2023’s new laws, set to affect small businesses
The many transitions which occurred in 2022, such as the election of the Labor government, have led to a number of legislative changes which businesses and startups should be aware of in 2023.
Key Legislative Changes
- Commencement of Director Identification Numbers.
- Industrial relation reform which focuses on increasing wages.
- The passing of the Anti-Discrimination and Human Rights Legislation Amendments (Respect at work) Act 2022, which imposes duties upon an employer to proactively create a safe, equitable workspace free from sexual harassment and abuse.
- Increased family and Domestic Violence Leave.
- Tougher penalties for data breaches.
- Increased penalties and a tougher regime for Unfair Contract terms.
Director Identification Number
The Director Identification Number regime has now commenced. Company Directors who fail to apply for, or fraudulently provide a Director Identification Number, will be subject to penalties.
Industrial relation reform
The Fair Work Legislation Amendments (Secured Jobs, Better Pay) Act 2022 has led to significant changes in industrial relation laws. Many key changes include:
- Agreements covering multiple employees – employers can now be forced to bargain for agreements which cover multiple employees (such as third-party companies within supply chains), and the Fair Work Commission can make supported bargaining authorisations. Essentially, this change will enable multiple companies to jointly conduct negotiations, leading to greater workplace agreements, which will drive up wages and better working conditions, in comparison to relying upon award rates.
- Secrecy Clauses within contracts, which prohibit employees from discussing wages, are now prohibited.
- Job advertisements which advertise wages below the minimum wage are prohibited.
- Industrial action relating to multi-enterprise agreements – There is an obligation to attend a Fair Work Commission mediation or conciliation before taking protected industrial action.
- Flexible work requests – Employers are obligated to make genuine attempts to accommodate and consider requests for flexible working arrangements, and where these requests fail, employees may seek the intervention of the Fair Work Commission. Employers are required to give reasons for any refusal of a flexible working request.
The aim of this new legislation is to change the way in which businesses respond to sexual harassment and abuse within the workplace. Duties have also been imposed upon employers.
Essentially, businesses must proactively create a safe and equitable workspace, free of sexual harassment and abuse. This ‘proactive’ model replaces the previous ‘reactive’ model, which required an employee to file a complaint before any action or change was taken. Employers must proactively take steps to prevent harassing or abusive conduct from even happening, rather than responding to a claim made by an employee.
This positive duty to eliminate sexual harassment applies to employers and any person conducting a business or undertaking. Under this duty, the employer or person conducting a business or undertaking must take reasonable and proportionate measures to eliminate, as far as possible, conduct that includes:
- Sexual harassment;
- Harassment on the grounds of sex;
- Discrimination on the grounds of a person’s sex;
- Conduct that subjects a person to a hostile workplace environment on the ground of sex;
- Any acts of victimisation that relate to complaints, proceedings, assertions or allegations in relation to conduct of the above nature.
The Australian Human Rights Commission has also been given expanded investigative and enforcement power. Therefore, it is important for businesses to re-evaluate policies and procedures currently adopted in relation to Sexual Harassment.
Increased family and Domestic Violence Leave
Full time, part time and casual workers will be entitled to 10 days of paid family and domestic violence leave. This new entitlement replaces the existing entitlement of 5 days of unpaid family and domestic violence leave under the National Employment Standards. This entitlement will become available on:
- 1 February 2023 (for employees of non-small business employers, being 15 employees or more); or
- 1 August 2023 (for employees of small business employers, being 15 employees or less).
Tougher Penalties for Data Breaches
In light of the recent Medibank and Optus data breaches, the Federal government has introduced the Privacy Legislation Amendment (Enforcement and Other Measures) Bill 2022, which has increased the penalties which corporations can face for mishandling private user information and improperly protecting it from third parties, such as hackers.
The current $2.2 million penalty for serious or repeated data breaches has been increased to whichever is the greater of:
- $50 million; or
- Three times the value of any benefit obtained through the misuse of the information; or
- 30% of a company’s adjusted turnover in the relevant period.
Importantly, businesses which utilise private data must ensure that appropriate safeguards are in place.
Increased penalties and a tougher regime for Unfair Contract terms
Many changes have been made to the Competition and Consumer Act 2010 (Cth) and the Australian Consumer Law. Significantly, penalties have been increased for breaches of restrictive trade practices and consumer law provisions. These increased penalties also apply to unfair contract terms within business contracts.
The maximum penalty for a corporation has been increased to the greater of:
- $50 million; or
- Three times the value of the benefit; or
- 30% of a company’s adjusted turnover during the breach turnover period.
The regime for unfair contract terms has also become tougher, and now includes contracts which were not previously considered under the legislation.
The threshold for a ‘small business contract’ has been expanded and encompasses contracts where at least one party:
- Made the contract in the course of carrying on a business and at a time when they employed fewer than 100 persons; and/or
- Has a turnover for the party’s last income year ending at or before the time the contract is made, of less than $10 million.
The previous threshold encompassed contracts which required one party to have fewer then 20 employees and an upfront price payable of less than $300,000. Therefore, larger business contracts are now considered under the regime.
It is now important for business owners to consider whether any customers or suppliers fall within the expanded small business contract threshold and whether the contracts contain any potentially unfair terms.
If you require any assistance or advice in relation to the above legislative changes, contact us today.
Gabrielle El-Kazzi and Craig Higginbotham
20 January 2023