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Friday Workplace Briefing

Managing Change in the Workplace: The Safety, IR, ER, Workers Compensation and People Issues You Must Address

Managing change in the workplace is a challenge for all employers. Andrew Douglas and Nina Hoang will talk through the changes across Safety, Industrial Relations, Employee Relations, Workers Compensation and People that employers need to address.

To view the full episode and catch up with the week’s latest news and developments please visit this link.


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About the Hosts

Managing Principal - Victoria

Senior Associate - Workplace Relations

Episode Transcript

Andrew Douglas: Let’s go on to our major theme today which is about management of change. And I think for Nina and I the last six months have been an exhausting time as we help people navigate change.

Nina Hoang: Yeah, cause there’s so much coming through.

Andrew Douglas: You know, COVID was a change where we tried to say to people, look, this is a significant change whether you bring people back or not, you must consult provide clarity gives certainty. It creates psychological hazards cuz people get scared, they arrange their life. People like predictability. And the neuropsychology is predictability creates perfection. So brains naturally go to doing what they do in a repeatable and accurate way.

Nina Hoang: Yep, yep.

Andrew Douglas: So when we change things, we’re actually hurting people. And you’ve got to understand that.

Nina Hoang: Yeah.

Andrew Douglas: You might think it’s a great idea but… and it probably is a great idea but how you do it is important.

Nina Hoang: Yeah. I think it’s not change that hurts people, it’s changed without that consultation and that making people feel safe about that change.

Andrew Douglas: And buying into it.

Nina Hoang: Yeah.

Andrew Douglas: So for Nina and I, they’re seeing, when we are chatting about this there’s sort of four different paths that you look at. You look at people management change and we’ll look at John Cotter’s theory very briefly on change which all the HR people start yawning. It’s actually coming up there for us now. Thank you very much. So what, what Carter basically said and Carter’s changed this 20 or 30 years later to say there is so much change. It is identifying what the change is creating the motivation and story and as a leader not getting caught up on the spreadsheet but getting up on moving people along.

Nina Hoang: Yep.

Andrew Douglas: But what he does say very clearly is there is a conception stage, there is a planning consultation stage and there’s an execution stage. And the most important thing to remember about that is you must create this sense of urgency. And you’ll see my stages are coming up there which are stages one, two, and three. And you can have a look at those at another time. But what I want you to understand is that’s just one part of it.

Nina Hoang: Yeah.

Andrew Douglas: The major part of it is that the moment you move from conception, which is like a CapEx stage, which is saying I’ve got a cunning plan.

Nina Hoang: Yeah.

Andrew Douglas: It looks like this. It creates this profit, it creates this people utilisation. This is the benefit. That’s all very good. You haven’t made a decision. A decision triggers industrial relations.

Nina Hoang: Yeah.

Andrew Douglas: So you need to cultivate and craft how you make a decision through your documentation. So you don’t too early trigger your industrialisation responsibility. But the moment, the moment you start to implement a plan you have the first stage of safety consultation. And again, there’s nothing new about safety consultation. It actually sits in section 38 of the OHS act and its brother provisions in WHS. And that says the standard of care is reasonably practical. So the moment I get something like that I’ve got to go, okay, what hazards does it create and who do I consult around hazards? Well I can, I talk about financial risk.

Nina Hoang: Yep.

Andrew Douglas: Cause I need resources. I go to maintenance and engineering. I go to people who use it.

Nina Hoang: Yep.

Andrew Douglas: What you can’t do do with safety cheaply is retrofit safety.

Nina Hoang: Yeah. Or retrofit consultation. I think a lot of businesses think it’s a nice to have instead of an obligation.

Andrew Douglas: Yeah.

Nina Hoang: But it’s actually a requirement under statute.

Andrew Douglas: And when we look at the prosecutions we deal with, that primary stage of consultation is the one that always sets up liability.

Nina Hoang: Yep.

Andrew Douglas: The failure to do that leaves inherent risk inside an operation. And if we look at our last four or five serious injuries, three of them relate to this primary failure of early consultation safety. So that’s one thing. The second thing is the moment we discuss change, we change the way work is going to be designed. We run straight into psychological hazards issues. Known hazards defined in legislation. Again, we go back to reasonable practicability. Hazard, none. Risks…

Nina Hoang: High.

Andrew Douglas: High. Control mechanisms. Consultation is the primary method because it draws out the risk assessment process.

Nina Hoang: It gets you the data of what the…

Andrew Douglas: And here’s the rub and what it says under the section is. It then identifies not only what are the controls are but what is the education and understanding that is necessary to safely execute. So we’ve got to the stage and we’ve crafted our documents carefully. Okay. We haven’t made a definite decision cuz that triggers the award provisions. But we’ve had this consultation process, we’ve brought it back into the design process and said, okay so this is what we’re going to do. This is the infrastructure, this is the people behaviour that we’re going to have. This is financially how we’re going to fund it and source it. This is the education and consultation structure. We’ve wrapped it up.

Nina Hoang: Yep.

Andrew Douglas: At that stage you must document the decision because at that stage you trigger the secondary consultation under the safety law. But most importantly the management of change because this normally has a significant effect.

Nina Hoang: Yep.

Andrew Douglas: Because it changes the hours or manner in which a person works and many cases creates redundancies.

Nina Hoang: Yeah.

Andrew Douglas: And remember these are people who work for you. So they deserve to know the truth early. Because when you do that under award, your obligation is to consult immediately with affected workers. And most cases they’re representatives or they’re identified representative depending on the enterprise agreement or reward. And the effect of that consultation is to describe exactly what the change is. Not just to say we want to consult with you.

Nina Hoang: And it’s impact on…

Andrew Douglas: It’s impacted. And then to mitigate or ameliorate the effect of that on people. So this isn’t, I’m just going to go and have a chat to you. This is a three part consultation, which is town hall meeting. This is what we’re going to do. Letter directly to each effective employee saying…

Nina Hoang: Outlining the change. Yeah.

Andrew Douglas: Individual meeting with that particular employee. Then final outcome.

Nina Hoang: Yeah. And also I think, I think we should say also that it’s not just limited to that. If they raise genuine things that you want to consider then that should be done through further meetings before you get to the outcome.

Andrew Douglas: Exactly. And the other part is, although consultation under industrial relations doesn’t require agreement, it must be genuine.

Nina Hoang: Yeah.

Andrew Douglas: And if you don’t do genuine consultation then the union can bring direct proceedings in the federal court or can bring dispute proceedings. And it depends whether your enterprise agreement has all clauses around status quo. That could stop everything you’re going to do. So this isn’t hard. I guess what Nina and I are saying, it’s not hard but people get so excited to institute change.

Nina Hoang: Yeah.

Andrew Douglas: They forget that three days is a lifetime in change.

Nina Hoang: Yeah.

Andrew Douglas: And the biggest risk are not machines that you introduce, it’s the people who use those machines.

Nina Hoang: Yep.

Andrew Douglas: So now you’ve got to this stage where we’re about to execute. We’ve made a definite decision. We’ve created documents and emails that identify we’re about to make a decision, we’ve made a decision. The decision is complete. So it’s discoverable in litigation. It sets out all the elements of consultation and safety in the risk management part that sits behind it. It’s a document that protects everybody.

Nina Hoang: Yep.

Andrew Douglas: And it protects you from prosecution down the line. Shows you’ve taking the consideration risk. It means your workers compensation risk around reasonable management action when you’re dealing with people who are under stress is defensible. So your premium is safe. And then you come to the stinker, which sits right in the middle of this, which is discrimination law which says, well actually a number of people may not be able to make the change you hope. And your enterprise agreement says they must. But that’s not what discrimination law says. Discrimination law says people with a protected attribute are protected.

Nina Hoang: Yeah.

Andrew Douglas: Unless you can come up with a reasonable adjustment. And that is an individual adjustment, not a collective adjustment. And once again, during change, people are always happy to go, well if it’s good enough for one, it’s good enough for all. In discrimination law, that’s just poking us, poking yourself in the eye with the fork. So again, when you’re about to do change you must go individually into the circumstance of each through it. And that discussion that Nina talked about is to identify what are the matters that then jump up in front of us? How are we going to adjust it? And it’s a matter of just respect. You know, the example that comes to mind is when my father was unwell, a principal who was working with me wanting to get hold of me. My father had two weeks to go in his life and became angry at me on the phone because I said, look, I, I I’m at the palliative unit, I’ve got to see my dad. And they went, well when are you going to be finished? And I said, well I’m not sure when he’s going to be finished. He’s dying.

Nina Hoang: Yeah.

Andrew Douglas: The insensitivity that comes around need at times means that we damage and hurt people.

Nina Hoang: Yep.

Andrew Douglas: And damaged and hurt people litigate. So it’s stupid. But the other part is, you know, we’re a moral society. We create great businesses around great people and how we treat the most difficult people is a window into how we treat everybody. And I guess the lesson about change is everyone’s a little bit difficult. We must individualise it, we must think it through and we must come up with a plan, which is sound and fair.

Nina Hoang: That was very poignant.

Andrew Douglas: Yeah.

Nina Hoang: Shocking from you.

Andrew Douglas: Well it’s a story that’s hard to let go. That story. I might say. So if you can think about that, you’ve got four areas of law that are directly affected. Two of them, workers’ compensation and safety come in in stages two and three after conception. The moment you go into the execution stages, the planning and execution stages. They’re there because psychological hazards arise. They’re there because in a statutory form you must do two series of risk assessments.

Nina Hoang: Yep.

Andrew Douglas: Pre and once you commission. And then you run into the industrial part on the third stage of execution once a definite decision has been made. And I think for Nina and I, we’ve never seen a good set of documents around this.

Nina Hoang: Yeah. And I think it’s probably the area where terminations and redundancies follow the most. Like if you look at all the cases in the commission of the courts, that’s what the unions focus on. Cuz it’s such an easy error to pick up.

Andrew Douglas: And they can’t lose because the moment you try and produce documents, there’s none.

Nina Hoang: Yeah. Please use documents.

Andrew Douglas: Yeah. And there’s all the side conversation where John said to Terry, yeah look, we’re going to do away with this line, so…

Nina Hoang: Yeah.

Andrew Douglas: And that’s a definite decision and that’s evidence of a definite decision that was never communicated three months before.

Nina Hoang: Or during the consultation say “Yeah you’re probably going to be made redundant but you know we have to talk to you about it.”

Nina Hoang: Yeah. Things like that.

Andrew Douglas: It is a good time to get you a lawyer sitting in the back room to actually craft that process for you. Not because I want more work as the moment we’re struggling.

Nina Hoang: Yeah.

Andrew Douglas: But because I’d really love it if you had a suite of documents that a court looked at and thought, gee, sensitive, generous, thoughtful employer, mindful of individuals, done appropriate risk assessments to defence, safety, prosecution premium protection, industrial protection. And you know what, it’s going to land well, which is great which means the people risk is going to go from it. So that little bit of investment has a really big outcome. And that’s because of how we’ve bumped into this over the last four or five weeks. Both of us through change. I think it’s something we just wanted to come back and refresh people’s memories with.

Nina Hoang: Yeah. I think it’s, it’s good to distill it down because everyone thinks of it in such an overwhelming thing. So many things hitting us, how do we do it? And you’re right, everyone rushes through cuz eager to get through it all, but…

Andrew Douglas: And don’t like to say the bad thing.

Nina Hoang: Yeah.

Andrew Douglas: They just want to get it done quickly.

Nina Hoang: Yeah. Exactly.

Andrew Douglas: Alright, now we’re going to go onto the case study which I don’t think Nina’s even read. So you can read it out loud now.

Nina Hoang: Muttsmith was a pet food wholesale and retail business supplying the inner southeast suburbs with costly cuts for pampered pooches. They started with one shop in the trendy gentrified enclave of Brunswick, but soon expanded to the leafy southeast. You really missed Matt, eh?

Andrew Douglas: Yeah, I miss him.

Nina Hoang: The butchering processing plant was in Abbotsford. It started off having working hours from 6:00 AM to 3:30 PM which were within the ordinary hours under the award. Processing was originally through usual butchering methods aided by a bandsaw. But as the business grew it became obvious it would soon need an extra shift and some pre-shift overtime on Thursdays and Fridays to fill the shops for Friday and Saturday trade.

Further, it involved the development of a mechanised line around mincing from beef, lamb, and kangaroo with other food additives to produce their premium products that were sealed in organically suitable paper containers that were biodegradable.

Andrew Douglas: I did that for Matt.

Nina Hoang: There would be no loss of skilled jobs but they would spread across shifts. But it would involve lower skilled plant operators, warehousing and food safety skills in recruiting new people. For the butchers, much of the practical skill they had applied prior to the suggested changes would go with new automation.

Muttsmith had entered into an EA with the employees in 2022 and it allowed the addition of afternoon shift with two weeks notice.

Muttsmith, although growing was small. The Abbotsford premises employed 32 people. Everyone knew the boss, Rob Wheeler. And Rob had the habit, liked by his employees, of floating ideas for discussion around change and improvement. It’s very forward thinking.

Andrew Douglas: Hey. Rob Wheeler. It’s almost dog isn’t it? See Rott Wheeler, I thought she would’ve picked it.

Nina Hoang: Rob had spoken to Everett about how busy they were, asked who would be interested in doing an afternoon shift. The plant and equipment had already been purchased when Rob’s foreman gave written notice to employees of the new shift roster change including regular Thursday and Friday pre-shift over time. If that couldn’t be agreed, he would introduce a new early morning shift as the ordinary hours clause had been changed by the EA from 6 to 6 to 4:00 AM to 6:00 PM.

The employees had already seen jobs on seek in the weeks before the announcement. And the refitting of the adjacent part of the building for the new line. A day later each employee received a written notification around the changes of hours with seven being advised they would move to afternoon shift in two weeks’ time. And the remainder advised of pre-shift overtime rotating between them in cohorts of eight one week on three weeks, no pre-shift overtime. The EA had a status quo clause. It was not the model award provision.

Andrew Douglas: Now I thought seeing as we both shop at Muttsmith that could be a good stuff.

Nina Hoang: Yeah.

Andrew Douglas: Okay. Let’s have a look. Can I just say part of the, part of this problem is, is very real isn’t it? The sort of stuff we do it every day.

Nina Hoang: Weirdly familiar.

Andrew Douglas: So let’s have a look at this. Go. You can have question one.

Nina Hoang: Nadine was a single mom who had a seven year old child. She arranged with her brother who started work at 9:00 AM to care for her daughter before school and take her to school. But she had no family to collect her daughter at 3:30 PM from the school next to Muttsmith. Her current hour is 6:00 AM to 3:00 PM allowed her to collect her daughter straight after work. Can Nadine refused to change in hours to afternoon shift and/or pre-shift overtime?

Andrew Douglas: So good question, isn’t it? So what are the issues that are raised here? So there’s psychological hazard risk in the fact that there’s a work design change.

Nina Hoang: Yep.

Andrew Douglas: She’s, she’s got carer’s responsibilities.

Nina Hoang: Yeah. So there’s a discrimination risk.

Andrew Douglas: So there’s discrimination and a direct fair work act breach.

Nina Hoang: Yeah. Yep.

Andrew Douglas: So it’s pretty challenging isn’t it? And although the industrial instrument entitles the change…

Nina Hoang: I don’t think they consulted with her properly.

Andrew Douglas: They haven’t cons… So that’s it. Yeah. So the first part is there’s no consultation. The reasonable adjustment would be to provide a such suitable period of time within which she can adjust.

Nina Hoang: Yeah.

Andrew Douglas: It would not be the two week period. And would be to step in behind her to provide that level of support

Nina Hoang: And see if it works and adjust as necessary.

Andrew Douglas: That’s right. So there is a way through this but not doing this. Not though.

Nina Hoang: Yeah. But Muttsmith though.

Andrew Douglas: But Muttsmith would get bitten on the bum by this. Okay, next question.

Nina Hoang: The union entered the site to investigate imminent psychological hazards, placed the change in dispute and brought the matter before the Federal Commission on an urgent application. What would they argue? What’s the change in dispute? Oh, as in the dispute of the change.

Andrew Douglas: The change. Yeah.

Nina Hoang: Right.

Andrew Douglas: Well well they just bring in dispute application. That’s all they’d have to do.

Nina Hoang: That’s their go to. But they could also bring in like on, I guess if they represented her, they could bring in discrimination.

Andrew Douglas: Well they they could. They they could. No they can’t yet. Just not yet. They can’t bring that in.

Nina Hoang: Oh, well soon.

Andrew Douglas: Soon they can. Yeah. But the most important thing and they could bring it on the basis of her gender.

Nina Hoang: Yep.

Andrew Douglas: Okay. But it would be problematic. They could certainly go directly to the federal court.

Nina Hoang: Yep.

Andrew Douglas: But they gave the Fair Work Commission under an urgent application for dispute and that would drag this process out for five months.

Nina Hoang: Yeah.

Andrew Douglas: And the status quo would prevent you from doing it.

Nina Hoang: Yeah. So you basically have to just keep on going as you get on.

Andrew Douglas: The status quo means that you can’t continue with a change. And so a lot of clauses keep that residual clause particularly in the manufacturing sector, unaware of the risk that comes with it. So that’s what we’re highlighting there. Make sure you go to your change clauses and if you’ve got in your dispute resolution status quo then you really have a problem. You must get it out of your enterprise agreement.

Nina Hoang: I think the other thing is, couldn’t they also raise this with work safe and bring it…

Andrew Douglas: Definitely. Yeah. They could.

Nina Hoang: Prosecution through that way as well.

Andrew Douglas: Okay. Next one.

Nina Hoang: Muttsmith offered no psychological support network or process during the introduction of change. Is that necessary under safety IR and workers’ compensation?

Andrew Douglas: Well there’s the question. So the answer is yes under workers’ compensation. Cause that has nothing to do with normal law. So because it’s a nonsense jurisdiction. So the failure to actually provide people with access to psychological supporting workers’ compensation would destroy any psychological any defence to any psychological claim. Okay. Do you under safety

Nina Hoang: Any defence…

Andrew Douglas: It just goes.

Nina Hoang: That’s crazy.

Andrew Douglas: So there’s three or four cases over the last year. They’re nonsense cases. So two of them are South Australian which is an even bigger nonsense jurisdiction. But the idea that you, you create a change in the way someone is going to be managed.

Nina Hoang: Yeah.

Andrew Douglas: And you don’t and it would have an effect, reasonable person view. It could have an effect on them. And you do nothing to provide that level of support. Support even at the consultation stage is a proper basis for someone developing a psychological claim.

Nina Hoang: So what kind of support would you need to provide to satisfy workers’ compensation?

Andrew Douglas: So what you need to say is, look, I need to talk to you about a change that’s occurring. This could have significant impact. So what I want to do is provide you with a copy of what we’re going to do. But I’m going to provide you with a services you know you can ring this service so you can…

Nina Hoang: Oh like offering EAP.

Andrew Douglas: Yeah. Right at the beginning.

Nina Hoang: That’s a requirement under workers’ comp. Wow.

Andrew Douglas: Well it’s not written in there, but if you don’t do it your reasonable management actually just goes.

Nina Hoang: Wow that’s crazy.

Andrew Douglas: So I said dumb, dumb and silly jurisdiction. But it’s a costly one. Cause the premium impact’s enormous. Under safety law, if you were aware or reasonably be aware of a risk or hazard and you failed to monitor health and fit around the obligations of putting in control around that. Yes you would. Under IR very unlikely.

Nina Hoang: No, there’s no requirement under a IR.

Andrew Douglas: So I just wanted to show you, it all sits a bit differently. But it could be under safety. It is under workers’ compensation. And remember when you’re doing change, it’s a composite. It’s not one or the other.

Nina Hoang: Yeah. You’ve got to account for all risks.

Nina Hoang: So you bill for failure.

Nina Hoang: Yeah.

Andrew Douglas: And the short answer is putting on the bottom of your letter an EAP address and making available some good psychological counselling service on the side costs very little cuz almost no one takes it up.

Nina Hoang: Yeah.

Andrew Douglas: But it is a good thing if people do need it and what the Fair Work Commission and Federal could say when they see it is generous, good thoughtful employer concerned about it. It changes the cultural norm you’ve got sitting in court. You go from being the person being attacked to someone doing the right thing.

Nina Hoang: It’s essentially like offering a support person even knowing that…

Andrew Douglas: As my little daughter would say a super support person. Someone even more qualified. Now that’s it for this week. It’s been great but we are super busy.

Nina Hoang: Yeah.

Andrew Douglas: And we’ve had lots of challenges and change ourselves. So thanks very much for coming along.

Nina Hoang: Yeah. Thank you for tuning in.

Andrew Douglas: Matt and, particularly Grace and Tex. Hope everything’s going well. And hurry up back here cuz we are wearing out.

Nina Hoang: Yes. Give us a thumbs up.

Andrew Douglas: Give us the thumbs up. See later guys. Bye-Bye.

Nina Hoang: Bye.

Check this next

In this week’s Friday Workplace Briefing Andrew Douglas and Nina Hoang focus on why you need good governance and how to protect your organisation and yourself. To view the full episode and catch up with the week’s latest news and developments please visit this link.