January 2019

A lively year ahead in workplace law and culture

2019 is poised to be a dynamic year for workplaces in Australia.

After years of inactivity, some significant legislative change may be in the wind. Workplace change will be driven by the public’s notion of ‘a fair go’, seeking to restore a perceived imbalance between business and workers. Whatever your perspective, there is a workplace system that is, in many respects, broken.

We can also expect some clarity on legal issues where there has been recent uncertainty. Workplace culture and broader social issues will continue to be tested in industrial tribunals and the media.

In this bulletin, we look at seven key areas that we see as important for business and workplaces to watch in 2019.

New approaches

We are likely to see new approaches to workplace matters.

1. A new government and new laws by the end of 2019

Bookies and polls suggest it is a fait accompli that Australia will have a new Federal labor government by mid-year.

The ALP has foreshadowed many significant changes including restoring penalty rates, cracking down on ‘dodgy’ labour hire (meaning labour hire companies must provide workers the same pay and conditions as those employed directly) and stopping sham contracting and ‘fake’ casuals (so that workers can’t be forced to be ‘permanent casuals’, and companies can’t avoid their obligations). A preference for the industrial relations of old driven by the objective of fairness for workers.

Changes will be made in support of unions. The ALP will abolish the Australian Building and Construction Commission, as well as the union watchdog, the Registered Organisations Commission. Enterprise bargaining will be reformed. Changes proposed include a return to pattern bargaining and other increases in union power, including making it easier to strike and giving easier access to workplaces.

There will also be much focus on closing the gender pay gap. The ALP proposals include requiring big business to report on their pay gap publicly.

2. New modern award provisions

The four-yearly review of modern award will end this year after more than four years! And because of legislative amendments late last year, there are no more four-yearly reviews.

Some changes already made include:

  • All employees are now entitled to 5 days unpaid leave to deal with the impact of family and domestic violence.

  • A model casual conversion clause was inserted into modern awards permitting a casual employee to receive notice of their ability to request to convert to permanent employment if they have been engaged regularly over a period of at least 12 months (but employers can refuse the request if there are reasonable grounds).

  • A flexible working arrangement model term was inserted into modern awards changing the way an employer is to deal with a flexible working request by requiring an employer to meet and discuss the request with the employee to try to reach agreement on the request. A written response must still be provided within 21 days of the request.

  • A new model term was inserted in modern awards which provides that termination payments must be paid within 7 days after the employment ends.

Some other areas that may obtain attention this year include changes resulting from the plain English re-drafting of awards and changes to annualised salaries provisions. The remaining modern award under review should also be finalised.

Social issues remain relevant

Driven by notions of equality and fairness, business will find it impossible to not have an eye on social issues.

3. Fair wages and no wage theft

Underpayment of wages or ‘wage theft’, will continue to receive attention this year. Expect the Fair Work Ombudsman to test the serious contravention provisions in the Fair Work Act 2009 this year. The Modern Slavery Act 2018 will also commence this year; continuing with the push for broader responsibility on business.

4. Equal pay and #metoo

Equal pay for equal work remains an ongoing issue but gaining much needed momentum. Political parties are committed to change, unions are pushing change and employees are demanding change. Business needs to be active in this area and stay ahead.

Complaints of sexual harassment and discrimination will continue to be prominent. Even though it is 2019, education of workplaces remains important. The occurrence and reporting of sexualised behaviour at work remains substantial.

The Australian Human Rights Commission’s national inquiry into sexual harassment has been actively consulting with businesses and the public to get a grasp on the nature of sexual harassment in Australian workplaces. There is a discussion about whether sexual harassment victims should be subject to confidentiality arrangements in settlements.

With submissions due by the end of February 2019, we can expect a report this year with many recommendations to address sexual harassment in Australian workplaces.

5. Casuals – what am I?

2018 was a year of upheaval for casual employment. Following the Skene decision (WorkPac Pty Ltd v Skene [2018] FCAFC 131), employees who were employed and paid as ‘casuals’ were entitled to annual leave entitlements if their work patterns meant that they were like permanent employees. Significant industry concern followed, with some estimates of possible backpay claims reaching $8 billion.

Hopefully, two ongoing developments will bring a sense of calm to this area in 2019.

Firstly, the matter of WorkPac Pty Ltd v Rossato is expected to be heard by the Full Federal Court in February 2019, with judgment expected by mid-year. WorkPac is seeking to challenge Skene, but if unsuccessful, then a declaration that the casual loading Mr Rossato was paid should be off-set against his annual leave entitlements. At the same time, the Federal Government introduced a new Fair Work Regulation in mid-December 2018 aimed to achieve the same outcome. Regulation 2.03A now seeks to provide that if a person was employed as a casual employee and they were paid a ‘clearly identifiable’ loading to compensate for the loss of permanent employment benefits, this loading may be off-set against any future claims for entitlements under the NES. Whether the regulation achieves that goal will be tested.

This is an area of law that needs to be watched closely. Hopefully we see certainty and flexibility for both employers and employees.

6. Contractor/employee divide – where to draw the line

Uber has been found to not be an employer (Kaseris v Rasier Pacific V.O.F [2017] FWC 6610 and Pallage v Rasier Pacific Pty Ltd [2018] FWC 2579) but Foodora is an employer (Klooger v Foodora Australia Pty Ltd [2018] FWC 6836).

As business and the economy continue to look for flexibility and different means of engagement, these modern work arrangements will continue to come under the scrutiny of regulators, unions and plaintiff lawyers. Unfortunately, such arrangements are viewed as exploitative and undermining 100+ years of industrial regulation. Business needs to ensure any non-employment work arrangements do not feel, look or smell like employment to minimise risk.

At a policy level there is a need for a mature discussion in this area and legislative reform to provide fair protection for workers but to allow different work methods to be utilised.

Ongoing challenges

There will also remain ongoing challenges for business.

7. Bullying, workplace conflict and culture

Bullying complaints and workplace conflict continue to consume the resources and time of business. Proactivity in this area is needed, rather than just being reactive.

Business and HR will also inevitably need to deal with misguided complaints raised in the context of performance management and disciplinary action. Courage and conviction will be needed. Supporting managers to manage will be key.

Culture will remain central to good workplace relations and a successful business. We have learnt from the recent Royal Commissions, that a poor culture can lead to abhorrent behaviours. Employers need to stamp out inappropriate, unprofessional (& divisive) and unsafe behaviours.

As employers endeavour to establish and enforce a strong culture, we will continue to see conflicting and unusual decisions from industrial tribunals responding to dismissals. In past years, employees have been reinstated for horrible homophobic and racist behaviour (Mt Arthur Coal Pty Ltd t/a Mt Arthur Coal v Goodall [2016] FWCFB 5492) but recently not for sexist behaviour (Abarra v Toyota Motor Corporation Australia Ltd [2018] FWC 3761). Challenges remain for employers in reconciling outcomes.

Though, this year has started on an encouraging footing. On 4 January 2019, DP Clancy held that a union delegate referring to her manager having “natural extra padding” in front of colleagues (when seeking the heating in the workplace turned on) provided a valid reason for dismissal. DP Clancy said at [70]:

I say this: Ms Bastoni had an obligation to treat her fellow worker with basic dignity, courtesy and respect regardless of whether it was written in a policy document which she had signed and her indifference to such an obligation was callous. Ms Bastoni may have taken issue with some of ORC’s policies but this did not grant her carte blanche to say what she liked to whomever she pleased.

The dismissal was not unfair (Bastoni v ORC International Pty Ltd [2019] FWC 38).

Looking forward

Business needs to educate and enforce the culture it wants. That culture should include a workplace that does not tolerate inequality, discrimination, bullying and harassment.

Business models, and the engagement of workers, also needs close attention and management to ensure risk is mitigated.

Then sit back, and watch 2019 unfold. We can confidently say, 2019 will not be dull.

 

Authors: James Mattson, Andrew Yahl, Claire Limbach and Jade Bond