In April last year the State Supreme Court ruled that the employer directly discriminated against the manager under the Equal Opportunity (EO) Act 2010 (Vic) by failing to negotiate her salary while continuing to pay six of her male employees in her department at over-enterprise agreement rates.

Between 2011-2018, the manager attempted to negotiate her remuneration six times, and was continuously “blocked” by management.

Dr Jennifer Whelan, a social psychologist who specialises in researching unconscious bias and organisational gender diversity, was called upon to provide expert advice.

Dr Whelan highlighted that Austin Health pays roughly equal numbers of men and women at above-agreement rates based on their classification – even though the workforce has a greater proportion of female employees. This demonstrated that because the organisation employs more women, a higher proportion of over-agreement employees are men.

The research also noted that women are more likely to experience backlash when negotiating higher remuneration compared to their male counterparts, presenting “gender bias”.

Dr Whelan concluded that when the manager attempted to negotiate her salary, she was accused of being “motivated by money”, which the expert considered was less likely to happen to a male employee.

The manager was also being paid less than several male colleagues, including one that reported to her. These examples reflected the research findings of “unconscious bias”.

In the earlier ruling last year, Justice Richards considered specific sections of the EO Act that recognised how “direct discrimination” can include discrimination that is unintentional or unconscious. According to her Honour, it would be considered “contrary to the objectives of the EO Act, which include eliminating discrimination to the greatest possible extent”, to interpret the Act in a confined way based on the reasons of individual decision-makers.

As such, the complaint was described as “systemic discrimination by a large organisation” and “could not be reduced to a few isolated incidents” over a period of seven years.

Decision

Court of Appeal Judges upheld the Supreme Court’s decision, rejecting the employer’s nine grounds for appeal, which included arguments that Justice Richards made legal errors in determining that VCAT had applied the wrong test for direct discrimination, VCAT failed to weigh up the “entire evidence”, and that it failed to consider the manager’s final attempt to negotiate salary.

The appeal bench highlighted the varying factors that were considered in the decision, including:

• the manager’s requests over a seven-year timeframe to negotiate her salary
• the supervisors’ “blocking” of those requests
• the employer’s decision to pay male employees in their department higher rates while refusing a female employee the same opportunity
• the evidence of the expert witness.

Ultimately the appeal bench concluded that the Tribunal did “not have regard to the complex unfavourable treatment” experienced by the manager, and that “it would be difficult to see how the Tribunal could have reasonably concluded otherwise”. The appeal was dismissed.

Learnings for business

This decision demonstrates the importance of complying with legislation, including equal opportunity laws, and how business decisions and procedures can have significant impacts on an employer’s liability.

It emphasises that the positive duty to take “reasonable and proportionate measures to eliminate discrimination and sexual harassment” is not solely limited to ensuring employees and managers are afforded appropriate training on EO and that bullying/harassment policies are implemented. It requires a more proactive approach with employers ensuring they are treating all employees equally, and decision-making is objective and non-biased, to meet their obligations under the Act and mitigate potential discrimination claims.

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