'Workers have got a much greater array of legal avenues they can pursue,' says lawyer
If there’s one piece of legal advice he could give employers as we move into 2024, lawyer Tony Wood says it’s to make compliance a priority.
In considering the most challenging Australian employment, industrial relations and safety issues for the coming year, without doubt the most complex to navigate would be compliance with awards, industrial instruments, enterprise agreements and national employment standards, he says.
“What we've seen over the last few years is a great many reputable employers who genuinely want to do the right thing [and] discover they haven't complied in certain areas or their systems have not been able to catch up to the complexity that is presented by the industrial architecture,” says Wood, Partner at Herbert Smith Freehills.
“The Fair Work Ombudsman, which is the regulator in charge of prosecutions and investigations of compliance, is becoming more rigorous, more heavily funded, and will expect employers to self-report non-compliance.”
Under-investment by employers in payroll compliance measures
He notes that compliance with statutory minimum pay and conditions has been a key focus and a number of large employers have already publicly disclosed underpayments of employee entitlements under the Fair Work Act and relevant awards and enterprise agreements.
“Many employers are discovering still that there are problems with their payroll compliance,” says Wood. “Some have under-invested in looking at that issue as a risk to the business. It's an area where there's going to be a really high expectation of better performance across the board. And I still think we've only seen the tip of the iceberg in terms of employers grappling with those issues.”
It's a topic that all employers, if they're not already, must now be looking into and conducting more regular audits and reviews from a risk perspective, he says.
Bigger businesses most impacted by enterprise bargaining
Wood cautions that, without doubt, 2024 is going to be a challenging year for employers and one in which employees are going to be more demanding than ever.
“Workers have got a much greater array of legal avenues they can pursue,” he says. “They can make claims for discrimination or general protections, file disputes or grievances, they can make whistleblower complaints. Often those matters arise because there are problems within a business that aren't being addressed or people are not feeling heard in the right way.”
As well as the enhancement of union powers, other areas of significance for employers in the coming year will be addressing ‘same job same pay’, compliance with positive duty, and conducting workplace cultural/effectiveness reviews as a result of the more onerous obligations in relation to sexual harassment, bullying, psychosocial health and safety.
This coming year is going to be significant in terms of employer obligations, he says.
“We've already seen in 2023, probably the most significant statutory reforms of the system in more than a decade. That's going to lay the foundations for some quite significant changes that are going to affect most Australian employers in the next few years, and certainly during 2024.
“Bigger businesses especially will be impacted in a more significant way by the complexities associated with enterprise bargaining as a result of both tranches of reforms over the last 12 months. It will be harder for enterprise agreements to be reached, given that there's a greater authority for unions to defer bargaining and send issues off to the Fair Work Commission.”
Employer focus should be engagement and transparency
That will make incentives for parties to bargain or reach agreement in bargaining more difficult, notes Wood. “It's going to very likely elongate the process of enterprise bargaining and I think it's going to lead to more disputes, and disputes that last longer.”
Employers should focus more than ever on worker engagement and transparency, he says.
“The more engaged you are with your workforce, the closer your relationships, the greater the degree of trust between workers and management. The correlation with productivity and less disputation is stark. There is opportunity in many businesses to really engage in a more fulsome way and probably to invest more heavily at the supervisory level, to avoid distrust.
“If employers can be more trusted and they can be more transparent in everything they do with their workers, they're more likely to attract that level of engagement.”
Silver lining: fewer risks through greater awareness
In looking for a silver lining from the changes, he says, one is a greater awareness of risks at work such as mental health, since employers are putting greater emphasis on psychosocial health and safety at work,
“No one wants anyone in their workforce to be unwell or treated badly and nobody wants to pay the costs that arise from that - whether that be worker compensation claims or other contested bullying or common law claims.
“Now there's much greater awareness and calling out of that behaviour and more transparency and I think employers actually benefit from that quite significantly.”
