1. The Applicant Companies employ 3,276 people in Australia and New Zealand, 871 of whom are employed in Victoria.
2. Mr Jackson's affidavit sets out the particular work in which the Applicant Companies' Victorian workforce are involved. It is apparent from the material produced to the Tribunal that the Victorian workforce are engaged in projects which produce items and equipment, including vehicles and munitions, for use by the Australian Defence Force and the Royal Australian Navy. The workforce is in a number of locations including Bendigo and Benalla. The value of the current and proposed projects is estimated in the range of more than $2 billion over the next approximately eight to 10 year period.
3. Mr Jackson's affidavit set out material concerning the way in which the Applicant Companies' use of controlled material contributes to Australia's defence capability, in particular in the context of its relationship with the US.
4. I am satisfied on the undisputed evidence before me that the production of those items and materials are of benefit to Australia's defence capability and to the Victorian economy. The employment of these Victorians is important to them individually and to the State of Victoria. I accept that, if an exemption were not granted under the EO Act, it would be open to the Applicant Companies to move that work to another Australian state or overseas.

1. In BAE Systems Australia Limited and Raytheon Australia Pty Ltd,[5] I discussed the US export laws and changes which came into effect on 15 August 2011. Mr Jackson's affidavit discussed those matters and other developments which may impact on future reliance on an exemption in respect of race related discrimination. In brief, the amendment allows workforce members who are dual nationals or nationals of prohibited countries to access controlled material. Access is achieved either through the individual holding an appropriate Australian Government security clearance or via a screening process. In respect of the latter, the central question is whether the individual has 'substantive contacts' with persons from prohibited countries. Such contacts are presumed to raise a risk that controlled material may be diverted to those prohibited countries.
2. Mr Jackson's affidavit also makes reference to other measures, such as the Australian-United States Treaty on Defense Trade (which came into effect on 16 May 2013) and the Commonwealth Defence Trade Controls Act 2012 (which commenced on 6 June 2013).
3. It is not necessary to set out more detail about those matters here because it is apparent that, although there have been changes to the US export laws and efforts are being made to ameliorate their effects on employment practices in Australia (and so in Victoria), they are yet to obviate the need for an exemption. That is because, in respect of some workforce members and some controlled materials, there will continue to be a need to make decisions based on workforce members' nationality or national origin. Neither the amendment nor the other measures cover the field.
4. Mr Jackson noted that, while the risk of direct race based discrimination is reduced by the advent of the US export laws amendment, there is still a risk of indirect discrimination, because a person from a proscribed country is less likely to pass the substantive contacts test than a person who is not from a proscribed country. Accordingly, an exemption would still be required to ensure the Applicant Companies do not engage in prohibited discrimination.
5. In earlier decisions, I discussed the consequences of non-compliance with the US export laws. Mr Jackson's affidavit confirms that those consequences are significant. In addition to the imposition of very significant financial penalties, breaches are likely to lead to the Applicant Companies being prohibited from accessing controlled material for a specified period. That would mean, in respect of that part of the Applicant Companies' business which deals with controlled material, work could not continue not only in Victoria but also across Australia. Mr Jackson's affidavit stated that would impact on around 1,000 employees. While some may be able to be redeployed, not all may be and so significant redundancies could result. Another consequence would be that the Applicant Companies would not be able to continue to produce certain defence items which are required by the Australian Government.

1. The previous exemption was subject to a condition that the Applicant Companies provide six monthly reports to be Commission. Those reports were required to disclose

(a) All strategies in place to ensure compliance with anti-discrimination legislation, including all training programs, internal audits and complaints within each reporting period;

(b) The number of job applicants rejected for US Export Laws purposes, but subsequently appointed to other roles within each reporting period;

(c) The number of employees retrenched or redeployed due to US Export Laws requirements and any steps taken to minimise retrenchment or redeployment, and any steps taken generally to mitigate the impact of the Applicant Companies' responsibility under US Export Laws on the deployment of its workforce within each reporting period; and

(d) The number of vacancies advertised within each reporting period, including the number of such vacancies where candidates were required to satisfy US Export Law related requirements.

1. In an affidavit sworn on 12 November 2014, the Applicant Companies' Deputy General Counsel, Mr Andrew Copping, confirmed that the required six monthly reports were made to the Commission. As noted earlier, the Commission did not seek leave to intervene in this application and nor did it make any submissions as to the content of the reports.
2. Mr Jackson's affidavit states that, during the term of the previous exemption:
   • Only one discrimination complaint was made and that had no relation to having to meet US export laws requirements;
   • No job applicants were rejected for a position with the Applicant Companies due to US export laws requirements;
   • No employees were retrenched or redeployed due to US export law requirements; and
   • The Applicant Companies have kept in place appropriate strategies to ensure compliance with antidiscrimination legislation.
3. Mr Copping's affidavit attached the reports made to the Commission. They show that over the period 1 January 2011 to 30 June 2014, there were 437 vacancies advertised and for 108 of those candidates were required to satisfy US export laws related requirements.
4. Mr Jackson' affidavit set out the steps the Applicant Companies take to minimise the impact of the US export laws on its employment practices. They include:
   • Where possible, considering whether job applicants, who cannot have access to controlled material, would be suitable for other roles;
   • The development of comprehensive anti-discrimination policies which are updated from time to time. The policies address all aspects of anti-discrimination including harassment, bullying, vilification and victimisation;
   • Training programs for employees who work with controlled material to ensure that they understand why race related information is sought by the Applicant Companies within the context of the US export laws. Face to face training is given every two years with refresher training available online. New employees receive online training as part of the induction process;
   • The Applicant Companies have a Technology Control Plan that includes the appointment of certain staff with responsibility for ensuring that controlled material is only accessed by authorised personnel. The plan also deals with location specific controls which provide for areas where work involving controlled material occurs to have limited access. Access to those areas is managed by physical locks or swipe cards and access to computer drivers is managed; and
   • The Applicant Companies have a security committee which reviews compliance with the US export laws on a quarterly basis. Internal audits addressing compliance with all applicable laws are also undertaken.
5. I am satisfied that the evidence shows that the Applicant Companies have taken steps to ensure that its reliance on the exemption is as limited as possible. That position is supported by the fact that no employee made a submission to the Tribunal and none of the unions representing the Applicant Companies' workforce made a submission.

1. I have referred above to the prohibitions on discrimination contained in the EO Act raised by this application. Section 13 says that the EO Act does not prohibit discrimination if an exemption applies. The consequence of section 13 is that, the conduct may be discriminatory under the EO Act, but there is no breach of law when that conduct is engaged in, as it is not prohibited discrimination. In other words, that conduct is taken out of the Act.
2. The provisions dealing with exemptions are found in sections 89 and 90 of the EO Act.
3. Section 89 says that the Tribunal may, by notice published in the Government Gazette, grant an exemption from any provisions of the EO Act in relation to a person or classes of persons or an activity or class of activities or any other provision in any other circumstances specified by the Tribunal. An exemption may be granted for any period of not more than five years. An exemption may be renewed from time to time for a period of not more than five years. Exemptions may be granted or renewed subject to any conditions the Tribunal considers fit.
4. Section 90 of the EO Act sets out mandatory considerations for the Tribunal when exercising the power under section 89. Section 90 says:

In deciding whether to grant, renew or revoke an exemption, the Tribunal must consider -

(a) whether the proposed exemption is unnecessary because -

(i) an exception or exemption in this Act already applies to the conduct sought to be exempted; or

(ii) the conduct sought to be exempted would not amount to prohibited discrimination; and

(b) whether the proposed exemption is a reasonable limitation on the right to equality set out in the Charter of Human Rights and Responsibilities; and

1. As a consequence of section 32(1) of the Charter of Human Rights and Responsibilities Act 2006 (Charter), the Tribunal must interpret section 89, so far as it is possible to do so, compatibly with human rights. The Tribunal is required to undertake the usual interpretative process to identify the meaning of section 89 and also to consider whether the purpose of section 89 can be interpreted compatibly with human rights.[6] Section 32(1) seeks to ensure that Charter rights are kept in mind when a statute is construed but does not require the language of a section to be strained to effect consistency with the Charter.[7]
2. The plain words of section 89 indicate that the purpose of the section is to empower the Tribunal to exercise a broad discretion to grant, renew or revoke exemptions from provisions of the EO Act. The Tribunal may apply conditions to the exemption and determine its term. Section 90 requires that the Tribunal take into account the listed matters when exercising the discretion.
3. As discussed above, the current exemption will expire on 15 December 2014. I am satisfied that there is no exception under the EO Act which applies and so, in the absence of an exemption, the conduct the applicant seeks to engage in would amount to prohibited discrimination. The proposed exemption is not unnecessary under section 90(a) of the EO Act.
4. Section 90(b) directs the Tribunal to one of the human rights created by the Charter. As section 90(c) is open ended, the Tribunal may also take into account any other human rights which arise in the circumstances. In this way, the purpose of section 89 can be interpreted compatibly with human rights.
5. The onus of establishing that it is appropriate to renew the exemption falls on the applicant.

1. When exercising the discretion created by section 89 of the EO Act, the Tribunal must consider the matters listed in section 90. Further, under section 38(1) of the Charter, as a public authority, when making that decision the Tribunal must not fail to give proper consideration to a relevant human right.[8] The right to equality is considered as a mandatory consideration under section 90(b). In the context of this matter, the right to privacy contained in section 13 of the Charter may also be relevant.
2. When considering whether to grant an exemption it is also appropriate that the Tribunal have regard to the objectives of the EO Act. Where an exemption has been previously granted in the same terms, its use over the term of that exemption will be relevant. Other circumstances surrounding the application are also considered.
3. In BAE Systems Australia Limited and Raytheon Australia Pty Ltd, I discussed the Tribunal's approach to exemption applications of this kind and the Charter. Those decisions also discussed the other matters which are to be considered under section 90(c) of the EO Act. I do not intend to repeat the broad analysis but rather adopt it here. I note that the written submissions filed in this matter made reference to the analysis set out in BAE Systems Australia Limited and did not take issue with the approach.
4. In respect of the Charter and the question as to whether any limits on human rights are justified under section 7, in summary, the matters for consideration include:
   • Taking into account the importance of the human rights which are or may be engaged but noting that they are not absolute and may be reasonably limited;
   • The purpose for which the exemption is sought and the importance of the resulting limitation on human rights. Here, allowing the Applicant Companies to comply with the US export laws which they and the Australian Government have no power to alter and to enable them to operate their business in a lawful manner;
   • The nature and extent of the limitation and the relationship between the limitation and its purpose. Here, the terms of the exemption have been designed to ensure that it goes no further than necessary to achieve compliance with the US export laws and cause the least interference with the relevant human rights while allowing the Applicant Companies to operate their business which benefits the Australian Government and Victorians; and
   • The absence of any less restrictive means to achieve the purpose of the exemption where the amendments to the US export laws and other developments (such as the Treaty and Commonwealth legislation referred to in paragraph 25 above) have not eliminated the need for the Applicant Companies to seek nationality and national origin information from its workforce from time to time.

1. Applying the same approach as discussed in the above earlier decisions to the considerations which arise under section 7 of the Charter, I am satisfied for those reasons that the limitation on the rights to equality and privacy which may result from the granting of the exemption may be justified.
2. For the reasons discussed in those decisions and above, I am satisfied that the interests served by the exemption justify taking the described conduct out of the prohibitions in the EO Act. I have had particular regard to the security interests of Australia, the employment and economic interests of a number of Victorians and the fact that the impact of earlier exemptions on Victorians has been so limited to date.
3. I emphasise that I consider it significant that the Applicant Companies would not seek nationality based information from its workforce at all if it were not for the existence of the US export laws. It must comply with those laws to undertake its business. The exemption allows it to comply with Victorian law also. There is no other reason the Applicant Companies seek to have their conduct taken out of the EO Act and would not seek the exemption otherwise. While it is to be hoped that the Applicant Companies will have reduced recourse to an exemption over time, it remains the case that an exemption is the only means by which the Applicant Companies may both undertake its business and avoid engaging in prohibited discrimination.
4. The applicant has been granted similar exemptions in New South Wales and Western Australia. I have already referred to potential employment consequences if the applicant's operations are moved away from Victoria. I consider it appropriate to give weight to the fact that equivalents of this Tribunal have reached the view that the exemptions are, under the terms of similar legislation, appropriate.
5. The Tribunal has in recent years granted similar exemptions to two other entities in Victoria.[9] For the sake of consistency and predictability in decision making, in the absence of a marked difference in circumstances or some particular matter relevant to this case, it is appropriate that the exemption be granted.
6. I have concluded that a renewal of the earlier exemption ought to be granted in the terms sought and that it should be for the period of five years commencing on the expiry of the second interim exemption, 16 December 2014. I have made the exemption conditional on the same reporting to the Commission every six months.

[1] ADI Limited [2007] VCAT 2242; Boeing Australia Holdings Ltd [2007] VCAT 532; Raytheon Australia Pty Ltd v Victorian Equal Opportunity and Human Rights Commission [2011] VCAT 796; Thales Australia Limited and ADI Munitions Pty Ltd [2011] VCAT 729; BAE Systems Australia Limited [2012] VCAT 349; Raytheon Australia Pty Ltd, H124/2013, 16 April 2014

[2] Section 3 definition - see sections 6, 7, 8 and 9 which set out the attributes protected by the EO Act and the definitions of discrimination, direct and indirect discrimination. Sections

[3] Thales Australia Limited and ADI Munitions Pty Ltd [2011] VCAT 729; ADI Limited [2007] VCAT 2242; ADI Limited [2004] VCAT 1963

[4] The Commission may seek leave to intervene under section 159 of the EO Act.

[5] BAE Systems Australia Limited [2012] VCAT 349; Raytheon Australia Pty Ltd, H124/2013, 16 April 2014

[6] Momcilovic v The Queen [2011] HCA 34.

[7] Momcilovic per Crennan and Keifel JJ at paragraph [565].

[8] The Tribunal is a public authority for the purposes of making decisions regarding exemptions under the EO Act - see Lifestyle Communities Pty Ltd (No 3) [2009] VCAT 1869.

[9] BAE Systems Australia Limited and Raytheon Australia Pty Ltd.