Diversity, equity and inclusion (DEI) initiatives have garnered significant media attention in recent months, especially following a series of executive orders signed by US President Donald Trump. In January 2025, during his first week in office, President Trump issued the 'Ending Radical and Wasteful Government DEI Programs and Preferencing' order, aimed at terminating DEI programs, which (ostensibly) "demonstrated immense public waste and shameful discrimination".1 This executive order mandated that all federal employment practices, union contracts and training policies be reviewed and revised as necessary, so that all roles associated with DEI or 'environmental justice' be eliminated, and all programs and employment requirements to do with DEI, 'equity action plans', and equity-related actions, initiatives, contracts and grants be removed.
This pushback against DEI initiatives has led to multinational corporations like Google, Meta and Amazon reconsidering their DEI policies. Despite the popular media portrayal, however, the reality on the ground often differs, with many companies maintaining their DEI policies but adjusting specific practices, such as hiring quotas.
The recent onslaught of media attention regarding DEI raises important questions about the state of DEI in Australia, whether DEI programs are, in fact, lawful, and what role these initiatives should play in Australian workplaces. As we discuss in this article, while some DEI initiatives may be unlawful in Australia, carefully considered and well-implemented DEI initiatives can, on the other hand, help organisations to fulfil their legal obligations under Australia's legal framework, as well as delivering other economic benefits to organisations.
What is DEI?
While the concept of diversity, equity and inclusion may appear to be straightforward, there continues to be significant confusion about what DEI really is. At a high level, DEI is a framework used by organisations to promote the fair treatment and full participation of all people, especially those who have historically been underrepresented or discriminated against.
Therefore, the term 'DEI initiatives' is a very broad term that can encompass any initiative, program, policy or scheme which seeks to achieve these goals. DEI initiatives can be varied in scope and application and may range from diversity training and cultural celebrations to flexible work policies, sponsorship programs, inclusive hiring practices and pay equity audits.
Legal Framework for DEI in Australian Workplace Laws
In all Australian jurisdictions, there are a number of laws that may either mandate, support or limit (to an extent) the implementation of DEI initiatives in the workplace. These include:
- federal and state anti-discrimination laws
- the Fair Work Act 2009 (Cth)
- state and territory work health and safety legislation
- the Workplace Gender Equality Act 2012 (Cth)
Anti-Discrimination Legislation
At their very core, workplace DEI initiatives seek to promote the full participation of all persons in the workplace, especially of people who have attributes that might make them more vulnerable, marginalised or underrepresented in society. In this way, the purpose of anti-discrimination legislation aligns, to a large extent, with that of DEI initiatives, in that both seek to protect the rights and opportunities of vulnerable or marginalised people.
In Australia the anti-discrimination framework is comprised of various Federal, State and Territory-based laws, including:
- Sex Discrimination Act 1984 (Cth)
- Disability Discrimination Act 1992 (Cth)
- Racial Discrimination Act 1975 (Cth)
- Age Discrimination Act 2004 (Cth)
Additionally, each state and territory has its own anti-discrimination legislation that operates concurrently with federal anti-discrimination laws.
While the scope and definition of 'discrimination' vary slightly between the jurisdictions, at a general level it is against the law for employers to discriminate against employees because of a protected attribute they may have. For example, it is unlawful across Australia for an employer to discriminate against an employee on the basis of any of the following attributes (among others):
- disability
- gender
- marital or relationship status
- race
- age
Whereas anti-discrimination laws predominantly focus on prohibiting negative discrimination, DEI initiatives often go one step further, with a greater focus on positive discrimination. In other words, DEI initiatives are often focused on the concept of 'equity' or equal outcomes for people with a range of personal attributes, rather than merely 'equality' or non-discrimination.
In the context of recruitment, for example, avoiding unlawful discrimination requires employers to ensure that a candidate does not receive unfavourable treatment because of a protected attribute; and, ensuring that the conditions or requirements for the role do not unreasonably disadvantage a group of people with a particular attribute.
On the other hand, a DEI approach to recruitment could mean engaging in a targeted recruitment strategy to secure greater diversity across the organisation, by seeking to employ a woman, or an Indigenous candidate, for example.
DEI's focus on 'positive discrimination' and actively seeking and celebrating diversity, has come under particular scrutiny of late. In focusing on equity, DEI initiatives in the workplace run a fine line between what could potentially amount to unlawful discrimination, versus conduct which is lawful because it is a permitted 'special measure'. This is the challenge that many workplaces are now facing. In conjunction with some groups of people feeling isolated because they are not the target of DEI initiatives, the legal complexity and allegations that DEI initiatives are 'illegal' has fuelled the significant backlash which we are now seeing in the media.
Therefore, employers need to tread carefully when 'positively discriminating' under a DEI program and consider what 'special measures' or other exceptions or exemptions are lawfully available to them when implementing such programs.
Special Measures
Special measures, also known as 'positive discrimination' or 'affirmative action', are designed to achieve substantive equality by allowing actions that would otherwise be discriminatory, and in this way, directly support workplace DEI initiatives. Generally speaking, special measures permit positive discrimination insofar as the conduct is necessary, reasonable and proportionate to address a disadvantage experienced by a group of people with a particular attribute. Special measures usually operate alongside other specific exceptions and exemptions that permit certain types of discrimination under different Australian laws.
For example, section 7D of the Sex Discrimination Act 1984 (Cth) permits special measures implemented for the purpose of achieving substantive equality between men and women, or people who have different martial or relationship statuses.
While an employer's target to achieve equal female and male representation at an executive level may constitute a special measure under the Sex Discrimination Act or other equivalent legislation,2 an initiative to employ only females (for example, due to the requirements or nature of the work) may not meet the requirements under the Act, and thus be discriminatory.3 In such cases, employers need to apply for an exemption from the relevant discrimination tribunal in respect of these measures, to ensure they are not breaching their obligations under anti-discrimination legislation.
Positive Duty under the Sex Discrimination Act
When considering what role DEI initiatives should play in the workplace, employers also need to be aware of their positive duty under Part IIA of the Sex Discrimination Act to take reasonable and proportionate measures to eliminate sexual harassment and harassment on the ground of sex.
DEI initiatives can support employers in fulfilling this positive duty by promoting a diverse workforce, ensuring equity, fostering inclusion, and maintaining accountability.
WGEA Reporting Reforms
The recent amendments to the Workplace Gender Equality Act 2012 (Cth), which place new reporting obligations on employers with 100 or more employees, also support the implementation of workplace DEI initiatives.
Pursuant to these amendments, employers are now required to report on the preventative and accountability measures they are taking in relation to sexual harassment and harassment on the ground of sex, and are asked (when reporting) if they have set targets on gender equality in the workplace. These new obligations appear to encourage the implementation of DEI initiatives, at least to the extent that such initiatives support gender equality.
Fair Work Act
The Fair Work Act also supports DEI goals by prohibiting employers from taking adverse action against employees based on their protected attributes, under its general protections regime.
Other sections of the Fair Work Act that may interact with workplace DEI initiatives include:
- section 578 - which requires that the Fair Work Commission take equity and diversity into account when exercising its powers; and
- section 772 - which provides that terminating an employee's employment on the basis of any protected attribute is unlawful. While this section is similar to the general protections regime under the Fair Work Act, its key function is to allow employees who do not otherwise have a general protections claim to initiate proceedings against their employer on the basis of discriminatory dismissal.
Work Health & Safety Legislation
DEI initiatives also align with the objectives of psychosocial safety found in work health and safety legislation.
Workplace DEI initiatives fit hand in hand with achieving psychosocial safety, because employees in inclusive workplaces generally feel more confident to express their views and be themselves, which supports accountability and a psychosocially safe workplace culture. In light of this, DEI initiatives can assist employers to mitigate psychosocial safety risks in the workplace and adhere to their obligations under work, health and safety legislation.
Economic and Other Benefits of DEI Initiatives
Beyond legal compliance, DEI initiatives offer numerous benefits to Australian employers. Research shows that companies prioritising DEI achieve stronger performance and growth. For instance, McKinsey & Company found that companies with diverse executive teams are 39% more likely to financially outperform their peers.4 This is likely because diverse teams tend to be better at solving complex problems and generating innovative ideas, and because diversity of thought challenges groupthink and encourages more creative approaches to problem-solving.
Moreover, increasing social inclusion can also lead to significant economic benefits. Deloitte Access Economics has estimated that social inclusion contributes $12.7 billion annually to the Australian economy, with $5 billion attributed to increased workplace productivity and $1.2 billion to improved employment outcomes.5
Key Takeaways
While some companies may be rolling back their DEI programs in response to recent international events, such an approach does not appear to align with employers' obligations under Australian anti-discrimination, employment and safety laws, nor their economic interests.
Rather, in most circumstances, workplace DEI initiatives are likely to support employers' legal obligations. Nevertheless, employers need to ensure that any workplace DEI measures are implemented in a way that complies with state and federal anti-discrimination legislation, so as to avoid engaging in unlawful discrimination.
1 The White House, 'Ending Radical and Wasteful Government DEI Programs and Preferencing' (20 January 2025).
2 Jacomb v Australian Municipal Administrative Clerical and Services Union [2004] FCA 1250.
3 Australian Human Rights Commission, Application by Australian Bureau of Statistics (6 September 2016).
4 McKinsey & Company, 'Diversity Matters Even More' (November 2023), at 12.
5 Deloitte Access Economics, 'The economic benefits of improving social inclusion' (August 2019), at 12, 52.
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