New enforcement powers for AHRC to bolster workplace discrimination compliance

From 12 December 2023, the AHRC will be granted new inquisitorial and enforcement powers to ensure that businesses and organizations comply with their positive duties under the Sex Discrimination Act 1984 (Cth) (the Act). Following the 2020 AHRC inquiry into sexual discrimination in the workplace[1], the Act was amended to introduce positive duties for businesses and organisations to eliminate, to the best of their ability, sexual discrimination in the workplace.

Specifically, and as detailed by the AHRC, workplaces must prevent the following from occurring:

  • discrimination on the grounds of sex in a work context
  • sexual harassment in connection with work
  • sex-based harassment in connection with work
  • conduct creating a workplace environment that is hostile on the grounds of sex
  • related acts of victimisation.

Now that the AHRC can investigate these issues and enforce compliance, all businesses and organisations must ensure that they take reasonable and proportionate measures to eliminate the above conduct.

If the AHRC concludes that a business or organisation is non-compliant, it may issue a compliance notice detailing what the business or organization must do or refrain from doing to address the non-compliance, issue an order to direct compliance through applying to the federal courts, or pursue enforceable undertakings with the business or organisation.

The AHRC has released guidelines to help businesses and organisations ensure that they comply. These are presented in the form of ‘seven standards’: leadership, culture, knowledge, risk management, support, reporting & response, monitoring, evaluation & transparency.

  1. Leadership: senior leaders must understand their obligations under the Sex Discrimination Act, be aware of any potential unlawful conduct within their business and implement appropriate measures to prevent and address such issues. Ultimately, they must be role models and lead by example in this regard.

  2. Culture: organisations and businesses must foster and promote a culture that adheres to contemporary standards of safety, equality, inclusivity and diversity. A positive culture like this will empower all employees to report issues and ensure that people are held accountable.

  3. Knowledge: this standard focuses on the importance of organisations and businesses developing a policy regarding respectful behaviour in the workplace. Furthermore, employees should be educated about the standards of behaviour expected of them.

  4. Risk Management: it is important that organisations and businesses recognize that unlawful conduct within the workplace constitutes a health and safety risk, and must be treated as such. These issues require risk-management solutions just like other risks.

  5. Support: organisations and businesses must ensure that adequate support is available to employees who may be suffering or witnessing unlawful workplace conduct. This is a positive responsibility to inform employees of the support options available and educate them about when it is appropriate to seek support.

  6. Reporting and response: just as support options need to be made available to employees, so do reporting and response options. Reporting and responding to unlawful conduct is essential to stopping it and mitigating the risk of it occurring again in the future.

  7. Monitoring, evaluation and transparency: organisations and businesses must collect relevant data related to unlawful conduct within the workplace and use it to continually assess and improve work culture. Furthermore, this information should be conveyed to employees and other relevant stakeholders to ensure that transparency is achieved. This enables the work community as a whole to evaluate the potential issues at hand and develop tailored response plans.

These standards are explained in detail here.

What does this mean for employers?

As a business proprietor you must take action now (if you have not already) to ensure internal policies and procedures are not only in place but are being actively implemented to ensure compliance with the positive duty obligation to be imposed by the Act in December 2023.

Risk Transfer and Insurance Considerations

Employment Practices Liability (EPL) insurance is a type of insurance available to organisations that covers the directors and officers and the company for claims or complaints brought by employees arising out of an allegation of an “employment wrongful act”. It will also cover compensatory penalties.

Coverage for risk in connection with failure by the company or its directors falls under a management liability policy. Management Liability provides a suite of insurance policies including:

  1. Directors’ and Officers’ Liability;

  2. Company Liability;

  3. Statutory Liability;

  4. Employment Practices Liability; and

  5. Crime

To read more about Management Liability see our article here.

If Employment Practices Liability is of interest to you, please contact one of our advisors so that we can procure the right cover for the right price.

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