Third party harassment

Strong protection, but only in respect of sexual harassment

Third party harassment is not governed by the FWA but rather by the Sex Discrimination Act 1984 (Cth) (SDA). Recent amendments to the SDA strengthened protections for employees against sexual harassment by third parties (such as clients, customers, or contractors) in the workplace. The protections only relate to sexual harassment, not other types of unlawful harassment.

This means employers can be held vicariously liable if a third party (e.g., a customer or supplier) sexually harasses an employee in connection with work, unless the employer can show they took all reasonable steps to prevent it.

All types of harassment to be covered

The ERB introduces a requirement for employers to prevent harassment of their workers by third parties (covering not just sexual harassment, but all types of harassment under the Equality Act 2010).

The employer will be liable if a third party harasses an employee in the course of their employment with the employer, and the employer failed to take all reasonable steps to prevent the third party from doing so.

Possible lessons to be learned from Australia

Australian employers have been encouraged to move with the times by taking active measures to mitigate the risk of third party harassment. This includes identifying high-risk areas, including examining where employees interact with third parties (e.g., front desks, client meetings, off-site visits) and assessing employee vulnerability. Such steps may involve consideration of lone working, night shifts, or roles with power imbalances. Other steps to mitigate the risks of third party harassment include updating policies and training, considering environmental controls (such as security cameras, panic buttons, or buddy systems) and limiting exposure to solo interactions with third parties in potentially risky situations.

Employers in GB have already begun taking similar steps in connection with the positive duty to prevent sexual harassment, which came into force in October 2024 (see further below). They would be well advised to extend such steps to address all protected characteristics, so that they are prepared for when the requirement to prevent third party harassment proposed in the ERB takes effect.

The duty to prevent sexual harassment

Positive duty requiring employer to take all reasonable steps

The SDA imposes a new positive duty on employers to take reasonable and proportionate measures to eliminate, as far as possible, sexual harassment, sex-based harassment, hostile workplace environments on the ground of sex, and related acts of victimisation. This duty applies proactively, not just after an incident occurs.

An employer can only defend an allegation it is vicariously liable for unlawful sexual harassment by an employee or agent if it is established that the employer took ‘all reasonable steps’ to prevent the employee or agent from doing the act.

Strengthening the existing preventative duty to require all reasonable steps

The ERB proposes to strengthen the duty on employers to prevent sexual harassment at work by requiring them to take “all reasonable steps” to do so (as opposed to simply “reasonable steps”, as has been the case since the preventative duty came into force on 26 October 2024).

Regulations will set out examples of what could constitute "reasonable steps".

Possible lessons to be learned from Australia

The new and expanded positive duty imposed on employers to prevent sexual harassment at work has made it harder for employers in Australia to comply with their obligations. Sexual harassment claims are now harder to defend because plaintiffs also allege the employer has failed to comply with the positive duty, in addition to alleging unlawful sexual harassment.

The legislation does not prescribe examples of ‘all reasonable steps’ but Courts have held it is a high bar. There are no reported decisions of Courts in which an employer has successfully established a defence to vicarious liability on the basis it took ‘all reasonable steps’ to prevent the conduct occurring.

In GB, failure to comply with the preventative duty can lead to 25% uplift in compensation where an employee succeeds in a sexual harassment claim, and the Equality and Human Rights Commission can take enforcement action even in the absence of an employee claim. Extending the duty to require "all reasonable steps" will make it harder for employers to comply. While regulations to specify examples of reasonable steps may be helpful insofar as they provide clarity, it is as yet unclear how high they will set the bar and how they will take into account that what is reasonable will vary between employers, e.g. depending on their sector, size, and resources.

Sexual harassment and whistleblowing

Separate protections for employees who raise concerns about sexual harassment

Both the SDA and the FWA prohibit the taking of detrimental action against a person because they have raised a concern about sexual harassment. However, there are no specific whistleblower protections. In Australia, whistleblower protections are found under the Corporations Act 2001 (Cth). To be protected, the disclosure must relate to misconduct or an improper state of affairs in a company, such as breaches of the Corporations Act, fraud, bribery, or corruption, or conduct that poses a danger to the public or financial system. While it is possible that disclosures about sexual harassment could fall within Corporations Act whistleblower protections, it would be unusual.

Extending whistleblower protection specifically to cover sexual harassment disclosures

To qualify for whistleblower protection under the Public Interest Disclosure Act 1998 (PIDA), a worker who makes a disclosure must reasonably believe that they are acting in the public interest and that the disclosure tends to show a criminal offence, failure to comply with a legal obligation, miscarriage of justice, danger to health and safety, damage to the environment, or covering up wrongdoing in relation to one of those things.

A disclosure about sexual harassment could already be covered by the existing list of wrongdoings – for example, it could be a criminal offence, a failure to comply with a legal obligation, or a health and safety issue. However, the ERB will add sexual harassment to the list of wrongdoings expressly covered by PIDA.

Possible lessons to be learned from Australia

In Australia, employers taking disciplinary action against employees who have complained about sexual harassment against themselves or another person will often face claims of victimisation or unlawful retaliation. Such employees regularly allege there is a causal nexus between their complaint about sexual harassment and the subsequent disciplinary action.

In GB, providing express whistleblowing protection in respect of disclosures about sexual harassment may lead to an increase in whistleblowing detriment and dismissal claims from employees who are disciplined or dismissed after they have raised such concerns.

Employers in both jurisdictions can mitigate their risk by ensuring they have sound evidence of the need to take disciplinary action, clearly documenting the reasons for taking disciplinary action and following fair and lawful procedures when taking the action.

Protection where reason for dismissal is pregnancy / maternity

The FWA (and the SDA) prohibit dismissal of an employee because they are pregnant or because they have taken maternity leave. The legislation also requires an employer to consider flexible work arrangements for a person returning from parental leave (see below) – and failure to provide such arrangements will often constitute unlawful discrimination. However, there is no blanket prohibition on dismissing employees who are pregnant or who have taken maternity leave, as long as the reason for dismissal is not the fact of the pregnancy or maternity leave.

ERB to extend existing protections

It is already automatically unfair to dismiss an employee because they are pregnant or have taken / sought to take maternity leave, or other statutory family leave. Employees who are pregnant, or who are on or have recently returned from such leave also have priority rights to be offered suitable alternative vacancies in a redundancy situation.

The ERB will prohibit employers from dismissing an employee who is pregnant, is on maternity leave, or has returned from maternity leave within the past six months, except in certain specified circumstances (details of which are as yet unknown).

The ERB also includes a power for the government to make regulations extending equivalent protection to employees who are on or returning from other forms of family-related leave.

Possible lessons to be learned from Australia

Employers in both jurisdictions should exercise extra caution when taking any action (such as redundancy, dismissal or disciplinary action) which could prejudice a pregnant employee, an employee on family-related leave or an employee returning or recently returned from family-related leave. Even if the action is not itself unlawful, the employee may assume or allege the action is unlawfully connected with the employee’s pregnancy or family-related leave. While this limits an employer’s flexibility to manage its workforce, from a practical perspective, the employer is better off taking the additional care rather than inadvertently exposing itself to a claim.

A prohibition on dismissing pregnant employees / returning mothers will further limit GB employers' ability to manage their workforce – e.g. in particular if performance or redundancy dismissals are restricted. The level of risk and practical impact of this provision will depend on the breadth of circumstances in which dismissals remain permitted and the extent of any procedural requirements that will have to be followed.

Flexible working

Right to request in specified circumstances

Under the FWA, certain employees have a legal right to request flexible working arrangements and employers have specific obligations in how they must respond.

Full-time or part-time employees must have at least 12 months of continuous service before they can request flexible work arrangements. Casual employees must have worked regularly and systematically for 12 months and have a reasonable expectation of ongoing employment.

Employees can request flexible working arrangements if they are pregnant, are a parent or carer of a child of school age or younger, are a carer under the Carer Recognition Act 2010, have a disability, are 55 years or older, are experiencing family or domestic violence, or are supporting someone in their household experiencing family or domestic violence.

Employers must consult with employees about a request and respond in writing within 21 days.

Enhancing the right to request from day one

All employees have been able to make a flexible working request from day one of their employment since April 2024.

Employers can refuse a request if they have one of eight permitted business reasons for doing so (e.g. burden of additional costs, detrimental impact on performance, inability to reorganise work among existing staff, etc.) The employer must handle the request in a reasonable manner and base its decision on correct facts, but there is currently no requirement for the decision itself to be reasonable.

The ERB introduces a requirement for employers who wish to refuse a request to demonstrate that their refusal (for one of the eight permitted business reasons) is reasonable.

Possible lessons to be learned from Australia

The right to request flexible working arrangements imposes limitations on the flexibility of employers to manage their workforces. In both Australia and GB, employers can only refuse the request on certain business grounds, such as cost implications, impact on productivity or customer service, lack of capacity to change arrangements, and inability to recruit replacement staff. If refusing, the employer must provide detailed reasons and show they have genuinely considered the request. This includes specified consultation requirements. Employees in Australia can take their employer to the Fair Work Commission with disputes over requests for flexible working arrangements, while employees in GB can bring claims in the employment tribunal. The ERB's introduction of a reasonableness test for refusal of flexible working requests may lead to an increase in claims, although the impact of the change will depend on how strictly the tribunals interpret the reasonableness requirement.

Rights subject to minimum service requirement

Under the FWA, employees must have 12 months of continuous service before they are entitled to unpaid parental leave (the FWA does not distinguish between paternity and maternity leave). Casual employees are not entitled to parental leave. There is a separate government paid parental leave scheme, which is only available to employees who are taking unpaid parental leave under the FWA.

Rights to apply from day one

Statutory rights to paternity leave and unpaid parental leave (which are currently subject to continuous service requirements of six months and one year, respectively) will be made available from day one of employment. Eligibility for statutory paternity pay will remain subject to a six month continuous service requirement. Eligibility for statutory paternity leave and pay will thus be brought into line with that for statutory maternity leave and pay.

Possible lessons to be learned from Australia

Employers in both jurisdictions must take care to provide the parental leave and pay rights to which their employees are entitled. In GB, the ERB's expansion of access to paternity leave and unpaid parental leave will have limited impact (especially as eligibility for statutory paternity pay will remain subject to a six month continuous service requirement). However, employers will need to update their relevant family leave policies to reflect the changes.

Right to compassionate leave in range of circumstances

Under the FWA, all employees in Australia, including casuals, are entitled to compassionate leave (also known as bereavement leave). This is a ‘day one’ right. Compassionate leave is paid at the employee’s base rate of pay for full time or part time employees and unpaid for casual employees.

Employees can take compassionate leave if a member of their ‘immediate family’ (a defined term in the FWA) or household dies, or contracts or develops a life-threatening illness or injury. Compassionate leave is also available where a baby is stillborn in their immediate family or household or the employee or their current spouse/de facto partner has a miscarriage.

The entitlement is to two days leave per occasion. It can be taken as a single 2-day period, two separate 1-day periods, or other arrangements as agreed with the employer. It is not cumulative and is separate from sick/carer’s leave.

Employees must comply with certain notice and evidence requirements to support a claim to take compassionate leave.

Introduction of new right to bereavement leave

The only existing statutory right to time off work that is specifically intended to allow employees time to grieve the death of a loved one is the day one right to two weeks' parental bereavement leave following the death of a child under the age of 18 or a stillbirth. There is no equivalent right to time off following the death of an adult relative.

Under the ERB, an additional statutory right to at least one week of unpaid bereavement leave on the death of a close relative will be introduced, also as a day one right.

Many employers already provide some form of (paid or unpaid) compassionate leave on the death of a close relative. Since the new statutory right to bereavement leave will be unpaid, its introduction will have limited impact on employers.

Possible lessons to be learned from Australia

The Australian experience is that employees do not typically abuse or often take this entitlement. It is a low cost, low impact entitlement for employers. However, some confusion and distress can arise where an employee wishes to take compassionate leave for the death or life-threatening illness or injury of someone other than a member of their immediate family or household – for example, attending the funeral of a close friend or neighbour. Such employees would need to take annual leave or unpaid leave with the agreement of their employer. Employers should have clear policies which explain this.

As in Australia, employers in GB will need to take a sensitive approach when handling requests for time off following a bereavement which doesn't fall within the statutory right to leave, and should ensure they update their policies to reflect the new law and any more generous provision they may make. 

Gender equality action plans

Action towards specific targets required

Under the Workplace Gender Equality Act 2012 (Cth), 'large employers' (defined as organisations with 500 or more employees) must commit to measurable gender equality targets. They must select and work towards achieving or improving upon at least three target gender equality indicators, which include the gender composition of boards and the workforce, the gender pay gap, flexible working arrangements, support for parents and carers, workplace consultation on gender equality, and efforts to prevent and address sexual harassment. Large employers are already required to have policies or strategies addressing each of the gender equality indicators.

New requirement for action plans

Employers who are required to report on their gender pay gap (i.e. those with 250+ employees) will have to produce gender equality action plans alongside their gender pay gap report. Action plans will have to address what the employer is doing to address the gender pay gap and how it supports employees going through the menopause.

When submitting their gender pay gap reports to the official government reporting portal, employers will have to complete a form identifying which actions they are taking from a list of recommended actions. They will then be encouraged to provide further detail on their own website about the actions they have taken.

Possible lessons to be learned from Australia

Employers in Australia who fail to meet the requirements without reasonable excuse face being 'named and shamed' for non-compliance. The Workplace Gender Equality Agency (the Agency) names non-compliant employers on its website. Further, large employers will be required to comply with the targets scheme to obtain a certificate of compliance from the Agency. The certificate is a condition of an employer's eligibility to contract with the Australian government.

The Equality and Human Rights Commission is responsible for enforcement of gender pay gap reporting in GB, and it is anticipated that it will also take on the enforcement of the requirement to produce action plans. It is as yet unclear what such enforcement might look like.