Commonwealth of Australia and Anor v Prior; Commonwealth of Australia v Nojin and Anor

[2013] HCATrans 101

[2013] HCATrans 101

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Melbourne       No M12 of 2013

B e t w e e n -

COMMONWEALTH OF AUSTRALIA

First Applicant

STAWELL INTERTWINE SERVICES INC

Second Applicant

and

GORDON PRIOR

Respondent

Office of the Registry
  Melbourne   No M13 of 2013

B e t w e e n -

COMMONWEALTH OF AUSTRALIA

Applicant

and

ELIZABETH NOJIN ON BEHALF OF MICHAEL NOJIN

First Respondent

COFFS HARBOUR CHALLENGE INC

Second Respondent

Applications for special leave to appeal

CRENNAN J
KIEFEL J
KEANE J

TRANSCRIPT OF PROCEEDINGS

AT MELBOURNE ON FRIDAY, 10 MAY 2013, AT 10.33 AM

Copyright in the High Court of Australia

____________________

MR J.L. BOURKE, SC:   If the Court pleases, I appear with my learned friend, MR M.L. FELMAN, in both matters for the applicants.  (instructed by Australian Government Solicitor)

MR H. BORENSTEIN, SC:   If the Court pleases, I appear with my learned friends, DR K.P. HANSCOMBE, SC and MS K.A. BOWSHELL, for the respondents Nojin and Prior.  (instructed by Holding Redlich)

CRENNAN J:   Yes, Mr Bourke.

MR BOURKE:   If the Court pleases.  We say the primary special leave question is this, whether in considering the reasonableness of a condition in an indirect discrimination case, is it necessary for the court to consider the reasons why and the temporal context in which the alleged discriminator imposed the condition?  In section 6 there are three relevant limbs to be met to make out indirect discrimination case. 

Section 6 is found in the primary judgment at application book 5, paragraph 10.  It says:

For the purposes of this Act, a person (discriminator) discriminates against another person (aggrieved person) on the ground of a disability of the aggrieved person if the discriminator requires the aggrieved person to comply with a requirement or condition –

I go to (b):

which is not reasonable having regard to the circumstances of the case.

We say the circumstances of the case must include the position the alleged discriminator was in at the time the requirement was imposed, and the circumstances of the case in a case such as this would involve an examination of the reasons given by the person alleged to have discriminated and the temporal context.  In this case, the relevant discriminator in what was the primary liability case was the two Australian Disability Enterprises.  The case against the Commonwealth was an accessorial liability case.  So in our submission, to make our primary liability against these ADEs, in our submission, the court was required to have a look at the reasons that were proffered by each ADE which were in evidence ‑ ‑ ‑

CRENNAN J:   Mr Bourke, at application book 227, paragraph 26, it is said by the respondent that this argument was not part of the case filed or on appeal.  That is to say that the reasons for decision of those two employers to whom you have just referred were not put as circumstances which have to be taken into account under subsection 6(b).

MR BOURKE:   Your Honour, that is entirely without foundation.  We have provided a materials folder as well as our legislation and cases, extracts of the evidence before the trial judge, our full written submissions before the trial judge and extracts of the transcript before the appeal court.  It is replete that the issue of reasons given was put forward and if there is any argument about that the opposite side of the Bar table, we could take you to the exact passages in our reply if that is an appropriate course to adopt.  Could I also add the extensive submissions on the relevance of reasons and the temporal context before the trial judge, that document also went before the Full Court as well.

CRENNAN J:   Does the trial judge deal with this issue?

MR BOURKE:   The trial judge, your Honour, says that the reasons of the alleged discriminator may be relevant in the circumstances, but does not go on to then examine those reasons because his Honour takes the view that, given the history and the debate over BSWAT, you simply cannot say that someone deciding to use BSWAT was acting unreasonably.

KIEFEL J:   Are you talking about subjective reasonableness or objective reasonableness?

MR BOURKE:   The overall test is objective and we say a court needs to examine when applying the test of reasonableness in the circumstances of the case, assess the reasons given by the relevant ADEs, the alleged discriminators, have regard to their temporal context, and that is part of the circumstances of the case to assess objectively.

KIEFEL J:   What is the reason, objectively, that arises from the ADEs evidence that is not covered in the quite substantial reasoning in the Full Court from special leave book 140 onwards?

MR BOURKE:   Challenges evidence one of the ADEs was a number of factors.  They said, “We had the relevant union that covered these workers say to us, ‘You should use BSWAT’, so we agreed to that”.  Two, they said that in relation at the time of the reassessment only one and a half months before they were aware that the Australian Industrial Relations Commission had approved the use of BSWAT.

KIEFEL J:   But that is only to say, as was found in the Full Court at paragraph 134:

despite the widespread support for its use, assessment of the wages of Mr Nojin and Mr Prior using BSWAT was not reasonable.

His Honour then gives objective reasons for it.  What you are referring to is not an objective reason.  It simply is:  there was a basis upon which the ADEs could have relied.

MR BOURKE:   In our submission, to the extent the majority took into account the history of the development and approval of BSWAT by various consultants and the Australian Industrial Relations Commission, they did not apply that background in relation to assessing the reasonableness in terms of the position the ADEs found themselves in.  They did not do that.  There was no temporal analysis as to ‑ ‑ ‑

KIEFEL J:   But it is not the reasonableness of action of the discriminator in their reliance that is in issue.  It is whether the discrimination itself is reasonable.

MR BOURKE:   We are not suggesting that the reasonableness of the discriminator is the overall test.  We are saying it is an important part of assessing the reasonableness in the circumstances of the case, and the majority did not at time examine any of the particular historical matters and have regard to that temporal context when each ADE, one in 2005, another in 2007/2008, decided to apply BSWAT.  In our submission, there was an air of unreality in the outcome where you had two ADEs in their particular circumstances, their temporal circumstances, using BSWAT, knowing that it had been approved by the Commonwealth after trials and consultation, had been approved by the Tribunal that deals with wage setting – the Australian Industrial Relations Commission – and had also been approved by the Australian Fair Pay Commission.

What we have is essentially the majority focusing on the alleged design defects of one half of BSWAT, that is the competency component of BSWAT, and failing to have regard to other parts of the circumstances of the case, which we say include have a look at the position of these ADEs, what they found themselves in, and it was highly reasonable for them to use BSWAT in those temporal circumstances.  It is not a complete answer to the case, but we say it was a relevant consideration and if given proper weight should have carried the day on the question of reasonableness.

CRENNAN J:   How would that have overcome what I think are referred to in argument as the structural flaws in BSWAT which was subject to unchallenged expert evidence?  This is at application book 138 in paragraph 126, Justice Buchanan’s judgment:

that persons with intellectual difficulties would be disadvantaged by the use of BSWAT –

They were structural difficulties about which the experts agreed.

MR BOURKE:   With respect, your Honour, our experts supported BSWAT.  There was divided evidence on BSWAT.  What there was a concession on is that our expert said that if a person without a disability that was a Grade 1 worker had undertaken the BSWAT tests, they would not have got 100 per cent.  That missed the point because the BSWAT tool is not designed to be used with people without disabilities.  It is designed to be used by people with disabilities working in a supported employment environment.

KIEFEL J:   Yes, but there are different kinds of disability.  The problem is it applies differentially as between people with intellectual disabilities and those with physical disabilities.

MR BOURKE:   And, your Honour, that was our very point.  There was not, in our submission, a proper analysis when one got to the design side of the case.  The very purpose for the design of the tool was for its universal application across ADEs.  So rather than having a situation where you had various ADEs all frequently using different tools, and you had people within those ADEs with different types of disabilities and different degrees of disabilities, that tool was designed with a hybrid nature, productivity and competency, because the evidence in terms of the reports and the consultants was if a person, for example, may have a physical disability but not an intellectual disability, they may do better on the competency side but, because of their physical disability, poorer on the productivity side, and the result may be the converse if the primary disability is intellectual.  But the benefit of the hybrid nature was it could be used across the board without having to consider the particular disability of the person.

KIEFEL J:   But these do not balance out.  There is no suggestion that the competencies and productivity assessments somehow balance out between the two groups, and it does not take account, does it, of persons with physical disabilities being able to actually increase their productivity to gain higher marks.

MR BOURKE:   Well, if they increase their productivity would they get the benefit in terms of the assessment.

CRENNAN J:   What about though they have a superior ability to deal with the abstract questions involved in the competency assessment?  That was really at the heart of the case, was it not, in terms of the differential effects of the test?

MR BOURKE:   In our submission, what we are trying to examine, what the tool is trying to examine, is work value and that if someone has the ability to understand abstract questions in relation to matters such as – the questions were safety, communication – that is a recognition of their value in the workplace and, in our submission, is consistent with the design of the tool.

CRENNAN J:   But the problem was, was it not, that the difficulties with the competency side of the test for those who are intellectually disabled was that the scoring arrangements meant that they could not really improve their productivity.  That was what Justice Kiefel was putting to you, that there was not a balancing exercise undertaken.  That was the discriminatory effect, was it not?

MR BOURKE:   And in our submission the fundamental complaint about that was the inability to answer the questions.  There was no proper alternative put up.  The other option only put up was observation.  There are difficult issues in assessing competency by observation including time‑consuming, cumbersome – and the level of subjective assessment.  In our submission, you start with a proposition that you should, when coming to a work value tool, be entitled to examine not only someone’s productivity but competency, and once you move from that you are left with a debate about how you do that.

CRENNAN J:   Well, that may all be right, but it does not address, Mr Bourke, I do not think, the structural problem with this particular way of examining competency.  That was the point of the expert evidence; that the structural aspects of the test resulted in a differential effect disfavouring the intellectually disabled.

MR BOURKE:   The evidence was that a person with intellectual disability would find it more difficult to answer the abstract questions.  Then the question comes, do you cease to attempt to measure competency or do you have to go to some other alternative?  In our submission, there was not any real evidence that another alternative was more viable, so you are left with a question, okay, you have an ‑ ‑ ‑

CRENNAN J:   Was there not an SWS test?

MR BOURKE:   There was an SWS and that only covered productivity, so you really left – the effect of this judgment where frequently people within ADEs may have some intellectual disability and may have some physical disability.  You are left with the situation everyone is going to have to default to a productivity‑only tool which, in our submission, will render an injustice to those persons that may do better on the competency side of the test.

CRENNAN J:   Justice Flick, who found in your favour, the dissenting judge, said that there was no question of principle involved in the case, they were not contested, this was all just a question of fact.

MR BOURKE:   In our submission, what Justice Flick said was that the particular design faults that Justice Buchanan had identified were effectively the consequence of its universal application, that you have developed a tool that will have universal application; you do not have to handpick the tool to use depending on the disability.  In our submission, what has emerged from this decision of the majority is a disconnect with the circumstances of the case where it has been found that these ADEs have engaged in indirect discrimination as a result of, in a sense, the majority preferring one set of experts to another as to the design issues, but when one looked at the temporal setting, in our submission, it was an entirely reasonable decision.

As we have said that is not the test, but we say that should have been brought into account, and was not.  Justice Flick also took into account the circumstances in terms of the history but, in our submission, it is the critical temporal aspect which has not been properly had regard to and having regard to the position the ADEs were in.

CRENNAN J:   When you say the temporal aspect, you are really referring back again to the employer’s reasons in 2005 and 2007?

MR BOURKE:   Correct, and could we take the Court to just one passage from Waters which is at tab 2 of the folder?  We say Waters is consistent with our position; indirect discrimination case involving the introduction of not using conductors by the Victorian Public Transport Corporation.  This Court found that the Equal Opportunity Board had erred because it did not take into account the financial considerations that the Corporation may have taken into account when deciding to move to a no‑conductor system of public transport.  In our submission, that is a reflection of the fact that you had to also assess, when looking at reasonableness, the position of the alleged discriminator and Justice Brennan as he then was discusses this issue at 379 at point 4 of the page, slightly to the right‑hand side:

The only way in which a balance can fairly be struck between a putative discriminator’s legal freedom to impose a requirement or condition in the several activities or transactions to which the Act relates and the interests of persons in a protected category is to consider all the circumstances of the case.  Contrary to the view adopted by the Board, it may be necessary to consider the position of the putative discriminator.

But in our submission, what has occurred is the majority to some degree may have considered the history but in terms of in a sense assessing the overall competing debate as to the merits of the design, but they have not undertaken the task of considering the position each ADE was in when each of them decided to use BSWAT in their particular circumstances.

KIEFEL J:   But you are not in a position to say, are you, that the ADEs had no other option, that there was no other choice available?

MR BOURKE:   Well, no, there was SWS which – it was virtually counterculture within the supported employment environment to use SWS.  The evidence before the trial judge was that SWS within the ADE sector was about 10 per cent of use.  The vast bulk was hybrid tools, a recognition that within ADEs they thought the appropriate thing to do was measure competency and productivity, or there were tools that solely used competency, solely tested for competency, and the most popular tool was BSWAT.  Really, when you examine the position of each of these ADEs, it

could seriously be contended that they would appreciate these particular design faults which have been recognised by the majority.

Essentially the same criticisms were put before the Australian Industrial Relations Commission, and rejected because the tool went into the award, and to decide to either use SWS, which would mean they would have to use only productivity tool for all their people, or were they meant to pick and choose a tool?  In our submission, the outcome, with respect we say, is divorced from the true realities of the case, the true circumstances of the case. 

We also say this decision has important ramifications for the supported employment sector.  Over 50 per cent of employees in ADEs – that is some 9,600 people – are currently being paid a wage based on BSWAT.  Secondly, of the 30 wage tools being used in the sector, 27 involve either a hybrid or a competency element and, in our submission, the true effect of, in particular, Justice Buchanan’s judgment where you measure output with like output ‑ ‑ ‑

CRENNAN J:   I notice the time, Mr Bourke.

MR BOURKE:   Yes.  In our submission, the ramifications make it appropriate for the grant of leave.

CRENNAN J:   Thank you.  These applications for special leave concern the use of the Business Services Wage Assessment Tool, the BSWAT, to determine the wage rates of Mr Nojin and Mr Prior.  Proceedings were brought on their behalf in the Federal Court of Australia under the Disability Discrimination Act 1992 (Cth), claiming that by using the BSWAT to measure their work contribution in order to calculate their wages, the relevant Australian Disability Enterprise which employed them discriminated against them. The Full Court of the Federal Court, by a majority, concluded that the use of the BSWAT disadvantaged intellectually disabled persons. Although it was widely used, it was not reasonable. One component of the BSWAT involves the assessment of a person’s competencies in the workplace. The unchallenged expert evidence was that the BSWAT produced a differential effect for intellectually disabled persons and reduced their score. We see no reason to doubt the conclusions of the Full Court.

Special leave is refused with costs.

AT 10.56 AM THE MATTER WAS CONCLUDED