Seafarers and Other Legislation Amendment Bill 2016 - Commentary on Ministerial Responses [2017] AUSStaCSBSD 52 (15 February 2017)

• Seafarers and Other Legislation Amendment Bill 2016
• Trespass on personal rights and liberties—strict liability offences 2
• Insufficiently defined administrative powers—breadth of discretion3
• Merits review5

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Seafarers and Other Legislation Amendment Bill 2016

Purpose	This bill seeks to repeal the Occupational Health and Safety (Maritime Industry) Act 1993 and extend the Commonwealth Work Health and Safety Act 2011 to apply to the Seacare scheme
Portfolio	Employment
Introduced	House of Representatives on 13 October 2016
Bill status	Before the House of Representatives
Scrutiny principles	Standing Order 24(1)(a)(i), (ii) and (iii)

2.11 The committee dealt with this bill in Alert Digest No. 8 of 2016. The Minister responded to the committee's comments in a letter dated 6 February 2017. Set out below are extracts from the committee's initial scrutiny of the bill and the Minister's response followed by the committee's comments on the response. A copy of the letter is at Appendix 2.

Trespass on personal rights and liberties—strict liability offences ^[2]

Initial scrutiny – extract

2.12 Items 8, 9 and 176 introduce three new provisions which make it an offence for a person with certain notification obligations to omit to do an act and that omission breaches those requirements. Each offence is stated to be one of strict liability and subject to 20 penalty units. The explanatory memorandum provides no justification as to why the offences are subject to strict liability.

2.13 In a criminal law offence the proof of fault is usually a basic requirement. However, offences of strict liability remove the fault element that would otherwise apply. The committee expects the explanatory memorandum to provide a clear justification for any imposition of strict liability, including commenting whether the approach is consistent with the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers.

2.14 The committee seeks a detailed justification from the Minister for each proposed strict liability offence with reference to the principles set out in the Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers (at pp 22–25).

Minister's response

2.15 The Minister advised:

New subsection 94A(1) (Schedule 2, item 8) requires an employer to notify the Seacare Authority (and after the transition time, the Safety Rehabilitation and Compensation Commission (the SRCC)) of any changes to, or cancellation of, an insurance policy or membership of an indemnity association within 14 days. New subsections 94A(2) and 94A(3) create a strict liability offence for failure to comply with subsection 94A(1).
New subsection 95A(1) (Schedule 2, item 9) requires an employer who becomes aware that the employer's policy or membership is to be cancelled or terminated to notify each employee of that fact, as soon as practicable and before the policy or membership is cancelled or terminated. New subsections 95A(2) and 95A(3) create a strict liability offence for failure to comply with subsection 95A(1).
New section 95B (Schedule 2, item 9) requires an employer or an operator of an Australian registered vessel to display on board the vessel a certificate of insurance that complies with the requirements of subsection 95B(3) and an information statement that complies with the requirements of subsection 95B(4). New subsections 95B(5) and 95B(6) create a strict liability offence for failure to display this information.
The requirements are to comply with Australia's international obligations under the Maritime Labour Convention.
These offences arise in a regulatory context where an employer can reasonably be expected, because of his or her professional involvement, to know what the requirements of the law are. Employers will be placed on notice by the existence of the offences to actively ensure they are complying with and do not contravene the new subsections. The offences would not be punishable by imprisonment and would have a relatively low maximum penalty of 20 penalty units.
New section 106 requires employers to provide information to the SRCC to assist in the monitoring of work related injuries in the scheme and to Comcare to assist it to determine eligibility of claims against the safety net fund. It is a strict liability offence for an employer to fail to comply with the requirements without reasonable excuse.
These offences also arise in a regulatory context where strict liability is justified in the interest of ensuring the regulatory scheme is observed and the SRCC and Comcare are able to perform their functions.

Committee comment

2.16 The committee thanks the Minister for this response. The committee notes the Minister's advice that the offences arise in a regulatory context where the employer can reasonably be expected to know what the requirements of the law are; strict liability is justified in the interest of ensuring the regulatory scheme is observed; and the offences are not punishable by imprisonment and have a relatively low maximum penalty of 20 penalty units.

2.17 The committee requests that the key information provided by the Minister be included in the explanatory memorandum, noting the importance of these documents as a point of access to understanding the law and, if needed, as extrinsic material to assist with interpretation (see section 15AB of the Acts Interpretation Act 1901).

2.18 In light of the information provided, the committee makes no further comment on this matter.

Insufficiently defined administrative powers—breadth of discretion^[3]

Initial scrutiny – extract

2.19 Proposed new section 25M provides that the Safety, Rehabilitation and Compensation Commission may make a written instrument exempting the employment of certain employees on a particular vessel from the application of this proposed Act and the Seafarers Safety and Compensation Levies Act 2016 and the Seafarers Safety and Compensation Levies Collection Act 2016 (currently bills before Parliament). In deciding whether to make such an instrument the Commission must have regard to any matters prescribed by the legislative rules and any such other matters that the Commission considers relevant.

2.20 This is a broad discretionary power with no legislative guidance on how such decisions would be made. The explanatory memorandum does not explain why this provision is considered necessary and does not explain what type of matters the Commission would take into account in making such an instrument. There is also no requirement in the bill that legislative rules must be made setting out the matters the Commission must have regard to in exercising this discretionary power.

2.21 The committee seeks the Minister's advice as to why it is necessary to give the Commission the power to exempt the employment of people on particular vessels from the operation of the specified legislation (and what effect this would have on the employment of persons on those vessels). It also seeks the Minister's advice as to why the legislation does not set out the relevant considerations the Commission must have regard to in exercising this discretionary power or, at a minimum, provide that rules (subject to Parliamentary disallowance) are required to be made which specify the relevant matters the Commission must have regard to.

Minister's response

2.22 The Minister advised:

The Bill replaces the coverage provision in section 19 of the Seafarers Act and the current exemption provision in section 20A of that Act.
New section 25M mirrors the existing discretion of the Seacare Authority in section 20A of the Seafarers Act to exempt the employment of employees from the application of the Seafarers Act and associated levies. The opt-in and opt-out (exemption) provisions are intended to maintain the status quo for vessels covered by the scheme, without giving more or less power to any of the participants in the current scheme.
Section 20A currently operates to allow the Seacare Authority to declare vessels exempt from the scheme with an absolute discretion. There are no requirements in the Seafarers Act which direct how that discretion is exercised. The Seacare Authority has issued Exemption Guidelines (which are not a legislative instrument) to provide assistance to the industry on when an exemption may be appropriate and the factors to be taken into account by the Seacare Authority.
Exemption from the Seacare scheme means that seafarers covered by the exemption would fall under relevant state or territory, rather than the national workers' compensation insurance arrangements, reducing the need for employers to maintain two insurance policies because of uncertainty of coverage.
The amendments prohibit the Seacare Authority, and after passage of the Bill the SRCC, from acting in a way contrary to Australia's obligations under an international agreement. As a party to the Maritime Labour Convention, Australia is obliged to ensure that all seafarers have adequate compensation for injuries (see MLC Title 4, regulation 4.2). The Bill ensures that the views of the maritime industry stakeholders are taken into account by the SRCC in making exemptions through assistance provided to the SRCC by the Seacare Advisory Group (see new subparagraph 89RA(2)(a)(i)).
The Bill has improved on the current position by allowing for legislative rules to be made prescribing the matters to be taken into account by the SRCC when granting an exemption. These rules will be developed following further industry consultation and subject to parliamentary scrutiny through disallowance procedures.
The Bill ensures the SRCC has flexibility to grant an exemption where the circumstances require and enables the SRCC to take into account all relevant matters, subject to any guidance that is prescribed in the rules. To fetter that process would be to impose red tape on a system that is working well at this time and is largely replicated in Part IA of the amending Bill.

Committee comment

2.23 The committee thanks the Minister for this response. The committee notes the Minister's advice that proposed section 25M mirrors the existing absolute discretion of the Seacare Authority to declare vessels exempt from the scheme. The committee notes the Minister's advice that the Seacare Authority has issued Exemption Guidelines to provide assistance to the industry on when an exemption may be appropriate and the factors to be taken into account, but that this is not a legislative instrument. The committee also notes the Minister's advice that the bill has improved on the current position by allowing for legislative rules to be made prescribing the matters to be taken into account by the Safety Rehabilitation and Compensation Commission (SRCC) when granting an exemption and ensures the SRCC has the flexibility to grant an exemption and take into account all relevant matters, subject to any guidance prescribed in the rules. The committee notes the Minister's statement that to fetter that process would be to 'impose red tape on a system that is working well at this time'.

2.24 The fact that a provision already exists in legislation does not address the committee's scrutiny concerns regarding the provision in this bill. The committee's long-standing preference is that there be guidance in the primary legislation as to how broad discretionary powers are to be exercised. The committee considers that the power to exempt a vessel from the operation of the federal legislative framework regarding seafarers is a significant matter. While the SRCC must have regard to the matters prescribed by the legislative rules, there is no legal requirement that rules be in place before the provisions in the bill become operative.^[4]

2.25 The committee considers that the power to exempt a vessel and its employees from the operation of a federal legislative framework is a significant matter that should be subject to appropriate guidance in the primary legislation. While the committee appreciates that this power already exists, this does not alleviate the committee's scrutiny concerns in relation to the provision in this bill.

2.26 The committee considers it would be appropriate for at least high-level guidance about the exercise of the Safety Rehabilitation and Compensation Commission's (SRCC) power to exempt a vessel to be included in the primary legislation or, at a minimum, that there should be a positive duty on the Minister to make disallowable rules guiding the exercise of the SRCC's power.

2.27 The committee draws its scrutiny concerns to the attention of Senators and leaves to the Senate as a whole the appropriateness of the broad discretionary power of the SRCC to exempt vessels from the application of the federal legislative framework for seafarers.

2.28 The committee also draws this matter to the attention of the Senate Standing Committee on Regulations and Ordinances for information.

Merits review^[5]

Initial scrutiny – extract

2.29 Proposed new section 25R provides that an application for review of a decision by the Commission to make an instrument of exemption under proposed section 25M can be made to the Administrative Appeals Tribunal. However, an application can only be made if the decision to make an instrument of exemption was made following an application to the Commission by the owner of the vessel or the employer. If the Commission on its own initiative decides to make the exemption there is no right to seek merits review of that decision. No justification is provided in the explanatory memorandum as to why this is not subject to merits review.

2.30 The committee seeks the Minister's advice as to why the right to seek merits review of the Commission's decision to make an instrument exempting the employment of persons on a particular vessel is restricted when the Commission has made the instrument of exemption on its own motion.

Minister's response

2.31 The Minister advised:

The committee also seeks advice on why decisions of the SRCC to exempt an employee (or class of employees) from the coverage of the scheme are not subject to merits review by the Administrative Appeals Tribunal (AAT) where the SRCC's power is exercised on its own motion.
Exemptions are currently issued by the Seacare Authority and the decision is not reviewable by the AAT.
As noted above, the exemption helps remove uncertainty of coverage and reduces need for employers to take out two insurance policies (i.e. under the Seacare scheme and a relevant state or territory scheme). Allowing the SRCC to grant exemptions on its own motion enables it to respond quickly to any issues affecting coverage of the scheme and can reduce the administrative burden on employers. Section 25M provides that an exemption cannot be granted without taking into account the advice of members the Seacare Advisory Group who represent employers and employees in the industry. Any AAT review is likely to involve reconsideration of these processes already undertaken by the SRCC that would be unnecessarily time-consuming and costly to repeat on review.

Committee comment

2.32 The committee thanks the Minister for this response. The committee notes the Minister's advice that allowing the SRCC, on its own motion, to grant exemptions from the requirements of a number of pieces of legislation enables it to respond quickly to any issues affecting coverage of the scheme. The committee also notes the Minister's advice that any AAT review is likely to involve reconsideration of the processes already undertaken by the SRCC and it would be unnecessarily time-consuming and costly to repeat this process on review.

2.33 The committee notes that the purpose of merits review is to consider whether the original decision was the correct or preferable decision. In doing so a tribunal will reconsider the matter afresh. The committee does not consider that the fact that the tribunal would take time to undertake the review, and that there is a cost in doing so, is a sufficient basis on which to exclude merits review.

2.34 The committee draws its scrutiny concerns to the attention of Senators and leaves to the Senate as a whole the appropriateness of excluding merits review where the Safety Rehabilitation and Compensation Commission has, on its own motion, granted an exemption.

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[2] Schedule 2, items 8, 9 and 176.

[3] Schedule 2, item 84, proposed new section 25M.

[4] See Schedule 2, item 84, proposed subsection 25M(5).

[5] Schedule 2, item 84, proposed new section 25R.