Update: Fair Work legislation amendments - measures to deal with and eliminate sex discrimination and sexual harassment

This is an update of the article first published on 18 November 2022. The amending legislation, the Fair Work Legislation (Secure Jobs Better Pay) Act 2022 received Royal Assent and became law on 6 December 2022.

The provisions summarised below about the prohibition against sexual harassment in connection with work will commence on 6 March 2023.

The amendments to the Sex Discrimination Act 1984 introducing the positive duty on all employers and persons conducting a business or undertaking to take “reasonable and proportionate measures” to eliminate unlawful sex discrimination, including sexual harassment, as far as possible, commenced on 13 December 2022.

Provisions that relate to compliance with the positive duty, including the ability of the Australian Human Rights Commission to conduct inquiries into compliance with the positive duty, the giving of compliance notices, the enforcement of compliance notices and entering into enforceable undertakings, will commence on 13 December 2023.

There were no material changes to the provisions in the Bills (summarised below) and the final form of the legislation.  

One of the headline changes to workplace laws introduced by the Commonwealth government in the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Act), and the subject of our fourth article in the series, are the amendments to the Fair Work Act 2009 (FW Act) that expressly prohibit sexual harassment in connection with work. The new provisions will enable harassed workers, unions and the Fair Work Ombudsman (FWO) to obtain compensation, financial penalties and other orders against perpetrators of sexual harassment and businesses who do not take reasonable steps to guard against the risk of sexual harassment.

Complementing these amendments is the introduction of a positive duty on all employers and persons conducting a business or undertaking to take reasonable and proportionate measures to eliminate, as far as possible, unlawful sex discrimination, including sexual harassment.  More on this below.

Why include these provisions in the Fair Work Act?

The new provisions implement recommendation 28 of the Respect@Work Report that recommended that, “the Fair Work system be reviewed to ensure and clarify that sexual harassment, using the definition in the Sex Discrimination Act, is expressly prohibited”.

The new provisions are intended to complement and not replace the existing prohibition on sexual harassment in the Sex Discrimination Act 1984 (SD Act) or similar state or territory legislation. They do this by providing another option for persons who allege that they have been sexually harassed in connection with work to take action to address that harassment. Workers will have the choice to take action under the new provisions in the FW Act, or under existing provisions in the SD Act or state and territory legislation. It also gives unions the right to pursue such a claim on behalf of this person or the FWO to take action if there has been a breach.

The rationale for including these provisions in the FW Act is one of the key findings in the Report that the, “… current regulatory framework fails to incentivise employers to create harassment-free workplaces. Instead, our laws place the burden of addressing harassment almost entirely on the individual.”[1]

Many individuals who have been sexually harassed are often discouraged from taking action to address the conduct because of this burden. These provisions are designed to alleviate the burden on individuals having to address sexual harassment in the workplace by enabling other parties to represent the person making the allegations or to otherwise take action.

The new provisions in the FW Act will apply to sexual harassment that occurs on or after the commencement of the new provisions (6 March 2023).

The new provisions will not apply to sexual harassment of a worker if the sexual harassment occurred before the commencement date or is part of a course of conduct that began before the commencement of the new provisions, even if that conduct continues after commencement of the new provisions. In either of these situations, the worker would need to pursue a claim under existing laws, including the stop sexual harassment order provisions in the FW Act that applied before the new provisions take effect.

Express prohibition of sexual harassment in the workplace

The new provisions make it unlawful for a person (the first person) to:

• sexually harass another person (the second person) who is a worker
• or a person who is seeking to become a worker, in a business or undertaking
• or is a person conducting a business or undertaking.

The prohibition applies if the harassment occurs in connection with the second person being a worker or seeking to become a worker in a particular business or undertaking, or is a person conducting the business.

Some of the critical elements to note regarding this prohibition are that:

• The definition of “worker” and “worker in a business or undertaking” are broad and have the same meaning as these terms in the WHS Act. Generally, this captures all workers (whether contractor, employee or volunteer) and all businesses or undertakings (formal or informal) whether operated by a company, an individual or any other entity.  It does not include volunteer associations or a single individual engaged to perform work in a business or undertaking.
• The prohibition also extends to third parties, such as customers or clients of the business or undertaking, who may engage in the conduct. This may prompt businesses to consider introducing programs to highlight for customers the prohibition and the conduct that is expected.
• The definition of “sexually harass” is the same as the definition in the SD Act for these new provisions. Specifically, if:
• the person makes an unwelcome sexual advance, or an unwelcome request for sexual favours, to the person harassed, or
• engages in other unwelcome conduct of a sexual nature in relation to the person harassed

in circumstances in which a reasonable person, having regard to all the circumstances, would have anticipated the possibility that the person harassed would be offended, humiliated or intimidated. The circumstances to be considered in assessing whether conduct is sexual harassment are expansive.

• An employer or principal of the business or undertaking is vicariously liable for the conduct of their employees or agents who breach the prohibition on sexual harassment unless they can show they took reasonable steps to prevent the prohibited sexual harassment. This is similar to the SD Act.

Commencing an application and stop sexual harassment orders

The framework for the initiation of an application to deal with a dispute about sexual harassment at work is modelled on the current provisions in the FW Act about general protections dismissal disputes.

Applications relating to sexual harassment[2] must commence with an application to the FWC to deal with a sexual harassment dispute. This can be made by the person (or persons) making the allegation or by a union that is entitled to represent the industrial interests of that person (or persons).

The application can ask the FWC to do either or both of the following to deal with the allegations:

• make a stop sexual harassment order, and / or
• otherwise deal with the dispute (by mediation or conciliation).

The stop sexual harassment order is intended to prevent any future sexual harassment and is a very broad type of order.[3] The FWC is empowered to make any such order it considers appropriate (other than for payment of any money) to prevent the person making the allegations from being sexually harassed in connection with work. Before it makes a stop sexual harassment order, the FWC must be satisfied that the person making the allegations has been sexually harassed, and that there is a risk that the sexual harassment will continue.

Types of stop sexual harassment orders could include orders requiring:

• the respondent or respondents to stop the specified behaviour
• compliance with, or development of, a sexual harassment policy, and
• the provision of information and additional support and training to workers in relation to sexual harassment.

A respondent against whom a stop sexual harassment order applies must not contravene a term of that order. Non-compliance may result in a civil penalty being imposed.

The FWC will have the discretion to dismiss an application that is made more than 24 months after the alleged sexual harassment, although we expect that the FWC may be reluctant to dismiss sexual harassment claims based on the passage of time alone. This discretion will be in addition to the FWC’s general power to dismiss an application that is frivolous or vexatious or has no reasonable prospects of success.

Dealing with sexual harassment disputes in other ways

The FWC may also deal with the dispute by mediation, conciliation or by making a recommendation or expressing an opinion about the dispute. At this stage of the process, the FWC may not deal with the dispute by arbitration. Any conference must be held in private.

If the FWC forms the view that all reasonable attempts to resolve the dispute (other than by arbitration) have been, or are likely to be unsuccessful, it must issue a certificate to that effect. The FWC may also, at this time, express a view on whether arbitration or a court application would not have a reasonable prospect of success. Historically, the FWC has been reluctant to express a view under existing, similar powers in the FW Act.

Once a certificate is issued, the person making the allegations, or the union acting on their behalf, can:

• jointly agree with at least one of the respondents to the application that the FWC will arbitrate the dispute between the parties who agree to the arbitration
• proceed to court, or
• elect to not proceed any further with the dispute.

Dealing with a sexual harassment dispute by arbitration

Two or more of the parties may agree to have the sexual harassment dispute arbitrated by the FWC.

One of the parties must be the person who made the initial application, and the other may be one of the respondents (i.e. the employer or principal, or any individual who may be named as a respondent).

The notification to arbitrate must be made within 60 days after the certificate is issued by the FWC. This is a generous time period compared to the 14 day period for the notice to arbitrate a general protections dispute.

Time will tell, but we anticipate that very few sexual harassment disputes will be arbitrated given the historically low arbitration level for general protections disputes.

A respondent must not contravene a term of an order made against them. Non-compliance exposes the respondent in breach to the risk of a civil penalty being imposed.

Taking a sexual harassment dispute to court

The more likely course of action by an applicant when a certificate is issued by the FWC is that the applicant will commence a sexual harassment court application. Court proceedings rather than consent arbitration has been almost universally preferred in general protections claims and this trend is likely to continue for sexual harassment claims as well.

An applicant can make a sexual harassment court application when:

• attempts by the FWC to conciliate or mediate a dispute have been unsuccessful and a certificate has been issued, or
• where the applicant is seeking an injunction as part of the sexual harassment claim.

The court application can either be made in the Federal Court or the Federal Circuit and Family Court of Australia (Division 2) in one of the following time frames:

• within 60 days of of the day the certificate is issued
• within 14 days of being removed as a party from a dispute, or
• a longer period permitted by the court.

The court application may be initiated by the person making the allegations, by their union or by the FWO. Orders that may be made by a court include an order for payment of compensation or any other order the court considers appropriate. As with all FW Act matters (i.e. general protections claims), an order for costs can only be made in limited circumstances (i.e. the court application has been issued vexatiously or without reasonable cause, or the court is satisfied that a party’s unreasonable act or omission caused the other party to incur the costs).

Positive duty to prevent sexual harassment

Complimenting the proposed new provisions in the FW Act that expressly prohibit sexual harassment in the workplace are the provisions in the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Act 2022 (Respect at Work Act) that introduce a positive duty on all employers and persons conducting a business or undertaking (PCBU) to take “reasonable and proportionate measures” to eliminate unlawful sex discrimination, including sexual harassment, as far as possible.

The new provisions are to be inserted in the SD Act.

The Respect@Work Report observed that the current legal framework is not effectively preventing sexual harassment because it is focussed on addressing and responding to conduct that has already occurred.

The proposed amendments are intended to shift this focus by requiring employers and PCBUs to proactively prevent discrimination and harassment in their workplaces in order to achieve compliance with the SD Act.

An issue with the current legal framework for dealing with sex discrimination and sexual harassment is that the focus is on remedying conduct that has occurred rather than focussing on seeking to prevent or eliminate that conduct. The onus in this situation falls on the individual who has experienced this discrimination and harassment to take action to address the behaviour.

Most employers and PCBUs will already have in place a number of measures that are required to enable them to comply with the positive duty. The amendments, once they become law, will provide these employers and PCBUs with an opportunity to review, and if necessary, update the measures they have in place to address sex discrimination and sexual harassment.

What is required under the positive duty?

The Respect at Work Act provides that an employer or the PCBU must take reasonable and proportionate measures to eliminate, as far as possible, specified forms of unlawful sex discrimination, including:

• sex discrimination
• sexual and sex-based harassment
• hostile work environments, and
• victimisation.

This will require measures to be taken to prevent the conduct being engaged in by duty holders, employees, workers, agents and third parties. Measures may involve, where appropriate:

• policies and procedures
• regular training and education
• monitoring employees’ use of email and computer systems, and
• providing appropriate support.

The meaning of “reasonable and proportionate measures” will vary between duty holders in accordance with their particular circumstances. Factors that may be considered include the:

• size, nature and circumstances of the business
• duty holder’s resources, financial or otherwise, and
• practicality and costs associated with the steps.

The positive duty will align with the vicarious liability provisions in the SD Act under which an employer may be found liable for the unlawful acts done by their employees or agents.

Under the relevant provisions, an employer is not liable for the unlawful conduct of their employees or agents if they have taken “all reasonable steps” to prevent their employees from engaging in conduct.

Most prudent employers have already taken reasonable steps to make it clear that sex discrimination and sexual harassment are unacceptable in the workplace and adopt a number of practical measures to reinforce this. Employers already have existing positive duties under OHS/WHS laws to eliminate or minimise, so far as is reasonably practicable, risks to health and safety, which include risks of sexual harassment, victimisation and other risk causing sex discrimination. This new positive duty is intended to operate concurrently with existing duties in OHS/WHS laws. The positive duty is not intended to limit, or otherwise affect, the duty that employers and PCBUs have under existing OHS/WHS laws.

Enforcement of positive duty

The Australian Human Rights Commission (AHRC) will be empowered to monitor and assess compliance with the positive duty. When necessary, these powers will include options to:

• conduct inquiries into a person’s compliance with the positive duty and provide recommendations to achieve compliance
• give a compliance notice specifying the action that a person must take, or refrain from taking, to address their non-compliance
• apply to the federal courts for an order to direct compliance with the compliance notice, and
• enter into enforceable undertakings.

The AHRC will be able to initiate an inquiry into a person’s compliance with the positive duty if it “reasonably suspects” that a person is not complying.

The AHRC has been given significant funds to enforce compliance with the positive duty. In the October Budget, additional funding of $10.5 million will be allocated to the AHRC to implement the Respect@Work recommendations including:

• $5.8 million to educate employers about the positive duty to prevent workplace sexual harassment and assess their compliance once it is introduced
• $2.6 million to facilitate a disclosure process for historical incidents of sexual harassment to support victim-survivors and identify improvements to systems and processes
• $2.1 million to ensure the AHRC is the central point of contact for information on workplace rights and responsibilities and provides a coordinated referral service.

The delayed commencement of the AHRC’s functions to monitor and assess compliance with the positive duty (12 months) should give employers and PCBUs sufficient time to understand their obligations and implement changes, if necessary.

[1] Respect@Work: National Inquiry into Sexual Harassment in Australian Workplaces, page 451.

[2] … and which are not seeking an interim injunction from a court

[3]     The new provisions are modelled on the stop bullying order provisions in the FW Act, and to avoid duplication, merge the existing stop sexual harassment order provisions into the new Part.