FEDERAL COURT OF AUSTRALIA DISCRIMINATION LAW - indirect discrimination in employment on ground of sex- representative action by national union on behalf of group of Western Australian members - women on extended leave from bank for reasons connected with child birth and child care, during period of corporate restructuring - group denied opportunity to express interest in voluntary retrenchment available to other employees - group subject to disadvantageous conditions with respect to applying for new positions which became available by reason of the restructure -construction and application of s 5(2)(b) Sex Discrimination Act 1984 (Cth) - factors to be taken into account when determining whether employment requirement constitutes discrimination - whether conditions imposed by the bank reasonable in all the circumstances - onus of proof - whether failure to consider effect of entitlements associated with extended leave, including guarantee of comparable job on return - selection of appropriate base group for determining proportionate ability to comply with conditions imposed. ADMINISTRATIVE LAW – judicial review - review of decision of Human Rights and Equal Opportunity Commission - finding that claim of indirect discrimination contrary to the Sex Discrimination Act 1984 (Cth) was substantiated - no determination as to appropriate relief - whether reviewable decision. Administrative Decisions (Judicial Review) Act 1977 (Cth), ss 5(1)(e), 5(1)(f). Sex Discrimination Act 1984 - 1994 (Cth), ss 3, 5, 14(2), 40(1)(e), 50, 69, 81. Commonwealth v Human Rights and Equal Opportunity Commission (1997) EOC 92-890, cited. Australian Iron & Steel Pty Ltd v Banovic (1989) 168 CLR 165, cited. Australian Medical Council v Wilson (1996) 68 FCR 46, cited. Waters v Public Transport Corporation (1991) 173 CLR 349, applied. Secretary, Department of Foreign Affairs and Trade v Styles (1989) 23 FCR 251, discussed and applied. Commonwealth v Human Rights and Equal Opportunity Commission (1995) 63 FCR 74, cited. IW v City of Perth (1997) 146 ALR 696, cited. Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259, cited. State Electricity Commission of Victoria v Casey [1994] 2 VR 216, discussed and applied. Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal (1990) 26 FCR 39, cited. Australian Broadcasting Tribunal v Bond (1990)170 CLR 321, distinguished. COMMONWEALTH BANK OF AUSTRALIA v HUMAN RIGHTS AND EQUAL OPPORTUNITY COMMISSION & ANOR NG 306 OF 1997 DAVIES, BEAUMONT & SACKVILLE JJ SYDNEY 28 NOVEMBER 1997 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 306 of 1997 BETWEEN: COMMONWEALTH BANK OF AUSTRALIA AppLICANT AND: HUMAN RIGHTS AND EQUAL OPPORTUNITY COMMISSION FIRST Respondent FINANCE SECTOR UNION SECOND RESPONDENT JUDGES: DAVIES, BEAUMONT And SACKVILLE JJ. DATE OF ORDER: 28 November, 1997 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The decision of the Human Rights and Equal Opportunity Commission, dated 21 March 1997, be set aside. 2. The matter be remitted to the Commission, differently constituted, to be determined in accordance with law. 3. The second respondent pay the applicant's costs. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY ng 306 of 1997 BETWEEN: COMMONWEALTH BANK OF AUSTRALIA Applicant AND: HUMAN RIGHTS AND EQUAL OPPORTUNITY COMMISSION First Respondent FINANCE SECTOR UNION Second Respondent CORAM: DAVIES, BEAUMONT AND SACKVILLE Jj DATE: 28 NOVEMBER 1997 PLACE: SYDNEY REASONS FOR JUDGMENT DAVIES J: The facts and issues are set out in the reasons for judgment prepared by Sackville J which I have had an opportunity to read. I agree with his Honour's view that the Human Rights and Equal Opportunity Commission ("the Commission") failed to take relevant matters into account; but I wish to state some additional views of my own. Jurisdiction I should first discuss whether the reasons for decision issued by the Commision on 21 March 1997, and now reported as Finance Sector Union v Commonwealth Bank of Australia (1997) EOC 92-889 constituted a "decision" which was reviewable under the Administrative Decisions (Judicial Review) Act 1977 (Cth). At 77,253-4, the reasons for decision concluded, inter alia:- "10. CONCLUSION 1. We find that the complaint of indirect sex discrimination contrary to s 5(2) of the Act is substantiated. 2. We dismiss the complaint of direct pregnancy discrimination pursuant to s 6 of the Act. 11. CONTINUATION OF THE INQUIRY We have found the Union's representative complaint substantiated insofar as the Class A women are concerned, but this finding is one of liability only. It may be expected, however, that as a consequence of our findings we will need to take into account the evidence of the Bank concerning the Class A women and their theoretical prospects of being granted a retrenchment package. It will also be relevant to relief that the principal damage allegedly suffered constitutes loss of opportunity. Before we are in a position to make a determination in accordance with s 81(b) of the Act, it will be necessary to convene a directions hearing as soon as possible." Section 81 of the Sex Discrimination Act 1984(Cth) ('the Act") provided, inter alia: "(1) After holding an inquiry, the Commission may: (a) dismiss the complaint the subject of the inquiry; or (b) find the complaint substantiated and make a determination, which may include any one or more of the following: ... (iv) a declaration that the respondent should pay to the complainant damages by way of compensation for any loss or damage suffered by reason of the conduct of the respondent; ... (6) If the Commission makes a determination under subparagraph (1)(b)(iv) on a representative complaint, the Commission may give such directions (if any) as it thinks just in relation to: (a) the manner in which a class member is to establish his or her entitlement to the payment of an amount under the determination; and (b) the manner for determining any dispute regarding the entitlement of a class member to the payment." Section 82 provided: "A determination under section 80 or 81 on a representative complaint must describe or otherwise identify those of the class members who are to be affected by the determination." Counsel for the parties contended that, for the reasons for decision to constitute a reviewable "decision", it was sufficient that the Commission expressed a finding of liability. Counsel referred to the remarks of Mason CJ in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 where his Honour said, in relation to a finding of the Australian Broadcasting Tribunal under s 88(2) of the Broadcasting Act 1942 (Cth), that the licensees were no longer fit and proper persons to hold their broadcasting licences, that the finding was a reviewable decision being an intermediate determination made on the way to deciding whether to revoke or suspend the licences or to impose conditions on them. In my opinion, the position under s 88(2) of the Broadcasting Act was not analogous to the present. The Broadcasting Act provided for two decisions to be made, one being whether or not the licensee was a fit and proper person to hold the broadcasting licence and the second being a decision, in the making of which the public interest was determinative, whether the licence should be revoked or suspended or whether conditions should be imposed. In the present case, s 81(1) of the Act provides that the Commission may either dismiss the complaint or "find the complaint substantiated and make a determination". The Act has in mind one decision which will comprise either dismissal of the complaint or a finding that the complaint is substantiated and a determination. It does not provide for the making of an intermediate decision of the type contemplated by s 88(2) of the Broadcasting Act. Counsel for the parties alternatively submitted that the reasons for decision issued on 21 March 1997 effectively constituted a determination under s 81(1)(b), notwithstanding that the Commission expressed itself to the contrary. It is clear from a reading of the Commission's reasons for decision that the Commission would have expressed its findings as a determination save that it considered that to do so would require the Commission to give directions under s 81(6) of the Act. However, it is not necessary that all the specific directions which would be necessary to enable the class members to establish their entitlement should be given in the determination. It is sufficient that the determination should direct that a directions hearing be held to deal with the matters mentioned in s 81(6). That is what the reasons for decision did. In the circumstances, I am prepared to treat the Commission's reasons for decision as constituting a finding that the complaint was substantiated insofar as s 5(2) of the Act was concerned and a determination under s 81(1)(b), including a declaration in the terms of paragraph 81(1)(b)(iv). The Class Members One of the reasons why it is important that there be a formal determination is that the formal determination will, in accordance with s 82 of the Act, describe or otherwise identify those of the class members who are to be affected by the determination. Counsel for the parties contended that the Commission's decision relevantly identified the class affected when, at 77,213, the Commission described the class in respect of whom the proceedings were brought as follows: "This group, which we shall call "Class A", consists of women who were on extended leave at the time of the spill relevant to their grade during August, September, October or November 1993 for reasons connected with child birth or child care." Again, I am content to accept the view which the parties have expressed on this matter. However, I should emphasise that it is important in representative cases that the determination makes it clear what is the conduct which is said to have amounted to unlawful discrimination and what is the class of persons who are said to have been affected by such unlawful discrimination. In the present case, the form of the decision suggests that all the members of the nominated class had an entitlement to compensation for loss and damage suffered. No limitation on the class was expressed, as it could have been by an express statement in accordance with s 82. It is difficult to see how all the members of the defined class could have been the subject of discrimination or at least of all the alleged discrimination. Take what has been called the "position requirement". This required an employee who wished to apply for one of the new positions in the Bank to be able to take up the position within four weeks. One can see that this requirement would have disadvantaged women who wished to take up active employment within two or three months but who, because of child care responsibilities, could not do so within four weeks. But the condition surely did not affect women who were on long leave and did not have any present intention of resuming work. Similarly, some women may have been disadvantaged by the "retrenchment requirement" because they would have preferred their employment to be put at risk and to have had the opportunity of applying for retrenchment. But, other women may well have preferred that their employment was not at risk and that they be able to return to work in the future if they chose to do so. This point I am discussing does not go merely to damages; it goes to the nature of the inquiry which the Commission must undertake and to the nature of the findings to be made. These findings must relate unlawful discrimination to a described class of persons who are the subject of such discrimination. To find liability, the Commission is bound to describe the discriminating conduct and to describe the persons affected by the unlawful discrimination. Once that is done, the assessment of damages in respect of each person who is the subject of the unlawful discrimination is a further step to be taken after inquiry. Presumably, all the members of the class were disadvantaged by the reorganisation which occurred. All positions in the retail Bank were reclassified and the number of positions was reduced by 25 per cent. Therefore, there was less movement in the workforce. Some members of the class gave evidence of difficulties encountered in obtaining a suitable position on return to work. Witnesses said that they were put on lower duties pending a suitable vacancy. One of the members of the class was so dissatisfied that she ultimately sought and was granted retrenchment. These problems were the result of the reorganisation. However, it was the "position requirement" and the "retrenchment requirement" in particular which were the subject of the complaint. Thus, the finding of liability should, in accordance with s 82 of the Act, by an appropriate description, have limited the operation of the determination to those women who were affected by the discriminatory conditions. As the decision of the Commission is presently expressed, all the members of the defined class have an entitlement to damages in respect of both the "position requirement" and the "retrenchment requirement". If a lump sum payment of damages is agreed with the Bank, that sum is likely to be divided amongst all the members of the class. Yet, as I have said, it is difficult to conceive that all the members of the class could have been the subject of unlawful discrimination by reason of both the "position requirement" and the "retrenchment requirement" and perhaps some class members were not affected by either. Unlawful Discrimination Section 5(2) of the Act provided at the relevant time: "For the purposes of this Act, a person (in this subsection referred to as the "discriminator") discriminates against another person (in this subsection referred to as the "aggrieved person") on the ground of the sex of the aggrieved person if the discriminator requires the aggrieved person to comply with a requirement or condition: (a) with which a substantially higher proportion of persons of the opposite sex to the aggrieved person comply or are able to comply; (b) which is not reasonable having regard to the circumstances of the case; and (c) with which the aggrieved person does not or is not able to comply." This provision has now been replaced by a new s 5(2) and a new s 7B. For present purposes, it is sufficient to note that there has been a change from the words "not reasonable" in the earlier s 5(2) to the word "reasonable" in the present s 7B. This has effected at least a change in emphasis. Previously, the Commission had to be satisfied that the conduct complained of was "not reasonable". Now, it must be satisfied that the conduct complained of is "reasonable". Sometimes this change has been expressed as a change in the onus of proof. It is unnecessary for me to consider whether the changes have had a wider effect. The word "reasonable" is a word of ordinary parlance, and in the context of s 5(2) it means what it says. I do not propose to use other words to convey the meaning of the term, for to do so would be to substitute for the language which Parliament has used terms which Parliament has not used. Often, to explain their reasoning, judges have recourse to other words to explain what they have in mind or to refer to factors which they have taken into account. But to adopt any such words or to use any such factors as a means of defining the word "reasonable" in other cases is likely to lead a decision-maker into error. The interpretation of s 5(2) was settled by the judgment in Waters v Public Transport Corporation (1991) 173 CLR 349. A majority of the Court, Brennan, Deane, Dawson, Toohey and McHugh JJ, held that the words "not reasonable" were not to be given a special definition by reason of the context in which they appeared but meant "not reasonable in all the circumstances". Mason CJ and Gaudron J, when speaking of an analogous provision, s 17(5)(c) of the Equal Opportunity Act 1984(Vic), expressed that view as follows, at 365: "Once the strict view of s 17(5)(c) of the Act is rejected, "reasonable" in that paragraph must mean reasonable in all the circumstances. If "reasonable" is not limited by the concept of "discrimination", there is nothing else in the Act to limit the considerations to be taken into account in reaching a decision on that issue. In particular, and for the reasons given by Dawson and Toohey JJ, those considerations are not limited by s 29(2) of the Act." One of the factors to be taken into account will be, as Bowen CJ and Gummow J said in Secretary, Department of Foreign Affairs and Trade v Styles (1989) 23 FCR 251 at 263, "the nature and extent of the discriminatory effect". Another factor is, as Brennan J said in Waters at 379, that "it is necessary to consider whether performance or completion might reasonably have been achieved without imposing so discriminatory a requirement or condition". These are relevant factors. However, the term "reasonable" carries its meaning in ordinary parlance and the reasonableness of a requirement or condition is to be addressed having regard to all the circumstances of the case. In the present case, where the challenged action was an action taken in a commercial context involving the reorganisation of the entire staffing of the retail bank of the Commonwealth Bank of Australia, and where the steps taken were not in terms discriminatory or intended to be discriminatory of women, the words of Brennan J in Waters v Public Transport Corporation (1991) 173 CLR 349 at 378 are apposite: "It is not possible to determine reasonableness in the abstract; it must be determined by reference to the activity or transaction in which the putative discriminator is engaged. Provided the purpose of the activity or transaction is not to discriminate on impermissible grounds, the reasonableness of a requirement or condition depends on whether it is reasonable to impose the requirement or condition in order to perform the activity or complete the transaction. There are two aspects to this criterion of reasonableness: first, whether the imposition of the condition is appropriate and adapted to the performance of the activity or the completion of the transaction; second, whether the activity could be performed or the transaction completed without imposing a requirement or condition that is discriminatory (that is, one to which pars (a) and (b) of s 17(5) would apply) or that is as discriminatory as the requirement or condition imposed. These are questions of fact and degree. Effectiveness, efficiency and convenience in performing the activity or completing the transaction and the cost of not imposing the discriminatory requirement or condition or of substituting another requirement or condition are relevant factors in considering what is reasonable." As his Honour said, effectiveness, efficiency and convenience are relevant factors. The reasonableness of the action taken must be considered having regard, inter alia, to its commercial context and to what was sought to be achieved. The Decision of the Commission What is missing from the decision of the Commission is an explanation as to why the requirements laid down by the CBA were not, in the circumstances of the case, reasonable. Take the requirement that an employee applying for a new position must be prepared to take up that position within four weeks. This requirement was imposed because, in the retail bank, there was a complete spill of positions, new positions were advertised and the Bank wished those positions to be filled as soon as was practical so that the least disruption would occur to the work of the Bank and the least inconvenience would be suffered by the Bank's customers. The case put on behalf of the representative class was that an element of discretion could have been retained to satisfy those women who were not at the time in a position to take up employment but wished to do so at some unstated, presumably reasonable, time in the future. That of course was a factor to be taken into account. However, a standard four weeks rule applying to all could have been fair and reasonable because it was consistent. The introduction of a discretion could have introduced an element of inconsistency, arbitrariness or unfairness into what occurred. I do not seek to say that the four weeks requirement was "reasonable". It is not for this Court to decide such a question. But what I find absent from the reasoning of the Commission is any significant discussion of why the condition which the bank adopted was "not reasonable". The Commission appears to have dealt with the matter upon the footing that, as there were proportionately more women on long leave than men, then the proportion of women who could comply with the condition was less than the proportion of men who could do so. Therefore, there was discrimination. As an alternative was possible, therefore the four weeks condition was "not reasonable". However to treat the matter in that way was to fail to look at all the circumstances of the case and to determine whether, in the circumstances, having regard to what the bank sought to do and the commercial imperatives of doing it efficiently and fairly to all, it could be said that the four weeks condition was "not reasonable". Similarly, the Commission did not discuss the substance of the issue with respect to the retrenchment requirement, which was formulated as follows at 77,235: "In order to express interest in retrenchment, a person must occupy a position in the retail Bank." This condition meant no more than that, for an employee to express a willingness to take a retrenchment package, the employee must be one of the Bank's employees whose position was at risk of retrenchment. The positions of all employees holding a position in the retail Bank were at risk. The Bank had indicated that it wished to reduce the number of these employees by 25 per cent but that it preferred to do this by way of retirement and voluntary redundancies if that could be achieved. Notwithstanding that the employees in the retail Bank were asked to express interest in retrenchment and, in the result, the Bank did not have to impose retrenchment on any employees who did not express such interest, the substance of what was done was that those employees who were retrenched were dismissed from office for redundancy and were paid the agreed compensation package accordingly. Thus, the payments made under the scheme amounted to eligible termination payments "made in relation to a taxpayer in consequence of the dismissal of the taxpayer from any employment ... by reason of the bona fide redundancy of the taxpayer", within the provisions of s 27F of the Income Assessment Act 1936 (Cth), which provided for concessional tax treatment of certain termination payments. The nature of the retrenchment payments was that they were payments by way of compensation for dismissal from employment. See State Electricity Commission of Victoria v Casey [1994] 2 VR 216 at 227-8. The women in the representative class were not entitled to express interest in retrenchment for none of the employees on long leave held a position in the retail Bank. The positions of staff proceeding on long leave, or "career break" as it was called, were declared vacant when they went on leave. Therefore, an issue for the Commission was whether it was unreasonable to exclude the employees on long leave including the women in the representative class from the risks and benefits of dismissal. The Commission gave no reasons as to why it was unreasonable for the Bank not to seek to retrench the long leave employees. The Commission wrote a considerable amount about this topic but failed to deal with what I think was the crux of the matter. The Commission concluded at 77,251: "The evidence led by the Union on the nature and extent of the disadvantage experienced by the Class A women - no opportunity to receive a retrenchment package nor to leave the Bank in advantageous circumstances - was not outweighed by the reasons advanced by the Bank to explain the decision to impose the requirement in the first place. It follows that we find, having regard to the circumstances of the case, that the retrenchment requirement was not reasonable." That conclusion puts the point that some of the women on long leave would have preferred to be made redundant. That does not, in itself, explain why it was unreasonable for the Bank not to put the employment of the employees on long leave at risk or not to offer a retrenchment package to those it did not wish to retrench. One way of looking at the facts is, of course, that the reorganisation which occurred, the spill of positions, the dismissal of 25 per cent of the employees at the Bank and the appointment of the remaining 75 per cent of the Bank's employees to new positions, was a reorganisation which had no direct effect upon the employees on long leave, including the members of the class, for they did not hold any of the positions which were abolished and their rights to return to work were maintained. Another point which was not discussed by the Commission was that it could have been considered to have been unfair to the women on maternity leave and the women who had sought leave because they were looking after children if their employment had been put at risk in the reorganisation. In particular, maternity leave is a benefit which employers are expected to grant. Many people could think it reasonable, indeed proper, that women on maternity leave and those women who were on leave by reason of caring for children should be protected from the effects of the reorganisation and have their existing rights to return to work maintained in accordance with the relevant award and the provisions of the Bank's "career break" scheme. I do not state these matters as findings of fact. The facts are for the Commission. However the point I make is that the Commission erred in its understanding of s 5(2) because it did not discuss the reasonableness of the challenged conditions in the light of the factors which I have mentioned and other factors of a like nature. A reading of the Commission's decision suggests that, once there was a finding based on a mathematical calculation that women were treated disproportionately to men, that finding led inexorably to the ultimate finding of liability. Yet, an essential element of s 5(2) was the requirement that the condition be "not reasonable" in the circumstances. I infer from the Commission's reasons for decision that the Commission misinterpreted this provision and thereby erred in law. The Commission's decision in the present case is reflective of Commission's reasoning in the decisions the subject of the Dopking litigation. After two decisions of this Court had remitted the matter back to the Commission for reconsideration, the Court (Lockhart, Sheppard and Lindgren JJ), in Commonwealth of Australia v Human Rights and Equal Opportunity Commission (1995) 63 FCR 74, criticised the Commission's approach to the question of reasonableness and set aside the Commission's decision without remitting the matter. Their Honours held that, in the circumstances of the case, it was impermissible for the Commission to have found that the condition the subject of the challenge was unreasonable. Thus, at 82-3, Lockhart J said: "Application of this test in the present matter, according to s 6(2) of the Act, required the Commission, first, to examine the reasons in favour of the condition, and secondly, to weigh those reasons against the nature and extent of the discriminatory effect of the condition. The conclusion of discrimination within s 6(2) of the Act can be reached only where the Commission determines that, in all the circumstances, the difference of treatment between members without a family and members with a family is not reasonable. An examination of the Commission's reasons shows that, essentially, the Commission was of the view that the condition did discriminate between members of the Defence Force with a family and those without a family, and therefore, that it was unreasonable. I accept the argument of counsel for the Commonwealth that the Commission's reasoning was based on the presumption that any difference of treatment between a member of the Australian Defence Force with a family and a member without a family was prima facie discriminatory, and therefore unreasonable, irrespective of any material differences in the needs and circumstances of each category of member" In the present case, an analogous error of approach can be inferred from the Commission's general course of reasoning and was made explicit by points which were stated by the Commission (at 77,242 - 77,243) to be "principles on reasonableness": "(1) Human rights and discrimination legislation ought to be liberally construed. (2) The meaning of reasonableness in general terms should be informed by the objects and purposes of the Act, while the consideration of reasonableness in any given situation should include an assessment of whether a respondent's conduct was logical and understandable. We recognise that, in accordance with the guidance provided by Sheppard J in Dopking, this principle must be applied so as not to skew our objective assessment of reasonableness. (3) There should be a demonstrated nexus between the requirement or condition and the activity to be performed. (4) The requirement or condition should be appropriate and adapted to the activity in question and further, it may be that an alternative requirement or condition could have avoided or ameliorated the disadvantage experienced by the complainant. (5) The Styles balancing test applies, and so all the relevant factors and circumstances must be weighed including factors favouring the respondent. These may, depending on the context, include financial considerations, alternative approaches, industrial relations, commercial competitors, occupational health and safety requirements, efficiency and the like. (6) Reasonableness is a question of fact." As to points (1) and (2), I have already said that the words "not reasonable" are words of ordinary parlance and should be given that meaning in s 5(2) of the Act. It is not appropriate to consider the question of reasonableness by commencing first with a view that human rights and discrimination legislation should be liberally construed. Nor is it correct to approach the meaning of reasonableness informed by the objects and purposes of the Act. As Brennan CJ and McHugh J said in IW v City of Perth (1997) 71 ALJR 943 at 949: "Many persons think that anti-discrimination law has a long way to go. In the meantime, courts and tribunals must faithfully give effect to the text and structure of those statutes without any preconceptions as to their scope." The judgments in Waters have settled the meaning of "reasonable". Reasonableness is to be determined having regard to all the circumstances of the case, which will include, of course, the nature and existence of the discriminatory effect of the requirement or condition, and the possibility of alternative action, for they are relevant factors and part of the circumstances as also are matters of "effectiveness, efficiency and convenience". Point (4) may also misstate the test or tend to mislead. The Commission refers to the circumstance where an alternative requirement or condition could have avoided or ameliorated the disadvantage experienced by the complainant. That is certainly a factor to be taken into account. But the fact that an alternative could have been adopted does not of itself render a condition which is "appropriate and adapted to the activity in question", to use the Commission's words, unreasonable. Section 5(2) required a finding that the requirement or condition be "not reasonable". The whole of the circumstances must be examined. Moreover, the Commission did not express the test in the terms laid down in Waters, namely, reasonableness in all the circumstances. In point (5), the Commission referred to "the Styles balancing test". In my opinion, the reference to a "balancing test", of the discriminatory effect on the one hand and the other factors on the other, introduced a concept akin to that which was specifically rejected in Waters and is the crux of the error in the Tribunal's approach. In Styles, Bowen CJ and Gummow J said at 263: "The criterion is an objective one, which requires the court to weigh the nature and extent of the discriminatory effect, on the one hand, against the reasons advanced in favour of the requirement or condition on the other. All the circumstances of the case must be taken into account." This dictum can be misunderstood if the words in the final sentence are not given their full weight, as I am sure their Honours intended, and as the judgments in Waters require. If the matter were looked at by way of balancing discrimination on the one hand against the other factors on the other, as I think the Commission looked at the matter, then the issue would become whether the discrimination was reasonable, or, to put it another way, whether the other matters were sufficient to excuse the discrimination. That is not the test and it is not what Bowen CJ and Gummow J had in mind. The issue was not whether discrimination was reasonable but whether the requirements or conditions imposed by the Bank were "not reasonable". As McHugh J pointed out so forcefully in Waters at 409: "The reasonableness of the "requirement or condition" is itself part of the definition of discrimination in situations falling within s 17(5) [of the Equal Opportunity Act]." Thus, under s 5(2) as it read at the time, one does not commence with prima facie unlawful discrimination. There may be a difference in treatment or effect as between the sexes; but there will not be discrimination for the purposes of the Act unless the requirement or condition is not reasonable in the circumstances. The focus of the inquiry is therefore that stated in Waters by Brennan J at 378 in the passage I have already cited: "Provided the purpose of the activity or transaction is not to discriminate on impermissible grounds, the reasonableness of a requirement or condition depends on whether it is reasonable to impose the requirement or condition in order to perform the activity or complete the transaction." By accepting that the words "which is not reasonable having regard to the circumstances ofthe case" refer to a requirement or condition which is not "reasonable in all thecircumstances" per Deane J at 384, the Court in Waters enunciated this approach. The circumstances of the case will include, of course, the nature and extent of the discriminatory effect and the possibility of alternative action. Brennan J went on to refer to the factor: "whether the imposition of the condition is appropriate and adapted to the performance of the transaction .." The terms "appropriate and adapted" were used because, if a requirement or condition is appropriate and adapted to the function which the requirement or condition is to perform, then the requirement or condition is well on the way to being a reasonable one, although all other relevant factors, including those to which I have just referred, must be taken into account. The Commission's failure to adopt this approach led it to fail to take into account relevant factors, as Sackville J has shown. The Commission in effect followed the approach enunciated in Albemarle Paper Co v Moody (1975) 422 US 405 at 425. In Waters, Mason CJ and Gaudron J would have adopted that view. However, the majority of their Honours were of a different view. For these reasons, the decision of the Commission should be set aside for error of law. Order I agree with the orders proposed by Sackville J. I certify that this and the preceding fourteen (14) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Davies Associate: Date: 28 November 1997 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 306 of 1997 BETWEEN: COMMONWEALTH BANK OF AUSTRALIA Applicant AND: HUMAN RIGHTS AND EQUAL OPPORTUNITY COMMISSION First Respondent FINANCE SECTOR UNION Second Respondent JUDGES: DAVIES, BEAUMONT AND SACKVILLE JJ DATE: 28 november 1997 PLACE: SYDNEY REASONS FOR JUDGMENT BEAUMONT J: INTRODUCTION Having had the advantage of reading the reasons of the other members of the Court, I can express my general agreement with them. I wish to add only what follows. In my opinion, a useful analogy for present purposes may be seen in the reasoning of Gobbo J in State Electricity Commission of Victoria v Casey [1994] 2 VR 216, dealing with similar equal opportunity legislation which prohibited discrimination on the ground of status. Indirect discrimination was also prohibited in terms similar to those in s 5(2) of the Sex Discrimination Act 1984. The Commission invited applications from its eligible employees for a voluntary departure package, which included an entitlement to severance pay. Employees with workers' compensation claims were ineligible to apply. It was held, applying Waters v Public Transport Corporation (1991) 173 CLR 349, that in determining whether this requirement or condition was not reasonable within the meaning of the counterpart of s 5(2)(b), it was necessary to consider the position of the putative discriminator. It was further held, again applying Waters, that a complainant bore the onus of proving that the requirement or condition was "not reasonable". It was then held that, in assessing reasonableness, the Equal Opportunity Board erred in law: (a) in failing to take into account the nature and purpose of the package, i.e. to reduce expenditure and improve economic efficiency, which was not assisted by including in the scheme workers' compensation claimants, who were not on the factory floor and received only 20 per cent of their pay from the Commission; (b) in finding that the severance payment was a reward for past service, rather than compensation for future inconvenience and hardship, and loss of future income, to which workers' compensation claimants were not exposed; and (c) in failing to take into consideration the fact that employees on workers' compensation had a right to re-employment after rehabilitation, whilst other employees merely had a legitimate expectation of continued and uninterrupted employment subject to the risk of retrenchment. We are not, of course, concerned with sick or injured employees. But, in principle, the present position should be seen as analogous to the scheme in Casey. With respect to the nature and purpose of the scheme, Gobbo J said (at 226): "The S.E.C. was liable to pay those employees in category 3 100 per cent of the employee's weekly wage, unlike those on WorkCare who cost the S.E.C. only 20 per cent of the current weekly pay. It was therefore logical to take this into account when a major purpose of the restructuring was to achieve certain cost savings. Further, the concept of allowing an employee on WorkCare to accept a V.D.P., which included compensation for retrenchment and redundancy, in the form of severance pay and an increased superannuation payment, was inappropriate, for such employees were not exposed to threats of retrenchment or redundancy." (Category 3 employees were not subject to termination, and not receiving workers' compensation, but enjoyed a legitimate expectation of continuing employment with the Commission (see at 221).) In regard to the severance payments, his Honour said (at 228): "It was sought to distinguish the weighty industrial law evidence by saying that this related to compulsory retrenchment and that here the severance payments were part of a voluntary package. This argument cannot succeed for the discussion in the authorities is in terms which are not confined in principle to compulsory retrenchments. Moreover, voluntary packages such as the present one reflected the fact that under the award employees did not have indefinite employment but were subject to lawful retrenchment. The voluntary departure package was a muted form of retrenchment." Having noted that the Commission had an established policy of rehabilitation in respect of its employees, in particular those on workers' compensation, and that under such policy, an employee on workers' compensation had a right to re-employment, placing him or her apart from category 3 employees (who merely had a legitimate expectation to continued and uninterrupted employment), Gobbo J said (at 230): "I am unable to see how the existence of the practice and obligations of the S.E.C. as to rehabilitation, as established by unchallenged evidence, could be other than material to the issue of reasonableness, both as a separate factor and, in any event, as going to the difference between ordinary employees and those on WorkCare who were in a different category so far as related to expectation of employment. The board's conclusion was in effect that this factor was not material because it was for the respondent to choose. In my view this resulted in a failure to take a material matter into consideration." In my view, the Commission should, for similar reasons, have had regard to considerations of each of these kinds in the present case. It did not do so. Instead, the Commission sought to distinguish Casey, merely on the ground that retrenchment moneys may be a "benefit". But, in my view, Casey is a useful analogy for present purposes on the broader basis indicated; that is, as throwing light on the true nature and purpose of schemes of this character, and on the true dimensions of the statutory test of reasonableness for the purposes of s 5(2)(b). With all respect, the Commission did not properly address these legal questions (see e.g., Sinclair v Mining Warden at Maryborough (1975) 132 CLR 473 at 480, 483). I agree with the orders proposed. I certify that this and the preceding two (2) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Beaumont Associate: Dated: 28 November 1997 IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NG 306 of 1997 BETWEEN: COMMONWEALTH BANK OF AUSTRALIA AppLICANT AND: HUMAN RIGHTS AND EQUAL OPPORTUNITY COMMISSION FIRST Respondent FINANCE SECTOR UNION SECOND RESPONDENT JUDGES: DAVIES, BEAUMONT AND SACKVILLE JJ. DATE: 28 november, 1997 PLACE: SYDNEY REASONS FOR JUDGMENT SACKVILLE J: BACKGROUND The Proceedings This is an application under the Administrative Decisions (Judicial Review) Act 1977 (Cth) ("ADJR Act") to review a decision made by the first respondent ("the Commission") on 21 March 1997. (The Commission's decision is now reported: Finance Sector Union v Commonwealth Bank of Australia (1997) EOC 92-889.) In that decision, the Commission found that a complaint against the present applicant ("the Bank"), concerning what it described as indirect sex discrimination contrary to s 5(2) of the Sex Discrimination Act 1984 (Cth) ("SD Act"), had been substantiated. The Commission dismissed a further complaint against the Bank of "direct pregnancy discrimination pursuant to s 6 of the [SD Act]". There is no application to review the dismissal of the complaint of direct pregnancy discrimination. The complaint determined by the Commission was brought by the second respondent to the present application ("the FSU"), which is a national trade union. The complaint was a representative one, brought on behalf of a group of over one hundred of the FSU's members and former members, all of whom were employees or former employees of the Bank in Western Australia. The group comprised women who were on extended leave from the Bank during the period August to November 1993, for reasons connected with child birth or child care. (This group was referred to by the Commission as the "Class A women" and I shall adopt the same description). All of the Class A women were employed in the retail section of the Bank, a section comprising mainly the branches serving customers directly. The complaint asserted that the Bank had failed to grant the Class A women the same opportunity to express interest in voluntary retrenchment as was available to other employees in the retail Bank and that this amounted to indirect discrimination on the ground of sex. It also asserted that, while the Class A women had been permitted to apply for positions which became available by reason of a major restructure of the Bank's retail operations in Western Australia, they had been subjected to disadvantageous conditions. This, too, was said to constitute indirect discrimination on the ground of sex. The Commission's hearing occupied twenty-eight sitting days, held over the period May to December 1995, and it received the last written submissions from the parties in December 1996. The Commission upheld both grounds of the complaint. Jurisdiction The FSU did not dispute the jurisdiction of the Court to entertain the application. In my view, the Commission made findings on matters of substance for which s 81(1)(b) of the SD Act provides, as an essential preliminary to the making of the ultimate decision. The Commission's findings constitute a "decision" to which the ADJR Act applies: Commonwealth of Australia v Human Rights and Equal Opportunity Commission (1997) EOC 92-890, at 77,258 and cases cited there. The CIP Much of the background to the FSU's complaint was not contentious, at least in this Court. In 1993, the Bank commenced the implementation in Western Australia of a major national restructure known as the "Continuous Improvement Program" ("CIP"). In substance, this involved transforming the retail section of the Bank, by dismantling the existing structure and replacing it with a new structure designed to achieve greater efficiency. Among other changes, a number of functions formerly performed by branches were transferred to central sites. The staff affected by the CIP included those employed in: · the Bank's branch network; · the parts of the State administration serving the branch network; · institutional banking; and · certain head office units. The staff not affected by the CIP included all staff on "extended leave" and all part time staff. The expression "extended leave" was defined by the Bank, for the purposes of the CIP, to mean leave for a period in excess of eight weeks. One object of the CIP was to reduce the staff of the retail Bank nationally by about 7,500, or about 25 per cent. In Western Australia, the outcome of the CIP was to reduce positions in the retail Bank from 1,740 before its implementation, to 1,215 thereafter. This was a reduction of 525 or about 30 per cent. The CIP was implemented in Western Australia during the period from August 1993 to August 1994. The process involved a number of stages, the last of which was known as the "roll-out" phase. The Commission described the roll-out this way (at 77,211): "The roll-out involved the use of a 'spill and fill' system in which all the 'old' (or spilled) positions in the retail part of the Bank were abolished and simultaneously a complete set of 'new' (or fill) positions were announced with applications sought from within the Bank's own staff. Details of the 'new' positions were provided in the Bank's internal employment journal, 'Career Moves'. The intention was that positions in the new structure would predominantly be filled 'on grade'. That is to say, the CIP was not intended as a vehicle for officers to achieve promotion, although it was theoretically open for an officer to apply for a more senior position. The reduction in the numbers of positions meant of course that fewer positions existed to be 'filled' in the 'new' retail Bank than were 'spilled' from the 'old' retail Bank." [Footnotes omitted.] Staff affected by the CIP were invited to express interest in voluntary retrenchment. The Bank wished to keep involuntary retrenchments to a minimum, in part because the Commonwealth Bank of Australia Officers Award 1990 ("the Award") required it to avoid involuntary retrenchments wherever possible. Retrenched officers received severance pay in accordance with the Commonwealth Bank of Australia Redundancy, Redeployment and Retrenchment Agreement 1990. In essence, this provided seven weeks salary for the first year of service and three weeks salary for each year of continuous service. Accordingly, a retrenched officer with ten years of service would receive a sum equivalent to thirty-four weeks' salary. In addition, he or she would receive the other entitlements available on cessation of employment, such as accrued leave and superannuation benefits. A high proportion of staff affected by the CIP in Western Australia expressed an interest in retrenchment. For example, the evidence showed that there were 1,099 so-called General Classification ("GC") positions in the retail Bank in Western Australia prior to the CIP. Of the staff occupying these positions, 529 expressed interest in retrenchment. Ultimately, 282 staff members in Western Australia were offered and accepted voluntary retrenchment under the CIP. There were no involuntary redundancies. The roll-out phase of the CIP was implemented by means of what was described by the Commission as a "cascading spill and fill". Under this process, various classifications of staff were sequentially subjected to the CIP. The executive and managerial positions were spilled first, on 27 August 1993, in order to allow the successful applicants to be involved in the selection of more junior staff. The assistant managerial positions ("AMs") were spilled on 28 September 1993 and the GCs on 5 November 1993. The bulk of the Class A women were GCs. As I have said, the Class A women were on extended leave for reasons connected with child birth or child care during the period the spills took place. Many were on maternity leave, entitlement to which was governed by the Award. A pregnant officer was entitled to a total of fifty two weeks leave in respect of each confinement, of which twelve weeks (six weeks prior to the expected birth and six weeks after the actual birth) had to be taken. The compulsory twelve weeks leave was on full pay; the balance was unpaid. The officer was entitled to take any accrued annual leave, long service leave or paid sick leave credits in lieu of or in conjunction with maternity leave. If a staff member on maternity leave wished to return to work earlier than the period of leave granted to her, she could do so only with the consent of the Bank. The Class A women not on maternity leave were (singly or in combination) on career break leave, leave without pay, or long service leave. The career break scheme was governed by the Bank's Personnel Manual. The scheme was designed to provide eligible staff with an opportunity to obtain a break from normal bank duties to care for children or other family members, or to study. The minimum period for a career break was twelve months and the maximum three years. Under the Guidelines, a request for early resumption of duties from career break leave would not usually be approved. Parental leave of up to twelve months could be taken in conjunction with a career break absence, resulting in a maximum combined absence of four years. Leave without pay was also governed by the Bank's Personnel Manual and was available for periods of up to twelve months, at the Bank's discretion, in specified circumstances, such as compassionate reasons or to facilitate extended travel by the officer concerned. Staff not affected by the CIP, including all officers on extended leave, were not entitled to express interest in retrenchment. In other words, they were not eligible to apply for voluntary retrenchment from the Bank. Officers on extended leave, like other staff not affected by the CIP, were entitled to apply for a "fill" position advertised in the Bank's in-house newsletter, Career Moves. However, they had to be prepared to comply with certain conditions, to which I shall refer later. Entitlement to Return from Extended Leave One of the Bank's principal contentions in the present proceedings was that the Commission, in making its findings, failed to take into account what the Bank claimed was a guarantee given to staff on extended leave, including the Class A women. The guarantee was said to be that, upon their return to work, they would have a job comparable to that which they held prior to going on leave. The Bank contrasted this situation with the position of employees in the retail Bank who were affected by the CIP. It was said that they faced a real threat of redundancy and unemployment by reason of implementation of the CIP. Accordingly, the special and, indeed, "preferred" status of the Class A women was a factor to be considered in determining whether or not the Bank had required the Class A women to comply with a requirement or condition that was not reasonable having regard to the circumstances of the case, as contemplated by s 5(2)(b) of the SD Act. The entitlements of Bank employees on extended leave to return to work were governed by the Award and by the Bank's Personnel Manual, the relevant portions of which were extracted or referred to by the Commission. The Commission did so in the context of rejecting a submission by the Bank (not pursued in this Court) that the exclusion of the Class A women from expressing interest in retrenchment was outside the scope of the SD Act because (according to the Bank) it had acted in "direct compliance with...an award" (SD Act, s 40(1)(e)). Return to work after maternity leave was governed by cl 32(b)(xii) of the Award: "(xii) Return to work after maternity leave (1) An officer shall confirm her intention of returning to work by notice in writing to the Bank given not less than four weeks prior to the expiration of her period of maternity leave. (2) An officer returning to duty from maternity leave shall so far as possible be returned to her former duties. If this is not practicable, she shall be placed on appropriate duties of comparable status." The Commission noted that cl 32 was "not protection against retrenchment per se". Rather it was only protection against dismissal on the grounds of pregnancy. The employer's right to retrench an employee for any other reason remained intact. This was made explicit by cl 32(b) (xi)(2): "The Bank shall not terminate the employment of an officer on the ground of her pregnancy or of her absence on maternity leave, but otherwise the rights of the Bank in relation to termination of employment are not hereby affected." Long service leave was also governed by the Award, which included the following provisions in cl 29: "(v) Except where mutually agreed, an officer shall return to his/her position on resumption from long service leave where the absence is of 130 working days or less. (vi) An officer taking in excess of 130 working days leave shall resume in his/her former position unless he/she has sought a change in duties or the Bank considers it necessary for the position to be permanently filled. In these latter circumstances an officer proceeding on leave shall be informed prior to his/her departure." Career break leave was governed by the Personnel Manual. The minimum absence of twelve months on career break leave required the position of the staff member concerned to be declared vacant (par 11.4.3.1). Retention of status was dealt with by par 11.4.3.2: "Staff proceeding on a career break will retain their pre-break status (ie specific classified status or GC level with pre-break performance positioning) upon resumption, subject to normal review procedures." Resumption of work was addressed by par 11.4.6.4: "As all positions of staff (both full- and part-time) proceeding on career break are declared vacant, staff cannot be guaranteed placement in their pre-break position on resumption. Placement will be at the discretion of Personnel Points of Reference. If a position at the appropriate classification is not immediately available, staff may be placed temporarily in an overgrade situation until a suitable vacancy arises." Resumption of duty after leave without pay was governed by par 11.8.1.5 of the Personnel Manual: "When staff members resume duty after LWOP, they will normally return to their former duties. Where this is not practicable, they will be placed on appropriate duties of comparable status." The Complaint The representative complaint was lodged by the FSU, under s 50(1)(d) of the SD Act. It was initially lodged with the Commission for Equal Opportunity (Western Australia) as agent for the Commission. The Sex Discrimination Commission unsuccessfully endeavoured to effect a settlement by means of conciliation. The complaint was then referred by the Sex Discrimination Commissioner under s 57(1)(b) of the SD Act to the Commission for inquiry. The complaint made by the FSU on behalf of the Class A women, so far as is relevant to the application for review, raised two main contentions: · that the failure of the Bank to grant the Class A women the opportunity to express interest in voluntary retrenchment during the CIP constituted "indirect" discrimination on the ground of sex, under s 5(2) of the SD Act (in its form prior to the amendments effected by the Sex Discrimination Amendment Act 1995 (Cth)) and also constituted unlawful discrimination against employees, under s 14(2) of the SD Act; and · that the conditions attached to the entitlement of Class A women to participate in the "spill and fill" process constituted indirect discrimination on the ground of sex, because many of the women could not comply with the conditions attaching to that entitlement, and also constituted unlawful discrimination against employees under s 14(2) of the SD Act. The principal complaint in relation to the spill and fill process was that an employee on extended leave who succeeded in obtaining a new position had to be available to take up duties within four weeks of the "promulgation" of the position (that is, the formal announcement of successful appointees to the "fill" positions). It was said by the FSU that most of the Class A women would be unable to comply with this requirement. The FSU claimed that the damage suffered by the Class A women included the following: · the lack of opportunity to apply for new positions resulted in loss of income and loss of opportunity to follow a career path or to choose a location in a position suitable for their family requirements; · the inability to express interest in retrenchment resulted in the loss of opportunity to gain an advantageous retrenchment package; · stress and anxiety arising from uncertainty; and · hurt, humiliation and injury to feelings arising from unlawful discrimination. The Sex Discrimination Act The objects of the SD Act are stated in s 3: "(a) to give effect to certain provisions of the Convention on the elimination of All Forms of Discrimination Against Women; and (b) to eliminate, so far as is possible, discrimination against persons on the ground of sex, marital status, pregnancy or potential pregnancy in the areas of work, accommodations, education, the provision of goods, facilities and services, the disposal of land, the activities of clubs and the administration of Commonwealth laws and programs; and (ba) ... (c) ... (d) to promote recognition and acceptance within the community of principle of the equality of men and women." Section 5 of the SD Act, prior to the 1995 amendments, was in the following form: "5(1) For the purposes of this Act, a person (in this subsection referred to as the 'discriminator') discriminates against another person (in this subsection referred to as the 'aggrieved person') on the ground of the sex of the aggrieved person if, by reason of: (a) the sex of the aggrieved person; (b) a characteristic that appertains generally to persons of the sex of the aggrieved person; or (c) a characteristic that is generally imputed to persons of the sex of the aggrieved person; the discriminator treats 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 the opposite sex. (2) For the purposes of this Act, a person (in this subsection referred to as the 'discriminator') discriminates against another person (in this subsection referred to as the 'aggrieved person') on the ground of the sex of the aggrieved person if the discriminator requires the aggrieved person to comply with a requirement or condition: (a) with which a substantially higher proportion of persons of the opposite sex to the aggrieved person comply or are able to comply; (b) which is not reasonable having regard to the circumstances of the case; and (c) with which the aggrieved person does not or is not able to comply." It is generally accepted that s 5(1) addresses what is usually described (although not in the SD Act itself) as "direct discrimination", in the sense that it is concerned with conduct involving differential treatment of men and women. Section 5(2), in both its pre-1995 and post-1995 form, addresses "indirect discrimination" in the sense of conduct which, although "facially neutral", has a disparate impact on men and women. Thus, s 5(2) covers acts or decisions made by reference to criteria and standards which are apparently non-discriminatory, but have a discriminatory effect: Australian Iron & Steel Pty Ltd v Banovic (1989) 168 CLR 165, at 175, per Deane and Gaudron JJ (dealing with similar provisions in the Anti-Discrimination Act 1977 (NSW)). Section 5(2) in its unamended form, owes a good deal to the drafting of the Sex Discrimination Act 1975 (UK), s 1(1)(b): Australian Medical Council v Wilson (1996) 68 FCR 46 (Fed Ct/FC), at 71, per Sackville J. If the terms of s 5(1) of the SD Act are satisfied, there is discrimination on the ground of the sex of the aggrieved person whether or not the treatment of the aggrieved person is reasonable, although an application can be made to the Commission for an exemption under s 44 of the SD Act. By contrast, there can be no indirect discrimination under s 5(2) of the SD Act, in its unamended form, unless (inter alia) the alleged discriminator requires the aggrieved person to comply with a requirement or condition "which is not reasonable having regard to the circumstances of the case". It seems to have been established that subss 5(1) and (2) are mutually exclusive in their operation: Waters v Public Transport Corporation (1991) 173 CLR 349, at 392-393, per Dawson and Toohey JJ, at 402, per McHugh J; AMC v Wilson, at 55, per Heerey J (with whom Black CJ agreed), at 74, per Sackville J. (This and the previous paragraph have been largely taken from my judgment in Commonwealth v Human Rights and Equal Opportunity Commission, at 77,268). Section 14(2) of the SD Act provides as follows: "14(2)It is unlawful for an employer to discriminate against an employee on the ground of the employee's sex, marital status, pregnancy or potential pregnancy: (a) in the terms or conditions of employment that the employer affords the employee; (b) by denying the employee access, or limiting the employee's access, to opportunities for promotion, transfer or training, or to any other benefits associated with employment; (c) by dismissing the employee; or (d) by subjecting the employee to any other detriment." Representative complaints are provided for in ss 50 and 69 of the SD Act: "50(1)A complaint in writing alleging that a person has done an act that is unlawful by virtue of a provision of Part II may be lodged with the Commission by: ... (d) a trade union of which a person or persons, or persons included in a class of persons, aggrieved by the act is a member or are members, on behalf of that person, those persons or persons included in that class of persons, as the case may be. (1A) In the case of a representative complaint, this section has effect subject to section 69. ... 69(1) A representative complaint may be lodged under section 50 only if: (a) the class members have complaints against the same person; and (b) all the complaints are in respect of, or arise out of, the same, similar or related circumstances; and (c) all the complaints give rise to a substantial common issue of law or fact. (2) A representative complaint under section 50 must: (a) describe or otherwise identify the class members; and (b) specify the nature of the complaints made on behalf of the class members; and (c) specify the nature of the relief sought; and (d) specify the questions of law or fact that are common to the complaints of the class members. In describing or otherwise identifying the class members, it is not necessary to name them or specify how many there are. (3) A representative complaint may be lodged without the consent of class members." See also ss 70-72 of the SD Act. The Commission's powers to make findings and a determination are specified in s 81 of the SD Act: "81(1)After holding an inquiry, the Commission may: (a) dismiss the complaint the subject of the inquiry; or (b) find the complaint substantiated and make a determination, which may include any one or more of the following: (i) a declaration that the respondent has engaged in conduct rendered unlawful by this Act and should not repeat or continue such unlawful conduct; ... (iv) a declaration that the respondent should pay to the complainant damages by way of compensation for any loss or damage suffered by reason of the conduct of the respondent; (v) a declaration that the respondent should promote the complainant; .... (2) A determination of the Commission under subsection (1) is not binding or conclusive between any of the parties to the determination. (3) The Commission may, in the making of a determination under subsection (1), state any findings of fact upon which the determination is based. ... (5) A determination by the Commission under subparagraph (1)(b)(iv) on a representative complaint: (a) may provide for payment of specified amounts or of amounts worked out in a manner specified by the Commission; and (b) if it provides for payment in accordance with paragraph (a), must make provision for the payment of the money to the complainants concerned. (6) If the Commission makes a determination under subparagraph (1)(b)(iv) on a representative complaint, the Commission may give such directions (if any) as it thinks just in relation to: (a) the manner in which a class member is to establish his or her entitlement to the payment of an amount under the determination; and (b) the manner for determining any dispute regarding the entitlement of a class member to the payment. (7) In this section: 'complainant', in relation to a representative complaint, means the class members." THE COMMISSION'S DECISION The Commission first outlined the background to the complaint and provided a general overview: at 77,210-77,215. It noted that the evidence relied on by the FSU included ten female witnesses who were said together to represent the relevant circumstances of, and effects experienced by, the Class A women. Procedural Rulings The Commission then gave a number of procedural rulings for the conduct of the inquiry. It is not necessary to recount these rulings, except to note that the Commission decided to limit the inquiry in the first instance to the question of liability. The Commission recorded that the FSU sought a determination which included a declaration that the Bank should pay the individual complainants damages for loss or damage suffered (s 81(b)(iv) of the SD Act) and a declaration that, in cases where the individual complainants were identified as having suffered loss of promotional opportunities, the Bank should promote them (s 81(b)(v)). The Commission considered that any assessment of the loss or damage suffered would require substantial additional evidence. Accordingly, it was appropriate for the Commission to confine itself to deciding whether the conduct the subject of the complaint was unlawful under the SD Act. If a determination was made that the conduct was unlawful, the Commission would then need to make directions under s 81(6) in relation to the manner in which a class member could establish her entitlement to the payment of an amount under the determination: at 77,217-77,218. Preliminary Legal Points The Commission addressed what the Bank had described as "preliminary" legal points (at 77,219-77,232). The Bank's submissions on the preliminary points were these: · the exemption provided by s 40(1)(e) of the SD Act for acts done "in direct compliance with...an award" protected the Bank's decision to exclude the Class A women from expressing interest in retrenchment; · the FSU was estopped by its conduct from complaining on behalf of its members; · the complaint was inappropriate to proceed as a representative complaint; and · retrenchment was not a "benefit" within the meaning of s 14(2)(b) of the SD Act and thus the absence of opportunity to express interest in a retrenchment package could not be "detriment" within s 14(2)(d) of the SD Act. The Commission rejected each of these contentions and the Bank has not challenged the Commission's conclusions. However, some of the findings or observations made by the Commission in the course of dealing with these contentions should be noted. In considering the estoppel issue, the Commission found that the Bank decided at the outset not to allow officers on extended leave to express interest in retrenchment because it took the view that retrenchment could only follow "position redundancy", since officers on extended leave did not occupy positions, the Bank took the view that they were unaffected by redundancy. The Commission also found that the Bank's original intention was not to allow officers on extended leave to apply for "fill" positions. However, in July 1993, the Bank changed its approach and agreed with the FSU that officers on extended leave could apply for "fill" positions. The Bank later notified the FSU that it had qualified the concession by imposing a requirement that an officer on extended leave wishing to apply for a fill position had to be available to take up duty within four weeks of promulgation of the position. This was consistent with the approach previously taken by the Bank to the filling of new positions: at 77,224. The Commission found that the FSU was unhappy about this qualification, but negotiated a compromise whereby it was agreed that the four week requirement was only to be applied "where necessary". The significance of the compromise was that, in some cases, there was likely to be a delay of some months between promulgation of a position and the commencement of operations in the relevant branch. The phrase "where necessary" was added to the Career Moves circular dispatched to all branches. However, it was not included in letters sent on 28 September 1993 and 5 November 1993 to officers on extended leave, which officially informed them of the opportunity to participate in the fill. Some of the Class A women (so the Commission found) did not apply for suitable positions because they were discouraged by the clear wording of the letters and were unaware that the Bank was prepared to be flexible where possible. The Commission took the view that responsibility for the failure to communicate rested solely with the Bank. The Commission specifically found that "the Bank did not implement the flexibility it had undertaken to observe in connection with the four week stipulation": at 77,226. On the issue of whether the complaint should properly proceed as a representative one, the Commission found that the requirements specified in s 69 of the SD Act had been satisfied. The Bank, however, submitted that the circumstances of the Class A women were too "disparate" to warrant the complaint continuing as a representative one. It was said, for example, that the ability to comply with the Bank's requirements or conditions would vary from officer to officer. The Commission rejected this contention, concluding that the ramifications of a finding of liability would not produce the difficulties addressed by the Bank. The Commission made these observations (at 77,228-77,229): "For example, regarding s 5(2)(a) and ability to comply, the responsibilities and the vicissitudes of caring for very young children (including the difficulties of obtaining child care) may sufficiently characterise all Class A women so as to lead to the conclusion that the only necessary qualification for membership of Class A is that an officer was unable, by reason of these difficulties, to comply with the requirement or condition expressed by the Bank in relation to those desirous of gaining an appointment in the new Bank as part of the CIP. With regard to the retrenchment qualification - you must occupy a position to express interest in retrenchment - if we find that it was indeed imposed, then ability to comply would be identical for the whole of Class A because none of them occupied a position at the material time." The Commission, when considering the Bank's argument that the loss of opportunity to express an interest in retrenchment was not a "detriment" within s 14(2)(d) of the SD Act, accepted that, under recognised industrial law principles, a retrenchment package is compensation for loss of future employment and not a reward for past services. The Commission nonetheless concluded (at 77,230-77,231) that voluntary retrenchment was within the scope of s 14 of the SD Act, for two reasons: "First, because it is employment related, despite being forward operating. It is retrenchment from employment and it only arises in the context of employment. Second, we find that in the circumstances the women were indeed denied a benefit. It is true that Class A women were not threatened with involuntary retrenchment and that the rights under clause 32(b)(xii) of the Award and in the personnel manual would normally confer if not a guarantee of job security, a degree of comfort to officers on extended leave. Considering the scale of the CIP however, there was not the ordinary guarantee of suitable or comparable work being available upon their return. The Bank ought to have foreseen the consequences of the CIP for women on extended leave, especially in view of the forward estimates regarding the total number of redundancies and that this was obviously going to mean that in Western Australia, significant numbers of positions were to be shed. With the commercial imperative and size of the CIP, the Bank should have foreseen that while being loyal to the Bank, some Class A women would have preferred to have the opportunity to opt for retrenchment in preference to being committed to a Bank in turmoil.... If they had been permitted to express interest in retrenchment, it would have opened up the possibility of not having to return to the Bank in unforeseeable circumstances with the probable frustration, uncertainty and lack of perceived progress in their career. There would have been the possibility of an alternative and more certain career path." The Position and Retrenchment Requirements The Commission then addressed the question of indirect discrimination. The first task was to identify any requirement or condition within the meaning of s 5(2) of the SD Act, to which the Class A women were subjected. The Commission formulated the conditions placed on Bank officers wishing to apply for fill positions in the new structure as follows (at 77,234): "All staff may express interest in positions in the new retail Bank by gaining access to the necessary information, completing the necessary application form within 2 weeks of the date of advertisement of the position, subject to their being able to take up duties within 4 weeks of the date of promulgation of the appointment." This was described by the Commission as the "position requirement". The Commission formulated the "retrenchment requirement" as follows (at 77,235): "In order to express interest in retrenchment, a person must occupy a position in the retail Bank." There was no challenge in this Court to either of these formulations. Proportion Complying The Commission turned to the question raised by s 5(2)(a) of the SD Act, namely, whether a "substantially higher proportion of [males] comply or are able to comply" with the requirements. The Commission observed that it was not only necessary to decide what "substantially higher" meant in a particular context, but to identify the numerator and denominator (that is, the "base group" or "pool") of each of the proportions. It concluded that the base group in relation to the position requirement was the whole of the Bank's staff in Western Australia, since all staff of the Bank could express interest in the new positions. The base group in relation to the retrenchment requirement was the whole of the Bank's retail staff, since only retail staff could express interest in retrenchment. The test of ability to comply was "practical ability to comply". The Commission was satisfied (at 77,238) that the "Class A women as a group were objectively unable to comply with the position requirement. This is not to say that we are satisfied that all of the Class A women were unable to comply, but we are certainly satisfied that the overwhelming majority would not have been able." On the assumption that none of the men or women on extended leave was able to comply with the position requirement, 899 out of 921 men were able to comply (97.6 percent), while 1,009 out of 1,141 women were able to comply (88.4 per cent). That is, 899 out of 921 men employed by the Bank in Western Australia were able to comply, the remaining 22 being on extended leave. Similarly, 1,009 out of 1,141 women employed by the Bank in Western Australia were able to comply, the remaining 132 being on extended leave. The proportion of men able to comply (97.6 percent) was, in the Commission's view, a substantially higher proportion than the proportion of women able to comply (88.4 per cent). In reaching this conclusion, the Commission took into account that the disparity flowed from the common characteristic shared by the Class A women, namely, their primary role in the child bearing/child care domain. In the case of the retrenchment requirement, the comparative proportions were 799/816 (97.9 per cent) for men and 962/1,088 (88.5 per cent) for women. That is, 799 of the 816 men employed in the retail Bank could comply with the requirement (17 being on extended leave), while 963 of the 1,088 women employed in the retail Bank could comply (125 being on extended leave). This amounted, in the Commission's view, to a substantially higher proportion of complying men than complying women: at 77,239. Reasonableness The Commission next turned to the issue of what it described as "reasonableness" - that is, whether the requirement with which the aggrieved person had to comply was "not reasonable having regard to the circumstances of the case" (SD Act, s 5(2)(b)). It referred to several cases addressing the question (Waters v Public Transport Corporation; Secretary, Department of Foreign Affairs and Trade v Styles (1989) 23 FCR 251; and Commonwealth v Human Rights and Equal Opportunity Commission (1995) 63 FCR 74 ("Dopking No 2")) and extracted the following principles on reasonableness (at 77,242-77,243): "(1) Human rights and discrimination legislation ought to be liberally construed. (2) The meaning of reasonableness in general terms should be informed by the objects and purposes of the [SD Act], while the consideration of reasonableness in any given situation should include an assessment of whether a respondent's conduct was logical and understandable. We recognise that, in accordance with the guidance provided by Sheppard J in Dopking, this principle must be applied so as not to skew our objective assessment of reasonableness. (3) There should be a demonstrated nexus between the requirement or condition and the activity to be performed. (4) The requirement or condition should be appropriate and adapted to the activity in question and further, it may be that an alternative requirement or condition could have avoided or ameliorated the disadvantage experienced by the complainant. (5) The Styles balancing test applies, and so all the relevant factors and circumstances must be weighed including factors favouring the respondent. These may, depending on the context, include financial considerations, alternative approaches, industrial relations, commercial competitors, occupational health and safety requirements, efficiency and the like. (6) Reasonableness is a question of fact." The Commission added that Waters suggested that, if the justification for a disputed requirement or condition is rational or understandable, that is only one factor to be considered in an assessment of reasonableness. The Commission continued (at 77,243) as follows: "We intend to use the principles we have extracted as the main guide for our application of s 5(2)(b) to the facts. We make no presumption that the requirements were not reasonable. We also acknowledge and proceed on the basis that the onus is on the [FSU] to establish that the requirements imposed were not reasonable having regard to all the circumstances of the case." The Position Requirement In relation to the position requirement, the Commission determined that it was not reasonable having regard to the circumstances of the case: at 77,248. Among the matters the Commission relied upon were these: · The Bank failed to afford the Class A women a full two weeks in which to apply for the "fill" positions, since letters were sent to them only on the day the positions were advertised in the in-house circular. If they were unable to apply within the period, they were effectively excluded. · The requirement that the Class A women be prepared to take up the position within four weeks of it being promulgated imposed a substantial disadvantage on those who had just had a child or were in the process of adjusting to the presence of a new baby. The "where necessary" concession had not been brought to the attention of the Class A women, despite the fact that the branches were scheduled to "roll-out" over a four and a half month period (28 February 1994 to 14 July 1994). A simple notification could have been sent to each of the women, advising them of the expected commencement date for operations at each branch. · The Bank's argument, to the effect that the treatment of staff on extended leave during the CIP ought to be seen in the context of the entitlements provided by the Bank (including the right to a guaranteed job on resumption of work after maternity leave or career break leave), was rejected (at 77,246): "In our opinion, this is a misconceived argument. It appears to be based on Dopking. The package of entitlements analysis has some credence where there are two categories of separate rights accorded to two separate groups. In such a case, transferring a right from one group to another may indeed be contentious. Whether or not that was the true situation in Dopking, which the Federal Court felt it was, it has no application here. We are not dealing with two distinct categories of employees. Class A women are staff members of the Bank, entitled to all the benefits of employment provided by the various relevant industrial agreements and their terms and conditions of employment. To the Bank's credit, extended leave is provided to all in the Bank. In any case, the CIP was (as we have said above) a unique endeavour and was not part of the normal operation of the Bank. Any entitlements arising from the CIP were superimposed on the package of rights and privileges, generous as they were, which were accorded to staff on extended leave." · The Commission accepted that there was a commercial imperative, as far as the Bank was concerned, in relation to the implementation of the CIP. However, the Commission did not accept that there was a commercial imperative to impose the four week requirement, a conclusion supported by the Bank's willingness in September 1993 to apply that requirement flexibly. The Commission summarised its conclusions this way (at 77,248-77,249): "The overarching context of the assessment of reasonableness is that it was not originally intended that anyone on extended leave would participate in the CIP. The [FSU] remonstrated with this, drawing the attention of the Bank, if it had not been focused before, to the possibility of discrimination caused by leaving Class A women out of the process. The Bank accepted this and agreed that Class A women could participate in the "fill". What this meant, however, was that without proper advice and without an appreciation of the significance of the equal employment opportunity concerns, the Bank changed direction in mid-stream. Unfortunately, it did so in an inefficient and inadequate manner. We should say that had the flexibility promised by the Career Moves circular been accorded and established and brought to the attention of officers on extended leave at the time when applications were called for, we would be disposed to accept that the imposition of the four weeks element of the position requirement was reasonable. We would not have expected the Bank to delay the prompt and efficient restructure by holding positions open for persons then on extended leave to return to take up a fill position at their convenience. We acknowledge that in some cases a person may have been denied an opportunity to participate fully in the CIP because of the timing of their pregnancy, post-natal complications or obtaining child care, but the importance of the CIP to the Bank would require paramount consideration. As it is, however, allowing to the fullest extent possible the considerations that weighed in favour of the Bank's approach to the CIP, we are left with the clear conviction that in the absence of the notification of the "when necessary" qualification, coupled with the persuasive effect of the lack of access to information and the consequent practical difficulty in complying with the requirement to lodge an application within two weeks, we repeat our conclusion that the position requirement was not reasonable having regard to the circumstances of the case." The Retrenchment Requirement The Commission said that, of the several reasons advanced by the Bank to explain the imposition of the retrenchment requirement, two required particular attention. The first was that it would be inconsistent with the Award for officers on extended leave to be invited to express an interest in retrenchment, if they were not occupying a position which was to be spilled. The Commission found this argument unpersuasive. It was not inconsistent with the Award for officers on extended leave to express interest in voluntary retrenchment. The CIP was extraordinary. The large downsizing and the commitment to minimising involuntary retrenchments allowed a "global approach", provided that the total number of officers accepting voluntary retrenchment did not exceed the total number of redundancies declared by the Bank in the course of the CIP. "There is no reason why the option of retrenchment could not have been extended to Class A women and officers on extended leave in general as long as the total number of officers ultimately retrenched did not exceed the total number of positions abolished." : at 77,249. The Commission considered (at 77,249) that a "crucial aspect of the CIP...was that the Bank abandoned the traditional direct linkage between redundancy and retrenchment by calling for expressions of interest even in situations where a 'fill' position comprised duties unchanged (or largely unchanged) from the 'old' Bank." Thus, for example, tellers were allowed to express interest in retrenchment notwithstanding that "at least some of those positions were in no real sense redundant". The Commission commented as follows (at 77,249-77,250): "Similarly, Class A women could have been permitted to express interest in retrenchment, particularly as its grant was in the sole control of the Bank, and thus it could ensure that the total number of retrenchments did not exceed the total number of positions abolished under the CIP." The second reason advanced by the Bank to support the retrenchment requirement was its belief that an offer of voluntary redundancy to officers on extended leave would have adverse taxation consequences for those officers. However, the Commission concluded that the Bank's concerns in this respect were misplaced. The Commission rejected other considerations relied on by the Bank. The Bank had claimed that up to 30 per cent of women taking maternity leave never returned to work at all. But without knowing which 30 per cent might not return, the Commission considered the Bank was penalising all of the Class A women. The Bank relied on an estoppel argument, but the Commission rejected the argument for the same reasons it had given earlier. Finally, the Bank contended that none of the representative witnesses would in fact have been retrenched, since they were the better performers in the relevant staff category. The Commission, however, considered this to be beside the point. The Bank's liability was to be addressed at the time the condition was imposed and it was to be considered by reference to the opportunity the Class A women had lost, rather than by reference to the ultimate outcome of any applications for retrenchment. The Commission expressed its conclusion on the reasonableness of the retrenchment requirement this way (at 77,251): "The evidence led by the [FSU] on the nature and extent of the disadvantage experienced by the Class A women - no opportunity to receive a retrenchment package nor to leave the Bank in advantageous circumstances - was not outweighed by the reasons advanced by the Bank to explain the decision to impose the requirement in the first place. It follows that we find, having regard to the circumstances of the case, that the retrenchment requirement was not reasonable." Finding on Indirect Discrimination The Commission reached the following conclusion on indirect discrimination (at 77,252): "As all three criteria for establishing discrimination as defined in s 5(2) of the [SD Act] are satisfied, we find that the Bank has discriminated against Class A employees in employment, contrary to s 14(2) of the Act. More particularly, we find that the Bank has discriminated in connection with the terms and conditions of employment of the Class A women, by denying or limiting benefits associated with employment to the Class A women and by otherwise subjecting the class a women to detriment. In other words, we find discrimination contrary to s 14(2)(a), (b) and (d) of the [SD Act]. Class A women were adversely affected by the imposition of the position requirement and the retrenchment requirement. The opportunity to obtain a position in the new structure and the opportunity to apply for voluntary retrenchment were benefits to which access for Class A women was limited and denied respectively. The Bank's conduct may also be characterised as subjecting the Class A women to a detriment. In the alternative, we are satisfied that the Bank has discriminated against the Class A women in connection with the terms and conditions of their employment with the Bank." Finally, the Commission noted that its finding was on liability only. Before it was in a position to make a determination in accordance with s 81(b), it would be necessary to hold further hearings to consider, inter alia, evidence on damages and the application of subss 81(5) and (6) of the SD Act. THE SUBMISSIONS Bank's Submissions First, the Bank submitted that the Commission erred in finding, for the purposes of s 5(2) of the SD Act, that the retrenchment requirement was not reasonable, having regard to the circumstances of the case. The Bank relied on a number of contentions to support this submission. As is often the case in proceedings under the ADJR Act, some of these contentions overlapped. The principal criticism made by Mr Sackar QC, who appeared with Mr Hilton SC for the Bank, of the Commission's approach to the unreasonableness of the retrenchment requirement was that it ignored or failed to address, "the fundamental and uncontroverted point relied on by the Bank to justify the condition, namely that each of the 'class A women' on extended leave was...upon her return from leave guaranteed a job comparable with that which she had held prior to going on leave". [Emphasis in original.] According to Mr Sackar, the Class A women had a special or preferred status which insulated them from the adverse effects of the CIP upon their future employment. Despite this fact, the Commission simply failed to address the central issue in the case, namely, whether it was unreasonable for the Bank to distinguish between employees on extended leave who did not then hold positions within the Bank that could be affected by CIP and those employees directly effected by CIP. Furthermore, the Commission had contravened well-established principles of construction applicable to s 5(2)(b) of the SD Act. The Commission had erroneously preceded on the assumption that any differences in the treatment between the Class A women and any other employees of the Bank were prima facie discriminatory and unreasonable. Its reasoning also had impermissibly reversed the onus of proof, by requiring the Bank to demonstrate that its conduct was reasonable. In effect, it had identified an alternative means whereby the aggrieved women could have their wants satisfied and asked whether the Bank had provided a satisfactory explanation for not utilising the alternative. Moreover, it had treated the subjective preferences of the Class A women as determinative of whether the impugned requirement was not reasonable, thereby failing to apply an objective test as required by Secretary, DFAT v Styles . Finally, it had failed objectively to weigh the nature and extent of the discriminatory effect of the requirement, against the reasons advanced in favour of imposing the requirement. The Bank also argued that the Commission had failed to have regard to a number of considerations relevant to the issue of whether the retrenchment requirement was not reasonable, having regard to the circumstances of the case. The Bank identified these considerations as follows: · the absence of any risk that the Class A women would be subjected to the risk of involuntary retrenchment under the CIP; · the experience suggesting that a substantial proportion of employees on extended leave would choose not to return to work at the conclusion of their leave; and · what was said to be the agreement, or at least the tacit acquiescence, of the FSU to the arrangements proposed by the Bank for employees on extended leave. Secondly, the Bank submitted that the Commission had erred in finding that a substantially larger proportion of men could comply with the retrenchment requirement than could women. The formulation of the retrenchment requirement was that "in order to express interest in retrenchment a person must hold a position in the retail Bank". Section 5(2)(a) of the SD Act required a comparison to be made between the proportion of men in the Bank in Western Australia who could comply with the requirement and the proportion of women in the Bank in Western Australia who could comply. The Commission had erroneously limited the respective base group to those employed in the retail sector of the Bank, as distinct from all those employed by the Bank in Western Australia. Had the correct base groups been applied, the proportions of men and women able to apply could not have been regarded as significantly different. Thirdly, the Bank submitted that the Commission had erred in concluding that the position requirement was not reasonable, having regard to the circumstances of the case. The arguments used to support this submission were similar to those relied on in relation to the retrenchment requirement. Mr Sackar argued that, once again, the Commission had failed to address the "fundamental" point, that it was not unreasonable to distinguish between the Class A women (and others on extended leave) and staff employed within the retail section of the Bank, because each member of the former group was guaranteed a comparable position in return from extended leave. The Commission had also impermissibly assumed that the different treatment given to staff on extended leave was prima facie discriminatory. In particular, it had assumed that, if the Bank had addressed "equal opportunity considerations", it would not have adopted the stringent four week requirement. According to Mr Sackar, this was question begging. Mr Sackar contended that the Commission had infringed principles of construction of the SD Act in its consideration of the position requirement. The principal criticisms he made were the following: · The Commission had failed to weigh objectively the nature and extent of the detriment suffered by the men and women upon whom the condition was imposed, against the reasons advanced by the Bank for imposing the position requirement. The Commission's failure (so it was argued) reflected the Commission's perception that the subjective preferences of the Class A women were wholly determinative of the issue of reasonableness. · The Commission elevated the Bank's supposed failure to communicate to the Class A women its policy of flexibility in applying the four weeks requirement, into the policy itself. The finding that there was a failure to communicate had no basis in the evidence and there was no finding made that any of the Class A women were under any misapprehension by reason of the supposed failure. Thus the Commission took into account irrelevant material. · The Commission erroneously found that, because the Bank could have acted in a different way (that is, by notifying all "new" employees of a branch of the expected date of operations of that branch), its insistence on the four week requirement was not reasonable. The alternative proposed by the Commission was economically irrational from the Bank's perspective. Fourthly, the Bank submitted that the Commission had made no finding about the ability of the Class A women to comply with the position requirement. While the Commission had said that the "overwhelming majority" of the Class A women would not have been able to comply, it approached the issue by simply assuming that no man and no women on extended leave from the retail Bank could comply with the requirement. This was said by the Commission to be the standpoint which most favoured the Bank. However, this was demonstrably not the case. The position most favourable to the Bank was that all the women could comply, but none of the men could. In the absence of the required findings, the Commission could not properly make the comparison required by s 5(2)(a) of the SD Act. FSU's Submissions The FSU submitted that the Commission's decision was immune from challenge under the ADJR Act. Ms Giles, who appeared with Mr Castiglione for the FSU, pointed out that an error of fact, of itself, does not constitute an improper use of power within s 5(1)(e) of the ADJR Act, or an error of law within s 5(1)(f). In particular, a mere error of fact (which Ms Giles did not concede had occurred) does not demonstrate that the Commission has taken into account irrelevant considerations. She argued that there was material available to support the Commission's findings. In effect, the Bank's complaints amounted simply to allegations that the Commission had reached adverse factual conclusions and did not demonstrate reviewable error. In relation to the retrenchment requirement, the FSU argued that the Commission had taken into account all relevant considerations, but had simply accorded those relied upon by the Bank less weight than the Bank considered appropriate. Ms Giles pointed out that a failure to take into account a relevant consideration is made out only if the decision-maker is bound and not merely entitled to take that consideration into account. She contended that the Commission had taken into account the entitlements of the Class A women to comparable positions at the end of their leave. Moreover, the Commission had correctly applied an objective test and had explicitly recognised that the onus remained on the FSU to demonstrate that the retrenchment requirement was not reasonable in the circumstances of the case. Ms Giles submitted that the Commission had not erred in selecting as the base groups for comparison, employees in the retail Bank. The Commission had found that the retrenchment requirement was imposed only on the retail Bank. There was ample evidence to support this finding. None of the other findings made by the Commission required it to select base groups comprising all employees of the Bank in Western Australia. On the question of the reasonableness of the position requirement, Ms Giles argued that the Commission had not elevated the Bank's perceived administrative failure to communicate its policy into the policy itself. The Commission had simply taken into account that the most important factor was the actual effect of the Bank's policies and practices. Again, the Commission had applied the correct objective test. It was permissible within such a test for Commission to consider the effect of the position requirement on the complainants. The Commission had also applied the correct onus and had engaged in the appropriate balancing exercise. The FSU further submitted that the Commission had not used a hypothetical sample for the purpose of comparing the respective proportions of women and men who were able to comply with the position requirement. Rather, the Commission had put forward two scenarios (100 per cent non-compliance by both men and women and, alternatively, 75 per cent non-compliance by both men and women) based on the evidence. It had found that objectively 100 per cent of the women on extended leave could not comply with the position requirements. The assumption that 100 per cent of the men on extended leave could not comply with same requirement was the most favourable hypothesis from the Bank's point of view. Thus the Commission had not fallen into error on this issue. REASONING The Construction of s 5(2)(b) of the SD Act A number of cases have considered the proper construction and application of s 5(2)(b) of the SD Act, or of equivalent provisions in other legislation. The principal authorities are Secretary, DFAT v Styles (a case concerning s 5 of the SD Act); Waters v PTC (concerning the Equal Opportunity Act 1984 (Vic)); Dopking (No2) (concerning s 6 of the SD Act, dealing with discrimination on the ground of marital status); and AMC v Wilson (concerning the Racial Discrimination Act 1975 (Cth)). Some propositions can be distilled from these cases. In my view, they are consistent with the beneficial approach to the construction of anti-discrimination legislation, as applied most recently in IW v City of Perth (1997) 146 ALR 696, at 702, 704, per Brennan CJ and McHugh J; at 710, per Dawson and Gaudron JJ; at 724, per Gummow J. First, the starting point in determining whether a requirement or condition is "not reasonable having regard to the circumstances of the case" are the observations of Bowen CJ and Gummow J in Styles (at 263) that: "the test of reasonableness is less demanding than one of necessity, but more demanding than a test of convenience....The criterion is an objective one, which requires the court to weigh the nature and extent of the discriminatory effect, on the one hand, against the reasons advanced in favour of the requirement or condition on the other. All the circumstances of the case must be taken into account." This passage was approved in Waters, at 395-396, per Dawson and Toohey JJ; at 383, per Deane J; compare at 365, per Mason CJ and Gaudron J. It was applied in Dopking (No2), at 82, per Lockhart J; at 86, per Sheppard J; at 96, per Lindgren J; and in AMC v Wilson, at 60, per Heerey J ( with whom Black CJ and Sackville J agreed). In Dopking (No2), at 82-83, Lockhart J said that the test "required the Commission, first, to examine the reasons in favour of the condition, and secondly, to weigh those reasons against the nature and extent of the discriminatory effect of the condition. The conclusion of discrimination within s 6(2) of the [SD] Act can be valid only when the Commission determines that, in all the circumstances, the difference of treatment between members without a family and members with a family is not reasonable." Since the test is objective, the subjective preferences of the aggrieved persons cannot be determinative of the reasonableness of the impugned condition requirement. Subjective preferences "may be relevant in determining the reasonableness of the alleged discriminatory conduct; but ultimately, the test must be an objective one, applied by the Commission after considering all the material facts." Dopking (No 2), at 83, per Lockhart J. Secondly, the non-reasonableness of the requirement or condition is itself part of the definition of discrimination in s 5(2). Thus s 5(2)(b) is to be applied according to its terms and is not to be influenced by any concept of discrimination existing outside the statutory definition: Waters v PTC, at 409-410, per McHugh J; see also at 378, per Brennan J; at 394-396, per Dawson and Toohey JJ; at 383-384, per Deane J; at 365, per Mason CJ and Gaudron J; Dopking (No2), at 96, per Lindgren J. As Brennan CJ and McHugh J observed in IW v City of Perth, at 702, many anti-discrimination statutes define discrimination and the activities which cannot be the subject of discrimination "in a rigid and often highly complex and artificial manner. As a result, conduct that would be regarded as discriminatory in its ordinary meaning may fall outside the [Equal Opportunity Act 1984 (WA)]. The object referred to in s 3(a) of the Act must, therefore, be understood by reference to the definitions of discrimination which occur in various parts of the Act".[Citations omitted.] Thirdly, it would be erroneous for the Commission to assume that any difference of treatment between the complainants and (in this case) other employees of the Bank is prima facie discriminatory and therefore unreasonable: Dopking (No 2), at 82-83, per Lockhart J. The complainants bear the onus of establishing that the condition or requirement is not reasonable in the circumstances of the case: Waters v PTC, at 411, per McHugh J, Dopking (No2), at 83, per Lockhart J; Dopking (No 2), at 96, per Lindgren J; AMC v Wilson, at 62, per Heerey J. Fourthly, reasonableness (or non-reasonableness), for the purposes of s 5(2)(b) of the SD Act, is a question of fact for the Commission to determine, but it can only do so by weighing all relevant factors. What is relevant differs from case to case, but will, usually at least, include the financial or economic circumstances of the alleged discriminator, including its ability to accommodate the needs of the aggrieved persons. It may also be relevant to consider the availability of alternative approaches which would achieve the objectives of the alleged discriminator, but "in a less discriminatory way": Waters v PTC, at 394-395, per Dawson and Toohey JJ; and see at 383-384, per Deane J; at 410, per McHugh J. As Brennan J pointed out in Waters v PTC (at 378), reasonableness cannot be determined in the abstract: "[I]t must be determined by reference to the activity or transaction in which the putative discriminator is engaged. Provided the purpose of the activity or transaction is not to discriminate on impermissible grounds, the reasonableness of a requirement or condition depends on whether it is reasonable to impose the requirement or condition in order to perform the activity or complete the transaction. There are two aspects to this criterion of reasonableness: first, whether the imposition of the condition is appropriate and adapted to the performance of the activity or the completion of the transaction; second, whether the activity could be performed or the transaction completed without imposing a requirement or condition that is discriminatory (that is, one to which pars (a) and (b) of s 17(5) [equivalent to s 5(2)(a) and (c) of the SD Act, respectively] would apply) or that is as discriminatory as the requirement or condition imposed. These are questions of fact and degree. Effectiveness, efficiency and convenience in performing the activity or completing the transaction and the cost of not imposing the discriminatory requirement or condition or of substituting another requirement or condition are relevant factors in considering what is reasonable." Fifthly, the role of the Commission is not to determine whether the decision to impose the condition or requirement was the "correct" one. The point was put this way by Heerey J in AMC v Wilson (at 61-62), adopting a passage in the judgment of Sheppard J in Dopking (No2): "'reasonable' in this context speaks of a term, condition or requirement that is dictated by reason and rationality - not necessarily in which all people or even most people agree. In Dopking Sheppard J emphasised what is in my respectful opinion an important aspect of reasonableness in an indirect discrimination context. The case was concerned with a complaint by Mr Dopking that a Defence Department determination that a benefit for the reimbursement of legal and other costs in connection with the acquisition of off-base accommodation by armed services personnel discriminated against him because it was restricted to personnel with families. Mr Dopking, being single, was entitled to full board in barracks but wished to live in his own home. Sheppard J said (at 87): 'The basis for the discrimination which results from [the determination's] application only to married members is, in the circumstances of the case, within the bounds of objective reasonableness. In other words, the point of distinction which has been adopted has a logical and understandable basis. There may have been other ways of approaching the problem; views may differ about the matter. But, in my opinion, there was nothing unreasonable in adopting the point of distinction applied by those responsible for the determination. With respect, I do not consider any other view to be open. I am thus unable to see how it can be said that the adoption of the policy to which the determination gives effect is unreasonable having regard to the relevant circumstances.'" It may be that the passage cited from the judgment of Sheppard J in Dopking (No2) somewhat overstates the position. The fact that a distinction has a "logical and understandable basis" will not always be sufficient to ensure that a condition or requirement is objectively reasonable. The presence of a logical and understandable basis is a factor - perhaps a very important factor - in determining the reasonableness or otherwise of a particular condition or requirement. But it is still necessary to take account of both the nature and extent of the discriminatory effect of the condition or requirement (in the sense in which the authorities interpret that concept) and the reasons advanced in its favour. A decision may be logical and understandable by reference to the assumptions upon which it is based. But those assumptions may overlook or discount the discriminatory impact of the decision. Depending on the circumstances, such a decision might be legitimately characterised as not reasonable, having regard to the circumstances of the case, within the meaning of s 5(2)(b) of the SD Act. I do not understand Heerey J to have intended to express a different view in AMC v Wilson. However, in my respectful view, Sheppard J's judgment correctly emphasises that the question is not simply whether the alleged discriminator could have made a "better" or more informed decision. The issue is that posed by the legislation, namely, whether the requirement is not reasonable having regard to the circumstances of the case. Failure to Take Into Account Relevant Considerations: The Retrenchment Requirement It is convenient to consider first the contention which Mr Sackar placed at the forefront of the Bank's submissions. This was that the Commission had failed to take into account, when determining that the retrenchment requirement was not reasonable in the circumstances of the case, the fact that each of the Class A women was guaranteed a comparable job on her return from extended leave. I shall use the word "guarantee" in describing the entitlements of the Class A women although, as I have already pointed out, the Commission made some findings about the nature of those entitlements. I have summarised earlier in this judgment the Commission's reasons for deciding that the retrenchment requirement was not reasonable in the circumstances of the case. The Commission specifically considered a number of contentions put forward by the Bank to support the retrenchment requirement. In particular, it analysed the Bank's claim that it would have been inconsistent with the Award for the Bank to have invited officers on extended leave to express an interest in retrenchment, given that they were not occupying a position which was to be spilled. But the Commission did not explain, in relation to the retrenchment requirement, whether it considered that the guarantee of comparable employment to staff on extended leave was relevant to the question posed by s 5(2)(b) of the SD Act and, if so, what weight should be attributed to the guarantee in resolving that question. It is, of course, necessary to give the Commission's reasons a beneficial construction, in accordance with the principles stated in Minister for Immigration and Ethnic Affairs v Wu Shan Liang (1996) 185 CLR 259, at 271-272, per Brennan CJ, Toohey, McHugh and Gummow JJ. It is also necessary to bear in mind that the Commission, in its reasons, did not ignore the right of staff on extended leave to return to work. As has been seen, the Commission reproduced the terms of cl 32(b)(xii) of the Award, governing return from maternity leave, and noted that the Award did not protect women on maternity leave from dismissal on grounds other than pregnancy. The Commission considered the terms of the Award and of the Personnel Manual when discussing whether the Bank's exclusion of the Class A women from expressing interest in retrenchment was beyond the reach of the SD Act by reason of s 40(1)(e) ("direct compliance with...an award"). Elsewhere in its reasons, the Commission accepted that the Class A women were not threatened with involuntary retrenchment by reason of the CIP and that the Award and Personnel Manual would "normally confer if not a guarantee of job security, a degree of comfort to officers on extended leave": at 77,230. However, the Commission went on to say that, "[c]onsidering the scale of the CIP...there was not the ordinary guarantee of suitable or comparable work being available on their return": ibid. It also remarked that the Bank should have foreseen that some Class A women would have preferred to opt for retrenchment, rather than remain with a Bank "in turmoil". These remarks were made in the course of considering whether retrenchment could be regarded as a "benefit" for the purposes of s 14(2) of the SD Act. Despite these references to the guarantee in its detailed reasons, the Commission did not mention the guarantee when considering the reasonableness of the retrenchment requirement. Indeed it was not a matter identified by the Commission as among those relied upon by the Bank to support the retrenchment requirement. There is nothing in the Commission's reasons to indicate that it took the guarantee into to account in undertaking the inquiry required by s 5(2)(b) of the SD Act or, if it did, why it considered that the guarantee (along with the other factors relied on by the Bank) was insufficient to outweigh any discriminatory effect the retrenchment requirement may have had. Yet there was no dispute in this Court that the Bank had relied on the guarantee as one of its principal arguments before the Commission to justify the reasonableness of the retrenchment requirement. It may be accepted, as Ms Giles submitted and emphasised in her submission in reply, that there was evidence to support the Commission's finding that, in view of the scale of CIP, the Class A women did not have the ordinary guarantee of suitable or comparable work on their return from extended leave. But the Commission gave no indication that it regarded this finding as significant in relation to reasonableness of the retrenchment requirement or, if it did, what weight the finding carried. In my view, the Commission's reasons, no matter how beneficially construed, cannot be read as indicating that the Commission took into account the guarantee relied on by the Bank to support the reasonableness of the retrenchment requirement, when conducting the inquiry required by s 5(2)(d) of the SD Act. It is clearly correct, as Ms Giles submitted, that the ground of review based on failure to take into account a relevant consideration is made out only if the decision-maker was bound to take the consideration into account: Minister for Aboriginal Affairs v Peko-Wallsend Ltd (1986) 162 CLR 24, at 39, per Mason J. The factors that a decision-maker is bound to consider are determined by the construction of the statute conferring the discretion: ibid. In my view, however, the authorities concerning the construction of the SD Act, to which I have already referred, demonstrate that the Commission is bound by s 5(2)(b) to consider the grounds relied on by the alleged discriminator to support the reasonableness of the impugned condition or requirement. The observations in Styles, Waters and Dopking (No2) make it clear that these grounds must be taken into account. To the same effect are the observations of Gobbo J in State Electricity Commission v Casey [1994] 2 VR 216, at 226, 230. This is not to say that a failure by the Commission in a particular case to refer expressly to every ground relied on by an alleged discriminator will necessarily amount to a failure to take a relevant consideration into account. It may be, for example, that the factor is insignificant (Peko-Wallsend, at 40), or that the decision-maker's reasons, read as a whole, show that the factor was taken into account, notwithstanding that it was not expressly referred to. However, in this case, the guarantee was clearly central to the Bank's case that the retrenchment requirement was not unreasonable. It was not considered by the Commission in relation to that issue. It follows that there was a failure by the Commission to take a relevant consideration into account. Failure to Take Into Account Relevant Considerations: The Position Requirement In considering the reasonableness of the position requirement, the Commission expressly adverted to the Bank's reliance in the guarantee of a comparable job available to staff on extended leave. However, the Commission described the Bank's contentions (which it said was apparently based on Dopking (No2)) as "misconceived". While the "package of entitlements analysis" (as the Commission described it) had credence where there were two categories of separate rights accorded to two separate groups, the Commission considered that this was not a case where there were two distinct categories of employees. It must be said that, with respect, the Commission's reasoning on this issue is not easy to follow. As the Commission itself said in its reasons, reasonableness is a question of fact and requires all relevant circumstances to be taken into account, including those relied on by the alleged discriminator. It is true that the judgments in Dopking (No2) contain some general statements of principle. The decision made by the Full Court, however, was that the Commonwealth's determination, whereby it declined to provide Mr Dopking (as a member of the Australian Defence Force without a family) with a subsidy for the acquisition of an off-base home, was not unreasonable in the circumstances of that case. That decision rested on the particular circumstances, including the reasons advanced by the Commonwealth to justify providing a subsidy to members with a family but to withhold it from members without a family. The Bank's entitlement to rely on the guarantee available to staff on extended leave was not dependent on the factual circumstances in Dopking (No2) being relevantly indistinguishable from those of this case. The Commission was bound to consider the guarantee, not because of the particular decision in Dopking (No2), but because s 5(2)(b), properly construed, requires the Commission to take into account the considerations put forward by the alleged discriminator to support an impugned condition or requirement. It was not open to the Commission to disregard the guarantee simply because it took the view (whether rightly or wrongly) that the case did not involve entitlements for two distinct categories of employees. The Bank sought to justify the position requirement on the ground (among others) that it was not unreasonable to apply to the Class A women a stringent requirement that all employees in the retail section be available to commence duties within four weeks of promulgation of the appointment, having regard to the entitlement of those women to a comparable job on their return from extended leave. It is true that, as Ms Giles pointed out, even if the Commission had taken the guarantee into account, it still might ultimately have rejected the Bank's contention. But this does not alter the fact that the Commission's approach precluded it from taking into account a material consideration when assessing the reasonableness of the position requirement. I have not overlooked the additional comment made by the Commission, to the effect that, in any event, the CIP was a unique endeavour and that any entitlements arising from the CIP were superimposed on the package of rights available to staff on extended leave. Ms Giles submitted that this additional comment shows that the Commission took into account the guarantee. However, she was unable to explain what the Commission meant by the observation, or how it demonstrated that the guarantee had been considered the weighing process required by s 5(2)(b). In my view, the Commission failed to take into account a relevant consideration when it decided that the position requirement was not reasonable in the circumstances of the case. Application of s 5(2)(b) of the SD Act In view of the conclusions I have already reached, it is not necessary to consider whether the Commission failed to give effect to the established construction of s 5(2)(b) of the SD Act. However, since certain of the criticisms made by Mr Sackar have considerable force, it is appropriate to comment briefly on some of the construction issues. The second of the six "principles of reasonableness" stated by the Commission included the following (at 77,242): "[T]he meaning of reasonableness in general terms should be informed by the objects and purposes of the [SD Act], while the consideration of reasonableness in any given situation should include an assessment of whether a respondent's conduct was logical and understandable". This passage does not identify the "objects and purposes" by reference to which the meaning of reasonableness is to be informed. Mr Sackar criticised the passage, in part, because it failed to recognise that a finding that a respondent's conduct was logical and understandable must mean that the conduct was not unreasonable, for the purposes of s 5(2)(b) of the SD Act. For the reasons I have already given, I do not think that a finding that an impugned requirement is "logical and understandable" necessarily means that the requirement was not unreasonable in the circumstances of the case. A finding to that effect may be a very important consideration to take into account, but it is not necessarily conclusive. Nonetheless, the second principle identified by the Commission appears to contemplate that the question of reasonableness (or unreasonableness) should be assessed by reference to general objects and purposes of the legislation going beyond the statutory definition of "discrimination". It follows from the observations of Brennan CJ and McHugh J in IW v Perth, which I quoted earlier, that the objects of the SD Act, insofar as they are framed in terms of "discrimination", must be understood by reference to that term as used in the legislation. It is erroneous to approach the issue of reasonableness under s 5(2)(b) of the SD Act by assuming that the meaning of that term should be "informed" by a broader concept of discrimination than that embodied in the SD Act itself. There is nothing in the Commission's reasons to indicate that it appreciated the distinction pointed out by Brennan CJ and McHugh J (whose judgment, of course, post-dates the Commission's decision, but reflects earlier judicial observations). Indeed, there are aspects of the Commission's reasoning which suggest that it did not. For example, the Commission found that the Bank's implementation of the CIP had placed officers on extended leave at a disadvantage, by requiring them to visit a branch to obtain information on "fill" positions. The Commission accepted that the Bank was entitled to pursue the implementation of the CIP with "speed and efficiency", but considered that the Bank's failure to conduct any analysis of the proposed program from "an equal employment opportunity perspective" led the Bank into error (at 77,243): "The oversight denied it the opportunity to ensure the successful achievement of its goal in a manner which preserved the rights of its officers to equal opportunity." [Emphasis added.] The SD Act does not define discrimination on the ground of sex as conduct that denies an employee rights to "equal opportunity". The concept is defined, for present purposes, by the specific language adopted in pars (a), (b) and (c) of s 5 of the SD Act. In my view, the Commission erred in considering the reasonableness of the position requirement according to whether the Bank had given effect to what the Commission described as "the rights of its officers to equal opportunity". It may well be that an employer's failure to accord equal opportunity to staff can be regarded as discriminatory, in the ordinary meaning of that word. But the object of the SD Act, relevantly, is to eliminate "discrimination against persons on the ground of sex" in the sense in which the SD Act itself uses the word "discrimination". The Commission's third "principle of reasonableness" states that there should be a "demonstrated nexus" between the impugned requirement and the activity to be performed: at 77,242. The fourth states that the requirement "shouldbe appropriate and adapted to the activity in question" (emphasis added): ibid. The Commission expressly acknowledged that the FSU bore the onus of establishing that the requirements imposed by the Bank were not reasonable. It also expressly acknowledged that there is no presumption that the requirements imposed by an alleged discriminator are not reasonable. Despite these acknowledgments, I think that there is a strongly arguable case that the Commission did indeed incorrectly reverse the onus of proof. I appreciate that very considerable care must be exercised before attributing error to a tribunal which, at some point in its reasons, correctly records the applicable principles. So much appears from Minister v Wu, at 280 - 281. Nonetheless, the third and fourth principles articulated by the Commission suggest that it acted on the view that an alleged discriminator bears the onus of demonstrating the appropriate nexus between the requirement and the activity and of showing that the requirement is appropriate and adapted to that activity. Although the Commission does not specifically attribute a source for the third and fourth principles, they appear to be derived from the judgment of Brennan J in Waters v PTC, to which I have previously referred. However, Brennan J's judgment, in my opinion, does not support the propositions as formulated by the Commission. Clearly, his Honour regarded it as material for a body equivalent to the Commission to consider whether the imposition of a condition or requirement is appropriate and adapted to the alleged discriminator's activity (in this case, implementation of the CIP). His Honour said (at 378) that the imposition of a requirement which satisfies pars (a) and (b) of s 17(5) of the Equal Opportunity Act 1984 (Vic) (corresponding to s 5(2)(a) and (c) of the SD Act) "prima facie amounts to discrimination". But he accepted that "it falls into that classification only if the requirement...is not reasonable". I do not read the judgment as suggesting that the onus is transferred to the alleged discriminator to demonstrate a nexus between the requirement and the activity to be performed. Nor do I read Brennan J as imposing an onus on the alleged discriminator to show that the requirement is appropriate and adapted to the activity in question. If, contrary to my view, Brennan J did intend to accept these propositions, his Honour's observations, with respect, appear to run counter to the weight of authority. There are other indications in the Commission's reasons that it may have reversed the onus of proof. The Commission concluded, for example, that there was "no persuasive evidence...that there was a commercial imperative to impose the four week [position requirement]": at 77,247. Similarly, when considering whether it would be inconsistent with the Award for the Bank to invite officers on extended leave to express an interest in retrenchment, the Commission said that it did not find the Award-based rationale persuasive because of the "extraordinary nature" of the CIP. The Commission continued (at 77,249): "There is no reason why the option of retrenchment could not have been extended to Class A women and officers on extended leave in general as long as the total number of officers ultimately retrenched did not exceed the total number of positions abolished." This reasoning tends to suggest that the Commission saw the Bank as having the burden of demonstrating that the position requirement was necessitated by commercial imperatives and of showing that the option of retrenchment could not have been readily made available to officers on extended leave. The situation is not, however, clear cut. It may be that, giving the Commission's reasons the beneficial construction to which they are entitled, the proper conclusion is that the Commission was merely addressing particular arguments put by the Bank and was not intending to imply (notwithstanding the wording of the third and fourth principles) that the Bank bore any onus of establishing the reasonableness of its conduct. It is enough for present purposes to note that the Commission's language, at a number of points in its reasons, is consistent with it having impermissibly reversed the onus. Having regard to the other conclusions I have reached, I prefer to avoid expressing a final view on this question. Retrenchment Requirement: Base Group The effect of s 5(2)(a) of the SD Act is that, in order for the FSU to establish that the Bank discriminated against the Class A women on the ground of their sex, it must show that the Bank required the Class A women to comply with a requirement or condition with which a substantially higher proportion of men comply or are able to comply. As I have noted, the Commission found that the retrenchment requirement was as follows (at 77,235): "In order to express interest in retrenchment, a person must occupy a position in the retail Bank." The Bank did not challenge that formulation, but contended that the Commission erred in making the comparison required by s 5(2)(a). The Commission used as the base group for the purposes of the comparison the whole of the Bank's retail staff (including those on extended leave). The Bank submitted that it followed from the formulation of the retrenchment requirement that the appropriate base group was the whole of the Bank's staff in Western Australia. It relied particularly on the undisputed evidence that officers employed in the non-retail section of the Bank, like those on extended leave from the retail Bank, were not entitled to express an interest in retrenchment. The Bank contended that, if the Commission had adopted the correct base group, the difference in the proportion of complying men and women, respectively, was insignificant (86.75 per cent, compared with 84.4 per cent). It is necessary to deal with the Bank's submission because, if correct, it may offer a complete answer to the FSU's contention that the retrenchment requirement constituted discrimination on the ground of sex within s 5(2) of the SD Act. The principal authority on the application of legislation in the form of s 5(2)(a) of the SD Act is Australian Iron & Steel Pty Ltd v Banovic, a case concerned with the Anti-Discrimination Act 1977 (NSW). The case authoritatively establishes that the word "proportion" used in s 24(3)(a) of the Anti-Discrimination Act (equivalent to s 5(2)(a) the SD Act) requires more than a mere numerical comparison. That proposition is not in question in this case. Banovic is, however, important in the present context because of the comments of the majority (Deane, Dawson and Gaudron JJ) on the selection of base groups for the purposes of the comparison required by s 5(2)(a) of the SD Act. Deane and Gaudron JJ, in their joint judgment explained the principles as follows (at 178 - 179): "The more difficult question concerns the identification of the groups of men and women which will enable the proportions of complying men and women to be calculated. On that issue s 24(3) is wholly silent. In the Court of Appeal, Street CJ held that the identification of a base group was "a matter of fact to be determined having regard to the context in which the requirement or condition is imposed", adding that "[i]t will be the group to which it is directed and which will be divided or segregated by it". On the other hand, Priestley JA (with whom Mahoney JA agreed), after a consideration of decisions based on the similar provision in the Sex Discrimination Act 1975 (UK) inclined to the view that the relevant groups were the male and female populations of New South Wales. As previously indicated, s 24(3)(a) requires an exercise which will ascertain whether sex is significant to compliance with the condition or requirement in question. It may be expected, as was indicated by Street CJ in the Court of Appeal, that the base groups which are appropriate to that exercise will vary according to the context in which the condition or requirement is imposed. That being so, there is no warrant for reading s 24(3)(a) as invariably requiring the calculation of proportions by reference to the general male and female populations. Equally, there is no warrant for reading s24(3)(a) as excluding that calculation if it will reveal the significance, if any, of sex to compliance. The silence of s 24(3)(a) as to the method of identifying appropriate base groups should, we think, be taken as requiring the Tribunal to determine for itself the base groups which will reveal whether sex is a significant factor in compliance. That is not to say that a determination of the appropriate base groups is merely a finding of fact which is beyond appellate review by reason of the limitation on appeals in s 118 of the Act. The determination of the appropriate base groups will ordinarily involve the making of findings of fact. But it also involves a reasoning process which is not dissimilar from that involved in the process of determining whether or not evidence is relevant to an issue in a trial. A decision to select particular base groups involves a question of law, at least in so far as it is a question of law whether the base groups selected produce the exercise required by s 24(3)(a), namely, the ascertainment whether sex is significant to compliance. In this respect, it is necessary to inquire, as was pointed out in the recent decision of the United States Supreme Court in Wards Cove Packing Co [(1989) 490 US 642, at 653-654], whether the groups are "too broad" or "too narrow". That exercise is, in essence, the same as an inquiry whether irrelevant considerations were taken into account or relevant considerations were not taken into account." Dawson J addressed the selection of an appropriate base group in the following passage (at 187): "But a proportion must be a proportion of something, so that it is necessary to determine the appropriate grouping or pool within which to calculate the proportions which are to be compared. The English cases have discussed in detail the problems associated with the determination of an appropriate base group. Two main contrasting approaches can be identified. One seeks to narrow the base group to the particular group of persons to whom the requirement is directed, while the other seeks to establish a broader base beyond the immediate context. The need to select an appropriate base group, which may be limited to the immediate context, was recognized in Kidd v DRG (UK) Ltd [(1985) ICR 405, at 409], where Waite J, in delivering the decision of the Employment Appeal Tribunal, held that: "....for the purposes of the statutory comparison, like must be compared with like in a context appropriate to the case under review. The consequence is that the particular section of the members of the public upon whose lives the impact of the relevant requirement or condition has to be measured is liable to vary from case to case - ranging from the population as a whole at one end of the scale to employees of a single workplace at the other: and there is liable also to be ample scope for debate in many instances as to which section of the public within that range is the right one to choose for a particular case." As that passage indicates, the contextual approach will provide different answers depending upon the circumstances of each case. For example, where a requirement is contained in a published offer of employment, the relevant base group may be made up of those who might be expected to be eligible to take up the employment based upon geographical, educational and other restraints. Similarly, where a requirement is imposed upon existing employees, the relevant group may be the class of employees affected." The particular question that arose in Banovic was the approach to be taken where the composition of the workforce was skewed by past discriminatory practices. While that issue does not arise in the present case, the reasoning of Deane and Gaudron JJ supports these general principles: · the base groups appropriate to particular cases will vary, according to the context; · the selection of the base group should be calculated to reveal the significance, if any, of sex to compliance; · the decision to select a particular base group involves a mixed question of fact and law; and · the Court on an application for review does not make its own assessment of the base groups, but considers whether the group chosen is too broad or too narrow, by a process akin to determining whether relevant considerations were taken into account or relevant considerations were not taken into account. In my view, the passage cited from the judgment of Dawson J and the remainder of his Honour's reasons are consistent with these principles. The Commission's reasoning supporting the selection of the staff in the retail section of the Bank in Western Australia as the base group is somewhat cryptic. Ms Giles submitted that the Commission selected this base group by reason of its finding (made when considering the ability of retail Bank staff to comply with the retrenchment requirement) that "the retrenchment requirement was imposed on the retail Bank only": at 77,240. Accordingly, the Commission was justified in selecting a base group by reference to staff employed in the retail Bank. It was not to the point that staff in other sections of the Bank could not comply with the retrenchment requirement, since they were not relevantly affected by the CIP. Reading the Commission's reasons as a whole, it should be inferred, in my opinion, that the Commission selected the base group after taking into account that the CIP directly affected only the staff on the retail Bank. Those staff were not only subjected to the spill and fill arrangements, but to other changes resulting from the restructuring of the Bank's retail operations. The staff of the retail Bank including, in the Commission's findings, the staff on extended leave, were affected by the restructuring. Even those enjoying the benefit of what the Bank described as the "guarantee" of a comparable position could not escape the consequences of the CIP for a Bank which the Commission described as being "in turmoil". According to the Commission, the consequences for the Class A women included "probable frustration, uncertainty and lack of perceived progress in their career": at 77,231. I think that it is implicit in the Commission's reasoning that it took the view that confining the base group to the Bank's retail staff would reveal more clearly the significance of sex to compliance or to the ability to comply with the retrenchment requirement. The composition of the sections of the Bank not directly affected by the CIP was thought to shed no light on this question since they were not subjected to the same risks and difficulties as those employed in the retail Bank, including those on extended leave. In my view, it was open to the Commission to reach the conclusions it did on the selection of the base group. Position Requirement: Substantial Proportion As previously noted, the Bank submitted that the Commission had made no finding about the ability of the Class A women to comply with the position requirement. Since the matter is to be returned to the Commission in any event, it is not necessary to address the submission. Even so, it is appropriate to observe that the Commission does not appear to have made a precise finding about the proportion of women able to comply with the position requirement. At one point, the Commission stated that it was satisfied that the Class A women "as a group were objectively unable to comply with the position requirement" and that "the overwhelming majority would not have been able [to comply]": at 77,238. It proceeded to "put aside...consideration of whether the evidence in fact permits such a generalisation", to test the proportion of men and women who "on this premise" were able to comply with the position requirement: at 77,238-77,239. The Commission then made certain assumptions about the proportions of male and female staff of the retail Bank on extended leave able to comply with the position requirement. On the basis of these assumptions, which it stated were the most favourable to the Bank, the Commission concluded that a substantially higher proportion of males than females employed by the Bank in Western Australia were able to comply with the requirement. It is not clear from the Commission's reasons why it refrained from making precise findings about the proportions of complying men and women. In the case of men, it commented in a footnote that of the twenty two men employed by the Bank in Western Australia who were on extended leave, eleven were called as witnesses and, of these, eight could not comply with the position requirement. The Commission heard evidence from ten female witnesses, who were apparently accepted as representative of the circumstances of the Class A women. There does not seem to be any obvious reason why it was necessary to resort to assumptions in order to reach conclusions as to the proportion of men and women, respectively, able to comply with the position requirement. It may be that the Commission's failure to make precise findings did not constitute a material error because, on any possible permutation, the difference in the proportions of men and women complying was substantial. Nonetheless, unless there is some compelling reason to the contrary, I think it desirable for the Commission to make precise findings as to the proportions of men and women complying or able to comply with the impugned requirement. Relief In my view, the appropriate course is for the complaint to be remitted to the Commission for determination according to law. Mr Sackar did suggest, although without elaboration, that the Commission's finding that the Bank's conduct amounted to discrimination on the ground of sex was an exercise of power so unreasonable that no reasonable person could have so exercised that power (ADJR Act, ss 5(1)(e) and 5(2)(g)) and that therefore the matter should not be returned to the Commission. I do not think that such a conclusion can be reached, particularly having regard to the range of factors to be taken into account and the extent of evidence before the Commission. It follows that the finding by the Commission that the Bank discriminated against the Class A women in employment, contrary to s 14(2) of the SD Act, should be set aside. The matter should be remitted for determination by the Commission, differently constituted, in accordance with law: see Northern NSW FM Pty Ltd v Australian Broadcasting Tribunal (1990) 26 FCR 39 (FCA/FC), at 42-43. It will be a matter for the Commission to decide whether further evidence should be adduced. The FSU should pay the Bank's costs. I certify that this and the preceding forty-five (45) pages are a true copy of the Reasons for Judgment herein of the Honourable Justice Sackville. Associate: Dated: 28 November, 1997 Counsel for the Applicant: Mr J.R. Sackar QC and Mr J.S. Hilton SC Solicitor for the Applicant: Australian Government Solicitor The First Respondent entered a submitting appearance. Counsel for the Second Respondent: Ms P. Giles and Mr R. Castiglione Solicitor for the Second Respondent: Dwyer Durack Date of Hearing: 15 September 1997 Date of Judgment: 28 November, 1997