Navigating the New Fair Work Legislation: Understanding Unfair Deactivation, Termination, and Contract Remedies

The Fair Work Commission has released a comprehensive Implementation Report addressing the significant changes brought by the Fair Work Legislation Amendment (Closing Loopholes No. 2) Act 2024.

Navigating the New Fair Work Legislation: Understanding Unfair Deactivation, Termination, and Contract Remedies

This legislation introduces new protections and remedies for regulated workers, including employee-like workers performing digital platform work and regulated road transport contractors, as well as independent contractors.

These changes are poised to have far-reaching impacts on how unfair deactivation, termination, and contract disputes are handled in Australia.

Key Provisions of the Closing Loopholes No. 2 Act

The Closing Loopholes No. 2 Act, which received Royal Assent on 26 February 2024, confers several new functions on the Fair Work Commission. The Act specifically targets unfair deactivation, unfair termination, and unfair contract terms, providing a structured framework for seeking remedies.

Unfair Deactivation and Termination: Who is Protected?

Under the new provisions, regulated workers who believe they have been unfairly deactivated or terminated can apply to the Commission for remedies. Key points include:

Employee-like Workers: These are individuals who perform work through digital labour platforms on a regular basis for at least six months. If deactivated from the platform, they may seek reactivation if the deactivation was deemed unfair and not consistent with the forthcoming Digital Labour Platform Deactivation Code.

Regulated Road Transport Contractors: These contractors must have been working in the road transport industry under a services contract for at least six months. Unfair termination claims can be made if the termination was unfair and not in line with the Road Transport Industry Termination Code.

Unfair Contracts: A New Jurisdiction

The Act introduces a new jurisdiction for addressing unfair contract terms for independent contractors. Contractors earning below the contractor high-income threshold can apply for a remedy if their services contract contains unfair terms. The Commission will consider various factors, such as the relative bargaining power of the parties and whether the terms impose harsh, unjust, or unreasonable requirements.

Remedies and Procedures

The Commission is empowered to order reactivation for unfair deactivation cases and can mandate new contracts or compensation for unfair termination cases. For unfair contract terms, the Commission can amend or set aside the unfair terms.

Procedural aspects include:

Application Fees: Prescribed fees must accompany applications for remedies.

Timelines: Applications must generally be made within 21 days of deactivation or termination.

Case Management: New workflows and case management processes will be established to handle these applications efficiently.

Implementation and Stakeholder Engagement

The Commission is committed to an open and transparent implementation process, with significant stakeholder engagement. Key actions include:

Developing New Forms: User-friendly forms for lodging applications will be created, ensuring simplicity and clarity.

Website Resources: Detailed information on the new jurisdictions will be made available on the Commission's website.

Consultation Opportunities: Stakeholders are invited to provide feedback on the implementation report and draft materials by 19 July 2024.

Conclusion

The Closing Loopholes No. 2 Act marks a pivotal shift in protecting the rights of regulated workers and independent contractors in Australia.

By establishing clear processes and remedies for unfair deactivation, termination, and contract disputes, the Fair Work Commission aims to uphold fairness and transparency in the workplace. As these changes take effect, it is crucial for workers, employers, and advocates to stay informed and engaged with the ongoing implementation process.