The cost of defending discrimination proceedings in court, including sexual harassment claims, is about to become a whole lot riskier and potentially expensive for business, with the Federal Government this week introducing the last of its Respect@Work reforms.
The new
Australian Human Rights Commission Amendment (Costs Protection) Bill 2023 seeks to amend the Australian Human Right Commission Act by inserting a new ‘equal access’ cost protection to apply to all claims brought under federal anti-discrimination laws.
Reforms aiming to address costs in discrimination proceedings had previously been proposed in the
Respect@Work Bill, which passed in the Parliament in December 2022. However, once introduced into Parliament, the reforms which would have seen each side simply bear their own costs, were stripped out of the Bill and referred to the Attorney General for further consideration after unions, employee advocates and the Greens successfully argued they didn’t go far enough.
Currently in most cases, costs follow the event (despite a broad judicial discretion to award costs in any manner seen fit), meaning an applicant may be liable for their own costs, as well as those of the other party, if they bring an unsuccessful claim. This approach, the Government argues, has resulted in many applicants being deterred from initiating court proceedings due to the risk and potential expense of doing so if their claim is unsuccessful.
Under the Bill’s new ‘equal access’ costs protections regime, the awarding of costs in discrimination cases strongly favour applicants. This means more workers and worker representatives who bring claims under federal anti-discrimination laws, would bear significantly less risk in bringing anti-discrimination claims and in fact, may be emboldened to take action against employers for lack of fear of paying the other side’s costs if they lose.
What exactly do the proposed changes mean?
Download a visual representation of the 'equal access' model below.
Respondents to pay Applicants costs if one or more grounds are successful/Equal-Access-Model-Diagram.png.aspx "Equal-Access-Model-Diagram.png")
The Bill provides that where an applicant is successful in proceedings on one or more grounds against a respondent, the court
must order that the respondent pay the applicant’s costs.
The only exception to this is if the court is satisfied that the applicant’s unreasonable act or omission caused the applicant to incur costs, in which case, the court is not required to order the respondent to pay the costs incurred as a result of that act or omission.
Applicant protections from costs order
The Bill also seeks to protect unsuccessful applicants from an award of costs being issued against them in unlawful discrimination proceedings by preventing courts from ordering applicants to pay respondents’ costs except in certain limited circumstances. This means, in cases where an applicant’s case is unsuccessful, both sides would simply bear their own costs.
The exceptions to this are where the court is satisfied that:
- the applicant instituted the proceedings vexatiously or without reasonable cause; or
- the applicant’s unreasonable act or omission caused the other party to incur the costs; or
- all of the following apply:
- the other party is a respondent who was successful in the proceedings;
- the respondent does not have a significant power advantage over the applicant;
- the respondent does not have significant financial or other resources, relative to the applicant.
Representative Applications
The changes also apply to representative applications, though the court would be prevented from awarding costs against a person on whose behalf the application has been made. This change is intended to encourage public interest litigation in unlawful discrimination matters.
So what will this mean for employers?
By now all employers should be aware of
the new positive duty which applies to five different types of unlawful behaviours: sexual harassment, sex-based harassment, sex-discrimination, conduct creating a hostile workplace environment and victimisation. This ‘positive duty’ requires all employers to take reasonable and proportionate steps to eliminate the unlawful behaviours in their workplace, as far as possible. An employer not meeting their positive duty can lead to various statutory contraventions, including those of the Sex Discrimination Act itself.
The impact of such breaches was recently demonstrated in
the landmark Federal Court decision of Taylor v August and Pemberton Pty Ltd [2023] FCA 1313. This case set a record for the highest general damages awarded in a sexual harassment claim under the Sex Discrimination Act, with the applicant awarded $140,000 for the sexual harassment and $40,000 for victimisation.
Should the Bill pass, employers could be living in a world which they may need to pay an applicant’s costs on top of any general damages awarded. Therefore, the additional costs which may be incurred by employers could make defending a claim a very costly exercise for any business that unwittingly runs the gauntlet to defend discrimination proceedings.
Not yet compliant with the new positive duty? Get in touch on 1300 565 846 or email
info@ablawyers.com.au for details on how
ABLA's positive duty how-to-guide and toolkit can help you on your way to fulfil your obligations.
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