Insights

FWD: THINKING 21 Jan 2019 What are your top workplace priorities for 2019?

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1. THE FEDERAL ELECTION

With the Federal election looming, unions have been advocating for a raft of changes to the current workplace relations system. The enterprise bargaining landscape is a particular focus for the ALP because of continuing wage stagnation and the declining number of private sector agreements.

Some of the changes to look out for in 2019, particularly if there is a change of Federal Government, are:

  • Industry bargaining: The ACTU and Transport Workers Union have been increasing pressure to introduce industry bargaining. The ALP supports multi-employer and multi-sector bargaining (although it may be limited to certain, low-income sectors)and in particular the ALP has said it will advocate for equal terms and conditions across the public sector.
  • Prohibiting employer lockouts during bargaining: The ACTU is advocating for the prohibition of employer lockouts, arguing that it is in line with international law standards and best practice which prevent employers engaging replacement labour during periods of industrial action.
  • Limiting the ability to terminate expired agreements: Since the 2015 decision of Aurizon Operations Limited: Aurizon Network Pty Ltd; Australia Eastern Railroad Pty Ltd [2015] FWCFB 540, an increasing number of employers have applied to terminate enterprise agreements when negotiations for a new enterprise agreement have reached an impasse. The ACTU has called for changes so that enterprise agreements can only be terminated in exceptional circumstances and not when bargaining is underway or being sought.
  • Arbitration to settle disputes under an enterprise agreement: The ALP's National Platform includes the introduction of arbitration for unresolved enterprise agreement disputes. It is proposed that these disputes will be heard by an impartial tribunal.
  • Labour hire: If the ALP is elected, expect restrictions on the use of labour hire and the introduction of legislation requiring labour hire workers to be paid the same as permanent employees performing the same job in the same workplace.
  • Labour hire licensing: The ALP platform also calls for the introduction of a national scheme to license labour hire operators. In 2019 we can expect to see increased attention given to the case for regulating the industry at a national level. More details about the individual state licensing schemes can be found in the Other developments section below.
  • Whistleblowing: The ALP has stated its commitment to strengthening whistleblower protections if elected, with the potential to expand protections to exploited migrant or temporary workers who blow the whistle on their employer. So, if there is a change in government following the Federal election, it remains to be seen if the ALP would progress the current Whistleblower Bill or introduce a new or amended bill.
  • Restoring Penalty Rates Bills: The Hon. Bill Shorten, MP introduced the Fair Work Amendment (Restoring Penalty Rates) Bill 2018 in June 2018, which would have the effect of reversing the FWC's 2017 decision to cut penalty rates. An identical bill was introduced in the Senate by the Hon. Doug Cameron on 14 November 2018. We do not expect either bill to pass Parliament as currently constituted, but if the ALP is successful at the next Federal election then implementing the amendments will likely be a priority for 2019.
  • Industrial manslaughter: At the end of 2018, the ALP's national conference passed a resolution to work with Safe Work Australia to introduce industrial manslaughter laws into the WHS model legislation during its first year of government, if it wins this year's Federal election. We anticipate that any such amendment would be informed by the Queensland laws. More details about the Queensland laws can be found in the Other developments section below. This follows a recommendation by a Senate committee inquiry into the framework surrounding the prevention, investigation and prosecution of industrial deaths in Australia. Conversely, the Coalition has indicated it is unlikely to support the introduction of such an offence.
2. CASUAL WORKERS

In 2018, a number of significant developments occurred relating to the entitlements of employees engaged on a casual basis, and further agitation of these issues will follow in 2019.

The Full Court of the Federal Court in WorkPac Pty Ltd v Skene [2018] FCAFC 131 found that casual employees with regular predictable hours may be entitled to the same statutory entitlements under the NES as permanent employees, regardless of whether they are engaged and paid on a casual basis (see our Employment Alert).

In response to concerns that the Federal Court's decision could lead to "double-dipping" of entitlements for employees paid a casual loading, amendments to the Fair Work Regulations 2009 (Cth) were implemented with effect from 18 December 2018 through the Fair Work Amendment (Casual Loading Offset) Regulations 2018 (Cth).

Described as providing "declaratory clarification", the new subregulation 2.03A of the Fair Work Regulations 2009 (Cth) applies where a person employed as a casual employee has clearly received an identifiable loading in lieu of one or more NES entitlements during a particular period, despite not in fact being a casual employee for the purposes of the NES for all or part of that period. The provision explains that in these circumstances, the employer may make a claim to have the loading amount taken into account if the employee makes a subsequent claim to be paid an amount in lieu of one or more of the NES entitlements afforded only to non-casual employees (ie part-time or full-time employees).

Employers should still review existing arrangements with their casual employees (in particular, the terms of their contracts of employment) as the Regulation does little more than capture the current common law position.

The Federal Court in Skene left open the question of whether an employer who has paid to an employee a casual loading in lieu of certain entitlements, is entitled to set off that amount against entitlements later found to be owing, for example annual leave.

WorkPac has filed a separate test case to clarify the position with respect to "casual" employees and "double-dipping" to claim entitlements under the NES and/or relevant industrial instruments in addition to casual loadings. The matter will be heard by a Full Court of the Federal Court around April this year. Given the significance of the issues involved, the matter may be appealed to the High Court. The set-off issue is also likely to be raised in two class actions filed in December 2018 against labour hire firms. In our view this is a critical issue for employers in 2019.

Casual conversion

Early 2019 is the time for employers that engage casuals who are covered by a relevant modern award to make sure that systems are in place to ensure compliance with the notification requirements and other obligations imposed by new casual conversion provisions implemented late last year in the majority of modern awards.

The final model casual conversion clause was formulated by the Full Bench of the FWC in its August 2018 decision and has been inserted in 85 modern awards. The clause allows a "regular casual employee" to request that their employer convert their employment to part-time or full-time employment (depending upon hours worked over the preceding period) after 12 months of service. Although such a request may be refused by the employer, it may only be refused on "reasonable grounds" and following consultation with the employee. An employer must also provide the casual employee with reasons for the refusal in writing within 21 days of the request being made.

Following the insertion, with effect from 1 October 2018, employers are now required to provide any new casual employee with a copy of the conversion clause as it appears in the relevant modern award within 12 months of the employee's first engagement to perform work. (Employers were required to provide casual employees already employed as at 1 October 2018 with a copy of the clause by 1 January 2019).

The Government has indicated that it intends to amend the FW Act to provide regular casual employees with the right to request conversion to permanent employment.

Employers with enterprise agreements do not need to comply with the casual conversion clause obligations, but should expect pressure from employees and unions to include a casual conversion clause in replacement enterprise agreements.

3. WORKER STATUS

The rise of the "gig economy worker" has led to new working practices that challenge the existing traditional worker categories in Australia by introducing workers who are engaged as contractors but who enjoy varying degrees of independence.

There have been a number of reviews on the future of work and its impact on worker status. The Victorian Government commenced an Inquiry into the on-demand workforce on 20 December 2018. This inquiry will consider the extent and nature of the gig economy in Victoria as it impacts on the Victorian labour market, as well as examine how similar workers are regulated interstate and internationally. The inquiry is currently calling for submissions until 6 February 2019, and is expected to deliver a final report to the Victorian Government later this year.

This follows the Federal Senate Select Committee on the Future of Work and Workers which also concluded an inquiry on this issue in September 2018, and an interim report being issued in Western Australian arising from a Ministerial Review.

During 2018 the UK Government published its response to the 2017 Taylor Review of Modern Working Practices. It accepted a number of the Review's conclusions and recommendations, including the conclusion that there is currently a lack of clarity and certainty surrounding the tests for employment status. However, the UK Government has made clear that it has no plans to reform the current tripartite approach to employment status (the categories of employee, worker and self-employed). We expect that efforts towards law reform in this area will continue into 2019, however, changes are likely to be incremental rather than fundamental. To date there have been relatively few concrete proposals for reform, and a number of the Review's conclusions were put out to further consultation. We expect the UK Government responses to those consultations during 2019.

It is also likely that court and tribunal challenges to individuals' employment status will continue in both Australia and the UK, and that trade unions will continue to try to increase their representation and role in the gig economy.

4. WHISTLEBLOWING "PERSONAL WORK-RELATED GRIEVANCES"

In its last 2018 sitting, the Senate passed the Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 (Cth) with amendments, and it is now before the House of Representatives.

A key change of relevance to employers is a carve-out for "personal work-related grievances" from the types of disclosures qualifying for protection. A disclosure of misconduct concerning a personal work-related grievance of the whistleblower will only be protected if it meets specific conditions, which include where the disclosure concerns alleged victimisation of the whistleblower, has significant implications extending beyond the whistleblower, or the disclosure is made to a legal practitioner for the purposes of obtaining legal advice or legal representation in relation to the operation of the whistleblower provisions.

We previously considered the Whistleblower Bill when it was first introduced into the Senate (see our Employment Alert). Since this Alert, the Whistleblower Bill has been amended in several respects. Some of the key aspects of the Whistleblower Bill are:

Who can make a qualifying disclosure? The categories of people who may make a qualifying disclosure will include both current and former officers, employees, contractors or individual associates of a regulated entity, and their family members and dependants.
Who can receive a qualifying disclosure? A person may blow the whistle to a number of regulators as well as an "eligible recipient". An "eligible recipient" is defined to include senior managers as well as officers of a body corporate or related body corporate. Due to amendments made in the Senate, the Whistleblower Bill no longer includes the whistleblower's supervisor or manager in the "eligible recipient" definition.
What type of disclosed information is protected? The Whistleblower Bill introduces a broad definition of potential misconduct that a whistleblower may disclose information about, so as to qualify for protection. This includes where a whistleblower has reasonable grounds to suspect that the information concerns misconduct or an "improper state of affairs or circumstances" in relation to a regulated entity. However, as above, the Senate amendments now introduce a carve-out of "personal work-related grievances" from protected disclosures.
Are public interest disclosures protected? A whistleblower may also be able to make a protected emergency disclosure or a protected public interest disclosure in certain circumstances to a journalist or parliamentarian.
Claims for compensation A whistleblower will be able to claim compensation for detriment suffered as a result of victimisation. Pursuant to the amendments, where the victimisation is committed by an individual, a body corporate will be liable for the compensation if it failed to fulfil a duty to prevent the offending conduct from occurring. Also, a reverse onus of proof will apply in respect of the reasons for the offending conduct. Once the other required elements are established by the claimant, the person against whom the claim is made will bear the onus of proving that the protected disclosure was not the reason, or part of the reason, for the detrimental conduct.
Maximum penalties

The Whistleblower Bill and a related Bill concerning penalties will substantially increase both the criminal and civil penalties that apply for breach of relevant provisions. The most substantial increases relate to the civil penalties for breach of confidentiality of a whistleblower's identity, and victimisation. Subject to passage of both Bills, a person found to have contravened these provisions may face civil penalties of up to:

  • for an individual, 5,000 penalty units ($1,050,000 as at January 2019) or three times the benefit derived or detriment avoided;
  • for a body corporate, 50,000 penalty units ($10,500,000 as at January 2019) or three times the benefit derived or detriment avoided, or 10% of the body's corporate's annual turnover (up to one million penalty units, which is $210,000,000 as at January 2019).

Note: The above points relate to the whistleblower regime in the Corporations Act 2001 (Cth), which will be reformed and expanded by the Whistleblower Bill. The same Bill will also introduce a similar whistleblower regime under the Taxation Administration Act 1953 (Cth), and some (but not all) of these points are equally applicable to the new taxation whistleblower regime.

What's next?

The Whistleblower Bill is now before the House of Representatives, which is due to sit on 12 February 2019. While we anticipate that the issue of whistleblower protections reforms will be an agenda item for the Commonwealth Government this year, the upcoming Federal election in 2019 may have an impact on its progress.

5. BANKING ROYAL COMMISSION, BEAR AND REMUNERATION

As the fallout from the Royal Commission into the Banking and Insurance Industry continues, executive remuneration and reward structures will be subject to increasing scrutiny. Commissioner Hayne will deliver his final report by 1 February 2019, and his recommendations should be closely considered.

On 1 July 2018, the Treasury Laws Amendment (Banking Executive Accountability and Related Measures) Act 2018 (Cth) commenced, introducing the Banking Executive Accountability Regime (BEAR). Through amendments to the Banking Act 1959 (Cth) (Banking Act), BEAR seeks to strengthen the banking accountability framework by introducing penalties for non-compliance by authorised deposit-taking institutions (ADIs) (effectively financial institutions) and their most senior and influential directors and executives (referred to under BEAR as "accountable persons").

For the purposes of this article, we focus on the BEAR reforms insofar as they relate to accountable persons.

An individual will be an "accountable person" if they have actual or effective senior executive responsibility for management or control of the ADI, or a significant or substantial part of the ADI or the ADI group operations. Without limiting this general definition, an accountable person of an ADI is also defined by reference to their responsibilities, which relate to responsibilities for oversight of the ADI as a member of the Board of the ADI as well as senior executive responsibility for various resources, functions and arrangements.

Amongst other things, the BEAR reforms impose a statutory obligation on an ADI (including in respect of its subsidiaries) to defer a proportion of an accountable person's variable remuneration granted on or after 1 January 2019 (or, for payments made under existing contracts, on or after 1 January 2020) for a minimum of four years or a shorter period if approved by Australian Prudential Regulatory Authority (APRA). The amount of an accountable person's variable income which is to be deferred depends on, amongst other things, the accountable person's role and the size of the ADI.

If an accountable person breaches their obligations under BEAR, the ADI is obliged to withhold all or part of their variable remuneration that has been deferred.

Accountable persons are obliged under BEAR to conduct the responsibilities of their position as an accountable person:

  • by acting with honesty and integrity and with due skill, care and diligence;
  • by dealing with the APRA in an open, constructive and cooperative way; and
  • by taking reasonable steps in conducting those responsibilities to prevent matters from arising that would adversely affect the prudential standing or reputation of the ADI.

The BEAR reforms also confer powers on APRA to disqualify an accountable person for breaching their obligations under BEAR for a period that APRA considers appropriate. APRA's decisions to disqualify accountable persons, including to vary or revoke a disqualification, are subject to a merits review by the Administrative Appeals Tribunal under Part VI of the Banking Act.

What is clear is that the obligations on accountable persons are cast in very general terms, and these terms will commonly be applied by APRA with the benefit of hindsight. So, it will be important for accountable persons to be able to demonstrate the steps they took to discharge their personal obligations.

6. #METOO AND NDAS

The focus on workplace harassment generated by the #MeToo campaign will continue into 2019, in large part driven by the Australian Human Rights Commission's National Inquiry into Sexual Harassment in Australian Workplaces.

The Inquiry is the first of its kind globally. The Inquiry is currently in the public consultation stage, inviting public submissions until 28 February 2019. As part of the public consultation and call for submissions, the AHRC is calling for employers to give a limited waiver of confidentiality obligations in non-disclosure agreements (NDAs) for the purpose of allowing individuals affected by sexual harassment to make a confidential submission to the Inquiry. At the time of writing, various large employers have issued a limited waiver, including ANZ, BHP, the Commonwealth Bank of Australia, the NSW Government Sector, Rio Tinto and Telstra.

The use of non-disclosure agreements preventing employees from speaking out about past harassment is also a particular area of focus in the UK. NDAs, often in the form of a confidentiality clause in a settlement agreement (deed of release), are a common feature of resolving employment disputes in both Australia and the UK. In November 2018, the UK Parliament's Women and Equalities Committee initiated an inquiry into NDAs in harassment and discrimination cases. The inquiry will look into the use of NDAs in circumstances where any form of harassment or discrimination is alleged. The committee is seeking opinions on whether the use of NDAs should be banned or restricted and what safeguards should be put in place to prevent them being used unethically. The UK Government's response, which is expected in 2019, might impact how NDAs can be used in the future.

It remains to be seen whether the AHRC Inquiry will also make recommendations about the use of NDAs in Australia in this context.

7. FIVE YEARLY NATIONAL REVIEW OF MODEL WHS LAWS

During 2018, SafeWork Australia appointed Marie Boland, former Executive Director of SafeWork SA, to conduct a review of the operation of the model WHS laws. The review has now been completed and Ms Boland provided her report to WHS Ministers in December 2018. Ministers will confirm in 2019 whether Ms Boland's report will be publicly released. The Commonwealth, and each State and Territory Government, will need to consider whether any recommendations in the report will be adopted as changes to the model laws as a consequence.

As part of the review, Ms Boland published a discussion paper calling for written submissions. Public consultations were also held over eight weeks. A consultation summary paper flagged several issues which emerged during the consultation process.

The summary paper noted:

  • a prevalent view that the model WHS laws are operating effectively;
  • concern regarding the length and complexity of the model Codes of Practice;
  • perception that the model WHS laws do not sufficiently focus on psychological health;
  • the extent to which cost dictates what is "reasonably practicable" in the context of duties of care;
  • consistent feedback that neither the duty of PCBUs to consult with other PCBUs holding a concurrent duty nor the duty to consult with workers were clearly understood or enforced; and
  • lack of consistency in the application and interpretation of the model laws within and across jurisdictions and the importance of authoritative regulatory decision-making.

The summary paper identified that there was a tension between smaller and larger businesses when considering the operation, benefits and disadvantages of the model laws. For example:

  • smaller businesses desire more clear guidance on how to comply with duties whereas larger businesses prefer the flexibility of the principles based approach adopted by the current framework;
  • smaller businesses and government found the question of who is an officer to be problematic for them, whereas larger businesses reported the duties framework as having the effect of driving safety from the top of an organisation; and
  • small businesses viewed the Health and Safety Representative framework as impractical.

An offence of industrial manslaughter was also the subject of some discussion.

Publicly, when commenting on her report, Ms Boland described her review as having three key themes with possible recommendations in these areas;

  • consistency (being linked to the application, interpretation and enforcement of the laws);
  • clarity (to address the concerns raised by small business); and
  • consequence (being linked to the deterrent aspects of the laws, such as penalties, sentencing, insurance products and the appropriateness of an industrial manslaughter offence).

8. COMPLIANCE WITH THE MODERN SLAVERY ACTS

There are now two modern slavery regimes in Australia: a Commonwealth and NSW scheme, both of which require reporting by employers.

The Modern Slavery Act 2018 (Cth) came into full effect on 1 January 2019 and the Modern Slavery Act 2018 (NSW) is expected to fully commence on 1 July 2019 following the appointment of Professor Jennifer Burn as the Interim Anti-Slavery Commissioner NSW on 21 December 2018.

The primary operative provisions of the NSW Act will not apply to a commercial organisation if it is subject to obligations under a law of the Commonwealth that is prescribed as a corresponding law, so it is likely that only the Commonwealth Act will apply to most commercial organisations.

Entities falling within the scope of either Modern Slavery Act should review existing policies to monitor and combat modern slavery and conduct audits on suppliers and supply contractors to identify and mitigate any modern slavery risks prior to the first reporting deadline.

Under the Commonwealth Act, reporting entities must provide their first Modern Slavery Statement within six months after the end of the entity's first 12-month reporting period, which can be its usual financial year, starting after 1 January 2019. Most reporting entities are expected to release their first statements in 2020. The date for NSW reporting is yet to be released, pursuant to regulations.

The Commonwealth Act establishes requirements on certain entities carrying on business in Australia that have an annual consolidated revenue of more than $100 million, including to report on their actions taken to investigate and prevent modern slavery in their Australian operations and global supply chains.

"Modern slavery" includes all forms of trafficking in persons, slavery and slavery-like practices, including servitude, forced labour, child labour and instances of deceptive recruitment for labour and services (including where such conduct occurs overseas).

Reports must be published for each financial year and will be made publicly available on a register maintained by the Minister for Home Affairs. Reports must contain information about:

  • the structure, operations and supply chains of the reporting entity;
  • risks of modern slavery practices in the operations and supply chain of the reporting entity and any entities that the reporting entity owns or controls;
  • actions taken by the reporting entity to assess and address those risks (including due diligence and remediation processes);
  • the reporting entity's method of assessing the effectiveness of such actions;
  • the process of consultation with any entities that the reporting entity owns or controls; and
  • any other information the reporting entity considers relevant.

There are currently no penalties for failure to comply with the reporting obligations or for providing a false or misleading report, and the Commonwealth Act expressly does not permit any Rules made by the Minister to create an offence or civil penalty. However, as a deterrent measure, the Minister may publish details of any non-compliance on the public register, which may negatively impact the entity's reputation and goodwill.

The NSW Act generally applies to entities with an annual turnover of $50 million or more that have employees in NSW, however entities with over $100 million would likely be covered by the Commonwealth Act. Unlike under the Commonwealth Act, under the NSW Act, entities may be fined up to $1.1 million for non-compliance with reporting obligations.

LABOUR HIRE LICENSING

In 2018, regulation of the labour hire industry continued to be a dynamic area, and further substantial developments in this space in 2019 are a real possibility.

The Queensland licensing scheme became operational mid-2018, while in Victoria the Labour Hire Licensing Act 2018 (Vic) and supporting regulations were enacted (see our Employment Alert). The Victorian licensing scheme should commence operation in 2019. In August 2018, the ACT Government announced its intention to introduce a licensing scheme in the ACT. The Opposition (ALP) in NSW has indicated it would introduce a licensing scheme if it were elected in the upcoming State election.

In contrast, as expected following a change in State government in South Australia, a bill to repeal the Labour Hire Licencing Act 2017 (SA) was introduced into the South Australian Parliament on 28 November 2018. This decision came in response to numerous written submissions from industry representative groups and small businesses who were concerned by the scheme and its impact on businesses to which it was not intended to apply.

Concerns regarding the scope of the proposed labour hire licensing regime in South Australia have been reflected in Queensland, where the scope of the enabling legislation is very broad and captures many businesses not traditionally considered to provide labour hire. The scope of the regime has caused uncertainty and disputes between "providers" and recipients of those services in relation to whether some entities are required to be licensed. The regime also imposes a significant administrative burden particularly on large providers, with frequent reporting requirements and annual licence renewals reducing certainty for businesses.

FWC'S NEW DISCRETION TO APPROVE ENTERPRISE AGREEMENTS

Many employers have been discouraged from engaging in enterprise bargaining because of the rigid rules that apply to enterprise agreement approvals. The Federal Government has responded to this concern by introducing the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 2018 (Cth) (the Amendment Act), which came into effect on 12 December 2018.

The Amendment Act (amongst other things) amends the FW Act to include a new subsection that provides that an enterprise agreement will also have been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that the enterprise agreement would have been genuinely agreed to but for any minor procedural or technical errors made in relation to:

  • pre-approval steps such as the provision of materials to employees during the access period and the explanation of the terms and effect of the enterprise agreement (paragraph 188(1)(a) or (b)); or
  • the Notice of Employee Representational Rights (NERR).

To find that employees have genuinely agreed, the FWC must be satisfied that the employees covered by the agreement were not likely to have been disadvantaged by the errors. These provisions will hopefully overcome any procedural deficiencies as illustrated by the Uniline Australia Limited [2016] FWCFB 4969 (see our Employment Alert) and SDAEA v ALDI Foods Pty Ltd [2016] FCAFC 161 (see our Employment Alert).

The Explanatory Memorandum provides the following examples of "minor procedural or technical errors":

  • employees being informed of the time and place for voting on the proposed enterprise agreement or the voting method that will be used for the agreement just after the start of the access period rather than by the start of the access period;
  • employees being requested to approve a proposed enterprise agreement on the 21st day after the last Notice was given, rather than at least 21 days after the day on which the last Notice was given; and
  • changes to the NERR that have no relevant effect on the information being communicated (for example, inclusion of the employer's letterhead or additional materials or reference to a particular contact person rather than "contact your employer").

The new subsection will apply to:

  • applications to approve enterprise agreements that are made to the FWC on or after the date that the amendments commence;
  • applications to approve enterprise agreements that were made to the FWC before the date that the amendments commence and that have not yet been determined by the FWC; and
  • a limited range of appeals against FWC decisions to approve or refuse to approve enterprise agreements that were made before the date that the amendments commence.
NES GUARANTEED FAMILY AND DOMESTIC VIOLENCE LEAVE ENTITLEMENTS

The Fair Work Amendment (Family and Domestic Violence Leave) Act 2018 (Cth), which commenced on 12 December 2018, amends the National Employment Standards to provide national system employees with up to 5 days' of unpaid family and domestic violence leave in a 12 month period. This entitlement mirrors the entitlement that was introduced in all modern awards on 1 August 2018.

The definition of "family and domestic violence" under the NES and modern awards is broader than physical harm and means violent, threatening or other abusive behaviour by a close relative of an employee (being an immediate family member, or related according to Aboriginal or Torres Strait Islander kinship rules) that seeks to coerce or control the employee and that causes them harm or to be fearful.

The unpaid leave entitlement:

  • may be taken in a single continuous period or in separate periods;
  • is available in full at the start of each 12 month period of employment;
  • is available in full, part-time, casual and fixed-term/fixed-task employees; and
  • does not accumulate from year to year.

Employers should be mindful of their confidentiality obligations in relation to the information provided by an employee for the purposes of accessing family and domestic violence leave. For example, employers should consider how this leave is referred to in the payroll system and who an employee needs to notify to take this leave.

MODERN AWARD REVIEW

In late 2018 a number of important changes were made to a number of modern awards as part of the FWC's four yearly modern award review, including the implementation of model terms relating to family friendly work arrangements and termination payments.

Family friendly work arrangements

On 1 December 2018, the model clause on requests for flexible working arrangements finalised by the Full Bench of the FWC in its November 2018 decision came into effect. The clause has been inserted into all modern awards and is intended to respond to what the Full Bench of the FWC described as "a significant unmet employee need for flexible working arrangements."

The clause applies where an employee has made a request for a change in working arrangements. Under the provision, employers are required to discuss the request with the employee and make a genuine attempt to reach an agreement which reasonably accommodates the employee's circumstances.

It also sets out what an employer's written response to a request must include if an employer refuses the request or if a different change in working arrangements is agreed. 

Payment on termination of employment

On 1 November 2018 a model clause regarding payment on termination of employment took effect in 89 modern awards. The FWC set out the final model clause in its July 2018 decision and noted that previously, modern awards lacked uniformity in dealing with termination payments and the majority of awards failed to specify a time period in which payments due to an employee at the time of termination were required to be paid.

Where the model clause applies to a departing employee, employers are required to pay to the employee no later than seven days after the day on which their employment terminates:

  • the employee's wages under the relevant award for any complete or incomplete pay period up to the end of the day of termination; and
  • all other amounts that are due to the employee under this award and the NES.

The clause also provides that the requirement to pay wages and other amounts is subject to further order of the FWC and the employer making deductions authorised by the relevant award or the FW Act.

Removal of further four yearly modern award reviews

The commencement of the Fair Work Amendment (Repeal of 4 Yearly Reviews and Other Measures) Act 2018 (Amendment Act) has removed the requirement for the FWC to review modern awards every four years. However, the Amendment Act includes transitional arrangements so that a review of a modern award that commenced before 1 January 2018 (as part of the current four yearly review process) but was not completed by that date can be finalised. The FWC retains the power to make, vary or revoke modern awards.

The Government has estimated that the abolition of the reviews will save employers and unions about $87 million over the next 10 years. 

RECENT CHANGES TO THE VICTORIAN LONG SERVICE LEAVE ENTITLEMENTS

The Long Service Leave Act 2018 (Vic) commenced operation on 1 November 2018, bringing with it a number of changes to the Victorian long service leave regime.

Employers with employees covered by the 2018 LSL Act should review their policies and payroll systems to ensure that long service leave entitlements are correctly administered.

While the 2018 LSL Act does not amend the rate at which long service leave accrues, it introduces a number of key changes including:

  • Earlier accrual of long service leave entitlements: Employees are now entitled to take long service leave after completing seven years' of continuous service. Previously, an employee's entitlement to take long service leave only arose after completing 10 years' of service.
  • Greater flexibility in long service leave periods: Previously, employees were required to take their long service leave in one period unless the employer and employee agreed that the leave could be taken in up to three separate periods. Now, an employee can take multiple periods of long service leave and is entitled to request long service leave for a period of not less than one day, which must be granted unless the employer has reasonable business grounds to refuse the request.
  • Continuous employment in the case of unpaid parental leave: Previously, any period of unpaid parental leave would not count towards calculating an employee's period of continuous employment. Now, up to 52 weeks' unpaid parental leave will count towards an employee's continuous employment. While unpaid parental leave in excess of 52 weeks will not count towards the length of an employee's continuous employment for the purpose of calculating the leave entitlement, it will not break an employee's continuity of employment.
  • Payment in lieu of long service leave: A payment in lieu of long service leave is now expressly permitted if it is provided for under an enterprise agreement or relevant Fair Work instrument.
  • Penalties and enforcement: Penalties for a body corporate for failure to pay long service leave have been increased threefold to a maximum of 60 penalty units ($9,671.40 as at January 2019). Criminal penalties, rather than civil penalties, will now apply for taking adverse action against an employee because they are entitled to long service leave, and for failing to disclose to an employee in writing that an employment agreement would modify or remove an employee's long service leave entitlements.
PROSECUTIONS OF INDIVIDUALS (WORKERS AND OFFICERS)

Now 5 years into the model WHS laws, it appears that regulators across Australia are increasingly prepared to pursue individuals for serious breaches of safety laws. We anticipate that this trend will continue in 2019. In 2018, we saw several prosecutions commenced involving multiple parties, including officers of those parties.

Notably, WorkSafe ACT prosecuted nine parties, including individuals, following a fatality on a Canberra construction site after a crane overturned in August 2016. It is reported that a crane exceeded its design capabilities whilst moving an 11 tonne generator and overturned causing a worker's death. The subcontractor, and the crane dogman, have been prosecuted for a reckless conduct (category 1) offence and the subcontractors' managing director has been prosecuted for failing to comply with a duty, causing death (category 2 offence). The site's principal contractor, its site manager, site supervisor and safety officer and its chief executive officer have also been charged with a category 2 offence.

The crane dogman faces a maximum penalty of $300,000 and/or a five year jail sentence. The other workers, charged with category 2 offences, face a maximum penalty of $150,000. The maximum penalty for an officer charged with a category 2 offence is $600,000 and/or a five year jail sentence. The corporations are exposed to a penalty up to $3 million (in the case of the subcontractor) and $1.5 million (in the case of the site's principal contractor).

While individuals have been prosecuted for category one offences in other jurisdictions under harmonised laws, these prosecutions are significant for the number of parties prosecuted and the nature of the parties prosecuted. This is one of the first prosecutions of an officer of a large Australian corporation under the model WHS laws and if defended, any decision is likely to provide guidance on the scope of an officer's duty.

Under the Occupational Health and Safety Act 2004 (Vic) (which is not a model WHS law statute) a self-employed owner of a scrap metal business was sentenced to a six month jail term after pleading guilty to breach of the duty of a self-employed person not to expose other persons to risks arising from the undertaking of the self-employed person. This appears to be the first time under any Australian WHS law that an individual has received a (non-suspended) custodial sentence for breach of a WHS duty. In addition to a trend of regulators to prosecute individuals, this reinforces the substantial outcomes that can result for individuals and that courts appear prepared to issue.

INDUSTRIAL MANSLAUGHTER

There continues to be much attention and discussion around the Queensland industrial manslaughter laws (see our Safety Matters Alert). Specifically, these laws contain an offence for a person conducting a business or undertaking, including a senior officer, to negligently cause the death of a worker. The laws, which first came into effect in October 2017, are contained in the Queensland Work Health and Safety Act 2011Electrical Safety Act 2002, and Safety in Recreational Water Activities Act 2011.

Queensland and the Australian Capital Territory remain the only jurisdictions to have implemented industrial manslaughter offences to date.

In particular, the offence applies if:

  • a worker dies, or is injured and later dies, in the course of carrying out work for the business or undertaking (including during a work break); and
  • the PCBU’s, or senior officer’s, conduct causes the death of the worker (i.e. the action or inaction of the PCBU, or senior officer, substantially contributes to the death); and
  • the PCBU, or senior officer, is negligent about causing the death of the worker (i.e. the person’s action or inaction departs so far from the standard of care required).

A maximum penalty of 20 years imprisonment for an individual, or a $10 million penalty for a body corporate, can be imposed. The reference to 'senior officer' is, as a result of amendments in July 2018, intended to capture individuals at the highest levels of the organisation, who create or influence safety management and culture. These include an executive officer of a corporation or, in a non-corporation, someone holding an executive position or taking part in making decisions affecting all, or a substantial part, of a business function.

At its National Conference, the ALP passed a resolution to work with Safe Work Australia to introduce industrial manslaughter laws into the WHS model legislation during its first year of government, if the ALP wins this year's Federal election.

HEAVY VEHICLE NATIONAL LAW

Significant amendments to the Heavy Vehicle National Law commenced on 1 October 2018. The amendments reformulate the obligations of a party in the chain of responsibility as an overarching, positive duty of care, consistent with the duty of care approach adopted in other safety laws, such as the model WHS laws.

The regime of deemed liability for parties in the chain of responsibility has been replaced with a primary duty to ensure, so far as it reasonably practicable, the safety of the party's transport activities relating to the vehicle.

This primary duty creates an obligation where none previously existed under the HVNL. In practical terms, this primary duty represents an obligation to eliminate or minimise potential harm or loss by doing all that is reasonably practicable to ensure safety. As with the model WHS laws, there are three categories of breaches, outlined below. There are also personal duties imposed on officers, which is a significant development.

Category Breach Maximum Penalty
Breach of duty creating risk of death or serious injury or illness (reckless) s 26F HVNL

The person:

  • has a duty under s 26C;
  • without reasonable excuse, engages in conduct related to the duty that exposes an individual to a risk of death or serious injury or illness; and
  • is reckless as to the risk.
Individual: $300,000 fine or 5 years imprisonment, or both.

Corporation: $3,000,000 fine.
Breach of duty creating risk of death or serious injury or illness s 26G HVNL

The person:

  • has a duty under s 26C;
  • contravenes the duty;
  • the contravention exposes an individual, or class of individuals, to a risk of death or serious injury or illness.
Individual: $150,000 fine.

Corporation: $1,500,000 fine.
Other breach of duty s 26H HVNL

The person:

  • has a duty under s 26C; and
  • contravenes the duty.
Individual: $50,000 fine.

Corporation: $500,000 fine.

The definition of 'reasonably practicable' mirrors the model WHS laws. Previous iterations of the HVNL provided guidance about matters courts could consider in assessing whether a party had taken reasonable steps. The shift to duties-based offences and the change in the onus of proof will require a different assessment. The National Heavy Vehicle Regulator suggests that employers consult relevant Codes of Practice for further guidance about the meaning of 'reasonably practicable'.

The amendments also introduced a compulsory information and evidence power to support the investigation of the new safety duty offences. An immunity clause exists for individuals compelled to give information under this section, but the immunity does not extend to companies.

Enforceable undertakings were also introduced as an alternative to prosecution (except for Category 1 offences) where the offender can demonstrate an ability to undertake organisational reform and implement effective safety measures to the National Heavy Vehicle Regulator.

HUMAN RIGHTS BILL 2018 (QLD)

The Queensland Parliament introduced the Human Rights Bill 2018 (Qld) on 31 October 2018. If passed, it will create new requirements for Queensland legislation and public entities to operate in a manner consistent with human rights.

The Queensland approach is modelled on similar legislative approaches to human rights, such as the Charter of Human Rights and Responsibilities Act 2006 (Vic) and the Human Rights Act 2004 (ACT).

The Bill sets out a complaint mechanism to the newly renamed Queensland Human Rights Commission (currently known as the Anti-Discrimination Commission Queensland) in relation to acts or decisions of public entities that are not compatible with human rights or fail to give them proper consideration.

The Bill is designed to ensure the Queensland public sector acts and makes decisions in a way that is consistent with human rights. To achieve this purpose, obligations will be placed on the Queensland Parliament, Queensland Government, and all entities making decisions in a public capacity.

The most noticeable impact of the proposed regime will likely be on the interpretation of legislation. The Bill requires that all legislation in Queensland be interpreted in a way that is compatible with human rights, to the extent that it is possible. Accordingly, in interpreting a statute to give effect to human rights, courts may consider international law and the judgments of domestic, foreign and international courts and tribunals relevant to a human right. As the judiciary may be required to interpret legislation in accordance with these provisions which may differ from the general rules of statutory interpretation, this may create some uncertainty in the way legislation will be interpreted and applied in the future.

Other than making an complaint to the QHRC, an individual cannot separately litigate in a court or tribunal a human rights complaint unless they already have an independent cause of action (for example, a case for judicial review). It is therefore not anticipated the Bill will cause a dramatic increase in litigation focussed solely on human rights concerns if it is passed.

PROPOSED RELIGIOUS DISCRIMINATION BILL (CTH)

On 13 December 2018, the Federal Government released its Response to the Religious Freedom Review. This includes a proposed Religious Discrimination Bill 'to provide comprehensive protection against discrimination based on religious belief or activity', with exemptions for religious bodies, educational institutions and charities.

PROPOSED AMENDMENTS TO AHRC REGULATIONS

In October 2018, the Office of the Attorney-General of Australia issued a media release foreshadowing amendment to the Australian Human Rights Commission Regulations 1989 (Cth) The amendments will clarify that, although employers can discriminate on the basis of a "relevant criminal record" when considering whether to hire an applicant, it is not permissible to discriminate against convictions that are "irrelevant" to the role in a recruitment process.

This is a departure from the current approach, which makes it unlawful for an employer to discriminate against an individual on the grounds of any criminal record other than discrimination based on criminal records that relate to the inherent requirements of the role. 

It is unclear when this amendment will take effect, but it will likely form part of a broader review of amendments to the AHRC Regulations, given that the AHRC Regulations are due to sunset on 1 October 2019.

PROPOSED REFORMS REGARDING EMPLOYEE ENTITLEMENTS IN THE INSOLVENCY CONTEXT

The Corporations Amendment (Strengthening Protections for Employee Entitlements) Bill 2018 is currently before the Senate for consideration. The Bill proposes to amend Part 5.8A of the Corporations Act 2001 (Cth) and the Fair Entitlements Guarantee regime with the key aim of deterring companies and their officers from entering into transactions, corporate restructures or illegal phoenixing activity in order to avoid or significantly reduce the ability of the company to pay employee entitlements upon insolvency.

If the Bill is enacted, it will introduce a number of amendments, including:

  • extension of the existing criminal offence for intentionally entering into a transaction that will or is likely to significantly impact the recovery of employee entitlements upon insolvency to include transactions entered into recklessly
  • a new civil penalty provision for transactions entered into after appointment of a liquidator where the party entering into the transaction knows, or a reasonable person ought to know, that the transaction would avoid or substantially reduce recovery of employee entitlements, except where the transaction in entered into pursuant to a court approved agreement or Deed of Company Arrangement
  • the criminal offence and civil penalty provision above will also apply to company directors who cause the company to enter into a contravening transaction
  • a new civil compensation provision which makes individuals in contravention of the civil penalty provision above personally liable to pay compensation to employees who have suffered loss or damage as a result of the contravention
  • a provision which grants standing to the Australian Taxation Office, the Fair Work Ombudsman and the Secretary of the Department of Jobs and Small Business to commence civil compensation proceedings to recover unpaid employee entitlements
  • a new Contribution Order mechanism that enables contributions to be sought from certain related entities for the payment of outstanding employee entitlements upon insolvency where the relevant entity has benefitted directly or indirectly from the labour of the relevant employees; and
  • a new power for the court or Australian Securities and Investments Commission to disqualify a person (company directors and other officers) from managing corporations if the person has been involved in corporate contraventions or circumstances where the FEG scheme has been inappropriately relied on to pay employee entitlements in the past seven years, commencing up to five years before commencement of this provision.

The new civil and criminal penalties can also apply to third parties who intentionally participate in a transaction that impacts a company's payment of employee entitlements and in circumstances where the company itself was not a party to any contravening transaction. 

SIGNIFICANT CHANGES TO SINGAPORE'S EMPLOYMENT ACT

From 1 April 2019 Singapore's primary employment legislation, the Employment Act (Cap. 91) will be expanded to cover all private sector employees in Singapore. This includes foreign employees (such as those holding an S-Pass or an Employment Pass), and highly paid executives, whether local or expatriate. As a result of this expansion, and other amendments to the legislation:

  • all private sector employees will have unfair dismissal protection. Unlike the Fair Work Act in Australia, the Employment Act will not have an unfair dismissal carve-out for high income earners. This means that all employees (including highly-paid senior executives) will have the right to seek reinstatement or compensation in the event of a dismissal
  • unfair dismissal matters will now be heard by the Employment Claims Tribunal (ECT), which already hears disputes regarding salary and other matters. While called a "Tribunal" the ECT is actually part of the Singapore court system, and will have the power to make binding decisions regarding not only unfair dismissal, but also payment of statutory and contractual benefits. This is in contrast with the Fair Work Commission in Australia, whose power to order the making of payments is more limited. The ECT is more strict regarding legal representation than the Fair Work Commission – external legal representation is not permitted under any circumstances
  • all employees will have the statutory right to "buy out" their notice period. That is, an employee can bring his or her employment to an immediate end through a payment in lieu of the notice period (in case of resignation or termination by the employer). The ability of an employee (or the employee's future employer) to do so means that the utility of longer notice periods and garden leave to protect the interests of the original employer may be reduced. Employers may need to rely more heavily on post-employment restraints
  • all employees will enjoy statutory rights to paid leave, including both annual leave and sick leave, for the first time. Statutory annual leave was previously available only to lower paid employees, covered by Part IV of the Employment Act, but has now been extended to all employees. Most employers already provide annual leave in excess of the minimum statutory entitlement, however the entitlement to 60 days' paid hospitalisation leave will be new for many
  • significantly, female employees (including expatriates) will also be entitled to 12 weeks' statutory maternity leave under the Employment Act, with the first eight weeks being paid leave. An employee need only have worked for three months before becoming entitled to this leave. The parents of Singapore citizen children will continue to be entitled to more generous leave under the separate Child Development Co-Savings Act (Cap. 38A). No changes have been made to that legislation, meaning statutory paternity leave remains available only for the fathers of Singapore citizen children
  • statutory rules regarding suspension will apply. An employer who is investigating misconduct, where summary dismissal is the outcome, may suspend for one week on half pay. Any further suspension must be approved by the Commissioner of Labour; and
  • finally, statutory requirements regarding the payment of termination benefits will apply to all employees. An employer will be required to pay all salary and other sums due to an employee who is being dismissed, on the day of dismissal or within three days of the dismissal (not counting rest days and public holidays). Failure to do so may constitute an offence, so forward planning by employers will be required.
BREXIT

Over two years after the referendum there are still many unknowns about how Brexit will affect the UK or Europe. The domestic political fallout from Brexit continues, and the terms of the UK's exit are far from certain. However in our view it remains unlikely that there will be immediate or profound changes to UK employment law as a result of Brexit.

There is little political will to remove the protections that European law provides for workers, many of which were "gold plated" when introduced into UK law. There may be some medium to long term changes depending on the economic and political climate in the UK, but we would not expect any government to turn its attention to these until the dust has settled on the economic terms of the UK's exit. 

The more pressing concern arising out of Brexit for employers will be immigration. New systems and procedures for establishing the status of UK-resident Europeans are still being determined, but it is likely that there will be an increased compliance burden on employers. Employers may also find themselves affected by future, more restrictive, policies on immigration of European nationals.

You can read more about Brexit, and keep up to date with the latest developments, at Ashurst's Brexit Hub.

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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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