ASC PTY LTD [2024] WASAT 39 (3 May 2024)

Equal Opportunity Act 1984 (WA), s 3, s 4, s 37, s 39, s 49, s 50, s 50(c), s 50(d), s 52, s 135, s 135(1), s 135(2), s 135(3), s 136, s 136(1), s 136(2), s 137, Parts II, IIAA, IIA, IIB, III, IV, IVA, IVB, IVC, IX

Equal Opportunity Regulations 1986 (WA), reg 24

BAE Systems Australia Ltd and Commissioner for Equal Opportunity [2019] WASAT 79

Cobham Aviation Services Australia Pty Ltd and Ors [2023] WASAT 21

Commissioner for Equal Opportunity v ADI Limited [2007] WASCA 261

Thales Australia Limited and Commissioner for Equal Opportunity [2012] WASAT 222

1. By an application dated 29 February 2024 (Application), ASC Pty Ltd (ASC) has applied under s 135(2) of the Equal Opportunity Act 1984 (WA) (EO Act) for a further exemption from the provisions of s 37, s 39 and s 49 of the EO Act, for a term of 5 years. On 17 March 2014, and again on 15 March 2019, ASC had been granted an exemption by the Tribunal in materially the same terms as are now sought.
2. Sections 37, 39 and 49 are all concerned with discrimination in the area of employment, including contracting arrangements, on the grounds of race. The term 'race' is defined in s 4 of the EO Act to include 'colour, descent, ethnic or national origin or nationality and the fact that a race may comprise 2 or more distinct races does not prevent it being a race for the purposes of this Act'.
3. Although the Commissioner for Equal Opportunity (CEO) was initially named as the respondent to the Application, he filed an affidavit indicating that he did not wish to be a party or to be heard on the Application. In those circumstances, it is appropriate to make an order that the CEO is no longer a party to the Application.
4. For the reasons which follow I am satisfied that a further exemption should be granted, and I will make an order in the amended terms sought by ASC following the hearing on 30 April 2024 (amended proposed order), on the conditions set out in the amended proposed order, for a term of five years.
5. In these reasons for decision I deal with the following matters:
   • (a) Procedural history;
   • (b) Principles in relation to the grant of an exemption under s 135 of the EO Act;
   • (c) The evidence relied upon by ASC and my findings of fact;
   • (d) ASC's contentions;
   • (e) Disposition - why a further exemption should be granted to ASC, and the terms of that exemption;
   • (f) The terms of the orders which should be made.

1. Under s 135(2) of the EO Act, on an application by a person to whom an exemption from a provision of Parts II, IIAA, IIA, IIB, III, IV, IVA, IVB or IVC has been granted under s 135(1), the Tribunal may grant to the person a further exemption from the operation of that provision.
2. As ASC has previously been granted an exemption, it falls within s 135(2) of the EO Act and may apply for a further exemption.
3. Under s 135(3), notice of the proposed further exemption must be given by newspaper advertisement or otherwise as the Tribunal may direct.
4. On 22 March 2024, in accordance with orders of the Tribunal, ASC published in the West Australian newspaper a notice of the Application. That advertisement indicated that any person wishing to be added as a party to the Application should apply and a determination would be made at the next directions hearing of the matter on 16 April 2024. By 16 April 2024, nobody had applied to be joined as a party.
5. On 4 April 2024, and in accordance with orders of the Tribunal, the CEO filed an affidavit indicating that he had formed the view that the application was similar in substance and content to the previous exemption application, that ASC had complied with the reporting requirements included in the previous orders, and he did not wish to remain as a party or to participate in the proceedings.
6. At the directions hearing on 16 April 2024, it was necessary to adjourn the Application to 30 April 2024, in order to permit the Tribunal to locate its files in respect of the initial grant of an exemption to ASC, and the grant of a further exemption to ASC, for the purpose of trying to locate the reasons given by the Tribunal, on each previous occasion, for granting the exemption. Unfortunately, no reasons were able to be located, either by the Tribunal, or by ASC in its records. It appears that the reasons, assuming they were given, were not recorded in writing, much less published. The fact that no reasons were published does not affect the validity of the exemption order which was granted in each case.[1]
7. At the hearing on 30 April 2024, I raised a number of queries arising from the evidence and the terms of ASC's proposed orders with its representatives, and granted them leave to file a further affidavit, and amended proposed orders.
8. This is an opportune point to emphasise the importance of compliance by the Tribunal with its obligation in s 136(1) to publish its decision and the reasons for its decision, its findings of fact material to the decision and a summary of the evidence on which those finding were based. The grant of an exemption has the effect that an act done in accordance with the provisions of an order will not be unlawful, even if that act would otherwise be unlawful by virtue of the provisions of Parts II, IIAA, IIA, IIB, III, IV, IVA, IVB and IVC of the EO Act.[2] In short, the grant of an exemption has the effect that acts which otherwise constitute unlawful discrimination in accordance with the relevant provisions of the EO Act will no longer be unlawful, provided those acts fall within the scope of the exemption order. Given the significance of the grant of an exemption, it is essential that the Tribunal explains to the parties involved, and to the community, why it is that it considers that an exemption from those protections is warranted in a particular case.
9. In addition, however, the inconvenience and delay caused by the fact that no reasons of the Tribunal were available in this case serves to underscore the practical importance of compliance by the Tribunal with the obligation in s 136(1), in circumstances where a further exemption is sought under s 135(2). Without published reasons, it was simply impossible for the Tribunal to ascertain, with certainty, why the earlier exemption was granted.

(b) Principles in relation to the grant of an exemption under s 135 of the EO Act

1. The issues which arise for determination on an application for an exemption are:
   1. Whether the Tribunal should grant the exemption sought; and
   2. If an exemption is to be granted, for what period of time it should apply; and
   3. If an exemption is to be granted, whether it should be subject to any conditions or limitations.
2. I turn next to consider the principles applicable to the present application.

What principles govern an application under s 135(2) of the EO Act?

1. In his affidavit, the CEO observed that the previous exemption granted to ASC had expired and that the Application may have to be treated as an application for a new exemption. I do not agree. The most recent exemption order expired on 14 March 2024. However, the Application was made on 29 February 2024, at which time the exemption remained in operation. In my view, at the time it brought the Application, ASC was a person to whom an exemption from a provision of the Act had been granted and was therefore entitled to apply under s135(2) for a further exemption.
2. It is unnecessary to decide for present purposes whether any different criteria apply to an application for a further exemption under s 135(2) of the EO Act, in contrast to an application for a new exemption under s 135(1). On the face of those provisions, there is nothing to suggest that different considerations apply to an application under s 135(2) as opposed to one under s 135(1).
3. I note that in BAE Systems Australia Ltd and Commissioner for Equal Opportunity,[3] the Tribunal appeared to adopt the same approach to the application for a further exemption under s 135(2), which was before it, as would have been taken in respect of an application under s 135(1).
4. On the other hand, unless there had been a change in circumstances, or some evidence of a failure by an applicant to comply with the terms and conditions on which a previous exemption had been granted, then it might be assumed that under s 135(2) the Tribunal might more readily, and perhaps in a summary fashion, conclude that a further exemption should be given, for the same reasons as one had previously been given.[4]
5. As I have said, in this case it is neither necessary nor appropriate to determine that issue because neither a copy of the Tribunal's reasons for granting the first exemption to ASC in 2014, nor its reasons for granting a further exemption in 2019, have been located. That being the case, it is not possible to discern why the Tribunal granted an exemption. In those circumstances, it has been necessary for me to approach the matter by applying the principles that would apply under s 135(1) so as to determine, as if for the first time, whether an exemption should be granted. I have, however, taken into account that this is an application for a further exemption, in materially similar terms to the exemptions which have applied to ASC for a decade.

Principles applicable to the grant of exemptions under s 135(1) of the EO Act

1. The principles applicable to the grant of an exemption are now well established. The Tribunal clearly is required to exercise a discretion in determining whether to grant an exemption under s 135. The discretion conferred on the Tribunal is clearly a broad one, but it is not unfettered. It must be exercised in conformity with the limits of the subject matter, scope and purpose of the EO Act.[5] That was the intention of the Parliament in enacting s 135.[6]
2. At first blush, the conferral of a discretion on the Tribunal to grant an exemption appears to be incongruous, in light of the long title of the EO Act,[7] and the objects of the EO Act, which include 'to eliminate, so far as is possible, discrimination against persons on [various] grounds...' in various contexts including work, the provision of goods, facilities and services' and 'to promote recognition and acceptance within the community of the equality of persons of all races and of all persons regardless of their sexual orientation, religious or political convictions or their impairments or ages'.[8]
3. However, it must be remembered that the EO Act does not render all forms of discrimination, in every context, unlawful. And even in those contexts where particular forms of discrimination are rendered unlawful, the EO Act creates a variety of exceptions for specified conduct.[9] Further, Part VI of the EO Act creates general exceptions to the EO Act, including, for example, for religious bodies in relation to certain acts or practices, for educational institutions established for religious purposes, and for aged care facilities.
4. The position is, therefore, that:

The legislature has thereby recognised that in a number of circumstances, which it has identified both specifically by reference to the particular ground upon which the discrimination is practised, and generally, discriminatory conduct can be justified and should not be prohibited. And against the likely contingency that the Parliament has not been able to anticipate all the circumstances in which discriminatory conduct might nevertheless be justifiable, it has empowered the Tribunal to grant exemptions in particular cases.[10]

1. And in the context of Part III of the EO Act (which is relevant to the exemption sought in this case), the specific exceptions in Part III and the general exceptions in Part IV make clear that:

The legislature has taken the view that conduct which would otherwise be prohibited because it is discriminatory should nevertheless be permitted because it can be justified by reference to a variety of considerations which are extraneous to the anti-discriminatory objects of the Act, and in particular the objects specified in s 3 of the Act.[11]

1. What bearing, then, do these considerations have on the Tribunal's exercise of its discretion in s 135? In ADI Limited, Martin CJ explained that:[12]

It follows that when the Tribunal comes to consider an application for exemption from the operation of the Act, it can and should take into account the fact that the legislature has recognised that there are some circumstances in which discriminatory conduct can be justified by reference to considerations which are extraneous to the anti-discriminatory objects of the Act, and that it has conferred upon the Tribunal the power to identify circumstances beyond those specified in the Act, in which conduct which is otherwise discriminatory should nevertheless be lawful.

1. Accordingly, in exercising the discretion under s 135 of the EO Act, the Tribunal's task is to weigh the advantages, both public and private, which would flow from the grant of the exemption against the detriment which flows from discriminatory conduct.[13]
2. In the exercise of a similar discretion under equal opportunity legislation applicable in other jurisdictions, a variety of considerations may be taken into account, in determining whether an exemption should be granted. These illustrate the variety of considerations which the Tribunal may take into account, in weighing up whether to grant an exemption under s 135 of the EO Act. Those considerations have included:[14]
   • whether the exemption sought is necessary;
   • whether the proposed exemption is reasonable and necessary having regard to the reasons for which it is sought;
   • whether there are non-discriminatory ways of achieving the purposes for which the exemption is sought;
   • whether the proponent of the proposed exemption has taken reasonable steps, or is able to take any reasonable steps, to avoid or reduce the adverse effect of a particular act or action before seeking the exemption;
   • the public and private impacts of the grant of the proposed exemption;
   • whether the exemption is in the community interest; and
   • whether any other persons or bodies other than the applicants support the application.
3. In a case where an applicant seeks a further exemption, after having been granted an exemption on an earlier occasion, other factors may be relevant, such as:
   • whether the applicant for the exemption has complied with any terms and conditions on which the earlier exemption was granted; and
   • whether there has been any change in the circumstances which now apply, as compared with those which applied at the time of the earlier exemption and in which the grant of the earlier exemption was considered warranted.

(c) The evidence relied upon by ASC and my findings of fact

1. In support of its Application, ASC relies on the following evidence:
   • (i) Affidavit of Jonathon Brian Comas affirmed 29 February 2024. Mr Comas is the Acting Deputy General Counsel for ASC;
   • (ii) Affidavit of Sara Helen Vila affirmed 29 February 2024. Ms Vila occupies the position of Legal Counsel and Technology Controls for ASC. In her role, Ms Vila is responsible for ensuring compliance by ASC and its subsidiaries with defence trade controls which apply by virtue of Australian and overseas import and export regulations; and
   • (iii) Second Affidavit of Sara Helen Vila affirmed 1 May 2024.
2. In its Application, ASC set out its reasons (essentially its submissions) explaining why a further exemption was sought.

1. The evidence of Mr Comas and Ms Vila was unchallenged, and I accept it. I have summarised their evidence below and made findings as to the material facts upon which my decision has been based.[15]

1. ASC (formerly known as the Australian Submarine Corporation Pty Limited) is a company the shares in which are wholly owned by the Commonwealth of Australia. Under its constitution, ASC is subject to direction from the Federal Minister for Finance.
2. ASC's headquarters are located in South Australia, but a significant proportion of its operations are conducted in Western Australia.
3. In Western Australia, ASC is principally engaged in the maintenance and support of Collins Class submarines (CCSMs) used by the Royal Australian Navy (RAN), and in the operation of a Submarine Training and Systems Centre for the RAN. It conducts operations at facilities in Henderson, and at the RAN base HMAS Stirling on Garden Island, in Western Australia.
4. Since June 1987, ASC has been contracted to the Commonwealth to construct, or maintain, submarines. Its current contract for the maintenance of submarines, known as the In-Service Support Contract (ISSC) will be in operation until at least June 2033.
5. ASC also provides training services to the Commonwealth in respect of the CCSMs pursuant to a submarine training services contract (STSC).

Controls on access to and disclosure of US defence technology

1. In its operations in relation to the CCSMs, as I will explain shortly, ASC works with United States (US) defence technology, which includes technical data, materials and services. That technology is subject to US defence export controls (that is, controls in relation to the disclosure of such technology outside the US). Relevantly, those controls are imposed by the International Traffic in Arms Regulations (ITAR) which is US legislation administered by the US Department of State, and the Export Administration Regulations (EAR) which is US legislation administered by the Department of Commerce. I will refer to the technology which is subject to control under this legislation as Controlled Defence Articles.
2. The US Government has a policy of denying licenses and approvals for the export of Controlled Defence Articles to certain countries which are subject to an arms embargo or sanctions (Proscribed Countries) and to deny access to Controlled Defence Articles by individuals who hold the nationality of such countries.
3. US defence export controls are directed to preventing the unauthorised export of Controlled Defence Articles from the US to another country, the re-export (that is, the export from one country, other than the US, to another country, other than the US) of Controlled Defence Articles or the in-country transfer to 'foreign persons' of Controlled Defence Articles. Relevantly 'foreign persons' are natural persons who are not lawful permanent residents or protected individuals of the US, and foreign corporations that are not incorporated or organised to do business in the US.
4. The ITAR requires that before exporting Controlled Defence Articles, a US company must apply for an export authorisation (US Export Authorisation) specifying the foreign companies to be authorised to receive, handle or access the Controlled Defence Articles, and the end-user and the purpose and duration of the transfer of the Articles.
5. Under the EAR, the export or re-export of Controlled Defence Articles may require a licence. Whether a licence is required will depend on the destination country.
6. There are a number of different kinds of US Export Authorisations, which usually take the form of export licences, technical assistance agreements, manufacturing license agreements and warehousing and distribution agreements.
7. The ITAR mandates that certain clauses must be included in US Export Authorisations such as technical assistance agreements and manufacturing license agreements. Those clauses prohibit the re-export or re-transfer of Controlled Defence Articles by an authorised foreign company to other countries or nationals of those countries, unless specifically authorised.
8. In granting approval for a US Export Authorisation, the US Department of State usually insists on the inclusion of terms and conditions that, amongst other things, limit or prohibit persons of particular nationalities, including those from Proscribed Countries, from having access to Controlled Defence Articles unless specially authorised, and that require all parties to the agreement to comply with the ITAR.
9. The Australian Government may source Controlled Defence Articles directly from the US Government, including pursuant to Memoranda of Understanding (MOU), which prohibit unauthorised access to Controlled Defence Articles by foreign persons or companies. Authorised access may be granted by the US Department of State in response to a request for approval by the Australian government. Where the Commonwealth Government obtains access to Controlled Defence Articles through an MOU, for example, and wishes to permit access by ASC's employees or contractors, the Commonwealth must submit a request for approval, together with the documentation required for approval, and approval must be granted by the Department of State.
10. Under US law, it is unlawful to violate the terms and conditions of a US Export Authorisation, and US companies are held responsible for the acts of persons who are authorised to export Controlled Defence Articles. Similarly, exporting or re-exporting Controlled Defence Articles without a licence, or not in compliance with the EAR, is prohibited. Substantial penalties, the loss of contracts, and debarment from further defence contracts and the export of Controlled Defence Articles, may apply in the event of non-compliance.

How the requirements of the ITAR and the EAR apply to ASC

1. Neither the ITAR nor the EAR apply to ASC directly. However, the requirements of the ITAR and EAR are reflected in terms included in the various agreements to which ASC is party which relate to its work on the CCSMs.
2. By way of example, one of the clauses in the ISSC requires ASC to comply with the requirements of the ITAR, in relation to its access to and use of US defence technology. Similarly, one of the clauses in the STSC requires ASC to 'comply with any distribution or access restrictions they are notified of from time to time'.
3. In addition, ASC is a party to 164 US Export Authorisations in relation to the CCSMs, including MOUs, technical assistance agreements and so on. These include terms which require compliance with ITAR requirements.
4. Furthermore, in order to enable it to perform the ISSC, the Commonwealth supplies ASC with certain export-controlled information which constitutes Controlled Defence Articles that the Commonwealth has received from the US, pursuant to MOUs. Those MOUs require that the Commonwealth's employees or contract workers who access the information must, amongst other things, hold Australian citizenship and not hold a dual nationality of a Proscribed Country. In order to ensure compliance with those obligations, the Commonwealth discloses the information to ASC pursuant to contractual terms which expressly limit the disclosure of the information only to ASC personnel who meet these requirements.
5. Having regard to this evidence, I am satisfied, and I find, that ASC is required to comply with both Australian-imposed controls and US imposed controls in respect of its access to US defence technology.
6. I find that those controls relevantly reflect ITAR and EAR requirements relating to the nationality of those who will be given access to Controlled Defence Articles. The ITAR and EAR requirements with which ASC must comply pertain to limits on access to Controlled Defence Articles by those of its employees or contractors who do not hold only Australian citizenship. These are known as dual or third country nationality requirements (DTCN requirements). In so far as ASC is concerned, a dual national is someone who holds nationality from Australia and one or more other countries, excluding the US, while a third country national is someone who holds nationality from one or more countries other than Australia, excluding the US. A DTCN employee from a Proscribed Country is only able to access classified Controlled Defence Articles if they have US Department of State authorisation to do so.
7. I am satisfied, and I find, that by virtue of the various sources of the obligations to which I have referred, ASC is obliged to comply with the restrictions, imposed by the ITAR and EAR, on the use of Controlled Defence Articles in relation to the US defence technology to which it is given access for the purposes of its operations.

The necessity for ASC to establish the nationality of its employees and contract workers

1. In order to comply with the various obligations to which it is subject, as described above, ASC needs to obtain information about the nationality of those of its employees and contract workers who require access to Controlled Defence Articles, in order to establish whether they meet the applicable DTCN requirements.
2. More specifically, in order to comply with the requirements of the ITAR and the EAR which pertain to it by virtue of its contractual obligations, I am satisfied, and I find, that ASC needs to:
   • (i) request information from existing and potential employees and contract workers, which pertains to their nationality;
   • (ii) take a person's nationality into account in determining whether they can be offered permanent or contract employment which requires access to Controlled Defence Articles;
   • (iii) take a person's nationality into account when making decisions as to the participation of employees and contract workers in certain work which requires access to Controlled Defence Articles;
   • (iv) maintain records of the nationality of all employees and contract workers who have, or may have, or may be required to, access Controlled Defence Articles in the performance of their work;
   • (v) ensure that Controlled Defence Articles are accessed only by persons who are authorised by the relevant US Export Authorisation or the Department of State;
   • (vi) impose limitations or prohibitions on persons of particular nationalities having access to Controlled Defence Articles in the performance of their work;
   • (vii) to the extent necessary to comply with its obligations, disclose to the Commonwealth the nationality of all employees and contract workers who may require access to Controlled Defence Articles in the performance of their work;
   • (viii) if required, disclose to the Department of State and to US-based contractors with whom ASC is a party to a US Export Authorisation, the nationality of employees and contract workers who may require access to Controlled Defence Articles in the performance of their work; and
   • (ix) establish security systems which will prevent the unauthorised transfer of Controlled Defence Articles.
3. I am satisfied, and I find, that in order to ensure it meets its obligations, ASC has implemented plans and policies which require that its employees and contract workers comply with requirements designed to ensure the relevant US export controls are observed. Those plans and policies require that all Controlled Defence Articles in ASC's possession or control be protected and handled in compliance with any relevant Export Authorisations.

Consequences of non-compliance with ITAR and EAR requirements

1. ASC contends, and I accept, that conduct on its part of the kind described in para [57] may constitute unlawful discrimination, contrary to s 37 of the EO Act, on the ground of the race of the employees in question, in the arrangements ASC makes for the purpose of determining who should be offered employment, in the terms or controls on which employment is offered, in the terms or conditions of employment that ASC affords particular employees, by denying employees access to benefits associated with their employment, or by dismissing employees or by subjecting them to a detriment.
2. Similarly, in so far as ASC's contract workers are concerned, ASC contends, and I accept, that conduct of the kind described in para [57] may constitute unlawful discrimination, contrary to s 39 of the EO Act, against a contract worker on the ground of their race, in the terms or conditions on which ASC allows the contract worker to work; or by not allowing the contract worker access to any benefit associated with the work in respect of which the contract with ASC is made; or by denying the contract worker access, or limiting their access, to any benefit associated with the work in respect of which the contract with ASC is made; or by subjecting the contract worker to any other detriment.
3. Finally, ASC contends, and I accept, that because it may be unlawful in the circumstances described for it to discriminate against an employee or contract worker on the ground of their race, in doing a particular act, it would also be unlawful, under s 49 of the EO Act, for it to request or require the employee or contract worker to provide, in connection with, or for the purposes of the doing of the act, information that persons of a different race would not, in circumstances that are the same or not materially different, be requested or required to provide.

1. Both Mr Comas and Ms Vila deposed, and on that basis I am satisfied, and I find, that if ASC was unable to take the steps described in para [57] above, it would have difficulty undertaking further work for the Commonwealth in relation to the CCSMs, in that non-compliance would be likely to limit ASC's capacity to deliver goods and services under contracts pertaining to the use of US defence technology. I am also satisfied, and I find, that in that event, it is possible that ASC may be precluded from performing work of this kind in the future, it may be unable to enter into contracts with US companies which would require access to Controlled Defence Articles, and it may have difficulty obtaining authority to use Controlled Defence Articles in new contracts with US companies.
2. I am satisfied, and I find, that that may limit ASC's ability to meet Australia's defence needs into the future. Were that to occur, that may have adverse consequences for Australia's national interest.
3. If ASC were unable to undertake work for the Commonwealth on the CCSMs, I infer and, on that basis, I find that the consequence for ASC's employees and contractors would be a loss of employment and work, which would result in a loss of skills and expertise relevant to the defence industry in this State.
4. This is no small matter. Having regard to the evidence adduced by ASC, I find that it has approximately 669 employees and contract workers in its Western Australian operations, and over 380 of those are in positions which may require access to technology which is subject to ITAR requirements.
5. On the other hand, in its most recent report to the CEO, the most serious consequences for employees and contract workers - in terms of being denied contractual benefits, like the ability to have access to US defence technology in the course of their work or being denied employment more generally - do not appear to be widespread.

Compliance with the terms of previous exemptions and report to the EOC

1. Mr Comas deposed, and on the basis of his evidence, I am satisfied, and I find, that after ASC was granted the previous exemption it undertook measures to ensure that the exemption was implemented appropriately, employees and contract workers received training on the exemption and its implementation, compliance with the exemption was monitored, and any adverse effects of the exemption on existing and future employees and contract workers were addressed and minimised. Those measures included that ASC implemented an instruction in relation to the exemption, which set out when, under the exemption, ASC was entitled to lawfully request nationality and country of origin information from existing or potential employees or contract workers; how, under the exemption, ASC may lawfully use, record, access and disclose nationality and country of origin information; and the steps taken by ASC to monitor and report compliance with the exemption. ASC also took other measures which it outlined in its report to the CEO dated 2 August 2023, and which are discussed below. On the basis of Mr Comas' evidence, I am satisfied, and I find, that ASC intends to continue to implement these measures if the exemption is granted.
2. I accept that steps such as this are important because they seek to ensure that the application of the exemption is limited to the greatest extent possible, and that all staff of ASC are aware of the limited circumstances in which it may be applied.
3. Further, Mr Comas deposed, and on that basis I find, that ASC has a workplace policy relating to discrimination, bullying and harassment in the workplace which applies to all workers engaged by ASC. The policy sets out how the workers are affected by the exemption and the options available if they have a grievance about discrimination, bullying or harassment. In addition, ASC's employees and contract workers also receive training in relation to unlawful discrimination, harassment and bullying through comprehensive face-to-face training and annually through a legal compliance programme.
4. I accept that these measures are also important to ensure that ASC's staff understand their right to pursue recourse in the event that they are aggrieved by the extent of the application of the exemption, or the consequences of the discrimination which the grant of the exemption permits.
5. It has been a condition of the exemptions granted to ASC in the past that it provide a report to the CEO every year while the exemption remains in force, on the impact of the exemption. Its reporting obligations under that condition, and the information reported to the CEO in the last reporting period were, in summary, as follows:
   • (a) All strategies to ensure compliance with anti-discrimination legislation - ASC advised the EOC that it provided training to all personnel about the Tribunal's Orders, and their implementation, through an online legal compliance programme, on induction and refreshed annually, and that relevant officers provided in person information as required. It also provides instructions to its employees as part of its corporate document management system and applies a voluntary internal screening policy to screen current and potential employees to determine whether providing them with export controlled information would be in breach of the various US export controls, or would create an unacceptable risk of unauthorised disclosure. No complaints were made within the reporting period involving discrimination occurring as a result of ITAR screening or the denial of access to US export controlled technology.
   • (b) The number of job applicants rejected for jobs with access to export controlled information, because they did not meet the various US export controls, but who were appointed to other roles - No job applicants were rejected for this reason during the relevant reporting period but appointed to other roles.
   • (c) The number of employees retrenched or redeployed due to the US requirements, any steps taken to minimise retrenchment or redeployment, and any steps taken generally to mitigate the impact of ASC's responsibility by virtue of the various US restrictions on the deployment of its workforce - No employees were retrenched or redeployed for this reason during the relevant reporting period. Steps taken by ASC to mitigate the impact of its responsibilities to comply with the various US requirements included a pre-employment interview process - (effectively a preliminary screening,) and processes for employees who are denied access to information because they do not meet the US requirements; and
   • (d) The number of vacancies advertised, including the number of such vacancies where candidates are excluded by virtue of their nationality or citizenship - within the reporting period 78 vacancies were advertised, and in four of those a single candidate was excluded due to their nationality or dual citizenship.

1. Mr Comas deposed, and on that basis I am satisfied, and I find, that on 9 June 2023 ASC was granted an extension to its exemption from the Equal Opportunity Act 1984 (SA) in very similar terms to the exemption that previously applied to it in this State, and the renewal of which is now sought.

1. ASC contended that the circumstances which warranted the original exemption in 2014 remain essentially the same.
2. ASC contended that the value of ASC's contractual arrangements in relation to the CCSMs was worth more than a billion dollars. It also contended that the contracts in relation to the CCSMs to which it is a party involve the performance of highly sophisticated technological work of considerable value to the Western Australia economy.
3. Although there was no evidence as to the value of ASC's contracts in relation to the CCSMs, it is notoriously well known that the CCSMs are extremely expensive to build. That being the case, I am prepared to infer, and on that basis I am satisfied and I find, that having regard to the complexity of the technology involved in their operation, and the limited number of companies in Australia which are able to deliver services for maintenance and training in relation to the CCSMs, the monetary value of the work performed by ACS under its contracts each year is likely to be very significant indeed.
4. Having regard to the number of employees and contract workers it engages, I am also prepared to infer that ACS's performance of its contracts in Western Australia has very considerable flow on benefits to the Western Australian economy.
5. ASC also submitted that its contractual arrangements serve the national interest in providing for the maintenance of submarines and the provision of training to the RAN for Australia's defence. I accept that submission.

(e) Disposition - why a further exemption should be granted to ASC, and the terms of that exemption

1. I turn now to consider whether a further exemption, in the terms set out in ASC's proposed amended orders, should be granted.
2. A number of factors support the grant of the exemption.
3. First, the further exemption is clearly necessary to enable ASC to carry out its contractual obligations. There can be no doubt that ASC does not have any choice but to accept the various contractual obligations imposed on it, which reflect the requirements of the ITAR and EAR in relation to its access to US defence technology. I am also satisfied that ASC cannot comply with its contractual obligations, and also comply with the requirements of s 37, 39 and 49 of the EO Act. Only by the grant of an exemption will it be possible for ASC to comply with its contractual obligations while also complying with the EO Act.
4. Secondly, I am satisfied that the proposed exemption is reasonable and necessary, having regard to the reasons for which it is sought. There is nothing to suggest that there is a non-discriminatory means to achieve the purpose for which the exemption is sought. Furthermore, the exemption is designed to excuse ASC only from the provisions of the EO Act concerning racial discrimination in employment and contract work which it would breach in the event that it complied with its contractual obligations which reflect the ITAR and EAR requirements pertaining to US defence technology. In addition, the proposed conditions seek to ameliorate the adverse effects of the exemption as far as possible. That contributes to the overall conclusion that the exemption, granted on those conditions, is reasonable. I give this factor considerable weight.
5. Thirdly, a variety of public interests strongly support the grant of the exemption. I give each of them considerable weight. These are:
   • (i) It is in the national interest that ASC not be rendered (by the refusal of the exemption) unable to perform its contractual obligations in relation to the CCSMs. ASC clearly plays an important role in supporting Australia's CCSM programme, and the maintenance of a submarine capacity is an important element of Australia's national defence strategy.
   • (ii) ASC's performance of its contracts in relation to the CCSMs (which depends on the grant of the exemption) has significant financial benefits for the Western Australian economy, arising, not least, from its engagement of a significant workforce in this State.
   • (iii) There is a public interest in certainty and consistency in decisions made in public administration. The fact that an exemption in very similar terms has been granted on two occasions, and has been in force for 10 years, strongly supports the grant of a further exemption, absent some change in circumstances. There has been no change in circumstances. Furthermore, the contractual obligations which necessitate the exemption will continue to apply for almost another decade. Certainty in relation to the operation of the contracts into the future also weighs in favour of the grant of the further exemption.
6. Fourthly, ASC's ability to perform its contracts in relation to the CCSMs results in a significant financial benefit for the Western Australian economy in the form of employment, the development and retention within this State of a workforce with high value technical skills in relation to US defence technology, and the flow on commercial benefits of staff salaries being spent in Western Australia. It is in the public interest for this State that that benefit continue to be enjoyed.
7. Fifthly, there is clearly a significant private benefit for ASC the grant of the exemption which will permit it to perform its contractual obligations. And the corollary to that is that ASC will clearly suffer a very significant detriment, should it be rendered unable to perform its contractual obligations by virtue of its inability to comply with the requirements of the ITAR and EAR in those contracts. There is also a private benefit for ASC, insofar as it conducts its operations in South Australia and Western Australia in being able to operate under materially consistent requirements relating to equal opportunity legislation.
8. Sixthly, while the CEO does not support or oppose the application for the exemption, the fact that the CEO does not seek to be heard in order to oppose the grant of the exemption, in the terms sought, weighs in favour of the grant of the exemption. So too, does the fact that no person sought to be joined to the proceedings to oppose the grant of the exemption.
9. Seventhly, there is no evidence to suggest that ASC has exceeded the scope of the exemption, or that it has failed to comply with the terms and conditions on which the exemption has been granted in the past. It has taken steps, in accordance with the conditions on which the exemption was granted, to mitigate the adverse effects of the exemption. Further, ASC has complied with the requirement on it to report annually to the CEO concerning the strategies it has employed to ensure compliance with anti-discrimination legislation and to report on the impact of the operation of the exemption. Its compliance with the terms of the exemption supports the conclusion that ASC can be trusted to do so diligently in the future as required, and that weighs in favour of the grant of the exemption.
10. On the other hand, there are some factors which weigh against the grant of the exemption.
11. First, the enactment and continued operation of the EO Act in this State for many years reflects the clear public interest in ensuring that people are not subject to discrimination in their daily lives. Discriminatory conduct is incompatible with the dignity and equality of every person. Furthermore, discrimination on the grounds of race undermines social cohesion, especially in a multicultural community like Australia. For that reason, the grant of an exemption which would permit discrimination on the ground of race is not to be lightly permitted. This factor carries some weight against the grant of the proposed exemption.
12. Secondly, if ASC is permitted to engage in conduct which amounts to discrimination on the ground of race, some of its staff are likely to be detrimentally affected by that conduct. A tangible detriment will arise for DTNC staff if and when information about their nationality is used to exclude them from employment or from undertaking particular work involving Controlled Defence Articles. However, the extent of that detriment needs to be borne in mind. ASC's report to the CEO for the last reporting period indicates that relatively few employees or contract workers appear to have been affected in that way. That supports the conclusion that the requirement for employees, contract workers, and applicants for employment or contract work, to provide information about their nationality or country of origin, is unlikely to cause significant detriment in and of itself.
13. A further, but less specific, detriment, which may arise is that the effect of restricting some employees or contractors from certain work creates two classes of staff, with the result that staff of particular nationalities may be regarded differently, or as less valuable or worthy staff members, by others in ASC's workforce. That is the insidious effect of discrimination. That said, various measures ASC has taken to educate and train staff about discrimination appear to me to be likely to ameliorate the impact of that potential detriment.
14. Taking all of these factors into account, in my view, the factors in favour of the grant of the exemption clearly outweigh those which warrant the refusal of the grant of an exemption.
15. I am therefore satisfied that the exemption should be granted.
16. As for the term of the exemption, in my view, the grant of an exemption for a five year term, which is the maximum period permitted under the EO Act, is appropriate in this case, for two reasons.
17. First, the contractual arrangements which warrant the exemption being granted will continue for at least the next 9 years. An exemption is very likely to continue to be required throughout that period. A term of 5 years will minimise the number of occasions on which an application for an exemption will need to be made.
18. Secondly, having regard to the nature of the arrangements which need to be put in place by ASC, the scale of its operation in Western Australia, in financial terms and in terms of the number of employees, and the consequences for it if an exemption were not granted, are such that certainty warrants the grant of an exemption for the maximum term possible.
19. In my view, the exemption should be granted on the same terms and conditions that have applied to the exemptions granted to ASC in the past. Certainty in ASC's operations warrants the continued application of those conditions in respect of the further exemption. Those conditions endeavour to strike a balance between minimising the practical adverse impact of the exemption on ASC's employees and contract workers, while ensuring that its employees and contract workers are informed of, and given training about, the operation of the EO Act, and the remedies available to them in the event of discrimination. This is particularly important because the exemption applies only according to its terms and does not render lawful acts of discrimination which exceed those which are necessary to meet the requirements of the ITAR and EAR.
20. Furthermore, it is appropriate to continue the condition requiring ASC to make an annual report to the CEO. That requirement to report imports an element of accountability but also permits the Tribunal to consider the impact of the exemption in the event that an application for a further exemption is made.

I will make an order in the following terms to remove the CEO as a party to the proceedings:

1. Pursuant to reg 24 of the Equal Opportunity Regulations 1986 (WA), and having received an affidavit from the Commissioner for Equal Opportunity dated 4 April 2024 which sets out his reasons as to why he does not wish to be a party to the proceedings, the Commissioner for Equal Opportunity is not a party to these proceedings.
2. I will also grant an exemption to ASC, pursuant to s 135(2) of the Equal Opportunity Act 1984 (WA), in the terms set out in the amended proposed orders filed by ASC on 1 May 2024.

I certify that the preceding paragraph(s) comprise the reasons for decision of the State Administrative Tribunal.

[3] BAE Systems Australia Ltd and Commissioner for Equal Opportunity [2019] WASAT 79.

[4] Cf Thales Australia Limited and Commissioner for Equal Opportunity [2012] WASAT 222.

[5] Commissioner for Equal Opportunity v ADI Limited [2007] WASCA 261 (ADI Limited) at [43] (Martin CJ, Wheeler JA and Pullin JA agreeing).

[6] ADI Limited at [47] (Martin CJ, Wheeler JA and Pullin JA agreeing).

[7] The long title is 'An Act to promote equality of opportunity in Western Australia and to provide remedies in respect of discrimination on [certain] grounds ...'.

[9] See, eg, s 50 which provides that Part III of the EO Act (which applies to discrimination on the ground of race) does not include certain conduct in employment such as working in a restaurant or café where the employment of a person of a particular race is required for reasons of authenticity (s 50(c)), or where providing persons of a particular race with services for the purpose of promoting their welfare can most effectively be done by a person of the same race (s 50(d)). See also s 52 which provides that Part II does not apply in respect of any act of the various public sector authorities to which Part IX applies, being an act performed pursuant to a Western Australian law that discriminates between Australian citizens and persons who are not Australian citizens.

[10] ADI Limited at [59] (Martin CJ, Wheeler JA and Pullin JA agreeing).

[11] ADI Limited at [69] (Martin CJ, Wheeler JA and Pullin JA agreeing).

[12] ADI Limited at [70] (Martin CJ, Wheeler JA and Pullin JA agreeing).

[13] ADI Limited at [74] (Martin CJ, Wheeler JA and Pullin JA agreeing).

[14] See the discussion of the approach in New South Wales and Queensland, discussed in ADI Limited at [49] - [52] (Martin CJ, Wheeler JA and Pullin JA agreeing); see also Cobham Aviation Services Australia Pty Ltd and Ors [2023] WASAT 21 at [26] (Glancy DP).