Andrew Douglas: Closing the Loop has run into, quite rightly, some pushback. And it’s run into pushback from the crossbenchers in Senate who’ve said, “Look, this is a lot of change. Some of it seems quite good, but we haven’t really had a chance to think about it.” And one of the things that they were very concerned around is what Closing the Loop want to do with contractors, you know, the definition of who is the employee, and who is a contractor.

Closing the Loop does tidy up some things. I’m going to talk briefly about two, or three. The other things, Kim and Nina have spoken about in my absence, some of the good things that I think are really being done. But the contractor one was done, and it was driven, again, by the union movement saying, “We don’t like what the High Court said. We want to go back to the old days.”

So, let’s talk about what the High Court said. The High Court said if I want to engage Kim as a contractor, I need to look at the intention of the parties at the time of entering into the contract, which is how you interpret all contracts, by the way. That’s contract law. And I will find that intention by what is written in a document. And therefore, unless the substantive behaviour afterwards varies in such a crazy way where there’s some ambiguity, the contract will govern the relationship. Thank God, okay? We’ve been-

Kim McLagan: We’ll we had good sense then.

Andrew Douglas: Yeah, yeah, and look, we have been fighting about this constantly. I’d say probably 10 to 15 cases came before us every year where all this could be trying to define based under the substantive test theory, which is, so, what is the behaviour like after contracting? Crazy thing to be talking about, isn’t that? Shouldn’t a person know where they are at the beginning? Not, “We work it out six months later.” But we’d sit there, and we’d be weighing up all the aspects of it, you know, can you actually delegate work, do you need to give a tax invoice based on that, all this sort of crazy stuff. And the truth was, our group would say, “Yeah, look 60% likely contractor,” but we can never give any clarity. High Court said, “We’re sick of that.”

But of course, this is a place where the unions live. And so, they’ve unwounded in Closing the Loop. And there are a number of people who are more independent who are sitting in parliament who are saying, “I just don’t understand this. Why would we get rid of something that was so complex, so bad…”

Kim McLagan: Yeah.

Andrew Douglas: “…interfered in business, interfered in labour? Why would we bring all that back for ward-based employees?” So-

Kim McLagan: It’s a shame.

Andrew Douglas: I think the short answer is, you now know what the old position was, relatively new old position under the High Court. Great idea. Look at a party’s intention before they enter into a contract. I think that’s great-

Kim McLagan: Yeah.

Andrew Douglas: Personally.

Kim McLagan: Yeah.

Andrew Douglas: Go back to the old position of balancing all the factors between a contractor and employee, which is, you know do they have an ABN, do they have an independent company, do they act for other people, all that sort of crazy rubbish that we used to try and weigh, for which there is no academic way of identifying a weight to attached to each. And then, you’ve got to go in front of a court based on the politics of who that person was appointed as to how they weigh it. Why would we create such uncertainty in the way people work? So, I think that’s a sort of grotesque anomaly that sits right in the middle of Closing a Loop. And I hope that the crossbench push hard and long to stop that from occurring.

The good things that are occurring, which are looking at gig-based workers and setting minimum terms, I think that’s a great thing.

Kim McLagan: Yeah.

Andrew Douglas: I think they’ll look at the transport, you know, transport and saying we need to look at unfair terms and contracts for the contractors. I think they’re a great thing. So, those things, hopefully, will flood through. And I don’t think anyone has a legitimate basis for defending them. And if they do, there’s something wrong with them.

Kim McLagan: Yeah.

Andrew Douglas: Because, you know, I was working as a workplace lawyer when everyone used to own trucks, and they pushed out individual drivers. What that did was, half the industrial action that sat around that for companies. They were terrible times where poor individuals got trucks thrust upon them later, or suddenly took on $300,000 of debt. They’re making tiny margins. We forget the history in road transport, of the damage that’s been done. And we forget we’ve now got gig-workers who are going down the same path, who’re investing in small infrastructure and tiny margins, and being treated poorly. And Australia is a better place than that.

So, it’s nice to know that courts will interfere in the unfairness of contracts, set minimum terms. Again, I don’t think there’ll be a lot of pushback in that.

But the contractor versus employee stuff, we need to fight hard to stop that from occurring because the law became much simpler for everybody around about nine, or 10 months ago, and labour through the pressures of the union seat to rip it up. Alright, I’ve forgotten when we started today, so I don’t even know what time we’re at. How are we going for time?

Kim McLagan: We’ve got… I can’t count. 20 minutes in, Andrew.

Andrew Douglas: And we’re 20 minutes,

Kim McLagan: 10 minutes to go.

Andrew Douglas: We got 10 minutes to go, How about that? Thank God Kim was here. Let’s go on to the problem. And Kim you can read.

Kim McLagan: Okay.

Jen had worked for Gary for several years. Jen was a young accountant and Gary was the CFO of Bank24U,a lending business for the domestic housing market. There were several women in Gary’s team. The Board of Bank24U were concerned with Gary’s performance. He’d been with the bank since its first capital raise as a startup, and now it was listed on the stock exchange. He knew everything about the organisation including where all the skeletons were buried.

He knew about and had raised concerns about the CEO’s remuneration, how his incentive package did not align with profitability, or recognised performance targets. There was a lack of governance around the issue, and there were other executives who were inside the CEO tent. Both the CEO and Chair had been with the business for less than five years. Gary was very protective of the business because he helped guide it through difficult times.

When he raised his concerns, he was told by the chair of the Nominations and Remunerations Committee that it was not his business. Shortly after Gary raised his concerns, the CEO raised concerns about Gary’s performance and started to performance manage him. The PIP that the HR Manager prepared was neither fair, nor based on objective measures.

Gary raised his concerns with HR and wrote directly to the CEO and Chair, stating clearly why he was concerned and why it was unfair, hurtful, and unreasonable. He said it made him feel bullied and unsafe at work. As Gary was leaving the building to head home on Friday the 6th of October, Jen came up to him and asked him if he was okay. He’d obviously been crying. They hugged and he said, ‘I’m fine.’ She grabbed him by the hand and drew him into a nearby bar for a drink.

The following day, all women in his area received a strictly confidential survey. It asked questions like, ‘Has Gary ever touched, or hugged you?’ The HR Manager rang each woman and made it clear there would be very serious consequences if they told Gary, or anyone else of the survey. Four women said that Gary had touched, or hugged them.

Had they been asked, they would’ve explained that he was a father figure in the office, and the touching, or hugging was always consensual, and often around traumatic things that had occurred in their life. Gary was hauled before HR, showing CCTV footage of him hugging Jen, and the results of the survey. HR explained they had a positive duty to stop sexual harassment, and as a result he would be summarily dismissed. He earned over 500K a year before bonuses.”

Andrew Douglas: Alright.

Kim McLagan: Okay.

Andrew Douglas: Interesting story. First one’s not too hard. Did Gary sexually arrest Jen, or anyone else?

Kim McLagan: No, he did not.

Andrew Douglas: I know, but don’t it just say to you, it tells you one thing, doesn’t it? And that is, it’s lovely that people did consent.

Kim McLagan: Hm.

Andrew Douglas: But I’m not sure Gary, in this story, would’ve known one way, or the other.

Kim McLagan: Yeah, that’s true. He shouldn’t hugged her.

Andrew Douglas: Yeah, so it’s hard for Kim and I ’cause we’re not allowed to.

Kim McLagan: Oh my gosh!

Andrew Douglas: She’s a hugger.

Kim McLagan: I’m a hugger.

Andrew Douglas: She’s a hugger.

Kim McLagan: I ask permission.

Andrew Douglas: She does ask permission. But I guess, the one thing to remember is, this story is deliberately designed to say that women like Jen hugged him to show that the type of difference that can exist. But there does need to be a little bit of caution around this sort of behaviour within a workplace. I think for Kim and I, and for people we’ve worked together for over 20 years, we’re close friends, so there is an established relationship that does it, but it’s worth just reminding.

Was there a positive duty for Bank24U?

Kim McLagan: Yes. And there certainly was. There’s a positive duty under Respect at Work-

Andrew Douglas: Yeah.

Kim McLagan: To… You go ahead.

Andrew Douglas: No, you go.

Kim McLagan: No, you go. You’re dying to.

Andrew Douglas: Oh my word. You know, there’s so many positive duties there and there is a positive duty, or emerging positive duty in Victoria, and one that exists to prevent psychological hazards. So, there’s ones around sexual harassment, discrimination, and there is a positive obligation to prevent it from occurring as well. So, there’s two duties that sit there, and making hostile work environment. So, there is the positive duty and then there is you must prohibit it, it must be prohibited.

What it’s saying to organisations like this bank is, what evidence do you have to satisfy yourself that behaviour like this will not happen? So, it’s not about responding to allegations, or certainly coming back and collecting evidence later.

It is about what is the living evidence in that organisation that tells you about people not sexually harassing, not discriminating, not having a hostile workforce, not having psychological hazards. That is evidence. It’s not a matter of saying, “Oh we’ve got this duty. Now we see this, we’re going to sack you.” That ain’t anything but a mistake. It’s, “What does our exit interview say? What do our HR records tell us?” You know, “Where is the discipline, where’s the…? Have we done a survey and a survey, which is a reasonable survey across everybody that ask, you know, ‘Do I feel safe when I come to work? Have you been subject of any form of sexual harassment? Have you been bullied while you’re at work?’”

What are those type of questions that are open-ended do? Well, they’ll give you a really honest answer. That’s a start. It’s related to the person who you’re surveying, so they’ll tell you about them, not what they’ve observed about others. So, that question used to be, “Have you ever observed sexual harassment workplace?” and 80 people would say, “Yes,” but it was all the same incident. Not helpful to you. So, when you’ve got that information, and you’ve got the HR files, you’ve got the exit interviews, this is the very basic beginnings of it.

Then what you do is, you go and hold some focus groups around the areas of risk to actually flesh out and enrich that detail. And from that you can then build supervisor competence and have a proper HRM that collect supervisor feedback around behaviours and performance going through.

But without evidence, you can’t have completed your positive duty because your positive duty is not to deal with it when it happens. It’s to stop it from when it’s happening. So, when the HR manager said, “Because of our positive duty,” that’s bullshit. The positive duty was well before that, and it’s organization-wide, not individually-located.

Kim McLagan: Yeah.

Andrew Douglas: It’s then to have a system that sits above it that deals immediately with behaviours that breach that. Remember, with sexual harassment and bullying, it’s a bit like Shrek and the onion. There’s a lot of layers. So, it always starts off in a small way, doesn’t it? Which then grows very rapidly from that.

So, a strong process, a safe work environment, a place where people feel safe to say something, means you get in before serious harm, or hurt is done. Sexual harassment and bullying, a form of psychological hazards. They’re one of the sort of 14 that have been listed. They’re the more egregiously wrong ones, but how we allocate work, risk, and reward all those types of issues around how we manage people, leadership issues, again need to have an evidence base that we’re regularly testing and checking on. This organisation didn’t have it. It was clearly in breach of every single positive duty that existed under Respect at Work and Secure Jobs, and under safety legislation. It was deeply flawed.

So, although it had policies and procedures, that’s got nothing to do with the positive duty. Evidence has the positive duty.

All right, does Gary have a cause of action?

Kim McLagan: He has a brilliant cause of action in general protections, doesn’t he?

Andrew Douglas: He certainly does.

Kim McLagan: Without any doubt.

Andrew Douglas: So, what Gary’s done is, he’s identified a workplace right. He’s raised a problem that existed around behaviours that exist in the organisation. He’s then had behaviour towards him, which isn’t based on fact.

Kim McLagan: Yep, yep.

Andrew Douglas: He’s then said, this affects my safety. So, he’s ticked the box. He says, “Okay, this has affected my safety now, and as a result of that, they have moved to terminate.” Okay, and he’s ultimately terminated. So, when I say it’s, or Kim says, it’s a good claim, it’s not just a good claim. Remember, there is a reverse onus that says, “An adverse action.” He raises what Kim has just said. He’s ticked his obligation.

At that stage, the company has to go back and disprove what I’ve just said. It can’t.

It can’t say he didn’t raise it. It can’t do that.

Kim McLagan: No, no, it can’t.

Andrew Douglas: It can’t say that the process they were implementing was a reasonable one. Gone, okay because that’s something that’ll be tested objectively based on the evidence that’s given, and on expert evidence that would say, “Under no basis would this be reasonable.”

So, in the court at the moment, you’re into a day three of a hearing and you got a gun at your head. What’s the loss? He’s on $500,000. He doesn’t have an unfair dismissal claim, clearly, but at $500,000, the damage that’s been done to this man is so significant. He’s unlikely to work again. So, his compensation is at least two to three years worth of income.

Kim McLagan: Yeah.

Andrew Douglas: And any other losses around, sort of medical and like expenses. This is a 1 to $2 million minimum claim.

Kim McLagan: Yeah.

Andrew Douglas: And how crazy, this was a guy who actually was helping an organisation and had identified the Qantas problems that existed in the organisation. You can tell I wrote this when Qantas actually pushed back my flight. Well, yeah, this is a good story to tell right? This is the moment. Wonder if Alan Joyce is listening. This is a good story to tell.

But isn’t it interesting how often we’ve seen situations where someone does act as a whistleblower, in a way, this isn’t quite a whistleblow, but is concerned about remuneration, about behaviours, and is then punished for it by the person they’ve raised about it? This shows where general protections is going.

So general protections is starting to line up with the harassment-type claims and the way damages are being measured and the rest. I think this would be one, if it was fought, would be massive.

So, there you go.

Kim McLagan: Yeah.

Andrew Douglas: That’s for this week. And it’s great. And next week we’ve got Nina back and you’re free.

Kim McLagan: I hope so.

Andrew Douglas: Those butterflies, those butterflies, all good?

Kim McLagan: I was just thinking about our workload next week. I don’t know. We have to play that one by ear. I think we’ve got a lot on.

Andrew Douglas: It can’t be you ’cause you’re in Ballarat.

Kim McLagan: Nina might be too.

Andrew Douglas: It’s me on my own again?

Kim McLagan: Hmm, might be.

Andrew Douglas: With Paul? Okay, anyway, look, lovely to see you. Give us a thumbs-up when you get a chance. Great to be on with you too.

Kim McLagan: You too, thanks, Andrew.

Andrew Douglas: And we’ll see you soon. Bye.

Kim McLagan: Bye.