In a recent decision the Victorian Supreme Court of Appeal found that a large employer directly discriminated against a female manager by, amongst other things, depriving her of an opportunity to negotiate and receive a higher salary, while allowing her male colleagues to do so.

The case is an important reminder to employers of the risks of unlawful direct discrimination in pay arrangements.  The case is also a salutary lesson in the importance of dealing with complaints effectively and early.

The Facts

Ms. Christina Tsikos was employed by Austin Health from 2010 as a Manager of the Orthotic/Prosthetics Department.  She was paid at the rate provided in the applicable enterprise agreement.

She managed a team that included 10 male employees, 6 of whom were paid at the enterprise agreement rate, though at levels higher than their roles.  One male employee was paid significantly more than her even though he reported to her and was subordinate to her.

Between 2011 and 2014 she asked to negotiate her remuneration on no less than six occasions. She raised this in meetings with her direct line manager, and the next-in-line manager. On each occasion she was rebuffed.

She alleged that her requests to be given the opportunity to negotiate above-agreement remuneration were repeatedly ‘blocked’.  Significantly, one of her managers agreed with that proposition.

She made a further request in 2018, pointing out some of the pay inequities.  The employer responded by acknowledging that there were anomalies, but did not meaningfully respond to her request to negotiate her remuneration.

In 2018 she commenced proceedings in the Victorian Civil and Administration Tribunal under the Equal Opportunity Act 2010 claiming that she had been directly discriminated against in her employment on the basis of her age and sex, in that she had been denied the opportunity to negotiate and receive above-agreement remuneration.

She appealed the dismissal of her complaint to the Supreme Court of Victoria, which held that the Tribunal applied the wrong legal test and remitted the case back to the Tribunal to be determined again.

Austin Health was granted leave to appeal to the Court of Appeal of the Supreme Court of Victoria.

The Decision

The Court of Appeal held that Austin Health had engaged in systemic discrimination on the basis of Ms Tsikos’s sex.

In deciding for Ms Tsikos, the Court of Appeal found that the Tribunal failed to have regard to the complexity of the unfavourable treatment of her, including that:

  1. Her repeated requests to be given the opportunity to negotiate her salary had been blocked by her managers;
  2. Although some men in the department were paid above-agreement salaries, she and another woman who had sought to negotiate above-agreement remuneration were refused that opportunity; and
  3. There was evidence as to structural inequality and unconscious bias in the workplace, including that the Department was over-represented in the proportion of employees on above-agreement remuneration, and all of those employees were men.

The Court of Appeal also noted the evidence of an expert witness for Ms Tsikos, whose evidence went to unconscious bias by employers, including that:

“… 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.”

The expert witness had also observed that when Ms Tsikos attempted to negotiate her remuneration she was accused of being ‘motivated by money’, a claim that the expert considered was less likely to be levelled at a male employee.

Implications for Employers and Employees

 Employees should be aware that equal opportunity laws are designed to address issues of gender inequality in pay arrangements, although asserting rights under those laws may require a legal process.

Employers should stay alert to the risks of unconscious unlawful discrimination.

The case is also a reminder that employers should treat complaints promptly, seriously, and by a considered process.

In 2018, the employer knew enough to realise that there were issues to address, and to take action on.  Had Ms Tsikos’ complaint been treated more seriously, a long, stressful, and costly legal dispute may have been avoided.

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

Some more information is available here or you can book online for an initial no-obligation chat about reviewing an employment contract or contractor agreement.

Authors:

Dr. Anchita Karmakar, Medical Liaison Officer

Scott McSwan, Director