Industry accuses Attorney-General of ‘attacking’ employers amid costs reforms rift

Australian Industry Group’s CEO has accused the Albanese government of launching a ‘squalid attack’ on employers through a proposed shake up of laws dictating who should pick up the bill in sexual harassment and discrimination cases.

Australian Industry Group chief executive Innes Willox. Picture: Aaron Francis

Australian Industry Group chief executive Innes Willox has accused the Albanese government of launching a “squalid attack” on employers through a proposed shake-up of laws dictating who should pick up the bill in sexual harassment and discrimination cases.

The reforms have been criticised by business and religious groups for creating a lopsided litigation environment that will invite a wave of unmeritorious lawsuits by saddling employers with the burden of paying an applicant’s costs if just a single aspect of the claim is upheld.

Under the model, employees who sue their workplace for sexual harassment or discrimination will be protected from paying the respondent’s costs under an equal access approach that has been welcomed by legal advocates, unions and the Greens.

Mr Willox said the cost protection legislation went a step further than the model proposed in former sex ­discrimination commissioner Kate Jenkins’ landmark Respect@Work report, and undermined efforts to ensure there is a “careful and appropriate balance between the rights and responsibilities of all parties”.

Ms Jenkins recommended the government adopt a hard cost-neutrality approach consistent with the Fair Work Act, where parties bear their own costs unless the claim was vexatious or unreasonable.

“It is deeply unfortunate that the Attorney-General appears to be considering another squalid attack on employer rights in the name of making some cheap and nasty political point undoubtedly to seek favour with a few union leaders,” Mr Willox said.

“It seems some in the government think employers, especially small businesses, are an endless well of cash to be drained at will.

Attorney-General Mark Dreyfus.

“All this will do is encourage speculative claims and foster distrust in Australian workplaces.”

Mr Willox said employers had been working collaboratively to implement the proposed changes in the Respect@Work report and called on Attorney-General Mark Dreyfus to change course and stick with the recommended cost model.

“This is too important to become some cheap attack on Australian employers,” he said.

“If the Attorney-General pushes ahead with this muddle-headed proposal it would sadly undermine confidence in and support for all the excellent collaborative work done over many years.”

The cost reforms have also drawn criticism from religious leaders, who fear they would drive up activist litigation and force independent schools to increase their fees to cover the extra cost.

Anglican bishop Michael Stead agreed the bill was worrying in the context of the anticipated religious discrimination bill, saying it would be tested by activists now given “free rein to do so in court”, increasing costs for employers.

“Any insurer is going to look at this and say, ‘well … now instead of having to defend one claim we could be defending 15 claims’ and therefore the legal fees are going to jack up for the respondents,” he said. “And with insurance obviously, the premiums will be increased accordingly.”

Australian Human Rights Commission president Rosalind Croucher said she supported the equal access approach proposed by the government because the existing model posed a “significant deterrent to litigation for many people who experience discrimination or sexual harassment”.

“The commission has made several proposals for a more equitable costs model, to reduce the financial risk for applicants,” she said.

“While the government’s proposed model differs from those the Commission has suggested, we consider it is an improvement on the status quo, and we welcome it on that basis.”

The Australian Discrimination Law Experts Group wrote in a submission responding to the draft bill that it strongly advocated for “asymmetrical” cost reform, arguing that fear of financial losses often deterred victims from pursuing their claim.

“Costs – and fear of costs – significantly deter claimants from using existing legal mechanisms to address discrimination and inequality, particularly under federal discrimination law,” the submission said.

“Discrimination complaints are public interest matters; there is a public interest in complaints being able to progress to the courts.”

Diversity Council Australia chief executive Lisa Annese said the model put forward by the government offered support to victims of discrimination or harassment.