2.1
Submitters and witnesses commended highly the work undertaken by the Australian Human Rights Commission (AHRC) and supported the 55 recommendations presented in its Respect@Work: National Inquiry into Sexual Harassment in Australian Workplaces report (Respect@Work Report). Stakeholders therefore supported the Bill and its critical objective to prevent and address sexual harassment in Australian workplaces.
2.2
The AHRC submitted that the proposed legislation would implement many significant recommendations from the Respect@Work Report and have ‘a major impact on the effectiveness of the law relating to sex discrimination, sexual harassment and sex-based harassment in Australia’.
2.3
Similarly, the Business Council of Australia (BCA) strongly supported ‘decisive action to stamp out sexual harassment and other forms of discrimination in Australian workplaces’.
2.4
The Australian Council of Trade Unions (ACTU) expressed its full support for the Bill, which ‘delivers on crucial reforms to anti-discrimination legislation that were recommended by the Respect@Work report and advocated for by unions and others for many years’.
2.5
Some submitters—such as the Law Council of Australia (Law Council)—noted especially that their feedback to government has informed both the Sex Discrimination and Fair Work (Respect at Work) Amendment Act 2021 and the Bill.
2.6
The committee heard, however, that some amendments would further improve the Bill. Submitters and witnesses key concerns are discussed in this chapter, as follows:
an intersectional approach to anti-discrimination law;
a gender neutral objects clause;
clarity and certainty around the hostile work environment provisions;
the cornerstone reform (the positive duty);
enforcement of the positive duty;
representative actions in the federal courts;
the costs neutrality approach to costs protection; and
sufficiency of transition and review arrangements.
Intersectional approach to anti-discrimination law
2.7
Some submitters commented on the need to take an intersectional approach when responding to sexual harassment in the workplace. An intersectional approach, they argued, would recognise that people often experience multiple and overlapping forms of discrimination, for example, on the basis of age, gender, race, disability or sexuality.
2.8
The AHRC noted that the Respect@Work Report endorsed a legislative model ‘framed through a gender and intersectional lens’. In its experience, ‘many people who make complaints under the [Sex Discrimination Act 1984 (SD Act)] also make related complaints under the Disability Discrimination Act 1992 (Cth) or Racial Discrimination Act 1975 (Cth) in relation to the same conduct’.
2.9
The AHRC argued that anti-discrimination legislation should be consistent and protect workers against sexual harassment and other forms of discrimination. To illustrate its point, the AHRC highlighted that unpaid workplace participants—such as volunteers, interns and students—would be protected against sexual harassment under the Bill, but not against sex discrimination and other forms of discrimination in federal anti-discrimination laws.
2.10
Equality Australia agreed that the Bill should encompass not just ‘the ground of sex’ but all attributes protected under the SD Act (sexual orientation, gender identity, intersex status) and in other federal anti-discrimination laws:
This would ensure consistency and coherence in federal discrimination law, avoid unintended legal consequences, and ensure that all protections in the Sex Discrimination Act apply equally to people regardless of their gender, sexual orientation or sex characteristics.
2.11
Equality Australia added:
All recent discrimination reforms in Australia have moved towards a better understanding of intersectional discrimination and the overlapping nature of many discrimination complaints. The Respect@Work report itself noted that while the environment for sexual harassment is often seen through the lens of gender, the risks of harassment could also be attenuated by reference to age, sexuality, trans experience, intersex status, race and disability.
2.12
Ms Emma Golledge, Director of the Kingsford Legal Centre, suggested that what Australia really needs is an ‘equality act’ that:
…harmonises discrimination law across all the attributes in the federal sphere that has a standardised test and responses, because it's very unlikely that an individual experiences just one type of discrimination… It's intersectional in nature. Yet the remedies, the tests, the approaches will differ in terms of a sex discrimination complaint versus a racial discrimination complaint versus a disability discrimination complaint… [W]e keep creating laws in relation to attributes and don't look at the fact that it's a whole person who's looking for a remedy.
Gender neutral objects clause
2.13
Item 2 in Schedule 8 of the Bill would amend paragraph 3(e) of the SD Act (the objects clause) to read that an object of the Act is ‘to achieve, so far as practicable, substantive equality between men and women’.
2.14
The AHRC supported use of the term ‘substantive equality’, rather than ‘equality of opportunity’, which it submitted recognises that ‘there is not currently a level playing field for everyone in society’.
2.15
The Kingsford Legal Centre agreed with the proposed amendment, pointing out that the Committee on the Elimination of Discrimination Against Women has long stressed that state parties to the Convention on the Elimination of All Forms of Discrimination Against Women (like Australia) are obliged to respect, protect and fulfil the right to non‑discrimination of women and implement their right to substantive equality with men.
2.16
The Kingsford Legal Centre expressed concern, however, that the proposed amendment assumes that sex is binary, a concern raised also by the Law Council which contended that proposed paragraph 3(e) should refer to ‘substantive equality for everyone, irrespective of gender or sexual orientation’ to provide protection for people who identify as neither a man nor a woman.
2.17
AGD submitted that the proposed amendment would state that an object of the SD Act is to ‘achieve substantive equality between men and women’ and that the binary language has been used to maintain consistency with the Respect@Work Report and the SD Act:
The inclusion of the terms ‘men and women’ in the objects clause is consistent with the language in recommendation 16(a) of the Respect@Work Report. The SD Act does not define the terms ‘men’ and ‘women’ to ensure that the terms are able to be interpreted broadly. This language is also consistent with the existing structure of the SD Act, which already contains an objects clause relating to the elimination of discrimination on the other grounds of discrimination covered by the SD Act.
Clarity and certainty around the hostile work environment provisions
2.18
Proposed subsection 28M(1) of the SD Act would make it unlawful for ‘a person to subject another person to a workplace environment that is hostile on the ground of sex’.
2.19
Submitters and witnesses welcomed the proposed hostile work environment provisions, with the AHRC reiterating that ‘the existence of a sexually permeated, hostile work environment [is] not routinely recognised as constituting sexual harassment’. In its view:
[Proposed section 28M would provide] clarity and certainty to the law, particularly in relation to conduct that may not be directed towards any particular person but results in a generally hostile environment on the basis of sex.
2.20
The Law Council supported in principle the objective of providing clarity to the law through legislation. However, it submitted that proposed section 28M involves a level of speculation contrary to the key rule of law principle that the law must be clear and certain:
In particular, people must be able to know in advance whether their conduct might be unlawful. Provisions should be clearly drafted so that they do not inadvertently capture a wide range of unintended conduct or result in protracted litigation with respect to the scope of the provision.
2.21
While not certain whether the proposed provision is capable of overcoming this challenge, the Law Council—and other submitters and witnesses—considered that the provision could be redrafted to increase its clarity and certainty.
Meaning of subjecting a person to a hostile workplace environment
2.22
Proposed subsection 28M(2) of the SD Act would provide that a person will subject another person to a workplace environment that is hostile, if the first person ‘engages in conduct’ in a workplace where either person works, the second person is in the workplace at the same time or after the conduct occurs, and the conduct is found to contravene a ‘reasonable person’ test, as defined in the proposed provision.
2.23
The Law Council referenced the Explanatory Memorandum to the Bill (the EM), which indicates that the proposed provision is intended to apply to bystanders. However, the Law Council submitted that ‘given the operation of section 28M turns on the person ‘engag[ing] in conduct’ it is very difficult to see how the provision can apply to bystanders by reason of their ‘inaction’’.
2.24
Both the Law Council and the AHRC recommended that the proposed provision be amended to clarify that ‘engages in conduct’ extends to conduct by omission. Ms Erin Murray, Director of the Respect@Work Taskforce at the AGD, advised that the EM could be amended to make this clarification.
2.25
The ACTU referred to the objective ‘reasonable person’ test, noting that section 28A of the SD Act (the definition of ‘sexual harassment’) includes a subjective component when determining whether a person has been sexually harassed:
The subjective element of how the conduct is perceived by the second person is an important consideration in determining whether sexual harassment has occurred, and a subjective element should be included in s28M regarding hostile workplace environments. This could be done by including additional circumstances in s28M(3) such as whether the conduct was unwelcome to the second person, the profile and gender composition of the workforce, power imbalances, and factors making workers vulnerable such as age, gender, racial or cultural background.
2.26
The AGD advised that proposed section 28M is intended to align with other provisions in the SD Act by using existing terms and concepts, such as the reasonable person test. The department argued that this would allow for existing case law to be considered when interpreting and applying the new provision.
The cornerstone reform (the positive duty)
2.27
Proposed section 47C in the SD Act would create a positive duty for employers and PCBUs to take ‘reasonable and proportionate measures to eliminate, as far as possible’ unlawful conduct, including sexual harassment, harassment on the ground of sex and as provided for throughout the SD Act.
2.28
The AGD described this proposal as ‘the cornerstone reform’ of the Australian government’s response to the Respect@Work Report, and it was supported by submitters and witnesses, many of whom stated that the current complaints‑based framework is ineffective and inappropriate.
2.29
The Diversity Council of Australia highlighted that, under the current approach, employers’ practices are only scrutinised if/when sexual harassment has occurred and been reported. Ms Golledge from the Kingsford Legal Centre pointed out that by then the damage has already been done:
…it's too late at that stage. The damage has been done. If we look at Respect@Work, we know it happens to young people and to people who experience other types of discrimination, and the effect for our clients is that they don't work again and they're unwell. We're losing a lot of potential in terms of people who could be contributing and have often studied and have expertise in particular areas.
2.30
Ms Katherine Eastman from the Law Council described the positive duty as a ‘key and transformational change’ that would shift the legislative focus from being complaints-based and reactive to being preventative and proactive:
A positive duty shifts the focus completely. In effect, it operates like risk management procedures or due diligence...You need to know, frankly, where the hotspots are in your organisation, and you also need to think, from an organisational perspective, about how you respond to manage risk but also to ensure that your workplaces are workplaces where people can exercise, in a very old-fashioned way, quiet enjoyment of work. So the positive duty would require employers to think about their structures, their cultures and the way in which they want to conduct their business but also ensure that they're looking to the future. It allows employers to take progressive realisation of the important suite of human rights.
Operation of the positive duty
2.31
A few submitters and witnesses intimated that proposed section 47C of the SD Act is not quite so novel or necessary. For example, the BCA submitted that the legislative proposal updates ‘the law to reflect what is currently common practice amongst businesses’ and is modelled on a similar duty under Work Health and Safety (WHS) laws.
2.32
Safe Work Australia submitted, however, that the positive duty proposed in the Bill and that currently contained in the model WHS law are different:
Because of…drafting differences, the scope and application of each positive duty may be different. It is not yet clear whether this will be of significance in practice, but it seems to us that it at least has the potential to cause confusion and uncertainty for duty holders. In our view, there may be benefit in more closely aligning the two frameworks to reduce this possibility.
2.33
Ms Megan Davison, Principal Adviser, Safety and Health at the Minerals Council of Australia (MCA), advised that the peak body for the minerals industry supports the proposed positive duty but wanted to also highlight the need for attention to non-legislative approaches:
…there's already been a positive duty in place under the Work Health and Safety Act. But clearly it's not getting to the level of understanding and information by individuals on what sexual harassment is, for a start… So education and awareness are really key, particularly when there is very complex legislation, and certainly the employer is duty-bound to abide by the regulations and understand the impacts of those regulations. At an individual level, regulations are quite inaccessible in their legal language. So, getting the information into accessible, digestible training information as well as capacity building and awareness are really critical…[A]lso important is individuals being empowered and feeling safe and confident to report these incidences, whether these incidences have involved themselves or whether they've observed them.
2.34
Housing Industry Association (HIA) representative Ms Melissa Adler stated that ‘the key takeaway from our perspective is the need for industry-specific guidance and supporting material so that the sector can actually understand what is expected of them’ (such as the Codes of Practice formulated for WHS purposes).
2.35
Other submitters—such as the Ai Group and the Motor Trades Organisations—agreed that the introduction of the positive duty will result in increased regulatory complexity, which, they argued, will detract from the objective of enhancing clarity and certainty in the law.
Scope of the positive duty
2.36
Proposed subsection 47C(3) would specify the people to whom the positive duty applies, that is, duty holders, their employees or workers in the business/undertaking, and the duty holders’ agents. Subsections (4) and (5) would extend the legal obligation to cover sexual harassment perpetrated by third parties, such as customers and clients.
2.37
The ACTU welcomed the extension of the positive duty to third parties, pointing out that some industries—such as hospitality, retail, healthcare, education, transport and community and public services—are more affected by third party sexual harassment than other industries. However, it argued that the Bill must be clearer in relation to the proposed extension:
…s47C(4) as currently drafted does not explicitly refer to third parties, and there is a risk that duty holders and workers do not understand that the subsection is directed at the conduct of third parties, and that duty holders have an obligation to prevent unlawful third party conduct. This should be clarified in the Bill, in order to assist all parties to understand this aspect of the positive duty.
2.38
Ms Kristen Wischer from the Australian Nursing and Midwifery Federation (ANMF) added that the clarification would also ‘go some way to challenging the perceptions…that are held by many in the healthcare industry—that sexual harassment by third parties is just an accepted or expected part of the job’.
2.39
The ACTU, Community and Public Sector Union (CPSU) and ANMF suggested that the heading to the proposed provision be amended to expressly refer to third parties and the provision include a note to inform the intended operation of the provision and avoid unnecessary uncertainty.
2.40
Other submitters raised concerns about the scope of the positive duty based on duty holders’ ability to exercise control over people in the workplace and also the term ‘workplace’, which would be defined in accordance with the Work Health and Safety Act 2011: ‘a place where work is carried out for a business or undertaking and includes any place where a worker goes, or is likely to be, while at work’.
2.41
The National Retail Association, for example, was concerned with the ‘overly broad definition of workplace’:
[Proposed section 47C will have the following effect:]
(a) duty holders will be obliged to take measures in respect of places which are conventionally not considered to be a workplace, or for places [over] which the duty holder does not have any exercisable control;
(b) duty holders will be obliged to attempt to take measures in respect of persons who are conventionally not considered to be their workers, or persons whom the duty holder does not have any exercisable control over[.]
Responsibility for sexual harassment in the workplace
2.42
Submitters and witnesses held different views on whether the positive duty should apply only to duty holders. Most stakeholders explicitly supported proposed section 47C, while others contended that the responsibility for preventing sexual harassment in the workplace should be more broadly shared.
2.43
The Motor Trades Organisations cautioned against the ‘misguided notion’ that employers and PCBUs are solely responsible for the prevention and elimination of workplace sexual harassment and discrimination:
…sexual harassment and discrimination are complex societal issues which, as widely acknowledged, must be a shared responsibility (across both the community and within the workplace) if best practice outcomes are to be achieved in practice. Accordingly, measures that do not in practice promote shared responsibility, ultimately serve to undermine attempts to successfully implement preventative and early intervention strategies.
2.44
In evidence, Mr Daniel Hodges, representing the Motor Trades Organisations, stated that ‘whilst an employer rightfully bears the primary duty of care and responsibility for preventing sexual harassment and discrimination in the workplace, what appears to be lost is that employees also hold a duty of care and responsibility to both themselves and others’.
2.45
The Sex Discrimination Commissioner acknowledged that the positive duty could apply to people in the workplace—such as employees and contractors—however, she emphasised that ‘the positive duty and the employers being focused on this will be the single most revolutionary change that will impact sexual harassment’.
Determining compliance with the positive duty
2.46
Proposed subsection 47C(6) would set out the matters to be taken into account when determining compliance with the positive duty, including a duty holder’s size, the nature and circumstances of their business or undertaking, their resources, and the practicability and cost of steps to eliminate the unlawful conduct.
2.47
The Australian Institute of Company Directors submitted that the flexibility of the proposed provision would help to ensure that the duty can be applied to business entities regardless of size and resourcing capabilities:
In other words, organisations as diverse as micro-businesses, SMEs, community and volunteer organisations will be held to a scalable standard on what constitutes ‘reasonable and proportionate measures’ in discharging the duty.
2.48
Other submitters considered that proposed subsection 47C(6) should be expanded to include matters beyond a duty holder’s circumstances. In their view, the provision should include considerations from the employees/workers perspective and of the specific risks or drivers of sexual harassment. The ACTU submitted:
This gives the impression that the attributes and needs of the duty holder are paramount in assessing whether the positive duty has been met. This could result in the practical effect of the positive duty being significantly diluted, by making it too easy for duty holders to show that they have complied with the positive duty, and by not requiring any consideration of the specific drivers and risks in a workplace, and the severe consequences for workers of those risks not being addressed.
2.49
The ACTU suggested that proposed subsection 47C(6) of the AHRC Act should be amended to include the following additional matters:
a) The circumstances and needs of employees and/or workers in the duty holder’s business or undertaking;
b) The type of industry and work performed;
c) Any specific drivers, risks or systemic issues present within the particular industry or workforce, including culture, workforce profile (including gender balance and insecure work), power imbalances, and work design and systems of work;
d) The benefits of implementing the measures;
e) The consequences and risks of failing to implement measures; and
f) The extent to which the duty holder has complied with any relevant guidelines published by the Commission.
2.50
The AGD highlighted that proposed subsection 47C(6) would provide for ‘non-exhaustive matters to be considered by the decision-maker’.
Interaction of the positive duty with the model WHS law
2.51
The AGD submitted that the positive duty is intended to operate concurrently with existing duties in the model WHS law:
…[B]oth the model WHS laws and the positive duty in the SD Act would require employers and PCBUs to do what is reasonable in the circumstances. In terms of assessing what is reasonable, the list of matters for consideration in the Bill substantially overlaps with the list of relevant matters in section 18 of the model WHS laws. In practice, this indicates that employers and PCBUs would take the same practical steps, such as implementing policies and conducting training, to meet their obligations under both frameworks. It is intended that the model WHS laws and positive duty in the SD Act would operate in a mutually reinforcing way to build safer and more respectful workplaces.
2.52
Safe Work Australia agreed that the two regimes are quite separate, with standards that create duplicate—but not equivalent—legal obligations:
More concerning perhaps is the question of whether one approach sets a lower threshold for compliance than the other…[T]he model WHS laws require a duty holder to consider and implement measures in relation to systems of work, physical environments and work design. Further…the question of what is ‘reasonably practicable’ is determined objectively, not by reference to a particular PCBU’s capacity to pay or other individual circumstances. All PCBUs have to meet the duties under the model WHS Act regardless of their size, financial circumstances or capabilities. A PCBU could not expose workers to a lower level of protection from sexual harassment simply because they are, for example, a small business with no human resources capacity. In comparison, the proposed duty in the SD Act focusses on subjective considerations…In practice, the differences in approach may mean that the SD Act imposes a lower threshold for compliance, although of course this is yet to be tested. Our concern is if this is correct, it may result in duty holders only doing what is required to comply with the SD Act and therefore failing to comply with WHS laws.
2.53
The Ai Group suggested that, as the SD Act and model WHS laws have different employer obligations, ‘it is essential that it be made clear that compliance activity satisfying [proposed] section 47C may not result in satisfying WHS obligations in respect of unlawful discrimination and harassment’.
2.54
Some stakeholders considered that it might be beneficial for the Bill to use the WHS law legal standard ‘reasonably practicable’, rather than the SD Act’s proposed ‘reasonable and proportionate measures’. AGD representative Ms Murray did not consider that there would be any benefit to this approach, advising that, in practice, there is no difference between the two standards:
Legally, it is the word 'reasonableness' that is doing the main work of the provision. Both frameworks provide a degree of consideration of compliance within the facts of an industry or organisation. We don't consider that in practice to be a material difference.
Enforcement of the positive duty
2.55
Proposed Division 4A of Part II of the AHRC Act would grant the AHRC functions in relation to the positive duty, including to support employers and PCBUs to meet their obligations and achieve compliance and, when necessary, to monitor and assess compliance.
2.56
AGD submitted that the proposed functions would enable the AHRC to work collaboratively with employers and PCBUs and to enforce the positive duty. The department noted that the compliance powers are intended ‘to be used by the Commission as necessary, if efforts to achieve voluntary compliance have been unsuccessful’. Further, the compliance powers focus on remedial actions, rather than pecuniary penalties:
…the intention of this compliance regime is not to penalise employers for non-compliance—it is focused on lifting standards and achieving cultural change to create safer, more respectful workplaces.
2.57
The AHRC welcomed proposed Division 4A, submitting that the Bill would implement recommendations from the Respect@Work Report and its Free and Equal position paper.
2.58
Other submitters highlighted that, in order to perform its new functions effectively, the AHRC would require additional funding and resources. The Community and Public Sector Union, State Public Services Federation Group submitted that, in the state and territory jurisdictions, a lack of funding has adversely impacted independent agencies ‘to such an extent that the agency becomes unable to effectively carry out its functions on a scale that the public expects’.
2.59
ACTU representative Ms Alessandra (Sascha) Peldova-McClelland expressed a view that the AHRC is similarly affected, which is having a deleterious impact on its existing functions:
…[What the AHRC] has is woefully inadequate to perform even its current functions. I think there's a six month wait for a complaint to be investigated and that's within the commission's current functions. Six months is just far too long for a distressed worker or person to be waiting for their complaint to be dealt with…[T]he commission did have its budget substantially cut under the previous government so it at least needs to come up to a baseline level. But then also it has got all these new enforcement functions and in order for them to have meaning and effect it needs to be appropriately resourced.
2.60
Most submitters and witnesses welcomed the proposed functions that would enable the AHRC to enforce the positive duty but articulated some specific concerns with the proposed provisions.
Guidance and resource material
2.61
Proposed paragraph 35A(a) of the AHRC Act would confer on the AHRC the function of preparing and publishing guidelines for complying with the positive duty in relation to sex discrimination.
2.62
The Law Council submitted that the AHRC should publish guidelines shortly after the granting of Royal Assent to the Bill:
…[T]he AHRC’s guidelines will need to be published early enough in the 12-month [transition] period to afford law firms sufficient time to make the necessary arrangements. Acknowledging that the AHRC also has limited resourcing, the Law Council would suggest the Guidelines be published three to six months after Royal Assent.
2.63
Other stakeholders called for business and industry-specific guidance and resources to be provided to enable employers and PCBUs to understand what would be required under the Bill. The Australian Small Business and Family Enterprise Ombudsman (ASBFEO) submitted that introduction of the positive duty would increase existing regulatory burdens, particularly for small businesses:
…when new regulations are introduced most small businesses do not have the resources to manage the change, and typically the time-poor owner running the business and managing several aspects must create time to understand and comply with regulatory changes.
2.64
The ASBFEO called on the AHRC to provide ‘clear guidelines for compliance with the positive duty and actively promote small and family business’ understanding of their obligations’. This view was shared by the National Retail Association and the AICD, who echoed the Law Council’s call for materials to be provided as early into the Bill’s transition period as possible.
2.65
The ANMF urged the AHRC to develop the requisite materials in conjunction with trade unions and industry to ensure that industry-specific risks are adequately addressed. It highlighted that ‘nursing is a profession that is overrepresented when it comes to instances of occupational violence and sexual harassment perpetrated by third parties’.
2.66
Other submitters and witnesses expressed their support for practical and effective approaches to address workplace sexual harassment. The HIA explained the types of practical measures that its members might find helpful:
…[I]t's really just some clear examples of what compliance looks like… [I]n the explanatory memo there are certainly examples of breaches of the duties but no examples of what good practice would look like, or what an acceptable response to comply with the positive duty would be, or an acceptable way to manage a workplace so that it isn't considered a hostile workplace. I don't know how else to say this, other than to say that we're just looking for really practical, clear examples of what compliance looks like.
2.67
Some submitters and witnesses drew attention to initiatives undertaken by business and industry to assist their members to address workplace sexual harassment. In addition to its own material, Ms Davison, for example, highlighted that the MCA has worked with the Respect@Work Council and the AHRC to develop further guidance material:
…we've already advanced a lot of our own guidance material…We've developed our own industry toolkit to support implementation of our industry code, which all members are required to adopt. That goes to various templates. Companies, from small to medium, may not have the inherent capacity internally to develop these approaches and policies… One thing with broad guidance material is that it can become very high level without the practical examples. So we've taken it upon ourselves as an industry sector to develop those fit-for-purpose guidance materials, and we're continuing to add to that toolkit.
2.68
The AGD confirmed that there is a lot of work in progress—particularly through the AHRC and the Respect@Work Council—to develop bespoke educational material, which is ‘quite well progressed’.
We are also doing work in terms of user training and, more broadly, we are in the process of doing a range of consultations on a number of the different guidance materials around what good practice looks like and things like confidentiality clauses. So all of that work is progressing… It's just involving a large amount of consultation because it's so important that this regulated population understand what best practice is and how they can achieve it.
Monitoring and assessment functions
2.69
The AGD’s submission listed clearly the key compliance functions that would be granted to the AHRC under the Bill. This section focuses on two of these functions, as follows.
Inquiries into compliance
2.70
Proposed section 35B of the AHRC Act would enable the AHRC to inquire into a person’s compliance with the positive duty in relation to sex discrimination if the AHRC reasonably suspects that the person is not complying.
2.71
Trade unions argued that, when inquiring into compliance, the AHRC should be required to notify, consult with and give unions and workers an opportunity to make submissions. The ACTU argued:
This will ensure that investigations have regard to worker experiences and perspectives, not just those of the employer or duty holder and their official documentation such as policies and procedures, and will therefore lead to more substantive change.
2.72
Mr Feltham and his colleagues submitted that there should be more clarity about what information the AHRC can seek or take into account and the process to be used by the AHRC.
Compliance notices
2.73
Proposed section 35C of the AHRC Act would require the AHRC, as soon as practicable after commencing a compliance inquiry, to give the person a written notice stating the grounds on which the inquiry was commenced. There is no provision in relation to the publication of compliance notices.
2.74
The AHRC argued that the proposed compliance notices regime should expressly provide a discretion for the AHRC to publish compliance notices on its website once any periods for reconsideration or review have expired. It argued that employers and PCBUs might be dissuaded from entering into enforceable undertakings, if the compliance notices regime offers a less visible enforcement option:
…[T]he inclusion of an explicit statutory discretion to publish compliance notices on its website will increase transparency around how the Commission is monitoring compliance with the positive duty and serve an important educative function for duty holders and the community. Additionally, providing the Commission with statutory authority to publish enforceable undertakings on its website — but not compliance notices — may create an undesirable incentive for employers and PCBUs to avoid entering into enforceable undertakings with the Commission because of the associated publicity.
As enforceable undertakings require discussion and agreement between a regulator and the person suspected of breaching the law, they are often an effective cooperative tool for regulators and a very good mechanism for achieving organisational change and systemic reform. Unlike a compliance notice, which directs a person to take specified action, or refrain from taking specified action, enforceable undertakings are entered into voluntarily. The effectiveness of the introduction of enforceable undertakings relating to the positive duty in relation to sex discrimination may be undermined if a person elects to proceed down the compliance notice path instead because it is private and offers less potential for reputational impacts.
2.75
The AGD did not accept this suggestion, advising that there is a hierarchy with the different regulatory tools:
The compliance notice is the introductory level of making clear to employers or PCBUs what they need to do to achieve compliance with [the] positive duty. A big part of the positive duty and the regulatory approach that the commission will be taking is about collaborative compliance…If they achieve compliance, then that's great, and if they don't then they can progress to an enforceable undertaking, which would then be public. So it's balancing that really strong desire for compliance against the impact of publishing things at a relatively early stage in the compliance.
Enforcement by the AHRC
2.76
A few submitters and witnesses did not support the Bill’s proposal to grant enforcement powers to the AHRC. The Law Council noted:
…the importance of ensuring the appropriate separation…between the functions of the AHRC regarding conciliation and complaints resolution and the functions of the AHRC regarding compliance and enforcement under the SDA. The perception of impartiality and independence is essential for any tribunal with jurisdiction to resolve complaints of workplace sexual harassment.
2.77
Ai Group considered it ‘inappropriate for the AHRC to acquire regulatory and enforcement powers if it is to maintain its independence as a complaints body equipped to impartially resolve complaints’. Its submission highlighted:
…there is an established institutional separation of these functions in workplace matters between the [Fair Work Commission] and the Fair Work Ombudsman…[T]his provides parties with confidence that workplace grievances and disputes will be managed fairly.
2.78
Some submitters argued that, given the similarity between the SD Act and the model WHS law, WHS regulators should be tasked with enforcing the positive duty. The MCA submitted that this would allow for on-the-ground consistency and certainty:
Duty holders under the [SD Act] and model WHS laws (e.g. employers) should be entitled to know how compliance with, and breaches of, the positive duty will be enforced, and this will be known with less certainty where there are two regulators enforcing substantively similar duties.
2.79
The ACTU suggested that more thought is required on how the AHRC is to exercise its ‘paper-based’ compliance functions:
[The AHRC does] not have the ability…to actually enter workplaces, investigate or inspect things, interview workers or other people, or seize things. We think that all of those powers would be incredibly helpful. There are a number of options to allow the commission to have access to those powers…[A]n option…is that the WHS regulator should just do that work. Another option is to give the commission access to those powers through an inspectorate—either its own or by way of a service agreement with a WHS inspectorate…[noting] that the duties under WHS and antidiscrimination legislation are a little different, and they do have different histories and emphases…[I]t's important that both of them exist and are allowed to do their specific work. In terms of enforcement, I think there is scope to look at how best that works. I wouldn't want to take all enforcement away from the Human Rights Commission, but I think there could be a sharing of resources with WHS regulators, in areas such as going into workplaces, that could be very fruitful.
2.80
In evidence, Ms Jenkins noted that the Respect@Work Council ‘brings together’ all the various regulators:
…[T]he legislative recommendations [in the Respect@Work Report] are to say: 'These laws all do have a role to play.' With Respect@Work, we really did consider whether we would say, 'Let's stop that; let's just put it in one place,' but our finding was that, actually, in Australia that intersection of work health and safety laws has mostly worked quite well. That recommendation about consistency, clarity and coordination was directly saying that we think these regimes should continue, but they should talk to each other much better.
2.81
AGD submitted that the AHRC is ‘the most appropriate body to monitor and enforce compliance with the positive duty because it has significant expertise and experience in applying anti-discrimination laws’. In evidence, Ms Murray highlighted also that the SD Act and the model WHS law operate according to different legal standards:
We have done a huge amount of work with our workplace health and safety colleagues on this. Fundamentally, we've got a civil remedy system in antidiscrimination law, and a criminal based system in work health and safety. So there are some practical legal obstacles to that approach, as the Human Rights Commission operates to a civil standard, and the WHS regulators operate to a criminal standard.
2.82
In response to the ‘non-paper based’ issues raised by the ACTU, Ms Murray considered that ‘there’s real potential for great complementary regulatory approaches’, with WHS regulators looking at ‘psychosocial risks and what that means for sexual harassment and how that looks in individual workplaces’.
Representative actions in the federal courts
2.83
Schedule 4 of the Bill would amend the AHRC Act to extend the representative actions regime to the Federal Court of Australia and the Federal Circuit and Family Court of Australia (collectively, ‘the federal courts’). At present, the Act enables representative bodies to lodge a representative complaint in the AHRC only.
2.84
AGD submitted that the proposed extension would improve support for people who experience harassment and discrimination to navigate the legal system and resolve their complaints, as well as address issues of systemic discrimination. It explained:
[At present] representative bodies are unable to make an application to the Federal Courts on behalf of the group if the matter is not resolved and terminated by the Commission. This means that the ability to initiate court proceedings under the AHRC Act is more constrained than the ability to bring complaints to the Commission, which creates procedural challenges for representative bodies.
2.85
The Law Council submitted that two of its constituent bodies supported the proposed extension of the representative actions regime, although the Law Council itself had not reached a final position on the matter, owing to the introduction of four consequential complexities (such as the requirement for written consent from each person represented in the application).
2.86
Equality Australia supported the proposal but argued that the same rules should apply for representative bodies making a representative complaint to the AHRC, as for filing a discrimination claim in the federal courts. In particular, it argued that representative bodes should not be required to individually name a beneficiary class or to obtain consent from all members of that class, as is proposed in subsection 46POA:
Requiring an organisation (such as an LGBTIQ or disability rights organisation) to individually name and obtain consent from the beneficiary class defeats the purpose of enabling an organisation to uphold the law on behalf of its constituency, and it also means that representatives complaints cannot in practice be made to the Commission and then go on to court if conciliation is not successful and the complaint is terminated by the Commission.
2.87
AGD acknowledged that there are more stringent conditions for representative proceedings in the federal courts (commonly referred to as ‘class actions’) but emphasised that those conditions are less likely to apply for matters involving discrimination:
…[C]lass actions are rarely used in the anti-discrimination context because of the technical and complex requirements under the [Federal Court Act 1976]. It is important to note that class actions are a distinct and separate mechanism from representative applications made under the AHRC Act.
2.88
Specifically in relation to concerns about consent requirements, AGD considered that these requirements are appropriate:
[The Bill’s] approach is considered appropriate for conciliation in the Commission as it is free, informal and confidential. However, under the Bill, consent is required in the context of representative applications at the court stage. Given the public nature of court processes, the need to provide evidence and the potential implications for any future individual action, it is important that individuals have consented to their involvement and understand any cost implications.
The costs neutrality approach to costs protection
2.89
Proposed section 46PSA of the AHRC Act would provide for a ‘costs neutrality’ approach to costs protection, whereby the default position is that each party bears its own costs, subject to a judicial discretion to make alternative costs orders in certain circumstances. This costs protection would apply to all federal court actions for unlawful discrimination, not just the unlawful conduct prohibited under the SD Act.
2.90
AGD submitted that this proposal would provide a degree of costs certainty to federal court applicants in all unlawful discrimination proceedings, as well as improve access to justice. It stated that costs certainty would strengthen over time, as jurisprudence develops in regard to the provision.
2.91
The AHRC acknowledged that the Respect@Work Report advocated costs protection reform based on the different model contained in section 570 of the Fair Work Act 2009. However, the AHRC’s position has evolved:
In its Free and Equal position paper, the Commission ultimately recommended that the default position in unlawful discrimination matters should be that parties bear their own costs, with the court retaining a discretion to award costs in the interests of justice. The Commission further recommended that clarity be provided in the AHRC Act by way of mandatory criteria to be considered by the courts in determining whether to award costs in the interests of justice. This is the model adopted in the present Bill and the Commission, including the Sex Discrimination Commissioner, supports it.
2.92
The Law Council submitted that, on balance, it supports the cost neutrality approach adopted in the Bill, although in its view there should be a carve-out for class actions with certain characteristics. In those cases, the current approach of ‘costs-follow-the-event’ should be retained.
2.93
Other submitters and witnesses expressed a range of views on proposed section 46PSA. Several stakeholders supported the provision on the basis that cost neutrality would be an improvement to the current approach. However, other stakeholders argued that the proposal does not go far enough and would fail to achieve its intended objective.
Discretion of the federal courts
2.94
Proposed subsection 46PSA(2) of the AHRC Act would grant the federal courts a discretion to award costs to either party where the court ‘considers that there are circumstances that justify it doing so…as the court considers just’. The following subsection sets out matters to which the court must have regard when considering whether to exercise its discretion.
2.95
Several submitters and witnesses contended that the circumstances in which the federal courts could exercise the proposed discretion are not sufficiently defined. Ms Golledge from Kingsford Law Centre said, for example:
Cost neutrality is really important, but the operation of the discretion around costs might mean for our clients…that they're still really concerned about cost risk because it's huge amounts of money. We've come to that position after quite a lot of deliberation. So cost neutrality is an improvement—don't get me wrong—but there's a lot more to do in terms of recognising that we do have a massive access to justice problem in Australia, and we have an underfunded legal aid and community legal sector that can respond to these matters.
2.96
Mr Kieran Pender, a discrimination law expert, argued that, without a body of judicial consideration and guidance, there would be continued uncertainty around the operation of the proposed protection, meaning that the risk of adverse costs orders will continue to deter complainants:
Although [proposed subsection 46PSA(3)] sets out mandatory criteria for courts to consider, the vagueness of the overarching test – ‘circumstances that justify it in doing so…as the court considers just’, will mean that the spectre of an adverse costs order will linger.
2.97
Grata Fund commented that the continuing possibility of adverse costs orders ‘will limit the ability of applicants to secure legal representation and create new access to justice issues by disincentivising pro bono work’:
Currently, many applicants making discrimination claims in the federal courts rely on barristers and solicitors to assist on a conditional cost basis or ‘no-win, no-fee’ model, where their costs can be recovered from the respondent if they are successful. However, the costs neutrality approach…[would mean that they cannot] recover their costs even if the applicant is successful. While the proposal gives courts the discretion to depart from the default position, there is no certainty that this discretion will be exercised, even if the applicant is substantially successful… This results in a situation where either the applicant will have difficulty securing lawyers willing to forego their fees entirely…or the applicant will be responsible for paying their own legal fees even if they are successful in their claim. Given the low amount of damages awarded to successful victim-survivors in discrimination and harassment claims, there is a high risk that any awarded damages will not even cover their legal costs, therefore leaving the victim-survivor in a worse financial position than before they brought the claim.
Equal Access approach
2.98
Several submitters and witnesses—including National Legal Aid and the Public Interest Advocacy Centre—suggested the ‘equal access’ approach, as an alternative to the ‘cost neutrality’ approach. In their view, this alternative proposal would be more likely to increase access to justice for people experiencing discrimination, while also having a deterrent effect.
2.99
Grata Fund explained that, under the Equal Access approach:
claimants will generally not be liable for adverse costs, except where vexatious claims are made or a claimant’s unreasonable conduct in the course of proceedings has caused the other party to incur costs;
where an applicant is successful and the court has found that a respondent has engaged in discriminatory conduct, the respondent will be liable to pay the claimant’s costs; and
where a claimant is unsuccessful, each party will bear its own costs.
2.100
Some submitters highlighted that the ‘equal access’ approach has been implemented in other Commonwealth laws, such as for whistleblowers in section 1317AH of the Corporations Act 2001 and section 18 of the Public Interest Disclosure Act 2013, and in section 14ZZZC in the Taxation Administration Act 1953.
2.101
Mr Pender argued that there is significant similarity in the underlying policy intent of the whistleblower and sexual harassment laws, where individuals seek to vindicate a wider public interest:
Given complainants in unlawful discrimination cases are similarly seeking to address a wider societal scourge, I do not see why they should be afforded a lesser level of protection. Put another way – why does the law provide special, indeed unique costs protection for whistleblowers, but not sexual harassment complainants?
2.102
Maurice Blackburn Lawyers supported modelling costs protection on section 1317AH of the Corporations Act 2001, submitting that this model ‘attempts to address both the resource and power differential between potential victim‑survivors and respondents’, which is almost always present in claims under the SD Act:
The Whistleblower Cost Protection Provisions, we believe, would be far more effective in achieving the stated aim of Cost Protection, and align better with the intent of [Respect@Work Report] Recommendation 25.
2.103
AGD resisted calls for the Bill to adopt an ‘equal access’ approach to costs protection reform on the basis that the ‘cost neutrality’ approach is fairer to applicants and respondents:
Under [the ‘equal access’] model, the respondent has limited capacity to recover their own legal costs, even if they are successful. This model is designed to remove the risk of adverse costs for applicants and shift the financial burden of legal proceedings from the applicant to the respondent. The cost neutrality approach is adopted in the Bill, rather than the Equal Access model, because it would allow the courts to exercise discretion and make costs orders appropriate to the conduct of the parties and the merits of the matter. It would also ensure that respondents are able to recover their costs if they are successful and it would be just to do so, noting that it is not appropriate or accurate to assume that all respondents are well‑resourced.
2.104
The Law Council agreed that the ‘equal access’ approach favours applicants/plaintiffs, who ‘may only be ordered to pay costs in certain circumstances, such as where their claim is determined to be vexatious or initiated without reasonable cause’. Ms Nicola Street from Ai Group added that the matter of litigation costs is just as important to employers, as it is to employees.
Sufficiency of transition and review arrangements
2.105
Clause 2 of the Bill sets out transition arrangements, with proposed provisions relating to hostile workplace environments and the positive duty commencing the day after Royal Assent, and the AHRC’s monitoring and assessment functions commencing 12 months later.
2.106
Some submitters expressed concerns about the amount of time available to duty holders to understand and implement their obligations under the Bill (also see ‘Guidance and resource material’ above). The HIA commented, for example:
As noted by the Respect@Work Report, and echoed throughout the EM, obligations relating to sexual harassment currently exist, albeit in various forms, but employers and PCBUs appear to be broadly unaware of their obligations or how to take appropriate actions to respond to such circumstances. More rules do not of themselves, make people comply.
2.107
Ms Adler considered that a staged transition period would ‘certainly put the industry on notice’, as well as giving the HIA an opportunity to support members ‘in that process of understanding and learning about what these new duties would involve before there's that legislative rigour around an obligation, which, in the terms as set out in the bill, is quite new’.
2.108
The Kingsford Legal Centre recognised that, for employers and PCBUs, the obligations to be imposed under the Bill ‘may seem like a significant new regime that needs time to implement’. It called for this concern to be balanced against the need for urgent reform, particularly where delays result in further harm to people experiencing sexual harassment.
2.109
The Kingsford Legal Centre noted the proposed transition arrangements, suggesting, however, that the compliance regime commence after a longer period of cultural and systems reform, including to develop capacity within the AHRC, with statutory review processes to be incorporated into the Bill:
We recommend the Bill include a legislative requirement for statutory review to table a report to Parliament outlining the effectiveness of the amendments, including the positive duty, and whether the Act is meeting the objects of the Act. This report should be introduced at least 18 months after the commencement of the Bill. We also recommend that the Bill sets out a process for regular and ongoing statutory review of the Bill.
2.110
Ms Golledge explained:
We've chosen 12 months to 18 months because we think that will give an ability to see how [the Bill is] operating…I don't want to be in this position where, in 10 or 15 years’ time, we're saying, 'We didn't really recognise these unintended consequences' or 'We didn't fully realise how the compliance regime would work or not'.
2.111
The AGD confirmed that the proposed enforcement powers will not come into effect immediately, allowing duty holders time to implement the duty:
…[A]ll the provisions except the compliance associated with the positive duty will come into effect on Royal Assent and then there'll be a 12-month delay before the compliance powers become something that the commission has available to them…The positive duty exists but it won't be an enforceable duty in the compliance powers until 12 months after.