New legislation and the need for liability insurances
The last months of 2022 saw a number of new and revised laws that impact Australian businesses of all shapes and sizes passed. With some changes already taking effect, 2023 will see more come into play. Among these are industrial relations reforms, new workplace laws and changes to data privacy and contract legislation. That means increased liability risks for businesses, making having the right liability insurances in place a business imperative
Industrial relations reforms
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022 passed parliament on 2 December 2022 and received Royal Assent four days later. The new laws represent the most significant changes to Australia’s industrial relations system since the commencement of the Fair Work Act 2009 (Cth). While some employers will be affected more than others, the changes will have an impact across Australian workplaces. The amendments, which will come into effect in several stages, include:
- Removing secrecy over pay (effective as of 7 December 2022).
- Limiting the use of fixed-term contracts (effective as of 7 December 2022).
- Flexible working arrangements (effective from 7 June 2023).
- Multi-enterprise bargaining (effective on a date to be proclaimed but no later than 7 June 2023).
- Changes to enterprise bargaining (effective on a date to be proclaimed but no later than 7 June 2023).
- Termination of enterprise agreements (effective from 7 December 2022).
- Substantive equality (effective from 7 December 2022).
- Discrimination and sexual harassment (some elements effective from 7 December 2022, others from 7 March 2023).
- Small claims (effective from 1 July 2023).
- Job advertisements (effective from 7 December 2022).
Insurance note: Talk to your EBM Account Manager about Employment Practices Liability, D&O, Statutory Liability, Workers’ Compensation and Management Liability covers.
Respect@Work
The Anti-Discrimination and Human Rights Legislation Amendment (Respect at Work) Bill 2022 was passed on 28 November 2022 and given Royal Assent on 12 December 2022. The bill has a focus on workplace sexual harassment and aims to change how business leaders respond to sexual harassment and abuse in the workplace. All of the changes, except the Australian Human Rights Commission’s (AHRC) new enforcement and investigative powers, came into effect on 13 December 2022.
Key changes include:
- Positive duty to eliminate sexual harassment.
- Express prohibition on conduct that subjects a person to a hostile workplace environment on the grounds of sex.
- Expanded investigative and enforcement powers for the Australian Human Rights Commission (effective from 12 December 2023).
- Lowered threshold for finding of harassment on grounds of sex.
- Clarification that victimising conduct can form the basis of a civil action for unlawful discrimination as well as a criminal complaint.
- Amendment to timeframes for making a complaint under anti-discrimination legislation.
- Commonwealth public sector reporting to the Workplace Gender Equality Agency.
Insurance note: Talk to your EBM Account Manager about Employment Practices Liability, D&O, Statutory Liability and Management Liability covers.
Domestic violence leave
The new Fair Work Amendment (Paid Family and Domestic Violence Leave) Bill 2022 was introduced to Parliament on 28 July 2022 and was given Royal Assent on 9 November 2022.
The Bill amends the Fair Work Act 2009 (Cth) and the changes include:
- Entitlement to 10 days of paid family and domestic violence leave in each 12-month period in the National Employment Standards (replaces the current NES entitlement of five days’ unpaid FDVL in each 12-month period).
- Employees covered – expanding the categories of employees eligible to claim the paid FDVL to include casual employees.
- Expanded definition of ‘family and domestic violence’.
The leave allowance is effective from 1 February 2023, but small businesses have until 1 August 2023 to ensure their compliance with the new allowance.
Insurance note: Talk to your EBM Account Manager about Employment Practices Liability, D&O, Statutory Liability and Management Liability covers.
Data privacy
On 28 November 2022, the Privacy Legislation Amendment (Enforcement and Other Measures) Bill 2022 was passed by Parliament, greatly increasing the penalties for companies which fail to take adequate care of customer data. The amendments came into effect one day after Royal Assent was granted on 12 December 2022.
Changes include:
- Increased fine – the maximum penalties for serious or repeated privacy breaches have increased from the $2.22 million penalty to whichever is the greater of:
– $50 million
– three times the value of any benefit obtained through the misuse of information, or
– 30% of a company’s adjusted turnover (revenue) in the relevant period (breach turnover period). - Increased extraterritorial reach – to include all organisations and businesses that ‘carry on business in Australia’, whether or not they collect personal information directly from individuals in Australia.
- Increased available remedies (or what can be required of organisations by the OAIC).
- Increased information gathering powers – allowing the OAIC to request information and documents (and answer questions) extending beyond the organisation the subject of the relevant eligible data breach, i.e. to any other entity that may have information or documents relating to the other organisation’s eligible data breach.
- Increased sharing of information – allowing the OAIC to share and disclose information that is in the public interest.
Insurance note: Talk to your EBM Account Manager about Cyber Insurance, D&O, Statutory Liability and Management Liability covers.
Unfair contract laws
On 27 October 2022, the Treasury Laws Amendment (More Competition, Better Prices) Bill 2022 was passed and received Royal Assent on 9 November 2022. The new legislation makes it a contravention of the Australian Consumer Law (ACL) to include or give effect to unfair terms in standard form consumer or small business contracts.
The changes, which come into effect on 9 November 2023, include:
- Increased competition and consumer penalties – maximum penalties for anti-competitive conduct and contraventions of ACL by individuals will increase to $2.5 million, and for bodies corporate increase to the greater of:
– $50 million
– three times the value of the benefit obtained (if the court can determine the value), or
– 30% of adjusted turnover during the breach turnover period (if the court can’t determine the value of the benefit obtained). - Separate prohibitions (and penalties) for unfair contract terms.
- Expanded scope of unfair contract terms regime – to apply to any standard form contract with a ‘small business’ (definition expanded to capture entities with up to 100 employees or with up to $10m annual turnover).
Insurance note: Talk to your EBM Account Manager about D&O, Statutory Liability and Management Liability covers.
Businesses need to adapt their practices to meet legislative requirements. The penalties for breaking the law (whether unintentionally or otherwise) is often very steep, so it’s important that effective risk mitigation strategies are in place, including having the right liability insurances. Discuss your exposures with your EBM Account Manager so they can tailor an insurance package to meet your liability requirements.
