Daniel McNamara, Graduate Associate
On 17 September 2018, the House of Representatives passed the Modern Slavery Bill 2018 (Cth) (the “Commonwealth Bill”) which is currently before the Senate.
While there is no set definition of “modern slavery”, it is regarded as the full or partial servitude of people which can involve “human trafficking, slavery, forced labour, removal of organs and slavery-like practices”.1 For large businesses operating in Australia, a risk of modern slavery may arise within the supply chain of producing goods and services, as has occurred with respect to forced labour in the agriculture and construction industries. Another scenario that has given rise to concerns is where a business allows (or turns a blind eye to) workers paying off “debts” owed to others by working indefinitely without being paid a wage.
Since 2004, over 50 prosecutions have occurred in relation to modern slavery under the Criminal Code Act 1995 (Cth).2 However, the liability and accountability of large entities within Australia remains limited due to the lack of legislation requiring entities to conduct due diligence in preventing modern slavery throughout entities. The result is that instances of modern slavery within organisations’ supply chains, operations and structures may fail to be recognised or no preventative action is taken. With this in mind, in February 2017, the then-Commonwealth Attorney General, George Brandis, requested the Joint Standing Committee on Foreign Affairs, Defence and Trade, to consider the introduction of modern slavery legislation in Australia.
Amongst other things, the Joint Standing Committee drew closely on the 2015 legislation introduced in the United Kingdom, as well as considering 225 public submissions and conducting 10 public hearings between May and October 2017. If it is enacted, the Commonwealth Bill will be the first piece of federal legislation to deal with modern slavery.
Nature of the obligations
The sole requirement of the Commonwealth Bill is the obligation of entities with a consolidated revenue of at least $100 million to publish modern slavery statements relating to the potential risks that exist in their operations and supply chains in relation to potential modern slavery.3
Unlike the Modern Slavery Act 2018 (NSW) (the “NSW Act”) introduced earlier this year, which imposes a penalty of up to 10,000 penalty units ($1.1 million) for failure to file a compliance statement,4 the Commonwealth Bill has no such sanctions. Instead, the Commonwealth Bill takes a “soft line” on enforcement. As Senator Nigel Scullion stated in the Second Reading Speech for the Bill, “[b]usinesses that fail to take action will be penalised by the market and consumers and severely tarnish their reputations”.5
How might this affect your business?
As compliance with the Commonwealth Bill will require an organisational level approach to assessing risk, human resource managers may be required to contribute to the process of producing modern slavery statements. Amongst other things, this will involve identifying the structure, operations and supply chains of the reporting entity, the risks of modern slavery throughout the entity’s operations and supply chain, assessing any risks and taking appropriate action.6
For NSW businesses, the requirement of a modern slavery statement as prescribed by the NSW Act is removed if the organisation is subject to a “law of the Commonwealth … that is prescribed as a corresponding law”.7 It is not yet clear whether the prospective Commonwealth legislation will be a “corresponding law” to the NSW Act, meaning that NSW businesses may be required to produce modern slavery statements on both a state and a federal level to satisfy both reporting regimes.
1 Joint Standing Committee on Foreign Affairs, Defence and Trade, “Hidden in Plain Sight: An inquiry into establishing a Modern Slavery Act in Australia” (2017) p 29
2 Attorney-General’s Department, “Modern Slavery in Supply Chains Reporting Requirement” Public Consultation Paper and Regulation Impact Statement (2017) p 6.
3 Modern Slavery Bill 2018 (Cth) s 5.
4 Modern Slavery Act 2018 (NSW) s 24.
5 Commonwealth, Parliamentary Debates, Senate, 18 September 2018, 17 (Nigel Scullion, Minister for Indigenous Affairs and Leader of The Nationals in the Senate).
6 Modern Slavery Bill 2018 (Cth) s 16.
7 Modern Slavery Act 2018 (NSW) s 24(9).
Therese MacDermott, Consultant and Rohan Burn, Graduate Associate
As part of the four-yearly review of modern awards, the Full Bench of the Fair Work Commission (“FWC”) has recently published a provisional model term that supplements the flexible working arrangement provisions of the Fair Work Act 2009 (Cth) (“FW Act”) (the “Model Term”).
This follows the FWC’s decision in March 2018 where it rejected a major overhaul of the right to request flexible working arrangements on the basis that what was being sought would effectively remove the ability of businesses to determine how to roster labour.
While acknowledging there was a significant unmet employee need for flexible working arrangements, the FWC settled on an approach that would see a model term incorporated into modern awards that would “facilitate” arrangements and raise awareness of the right, rather than offering an avenue to challenge a denial of a request. Hence, the end result is a proposed model term that sets out the process an employer must follow if it is responding to a request and gives the FWC a degree of supervision over this process, but no decision-making role in relation to the underlying decision to refuse the request.
Further submissions relating to any award-specific issues will be made within the next two weeks. Subject to these submissions, it is the FWC’s provisional view that all modern awards should be varied to insert the Model Term. That provisional view will only be displaced in respect of any particular modern award if it is demonstrated that there are matters or circumstances particular to that modern award that do not necessitate the inclusion of the Model Term.
Flexibility requests under the FW Act
Under section 65 of the FW Act:
- an eligible employee may make a written request for a change in working arrangements which sets out the details of the change sought and the reasons for the change;
- the employer must give the employee a written response to the request within 21 days, stating whether the employer grants or refuses the request;
- the employer may refuse the request only on reasonable business grounds; and
- if the employer refuses the request, the written response must include details of the reasons for the refusal.
Under this scheme an employer’s decision to refuse a request for a flexible working arrangement is not subject to any review or appeal. As a result, the FWC is unable to deal with a dispute about whether an employer had “reasonable business grounds” for refusing the request unless the parties have agreed in a contract of employment, enterprise agreement or other written agreement that the FWC can deal with the matter.
What will change with the Model Term
The proposed Model Term will apply to all categories of employees who make a request under section 65 of the FW Act, and is not confined to parents and carers only.
Of particular importance for employers are the following process aspects:
- before responding to the request, the employer must discuss the request with the employee and “genuinely try to reach agreement” on a change in working arrangements that will reasonably accommodate the employee’s circumstances having regard to:
- the needs of the employee arising from their circumstances;
- the consequences for the employee if changes in working arrangements are not made; and
- any reasonable business grounds for refusing the request;
- the written response to the request must include details of the reasons for the refusal, including the business ground(s) for the refusal and how the business ground(s) apply;
- if the employer and employee cannot agree (at (1) above) on a change in working arrangements, the written response must:
- state whether or not there are any changes in working arrangements that the employer can offer the employee so as to better accommodate the employee’s circumstances; and
- if the employer can offer the employee such changes in working arrangements, set out those changes in working arrangements;
- if the employer and the employee reached an agreement (at (1) above) on a change in working arrangements that differs from that initially requested by the employee, the employer must provide the employee with a written response to their request setting out the agreed change(s) in working arrangements; and
- disputes about whether the employer has discussed the request with the employee and responded to the request (as required) are to be dealt with under the consultation and dispute resolution clauses of the modern award.
As a consequence, a dispute resolution clause can only be relied on in respect of a dispute about whether the employer has discussed the request with the employee and responded to the request, rather than the substantive decision whether to grant the request.
While the Model Term (for the most part) may already reflect the practices that organisations engage in, it does:
- require employers to be mindful of the level of genuine deliberation and consultation they engage in with employees in responding to requests; and
- increase the regulatory burden in administering requests.
It is also likely that organisations may find that, in the bargaining context, employees (or their bargaining representatives) seek to build on the Model Term and expand its scope to include disputes about whether an employer had “reasonable business grounds” to refuse the request within the dispute resolution clause.
PCS recommends that organisations update staff who are responsible for dealing with these requests (particularly line managers) about these proposed changes and any practices that may need to be revisited as a result of these changes.
Organisations should also consider the impact of these changes on employees who are not award covered and consider whether it will treat all employee requests in accordance with the proposed Model Term, or whether it will adopt different approaches for requests by award and non-award employees.
Rohan Burn, Graduate Associate
Last fortnight the Queensland Strawberry Growers Association released a statement saying they had reason to suspect that a disgruntled ex-employee may have orchestrated a recent newsworthy incident where sewing needles were found in a number of strawberries.
This incident has caused employers to reflect on the commercial, reputational, and legal risks that arise from current and former employees who may be unhappy with their work environment. To mitigate against these risks, there are a number of proactive strategies that an employer can implement to protect their reputation and deter employees from breaching their obligations.
Building a reputable organisation takes years of time, dedication and vision, and just minutes to destroy. It takes just one employee, for example by sharing negative feedback online or breaching work health and safety obligations, to disrupt that reputation. Trust and respect within an organisation are crucial to mitigating against the risks and potential damage that a disgruntled employee may cause. Employers need to focus on creating and maintaining a healthy workplace culture and addressing behaviours that fall foul of acceptable conduct.
Appropriate performance management processes encompass both a risk management strategy and a mechanism for improving the performance of employees. Employers should provide employees with regular opportunities to discuss and respond to concerns as well as achievements. Ongoing communication facilitates a more transparent and mutually beneficial approach, where an employee is aware of and can align their performance and behaviours with an employer’s expectations and organisational values.
Where employees perceive performance management as inherently negative, the employer limits performance management to a process with a forgone conclusion; exiting an employee. In these circumstances, employees may feel unsupported by their employer and aggrieved by being labelled as a “poor performer”. Terminating an employee’s employment when they have a perception of organisational injustice can expose the business to additional risks, particularly if the employee is serving out any remaining notice period or has a “story” the media might be interested in.
The People Management Quadrants
The People Management Quadrants represent a holistic approach to the management of people issues in the workplace. Instead of only focussing on commercial outcomes and how they can be achieved within the law, employers should also consider what people may be feeling and thinking about an issue, and what message is being conveyed through the organisation’s people management strategy. For example, exiting a poor performing employee may make commercial sense and be legally permitted, but consideration should also be given to how the employee will react to the dismissal and how their colleagues will perceive that decision.
In some circumstances, the behaviours of one disgruntled employee can be understood as a manifestation of broader organisational conflict. Behaviours such as absenteeism, low morale, inefficiency, and sabotage may all be expressions of organisational conflict that need to be addressed on an on-going basis and not simply at the point where termination is being contemplated. However, where a decision is ultimately made to exit a particular employee, the employer should reflect on the circumstances that led to the employee’s exit and whether an audit of organisational policies and practices is warranted.
PCS can work with you and your leadership team to conduct a culture and effectiveness audit to identify gaps in your organisation and build a robust people strategy.
Meriska Lourens, Associate
The approach to characterising casual employment was the subject of a recent determination of the Federal Court of Australia. This decision necessitates that organisations review their engagement practices around casual employment.
The employee was a fly-in-fly-out truck driver and argued that he was a permanent full-time employee because his employment was continuous, predictable and determined in advance. On this basis he claimed to be entitled to payment for accrued annual leave when his employment was terminated.
The employer contended that:
- it engaged the employee as a casual under its Agreement (making him ineligible for annual leave and other entitlements);
- the employee was engaged by the hour and could choose when and where to work;
- the Agreement described the employee as a casual; and
- both it and the employee regarded his employment to be of a casual nature.
The Court was asked to consider whether Parliament intended the words “casual employee” in the legislative provision granting the entitlement to annual leave to be used in their ordinary sense, their legal sense or a specialised non-legal sense.
Ultimately the Court found in favour of the employee and settled on a characterisation of “casualness” as involving an “absence of a firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work“.
The rationale for this is that employees who don’t have this firm advanced commitment will have the capacity to enjoy breaks from work when they choose, and therefore do not need to be guaranteed annual leave.
What a “no firm advance commitment” looks like
The Court outlined a range of indicia relevant to a characterisation of casualness, including:
- irregular work patterns;
- intermittency of work; and
The decision has led employer groups to call for changes to prevent casual workers “double dipping” by claiming annual leave on top of a casual loading, and for a clear definition of “casual employees” in the legislation.
Unions have responded to the decision stating that there could be a sizable proportion of employees who have been incorrectly characterised as being engaged casually, and that those that have been in regular and predictable work patterns may be entitled to paid annual leave.
PCS recommends reviewing how your organisation engages with its casual workforce. It is risky for organisations to rely simply on the fact that an employee has been engaged on an hourly basis or that the applicable award or agreement provides for a definition of casual employment where this does not match the actual form and manner in which casuals are in fact engaged.
Mental health issues can have a resounding impact on productivity, performance and culture within workplaces of all sizes and industries. Approximately 21% of Australian employees have taken time off in the past 12 months for mental health reasons and this has a significant impact not just for the employees, but their colleagues, managers and the rest of the workplace.The effect that mental health conditions, such as depression and anxiety, can have on Australian business is estimated as being approximately $11 billion per year1. This calculation is based on figures for absenteeism, presenteeism, reduced work performance, increased turnover rates and compensation claims.
From a legal standpoint, employers owe a number of obligations to employees regarding their psychological health at work.
Under work health and safety legislation employers must provide a safe and healthy workplace and take action to eliminate and minimise any potential risks to the health and safety of all employees and those present at the workplace. This is not confined to the physical environment but extends to psychological impacts as well.
In relation to mental illness, the obligations include:
- identifying possible workplace practices, actions or incidents which may be causing, or contributing to poor outcomes for workers in terms of their mental health; and
- taking actions to eliminate and minimise those risks.
Under state and federal anti-discrimination laws employers have an obligation to make reasonable adjustments for employees with disabilities to enable them to perform the inherent requirements of their job. Examples of such adjustments include offering flexible working options or changing aspects of the workplace arrangements or practices. However, an adjustment is not required if it would impose an “unjustifiable hardship” on the employer, or the employee would not be able to perform the inherent requirements of the job even with such adjustments.
The Fair Work Act 2009 (Cth) also provides protection for employees with mental health illness from adverse action taken by an employer because of their disability. Potential forms of adverse action include dismissal, refusing to employ a prospective employee or discriminating against an employee.
Responding at the workplace level
There is no “one size fits all” approach to implementing strategies that promote a mentally healthy workplace. Common organisational responses include:
- Employee Assistance Programs;
- flexible work arrangements;
- policies which address mental health issues; and/or
- mental health leave (via personal leave and/or the implementation of mental health days).
These types of strategies are designed to assist employees to manage their mental health issues and, more broadly, to enhance the prospect of a healthy workplace.
On a more individual level, a commitment by employers to properly address the mental health issues of their employees is fundamental, not only in employers meeting their legislative obligations, but also for all employees to flourish in their employment. Employers should ensure that the needs of employees who are experiencing mental health issues are understood, that the impact of workplace practices on these issues are monitored, and that employees receive the support they require. This may necessitate adjustments being agreed to between the employer and employee, and efforts made to keep under review workload distributions, hours and leave arrangements.
We recommend that employers consider the following dos and don’ts in their approaches to mental health in the workplace:
1. Blackdog Institute and beyondblue (2016), “Developing a mentally healthy workplace: A review of the literature”, Report prepared for the National Mental Health Commission, Sydney.
Daniel McNamara, Graduate Associate and Rocio Paradela, Graduate Associate
Businesses that operate in Victoria need to be mindful of recent legislative changes in this jurisdiction. Two areas subject to change in Victoria are changes to long service leave entitlements and the new labour hire licensing framework.
Long Service Leave
The Victorian Parliament has passed new long service leave legislation, replacing the existing Long Service Leave Act 1992 (Vic) (the “LSL Act“). The provisions are likely to become operational later this year.
What are some of the major changes?
- Employees will be entitled to take long service leave after completing seven years’ continuous employment instead of 10 years.
- Both paid and unpaid parental leave will count as service (other than in the case of a casual or seasonal worker).
- An employee can request to take long service leave for a minimum period of one day, although an employer may refuse such a request if the employer has reasonable business grounds to do so.
- Continuity of service will not be broken where a casual or seasonal employee:
- takes up to two years’ parental leave (whether paid or unpaid);
- obtains the employer’s agreement in advance to an absence;
- has a break which is impacted by seasonal factors; or
- has been engaged on a regular and systematic basis and has a reasonable expectation of being re-engaged.
In addition, if an employee’s working hours have changed during the two years immediately before taking long service leave, the employee’s normal weekly number of hours is the greater of: the average weekly hours worked over the past 52 weeks (one year), 260 weeks (five years) or the last period of continuous employment.
Criminal liability has been established with respect to breaches of a number of obligations under the LSL Act. This includes where an employer takes adverse action against an employee because the employee is entitled to long service leave or other entitlements under the LSL Act.
The LSL Act also provides for accessorial liability of certain officeholders of a corporation where they are shown to have been knowingly involved in the commission of an offence by the corporate entity.
Labour Hire Licensing
Victoria is continuing the trend of other states, such as South Australia and Queensland, with the Labour Hire Licensing Act 2018 (Vic) (the “Licensing Act”) receiving Royal Assent on 26 June 2018.
What are some of the major changes?
Similar to labour hire licensing legislation in other Australian states, the core features of the Licensing Act include:
- the mandatory licensing of labour hire organisations operating within Victoria;
- the requirement of labour hire licensing organisations to meet a “fit and proper person” test to ensure that minimum standards are met;
- penalties imposed on non-compliant labour hire organisations and on individuals/organisations engaging with non-compliant labour hire organisations; and
- the establishment of a Labour Hire Licensing Authority (based in Bendigo) and the Office of the Labour Hire Licensing Commissioner.
A Federal labour hire system?
The Federal Labor party has promised, as an election pledge, to introduce a uniform federal scheme that would guarantee the same pay and conditions for labour hire workers as award-covered employees throughout Australia. In addition, under this model, labour hire organisations would need to demonstrate compliance with relevant workplace legislation (including the Fair Work Act 2009 (Cth) and tax, superannuation, WHS and immigration laws) in order to maintain a license.
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.