Appeal Panel - Internal CITATION: Fluor Australia Pty Ltd v Tanevski (EOD) [2009] NSWADTAP 39 Appellant: Fluor Australia Pty Ltd PARTIES: Respondent: Risto Tanevski FILE NUMBER: 089067 HEARING DATES: 1 April 2009 SUBMISSIONS CLOSED: 1 April 2009 DATE OF DECISION: 24 June 2009 BEFORE: Chesterman M - Deputy President; Perrignon R - Judicial Member; Antonios Z - Non-Judicial Member CATCHWORDS: Discrimination – indirect discrimination – 'common knowledge' – defence of statutory authority DECISION UNDER APPEAL: Tanevski v Fluor Australia Pty Ltd [2008] NSWADT 217 FILE NUMBER UNDER APPEAL: 071096 Administrative Decisions Tribunal Act 1997 Anti-Discrimination Act 1977 LEGISLATION CITED : Interpretation Act 1984 (WA) Occupational Health and Safety Act 2000 Race Relations Act 1976 (UK) Australian Iron & Steel Pty Ltd v Banovic & Ors (1989) 168 CLR 165 Bonella & Ors v Wollongong City Council [2001] NSWADT 194 Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission (1997) 80 FCR 78 Commonwealth of Australia v Human Rights and Equal Opportunity Commission (1998) 152 ALR 182 Director-General, Department of Education & Training v FR and EQ on behalf of FR (EOD) [2003] NSWADTAP 51 IW v City of Perth (1997) 146 ALR 696 Kidd v DRG (UK) Pty Ltd [1985] ICR 504 CASES CITED: Kumaran v Rail Infrastructure Corporation & Anor [2005] NSWADT 30 Kumaran v Rail Infrastructure Corporation (EOD) [2005] NSWADTAP 41 Orphanos v Queen Mary College [1985] 1 AC 761 Perera v Civil Service Commission [1982] IRLR 147 State of Victoria v Schou (No 2) (2004) 8 VR 120 Tanevski v Fluor Australia Pty Ltd [2008] NSWADT 217 Waters v Public Transport Corporation (1991) 173 CLR 349 Wollongong City Council v Bonella & Ors and Bonella & Ors v Wollongong City Council (EOD) [2002] NSWADTAP 26 Z v Director-General of Transport (No 2) (GD) [2001] NSWADTAP 18 Appellant Representative: G Hatcher SC E Raper, barrister REPRESENTATION: Respondent Representative: S Crawford, agent Z Angus, agent 1. The appeal is allowed. ORDERS: 2. Order 3 in the Tribunal's decision of 7 August 2008 is set aside. 3. The parts of the case identified at paragraph [118] of these reasons are to be heard and decided again by the Tribunal as originally constituted, with leave being granted to the parties to adduce further evidence if they so wish. 4. The remitted proceedings are set down for a case conference at 9.30 a.m. on 6 July 2009. REASONS FOR DECISION Introduction 1 The issues raised in this appeal relate to the interpretation and application of provisions in the Anti-Discrimination Act 1977 ('the AD Act') relating to indirect discrimination on the ground of race. 2 The principal events leading to the institution of the proceedings are summarised as follows in paragraph [1] of the decision under appeal (Tanevski v Fluor Australia Pty Ltd [2008] NSWADT 217):- Mr Risto (Chris) Tanevski migrated to Australia from Macedonia in 1967 when he was 20 years old. At that time he spoke no English. He has worked in rail maintenance for 40 years, including 31 years as a supervisor. In 2001, Fluor Australia Pty Ltd (Fluor) took over the rail maintenance contract at the Port Kembla steel works where Mr Tanevski had been working. Fluor employed Mr Tanevski to supervise about 20 people who were maintaining rail tracks used by Bluescope Steel Ltd at the site. Fluor says that because of concerns about his ability to read and write adequately to perform his duties and the resulting safety implications, they removed Mr Tanevski from his supervisory position at the end of 2006. He was 60 years old at the time. Mr Tanevski was allocated to a project assisting another supervisor and given a smaller vehicle. A few days later Mr Tanevski became stressed and anxious and could not continue working. He said that he was sick and left work to see a doctor. He has not returned to work since that time. 3 Mr Tanevski lodged a complaint with the Anti-Discrimination Board. The Board, following an unsuccessful attempt to resolve the complaint by conciliation, referred it to the Tribunal. In the Tribunal proceedings, Mr Tanevski claimed that Fluor, his employer, had discriminated against him on grounds of race and of age. 4 In its decision, delivered on 7 August 2008, the Tribunal upheld Mr Tanevski's claim of indirect race discrimination under sections 7(1)(c) and 8(2) of the AD Act. It dismissed his claims of direct race discrimination and of age discrimination. The Tribunal's findings 5 The principal findings of fact on which the Tribunal based its decision are as follows. 6 Mr Tanevski is from Macedonia and lived there for the first twenty years of his life. The Republic of Macedonia is a nation in Europe where the official language is Macedonian. 7 Mr Tanevski was employed as a supervisor at the Port Kembla steelworks for a significant number of years before Fluor's acquisition (in 2001) of the rail maintenance contract at this site. He remained in the position of supervisor. In the period of relevance to these proceedings, there were two other supervisors. In general terms, his performance of his duties gave no cause at all for complaint. 8 At the end of 2005, Fluor appointed Mr Leigh Twigg as a Track Superintendent. Mr Twigg, who was Mr Tanevski's immediate supervisor, soon realised that Mr Tanevski had problems reading and writing in English. He became aware also that Mr Tanevski often received assistance from fellow-employees in reading documents written in English and in completing paperwork in the course of his duties. Mr Twigg himself provided assistance of this nature. But it appeared to Mr Twigg and to Mr Wroniak (Mr Twigg's immediate supervisor) that newly engaged employees did not know Mr Tanevski as well as their predecessors, with the consequence that he could not rely on this assistance as much as he had previously done. 9 The Tribunal's own findings as to Mr Tanevski's literacy level (set out at [18], [19] and [23]) were (a) that he could not read well enough to review job orders created by 'leading hands' (though he could read 'basic English') and (b) that he could not complete purchase requisition forms or write incident reports or statements (though he could fill in 'basic forms' and he knew 'which box to tick' once this had been shown to him). These documents that he could not read, prepare or complete properly were all documents with which he was required to deal in the course of his duties as a supervisor. 10 A number of these documents were required in order to comply with Fluor's health safety and environmental (HSE) management plan. In July 2006 Fluor revised and updated this plan. It was the responsibility of managers within Fluor to ensure that the employees received sufficient training in the new system to enable them to understand it. Apart, however, from taking part in a discussion of the new forms to be introduced, Mr Tanevski did not receive any such training. He did attend training courses, provided by Bluescope Steel, on other topics (for example, completing the forms required to do rail isolations). But because the skills of those attending were not adequately assessed, employees with poor reading and writing skills could complete them without actually filling in any forms. Mr Twigg admitted in his evidence to the Tribunal that these courses were not properly conducted. 11 During 2006 Fluor also commissioned a report, known as the Marshall Report, into safety issues at the Port Kembla site. The report identified 'management of low English literacy standards of personnel' as the most important matter needing improvement and expressed the opinion that employees with English literacy problems would not be able to read and understand the requirements of Fluor's safety procedures while they were in their current form. 12 The Tribunal observed, however, at [72] that Mr Coates, who was Fluor's Director of Operations and Maintenance, 'did not bring to our attention a single incident relating to safety involving Mr Tanevski that had been caused by his low level of literacy.' Similarly, it said, Mr Wroniak could not recall any such incident. It added that two previous supervisors of Mr Tanevski gave 'glowing reports' about his safety record. At [78], the Tribunal indicated that it had not accepted evidence from Mr Coates that if Mr Tanevski remained in his position he could put himself and others at risk. 13 During November 2006, in the course of meetings involving Mr Tanevski, Mr Twigg and Mr Wroniak, Mr Tanevski was notified that he was to be moved out of his supervisory role in order to work on a six-week project assisting another supervisor. He was told that the reason for this was his low level of literacy in English and his consequent inability to implement Fluor's HSE system satisfactorily. 14 A topic discussed at the last of these meetings was the provision of English language training for Mr Tanevski. No such training had previously been offered to him by Fluor. Mr Tanevski did not reject this form of assistance, but he did not specifically request it, and Mr Wroniak commented that it was a 'long term proposition'. At the same meeting, Mr Tanevski indicated that he planned to retire at or towards the end of 2007. For these reasons, and because the six-week project was available for him to take part in straightaway, the question of English language training was left unresolved. 15 At [32], the Tribunal summarised as follows its findings relating to Fluor's decision to remove Mr Tanevski from his position as a supervisor:- The Marshall Report into safety issues had identified "management of low English literacy standards of personnel" as the most critical area for improvement. This, as well as certain incidents in the workplace, led Mr Twigg to focus on Mr Tanevski's low level of English literacy and to point out various writing and reading tasks that he was unable to perform…. While Mr Tanevski had previously been able to overcome these deficiencies by relying on others, Mr Twigg and Mr Wroniak noticed that there were fewer people available to perform this role and Mr Twigg, in particular, was not prepared to continue to do so. Fluor saw Mr Tanevski's low level of written English skills as being a potential risk to safety in the workplace. The immediate trigger for removing Mr Tanevski from his supervisory role was Fluor's conclusion that he was unable to comply with the new HSE system and the consequent concerns about safety. Mr Tanevski accepted that he was removed from his supervisory job because of Fluor's view that he was unable to perform his duties as a supervisor because of his English literacy problems and that that represented a safety issue. 16 The Tribunal accepted evidence from Fluor's witnesses that since Mr Tanevski was a long-term employee Fluor did not intend to terminate his employment after the six-week project finished. It concluded that the consequences of his being removed from his position as supervisor were that he was given a lower status job and a smaller vehicle, but that his remuneration and other entitlements were not affected. As mentioned above, however, Mr Tanevski became stressed and anxious after being notified of this change in his position. He could not continue working and has not returned to work since that time. Relevant legislation 17 As already stated, the Tribunal held that Fluor's conduct as Mr Tanevski's employer amounted to unlawful discrimination – specifically, indirect discrimination – against him on the ground of his race. In so doing, it referred to sections 4, 7, 8, 54 and 104 of the AD Act. 18 Under section 4, 'race' is defined to include 'colour, nationality, descent and ethnic, ethno-religious or national origin'. 19 Indirect race discrimination is defined as follows in section 7(1):- (1) A person ("the perpetrator") discriminates against another person ("the aggrieved person") on the ground of race if, on the ground of the aggrieved person's race or the race of a relative or associate of the aggrieved person, the perpetrator: … (c) requires the aggrieved person to comply with a requirement or condition with which a substantially higher proportion of persons not of that race, or who have such a relative or associate not of that race, 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. 20 Relevant provisions within section 8(2) are as follows:- (2) It is unlawful for an employer to discriminate against an employee on the ground of race: (a) in the terms or conditions of employment which the employer affords the employee …or (c) by dismissing the employee or subjecting the employee to any other detriment. 21 Section 54 of the AD Act provides a defence of statutory authority. It states:- (1) Nothing in this Act renders unlawful anything done by a person if it was necessary for the person to do it in order to comply with a requirement of: (a) any other Act, whether passed before or after this Act… 22 By virtue of section 104, the onus of proving this defence lies on the party invoking it. 23 The Tribunal also referred to section 8(1) of the Occupational Health and Safety Act 2000. It states:- (1) An employer must ensure the health, safety and welfare at work of all the employees of the employer. That duty extends (without limitation) to the following: (a) ensuring that any premises controlled by the employer where the employees work (and the means of access to or exit from the premises) are safe and without risks to health, (b) ensuring that any plant or substance provided for use by the employees at work is safe and without risks to health when properly used, (c) ensuring that systems of work and the working environment of the employees are safe and without risks to health, (d) providing such information, instruction, training and supervision as may be necessary to ensure the employees' health and safety at work, (e) providing adequate facilities for the welfare of the employees at work. Unchallenged rulings made by the Tribunal 24 In its appeal, Fluor has not challenged (at least, not to any significant degree) any of the following rulings set out, at the paragraphs indicated, in the Tribunal's decision:- 1. Mr Tanevski's 'national origin' and therefore his 'race', as defined in section 4, are Macedonian ([40]). 2. By giving Mr Tanevski a lower status job and a smaller vehicle, Fluor changed his 'terms or conditions of employment' under section 8(2)(a) and subjected him to a 'detriment' under section 8(2)(c) ([44 – 45]). 3. Mr Tanevski bore the onus of proof in relation to all the matters specified in section 7(1)(c) ([55]). 4. Fluor insisted that he comply with a 'requirement' under section 7(1)(c), namely, that he 'had to have a literacy level that enabled him to write incident reports and statements in English and fill in purchase requisition reports' ([58]). We will refer to this requirement (as did the Tribunal) as 'the literacy requirement'. 5. Mr Tanevski could not comply with the literacy requirement ([59]). The 'substantially higher proportion' test 25 A significant component of the challenge to the Tribunal's decision mounted by Mr Hatcher SC, counsel for Fluor, related to its application of the 'substantially higher proportion' test contained in section 7(1)(c). 26 Mr Hatcher did not question the following observations made by the Tribunal regarding this test (at [60]):- Section 7(1)(c) requires a comparison between the proportion of Macedonians and people "not of that race" who can comply with the [literacy] requirement. Three issues arise: a) to whom is the requirement directed? (identification of base group); b) how should the base group be split to make the comparison? (identification of pools); and c) whether the rate of compliance and the degree of disparity amount to a substantially higher proportion (rate and disparity of compliance). 27 Fluor's challenge to the Tribunal's judgment did however focus predominantly on the answers that the Tribunal gave to each of these three questions. Identification of the 'base group' 28 At [61], the Tribunal explained its approach in identifying this group:- Generally the relevant group is all the people to whom the requirement or condition is applied, or is potentially applicable. In this case, there was no evidence as to whom the requirement was directed, but it is consistent with the evidence that it was directed, at least, to the three supervisors. It is obvious that three is too small a group from which to draw any valid conclusions about the impact of the requirement. In order to determine whether the requirement has a disparate impact on Macedonians, the base group needs to be broadened to include all employees of Fluor who aspired to be a supervisor, but who may or may not have been able to comply with the literacy requirement. We do not know how many people fall within this group. 29 The Tribunal briefly returned to this issue at [64]. It observed: 'However, as we have said, a base group of three is too small to draw any valid conclusions about the impact of the requirement'. In this paragraph, and again at [66], it used language implying that the base group should be employees who were eligible to be supervisors, not employees who aspired to be appointed to this position. 30 Mr Hatcher contended that four errors of law could be discerned in this approach adopted by the Tribunal. 31 The first was that the Tribunal should have held that it was for Mr Tanevski, not the Tribunal or Fluor, to identify the base group and to tender relevant evidence relating to its composition, and that he had failed to satisfy these requirements. In support of this submission, Mr Hatcher cited the Tribunal's decision in Bonella & Ors v Wollongong City Council [2001] NSWADT 194 at [78]. The relevant sections of this paragraph are as follows:- In this case [a case of alleged indirect discrimination by an employer on the ground of sex] there was dispute between the complainants and the respondent concerning the composition of the base group or pool… [Counsel for the respondent] submitted, quite correctly in our opinion, that it was for the complainants to properly identify the relevant base group and that the law cast no onus upon the respondent to correctly identify the relevant base group if it chose to challenge the complainants' identification of that group. Thus, our task is not to choose between competing base groups, but to determine whether the complainants have correctly identified that group. 32 Mr Crawford, who appeared as agent for Mr Tanevski, argued that this passage did not expressly rule out identification of the base group by the Tribunal. Its immediate concern was to dispel any notion that the respondent was required to undertake this task. Mr Crawford relied also on the broad provisions in sections 73(1) and 73(2) of the Administrative Decisions Tribunal Act 1997 ('the ADT Act') to the effect that the Tribunal may 'determine its own procedure' and 'may inquire into and inform itself on any matter in such manner as it thinks fit'. 33 In our judgment, the passage cited from Bonella does not preclude the Tribunal from playing any role at all in the identification of a 'base group'. Implicit support for this proposition may be found in the Appeal Panel's decision in Kumaran v Rail Infrastructure Corporation (EOD) [2005] NSWADTAP 41. The Panel did not question the Tribunal's adoption of a base group that had been identified by the first respondent, not the applicant (see Kumaran v Rail Infrastructure Corporation & Anor [2005] NSWADT 30 at [52]). 34 Notably in proceedings in which the applicant is self-represented, injustice could well result if the Tribunal required the applicant to perform this operation, which is often is far from straightforward, without any input from any other party or, indeed, from the Tribunal. Something in the nature of a dialogue between the Tribunal and the parties will often be desirable. 35 Secondly, Mr Hatcher argued that if the Tribunal was minded (as he put it) to 'recreate and expand' the base group beyond the three supervisors (this being the group to which the literacy requirement was immediately directed), it was obliged, but had failed, to notify the parties of this intention before handing down its decision. The Tribunal's failure in this regard amounted to a denial of procedural fairness. 36 Mr Crawford's response to this submission was that the Tribunal took account of all the relevant evidence and did not err in concluding that its definition of the base group was appropriate in all the circumstances. 37 We have read the 'Tribunal's summary of complaint', which notes matters agreed by the parties at a case conference prior to the hearing by the Tribunal. A brief note relating to the claim of indirect discrimination includes the phrase 'higher proportion of people with Anglo heritage'. The summary does not otherwise refer, directly or indirectly, to the question of how the base group should or might be identified. 38 We have also consulted the transcript of the two days of hearing. The issue of what should be treated as the base group was not addressed specifically, either by counsel or by the Tribunal. The only indirect reference to this issue occurred when Ms Angus, who appeared for Mr Tanevski, pointed out in the course of opening her case that the literacy requirement was a condition that Fluor required of 'the supervisors' (see Transcript, 20.12.07, p 5, line 50 to p 6, line 4). 39 The two hearing days were almost entirely devoted to oral evidence. At the conclusion of the second day, the Tribunal, with the consent of the parties, gave directions for written submissions to be filed. These were prepared after the transcript of evidence had been made available to the parties. The parties' submissions did not deal expressly with the issue of how a 'base group' should be defined. They proceeded on the basis that what Mr Tanevski had to show was that the literacy requirement was a condition with which a substantially higher proportion of persons not of Mr Tanevski's race (i.e. non-Macedonian persons) are able to comply (see Mr Tanevski's submissions at para 14; Fluor's submissions at para 65). Mr Tanevski's submissions added the following explanation: 'That is, persons who do not possess the characteristics that generally appertain to his race (not speaking English as a second language) are able to comply.' 40 This procedure for receiving the parties' submissions is often used by the Tribunal, and is expressly authorised by section 73(5)(d) of the ADT Act. It has the advantage of avoiding the expense and delay associated with holding a further hearing. However, it increases the risk that the Tribunal's decision may be based on contentions that were not drawn to the parties' attention and on which they should have been given an opportunity to make submissions and/or to seek leave to adduce further evidence. 41 In our opinion, the Tribunal should have notified the parties that it was minded to define the 'base group' in the manner that it outlined in its decision. It was an error of law not to do so. While, as Mr Crawford pointed out, sections 73(1) and 73(2) of the ADT Act confer broad powers on the Tribunal to determine its own procedures and conduct its own investigation of relevant matters, these powers are expressly made subject to the requirements of natural justice. 42 We derive support for this conclusion from a case that neither party cited to us, namely, Director-General, Department of Education & Training v FR and EQ on behalf of FR (EOD) [2003] NSWADTAP 51. Here the Appeal Panel held, following a discussion of the relevant issues at [9 – 33], that a finding of indirect discrimination by the Tribunal could not stand because the case had been conducted throughout on the footing that the conduct of the respondent (the Director-General) amounted only to direct discrimination. In the course of concluding that the respondent had been denied natural justice, the Panel said, at [29]:- Concluding that the Director-General had engaged in indirect discrimination involved the Tribunal making findings of fact which were quite different from those needed to reach a conclusion that the Director-General had engaged [in] direct discrimination. These findings included the identification of the requirement or condition, whether a higher proportion of people from one group compared with another group can comply with the requirement and the reasonableness of the requirement. The Director-General did not have the opportunity to lead evidence in relation to these factual issues and to make submissions concerning the findings of fact which should be made by the Tribunal. 43 The Tribunal's redefinition of the base group without prior notice to the parties deprived Fluor of any opportunity to tender evidence suggesting that, if this definition of a base group were to be adopted, Mr Tanevski could not establish that a substantially higher proportion of the 'pool' to which he did not belong than of the 'pool' to which he did belong would be able to comply with the literacy requirement. Similarly, Mr Tanevski was denied the opportunity to tender evidence on this issue in reply. Taking matters a stage further, both parties were also denied the opportunity to submit that a different base group would have been more appropriate. 44 Mr Hatcher's third submission was that the appropriate base group was in fact the three supervisors only. On the ground that this group was too small to be sustainable, he submitted that Mr Tanevski's claim of indirect discrimination should be dismissed. 45 In opposing this submission, Mr Crawford relied on a passage in the Appeal Panel's judgment in Kumaran v Rail Infrastructure Corporation (EOD) [2005] NSWADTAP 41. In Kumaran, the applicant, a Sri Lankan, had employed by the first respondent as an estimator. His first language was not English. He was dismissed because his supervisor, Mr Gill, was not satisfied with the standard of his written work. His claim under the AD Act against the first respondent was successful on the ground of indirect race discrimination. 46 In the first instance judgment (Kumaran v Rail Infrastructure Corporation & Anor [2005] NSWADT 30), the Tribunal had explained at [52] how it identified the base group (though it used the term 'pool'):- The group of people among whom the comparison must be made consists of those people subject to the requirement, that is: estimators working under Mr Gill… As the first respondent submitted, the pool is, effectively, anyone capable of performing an estimator's duties. Any number of people of any race could have worked under Mr Gill… – relevantly, the pool of people within which the comparison is to be made encompasses people of all and any race including, for example, people of Anglo-Saxon background. 47 The Appeal Panel made the following observations, at [17] and [18]:- 17… As [the first respondent's] legal representative correctly pointed out, the pool of people to be compared must be meaningful in the sense that it must reveal the significance of race to compliance with the requirement: Australian Iron & Steel Pty Ltd v Banovic & Ors (1989) 168 CLR 165 at 180 per Deane and Gaudron JJ. [The first respondent] conceded that as there were only three estimators at Mr Kumaran's level in 1998, it would not sufficiently reveal the effect of the requirement on different races to compare the rate of compliance using that pool. 18 … although it may have been preferable for the Tribunal to have nominated the geographical extent of the pool of potentially qualified estimators, its failure to do so does not constitute an error of law. Given that the Act operates within New South Wales, it can be inferred that the relevant pool is the population of New South Wales who could potentially do the work of an estimator. 48 Mr Crawford also pointed out that, in ruling on an appeal from the Tribunal's decision in Bonella & Ors v Wollongong City Council [2001] NSWADT 194, the Appeal Panel cautioned against undue interference at appellate level with first-instance determinations regarding the scope of the base group. The Appeal Panel drew attention to the principle that the identification of a base group is a mixed question of fact and law. It said (Wollongong City Council v Bonella & Ors and Bonella & Ors v Wollongong City Council (EOD) [2002] NSWADTAP 26 at [38]):- The Tribunal's decision to restrict the base group to Assistant Managers is based on its findings of fact. Those findings are not "so irrationally inappropriate as to put it outside the range of selection for any reasonable tribunal". (See the decision of the UK Employment Tribunal in Kidd v DRG (UK) Pty Ltd [1985] ICR 504 at p 415.) 49 In our judgment, the Tribunal's decision regarding the base group was not 'irrationally appropriate'. We agree with its conclusion (at [61]) that a group made up only of the three supervisors was too small to permit any valid conclusions to be drawn about the impact of the literacy requirement. 50 The fourth error claimed by Mr Hatcher in this context to have been committed by the Tribunal was its ruling that the base group should be defined as employees who 'aspired' to be a supervisor. This, he said, was incorrect since Mr Tanevski himself already was a supervisor. 51 This submission is rejected, on the ground that what the Tribunal said (at [61]) was that the base group should be 'broadened to include all employees of Fluor who aspired to be a supervisor' (our emphasis). Properly interpreted, this means that the group was to comprise both the three existing supervisors and any other employees who aspired to be a supervisor. 52 It follows from the foregoing discussion that while the Tribunal's decision as to how the base group should be constituted did not involve any error of substantive law, it was open to challenge on procedural grounds. The Tribunal's failure to give notice at the hearing of its intentions regarding this definition amounted to an error of law. It deprived the parties (notably Fluor) of the opportunity to tender evidence and make submissions regarding the identity and composition of the base group. Identifying 'pools' within the base group 53 The approach taken by the Tribunal at this stage of its analysis was explained in its decision at [62 – 63]:- 62 Identification of pools . The next question is how this base group should be divided. If it is divided between Macedonians and non-Macedonians, then the non-Macedonian group will include people from a non-English speaking background. In her book, Indirect Discrimination in the Workplace , (Federation Press, 1992) at p 203-204, Rosemary Hunter discussed the difficulties with this formulation: . . . indirect discrimination in employment occurs because many organisational criteria have been designed to suit the behaviour patterns of traditionally dominant groups in the workforce. Such criteria create disadvantages for outsiders who do not behave in the same way. Thus, as a matter of principle, the test for indirect discrimination should be whether a substantially higher proportion of (say) Anglo-Australians (the dominant group) than of Turks (the minority group) comply with a particular requirement or condition. The point begins to be lost if one is in fact required to decide whether a substantially higher proportion of non-Turks than of Turks comply. This is a particular problem when the group of "non-Turks" includes people of other national origins who may have just as much difficulty complying with the challenged requirement or condition, for similar reasons. 63 The general approach suggested by Rosemary Hunter was endorsed by the Appeal Panel in Kumaran v Rail Infrastructure Corporation (EOD) [2005] NSWADTAP 41. In that case the Tribunal decided that a substantially higher proportion of persons not of Mr Kumaran's race (Sri Lankan) would have been able to comply with a particular requirement. The Appeal Panel noted that in coming to that view, "the Tribunal must have accepted that it was common knowledge that people from nationalities whose first language is English would have substantially less difficulty complying with the requirement than those of Sri-Lankan nationality whose first language is not English." In our view, in accordance with the remedial or beneficial nature of the legislation, the indirect race discrimination provisions should be interpreted in this case so that the comparison is between Macedonians and people not of that race, namely the dominant group of Anglo-Australians: IW v City of Perth (1997) 146 ALR 696 at 702; Commonwealth v HREOC (1998) 152 ALR 182. 54 In paragraphs [64] and [66], the Tribunal employed phrases confirming that it defined the two 'pools' whose respective capacities to comply with the literacy requirement were to be compared as (a) 'Anglo-Australian employees of Fluor who are otherwise eligible for appointment as a supervisor' and (b) 'comparable employees whose national origin is Macedonian'. 55 Mr Hatcher submitted that this approach was in direct conflict with the express provision in section 7(1)(c) of the AD Act that 'the aggrieved person' must have failed to comply, or been unable to comply, with 'a requirement or condition with which a substantially higher proportion of persons not of that race [i.e., not of the race to which the aggrieved person belongs]… comply or are able to comply' (our emphasis). On the true interpretation of this provision, he argued, the Tribunal should have defined the 'pools' as non-Macedonian members of the base group and Macedonian members of this group. 56 In support of this submission, Mr Hatcher pointed out that in the definition of 'direct race discrimination' in sections 7(1)(a) and 7(1)(b) of the AD Act, a materially different phrase is employed. Discrimination occurs under section 7(1)(a) where, on the ground of the race of the aggrieved person, the 'perpetrator… treats the aggrieved person less favourably than in the same circumstances… the perpetrator treats or would treat a person of a different race' (our emphasis). 57 In Mr Hatcher's submission, the Tribunal erred in holding that its approach was in line with the Appeal Panel's decision in Kumaran v Rail Infrastructure Corporation (EOD) [2005] NSWADTAP 41. He maintained that in that case both the Tribunal at first instance and the Appeal Panel identified the relevant pool as persons not of the applicant's race. 58 In the first instance decision (Kumaran v Rail Infrastructure Corporation & Anor [2005] NSWADT 30), the Tribunal's ruling on this matter appeared at [53]:- But to the extent that the requirement meant having to use spelling, grammar, syntax and structure in a way that would satisfy Mr Gill, in our view a substantially higher proportion of persons not of Mr Kumaran's race, for example, a person of Anglo-Saxon background, would have been able to comply with the requirement than Mr Kumaran was able to. 59 On appeal, the Appeal Panel, at [18], made the following comment:- Contrary to [the first respondent's] first submission, the Tribunal did not limit its comparison to people of Anglo-Saxon background. It merely used people of that race as an example of those people who would be more likely to comply with the requirement. 60 Mr Hatcher maintained that the Tribunal's approach to this matter in the present case was erroneous, even when allowance was made for the principle that the AD Act was beneficial legislation which must be construed broadly. In support, he cited the following dictum of Burchett J in Commonwealth of Australia v Human Rights and Equal Opportunity Commission (1998) 152 ALR 182 at 189:- Where remedial legislation contains exemptions designed to strike a careful and practical balance between competing community interests, a court which distorts that balance in the name of furthering the remedy risks usurping a political role, and in doing so, frustrating the will of parliament. The Disability Discrimination Act [Cth] was intended to relieve the deprivation and humiliation that too often accompany misfortune, but not at the cost of creating further misfortune. A line was drawn at s 15(4) to protect, at least, employers and fellow employees who might be affected by a disabled person's inability to carry out the inherent requirements of an employment. The legislative choice as regards where that line was to be drawn must be respected. 61 Finally on this question, Mr Hatcher asserted that the term 'Anglo-Australian' was ambiguous and should not be employed in the present context. 62 Mr Crawford raised four contentions in response to this line of argument. 63 He submitted first that the Appeal Panel in Kumaran did in fact endorse the 'general approach' explained by Professor Hunter in her text on indirect discrimination. It held that in circumstances where a requirement imposed by a respondent employer relates to English literacy and the applicant is of a non-English speaking background, it is appropriate to apply the 'substantially higher proportion' test in section 7(1)(c) to the applicant's relevant pool (defined with reference to his or her race) and to a pool of persons not of that race: for example, persons from a race that speaks English as its first language. 64 Mr Crawford's second contention was that this 'general approach' should be adopted because it was a 'practical' approach. It appropriately treated Anglo-Australian members of the base group as a 'point of reference'. He relied on an observation by the Appeal Panel in Kumaran (at [14]) that there existed 'a line of authority which says that it is impractical to compare one nationality with every other nationality'. The Appeal Panel here cited a House of Lords decision, Orphanos v Queen Mary College [1985] 1 AC 761. 65 Thirdly, Mr Crawford relied on well-known dicta of the High Court and Federal Court respectively in IW v City of Perth (1997) 146 ALR 696 and Commonwealth v Human Rights and Equal Opportunity Commission (1998) 152 ALR 182, to the effect that beneficial legislation must be construed liberally. It is sufficient here to quote from the judgment of Brennan CJ and McHugh J in the former case. Having referred to a provision in section 18 of the Interpretation Act 1984 (WA), to the effect that statutes should be interpreted in a manner that will promote their objects, their Honours said at 702 (footnotes are omitted):- The injunction contained in s 18 of the Interpretation Act is reinforced by the rule of construction that beneficial and remedial legislation, like the Act, is to be given a liberal construction. It is to be given "a fair, large and liberal" interpretation rather than one which is "literal or technical". Nevertheless, the task remains one of statutory construction. Although a provision of the Act must be given a liberal and beneficial construction, a court or tribunal is not at liberty to give it a construction that is unreasonable or unnatural. But subject to that proviso, if the term "service", read in the context of the Act and its object, is capable of applying to an activity, a court or tribunal, exercising jurisdiction under the Act, should hold that that activity is a "service" for the purpose of the Act. 66 Fourth and finally, Mr Crawford submitted that terms such as 'Anglo-Saxon' (used in Kumaran) and 'Anglo-Australian' (used by the Tribunal in the present case) were not ambiguous. The Tribunal accordingly did not err in law in employing the latter term to refer to a race that speaks English as its first language. 67 On this question, which is one of considerable significance in the present case, the Appeal Panel concludes, for the reasons which follow, that the Tribunal erred in adopting what it called 'the general approach' suggested by Professor Hunter. 68 First, the passage quoted by the Tribunal from Professor Hunter's book (see [53] above) does not in fact suggest an approach to the interpretation of statutory provisions defining indirect discrimination. Instead, it forms part of a discussion of the content of different statutory definitions to be found in Australia. 69 The following proposition is stated near the commencement of this discussion (at p 203): 'The precise wording in each Act of the definition of indirect discrimination on the particular ground may also dictate the groups whose position is to be compared.' 70 The discussion continues as follows (at p 203):- In some cases, a comparison is required (our emphasis) between the complainant's group and everyone not in that group (for example between pregnant and non-pregnant persons…). In other words, the definition contemplates a simple two-way division of the world, with the groups for comparison together covering the entire range of possibilities. Thus, for example… in a race discrimination case, one would compare (say) Aborigines to non-Aborigines. In other words, however, the wording of this element of the definition appears to contemplate or permit comparisons between one group and a different group, which together may not exhaust the possibilities (for example between pregnant and non-pregnant women…). 71 In footnotes accompanying this passage, Professor Hunter gives examples of statutory definitions falling into each of these two categories. Importantly (for present purposes) one of her examples of a provision in the former category, involving a 'simple two-way division of the world', is the provision at issue in this appeal, namely, section 7(1)(c) of the AD Act. She explicitly rejects the categorisation of this provision as one that 'appears to contemplate or permit comparisons between one group and a different group, which together may not exhaust the possibilities'. 72 Professor Hunter then poses a question in these terms relating to the latter category: 'What difference does it make if a particular Act uses a "two groups" or "multiple groups" formulation of this element?' The passage quoted by the Tribunal, which immediately follows, then argues that, for the reasons stated in it, this kind of formulation is preferable. It does not suggest that a statutory formulation in which 'a comparison is required between the complainant's group and everyone not in that group' should be interpreted and applied in a manner that ignores this requirement. 73 Secondly, it is not correct to say, as the Tribunal did in its decision (at [63]), that the Appeal Panel in Kumaran v Rail Infrastructure Corporation (EOD) [2005] NSWADTAP 41 'endorsed' the general approach suggested by Professor Hunter. It appears to us instead that both the Tribunal at first instance and the Appeal Panel treated the relevant pools as (a) persons of the applicant's race (Sri Lankan) and (b) persons not of that race: see the passages from their judgments quoted above at [58] and [59]. As the Appeal Panel said, 'people of Anglo-Saxon background' were merely used by the Tribunal 'as an example of those people who would be more likely to comply with the requirement'. 74 The concerns about 'impractical' comparisons expressed by the House of Lords in Orphanos v Queen Mary College [1985] 1 AC 761 did not, in our opinion, go as far as to indicate that a formulation requiring a 'two-way division of the world' should be interpreted as if it were a 'two groups' or 'multiple groups' formulation. 75 In that case, which is usefully summarised by Professor Hunter at p 205, the provision defining indirect discrimination (section (1)(1)(b) of the Race Relations Act 1976 (UK)) required a comparison between persons of the complainant's racial group and persons not of his or her racial group. Importantly, the definition of 'racial group' in section 3 allowed for combinations of two or more racial groups. No equivalent provision, it may be noted, appears in the definition of 'race' in section 4 of the AD Act. 76 The complainant, a Cypriot citizen, argued that the respondent college's practice, determined by government policy, of charging higher fees to 'overseas' students than to 'home' students indirectly discriminated against him on the ground of his race. 'Overseas' students were defined as those who had not been resident in the UK or the EEC for the three years immediately preceding the commencement of their course. The respondent conceded that a considerably smaller proportion of persons of Cypriot, non-British or non-EEC nationality than of British or EEC nationality could comply with the condition regarding residence so as to qualify for the lower fees. The House of Lords agreed with the complainant that the respondent had unlawfully discriminated against him, but dismissed his claim on other grounds. 77 In the leading judgment, Lord Fraser of Tullybelton said (at 771):- The admission [by the respondent] seems to be made on the footing that Mr. Orphanos belongs to three racial groups (Cypriot, non-British, and non-E.E.C.) and that it makes no difference which of these groups is chosen for the comparison required by section 1(1)(b )(i). I agree that Mr. Orphanos belongs to each of these groups, and that each is a "racial group" as defined by section 3(1) as extended by section 3(2). But I do not agree that it makes no difference which of these groups is used for the comparison under section 1(1)(b )(i). The comparison must be between the case of a person of the same racial group as Mr. Orphanos and the case of a person not of that racial group, but it must be such that "the relevant circumstances in the one case are the same, or not materially different, in the other": see section 3(4). The "relevant circumstances" in the present case are, in my view, that Mr. Orphanos wished to be admitted as a pupil at the college, so the comparison must be between persons of the same racial group as him who wish to be admitted to the college, and persons not of that racial group who so wish. Consider first the two largest groups - namely persons of non-British and non-E.E.C. nationality (omitting the reference to national origins brevitatis causa.) I have no doubt that the proportion of persons of non-British and non-E.E.C. nationality who wish to attend the college and who can comply with the requirement of having ordinarily resided in the E.E.C. area for three years immediately before 1 September 1982 is substantially smaller than the proportion of persons not of that group (i.e., persons who were British or E.E.C. nationals) who wish to attend the college and who can comply with it. That seems obvious and causes no difficulty. But consider now the group consisting of persons of Cypriot (or Greek Cypriot) nationality and compare it with the group consisting of persons not of Cypriot (or Greek Cypriot) nationality, i.e., consisting of all persons (except Cypriots) of every nationality from Chinese to Peruvian inclusive. If the comparison is between persons of those groups who wish to be admitted to the college as pupils I do not see how any sensible comparison can be made because it would be impracticable to ascertain the numbers of persons so wishing. 78 It may be seen from this passage that the House of Lords applied the approach that involves a 'two-way division of the world'. It held that the comparison must be 'between the case of a person of the same racial group as Mr. Orphanos and the case of a person not of that racial group'. The issue to which it applied the principle that the comparison to be made should not be 'impracticable' was that of determining the pool to which the complainant should be held to belong. 79 Most importantly in this context, the language of subparagraph (1)(c) of section 7 of the AD Act does indeed differ materially, as Mr Hatcher submitted, from that of the immediately adjacent subparagraphs ((1)(a) and (1)(b)) in relation to the specific question now being discussed. The former provision expressly requires a comparison between the situation of persons of the race to which the aggrieved person belongs and the situation of persons 'not of that race'. In the two latter provisions, the comparison is to be with the situation of person 'of a different race'. For this reason, to align the interpretation of subparagraph (1)(c) with that of its neighbours would, in our opinion, to ignore the warning by Brennan CJ and McHugh J in IW v City of Perth (see [65] above) that a 'liberal or beneficial' interpretation given to remedial legislation must not be 'unnatural'. 80 For the foregoing reasons, the Tribunal's conclusion at [63] that the comparison must be 'between Macedonians and people not of that race, namely the dominant group of Anglo-Australians' was erroneous. Within the base group identified by the Tribunal – those employees of Fluor who were or who aspired to be supervisors – the two 'pools' designated for determining comparative rates of compliance (in the sense of capacity to comply) with the literacy requirement should have been members of the group whose race was Macedonian (including Mr Tanevski) and members whose race was not Macedonian. The rates of compliance 81 The Tribunal discussed and determined this question in the following passage:- 64 Rate and disparity of compliance . The question is whether a substantially higher proportion of Anglo-Australian employees of Fluor who are otherwise eligible for appointment as a supervisor, would be able to comply with the literacy requirement than comparable employees whose national origin is Macedonian… Mr Tanevski did not provide any statistical evidence of compliance rates among the base group. That is not surprising given that it is notoriously difficult to obtain evidence of this kind. 65 Absence of statistical evidence . Fluor submitted that in the absence of statistical evidence the Tribunal should not find that the requirement has a disparate impact on Macedonians. In Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission (1997) 80 FCR 78 at 122 Sackville J said that "unless there is some compelling reason to the contrary, I think it desirable . . . to make precise findings as to the proportions of men and women complying or able to comply with the impugned requirement." Where such statistical information exists or can be obtained without undue expense, it is no doubt desirable. But in this case, there is a compelling reason why precise findings cannot be made. Mr Tanevski cannot be expected to survey part of the Fluor workforce to determine their race and whether they can comply with the literacy requirement. The likely cost of doing so is out of proportion to the amount of compensation he would be likely to receive if his complaint is substantiated and he would be unlikely to be able to recoup his costs even his complaint was successful. We support the remarks of Justice Browne-Wilkinson, as he then was, in Perera v Civil Service Commission [1982] IRLR 147 at 151–2: . . . it is most undesirable that, in all cases of indirect discrimination, elaborate statistical evidence should be required before the case can be found proved. The time and expense involved in preparing and proving statistical evidence can be enormous, as experience in the USA has demonstrated. It is not good policy to require such evidence to be put forward unless it is clear that there is an issue as to whether the requirements of [the legislation] are satisfied. 66 The Tribunal is not bound by the rules of evidence and, subject to the rules of procedural fairness, we may inform ourselves in such manner as we think fit: Administrative Decisions Tribunal Act 1997, s 73. In addition, we can take into account matters of common knowledge. We have no statistical evidence available but we are satisfied that Anglo-Australians generally speak English as their first language and have been educated in English. Apart from the very small proportion who have a disability or social disadvantage affecting their levels of literacy, the remainder of Anglo-Australians to whom the requirement is directed would be sufficiently literate to comply with the requirement. The rate of compliance for Macedonian employees would be substantially less. The vast majority of Macedonians who were not born in Australia do not have English as their first language. Of those, many, like Mr Tanevski, would not be able to comply with the literacy requirement. While those born in Australia are more likely to be able to meet the requirement, overall it can be said that a substantially higher proportion of Anglo-Australian employees of Fluor who are otherwise eligible for appointment as a supervisor, would be able to comply with the literacy requirement than comparable employees whose national origin is Macedonian. 82 Mr Hatcher contended that for a number of reasons the Tribunal's approach to this question was erroneous. The reasons that he put forward included the following: (1) Mr Tanevski bore the onus of proving a disparate impact of the literacy requirement on Macedonians and non-Macedonians within the base group, but in fact adduced no evidence on this matter; (2) there was no 'compelling reason' in this case to justify departing from the principle, stated by Sackville J in Commonwealth Bank of Australia v Human Rights and Equal Opportunity Commission, that 'precise findings' should be made; (3) the Tribunal took no account, when applying the approach outlined by Browne-Wilkinson J in Perera v Civil Service Commission, of his Honour's observation that this approach would not be appropriate where, as in the present case, there clearly was 'an issue as to whether the requirements of [the legislation] are satisfied'; (4) the rates of compliance with the literacy requirement that should be attributed to each of the two 'pools' were open to dispute and were certainly not within the realm of 'common knowledge'; and (5) it was apparent from evidence that had been admitted by the Tribunal that a significant number non-Macedonian employees of Fluor – including some with an Anglo-Saxon background – were not capable of complying with the literacy requirement. 83 The evidence to which Mr Hatcher adverted in putting forward the last of these reasons comprised the following: (i) statements in affidavits sworn by Mr Wroniak and Mr Twigg about the English language capabilities of a number of non-Macedonian employees of Fluor; and (ii) the names of all the employees of Fluor to whom reference had been made in the evidence. He handed up a document listing these names, pointing out that a significant proportion of them showed that the persons concerned were not, or might not be, of an Anglo-Saxon background. 84 Mr Crawford's submissions on this matter included the following arguments: (a) the Tribunal had spelt out very clearly its reasons for not requiring statistical evidence of compliance rates from Mr Tanevski (these being that such evidence was 'notoriously difficult to obtain' and that the likely cost of obtaining it would exceed any amount that he may recover in these proceedings); (b) the Tribunal's resort to 'common knowledge' was entirely appropriate for determining whether there was a 'substantial disparity' between the compliance rates between the two 'pools' that it had identified; (c) in relying on 'common knowledge', the Tribunal had followed an approach adopted by the Tribunal at first instance and endorsed by the Appeal Panel in the Kumaran case; (d) the Tribunal had taken due account of the evidence regarding non-compliance by non-Macedonian employees; and (e) the limited evidence to which Mr Hatcher drew our attention fell well short of what was needed to prove comparative rates of compliance. 85 The Tribunal's implicit use of a principle of 'common knowledge' in Kumaran v Rail Infrastructure Corporation & Anor [2005] NSWADT 30 is apparent from the paragraph in its decision that we have quoted above at [58]. Approval of this step in the Tribunal's reasoning is to be found in the Appeal Panel's decision (Kumaran v Rail Infrastructure Corporation (EOD) [2005] NSWADTAP 41) at [21]:- … the Tribunal concluded that a substantially higher proportion of persons not of Mr Kumaran's race, would have been able to comply with the requirement. In coming to that view, the Tribunal must have accepted that it was common knowledge that people from nationalities whose first language is English would have substantially less difficulty complying with the requirement than those of Sri-Lankan nationality whose first language is not English. Although not bound by the rules of evidence, in our view that fact is a matter of common knowledge and is not reasonably open to question. 86 In view of the conclusion that we have reached regarding identification of the relevant 'pools', it is unnecessary for us to consider these competing submissions at length. 87 The question whether a court or tribunal dealing with a claim of indirect discrimination can legitimately rely on 'common knowledge' or 'judicial notice' to determine whether there is a substantial disparity between compliance rates will depend, to a significant extent, on what 'pools' within the 'base group' have been identified. 88 The pools identified by the Tribunal in this case were (a) Macedonian employees of Fluor who aspired (or, according to an alternative formulation, were eligible) to be supervisors and (b) Anglo-Australian employees who so aspired (or were eligible). The pools identified by the Tribunal and approved by the Appeal Panel in the Kumaran proceedings were (a) Sri Lankan persons and (b) non-Sri Lankan persons, being in each case persons within New South Wales who could potentially do the work of an estimator (see [46], [47] above). In both of these situations, we incline to the view – though we do not have to determine the question – that the principle of 'common knowledge' might properly be invoked in determining whether there would be a substantial disparity in rates of compliance with a literacy requirement such as was directed at the base group. 89 We have held, however, that if the base group identified by the Tribunal in this case is to remain unchanged, the pools to be compared should be (a) Macedonian employees of Fluor who aspired (or according to an alternative formulation were eligible) to be supervisors and (b) non-Macedonian (not Anglo-Australian) employees who so aspired (or were eligible). Taking account of the evidence that Mr Hatcher drew to our attention in this context, we accept his submission that a substantial disparity between these two pools with regard to rates of compliance with the literacy requirement could not be considered to be a matter beyond dispute and therefore a matter of 'common knowledge'. Although we are conscious of the difficulties likely to be associated with obtaining evidence on the matter, we do not see how it could be determined in the absence of evidence. 90 Accordingly, while it might well have been permissible for the Tribunal to invoke the principle of 'common knowledge' in order to find that there would be a 'substantial disparity' in the rates of compliance between the two 'pools' that it had in fact identified, that principle was not appropriate for determining the comparative rates of compliance of the two pools that it should have identified. The 'reasonableness' of the literacy requirement 91 A further matter of contention before the Appeal Panel was whether there were grounds for challenging on appeal the Tribunal's ruling that the literacy requirement was 'not reasonable having regard to the circumstances of the case', within the meaning of section 7(1)(c) of the AD Act. 92 At [67 – 68], when commencing its discussion of this question, the Tribunal set out some basic principles. It pointed out that 'reasonableness' is a question of fact, to be determined by reference to an objective criterion that calls for consideration of all the circumstances of the case and the weighing up of a number of factors. These factors, it said, included whether there was a 'logical and understandable basis' for the condition or requirement, the nature and extent of its discriminatory effect and the reasons advanced in its favour. It quoted from leading cases establishing these propositions. 93 At [69], it said:- Observance of occupational health and safety requirements was specifically mentioned by Dawson and Toohey JJ in Waters v Public Transport Corporation (1991) 173 CLR 349, as a factor which may be relevant. In our view the relevant factors in this case are: a) Mr Tanevski's circumstances and the effect on him of the requirement; b) whether there is a logical and understandable basis for the requirement, including observance of safety requirements; c) the objectives that are achieved by the requirement and the cost and practicality of achieving the objective by other means. 94 At [70 – 72], the Tribunal discussed the first two of these 'relevant factors'. It pointed out that Mr Tanevski had worked for 40 years in rail maintenance (five of them with Fluor), that at the time of his removal from the post of supervisor he intended to retire within the next 12 to 15 months and that the literacy requirement had a 'significant' effect on him, including that he left work and did not return. It held that the requirement had a 'logical and understandable basis' which related to Mr Tanevski's job and was 'prompted by concerns about safety'. It referred here to Mr Coates's opinion (see [12] above) that on account of Mr Tanevski's low level of literacy he 'could put others at risk' if he remained in his position. It pointed out, however, that neither Mr Coates nor Mr Wroniak had brought to its attention 'a single incident relating to safety involving Mr Tanevski that had been caused by his low level of literacy'. It mentioned the 'glowing reports' by previous superintendents regarding Mr Tanevski's safety record. Having referred to the extent to which Mr Tanevski was competent in English, it stated: 'On the basis of all the evidence we are not satisfied that the literacy requirement needed to be imposed to meet Fluor's safety objectives. There was a cost effective and practical alternative.' 95 At [73], it addressed the third of the relevant factors in the following terms:- Objectives of requirement and cost and practicality of achieving the objectives by other means . We accept that Mr Tanevski was due to retire within 12 to 15 months. During that period, the safety objective could have been achieved initially by training Mr Tanevski in the HSE plan and in the completion of the new forms and by continuing to provide him with assistance to complete written statements and reports. Following those measures, the procedures could have been simplified as recommended in the Marshall Report. Had a longer term solution been necessary, Fluor could have assessed Mr Tanevski's literacy against his job description and arranged for him to attend English language training. 96 At [74], it stated its conclusion on 'reasonableness':- In our view, imposing the requirement on Mr Tanevski was not reasonable having regard to the circumstances of the case. Mr Tanevski's literacy level had been accommodated by Fluor for 5 years and he was planning to retire in the next 12-15 months. While the requirement had a logical and understandable basis, it had a significant impact on Mr Tanevski and there was a feasible, low cost alternative which did not involve any increased risk to safety. The alternative was to provide him with training on the new HSE system, instruct him on how to complete the necessary forms and assist him with the duties, such as writing statements and reports, which he was unable to perform. There was no indication that there had been any industrial issues in relation to other employees performing some of Mr Tanevski's tasks. These arrangements would have enabled Mr Tanevski and others to continue working safely for the 12-15 months before he retired and allowed him to maintain his dignity as a Fluor employee. 97 The principal ground on which Mr Hatcher challenged this part of the Tribunal's decision was that it focused unduly on individual factors that related to Mr Tanevski specifically and did not 'relate to or pertain to the discriminatory ground (race)'. These factors, which Mr Hatcher described as irrelevant, included Mr Tanevki's age, length of service and employment history. Similarly, when dealing with the alternative approaches to dealing with the problem – that is, providing training in the new HSE system and some assistance with writing statements and reports – the Tribunal took account only of the particular circumstances of Mr Tanevski. By contrast, Mr Hatcher said, the effect of the requirement on all existing and 'aspiring' supervisors who could not comply with the literacy requirement – being that they would not be permitted to occupy this position – and the extent to which the alternative measures would resolve the problem for them were relevant considerations, which the Tribunal should have taken into account. 98 Mr Hatcher submitted that the opening sentence of paragraph [74] of the Tribunal's judgment clearly demonstrated the error that it made. By ruling that 'imposing the requirement on Mr Tanevski was not reasonable', the Tribunal showed that it had considered the wrong question. 99 In putting forward these contentions, Mr Hatcher drew our attention to a short passage in the judgment of Buchanan JA in State of Victoria v Schou (No 2) (2004) 8 VR 120 at 137. This passage includes the following sentence relating to a Victorian statutory provision defining indirect discrimination: 'It is not concerned with the modifications to a general requirement that might reasonably be made to accommodate one person's special needs.' 100 Two further submissions by Mr Hatcher were to the following effect. First, the Tribunal apparently formed the erroneous view that the existence of an alternative approach, which was practicable and effective, was enough to establish that the requirement itself was unreasonable. He cited here the judgment of Phillips JA in State of Victoria v Schou (No 2) at 129-130. Secondly, the Tribunal incorrectly took account of the apparent absence of any 'industrial issues' arising from Mr Tanevski's reliance on other employees for assistance. 101 In seeking to rebut the argument that the Tribunal had focused unduly on Mr Tanevski's individual circumstances, Mr Crawford relied on a passage in the judgment of Lockhart J in Commonwealth of Australia v Human Rights and Equal Opportunity Commission (1995) 133 ALR 629. In the course of ruling that the respondent Commission had not applied the correct criteria in determining 'reasonableness' in a complaint of indirect discrimination, his Honour said at 638:- Also, the Commission did place great weight upon the subjective preference of [the complainant] for living off-base in assessing the nature, extent and effect of the alleged discriminating treatment. Now the views of [the complainant] may be relevant in determining objectively 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. 102 Mr Crawford also referred us to a passage in the judgment of Brennan J in Waters v Public Transport Corporation (1991) 173 CLR 349 at 378. Relevantly, this passage begins as follows: '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.' 103 With reference particularly to the Tribunal's discussion of the alternative approach involving training and assistance, Mr Crawford argued that what it said with specific reference to Mr Tanevski was equally applicable to any 'hypothetical supervisor' who could not comply with the literacy requirement. 104 Finally, Mr Crawford submitted that it was entirely appropriate for the Tribunal to take account of matters of industrial relations, He pointed out that in the dictum of Dawson and Toohey JJ in Waters v Public Transport Corporation (1991) 173 CLR 349 at 395 to which the Tribunal referred at [69], their Honours held that 'the maintenance of good industrial relations' as well as 'observance of occupational health and safety requirements' were relevant factors. 105 In our opinion, the only aspect of this part of Fluor's challenge to the Tribunal's judgment that requires detailed consideration is the degree of attention expressly paid by the Tribunal to Mr Tanevski's particular situation. While the passage from Commonwealth of Australia v Human Rights and Equal Opportunity Commission (1995) 133 ALR 629 on which Mr Crawford relied shows that the individual circumstances of the complainant may be relevant, it also emphasises that the criterion of reasonableness is an objective one. The language used by the Tribunal suggests that it may not have sufficiently appreciated this point. When considering both the discriminatory effect of the literacy requirement and the potential effectiveness of the alternative approach, its focus should have been on existing and aspiring supervisors generally, not on Mr Tanevski specifically. 106 Our conclusion, however, after considering the Tribunal's treatment of the issue of reasonableness as a whole, is that the Tribunal did not err in law. We attach importance to the fact that much of what the Tribunal said with reference to Mr Tanevski was applicable, broadly speaking, to 'hypothetical supervisors' generally. In other parts of its discussion, the Tribunal showed that it paid due attention to the legal principles governing 'reasonableness' in this particular statutory context and to the various factual matters that it was obliged to take into account. Finally, we do not agree with either of the specific submissions by Mr Hatcher that we have outlined above at [100]. 107 For these reasons, Fluor's claim that the Tribunal erred in its treatment of the issue of 'reasonableness' under section 7(1)(c) of the ADT Act is rejected. Defence of statutory authority 108 At [75 – 78], the Tribunal considered and rejected a defence which Fluor claimed to be available to it under section 54 of the AD Act (this is reproduced at [21] above). 109 At [76], the Tribunal stated that if this defence was to succeed, Fluor would have to show that it was necessary to remove Mr Tanevski from his position in order to comply with s 8(1) of the Occupational Health and Safety Act 2000 (this is reproduced at [23] above). 110 The Tribunal's decision continued as follows:- 77 When considering the equivalent to s 54 in the Victorian legislation, McHugh J in Waters v Public Transport Corporation (1991) 173 CLR 349 at 413 commented that the defence of statutory authority only arises when the requirements in the Act are "mandatory and specific". 78 Conclusion . We have not accepted Mr Coates' evidence that if Mr Tanevski remained in his position he could put himself and others at risk. Although we agree that, in general, a high level of literacy is likely to decrease risks to safety, it was not necessary to remove Mr Tanevski from his position in order to comply with s 8(1) of the Occupational Health and Safety Act 2000. Fluor had another practical, low cost option, namely training Mr Tanevski and accommodating his literacy level for approximately 12 to 15 months until he retired. Given that finding, the defence under s 54 has not been made out. 111 Mr Hatcher submitted, citing relevant authority, that the Tribunal, in this part of its judgment, had erred in failing to have due regard to two important aspects of section 8 of the Occupational Health and Safety Act. These were that the duties imposed by the section were absolute and that the section was concerned with risks to safety, not with the actual occurrence of incidents demonstrating a lack of proper safety. He pointed out that in its judgment at [52] the Tribunal had found the reason for removing Mr Tanevski from his position as supervisor was 'Fluor's view that Mr Tanevski's literacy level posed a safety risk in the workplace'. Mr Hatcher also submitted that the existence of the 'practical, low cost option' identified by the Tribunal was an irrelevant consideration that it should not have taken into consideration. 112 For reasons advanced by Mr Crawford, however, Mr Hatcher's arguments regarding the defence under section 54 must be rejected. Mr Crawford relied in particular on the following matters: (a) the Tribunal's conclusion (see [12] and [94] above) regarding Mr Tanevski's safety record; (b) the opening sentence in paragraph [78] of the Tribunal's decision (see [110] above); (c) the fact that in the next sentence of this paragraph the Tribunal referred expressly to 'risks to safety'; (d) the fact that the Tribunal's finding regarding the reason why Mr Tanevski was removed from the position of supervisor related only to the factor prompting Fluor to take this step, and was not a finding by the Tribunal that Mr Tanevski's literacy level constituted a safety risk; (e) the absence of any indication in the Tribunal's judgment that it failed to appreciate the absoluteness of Fluor's obligations under section 8; and (f) an argument that the existence of a 'low cost option' was an entirely relevant consideration, given that the onus lay on Fluor to prove that removal of Mr Tanevski was 'necessary'. 113 For these reasons, this ground of appeal fails. Our orders 114 During the hearing, we asked both counsel for their submissions as to how we should dispose of the appeal proceedings if we held that the Tribunal's order upholding Mr Tanevski's claim of indirect race discrimination should be set aside. Mr Hatcher submitted that if our reason for so holding was that the Tribunal had failed to give the parties proper notice of its intentions regarding the definition of the base group, we should remit the case to the Tribunal, but that if we based our decision on any other ground we should dismiss Mr Tanevski's complaint. Mr Crawford submitted that after receiving further evidence, we should reach our own decision as to the merits of Mr Tanevski's claim of indirect race discrimination. 115 We have held that the Tribunal erred through failing to give the parties proper notice of its intentions regarding the definition of the base group in this way and in its identification of the two 'pools' whose rates of compliance with the literacy requirement should be compared (see [52] and [80] above). In consequence, Order 3 in the Tribunal's decision of 7 August 2008, upholding Mr Tanevski's claim of indirect race discrimination, must be set aside. 116 We have held also that on the question of determining comparative rates of compliance, the parties should have had an opportunity to tender evidence (see [43] and also our observations at [89]). We rejected Fluor's claim that the Tribunal erred in its treatment of the issue of reasonableness and of the defence of statutory authority (see [106] and [112]). 117 After careful consideration, we have decided that in these circumstances we should remit relevant parts of the case to be heard and decided again by the Tribunal as originally constituted, with leave being granted to the parties to adduce further evidence if they so wish. We are specifically authorised to make an order in these terms by section 114(2)(b) of the ADT Act. By virtue of considerations outlined by the Appeal Panel in Z v Director-General of Transport (No 2) (GD) [2001] NSWADTAP 18, this course of action is preferable to granting leave for the appeal to extend to the merits and deciding ourselves what is the 'correct and preferable decision', pursuant to section 115(1). There is in our opinion no basis on which Fluor could legitimately believe that the Tribunal's prior decision in Mr Tanevski's favour amounted to unfair prejudgment of the merits of his claim. 118 The parts of the case that we remit to the Tribunal are the following issues arising under section 7(1)(c) of the AD Act (the first three of them were formulated in similar terms by the Tribunal, in its decision at [60]):- (a) To whom the 'literacy requirement' (as defined in the Tribunal's decision) should be held to have been directed (identification of the base group). (b) How the base group should be split to make the comparison required by section 7(1)(c) (identification of pools). (c) Whether a substantially higher proportion of members of the pool to which Mr Tanevski did not belong, as compared with members of the pool to which he did belong, complied or were able to comply with the literacy requirement (comparative rates of compliance). (d) Whether or not, having regard to the Tribunal's redetermination of these issues, Mr Tanevski's claim of indirect race discrimination should be upheld. 119 The remitted proceedings are set down for a case conference at 9.30 a.m. on 6 July 2009. 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.