Australia: Victorian Supreme Court of Appeal delivers knockout blow to unconscious bias

Austin Health v Tsikos [2023] VSCA 82 (17 April 2023)

Summary

The Victorian Supreme Court of Appeal recently handed down a significant decision on sex discrimination. In doing so, it confirmed that an employer's repeated decisions to deprive a female manager of the opportunity to negotiate and receive salary, whilst simultaneously allowing her male colleagues to do so (some of whom were paid significantly higher salaries than her, despite being her subordinates), constituted direct discrimination under the Victorian Equal Opportunity Act 2010 (EO Act).

The decision, Austin Health v Tsikos [2023] VSCA 82, should act as a reminder for employers to ensure they are not engaging in discrimination and a timely lesson about the perils of unconscious bias.

It is beyond the scope of this article to explain unconscious bias in detail, as it has many features, causes and manifestations; however, in cases of sex discrimination in employment, unconscious bias most often manifests in relation to recruitment, promotion and determining employee reward and remuneration. In each of these contexts, unconscious associations between a person's sex and their aptitude, capability, capacity and behaviours can result in the person being treated less favourably than a counterpart of the opposite sex.

The facts

From 2010, Christina Tsikos was employed by Austin Health as a Manager of the Orthotic/Prosthetics Department. Throughout her employment, she was paid at (but not above) the rate set out in the enterprise agreement (EA).

As part of her role, Ms Tsikos managed 14 employees; 10 of whom were male. Six of those male employees were paid above the rate set out in the EA. All were classified at a level higher than their role required. One male employee who directly reported to Ms Tsikos was paid significantly more than her, despite being her subordinate.

On six occasions between 2011 and 2014, Ms Tsikos asked Austin Health to negotiate her salary. On each occasion, she was, in her words, 'blocked' from doing so. In June 2018, she wrote to Austin Health, summarising her past requests to negotiate above EA remuneration. In doing so, she noted the higher salaries of her direct reports.

In reply, Austin Health told Ms Tsikos that the above-EA salaries were an anomaly and that it looking into 'what can be done with respect to this situation'; however, it failed to address her request for an opportunity to negotiate her salary.

On 8 November 2018, Ms Tsikos commenced a proceeding in the Victorian Civil and Administrative Tribunal (Tribunal) under the EO Act alleging direct discrimination on the basis of her age and sex. She alleged Austin Health had denied access to employment benefits, including the opportunity to negotiate her remuneration, receive above EA remuneration and receive remuneration at or above the level of her male subordinates.

The findings

At first instance, the Tribunal dismissed her complaint.

She successfully appealed to the Supreme Court of Victoria, with the Supreme Court finding that Austin Health had engaged in 'systemic discrimination by a large organisation'. The Supreme Court made orders remitting the complaint to the Tribunal for determination.

Austin Health sought and was granted leave to appeal to the Court of Appeal.

The Court of Appeal upheld the Supreme Court's decision that 'unintentional discrimination or unconscious bias' meant the employer had engaged in unlawful discrimination. The Court noted that, when determining whether direct discrimination has occurred, it is irrelevant whether the person engaging in the discrimination is aware they are doing so, or considers the treatment to be unfavourable.

The Court of Appeal held that the Tribunal failed to have adequate regard to 'the complex picture of unfavourable treatment' established by Ms Tsikos, which included:

• her repeated attempts to negotiate her salary, all of which were denied or avoided by her managers
• a number of men within the department were paid above-EA salaries, and
• structural inequality and 'unconscious bias' in the workplace, manifested by evidence that the Department had an overrepresentation of employees on above-agreement salaries and all of those employees were male.

The Court of Appeal dismissed all of Austin Health's nine appeal grounds, finding that it had engaged in systemic discrimination on the basis of the Ms Tskios' sex.

While the Court of Appeal did not need to specifically address unconscious bias as a separate issue (due to its finding of systemic discrimination), the VCAT decision set out the opinion of an expert witness for Ms Tsikos, that Austin Health may not have discriminated at a conscious level. The expert wrote:

'people prefer women to behave like stereotypical women, and men to behave like stereotypical men. When women display traits or behaviours that are more stereotypically masculine, they are likely to be penalized and evaluated more negatively.'

In addition, she suggested that when Ms Tsikos attempted to negotiate her classification, she was accused of being 'motivated by money' and 'The same claim would be less likely to be levelled at a male employee.'

Key lessons for employers

Employers should learn from this case and take immediate steps to ensure they are not falling prey to the perils of unconscious bias. When determining whether direct discrimination has occurred - including through unconscious bias -it is irrelevant whether or not the person engaging in the discrimination is aware they are doing so. It is also irrelevant whether they consider the treatment to be unfavourable.

Employers should also be mindful that unlawful discrimination can also occur on the basis of other protected attributes including race, age, disability, colour, religion, gender identity, pregnancy and others.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.