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Journal

Acting for You, April 2022

by Catherine Maxwell FGIA FCG General Manager, Policy & Advocacy, Governance Institute of Australia

Respect@Work submission

Governance Institute has lodged a submission on Respect@Work and potential changes to federal government legislation around the issue of sexual harassment. The Australian Human Rights Commission released its landmark report in 2020, which set out 55 recommendations to reduce instances of sexual harassment in Australia. The Government is currently consulting on implementing some of the remaining recommendations.

Governance Institute expressed support for the Government and the Australian Human Rights Commission’s work to reduce sexual harassment. We made the following observations:

  • We recommended harmonisation of sexual harassment laws across jurisdictions and greater clarity regarding the laws.
  • We supported in principle, proposals to amend the Sex Discrimination Act to align it with existing work, health and safety legislation. This includes prohibiting the creation or facilitation of a hostile work environment on the basis of sex and introducing a positive duty on employers to take reasonable and proportionate measures to eliminate sexual harassment. However, we requested further clarification regarding the positive duty and its practical implications for companies and other organisations.
  • We reiterated that work culture is fundamental to reducing sexual harassment. This involves strong leadership from the top of organisations, which should flow onwards to all staff.
  • We supported a hybrid model for enforcing the positive duty. This model would address individual complaints through alternative dispute resolution mechanisms and the court system. It would address systemic complaints through a responsible regulator with powers to investigate a suspected contravention of the positive duty that is serious in nature, relates to a class or group of persons and cannot reasonably be expected to be resolved by dispute resolution.
  • We recommended that if the Government chooses to appoint a specialist regulator for sexual harassment it must be properly resourced and funded with qualified and trained staff, so that matters can be resolved quickly, efficiently and fairly.
  • We recommended that the responsible regulator’s powers in relation to sexual harassment should be limited to discrimination under the Sex Discrimination Act. For example, discrimination on the ground of sex, sex-based harassment and sexual harassment, not discrimination regulated by other legislation.
  • We did not support amending the Australian Human Rights Commission Act to allow representative bodies to commence representative actions in the Federal Court in relation to anti-discrimination matters.
  • We made the point that education, building capacity across industries and accreditation frameworks are important additional steps to addressing this issue and that preventative measures are preferable to the need for enforcement after the event.
  • In relation to the proposals relating to costs in sexual harassment matters, we recommended:
  • Any changes to sexual harassment legislation must integrate alternative dispute resolution mechanisms to reduce the number of matters escalating to court hearings.
  • Costs should follow a model whereby each party bears their own costs in the first instance, but the courts have discretion to make exemptions in the interests of justice. The courts should consider factors including: the financial circumstances of the parties, whether a party is wholly unsuccessful in the proceedings and/or whether a party made an offer in writing earlier to settle the matter.

Governance Institute will keep members informed on this consultation.

 

Sanctions Russia and Ukraine: What does they mean for Australian companies?

The Russia/Ukraine conflict can seem far away from Australia, but there are many ways that it can affect the management of Australian companies. This update focuses on three key issues and outlines actions companies can take.

  1. Avoiding sanctions breaches

The Australian Government has announced sanctions for Russia and for the Crimea, Donetsk and Luhansk regions of Ukraine. The sanctions come after Russia commenced a ground and air invasion of Ukraine in late February. The sanctions prohibit the exportation and importation of a range of key goods and services including:

  • products used for oil exploration
  • military/arms products
  • export of aluminium ores (including bauxite), alumina and related products to Russia
  • investment in publicly owned Russian banks (specified by DFAT), and
  • companies and individuals providing oil exploration or military services.

There are significant penalties for Australian companies or individuals that breach sanctions. A corporation can be fined $2.22 million or three times the value of the transaction. Individuals can be fined $555,000 or three times the value of the transaction or face imprisonment for up to 10 years.

There are a number of actions companies can take to avoid sanctions:

  • identify whether any of a company’s contractual counterparts, trading partners, financial institutions or other members of their supply chain appear on the consolidated list
  • identify any existing contracts or activities relating to Russia, Donetsk or Luhansk
  • carry out a review assessing exactly how the company’s products and services are being used in Russia, and
  • review the cancellation and force majeure provisions of the existing contracts.

Questions about sanctions compliance can be directed to the Australian Sanctions Office. It is also possibly to apply for an exemption or sanctions permit through the DFAT website.

The most recent sanctions for Russia will come into effect from 25 April, while the sanctions for the Donetsk and Luhansk regions of Ukraine will come into effect from March 28. The sanctions relating to the export of aluminium ores (including bauxite), alumina and related products to Russia came into effect on 20 March 2022.

 

  1. Managing reputation during the conflict

A further issue companies are considering during the conflict is whether to continue business activities in Russia. Federal Treasurer Josh Frydenburg recently called for superannuation funds to review their investment portfolios and consider moving investments outside of Russia. Australia’s two largest funds AustralianSuper and Australian Retirement Trust have both committed to selling their Russian investments. Australian Retirement Trust announced it will offload its portfolio of Russian equities and instructed its investment managers not to make any new investments in Russia, Ukraine or Belarus. The Australian surfwear company Rip Curl also announced recently that it will temporarily stop supplying its products to Russia. The company was acquired by the ASX-listed Kathmandu Group in 2019. Kathmandu has a network of distributors in Russia.

The decision on whether to cease operations in Russia is ultimately one for individual companies to consider. However, some key questions companies may consider include:

  • What possible risks could there be to the company as this conflict continues?
  • Could there be further Australian sanctions?
  • Could there be sanctions outside of Australia, which effect operations or investments in Russia?
  • How do shareholders, customers and stakeholders feel about the issue?

 

  1. Supporting workers during the conflict

A further issue to consider is how to assist affected workers. Australia’s largest gaming company Aristocrat Leisure recently announced that it will evacuate its 1000 staff in Ukraine following the Russian invasion. The company is assisting its workers to re-locate into Poland and cities further away from the conflict.

Some possible actions companies may consider in supporting affected workers include:

  • regular check-ins to ensure staff safety
  • paying staff salaries in stable currencies such as Euros or US dollars
  • assisting with relocation where possible
  • considering alternative payment options in case of cash flow issues with Ukrainian banks.

 

Submissions

Respect@work Consultation on legislative recommendations —18/03/2022

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