Do employers have the right to discriminate?

The Morrison Government’s attempts to bring anti-discrimination legislation earlier this year didn’t exactly go the way it had hoped. While it argued that it was attempting to protect the rights of religious groups and cultural minorities, many critics believed its proposed laws actually gave employers the right to discriminate – or otherwise behave unfairly – towards certain minority groups, most notably transgender people.

Another criticism levelled at the government was that both Australia and various states already had anti-discrimination legislation that went further than the government’s proposed reforms.

With that in mind, we look at whether it’s ever legal for employers to discriminate.

Non-discrimination is the law

The first thing to note is that discriminating against an employee or potential employee is already illegal in most circumstances. The federal Age Discrimination Act 2004, Disability Discrimination Act 1992, Racial Discrimination Act 1975, and Sex Discrimination Act 1984 make it unlawful to discriminate against people on the basis of age, disability, race and gender respectively. The Australian Human Rights Commission Act 1986 also forbids discrimination in employment or occupation.

The Fair Work Act 2009 also forbids employers from discriminating against employees by taking adverse action against them based on their ‘race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin’. This could include such action as dismissing someone, treating them differently from other employees or failing to offer them a position. It also outlaws both direct and indirect discrimination, ie where a term or condition has the effect of treating some employees differently from others.

Then there are State and Territory anti-discrimination Acts, as set out below. These tend to overlap with the federal laws, although they often apply a little differently.

Australian Capital Territory – Discrimination Act 1991
New South Wales – Anti-Discrimination Act 1977
Northern Territory – Anti-Discrimination Act 1996
Queensland – Anti-Discrimination Act 1991
South Australia – Equal Opportunity Act 1984
Tasmania – Anti-Discrimination Act 1998
Victoria – Equal Opportunity Act 2010
Western Australia – Equal Opportunity Act 1984

But there are exceptions, some of which we outline below.

Inherent requirements of the job

One time that an employee can often discriminate is generally where it goes to the heart of the job and the person’s ability to fulfil it.

For instance, section 30 of the Sex Discrimination Act lets employers discriminate against employees based on gender where the duties can only be performed by someone of a particular gender. This includes where physical attributes are needed to perform the role (i.e. strength) or it’s appropriate based on privacy or decency (i.e. where the role involves fitting clothing).

The Disability Discrimination Act allows an employer to discriminate where the employee’s disability means they can’t perform the inherent requirements of the job. However, it also places an obligation on the employer to consider ‘reasonable adjustments’.

Similarly, the Fair Work Act says that an employer’s action doesn’t constitute ‘adverse action’ if it relates to the ‘inherent requirements of the job’. Unlike the Disability Discrimination Act, the employer doesn’t generally have to prove that the employee can’t perform the role, only that it was a genuine consideration.

Health and safety grounds

In NSW at least, it’s not unlawful to discriminate against someone where it’s done to comply with Public Health Orders. That means, for instance, where someone has an infectious disease, such as Hepatitis A, they can legitimately be excluded from food handling duties or other duties where the possibility of infecting others is high.

Of course, the right to discriminate on health and safety grounds has taken on a whole new meaning over the past 12 months, in light of COVID-19. Vaccine mandates have been upheld in court many workers who have refused to be vaccinated – such as those in NSW’s education system – have been legitimately being stood down.

Find out more about an employer’s right to discriminate against unvaccinated employees.

The grounds of religious belief

One of the most topical areas impacted by discrimination laws, and the main source of contention in the Commonwealth Government’s failed anti-discrimination laws is an employer’s right to discriminate on religious grounds. This has a point of contention for some religious institutions and religion-based private schools in particular.

But this right is actually often already enshrined in various pieces of legislation. For example, section 37 of the Sex Discrimination Act excludes religious bodies from the discrimination provisions insofar as they affect the ordination of priests or ministers, appointing people to perform duties or any other practice. Section 38 of the Sex Discrimination Act provides an exemption allowing educational institutions to discriminate against someone – including based on their marital status, sexuality or gender identity – where it is in line with the doctrines of that religion.

The Age Discrimination Act also contains a similar exemption for religious bodies. Meanwhile, the Australian Human Rights Commission Act 1986, ‘excludes any distinction, exclusion or preference in connection with employment of a person in a religious institution, if the distinction, exclusion or preference is made in order to avoid injury to the religious susceptibilities of adherents of that religion’.

In short, there are already ample ways for religious-based organisations to get around anti-discrimination laws where it’s in line with their beliefs.

The consequences of getting it wrong

While there are always some bodies that can get around anti-discrimination laws, the reality is that in most instances and for most employers and employees, they still very much apply. Getting it wrong may not just lead to the cost of an anti-discrimination claim or unlawful dismissal case, it can lead to severe reputational damage.

For this reason, it’s always best to play it safe and to go into an instance where discrimination may occur knowing your obligations and your options.

If you’d like to know more about these, get in touch.