Family and Domestic Violence Leave

From 1 August 2018, all award covered employees are entitled to five days unpaid family and domestic violence leave.

Background

As part of the four yearly review of modern awards, the Australian Council of Trade Unions (ACTU) made a claim to provide all employees experiencing family and domestic violence with 10 days of paid leave.

On 3 July 2017, the Full Bench of the Fair Work Commission rejected the ACTU’s claim for paid leave, but expressed a preliminary view that unpaid leave should be available. On 26 March 2018, the Full Bench confirmed this view, deciding to provide five days unpaid leave to all award employees experiencing and needing to deal with the impact of family and domestic violence. In making its decision, the Full Bench said:

“Retaining employment is an important pathway out of violent relationships … Absent an entitlement to unpaid family and domestic violence leave, employees will be reliant on the goodwill of their employer.”

On 6 July 2018, the Full Bench delivered a decision finalising the content of the term for unpaid family and domestic violence leave to be inserted into all Modern Awards.

Further to that decision, on 27 July 2018, the Full Bench issued Determinations which vary all Modern Awards by inserting the approved term. The Determinations provide for the new entitlement to come into effect at the start of the first full pay period that commences on or after 1 August 2018.

The Determinations

The Determinations provide:

  • five days’ unpaid leave to deal with family and domestic violence for permanent and casual employees;
  • the leave is available if it would be impractical for the employee to deal with the impact of the family and domestic violence outside their ordinary work hours;
  • the five days is available at the start of each 12 month period of the employee’s employment and does not accumulate from year to year;
  • by agreement between the employer and the employee, the period of unpaid leave may be less than a day or more than five days;
  • the leave does not count as service, but does not break the continuity of service;
  • the employee must give notice of the leave as soon as practicable to the employer and advise the employer of the expected duration of the leave;
  • the employer may require evidence that would satisfy a reasonable person that the leave is being requested to deal with family and domestic violence;
  • employers must take steps to ensure that the notice and evidence of taking leave is treated confidentially.

Next Steps

Employers are not required to provide this new entitlement to non-award covered employees. However, now that a standard has been set, “employers of choice” are likely to follow, to the extent they have not already conferred an entitlement like this on their employees.

The Federal Government has foreshadowed legislation extending this entitlement to all employees in Australia covered by the Fair Work Act 2009.

Australia’s modern slavery reporting requirement for businesses

On 29 June 2018, the Australian Government introduced to the Federal Parliament its much anticipated Modern Slavery Bill. This Bill requires certain business entities to disclose on an annual basis their actions to address modern slavery (exploitation such as slavery, forced labour and human trafficking) in their operations and supply chains.

This alert explains the Bill and the actions that will be required when the Bill becomes law.

Modern slavery reporting requirement

Entities required to report

The reporting requirement will apply to:

  • Australian entities;
  • Foreign entities carrying on business in Australia;
  • Australian Government (on behalf of all non-corporate Commonwealth entities);
  • Corporate Commonwealth entities; and
  • Commonwealth companies.

Australian entities are widely defined and are included irrespective of whether such entities are Australian residents for tax purposes.

Foreign entities will be considered to be carrying on business in Australia if: they have a place of business in Australia; establish or use a share transfer or registration office in Australia; or administer, manage or deal with property situated in Australia as an agent, legal personal representative or trustee. This will capture a foreign entity that carries on business in Australia through an Australian subsidiary.

Australian or foreign entities that are not required to report can ‘opt in’ to the reporting requirement. Such entities must comply with the reporting requirement in the same way as reporting entities.

Revenue threshold

Entities with a total annual revenue below $100 million will not be required to report. “Revenue” includes the consolidated revenue of the reporting entity and any entities it controls. The revenue threshold is calculated based on the reporting entity’s own financial year or reporting period. Consolidated revenue is to be determined in accordance with the Australian Accounting Standards, even if those standards do not otherwise apply to the entity.

Modern slavery statements

Reporting entities (or ‘opt in’ entities) depending on their corporate structure, may prepare either single or joint modern slavery statements. Modern slavery statements must identify the reporting entity and address mandatory criteria:

  • the reporting entity’s structure, operations and supply chains;
  • modern slavery risks in the reporting entity’s operations and supply chains (including subsidiary entity operations and supply chains);
  • actions taken (including actions by subsidiary entities) to assess and address those modern slavery risks, including due diligence and remediation processes;
  • how the reporting entity assesses effectiveness of the actions taken;
  • the process of consultation with subsidiary entities in preparing the modern slavery statement; and
  • any other information the reporting entity considers relevant.

All joint statements must address the mandatory criteria for each and every reporting entity covered by the statement.

The Australian Government is to provide formal administrative guidance on the terms ‘risks’, ‘operations’, ‘supply chains’, ‘due diligence’ and ‘remediation processes’. It is anticipated that these definitions will align with the UN Guiding Principles on Business and Human Rights. It is not intended that entities report on all modern slavery risks or on identified incidences of modern slavery. The initial expectation is to report on the most severe modern slavery risks which is not restricted to tier 1 or direct suppliers.

Formal guidance will also be provided on each form of exploitation that comprises the term ‘modern slavery’: slavery; servitude; forced labour; forced marriage; debt bondage; deceptive recruiting for labour or services; trafficking in persons; harbouring a victim; and the worst forms of child labour. Relevant definitions in the Commonwealth Criminal Code and international human rights law will be drawn upon for this purpose.

Further, a template modern slavery statement will be provided to assist businesses in reporting.
The Bill also enables a business to submit a revised (single or joint) modern slavery statement.

This allows reporting entities to correct any false or misleading statements, errors, or to revise market sensitive information.

Approval of modern slavery statements

Single reporting entities must ensure their modern slavery statement is approved by the principal governing body of the entity (e.g. board of directors) and signed by a responsible member (e.g. director, trustee).

Joint reporting entities have three options for approval and signature:

  1. principal governing body and responsible member of each reporting entity covered by the statement approve and sign; or
  2. principal governing body and responsible member of the entity which is in the position to influence or control each reporting entity covered by the statement approve and sign; or
  3. if the first and second options are not practicable, the principal governing body and responsible member of at least one reporting entity covered by the statement approve and sign, accompanied by an explanation as to why the other approval options were not practicable.

Statements (single or joint) may be signed electronically.

The Bill authorises the Minister to make rules to clarify the terms ‘principal governing body’ and ‘responsible member’ for specific entity types.

Timeframe for reporting

The timeframe for submission of modern slavery statements depends on an entity’s financial year or other annual accounting period (reporting period).

Single reporting entities will be required to submit their modern slavery statement within 6 months from the end of the entity’s reporting period.

Joint reporting entities will be required to submit their modern slavery statement within 6 months from the end of the reporting period that applies to all reporting entities covered by the statement or within a period to be determined by the Minister.

Modern slavery statements register

The Bill establishes a Modern Slavery Statements Register in the form of a public website that will be freely accessible and also requires the Minister to register modern slavery statements. Entities can also make their statements available on their business webpages if they wish to do so.

The Minister may decline to register a modern slavery statement that does not comply with the mandatory reporting criteria or relevant approval, signature and timeframe for reporting requirements. This discretion is not subject to merits review. It is anticipated that the exercise of the discretion to decline registration would only apply in cases of egregious non-compliance and after reasonable attempts to work with such entities in rectifying issues.

Commencement

The Bill will commence on a fixed date by Proclamation or six months from Royal Assent. This is to enable the reporting requirement to commence at the beginning of either the Australian calendar year or the Australian financial year.

Entities subject to the Modern Slavery Act (NSW)

On 21 June 2018, the NSW Parliament passed its Modern Slavery Act. This Act also establishes a modern slavery reporting requirement for certain business entities.

The NSW Act will not apply to entities required to prepare a modern slavery statement under the Australian Government’s reporting requirement (when in force) if such reporting requirement is prescribed as a corresponding law under the NSW Act.

Actions businesses need to take

The modern slavery reporting requirement means businesses with more than $100 million in annual revenue will need to gain visibility into their global supply chains and take action to manage identified risks. This will involve a range of operational measures and updating of supplier contracts.

Operational measures include:

  • establishing a policy for responsible supply chains that articulates a commitment to responsible business conduct in its own operations and sets out expectations of suppliers;
  • undertaking due diligence, such as the pre-screening of suppliers and supplier assessments or audits;
  • designing and implementing a strategy to respond to identified risks, which may involve a range of responses such as corrective action plans, training and assistance to suppliers;
  • verifying that the actions taken have been effective, which involves the development of performance indicators and data monitoring;
  • training key personnel in the entity’s own business as well as training suppliers on how to identify and mitigate modern slavery; and
  • establishing a clear chain of responsibility and assigning senior level approval for policy oversight and in relation to the modern slavery statement.

Supplier contracts should be updated to include:

  • assessment/audit rights, including the right to undertake announced and unannounced assessments/audits, assessments/audits by third parties, and the requirement for full cooperation;
  • immediate notification of actual or potential non-conformance with policy;
  • a commitment to follow corrective action plans in instances of non-compliance with policy;
  • the right to suspend or terminate the contract for failure to meet policy standards, failure to cooperate with an assessment or audit process or failure to follow a corrective action plan; and
  • the right to inform relevant authorities of the above.

NSW introduces modern slavery reporting for business

The global movement to eradicate modern forms of slavery has taken another step forward. And, again, much of the responsibility for this progress is being placed on corporates.

On 21 June 2018, the NSW Parliament passed its Modern Slavery Act. This Act will commence on a day to be appointed.

The Act seeks to combat modern forms of slavery (serious exploitation such as slavery, forced labour and human trafficking) and provide assistance and support for victims. Importantly, a key feature of the Act for corporates concerns transparency of business supply chains. The Act requires mandatory disclosure of steps taken by commercial organisations to ensure that their goods and services are not products of supply chains in which modern slavery is taking place.

This alert explains the NSW transparency of supply chains provisions and details the chief differences between these provisions and the Australian Government’s proposed modern slavery reporting model. This alert also sets out other notable features of the NSW Act.

NSW Transparency of Supply Chains

Application

A range of commercial organisations will be captured by the NSW transparency of supply chain provisions. This includes companies, partnerships, associations and other bodies. The provisions will apply to organisations that have employees in NSW and which supply goods or services for profit, with a total annual turnover of $50 million (or more).

Reporting requirement

Commercial organisations will be required to prepare a modern slavery statement for each financial year where the revenue threshold is exceeded.

Statements must detail the steps taken to ensure that goods and services are not a product of supply chains in which modern slavery is taking place. The regulations may require statements to include information about:

  • the organisation’s structure, business and supply chains;
  • the organisation’s due diligence processes in relation to modern slavery within its business and its supply chains;
  • the parts of the business and supply chains where there is a risk of modern slavery taking place and the steps taken to assess and manage that risk; and
  • training about modern slavery available to the organisation’s employees.

Commercial organisations will need to make their statements publicly available (with further details of this requirement to be provided by regulations).

Penalties for non-compliance

The Act imposes penalties of up to $1.1 million for:

  • failure to prepare a modern slavery statement;
  • failure to make the modern slavery statement public (in the manner required) ; and
  • false or misleading information in a modern slavery statement.

Australian Government Transparency of Supply Chain

In February 2017, a Parliamentary Committee commenced its inquiry into establishing a Modern Slavery Act in Australia.  This included consideration of whether a modern slavery supply chain reporting requirement for business should be adopted in Australia.  This would require businesses to disclose publicly their actions to address modern slavery in their supply chains.

In its interim report in August 2017, the Committee expressed its strong support for the introduction of a mandatory reporting requirement for entities operating in Australia.  Following the Committee’s interim report, the Australian Government announced its support for a reporting requirement and released a proposed model.  The Committee, in its final report, responded to the Australian Government’s proposed model.  The Australian Government is currently considering the Committee’s recommendations.  Draft legislation is expected in the first half of 2018.

There are two key differences between the Australian Government’s proposed model and NSW transparency of supply chain provisions.  The Australian Government’s model has a revenue threshold of $100 million, compared to NSW’s $50 million, and does not propose to include punitive penalties for non-compliance.

Another possible point of difference is that the federal legislation is likely to provide for a public register of all statements (not just those which have disclosed that the organisation’s goods or services are or may be the product of supply chains in which modern slavery may be taking place), whereas the NSW Act provides for a register of organisations (not their statements) which have identified a supply chain modern slavery issue, along with whether those organisations have taken steps to address the identified issues.

Notably, any commercial organisation that is required to prepare a modern slavery statement under the Australian Government’s reporting requirement (when enacted) is not likely to be required to prepare a statement under the NSW provisions.

Other features of the NSW Act

Establishment of an Anti-Slavery Commissioner

The Act appoints an Anti-Slavery Commissioner. The functions of the Commissioner include advocating for and promoting action to combat modern slavery and monitoring modern slavery statements.

The Commissioner’s powers extend to consulting with the Auditor-General and the NSW Procurement Board to monitor the effectiveness of due diligence procedures in place to ensure that the procurement of goods and services by NSW government agencies are not the product of modern slavery.

The Commissioner’s powers do not extend to investigating or otherwise dealing with individual complaints.

Public register

The Act requires the Commissioner to keep a register of commercial organisations that have in a modern slavery statement disclosed that their goods or services are or may be the product of supply chains in which modern slavery may be taking place. This register can also include any organisation that has voluntarily disclosed to the Commissioner that its goods or services are or may be the product of supply chains in which modern slavery may be taking place

The register is to be publicly available and accessible free of charge.

Establishment of a Modern Slavery Committee

This Committee will consist of Members of the NSW Parliament (both Houses). The Committee will inquire into and report on matters relating to modern slavery.

New offences

The Act also creates some important new offences in relation to the forced marriage of children, slavery and slavery-like conduct and the administration of digital platforms dealing with child abuse material.

The Act also empowers courts to make “modern slavery risk orders” where a person has been convicted of slavery or slavery-like offences with a view to reducing the risk of that person again engaging in prohibited conduct.

Related alert: Implications for Australian businesses following release of landmark modern slavery and supply chains report, December 2017

 

Minimum wages to increase by 3.5%

The Fair Work Commission’s panel for annual wage reviews released its Annual Wage Review 2017-2018 decision on 1 June 2018.

The decision provides that minimum award wages will increase across the board by 3.5% effective 1 July 2018.

This decision will result in the following increases to the Federal minimum wage rates:

  • Weekly minimum wage: from $694.90 to $719.20 (increase of $24.30);
  • Hourly minimum rate: from $18.29 to $18.93 (increase of 64 cents).
    • The proportion of employees that are paid at the adult Federal minimum wage rate is estimated to be only around 1.9%. However, the 3.5% increase will also apply to the minimum rates of pay contained in all modern awards. Increases to minimum weekly wages will be rounded to the nearest 10 cents. The Panel determined that casual loading in modern awards will remain at 25%.
    • In fixing the increase at 3.5% (up on last years 3.3% increase), the Panel observed that modest and regular minimum wage increases do not result in dis-employment effects or inhibit workforce participation. The Panel did accept that there had been a decline in current enterprise agreement making for a number of reasons many of which are unrelated to increases in the national minimum wage and modern award minimum wages.

Employers should now start to review their employees’ existing rates of pay to ensure compliance with minimum rates when the above changes commence on 1 July 2018. It is also important for employers whose employees are covered by an existing enterprise agreement to review the actual rates of pay paid to these employees. Employers are required to ensure that agreement covered employees are paid no less than the equivalent base rate of pay that would be payable under the underlying modern award following the minimum rate of pay increase in all modern awards.

Annual Wage Review 2017-18 [2018] FWCFB 3500