Insights & News

September 5, 2023

It was a reform package that was announced as being about closing loopholes and enhancing protections. However, on 4 September 2023, the Government introduced a raft of reforms which go much further than that.

The Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 has opened new fronts for debate and introduced new amendments which employers will have to grapple with in the coming months. This follows the last round of reforms some of which only commenced less than three months ago, on 6 June 2023.

Kingston Reid presents its first summary of the surprises the Government has included in its latest round of workplace relations reform. Stay tuned for our rolling coverage as Kingston Reid continues to analyse the Bill in depth over the coming days.

Casual Employment

What We Thought It Would Be About: They said it was a return to an objective test for casual employment.

What It Is Actually About: What has been introduced is a new definition of casual employment, along with a new system of employee driven notifications to convert to full time or part time within as little as 6 months service (for employers who are not a small business).

This is despite the existence of a simple and sensible system for casual conversion initially introduced into Modern Awards by the Fair Work Commission and translated into the National Employment Standards.

How It Works: The Bill will insert a new definition of casual employment which requires the employment relationship to be characterised by the absence of a firm and advance commitment to continuing and indefinite work, and the employee to be entitled to a casual loading. A loading must be paid to all casual employees regardless of how senior they are or how much they are paid and even if they are not award or agreement covered.

The new definition is to be applied having regard to various indicia, having regard to the “substance, practical reality and true nature” of the employment relationship over time (that is, it is not assessed at the time of contracting as is currently the case).

However, employees will not automatically convert to casual if the nature of their engagement becomes such that they no longer meet the definition of a casual employee. Rather, this provides a new basis on which the employee can covert to permanent after 6 months’ employment.

The capacity of the employer to decline conversion is limited to where they consider the employee still meets the definition of casual employment, there are limitations in an industrial instrument making conversion impracticable, or conversion would result in non-compliance with recruitment obligations under law.

The Bill also includes:

• anti-avoidance measures and prohibitions on dismissing an employee to reengage them to perform the same or substantially the same work on a casual basis;
• prohibitions on misrepresenting a contract of employment as being casual in nature (with there being a defence that the employer reasonably believed the employee was in fact a casual); and
• the ability for the Commission to deal with disputes, including by arbitration.

“Same Job, Same Pay”

What We Thought It Would Be About: They said they would close the labour hire loophole.

What It Is Actually About: What has been introduced is a labour hire harmonisation system which effectively benchmarks labour hire entities to host employers and allows employees and unions the capacity to seek orders which introduce pay parity across operations. The only exemptions are for training arrangements and short-term engagements not exceeding 3 months. Conceivably, labour hire operators, consultants and contractors can be caught by the scheme.

Further, an anti-avoidance scheme has been included which recognises conduct that takes place from 4 September 2023 (being the day this Bill was introduced to Parliament).

That’s right, any arrangement entered into from 4 September 2023 until the Bill receives royal assent can be caught by the anti-avoidance provisions.

How It Works: One major change under the Bill is to create a new (and relatively complex) scheme for labour hire rates of pay.

Under this scheme, the Commission can make “Regulated Labour Hire Arrangement Orders” which set the minimum rates of pay a labour hire provider must pay to employees. This “protected rate of pay” is the full rate (that is, inclusive of loadings, penalties and allowances etc) payable to direct employees of the host under its enterprise agreement (or other relevant industrial instrument).

The Commission can decline to make such an order, if it is satisfied it is not fair and reasonable to do so, having regard to submissions on a range of issues, including as to the history of industrial arrangements, the relationship between the host and the employer, the terms and nature of the engagement, and other matters.

There is also an obligation on the host to provide information necessary for the labour hire provider to determine the protected rate of pay, along with a capacity for the Commission to deal with disputes (including by arbitration).

There are limited exceptions to this scheme (including for short term engagements, and to some extent, small businesses) and anti-avoidance provisions.

Gig Economy Workers

What We Thought It Would Be About: They said it was about supporting gig economy workers.

What It Is Actually About: What has been introduced is a system that extends to gig economy workers but in the same breath revives the Federal Government’s regulation of the road transport industry with new powers introduced to set minimum standards for the road transport industry and hear disputes about unfair contract terms and disputes.

The Bill also features a new test for determining a worker’s employment status, even though this did not initially form part of the Federal Government’s suite of proposed industrial relations reforms at the May 2022 federal election. This proposed amendment extends beyond application to workers in the gig economy and has the potential to impact other non-employment-based work relationships.

How It Works: The Bill will insert a statutory test for employment into the Fair Work Act, which will be applied looking at the “totality of the relationship”, to ascertain the “real substance, practical reality and true nature of the relationship”.

This amendment is targeted at changing the approach adopted by Courts and Tribunals to determining the status of a worker following the High Court judgments in Jamsek and Personnel Contracting in early 2022, reverting largely back to the approach adopted by Courts and Tribunals since the High Court’s previous landmark judgment in Hollis v Vabu Pty Ltd (2001) 207 CLR 21.

The most extensive aspect of the Bill, comprising almost half the text, relates to the regulation of employee-like and road transport work. These two streams are dealt with largely separately in the Bill, but the framework for each is similar.

Minimum Standards Orders and Guidelines

This includes powers for the Fair Work Commission to make minimum standards orders and guidelines relating to the performance of work by regulated workers (including on its own initiative).

For the employee-like stream, this can include workers (including where they provide their services through an incorporated entity) who:

• perform work under a services contract with the operator of a digital labour platform, or which was facilitated by a digital labour platform; and
• the worker has low bargaining power, or receives less remuneration than an employee performing comparable work, or has a low degree of authority over the way they perform work (other factors can be prescribed by regulation).

For the road transport industry, this includes workers (including where they provide their services through an incorporated entity) who perform work under a services contract in the road transport industry.

Minimum standards orders must include terms specifying coverage, and also a procedure for settling disputes.

Minimum standards orders can also include terms dealing with payment terms; deductions; working time; record-keeping; insurance; consultation; representation; delegates’ rights; and cost recovery.

There are certain matters which cannot be included in an order (primarily relating to matters that are of a commercial nature not affecting terms and conditions of engagement or would change the form of the engagement).

Agreement making

The Bill sets out a process for collective agreements to be made between digital labour platforms or road transport businesses and organisations representing the industrial interests of the employee-like workers, or road transport contractors, who will be covered by it.

This process is commenced by the giving of a notice of a consultation period, which specifies who the proposed collective agreement will cover and what it will deal with. This notice must also be given to the Fair Work Commission, which will publish it on its website, and also to workers to be covered by the proposed agreement. The agreement making parties must also agree on a process for giving a notice to the relevant workers to be covered by the proposed agreement.

The Fair Work Commission can assist in resolving disputes about the making of the agreement, but arbitration is not permitted. The Fair Work Commission is also responsible for registering a collective agreement, and also its termination (after the termination steps in the collective agreement have been completed).

Unfair deactivation and termination

The Bill also creates quasi-unfair dismissal rights in the Commission known as “Unfair Deactivation” in the case of the employee-like stream, or “unfair termination” in the road transport stream.

In each case, certain jurisdictional prerequisites apply (similarly to the unfair dismissal jurisdiction – including a contractor high income threshold) and the Commission will consider whether the deactivation or termination was unfair having regard to the existence or absence of a “valid reason”.

The minister also has the power to develop a code for each stream setting out other considerations, for example around fair deactivation or termination procedures.

In both streams, the Commission can order reactivation or reinstatement, and make orders for lost pay. However, orders for compensation in lieu of reinstatement are only available in the road safety stream.

Wage Theft

What We Thought It Would Be About: They said it was about criminalising wage theft.

What It Is Actually About: The Bill establishes new wage theft offences which carry penalties of up to 10 years imprisonment, and financial penalties of up to $1,565,000 for an individual and $7,825,000 for a corporation, or 3 times the value of the underpayment, whichever is higher.

The Bill also abrogates the privilege against self- incrimination to allow employee records maintained and kept by an employer to be used in subsequent proceedings. As noted in the explanatory memorandum, if an employer is lawfully required to produce and keep (or issue) these documents and records, then it is not reasonable for their use in evidence to be prevented.

How It Works: It will be a criminal offence to intentionally underpay employee entitlements arising under the Fair Work Act, modern awards or enterprise agreements (although the new offence will not apply to superannuation underpayments).

Prosecutions may only be commenced by the Australian Federal Police or the Commonwealth Director of Public Prosecutions

It will be a defence to demonstrate honest mistake or that the underpayment was not the result of intentional conduct – demonstrating due diligence will be critical for employers relying on the defence of honest mistake.

Employers may avoid criminal (but not civil) liability by:

• self-reporting and entering a ‘Cooperation Agreement’ with the Fair Work Ombudsman; or
• complying with a yet-to-be-developed voluntary Small Business Wage Compliance Code.

Delegates rights

What We Thought It Would Be About: They said it was about closing loopholes.

What It Is Actually About: What has been introduced is a new set of workplace rights for union delegates to be recognised in Modern Awards and Enterprise Agreements.

This is a new mandatory term in Enterprise Agreements with any less favourable terms seeing the Modern Award provision prevail.

How It Works: The Bill requires the Commission to include terms in modern awards dealing with union delegates’ rights, which prevail over any less beneficial delegates rights terms in enterprise agreements.

The Bill also enshrines stand-alone rights for delegates including to represent employees in disputes, reasonable communication with members (or eligible non-members) in relation to their industrial interests, reasonable access to the workplace and workplace facilities, and (other than for small business) access to paid time during normal working hours for training.

Unfair contract jurisdiction for independent contractors

What We Thought It Would Be About: They said it was about affordable access for independent contractors to enforce their rights.

What It Is Actually About: What has been introduced are new powers enabling the Fair Work Commission to deal with disputes about unfair terms in services contracts.

There have also been changes to the (existing) defence for misrepresenting employment as an independent contractor arrangement (known as ‘sham contracting’), from a subjective test of recklessness to an objective test of reasonableness, with the Courts having wide discretion to consider ‘any other relevant matters’ in assessing the reasonableness of the employer’s belief.

How It Works: The Fair Work Commission will have a new unfair contracts jurisdiction. This will enable independent contractors (or organisations representing their industrial interests) to seek orders varying or setting aside all or part of a contract if the Commission considers the contract to be “unfair”.

In determining unfairness, the Fair Work Commission will have regard to a range of factors including (but not limited to):

• the relative bargaining power between the independent contractor and the principal;
• whether the contract as a whole displays a significant imbalance of rights and obligations;
• whether the contract imposes a harsh, unjust or unreasonable requirement on a party; and
• whether the contract provides for total remuneration less than employees or regulated workers under minimum standards orders or guidelines.

Again, this is subject to an exclusion where the independent contractor earns above the contractor high income threshold (to be set by regulation).

Other Changes

Other changes include:

• Changes to the multi-employer bargaining framework:
  • the Bill will modify the rules that regulate the interaction between enterprise agreements, with the effect that single-enterprise agreements will prevail over existing supported bargaining and single interest multi-employer enterprise agreements, even where those multi-employer agreements have not passed their nominal expiry date.
  • However, this change is limited somewhat by the fact that in order for an employer to put a single-enterprise agreement to vote of a workforce covered by an “in-term” multi-employer agreement, the written agreement of an employee organisation is required (or otherwise a voting request order from the Fair Work Commission).
  • In addition, under the Bill, when the single-enterprise agreement is assessed by the Commission to determine whether it passes the “better off overall test”, the terms of the multi-employer enterprise agreement is a relevant comparator.
• A new limitation on the existing small business exclusion on the obligation to make redundancy pay: under the Bill, this exclusion will not apply, in essence, where the employer became a small business due to insolvency;
• The inclusion of family and domestic violence as a protected attribute for anti-discrimination protections;
• An expansion of the affected member certificate regime to included cases of underpayment (meaning permit holders can seek approval from the Fair Work Commission to exercise right of entry without providing advance notice);
• Winding back the changes made to the de-amalgamation process for unions, which enabled this to occur when the relevant constituent part amalgamated more than 5 years prior; and
• Various changes to asbestos and work health and safety, including the introduction of a new industrial manslaughter offence in the Work Health and Safety Act 2011 (Cth) and increased penalties for Category 1 offences.

August 31, 2023

In a bid to strengthen Workplace Health and Safety (WHS) standards, Safe Work Australia has introduced a consultation paper outlining a range of suggested amendments to incident reporting obligations. These changes are aimed at enhancing the visibility of workplace incidents for WHS regulators. However, while the proposed amendments to incident reporting are no doubt well-intentioned, they risk imposing undue administrative burdens on businesses and overburdening safety regulators. This is especially concerning given that the businesses and regulators are still coming to grips with how to effectively manage psychosocial risks and the skill sets required to do so.

Below we set out the proposed changes and the number of variables proposed in each notification approach.

Proposed Change 1 – Periodic Reporting of Incapacity Periods

Currently, incident notification for psychological injuries is only required in cases of death, immediate hospitalisation, or dangerous incidents. For physical injuries, incidents necessitating immediate treatment are also covered.

What Could Change?

Safe Work Australia proposes amending the model WHS legislation to introduce periodic reporting every six months of incapacitation periods lasting ten or more consecutive days due to work-related psychological or physical injuries, illnesses, or harm.

This change would require a person conducting a business or undertaking (PCBU) to assess whether a worker’s illness or injury resulted from the conduct of the business or undertaking. The consultation paper suggests potential evidence that may aid this determination includes:

• Specific events leading up to the worker’s absence;
• Reports from supervisors; or
• Self-reporting by workers.

Proposed Change 2 – Attempted Suicide, Suicide, and Other Deaths

Currently, suicide or death due to psychological harm is reportable. A suicide attempt ‘arising from the conduct of the business or undertaking’ requires notification when the person needs immediate treatment as an inpatient in a hospital or immediate treatment for specific injuries.

What Could Change?

Option 1: Suicide and other Worker deaths

Safe Work Australia proposes clarifying guidance material to encompass the death of a person from:

• Suicide due to psychological harm arising from business operations;
• Other deaths resulting from exposure to psychosocial hazards linked to business activities (e.g., heart attack from work stress); and
• Suicide of a person in a workplace with an identified suicide risk.

Option 1 also includes amending guidance material to provide examples of circumstances and evidence indicating that psychological harm contributing to a person’s suicide may have arisen from the business or undertaking’s conduct. Examples include:

• Occurring while the worker is ‘at work,’ in the workplace, or at a place associated with work (e.g., worker accommodation);
• Evidence of a direct link to work (e.g., notes, testimonies);
• History of exposure to psychosocial hazards at work (e.g., traumatic events, reports of bullying, prolonged high job demands, or fatigue);
• Worker had a work-related psychological injury or illness; and
• Recent difficulties at work.

Option 2: Suicide of a Worker whether or not death arises from conduct of PCBU

A second option suggests broadening the definition of a notifiable incident to include a worker’s suicide, regardless of whether the act arises from business operations. This would eliminate the need for PCBUs to speculate on the potential causes of the suicide. Upon a suicide occurring, a PCBU would be required to promptly report the incident to the WHS regulator.

Option 3: Attempted Suicide of a Worker stemming from business activities

A recommendation revising incident notification provisions to mandate immediate reporting by PCBUs to WHS regulators upon becoming aware of an attempted suicide stemming from business activities.

Under this change, notification would be required when a reasonable suspicion exists that the attempt resulted from severe or prolonged exposure to psychosocial hazards at work. Notification would only be necessary where the attempt posed a high risk of death or serious injury. PCBUs would not need to notify if that threshold was not met.

Option 4: Attempted Suicide of a Worker

This recommendation requires notification of attempted suicide by workers, irrespective of whether the attempt arises from the conduct of the business or undertaking. This approach would eliminate the need for PCBUs to speculate on the potential causes of the attempted suicide.

Proposed Change 3 – Reporting Workplace Violence

Currently, reporting workplace violence is only mandatory if it leads to death, immediate hospitalisation or treatment, or results in illness requiring medical attention within 48 hours.

What Could Change?

Safe Work Australia proposes amending the model WHS legislation to mandate immediate notification to the WHS regulator for cases of serious workplace violence and threats. Immediate notification would be required for incidents such as:

• Sexual assault: Non-consensual sexual behaviour that is threatening or violent, occurring within the context of the business or undertaking;
• Serious physical assault: Instances of assault with a weapon or physical harm;
• Deprivation of liberty: Situations where a person’s freedom is restricted or denied by another individual; and
• Threat of serious violence: Express or implied threats causing genuine fear of death, serious sexual assault, or severe injury.

These proposed changes would be triggered by verbal, written, or otherwise communicated threats of serious violence, posing an immediate or imminent serious risk to health and safety. Excluded would be threats where the person making the threat lacks capability or intent to carry it out or where the threat does not involve serious violence.

Optional Add-On: Tailored Reporting Arrangements

Another facet of these changes is the optional inclusion of allowing WHS regulators to approve alternative reporting arrangements for certain PCBUs. This aims to offer reporting flexibility for industries with high incident volumes, where immediate reporting to the WHS regulator may be unfeasible.

Proposed Change 4 – Periodic Reporting of Exposure to Traumatic Events

Current provisions only require notification of notifiable fatalities, serious injuries, or dangerous incidents arising from business activities with a focus on physical harm, rather than psychosocial risks.

What Could Change?

Safe Work Australia proposes amending the model WHS legislation by introducing a new requirement for PCBUs to periodically report to the WHS regulator on exposures to serious injuries and fatalities, as well as instances of abuse or neglect likely to be experienced as traumatic by workers or others. This would encompass exposures to situations, materials, and reports.

Optional Add-On: Tailored Reporting Arrangements

An optional add-on recommends allowing alternative reporting arrangements for certain PCBUs to reduce administrative burden (such as first responders).

Proposed Change 5 – Periodic Reporting of Bullying and Harassment

Current incident notification provisions only capture bullying and harassment where it results in the person requiring immediate treatment for a serious injury (e.g. the person is physically assaulted).

What Could Change?

Option 1: Unreasonable Behaviours

This option suggests amending the model WHS legislation to mandate periodic reporting (every six months) of de-identified data related to complaints or instances of:

1. Repeated and unreasonable behaviour (bullying) towards a worker or group of workers; and
2. Unreasonable behaviour towards a worker(s) that a reasonable person would consider abusive, aggressive, offensive, humiliating, intimidating, victimising, or threatening, including sexual harassment or harassment of any kind.

Option 2: Bullying, Sexual Harassment, and Harassment on Protected Grounds

Similar to option 1, this option proposes amending the model WHS legislation to mandate periodic reporting every six months, focusing on complaints or instances of:

1. Workplace bullying – repeated, unreasonable behaviour towards a worker(s) or group of workers;
2. Workplace sexual harassment of a worker(s); and
3. Workplace harassment of a worker(s) based on protected characteristics (e.g., race, sex, gender, sexual orientation, age, disability).

Proposed Change 6 – Reporting of Long Latency Disease

Current incident notification provisions focus on immediate effects of substance exposure, such as injuries or illnesses requiring treatment within 48 hours. Dangerous incidents cover serious risks from uncontrolled substance exposure. However, these arrangements allegedly do not cover long latency diseases that may appear years after exposure.

What Could Change?

Safe Work Australia is soliciting feedback on how reporting on long latency diseases could be conducted. Although no specific proposal has been presented, it appears that four options are under consideration:

Option 1: Record and Report Latent Disease Exposures

Introduce a mechanism to record and report exposure to hazardous substances leading to long latency diseases.

Option 2: Enhance Exposure Monitoring

Explore advanced technologies beyond air and health monitoring to provide real-time data on substance exposure levels for a more accurate understanding of potential risks.

Option 3: Reporting Exceedances of Exposure Standards

Incorporate a requirement for PCBUs to record and report instances where the workplace exposure standard is exceeded.

Option 4: Broadening Statement of Exposure Records

Extend the requirement to maintain records of exposure documents to include substances known to cause long latency diseases for a comprehensive WHS approach.

Proposed Change 7 – Reporting Serious Head Injuries

Presently, serious head injuries are reported based on specific criteria, including the need for “immediate treatment.” Concerns have arisen that this provision may not sufficiently cover head injuries that worsen over time.

What Could Change?

Option 1: Broaden the Definition of Serious Head Injury

Amend the model WHS legislation to broaden the definition of “serious head injuries” without requiring “immediate treatment.” This change would empower PCBUs to determine the severity of the head injury, providing a more comprehensive reporting framework. Guidance materials would aid PCBUs in identifying reportable cases.

Option 2: Include Suspected Serious Head Injury

Amend the model WHS legislationto include “suspected serious head injuries” requiring immediate treatment. This modification would identify cases where the injury’s severity may not be immediately evident but necessitates urgent care. The existing threshold of “immediate treatment” would remain.

Option 3: Clarify the Concept of Immediate Treatment

Clarify the concept of “immediate treatment” for serious head injuries to ensure it is not perceived as limited to surgical interventions. Use an “incapacity period” to capture injuries worsening over time and leading to work incapacity.

Proposed Change 8 – Reporting Incidents Involving Large Mobile Plant

Presently, dangerous incident provisions cover plant collapse, malfunction, or damage posing a significant health and safety risk. Safe Work Australia has identified that dangerous incidents involving mobile plant, such as collisions, overturning, or loss of control, are not reported unless they meet specific criteria (e.g., resulting in fatality or serious injury).

What Could Change?

Amend the dangerous incident provisions in the model WHS Act to require immediate notification of powered mobile plant malfunction or loss of control exposing individuals to a serious health and safety risk. This provision would specifically cover incidents listed under Regulation 214 of the model WHS Regulations, including overturning, entrapment, collisions, and roll-aways. Clear guidance material would accompany the provision to offer comprehensive examples and ensure accurate reporting.

Proposed Change 9 – Capturing the Fall of a Person

Interestingly, Safe Work Australia has found that the current provisions relating to falls from height do not encompass the fall of a person unless the incident results in a fatality or serious injury, or involves another notifiable dangerous incident. Current provisions primarily relate to the risk of objects falling from a height rather than the fall itself.

What Could Change?

Amend the dangerous incident provisions in the Model WHS Act to include the fall of a person exposing individuals to a serious health and safety risk. This would cover falls into holes, pits, trenches, crevices, and bodies of water.

Other Proposed Changes

Causal Link Principle: Amend the model WHS Act to emphasise the ‘causal link principle’, requiring incidents to relate to the business or undertaking’s conduct. This aims to prevent the notification of non-work-related incidents.

Objective Test: Amend incident notification provisions to explicitly reflect that the test for serious injury or illness is objective. This change ensures consideration of whether the injury or illness could reasonably warrant medical treatment, regardless of actual administration. This clarification aims to guide PCBUs in applying the objective test.

Clearer Description of Terms: Amend guidance material to provide clearer descriptions of terms such as ‘immediate treatment,’ ‘inpatient,’ and ‘hospital.’ This will enhance PCBUs’ understanding of notification requirements, even in situations where treatment is not immediately administered or in a conventional hospital setting.

Loss of Bodily Function: Enhance guidance to provide better understanding of the injuries and illnesses encompassed under this category.

Medical Treatment for Exposure to Substances: Contemplate expanding the ‘medical treatment’ definition to include health professionals beyond doctors. This would reflect the broader range of professionals, like paramedics and registered nurses, providing urgent treatment after substance exposure.

Exposure to Human Blood and Body Substances: Offer improved guidance to PCBUs regarding notifications required for exposures to human blood and body substances.

Infections and Zoonoses: Provide prominent information on these requirements to enhance compliance and reporting accuracy.

Simplifying Dangerous Incident Provisions: Consider amendments to simplify dangerous incident provisions while preserving policy intentions.

Improving Reporting of Electrical Hazards: Amendments to better capture incidents involving electrical hazards, such as electric shock, electrical explosion, and arc flash explosion.

Mutual Duty to Notify: Introduce a mutual duty for PCBUs and individuals with workplace management or control to notify each other upon becoming aware of notifiable incidents.

What do these changes mean for businesses?

The consultation period for feedback to Safe Work Australia closes on 11 September 2023, which does not leave businesses significant time for considering the proposed changes and raising any concerns.

The current incident reporting framework, outlined in the model WHS legislation, mandates that a PCBU must notify the safety regulator of specific incidents, including deaths, serious injuries or illnesses, and dangerous incidents. That current notification framework applies to incidents which arise out of the conduct of the business or undertaking at a workplace.

Safe Work Australia’s proposed amendments in relation to clarifying existing reporting obligations are welcome. However proposed amendments to psychosocial risk incident reporting seek to introduce language which is, in a number of respects, ambiguous and open for interpretation. For example, some proposed changes have a link to the workplace, for example, using language such as “work related”, “arising from business operation” and “linked to business activities”. As has been apparent from the current notification requirements, there are many incidents where it is not clear if there is a link to the workplace. This raises issues of who will ultimately assess whether these incidents are notifiable, and what are those persons’ skills or qualifications in assessing them to be e.g., their particular expertise in assessing psychosocial risks.

Other proposed changes by Safe Work Australia do not require any link to the workplace and are purely event based. This appears at odds with the general obligations in the model WHS legislation which require a causal link to the business or undertaking.

Other changes, for example in relation to workplace violence, require notifications in all cases. It is unclear whether any regulatory impact has been undertaken to assess how such notifications will impact a situation where, for example, an incident investigation is yet to have commenced or be completed and the alleged perpetrator is to be given due process whilst the investigation is undertaken. This is even more significant when external authorities such as the police may have become involved and are investigating a criminal offence.

Without clear and unambiguous regulatory guidance (which has not been developed and which needs to be provided so that PCBUs can consider the impacts) the proposed changes may lead to confusion and complexity for workplaces. Implementing the proposed changes will undoubtedly place significant administrative burdens on PCBUs, strain safety regulator resources, and divert focus from immediate safety concerns. Policymakers should carefully consider the efficacy of the current framework, necessary guidance and evaluate potential consequences before introducing unnecessary changes.

It will be important for employer representative associations and organisations to consider the proposed changes on behalf of their employer members and provide advocacy on potential impacts before any changes are legislated.

August 8, 2023

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

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

Background

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

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

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

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

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

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

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

When is an employee on a frolic of their own?

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

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

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

A caution!

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

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

July 26, 2023

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

Background

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

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

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

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

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

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

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

Safety Failures

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

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

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

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

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

Key takeaways

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

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

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

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

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

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

July 17, 2023

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

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

What information will need to be destroyed?

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

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

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

The types of documents that this will capture include:

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

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

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

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

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

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

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

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

July 6, 2023

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

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

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

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

When can an employer rely on the exception?

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

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

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

When can’t an employer rely on the exception?

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

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

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

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

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

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

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

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

May 25, 2023

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

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

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

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

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

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

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

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

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

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

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

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

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

The FWC will make the declaration where:

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

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

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

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

What about industrial action?

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

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

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

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

What does this mean for employers?

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

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

Is the approval process simpler?

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

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

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

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

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

What does this mean for employers?

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

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

Businesses must ensure they avoid:

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

Are the changes to the Better Off Overall Test better?

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

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

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

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

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

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

What does this mean for employers?

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

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

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

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

Businesses will be well advised to:

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

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

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

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

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

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

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

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

Which industries are likely to see supported bargaining authorisations?

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

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

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

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

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

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

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

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

What about the single interest authorisation?

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

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

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

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

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

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

What does this mean for business?

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

This has two significant upsides:

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

So, what about Flexible Working Requests?

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

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

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

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

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

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

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

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

So, what does this mean for business?

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

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

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

What about unpaid parental leave extensions?

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

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

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

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

What does this mean for employers?

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

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

What about pay secrecy?

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

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

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

What does this mean for employers?

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

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

May 17, 2023

Unpacking the Fair Work Commission Statement of Principles on Genuine Agreement which appears to replace technicality with uncertainty

From 6 June 2023, the process for approval of agreements was set to become clearer and move away from the prescriptive steps that employers must currently follow.

Following consultation with key stakeholders, the Fair Work Commission (FWC) has now released the final version of its Statement of Principles on Genuine Agreement in enterprise bargaining (Statement of Principles).

• Is it clear? Not necessarily – Technicality may be replaced with uncertainty about interpretation.
• Is it less prescriptive? Maybe – New steps and considerations could potentially be applied in a prescriptive way.

There are new obligations that employers must endeavour to satisfy in order to meet the genuine agreement test.

The Statement of Principles essentially codifies and condenses to a single document a number of the tests and considerations that have, until now, been expressly stated in the FW Act or developed by the FWC and Federal Courts in previous cases.

It marks a key milestone in the FWC’s preparation for numerous bargaining-related amendments to the Fair Work Act 2009 (Cth) (FW Act) (refresh your memory with Kingston Reid’s Secure Jobs, Better Pay Act Overview).

How will the Statement of Principles change enterprise agreement approval applications?

Informing employees of their right to be represented by a bargaining representative

What is clear: Employers may be able to continue to meet this requirement by issuing a Notice of Employee Representational Rights.

What is uncertain: There is a new provision which provides that employers should not mislead employees (by words, action or otherwise) as to their rights to be represented or the role of an employee organisation as the default bargaining representative.

• There is no clarification on whether this is subjective or objective.
• There is no express statement as to intention.
• The terms “by words, action or otherwise” are uncertain and may be disputed.

Providing employees with a reasonable opportunity to consider a proposed enterprise agreement

What is clear: Employers will be able to continue to meet this requirement by providing employees with a copy of the agreement and the material incorporated by reference for 7 full calendar days before the voting starts (or such other reasonable period agreed with an employee organisation – as distinct from any bargaining representative). This can be a hard copy, an electronic copy or a combination of both.

What is uncertain: There is a new provision which provides that employers can only do so provided that employees have a reasonable opportunity to access and read the material during the whole of the period from the time the material is provided until completion of the voting process.

Explaining to employees the terms of a proposed enterprise agreement and their effect

What is clear: Employers will be able to continue to meet this requirement by taking all reasonable steps to explain the terms of a proposed enterprise agreement, and the effect of those terms, to employees employed at the time who will be covered by the agreement. This should include at a minimum explaining to employees how the proposed agreement will alter their existing minimum entitlements and other terms and conditions of employment.

What is uncertain: This is set as a minimum requirement. When is “more” going to be required?

• There are new requirements which provide for what might “generally be sufficient”. This leaves it open as to when, and in what circumstances, it would not be sufficient.
• It will generally be sufficient to explain the differences in entitlements and other terms and conditions between the proposed agreement and any applicable modern award provisions that have been varied since a predecessor agreement was made (including award variations that have not yet come into effect). There is no reference to the timeframe for new variations to come into effect or what might otherwise be reasonable.
• There are new provisions which set out that there is usually no need to explain “trivial differences” between the proposed agreement and an existing enterprise agreement or modern award that have no effect on employees’ entitlements or obligations. Disputes will arise around what makes it trivial and the extent to which an employer was required to explain a “triviality”.
• There is a provision which provides that section 180(5) will generally not be satisfied if the employer makes an incorrect representation or misleads employees (by words, action or otherwise) about a “significant term” of the proposed enterprise agreement or its effect. All the same issues arise about what makes something “misleading” but there is a question about what is deemed to be “incorrect” about a “significant term”.
• Where oral explanations are given, there must now be a written record or summary of the oral explanation. Additionally, employees should have a reasonable opportunity to attend the oral explanation. There will likely be disputation over what a “reasonable opportunity” is and over what percentage of the employee voting group this applies to (for example, where employees are on leave throughout the relevant period).

Providing employees with a reasonable opportunity to vote on a proposed agreement in a free and informed manner, including by informing the employees of the time, place and method for the vote

What is clear: Employers will be able to continue to meet this requirement by ensuring employees are informed of the time, place and method for the vote at least 7 full calendar days before the day the vote commences (or such other reasonable period agreed with an employee organisation – as distinct from any bargaining representative).

What is uncertain: The method and period of voting should provide all employees entitled to vote with a fair and reasonable opportunity to cast a vote. Who and what determines whether the method and period make it fair and reasonable will likely be put to employers in challenging an approval application.

Other matters considered relevant

What is clear: The matters which the FWC may take into account in determining whether employees have sufficient interest in the terms of an enterprise agreement and whether those employees are sufficiently representative.

What is uncertain: When the following matters will be appropriate to take into account.

• The inference that an enterprise agreement should not be a safety net agreement for employees but rather, a paid rates agreement so that employees are not going backwards in enterprise agreement provisions and have a “sufficient interest”.
• The inference that the employee voting group for an enterprise agreement must cover:
• the full range of classifications in the enterprise agreement;
• the full range of types of employment contemplated (e.g. full time, part time, casual etc);
• the full range of geographic locations the enterprise agreement covers; and
• the full range of industries and occupations the enterprise agreement covers.
• The starting position that an enterprise agreement has not been genuinely agreed unless it was the product of an “authentic exercise”. What makes it “authentic” and, according to who, will be the subject of dispute upon an application for approval.
• The “significant weight” attributed to an employee organisation having “concerns that the agreement was not genuinely agreed to by the employees”. An area of dispute will likely be around the basis of those concerns – specifically, whether they need to be reasonable and in good faith.

Getting ready for the Statement of Principles

It remains to be seen how the Statement of Principles will ultimately be used by employee organisations or applied by the FWC in enterprise agreement approval applications that come before it.

Irrespective of this, employers should:

• be ready to engage with the Statement of Principles as effectively as possible;
• be prepared for a lengthy and more complicated approach to bargaining (and more importantly, approval processes); and
• consider approaches to bargaining.

If your business requires advice or assistance relating to enterprise bargaining, please reach out to the team at Kingston Reid.

April 24, 2023

‘Psychosocial’ hazards have become a buzz word in recent years – largely due to an increase in psychological harm people are suffering in relation to work – and equally due to our increasing awareness about the issues. Psychosocial hazards create a stressful work environment which may cause psychological or physical injuries in the workplace, including worker burnout or depression.

Psychosocial hazards arise in all facets of the workplace and can stem from workers’ social and physical work environments, and include bullying, sexual harassment, poor support, low role clarity, low recognition and poor workplace relationships. Psychosocial hazards can also come from poor job design, a lack of organisational justice and management and the social context of work.

On 1 April 2023, new Work Health and Safety (Psychosocial Risks) Amendment Regulation 2022 (Qld) and the Queensland Code of Practice on Managing Psychosocial Hazards at Work 2022 (Code) commenced to assist persons conducting a business or undertaking (PCBUs) in discharging their obligations to workers regarding psychosocial hazards in the workplace.

The driver for these changes was the Boland Review of the Model WHS Laws in 2018 which concluded that the Model WHS Laws did not do enough to address psychosocial hazards in the workplace. Following this, Safe Work Australia created the ‘Model Code of Practice: Managing psychosocial hazards at work’, the basis for Queensland’s Code. Other harmonised states have already adopted versions of the Code.

What’s changed?

At first glance, not much. PCBUs are already required to address psychosocial hazards. The Work Health and Safety Act 2011 (Qld) (Act) requires PCBUs to ensure the health and safety of their workers which includes both physical and psychological health.

As Workplace Health and Safety Queensland have pointed out, the duty to ensure psychological health of workers is not new. Society just has a better understanding now of the hazards that give rise to psychological harm.

The Code commenced in Queensland on 1 April 2023. A new provision was also added to the Work Health and Safety Regulations 2011 (Qld) requiring PCBUs to manage risks in accordance with the legislative hierarchy of controls (discussed below).

The Code addresses how PCBUs can address psychosocial hazards in the workplace. The Code clarifies existing obligations around psychosocial hazards and aims to help PCBUs implement more effective risk management practices.

In Queensland, the Code has statutory force.

Section 26A of the Act requires PCBUs to comply with codes of practice, or manage hazards and risks in a way that provides a standard of health and safety that is equivalent to or higher than the standard required under a code of practice. A failure to comply with the Code may lead to fines or imprisonment.

By contrast, codes of practice in other harmonised Australian jurisdictions do not create additional duties and no penalties are imposed. They are admissible as evidence of whether a PCBU has complied with their duty. Codes of practice are frequently produced in other jurisdictions as evidence by prosecutors to establish what a PCBU knew or ought reasonably to have known about a hazard or risk, and ways to eliminate or minimise that hazard or risk.

What’s in the Code?

The Code outlines a four-step psychosocial risks management process:

1. identify psychosocial hazards
2. assess psychosocial risks
3. control the risk of psychosocial hazards; and
4. maintain and review control measures.

The Code provides prescriptive guidance about the matters PCBUs must have regard to when completing each step.

This risk management process is not a one-time activity that PCBUs can set and forget. PCBUs must be constantly aware of and engaged in this four-step process to address new psychosocial hazards in the workplace.

An emphasis is placed on the need for and benefit of involving workers in the psychosocial risk management process. PCBUs are encouraged to consult with their workers about how they plan to and how they are going about the psychosocial risk management process.

Workers are encouraged to report psychosocial hazards to PCBUs under the code and a process for responding to these reports is set out to guide users. The hazards workers report will naturally guide PCBUs in their engagement with the risk management process.

What controls should PCBUs implement?

Implementation of effective control measures requires cooperation and communication of PCBUs and their workers. What is effective in one workplace might not be in another. Effective controls should be tailored to the particular hazards and risks identified in the risk management process.

The Code refers to the hierarchy of controls throughout. The hierarchy is a framework created by the Act which sets out the most to least effective forms of risk management available to duty holders.

First, where risks cannot be eliminated entirely duty holders should minimise the risk by substituting or isolating a hazard which gives rise to a risk and by implementing engineering controls (i.e. physical barriers).

Second, duty holders can implement administrative controls like policies and standard operating procedures that minimise exposure and provide information, training and instruction about hazards and risks.

Finally, duty holders can equip workers with personal protective equipment. This may be difficult to envisage for psychosocial hazards. The Code gives examples like hearing protection to reduce stress, and face shields to protect health care workers from distressing environments and patients.

Examples of possibly effective controls are provided throughout the Code.

What do PCBUs need to do?

A Workplace Health and Safety Queensland representative recently gave some simple advice during a public webinar: ‘you should read the code and you should comply with the code’. It is simplistic advice for what is a complex issue – particularly given the intangible nature of many of the hazards the Code is aimed at addressing – but it’s not necessarily untrue.

PCBUs need to know what is in the Code. They should be reviewing their existing controls and consulting with workers to determine if they are currently complying, or if more needs to be done.

As a starting point, review the examples provided throughout the Code. Think about whether any of them resonate with your workplace.

Go through the risk management process. Be guided by the Code to determine if there is more you can do to not only comply, but effectively control psychosocial hazards in the workplace.

Assess your current policies and procedures. Consider whether they deal with, or even contemplate, psychosocial hazards. If they don’t, update them.

Finally, keep a record of the risk assessments you do undertake, and the changes you make. Workplace Health and Safety Queensland have expressed a clear intention to engage in enforcement activity throughout the community. Proper records will be helpful evidence to have when the inspectors come knocking.