Australia: Amery in the High Court: Equal Pay for Equal Value

In November 2005, the High Court heard an appeal from the NSW Court of Appeal's decision in Amery where it upheld a finding of the Appeal Panel of the NSW Administrative Decisions Tribunal that the Department had indirectly discriminated against a number of long-term female casual teachers by denying them access to a more beneficial pay scale for permanent teachers.

Last week the High Court handed down its decision, effectively overturning the decision of the Court of Appeal and finding that the Department had not indirectly discriminated against the casual teachers. This article revisits some of the issues arising in Amery and, in particular, highlights the often complex jurisdiction of indirect discrimination.

The NSW Department of Education employs teachers on a permanent and casual basis. Their pay is based on different pay scales for permanent and casual teachers. A casual teacher's highest increment is level 8, whereas a permanent teacher may be paid according to increment level 13.

The appellants were female teachers who claimed that they had been discriminated against on the basis of sex, in accordance with section 24 of the Anti-Discrimination Act 1977 (NSW). They argued that, as casual teachers, they were unable to access higher increment levels while performing work of equal value. The claim was for the difference between the salary they earned as casual teachers and the salary they would have been paid but for the alleged discriminatory conduct.

The teachers were initially successful in the Administrative Decisions Tribunal, but the decision at first instance was overturned on appeal. The teachers then appealed successfully to the NSW Court of Appeal.

The teachers contended that a requirement or condition that they hold a permanent appointment in order to access the higher pay scale was indirectly discriminatory and unreasonable given that they performed work of equal value. The Department disagreed, arguing that the manner in which the teachers identified the requirement or condition had no regard to circumstances in which it had been imposed. In this regard, the Department argued that permanent status was a term of employment that arose out of a statutorily regulated system, pointing to the Teaching Services Act 1980. The Department also noted that in paying its casual teachers differently, the Department was simply applying the terms and conditions set by industrial awards or agreements approved by the State Industrial Commission.

At first instance, the Tribunal accepted that the work performed by the casual teachers was of equal value to that of the permanent teachers and that they had established that the requirement to have permanent status was unreasonable. Accordingly, the Tribunal awarded each of the casual teachers damages.

On appeal to the Appeal Panel of the NSW Administrative Decisions Tribunal, it found that the Tribunal had erred in law and that the teachers had not established that the requirement was not reasonable. Accordingly, it allowed the Department's appeal and dismissed the complaints.

On appeal to the NSW Court of Appeal, the orders made by the Appeal Panel were set aside and the majority orders made by the Tribunal reinstated. The Court of Appeal also ordered that each of the teachers be entitled to interest on damages, provided they did not exceed $40,000 (the statutory cap for the jurisdiction).

On appeal to the High Court, the Department arguments were twofold:

• First, the Department had not required the casual teachers to hold permanent appointment in order to access the higher pay scale;
• Second, the requirement or condition was reasonable in the circumstances, having regard to:
• the statutory framework that applied to permanent teachers but not to casual teachers;
• the geographical limitations that had been placed by the casual teachers in relation to their acceptance of permanent appointment;
• the applicable industrial arrangements (that is, the existence of an enterprise agreement and award).

On the requirement issue, a majority of the High Court found that the Court of Appeal had erred in finding that there was a requirement or condition that the casual teachers must cease to be a casual teacher and/or accept permanent appointment in order to access the higher pay scale. In doing so, Justices Gummow, Hayne and Crennan (in the majority) stated:

"The distinction between permanent and non-permanent teachers in the Education Teaching Service is a feature of the structure of the workforce employed in that Service. That structure was not adopted by decision or practice of the Department. It was imposed by the Teaching Services Act. The pay scales set by the Award and the practice, adopted by the Department, of not extending to its supply casual teaching staff over-award payments were an incident of the management of that structure".

Having found that there was no imposition of a requirement or condition, they did not consider it necessary to determine the reasonableness issue.

While Chief Justice Gleeson did not agree with the majority on the requirement issue, he found that the Department's conduct had been reasonable in the circumstances and, in doing so, allowed the appeal. On the reasonableness issue, he had regard to the following:

• that it was not unreasonable to pay casual and permanent teachers differently having regard to their "significantly different" conditions of employment, including specifically that casuals were not subject to directions regarding transfer of employment;
• industrial sensitivities if the Department were to make over award payments to some teachers and not others;
• the industrial context in which the conduct occurred, that is, the existence of an applicable enterprise agreement and award.

Justices Callinan and Heydon also found that the Department's conduct to have been reasonable in the circumstances.

Justice Kirby provided a dissenting judgment.

Ultimately, the High Court in Amery had trouble accepting that there had been the imposition of a requirement of permanent appointment having regard to the statutory framework (that regulates the teaching profession) and the industrial context in which there had come to be different pay scales for casual and permanent teachers.

In our feature article, we looked at the prediction made by a number of observers that the introduction of Work Choices will bring about an increase in discrimination claims. While it may take some time to assess whether the prediction ultimately proves to be true, there has been for some time a trend of claims being made outside of the "pure" industrial relations field. Trade practices law, discrimination law, common law claims for breach of contract - these are just some of the jurisdictions being pursued. As Justice Kirby pointed in Amery, however, the High Court has been consistently cautious in allowing discrimination claims.

Certainly the High Court's decision in Amery presents as an example where there has been an interesting use of the anti-discrimination laws to deal with on its face an industrial dispute about casual pay rates, while also highlighting some of the difficulties in doing so.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.