Purpose
The purpose of these Additional Comments is to provide recommendations for amendments to the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill 2022 (the Bill) which are not contained in the committee’s report and to make observations with respect to implementation of the reforms. The principles underlying the Bill are supported. However, there is an opportunity for amendments to be made to the Bill to address practical implementation concerns raised by key stakeholders during the committee’s inquiry.
Hostile work environment
Based on the submissions received by the committee, the specific wording of proposed section 28M requires further consideration. This is a key provision, and it is important that the meaning is clear and well understood by all key stakeholders.
The Law Council of Australia has submitted that the structure of the current clause: ‘may create challenges in applying the law consistently’. Moreover, the Law Council of Australia states that: ‘It is not clear to the Law Council whether it is possible to amend the provision to ensure it has an appropriate level of certainty and clarity’.
The comments of the Law Council of Australia can be contrasted with the statement of the Australian Human Rights Commission (AHRC) that the proposed section:
…provides clarity and certainty to the law, particularly in relation to conduct that may not be directed towards any particular person but results in a generally hostile environment on the basis of sex.
The disconnect between the view of the Law Council of Australia and the AHRC is of concern, especially given that the Attorney-General’s Department (the AGD) has advised that the proposed section 28M is intended to align with other provisions in the Sex Discrimination Act 1984 (the SD Act).
Several technical issues with proposed section 28M were also raised by the Australia Chamber of Commerce and Industry (ACCI). The clarifications and amendments proposed by the ACCI warrant careful consideration. On the face of it, the proposed amendments are not contrary to the intent of the drafting as illustrated by the examples in the Explanatory Memorandum (EM).
Given the stated intent is to align proposed section 28M with the other provisions of the SD Act, there should be a pathway for the technical wording to be amended or the EM enhanced to address the concerns raised by key stakeholders.
Recommendation
The wording of proposed section 28M be reconsidered to address the concerns raised by key stakeholders.
Positive duty on employers
As described in the committee’s report, the imposition of the positive duty on employers and persons conducting a business or undertaking (PCBU) is a cornerstone reform.
As Ms Kate Jenkins, the Sex Discrimination Commissioner, explained:
In the Commission’s view, this will be a powerful tool in promoting broad systemic and cultural change around sex discrimination and sexual and sex-based harassment in the workplace...[I]t shifts the burden away from remedial action by individual complainants and towards employers taking proactive and preventative action to eliminate unlawful conduct.
The imposition of a positive duty is strongly supported. This section of the Additional Comments relates to the drafting of the provision.
There is considerable discussion in the committee’s report with respect to the precise formulation of the positive duty to be imposed on employers and PCBUs. The proposed section currently proposed reads:
An employer or a person conducting a business or undertaking…must take reasonable and proportionate measures to eliminate, as far as possible…[sex discrimination, sexual harassment, victimisation and other relevant unlawful behaviour].
The clear intent and effect of the words is that measures which are ‘reasonable and proportionate’ will vary between employers and PCBUs depending upon their particular circumstances. This is reinforced through proposed subsection 47C(6) which sets out the matters to be taken into account by a decision maker in determining whether or not the positive duty has been discharged.
Paragraph 113 of the EM clearly and succinctly states the intent:
Paragraph 47(C)(6)(a) provides that “size, nature and circumstances of the duty holder’s business or undertaking” is a relevant matter. This recognises that it may be reasonable for micro or smaller businesses to have more informal or limited measures in place to prevent unlawful conduct in comparison with a larger business.
It is commendable that the Bill recognises and provides for these practical realities. However, one difficulty in interpretation is reconciling the phrase: ‘reasonable and proportionate measures’ which moderates the key obligation: ‘measures to eliminate’ which is then followed with a final proviso: ‘as far as possible’. Does the use of the word ‘possible’ in this context intend to raise the threshold for an employer or PCBU to discharge the duty? Why is the phrase: ‘as far as possible’ used, as opposed to ‘reasonably practicable’? Alternatively, when read as a whole, is the same practical effect achieved? These questions were raised in detail (with reference to case law) by ACCI in its submission (refer to paragraphs 27 to 32).
It is noted under paragraph 15 of the EM that:
The positive duty is intended to align with section 106 of the SD Act, which relates to the vicarious liability of employers for unlawful acts done by their employers or agents. Under section 106 of the SDA Act, an employer is not liable for the unlawful conduct of their employees or agents if they have taken all reasonable steps to prevent their employees from engaging in the conduct.
However, section 106 of the SD Act does not contain the phrase: ‘as far as possible’.
Similarly, in relation to workplace health and safety laws, paragraph 16 of the EM states that:
The positive duty is also intended to operate concurrently with the existing duties in the model WHS laws…
In this regard, section 17 of the Work Health and Safety Act 2011 states:
A duty imposed on a person to ensure health and safety requires the person:
(a)
to eliminate risks to health and safety, so far as is reasonably practicable; and
(b)
if it is not reasonably practicable to eliminate risks to health and safety, to minimise those risks so far as is reasonably practicable.
Again, the phrase: ‘as far as possible’ is not used.
It is further noted that since the public inquiry, the government has introduced the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (the ‘Fair Work Amendment Bill’). Amongst other things, it is intended to implement recommendation 28 of the Respect@Work Report which recommended that the Fair Work system be reviewed to ensure and clarify that sexual harassment, using the definition in the SD Act, is expressly prohibited.
The Fair Work Amendment Bill would impose vicarious liability upon employers in relation to the unlawful conduct of employees unless the employer can prove that they: ‘took all reasonable steps to prevent the employee [from engaging in the unlawful conduct]’.
This formulation tracks the words of section 106 in the SD Act. Again, the phrase ‘as far as possible’ is not used.
Returning to the Bill the subject of this inquiry, the EM states:
While the model WHS laws and SD Act use alternative language to describe the obligation on employers and PCBUs, the conduct required for compliance is anticipated to be the same.
Further, in response to a question on notice, the AGD stated:
The Department is of the view that, in practice, the measures taken by an employer to satisfy the positive duty would generally be similar to those required to demonstrate that they have taken “all reasonable steps” to avoid vicarious liability [section 106D of the SD Act].
Given the intent, the phrase: ‘as far as possible’ should be replaced with ‘so far as is reasonably practicable’ to remove the doubt and to better align the wording in each of the provisions. To put it another way, given the legislative intent, there is no reason not to make the amendment in order to address the doubts raised by stakeholders.
After the hearing, the Law Council of Australia provided answers to questions on notice. Those answers considered the meaning of the phrases: ‘reasonably practicable’ and ‘possible’.
The Law Council of Australia referred to the case of Slivak v Lurgiwhere in considering the meaning of the phrase: ‘reasonably practicable’ in the context of a particular workplace health and safety law, Her Honour Justice Gaudron stated:
…the question whether a measure is or is not reasonably practicable is one which requires no more than the making of a value judgment in the light of all the facts. Nevertheless, three general propositions are to be discerned from the decided cases:
(i)
the phrase “reasonably practicable” means something narrower than “physically possible” or “feasible”;
(ii)
what is “reasonably practicable is to be judged on the basis of what was known at the relevant time;
(iii)
to determine what is reasonably practicable it is necessary to balance the likelihood of the risk occurring against the cost, time and trouble necessary to avert that risk.
In commenting on the case, the Law Council of Australia stated:
Amongst other things, the judgement provides authority for the proposition that a requirement of “reasonably practicable” sets a narrower [and therefore lower] threshold, or standard, than a requirement of what is possible (see proposition (i) immediately above.
In considering the answer to questions on notice provided by the Law Council of Australia, it should be noted:
(a)
the main commentary provided by the Law Council of Australia where this case was quoted was with respect to the objects clause in the SD Act;
(b)
the Law Council of Australia made it clear that it was: ‘not in a position to provide a comprehensive position on the drafting of [proposed subsection 47C(1)]’; and
(c)
the Law Council of Australia noted that the EM provides commentary regarding ‘reasonable and proportionate’ and there is a compliance framework contained in proposed subsection 47C(6).
It is noted that the AHRC provided very helpful further information on this issue in a question on notice where the AHRC were asked to respond to the Safe Work Australia submission which called for an alignment in the provisions between the SD Act and workplace health and safety laws.
To paraphrase (and hopefully doing justice to the AHRC’s fulsome answer), the AHRC argued:
(a)
it was never intended that the positive duty in the SD Act would be identical to that in the workplace health and safety laws. The Respect@Work report envisaged that: ‘with these differing but complementary approaches, the two positive duties would work in a reinforcing way’;
(b)
the two laws (workplace health and safety laws and anti‑discrimination/human rights laws have different foundations and focuses); and
(c)
the positive duty introduced into the SD Act would be consistent with that contained in Victorian legislation thereby promoting consistency between federal and state human rights/anti-discrimination law around which a body of law may be consistently developed.
However, the fact is that the High Court has found (based on the plain meaning of the words) that there is a difference between the meaning of: ‘reasonably practicable’ and ‘physically possible’ or ‘feasible’. As stated above, the Government’s stated legislative intention is that the standard imposed under the positive duty should be consistent with the standard required to be met under section 106 of the SD Act. Hence, the wording should be aligned. Moreover, this has the added advantage of resolving the uncertainty raised by stakeholders.
Recommendation
The phrase: ‘as far as possible’ in proposed subsection 47C(1) be replaced with: ‘so far as reasonably practicable’.
Role of relevant Government agencies
By way of introduction, it is noted that with the passage of this Bill and assuming that at least those provisions in the Fair Work Amendment Bill relating to sexual harassment are also passed, there will be three categories of legislation/laws (each with their own regulators) that deal with this area of the law, namely:
Human Rights/Anti-Discrimination Laws;
Workplace Relations Laws; and
Occupational Health and Safety Laws.
At the outset, it is noted that as explained by the Sex Discrimination Commissioner in the context of the discussion in relation to difference between the wording of positive duties under the SD Act and occupational health and safety laws: ‘with these differing but complementary approaches, the two positive duties would work in a mutually reinforcing way’. Having recognised the weight of that argument, the comments contained earlier in these Additional Comments simply advocate for a better alignment between the various laws (noting that this is more a matter of technical drafting than legislative intent).
The next question is which federal organisation or agency should undertake what responsibilities under the reforms. In my view, this requires an assessment of the expertise, capacity and roles of each organisation or agency.
In making this assessment, the following is noted:
(a)
The AHRC has undertaken a detailed analysis of its new functions under the Bill, the human resources required to undertake those functions and the cost. These were set out in an answer to a question on notice. The AHRC has clearly considered the issue in depth.
(b)
The first category of new functions for the AHRC concern the preparation of guidelines for compliance with the positive duty, promoting understanding and undertaking research. There was overwhelming evidence to this inquiry that employers and PCBUs will be looking to the AHRC to provide clear guidance regarding what employers and PCBUs need to do to discharge the positive duty. The magnitude of this task cannot be underestimated. In many workplaces, there are complex interactions between employers, employees, contractors, customers and third parties. The Housing Institute of Australia gave cogent evidence in relation to the complexity of interactions at a residential construction site. The Australian Nursing and Midwifery Federation provided an invaluable insight to the challenges faced in hospitals. Stakeholders will be looking to the AHRC to provide clear and practical guidance which is relevant for the particular workplace. What is a reasonable and proportionate measure for my workplace? How do I practically discharge the positive duty?
(c)
The second category of new functions concern the compliance and enforcement function; namely, inquiring into whether or not a person has complied with the positive duty and ensuring compliance with the duty. Such a function may entail visits to work sites, the gathering of evidence (including interviews with witnesses), subsequent court proceedings and related matters. Relevant workplaces could be located anywhere in Australia.
(d)
The third category of functions relates to inquiries into systemic unlawful discrimination or suspected systemic unlawful discrimination. This could entail a period of lengthy in-depth inquiry into a particular sector.
(e)
Some stakeholders have raised concerns that it is inappropriate for the AHRC to have both enforcement and conciliation roles. As a comparison, stakeholders referred to the demarcation of responsibilities between the Fair Work Commission and the Fair Work Ombudsman. The Ai Group strongly argued that:
The Bill unfairly and inappropriately continues the role of the AHRC in exercising its conciliation functions of unlawful sex discrimination and sexual harassment while creating a compliance function for the AHRC in respect of the associated positive duty at section 47C...Ai Group considers it inappropriate for the AHRC to acquire regulatory and enforcement powers if it is to maintain its independence as a complaints body equipped to impartially resolve complaints.
(f)
The Fair Work Ombudsman has a demonstrated capacity to undertake compliance and enforcement activities. In its annual report for the year ended 30 June 2022, it refers to a total of $532 million of recoveries, 18 622 completed disputes, 492 infringement notices issued, $2.7 million secured in court ordered penalties, 2345 compliance notices issues, 4197 investigations into complex or significant matters, nine enforceable undertakings recovering $56.4 million, and 810 compliance activities recovering over $108 million. As at 30 June 2022, the Fair Work Ombudsman had 979 employees located all over Australia—a substantial organisational footprint in every state and territory. Given this capacity, the question must be asked as to whether it would be more effective for the Fair Work Ombudsman to undertake the compliance and enforcement role arising under the Bill albeit with expert support from the AHRC.
Recommendation
Given the benefit in separating the conciliation and enforcement roles of the AHRC, and the existing organisational capacity of the Fair Work Ombudsman throughout Australia, it is recommended that consideration be given to whether the compliance and enforcement function would be better carried out by the Fair Work Ombudsman with expert support from the AHRC.
Recommendation
It is further recommended that the AHRC dedicate extensive resources and capability to developing (in close consultation with relevant stakeholders) detailed guidelines for employers and PCBUs as to how they can discharge the positive duty arising under proposed subsection 47C(1), including guidelines specific for particular industries and workplace environments.
Costs
Proposed section 46PSA of the Bill proposes a ‘cost neutrality’ approach to costs. The section would provide that the default position is that each party should bear its own costs, but the court would have a discretion to make a costs order where there are ‘circumstances that justify it in doing so’.
Proposed subsection 46PSA(3) then provides a list of factors which the court ‘must’ consider in exercising its discretion including: the financial circumstances of each of the parties to the proceedings, the conduct of the parties, whether the subject matter of the proceedings involves an issue of public importance. Importantly, the court must also consider: ‘any other matters that the court considers relevant’. Hence, the discretion of the court is not fettered.
As detailed in paragraphs 2.89 to 2.104 of the committee’s report, there is a wide cross section of views with respect to the proposed ‘cost neutrality’ approach. Some witnesses considered that the current position should be maintained. Other witnesses considered that the approach was not sufficient to address the barriers facing potential claimants and advocate in favour of a so‑called ‘equal access’ approach where the plaintiff may only be ordered to pay costs in limited circumstances but would have their costs covered if successful.
The vexed nature of this subject matter is perhaps best illustrated by the fact that the views of the AHRC in relation to the best model have evolved from that contained in recommendation 25 of the Respect@Work report (i.e. the AHRC supports the cost neutrality approach contained in the Bill, as opposed to the approach currently in place under section 570 of the Fair Work Act 2009 which was preferred under recommendation 25).
Based on the evidence before the committee, there is a material question as to whether the change in the cost recovery regime may lead to unintended consequences. Under the current law, costs typically ‘follow the event’. The court has discretion to award costs and in most cases the unsuccessful party will be ordered to pay the costs of the successful party.
Where a potential plaintiff has a strong case, this has the benefit that:
(a)
The plaintiff may be better able to access legal support from barristers and solicitors on a ‘no-win, no-fee’ basis because the barristers and solicitors having assessed the merits of the case will have a level of confidence with respect to the payment of costs; and
(g)
The likelihood of a costs order may be used as leverage by a plaintiff in settlement negotiations (the defendant will be advised that they have the risk of not only having to pay damages but also having to meet both their own costs and those of the plaintiff). This means that a claim may be settled earlier.
Complicating the matter is that claims may be brought against a wide range of potential defendants. Some will be large corporates with great financial resources. However, other potential defendants will be small businesses with financial constraints. In such situations, the argument for adoption of an ‘equal access’ costs approach advocated by some stakeholders is weaker.
Recommendation
Further consideration be given to the appropriate costs allocation principles to avoid unintended consequences.
Miscellaneous matters
In short form, I provide the following comments in relation to a range of other miscellaneous matters:
(a)
Statutory Note: There is merit in inserting a statutory note to reflect the Bill’s intent that the positive duty in proposed section 47C is intended to be aligned with section 106;
(b)
Powers of AHRC: In relation to the AHRC’s inquiry powers, careful consideration should be given to the amendments proposed by the Ai Group with respect to:
legal professional privilege and privilege against self-incrimination; and
the relationship between compliance notices and enforceable undertakings (in particular Ai Group’s proposed section 35FF appears sensible).
(c)
Representative applications: There were arguments made for and against the creation of a new process to enable representative applications to be made. The ACCI made a strong case that the current system already allows support to be provided to plaintiffs by unions and other organisations. If representative applications are to be permitted, careful consideration should be given to the insertion of checks and balances to address the concerns which have been raised.
(d)
Objects clause: There were a range of submissions in relation to the objects clause. In relation to the current objects clause (referring to ‘equality of opportunity’), the AHRC noted that it does not specifically deal with: ‘treatment’. This could be remedied by simply adding that word rather than removing and replacing: ‘equality of opportunity’. All Australians should have equality of opportunity and be treated equally in the workplace.
(e)
Review of operation of Bill: Given the range of matters raised by stakeholders, a detailed review of the operation of the Bill is warranted after a reasonable time. It is noted that the committee recommended a review six to 12 months after Royal Assent in relation to the cost mechanism.
Recommendation
The review be expanded to consider the operation of all changes given effect to under the Bill. Further, sufficient time needs to be provided for the Bill to be in operation prior to any review being undertaken.
Senator Paul Scarr
Deputy Chair