Insights & News

July 27, 2022

“Making sure our laws protect and promote equality for our diverse communities is a key priority for the Palaszczuk government.”

– The Honourable Shannon Fentiman, former Queensland Attorney-General, May 2021.

Background

In May 2021, Queensland’s Attorney-General requested the Queensland Human Rights Commission (QHRC) conduct a review of the Anti-Discrimination Act 1991 (Qld) (AD Act) to ensure it continues to provide suitable protection against discrimination and sexual harassment.

After a review process which attracted over 125 written submissions from various stakeholders, the QHRC is due to present its final report with recommendations for legislative reform to the Attorney-General on 30 July 2022.

In this insight we explore the amendments the Queensland Government may make to the AD Act and what these changes will mean for employers operating in Queensland.

We also identify proactive steps for employers to take ahead of the changes being implemented.

What changes are likely to be made?

While a Bill proposing amendments to the AD Act is yet to be drafted, having regard to the terms of reference of the review and submissions already made, we expect the Queensland Government will propose the following key changes.

The proposed changes will likely result in a more simplistic AD Act for complainants, which may result in a higher proportion of successful discrimination complaints. Employers will need to pay close attention to the amendments as they will also act as a signal to what may arise federally.

One discrimination test

The Queensland Government is likely to redefine direct and indirect discrimination in the AD Act and clarify that they are not mutually exclusive and a person may experience conduct amounting to both. For example, in Taniela v Australian Christian College Moreton Ltd [2020] QCAT 249, the complainant, due to his race, was unable to cut his hair. The Tribunal found the respondent indirectly discriminated against the complainant by imposing a term in its uniform policy prohibiting male students from having long hair and directly discriminated by proposing to expel the student for failing to comply with the policy.

The distinction between direct and indirect discrimination has resulted in unsuccessful complaints of discrimination because the incorrect type of discrimination was pleaded. This occurred in Perry v State of Queensland & Ors [2006] QADT 46 (Perry), where the Tribunal member identified that indirect discrimination had occurred but ultimately found no discrimination was made out because the complainant had alleged direct discrimination.

The existing tests also do not contemplate that a person may experience a cumulative disadvantage where they are subject to discrimination on the basis of more than one protected attribute.

The Government may look to discard the two tests in favour of a single test for establishing discrimination, such as by defining discrimination as “any act or omission, including a policy, law, rule, practice, condition or situation, which directly or indirectly disadvantages a person or group with a protected attribute.”

End of the ‘comparator test’

In streamlining the definition of discrimination, the Queensland Government may abandon the “comparator test” that features in anti-discrimination legislation in most Australian jurisdictions in favour of an ‘unfavourable treatment’ test.

The current test requires a comparison between the treatment of the person who has a protected attribute and the treatment that is, or would be, afforded to a person in the same or similar circumstances without the attribute (the ‘comparator’). The comparator test can be problematic to the extent it requires Courts and Tribunals to hypothesise how the respondent may have treated a person without the attribute.

The test for indirect discrimination also involves a comparative test in that there must be an unreasonable requirement imposed that the complainant cannot comply with and which a higher proportion of people without the attribute can comply. This test poses significant evidentiary hurdles for complainants because they are required to identify a pool of people without the same attribute who can comply.

It is likely Queensland will follow the lead of the Australian Capital Territory and Victoria in departing from these tests, with both jurisdictions now asking whether the complainant was treated unfavourably because of a prohibited reason/s or whether a term or condition has the effect of unreasonably disadvantaging a person with a protected attribute.

Positive duty to accommodate

Employers currently do not need to make reasonable accommodations for a person with an impairment if doing so would impose an unjustifiable hardship on the employer.

The Queensland government may propose to remove or redefine the unjustifiable hardship exemption, with the potential for employers to be subject to an express positive obligation to make reasonable adjustments for people with protected attributes. Currently, the obligation to provide special services or facilities for a person with an impairment is not easily enforceable, particularly because of the breadth of what may amount to “unjustifiable hardship” on the employer. This is likely to change with the only exemption available being refined to specific matters such as employer affordability.

The positive duty may be extended to other protected attributes, such as in Victoria, where employers are obliged to make reasonable adjustments for people with a disability and workers who are parents or carers, with no defence of unjustifiable hardship available.

Additional protected attributes

The terms of reference question whether there is a need to extend protection to a wider range of attributes to better reflect the diversity of modern society. The attributes earmarked for potential protection include a person’s spent criminal convictions, irrelevant criminal record, expunged homosexual conviction, irrelevant medical record, immigration status, employment activity and physical features.

Protecting the proposed attributes would require employers to pay particular attention to recruitment policies and procedures, to ensure a person’s criminal history, medical records, weight or immigration status is only collected where relevant to the inherent requirements of the position. If information is irrelevant, it should not be collected and, if collected, employers should be cautious not to rely on it in making decisions in relation to the person.

Including employment activity as a protected attribute would mean public sector employees would also have protections akin to the workplace rights protection under the FW Act and employers would need to ensure they do not discriminate against employees for making a reasonable request or raising a concern about their employment entitlements.

Reverse onus of proof

The QHRC’s review also floats the idea of reversing the onus of proof in a discrimination claim to involve a rebuttable presumption, requiring the complainant to simply establish the discriminatory action was taken and they have a protected attribute. A Court or Tribunal would then assume the employer took the action because of the person’s protected attribute, unless the employer can prove otherwise.

While this would provide some consistency for employers with the process under the general protections laws in the FW Act, it would be a novel approach for anti-discrimination legislation in an Australian jurisdiction and may pose a significant burden on employers when defending claims.

Bolstering protections from sexual harassment

The Queensland Government is likely to give legislative effect to recommendation 17 from the [email protected] report by introducing a positive duty on employers to “take reasonable and proportionate measures to eliminate sex discrimination, sexual discrimination, sexual harassment and victimisation, as far as possible”.

This duty would complement an employer’s existing duties under the Work Health and Safety Act 2011 (Qld) to eliminate or manage hazards and risks to a worker’s health and safety (including psychological hazards).

It is likely the Queensland Government will also amend the meaning of sexual harassment to capture indirect sexual harassment. To constitute sexual harassment, conduct is currently required to be directed towards a particular person or have some connection with them and be carried out in circumstances where it was reasonable to anticipate the person would be humiliated, offended or intimidated. This does not protect in examples like Perry where posters sexualising women were displayed in the workplace but, in lieu of sufficient sexual harassment protections, the complainant was unsuccessful in her claim as the posters did not constitute direct discrimination. The Government may resolve this by taking inspiration from the ACT’s provision that sexual harassment may occur “to, or in the presence of” the complainant.

Even without the imposition of a positive duty, it is important that employers take deliberate steps to prevent sexual harassment in the workplace to avoid civil liability. The significantly larger award of damages for sexual harassment and sex discrimination in Golding v Sippel and The Laundry Chute Pty Ltd [2021] QIRC 074 makes clear the increasing gravity with which sexual harassment in the workplace is treated by Courts and Tribunals and emphasises the importance of employers ensuring the workplace is free from sexual harassment and sex discrimination.

What does this mean for employers?

The Queensland Government is likely to introduce more stringent requirements for employers to be proactive in eliminating discrimination and sexual harassment in the workplace.

Employers will need to be aware of their obligations with respect to discrimination and sexual harassment to safely operate within a legislative framework that has a lower threshold when establishing that discrimination has occurred.

Whilst there is yet to be a draft Bill indicating the Government’s proposed changes, we recommend employers start proactively considering the steps they can take towards compliance with any legislative requirements likely to be introduced. This includes:

• Conducting a risk assessment/analysis of the workplace to identify where discrimination and sexual harassment could occur physically and online and develop mitigation strategies to manage those risks.
• Delivering refresher training to employees to identify discrimination and sexual harassment and what to do about it including active bystander intervention.
• Conduct a thorough review of all policies and procedures to the extent they relate to discrimination and sexual harassment and consider how they may need to be amended to comply with the foreshadowed legislative changes.
• Review recruitment processes to ensure irrelevant information is not collected and merit-based decisions are being made.

The team at Kingston Reid are here to assist if you need support with reviewing policies and procedures, delivering training to staff and identifying the risks within your workplace.

July 22, 2022

A recent decision of the Federal Court serves as a timely reminder to ensure that post-employment restraint clauses in contracts of employment are well drafted and appropriate to each employment circumstance.

In the decision of United Petroleum Pty Ltd v Barrie [2022] FCA 818, the Court declined to make orders enforcing a post-employment non-compete clause on a temporary basis because the clauses of the employment contract imposed greater restrictions than appeared necessary to protect United Petroleum’s business.

Are post-employment restraints enforceable?

The starting point for post-employment restraints is that they are presumed void, or unenforceable unless an employer can show that, in the particular circumstances of an employee, the restrictions are reasonable, are necessary to protect a legitimate business interest of the employer and are not against the public interest, including the public interest in not preventing an individual from earning an income.

What was United Petroleum’s application?

United Petroleum had approached the Court seeking interlocutory, or temporary, orders preventing their former Queensland Wholesale State Manager from commencing employment with IOR Services Pty Ltd, a business operating in the petroleum products sector. The temporary orders where being sought until the Court could properly hear an application to enforce the post-employment restraints to their full extent.

The employment contract in question contained post-employment restraints in which the employee had agreed not to:

‘(a) be engaged, involved or materially interested in any activity for or on behalf of a business, firm or undertaking of substantially the same kind as [he] performed during [his] employment with [United Petroleum], in which use or disclosure of confidential information may be useful or advantageous to the business, firm, undertaking or to [him];

…[and]

(e) carry on, advise, provide services to or be engaged, concerned or interested in or associated with or otherwise involved in any business activity that is competitive with any business carried on by [United Petroleum].’

Was there a legitimate business interest to protect?

In considering whether those restrictions were reasonable and necessary to protect a legitimate business interest of the United Petroleum, the Court ultimately found that the post-employment restraints went beyond what was necessary to protect its legitimate commercial interests.

The Court said that the post-employment obligations were drafted so that it did not matter whether the employee actually had possession of confidential information belonging to United Petroleum, whether taking up another role would jeopardise any legitimate commercial interest that the applicant might wish to protect, or whether the activities the clauses sought to restrict would have the capacity to inflict harm on United Petroleum.  There was some consideration as to whether the post-employment restraints could be read down (or narrowed) to make the clause enforceable; however, the Court found that it was not possible to do so in a way that preserved only a necessary application of the obligations.[1]

Against the interests of United Petroleum, the Court was required to balance the interests of the employee, and in particular what harm the employee might suffer if the post-employment restraints were enforced temporarily to prevent the employee from taking up his new position.

Having undertaken not to until the application for interlocutory relief was decided, the respondent had been unable to work in his new role for several months. His evidence was to the effect that that inability posed predictable economic hardship for him and his family. That hardship very much tended against the appropriateness of interim relief.

Ultimately, the Court was not satisfied that the post-employment restraints needed to be enforced on a temporary basis until it could decide finally because it was not satisfied that the restraints were necessary to protect United Petroleum’s legitimate business interests.

Key takeaways

Whether a non-compete restraint is enforceable will always turn on the relevant facts. Post-employment restraint clauses should always be drafted having regard to an individual employee’s position within the business.

Factors that weigh in favour of enforceability include but are not limited to:

• Seniority of the former employee and position within the corporate structure;
• The access that an employee had to confidential information that, if in the hands of a competitor, could cause damage to the business;
• Knowledge of client relationships, techniques and resources used by the company to sell or market its goods or services to customers and retain customers;
• Responsibilities of the former employee which may include responsibility for bringing in new clients to the business;
• The restraint period and geographical area are reasonably necessary to protect the business’ legitimate commercial interests.

Next steps for employers

• Review current post-employment restraint clauses and think critically about whether they impose reasonable restrictions particularly in relation to non-compete clauses.
• Draft post-employment restraints to apply to the extent the individual can actually harm the legitimate business interests of the employer.
• Ensure that the post-employment restraint is appropriate for the employee’s position within your business, the confidential information they have access to, and the relationships with customers, clients, and suppliers they have cultivated on behalf of your business.

[1] Note: the Restraint of Trades Act 1976 (NSW) which applies in NSW only, allows the Supreme Court of NSW to order that a restraint is valid in a way that the Court thinks fit and appropriate to the circumstances. There is no equivalent legislation in Qld, any other State, or federally.

July 15, 2022

A Labor government will … implement all 55 recommendations in the [email protected] report – not just the bits that are easy.

– Australian Labor Party 2022 Women’s Budget Statement

During the 2022 Federal Election, the Labor Party promised that – if elected – they would implement all recommendations contained in the [email protected] Report published by the Australian Human Rights Commission (AHRC). This report proposed extensive changes to federal sex discrimination legislation in order to properly address the prevalence of sexual harassment in Australia’s workplaces.

Now that the Labor Party is in government, attempts will be made to legislate these changes. In this insight we explore the likely changes and what it might mean for employers.

Background  

After [email protected] was handed down, the former Liberal-National Federal Government significantly amended the Sex Discrimination Act 1984 (Cth) (SD Act) and the Fair Work Act 2009 (Cth (FW Act).

These changes, which took effect from September 2021, included a prohibition against “harassment on the grounds of sex”, expanding the SD Act’s scope to ensure it covered all “workers” and “workplaces”, while also introducing a new jurisdiction in the Fair Work Commission to make orders stopping sexual harassment at work.

However, the Government stopped short of implementing all of the changes recommended by the AHRC.

What changes will the new government make?

While no definite amendments have been announced, we expect the new Labor Government will make changes in the following key areas.

Introducing a positive duty on employers

The Government is likely to introduce a positive duty on employers in the SD Act to “take reasonable and proportionate measures to eliminate sex discrimination, sexual discrimination, sexual harassment and victimisation, as far as possible” ([email protected], Recommendation 17).

This would bring the SD Act into line with model work health and safety (WHS) legislation, which imposes through the broad duty to eliminate or manage hazard and risks to workers health, a positive duty on employers to prevent sexual harassment so far as reasonably practicable.

The AHRC suggested that, in determining whether a measure was ‘reasonable and proportionate’, the SD Act prescribe factors that must be considered including the size of a persons’ business or operations, the nature and circumstances of their business or operations, their resources and operational priorities, the practicability and cost of the measures as well as other relevant factors.

The AHRC heard in the [email protected] inquiries that a lack of a positive duty meant employers placed a higher priority on complying with WHS and employment laws, leaving a heavy onus on individuals to complain of breaches to discrimination law. These changes, if made, would mean the onus will now be on the employer to do everything they can to ensure breaches don’t happen in the first place.

Expanding the powers of the AHRC

The Government is also likely to introduce broad powers for the AHRC in the Australian Human Rights Commission Act 1986 (AHRC Act) to assess compliance with the positive duty outlined above ([email protected], Recommendation 18) and investigate workplaces over systemic sexual discrimination and harassment ([email protected], Recommendation 19).

In particular, the AHRC specified that they should be given powers to require persons to give information, produce documents and examine witnesses. Penalties should apply for non-compliance when conducting such an inquiry. They suggested they be given the power to initiate ‘own-motion’ investigations.

While the Commission already has powers in section 31(b) of the AHRC Act to inquire into “act or practice” that may constitute discrimination, these inquiry functions are limited. The AHRC noted in [email protected] that their powers to require information, documents and examine witnesses are not available when conducting an inquiry into conduct done by or on behalf of a State or an authority of a State, within a State, or under State laws, that may amount to discrimination under section 31(b) of the AHRC Act.

New statutory principles

Labor will likely introduce the concept of ‘gender pay equity’ as an objective of the FW Act as well as a statutory ‘Equal Remuneration Principle’ to guide the Fair Work Commission. While not a recommendation in the [email protected] Report, Labor announced during the election of an intention that such changes would be made if elected.

The ‘equal remuneration principle’ is not a new idea. It was established by the International Labor Organisation some 70 years ago. It states that men and women should receive equal pay and benefits for the same work which requires the same skills, responsibility and effort under similar working conditions.

But, so the principle goes, even if the jobs are entirely different, equal remuneration is still a must where the jobs provide equal value. “This concept,” said the ILO, “ensures that men and women receive equal remuneration for jobs which may involve different types of qualifications, skills, responsibilities or working conditions, but which are nevertheless of equal value”.

Introducing cost protections in the Federal Court

Labor may now also introduce a cost protection provision in the AHRC Act if a claim proceeds to the Federal Court ([email protected], Recommendation 25).

The AHRC viewed this as necessary due to concerns that complainants of sexual harassment would be deterred from commencing proceedings and pursuing genuine claims based on a fear that they would be liable to pay the respondent’s legal costs.

The provisionwould most likely ensure that costs would only be ordered against a party if satisfied that they instituted proceedings vexatiously or without reasonable cause, or if the court is satisfied that a party’s unreasonable act or omission caused the other party to incur costs. This would bring the AHRC Act in line with the current cost protections in section 570 of the FW Act.

Legislative superannuation contributions on paid parental leave

The Government shelved the proposed change in May, but the Prime Minister stated that the party still wants to introduce it. Assistant treasurer Stephen Jones said that “whether we’re able to do it in the first term or not, should become pretty clear by the end of the year”.

Employers should watch this space closely, especially towards the latter half of the year.

What does this mean for employers?

It is clear that the government plans to take a strong stance in favour of gender equality and against sexual harassment at work, flagging changes that place the burden heavily on employers to take proactive steps or face serious consequences otherwise.

The introduction of a positive duty in the SD Act will mean the onus will now heavily be on businesses to proactively pursue the elimination of sexual harassment.

Whilst there has been no legislative change, we recommend employers act now so they are prepared once legislative attempts are made. In particular, companies should:

• Identify key risk factors in their workplaces that may lead to sexual harassment and put together an action plan to eliminate or reduce those risks as far as possible.
• Invest in training for all staff (including bystander training) to ensure employees know how to identify all forms of sexual harassment and what to do about it.
• Conduct an extensive review of all sexual harassment policies, ensure they meet the new definitions contained in the SD Act (if they don’t already) and consider how to amend those policies to strengthen compliance with a primary duty, if it becomes law.
• Review their payroll data and consider whether any changes need to be made in light of a potential introduction of the ‘Equal Remuneration Principle’.

As always, the team at Kingston Reid are here to lend a helping hand if you need assistance delivering training to your staff, reviewing your policies and procedures to ensure compliance and identifying the different risk factors within your workplace.

July 7, 2022

Last year, we wrote about WHS changes afoot as a result of a meeting of Commonwealth, State and Territory Ministers centred around the Boland review, including their agreement to amend the model WHS Regulations to deal with psychological injuries.

Flowing from this agreement, and a further commitment from the Victorian Government to develop regulations to provide “clearer guidance” to employers on their obligations relating to psychological risks and hazards, the Victorian Government has prepared a draft amendment to Victoria’s Occupational Health and Safety Regulations, which are expected to come into effect in July 2022 following consideration by the Victorian Government.

If enacted as currently proposed, the amendment will introduce:

New definitions relating to “psychosocial hazards”

These definitions are aimed at supporting employers’ understanding of “psychosocial hazards”, which will be defined to mean:

“any factor or factors… that may arise in the working environment and may cause an employee to experience one or more negative psychological responses that create a risk to their health and safety.”

The amendment thereby formalises the requirement for employers to, so far as is reasonably practicable, protect workers from psychosocial hazards, such as:

The risk of exposure to traumatic events or content

This psychosocial hazard was discussed in the recent and widely-reported High Court appeal in Kozarov v State of Victoria,[1] in which the Office of Public Prosecutions (OPP) was found to have failed to meet its obligation to take reasonable steps to safeguard the mental health of Ms Kozarov, a public prosecutor with the OPP whose work involved “cases of an abhorrent nature involving child rape and offences of gross depravity”.

If your employees are exposed to any such hazards, it would be wise to revisit any trauma policies and confirm that they are in fact being enforced as intended.

Job demands

While employers are no doubt already alive to the potential psychosocial hazards of “high job demands”, which are to be formally defined to mean “sustained or repeated physical, mental or emotional effort which is unreasonable or frequently exceeds the employee’s skills or capacity.

Employers may be surprised to see that the amendment will introduce a further requirement to protect against the risk of “low job demands” – for instance, tasks that are highly repetitive, monotonous or where there is just too little work for an employee to do.

Other types of psychosocial hazards

Some other examples of psychosocial hazards include:

• aggression or violence;
• bullying;
• sexual harassment;
• poor support;
• low role clarity;
• low recognition and reward; and
• poor workplace relationships.

For employers, the first step to addressing these amendments will necessarily be a thorough review of your employee’s systems of work and the way in which they carry out their work, with a view to identifying and eliminating (where possible) any potential psychosocial hazards.

Prevention plans

For employers that have identified any of the following psychosocial hazards:

• aggression or violence;
• bullying;
• exposure to traumatic content or events;
• high job demands; or
• sexual harassment

A written prevention plan must be created which identifies the hazard, addresses the measures implemented to control the hazard (including an implementation plan) and the consultation undertaken in line with section 35 of the WHS Act.

Employers must also be ready to produce any such prevention plan, upon request, to a WorkSafe inspector and, if applicable, an employee health and safety representative and/or member of the employer’s health and safety committee.

Reportable psychosocial complaints

For employers with more than 50 employees, any complaints received about aggression or violence, bullying or sexual harassment will now need to be set out in a biannual written report to WorkSafe.

In addition, a copy of the report must then be kept for 5 years from the date on which it was provided.

Further proposed changes in other jurisdictions

Other jurisdictions have also taken on board the recommendations of the Boland Review in relation to psychosocial risks. Both New South Wales and Western Australia have introduced Codes of Practice for Managing Psychosocial Hazards at Work which will be admissible in court proceedings.

Further changes are expected in Western Australia with the release in June 2022 of the Community Development and Justice Standing Committee Report on sexual harassment against women in the FIFO mining industry.

Canberra has taken its own steps to implement some of the recommendations from the Boland review, via an amendment to the Workplace Health and Safety Act (ACT)including the inclusion of a sexual assault incident into the definition of a “notifiable incident” that must be reported to WorkSafe ACT.

Next Steps

Employers and their Boards need to enquire into how their organisations are managing psychosocial risks, and how the changes in each jurisdiction will impact upon their reporting and governance processes. We are seeing increased regulator enquiries into the management of psychosocial risks in workplaces, and in particular evidence that those risks are being addressed through risk assessment, policies, training, instruction and supervision. We can assist with undertaking a review of your policies and systems and providing training in relation to the management of psychosocial hazards and the proper handling of complaints.

[1] 2022 [HCA] 12

June 30, 2022

The labour hire arrangement is a simple one. One organisation (the labour hire provider) employs workers and provides a service to another organisation (the labour hire user) by assigning those workers to perform work for that labour hire user. The labour hire user pays the labour hire business a fee for providing labour hire workers to work for them. Labour hire workers are employed by the labour hire provider; they are not employees of the labour hire user.

Labour hire arrangements are used in countless industries to provide organisations with specialised labour, often on a temporary basis, allowing them to streamline their processes by outsourcing recruitment and focus on the core aspects of their business. It can also have a beneficial impact on productivity, efficiency and the bottom line.

But this arrangement has been criticised by unions and employee advocacy groups who say it leads to labour hire workers being paid unfairly low wages to cover work that could be done by salaried employees of the labour hire user.

This criticism is one of the areas of workplace and industrial reform the new federal Labor Government says they intend to address through the principle of ‘same job, same pay’.

If this mantra is translated into law, it’s vital that all organisations who use labour hire arrangements, whether they be labour hire providers or labour hire users, understand the potential change and what it may mean for the way they do business.

The current position

Labour hire workers are covered by any relevant award and the National Employment Standards regardless of the employment arrangements in place at the labour hire user. A labour hire provider may have also have its own enterprise agreement that will apply to labour hire workers if it covers the work they perform.

Labour hire workers are not covered by an enterprise agreement made between a labour hire user and its own employees unless the labour hire provider itself is a party to the agreement. Whilst there are occasions (most commonly in manufacturing or heavy industry environments) where the terms of an enterprise agreement between a labour hire user and its own employees, may require the user to ensure that any labour hire provider it engages pays at least the pay and conditions reflected in the users enterprise agreement, these are arrangements set by the labour hire user. They are not enshrined in legislation and where they are not present, a labour hire worker can work side by side with an employee of the labour hire user on different terms and conditions, including different pay.

Labor’s policy position

Labor’s pre-election ‘Secure Australian Jobs’ policy included the principle that if you work the same job, you should get the same pay. Labor has committed to ensuring that workers employed through labour hire providers receive no less than workers employed directly by the labour hire users.

This will undoubtedly be achieved through introducing legislation that makes ‘same job, same pay’ a minimum entitlement, such as including it as a new National Employment Standard.

Labor has a majority in the House of Representatives, meaning it will only need the support of the Greens and one other Senator for such legislation to pass. Given the Greens had a similar pre-election policy stating that “Workers should be paid and treated equally for the same kind of work”, they are likely to support Labor’s amendments making the change almost inevitable. The only stumbling block may be if the Greens and/or an independent or minor party Senator demand more than Labor is willing to give, resulting in a stalemate.

Two weeks ago, Tony Burke said following the summit and more consultation, further consideration will be given to the implementation of the policy.

What would this change mean?

This change will have a significant impact on the way labour hire providers and most labour hire users conduct business.

In practice, it will mean that the wage rates of a labour hire user will be applied to the labour hire workers, where they are higher than they would ordinarily receive from the labour hire provider, and presumably only if there is like-for-like work being done where a clear comparison can be made.

The policy slogan however leaves many questions unanswered:

1. What does ‘same job, same pay’ mean for other entitlements beyond headline pay rates (such as overtime, penalty rates and allowances)? Will these need to be equal? If it is all monetary elements, this will remove one of the key incentives for labour hire users engaging labour hire workers – a more flexible labour model and differentiated cost base.
2. What does ‘same job, same pay’ mean for non-monetary terms and conditions such as working hours, rostering, and flexibility? When the Fair Work Commission applies the Better Off Overall Test when assessing enterprise agreements, they recognise that wage rates are only part of the equation and should not be considered in a vacuum, absent consideration of other terms and conditions. It is therefore an interesting and potentially dangerous approach to look at monetary elements in isolation from other terms and conditions.
3. What does ‘same job’ mean? Not all labour hire arrangements involve labour hire and labour user workers doing the same job side-by-side. Many labour hire arrangements are used by labour hire users to outsource entire functions, so that the labour hire user has none of its own employees performing those jobs. In this case, applying the ‘same job, same pay’ principle has no application.

A wholesale push of the policy may result in this becoming more prevalent which would make the policy self-defeating.

What should the impacted stakeholders be thinking:

For labour hire users:

• It may impact future enterprise agreement negotiations given the agreed wage rate (and potentially other monetary entitlements) may apply not only to an organisation’s employees, but to those they engage via labour hire arrangements.
• It may impact the business case as to whether to outsource certain functions or engage labour hire workers to supplement or replace your workforce.
• It may impact existing labour hire agreements.

For labour hire providers:

• It may change the way labour hire workers are employed, given their rate of pay will differ based on the wage rates of the labour hire user they are providing services to.
• It may impact on existing labour hire agreements.
• It may lead to a reduction or growth in the use of labour hire arrangements.

There is more to consider as the Government continues to develop its position on this important legislative issue. The upcoming Employment Summit, which the Government has indicated will bring together Unions, Employer groups and other stakeholders will be an important opportunity for these issues to be further discussed and detail debated.

We will continue to provide Insights as this issue develops. Please contact us if you have any questions.

June 9, 2022

In a decision published yesterday (CFMMEU v Falcon Mining)[1], a Full Bench of the FWC (Hatcher VP, Catanzariti VP and Easton DP) expressly disagreed with a decision made by another Full Bench (Gostencnik DP, Colman DP Saunders DP) in Simplot v AMWU.[2]

In yesterday’s decision, the Full Bench said they had reached the “firm conclusion” that the Simplot decision was “not correct.” The Full Bench went on to observe that the fact there are conflicting decisions is “obviously unfortunate” and that “appropriate legislative change to clarify the position would be desirable”.

The vexing question is whether the FWC can still arbitrate a dispute under an enterprise agreement if the agreement is replaced or terminated before the FWC has determined the matter.

The answers given by the FWC have varied over time.

In Falcon Mining, the Full Bench observed that:

“Simply put, the Commission is seized of jurisdiction to arbitrate in respect of a dispute arising under a dispute resolution term described in s 738(b) once an application is made in accordance with s 739(6) and the requisite agreement under s 739(4) exists, and it is thereafter entitled to exercise that jurisdiction to completion.”

That passage evokes an earlier decision of a single member of the Commission (now retired), Deputy President Sams, in 2018 in which he wrote “[t]o my mind, once the Commission is seized of jurisdiction, unless there is a specific statutory bar or the replacement Agreement expressly provides for its extinguishment, the Commission’s jurisdiction remains on foot, and is exercisable.”[3]

However, in Simplot, a Full Bench of the FWC disagreed with Deputy President Sams’ conclusion and held “[t]he Commission has no jurisdiction to deal with a dispute under a disputes procedure in an enterprise agreement that has ceased to operate.”

In light of the differing authorities, those employers and employees bound by enterprise agreements are left in something of a quandary. Perhaps the matter will be resolved at the government’s employment summit later this year. Alternatively, it may be a matter for which judicial guidance is needed.

[1] [2022] FWCFB 93.

[2] [2020] FWCFB 5054 (22 September 2020).

[3] APESMA v TransGrid [2018] FWC 6335, [98] (20 November 2018).

May 26, 2022

The 2022 federal election has delivered a new Labor Government. Whilst it is yet to be determined, it looks like Labor will form a majority in the House and Labor and the Greens will form a majority in the senate. This is likely to lead to workplace and industrial relations reform. Although Labor’s ‘Secure Australian Jobs’, ‘Aged Care’ and ‘Equality for Women’ pre-election policies give us a fair idea of what these reforms will be, the presence of Greens and teal independents in our Parliament may see a reprioritisation of proposed reforms or the adoption of reforms which were not front and centre during the election campaign.

Although we will have a better insight into what the key ticket items for the new Government will be following the ‘Australian Jobs Summit’ (which Labor intends to convene with the business community and trade union movement as soon as practicable), we predict what major reforms will be trumpeted in the short to medium term future below.

Au revoir ABCC (again)

It is likely that Labor (with the support of the Greens) will quickly introduce a Bill into Parliament to abolish the Australian Building & Construction Commission (ABCC) and repeal the Building and Construction Industry (Improving Productivity) Act 2016 including the Code for the Tendering and Performance of Building Work 2016.

While the legislation and Code remain in place for now, it is unlikely that moving forward the ABCC will prosecute new matters, particularly those relating to union activities (such as union materials on building sites).

I am woman, hear me reform

As well as being the “climate change election”, the election was also fought and won on gender issues. Labor, the Greens and several teal independents campaigned on the adoption of all 55 recommendations of the Australian Human Right Commission’s (AHRC) [email protected] As such, these recommendations are likely to be implemented sooner rather than later.

As a recap, key reforms recommended in the [email protected] report include:

• Introducing a positive duty for employers to “take reasonable and proportionate measures to eliminate sex discrimination, sexual harrassment and vistimisation, as far as possible”. This will require employers to take active steps to make sure that its workplace(s) are free from sex discrimination, sexual harassment and victimisation. Simply having a policy which states that your organsiation has a zero-tolerance to these things is unlikely to be enough in fulfilling this positive duty. Employers will have to introduce measures such as mandatory bystander training for all employees, appointing “[email protected] Officers” (as you would appoint First Aid Officers) to be a points of contact within your organisation for affected employees and those who need further education, regularly surveying employees on their experience within the workplace and holding managers accountable if there is any failure to prevent, or intervene early in cases of, sexual discrimination, sexual harassment and/or victimisation.
• Give the AHRC broader powers to assess compliance with the positive duty outlined above and investigate workplaces over systemic sexual discrimination and harassment. The AHRC will be given investigative and enforcement powers similar to those of the Fair Work Ombudsman, including powers to:
  • require the giving of information, production of documents and examination of witnesses;
  • enter into enforceable undertakings with an organisation in breach of the positive duty; and
  • apply to the Court for an order requiring compliance with the positive duty.
• Amend the AHRC Act to insert a cost protection provision where a claim proceeds to the Federal Court. The report recommends that such a provision is consistent with section 570 of the Fair Work Act 2009 (FW Act). In this past, the absence of a provision in the AHRC Act similar to section 570 of the FW Act has deterred persons from making an application to the Australian Human Rights and instead, these persons have utilised the general protections provisions in the FW Act (where applicable). Thus, employers can expect to see an uptick in claims made to the AHRC. Particularly in circumstances where the report also recommends that unions and other representative groups should be given the right to bring claims under the AHRC Act to Court.

In addition to the reforms recommended in the [email protected] report, it is likely that the following will be introduced:

• ‘gender pay equity’ as an objective of the FW Act, a statutory ‘Equal Remuneration Principle’ (modelled on the Queensland Equal Remuneration Principle) and the establishment of a ‘Care and Community Sector Expert Panel’ and ‘Pay Equity Panel’ within the Fair Work Commission (FWC). In practice, this may result in a higher number of applications for equal remuneration orders and equal remuneration orders made by the FWC.
• payment of superannuation contributions on paid parental leave. Although Labor appeared to abandon this policy during its election campaign, this policy formed part of the Greens’ platform and therefore, may re-enter the policy debate, particularly if the Labor government secure a second term in 3 years.

Higher wages and ending insecure work

If Labor commands a majority in the House of Representatives in its own right, it is likely to be in a position to implement its ‘Secure Australian Jobs’ policy. Obviously, the composition of the Senate will have a baring on just how aggressive the policy position is pushed.  We consider that there are four key policies that Labor will prioritise.

• Casual definition – Labor will amend the definition of casual employment to enable post-contractual conduct to be taken into consideration (e.g. patterns of work) in assessing whether a casual employee is a “true” casual employee.
• Independent contractors – following the High Court decisions in Jamsek and Personnel Contracting, Labor will also likely introduce legislation which restores the ‘multifactorial test’ (or similar) previously applied by Courts and Tribunals in determining whether a person is an independent contractor or employee. Labor will also likely move to give the FWC new powers to deal with “employee-like” relationships (i.e. relationships in the gig economy), including powers to make orders for these workers and powers to resolve disputes between these workers and the platforms through which they perform work.
• Same job, same pay for labour hire employees – Labor will introduce legislation to ensure workers employed through labour hire companies receive at least the same pay as workers who are employed directly.
• Fixed term contracts – the FW Act will be amended to ‘cap’ fixed term contracts for the same role to two consecutive contracts or to a maximum duration, including renewals, of two years with some limited exceptions.

In addition, as promised during the election campaign, the Albanese-led Government will make a formal submission to the FWC (as part of its annual wage review this year) in support of an increase to the minimum wage. It is unclear what percentage increase the Government will be supporting, however, it is likely to be somewhere between 5% and 5.5% (an increase of 5.5% is contended for by the ACTU). Although any submission made by the Government to the FWC will not necessarily result in an increase higher than 5%, any position taken by the Government will likely impact on current and upcoming enterprise agreement bargaining rounds as unions shift to demand increases in line with any minimum wage increase contended for by the Government.

‘Unstacking’ of the Fair Work Commission

There has been a lot of talk from Labor this election about fixing the “stacking” of the FWC by appointing more “Labor representatives” to the FWC, before returning “half/half appointments”.

Labor will likely seek to justify making its new appointments by extending the powers of the FWC to include:

• the powers of the new expert ‘Care and Community Sector Expert Panel’ and ‘Pay Equity Panel’ (as outlined above).
• powers to deal with “employee-like” relationships (as outlined above).
• (potentially) powers to set minimum pay and standards for owner-drivers as previously done by the Road Safety Remuneration Tribunal. It is unclear whether there will be separate legislative provisions introduced into the FW Act including these powers or whether owner drivers will simply be covered by the new “employee-like” work jurisdiction. It is also possible that Labor will seek to set up a tribunal separate to the FWC to deal with minimum pay and standards for owner drivers, as currently pushed for by the Transport Workers Union.
• powers to regulate registered organisations. Labor will abolish the Registered Organisations Commission and refer serious contraventions of regulatory laws by registered organisations to the Australian Securities and Investments Commission for investigation and prosecution.
• (potentially) powers to conciliate and arbitrate (by consent) underpayment of wages claims.

It is also possible that Labor will introduce a ‘Fair Work Court’, an independent judicial division of the Fair Work Commission determining matters such as unlawful dismissal, general protections claims and underpayment of wages claims.

Criminalising wage theft and industrial manslaughter

The new Government is committed to legislate to make wage theft and industrial manslaughter criminal offences. It will consult with unions, States and Territories and employer groups to ensure federal wage theft and industrial manslaughter laws will not override existing state and territory laws in operation.

Employers need to start considering how they are currently managing these issues and how current policies could be strengthened. Apart from any Government policy, the Election results provide employers with helpful insights into what issues matter most to their employees which presents an opportunity to reflect on how your organisation fairs in relation to these issues.

We will continue to keep you updated as these post-Election issues develop. Please reach out if you have any questions.

May 10, 2022

The Victorian Government confirmed in last week’s State budget that $246 million has been set aside for the pilot Victorian Sick Pay Guarantee, an administrative scheme that provides casual employees and contract workers with a “guarantee” that they will be paid when they need time off sick or to care for loved ones.

Across 2021, the Victorian Government consulted with members of the community, both employers and employees, on the design of a scheme to improve the economic security of Victorian workers prompted by instances of COVID transmission by casual and contract workers continuing to attend work notwithstanding COVID symptoms due to a financial pressure to do so.

The belief was that there had been a ‘choice’ between a day’s pay and a worker’s health (or the health of their loved ones). This belief has now evolved into the creation of a state-run administrative scheme.

Do casuals in Victoria get sick leave now?

Yes. Both casual employees and contract workers now have the opportunity to register to access sick leave payments under the new Victoria Sick Pay Guarantee. It is estimated that around 150,000 workers will be eligible for the first phase of the Guarantee.

The Guarantee is currently operating under a pilot scheme that will last for two years.

It is, in effect, another form of portable leave designed to provide financial security to workers engaging in insecure work across different employers across Australia.

Who will fund the sick leave?

The scheme will be administered by the Victorian Government in an effort to minimise the administrative burden upon employers.

It is, however, difficult to conceive how the Government will verify eligibility without engaging with the employer of an employee or contract worker seeking to access sick pay.

While fully funded by the Victorian Government for the initial pilot, employers will also be expected to contribute levies to fund the scheme moving forward. What these levies will look like remains to be seen.

Which occupations does the Sick Pay Guarantee cover?

The first phase of the Guarantee is open to the following occupations, which the Victorian Government states are “highly insecure”:

• Hospitality workers
• Food preparation assistants
• Food trades workers
• Sales support workers
• Sales assistants
• Aged and disability carers
• Cleaning and laundry workers
• Security officers and guards
• Other labourers in the supermarket and supply chains industries

The full list of workers who are eligible appears on the Victorian Government website.

Workers also need to:

• Be 15 years of age or over;
• Be casual employees or self-employed with no other employees (for example, a sole trader operating with an ABN);
• Not be entitled to paid personal, sick or carer’s leave in any of their jobs (so, for example, a permanent part-time employee with a second casual job would not be entitled to register);
• Work physically in Victoria (no matter where they live) and have the right to work in Australia; and
• Work on average at least 7.6 hours per week in an eligible occupation.

It is clear that the Guarantee will cover employees in a range of small businesses, many of whom are dependent upon casual employees and contract workers to respond to the peaks and troughs of workload.

Do workers need to prove they are eligible for the Guarantee?

Yes. Workers must not only meet the extensive eligibility criteria of the Guarantee, but also furnish evidence that to prove that they are eligible.

They will need to show two identity documents (for example, an Australia drivers’ license, passport or birth certificate) although if they are under 18 and only have two forms of ID, they can apply with only one.

They will also need to prove that they are eligible by showing documents to prove that they are either casual employees or self-employed individuals. This may include, for example, their employment contract, a recent payslip, a recent invoice issued by their business or their most recent business activity statement.

Does Victoria’s new sick pay guarantee protect ‘insecure’ workers?

The new Guarantee provides certain casual employees and contract workers with rights to register for a new government scheme with a view to receiving pay when they need time off sick or to care for others.

However, casual employees already had the benefit of the general protections provisions of the Fair Work Act 2009. They could not be subject to adverse action, such as dismissal or reducing shifts, because they suffered an illness or injury, or because they needed to care for a member of their household or immediate family.

The introduction of the Sick Pay Guarantee, therefore, doesn’t create new rights or obligations in this regard. Although it may mean that casual employees may view their right to be absent from work due to illness more strongly.

What does this mean if I hire casual employees or contract workers?

If you hire casual employees or engage contract workers in Victoria, then you will need to take particular note of the new Sick Pay Guarantee.

• Keep an eye out on the news about the Guarantee and, in particular, who will finance it once the two-year pilot comes to an end.
• The administrators of the Guarantee may approach you to confirm whether an applicant to the Guarantee is eligible. Take particular care in how you respond to such request for your employees’ information.
• Human Resources teams should make clear to their casual employees the company’s expectations around absences. It is foreseeable that, in light of the Guarantee, there may arise a perception amongst casual employees that they are not accountable to their employer when they fail to attend work for single day absences.
• If you haven’t already, review your employment agreements with your casual staff to ensure they are consistent with changes to the law of casual employment that occurred in 2021.

Get in touch with our specialist employment team at Kingston Reid if you have any questions about how the Victoria Sick Pay Guarantee Scheme will affect you and your staff.

February 11, 2022

The High Court’s decisions on Tuesday in ZG Operations Australia Pty Ltd v Jamsek[1](Jamsek) and CFMMEU & Anor v Personnel Contracting Pty Ltd[2] (Personnel Contracting) provide a refreshing reset on how to assess whether a person is a contractor or employee.

The decisions provide more certainty to business’ that have genuinely and comprehensively committed the terms of their relationship with a contractor in a written contract. Instead of engaging in a subjective, checklist approach, Courts will now consider the question of employee vs contractor through the prism of normal principles of contractual interpretation, consistent with the High Court’s decision last year in WorkPac Pty Ltd v Rossato[3]. The indicia set out in the multifactorial test will now only be relevant to the extent they are concerned with the rights and duties established by the parties’ contract.

Less about totality

Determining the nature of the relationship has, to date, not been an easy task – despite the fact that there is usually a written contract entered into at the outset of either relationship which purports to make it clear.

This is because, historically, Courts have looked beyond the terms of the written contract, considering the “totality of the relationship” between the parties. Commonly known as the multifactorial test, Courts have considered the totality of the relationship between parties by reference to a range of indicia including the degree of control the worker is under and whether workers operate their own business.

In applying the multifactorial test, Courts have long grappled with the notion of whether a person is truly a contractor in circumstances where the weight accorded to each indicium is wholly in its discretion.

The application of this discretion has meant that, to date, the well-settled multifactorial relationship test applied by Courts has yielded different and sometimes inconsistent assessments of whether a person is a contractor or not.

Take Jamsek as an example.

In this case, two truck drivers provided delivery services to ZG Operations Pty Ltd (and its predecessors) (ZG Operations), initially as employees and subsequently as contractors. On agreeing to “become contractors”, the drivers set up partnerships (with their respective wives). Via their newly formed partnerships, the drivers purchased vehicles from ZG Operations and executed contracts with it for the provision of delivering services. The drivers subsequently made deliveries as requested by ZG Operations. Lawyers for ZG Operations argued that from this point, each driver owned their own business and there was no basis to conclude they were employed.

At first instance, the primary judge found that the truck drivers were contractors for the relevant period that they operated their partnerships, owned their trucks, and contracted their services to ZG Operations. The primary judge reached this view applying the multifactorial test, emphasising the drivers’ provision of vehicles and provision of services via partnership arrangements as significant factors.

On appeal, the Full Bench of the Federal Court of Australia disagreed with the primary judge and unanimously held that, when viewed in totality, the relationship remained one of employment. One factor that weighed heavily with the Full Court was the exercise of superior bargaining power by ZG Operations.

In the High Court, the majority rejected the Full Court’s invocation of the disparity of bargaining power, finding that such considerations cannot alter the bargains that were struck between ZG Operations and the partnerships. The majority pointed to existing remedies within Australian law which deal with injustices arising from the disparity of bargaining power, such as sham or unfair contract provisions. On the basis that no claim had been made challenging the validity of the contracts between the ZG Operations and the partnerships (via sham contracting provisions or otherwise), the majority proceeded to interpret the contracts, finding that the drivers were individual contractors.

The finding that day-to-day instruction or expectations of ZG Operations in relation to the drivers wearing a uniform or displaying a company logo on their trucks (factors that weighed in favour of the Federal Court’s decision in assessing the drivers as employees) did not alter the contractual rights and obligations which characterised the relationship between the parties.

Unsurprisingly, in reaching this conclusion, the majority in Jamsek – Kiefel CJ, Keane J and Edelman J – followed the principles set out by the same majority in Personnel Contracting. Published moments earlier, Personnel Contracting makes it clear that it is erroneous for Courts to apply the multifactorial test by reference to how the parties have conducted themselves over the decades of their relationship. Instead, where the parties have entered into a comprehensive written contract, the various indicia in the multifactorial test only bear on the nature of their relationship to the extent that they are concerned with the rights and duties established by the parties’ contract.

For example, in Personnel Contracting, the majority considered whether the worker was subject to the control of Construct (the trading name of Personnel Contracting, which is a labour-hire company). In interpreting the contract, the majority found that the worker had no right to exercise any control over what work he was to do and how that work was to be carried out. Specifically, the majority referenced a clause in the contract which stated that the worked was obliged to “[c]o-operate in all respects with Construct and the [host company] in the supply of labour to the [host company]”. This duty, along with others, led to the majority concluding that the parties’ description of their relationship as principal and agent in the contract was not determinative.

What does this mean in practice?

The High Court’s ruling simplifies the analysis for determining whether a person is a contractor or employee in circumstances where the character of the relationship between the parties can be determined by the reference to terms of the written agreement.

Is the multifactorial test dead?

No.

As mentioned above, where the rights and duties of the parties are found exclusively within a written contract, the various indicia in the multifactorial test are still relevant. However, the indicia only bear on the nature of the parties’ relationship to the extent that they are concerned with the rights and duties established by the parties’ contract.

Importantly, the conduct of the parties is no longer relevant in applying the multifactorial test. Instead, the conduct of the parties is only relevant as per established contractual principles. For example, the subsequent conduct of the parties may be relevant to ascertain whether the terms of the original contract have been varied.

Do I need to review my independent contractor contracts?

Yes.

As mentioned above, the parties’ description of their relationship as principal and agent in the contract is not determinative. Instead, the terms of the contract when read as a whole must reflect the status of the relationship as principal / independent contractor.

Contract terms which may suggests a relationship of employment include:

• terms that fix the worker’s remuneration;
• terms that state a principal is a worker’s paymaster;
• terms which oblige the worker to perform work as directed by the principal or host; and
• terms which authorise a principal to terminate a worker’s engagement should they fail in any respect to obey directions.

As such, it is important that principals check contractors’ terms and conditions to ensure they could not be interpreted in favour of an employment relationship.

It is also important to review current practices with contractors to ensure that there can be no argument that their current contract is a sham, or its terms have been varied by conduct.

Are there specific implications for labour hire entities?

Yes.

The majority in Personnel Contracting found that “there is nothing in the tripartite nature of a labour-hire arrangement that precludes recognition of [a principal’s] contractual right to control the provision of [the worker’s] labour to its customers, and the significance of the right to the relationship between [the principal] and [the worker]”. In other words, although a host entity may supervise and direct every aspect of a worker’s work, if this subordination is attributable to the terms of the contract between the worker and the principal (i.e. via a term stating that the worker is obliged to perform work as directed by a host), this will suggest that a worker is subject to the control of a principal. This will weigh towards a Court finding that a worker is an employee rather than a contractor.

[1] [2022] HCA 2.

[2] [2022] HCA 1.

[3] [2021] HCA 23.