The Closing Loopholes No.2 reforms recently became law, which will result in a raft of changes for retailers taking effect in the coming months.

There are two key amendments in the legislation that apply most to retail business owners and managers: the right to disconnect and a new definition for casual employment.

Concerns raised by retailers about the new industrial relations laws include potential repercussions for contacting employees out of hours to work an extra shift or needing to shuffle shifts to keep workers casual.

However, by becoming familiar with the upcoming legislative requirements ahead of time, retailers will be well-equipped to remain compliant and avoid penalties.

The right to disconnect

What has arguably been the biggest point of contention with Closing Loopholes No.2 is the right to disconnect, designed to stop employees being punished for not responding to their employers or managers outside their working hours.

The Fair Work Commission will be able to impose a ‘Stop Order’ on employers that fail to comply with the regulation, with breaches of it subject to civil penalties in line with the Fair Work Act.

Nevertheless, the right to disconnect doesn’t mean retail business owners and managers can’t attempt to contact staff outside their rostered hours – it just means they can’t be expected to reply unless it would be unreasonable for them not to.

An example of this in a retail setting might be if an employee responsible for store security notifications ignored contact from the security company outside their work hours, especially if their lack of response resulted in risk to the business.

Where the right to disconnect may become problematic is if there are differing opinions between employers and employees who don’t understand their respective obligations and rights, which may result in disputes.

In avoiding conflict, retailers should establish agreed methods of contact supported by new policies, including under what circumstances it can occur. This could be done based on consultations with management and staff, with supervisors or employees who may have to contact workers outside of hours given guidance on how and when to do so.

For instance, store managers and workers may agree on using a group chat as the main channel of communication for sharing shifts to be filled. Staff can then respond to pick them up as they desire.

Ultimately, if retailers are engaging in effective and reasonable employee engagement processes that respect workers’ personal time, then the right to disconnect should not require too much change in their daily operations.

While the right to disconnect will apply to employees of large businesses from 26 August 2024, small business employers will have until 26 February 2025 before their employees gain the right.

New definition for casual employment

The other change in the Closing Loopholes No.2 Bill that will impact the highly casualised retail industry from 26 August 2024 is a new definition for casual employment, which will consequently change the process for casual conversion.

Employees will no longer be classed as casual solely by the employment contract they sign – the way someone’s employment operates day-to-day after they start working will be considered too.

If a casual retail worker has a consistent and regular working pattern for an extended period with an expectation of committing to this schedule in advance, they will be able to dispute their employment status with their employer to become permanent.

For unresolved disputes about casual employment, employees will be able to escalate them to the Fair Work Commission for resolution.

It’s important to note that contract changes will not be retrospective or backdated. Casual employees will remain so until an order is made by the Fair Work Commission granting them permanent entitlements.

Casuals can also be changed to permanent when they accept an offer of permanent employment or under the terms of an award or enterprise agreement.

In preparing for this new legislation to come into effect, retailers should reassess their business’ staffing needs.

There may be a recurring work pattern among some employees for whom a permanent contract would make more sense, or perhaps a better mix of permanent and casual employees is needed to ensure both flexibility and stability in the workforce.

It’s understandable why retail business owners and employers have voiced concerns about the new industrial relations laws that they will soon be subject to – but by taking the time to understand their obligations in advance, including through seeking advice from HR experts, retailers don’t need to panic about the Closing Loopholes No.2 changes.

Ryan Price is head of content and training at Employsure.