One industry sector continues to struggle with new OHS obligations

Some companies and industry sectors are struggling to cope with a major change to Australia’s occupational health and safety laws – the removal of the employer/employee relationship.  One example of an industry struggling with the change is the sex industry, more specifically, the licensed brothels.

In many industries, and in the safety profession itself, people confuse the OHS laws of injury prevention with the Compensation laws of rehabilitation.  In Australia these are two separate sets of laws, administered, often, by different government agencies and through different mechanisms, even though to effectively manage workers business needs to operate as if the demarcation does not exist. Many industries and professionals also make the common mistake of believing that a judgement in one area of law applies to other areas.

For many years the brothel industry* in Victoria, in particular, has believed that a ruling by the Australian Taxation Office (ATO) – that sex workers (or sexual service providers, the preferred term by the brothel industry) are not employees of the brothels – also relates to the OHS laws.  The argument goes that, as the ATO has said that no employment relationship exists for taxation purposes, there are no, or limited, OHS obligations on the brothel owners for the sexworkers.  This is bollocks, has always been bollocks and I have personally advised representatives of the brothel industry over many years that it is bollocks but the misunderstanding persists.  Sadly, this persistence could impede the progress of the brothel industry to comply with the new Work Health and Safety laws.

A 17 February 2012 submission to Fair Work Australia by Scarlet Alliance illustrates this problem:

“There are a number of structural barriers to sex workers being able access the Fair Work legislation.  The main barrier is the lack of clarity around employment status and the separation of remedial action between employees and contractors.

The assessment of whether a worker is an employee or a contractor is well established. However this assessment is made on a case by case basis making a decision widely applicable across an industry like the sex industry difficult.

A primary driver (at least in NSW) for determining employment status is taxation law.  Businesses who engage contractors are not obliged to pay income tax, payroll tax, leave, superannuation or casual loadings for their workers.

Many establishments have engaged workers in a form of contracting. Some of these relationships could be better described as a co-operative business relationship.  Sex workers are able to work from the establishment, however clients rent the rooms from the business owners and contracts directly with the sex worker.  This arrangement technically avoids a direct relationship between the brothel owner and sex worker.

However there can often be extra requirements that a sex worker must meet in order to continue working in a particular brothel with these arrangements.  These can include; predetermined rates the sex workers are able to charge; requirement to be available for full shifts, scheduled in advance; to pay “fines” to the brothel if they arrive late, leave early or are not considered to be dressed to required standard (such as chipped fingernail polish); being directed to perform other duties associated with their work (cleaning, washing, introductions and companionship).”

As the submission was to Fair Work Australia, it is perhaps understandable that Scarlet Alliance did not progress the OHS argument on working conditions.  However Scarlet Alliance presented its argument against the employer/employee argument in its 2000 publication “A guide to best practice – Occupational health and safety in the Australian sex industry

“Due to the illegality of sex work in some jurisdictions and the lack of legal testing of the work status of sex workers, it has been difficult to determine a clear status either way, as to whether sex workers are employees or sub-contractors.

The difficulty is further exacerbated by the benefits to owners and operators of treating workers as independent contractors or contract workers, rather than employees, regardless of the reality of the working relationship. In many cases, owners and operators deem sex workers to be contract workers rather than employees.

Defining sex workers as contract workers is a means of owners and operators ignoring their obligations to employees. In many workplaces, the reality is that sex workers are employees, with employee rights and obligations, rather than contract workers.”

(Around the same time I wrote an article in the June 2000 edition of Australian Safety Magazine discussing some of the OHS issues.)

The approach of the brothel industry is similar to that of many other industries who try to avoid OHS obligations rather than accept those obligations and integrate them into the business model.  The brothel industry also argues that it is as legitimate a business as any other so in that case, why then argue against workplace health and safety obligations that all businesses have had for at least 35 years?

The brothel industry has never argued that sexworkers are volunteers but the argument over employee status has a few similarities with the current unrest in some Australian volunteer organisations.  Where some volunteer organisations may feel that new work health and safety obligations have been sprung on them, that is not the case with the brothel industry.  The brothel industry has been actively denying, or at least arguing to minimise, its broad OHS obligations over a long period.

It is time for the brothel industry to realise that that strategy has less authority now than it ever had (and I believe it never had any).  If it continues to misunderstand its OHS obligations and if its representatives continue to argue into a dead-end, the industry could suffer greatly leading to poor working conditions for sexworkers.  And it risks many more legal cases similar to the Butterflys of Blackburn case.

Kevin Jones

*The sensitivity of the brothel owners may not be helped by reports such as this one by Bernie Gallagher of the ATO which says

“As Special Audit targets, brothel owners and escort service promoters provide better revenue incentives and more reliable recovery prospects than industry employees.”

reservoir, victoria, australia
Categories brothel, business, government, hazards, law, OHS, risk, safety, sex, workplaceTags , , ,

5 thoughts on “One industry sector continues to struggle with new OHS obligations”

  1. The biggest issue for all within the safety and workers compensation industries to get over is the taboo subject of the sex industry.

    Brothels are a workplace just the same as every other workplace they have safety requirements for their employees and for their clients.

    Thank you Kevin for writing this most important article.

  2. Kevin, thanks for your post. You wrote ‘In many industries, and in the safety profession itself, people confuse the OHS laws of injury prevention with the Compensation laws of rehabilitation… Many industries and professionals also make the common mistake of believing that a judgement in one area of law applies to other areas.’ Another section with similar confusion, not at all related to the sex industry, is the emergency services sector. They rely heavily on volunteers and have been confused over the link between OHS anc compensation laws. I think this has led to confusion over the new laws; volunteer emergency service workers have been deemed employees for the purposes of workers compensation for some time so people thought they were also covered by OHS laws. They now see changes to the OHS laws and think they must be some new way to ‘get’ them not in fact an attempt to bring both areas of law into line. If I can be so bold as to repost to my own blog, in December 2009 I wrote on the link between OHS and compensation law and this may be of interest to your readers. See
    Michael Eburn

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