Key employment law themes from 2021

As we move into the new year, HR leaders are still grappling with important law changes

Key employment law themes from 2021

This article was provided by Herbert Smith Freehills partner Shivchand Jhinku, senior associate James Banh and vacation clerk Isobel Patmore

2021 has seen Australian employment law respond to multiple challenges across various industries and social issues. In particular, businesses and HR professionals should be aware of the evolving laws surrounding COVID-19 vaccination mandates and how this may affect workplaces moving into the new year.

Throughout 2021, businesses and HR professionals have seen a significant change in the Australian workplace environment through the rapid development and uptake of working from home, hybrid and flexible working. Australian employment law has been trying to keep up with these changes, and to tackle the challenges associated with the COVID-19 pandemic and other employment issues. Some of the key themes in employment law across 2021 have been vaccine mandates, the permanent shift towards hybrid working, a casual employment and the gig economy, and reforms to workplace sexual harassment laws.

a) Vaccine Mandates

As the COVID-19 vaccine was rolled out across Australia in 2021, employers and HR professionals faced legal uncertainty around mandating vaccination in the workplace, and whether a blanket mandate across the workforce irrespective of an employee’s workplace location could constitute a lawful and reasonable direction. Such issues have further been complicated by the piecemeal approach taken by each of the States and Territories with respect to mandating vaccinations.

Most recently and in the first of many decisions likely to be handed down on the issue, the Fair Work Commission (FWC) on 3 December 2021 found that BHP’s COVID-19 vaccine mandate at the Mt Arthur coal mine was unenforceable. Although the FWC held that the mandate itself was lawful, it was not a reasonable direction largely because BHP had failed to properly consult with their employees before introducing the requirement. The decision highlights the importance of proper and genuine consultation, but also reinforces the likelihood that a direction to be vaccinated is likely to be lawful and reasonable provided that such a direction is aimed at the protection of health and safety, and is reasonable having to the subject matter and context.

This will be an interesting space to monitor in 2022 as employers move to terminate employees for failing to comply with their mandatory vaccine policies.

b) Hybrid Working

The amount of Australians working from home has doubled since the COVID-19 pandemic began, with many employees now expecting greater access to hybrid working options. Chair of the Productivity Commission Michael Brennan has noted that the hybrid working model may be the ‘easiest one to choose’ for employers, but is also the ‘hardest one to execute’. It presents various challenges to businesses from keeping employees engaged, motivated and connected as a team, to managing expectations around returning to the office and whether their current contracts of employment reflect the hybrid reality. There are also issues around tax obligations if an employee relocates overseas, and the issue of workplace surveillance and whether a business should and can undertake such surveillance remotely in compliance with surveillance laws in the relevant States and Territories.   

Businesses will need to continue to navigate these issue into 2022, especially as employees return to in-person work with increased vaccination rates.

c) Contractors and Casual Workers

In the modern ‘gig economy’, 2021 has seen employment law dedicate significant attention to distinguishing between different categories of workers. Food delivery services such as Uber Eats and Deliveroo have faced legal challenges over whether their workers are employees or independent contractors, which impacts their entitlements and ability to claim unfair dismissal. There are currently a number of cases in the High Court awaiting judgment which will provide greater clarity and guidance on the legal test to be applied when distinguishing between an employee and contractor. The Full Bench of the Fair Work Commission in August 2021 reserved judgment in an appeal by Deliveroo pending the outcome of the High Court decisions. 

In the 2021, the High Court in Workpac v Rossato, also determined that the words of the contracts are decisive when determining employment types, such as casual or permanent employment. This outcome reinforced those amendments introduced to the Fair Work Act 2009 (Cth) earlier this year, which defined casual workers on the basis of their job offer rather than their subsequent conduct. These developments in employment law show a trend towards stricter employment categories, which avoids uncertainty about employees’ leave or pay entitlements.

d) Workplace Sexual Harassment Laws

A final key theme in employment law this year has been the introduction of new sexual harassment laws, following the 2018 ‘[email protected]’ Report and ongoing discussions around workplace culture. The Sex Discrimination and Fair Work (Respect at Work) Amendment Act 2021 took effect on 11 September 2021, and sends a strong message in support of the need to ‘strengthen, simplify and streamline the legislative and regulatory frameworks that protect workers from sexual harassment’. Amongst multiple other changes, the Act extends the Fair Work Commission’s powers to prevent workplace sexual harassment and adds miscarriage as a reason for compassionate leave. It is unknown what will be the impact of the new jurisdiction.

2021 has seen a number of key developments in Australian employment law. Similar challenges likely await businesses in the new year and there may be unexpected surprises particularly as we head into an election year.

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