Australian Iron & Steel Pty Limited v Banovic

[1988] HCATrans 246

IN THE HJGH COURT OF AUSTRALIA

Office of the Registry

Sydney No S66 of 1988

B e t w e e n -

AUSTRALIAN IRON & STEEL PTY LIMITED

Applicant

and

J. BANOVIC, E. ESPINOZA, K. GORGIEVSKA,

L. MARTINOSKA, B.SIMONOVSKA,

G. TAHERE, H. TRENESKA, F. VOULGARIS

First Respondents

PRESIDENT OF THE ANTI-DISCRIMINATION

BOARD

Second Respondent

Application for special

leave to appeal

WILSON J

AIS

DAWSON J

TOOHEY J

TRANSCRIPT OF PROCEEDINGS

AT SYDNEY ON FRIDAY, 14 OCTOBER 1988, AT 11.06 AM

Copyright in the High Court of Australia

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MR P.G. RELY, QC: If the Court pleases, I appear with

MR S.D. ROBB for the applicant. (instructed by

Blake Dawson Waldron)

MR J. BASTEN:  I appear for the respondents, if the Court

pleases. (instructed by Roger West)

WILSON -:J: - I have received from the Registrar advice that

the second respondent, the President of the the Court in these proceedings save as to costs and

does not propose to be represented. Mr Hely?

MR RELY: If the Court pleases. Your Honours, this

application seeks to agitate a short but, we submit,
difficult question of construction of section 24(3)

of the New South Wales ANTI-DISCRIMINATION ACT. The

section appears at pages 121 and 122 of the appeal book.

Subsection (1) prohibits what is sometimes called

direct discrimination. Subsection (3) which appears

on page 122 prohibits what is referred to as

indirect discrimination. It provides that:

A person discriminates against another

person on the ground of his sex if he

requires the other person to comply

with a requirement or condition -

(a)

with which a substantially higher sex to the sex of the other person

comply or are able to comply.

The applicant con:mJ.enced to retrench ironworkers on

14 November 1982. It retrenched people by reference

to the last-on/first-off principle, the application of

which produced the consequence that all persons who were

hired after 6 January 1981 were retrenched.

The affidavit sets out the impact of that policy

upon the work-force and I have had that reproduced in

tabular form so that one can see that as at 14 November

there were 8208 persons in the work-force of whom

7698 were men and 510 were women; 521 men were retrenched

as against 32 women. That represented 6.77 per cent of

the total male ironworker work-force compared to

6.27 per cent of the female ironworker work-force,

and the statistics and percentages for the persons who

continued employment are as indicated by the table. Thus, both in terms of absolute numbers more men were retrenched than women and considered as percentages or proportions

of the respective components of the work-force, a greater

percentage of men were retrenched than was the case with

women. None the less, the tribunal held - and this

finding was upheld by the Court of Appeal - that the
application of the last-on/first-off policy attracted

the operation of section 24(3).

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In the Court of Appeal there were four views

agitated as to the proper construction of this section.

There was a view adopted by the Chief Justice; the

view which Mr Justice Priestley referred to as his

preferred view; the view contended for by the applicant

and the view contended for by the respondent. The

_Ghief .Justice, at page 107 at about line 8, said the

base group to which one looks is the work-force because

it is to that work-force that the requirement or

condition is applied. With that construction, we

respectfully agree but His Honour said at about line 25

that what one does is simply to take a simple numerical

comparison and one can see that as 7177 men were

retained in comparison to 478 women, the number of men
retained was approximately 15 times the number of women
retained, hence, the operation of section 24(3)(a)

was attracted.

Whilst we accept His Honour's definition of the

base group, we submit that he fell into error in

substituting for proportion a simple number. What

the section required was one take the proportion -

one take the number of men retained as a percentage of

the total male work-force and compare that with the

number of women retained as a percentage of the female
work-force. One sees that those two percentages are

approximately equal, hence, the operation of the section

is not attracted.

Mr Justice Priestley, at page 151, at about

line 22, commences to discuss His Honour's preferred

view which was not the subject of debate between the

parties and His Honour comes to the conclusion that

one takes the number of women retained as a percentage

of the total New South Wales' female population and

compare that with the number of men retained as a

percentage of the total New South Wales'male population.

Because the two populations, on a State basis, are

approximately equal, one has a far greater percentage

of men retained than is the case of women, hence,

the operation of subsection (a) is attracted.	So that
His Honour takes as the relevant population not the

population to which the condition was applied but

a population which consists of persons who could not

possibly satisfy the condition because they were never

employed by the applicant.

DAWSON J:  He does not say so,but does the idea that the

employer had previously been discriminating to produce

this imbalance come into this here?

MR RELY:  Yes.

DAWSON J: Well, he might say so, I cannot recall.

MR RELY:  He certainly refers to that as a relevant fact but

I think just as a matter of pure construction of the section. Whether there has been past discrimination

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or whether there has not, his preference is to take
the total population of the State as the group for

the basis of comparison.

DAWSON J: You would think there would have to be a

locus poenitentiae for past discrimination, would you

not?

:MR RELY:  Except that past discrimination to the ~xtent to

which it is unlawful, is aJready the sub_1ect

of compensation under section 24.

DAWSON J: Yes, I appreciate that.

:MR RELY:  Because all of the court or each member of the

court held, and we accept, that a component of _

damage for delay in hiring is increased exposure to

retrenchment.

DAWSON J: Well, that is probably the locus poenitentiae,

but after that - - -

:MR RELY:  The slate is clean, we submit.

DAWSON J: Yes, you would?

:MR RELY: Yes. That is the second construction. So, there is

a difference between the Chief Justice and

Mr Justice Priestley of what the definition of the appropriate population for comparison purposes.

DAWSON J:  Does that element of past discrimination come

into the Chief Justice's -

:MR RELY:  No, he simply says that it is a question of numbers.- - -

DAWSON J: Just numbers.

:MR RELY:  - - - which ignores the words of the section which

talks about proportions. The Chief Justice would say

that if you had a work-force which consisted of 10 men

and 100 women and you imposed a six foot height

requirement with which all men and 20 of the women

could comply - - -

DAWSON J: The section talks about proportions but it does not

say proportions of what, of course, and that is the problem.

:MR RELY:  That is what one has to work out which is perhaps

the explanation of the four competing views in the

Court of Appeal. So, that is the second competing view.

The third competing view is the view put forward

by the respondent. That appears at the top of page 151,

lines 1 to 5. It is a view which is constructed purely

for the purpose of overcoming the effect of past

discrimination. It involved looking at each applicant

upon an individual basis and it says, I think, that if on

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a particular day 10 persons, for example, aDplied .for

employment, nine ..... one of whom was a woman,

those nine would not be retrenched because their

employment took place at a point in time which escaped

the retrenchment net. The person who missed out was

hired later at a point in time which was caught by the retrenchment net. So that if you look at that

original group of 10 and look at what ultimately

happened, one can see that nine avoided retrenchment,

one did not. Therefore, one out of two women were retrenched

and none · out of eight men, hence, there is an

imbalance which produces discrimination. That was,

as I understand it and I hope I do justice to it, the

point of view put forward by the respondent.

Mr Justice Priestley at about 15 on page 151

accepted without, if I may say so_. with respect,

exposition that construction. We say, in relation to

that, essentially two things: firstly, it bears no

relationship to the words of the section and

secondly, it selects as the group for examination

a group which is quite different from the group to

which the condition is applied. There is no

logic or policy as selecting as one's base group

a group which is remote from the group to which the

condition in question is applied.

The fourth construction contended for in the

Court of Appeal was the respondent's construction which

is summarized on page 151 at line 10. It is

you simply take the work-force - I am sorry, this is

the contention for which the applicants were agitating.

It is summarized on page 151 at line 10 and it simply

says you take the work-force as at the date of
retrenchment because that is the group which is affected

by the application of the condition, look at

the number of males who were retained in relation to

the total and in relation to the male work-force;

you look at the number of females who were retained in

relation to the female work-force; you discover that

the percentages are approximately equal, in fact,

favourable to the women, hence, there cannot be any

discrimination.

(Continued on page 6)

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DAWSON J: And unless you do that, I suppose, you say you

are necessarily taking into account a second

time discrimination in the failure to hire?

MR RELY:  Yes. We, in effect, go with the Chief Justice in

selecting the work-force as distinct from the

_-:.-State as the catchment area; we differ from the

Chief Justice in taking a proportional approach

as distinct from a purely numeric approach.

We submitt with respect, that the purely numeric approach for which the Chief Justice contended

is just not authorized by the section and it

produces - - -

DAWSON J:  The section talks of proportions not numbers

even though it does not say proportions of what.

MR RELY: It talks of proportions, not numbers - of what,

yes, but one still has to have proportions of
something. And the identification of that something
is the matter which, in our respectful submission,

warrants the grant of special leave to appeal.

DAWSON J:  I suppose \numbers are proportions, are they

not, necessarily?

MR RELY:	When applied to each other they can b~, but not
just in the abstract. It may be one can accept
that in some circumstances there is much to be
said for Mr Justice Priestley's preferred view that one looks to the population as a whole and
not just a particular work-force which is under
consideration .. That.may be, perhaps, in cases
where one is talking about a characteristic which
appertains to the population as a whole, such as height, weight, hair colour,. matters of that type, but we do submit that there is something odd in lodking at the population as a whole, as constituting your base grou9 when the population as a whole cannot possibly comply with a term or condition in question because it is essential
to  one's capacity to do so that one is an
employee of the applicant.

The only persons who are affected, or could

possibly be affected by the application of the

condition, are persons who have been employed

hy the appellant. Given that that is so, it

seems, we submit with respect, both artificial

and pointless to have regard to the characteristics

of a class which cannot possibly be affected

by the application of that condition.	So that
we submit that the -

DAWSON J: I suppose that is - I mean, even if you

had a condition of the sort that you are speaking

about in relation to dress or haircut or whatever

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it might be, applied as a condition by a particular

employer, it can only have effect with respect

to his own workmen.

MR RELY:	To his staff, .yes. That is our preferred position
but even if that position be rejected we submit

--that one cannot have recourse to the world

when one is considering a condition which

is inherently capable of application only to

a group of much smaller dimensions than the world.

DAWSON J:	Any condition imposed by an employer
MR RELY:	Has that characteristic, yes.

DAWSON J:  - - - is ..... to be applied to his work-force,

although the cnndition might be of one that is

capable of wider application.

MR RELY:	Yes, I take Ybur Honour's point.
DAWSON J:	You just simply say, this condition is not capable

of -

MR RELY:	This condition is not capable of - - -
DAWSON J:	- - ~ wider application.

MR RELY:  That is so, yes. What one gets back to, if the

Court pleases, is that we have a decision of

the Chief Justice which we submit is flawed
because of the substitution of a numerical factor

for a proportion.

DAWSON J:  Why is not this condition capable of wider

application? The principle of last on first

off is capable of general application if it is

applied - - -

MR RELY: It is, but its practical operation is conditioned

by employment and the only person - the whole

of New South Wales is not employed by AIS.

only persons who are employed by AIS are its	The
staff.

DAWSON J: But, you see, on one view, it does not matter

that the proportions in this particular employer's work-force are - whatever they might be - looked -

I suppose this is the way that it was approached by the Chief Justice - looked at in the work-

force in general it may be discriminatory and

that is what the legislature - as a condition,

that is what the legislature is aiming at.

MR RELY:	Except that I suppose then there may be a difference depending upon whether one is considering a test for whether a person should come into a group
or whether he should go out of it.  If the situation

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that one is considering is whether a person should

go out of the group, and one applies the condition
not disproportionately to the sex composition
of the group, we submit that it is a bit hard
to see how any policy to which the legislation
was intended to give effect could be contravened.

So that we do submit that the decision of the Chief Justice is subject to criticism for

the reasons indicated. Whether one takes

Mr Justice Priestley's preferred view which was

not the subject of argument and upon which he

expressed no reluctance at 154, line 15, to come

to a final conclusion that hearing the parties

upon that, or whether one takes the respondent's

contentions to the Court of Appeal which were
accepted by Mr Justice Priestley and

Mr Justice Mahoney, we do submit that whichever

approach is adopted, it is open to criticism

and that the matter is of sufficient difficulty
and importance to warrant the grant of special leave to appeal, particularly having regard to the circumstance that legislation of the Commonwealth

and of the States incorporates provisions

substantially comparable to section 24. If the

Court pleases, those are our submissions.,

WILSON J:	Thank you, Mr Rely.
DAWSON J:	You do restrict your grounds to section 24(3)?
MR RELY:	Yes, Your Honour.
WILSON J:	Mr Basten.
MR BASTEN:	Your Honours, this has been a long-running case involving some 34 complainants before the
Equal Opportunity Tribunal and the Court of Appeal and has involved elements of broad significance
with respect to the antidiscrimination laws.
The applicant originally filed some 95 grounds
of appeal in the Court of Appeal; all but a handful
were abandoned.  But the matter which now comes
before this Court with respect to 8 persons involving quite a small amount of the total judgment for damages is simply not, in our submission,
a special leave point.

It is no longer in dispute that the applicant

discriminated in delay in hiring, nor is it any longer in dispute that part of the loss flowing

from that delay was properly compensable in terms

of the loss suffered on retrenchment. The only

reason that this present question arose at all

was that some of the damages obtainable exceeded

the limit under the statute in relation to any

one act of discrimination.

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Therefore, the unlawfulness of this conduct,

even in relation to retrenchment, was not in

question. The need to consider the pool which

is prescribed by 24(3)(a) arose in those

circumstances and there were a number of options

open to the court. The option which the

-~-chief Justice adopted is, with respect, if my

friend is right in how he interprets it, a minority

view and my friend suggests that it should be

adopted by this Court. But before coming back

to that view, which we do not accept is necessarily

a minority view, could I turn to Mr Justice Priestley's

approach.

The difficulty, as we see it, for the applicant

in this case, is that Mr Justice Priestley engaged

in a lengthy and, with respect, very helpful
judicial exegesis of aspects of the law which

are common to the United States, the United Kingdom

and New South Wales. But, .ultimately, as my

friend has indicated, he stated at page 154 that

his views were obiter. The matter was decided

upon the view which he preferred, namely accepting

the approach adopted by the respondents and that approach would be sufficient for the respondents

to succeed and it would not be necessary for

the respondents to uphold the broader approach

which His Honour adopted.

The reason why the respondents' approach

is preferable is quite simply that it avoids

what one might describe as "the poisoned pool

approach". In other words, the approach sought

to be applied by the applicant has built into

it a discriminatory factor and it was our submission

below,.and a submission which was preferred to

that of the applicant, that that approach was

correct.

DAWSON J:  But that discriminatory factor has been compensated

for otherwise, has it not?

MR BASTEN:	Not it has not, Your Honour.
DAWSON J:	The discriminatory factor being the discrimination

in hiring?

MR BASTEN:  The discrimination in hiring has not been

compensated for in relation to these respondents.

That is why, in a limited area, this question

now arises. So much of their loss as flowed

from retrenchment has not been compensated in

so far as it produced a total loss exceeding

the $40,000 limit.

WILSON J:  So it really is only the statutory ceiling

which has denied them their full compensation?

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MR BASTEN:  That is so, Your Honour, yes.

WILSON J: Mr Basten, if there had been no delay in hiring,

then could the retrenchments carried out in fact

in this case have been discriminatory?

MR BASRN-:  We would have said 11 No 11 , not on the facts as

argued. The problem which arose was that there

was no discrimination within the work-force if

you viewed the work-force in terms of the dates

of employment.and if there was no problem with

the dates of employment then the proportions

were roughly equivalent and there was no

discrimination. The difficulty is that the date

of employment is itself a discriminatory factor

so that that is why - - -

WILSON J:  But that strongly points in the direction of

the primary basis for discrimination based on

delay in hiring?

MR BASTEN:  Yes.

WILSON J: It should really, on that view, have been the

beginning and end of it. I mean, the statutory

ceiling is altogether an independent consideration.

which the legislature apparently thought - - -

MR BASTEN: It is an independent consideration. It therefore,

in our submission, renders these facts slightly

unusual and not necessarily a good basis for

a consideration of the application of section 24(3)

The difficulty for the applicant is that the

retrenchment itself must have constituted a

separate act and therefore was potentially

available to ~round a new complaint of discrimination.

And that, as I understand, is not challenged.

The question simply becomes: accepting that there

is a separate act of discrimination, how does

one apply the law to it? And that involves a

definition of the correct pool for the determination

of a proportion. That is a matter which, as the Chief Justice

himself indicated, and my friend may or may not

accept this, is largely a question of fact in

itself.and will be determined by the circumstances

in particular cases. And His Honour noted that

at page 107, at line 20. So that what we say

in this case - perhaps before I come to that,
may I say this: although we do not need to support

the wider view adopted by His Honour

Mr Justice Priestley, we say that it is supportable

because if one takes a condition which has a

certain application across the work-force at

large, that is what the legislature is intending

to outlaw by the legislation.

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It would case great difficulty if one had

to look at the particular characteristics of

an individual work-force to determine whether
particular approaches were unlawful and if one

took height, which is a very common example,

should each employer, in deciding whether to

_-:.-promote people over a certain height, measure

his work-force first in order to determine whether

his work-force reflected the general population

or not.

So there is a sound basis, in our submission,

for adopting the view that His Honour

Mr Justice Priestley adopted and there is not

sufficient doubt attending that approach. But

to say that the other approach is wrong is firstly
to deal with a matter which was not argued in

detail in this case - I am sorry, I withdraw

that - which was argued but not reasoned in detail

by His Honour Mr Justice Priestley or by the

Chief Justice .. It is an element which has a

strong hypothetical significance because it is

not at all clear that if one refused to accept the poisoned-pool argument that the applicants put one would not have to reopen the question

of whether section 24(1) amounted - whether the

conduct amount to discrimination under 24(1).

So there is that difficulty too and, in

our submission, each case will depend upon its

own facts. There are not necessarily any general

principles to be derived from this and this is

not an appropriate case in which to consider

such issues as may or may not arise in relation - - -

DAWSON J: ls that right, Mr Basten? I am genuinely

seeking information, not questioning what you

say in the other sense, but when the statute

talks of proporiton, it must mean proportion

of something; can that vary from case to case

so that the section has, as it were, a sort of

ambulatory effect?

MR BASTEN:	I would submit that the preferred approach of Mr Justice Priestley and Mr Justice Mahoney
is that it is not likely to vary  from case
to case, at least in relation to employment matters because one would - - -
DAWSON J:	I understood you said, just a moment ago, that

it could.

MR BASTEN: It could, yes. My friend's approach would

certainly indicate that it could because he would

want to take an individual work-force in some

cases though presumably not in others. Applications

for employment would have to be considered on

a different pool basis.

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DAWSON J: Just as a matter of statutory construction,

can you do that?

MR BASTEN:	Your Honour, I think one might have to on the approach that my friend is proposing, because
if he is looking to the pool to which the

__ condition or requirement is directed, it will

vary significantly and it would presumably be

necessary in a case of hiring of a university

graduate that one looked to a pool comprising

university graduates. If one were looking for

someone with those qualifications one would

restrict the work-force accordingly. So that

in that sense it may well be that the legislature

requires a definition of the pool depending on

the facts of the case.

I think that was what His Honour the

Chief Justice had in mind and that is the approach

which my friend accepts so, yes, indeed, on his

approach one would have to look at the circumstances

individually. Perhpas not on Mr Justice Priestley's

approach. And that is one reason why His Honour

Mr Justice Priestley may have a closer link to

the statutory words than perhaps the alternative

approach adopts. I think those are the matters we

seek to put.

WILSON J: Mr Basten, before you sit down, let me detain

you for a moment longer. I still have not grasped

what I understood you to say earlier was more

or less conceded in the court below, that abstractt½e

discriminatory acting for delay in hiring, that there nevertheless was an act of discrimination

built into the decision to retrench.	Did you
say that?

MR BASTEN:  I think I may have said that; I am not sure

if I said that was conceded below.

WILSON J:  Because I just do not understand - I can

understand the argument that because a woman

is not engaged when she first applied and that

was by reasons of discrimination and so on that

therefore she becomes more vulnerable to retrenchment

on a first on first off basis because ordinarily

without discrimination she would have been employed

earlier but taking that element out, assuming

she was employed as soon as she applied, how

do you say the decision to retrench on a first

on first off basis is discriminatory?

MR BASTEN: We do not, on the facts of this case,

Your Honour.

WILSON J:  You do not. I see. I was trying to grasp the

discriminatory character of the first on first

off - - -

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DAWSON J: It could be, could it not?

MR BASTEN: It could be but not on the facts of this case.

DAWSON J:  I mean, you could claim that the failure to

hire, whilst you were still hired, was an act

~-_-of discrimination and be compensated.

MR BASTEN:	I thought His Honour was - - -
WILSON J:	I was taking that out of the situation.

That is compensated for, if it existed.

DAWSON J:  True enough but then, even in that situation,

when subsequently retrenchment takes place, that

is something again.

MR BASTEN: It would still have that element if the delay

in hiring, although compensated for, was still

active.

DAWSON J:  Yes. I do not know where

you come down to ground, but I see the problem.

WILSON J:  Yes, thank you, Mr Basten. Mr Rely.

MR RELY:	Could I simply direct the Court to page 173,
lines 25 to 35, and 174, lines 1 to 5.

WILSON J: that is turning on the general importance of

the question?

MR RELY:  Yes, Your Honour.

WILSON J: ls that all you wish to say in reply?

MR RELY:	That is all we wish to say in reply.
WILSON J:	The Court will give its decision on this

application at 2.15.

AT 11.43 AM THE MATTER WAS ADJOURNED

T7	UNTIL LATER '.THE SAME DAY
UPON RESUMING AT 2.17 PM:
WILSON J:  The Court is of the opinion that leave should

be granted in this matter.but could I ask you

what isyour·attitude to conditioning the leave
on the applicant paying the costs of the

respondent of the appeal and the application

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for special leave? I suppose we could leave

it until the trial but it does seem to be a matter

that we, perhaps, should ventilate now. I take

it Mr Basten would not depose such a condition.

MR ROBB:  I have to confess I have not thought in advance -· --that I might have to deal with that. Perhaps,

that is a failing on my part. Could I just

obtain some instructions. I am not sure whether

the two people present are in a position to actually

give me a formal instruction to reply to that.

WILSON J:	Very well.
MR ROBB:	I am not in a position to consent to that on
the face of it. Obviously the position I adopted
might depend upon what choice was put to the
applicant.

TOOHEY J: It could be Robson's choice.

WILSON J:  We should relieve you from the responsibility

of going on and say that the grant of leave

will be subject to the condition that the

appellant pay the costs of the appbication for

special leave and the appeal, in any event.

MR ROBB: Yes, Your Honour. That.being the case, it then

leaves it to my client to decide.·where it stands

in the light of tha~ so I respectfully accept

what Your Honour said. May it please Your Honour.

WILSON J: Thank you.

AT 2.20 PM THE MATTER WAS ADJOURNED SINE DIE

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