Australia: Full Court considers racial discrimination in the workplace

Key Points:

A significant and sensitive workplace issue such as alleged racial discrimination should be treated seriously by employers, particularly given that employers can be found vicariously liable for it.

A case involving inappropriate workplace remarks about lollies and cheese has caused the Full Court of the Federal Court to examine the proper application of key sections of the Racial Discrimination Act 1975 (Cth).

Following a recent appeal decision in Vata-Meyer v Commonwealth of Australia [2015] FCAFC 139, employers are reminded that an allegation of workplace racial discrimination should be taken very seriously and, if substantiated, lead to appropriate disciplinary action.

The alleged racial discrimination

Edna Vata-Meyer is an Indigenous woman who was employed by the Commonwealth Department of Education, Employment and Workplace Relations (DEEWR) as a mature-age graduate in its Indigenous Graduate Recruitment Program.

Following an initial complaint in the Australian Human Rights Commission that could not be resolved by conciliation, in September 2012 Ms Vata-Meyer commenced an application in the Federal Circuit Court alleging racial discrimination by a number of her colleagues, in breach of the unlawful discrimination provisions of section 9 of the Act.

Ms Vata-Meyer's application also alleged that, as the employer of the relevant individual respondents, the Commonwealth was vicariously liable for the discriminatory actions under section 18A of the Act.

The allegations primarily involved conduct by a colleague of Ms Vata-Meyer's, Mr Lee, who:

  • Offered her a packet of "Chico" lollies and said "have some black babies"; and
  • In a team afternoon tea on the same afternoon, in the presence of Ms Vata-Meyer, responded to a question by a colleague about the difference between camembert and brie cheese by calling out "I like Coon".

Following a complaint by Ms Vata-Meyer, DEEWR conducted an investigation, which resulted in Mr Lee apologising to Ms Vata-Meyer for his comments.

Ms Vata-Meyer was not satisfied with the investigation or its conclusion and made a number of written complaints to DEEWR management, including to the Department Secretary, before taking the matter further.

The legislative basis of Ms Vata-Meyer's complaint

Section 9(1) of the Act says that it is unlawful for someone to take action which involves a distinction, exclusion based on race, colour, descent or national or ethnic origin which has the purpose or effect of nullifying or impairing the enjoyment or exercise, on an equal footing, of any human right or fundamental freedom.

Under section 15(1) of the Act it is unlawful for an employer (or person acting on behalf of an employer) to fail to afford someone the same conditions of work by reason of the race, colour or national/ethnic origin of that the person in question.

Section 18 of the Act provides that if an action is taken for two reasons and one of them is the race of a person, the action is taken to be done for that reason.

Ms Vata-Meyer's allegation that the Commonwealth was vicariously liable stems from section 18A of the Act which provides that the Act applies to an employer in relation to unlawful conduct by an employee in the course of their duties.

Initial decision: no injury in the enjoyment of her work conditions

At first instance the Federal Circuit Court dismissed Ms Vata-Meyer's application, on the basis that DEEWR's response to her allegations had been "adequate and appropriate to the circumstances", and that the prompt investigation into the inappropriate remarks, and Mr Lee's subsequent apology, "should have ensured" that Ms Vata-Meyer was not injured in the enjoyment of her work conditions.

In making this finding, the primary judge accepted evidence from Mr Lee that he did not understand that his "black babies" comment might cause offence. This conclusion was based in part on the primary judge's impression of Mr Lee as "a remarkably unsophisticated man".

Full Court Appeal decision: the correct test for unlawful discrimination was not applied

Following an appeal by Ms Vata-Meyer, the Full Court overturned the initial decision, on the basis that the primary judge had failed to apply the correct test based on key sections of the Act or to properly assess the evidence before him.

In considering the appeal, the Full Court found that the primary judge's reasons did not address the key elements of section 9(1) of the Act that must be established in order to prove unlawful discrimination.

Two issues conflated: Mr Lee's conduct and the Department's response

The Full Court found that the primary judge failed to assess the alleged conduct of Mr Lee separately from the subsequent investigation of the complaint by DEEWR management. That is, he failed to address whether Mr Lee's conduct was in breach of section 9(1) of the Act, regardless of any steps taken by DEEWR to investigate Ms Vata-Meyer's allegations.

Specifically, the Full Court found that "there was no attempt to deal with Ms Vata-Meyer's evidence that Mr Lee's conduct caused her distress and hurt and the subsequent actions of the Department did not relieve either".

This was against the background of Ms Vata-Meyer's evidence ‒ both in a contemporaneous letter to senior DEEWR management objecting to the outcome of the investigation, and as a witness ‒ that established she was offended by Mr Lee's conduct and felt a strong sense of injustice arising from it.

The context of Mr Lee's comments

The Full Court considered that the primary judge's acceptance of Mr Lee's evidence that he did not understand that his "black babies" comments might have caused offence did not result from a proper application of the test in section 9(1) of the Act and arose from the primary judge placing too much weight on his impression that Mr Lee lacked sophistication.

The Full Court found that the primary judge did not properly consider the context of the comments and evaluate them against the unchallenged evidence of Ms Vata-Meyer and other witnesses, including that:

  • Ms Vata-Meyer had an initial angry response to Mr Lee's first reference to "black babies" yet Mr Lee repeated the reference;
  • on the same day, Mr Lee made a subsequent gratuitous reference to "Coon" and gave evidence that he knew the phrase could be used as a racial slur;
  • the fact that Mr Lee was a Work Health and Safety Advisor;
  • Mr Lee knew that Ms Vata-Meyer had been employed under the Indigenous Graduate Program; and
  • the fact that Mr Lee had undertaken cultural awareness training in the two years prior to the date in questions which included content on Indigenous cultures and cross-culture behaviours and actions.

In particular, the Full Court commented: "it is difficult to believe that in 2011 a person who had completed [cultural awareness] training of this nature would be oblivious to the hurt that might be caused to an indigenous person by inviting her... to eat "black babies" and would not know that it would impair her enjoyment on an equal footing of her right to just an favourable conditions of work."

The Full Court's order

The Full Court ordered that the matter be remitted to the Federal Circuit Court for a retrial, to decide:

  • Whether Mr Lee's conduct contravened section 9(1) of the Act; and
  • If so, whether the Commonwealth is liable for any contravention by Mr Lee.

Issues for employers when there's a complaint of racial discrimination

While a final decision on whether Mr Lee's comments constituted unlawful racial discrimination will not be made until the matter is reheard in the Federal Circuit Court, this case highlights some important issues for employers to keep in mind.

Firstly, it affirms that any assessment of racial discrimination in the workplace must take into account the perception of the person the subject of the conduct.

Secondly, although the Full Court did not specifically object to the primary judge's finding that DEEWR had dealt with the matter appropriately, this case highlights that a significant and sensitive workplace issue such as alleged racial discrimination should be treated seriously by employers, particularly in light of the fact that an employer can be found vicariously liable for unlawful conduct by an employee under section 18A of the Act.

It is quite possible in this instance that, had Mr Lee been subject to more severe disciplinary action (for example, a formal written warning and direction to attend remedial training) once DEEWR had satisfied itself that he had made the comments and that they were offensive to Ms Vata-Meyer, it may have brought the matter to a more satisfactory resolution.

Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this bulletin. Persons listed may not be admitted in all states and territories.

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