Insights & News

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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.

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]

July 27, 2022

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

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

Background

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

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

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

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

What changes are likely to be made?

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

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

One discrimination test

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

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

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

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

End of the ‘comparator test’

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

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

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

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

Positive duty to accommodate

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

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

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

Additional protected attributes

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

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

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

Reverse onus of proof

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

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

Bolstering protections from sexual harassment

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

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

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

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

What does this mean for employers?

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

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

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

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

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

July 22, 2022

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

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

Are post-employment restraints enforceable?

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

What was United Petroleum’s application?

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

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

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

…[and]

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

Was there a legitimate business interest to protect?

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

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

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

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

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

Key takeaways

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

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

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

Next steps for employers

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

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

July 15, 2022

A Labor government will … implement all 55 recommendations in the Respect@Work report – not just the bits that are easy.

– Australian Labor Party 2022 Women’s Budget Statement

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

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

Background  

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

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

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

What changes will the new government make?

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

Introducing a positive duty on employers

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

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

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

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

Expanding the powers of the AHRC

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

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

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

New statutory principles

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

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

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

Introducing cost protections in the Federal Court

Labor may now also introduce a cost protection provision in the AHRC Act if a claim proceeds to the Federal Court (Respect@Work, Recommendation 25).

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

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

Legislative superannuation contributions on paid parental leave

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

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

What does this mean for employers?

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

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

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

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

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