FEDERAL COURT OF AUSTRALIA

Keech v State of Western Australia Metropolitan Health Service trading as King Edward Memorial Hospital [2010] FCA 1332

THE COURT ORDERS THAT:

1.    The application is dismissed.

2.    The applicant pay the respondent’s costs.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

1    In February 2007, the applicant, Ms Keech, was employed as a midwife and lactation consultant by King Edward Memorial Hospital for Women in Subiaco, Western Australia.

2    On 2 February 2007, Ms Keech incurred an injury whilst working in the Women’s and Children’s Health Service at the hospital, when she slipped on liquid handwash on the floor beneath a hand-wash dispenser. Thereafter, Ms Keech experienced discomfort in the left knee and subsequently bruising and swelling of that area. At the time that the incident occurred, Ms Keech was 66 years old.

3    As the result of her injury, Ms Keech suffered an incapacity for work. The provisions of the Workers’ Compensation and Injury Management Act 1981 (WA) (the Compensation Act) were invoked by reason of the circumstances of Ms Keech’s injury.

4    Section 56 of the Compensation Act provides as follows:

Subject to the exceptions in Schedule 5, an entitlement of a worker to weekly payments of compensation for incapacity for work resulting from an injury under this Act ceases –

(a)    if the injury occurs on or before the date on which the worker attains the age of 64 – on attaining the age of 65; or

(b)    if the injury occurs after the date on which the worker attains the age of 64 – on the date one year after the injury occurs.

5    On 31 August 2007, the respondent’s insurer, RiskCover, wrote to Ms Keech and accepted liability on behalf of the respondent in respect of the injury Ms Keech had sustained at work.

6    From 4 September 2007, Ms Keech was in receipt of weekly compensation payments paid in accordance with the provisions of the Compensation Act. On 17 December 2007, RiskCover wrote to Ms Keech advising her that:

In accordance with Section 56 of the Worker’s Compensation and Injury Management Act, 1981, weekly compensation payments will cease for the above claim on 02/02/08.

7    As foreshadowed in RiskCover’s letter, Ms Keech did not receive weekly payments after 2 February 2008.

8    On 27 January 2010, Ms Keech commenced this proceeding alleging that by ceasing to continue to make the weekly payments after 2 February 2008, the respondent had thereby unlawfully discriminated against her on the basis of her age, contrary to s 18(2) of the Age Discrimination Act 2004 (Cth). Ms Keech claims a declaration that the respondent by its impugned conduct engaged in unlawful discrimination, and an injunction directing the respondent not to repeat or to continue such unlawful discrimination. Ms Keech also claims an order requiring the respondent to redress any loss or damage suffered by her.

9    Section 18(2) of the Age Discrimination Act provides as follows:

It is unlawful for an employer or a person acting or purporting to act on behalf of an employer to discriminate against an employee on the ground of the employee’s age:

(a)    in the terms or conditions of employment that the employer affords the employee; or

(b)    by denying the employee access, or limiting the employee’s access, to opportunity for promotion, transfer or training, or to any other benefits associated with employment; or

(c)    by dismissing the employee; or

(d)    by subjecting the employee to any other detriment.

10    Section 14 of the Age Discrimination Act provides:

For the purposes of this Act, a person (the “discriminator”) “discriminates” against another person (the “aggrieved person”) on the ground of the age of the aggrieved person if:

(a)    the discriminator treats or proposes to treat the aggrieved person less favourably than, in circumstances that are the same or are not materially different, the discriminator treats or would treat a person of a different age; and

(b)    the discriminator does so because of:

(i)    the age of the aggrieved person; or

(ii)    a characteristic that appertains generally to persons of the age of the aggrieved person; or

(iii)    a characteristic that is generally imputed to persons of the age of the aggrieved person.

11    Ms Keech contended that the respondent’s impugned conduct fell within the ambit of s 18(2)(b) of the Age Discrimination Act, because the respondent discriminated against her on the ground of her age by denying her a benefit associated with employment; and within the ambit of s 18(2)(d) because the respondent had subjected her to a detriment on the ground of her age.

12    The respondent contended that its conduct impugned by Ms Keech did not fall within the ambit of s 18(2) of the Age Discrimination Act. However, insofar as its conduct may have fallen within the ambit of that provision, the respondent said that, in any event, s 39(4) of the Age Discrimination Act applied to that conduct.

13    Section 39(4) of the Age Discrimination Act provides:

This Part does not make unlawful anything done by a person in direct compliance with:

(a)    an Act of a State or Territory; or

(b)    a regulation or any other instrument made under an Act of a State or Territory.

14    There are, therefore, two major issues in this case. The first issue is whether the respondent’s conduct fell within the ambit of s 18(2) of the Age Discrimination Act. The second issue is whether, if the conduct did fall within the ambit of s 18(2) of the Age Discrimination Act, s 39(4) of the Age Discrimination Act applied to the conduct so as to render the conduct not unlawful.

did the respondent’s conduct fall within the ambit of S 18(2) of the age discrimination act?

15    I deal first with the question of whether the respondent’s impugned conduct fell within the ambit of s 18(2) of the Age Discrimination Act.

16    Ms Keech contended that the respondent had discriminated against her because it had treated her less favourably than it would have treated a younger employee who incurred a workplace injury at the same time as Ms Keech did. This is because, the respondent had ceased making weekly payments to Ms Keech a year after her injury, whereas, the respondent would have continued to make weekly payments to the younger employee after that date.

17    In contending that the respondent’s conduct was discriminatory conduct which fell within the ambit of s 18(2) of the Age Discrimination Act, Ms Keech relied strongly on the decision of the Supreme Court of New Zealand in Air New Zealand Ltd v McAlister [2010] 1 NZLR 153 (McAlister).

18    In that case, Mr McAlister was one of Air New Zealand’s senior pilots, and was also one of its flight instructors. When Mr McAlister turned 60 years, Air New Zealand demoted him from pilot-in-command to first officer. He also ceased to be a flight instructor because Air New Zealand’s policy required that a flight instructor be an aircraft captain able to perform the role of pilot-in-command at all times. Mr McAlister made a complaint of age discrimination against Air New Zealand under the Employment Relations Act 2000 (NZ).

19    Air New Zealand contended that Mr McAlister was demoted because once he reached the age of 60 years, he could no longer fly as a pilot-in-command of a Boeing 747-400 aircraft in the air space of the United States of America. The United States Federal Aviation Administration authority adopted an International Civil Aviation Organisation (ICAO) standard that prohibited a pilot from holding the position of “pilot-in-command” if the pilot had obtained the age of 60 years. Other countries including Hong Kong, New Caledonia and Tahiti had adopted the same ICAO standard.

20    Air New Zealand, in turn, adopted a policy that no pilot who had reached the age of 60 years could hold a position of “pilot-in-command” on Boeing 747 and 767 aircraft while the predominant operation of those aircraft was in two or three territories that had adopted the ICAO standard.

21    It is necessary to record that s 30 of the New Zealand Human Rights Act 1993 (which applied in the circumstances) provided that there would be an exemption from the discriminatory provisions, where, being under a particular age, or in a particular age group, was a genuine occupational qualification for that position, whether for reasons of safety or any other reason. Further, s 35 of that Act precluded the employer from relying upon the s 30 exemption if it was able to make some reasonable adjustment, so that another employee could carry out that part of the older employee’s disabling duties.

22    Air New Zealand contended that in assessing whether the conduct was discriminatory on the grounds of age, the proper comparator was not other pilots who had not yet reached the age of 60 years, but other pilots who were also disqualified from flying to the United States of America. Measured against that comparator, said Air New Zealand, it had not discriminated against Mr McAlister on the ground of age.

23    In McAlister, Elias CJ, Blanchard and Wilson JJ found that the proper comparator should be persons who were in the same position as Mr McAlister, but younger than 60 years. At [37] of their reasons, Elias CJ, Blanchard and Wilson JJ observed:

In the present case, if the comparator used is the one which found favour with the Court of Appeal, namely comparison with pilots who cannot fly to the United States for any reason, it proves too much. There would then be no work to do for ss 30 and 35, which are an important part of the statutory scheme concerning age discrimination and introduce carefully stated checks and balances. However, if Mr McAlister’s treatment is compared simply with that of a similar pilot of under 60 (of himself age 59, if you like), then, assuming for the moment that the reason for his treatment was his age, the Court can move on to consider the s 30 defence and the s 35 qualification to the defence. If, on the other hand, his treatment is compared with a pilot of under 60 who cannot fly in the United States because he cannot lawfully enter its territory (no visa), the balance of the exercise is tilted too much the other way. The exercise would appear to lead to an obvious result, as the Court of Appeal found, since, freed of any need to come to an accommodation under s 35, Air New Zealand might well demote any pilot who for any reason could not fly its B747 planes to the United States. Not only would there be no opportunity for inquiry in Mr McAlister’s case into whether there was a genuine occupational qualification which could not be reasonably accommodated but there would also be no need for an inquiry into whether the direct or indirect reason for Mr McAlister’s treatment was or was not related to age. In other words, it would deny any role for the words “or indirectly” in the phrase “by reason directly or indirectly of any of the prohibited grounds”. (Footnote omitted.)

24    Ms Keech also referred to the following observations of Tipping J at [51]-[53] in McAlister, in support of her contention:

The second matter concerns the comparator issue. In general terms discrimination by reason of a prohibited ground involves one person being treated differently from someone else in comparable circumstances. The approach of the Court to the comparator issue should be guided by the underlying purpose of anti-discrimination laws and the context in which the issue arises. Anti-discrimination laws are designed, as I have said, to prohibit employment and other relevant decisions from being influenced by any feature which amounts to a prohibited ground of discrimination. Exceptions allow what would otherwise be a discriminatory feature to be taken into account if there is good cause for doing so. A comparator is not appropriate if it artificially rules out discrimination at an early stage of the inquiry. By artificially I mean that the comparator chosen fails to reflect the policy of the legislation, which is to take a purposive and untechnical approach to whether there is what I will call prima facie discrimination, while allowing the alleged discriminator to justify that prima facie discrimination if the case comes within an exception.

In some circumstances the relevant legislative provisions will dictate how the comparator exercise should be undertaken. In the present case, under s 104(1)(a) for example, the comparison is between the circumstances of the complaining employee and those of other employees “in the same or substantially similar circumstances”. Subject to any applicable statutory provision, the most natural and appropriate comparator is likely to be a person in exactly the same circumstances as the complainant but without the feature which is said to have been the prohibited ground. That feature must be eliminated from the comparator employee in order to make sense of the comparative exercise.

In the present case that elimination would produce, as the comparator, a pilot in exactly the same circumstances as Mr McAlister but who had not reached the age of 60. That is how I would apply the comparator concept in this case. The effect of doing so is, of course, the same as comparing Mr McAlister’s terms and conditions before and after he turned 60. (Footnote omitted.)

25    In my view, the circumstances of the McAlister case are distinguishable from the circumstances prevailing in this case.

26    In the McAlister case, it was within the power of Air New Zealand to decide on its response to the requirements of the countries which had adopted the ICAO standard in relation to pilots who had reached the age of 60 years. Air New Zealand made a decision to adopt and apply an employment policy to Mr McAlister, which directly and adversely affected the terms and conditions of his existing contract of employment, with the consequence that he was subjected to the detriment of a demotion, and was denied the benefit of his existing contractual rights to act as a pilot-in-command and flight instructor.

27    It followed that the policy consideration of prohibiting the making of decisions influenced by age related considerations, which Tipping J identified as underlying antidiscrimination law, were invoked by the conduct of Air New Zealand in deciding to adopt, and apply, its age related policy to Mr McAlister.

28    However, the position of the respondent in relation to Ms Keech is different to that of Air New Zealand in relation to Mr McAlister.

29    At the date of her injury, Ms Keech had no contractual rights to be paid weekly payments in respect of an injury at work. However, at that date, Ms Keech did have a statutory entitlement to weekly payments in respect of an injury suffered at work.

30    Unlike the position in McAlister, where Air New Zealand decided on, and applied, an age related policy, there was no discretion or liberty vested in the respondent to determine whether to pay Ms Keech the weekly payments and for how long those weekly payments should be paid. In commencing to make the weekly payments when it did, and in ceasing to make the weekly payments when it did, the respondent did no more, nor less, than perform its statutory obligation to Ms Keech. Far from subjecting Ms Keech to a detriment, or denying her a benefit, in making the weekly payments to her, the respondent accorded Ms Keech a benefit derived from statute. It was the statute that provided the entitlement, and also circumscribed the extent of the entitlement. Accordingly, in my view, the policy considerations underlying anti-discrimination laws, referred to by Tipping J, seeking to regulate decision-making in, relevantly, the employment field, were not invoked by the circumstances of the respondent performing its compulsory statutory obligation to Ms Keech.

31    The failure to continue to make weekly payments to Ms Keech after 2 February 2008, involved no diminution in Ms Keech’s contractual entitlements. I reject Ms Keech’s contention that she suffered age related discrimination because it was always open to the respondent to have continued to make the weekly payments voluntarily to Ms Keech, even though Ms Keech never had, at any time, a contractual right to such payments, and her statutory entitlement to such payments had been fully met. In my view, the policy of the Age Discrimination Act is not invoked in those circumstances.

32    Further, the view to which I have come, is not inconsistent with the presence of s 39(4) in the Age Discrimination Act, because there is still work for that section to do. Thus, s 39(4) would still have an effect where an employer makes an employment decision founded on statutory requirement, which has the effect of discriminating on the basis of age. An example of such a decision would be an employer requiring that a person employed as a driver, hold a driver’s licence – a statutory requirement which has age related ramifications.

33    It follows, therefore, that, in my view, the better view is that s 18(2) of the Age Discrimination Act has no application to the circumstances of this case. However, it is not necessary to finally determine this issue, because, for the reasons set out below, I am of the view, that, even if s 18(2) did have application to the respondent’s impugned conduct, s 39(4) would apply to that conduct, to render that conduct not unlawful.

does s 39(4) of the age discrimination act apply in this case?

34    The respondent contended that, in any event, even if the conduct of the respondent in not continuing to pay Ms Keech weekly payments after 2 February 2008, was conduct which discriminated against Ms Keech within the meaning of s 18(2) of the Age Discrimination Act, such conduct was, by reason of s 39(4) of the Age Discrimination Act, not unlawful. This is because, said the respondent, by making no further payments after 2 February 2008, it acted in “direct compliance” with the Compensation Act.

35    However, Ms Keech contended that the respondent had not acted in direct compliance with the Compensation Act. Ms Keech contended that the legislature sought to tightly control the circumstances in which discrimination on the basis of age under State Acts, would remain lawful after the passing of the Age Discrimination Act. It did so, said Ms Keech, by using the expression, “direct compliance” in s 39(4) of the Age Discrimination Act. Ms Keech said that in this case, “compliance” should be construed to mean that something is done in consequence of a statutory obligation to act in a particular way. Ms Keech contended that the words in s 56 of the Compensation Act did not impose an obligation on an employer to cease making weekly payments. As previously mentioned, Ms Keech contended that it was always open for the respondent to have continued to make weekly payments to her beyond 2 February 2008.

36    Ms Keech relied upon the following observations of Brennan J (as he then was) at 381 in Waters v Public Transport Corporation (1991) 173 CLR 349 (Waters) in relation to s 39(e) of the Equal Opportunity Act 1984 (Vic) – a similar provision to s 39(4) of the Age Discrimination Act:

Unless the “provision” itself makes it necessary to do the relevant discriminatory act, s 39(e) does not take the act outside the operation of the Equal Opportunity Act.

37    The provision, s 39(e), which was under consideration in Waters provided that:

This Act does not render unlawful –

…

(e)    an act done by a person if it was necessary for the person to do it in order to comply with a provision of –

(i)    an order of the Board;

(ii)    any other Act; or

(iii)    an instrument made or approved by or under any other Act.

38    In Waters, the Minister of Transport in Victoria directed the Public Transport Corporation, which was responsible for the provision of public transport in the State of Victoria, to introduce changes to the public transport system. The applicants complained that there were elements of the new system which were discriminatory to disabled people because they found it exceedingly difficult to use the new form of tickets which were introduced on certain trams, which would not have conductors. The applicants commenced a proceeding claiming that they had been the victims of discrimination.

39    Section 31 of the Transport Act 1983 (Vic), provided that the Public Transport Corporation must discharge its duties subject to the general direction and control of the Minister of Transport and to any specific directions given by the Minister. The High Court held that s 31 impliedly conferred upon the Minister statutory power to give a direction to the Corporation; and required obedience by the Corporation to any direction given in the valid exercise of that power.

40    The Public Transport Corporation contended that in introducing the changes to the transport system, it had acted in accordance with the directions of the Minister of Transport, and it was, therefore, entitled to the benefit of s 39(e)(ii) of the Transport Act.

41    At 368-370, Mason CJ and Gaudron J observed:

The question involved in this aspect of the case is whether the exemption in s 39(e)(ii) of anything which it was necessary to do in order to comply with a “provision” of any other Act extends to anything which was necessary in order to comply with a direction given by the Minister in the exercise of the statutory power conferred by s 31 of the Transport Act. The effect of the construction of s 39(e)(ii) for which the Corporation contends (“the wide construction”) in supporting an affirmative answer to that question would be that any of the myriad of persons possessing statutory power or authority to give a direction to another person in relation to a subject-matter would be empowered to exempt the conduct of that other person in relation to that subject-matter from unlawfulness under the Act in any case where the provision of the particular Act conferring the power or authority expressly or impliedly required – as it ordinarily would – that such a direction be obeyed by the persons to whom it was given. It is argued for the appellants that s 39(e)(ii) should be more narrowly construed as referring only to something which is done in order to comply with a specific obligation directly imposed by an actual provision of another Act (“the narrow construction”).

As a matter of language, the words of s 39(e)(ii) are capable of bearing the meaning attributed to them by either construction. Anything that it is necessary to do in order to comply with an exercise of statutory power can, as a matter of language, be said to be necessary “in order to comply with” the legislative “provision” conferring (and expressly or impliedly requiring obedience to) the statutory power. On the other hand, and depending upon context, a reference to what is necessary to comply with “a provision of…any other Act” can be construed as referring only to what it is necessary to do in order to comply with a specific requirement directly imposed by the relevant provision as distinct from a requirement imposed by some person in the exercise of some power conferred by the provision (cf, eg, the construction given by the House of Lords in Hampson v Department of Education and Science to the words “any act of discrimination done…in pursuance of any instrument”)…

…

More importantly, the wide construction seems to us to be inconsistent with the general scheme of the Act. It is one thing to provide that the Act should give way to an express direction contained in an actual provision of another Act or in a statutory instrument. It is a quite different thing to provide, in effect, that the Act shall give way to any subordinate direction, no matter how informal, to which a provision of any other Act requires obedience…

…

As has been said, s 31 of the Transport Act did not require the Corporation to do any specific thing. It did not directly impose any obligation upon the Corporation to remove conductors from trams or to introduce scratch tickets. If such an obligation was imposed upon the Corporation, it was imposed by the oral directive of the Minister given pursuant to s 31. (Footnote omitted.)

42    It is also significant that the observations of Brennan J at 381, which are relied upon by Ms Keech, and referred to at [36] above, are succeeded by the following words on that page:

Section 39(e)(ii) should not be construed as relating to a provision in an Act which does not itself require the doing of a discriminatory act but which requires obedience to a direction which is given under an authority conferred by that Act.

43    When Brennan J’s observations are considered in context, therefore, it is apparent that the gravamen of those observations is, materially, to like effect to the observations of Mason CJ and Gaudron J referred to at [41] above.

44    In my view, these observations inform the meaning that is to be given to the expression “direct compliance” in the Age Discrimination Act. It follows that, in my view, the expression “direct compliance” requires that impugned conduct is conduct which is actuated by an obligation which is directly imposed upon a party by the provisions of a statute or other nominated statutory instrument, rather than by directions made, or given, pursuant to a general power to give directions provided for in a statute.

45    In this case, the respondent acted in response to the very terms of s 56 of the Compensation Act - a section of the Act which defined the extent and term of Ms Keech’s entitlement to weekly payments by reference to her age at the time that the workplace accident occurred. The Compensation Act, thereby, directly imposed on the respondent an obligation to pay Ms Keech weekly payments for the defined period. By making weekly payments to Ms Keech for the duration of that term, and for no longer than that term, the respondent acted in direct compliance with the statute.

46    I do not accept the submission made by Ms Keech that the payments made to Ms Keech were not made in direct compliance with the statute, because the respondent was at liberty to keep making the payments to Ms Keech after the statutory expiry date. That proposition (which, in any event, by reason of the respondent’s public status, is of dubious validity) is irrelevant to the question of whether the respondent acted in direct compliance with the Compensation Act, in making the weekly payments to Ms Keech for no longer than the term stipulated in the Compensation Act.

47    It follows that Ms Keech’s application is dismissed.

Associate:

Dated:    2 December 2010