Law Seminar 2007: Stolen Wages - The Way Forward by Jonathon Hunyor

Speaking notes for

HUMAN RIGHTS LAW BULLETIN SEMINAR

Stolen Wages: The Way Forward

by Jonathon Hunyor

Acting Director of Legal Services, Human Rights and Equal Opportunity Commission

9 March 2007

What I will talk about today is the way in which the Racial Discrimination Act (‘the RDA’) has been used by Aboriginal people to seek a remedy for the injustice of underpayment of wages.

The practice of underpayment of wages is just one of the many aspects of the stolen wages issue. It has received particular attention in the context of former Aboriginal reserves and missions in Queensland, where until as late as 1986, Indigenous workers were paid at below-award rates.

There are two particular cases that I will discuss: the Palm Island Wages Case and the matter of Baird v State of Queensland.

In both cases the applicants were able to prove racial discrimination and were awarded compensation, but not without a significant battle. In the end, while the cases show again the determination of Indigenous people to fight for justice, they also remind us of the limited ability of litigation to provide it.

The Palm Island Wages Case: Bligh and Ors v State of Queensland [1996] HREOCA 28

Let me touch first on the Palm Island Wages Case: Bligh & Others v State of Queensland.

In 1985 and 1986, a number of Aboriginal people from Queensland’s Palm Island lodged a complaint of racial discrimination alleging underpayment of wages by the State of Queensland. They claimed that they were discriminated against because of their Aboriginality in that they were:

• paid lower wage rates than non-Aboriginal people; and

• employed on terms and conditions significantly less favourable than were provided to non-Aboriginal people.

The claims covered the period 31 October 1975 (the commencement date of the RDA) to 31 May 1984 (when the administration of Palm Island was transferred from the government to an elected Aboriginal council).

The complaint was heard by this Commission, sitting as it did at that time, as a tribunal hearing complaints under the RDA.

The matters took over 10 years to resolve, and a decision was handed down by the Commission in 1996. Commissioner Carter found for the applicants, on the basis that there was, in fact, a policy of the Queensland government during the relevant time to pay Aboriginal workers less than non-Aboriginal workers doing the same work.

Commissioner Carter stated:

In spite of persistent agitation by Aborigines themselves, supported by the trade union movement from at least 1957, and in spite of the enactment of racial discrimination legislation by the Commonwealth in 1975, the respondent continued to resist the proposition that Aboriginal workers performing the same work, providing the same services and using the same skills should be paid the same wage as non-Aboriginal persons who may have had the benefit of award conditions. The entrenched policy of the Government was that whatever the proper payment was for a particular service provided by a non-Aboriginal worker, the payment to be made to an Aboriginal worker doing the same work and providing the same level of skills had necessarily to be less. Even when in 1979 the Queensland Industrial Court held that the Aboriginal worker was as a matter of law to be regarded as having an entitlement to award conditions, the Government reluctantly paid but settled out of Court and expressed a concern that such a payment might be seen to be a precedent. This deep seated resistance to paying a proper wage was enduring; in spite of agitation by different trade unions the resistance remained firm; when the impact of Commonwealth legislation was recognised the only response was an intensely political dialogue between Governments espousing apparently different policies which continued for about 10 years.

Commissioner Carter decided to award $7,000 to each of the successful complainants. In fact, the evidence received by the Commission suggested that the loss of income for individual complainants ranged from $8,573.66 to $20,982.97. The reason given for the lesser, uniform sum being awarded was difficulty in precisely and accurately assessing the loss, including the lack of records and faulty recollection of details. The amount awarded has nevertheless been the subject of some strong criticism as failing to adequately compensate for the loss of the complainants.

Queensland government response to the Palm Island Wages Case

Following the Palm Island Wages Case, the Queensland government settled a number of other individual cases brought under the RDA.

Its formal response was the Underpayment of Award Wages Process (‘UAW process’), introduced in May 1999. This process made a single payment of $7,000 available to Indigenous people employed by the government on Aboriginal reserves between 1975 and 1986 which was when the Queensland government’s policy of paying below-award rates to Indigenous people formally ended.

5,729 claims were paid under the UAW process, totalling approximately $40 million.

There were a number of features to the UAW process which made it a limited response to the injustice it was said to remedy:

• The amount of $7,000 was a flat sum, paid regardless of the total amount by which a person was underpaid.

• The period of 1975-1986 excluded earlier periods of employment during which people were underpaid.

• People accepting payment under the UAW process were required to sign a deed to waive their rights to recover further compensation.

• The UAW process also only compensated those people alive as at 31 May 1999. The descendents of workers who had died before that time were therefore not eligible; and finally

• People employed by church organisations on ‘mission’ communities (such as Hopevale, Wujal Wujal, Doomadgee, Arukun and Mornington Island) were not eligible for compensation as they were not directly employed by the State.

It was the exclusion from compensation of all people employed on church-run missions that formed the basis for the Baird litigation.

Baird v State of Queensland

The Indigenous applicants in Baird were employed on one or other of the Hope Vale and Wujal Wujal missions.

In the relevant period of 1975 – 1986, Wujal Wujal and Hopevale were under the management of the Lutheran Church of Australia, in accordance with the Aborigines Act 1971 (Qld).

The Government provided funding to the Church for the running of the missions by way of annual grant. The level of that funding reflected the cost to Government of running reserves that were under its management.

The grants included amounts for wages payable to Indigenous residents and these amounts were calculated using a wage rate less than the relevant award rate. However, once the grants were made, it was essentially for the Church to decide how the grant money was to be spent.

The applicants claimed that they were paid less for their employment than non-Indigenous employees performing similar work. And this, they argued, constituted race discrimination for which the Government was ultimately responsible in one of two ways:

1. As the employer, through the agency of the Church, contrary to s 15 of the RDA (which prohibits discrimination in employment); and/or

2. Through the act of paying grants to the Church which were calculated to include a component for wages to be paid at under-award rates, contrary to s 9(1) of the RDA, which provides:
   

   It is unlawful for a person to do any act involving a distinction, exclusion, restriction or preference based on race… which has the purpose or effect of nullifying or impairing the recognition, enjoyment or exercise, on an equal footing, of any human right or fundamental freedom in the political, economic, social, cultural or any other field of public life.

Significantly, the Church was not a respondent to the case. The reasons for this are not entirely clear, although we can note that it was not a situation in which the Church had profited from the underpayment of wages – it had paid out in wages the amounts it received in grants. The Church hadn’t pocketed the difference.

Also significant was that the case against the government was not one of ancillary liability. Section 17 of the RDA makes it unlawful for a person to ‘assist or promote whether by financial assistance or otherwise’ the doing of an act of racial discrimination. It was not argued, however, that the government had assisted or promoted the acts of discrimination committed by the Church. It was argued that the government had discriminated directly against the appellants. Again, the reasons for this approach, which seemed to make the appellants’ case much harder to prove, are not clear.

At first instance, Dowsett J found against the appellants on both aspects of their case. He found that the Church, not the Government, employed the appellants and that it did so in its own right. The claim under s 15 of the RDA therefore failed.

Further, his Honour found that there was no basis for asserting that the calculation of the grants involved a discriminatory element, nor was there a basis for finding that the payment of grants had the ‘purpose or effect of depriving the applicants of their proper pay rates’. Despite the amount of the grant, the Church could have chosen to have paid employees more had it wanted to do so, possibly by employing less people. The claim under s 9(1) was therefore also unsuccessful.

On appeal to the Full Court, however, the applicants were successful. HREOC was granted leave to intervene in the proceedings before the Full Court. Justices Allsop, Spender and Edmonds found that Dowsett J had erred in significant respects in his reasoning and that, on the facts as he had found them, the case under s 9(1) of the RDA was made out.

The Full Court held that the acts of calculating and paying the grants by the Government clearly involved a distinction between award wages and below-award wages.

That distinction was made ‘based on race’. The Court found that the clear inference to be drawn was that the calculation of grants using below-award rates was done because the people receiving the wages were Aboriginal. 

That inference could be drawn from the fact that the government paid Aboriginal employees on the reserves it managed at below-award rates, while it paid its non-Aboriginal employees award rates.

The Full Court also concluded that the act of the Government had the effect of impairing human rights:

[I]n circumstances where the State knew that it was not financially feasible for the Church to pay substantially more in wages on the reserves than the amounts allowed for in the grants and where the State calculated the grants in part by reference to below-award wages, the acts of the State involving the distinction based on race can be seen to have had a causal effect on the impairment of the right of the appellants as recognised by Article 5 of the Convention to equal pay for equal work.

Following the decision of the Full Court, the parties agreed to orders which included the payment of damages to individual appellants of between $17-85,000 (including interest) and an apology from the Minister for Communities, Disability Services, Seniors and Youth.

Legally, the decision is a welcome development of the case law in relation to the RDA which is otherwise not that often litigated. The Court’s reasoning confirms the broad scope of the prohibition on discrimination in s 9(1) of the RDA.  In particular, although the case against the Government was not argued as one of ancillary liability, s 9(1) was found to cover acts based on race that have indirect effects.

Allsop J also stressed the need to interpret the RDA broadly and beneficially in accordance with the purpose of eliminating racial discrimination in all its forms and manifestations. His Honour emphasised the need to approach s 9(1) without ‘legalism and formality antithetical to the broad aims of the section and the Convention’.

Of course, the case also represents another important victory for Indigenous people seeking justice for past wrongs. There are three cases still before the Federal Court, relating to claimants from the Mornington Island, Aurukun and Doomadgee communities that might be expected to end with similar results and there is still some prospect that they might be resolved through negotiation. The Aboriginal and Torres Strait Island Social Justice Commissioner has been granted leave to assist the Court as amicus curiae in those cases, the first of which is due to be heard in April.

But all of this comes after a series of lengthy court proceedings involving claimants who have had to overcome a range of hurdles to prove their case, including very limited access to legal aid, the problems of proof in the absence of records and  with fading memories and deceased witnesses and what Allsop J described as the ‘elusive simplicity’ of the RDA itself.

The Senate Committee noted in its report:

…it is clearly not in the interests of governments or claimants to resolve these matters through expensive and time-consuming litigation. Such an approach would also result in substantial injustice as claimants whose records have been lost or destroyed by governments would remain uncompensated.

It is now 23 years since the first complaints in the Palm Island Wages Case were made. As we consider today ‘a way forward’ on the issue of stolen wages, we should hope that it is a way that rights these wrongs without the need for more litigation and provides justice without such delay.

Last
updated 10 April, 2007