What happened
David James, by his mother as litigation representative, is legally blind and has been diagnosed with high functioning autism. He is employed by WorkPower Inc as a factory hand whose role is to pack boxes. In 2017 he lodged a complaint with the Australian Human Rights Commission alleging that the calculation of his wages involved unlawful discrimination on the ground of disability contrary to the Disability Discrimination Act 1992 (Cth). The complaint focused on the respondent's use of a wage assessment tool known as the Greenacres Competency Based Wage System Assessment Tool. It particularised nine distinct categories of alleged discrimination plus a rolled-up allegation that the tool delivered wages that reduced Mr James' pay more than was necessary and did not meaningfully examine his productive output ([9]-[10]).
The Commission terminated the complaint on 26 February 2018 under s 46PH(1B)(a) of the Australian Human Rights Commission Act 1986 (Cth) on the basis that it was misconceived or lacking in substance. The delegate's letter stated that Mr James' employment was covered by the Workpower Agreement rather than the Supported Employment Services Award 2010 and that wages were assessed using Workpower's own Wage Assessment System rather than the Greenacres tool. The delegate also noted that any alleged discrimination might be exempted by the operation of s 47(1)(c) of the Disability Discrimination Act 1992 (Cth). Importantly, the delegate did not address the broader categories of allegation concerning transparency, lack of independence, pre-classification, the inclusion of "task skills" and "underpinning work skills", or the potential of the Supported Wages System to produce a fairer outcome ([13]-[14]).
Mr James commenced proceedings in the Federal Court by filing an originating application on 13 April 2018. Because the complaint had been terminated under s 46PH(1B)(a), s 46PO(3A)(a) required the Court to grant leave before the application could be made. The filing occurred without prior leave having been sought. The respondent opposed leave. Both parties filed affidavits and written submissions and consented to the application being determined on the papers. The respondent objected to the second affidavit of the applicant's solicitor, Kairstien Wilson, on relevance and opinion evidence grounds under s 76 of the Evidence Act 1995 (Cth). Mortimer J overruled that objection, holding that evidence of the nature and extent of Mr James' disabilities was relevant to the leave application and that Ms Wilson was qualified to express the opinions contained in the affidavit for that limited purpose ([51]).
After reviewing the complaint, the termination letter, the parties' evidence and submissions, Mortimer J concluded that the claims were reasonably arguable and not fanciful. Leave was granted, the originating application was regularised as having been filed with leave on 13 April 2018, and directions were made for the filing of outlines of case and a case management hearing ([52]-[56]).
Why the court decided this way
Mortimer J began by locating the leave discretion within its statutory context. Until April 2017 a person whose complaint had been terminated by the Commission had an entitlement to commence proceedings in the Federal Court or Federal Circuit Court. The 2017 amendments introduced the leave filter in s 46PO(3A) for complaints terminated on grounds other than public importance (s 46PH(1)(h)) or mandatory termination for no reasonable prospect of conciliation (s 46PH(1B)(b)). The provision therefore operates as a deliberate screening mechanism sitting alongside the longstanding subject-matter constraint in s 46PO(3) ([16]-[32]).
The judge identified the governing consideration as the interests of the administration of justice, but emphasised that the content of that concept varies with the power in question. Here the clear parliamentary purpose was to filter out complaints whose merits were disproportionate to the resources required for a full proceeding. That purpose must be given weight. At the same time, the text, context and purpose of s 46PO(3A), read with s 46P(1A)'s requirement that it be reasonably arguable that the alleged acts are unlawful discrimination, indicated that the bar is not set particularly high. The Court is to ask whether the claims are reasonably arguable and, at the least, not fanciful ([31]-[37]).
A non-exhaustive list of permissible considerations was identified, including the importance of the subject matter to the parties, the seriousness and continuing nature of the alleged discrimination, the thoroughness of the Commission's consideration of the merits, delay, any extra-Commission attempts to resolve the allegations, factual and legal complexity, issues of public importance or general application, and prejudice ([38]). Mortimer J stressed that it would be a denial of procedural fairness and a misunderstanding of the leave role to conduct a mini-trial of the merits. Questions of fact and law that are arguable must be left for trial, including by separate question if appropriate ([39]).
Applying that framework, the Court found several live controversies. First, there was a genuine debate about which industrial instrument applied. The applicant contended that the Supported Employment Services Award 2010 covered Mr James by virtue of s 48(1) of the Fair Work Act 2009 and cl 4.1 of the Award, while accepting that the Workpower Agreement (a preserved collective State agreement) also applied by operation of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009. The Commission had treated the point as straightforward; the Court held it was not. Coverage questions of this complexity should be resolved at trial, not on a leave application ([41]-[43]).
Second, the relationship between the Greenacres tool and the Workpower Wages Assessment System was contested. The respondent's own response to the Commission had stated that its system was "modelled on the Greenacres Tool" and that it had no role in the design of Greenacres. A side-by-side comparison revealed considerable commonalities. While differences existed, it was arguable that the two tools were in substance the same for the purposes of the discrimination allegations. The Commission had not explained its contrary conclusion. Again, the point was not fanciful and possessed a rational factual substratum; it was inappropriate to determine it on the leave application ([44]-[48]).
Third, the potential operation of the s 47(1)(c) exemption raised questions of construction, in particular the meaning of "in direct compliance" and the requirement that wages be "determined by reference to the capacity of the person". Mr James contended that the tool did not accurately or fairly measure his capacity. These were arguable issues for trial ([49]).
Finally, any argument that the eventual statement of claim would travel outside the bounds of s 46PO(3) was premature. The factual substratum remained the same and the original complaint had been expressed in broad terms. Once particularised pleadings were filed the respondent could test the point, but it did not bar leave at this stage ([50]).
Because the claims met the reasonably arguable and not fanciful threshold, and having regard to the interests of justice, leave was granted. The proceeding was back-dated to regularise its status and directions were given to bring it to a hearing efficiently ([52]-[56]).
Before and after state of the law
Prior to the 2017 amendments, once the President had terminated a complaint under s 46PH and issued a notice under s 46PH(2), any affected person had a statutory right under the then s 46PO(1) to commence proceedings in the Federal Court or Federal Circuit Court within 60 days (or such further time as allowed). The only substantive limit was the requirement in s 46PO(3) that the unlawful discrimination alleged in the court proceeding be the same as, or arise out of the same acts, omissions or practices that were the subject of the terminated complaint. There was no additional leave filter.
The introduction of s 46PO(3A) in 2017 changed that position for complaints terminated on most grounds. Leave is now mandatory unless the termination was on public importance grounds (s 46PH(1)(h)) or because there was no reasonable prospect of settlement by conciliation (s 46PH(1B)(b)). The simultaneous insertion of s 46P(1A), requiring that it be reasonably arguable that the alleged acts constitute unlawful discrimination, reinforced the gate-keeping function at both Commission and Court levels.
This judgment is the first detailed Federal Court consideration of the new leave requirement. It construes s 46PO(3A) as a filter whose height is set by the "reasonably arguable and not fanciful" formulation drawn from s 46P(1A). The decision makes clear that the leave stage is not a surrogate for a summary dismissal application or a preliminary trial. It also confirms that the pre-existing s 46PO(3) limit continues to operate but that its application should ordinarily await properly particularised pleadings. The judgment therefore both narrows the gateway to court proceedings and simultaneously protects access to justice by preventing the leave discretion from being used to pre-empt arguable claims.
Key passages with plain-English translation
Paragraph [37]: "I am satisfied that the text, context and purpose of the leave requirement in s 46PO(3A) suggests that it is appropriate for the Court to consider in determining whether to grant leave whether the claims made by an applicant are reasonably arguable, and are - at the least - not fanciful. This is consistent with the language used in s 46P(1A). I do not consider, read in context, that s 46PO(3A) sets the bar particularly high: the purpose of the provision is to act as a filter to preclude complaints whose merits are disproportionate to the time and resources likely to be consumed by dealing with them in a whole proceeding, but not to impose a barrier of any substantively greater level."
Plain-English translation: The judge is saying the new leave test is deliberately modest. The Court simply asks whether the case has a real argument behind it and is not nonsense. Parliament wanted to stop hopeless cases wasting everyone's time, but did not want to make it almost impossible for genuine complaints to reach a judge.
Paragraph [39]: "It would be a denial of procedural fairness to an applicant at the very least and, in my opinion, a misunderstanding of the role to be played by the leave requirement in s 46PO(3A), if the Court were to embark on a detailed consideration and determination of the merits of the applicant's underlying arguments about unlawful discrimination. Questions of fact, and questions of law, which are arguable are to be determined at trial, subject to any Court-directed processes such as the stating of a separate question under r 30.01 of the Federal Court Rules."
Plain-English translation: It would be unfair to decide the whole case at the leave stage. That is not what Parliament intended. If there is a real dispute about the facts or the law, that dispute should be decided at a proper trial, not in this early hearing.
Paragraph [32]: "The purpose of the leave discretion, taking into account its text and context, is to provide a filter. It removes what was previously an entitlement to bring a proceeding in this Court once the Commission has terminated a complaint. It sits alongside the limits which have always been imposed by s 46PO(3), themselves aimed at constraining the subject matter of proceedings under s 46PO to the substance of what was before the Commission."
Plain-English translation: Before 2017 you could sue automatically after the Commission finished with your complaint. Now you need permission. The permission rule works together with the old rule that says your court case cannot be about something completely different from what you told the Commission.
Paragraph [43]: "Coverage of an award is a matter of some legal and factual complexity which should be determined at trial. The answer should not be determined at the leave stage: that is not the purpose of s 46PO(3A). Its purpose is not to compel this Court to determine substantive issues of fact and law in deciding whether to grant leave. Rather its purpose is to allow the Court to filter out plainly unmeritorious complaints where the arguments are fanciful, or so obviously misconceived that what is being suggested by the applicant should not be entertained by the Court - whether because they are not arguable as a matter of law, or because there is no rational factual sub-stratum for the allegations, or because there is no utility in the proceeding."
Plain-English translation: Deciding exactly which industrial award covers Mr James is complicated. That is a job for the trial judge, not for a leave hearing. The leave hearing's only job is to weed out complaints that are obviously hopeless or imaginary.
What fact patterns trigger this precedent
This judgment will be triggered whenever an affected person seeks leave under s 46PO(3A)(a) after the Commission has terminated a complaint under s 46PH(1B)(a) on the ground that it is misconceived or lacking in substance. The paradigm case will involve allegations of unlawful discrimination (most commonly under the Disability Discrimination Act 1992 (Cth)) that raise one or more of the following features: (1) a dispute about the identification of the industrial instrument said to govern the employment relationship; (2) a contest about which wage assessment tool was in fact applied and whether that tool is materially the same as, or modelled on, a tool expressly named in the complaint; (3) allegations that the chosen tool incorporates criteria (such as "task skills" or "underpinning work skills") that are not used to set wages for non-disabled workers in open employment; (4) claims that the tool pre-classifies disabled workers at a low percentage of the award rate irrespective of actual productivity; and (5) arguments about the availability and proper construction of the s 47(1)(c) exemption, particularly the phrases "in direct compliance" and "determined by reference to the capacity of the person".
The precedent is engaged where the Commission has dealt only with "preliminary points" and has not engaged with the substantive merits of the broader allegations. It is also engaged where the respondent contends that the court proceeding travels outside s 46PO(3) but the applicant can point to a common factual substratum and breadth in the original complaint. The judgment makes clear that complexity of industrial law questions, contested evidence about the operation of assessment tools, and the need for expert evidence on disabilities are all factors that point toward granting leave rather than refusing it at an interlocutory stage. Conversely, the precedent would not assist a complaint that is purely vexatious, trivial, or entirely lacking any rational factual foundation.
How later courts have treated it
Although the judgment itself post-dates the 2017 amendments and is the first Federal Court decision to analyse s 46PO(3A) in any depth, it expressly draws on and applies earlier authority to shape its approach. It cites Nojin v Commonwealth of Australia [2012] FCAFC 192; 208 FCR 1 at [8] for the proposition that use of the predecessor BSWAT tool had been found by a Full Court to involve unlawful discrimination against certain workers with disabilities. That citation is used to explain the historical context of Mr James' complaint and to illustrate that complaints about wage assessment tools for disabled workers can raise serious and non-fanciful issues.
The judgment also relies on its own earlier decisions in Stepien v Department of Human Services [2018] FCA 1062 at [25] (extension of time factors), Kaur v Minister for Immigration and Border Protection [2015] FCA 584; 233 FCR 507 at [28]-[31] and DJS16 v Minister for Immigration and Border Protection [2018] FCA 2037 at [27] to reinforce the principle that a leave discretion should not be conflated with a final merits hearing. Eastman v Shamrock Consultancy Pty Ltd [2018] FCCA 3436 is noted as the only Federal Circuit Court decision on the new leave requirement up to that point ([22]).
The present judgment therefore treats these authorities as supplying the methodological framework for the new statutory discretion: a focus on arguability, avoidance of premature merits determination, and due weight to the filter purpose. By doing so it both follows the ratio of the earlier cases on the proper role of interlocutory discretions and applies that learning to the specific text and purpose of s 46PO(3A). The judgment's own reasoning on the non-exhaustive list of relevant factors at [38] and the limited role of the Court at [39] is expressed in terms that later courts can readily adopt when faced with similar leave applications.
Still-open questions
The judgment leaves several important questions for later determination at trial. First, the precise meaning of "in direct compliance" in s 47(1)(c) of the Disability Discrimination Act 1992 (Cth) remains unresolved. Mortimer J notes that this phrase, together with the requirement that wages be "determined by reference to the capacity of the person" in s 47(1)(c)(iv), will require construction where an applicant contends that the chosen assessment tool does not in fact measure capacity accurately or fairly ([49]).
Second, the boundary between the Greenacres tool and the Workpower Wages Assessment System is left open. Although the respondent's own Commission response stated that its system was "modelled on" Greenacres and incorporated it, the degree of identity or difference that is legally significant for discrimination purposes is a matter for evidence at trial ([46]-[48]).
Third, the exact scope of the s 46PO(3) constraint once pleadings are filed is expressly reserved. The respondent's argument that the originating application and the relief sought travel outside the terminated complaint is described as "premature". Once the applicant files a properly particularised statement of claim or outline of case, the Court will be in a position to decide whether the allegations remain "the same as (or the same in substance as)" the complaint or arise out of the "same (or substantially the same) acts, omissions or practices" ([50], [23]).
Fourth, the judgment flags that the Court may need to clarify its own processes so that applications for leave under s 46PO(3A) are considered at the filing stage rather than after a proceeding has been accepted and docketed ([53]). How that administrative change will operate in practice is left for future case management.
Finally, the precise weight to be given to each of the non-exhaustive factors listed at [38] in different factual settings, and the interaction between the leave discretion and the overarching purpose provisions in ss 37M and 37N of the Federal Court of Australia Act 1976 (Cth), will no doubt be tested in subsequent matters. The present decision provides a clear framework but does not purport to be exhaustive.