Authors: Emily Haar, Andrew Stewart

As part of the recent Federal Budget, the Treasurer announced plans to ban “non-compete” clauses in employment contracts for employees earning below the high income threshold (currently $175,000 per annum) from 2027, to much media attention.  But with the finer details to be the subject of further consultation (and a Federal election on 3 May 2025 in the meantime), what might be on the horizon in this space?

In this episode of Employment Law for the Time Poor, Professor Andrew Stewart, Consultant, and Emily Haar, Partner, discuss the difference between “non compete clauses” and other post-employment restraint clauses, the policy, productivity, and research bases for reform, what these reforms might look like in practice, as well as some “real life” considerations for businesses to best protect their interests now.  

These discussions show that a one-size-fits-all approach to the protection of an employer’s interests in its client and customer relationships, if it ever were enough, will not cut it going forward if labour mobility significantly increases.  If businesses are less able to rely on contractual post-employment restraint clauses, alternative methods to otherwise protect confidential information and intellectual property, such as technology and a strong internal innovation culture, become ever more important. 

Employment Relations Podcast #41 – Understanding the Employment Law Considerations in Defence Export Controls

Authors: Emily Haar, Erin McCarthy, Travis Shueard

In this episode, we delve into the recent amendments to the Defence Trade Controls Act 2012 (Cth) and explore the implications for employment law and anti-discrimination issues.  Emily Haar is joined by Erin McCarthy and Travis Shueard to discuss how these legislative changes impact businesses in the defence industry – which is defined more widely than you may initially think!

The legislative grace period before penalties apply ends on 1 March 2025, such that now is the time for businesses to assess whether these changes will apply to them, and if so, what impact that will have on their workforce planning, both for current and future employees. 

For more insights on these changes and the equivalent US legislation see:

• https://piperalderman.com.au/insight/aukus-itar-export-control-reform-and-the-australian-defence-industry/
• https://piperalderman.com.au/insight/itar-101-fundamentals-and-practice/

To never miss an episode, subscribe via your preferred podcasting application:

• Apple Podcasts
• Spotify
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·         If you use a different podcast app you can subscribe to the podcast by copying and pasting  http://piperalderman.libsyn.com/rss in to the RSS feed

 

Employment Relations Podcast #40 – Understanding the Australian Right to Disconnect

Authors: Emily Haar, Lucie Lawrence-Wall

The “right to disconnect” is commencing for most national systems employers on 26 August 2024 (small businesses have a further 12 months to get ready).  Does your organisation understand what this “right” actually is, and how it could impact your operations?

In this episode of Piper Alderman’s Employment Law for the Time Poor Podcast, Partner Emily Haar and Senior Associate Lucie Lawrence-Wall discuss the international position and the “availability creep” concerns the right to disconnect is designed to address.  They work through what the new provisions involve, including consequential changes to Modern Awards, as well as discussing some of the practical implications the new “right” may (or may not) for your workplace.   

The right to disconnect is not the only “Closing Loopholes” change that commences on 26 August 2024.  For more insights see our previous episodes and insights here: https://piperalderman.com.au/insight/employment-relations-podcast-37-closing-loopholes-no-2-considering-complexities/ and  https://piperalderman.com.au/insight/closing-the-rest-of-the-loopholes-final-tranche-of-fair-work-act-amendments-passes-but-with-some-significant-changes/

The United States is planning to heavily restrict the use of non-compete clauses in employment contracts, and the Australian Government has released an issues paper discussing the subject in the Australian context. In this episode of Employment Law for the Time Poor, Emily Haar, Prof. Andrew Stewart and Dustin Grant discuss the current state of the law on post-employment restraints, what proposals for limitations on such restraints could look like, and what employers can do now to best protect their interests. .

In April 2024, the US Federal Trade Commission (FTC) voted to ban non-compete clauses in employment contracts, for employees other than “senior executives”, being anyone earning more than $151,164USD per year and who are in a “policy-making position”. In the FTC’s view, this ban will help both employees and employers by promoting competition, wages growth and innovation. It is worth noting this ban is currently subject to several legal challenges, which will determine whether it ultimately comes into effect, and in what form. Several US States (with the most notable being California) have similar bans in place already, for employment contracts within those states.

The Issues Paper [1] recently released by the Australian Government was commissioned in August 2023 as part of a broader policy consideration of the Government’s “intent to investigate non-compete clauses”. Whilst the FTC’s ban might have caused more headlines outside of employment law news websites, the issue has long been a matter of keen interest for Andrew Leigh, the current Assistant Minister for Employment, and Assistant Minister for Competition.

What are restraints of trade?

First, it is important to clarify what is meant by a “restraint of trade”; an umbrella term for several types of contractual terms that can be included in employment contracts. The Issues Paper defines these categories or ‘types’ of restraints to include:

1.      Non-compete – clauses that restrict a former employee from working for a competitor or establishing a competing business;

2.      Non-solicitation – clauses that restrict a former employee from ‘soliciting’ other workers, or clients, of the employer to switch to the employee’s new business; and

3.      Non-disclosure – clauses that seek to protect confidential or sensitive information, such as unique processes, technologies or strategies of the employer.

The law in Australia

As the law in Australia currently stands, the issue is dealt with by common law (other than NSW which has the Restraints of Trade Act 1976 (NSW)).  The underlying position is that all restraints of trade are presumed to be unenforceable and contrary to the public interest, unless the party relying on the clause can prove that they are “reasonably necessary to protect the legitimate interests of the employer”. [2]

However, practically, where an employer seeks to enforce a contractual non-compete term, engaging in potentially uncertain litigation is often not commercially viable for an employee. So the real impact of restraint clauses may be their deterrent or chilling effect:  even if not always enforced by employers, or potentially invalid, they may still have the desired effect on employees.

The Competition Review’s Issues Paper

Ultimately, the Issues Paper highlights 3 key “issues” related to restraints; the “chilling effect” such clauses have on worker mobility, particularly in lower-income groups, the high cost of litigation and relying on common law which causes confusion to both workers and business, and the economic consequences caused by hampering growth, competition and innovation.

At this stage, we can only speculate as to what any potential ban or limitation in Australia may look like, as the Government is still in its consultation phase. A number of potential reforms are discussed in the podcast episode.

What can your business do now?

Regardless of whether we see significant reform in this area, when it comes to protecting an organisation’s confidential information, client connections, and existing staffing mix, prevention is always better than a cure. Properly protecting confidential information through technology, training and up-to-date workplace policies, and ensuring your workplace is one where staff do not necessarily want to look to greener pastures elsewhere, will have a greater impact than solely seeking to rely on restraints after they have already left.

If your business uses post-employment restraint clauses in its template employment contracts, it is a good idea to have these regularly reviewed to ensure they have the appropriate scope and application to your business, along with your policies to ensure they provide the required protection.

You can contact Piper Alderman’s Employment Relations team for specific advice on your needs.

[1] Non-competes and other restraints: understanding the impacts on jobs, business and productivity – The Competition Review Taskforce, April 2024

[2] Herbert Morris Ltd v Saxelby [1916] 1 AC 688

One of the few constants in life and business is change.  Come 1 January 2025, a significant shift will take place for national system employers when criminal wage theft provisions come into effect because of changes in the Closing Loopholes Reforms.  But what does “wage theft” mean, and in what circumstances will criminal prosecution occur?

In this episode of Piper Alderman’s Employment Law for the Time Poor Podcast, Partners Emily Haar, Principal Chris Hartigan, and Senior Associate Jack Bourke discuss:

• The differences between civil underpayments and criminal wage theft;
• How the new regulatory model closely resembles the approach of the model work health and safety legislative provisions, requiring a more proactive response from organisations;
• When an underpayment is “intentional”;
• New ways to engage with regulators;
• Significant increases to civil penalties, and expansion of serious civil contraventions to include “reckless” conduct; and
• Wage compliance as a governance issue.    

For even more practical insights, on 20 February 2024, our Adelaide team presented on “wage theft” and civil underpayments.  Register to view a recording of the webinar here:  https://piperalderman.com.au/event/webinar-beat-the-clock-2024-substantive-law-underpayment-or-wage-theft-understanding-compliance-with-the-fair-work-act-criminalisation-and-the-proposed-safe-harbour-provision/

 

February 2024 has been a big month for legislative change, particularly in the contentious arena of industrial relations.  Seemingly out of nowhere, the Government announced it had done a deal on the remaining areas of proposed reform that did not make it into the Closing Loopholes Act 2023.  Adding to the surprise, the Closing Loopholes No. 2 Bill contained significant and substantial amendments to what had previously been proposed, including the much discussed “right to disconnect” provisions. 

In this episode of Employment Law for the Time Poor, join Professor Andrew Stewart, Consultant, and Emily Haar, Partner, as they discuss five key areas of reform:

• Casual employment, including definitions and “conversion” provisions;
• The “right to disconnect”;
• The definition of employment for the purposes of the Fair Work Act 2009 (Cth);
• Increases to civil penalties, particularly for civil underpayments; and
• The impact the new intractable bargaining determination provisions may have on bargaining strategy. 

Further written insights relating to the full complement of Closing Loopholes No. 2 reforms will be published in coming days, available at https://piperalderman.com.au/insight/.  Likewise, we will be hosting a webinar on 5 March 2024 to discuss the reforms.  Register via our website at: https://piperalderman.com.au/eventcategory/national-employment-relations-seminar-series/. 

For more analysis on the earlier iterations of “Closing Loopholes” see: 

• https://piperalderman.com.au/insight/the-closing-loopholes-bill-brings-more-challenges-for-employers/
• https://piperalderman.com.au/insight/closing-some-loopholes-now-and-others-later-an-update-on-the-latest-fair-work-amendments/

 For even more practical insights, on 20 February 2024, our Adelaide team will present on “wage theft” and civil underpayments.  Register for the webinar here: https://piperalderman.com.au/event/webinar-beat-the-clock-2024-substantive-law-underpayment-or-wage-theft-understanding-compliance-with-the-fair-work-act-criminalisation-and-the-proposed-safe-harbour-provision/

Following the 2018 Boland Review into the model Work Health and Safety provisions, workplace psychosocial safety has squarely been on the policy agenda.  Combined with recent changes as a result of the Respect@Work Report, the clear policy position, and expectation of society, is one of employers taking responsibility and being accountable for having workplaces that are both physically and psychologically safe. 

In South Australia, its version of amendments to the Work Health and Safety regulations to deal with psychosocial safety commence on 25 December 2023, following similar legislative reform around Australia in each of the jurisdictions with the model Work Health and Safety laws.  Victoria is currently considering similar, though potentially more far-reaching, provisions.  

In this episode of the Podcast, Emily Haar and Emily Slaytor discuss what it means to have a workplace that is psychosocially safe, including what psychosocial hazards are, how to spot them and manage them, and what organisations need to do to both be compliant, but to also prove compliance in the event that a regulator takes interest.  Directors and senior executives in particular need to think about how they will ensure appropriate “due diligence” to comply with their duties as officers under work health and safety law. 

Some resources you may be interested in to explore this further include:

• 2018 Boland Review: https://www.safeworkaustralia.gov.au/law-and-regulation/model-whs-laws/review-model-whs-laws
• Respect@Work: https://www.respectatwork.gov.au/
• The Safe Work Australia Model Code of Practice:  https://www.safeworkaustralia.gov.au/doc/model-code-practice-managing-psychosocial-hazards-work
• The US Surgeon-General’s Framework for Workplace Mental Health and Wellbeing: https://www.hhs.gov/sites/default/files/workplace-mental-health-well-being.pdf
• Curtin University and the University of Sydney, ‘How work design shapes mental health in the Healthcare and Social Assistance industry,’ July 2023, https://8bd0f060-89c2-4f20-bced-abb2e8c5789f.usrfiles.com/ugd/4faa3e_a32fcac432d14fbaac489ab570648843.pdf

The recent High Court decision in Qantas v TWU [2023] HCA 27 focussed on the question of how the general protections in the Fair Work Act 2009 (Cth) work in circumstances where employees did not presently have particular workplace rights (in that case the right to take industrial action), but would have those rights in the future if not for the adverse action being taken. 

While that analysis has rightly been the subject of a lot of interest, the outcome in that case turned on the other key concept in general protections claims – the “reverse onus” where employers need to prove that an unlawful reason did not form a substantive part of their reason for taking the action.  In Qantas, it was apparent that there were clear and appropriate commercial reasons for taking the action that occurred.  The question for the Court at first instance was whether Qantas was able to discharge its burden.

In this episode of the Podcast, Emily Haar and Erin McCarthy discuss how legally-defensible decisions are best made, whether by a Board, the Executive, or others down the “decision-making chain”, drawing on a number of recent (and not so recent) cases in the general protections space, including Barclay, BHP Coal, Kodak, Claremont Coal, Australian Red Cross, Wong v NAB, and Serpanos.  Being intentional about the process, as well as what is considered, and what is documented, in making a decision will best protect employers in the case of a legal claim. 

In comments to the National Press Club on 31 August 2023, Industrial Relations Minister Tony Burke said that the Closing Loopholes Bill will address four key “pillars”: wage theft, casual conversion, labour hire, and “employee-like workers”, and that the Bill would not “reach into every workplace”.  While the Bill certainly deals with those four matters, there is so much more to unpack. 

In this special long-form episode of Employment Law for the Time Poor, join Professor Andrew Stewart and Emily Haar as they discuss the considerable proposed reforms presented by this Bill.  If you think your organisation will not be directly impacted, think again. 

The Bill includes quite complex reforms to the definition of employment, creates new jurisdictions for the Fair Work Commission to deal with non-employee disputes, creates new rights for workplace delegates, and significantly increases the civil penalties for underpayments (while also creating a criminal offence of “wage theft”).  

For additional detail on the Bill, view our Insight here: https://piperalderman.com.au/insight/the-closing-loopholes-bill-brings-more-challenges-for-employers/

Industrial manslaughter may soon be an offence in almost all Australian jurisdictions. Recent amendments in certain jurisdictions have also introduced the recommendation of the 2019 Boland Review to prohibit insurance and indemnities for WHS penalties.  In this episode of Employment Law for the Time Poor, join Emily Haar, Partner, and Joseph Hyde, Associate, for a review of the current status of these provisions, with a particular focus on the South Australian proposed industrial manslaughter legislation. 

With Labor governments having been recently elected in South Australia, New South Wales, as well as federally, the issue of industrial manslaughter is back on the agenda.

South Australia, New South Wales, and Tasmania are the only remaining States that have not yet expressly legislated for this offence. However, public consultation on South Australia’s draft Work Health and Safety (Industrial Manslaughter) Amendment Bill has finished, with the Government now considering the feedback that was provided. The recently elected NSW Labor Government had attempted to introduce industrial manslaughter legislation in 2021. While there is no current Bill before parliament, it is likely to be on the Parliamentary agenda.

At the Commonwealth level, the national model WHS laws are planned to be amended to include the offence of industrial manslaughter, following Australia's WHS ministers agreeing to the move in late February 2023.

The offence generally captures negligent or reckless conduct of a person conducting a business or undertaking (PCBU) or its officers that breaches health and safety duties and causes the death of a person to whom a duty was owed. However, the details of the offence vary slightly in each jurisdiction.

Jurisdiction

Law in force

Law being considered

Maximum penalties

Elements of offence

Prohibition against insurance

SA

 

✓

Body corporate: $15 million.

Individuals: 20 years

Would apply to officers or individuals acting as PCBUs who engage in reckless or grossly negligent conduct causing the death of an individual to whom a health and safety duty is owed.

Not presently included in Bill

Vic

✓

 

Body corporate: nearly $18.5 million. Individuals: 25 years imprisonment.

Negligent conduct by persons, including an employer and its officers, which breaches a duty and which  causes the death of an employee or member of the public

✓

Qld

✓

 

Body corporate: $14.375 million.

Individuals: 20 years imprisonment.

A PCBU or a senior officer’s conduct negligently causes the death of a worker. Includes where a worker is injured carrying out work and later dies.

X

WA

✓

 

Body corporate: $10 million.

Individuals: 20 years imprisonment and/or $5 million fine.

A PCBU engages in conduct that constitutes a failure to comply with their health and safety duty, knowing it is likely to cause the death or serious harm to another person, and causes the death of an individual.

Officers may also be charged but additional elements of the offences must be proven.

✓

NT

✓

 

Body corporate: just over $10.5 million.

Individuals: life imprisonment.

A PCBU or officer intentionally engages in conduct that breaches their health and safety duty and causes the death of an individual to whom that duty was owed, and is reckless or negligent about the conduct and causing the death of that individual.

X

ACT

✓

 

Body corporate: $16.5 million.

Individuals: 20 years imprisonment.

A PCBU or officer engages in conduct that breaches their health and safety duty and causes the death of an individual to whom that duty was owed, and is reckless or negligent about the conduct.

X

NSW

 

✓ (No current Bill before Parliament)

 

Note to Division 5 states:

“In certain circumstances, the death of a person at work may also constitute manslaughter under the Crimes Act 1900 and may be prosecuted under that Act. See section 18 of the Crimes Act 1900, which provides for the offence of manslaughter, and section 24 of that Act, which provides that the offence of manslaughter is punishable by imprisonment for 25 years.”

✓

Tas

 

No current provision

 

 

X

Cth

 

✓

Body corporate: $18 million. Individuals: 20 years imprisonment.

 

✓ (Commences on a date to be fixed by proclamation or otherwise 22 September 2023)

 

Victoria, Queensland, and the Northern Territory adopt a penalty unit system, meaning the maximum penalties will increase each year.

Tasmania is currently the only jurisdiction whose government has not expressed their intention to introduce the offence. There have been recent calls for Tasmania to introduce industrial manslaughter laws, on International Worker’s Memorial Day (28 April 2023), Unions called on the Parliament to commit to introducing the offence. Unions Tasmania secretary Jessica Munday says that "Tasmania is now out of step with the rest of Australia."

The prohibition of insurance and indemnities for work health and safety penalties was recommended in the Marie Boland Review of the Model WHS Laws published in February 2019, and also the Senate Inquiry into industrial deaths published in October 2018.

This prohibition has been implemented in the recent Work Health and Safety Amendment Act 2023 (Cth), as well as in NSW, Victoria and WA.