Employment Services Australia Pty Ltd v Poniatowska & Anor [2011] HCATrans 21

[2011] HCATrans 21

[2011] HCATrans 021

IN THE HIGH COURT OF AUSTRALIA

Office of the Registry
  Adelaide  No A21 of 2010

B e t w e e n -

EMPLOYMENT SERVICES AUSTRALIA PTY LTD

Applicant

and

MALGORZATA PONIATOWSKA

First Respondent

REMO LOTITO

Second Respondent

Application for special leave to appeal

GUMMOW J
CRENNAN J
KIEFEL J

TRANSCRIPT OF PROCEEDINGS

FROM CANBERRA BY VIDEO LINK TO ADELAIDE

ON FRIDAY, 11 FEBRUARY 2011, AT 11.07 AM

Copyright in the High Court of Australia

MR R.J. WHITINGTON, QC:   May it please the Court, I appear with my learned friend, MR A.B. GOTTING, for the applicant.  (instructed by EMA Legal)

MR P.A. HEYWOOD-SMITH, QC:   May it please the Court, I appear for the first respondent.  (instructed by Duncan Basheer Hannon Barristers & Solicitors)

GUMMOW J:   There is no appearance for the second respondent?

MR WHITINGTON:   No appearance for the second respondent, your Honour.

GUMMOW J:   Yes, Mr Whitington.

MR WHITINGTON:   If the Court pleases, first of all there is an issue of an application for an extension of time for filing the application.  It was a day late and ‑ ‑ ‑

GUMMOW J:   This is the summons filed 21 December?

MR WHITINGTON:   The application is actually ‑ ‑ ‑

GUMMOW J:   Or is it another summons.

MR WHITINGTON:   No, that is my learned friend’s, your Honour.

GUMMOW J:   Yes, that is right.

MR WHITINGTON:   In our case, your Honour, we follow the procedure ordained by, I think it is, rule 41, and made an application in an amended application for special leave.  The Court has that in the application book at page 21, particularly at page 214, paragraph 3.4.

GUMMOW J:   Is that opposed?

MR HEYWOOD-SMITH:   If the Court pleases, I am not instructed to consent to the application.  I am not instructed to speak against it. 

GUMMOW J:   Yes, you have that leave.

MR WHITINGTON:   May it please the Court.  If the Court pleases, the respondent set out in this case to prove that the applicant dismissed her on the ground of her sex and that a male employee would not have been dismissed in the same circumstances.  She carried the onus of proof throughout, as was particularly recognised in the Full Court by Justice Dowsett in his dissent.  The applicant, through its managing director, gave the respondent three warning letters for unsatisfactory performance at work and then terminated her employment as a result of another incident involving a complaint from clients.

The trial judge found that Mr Hickinbotham’s expressed motives for the letters and the termination were not his real motives and we do not cavil with that.  The trial judge was entitled to find that.  This forms an essential part or plank in the Full Court’s reasoning, so that is why I am addressing it at the outset.  What we say is that a finding of a negative does not prove a positive.  In other words, in terms of the old authorities, if I seek to prove that a man was in Paris and he says he was in London and I prove he was not in London, I have not thereby proved he was in Paris. 

Notwithstanding, we say, that natural process of logic, the trial judge found that Mr Hickinbotham’s real motive was that the respondent was seen by him to be a complainant about the conduct of Messrs Flynn, Lotito and Ms Sharrad, a problem presented to be managed, someone who did not fit the robust work environment, that she will not tolerate sexual harassment and a potential impediment to the smooth functioning of the applicant’s business.  The Full Court correctly recognised that Mr Hickinbotham was the controlling mind of the applicant for these purposes and none of those matters were ever put to him or tested with him at trial.  The only adverse suggestion to him – and this appears in the Full Court’s reasons at paragraph 92 – is that the first warning letter was a beat up. 

The respondent claims to disagree with the proposition that it was not open to the trial judge to make those positive findings and the respondent, in their submissions at paragraph 8, advances the Full Court’s reasons at paragraph 95 as an answer, but they are the reasons of the majority of the joint judgment and there the majority do not gainsay the fact that the matters were not put to Mr Hickinbotham.  Instead, they suggest that as a matter of principle it was not necessary to put them to him.

CRENNAN J:   I think part of that finding was underpinned, was it not, by the view that Mr Hickinbotham would be speculating?

MR WHITINGTON:   That is a separate issue, your Honour.  That is the issue right at the end of the case.  There are really two issues here, that is, what was Mr Hickinbotham’s motive for the dismissal and right at the end of the case, how would he have dealt with a male employee in the same position as the respondent, that is, somebody who was perceived to be a complainer in this way.  Now, as to that latter matter, and I am coming to that, critically there was a complete absence of evidence and Mr Hickinbotham was never tested as to how he would have treated a male employee.  Again I will come to this, but the Full Court said that it was apparent from ‑ ‑ ‑

KIEFEL J:   Are you saying there is some procedural fairness issue here or are you just attacking it as a lack of evidence point?

MR WHITINGTON:   The two are interconnected.  There is the lack of evidence and there is the procedural fairness.  First of all, we say you cannot make a positive inference in these circumstances from a negative, at least without testing it.  So there is a matter of legal logic and inference interrelated as a question of forensic fairness.

KIEFEL J:   But it is well known, is it not, that to satisfy the definition in section 5 that you have to set up a hypothetical.  In most cases you are not going to have evidence.  You have to set up a hypothetical comparison between how a male would have been treated in the same circumstances by reference to the characteristics you attribute to the female complainant.  It might not have been done at first instance, but it was done in the Full Court by Justices Stone and Bennett.  Now, given that it is a hypothetical, two things would seem to follow.  One, there is not likely to be, realistically, any evidence which will assist and, secondly, both parties, or at least their legal advisors, should know that that is the basis upon which it would need to be tested.  So if he wanted to give evidence, useful or otherwise as it may have been, it would have been known to both parties that that was the way in which the matter had to be approached.

MR WHITINGTON:   That is the issue of forensic fairness and a gap in proof in a particular respect.  Perhaps I will come directly to the heart of the special leave application now.  The problem we say is with the majority’s reasoning to a finding of a reason or ground for the dismissal in the sex of the respondent because the majority used what we say was a “but for” approach, not a “but why” approach.  They did not, we say, in any relevant way inquire into the mental processes of Mr Hickinbotham, therefore, we say, they did not in any sense inquire into the reasoning process or the reasons, but we say that is the inquiry required by section 5 and section 14 of the Sex Discrimination Act and we say that is why, in a very fundamental sense, the reasoning of the majority miscarried and that is why this matter should attract special leave.

Can I attempt to step out the reasoning of the majority.  The reasoning proceeded this way.  The starting point was the proposition that the trial judge concluded that the work environment was one in which women would be targeted.  Now, that was a clear error.  The trial judge concluded no such thing, so the very foundation for the reasoning of the majority is flawed.  If the Court would turn briefly to page 97 in the application book and go to paragraph 303, the Court will see why the fundamental factual proposition at the outset of this chain of reasoning cannot stand.  Now, the next step in the reasoning process of the majority – and this is at paragraph 112 of the joint judgment – is that women would, therefore, be more likely to complain than men in the applicant’s employment, but that is simply consequential on the first proposition.

GUMMOW J:   What do you say about Mr Heywood‑Smith’s submissions starting at page 191, paragraph 5 which says, politely, you have skewed your recitation of what happened at trial?  Then he develops that for the next two pages and then finishes up with point 11 at page 193:

that none of the primary findings of fact appertaining to the termination process were challenged on appeal from the trial judge to the Full Court.  The applicant only seeks to challenge the inference drawn ‑ ‑ ‑

MR WHITINGTON:   That is the first part of the argument, but that is the first part of the argument relating to the process of drawing inferences and drawing positive inferences from a negative and that leads to the proposition ‑ ‑ ‑

GUMMOW J:   It should say to everyone in Court that what we said in Hancock, which is noted at footnote 3 is meant to be observed.  Anyhow, go on, Mr Whitington.

MR WHITINGTON:   The point about that, your Honour, is that we simply say there was no positive basis in the evidence to find a positive motivation for Mr Hickinbotham of the kind found.  But even if we are wrong about that, we put that to one side, when we come to the ultimate consideration of the critical issue by the majority, we come to paragraph 112 in their reasons.  As I say, they start with the proposition that the trial judge “concluded that it was an environment in which women would be targeted”, and that was wrong.  They then said that it followed that women would therefore be “more likely to complain than would men.”  That is merely consequential on the first erroneous proposition. 

They then said it followed that a male employee would not have been sexually harassed in the first place, but that does not follow at all.  It is perfectly open to consider that a male employee might have been harassed.  Following from that they conclude that a male “would not then have become a complainant” and then they say that the respondent “became a complainant because of her sex.”  They then say it followed that the respondent became a perceived problem as a complainant because of her sex.  They then said that she was dismissed because she was a complainant, therefore she was dismissed because of her sex. 

Now, our complaint with that line of reasoning is that it involves an attenuated kind of “but for” analysis that locates the origin of a chain of events in the sex of somebody dismissed, but it plays no regard to the role of the sex of the employee dismissed in the thinking or the mental processes of the decision‑maker.  We say that is the fundamental question that arises in this case; what is required by section 14 and section 5 of the Sex Discrimination Act?  Is this kind of attenuated “but for” reasoning which locates the origin of a chain of events in the sex of the employee sufficient to qualify under section 14 as a ground of the dismissal or under section 5 as the reason for the discriminatory conduct? 

The consequence of the majority’s reasoning is a most curious one.  It means that the decision‑maker whose reasons are to be tested might simply know of a complaint.  They might not know the complaint related to sexual harassment, they might not have been told that, or the complainant might complain about somebody but not identify that the real source of their complaint was sexual harassment.  Nonetheless, the employee might be seen on the majority’s reasoning to be a complainant if the employer then terminates them because they are a complainer.  On the majority’s reasoning the reason for the termination rests in the sex of the employee, although that circumstance was completely unknown to the decision‑maker, they were completely blind to it, and it will follow that the employer will be found to have dismissed the employee by reason of the sex of the employee in circumstances where it did not actuate their mental processes at all. 

So the question, we say, that arises in this case is, what is meant by “on the ground of” or “by reason of” in section 5 and section 14, the Sex Discrimination Act.  These are expressions which are used across the field of federal legislation in relation to sex, race and age discrimination and so it is a common problem.  It is a problem of particular significance to the Australian workforce, both employers and employees, and it is a problem that occurs in the context of authorities which are not entirely clear and, therefore, authorities which require some ultimate reconsideration by this Court. 

Now, there was another kind of incidental reference in the reasoning of the majority in that line of reasoning at paragraph 112 in which they also said that the trial judge found that Mr Hickinbotham would not have taken the same approach to a male who was sexually harassed and had complained.  There is just one line on that.  But earlier in the majority’s reasons they had, in effect, criticised that conclusion of his Honour as not being the complete answer.  They criticised it implicitly as a matter of logic because it was founded on the proposition that if male perpetrators were sympathetically treated, male complainants would not have been terminated. 

Now, as Justice Dowsett recognised, that is comparing apples with oranges.  To treat a perpetrator is one thing.  To treat a complainant is quite a different thing and you simply can draw no conclusions about the way in which male complainants in this workforce would have been treated from the way in which male perpetrators would have been treated.

KIEFEL J:   His Honour did not, however, have regard to the question of the hypothetical comparator, which is the way in which the majority dealt with it. 

MR WHITINGTON:   His Honour did, with respect, I think, your Honour, and his Honour did recognise it was a hypothetical question.  He deals with that in his reasons at about 314 on page 99.

KIEFEL J:   Justice Dowsett I was referring to.

MR WHITINGTON:   I am sorry, your Honour, yes.  We accept that in many cases it will be a hypothetical question, but that does not, we say, excuse the need for any evidence at all on the topic. 

KIEFEL J:   You must necessarily draw from the surrounding circumstances and the facts, as they were shown, about the male perpetrators and the characteristics you attribute to the female complainant.  You must draw from that to be able to draw an inference about how a male in a similar situation would have been treated.  The conclusion reached by the majority was that they would have been dealt with in a different way and that one can draw something from how the perpetrators were treated by the employer in that regard.

MR WHITINGTON:   With respect, your Honour, the majority do not conclude that at paragraph 114.  They simply say in a sentence:

His Honour found that Mr Hickinbotham, and therefore ESA, would not have taken the same approach to a male who was sexually harassed and had complained.

That is all they say about it in this line of reasoning.  If you then go back to paragraph 112 at page 162, the third sentence, they say:

His Honour considered that, if male perpetrators were sympathetically treated, male complainants would not have been terminated.  That is not, however, the complete answer to the question.

In other words, they were recognising, we say, that as a matter of logic you might treat a perpetrator one way, but that does not inevitably necessarily or even reasonably say anything about how you would treat ‑ ‑ ‑

KIEFEL J:   No, I do not think that is what the majority are saying there.  They go on to say that what is necessary to be undertaken is the attribution of characteristics to the female complainant and then to undertake the comparator test.  In paragraph 114 they are saying that having undertaken that test, you reach the conclusion that the trial judge did.  That is implicitly what they are saying.

MR WHITINGTON:   Yes, your Honour, but they then reach it by an entirely different route.  It is the route of logic that I was endeavouring to explain before, that is, the respondent is of the female sex, because of that she was sexually harassed, because of that she complained.  This was a – if I can just finish this proposition – this was a workforce which was hostile to women, it is wrong, therefore a male would not have been harassed, therefore a male would not have complained, therefore she was treated as a complainant because of her sex, therefore she was dismissed because of her sex.  That is the line of logic in paragraph 112 through to 114. 

If that is right, then in many discrimination cases under section 14 the decision‑maker need never have in mind the sex of the complainant, but they will still be held to account.  That is the consequence of that line of reasoning.  That is the consequence of this judgment and we say that is why it justifies the attention of this Court.  If the Court pleases.

GUMMOW J:   As indicated in the course of receiving counsel’s oral submissions, this application proceeds upon a misunderstanding in respect of the proof of discrimination within the meaning of the relevant legislation.  The application otherwise seeks to challenge what are findings of fact by Justice Mansfield.  Accordingly, special leave to appeal must be refused with costs. 

Mr Heywood-Smith, your summons is not needed now, is it?

MR HEYWOOD-SMITH:   That is the case, if the Court pleases.

GUMMOW J:   Yes, thank you.  The costs include costs of the summons.

AT 11.30 AM THE MATTER WAS CONCLUDED