Discrimination and adverse action at work; general protections

There is a fine distinction between adverse action and discrimination, and the inter relationship between the two statutory concepts is explained in this excellent extract from a recent decision of the Federal Court in a general protections’ case.

 

“THE PRINCIPLES

Section 340(1) of the FW Act

  1. Under s 340(1) of the FW Act, a person must not take adverse action against another person because the other person, relevantly, exercised or proposes to exercise a workplace right. The applicant bears the onus of proving that:

(1)          the conduct alleged by the applicant occurred;

(2)          that conduct constitutes “adverse action” for the purposes of s 342(1);

(3)          the right alleged was a “workplace right”; and

(4)          the applicant had, exercised (or not exercised), or proposed to exercise (or proposed not to exercise), the “workplace right”.

(See Tattsbet Ltd v Morrow (2015) 233 FCR 46 at [119]; Construction, Forestry, Mining and Energy Union v Anglo Coal (Dawson Services) Pty Ltd (2015) 238 FCR 273 at [76].)

  1. If s 361 of the FW Act is engaged, the onus is on the respondent to prove that the adverse action was not taken because the applicant had exercised (or did not exercise), or proposed to exercise (or proposed not to exercise), the “workplace right”.

Workplace rights

  1. Dr Morton pleads that she exercised, or proposed to exercise, “workplace rights” within the meaning of that expression in s 341(1) of the FW Act. The workplace rights alleged include her right to make complaints under the Enterprise Agreement 2011-2014 (the Enterprise Agreement), to receive redundancy and redeployment benefits under the Enterprise Bargaining Agreement and to apply for and to receive benefits under the SRC Act.
  1. In Shea v TRUenergy Services Pty Ltd (No 6) (2014) 242 IR 1; [2014] FCA 271, Dodds-Streeton J said at [29], in relation to a “complaint”:

(a)          a complaint is a communication which, whether expressly or implicitly, as a matter of substance, irrespective of the words used, conveys a grievance, a finding of fault or accusation;

(b)          the grievance, finding of fault or accusation must be genuinely held or considered valid by the complainant;

(c)          the grievance, finding of fault or accusation need not be substantiated, proved or ultimately established, but the exercise of the workplace right constituted by the making of the complaint must be in good faith and for a proper purpose;

(d)          the proper purpose of making a complaint is giving notification of the grievance, accusation or finding of fault so that it may be, at least, received and, where appropriate, investigated or redressed. If a grievance or accusation is communicated in order to achieve some extraneous purpose unrelated to its notification, investigation or redress, it is not a complaint made in good faith for a proper purpose and is not within the ambit of s 341(1)(c)(ii);

(e)          a complaint may be made not only to an external authority or party with the power to enforce or require compliance or redress, but may be made to persons including an employer, or to an investigator appointed by the employer;

(f)           a complaint that an employee is able to make in relation to his or her employment is not at large, but must be founded on a source of entitlement, whether instrumental or otherwise; and

(g)          a complaint is limited to a grievance, finding of fault or accusation that satisfies the criteria in s 341(1)(c)(ii) and does not extend to other grievances merely because they are communicated contemporaneously or in association with the complaint. Nor does a complaint comprehend contemporaneous or associated conduct which is beyond what is reasonable for the communication of the grievance or accusation.

  1. Justice Dodds-Streeton added at [625], in a passage recently approved in Cigarette & Gift Warehouse v Whelan [2019] FCAFC 16 at [28]:

In my opinion, the requirement that the complaint be one that the employee “is able to make” in relation to his or her employment suggests that there are complaints which the employee is not able to make in relation to his or her employment. The ability to make a complaint does not arise simply because the complainant is an employee of the employer. Rather, it must be underpinned by an entitlement or right. The source of such entitlement would include, even if it is not limited to, an instrument, such as a contract of employment, award or legislation.

  1. I do not understand CSIRO to dispute that the rights pleaded by Dr Morton were “workplace rights”, or that Dr Morton had such rights. In some instances, however, CSIRO disputes that she in fact exercised those rights.

Adverse action

  1. Under s 342(1) of the FW Act, adverse action, relevantly, consists of (a) an employer dismissing the employee; (b) injuring the employee in his or her employment; (c) altering the position of the employee to the employee’s prejudice; or (d) discriminating between the employee and other employees of the employer.
  1. In Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (No 3) (1998) 195 CLR 1, the High Court held at 18:

Paragraph (a) covers termination of employment; par (b) covers injury of any compensable kind; par (c) is a broad additional category which covers not only legal injury but any adverse affection of, or deterioration in, the advantages enjoyed by the employee before the conduct in question.

  1. In Maritime Union Authority v Geraldton Port Authority (1999) 93 FCR 34, Nicholson J held at [244] and [246] that an offer of voluntary redundancy is not a dismissal or a threat to injure an employee in his or her employment.
  1. In Squires v Flight Stewards Association of Australia (1982) IR 155, the words “injure in his employment” were considered at 164:

The words ‘injure in his employment’ are in the context of s.5 words of wide import. I do not regard them as referring only to financial injury or injury involving the deprivation of rights which the employee has under a contract of service. They are, in my view, applicable to any circumstance where an employee in the course of his employment is treated substantially differently to the manner in which he or she is ordinarily treated and where that treatment can be seen to be seen injurious or prejudicial.

However, that expression seems to have been more narrowly construed in Patrick Stevedores.

  1. In Qantas Airways Ltd v Australian Licenced Aircraft Engineers Association (2012) 202 FCR 244, the Full Court said at [32]:

The authorities thus establish that a prejudicial alteration to the position of an employee may occur even though the employee suffers no loss or infringement of a legal right. It will occur if the alteration in the employee’s position is real and substantial rather than merely possible or hypothetical.

  1. In Auimatagi v Australian Building and Construction Commissioner (2018) 363 ALR 246; [2018] FCAFC 191, the Full Court held at [114] that “prejudice” is a word of wide import. The Full Court also held at [109] that prejudice is a matter of fact, and is therefore necessary to be proved.
  1. I will consider the meaning of “discriminate” later in these reasons, in connection with s 351 of the FW Act.
  1. For the purposes of this case, it is unnecessary to consider the precise distinctions between the four relevant categories of “adverse action”.

Adverse action taken because the person has exercised, or proposed to exercise, a workplace right

  1. Section 361(1) of the FW Act provides, relevantly, that if the applicant has alleged that a person has taken action for a particular reason or with a particular intent, and taking that action for that reason or with that intent would constitute a contravention of Part 3, it is presumed that the action was taken for that reason or with that intent, unless the person proves otherwise.
  1. In order to take advantage of s 361(1), an applicant must plead the relevant intention or reason and all the material facts concerning the contraventions alleged against the respondent: Australian Building and Construction Commissioner v Hall (2018) 277 IR 75; [2018] FCAFC 83 at [13]–[19].
  1. In State of Victoria (Office of Public Prosecutions) v Grant (2014) 246 IR 441; [2014] FCAFC 184, the Full Court described at [32] the principles from Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500 and Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2014) 253 CLR 243 as follows:

Ÿ           The central question to be determined is one of fact. It is: “Why was the adverse action taken?”

Ÿ           That question is to be answered having regard to all the facts established in the proceeding.

Ÿ           The court is concerned to determine the actual reason or reasons which motivated the decision-maker. The court is not required to determine whether some proscribed reason had subconsciously influenced the decision-maker. Nor should such an enquiry be made.

Ÿ           It will be “extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer.”

Ÿ           Even if the decision-maker gives evidence that he or she acted solely for non proscribed reasons other evidence (including contradictory evidence given by the decision-maker) may render such assertions unreliable.

Ÿ           If, however, the decision-maker’s testimony is accepted as reliable it will be capable of discharging the burden imposed on the employer by s 361.

  1. In Hall, the Full Court held at [100]:

The orthodox approach to dealing with allegations of adverse action said to be engaged in “because” of a particular circumstance requires the party making such an allegation to establish the existence of the circumstance as an objective fact.  If an applicant, on the whole of the evidence, establishes, to the Briginshaw standard, that the elements of a particular contravention (other than the reasons for the respondent taking action) exist and if the respondent wishes to avoid an adverse finding in respect of the alleged contravention the respondent will bear the onus to establish, on the balance of probabilities, that he or she had not acted for any proscribed reason. As has already been noted above, s 360 contemplates that there might be multiple reasons for a respondent taking action to the prejudice of the applicant. A reason will not be proscribed unless it is “a substantial and operative factor” in the respondents’ reasons for taking the adverse action.

(Citations omitted.)

Section 343 of the FW Act

  1. Section 343(1) of the FW Act provides, relevantly, that a person must not take or threaten to take any action against another person with intent to coerce the other person to not exercise a workplace right.
  1. Coercion under s 343(1) of the FW Act involves two elements:

(1)          an intention to negate choice; and

(2)          the use of unlawful, illegitimate or unconscionable means in relation to the exercise, non-exercise or proposed exercise, of a workplace right.

  1. In relation to the first element, Weinberg J held in National Tertiary Education Industry Union v Commonwealth (2002) 117 FCR 114 at [103]:

What is required is an intent to negate choice, and not merely an intent to influence or persuade or induce. Coercion implies a high degree of compulsion, at least in a practical sense, and not some lesser form of pressure by which a person is left with a realistic choice as to whether or not to comply.

  1. Similarly, in Seven Network (Operations) Ltd v Communications, Electrical, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (2001) 109 FCR 378 at [41], Merkel J said:

First it needs to be shown that it was intended that pressure be exerted which, in a practical sense will negate choice.

  1. In National Tertiary Education Industry Union v Commonwealth, Weinberg J held at [97]:

The expression “the intent to coerce” should be construed as requiring something more than a mere inducement to comply. The term “coercion” connotes something akin to the use of force, or at least threat of harm to the interests of another.

  1. In Esso Australia Pty Ltd v The Australian Workers’ Union (2016) 245 FCR 39, it was held at [194] that the second element—whether the conduct is unlawful, illegitimate or unconscionable—involves an objective test.
  1. In Commonwealth Bank of Australia v Finance Sector Union of Australia (2006) 154 IR 467; [2006] FCA 1048, it was held at [50] that conduct would be illegitimate if it would, “strike the reasonable observer as seriously contrary to generally held notions of morality”. In Kakavas v Crown Melbourne (2013) 250 CLR 392, the High Court held at [118] that there is unconscionable conduct where there is:

an unconscientious taking advantage by one party of some disabling condition or circumstance that seriously affects the ability of the other party to make a rational judgment as to his or her own best interests.

  1. In Auimatagi, the Full Court held:

[157]         The notion of unconscionability, as imposing a standard of right behaviour formed around conscience, will take its content from the values and expected conduct in an industrial setting. It is a word best understood in its practical application to real life settings where there can be an articulation and expression of why, in an employment and industrial context, the pressure sought to be exerted should be ascribed such a description of departing from right behaviour.

[158]         Although illegitimacy can be seen to be a similar conception to unconscionability as a word connoting a degree of right behaviour, illegitimacy has emerged (rightly or wrongly) as its own separate category of behaviour…

[159]         The notion of proportionality has been said to inform the concept of illegitimacy, in an assessment whether there is a reasonable or justifiable connection between the nature of the demand made and the nature of the pressure exerted.

(Citations omitted.)

  1. In Hall, the Full Court held at [26] that if there is a failure to plead the intent to negate choice required by the first element of coercion in s 343, the presumption under s 361 will not operate. The burden will then remain on the applicant to prove that the action was taken with the requisite intent. In that case, the Court concluded at [41] that the expression, “intent to coerce”, without more, was ambiguous and did not convey the particular intent required.

Section 351 of the FW Act

  1. Section 351(1) of the FW Act provides that an employer must not take adverse action against a person who is an employee of the employer because of, relevantly, the person’s sex or sexual orientation. Under s 351(2)(a), 351(1) does not apply to action that is not unlawful under an applicable anti-discrimination law set out in s 351(3).
  1. In Western Union Business Solutions (Australia) Pty Ltd v Robinson [2019] FCAFC 181, O’Callaghan and Thawley JJ said:

[114] The general operation of s 351 can be stated in the following way.

[115]         First, putting to one side whether any of the exceptions in s 351(2) apply, the Court’s task in determining the application of s 351(1) is to determine, on the balance of probabilities, why the employer took adverse action against the employee, and to ask whether it was for a prohibited reason or reasons which included a prohibited reason.

[116]         Secondly, where adverse action is taken as a result of a decision made by an individual within a corporation, the identification of the operative reasons for taking the adverse action turns on an inquiry into the mental processes of the relevant individual.

[117]         Thirdly, the object of that inquiry is to determine the actual reasons. These are determined from all of the facts and circumstances and inferences properly drawn from them. In light of s 361, one would ordinarily expect direct evidence from the individual responsible for the employer’s action as to their reasons for that action, which may properly include positive evidence that the action was not taken for a prohibited reason. Of course such statements must be assessed against all of the facts and circumstances…

[118]         Fourthly, s 351(1) does not apply, even though it otherwise would have applied, if the relevant action falls within s 351(2)…

(Citations omitted.)

  1. Dr Morton submits that s 351(1) of the FW Act incorporates the anti-discrimination laws described in s 351(3), including the Sex Discrimination Act 1984 (Cth). She submits that any conduct that is sexual harassment or sex discrimination under the Sex Discrimination Act is necessarily also adverse action in contravention of s 351(1) of the FW Act.
  1. The judgment of Perry J in RailPro Services Pty Ltd v Flavel (2015) 242 FCR 424 is against that submission. In that case, Perry J held that the first instance judge erred in making a declaration that an employer had contravened s 351(1) of the FW Act by unlawfully terminating an employee’s employment in contravention of s 15(2) of the Disability Discrimination Act 1992 (Cth). Her Honour held that the primary judge had erred in several respects:

[112]        First, it is true that s 351(2) of the FW Act provides that s 351(1) does not apply to an action that is, relevantly, not unlawful under any anti-discrimination law, including the Disability Discrimination Act. However, the primary judge has effectively substituted the “carve-out” in s 351(2) for the test to be applied under s 351(1). However, the question under subs (1) is simply “why did RailPro dismiss Mr Flavel?”. Thus, if the dismissal was “because of” Mr Flavel’s mental disability, s 351(1) is breached unless the dismissal falls with one of the “carve-outs” in s 351(2)(a), s 351(2)(b) or s 351(2)(c). Save therefore where the adverse action is that defined in column 2, para (d) of Item 1 of the table in s 342(1) (ie that the employer “discriminates between the employee and other employees of the employer”), s 351(1) does not require that any comparison be undertaken between the treatment of the employee in question and any other employee(s). As such, s 351(1) relevantly prohibits specific conduct which the Parliament has adjudged to be discriminatory in a general sense, in contrast to s 15(2) of the Disability Discrimination Act where the comparison must still be made in the particular case in order to determine whether there has been a breach of that Act. Moreover under the Disability Discrimination Act, it suffices if an act is done for a proscribed reason even if it is not a “substantial reason” in contrast to the need to establish that the proscribed reason is a substantial and operative reason under the FW Act. Moreover it is sufficient under the Disability Discrimination Act if the discrimination is referrable to a perceived, as opposed to actual, disability or a disability of an associate (see “disability” defined in s 4(1) of the Disability Discrimination Act). That is not the case again under the FW Act.

[113]        Understood in its context, therefore, the purpose of the “carve-out” is simply to ensure that conduct which would not contravene the general anti-discrimination laws, including relevantly the Disability Discrimination Act, equally does not contravene the FW Act and thereby avoids a result whereby the FW Act imposed more onerous obligations upon an employer than those already imposed upon her or him under general anti-discrimination laws. It is, in other words, a limitation or a check upon the scope of the prohibition in s 351(1). In effect s 351 proscribes a “subset” of that which is proscribed under the Disability Discrimination Act.

[114]        The converse is not, however, true. It does not follow that conduct which contravenes the Disability Discrimination Act thereby also contravenes s 351(1) of the FW Act contrary to the assumption apparently made by the primary judge.

(Citations omitted).

  1. Accordingly, Perry J held that contravention of the anti-discrimination laws described in s 351(3) does not necessarily mean that s 351(1) of the FW Act has also been contravened.
  1. Dr Morton submits that in Sayed v Construction, Forestry, Mining and Energy Union (2015) 149 ALD 88; [2015] FCA 27, Mortimer J decided at [161] that, “to contravene anti-discrimination law would also contravene s 351(1) as adverse action”. CSIRO supports Dr Morton’s submission, asserting that Mortimer J held that s 351(1), “incorporated the discrimination legislation, so that an employer contravening an anti-discrimination law would also engage in adverse action on the basis of discrimination”. CSIRO then goes on to submit that Mortimer J’s approach was wrong.
  1. In my opinion, the submissions of both Dr Morton and CSIRO misunderstand what Mortimer J held in Sayed at [161]. It is necessary to begin by considering the arguments raised before her Honour:

[154]        The respondent contended “discriminates” should be given the meaning which is attributed to it in anti-discrimination statutes—namely, less favourable treatment…

[155]        The respondent’s submissions did not grapple with indirect discrimination and how this would be encapsulated, given the rather tortured statutory definitions of that term…

[156]        The respondent contends that the approach taken by Katzmann J in Construction, Forestry, Mining & Energy Union v Pilbara Iron Company (Services) Pty Ltd (No 3) [2012] FCA 697 at [40] supports its submission…

[157]        In Pilbara Iron, Katzmann J observed (at [40]) that Item 1(d) speaks of discrimination occurring “between employees” and not “against” an employee, but concludes that, especially given the presence in Item 2 of the word “against”, there is no material difference. In the matter before her Honour, both parties accepted that “discriminate” should be construed as “treat less favourably”, so that her Honour did not have to decide this question. In contrast, the parties in this proceeding contended for different constructions…

[158]        The applicant submits “discriminates” in Item 1(d) should simply be construed as treating people differently. In this way, the attributes set out in s 351 then prohibit such different treatment by reference to a consideration irrelevant to the performance of an employee’s work…

[160]        I accept the applicant’s submission as a matter of construction in relation to Item 1(d)…In my opinion, the language in Item 1(d), and its use of the word “between”, suggests the conduct which is to be examined is the way in which the employer targets the particular employee. Is that employee treated differently from other employees? By s 351, the “irrelevant” reasons for the different treatment…are then specified. The inquiry is thus a straightforward one, to that point, and does look only for differential treatment, as the applicant submits.

[161]        However, the terms of s 351(2), read with subs (3), then must be applied. Those provisions expressly pick up the detailed regimes of each of the territory, state and federal anti-discrimination statutes. In other words, the requirements that there be “less favourable treatment”, the complicated requirements for indirect discrimination, and the exceptions for which each statute provides are, through these provisions, incorporated so as to limit the protections given by Div 5 of Part 3-1 of the Fair Work Act in a way which is intended to mirror the limits under those other legislative schemes. When read as a whole, s 351 and s 342(1) Item 1(d) will operate to render only conduct proscribed under other anti-discrimination regimes as conduct contravening s 351. That, in substance, is the outcome for which the respondent contended, although not because of the meaning of “discriminates” in Item 1(d) of s 342(1), but rather at the subsequent step of the application of the prohibition in s 351.

  1. It may be seen that Mortimer J was concerned with a narrow issue—the meaning of the phrase, “discriminate between the employee and other employees of the employer”, in Item 1(d) of the Table in s 342(1) of the FW Act. Her Honour held that the phrase does not itself require less favourable treatment of an employee. However, her Honour held that the effect of s 351(2) and (3) is that, unless the treatment of the relevant employee is less favourable, s 351(1) will not apply. That is because the employer’s action will not be unlawful under any anti-discrimination law unless it is less favourable treatment.
  1. It may be observed that while the “adverse action” proscribed under s 351 is not confined to discrimination, the passage at [161] of Sayed was concerned only with the discrimination category of adverse action. Justice Mortimer held that ss 351(2) and (3) of the FW Act pick up the provisions of the anti-discrimination laws that operate to make actions not unlawful. Her Honour did not hold that s 351(1) picks up and incorporates provisions of the anti-discrimination laws that make actions unlawful.
  1. Although Dr Morton and CSIRO submit that there is tension between the views of Perry J in RailPro and Mortimer J in Sayed, I can see no such tension. In RailPro, Perry J held that s 351(1) did not pick up and apply the offence provisions of the anti-discrimination legislation. That issue was not the subject of consideration in Sayed.
  1. I reject the submission that s 351(1) of the FW Act operates to pick up the provisions of the Sex Discrimination Act that make certain actions unlawful, including the vicarious liability provisions. That would be an unlikely construction of s 351(1) when it makes no reference to the Sex Discrimination Act. That may be contrasted with ss 351(2) and (3), which expressly exclude the operation of s 351(1) where the relevant action is not unlawful under a relevant anti-discrimination law. There would be other difficulties with such an approach, including how to reconcile the vicarious liability provision in s 106 of the Sex Discrimination Act with s 793 of the FW Act. Further, if all s 351 did was mirror the anti-discrimination laws the provision refers to, there would be no need for s 351 at all. I also respectfully adopt the analysis of Perry J in RailPro Services.
  1. In my opinion, s 351(1) of the FW Act stands independently from the anti-discrimination laws referred to in s 351(3). Therefore, conduct may contravene s 351(1) whether or not it conforms to the definitions of “sexual harassment” and “sex discrimination” under the Sex Discrimination Act. Further, s 351(1) does not pick up the vicarious liability provision in s 106 of the Sex Discrimination Act. However, under ss 351(2) and (3), the employer receives the benefits of any defences, exceptions or exemptions under the Sex Discrimination Act.
  1. There is tension between the views expressed about the meaning of the phrase “discriminate between” in Item 1(d) in Sayed and in Construction, Forestry, Mining & Energy Union v Pilbara Iron Company (Services) Pty Ltd (No 3) [2012] FCA 697. In Sayed, Mortimer J held at [158] that “discriminate between” in Item 1(d) should be construed as “treating people differently”. In contrast, in Pilbara Iron, Katzmann J accepted at [40]–[41] that “discriminate between” should be construed as “discriminate against”, and means “treat less favourably”.
  1. I prefer the construction given in Pilbara Iron. It is true that the phrase “discriminate between the employee and other employees” is used in Item 1(d) of the Table in s 342(1) of the FW Act, in contrast to phrases like “discriminates against the employee” in Item 2(b) and 4(b) of the Table and ss 153, 195 and 354 of the FW Act. However, taking the opening words of s 342(1) into account, the provision reads, relevantly, that, “a person takes adverse action against another person…if…the employer…discriminates between the employee and other employees of the employer”. The phrase, read as a whole, suggests that it refers to conduct which discriminates against one employee (or a group of employees). That Item 1(d) of the Table in s 342(1) of the FW Act does not merely refer to different treatment, including favourable treatment, conforms to the other types of adverse action specified in the Table, each of which involves unfavourable treatment of an employee.
  1. In addition, while it was held in Sayed that the concept of less favourable treatment is imported by the anti-discrimination laws described in s 351(3), the word “discriminate” in Item 1(d) applies also to other provisions, namely ss 340 and 346, which adopt the definition of “adverse action”. But the anti-discrimination laws are only picked up by s 351, not the other provisions. The protective purposes of ss 340 and 346 indicate that they are only concerned, relevantly, with less favourable treatment of an employee or group of employees. Accordingly, Item 1(d) requires less favourable treatment of an employee (or a group of employees) in comparison to other employees of the employer.”

 

Morton v Commonwealth Scientific and Industrial Research Organisation (No 2) [2019] FCA 1754 delivered 29 October 2019 per Rangiah J