Insights & News

May 31, 2021

For the last seven years the superannuation contribution rate has remained unchanged at 9.5%. However, from 1 July 2021 the rate will increase by 0.5% to 10%, and it won’t stop there. The rate is legislated to continue to increase by 0.5% annually until it reaches 12% in 2025.

What does this mean for your business?

Depending on the remuneration arrangements in place with your employees, the change may result in an increase to your labour costs overnight.

Importantly, it should not be assumed that the income component of an employee’s salary can be reduced by 0.5% and redistributed to their superannuation fund. The ability to do so will depend entirely on the specific contractual arrangements in place.

How are compulsory superannuation obligations determined?

The first step in determining how, and by whom, the increase will be funded is to consider the employment contract.

If an employee’s remuneration is expressed to exclude superannuation contributions then, absent any other contractual provision (or a policy, procedure or custom and practice giving rise to an implied contractual position) the employer is likely to wear the costs of the increase to the employee’s compulsory retirement savings.

Conversely, where the salary or hourly rate is expressed to be inclusive of superannuation contributions and otherwise absorbs all employment entitlements owing to the employee (often referred to as an “absorption clause”) the employer may be able to redistribute the salary accordingly, instead of increasing its cost base. This means the take home pay may be reduced by the increase in superannuation.

What should you do?

Prior to the changes on 1 July 2021, closely consider the employment terms and conditions in place.

• If you have an “all inclusive salary” or “absorption” clause check it works.
• If you don’t, consider whether there is another contractual basis for achieving this.
• If not, develop a plan to manage the introduction of the increase for your business through contractual or administrative changes such as building the increase into planned pay rises.
• Consider any terms in an applicable industrial instrument that may affect your obligations regarding superannuation contributions.

If superannuation changes are causing your business concern, we are here to help.

May 27, 2021

On 20 May 2021, the Commonwealth, State and Territory Minsters responsible for work health and safety met to discuss a range of important issues impacting the work health and safety of Australians.

The discussion centred around review of the content and operation of the model WHS laws which was completed by Ms Marie Boland in late 2018 (Boland review).

The following key developments were identified by the Ministers in a communique released at the conclusion of the meeting.

Industrial manslaughter will not be incorporated into the model WHS laws

One of the key recommendations of the Boland review of the model WHS laws was the introduction of industrial manslaughter offences.

That recommendation fell one vote short of receiving the endorsement of Australian Ministers (with the jurisdictions that have enacted industrial manslaughter offences – being Victoria, the ACT, Queensland, Western Australia and the Northern Territory – voting in favour of the recommendation).

Category 1 offences to be expanded to cover gross negligence

The meeting of Ministers placed emphasis on a need to improve prosecution rates for Category 1 offences under the model WHS laws.

Category 1 offences are the most serious offences against the model WHS laws because they involve conduct that exposes a person to whom a duty is owed to a risk of death or serious injury or illness. Category 1 offences attract the most severe maximum penalties.

At present, to successfully prosecute a Category 1 offence (other than in NSW), a prosecutor must prove that the accused was reckless as to the risk of death or serious injury or illness.  Proving recklessness requires the prosecutor to show that a known or obvious risk was consciously disregarded by a defendant.

By contrast, proving criminal negligence does not usually require the prosecutor to establish risks were consciously disregarded. Instead, it requires proof of “such a great falling short of the standard of care which a reasonable [person] would have exercised and which involved such a high risk that death or grievous bodily harm would follow that the doing of the act merited criminal punishment”.

The Ministers unanimously agreed to introduce gross negligence as a fault element for Category 1 offences under the model WHS Act.

In NSW, gross negligence is sufficient to give rise to a Category 1 offence. However, that is not the case in the Northern Territory, Queensland, South Australia, the Australian Capital Territory, Tasmania or Western Australia. Accordingly, assuming that the agreement reached by the Ministers is implemented by Parliament in each of those jurisdictions, the threshold for being found guilty of the most serious category of WHS offences will be lowered significantly.

Psychological injury and amendments to model WHS regulations

A majority of Ministers agreed to amend the model WHS Regulations to deal with psychological injury.

Under the current model WHS Act, persons conducting a business or undertaking have a duty to protect workers from psychological hazards as well as physical hazards. This is due to ‘psychological health’ being including in the definition of ‘health’.

This announcement closely follows the Victorian Government announcing that it is developing regulations to provide “clearer guidance” to employers on their obligations relating to psychological risks and hazards.

All employers will need to monitor developments in this space closely to ensure that their safety management systems factor in, and promote compliance with, any new requirements introduced into WHS regulations.

Gig economy

Participants in the food delivery industry are already the subject of focus by safety regulators in certain Australian jurisdictions.

The Ministers’ communique notes that Safe Work Australia is developing national work health and safety guidance for the food delivery industry. Further, the Ministers agreed to refer work on:

• promoting and strengthening education to Safe Work Australia; and
• compliance and enforcement initiatives in relation to food delivery platforms and riders to the heads of workplace safety authorities for consideration.

Sexual harassment in the workplace

The Ministers have noted the Commonwealth Government’s response to the Respect@Work: National Inquiry into Sexual Harassment in Australian Workplaces conducted by the Australian Human Rights Commission.

State and Territory Ministers provided an update on their current or planned work and initiatives directed at addressing sexual harassment in their respective jurisdictions, and are required to formally respond to the Commonwealth by the end of June 2021.

Next steps

The Ministers agreed to reconvene before the end of the year to receive progress reports from each jurisdiction and Safe Work Australia on the implementation of the agreed recommendations.

May 25, 2021

What has happened?

A small business owner has been sentenced to eight months imprisonment (plus an additional 18 months suspended), a $2,250 fine and his company fined $605,000 in the first custodial sentence for a safety prosecution in WA history. This is also the highest fine ever issued in WA for a workplace safety breach.

The Director and the company pleaded guilty to gross negligence causing the death of one worker and serious injury to another.

The Director owned and operated a small shed building company. In March 2020, the two workers were installing roofing when strong winds caused a roof sheet to lift and both workers to fall approximately 9 metres. Neither worker held a high risk work licence or wore a safety harness.

Notably, these types of incidents were known in the industry (particularly in the Esperance region) and the Director was aware of the risks. Despite the Director’s early guilty plea and acceptance of responsibility, the Court considered the failures were of the most serious type.

This decision is the first time an individual has been jailed in WA under the existing safety legislation and is significant as it:

1. clarifies the misconception that industrial manslaughter is a new concept for WA when the possibility of a jail sentence for a serious breach of safety legislation has always been the reality;
2. is a clear indication that the safety regulators in WA will be willing to use new industrial manslaughter provisions to their full extent when the new WHS laws commence (in respect of officers and persons conducting businesses and undertakings); and
3. demonstrates Courts will issue penalties for safety breaches that are in line with the new, significantly higher, penalty regimes.

Considerations for employers

While safety is often considered a purely operational matter, this decision and outcome demonstrates that responsibility for safety exists at every level of an enterprise.

Employers and officers should be taking note of this decision and the attitude of the regulator in bringing a prosecution of this type against an individual, particularly in light of the impending Work Health and Safety Act 2020 (WHS Act) which places express obligations on officers in respect of safety and strengthens the framework for individual officer prosecutions.

Under the WHS Act, industrial manslaughter can result in individuals being liable for a maximum fine of $5,000,000 and/or up to 20 years imprisonment and corporations for a maximum fine of $10,000,000.

Due diligence provisions for officers require that they be familiar with the operational risks of the business, the systems to manage those risks and that they take steps to verify that the systems are in place and effective. A failure to take these steps may see officers liable for safety breaches, including where there has been a significant incident.

We recommend employers and individual officers actively review the safety arrangements currently in place and begin taking steps to ensure that they are ready for the introduction of the WHS Act.

May 19, 2021

What has happened?

The Federal Minister for Industrial Relations has issued the first exclusion sanction under the Code for the Tendering and Performance of Building Work 2016 (the Code) for a failure to comply with safety obligations.

MCP (Aus) Pty Ltd (MCP) has been banned from tendering for, or being awarded, Commonwealth funded building work for a period of 1 month.

Background

The 2016 Code requires every Code covered entity to comply with work health and safety laws to the extent that they apply to the entity in relation to building work.

A breach of that obligation is a breach of the Code.

Where a breach of the Code occurs, the Code covered entity must notify the ABCC of the breach, and the steps proposed to be taken to rectify the breach, no later than 2 working days after becoming aware of it. The entity then has a further 14 days to notify the ABCC of the steps taken to rectify the breach.

The ABC Commissioner must then decide whether to refer the breach to the Minister with recommendations as to whether a sanction should be imposed.

If a breach referred to the Minister results from a failure to comply with work health and safety laws, the Minister must impose an exclusion sanction on the Code covered entity unless the Minister is satisfied that it would not be appropriate in the circumstances because of the nature of, or factors contributing to, the failure to comply.

The maximum exclusion period that can be imposed under the Code is 12 months.

In the past, exclusion sanctions have been imposed on entities for breaches of industrial relations requirements of the 2016 Code (and its predecessors), such as the prohibition on displaying ‘no ticket, no start’ signs on worksites. However, until now, no exclusion sanction has been issued for a breach of work health and safety requirements.

 Exclusion sanction imposed on MCP

The Minister has excluded MCP from tendering for, and being awarded, Commonwealth funded building work for 1 month.

MCP breached the Code as a result of it having contravened the Work Health and Safety Act 2011 (Qld) (WHS Act) in relation to an incident on the Toowoomba Second Range Crossing road project in which a 60 metre boom on a concrete pump toppled over. No one was injured in the incident.

As a result of that incident, MCP was charged with an offence against section 32 of the WHS Act for breaching its primary duty of care under section 19 of the WHS Act. It pleaded guilty and was fined $50,000 and ordered to pay $1,600 in costs.  No conviction was recorded.

Consistent with an alert issued by the ABCC in 2018, in which the ABCC warned the building industry that it monitors court outcomes for proven contraventions of safety laws, the ABC Commissioner referred MCP’s admitted contraventions of the WHS Act to the Minister.

In its press release, the ABCC noted that: “MCP made full admissions before the Court, and fully cooperated with the ABCC, took positive steps to remediate its conduct and satisfy the regulator that it had provided a measure of voluntary rectification.”

Despite that, and the fact that no one was injured in the incident, the Minister did not view the imposition of an exclusion sanction as being inappropriate.

What does this mean?

Clients involved in construction works should be aware of the potential commercial implications and reputational damage that may result from any breach of statutory and contractual safety obligations.

The exclusion sanction imposed on MCP highlights:

• the potential commercial and reputational implications for Code covered entities who fall foul of work health and safety laws; and
• that voluntary rectification of the issues which give rise to breaches of work health and safety laws, and active co-operation with the ABCC, may not be sufficient to prevent an exclusion sanction being imposed.

It also serves as a reminder to all Code covered entities that any guilty plea, or finding of guilt made by a court, in a safety prosecution will need to be reported to the ABCC within 2 working days.

If you are in any doubt as to your obligations under the Code, including whether an event needs to be notified to the ABCC, please ensure that you seek legal advice as a matter of urgency.

Dominic Fleeton
Partner
+ 61 3 9958 9616
[email protected]

Liam Fraser
Partner
+ 61 7 3071 3113
[email protected]

John Makris
Partner
+ 61 2 9169 8407
[email protected]

May 3, 2021

What has happened?

Much has been written about the issue of sexual harassment over the last few months and while it may seem obvious that harassment presents a safety risk, that is not the way it has been traditionally treated.

Broader community movements are fuelling momentum for change in the legal and regulatory landscape surrounding workplace sexual harassment, especially within the realm of work health and safety (WHS).

Whilst Australia’s safety laws have always required employers to identify and control physical and psychological health risks in the workplace, sexual harassment is now clearly recognised as a systemic risk with industry, environmental and individual risk factors present in all workplaces.

Safe Work Australia recently released its first comprehensive WHS guidance on preventing workplace sexual harassment. Whilst regulator guidance material does not have the same legal status as legislation, it does contribute to the overall state of knowledge regarding hazards, risks and controls and may be tendered as evidence in prosecutions against companies and individual officers and workers.

Background

Under current WHS (and OHS) laws, employers have a positive duty to take reasonably practicable steps to eliminate or minimise risks to their workers’ health, including risks associated with workplace sexual harassment.

However, the Australian Human Rights Commission’s report on the National Inquiry into Sexual Harassment in Australian Workplaces (the Report) found that a lack of express WHS regulation, Codes of Practice or guidelines dealing with sexual harassment as a specific WHS issue has resulted in difficulties arising for victims and employers. The Report, adding to the growing demand for addressing this inconsistency (see the recommendation made by the Boland Review in 2019), recommended, amongst other things, that guidelines on addressing the risk of sexual harassment in the workplace be developed with a view of informing the development of a Code of Practice.

Safe Work Australia’s Guideline

In January 2021 Safe Work Australia, acting on the Report’s recommendation, published national guidance material on preventing workplace sexual harassment (Guidance Material). The Guidance Material advocates for a more proactive role of employers in identifying, assessing and eliminating or minimising the risk of workplace sexual harassment occurring. Whilst all workplaces should review the entire Guideline Material, some of the key parts of it are below.

Identifying sexual harassment

The Guidance Material defines sexual harassment as any unwelcome sexual advance, unwelcome request for sexual favours or other unwelcome conduct of a sexual nature, in circumstances in which a reasonable person, having regard to all the circumstances, would anticipate the possibility that the person harassed would be offended, humiliated, or intimidated. This adopts the current legal definition from the Sex Discrimination Act.

It provides a list of factors of which employers should be aware that increase the potential for sexual harassment to occur in their workplace.

Those factors include:

The Guidance Material also provides a list of proactive measures that may help employers identify whether sexual harassment is occurring in the workplace.

Some of those include:

Sexual harassment poses risks of both physical and psychological harm for workers. This means that control measures must be put in place to either eliminate or minimise the risk of it occurring, as far as it is reasonably practicable to do so. In the event of a complaint of sexual harassment to a safety regulator, employers should be prepared to be able to explain how they have, and are, proactively addressing the risk of sexual harassment in their workplace. Failing this, the employer will no doubt be the subject of statutory notice(s) (e.g. an improvement notice), and/or find itself the subject of a regulatory investigation and possible prosecution under either WHS or mainstream criminal laws.

The Guidance Material advocates a proactive approach to managing the risk of sexual harassment by:

These measures are in large part the same as the measures that should be adopted to manage exposure to risk under discrimination law. This means that if these measures are effectively implemented and managed employers will also be taking reasonable steps to comply with obligations under other laws.

Safe work systems and procedures

Every workplace should have health and safety management systems in place to keep workers safe. The Guidance Material suggests that policies and procedures should form part of your safety management system and be part of an overall sexual harassment preventative strategy. In particular, the system should:

What should employers be doing now?

All workplaces should be taking proactive steps to assess whether their safety management system is adequate to identify and address sexual harassment risks in the workplace. It is highly likely that these measures are addressed in workplace policies already, however not referenced as part of the safety management plan or systems.

This means employers should take steps to:

April 12, 2021

What are the proposed changes and what do they mean for employers?

Last Thursday, 8 April 2021, the Federal Government announced its response to the Respect@Work Report.  The Respect@Work Report was released as a result of the National Inquiry into Sexual Harassment in Australian Workplaces 2020, an inquiry led by Sex Discrimination Commissioner Kate Jenkins.

The Report made 55 recommendations, directed at reducing workplace sexual harassment and creating safer, more respectful and productive Australian workplaces. Amongst these 55 recommendations were proposed amendments to the Fair Work Act 2009 (Cth), Sex Discrimination Act 1984 (Cth), Workplace Gender Equality Act 2012 (Cth) and the Australian Human Rights Commission Act 1986 (Cth).

In its reply, titled “A Roadmap for Respect”, the Government has responded to the report’s 55 recommendations.

What are the key proposed legislative changes?

Of the 15 legislative changes recommended by Kate Jenkins, only 7 have been agreed to in full by the Government.

The recommendations that were agreed to in full, or in part, are as follows:

What about the “positive duty” for employers?

The Government did not adopt the Report’s recommendation that a ‘positive duty’ be placed on employers with respect to preventing sexual harassment in the workplace under the Sex Discrimination Act.  Instead, the Government noted that they consider this duty already exists under WHS laws.

The absence of a positive duty for employers at the Federal level does not mean that employers do not hold positive duties under State sexual harassment laws (such as in Victoria under the Equal Opportunity Act 2010) and does not otherwise mean employers don’t have responsibilities to address sexual harassment.

Even in the absence of a positive duty to prevent sexual harassment in the workplace, employers face liability under the Sex Discrimination Act for sexual harassment that occurs unless it is established that the employer took all reasonable steps to prevent the sexual harassment.

To avoid liability, employers have a responsibility to:

• have an up-to-date sexual harassment policy;
• regularly train employees in relation to sexual harassment;
• have in place clear procedures and processes regarding grievance resolution and investigations;
• properly investigate sexual harassment complaints; and
• implement an appropriate disciplinary process for substantiated complaints.

Out the door for sexual harassers?

Much has been made of proposed Fair Work Act changes that will provide employers with a more explicit basis to summarily dismiss employees who have engaged in sexual harassment.

Sexual harassment has, however, always constituted a valid reason for employers to terminate employment, and in serious cases is already capable of constituting serious misconduct.  At its highest, the explicit inclusion of sexual harassment in the statutory definition of serious misconduct may embolden employers to consider termination of employment as an appropriate sanction, or else to more confidently summarily dismiss an employee where sexual harassment has occurred.  The amendment will not, however, substantively alter an employer’s existing rights in responding to sexual harassment.

Particularly in the case of employees eligible to access the unfair dismissal system, a procedurally fair process must still be followed before making a decision to terminate employment in cases of sexual harassment – nothing in the recommendation will permit a “shoot first and ask questions later” approach.

Alternative avenues?

Another significant recommendation is that of extending the existing regime of the Fair Work Commission anti-bullying orders to cover sexual harassment.

This will allow employees an avenue to raise complaints about sexual harassment quickly, but also means that employers must be sure to have their internal policies and procedures up-to-date and implemented correctly, as these processes will be examined by the Fair Work Commission during the process.

At the time that the Fair Work Commission anti-bullying regime was first established, initial concerns about a flood of anti-bullying applications proved to be a mere trickle.  This was to some significant degree seen to be a reflection of the absence of powers by the Fair Work Commission to make monetary awards to applicants.

Given the preponderance of forums in which sexual harassment claims may be pressed, questions may be raised as to whether there will be significant uptake of the Fair Work Commission’s powers to make anti-sexual harassment orders by victims who are already reluctant to engage in existing enforcement systems.

So, what should employers be doing?

Having regard to all of the above, some questions might be raised as to how impactful the proposed changes will be.

In our vast experience, the best approach to addressing sexual harassment in the workplace is, of course, prevention.

In addition to setting strong policies and procedures, the implementation of bystander intervention training is increasingly recognised as a very important and effective tool for identifying and addressing emerging behaviours before they evolve into sexual harassment.

Supplemented by early intervention tools, such as the utilisation of a workplace ombud service such as Ombpoint to equip and empower victims of sexual harassment to respond to unwelcome behaviour, bystander intervention training operates to effectively prevent the escalation of inappropriate behaviour in the workplace.

Should you require assistance reviewing, updating or creating a new sexual harassment policy and procedure for your organisation, exploring training opportunities or should you just want to discuss the proposed changes in general, please reach out to us.

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

Kathleen Weston
Lawyer
+61 2 9169 8415
[email protected]

March 19, 2021

On 9 December 2020, the Federal Government introduced a package of reforms that it said were designed to give businesses the confidence to get back to growing jobs, as well as delivering the tools to help employers and employees to work together in a post-COVID Australia.

However, what has returned from the Senate after tortuous rounds of discussions, committee deliberations and, ultimately, significant concessions is a reform package now centred only on addressing casual employment.

While the issues relating to casual employment, particularly in light of the decisions such as WorkPac Pty Ltd v Rossato [2020] FCAFC 84, is an area where legislative action are important, an opportunity to make a sclerotic system less so, is lost.

The Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Bill 2021, came out of extensive consultation with employer and employee groups trying to find innovative solutions to support struggling businesses, and protect and enhance the rights of workers. It focused on 5 key areas of reform:

• Award simplification
• Greenfields agreements
• Casual employment
• Enterprise agreements
• Compliance and enforcement

Of these 5 cylinders, the Omnibus has arrived at its final destination with only one cylinder operating, only marginally better than a hand powered jalopy, and that cylinder is casual employment clarification.

So, what is on the horizon for employers looking for clarity around their obligations in respect of casual employees?

Finally, a statutory definition of a casual employee

First the Bill will introduce a definition of casual employee. This is designed to confirm that a casual employee is a person to whom an offer has been made and no firm advance commitment to continuing and indefinite work according to an agreed pattern of work for the person.

Provided the offer of employment is accepted on this basis and employment commences because of this acceptance, the person will be a casual employee without regard to subsequent conduct.

Endless possibilities become clear guidance

In terms of understanding whether no firm advancement commitment exists, the Bill provides a finite number of considerations to look at:

• Whether the employer can elect to offer work and whether the person can elect to accept or reject work;
• Whether the person will work only as required;
• Whether the employment is described as casual employment;
• Whether a casual loading applies.

Future conduct cannot unpick the original agreement

The Bill also clarifies that only conduct at the time of offering and accepting casual employment is relevant to characterising the arrangement as “casual”. This is important because it removes a key consideration of the Court in Rossato when it rejected the notion that Mr Rossato was a casual employee.

Common sense prevails on regular hours

The Bill makes clear that regularity in work scheduling is only one factor to be considered. It is not determinative on its own.

Legislative set off puts an end to double dipping

Finally, and if despite all best efforts, a casual employee is found by a Court to not be a true casual, then there is scope under the Bill to allow casual loadings to be legislatively set off against certain entitlements which would otherwise be owed to a permanent employee performing the same work. This ensures that payments of casual loadings are not merely “windfalls” to wrongly characterised employees.

Casual conversion becomes a statutory entitlement

Aside from these clarifying provisions, the Bill installs rules around employer offers to casual employees to be offered permanent part-time or full time employment and provides for residual rights for employees to request to convert to being permanent employees. These amendments, at a practical level, give legislative force to the existing regime of casual conversion set out in Modern Awards. The only difference is that the right to conversion will now be a national employment standard (and is enforceable as such) as opposed to being a right provided by way of legislative instrument.

When all is said and done a key reform has been delivered by the Omnibus with all the other reforms left waiting, maybe forever, at the bus stop.

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

James Parkinson
Senior Associate
+61 8 6381 7053
[email protected]

March 11, 2021

Employers are deeply concerned – and confused – about COVID-19 vaccinations in their workplaces following the release of guidance material by the Fair Work Ombudsman (FWO) and Safe Work Australia (SWA).

The FWO said that in the current circumstances the “overwhelming majority” of employers should assume they won’t be able to require their employees to be vaccinated against COVID-19 from an employment law perspective. But it also said that employers can direct their employees to be vaccinated if the direction is lawful and reasonable.

SWA said that its guidance material will assist employers to assess whether a COVID -19 vaccine is a “reasonably practicable” control measure to manage the risks of COVID-19 in the workplace, but that most employers will not need to make vaccination mandatory to comply with the model WHS laws.

Could the messaging be more mixed and the position for employers less clear, especially as the guidance material from these Federal Government agencies is as interesting for what it does not address as much as what it does.

What about a whole range of vulnerabilities beyond aged care and health care such as RSLs, food production businesses, and workplaces with close living quarters such as mine sites and supermarkets?

These workplaces would seem to be good candidates for a mandatory COVID-19 vaccination policy. Instead, it seems that these agencies are only keen to give clear guidance to those workplaces in the most obvious of industries.”

Although vaccinations are just one of a number of COVID-safe measures (such as hand washing, masks, social distancing, QR codes, etc), it is not right to dismiss a key component in the fight against COVID-19 – vaccinations – that have been held out to be the missing link after more than a year of research and development and untold billions of dollars spent globally.

If we rely on the underlying assumption that workplaces mandating vaccinations is not necessary because there is sufficient out-of-work incentive to get vaccinated then we are set up to fail. How many would bother with the flu vaccination if our workplaces did not make them available?

SWA says there are no laws or public health orders in Australia that specifically enable employers to require their employees to be vaccinated against COVID-19. But what about the common law?

The battle will be played out in the space between what constitutes a reasonable direction and a reasonable refusal. Policy makers are not necessarily to blame. We all need to remember that the word ‘pandemic’ is not used lightly and that this is a once in a 100-year event.

Michael Stutley
Partner
+61 08 6381 7060
[email protected]

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

March 3, 2021

On 17 February, Tim Pallas, Victoria’s minister for industrial relations, introduced the Industrial Relations Legislation Amendment Bill 2021.

Pallas says that the Bill will “have no adverse effect on the rights of employers, worker or the community as a whole” but a number of the amendments will enhance individual rights.

The Bill proposes amendments to a number of Victorian Acts, including the:

• Equal Opportunity Act 2010
• Inquiries Act 2014
• Labour Hire Licensing Act 2018, and
• Long Service Leave Act 2018

Some of the proposed amendments seek to implement recommendations made by the Victorian Inquiry into Labour Hire and Insecure Work. That inquiry was set up in 2015 to investigate the practices of labour hire companies, insecure work, sham contracting, and the abuse of visas to avoid workplace laws.

Some of the key recommendations contained in the final report of the Inquiry were to:

• set up a licensing scheme to regulate labour hire operators
• develop a voluntary code of conduct for the labour hire industry
• advocate for a national licensing scheme for labour hire operators, and
• use Government procurement to promote secure work practices and ethical employment.

There has been, and it appears that there will continue to be, an increasing focus on improving the rights and entitlements of contract and gig workers.

In recent times, on-demand workers have been in the limelight regarding whether they should secure “employee status”. A UK Supreme Court ruled that on-demand drivers working for Uber in 2016 were employees which has sparked talks that the decision may impact the Australian courts views on whether on-demand drivers are employees.

Whilst workplace laws are primarily made at a Federal level, the Bill introduced in Victoria shows that the Victorian government is pushing for reform at the state level.

The effect of the proposed amendments

The effect of the amendments will be to give contract workers a suite of additional rights and entitlements under Victorian industrial relations legislation, including:

1. Protection from discrimination on the basis of employment activity (for example, contract workers making a reasonable request for information regarding their employment entitlements) under the Equal Opportunity Act 2010. This means that contract workers will be afforded the same protection as directly engaged workers.
2. Principals being required to make reasonable adjustments to the workplace for a contract worker with a disability under the Equal Opportunity Act 2010. This will extend the entitlement which already applies to directly engaged workers.
3. Protection against detrimental action (including dismissal) under the Inquiries Act 2014 if the contract worker gives information to a Royal Commission, Board of Inquiry or a Formal Review.

A contract worker is defined in the Equal Opportunity Act as a person who does work for a principal under a contract between the worker’s employer and the principal.

For the purposes of the Inquiries Act, a contract worker is a person who does work for the business or other undertaking under a contract between the worker’s employer and the person who conducts the business or other undertaking, or, a person who does work for the business or other undertaking for fee or reward on the person’s own account (other than a person who conducts the business or other undertaking).

The Bill also proposes a number of other changes, including:

• A tiered system in the Labour Hire Licensing Act 2018 for businesses applying for a labour hire licence for the purposes of determining the applicable licence fee. This means that businesses, at the time of making an application, will be required to provide details of the estimated turnover of the business for the 4 quarters immediately before the date of the application.
• Giving the Labour Hire Licensing Authority the power, in special circumstances, to waive and refund fees (in whole or in part).
• Repealing the provisions in the Long Service Leave Act 2018 which deal with the offence of an employer not keeping long service leave records in the approved form.
• Clarifying that the offence relating to non-payment of long service entitlements is a continuing offence.
• Extending the prohibition from using common law contracts to annul, vary or exclude provisions of the Long Service Leave Act 2018 to deeds of settlement.
• Transferring various powers previously exercised by the Secretary to the Wage Inspectorate Victoria which will be established as a statutory authority under the Wage Theft Act 2020 from 1 July 2021.

The transfer of powers to the Wage Inspectorate demonstrates a shift in attitude around enforcement. The body will enforce Victorian laws dealing with child employment, long service leave and independent contractors in the transport and forestry sectors.

Businesses should expect to see a more proactive approach taken by the Wage Inspectorate which has been specifically established to investigate and enforce non-compliance with laws, as compared to the approach previously taken by the Department.

We expect the proposed legislative amendments to pass, and if so, will be due to commence on 1 July 2021.

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

Sevasti Xanthos
Lawyer
+61 3 9958 9609
[email protected]