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


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


Shaky ground for ‘maximum term’ contracts? Full Bench paves the way for unfair dismissal claims

Key takeaway

A recent decision by the Full Bench of the Fair Work Commission has opened access to unfair dismissal laws for workers employed on successive, maximum term contracts. Maximum term or ‘outer limit’ contracts are contracts for a specific period of time which may also be terminated before the end of that period by the giving of notice.

The Full Bench in Khayam v Navitas [2017] FWCFB 5162 (Navitas) has determined that, in the context of a dismissal, the Fair Work Commission (FWC) should not simply look at the expiry of the most recent contract, but take into account the employment relationship as a whole. Where, for example, an employee has been engaged on a succession of contracts and is not offered a fresh contract due to performance issues, the termination of employment may now be seen to give access to the unfair dismissal regime.

However, importantly for employers, where the terms of a maximum term contract (written or otherwise) reflect a genuine agreement as to the conclusion of the employment relationship on expiry of the term, the employee will remain precluded from accessing the unfair dismissal jurisdiction.

The pre-Navitas landscape

Maximum term contracts have, until now, precluded employees from accessing unfair dismissal protections. This was because the termination of the employment on expiry of such a contract was not seen as a dismissal at the employer’s initiative, but rather one occurring due to the contract reaching its agreed expiration date. This form of employment and termination had been legitimised in cases such as Department of Justice v Lunn (2006) 158 IR 410) (Lunn).

Lunn concerned an employee of the Attorney-General’s Department who had been employed on five successive maximum term contracts between 1998 and 2005. The employee was told that her final contract would not be renewed or extended. The Full Bench decided that the termination of the employment should be considered only in the context of the last maximum term contract. The Full Bench then held that the employment had simply terminated due to the expiry of the last contract and this precluded the employee from accessing the unfair dismissal regime.

This case legitimised the ability of employers to not continue employment (by extending or renewing a contract), even where performance issues played a role in that decision. It is important to note that the Lunn decision was based on the unfair dismissal provisions of the old Workplace Relations Act 1996, although it has been followed numerous times by the FWC under the new legislation.

The decision of Navitas

The case of Navitas concerned an employee of an education provider engaged on successive, maximum term contracts between April 2012 and May 2016. At the conclusion of the latest employment contract, the employer determined not to provide the worker with further employment due to performance issues. The employee challenged that decision, but the FWC held that the termination was not an unfair dismissal. The employee appealed.

On appeal, the Full Bench considered a number of recent cases which had criticised the approach taken in Lunn and determined that the principles in Lunn where incorrect and did not apply to the Fair Work Act.

Rather than simply viewing the last maximum term employment contract in isolation, the Full Bench held that the proper approach was to view the dismissal in light of the entire employment relationship. That is to say, from when the period of employment with the organisation first commenced.

The primary focus of the FWC will now be whether there was a step or action on the part of the employer that was a principal contributing factor in the termination of the employment relationship.

The Full Bench referenced situations in which an employee is provided successive, maximum term contracts and an understanding arises between the employer and employee that a new contract will be forthcoming unless there is a performance or other issue. Such an example may give rise to an unfair dismissal claim if the employee is not offered a further contract.

Maximum term contracts must reflect a genuine agreement as to the conclusion of the employment contract and the employment relationship if the employer wishes to avoid an unfair dismissal claim.

Deliberate avoidance of the unfair dismissal provisions

The Full Bench also considered the operation of section 386(3) of the Fair Work Act. This anti-avoidance provision states that if an employee has been employed under a contract of employment for a specified period of time and a substantial purpose of that arrangement is to avoid the unfair dismissal regime, then the exemption from an unfair dismissal claim will not apply.

In Navitas the Full Bench agreed with the decision of the Commissioner that this provision had not been contravened by the employer. However, employers should remain wary that employees may also look to utilise this provision if their attempts to bring unfair dismissal claims are frustrated by successive, maximum term contracts.

Mutual Trust and Confidence – Dead and Buried!

In one of the most significant employment law decisions in decades, the High Court of Australia has today decided that a term of mutual trust and confidence should not be implied into all employment contracts.


Stephen Barker was made redundant by the Commonwealth Bank in 2009. Unfortunately, his redeployment process miscarried. He sued the Bank. He argued that the Bank’s failure to comply with its redeployment policy caused him to lose an opportunity to be redeployed. His claim was successful and he was awarded damages of $317,500.

At trial, the Federal Court held that the Bank’s failure to comply with its redeployment policy breached an implied term that parties will not, without reasonable cause, engage in conduct likely to destroy the relationship of trust and confidence that must exist between an employer and employee.

On appeal, a majority of a Full Court of the Federal Court (Jacobsen and Lander JJ, Jessup J dissenting) agreed that a term of mutual trust and confidence was implied by law into Mr Barker’s contract. However, that term was not breached by the Bank’s non-compliance with its redundancy policy. Instead, it was breached by the Bank not taking positive steps to consult with Mr Barker about alternative positions and not giving him an opportunity to apply for those positions.

High Court’s decision

In a unanimous decision (French CJ, Kiefel, Bell, Gageler and Keanne JJ), the High Court upheld the Bank’s appeal. The Court found that the implication of the term was “a step beyond the legitimate law-making function of the courts” and “should not be taken”1. The Court (in three separate judgments) considered the different bases on which terms can be implied in the contracts. All Justices agreed that it was not necessary to imply a term of mutual trust and confidence into Australian employment contracts.

All Justices adopted a cautious approach to the implication of terms and, when doing so, shied away from “complex policy considerations”2. Their Honours felt these considerations made the possible implication of such a term a matter more appropriate for the Parliament, rather than courts, to determine.


Employees, particularly those that do not have access to the unfair dismissal regime, will feel aggrieved. They may well ask – is it fair that we are subject to a “duty of good faith” to our employers, but they are not subject to a reciprocal duty towards us?

The answer to this question may well be – it’s not fair, but that does not make implication of the term a necessity. On that point, Mr Barker’s landmark case failed. Consequently, most employers will breath a sigh of relief.
1. French CJ, Bell and Keanne JJ, paragraph 1
2. French CJ, Bell and Keanne JJ, paragraph 40

Anti-bullying laws – preparing for the great unknown

The Fair Work Commission’s (FWC’s) new anti-bullying jurisdiction commences on 1 January 2014. On 20 November 2013, the FWC released a draft anti bullying Case Management Model and a draft Anti-bullying Benchbook for public comment. In this post we step through how the new laws might play out in practice once a complaint is made.

How will the FWC deal with anti-bullying applications?

The FWC is required to deal with an application promptly.  The steps are:

1. Preliminary assessment of the application

Anti-bullying applications will go through a case management process similar to the administrative process for unfair dismissal applications.  This process will involve FWC employees serving the employer with the application, even if the employer is not named as a respondent.  The FWC with also serve the application on all the persons named in the application, which may, for example, be a manager or another worker.

An employer should consider raising any jurisdictional objections in its response to the FWC (for example, that the conduct does not occur within a constitutionally covered business).

FWC staff will conduct a preliminary assessment of the application, much like a triage assessment, and make a recommendation to the Panel Head.  If appropriate, the Panel Head may hear and determine jurisdictional issues.

2. Mediation

In most cases the Panel Head will arrange for the application to be mediated by a FWC mediator.  This process is likely to be similar to unfair dismissal telephone conciliations, and will be conducted in private. 

At no stage will the FWC promote or recommend monetary payments to settle applications.  The FWC’s objective will be to resolve the issues so that constructive and cooperative relationships can be resumed.

While FWC mediation is voluntary, employers may consider that the best approach is to participate in these processes and try to resolve the matter prior to a formal hearing.

3. Allocation to a member

If the matter cannot be resolved, it will then be referred to a FWC member, who will conduct a preliminary conference to identify the issues to be resolved.  The FWC member may then conduct a mediation or list the matter for hearing. 

4. Hearing

At a hearing, the FWC will receive evidence and submissions from the parties.  Hearings will usually be public.

If the FWC makes an order that bullying stop and this order is breached by a party, that party could be exposed to a penalty of up to $10,200 if they are a person, or $51,000 if they are a corporation.

What happens if an application is lodged with the FWC while an internal grievance procedure is ongoing?

If the FWC proposes to make an order to stop bullying, it must take into account an employer’s internal grievance procedure in determining how to deal with the bullying application.  The draft Case Management Model states that information issued by the FWC relating to the anti-bullying jurisdiction will encourage prospective applicants to first raise issues in the workplace.

In practice, it may be that the FWC will try to avoid dealing with an application (whether by mediation or hearing) until the internal grievance procedure comes to an end.  This would be a sensible approach, as it is usually in the interests of all parties to resolve any bullying swiftly and within the workplace.