Equal Opportunity Act 1984 (WA), s 37, s 39, s 49, s 135, s 135(3), s 136

Boeing Australia Holdings Pty Ltd [2003] QADT 21

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

Re Jupiter Holdings Pty Ltd and Commissioner for Equal Opportunity [2005] WASAT 202

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

1. This is an edited version of oral reasons of the Tribunal delivered on 13 September 2019. The reasons have been edited for grammar and understanding purposes only.
2. The application before the Tribunal was received on 28 June 2019 and is for a renewal of an exemption from the operation of s 37, s 39 and s 49 of the Equal Opportunity Act 1984 (WA) (EO Act) originally granted to BAE Systems Australia Limited (BAE Systems) and BAE Systems Australia Defence Pty Ltd (BAE Defence) (the applicants) by the Tribunal on 4 July 2014 for a period of five years.

1. The renewal application is necessary because of the applicants' ongoing need to comply with the requirements of the International Traffic In Arms Regulations of the United States of America, (ITAR), and the provisions of the EO Act.
2. The initial directions in the matter was held on 19 July 2019, when counsel for the Commissioner for Equal Opportunity (Commissioner or respondent) informed the Tribunal that it would not be taking a position and was excused from further attendance.
3. Pursuant to s 135(3) of the EO Act, the matter was required to be advertised and the matter was adjourned to further directions on 12 August 2019 to allow such advertising to occur.
4. The matter was advertised in The West Australian newspaper on 27 July 2019, with copies of that advertisement provided to the Tribunal.
5. No notifications were received as a result of that advertisement and no submissions were received.
6. At the adjourned directions hearing on 12 August 2018 the matter was adjourned to 13 September 2019 to allow the applicants to file submissions and for the Tribunal's decision and reasons for decision to be given.
7. Under s 136 of the EO Act the Tribunal is obliged to publish its reasons for decision and these reasons are being published in compliance with that obligation.
8. As stated earlier, the current five year exemption was granted on 4 July 2014 and the orders now sought are that the applicants be granted a further five year exemption on the same terms as the previous exemption order.

1. The only evidence before the Tribunal was a detailed affidavit from Ms Angela Wiggins, the chief counsel of BAE Systems. The Tribunal has relied on Ms Wiggins' affidavit as the uncontradicted evidence on behalf of the applicants. Ms Wiggins' affidavit was dated 27 June 2019 and had 33 attachments.

1. BAE Defence is a wholly­owned subsidiary of BAE Systems.
2. ASC Shipbuilding Pty Ltd (ASCS) is now also a subsidiary of BAE Systems, although it was formally a subsidiary of ASC Pty Ltd. The Australian government was formally an ordinary shareholder in ASCS and continues to hold a special 'sovereign' share in ASCS.
3. The ultimate holding company of each of the applicants is BAE Systems PLC, a company incorporated in England and Wales and listed on the London Stock Exchange.
4. Ms Wiggins explained in her affidavit that the applicants are involved in providing some of the world's most advanced technology­led defence, maritime, aerospace and security system solutions to the Australian Defence Force (ADF), and other government and non­government customers.
5. The Australian workforce of the applicants (and their related bodies) is substantial and includes approximately 4,000 workers who are engaged at approximately 50 sites across Australia.
6. The applicants have significant operations in Western Australia and at many of those sites, the applicants carry out works that are affected by the requirement to comply with ITAR.

1. The Tribunal has a broad discretion in the granting of exemptions under s 135 of the EO Act and in Re Jupiter Holdings Pty Ltd and Commissioner for Equal Opportunity [2005] WASAT 202, the Tribunal adopted the following approach to the granting of such exemptions stating at [33]:

... The general body of Australian law that has built up with respect to applications for exemption make it clear that the process that the Tribunal should go through is three-fold. First, the Tribunal should ask whether the conduct sought to be exempted falls broadly within the spirit of one of the express exception provisions in the Act; second, the Tribunal should consider the scheme of the objectives of the Act; and finally, the Tribunal should consider what interests might be pointed to in the application that would justify the granting of the exemption. We would add that these three steps should be tested against a framework of the 'public interest'.

1. However, a number of decisions since that time have confirmed that those three questions do not necessarily embrace all of the considerations which could fall within the object, scope and purpose of the Act in every case.
2. In Commissioner For Equal Opportunity v ADI Limited [2007] WASCA 261 (ADI) the Court of Appeal at [72] stated:

... [P]rovided there is a rational basis for the discriminatory conduct, it will fall to the Tribunal to determine whether the interests to be served by permitting that conduct outweigh the detriment which flows from discriminatory conduct.

1. Further, the Court of Appeal at [49], confirmed the relevance of the law in other jurisdictions when they had regard to the considerations specified under the New South Wales regime which included:

(a) whether the proposed exemption is appropriate or reasonable,

(b) whether the proposed exemption is necessary,

(c) whether there are any non-discriminatory ways of achieving the objects or purposes for which the proposed exemption is sought,

(d) 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,

(e) the public, business, social or other community impact of the granting of the proposed exemption,

(f) any conditions or limitations to be contained in the proposed exemption.

1. Also, in ADI at [52], the Court of Appeal found that the consideration identified by the Anti-Discrimination Tribunal of Queensland in Boeing Australia Holdings Pty Ltd [2003] QADT 21 were also relevant factors including:

(a) whether the exemption is necessary;

(b) whether there are any non-discriminatory ways of achieving the objects or purposes for which the exemption is sought; [and]

(c) whether the exemption is in the community interest[.]

1. The following factors are in the Tribunal's view common to both of the jurisdictions mentioned and as per the decision in ADI relevant to the Tribunal's exercise of its discretion under s 135 of the EO Act. They are:

(a) whether the exemption is appropriate, reasonable and rational;

(b) whether the exemption is necessary;

(c) whether there are any non­discriminatory ways of achieving the objects or purposes for which the exemption is sought; and

(d) whether the exemption is in the public (or private)interest.

1. In light of those authorities, the relevant factors to be assessed by the Tribunal on this occasion in determining whether the proposed exemption should be granted can be distilled into the following five questions.

1. Is the proposed exemption sought necessary? 2. Is the proposed exemption appropriate and reasonable in light of the reasons for which it is necessary?

1. Is it in the public interest that the proposed exemption be granted?

1. Have the applicants taken and will they continue to take steps to mitigate the potential adverse effects of the proposed exemption? and 2. Are there any non-discriminatory ways of achieving the objects and purposes for which the proposed exemption is sought?
2. Further in Thales Australia Limited and Commissioner for Equal Opportunity [2012] WASAT 222 this Tribunal recognised that it is in the public interest for existing exemptions under the EO Act to be renewed where there has been no material change in the applicants' circumstances. The Tribunal explained at [16]:

... Where there is no material change in circumstances, it is in the public interest in terms of orderly and proper administrative decision­making that a decision in relation to a further exemption from the operation of a provision of the EO Act should be made consistently with the earlier decision to grant an exemption[.]

And at [19] the Tribunal found that compliance with prior exemption orders is also a factor weighing in favour of the grant of a further exemption.

1. The United States of America's (USA) Arms Export Control Act authorises the United States (US) Department of State to control the export and import of US­origin defence articles and defence services. These controls restrict the transfer of materials regulated by ITAR (ITAR Controlled Material) outside the USA and to non­USA persons.
2. Ms Wiggins in her affidavit provided a detailed overview of the regulatory framework with which the applicants must comply under both Australian and USA law.
3. In order to fulfil their obligations under their contracts with the ADF and other customers, it is necessary for the applicants to obtain access to ITAR Controlled Material from USA companies and from USA Government agencies and such access is subject to authorisation licences and agreements.
4. Under the agreements and under USA law, the USA exporting companies agree to comply with ITAR when entering into agreements with other companies outside the USA.
5. ITAR provides that ITAR Controlled Material cannot be transferred to a person in a third country or to a national of a third country, unless expressly authorised by the relevant agreement or the approval of a particular agency of the USA Government has been obtained in respect of the individual concerned.
6. As a result of that provision, the applicants must obtain personal information from job applicants, employees and contract workers in order to determine their eligibility to access ITAR Controlled Material.
7. This information includes current and former citizenship, country of birth, current and former passports held, current and former residential addresses and other information about personal ties to countries other than Australia.
8. In the absence of the proposed exemption, the collection of personal information from current and prospective employees and contractors and the making of decisions affecting those individuals based on that personal information would amount to prohibited discrimination.
9. As there is no express exemption under the EO Act that could be of assistance to the applicants in relieving them of this dilemma, the Tribunal is satisfied and finds that the proposed exemption is necessary.

b) Is the proposed exemption appropriate and reasonable in light of the reasons for which it is necessary?

1. It is contended that failure to comply with requirements of ITAR and the agreements made under ITAR would have significant negative consequences, not only for the applicants, such as fines, loss of contracts and loss of access to ITAR controlled material, but also for the USA and parties to the agreements with the applicants. Further, it would have potential consequential adverse effects on Australia's national defence interests by limiting Australia's ability to use and develop important technologies.
2. The applicants seek the proposed exemption in relation to the operation of the relevant sections of the EO Act insofar as those sections extend to the nationality or national origin of:
   1. employees and contract workers of the applicants; and
   2. persons who apply for employment or contract work with the applicants, where their employment or work will or may expose them to ITAR Controlled Material.
3. The applicants seek the proposed exemption because the restrictions imposed by ITAR continue to require them to discriminate against current or prospective employees and contract workers on the grounds of their 'dual national' or 'third country foreign national' status; that is, nationality or national origin under the EO Act. However, the proposed exemption is only sought to the extent needed to permit the applicants to meet the specific requirements of ITAR without contravening the EO Act and the applicant has in place measures to mitigate those adverse events such as internal opportunities to alternative work of equal skills and responsibilities on different projects.
4. In the circumstances, due to the confined scope of the proposed exemption and the measures in place to mitigate its adverse effects the Tribunal is satisfied and finds that the proposed exemption is appropriate and reasonable.

c) Is it in the public interest that the proposed exemption be granted?

1. The applicants submitted that the public interest considerations support the proposed exemption at both the national level, involving Australia's defence capabilities, and the local level, involving the financial and employment benefits that a renewal would bring to Western Australia's (WA) economy.
2. Ms Wiggins explained that, if the proposed exemption was not granted, it may be necessary to relocate work that is currently undertaken in WA to another State or Territory in Australia where relevant exemptions are in place.
3. There are also financial and employment benefits to Western Australia and Ms Wiggins outlined the applicants' business activities in this State which contribute significantly to the WA economy.
4. For example, the applicants engage a substantial number of employees and contractors across their sites in WA and more staff may be needed in WA to work on associated projects in the future which projects are also likely to require access to ITAR Controlled Material.
5. Furthermore, the applicants are currently working on WA-based contracts with a total indicative contract value of approximately $1.1 billion.
6. The preservation of national interests such as defence, are the crux of successful exemption cases and a long line of decisions have recognised that national security and the protection of Australian jobs are matters of public interest sufficient to satisfy an exemption under Australian anti­discrimination and equal opportunity legislation and in the present circumstances, the Tribunal is satisfied and finds that it is in the public interest for the proposed exemption to be granted.
7. Further for the purposes of consistency, there was no evidence that there has been any material change in the way in which BAE Systems and BAE Defence have conducted themselves in WA since the current exemption was made, other than the natural changes in staff numbers and changing work that arises over time.

d) Have the applicants taken and will they continue to take steps to mitigate the potential adverse effects of the proposed exemption?

1. In respect of this issue, the applicants submitted that they intend to rely on the proposed exemption only to the extent necessary to comply with their obligations under ITAR and that they are committed to minimising the impact of any discrimination arising due to the proposed exemption.
2. Ms Wiggins in her affidavit outlined the measures that the applicants and their related entities collectively undertake to ensure that they minimise the reliance on and the impact of existing exemptions and the proposed exemption. The Tribunal also notes that to date no prospective WA employee or contractor has been rejected or moved for ITAR related reasons since the granting of the current exemption. These measures include attempting to find alternative roles and implementing equal opportunity standards and other such issues with training and a careful approach to things like advertising and recruitment.
3. The Tribunal is therefore satisfied that the applicants have taken and will continue to take steps to mitigate the potential adverse effects of the proposed exemption.

e) Are there any non­discriminatory ways of achieving the objects and purposes for which the proposed exemption is sought?

1. The Tribunal notes, as outlined earlier, that the Commissioner was served with the applicants' application and associated materials and a representative for the Commissioner confirmed at the first directions hearing on 19 July 2019 that the Commissioner neither opposes nor supports the application.
2. Further the applicants caused a public notice to be published in The West Australian to inform the public of the application and no members of the public have objected to the applicants' application or sought to be heard in relation to the application.
3. The Tribunal also notes that all of the conditions of the current exemption order have been complied with to date.
4. Ms Wiggins explained and the Tribunal accepts that there are no less restrictive means reasonably available to the applicants which would achieve the same purpose as the granting of the proposed exemption. Therefore, keeping each of the matters outlined in mind, the Tribunal finds that there are no less restrictive means reasonably available to the applicants which would achieve the same purpose as granting of the proposed exemption.

1. Being satisfied for the reasons outlined above in respect of each of the five issues addressed, the Tribunal is satisfied that.
   1. The restrictions imposed by ITAR are not of the applicants' choosing;
   2. It is in Australia's national interests to have access to US technology:

1. for national security reasons, 2. in order to maintain Australia's defence industrial capacity, and

1. in order to maintain and create employment and high technology industries in this country; and 3. It is in the economic interests of WA for the Tribunal to grant the proposed extension because of the adverse impact that the reduction or closure of the applicants' operations in Australia would have on the employment opportunity for people living in WA and the broader WA economy.
2. In the circumstances, being satisfied that the reasons outlined and the findings made weigh in favour of granting the proposed exemption, the Tribunal will grant the exemption sought and make the following orders.

The orders the Tribunal will make in the circumstances are that on the application determined by the Tribunal on 13 September 2019 it is ordered that:

1. Pursuant to s 135(2) of the Equal Opportunity Act 1984 (WA) (the Act) BAE Systems Australia Limited and BAE Systems Australia Defence Pty Ltd be granted a further exemption from s 37, s 39 and s 49 of the Act on the conditions set out in paragraphs 1 and 2 of the order of Curthoys J made on 4 July 2014 in matter number EOI 9 of 2014, a copy of which order is attached to this order.
2. Pursuant to s 135(1) of the Act, ASC Shipbuilding Pty Limited is also granted an exemption from s 37, s 39 and s 49 of the Act on the conditions set out in paragraphs 1 and 2 of the order of Curthoys J made on 4 July 2014 in matter EOI 9 of 2014.
3. The applicants' compliance with these orders will be considered in connection with any future renewal of these orders.
4. The exemptions outlined in orders 1 and 2 above will remain in force for five years from the date of this order.

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