Employer Penalised for Age Discrimination

8 October 2021

The Federal Court has ordered two companies pay a combined $29,000 in penalties after it was found they refused to hire a prospective employee because of his age.

Corestaff Pty Ltd, a labour hire and recruitment agency, were engaged by Gumala Enterprises Pty Ltd, a civil construction company, to provide staff for Gumala’s operations in the Pilbara Region. In late 2018, Mr Peter Selsmark, who was 70 years old at the time, responded to a CoreStaff vacancy for a position of Grade Operator.

In an email conversation, Gumala’s HR advisor said to a CoreStaff area manager that Mr Selsmark had ‘all the tickets” however his “age is a concern’. The CoreStaff area manager then emailed Mr Selsmark, telling him that he was unsuccessful for the role ‘due to [his] age’.

The Australian Building and Construction Commission (ABCC) brought proceedings against both CoreStaff and Gumala for contravening s 351 of the Fair Work Act 2009, which prohibits discrimination against employees and prospective employees. Gumala admitted liability, however CoreStaff did not, as they considered themselves the ‘messengers’.

A judgment released in 2020 found that CoreStaff had in fact contravened s 351 of the Fair Work Act 2009, after the Federal Court determined that CoreStaff fit the definition of a ‘prospective employer’. The Court considered that CoreStaff’s attempt to separate their role from Gumala’s overall recruitment process was an ‘artificial demarcation’.

Pecuniary penalties were imposed on the two companies in a judgment released last month. For what was described as a ‘serious, and not trivial, example of discrimination’, Banks-Smith J ordered CoreStaff and Gumala to pay $20,000 and $9,000 respectively, with 50% going to Mr Selsmark.

This case acts as a timely reminder for employers, prospective employers and labour hire companies that discrimination in the recruitment process must be carefully managed and lawful, to avoid the potential for significant penalties.

EMA Legal can assist employers with any queries related to workplace discrimination.

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