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The business impact of proposed religious discrimination laws

Attorney-General Christian Porter

Employers are urged to be mindful of proposed legislation put forward which aims to target religious discrimination in the workplace.

Last week, Attorney-General Christian Porter unveiled the Australian government’s draft Religious Discrimination Bill, which he said would extend “protections to provide protection for people against discrimination on the basis of their religion or religious belief, or lack thereof”.

“The bill would make it unlawful to discriminate on the basis of religious belief or activity in key areas of public life. The bill does not create a positive right to freedom of religion,” the A-G said.

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What the government is proposing is a shield, not a sword, Mr Porter added.

Breaking down the bill and its impact, CEO of the Institute of Certified Management Accountants (ICMA) Professor Janek Ratnatunga advised professionals to be particularly mindful of what’s being described as the “Folau Clause”.

The “Folau Clause” relates to a matter concerning Israel Folau, whose comments on his private social media account ultimately led to the termination of his contract with Rugby Australia.

Under this clause, additional requirements will be imposed upon businesses with annual revenue of at least $50 million when it comes to standards of dress, appearance or behaviour that limit religious expression.

Professor Ratnatunga noted the bill states that such restrictions must be shown to be necessary to “avoid unjustifiable financial hardship on the business”. The process of calculating potential financial hardship will fall on financial professionals, particularly management accountants, he added.

“The application of the ‘Folau Clause’ means organisations will have to prove that their social media rules relating to religious expression, and subsequent actions taken, are in place to protect their brand,” Professor Ratnatunga said.

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“However, as the impact of individual social media activity on brand reputation is impossible to quantify, the draft bill instead defines the impact on the brand in financial terms, i.e. as causing ‘unjustifiable financial hardship on the business’.”

In this particular case, Rugby Australia’s primary revenue is derived from ticket sales, broadcast rights, government grants and sponsorships, Professor Ratnatunga said.

“The revenue source that has garnered the most attention for potentially unjustifiable financial impact is corporate sponsorship, which accounts for 22 per cent of Rugby Australia’s total income,” he explained.

“Rugby Australia’s major sponsor, Qantas, clearly has to distance itself from the Folau case, as it may be considered an accessory to any breach and become a target for legal action if Rugby Australia is found guilty of wrongful dismissal.”

Had the Folau case arisen following the bill’s implementation, Rugby Australia would have to prove that Qantas was going to discontinue sponsorship, thereby demonstrating “financial hardship”, Professor Ratnatunga said.

“At the same time, Qantas would have to reject any such claim, or face the consequences of Mr Folau winning his case and citing them as an accessory to any breach.”

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The business impact of proposed religious discrimination laws
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