Following significant changes in 2021 to the Sex Discrimination Act (SD Act) by the Sex Discrimination and Fair Work (Respect at Work) Amendment Act 2021, the new Federal Government has acted on its commitment to implement all 55 recommendations of the Respect@Work Report.

The Federal Government has introduced the Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill 2022 (Bill) which implements a further seven recommendations of the Respect@Work Report (recommendations 16 -19, 23, 25 and 43). Following the second reading speech, the Bill has been referred to the Senate Legal and Constitutional Affairs Legislation Committee, which is due to report on the Bill by 3 November 2022.

The Bill signals a significant change in focus of the SD Act to the systemic prevention of sexual harassment, sex-based harassment and discrimination, hostile work environments and victimisation, rather than relying on those impacted by this conduct to make complaints. The Bill does this by:

• imposing a positive duty on employers (and persons conducting a business or undertaking, or PCBUs) to take reasonable and proportionate measures to eliminate, as far as possible, this conduct;
• recognising that the elimination of hostile work environments is important for preventing sexual harassment and prohibits conduct by any person in a workplace that subjects an individual in the workplace to a hostile work environment on the basis of sex;
• empowering the Australian Human Rights Commission (AHRC) to investigate systemic unlawful discrimination on its own initiative; and
• expanding the role and powers of the AHRC to enforce the positive duty following a 12 month grace period.

The new laws are proposed to act concurrently with WHS laws and State-based anti-discrimination claims, to mutually reinforce the building of safer and more respectful workplaces. The same claim will not be permitted to be made in multiple jurisdictions. Ancillary changes are proposed to the Respect@Work Act 2021 to align with the Bill.

Separate legislation will be proposed to make further amendments to the Fair Work Act to expressly prohibit sexual harassment.

Positive duty

The most significant change proposed by the Bill is the immediate imposition of a positive duty on employers and PCBUs to take reasonable and proportionate measures to eliminate, as far as possible, sexual harassment, sex based harassment and discrimination, hostile workplaces and victimisation.

In practice, employers and PCBUs must take proactive measures to prevent this conduct being undertaken by the organisation, employees, workers, agents and third parties, such as clients and customers. The action required will depend on their circumstances.

In assessing compliance with the duty, a number of factors will be taken into account including the size, nature and circumstances of the business, financial and other resources and the practicability and cost of the steps to eliminate the conduct. This approach is similar to the 'so far as reasonably practicable' qualification in Work Health and Safety legislation and the current vicarious liability provisions in the SD Act.

Elimination of hostile work environments

Another important proposal in the Bill is the prohibition on conduct by a person that subjects another person to a workplace environment that is hostile on the ground of sex. The new provision will be contravened where:

• the conduct occurs in a workplace where either the person impacted or perpetrator works;
• the person impacted is in the workplace at the time the conduct occurs or afterwards; and
• a reasonable person, having regard to all the circumstances, would have anticipated the possibility of the conduct being offensive, intimidating or humiliating to a person of the sex of the person impacted by the conduct.

The prohibition is intended to apply broadly, and covers all persons who may impact, or be impacted by, a workplace environment, including customers and clients.

The circumstances to be considered when determining whether the conduct is unlawful include: the seriousness of the conduct; whether the conduct was continuous or repetitive; the role, influence or authority of the person engaging in the conduct; and any other relevant circumstance. The inclusion of these factors will limit the scope of conduct captured under the provision.

Other important amendments commencing at Royal Assent

The Bill proposes to lower the threshold for applicants alleging harassment on the ground of sex from 'seriously demeaning' conduct to 'demeaning' conduct.

The Bill, once passed, will empower the AHRC to immediately make inquiries into systemic unlawful discrimination, on its own motion or at the request of the Minister. Systemic unlawful discrimination is unlawful discrimination that affects a class or group of persons and is continuous, repetitive or forms a pattern.

The Bill proposes to introduce a mechanism to enable class actions to be brought in the federal courts on behalf of a group of people who have experienced unlawful discrimination. This would allow representative groups such as unions to commence proceedings on behalf of one or more impacted people in in the AHRC and continue to lead the proceedings from the AHRC to the federal courts. By proposing this amendment, the Bill attempts to remedy the procedural complexities involved in bringing a claim which may deter individual claimants from taking legal action. If passed, this mechanism will likely result an increased number of claims in the AHRC and the federal courts.

Responding to reports that adverse costs orders discouraged prospective sexual harassment complainants, the Bill also revises the default position to one of 'cost neutrality'. It is proposed that parties to proceedings will typically bear their own costs, but the court may diverge from this default position where circumstances justify doing so, considering factors such as the financial circumstances of the parties, their conduct in the proceedings and whether the proceedings involve an issue of public importance.

Commonwealth public sector entities will also be required to report to the Workplace Gender Equality Agency if the Bill is passed. Private sector entities are already required to do this.

Consistent with the change made to the SD Act by the Respect@Work Act 2021, complaints to the AHRC alleging discrimination on the basis of race, age and disability will be subject to termination by the AHRC on the grounds of time only after 24 months, rather than 6 months.

AHRC powers

The Bill expands the regulatory and enforcement role of the AHRC powers in relation to the positive duty, but only after a 12 month grace period. The below diagram outlines the compliance and enforcement mechanisms that will take effect 12 months from Royal Assent of the Bill:

AHRC powers to inquire into suspected non-compliance with the positive duty

1. The AHRC may inquire into compliance with the positive duty if it reasonably suspects noncompliance.
2. AHRC to issue a written notice stating the grounds on which it commenced the inquiry
3. The person will have the opportunity to make written or oral submissions to the AHRC in response.
4. If the AHRC makes a finding of noncompliance:

• must notify the person in writing of its finding and the reasons for the finding; and
• may notify the person of any recommendations by the AHRC for preventing a repetition or continuation of the failure to comply.

5. Unless the person enters an enforceable undertaking, the President of the AHRC may issue a written compliance notice including:

• name of contravener
• brief details of failure to comply
• action that person must take
• reasonable period within which action must be taken
• if appropriate, reasonable period within which person must provide evidence of action taken

6. The contravener may apply for review in the Federal Court or Federal Circuit and Family Court of Australia on specific grounds:

• person has not failed to comply as alleged in compliance notice; and/or
• the notice is not procedurally compliant.

7. President of AHRC may apply to the Federal Court or Federal Circuit and Family Court of Australia if compliance notice not complied with. If the Court is satisfied there is noncompliance, may make order:

• directing person to comply; or
• any other order court considers appropriate.

Steps to take now

Prevent systemic issues by ensuring a governance structure and culture that prevents sexual harassment, harassment and discrimination on the ground of sex, hostile workplace environments and victimisation

The AHRC is likely to initially focus its enforcement of the positive duty in industries where there is a pattern of systemic failure. Systemic failure in complying with the duty may lead to a class action. Employers and PCBUs can get ahead of the curve by taking proactive and practical steps by auditing their systems of work and work culture to identify potential systemic failures that puts them at risk of non-compliance with their positive duty. Implementing a policy is not enough. Positive steps to create and maintain a respectful culture is critical. These steps include:

• leadership (Board and ELT) modelling appropriate workplace behaviours,
• setting the tone and creating trust that this conduct will not be tolerated and will be appropriately dealt with;
• treating and reporting this conduct as a WHS issue. This includes creating complaints systems that are human centred, engaging in greater transparency by capturing and sharing learning from any matters. It would also include obtaining data from employee surveys and audits which can identify red flags for attention and regularly analysing that data for systemic issues such as multiple sexual harassment or discrimination complaints or issues emanating from the same part of the organisation, monitoring EAP statistics and regularly reporting to the board and the executives on these issues.

Review policies and procedures

While the implementation of policies and procedures is not sufficient without their practical implementation in day to day operations, it is important to review and update current policies and procedures to enable prevention and to support respectful culture.

Rethink and review approach to NDAs

An important proactive step for employers to take to fulfil the positive duty (and in anticipation of the forthcoming guidance from the AHRC) is to rethink the role of non-disclosure agreements in sexual harassment cases. Traditionally, NDAs have been negotiated and agreed at the time the impacted person was most vulnerable and prevented the impacted person to ever talk about the matter. This 'gagging' effect impairs the wellbeing of the person impacted and the organisation's ability to share its learnings in a de-identified way, and enables the behaviours to be repeated. In this way, traditional NDAs are a barrier to the prevention of sexual harassment. A new approach to NDAs would carve out the right of the organisation to disclose – both internally and externally in a de-identified way – that a complaint had been made and how it had been dealt with. It would also require any substantiated outcomes to be recorded so it can include that matter in its aggregated data to monitor for any systemic issues. In this way a new form NDA puts the person impacted by the conduct at the centre of the response, and helps to prevent future breaches. Find out more in New form NDAs: an important factor in discharging positive duty.

Note the psychosocial risk obligations under the model WHS laws

The Bill has clarified that the positive duty does not abrogate existing WHS obligations regarding psychosocial hazards in the workplace. Earlier this year, SafeWork Australia amended the model WHS legislation to clarify employers' and PCBUs' obligations with respect to psychosocial hazards in the workplace. The amendments have been implemented in New South Wales, and other states are expected to follow suit. Sexual harassment is a prevalent psychosocial hazard and, as a result, it is critical that employers and PCBUs are clear on their obligations under the WHS regime.