Insights & News

August 8, 2023

The recent decision of the High Court in CCIG Investments Pty Ltd v Schokman [2023] HCA 21 (Decision) serves to clarify when employers will, and importantly will not, be liable for acts of their employees which cause harm to other people.

The case involved familiar issues of negligence or misconduct by an employee (Negligent Employee) of the appellant company (Employer) after drinking alcohol on work premises, leading to an injury to another employee (Injured Employee).

Background

The Employer employed the Negligent Employee and the Injured Employee (Employees) in the restaurant at a resort it managed in the Whitsunday Islands. The Employees’ roles required them to live on the island at the resort. At the relevant time, the Employees shared a room in accommodation provided by the Employer.

One evening, the Employees both went for a drink at the staff bar after finishing work. The Employees returned to their room at about 1:00am, but the Negligent Employee left shortly afterwards for some more drinks and the Injured Employee went to bed. Some hours later, the Injured Employee heard the Negligent Employee vomiting in the bathroom and walking around hiccupping. About half an hour later, the Injured Employee was again woken up by the Negligent Employee urinating on him in his bed. The Injured Employee inhaled and choked on the urine, and suffered a cataplectic attack caused by the emotional stress of the situation.

The question before the High Court was: was the Employer liable for the Negligent Employee’s acts?

When is an employer liable for an employee’s acts?

The High Court confirmed the long-standing principle that an employer will be liable for the acts of employees committed in the course or scope of the employment. In accordance with the Decision, the courts will assess what that scope is, the nature of the acts of the employee, and whether that nature of the conduct fell within the relevant scope.

The assessment of the scope or course of employment is directed to the question of what an employee is actually employed to do. Relevant considerations include the nature of the role, the ordinary duties, when the employee performs their duties and where they are employed to do it.

The assessment of whether the conduct fell within the scope of the employment requires an employer to have done more than just create an opportunity for the conduct to occur. Rather it requires the consideration being given to the level of connection of those acts with the core of the employment relationship. The Court determined that it is not necessary for the relevant conduct to be authorised by an employer. While authorised acts will almost certainly fall within the scope of the employment, unauthorised and even criminal acts which are found to be within the scope of employment may render an employer liable. Acts which are incidental to, or closely connected with, the employee’s duties will fall within the scope of the employment.

When is an employee on a frolic of their own?

The Court considered that an employer will not be liable where conduct is so remote from an employee’s duty to be considered outside of and unconnected with their employment. This is often described as an employee being on a ‘frolic of their own’.

Conduct will be found to be a ‘frolic’ where an employee is acting outside the ordinary course of the business of the employer. This includes where behaviour which occurs during working hours is so far removed from what can be expected from an employee in their position.

In the Decision, the Court found that, the Employer created, at most, an opportunity for the Negligent Employee to engage in the conduct he did. However the timing, nature and circumstances of his conduct were so far removed from his duties working in the restaurant that the Employer was not liable.

A caution!

While employers should be aware of the Decision and the principles contained in it, employers may still have other responsibilities in respect to the management of their employees, even in circumstances where common law vicarious liability will not attach to their conduct. Under work health and safety legislation, businesses have a responsibility to ensure the health and safety of workers and visitors so far as is reasonably practicable. Under anti-discrimination legislation, employers may have a responsibility to take reasonable and proportionate steps to eliminate forms of discrimination and harassment. These provisions may contemplate taking steps to prevent employees from going on ‘frolics’ of their own.

Our team at Kingston Reid is available to advise businesses on meeting their obligations, responding to issues of misconduct and limiting liability for unauthorised employee conduct. Please reach out if you require any assistance.

 

Katie Sweatman Partner +61 3 9958 9605 [email protected]

Luke Maroney Senior Associate +61 2 9169 8433 [email protected]

July 26, 2023

The recent case of SafeWork NSW v A1 Arbor Tree Services Pty Ltd and Anor [2023] NSWDC 256, in which a worker suffered fatal injuries after being drawn into a woodchipper, has led to the imposition of the highest fine ever given under the Work Health and Safety Act 2011 (WHS Act) in New South Wales. This case serves as a reminder to PCBUs of the importance of implementing and maintaining safety systems and procedures, and highlights the increasing trend of courts imposing larger penalties for contraventions of the WHS Act.

Background

A PCBU, which specialised in tree pruning and removal, was engaged by a high school to remove three trees and prune another.

The injured worker was engaged by the PCBU in mid-2019 as a trainee groundsman. The injured worker had only worked five to seven days for the PCBU prior to the incident.

On 7 September 2019, the Manager assigned tasks to the workers, and then began cutting branches himself while the injured worker and another colleague were responsible for hand-feeding the branches into a woodchipper.

While hand-feeding branches into the woodchipper, the Manager directed the injured worker’s colleague to undertake another task, leaving the injured worker unsupervised with the woodchipper.

Upon the colleague coming back from his task, it was noticed that the injured worker was missing. It was assumed by the workers that the injured worker had gone to the bathroom. The colleague continued chipping the trees. Approximately 20-30 minutes later, it became evident that the injured worker had become entangled in the woodchipper and suffered fatal injuries.

The PCBU was charged by SafeWork NSW and pleaded guilty to recklessly failing to comply with its health and safety duty and exposing an individual to the risk of death.

The Manager was also charged by SafeWork NSW and pleaded guilty to failing to take reasonable care, as a worker, that his acts or omission did not adversely affect the health and safety of other persons, and exposing others to the risk of death or serious injury.

Safety Failures

The Court found that there were numerous critical safety failures which contributed to the incident, being:

1. There was a complete absence of safe systems in place, with no proper supervision;
2. The hazards and risks associated with hand-feeding branches into the woodchipper was well-known in the forestry and arborist industry;
3. Both the PCBU and the Manager underwent an equipment familiarisation program conducted by the importer of the woodchipper, during which they received relevant documents on the safe operation of the woodchipper;
4. The woodchipper’s design and operating manual explicitly warned against hand feeding;
5. The woodchipper involved in the incident was a ‘whole tree chipper’ meaning it was designed to be fed by an auxiliary loader, not by hand;
6. The PCBU did not assess the competency of any of its workers to safely operate the woodchipper. The injured worker was a trainee and had not undergone any formal training or assessment in relation to his competency to undertake work in operating the woodchipper;
7. The primary safety device, the feed control bar, was not fitted as required by the manufacturer to the woodchipper;
8. The PCBU’s continued use of the woodchipper without an operational feed control bar, despite being repeatedly warned by the importer of the woodchipper, demonstrated recklessness and disregard for worker’s safety; and
9. The PCBU’s and Manager’s lack of genuine remorse and focus on their own problems did not meet the requirements for leniency.

The Court found that both the PCBU and Manager had engaged in conduct that was “arrogant and irresponsible“, which “…requires the maximum fine be imposed. The defendants were repeatedly warned that the woodchipper was needing of repairs on at least five occasions. The repairs would have been simple and could have been done easily by [the importer of the woodchipper]. Despite such warnings, [the PCBU] blatantly and recklessly allowed the damaged machine to be repeatedly used, until the subject incident occurred”.

The PCBU was found guilty and initially fined $3,000,000.00 (being the maximum fine at the time of the incident). However, this amount was reduced to $2,025,000.00. The reduction was a result of a 25% discount for pleading guilty early and an additional 10% discount based on their ability to pay.

The Manager was convicted and initially fined $150,000.00, but his fine was also reduced to a total of $101,250.00. This reduction was also due to a 25% discount for pleading guilty early and an additional 10% discount based on his capacity to pay.

Key takeaways

This case highlights four important areas for PCBUs to review and consider.

First, it is important for PCBUs to review and update their existing safety protocols to ensure they align with current industry standards and best practices.

Second, PCBUs should take proactive measures to develop and implement robust Standard Operating Procedures that are tailored to the specific machinery and equipment used in the workplace.

Third, Supervision plays a vital role in maintaining a safe work environment. PCBUs should ensure that competent supervisors are assigned to oversee operations.

Fourth, PCBUs should assess the competency of their workers in operating machinery. Competency assessments help identify any gaps in knowledge or skills of workers.

Our team at Kingston Reid is available to proactively advise organisations on meeting their obligations under the WHS Act, including providing bespoke training and workshops to management and workers on a range of regulatory issues. Please reach out if you require any assistance.

 

John Makris Partner +61 2 9169 8407 [email protected]

George Stent Lawyer +61 2 9169 8421 [email protected]

July 17, 2023

The regulations under which employers were permitted to collect and hold COVID-19 vaccination information in Victoria have been revoked by the Victorian Government with effect from Wednesday 12 July 2023, triggering a positive obligation to destroy that information within 30 days, namely by 11 August 2023.

The regulations were introduced in mid-2022 upon the rolling back of certain vaccination requirements under Victorian pandemic orders.  The regulations provided a clear legal basis for employers to gather COVID-19 vaccination information from specified persons attending a workplace to determine and implement reasonably practicable measures to control the health and safety risks associated with COVID-19 in the workplace.

What information will need to be destroyed?

The effect of the revocation is that any COVID-19 vaccination information that an employer collected for the purposes of complying with Victorian public health orders and/or in furtherance of their own COVID-19 vaccination policies will need to be destroyed.

Relevant COVID-19 vaccination information includes any information about whether a specified person:

• had received any dose of a COVID-19 vaccination, including the date received and the number of doses;
• is or was unable to receive a dose, or a further dose, of a COVID-19 vaccination for reasons including a medical contraindication or an acute medical illness;

The types of documents that this will capture include:

• information derived from a record kept in the Australian Immunisation Register, including immunisation history statements;
• letters from registered medical practitioners about a person’s vaccination status;
• any certificate issued by Services Australia stating that the person is unable to receive a dose or further dose of a COVID-19 vaccination due to a medical contraindication or an acute medical illness.

A “specified person” will include any employee, independent contractor, employee of a contractor, volunteer or student from whom vaccination information was collected.

Employers may need to consider whether any registers or other documents created to monitor or record the collection of vaccination information may also need to be destroyed in order to comply with these obligations.

What if my organisation has a relevant need to continue to ensure that workers are vaccinated against COVID-19?

The effect of the revocation of these regulations is to draw a line under collection of information necessary to respond to the public health emergency and associated need to manage workplace safety concerns.  While Victoria continues to experience waves of COVID-19 through the community, the collection of vaccination information will revert to the standard approach to the collection, holding and use of health information.

If an employer believes they have a continuing need to collect, record, hold and use COVID-19 vaccination information, particularly those in or supporting the health or emergency services industries, this will need to be collected with consent and otherwise in accordance with health records legislation.

It will also be prudent for employers to revisit any obligations set out in policies, procedures or contracts of employment requiring employees to provide vaccination information to ensure that the capacity to collect, store and use that information is consistent with applicable health records information.

Kingston Reid’s dedicated team can assist with providing specific advice on this issue.

 

Katie Sweatman Partner +61 3 9958 9605 [email protected]

Chris Cooper Associate +61 3 9958 9603 [email protected]

July 6, 2023

Where an employee is terminated due to the ordinary and customary turnover of labour, an employer may not need to pay redundancy. The term ‘ordinary and customary turnover of labour’ has been the subject of judicial debate which remains ongoing following two recent full court decisions.

As you may recall from our previous Insight, in Berkeley Challenge Pty Ltd v United Voice [2020] FCAFC 113 (Berkeley), the Full Federal Court found that an employer’s ability to rely on the exception depends on:

1. the reasonable expectations of ongoing employment held by employees;
2. whether the termination due to ordinary and customary turnover of labour is common or usual; and
3. if it is usual practice for the particular kind of business to terminate the employment of its employees following the loss of a commercial contract.

Since Berkeley, the full court has handed down two key decisions that demonstrate how these principles are applied, with both cases resulting in different outcomes.

When can an employer rely on the exception?

In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Delta FM Australia Pty Ltd [2021] FCAFC 107 (Delta FM), employees performed facilities maintenance services at a camp facility as part of the construction of an onshore LNG facility. At the completion of the project, the employer terminated the employees due to the ordinary and customary turnover of labour.

The full court found that the employer in Delta FM could rely on the exception because employees could not have held a reasonable expectation of continuing employment in circumstances where:

• the terms of their employment contracts clearly stated they were engaged for the project and their employment was subject to the ongoing contract between the employer and its client;
• the applicable enterprise agreement contained a clause that said termination of employment due to a change or end of contract between the employer and a client is a usual reason for a change to the employer’s workforce and part of the ordinary and customary turnover of labour; and
• both parties knew the employees’ jobs would be terminated when the construction of the facility was completed.

When can’t an employer rely on the exception?

In United Workers Union v Compass Group Healthcare Hospitality Services Pty Ltd [2023] FCAFC 92 (Compass Group), the full court came to a different conclusion.

Medirest (a Compass Group subsidiary) was contracted to supply aged care services to Eldercare’s facilities for over 18 years under successive commercial contracts. On 18 June 2018, the longstanding commercial contract came to an end and Medirest terminated the employment of the 31 employees it employed at the Eldercare facilities. Medirest relied on the ordinary and customary turnover of labour exception to avoid paying redundancy pay to the employees.

Medirest sought to rely on the decision in Delta FM, however, the Full Court found the circumstances were distinguishable and Medirest was not able to rely on the exemption because:

• the work performed by Medirest’s employees was of an ongoing nature and required indefinitely by Eldercare, whereas in Delta FM all parties knew that the particular work would end on completion of the construction of the onshore facility;
• many of the Medirest employees had a significant period of continuous service of up to 13 years, which demonstrated the ongoing nature of their employment despite the renewal of successive commercial contracts;
• Medirest did not inform the employees of the end date of its commercial contract with Eldercare or the possibility that the contract might not be renewed; and
• Medirest’s employment contracts suggested that Medirest might offer employees employment elsewhere if their employment at Eldercare’s facilities were to cease.

What can employers do to put themselves in the best position to rely on the ordinary and customary turnover of labour exception?

Where employees are engaged to work on a discrete project, an employer should make it clear to employees that their employment will end on completion of that project. Ordinarily, this would appear in the terms of an employment contract.

If on the other hand, an employer is engaged to perform work that their client requires with no obvious end date, the employer should ensure its employees are aware that their employment is subject to the ongoing contract between the employer and its client.

Kingston Reid can assist with providing specific advice about an employer’s ability to rely on this exception and reviewing employment contracts to ensure they are drafted appropriately.

 

Shelley Williams Partner +61 7 3071 3110 [email protected]

Sophie Baartz Senior Associate +61 7 3071 3118 [email protected]

Kat Bennett Associate +61 7 3071 3103 [email protected]

 

May 25, 2023

6 June 2023 heralds more change in workplace relations for business.

Revamped and much expanded multi-employer bargaining will commence, employees may be dragged into enterprise agreements whether willing or not, employees seeking flexibility and parental leave get ramped up rights, and pay secrecy prohibitions will be expanded and penalties for non-compliance are applied.

Business is reeling under this onslaught of change. We will tell you what it means.

What are the changes to bargaining disputes procedures (intractable bargaining disputes) and PABOs?

Do I have to bag a bargain even if I don’t want one?

Enterprise bargaining is where terms and conditions of employment are set at an individual enterprise level, rather than through an industry or occupation level award.

In the new world, it’s much easier for employee organisations (unions) to start the process of bargaining with an employer for a single-enterprise agreement without the employer’s agreement. In particular, they’ll be able to force an employer to bargain where:

• the proposed single-employer agreement replaces an earlier single-employer agreement;
• it has been less than five years since the earlier agreement’s nominal expiry date; and
• the proposed agreement will cover the same, or substantially the same, employees that were covered by the earlier agreement.

These changes operate alongside new provisions about bargaining orders which enable unions to apply to the FWC for bargaining orders if they have made a written request to an employer to bargain for a single-enterprise agreement.

So does the FWC have more power to impose decisions on the parties?

Under the old system, the FWC had limited power to arbitrate disputes. This was mainly confined to circumstances where there was a serious and sustained breach of good faith bargaining in respect of which a serious breach declaration has been made, or protected industrial action was terminated by the FWC.

The FWC now has beefed up powers to arbitrate bargaining disputes, with intractable bargaining declarations replacing serious breach declarations and determinations.

In the new world, any bargaining representative can apply for an intractable bargaining declaration except in relation to a proposed cooperative multi-enterprise agreement (which we explain below).

The FWC will make the declaration where:

• the FWC has dealt with a bargaining dispute;
• the applicant participated in the dispute;
• there is no reasonable prospect of agreement; and
• it is reasonable in all the circumstances to do so.

The FWC may order a post-declaration negotiation period for a specified time.

The Full Bench of the FWC may make an intractable bargaining workplace determination if there are outstanding disputes after a declaration is made, or if there is post-declaration negotiation period, after that period. The FWC will determine the outstanding issues in dispute, with the FWC determination becoming part of the determination and binding on the employer and employees.

This means unions and employers have an alternative source of leverage and bargaining strategies will need to adapt to address this.

What about industrial action?

Before 6 June, a protected action ballot order (PABO) pressed the button for employees to vote up protected industrial action. Protected industrial action then usually commenced within 30 days of the ballot approval result.

However, in the new world those bargaining for single enterprise agreements will be forced back to the table before the PABO closes for a mandatory conciliation conference. A “no show – big stick” will punish bargaining representatives who fail to attend where any subsequent industrial action will be unprotected.

This mandatory conciliation may present an opportunity to resolve bargaining. It will also take resources away from a business at a time when contingency planning may be occurring.

If the conciliation is not successful, employees still have 30 days from PABO results to commence industrial action. They must provide either three days’ notice (for single enterprise agreements) or 120 hours’ notice (for multi enterprise agreements) or up to seven days’ notice (if ordered by the FWC).

What does this mean for employers?

The balance of power between employees and employers when conducting negotiations on enterprise agreements has been changed. We suggest employers review their bargaining strategies and make necessary changes to plans to take these changes into account (including by contingency planning in advance).

What are the changes to the Enterprise Agreement approval process and Better Off Overall Test and why should I care?

Is the approval process simpler?

The process for FWC approval of enterprise agreements has been ‘simplified’ for employers and focuses on whether there is genuine agreement between the parties.

The FWC’s decision about “genuine agreement” will align with the Statement of Principles on Genuine Agreement.

Broadly speaking, genuine agreement requires employers to demonstrate an authentic exercise in agreement-making, including:

• by giving employees information about bargaining and their right to be represented by a bargaining representative;
• by providing employees with a reasonable opportunity to consider a proposed agreement and become informed about it prior to a vote;
• by explaining the proposed agreement terms and their effects to employees; and
• by providing employees with a reasonable opportunity to vote on an agreement.

The FWC will also consider any other matters it considers are relevant. For example, it is likely the FWC will look at employees’ comparable rates of pay under the proposed enterprise agreement when deciding whether employees have sufficient interest in the agreement. This is consistent with Full Federal Court decision in One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union (2018) 262 FCR 527. In that case the Full observed that whether an agreement has been genuinely agreed involves consideration of the authenticity of the agreement of the employees, including whether the employees who voted for the agreement had an informed and genuine understanding of what was being approved.

What does this mean for employers?

The stated goal is simplification but the increased discretion given to the FWC means it is very important for employers to be aware of the Statement of Principles and monitor how it is applied in future decisions of the FWC.

Also, voting employees must have a “sufficient interest” and be “sufficiently representative” of employees who will be covered. This means the voter cohort must authentically represent employees in terms of size and industry, occupation and classification.

Businesses must ensure they avoid:

• a small cohort of employees (paid above the agreement) voting up an agreement that will cover more employees in the future; and
• employees engaged in one industry, occupation or classification voting up an agreement that covers employees across a substantially wider range of industries, occupations or classifications.

Are the changes to the Better Off Overall Test better?

The Better Off Overall Test (BOOT) provisions have been revised to make significant changes to:

• which employees need to be better off overall;
• how the FWC approaches the application of the BOOT (i.e. “reasonably foreseeable employees” rather than “prospective award covered employees” and reasonably foreseeable patterns or kinds of work or types of work); and
• the measures the FWC can take to address any BOOT concerns.

The post 6 June BOOT removes unnecessary complexity. The FWC will no longer conduct line-by-line assessments of a proposed enterprise agreement against the terms of the underlying Modern Award. This was a source of much frustration for employers.

Instead, the BOOT will be a global assessment, with the FWC having regard only to patterns or kinds of work, or types of employment, that are reasonably foreseeable at the time of the BOOT.

As a motivator for all parties, if the agreement does not satisfy the BOOT, the FWC can amend or remove terms so the agreement passes the BOOT. It is the FWC who decides these amendments and not the employers, employees or unions – although the FWC must consider their views. Most parties will wish to avoid this outcome, especially employers.

If the reasonably foreseeable employees or patterns or kinds of work, or types of work change after the test time, employers, employees and unions may apply to the FWC to reconsider whether the agreement continues to satisfy the BOOT. If it doesn’t, the FWC may accept an undertaking or amend the agreement. An amendment operates seven days after the Commission makes the amendment or another day specified in the amendment, which may be a day before the amendment is made.

What does this mean for employers?

It should be easier for employers to demonstrate that employees have genuinely agreed to a proposed agreement, and they are less likely to trip up on technicalities.

The FWC is less likely to raise BOOT issues for enterprise agreements especially if the employer and bargaining representatives share a common view. Employer undertakings may be less common as the FWC may amend an agreement on its own motion.

However, agreements are no longer “set and forget”. Employers covered by enterprise agreements will need to revisit BOOT assessments even after the agreement has been approved by the Commission to avoid applications for the BOOT to be reassessed where there has been a material change in working arrangements or the relevant circumstances were not properly considered during the approval process.

Of course, there is also the safeguard against agreements which are not the result of collective bargaining in good faith, including “unrepresentative” and “low voter cohort” agreements.

Businesses will be well advised to:

• undertake a proper analysis of voting cohorts to make sure they are representative;
• be familiar with Statement of Principles on genuine agreement; and
• proactively timetable reviews of BOOT.

What do the new supported bargaining and single interest authorisation bargaining streams do?

We will have three types of multi-enterprise agreements: cooperative workplace agreements, single interest employer agreements and supported bargaining agreements.

Bargaining for a multi-enterprise agreement must involve employee organisations.

The type of multi-enterprise agreement being bargained for will (at least initially) be determined by how the bargaining commenced.  For example, if the bargaining commenced:

• by consent, it will be a cooperative workplace agreement;
• because of a single interest employer authorisation, it will be a single interest employer agreement; or
• because of a supported bargaining authorisation, it will be a supported bargaining agreement.

The type of agreement ultimately made will be determined by the authorisation (if any) in place immediately before the agreement was made. For example, if a single interest employer authorisation was in place immediately before the agreement was made, it will be a single interest employer agreement.

Also, the FWC cannot approve a cooperative workplace agreement unless it is satisfied that at least some of the employees covered by the agreement were represented by a union in bargaining.

Which industries are likely to see supported bargaining authorisations?

The supported bargaining authorisation replaces the low-paid bargaining provisions. It is intended to assist employees who have difficulty bargaining at the single-enterprise level. This new authorisation is easier to access and has less stringent criteria.

For example, supported bargaining is likely to feature in low-paid industries such as childcare, aged care etc.

When an application for a supported bargaining authorisation is made, the FWC will assess whether it is appropriate for the parties to bargain together. It will look at prevailing pay and conditions in the relevant industry, whether employers have clearly identifiable common interests (eg, location, nature of enterprise and terms and conditions) and whether the number of bargaining representatives would be consistent with a manageable collective bargaining process and other matters the FWC sees as relevant. For example, imagine what it might be if you had more than 100 employee representatives as is the case in the Apple bargaining dispute. This required the Deputy President of the FWC, DP Hamptom, to make a statement and recommendations on how such difficulties may be managed.

If an employer is specified in a supported bargaining authorisation, the employer cannot bargain for a different type of agreement. That is, they’re locked into making a supported bargaining agreement. The only means of avoiding this is to make an application to vary the authorisation on the basis that the employer’s circumstances have changed.

An employer specified in a supported bargaining authorisation may apply to the Commission for a variation to remove its name from the authorisation. The Commission must vary the authorisation to remove the employer’s name if it is satisfied that, because of a change in the employer’s circumstances, it is no longer appropriate for the employer to be specified in the authorisation. An employer, an employee bargaining representative or a union entitled to represent the industrial interests of an employee in relation to work to be performed under that agreement, may also apply to have an employer’s name added to the authorisation.

What do these changes to multi-employer bargaining mean for employers?

Bargaining will be a reality even for the unwilling or, indeed, the unaware.

The new provisions are designed to make it easier for employees (and their representatives) to bargain for multi-enterprise agreements. The broader eligibility and relaxed preconditions for making authorisations mean employers are much more likely to be compelled to bargain for a multi-enterprise agreement. Moreover, once they’re locked in, it will be extremely difficult for them to extricate themselves from the process. This stream of bargaining will be particularly relevant for medium-sized employers that have traditionally “fallen under the radar”.

What about the single interest authorisation?

Before 6 June, two or more employers who would be covered by a proposed enterprise agreement could apply for a single interest employer authorisation. However, this was limited to certain employers such as franchisees or employers who had obtained a ministerial declaration based on their common interests. This meant it had limited application.

In the new world, the existing limits on access to single interest employer authorisations have been removed and the application process has been simplified so:

• employers with common interests (who are not franchisees) no longer need to obtain a ministerial declaration before applying for a single interest employer authorisation;
• employee bargaining representatives can apply for a single interest employer authorisation, subject to majority support of the relevant employees; and
• both employers and employee bargaining representatives can apply to vary a single interest employer authorisation to add or remove employers.

This is of much wider application and should be on an employer’s radar.

A single interest employer authorisation ceases operation when the relevant enterprise agreement is made or after 12 months (or a longer period, if extended by the FWC). The FWC may extend the period if it is satisfied:

• there are reasonable prospects that the agreement will be made if the authorisation is in operation for a longer period; and
• it is appropriate in all the circumstances to extend the period.

What does this mean for business?

If an employer thinks a single interest employer authorisation or a supported bargaining authorisation will likely be made by the FWC (i.e. the employer will be required to bargain), the best approach may be to consent to that bargaining.

This has two significant upsides:

• employees cannot take protected industrial action; and
• the FWC will not be able to arbitrate the terms and conditions by making an intractable bargaining workplace determination.

So, what about Flexible Working Requests?

More employees are now able to request flexible working arrangements, including those who are experiencing family domestic violence and pregnant employees.

Also dispute resolution has been made available to employees with flexible working arrangements entitlements. Previously only modern award covered employees could seek dispute resolution from the FWC.

Refusal is no longer a slam dunk for award free employees and employers must:

• discuss the request and genuinely try to reach agreement with the employee about other changes that can be made to accommodate their circumstances;
• consider the consequences of the refusal for the employee;
• refuse only on reasonable business grounds; and
• provide the refusal in writing, including the details of the reasons for refusal and any other changes the employer would be willing to make that could accommodate the employee’s circumstances.

Only after taking these steps may an employer refuse a request, on account of reasonable business grounds (which are unchanged). The decision must also have regard to the consequences of the refusal for the employee.

If the dispute is referred to the FWC, the FWC will mediate to try and come to an agreed outcome or may make a recommendation or express an opinion. In some circumstances, the FWC may also arbitrate and issue an order to affirm the refusal, grant the employee’s request or make other changes to accommodate the employee. Employers must comply with this otherwise they may be fined.

For employers already dealing with Modern Award based flexible working requests, this is more of the same. Of course, this may change too after the FWC reviews modern awards regarding this NES entitlement and makes necessary consequential amendments.

The President of the FWC, Justice Hatcher, has issued a Statement providing guidance on how the FWC will deal with this new entitlement.

So, what does this mean for business?

Yoga may be an option. At a minimum there needs to be genuine thought to whether an arrangement of some kind can be permitted for eligible employees.

The President’s Statement should also be a doorstop for HR practitioners.

If a flexible arrangement is agreed, give careful thought to what additional policies or contractual arrangements may be appropriate to ensure that the arrangement aligns with performance and conduct management and is safe.

What about unpaid parental leave extensions?

What do I do with a request to spend more time with their child?

Similar to requests for flexible working arrangements, employers must now give more regard to requests to extend unpaid parental leave. It is no longer a question of simple technical compliance accompanied by a refusal.

When an employee makes a request to extend a period of unpaid parental leave, employers must discuss the request with them, and if they refuse the request, must provide the reasons for refusal in writing. If there is a different extension period that the employer can agree to or is willing to consider, the employee should be informed of this in the written notice.

As is the case for requests for flexible working, the FWC can deal with disputes about refusing to extend unpaid parental leave, including by conciliation, mediation or arbitration. If the FWC arbitrates and an order is issued, a failure to comply may mean a fine.

What does this mean for employers?

The President’s Statement provides excellent guidance on how the FWC will approach requests to extend unpaid parental leave.

Employers must give genuine consideration about whether to agree to an extension. If agreeing, employers would likely benefit from some agreed keeping in touch incentive to ensure that the parent remains embedded in the workforce.

What about pay secrecy?

Pay secrecy prohibitions started on 7 December 2022 for employment contracts entered into after that date and older contracts without pay secrecy provisions. However, those provisions did not apply to older contracts with pay secrecy provisions, unless the contract was varied. In the new world, it is now unlawful for employers to enter new contracts (or other written agreements) with employees that contain pay secrecy clauses. The prohibition does not, however, extend to contractor/consulting arrangements.

Employees will also have a workplace right to ask other employees about, and disclose their own, remuneration and relevant conditions of employment, such as hours of work (i.e. except for older contracts with existing pay provisions). Employees may use this information to determine if their remuneration is fair and comparable to others in the same workplace and/or industry.

Employees cannot be compelled to disclose information about their remuneration and retain the right not to share this information if they do not want to. An employer will breach the general protections provisions of the FW Act if they take adverse action against employees who ask for pay information or employees who wish to keep it secret.

What does this mean for employers?

The only permissible pay secrecy provisions are those in contracts made before 7 December 2022. This exception continues until the contract is varied by agreement. In practice though, the exception will have negligible impact save for the extent of liability if there is widespread non-compliance, in which case it only applies to eligible contracts or instruments.

If an employer is applying a discretionary approach to bonus or incentive awards it may pay to have a structured approach to discrimination. Otherwise, an employee getting a lower award who also has a protected attribute may allege discrimination.

 

Duncan Fletcher Partner +61 8 6381 7050 [email protected]

Brendan Milne Partner +61 3 9958 9611 [email protected]

Yoness Blackmore Executive Counsel – Knowledge +61 2 9169 8419 [email protected]