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Sky Update – January 2023


A number of notable amendments to the Fair Work Act have been made and are coming into effect concerning:

  • Pay secrecy;
  • Job advertisements;
  • Flexible work arrangements; and
  • Fixed term contracts.

Pay Secrecy

The pay secrecy changes came into effect on the 7th of December 2022 and create a new workplace right to share information about pay and employment conditions (eg hours of work).

Additionally, the right to ask fellow employees about their pay and conditions has been created.  However, we do note that employees are in no way obligated to share information when such a request is made.

Employers that include pay secrecy clauses in employment agreements and internal policies will need to review and revise those documents to comply with the new workplace rights.

Job Advertisements

From the 7th of January 2023, job advertisements cannot include pay rates that would breach the Fair Work Act or an industrial instrument (eg Award).

This change relates to new job advertisements and also to existing advertisements that continue to run beyond the 7th of January.

The Fair Work Ombudsman has power to initiate court proceedings for alleged breaches of these provisions.

Flexible Work Arrangements

From the 6th of June 2023, more employees will be entitled to request flexible work arrangements.

Those being:

  • Employees (or a member of their immediate family/household) experiencing family & domestic violence; and
  • Employees who are pregnant.

There will also be new obligations that must be met before an employer may refuse a flexible work request.  These obligations include to:

  • discuss the request with the employee;
  • make a genuine effort to find alternative arrangements to accommodate the employee’s circumstances;
  • consider the consequences of refusal for the employee; and
  • provide a written response that includes:
  1. an explanation of the reasonable business grounds for refusing the request and how these grounds apply to the request;
  2. other changes the employer is willing to make that would accommodate the employee’s circumstances or that says there aren’t any changes; and
  3. information about referring a dispute to the Fair Work Commission.

Fixed Term Contracts

From 6 December 2023, employers will no longer be able to employ a person under a fixed term contract that:

  • is for two or more years (incl. extensions); or
  • may be extended more than once, or
  • is a new contract:
    • that is for the same or a substantially similar role as previous contracts; and
    • with substantial continuity of employment between the end of the previous contract and the new contract, and either:
      • the total period of the contracts is two or more years; or
      • the new contract can be renewed or extended; or
      • a previous contract was extended.

There will be some exceptions to these rules.  For example for a training arrangement.

Employers will be required to provide new fixed term contract employees a ‘Fixed Term Contract Information Statement’ that will be published by the Fair Work Ombudsman in due course.

Employers that use fixed term contracts will need to start reviewing their arrangements to ensure that they remain compliant after the 6th of December 2023.

If you need more information on these changes, please contact our office.


In light of the significant High Court decisions reported in our February Sky Update, the ATO has set-out to update their guidance on the often challenging delineation between employee and contractor.

This updated guidance takes the form of Draft Taxation Ruling TR 2022/D3 and Draft Practical Compliance Guideline PCG 2022/D5.

These documents reflect the legal precedent that whether a person is an employee is a question of fact to be determined by refence to an objective assessment of the relationship between the parties, having regard only to the legal rights and obligations that constitute that relationship.

To ascertain those rights and obligations, the contract between the parties must be construed in accordance with established principles of contractual interpretation.

The purpose of these ATO documents is to guide employers in undertaking that exercise of contractual interpretation.

We will keep you informed of the progress of these documents through the consultation process and what it will mean for you in practice.

In the meantime, if you need help to determine whether a worker should be treated as a contractor or employee, please get in touch.


Back in May we wrote about the ATO’s draft guidance dealing with ‘reimbursement agreements’ covered by Section 100A of the Income Tax Assessment Act 1936.

Broadly, the term “reimbursement agreement” is used to describe a situation where one party receives a distribution from a trust for tax purposes, and another party enjoys the benefit.

In other words, the person who declares the distribution in their tax return is different to the person who gets the cash.

Section 100A is intended to combat improper “reimbursement agreements” that are designed to avoid tax.  When Section 100A applies, the trustee of the trust (& not the beneficiary) will be taxed on the trust distribution at a flat tax rate of 47%.

Whilst Section 100A has been in the legislation for over 40 years, there has only been a handful of cases where Section 100A has been applied and scant guidance from the ATO.

Other than a basic fact sheet first published in 2014, the ATO have not formally expressed a view on the application of Section 100A until now.

Some of the views expressed in the draft ruling have been controversial with many arguing that they are out of step with the way in which Section 100A has been historically applied and commonly understood to operate.

After undertaking consultation and deliberating on the draft ruling for a lengthy period, the ATO finalised the ruling as Taxation Ruling TR 2022/4 on the 8th of December.

The views expressed by the ATO in TR 2022/4 will have ramifications for those trusts that distribute income to wider family members (incl. adult children) and corporate beneficiaries, that may require changes to past practices.

In related news, the Full Federal Court handed down their long awaited decision on the ATO’s appeal of the Guardian AIT case.

This case is perhaps the most significant case dealing with Section 100A and the Part IVA general anti-avoidance provisions in recent times, and will have a bearing on how the ATO’s views expressed in TR 2022/4 are to be interpreted.

We will liaise with any impacted clients in the lead up to EOFY 2023 to ensure that their arrangements remain compliant and tax effective.

In the meantime, please get in touch if you have any questions around making compliant trust distributions.


Back in August, we wrote about the Electric Car Discount which is an initiative of the new Labor Government to encourage take up of electric vehicles (EVs) by providing a Fringe Benefits Tax (FBT) exemption.

On the 12th of December, the Treasury Laws Amendment (Electric Car Discount) Bill 2022 received Royal Assent enshrining the EV FBT exemption in law.

This FBT exemption makes it beneficial for people to enter salary sacrifice arrangements to acquire EVs.  It also encourages businesses to invest in EVs for their fleet.

Not only will this measure apply to eligible EVs that are purchased, it will also apply to EVs that are leased.

The FBT exemption applies to EVs acquired after the 1st of July 2022 where the EV:

  • qualifies as a “zero or low emission vehicle”; and
  • has an acquisition price that is less than the luxury car tax threshold (currently: $84,916).

The EV FBT exemption can offer a significant incentive for those individuals and businesses that are interested in acquiring EVs.

If you are interested in acquiring an EV and would like to know how the EV FBT exemption may assist, please get in touch.


Since the introduction of the Director ID regime in November 2021 we have written in this forum about the need for company directors to obtain a unique 15 digit identifier by the 30th of November 2022.

On the 30th of November, the Commissioner of Taxation announced a short reprieve to the 14th of December for the 700,000+ company Directors who had not yet applied.

That date has come and gone and there are still a significant number of company Directors who are yet to obtain their Director ID that are now at risk of being fined $16,500.

As such, company Directors who have not yet applied should do so as a matter of priority.

If you are not sure how to apply, please refer to the details included in the last Sky Update.  Additionally, the ABRS have a useful how to apply video.

Once you obtain your Director ID, please provide the details to our office to be held with your records for future reference.

And if you need assistance to apply for a Director ID or an extension of time, please get in touch at your earliest opportunity.


With Lunar New Year having recently taken place on the 22nd of January, we have entered the year of the rabbit which is said to symbolise longevity, peace and prosperity.

It is fitting that we should start the year with a quote that is on theme and we could look no further than the Chinese philosopher Confucius to whom the following quote is attributed.

“The man who chases two rabbits, catches neither”

It is worth pondering this quote in the context of our goals for the year ahead.

If you have many goals (as most of us do), are you at risk of chasing too many rabbits?  If so, then there is nothing for it but to prioritise those goals so that you can have the focus needed to make real progress.

As we sign-off this Sky Update, we wish you well for 2023.  May you catch the rabbits you are chasing!

Sky Accountants Ballarat

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Office Address: 902 Howitt Street, Wendouree, Victoria 3355, Australia

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Postal Address: PO Box 270 Gisborne Victoria 3437