Some of the key reforms introduced in the Commonwealth Government's Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 (Bill) are proposed amendments to the Fair Work Act 2009 (Cth) (the Act) designed to further prevent sexual harassment at work.
These proposed changes largely flow from the various recommendations made in the Respect@Work: Sexual Harassment National Inquiry Report (2020). We provide a snapshot of the main proposed changes, which have important consequences for employers and EPL/ML insurers.
Express prohibition against sexual harassment
Under the Bill, it is proposed that the Act be amended to include an express prohibition against workplace sexual harassment.
While the Act currently protects persons from discrimination because of sex and gender, it does not expressly prohibit sexual harassment.
The proposed prohibition against sexual harassment would mirror similar prohibitions currently found in various state and territory anti-discrimination legislation. However, an important difference is that for the first time, Courts will be able to impose pecuniary penalties for sexual harassment. Consequently, such a claim may trigger cover under broader statutory liability policies, in addition to employment practices liability policies.
The prohibition would apply broadly, adopting the language of harmonised work health and safety laws - to protect workers, prospective workers and apply to persons conducting businesses or undertakings.
Those who engage employees or agents ('principals') can be vicariously liable for acts of sexual harassment by their employees or agents - unless they have taken all reasonable steps to prevent the harassing conduct.
Dispute resolution framework
There would be a new anti-sexual harassment dispute resolution framework. The Fair Work Commission (Commission) would deal with disputes brought under the new jurisdiction by conciliation. The new jurisdiction will look and operate similarly to the existing general protections jurisdiction.
If the conciliation process does not resolve the dispute, applicants would be free to pursue their claim to a Federal Court, or (with the consent of the respondent) to arbitration before the Commission. As noted above, a significant consequence of this will be Courts being able to impose statutory penalties for sexual harassment, as well as a wide range of other orders including economic loss and general damages.
Stop sexual harassment orders
Under the Bill, the newly introduced stop-sexual harassment jurisdiction would largely be maintained.
However, the Bill proposes greater flexibility for applications to be made jointly by one or more aggrieved persons against one or more perpetrators or principals. It would also enable an industrial association (e.g. a trade union) to represent an aggrieved person or persons.
Other changes
The proposed changes won't prevent the concurrent operation of state and territory anti-discrimination laws. Work / occupational health and safety laws which deal with sexual harassment will still operate.
However, the Bill would establish anti-double dipping provisions. These would prevent applicants from obtaining multiple remedies for the same claim, for example, by making a sexual harassment claim under state laws and also the Fair Work Act.
What does this mean for employers and EPL/ML insurers?
If the above reforms are all passed, we expect an increase in the number of disputes and litigated claims relating to sexual harassment. The increase in claims and the new types of claims will affect employers and their EPL/ML insurers.
Employers can reduce the risk of disputes and exposure to liability by putting in place training and education programs, and policies and procedures that aim to prevent sexual harassment at work. Employers should familiarise themselves with any changes which are enacted. They must ensure their policies, procedures and education programs are appropriately updated and tailored in light of the changes to the law.
EPL/ML underwriters and claims professionals should consider whether existing policy wordings would respond to claims under the new sexual harassment jurisdiction and if so, to what extent. For example, would the policy respond to cover statutory penalties imposed for sexual harassment in employment or would they be excluded? If a claimant seeks stop-sexual harassment orders but no compensation, would cover be triggered? Do proposal forms adequately address compliance with the new laws? These and other questions are sure to arise if the proposed changes take effect.
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.
