Employment Extra – Issue Two

By Fay Calderone and Loren Alderuccio

Employment Extra provides a rundown of recent issues, legislative updates and decisions impacting your workplace. In our second edition, we outline what you need to know about the ‘Secure Jobs, Better Pay’ Bill, the enhanced entitlement to 10 days of paid family and domestic violence leave, Respect@Work changes to the Sex Discrimination Act, the record $532 million recovered in underpayments, and much more.

Sweeping changes to the employment and industrial relations landscape on the horizon

The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 is currently before Parliament and is intended to implement significant and wide-ranging changes to the employment and industrial relations landscape.

The changes to the Fair Work Act 2009 (Cth) are designed to:

• simplify the better off overall test;
• improve job security and gender equity by limiting the use of fixed-term contracts and prohibiting pay secrecy clauses; and
• improve workplace conditions and protections, including by strengthening flexible working arrangements, introducing stronger protections for victims of sexual harassment and enhancing small claims procedures to enable unpaid entitlement recovery.

See our article, ‘A new era of Fair Work’, for a comprehensive outline of the proposed changes.

Ten days of paid family and domestic violence leave now an NES entitlement

On 27 October 2022, the Fair Work Amendment (Paid Family and Domestic Violence Leave) Bill 2022 (Bill) was passed. The Bill provides for 10 days of paid family and domestic violence leave under the National Employment Standards (NES). 

The Bill amends the Fair Work Act 2009 (Cth) to:

• increase the current unpaid five-day entitlement to ten days of paid family and domestic leave in a 12-month period for full-time, part-time and casual employees, at their full rate of pay;
• extend the definition of family and domestic violence to include conduct of a current or former intimate partner of an employee, or a member of an employee’s household; and
• extend the full paid entitlement to all employees when the International Labour Organisation Violence and Harassment Convention (No. 190) comes into force for Australia.

It is important for employers to note that the increased 10-day entitlement will accrue immediately for existing employees and reset each year on the date that their employment commenced.

The new paid entitlement comes into effect on 1 February 2023, or 1 August 2023 for small business employers.

Respect@Work changes to the Sex Discrimination Act 1984 (Cth)

On 27 September 2022, the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill 2022 (Bill) was introduced into Parliament as the next step in fully implementing the Respect@Work recommendations.

Employers’ positive duty

If passed, the Bill will insert provisions that impose responsibility on employers or a person conducting a business or undertaking to take reasonable and proportionate measures to eliminate discriminatory conduct, sexual harassment, acts of victimisation and conduct in the workplace that amounts to a hostile work environment, as far as possible. 

Matters taken into account when considering whether a duty holder is compliant include:

• the size, nature and circumstances of the business or undertaking;
• resources, whether financial or otherwise;
• the practicability and costs of steps to eliminate the conduct; and
• any other relevant matter.

Hostile workplace environment prohibition

The Bill also proposes to amend the Sex Discrimination Act 1984 (Cth) to prohibit conduct that subjects another person to a workplace environment that is hostile, on the ground of sex. This can occur where a reasonable person would have anticipated that a worker’s conduct would be offensive, intimidating or humiliating to a colleague on the basis of the colleague’s sex or other linked characteristics.

Commencement of amendments

This duty and prohibition, among other amendments, will come into effect on the date the Bill receives Royal Assent. In the interim, employers should be reviewing current processes to ensure they are directed at preventing and responding to sexual harassment.

Changes to mental health obligations for NSW employers

On 1 October 2022, the Work Health and Safety Amendment Regulation 2022 (Amendment Regulation) came into effect in NSW. The Amendment Regulation inserts new provisions to the Work Health and Safety Regulation 2017 requiring persons conducting a business or undertaking in NSW to respond to, manage and prevent psychosocial risks in the workplace.

A ‘psychosocial risk’ is a risk to the health or safety of a person from a psychosocial hazard, being a hazard that arises from the design, management, environment, plant or interactions at work, which may cause psychological or physical harm. Examples of psychosocial hazards are poor support and excessive job demands.

What does this mean for employers?

The Amendment Regulation requires employers to manage psychosocial risks and implement control measures to eliminate or minimise risks to health and safety so far as is reasonably practicable in the same way that physical risks to health and safety are managed.

The change reflects a shift in the minimum standards expected in the workplace in NSW. Employers should undertake a risk assessment, in consultation with workers, and take steps to identify, assess and control psychosocial risks.

A review of measures implemented to control psychosocial risks should also be undertaken. The design and systems of work, job demands and management of work, interactions and behaviours among workers are relevant in determining the control measures to implement.

Taskforce recommends NDAs be prohibited in workplace sexual harassment cases

The Victorian Government has accepted in principle the recommendation of the Ministerial Taskforce on Workplace Sexual Harassment (Taskforce) to prohibit the use of a non-disclosure agreements (NDAs) in workplace sexual harassment matters.

The Taskforce recommended the Victorian Government model their approach on Ireland’s Employment Equality (Amendment) (Non-Disclosure Agreements) Bill 2021. If passed, the Bill will prevent employers from entering NDAs where an employee has experienced or made allegations of sexual harassment or unlawful discrimination, other than where this is the expressed wish and preference of the employee.

An NDA will only be enforceable if:

• the employer has offered the employee independent written legal advice, at the employer’s expense.
• the employer has not made undue attempts to influence the relevant employee in respect to the decision to include a confidentiality clause.
• the NDA does not adversely affect the future health or safety of a third party or the public interest.
• the NDA includes an opportunity for the relevant employee to decide to waive their own confidentiality in the future.
• the NDA is of a set and limited duration.

What does this mean for employers?

Although no timeframe has been set for implementing legislative amendments, employers are encouraged to be proactive and proceed with caution in the use of NDAs in sexual harassment cases.

This may involve amending NDAs to permit survivors to discuss their experience and limiting confidentiality to the key sections of a settlement agreement, such as the settlement sum paid.

Record $532 million recovered in underpayments

The Fair Work Ombudsman (FWO) has reported that a record $532 million in unpaid wages and entitlements was recovered in the 2021-2022 financial year for more than 384,000 workers. This figure almost triples the previous financial year’s recovery of $148 million.

Over 50% of the recovered amount was attributed to large corporations. While FWO Director of Policy and Communication, Kristen Hannah, commented that the figures represent a great result for workers and for businesses that are compliant with their payments, underpayments by large corporates and universities remain a key compliance and enforcement priority area for the FWO. Around 50 investigations are currently being undertaken into non-compliant companies, including major banks and supermarkets.

The Federal Government has indicated an intention to criminalise wage theft at a national level, with Victoria and Queensland already having legislated to warrant certain underpayment practices as a criminal offence, and other states expressing similar intentions.    

Deliveroo driver held to be a contractor not an employee

In an important ruling for the gig economy, on 17 August 2022 the Full Bench of the Fair Work Commission held that Deliveroo driver Diego Franco was an independent contractor, not an employee^[1]. Accordingly, Mr Franco was not afforded protection from unfair dismissal under the Fair Work Act 2009 (Cth).

Although the substance of Mr Franco’s working engagement was found to be that of an employee in the first instance decision, the Full Bench found that Mr Franco’s 2019 agreement was valid and applicable and the Full Bench’s determination was made in light of the Personnel Contracting and Jamsek decisions (see our comprehensive article, ‘Tough gig‘).

The perceived injustice of the narrow contractual interpretation added to the momentum for legislative reform on employment in the gig economy. Gig economy executives have been told to expect legislation in the first half of 2023, which will expand the FWC’s powers to set minimum pay and conditions for ’employee-like’ workers.

[1] Deliveroo Australia Pty Ltd v Diego Franco [2022] FWCFB 156.

This edition of Employment Extra was written with contributions from Law Graduate Laura D’Aprano, and Paralegal Cassandra Goldman.