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Sexual harassment warning businesses can’t afford to ignore

Australian businesses risk reputational damage as a major change comes into force under the Sex Discrimination Act. They’ve had 12 months to prepare but many are yet to get their house in order.

The new legal positive duty obligation which is now enforceable, requires businesses to proactively eliminate sexual harassment and sex discrimination in the workplace, not just respond when there’s a complaint. It’s a major shift and businesses that don’t comply risk court action and damage to their brand.

With a greater reliance on technology, this is a real minefield for businesses to navigate and business leaders themselves say they are unprepared.New data from the Australian Institute of Company Directors and the Australian Council of Superannuation Investors shows while 85 percent of ASX300 Directors acknowledge preventing workplace sexual harassment ranks high on their boards priority list, just 32 percent of female directors and 45 percent of men believe their organisation is prepared to meet new positive duty obligations. But these changes aren’t just for ASX listed companies. They affect all businesses and organisations regardless of their size or level of resources, from large companies with hundreds of employees to sole traders.

We have previously seen businesses forced to pay out millions in compensation and damages for sexual harassment when a compliant was upheld. That complaint no longer has to even be made. There’s no doubt some industries will struggle more than others, especially where casual sexism and harassment might be the norm like construction and retail. The 2022 National Sexual Harassment Survey showed workplace sexual harassment is more common in retail where 40 percent of workers had reported sexual harassment, while 29 percent of women in the building and construction industry have experienced sexual harassment at work. The change to positive duty will also mean an organisation has to eliminate sexual harassment and sex discrimination by third parties working on a construction site for example. Technology-facilitated sexual harassment is also adding another element, with unwelcome sexual conduct using digital technologies outside the workplace over social media, WhatsApp and Linkedin.

According to a recent US survey of women who are on LinkedIn at least once a week, over 90 percent said they received sexual advances, or inappropriate messages at least once, while almost one in four said these messages showed up daily or every other day. Many men seem to use the platform as a pseudo dating app, forcing women to abandon the site, missing out on crucial business connections.

Data from the Australian Human Rights Commission shows in the last five years, 33 percent people have been sexually harassed at work, but fewer than 18 percent made a formal complaint. While 40 percent of people who did make a formal report, said no changes occurred at their workplace as a result of that complaint. That complaint no longer needs to happen for businesses to be liable and they therefore cannot afford to take these changes lightly. The new legislation gives the Australian Human Rights Commission the power to monitor and enforce compliance of positive duty under the Sex Discrimination Act. 

We spend a third of our lives at work and we all deserve to be safe, feel respected, valued and given every opportunity to thrive. There is also a growing understanding that an unsafe and disrespectful workplace culture diminishes a businesses ability to attract and retain the best people. It reduces productivity and creates significant reputational and legal risks. An unsafe and disrespectful workplace also impacts the ability of businesses to attract customers and investors, a critical consideration with unemployment at its lowest and high staff shortages across many industries. We know culturally and racially marginalised workers, including migrant workers, are also more likely to experience a higher rate of sex discrimination and sexual harassment in the workplace. It’s imperative anyone in a leadership role understands these new positive duty obligations.

So what can businesses do?

Businesses of every size must make sure their leadership teams – whether that’s the board, people in charge of teams at every level or a sole trader making sure a contractor is safe – understand these new positive dirty obligations. Businesses need to consult with workers about sexual harassment in the workplace to help identify circumstances that might increase the risk of sexual harassment occurring. They need to review policies, practices and reporting and response systems to ensure they meet the positive duty compliance framework developed by the Australian Human Rights Commission.

Businesses need to consider measures that will eliminate sexual harassment and sex discrimination in the workplace.  They need to prepare a prevention and response plan. It’s not enough to just identify possible risks, businesses need to work out what and how they are going to prevent incidents and then the response to if they happen. Businesses should invest in education and training so all staff, including leaders,  know their obligations and to ensure everyone not only feels safe, but actually are safe.Its vital leaders are tuned in to the safety and wellbeing of their workforce. This new positive duty regime is to ensure that safety is a higher priority in Australian workplaces.

Positive duty under the Sex Discrimination Act 

In November 2022, the cornerstone recommendation of the Respect@Work Report – imposing a positive duty on employers and persons conducting a business or undertaking (‘PCBU’) to eliminate discriminatory conduct under the Sex Discrimination Act 1984 (Cth) – was finally implemented.

Changes/modifications to the laws

The positive duty provides that an employer or PCBU must take reasonable and proportionate measures to eliminate as far as possible sex discrimination, sexual harassment, sex-based harassment, hostile workplace environments and victimisation. The positive duty will shift the burden away from individuals making complaints and places the onus on employers to prioritise early intervention and prevention.

From 12 December, the Australian Human Rights Commission’s monitoring and enforcement powers were enlivened. The Commission can commence an inquiry where it ‘reasonably suspects’ that a business is not complying with the positive duty and issue compliance notices. If compliance notices are not adhered to then the Commission can go to the Federal Court to seek enforcement of the compliance notice. There Commission will be proactively monitoring compliance and can take action even if no complaint has been made.    

Compliance for SMEs

All businesses regardless of their size or resources have a legal obligation to take reasonable and proportionate measures to eliminate sexual harassment and the other unlawful conducted covered by the positive duty. This includes sole traders, and the self-employed, as well as, small medium and large businesses. 

The measures businesses are expected to take to comply with the positive duty, however, will differ depending on a number of factors. When assessing compliance the Australian Human Rights Commission and the courts will look at what is ‘reasonable and proportionate’ for that business. Factors that will be considered include the size, nature, circumstances, financial and non-financial resources of a particular business. 

In practice, the measures expected of a small dry cleaner will be vastly different to a large retail business. 

Employers should do the following:

Ensure your senior leadership team, including the board where applicable, understand their positive duty obligations and that they are ultimately responsible and accountable for meeting the new requirements.

Consult with workers about sexual harassment and sex discrimination in the workplace and identify circumstances that might increase the risk of sexual harassment occurring.

Review policies, practices and reporting and response systems to ensure that they meet the positive duty compliance framework developed by the Australian Human Rights Commission.

Consider measures that will eliminate sexual harassment and sex discrimination.

Prepare a prevention and response plan.

Invest in quality education and training on respect at work facilitated by subject matter experts.

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