Fwd: Thinking - Employment and workforce issues in Australia: What are your top workplace priorities for 2015?

What you need to know

The year 2015 has the potential to be yet another big year for employers in Australia. Now is the time to start thinking strategically about the year ahead and planning so that you can achieve your desired workplace outcomes.

There will be a number of developments during 2015 that may affect your organisation’s planning, including the Productivity Commission’s inquiry into the performance of the workplace relations framework; the Government’s attempts to secure passage of various employment related legislation through Parliament; the progression of several reviews and inquiries; and the completion of the first four yearly review of all modern awards.

The start of the year is also an opportunity to consider the implications of key decisions of the High Court and the Fair Work Commission for your employment related policies, processes and practices.

What you need to do

Use our summary of potential issues to assist in identifying your top workplace priorities for 2015 and put in place a plan to achieve them.

We hope you find this edition useful.

Productivity Commission inquiry into Australia’s workplace relations framework

In December 2014 the Government released the long-awaited terms of reference for the Productivity Commission’s inquiry into the workplace relations framework.

The terms of reference require the Productivity Commission to assess the performance of the workplace relations framework and its impact on matters such as unemployment, underemployment, job creation, productivity, competitiveness and business investment, the ability for employers to flexibly manage and engage with their employees, barriers to bargaining, and industrial conflict.

The review also encompasses the Fair Work Act 2009, including the institutions and instruments that operate under the FW Act, and the Independent Contractors Act 2006. The review will make recommendations about how the laws can be improved considering the need to ensure workers are protected, the need for business to be able to grow, prosper and employ, and the need to reduce unnecessary and excessive regulation.

The Commission will undertake a public consultation process including holding hearings, inviting public submissions and releasing a draft report in June/July. The final report is due in November 2015.

Employers should review the Productivity Commission’s issues paper, scheduled for release in January 2015, and consider whether and how to respond to the issues paper. Initial submissions are due by Friday 13 March 2015. More information can be found on the Productivity Commission’s website.

Fate of the Government’s proposed employment legislation to be determined

Currently several key pieces of employment related legislation face an uncertain fate. We set out an overview of this legislation below.

Fair Work Amendment Bill 2014

August 2014 witnessed the passage of the Fair Work Amendment Bill 2014 through the House of Representatives and its introduction into the Senate.

The Bill currently proposes to change the union right of entry provisions so that unions will only be allowed to access workplaces for discussions with employees whose industrial interests the union is entitled to represent and who wish to participate if:

• the union is covered by an enterprise agreement that applies to work performed on the premises; or, if not
• a member or prospective member of the union who performs work on the premises invites the union to send a representative to the premises for the purpose of holding those discussions.

The Bill also contains changes to the greenfield agreement bargaining provisions which, if enacted, will:

• allow employers to only have to negotiate with a union that will cover the majority of employees;
• introduce good faith bargaining obligations;
• require the agreement to be reached within three months from the start of the bargaining; and
• give the FWC powers to make and approve an agreement after the 3 month period expires as long as it provides “fair working conditions that are consistent with prevailing industry standards”.

Fair Work Amendment
(Bargaining Processes) Bill 2014

In December 2014 the Government introduced the Fair Work Amendment (Bargaining Processes) Bill 2014 into Parliament which, if enacted, will increase regulation of the enterprise bargaining process.

The Bill contains a new criterion to be applied by the FWC in considering whether to approve an enterprise agreement, namely that improvements to productivity at the workplace were discussed during bargaining for the agreement. It remains to be seen what steps will need to be taken to demonstrate compliance with this requirement and whether it would amount to anything more than a “box ticking” exercise.

In addition, the Bill alters and adds to the matters which the FWC must consider when deciding whether to make a protected action ballot order. In particular:

• When considering whether the applicant for a protected action ballot order is genuinely trying to reach agreement, the FWC would be required to have regard to all relevant circumstances including:
  • the steps taken by each applicant to try to reach an agreement;
  • the extent to which each applicant has communicated its claims in relation to the agreement;
  • whether each applicant has provided a considered response to proposals made by the employer; and
  • the extent to which bargaining for the agreement has progressed.
• The FWC would be prohibited from making a protected action ballot order if it is satisfied that a claim of an applicant, or the claims of an applicant taken as a whole:
• are manifestly excessive, having regard to the conditions at the workplace and the industry in which the employer operates; or
• would have a significant adverse impact on productivity at the workplace.

Building and Construction
(Improving Productivity) Industry Bill 2013

This Bill was introduced into Parliament in late 2013 to give effect to one of the Government’s key election promises – to re-establish the Australian Building and Construction Commission. The Bill was introduced into the Senate in February 2014 where it remains.

If passed, the Bill will re-establish the ABCC and strengthen its powers, including by restoring powers that were available to it prior to the commencement of the Fair Work (Building Industry) Act 2012. In particular, it will allow the Australian Building and Construction Commissioner to issue an examination notice to a person that the Commissioner reasonably believes has documents or information relevant to a suspected contravention by a building industry participant, or who is capable of giving evidence relevant to such an investigation. Failure to comply with an examination notice will be punishable by up to 6 months imprisonment.

The Government also intends to replace the existing Building Code 2013 with a new Code once the Bill has been passed. Advance release versions of the Code have been published by the Department of Employment. The Code would impose new obligations on building contractors and apply retrospectively to enterprise agreements made or varied after 24 April 2014.

Contractors who are currently negotiating their enterprise agreements, or are contemplating varying an enterprise agreement with their employees, should keep this in mind to ensure that the terms of those agreements are not contrary to the proposed new Code. This is particularly important because a contractor will not be eligible to obtain Commonwealth funded building work if its enterprise agreement is not compliant.

Fair Work (Registered Organisations)
Amendment Bill 2014

Last May, the Fair Work (Registered Organisations) Amendment Bill 2014 was defeated in the Senate. In June 2014, the Government re-introduced the Bill into Parliament and the House of Representatives passed the Bill shortly thereafter. The Bill is awaiting debate in the Senate.

If passed, it will create the Registered Organisations Commission to oversee and enforce new requirements on registered organisations. These will include disclosure and reporting obligations and criminal offences for serious breaches of duties by officers similar to those applicable to company directors and officers under the Corporations Act 2001. It will also confer on the ROC investigative and information gathering powers modelled on those of the Australian Securities and Investments Commission.

Fair Entitlements Guarantee Amendment
Bill 2014

The Fair Entitlements Guarantee is funded by the Commonwealth and provides a safety net for employees whose employer has become insolvent in circumstances where the employees’ entitlements cannot be recovered through other means. This scheme replaced the General Employee Entitlements and Redundancy Scheme in 2012.

The primary purpose of the Bill is to cap the maximum redundancy pay entitlement under the Act at 16 weeks. The Bill has passed the House and been introduced into the Senate.

Royal Commission into Trade Union Governance and Corruption to continue

The Royal Commission into Trade Union Governance and Corruption was established on 13 March 2014, with the Honourable Justice Dyson Heydon AC QC appointed to lead the Royal Commission. The Royal Commission’s mandate is to inquire into, among other things, the governance arrangements of separate entities established by trade unions or their officers, particularly with regard to the financial management of separate entities and the use of funds or other assets (ie “slush funds”) by such entities.

With the term of the Royal Commission now extended by 12 months, and an expansion of the terms of reference to cover a broader range of criminal or otherwise unlawful conduct, we expect that the Royal Commission hearings will focus on new matters but could also explore in greater depth issues and incidents which have already been the subject of evidence.

Consent arbitration by the FWC

Since 1 January 2014, the FWC has had the power to arbitrate general protections disputes involving dismissal. For a dispute to continue to arbitration:

• the FWC must issue a certificate stating that all reasonable attempts to resolve the dispute have been unsuccessful; and
• the parties must agree to arbitrate the dispute and notify the FWC within 14 days of the certificate being issued.

In December 2014, a Full Bench of the FWC handed down the first consent arbitration decision: Keep v Performance Automobiles Pty Ltd [2014] FWFCB 8941. The Full Bench found in favour of the employer.

Consent arbitration has various advantages and disadvantages for employers. Accordingly, employers should ensure that they seek legal advice and consider all relevant factors before deciding whether to consent to the FWC arbitrating a general protections dismissal dispute.

Developments in the FWC’s anti‑bullying jurisdiction

Anti-bullying applications

During the period from 1 January 2014, being the date on which the FWC’s new anti-bullying jurisdiction commenced, to 30 September 2014, the FWC received 532 applications for an order to stop bullying at work. The FWC granted only one of those applications.

Does bullying on Facebook occur “at work”?

In Bowker; Combe; Zwarts v DP World Melbourne Limited; Maritime Union of Australia, The Victorian Branch and Others [2014] FWCFB 9227, a five member Full Bench of the FWC:

• rejected the applicants’ argument that conduct occurs at work if it has a substantial connection to work;
• held that the anti-bullying provisions should be regarded as remedial or beneficial. As such, any ambiguity is to be construed beneficially to give the fullest relief that a fair meaning of the language will allow;
• held that the use of the words “while the worker is at work” in section 789FD of the FW Act creates a temporal connection between the bullying conduct and when the worker is at work;
• held that the expression “at work” encompasses both the performance of work (at any time or location) and when the worker is engaged in some other activity which is authorised or permitted by their employer (such as being on a meal break or accessing social media while performing work);
• found that a worker will be at work at any time the worker performs work, regardless of his or her location or the time of day; and
• noted that the focal point of the definition is the worker (ie the applicant). The person or persons who engage in the unreasonable behaviour towards the worker need not be “at work” at the time they engage in that behaviour.

In respect of Facebook posts, the Full Bench held that the relevant question is where and when a worker accesses the post. While the worker need not be at work when the Facebook comments are made, it would suffice if the worker accessed the comments later while at work. The Full Bench acknowledged that this interpretation may give rise to arbitrary results and that a worker who only accesses comments on social media which constitute unreasonable behaviour at a time when he or she is not at work would not be able to obtain relief under the antibullying provisions.

Ultimately these matters depend on the facts of the case. Accordingly, there are a range of scenarios in which it will be unclear whether the relevant conduct has occurred at work.

It will be important for employers to seek legal advice if they have any doubt as to whether particular conduct could properly be the subject of an anti-bullying order made by the FWC.

Further, it would be prudent for employers to review their workplace anti-bullying and social media policies to determine whether to make any amendments in light of the DP World decision.

Continued focus on workplace investigations

During 2014, the FWC and Federal Court handed down many decisions, such as Fitzpatrick v Bunnings Group Ltd [2014] FWC 1869, Samantha Bolden v Lyndoch Living Inc [2014] FWC 3259 and Romero v Farstad Shipping (Indian Pacific) Pty Ltd [2014] FCAFC 177 (see our Employment Alert, dated 14 January 2015), which identified serious deficiencies in workplace investigations conducted by employers.

In particular, these decisions demonstrate the need for employers to:

• give careful and considered thought to the manner in which they investigate incidents of alleged misconduct (including who should conduct the investigation and complying with relevant HR policies);
• ensure that the investigation procedures in place are sufficiently robust;
• ensure that investigators are trained to properly identify and explore all relevant issues and to test assumptions; and
• ensure that investigators understand how to conduct a thorough investigation of each allegation, and assess whether the evidence collected does or does not substantiate each allegation to the requisite standard of proof.

In light of these decisions, employers should consider reviewing their investigation policies, procedures and protocols, and should ensure that investigators have the training necessary to equip them to conduct defensible investigations.

Changes to the composition of the FWC

The FW Act provides that FWC members cease to hold office when they reach age 65. At least five members will be required to retire during 2015. This provides the Government with the opportunity to make a significant number of appointments. There will no doubt be great interest and media attention concerning those appointments and the appointees’ respective backgrounds.

Modern award review

Status of the four yearly review of modern awards

The FWC is currently undertaking the Common issues and Award stages of the four yearly review concurrently.

The Common issues stage relates to proposals for significant variation or change common to most, if not all, modern awards. The common issues that have been identified are annual leave, award flexibility/facilitative provisions, casual employment, part-time employment, public holidays and transitional/sunsetting provisions relating to accident pay, redundancy and district allowances.

The Award stage includes identification of issues in respect of each modern award, a release of exposure drafts for comment and a decision or statement with a determination. The Award stage also includes a review of alleged NES inconsistencies and penalty rates.

Modern awards have been divided into groups for the review, as noted in the 4 Yearly Review of Modern Awards: Preliminary Jurisdictional Issues document. The FWC has progressively released exposure drafts for the Group 1 and 2 awards.

On 23 December 2014, the FWC published its decision on the review of awards in sub-groups 1A and 1B.

It is expected that the Common issues and Awards stages of the review will not be completed earlier than May 2015. The complete timetable can be accessed on the FWC’s website.

Employers who have concerns about the content of any modern award or awards covering their workforce should seek advice about the potential for bringing those issues to the attention of the FWC as part of the review process.

Review of default superannuation funds

As a consequence of the MySuper amendments to the FW Act which took effect on 1 January 2014, all modern awards now include a term permitting employers to make superannuation contributions to a default superannuation fund.

In January 2014 President Ross constituted a seven member expert panel to conduct the review of the default fund terms in all modern awards. In response to conflicts of interest of two panel members, President Ross appointed himself and another new member to the panel as replacement members.

On 6 June 2014 the Federal Court upheld a challenge by the Financial Services Council and declared that the President did not have the power to direct that he join the panel. Accordingly, the panel had not been reconstituted as required by the FW Act.

The superannuation default review cannot proceed until an appropriate expert member is appointed to the panel to replace President Ross.

Key court decisions on adverse action – where to from here?

Given the complexity of the legal issues considered in the BHP Coal Pty Ltd v CFMEU (“scab” sign) (see our Employment Alert, dated 16 October 2014) case and the recent Full Federal Court decision about the evidence and intention of the decisionmaker in State of Victoria v Grant [2014] FCAFC 184 (see our Employment Alert, dated 19 January 2015), we expect that the scope of the adverse action protections will be the subject of a great deal of disputation and litigation in future.

In addition to monitoring developments in this space, employers should:

• seek advice about whether proposed action against employees could be regarded as unlawful adverse action; and
• ensure that the reasons for all disciplinary and other decisions that could amount to adverse action are well documented.

Increased damages awards in discrimination cases

In July 2014, the Full Federal Court signalled a move away from the accepted range of general damages in discrimination claims for pain and suffering and loss of enjoyment of life. (See our Employment Alert, dated 23 July 2014 on Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82.)

This approach is likely to have a significant impact on the amount of general damages awarded in future antidiscrimination claims. It may also lead to an increase in the amount of general damages awarded in other claims, such as adverse action claims, where the applicant is able to demonstrate pain and suffering and loss of enjoyment of life.

Employers will need to consider these developments in determining their approach to managing allegations of discrimination and adverse action.

Australian Law Reform Commission’s review of workplace relations

In early 2014, the Attorney-General, Senator George Brandis QC, tasked the Australian Law Reform Commission with reviewing Commonwealth legislation to identify provisions which unreasonably encroach upon traditional rights, freedoms and privileges and determine whether any such encroachments are “appropriately justified”. The ALRC was due to report to the Attorney-General by 1 December 2014. However, this deadline has been extended to December 2015.

The ALRC has released an Issues Paper which identifies a number of freedoms of relevance to workplace law, including freedom of association and speech, and called for submissions. The closing date for submissions is 27 February 2015.

Changes to the Government’s proposed parental leave scheme

In late 2014, the Prime Minister announced that the Government would use the summer break to redesign its paid parental leave scheme. Considerations may include that the revised scheme includes additional funding for child care.

The scheme originally provided for new mothers to receive their full replacement salary for 6 months, subject to a cap of $75,000. However, last year the Prime Minister agreed to reduce the cap to $50,000 following negotiations with various Senators.

Impending changes to work health and safety legislation

During 2015 there will be changes to work health and safety legislation in New South Wales and New Zealand. It is also expected that the Western Australian Parliament will harmonise its WHS legislation.

Businesses operating in New South Wales and New Zealand will need to closely monitor these developments and, at the appropriate time, review their current safety systems to determine whether changes are required prior to the commencement of the new safety laws.

It remains to be seen whether the new Victorian Labor Government will seek to replace the Occupational Health and Safety Act 2004 and the associated regulations with harmonised WHS legislation.

Western Australia set to harmonise its WHS legislation

In October 2014, the Western Australian Government tabled the Work Health and Safety Bill 2014, known as the “Green Bill”.

The Green Bill is based heavily on the model work health and safety legislation drafted by Safe Work Australia and adopted in all Australian jurisdictions other than Victoria. Importantly, it includes the penalties prescribed by the model WHS law, including maximum fines of $3 million for corporations, $600,000 and/or 5 years imprisonment for officers and $300,000 and/or 5 years imprisonment for individuals who are not officers. These penalties are significantly higher than the penalties under the current regime.

However, the Green Bill departs from the model legislation in some areas including union right of entry, the capacity of health and safety representatives to direct the cessation of work, the period during which prosecution action must be taken, and the reverse onus of proof in discrimination matters. In addition, the Green Bill does not mention enforceable undertakings.

The Bill is open for public comment until 30 January 2015.

Mine safety legislation in New South Wales

From February 2015, the Work Health and Safety (Mines) Act 2013 and Work Health and Safety (Mines) Regulation 2014 will commence in NSW, repealing and replacing the Coal Mine Health and Safety Act 2002 and the Mine Health and Safety Act 2004. This means that there will no longer be separate mine safety legislation for coal, metalliferous and extractives mines.

The new laws will apply to all workplaces at which mining operations are carried out and to tourist mines. “Mining operations” includes mining activities such as extracting minerals, exploring for minerals and injecting minerals into the ground. Activities carried out in connection with mining activities, such as constructing a mine site, and preparing, processing, handling or storing extracted materials, are also covered by the new laws.

The new laws, like the previous mine and coal mine safety laws, focus on planning and safety management systems as a means of ensuring health and safety.

WHS harmonisation in Victoria?

The new Victorian Government has not yet stated whether it intends to harmonise Victoria’s WHS legislation. Several months before the State election, an Opposition spokesperson stated publicly that harmonisation would not be a high priority while the Abbott Government remained in power. However, Labor’s election platform adopted a more even-handed position by providing that Labor would ensure that no Victorian worker is disadvantaged as a result of any national harmonisation of occupational health and safety legislation.

Health and Safety Reform Bill set to commence in New Zealand

In March 2014, the New Zealand Government introduced the Health and Safety Reform Bill which is based on the Australian model WHS legislation. The New Zealand legislation is expected to commence operation in the second half of 2015.

Workplace training and ongoing compliance

The start of a new year is always a good time to review staff training needs and organisational compliance measures. Employers should ensure they:

• regularly train employees about appropriate workplace behaviour (at least every 18 months);
• properly train employees in conducting investigations and dealing with adverse action and other complaints in a manner which complies with internal policies, is effective, efficient and minimises legal risk; and
• understand and follow performance management practices which are likely to come under scrutiny in court or tribunal proceedings.