Secretary, Department of Defence v Human Rights and Equal Opportunity Commission

[1997] FCA 960

FEDERAL COURT OF AUSTRALIA

ADMINISTRATIVE LAW - Administrative Decisions (Judicial Review) Act 1977 (Cth) - application for review of decision of Human Rights and Equal Opportunity Commission.

DISCRIMINATION LAW - Human Rights and Equal Opportunity Commission Act 1986 (Cth) - whether the Commission erred in law by misinterpreting Public Service Act 1922 (Cth).

DISCRIMINATION LAW - Public Service Act 1922 (Cth) - compulsory retirement provisions - refusal to exercise discretion to exempt complainants from compulsory retirement - whether such refusal is an “act” or “practice” - alleged discrimination on the basis of age.

Public Service Act 1922 (Cth), ss 6, 76V
Administrative Decisions (Judicial Review) Act 1977 (Cth)
Human Rights and Equal Opportunity Commission Act 1986 (Cth), ss 3(1), 31(a) and (b), 32(1)
Human Rights and Equal Opportunity Commission Regulations, reg 4

Australian Liquor, Hospitality and Miscellaneous Workers Union v Commonwealth of Australia (1994) 55 IR 18, cited
Julius v Lord Bishop of Oxford (1880) 5 App Cas 214, cited
Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106, cited
Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24, cited

SECRETARY, DEPARTMENT OF DEFENCE v
HUMAN RIGHTS AND EQUAL OPPORTUNITY COMMISSION & ORS
NG 623 of 1996

BRANSON J
SYDNEY
18 SEPTEMBER 1997

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 623  of   1996

BETWEEN:

SECRETARY, DEPARTMENT OF DEFENCE
APPLICANT

AND:

HUMAN RIGHTS AND EQUAL OPPORTUNITY COMMISSION
FIRST RESPONDENT

HAROLD BURGESS
SECOND RESPONDENT

MERVYN COLLINS
THIRD RESPONDENT

LAWRENCE LIPPING
FOURTH RESPONDENT

JUDGE:

BRANSON J

DATE OF ORDER:

18 SEPTEMBER 1997

WHERE MADE:

SYDNEY

THE COURT ORDERS THAT:

The applicants bring in on a date to be fixed short minutes of order appropriate to be made pursuant to the reasons of the Court.

Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
NEW SOUTH WALES DISTRICT REGISTRY	NG 623 of 1996

BETWEEN:

SECRETARY, DEPARTMENT OF DEFENCE
APPLICANT

AND:

HUMAN RIGHTS AND EQUAL OPPORTUNITY COMMISSION
FIRST RESPONDENT

HAROLD BURGESS
SECOND RESPONDENT

MERVYN COLLINS
THIRD RESPONDENT

LAWRENCE LIPPING
FOURTH RESPONDENT

JUDGE:	BRANSON J
DATE:	18 SEPTEMBER 1997
PLACE:	SYDNEY

REASONS FOR JUDGMENT

This is an application made pursuant to s 5 of the Administrative Decisions (Judicial Review) Act 1977 (Cth) (“the ADJR Act”) for review of a decision of the Human Rights and Equal Opportunity Commission (“HREOC”) whereby it found that the compulsory retirement of the second, third and fourth respondents (“the complainants”) upon their respectively reaching sixty five years of age constituted discrimination in employment based on age, and made certain recommendations for compensation of the complainants.

The grounds of the application are as follows:

“(a)the First Respondent erred in law by dealing with the complaints of the Second, Third and Fourth Respondents on the basis that these complaints should be considered under the provisions of s.31(b) rather than s.31(a) Human Rights and Equal Opportunity Commission Act 1986;

(b)the First Respondent erred in law by misinterpreting s.76V(2) Public Service Act 1922;

(c)the First Respondent erred in law by determining that a decision of the Secretary not to exercise a discretion under s.76V(2) Public Service Act 1922 involves an act or practice for the purposes of s.31(b) Human Rights and Equal Opportunity Commission Act 1986;

(d)the First Respondent erred in law by failing to deduct from amounts of compensation which he recommended be paid to the Second, Third and Fourth Respondents, amounts paid by way of superannuation benefits to the Second, Third and Fourth Respondents.”

In argument, pars (b), (c) and (d) of the grounds of application were pressed but not par (a). 

Prior to the hearing the first respondent by written notice submitted to the jurisdiction of the Court except as to costs.  The complainants were represented at the hearing by counsel and opposed the application.

FACTUAL BACKGROUND
This statement of facts is largely taken from the notice in writing setting out the findings of HREOC and the reasons for those findings (“the Notice”) required by s 35(2) of the Human Rights and Equal Opportunity Commission Act 1986 (Cth) (“the HREOC Act”) to be served on the person the subject of its inquiry.                

Each of the complainants is a former officer of the Australian Public Service who, whilst such an officer, worked within the Department of Defence.

The employment of members of the Australian Public Service is governed by the Public Service Act 1922 (Cth) (“the Public Service Act”). Section 76V of the Public Service Act, the full terms of which are set out below, provides, in effect, that in the ordinary course an officer of the Australian Public Service shall be compulsorily retired from such service by force of subs 76V(1) upon attaining the age of sixty five years. However, the Secretary of the Department in which an officer is employed may, if he or she “is of the opinion that it is desirable, in the interests of the Commonwealth”, determine that s 76V(1) does not apply to a particular officer.

The second respondent celebrated his sixty fifth birthday on 31 August 1995. Although he had earlier requested that he be allowed to continue working beyond that date, he was compulsorily retired by force of s 76V(1) on 30 August 1995.

The third respondent celebrated his sixty fifth birthday on 22 February 1991. Before that date he had sought a determination that s 76V(1) would not apply to him. The third respondent obtained such a determination effective for a period of ten months. His request for a determination effective beyond that period was refused. He was compulsorily retired on 31 December 1991.

The fourth respondent similarly requested that he be allowed to continue working beyond the date of his sixty fifth birthday but was also compulsorily retired by force of s 76V(1) on attaining the age of sixty five years.

Each of the complainants apparently made a complaint in writing to HREOC alleging that his compulsory retirement from the Australian Public Service constituted discrimination in his employment.  The precise terms in which such complaints were made has not been established before me. 

STATUTORY BACKGROUND
The HREOC Act contains in s 3(1) the following definition of “discrimination”:

“(a)any distinction, exclusion or preference made on the basis of race, colour, sex, religion, political opinion, national extraction or social origin that has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation; and

(b)any other distinction, exclusion or preference that:

(i)has the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation; and

(ii)has been declared by the regulations to constitute discrimination for the purposes of this Act,

but does not include any distinction, exclusion or preference:

(c)in respect of a particular job based on the inherent requirements of the job; or

(d)in connection with employment as a member of the staff of an institution that is conducted in accordance with the doctrines, tenets, beliefs or teachings of a particular religion or creed, being a distinction, exclusion or preference made in good faith in order to avoid injury to the religious susceptibilities of adherents of that religion or that creed”.

Regulation 4 of the Human Rights and Equal Opportunity Commission Regulations provides that, for the purposes of s 3(1)(b)(ii) of the HREOC Act, any distinction, exclusion or preference made on the ground of, amongst other things, age, is declared to constitute discrimination for the purposes of that Act.

Section 3(1) of the HREOC Act also contains the following definitions:

“‘act’ means an act done:

(a)by or on behalf of the Commonwealth or an authority of the Commonwealth;

(b)under an enactment;

(c)wholly within a Territory; or

(d)partly within a Territory, to the extent to which the act was done within a Territory;

...

‘practice’ means a practice engaged in:

(a)by or on behalf of the Commonwealth or an authority of the Commonwealth;

(b)under an enactment;

(c)wholly within a Territory; or

(d)partly within a Territory, to the extent to which the practice was or is engaged in within a Territory ...”.

Section 30(1) of the HREOC Act extends the above definitions for the purposes of Division 4 of the Act but such extensions have no relevance in the circumstances of this case. For present purposes it is pars (a) and (b) of the above definitions which are of relevance; the conduct of the applicant with which HREOC was concerned was conduct “by or on behalf of the Commonwealth” and conduct “under an enactment”, namely the Public Service Act, within the meaning of the HREOC Act.

Section 31 of the HREOC Act confers on HREOC a number of functions including the following:

“(a)to examine enactments, and (when requested to do so by the Minister) proposed enactments, for the purpose of ascertaining whether the enactments or proposed enactments, as the case may be, have, or would have, the effect of nullifying or impairing equality of opportunity or treatment in employment or occupation, and to report to the Minister the results of any such examination;

(b)to inquire into any act or practice that may constitute discrimination and:

(i)where the Commission considers it appropriate to do so - to endeavour, by conciliation, to effect a settlement of the matters that gave rise to the inquiry; and

(ii)where the Commission is of the opinion that the act or practice constitutes discrimination, and the Commission has not considered it appropriate to endeavour to effect a settlement of the matters that gave rise to the inquiry or has endeavoured without success to effect such a settlement - to report to the Minister in relation to the inquiry”.

Section 32(1) of the HREOC Act provides, so far as is here relevant, that -

“Subject to sub-sections (2) and (3), the Commission shall perform the functions referred to in paragraph 31(b) when:

(a)      ...

(b)a complaint is made in writing to the Commission alleging that an act or practice constitutes discrimination; or

(c)...”.

Subsections (2) and (3) of s 32 have no relevance in the circumstances of this case.

Section 76V of the Public Service Act provides as follows:

“(1)Subject to subsection (2), an officer shall, by force of this subsection, be retired from the Service upon attaining the maximum retiring age.

(2)Where the relevant Secretary is of the opinion that it is desirable, in the interests of the Commonwealth, that an officer who has not attained the maximum retiring age should continue, after attaining that age, in employment, and the officer is able and willing so to continue, the relevant Secretary may determine, in writing, that subsection (1) does not apply to the officer.

(3)The relevant Secretary may, at the time of making, or at any time after making, a determination under subsection (2) in respect of an officer, determine that the officer shall retire from the Service upon attaining a specified age or upon the expiration of a specified period and, where such a determination is made, the relevant Secretary may, at any time before the officer attains that age or before the expiration of the period so determined, vary the determination.

(4)In this section:

‘maximum retiring age’, in relation to an officer, means:

(a)if the officer is included in a class of officers in respect of whom a maximum retiring age, being an age less than 65 years, is fixed by the regulations - the age so fixed; or

(b)in the case of any other officer - the age of 65 years;

‘officer’ includes:

(a)an officer whose appointment to the Service on probation has not been confirmed; and

(b)a short-term employee, a fixed-term employee or an overseas employee.”

The terms of s 76V(1) of the Public Service Act make it plain that, subject to s 76V(2), an officer will be retired from the Australian Public Service upon reaching the maximum retiring age by force of that subsection, not by reason of any act or practice done by or on behalf of the Commonwealth or under an enactment. I note that Moore J construed s 76V(1) in this way in Australian Liquor, Hospitality and Miscellaneous Workers Union v Commonwealth of Australia (1994) 55 IR 18 at 19. It follows from this construction of s 76V(1) of the Public Service Act that s 31(b) of the HREOC Act cannot be construed as giving to HREOC the function of inquiring into the operation of s 76V of the Public Service Act - notwithstanding that it is a statutory provision unequivocally discriminatory on the basis of age. It may be noted, however, that s 31(a) of the HREOC Act does give to HREOC the function, amongst other functions, of examining enactments for the purpose of ascertaining whether the enactments have the effect of nullifying or impairing equality of opportunity or treatment in employment and reporting to the Minister the results of any such examination. It is not clear whether HREOC did purport to act in part pursuant to s 31(a) of the HREOC Act during the course of its consideration of the complaints of the complainants. However, the decision of which review is here sought is a decision pursuant to an inquiry under s 31(b) of the HREOC Act.

REASONING OF HREOC
The Notice contains the following passage under the subheading “Submissions”:

“As a result of inquires [sic] and investigations into the compulsory age based retirements of the complainants I formed the opinion that these acts constituted discrimination on the basis of age.

Pursuant to sections 33 and 27(a) of the Act, I invited the respondent to make submissions either orally, in writing or both in relation to the practice of compulsory age-based retirement.  The respondent elected to make oral submissions in addition to its written submissions made earlier in the inquiry and after the preliminary finding.

On 3 May 1996 I convened the inquiry in Sydney to take oral and written submissions from the respondent.  As a matter of procedural fairness the complainants were also invited to participate in the process.  Mr Lipping and Mr Burgess elected to appear in person, Mr Collins elected not to attend and the respondent was represented both by solicitors and counsel.”

Later in the Notice the following passage appears:

“The respondent did not give any reason for the termination of the complainants other than the fact of their attaining 65 years of age.  In response to the concerns of the complainants the respondent said during oral submissions that the terminations did not in any way reflect on the complainants’ ability to perform their relevant duties.  Indeed evidence presented to the Commission indicated a high regard for the competence and efficiency of all three complainants and supported the conclusion that there was no reason for the termination of the complainants’ employment except that they had attained 65 years of age.

The respondent’s [sic] submit however that age is not a consideration in the exercise of the discretion in s.76V(2) of the PSA.

The respondent argues that in the exercise of this discretion to determine continued employment the Secretary merely looks at whether it is ‘desirable, in the interests of the Commonwealth’ for an officer to remain and that age is not a factor.  In both oral and written submissions the respondent indicates unequivocally that its interpretation of ‘desirable, in the interests of the Commonwealth’ is that person’s work is of such an essential nature that the Department will have difficulty functioning appropriately without him or her.  It accepts that the operation of s.76V only comes about because of a person’s age but argues that once the section is activated age is no longer a consideration.

Whether or not age was part of the direct considerations in the exercise of the discretion the critical element in these complaints of discrimination is whether different or distinct treatment was afforded on the basis of the age of the complainants.  The adoption of the requirement that employees over the age of 65 need to show that their work is of ‘such an essential nature that the Department will have difficulty functioning appropriately with him or her’ imposes a considerable burden on employees who are over 65 years of age, a burden which does not apply to employees under the age of 65.

I have received no evidence which convinces me that the standard of ‘essentiality’ adopted by the Department of Defence is required to be imposed under the Public Service Act. The PSA does not use the word ‘essential’: it uses the word ‘desirable’. I cannot accept that ‘desirable, in the interests of the Commonwealth’ requires that employees over the age of 65 must show that the Department would ‘have difficulty functioning appropriately without him or her’ to be able to continue at work. To my mind it would be almost impossible for any employee to demonstrate that continued employment is ‘essential’ to departmental functioning and I do not think that this could be the intention of the PSA.

The Commonwealth, through the Public Service Board and its successors over 20 years, has expressed a strong commitment to anti-discrimination measures.  Acts of Parliament and Regulations reinforce this commitment.  Compliance with these commitments must also be a relevant factor in the interpretation of ‘desirable, in the interests of the Commonwealth’.  Clearly it would be contrary to government policy, legislatively expressed on this very issue, if the very provision in the PSA which provides for the continued employment of employees over the age of 65 were to be construed in a manner which imposes an unjustifiable burden on these employees and which renders it almost impossible to apply.

Therefore the PSA did not require the ‘essentiality’ test imposed by the Department of Defence.  Further the test is not applied to employees or prospective employees in other age groups.  The decision of the Secretary to impose the test in coming to his decision under s.76V(2) in respect of these three complainants constitutes a distinction on the basis of age.”

I see no reason to conclude that the nouns “act” and “practice” are used in the HREOC Act in other than their ordinary meanings; that is, that in the Act, the noun “act” denotes a thing done and the noun “practice” denotes a course of repeated conduct.  The conclusion of the HREOC that -

“The decision of the Secretary to impose the test in coming to his decision under s 76V(2) in respect of these three complainants constitutes a distinction on the basis of age”

confirms that HREOC was concerned to inquire into an act done in relation to each complainant by or on behalf of the Commonwealth under the Public Service Act. That act, as I understand the Notice, was identified as the decision of the Secretary not to exercise the discretion vested in him by s 76V(2) of the Public Service Act.

CONSIDERATION
The principal purpose of HREOC’s inquiry was to enable it to form an opinion as to whether, in respect of any or all of the complainants, the decision of the Secretary not to exercise the discretion vested in him by s 76V(2) of the Public Service Act constituted discrimination (s 31(b)(ii) of the HREOC Act). Having regard to the definition of “discrimination” contained in s 3(1) of the HREOC Act, in the circumstances of the three complaints before it, HREOC was required to form an opinion as to whether such act constituted a distinction or exclusion made on the basis of age that had the effect of nullifying or impairing equality of opportunity or treatment in employment.

In conducting its inquiries into the complaints of the complainants, it was not open to HREOC, in my view, to disregard the effect of s 76V(1) of the Public Service Act which is to make retirement from the Australian Public Service upon the attainment of the maximum retiring age the norm for officers of the Australian Public Service. To put the matter another way, in conducting its inquiry, it was not open to HREOC, in my view, to disregard the legal obligations of the Secretary in reaching a decision as to whether or not to make a determination under s 76V(2) of the Public Service Act.

Section 76V(2) only authorises a Secretary to determine that s 76V(1) does not apply to an officer where he or she “is of the opinion that it is desirable, in the interests of the Commonwealth that [such] officer ... should continue ... in employment”. Secondly, even where the relevant Secretary is of the prescribed opinion, s 76V(2) gives him or her a discretion as to whether to determine that s 76V(1) does not apply to the officer. There is, in my view, no reason to construe the word “may” in s 76V(2) as imposing on the relevant Secretary an obligation rather than a discretion (Julius v Lord Bishop of Oxford (1880) 5 App Cas 214 at 222 - 223; Finance Facilities Pty Ltd v Federal Commissioner of Taxation (1971) 127 CLR 106).

The factors that a relevant Secretary is required to consider in exercising the discretion conferred by s 76V(2) of the Public Service Act are to be determined by construction of that Act. Since the Public Service Act does not expressly state such factors, they are to be determined by implication from the subject matter, scope and purpose of the Act (Minister for Aboriginal Affairs v Peko-Wallsend Limited (1986) 162 CLR 24 per Mason J at 39 - 40). Section 6 of the Public Service Act identifies its chief object as follows:

“The chief object of this Act is to constitute a public service for the efficient, equitable and proper conduct, in accordance with sound management practices (including personnel management practices), of the public administration of the Australian Government and this Act shall be construed accordingly.”

Although many would now contend that sound personnel management practices involve an absence of discrimination on grounds, including age, irrelevant to work performance, the Public Service Act cannot be construed without regard being had to the terms of s 76V(1). It would not be a lawful exercise of the discretionary powers of a Secretary under s 76V(2) for such powers to be used for the purpose of undermining the intention of Parliament as disclosed by the terms of s 76V(1). That intention appears plainly enough to be to ensure that in the ordinary course an officer of the Australian Public Service is to retire upon attaining the maximum retiring age.

HREOC concluded that the test utilised by the Secretary in deciding whether or not to make a determination that s 76V(1) would not apply to the complainants imposed “a considerable burden on employees who are over 65 years of age, a burden which does not apply to employees under the age of 65” and was a test “not applied to employees or prospective employees in other age groups”. So much may be accepted. However, neither employees under the age of 65 years nor prospective employees of any age require a determination pursuant to s 76V(2) to allow them to continue in employment within the Australian Public Service after they attain the maximum retiring age. In reaching a conclusion as to whether any of the acts of the Secretary in failing in respect of each of the complainants to make determinations under s 76V(2) of the Public Service Act constituted a distinction or exclusion on the basis of age, it was not open to HREOC to find such distinction or exclusion by comparing the positions of the complainants with the positions of persons in respect of whom s 76V(2) has no relevant operation.

However, that is not to say that a decision of a Secretary not to exercise the discretion to make a determination under s 76V(2) of the Public Service Act can never involve an act or practice constituting discrimination within the meaning of s 31(b) of the HREOC Act.

Having regard to the terms of s 76V(2), the areas in which a relevant distinction or exclusion on the basis of age could theoretically operate appear to be, first, in the process of the formation of the opinion as to whether or not it “is desirable, in the interests of the Commonwealth, that an officer who has not attained the maximum retiring age, should continue, after attaining that age, in employment”, and secondly, in the exercise of the discretion which arises once a Secretary forms such opinion.  If a Secretary were to conclude, for example, that it could never be in the interests of the Commonwealth for a person over the age of sixty five years to continue in employment, this would, in my view, constitute a distinction or exclusion on the basis of age.  Similarly, if a Secretary were to conclude, to take another example, that it could never be in the interests of the Commonwealth for a person to continue in employment after attaining the maximum retiring age where his or her employment before attaining that age was in a senior management position, or alternatively, involved physical labour, this would, in my view, constitute a distinction on the basis of age.

If a Secretary, having formed the opinion that it is desirable, in the interests of the Commonwealth, for a particular officer to continue in employment after attaining the maximum retiring age, nonetheless decided against making a determination that s 76V(1) does not apply to the officer on the basis of his or her opinion that older officers ought to leave the Australian Public Service to create promotion opportunities for younger officers, this would, in my view, amount to a distinction on the basis of age. Similarly, if a Secretary, having formed the prescribed opinion, adopted a practice of only making determinations in favour of officers who sought such determinations before they attained the age of sixty years, this would, in my view, amount to discrimination on the basis of age.

CONCLUSION
For the reasons given above, I reject the argument of the applicant that HREOC erred in law by determining that a decision of the Secretary not to exercise a discretion under s 76V(2) of the Public Service Act involves an act or practice for the purposes of s 31(b) of the HREOC Act. However, I conclude that HREOC did misconstrue the nature and ambit of the discretionary power vested in the Secretary by s 76V(2) of the Public Service Act, and, as a consequence, adopted an impermissible process of reasoning in reaching its conclusion that the Secretary discriminated against the complainants on the basis of their age. The finding of HREOC that the decision of the Secretary not to make a determination that s 76V(1) of the Public Service Act did not apply to each of the complainants constituted discrimination on the ground of age is thus tainted by error of law, and must be set aside.

Counsel for the complainants did not seek to argue that superannuation benefits paid or payable should not be taken into account by HREOC in the formulation of any recommendation which it might make pursuant to s 35(2)(c) of the HREOC Act. In my view, such benefits should be taken into account in the formulation of any such recommendation.

The only order that I make at this stage is to direct the applicants to bring in short minutes of order appropriate to be made pursuant to these reasons.

I certify that this and the preceding eleven (11) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson

Associate:
Dated:            

Counsel for the Applicant:	Miss R.H. Henderson
Solicitor for the Applicant:	Australian Government Solicitor
Solicitor for the first Respondent:	Mark Nichols
Counsel for the second, third and fourth Respondents:	Mr G. Pincott
Solicitors for the second, third and fourth Respondents:	Smith & Pasternacki
Date of Hearing:	16 July 1997
Date of Judgment:	18 September 1997