Court decisions might have implications for APS decision-makers

WRITTEN BY John Wilson & Kieran Pender

gender canberra times

Australian law has prohibited discrimination on the basis of various personal attributes in the workplace for decades. The first federal law, the Race Discrimination Act, was enacted in 1975; the Sex Discrimination Act followed in 1984.

Laws prohibiting disability discrimination and age discrimination were next, while there has been movement towards a federal religious discrimination law for some time now. These laws all bind the federal government, which means discrimination covered by such legislation in the public service is unlawful.

In recent years there has been much important focus on one aspect of unlawful discrimination: workplace sexual harassment, which is prohibited by the Sex Discrimination Act. The Sex Discrimination Commissioner’s landmark 2020 Respect@Work report led to momentum, law reform and practical changes in many workplaces across Australia, including the APS. While some of these changes have also been relevant to other areas of discrimination, momentum and employer attention has been less pronounced.

That might now change, with two important court decisions in recent months that hold significant implications for all employers, including government departments. These decisions, dealing with sex discrimination and unconscious bias, and age discrimination respectively, should focus the mind of public sector managers during employment-related processes.

In Tsikos v Austin Health, a decision of the Victorian Court of Appeal, the court upheld a sex discrimination claim. The judgment is significant for its consideration of systemic factors, including unconscious bias, in sex discrimination, in a way which requires employers to be proactive in preventing even inadvertent discrimination.

Ms Tsikos was hired by Austin Heath in 2009, and 18 months later promoted to manager of her department. In both roles, she was paid at, but not above, the enterprise agreement rate. However, following her promotion, Tsikos was responsible for managing a number of staff, many of whom were paid significantly above the enterprise agreement rate for their classification. All of Tsikos’s male employees were in this position, including one who was paid $41,000 more than Tsikos, despite reporting to her.

Over the subsequent years, Tsikos repeatedly sought a pay rise to address these imbalances, without success. Eventually, she lodged an unlawful discrimination claim. Tsikos lost in the tribunal, but then succeeded in the Victorian Supreme Court, and subsequently on appeal.

The court held that Tsikos had been subject to unlawful discrimination on the basis of sex – not necessarily on the basis of “subjective reasons of individual decision-makers”, but as a consequence of “systemic discrimination by a large organisation”, which could not “be reduced to a few isolated interactions with specific individuals.”

Among the evidence accepted by the trial judge was an expert report by an organisational psychologist with expertise on the gender pay gap. The judge noted that the workplace featured structural factors “known to contribute to entrenched gender pay inequality in the broader workforce.” The Court of Appeal rejected Austin Health’s appeal.

Tsikos lifts the bar for employers – it is no longer sufficient to avoid intentional or “conscious” discrimination in hiring and advancement practices; structural factors, including unconscious bias, must also be addressed.

Gutierrez v MUR Shipping, meanwhile, represents the first-ever successful federal age discrimination claim in Australia. Mr Gutierrez, then in his late 60s, had alleged that he faced pressure to retire from his role as an accountant. This included his manager making reference to a global retirement age of 65 at the international company that he was employed within, and being directed to train his apparent replacement.

Gutierrez brought an age discrimination claim, and was successful at first instance – but was only awarded $20,000 in damages for the hurt, humiliation and distress suffered, plus an apology. With his legal costs already far higher than the damages award, and the risk of being ordered to pay the company’s costs too, Gutierrez appealed.

In the Federal Court judgment handed down last month, Gutierrez was resoundingly successful – being awarded $90,000 in damages for non-economic loss and almost $150,000 in economic loss (which had been denied at first-instance). The significant increase in the quantum of damages for age discrimination makes the prospect of a worthwhile claim much more viable.

Gutierrez resonates with another unlawful discrimination case, Richardson v Oracle, delivered almost a decade ago. In parallel circumstances, Ms Richardson was successful at first instance in a sexual harassment claim against her employer, but only received a relatively small damages award. She appealed, and the full Federal Court elevated her damages for hurt, humiliation and distress to $100,000. Ever since, the Richardson-effect has been evident in litigation for workplace harassment. Gutierrez will likely contribute to an ongoing increase in average damages awards, and settlement sums, in discrimination cases across the board.

The APS has some structural characteristics that mitigate risk of unlawful workplace discrimination – with strict, procedurally fair recruitment, retention and advancement processes, relatively rigid pay structures and so on. But these certainly do not eliminate the risk of discrimination.

In light of the decisions in Tsikos and Gutierrez, APS managers – and their legal advisors – should take care to ensure decisions are not impacted, consciously or otherwise, by unlawful discrimination.

The above article was written for and published in the Canberra Times.

For all employment related queries or concerns, please contact our Employment Law & Investigations team at BAL Lawyers.

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