George Stent, Paralegal
At the IBA’s recent Annual Employment and Diversity Law Conference, Founder and Managing Principal of People + Culture Strategies, Joydeep Hor was a guest speaker on the topic of Artificial Intelligence (“AI”) bias and data transparency in the legal workplace. Joydeep is Secretary of the IBA Diversity and Equality Law Committee, and he was joined by guest speakers from Latin America, Continental Europe and South Asia. Joydeep spoke to the difficulties that AI presents for managers and HR professionals in terms of the potential for inconsistent treatment, unequal opportunities and ultimately, unlawful discrimination, from the bias of AI in the workplace.
What is AI?
AI refers to digital computers performing tasks that would usually be performed by “intelligent beings” such as people. At the conference, Joydeep described how AI achieves this by being similar to the neuron connections in the human body. These connections are called synapses and form a complex network. It is through this network that the brain receives and processes information enabling the human to learn. He explained that certain branches of AI work with “artificial neural networks”. It is these programs that imitate the functioning of the human brain. Information is then entered as input on one side, processed, and the result is output on the other side.
Advantages and Opportunities of AI in the workplace
All businesses, including law firms are investing in AI technology. The Wall Street Journal estimates that spending on AI by companies will grow from $8 billion in 2016 to $47 billion by 2020 – which is an almost 600% increase. Joydeep attributes this increase to AI’s ability to optimise business processes by enhancing efficiency and automating time consuming administrative tasks. For example, in a legal context, AI is able to review contracts and undertake legal research almost instantly. One such software is “ROSS Intelligence”, which was used in a recent test where a partner at a law firm was able to find a matter that was identical to the firm’s case almost instantly, while his own research took ten hours. Joydeep and the panel noted that the research was not only efficient, but highly accurate.
However, at the conference, Joydeep questioned whether productivity control is automatically accompanied by greater effectiveness at the workplace. In making this point, Joydeep gave the example of the Henn Na Hotel, a hotel in Japan almost entirely staffed by robots. The hotel, shortly after opening, had to dump half of the robots due to them “annoying” the guests, not being capable of the jobs they were designed for, or creating more work for their human counterparts.
Risk of AI in the Workplace
Joydeep also raised the impact that AI has on the hiring, firing and promotion decisions of HR professionals. AI has been introduced recently to screen CVs to find the best possible applicant. Joydeep therefore raised how the lack of transparency in recruitment decisions may cause a problem for employers. In illustrating this point Joydeep highlighted that the vast increase in data sources may result in employers not being aware of what information has been used to make recruitment decisions and therefore what risks may arise. This problem is compounded by the fact employers and work councils often do not understand the numerical codes according to which the algorithm acts. This may mean employers cannot guarantee that an AI system has not made a recruitment decision that does not carry a risk of a discrimination claim. Joydeep recommends that in order to prevent these claims from arising employers should monitor the data input at the very initial levels and regularly review the systems they use. He suggests that employers using AI should prepare themselves to explain why one applicant was hired and another one rejected.
Roxanne Fisch, Senior Associate
People + Culture Strategies Founder and Managing Principal, Joydeep Hor recently gave a thought-provoking and well-received presentation to leading HR professionals on how employers should rethink handling discipline, termination and grievances in the workplace. In taking the audience through ten key guiding principles, HR leaders were provided with a strong foundation to deal with challenging employee relations situations.
Every HR professional can relate to being asked to reflect on the most challenging employment relationship they have had to deal with. In having this scenario at the forefront of their mind, Joydeep tasked the audience with considering what it was that made it difficult and what tools they could have incorporated that might have yielded a different outcome.
Ten Guiding Principles
The ten guiding principles set out by Joydeep were in strong contrast to how a traditional law firm would approach handling challenging employee relations situations. The focus should be shifted from a compliance-based approach, which tends to view these situations in a vacuum, to an approach which considers the whole context and environment in which it occurred. As noted by Joydeep, this is particularly important as these days people are far better informed about their workplace rights then they used to be, and issues are becoming more prevalent earlier in the employment relationship. The conversation, he surmised, needs to be reframed and his guiding principles provide a practical toolkit in being able to do so.
1. Embrace quadrant methodology
Managing people should be undertaken through a wholistic approach. Instead of simply focusing on the commercial aspects of a decision, consideration should be given to each of the four quadrants: commercial; legal; psychology and sociology. It is often these last two quadrants which are overlooked, yet the importance of understanding how the person thinks or feels as well as considering the bigger impact on the organisation can lead to better outcomes in resolving the issue.
2. Embrace the “Kingdom”
Joydeep provided the audience with the powerful analogy of viewing the workplace as a kingdom, where the ruler (employer) is entitled to impose any rules (policies) they want to apply in their kingdom (of course within limits), the ministers (managers) are to ensure the rules are complied with and the ruler is entitled to evict anyone they wish provided they do so in the right way. The implementation of appropriate company policies are important to ensure the kingdom runs smoothly.
3. The importance of substance over process
HR is often viewed as process driven rather than substance. It is important to challenge this perception so that it becomes more about substance and value over process.
4. Grievances: Understand the core of the issue
HR professionals must seek to understand the root of the grievance. Getting better at going beyond what is being said to find out the core of the issue will assist in being able to improve it.
5. Little things matter
In people management issues, it is always necessary to think about how the employer’s actions will make that person feel. Empathy and common decency can go a long way.
6. Explain, don’t convince
In handling challenging performance related situations, the aim is to infuse your language with words that seek to explain why you have come to the view that you have.
7. Honour the promises you make
Employers often make promises to employees, whether it be at induction, by way of company policies (which should be limited wherever possible) or in their values statement. These promises should be followed through with.
8. Assume nothing and take nothing for granted
This principle is particularly relevant in relation to confidentiality. Whilst HR professionals often do things in a certain way because we are often fixated on the legal quadrant, it is worthwhile investing more time in optics management and counter-messaging.
9. Right and wrong have nothing to do with it
In the context of workplace investigations, it is very easy for the investigation to take on a life of its own where the investigation itself becomes a pseudo institution and the employee’s concerns about their job security is thereby intensified. To avoid this, HR professionals should commit to undertaking an investigation quickly, with minimal fuss and disruption and form a view on the balance of probabilities.
10. Specifics around termination
Often the most unrecognisable yet dominant category in termination decisions is based on the aspect of a lack of a cultural fit in the organisation. More energy should be invested in determining an answer to the question, “what does good look like” in the organisation. If employers invest in answering this question, they can then create the infrastructure necessary to put them in the best possible situation in dealing with termination decisions.
In providing these ten guiding principles, Joydeep provided HR professionals with practical advice to implement within their organisations straight away. People + Culture Strategies can assist with the implementation of Joydeep’s powerful people management strategies. Please feel free to contact us if you are interested on (02) 8094 3100.
Daniel Anstey, Graduate Associate
The recent allegations of bullying against star radio host Ray Hadley, serve as a reminder to employers of the potential dangers posed by inaction towards complaints of bullying by a star employee. Indeed, the greater the status of an employee, the more an organisation stands to lose if allegations of bullying are not dealt with in line with best practice.
The “fresh allegations” which have surfaced this week, refer to alleged events which occurred many years ago, even dating as far back as 1984, showing that these issues require careful management and cannot simply be swept under the rug.
What are the possible consequences of bullying/harassment?
Bullying has become a buzzword in recent times and any claims against a public figure can attract a frenzy of media coverage. This means that some victims may be hesitant in coming forward with claims for fear of unwanted attention on top of what they might already be dealing with.
Conversely, victims may be motivated to go to the media by the desire to enact revenge, extract financial compensation or take the opportunity to have their moment in the spotlight. This can result in damage to the brand and reputation of an organisation, or of any individuals caught up in the situation.
Employers must be wary of the attitude that star employees are worth protecting from these sorts of allegations, as this will benefit no-one in the long term. If exposed, a cover up will damage the brand and reputation of both employee and employer, and an organisation risks seeing valuable employees walk out the door if they feel that fair procedures are not in place.
Workplace bullying can cause lasting physical, mental and psychiatric harm to victims and their close ones. This may also have a flow-on effect to productivity and culture and within an organisation.
Furthermore, if a victim suffers psychiatric or physical harm and sues in tort, the employer may be found vicariously liable, as well as breaching their own non-delegable duty of care not to expose employees to reasonably foreseeable risks of harm. For example, in the case of Sneddon v The Speaker of the Legislative Assembly an employer was held liable to the tune of $438,613, for past and future economic loss arising when a senior manager was found to have bullied an assistant.
So, what can you do?
It is now increasingly important for employers to manage proactively the reputational damage which can accompany allegations of bullying, and not to be seen to be tolerating or turning a blind eye because a particular employee is a well-known or highly successful individual.
Dealing with the issues and discontent resulting from bullying, internally and before they escalate is crucial in avoiding a situation such as the one 2GB is currently facing. The best practice is to have very clear policies prohibiting bullying as well as accessible and confidential procedures for handling complaints and managing investigations.
Employees who believe they are being bullied also may apply to the Fair Work Commission’s anti-bullying jurisdiction for an order to stop the bullying, but it is always preferable for the parties to deal with the issues proactively themselves.
If you require advice on best practice policies and procedures for your organisation, or on bullying and harassment in the workplace please feel free contact People + Culture Strategies on (02) 8094 3100.
Justin Peñafiel, Senior Associate
Have you recently employed any “Asians with PhDs”? Recent political rhetoric suggests it is a new phenomenon to have a diverse workforce, but whether in metropolitan Sydney, or regional Australia with its skilled labour shortages, nothing could be further from the cosmopolitan truth.
However, unlike most political offerings, here are some practical tips for understanding why controversy about equality and diversity never fades away despite years of promoting it, and managing what people feel and think about their personal differences in the workplace, in spite of strategies to support them.
Does discrimination still occur with “equality”?
This article could have easily been another diatribe about anti-discrimination laws and what not to do, but unless they want to Make America Great Again, what manager actively treats anyone differently or unfavourably based on their physical appearance, apparent cultural background, or a whole host of protected attributes under section 351 of the Fair Work Act 2009 (Cth), and other anti-discrimination laws?
It begs the question, if managers do not actively discriminate against certain employees on an unlawful basis, and HR has been promoting equality and diversity for decades, why the ongoing controversy about “Asians with PhDs” and persistent talk of shattering ceilings of the glass, bamboo and/or pink varieties? The ongoing sensitivity suggests that it is useful to apply two steps from what we call of our four-quadrant model – “Sociology” and “Psychology”, or in other words:
- considering what people may feel and think about policies and procedures to promote outcomes of equality and diversity (or lack thereof); and;
- considering how the policies might look internally and externally to different audiences?
Applying the PCS People Management Quadrants: The gap between equal opportunity and hidden differences
There’s no better place to start than the beginning of an employment relationship, the recruitment phase. We could have easily commenced this section with, “statistics show that X percentage of Asians with PhDs change their name when applying for jobs”, but it may be more constructive to ask, “how does it look if people feel the need to change their name to apply for a job at our organisation?”, and “what must they be feeling and thinking about our company if they need to change their names to get a job?”.
Changing one’s name on a resumé is easy, but other differences are too difficult or perhaps impossible to hide – gender, pregnancy, ethnicity, even sexuality. According to the law, these points of difference shouldn’t matter, and managers generally do what they can to convey a sense of equality in the workplace. However, employees may still not see or feel a sense of “equality” despite all that you might have done to promote it. Conversely, employers may not see, know or think to ask about inequality that their employees’ sense or feel because of everything that they have done to promote it. Knowledge is power, and hidden differences can reduce it.
What can we do about differences that we cannot see? Auditing culture, policies and procedures
Asking these questions from the People Management Quadrants could ultimately lead to some uncomfortable home truths for your organisation – what must employees be seeing or thinking (about perceived barriers in the workplace), if they feel that they cannot disclose differences that their managers cannot see, but which might affect their experiences at work, for example, family obligations, domestic violence, cultural differences (e.g.: cultural differences with communicating with management), or their sexual orientation? What can we do about it? Misconception can lead to claims which may have no substance, but which aren’t any less painful to investigate or defend.
Enhancing Employee Engagement and Leadership Development, Coaching and HR Executive Education
People + Culture Strategies can assist you with Strategic HR Consulting in a variety of ways, such as performing a “Culture and Effectiveness” audit which combines a series of staff interviews and collection and review of staff data, or a review of your organisation’s people strategy tailored to your organisation’s needs. We also offer Leadership Development, Coaching and HR Executive, to enhance and improve your skills with engaging and managing your diverse workforce.
If you are interested in ways to engage better with your employees, or any of our traditional services with legal advice, investigations and dispute resolution, please feel free to contact People + Culture Strategies on (02) 8094 3100.
Donna Trembath, Executive Counsel
Is your organisation ready for the new rules?
The Fair Work Commission (“FWC“) has decided to vary 22 modern awards to include stricter requirements for salaried employees.
Employers who prefer the administrative ease of paying annual salaries rather than award rates may be surprised by the new rules.
Which occupations and industries are affected?
The decision handed down on 27 February 2019 applies to 22 modern awards including a number of occupational awards, for example the Clerks Award and the Health Professionals Award. The affected industries include restaurants, hospitality, banking, finance and insurance, contract call centres, legal services, mining, salt, telecommunications, water, wool, broadcasting and recorded entertainment, local government, manufacturing, pharmacies, rail, pastoral and horticulture.
What are the new rules
The FWC is in the process of dividing the 22 relevant awards into “Category 1” (relatively stable hours) and “Category 2” (highly variable hours, or where significant penalty rates apply to ordinary hours).
Category 1 awards (including the Clerks Award) will receive the least burdensome model clause. Even so, subject to specified modifications for specific awards, it will require an employer who elects to pay an annual salary that is inclusive of overtime, penalty rates, allowances and loadings to:
- detail the method by which the annualised wage has been calculated including specification of each separate component of the annualised wage and any overtime or penalty assumptions used in the calculation;
- set outer limits on the number of penalty-rate attracting hours that an employee may be required to work each pay period or roster cycle (e.g. no more than 3 hours of work on a Sunday each week);
- set outer limits on the number of overtime hours that an employee may be required to work each pay period or roster cycle (e.g. no more than ten overtime hours per week);
- pay employees separately for hours not covered by the annual salary, at award rates;
- conduct a reconciliation every 12 months (and on termination of employment) to calculate the remuneration that would have been payable to the employee under the award, and pay any shortfall to the employee; and
- keep records of start and finish times and unpaid breaks, to be signed by the employee each pay period or roster cycle.
Category 2 awards will, subject to specified modifications for specific awards, receive a more onerous model clause under which an annual salary can only be provided if the employee agrees in writing. The employee will have the right to terminate the annual salary arrangement with 12 months’ notice and revert to award rates.
When will it take effect
The FWC is still finalising the changes and considering whether transitional provisions are needed. Written submissions are due on 27 March 2019.
Concerns for employers
Some of the criticisms of the new rules include that they are impracticable for small business, obviate the benefit of administrative simplicity which employers seek to obtain by paying an annual salary, and that salaries are often established having regard to market conditions rather than award-related matters.
While various employer parties submitted to the FWC that provisions that are too costly or burdensome will not be used, in our view annual salaries are here to stay. Employers should prepare to adapt to the changes as the FWC has come down firmly on the side of workers and preventing exploitation and wage theft.
PCS recommends reviewing how your organisation employs salaried employees and manages its award compliance and record keeping obligations. It is important that if you pay an employee an annualised salary where there is an underlying modern award, that you comply with the award’s strict requirements once they come into effect. Given other recent changes regarding failures to keep proper employee records, record-keeping requirements for all employees (including non-award employees) should also be reviewed. Please contact us to discuss further.
Rocio Paradela, Graduate Associate
The Treasury Laws Amendment (Enhancing Whistleblower Protections) Bill 2018 (Cth) passed both Houses of Parliament on 19 February 2019, and is now awaiting Royal Assent. This legislation aims to consolidate and broaden whistleblower protections for the corporate and financial sectors, and to introduce a whistleblower protection regime with respect to breaches of tax laws.
The events surrounding the recent Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has put the spotlight on misconduct in these sectors, and on the role that whistleblowers may play in bringing such conduct to light.
The regime is relatively complex as it sets up a number of qualifying requirements for disclosures to be protected under the legislation.
Who is an eligible whistleblower?
Individuals who qualify for protection include current and former employees, officers and directors, contractors, suppliers, unpaid workers, family members of employees, and certain designated individuals in relation to superannuation entities.
What disclosures are protected?
Disclosures of information may qualify for protection where there are reasonable grounds to suspect that the information concerns misconduct, an improper state of affairs, conduct that could constitute an offence, or other prescribed circumstances. In addition, to qualify for protection disclosures need to be made to a relevant authority, a legal practitioner or an appropriate person (referred to as an “eligible recipient”). In the case of a corporate entity, this includes an officer or senior manager, or a person authorised to receive disclosures.
However, there is provision for certain public interest and emergency disclosures, and personal work-related grievances are on the whole excluded from the protections.
How will an eligible whistleblower be protected?
The legislation provides a number of levels of protections for whistleblowers. These include in relation to the confidentiality of whistleblowers’ identity, prohibitions on victimisation and detrimental treatment, immunity from liability in certain circumstances, and the capacity to apply for compensation.
The policy imperative
One area for employers to note in particular is that as a consequence of this legislation, certain entities (such as public companies, large proprietary companies and proprietary companies that are the trustee of a registrable superannuation entity) will be required to have a whistleblower policy in place. Failure to comply with this requirement is designated as a strict liability offence.
A policy must contain information about:
- the protections available to whistleblowers, including the protections available under the legislation;
- how and to whom an individual can make a protected disclosure;
- how the company will support whistleblowers and protect them from detriment;
- how the company will investigate disclosures that qualify for protection under the legislation;
- how the company will ensure fair treatment of employees who are mentioned in whistleblower disclosures;
- how the policy will be made available; and
- any other prescribed matter.
Many of the provisions are designed to commence some months after Royal Assent is received. This gives organisations a window of time to examine their practices and to get an appropriate policy framework in place. Employers are also encouraged to consider appropriate training to deal with the new legislation, particularly for staff that are likely to be the designed recipients of disclosures within their organisation.
If you require any advice as to how these legislative changes may affect you or your organisation, please feel free contact People + Culture Strategies on (02) 8094 3100.