Australian employers must rethink sexual harassment protection as new law comes into force

The Australian Human Rights Commission (AHRC) now holds extended powers of investigation, compliance and enforcement to ensure employers comply with the positive duty to eliminate sexual harassment at work. Employment law expert Neil Napper of Pinsent Masons said that the new positive duty now enforced by these powers will enhance the accountability of employers.

A ‘positive duty’ means that employers are required to take reasonable and proportionate measures to eliminate sexual harassment and other unlawful sex discrimination as far as possible. These new provisions are included in the Australian Human Rights Commission Act 1986 and the Sex Discrimination Act 1984.

Australian employers are already obliged under work health and safety legislation to ensure as far as reasonably practicable that workers are not at risk from sexual harassment and other psychosocial safety risks, such as bullying.

With the commencement of the AHRC’s new powers, employers may be subject to inquiries about their compliance with the positive duty. Compliance notices requiring remedial action may be issued to employers by the AHRC for a failure to comply.  Employers who do not comply with a compliance notice may face legal proceedings. The AHRC may also enter into enforceable undertakings with employers that may be published on the AHRC’s web site. A representative body, such as a union, can act for a complainant during conciliation and court proceedings.

To help ensure compliance with the positive duty and minimise the risk of AHRC action, employers should consider sexual harassment and other unlawful sex discrimination at work as a health and safety issue as well as a discrimination and employment issue to ensure their positive duty is met. Employers should also take a “risk assessment” approach to dealing with the issue, for example working to identify workplace hazards and risks arising from them, implement control measures to eliminate or minimise the risks, and review, assess and amend controls as necessary. It is also important to make sure workplace behavioural standards are clear, their policies and procedures are up to date, reviewed regularly and management and workers have received appropriate, timely education and training.

Employers should have robust data gathering, investigation and reporting procedures including a confidential and secure, possibly anonymous, complaint tracking and monitoring system as well as the ability to deal with risks and complaints seriously, quickly and empathetically.

The powers come into force just days after employers were barred from using certain kinds of fixed term contracts. Employers using those contracts must provide workers with permanent employment.

Fixed term contracts are prohibited in circumstances where the period of employment is greater than two years or if a contract for an existing employee is renewed in which the employee is employed for more than two years. Those employed under more than two consecutive fixed term contracts cannot be issued a fixed term contract. This applies even when previous terms have been short, for example back-to-back three-month fixed term contracts. Employers will no longer be able to issue an employee contract containing more than one extension, with existing employees now protected against a fixed term contracts if an extension option has already been exercised.

If a prohibited fixed term contract is entered into on or after 6 December, it is unlawful, exposing the employer to potential legal action and the end date of the contract becoming void.

Neil Napper said: “Prohibitions also apply to employees who are currently on a visa. If any of the prohibitions apply, the employee’s contract would need to convert to a permanent contract, subject to ongoing working rights within Australia.”

There are some exemptions to these limitations including situations where a contract applies to a role requiring specialised skills, with a distinct and identifiable task. Contracts for roles meeting the annual high-income threshold, currently A$167,500, are not subject to the limitation. Also, contracts for roles covering temporary absence of another employee, such as maternity leave, or in an emergency situation, are exempt, as well as situations where an employee is working in relation to a training arrangement. Visa 457 holders, workers who hold a specialised skill in which the Australian market has a genuine shortage, are also exempted.

In a surprise development, given the Senate was due to review and report on it in February 2024, the federal government succeeded in having a shortened form of its Fair Work Legislation Amendment (Closing Loopholes) Act 2023 passed by both houses of parliament on 7 December 2023.

The amended act introduces several main changes to the Fair Work Act 2009. This includes the fact that small business redundancy exemption will not apply in certain insolvencies. New powers have also been provided for the Fair Work Commission to make “same work, same pay” orders for labour hire workers.

The act also introduces “union-friendly” rules enhancing the rights of workplace delegates to communicate with and represent workers and to attend paid training and introducing a new right of entry for union officials to assist health and safety representatives.

Prohibiting discrimination against workers subject to family and domestic violence is also part of the amendments as well as criminalising “wage theft” with potential 10 years imprisonment.

Other changes made by the amended Act are to the Asbestos Safety Eradication Agency Act 2013 (Cth) to expand the functions of the Agency regarding silica safety and silica-related diseases to be more aligned with those concerning asbestos. The changes also amend the Safety, Rehabilitation and Compensation Act 1988 (Cth) to provide presumptive liability provisions for first responders such as paramedics who suffer from PTSD as well as the Work Health and Safety Act 2011 (Cth) to introduce the offence of “industrial manslaughter” and amend the Act’s offences and penalties regime.

A number of other significant proposed changes, not included in the amended act, are on the horizon for employers in the first quarter of 2024 including a new definition of casual employment and increased rights for employees to convert to permanency, measures to prohibit sham contracting prohibitions and new definitions of ‘employer’ and ‘employee’.