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Dispute Resolution & Litigation
Modern Slavery Reporting Requirements For Australian Subsidiaries and Foreign Entities in Australia
As we approach mid-year, many Australian subsidiaries of multinational corporations and foreign entities registered in Australia should be preparing their modern slavery statements. This article examines the reporting obligations under Australian laws, including the critical issue of revenue consolidation that often catches foreign-owned entities by surprise. The Reporting ObligationAustralia’s Modern Slavery Act 2018 (Cth) (the “Act”) requires entities to submit annual modern slavery statements if they meet the revenue threshold. The statement must be lodged within 6 months after the end of the reporting entity’s financial year. Who Must Report?The Act captures:• Australian entities with annual consolidated revenue of at least $100 million• Foreign entities carrying on business in Australia (e.g. Australian branch of overseas companies) with annual consolidated revenue of at least $100 millionThe legislation uses consolidated revenue worked out in accordance with the Australian accounting standards, meaning it may be necessary to look beyond the single legal entity and to the wider corporate group. The $100 Million Threshold: Consolidated RevenueThe $100 million threshold is based on consolidated revenue, not the Australian subsidiary’s standalone revenue. This is an often overlooked point when businesses determine whether they are under reporting obligations. This means multinational corporations with Australian operations and/or subsidiaries will need to take particular care and potentially apply the threshold test at both the parent entity level and the subsidiary level. By way of example:• a foreign company with an Australian subsidiary with local revenue of only $30 million may still have reporting obligations if it also carries on business in Australia apart from the subsidiary (e.g. through an Australian branch or otherwise) and has global revenue of $80 million (in addition to the Australian subsidiary’s revenue); • an Australian subsidiary with local revenue of only $30 million may still have reporting obligations if it controls other downstream foreign entities with overseas-sourced revenue of $80 million. This catches many Australian entities and branches off-guard, particularly those of Asia-Pacific, European, and North American parent companies operating substantial global operations. Mandatory Content RequirementsEach statement must address seven mandatory criteria:1. Identity of the reporting entity;2. Structure, operations and supply chains;3. Modern slavery risks in operations and supply chains;4. Actions taken to assess and address those risks, including due diligence and remediation processes;5. Effectiveness of actions taken;6. Consultation process with owned or controlled entities; and7. Any other relevant information. The Public RegisterAll statements are published on a public, searchable register maintained by the Attorney-General’s Department (https://modernslaveryregister.gov.au/). This creates reputational risk for non-compliance or inadequate disclosure.Further, where an entity fails to comply with its reporting obligations, the Minister has powers under the Act to request an explanation and remedial action. If the entity does not comply with this request, the Minister may publish the entity’s name and details on the public register, which may result in reputational damage. Enforcement Landscape: Penalties Are ComingThe current absence of penalties has created a false sense of security. This is about to change. The McMillan ReviewIn May 2023, Professor John McMillan AO completed a comprehensive statutory review of the Act’s first three years. His findings were stark: the Act had not "yet caused meaningful change for people living in conditions of modern slavery” and modern slavery statement reporting was "frequently deficient'.The review made 30 recommendations to strengthen the Act, with civil penalties as a central reform. The review recommended penalties for:• Failing to submit a modern slavery statement;• Knowingly providing false or misleading information in statements;• Non-compliance with Ministerial requests for remedial action.While specific penalty amounts were not recommended, the review referenced comparable regimes with penalties ranging from CAD $250,000 (Canada) to AUD $1.1 million (former NSW regime).The review also recommended lowering the reporting threshold from $100 million to $50 million in annual consolidated revenue, which would extend reporting obligations to a significantly wider group of entities. The Government has not adopted this recommendation at this stage, but entities with consolidated revenue approaching $100 million should monitor developments closely. Government ResponseIn December 2024, the Australian Government published its response. Importantly, the Government “agrees in principle” to introduce civil penalties for non-compliance, with stakeholder consultation to follow on the penalty framework design.Additionally, Chris Evans commenced as Australia’s first Anti-Slavery Commissioner on 2 December 2024, with a mandate to increase compliance, support businesses, and prepare updated guidance for reporting entities. The Commissioner is expected to have powers to publish lists of non-compliant entities and declare high-risk industries, regions and products.Although no implementation timeline has been announced, the direction of reform is clear – civil penalties are expected to be introduced, the Anti-Slavery Commissioner is now operational and may publish lists of non-compliant entities, and entities that have never reported despite meeting the threshold face potential exposure across multiple reporting periods, alongside potential “bluewashing” claims under section 18 of the Australian Consumer Law. Entities that continue to ignore their obligations risk creating permanent public records of non-compliance and exposure to penalties that may apply once the penalty regime commences. Practical Steps for ComplianceAustralian subsidiaries and branches of multinational corporations should:1. Assess the obligation immediately: determine whether consolidated revenue exceeds $100 million;2. Identify the reporting entity: determine whether the Australian subsidiary or parent company will report;3. Consider joint statements: a parent and one or more of its Australian subsidiaries may submit a joint statement provided that the consultation requirements under the Act are met;4. Map supply chains: identify modern slavery risks in operations and procurement;5. Document due diligence processes: collate evidence of risk assessment and remediation; and6. Prepare for disclosure: ensure statements can withstand public and regulatory scrutiny once published on the register. Assistance with ComplianceModern slavery reporting is not a box-ticking exercise. Statements become permanent public records, and with the reforms described above now imminent, inadequate disclosure carries reputational, regulatory, contractual and consumer law risks. Reporting entities – particularly those navigating revenue consolidation, supply chain risk, or cross-border group structures – should consider obtaining professional advice before lodging.H & H Lawyers has assisted many multinational corporations and their Australian subsidiaries and foreign branches with modern slavery compliance, including:• Revenue threshold assessments and obligation determination;• Statement preparation, review and lodgement;• Supply chain risk assessments across multiple jurisdictions;• Due diligence, process design and various internal documentation;• Coordination with overseas parent companies and group entities, supported by our bilingual capabilities; and• Remediation of past non-compliance.For many multinational corporations, their Australian subsidiary’s reporting obligation only becomes apparent when consolidated revenue is properly analysed. We encourage all subsidiaries and branches of multinational corporations to assess their position and achieve compliance before the penalty regime commences. The cost of doing so may well be modest compared with the reputational damage, penalty exposure and operational disruption of non-compliance. For assistance with modern slavery reporting obligations, please contact us. Disclaimer: This article is for general information purposes only and does not constitute legal advice. The information is current as at May 2026 but laws and regulations are subject to change. Modern slavery reporting obligations depend on your specific circumstances. You should seek professional legal advice before taking any action based on this article. Liability limited by a scheme approved under the Professional Standards Legislation.
Dispute Resolution & Litigation
Artificial Intelligence (AI) and International Arbitration
International arbitration has long been valued for its flexibility, neutrality, and adaptability. In recent years, however, the emergence of artificial intelligence (AI) has introduced a new set of opportunities and challenges that are likely to reshape arbitral practice. Unlike earlier waves of technological change, AI has a particularly pervasive impact: it is capable of touching almost every stage of the arbitral lifecycle; from pre-dispute planning and arbitrator selection to evidentiary and document review, hearings, award drafting, and enforcement. AI in the Context of International Arbitration AI in arbitration may be grouped into several broad categories: • Language and speech technologies: real-time transcription, machine translation, speech analytics, and voice synthesis. • Document and data analysis: technology-assisted review (TAR), document clustering, contract analytics, and predictive search. • Reasoning and drafting support: summarisation, brief drafting, case law synthesis, and award-structuring tools. • Forensics and authenticity: detection of manipulated evidence, such as deepfakes, and analysis of metadata. • Decision support and analytics: outcome prediction, damages modelling, and arbitrator selection analytics. Each class of AI raises distinct questions regarding admissibility, transparency, fairness, and due process, all of which are central to the credibility, integrity and legitimacy of arbitral proceedings. Impact Across the Arbitral Lifecycle Pre-dispute Planning and Arbitrator Selection AI is increasingly shaping arbitration before disputes even arise. Contract drafters now anticipate AI-related risks by including specific provisions in arbitration clauses; for example, restrictions on uploading confidential information to public AI systems, or agreement on translation protocols.In arbitrator selection, AI-driven analytics tools reveal past decision-making patterns, areas of expertise, and potential conflicts. These tools broaden candidate pools and might assist in promoting diversity. However, there is also a danger of over-reliance on statistical patterns, creating feedback loops that favour “safe” or well-documented profiles, while sidelining lesser-known but equally qualified candidates. The key future challenge might be ensuring that arbitrator appointments remain a human decision, informed (but not dictated) by algorithms. Pleadings and Written Submissions AI tools assist counsel in drafting, citation-checking, and issue-spotting, leading to faster production of submissions. However, they also raise the very real risk of ‘hallucinations’, in which non-existent cases or inaccurate authorities are cited. If not carefully verified, such errors may undermine the credibility of submissions and result in disciplinary and costs sanctions.Tribunals may need to implement integrity protocols requiring parties to certify that authorities cited have been human-verified and that any AI-generated drafting has been carefully reviewed. In short, efficiency gains must not come at the expense of accuracy and reliability. Evidence and Document Production One of the most transformative effects of AI is in document review. TAR and clustering tools can reduce costs and streamline discovery, especially in multilingual disputes. But new problems may arise: • Privilege risks: Uploading confidential or privileged documents into public AI systems may inadvertently waive privilege or breach confidentiality obligations. • Authenticity concerns: The rise of deepfakes means tribunals must adopt more robust standards for authenticating video, audio, and photographic evidence. Best practices include adopting AI evidence protocols that require disclosure of the tool used, validation steps, and an auditable chain of custody. Tribunals should also anticipate the need for forensic experts to test the reliability of AI-processed evidence.Although AI can accelerate document production, it can also magnify risks of privilege breaches and fabricated evidence. Hearings AI is already embedded in arbitral hearings through transcription and machine translation. While these tools enhance accessibility, they introduce risks of misinterpretation that may unfairly affect witness credibility. More troubling is the possibility of covert AI assistance during testimony; for example, perhaps even the rather outlandish-sounding risk that a witness might receive real-time AI-generated prompts. Tribunals should consider addressing these risks in their procedural orders by: • approving specific transcription and translation tools, • prohibiting generative assistance during testimony, and • ensuring technological parity so that neither party has an unfair advantage. Going forward, procedural fairness is likely to require careful management of AI use during hearings. Deliberations and Award Drafting AI may certainly help arbitrators structure factual chronologies or verify consistency within an award. However, using AI in deliberations themselves raises two fundamental risks: • Breach of confidentiality: Uploading draft awards to external AI systems may compromise deliberation secrecy. • Improper delegation: If arbitrators rely on ‘opaque’ algorithms to decide on questions of facts or law, the award may be vulnerable to challenge under the New York Convention. The appropriate role for AI should therefore be limited to clerical or stylistic support, with substantive determinations reserved for the tribunal. Arbitrators must ensure that their awards are demonstrably the product of human reasoning. AI should assist, but never replace, the tribunal’s independent judgment. Post-Award Challenges and Enforcement AI use in arbitration could foreseeably feature prominently in set aside and enforcement proceedings. Parties may challenge awards on the grounds that undisclosed reliance on AI deprived them of due process (New York Convention, Article V(1)(b)) or that the award violates public policy (Art. V(2)(b)). Tribunals should mitigate such risks by keeping sealed records of any AI assistance used in drafting, limited to clerical tasks. This approach allows them to rebut speculative challenges without breaching deliberation secrecy. Regulatory and Ethical Considerations AI use runs the risk of introducing several cross-border tensions: • Data protection: Rules such as the EU’s GDPR, China’s PIPL, and Brazil’s LGPD complicate the use of AI platforms that transfer or store personal data abroad. • Confidentiality: Many consumer AI systems retain and train on user data, which conflicts with arbitration confidentiality obligations. • Export controls and sanctions: Some AI technologies are subject to restrictions, which may impact their use depending on the seat of arbitration. • Professional duties: Counsel must exercise competence and candour when using AI. Submitting unverified AI-generated content may breach professional ethics. Regulatory compliance and ethical oversight are essential in order to safeguard the legitimacy of arbitration. Costs, Time, and Environmental Impact AI can reduce costs by streamlining document review and shortening timelines, but it can also generate inefficiencies if inappropriately used. For example, hallucinated citations may necessitate costly corrections. From an environmental perspective, AI may reduce travel by enabling remote hearings, though large scale computation carries its own carbon footprint. It is likely that, in the future, tribunals will increasingly scrutinise whether parties’ AI-related expenditures are proportionate and recoverable as costs of arbitration. AI can undoubtedly make arbitration faster and cheaper if deployed responsibly, but careless use can equally have the opposite effect. Snapshot of Strategic Opportunities and Risks Opportunities: • More accurate multilingual proceedings through AI translation. • Faster and more efficient document review • Enhanced damages modelling and tribunal analytics. • Broader and more diverse arbitrator lists. Risks: • Hallucinated citations and unreliable outputs. • Privilege waivers from inappropriate AI use. • Undisclosed reliance on AI during testimony or deliberations. • Awards undermined by improper delegation to AI systems. Some Recommendations for Good Practice To integrate AI responsibly into international arbitration, tribunals and parties should adopt the following measures: • Include explicit AI provisions in Procedural Order No. 1, covering use, disclosure, authentication, and sanctions. • Require the use of enterprise-grade AI tools that do not train on confidential inputs. • Approve common translation and transcription platforms to ensure parity. • Mandate disclosure of method statements and validation for AI-processed evidence. • Establish forensic protocols for ‘deepfake’ detection. • Ensure that all substantive decisions remain with the tribunal. • Maintain audit trails of AI usage for accountability. • Allocate costs proportionately, rewarding efficient use and penalising misuse. • Safeguard deliberation secrecy by prohibiting external AI in award drafting. • Prepare enforcement-ready records to counter challenges under the New York Convention.
Dispute Resolution & Litigation
High Court Clarifies Definition of Casual Employee
As one of the most significant decisions by the High Court in 2021, the High Court has determined the meaning of a casual employee in Workpac Pty Ltd v Rossato [2021] HCA 23. Mr Rossato was employed as a production worker by Workpac’s labour-hire company under a series of six contracts, or assignments, to perform work for one of Workpac’s clients. While Mr Rossato was required to work regular and full-time hours according to a fixed pattern of work, Workpac treated Mr Rossato as a casual employee, such that Mr Rossato was not paid the leave or public holiday entitlements under the Fair Work Act 2009 (Cth) (the Act) and the enterprise agreement. The Court confirmed that the question of whether a person is a casual employee is to be determined by considering the express terms of a written employment contract, and not on the basis of any subsequent conduct of either party. To this extent, the court held any such commitment to further work must be contained in an enforceable agreement to be recognised. The High Court held that a casual employee is an employee who has no “firm advance commitment as to the duration of the employee’s employment or the days (or hours) the employee will work” and provides no reciprocal commitment to the employer. In considering the nature of the commitment, the court held that ‘the existence or otherwise of a “firm advanced commitment” must be for enforceable terms’, and should not be held to exist from expectations or understandings borne from the manner in which the parties have performed their agreement. The High Court held that a mere expectation of continuing employment on a regular and systematic basis is not sufficient for the purposes of the Act. Mr Rossato’s employment was expressly on an “assignment by assignment basis”. Mr Rossato was entitled to accept or reject any offer of an assignment, and at the completion of each assignment Workpac was under no obligation to offer further assignments. The High Court also held that it was not the role of the courts to “moderate a perceived unfairness resulting from a disparity in bargaining power between the parties”. In relation to the employment relationship, it should be noted that the High Court held in BP Refinery (Westernport) Pty Ltd v Shire of Hastings (1977) 180 CLR 266 that: 1. while mutual undertakings may not always be express, where there are express terms of the contract between the parties, they must be given effect unless they are contrary to statute; 2. if the mutual undertakings are said to be implied in what has been agreed, they cannot be inconsistent with the express terms of the contract; and 3. if the mutual undertakings are to be inferred from the conduct, then they may take effect as contractual variations. This decision by the High Court in Workpac v Rossato is important for both employers and employees as it reinforces the importance of specifying the terms of the contract in writing, taking into account the key features of the High Court’s decision. It is also important that casual contract terms and employer’s policies are carefully reviewed to ensure that they do not create any unintentional implied mutual obligations or variations inferred from the conduct. It is also worth noting that a new provision of s 66B of the Act has been introduced which requires employers to offer casual employees to become permanent employees if they have been employed for 12 months and have worked regular and systematic patterns in the last six months. Disclaimer: The contents of this publication are general in nature and do not constitute legal advice. The information may have been obtained from external sources and we do not guarantee the accuracy or currency of the information at the date of publication or in the future. Please obtain legal advice specific to your circumstances before taking any action on matters discussed in this publication.