Legal Outlook Podcast 7 transcript

Transcript

Peter McNulty:
Hello, and welcome to the Ashurst Legal Outlook podcast. My name's Peter McNulty, and I'm a senior associate in Ashurst's employment team. In today's episode, I'm joined by my colleague, Elissa Speight, employment partner at Ashurst.

Sexual harassment in the workplace is a serious issue. It came to the fore with the Me Too movements and, more recently, a number of high profile incidents have put a real focus on sexual harassment in Australian workplaces. Amongst this discussion, the government has recently released its response to the Respect@Work report undertaken by Sex Discrimination Commissioner, Kate Jenkins, earlier this month. In this podcast, we'll be looking at some of the changes recommended by that report, the government's response to those recommendations, and what this means for employers. You are listening to Ashurst Legal Outlook.

So, Elissa, it's probably worth first exploring how the Respect@Work report came about.

Elissa Speight:
Well Peter, it all started back in June in 2018, against the backdrop of the Me Too movement. At that time, the Sex Discrimination Commissioner, Kate Jenkins, and the then Minister for Women, the Honorable Kelly O'Dwyer, announced the national inquiry into sexual harassment in Australian workplaces.

The overarching purpose of that inquiry was to improve how Australian workplaces prevent and respond to sexual harassment. A key part of the inquiry was a national survey on the prevalence, nature, and reporting of sexual harassment in Australian workplaces. But in addition to the survey, the inquiry received submissions, they conducted public consultations at round tables, and they also sought economic modeling.

The findings were quite disturbing, in terms of the prevalence of sexual harassment in Australia. In particular, 39% of women and 26% of men have experienced sexual harassment in the past five years. So that's about one in three people. The cost to the economy of sexual harassment was put at $3.5 billion per year, which includes approximately $2.6 billion in lost productivity.

So, the report made 55 recommendations on how to tackle this issue, with a full suite of measures to prevent and deal with sexual harassment. So that ranged from legislative change, to education and prevention measures. The government recently issued its response to the report. And Pete, I'll let you talk about what's been the focus of the government's response, or the roadmap as it's been called.

Peter McNulty:
And I think one of the things to say at the start about the government's response, is that the timing of the response is really interesting. The Jenkins report was released in early 2020. The government's response wasn't released until April this year. And I think it's fair to say, in that time, a lot has changed in the space of sexual harassment and how it's perceived in the public, and even with respect to the public's awareness of how serious an issue sexual harassment is in our workplace.

There was obviously, at the start of this year, a real focus in the public on very serious allegations of sexual harassment, both in the public sector and also in the private sector as well. And that's really bought the issue of sexual harassment to the front of the public's consciousness.

So in that context, the government's response has a few focuses. It's noted that the government has agreed or noted each of the 55 recommendations. It has accepted a number of those recommendations, including: the establishment of a task force, a focus on better research and data collection, the creation of education and training resources for employers and the public more generally, and the provision of better support for victims of sexual harassment as well.

Now, a large focus of the Jenkins report was on the complexity of the current legislative system in place to deal with allegations of sexual harassment. The government has acknowledged that the current system is complex, but rather than creating new systems as were recommended in the Jenkins report, in a number of respects, the government has proposed to modify existing mechanisms under the Fair Work Act, the WHS Act, the Work Health and Safety Act, and the Sex Discrimination Act, to more clearly or directly deal with sexual harassment.

So the government has agreed to extend the time limit for making sexual harassment complaints to the Human Rights Commission from 6 months to 24 months. There have been a number of amendments that have been accepted to be made to the Sex Discrimination Act to enhance protections and to plug doubts or so fix uncertainties in that scheme. The government has agreed to clarify that the Fair Work Commission's stop bullying jurisdiction does extend to allegations of sexual harassment as well. And that's in response to a recommendation of the report to create a separate stop sexual harassment jurisdiction in the Commission. So again, that's an example of the government relying on a mechanism that's already there and already in place, rather than creating a new mechanism. In addition to that stop bullying jurisdiction, there's also been a number of other amendments proposed to the Fair Work Act, and those amendments have been accepted by the government in its response.

Elissa Speight:
And I might just pick up there, Pete, and talk about the proposed amendments to the Fair Work Act in a bit more detail.

So the government's indicated that it intends to amend the Fair Work Act in two key respects. The first is by clarifying that sexual harassment can be conduct amounting to a valid reason for dismissal, when determining whether that dismissal was harsh, unjust or unreasonable. And the second proposed amendment is to amend the Fair Work regulations to include sexual harassment in the definition of serious misconduct.

So I'll just drill down into what those changes actually mean in practice for employers and, in particular, whether they'll really assist them to better deal with cases of sexual harassment in the workplace. Ultimately, the impact of the proposed amendments is really going to depend on the drafting, which we don't yet have. We can expect to see those amendments introduced before the budget, so they're fairly imminent. Ultimately, the impact will depend on the form that they take.

The first proposed amendment relates to ... which is in terms of the valid reason ... that relates to one of the factors that the Fair Work Commission considers when looking at an unfair dismissal claim by an employee. So one of the matters that the Commission considers is whether the employer had a valid reason for dismissing the employee. The proposed amendment will confirm that the fact of an employee engaging in sexual harassment will be a valid reason for dismissal. So the purpose of this is to ensure that employers are very clearly empowered to dismiss the perpetrators of sexual harassment when that's appropriate in the circumstances.

But there's a few points to note about this proposed amendment. Firstly, employers will still need to establish that the dismissal is fair in all of the circumstances. So the reason for the dismissal is only one of a range of factors that the Fair Work Commission takes into account when they're considering whether a dismissal is unfair.

Secondly, on the state of the current case law in this space, sexual harassment between employees, for example, is generally going to be accepted as a valid reason for dismissing an employee, as things currently stand. So even without the amendment. So it'll be interesting to say what impact, if any, this amendment will have on unfair dismissal claims going forward.

Although this isn't going to appear on the face of the legislation, one potential impact that may occur in practice is that the Fair Work Commission might increase the weight that's placed on the reason for the dismissal, when that's balanced against the other factors that are relevant to determining whether a dismissal was harsh, unjust, or unreasonable. And this is particularly the case, given that sexual harassment will be defined in the regulations as serious misconduct justifying summary dismissal. And that's that second amendment that I referred to earlier. So that is, it might increase the seriousness with which the Commission views that particular form of misconduct, and lower the bar in terms of the circumstances in which dismissal for sexual harassment will be found to be fair.

Peter McNulty:
I think, in taking into account that inclusion of the definition, the community's expectations with respect to how employers deal with sexual harassment also needs to be taken into account. I think, at the moment, it's very clear that public sentiment is that sexual harassment should not be accepted in workplaces in any form. And the Commission's likely to take that into account as well. I think that plays into, though, employers needing to ensure that their policies reflect that contemporaneous expectation, and employees are very clear about what that expectation is and how that impacts on them as well in the workplace.

Elissa Speight:
Thirdly ... just coming back to the proposed amendments ... what they're not going to do is change the fact that employers will still need to establish that there's a sufficient connection between the sexual harassment and the employee's employment. There's a long line of case law in this space. And we've seen the dial shift a bit in recent years, in both unfair dismissal cases, particularly in relation to social media, and also in cases under the Sex Discrimination Act. Which indicates that there's a greater willingness, on the part of the Commission and the courts, to extend the bounds of employment-related sexual harassment.

So this is a pretty tricky area involving a range of factors. And we could do a whole podcast on this topic alone, so I'm not going to go any further; other than to note that this is an area that's obviously going to be squarely in play in some of the more recently publicized cases of sexual harassment. So it's going to be really interesting to see how the case law develops here.

Peter McNulty:
There's also, I think, a natural inclination of employers, when they get allegations of sexual harassment, to naturally treat them very seriously and want to deal with them very quickly. Think the other thing employers have to remember, even with an inclusion of sexual harassment as a valid reason, is procedural fairness is going to be another factor that the Commission is still going to take into account. And employers need to ensure that those persons against whom the allegations are being made is also being given a proper opportunity to respond and that the findings are being made on the balance of probabilities. The employers still have to make sure that there is a proper basis for establishing the allegations that have been put against a particular employee.

And we've seen recently, that can be really difficult. Particularly in cases of historical sexual harassment allegations, where there may not be the contemporaneous records that there is with more recent conduct.

Elissa Speight:
So a final point to note there, is that none of this is really going to be relevant in relation to sexual harassment by senior executives because they're generally not covered by the unfair dismissal protections in any case.

So the takeaway in relation to these proposed amendments to the Fair Work Act is that even though it might influence how the case law in this space develops, employers can already take action to dismiss employees for sexual harassment. So basically, the takeaway is: don't wait till the amendments, you should already have robust systems and procedures in place to prevent and address sexual harassment.

Which leads us to the next recommendation that we want to touch on, which is that the report recommends the introduction, into the Sex Discrimination Act, of a positive duty to prevent workplace sexual harassment in the Sex Discrimination Act.

So Pete, what would that look like? And what would the impact be?

Peter McNulty:
In the Jenkins report, there was a proposal to put forward a positive duty in the Sex Discrimination Act which would effectively require employers to take reasonable and proportionate measures to eliminate sex discrimination, sexual harassment, and victimization in the workplace as far as possible. That is a serious obligation on employers. But the government, in responding, has recognized ... as Kate Jenkins did in her report ... that employers already have a duty to ensure, so far as is reasonably practicable, the health and safety of workers at work. That's already a duty in the Work Health and Safety Act. And what the government has said about that recommendation, is that it wants to further explore whether such a duty, a separate and distinct positive duty, is necessary, or whether that will create further complexity with respect to a system where there's already a duty that exists.

Interestingly, in the Respect@Work report, Jenkins recognized this duty does already exist, but noted that the lack of a positive duty in the Sex Discrimination Act meant that employers are placing a higher priority on compliance with employment law, and work health and safety law, rather than discrimination law.

And I think the interesting question I had about that is whether that remains the case, given the recent public discourse about sexual harassment in the workplace?

Elissa Speight:
I think the other really interesting aspect to this particular recommendation was that, in addition to the positive duty, there was a recommendation that the Human Rights Commission be granted sort of WHS-style regulator powers in relation to sexual harassment. And that would be a very significant change, in that the Human Rights Commission would be able to investigate, issue improvement notices, accept enforceable undertakings, and commence proceedings against employers in respect of sexual harassment within their workplaces. That was a recommendation that wasn't accepted by the government, but rather it was noted, with a proposal to assess whether the further duty would add further complexity, uncertainty, and duplication.

Peter McNulty:
And I think, Elissa, in that respect, we've already seen the Work Health and Safety regulators ... particularly over the last few years ... place an increasing focus on the psychological risks of work, largely, I think, in a bullying and harassment type context. But that, I think, will certainly extend and develop over time, particularly given the report and the government's response to issues of sexual harassment as well.

One of the other recommendations that the report made, was to amend the model of work health and safety regulations to deal expressly with psychological health, given that there's no current regulation dealing with that issue.

Now, currently, state and territory ministers are finalizing a response to the recent review of the model of work health and safety laws. And I think something we can expect to see there is a greater focus on psychological health in the WHS regulations and associated codes of practice.

I think another thing for employers to note is Safe Work Australia, earlier this year, did publish national guidance material on preventing workplace sexual harassment. And that policy really takes those broad overarching duties that employers have under the Work Health and Safety Act, and put some practical measures around what employers should be doing to ensure that they are taking steps to ensure the health and safety of employees, and workers at work, with respect to risks regarding sexual harassment.

So Elissa, with all that being the case, what are the key takeaways for employers here?

Elissa Speight:
Well, as we've said, employers already have obligations under WHS laws, and sex discrimination laws, with respect to preventing and addressing sexual harassment in the workplace. Some of the legislative amendments proposed will clarify or solidify these obligations. But the key takeaway is that employers should not be waiting for the amendments to ensure that they have appropriate systems and processes in place, or to take action, with respect to allegations of sexual harassment that arise within their workforces.

This is particularly the case within the current environment, including some of the trends that we've been seeing in the case law; even before there was the latest momentum behind this issue that we were seeing in the media and sort of across society more broadly. The risks for employers of not taking action to prevent and address sexual harassment are already present, and they're likely to increase even without legislative amendments.

So in terms of the steps that employers should be thinking of taking ... this, again, could be the topic of another podcast ... but very broadly, you should be considering the adequacy of your policies in this space and the training provided to staff in understanding and applying these policies. Should be looking at the systems that are in place for dealing with allegations and the parties who are involved in those allegations. And you should be stressed testing all of it to consider whether it's fit for purpose.

And finally, a really critical issue to consider is the support structures that are in place for employees who are the subject of sexual harassment. So do they feel empowered to come forward? And how are they treated when they do?

Peter McNulty:
Thanks, Elissa. I think there's some really useful points that employers need to take into account. So this is a really important topic. It's a very current topic that employers need to be taking seriously, and making sure they're taking proactive steps to review their policies and procedures and training to make sure they reflect contemporaneous community expectations.

To hear more about Ashurst podcasts, please visit ashurst.com/podcasts. To ensure you don't miss future episodes, subscribe now on Apple Podcasts, Spotify, or your favorite podcast platform. While you're there, please feel free to keep the conversation going and leave us a rating or review. Thanks again for listening.