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Introduction

This case is fair warning for employers who have (either unconscious or conscious) bias against the employment of mature-age workers. Even if the person in question is a 70-year-old grader driver in the Pilbara.

In Australian Building and Construction Commissioner v CoreStaff WA Pty Ltd [2020] FCA 893, the Federal court of Australia has ruled against the labour-hire company who fundamentally argued it was only acting upon the wishes of its client. Noting that the client in question had already admitted its culpability and is awaiting penalty.

Please note that the Victorian Equal Opportunity and Human Rights Commission has a great deal of information on “age discrimination”. See for example here.

Background

This case follows the usual recruitment route when a company wishing to hire an employee may utilise the services of a recruitment company. In this case a labour-hire firm. That is to say, the assignment was provided to the labour-hire firm, the labour-hire firm placed an advertisement, applications were received. These applications were vetted (ie “shortlisted”) by the labour-hire company. With the shortlisted applicants forwarded by the labour-hire firm to the client.

Importantly, the position was to be on-hired from the labour-hire firm, meaning that the grader driver position would be an employee of the labour-hire firm, which would on-hire the employee to its client.

The FCA finding that the 70-year-old job application was indeed a “prospective employee” and the labour-hire firm a “prospective employer”.

“Prospective” what?

Under the Fair Work Act 2009, it is unlawful and deemed an “adverse action” to discriminate for reason of age. This extends not only people who are employed but those employees who are not employed because of their age. This may also apply in the reverse – a person considered too young or lacking in experience.

As I have mentioned many times in previous reports, all hires should be done on the best person for the job. This, as we know, is called merit-based recruitment. Added to this is the legitimate question of “can the applicant carry out the assigned duties?”. This is why a position description with “physical requirements” section is best practice. I would also recommend pre-employment medicals, so that a qualified medico can ascertain whether the applicant can carry out the “inherent requirements of the position”.

Reverse onus of proof

In these cases, the respondent must prove it did nothing wrong; as opposed to the applicant having to prove their case. This is known as the “reverse onus of proof”. However, this does not mean that the applicant holds no culpability, they must have an arguable case in the fist instance.

HR under the microscope (yet again)

The client’s HR Manager was named (and shamed?) through the proof of email exchanges with the labour-hire firm. In particular it was the client’s observation to the labour-hire firm that alerted it to the fact that the short-listed job candidate was 70-years-of-age.

It from this “observation” that it was determined that the job candidate was too old to work in the extreme weather conditions of the Pilbara region. The labour-hire employee stating:

“I would be concerned about employing somebody working 12 hours a day in the Pilbara, 45 degree heat every day.  It knocks me around and I am less than 60. So, having somebody that is 70, it has got to knock them around a lot more than me. That would be my concern.  It has got nothing to do with age”.

Refusing to employ (legalise)

The FCA also considered:

“It is necessary to consider the expression ‘refuse to employ’ in context. Its immediate context is one in which two aspects of an employer’s conduct are identified in the prefatory words in s 334(2) [of the Industrial Relations Act 1988 (Cth) – now relevantly s 342(1)(Item 2)].  The expression ‘refuse to employ’ identifies the first.  The remainder of the prefatory words identify the second.  They concern conduct where an offer is made to employ a person on discriminatory terms. It is relatively clear, in my opinion, that the second aspect concerns conduct where an employer intends to employ someone, the person is offered employment and the employer does so on discriminatory terms. It concerns actual and not theoretical employment. That is, employment by an employer to perform work for the employer albeit on discriminatory terms or conditions. Thus the companion words to the expression ‘refuse to employ’ concern actual employment and they constitute a fairly compelling pointer of the subject matter Parliament intended to address in s 334(2). They indicate that the expression ‘refuse to employ’ deals with the same subject matter, that is, actual employment where there is a refusal to employ a person in circumstances where, apart from the refusal, employment might or would arise. I refer to situations where employment might arise to allow for circumstances where a vacant position exists and a refusal to employ arises before the employer has ascertained whether the person applying for the job or position, who is victimised for a prescribed reason, is qualified or equipped to do the job”.

In Stephens v Australian Postal Corporation Flick J considered this line of authority, observing as follows:

“[21]      Lurking behind the phrase ‘refusal to employ’ are questions as to whether the phrase means:

  • a refusal to employ a person to a position which is in fact vacant – in which case, it may be the prospective employee who has the onus of proving that a position is vacant; or
  • a failure to employ a person upon an application being made, whether or not a position has been advertised as being vacant and (perhaps) even where there is known to be no vacant position – in which case, s 361 would transfer the onus to the employer to explain the reason why the application was unsuccessful.

Even on such a simple approach to the analysis of the phrase, a further variant may be:

  • if a position was once vacant, but is no longer vacant, the reason why a vacancy no longer exists – in which case, the onus may be upon the employer to explain why the vacancy no longer exists”.

There was a vacancy in this case

The learned judge finding:

“CoreStaff’s argument that there was no vacancy is based on an artificial demarcation between the limited task of referring applications to a client and the broader recruitment process clearly envisaged and understood by Mr Ingram. I do not accept its argument or that there was no vacancy in this case having regard to six reasons.

“First,…in my view there is no question that it was the intention of the parties that CoreStaff would employ a person to perform the grader operator role on assignment to Gumala. There was a vacancy for that role. To the extent CoreStaff purported to maintain an argument that Gumala was to be the employer (a submission that was made from time to time during the hearing), it is inconsistent with the evidence, as already addressed.

“Second, although it may be possible to view the recruitment process as involving various stages – such as identifying potential candidates through advertising or otherwise, referral of applications to the client for feedback, approval by the client, consideration by CoreStaff and employment by CoreStaff – it is artificial to treat those stages as subject to separate agreements.  All form part of the one recruitment agreement. Mr Ingram’s evidence is consistent with this understanding of the agreement between the parties and there is nothing in the evidence assessed above that establishes a contrary position.

“Third, the position propounded by CoreStaff permits a construct: it endorses a purported nomination and deferral by parties as to when obligations as an employer might be engaged.  It permits a party to decide that an applicant is to be refused employment for a prohibited reason whilst denying that it is a prospective employer, having decided by private arrangement that a recruitment company (or other third party) will be the employer. It provides for a selection process (and a rejection process) without the safeguards (and obligations) of s 351 of the FW Act.  This potential for a construct is avoided once it is properly understood that the process of identifying candidates and referring them to Gumala is undertaken by CoreStaff as a prospective employer, regardless of whether the vacancy is in fact filled by a suitable candidate.

“Fourth, and having particular regard to the potential for a construct or contrivance, the arrangement between CoreStaff and Gumala is to be viewed in the context of the objects of Part 3‑1 of the FW Act as set out in s 336.  The provisions of Part 3‑1 are for the benefit of employees and are protective and remedial in nature.  They should be interpreted in a way that achieves the FW Act’s beneficial purposes: Construction, Forestry, Mining and Energy Union v Pilbara Iron Company (Services) Pty Ltd (No 3) [2012] FCA 697 at [35]; and Construction, Forestry, Mining and Energy Union v Endeavour Coal Pty Ltd [2015] FCAFC 76; (2015) 231 FCR 150 at [180]‑[181]. Protection from discrimination is a feature of the FWAct and the consideration of when and whether there is a prospective employer with a vacancy proceeds in that context. The segmented approach to recruitment propounded by CoreStaff is not consistent with the objects of the FW Act.

“Fifth, the vacancy did not evaporate when Mr Selsmark was refused employment. The vacancy for the role remained and further resumes were submitted by Mr Ingram.

“Sixth, it is not to the point that CoreStaff did not have exclusivity and that other labour hire companies could have potentially employed Mr Selsmark, or that Gumala might have separately considered a direct hire of Mr Selsmark. That potential does not alter the fact that, because of its arrangement with Gumala, CoreStaff had a vacancy for a grader operation at the relevant time”.