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Australian Senate Standing Committee for the Scrutiny of Bills - Scrutiny Digests |
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Purpose
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This bill seeks to amend the Fair Work Act 2009 and related
legislation to improve the workplace relations framework.
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Portfolio
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Employment and Workplace Relations
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Introduced
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House of Representatives on 27 October 2022
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1.93 Item 222 of Part 3 of Schedule 1 to the bill seeks to insert proposed paragraph 40(1)(ba) into existing section 40 of the Building and Construction Industry (Improving Productivity) Act 2016 (BCIIP Act). Section 40 currently allows the Federal Safety Commissioner (FSC) to delegate all or any of their powers and functions to Federal Safety Officers, members of the Senior Executive Service (SES) or a person prescribed by the rules. Proposed paragraph 40(1)(ba) provides that the FSC may also delegate all or any of their powers and functions to an APS employee whose duties relate to the powers and functions of the FSC. The committee notes that the FSC's role has a number of regulatory and administrative functions, including administering the Accreditation Workplace Health and Safety Scheme.[74]
1.94 The committee has consistently drawn attention to legislation that allows the delegation of administrative powers to a relatively large class of persons, with little or no specificity as to their qualifications or attributes. Generally, the committee prefers to see a limit set either on the scope of powers that might be delegated, or on the categories of people to whom those powers might be delegated. The committee's preference is that delegates be confined to the holders of nominated offices or to members of the SES. Where broad delegations are provided for, the committee considers that an explanation of why these are considered necessary should be included in the explanatory memorandum.
1.95 In this instance, the explanatory memorandum seeks to justify the broad delegations power on the grounds that proposed paragraph 40(1)(ab) would preserve the FSC's current delegation powers:
The FSC can further delegate their functions or powers to APS employees engaged for the purposes of the Office of the FSC because of a transitional provision of the BCI C&T Act [Building and Construction Industry (Consequential and Transitional Provisions) Act 2016] preserving a regulation made under the Fair Work (Building Industry) Act 2012. Item 317 would repeal the BCI C&T Act. As such, this provision would ensure the FSC's current delegation powers are preserved, while avoiding convoluted drafting and enhancing transparency concerning the ability of the FSC to delegate their powers.[75]
1.96 While noting this advice, the committee does not consider that consistency with existing provisions is, of itself, sufficient justification for allowing the broad delegation of administrative powers and functions. From a scrutiny perspective, the committee continues to have concerns given the breadth of the power in proposed paragraph 40(1)(ab) to delegate any or all of the FSC's functions and powers to employees below the SES level. Further, the committee is concerned that the FSC may delegate these functions any APS employee whose duties relate to the powers or functions of the FSC.
1.97 In relation to the broad class of people to whom functions and powers may be delegated under proposed paragraph 40(1)(b), the explanatory memorandum states that:
It is anticipated that powers would be delegated to Executive Level APS officers engaged in the Office of the FSC, who the FSC considers possess the appropriate training, qualifications, skills or experience to exercise the decision-making powers and / or carry out the administrative functions. This provision would also ensure the FSC is well-placed to delegate decisions arising under the Accreditation Scheme Rules to appropriate staff of the Office of the FSC if any conflicts of interest arise. The Office of the FSC would continue to ensure delegates are provided with policy and procedural guidance to assist in appropriate decision-making.[76]
1.98 The committee welcomes this advice but considers that it would be more appropriate if the bill included a requirement that the FSC is satisfied that the person has the appropriate training, qualifications or experience to appropriately exercise the delegated power or function.
1.99 In light of the above, the committee requests the minister's detailed advice as to whether the bill can be amended to:
• provide some legislative guidance as to the scope of powers that might be delegated, or the categories of people to whom those powers might be delegated; or
• at a minimum, require that the Federal Safety Commissioner, when making a delegation under proposed paragraph 40(1)(ab), must be satisfied that the person has the appropriate training, qualifications or experience to appropriately exercise the delegated power or function.
1.100 The bill seeks to introduce several provisions which provide immunity from civil liability. These provisions are set out in item 303 and subitem 323(3) of Part 3 of Schedule 1 to the bill. Part 3 of Schedule 1 would amend the BCIIP Act to abolish the Australian Building and Construction Commission (ABCC) and provide transitional arrangements, including to transfer the responsibility for the ABCC's ongoing civil court proceedings to the Fair Work Ombudsman (FWO).
1.101 Section 118 of the BCIIP Act currently provides protection from civil proceedings for the Australian Building and Construction (ABC) Commissioner in circumstances where a person suffered loss, damage or injury as a result of an act or omission committed in good faith and without negligence by a person referred to in subsection 118(2) while that person was executing powers or functions under the BCIIP Act. Item 303 would transfer this immunity to the FSC.
1.102 In addition, item 323 would substitute the FWO for the ABC Commissioner or an ABC Inspector as party to any civil proceedings pending in court immediately prior to the commencement of Division 1 of Part 3.[78] Subitem 323(3) provides that the FWO, a Fair Work Inspector, consultants and staff members of the Office of the FWO and any persons assisting the FWO[79] are protected from civil liability in relation to anything done, or omitted to be done, in good faith and without negligence in relation to ongoing civil court proceedings.[80]
1.103 The immunities provided for under item 303 and subitem 323(3) would remove any common law right to bring an action to enforce legal rights (for example, a claim of defamation), unless a lack of good faith can be shown. The committee notes that in the context of judicial review, bad faith is said to imply the lack of an honest or genuine attempt to undertake a task. Proving that a person has not engaged in good faith will therefore involve personal attack on the honesty of a decision-maker. As such the courts have taken the position that bad faith can only be shown in very limited circumstances.
1.104 The committee expects that if a bill seeks to provide immunity from civil liability, particularly where such immunity could affect individual rights, this should be soundly justified within the explanatory materials for the bill. In relation to the immunity provided under subitem 323(3), the explanatory memorandum states that:
The item would additionally provide the FWO, staff of the Office of the FWO, a person assisting or engaged as a consultant to the FWO (under section 698 or 699 of the FW Act), and FW Inspectors protection from liability for conduct in good faith in relation to BCIIP Act matters as designated officials under s 118 of the BCIIP Act, as there is no equivalent protection in the FW Act. This would preserve the status quo in relation to all proceedings, ensuring that officials in the Office of the FWO have the appropriate protection for carrying out their regulatory functions.[81]
1.105 In relation to the transfer of the existing immunity in section 118 to the FSC, the explanatory memorandum states that item 303 would confer transitional functions necessary to facilitate the orderly and efficient winding up of the ABCC.[82]
1.106 While noting the above advice, the committee does not generally consider that consistency with existing provisions is, of itself, sufficient justification for provisions that confer immunity from liability, particularly where such immunity could affect individual rights. The committee therefore remains concerned that the immunity conferred by item 303 and subitem 323(3) is overly broad, particularly given that the effect of these clauses is that affected persons will have their right to bring an action to enforce their legal rights limited to situations where a lack of good faith is shown.
1.107 In light of the above, the committee requests the minister's detailed advice as to why it is considered necessary and appropriate to confer immunity from liability on the Australian Building and Construction Commissioner, the Fair Work Ombudsman (FWO), a Fair Work Inspector, consultants and staff members of the Office of the FWO and any persons assisting the FWO.
1.108 Item 393 of Part 8 of Schedule 1 to the bill seeks to insert proposed section 527F into the BCIIP Act to provide that an 'aggrieved person' may make an application for the FWC to deal with a sexual harassment dispute. Proposed subsection 527H(1) provides that an application must be accompanied by the fee, if any, that is prescribed in the regulations. Proposed paragraphs 527H(2)(a) and (b) provide that the regulations may prescribe the application fee, or the method for indexing the fee.
1.109 The committee has longstanding scrutiny concerns regarding provisions which allow fees to be calculated within delegated legislation where the bill contains no cap on the maximum fee amount, or any information or guidance as to how the fee will be calculated. The committee expects that any proposal to include fees within delegated legislation should be justified within the explanatory materials for the bill.
1.110 In this instance, the explanatory memorandum states that fees imposed under proposed section 527H will not amount to a tax.[84] While welcoming this advice, the committee considers that it would be more appropriate to include this as a requirement on the face of the bill. In this regard, the committee notes the advice set out in the Office of Parliamentary Counsel Drafting Direction 3.6 which states that:
AGS has advised that it is inherent in the concept of a 'fee' that the liability does not amount to taxation. However, it is quite common to put such a provision in anyway to avoid confusion and to emphasise the point that we are dealing with fees and not taxes. AGS has expressed the view that such a provision is useful as it may warn administrators that there is some limit on the level and type of fee which may be imposed.[85]
1.111 In light of the above, the committee requests the minister's advice as to whether the bill can be amended to provide high-level guidance regarding how the application fee in proposed subsection 527H(1) will be calculated, including, at a minimum, a provision stating that the fee must not be such as to amount to taxation.
1.112 Item 393 of Part 8 of Schedule 1 to the bill inserts proposed Part 3-5A into the Fair Work Act 2009 (Fair Work Act) which merges the stop sexual harassment order jurisdiction in existing Part 6-4B with a new prohibition on sexual harassment. Proposed Part 3-5A would allow a worker who has been bullied or sexually harassed at work to apply to the FWC for an order to stop the bullying or sexual harassment. Proposed sections 527N, 527P and 527Q would, respectively, permit the Chief of the Defence Force, the Director‑General of Security and the Director-General of the Australian Secret Intelligence Service (ASIS) to declare by legislative instrument, with the approval of the Minister, that some or all of the stop sexual harassment order provisions do not apply in relation to specified activities, or persons who carry out work for the Director‑General of Security or the Director‑General of ASIS.
1.113 The committee's view is that significant matters should be included in primary legislation unless a sound justification for the use of delegated legislation is provided. Broad powers providing for exemptions to be made to restrict access to remedies are one such matter. Further, the committee expects that the inclusion of broad discretionary powers should be justified in the explanatory memorandum and that guidance or criteria in relation to the exercise of the power should be included within the primary legislation.
1.114 The committee notes that, in this instance, there is no guidance or criteria on the face of the bill or in the explanatory memorandum as to how or when these powers should be exercised. The explanatory memorandum merely states that:
Clause 527N is modelled on section 789FJ of the FW [Fair Work] Act. It would provide for the Chief of the Defence Force to declare by legislative instrument, if the Minister approves, that some or all of the stop sexual harassment order provisions do not apply in relation to a specified activity. This is consistent with the existing stop sexual harassment order jurisdiction.[87]
1.115 Similar explanations are provided in relation to proposed sections 527P and 527Q.
1.116 The committee notes that existing sections 789FJ, 789FK and 789FL provide similar discretionary powers for the Chief of the Defence Force, Director-General of Security or the Director‑General of ASIS.[88] The statement of compatibility with human rights for the Fair Work Amendment Act 2013, which introduced these provisions as part of the FWC's anti-bullying jurisdiction, states that:
These amendments align with the existing framework for exemptions under the WHS Act, which reflects the sensitive nature of the work that is undertaken by Australia’s defence and security personnel. Declarations issued by the Chief of Defence Force, Director-General of Security and the Director-General of ASIS will be in the form of legislative instruments and will be subject to scrutiny by both Houses of Parliament. Such declarations can also only be made with the approval of the Minister for Employment and Workplace Relations. These safeguards will ensure that such declarations are subject to appropriate scrutiny. To the extent that these amendments reduce access to FWC orders under Part 6-4B, they are necessary to ensure that the workplace bullying measures do not interfere with Australia’s defence, national security or covert international law enforcement activity, and achieve that legitimate objective in a proportionate and reasonable way.[89]
1.117 The committee acknowledges the above advice about the need for exemptions to the stop sexual harassment order regime for defence, security and Australian Federal Police operations. However, the committee is concerned about the use of delegated legislation to provide for such exemptions, particularly in circumstances where there is no guidance on the face of the bill as to how or when these powers should be exercised. In this regard, the committee notes that delegated legislation is not subject to the same level of parliamentary scrutiny as amendments to primary legislation.
1.118 In addition, the committee does not accept that consistency with existing provisions is a sufficient justification for providing the Chief of the Defence Force, the Director‑General of Security and the Director-General of ASIS with broad discretionary powers to create exemptions to the stop sexual harassment order regime by legislative instrument. While acknowledging the importance of Australia's security and defence interests, it is unclear to the committee why at least high‑level guidance cannot be included within the bill in relation to the exercise of the broad discretionary powers under proposed sections 527N, 527P and 527Q. For example, it may be appropriate to include criteria which the Chief of the Defence Force, the Director‑General of Security and the Director-General of ASIS must have regard to before making a declaration that some or all of the stop sexual harassment order provisions do not apply. The committee is concerned that without guidance on the face of the bill as to how these powers may be exercised it would be possible for broad‑ranging exemptions to be made which undermine the stop sexual harassment order framework. The committee also considers that it would have been helpful if information setting out the possible circumstances in which a declaration may be made had been included in the explanatory memorandum to the bill.
1.119 The committee requests the minister's detailed advice regarding:
• why it is considered necessary and appropriate for the Chief of the Defence Force, the Director-General of Security and the Director-General of the Australian Secret Intelligence Service to be provided with broad powers under proposed sections 527N, 527P and 527Q to declare by legislative instrument that some or all of the stop sexual harassment order provisions do not apply; and
• whether the bill can be amended to provide at least high-level guidance regarding the exercise of these powers on the face of the primary legislation.
1.120 Item 509 of Part 14 of Schedule 1 to the bill seeks to repeal section 188 of the Fair Work Act and insert a new section 188 dealing with requirements for the FWC to be satisfied that an enterprise agreement has been genuinely agreed to by employees. Proposed subsection 188B(1) provides that the FWC must make a statement of principles containing guidance for employers on how to ensure their employees have genuinely agreed to an enterprise agreement. The explanatory memorandum explains that:
The Statement of Principles will guide parties as to how the FWC will consider particular issues when determining whether the proposed enterprise agreement has been 'genuinely agreed'. These scenarios could include issues such as whether bargaining genuinely occurred prior to voting and whether employee organisation bargaining representatives were appropriately involved in bargaining.[91]
1.121 Proposed subsection 188B(4) provides that the statement of principles is a non-disallowable legislative instrument.
1.122 The committee notes that disallowance is the primary means by which the Parliament exercises control over the legislative power that it has delegated to the executive. Exempting an instrument from disallowance therefore has significant implications for parliamentary scrutiny. In June 2021, the Senate acknowledged these implications and resolved that delegated legislation should be subject to disallowance unless there are exceptional circumstances, and any claim that circumstances justify such an exemption will be subject to rigorous scrutiny, with the expectation that the claim will only be justified in rare cases.[92]
1.123 The Senate's resolution is consistent with concerns about the inappropriate exemption of delegated legislation from disallowance expressed by this committee on a number of occasions, including most recently in its 2021 review of the Biosecurity Act 2015,[93] and by the Senate Standing Committee for the Scrutiny of Delegated Legislation in its inquiry into the exemption of delegated legislation from parliamentary oversight.[94]
1.124 The committee will therefore have significant scrutiny concerns where a bill includes powers to make delegated legislation which is not subject to parliamentary disallowance. The committee expects that any exemption of delegated legislation from the usual disallowance process should be fully justified in the explanatory memorandum. In this instance, the explanatory memorandum states:
The statement would not create new rights or obligations for employers and employees but would be taken into account by the FWC when determining whether an enterprise agreement has been genuinely agreed. The statement is intended to assist parties in moving from more prescriptive pre-approval requirements to the principles-based approach to genuine agreement proposed by these amendments. Making the statement would therefore be divorced from the broader political process and largely explanatory and facilitative (i.e. directed at assisting persons to comply with the new provisions). The statement would be independent of Parliament and not require additional Parliamentary scrutiny.[95]
1.125 While noting this advice, the committee does not consider the fact that an instrument is intended to be explanatory and facilitative to be a sufficient justification for excluding parliamentary disallowance. Rather, exemptions from disallowance are only justified in exceptional circumstances. It is unclear to the committee what exceptional circumstances justify the exemption from disallowance for the statement of principles.
1.126 The committee requests the minister's detailed advice as to:
• the exceptional circumstances that are said to justify exempting the statement of principles made under proposed subsection 188B(1) from the usual parliamentary disallowance process; and
• whether the bill could be amended to provide that the statement of principles is subject to disallowance to ensure that they receive appropriate parliamentary oversight.
[73] Schedule 1, Part 3, item 222, proposed paragraph 40(1)(ba). The committee draws senators' attention to this provision pursuant to Senate Standing Order 24(1)(a)(ii).
[74] See BCIIP Act, section 38.
[75] Explanatory memorandum, p. 32.
[76] Explanatory memorandum, p. 32.
[77] Schedule 1, Part 3, item 303, proposed section 118 and subitem 323(3). The committee draws senators' attention to these provisions pursuant to Senate Standing Order 24(1)(a)(i).
[78] Division 1 of Part 3 would commence the day after the bill receives Royal Assent.
[79] Defined in section 698 of the Fair Work Act.
[80] The day after the bill receives Royal Assent.
[81] Explanatory memorandum, p. 53.
[82] Explanatory memorandum, p. 41.
[83] Schedule 1, Part 8, item 393, clause 527H. The committee draws senators' attention to this provision pursuant to Senate Standing Order 24(1)(a)(iv).
[84] Explanatory memorandum, p. 87.
[85] Office of Parliamentary Counsel, Drafting Direction 3.6, October 2012, p. 38.
[86] Schedule 1, Part 8, item 393, proposed sections 527N, 527P and 527Q. The committee draws senators' attention to these provisions pursuant to Senate Standing Order 24(1)(a)(ii) and (iv).
[87] Explanatory memorandum, p. 89.
[88] The Sex Discrimination and Fair Work (Respect at Work) Amendment Act 2021 extended these provisions to the new stop sexual harassment order regime.
[89] Supplementary explanatory memorandum, p. 5.
[90] Schedule 1, Part 14, item 509, proposed subsection 188B(4). The committee draws senators' attention to this provision pursuant to Senate Standing Order 24(1)(a)(iv).
[91] Explanatory memorandum, p. 131.
[92] Senate resolution 53B. See Journals of the Senate, No. 101, 16 June 2021, pp. 3581–3582.
[93] Senate Standing Committee for the Scrutiny of Bills, Scrutiny Digest 7 of 2021, 12 May 2021, pp. 33–34.
[94] Senate Standing Committee for the Scrutiny of Delegated Legislation, Inquiry into the exemption of delegated legislation from parliamentary oversight: Interim report, December 2020; and Inquiry into the exemption of delegated legislation from parliamentary oversight: Final report, March 2021.
[95] Explanatory memorandum, p. 131.
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