Insights & News

October 7, 2021

September 8, 2021

Are you a Board Director or Senior Executive? Please read on; your governance obligations depend on it.

On 2 September 2021, the Sex Discrimination and Fair Work (Respect at Work) Amendment Act 2021 ([email protected]Work Act) passed Parliament. The changes will come into effect the day after the [email protected] Act receives royal assent, which is expected to occur momentarily.

In June 2021, even prior to Parliament passing the [email protected] legislation, the Australian Human Rights Commission (AHRC) had published its report, Equality across the board: Investing in workplaces that work for everyone (AHRC Report).

Drawing on guidance from companies, the AHRC Report focused on the actions required of the most senior leadership of the ASX200 boards and executive management in preventing sexual harassment in the workplace. Based on a comprehensive survey of 118 ASX200 companies, as well as in-depth interviews with board members of 16 ASX200 companies, only 19% of participants reported that Board directors undergo training on good governance and sexual harassment.

In the wake of the [email protected] legislative changes, now is the time for Board directors and senior executives to carefully consider their governance obligations in respect of preventing and eliminating sexual harassment in the workplace. Before we get into the details of how you should do this, let’s re-cap the legislative changes.

The key legislative changes

The key legislative changes (and our initial views on them) are:

• a new object clause has been inserted into the Sex Discrimination Act to achieve, so far as practicable, equality of opportunity between men and women;
• similar to the definition of sexual harassment or sex discrimination, a new definition has been inserted which makes it unlawful to ‘harass a person on the ground of their sex’. Sex-based harassment will be defined as unwelcome conduct by reason of the person’s sex of a sufficiently serious nature which meets the threshold of being offensive, humiliating, intimidating, and seriously demeaning. The requirement that the conduct be seriously demeaning indicates that the intention of the provisions are to deal with more egregious forms of sex-based harassment;
• the Sex Discrimination Act now adopts the term “worker” used in WHS laws to ensure that interns, volunteers and self-employed workers are protected. The scope of the Sex Discrimination Act now also extends to members of parliament (and their staff), judges and state public servants;
• the AHRC will have discretion to terminate a complaint relating to the Sex Discrimination Act, where it had been lodged more than 24 months after the alleged acts took place (previously 6 months);
• the Fair Work Act now confirms that sexual harassment is a valid reason for dismissal (it already is but this now has legislative backing); and
• workers can now apply to the Fair Work Commission for an order to stop sexual harassment in the workplace, extending the Commission’s current stop-bullying jurisdiction. The new jurisdiction commences 2 months after the legislative amendments come into operation.

What should Board Directors make of this?

While legislative changes are important as they embed the social standards and norms that are expected from all of us, the research demonstrates that the elimination and prevention of sexual harassment in the workplace has far more to do with the culture and leadership of an organisation than it does with the law. This has been demonstrated by the continuation of high-profile sexual harassment cases, which have occurred despite having laws prohibiting sexual harassment that have existed for many decades. Allowed to fester, these issues can and will become a serious governance risk that increases legal liability and at times irreparably damages personal and organisational reputations.

These issues are sensitive and confidential in nature and therefore many Board Directors may not feel responsible for managing these issues. However, as with other hazards in the workplace, directors must take steps to identify the risks of sexual harassment and put in place control measures to prevent the conduct from occurring.

The AHRC Report found that most Boards consider that the governance and management of sexual harassment in the workplace should be dealt with by the senior management teams including People and Culture Teams.

However, as the Australian Institute of Company Directors has pointed out, sexual harassment is now recognised (and should be treated as) an important governance issue. For example, the ASX Corporate Governance Principles require Boards to instill a culture of acting lawfully, ethically and responsibly which requires companies to instill and continually reinforce a culture across an organisation of acting lawfully, ethically and responsibly.

In light of these responsibilities, our recommended steps for Board directors are as follows:

• Take action now. Deliver sexual harassment training to Board members and senior executives, including a focus on prevention;
• Consider implementing an internal working group or committee to develop a holistic prevention plan to address controls and culture;
• Ensure governance measures are put in place to monitor performance against the agreed prevention plan. Currently 43% of ASX200 Boards have a running board agenda item relating to the reporting of sexual harassment. This should be implemented if you haven’t already done so;
• Require that executive teams review and revise current Workplace Behaviour Policies to ensure that they reflect the new legislative changes and focus on prevention of sexual harassment in the workplace;
• Deliver sexual harassment training to all employees and managers that not only focuses on explaining the legal terms but trains employees on how to actively prevent sexual harassment including by using active bystander techniques.

How should management teams support the Board?

The role the senior management team has in supporting the Board is fundamental. The senior management team should take a proactive approach to preventing sexual harassment in the workplace and be in a position to demonstrate to the Board (but also to employees and other stakeholders) what measures have been put in place to actively prevent and eliminate sexual harassment in the workplace.

The team at Kingston Reid is available to assist in helping you develop your prevention plan, deliver training, whether to Boards, executives or employees, and review and update policies and procedures as well as discuss alternate means of complaint handling, such as Ombpoint. Please reach out if you require any assistance.

August 10, 2021

On 24 June 2021 the Sex Discrimination and Fair Work (Respect at Work) Amendment Bill 2021 (Bill) was referred to the Education and Employment Legislation Committee (Committee) for inquiry and report. As part of its inquiry, the Committee received 55 submissions from various stakeholders and individuals. On 6 August 2021, the Committee handed down its report (Committee Report) recommending that the Bill be passed.

Background

The Bill made its way before the Senate as a result of the Federal Government’s Roadmap for Respect: Preventing and Addressing Sexual Harassment in Australian Workplaces (Roadmap). The Roadmap endorsed a number of the recommendations made by the Australian Human Rights Commission’s [email protected] Report, including several legislative amendments which the Bill aims to implement.

What are the proposed changes to the Sex Discrimination Act?

The Sex Discrimination Act (SD Act) will significantly expand in terms of the conduct and persons it applies to. The Bill introduces a prohibition against “harassment on the grounds of sex”, in addition to the existing prohibition against sexual harassment. This recognises that harassment, even if it is not “conduct of a sexual nature”, can still be unlawfully engaged in on the grounds of a person’s sex. A new objects clause will also be included to provide that an express aim of the SD Act is to achieve equality of opportunity between men and women.

The Bill also extends the scope of the SD Act to ensure that all “workers” and “workplaces” are protected by adopting terminology used in Work Health and Safety laws. The outcome of these changes is to broaden the scope of the SD Act’s coverage and ensure that interns, volunteers and self-employed workers are protected by the sexual harassment provisions of the SD Act. The scope of the SD Act will also be clarified regarding its coverage of public servants, including but not limited to members of parliament, judges and formerly exempt state public servants in order to align the Act with other federal anti-discrimination laws.

Finally, the Bill, by amending section 46PH(1)(b) of the Australian Human Rights Commission Act, will extend the time period for bringing a complaint from 6 to 24 months (after which time it may be dismissed). The Bill further provides that in addition to making a criminal complaint under the SD Act, complainants may commence civil proceedings regarding to the same conduct.

What are the proposed changes to the Fair Work Act?

The Bill extends the Fair Work Commission’s (FWC) current jurisdiction over workplace bullying matters to also cover workplace sexual harassment matters. In addition to the FWC’s powers to make an order to stop bullying, the FWC will have new powers to make an order to stop sexual harassment in the workplace. These orders are aimed at preventing future sexual harassment and will only be made where there is a risk of harassment occurring again. The FWC will be able to make an order in relation to sexual harassment in accordance with the amendments even where the conduct occurred prior to the amendments being implemented.

A new legislative note will be added into the Fair Work Act (FW Act) to make it clear that sexual harassment in connection with the employee’s employment can be a valid reason for dismissal. As a consequence, the meaning of serious misconduct in the Fair Work Regulations will be modified to include instances of sexual harassment. We note, sexual harassment would already be considered serious misconduct regardless of whether it is added to the definition.

The Bill also extends an employee’s entitlement to two days of compassionate leave to include occasions where the employee, or the employee’s current spouse or de facto partner, has a miscarriage.

While numerous parties submitted to the Committee that there should be a positive duty on employers to take reasonable steps to prevent sexual harassment, this obligation was not endorsed in the Committee Report (noting they already exist as part of any employer’s duty of care).

Where to now?

Recommendations were put forward as part of the Committee Report by three groups; the Committee, the dissenting Labor Senators, and the Australian Greens Senators with the following overall recommendations being made:

1. The Government defer the commencement of the amendments that extend the anti-bullying jurisdiction of the FWC until no earlier than two months after royal assent.
2. The Government make further legislative amendments to clarify that victimisation under the Disability Discrimination Act 1992 (Cth), Racial Discrimination Act 1975 (Cth), and the Age Discrimination Act 2004 (Cth), can also form the basis of a civil action for unlawful discrimination.
3. The Committee recommends that the Bill is passed.

On the basis of these recommendations, employers can expect that the Bill will be passed, although it is likely that further minor amendments will be made to the Bill before it receives royal assent.

What does this mean for employers?

While the broadening of the legal definitions and the introduction of a new jurisdiction with the FWC, will increase risk to employers, all employers and workplaces should be taking proactive steps to prevent sexual harassment in the workplace. In addition to having workplace policies and safety management plans and systems, employers should:

• Identify any risk factors in the workplace which may increase physical and psychological risks (including sexual harassment)
• Conduct training including bystander training to help employees understand how to identify sexual harassment or inappropriate conduct that is of a sexual nature or gender based
• Review sexual harassment policies and update them to reflect the broadened definitions

Please reach out if you need assistance undertaking training or reviewing your current policies and procedures.

August 5, 2021

While not all investigation reports into workplace complaints are intended to be protected by legal professional privilege, there are some key criteria to satisfy if that is in fact the intention. A recent case from the Fair Work Commission (FWC) illustrates that there is no issue at all with an external workplace investigation being privileged provided it meets certain tests.

Case facts

In Tainsh and Willner v Co-operative Bulk Handling Ltd [2021] FWC 3381 the FWC examined a claim for privilege over an investigation report into a workplace complaint of bullying undertaken by an external consultant. The findings of that investigation ultimately formed the basis of the reason for the dismissal of the two employees. In a common arrangement, that consultant had been retained by the employer’s external legal advisers to undertake the investigation for the purpose of them providing legal advice to the employer in relation to the complaint.

The employees argued instead that the purpose of the investigation was for the employer to comply with the investigation procedure in the Company’s policies for handling such matters.

The FWC decided that because of the clear terms of reference in the Investigation Protocol provided by the lawyers to the consultant investigator which identified that the dominant purpose of the investigation was to allow the lawyers to provide legal advice and that there had been no departure from those terms in subsequent conduct, the report and ancillary documents were in fact privileged. This decision was consistent with earlier cases.

What are the factors that need to be considered?

It is vitally important to remember that privilege will only attach if the investigation is established correctly.  Further,  just because an investigation starts off as privileged it doesn’t mean that this status cannot be waived by the parties as the process progresses.

Tips for establishing and maintaining privilege

Use a law firm or in-house legal counsel to brief the investigator. Where HR engages an external investigator to undertake an investigation it cannot be privileged unless that investigator is in fact a lawyer and is being retained for the dominant purpose of providing legal advice. The safest means of engaging an investigator is to do so via a lawyer (either internal or external) as the investigation report is then being produced to the lawyer so that the lawyer can provide legal advice to the business.

Be crystal clear on the dominant purpose of the investigation. This should be reflected in all communications including the instructions to the lawyer, the terms of reference or protocol drafted by the lawyer and provided to the investigator.

Terms of reference are key. The terms of reference provided to the investigator by the instructing lawyer have to clearly state that the dominant purpose of the investigation is to allow the lawyer to provide legal advice to the employer about the complaint. The investigation should be limited to findings of fact only as to whether the allegations are in breach of the specified policies or laws.

Once the investigation is underway, the investigator should be communicating through the lawyer only, consistent with the purpose of assisting in the provision of legal advice. There should be no direct liaison between the investigator and the business except for minor logistical matters.

Be careful with communications to employees about the investigation. Ensure that all communication is consistent with the terms of reference of the investigation. Care should be taken with referring to the process as an “independent investigation”. While this may be true, it suggests a dominant purpose other than the provision of legal advice and has been held in the past to be a waiver of privilege.

Always keep processes separate. Ensure that investigation and its findings are separate to any disciplinary procedure which may flow from the advice received about the investigation findings. Remember that the purpose of the investigation is to give the legal adviser information such that they can advise the employer. It is then up to the employer to consider all the factors to come to a decision as to the appropriate action. A decision should not only be based on the investigation findings but the employer’s consideration of those findings when considering the whole picture. This must also be reflected in communications about the decision.

Do not have a policy which dictates how and why an investigation may be conducted. Best practice grievance procedures allow the employer flexibility to choose whether or not to investigate complaints and how those complaints may get investigated.

Do not communicate to employees during an investigation that it is being conducted as part of “company policy” or in accordance with the employee’s wishes. It is acceptable for an investigation to have a dual purpose and still be privileged. For example, the FWC has previously held that an investigation undertaken for the purpose of obtaining legal advice and for the purpose of complying with company policy was still privileged as the former was the dominant, or overriding purpose.

Ensure that the investigation report when provided by the legal adviser is distributed on a “need to know” basis only. It is a confidential document and should be treated as such.

When disclosing the findings of the investigation to the employee involved be careful. Language used should reflect that it must be for the limited purpose of allowing them to respond in relation to the disciplinary process which may result. This should only ever be done by the employer and not the investigator.

Alice DeBoos
Managing Partner
+61 2 9169 8444
[email protected]

August 4, 2021

The High Court of Australia has today unanimously upheld WorkPac’s appeal against a judgment of the Federal Court about the nature of casual employment: WorkPac Pty Ltd v Rossato [2020] FCAFC 84

So what is a casual employee?

With certainty, we can now say that:

• we have a statutory definition of a “casual employee” in the FW Act;
• which has been practically applied by the High Court of Australia.

Crucially, the High Court held that a reasonable expectation of continuing employment is simply not the kind of firm advance commitment to continuing employment the absence of which typifies casual employment.

Was Mr Rossato a casual employee?

The High Court found that Mr Rossato was at all times, a casual employee of WorkPac both under the Fair Work Act 2009 (Cth) (FW Act) and the enterprise agreement that applied during Mr Rossato’s employment because:

• the contractual arrangements between WorkPac and Mr Rossato did not include a mutual commitment to an ongoing working relationship between them after the completion of each assignment;
• the express terms of the relationship between WorkPac and Mr Rossato were distinctly inconsistent with any such commitment; and
• Mr Rossato’s entitlement to remuneration was agreed on that basis.

Here is the clincher: just because Mr Rossato had a roster that exhibited features of regularity and consistency, it did not mean that there was a commitment between the parties to an ongoing working relationship after each assignment was completed.

What about set off?

Given this, it was unnecessary for the High Court to consider WorkPac’s set off and restitution claims.  For now, reliance can be placed on the new provisions in the FW Act which were recently inserted to avoid double-dipping.

What does this all mean?

The decision, which we set out in more detail below, is a stunning decision for practicality, certainty and commerciality. It puts to bed the turbulent history of case law concerning casual employees. The High Court has in effect gone back to the common law approach which was in part departed from by the Federal Court in both WorkPac decisions.

Employers and employees alike can take great comfort from the High Court’s decision and the Federal Government’s statutory definition of casual employee introduced into the FW Act.

The HCA Decision

In determining whether Mr Rossato was a casual employee for the purposes of the FW Act and under the 2012 EA, the HCA considered:

• whether there was a firm advance commitment;
• whether written contractual obligations reflected a firm advance commitment;
• the meaning of patterns of work and rosters made in advance; and
• the expectation of continuing employment as distinct from a firm advance commitment.

The FW Act

Mr Rossato was found to be a casual employee for the purposes of ss 86, 95 and 106 of the FW Act in respect of each of the six assignments with WorkPac between 28 July 2014 and 9 April 2018.

The HCA found that s 65(2)(b)(i) of the FW Act contemplates that a casual employee may hold casual status despite being “a long term casual employee” employed on a “regular and systematic basis”. Further, that s 65(2)(b)(ii) demonstrates that the FW Act does not regard a “reasonable expectation of continuing employment” to be inconsistent with the nature of casual employment.

The High Court acknowledged that while over time, Mr Rossato may have developed an ‘expectation of continuing employment’, this expectation remains a ‘mere expectation’, distinguishable from a ‘firm advance commitment’.

The fact that Mr Rossato’s pattern of work was governed by shifts fixed long in advance was found not to be evidence of any commitment to a continuing employment relationship following the completion of an assignment.

Contractual Obligations

The High Court found that the various contracts between WorkPac and Mr Rossato precluded a ‘mutual commitment to an ongoing working relationship between them after the completion of each assignment’. Further, that Mr Rossato was paid in accordance with this understanding.

The High Court considered that as Mr Rossato’s work was expressly on an ‘assignment-by-assignment basis’, he was able to accept or reject any offer of an assignment and that the Full Court erred in characterising the established shift structure as a future commitment, as it did not promise work beyond the completion of each assignment.

The Court made reference to the binding contractual obligations of the parties to find there was a lack of firm advance commitment in the General Conditions. In fact, they were all consistent with terms and conditions of casual employment, remunerated with a casual loading of 25%.

Because the High Court has found Mr Rossato was at all times a casual employee under both the FW Act and the relevant enterprise agreement, it was unnecessary to consider WorkPac’s submissions in relation to whether it was entitled to set off or seek restitution for the casual loading paid during his employment.

What does this mean for employers?

We now have a definition for “casual employee” in the FW Act in s 15A.

We also now have a practical application to the many facets of casual employment at common law which is consistent with the statutory definition.

When employing a casual employee, it is important to ensure that:

1. The offer is in writing and sets out the basis for the casual employment, consistent with s 15A of the FW Act – remember there can be no firm advanced commitment to continuing and indefinite work according to an agreed pattern of work.
2. The written contract expressly includes the basis for payment, including the fact that a causal loading is being paid.

A reminder to all employers that the Fair Work Commission (FWC) is set to make changes to casual terms in modern awards by 27 September 2021. The review will reconcile relevant terms in modern awards with the definition of casual employment in s 15A of the FW Act and casual conversion arrangements introduced earlier this year.

Kingston Reid will provide you with an update once the FWC has finalised its review.

If you have any questions, do please contact us.

July 21, 2021

On 20 July 2021 new regulations, known as the Occupational Health and Safety Amendment (Infringements and Miscellaneous Matters) Regulations 2021 (Vic), were made to establish a safety infringement notice scheme in Victoria (Scheme).

Under the Scheme, which commences on 31 July 2021, WorkSafe inspectors will have the power to issue “on-the-spot” fines to employers and other duty holders, including workers, who are found to be in breach of particular provisions of the OHS Act and the OHS Regulations.

The Scheme permits WorkSafe inspectors to issue infringement notices in respect of 54 prescribed offences, such as:

• a failure by an employer to allow a health and safety representative(HSR) to have access to information relating to the HSR’s designated work group identified in section 69(1)(a) of the OHS Act;
• an employer allowing an employee to perform high risk work without an appropriate high risk work licence;
• a person (i.e. a worker) who holds a construction induction card not keeping the card available for immediate inspection on request;
• a failure by an employer or self-employed person to keep a copy of a safe work method statement for high risk construction work for the duration of that work;
• a failure by the principal contractor for a construction project to keep, and make available for inspection, a copy of a health and safety co-ordination plan (and any revisions to that plan) for the duration of the project.

For an individual, the fine will be up to $363.48. For a company, the fine can be up to $1,817.40.

The intent behind the Scheme appears to be to use infringement notices to punish offences where the contraventions are clear and do not need to be established through a detailed investigation process.

WorkSafe is not precluded from taking other remedial action against a person simply because an inspector issues them with an infringement notice. For example, it will remain open to the inspector to issue an improvement or prohibition notice to the recipient of an infringement notice. However, the intention appears to be that if an infringement notice is issued, it is unlikely that a prosecution for the same offence will follow.

It will be important for anyone who receives an infringement notice to ensure that it has been validly issued and seek advice about whether it is susceptible to challenge.

If you have any questions about the Scheme, please contact us.

July 14, 2021

With the restrictions set to increase for the Greater Sydney region and extend for weeks, the spotlight is currently on the Fairfield local government area and Greater Sydney workers who work more than 50km outside of Greater Sydney (being the outer boundary of Shellharbour, Wollongong, Wollondilly, Blue Mountains, Hawkesbury and Central Coast local government areas).

The NSW Government has now issued Health Orders which came into effect at 12am on Wednesday 14 July 2021, but which take practical effect from 17 July 2021 where a relevant affected worker has taken reasonable steps to be tested by 17 July 2021.  

The effect of the Health Orders is to mandate testing for affected workers even if they don’t have symptoms.

Affected workers are those who:

• reside in, or are staying in temporary accommodation in, the local government area of the City of Fairfield, or
• workers who reside in Greater Sydney, or are staying in temporary accommodation in Greater Sydney, and who work more than 50km outside of Greater Sydney.

With approximately 40,000 workers in the Fairfield local government area expected to be moving in and out of the area, more COVID-19 clinics will be needed to minimise queues, reduce frustration and enable work to continue uninterrupted.

For employers who have workers working in, or traveling in and out, of the Fairfield local government area or require testing due to travel beyond the 50 km Greater Sydney boundary, flexibility will need to be provided to enable workers to meet the requirements the Health Order.  In short this means employers should:

1. Assess your operations and consider whether movement of workers in and out of the area can be minimised. To the extent it can, consider the capacity to issue lawful and reasonable directions to workers to perform alternative duties, within their skill set which do not involve travel into or out of the local government area.
2. Consult with those workers who must continue to travel in and out of the Fairfield local government area to perform their roles. Clear guidance will need to be given to those workers in respect of:

• • issuing a direction to comply with the Health Order requirements; and
  • the flexibility arrangements can be put in place to enable the worker to attend a testing site and in circumstances where the testing takes longer than anticipated.

3. Communicate with impacted workers on the need to provide evidence of the time and fact of the test. While any failure to comply with the Health Orders carries consequences as contemplated by the Order, a failure to follow a lawful and reasonable direction can result in disciplinary action by the employer. Proof of the test can be in the form of a text message, email or other forms of evidence provided by the testing service or laboratory.

While some workers will seek to get tested prior to working hours, it will not be possible for all and as such there will invariably be situations where a worker is attending a test site during working hours. Many employers will likely be able to absorb this inconvenience and continue to pay the worker notwithstanding they are not working for the period they attend the COVID-19 testing clinic.

However depending on the level of disruption and the time it takes for a worker to be tested, or difficulties the employee has in accessing testing, consideration may be given to whether a variation of working hours may be agreed by the parties.

Key Takeaways

Keeping employees safe and complying with the Health Orders is likely to get harder over the coming days and weeks, as restrictions change and are tightened.

Ensure that you are aware of the latest restrictions.  Continue to:

• Assess your operations. Can they continue in manner that ensures you are in compliance with them?
• Consult with your employees about what the restrictions mean, and how the business can comply with them.
• Communicate with impacted workers about what they need to do.

Importantly, occupiers of premises (other than residential premises) must not permit an affected worker to enter or remain at the premises unless they have evidence of a required COVID test. This means that businesses need to check if affected workers can enter their premises.

Further, any person may be directed, if requested by a police officer, to provide proof of residence and evidence that the person has been tested, to ascertain if they are an affected worker.

June 24, 2021

On 22 June 2021, the Victorian Government introduced the Occupational Health and Safety and Other Legislation Amendment Bill 2021. If passed, the Bill will make a number of significant amendments to the Occupational Health and Safety Act 2004 (OHS Act), some of which align quite closely with aspects of the harmonised WHS legislation in place outside of Victoria.

Extending protections for labour hire workers

The Bill extends the definition of an “employer” and “employee” to ensure that hosts of labour hire workers owe the same duties to those workers as they owe to their own employees.

The Bill adopts the definitions of “worker”, “provider” and “labour hire services” contained in the Victorian Labour Hire Licensing Act 2018.

Employers who host labour hire workers will need to review their practices to ensure that, if they are not already doing so, they exercise the same degree of care for the safety of labour hire workers as they do for their employees.

These changes will come into effect six months after the Bill receives Royal Assent.

New obligation for duty holders to consult, cooperate and coordinate regarding labour hire worker safety

The extended protections for labour hire workers will mean that labour hire providers and host employers will owe duties under the OHS Act in respect of the same workers.

The Explanatory Memorandum notes that expanding the definition of employee to include labour hire workers is not intended to require a duplication of effort by host companies and labour hire providers.

However, to encourage labour hire providers and hosts to work together to ensure that all duties owed to labour hire workers are met, the Bill proposes a new obligation – namely every person who owes a duty under the OHS Act to the same worker must, so far as is reasonably practicable, “consult, cooperate and coordinate” (CCC) activities with each other person who has a duty in relation to the same worker.

If passed, the new CCC duty will come into effect six months after the Bill receives Royal Assent.

Failure to comply with the CCC duty will be a criminal offence punishable by fines of up to 180 penalty units (approximately $32,713) for individuals or 900 penalty units (approximately $163,557) for companies.

No insurance against safety fines

The Bill also proposes to prohibit and make void any terms in a contract or other agreement which seek to insure or indemnify a person against liability to pay a pecuniary penalty under the OHS Act. If passed, this prohibition will come into effect the day after the Bill receives Royal Assent.

On and from the first anniversary of the Bill receiving Royal Assent, it will also be an offence to be party to, or enter into, a contract or other agreement of the kind described above.

Importantly, these prohibitions and offences do not extend to insurance policies which provide cover and indemnity for legal defence costs.

If these provisions are enacted, employers will need to discuss them with their insurance brokers to ensure that policies obtained going forward, including liability insurance for directors and officers, do not result in employers or their officers inadvertently committing an offence.

Broadening of powers of Health & Safety Representatives (HSRs) and union right of entry permit holders

The Bill proposes to grant new powers to HSRs and union right of entry permit holders, namely to:

• take photographs
• take measurements
• make sketches
• make recordings

Currently, these powers are only available to WorkSafe inspectors.

The Bill will make it a criminal offence for a union permit holder to intentionally use, disclose or provide to another person photos, measurements, sketches or recordings obtained while exercising right of entry, for a purpose not reasonably connected with the exercise of powers under the right of entry provisions of the OHS Act.

This proposed offence should capture the online dissemination of photos or video footage taken by union permit holders at a workplace.

If the Bill is passed, employers will need to update their right of entry policies and protocols to ensure that they take into account the above.

Please contact us if you have any questions or need assistance.

June 4, 2021

What has happened?

Today, the Fair Work Commission issued a provisional view that it will insert an exemption rate into the Restaurant Industry Award for an initial period of 12 months.

If the clause is inserted into the Award, it will mean an employer can agree to pay an employee an hourly rate of pay that is 170% of the award rate of pay and the employee will be exempt from overtime, penalty rates and allowances.

Why is this significant?

Award compliance has proven to be very difficult in recent years. Exemption rates were common prior to award modernisation but were largely phased out in that process. They make complying with awards much simpler.

Exemption rates generally do not attract the onerous time keeping obligations that come with annualised salary provisions. Whether this will be achieved in the clause being proposed in the Restaurant Award is not clear.

One hopes the Commission acts on its provisional view and inserts exemption rates into the Restaurant Award as well as other industry awards. If it does, it will be a big step in improving award compliance.

Why has the Commission made this decision?

The change has been triggered by the unique set of circumstances pertaining to the COVID-19 pandemic. There can be no doubt that the circumstances warrant improved flexibility and less regulatory burden in the restaurant industry, which has been particularly hard hit.

In our view, the benefits associated with exemption rates would be well placed in other industries. We think this helps to solve a problem that existed prior to COVID-19, which was the excessive regulatory burden associated with award compliance.

Tell me the detail

For those of you that appreciate the detail, you can read the Commission’s statement here. The clause being proposed is as follows:

R.3 Exemption Rate

R.3.1 An employer and a full time employee (paid at the Level 5 or Level 6 rate of pay) may enter into an agreement to pay the employee no less than 170% of their relevant Level rate of pay each week as set out in clause 18 Minimum Rates of this award (the Exemption Rate).

R.3.2 Where an agreement to pay the Exemption Rate has been made, the following clauses of this award shall not apply:

1. 1. clauses 16.5 and 16.6 (meal break);
   2. clause 21 (allowances);
   3. clause 23 (overtime rates) but not clause 23.2; and
   4. clause 24 (penalty rates).

R.3.3 Where an agreement has been made to pay an employee the Exemption Rate the employee must be paid the Exemption Rate for each hour worked up to and including 57 hours in a week and for hours worked in excess of 57 in a week the employee must be paid:

1. 1. 150% of the Exemption Rate for the first two hours in excess of 57 in the week; and then
   2. 200% of the Exemption Rate thereafter in the week.

R.3.4 The Exemption Rate shall be the rate for the purposes of calculating:

1. 1. personal leave; and
   2. annual leave.

R.3.5 Clause R3 does not apply to employees classified under the administrative and general stream (Schedule A.4).