CHURCHES are battling to keep their right to refuse to employ gay, lesbian and transgender people.

The Federal Government has thrown open for debate the laws which exempt religious organisations from court action if they refuse to employ or have as volunteers gay, lesbian and transgender people - if this conflicts with the organisation's religious beliefs, reported The Advertiser.

Many religious groups no longer discriminate when they employ people but some have bans, most commonly in the employment of teachers.

South Australian Equal Opportunity Commissioner Anne Burgess said if the exemption to discriminate was continued, it should be limited to jobs directly involving spiritual or religious activities.

"A number of people are saying the ability of religious groups to discriminate should be reduced to a minimum, so it should only be appropriate if it is a person teaching religion or carrying out some religious duty," she said. "When it comes to whether the cleaner or the librarian (is gay, lesbian or transgender) why should it matter?"

The Labor Party made a 2010 election promise to ban discrimination on the basis of sexual orientation and gender identity in a consolidation of anti-discrimination laws.

The religious exemption is the most contentious of the 30 questions proposed by the Federal Government in public consultation.

Question 22 states: "How might religious exemptions apply in relation to discrimination and gender identity?"

Many church groups have defended the need to discriminate including the Australian Catholics Bishop Conference, which has told the Federal Government: "The right to freedom of conscience and religion should be upheld as there is scope for the attributes of sexual orientation and gender identity to undermine the freedom of Catholic bodies to have the right to employ or admit those who are committed to Catholic teachings and beliefs".

Uniting Care Wesley Adelaide spokesman Mark Henley said the organisation did not believe the right to discriminate was needed.

The South Australian Bar Association, in its submission by president Mark Livesey QC, says: "A religious organisation which is contracted by the government to provide a welfare service should not be permitted to discriminate by refusing to employ homosexual or lesbian staff."