Contents
- A decision to reinstate a Telstra employee following dismissal of her employment for misconduct has now been overturned on an appeal to the Full Bench of the Australian Industrial Relations Commission (Commission).
- The Commission found that although the incident took place outside of work hours, it caused great distress to the other employees who witnessed it, with resultant negative effects on the workplace culture.
- The Commission found that the employee’s lack of cooperation and untruthful answers in an enquiry conducted by Telstra (whilst relating to an incident outside of work) had the effect of destroying the relationship of trust and confidence between an employee and employer.
- This breach of trust was sufficient for Telstra to consider that the employee would not be honest in the future, and the dismissal was justified accordingly.
|
Background
In a recent unfair dismissal case, an employee of Telstra, Ms Carlie Streeter, was terminated for engaging in sexual activity in the presence of work colleagues following a work social function.
Telstra conducted an investigation into the incident prior to the termination, in response to complaints by other employees who were present at the hotel. When questioned during the investigation about the incidents, Ms Streeter denied engaging in such activity.
The Commission originally found that Ms Streeter’s subsequent dishonesty during the investigation, whilst not to be condoned, was not grounds for dismissal because it related to conduct of ‘an inherently personal nature’ and did not involve dishonesty in relation to the performance of her duties as an employee.
Accordingly, Ms Streeter was reinstated to her position.
Telstra appealed and the decision was overturned.
Termination was not ‘harsh, unjust or unreasonable’
On appeal, the Full Bench found that Ms Streeter’s lies following the incident had destroyed the necessary relationship of trust and confidence between employer and employee.
Although the incident in the hotel room had not occurred in a work context, the Full Bench ruled that Telstra was within its rights to question Ms Streeter about it, given the serious effect the incident had had on other employees. Following the incident, several of Ms Streeter’s work colleagues had complained to Telstra. One employee had been in a ’hysterical‘ state because of the incident, whilst another was unable to attend work the next day because she was ’crying and hyperventilating’ due to the distress caused by the incident. Three of the employees who had witnessed the incident indicated to Telstra that they no longer felt they could work with Ms Streeter in a ‘normal manner’.
Given that the incident had seriously affected the mood of the workplace and that Telstra’s response to the complaints was likely to have serious implications for the working environment of all the employees concerned, Ms Streeter’s dishonesty, when questioned, could not be excused on the grounds that it was of ‘an inherently personal nature’.
The Full Bench found that whilst the incident occurred outside of work, it had significant implications for the workplace. It concluded that Ms Streeter’s dishonesty with Telstra during the investigation meant Telstra could not be confident Ms Streeter would be honest with them in future. The effect of her dishonesty was such that ‘the relationship of trust and confidence between Telstra and Ms Streeter was, thereby, destroyed.’
The Full Bench determined that the termination of Ms Streeter was not harsh, unjust or unreasonable.
Implications for employers
- Inappropriate behaviour by employees outside a work environment may constitute grounds for dismissal or discipline if it has the effect of compromising the relationship of mutual trust and respect between the employer and the employees, or between employees.
- Employees have an 'obligation for honesty' to employers which extends beyond their work duties to events outside work which have the potential to impact on a workplace.
- Employers should ensure that they conduct a thorough investigation into any alleged misconduct prior to terminating an employee. If the employee is uncooperative or dishonest during this investigation, then this may lend support to the position that termination of the employee’s employment is not harsh, unjust or unreasonable.
This article was written by Ben Davies, Solicitor, Melbourne.
- The Victorian Civil and Administrative Tribunal (VCAT) found that Neurosurgeon, Chris Xenos, sexually harassed trainee Neurosurgeon, Caroline Tan.
- Xenos was ordered to pay Tan $100,000 in damages for ‘loss of enjoyment’ in her chosen profession, despite the fact that Tan only sought $50,000 in damages demonstrating, the potential for sexual harassment claims to cost employers dearly.
|
The decision in Tan v Xenos
8, handed down by VCAT in April, drew significant media attention due to both the salacious nature of the allegations and the award of $100,000 in damages in a jurisdiction where damages awards are normally in the range of $5,000 - $20,000. The damages flowed from findings that Chris Xenos, a neurosurgeon, sexually harassed a trainee neurosurgeon under his supervision, Caroline Tan.
Tan started working at Monash Medical Centre as a trainee neurosurgeon in 2004 under the supervision of Xenos. They had a good working relationship, and in about December 2004, he started inviting her to attend private tutorials in his consulting rooms which were adjacent to the hospital. Tan refused these offers because the times did not suit her, but out of worry that she would seem unappreciative, she eventually accepted his invitation to meet him in his rooms one evening in February 2005.
Expecting a tutorial on neurosurgery, Tan was shocked when Xenos approached her from behind, spun her around and embraced her. He then kissed her on the lips, touched her inappropriately and exposed himself. Tan blurted out ‘How could you’, before running out of the premises to her car, and driving off.
Although Tan spoke of the incident to various people confidentially, it was not reported to hospital authorities until almost a year later. Xenos’s legal team led considerable evidence in an attempt to cast doubt on Tan’s story. She was cross-examined extensively as to the layout of the room, and why she had not brought pens or paper to the ‘tutorial.’ However, Justice Harbison held that it is unlikely that Tan would have recalled all the details of the room, and that a ‘rote recitation’ of the minor details was not required to show truthfulness.’
Legal counsel for Xenos denied that the incident occurred at all, and relied on hospital notes to argue that Xenos was attending to patients that night. However, the judge found this evidence non-determinative. Xenos also argued that Tan’s story was a fabrication, designed to serve as an excuse for her poor performance professionally. Much evidence was given of Tan’s performance at work, and of the fact that she was ‘difficult’ to work with and had problems keeping good relationships with other doctors. There were also questions raised about her technical knowledge and surgical capabilities.
Tan argued that her performance at Monash Medical Centre did not decline until the second half of 2005, and this was as a result of the harassment. Justice Harbison held that there was no written documentation of Tan’s poor performance until February 2006, and that Xenos had exaggerated her poor performance prior to this date. Justice Harbison also found that Tan was a credible witness, in contrast to many of the witnesses called by Xenos who lacked credibility and were clearly partial towards Xenos due to a personal dislike for Tan.
Tan’s counsel had sought damages for $50,000, whilst Xenos’ counsel made no submissions as to damages. However Judge Harbison ordered that Xenos pay Tan $100,000 for the sexual harassment incident. This was based on the fact that Tan had spent 12 years studying to become a neurosurgeon and the judge held that the ‘enjoyment in her profession has now been significantly tarnished due to the sexual harassment’. Much was said about the small size of the neurosurgeon speciality, with only about 140 surgeons across Australia, many of whom were involved in the trial and were aware of the doubts cast upon Tan’s character and her professional abilities. This is a distinguishing feature of the case, and whilst presumably its absence would have resulted in a much smaller damages award, employers should be aware of the potential for sexual harassment cases to cost them dearly.
This article was written by Jessica Toop, Solicitor, and Rebecca Mason, Articled Clerk, Melbourne.
- The National Employment Standards were introduced by the Government on 16 June 2008
- They increase the number of minimum conditions in the employment relationship from 5 to 10
- Changes introduced include the introduction of a legislative entitlement to flexible working arrangements and the ability to extend periods of unpaid parental leave by up to 12 months.
|
On 16 June 2008 Prime Minister Kevin Rudd, and Minister for Employment and Workplace Relations, Julia Gillard, released the National Employment Standards (NES). The NES contain details of the 10 minimum conditions which will apply to Australian employees, whether or not they are covered by awards or workplace agreements. The 10 minimum conditions relate to the following:
- maximum weekly hours of work
- requests for flexible working arrangements
- parental leave and related entitlements
- annual leave
- personal/carers leave and compassionate leave
- community service leave
- long service leave
- public holidays
- notice of termination and redundancy pay, and
- fair work information statement.
The standards introduce changes in relation to requests for flexible working arrangements and parental leave.
Previously there was no specific minimum legislative standard for flexible working arrangements, although the indirect discrimination provisions of the equal opportunity legislation have been applied to give employees a defacto right to request flexible arrangements. Now, division 3 of the NES allow an employee who is a parent, or who has responsibility for the care of a child under school age, to request a change of working arrangements for the purpose of assisting the employee to care for the child. It is contemplated that this may involve changing the employee’s hours of work, patterns of work or location of work. This division only applies where the employee has already completed 12 months of continuous service with the employer, and it also applies to casuals if they have been systematically engaged for at least 12 months. An employee applying for flexible working arrangements must make a request in writing and the employer must give the employee a written response within 21 working days. The employer may only refuse to grant the request if it has reasonable business grounds for doing so. “Reasonable business grounds” is not defined. Employers might be assisted by referring to recent amendments to the Victorian Equal Opportunity Act about flexible working arrangements, which sets out factors to be considered to assess whether an employer has unreasonably refused to accommodate a person’s family responsibilities. There is currently no direct avenue to appeal the employer’s decision.
This provision is likely to cause an increase in requests for flexible working arrangements, even though it does not significantly change the legal position. Under equal opportunity legislation refusing a request for flexible working arrangements would be unlawful indirect discrimination if the requirement to maintain the current arrangements was unreasonable.
The NES also introduce changes relating to parental leave entitlements. Employees were previously able to take 12 months unpaid parental leave, provided that they had completed 12 months continuous service. The NES will extend this entitlement, allowing employees to request, in writing, an additional 12 months unpaid parental leave. The employer must have a reasonable business ground for refusal and the employee is entitled to return to the same position, or if that position no longer exists, the one that is closest in terms of status and pay level to their pre-parental leave position.
The NES will not come into effect until 1 January 2010 and generally speaking they will not substantially change the employment relationship. Nevertheless, it remains to be seen how terms such as ‘reasonable business grounds’ will be interpreted by the courts. This article was written by Kate Jenkins, Partner, and Rebecca Mason, Articled Clerk of the Melbourne Employee Relations group.
This article was written by Kate Jenkins, Partner, and Rebecca Mason, Articled Clerk, Melbourne.
- Employers often wish to move or replace an employee returning from maternity leave because the replacement employee has proven to be a better fit for the job.
- A recent Federal Court decision has held that failure of the employer to reinstate the employee following a period of maternity leave is not sex discrimination where the reason is based on the employee’s performance and not the maternity leave.
- However, not allowing the employee to return to her former position, or a position as nearly as possible comparable in status and pay to her former position, was a breach of the Workplace Relations Act 1996 (Cth) (WR Act) provision on maternity leave, which carries a maximum penalty of $33,000.
- The court also found that requiring her to sign a release before payment of her redundancy entitlements (where the employer’s ordinary practice did not include such a condition) amounted to breach of the Sex Discrimination Act 1984 (Cth) (SD Act).
- Despite the prohibition under section 824(2) of the WR Act on the ordering of costs (and despite the employer’s Offer of Compromise prior to judgment), the court ordered the employer to pay 85 per cent of costs to account for preparation of the employee’s SD Act-related claims.
|
Background
Ms Iliff went on maternity leave from her role as marketing manager in 2004, arranging to return to work in 2005. Ms Matthews replaced her on a six-month contract basis.
During this period, the employer underwent a company restructure. Ms Matthews’ role expanded, and she was found to be more efficient and more qualified than Ms Iliff had been.
As the employer could not retain two people in the same position, Ms Iliff was made redundant and told that she was not considered ‘suitable’ for the new, expanded position.
Later, Ms Iliff was given a letter offering a redundancy payment and other entitlements conditional upon signing a release. It was not company policy to require redundant employees to sign releases prior to receiving their redundancy entitlements.
Ms Iliff argued that termination of her employment constituted a breach of the maternity leave provisions in the WR Act and of the SD Act. Further, refusal to pay her redundancy entitlements without her signing a release was in breach of the SD Act.
Ms Iliff also argued that her employment had never formally come to an end. Therefore, she was entitled to recover salary up until the time of the decision.
Decision
The court found that termination was not in breach of the SD Act because the proper test is not whether Ms Iliff is made redundant as an indirect consequence of her taking leave, but rather whether the reason she is made redundant is actually because of her sex (because of her pregnancy which is a characteristic unique to her sex).
The court asked whether a non-pregnant person in her position who had taken unpaid leave on the enforceable understanding that they would return to work would be treated in the same way. The court found that Ms Iliff was made redundant, not because she was a woman and had become pregnant, but rather because someone better qualified had been found for her role.
However, requiring Ms Iliff to sign a release (because of concerns about legal issues arising from her maternity leave) before she could access her redundancy payment constituted breach of the SD Act. This was because it was established practice for the employer to make redundancy payments without condition. Requiring Ms Iliff to sign a release breached the SD Act because the reason for this discriminatory treatment was that she had taken maternity leave.
Furthermore, the court found that termination of Ms Iliff’s employment constituted a breach of the maternity leave provisions in the WR Act even where the reason for doing so was unrelated to the maternity leave.
The WR Act provides that an employee is entitled to return to the position she held immediately before commencing maternity leave or, where the position no longer exists, to another position for which the employee is qualified—that is, as nearly as possible comparable in status and pay to that of her former position.
The employer was found to have breached the maternity leave provisions of the WR Act because, even if Ms Iliff’s original position had been made redundant, the employer failed to give her the new position (given to Ms Matthews) for which Ms Iliff was qualified.
The maximum penalty for breach of the maternity leave provisions under the WR Act, $33,000, was ordered against the employer. In addition the court ordered the employer to make a redundancy payment with four weeks pay in lieu of notice as remedy for breach of the SD Act.
Ms Iliff’s submission that her employment had never ended was rejected. The court found that her employment had ceased, at latest, when the employer filed its defence. In any case, Ms Iliff was not entitled to payment of salary even for the period leading up to the filing of defence because ‘if you wish to be paid, you have to work’.
Costs
The SD Act gives courts discretion to award costs. In a subsequent decision, the employer was unable to recover costs and was ordered to pay interest from the date of judgement and 85 per cent of Ms Iliff’s costs. This was despite the application of section 824 of the WR Act which states that no costs are to be applied unless the proceeding was instituted vexatiously or without reasonable cause. The decision was surprising, given that the employer had made Ms Iliff an offer of settlement, which usually works in favour of the party making the offer when the court is considering whether costs should be awarded against them. The court awarded costs on the basis that:
- the offer failed to address the issue of declaratory relief (the employer did not suggest that it had breached the relevant Acts)
- the amount offered would have given Ms Iliff less than she actually recovered after tax
- the offer made no reference to payment of Ms Iliff’s costs, and
- the offer was served in the week before Christmas.
While costs were not awarded to Ms Iliff for earlier proceedings under the WR Act, the court found that SD Act claims formed a ‘vast majority of the factual and legal material before the court so that an order for 85 per cent of Ms Iliff’s costs was appropriate.’
Implications for employers
- Failure of the employer to reinstate an employee after maternity leave where there is a position similar to their original position available is unlawful, even where the reason for termination of employment is not related to the maternity leave.
- Breaches of the maternity leave provisions of the WR Act are likely to attract the maximum penalty of $33,000 because ‘any light handed approach that might have been taken in the past to serious, wilful and ongoing breaches of the industrial laws should no longer be appropriate’.
- It is unlawful to place conditions on the receipt of redundancy payments for reasons prohibited under the SD Act (for example, imposing conditions upon women returning from maternity leave only). It may, however, be lawful for employers to set such conditions across the board, such that there is no discrimination.
- Employers should make clear when the employment contract is terminated to avoid arguments that the employee is entitled to salary payments for the period leading up to the court proceedings. However, even where there is no formal ending of a contract of employment, it is unlikely that the employee will be entitled to payment of salary for any period in which they did not actually work.
- Given the court’s wide discretion and their ability to order costs despite the employee’s rejection of an Offer of Compromise, an employer should give careful consideration to ensuring that offer terms are generous and broad enough to resist an application by the employee for costs.
This article was written by Kate Jenkins, Partner, and Yee Ching Rainbow Cheung, Articled Clerk, Melbourne.
- Labour hire and subcontracting arrangements may not lessen a primary employer’s responsibility to provide a safe workplace for its employees.
- Host employers also have a duty to ensure the health, welfare and safety of contractors they engage to perform work at their workplace.
- A policy explicitly prohibiting bullying will not remove an employer’s liability unless duly enforced and monitored.
|
Background
The New South Wales Court of Appeal has upheld a landmark damages award of almost $2 million against an employer whose employee was found to have bullied a hired contract worker.
In Nationwide News Pty Ltd v Naidu & Anor and ISS Security Pty Ltd v Naidu & Anor [2007] NSWCA 377, a victim of severe workplace bullying successfully brought a common law claim for compensation. The decision highlights the importance of employers ensuring not only the health and safety of employees, but also those contracted to work for them.
Facts
While employed at ISS Securities (ISS) as a security guard, Naidu was assigned to work at Nationwide News (NN). Naidu’s supervisor at NN, Chaloner, subjected him to five years of violent threats, racial and sexual abuse, and excessive unpaid working hours.
As a result, Naidu suffered post traumatic stress disorder, severe depression and anxiety. He incurred significant medical costs, was unable to work and his marriage disintegrated.
At first instance, Justice Adams held NN and ISS negligent and jointly liable for Naidu’s injuries, apportioning liability at 65 per cent and 35 per cent respectively. ISS was also found to have breached its employment contract with Naidu. Both companies appealed.
Decision
Liability of ISS Securities
The Court of Appeal upheld the trial judge’s finding that, as an employer, ISS owed a duty to ensure the safety of its employees, even if it did no more than supply the services of those employees. Such a duty was non-delegable and implied in all employment contracts.
Despite this, the majority of the court allowed the appeal by ISS, finding that it could not have reasonably foreseen the risk of psychiatric harm to the plaintiff. They also held that as ISS had no element of control over Chaloner, it should not be fixed with vicarious liability for his conduct.
Liability of Nationwide News
The court unanimously held NN directly liable and emphasised Chaloner’s high level of seniority within the company. It found Chaloner’s position meant he ‘embodied’ the company, ’irrespective of lines of authority and reporting to those in the management hierarchy above him’. Although Naidu was not an employee of NN, his work was actually controlled and directed by Chaloner. As such, the duty owed to Naidu by NN was analogous to that owed by an employer, including providing him with a safe place to work.
Alternatively, as Chaloner’s employer, NN was vicariously liable for his conduct which occurred in the course of employment, notwithstanding that such conduct was explicitly prohibited. Most of his relevant conduct constituted a mode of asserting authority over Naidu, whose activities he was expressly required to control. However, as NN was not Naidu’s employer, it was not liable for breach of contract.
The court upheld a damages award of $1.946 million, including $150,000 in exemplary damages. Such damages are awarded to punish the wrongdoer and deter future misconduct, and reflect the seriousness with which courts view employers’ failure to protect employees from workplace bullying. The bulk of the payout was compensation for Naidu’s past and future medical expenses, and income lost from his inability to work.
Implications for employers
This decision reinforces the non-delegable duty an employer owes to provide a safe working environment for employees. Even though ISS was successful in its appeal, employers should note that labour hire and subcontracting arrangements will not reduce the primary employer’s obligation to ensure the safety of staff.
The decision also demonstrates that an employer may be liable for the at-work conduct of its employees, even when this conduct is directed at the employee of another company. A policy expressly prohibiting bullying is insufficient without an appropriate enforcement mechanism.
In essence, employers need to ensure that all employees understand rights and obligations under such polices, including their duty to report misconduct, and the consequences of non-compliance. Where an employer becomes aware of bullying, they should promptly and effectively address the problem. As this case indicates, a failure to make it clear that workplace bullying will not be tolerated under any circumstances can prove extremely costly.
This article was written by Maya Tal, Paralegal, Melbourne.
- Is ‘diversity’ just the latest catchword being rallied around by large companies trying to attract candidates? Or does it offer a key competitive advantage for attracting and retaining top employees in a tight job market? And what is all this talk about ‘diversity’?
|
In the employment context, diversity refers to the creation of an inclusive workplace for people with different attributes and backgrounds—whether these differences relate to identifying features such as sex, race, ethnicity, sexual orientation, gender identity, age, family responsibilities, disability, language or religion. In a ‘diverse’ workforce, differences are valued and accommodated where appropriate.
‘Diversity’ in employment has its roots in equal opportunity (EO) policies and awareness, and in many respects it is the natural progression of EO ideals. Whilst equal opportunity focuses on equality by ensuring fair and equitable treatment for all, diversity places emphasis on the celebration and inclusion of difference.
Many leading companies are expending significant time and resources on the creation of a diverse and inclusive workplace. As leading employers, these companies are only too keen to publicise the value they place on diversity, and the ways in which their workplace is diverse and inclusive. The way in which they market and promote the diversity of their workplaces provides some insight into the rationale behind it.
One example is IBM, a global company and leading employer with 355,000 employees serving more than 170 countries.1 The IBM website describes diversity as ‘the bridge between the workplace and the marketplace’,2 reflective of the view that diversity enables IBM to operate as a truly global enterprise with efficiency and innovation.3 It also reveals that diversity has a key business driver and is much more than a ‘feel good’ human resources policy implemented to comply with equal opportunity obligations. For IBM, global workforce diversity is a cornerstone of its ‘strategy to differentiate itself as one of the world's great companies.’4 This reflects the role diversity plays in its dealings with employees, suppliers and customers, and its status as one ingredient for the success of these dealings and relationships.
Multinational companies are not alone in their recognition of the importance of diversity. Large companies and firms in Australia and abroad have recognised the value of diversity. Telstra espouses that ‘a diverse workforce delivers productivity and increased revenue’5 and has established a Diversity Council which reports directly to the CEO. The Diversity Council has identified six priority areas—age, gender, work-life flexibility, disability, sexual orientation and gender identity, and cultural diversity. Insurer AAMI announces on its careers site ‘AAMI is made up of people like you’6 as a pitch to attract potential employees. Similarly, supermarket chain Woolworths is committed to diversity as it believes it makes business sense and a workplace that ensures equal opportunity for all.7
The widespread recognition of the importance of diversity in the workplace of large companies raises two questions for small and medium businesses in Australia. First, what are the business drivers for this push for diversity, and second, are those drivers also applicable to smaller employers?
There are three key benefits of having a diverse and inclusive workplace. First, it is a method of addressing the risk of indirect discrimination occurring (and claims being brought) on the basis that a requirement (which is the same for everyone) disadvantages people with protected attributes, and the requirement is unreasonable. This is because a diverse and inclusive workplace will set requirements after taking into account the differences between employees, and build in appropriate flexibilities. A diverse and inclusive workforce is also conducive to the sharing of views and ideas in order to find a solution that fits employees’ needs. In a small or medium business, it is often more important to mitigate the risk of discrimination claims being brought due to the greater significance—those claims are likely to have on the company’s bottom line. Further, in a smaller pool of employees, discrimination may cause irreparable damage to morale and loyalty.
The second key benefit of diversity is that it assists efforts to be an employer of choice, and thus better able to compete for the best people in what is currently a tight labour market. Again, this is also important for small- to medium enterprises who may be able to attract talent, despite being unable to match the salaries being paid by blue chip companies, by offering a genuine team atmosphere, work-life balance and workplace flexibilities. Further, having an inclusive workplace will assist in maximising staff loyalty and retention.
Thirdly, a diverse workforce can provide a competitive advantage when dealing with clients and customers. This is because, in most cases, a business’ clients are themselves diverse. Hence, a diverse range of employees providing service to clients will be better able to relate to their clients and understand their expectations, delivering a better client experience. Employees who enjoy their work environment are also more likely to perform better. This business edge is of benefit to both small and large businesses, although of course there are limitations on the extent of diversity that can be achieved in a very small workforce.
Diversity is being paid serious attention by employers, and so it should be. Employers - large and small - can use it as a tool to mitigate the risk of discrimination claims, attract and retain talent, and gain a competitive edge in the service being provided to customers and clients.
This article was written by Jessica Toop, Solicitor, Melbourne.
- Freedom of religious belief is constitutionally protected for followers of a particular religion and also non-believers. However, as diversity becomes more prevalent, discrimination on religious grounds is becoming more of a concern for employers in Western countries.
- The practice for employers is to exercise caution, rather than strict adherence to every religious holiday and practice. This may amount to discrimination on the basis of religion.
|
Background
In Australia, there is a right to freedom of religion and belief and freedom from discrimination on the basis of religion. This is protected by section 116 of the Commonwealth Constitution, the Human Rights & Equal Opportunity Commission Act 1986 (Cth) (HREOCA), the Racial Discrimination Act 1975 (Cth) and the Workplace Relations Act 1996 (Cth). The two international instruments scheduled to the HREOCA are also of special relevance. These are:
- Article 18 of the International Covenant on Civil and Political Rights (1966) (ICCPR), and
- the Declaration on the Elimination of All Forms of Intolerance and of Discrimination Based on Religion or Belief (1981) (Religion Declaration).
Religion in the employment context
The International Labour Organisation Discrimination (Employment and Occupation) Convention 1958 prohibits discrimination on the grounds of religion in employment.
Direct religious discrimination occurs when someone with a religious conviction is treated less favourably than someone of a different religious conviction in the same or similar circumstances, for example, if a job applicant is refused the job because of their religion.
Indirect discrimination occurs where a condition, requirement or practice is, on its face, neutral, but has a discriminatory effect on people with a specified attribute and is unreasonable. The legal test contains a number of separate ‘limbs’—indirect discrimination only occurs if a person imposes (or proposes to impose) a requirement, condition or practice:
- that someone with an attribute does not or cannot comply with
- that a higher proportion of people without that attribute do or can comply with, and
- that is not reasonable.
Indirect discrimination can occur even if there is no intention to discriminate. It may occur when employers refuse to make appropriate adjustments to allow for employees’ religious practices which do not conform to the pattern of most employees. For example, a rule that no employee may leave work before 5.00pm may affect Orthodox Jews in winter because they must leave work and reach home before sundown to observe the Sabbath. Orthodox Jews who are refused flexible scheduling could be forced to choose between their religion and their jobs. However, it is important to ensure that the legal test outlined above is applied, including the reasonableness of the requirement in the context.
Exceptions
There are exceptions where discrimination on the basis of religion may be allowed in an employment context:
- the inherent requirements of the job exception, and
- the religious susceptibilities exception.
The inherent requirements exception
Where measures taken by an employer are inherent requirements of the job, they are not discriminatory. The inherent requirements of a particular job include not only the duties of the employee, but also the circumstances in which the particular employment is to be carried out. For example, an employer may require an applicant to be a practising member of a particular religious group if the employer can demonstrate:
- why an individual needs to possess that particular belief to be able to perform the duties of their position, and
- why the individual being recruited would be unable to perform the duties of that particular position.
Thus, hiring a Catholic to teach religious education at a Catholic school would not be discriminatory. However, a requirement that other employees, such as a caretaker, be Catholic, may be discriminatory.
The religious susceptibilities exception
This only applies to religious institutions. The exception allows an employer to exclude or prefer an employee in good faith in order to avoid injury to the religious doctrines, tenants, beliefs, or teachings of that religion or creed. It is most commonly exercised by institutions such as churches, dioceses, or even religious schools.
Decisions
In Hozack v Church of Jesus Christ of Latter-Day Saints the applicant claimed that her employment had been unlawfully terminated. She was employed as a part-time receptionist and was also a member of the church. An express term of her employment was that she ‘demonstrate [her] personal worthiness by fulfilling those conditions required to obtain a Temple recommend’ (that is, be ‘temple-worthy’).
It was discovered by one of the church’s bishops that the applicant had engaged in an intimate affair with another man whilst separated (but not divorced) from her husband. Following disciplinary action she was terminated for not being ‘temple-worthy’.
The issues to be determined were:
- whether the applicant’s employment had been terminated unlawfully on the basis of religion, and
- whether the termination was justified because it was conducted in good faith in order to avoid injury to the religious susceptibilities of adherents of that religion or creed.
It was noted that in order to fall within the exception, the termination of employment must be made in good faith and in aid of genuinely-held beliefs. However, ‘action aimed at the avoidance of mere offence to the presumed social morals of church members, or of alarm to a faction not clearly amounting to ‘injury’ to religious susceptibilities, would not suffice’.
The termination was held to be unlawful because being ‘temple-worthy’ was not an operational requirement of the applicant’s job. In addition, because the applicant was a part-time receptionist (and not a public face of the church, or in a mentoring or leadership role), it was unlikely that she would injure the religious susceptibilities of other adherents to the faith.
Implications for employers
Employers should be flexible in dealing with employees, especially with regards to their religious beliefs and practices. This is particularly important because not all people practice the same faith in the same way—this ranges from strict to very casual observance.
There is currently no legal requirement to install prayer rooms, allow time off, or observe each religious holiday and practice, although employers should be aware of religious needs and be flexible in response to them.
When advertising a position or promotion, all employers should:
- identify the inherent or essential requirements of every position in the organisation, and
- ensure that job advertisements and other selection documents are designed in accordance with the inherent requirements of that particular job.
When dealing with special requests based on the religious beliefs or practices of existing employees, employers should consider the tests in relation to direct and indirect discrimination to ensure compliance.
This article was written by Kristy Peacock-Smith, Solicitor, and Jennifer Bradbury, Articled Clerk, Perth.
- The Human Rights and Equal Opportunity Commission’s (HREOC) Annual Report 2006-2007 (HREOC report) highlights some significant trends in relation to discrimination in Australian workplaces.
- The report shows that claims in relation to discrimination on the basis of pregnancy, sex and age are on the rise, despite measures taken by many employers to comply with their obligations under anti-discrimination legislation (both federal and state).
- Employers should ensure that they take steps to implement appropriate policies and procedures for dealing with complaints in the workplace, and provide adequate training and education to both managers and employees in order to minimise their exposure to such claims.
- Employers should ensure that they exercise caution in handling claims, in order to avoid complaints of ‘victimisation’ being made.
- Employees are more likely to bring a claim under the Federal anti-discrimination legislation than the state legislation. The Victorian Equal Opportunity & Human Rights Commission Annual Report 2006-2007 (Victorian report) notes a significant decline in the number of complaints received by the state commission.
|
Rise in employment-related complaints brought under federal anti-discrimination legislation
The HREOC report indicates that the number of employment-related complaints brought under the federal anti-discrimination legislation increased by 42 per cent when compared to the previous year. HREOC also recorded a significant rise in the number of enquiries made regarding discrimination in employment (32 per cent compared to 14 per cent in the previous year).
For the past four years, the majority of complaints received have been lodged under the Disability Discrimination Act 1992 (Cth) and the Sex Discrimination Act 1998 (Cth).
Significant increase in complaints on the basis of pregnancy and sex discrimination
Of the increased number of complaints brought regarding employment, the overwhelming majority related to complaints made pursuant to the Sex Discrimination Act 1984 (Cth) (81 per cent).
Sex discrimination and discrimination on the basis of pregnancy constituted the primary grounds upon which complaints were received under this Act (accounting for 45 per cent and 17 per cent of complaints respectively).
Treatment of women in the workplace remains a key issue facing Australian employers, with women accounting for 87 per cent of all complaints lodged pursuant to the
Sex Discrimination Act 1984 (Cth).
Other areas of exposure for employers
It appears that employers are still struggling to manage issues relating to an ageing workforce in Australia. The majority of complaints received in relation to the Age Discrimination Act 2004 (Cth) (68 per cent) related to employees who were reaching retirement age (55–64 years).
The report also shows that there are an increasing number of claims with respect to psychiatric and physical disabilities pursuant to the Disability Discrimination Act 1992 (Cth).
Discrimination based on criminal record is another area in which an increasing number of complaints have been made.
Decline in complaints brought under Victorian discrimination legislation
Despite the increase in complaints made under the federal legislation, the Victorian report recorded a decrease in the number of complaints received in the year 2006–07. This has been the trend for the past four years, with the Victorian Equal Opportunity & Human Rights Commission continuing to record a gradual decrease in the number of complaints. However, in 2006–07 the drop was more dramatic, with a 19 per cent decrease in the number of complaints lodged. There was a corresponding drop in enquiries to 12 per cent.
Whilst the reason for the decline in complaints is not clear, the Victorian report indicates that it may be that changes to the federal industrial relations laws have created some uncertainty on the part of employers and employees about their rights and responsibilities in relation to discrimination.
Alternatively, it may be that employees are increasingly turning to the federal jurisdiction to make complaints, due to a trend towards larger awards of damages, and an awareness of the likelihood of being awarded costs for a successful claim in the federal jurisdiction. Other possible explanations may be that HREOC (based in New South Wales) has increased its national profile, following a recent educational campaign.
Notwithstanding the decrease in claims under the Victorian legislation, discrimination in employment has continued to dominate the Victorian Equal Opportunity & Human Rights Commission’s workload, accounting for 1,318 of the complaints lodged in 2006–07.
The majority of employment-related complaints were made on the basis of disability/impairment, followed by sexual harassment complaints. Interestingly, the number of complaints of victimisation was significant. This suggests that some employers are failing to take appropriate steps to manage the process where an employee has made a discrimination complaint in the workplace.
Other complaints in relation to discrimination on the basis of marital status, political belief or activity, parental status, pregnancy and religious belief or activity increased over the 2006–07 reporting period in proportion to the total complaints received by the Victorian Equal Opportunity & Human Rights Commission.
Who is bringing the complaints?
The HREOC report indicates that women lodge more complaints than men (54 per cent of individual complainants were female, and 45 per cent were male). This trend is also mirrored in respect of complaints made under the Victorian legislation, with females lodging more complaints than males in the Victorian Equal Opportunity & Human Rights Commission.
In relation to complaints under the federal legislation, the HREOC report indicates that the vast majority of complaints are being received from New South Wales.
Implications for employers
- Employers need to ensure that they have proper policies and procedures in place to deal with discrimination complaints in the workplace.
- Employers should pay particular attention to policies in place with respect to issues including promotion/training/development, retirement and workplace behaviour (including sexual harassment, managing pregnant employees, parental leave, carer’s leave and requests for flexible working hours (including part time hours, return to work after parental leave, and so on)).
- Employers should also pay close attention to their processes for managing any complaints received from employees in order to minimise the risk of a complaint of victimisation. Employers’ policies should build in appropriate measures for managing the situation when an employee makes a complaint, in order to protect the employee from any adverse or prejudicial treatment.
This article was written by Karli Evans, Solicitor, and Georgia Rutecki, Articled Clerk, Melbourne.
- Currently, private sector employers are not required to comply with the National Privacy Principles (NPPs) set out in the Privacy Act 1988 (Cth) (Privacy Act) in relation to employee records.
- The Australian Law Reform Commission (ALRC) has recently recommended that the legislature abolish this employee records exemption.
- If the ALRC’s recommendations are adopted and become law, employer organisations will be bound by the requirements of the NPPs, with respect to personal information about their employees. The one exception would be that an employer could deny an employee access to evaluative material about that employee if it was given in confidence.
|
Background
The ALRC recently released a Discussion Paper reviewing the content and operation of the Privacy Act. The Discussion Paper recommends various amendments to the Privacy Act, including a recommendation to abolish the employee records exemption.
We have provided a summary of the current position under the Privacy Act for private sector organisations handling personal information about their employees. This background will assist discussion of the potential impact of the ALRC’s recommendation, should it be adopted and become law.
The NPPs
The Privacy Act sets out 10 NPPs which govern the way organisations treat personal information in the private sector, including requirements about:
- how personal information is collected, used, disclosed, kept accurate, secured, accessed and corrected
- openness in procedures relating to managing personal information
- the transborder flow of personal information, and
- the treatment of sensitive information (for example personal information about racial or ethnic origin, sexual preference, political opinion, religious beliefs or affiliations, membership of a trade union or criminal record, or health information).
‘Personal information’ means information which identifies an individual, or from which an individual’s identity can reasonably be ascertained.
The employee records exemption
Private sector organisations currently enjoy an exemption from the requirements of the NPPs, known as the employee records exemption. This exempts an act or practice which is directly related to:
- a current or former employment relationship between the employer and an individual, and
- an employee record held by the organisation and relating to the individual.
‘Employee records’ covers records about the employee’s engagement, termination of employment, terms and conditions of employment, training, disciplining, hours, salary, performance or conduct, leave or membership of a union or association. Health information about an employee is included.
Recommendations of the ALRC about the employee records exemption
Abolishing the employee record exemption
The ALRC has expressed its concern that the employee records exemption promotes inconsistency between the treatment of public and private sector employees, since the exemption is not available to public sector employers. Also, in its view, the exemption treats employee records differently to the other personal information an organisation may have (for example, about clients and customers) without justification. On this basis, the ALRC has recommended that the employee record exemption be abolished.
Exception regarding access to evaluative material
Employer bodies have expressed concern that abolishing the employee records exemption may hamper full and frank discussion about prospective employees with their previous employers. To limit this concern, the ALRC has recommended adopting the approach of the New Zealand legislature regarding employee references and evaluative information.
This recommendation involves amending the NPP relating to access to personal information to provide that:
- an agency or organisation may deny a request for access to evaluative material, disclosure of which would breach an obligation of confidence to the supplier of the information, and
- ‘evaluative material’, for these purposes, means evaluative or opinion material compiled solely for the purpose of determining the suitability or eligibility, or qualifications of the individual concerned for employment, appointment or the award of a contract, scholarship, honour or other benefit.
Status of the recommendations
These recommendations in the Discussion Paper are not in their final form. Having received submissions on the Discussion Paper from the public, the ALRC provided its final report and recommendations to the federal attorney-general on 30 May 2008 which will not be publicly available until tabled in Federal Parliament.
Implications for employers
If the Federal Parliament adopts the ALRC recommendations in their current form, private sector organisations will need to comply with the requirements of the NPPs with respect to their employees. Examples of such responsibilities would include:
- making sure employees are aware when personal information is being collected and the purpose for the collection
- making sure employees are aware of any organisation (or type of organisation) to which the employer usually discloses that kind of information
- using or disclosing the personal information of employees only for the primary purpose for which it was collected, unless the employee consents or other exceptions apply
- setting out express policies regarding management of personal information of employees and make these policies available
- taking reasonable steps to destroy or permanently de-identify personal information of employees if it is no longer needed for any purpose for which the information may be used or disclosed under the NPPs, and
- only collecting sensitive information (for example personal about racial or ethnic origin, political opinion, religious beliefs, sexual preferences, or health information) if the employee consents or other exceptions apply.
Given the reforms are only proposed at this stage, we have not set out an exhaustive list of the requirements under the NPPs. The Office of the Federal Privacy Commissioner has released Guidelines to the NPPs (guidelines) which provide a helpful guide to understanding the requirements in their current form. For completeness, we note that the ALRC has also proposed changes to the NPPs themselves which we have not explored in this article and which are not covered in the guidelines at present.
Private sector organisations are already bound by the requirements of the NPPs with respect to personal information about non-employees, including contractors, clients and customers. Should the reforms proposed by the ALRC become law, it is likely that employer organisations could adapt their existing privacy policies and procedures so that they also apply to their employees.
This article was written by Annelies Herrmann, Solicitor, Sydney.
Endnotes
1. http://www.hrmreport.com/pastissue/article.asp?art=272118&issue=230
2. www-03.ibm.com/employment/us/diverse/index.shtml
3. http://www.hrmreport.com/pastissue/article.asp?art=272118&issue=230
4. www-03.ibm.com/employment/us/diverse/executive_corner_vp.shtml
5. www.telstra.com.au/abouttelstra/csr/crr/wm_diversity.shtml
6. www.aami.com.au/careers-at-aami/diversity-in-workplace.aspx
7. www.wowcareers.com.au/wowcareers/woolworths/whyus/diversity.htm
8. (No 3) (Anti-Discrimination) [2008] VCAT 584 (11 April 2008)
More information
For information regarding possible implications for your business, contact a member of the Equal Opportunity, Discrimination & Diversity team.