The Victorian Court of Appeal has upheld an important ruling, finding that direct discrimination can occur through an employer’s unconscious act of bias towards an employee in the workplace. In Austin Health v Tsikos [2023] VSCA 82, an employer was found to have treated an employee unlawfully because of her sex by ignoring her repeated attempts to negotiate higher pay rates, despite affording such right to the employee’s male colleagues. The conduct was found to be in breach of the Equal Opportunity Act 2010 (Vic) (EO Act).
This decision is a timely reminder for employees to be cautious of how ‘unconscious’ biases may impact their decision making and the potential consequences for unlawfully discriminating against employees.
Background
Christina Tsikos was employed by Austin Health between 2009 to 2018. She was initially employed in a clinical role as an orthotist/prosthetist, but was promoted in 2010 to manager of the Orthotic/Prosthetics Department. During her employment, she was paid at the rate provided in the applicable industrial agreement.
Ms Tsikos managed fourteen people, with ten of these employees being men. Four of the male employees were being paid above their enterprise agreement rates and were classified at a level higher than their role classification. One of the employees was paid significantly higher than Ms Tsikos, despite him reporting to her.
Ms Tsikos attempted to renegotiate her wage six times over seven years, however, Austin Health did not engage in the negotiations.
Procedural History
VCAT
Ms Tsikos commenced proceedings in the Victorian Civil and Administration Tribunal (VCAT) under the EO Act claiming she had been directly discriminated against on the basis of her age and sex. She claimed that she had been treated unfavourably in being denied or limited access to negotiate her salary.
VCAT was not satisfied that discrimination had occurred on the basis that Ms Tsikos failed to show:
• That being unable to negotiate her salary was unfavourable treatment as there was inadequate evidence of the opportunity existing for other employees;
• with sufficient strength or particularity, a denial or limitation of the attempts (of Ms Tskikos to negotiate her pay) by Austin Health; and
• any unfavourable treatment was on the basis of her age or sex.
Supreme Court
Ms Tsikos appealed the decision to the Supreme Court. Justice Richards upheld the appeal found that the original decision had several errors including that VCAT had failed to: • consider whether Ms Tsikos had been treated less favourably in the ways she alleged. VCAT had, instead, considered whether Ms Tsikos had been treated less favourably than her male colleagues;
• determine whether the alleged contravention had been proved; and
• consider and make findings about Ms Tsikos’ sixth attempt to negotiate which was significant due to its formal nature.
It was also found that VCAT had erroneously considered the attempts individually rather than consider the evidence holistically. Ms Tsikos had provided expert evidence in relation to the operation of structural inequality and unconscious bias in the workplace which contributed to the holistic picture of Austin Health treating her unfavourably. It was found that if these errors had not been made, it was open to VCAT to find that Austin Health had discriminated against Ms Tsikos on the basis of her sex by failing to negotiate her wage.
The appeal was allowed and remitted to VCAT to be heard and decided again.
Appeal
Court of Appeal
Austin Health appealed the Supreme Court decision on nine different bases. It was claimed that the judge erred in:
- Not exposing her reasoning pathway in respect of any error to dismiss the claim of age discrimination;
- Determining the wrong test was applied for ‘direct discrimination’;
- Determining VCAT failed to consider and adjudicate upon the ‘entire evidence’;
- Finding VCAT had failed to consider the sixth attempt to negotiate;
- Characterising Ms Tsikos’ claim as one of systemic discrimination’;
- Ignoring a finding of fact that Ms Tsikos failed to establish a denial of access to a ‘benefit’ or a ‘detriment’;
- Determining that the Briginshaw principles did not and would not apply to the claim of unlawful direct discrimination on the grounds of ‘sex’;
- Invoking the rule in Jones v Dunkel to support the proposition that a failure to call a witness may provide basis of an adverse inference; and
- Remitting the claim back to VCAT because upon remittal for rehearing, the unchallenged findings of fact stood in the way of the claim succeeding.
The leave to appeal was granted, however, none of the grounds were successful. The Court of Appeal agreed with the single instance judgment and found that VCAT had erred in its original decision by:
• applying the wrong test for direct discrimination;
• failed to weight the ‘entire evidence’; and
• omitted considerations of the manager’s final attempt to negotiation.
The Court of Appeal noted that “we agree with the judge that not only would it have been open to the tribunal to find that composite picture was one of unfavourable treatment, it is difficult to see how the tribunal could reasonably have concluded otherwise”,
Key Takeaway
Unintentional discrimination or unconscious bias can fall foul of anti-discrimination legislation. It is as important as ever to ensure that employer’s frameworks for remuneration and other employment benefits are appropriately administered and managed to minimise the risk of discrimination outcomes, even if indirect or unconscious.
How we can help
For assistance with advice on your organisation’s obligations to comply with anti-discrimination legislation or assistance with dealing with matters raised by employees in relation to potential claims of discrimination, contact our workplace relations team. Our team is well-placed to assist with practical and legal guidance for organisations seeking to balance their obligations to employees, and their operational and workforce needs.
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