22 Dec 2009

Are your EEO policies and procedures compliant with the new laws?

by Hedy Cray

Outdated EEO and other anti-discrimination policies and procedures could leave employers and employees exposed.

The introduction of new obligations not to engage in "adverse action" and changes to age and disability discrimination laws gives employers a reason to take stock of whether their policies and procedures continue to be legally compliant and effective as tools of risk minimisation.

A new concept of adverse action

The passage of the Fair Work Act 2009 in July saw the introduction of a broad new alternative remedy for discrimination in the form of protection from "adverse action". These protections provide remedies much broader in scope than those available under anti-discrimination laws.

Importantly, the new adverse action provisions potentially apply in a discrimination context in two ways. First, there is a general prohibition on adverse action, which includes dismissal of an employee, injuring or altering an employee in their employment, or discrimination against a person, because they have exercised (or have not exercised) a "workplace right". The concept of a "workplace right" is defined broadly. Among other matters, a person has a workplace right if he or she is able to make a complaint in relation to his or her employment, or to a person or body able to enforce compliance with a workplace law.

A person will therefore have a workplace right where they have protection under anti-discrimination laws. In this sense, taking any prejudicial action against an employee who, for example, makes a complaint regarding harassment in the workplace would constitute adverse action, and be prohibited under the Fair Work Act. The workplace right provision, like discrimination legislation, can apply to potential employees.

Second, the Act boosts existing anti-discrimination protection by specifically prohibiting any adverse action on discriminatory grounds. Prohibited grounds include race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.

A reverse onus of proof applies for claims by employees alleging adverse action, and the claim will be made out where only one of several reasons for the action was a discriminatory reason.

Employers should be familiar with the important concepts of workplace rights and adverse action, and be aware of their scope to reduce the risk of claims in this area. A breach of this provision of the Fair Work Act can attract a civil penalty of up to $6,600 for an individual and $33,000 for a corporation. Similarly a person who has been dismissed on these grounds can apply to Fair Work Australia within 60 days of the dismissal and Fair Work Australia may subsequently deal with the dispute.

Changes to age and disability discrimination laws

In other legislative developments, the federal Age Discrimination Act 2004 and Disability Discrimination Act 1992 were both broadened in scope by amendments with important implications for employers.

Persons alleging age discrimination will now find it much easier to establish a claim, as the amendments to the Age Discrimination Act have changed the relevant test. Previously, for an action to constitute unlawful discrimination the age of a person needed to be the "dominant reason" for the taking of that action. Now, the bar has been lowered so that an act may be discriminatory where age is just one of many reasons for the action.

The Disability Discrimination Act was also amended to expand the definition of "disability" to include a genetic disposition to a disability and behaviour that is a symptom or a manifestation of a disability. This potentially widens the scope for behavioural claims such as stress-related illnesses to fall within the definition.

The amendments also sought to clarify the general duty upon employers to make "reasonable adjustments" for employees with a disability. An adjustment will be reasonable provided it does not impose an unjustifiable hardship upon the person making the adjustments. Previously, this duty had been assumed to exist, however the amendments make it clear that there is a positive duty for employers to make reasonable adjustments to their workplace to accommodate someone with a disability. In a claim for disability discrimination, the onus will be upon the employer to prove that an adjustment would have caused unjustifiable hardship.

The amendments also provide that a failure to make reasonable adjustments (so long as they do not pose an unjustifiable hardship) can constitute a ground of disability discrimination.

The scope of indirect disability discrimination was also widened by the amendments, replacing the test of "proportionality" with one of "disadvantage." The proportionality test meant indirect discrimination occurred where an employer imposed a requirement or condition on a disabled person in circumstances where a substantially higher proportion of persons without the disability could comply. The requirement or condition also had to be unreasonable in the circumstances.

Now, the situation is that the requirement or condition will be discriminatory where it has, or is likely to have, the effect of disadvantaging people with the disability of the person alleging discrimination, or the employer has not made reasonable adjustments that would enable the employee to comply . This is a much easier test for employees to satisfy. The onus has also been switched so that the employer will have the burden of proving that the condition or requirement was reasonable.

Review of policies and procedures

A number of significant legislative changes have taken place in recent times and it is important for employers to have regard to these changes. In particular, many employers may need to amend their existing EEO policies and procedures to incorporate the amendments that have been made in particular to the age and disability discrimination laws.

A failure to do so may leave an employer in a position where their policies and procedures are outdated undoubtedly, but more critically, leave them flawed. This may give rise to a situation where, no matter how well drafted a current policy is, it no longer remains legally accurate. This could impact on an employer's capacity to successfully defend discrimination proceedings, particularly, where it seeks to rely on a vicarious liability defence.

In addition to any review of relevant policies and procedures, it is more important than ever to ensure that all staff and in particular managers are aware of their obligations in respect of discriminatory and harassing behaviour.

Importantly, managers should also be aware of an employer's new obligations not to take adverse action against employees and prospective employees. Unlike the anti-discrimination laws which define the context and circumstances in which discriminatory conduct may occur, the circumstances in which adverse action may take place are clearly much broader and potentially more difficult to discern in every circumstance.

This is especially so when adverse action can include in respect of an employee:

  • dismissing the employee;
  • injuring the employee in his or her employment;
  • altering the employee's position to his or her prejudice; or
  • discriminating between the employee and other employees.

Finally, employers should also be aware that strictly speaking there is no equivalent to a "vicarious liability" defence as is found in the anti-discrimination laws. Therefore, if an employer is found to have engaged in adverse action towards an employee, the employer will be found to have contravened the Fair Work Act. The only "defence" is where the employer can prove the conduct was not engaged in because of a workplace right (for example, a right to request under the new National Employment Standards) or alternatively (where the conduct concerns a discriminatory ground) the conduct is not adverse action because it was otherwise not unlawful under state or federal anti-discrimination laws or was taken because of the inherent requirements of the position.


Thanks to Stephen Gavin and Nicholas Allan for their help in writing this article.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.