A law to reduce employees’ costs to take work discrimination harassment claims to court has passed Parliament.
Under the Costs Protections Bill, someone who takes their employer to court for workplace discrimination or sexual harassment won’t have to cover their boss’ legal costs if they are unsuccessful.
It’s the final recommendation to be acted on from the Australian Human Rights Commission’s (AHRC) 2020 Respect@Work report.
Legal cases
Taking a workplace discrimination complaint to court can be expensive.
At trial, a judge might reject the complaint, and order the complainant to pay their workplace’s legal fees as well as their own. This is known as a “costs order”.
In 2022, Australian National University (ANU) researchers concluded the combination of legal expenses and the risk of a costs order “is a major barrier to applicants pursuing” claims they have a chance of winning.
Separate ANU research has shown around 450 cases have progressed to court since national sexual discrimination laws came into effect in 1984.
This is because many sexual harassment claims are settled out of court, with many requiring all parties to sign “non-disclosure agreements” — legal clauses requiring them to stay silent.
In 2022, the AHRC found one in three Australians had been sexually harassed over the previous five years.
Respect@Work
In 2020, the AHRC conducted a national inquiry into workplace harassment. In its final report, titled Respect@Work, it made 55 recommendations to reduce harassment at work.
54 of the recommendations have been accepted, some of which are still in the process of being implemented.
The remaining recommendation, overhauling costs orders to give greater protections for victim-survivors, has now passed Parliament.
New protections
Under the new law, a person who brings a workplace sexual harassment case can’t be asked to pay their employer’s legal fees if they’re unsuccessful in court.
It also covers claims of religious, racial or LGBTQ+ discrimination.
The Government said legal costs can “deter victim-survivors of sexual harassment and other forms of discrimination from commencing legal proceedings.”
The costs protection won’t apply if a court is convinced the work discrimination claim has no serious basis or is unreasonable.
It will also not apply if the alleged perpetrator does not have a “power advantage” over the person who is making the harassment complaint.
This means bringing an unsuccessful complaint against a coworker could still result in a requirement to pay both parties’ legal costs.
However, it means the complainant wouldn’t pay the legal fees of large companies.
Support
Attorney General Mark Dreyfus said the bill aims to address “the significant barriers costs present for applicants”.
Greens spokesperson for Women Larissa Waters told TDA: “Without this… cost model in place, many workers, particularly women, weigh up the trauma and financial risk and decide to stay silent.”
“These laws will not only help workers enforce their rights but also deter misconduct by employers.”
Australian Council of Trade Unions President Michele O’Neil said workplace sexual harassment victim-survivors now have a chance to seek justice “without the fear of financial ruin”.
National Legal Aid director Katherine McKernan said the new laws are “especially important for individuals in low-paid and precarious employment.”
She explained this is because lower paid workers often receive less compensation in harassment claims.
Concerns
The Coalition voted against the costs protection law.
While Liberal Senator Paul Scarr said that “costs should not prevent any Australian going to court”, he raised concerns that small businesses could end up paying large legal fees for baseless claims.
The Law Council of Australia has also raised concerns about the new law, saying it “tilts the balance overly in favour of the applicant”, creating “financial risk” for employers.
