Australia: 2020 vision in employment and safety law

In brief - In this article we review the significant events from 2019 in the area of employment, safety and industrial law in Australia, and we look ahead to 2020

2019 saw the ten year anniversary of the Fair Work Act 2009 (FW Act), a spotlight on wage theft, new whistleblower protections, and the reigniting of the freedom of speech debate in workplaces.

As employers prepare for the new decade, they can expect the appeal of the Mondelez decision to the High Court, potential increases in workplace manslaughter penalties, further developments to the Ensuring Integrity Bill and Religious Discrimination Bill, and the first reporting period for employers under the Modern Slavery Act 2018 (Cth).

We cover these issues, and more, below.

Significant events from 2019

Wage theft on the rise

2019 saw an increase in employers admitting to breaches of (and being found to have breached) workplace laws and failing to ensure staff are receiving their lawful entitlements.

The hospitality sector came under particular focus. One "celebrity" chef was investigated by the FWO and found to have underpaid workers over $7.8 million.

More recently, large companies admitted that they too had failed to ensure that staff were receiving their lawful entitlements.

What is the meaning of a "day"? - Mondelez v AMWU

In August 2019, the Full Federal Court handed down its judgment in Mondelez v AMWU [2019] FCAFC 138 (Mondelez) confirming that employees are entitled to 10 days of personal/carers leave per year, regardless of the pattern of hours worked.

A 2:1 majority found a notional day for personal/carers leave is not 7.6 hours, rather a "day" is the portion of a 24-hour period that an employee is allocated to work as their ordinary hours. Therefore, section 96(1) of the FW Act entitles each employee to take paid personal/carers leave on ten days per year, regardless of what ordinary hours of work that "day" entails.

In mid-December 2019, the High Court granted the Morrison Government and Mondelez International special leave to appeal this decision.

Casual employee entitlements - WorkPac v Skene

At the end of 2018, the Full Federal Court in Workpac Pty Ltd v Skene [2018] FCAFC 131 (WorkPac v Skene), determined that Mr Skene, who was hired as a casual employee, was entitled to entitlements of a full-time employee, such as sick pay and annual leave. The Court ruled that Mr Skene was not a casual employee as a matter of law, irrespective of how Mr Skene was originally engaged or the label that was used to describe his employment.

More recently, in Birner v Aircraft Turnaround Engineering Pty Ltd [2019] FCA 1085 (Birner), the Federal Court departed from the controversial precedent set by WorkPac v Skene and found that an employee working 40 hours most weeks pursuant to an employment contract referring to his employment status ambiguously as "casual full time" was a genuine casual employee and not permanent. In reaching its conclusions, the Court had regard to the "conduct of the parties to the employment relationship"; and "the real substance, practical reality and true nature of that relationship".For a more detailed discussion of WorkPac v Skene and Birner, see our article Unpacking and repacking WorkPac – new decision takes practical and realistic approach to casual employment.

In light of Birner, WorkPac v Skene, Mondelez and wage theft inquires, and the increasing complexity of enterprise agreements, Modern Awards and the FW Act itself, in 2020 and beyond employers should consider how they audit their own systems and supply chains to ensure compliance, to avoid penalties and back pay claims and claims for accessorial liability.

Employment class action litigation

Employers are the subject of a wave of class action litigation at a time when the state of play is less certain than ever before. Recent developments in employment and industrial law pave the way for employment class actions in 2020.

For a more detailed discussion of employment class actions, see our article Employment class actions - feast or famine?

First Queensland industrial manslaughter prosecution

In October 2019, the Queensland Work Health and Safety Prosecutor commenced its first prosecution under the Work Health and Safety Act 2011 (Qld) against Brisbane Auto Recycling Pty Ltd for industrial manslaughter. A worker at Brisbane Auto Recycling was killed after being struck by a forklift.

Queensland's first prosecution also comes at a time when Victoria and New South Wales are proposing to increase manslaughter fines. For a more detailed discussion of the increases to the Victorian workplace manslaughter fines, see our article Workplace manslaughter fines to increase in Victoria.

Similarly in New South Wales, the NSW Parliament introduced a Bill on 12 November 2019 proposing to increase penalties and widen the investigative powers of inspectors, and to ban insurance coverage for a monetary penalty under the Work Health and Safety Act of NSW. For a more detailed discussion of the increases to the NSW workplace manslaughter fines, see our article Work Health Safety Bill NSW to increase manslaughter penalties to 25 years and ban insurance for fines.

Freedom of speech and social media

2019 has also seen the reignition of the freedom of speech and social media debate in the workplace. Fuel to this debate came in three different forms:

Firstly, the High Court recently confirmed in Banerji v Comcare [2019] HCA 23 that while there is an implied freedom of political expression, it is not a personal right of free speech but rather a restriction on legislative power extending only so far as is necessary to preserve and protect the system of representative and responsible government. For a more detailed discussion of this case, see our article High Court says no entitlement to workers' compensation for sacked public servant.

Secondly, protection of academic freedom was considered in Ridd v James Cook University [2019] FCCA 997. An academic relied on the "Intellectual Freedom" clause in the university's enterprise agreement to successfully argue that his dismissal was unlawful because it punished him for exercising his right under the enterprise agreement to express his personal views. The Court rejected the university's argument that the exercise of intellectual freedom must be done in accordance with the university's Code of Conduct saying that if the intellectual freedom clause was meant to be subject to compliance with the Code of Conduct, it would have been spelt out in the clause itself.

Thirdly, Israel Folau's termination of employment from Rugby Australia prompted the much publicised religious freedom case. This recently settled under confidential terms.

For a more detailed discussion of the freedom of speech and social media debate, you can register to view our HR Highlights Webinar Series "A Fluid Workplace" on this topic.

First anti-picketing ruling

We recently saw the first decision delivered relating to the unlawful picketing provisions of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (BCIIP Act).

Justice O'Callaghan fined the CFMMEU $100,000 for each of two concurrent pickets from 2017 at NewCold sites in Truganina, Victoria. Individual organisers were also penalised for their involvement in the action.

It was inferred that "some very small loss of productivity might have occurred". The Court's imposition of significant penalties highlights the sanctions that may be imposed for breaches of the BCIIP Act.

There are currently two more picketing cases on foot brought by the Australian Building and Construction Commission (ABCC).

The rise of class actions against employers looks set to continue in 2020. Regulators too are actively commencing proceedings and seeking significant penalties for breaches of statutory and industrial obligations. As employers prepare for the new calendar year it is important that they understand the sources of obligations and risk—in legislation, Awards, Agreements, policies and contracts—and that they ensure that they are meeting their obligations and managing their risk.

Introduction of the Commonwealth Modern Slavery Act

On 1 January 2019, the Modern Slavery Act 2018 (Cth) commenced. The Act requires Australian entities, which have an annual consolidated revenue of more than $100 million, to report annually on the risks of modern slavery in their operations and supply chains, and actions to address those risks.

The first reporting period is between 1 July 2019 to 30 June 2020, with the mandatory reports to be published by 31 December 2020.

The New South Wales Act is currently subject to further review. Until the review is finalised, the NSW legislation is not in force. Employers who are covered by the Commonwealth legislation should be taking steps to ready themselves for the 31 December 2020 deadline.

Whistleblower reform and policies

On 1 July 2019, amendments were made to the Corporations Act 2001 (Cth) and the Taxation Administration Act 1953 (Cth) to introduce a corporate whistleblowing scheme. Public companies and large proprietary companies will have until 1 January 2020 to implement a whistleblowing policy that complies with the legislation.

ASIC have released Regulatory Guide 270 on what companies must include in their whistleblower policies as well as some practice tips. For a more detailed discussion of the ASIC Regulatory Guide, see our article ASIC releases Regulatory Guide on the content required in whistleblower policies.

For guidance on how employers should be preparing for the 1 January 2020 deadline, see our article Employers: get ready for new whistleblower protection laws in 2019.

Amendments to the Privacy Act 1988

In March 2019, the Minister for Communications and the Arts, Mitch Fifield, and Attorney General, Christian Porter, announced a new penalty regime under the Privacy Act 1988 and other measures to ensure Australians were protected online. The legislation was planned to be drafted for consultation in late 2019.

Now is the time to ensure that policies, procedures, training and audit requirements are in place to ensure compliance with these new obligations in 2020.

Royal Commissions

2019 also saw a number of Royal Commissions commenced and finalised:

  • In February 2019, the Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry was concluded. The Banking Royal Commission uncovered evidence of alleged bribery, forgery, misleading regulators and charging fees to deceased clients by Australia's major banks.
  • In October 2018, the Royal Commission into Aged Care Quality and Safety was established. The Aged Care Royal Commission is inquiring into the quality of aged care services provided to Australians, and how best to deliver aged care services to people with disabilities, young people, people living in a rural area and people living with dementia. The Commissioners delivered an interim report on 31 October 2019, and will provide a final report by 12 November 2020.
  • In September 2019, the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability was established. The Disability Royal Commission is inquiring into what governments should do to prevent and better protect people with disability experiencing violence, abuse, neglect and exploitation; the quality and safety of services being provided; the specific experiences of violence against people with disability associated with their age, sex, gender, gender identity, sexual orientation, intersex status, ethnic origin or race; and the critical role families, carers, advocates, the workforce and others play in providing care and support to people with disability. The Commissioners are expected to deliver an interim report by 30 October 2020 and the final report and recommendations are to be made by 29 April 2022.

For more information about Royal Commissions and how to respond, see our article Royal Commissions and Standing Commissions – what happens if you receive a summons?

Looking ahead to 2020

A review of the 2019 legal landscape lights the way for 2020. Employers may expect:

  • A renewed focus on wage theft. Employers should review their governance processes for classifying staff and pay and overtime rates to ensure compliance.
  • Appeal of Mondelez to the High Court. The appeal is yet to be listed for hearing in 2020. Mondelez has potentially major ramifications and back pay claims for employers, particularly for those employers with non-standardised shift arrangements. Until the appeal is determined, employers are encouraged to review how they calculate personal/carers leave for shift workers and employees working more than 7.6 hours a day. The Fair Work Ombudsman has also updated its Fair Work Information Statement to address the Mondelez appeal.
  • Modern Slavery Act reports due 31 December 2020. Employers who are covered by the Commonwealth legislation should begin to prepare for the 31 December 2020 deadline.
  • Whistleblowing policy required to be established by 1 January 2020. Employers are encouraged to review any existing policies to ensure compliance with the changes or implementing a comprehensive new policy. Employers are also encouraged to consider appropriate training to deal with the new legislation, particularly for managers and supervisors who will be classified as recipients of a disclosure.
  • Potential increase to penalties under the Privacy Act. While the date of the proposed new regime has not yet been announced, we expect this to occur sometime in 2020.
  • Increase to Victorian and New South Wales workplace manslaughter penalties. Employers and directors should review their work health and safety policies and procedures to ensure they have a robust safety management system in place to reduce likelihood of incidents and manage their risk.

In the pipeline

Things for employers to keep an eye out for in 2020 include:

  • Progress on the Ensuring Integrity Bill and Religious Discrimination Bill. The Ensuring Integrity Bill aims to reduce costs and delays that law-breaking unions can cause and make sure that building infrastructure like hospitals, schools and roads is affordable. This Bill, if voted up, will also give the Court the power to disqualify officials or cancel the registration of organisations where they do not work in the interests of their members, commit serious offences or have a record of law-breaking.
  • In the last month, the Morrison Government has had significant difficulties gathering the numbers for a successful senate vote. At the time of writing, the Ensuring Integrity Bill was introduced into the Senate for the third time, after going through a number of amendments.

    The Religious Discrimination Bill aims to provide defined religious organisations to preference the employment of those who share their faith. A revised draft of the Bill was released in mid-December 2019. One of the changes proposed by the Morrison Government is to extend coverage of the Bill to religious charities, hospitals, aged care facilities and accommodation providers.

  • Modern Award Amendments from 1 March 2020. Following a decision of the Full Bench, the Fair Work Commission has finalised arrangements for new annualised salary clauses to be inserted into a number of modern awards with effect from 1 March 2020. These changes introduce important new practices for HR and payroll aimed at reducing "wage theft" and non-compliance with awards.
  • Employers should review employment contracts and update HR and payroll practices to comply with the new obligations to audit annual salaries, record hours of work and back pay any shortfall when annual salaries are audited against modern award entitlements. For more information about the modern award amendments, please see our article Employers get ready for modern award changes in 2020.

  • ABCC's security of payment audits. In December 2019, the ABCC announced that it will be conducting a security of payment audit campaign for employers covered by the Code for the Tendering and Performance of Building Work 2016 (Code). The ABCC has advised code covered entities to review progress payment claims submitted to them prior to the audit commencing to ensure all payments have been timely and that no claims that are due and payable are outstanding.
  • Potential changes to enterprise bargaining system. In November 2019, Senator Marise Payne announced that the Morrison Government was considering changes to the enterprise bargaining system in 2020. She stated, "The object of that is to consider ways in which enterprise agreements can be made and approved in a faster and more simple way."

How should employers prepare for 2020?

As we look over the year that was, and forward to 2020, employers should be taking time to consider what the above matters mean for their businesses and workforces while ensuring that they have implemented the changes necessary to ensure compliance.

Megan Kavanagh Roxanne Hilton Rebecca Campbell Julia Atkinson
Work health and safety
Colin Biggers & Paisley

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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