Each of the Companies has entered into contracts with the Commonwealth of Australia Department of Defence and with other companies in Australia and in the United States of America, to provide services to the Australian and American Armed Forces. Some of the services involved the use of what is known as "Controlled Material". Some of the services involve the manufacture of arms and arms technology.
In order to be able to source Controlled Material and to undertake defence projects in the American market, the Applicant Companies are required, as a condition imposed by the United States of America, to comply with certain US legislation. The principal legislation is the International Traffic in Arms Regulations and the Export Administration Regulations. The Applicant Companies cannot undertake a substantial part of their business at all unless that legislation is complied with.
The legislation requires the companies to employ only nationals of certain countries on projects that require access to Controlled Material or which are Controlled Projects. For these companies to discriminate in this way against or in favour of certain nationalities is a clear breach of the Equal Opportunity Act.
The Applicant Companies have previously obtained an exemption in respect of this conduct, and now seek that exemption to be renewed. In making this application, they join a growing number of companies involved in defence related work who have had to similarly seek exemption in order to trade with the United States of America.
The companies have made this application in each other State of Victoria, and been granted an exemption on roughly the terms sought in this application.
I heard this application on 14 September 2007. I had previously ordered that this application be widely advertised, and notice of the application be forwarded to the relevant unions. Neither the Applicant nor the Tribunal have received any submissions in response to the application, apart from correspondence from the Equal Opportunity and Human Rights Commission, to which I will presently refer. There was no appearance for any person at the hearing of the application, except for the Applicant.
I indicated on the hearing of the application that I would grant the exemption sought. I now provide my reasons.
This application was last before the Tribunal on 24 June 2004. On 5 July 2004, the exemption was granted for a period of three years, the limit allowed by the legislation. On 25 July 2007, I made an interim order that the previous exemption be extended, pending the final hearing of this application. This was an interim measure to allow the matter to be fully aired before me as required under the legislation, and to allow the Applicant to continue under the benefit of the legislation in the meantime.
When this matter was before the Tribunal in 2004 it was heard by Deputy President McKenzie.
In granting the exemption at that time, she observed that the consequences, if the Applicant was unable to obtain an exemption in the terms sought, would be these:-
Australian Government defence upgrades and modernisations would be delayed and possibly compromised.
Current projects may have to be completed in the United States of America at increased cost.
About 40% (or greater) of the Applicant's workforce would have to be deployed or be retrenched.
There would be staff losses in ancillary staff, such as sub-contractors, management and ancillary staff.
There would be a major reduction to the Applicant's contribution to the tertiary education sector.
In her view, it was appropriate then to grant the exemption to protect the public interest, having regard to the above deleterious effects on the Australian community.
In support of the application before me, I have been provided with information which confirms that these considerations are still of extreme importance.
I have been provided with a submission from the Equal Opportunity Commission. The Commission did not seek to intervene in this matter, but forwarded a submission, essentially relying on its submissions to the Tribunal in the exemption application of Re Boeing(2007) VCAT 532, a decision made by the President of this Tribunal earlier this year.
The Commission also drew attention to the issue of reporting conditions, but made no submission in relation to the reporting framework proposed by the Applicant in this case.
Deputy President McKenzie made detailed orders as to reporting conditions which were required by her as a condition of the order.
Those conditions, briefly summarised, were as follows:-
A worker required to be moved from a project to comply with the Applicant's obligations under United States law should be given an explanation for the transfer and steps taken to avoid race-based hostility because of the transfer.
Before rejecting an application for employment because of the need to comply with United States law, the Applicant must consider the feasibility of employing the person in other work, or obtaining the necessary United States Government approvals.
The Applicant must rely on the exemption only to the extent necessary to enable it to comply with its contractual obligations.
The Applicant filed an affidavit of Andrew McKibben which very comprehensively detailed the factors relied on to demonstrate the need for this exemption, the way in which the exemption had worked out in practice since 2004, and the Applicant's compliance with the terms of the previous orders.
Mr McKibbin also appeared before me. He told me that the Applicant Companies had made many successful submissions to the United States Authorities for relaxation of the regulations in particular circumstances. The Applicant had made submissions on behalf of particular employees and classes of employees, and these submissions had sometimes been successful. I formed the view that the Applicant was extremely mindful of the need to promote the principles of equal opportunity and to take every opportunity to do so. I was referred to the Equal Opportunity Guidelines of the Applicant generally. The Applicant's Appropriate Workplace Behaviour Policy and Framework were both produced before me in this application. I have no reason to doubt that the Applicant makes strenuous efforts to promote equal opportunity in the workplace as much as it can, within the confines of its contractual obligations which are the subject of this exemption.
In the Boeing case, the President required the Applicant to comply with several additional reporting requirements. Those reporting requirements were designed to capture data on the effect of the exempted conduct on the workplace, and the numbers of potential employees required to be rejected because of the discriminatory conduct exempted. The reporting requirements mirrored requirements imposed on Boeing in a similar exemption application in New South Wales by the Anti Discrimination Board in that State on the Boeing group of companies, and also on the Applicants here, the Thales group of companies, in an order gazetted in that state on 1 July 2005.
The Applicants have submitted to me that I should not follow the format of those reporting conditions. Their experience has shown the reporting conditions to be, in some respects, incapable of compliance, and in other respects, prone to produce unintentionally misleading statistical information.
The detail of this submission is set out at paragraph 132 to 135 of the affidavit of Ian McKibbin sworn 3 September 2007.
I am persuaded that the concerns expressed by Mr McKibbin are valid. Accordingly, I have made orders which incorporate revised reporting conditions.
I have advised the Applicant that on the next occasion that an application for exemption is made, the provisions of the Victorian Charter of Human Rights and Responsibilities Act2006 will be operative. Because of this Act, the Tribunal, in considering any further exemption application, will be required to interpret the relevant provisions of the Equal Opportunity Act in a way that is compatible with human rights, as those rights are defined in the Charter. International law and the judgments of domestic, foreign and international Courts and Tribunals relevant to a human right may all be considered when interpreting a statutory provision.
In its submission to the Tribunal in the Boeing case, which was also forwarded to the Tribunal in respect of this case, the Commission has dealt in some detail with the likely application of the charter to exemptions applications and the principles to be applied in future determinations.
For the purpose of this application, the Charter does not operate. I, however, have pointed out its application to the representatives of the Applicant on the hearing of this application, and have warned them that any further application will have to deal with its terms.
Cases Cited (1)
ADI Limited (Anti-Discrimination) [2007] VCAT 2242 (27 November 2007)