Australia: Is it time for employers to change their approach? Respect@Work - the Australian Human Rights Commission’s (AHRC) workplace sexual harassment report

On 5 March 2020, the Australian Human Rights Commission (the Commission) released its long-awaited report on sexual harassment in Australian workplaces, “Respect@Work”. The report is the culmination of an 18-month inquiry, led by Sex Discrimination Commissioner Kate Jenkins. It is comprehensive and data-driven, and concludes (amongst other things) that the current legal framework is, in the Commissioner’s words, “simply no longer fit for purpose.”

What is abundantly clear from the report is the pervasiveness of sexual harassment in Australian workplaces, and the grave impact it has on victims. The Commission identifies gender inequality as the underlying condition for sexual harassment, and that sexual harassment occurs in all industries, but is most prevalent in industries which are male-dominated (for example, construction and mining industries), hierarchical (for example, the police, medical and legal professions) and those industries where workers are exposed to a high degree of contact with third parties (such as the retail, hospitality and health care sectors). The 2018 National Survey revealed that the industries with the highest rate of sexual harassment were the information, media and telecommunications, and the arts and recreation industries.

The report makes 55 recommendations. Some of these are aimed at the existing legal and regulatory framework; others are more holistic, directed at creating change outside the workplace, implementing research initiatives, and education and training for key players, including boards and industry regulators.

Of central focus in the report is the need for a paradigm shift in the way businesses approach workplace sexual harassment. The report criticises the reactionary nature of the existing legal regime, which, the Commissioner observes, places the burden on individuals to make sexual harassment complaints and discharges employers of vicarious liability provided they can show they have taken “reasonable steps” to prevent the harassment. A key theme which stands out from the report’s recommendations is the Commission’s desire to shift responsibility back onto employers to prevent the harassment in the first place. This aligns more with the current approach to the regulation of workplace health and safety (WHS) – a concept already familiar to most employers.

Key recommendations for employers

So, what are the most significant recommendations for employers? The recommendations are just that at the moment – “recommendations” – and time will tell which of these recommendations are actually adopted and funded by the Government. However, given that the current Government commissioned this report, and taking into account the wave of societal expectations following the #MeToo movement, employers should anticipate that there will be changes to the current legal landscape.

From an employer’s perspective, the key recommendations to be aware of include:

1. Changes to the Sex Discrimination Act 1984 (Cth) (SDA) and the Commission’s powers

The report recommends the following key changes to this regime:

• Positive duty (Recommendation 17): the introduction of a positive duty on employers to take ‘reasonable and proportionate’ measures to eliminate sex discrimination, sexual harassment and victimisation as far as possible, with the Commission to assess compliance and be given enforcement powers. The proposed enforcement powers include the power to issue compliance notices, enter into agreements and enforceable undertakings with employers, and to apply to a court for an order against an employer in the event of non-compliance. Interestingly, unlike the similar WHS duty to provide a safe workplace, the report does not recommend financial penalties for breaches of this duty.
• Aiding and abetting unlawful acts (Recommendation 20): amendment to section 105 of the SDA (aiding or permitting an unlawful act) to ensure that it applies to sexual harassment.
• Time limit for claims (Recommendation 22): amendment to the Australian Human Rights Commission Act 1986 (AHRC Act) so that the President’s discretion to terminate a complaint under the SDA on the grounds of time is extended from 6 months to 24 months since the alleged unlawful discrimination took place. Unquestionably, this reform would significantly increase the likely workload of the Commission.
• Representative claims (Recommendation 23): amendment to the AHRC Act to permit representative claims in court for breaches of the AHRC Act. Such claims are already permitted at the Commission’s conciliation stage, but this amendment would enable unions and other representative bodies to escalate such claims to the courts.
• Costs (Recommendation 25): amendment to the AHRC Act to insert a cost protection provision (equivalent to section 570 of the Fair Work Act) which ensures that costs may only be ordered against a party if the court is satisfied that the party instituted the proceedings vexatiously or without reasonable cause, or if the court is satisfied that a party’s unreasonable act or omission caused the other party to incur costs.
• Consistency of sexual harassment laws (Recommendation 26): amendment to existing state and territory anti-discrimination and human rights legislation to achieve consistency with the SDA, without limiting or reducing existing protections.

2. Changes to the Fair Work system

In addition to the AHRC regime, the report examines the Fair Work system (that is, the Fair Work Act 2009 (Cth) and Fair Work Act Regulations 2009 (Cth)). The report contends that whilst sexual harassment matters can already be raised indirectly under the Fair Work system, improvements should be made to strengthen the system’s ability to deal with sexual harassment matters. These recommended changes include:

• Sexual harassment prohibition (Recommendation 28): that the Fair Work system be reviewed to clarify that sexual harassment, using the definition in the SDA, is expressly prohibited under the general protections provisions of the Fair Work Act.
• Stop sexual harassment order (Recommendation 29): the introduction of a ‘stop sexual harassment order’, equivalent to the ‘stop bullying order’, into the Fair Work Act. Like a ‘stop bullying order’, a ‘stop sexual harassment order’ would only be available to a worker in an ongoing working relationship. The application would need to be dealt with by the Fair Work Commission within 14 days and non-compliance with a ‘stop sexual harassment order’ could result in a civil penalty.
• Unfair dismissal regime (Recommendations 30 and 31): amendment to the Fair Work Act to clarify that sexual harassment amounts to a valid reason for dismissal, and amendment to the definition of serious misconduct in the Regulations to include expressly include sexual harassment.

Notably, the report does not recommend any direct changes to the general protections regime, albeit it notes that obtaining a ‘stop sexual harassment order’ would be a workplace right and would provide the foundation to an adverse action claim.

3. Non-disclosure agreements (NDAs)

Interestingly, the report adopts a relatively benign approach to the global hot topic of using NDAs in a sexual harassment context. Unlike the UK House of Commons’ recent report on the same topic and in contrast to the steps already taken in California and New York to restrict the use of NDAs, the Australian report acknowledges the benefit of non-disclosure agreements in encouraging settlements, rather than costly and protracted litigation. In lieu of proposing legislative change, the report recommends the development of a practice note which captures best practice principles for the use of NDAs. Interestingly, Recommendation 38 suggests the practice note may ultimately be used to “inform the development of regulation on NDAs,” so further change may be coming.

Overview of the evidence

The inquiry involved the survey of more than 10,000 individuals, 60 public consultations (with more than 600 individual participants) and 460 written submissions. In a manner akin to the Government’s bullying report from 2012, the report tells the personal stories of individuals who have experienced workplace sexual harassment. Devastatingly, the Commission reports that for several victims the harassment “began in verbal exchanges and ended in rape or sexual assault,“ and decries the “financial, social, emotional, physical and psychological harm” which is caused. The report also comments on the financial consequences of sexual harassment, referring to a commissioned Deloitte study which estimated the cost to the Australian economy of sexual harassment to be $3.5 billion annually, including approximately $2.6 billion in lost productivity. The overwhelming message from the report is that progress to date has been “disappointingly slow” and the existing system is stifling meaningful change.

What happens next?

A joint statement from the Senator for Women, Marise Payne, and Attorney-General, Christian Porter, confirmed that the Federal Government will now take time to consider the report, whilst recognising that the “states and territories, and the private sector, also have a key role to play.” Indeed, the report expressly recommends that the Federal Government works with the state and territory governments to provide joint-funded to implement the recommendations.

Whether (and to what extent) the Federal, state and territory governments will be prepared to fund the recommendations remains to be seen. For now, however, given the key theme of the report, it would be wise for employers to re-examine their existing framework for dealing with workplace sexual harassment and consider how this would fare if tested against the proposed positive duty.

A full copy of the report can be accessed here.

This article was written by Anthony Wood, Partner and Lucy Boyd, Senior Associate.

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