Insights & News

December 1, 2023

The NSW Government has introduced significant amendments to state industrial relations legislation. Those amendments follow significant promises the Government made to the Union movement prior to its election, and the recommendations made to the Government by the Industrial Relations Taskforce it established shortly after its election. This week, the Industrial Relations Amendment Bill 2023 (NSW) (Bill) passed through both houses of parliament, and it is expected to soon receive royal assent and come into effect. Our summary of the key changes is below.

Wages Cap Repealed

The Bill repeals the provision of the Industrial Relations Act 1996 (NSW) which requires the Commission to give effect to the Government’s declared wages policy. This wages cap has been seen as a restriction on the Commission’s ability to exercise its discretion taking into account all factors relevant to a dispute in circumstances the resolution of a dispute would lead to increased employee-related costs which were not offset by employee-related costs savings. The repeal of this provision was foreshadowed before the election and was a core commitment that was made by the new Government. The removal of this limitation on the Commission’s powers is likely to lead to additional claims by unions in respect of public sector conditions of employment.

The apparent trade-off for this amendment is the inclusion of the fiscal position and outlook of the Government as a mandatory consideration for the Commission in respect of the Commission’s function in determining public sector conditions of employment. It is not yet know what comparative weight will be given to this factor by the Commission, amongst the various factors in any given dispute.

Mutual Gains Bargaining

The Bill introduces the new concept of ‘mutual gains bargaining’ in respect of public sector and local government employers. Where a union and employer agree to engage in mutual gains bargaining, the Industrial Relations Commission will be required to act as a facilitator of these bargaining processes unless the parties appoint an alternative third party facilitator. The bargaining is underpinned by principles of collaboration and identification of areas of mutual need and desire and aims to build consensus. The process is underpinned by good faith bargaining obligations. This is similar to the federal system.

The facilitator or any party to the bargaining may declare the bargaining unresolved and give a report to the Commission regarding the conduct of the parties during bargaining and the outstanding issues. This will be treated by the Commission as a notice of dispute and will proceed through the Commission’s ordinary processes. Any arbitration following this process will take into account the parties’ conduct during mutual gains bargaining.

Reintroduction of the Industrial Court

In a change which has the potential to affect both public sector and private sector employers across the state, the Bill re-establishes the Industrial Relations Commission in Court Session, also known as the Industrial Court. The Industrial Court will resume its pre-2016 jurisdiction, and will have broad power to:

1. deal with offences and civil contraventions under work health and safety, worker’s compensation, workplace surveillance and explosives legislation;
2. make declarations and award remedies in respect of unfair contracts of employment;
3. make declaration of law in respect of any matters over which the Industrial Relations Commission has jurisdiction;
4. deal with appeals in accordance with certain superannuation legislation; and
5. make orders in respect of underpayment claims in excess of the small claims limit.

These changes consolidate in the Industrial Court work-related enforcement mechanisms which were previously allocated variously to the District Court and Supreme Court. The Industrial Court will be a superior court of record with equivalent status to the Supreme Court.

Reintroduction of Regional Allocations for the Industrial Relations Commission

The Bill reintroduces the practice of allocating members of the Industrial Relations Commission to particular regional areas of responsibility. This allows a greater level of local knowledge in respect of peculiarly regional matters to be relied upon.

November 27, 2023

Restrictions on the use of fixed and maximum term contracts were one of the significant and well-publicised reforms introduced by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (Amendment Act) in late 2022 which are set to commence in just a week’s time, from next Wednesday 6 December 2023.

Throughout 2023, employers across Australia have been taking steps to review their hiring practices and existing workforce composition to ensure compliance with the new provisions on and from 6 December. These reforms have a particular impact on employers with uncertain funding arrangements, particularly in the tertiary education and not-for-profit sectors.

Last Friday afternoon, Minister Burke introduced the Fair Work Amendment (Fixed Term Contracts) Regulations 2023 (Regulations), which create further exceptions for the purposes of the limitation on fixed term contracts provisions which apply in respect of organised sports, live performance industry employees, philanthropic entities and – as anticipated – higher education employees.

In effect, the Regulation essentially operates as a ‘stay’ of the commencement of the application of the new restrictions for fixed term contracts in the abovementioned areas for a limited period of 6 months – that is, until 1 July 2024. However, only contracts entered into on or after next Wednesday 6 December 2023 (and before 1 July 2024) will be exempted from the restrictions.

The challenge that the Regulations respond to is that employers in these sectors are typically (significantly) dependent on government or other funding to operate their core functions. In relation to tertiary education, the current manner in which funding is allocated creates significant difficulties in applying the new provisions of the FW Act relating to fixed term contracts. For example, where funding is allocated to particular projects under largely recurrent government schemes, but in variable amounts, or where the funding is allocated on an annualised basis, the exceptions to the restrictions introduced by the Amendment Act are unlikely to apply. This creates a difficulty which would appear to require employers to engage employees on ongoing contracts, despite not having certainty from Government that the positions will, in fact, be funded on an ongoing basis.

While the tertiary education sector provides a particularly sharp example of this issue, it is not alone. In the not-for-profit sector, projects are often funded by recurrent short-term government grants, with employment contracts fixed to a duration reflecting the funding. These recurring grants cause the same issue as those faced in the community sector.

The purpose of the Regulations is to allow for additional time for relevant employers to continue discussions with DEWR in relation to the application of the fixed term contract limitations, and it remains to be seen what will emerge from those discussions in the lead up to 1 July 2024 – importantly, whether any new (permanent) exceptions will be introduced.

For comprehensive discussion of the reforms introduced under the Amendment Act, including but not limited to the new limitations on fixed and maximum term contracts, please see our Insight here.

As we communicated last week (in a separate Insight article looking at recent developments arising in respect of the Government’s Closing Loopholes Bill), Minister Burke has now agreed to certain amendments in respect of the Bill’s gig-economy provisions as well as the “same job, same pay” provisions. A revised Bill reflecting certain amendments to these provisions (arising whilst the Senate inquiry into the Bill continues) is expected to be tabled in the House of Representatives this week.

To understand whether your organisation may be able to take advantage of the reprieve in the regulation of its fixed and maximum term contracts, please contact a member of the Kingston Reid team.

November 22, 2023

Outside the developments we have seen in relation to the Government’s proposed “Closing Loopholes” laws, and the looming dates for aspects of the “Secure Jobs, Better Pay” reforms to take effect – including the sunsetting of “Zombie Agreements” and limitations on the use of fixed term contracts – the past month or so has seen a number of important court and Commission decisions come down.

Federal Court finds enterprise agreement capable of retrospective operation

In Murtagh v Corporation of the Roman Catholic Diocese of Toowoomba [2023] FCAFC 172, the Full Federal Court determined that enterprise agreements are capable of operating retrospectively to confer entitlements upon former employees whose employment had ended before the relevant agreement was ever made.

In that case, the employer was found to have contravened its agreement by not paying a back payment to former employees in these circumstances – even to an employee that had left around 12 months earlier.

This is at odds with the long-accepted orthodoxy that enterprise agreements cannot operate in this way, given that the Fair Work Act provides that “an enterprise agreement does not give a person an entitlement unless the agreement applies to the person.

As the Court observed, this is an issue of “considerable systemic importance and related difficulty”, given that enterprise agreements commonly include terms for back-payment of retrospective pay increases (which these generally understood to provide an entitlement only to current employees).

In our view there is room for significant doubt about the correctness of this judgment, and it remains to be seen whether or not it will be challenged.

“Holding discussions”: scope of right of entry provisions clarified by Full Federal Court

The Full Federal Court in Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia v Austal Ships Pty Ltd [2023] FCAFC 180 has overturned a first instance judgment of the Federal Court from late 2022, concerning the right of entry provisions of the Fair Work Act.

At first instance, Colvin J held that although the Act allows right of entry permit holders to enter premises for the purpose of “holding discussions” with relevant employees, an entry is unauthorised if part of the purpose is to seek some form of agreement, commitment or pledge.

On this basis, it would not be lawful for a permit holder to exercise right of entry to seek signatures on a petition, or to recruit members, as these things would be outside the boundaries of a “discussion”.

The Full Court accepted that this was an unduly narrow construction of the relevant provisions, and that discussions will often be had for the very purpose of achieving a particular outcome. The Court held that it was artificial to distinguish holding a discussion from the realisation of the purpose or objective of those discussions.

In light of the Full Court’s judgment, this will no longer be a lawful basis for an employer or occupier of premises to refuse entry.

Multi-employer bargaining authorisations

We have started to see some early Commission cases involving the more controversial aspects of last year’s “Secure Jobs, Better Pay” provisions being handed down.

This has included multi-employer bargaining authorisations being made in the early learning and education sectors. These applications were largely determined by consent, and so the more complex aspects of the reforms have not yet been the subject of fully reasoned consideration.

That said, they nevertheless provide some important insights into the operation of the new provisions.

First, the Commission has acknowledged the complexity and uncertainty of the new multi-employer bargaining schemes which will inevitably be the subject of future debate.

Second, and more importantly, the Commission has indicated that concept of “clearly identifiable common interests – central the multi-employer bargaining framework – is one of “wide import” and tends to “any joint, shared, related or like characteristics, qualities, undertakings or concerns”. This gives credence to employer concerns about the breadth of the provisions.

Fair Work Commission makes first intractable bargaining declaration

We have also now seen the first intractable bargaining declaration (relating to bargaining with Fire Rescue Victoria).

There was no contest in this case that bargaining had become “intractable”, and so again the boundaries of that threshold concept are yet to be fully explored. The Commission has however indicated (without necessarily deciding) that the requirement for the Commission to have previously assisted with “the dispute” means the dispute which led to bargaining becoming intractable, as opposed to just bargaining more generally.

The matter is now listed for hearing in December for the purposes of arbitrating the terms of the Workplace Determination. It appears likely that this will involve some contest about the extent to which parties are able to revisit their position on matters which were the subject of bargaining – an important issue on the overall intractable bargaining framework.

Effective 12 December 2023, the Australian Human Rights Commission (AHRC) will be equipped with enhanced powers to investigate and enforce an employer’s positive duty under the Sex Discrimination Act 1985 (Cth) (SDA).

The AHRC’s expanded authority includes the ability to conduct inquiries, issue compliance notices, seek Court-ordered compliance, and enter into enforceable undertakings.

Key takeaways

• The positive duty represents a significant shift in how employers must approach unlawful conduct of a sexual nature and sex-based hostility in the workplace. Such a substantial shift demands a corresponding and thorough reassessment of existing preventive measures.
• Considering the common ground now shared by the AHRC and Safety Regulators, organisations should anticipate addressing comparable issues with multiple regulatory bodies.
• The proactive approach encouraged by the AHRC emphasises not just compliance but a genuine commitment to fostering respectful, inclusive workplaces. Tokenistic or artificial measures, such as basic online training for staff in the absence of other measures, will not meet the AHRC’s expectations.

Understanding the Positive Duty

Introduced in 2022 through amendments to the SDA, the positive duty requires employers to take reasonable and proportionate measures to eliminate unlawful behaviours. The positive duty goes beyond sexual harassment to include sex discrimination, sex-based harassment, the creation of a hostile workplace environment based on sex, and related acts of victimisation. The duty also extends beyond the actions of employees and contractors to encompass conduct by third parties, such as customers or clients. While it complements existing obligations under work, health, and safety laws, it does not replace and requires a holistic and comprehensive approach for compliance.

AHRC’s New Investigative Powers

The AHRC’s authority to commence an inquiry arises when there is a reasonable suspicion that an organisation is not complying with the positive duty. This suspicion can be triggered by various sources, including other government agencies, impacted individuals, unions or worker representatives, or media reports. In cases of non-compliance, the AHRC can provide recommendations, issue compliance notices specifying corrective actions, apply for court orders directing compliance, and enter into enforceable undertakings with organisations.

Compliance Guidelines and Principles

To assist employers in meeting their obligations, the AHRC has provided guidance material outlining seven standards and four guiding principles. These standards cover a range of measures employers should adopt to eliminate unlawful conduct. While each employer is expected to address all seven standards, what is deemed “reasonable and proportionate” will vary based on factors such as organisation size, resources, and the practicality and cost of implementing measures.

Industry-Specific Scrutiny

Notably, the AHRC has indicated particular scrutiny on industries such as mining, retail, and legal services. This emphasis underscores the AHRC’s commitment to ensuring that businesses across various sectors actively work towards creating environments free from unlawful behaviours. Employers within these industries are urged to pay special attention to the AHRC guidelines to align their practices with the evolving legal landscape.

Significant changes have occurred in work health and safety law over the last year. Amendments have been made and proposed to state and Commonwealth safety legislation meaning that jurisdictions are straying from what was originally a harmonised regulatory regime. As states and territories become less harmonised, compliance is becoming more complex for organisations with cross-jurisdictional operations. Victoria is now the only ‘non-harmonised’ jurisdiction in the country.

There have been some big changes, particularly in relation to psychosocial health and safety, penalties for breaches of health and safety legislation, prohibitions on contracts for indemnification from penalties, and increased regulatory activity.

Industrial manslaughter is now an offence in 5 state and territory jurisdictions. Two additional jurisdictions are considering or likely to introduce the offence shortly.

The team at Kingston Reid has prepared the following snapshot of recent changes and significant events across the country.

Model laws

The Model WHS Act forms the basis of the WHS Acts implemented across Australia except for Victoria.

The Model WHS Act was amended to significantly increase maximum penalties, to clarify the way in which Category 1 offences operate and to specifically set out that psychosocial risks must be eliminated or mitigated through the risk management clauses contained in the Model WHS Regulations.

Commonwealth

In mid-September, a wide range of amendments to the Commonwealth WHS Act, which applies mainly to the Federal Government and public authorities, were introduced, including prohibitions on insurance to cover WHS penalties and the addition of negligence as a fault element to the category 1 offence (which was historically concerned with recklessness).

The Federal Government’s “Closing Loopholes” Bill includes amendments to the Commonwealth WHS Act. The proposed amendments include the offence of industrial manslaughter, significant penalty increases for breaches and provisions relating to asbestos safety.

Queensland

The report on the review of Queensland’s WHS Act was published along with the Government’s response to the recommendations in the report in May 2023. Several changes to the Queensland WHS Act have been proposed. Significant changes include increased integration of health and safety representatives’ involvement in the performance of inspector and WHS permit holder functions, and increased recognition and participation of unions in safety matters.

A health and safety manager at the Queensland Museum was charged and pleaded guilty to a category 2 offence (an offence relating to a failure to comply with a duty resulting in exposure of a person to the risk of death or serious injury), following her failure to complete a risk assessment and implement controls relating to zoonotic diseases present at the Museum’s taxidermy department.

New South Wales

In October this year, the NSW Government formally committed to enacting a provision for the offence of industrial manslaughter.

This announcement followed NSW Work Health and Safety Minister Sophie Cotsis’ announcement of a 12-month “anytime, anywhere” inspector blitz campaign to combat the number of workplace fall incidents.

A bill was introduced which will triple the maximum penalty for category 1 breaches and increase all other WHS fines by 40%. The Bill also gives police powers under the WHS Act.

A PCBU charged with a category 1 offence was fined a record $2.025 million and a leading employee was also fined $101,250 in relation to the death of a worker in a woodchipper accident.

ACT

The ACT WHS Act was amended to include sexual assault incidents as notifiable incidents. Penalties will apply if PCBUs fails to notify WorkSafe ACT about an incident.

Codes of Practice dealing with psychosocial hazards and asbestos training were also made.

Victoria

WorkSafe Victoria has successfully prosecuted several breaches of the Occupational Health and Safety Act 2004 in respect of psychological risks. This was without any legislative change relating to the management of psychosocial risks.

Court Services Victoria was charged for failing to eliminate or mitigate health and safety risks for workers who were the subject of a toxic workplace culture, bullying and excessive workloads.

Tasmania

Following an inquest into the suicide death of four Tasmanian policemen, a coroner recommended that workers who are exposed to certain distressing incidents should automatically be referred to support providers for psychological assessment. The coroner also recommended mandatory six-monthly wellbeing screening for all serving officers.

South Australia

South Australia adopted the industrial manslaughter offence. Regulations regarding psychosocial risks were also introduced.

Western Australia

The WA Government launched its “Speak Up, Report It” campaign to address bullying, harassment and inequality in the key sectors of the Western Australian economy.

The Government also introduced a bill to adopt an ‘applied law approach’ to its mirror Rail Safety National Law legislation. If passed, the laws will automatically update in line with changes made to the Rail Safety National Law by the South Australian Parliament – the ‘author’ of the laws which other states and territories have agreed to adopt.

Northern Territory

The Northern Territory Supreme Court upheld the record breaking WHS fines of $960,000 imposed on a PCBU and $180,000 imposed on its director in relation to the death of a worker inside the strike zone of mobile plant.

The NT Government also made a new Code of Practice relating to tower cranes.