Practice Area Articles
January 16, 2023
Cilla Robinson, Nicole Flax and Sophie Orton
Back to International Employment Law
KEY DEVELOPMENTS FOR 2023
Gender equality, sexual harassment and discrimination
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (“Bill”), which has recently passed parliament, includes amendments directed at addressing gender pay inequity, sexual harassment and discrimination. Importantly, the Bill effects the establishment of an Expert Panel within the Fair Work Commission (“FWC”) to decide pay equity cases, and that the Commission must consider historic undervaluing of work due to gender-based assumptions when deciding remuneration disputes. The Bill also provides that pay secrecy provisions in employment contracts will have no effect. The Bill seeks to implement, among other things, an express prohibition against workplace sexual harassment extending to all ‘workers’ (including, for example, contractors and trainees), and make available the FWC’s current Stop Sexual Harassment Orders to prospective workers and third parties. The Bill also seeks to grant the FWC expanded dispute resolution powers for sexual harassment matters. Regarding strengthened anti-discrimination measures, the Bill updates the attributes protected under the Fair Work Act 2009 (Cth) (“FW Act”) by including protection from discrimination on the basis of breastfeeding, gender identity and intersex status.
The Bill complements the recently passed Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Act 2022 (Cth). This new legislation introduces an express prohibition against subjecting a person to hostile work environments on the basis of sex into the Sex Discrimination Act 1984 (Cth), alongside a positive duty on employers to eliminate unlawful sex discrimination. The overall impact of the Bill’s gender equality provisions will be to open up further dispute resolution pathways and remedies for a greater number of workers and prospective workers who are aggrieved by these issues. Individuals with sexual harassment or discrimination claims may now pursue action through the FWC, Australian Human Rights Commission, or state and territory mechanisms.
To prepare for the anticipated commencement of these provisions, Australian employers should review internal policies, procedures and training materials relating to remuneration, sexual harassment and discrimination. Contracts should no longer include any terms requiring pay secrecy. Anti-discrimination policies should be updated to prohibit negative treatment on the basis of breastfeeding, gender identity or intersex status and should apply to a broad spectrum of workers, proposed workers and other parties. In particular, from a sexual harassment standpoint, employers in Australia should take note that the new positive duty against workplace sexual harassment applies to a broad spectrum of ‘workers’, and they may be held vicariously liable for the actions of their employees and agents.
One of the biggest policy shifts in the Bill is the change to the enterprise agreement bargaining framework. The framework for enterprise agreement bargaining, approval, termination of the agreement and disputes about the agreement’s terms is governed by the FW Act. As part of the policy drive to encourage bargaining, and increase wage growth, the Bill reduces barriers to multi-employer bargaining and expands the FWC’s powers to resolve bargaining disputes, up to and including by arbitration.
The Bill does not introduce new streams of multi-employer bargaining, but reduces barriers to access the existing multi-employer bargaining streams. As the Bill was passed on 2 December 2022 most changes will come into effect immediately, or at the end of a six-month transition period. Overall, the introduction of this Bill is a reminder that businesses must prepare a comprehensive strategy before bargaining.
Concerns have been raised that, under the proposed amendment, competing employers within the same industry could be compelled to engage in multi-employer bargaining if their employees vote for it. As such, many employers could essentially be forced to the negotiating table. The proposed amendments would also likely empower trade unions to rope employers into good faith multi-employer bargaining.
If your business has an enterprise agreement which has passed its nominal expiry date, you should carefully consider if it would be worth negotiating a replacement agreement before the significant changes to bargaining commence in 2023. All employers with expired enterprise agreements should be considering their industrial strategy now.
Limitations on length of fixed-term contracts
The COVID-19 pandemic highlighted the risks of insecure work in Australia. With a view to promoting secure, long-term work, the new laws introduce key changes to fixed term employment, as employment arrangements of this type have increased by 50% since 1998. The new laws limit the use of fixed term contracts for the same role beyond two years or two consecutive contracts, whichever is shorter, including renewal. Certain exceptions do apply, including fixed term contacts for a distinct and identifiable task involving specialised skills, training arrangements, undertaking essential work during peak demand periods, and employees who earn above the high income threshold when the contract is entered into (currently $162,000 per annum). A modern award may also contain a term that would allow an employer to enter into a fixed term contract with an employee where that fixed term contract would otherwise be prohibited.
If a business is found to have contravened the proposed fixed term employment contract provisions, civil penalties will apply. Of note is that, in the case of a contravention, the term of the contract that provides for its expiry on a set date will be of no effect, but otherwise the contract will be valid. As a result, the employer would be liable to provide adequate notice and any applicable redundancy pay if they wish to terminate the contract. Additionally, the employee would have access to the unfair dismissal jurisdiction. In any civil penalty proceeding, the onus is on the employer to prove that the fixed term contract fits within one of the lawful exceptions.
Employers in Australia should take immediate action to review existing contract roles within their workforce to ensure compliance with the proposed provisions. The new laws will capture current employees on fixed term contracts if an employer seeks to renew their contract after the introduction of the legislation. In the case of a dispute, employees will be able to access the jurisdictions of both small claims in eligible courts and FWC for a resolution.
Hiring policies and employment contract templates for use for incoming employees should also be reviewed to ensure that they are complaint. Further, new fixed term contractors must be provided a Fixed Term Contract Information Statement (which is to be published by the Fair Work Ombudsman) by their employer at the commencement of their contract.
KEY DEVELOPMENTS FOR 2022
Scrutiny on sexual harassment
Scrutiny on sexual harassment in Australian workplaces has continued to amplify, driven by the rise of the #metoo and #timesup movements. The Sex Discrimination and Fair Work (Respect at Work) Amendment Act 2021 was enacted in September 2021, amending laws which currently exist under the Sex Discrimination Act 1984 (Cth) ("Sex Discrimination Act"), the Fair Work Act 2009 (Cth) ("Fair Work Act") and the Australian Human Rights Commission Act 1986 (Cth) as they relate to sexual harassment. These amendments had the purpose of enhancing legal protections and minimising any confusion or uncertainty around the interaction of existing legislation. The changes came to fruition following the adoption of six key recommendations (out of the 55 recommendations) made by the Australian Human Rights Commission's 'Respect@Work Report', released in 2020 following its National Inquiry into Sexual Harassment in Australian Workplaces.
Ripple effects following the Respect@Work Report and legislative amendments champion a renewed approach for Government, employers and the community to combat the issue by better preventing and responding to sexual harassment in the workplace. Key changes of note include extending the scope and application of protections under the Sex Discrimination Act, making sex-based harassment an express form of unlawful conduct, introducing ancillary / accessorial liability provisions, establishing a provision rendering victimisation a civil action for unlawful discrimination and extending the timeframe for complaints in the Australian Human Rights Commission. To date, the Australian Government has not introduced a key recommendation of the Respect@Work report to implement a ‘positive duty’ on employers to take reasonable and proportionate steps to eliminate sexual harassment and sex discrimination in the workplace, which the Government maintains already exists in workplace health and safety laws. The new expanded jurisdiction of the Fair Work Commission, to issue orders to stop sexual harassment in the workplace, was activated on 11 November 2021 and we anticipate it being a focus for 2022 as the landscape surrounding sexual harassment in the workplace continues to evolve in Australia.
Australian Employers should therefore refresh their current sexual harassment policies and procedures to ensure compliance with the new legislative changes. Organisations should also have regard to the key themes arising from the Respect@Work Report, such as their approach to transparency, and use of confidentiality agreements, in sexual harassment matters. Businesses also need to consider enhanced forms of training, particularly with respect to bystander training, and viewing sexual harassment from a workplace health and safety lens to manage the psychological and physical risks associated with sexual harassment.
In addition, employers should consider the strong message sent by the legislative changes (and the weight of public opinion) that workplace sexual harassment and discrimination is unlawful and should not be tolerated. As a result, businesses, including their boards, need to take primary responsibility and accountability for ensuring that there are governance frameworks in place to appropriately prevent and respond to workplace sexual harassment. This is all the more important following the release of the 'Equality Across the Board' report by the Australian Human Rights Commission and Australian Council of Superannuation Investors limited in 2021 on the collection and reporting of workplace data relevant to sexual harassment by ASX200 companies, as investors may also be more likely to seek further information on companies' systems and processes to prevent and address sexual harassment in their workplaces.
Labour supply issues, mandated COVID-19 vaccinations and related data protection issues
The COVID-19 pandemic has given rise to novel legal issues for employers:
Australian states and territories have introduced public health orders mandating COVID-19 vaccinations for certain workers (for example, based on industry or local government area) and in some cases imposing obligations on employers to ensure their workers are vaccinated. Some employers are also mandating that their workers are vaccinated in order to enter the workplace in the absence of an applicable public health order, on the basis of their duties under work, health and safety legislation. Employers can require their employees to be vaccinated if the direction is lawful and reasonable, which requires a case-by-case assessment for each organization and will be supported where there is a public health requiring vaccination and/or where a company has implemented a policy around vaccination based on health advice and a risk assessment of the workplace.
Vaccine mandates imposed by employers that are not considered lawful and reasonable risk litigious consequences and overhaul. Where employers do not complete a risk assessment, consult with their employees regarding vaccination policies and consider whether public health orders apply to their workforce, courts may find that the vaccination mandate is neither lawful nor reasonable. In the recent case of CFMMEU & Matthew Howard v Mt Arthur Coal Pty Ltd T/A Mt Arthur Coal  FWCFB 6059 ('BHP case'), BHP's COVID-19 vaccination mandate was overturned, with the Fair Work Commission finding that the direction was lawful but not reasonable because BHP had failed to comply with its consultation obligations under the Work Health and Safety Act 2011 regarding its proposed vaccination policy. Vaccination mandates, whether state-based or via employers, are expected to be further challenged in the court system and we anticipate some clarity on these legal issues to be provided by the courts over the coming months.
With new public health orders being released regularly (in some cases, on a monthly or even weekly basis), employers should ensure they keep up to date with any mandatory vaccination requirements in the states and territories in which they operate, noting that the regulatory landscape differs between jurisdictions in Australia.
While in some cases employers may be able to mandate COVID-19 vaccinations in the absence of an applicable public health order, employers should generally exercise caution due to the legal complexities involved in making vaccinations mandatory (of which privacy obligations are only one example). In line with the Commission's decision in the BHP case, employers should take seriously their legal obligation under various WHS legislation to engage in a genuine consultation process with employees prior to mandating vaccinations. The Fair Work Ombudsman has recently published guidance on determining the 'reasonableness' of an employer's vaccination mandate that is useful for businesses considering vaccine directions. We recommend employers wishing to mandate the vaccination seek legal advice and assistance to ensure they have appropriate documents in place such as a COVID-19 Policy, a risk assessment and a COVID-19 Safe Plan.
Mandatory vaccination for employees must be balanced against an employer's obligations under the Privacy Act 1988 (Cth) ("Privacy Act"), under which an employee's vaccination status is considered 'sensitive information' which can only be collected with the consent of the individual concerned and where the information is reasonably necessary for one or more of the employer's functions or activities, unless (relevantly) the collection of the information is required or authorised by law.
Where employers seek to collect health information that can be linked to individual employees, and the collection of this information is not authorised by law, employers will need to ensure that the collection of the information is in accordance with the Privacy Act. Information which may be protected under the Privacy Act as 'sensitive information' may include for example, vaccination status information, information or documents related to medical contraindications, or even leave requests relating to an upcoming or recent vaccination appointment. Determining how to respond to employees who refuse to provide their vaccination status can be complex and involves careful consideration of an employer's obligations under the Privacy Act, work, health and safety legislation, and any public health order.
Employers will also need to be prepared to demonstrate that collection of the information is reasonably necessary for one or more of their functions or activities. For example, the information cannot be collected 'just in case' or where their functions or activities can be facilitated without the collection of such information.
The COVID-19 pandemic has also impacted labour supply, with COVID-19 outbreaks causing workforce shortages across most industries due to isolation requirements for close contacts, international and state border closures and illness from contracting the virus. This has given rise to a 'War on Talent'. Insufficient workforce supply has also caused some employers, particularly within healthcare and food production and logistics, to lobby the Government for shorter isolation periods for close contacts and those who contract COVID-19 to enable them to return to work more quickly.
Businesses must also be aware of the current public health orders and return-to-work guidelines when requesting employees commence or recommence work after being a close contact or contracting Covid-19. Employers should embrace hybrid working models or roster models that help ensure the entire workforce is not unwell at the same time. Employers should ensure they understand their workers' compensation requirements and requirements to report COVID-19 cases to the relevant state health authority.
Increasing casualisation of workforce
The increasing casualisation of the Australian workforce, along with legislative reforms to the Fair Work Act in 2021, have brought significant industrial reform for new and existing casual workers. The Federal Government introduced the Fair Work Amendment (Supporting Australia’s Jobs and Economic Recovery) Act 2021. The reforms are a significant development for casual employment in Australia as they introduce:
- a definition for casual employees into the Fair Work Act for the purpose of entitlements in the National Employment Standards;
- a protection for employers from double dipping claims by casual employees who claim they were misclassified and are entitled to permanent employment entitlements;
- a requirement for employers to give each casual employee a copy of the new Casual Employment Information Statement; and
- an express obligation for employers to offer eligible casuals conversion to permanent employment, while also allowing eligible casual employees to make requests to convert to permanent employment.
The new definition of casual means that the determination of whether a person is a causal employee or not will occur at the point of offer and acceptance of employment. The statutory definition and common law approach to casual workers is now aligned following the High Court’s decision of WorkPac v Rossato & Ors  HCA, which confirmed that the characterisation of an employee as a “casual” is to be determined with reference to the terms of the employment contract in place between the parties.
Our recommended steps for employers include:
- Introduce new clauses to casual contracts that reflect the recent amendments, including:
- checking there is a clause that separately identifies the casual loading amount (e.g. 25%); and
- updating any clause that outlines what permanent entitlements are included in the casual loading amount to include the full list now outlined in the legislation.
- Consider additional contractual clauses that enable the company to recover any casual loading paid to a casual as a debt if their employment is found to be permanent (as a safety net while this legislation is new and being tested);
- Ensure that casual contracts do not have a clause stating that casual loading entitlements are paid in lieu of the "NES entitlements";
- Implement processes to ensure compliance with the new casual conversion obligations (and revisit how these processes interact with award and agreement covered employees); and
- Establish a process to ensure the Casual Employment Information Statement is provided to employees.
KEY DEVELOPMENTS FOR 2021
Introduction of the Industrial Relations Omnibus Bill
Australia's Federal Government introduced the Fair Work Amendment (Supporting Australia's Jobs and Economic Recovery) Bill 2020 (Omnibus Bill), a suite of reforms to Australia's federal industrial relations system. The Omnibus Bill is already fiercely contested by union groups and employer advocates, and its changes will likely dominate the industrial relations landscape in the year to come. We explore some of its key features below.
Casual Workers: The Omnibus Bill provides some legislative clarity on the definition of a "casual" employee. For the first time, a statutory definition of "casual work" will be included in the Fair Work Act 2009. The Act will define a casual as someone offered work without "firm, advance commitment" of ongoing workplace opportunities, with the liberty to reject work and receive casual loading. The Omnibus Bill also proposes a new casual conversion clause. Subject to there not being reasonable grounds to make an offer, casual employees who have been employed for 12 months will receive part-time or full-time job offers if they worked regular pattern of hours during their last six months of employment.
The Omnibus Bill will also prevent "double-dipping" by casual employees, allowing causal leave loadings to be offset against other employment entitlements, such as annual leave and sick leave.
Underpayments: The Omnibus Bill aims to combat rising incidents of underpayments seen throughout 2020 by imposing greater penalties for wage theft. The Omnibus Bill reforms current penalties for employers who are repeat offenders, introducing gaol terms of up to four-years and fines of up to $1.11 million ($5.5 million for body corporates). A breach of the new provisions will be a criminal offence, and individual offenders will be disqualified from managing a corporation for a period of five years. Criminal offences will not apply to one-off underpayments, inadvertent mistakes or miscalculations, and offences in response to the Migrant Workers' Taskforce. The Minister has stated that the severe increase in penalties is necessary, as a "much clearer message needed to be sent" to employers.
Flexible work: The Omnibus Bill will extend the workplace flexibilities rolled out as a part of the JobKeeper scheme for a period of two years. The Bill allows employers in retail, accommodation, and food services to continue to enjoy flexible work regulations around the hours of part-time workers, giving employees the option to work additional hours at their ordinary rate of pay. The Bill also extends the power to vary workers' duties and location of work for two years. The reform is aimed at reducing underemployment, recognising the need for flexibility and the desire for permanent employment in the COVID-19 economic landscape.
Three-year review of the Modern Slavery Act
Another focus for employers in 2021 was the impact of the Modern Slavery Act. The Act, first passed in December 2018, is beginning to bare its first fruits. The Australian Border Force has released an initial batch of statements from its repository, with more anticipated following the extended deadline.
In 2021, a three-year review of the Act was expected to take place, with the introduction of penalties for non-reporting likely on the agenda. Next year will also see organisations submit their second statements, providing insight into how organisations evolve in their level of transparency. Business should review the Australian Border Force's Modern Slavery register before lodging a statement, and ensure that they have satisfied the legislative requirements.
KEY DEVELOPMENTS FOR 2020
The decision of the Federal Court in May 2020, WorkPac Pty Ltd v Rossato  FCAFC 84 (Rossato), has again put issues surrounding casual workers in the spotlight. The decision has sparked immense controversy, and WorkPac has since sought leave to appeal the decision to the High Court.
Rossato is important for a few key reasons, including:
Correctly classifying workers: Rossato reiterates a previous decision against the same employer, WorkPac Pty Ltd v Skene  FCCA 3628, that employers must correctly classify their casual workers. In Rossato, the Court applied the Skene decision in finding that stable, regular and predictable employment or 'a firm advance commitment' of employment are hallmarks of permanent employment, rather than casual employment.
Double liability: Casual workers are not entitled to annual leave, personal leave, notice of termination or redundancy pay, and instead receive a 25% pay loading. Following Rossato, some casual workers may be entitled to both. This risk mostly arises in relation to long-term casuals who work regular and systematic hours and have an ongoing expectation of work. In such cases, a Court will consider whether the employee was, in fact, a 'true' casual. If they are not, as it was found in Rossato, the Court can order the employer to back pay the employee for all leave entitlements, despite a 25% casual loading having already been paid. This effectively allows such employees to 'double dip' on both leave entitlements and casual loading payments, exposing employers with a large casual workforce to significant liabilities if their casual workers are in fact found to be permanent employees.
This is a developing issue in Australia, and the High Court appeal will be watched with great interest. In the meantime, Rossato should act as a timely reminder to employers to continuously and critically assess their arrangements with casual workers to ensure that only 'true' casuals are engaged as such and to ensure their casual contracts incorporate appropriate clauses that can assist in addressing potential 'double dipping' liability.
Changes to annualised wage arrangements
Australia's national workplace tribunal, the Fair Work Commission, has introduced changes to the annualised wage provisions in 22 modern awards which took effect from 1 March 2020. The annualised wage provisions in modern awards allow for employers to pay employees an 'all-in salary', which in effect 'buys out' various entitlements under an applicable modern award (such as loadings and penalty rates) which an employee might have otherwise received if an all-in salary arrangement was not in place.
However, from 1 March 2020, employers who wish to use an annualised wage mechanism under a modern award to pay employees will be required to comply with more stringent record and time-keeping obligations. For example, employers would be required to:
- detail how the annualised wage has been calculated (specifying which award obligations are included in this calculation);
- specify the 'outer limit' of how many ordinary and overtime hours can be worked without requiring a payment higher than the annualised salary;
- conduct an annual review to ensure the employee was paid at least as much under the annualised salary as if they had simply been paid according to the terms of the relevant modern award; and
- keep a written record of all start and finish times, and of unpaid breaks, which is signed or acknowledged by the employee in each pay period.
While the above changes do not impact those employers who instead rely on a common law set-off clause to pay employees an annual salary (as distinct from a modern award, annualised wage arrangement), given the increased focus on wage compliance, employers should continue to ensure that, whenever an annual salary amount is used, such amount is high enough to offset any modern award entitlements which might otherwise arise in any given pay or roster cycle (for instance, during peak periods).
Under the Modern Slavery Act 2018 (Cth) ("MS Act"), corporations, partnerships, trusts and incorporated and unincorporated entities ("Reporting Entities") with a consolidated annual revenue of AUD100 million or more are required to publish a Modern Slavery Statement ("MS Statement") within six months of the Reporting Entity's first full financial year after 1 January 2019 (or nine months in respect of Reporting Entities with their first full financial year commencing 1 April 2019 or 1 July 2019 due to COVID-19) as follows:
|Reporting Entity's annual financial reporting period||First reporting period under the MS Act||Due date for MS statement|
|1 April 2019 to 31 March 2020||1 April 2019 to 31 March 2020||30 September 2020 (extended to 31 December 2020 due to COVID-19)|
|1 July 2019 to 30 June 2020||1 July 2019 to 30 June 2020||31 December 2020 (extended to 31 March 2020 due to COVID-19)|
|1 October 2019 to 30 September 2020||1 October 2019 to 30 September 2020||31 March 2021|
|1 January 2020 to 31 December 2020||1 January 2020 to 31 December 2020||30 June 2021|
MS Statements prepared by Reporting Entities will be published on a central register maintained by the Department of Home Affairs.
While there are no monetary penalties for breaching the reporting requirements, the Minister for Home Affairs has the power to request that an explanation be provided and that remedial action be taken, failing which the Minister has the power to publicly identify the Reporting Entity as non-compliant.
In September 2019, the Department of Home Affairs released the 'Commonwealth Modern Slavery Act – Guidance for Reporting Entities' ("MS Guidance"), which comprehensively sets out how Reporting Entities are to address the content requirements prescribed under section 16 of the MS Act. Section 16 of the MS Act requires a Reporting Entity to prepare and publish an MS Statement, which:
- identifies the Reporting Entity;
- describes the structure, operations and supply chains of the Reporting Entity;
- describes the risks of modern slavery practices in the operations and supply chains of the Reporting Entity and any entities that the Reporting Entity owns or controls;
- describes the actions taken by the Reporting Entity and any entity that the Reporting Entity owns or controls to assess and address those risks, including due diligence and remediation processes;
- describes how the Reporting Entity assesses the effectiveness of such actions;
- describes the process of consultation with any entities that the reporting entity owns or controls; and
- includes any other information that the Reporting Entity considers relevant.
KEY DEVELOPMENTS FOR 2019
Federal and state elections
Elections will be held federally as well as in New South Wales this year. According to the polls and political commentary, it is likely that the Labor party, will win these elections. The Federal Labor Party has set out plans for major workplace reforms. These include:
- introducing a definition of "casual" employment under the Fair Work Act 2009 (Cth) (“FW Act”), to protect workers who are working full-time hours but are not engaged as full-time employees;
- reforming labour hire laws, so that workers who are engaged through labour hire companies are entitled to the same pay as other workers performing the same job but engaged directly with principal companies;
- closing the gender pay gap by enshrining the principle of equal pay for work of equal value in federal workplace laws, including by improving the treatment of employees in industries with a predominantly female workforce;
- modernising the Industrial Relations Act 1996 (NSW) (“NSW IR Act”) to empower the New South Wales Industrial Relations Commission to set minimum rates of pay and conditions for gig economy workers; and
- reforming workers' compensation laws so as to ensure that "gig economy" workers are legally entitled to workers' compensation when injured while performing work.
In summary, an overhaul or significant amendments to the existing FW Act and NSW IR Act are anticipated to occur in 2019.
Increased casualisation of the workforce
The increased casualisation of the Australian workforce (i.e. the number of individuals engaged as "casual" employees) means that more workers are engaged without access to certain entitlements such as annual leave, personal/carer's leave and long service leave. This has prompted an increase in claims by employees alleging their "casual" engagement is a sham and that their true status is as a permanent employee.
In response, there have been calls to strengthen the rights of casual employees and on 1 October 2018, casual conversion rights and obligations for employees covered by modern awards were updated and a modern clause was inserted into 84 modern awards. Under the model clause, a regular casual employee who has worked a period of 12 months or more and in a pattern of hours on an on-going basis, which the employee could continue to perform as a full-time or part-time employee without significant adjustment is eligible to request conversion from casual to full-time or part-time employment.
KEY DEVELOPMENTS FOR 2018
Significant Changes to Penalty Rates
In February 2017, the Full Bench of the Fair Work Commission (Commission) cut penalty rates for Sundays and public holidays for employees covered by modern awards in the Retail and Hospitality industries. A gradual reduction of penalty rates commenced in July 2017 and will be in full effect by 2020.
New Legislation - Vulnerable Workers and Corrupting Benefits Offences
The Fair Work Amendment (Protecting Vulnerable Workers) Act 2017 came into force on 15 September 2017. The legislation is intended to hold franchisors and holding companies accountable for any breach of employment law by their franchisees and subsidiaries, and increase penalties for administrative and record-keeping failures.
The Fair Work Amendment (Corrupting Benefits) Act 2017 (Cth) came into force on 11 September 2017, which prohibits “sweetheart deals” between unions and employers. The legislation includes criminal and pecuniary penalties for breaches of the new provisions.
Shadow Legal Representation
The decision in the recent case of Stephen Fitzgerald v Woolworths Limited  FWCFB 2797 is likely to reduce the role of lawyers, and other representatives, in Fair Work Commission proceedings. The case held that employers may not always be able to rely on assistance from external legal representatives when initiating or defending proceedings in the Commission. This is a significant departure from current practice and the decision, if upheld on appeal/ applied as a precedent, will have significant ramifications for employers and employment lawyers alike.
Legislative Reform on the Horizon
On 30 January 2018, Opposition Leader Bill Shorten gave a speech advocating major changes to the Labor party's workplace policies. Mr Shorten highlighted the need for industrial relations reform and declared that the enterprise bargaining system is on "life support" due to the decrease in ratified enterprise agreements and the increase in enterprise agreement terminations by employers.
This suggests that workplace reform may be a key issue during the upcoming Federal election, perhaps including an overhaul or significant amendment to the existing Fair Work Act 2009 (Cth).
The Weinstein Effect
Women are increasingly inclined to speak out about sexual harassment and/or assault, including bringing a claim against the perpetrator and/or their employer. Employers are taking the opportunity to review workplace behavior policy and provide workplace training, in an attempt to eliminate gendered violence (and associated legal risk) before as well as in an effort to remediate historic problematic behaviours.
The Gig Economy
With the emergence of Uber, Deliveroo, Foodora and Air Tasker (amongst others), it is expected that it will only be a matter of time until the "gig economy" is upturned by legislative reform to classify workers as employees or "dependent contractors", rather than independent contractors.
In December 2017 the Fair Work Commission delivered the first decision in Australia assessing whether an Uber driver is an employee. The Commission found that for unfair dismissal purposes, an Uber driver was not an employee. The decision, however, expressly acknowledged the limitations of the established test for identifying an employment relationship and specifically contemplated legislative change.
KEY DEVELOPMENTS FOR 2017
Disruptive service providers
The challenges of regulating service providers and the manner in which employers engage with labour and service providers will continue to be a topic of interest and a source of heated debate in 2017. Legislative debate and policy changes are a likely outcome to address the rise of the gig economy, help equip employers with a means to flexibly engage independent workers, and other challenges to traditional models of worker engagement.
Important legislative amendments
- The Fair Work (Registered Organisations) Amendment Bill was passed in November 2016. It is anticipated that the Bill will become operational in the very near future.
- A key aspect of the Bill is to ensure stronger protections for whistle-blowers in organisations to ensure that they have access to remedies where a person takes, or threatens to take, a reprisal against them out of a belief or suspicion that they have made or may have made a disclosure of information.
- A person who takes a reprisal against a whistle-blower can be pursued for civil or criminal remedies.
Re-establishment of ABCC
- A Bill was passed on 30 November 2016 to re-establish the Australian Building and Construction Commission (“ABCC”).
- The main purpose of the Bill is to reintroduce the ABCC as the industry regulator and abolish the current Fair Work Building Industry Inspectorate.
- One of the main impacts of the new ABCC on the building industry is the introduction of the Building Code, which will be introduced in 2018.
- The Building Code includes new requirements for companies’ contractual arrangements including enterprise agreements to ensure they are Code-compliant. The Code will have retrospective impact on agreements in the building industry and will likely result in industrial unrest from impacted Unions, who will be more heavily regulated as a result of the introduction of the Code and the ABCC.
- These legislative developments form two parts of the most significant industrial relations reform in Australia since the creation of the Fair Work Act 2009.
Penalty rates in Australia
A recent penalties case in Australia has considered whether to reduce the penalty rates payable by employers under a number of hospitality and retail modern awards. This case arose from a push by employers to reduce weekend penalty rates to make labour costs more affordable for retailers. Although a decision has not yet been handed down, this case could have a significant impact on the penalty rates payable by employers in Australia under the relevant awards and will have a significant impact on employers in the hospitality industry. It is expected that a decision will be handed down in late December 2016, or early in 2017.
KEY DEVELOPMENTS FOR 2016
Australian Government’s amendments to the Fair Work Act
On 3 December 2015, the Senate referred an inquiry into the provisions of the Fair Work Amendment (Remaining 2014 Measures) Bill 2015 (the “Bill”) to the Education and Employment Legislation Committee for inquiry and issuing of a report by 4 February 2016.
The Bill amends the Fair Work Act 2009 in relation to:
- The payment of annual leave upon termination of employment;
- Taking or accruing leave while receiving workers’ compensation;
- The requirements for flexibility terms in modern awards and enterprise agreements and individual flexibility arrangements made under those terms;
- The transfer of business rules;
- The right of entry framework; and
- The Fair Work Commission not having to hold a conference or hearing to dismiss an unfair dismissal application.
WHS Act as a ‘national scheme’
Implementation of harmonised work, health and safety (“WHS”) legislation in Australia has not yet been finalised, however, investigations into ways in which the model laws could be improved have been ongoing since February 2004. As at January 2013, every jurisdiction apart from Victoria and Western Australia had introduced the model WHS legislation.
A comprehensive review of the model WHS laws was undertaken in 2016, which resulted in substantial amendments being made to the model WHS laws on 21 March 2016. At this stage, no jurisdiction has implemented any of these amendments.
Social Media Misuse
The dismissal of employees for alleged social media misuse is becoming increasingly common. There have been a number of decisions in the last few years in Australia dealing with this issue.
The cases have raised important questions about balancing an employer’s ability to control the social media activity of its employees against the rights of employees to engage in freedom of speech. The cases have tended to limit freedom of speech of the employee in situations where they have a public profile by virtue of their position, and their comments are not aligned with the interests of the employer. Principles derived from case law indicate that employers are likely to have good grounds to terminate when the comments are highly offensive, involve bullying or harassment, cause serious harm to the employer’s business and the obligations surrounding permissible use of social media in the workplace are clearly set out in a policy.