Australia introduces positive duty on directors to eliminate unlawful sex discrimination

By Damian Kelly

Organisations and businesses in Australia are now required to take reasonable and proportionate measures to eliminate unlawful discrimination and harassment on the basis of sex. From Tuesday 12 December 2023, the Australian Human Rights Commission (AHRC) is set to commence enforcement action against non-compliant businesses and directors.

This positive duty adds to the list of directors’ duties which already exist under labour and corporate law. Boards and the businesses they manage will need to actively consider the risks of sex discrimination and harassment faced by their employees and depending on active risks and the size of the business implement policies in order to limit and reduce discrimination and harassment on the basis of sex.[1]

In December 2022, the Australian Government passed the Anti‑Discrimination and Human Rights Legislation Amendment (Respect at Work) Act 2022 (Cth) which amended the Sex Discrimination Act 1984 (Cth) (Act) introducing this positive duty on employers and persons conducting business. This duty applies to “senior leaders” of companies which are described as persons with responsibility for the management and governance of the organisation, such as directors, partners and executive managers.[2]

Despite a year of training and information published by the AHRC According to a report published by the Australian Institute of Company Directors indicated although a majority of ASX300 directors believed the prevention of sexual harassment was a high priority issue over 80% of women directors believed their boards are not equipped for the positive duty to actively eliminate forms of sexual discrimination and harassment.

The AHRC will have the power to enforce the positive duty through inquisitorial powers, issuing a compliance notice, applying to the courts to for punitive sanction and entering into undertakings with employers, businesses and senior leaders.[3] In order to avoid sanction boards should ensure their businesses apply the seven standards established by the AHRC, which are:

Leadership – senior leaders such as directors must be aware of their obligations and liability. These leaders must make a commitment to taking measures to eliminate sex discrimination and harassment;
Culture – fostering a safe, respectful and inclusive culture;
Knowledge – development and implementation of a policy;
Risk management – identifying that unlawful conduct under the Act is a risk;
Support – provide appropriate support to works including leaders;
Reporting and response – establishing a reporting and response framework with consistent and proportionate consequences; and
Monitoring, evaluation and transparency – reviewing reports and improving procedures based on experience and industry standards.

These changes will be relevant for businesses operating in and across the Pacific with offices or employees located in Australia. It will also be relevant as we continue to see legal reform in many Pacific jurisdictions continue to mirror developments in Australia and New Zealand. Similar duties already exist in some Pacific jurisdictions such as Papua New Guinea and Solomon Islands which each introduced duties on employers to protect whistleblowers from reprisals. Like the positive duty to eliminate sexual discrimination and harassment in Australia, directors are under an obligation to act proactively, prepare prevention and response plans, and conduct timely reviews of polices and procedures to ensure the workplace remains safe for employees.

For more information about your duties as a director you can download Pacific Legal Network’s Directors’ Duties Guide . We also offer training on how to remain compliant as new legal developments emerge. Contact us here.

[1]Guidelines for Complying with the Positive Duty under the Sex Discrimination Act 1984 (Cth) (August 2023) Australian Human Rights Commission <https://humanrights.gov.au/sites/default/files/2023-08/Guidelines%20for%20Complying%20with%20the%20Positive%20Duty%20%282023%29.pdf>, 19. [2]Guidelines for Complying with the Positive Duty under the Sex Discrimination Act 1984 (Cth) (August 2023) Australian Human Rights Commission <https://humanrights.gov.au/sites/default/files/2023-08/Guidelines%20for%20Complying%20with%20the%20Positive%20Duty%20%282023%29.pdf>. [3]Guidelines for Complying with the Positive Duty under the Sex Discrimination Act 1984 (Cth) (August 2023) Australian Human Rights Commission <https://humanrights.gov.au/sites/default/files/2023-08/Guidelines%20for%20Complying%20with%20the%20Positive%20Duty%20%282023%29.pdf>, 19.