Brief update on key developments… - Kingston Reid

Brief update on key developments…

Since our last edition of Kingston Reidable in November 2023, several significant legal developments have taken place (even during the traditionally quiet new year period in January!).

Here we outline two key developments to keep a watch on over the coming weeks as we head into another year of significant workplace reforms.

Closing Loopholes (Part 2)

Unless you’ve been on a solo pilgrimage in some far-flung region of the world for the last few months (and if so, lucky you!), you will be well aware that Government introduced the Fair Work Legislation Amendment (Closing Loopholes) Bill 2023 in September 2023, which included a raft of proposed changes to the Fair Work Act 2009 (Cth) (FW Act), intended to implement the majority of the Government’s remaining election commitments, together with the outcomes of the Jobs and Skills Summit held in September 2022.

After several months of intense debate over some of the Bill’s more contentious proposals, the Government split the Bill on 7 December 2023 and passed the Fair Work Legislation Amendment (Closing Loopholes) Act 2023 (CL Act), which included significant labour hire reforms, expanded union delegate rights and the introduction of a federal wage (and superannuation) theft offence, amongst others (check out our previous commentary here).

As we’ve indicated in our previous coverage of the CL Act, the first few months of 2024 will continue to present as a period for further change, as those aspects of the Bill which were not passed in December 2023 come back up for debate and resolution in Parliament, including:

  • changes to the existing definition of casual employment(as well as the casual conversion provisions to allow for employee-initiated conversion);
  • introducing a new ‘ordinary’ meaning of ‘employee’ and ‘employer’ (to return to the ‘multi-factorial test’ and overcome the effect of two decisions of the High Court from 2022[1], in which the High Court held that where a comprehensive written contract exists, the characterisation of the relationship between the parties should be determined by reference to the terms of the contract);
  • increased protections for ‘employee like’ workers – including, for example, the setting of minimum standards for ‘employee-like workers’, such as workers in the gig economy and road transport industry, where those workers have lower bargaining power;
  • changes to the defence to ‘sham contracting’ (misrepresenting an employment relationship as one of independent contracting) from a test of recklessness to reasonableness (liability will not arise if at the time of the misrepresentation, the employer reasonably believed the contract of employment was instead one for services);
  • amended right of entry provisions to allow registered organisations to obtain an exemption certificate from the FWC to investigate underpayment of wages or other monetary entitlements;
  • changes to bargaining and the multi-employer bargaining framework, including changes to to intractable bargaining workplace determinations;
  • expansion of new workplace delegates rights to regulated workers; and
  • increases to the maximum civil penalties that can be ordered for standard (and serious contraventions) of the civil remedy provisions in the FW Act,

 amongst others.

Just last week, the Senate Committee inquiring into the Bill tabled its report, which (given the splitting of the Bill), was confined to those proposals not passed as part of the CL Act in December 2023. The Committee received 178 submissions and conducted 7 public hearings, at which just shy of 200 witnesses gave evidence as part of the inquiry. Subject to some amendments, the Committee has recommended that the Bill be passed.

A “right to disconnect”?

In addition, the Government has signalled its intention to consider including provisions creating a ‘right to disconnect’, in order to secure Greens’ support for the Bill. It is presently unclear whether these anticipated provisions will appear in a similar form to the Fair Work Amendment (Right to Disconnect) Bill 2023 (Cth) tabled by the Greens back in March 2023.

In relation to the proposed ‘right to disconnect’, it’s also worth noting that this is also being considered by the Fair Work Commission as part of its 2023/24 Modern Award Review, currently underway.

At the request by Minister Burke (Minister for Employment and Workplace Relations) in September 2023, the FWC is presently reviewing modern awards in relation to four key areas, including awards that cover workers in the arts and culture sector, job security, work and care and also, making awards easier to use.

In the “work and care” stream of this review, a discussion paper prepared by FWC staff and released last week on 29 January 2024 considers the right to disconnect in the context of modern award terms, inviting comment on the question as to whether there are any changes (to modern awards) needed in respect of a right to disconnect, which are necessary to ensure modern awards continue to meet the modern awards objective. Submissions are due by 11 March 2024.

Stay tuned for our further commentary on the passage of the Bill (and the various reforms contained within it) over the coming weeks.

Costs in Anti-Discrimination matters

In November 2023, the Australian Human Rights Commission (Costs Protection) Bill 2023 (the Bill) was introduced into federal Parliament.

One might be tempted to think that a proposed law related only to legal costs is not much of an issue and really only important to lawyers. But think again. The way that legal costs can (or cannot) be awarded in matters – particularly those involving employees – is a very important issue which drives behaviour and indeed the level and type of claims made.

Prior to the Bill, the position was that discrimination claims (including sexual harassment claims brought under the Sex Discrimination Act) were subject to the usual orders as to legal costs. That is, if you win you get your costs paid, if you lose you pay the other side’s costs. This is very different to claims brought under the FW Act including claims in respect of the expanded sexual harassment provisions introduced last year, which are (except in very limited circumstances) free from costs orders. That is, everyone needs to pay their own costs, regardless of outcome.

One of the recommendations of the Respect@Work Report was that discrimination matters which go to the Court following the Australian Human Rights Commission (AHRC) process should have the same costs regime as the FW Act – that is, everyone pays their own way. This recommendation was based on a conclusion that the threat of paying the prohibitive costs of the other side stopped employees from bringing discrimination claims in the Court. This would make these claims consistent with treatment of general protections and sexual harassment claims that arise from the Fair Work Act.

Instead of adopting this recommendation, the Government has instead taken a different approach, proposing through the Bill to implement what they have called an “equal access” costs approach, meaning that while employees can apply to have their costs paid by the employer if they win, an employee will never be required to pay the costs of the employer if they lose.

While this may be called an “equal access” approach, the impact is anything but equal.

There are a number of potential impacts of this proposed change, including that it is unfair for employers which are not well resourced, it encourages unmeritorious claims and significantly impacts settlement discussions.

What does this mean for employers?

If the Bill passes, the impact of this change will, in our view, be twofold:

  • it’s going to encourage claims which otherwise would not have been made; and
  • secondly, it also will dramatically impact early settlement discussions as the employer will know that even if the case against them has no merit at all, there is a commercial benefit in financial settlement.

Traditionally, fewer cases have been brought by employees through the AHRC, as opposed to the State Tribunals and the Fair Work Commission. This Bill – if passed – looks likely to change that statistic.

Note: The Australian Human Rights Commission Amendment (Costs Protection) Bill 2023 (Cth) was referred to the Senate Legal and Constitutional Affairs Legislation Committee on 30 November 2023. The Senate Committee’s report is due on 9 February 2024.

[1] CFMMEU v Personnel Contracting Pty Ltd [2022] HCA 1 and ZG Operations Australia Pty Ltd v Jamsek [2022] HCA 2

 

Alice DeBoos
Managing Partner
+61 2 9169 8444
[email protected]
Jane Silcock
Executive Counsel – Knowledge
+61 2 9169 8419
[email protected]