What the new Australian workplace laws mean for architecture firms in 2024

In recent months, we’ve seen one of the busiest periods on record for HR in Australia. The Government’s Closing Loopholes legislation and other amendments to workplace laws have introduced a suite of changes, aiming to plug critical gaps across multiple areas of employment law. 

These are important issues that require careful attention from anyone employing teams. That’s why we’ve hosted our ‘HR Ask the Expert’  event series to demystify these changes to employers and simplify HR for architects. We invited Catalina Consultants' managing principal Merilyn Speiser to inform the industry about what the Closing Loopholes changes entail.

Here’s a recap of the highlights of her presentation, outlining everything you need to know. 

Whilst this article does not constitute legal advice, you can use the information to understand your obligations and consider seeking professional legal counsel for tailored guidance.

Right to disconnect laws

Arguably the legislative change that has attracted the most debate is the ‘right to disconnect’ law, which warrants a closer look to dispel a few myths.

The law stipulates that employees may refuse to monitor, read or respond to contact or attempted contact from their employer or a third party (including clients) outside their working hours ‘unless the refusal is unreasonable’. 

Speiser emphasises that the law does not stop employers from contacting an employee outside of work hours. Of course, managers should be mindful of the psychological effect they may have on team members when sending multiple emails late at night. 

However, the key is that employers cannot ‘punish’ employees for not responding to communication outside of work hours. In legal terms, this is known as adverse action – including disciplinary measures, treating the employee differently, excluding them from promotions, pay raises, or training. In other words, how an employer responds to an employee not responding to after-hours communications is critical, says Speiser.

Further, several factors that determine whether the contact after hours is unreasonable – such as the reason for the contact, the seniority of the employee’s role, and the extent to which their remuneration compensates them to remain available outside of normal working hours, she says. 

It’s critical for employers to outline expectations around working hours and contact outside of normal working hours before a job offer is made, and to be transparent about these in employment contracts, Speiser says, to avoid incurring risks around right to disconnect laws. 

Redundancies

The Closing the Loophole legislation has created an important new rule for companies making redundancies, which came into effect from 15th December 2023. Organisations that reduce their headcount to fewer than 15 staff (which is under the small business threshold), due to restructuring caused by insolvency or any other transactional change, cannot avoid paying redundancy entitlements, warns Speiser. 

Even after reducing your workforce below the 15-employee small business threshold, your business could still be regarded as a large organisation if you made redundancies during this process. 

This means you can't reduce your staff count through voluntary administration or by making redundancies to avoid your obligations to pay redundancy entitlements, she says.  

Employees experiencing family violence 

New protections have been added for employees experiencing family or domestic violence, in addition to last year’s introduction of 10 days’ paid leave to support these employees.

The Close the Loopholes legislation changes mean that employers who make a detrimental decision against an employee based on their experience of domestic violence could potentially breach that employee’s workplace rights, known as ‘general protections’ under Australian employment law.

To ensure your firm or studio is compliant with these laws, says Speiser, ensure your workplace policies include family and domestic violence alongside other protected attributes such as gender, sexuality, and age. 

Additionally, it’s wise to train all managers to handle information and decisions regarding employees who may be experiencing family or domestic violence, to prevent bias or adverse action.

Independent contractors

The question of what defines an independent contractor has long been a murky one and a potentially complex one for companies.

It’s an area with several significant loopholes, says Speiser, and whilst these are yet to be fully resolved, businesses can incur huge penalties for intentionally not classifying or engaging their contractors correctly – otherwise known as ‘sham contracting’. 

One type of sham contracting occurs when employers make a false statement to convince an employee to perform their job under the guise of being a contractor, even though their work arrangement qualifies them as an employee.

Another action that can be deemed as sham contracting – and is potentially risky for architecture or design firms – is when an employee is dismissed and then rehired as an independent contractor to perform the same work. This scenario can inadvertently arise sometimes in architecture and design businesses, as employers may have to change how they’re engaging a worker, or the worker might even ask for a change in their employment, says Speiser.

To prevent your business from running afoul of sham contracting rules, she says, the key is to have watertight HR documentation clearly explaining why an employee was rehired as a contractor, with a thorough consultation process involved to support that decision. 

The definition of an ‘employee’ and ‘employment’

Another issue relevant in HR for architects is the new definition of ‘employee’ and ‘employment’ following an amendment to workplace laws in effect from 26 August. 

The terms 'employer' and 'employee' must be determined by assessing the real substance, practical reality and true nature of the working relationship, by considering the 'totality of the relationship and not simply relying on the substance of a contract’, Speiser says. 

What defines an ‘employee’ is still very much based on the hours of work, how the employee is engaged, the tools of their trade, and whether they issue invoices with an ABN – but these elements combined are not guaranteed to cement a definition, she adds. 

How can organisations clear a path through this fog? For those who are engaged as independent contractors or otherwise ‘blur the lines’, says Speiser, it’s wise to closely look at the substance of their relationship with the organisation and ensure it’s well documented on both sides.

What about casual employees?

Casual employees can now request an organisation review their working arrangement six months into their tenure and convert their role to a permanent position. But the onus is on the casual to initiate this review, not the employer, says Speiser.

Organisations still must ensure they consider whether there is an opportunity for casual employees 12 months into their tenure to become permanent employees.

Speiser says most organisations will be already compliant with new legislation that deems casual employees without a ‘firm and advance certainty of work’ are entitled to casual loading.

However, she reminds employers to ensure they include a clause in casual employee contracts to clarify that the engagement is based on the absence of a firm and advance certainty of work. 

Beware of underpayment of staff, including superannuation

With new criminal penalties for wage theft coming into effect from January 2025 that include imprisonment and fines set as multiples of the amount of underpayment, it’s important for employers to be aware of the risks of underpayment of employees, including failure to pay superannuation, Speiser says. 

Intentional wage theft may be less prevalent in the architecture and design sectors. But the increasing penalties for non-compliance give good reason to review award rates and overtime policies and act now to address any issues with the remuneration of staff, Speiser says.

‘We do a lot of work doing boot camps for businesses and particularly where you've got people who are close to the award rates, and maybe there's a little bit of overtime they do, or a lot of overtime they do - that's your worry area.’

An increase to the national minimum wage on the first of July by 3.75% will flow on through industrial awards, says Speiser, so architecture firms should prioritise reviewing pay to ensure they have a buffer zone in place to avoid underpayment. 

‘Psychosocial’ hazards and work health safety

Factors that affect employees’ mental health will need closer attention with the advent of regulations for protecting workers from ‘psychosocial’ hazards from July, says Speiser. 

Employers will be responsible for identifying and managing risks and hazards to workers’ psychological health and safety, referred to as ‘psychosocial’ hazards. These include job demands, poor support, lack of role clarity, poor organisational change management and inadequate reward and recognition. More detailed information about psychosocial hazards is available here. 

It’s sensible to thoroughly review and update your workplace policies and HR strategies to ensure they are effectively addressing the mental health and safety risks associated with workplace challenges, including suicide. Key steps include actively engaging with workers to understand their concerns, training for staff members on mental health issues, and providing access to mental health support and resources.

Additionally, a new criminal offence has been established for industrial manslaughter following a tragic workplace death in Victoria. Speiser notes this aspect of workplace health and safety may seem less pertinent to architecture and design workplaces, but employers should nonetheless be mindful of the safety risks for employees who may be working off-site or visiting clients. 

If in doubt… 

This raft of changes to workplace laws can potentially make work more complex in HR for architecture firms, so it’s important to review policies, contracts and documentation to ensure compliance with relevant legislative changes.

If you’re unsure about the specific implications of changes that apply to your organisation, it’s best to get qualified advice!

Looking for help?

When your business needs skilled contractors for a project, partnering with a reputable architecture and design recruitment specialist can streamline the administrative process and mitigate risks . 

To learn more about how Bespoke Careers can help you recruit architecture and design professionals for contract and temporary roles, contact us today. 

And finally, listen to the full update by Merilyn on our Spotify channel.