FEDERAL COURT OF AUSTRALIA Power v Aboriginal Hostels Limited [2003] FCA 1475 Discrimination in employment on the basis of disability – imputed discrimination – comparison with person without disability – inherent requirement – how to be applied with imputed disability Disability Discrimination Act 1992 (Cth) ss 3, 4, 5, 15(2), 15(4) Federal Court of Australia Act 1976 (Cth) s 24, s 25 Purvis v State of New South Wales (Department of Education and Training) (2003) 202 ALR 133 X v Commonwealth of Australia (2000) 200 CLR 177 DARCY POWER v ABORIGINAL HOSTELS LIMITED S 402 of 2003 SELWAY J 12 DECEMBER ADELAIDE IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY S 402 OF 2003 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: DARCY POWER APPELLANT AND: ABORIGINAL HOSTELS LIMITED RESPONDENT JUDGE: SELWAY J DATE OF ORDER: 12 DECEMBER 2003 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. Appeal allowed. 2. Order of the Federal Magistrate of 3 March 2003 set aside. 3. This matter be remitted for further hearing by the same Federal Magistrate in accordance with these reasons. 4. The costs of this appeal to be costs in the cause to be determined by the Federal Magistrate. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA SOUTH AUSTRALIA DISTRICT REGISTRY S 402 OF 2003 ON APPEAL FROM THE FEDERAL MAGISTRATES COURT OF AUSTRALIA BETWEEN: DARCY POWER APPELLANT AND: ABORIGINAL HOSTELS LIMITED RESPONDENT JUDGE: SELWAY J DATE: 12 DECEMBER 2003 PLACE: ADELAIDE REASONS FOR JUDGMENT 1 The appellant was an employee of the respondent. He was employed on probation. Prior to the conclusion of the period of probation his employment was terminated. He commenced proceedings in the Federal Magistrates Court alleging that the termination of his employment was the result of unlawful discrimination by the respondent contrary to s 15 (2) of the Disability Discrimination Act 1992 (Cth) ('the DDA'). The learned Federal Magistrate dismissed that application on the basis that 'whatever discrimination the respondent committed against the appellant was excused by the operation of section 15(4) of the DDA'. The appellant appeals to this Court pursuant to s 24(1)(d) Federal Court of Australia Act 1976 (Cth) ('the FCA'). On 29 August 2003, the Chief Justice of this Court directed that the appeal should be heard by a single Judge: s 25(1A) of the FCA. For the reasons given below I am of the view that the appeal should be allowed for the purpose of setting aside the decision of the learned Federal Magistrate and remitting the matter to him for further consideration in accordance with these reasons. 2 There would seem to have been a number of issues of fact that were in contention before the learned Federal Magistrate which he has resolved. The relevant facts can now be summarised as follows: (a) The appellant suffered from a serious episode of clinical depression in the mid 1990s whilst employed by the Salvation Army. (b) The respondent operates a number of hostels throughout South Australia where it provides accommodation for Aboriginal persons. In particular, it operates the Luprina Hostel at Dudley Park. Accommodation is provided at that hostel to Aboriginal persons who are visiting Adelaide to receive medical treatment or who require crisis accommodation. Given the nature of the services offered at the hostel there is a requirement that staff be available at the hostel on a 24 hour basis. (c) On 23 November 2000, the respondent commenced employment as assistant manager of the Luprina Hostel. He was employed on a part-time basis working 32 hours per five day week. It was a condition of his employment that the respondent 'sleep over' at the end of some of his shifts and during the period of such sleep overs that he be available to answer the telephone and perform some other duties. (d) The appellant was unhappy with various aspects of his employment. He thought that the after hours obligations were unduly onerous, particularly as he was only employed on a part-time basis. He thought that he was being underpaid. He also had an uneasy relationship with his immediate superior. It would seem to be accepted that the appellant's unhappiness with these matters affected both his health and his work performance. (e) The appellant was absent from work on account of ill health from 26 March 2001 to 17 May 2001. He was diagnosed as suffering from 'an adjustment disorder with anxiety and depression'. (f) There was a review of the appellant's work performance on 12 April 2001. At that meeting he was informed that his performance needed to improve. It would also seem to be clear that the employer was of the view that his absence on account of ill health was related to the appellant's unhappiness with his working conditions. In the result the appellant's probation was extended to 23 June 2001. (g) As part of the usual administrative process in relation to employees on probation, the appellant was required by the respondent to see Dr Ducrou for the purpose of obtaining a medical report. He did so. Dr Ducrou reported that the appellant was medically capable of performing all of the duties of the job that had been specified. (h) Dr Ducrou was then contacted by an employee of the respondent, Mr Weigold. That employee informed Dr Ducrou that the appellant had recently been diagnosed as suffering from clinical depression. As a result of that further information, Dr Ducrow modified his opinion as follows: 'Dear Aboriginal Hostels I initially examined Darcy Power for a pre employment assessment on 17 May 2001. He initially indicated he had one episode of depression, due to racial abuse, which resolved with treatment. His supervisor Elmer Weigold, has informed me that he has required 5 weeks sick leave in the last 6 months, due to recurrent depression, aggravated by his extended work hours - on call 24 hours. I consider this depression will recur - especially if working on call. He would need excess sick leave if employed full time with extended call. He may be more suited to a job with office hours only - 9 - 5 - on work days. His recurring depression would render him unfit for full time work involving on call work, due to excess sick leave entitlements.' (i) Mr Weigold made an honest mistake in informing Dr Ducrou that Mr Power had recently suffered from depression. In doing so Mr Weigold imputed to the appellant a disability that the appellant did not have. (j) The appellant returned to work on 18 May 2001, the day after his examination by Dr Ducrou. He remained at work, without any further absences due to illness until his employment was terminated on 17 June 2001. It would appear that his work performance was satisfactory during that period. (k) On 17 June 2001, his employment was terminated by Mr Warrior, the regional manager of the respondent. It is possible that his employment would have been terminated because of concerns about work performance, but that was not the actual basis for termination. Nor was it the reason given for it. The reason was that Dr Ducrou had given his opinion that the appellant's depression would recur which rendered him unfit for the job. 3 The question before the learned Federal Magistrate was whether the actions of the respondent were in breach of s 15 DDA. Subsections (2) and (4) of that section provide: '(2) It is unlawful for an employer or a person acting or purporting to act on behalf of an employer to discriminate against an employee on the ground of the employee's disability or a disability of any of that employee's associates: (a) in the terms or conditions of employment that the employer affords the employee ; or (b) by denying the employee access, or limiting the employee's access, to opportunities for promotion, transfer or training, or to any other benefits associated with employment; or (c) by dismissing the employee; or (d) by subjecting the employee to any other detriment. … (4) Neither paragraph (1)(b) nor (2)(c) renders unlawful discrimination by an employer against a person on the grounds of the person's disability, if taking into account the person's past training, qualifications and experience relevant to the particular employment and, if the person is already employed by the employer, the person's performance as an employee, and all other relevant factors that it is reasonable to take into account, the person because of his or her disability: (a) would be unable to carry out the inherent requirements of the particular employment; or (b) would in order to carry out these requirements, require services or facilities that are not required by persons without the disability and the provisions of which would impose an unjustifiable hardship on the employer.' 4 Clearly enough the appellant was dismissed. The reason given for that dismissal was because he was suffering from depression. 'Disability' is defined in s 4 of the DDA to include a disorder that 'affects a person's…emotions' that 'is imputed to a person'. Plainly enough the imputation by Mr Weingold, by Dr Ducrou and by Mr Warrior that the appellant was suffering from depression falls within the definition. As the Federal Magistrate properly found, the dismissal was 'on the ground' of disability. 5 The next question is whether the respondent discriminated against the appellant. 'Discrimination' is defined in s 5 of the DDA as follows: 'For the purposes of this Act, a person (discriminator) discriminates against another person (aggrieved person) on the ground of a disability of the aggrieved person if, because of the aggrieved person's disability, the discriminator treats or proposes to treat the aggrieved person less favourably than, in circumstances that are the same or are not materially different, the discriminator treats or would treat a person without the disabilities. …' 6 The meaning of this definition has recently been considered by the High Court in Purvis v State of New South Wales (Department of Education and Training) (2003) 202 ALR 133 ('Purvis'). The majority held that the definition required a factual comparison with the treatment that would have been given to a person without disability in circumstances that were the same or not materially different from those of the disabled person. As it was explained by Gummow, Hayne and Heydon JJ at 185-186, at [223]-[225]: 'In requiring a comparison between the treatment offered to a disabled person and the treatment that would be given to a person without the disability, s 5(1) requires that the circumstances attending the treatment given (or to be given) to the disabled person must be identified. What must then be examined is what would have been done in those circumstances if the person concerned was not disabled. The appellant's argument depended upon an inversion of that order of examination. Instead of directing attention first to the actual circumstances in which a disabled person was, or would be, treated disadvantageously, it sought to direct attention to a wholly hypothetical set of circumstances defined by excluding all features of the disability. The circumstances referred to in s 5(1) are all of the objective features which surround the actual or intended treatment of the disabled person by the person referred to in the provision as the "discriminator". It would be artificial to exclude (and there is no basis in the text of the provision for excluding) from consideration some of these circumstances because they are identified as being connected with that person's disability. There may be cases in which identifying the circumstances of intended treatment is not easy. But where it is alleged that a disabled person has been treated disadvantageously, those difficulties do not intrude. All of the circumstances of the impugned conduct can be identified and that is what s 5(1) requires. Once the circumstances of the treatment or intended treatment have been identified, a comparison must be made with the treatment that would have been given to a person without the disability in circumstances that were the same or were not materially different. In the present case, the circumstances in which Daniel was treated as he was, included, but were not limited to, the fact that he had acted as he had. His violent actions towards teachers and others formed part of the circumstances in which it was said that he was treated less favourably than other pupils. Section 5(1) then presented two questions: (i) How, in those circumstances, would the educational authority have treated a person without Daniel's disability? (ii) If Daniel's treatment was less favourable than the treatment that would be given to a person without the disability, was that because of Daniel's disability? Section 5(1) could be engaged in the application of s 22 only if it were found that Daniel was treated less favourably than a person without his disability would have been treated in circumstances that were the same as or were not materially different from the circumstances of Daniel's treatment.' 7 It is not clear that the learned Federal Magistrate carried out this comparison. Rather, he would seem to have proceeded with an analysis of the subjective basis for the decision by the respondent. For example, the Federal Magistrate said at [88] of his reasons: 'It is not open to an employer to discriminate against an employee on the basis of temporary medical conditions that would resolve with time or with reasonable changes being made to work processes. Examples of this are an employee who is absent from work, for some weeks, because of glandular fever or an employee who contracts a skin disorder by reason of exposure to a particular chemical in the work place, which can be readily substituted by the use of another substance, which does not have the same adverse consequences for the employee concerned. Clearly, it would be unlawful for the employee concerned in these examples to have his employment terminated because of the disability suffered.' Indeed, some of the reasoning of the learned Federal Magistrate would seem to suggest that it was critical to his analysis that the reason for dismissal was erroneous in that he was not, in fact, suffering from depression and was, in fact, physically and mentally capable of performing the duties of the position. 8 Following Purvis it is clear that this approach is not correct. If the employer would treat any employee the same who was absent from work for some weeks (whether or not the employee had a disability or not) then this would not constitute discrimination under the DDA. On the other hand, if the employer terminates the employment of an employee who has a disability (including an imputed disability) in circumstances where the employer would not have done so to an employee who was not suffering a disability then this constitutes discrimination for the purpose of the DDA. 9 There was some evidence before the Federal Magistrate that would appear to have supported an argument that the respondent would have terminated the appellant's employment whether or not he had a disability (whether real or imputed). However, Ms Henderson, who appeared for the respondent, declined to make any submission to that effect. Instead, she informed me that her client only dismissed the appellant because of her client's understanding that the appellant had a disability that meant that he could not perform the duties of the position. She said that her client would not have dismissed the appellant merely for his absences from work. These concessions seemed to me to go considerably further than the evidence required or than the findings made by the learned Federal Magistrate. Nevertheless, having been made, it seems to me that they answer the requirements for discrimination as identified by the High Court in Purvis. Given that this is an appeal by way of rehearing, it is appropriate for me to take account of these concessions. 10 On the basis of the concessions made by the respondent, it can be accepted that, in dismissing the appellant, the respondent discriminated against him by reason of a disability. Indeed, this was not disputed before me. The learned Federal Magistrate so found. 11 However, the Federal Magistrate then proceeded to find that such discrimination was 'excused' by s 15(4) of the DDA. In doing so it would seem that the Federal Magistrate made his own analysis of whether or not the respondent would have been justified in dismissing the appellant by reason of his work performance: 'As I have already indicated, it is the respondent's position that a reasonable interpretation of all the evidence concerned, leads to the conclusion that Mr Power was not capable of carrying out the inherent requirements of the position of assistant manager at Luprina Hostel, which included the on call duties, without significant risk of doing himself harm. In essence, the respondent argues that Dr Ducrou's opinion, in his report of the 14th of June, 2001, the applicant would be more suited to a job involving standard hours, without on call duties because of the risk of him taking up excess sick days, is borne out by experience. It is the applicant's position that the evidence is otherwise, in that the respondent has misconceived his (Mr Power's) medical condition and the experience of at least the final four weeks of his employment clearly indicates his capability of performing the job. I confess that I have experienced some difficulty in deciding which position is to be preferred because of the limited nature of the evidence lead before me, particularly medical evidence, and the requirement for me to make an assessment of the likely future performance of the applicant in the position. The distinction between the two cases is a fine one. The gist of the applicant's case is that, just because he was unhappy with certain aspects of his employment and had required time off work as a result, it does not necessarily follow that he is inherently unsuitable for the job. However, undoubtedly, his absence must have been a matter of considerable inconvenience for the respondent, given the small size of its staff at both Luprina in particular and generally within the Adelaide area. … It seems to me that the evidence, particularly that of Mr Warrior, is clear, that one of the requirements of the assistant manager's position at Luprina is to be available on call, after hours and at night-time. That requirement is related to the nature of the clientele who use the hostel. It is essential for the conduct of the respondent's core business that telephone inquiries about both emergency accommodation and the health and welfare of the inmates of the hostel are answered. In some ways, this aspect of the position is a passive one, but the care-taking aspect of the position does seem to be to be integral to it. To take away this aspect of the position would be to make it a different position. There can be little doubt that the applicant is physically capable of carrying out this aspect of the position. All that is required of him is to be physically present on the premises to answer the telephone and presumably to deal with emergency inquiries that cannot wait until business hours. This may at times be annoying, in that some inquiries made after hours may be trivial but nonetheless result in disturbance of sleep. As I say the role is largely a passive one and I have little doubt that the applicant has the necessary physical attributes to fulfil this requirement of the position. … In this particular case, the evidence indicates that between the 26th of March 2001 and the 17th of May 2001, the applicant was unable to work due to him suffering an adjustment disorder, which was in large part referable to his dissatisfaction with the nature and terms of his conditions of employment. In my view, the on call aspects of the employment are inherent to it. The consequences of the applicant's absence for those seven weeks was to cause considerable logistical difficulties for the respondent in the sense that other staff had to be coopted to cover for the applicant. His absence had ramifications for the respondent's staff rosters at other of its hostels. The applicant sought some changes to the administration of the after hours aspect of his on call duties, in particular, he wished to be remunerated on a full time rather than a part time basis. In addition, he wished for an answering machine to be installed to deal with at least some of the after hours telephone calls. However, there can be no certainty that these measures would have been implemented or would have significantly ameliorated the general dissatisfaction that the applicant had for the position. In my view, a general dissatisfaction that an employee has for a particular position may, in certain circumstances, render him or her unsuitable to perform the inherent requirements of that position. For example, the dissatisfaction that a person feels about his or her position may so infuse his or her demeanour that they are consistently rude to customers of the business or discourteous to fellow employees. Such behaviour would be unacceptable and in the social context of the business concerned would indicate an inability to meet the inherent requirements of the position. In addition, the amount of sick leave a person takes may also be relevant in determining a person's suitability to fulfil the inherent requirements of a particular position. However, such a determination must depend on an objective assessment of the circumstances surrounding the taking of that sick leave. For example, to use an illustration already used, a particular employee may contract glandular fever and as a result expend a considerable amount of sick leave at great inconvenience to the particular employer concerned. However, the expectation is that the employee will fully recover in time. The position may be different in the case of an office worker required to operate a keyboard, who contracts severe rheumatoid arthritis in his or her wrists and as a result is required to take frequent sick leave, but whose condition is not likely to alleviate. In such a case the extent of the employee's sick leave has clear ramifications for the operational requirements of the employer concerned because of the endemic and recurrent nature of the condition. In this case, I accept that the extent of Mr Power's sick leave was a matter, quite properly, of concern for the management of the respondent. This was so for two major reasons. Firstly, as to whether or not the nature of the work itself and the applicant's emotional response to it was such that he was likely to put himself at risk of illness if he continued to work in the position. Secondly, if in future, it was likely that the applicant would continue to take sick leave and put the operational requirements of Luprina and the respondent's other hostels in jeopardy. An employer is entitled to expect that a particular employee will be more or less available to perform the duties required of him or her and not be regularly indisposed. It would not be reasonable to expect an employee to permanently modify its system of rostering staff to take into account such permanent absences due to sickness.' 12 As a result of this analysis of whether the respondent would have been justified in terminating the employment of the appellant, the learned Federal Magistrate concluded that the termination could be justified under s 15(4) of the DDA: 'In all these circumstances, particularly the difficulty in removing the on call aspect of the position, the fact that the applicant had seven weeks sick leave for reasons related to his emotional reaction to the job and the fact that the applicant made no secret of the fact that he did not relish having his sleep disturbed, it does not seem to me to be unreasonable for the respondent to have reached the conclusion that Mr Power was more suited to a position involving standard working hours and not one involving "on call". It does not seem unreasonable that it would have formed an assessment that there was a significant risk of Mr Power taking more sick leave in future because of the on call duties and so, by necessary implication, putting his health in jeopardy in future. In essence the respondent was entitled to consider that Mr Power was not cut out for the particular job of being assistant manager at its Luprina Hostel. … For all these reasons, I am satisfied that whatever discrimination the respondent committed against the applicant was excused by the operation of section 15(4) of the DDA in that, notwithstanding the disability that was imputed to him or because of an actual disability suffered by him, the applicant was incapable of carrying out one of the inherent requirements of the position, namely that he be regularly available to be on call after hours as the assistant manager of the Luprina Hostel. To require the respondent to remove the necessity for the assistant manager to be on call would impose an unjustifiable hardship on Aboriginal Hostels Limited, which all the circumstances of the case when taken as a whole, would fundamentally change the nature of the position previously held by Mr Power. It would not be reasonable for the respondent to have to schedule other staff to provide the after hours and on call aspects of the assistant manager's position at Luprina Hostel, to augment those supplied by the applicant, either when he was there or absent on sick leave. To remove the after hours aspect of the service provided to clientele at Luprina would be to significantly change the nature of the respondent's business, which was providing emergency accommodation and enabling information to be given to the relatives of infirm inmates of the hostel, at all hours of the day and night. To have an assistant manager available to do this was essential to the position. From this analysis, it must follow that Mr Power's application should be dismissed.' 13 In my view this analysis is in error. The requirement of s 15(4) of the DDA in the current context is to determine whether or not the employee 'because of his or her disability would be unable to carry out the inherent requirements of the particular employment'. It is not relevant to that determination to consider whether the termination may have been justifiable for other reasons or not. 14 It is first necessary to identify the 'inherent requirements of the particular employment'. I was referred to a number of cases dealing with this question, in particular X v Commonwealth of Australia (2000) 200 CLR 177. However, in this case the relevant 'inherent requirements' are clear enough. At least until the conditions of employment are changed, the inherent requirements of the position include the requirement that the appellant be at call for several nights a week. The Federal Magistrate so found. No mistake has been identified in that regard. 15 The next question is whether the appellant is unable to perform those duties 'because of his disability'. That question was not addressed by the learned Federal Magistrate. In my view the failure to address that question was an appealable error. If the question had been addressed then there are two possibilities. The first is that the 'imputed disorder' of depression is the relevant disability. Alternatively, his actual condition of an adjustment disorder (from which he seems to have recovered) is the relevant disability. 16 The appellant's submissions assumed that the relevant disability was the actual condition of the appellant at the time of his termination. On that basis the appellant submitted that he could perform the inherent requirements of the position - indeed, he was doing so for the four weeks before his employment was terminated. Consequently, he argued, s 15(4) of the DDA had no application. 17 On the other hand the respondent's submissions assumed that the relevant disability was the imputed disorder of depression, notwithstanding that the appellant was not suffering from that disability. On this basis the respondent argued that in light of the report of Dr Ducrou the appellant was unable to comply with the inherent duties of the position. 18 So far as my research reveals, there is no authority directly on point. The definition of 'disability' in s 4 of the DDA purports to be an exhaustive definition, 'unless the contrary intention appears'. There is no obvious contrary intention disclosed by s 15(4). Nor is there any obvious reason to imply one. The DDA is principally directed to the elimination as far as possible of 'discrimination against persons on the ground of disability' in relevant areas (s 3 DDA). It is not directed at achieving 'fair outcomes' as such. Consequently what is prohibited is discriminatory behaviour based upon disability. 'Imputed' disability is sufficient for this purpose. What the DDA prohibited in this case was not the dismissal of the appellant for a reason which was wrong, but the dismissal of the appellant who had a disability (albeit an imputed one) in circumstances where a person without a disability would not have been dismissed. When it is understood that the DDA is directed at the ground of discrimination (which includes imputed disability) and not 'fair outcomes' then there seems no reason to imply that 'disability' appearing in s 15(4) of the DDA does not include imputed disability. 19 On this assumption the remaining question is whether the evidence before the learned Federal Magistrate was such that the only conclusion he could have reached, if he had addressed the question, was that the appellant was unable to comply with the inherent requirements of the employment. The only evidence that would support that conclusion was the report of Dr Ducrou. That report was limited. Dr Ducrou's expertise to give a prognosis in relation to clinical depression would not seem to have been explored. Two affidavits from Dr Ducrou were tendered. They do not add very much, if anything. In accordance with ordinary principles any onus probably rests upon the respondent, at least in the sense that if a breach of s 15(2) of the DDA is otherwise established, but the factual elements of s 15(4) are not, then the respondent will fail. On the other hand, it may well be that the relevant issues were not fully explored before the learned Federal Magistrate, particularly as they were not fully explored before me. Of course, this may be because the decision in Purvis was not delivered until after these proceedings had been heard and determined by the Federal Magistrate. 20 Taking all of the above into account it seems to me that the appropriate course for me to adopt is to set aside the decision of the learned Federal Magistrate dated 3 March 2003 and to remit the matter to the same Federal Magistrate for such further consideration and determination consistent with these reasons as he should think fit. In particular, it would be open for either of the parties as they may be advised to apply to the learned Federal Magistrate as to whether any further evidence should be received (whether on affidavit or otherwise) as to whether, if the appellant had been suffering from depression (as was imputed) he would have been incapable of performing the inherent duties of the position. It would also be open to either party to oppose such a course. The learned Federal Magistrate, having heard the proceedings to date and being aware of the manner in which the case has been conducted before him, is in the best position to determine for himself whether any such application, if made, should be acceded to. If not, then the Federal Magistrate, having heard the remainder of the evidence, is in the best position to determine (in accordance with these reasons) whether the report of Dr Ducrou is sufficient to satisfy the requirements of s 15(4) of the DDA. 21 In the circumstances it is also appropriate that the question of the costs of this appeal should follow the ultimate event as determined by the Federal Magistrate. I certify that the preceding twenty-one (21) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Selway. Associate: Dated: 12 December 2003 Counsel for the Appellant: K Eaton Solicitor for the Appellant: Bourne Lawyers Counsel for the Respondent: R Henderson Solicitor for the Respondent: Australian Government Solicitor Date of Hearing: 19 November 2003 Date of Judgment: 12 December 2003