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Casual employment changes
A new statutory definition of ‘casual employee’, which reflects the traditional common law approach that looks at the substance of the relationship in all of the circumstances
In addition, introduction of new casual conversion rules, which provide two pathways for casual employees to convert to permanent employment, and provide greater ability for employees to choose their employment status.
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26 August 2024
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New statutory definitions for the contractor/employee dichotomy
New statutory definitions of “employee” and “employer”, which reflect the traditional common law ‘multi-factorial’ and ‘totality of relationship’ tests for determining whether a worker is an employee or independent contractor. The focus is on the substance of the relationship and not only the terms of the contract.
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26 August 2024
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New protections for gig economy and road transport workers
The Fair Work Commission have been given new powers to set minimum standards for “employee-like” workers performing work for a digital labour platform or in the road transport industry by making:
- minimum standards orders, which are legally binding, or
- minimum standards guidelines, which are non-binding.
The Commission will also have the power to deal with disputes relating to:
- unfair deactivation of an employee-like worker from a digital labour platform
- unfair termination of a road transport contractor’s contract by a road transport business, in circumstances where the worker’s earnings do not exceed the contractor high income threshold.
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26 August 2024
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Independent contractors new “opt-out” regime
Independent contractors who earn above the high-income threshold may ‘opt-out’ of the new statutory definition of employee – this essentially allows the worker to choose to be treated as an independent contractor per the terms of the contract.
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26 August 2024
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New right to disconnect
Introduction of a new ‘workplace right’ for eligible employees to refuse, monitor, read or respond to contact that is outside their working hours, unless the refusal is unreasonable.
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26 August 2024
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Unfair contract terms
Expanded jurisdiction of the Fair Work Commission to deal with unfair contracts disputes for independent contractors who earn below the contractor high income threshold.
The Fair Work Commission has the power to set aside, amend or vary all or part of a services contract, in circumstances where it is deemed to contain unfair terms.
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26 August 2024
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Introduction of industrial manslaughter in NSW
A new criminal offence for persons conducting business or undertaking and officers. The offence involves engaging in conduct that constitutes a failure to comply with their health and safety duty and causes a death of a worker to whom a duty is owed. There is no limitation period for proceedings to be brought under these provisions.
Maximum penalties of $20 million for a body corporate and 25 years imprisonment for an individual.
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16 September 2024
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Criminalisation of wage theft
Making of a criminal offence for an employer to intentionally underpay their employees.
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1 January 2025
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