A review of the recent decision in State of Victoria v Schou

The reaches of discrimination law have recently been pegged back a notch by the Victorian Court of Appeal in State of Victoria v Schou (‘Schou’).

The Court of Appeal ultimately rejected Ms Schou's complaint of discrimination in this matter. Employers may take some comfort from this decision, which examines working conditions and how employers should respond to an employee’s request to be accommodated differently because of family responsibilities.

In this article, we will examine the background to this decision, the decision itself and, most importantly, its implications for employers.

Background

Ms Schou commenced employment with the State of Victoria in 1979. At the time of her resignation in 1996, Ms Schou was employed as a sub-editor of Hansard. One of the terms of her employment was that she was required to attend work full-time at Parliament House on house-sitting days. During the course of her employment, Ms Schou had two children. Lawrence, the younger child, was sick with recurrent chest infections and asthma. By 1995, Ms Schou found caring for Lawrence and working the long hours of sitting weeks becoming very difficult. Ms Schou put forward a proposal that she perform certain of her tasks from home via a modem which would have cost her employers approximately $2,500. Ms Schou’s employers agreed to the proposal but when they had not implemented it some 3 months later, she resigned.

Ms Schou then launched 16 claims of discrimination against the State of Victoria. The Victorian Civil and Administrative Tribunal dismissed all the claims save one. It upheld Ms Schou’s claim that by requiring her to attend work full-time at Parliament House on house-sitting days, her employer had indirectly discriminated against her by reason of her status as a parent and a carer. In upholding this claim, the Tribunal held that Ms Schou’s modem proposal was a reasonable alternative to the requirement that she attend full-time on sitting days. The Tribunal ordered compensation of $161,307.40 be paid to Ms Schou.

The Tribunal’s orders were set aside on appeal by Justice Harper of the Supreme Court. The matter was returned to the Tribunal for rehearing and the Tribunal was directed to consider the reasonableness of the requirement that Ms Schou attend full-time on sitting days.

On rehearing the matter, the Tribunal again upheld Ms Schou’s complaint.

The State of Victoria appealed to the Supreme Court of Victoria - Court of Appeal and its decision was handed down on 30 April 2004. In terms of the majority decision (which we will discuss below), the orders of the Tribunal were set aside and replaced with an order that the complaint of discrimination be dismissed.

What is indirect discrimination?

Indirect discrimination occurs if a person imposes or proposes to impose a requirement, condition or practice –

1. that someone with an attribute does not or cannot comply with; and
2. that a higher proportion of people without that attribute or with a different attribute do or can comply with; and
3. that is not reasonable .

Whether a requirement, condition or practice is reasonable depends on all the relevant circumstances of the case, including –

1. the consequences of failing to comply with the requirement, condition or practice;
2. the cost of alternative requirements, conditions or practices;
3. the financial circumstances of the person imposing or proposing to impose, the requirement, condition or practice .

The critical issue is the reasonableness of a requirement, condition or practice

The Court of Appeal (Justices Phillips and Buchanan) found that Ms Schou was, for a period of time, unable to comply with the requirement that she attend full-time on sitting days because of her responsibilities as a parent. It held that what was in issue was the reasonableness of the requirement that Ms Schou attend full-time on sitting days and that for it to be of relevance, any alternative must be as suited to the task as the requirement itself. The Court found that while the requirement that Ms Schou attend full-time on sitting days was appropriate to the needs of the employer and the task which she was required to perform, the modem proposal was not as well suited. Therefore, the Court concluded, although Ms Schou as a parent and carer of an ill child could not comply with the requirement that she attend full-time on sitting days, as the requirement itself was reasonable, the imposition of this requirement did not constitute indirect discrimination against Ms Schou.

In summary:

• Although persons with a particular attribute may not be able to comply with a specific requirement, condition or practice, the issue at stake is whether the requirement, condition or practice is reasonable; and
• In determining this question, only alternatives which are equally suited to the task will impact on the reasonableness of the requirement, condition or practice.

Implications for employers

The Schou decision highlights the need for employers to:

• be aware of the possibility of indirect discrimination when imposing (or proposing to impose) a requirement, condition or practice;
• carefully consider the suitability of any alternative proposal put forward by an employee who cannot comply with the requirement, condition or practice because of an attribute; and
• prepare and implement a carefully drafted equal opportunity policy which should also contain a procedure for resolving discrimination complaints at the earliest opportunity.

While Ms Schou was ultimately unsuccessful in her claim, her work circumstances at Hansard were unique. With the increase of working from home, the development of the virtual office and tele commuting, employers may be faced with cases where alternatives such as working from home via a modem link up are, in fact, just as well suited to the requirements of the job as being in the workplace itself. It should also be noted that the Court of Appeal’s decision was not unanimous, Justice Callaway gave a dissenting judgement in favour of Ms Schou. The final chapter on this saga may yet be written if this matter proceeds to the High Court.

Discrimination is rapidly developing into a major human resources issue. Employers would do well to obtain professional guidance and assistance on these matters. Litigation on alleged discrimination claims can be a costly exercise, and is certainly not conducted on ‘Schou’-string!

The Industrial Relations and Employment Law team at Moores Legal is available to assist you on any discrimination issue including drafting equal opportunity policies. For advice and assistance in this area, please contact Peter Andrew, Leanne Tully or Frances Anderson at Moores Legal on 9898 0000.