SMEs on notice as new Victorian equal opportunity laws kick in

Businesses have been warned that sweeping equal opportunity laws have set a new standard, requiring companies to monitor their discrimination policies more aggressively rather than respond to ad hoc claims.

From this week, businesses operating in Victoria will need to be more proactive in eliminating discrimination in their workplace.

Positive duty, unique to the Victorian legislation and a first for opportunity laws in Australia, means that employers will need to proactively and regularly assess their organisation’s compliance with the legislation and institute measures to ensure ongoing compliance and improvement, the law firm Freehills says.

Andrew Douglas, Macpherson + Kelly principal, says the new “positive duty” obligation on employers is the highest level of liability across Australia.

“These are significantly stronger laws on business which will require significant change in business behaviour,” Douglas says.

And Alexandra Marriott, manager of workplace relations policy at Victorian Employers’ Chamber of Commerce and Industry, says the employer body is advising business that the compliance task, especially for small- and medium-sized enterprises, will be more complex and require more active strategies, as well as higher costs in many cases.

“It applies to all workplaces irrespective of size of business and number of employees,” Marriott says. Unlike the Federal Government’s Fair Work laws, small business is not excluded.

Luke Gattuso, special counsel in the workplace relations team at Allens Arthur Robinson, says the changes are “significant in many ways” and if businesses aren’t already taking them into account yet, they’ll need to do so soon.

Gattuso says the legislation delivers further obligations on businesses and employers, and fewer obstacles for people to bring complaints because they can go straight to Victorian Civil and Administrative Tribunal (VCAT) rather than the Victorian Equal Opportunity and Human Rights Commission (VEOHRC).

What’s changing?

The equal opportunity laws, passed last year by the former Labor Government to come into operation this month, were designed to “encourage the identification and elimination of discrimination, sexual harassment and victimisation and their causes, and to promote and facilitate the progressive realisation of equality.”

The Liberal Government’s amendments dilute the strengthened powers of the VEOHRC, and absolve religious groups from key elements. An independent chairperson of the Board of Commission is also established.

The amended legislation:

• Removes the ability of the Commission to conduct public inquiries but permits it to conduct an investigation into a matter if it raises an issue that is serious in nature, relates to a class or group of persons and cannot reasonably be expected to be resolved by dispute resolution.
• Removes the ability of the Commission to enter into enforceable undertakings and to issue compliance notices.
• Allows the Victorian Electoral Commission to discriminate on the basis of political belief or activity in relation to employment.
• Permits employers to pay youth wages for those under 21 years of age.
• Allows schools to take into account the views of the school community in setting standards of dress, appearance and behaviour.
• Allows a religious body to discriminate in employment on the grounds of religious belief or activity, sex, sexual orientation, lawful sexual activity, marital status, parental status and gender identity if the action conforms with the religion’s doctrines, beliefs or principles or is reasonably necessary to avoid injuring the religious sensitivities of the religion’s adherents.
• Permits a person to refuse to provide accommodation to a child or a person with a child if the premises are unsuitable or inappropriate for occupation by a child because of their design or location.
• Allows single-sex competitions in competitive sporting activities if such competitions are necessary to allow participants to progress to an elite level.

Procedural changes

Freehills partner Kate Jenkins says the news laws will lead to procedural changes.

Under the current system, the commission assists an individual draft their complaint, sends the complaint to the respondent, waits for a response, considers both sides and decides whether a complaint should proceed.

If yes, VEOHRC requires both parties to attend conciliation, and if this doesn’t resolve the issue, the commission closes the file and the individual can go to the Victorian Civil and Administrative Tribunal.

Under the new system, a claimant can go straight to VCAT or through the VEOHRC. There is no cost for a claim.

The laws allow the VEOHRC to conduct investigations into businesses where there is evidence of systemic discrimination that is unlikely to be remedied through the normal complaints processes.

Authorisation from VCAT will be required before forcing an individual to hand over documents or give evidence.

The laws also allow the Commission to make public reports on its investigations directly to Parliament – so-called “naming and shaming”.

Positive duty

Another change is so-called positive duty on employers to ensure they take “reasonable and proportionate” steps to eliminate discrimination, victimisation and bullying as far as possible, as opposed to dealing with complaints when they arise.

Melbourne lawyer and adviser Peter Vitale says SMEs need to understand that under positive duty, it’s no longer just a matter of preventing discriminatory practices in the workforce.

“I suspect it will become apparent with time and some litigation that the current sorts of practices that many employers adopt will need to be updated substantially,” Vitale says.

“It seems to me that employers might have to get a bit more sophisticated, with perhaps more regular training measures and look at their own practices in not only discrimination but also identifying potential risk situations and addressing those.”

“For instance, that might include looking at refining policies to really nail down when risks of discriminatory conduct are more likely to happen.”

“It might include, for instance, varying procedures when interviewing job candidates.”

“It might include varying work practices, for example implementing a greater degree of monitoring of areas such as a mine site or a building site or an area of a factory that is out of the line of sight.”

The law might also, Vitale says, cover instances where an employee has received complaints in the past about discriminatory behaviour.

“Given the nature of positive duty, an employer might want to carefully consider the manner in which it sends that employee out.”

“The tension there may well be between the duties of the employer under the EO act and the rights of the employee under unfair dismissal laws, as an example.”

What do the changes mean?

VECCI’s Marriott says the new laws tap into a trend encouraging employers to be on the front foot rather than being reactive, and codifying best practice.

“We’re seeing legislation relating to the workplace, whether it’s OH&S or equal opportunity, is increasingly codifying positive duty,” Marriott says.

“The obligation is on employers’ in terms of reasonable and proportionate measures.”

While the new act doesn’t clearly define what “reasonable and appropriate” measures are, Freehill’s Jenkins advises employers to:

• Make sure your policies and definitions are up to scratch.
• Distribute them.
• Look at staff training – training on discrimination, victimisation, bullying and sexual harassment should be face-to-face.
• Look at how complaints are dealt with.
• Keep an eye on broader issues such as pay equity and trend complaints.

Gattuso also recommends businesses exercise caution when seeking personal information because there are limits on the use of that information and a need for confidentiality.

“Be careful in terms of information you request and check policies and procedures to make sure they are not discriminatory or could be interpreted as discriminatory,” he says.

Gattuso also says employers will “now need to make a reasonable adjustment for employers or prospective employers who have a disability or impairment.”

“A real shift is the onus of proof as to whether or not requirement or practice is reasonable – it will be the case the employer who is seeking to impose the requirement will need to prove it is not unreasonable,” Gattuso says.

VECCI’s Marriott says employers or duty holders need to think proactively about compliance in dealing with discrimination.

“Really, it involves a business identifying areas where they are not so compliant, and having a strategy on training and improving policies and procedures,” she says.

Beyond specific legal advice, there is plenty of general information available from VECCI, the Australian Human Resources Institute, the VEOHRC as well as through the State Government.

Will they work?

Freehills partner Kate Jenkins is undecided on whether the new laws are good news for employers.

On the plus side, employers can say no to conciliation if they see no value in it, or can avoid large legal fees by agreeing to conciliations.

On the other hand, the dispute could escalate much more quickly and employers could find themselves at VCAT quicker than before.

The law firm has also warned that the ability to go straight to VCAT could result in an increase in frivolous and vexatious complaints, leading to increased costs for employers.

Another consequence, she says, is it’s likely more people will use the Federal Fair Work Act to bring discrimination claims.

“We’re already seeing more people using the Fair Work Act to make discrimination claims.”

A trendsetter?

Macpherson + Kelley principal Andrew Douglas says the prospect of Victoria’s equal opportunity laws being used as a model for other parts of Australia is not strong, given the conservative governments in New South Wales and Western Australia.

“If you’re talking about having a unified system of discrimination law, in effect you’re going to have to have something similar to what happened with the Fair Work laws, which was the states surrendering their rights in this area,” Douglas says.

“I would have thought – as is always the case – when you try to unify laws on a national basis, it’s a long process,” Douglas says.

Jenkins says occupational health and safety and workers’ compensation would probably be first on the harmonisation agenda, rather than equal opportunity.

“As far as I know it’s not on the political agenda, but I anticipate it will be at some point.”

“I’d expect a look at harmonising discrimination laws, because legislation in every state is slightly different for different things.”

But she believes the jury’s out on whether Victoria’s new laws, with its positive duty on employers and different approach to complaints management, will provide a template for national laws.

“Other states will probably wait and see if it works better,” Jenkins says.