What to make of the “Change The Rules” campaign

Last Tuesday, October 23, 2018, union rallies were held in Melbourne and Sydney in support of the Australian Council of Trade Union’s (‘ACTU’) “change the rules” campaign. The protests followed a series of national TV and radio advertisements launched in early October. The “change the rules” campaign is seeking to “re-balance the system and negotiate on more equal terms with big business.” Despite the ACTU’s active involvement in the introduction of the Fair Work Act 2009 (Cth) (‘Fair Work Act’), the ACTU is now pushing for another overhaul of the industrial relations landscape. In the noise created by this campaign, the unions have perhaps overlooked the fact that for a large class of employees, the current framework provides better protection and job security than they have ever had.

The majority of workplaces in Australia are now governed by the Fair Work Act. The Fair Work Act was introduced by the Rudd Government after coming into power in 2007, largely due to a successful election campaign promising to reform the Howard government’s Workplace Relations Amendment (Work Choices) Act 2005 (Cth) (‘WorkChoices’).

WorkChoices was heavily criticised for increasing employer protections and flexibility for businesses, while reducing employee entitlements and access to unfair dismissal laws and collective bargaining – the legislation was polarising. There were many that felt that it was what the economy needed, although the electorate, as a whole, rejected the approach. It is widely accepted to be one of the key things that ended John Howard’s political career.

However, while the two sides of politics have very different ideas over how “national system employees” should be treated, it is very easy to forget that prior to 2005, there was no such thing.

Throughout most of the 20th century, many employees were covered by either enterprise agreements, or by state or federal based industry or occupational awards. But there was an entire class of employees that had no award or agreement coverage, and no national level “protection” or job security, other than the private protection of their contract of employment with their employer. There was no minimum notice period, no redundancy entitlements, and no unfair dismissal protection for these employees. Some of these were executive level employees, that have traditionally been highly remunerated and regarded as being able to look after their own interests, however most of them were employees in junior professional roles and “middle management”. These employees were extremely vulnerable for many years.

While WorkChoices was quite correctly regarded as oppressive legislation, it had the useful effect of opening the door to legislation protecting “national system employees”. What followed, being the introduction of the Fair Work Act, was seen as a step in the right direction with the introduction of nation-wide minimum standards, and the streamlining of the award system. There are now 122 Modern Awards, compared to over 1,500 awards under the previous system. The Fair Work Act applies to all employees employed by a national system employer, regardless of whether they are permanent or casual. Further, some provisions in the Fair Work Act extend to non-national system employees. The Fair Work Act thus provides greater coverage, and a more consistent protection than any system we have previously had.

The cornerstone to the Fair Work Act is the National Employment Standards. There are 10 legislated National Employment Standards that apply to all employees regardless of their employer’s size or circumstances. These standards are:

A maximum standard working week of 38 hours for full-time employees, plus ‘reasonable’ additional hours.
A right to request flexible working arrangements for employees who are carers; are the parent of, or care for a child, who is school aged or younger; have a disability; are 55 or older; or are experiencing, or caring for a family member experiencing, family violence.
Parental and adoption leave of twelve months (unpaid), with a right to request an additional twelve months.
Four weeks paid annual leave each year (pro rata for part time employees).
Ten days paid personal/carer’s leave each year (pro rata for part time employees), two days paid compassionate leave for each permissible occasion, and two days unpaid carer’s leave for each permissible occasion.
Community service leave for jury service or activities dealing with certain emergencies or natural disasters. This leave is unpaid except for jury service.
Long service leave.
Public holidays and the entitlement to be paid for ordinary hours on those days.
Notice of termination and redundancy pay.
The right for new employees to receive the Fair Work Information Statement.

Employers cannot contract out of these statutory instruments by ordinary common law employment contracts.

The National Employment Standards introduced the entitlement of up to 16 weeks’ redundancy pay. Redundancy pay was previously only available to employees covered by awards and enterprise agreements. Under the National Employment Standards, access to redundancy entitlements was extended to managerial and professional employees not covered by awards.

A number of other benefits have been introduced under the Fair Work Act. Unfair dismissal laws under the Fair Work Act restored the eligibility for those working for employers with 100 or fewer staff. The Fair Work Act’s pay equity provisions empowered the Fair Work Commission to make equal remuneration orders to ensure people performing equal work receive equal remuneration. In 2017, Fair Work Act amendments were introduced to provide greater protections and redress for vulnerable workers introducing significantly higher penalties for breaches of employee record keeping and “serious contraventions” of workplace laws, such as the use of sham contracting.

These have arguably been big wins for Australian workers under the Fair Work Act.

The Fair Work Act has made substantial changes to the landscape of the Australian workplace, with arguably wider and more consistent protection for employees than has ever been enjoyed before. Despite the growing noise from the unions that may have you thinking Australian workers are grossly unprotected, Australian workers have a significant safety net by way of the National Employment Standards, which are available to workers regardless of the employer’s size, or the worker’s salary. While there is always opportunity for improvement, the ACTU’s plan to “overhaul” the system significantly overstates the problem. Curiously, the unions are now pushing to change the “broken” workplace laws they helped write less than a decade ago.

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June 14

Refusal to Employ

Employers are required to walk a tight-rope every time they hire a new employee.

The Fair Work Provisions that prohibit discrimination against prospective employees are broad. However, in reality, these situations are almost impossible to enforce.

Discrimination is an essential aspect of the human condition. We ‘discriminate’ thousands of times a day. When we choose the foods we are going to eat, the people we spend our time with, and, at which exact moment to cross the road. Having the capacity and confidence to discriminate between our life options is what keeps us safe, and makes us successful humans.

When making employment decisions, however, including recruitment decisions, those characteristics that represent ‘lawful’ discrimination and ‘unlawful’ discrimination are not always easy to navigate. Requiring an employee to have ’30 years’ experience’ is not the same as requiring that person to be ‘over 45’, but there is an essential nexus between these two states that is hard to ignore in practical terms. On the other hand, there is nothing unlawful about choosing a candidate on the basis of lack of experience, on the grounds that they will potentially cost less, especially in the event that a Modern Award provides that someone below the age of 20 can be paid a lower minimum rate. Yet, refusing to hire someone because they are not ‘young’ is clearly unlawful.

Employers who actively advertise for ‘Junior’ or ‘Senior’ employees flirt dangerously with this subtle distinction.

The Fair Work Act provides broad protections against this type of unlawful decision, by prohibiting adverse action against prospective employees on unlawful discriminatory grounds. Under section 342, adverse action against a prospective employee includes ‘refusing to employ’ that employee, and under section 351 this adverse action cannot be taken for reasons that include “race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.”

The unlawful reason needs to be only one of the reasons, and once an allegation is made, the employer would bear the onus of ‘proving otherwise’.

Most of these protections are obvious ‘no brainers’. They protect us from discrimination on the grounds of the key personal characteristics that we all should know are plainly and obviously wrong. They are supported by concurrent state and commonwealth antidiscrimination legislation, which are based on international law. Section 351, however, goes a little bit further than the domestic and international antidiscrimination standard, and the full scope of the provision is not easy to pin down, especially when we look critically at some of the more ‘marginal’ characteristics. This is especially the case when the reverse onus is taken into account. For example, would it be unlawful for the ACTU to ‘refuse to employ’ a candidate because they discover, in a pre-interview social media screen, that the candidate ‘likes’ Cory Bernardi on Facebook – clearly a ‘political opinion’?

Is it ok for an interviewer to ask a candidate ‘What are your responsibilities outside of work? Are you able to take on overtime shifts at short notice?’ and then base part of the decision on this answer? Or could this be regarded in some circumstances as a refusal to employ based on ‘family or carer’s responsibilities’. Put more broadly, does it become unlawful to factor ‘availability’ into this decision. Clearly, this is a relevant employment consideration, yet also dangerously discriminatory in certain circumstances. Would an employer, seeking an employee with high level logical ability, discriminate against a prospective employee on the basis of what that employer considered to be an illogical religious belief expressed during an interview?

In many cases, disaggregating ‘lawful’ from ‘unlawful’ considerations is actually a lot more difficult than most of us are comfortable admitting to ourselves.

Perhaps my favourite example is my hypothetical law school grads, Bobby and Robbie. They are the final two candidates competing for a position in a traditional top tier firm. Their resumes, academic transcripts, and experience are virtually identical. Bobby was a high school rugby union star from Knox Grammar. Robbie was a high school rugby league star from St Gregory’s Campbelltown. The defining moment in Bobby’s successful interview with the Senior Partner was the conversation on the way out the door, when the Senior Partner asks Bobbie his thoughts on the Wallabies’ chances in the next world cup. As an employment litigator and rugby league fanatic, I would take some pleasure in cross examining the Senior Partner in the Federal Court, where he would be required by the Fair Work Act to discharge a positive onus to prove that ‘social origin’ was not a substantial and operative factor that actuated his decision to favour Bobby over Robbie.

But perhaps what is most appealing about this hypothetical (aside from the fact that it has brought the topic of rugby league to a conversation where it is not typically invited) is that it illustrates the key practical reality of this issue. This court case would never happen, because these decisions are made privately and confidentially, and many of these prejudices are buried deeply. The High Court have recently held that ‘unconsious’ decisions cannot offend the general protections provisions. It is not possible to positively prove something that you don’t consciously know. The sad truth is that the most deeply held biases are held on this level.

Pre-employment discrimination protections exist in a broad and comprehensive manner in Australia, but they are almost impossible to rely upon. Even with the reverse onus in play, these forms of discrimination are almost impossible to prove, even if you have a knowledge or reasonable suspicion that it has occurred.

The mind of the pre-employment discriminator is a closed book, and they have been playing this game for along time.

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January 24

Growing support for a workplace response to domestic violence

Violence against women is now recognised as a serious and widespread problem in Australia. Whilst awareness has increased of domestic violence as a community issue, there is still much to be done to support victims. 2017 saw an increase in support for a workplace response to family violence, through the inclusion of family and domestic violence leave in all modern awards, or the National Employment Standards. At a minimum, unpaid leave looks likely to be inserted into modern awards in 2018, meanwhile the unions, Greens and Labor Party continue to push for paid leave.

What is domestic violence leave and why is it needed?

Family and domestic violence leave provides victims of violence by a family member time off work to attend legal proceedings, counselling, and medical appointments, as well as relocating or making other safety arrangements. Paid family and domestic violence leave can ensure financial security and support victims escaping abusive relationships.

Some large private sector employees, such as Telstra, KPMG, Woolworths, IKEA, NAB, Westpac and PwC, currently provide paid family and domestic violence leave entitlements. In addition, most State governments have domestic violence protections for their public servants, some of which include paid leave. However, the majority of Australian employees are reliant on a modern award for their minimum entitlements, and the unions are pushing to standardise workplace support.

ACTU’s application for paid domestic violence leave

In July 2017, a bid by the Australian Council of Trade Unions (ACTU) to have 10 days paid leave available to Australia’s two million award dependent employees, was rejected by the Fair Work Commission.

The Commission acknowledged that domestic violence is a significant problem in society, in the workplace, and for the national economy. It noted the inability of existing workplace entitlements to meet the needs of employees who experience domestic violence as their need for leave is often urgent and they may not able to request annual leave or flexible work arrangements at short notice. However, the Commission was not satisfied that ten days paid domestic violence leave was necessary to meet the objectives of the modern award and concluded that a cautious approach should be taken to the introduction of domestic violence leave, citing concerns over increased employer’s costs and the lack of data or evidence regarding the operation of such leave.

However, the Commission formed the preliminary view that an unpaid leave entitlement should be included in modern awards to enable victims to deal with the consequences of the violence. The Commission is currently reviewing submissions on the drafting of such a provision, such as what quantum of unpaid leave is appropriate, who can access it, and notice and evidence requirements.

Introduction of the Greens bill

In late November 2017, The Greens released draft legislation to introduce 10 days’ paid family and domestic violence leave as a new entitlement in the National Employment Standards (NES). The Australian Labor Party had previously committed to five days paid leave in the NES, but in response to the Greens bill, in early December, they raised their commitment to ten days.

Resistance to the introduction of paid domestic violence leave

The Coalition and some employer representatives have resisted the extension of paid family violence leave to all employees in Australia, through inclusion in modern awards or the NES. Their primary concern is that paid domestic violence leave would impose a significant and undue expense on employers, with the Australian Chamber of Commerce and Industry (ACCI) claiming it could cost employers as much as $205m to create just one day of domestic violence leave per worker per year.

A common objection from employer groups is that domestic violence is a societal issue, not a problem that is created by employers, and as such, a government funded national system of domestic violence leave is required, in the same manner as paid parental leave. Other opponents of the proposal argue domestic violence leave is just another union shakedown, and any paid family violence leave provisions will be abused to justify non-necessary work absences, i.e. it will become the new “sickie”.

There is also a concern that the current proposals might drive a further divide between the entitlements of permanent and casual employees. The paid family violence leave provisions currently available in some enterprise agreements generally only cover employees in full time or part time employment, when casual employees facing violence do not even have access to paid annual or sick leave entitlements. The ACTU submits that 51% of award-covered women are employed as casuals, so it is essential that casuals are included in any amendments. Otherwise, paid family violence leave will only serve to further incentivise employers toward casualisation of the workforce.

There is also recent research which challenges the effectiveness of paid domestic leave policies, with the conversion from policy into practice falling short. A survey of HR professionals published by the Australian HR Institute in September 2017 concluded that Australian workplace domestic violence policies don’t translate into practice. Only 14% of respondents currently report any form of specific training for supervisors and managers to help victims disclose domestic violence, and only 18% have any form of manager training to recognise victims of domestic violence.

Arguments in response

Research by the Centre for Future Work at the Australia Institute suggests that the costs of paid domestic violence leave is unlikely to impose a noticeable increase in labour costs for employers, and any costs are likely to be largely offset by benefits such as reduced turnover and improved productivity. Only about 1.5% of female employees and around 0.3% of male employees are likely to utilise paid domestic leave provisions, costing $80m to $120m per year. The massive discrepancy in cost compared the ACCI’s modelling, derives from utilisation assumptions, with the ACCI’s figures based on 25% of female and 10% of male workers accessing the leave each year. The ACCI utilisation rate is far greater than what has been experienced by employers who already have paid domestic leave provisions in place.

Supporters of paid family violence leave argue that there would be two tests to ensure the system is not open to abuse, and would restrict the incidence of leave-taking to subset of those workers who actually experience domestic violence. Firstly, the leave must be related to specific activities or events related to the violence, to support employees in their efforts to escape the violence. It’s not intended as compensatory leave for victims. Secondly, documentary evidence must be provided regarding the nature and timing of those events if requested, such as a note issued by police, a doctor, or a lawyer, for example.

With regards to casuals, the unions bid for paid leave to be included in the modern awards, and the Greens’ bill regarding the NES, both provide for paid leave entitlements to be extended to casual employees. Under the ALP’s proposal, casual workers would be entitled to unpaid leave.
Conclusion

The argument that paid family and domestic violence leave is too expensive has been refuted by the research which considers the actual experience of several Australian employers who have already implemented paid leave policies. It shows that in practice, paid leave entitlements are not frequently utilised, and any incremental costs are offset by the broader economic benefits.

The complexity of family violence requires a strategic approach by all levels of government, business, and the community. Developing a workplace response to domestic violence also requires support measures besides paid leave, such as training for managers to help victims disclose domestic violence, referral of employees to appropriate domestic violence support services, flexible work arrangements; and no adverse action or discrimination of the victims of domestic violence. Unless workplaces take measures to promote disclosure, and managers are trained to support their employees, the stigma already involved in revealing domestic violence is unlikely to dissipate, and the purported benefits and costs of providing paid family and domestic violence leave are unlikely to be realised in any event.

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September 24

Flexibility at work. Are we throwing the baby out with the bathwater?

‘Flexibility’ has always been an aspect of workplace law, and a key obligation on employers. It is both essential to anti discrimination law, as well as a key element of ‘a fair go all round’ – a fundamental tenet of Australian workplace law for half a century.

The flexibility provisions in the National Employment Standards do little but to codify some of these obligations. We already knew about them. But I have recently sensed a change in the way that these provisions are regarded. Most notably, they are treated by many employers as if they apply only to parenthood, and specifically to a female parent’s rights to work less without penalty once they have children. This is a dangerous trend.

These provisions were intended as a way of allowing people to maintain their careers on top of other personal responsibilities without being discriminated against, or adversely treated. The provisions are gender neutral, and intended to apply to a wide range of personal characteristics or obligations outside of work. There are grave dangers in ‘flexibility’ being used as a weapon of workplace negotiation, and in the political discourse as synonymous with ‘womens’ parental rights’. When a provision is intended primarily to ameliorate discrimination against a certain group, it’s counter-productive to identify that group too prominently as the intended or only beneficiary. This will always work towards fueling the discrimination, and allowing it to find alternative routes. We end up throwing the baby out with the bathwater. Furthermore, other forms of discrimination against different groups are allowed to fly under the radar.

In my opinion, one of the major problems in the push towards equality and contemporary work life balance is that fact that many men are still not comfortable requesting ‘flexibility’ from work for family responsibilities. This is in spite of the gender neutrality of the current provision. There is still a significant stigma against ‘family men’ in the business community. This means that in the stereotypical heterosexual working family, it is still too often the woman that is required to ask for flexibility. This perpetuates the imbalance and the traditional roles. This project offers an interesting perspective on these issues.

We need to find a way to eliminate the sub-text, and regard “flexibility” as exactly that – “flexibility”. And to encourage the use of the statutory provisions in an inclusive manner. Flexibility doesn’t mean that an employee does less work, or is less committed to their job, it simply means that they are attempting balance work against other time sensitive aspects of their lives. ‘Work life Balance’ shouldn’t always mean working less. Sometimes, it means allowing employees to achieve more overall with their lives. As employers, there are ways of regarding the acceptance of flexibility as actually beneficial.

This article at Forbes.com suggests five perspectives. Firstly, giving employees flexibility is a way of respecting them as people, which will be returned by their own level of respect and ‘buy-in’. Secondly, providing flexibility broadens your talent pool. Sometimes, an employer making a slight ‘adjustment’ to their employment expectations can radically increase the amount of talent available for any given position. Thirdly, allowing people to manage their jobs in a way that fits in with their responsibilities increases morale at work. Fourthly, many modern employers regard flexibility as more than an employee entitlement, but a strategy which aids the development of an empathetic, energetic and progressive culture. Finally, the article suggests that employees with an active, well-rounded life can add value to an employer.

For these reasons, I believe we need start using ‘flexibility’ in a new way. It’s not a ‘woman’s’ entitlement to do less work for the same money. It’s a broader obligation, for all of us to frame our business relationships in a balanced, and sensible way for the benefit of everyone, and all aspects of society.

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March 2

Internships – are they legal?

When discussing Industrial relations, an issue that has often fallen through the cracks is that of internships. In many sought after and prestigious professions (including law – see my previous post on this here) it has become commonplace to expect prospective employees to give their time to employers without remuneration. Generally, other than in specific circumstances, this practice is unlawful.

While there is no question that a young person volunteering their time to further their knowledge and experience in a certain industry is a good idea, there is currently enormous scope for employers to unlawfully exploit high levels of competition at career entry levels. It would seem that the more lucrative and prestigious a certain career appears to graduates, the more this exploitation is possible. In a recent finding of the Federal Circuit Court a media company, Crocmedia Pty Ltd, were found liable for breaches of the Fair Work Act in failing to recognise that their “interns” were actually employees. Pecuniary penalties were imposed, in spite of the fact that the employer had already agreed to repay the employees their missing entitlements. High levels of competition between prospective employees often create a willingness among them to provide services or to ‘prove themselves’ for free. However the important fact that employers need to keep to remember is that the statutory entitlements provided by the Fair Work Act and the Modern Awards cannot be waived by employees, even those seemingly desperate for career advancement. For those employers for whom ‘internships’ are an essential part of their industry, the exceptions contained in Fair Work Act in respect of ‘Vocational Placements’ should be read carefully. The Fair Work Ombudsman has published the following guidelines on their webpage:

Generally, the longer the period of placement, the more likely the person is an employee…

Although the person may perform some productive activities during the placement, they are less likely to be considered an employee if there is no expectation or requirement of productivity in the workplace…

The main benefit of a genuine work experience placement or internship should flow to the person doing the placement. If a business is gaining a significant benefit as a result of engaging the person this may indicate an employment relationship has been formed…

Unpaid work experience placements and internships are less likely to involve employment if:

they are mainly for the benefit of the person
the periods of the placement are relatively short
the person is not required or expected to do productive work
there is no significant commercial gain or value for the business derived out of the work.

In summary, if the internships are short, primarily for the benefit of the person, and contain no expectation of productivity or commercial gain to the employer, then they are likely to be offered by anyone in industries that are highly competitive for jobs.

Ironically, a genuine internship is only likely to be offered by the genuinely altruistic employers, or those for those industries that are experiencing skills shortages, or struggle to recruit employee interest. Those careers genuinely perceived as lucrative or prestigious are firmly outside this category.

* Helen Carter is the Director and founding solicitor at PCC Lawyers, a team of employment practitioners based in Sydney, with many years of combined knowledge and experience in workplace law, industrial relations, workplace investigations and training. They provide a high standard of excellence and an exceptional level of personal service to a variety of clients in the Sydney metropolitan area, Central Coast, regional NSW and interstate.

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