Legal cases about industrial manslaughter charges, contractor agreements and underpayments will all get their day in court next year. Here are a few for HR professionals to keep front of mind.
Every year, HR professionals and employers have to deal with the shifting landscape of employment law. The pandemic only made these changes more complex.
In an attempt to start 2022 on the front foot, HRM asked two legal experts to help us unpack some upcoming legal cases that HR should keep an eye on.
WHS and industrial manslaughter changes
In May 2021, a Western Australian employer became the first to be sentenced to jail time under WA’s new workplace health and safety laws.
As we head into 2022, more states are likely to follow suit, says Amy Zhang, Executive Counsel and Team Leader at Harmers Workplace Lawyers.
“Queensland has been really aggressive in terms of pursuing industrial manslaughter prosecutions,” she says. “There’s four currently making their way through the courts and will likely go to final hearing sometime next year.
“We anticipate that there would be massive penalties for the companies… [and] that the individuals could also face imprisonment as well as financial penalties,” says Zhang, “Things are really heating up in Queensland.”
Queensland first introduced industrial manslaughter penalties in 2017, the second state to do so after the Australian Capital Territory in 2004. Victoria and the Northern Territory’s laws came into effect last year, and Western Australia’s industrial manslaughter provisions will kick in next year. The New South Wales parliament is currently debating amending the Work Health and Safety Act 2011 to make industrial manslaughter an offence.
Queensland commenced its first industrial manslaughter case against an individual in 2020, which resulted in a $3 million fine. The case was brought forward by the independent Work Health and Safety Prosecutor after an employee’s death on site following a forklift incident in 2019.
In August this year, the prosecutor commenced three more cases against employers. In one case, the prosecutor only brought charges against the organisation. However, in the two other cases, company directors are also on the hook.
“With the introduction of industrial manslaughter provisions, for employers, this means that the consequences are much more serious now, and so it’s a reminder to companies to be vigilant about work health and safety,” says Zhang.
The remit of workplace health and safety is also likely to expand in the coming year. COVID-19, of course, will remain a huge focus, but more attention will also be given to mental health and sexual harassment as a WHS issue.
Ensuring adequate safety processes are in place is the first step to ensuring compliance with work health and safety obligations, says Zhang, but relevant and regular training is equally important.
“There needs to be ongoing training for staff and managers to make sure these policies aren’t just pieces of paper.”
This is particularly important in our changing work environments, says Zhang.
“What business are liable for, particularly in regards to sexual harassment, has changed over the year. So it’s about making sure managers and HR are more aware and vigilant about what they should be looking out for in a digital environment, too.”
Cases to watch:
On a federal level, the High Court could shake things up for contractors and employers of contractors next year.
The High Court is set to rule on an appeal that could turn the definition of an employment relationship on its head.
The initial case was brought forward by two truck drivers who worked as independent contractors for a company. The business cut ties with the truck drivers in 2017 after nearly 40 years of engaging their services. The truck drivers, who did not service any other companies, argued they should be treated as employees and therefore be eligible for a significant back pay of superannuation and annual leave.
The case, heard by the Federal Court in 2020, sided with the employees.
The court found that contractors, who have long-standing relationships with the employer and are integral to the company, could demonstrate that their ongoing work with the company amounted to an employment relationship. This could mean that other contractors who fulfil these requirements are also considered employees and could therefore be eligible for employment benefits.
“In ultimately determining this matter, it is very likely the High Court case will set out what will become the current applicable principles in this vexed area,” says Michael Byrnes, Employment Law Partner at Swaab.
“[If they overturn the ruling] it would lead to a narrowing of what is considered to be employment, reducing the risk to employers of wrongly characterising workers.”
If the High Court upholds the ruling, employers would need to re-examine their relationships with contractors to make sure they’re not straying into the realm of an employment relationship, or offering employment benefits if they are.
This isn’t the only change employers of contractors could see in 2022. In another case set to be heard by the High Court next year, labor hire arrangements could be in for a shake-up.
In a case originally heard back in 2020, James Allsop, Chief Justice of Australia’s Federal Court, upheld the law which stated that ‘unskilled’ workers would be paid as contractors below the industry minimum wage. This often occurs when a labour hire company hires an independent contractor out to a third party. This is sometimes called an ‘Odco arrangement’.
Although Allsop criticised the current law, as it means employers operating in the gig economy can avoid paying minimum wages, he said the court was bound to follow it.
The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU), who brought the original case against the employer, lodged an appeal in February 2021. If the appeal is successful, the impact will ring loudly across the gig economy.
“Labour hire companies, and clients of those companies which rely upon labour supplied through Odco arrangements, will be watching with particular interest,” says Byrnes. “[If it’s overturned] it might lead to a significant change in the way organisations source labour.”
Cases to watch
FWO continues to chase underpayments
In recent years, the Fair Work Ombudsman has waged an aggressive campaign against underpayments, something that it’s not likely to let up in 2022.
“[The FWO is] focusing on white collar workers now, but also managers and salaried workers. That’s reflected in their recent prosecutions against financial institutions,” says Zhang.
This is a slight shift for the FWO, she says. In recent years, the FWO’s focus has been on large chain stores, such as Woolworths, 7/11 and restaurants, which mostly concerned frontline workers who are usually on low award wages.
Just because the FWO has set its sights on larger organisations, that doesn’t mean small businesses shouldn’t be double checking their obligations under the Fair Work Act, says Zhang.
“They should be asking, ‘Are [our employees] covered by an award? What are the classifications that our workers are under and are they being paid the right minimum? Are they being paid overtime and other allowances or benefits that they’re entitled to?’”
HR in particular should be playing an active role in ensuring compliance, as they could become “accessories to contraventions,” says Zhang.
“The [FWO] is definitely targeting and focusing on accessories to contraventions. It’s not shying away from including HR managers, executives and advisors within a business in prosecution proceedings. It’s extremely important organisations are getting good legal advice and auditing their systems and process, and engaging experts who can fill in the compliance gaps for HR.”
Cases to watch
Need to brush up on your employment law skills? Register for AHRI’s Introduction to HR Law courses. The next virtual workshop will be held on 1 February.