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13 Dec 12
How will the new federal discrimination regime impact you?

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The Federal Government acknowledges in its Regulation Impact Statement that the proposed consolidation of anti-discrimination laws into one Commonwealth piece of legislation will attract compliance costs of up to $25,000 for businesses, even before the cost of responding to claims is considered.

Following the November release of an exposure draft of the Federal Government’s proposed Human Rights and Anti-Discrimination Bill 2012, McCullough Robertson’s Tim Longwill and Peta Shanahan explain the nature of the proposed changes and what they mean in practical terms.

What are the changes? 

We expect that the most obvious significant change for employers will be the effective reversal of the onus of proof in unlawful discrimination cases.  That is, the strength of a claimant’s evidence in a discrimination claim will no longer form part of the court’s assessment.  Instead, the court will presume that the impugned conduct is taken for an unlawful reason if any evidence can be adduced by the claimant, regardless of its strength, unless the defendant is able to prove the contrary. 

The rationale behind this change is that a respondent (usually the employer) will almost always be in a better position to be able to prove the true reason why a certain course of action was taken than the applicant.  However, the Government has acknowledged that this reversal of the onus of proof could significantly increase the number of complaints made, and the reality is that organisations may face significantly increased costs in defending claims as a result of the reversed onus.

On the other hand, the new regime may provide some relief for organisations by way of the proposed compliance codes, which are to be developed by the Australian Human Rights Commission.  The Bill provides that conduct that is in accordance with the published compliance codes will not be unlawful.  Organisations may also develop, and provide to the Commission, action plans to assist them and their employees, officers, members or agents in complying with the new provisions.  These action plans may assist compliance but will not provide a defence to any unlawful conduct (even if it is consistent with the action plan).

An amendment to the test for when discrimination occurs is also a significant feature of the new legislation.  Instead of the current distinction between ‘direct’ and ‘indirect’ discrimination, it is proposed to introduce a new test, which refers to both ‘unfavourable treatment’ and ‘disadvantageous effects’ as ‘discrimination’, eliminating the distinction between the two limbs currently available.  Although this does significantly amend the terminology used in this space, there is unlikely to be a practical effect on the tests aside from the need for employers to update their policies and procedures to reflect the amendment.

A large number of the current exceptions and defences are also proposed to be streamlined or eliminated.  In the short term, this is likely to result in some uncertainty as to the extent of the prohibition on discriminatory conduct, however this uncertainty will resolve itself over time as the courts consider and decide individual cases.  In addition, the concepts are largely similar to some State-based legislation and organisations may therefore turn to cases decided under these similar provisions to divine some guidance as to the application of the changes. 

In terms of the ‘attributes’ or ‘grounds’ for discrimination, all those that were in the four core pieces of Commonwealth legislation have been retained with little substantive change (for example age, sex, race, disability, etc.).  However, in addition to the previous attributes, the Federal Government has imported gender identity and sexual orientation (previously grounds that were only available in an employment context) from the wider legislative landscape.  This means that these attributes are now protected in all areas of public life, not only in the employment sphere.

Because the attributes as defined have not undergone significant change, we consider that much of the previous case law and judicial interpretation will continue to assist organisations in determining the scope of the protections and aid in the interpretation of the new legislation.       

Significantly, and possibly representing an advantage for employers, discrimination on the basis of previous criminal convictions has been omitted from the new regime.  As far as the Federal Government is concerned, organisations will now be able to make employment decisions taking into account the employee’s (or prospective employee’s) previous criminal convictions. 

However, and significantly, employers must have regard to the effect of any State-based ‘spent convictions’ laws.  For example, in Queensland the Criminal Law (Rehabilitation of Offenders) Act 1986 provides that employees do not have to disclose a range of criminal convictions for which the relevant rehabilitation period has expired.  This period can be up to ten years for an indictable offence (although not all convictions are capable of becoming ‘spent’).  Similar provisions also apply in New South Wales.  

It is likely that in the short term these changes will lead to a significant increase in claims of discrimination in the Federal courts and tribunals.  However this may coincide with an equivalent decrease in claims under the various State acts, particularly as the legislation does not allow concurrent claims in both jurisdictions.  In fact, a move towards greater centralisation of power in the Federal Government may be one of the underlying policy reasons for the changes now foreshadowed and may signal the beginning of a slide away from continuing State intervention in these matters.

What are the practicalities for employers?

Overall the new regime is likely to benefit organisations as it represents a significant step toward a consistent and comprehensive approach to discrimination in Australia.  Though not a one-stop-shop the Bill reflects the Government’s response to cultural change since the first of the core legislation was released in 1975.

However, despite the Government’s stated intention to amalgamate and simplify discrimination laws in Australia, employers should be mindful of the teething problems usually associated with this type of legal reform.  Specifically, employers may be required to revamp their policies and procedures and implement updated training regimes to reflect the above changes.  Owing to the inherent uncertainty as to how the legislation will function, we recommend that employers adopt a cautious approach to internal policy changes, despite some of the advantages that the new legislation will bring.

Most importantly, it should be emphasised that the risk of non-compliance is likely to increase as both the difficulty and the costs of defending a claim under the new regime are likely to increase.

Until the legislation is finalised and implemented it difficult to determine the precise impacts of the consolidation but the changes are a timely reminder, particularly in this space, that prevention will always be better than cure.  

McCullough Robertson frequently advises employers on adopting, drafting and implementing anti-discrimination policies, procedures and strategies.  For further information or queries, please contact a member of the Workplace Relations and Safety team.

This Alert covers legal and technical issues in a general way. It is not designed to express opinions on specific cases. This Alert is intended for information purposes only and should not be regarded as legal advice. Further advice should be obtained before taking action on any issue dealt with in this publication.

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