This quarter, there has been a lot of movement and change in the workplace relations and safety space which is likely to have significant and ongoing implications for your workplaces. From split Closing Loopholes bills, enforceable positive duties to prevent sexual harassment and new safety precedents, there is a lot to catch up on. So let’s jump into it.

NEW LEGISLATION

‘Closing Loopholes’ Bill

As you will be aware from the media reports, following an agreement between the Federal Government and key crossbench senators, the Closing Loopholes Bill was effectively “split” into two Bills, with the first being passed by the House of Representatives on 7 December 2023, and the second to be considered by the Parliament next year.

The elements included in the Bill passed include:

• The same job same pay amendments (referred to in the Bill as “closing the labour hire loophole”) which allow application to the Fair Work Commission for orders to enable labour hire workers who perform the same job alongside employees of a host employer to receive the same pay under the host’s employment instrument (such as an enterprise agreement). The Bill includes that the Commission must not make the order unless it is satisfied that the work is not or will not be for the provision of a service, as distinct from the supply of labour, having regard to specified matters in reaching that level of satisfaction. The Commission will be able to make these orders from 1 November 2024.
• An exception to the small business redundancy exemption providing that it will not apply where employers become a small business employer because of insolvency, bankruptcy or liquidation processes and associated terminations.
• A Federal criminal offence for wage theft, including in relation to superannuation, with effect from 1 January 2025, where the conduct is intentional and proved to the criminal standard of beyond reasonable doubt. Penalties are significant and include up to 10 years’ imprisonment for individuals, or fines of up to the greater of 300% of the underpayment amount or amounts in excess of $1.5m for individuals and $7.8m for body corporates (on current penalty unit amounts).
• Introduction of an offence of industrial manslaughter into the Commonwealth Work Health and Safety Act 2011, and significant increases to all penalties under that legislation, along with other safety changes including expanding the work of the Asbestos Safety and Eradication Agency to also capture silica safety and related diseases and changes to the Safety, Rehabilitation and Compensation Act related to PTSD suffered by first responders.
• Significant expansion of workplace delegates’ rights, including requiring that:
• by 30 June 2024 all modern awards contain a “delegates’ rights” term; and
• enterprise agreements from 1 July 2024 (ie where the request to vote is on or after that date) include a delegates’ rights clause that is at least as favourable as that in the modern award,

along with introducing new workplace rights for delegates (which will enable associated general protections/adverse action claims).

• Explicitly providing that union officials who assist a health and safety representative on request under a provision of a State or Territory OHS law are not required to have a Federal right of entry permit in order to do so, expanding potential right of entry for union officials who are not permit holders.
• Strengthening protections against discrimination for employees subject to family and domestic violence.

The remaining measures to be considered in the second part of the Bill (to be known as the Fair Work Legislation Amendment (Closing Loopholes No.2) Bill 2023 will include:

• A new definition of casual employment proposed to overturn the High Court’s decision in Rosato and revert to a “multi factorial”/“essence of casualness” test (including reinstating the relevance of post contractual conduct as to the “real” nature of the relationship). Casual employees will also have new notification rights to convert to part time or full-time employment, which will sit alongside the current casual conversion regime.
• A new definition of “employee” and “employer” – again overturning the High Court’s decisions in Construct and Jamsek to reinstate a “multi-factorial” test (including the relevance of post contractual conduct as to the “real” nature of the relationship).
• New minimum standards orders (MSOs) to be made by the Fair Work Commission (FWC) for road transport industry participants and “employee-like” workers (gig economy workers). Additionally, road transport industry participants and “employee-like” workers will have the ability to contest unfair terminations/unfair deactivations in the FWC in a newly created jurisdiction.
• More enterprise bargaining reforms, changing the interaction between new single and current multi-enterprise agreements – essentially requiring a union’s agreement to ever exit the multi enterprise agreement and that any new single enterprise agreement ensures all employees are better off overall compared to that multi enterprise agreement.
• Amendments to the defence for “sham contracting” where an employer disguises an employment relationship as a contractor relationship.
• A new jurisdiction in the FWC which will allow contractors to challenge unfair contract terms in contractor agreements and seek to have their contracts varied or voided to the extent that they are held to be unfair.

We will of course provide further updates as these aspects are considered by the Parliament on resumption in 2024.

Respect@Work

In 2022, Parliament conducted a reform process to review the federal anti-discrimination laws that protect people in workplaces from harmful behaviour and conduct.

The Respect@Work National Enquiry found that the legal framework dealing with these issues under the Sex Discrimination Act 1984 (SD Act) was ineffective at preventing sexual harassment, as the law took a reactive approach by requiring employers to demonstrate actions they have taken to attempt to prevent behaviors such as harassment in the workplace after the incident has occurred, rather than before.

Recent reforms to the SD Act mean that employers and businesses must now take a proactive approach to preventing the conduct from happening in the first place, and employers and businesses can be held accountable without a complaint being made.

This proactive approach places what is known as a ‘positive duty’ on employers to take reasonable and proportionate measures’ to eliminate as far as possible conduct that includes:

• Discrimination on the ground of sex;
• Sexual harassment;
• Sex-based harassment;
• Conduct creating a workplace environment that is hostile on the ground of sex; and
• Related acts of victimisation,

The FWC has the authority to enforce compliance with the positive duty in the SD Act from 12 December 2023 and employers can be held vicariously liable for the actions of their employees and agents.

The Australian Human Rights Commission has issued a set of guidelines for employers in order to assist them in meeting their positive duty under the legislation. We have prepared a checklist of actions that we recommend you can take to satisfy the requirements, so please contact us if you would like a copy.

ENTERPRISE AGREEMENT UPDATES

Bonus payments and misrepresentations in EAs

The Full Bench of the FWC recently considered an appeal of a decision to approve an enterprise agreement, on the basis that the enterprise agreement was not genuinely agreed by employees covered and that it contained misrepresentations.

The key issue was that the employer in this case made comments to the effect that a bonus payment would be paid to all employees employed at the time the enterprise agreement was voted on (and voted up), when the reality was that the bonus payment would only be paid to those employed at the time the agreement was approved by the FWC.

The employer made entirely accurate representations about the effect of the bonus payment during the access period, however this was held to not be sufficient to cure the misrepresentation.

Additionally, the employer proposed an undertaking to pay the bonus to all employees who were employed at the time of the vote (ie consistent with the representation which was of concern) but interestingly this was not accepted and the earlier decision to approve the agreement was quashed.

This decision reinforces the importance of ensuring that any explanatory material provided in relation to an enterprise agreement is completely clear, correct and accurate and does not mislead employees. A slight slip in this context can result in an enterprise agreement being rendered incapable of approval.

Back-pay and retrospective EAs

The decision of the Full Court of the Federal Court of Australia in Murtagh v Corporation of the Roman Catholic Diocese of Toowoomba [2023] FCAFC 17 is another important decision in the enterprise bargaining space, which involved former employees being successful in a claim for unpaid wages in relation to an enterprise agreement that never applied to them.

In this case, the two employees were not employed by the employer at the time the enterprise agreement commenced operation. However, the enterprise agreement provided for staged salary increases, with the first to be effective from 1 July 2019, and the employees were employed at that time.

The Full Court held that the proper construction of the enterprise agreement meant that the employees were in the class of “applicable employees”, being employees covered by the enterprise agreement at a given operative date, relevantly here 1 July 2019. The Full Court held that the obvious intent of the enterprise agreement was that, once it was approved and became operative, there would be a “seamless transition” between the previous pay rates and the new ones applicable in respect of work performed on and from 1 July 2019.

This decision contains some interesting discussion by the Full Court of the provisions of the Fair Work Act 2009 (Cth) (Fair Work Act) regarding an enterprise agreement covering and applying to employees, and when an enterprise agreement is in operation.

We will keep you updated as to any potential appeals to the High Court arising from the decision but, in the meantime, recommend that employers are explicit in any backpay clauses in their enterprise agreements about who will and won’t be entitled to the backpay, including whether it will or won’t be paid to employees who were employed at the effective date of an increase but not at the time the agreement comes into operation.

SAFETY UPDATE

Clarification from the Federal Court on what it means for union officials to be “accompanied” on construction project sites

The Federal Court of Australia in Fair Work Ombudsman v Rielly [2023] FCA 1144 made pecuniary penalty orders against Dean Rielly (who was a union official at the time of the conduct) and the CFMMEU (for its involvement and vicarious liability for the official’s conduct) in contravening s500 (ie permit holder must not hinder or obstruct) of the Fair Work Act by breaching the site rules at a motorway upgrade construction project site on the M1 Motorway in Queensland, which required all visitors be accompanied by a fully inducted company representative at all times.

Rielly was ordered to pay a pecuniary penalty of $8,500 and the CFMMEU was ordered to pay $58,000 to the Commonwealth.

Deal Rielly (union official and WHS entry permit holder at the relevant time), attended the project site purporting to exercise a right of entry under s117 of the Work Health and Safety Act 2011 (Qld) to consult with workers on the project site in respect of a suspected failure by the company to comply with the Act.

The union official’s unaccompanied conduct

Whilst in discussions with company representatives on the project site, the entry permit holder walked unaccompanied towards two diggers which were approximately 100 metres away. One of the digger’s engines was running and both their amber lights were flashing. A company representative requested that the union official stop as it was unsafe to go near the diggers. The union official continued to approach the diggers and walked within the radius of an excavator bucket. In that same vicinity, other heavy machinery was located within an area of about 100 metres at that time, including an additional digger, two rollers and two trucks. The union official then walked into the vicinity of the operating plant and machinery. He walked alongside the work area and approached a worker who was operating a roller. He then approached four parked trucks, moving in between the trucks in an attempt to engage in conversation with the drivers, including a driver who was reversing a truck at the time. Other trucks were also moving in the vicinity at that time.

Asphalting works were temporarily halted due to the union official’s proximity to the works.

Prior to the liability hearing, the union official admitted that his conduct, when walking away from the representatives of the company towards the diggers and walking towards the asphalt area, was “unaccompanied” and a contravention under the Act. The CFMMEU also admitted liability for the union official’s conduct.

The purpose of the site visitor escort requirement in the Site Rules was to assist the company to comply with its workplace health and safety obligations by managing risks associated with the carrying out of the work on the project site in accordance with Part 3.1 of the Work Health and Safety Regulation 2011 (Qld) . This included minimising risks to health and safety, so far as reasonably practicable by controlling visitors who may be unfamiliar with the Project Site and safety hazards while they were visiting.

What “to accompany” means

His Honour Thomas J at [36] stated:

“In my view, being accompanied requires more than physical proximity to another person. To “accompany” requires an element of escorting, going along with, joining and being in the company of another person.”

Takeaway

This decision confirms the rights, consistent with WHS duties, of PCBU’s in control of construction projects to arrange for and require union officials to be escorted by a company representative whilst on site in accordance with site safety rules and to not wander off on their own agenda on site which exposes them to safety risks arising from construction activities.

Right of entry notice not required in ACT for post entry identified suspected breach

In Construction, Forestry, Maritime, Mining and Energy Union v Canberra Contractors [2023] FedCFamC2G 754 (24 August 2023) a company required CFMMEU union officials to re-enter a site and issue a new right of entry notice for safety protective barriers issues that were not on the original right of entry notice, and refused to allow them to inspect the walkway barrier. Once the CFMMEU completed a new notice, the company still refused entry until a WorkSafe ACT inspector arrived on site to adjudicate the matter. The union officials left before the inspectors arrived.

The CFMMEU officials suspected breaches regarding the site’s amenities after officials had received complaints the toilets were not being cleaned. While walking through to inspect the toilets, the officials noted that a walkway was only marked by star pickets and small flags, and there were no protective barriers between pedestrians and vehicles driving by.

In our view the additional subclause in s118(5) of the Work Health and Safety Act 2001 (ACT) (WHS Act), which does not appear in the other harmonised jurisdictions’ work health and safety legislation, was critical to the outcome of these proceedings and the finding of the company’s breach.

Section 118(5) of the WHS Act states:

“If, in the course of inquiring into a suspected contravention of this Act, the WHS entry permit holder reasonably suspects that another contravention of this Act has occurred, the WHS entry permit holder may exercise a right mentioned in subsection (1) in relation to the other contravention.”

Section 118(1) of the WHS Act sets out the rights that may be exercised by a WHS entry permit holder at a workplace, including to inspect any structure or other thing relevant to a suspected contravention.

The Court found that the company breached s502 (a person must not hinder or obstruct a permit holder exercising rights under the WHS Act) and s503 (a person must not misrepresent about authorised things under the WHS Act) of the Fair Work Act.

The issue of penalties was to be dealt with separately.

Takeaway

In jurisdictions (other than the ACT) where (as set out above) there is no s118(5) equivalent in the applicable WHS legislation, in our view, a PCBU in control of premises may require a union official to return to reception and issue a new entry notice of contravention to exercise entry powers for an alleged contravention not covered by the original entry notice, without breaching the obstruction provisions in the Fair Work Act.

Entry notice to inspect employee records must specify how documents sought are directly relevant to the suspected contravention

The case of New South Wales Nurses and Midwives’ Association v Mid North Coast Local Health District (WHS Right of Entry Dispute) [2023] NSWIRComm 1099 (6 October 2023) concerned a WHS right of entry dispute about WHS entry permit holders inspecting and copying documents relating to working conditions at mental health facilities of the Mid North Coast Local Health District in NSW (PCBU).

WHS entry permit holders issued Entry Notices to the PCBU which included the following suspected contravention of the WHS Act 2011 (NSW):

“s 19 – Failure to ensure the health and safety of nurses at Coffs Harbour Acute Mental Health inpatient facility & Community Mental Health arising from exposure to occupational violence and failure to manage psychosocial hazards including work overload; poor support and remote and isolated work.”

In response to the request for production of documents, the PCBU produced records with employees’ names removed or redacted and patient health information removed.

The failure of the Entry Notices to include a declaration that satisfied Regulation 29 of the WHS Regulation 2017 (NSW) that the records and documents proposed to be inspected relate to the suspected contravention, prevented inspection and copying of documents pursuant to s120(2) of the Work Health & Safety Act 2011 (NSW). Further the Commission found that the Notices were not sufficiently particularised, as required by subregulation 29(a). It was necessary for the Notice to particularise not only the nature of the suspected risk to health and safety (which was done), but also the reasonably practicable measures which the WHS entry permit holders suspected were not being taken to eliminate or reduce the risk or, at least, the suspected ‘source’ of the risk.

The NSW Industrial Relations Commissioner Janet McDonald issued a caution to PCBU’s at [16]:

“ …a PCBU should generally be slow to consider, given the object of the WHS Act and the important purpose for which WHS entry permit holders are permitted to enter a workplace, that a WHS entry permit holder does not have a reasonable suspicion of a contravention, or that the Notice does not comply with reg 29, simply because the particulars of the convention are not as detailed as it would like. Even under s 120 and reg 29, a WHS entry permit holder is only obliged to provide particulars of the suspected contravention “so far as is practicable”. What is practicable will vary in each and every case. In this case the WHS entry permit holders had considerable detail as to why they suspected the MNCLHD were failing to ensure, so far as was reasonably practicable, the health and safety of workers, however they failed to provide that detail in the Notices.”

Further, the Commission at [190] commented that documents will require redaction of that part that comprises the employee record and if the documents contain health information, that information would need to be redacted, but only where this does not require the creation of bespoke documents that do not exist.

Takeaway

The Entry Notice must contain details as to why it is suspected the PCBU is failing to ensure, so far as was reasonably practicable, the health and safety of workers. Notices that only point to a suspected failure to manage risks arising from hazards, without identifying specific incidents or breaches, cannot be remedied by the entry permit holder expanding or elaborating on the particulars during the entry post the provision of the notices.

Record $2.1m fine and conviction for a company on a guilty plea in the County Court of Victoria

In early November 2023, an industrial component manufacturer and its director in Victoria were convicted and fined a total of $2.24 million. The company was convicted and fined on one charge of reckless endangerment and the director placed on a five year Community Corrections Order.

The sole director of the company instructed a 20-year-old apprentice to use a plastic sleeve to steady lengths of steel pipe that he was threading on a metal turning lathe. The apprentice was holding the plastic sleeve on the end of a pipe that protruded nearly 1.5 metres from the rear spindle of the lathe and was struck when the pipe bent and whipped. He was placed in an induced coma, airlifted to hospital and underwent surgery for serious head injuries. A summary of the judgement is available here.

We are observing a greater number of prosecution cases (which do not involve fatal incidents) being commenced in the committal stream, rather than being tried summarily. In the committal stream the maximum penalty cap for reckless endangerment ($3.6 million for a body corporate) is higher than in the summary stream in the Magistrates Court.

Clearly such a significant financial penalty is a potential business stopper for a small business with little to no profit margin in the current economic conditions.

The previous record penalty in Victoria for a company for a single offence was $1 million in the prosecution case of DPP v Toll Transport Pty Ltd [2016] VCC 1975 (14 December 2016) where a stevedore was crushed by a MAFI flat trailer when loading shipping vessels.

OTHER UPDATES

What is ‘work’?

In September a decision in the Fair Work Commission considered what defines ‘work’ and therefore, whether employees should be paid for certain activities that are associated with, but fall outside of the realm of, their employment.

The case of Australian Nursing and Midwifery Federation v Johnson Stenner Aged Care Pty Ltd t/a New Auckland Place [2023] FWC 943 concerned a dispute relating to the requirement for nurses working in aged care to take ‘RAT’ tests at the beginning of each shift to protect the heath and safety of the residents, themselves and third parties. The ANMF claimed that nurses were spending up to 20 minutes each day in their personal time taking the tests, and that this activity should fall (i) within the meaning of ‘performing work’ to which the relevant enterprise agreement applied, and (ii) the nurses should therefore be paid for this time.

However, the FWC determined that while the direction for employees to undertake a RAT test was reasonable and within the scope of their employment, not every incident of employment duty attracts an entitlement to payment under the applicable industrial instrument.

The enterprise agreement also included at clause 11.1:

‘An employer ‘may direct an employee to carry out such duties that are within the limits of the employee’s skill, competence and training, consistent with the respective classification’.

It was determined that taking RAT tests outside of working hours was a necessary daily task to maintain the ‘promotion of health’ and ‘prevention of illness’ within the definition of Nursing under the agreement and did not create a separate entitlement to payment.

The fact that taking a test takes no more than a minute and the ’15-minute waiting time’ allows employees to do other things was also a factor. Perhaps other activities outside of employment in other industries that require more time would be considered ‘work’ and attract eligibility for payment.

The key takeaway here is that, at times, employment will involve ‘minor or incidental duties’ that are required to be performed outside of work hours without payment specific to the industry norms and content of the relevant industrial instrument.

Withdrawal of overtime and the Commission’s power to arbitrate

In August, the Fair Work Commission dealt with the capacity of the Commission as a private arbitrator to award monetary relief. In AMWU V Civmec Construction & Engineering[1], a dispute arose regarding Civmec’s withdrawal of rostered overtime for employees working on a particular project. The relevant enterprise agreement set out the circumstances where overtime could be withdrawn on a weekday and set out a typical weekday consisted of 7.2 ordinary hours, 0.8 RDO accrual hours and 2.25 hours paid at overtime totalling to 10.25 hours.

On 1 June, employees working on the project were told they would not be paid for the full day of 10.25 hours and would only be paid for their ordinary hours worked. Under the enterprise agreement, in order for overtime to be withdrawn from employees on a weekday, 2 hours’ notice must be provided. The AMWU alleged that the required notice was not provided and therefore the employees were entitled to payment for the full 10.25-hour work day regardless of whether they actually worked or not. The parties asked the Commission to arbitrate the question in dispute.

While the parties put the question of ‘whether the employees are entitled to be paid for withdrawn rostered overtime hours pursuant to the agreement’ to the Commission, the Commission instead put the main issue forward as ‘what is the proper construction of the agreement as it ought to have applied’ on the day in question.

The agreement provided in its grievance procedure that the matter can be referred to the Commission for conciliation or arbitration for resolution. On failure of an attempt to conciliate, the matter was approved for arbitration by the Commission pursuant to the agreement.

Civmec submitted evidence that on the day in question, bad weather affected the construction site, and it was in the best interest of the workers’ safety to withdraw overtime for the day and send the workforce home immediately. It claims to have notified the workforce immediately upon making the decision at around 12:45pm and all reports and personnel were informed within 15 minutes.

The employees’ rostered overtime was expected to begin at 3pm so in order to meet the 2 hour notice period under the agreements, employees needed to be notified of their overtime withdrawal by no later than 1:00pm.

The agreement also includes provisions that Civmec must have a good reason for withdrawing rostered overtime and, if not, it must still pay the employees the overtime amount as if it was worked. While this was not disputed, the AMWU argued that Civmec needed to notify employees by 1pm at the latest to meet the 2 hour time frame, notice was not given until 1:15pm and therefore the employees needed to have been paid as if they worked the overtime.

The Commissioner referred to the principles established in Berri[2], namely that in a situation where a term (such as ‘overtime’ or ‘good reason’) is undefined, it ought to be interpreted according to its ordinary meaning unless there is a contrary indication.

The employee swipe cards of the witnesses called showed their clock off times as 1:05pm, 1:08pm and 1:11pm. Therefore, the evidence around when they were notified to go home is likely before 1:00pm but imprecise and unclear.

The Commission ordered Civmec to pay rostered overtime which was withdrawn on the day in question to the relevant employees who reported to a construction manager.

Termination payments in lieu of notice

Finally, although this is not a new issue, we have received a number of queries recently regarding the timing of the requirement to make payment in lieu of notice of termination.

This issue was highlighted by the recent decision of the Federal Court in Southern Migrant and Refugee Centre Inc v Shum (No 3) [2022] FCA 481 (Shum). The Court held in Shum that, in circumstances where payment in lieu of notice was not paid to the employee until 4 days after the employment attended, the employer was exposed to a potential penalty for breaching s117(2) of the Fair Work Act, which provides that an employer must not terminate an employee’s employment unless the minimum required notice is either given or paid in lieu (and which forms part of the NES).

While failure to pay in lieu of notice on the day of termination does not change the date of termination, to ensure compliance with the NES (and to avoid the risk of a penalty) it is necessary that employees are paid any pay in lieu of notice they are entitled to under the NES on or before the day termination occurs (rather than any subsequent pay run or pay period).

REVIEW – WORK HEALTH SAFETY MANAGEMENT SYSTEMS

When did you last review your work health safety management system?

Safety regulators can, and do, conduct unannounced safety checks. Recently, the QLD safety regulator conducted an unscheduled audit of 11 businesses and found that none of them were fully compliant with their health and safety duties. The authority issued 70 improvement notices, and identified 17 safety issues which were rectified immediately, with another 4 businesses subject to enforcement action for more serious issues (including on the spot fines). A number of the issues identified related to the use of unsafe equipment. The businesses the subject of the audit will be subject to ongoing compliance checks to ensure identified issues are rectified promptly.

With the work health safety regulatory landscape shifting during the past year, we strongly recommend that all our clients review their WHSMSs for compliance not only with new laws which have come into effect this year, but also to ensure that their WHSMS, processes and procedures adequately address industry-specific high risk activities.

If you need our help, please don’t hesitate to contact us.