Bonuses, pay rises at risk in sexual harassment overhaul

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Bonuses and pay rises could be withheld from employees and managers behaving poorly as part of an armoury of tactics bosses can use to prevent workplace sexual harassment and discrimination under landmark new workplace laws.

From December, employers must act on a positive duty to stamp out sexual assault, harassment and similar discriminatory behaviour – or risk being named and shamed – as part of changes recommended by former sex discrimination commissioner Kate Jenkins’ landmark Respect@Work report.

Former sex discrimination commissioner Kate Jenkins, on whose recommendations the new laws are based.Credit: Alex Ellinghausen

The laws were introduced by the Albanese government against a heightened focus on workplace sexual harassment, fuelled by numerous high-profile scandals in federal politics.

The changes were resisted by the former Coalition government, which questioned whether legislating a positive duty would add further complexity to workplace laws, given vicarious liability provisions already meant employers needed to prevent unlawful discrimination, while other laws required employers to ensure the health and safety of their workers.

The Human Rights Commission, charged with policing new positive-duty laws, has suggested workplaces offer pay boosts and gift vouchers to reward employees’ respectful behaviour.

The commission suggests sanctions for poor conduct could include blocking pay rises and bonuses, as well as suspension.

From December, employers must act on a positive duty to stamp out sexual assault and harassment.Credit: Belinda Pratten

“Incentives are used to influence behaviour in positive ways and to reward people who behave respectfully and foster a safe and respectful workplace. This may include financial and non-financial incentives and benefits,” the commission’s guidelines say.

In a further statement to this masthead, the commission said bonuses were “one way of ascribing value and importance to respectful behaviour in the workplace”.

“It can also operate negatively – people become ineligible for bonuses if they have been found to have engaged in substantiated acts of relevant unlawful conduct,” the statement reads, adding smaller inducements to promote engagement in workplace issues are commonplace.

Bonuses and pay rises could be withheld from employees and managers behaving poorly under new workplace laws.Credit: James Davies

“For example, offering a gift voucher prize for the best idea from workers about how to foster a safe and respectful culture in their workplace.”

Employers who fail to protect workers from sexual harassment can also be named under a new power given to the commission, which can investigate whether a company is complying, issue a compliance notice and apply to have that notice enforced by a court.

University of NSW associate professor Sue Williamson, an expert in workplace gender equality, backed the commission’s proposal, saying financial inducements were a valid way of changing behaviour.

“Altruism is a really good thing, but I don’t think it has gotten us far enough,” Williamson said. “The use of financial incentives is to give people a bit of a prompt apart from just doing the right thing because it’s the right thing to do.”

The Australian Institute of Company Directors has also backed tying pay packets to respectful behaviour, while a Diversity Council of Australia spokesperson agreed money had been used to “nudge” people in organisations towards greater inclusively.

Tony Wood, a senior partner in law firm Herbert Smith Freehills’ industrial relations team, likened it to the practice of withholding bonuses for serious injuries stemming from occupational health and safety breaches.

“If you look at workplace sexual harassment as a health and safety issue, you could well say, why not adopt a similar approach?” he said.

The Australian Chamber of Commerce and Industry’s director of workplace relations, Jessica Tinsley, warned that the government must ensure businesses, especially small businesses, have the resources to properly understand their obligations.

“We know that a positive duty to stamp out sexual harassment in the workplace already exists under work, health and safety laws. Employers will need assistance in understanding their overlapping obligations, or else this complexity will lead to lower compliance rates,” she said.

Katherine Berney, director of the National Women’s Safety Alliance, said the challenge would be making the intent of the legislation “real” to average workers.

“Your KPMGs of the world are going to be fine, but the problem is your laundromat out in [Sydney suburb] Punchbowl. How are workers going to understand that they have these protections?” she said, raising social media campaigns as an important avenue to reach people.

The legislation shifts the onus of preventing sexual harassment and other hostile behaviour from a complaints-based system to one where employers are obliged to be proactive.

In its extensive guidelines published ahead of the law taking effect, the commission says employers must uphold seven standards to comply with positive-duty requirements, including ensuring leaders are aware of their responsibilities, fostering a safe culture, appropriate risk management and ensuring support for staff.

Other examples of proving compliance suggested by the commission include calling out sexist commentary, providing bystander training and giving awards for positive conduct.

Bakers Delight was named as having breached Victoria’s positive-duty laws last year following a three-year investigation by that state’s Equal Opportunity and Human Rights Commission.

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