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Can a business refuse to provide goods or services to unvaccinated customers?

29 September 2021

#Workplace Relations & Safety, #COVID-19

Published by:

Adrian Zagami

Can a business refuse to provide goods or services to unvaccinated customers?

As Federal and State governments begin to announce the roadmaps for easing COVID-19 restrictions and freedoms for vaccinated Australians, businesses preparing to re-open are challenged with how to manage the risk of COVID-19 being transmitted in the workplace.

From 11 October 2021, being the Monday after NSW is expected to reach the 70 per cent full vaccination target, restrictions will be eased to allow those who are fully vaccinated, and those with medical exemptions, to access venues including hospitality venues, retail stores and gyms. Current stay at home orders will remain in place for those who are not fully vaccinated until 1 December 2021, when the stay at home orders are expected to be lifted.

Businesses that refuse to provide goods or services to unvaccinated customers could face a discrimination complaint if the customer cannot be vaccinated because of a ‘protected attribute’. Businesses must be able to show the vaccination requirement is ‘reasonable’ in the circumstances to successfully defend a discrimination complaint.

The Court may consider the existence and scope of any relevant law including, for example, a Public Health Order, when assessing reasonableness. Businesses should therefore have regard to the Public Health Orders in place at the time when assessing if a vaccination requirement is reasonable.

A full exemption to the discrimination laws is available if a vaccination requirement is implemented in direct compliance with a specific law such as a Public Health Order.

Anti-discrimination laws in the provision of goods and services

Anti-discrimination laws apply to businesses in the provision of goods and services, including, for example, hospitality venues, retail stores and gyms.

A blanket ‘no jab, no service’ requirement for customers may amount to ‘indirect discrimination’ if a customer cannot be vaccinated, and therefore cannot comply with the requirement because of a ‘protected attribute’.

This article focuses on the key Commonwealth anti-discrimination laws which may be enlivened by a blanket requirement that customers be vaccinated as a condition of service. We caution that businesses must also comply with State and Territory anti-discrimination laws and note that those jurisdictions may offer further protections than those arising at the Commonwealth level.

What is indirect discrimination?

Indirect discrimination is a form of unlawful discrimination occurring when:

  1. a requirement is imposed that, on its face, is neutral and applies to everyone
  2. the requirement has a disadvantageous or disproportionate impact on a person or group of people sharing a ‘protected attribute’
  3. the requirement is ‘not reasonable’ in the circumstances.

1. Requirement applies to everyone

This means the requirement has a blanket application – the requirement itself does not intend to single out and discriminate against particular individuals. Instead, the requirement applies to everyone.

2. Requirement has a disadvantageous or disproportionate impact because of a ‘protected attribute’

A ‘protected attribute’ is a characteristic that, by law, cannot be discriminated against. ‘Protected attributes’ at the Commonwealth level and most likely to apply in this context are:

  • medical reasons, including pregnancy or a disability, protected by the Sex Discrimination Act 1984 (Cth) and the Disability Discrimination Act 1992 (Cth), respectively
  • age, protected by the Age Discrimination Act 2004 (Cth).

Importantly, the Disability Discrimination Act 1992 (Cth) has a broad definition of ‘disability’, including total or partial loss of functions. Also, the disability does not need to be present and can include a past or future disability.

The provisions of the Age Discrimination Act 2004 (Cth) may be engaged on the basis of vaccine availability to particular age groups. For example, until recently, Australians aged younger than 16 had limited access to a COVID-19 vaccine.

If a business refuses to provide goods or services to an unvaccinated customer, and the customer cannot be vaccinated because of a ‘protected attribute’, the customer may have grounds for an ‘indirect discrimination’ complaint. It is important to note that the NSW Government roadmap includes freedoms for those with ‘medical exemptions’ from full vaccination.

Further, the Disability Discrimination Act 1992 (Cth) imposes a positive obligation to make ‘reasonable adjustments’, if doing so would mean that a person could comply with the relevant requirement, unless making the adjustment would cause unjustifiable hardship. Businesses will therefore need to consider an ‘adjustment’ in the form of flexibility for those with legitimate medical reasons for not being vaccinated.

Taking a personal ‘anti-vaccination’ stance is not, in and of itself, protected under discrimination laws.

3. Requirement is ‘not reasonable’

A business will not be found to have engaged in ‘indirect discrimination’ if they can show the requirement is ‘reasonable’ in the circumstances.

The court will assess this on a case-by-case basis and will consider:

  • any applicable public health orders or directions supporting a business’s vaccination requirement for customers. As discussed above, a full exemption is only available if a vaccination requirement is made in direct compliance with a specific law. In NSW, businesses should be aware of the greater risk of a vaccination requirement being unreasonable from 1 December 2021, where those unvaccinated will enjoy greater freedoms
  • if the business needs to implement the vaccination requirement to comply with work health and safety obligations. This includes considering whether other measures can reasonably control the risk of transmission of COVID-19, such as social distancing or mask-wearing, and the risk profile of the type of work environment as has been illustrated by the NSW Government’s different approaches towards indoor and outdoor venues
  • reasons for the vaccination requirement, including if the requirement is necessary for the business’s operational needs
  • the nature of the goods or services being provided. The vaccination requirement is likely to be ‘reasonable’ if, for example, the business’s services are essential for vulnerable people and/or those with disabilities
  • proportionality – is the disadvantage suffered by the customers arising from the requirement proportionate to the result sought by the requirement?

At this stage, and in most circumstances, a vaccination requirement is more likely than not to be considered ‘reasonable’ due to the outbreak of the highly contagious Delta-variant, and the effectiveness of vaccines in reducing the serious health risks arising from the virus. This is also in the context of the NSW Government Public Health Orders restricting unvaccinated people from accessing venues until 1 December 2021.

There are, however, exceptions to the NSW Government Public Health Orders which means that a blanket ‘no jab no service’ requirement may not be reasonable in all circumstances. For example:

  • those with medical exemptions are provided freedoms together with those who are fully vaccinated. It would therefore likely be unreasonable to apply a blanket ‘no jab no service’ requirement to those individuals in light of this express exemption
  • if those with a medical exemption are provided freedoms, it follows that the same exemptions apply to individuals with other legitimate reasons for not being vaccinated and where those reasons are because of the individual having a protected attribute under discrimination laws, for example their age.

We caution businesses from taking a blanket approach and giving consideration to flexibility where an individual has legitimate reasons for not being vaccinated, particularly those with medical reasons. Consider alternatives which also satisfy work health and safety obligations, such as the individual producing a recent negative COVID-19 test result.

Key takeaways

As we edge closer to ‘freedom day’, currently scheduled for 11 October 2021, we anticipate the Federal and State governments will provide further guidance on whether businesses can refuse to provide goods or services to unvaccinated customers. Until and unless a vaccination requirement of this kind is reflected in a specific law, such as a Public Health Order or Direction, businesses are not fully immune from discrimination complaints.

Businesses should undertake a work health and safety risk assessment which specifically considers:

  • whether a vaccination requirement is ‘reasonable’ with regards to its purpose, proportionality and consequences
  • whether flexibility, such as customers producing a negative COVID-19 test result, can be afforded to those who are unable to comply with a vaccination requirement for legitimate reasons
  • if flexibility is impracticable or not feasible, the reasons for this by reference to the business’s specific operational needs
  • the approach once restrictions are further lifted for unvaccinated people (currently anticipated to be 1 December 2021).

Businesses should continue to monitor for government announcements given the rapidly changing position as vaccination targets are reached.

Authors: Louise Rumble & Adrian Zagami

The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this article is accurate at the date it is received or that it will continue to be accurate in the future.

Published by:

Adrian Zagami

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