What's on the horizon for workplaces in 2024?

The Commonwealth Government has moved swiftly to put its stamp on the industrial relations and employment landscape since its election in 2022 and significantly more change is in the offing.

All of the legislative workplace reforms passed in late 2022 have come into effect throughout 2023, and more have been passed in the final month of the year – with another tranche due in early 2024.

Safety regulators across the country have become actively involved in sexual harassment matters, some for the first time, as part of their focus on psychosocial risk. Due to the extensive growth of regulation in psychosocial risk, this year our global Health and Safety Team conducted its inaugural client survey into psychosocial and psychological risks in the workplace. The report of our Global Survey found that many organisations are still at a very early stage of their journey in addressing psychological health as a "safety" issue.

The Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability released its Final Report in September 2023 and the Government's response to the report is expected in 2024.

We hope you enjoy this edition of Fwd: Thinking where we consider our top three workplace issues for 2024:

• The status of industrial relations in 2024;
• Recognising and managing psychosocial risks in the workplace, including sexual harassment; and
• Responding to the Final Report of the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability.

The status of industrial relations in 2024

This year has seen significant reforms in industrial relations with the passing of further amendments to the Fair Work Act 2009 (Cth), and more to come next year. Towards the end of 2022, we saw changes introduced by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 which commenced progressively. (See our October 2022 – Employment Alert here). The amendments regarding the ability to rope employers into multi-enterprise agreements and the Fair Work Commission receiving new powers to make intractable bargaining declarations commenced in June this year.

The Full Bench of the Fair Work Commission has considered intractable bargaining declaration provisions in an application brought by United Firefighters' Union of Australian against Fire Rescue Victoria. In considering whether there was no reasonable prospect of agreement being reached if the Commission did not make the declaration sought, it confirmed that it does not require a "certain and concluded determination" that an agreement cannot be reached but rather that it was "rationally improbable" that an agreement would be reached. We anticipate seeing further cases in 2024 considering these new provisions further, but it appears that the bar may not be as high as originally anticipated.

Multi-employer bargaining

In September this year, a Full Bench of the Commission issued its first supported bargaining authorisation in the early childhood education and care sector, and in the same month issued the first single-interest employer authorisation in relation to Catholic schools in Western Australia.

We expect to see these multi-employer bargaining streams continue to be tested, and if authorisations are made, or multi-employer agreements reached, the further testing of the roping-in provisions.

The second tranche of the now-split Fair Work Legislation Amendment (Closing Loopholes) Bill 2023, will deal with further reforms for multi-employer bargaining, limiting the circumstances in which an employer covered by a multi-employer enterprise agreement can return to the single enterprise bargaining stream. (See our September – Employment Alert on the Bill here.)

If, as an employer, you have stayed or wish to remain in the single enterprise agreement stream for bargaining, and if multi-employer bargaining is a real prospect, this needs to be carefully thought through and planned for with consideration of the more recent reforms.

Labour hire

The Closing Loopholes Bill also proposed the introduction of a new regime regulating labour hire, providing the Commission with a new jurisdiction to make 'same job, same pay' orders for labour workers to be paid the same rates as employees of the host employer. (See our September Employment Alert.)

The first tranche of the split Bill passed the Senate late last week with some amendments. (See our December Employment Alert here).

The provisions mean that certain persons, including a host, employees or unions, can apply to the Commission for a "regulated labour hire arrangement order" requiring that affected labour hire employees be paid the same rates as direct hire employees of the host under its enterprise agreement. Applications for orders may be made following Assent of the Bill (which is expected early in 2024); however, any orders of the Commission cannot commence until 1 November 2024.

Employers relying on labour hire arrangements should consider how they engage labour in the future, and in particular whether there is a need for a different engagement strategy (through direct hire) or whether the benefits from labour hire even remain given their business' circumstances.

Fixed term contracts

The Secure Jobs, Better Pay amendments passed in December 2022 also introduced a limit to the length of fixed term contracts. Those amendments commenced on 6 December 2023, and employers will soon start to feel the impact of these limitations. If it has not been done already, employers should ensure they are managing the engagement of employees on fixed term contracts consistent with those provisions that have now come into force.

Other reforms

The second tranche of the Closing Loopholes amendments, which relate to the 'gig economy' and road transport industry, amendments relating to casual employment conversion, and the further changes to the multi-employer bargaining regime are expected in early 2024.

The second half of 2024 will likely see the Commission dealing with applications for minimum standard orders and minimum standard guidelines for the gig economy and road transport industry, and applications for a new unfair deactivation/termination regime for those industries.

The next federal election must be held before May 2025. With three rounds of reforms having been undertaken over the space of 18 months, dealing with each of the key areas that formed part of the current federal government's election platform (and more), it is likely that any legislative amendments on industrial relations will be less significant in the back end of 2024 and in the lead up to the election. There is a significant amount of 'bedding in' of the new laws still to be done, however, and there will be no shortage of developments for employers to deal with as the new regimes, and cases wind their way through the Commission and courts.

Authors: Trent Sebbens, Partner; and Kate Hollings, Senior Associate.

Recognising and managing psychosocial risks in the workplace, including sexual harassment

Psychological health is critically important to everyone, everywhere, and in recent years the focus has shifted towards how employers can address what are now described as 'psychosocial risks' in the workplace.

Workers (no matter what industry they belong to) are likely to be exposed to a combination of work-related psychosocial hazards and risk factors. These may include stress, fatigue, bullying, violence, aggression, remote or isolated work, harassment and burnout, as identified by Safe Work Australia in its Model Code of Practice - Managing psychosocial hazards at work. These risks can be harmful to the health of workers and compromise their wellbeing beyond the workplace.

Over the past 12 months, many jurisdictions in Australia have introduced updates to their work health and safety regulations to expressly require persons conducting a business or undertaking (PCBUs) to eliminate psychosocial risks in the workplace or, if that is not possible, to minimise those risks as far as is reasonably practicable. Psychosocial risk regulations are now in force in all Australian jurisdictions except for Victoria (where they have been proposed), and Tasmania.

Increased regulatory focus

Unsurprisingly, coinciding with the updates to the Workplace Health and Safety (WHS) regulations across Australia, we have seen an increase in regulatory focus and activities across most jurisdictions with regard to psychosocial risk. For example, regulators are placing an emphasis on psychosocial risk in their strategies and agendas.

Safe Work Australia, in its work health and safety strategy for 2023 through to 2033, identifies managing psychosocial risk in their top three persistent challenges. In contrast, only 37% of respondents to Ashurst's recent Global Survey on Psychosocial and Psychological Risks in the Workplace with primary operations in Australia ranked psychosocial risk in their top 10 organisational risks.

Bullying and harassment as combined HR and Safety team issues

WHS regulators are now more actively investigating matters that were once commonly considered to fall within the responsibility of human resources departments or anti-discrimination or employment tribunals. These matters include how employers might deal with and investigate workplace complaints and concerns of bullying and harassment.

We are now seeing improvement notices issued by WHS regulators requiring:

• the revision of traditionally 'HR' policies (such as dealing with bullying, harassment and discrimination and about whistleblowing);
• the preparation of risk assessments focussed on psychological risks, including with respect to sexual harassment;
• harassment-related misconduct matters being referred to safety teams for management concurrently with disciplinary processes; and
• training for all staff across organisations on the prevention and management of bullying and harassment.

80% of respondents to our Global Survey on Psychosocial and Psychological Risks in the Workplace with primary operations in Australia categorised psychosocial risk as a safety issue, compared to 53% who categorised it as an HR issue. These results suggest that there is a need and opportunity for greater collaboration and communication between HR and safety teams, consistent with the approach being taken by WHS regulators.

The focus of WHS regulators also mirrors amendments to the Sex Discrimination Act 1984 (Cth) made in December 2022 introducing a positive duty on all employers and PCBUs to take reasonable and proportionate measures to eliminate workplace sexual harassment, victimisation and sex discrimination as far as possible, and giving the Australian Human Rights Commission (AHRC) considerable new powers to enforce this duty. The 12-month grace period to prepare for this duty ends in December 2023.

We expect both WHS regulators and the AHRC to increase their focus on prevention of sexual harassment in 2024. In particular, we expect significant focus on preventative control measures. Traditional HR approaches (as known as "administrative controls" in safety terms), such as policies and training, are unlikely to be sufficient of themselves to meet the positive duty or WHS regulators' expectations.

Enforcement activity

In the last few years, we have seen a steady increase in WHS regulators taking enforcement action in relation to psychosocial risk. Earlier this year, the New South Wales Ambulance Service entered a plea of guilty to breaching the Work Health and Safety Act 2011 (NSW) in circumstances where an ambulance driver was alleged to have taken an opioid painkiller from work and later died by suicide. The New South Wales District Court found that the appropriate fine for the offence was AU$250,000.00, reduced by 25% to reflect the guilty plea (AU$187,500.00 total).

8% of respondents to our Global Survey on Psychosocial and Psychological Risks in the Workplace with primary operations in Australia indicated that they had been investigated or been a party to actual or threatened litigation or an enforceable undertaking with respect to a psychosocial breach in the last two years. Based on current activities by WHS regulators, we expect to see further WHS prosecutions relating to psychosocial risk in 2024.

Employer focus for 2024

To meet their duties under WHS and anti-discrimination laws, PCBUs will need to be more proactive about seeking to address psychosocial risks in workplace investigations and other traditional 'HR' areas, including by applying a safety lens on those issues.

Achieving tangible change at operational levels within organisations is likely to require more than merely tweaking policies and training. The changes to law and regulatory approaches suggest that what is required is holistic change across a number of management practices, such as the identification and assessment of risk, organisational leadership, values/standard setting, policies, investigation practices, training programs, recruitment and promotion, to name a few.

Authors: Julia Sutherland, Partner; Tamara Lutvey, Partner; and Julie Mills, Counsel.

Responding to the Final Report of the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability

On 28 September 2023, the Royal Commission into Violence, Abuse, Neglect and Exploitation of People with Disability released its long-awaited Final Report.

The Final Report reflects an extensive listening process which heard the lived experiences of over 10,000 people. Volume 7 of the Final Report contains 17 recommendations relating to the employment of people with disability.

The Royal Commission found that the labour force participation rate for working-age people with disability was 53% (compared with 84% of people without disability). This participation rate has not substantively changed over the past three decades, and has not increased at all since 2009.

Against this background, the recommendations are focused on addressing barriers to employment (particularly open employment) for people with disability.

The federal government is yet to respond to the Final Report, and may not implement all of the recommendations. However, the recommendations relating to employment demonstrate Australia's changing attitudes towards inclusion of people with disability in workplaces. We expect that the Final Report will shape best practice in workplaces of the future, particularly with employers who endeavour to be an employer of choice for diverse talent.

Some key recommendations for employers to consider in 2024 are:

1. Disability targets in government procurement

This recommendation proposes amending government procurement policies to require consideration of organisations' accessibility, disability, inclusion and adjustment policies in the award of contracts for work. An existing example of this approach is a target for all NDIS Partner Organisations to have at least 15% of their workforce composed of people with disability.

In anticipation of these changes, employers should be proactive in improving their hiring and retention strategies for people with disability and strengthening their accessibility and disability inclusion policies.

2. Consultation with affected people when designing policies

A strong theme throughout the Final Report is the importance of listening to people with lived experience of disability, and including them in the design process of policies that affect them.

The Royal Commission heard many stories of workplaces where this does not occur. Furthermore, the Royal Commission found that such an oversight is enshrined in the Disability Discrimination Act 1992 (Cth), which provides an exception to a claim of discrimination where an employee is unable to carry out the inherent requirements of particular work (even if the employer makes reasonable adjustments). The Royal Commission pointed out that this provision does not expressly require an employer to consult with an employee about the reasonable adjustments that they may need, and recommended legislative change to rectify this.

3. Adjustment plans

The Final Report highlights that employers should use consistent adjustment principles and adjustment passports to respond to the needs of increasingly diverse workforces. While this recommendation was made in the context of employees transferring between public sector agencies and being confronted with entirely distinct adjustment principles on their arrival, it is equally applicable to the private sector, and to workplaces of all sizes.

Employers should ensure that the onus is not on employees to make multiple disclosures to separate supervisors about their needs, but rather proactively establish clear pathways for employees to request adjustments and maintain organisation-wide approaches to accommodating them. Apart from improving the experience of workers with disability, we anticipate taking these approaches will increase the cohesiveness of employers' teams.

4. Pay

The Final Report also addressed prejudicial stereotypes of people with disability in the workforce. This was especially pertinent in its consideration of wages paid to people with disability, which are often less than the minimum wage for people without disability.

The Final Report identified a pervasive view that people with disability are less productive than people without disability, but dismissed this view on the basis that perceptions of productivity are commonly impacted by discriminatory tropes (rather than actual performance). The Final Report also rejected submissions that employers are unable to pay higher wages to people with disability, finding that an inability to afford wages has never been taken as a reasonable excuse not to pay other groups of workers. It remains to be seen whether this approach will be adopted in policy as well.

Summary of actions for employers

Authors: Jon Lovell, Partner; Alex Goodman, Lawyer; and Max Moffat, Graduate. 

All Authors: Trent Sebbens, Partner; Julia Sutherland, Partner; Jon Lovell, Partner; Tamara Lutvey, Partner; Julie Mills, Counsel; Kate Hollings, Senior Associate; Alex Goodman, Lawyer; and Max Moffat, Graduate.