After almost a decade of discussion, the Work Health and Safety Bill 2019 (“WHS Bill”) was recently passed by the Western Australian (“WA”) Parliament on 3 November 2020, and given royal assent. With the passing of the WHS Bill, this will leave Victoria as the only Australian state not to have adopted the national model harmonised Work Health and Safety (“WHS”) legislation.

The new WHS Act, which will likely not come into operation until early 2021, will replace the current Occupational Safety and Health Act 1984 (WA), and certain sections of both the Mines Safety and Inspection Act 1994 (WA) and the Petroleum and Geothermal Energy Safety Levies Act 2011 (WA) that relate to work health and safety.

Some key changes introduced by the new legislation are as follows:

• The replacement of the term ‘employer’ in existing WA safety laws with the broader term of a ‘person conducting a business or undertaking’ (PCBU);
• The replacement of the term ‘employees’ in existing WA safety laws with the broader term of ‘workers’ and other ‘people affected by the work’;
• A primary duty of care requiring PCBUs to, so far as is reasonably practicable, ensure the health and safety of workers and others who may be affected by the carrying out of work;
• Offences of industrial manslaughter with maximum penalties of 20 years’ imprisonment and $10 million in fines for a body corporate;
• An increase in workplace penalties above those initially introduced in October 2018;
• A prohibition on individuals and corporations utilising insurance policies to cover WHS liability penalties imposed under the WHS Act;
• The involvement of WHS inspectors in resolving disputes where WHS issues cannot be resolved with reasonable efforts in a timely manner;
• A requirement for safety committees to include decision-makers with sufficient authority to act on behalf of the PCBU;
• A requirement that corporate officers of PCBUs have positive ‘due diligence’ duties, to replace the fault-based duties in existing WA safety laws and to increase accountability on decision making; and
• A new duty of care for “WHS service providers” to ensure appropriate care in the provision of WHS services.

Notably, while the new WHS Act is based substantially on the national model WHS legislation, it does possess some key differences, adopting some unique provisions not yet implemented by all other harmonised jurisdictions.

As noted above, one of these differences includes the introduction of industrial manslaughter offences, which aim to ensure that workplace deaths caused by the conduct of PCBUs are met with substantial penalties. The WHS Bill includes two separate offences for industrial manslaughter; a ‘simple’ offence will arise where a person fails to comply with a health and safety duty causing the death of another. This will attract a maximum penalty of 10 years’ imprisonment and a fine of $2.5 million for an individual or $5 million for a body corporate. A ‘crime’ offence will arise where a person with a health and safety duty engages in conduct causing a workplace death, with the knowledge that the conduct is likely to result in death, and in disregard of that likelihood. This will attract a maximum penalty of 20 years’ imprisonment and a fine of $5 million for an individual or $10 million for a body corporate. Notably, officers of PCBUs may also be charged with industrial manslaughter offences—however, additional elements of the offences must be proven, including that the conduct was attributable to any neglect on behalf of the officer, or it was engaged in with the officer’s consent or connivance. Thus far, only Queensland and the Australian Capital Territory have adopted industrial manslaughter laws, while Victoria has recently introduced them to its Parliament.

Some other notable differences in the WHS Act, as already set out in the list of key changes above, include the prohibition on insurance companies to indemnify entities against liability penalties imposed under WHS laws, the involvement of WHS Inspectors in resolving workplace WHS disputes, the requirement for WHS committees to include a decision maker with sufficient authority to act on behalf of the PCBU, the new positive ‘corporate officer’ duties to replace the fault-based duties in existing WA safety laws, and a new duty of care for “WHS service providers” to ensure that appropriate care is taken in the provision of WHS services.

As this Act is expected to come into force sometime in early 2021, transitional arrangements will be in place to allow sufficient time for employees to ensure that their current health and safety systems align with the new requirements. The Department of Mines, Industry Regulation and Safety is also developing resources to aid in this transition, which will become available closer to the date the WHS laws become operational.

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On 9 September 2020, the Queensland Legislative Assembly passed the Criminal Code and Other Legislation (Wage Theft) Amendment Bill 2020 (Qld) (“the Bill”). Queensland now joins other Australian jurisdictions that have recently passed legislation criminalising wage theft, following Victoria and the ACT.

The Bill received royal assent on 14 September 2020 (Criminal Code and Other Legislation (Wage Theft) Amendment Act 2020 (Qld) (“the Act”)). The offences under Part 2 of the Act have now commenced and are in force. Other amendments under Part 3-5 of the Act will come into effect on a date yet to be fixed by proclamation.

Given two major states, Queensland and Victoria, have now criminalised wage theft, employers must be vigilant in ensuring that their payroll systems are complying with fair work laws and industrial instruments.

Part 2 of the Act amends the Criminal Code Act 1899 (Qld) (“the Criminal Code”) to explicitly include wage theft as a criminal offence. The Act amends the definition of stealing under s 391 of the Criminal Code to include failures to pay an employee in relation to the performance of work by the employee an amount payable under legislation or an industrial instrument or agreement. Further, the Act provides that ‘an amount payable to the employee in relation to the performance of work by the employee’ is a thing capable of being stolen. As suggested by the explanatory note, the Act is intended to capture a broad range of payments such as:

• unpaid hours or underpayment of hours;
• unpaid penalty rates;
• unreasonable deductions;
• unpaid superannuation;
• withholding entitlements;
• underpayment through intentionally misclassifying a worker including via a wrong award, wrong classification or by ‘sham contracting’ and the misuse of Australian Business Numbers; and
• authorised deductions that have not been applied as agreed.

Secondly, the Act amends the penalty for fraud under s 408C(2) to provide that where the offender is or was an employer of the victim they will be liable to imprisonment for 14 years, which is the equivalent to the existing penalty for fraud where the offender is the employee. For the offence of stealing, the Act amends s 398 of the Criminal Code to provide that employers are liable to imprisonment for 10 years, which reflects the length of imprisonment as provided in the Wage Theft Act 2020 (Vic).

The Act also amends the Industrial Relations Act 2016 (“the IR Act”) in order to introduce a procedure for wage theft recovery claims, which is covered by the definition of “unpaid amount claim” under the IR Act. The new Division 4 of the IR Act has been introduced to confer jurisdiction to the Industrial Magistrates Court to determine wage recovery claims for matters of not more than $20,000. The introduction of Division 4 – Subdivision 2 provides a conciliation process for unpaid amount claims, and states that the registrar may refer an unpaid amount claim to conciliation. Under the new s 507D, Industrial Relations Commissioners will act as conciliators for unpaid amount claims.

The Act differs from the Wage Theft Act 2020 (Vic) that was recently passed as it amends the existing criminal code, as opposed to introducing a new Act of Parliament to cover wage theft. Arguably, this legislative decision reflects the shift in characterising wage theft as a criminal act as opposed to an administrative error.

Evidently, there is a trend within state and territory legislatures to criminalise wage theft in order to tackle the policy problem of employers using underpayments to lower their operating costs. As noted by the explanatory notes of the Act, wage theft affects 437,000 workers in Queensland and costs them approximately $1.22 billion in wages and $1.12 billion in unpaid superannuation each year.

In the remaining states and territories that have not yet criminalised wage theft, the Western Australian Industrial Relations Minister introduced the Industrial Relations Legislation Amendment Bill 2020 (WA) on 25 June 2020 to create stronger compliance and enforcement provisions to address wage theft; while the SA legislature has been considering wage theft since 2019. On the Commonwealth level, the Attorney General and the Prime Minister have both given indications that a wage theft bill will be introduced soon, however, a bill is still yet to be tabled in Parliament.

The Act differs from the Wage Theft Act 2020 (Vic) that was recently passed as it amends the existing criminal code, as opposed to introducing a new Act of Parliament to cover wage theft.

Given two major states, Queensland and Victoria, have now criminalised wage theft, employers must be vigilant in ensuring that their payroll systems are complying with fair work laws and industrial instruments. Whilst NSW and the Commonwealth Government have yet to introduce wage theft legislation, the continuing trend indicates it may only be a matter of time before wage theft is criminalised in all states and territories and at the Commonwealth level.

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The Act, which will not come into operation until 1 July 2021 unless it is proclaimed otherwise, is the first legislation in Australia to make the deliberate underpayment of workers a criminal offence. The Wage Theft Bill 2020 (Vic) was drafted in response to revelations that a string of large, high-profile companies have reported underpayments.

Employee entitlements are defined by the Act to include wages or salary, allowances and gratuities, attribution of annual leave and long service leave, meal breaks and superannuation. The Act applies to all employers regardless of size, including corporations, individuals and the Crown, who pay employees in relation to services that are performed by an employee in Victoria, or performed outside of Victoria if the employee is based in Victoria.

The Act specifies three key offences, which are as follows:

1. Firstly, it is an offence under the Act for an employer or an officer of the employer to dishonestly withhold whole or part of an entitlement owed by the employer to the employee.
2. Secondly, it is also an offence under the Act for an employer or an officer of the employer to falsify, or authorise or permit another to falsify, an employee entitlement record with a view to dishonestly obtaining a financial advantage.
3. Thirdly, it is an offence under the Act for an employer or officer of an employer to fail to keep, or authorise or permit another person to fail to keep, an employee entitlement record with a view to dishonestly obtaining a financial advantage.

The test for “dishonest” is an objective one, meaning dishonest according to the standards of a reasonable person.

In determining whether the withholding of employee entitlements is dishonest, consent by the employee is irrelevant if the withholding reduces the employee entitlement to less than the minimum amount or benefit required under the relevant laws. Similarly, in determining whether the obtaining of a financial advantage is dishonest, consent by the employee to a reduction of their entitlement is irrelevant if the withholding reduces the employee entitlement to less than the minimum amount or benefit required under the relevant laws.

It is a defence to a charge of dishonestly withholding entitlements if the employer or an officer of the employer exercised due diligence to pay the employee entitlements.

As a criminal offence, the penalties for the offences are heavy. Employers who are found guilty on any of the three offences face fines of up to $198,264 for individuals, $991,320 for companies and up to 10 years jail.

Further, the legislation establishes a new statutory watchdog, the Wage Inspectorate of Victoria. The Wage Inspectorate of Victoria will have powers to investigate the commission of offences under the Act, bring criminal proceedings in relation to the offences, as well as general powers to promote, monitor and enforce compliance with the Act. The Wage Inspectorate may also accept an enforceable undertaking from an employer who has committed an offence.

The Act will come into effect on 1 July 2021, in order to give businesses time to prepare their systems for the change.

Similar legislation has not yet been passed in other jurisdictions but appears to be on the cards. Back in July 2019, Prime Minister Scott Morrison signalled that the Attorney-General was drafting legislation to deal with criminalising wage theft. The Attorney-General released a discussion paper outlining a range of reform options in February 2020, but a Bill has yet to be tabled in Parliament.  In March 2020, the Queensland Government also announced an intention to introduce amendments to the state Criminal Code to make wage theft a criminal offence. In 2019, the Legislative Council of South Australia formed a Select Committee on Wage Theft but has yet to take any legislative action. Similarly, the Western Australian Government commissioned an Inquiry into Wage Theft in 2019, the report of which was released in December 2019.

Given the significant criminal penalties applicable under the Act, it is vital that employers with employees in Victoria, and officers of such employers, ensure that their businesses are compliant in respect to payment of employee entitlements, and have adequate systems in place to prevent non-compliance and to detect potential discrepancies and issues with payment of employee entitlements. The Act also serves as a reminder to employers in other states and territories to review their systems and processes to ensure that they remain compliant with their obligations around employee entitlements. This is especially important given that the Queensland Government and the Federal Government are looking to introduce wage theft legislation.

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As part of the Federal Government’s announced 3-stage plan with respect to easing restrictions associated with its response to COVID-19, the Federal Government has, at least for now, recommended that those workers who are able to work from home continue to do so.

With many employees continuing to work from home for at least the short to medium term in light of the continuing risks of COVID-19 and the potential for a ‘second wave’ of increased infections, employers need to remain vigilant in respect to their continuing obligations to workers notwithstanding that they are working from home, and must consider the new and unique workplace challenges that arise as a consequence of employees spending many months away from the physical office.

Below are just some of the considerations employers need to be alert to in the context of WHS and performance management and termination in this brave new world.

WHS Obligations
It is trite to say that WHS obligations continue to apply even when an employee works from home or remotely.

The primary duty under WHS legislation is to ensure, as far as practicable, the health and safety of all workers and extends to the elimination of risk to health and safety, and, if not reasonably practicable to eliminate same, the minimisation of risk to health safety.

This duty extends to employers ensuring that the home workspace is fit for purpose, and potential risks to health and safety in the home workspace are identified and managed to the extent reasonably possible. In that regard, employers should consider the following non-exhaustive matters:

1. Do employees have the necessary equipment to undertake their duties safely (including but not limited to a stable workspace, non-faulty computer equipment, ergonomic furniture and the like)?
2. Are there any hazards in the home workspace e.g. broken wires, flimsy furniture, not enough light?
3. Is there a mechanism for employees to report health and safety issues that arise in the remote workspace like they could at work?
4. Do employees have adequate cleaning supplies to prevent the risk of catching COVID-19 while working from home?

An employer’s WHS duty also extends to monitoring and managing employee mental health. This is particularly important in the context of the COVID-19 pandemic, when employees have far more limited contact with others, both in a professional and personal context. Employers should take a proactive approach, including by regularly checking in with employees, erring on the side of overcommunicating, providing access to information on and support for mental health issues, supporting work-life balance, ensuring regular breaks, setting clear expectations in terms of output/milestones and hours of work, and ensuring employees have adequate support and a point of contact if they experience difficulties with their work performance.

Failure by employers to be properly alert to the unique WHS risks that arise in the context of remote working may result in significant legal exposure and business downtime.

Performance Management and Termination of Employment
Where an employee is not performing to the standard required, employers are entitled to implement a performance management process, notwithstanding that employees have been working remotely and may continue to work remotely for some time.

It is, however, important to have regard to any barriers to performance that have arisen as a result of the need to work remotely, and any other mitigating factors caused by the COVID-19 pandemic. For example, has performance output slowed:

1. because of an employee’s reliance on their home internet and computer devices, which may not be as fast or up to date as the office equivalents;
2. due to difficulty contacting relevant persons;
3. because an employee has had to manage concurrent caring responsibilities; and/or
4. because of mental health issues that have been exacerbated by the pandemic?

Failure to have regard to such matters may result in issues for employers down the track, when they seek to rely on such performance issues to justify dismissal.

Where it is or may be necessary to terminate employees who are working remotely, employers should proceed with caution and ensure that procedural fairness continues to be adhered to, to the extent reasonably practicable, to avoid the FWC finding that any dismissal was harsh, unjust or unreasonable due to procedural failures. This includes providing adequate warnings and notice and giving reasonable opportunities to improve performance and respond, as would be the case if an employee was not working remotely. In relation to meetings with concerned employees as part of the performance management and termination process, while this may be a procedural challenge in the context of the pandemic, employers should, to the extent possible, attempt to replicate a  face-to-face environment, such as through videoconferencing facilities, if it is not possible to hold meetings in person.

Ultimately, employers should continue to adhere to their statutory and common law obligations in relation to implementing performance management and termination processes, to the extent reasonably practicable in the context of the COVID-19 pandemic. To the extent it is not reasonably practicable to do so, employers should attempt to replicate existing processes as much as possible, while maintaining an overarching focus on ensuring procedural fairness.

For more information:
On Wednesday 6 May 2020, Harmers Workplace Lawyers presented a webinar entitled: “Remote Working During COVID-19 – Are you Legally Compliant?”. If you would like to learn more about the WHS obligations for employers, managing staff mental health issues, performance management and termination in a COVID-19 remote working environment, please click here to view

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The Australian Human Rights Commission has released its landmark report arising from its national inquiry into sexual harassment in Australian workplaces.

The Commission’s report has been presented to the Attorney-General, Christian Porter, and is currently being considered by the Federal Government, in conjunction with state governments and the private sector.

Preliminary responses have been mixed, with calls from the President of the Australian Council of Trade Unions, Michele O’Neil, for the report’s recommendations to be implemented in full, while Ai Group Chief Executive, Innes Wilcox, has warned that the proposed changes to the existing legal framework “raise many complex issues and will require careful consideration”.

Notably, the Commission’s broad recommendations seek to address cultural and systemic drivers that have contributed to the prevalence and severity of workplace sexual harassment.

To this end, the Commission has recommended the implementation of robust data gathering, proactive education and training strategies, and better resourcing for legal and social services.

At the same time, the Commission has put forward significant recommendations to reform the current legal and regulatory framework that governs workplace sexual harassment, including by focusing on prevention and proactive obligations, as well as by addressing gaps and issues in the existing regime.

The aims of these reforms are expressly “victim-focused” and seek to reduce the current burdens imposed on complainants by the Australian Human Rights Commission Act 1986 (Cth) (“AHRC Act”) and Sex Discrimination Act 1984 (Cth) (“SD Act”).

One of the key recommendations contained in the Commission’s report is the introduction of “a positive duty on all employers to take reasonable and proportionate measures to eliminate sex discrimination, sexual harassment and victimisation, as far as possible” (Recommendation 17).

The Commission further recommends that it be empowered to assess compliance with, and enforce, this proposed positive duty and be granted specific power to:

• Undertake assessments of the extent to which an organisation has complied with the duty, and issue compliance notices if it considers that an organisation has failed to comply;
• Enter into agreements and enforceable undertakings with organisations; and
• Apply to the Court for an order requiring compliance with the duty, (Recommendation 18).

Interestingly, the proposed positive duty would not seem to permit an individual complainant to pursue a private cause of action if their employer had breached its positive duty, nor seek redress or relief for any harm suffered in consequence of any such breach.

Other recommendations of the Commission include:

• Extending the “aiding or permitting” accessorial liability p rovisions of the SD Act to ensure that those provisions apply to sexual harassment (Recommendation 20);
• Clarifying that the offence of victimisation can form the basis of a civil action for unlawful discrimination (Recommendation 21);
• Lengthening the timeframe by which a complainant should bring a complaint of sexual harassment from 6 months to 24 months since the alleged unlawful discrimination took place (Recommendation 22);
• Broadening “standing” provisions to allow unions and public-interest groups to bring representative and collective sexual harassment complaints on behalf of individuals in their own right (Recommendation 23);
• Introducing costs protections for complainants, such that costs would no longer “follow the event” and, instead, be awarded only in circumstances where a party commenced proceedings vexatiously or without reasonable cause, or if a Court was satisfied that a party’s unreasonable act or omission caused the other party to incur costs (Recommendation 25).

The Commission has also recommended that the Australian Government conduct further research on whether current awards of damages “[reflect] contemporary understandings of the nature, drivers, harms and impacts of sexual harassment” and that such research should “inform judicial education and training” (Recommendation 24).

Further, the Commission has proposed that several major amendments be made to federal industrial relations legislation, including the Fair Work Act 2009 (Cth) (“FW Act”) and the states’ and territories’ harmonised work health and safety legislation (“Harmonised WHS Legislation”). Such recommendations include:

• Introducing a “stop sexual harassment order” equivalent to a “stop bullying order” into the FW Act (Recommendation 29);
• Clarifying that sexual harassment can give rise to a valid reason when determining if an employee’s dismissal was “harsh, unjust or unreasonable” (Recommendation 30);
• Providing that sexual harassment can amount to “serious misconduct” pursuant to the regulations to the FW Act (Recommendation 31);
• Developing guidelines with a view to creating a Code of Practice in relation to sexual harassment, which could inform prosecutions of potential breaches of the Harmonised WHS Legislation.

It should also be noted that the Commission has recommended that a “practice note or guideline” be created that identifies best practice principles for the use of non-disclosure agreements in workplace sexual harassment matters to inform the development and regulation of such agreements (Recommendation 38). These “best practice principles” are intended to ensure that the rights of complainants are protected appropriately in situations where there may a power imbalance between the parties.

The significance and breadth of the Commission’s recommendations cannot be denied. Accordingly, draft legislation that deals with the Commission’s recommendations should be reviewed carefully by all interested parties.

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A new year and a new decade. A new direction in the Australian workplace?  With legal and social changes, this year promises to be a significant one for HR professionals in Australia. The workplace continues to be an area of focus for lawmakers and regulators and remains a forum for broader social issues to manifest. Herbert Smith Freehills partner Anna Creegan on what to expect in 2020 in the Australian workplace.

1. Religion

With the Prime Minister and a star Wallabies back publicly sharing their commitment to religious belief, in 2019 conditions were ripe for a reassessment of religion in Australian public life. 2020 begins with the draft Religious Discrimination Bill 2019 released by the Prime Minister and Attorney General and expected to be introduced into Federal Parliament this year.

The Bill would see the introduction of laws addressing discrimination on the basis of religion in employment and areas of public life. Notable exceptions to discrimination on the basis of religion in employment would include employment for domestic duties, religious hospitals, aged care facilities, accommodation providers, and where the individual cannot perform the inherent requirements of the role. The Bill would create a new office of the Freedom of Religion Commissioner, within the Australian Human Rights Commission.

If the Bill is passed, all Australian employers will need to understand how it affects their management of religious issues in and outside the workplace.

2. Climate

2020 begins with climate dominating the national discourse. But could this become a workplace issue? It seems it already has.

First, there are direct impacts. Employers are presented with new challenges in the form of air quality issues and temporary absences from work by volunteer firefighters and others affected by climate issues.

Then there are less tangible changes. Our firm’s 2019 report, Future of Work, returned data from a survey of 375 executives at large corporations across the US, UK, Europe, Middle East, Africa, Asia, and Australia. It tells of an anticipated rise in workplace activism which is increasingly focused on social and environmental issues, particularly climate change. Larger companies and in particular mining companies predict a rise in activism triggered by environmental issues, the report notes.

As 2019 ended, institutional investors reduced investment in fossil fuel stocks. BlackRock described sustainability as its ‘new standard for investing’. It seems reasonable to expect employee activism to follow, and there are indications that this is already happening. Our report records that Microsoft, Google, Amazon, Facebook and Twitter employees were active in coordinating 2019 climate protests. And in late 2019, CFMMEU National President Tony Maher joined those identifying a ‘lack of progress’ in Australia on climate and energy, contemplating (in a submission to the Select Committee into Jobs for the Future in Regional Areas) falling incomes and prospects for people in coal regions without major government programs.

Expect climate to be an emerging issue in Australian workplaces this year.

3. Safety

This year will see industrial manslaughter offences take effect in Victoria in July, and possibly in Western Australia.

These new laws would follow the industrial manslaughter offences already in force in Queensland and the ACT.  Further Industrial manslaughter offences are proposed in all other jurisdictions except New South Wales and Tasmania.

The message is clear, as articulated by the Chief Executive of WorkSafe Victoria, Colin Radford. In a February 2020 release, Mr. Radford said “employers are on notice to take their health and safety obligations seriously or risk jail if your negligence causes a worker’s death. If you show a reckless indifference to human life, you will face the full force of these new laws.”

Mental health has received similar attention. New safety laws that are expected to take effect in WA this year define ‘health’ as ‘physical and psychological health’. This gives a clear duty to ensure the psychological health of workers engaged in the business, at least while they are at work. This followed the Western Australian Government’s release of the Code of Practice: Mentally healthy workplaces for fly-in fly-out workers in the resources and construction sectors, which recommended a range of measures to assess and control risks associated with FIFO work.

These changes expand traditional concepts of workplace safety and create significant consequences for employers and their senior personnel if safety laws are breached.

4. Money, time and job security

Perhaps the biggest issue for Australian employers in 2020 will be ongoing scrutiny of their practices in engaging and paying staff and keeping records of hours worked.

There are a number of issues at play here:

• Fair Work Ombudsman investigations – targeting non-compliance with awards, enterprise agreements, the Fair Work Act, and sham contracting.
• the ATO’s Single Touch Payroll system – giving employees easy access to information on income, employer superannuation contributions and tax withholdings.
• updated modern awards – creating new limits on the use of annualised wages for staff in clerical, horticultural, pharmacy, banking, finance and insurance, mining, local government, and other areas, from 1 March 2020. These changes will:
• give employees an entitlement to pay in addition to an annualised wage where they work above a set number of hours in a roster cycle or pay period.
• require employers to give employees information about how the annualised wage has been calculated.
• require employers to conduct 12 monthly reconciliations of the annualised wage against the employee’s award entitlements (from the start of the annualised wage arrangement); and
• require employers to keep a record of start and finish times, and any unpaid breaks, for employees subject to an annualised wage.

Whether an employer can simply opt-out of the annualised wages requirements of awards by using a common law annualised salary is the subject of much discussion. Employers should consider this carefully.

• the Modern Slavery Act – introduced in 2018, which requires Australian entities (or entities carrying on business in Australia) with at least $100 million global consolidated revenue to (from 2020) submit an annual statement on the risks of modern slavery in their operations and supply chains.
• the rise of class actions – providing a forum for employees (in some cases with the support of unions) to pursue underpayment and other claims on a collective basis. For example, in the CFMMEU backed class action by Renyard against WorkPac, 600 union members are claiming $12m in entitlements, on the basis that they were wrongly classified as casuals.

It is clear from these issues that human resources professionals can expect a busy year. These changes and challenges will be best met by human resources teams focussing on compliance with laws, monitoring further changes to laws, and achieving direct engagement with the workforce as far as possible.

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With devastating bushfires continuing to burn around the country and the threat of a global pandemic in relation to the coronavirus, many employers may be wondering what their rights and obligations are in respect to their employees in the event of an unexpected natural disaster or emergency event that is beyond their control.

Given the broad, intertwined and overlapping legal framework regulating employee safety, employer rights and leave entitlements, this isn’t as straightforward as you might think.

If your workplace is affected by an emergency or natural disaster such as a health pandemic, bushfire, flood or tropical cyclone, here are 8 HR emergency essentials to keep in mind to ensure the best outcome for everyone involved.

1. Employer Duty of Care and WHS obligations

Employers owe their employees a general duty of care. This duty of care includes providing employees with a safe place to work.

Employers also have WHS obligations which require, among other things, providing and maintaining, as far as reasonably practicable, a safe workplace that is free from risks to health and safety; and identifying and assessing hazards and risks to health, and implementing measures to eliminate or alleviate same.

These positive obligations mean that where the workplace is attended by sufficient risk to employee health and safety, employers should consider whether employees can attend the workplace and/or perform their work duties safely and whether there are alternative locations of work available (such as working from home or working from another location run by the employer).

An obvious example of a threat to employee health and safety is a fast-approaching bushfire. However, as the recent issues caused by bushfire smoke (which caused difficulties for those working outdoors, as well as those who commute to work and had respiratory issues) show, there may be latent or less obvious risks to employee health and safety which may mean that the workplace is unsafe.

In the context of a potential health pandemic like the coronavirus, employers should bear in mind that their WHS obligations may extend to measures ranging from mandatory quarantine of employees in the event of travel to infected areas, for example, by requiring them to work from home, to ensuring adequate facilitates for washing hands and the availability of face masks. Employers should, however, take care not to fall foul of disability discrimination laws by discriminating against employees on the basis of actual or imputed diseases or infections.

2. Standing down employees

Under the Fair Work Act 2009, an employer may stand down employees if they cannot be usefully employed because of circumstances for which the employer cannot reasonably be held responsible. If an employee is stood down, they do not need to be paid.

There may be some extra rules and requirements if an award or enterprise agreement applies to your workplace, or where there are additional restrictions in the contract of employment.

Note however that an employee who is authorised to be absent from work (because of pre-approved leave) cannot be stood down.

3. Directing employees to take annual leave

Rather than standing down employees, you may alternatively direct employees to take accrued annual leave, provided that such a request is reasonable in the circumstances.

If an award or enterprise agreement applies, employers can only do so if the requirement is reasonable and an award or enterprise agreement allows it.

There is, of course, nothing to stop employers and employees from agreeing for the employee to take annual leave, rather than an employer having to issue a direction.

4. Flexible work arrangements

If your physical workplace is affected, you may want to consider negotiating flexible work arrangements with your employees. Flexibility in the form of hours, location and pattern of work could mitigate the effects of an emergency or disaster and maintain productivity. Consider in particular whether it is feasible for employees to work from home.

5. Personal/Carer’s leave

Employees affected by a natural disaster, health pandemic or emergency are entitled to take personal/carer’s leave. They can take this if they are not fit for work due to a personal illness or injury, or are personally affected by an emergency. It may also be taken to provide support and care to an immediate family member who is ill or injured, or affected by an unexpected emergency.

Such rights may cover circumstances where an employee is quarantined due to suspicion of being infectious, where an employee needs to take time off to care for a family member who has lost their home in the bushfires, or where an employee needs to take leave to care for children who may not be able to attend school due to bushfires.

6. Compassionate leave

Employees are entitled to take two paid days of compassionate leave where an immediate family member has sustained a life-threatening illness or injury or has passed away.

7. Community service leave

Employees who engage in voluntary emergency management activities, such as firefighting or other victim assistance initiatives, through a recognised emergency management body may be entitled to unpaid community service leave. Under the Fair Work Act 2009, the amount of leave able to be taken is not specified, but it must be reasonable taking into account the activity, travel time and rest time required.

While there is no obligation to pay employees in such circumstances, you may still wish to do so through discussion with the employee affected.

8. Defence call-out for reservists

On 4 January 2020, the Governor-General initiated a Defence Call Out under the Defence Act 1903. This places obligations on employers with Reservist employees such as releasing ‘called out’ employees to undertake defence activities. Reservists have additional workplace protections under the Defence Reserve Service (Protection) Act 2001.

While there is no obligation to pay employees in such circumstances, you may still wish to do so through discussion with the employee affected.

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The above rights and obligations are by no means exhaustive. However, with these 8 essentials in mind, employers will be well on their way to appropriately handling an emergency situation that affects their workplace and employees.

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“Purpose is that sense that we are part of something bigger than ourselves. That we are needed, that we have something better ahead to work for. Purpose is what creates true happiness” – Mark Zuckerberg, co-founder of Facebook.

This quote resonates because all employees, at some level, leave their homes for work each day, not simply to benefit in a transaction from which they earn wages, but to achieve something bigger.

Herbert Smith Freehills has undertaken some research and produced a thought-provoking report, which shines a light on that ‘something bigger’ in the workplaces of the future.

The future of work
We are now on the cusp of the fourth industrial revolution, where the products of the digital revolution are being developed and enhanced. Artificial intelligence, computer learning, robotics and automation have already begun transforming the world – and our workplaces – and no-one is predicting that transformation will cease, or even slow. The ‘internet of things’ will encroach further into our workplaces and our lives.

How these developments impact the outlook and behaviour of employees in these workplaces, is a crucial area of study for HR. The essential human characteristics have not changed quite so significantly as our workplaces.

The findings of the report speak to the growing desire of employees for purpose and meaning in their workplaces.

The rise of employee activism
Our survey warns of an unprecedented rise in workplace activism ahead, across all sectors and geographies.

We surveyed 375 C-suite executives in the US, the UK, Australia, Asia, the Middle East and Africa, expressly to elicit their thoughts on employee activism including the triggers and implications. 37 per cent of our respondents were managing workplaces of between 1,000 and 5,000 employees; 42 per cent managed workplaces with between 5,000 and 10,000 employees and the remainder workplaces with more than 10,000 employees.

“I recall a senior union official in the late 1980s observing to me, then a young law student, that ‘there is no problem in industrial relations which cannot be solved with a chequebook’”

Our survey respondents identified themselves exclusively as their organisations’ lead decision-maker on workplace issues or a member of the team who makes the organisation’s key decisions on workplace issues.

The results were surprising, in Australia some 85 per cent of respondents thought that workplace activism would significantly increase or slightly increase in the future. Less than 5 per cent thought there would be a decrease.

Employee activism triggers
So what are the triggers? This is where the results get rather interesting, particularly when they are contrasted by region.

My observation over three decades in the law, is that the predominant drivers of employee activism in Australia have been pay and conditions. Employment disputes in historically related to wages and conditions, and the exercise of managerial prerogative. I recall a senior union official in the late 1980s observing to me, then a young law student, that ‘there is no problem in industrial relations which cannot be solved with a chequebook’.

Yet our respondents identified the future triggers of workplace activism in the future somewhat differently. The top five triggers identified by the Australian respondents were automation and AI, diversity, surveillance, pay and benefits, and corporate strategy.

This seems to be a marked departure from our historical experience. When one considers the debate ahead of the May 2019 federal election, it was clear that the ALP’s key election message on industrial relations was wages. A key ALP campaign slogan was ‘everything’s going up except your wages’.

Again, our survey respondents pointed to something quite different. They identified that Corporate Social Responsibility would be one of the top five triggers of future activism in the US, the EU/UK, Asia (where it was the second-ranked trigger) and the Middle East and Africa. It is interesting that of all regions surveyed Australia is the only one where Corporate Social Responsibility was not identified as one of the top five future triggers. Although clearly it is related in a sense to both diversity and corporate strategy.

“Hundreds of workers at Microsoft protested the company’s work for the US immigration and customs enforcement when it became apparent that migrant children were being separated from their families on the US-Mexico border”

Employee activism in the US
The report relates the story of an American furniture manufacturing company called Wayfair. It records that in June 2019, a group of Wayfair employees objected to fulfilling an order for furniture for a detention centre on the US-Mexico border. Wayfair management messaged all of its employees, noting their concerns but saying that it was the company’s business ‘to sell to any customer that is acting within the laws of the countries in which we operate’.

An employee shared a screenshot of the message with a friend, who tweeted it. The tweet went viral and Wayfair employees grasped the initiative. An @wayfairwalkout Twitter account was set up within two hours, gaining more than 22,000 followers. A Facebook page publicised a planned protest rally, which was attended by hundreds and attracted media interest from around the world. Wayfair shares fell by 5 per cent on the same day.

This example resonates with our own experience of the power of social media. It is immediate, and has the potential to bring all manner of causes to the attention of vast numbers of people around the world.

Employee activism in Australia
An Australian example cited in the report concerns decisions of the Fair Work Commission in a case brought by Jeremy Lee, who was dismissed for refusing to provide his fingerprint for a new entry system used to check workers in and out of his employer’s worksite. Mr Lee argued that he should not be required to provide his fingerprint, on the grounds that the biometric data contained within was ‘sensitive data’ under the Privacy Act and therefore could only be collected with his consent.

“One of the frequently noted characteristics of the millennial generation is the wish to work for an employer whose values reflect their own”

The Commission found that the employer was not exempted from the Privacy Act because as the employee’s fingerprint data had not yet been collected, it could not already be held by the employer and hence the Act did not apply to it. The Commission found that the dismissal of Mr Lee for not providing the fingerprint data was unfair and he was awarded compensation.

Employee activism at Google and Microsoft
Another example concerns corporate strategy, identified as one of the top five triggers for employee activism of the future in Australia. It is the collective action of Google employees in 2018 against Project Maven, a contract with the US Pentagon that used AI to interpret camera footage gathered by drones. Some engineers refused to participate in building security tools connected with the project and others resigned. As a result of the pressure, Google announced that it would not renew its contract with the Pentagon.

Shortly afterwards, hundreds of workers at Microsoft protested the company’s work for the US immigration and customs enforcement when it became apparent that migrant children were being separated from their families on the US-Mexico border.

It is clear that in each of these examples, this activism goes well beyond compensation and even culture. As our report records, one of the frequently noted characteristics of the millennial generation is the wish to work for an employer whose values reflect their own.

What does this mean for HR?
The battle to recruit and retain talent; strategies to align employee aspirations with corporate objectives; the creation of internal processes to enable voice and harness employee ideas; processes which enable fair treatment and issue resolution. These are all the domain of HR. In many respects they are the hallmark of the value created by HR, since it was recognised as an independent discipline.

To a greater or lesser extent, each depends on identifying and being sensitive to the purpose which drives employees. Our survey responses suggest that getting it wrong will lead to an activism which we have only just begun to see. And getting that right will be critical for success in the workplace of the future.

Image source: Depositphotos

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“To annualise or not to annualise – that is the question.” If you currently rely on annualised wage provisions within modern awards it may be time to rethink if you want to continue doing so – particularly in light of the number of wage underpayment cases in recent times.

This is because the Fair Work Commission (FWC) handed down a decision earlier this year, finalising the review of the annualised wage provisions in a number of modern awards – with the result that, from 1 March 2020, the annualised wage provisions in 19 modern awards will change – including one that will affect many employers – the Clerks Private Sector Award 2010.

If you’re wondering what an annualised wage provision is, they allow employers to pay their employees an annualised wage that is high enough, over the course of a year, to cover or ‘buy out’ various award entitlements including ordinary hours, penalty rates and loadings etc. This is instead of having to calculate and pay employees their award entitlements for actual hours worked in each pay period or roster cycle. This is an attractive option for many employers as it removes much of the administrative burden of paying irregular amounts each pay period or roster cycle.

However, the FWC was persuaded that changes were necessary because of numerous examples of employers relying on annualised wage arrangements in circumstances where employees’ salaries were less than their award entitlements for actual hours worked.

Annualised wage provisions and avoiding underpayments
With the issue of underpayments front of mind, the new annualised wage provisions will require employers to take much more care when relying on annualised wage arrangements.

Essentially, there are two model clauses, and the common features of both are as follows:

1. Only full-time employees can be on annualised wage agreements;
2. Employees must be told in writing:
   • how their annualised wage is calculated and what it compensates them for e.g. ordinary hours, overtime, allowances, leave loading etc; and
   • the outer limits of their ordinary hours in each pay period, and for work performed outside of these, employers must pay overtime at the applicable penalty rate;
3. There must be an annual reconciliation (on the anniversary of commencement of the annualised wage agreement) or on termination of employment, and any shortfall against the award entitlements must be paid within 14 days; and
4. There must be a record kept of start and finish times, as well as unpaid breaks – the employee must also acknowledge the accuracy of the record for each pay period/roster cycle.

“New annualised wage provisions will require employers to take much more care when relying on annualised wage arrangements”

The first model clause does not require employee consent. The second model clause does require consent, an agreement in writing and may be terminated by the employer on 12 months’ notice. Employers will need to check which awards cover their employees – and which model clause therefore applies.

Clearly, relying on the new annualised wage provisions will come with increased administration and compliance costs. Failure to comply with these stringent requirements could lead to penalties for breach of a modern award – even if no underpayment has actually occurred.

To annualise or not to annualise
So the question arises, do you want to annualise or not?

If yes, you will need to revisit your current payroll and record-keeping systems to determine how you can comply.

If no, the good news is that timesheets (or the good old days of punching the timecard) and paying each pay period based on actual hours worked, is not the only alternative.

The FWC has confirmed that the common law principle of ‘set off’ is not limited by these changes. This concept is fairly well settled, allowing employers to rely on a well-drafted clause in an employment contract to apply any over-award payments against any amounts due for actual hours worked in the relevant pay period or roster cycle. This is not a new concept – but it must be set up properly for it to work.

Of course, these ‘set off’ clauses still require employers to meet their minimum award obligations – meaning regular audits and reconciliations to ensure employees are being paid correctly. In fact, many underpayments arise because this is not done on a regular enough basis.

“It is important to go to back to first principles to ensure you are paying your employees correctly in accordance with the modern award that applies”

3 steps to cover off
Whether you use the new annualised wage provisions, or rely on the ‘set off’ principle, it is important to go back to first principles to ensure you are paying your employees correctly in accordance with the modern award that applies. This means you need to:

1. Ensure that you have carefully considered modern award coverage of your employees, including the correct role classification;

2. If you intend to use an annualised wage provision under the modern award, perform the necessary calculations, advise employees of the required information and implement appropriate record-keeping systems;

3. If you will rely on the ‘set off’ principle instead:

• check that your employment contracts include a well-drafted clause – that covers all the relevant award entitlements you are seeking to include;
• perform calculations and hypotheticals to ensure that employees are actually receiving enough salary each pay period or roster cycle to cover their entitlements for all hours worked in that period (including any overtime, penalty rates allowances etc). One of the challenges with ‘set off’ is that it needs to be considered each pay period or cycle – it may not be possible to rely on over-award payments from other periods to meet your obligations in the present one;
• comply with your current record-keeping obligations in the Fair Work Act and Fair Work Regulations – which may include details of overtime worked; and
• most importantly, conduct regular audits and reconciliations.

Getting this right will help ensure employees are paid what’s owing to them and your organisation avoids underpayments.

With the current government indicating that it will criminalise ‘wage theft’ – this is not something that your organisation can simply ignore.

James Wells is a lawyer in the workplace team at MinterEllison, and has broad experience in general employment matters, industrial relations strategy and disputes, discrimination law, workplace investigations and work health and safety.

Image source: Depositphotos

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#wagetheft. It’s a pretty loaded accusation. Although there aren’t many (or indeed any?) people out there who think that it is okay for an employer to withhold wages that are properly owed to employees, some employers are still at risk of underpayment – and there is no excuse.

The crime of ‘theft’ requires deliberate intent, and while there may be some dodgy employers out there, in my experience, the vast majority of employers who come a cropper in this space would never intend underpayment of their people. They are rightfully horrified when it comes to light that there has been an error and potential wage theft.

Of course, the lack of intent doesn’t matter in the court of public opinion. Nor, in my view, should it. People should get paid properly for the work that they perform. If they don’t, the #wagetheft hashtag will be applied swiftly, and the online name-and-shame campaign will begin. Consumers may boycott, fingers may point, unions may revolt, the Ombudsman may come knocking, and workplace culture may crash.

There are so many wonderful things that good employers are trying to do to engage and retain their talented employees: mentoring programs, diversity programs, flexibility programs, wellbeing programs … the list goes on. But all of the agile working policies in the world won’t matter a jot in the case of underpayment when people aren’t receiving their legal entitlements. There’s nothing that destroys trust faster than not living up to your side of the wages-work bargain.

Stronger sanctions from the Ombudsman
Public sentiment around wage theft has been building to a crescendo following a spate of high profile underpayments that have come to light. And it’s not just the public that is taking note. The Fair Work Ombudsman (FWO) is unapologetically targeting employers who get this wrong. Gone are the days when an employer who discovered an underpayment would be left to their own devices to deal with the restoration of entitlements to its employees.

“Ignorance is simply no excuse, so employers need to have their house in order”

These days, the FWO will require employers to enter into an enforceable undertaking as a matter of course. There will be terms that require the employer to undertake a compliance audit through an independent provider engaged by the FWO – this will be in addition to, and regardless of, any independent audits that the employer may have already commissioned. Those who have experienced a full payroll audit will wince at the thought of having to do this twice. The process of extracting data – if it’s available – to demonstrate current and former employees’ working arrangements over very many years, analysing what each and every one of those employees should have been paid for working in that way, and comparing it to what they were actually paid over that time, is breathtakingly data-heavy – and, as a result, incredibly time-consuming.

In addition, the employer will likely be required to submit to ongoing audits, agree to public wording concerning the issue, make good the underpayments (plus interest), and make a ‘contrition payment’ (akin to a fine). All this in exchange for a promise from the Ombudsman to not prosecute a breach in a Court.

The risk of criminal penalties
There’s law reform in this space too. Earlier this year, the Federal Government confirmed that it would seek to legislate criminal penalties for employers who engage in the most serious and egregious exploitation of workers. Public consultation is currently taking place on a number of matters relating to such reform, including the circumstances in which underpayment of wages should attract criminal penalties, the kinds of fault elements that should apply, and the maximum penalties that would apply to both corporations and individuals.

Where can employers avoid tripping up?
Ignorance is simply no excuse, so employers need to have their house in order. But there are a number of lessons that can be learned before you trip up.

“You shouldn’t need a lawyer to tell you how to pay people properly under an enterprise agreement, but sometimes that is necessary”

Good old-fashioned human error: Unfortunately, many employers operate under terms of enterprise agreements that have been rolled-over over the years, with provisions bolted on or crudely excised through each bargaining round. The result, too often, is something not very user-friendly. The best enterprise agreements will clearly set out employees’ terms and conditions of employment. You shouldn’t need a lawyer to tell you how to pay people properly under an enterprise agreement, but sometimes that is necessary.

Incorrect classification: The other recurrent category of human error relates to incorrectly classifying employees. This might be improperly designating a part-time employee as a casual, not flowing through wage increases to junior employees on their birthdays, or designating an employee at a lower level classification than they should be under the industrial instrument. Again, you won’t get much sympathy if you get this stuff wrong. It pays to revisit these sorts of matters, and take legal advice (with the benefit of legal professional privilege) to make sure that you are getting it right.

Assuming that salaried staff are not covered by a modern award: Modern awards include minimum terms and conditions of employment. Many ‘salaried’ professional or para-professional staff are covered by modern awards, which set out rules for the payment of overtime, allowances, and penalty rates. It may be that the annual salary adequately compensates such employees for such benefits under the award in each pay period, but employers should have the checks and balances in place to ensure that is the case in order to avoid potential underpayment.

Technology mismatch: Finally, employee time and attendance systems may not necessarily speak the same language as payroll systems. Coding errors can arise, which lead to systemic payment errors. This happens more frequently than it should, and employers must put steps in place to fix these.

Proactively protect your employees and your reputation
Each of these circumstances has the potential to result in significant reputational, cultural, financial and legal ramifications. It is better to be safe than sorry in the #wagetheft era.

Image source: Depositphotos

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