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Fwd Thinking 2022 How much workplace change is coming in 2023

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    2022 has ended with a bang from a workplace relations perspective. 

    The passing of two key Federal workplace Bills in the last week of November, and the prospect of another Federal workplace Bill being introduced into Parliament by February 2023 herald a range of workplace reforms. 

    Add to this the expected release of the much anticipated report by the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability, and the raft of codes, regulations and other legislative and guidance material released in 2022 by safety regulators about psychosocial risk, and 2023 is shaping up to be a busy year of workplace change for employers. 

    We hope you enjoy this edition of Fwd: Thinking where we consider our top 4 workplace issues for 2023: 

    • The status of industrial relations in 2023 and beyond
    • Strategic and operational implications of the Respect@Work reforms 
    • The emergence of psychosocial risk as a new workplace risk; and  
    • Preparing for the release of the Disability Royal Commission report in 2023

    We welcome your feedback about this edition.

    1.The status of industrial relations in 2023 and beyond

    Enterprise bargaining has been in a steady state of decline over recent years.  Bargaining has been difficult, costly and protracted (including because of the technical approach adopted to agreement approval by the Fair Work Commission) and has not led to the productivity improvements or trade-offs which would otherwise make it a worthwhile endeavour. 

    However, the recent passage of the Fair Work Legislation (Secure Jobs, Better Pay) Act 2022 will lead to a substantial increase in bargaining activity in 2023, largely because:  

    • employee bargaining representatives are able to effectively commence bargaining once an agreement has passed its nominal expiry date; and 
    • bargaining for a new single enterprise agreement will be a mechanism by which employers can avoid being compelled to bargain for, or "roped into" multi-enterprise agreements.

    Bargaining and agreement-making will look different in 2023. 

    Multi-enterprise agreements are likely to be far more prominent, meaning more employers will be required to bargain, and bargain together with other employers.  While there is considerable scope for the making of "single interest employer authorisations" (which is a new stream of multi-enterprise agreements) under the new provisions, as a practical matter, we anticipate that multi-enterprise bargaining will be prevalent within specific industries, intra-company groups and supply chains.  In industries where there is a long history of single enterprise agreements with entrenched terms and conditions and current enterprise agreements with staggered nominal expiry dates, multi-enterprise bargaining is less likely. 

    Bargaining will also take place in the shadow of the Fair Work Commission's new power (to commence in six months' time) to make an intractable bargaining declaration, and then to arbitrate and determine the terms of an enterprise agreement.  

    The threshold which the Commission will apply in determining when bargaining is intractable will be a matter to watch.  Will the Commission require bargaining representatives to use all of the other tools in their arsenal (including engaging in protected industrial action) to pressure employers to make an agreement before considering bargaining intractable? 

    There may be some hesitance on the part of both employers and employees to use this mechanism, having regard to the likely time and cost of arbitration, and the loss of control over the outcome.  It will not be the answer where parties are looking for a quick outcome.   

    While there are some changes to the Better Off Overall Test and agreement approval processes (to commence in six months' time), these changes are unlikely to be the prime motivator for employers wanting to commence bargaining.  They may, however, reduce some of the burdens of the agreement approval process.  In particular, the amendments to the BOOT reflect the global (and not line-by-line) assessment to be undertaken, give primacy to a common view of the parties that an agreement passes the BOOT, and also consider only reasonably foreseeable work patterns and types of employment (and not those that are merely hypothetical). 

    However, employers should be aware with respect to the BOOT that: 

    • if the Fair Work Commission has a concern that an enterprise agreement does not meet the BOOT, the Commission may amend the agreement if it considers an amendment is necessary to address the concern (rather than seeking undertakings).  While the views of the parties must be sought before such an amendment is made, this could conceivably result in the Commission including terms in an agreement that do not reflect those agreed by the parties; 
    • an application may be made during the life of an agreement for the Commission to re-assess the BOOT where there are particular changes to the type of employees, work or working arrangements that were not considered by the Commission for the purpose of the BOOT at the time the agreement was approved.  The Commission can accept undertakings or amend the agreement if it considers it necessary following consultation with the parties.  This derogates from one of the key benefits of having an in-term enterprise agreement – certainty with respect to terms and conditions.

    The changes will require careful consideration of bargaining strategy and tactics, well in advance of an agreement reaching its nominal expiry date.  

    It will also require careful consideration of operational changes which may lead to a re-assessment of the BOOT during the life of an agreement.

    Further reforms ahead 

    The changes to the industrial relations landscape are set to continue into 2023.  We can expect to see the introduction of 'same job, same pay' legislation (requiring that workers employed through labour hire companies receive no less pay than workers employed directly), regulation of "employment-like" forms of work, and changes to casual employment.  The Greens have also foreshadowed they will be seeking a range of measures as part of the second tranche of IR reforms, including a "right to disconnect". 

    Authors: Trent Sebbens, Partner; Peter McNulty, Senior Associate; and Eve Andersen, Lawyer. 

    2. Strategic and operational implications of the Respect@Work reforms

    On 28 November 2022, the Federal Parliament passed the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Act 2022.  The Act implements seven recommendations of the Respect@Work report, including introducing a positive duty under the Sex Discrimination Act 1984 (Cth) on all employers and persons conducting a business or undertaking (PCBU) to take reasonable and proportionate measures to eliminate workplace sexual harassment, victimisation and sex discrimination as far as possible, and giving the Australian Human Rights Commission considerable new powers to enforce this duty.

    Further, on 2 December 2022, the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 was also passed, addressing a further recommendation from the Respect@Work report by introducing a new civil penalty provision prohibiting sexual harassment in connection with work under the Fair Work Act 2009 (Cth).

    Many States and Territories are also considering similar legislative changes, including a broader focus on managing psychosocial risks, as discussed in our next article further below.

    Sexual harassment is also now well recognised as conduct that can, and does, expose workers to a risk to their psychological health and safety.  The last 12 months has seen an increased focus on this area by safety regulators in a number of jurisdictions and industries.  [See our 30 August 2021 Employment Alert].

    Heading into 2023, we expect to see increased scrutiny on what employers and PCBUs are proactively doing to prevent sexual harassment in their workplaces.  This will require organisations to consider what changes may be appropriate to recalibrate their approach, rather than merely focusing on their responses to conduct when it occurs.  In our experience, this will require cultural change to be led from the very highest levels in each organisation.

    Some of the steps we expect organisations will need to take in 2023 include: 

    • Empowering leaders to reinforce that sexual harassment will not be tolerated and to model appropriate workplace behaviours 
    • Collecting information to identify trends from reports of sexual harassment to allow a data driven approach to identifying risk factors for sexual harassment within the organisation
    • In the context of the data, considering what measures and actions are currently taken to prevent workers from being exposed to the risk of sexual harassment, whether these are effective and whether additional measures may be required to prevent workers from being exposed to the risk of sexual harassment
    • Reviewing existing policies and procedures and training/education programs against a risk assessment framework to test whether they remain appropriate and what changes may need to be made to those procedures and programs, again with the aim of preventing sexual harassment as far as possible
    • Reviewing in-take and triage processes for reports in light of feedback in the Respect@Work Report that employees do not trust reporting systems, want more "agency" in the management of their reports and want to be treated in a more "trauma informed" way; and
    • Considering a holistic approach to conducting sexual harassment investigations from both an employment and safety perspective, ensuring that a sensitive and trauma informed approach is taken while still providing procedural fairness.

    Authors: Tamara Lutvey, Partner; and Joycelyn Tang, Lawyer.

    3. The emergence of psychosocial risk as a new workplace risk

    In 2022 we have seen a significant focus on understanding psychosocial risk in the context of Respect@Work reforms.

    While the Respect@Work laws are undoubtedly important, the introduction of updated model work health and safety regulations in June 2022 by SafeWork Australia reinforces that managing psychosocial issues in the workplace extends much further than inappropriate workplace behaviours.  Psychological safety in the workplace is not just about risks associated with sexual harassment, victimisation and sex discrimination.  It essentially encompasses anything that may cause harm to a worker's mental health.  

    The updated model regulation expressly requires PCBUs to eliminate psychosocial risks so far as is reasonably practicable or, if that is not possible, to minimise those risks so far as is reasonably practicable.  The regulation sets out a non-exhaustive list of relevant matters PCBUs must have regard to in considering what control measures should be put in place.  These include:

    • The design of work including job demands and tasks
    • Systems of work, including how work is managed, organised and supported
    • Design and layout, and environmental conditions, of the workplace including safe entry and exit and facilities for the welfare of workers
    • Workplace interactions or behaviours; and
    • Information, training and instruction.

    New regulations on psychosocial risk came into force in New South Wales in October 2022 [see our  6 October 2022 Employment Alert], and will commence in Queensland in April 2023.  Similar regulations have been proposed in Victoria, but with additional requirements for employers to maintain written prevention plans and the introduction of a reporting scheme for certain psychosocial hazards [See also Safety Matters Alert – Current state of Health and Safety Laws in Australia 2022]. We expect that other States and Territories will follow suit in 2023.

    Coinciding with these changes, we have started to see an increase in regulatory activity in this space.  Safety regulator investigations into psychosocial hazards have been broad in nature and have examined factors such as:

    • The conduct of workplace investigations and complaint mechanisms
    • Workload, resourcing and work-related stress
    • Bullying and harassment from clients and other external stakeholders (such as students and patients); and
    • Worker mental health histories.  

    Whilst traditionally the purview of human resources, safety regulators appear to be more readily treating these types of issues as psychosocial work health and safety matters.  

    Heading into 2023, we expect to see more jurisdictions establish regulations and Codes of Practice, and safety regulators building their experience and expertise in this space.  PCBUs should keep a close eye on these developments.  

    Next year, we may well see the outcome of some of the first prosecutions alleging breaches of a PCBU's primary duty in relation to psychological and psychosocial health and safety of workers.  It is worth noting that in August this year, the Commonwealth DPP filed three charges against a Commonwealth department under the Federal WHS Act for alleged failures in managing risks to psychological health and safety.  The charges go to the PCBU's administration of workplace policies and procedures in relation to the suicide of a worker.  

    Whilst there is presently very little case law on the management of psychological hazards in the workplace, we expect that regulators will build on decisions such as Kozarov v Victoria [2022] HCA 12 [see our 13 April 2022 Employment Alert] in shaping the legal and policy landscape in this area.

    Authors: James Hall, Partner; and Rebecca Beard, Senior Associate.

    4.  Preparing for the release of the Disability Royal Commission report in 2023

     In 2019, the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability was established.  The Royal Commission has conducted public hearings into measures taken by private and public sector employers, and regulators, to respond to systemic barriers to open employment for people with disability.  Several large employers were required to respond to questions and appear before the Commission.

    A final report is expected to be issued in 2023

    What do we expect to see in the final report?

    1. Compulsory reporting – Employers define disability inconsistently and have inconsistent approaches to disclosure of disability, resulting in unreliable data to assess whether access to employment for people with disability is improving.  We expect to see an expanded role for the Workplace Gender Equality Agency and improvements to data collection.  
    2. Legislative amendments and/or regulatory guidance – The public hearings demonstrated there is a misunderstanding in some quarters of employer's obligations to make reasonable adjustments.  We expect to see updated guidance on how employers should determine the inherent requirements of a position and what reasonable adjustments are available.  We may also see legislative reform (or at least updated guidance from regulators) on the interplay between disability discrimination and work health and safety legislation.
    3. Clear communication of true inherent requirements and possible adjustments – We expect the Royal Commission to recommend improvements to the way employers advertise jobs.  Job advertisements should clearly communicate the work to be performed and the manner in which that work is to be performed, as well as how adjustments can be made.  This will require employers to identify genuine inherent requirements and consider reasonable adjustments as part of job design.  
    4. Targeted training – We expect a renewed focus on training.  Employers should look to involve people with disability in designing and delivering employer policies and associated training.  Training should be directed to understanding ableism, unconscious bias and disability awareness.  It is also likely that we will see organisations appoint designated leaders with responsibility for disability strategies as well as "Reasonable Adjustments Officers" responsible for improving job design practices.

    What can you do now?

    Leadership and organisational design

    Start considering how the design of your organisation can be changed to have a more inclusive focus of people with disability. This may include commencing greater involvement of Diversity and Inclusion teams in any changes or new programs within the organisation, briefing senior managers on the likely outcomes of the Royal Commission and considering appointing a leader as a "Reasonable Adjustments Officer" to be responsible for people with disability.

    Set up frameworks
    • Review accessibility to all workplace sites and communications and test if they are accessible to all people with disability.
    • Review job designs and job advertisements to consider genuine inherent requirements and how jobs may be changed to be more accessible to people with disability.
    • Commence training operational managers and recruitment personnel on inclusion and access to employment of people with disability.

    Authors: Jon Lovell, Partner; and Kate Hollings, Senior Associate.

    Authors: Trent Sebbens, Partner; Tamara Lutvey, Partner; James Hall, Partner; Jon Lovell, Partner; Peter McNulty, Senior Associate; Kate Hollings, Senior Associate; Rebecca Beard, Senior Associate; Joycelyn Tang, Lawyer; and Eve Andersen, Lawyer.

    Editors: Trent Sebbens, Partner and Julie Mills, Global Practice Management Counsel - Employment.

    The information provided is not intended to be a comprehensive review of all developments in the law and practice, or to cover all aspects of those referred to.
    Readers should take legal advice before applying it to specific issues or transactions.


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