Insights & News

October 28, 2022

The Federal Government introduced the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (Bill) on 27 October 2022.

When introducing the Bill, the Minister for Employment and Workplace Relations, Tony Burke promised the Bill will deliver “…more secure jobs, better pay and a fairer workplace relations system for Australian workers.”

The Minister’s public announcements before introducing the Bill did not fully convey that the Bill could result in the most substantive changes to the Fair Work Act 2009 (Cth) (Act) in a decade.

The Bill has been referred to a Committee, with the report due on 17 November 2022.

Parts 1, 2 and 3 – ROC and ABCC abolished

The Government crossed off two election promises with the Bill abolishing the Registered Organisations Commission and the Australian Building and Construction Commission, returning regulatory oversight to the Fair Work Commission (FWC) and Fair Work Ombudsman (FWO) respectively.

Part 4 – Objects

The Bill introduces two new objects to the Act – promotion of job security and gender equity. The new objects will guide the FWC in performing its functions, and will be matters the FWC takes into account as a part of the modern awards objective in section 134 and the minimum wages objective in section 284.

Part 5 – Equal remuneration

The Bill will change the way that the FWC looks at equal remuneration and work value cases. The FWC’s consideration of work value reasons must be free of assumptions based on gender and include consideration of whether there has been historical gender-based undervaluation of the work under consideration.

The Bill removes the need to find a male comparator and clarifies that sex discrimination is not a necessary prerequisite for the FWC to make an equal remuneration order.

Part 6 – Expert panels

The Bill creates a Pay Equity Expert Panel and a Care and Community Sector Expert Panel within the FWC. The purpose of these new expert panels will be to tackle low pay and conditions in the female dominated care sector to help attract and retain workers. By having these expert panels, it will make it easier for the FWC to order pay increases for workers in low-paid, female dominated industries by putting in place the statutory Equal Remuneration Principle.

Part 7 – Pay Secrecy

It will be a workplace right that employees (and job applicants) are able to disclose (or not disclose) their own remuneration or ask another person about their remuneration. Adverse action may not be taken against an employee (or job applicant) for exercising this workplace right.

The Bill also proposes prohibiting contractual provisions or terms in industrial instruments which prevent employees from discussing their remuneration or terms of their employment that are reasonably necessary to determine remuneration outcomes. This includes quantum and the number of hours the employee works. Existing pay secrecy terms will have no effect. Up to 600 penalty units may be imposed for a serious contravention, or 60 penalty units.

Part 8 – Prohibiting sexual harassment in connection with work

This part introduces the measures and means to combat sexual harassment in the workplace. The major changes to the Act are based on recommendations made by the Respect@Work report.

Recommendation 28: The Fair Work system be reviewed to ensure and clarify that sexual harassment, using the definition in the Sex Discrimination Act, is expressly prohibited.

The Bill implements this recommendation by prohibiting sexual harassment in connection with work in the Act, using the definitions in model work health and safety laws. The prohibition applies broadly to protect workers, prospective workers and persons conducting businesses or undertakings.

Principals would, in some circumstances, be vicariously liable for acts of their employees or agents – unless they could prove that they took all reasonable steps to prevent the employee or agent from doing the unlawful acts. At the same time, principals may also be subject to enforcement action for contravening the proposed new positive duty to prevent sexual harassment under the Respect at Work Bill which is currently before Parliament.

The prohibition is supported by a new dispute resolution framework, modelled on the compliance framework in the Act that applies to general protections dismissal disputes. In most cases, the FWC would first deal with a dispute by conciliation or mediation. If the dispute remained unsettled, the parties could proceed to consent arbitration or make an application to the Federal Court.

Recommendation 29: Introduce a ‘stop sexual harassment order’ equivalent to the ‘stop bullying order’ into the Fair Work Act. This should be designed to facilitate the order’s restorative aim.

The Bill introduces this recommendation by allowing the FWC to make stop sexual harassment orders to protect applicants from future sexual harassment. The FWC may also deal with disputes about sexual harassment which relate to past harm caused by sexual harassment.

To avoid duplication and streamline application processes, Part 8 would merge the existing stop sexual harassment order jurisdiction into new Part 3-5A—Prohibiting sexual harassment in connection with work.

The Bill ensures people have access to an appropriate remedy (other than an order requiring payment of a pecuniary amount) but also ensures that they are not entitled to more than one remedy in such cases.

These changes provide flexibility. Applications may be made jointly by one or more aggrieved persons against one or more perpetrators or principals and enable a union to represent an aggrieved person or persons. It inserts anti-double dipping provisions to prevent a person from obtaining multiple remedies in relation to the same conduct. It protects all Australian workers, prospective workers and persons conducting businesses or undertakings. It prevents the concurrent operation of State and Territory anti-discrimination laws and, except in some limited circumstances, occupational health and safety laws (to the extent they deal with sexual harassment).

Part 9 – Anti-discrimination and special measures

The Bill adds three further protected attributes—breastfeeding, gender identity and intersex status—into the anti-discrimination provisions in the Act which aligns the Act with other Commonwealth anti-discrimination legislation.

It amends the Act to confirm that ‘special measures to achieve equality’ are matters pertaining to the employment relationship and therefore matters about which an enterprise agreement may be made. This would also clarify that ‘special measures to achieve equality’ are not discriminatory terms and therefore not unlawful terms in an enterprise agreement.

Part 10 – Fixed-term Contracts

The Bill inserts prohibitions on the use of fixed term contracts where the term extends beyond 2 years or where the contract may be renewed more than once. These restrictions apply to both extensions or renewals of an existing contract as well as consecutive or new contracts, where the work is the same or substantially the same and there is substantial continuity of service.

There are some exemptions to this prohibition including, for example, where:

• the employee is engaged under the contract to perform only a distinct and identifiable task involving specialised skills
• the employee is engaged under the contract in relation to a training arrangement (which will include apprenticeships and traineeships)
• the employee is engaged under the contract to undertake essential work during a peak demand period
• the employee is engaged under the contract to undertake work during emergency circumstances or during a temporary absence of another employee
• in the year the contract is entered into the amount of the employee’s earnings under the contract is above the high-income threshold for that year
• the contract relates to a position for the performance of work that is funded by government funding or other particular types of funding, the funding is payable for a period of more than 2 years, and there are no reasonable prospects that the funding will be renewed after the end of that period
• the contract relates to a governance position that has a time limit under the governing rules of a corporation or association of persons
• a modern award that covers the employee includes terms that permit a longer period

A term of a contract that does not comply with these provisions will have no effect but the remainder of the contract will remain valid. This creates an ongoing employment relationship.

Other proposed amendments include prohibitions on terminating or delaying reengaging an employee or changing the nature of the work or tasks or otherwise alter the employment relationship to avoid these obligations.

The FWO will be required to prepare a new information statement that employers must give to fixed-term employees.

The FWC will be given new powers to deal with disputes about these provisions, including by way of arbitration if the parties to the dispute agree.

Penalties for non-compliance may be 600 penalty units for a serious contravention, or 60 penalty units.

Part 11 – Flexible Working Arrangements

While there was some discussion about expanding the categories of employees who could make requests for flexible working arrangements, this has not eventuated (save for a minor change to employees experiencing family and domestic violence – expanded from an employee experiencing violence from ‘a member’ of their family).

The proposed amendments focus on an employer’s response to a request for flexible working arrangements.

In addition to an employer being required to respond within 21 days, being able to refuse a request on reasonable business grounds, and notifying the employee of the reasons for the refusal, the amendments propose that before refusing a request on reasonable business grounds, the employer must:

• have discussed the request with the employee and genuinely tried to reach agreement with the employee about other changes that may be made to accommodate the employee’s circumstances, and
• have had regard to the consequences of the refusal for the employee.

When providing written notice of a refusal of a request, the employer must also include details of the reasons for the refusal, including the particular business grounds and how they apply to the request. The refusal must set out other changes that would accommodate the employee’s circumstances the employer would be willing to make or that there will be no changes.

The FWC will have new powers to deal with disputes about these provisions, including by arbitration. The types of orders the Fair Work Commission may make include an order that:

• the Fair Work Commission agrees with the refusal, or
• the employer grants the employee’s request or make specified changes to the employee’s working arrangements to accommodate the employee’s circumstances.

Part 12 – Termination of enterprise agreements after nominal expiry date

The Bill changes how applications to terminate agreements after they have passed their nominal expiry date are made, and the grounds they can be made on. Principally, the FWC’s focus shifts from considering the public interest to the interests of employees’ covered by the agreement.

The proposed amendment provides that the FWC must terminate an enterprise agreement, on application, where either:

• the continued operation of the agreement would be unfair to covered employees;
• the agreement does not and is not likely to cover any employees; or
• all of the following circumstances apply:
  • the continued operation of the agreement would pose a significant threat to the viability of a business of the covered employer(s);
  • the termination of the agreement would likely reduce the potential for terminations of employment by way of redundancy, or due to insolvency or bankruptcy; and
  • where the agreement contains termination entitlements, the employer has given a guarantee to the FWC in respect of its compliance with those obligations.

Where an application is made, the FWC must consider the views of the employees, employers, and unions covered by the agreement. If one of those parties opposes the application, the matter is to be dealt with by a Full Bench of the FWC.

The FWC must have regard to whether bargaining has or will commence for a proposed agreement which will cover the same or substantially the same group of employees. The FWC must also consider if the termination would adversely affect the bargaining position of employees to be covered by the proposed agreement.

An employer’s guarantee about termination entitlements will be an undertaking to comply with any post-termination obligations/entitlements which would have applied but for the termination of the agreement. The guarantee remains in effect for a period of 4 years, unless otherwise specified by the employer and approved by the FWC. Compliance with the guarantee will be a civil remedy provision.

Part 13 – Sunsetting of “zombie” agreements etc.

The Bill makes several amendments to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth). The net effect of the provisions will be that unless actions are taken to the contrary, all pre-FW Act agreements, in whatever form they exist, will end 12 months from the date the Bill is enacted. These agreements are often referred to as ‘zombie’ agreements.

Employers must give written notice to employees within six months of the Bill being enacted that they are covered by a ‘zombie’ agreement and it will terminate 12 months from the date of the Bill’s enactment, unless an application is made to the contrary. An employer’s obligation to notify employees will be a civil remedy provision.

Employers, employees, and unions may apply to the FWC to extend the sunset date of an agreement by up to 4 years. The FWC must approve the application where certain circumstances are satisfied. For example, where a new enterprise agreement is being bargained for, where employees would be better off overall than if the relevant modern award applied, or if it is reasonable in the circumstances to do so. There is no limit on the number of extensions the FWC can grant, but one of these circumstances must be satisfied on each occasion.

Part 14 – Enterprise agreement approval

The Bill proposes several changes which relate to the FWC’s approval of enterprise agreements. The Government says the amendments will simplify the requirements employers must satisfy before the FWC can approve an enterprise agreement.

The general trend is for the requirements to shift from a prescriptive set of steps employers need to go through, to a singular broad analysis undertaken by the FWC of whether employees have genuinely agreed to the agreement.

To guide this broad analysis, the FWC will be required to publish a ‘Statement of Principles’. The statement will deal with various matters related to genuine agreement including:

1. informing employees about bargaining;
2. informing employees of their right to be represented by a bargaining representative;
3. providing employees with a reasonable opportunity to consider a proposed agreement;
4. explaining terms of an agreement and their effects;
5. providing employees with a reasonable opportunity to vote on an agreement in a free and informed manner; and
6. any other matters the FWC considers relevant.

Importantly, these are guiding principles only. It is not necessary that each are met for the FWC to be satisfied an agreement has been genuinely agreed to.

The Bill preserves the FWC’s ability to disregard minor procedural, and technical errors when determining if an agreement has been genuinely agreed to. This applies to notices of employee representational rights, requesting employees to vote to approve an agreement, and timelines for asking employees to vote to approve an agreement after notices of employee representational rights have been issued.

The Bill will upends the strategy of ‘brownfields agreements’ (i.e. small workforces voting on agreements with wider coverage). Agreements which are not the result of collective bargaining in good faith, including ‘unrepresentative’ and ‘low voter cohort’ will not be ‘genuinely agreed’. Examples given in the Explanatory Memorandum to the Bill are:

• employees would not have a sufficient interest in the terms of an agreement if no genuine collective bargaining in good faith occurred as part of the agreement-making process
• employees engaged in one industry, occupation or classification should not be capable of being found to have genuinely agreed to an enterprise agreement intended to cover employees across a substantially wider range of industries, occupations or classifications
• a small cohort of employees would also not be sufficiently representative where the agreement is intended to ultimately cover a much wider workforce following transfers of employment, possibly within a corporate group.

Part 15 – Initiating bargaining

The Bill creates a way for employee bargaining representatives (e.g. unions) to start the process of bargaining with an employer without the employer’s consent in particular circumstances. This can be done where:

1. the proposed single-enterprise agreement will replace an earlier single-enterprise agreement;
2. no more than 5 years has passed since the earlier agreement passed its nominal expiry date; and
3. the proposed agreement will cover the same, or substantially the same, group of employees as the earlier agreement.

The amendment flows to provisions dealing with bargaining orders, and essentially allows for unions to apply for a bargaining order where they have made a written request to bargain.

Part 16 – The Better Off Overall Test

The Bill delivers a key outcome from the Government’s Jobs + Skills Summit by simplifying the Better Off Overall Test (BOOT). The changes aim to remove unnecessary complexity.

The Bill introduces a provision intended to inform the FWC’s application of the BOOT. There is an express statement that the BOOT should be applied as a global assessment – as opposed to the current excruciating line-by-line approach which has been applied in recent times. The Bill requires the FWC to only have regard to patterns or kinds of work, or types of employment, if they are reasonably foreseeable at the time of the BOOT.

If the FWC forms the view a term of an enterprise agreement does not otherwise meet the BOOT, it is empowered to amend the term, which could include removing it, to satisfy itself that the BOOT is passed. Importantly, it is the FWC, not the employers, employees and unions, that decides on amendments – although the FWC may consider the views of the employers, employees and unions.

The Bill also includes provisions allowing employers, employees, and unions to apply to the FWC for a reconsideration of whether the agreement passes the BOOT. Applications may be made where there has been a change to patterns or kinds of work, or types of employment when compared to the patterns or kinds of work, or types of employment that the FWC considered when first conducting the BOOT to approve the agreement. If the FWC was concerned that the enterprise agreement did not pass the BOOT, the FWC could either accept an undertaking or amend the agreement.

Part 17 – Errors in enterprise agreements

The FWC may vary an enterprise agreement to correct or amend an obvious error, defect or irregularity (such as a typographical error or obvious omission) on its own initiative or on application by any of the parties covered by the agreement. Where the FWC has approved the wrong version of an agreement, such as an earlier draft, that was erroneously submitted to the FWC by a party for approval, the FWC would have discretion to validate its decision as if the correct version of the enterprise agreement had been submitted for approval. The validation of the correct version of the agreement could occur on the FWC’s own initiative or on application.

Part 18 – Bargaining disputes

The Bill replaces the existing scheme dealing with “serious breach declarations and determinations” with a new scheme dealing with intractable bargaining declarations and determinations.

A bargaining representative to a proposed agreement may apply for a declaration. A declaration is not available to multi-enterprise agreements, unless a supported bargaining authorisation is in operation, or greenfield agreements.

The FWC must be satisfied that:

• The FWC has dealt with a bargaining dispute, and the applicant for the declaration participated in the process, and
• There is no reasonable prospect of the party’s reaching agreement, and
• It is reasonable in all the circumstances (taking into consideration the views of all bargaining representatives).

The FWC may then order a ‘post-declaration negotiation period’ for a defined time. After making a declaration, and after any ‘post-declaration negotiation period’, the Full Bench of the FWC may make an ‘intractable bargaining workplace determination’.

The FWC will determine the resolution of any issues that remain in dispute. That determination will in-effect become the agreement and be binding on the employer and employees.

These changes are said to assist ‘bargaining parties to reach agreement.’ In-fact, the provisions provide for the imposing of agreement on the bargaining parties.

This is a substantial expansion of the Commissions arbitral power to set pay and conditions under agreements.

Part 19 – Industrial action

If the FWC makes a protected action ballot order (PABO), it must also make an order directing all bargaining representatives to attend a mandatory conciliation conference prior to the close of the ballot. If any party fails to attend, subsequent employee claim action or employer response action will not be protected. The voting period specified in the PABO must be at least 14 days to enable time for the conference to occur.

Following the date of declaration of the protected action ballot results, employees will have a 3 months’ period to commence industrial action. This is longer than the current 30 days, and employer response action would need to occur within a 3 months’ period.

If employee claim action relates to a single-interest employer agreement or a supported bargaining agreement, employees must provide 120 hours’ notice of taking industrial action.

The Australian Electoral Commission (AEC) will no longer be the default protected action ballot agent and an alternative agent may be appointed with FWC approval. Where appointed as the protected action ballot agent, the AEC will be able to seek orders for contraventions of civil penalty provisions in relation to the ballot.

Parts 20, 21, 22 and 23 – Multi-employer bargaining

A key feature of the Bill is to create new, very clear paths by which unions are able to force:

1. multiple employers to negotiate for a multi-employer agreement,
2. a multi-employer agreement to be imposed on those employers (even absent a vote of employees), and
3. other employers to be covered by the agreement after it has been made.

This is a very significant change to the structure of bargaining under the Act. It is a clear shift away from bargaining at the enterprise level towards industry level. It also expands, quite remarkably, the circumstances in which agreements will be imposed on employers and employees by the FWC. Under the current Act, the model is mostly based on an employer offering an agreement to be voted on. The Bill would expand the circumstances in which that offer (or voluntariness on the part of the employer) is needed.

Applying for a supported bargaining authorisation

Under the Bill, unions (and other bargaining representatives) may apply to the FWC for a ‘supported bargaining authorisation’. Supported bargaining authorisations are a key feature of the Bill as they:

1. Initiate negotiating for multi-employer enterprise agreements (termed ‘supported bargaining agreements’); and
2. Are the first of a series of steps that can ultimately lead to the FWC imposing a multi-employer workplace determination (termed ‘an intractable bargaining workplace determination’).

Once an application has been made, the FWC must grant the application if it is satisfied that it is appropriate for the employers and employees specified in the application to bargain together, having regard to:

1. The prevailing pay and conditions in the industry or sector;
2. Whether the employers have clearly identifiable common interests; and
3. Whether the likely number of bargaining representatives would be consistent with a manageable collective bargaining process.

The FWC must also be satisfied at least some of the employees are represented by the union that has applied to the FWC for the authorisation.

Some points to note here are that:

1. The consent of employers and employees is not required (i.e. they can be forced to the table);
2. There is no requirement there be a minimum number of employees seeking to bargain; and
3. The FWC may order a particular union cannot bring such an application. That said, we have some difficulties with the drafting as the relevant orders (proposed s.178C) seem only to be able to be made during bargaining or after an agreement has been made (which presumably would post-date such an application).

Bargaining for multi-employer agreements

Under the current Act, it is rare for the FWC to make workplace determinations (i.e. for the FWC to impose the terms of an agreement onto those that will be covered by it). The Bill expands the circumstances in which such a determination may be made to include circumstances in which bargaining has become ‘intractable’.

Bargaining representatives may apply for an ‘intractable bargaining declaration’. If the relevant agreement is a proposed multi-employer enterprise agreement, an application may only be made if a supported bargaining authorisation is in operation. The effect of an intractable bargaining declaration is that there is a period in which to try to reach agreement and, absent agreement, a workplace determination must be made by the FWC.

The FWC may make an ‘intractable bargaining declaration’ if:

1. A s.240 application has been made and the applicant participated in a conference before the Commission;
2. There is no reasonable prospect of the agreement being reached if the FWC does not make the declaration; and
3. It is reasonable to make the declaration taking into account the views of the bargaining representatives of the agreement

The effect of a declaration is that ‘intractable bargaining workplace determinations’ may be made under division 4 of Part 2-5 of the Act. In other words, the FWC will make a workplace determination (including for multi-employer agreements).

The declaration/determination must include:

1. Any terms that were agreed to between the parties;
2. The terms that the FWC considers deal with the matters that were still at issue;
3. A nominal expiry date;
4. A dispute settlement procedure; and
5. The model consultation and flexibility terms.

Forcing employers onto supported bargaining agreements

The Bill allows unions to make an application to force other employers onto a supported bargaining agreement that has been made (with or without the consent of that employer). Under the Bill, the FWC must grant that application if it satisfied that:

1. a majority of the employees want to be covered by the agreement; and
2. it is appropriate for them to be covered.

In determining whether it is appropriate, the FWC must take into account the views of the unions and the employer.

Cooperative workplace agreements

The existing multi-employer bargaining stream will be reframed as cooperative workplace agreements, which remain voluntary for employers to participate in where they are not subject to a supported bargaining authorisation immediately before making the agreement. Parties may not take industrial action  in respect of bargaining for a cooperative workplace agreement and FWC intervention is available with the parties’ consent.

All three new multi-employer bargaining streams require at least some of the employees to be represented by a union. Supported bargaining and single-interest employer authorisations may not be granted and collective workplace agreements may not be approved by the FWC unless this requirement is met. However, the FWC is empowered to make orders excluding persons, such as unions, from participating in bargaining if they have a history of non-compliance with the Act. For example, if they have contravened a civil penalty provision or committed an offence against the Act in the last 18 months.

Part 24 – Enhancing the small claims processes

The Bill proposes a small number of significant amendments to the small claims process under the Act. The key amendment is an increase in the small claims cap from $20,000 to $100,000.  The Bill also clarifies that the cap is exclusive of interest.

Under the Bill, successful claimants may recover court filing fees as costs against the other side. This provision is intended to act as an carve out to section 570 of the FW Act which currently limits cost orders to circumstances where the proceedings are vexatious or the like.

The increase aims at ‘expanding access to the small claims procedure, enabling more claimants to benefit from its simpler, quicker and cheaper approach to dispute resolution’.

The amendment also comes off the back of recent inquiries which suggested claimants with modest claims exceeding $20,000 have abandoned part of their claim to bring it within the small claims cap or alternatively, have bypassed the small claims procedure all together and proceeded to a full court process.

Part 25 – Prohibiting employment advertisements with pay rate that would contravene the Act

The Bill also regulates pay information included in job advertisements.

Specifically, the Bill prohibits an employer from advertising a job at a rate of pay lower than that permitted by the Act, an Award or an Enterprise Agreement. This provision requires an employer to include for example any casual loadings payable if the advertised role was on a casual basis.

The Bill also requires any employer who is advertising a piecework role to specify the rate of pay for the piecework or include a statement that a periodic rate of pay applies in relation to the employment.

Employers will need to actively monitor the compliance with the Act and any industrial instrument for the duration of the advertising. Advertisements will need updating to reflect any changes to rates of pay which occur during the advertising period.

Significantly, this is a civil penalty provision. This means individuals may be liable for a penalty of up to 60 penalty units (and bodies corporate five times that) if they fail to advertise the correct rate of pay and do not have a reasonable excuse.

The clause has been introduced following concerns raised by the Migrants Workers’ Taskforce and the Senate Unlawful Underpayments Inquiry that migrant workers are targeting with jobs advertised at below minimum wage rates, increasing the risk of such workers being underpaid once they start working.

Key Takeaways

This Bill brings significant change.

We await feedback from the inquiry on 17 November. The next sitting of Federal Parliament in the week of 21-24 November will likely be an exciting one.

In the meantime, the Paid Family and Domestic Violence Leave Bill has been passed

And of course, let’s not forget the positive duty to prevent sexual harassment Respect@Work Bill with the inquiry reporting back on 3 November.

Watch this space.

Alice DeBoos Managing Partner +61 2 9169 8444 [email protected]	Duncan Fletcher Partner +61 8 6381 7050 [email protected]	Steven Amendola Partner +61 3 9958 9606 [email protected]	Shelley Williams Partner +61 7 3071 3110 [email protected]
Christa Lenard Partner +61 2 9169 8404 [email protected]	Michael Stutley Partner +61 8 6381 7060 [email protected]	Katie Sweatman Partner +61 3 9958 9605 [email protected]	Liam Fraser Partner +61 7 3071 3113 [email protected]
Lucy Shanahan Partner +61 2 9169 8405 [email protected]	Beth Robinson Partner +61 8 6381 7064 [email protected]	Brendan Milne Partner +61 3 9958 9611 [email protected]	Michael Mead Partner +61 2 9169 8428 [email protected]
John Makris Partner +61 2 9169 8407 [email protected]	Yoness Blackmore Executive Counsel Knowledge +61 2 9169 8419 [email protected]

 

 

 

October 4, 2022

Last week, the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill 2022 (Bill) was introduced to Parliament by the Government.

The Bill sets out the long awaited detail on the promises made going into the May election, legislating the 7 remaining recommendations from the Respect@Work report not enacted by the former Morrison Government.

What are the key changes?

• Specific prohibition of hostile workplace environments.
• A positive duty to take reasonable and proportionate measures to eliminate unlawful sex discrimination, including sex discrimination, sexual and sex-based harassment, hostile work environments and victimisation.
• Conduct is no longer required to be seriously demeaning to be unlawful harassment on the ground of sex – this reduces the threshold and makes it easier for applicants to make out claims of harassment on the ground of sex.
• The Australian Human Rights Commission (AHRC) gain powers to enforce the positive duty, including with guidelines, education, inquiries, compliance notices, court orders and enforceable undertakings.
• The AHRC will be able to conduct inquiries into systemic unlawful discrimination.
• Unions can more easily commence Federal Court representative actions for at least one person – possibly paving the way for class actions.
• A neutral costs approach under which each party will bear their own costs in sexual harassment proceedings.
• “Sex” or related characteristics only need to be “a reason” for the conduct. They do not have to be the ‘only reason’ or the ‘real reason’ and the fact there may be other reasons such as age or race does not prevent the conduct being unlawful.

What is the positive duty?

The positive duty requires an organisation to take reasonable and proportionate measures to eliminate, as far as possible sexual harassment, harassment on the ground of sex, hostile workplace environments or acts of victimisation against persons relating to their complaints, proceedings, assertions or allegations of any of that conduct.

Reasonable and proportional measures will vary, depending on the circumstances of a particular workplace. It depends on the size, nature and circumstances of the business, the available resources (ie, financial or otherwise), the practicality and costs of those measures and other relevant matters.

For example, larger and better resourced organisations will need to implement more extensive measures.

The Explanatory Memorandum says the new positive duty in the Bill aligns with the exemption to vicarious liability under the Sex Discrimination Act 1974 (ie, as is the case in Victoria). This exemption provides that an employer is not liable for the actions of the employees or agents if the employer has taken “all reasonable steps” to prevent their employees from engaging in the conduct.

On this basis, employers should already take preventative action, but we suspect many may not have done this.

At a general level, the positive duty requires organisations to:

• Identify and understand potential areas of non-compliance (ie, risk assess).
• Develop a strategy for meeting and maintaining compliance (ie, have a prevention plan).
• Review and improve compliance as reasonably necessary in the organisation’s particular circumstances.

Specific actions may include:

• Reviewing and amending discrimination and harassment policies and procedures consistent with the positive duty and other amendments.
• Communication and consultation with all workplace participants, including with periodic reinforcement. For example, by emails, intranet releases, toolbox talks etc.
• Overt buy-in from senior management who must “walk the talk” and must model best practice bystander
• Fair, timely and effective internal complaints procedures which treat all complaints seriously and investigate them promptly. This should be victim centric.
• High quality training, which educates all workplace participants about their discrimination and harassment policies and procedures, including with case studies and interactive activities to embed understanding. Training must give real life examples of behaviours and how victims or bystanders can best respond.

The AHRC will be able to undertake investigations where it suspects systemic unlawful discrimination. This is unlawful discrimination that affects a class or group of persons and is continuous, repetitive or forms a pattern and the AHRC considers it is appropriate to investigate. This inquiry could be within an individual business or across multiple businesses within a broader industry or sector. Outcomes may simply be a report to the Minister or may be a public report and may include recommendations.

The AHRC may also conduct inquiries if it “reasonably suspects” non-compliance. For example, this may be triggered by information or advice from other agencies or regulators, information from impacted people or media reporting. The AHRC may issue a compliance notice, enforceable by an order from the federal courts. Organisations may enter into enforceable undertakings with the AHRC.

These inquisitory functions will not commence until 12 months after Royal Assent, during which time the AHRC will prepare and publish guidance materials and organisations must take steps to understand their obligations and implement all necessary change.

What is a hostile work environment?

A ‘hostile workplace environment’ is where one person’s conduct results in the workplace environment being offensive, intimidating or humiliating to a second person of a particular sex.

A court looks at the behaviour itself, not what the person intended or how the second person received it. The fact that a person created a hostile environment unwittingly is not a defence.

Circumstances which contribute to this assessment include:

• The seriousness of the conduct (ie, more relevant for a single incident).
• Was it continuous or repetitive (ie, more relevant if it is less serious)?
• Did the person engaging in the conduct (or inaction) have a senior role, influence, or were they in a position of authority (ie, manager, supervisor or business owner)?
• Are there any relevant circumstances such as the environment or culture of the business (ie, single-sex environment or previous incidents)?

In a hostile work environment, the offending person does not need to direct their conduct at the person making a complaint or even anticipate the person may be impacted by the behaviour.

The offending person only needs to anticipate a person of one sex in general would find the environment hostile.

Universal paid family and domestic violence leave

While not part of the Respect@Work Bill, in the same sitting, the Government also introduced a further Bill to amend the Fair Work Act 2009 to replace the current entitlement in the National Employment Standards to five days of unpaid family and domestic violence leave in a 12-month period with an entitlement to ten days of paid leave for full-time, part-time and casual employees.  The Bill also proposes to extend the definition of family and domestic violence to include conduct of a current or former intimate partner of an employee, or a member of an employee’s household.

By providing for paid family and domestic violence leave as part of the National Employment Standards, the amendments will ensure that all employees are entitled to paid family and domestic violence leave irrespective of what industrial instrument they are covered under, or not.

While seemingly uncontroversial on its face, the extension of the paid entitlement to casual leave raises questions about how the entitlement will apply in respect of casual employees, particularly “genuine” casual employees who do not perform regular and systematic hours of work.  The Bill provides that a casual employee will be entitled to be paid the full rate of pay (ie including any shift penalties and loadings) that they would have been paid if they had worked the hours in the period for which the employee was rostered.

In practice, casual employees, particularly those in service industries will often be rostered at relatively short notice to fill a gap in service needs, and questions will accordingly arise around how far in advance a casual employee will be deemed to have been “rostered” to gain an entitlement to paid leave if they are ultimately unable to attend that shift due to family and domestic violence.

What does this mean?

While amendments may be made around the edges, it is very likely that both Bills will pass through both Houses of Parliament and be enacted into law.

The introduction of the positive duty, as its name suggests, will give rise to an obligation for organisations to take positive steps to review and consider the measures that are currently in place to eliminate sexual harassment, sex-based harassment and hostile work environments.  Having an appropriate workplace behaviour policy in place together with periodic training with minimal other control measures is very unlikely to satisfy the positive duty.

Rather, employers will be required to devise a prevention plan which adopts a suite of measures to meaningfully identify and eliminate these inappropriate behaviours.

As always, the team at Kingston Reid are well placed to support organisations in reviewing their existing practices and considering additional measures to cement the right for a safe and respectful workplace for all.

 

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

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

 

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

Beth Robinson Partner +61 8 6381 7064 [email protected]

 

September 9, 2022

The Kingston Reid Jobs Summit Fringe Festival provided a unique opportunity for clients and friends of Kingston Reid to gain insights into the issues being debated up the hill at the Commonwealth Government’s Jobs + Skills Summit. Our event brought together a range of opinion leaders with diverse views on the debate over workplace relations reform in Australia.

We were fortunate to have speakers and panellists from across the entire political spectrum from business, Government and unions, along with expert opinions on economics and from those who prosecute, defend and determine rights and responsibilities in the workplace relations system.

1. It’s the Economy Stupid – Chris Richardson, Rich Insight

Our event was turbo charged from the beginning with a presentation of stark economic reality from renowned economist Chris Richardson. While the title of the presentation called up the famous mantra coined during Bill Clinton’s successful presidential campaign in 1992, perhaps it ought to have been called “It’s Productivity, Stupid”, as the key underlying message was that real wage growth will be doomed unless productivity can be increased.

Mr Richardson:

• observed that the Jobs + Skills Summit had missed an opportunity by focussing on how to decide who gets a share of the pie rather than making the pie bigger;
• foretells that the type of reform to workplace relations legislation being floated prior to the Jobs + Skills Summit created a risk that wages will chase prices, inflation will be too high, and real wages will not improve; and
• busted a myth by showing that international migration to Australia creates jobs; it does not take jobs away.

While the relative lack of focus on productivity at the Jobs + Skills Summit was disappointing, the sensible decision to lift the cap on skilled migration showed that good economic policy can translate to good Government policy through the Jobs + Skills Summit process. He also told us that ideally wages should not rise above 3.5% per annum if we want to avoid increased inflation.

2. The Union Perspective – Scott Connolly, Assistant National Secretary, ACTU

As a vocal contributor to the Jobs + Skills Summit and a strong advocate for reform, we were pleased to have the benefit of insights from Sally McManus’ Second Lieutenant, Scott Connolly.

The ACTU position is that productivity gains are being made but that they are not being shared with workers. Mr Connolly said:

• the ACTU believes the labour market should be re-regulated;
• workers are not benefiting from national income and productivity gains;
• industrial action is necessary for multi-employer bargaining but with a “measured approach”; and
• there are significant problems with skills and training infrastructure and that Jobs and Skills Australia should have a bigger role in the development of skills and training.

The Government has been careful not to describe its “immediate actions” from the Jobs + Skills Summit as re-regulation of the labour market, but the reform contemplated involves more, rather than less, regulation. The reaction of business to Government election commitments and statements at the Government Jobs + Skills Summit suggests there is wide support for a greater role for Jobs and Skills Australia.

3. The Political Perspective – Adam Bandt MP, Australian Greens

In the first of our Political Perspectives, the Greens used the opportunity of Leader Adam Bandt’s speech to announce the party’s proposed industrial relations reforms.

Mr Bandt said that the Greens hold the balance of power and will be taking a “no compromises” approach to the reform proposals being put forward by the Government, threatening to withhold support for any legislation that comes out of the Jobs + Skills Summit unless the Government agrees to their demands.

This strong position flows from a party view that reforms need to take back the power from corporations because real wages are declining, and the power balance needs to be re-shifted.

Mr Bandt announced the Greens position that:

• the Greens support an overhaul of the bargaining system, and that greater control needs to be given to workers by reviewing hours of work and insecure employment provisions in the Fair Work Act;
• low paid wages need to be lifted to 60% of the full-time median wage;
• the Government needs to reduce the cost of essentials (including free child-care) in order to support workforce participation;
• there needs to be an increase in accessibility to union membership;
• gig and casual workers should receive sick and holiday pay in addition to the current casual loading; and
• legislation should be amended to include a presumption that all jobs are permanent unless there are sound demonstrable reasons otherwise.

Mr Bandt raised concerns that the Jobs + Skills Summit is “Half a Hawke” in that the Government has blocked any discussion on tax.

While the Greens position could be seen as posturing aimed at blunting proposed reforms that are contrary to its policy position, it’s no compromise position on issues such as climate policy suggest that an “all or nothing” approach is a definite possibility. Keen observers will note the Greens are actually one vote short of holding the balance of power in the Senate, so a decision by the Greens not to support legislation plays the crossbenchers (and even the Coalition) into the game.

4. The Union Perspective – Daniel Walton, National Secretary, AWU

While reported comments before the Jobs + Skills Summit about union membership for newly arrived migrants might have suggested we would be hearing some controversial proposals from Daniel Walton, the AWU position is arguably much closer to the business position than that of the ACTU, and certainly that of the Greens.

By focussing on a broader agenda than industrial regulation, the AWU appears to be reaching for the centre ground and consensus with business. While careful to caution there is no “silver bullet”, Mr Walton told us he views the three big issues for the Summit to address are:

• energy (in the context of the transition from fossil fuels to renewables);
• industrial relations reform; and
• skilled migration.

Other policy areas that Mr Walton covered included:

• addressing the higher cost of living, inflation and productivity and the challenge of increasing real wage growth;
• a restoration of balance to appointments to the Fair Work Commission;
• making enterprise bargaining simpler;
• fixing a “flaw” in current modern award and enterprise agreement consultation obligations, which only trigger once a definite decision to introduce major change has been made; and
• investment in training.

Many of these matters were found in the statement of “immediate actions” published by the Government after the close of the Jobs + Skills Summit on Friday which suggests that the AWU is close to policy makers.

One area of potential difference is in looking to migration to address skills shortages. The AWU points to the fact of apprenticeship commencement numbers increasing, but apprenticeship completion numbers are diminishing. Flowing from this, Mr Walton said that looking around the world for skills is “short sighted” and that as a nation “we need to restore our own skills”.

Mr Walton observed that employers should see this period as an opportunity for collaboration and consultation with their employees and unions.

5. Future of Work Panel

Jordan O’Reilly, Co-founder & CEO, Hireup

Luke Webber, Managing Director, Labourpower

Michael Kaine, National Secretary, TWU

Dr Alex Veen, Senior Lecturer, University of Sydney Business School

This panel produced a fascinating discussion on areas of workplace relations regulation and reform in the area of labour hire, independent contractors and the gig economy which are changing at an extremely rapid pace. Our panellists told us that:

• the definition of “insecure work” is a live question and means different things to different stakeholders;
• the gig economy creates a different working environment where platforms take a step back and much more control is placed in the hands of consumers and workers about how work is performed;
• the gig economy is here to stay, and there needs to be appropriate regulation of non-standard work performed within this space;
• while the majority of gig work is conducted under independent contractor arrangements, there is a space for effective employment frameworks if modern awards are less rigid;
• there are emerging trends where workers want to choose how, and when, they work and do not want to be bound to one employer on a full time basis;
• technology and artificial intelligence will continue to change the shape of work, both in terms of the labour required and how that labour is engaged; and
• since the inclusion of “casual conversion” in legislation, and a wide range of industrial instruments, anecdotal evidence suggests that a tiny proportion of employees (sometimes as low as 2%) are choosing to convert from casual to permanent.

Michael Kaine from the TWU noted that the transport economy attracts some of the most vulnerable workers, but equally has represented independent owner-drivers since the union’s inception, illustrating that the TWU does not have any inherent objection to non-standard work.  That does not mean that we necessarily need to shoe-horn workers into employment relationships or redefine the employment relationship. If we can find a system that permits flexibility with appropriate protections, then we should do it. That system must provide appropriate and fair remuneration (mechanisms for workers to recover costs and get a return on their investment / risk) and other support networks (workers compensation, superannuation, safety requirements, etc). One option is an “owner-driver” type system like in NSW.

Jordan O’Reilly from Hireup, a digital platform connecting people living with a disability with support workers, was concerned that the gig economy could be viewed as a race to the bottom in a two-speed system (regulated employment relationships vs non-regulated independent contractor relationships). Flexibility is key, but the flexibility you need differs from sector to sector so there needs to be sector-specific approaches. We have found employment relationships work well in the disability care sector. However, it is important there is an equal playing field, which requires certainty from Government.

Dr Alex Veen from the University of Sydney Business School shared the findings of his research which found that it is not as simple as just passing on costs to consumers.  Research indicates that platforms are generally dominated by cost-sensitive consumers. Whilst the consumers generally do not understand the terms and conditions that apply to gig workers and when they’re informed about them, they think that they’re unfair, they’re also only prepared to pay an additional $0.85 – $1.25 for the services. It is a delicate balance to find a solution to, and we might benefit from looking at more holistic approaches in other jurisdictions.

Luke Webber from Labourpower observed that the recruitment industry is not seeing a race to the bottom. Businesses cannot attract workers on modern award rates and are having to pay workers more. Flexibility appears to be just as important as stability. Every year casual employees are offered the opportunity to convert to permanent employment, but the majority do not take up the offer, in fact, a number of workers who have converted to permanent employment have subsequently requested to convert back to casual employment.

6. The Political Perspective – Senator Tony Sheldon, ALP

The Jobs + Skills Summit, and the whitepaper that is proposed to flow from it, was a core part of the ALP’s policy platform entering into the Federal election which saw the party take Government. In gaining an understanding of what would be discussed up on the hill immediately following the Festival, we heard from Senator Tony Sheldon.

Senator Sheldon was able to give some insights into the drivers for Government policy and how discussions at the Summit were likely to unfold. Senator Sheldon told us that the big issues for the Government are:

• single enterprise bargaining is outdated, and greater access multi-enterprise bargaining is needed;
• low paid and highly feminised industries should be the focus of multi-enterprise bargaining;
• the issues are low real wage growth and the need to “plug” loopholes in insecure work such gig, casual and labour hire work; and
• there is a need to abolish the ABCC as it negatively impacts on productivity.

Senator Sheldon acknowledged that “We are not going to agree on every single thing but that is ok. We are cementing ideas for the future.”  This reference to laying the ground for future reform suggests that the ALP is playing a long game and sees the Jobs + Skills Summit as a starting point for a reform process rather than an event where consensus will immediately be achieved. This was reflected in the “immediate actions” and “further discussions” approach taken by the Government in the Jobs + Skills Summit Outcomes document published after the Summit.

7. Respect@Work – Plaintiff Perspectives – Josh Bornstein, Maurice Blackburn

True to the old adage, keep your friends close and your enemies closer, Josh Bornstein, Head of Employment and Industrial Relations of applicant and union law firm, Maurice Blackburn, provided Fringe Summit attendees with a rare insight into the thinking of a lawyer whose name would otherwise ordinarily be at the bottom of letters of demand.

Mr Bornstein gave us an overview of his experience in acting for plaintiffs in the rapidly changing area of workplace discrimination, bullying and sexual harassment.

• There are opportunities to understand what the introduction of a positive duty to take all reasonable steps to eliminate sexual harassment in the workplace will be at the Federal level from the Victorian experience. Noting that Victoria’s anti-discrimination legislation has incorporated a positive duty since 2010. This positive duty is likely to incorporate an expectation that employers have prevention plans in place.
• Discussions about the outlawing of non-disclosure agreements (NDAs) need to carefully balance the rights and needs of victims of sexual harassment, taking into account that many of Mr Bornstein’s clients seek the privacy and confidentiality that an NDA offers. NDAs should be subject to time limits or scope for the victim to otherwise not be constrained from discussing their experiences when they are ready to do so.
• Mr Bornstein also highlighted that there will be more arrows in the quiver for the prosecution of sexual harassment and related discrimination claims, with the Australian Human Rights Commission to gain powers to make representatives claims, lifting the need for individuals to prosecute their own claims in all cases.

8. Respect@Work Panel

Kate Eastman AM SC

Lindall West, Managing Director, Ombpoint

Kristen Hilton, Former Victorian Equal Opportunity & Human Rights Commissioner

This panel focussed on the potential impact of incoming legislative measures and the practical steps that businesses can take to make workplaces better and minimise harm.

• Employers need to recognise the power that comes with the positive duty as an important first step in taking leadership to consider all reasonable steps to eliminate sexual harassment in the workplace
• A “prevention plan” is an important element of satisfying the positive duty. It is not a single policy document. Rather it requires employers to review their businesses and culture.
• The new concept of sex-based harassment and gender stereotyping goes beyond the concept of sexual harassment and is intended to capture micro-wrongs and long-standing gender-based stereotyping.
• NDAs can maintain confidentiality and privacy if that is what the impacted person chooses. Blanket bans are not appropriate and remove bargaining power held by women in seeking a settlement of their claims.
• Speak-up culture is part of protecting victims. Employees raising issues, and employers responding effectively at an early stage, are important elements of this.
• Services like Ombpoint provide a valuable first line of protection by triaging issues when they first arise, potentially resolving them before unnecessary escalation but also allowing space for important issues to be escalated.
• Diversity in the workplace is going to be an economic lever and opportunity.

A core message out of the panel was the need to ensure your businesses are ready for the legislative changes including the introduction of a positive duty. Having the engagement of your Boards, managers and employees will be key.

9. The Political Perspective – Jacquie Lambie, The Jacquie Lambie Network

While not an attendee at the Government’s Jobs + Skills Summit, Senator Lambie spoke to our event and made it clear that any reform arising out of the Jobs + Skills Summit will require her support, or the support of another of her crossbench colleagues. Senator Lambie raised concerns that those making political donations would have the loudest voices when considering the legislative reforms to flow from the Summit, reinforcing her general concerns that reform around the regulation of political donations is sorely needed.

Senator Lambie pointed out:

• there was a risk that the Government summit would make a lot of noise but not actually solve the real problem of cost of living that was impacting all of the people she represents;
• the unions do not necessarily speak for all working people, and decisions made out of the Summit are made by people in places like Melbourne for people on their doorstep, not for the people in the communities she represents;
• we need fewer “roundtables” because they “go round and round and nothing gets done”, we need greater consensus and action on consensus. The Government needs to listen more to community and less to lobbyists and those who pay to be heard;
• political donations should be prevented and replaced with a system of solely public funding;
• in north-western Tasmania, the heart has been ripped out of TAFEs which were previously a hub of the community, and the impact on the skills held by members of the community had been devastating.

10. The Political Perspective – Senator Michaelia Cash, Coalition

When invitations for the Government’s Jobs + Skills Summit started arriving, Opposition leader Peter Dutton was quick to send back the Coalitions “will not be attending” RSVP card.

This did not mean that we were left without the views of the Coalition on industrial relations reform. Shadow Minister for Employment and Workplace Relations, Michaelia Cash, set out the Coalition’s concerns with the agenda being taken by the Government to the Jobs + Skills Summit.

Senator Cash told the Fringe Summit that genuine reform that makes it easier for businesses to find workers would be embraced, and pointed to the reforms that the Coalition had achieved when in Government, including:

• banning corrupting benefits for unions and establishing the Registered Organisations Commission to restore integrity for members who pay their union dues in good faith;
• protecting vulnerable workers;
• re-establishing the Australian Building and Construction Commission;
• protecting the role of thousands of volunteer fire fighters in Victoria; and
• abolishing the Road Safety Remuneration Tribunal with the support of small business owners; and
• passing legislation to clarify the status of casual workers and prevent “double dipping” on entitlements.

Senator Cash highlighted the Coalition’s policy to increase access to work for pensioners (without affecting their pension payments). This became a recommendation that was adopted by the Government at the end of the Jobs + Skills Summit. She also:

• reaffirmed the coalition’s support of the ABCC and criticism of the Government’s action in defunding the body and stripping the provisions of the Building Code;
• noted the economic impact of current strike action at Sydney Trains and ports as an indicator of the kind of disruption that would be caused by the industrial relations changes being contemplated by the Government Summit, particularly sector bargaining;
• reaffirmed the Coalition’s commitment to 6-year maximum nominal terms for greenfields enterprise agreements on major projects; and
• pointed out that changing the test for casual employment, legislating “same job, same pay” and making labour hire unworkable would have a damaging effect on business, particularly small business.

11. Fringe Festival Full Bench

Former Deputy President Greg Smith AM

Former Deputy President Geoff Bull

Former Commissioner Danny Cloghan

The proceedings in the first instance reflected a diversity of views on what were the key priorities for the Summit to achieve. A Full Bench of Former Members of the Fair Work Commission was accordingly convened, and points of appeal put to Former Deputy President Greg Smith AM, Former Deputy President Geoff Bull, and Former Commissioner Danny Cloghan for their consideration and determination.

• In answer to the appeal question of what “productivity” means to the tribunal, Former DP Greg Smith AM observed that the Australian Industrial Relations Commission took an active role in ensuring productivity returns in the settlement of industrial disputes and questioned whether it was appropriate for productivity to be removed as a factor to which the Commission should give active consideration in its decision making outside of the annual minimum wage decision.
• In answer to the appeal question of whether bargaining is broken, there were split views. Some expressed that it can work well but depends on the attitude of the parties. All considered the current tests applied for approval of agreements required reform and that the Commission should have a greater role in assisting parties to resolve deadlocks.
• In answer to whether the Commission should be made more accessible by conducting hearings in shopping centres, the Full Bench unanimously dismissed the appeal. We were also relieved that an appeal to include lawyers in Fair Work Commission proceedings was also unanimously upheld.

12. Where to now?

The Government closed the Jobs + Skills Summit on Friday in Canberra with a statement that it will take “immediate” action to update the Fair Work Act. This is in addition to a list of what it has described as “complementary existing commitments” that it promised to deliver at the election and, in many cases, are already in bills that are before parliament.

It is important to remember that this immediate action starts with business, union and Government consultation and must be passed by the parliament, including an upper house where the Government needs the support of the Coalition or a combination Greens and a crossbencher to get legislation through. We heard from representatives of these three groups, and it suggests that support is anything but guaranteed.

For those who attended the Kingston Reid Jobs Summit Fringe Festival we hope that you found it as informative and thought provoking as we did. For those who did not we hope that we have captured some of the highlights here and would of course be pleased to discuss anything that has piqued your interest further with you.

 

Alice DeBoos Managing Partner +61 2 9169 8444 [email protected]	Duncan Fletcher Partner +61 8 6381 7050 [email protected]	Steven Amendola Partner +61 3 9958 9606 [email protected]	Shelley Williams Partner +61 7 3071 3110 [email protected]
Christa Lenard Partner +61 2 9169 8404 [email protected]	Michael Stutley Partner +61 8 6381 7060 [email protected]	Katie Sweatman Partner +61 3 9958 9605 [email protected]	Liam Fraser Partner +61 7 3071 3113 [email protected]
Lucy Shanahan Partner +61 2 9169 8405 [email protected]	Beth Robinson Partner +61 8 6381 7064 [email protected]	Brendan Milne Partner +61 3 9958 9611 [email protected]	Michael Mead Partner +61 2 9169 8428 [email protected]

September 6, 2022

The Jobs and Skills Summit closed on Friday in Canberra with the Government saying it is committed to “immediate” action to update the Fair Work Act. This is in addition to a list of what it has described as ‘complementary existing commitments’ that it committed to at the election and, in many cases, are already in bills that are before parliament.  Here are links to previous Insights: Respect@work and gender equality and Post-election Insight.

Before we throw our current copies of the Fair Work Act in the bin, remember that this immediate action starts with business and government consultation and must be passed by the parliament, including an upper house where the government needs the support of the Coalition or a combination Greens and a crossbencher to get it through. Those who attended the Kingston Reid Job Summit Fringe event in Canberra heard from representatives of these three groups and it suggests that support is anything but guaranteed.

The fact that the change will not be instantaneous is important because there is a lack of clear detail in what the government has announced.

The Jobs + Skills Summit Outcomes document published by the Government says that it will update the Fair Work Act to create a “simple, flexible and fair new framework”.

Below we have set out what the government has said, suggested what the government might mean and provide our view on what this could mean for you.

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What the government has said:

A new framework that: “Ensures all workers and businesses can negotiate in good faith for agreements that benefit them, including small businesses, women, care and community services sectors, and First Nations people.”

What the government might mean:

This is a clue that the “sector bargaining”, referred to by the ACTU during the summit, may not only be drawn along traditional industry or “single interest” employer lines. The inclusion of a reference to “small businesses”, “women” and “First Nations people” suggests that there may be an ability for people in these categories to bargain collectively even if they work in different industries and forms of business. However, it also reflects a reference to the current low paid bargaining stream which exists but is not utilised.

What this could mean for you:

Employers will need clarity on whether these new forms of bargaining will be an opt-in model for them or whether they can be forced to bargain along these new lines.

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What the government has said:

A new framework that: “Removes unnecessary complexity for workers and employers, including making the Better Off Overall Test simple, flexible and fair.”

What the government might mean:

This suggests that the Government will revise previous proposals to simplify the Better Off Overall Test to focus on an overall comparison of the benefits terms and conditions of employment rather than a line-by-line approach. This should include restrictions on unrealistic and hypothetical comparisons between working arrangements under the proposed enterprise agreement and underlying award. Hopefully, there may also be an ability to focus on the non-monetary needs of the group of employees voting for the agreement and the specific needs of the business they are working in.

What this could mean for you:

If previous feedback from employers is genuinely embraced, this is one of the most promising developments that might come from these reforms. The most important question is whether any relaxation of the Better Off Overall Test will be restricted to union negotiated enterprise agreements, effectively making unions “gate keepers” for the improved system.

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What the government has said:

A new framework that: “Gives the Fair Work Commission the capacity to proactively help workers and businesses reach agreements that benefit them, particularly new entrants, and small and medium businesses.”

What the government might mean:

This suggests that the Fair Work Commission may be given stronger arbitral powers somewhere between the current bargaining orders (which are about how bargaining is conducted rather than what the enterprise agreement will be) and the making of entire arbitrated agreements when industrial action is terminated to prevent serious damage to the bargaining parties, third parties or the economy.

One possibility is that these new arbitral powers could be used when there are a small number of issues that are preventing an enterprise agreement from being made as a means of avoiding industrial action. The specific reference to “…new entrants, and small and medium businesses.” also suggests that the Fair Work Commission may be given a more proactive role in guiding bargaining where the participants have limited resources or experience in the bargaining process.

What this could mean for you:

Giving the Fair Work Commission further powers to help employers and employees reach agreement is a promising development and potentially fills a gap in the current system. Any arbitral power must be underpinned by a productivity objective and an overriding principle that arbitrated terms must be aimed at simplifying agreements rather than adding to complexity. Employers should be wary of these reforms being used as a trojan horse to restore the broad arbitral powers to resolve any workplace dispute which led to frequent destabilising litigation last century. Instead, the powers need to be tightly focussed on bargaining and the making of enterprise agreements. It will be interesting to see what effect this has on the good faith bargaining provisions.

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What the government has said:

A new framework that: “Ensures the process for agreement terminations is fit for purpose and fair, and sunsets so called ‘zombie’ agreements.”

What the government might mean:

The paring of two opposing issues (use by employers of agreement terminations as a bargaining tactic and the potential difficulties in terminating zombie agreements) suggests that there will not be a blanket abolition of the power to terminate enterprise agreements. Employers should expect a sunset provision for pre-Fair Work Act enterprise agreements similar to the coalition government’s omnibus bill and further preconditions that must be met before the Fair Work Commission can terminate an enterprise agreement. These pre-conditions are likely to be based around employee welfare and prevention of agreement termination applications as a tactic to gain leverage in enterprise bargaining negotiations with employees.

What this could mean for you:

Any employer intending to terminate an existing enterprise agreement should consider timing very carefully. There is a risk that the changes will be legislated to commence from a policy announcement date rather than the date the legislation commences. It will also be important to understand the impact of Minister Burke’s letter to the Fair Work Commission, which notifies it of the proposed changes, on any decision that it may make to terminate an enterprise agreement.

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What the government has said:

Update the Fair Work Act to: “Provide proper support for employer bargaining representatives and union delegates.”

What the government might mean:

There is no detail about what this statement will mean in practice. While it could be the provision of additional resources to the Fair Work Commission to facilitate bargaining, it is also possible that it encompasses advisory support. Another possibility is that this will be used as a basis to introduce a mechanism for funding union involvement in bargaining through an employer or employee bargaining fee.

What this could mean for you:

The government has not explained what “proper support” means. In its most extreme form, this change could have a significant impact on employers (and potentially employees) who may be required to pay for it operationally or financially.

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What the government has said:

Update the Fair Work Act to: “Provide stronger access to flexible working arrangements and unpaid parental leave so families can share work and caring responsibilities.”

What the government might mean:

It is likely that these reforms will be centred around the equalising of parental leave under the Fair Work Act regardless of the gender of parents. There is also potential for changes that make it harder for employers to resist employee requests for flexible working arrangements such as “working from home”.

What this could mean for you:

Regardless of the final form of the changes, it is unavoidable that employers will need to reassess their strategies for managing requests for flexible working arrangements.

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What the government has said:

Update the Fair Work Act to: “Provide stronger protections for workers against adverse action, discrimination, and harassment.”

What the government might mean:

This is an issue which has not been discussed publicly and was a surprise inclusion to many. The link between “discrimination and harassment” and “adverse action” already exists in a legal sense. It is possible that this suggests a watering down of the current tests applied by the Courts in adverse action cases.. It also suggests that there could be a move to importing concepts of procedural fairness into the general protections framework.

What this could mean for you:

The High Court has carefully balanced the rights of employers, employees and unions in its interpretation of the current adverse action laws so that rights are protected but the business needs of employers are not undermined. Any legislative attempt to change this delicate balance will involve further litigation to determine its impact.

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The government has said that the Department of Employment and Workplace Relations will commence detailed consultations with business and unions on these matters in the week commencing 5 September 2022.

The government has also said that “Business, unions and Government committed to work proactively together to:

• Strengthen tripartism and constructive social dialogue in Australian workplace relations
• Revitalise a culture of creativity, productivity, good faith negotiation and genuine agreement in Australian workplaces
• Establish a tripartite National Construction Industry Forum to constructively address issues such as mental health, safety, training, apprentices, productivity, culture, diversity and gender equity in the industry

The use of expression “tripartism” suggests that the Jobs and Skills Summit is likely to be the first of many roundtable discussions convened by government to try to find common ground between business, unions and government. The danger for employers is that unions and government appear to be aligned on many issues but business representatives bring a much more diverse range of views which makes it difficult to develop a united position

Areas for further work

The government has also identified the following areas for further consultation with unions and business.

• Consider options to support the Fair Work Commission build cooperative workplace relationships.
• Consider how to best help employer representatives and unions to improve safety, fairness and productivity in workplaces.
• Amend relevant legislation to give workers the right to challenge unfair contractual terms.
• Initiate a detailed consultation and research process on the concept of a living wage, reporting back in late 2023.
• Initiate a detailed consultation and research process considering the impact of workplace relations settings (such as rostering arrangements) on work and care, including childcare.
• Consider allowing the Fair Work Commission to set fair minimum standards to ensure the Road Transport Industry is safe, sustainable and viable.
• Ensure workers have reasonable access to representation to address genuine safety and compliance issues at work.
• Consider possible improvements to Modern Awards and the National Employment Standards.

Consistent with comments made by government representatives at the Kingston Reid Job Summit Fringe, these further areas of reform appear to be aimed at cementing ideas for the future as part of a long-term legislative agenda. Employers should keep a watchful eye as these ideas become more solid policy proposals.

Kingston Reid will continue to keep our clients informed as the process of workplace law reform unfolds.

 

 

Alice DeBoos Managing Partner +61 2 9169 8444 [email protected]	Duncan Fletcher Partner +61 8 6381 7050 [email protected]	Steven Amendola Partner +61 3 9958 9606 [email protected]	Shelley Williams Partner +61 7 3071 3110 [email protected]
Christa Lenard Partner +61 2 9169 8404 [email protected]	Michael Stutley Partner +61 8 6381 7060 [email protected]	Katie Sweatman Partner +61 3 9958 9605 [email protected]	Liam Fraser Partner +61 7 3071 3113 [email protected]
Lucy Shanahan Partner +61 2 9169 8405 [email protected]	Beth Robinson Partner +61 8 6381 7064 [email protected]	Brendan Milne Partner +61 3 9958 9611 [email protected]	Michael Mead Partner +61 2 9169 8428 [email protected]

August 25, 2022

This year saw three very public pieces of evidence demonstrating that community expectations regarding discrimination and harassment in Western Australian workplaces have changed.

What were the pieces of evidence?

1. The introduction of the substantive provisions of the Work Health and Safety Act 2020 (WA) (WHS Act) on 31 March 2022;
2. The publication of the Community Development and Justice Standing Committee’s report “Enough is Enough” (the FIFO Report) following the inquiry into sexual harassment against women in the FIFO mining industry in June 2022; and
3. The publication of the WA Law Reform Commission’s (WALRC) final report (LRC Report) following a review of the Equal Opportunity Act 1984 (WA) (EO Act) in August 2022.

What does the LRC Report say?

The LRC Report was published after more than three years of consultation with a wide range of stakeholders.

Submissions were made by industry groups and trade unions, highlighting the impact these potential reforms may have for employment.

The LRC Report referenced the Equal Opportunity Commission Annual Report 2020-2021 and its data.

For example, in the 2020-21 financial year, the Commission received 564 complaints of discrimination. Of these complaints, the most common was discrimination on the ground of impairment (23.4%), race (14.1%), and sex and sexual harassment (11.1%). Discrimination in employment was the biggest area of complaint received (45.8%), being over double the next largest area of complaint.

The LRC Report recommended significant changes which will mean Western Australia will align with equal opportunity legislation in other Australian jurisdictions.

What will the government do?

Attorney-General Mr John Quigley stated that the McGowan Labour Government “broadly accepted the recommendations” contained in the LRC Report.

On that basis, it seems it is full steam ahead with the Government now drafting a new EO Act.

We expect the new EO Act will incorporate the majority of the WALRC recommendations

Will there be new grounds for discrimination?

While existing grounds of complaint (or protected attributes) will remain unchanged in the EO Act, the reforms may include additional protected attributes:

• Accommodation status will refer to a person’s status as, for example, a tenant. It differs from the question of whether a person has been discriminated against in the provision of housing.
• Carer responsibilities will be separated from the broader family status protected attribute that exists under the EO Act. It is recommended that carer responsibility be defined as having responsibility for the care of another person, whether that person is dependant or not (other than in the course of paid employment).
• Employment status will be defined so it includes being unemployed, receiving a pension or other social security benefit, receiving compensation, being employed on a part-time or casual basis, or undertaking shift or contract work.
• Immigration status will be a stand-alone ground separate from the definition of race. The WALRC also indicated it should be compatible with the Migration Act 1958 (Cth).
• Industrial, trade union or employment activity will be included to co-exist with current protections in the employment context. However, the proposed inclusion in the EO Act would extend protections to areas of public life outside of employment.
• Irrelevant criminal record carries the stigma associated with criminal offending and may hinder a person’s employment opportunities. It will feature an exemption for employers to refuse to offer employment if that criminal record provides evidence the person does not have the attributes that will enable them to fulfill the inherent requirements of the role.
• Irrelevant medical record will include a person’s worker’s compensation history.
• Lawful sexual activity will be similar to sexual orientation but would cover other areas, such as people engaged in lawful sex work.
• Personal association will provide coverage to a person associated (as relatives or otherwise) with another person who is identified by reference to another protected attribute (e.g., race).
• Physical feature would include a person’s height, shape, facial features, weight, natural hair colour, alopecia, hirsutism and birthmarks (but exclude voluntarily obtained piercings, tattoos and body modifications).
• Political conviction will be separated from the broader ‘political and religious conviction’ protected attribute that exists under the EO Act. It is likely to extend to relatives or associates of the person who is protected and to all areas of public life under protection.
• Sex characteristics will provide protections for a person’s variations in sex characteristics that do not align with male or female characteristics.
• Subjection to domestic or family violence will be included and may be expanded to include all victims of crime or violence.

The WALRC also recommends removing the disadvantage test under the existing EO Act and introducing a positive duty on employers to prevent discrimination.

Will the disadvantage test be dropped?

Currently the EO Act defines sexual harassment as unwelcome sexual advance which leads to the complainant being disadvantaged.

The LRC Report and the FIFO Report both recommended removing the disadvantage test to be consistent with other jurisdictions.

The recommended approach is to define sexual harassment consistently with the Sex Discrimination Act 1984 (Cth).

Under section 28A of the Sex Discrimination Act 1984 (Cth), a person sexually harasses another person if:

• the person makes an unwelcome sexual advance, or an unwelcome request for sexual favours, to the person harassed; or
• engages in other unwelcome conduct of a sexual nature in relation to the person harassed,

in circumstances in which a reasonable person, having regard to all the circumstances, would have anticipated the possibility that the person harassed would be offended, humiliated or intimidated.

The shift of focus to the harasser’s conduct, instead of the disadvantage suffered by the harassed person, aligns with contemporary community expectations that it is the harasser who should be called to account.

What is the positive duty and will it be in the new legislation?

The WALRC recommends imposing a positive duty on employers to prevent discrimination, harassment, victimisation and vilification at work (see Recommendation 121 of the LRC Report).

This would require ‘reasonable and proportionate measures’ (see Recommendation 122 of the LRC Report), takes into account the size of the duty holder’s business, the nature and circumstances of the business, available resources, operational priorities and the practicability and cost of the measures (see Recommendation 123 of the LRC Report).

The WALRC said introducing a positive duty would encourage duty holders to proactively address discriminatory or harassing conduct while aligning employer’s systems and procedures with the revised objects of the EO Act.

Although the WALRC recommends the imposition of a positive duty, it is not yet clear whether this will make it into the new legislation currently being drafted by the Government.

The WHS Act already imposes a positive duty to reduce psychosocial risks arising from discrimination and harassment in the workplace (and associated accommodation, for example, in the FIFO mining industry). However, the EO Act would extend beyond the workplace and include protected areas of public life.

Key Takeaways

Change is on its way for Western Australia’s discrimination and harassment laws.

New protected attributes will require updated policies and training for employees so they can understand and adjust to the revised expectations around appropriate workplace behaviour.

If a positive duty is imposed, employers will need to take proactive steps to promote equality and address systemic discrimination in the workplace. If the positive duty is like that introduced in Victoria, employers will need to:

• make significant investments in training and education;
• audit and update policies, programmes, practices and procedures;
• have a prevention plan;
• build organisational capability by developing the leadership skills of managers and supervisors; and
• embed the psychosocial risks of discrimination, sexual harassment and victimisation into WHS risk management processes.

Changes to the no-disadvantage test may also increase the risk that an employee will file a claim in the Commission.

Busy times ahead for WA employers.

Beth Robinson Partner +61 8 6381 7064 [email protected]

Michael Stutley Partner +61 8 6381 7060 [email protected]

Kevin Jarrett Lawyer +61 8 6381 7067 [email protected]

 

August 17, 2022

Last week the Victorian Government released its Fair Jobs Code which sets out the requirements that Suppliers of goods, services or works must meet to be engaged by the Victorian Government.

The Victorian Code is important for a number of reasons, not the least being that the current Federal government has committed to introducing what it calls a Secure Australian Jobs Code for those seeking federal government contracts this Victorian Code could be a template for what the Federal Code may contain.

The Victorian Fair Jobs Code also has an eerie similarity to the recently gutted ABCC Building Code, except that it is focussed on different objectives. The Fair Jobs Code is also similar in theme to the ACT Secure Local Jobs Code which commenced earlier this year.

In the broad, what does the Fair Pay Code require?

A Supplier wanting a contract with a Victorian Government Agency must hold a “Pre-Assessment Certificate” for contracts with a value of $3 million or more (threshold procurement contracts) and contracts with a value of $20 million or more (high value procurement contracts).  The certificate is valid for a two year period from the date of issue, unless it is revoked.

For high value procurement contracts, a Supplier must also submit a Fair Jobs Code Plan as part of the procurement process.

There is a Fair Jobs Code unit (FJC Unit) that is tasked with determining whether to issue Pre-Assessment Certificates. It also assists Victorian Government Agencies with the assessment of Fair Jobs Code plans.

It maintains a Register of those Suppliers who have Pre-Assessment certificates (which will be public) and a Register of those who don’t, or who have had their certificates revoked.  That is a private register – a black list.

The FJC Unit will also undertake audits and reviews (which will be a condition of Suppliers wishing to obtain a relevant Victorian Government Contract), and deal with complaints made about Suppliers.

What timeframe is involved?

From 10 August 2022: Guidelines, templates and supporting information have been released, and applications have now opened for Pre-Assessment Certificates.

From 1 December 2022: All Victorian Government agencies must apply the Code to all tender processes (and subsequent procurement contracts) and grant applications (and subsequent grants) released to the market or to the public on or after this date.

For Standing Offer Arrangements (including State Purchase Contracts and Sole Entity Purchase Contracts) the Code will apply from the date that the Standing Offer Arrangement commences or is updated or reissued to refer to the Code following implementation.

As this Code is operative already, Suppliers must apply to get Pre-Assessment Certificates between now and 1 December 2022.

Pre-Assessment Certificate – the criteria and other things

In conducting an assessment the FJC Unit will take into account the following:

1. the underlying seriousness of the conduct reflected in any adverse ruling or enforceable undertaking concerning the Supplier or business, including whether, in the past three years, it has:
   1. committed an offence against the law of the State or another jurisdiction; or
   2. engaged in conduct that took advantage of, treated unfairly or otherwise harmed its workers;
2. whether any conduct reflected in an adverse ruling or an enforceable undertaking was isolated or systemic;
3. whether the Supplier or business disclosed any adverse rulings or enforceable undertakings to the FJC Unit and/or a Victorian Government agency during the application process or term of a threshold or high-value procurement contract or significant business expansion grant;
4. whether the Supplier or business has taken steps to rectify any conduct reflected in any adverse rulings or enforceable undertakings;
5. whether the Supplier or business has taken steps to ensure that the conduct does not reoccur, including changing systems, staff training, business models or compliance efforts;
6. any information provided to the FJC Unit by:
   1. the Supplier or business;
   2. victims or persons directly affected by the conduct;
   3. regulators involved in investigating or taking action in relation to any adverse ruling or enforceable undertaking; or
   4. Victorian Government agencies that have engaged with the Supplier or business.

There will be a Pre-Assessment Certificate Application Form (not currently available) which must be used.

The FJC Unit will seek to advise the outcome of an assessment application within 30 business days of receiving the application.

A summary of the information that may be required is as follows:

• details of governance arrangements
• compliance history and corrective actions taken

Moreover a Supplier has to agree to:

• the FJC Unit making inquiries to access and verify information provided;
• notifying the FJC Unit of any adverse ruling or enforceable undertaking within 10 business days of the ruling or undertaking being made;
• participate in audit and/or review processes,

and for high value procurement contracts a Supplier has to submit a FJC Plan and provide regular reports about code implementation, and respond to reasonable requests for information.

Review process for decisions to refuse or revoke a Pre-Assessment Certificate

A Supplier can request a review of a decision to refuse or revoke a Pre-Assessment Certificate which will be dealt with internally within the Department of Jobs, Precincts and Regions.

A decision is also likely susceptible to judicial review in the Supreme Court.

The FJC Plan

The FJC Plan will require Suppliers to provide information in relation to compliance with Standards 1 to 5 of the Code including:

1. policies and procedures in place to ensure compliance with applicable laws (for example, the Fair Work Act 2009 (Cth) and occupational health and safety laws);
2. policies or procedures in place to support Standards 1 to 5 of the Code; and
3. labour requirements of the high value procurement or significant business expansion grant, including:
   1. the number of people engaged and the estimated duration of the engagement and how these people will be sourced or engaged;
   2. strategies to give preference to ongoing forms of employment over casual, fixed term or labour hire arrangements; and
   3. the rationale for using casual, fixed-term and/or labour hire arrangements (if applicable).

Suppliers bidding for a high value contract have to submit an FJC Plan at the time of submitting a tender.

The Code Standards

Before setting out the Standards below, Suppliers seeking to enter a threshold procurement contract must comply with Standard 1 whilst Suppliers seeking to enter into a high value procurement contract have to comply with all the Standards.

The Standards are:

Standard 1: Comply with all applicable employment, industrial relations and workplace health and safety obligations

Suppliers and businesses must comply with all applicable employment, industrial relations and workplace health and safety laws, including:

1. Fair Work Act 2009 (Cth);
2. Occupational Health and Safety Act 2004 (Vic) (and, if relevant, the WHS laws in other States and Territories);
3. Wage Theft Act 2020 (Vic) (and, if relevant, the Criminal Code and Other Legislation (Wage Theft) Amendment Act 2020 (Qld));
4. Long Service Benefits Portability Act 2018 (Vic) (and, if relevant, similar legislation in other jurisdictions);
5. Labour Hire Licencing Act 2018 (Vic) (and, if relevant, similar licensing legislation in Queensland, South Australia and the ACT); and
6. any other laws specified in the Guidelines (eg, Superannuation Guarantee (Administration) Act 1992 (Cth), Workplace Injury Rehabilitation and Compensation Act 2013 (Vic) and the Child Employment Act 2003 (Vic)).

Standard 2: Promote secure employment and job security

Suppliers and businesses must:

• endeavour to engage workers directly and on a permanent basis wherever possible, and must only enter into arrangements for the provision of labour hire services with a provider who is licensed under the Labour Hire Licensing Act 2018 (Vic).
• comply with immigration and migration laws when employing workers who are not Australian citizens; and
• ensure employees’ terms and conditions of employment comply with legal obligations under Australian immigration and migration law and any conditions of the employee’s working visa.
• reflect secure employment arrangements in their organisational policies.
• have policies, procedures, plans and/or systems in place to ensure that they do not knowingly or recklessly misrepresent an employment relationship or a proposed employment arrangement as an independent contracting arrangement.

Standard 3: Foster cooperative and constructive relationships between employers, employees and their representatives

Suppliers and businesses must:

• allow employees to actively participate in and be represented by the industrial organisation or association of the employees’ choice, subject to applicable laws.
• strive to make reasonable allowances for employees and bargaining representatives to participate in enterprise agreement negotiations.
• have processes in place to consult with employees and employees’ representatives about major workplace changes that are likely to have a significant effect on the employees, subject to applicable laws.
• subject to applicable laws, have processes in place that allow all employees the opportunity to attend meetings with union, health and safety or employee representatives, and access to noticeboards, email or other communication facilities to facilitate communication between workers and/or employee representatives regarding work matters.
• recognise validly elected union workplace delegates or employee representatives and have processes in place that allow communication between employees and their representatives subject to requirements under applicable laws.

Standard 4: Foster workplace equity and diversity

Suppliers and businesses must:

• comply with anti-discrimination and equal opportunity laws, and
• demonstrate a commitment to equity and diversity in their organisational practices.

Standard 5: Promote supply chain compliance

Suppliers and businesses must take reasonable steps to ensure that direct subcontractors in relation to a high value procurement contract or significant business expansion grant, comply with all applicable employment, industrial relations and workplace health and safety obligations.

Suppliers engaged in relation to a high value procurement contract must only enter into a subcontracting arrangement with subcontractors that also have a Pre-Assessment Certificate, unless the value of the subcontract is less than $10 million (exclusive of GST).

Thoughts

Standards 2 and 3 signal a push to minimise “insecure” work arrangements and foster the involvement of unions in the business of a Supplier.

Standard 5 is a device intended to expand the application of the Code by requiring a Supplier to enter into a subcontractor arrangement only if the subcontractor has a Pre-Assessment Certificate (unless the value of the subcontract is less than $10 million – exclusive of GST).

Complaints about a Supplier

A Supplier holding a Pre-Assessment Certificate may be the subject of complaint to the FJC Unit.

The following persons (or their representatives) may make a complaint to the FJC Unit about a Supplier or business that holds a Pre-Assessment Certificate:

1. a worker or former worker employed or engaged by the Supplier or business;
2. a regulator or decision-maker who has made an adverse finding relating to the Supplier or business;
3. a party to any dispute which resulted in an adverse finding relating to the Supplier or business; or
4. a Victorian Government agency that has engaged with the Supplier or business in the past three years in relation to the supply of goods, services or construction works or the provision of grants.

The FJC Unit may use a complaint or information disclosed in or discovered as a result of a complaint in determining whether to grant, reassess or renew a Pre-Assessment Certificate to a Supplier.

In some circumstances the complaint may also be a protected disclosure under the Public Interest Disclosure Act 2012.

One could see how a complaints process could be weaponised against a Supplier if they were seen as not towing the “secure employment” line.

Other things and what does this all mean?

If the FJC Unit decides to revoke a Supplier’s Pre-Assessment certificate or a Supplier allows it to lapse, a Victorian Government Agency may sue for breach of contract given that having and maintaining a Pre-Assessment Certificate is a condition of contract.

The Code is not a legislative instrument.  Accordingly if it is applied in a way that breaches, for example, the general protection provisions of the Fair Work Act 2009, the fact of there being a document called a Code, offers no protection.  Contrast that with the ABCC’s Building Code, that was a legislative instrument, which provided protection.

The Code will create an industry for form filling given the type of information sought, how extensive it has to be, and the need to justify why, as a Supplier, you should be able to do work for the Victorian Government.  What was highly process driven before, will be even more so now, with clear social engineering goals in mind.

And, when what is involved is being able to tender for a high value procurement contract of $20 million or more, the stakes involved in not getting a Pre-Assessment Certificate, or having it revoked may be such that there may be a lot of litigation in respect of outcome of those decisions.

As for the touted Federal Secure Jobs Code, the Victorian Fair Jobs Code may be a fair weather warning of what businesses will face later this year.

 

Steven Amendola Partner +61 3 9958 9606 [email protected]

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

August 15, 2022

Following the High Court’s decision in Rossato last year and the legislative amendments to the Fair Work Act 2009 (Cth) (FW Act), employers were relieved to have some clarity over the common law and statutory definitions of casual employment. However, a slew of recent decisions has brought casual employment back into the industrial spotlight, specifically in relation to the way casual employment is terminated in the context of labour hire organisations. These decisions come at a time when the Labor Government has indicated that the labour hire industry is going to be a key area of focus at the upcoming Jobs Summit which is likely to result in further legislative change to casual employment.

Termination of assignment, not employment

The Fair Work Commission (FWC) in Jordon v Allstaff Australia Sydney Pty Ltd [2022] FWC 1607 (Jordon) dismissed an applicant’s general protections claim because it found the employee had not been dismissed. The applicant was a casual employee assigned to work at a Woolworths site. Following a non-work related injury, the employee notified the employer he was ready to return to work. After receiving independent medical advice, the employer formed the view it was not possible for the employee to return to his assignment with Woolworths and sent the employee a text message to tell him his assignment had been terminated. The employee’s contract contained a clause which stated that the termination of an assignment did not mean the termination of the employment, which the FWC acknowledged. The FWC also noted there was no evidence to suggest the employer wasn’t still prepared to continue the employment relationship and assign the employee further work from time to time. On this basis, the applicant’s casual employment had not been dismissed, even though his assignment had been terminated.

Similarly, in Patterson v NX Blue Pty Ltd, George Ayoub, Salini Australia Pty Ltd [2022] FWC 1590 the FWC dismissed an applicant’s general protections claim which was made following the employee’s demobilisation from the Snowy Hydro project. In considering whether the employee had jurisdiction to make the application, the FWC considered whether the employee had been dismissed. Like in Jordon, the employee’s contract confirmed the termination of an assignment was not the termination of employment without express written notification. As no such notification had been given, the FWC found the employee had not been dismissed.

Termination of assignment and employment

In contrast, the FWC in CEPU v AusTunnel Pty Ltd, SLC Snowy Hydro Joint Venture T/A Future Generation JV [2022] FWC 1655 (Austunnel) found two casual labour hire employees had been dismissed. The FWC found the employees’ contracts were tied to the project, meaning when their assignment on the project came to an end, so did their employment.

In Fox v Programmed Integrated Workforce Ltd (No. 2) [2022] QIRC 281 a casual employee made a claim for payment of their accrued long service leave entitlements (LSL). In determining whether the LSL was payable, the Queensland Industrial Relations Commission (QIRC) considered whether the employee was dismissed. The employer was unsuccessful in re-tendering for a contract to provide labour to the Brisbane City Council (BCC). As a result, it emailed its casual employees, including the applicant, to inform them of the end date of the BCC contract. The QIRC found the terms of the applicant’s employment contract empowered Programmed to terminate the employment relationship and did not refer to Programmed’s ability to terminate an assignment. The QIRC, having regard to the drafting of the employee’s contract, the communication sent to the employee and failure to offer any alternative work, determined the email to be the employer’s termination of the employees’ assignment with BCC and the employment relationship.

Should you address the termination of assignment in casual labour hire contracts?

The answer to this depends on the needs of the on-hire provider and its clients. There will be circumstances where a labour hire provider intends for the completion of an employee’s assignment to mark the end of the employment relationship. However, there will be other circumstances where the employer intends for the employment relationship to continue after the casual assignment has ended. The above decisions highlight the importance of labour hire providers carefully drafting casual employment contracts as the consequence of getting it wrong will impact on whether a casual employee’s employment has been terminated or not.

When is it beneficial for a labour hire provider to include provisions distinguishing the end of an employee’s assignment from the end of the employment relationship?

In many cases a labour hire provider will want the employment relationship to continue after an employee’s casual assignment with a client ends. This allows for flexibility for the labour hire provider to continue to place the casual employee on other client sites/assignments without having to issue a new employment contract on each occasion.

The purpose of such contract provisions is to contemplate that an employee may be demobilised from a particular site without interrupting the broader casual employment relationship. The flexibility to assign casual employees across more than one client site is usually beneficial to labour hire providers and their clients.

In the absence of a positive act by the employer to bring about the termination of the employment relationship, the casual employment contract and relationship continues, with the prospect remaining of the labour hire provider offering work to the employee at any time.

Should labour hire employers include express termination clauses in their casual employment contracts at all, beyond the right to terminate for serious misconduct?

From a statutory perspective, the casual definition inserted into the FW Act confirmed that each occasion a casual employee is engaged represents a separate contract of employment, which may be on a single shift basis, or any other agreed short-term period. On this basis, the engagement of the casual employee ceases at the end of each discrete shift or agreed period.

It is therefore technically not necessary to include termination provisions in a casual employment contract as the casual employee is engaged on an ad hoc basis with no firm advance commitment to continuing work. In practice, some employers include termination provisions in an attempt to provide clarity around when the employment contract and relationship will come to an end. It is common for the termination clause to simply state that the casual employment can be terminated without advance notice or by the giving of one hour’s notice.

From a common law perspective, where an employment contract includes a term tying the employment to a specific project/assignment, as in Austunnel, the demobilisation of a casual employee from a particular site is likely to also terminate the employment relationship.

These recent decisions indicate that the great casual debate is far from over and the issue will take centre stage at the Labor Government’s upcoming Jobs Summit and be the subject of ongoing legislative reform.

Key takeaways for employers

Labour hire employers need to be acutely aware of the purpose for which they are engaging a casual employee prior to committing the terms of the relationship to writing. We recommend labour hire employers:

• conduct a review of their casual employment contracts to identify if they are project specific or allow the employer to assign the employee to any of its clients as required
• consider in what circumstances a casual employee might need to be notified of their demobilisation from a particular site as opposed to there simply being no requirement to engage them for a further shift (e.g. are they a FIFO worker? Is the client likely to spill the beans and tell the employee they are being demobilised? Is the contract due for tender soon?)
• consider if there is a potential need to notify a casual employee of the termination of an assignment with a specific client and if so, ensure the employment contract clarifies their employment is not confined to one client or site and they may be assigned elsewhere;
• deliver refresher training to managers/supervisors who are responsible for communicating with labour hire employees to ensure they are aware of how to communicate with a casual employee who has been demobilised from a client’s site.

If you’d like to hear more about what we have to say about casual employment and the labour hire industry, you can join us at the Kingston Reid Jobs Summit Fringe Festival being held in Canberra on 31 August and 1 September 2022 here.

 

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

Xavier Burton Graduate Lawyer +61 7 3071 3121 [email protected]

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

July 28, 2022

By now, many will have heard of the eye watering amounts of cash being offered to professional golfers to lure them away from the long-standing historic and safe arms of the PGA Tour for Greg Norman’s Saudi-backed LIV Golf Tour. Phil Mickelson, six-time major PGA Tour championship, has apparently been offered $200 million to play in the tournament. Australia’s own, Cameron Smith is also reportedly weighing up his options with serious amounts being put on the table.

The PGA is no shrinking violet though. It has taken the extraordinary step of suspending the memberships of a long list of players for participating in the competing tournament, reportedly on the basis that it is a wilful violation of PGA Tour Regulations.

With the stakes as high as they are, many players will be considering challenging any suspension to exclude them from play. For those watching at home, we have outlined some of the potential claims we think might be brought. Exactly which claim is brought (if any) is anyone’s guess. There are a host of uncertainties that surround this question. The PGA operates across several different countries. The laws that apply and regulate their conduct are not uniform. This piece will only look at what could happen in Australia.

Unlawful restraint of trade

The first question we considered is whether the PGA’s decision to ban players such as Australia’s Cameron Smith from its tours would constitute an unlawful restraint of trade.

Insofar as restraint of trade is concerned, it is generally associated with circumstances where an employee is subject to an express restraint of trade provision in an employment contract.

Golfers who are members of the PGA are not employees as such. They are members of an association, subject to its rules. In terms of the Australian PGA, the Player Handbook & Tournament Regulations states: ‘‘no PGA Tour Champions member shall participate in any other golf event on a date when a PGA Tour Champions cosponsored tournament … is scheduled, except as follows … An event for which a member obtains an advance written release for his participation from the Commission’’.

It further states: ‘‘Each PGA Tour Champions member, by participating in a co-sponsored, co-ordinated or approved tournament, acknowledges the right and authority of PGA Tour Champions Division Board … to (i) fine and suspend the member from tournament play … for violation of these Tournament Regulations.’’

Thus, to take the current imbroglio, although the rules mean that a golfer could be banned from participating in PGA events, that would not stop that golfer from participating in LIV events. So, is it an unlawful restraint of trade if the golfer can still earn a living?

The answer is that it could be. It is not definitive, but provisions in a commercial agreement or in the rules of sporting codes can be – and have been – found to be an unlawful restraint of trade.

The PGA’s source of power to restrain the players from playing in other competitions is an interesting, and perhaps distinguishing feature of this case. As we understand it, the PGA isn’t relying on any express terms in the players’ contracts that prohibit them from entering other competitions. Instead, the restraint is the consequence of the PGA’s decision to suspend those players who decide to play in a competitor’s tournament. Perhaps there is no restraint at all, in a strict sense. Players are free to play for whoever they want. The fact of them doing so would not breach any particular clause in their contracts. However, in a world in which the PGA Tour is the main organiser of golf tours, and tours are basically every weekend of the year, the effect is essentially the same as a restraint.

Challenging the disciplinary process

Apart from restraint of trade, another consideration could be the legal probing of any process to discipline a golfer. Procedural fairness during a disciplinary process is a requirement and, moreover, the reasons for making a disciplinary decision can be scrutinised and overruled.

In Australia, an association can generally suspend or expel a member provided they do so in a manner consistent with the association’s rules. A court will not intervene to set aside a decision to suspend or expel a member, even if it disagrees with the decision, as long as the decision has been properly made in line with the rules of the association, and the member has been afforded procedural fairness along the way.

Whilst not on the same professional playing field as the PGA TOUR, the Supreme Court of NSW considered a not too dissimilar set of circumstances in Cheer v Eastlakes Golf Club [2002] NSWSC 1240. In that case, two members challenged the club’s decision to suspend their memberships for three years for allegedly breaching club policy. The Court found serious defects in the way the allegations had been set out to the members. The procedural defects were such that it was not possible for the members to respond or to have a proper hearing. The court set aside the suspensions on the basis that there had been a denial of natural justice.

Challenge on discrimination

Given so much of the controversy has to do with Saudi Arabia’s human rights records, one possible challenge we could see is discrimination based on political belief. Greg Norman faced backlash for a response he gave that seemed to downplay the issue. Since then, he has insisted that he will “not go down that road” and solely “focus on the golf”.

Again, there are myriad questions around jurisdiction. In New South Wales and South Australia, discrimination based on political opinion is not covered. It is in Victoria though, where ‘political belief’ means ‘holding or not holding a lawful political belief or view’. Perhaps a player might argue they have been discriminated against for not taking a political stance. Although unlikely, it’s not outside of the realms of possibility.

Challenge from the regulator

Beyond action from players, we may see involvement from regulators. In the US, the Wall Street Journal recently reported that the Department of Justice is investigating the PGA Tour for potential antitrust tendencies.  Perhaps we will see the ACCC taking similar action.

The ACCC has already taken an active role with the PGA. Just last year, it granted players the ability to engage in collective bargaining for the terms and conditions of membership of the PGA and the WGPA.

This insight follows the recent article written by Kingston Reid’s very own Steven Amendola with the assistance of Peter Willink and Catherine Flannery-Sweet which was printed in the Australian Financial Review on 23 July 2022. This article can be found here.

 

Peter Willink Senior Associate +61 3 9958 9620 [email protected]

Steven Amendola Partner +61 3 9958 9606 [email protected]

 

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

Catherine Flannery-Sweet Lawyer +61 3 9958 9616 [email protected]

The Health Services Union (Union) has finalised their internal election over the past fortnight, including the positions of Secretary, Assistant Secretary and the Committee of Management.

What does this mean for health public sector employers over the coming period? Employers within the sector can expect a reinvigorated and re-energised Union presence on their sites and greater industrial engagement from their local Union organiser and Industrial Officer.

Whilst the incumbent ticket has been elected unopposed, aside from the creation of an additional Assistant Secretary position, it’s not all business as usual. The re-election of the incumbent ticket is often perceived as a mandate for the Union to increase their presence on the ground and reinvigorate their broader campaigns. This will be greatly assisted by the public goodwill towards healthcare workers arising out of the COVID-19 pandemic.

With the Union covering a broad range of health sector workers, ranging from hospital cleaners to junior doctors, their density and appetite for state wide campaigns will be a relevant consideration over the coming months and years. Further, with the election of the Albanese Labor Government, a more emboldened Union presence is to be expected, and more importantly, planned for.

We have outlined below the three main areas to keep an eye on.

1. Consultation

Consultation disputes are a common entry point for union campaigns, particularly in circumstances where their membership may be disgruntled about proposed change more broadly. This is true even when the employer is nevertheless entitled by way of managerial prerogative to make such a change.

Many health public sector employees are long term and accustomed to entrenched practices and working arrangements. Where an employer seeks to amend those practices, the myriad of State Awards which cover NSW Health workers proscribe mandatory consultation obligations with the Union and staff with respect to the proposed change. Indeed, the same can be said for those in the private sector.

Failure to adhere to the consultation obligations is likely to lead to a consultation dispute, which may delay the operational changes sought and result in avoidable litigation with the Union.

In working through proposed changes, employers should be mindful of the consultation obligations which arise under the applicable State Award, and also the Work Health and Safety Act 2011, as well as the suite of policies that apply to NSW Health.

Being aware of the layered consultation obligations which exist and engaging proactively on proposed changes can limit the capacity for industrial disputation and subsequent delay and disruption of operational changes.

2. Casual Conversion

The Union has quite effectively utilised federal casual conversion requirements with their aged care membership. Whilst these federal obligations do not carry across to public sector health workers, there are other mechanisms available for the Union to agitate similar campaigns and concerns on behalf of their public sector membership.

The NSW Health Status of Employment Award applies to a broad range of public health employees, and requires NSW Health to limit their use of temporary and casual employment arrangements and term contracts in favour of ongoing employment arrangements.

The Award provides that no positive step is required for casual conversion to occur, instead it occurs as a matter of strict application. Where an employee has been engaged continuously on a temporary contract for more than 13 weeks, the Award as a matter of law simply deems such an employee as permanent.

Disputes of this nature are popular within the Union due to their simplicity, and the substantial impact on the membership and Union reputation where an employee is successfully recognised as permanent. Such disputes have an impact on the status of the relevant employee and may also result in back pay and accrual of relevant leave entitlements. An unexpected conversion can be highly disruptive to funding arrangements, particularly where a permanent position was not accounted for in the circumstances.

Employers within the sector need to be cognisant of the risk of engaging in temporary arrangements of this nature, and be mindful of the length of such arrangements to ensure that the automatic conversion provisions of the Award are not unintentionally enlivened.

3. Right of Entry

Lastly, targeted right of entry campaigns are the bread and butter of union organising, and health agencies can expect an uptake of right of entry notices under both the Industrial Relations Act 1996 and Workplace Health and Safety Act 2011.

The various rights and obligations of right of entry must be strictly adhered to, particularly as civil penalty regimes apply, not just with entry into the worksite itself, but also more broadly in relation to the production and copying of sensitive documents.

Kingston Reid has recently provided training to a Local Health District on the complicated legislative scheme surrounding right of entry, as well as helpful tips and tricks from our lawyers who have worked closely with Unions. We would be happy to provide training across health agencies to ensure that HR and IR managers are well equipped moving forward. Please contact either Lucy or Justine on the details provided below.

Be Prepared

In summary it is important for health sector agencies to be prepared for increased Union presence and activity. Being aware of your obligations, having a plan and seeking advice early is key to managing relationships, achieving internal change and limiting disputation.

Join us at Healthy Workplace Connections

We invite you to join our monthly virtual catchup specifically for HR and IR professionals in the health sector to hear about the latest developments and why they are important and connect with others in the sector. Keep an eye out for the invitation which will be sent soon.

Lucy Shanahan
Partner
+61 2 9169 8405
[email protected]

Justine Amin
Lawyer
+61 2 9169 8415
[email protected]