Enforcement of new sexual harassment obligations and pay equity developments

Following the implementation of the recommendations in the Respect@Work: Sexual Harassment National Inquiry Report (2020) to amend work health and safety (WHS) obligations, WHS regulators are now using their enforcement powers to ensure employers are complying with their positive duty to take reasonably practicable steps to eliminate or minimise health and safety risks, including unlawful sex discrimination (refer to our previous newsletter on the new positive duty under anti-discrimination laws).

Fortescue Metals

On 9 February 2023, WorkSafe WA filed 34 charges against Fortescue Metals Group for failing to produce documents in response to requests by WorkSafe WA. Those document requests related to 34 allegations of sexual harassment at Fortescue’s Western Australian mining sites.

Sexual harassment records

WHS legislation requires employers (and other persons conducting a business or undertaking PCBUs) to respond to regulator requests to produce documents unless they have a reasonable excuse. WHS regulators have broad powers to require employers to provide information within their knowledge or produce documents, if the regulator has reasonable grounds to believe the employer has information or documents in relation to a possible WHS contravention or to assist with monitoring or enforcing WHS compliance. Employers are required to comply within the time specified in the regulator’s notice. Employers must not refuse or fail to comply with the regulator’s requirement without reasonable excuse.

When considering regulator requests involving sexual harassment allegations, employers need to consider what information is required to be produced by law to the regulator, and then assess any issues with production arising under the whistleblowing and privacy legislation. If there are privacy concerns, one option could be to liaise with the regulator about redaction of individuals’ names and details, although this will depend on whether any whistleblowing protections apply and the redactions are sufficient to ensure compliance with confidentiality requirements under those whistleblowing requirements. The application of whistleblower laws under Part 9 of the Corporations Act should be considered at the point a sexual harassment allegation is made, including those made under any employer whistleblowing policy, particularly if it involves more than one person being subjected to the type of conduct alleged, in order to design and implement an appropriate investigation.

Another common issue with sexual harassment allegations is the effect of any deed of release entered into by the employer with either the alleged harasser or complainant. Any confidentiality requirement under a deed of release will not be effective to prevent compliance with the regulator’s request. The Respect@Work Council has also recently issued guidelines recommending that confidentiality clauses should not be standard terms in workplace sexual harassment settlement agreements. These clauses should be considered on a case by case basis, and organisations should consider transparency so that they can take steps to address and prevent sexual harassment.

Gender pay equity developments

An important gender equity development was the recent introduction of the Workplace Gender Equality Amendment (Closing the Gender Pay Gap) Bill 2023 (Bill) into Federal Parliament. This Bill is part of the Labor Government’s election commitment to help close the gender pay gap at work, which is currently at an estimated average of 14.1 per cent across Australia. If passed, this Bill will require employers with over 100 employees to report their gender pay gaps to the Workplace Gender Equality Agency (WGEA), who will publish this aggregate information for each employer on its website. The Bill imposes an obligation on CEOs to provide to the organisation’s governing body (for example a Board) a report by the WGEA regarding how their organisation performs on gender pay equality, relative to their relevant industry. The Bill also clarifies the requirement for employers to report on sexual harassment to WGEA.

The Bill has been referred by the Senate for an inquiry. If the Bill is passed, the reporting requirements are set to commence in 2024. These changes align with the changes to the Fair Work Act 2009 to prohibit pay secrecy clauses in employment contracts which came into effect in December 2022.

Implications for employers

Employers are already seeing an increase in requests for sexual harassment records by WHS regulators.

Employers can expect to see regulator requests increase when the Australian Human Rights Commissions powers to inquire into employer’s compliance with their positive duty to eliminate unlawful sex discrimination come into effect on 12 December 2023. In preparation for this, employers should ensure they are compiling the necessary records so they can quickly respond to such requests. Employers also need to ensure that they will be able to demonstrate compliance with their positive duty to take reasonable and proportionate measures to eliminate unlawful sex discrimination. Employers should also be reviewing their template employment contracts to make it clear that employees may disclose any information about their remuneration or terms and conditions that determine their remuneration such as their hours of work.