2019 saw many legislative and jurisprudential developments in employment law which should be top of mind for employers moving forward in 2020.  In this article, we summarise the main issues to watch in 2020.

The underpayment crisis – “wage theft”

The recent spate of very public self-reported wage underpayments by businesses has resulted in increased scrutiny into “wage theft”.  The Fair Work Ombudsman (FWO), for example, has prioritised issues of wage underpayment and non-compliance with awards and the National Employment Standards (NES).  The FWO will also take a stronger approach to enforcement in relation to non-compliance, even against businesses that self-report underpayments and non-compliance.

The Federal Government has announced that new legislation is currently being drafted which aims to introduce a new offence and penalty regime, with potential criminal sanctions for the most serious forms of conduct.  On 12 November 2019, the Senate also approved a wide-ranging inquiry into wage and superannuation “theft” by employers.  The report, due in June 2020, is also likely to make recommendations for reform.

In light of increasing scrutiny on often inadvertent instances of serious underpayment with serious reputational and penalty risks, our team can help you navigate and ensure compliance with your legal obligations.

Whistleblower laws

New whistleblowing laws came into effect on 1 July 2019 covering the corporate, financial and tax sectors across Australia.  The laws amended the Taxation Administration Act 1953 (Cth), enabling disclosures relating to misconduct and improper conduct regarding tax affairs and apply broadly to all kinds of legal persons.  Changes to the Corporations Act 2001 (Cth) consolidate and expand the whistleblower protection regime and affect the majority of businesses.  For more information on the changes that came into effect from 1 July 2019, see our earlier post on the new whistleblowing obligations.

The new laws require companies to have compliant whistleblowing policies by 1 January 2020.  Public companies and large proprietary companies are now expected to have a compliant policy.

Employers should review their current whistleblower arrangements and/or implement new policies to ensure they comply with the new laws. Failure to have a compliant policy is a criminal offence, with a maximum penalty of $126,000.

Annualised salary clauses

The Fair Work Commission introduced new model annualised salary clauses for a number of modern awards which take effect from 1 March 2020.  A broad range of industries will be affected by the changes including mining, banking, hospitality and legal services.

The key obligations facing employers include: annual reconciliation to compare the amount payable under an award and the amount actually paid through the annualised salary, record-keeping of start/finish times and unpaid meal breaks, and the specification of the method of calculating the annualised wage and the “outer limit” on hours (over which overtime or penalty rates apply).

Employers paying annual salaries to employees under affected awards need to ensure they comply with these new conditions. Failure to comply will risk fines of up to $63,000. For a detailed examination of these obligations, see our earlier blog post on annualised salary clauses.

Religious Discrimination Bill

The introduction of the Religious Discrimination Bill 2019 (the Bill) formed part of the campaign platform of the re-elected Morrison Government in 2019 and its potential enactment in 2020 presents major implications in employment law nationally. A second revised draft was released for public consultation in December 2019.

If enacted, the Bill will make it unlawful for employers and employment agencies to discriminate against a person in employment on the basis of their religious beliefs or activities. Following the scheme of existing anti-discrimination laws, discrimination could be both direct and indirect.  An employer will engage in indirect discrimination if they impose or propose to impose unreasonable conditions, requirements or practices which have the effect of disadvantaging persons holding religious belief or who engage in religious activities.  Employers will also be prevented from imposing conditions or requirements relating to standards of dress, appearance of behaviour of employees that restrict an employee making a statement of belief in their personal capacity unless it would result in unjustifiable financial hardship, or is an essential requirement of the profession, trade or occupation. This latter provision was apparently introduced in response to the much-publicised case of Israel Folau, who settled discrimination proceedings against Rugby Australia for an undisclosed amount in December 2019.

Public consultation on the revised draft of the Bill will continue until 31 January 2020. It is not yet known when the Bill will be introduced to Parliament.

Calculation of personal/carer’s leave

In a significant decision last year, the Full Federal Court confirmed that shiftworkers are entitled to 10 days of personal/carer’s leave, to be taken and accrued by reference to the employee’s “working day” rather than based on a “notional” number of average hours. For an in-depth look at the case, see our earlier blog post on the Full Federal Court decision.

However, uncertainty remains in the calculation of personal/carer’s leave. The High Court of Australia recently granted special leave to appeal the Full Federal Court decision, which will ultimately have major implications for employers, particularly those engaging shiftworkers, due to the potential for significant back pay claims. The appeal will likely be heard in the first half of this year. Until then, employers should ensure their payroll systems accrue and account for leave as a daily, rather than hourly, entitlement.

Casual entitlements: Workpac

The decision of Workpac Pty Ltd v Skene [2018] FCAFC 131 (Skene) found that an employee engaged as a “casual” under his contract was in substance, a permanent, full-time employee, on the basis of his relatively certain and inflexible working arrangements.  The employee was entitled to annual leave under the NES and the enterprise agreement.  Skene has significant implications, with employers at risk of substantial back pay claims and changes to methods of engaging casual employees.

Two class actions against Workpac have now been filed on behalf of mineworkers as a direct result of Skene.  However, both have been placed on hold pending the decision in Workpac Pty Ltd v Rossato (Rossato) which will further clarify what constitutes casual employment and whether casual loading payments set off any leave entitlements.  Judgment has been reserved on Rossato and a decision will likely be handed down later this year.

Employers should keep an eye out for the decision in Rossato and any legislative changes made in response to Skene.

Potential changes to enterprise bargaining

In November 2019, the Federal Government indicated to the Senate that reforms to the enterprise bargaining process and national award system to remove “administrative clutter” may be in the pipeline.  The Federal Government suggested it will issue a discussion paper on the operation of the enterprise bargaining system in 2020, with a focus on simplifying the making and approval of enterprise agreements.

Key takeaways

  • Whistleblower laws: A new whistleblower regime has been in place since 1 July 2019. From 1 January 2020, public companies and large proprietary companies must also have a compliant whistleblower policy.
  • Annualised salary clauses: From 1 March 2020, model annualised salary clauses take effect for a number of modern awards. Relevant employers need to ensure they comply with the new obligations.
  • Wage theft and compliance: The FWO is prioritising these issues and has indicated a stronger stance towards enforcement of compliance.  Legislative changes to penalty regimes for breaches of the FW Act are currently being drafted.
  • Religious Discrimination Bill: A revised draft has recently been released and further public consultation is planned, after which, the Bill is likely to be introduced into Parliament.
  • Calculation of personal/carer’s leave: Uncertainty will remain until the High Court hands down its judgment in the case referred to above.  Employers should reduce risk by ensuring payroll systems accrue and account for leave as a daily, rather than hourly, entitlement.
  • Casual entitlements: Employers should keep abreast of developments relating to the Skene decision, including Rossato, the pending class actions and any future legislative changes.
  • Changes to enterprise bargaining: No concrete reforms have been laid out, but a discussion paper will likely be issued this year.

Special thanks to our Summer Clerk, Christy Lee, for her assistance in preparing this article.

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