Australia: New Regulatory Scrutiny For Employers: AHRC Takes On New Powers To Enforce Federal Positive Duty

On 12 December 2023, the Australian Human Rights Commission (AHRC) gained its enforcement powers in respect of the new Federal positive duty to prevent workplace sexual harassment and related unlawful conduct. This means that, for the first time, Australian employers are now subject to regulatory scrutiny from the AHRC in relation to their approach.

Refresher: What is the federal positive duty?

As you may be aware, the Sex Discrimination Act 1984 (Cth) was amended in December 2022 to impose a new positive duty on employers and persons conducting a business or undertaking (Duty Holders) to take reasonable and proportionate measures to eliminate, as far as possible, workplace sexual harassment and related unlawful conduct, including sex discrimination, sex-based harassment and workplaces that are hostile on the ground of sex, as well as related victimisation (the Positive Duty).

What new powers does the AHRC have?

After a 12 month 'grace period' for Duty Holders, the AHRC now has powers to enforce the duty. In line with the commencement of its powers, the AHRC has published a Compliance Policy, containing guidance on how it intends to discharge its new functions.

The AHRC now has powers to:

• inquire into a Duty Holder's compliance with the Positive Duty;
• ensure compliance with the Positive Duty (e.g. by issuing compliance notices, applying to Federal courts for an order to direct compliance with such notices, or entering into enforceable undertakings with Duty Holders);
• promote an understanding and acceptance, and public discussion, of the Positive Duty;
• undertake research and educational programs in relation to the Positive Duty;
• commence Court proceedings (in the Federal Court or the Federal Circuit and Family Court of Australia).

How might the AHRC use its powers?

Like many regulatory bodies, in exercising its enforcement functions, the AHRC must consider relevant matters including the size, nature and circumstances of the business / undertaking, its resources, and the practicability and cost of measures to eliminate the unlawful conduct. Otherwise, the AHRC has discretion in terms of how it carries out its functions.

It remains to be seen how the AHRC will approach its new role in practice, but the Compliance Policy gives us some clues. It states that: "The Commission will use a risk-based, intelligence-led and data-driven approach to compliance and enforcement, focusing its resources on activities and inquiries that will provide the greatest impact for meaningful cultural change."

The AHRC has also confirmed that it will need to be "selective" in its activities and consider whether those activities are in the public interest.

This might suggest that the AHRC will be looking to first and foremost target businesses/industries with a high instance of sexual harassment or related unlawful conduct, and possibly focus on larger or more resourced employers where cultural change will have a significant impact, including by attracting broader public scrutiny and attention to this issue. Practically, the extent of the AHRC's regulatory activities will also be determined by its access to resources, which is currently unknown.

The Compliance Policy says that the AHRC will look to adopt a cooperative approach with Duty Holders and use "voluntary compliance measures" as its preferred method of enforcement. The less willing a Duty Holder is to cooperate, the more likely the AHRC will be to require regulatory interventions, ranging in seriousness from:

• Informal resolution, i.e. a commitment to undertake an agreed action;
• Administrative action, i.e. a compliance notice or enforceable undertaking; or
• Commencement of court proceedings (in the Federal Court or the Federal Circuit and Family Court of Australia).

How should your business prepare?

More than ever, the commencement of the AHRC's enforcement powers means this issue should be high on the agenda for employers, including for Boards, given the AHRC's recognition of this as a "Board level responsibility" and the existing Director due diligence obligations in respect of psychosocial hazards under work, health and safety laws.

Organisations that have implemented a holistic strategy to prevent workplace sexual harassment, including mechanisms to review and improve that strategy, will be best equipped to discharge the Positive Duty, and avoid regulatory intervention.

The breadth of the actions that can be required to discharge the Positive Duty means that a 'one size fits all' approach will not suffice, and instead, organisations need to consider adopting an approach which is tailored to the particular risk factors in their organisation.

If you would like any assistance from our team with readying your business, please do not hesitate to reach out to the authors.