Developments in Discrimination Law

17 April 2012

With the introduction of the new Victorian Equal Opportunity Act 2010 (Vic) and an increasing number of decided cases under section 351 of the Fair Work Act 2009 (Cth) there is a renewed focus on discrimination law as a means of providing real redress for workers.  The Commonwealth Government's review of federal discrimination law has the potential to develop a further avenue to develop a framework of anti-discrimination laws that provide real remedies for workers.

Section 351 Discrimination jurisdiction developing

The number of successful cases prosecuted under section 351 of the Fair Work Act 2009 (Cth) is slowly increasing.  There is still insufficient superior court authority to conclusively state the application of section 351 or its limitations.  However, the decided cases to date are slowly etching out the boundaries and possibilities of this new jurisdiction.

The majority of decided cases are in the Federal Magistrates Court, with only two superior court authorities of substance.  However, a number of emerging points can be identified.

The first concerns how section 351 is to be applied, and whether there is a requirement for a 'comparator'.  In Barclay v The Board of Bendigo Regional Institute of Technical and Further Education [2011] FCAFC 14 the Full Court of the Federal Court said that with the exception of s342(1), Divisions 3 and 4 of Part 3-1 of the Fair Work Act 'do not require that any comparison be undertaken between the treatment of the employee in question and any other employee or employees, actual or notional...' and 'a comparative test is not appropriate'. 

In Stephens v APC, following Barclay, the Federal Magistrate Smith noted that the effect of the Barclay Full Court decision was that 'a contravention (of section 351) is established by showing the proscribed reason for the particular action, without any added test of comparison...'.  It follows that 'even if non-discriminatory by comparison with other employees, the employer can only escape contravention' by establishing one of the section 351(2) defences.  On this reasoning, the section 351 jurisdiction potentially has reach that goes well beyond that of the commonwealth statutes under which a 'comparator test' is required.

The second is the relationship between the proscribed attributes in other relevant discrimination laws and those in section 351.  In Hodkinson v the Commonwealth, the Federal Magistrates Cameron considered the interaction between the proscribed attributes in section 351 of the Fair Work Act, and the relevant definitions under other commonwealth laws.  FM Cameron held that, as section 351 does not employ the word "discrimination" (other than in the heading), there is no link between section 351 and the (in the context of the case) Disability Discrimination Act.  The FM expressly noted that the exceptions in section 352 refer to defences available under other anti-discrimination laws, but held that this was no basis for reading section 351(1) in conformity with other such laws.  It followed that the word "disability" when used in section 351 has its ordinary meaning, and does not have the expanded meaning afforded to that term by the DDA, and that a breach of the DDA (standing alone) will not satisfy the requirements of the Fair Work Act.  For FM Cameron it also followed that 'disability' does not include the 'practical consequence' of the disability. 

In Stephens FM Smith noted the decision in Hodkinson and agreed that the word 'disability' should not draw its meaning from the DDA.  However, Smith said that the 'ordinary meaning' of the word disability should be construed in the context of the Act as a whole and its statutory purpose.  FM Smith said that the provisions were intended to operate 'in the real world' and that it would be inconsistent with the statutory purpose to confine the word 'disability' to the 'underlying diagnosed medical or physiological or psychological conditions'.  FM Smith went on to say that there was a line between a condition inherently part of a disability and some effects which are 'not to be regarded as attributes of the disability itself', but did not define what that line might be.  If the Stephen's reasoning prevails, some of the obstacles federal jurisdiction arising from the decision in Purvis might be overcome. 

The third is the meaning of the word 'discrimination' in section 342 of the Fair Work Act.  In Hodkinson the Federal Magistrate held that section 342(1) discrimination involves "an employer deliberately treating an employee, or group of employees, less favourably than others of its employees".  Relying in part on the dictionary definition of 'discrimination', the Court held that discrimination under section 3 requires intention - a 'conscious decision to make a distinction'.  This element of intention will apply to the act of discrimination itself - if a conscious decision to discriminate was made, that element of adverse action will be made out.  The Barclay test will then apply to determining (with the reverse onus) the 'real reason' that the decision-maker chose deliberately to discriminate as against the Applicant.  On this reasoning, the section 342 'discrimination', while still requiring a comparator, will have a greater focus on 'less favourable' as the indicator of discrimination, rather than being bound by an attempt to import a 'direct' and 'indirect' definition.

However, in Fair Work Ombudsman v Wongtas Pty Ltd (No 2) [2012] FCA 30 - the first successful prosecution by the FWO under section 351 - the Respondent submitted to an agreement statement of facts and agreed contraventions which included a contravention described in the following way:

(e) imposing, or proposing to impose, a condition, requirement or practice that, in order for Ms Ye to retain the office duties and/or on-going employment, Ms Ye:

  (i)  continue performing her packaging duties; and/or
  (ii) not complain about the Second Respondent and/or
  (iii) not make a complaint to the Applicant.

While not the subject of a contested hearing, the description of the contravention clearly imports the test for indirect discrimination - a requirement that, on the Hodkinson reasoning - is not required. 

The fourth key issue relates to evidence - the basis on which many discrimination claims fails in other jurisdictions.  In both Stephen and Hodkinson, the Court held that the Qantas v Gama principles regarding the precise identification of the relevant 'disability' should apply: that is, it is a requirement that a litigant relying on section 351 must clearly particularise the precise nature of the disability alleged.

In Bayford v Maxxia Pty Ltd the Applicant failed to make out adverse action on the basis of family responsibilities in contravention of section 351.  The primary deficiency in the Applicant's case was that he failed to establish any link between his family responsibilities (care of a young child) and the reason proffered by his employer for the termination of his employment (lateness to work).  In his evidence at trial, the Applicant relied on general assertions as to his family responsibilities, but failed to call any evidence that specifically related to the incidents of lateness relied on by his employer to terminate his employment.  In those circumstances, the Court was not satisfied that there was any link between the dismissal and the Applicant's family responsibilities.

Finally, some consideration of remedies is now available.  Among the remedies ordered by the Courts are:

• reinstatement
• penalties
• compensation

In Ucchino, the Federal Magistrate held that damages for non-economic loss ought be assessed in accordance with decision of Justice Greenwood in Ramsey: that is, damages for non-economic loss should only be awarded in cases where there are "unusual exacerbating circumstances".  The Court imposed a penalty of $5, 000, but refused to award any non-economic loss.  This may be an early indicator that awards of non-economic loss are likely to remain constrained and conservative.
In Wongtas, the Federal Magistrate held that an appropriate penalty range was two thirds of the maximum.  This was "reduced by 10% in recognition of the acknowledgements of the breaches and a further 10% to reflect the application of the totality principle to reflect that each of the four charges essentially arose from the same circumstances".

Lessons from the early cases

Lessons from the early cases:
• clearly identify the precise nature of the proscribed attribute
• when alleging a proscribed attribute, be sure to call sufficiently probative evidence of the link between the attribute and its effects (including, where applicable, its affect on the matters offered by the employer as the reason for the adverse action)
• when relying on section 342, ensure you adopt an expansive approach, with a narrow approach (relying on a direct / indirect test) in the alternative
• be sure to argue reliance on another federal discrimination statute as a basis for adverse action in the alternative (pending superior court consideration of the issues raised in Hodkinson)
• medical evidence is almost essential to gain an award of non-economic loss, and assessments of available awards of non-economic loss should be conservative at this time.

New Equal Opportunity Act takes effect in Victoria

In August 2011, major changes to Victorian equal opportunity law commenced operation.  The changes are contained in the new Equal Opportunity Act 2011 (Vic). 

Procedural Changes

There are procedural changes under the new Equal Opportunity Act for discrimination which occurred after August 2010.  You don't have to first file a complaint in the Victorian Equal Opportunity Commission (VEOHRC).  You can file a discrimination complaint directly in the Victorian Civil and Administrative Tribunal (VCAT). 

But you have the option of notifying the VEOHRC of a dispute and the VEOHRC can try and resolve the dispute by informal methods such as conciliation.  However, parties are not required to participate in this informal process.

There is no strict time limit to file a complaint in VCAT, but VCAT may strike out a complaint where the discrimination is more than 12 months old.

Reasonable Adjustments

Under the Accident Compensation Act 1985, employers must meet certain return to work obligations for injured workers, including a requirement to provide suitable employment for 12 months.

After the 12 months, many employers will seek to terminate an injured worker if they are unable to perform all of their pre-injury duties, on the basis that the worker is not able to perform the inherent requirements of the job.

In addition, employers have a tendency to try and define a worker's job by reference to all of the duties that can be performed in the particular establishment.  This is often done under the guise of a rotation policy.  If an injured worker is unable to perform a particular task (even one which they might infrequently perform) an employer may seek to terminate on the basis of "inherent requirements". 

The new Equal Opportunity Act may assist you to represent your injured members where they face termination for this reason.  This is because the new Act has introduced a new positive obligation on employers to make reasonable adjustments.

In particular, an employer must make reasonable adjustments for an employee with impairment, unless the employee cannot adequately perform the genuine and reasonable requirements of the employment even after the adjustments are made.

All of the facts and circumstances must be considered when assessing whether an adjustment is reasonable including:

• the employee's circumstances, including the nature of his or her injury;
• the nature of the adjustment required to accommodate the person's injury;
• the financial circumstances and size and nature of the employer making the adjustment; and
• the consequences for the employee and the employer of making and not making the adjustment.

When you are representing an injured worker, depending on the case, you may want to consider pursuing a discrimination claim under the new Equal Opportunity Act rather than an adverse action claim under the Fair Work Act (FW Act).  This is because the Fair Work Act does not impose a positive obligation on an employer to make reasonable adjustments.  In addition, the Fair Work Act contains a pretty blunt defence for an employer; ie the employer has a good defence if the employee cannot perform the inherent requirements of her or his position.

Direct and Indirect Discrimination

The attributes for unlawful discrimination remain the same (eg race, sex, age etc).  But there are new simplified definitions of direct and indirect discrimination. 

Direct discrimination now occurs if a person treats, or proposes to treat, someone with an attribute unfavourably because of an attribute.  The old definition expressly required a comparison between the complainant and a person who did not possess the same attribute as the complainant.  This was known as the 'comparator test'.

The new Equal Opportunity Act  puts a clearer focus on a causal test.  But a comparator may still be relevant as a practical way of assessing whether the direct discrimination is for a prohibited attribute.

Indirect discrimination now occurs if a person imposes or proposes to impose a requirement, condition or practice that has or is likely to have the effect of disadvantaging persons with an attribute and that is not reasonable.  The new definition of indirect discrimination, simplifies what was a much more technical test which included a proportionality test.  

Under the new test, to determine whether a requirement, condition or practice is reasonable will depend on all the relevant circumstances of the case, including:

• the nature and extent of the disadvantage caused
• whether the disadvantage is proportionate to the result sought by the person who imposes or proposes to impose the requirement condition or practice
• the cost of any alternative requirement, condition or practice
• the financial circumstances of the person imposing or proposing to impose the requirement, condition or practice, and
• whether reasonable adjustments or reasonable accommodation could be made to the requirement, condition or practice to reduce the disadvantage caused, including the availability of an alternative requirement, condition or practice that would achieve the result sought.

Because the Equal Opportunity Act is new, there is no case law.  But over the next few years we can expect a number of test cases which help interpret the meaning of the new provisions.


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