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HG News: Industrial and Employment Law - May 2009

Implications of the Fair Work Act in a Contracting Economy

It is plainly obvious that many of the changes introduced by the Fair Work Act 2009 and the related legislation will impose additional direct and indirect costs on employers in the federal industrial relations system.

The ALP industrial relations reform agenda was first announced more than two years ago, at a time when no one ever contemplated the ‘global financial crisis’ and the end of Australia’s economic boom was unimaginable. Given the current economic climate there are many who question whether Australian employers can now afford the changes that the new legislation will bring.

The Fair Work Act was passed earlier this year and will, for most practical purposes, commence operating in two phases from 1 July 2009. Some of the related legislation has already commenced and parts of the Act will commence as soon as 26 May, although none of the transitional legislation has actually passed through the parliament.

The award modernisation process began in March 2008. Otherwise, the first substantial phase, which includes new unfair dismissal rules, good faith bargaining requirements and the transfer of business provisions, will start on 1 July 2009. The balance, including the new “safety net” of minimum terms and conditions of employment, comprised of the National Employment Standards and Modern Awards, will start operating on 1 January 2010.

The purpose of this article is to examine some of the more significant changes that will impose additional burdens on employers.

National Employment Standards

The National Employment Standards will start operating on 1 January 2010 and will apply to all employees covered by the Act. They cannot be excluded by a modern award or enterprise agreement.

The NES contains some new entitlements for employees that will have an economic or administrative impact on employers:

  • Employees who are made redundant will be entitled to redundancy pay of between 4 and 16 weeks pay, depending on their length of service. This is the first time that many employees will have had a legislative entitlement to redundancy pay. Previously, only employees covered by an Award that contained redundancy pay requirements, or who were contractually entitled to a redundancy entitlement, were entitled to receive such a payment. If current economic circumstances continue into next year, the requirement for employers to pay redundancy pay could be a significant imposition on a business that may already be doing it tough.
  • Employers must pay employees who are completing jury service the difference between their base rate of pay for ordinary hours of work while on jury duty, and any amount paid to them for their jury service (for up to 10 days). While this entitlement may be familiar to some employers, it is a new legislative entitlement for many employees, and a new expense for their employers.
  • Employees with children under school age, or who care for children under 18 with a disability, can request a change in their working arrangements to assist with the care of that child. Employers can only refuse a request on “reasonable business grounds” which is not defined. Employers must, if they refuse a request, provide an employee with details of the reason for the refusal. Considering and responding to a request will have, at the least, a time “cost” for an employer. Accommodating a request could also have an economic cost for employers, such as setting up a home office so that an employee can work from home. However, the benefits of flexible arrangements may outweigh any costs if flexibility will help an employer retain, and attract talented staff, decrease absenteeism, and increase employee motivation and satisfaction.
  • Employees are currently, and will continue to be entitled to 12 months of unpaid parental leave until 1 January 2011, when paid parental leave will be available, if they meet the qualifying criteria in the Act. However, under the NES, an employee may request an extended period of a further 12 months unpaid parental leave. Again, a request can only be refused on “reasonable business rounds”. If refused, an employer must provide an employee with details of the reason for the refusal. Again, considering and responding to a request will have, at the least, a time “cost” for an employer. It could also see, for example, additional training costs incurred by an employer when the employee on parental leave returns to the business after up to a 2 year absence. However, the benefits of granting additional leave, which are similar to those discussed above interms of flexible work arrangements, might outweigh the costs.

Employers bound by an existing workplace agreement (including a wide range of instruments such as AWAs, Federal Collective Agreements, and State Collective Agreements now operating in the Federal system) in place on 1 January 2010, must review the agreement against the NES. If a term of the agreement is detrimental to an employee when compared to an NES entitlement, then the term of the agreement will not apply, instead, the NES entitlement will apply. The “no detriment” rule will be applied to an agreement on a “line-by-line” basis. This means that an employee’s entitlements may be a combination of the more advantageous provisions from both the agreement and the NES. Apart from any actual costs resulting from the imposition of new or additional paid entitlements, the transitional process will almost certainly impose additional administrative burdens on employers in determining, and then administering, relevant entitlements from 1 January 2010.

Modern Awards

Modern Awards are currently being developed by the Australian Industrial Relations Commission for commencement on 1 January 2010. They are designed to replace the thousands of Federal and State awards that are currently operating in the Federal system under the Work Choices reforms. Modern Awards will generally apply to industries or occupations, in much the same way that State based ‘common rule’ awards currently operate, rather than requiring employers to be bound as named “respondents” to awards the way in which Federal awards currently operate. They shall begin operation on 1 January 2010. Employers need to know which Modern Awards, if any, apply to them and their employees.

In drafting the Modern Awards the AIRC has had to bring together many varied Federal and State based awards, each of which contain their own minimum terms and conditions of employment, including wage
rates. Based on the Modern Awards that have been drafted to date, it appears that there will be an increase in minimum wages payable in some industries in some States. For example, Restaurant and Catering Australia claim that the current draft of the Hospitality Modern Award will result in wage increases of 8.5% in Queensland. The Australian Retailers Association claims that wages in the retail industry will increase under the applicable Modern Award by between 9.5% and 16.5%, depending on the State. Whether all employers face an increase in minimum wages payable, will depend on current minimum pay rates compared to those contained in any applicable Modern Award.

Except in relation to wage rates, Modern Awards (unlike the NES) will not override the provisions of a workplace agreement that is in operation on 1 January 2010. This means that employers must identify whether any Modern Award applies to them and their employees, and if so which, in order to determine the applicable base rates of pay. This will enable employers to ensure that their employees are being paid at least those rates.

There is some concern that Modern Awards will cover employees not previously covered by awards, including high income and managerial level employees. For example, a “miscellaneous” Modern Award is to be drafted as a “catch all” award. It will be designed to cover employees not covered by any other Modern Award and who perform work of a similar nature to that historically regulated by awards. The extent of its potential application is presently unclear. However, it has the potential to impose additional and otherwise unaccounted for costs on employers who employ workers who, not previously award regulated, become subject to the award safety net. It could, in particular, expose employers to significant liabilities for the underpayment of wages, in many cases regardless of the actual wage rates being paid.

It will be possible to exclude “high income employees” (defined in the Act) from the application of Modern Awards where, by agreement with employees, employers guarantee a level of annual remuneration above the “high income threshold” (the‘HIT’)(as prescribed by the Act from time to time). For now we understand that the ‘HIT’ will start out at $100,000 indexed for inflation from 1 July 2007, or exceeding $106,000 from 1 January 2010. Formal requirements must be met for the exclusion to be effective. We would expect that, in most cases, the exclusion will be applied through the terms of the applicable employment agreement.

Coverage of managerial or high income level employees under a Modern Award will give these employees access to the unfair dismissal regime, where they would otherwise be excluded because of their remuneration levels.

Termination of employment

From 1 July there will be significant changes to the unfair dismissal provisions that currently operate in the Federal industrial relations system.

At the moment, employees in that system who work for an employer with 100 employees or fewer and whose employment is terminated, have no access to the unfair dismissal jurisdiction. That exclusion will be abandoned from 1 July. Instead, employees who complete a “minimum period of employment” of either 6 or 12 months (depending on the size of their employer) and whose employment is terminated, will be able to make an unfair dismissal claim.

Some employers with fewer than 101 employees may have changed their performance management and termination processes (or in practical terms abandoned them altogether) when the current exclusion was introduced on 27 March 2006. However, these employers will, from 1 July have to ensure that they do not unfairly dismiss any employee. This means that any dismissal cannot be “harsh, unjust or unreasonable”, employers must have a valid reason for dismissal relating to an employee’s conduct or capacity and follow procedural fairness requirements such as giving employees an opportunity to respond to the reason, warning employees about unsatisfactory performance, and notifying employees of the reason for their dismissal. Ensuring that an employee is not unfairly dismissed may, subject to their current performance management and termination processes, add to the cost sub-101 employers will face in terminating employees.

In the current economic climate it is possible thatemployees whose employment is terminated will make an unfair dismissal claim, whether or not they have a good case for doing so, in the hope of obtaining a further payout from their employer. Defending such a claim will obviously require devotion of time to manage the claim, as well as payment of legal costs and money to settle the claim.

Currently, employees who are terminated for “genuine operational reasons” (eg on redundancy grounds) are excluded from making an unfair dismissal claim, regardless of the number of employees employed by the employer. From 1 July, some employees will be able to make an unfair dismissal claim if their dismissal was not on account of the “genuine redundancy” of their position. A dismissal will not be based on a genuine redundancy if it would have been reasonable in all of the circumstances to redeploy the employee within the employer’s business, or the business of an associated entity. This is a new requirement and what may have been a “genuine operational reason” will not necessarily be a “genuine redundancy”. Neither will a redundancy be considered “genuine” if the employer failed to comply with the requirements of an applicable Modern Award “to consult about the redundancy”.

If, from 1 July, an employer does not consider the redeployment of an employee whose position has become redundant, both within their business or that of an associated entity or, does not follow the consultation requirements from an applicable Modern Award, then the employee will be able to make an unfair dismissal claim against the employer (with the associated costs for the employer). For employers that are part of a wider group of companies, this requirement could be quite onerous. While not specified, it would be safe to assume that an employer need to be able to demonstrate that they properly considered all redeployment options within all relevant businesses, including by the production of relevant paperwork.

Transfer of business provisions

What is currently known as “transmission of business” will be known under the Act from 1 July as “transfer of business”. There are a number of significant changes associated with these new provisions. At the moment, where there is a transmission of business (such as the purchase of a business where the employees of that business are employed by the purchaser), it is generally the case that any industrial instruments that apply to the employees of the purchased business will only apply to those employees for a maximum of 12 months. The transferring instruments do not apply to existing employees of the purchaser or any employees hired by the purchaser after the transmission of business.

From 1 July, any industrial instrument that applies to employees in a transfer of business situation will not stop applying to those employees after 12 months. Instead, the industrial instrument will continue to apply to those employees until it is formally terminated or replaced by a new agreement. Any new employees employed after the purchase of the business will also be covered by the transferring industrial instrument if there is no other applicable enterprise agreement or Modern Award, and the new employee performs the same type of work as the transferring employees.

These new rules could significantly increase the wages costs for a purchaser of a business. The application of transferring instruments could mean the retention of business practices that may be uneconomic for the purchaser. It could also result in purchasers not offering ongoing employment to the employees of the business they purchase if the incoming employees bring with them “undesirable” industrial instruments of potentially indefinite application. It may be cheaper and less “hassle” to employ new employees who will not bring with them existing industrial coverage that may undermine the business objectives of the purchasing entity. In the current economic climate the new transfer of business provisions have the potential to operate counter-productively.

Enterprise agreements and good faith bargaining

From 1 July, employers wanting to make any enterprise agreements with their employees will be required to bargain in “good faith”. This means that they must:

  • attend and participate in meetings at reasonable times;
  • disclose relevant information in a timely manner;
  • respond to proposals made by another party in a timely fashion;
  • give genuine consideration to the needs of the other parties and provide reasons for their responses; and
  • refrain from capricious or unfair conduct, or conduct that undermines freedom of association or collective bargaining.

These new requirements may be quite onerous and labour intensive to meet, particularly for smaller businesses that do not have a dedicated HR professional to oversee the process.

From 1 January 2010, all enterprise agreements will be assessed against the “BOOT” (better off overall test), rather than the current NDT (no disadvantage test). The NDT requires that a workplace agreement not result, on balance, in a reduction in the overall terms and conditions of employment of the employees whose employment is subject to the agreement, when compared to the applicable reference instrument. In contrast, the BOOT requires that each employee be ‘better off overall’ if the enterprise agreement applied to the employee, rather than the applicable Modern Award.

There is uncertainty as to how the BOOT will be applied in practice – for every employee or for each class or category of employee. While the Act says “every employee”, government publications say that the BOOT will not look at each individual employee’s circumstances. Further, the BOOT appears to impose a positive obligation on employers to ensure that employees are actually better off under the agreement, rather than not being disadvantaged when considered from an overall perspective. We will have to wait and see how the BOOT will be applied in practice.

Summary

The current economic climate is not an ideal climate within which to move into a more tightly regulated industrial relations system. Nevertheless, the new system is upon us. Clearly it will present all kinds of challenges for business, when many businesses are focussed on little more than survival.

Courts Act to Protect Business Interests

In two recent decisions, Courts have protected the business interests of employers by awarding damages against former employees who misused confidential information and intellectual property during, or after the end of their employment. In one case, damages were awarded in the amount of $212,000.

Worsening economic conditions may see an increase in this type of action by employers seeking to protect their business from any threat. In order to succeed in many of these types of claims, employers must have appropriate and enforceable employment contracts in place to protect, for example, their confidential information and intellectual property. Depending on the nature of a business, a restraint of trade clause preventing employees from competing with their employer and soliciting their clients after the end of their employment, may also be appropriate.

Even with employment contracts in place the Courts will carefully consider what, if anything, an employee has done with their employer’s (or former employer’s) confidential information or intellectual property. If they have done nothing more than, say, email documents to themselves while still working for their employer, then they may be found not to have breached their employment contract. Ultimately the outcome in any matter will depend on all of the factual circumstances including, in many cases, the precise wording of the applicable employment contract.

Below are a few recent cases where this issue was examined.

Luxottica Retail Australia v Grant & Ors

In this case, Luxottica runs the OPSM optometry business. Between March 2005 and 2 September 2008, Mrs Janet Grant was employed by Luxottica as an optometrist. Mrs Grant’s husband was also employed by Luxottica until 29 April 2008 when he resigned to take up a position with Specsavers Pty Ltd (a competitor to OPSM).

In April 2008, Mrs Grant approached Specsavers to express interest in working for it. She was offered a position on 25 August 2008. While she accepted the offer the following day (26 August), she did not immediately resign from her employment with Luxottica.

On 27 August 2008, Mrs Grant forwarded 23 emails from her work computer to her home email address. Included in these emails were 4 emails and attachments over which Luxottica claimed copyright. Mrs Grant forwarded one of these 4 emails to her husband. Luxottica claimed that, in sending these emails to herself and her husband, Mrs Grant infringed Luxottica’s copyright and breached her contract of employment.

Mrs Grant said that she sent the documents to her home email address for her own personal use. She did not believe that they were documents that would benefit her in her new job with Specsavers. In forwarding one of the emails to her husband, Mrs Grant thought it would assist him to improve his ability to coach employees (the email attached a guide that related to coaching employees to convert sales).

On 1 September 2008 Mrs Grant gave notice to Luxottica that she was resigning from her employment. The following day, a Luxottica employee inspected Mrs Grant’s emails and saw the emails that Mrs Grant had sent from her work computer to her home email address. Luxottica terminated Mrs Grant’s employment and escorted her from its premises.

Action taken by Luxottica

Luxottica commenced proceedings against Mrs Grant on 4 September 2008. It obtained orders restraining Mrs Grant from altering, deleting or disposing of computer files containing or derived from non-public information about Luxottica’s affairs or business.

On the first day of trial, Mrs Grant offered to give all hard-copy documents to her solicitors and delete all electronic copies of the documents. Luxottica accepted that it suffered no loss arising from Mrs Grant’s actions, and that Mrs Grant, her husband and Specsavers received no profit. It says this was because it was able to “nip matters in the bud” by acting quickly to obtain an appropriate injunction to prevent use or destruction of the emails.

Given this, Luxottica did not seek to maintain any claim for damages, other than nominal damages. The only other issue was whether Luxottica was entitled to additional damages for infringement of copyright under the Copyright Act.

Decision of the Court

The Court found that by simply forwarding emails to her home computer at a time she was still employed by Luxottica, Mrs Grant did not use or disclose, or attempt to use or disclose, ‘confidential information’ as defined in her employment contract.

While she may have sent them with a view to their later use or disclosure, there was nothing in her simply forwarding these documents to her home email address that amounted to an attempt to use or disclose the documents. Also, her conduct did not breach any confidentiality in the information contained in the documents.

However, Mrs Grant’s forwarding of an email to her husband was either a disclosure of the document or an attempt to disclose the document to him. It contained confidential information and the Court found that she breached her employment contract. Accordingly, Luxottica was entitled to nominal damages of $10 against Mrs Grant for the breach of her contract.

The Court decided not to make an additional award of damages for the infringement of Luxottica’s copyright. The Court had regard to its finding that Mrs Grant was not conscious of any wrongdoing, she did not attempt to cover her tracks, and she did not derive any benefit from the infringement of Luxottica’s copyright. It did not consider that the interests of deterrence would warrant the award of additional damages. It noted that the commencement of proceedings against Mrs Grant would be likely to deter other employees from similar actions.

Dinte v Hales & Anor

In this case, Mr Dinte carried on a business called SkyComm, between May 1989 and September 2005. SkyComm sold radios, mobile telephones and other telecommunications and electronic equipment, together with related software. Motorola was a major supplier of product, for whom SkyComm acted as a “premium dealer” in South East Queensland. This dealership was an important part of the SkyComm business.

Mr Hales was the Service Manager for SkyComm between 7 September 1998 and 25 May 2005. Mr Campbell was an installer between April 2001 and July 2004, and then again from August 2004 to September 2004. In June 2004, while both working for SkyComm, Mr Hales and Mr Campbell formed a partnership and commenced a business trading under the name of “DapComm”. The partnership ceased on 31 March 2007.

Mr Dinte had identified Mr Hales as his “heir apparent”, giving him unrestricted access to information concerning the business from early 2004. Mr Hales had full access to SkyComm’s confidential internal files relating to its customer base, as well as access to special Motorola software necessary to sell Motorola products. The Motorola products could not be sold without this software.

In May 2005, Mr Dinte discovered that Mr Hales and Mr Campbell were running DapComm. The mobile phone that Mr Dinte had provided to Mr Hales for use in connection with SkyComm business was listed on the letterhead of DapComm stationery. The telephone account for the mobile phone indicated that it was being used extensively by Mr Hales to communicate with Mr Campbell, after Mr Campbell had stopped working with SkyComm.

Within days of Mr Dinte discovering the existence of DapComm, Mr Hales resigned from SkyComm. After he left, a number of customer files were found to be missing.

Mr Dinte sold the SkyComm business in September 2005 and claimed a loss of profits and damages in respect of the sale of his business.

The amount paid for the business was less than would have otherwise been the case because of a substantial drop in profits in the 2005 financial year, due in part to the activities of Mr Hales and Mr Campbell. The purchaser’s normal method of valuing a business was to average the earnings of the business over the previous 3 years. However, because of the actions of Mr Hales and Mr Campbell, the purchaser offered to buy the SkyComm business based only on the 2005 financial year earnings.

Court decision

The Court found that, while working for SkyComm:

  • Mr Hales and Mr Campbell acted secretly to set up a business in competition with it, in circumstances where Mr Hales dishonestly diverted custom to DapComm through opportunities made available to him because of his employment with Mr Dinte.
  • Mr Hales canvassed existing customers of SkyComm or businesses whose custom SkyComm would have expected to secure.
  • Mr Hales placed orders for the benefit of DapComm with Mr Dinte’s suppliers and for the purpose of competing with Mr Dinte, without Mr Dinte’s knowledge.
  • Mr Hale secured benefits for DapComm as a result of SkyComm’s status as a premium Motorola dealer.

The Court said that these actions breached the duty of good faith and fidelity owed to SkyComm. Mr Hales and Mr Campbell were not entitled to use knowledge of opportunities or other advantages arising out of their employment to make a gain without SkyComm’s consent. They could not act to SkyComm’s detriment, by diverting clients to DapComm.

Damages awarded

Ultimately, the Court calculated damages on the sale of business in the amount of $145,000. It applied the same formula to calculate these damages as had been used by the purchaser to determine the sale price of the business. Damages for loss of profit were awarded at $67,500. The total ordered to be paid was $212,000. Both Mr Hales and Mr Campbell were jointly liable for the damages.

Super Tax on Overtime

New public ruling

The Australian Taxation Office has released a public ruling confirming that employers do not have to make compulsory superannuation contributions in respect of overtime payments.

The ATO accepts that it was never the intention of the law to require super contributions on overtime amounts. The controversy has been about the line between overtime earnings and other “non-overtime” earnings (called ordinary times earnings) which do require super contributions.

Whether the new ruling settles this controversy and provides clear guidance for employers is, of course, another question.

Background

The Superannuation Guarantee legislation requires employers to provide a minimum level of superannuation support for employees calculated by applying a contribution percentage (9%) to the employee’s ordinary times earnings. Prior to 1 July 2008 the percentage contribution rate was, in some cases, applied to amounts other than ordinary times earnings (such as an amount specified in award). However, employers must now use ordinary times earnings when calculating the required super guarantee contributions.

The ATO ruling (issued 13 May 2009) deals with the meaning of ordinary times earnings and salary and wages, for super guarantee purposes. The ruling (which runs 41 pages long) follows in the footsteps of the draft ruling issued in 2008 (45 pages). The new ruling overturns the Commissioner’s previous view that ordinary times earnings is determined by looking at the pattern of hours worked. This old view meant that regular overtime payments required super contributions, notwithstanding the policy that overtime should not be caught by the super guarantee rules. The Commissioner’s logic seemed to be that regular overtime could give rise to an implied variation of the employee’s standard working hours from those contained in a written agreement.

Practical implications

This change of heart is a good result for many employers. Ordinary times earnings (OTE) now means hours specified in an award or agreement. Work outside the span of those specified ordinary hours is not OTE and not subject to superannuation guarantee contributions. If ordinary times earnings are not specified in an award or written agreement they will be taken to be the ordinary, regular, customary or usual hours that an employee works.

The fine print

Hidden away in the ruling are a number of important statements. According to the ruling, the Commissioner expects payments for hours worked outside ordinary hours to be remunerated at a higher rate, and for there to be a “genuine” distinction between ordinary hours and other working hours. The Commissioner also seems to be saying that other payments that relate to overtime, such as commission, may in some cases not be subject to super guarantee obligations.

The ruling reinforces the importance of expert workplace relations advice when preparing or updating employment agreements. Employers should take particular care to ensure that all remuneration paid to employees is properly characterised (and documented) for superannuation guarantee purposes so that there are no unpleasant surprises when the Commissioner conducts his compliance audits.

Disability Discrimination and Publicly Accessible Buildings: More Certainty for the Property Industry

Both State and Federal legislation prohibit discrimination against people with disabilities. One of the most problematic areas of anti-discrimination law, from a compliance perspective, arises for owners, managers and developers of publicly accessible buildings, who are legally required to ensure equitable access for people with disabilities. Recent developments at the Federal level will assist stakeholders in the property industry to ensure compliance with that obligation.

Disability discrimination law is one of the few areas of discrimination law where positive action is required to ensure compliance. In this context, failure to make appropriate provision for disabled-access to buildings is unlawful and can result in complaints being made to both State and Federal regulators. Complaints can lead to orders for payment of compensation and for the performance of building modifications. Substantial expense can be involved, therefore, building owners, managers and developers cannot afford to disregard their legal obligations.

The discrimination jurisdictions are entirely complaint driven, and the legislation itself provides little guidance on how compliance can be achieved and complaints avoided. Last December the Federal Government tabled draft Disability (Access to Premises – Buildings) Standards in Parliament. If and when the Premises Standards become law, they will form the basis for compliance with the Commonwealth Disability Discrimination Act 1992 for new buildings or, where new building work is being undertaken, in existing buildings. The draft Premises Standards are currently being reviewed by a parliamentary standing committee, which is expected to publish its report within the next couple of months.

Purpose and scope of the Premises Standards

The stated purpose of the standards is to:

  • ensure achievable, equitable and cost-effective access to buildings for people with disabilities; and 
  • provide certainty to building certifiers, developers and managers, that buildings which comply with the Premises Standards do not breach the Act.

If and when the standards are adopted, it will be unlawful to contravene them. They will apply to:

  • new buildings; 
  • new work on existing buildings; and
  • certain existing public transport facilities.

The standards will not apply to existing buildings, unless they are undergoing new work or a change of use or classification. Where new work is concerned, they will only apply to the part that is being upgraded and the path of travel from the principal entrance to the new work. The standards will not apply to single dwellings such as detached houses, townhouses, villas or residential apartment building, but will apply to:

  • boarding houses, guest houses and backpacker accommodation;
  • residential parts of hotels, motels and schools; 
  • accommodation for the aged, children or people with a disability;
  • residential parts of detention centres; 
  • office buildings used for professional or commercial purposes;
  • shops or buildings used for retail or supply of  services to the public, such as restaurants, bars, kiosks, hairdressers, showrooms and service stations;
  • car parks and buildings used for storage or display of goods for sale by wholesale;
  • any building or laboratory used for processing, assembling, altering, repairing, packing or finishing goods for sale; and
  • public buildings such as, health care facilities, assembly buildings in schools, and aged care facilities.

The standards will impose obligations upon persons who have responsibility for and control over matters covered by the standards, including:

  • property developers and owners; 
  • building designers, certifiers and managers; 
  • builders; 
  • project managers; and 
  • operational staff.

They will regulate such things as:

  • pedestrian access to buildings and access ways within buildings;
  • the number of accessible car parking spaces in car parks;
  • signage (including braille and tactile signage), and hearing augmentation and tactile indicators;
  • the number and location of wheelchair seating spaces in assembly buildings;
  • access to swimming pools;
  • ramps; 
  • the size of lift cars and platforms; and
  • the number and accessibility of sanitary facilities.

The Act will continue to apply to those matters that are not covered by the standards (such as furniture, fit-out of buildings, and matters such as discriminatory actions of staff in refusing access to buildings or facilities).

Once in operation, the standards will apply from the time that an application for building approval is made to a building authority or, in circumstances where no application is necessary (ie if the work is being done on behalf of the Commonwealth or a State instrumentality), from the date of commencement of the work.

Concessions

The draft standards also provide for concessions which are additional to existing concessions in the Act. In particular, under the current regime it is not unlawful to discriminate against disabled persons (eg by failing or refusing to provide appropriate means of access to or use of premises), if compliance would result in unjustifiable hardship, or if the premises were designed so as to be inaccessible by persons with a disability.

The standards propose the following additional concessions:

  • Unjustifiable hardship: This is where it would be unreasonable to require full compliance, such that it would impose unjustifiable hardship.
  • Acts done under statutory authority: Where a person is acting in compliance with a law prescribed in the regulations, industrial instruments, awards or determinations made under the Act. 
  • Lessees: If the lessee of the building the subject of new works is the applicant, they are not required to upgrade the path of travel from the entrance of the building to the new work. This exception recognises that in most circumstances lessees are not responsible for common areas. 
  • Lift concession: Floor dimensions of lifts in existing buildings need not meet the new minimum requirements where new work is undertaken.
  • Toilet concession: Existing buildings undergoing new work that satisfy previous toilet standards for floor dimensions and layout need not meet the new minimum requirements.

Implications

As noted by a recent Parliamentary release, the standards represent a substantial departure from the current legislative obligations to provide nondiscriminatory access to publicly accessible buildings, which are “enforced on an ad hoc basis” and “driven by individual complaints”. The standards will introduce greater certainty for building owners, managerial staff and developers insofar as, if a new or renovated building complies with the standards, the unlawful discrimination provisions of the Act will not apply (to those matters covered by the standards). Also, as the standards will become part of the Building Code of Australia (BCA), developers and others who comply with the BCA will also meet the requirements of the Act. Whilst the standards have no relationship to equivalent State discrimination legislation (such as the Anti-Discrimination Act 1991 in Queensland), it can be expected that compliance with the standards will, in State discrimination jurisdictions, assist stakeholders in those jurisdictions also to manage their statutory obligations.

The proposed concessions will no doubt be welcomed by building owners, managers and developers, particularly where existing buildings are being renovated. However, the “unjustifiable hardship” concession might continue to present some difficulty in practical application. Decisions regarding unjustifiable hardship can only be made by a Court after a complaint has been made. Therefore, noncompliance with the standards will make persons responsible for buildings vulnerable to complaints under the Act. Even where a complaint is unsuccessful, respondents to the complaint may still find themselves significantly out of pocket as the result of seeking to manage it.

For further information please contact HopgoodGanim’s Industrial and Employment team.