Significant win for employers: court narrows rights of employees with family responsibilities

The decision for the Court of Appeal was whether the requirement that Ms Schou attend work full-time on site at Parliament during sitting days was reasonable.

Ms Schou argued that the attendance requirement was not reasonable, in light of her alternative proposal that she work at home via a modem, which was of inconsequential cost to her employer.

The State of Victoria argued that the mere existence of the modem proposal as an alternative which was open and available to the State of Victoria did not bear upon the reasonableness of the condition or requirement that the State of Victoria, as employer, chose to impose.

The decision

Justice Phillips, with Justice Buchanan concurring, found the Tribunal had erred in determining that the requirement to attend work full-time on site at Parliament during sitting days was unreasonable.

The test

The court found that the tribunal in the re-hearing were 'seduced by the argument' that because the modem proposal was a reasonable alternative, that the condition or requirement for attendance on site during the sitting days was itself not reasonable.

The correct test to be applied in determining whether or not indirect discrimination had occurred was to first consider the requirement itself, independently of any alternative. The reasonableness of the condition or requirement is then to be considered with regard to the alternatives. However, his Honour emphasised that the alternatives must be as efficacious as the requirement itself if they are to bear upon the reasonableness of the requirement under attack.

In other words, the existence of the alternative only influences the reasonableness of the condition or requirement where each option is equally suited to the end.

His Honour also found that the onus was on the employee to establish that the requirement was unreasonable.

The test applied

In applying this test, his Honour considered the arguments advanced by the employer in support of the reasonableness of the requirement, including:

• strict time constraints applied to the work
• the need for interaction between all staff members to produce accurate reports quickly (within two to three hours)
• the small size of the team, and the burden of an increased work load for workers who remain on site if one of them attempted to work from home
• security of documentation could be at risk
• there was a potential difficulty with rectification of equipment failures
• working from home meant more limited access to resource material
• there were possible audio-equipment limitations if telephones were used rather than directly listening to recordings, and
• possible difficulties in liaising with Parliamentary members working from home.

The alternative

In considering the influence, if any, of the alternative proposal, his Honour concluded that it was not equally suited to the requirements of the job. The modem proposal was not as efficacious or as suited to the task of being a sub-editor as the attendance requirement itself and therefore did not render the requirement unreasonable.

The dissent

Justice Callaway found that no error was made by the Tribunal in the re-hearing, but rather that Phillips and Buchanan JJA took too narrow a view of the words 'requirement, condition or practice' in s. 9 of the Act. His Honour's dissent found that the correct test to be applied was whether or not it was reasonable to impose an inflexible requirement.

Implications for employers

Whilst this latest Schou decision brings welcome support of the right of employers to impose reasonable requirements, such as attendance requirements, without the need to accede to alternatives that do not meet their business needs, the implications for employers must be considered carefully.

• This decision fits into a long line of cases on flexible working arrangements which, to date, have mostly favoured employees. In essence to avoid discrimination claims, employers must be able to identify what their requirement is for a particular role and demonstrate that the requirement is reasonable in all the circumstances. Employers should have in place a clear and consistent process to consider all relevant factors to determine whether any requirement that employees work in a particular way is reasonable. This is usually done by first identifying the inherent requirements of a role and considering any obstacles to the role being done flexibly. Employers should consider any accommodations they can make to allow the role to be done as efficiently as occurs if the requirement is met. Careful consideration of whether the alternative is equally suitable must be undertaken. Failure to do so risks discrimination claims being successful.
• Employers will need to exercise caution when assessing the reasonableness of their requirements. In this case, the court paid particular attention to the circumstances of the particular case, before reaching its conclusion. For example, the Court of Appeal gave weight to the fact that interaction between employees and the tight timeframes within which the work had to be produced necessitated employees to be on-site.
• Employers need to be wary that employee groups will argue that the decision can be easily distinguished, as it turned on the unique working environment of Hansard sub—editors. The work of sub-editors was deemed to be 'highly skilled and unique.' Successful discrimination claims may be made in other situations, such as for larger employers, where the work undertaken is not as unusual.
• The court acknowledged that a good employer could consider from time to time specific requests of a particular employee to depart from the general rule, for example for emergencies and the like. In this case, he acknowledged that Ms Schou's concerns were of a short term nature and to meet a temporary problem. Justice Phillips states that 'the recognition of the need to admit exceptions is a matter for proper management, not anti-discrimination legislation'.
• It is possible that in future, applications of this kind will instead be made under industrial legislation alleging that any termination was unfair or harsh, unjust or unreasonable. Indeed, if Ms Schou had made a claim of unfair dismissal, the relevant commission may have found that the employer should have accommodated her for a limited period, particularly due to the small cost to her employer, and temporary nature of the alternative solution. It may have found that the failure to do so rendered the termination harsh, unjust or unreasonable. Of course, there are compensation limits to unfair dismissal legislation which do not apply to the anti-discrimination jurisdictions.
• Managers and human resources staff would benefit from training to ensure that they do not prematurely assess a requirement as reasonable, without sufficient regard as to whether the alternative is equally suitable. Many of the flexible work cases to date have evidence of managers expressing their personal view that an alternative arrangement would not work before any legitimate consideration of a request is made. Such statements are highly prejudicial to employers.
• This case also demonstrates why it is important to have internal equal opportunity complaint processes to handle any complaints of discrimination made by employees internally. A period of almost eight years has passed since Ms Schou resigned, including two Tribunal and two Supreme Court hearings, until Friday's decision was handed down. The time and cost involved in this process was undoubtedly significant for both parties.
• Employers should also be aware the Ms Schou has the right to appeal this decision to the High Court of Australia for further determination.

Kate Jenkins, Partner and Alexis Eddy, Solicitor.