In this issue: we look at the proposed superannuation guarantee amnesty; the new modern slavery legislation; a case that highlights the importance of procedure when dismissing an employee; the new labour hire licensing regime; the AHRC inquiry into workplace sexual harassment; minimum pay changes that came into effect on 1 July 2018 and WA's progress on WHS reforms.
- Superannuation-guarantee amnesty, and proposed modern slavery legislation
- A cautionary tale – let sleeping employees lie
- Do you need a labour hire licence?
- Australian Human Rights Commission to conduct inquiry into workplace sexual harassment
- 1 July 2018 changes affecting employers, and public consultation opens on Western Australia's WHS reforms
In brief: Two important pieces of draft legislation under Federal consideration are how employers deal with historical superannuation contribution shortfalls, and the possible requirement of employers to report on modern slavery risks and practices in their workforce and supply chains. Senior Associate Tarsha Gavin and Law Graduate James Daniel report.
How does it affect you?
|If enacted into law, the Superannuation Guarantee Amnesty will provide employers with an opportunity between 24 May 2018 and 23 May 2019 to correct and disclose superannuation guarantee shortfalls to the Australian Taxation Office (ATO) without being subject to penalties or administration charges.|
|If the Commonwealth Parliament passes the Modern Slavery Bill 2018 (Cth), businesses with $100 million or more in annual consolidated revenue may be required to report on their practices and supply chain processes to ensure that they are not supporting modern slavery.|
The ATO has estimated that unpaid superannuation contributions in Australia total approximately $2.8 billion per year. In an effort to remedy this, the Treasury Laws Amendment (2018 Superannuation Measures No.1) Bill 2018 (Cth) is currently before the Australian Senate, proposing to provide employers with an amnesty period in which they can disclose and rectify historical superannuation contribution shortfalls arising in the period 1 July 1992 to 31 March 2018. To access the amnesty, employers will need to voluntarily disclose superannuation shortfalls that had not previously been disclosed. Those shortfalls also cannot be the subject of an ATO audit of superannuation contributions for the relevant period.
Disclosure during the amnesty will allow employers to claim a tax deduction for payments made during the amnesty period, and the penalties and administration charges that would otherwise apply to late superannuation-guarantee payments will not be levied by the ATO.
Modern slavery laws
The Modern Slavery Bill 2018 (Cth) was introduced into the Commonwealth Parliament in June 2018. This bill follows the Modern Slavery Act passed in 2015 in the UK and the Modern Slavery Act 2018 (NSW) which passed the New South Wales Parliament in June 2018. These laws aim to address the significant problem of modern slavery, with global estimates putting the number of modern slaves between 20 and 45 million people.
If the Commonwealth bill is passed in its current form, entities that carry on business in Australia with an annual consolidated revenue of $100 million or more will be required to report on a number of matters including actions the business has taken to address the risk of supporting modern slavery practices. Modern slavery is currently defined in the bill to include slavery, child labour and trafficking in persons. The bill does not currently provide for penalties for non-compliance but instead relies on reputational pressure to encourage companies to comply.
For further information on how this legislation may affect your business and obligations you may have, please see our recent client updates on this topic below:
In brief: A recent Fair Work Commission decision has confirmed that procedural deficiencies will render a dismissal unfair even where the dismissal involves serious misconduct. Senior Associate Laura Miller, Lawyer Sarah Lunny and Vacation Clerk Adaena Sinclair-Blakemore report.
How does it affect you?
|To ensure that a dismissal is not challenged on procedural grounds, employers should ensure that employees have been given an opportunity to respond to all allegations that are relied upon to justify termination, even those that arise in the course of disciplinary meetings with the employee (such as dishonesty).|
|While it is not necessary for an employer to disclose to an employee the source of a complaint in disciplinary meetings, employers must be careful not to mislead employees about the circumstances in which a complaint arose or the evidence the employer has of the behaviour in question.|
Jacqueline Waite, a security guard, was dismissed by Serco for serious misconduct as she had been sleeping during her shift, using an iPad at work, and was dishonest during an investigation into her behaviour.
Ms Waite was photographed by a colleague sleeping while on nightshift at a hospital and using an iPad to watch movies and TV shows. Ms Waite was reported to management and was subsequently asked to attend a 'fact finding' meeting. During that meeting, Serco falsely told Ms Waite that it was a nurse who reported her conduct, not her colleague. Serco did not show Ms Waite the photographs that her colleague had taken. Ms Waite said that she had just dozed off during her shift.
Several weeks later, Ms Waite was required to attend a second meeting where she was shown the photographs and informed of the true source of the complaint for the first time. Ms Waite said that she had not slept for all of her shift and was simply using her iPad to try to complete Serco training.
Serco considered that Ms Waite's lack of remorse, her failure to raise any mitigating factors and the discrepancies between the explanations for her conduct in the first and second meetings meant that dismissal was the appropriate response.
The Commission decided that Ms Waite's dismissal was unfair, and awarded Ms Waite compensation.
While the Commission acknowledged that sleeping and watching movies and TV shows while on shift were valid reasons for dismissal, it concluded that there was no reasonable basis for Serco's conclusion that Ms Waite was dishonest. This was a significant finding, as Ms Waite's alleged dishonesty was a significant reason for the decision to terminate her employment.
In relation to the process followed by Serco, the Commission criticised Serco for blindsiding Ms Waite by failing to show her the photographs and tell her the true source of the complaint at its first meeting with her. The Commission also emphasised that Ms Waite had not been notified of the allegations of dishonesty against her or given an opportunity to respond to those allegations.
The Commission also noted that Serco had failed to give appropriate consideration to Ms Waite's long and unblemished service and her personal circumstances.
In brief: New labour hire licencing schemes have commenced in South Australia and Queensland, and will soon commence in Victoria. The schemes aim to protect labour hire workers from exploitation and to promote the integrity of the labour hire industry. Senior Associate Stephanie Burn, Associate Emma Veljkovic and Vacation Clerk Adaena Sinclair-Blakemore report.
How does it affect you?
|The schemes make it unlawful for a business to provide a person to another business to do work (a provider), or to host a person to perform work in its business (a host), without the provider holding a valid licence.|
|If you are a labour hire provider, you are required to be licensed to supply labour hire workers, must be able to demonstrate that you are fit and proper and must comply with ongoing reporting obligations.|
|If you are a user of a labour hire provider, you must only engage licensed labour hire providers.|
While the laws are broadly similar, there are some differences, including in terms of the definition of:
- a provider: Queensland and South Australia exclude private recruitment/placement agencies, and contracts involving construction work, whereas Victoria does not. Therefore the construction industry is not covered by these laws in Queensland and South Australia; and
- a worker: Queensland laws exclude high-income earners, employees on temporary secondments, and individuals who are supplied to work for another entity within the same corporate group. South Australia does not have any exclusions. Victoria has not yet published its regulations, so it is unclear who (if anyone) will be excluded in Victoria.
There are significant penalties for non-compliance.
What should you do?
Because of the broad application of the laws, businesses:
- should review their structures and models to determine whether the laws apply to them;
- who engage workers through a third party should audit their list of current providers and check the third party's licence status and review their procurement processes;
- should review their contracts to include provisions requiring labour hire providers to maintain and provide evidence of licenses/compliance, and to provide a process to manage situations involving disciplinary action (including termination) against a labour hire worker; and
- should carefully consider their obligations when managing or dismissing labour hire workers. Providers cannot defeat unfair dismissal claims purely because the worker had issues with the host, and cannot rely on its contract with the host to avoid obligations to treat employees fairly.
In brief: Australia's Sex Discrimination Commissioner, Kate Jenkins, announced on 20 June 2018 that the Australian Human Rights Commission would conduct the world's first national inquiry into sexual harassment in Australian workplaces. Senior Associate Tegan Ayling and Law Graduate Millie Grant report.
How does it affect you?
|Workplace sexual harassment occurs across all industries, and reports have been increasing in recent times. Employers must take all reasonable steps to prevent this behaviour from occurring in the workplace, or risk facing liability for the actions of employees.|
|Employers who want to take part in the inquiry are able to make a submission to the Australian Human Rights Commission (AHRC) about their experiences and views relating to workplace sexual harassment.|
The inquiry into sexual harassment in Australian workplaces is expected to take 12 months. It will consider the results of a national survey into the prevalence, nature and reporting of sexual harassment, which are expected to be released in August. It will also consider, among other things:
- the use of technology and social media to perpetrate workplace related sexual harassment and sex-based harassment and to identify alleged victims and perpetrators;
- the drivers of sexual harassment, including common characteristics and risk factors;
- current sexual harassment laws and complaints to anti-discrimination agencies; and
- recommendations to address the issue.
The submissions process for the inquiry opened on Monday, 9 July 2018, and public consultations will be held in all major Australian cities later this year. Three years after the release of its report, the AHRC will assess any changes and make further recommendations.
What can you do now?
Sexual harassment and similar claims are being seen more often since the issue has gained greater exposure. At stake for employers are the severe cost consequences and potential damage to reputation that can result from a claim or a decision that the employer was liable for the actions of its employee.
Among other things, employers should take this opportunity to consider their policies and workplace training, which are an essential part of taking reasonable steps to prevent and address harassing behaviour. It is important to ensure that policies and training are up to date and in line with relevant state and federal requirements.
1 July 2018 changes affecting employers, and public consultation opens on Western Australia's WHS reforms
In brief: Several changes relevant to employers took effect on 1 July 2018, including in relation to minimum rates of pay, the high income threshold, the superannuation maximum contribution base and penalty rates in certain industries. Separately, WA has moved a step closer to a modernised Work Health and Safety Act based on the national model WHS Act. Managing Associate Andrew Stirling, Senior Associate Tegan Ayling and Vacation Clerk Maaike Meijnders report.
How does it affect you?
|Given the new financial year, employers should update themselves regarding their minimum pay obligations.|
|Employers in WA should monitor WA's slow progress to new WHS laws.|
National minimum wage
The Fair Work Commission increased minimum wages by 3.5% from 1 July 2018. This means the new national minimum wage is now $18.93 per hour, or $719.20 per week. The increase applies to any employee who is paid according to the national minimum wage or under a modern award.
High income threshold
The high income threshold increased on 1 July 2018 to $145,400 per annum, up from $142,000 per annum. The high income threshold is an important consideration when employers are facing unfair dismissal claims by employees or when guaranteeing a high income employee's annual earnings.
Superannuation maximum contribution base
The superannuation maximum contribution base increased to $54,030 per quarter, up from $52,760 per quarter in the previous year. This affects whether an employer is obliged to pay superannuation for an employee's ordinary time earnings above the maximum contribution base. Importantly, the minimum superannuation guarantee contribution rate has stayed at 9.5%.
As occurred on 1 July 2017, Sunday penalty rates have again changed for employees covered by the following modern awards:
- General Retail Industry Award 2010;
- Hospitality Industry (General) Award 2010;
- Pharmacy Industry Award 2010; and
- Fast Food Industry Award 2010.
Employers in these industries need to ensure that they are paying up-to-date penalty rates to employees working on Sundays.
Western Australia's WHS reforms
The Ministerial Advisory Panel has reported to the Minister on modernising WHS laws in Western Australia. The Panel's report is available for public consultation until 31 August 2018. A Bill, based on the model WHS Act, is expected to be introduced into Parliament no later than mid-2019 and will replace the Occupational Safety and Health Act 1984, the Mines Safety and Inspection Act 1994 and the Petroleum and Geothermal Energy Safety Levies Act 2011. It is anticipated that the Bill will be the primary WHS legislation across all industries.
The Panel's key recommendations include:
- a new duty of care on the providers of WHS advice, services or products;
- to modify and clarify the power of inspectors, including with respect to the production of documents and conduct of interviews; and
- to ensure that enforceable undertakings are not available for Category 2 offences involving a fatality.
- Simon DewberryPartner,
Ph: +61 3 9613 8110
- Veronica SiowPartner,
Ph: +61 2 9230 4135
- Andrew StirlingManaging Associate,
Ph: +61 7 3334 3304
- Sikeli RatuManaging Associate,
Ph: +61 2 9230 5046
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