Set aside by Appeal : Set aside by appeal 15/11/2004: Amery & Ors v. State of New South Wales (Director-General NSW Department of Education and Training) [2004] NSWCA 404 13/04/2006: State of New South Wales v Amery [2006] HCA Appeal allowed. Set aside orders of Court of Appeal Appeal Panel - Internal CITATION: The State of New South Wales -v- Amery & Ors (EOD) [2003] NSWADTAP 16 APPELLANT/RESPONDENT TO CROSS APPEAL ON COSTS: PARTIES: The State of NSW (Director General, NSW Department of Education & Training) RESPONDENTS/CROSS APPELLANTS ON COSTS: Joyce Amery, Lyn Bovard, Margaret Douglas, Jenny Drury, Linda Freeman, Leonie Hancott, Jacki Irvine, Denise McHugh, Karen Mors, Cheryl O'Loan, Marian Platt, Megan Pursche, Marcia Skelton FILE NUMBER: 019015; 019057 HEARING DATES: 28/02/2002, 27/05/2002, 28/05/2002 SUBMISSIONS CLOSED: 05/28/2003 DATE OF DECISION: 06/12/2003 Amery & ors -v- The State of New South Wales (No.2) [2001] NSW ADT 187 DECISION UNDER APPEAL: BEFORE: Latham M - DCJ (Deputy President); Bartley R - Judicial Member; Weule B - Member CATCHWORDS: indirect discrimination - consideration of reasonableness - indirection discrimination - onus of proof MATTER FOR DECISION: Principal matter FILE NUMBER UNDER APPEAL: 74-87 of 1997 DATE OF DECISION UNDER APPEAL: 11/13/2002 Anti-Discrimination (Amendment) Act 1994 LEGISLATION CITED : Anti-Discrimination Act 1977 Industrial Relations Act 1991 Industrial Relations Act 1996 Street -v- Queensland Bar Association (1989) 168 CLR 461 Waters -v- Public Transport Corporation (1991) 173 CLR 349 Australian Iron and Steel Pty. Ltd. -v- Banovic & Ors (1987) 168 CLR 165 R v Sharma [2002] NSWCCA 142 Saraswati v The Queen (1991) 172 CLR 1 Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 Home Office v Holmes [1984] ICR 678 CASES CITED: Re:The Secretary of the Department of Foreign Affairs and Trade And Helen Styles & Philip Arthur Harrison 88 ALR 621 23 FCR 251 Waters & Ors v Public Transport Corporation [1991] 173 CLR 349 Australian Iron & Steel Pty Ltd v Najdovska (1988) 12 NSWLR 587 Styles v The Secretary of the Dept of Foreign Affairs and Trade (1988) 84 ALR 408 Australian Medical Council v Wilson (1996) 68 FCR 46 ; 137 ALR 653 Commonwealth Bank v HREOC 150 ALR 1 Commonwealth v HREOC (1995) 63 FCR 74 APPELLANT REPRESENTATION: P Menzies QC with T Anderson and S Dowling of counsel RESPONDENT C Birch, counsel ORDERS: 1. Appeal by the Director General Allowed; 2. Complaints Dismissed; 3. Cross Appeal as to Costs Dismissed Background 1 These appeals arise out of the substantiation by the Tribunal of thirteen complaints of indirect discrimination on the grounds of gender and a decision by the Judicial Member of the Tribunal to decline an award of both interest on damages and costs in favour of the complainants. 2 The complainants were teachers employed by the Dept. of Education on a casual basis. Between December 1993 and 27 August 1996, their conditions of employment were governed by the Teachers and Related Employees Enterprise Agreement ("the enterprise agreement") made under the Industrial Relations Act 1991 (NSW). From 27 August 1996, their conditions of employment were governed by the Crown Employees (Teachers and Related Employees) Salaries and Conditions Award ("the award") made under the Industrial Relations Act 1996 (NSW). Under both the enterprise agreement and the award, the salaries of permanent full-time and permanent part-time teachers was determined by a salary scale with thirteen incremental steps. The salary paid to casual teachers was calculated as a daily rate, by reference to that salary scale, save that for casual teachers there were only five incremental steps in the applicable salary scale and the fifth or highest step was equivalent to level eight of the salary scale applicable to permanent teachers. 3 The complainants' contention, which the Tribunal below upheld, was that the enterprise agreement and the award indirectly discriminated against female teachers in that significantly more casual teachers were female than male, owing to the family responsibilities generally undertaken by those female teachers, and whatever their length of service and the nature of their duties, they could never be remunerated beyond the equivalent of level eight of a permanent teacher's pay scale. Indirect discrimination could, however, only arise after 8 August 1995, being the date upon which the application of the provisions of the Anti Discrimination Act 1977 ("the Act ") to industrial agreements was effected. 4 The Director General of the NSW Dept of Education and Training (the Appellant), as the employer of the complainants, appeals against the finding of indirect discrimination, alleging several errors of law on the part of the Tribunal below. The complainants (the Respondents) also appeal against the refusal to award interest on the damages and against the refusal to award costs in their favour. The Statutory Construction Point 5 On the hearing of the appeal, senior counsel for the Appellant raised an issue relating to the statutory construction of the indirect discrimination provision in the Act, as it applied after 8 August, 1995. This was not a point taken before the Tribunal at first instance, but in view of its fundamental importance to the administration of the Act and the absence of any prejudice to the Respondents, it is appropriate that the Appeal Panel deal with this aspect of the Appellant's argument. 6 The provision to which the Tribunal had regard for the purposes of its decision and which was acknowledged by the parties to be applicable to the complaints is the present s24(1) of the Act:- S24(1)A person ("the perpetrator") discriminates against another person ("the aggrieved person") on the ground of sex if, on the ground of the aggrieved person's sex…….the perpetrator: (a) treats the aggrieved person less favourably than in the same circumstances, or in circumstances which are not materially different, the perpetrator treats or would treat a person of the opposite sex………….; or (b) requires the aggrieved person to comply with a requirement or condition with which a substantially higher proportion of persons of the opposite sex….,comply or are able to comply, being a requirement which is not reasonable having regard to the circumstances of the case and with which the aggrieved person does not or is not able to comply. 7 Section 24(1A) is also relevant for the purposes of the following discussion. It provides:- S 24 (1A) For the purposes of subsection (1)(a), something is done on the ground of a person's sex if it is done on the ground of the person's sex, a characteristic that appertains generally to persons of that sex or a characteristic that is generally imputed to persons of that sex. 8 The Appellant's contention is that s24(1), properly construed, required the Tribunal to find that the requirement or condition imposed on the aggrieved person must have been imposed because of, or on the ground of, the aggrieved person's sex. That construction arises, says the Appellant, from a literal reading of the opening paragraph of s24(1) together with subsection (1)(b). If that construction is accepted as correct, the Appellant maintains that the complaints must fail in the absence of any evidence capable of establishing that permanency was imposed as a condition of salary progression (beyond the equivalent of level 8 of the permanent teachers pay scale), because the complainants were female. 9 On its face the provision reads in the manner contended for by the Appellants. However, on closer examination of the whole of s24, together with a consideration of its statutory context and the legislative history of the indirect discrimination provisions in the Act, it appears to the Panel that the literal meaning ought not prevail. 10 Firstly, taking the whole of s24, it is curious that s24(1A), which defines the scope of the phrase "on the ground of a person's sex" applies only to s24(1)(a). It is difficult to fathom why s24(1A) should be confined in that way, if the opening paragraph of s24(1) is to be read together with (1)(a) and (1)(b). Such a differential application of (1A) promotes potentially inconsistent results in the determination of complaints of direct and indirect discrimination. 11 For example, a complaint of direct discrimination on the basis that a complainant is treated less favourably because she menstruates (a characteristic that appertains generally to persons of the female sex) may be determined in the complainant's favour, whereas a complaint of indirect discrimination on the basis that a number of female complainants are required to comply with a requirement or condition because they menstruate, and with which they are not able to comply, may not satisfy the Tribunal that the requirement or condition was imposed on the ground of the complainants' sex (given that not all women, at every stage of their lives, in fact menstruate). 12 One only has to attempt to posit such examples of indirect and direct discrimination based upon the same characteristic of a complainant, be it sex or race or disability, to reveal a further anomaly in the construction urged upon the Tribunal by the Appellant. If the complainant is required to demonstrate that the perpetrator's actions are causally related to sex or race or disability, whether the complaint is one of direct or indirect discrimination, the two forms of discrimination, the subject of quite separate provisions in the Act, merge into one. Every act of indirect discrimination becomes an act of direct discrimination. 13 As a matter of policy and practice to date, the existence or non-existence of a reason for discrimination lies at the heart of the distinction between direct and indirect discrimination. As has been observed by the Hight Court in previous matters, indirect discrimination or "adverse effect discrimination" (see Street –v- Queensland Bar Association (1989) 168 CLR 461) "[signifies] that some criterion has been used or some matter taken into account which although it does not in terms, differentiate for an irrelevant or impermissible reason, has the same or substantially the same effect as if different treatment has been accorded precisely for a reason of that kind"; Waters –v- Public Transport Corporation (1991) 173 CLR 349 @ 357 per Mason CJ and Gaudron J. See also Australian Iron and Steel Pty. Ltd. –v- Banovic & Ors (1987) 168 CLR 165. 14 It is in this sense that indirect discrimination was enshrined in legislation in most Australian States, that is, not premised upon the reasons underlying the perpetrator's imposition of the condition, which although "facially neutral", nevertheless had an adverse impact upon those persons who were not able to comply with the condition. Thus, the imposition of a requirement or condition that students not wear hats to school may be motivated by a desire to standardise students' dress, but if it adversely affects the Sikh population of the school, in so far as it conflicts with the cultural and/or religious dictates of those students, namely the wearing of turbans, then it constitutes indirect discrimination. In other words, the causal relationship between the imposition of the requirement or condition and the complainant's race is neither here nor there; it is the differential nature of the impact of the requirement or condition, that is, its effect, which is central to the notion of indirect discrimination. The only relevance of race is in relation to the reasons for non-compliance with the requirement or condition by the complainants. 15 The structure of the indirect discrimination (sex) provision in NSW from its introduction until its amendment by the Anti Discrimination (Amendment) Act 1994 reflected this approach. Prior to 8 August 1994 the relevant provision appeared thus:- S 24(1) A person discriminates against another person on the ground of sex if, on the ground of – (a) his sex (b) a characteristic that appertains generally to persons of his sex ; or (c) a characteristic that is generally imputed to persons of his sex, he treats him less favourably than in the same circumstances or in circumstances which are not materially different, he treats or would treat a person of the opposite sex. (1A) ……………………………. (2)………………………………. (3) A person discriminates against another person on the ground of his sex if he requires the other person to comply with a requirement or condition – (a) with which a substantially higher proportion of persons of the opposite sex to the sex of the other 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 other person does not or is not able to comply. 16 It is immediately apparent that subsection (3) of this provision does not contain the qualification appearing in subsection (1), namely if on the ground of – (a) his sex (b) a characteristic that appertains generally to persons of his sex ; or (c) a characteristic that is generally imputed to persons of his sex. 17 That qualification, which imports the 'causative element' into the direct discrimination provision, and subsection (3) were re-drafted by the 1994 amending Act, to be consistent with the direct and indirect discrimination provisions, introduced by that Act, relating to disability. The 1994 Act (no. 28) primarily inserted the offence of HIV/AIDS Vilification (Schedule 2) and replaced Parts 4A and 4B of the principal Act (relating then to physical and intellectual "handicap") with new Parts 4A and 4B to accord with a vastly enlarged notion of disability. In the drafting of the new direct and indirect discrimination provisions relating to disability, the draftsperson collapsed two discrete subsections into one. This appears to have followed the form of age discrimination provisions introduced into the Act in 1993 (Act No 91). Schedule 4 of the 1994 Act effected what were described as "Miscellaneous Amendments", but which wrought the same fundamental change to the indirect discrimination provisions with respect to race, sex, marital status and homosexuality. 18 For the above reasons, the Panel regards the present s 24 of the Act as "ambiguous" in the sense that its meaning is doubtful ; R v Sharma [2002] NSWCCA 142. Section 34(1)(b)(i) of the Interpretation Act allows the Panel to have regard to extrinsic materials in order to clarify that doubt. Such a dramatic change could hardly be effected without some reference to its scope and rationale in the Second Reading Speech accompanying the introduction of the legislation in both 1993 and 1994, but no such reference appears. Rather, the changes in 1994 are described by the then Attorney General as "minor" (see Second Reading Speech of 4 May 1994, Hansard at p 1830). 19 Moreover, it could hardly be said that the literal interpretation promotes the purpose or object underlying the Act, which has been consistently amended, generally to extend the protections against acts of discrimination, both direct and indirect, rather than to contract them. Where the literal meaning "does not conform to the legislative purpose as ascertained from the statute as a whole, including the policy which may be discerned from its provisions, [a court] is entitled to give effect to that purpose by … omission from, or clarification of, the particular provision."; Saraswati v The Queen (1991) 172 CLR 1. 20 In our view, the legislature did not intend such a fundamental change to the policy and practice underlying all the indirect discrimination provisions in the Act, and the words "on the ground of the aggrieved person's sex" in s 24(1) should be confined to s 24(1)(a); Kingston v Keprose Pty Ltd (1987) 11 NSWLR 404 at 421. In the light of the inadvertence attending the changes in 1993 and 1994, we do not regard the fact that the construction is repeated throughout subsequent amendments to the Act as detracting from this conclusion. 21 Accordingly, the first ground of the appeal fails. Is Permanency a Requirement or Condition? 22 The Appellant contends that the Tribunal erred in accepting permanency as a "requirement or condition" within the terms of s 24(1)(b). The Tribunal's reasoning on this issue appears at paragraphs 8 to 14 inclusive of its decision. In short, the Tribunal determined that classification as a permanent member of the teaching service was a prerequisite "for winning access to the higher salary scales under the award and enterprise agreement". Reliance was placed upon a broad construction of the terms "requirement or condition"; Australian Iron and Steel Pty Ltd v Banovic (1989) 168 CLR 165. A similar argument to that mounted by the Appellant (as to which, see below) was also pressed but rejected by the Employment Tribunal of England and Wales in Home Office v Holmes [1984] ICR 678, cited with approval by McHugh J in Banovic. 23 The Appellant's argument, which was not accepted by the Tribunal at first instance, was that in the circumstances of this matter, the status of permanent employment had been "tortured" into a condition or requirement. According to the recruitment and application process through which all prospective teachers passed, permanent employment was a consequence of the acceptance of an offer of permanency, that acceptance being a function of the permanent position fulfilling the applicant's criteria, at a time when that applicant enjoyed priority of appointment. The corollary of this proposition was that the Respondents had so limited their criteria for a permanent position, that the failure to achieve permanency was of their own making. 24 Moreover, so the argument went, to characterise permanency as a condition or requirement fundamentally misrepresented the true position, namely that there are two quite separate pay scales (permanent and casual) reflecting differences in work value. In other words, the Respondents' submission (which was accepted by the Tribunal) that permanent and casual teachers perform work of equal value implies that they are therefore effectively on the same ladder (the same pay scale), as it were. Rather than characterising permanency as the requirement which prevents the Respondents from moving up the same ladder as those who already had permanency, in reality it is the Respondents' "election" to remain as casual teachers which has confined them to another ladder entirely. 25 It is not necessary for the purposes of this ground of appeal to explore more fully the procedure by which an applicant for a teaching position comes to be accorded either casual or permanent status. It is a topic which assumes some relevance to the determination of further grounds of appeal, that is, whether the Respondents did not or were not able to comply with the stated requirement of permanency and whether permanency was a requirement which was not reasonable having regard to the circumstances of the case. 26 The Respondents submit that this ground does not raise a question of law, rather that the Appellant is merely inviting the Panel to come to a different conclusion to that of the Tribunal below. The Panel disagrees. The proper construction of the term "requirement or condition" in the circumstances of this matter involves a question of law. However, the Panel is unpersuaded that the Tribunal erred in its approach to this issue. 27 In interpreting "requirement or condition" liberally, consistent with the policy objectives underlying the Act, the courts have been concerned with the practical effects of any stipulation, qualification or prerequisite, which the complainant must satisfy: Re:The Secretary of the Department of Foreign Affairs and Trade And Helen Styles & Philip Arthur Harrison 88 ALR 621; 23 FCR 251 ; Waters & Ors v Public Transport Corporation [1991] 173 CLR 349. There is no basis for rejecting the status of permanent employment as capable of meeting that construction. On the contrary, there is ample authority to support it. The correct approach to this issue, in the Panel's view, is to determine whether there is a stipulation or prerequisite placed upon the complainant, disregarding the rationale for such a condition, and then and only then, turn to a consideration of an asserted rational in the context of whether the condition is reasonable in all the circumstances. The Appellant's argument confuses what is capable of constituting a condition or requirement with the rationale underlying it. 28 This ground of appeal also fails. Substantially Higher Proportion of Males who Comply? 29 The Appellant also took issue with the Tribunal's conclusion that a substantially higher proportion of male teachers complied or were able to comply with the requirement of permanency. The gravamen of the Appellant's complaint was that the calculation undertaken by the Tribunal was fundamentally flawed. The Respondent maintained that this aspect of the Tribunal's decision was a question of fact which is beyond the scope of this appeal. 30 In the course of their judgment in Banovic (at 178-179), Deane and Gaudron JJ said:- "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 … 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 …. 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." 31 The calculation undertaken by the Tribunal at para 15 of its decision was based upon the total number of permanent male teachers as a percentage of the total number of male teachers, compared with the total number of permanent female teachers as a percentage of the total number of female teachers. Those respective percentages were 79% and 59%. Thus, there was said to be a substantially higher proportion of male teachers who complied with permanency than female teachers. Did the selection of the base groups, that is, the total number of male teachers and the total number of female teachers, ascertain whether sex is significant to compliance? Did the Tribunal take irrelevant considerations into account or did it fail to take relevant considerations into account in formulating the respective base groups? That is a question of law in respect of which the Panel has jurisdiction. 32 The Appellant submitted that the Tribunal committed a fatal error in the selection of the base groups. Of the total number of male (22,953) and female (55,874) teachers, 10,639 (both male and female) were casual teachers who had made no application for a permanent position. Firstly, there was no evidence of the gender makeup of that 10,639, and secondly, it was not open to the Tribunal to speculate whether that number had been unable to comply or had deliberately chosen casual employment over permanent employment. In other words, the Tribunal had "inflated" the respective base groups with an unknown number of teachers who may never have had any intention of applying for a permanent position. The Appellant's contention was that, at the very least, the calculation had taken account of a number of casual teachers who had not applied for permanency, a component which constituted an irrelevant consideration. 33 The difficulty inherent in the selection of the appropriate base group in a given case has been the subject of comment in Banovic. Dawson J (at 187) referred to the two contrasting approaches taken by the English Tribunals as the narrow approach, whereby the base group is confined to the particular group of persons to whom the requirement is directed, and the broad approach, whereby the base group is identified beyond the immediate context. In discussing (and implicitly approving) the contextual or narrow approach, Dawson J indicated that the touchstone is those employees who are affected by the requirement or condition. 34 Similarly, McHugh J (at 200) speaks of the denominator, or base group in each case as "the number of members of that sex to whom the requirement or condition is directed" and later, as "the number of persons of that sex who are required to comply with the requirement or condition and who are divided or segregated by it" (at 202). Further, Pincus J in Styles, albeit he was in the minority, adopted an approach to the calculation of proportions which was vindicated by McHugh J in Banovic. Relevantly, Pincus J said "Each base pool must be set at such a size as to exclude those who are only theoretically affected by the requirement or condition;…. As to selection of personnel for appointment or transfer, then, one must confine the base pools to those who, but for the impugned requirement or condition, might rationally be regarded as entitled to consideration." It is critical, however, to observe that these comments in the High Court and the Federal Court were made in the context of rejecting the broad approach, previously adopted by Mahoney and Priestley JJ in the NSW Court of Appeal in Australian Iron & Steel Pty Ltd v Najdovska (1988) 12 NSWLR 587, whereby the relevant denominators were held to be the respective male and female populations of NSW. It is in that context that McHugh J refers to the number of persons who are required to comply and Pincus J refers to those who might rationally be regarded as entitled to consideration. 35 This analysis suggests that the base groups should be identified by reference to the respective number of men and women in the teaching service who might rationally be regarded as entitled to equal pay for equal work, but for the requirement of permanency. In other words, the fact that a substantial number of casual teachers had not in fact sought permanency has no bearing on the fact that the requirement was nonetheless directed at them as casual employees. It was appropriate for the Tribunal to take account of the total number of casual teachers in arriving at the respective male and female denominators, for the purposes of calculating the proportion of males (of the total male workforce) who held permanent positions, compared with the proportion of females (of the total female workforce) who held permanent positions. The Panel is not persuaded that the Tribunal fell into error in this regard. 36 Even if the Panel and the Tribunal have erred in their approach to this issue, and the pool of casual employees who have not applied for permanency should be excluded from the calculations, it appears that the same result would be obtained. Accepting that 29% of the total teacher population is male (22,953 of 78,827) and 71% of the total teacher population is female (55,874 of 78,827), those who did not apply for permanency (10,639) might be subtracted from the total teacher population, leaving 68,188. Preserving the male to female ratio of all teachers, 19,774 (29%) are male and 48,413 (71%) are female. (We acknowledge that these percentages are based upon a pool which includes the impugned casuals, but the Appellant took no issue with the gender makeup of the whole of the teaching service) Calculating the number of male teachers with permanency as a percentage of 19,774 gives 92%, while the number of female teachers with permanency as a percentage of 48,413 gives 68%. In short, the same substantially higher proportion of males comply with permanency than females, even allowing for the inclusion of an arguably irrelevant component. 37 No issue was taken with a percentage of 20% being a substantially higher proportion of males in the circumstances of the case. This ground of appeal also fails. Does Not or Is Not Able to Comply 38 The Appellant repeated to the Panel the submission made to the Tribunal below, namely that the phrase "does not or is not able to comply" in s 24(1)(b) should be read conjunctively, not wholly disjunctively. That construction followed, it was said, from the fact that a complainant who was unable to comply, also did not comply. Accordingly, the phrase necessarily imported an incapacity to comply. It was not satisfied where the complainants were able to comply with the requirement of permanency, albeit at some inconvenience. Permanency was something which was readily available to them (relying upon the dicta of Wilcox J in Styles v The Secretary of the Dept of Foreign Affairs and Trade (1988) 84 ALR 408). 39 The same words in the same statutory context were considered by the Federal Court in Australian Medical Council v Wilson (1996) 68 FCR 46 ; 137 ALR 653. In reply to the submission that the phrase "does not comply" refers to "some immutable characteristic of the individual that prevents him or her ever complying with the relevant condition", Sackville J pointed out that the words "cannot comply" would appear to support that construction, but that the former phrase did not. Relevantly for present purposes, Sackville J said :- A particular individual within a group subjected to discriminatory practices often will have some chance of complying with the offending condition or requirement. The chances of compliance may depend on how the condition is administered, or on whether the individual is able to overcome the practical obstacles placed in his or her path by the invidious condition or requirement. … [The] purpose [of the indirect discrimination provision] is satisfied if the relevant individual in fact does not comply with the condition or requirement, regardless of whether the non-compliance flows from some immutable characteristic or from a different cause. 40 Thus it is sufficient if the complainants in fact do not comply with the requirement of permanency. The Tribunal committed no error of law in its consideration of this issue at paras 47 to 49 inclusive. It was open to the Tribunal to find as a fact that the complainants did not comply where they had "no effective choice but to submit to the discriminatory regime … [in circumstances] where for family reasons, a female teacher chooses to be at home to raise her children and support her partner." (para 48) 41 This ground of the appeal also fails. A Requirement which is Not Reasonable Having Regard to the Circumstances of the Case. 42 This aspect of the Tribunal's decision occupied paras 18 to 46 inclusive. It is convenient, given the nature of the material relevant to this issue, to review the applicable principles which were distilled in the course of Sackville J's judgment in Commonwealth Bank v HREOC 150 ALR 1 at 32 – 35. 43 Firstly, "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." (per Bowen CJ and Gummow J in Styles at FCR 263; ALR 634) Because the test is objective, the subjective preferences of the complainant cannot be determinative of the reasonableness of the requirement or condition, although subjective preferences may be relevant. 44 Secondly, the question whether the requirement or condition is unreasonable must be uninfluenced by any concept of discrimination which exists outside the statutory definition. 45 Thirdly, the complainant bears the onus of establishing that the requirement or condition is unreasonable in the circumstances of the case. Any difference in the treatment of the complainant compared with other employees is not prima facie discriminatory and therefore unreasonable. 46 Fourthly, while non-reasonableness is a question of fact for the Tribunal, the failure to consider a relevant factor in the circumstances of the case is an error of law. Relevant factors differ from case to case, but will usually include the financial or economic circumstances of the alleged discriminator, including its ability to accommodate the needs of the complainant. 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. Reasonableness:- "must be determined by reference to the activity … in which the putative discriminator is engaged. Provided the purpose of the activity … 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 …. 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 … ; secondly, whether the activity could be performed …. without imposing a requirement or condition that is discriminatory … 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 … 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." ( per Brennan J in Waters at 378) 47 Fifthly, it is no part of this exercise to determine whether the decision to impose the requirement or condition was the correct one. The question is not simply whether the alleged discriminator could have made a better or more informed decision. The presence of a logical and understandable basis for the requirement or condition is a factor in determining whether the requirement is reasonable. 48 Turning to the Tribunal's discussion of this issue, it is difficult to escape the impression that the Tribunal misapplied the onus. At no stage does the Tribunal articulate that the onus to establish the unreasonableness of the requirement of permanency lay upon the complainants. The language of the discussion implies that the Tribunal was unpersuaded of the reasonableness of the requirement by the evidence in the respondent's case. For example, after referring to the relevant factors to be weighed, the Tribunal says "there was no evidence before the Tribunal to indicate that financial or economic considerations, such as might be relevant to budgetary appropriation by the Parliament explained the difference in treatment of men and women teachers or that the budget would be adversely affected by a conclusion that the condition or requirement is unlawful." (para 19) Further in the same para the Tribunal states that "if there is no sensible factor to explain the difference in treatment other than the policy itself then a significant question must arise as to its reasonableness if left unexplained." 49 Paras 21, 22, 23, 24, 25, 26 and 27 all address factors relied upon by the respondent to support the contention that the requirement was a justifiable adjunct to the administrative and professional demands of maintaining a flexible teaching service. The Tribunal was, of course, entitled to address the arguments of the respondent, but comments such as "in our view the evidence does not support this proposition" (para 20), "the issue was not pursued in any detail in the evidence" (para 21), "the evidence did not suggest " (para 22) and "little specific evidence was provided on this point" (para 24) combine to establish a fundamental flaw in the Tribunal's approach to this issue. 50 Furthermore, nowhere in the course of the Tribunal's treatment of the issue of reasonableness does the Tribunal engage in the exercise of weighing the nature and extent of the discriminatory effect on the complainants against the reasons advanced in favour of the requirement or condition. The Tribunal does discuss "the general nature of the case presented by the complainants" (para 39) in the context of the debate about work value and the Tribunal also refers to the circumstances under which the complainants surrendered their former permanent status (that is, because of their desire to raise children) and which now "limit" their access to permanency (at para 46). Otherwise, the Tribunal is preoccupied with the rejection of the reasons advanced in favour of the requirement or condition. Specifically, the Tribunal rejects the fact that the complainants themselves limited the basis upon which they would accept permanency, as relevant to the determination of the reasonableness of the requirement. (See para 40, where the Tribunal discounted as irrelevant the fact that "many of the complainants in seeking to review their professional careers, placed territorial limits upon their place of work for family reasons".) 51 The obligation upon the Tribunal to examine the nature and extent of the discriminatory effect of the requirement on the complainants called for an assessment of how and to what extent the requirement impacted upon the complainants. The subjective preference of each of the complainants was a relevant factor in this exercise. As the Tribunal itself recognised, it was not a case of the complainants being denied permanency; they could have permanency and thereby have access to the applicable pay scale, if they were prepared to accept teaching positions outside their nominated geographical areas. 52 These errors on the part of the Tribunal call for a reappraisal of this element of the complainants' case. Before embarking on that exercise, it should be observed that the Panel is also persuaded that the Tribunal was influenced by considerations of alleged discriminatory practices as between permanent and casual supply teachers, arising out of the determination of the relevant award in the NSW Industrial Commission, in determining whether the requirement was unreasonable (see paras 35, 36 and 58). That is not a form of discrimination which finds expression in the Act; see Waters at 365, 378, 383-384, 394-396, 409-410; Commonwealth v HREOC (1995) 63 FCR 74 at 96; 133 ALR 629. 53 The evidence before the Tribunal established the nature and extent of the discriminatory effect of the requirement on the complainants in the following way. With the exception of two complainants, all were formerly permanent teachers in the employ of the Appellant, but resigned in order to devote themselves entirely to the demands of raising a family. All of the complainants later sought to return to the teaching service and accordingly took up employment as supply casual teachers or long term casual teachers. As at the 8 August 1994 all of the complainants were being remunerated at the top of the casual pay scale, that is level 5, the equivalent of level 8 of the permanent pay scale. It is correct to observe, as did the Tribunal, that payment at level 5 of the casual pay scale represented a decrease in salary from that which the complainants had received whilst they were in permanent employment. However, the Tribunal went on to identify the nature and extent of the discriminatory effect of the requirement of permanency on the complainants by reference to the "assertion that the work performed by the women is of no less equal value than the work they had performed as permanent staff (in most cases) and of no less equal value than the work of comparable professionals in the same service who have throughout the period of the claim been permanent staff." (see paragraph 40) 54 In addressing the question of the nature and extent of the discriminatory effect as a work value issue, the Tribunal misdirected itself and acted beyond jurisdiction. Whatever the anomalies and discrepancies inherent in the pay scales applying to casual and permanent staff, there was no basis upon which the Tribunal was entitled to consider that they were premised on gender. Rather they arose (if at all) as a result of a series of cases before the NSW Industrial Commission beginning in 1983. It is one thing to acknowledge the complainants' argument that these anomalies "map discriminatory gender divisions" (para 35), it is another thing entirely to adopt such an argument (as the Tribunal appears to have done) for the purposes of determining whether the requirement is unreasonable. Disregarding then, the analysis undertaken by the Tribunal as to the relative work value of casual compared to permanent teachers, it is necessary, in the context of the nature and extent of the discriminatory effect on each of the complainants, to examine the circumstances under which each complainant claimed that they were prevented from accessing the pay scale applicable to permanent teachers. 55 Ms Amery limited her application for permanency to the Kogarah area because of her pastoral obligations. Ms Bovard limited her availability for permanent employment to fourteen schools on the Northern Beaches. Ms Douglas limited her availability for permanent employment to special schools in certain districts. Ms Drury limited her availability for permanent employment to Parramatta. Ms Freeman limited her availability for permanent employment to the Campbelltown district and being an Arts teacher. Ms Hancott limited her availability for permanent employment to one school. (The Appellant at first instance placed considerable reliance upon the evidence which established that Ms Hancott was prepared to move to the Blue Mountains to work in a newsagency purchased by her husband.) Ms Irvine limited her availability for permanent employment to the Penrith district and being a History teacher. Ms McHugh limited her availability to four schools. Ms Mors limited her availability for permanent employment to two schools on the North Coast and certain areas of the South Coast; however, she later limited her availability to certain areas of the South Coast, the Port Jackson area, the Murwillumbah area, Gloucester High, Oberon Central and Young Technology high schools. Ms O'Loan limited her availability to schools within a reasonable travelling distance from her home at Baulkham Hills. Ms Platt limited her availability to schools within a fifty kilometre radius of Tenterfield and subsequently to various schools located on the North Coast. Ms Pursche limited her availability to a school within 10 kilometres of her home and subsequently to Asquith Girls High School. Ms Skelton limited her availability for permanent employment to schools within a reasonable travelling time from her home at Drummoyne. 56 In order to place this evidence in its proper context, it is helpful to undertake a brief analysis of the evidence before the Tribunal with respect to the process by which teachers come to be employed within the NSW teaching service, whether as casual or permanent officers. Whilst ss 47 and 50 of the Teaching Services Act 1980 respectively invests the Director General of Education with the power to appoint permanent and temporary staff, all applicants for appointment who have the appropriate qualifications in fact pass through the same "gate". The date of an application for employment is designated as the "priority date"; in that application, the applicant can specify whether permanent or part time or casual employment is required, and can specify broad or narrow geographical areas, qualifications and interests in terms of subjects. The approval to teach is generally granted as approval to teach casually, it being unlikely that a permanent position meeting all of the applicant's criteria, and in respect of which the applicant has priority, is immediately available. When a vacancy in a permanent position arises, applications for permanency are ranked according to their priority date and the criteria nominated by the applicant. If that position is offered and declined, the priority date for that applicant becomes the date of declination. Thus, permanency becomes a function of the availability of a permanent position, the assigned priority date and the criteria stipulated by the applicant. 57 Against this background, there is much force in the Appellant's submission that the nature and extent of the discriminatory effect upon the complainants is the denial of permanency at locations and, in some cases, in subject areas, of their choosing. A consequence of that denial is that they remain on a pay scale which limits their remuneration, compared with permanent teachers, but that consequence has a rational and understandable basis, namely the relevant enterprise agreement and award. That is, in the opinion of the Panel, a very important factor in determining whether the requirement of permanency is reasonable in all the circumstances : see Commonwealth Bank v HREOC at 34 per Sackville J. It is no part of the function of the Tribunal or this Panel to determine whether the NSW Industrial Commission was correct in determining the enterprise agreement and the award; the fact that they govern the conditions of employment of permanent and casual teachers is what underpins the Appellant's treatment of the complainants. 58 The reasons advanced by the Appellant in favour of the requirement generally fell under the two aspects identified by Brennan J in Waters, namely, that the imposition of the requirement was appropriate and adapted to the performance of the teaching service, and that the teaching service could not function satisfactorily without imposing the requirement. Of some significance to both of those aspects, the complainants operate in a professional environment where a limited number of permanent positions are available at any given time in any given place, and the Director General has an obligation to apply an objectively fair procedure for all persons wishing to acquire permanency. It is not difficult to envisage the industrial unrest which would flow from the application of a differential procedure which benefited a particular category of applicant. Nor is it difficult to recognise the practical impossibility of designing an alternative procedure which takes account of the myriad reasons why individual applicants may prefer permanent appointment to a narrow geographical area. 59 The reasons advanced by the Appellant at first instance in favour of the requirement concentrated largely on the benefits which accrue from the maintenance of a sufficiently large pool of casual teachers so as to be able to meet the changing needs of the teaching service. These reasons (the ability to provide continuity of teaching services and staffing flexibility throughout State schools, the need to provide for fluctuations in student enrolments in particular schools, the need to address changing curricula patterns, and the need to provide relief from face to face teaching) are not outweighed by the nature and discriminatory effect of the requirement on the complainants. The complainants did not discharge the onus upon them to demonstrate the unreasonableness of the requirement in all the circumstances of the matter. 60 This ground of the appeal succeeds. A finding in favour of the Appellant absolves the Panel of the need to deal with the Respondents' cross appeal as to costs and interest on damages. Accordingly, the orders are:- 1. The Appeal is allowed. 2. The Complaints of indirect discrimination are dismissed. 3. The Cross Appeal is dismissed. DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.