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

JURISDICTION : STATE ADMINISTRATIVE TRIBUNAL

STREAM: HUMAN RIGHTS

ACT: EQUAL OPPORTUNITY ACT 1984 (WA)

CITATION: THALES AUSTRALIA LIMITED and COMMISSIONER FOR EQUAL OPPORTUNITY [2012] WASAT 222

MEMBER: JUDGE D R PARRY (DEPUTY PRESIDENT)

HEARD: DETERMINED ON THE DOCUMENTS

DELIVERED : 14 NOVEMBER 2012

FILE NO/S: EOA 33 of 2012

BETWEEN: THALES AUSTRALIA LIMITED
ADI MUNITIONS PTY LIMITED
Applicants
AND
COMMISSIONER FOR EQUAL OPPORTUNITY
First Respondent
TRADES AND LABOUR COUNCIL OF WESTERN AUSTRALIA
Second Respondent
WESTERN AUSTRALIANS FOR RACIAL EQUALITY
Third Respondent
ETHNIC COMMUNITIES COUNCIL OF WESTERN AUSTRALIA (INC)
Fourth Respondent
AUSTRALIAN GOVERNMENT SOLICITOR
Intervener

Catchwords:

Anti-discrimination Exemption application Discrimination in work Race Nationality Defence contractor requires authority to discriminate on basis of nationality in order to have access to defence articles, technical data and defence services owned by the United States Government

Legislation:

Equal Opportunity Act 1984 (WA), s 4(1), s 37, s 39, s 135, s 136, Part III

Result:

Exemption granted subject to conditions

Summary of Tribunal's decision:

The applicants sought a further exemption from the operation of two sections of the Equal Opportunity Act 1984 (WA) for a period of five years in order to enable them to lawfully discriminate against job applicants, employees and contract workers on the ground of race (specifically, nationality) so that they can have access to defence articles, technical data and defence services owned by the Government of the United States of America in conformity with United States' law. The Tribunal had previously granted a five year exemption from the operation of the same sections. The Tribunal determined that the further exemption should be granted, subject to conditions, because there is a rational basis for the discriminatory conduct and the public interest considerations in favour of permitting the discriminatory conduct, in terms of national defence, employment in Western Australia and the broader economy of this State, outweigh the detriment which flows from the discriminatory conduct. The Tribunal also observed that it is in the public interest that, where there is no material change in circumstances, a decision in relation to a further exemption should be made consistently with the earlier decision to grant an exemption. A further consideration in favour of the application was that the conditions imposed by the Tribunal in granting the exemption had been complied with.

Category: B

Representation:

Counsel:

Applicants:     M K Eastman
First Respondent           :     Mr J Rosales-Castaneda
Second Respondent       :     N/A
Third Respondent         :     N/A
Fourth Respondent        :     N/A
Intervener:     N/A

Solicitors:

Applicants:     Thales Australia Limited
First Respondent           :     Equal Opportunity Commission
Second Respondent       :     N/A
Third Respondent         :     N/A
Fourth Respondent        :     N/A
Intervener:     N/A

Case(s) referred to in decision(s):

ADI Limited & Ors and Commissioner for Equal Opportunity & Ors [2005] WASAT 259
Commissioner for Equal Opportunity v ADI Limited [2007] WASCA 261
Hanson Construction Materials Pty Ltd and Town of Vincent [2008] WASAT 71
Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634
Swanhill Enterprises Pty Ltd and City of Perth [2011] WASAT 65

REASONS FOR DECISION OF THE TRIBUNAL:

Introduction

On 28 September 2005, the State Administrative Tribunal granted an exemption to ADI Limited, ADI Munitions Pty Limited and three other related companies from the operation of two sections of the Equal Opportunity Act 1984 (WA) (EO Act) enabling the companies to discriminate against job applicants, employees and contract workers on the ground of race, particularly nationality, subject to conditions, for a period of five years – see ADI Limited & Ors and Commissioner for Equal Opportunity & Ors [2005] WASAT 259 (earlier SAT decision). The Tribunal found that the public interest considerations in favour of allowing discrimination outweighed the public interest considerations against allowing discrimination in the circumstances of the case, because the companies were major defence, engineering and systems contractors, providing defence projects and services to the Australian Defence Force (ADF) and the Royal Australian Navy (RAN), and required the authority to discriminate on the ground of nationality in order to have access to defence articles, technical data and defence services owned by the Government of the United States of America in conformity with United States' law. An appeal from the Tribunal's decision to the Court of Appeal was dismissed – see Commissioner for Equal Opportunity v ADI Limited [2007] WASCA 261 (appeal decision).
Thales Australia Limited (formerly ADI Limited) and ADI Munitions Pty Limited (collectively, Thales) have applied to the Tribunal for a further exemption from the operation of the same sections of the EO Act, insofar as those sections relate to the nationality of job applicants, employees and contract workers, for a period of five years. The Commissioner for Equal Opportunity did not oppose the granting of the exemption application, provided that the Tribunal imposes a condition requiring Thales to report to the Commissioner every six months on matters relating to the exemption. Thales consented to the condition proposed by the Commissioner.
The Trades and Labour Council of Western Australia, Western Australians for Racial Equality and the Ethnic Communities Council of Western Australia (Inc) were each named as respondents in the application, apparently because they were parties in the earlier SAT proceeding and the appeal. However, none of these parties participated in this proceeding. The Australian Government Solicitor intervened in this proceeding, but did not make any submissions.

Legal framework

Part III of the EO Act concerns discrimination on the ground of race. The term 'race' is defined in s 4(1) of the EO Act to include 'nationality'. The two sections of the EO Act from which the further exemption is sought by Thales are s 37 (which concerns discrimination against applicants for employment and employees on the ground of race) and s 39 (which concerns discrimination against contract workers on the ground of race).
Section 37 and s 39 of the EO Act are in the following terms:
37. Discrimination against applicants and employees
(1)It is unlawful for an employer to discriminate against a person on the ground of the race of that person
(a)in the arrangements made for the purpose of determining who should be offered employment; or
(b)in determining who should be offered employment; or
(c)in the terms or conditions on which employment is offered.
(2)It is unlawful for an employer to discriminate against an employee on the ground of the race of the employee
(a)in the terms or conditions of employment that the employer affords the employee; or
(b)by denying the employee access, or limiting the employee's access, to opportunities for promotion, transfer or training, or to any other benefits associated with employment; or
(c)by dismissing the employee; or
(d)by subjecting the employee to any other detriment.
(3)Nothing in subsection (1) renders it unlawful for an employer to discriminate against a person, on the ground of the race of the person, in connection with employment to perform domestic duties within a private household in which the employer resides.
39. Discrimination against contract workers
It is unlawful for a principal to discriminate against a contract worker on the ground of the contract worker's race
(a)in the terms or conditions on which the principal allows the contract worker to work; or
(b)by not allowing the contract worker access, or limiting the contract worker's access, to any benefit associated with the work in respect of which the contract with the employer is made; or
(c)by denying the contract worker access, or limiting the contract worker's access, to any benefit associated with the work in respect of which the contract with the employer is made; or
(d)by subjecting the contract worker to any other detriment.
As Martin CJ, with whom Wheeler and Pullin JJA agreed, observed in the appeal decision at [59]:
[T]he [EO] Act provides both specific and general exceptions to its prohibitions. 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.
In particular, s 135(1) of the EO Act empowers the Tribunal to grant a person an exemption from the operation of a specified provision of identified Parts of the EO Act, including Part III. Section 37 and s 39 of the EO Act are contained in Part III of the Act. Section 135(2) of the EO Act empowers the Tribunal to grant a person to whom an exemption has been granted under s 135(1) a further exemption from the operation of the relevant provision. Section 135(6) of the EO Act provides that an exemption or further exemption may be granted subject to conditions and shall only be granted for a specified period not exceeding five years. Section 136 of the EO Act requires the Tribunal to publish its decision on an application for an exemption or further exemption, the reasons for its decision, its findings of fact material to the decision, and a summary of the evidence on which those findings were based, although a failure to comply with this requirement does not affect the validity of the decision.
In the appeal decision, Martin CJ, with whom Wheeler and Pullin JJA agreed, said the following at [72] in relation to the exercise of discretion by the Tribunal as to whether to grant an exemption or further exemption from the operation of a specified provision of the EO Act:
[I]n my opinion when exercising the discretion conferred upon it by s 135 of the [EO] Act, it is consistent with the objects, scope and purpose of the Act, for the Tribunal to take into account any considerations which it considers would justify the commission of conduct which would otherwise be unlawful under the Act. So, provided 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. Often the interests properly considered by the Tribunal in that context will be public interests, but they need not be so. …

Should the further exemption be granted?

In my opinion, the further exemption from the operation of s 37 and s 39 of the EO Act should be granted, subject to the conditions imposed in the earlier SAT decision and a further condition requiring reporting by Thales to the Commissioner every six months agreed to by those parties, because there is a rational basis for the discriminatory conduct and the public interest considerations in favour of permitting the discriminatory conduct outweigh the detriment which flows from the discriminatory conduct.
Thales presented detailed evidence in relation to its operations and the reasons why the further exemption is required in an affidavit of Mr Michael Jackson, Thales Australia Limited's General Counsel and Vice President Legal and Commercial. Thales is one of Australia's largest providers of systems, products and services in defence, security and civil markets. Thales have a number of contracts with the Australian Government supplying systems, products and services to the ADF and RAN, including a number of projects in Western Australia. Thales employs 3,196 people in Australia, including 156 in Western Australia.
Thales requires access to defence articles, technical data and defence services owned by the Government of the United States of America in order to provide its systems, products and services. This defence technology is amongst the most advanced available in the world, is already used to a considerable extent by the ADF and the RAN, and is also of benefit to Australian national defence because of the interoperability which it offers to Australian forces operating jointly with the United States' forces. The United States International Traffic in Arms Regulations 22 CFR § 120 (2003) (ITAR) and Export Administration Regulations (EAR) restrict the transfer of these United States' materials to persons of certain nationalities. Thales must comply with ITAR and EAR in order to obtain access to these materials.
The purpose of the further exemption from the operation of s 37 and s 39 of the EO Act sought by Thales is to permit it to lawfully obtain information concerning the nationality of job applicants, employees and contract workers, to enable it to identify persons who are not permitted to access United States' materials, and to lawfully either not employ them or direct their work so that Thales can comply with ITAR and EAR. In effect, in order to have access to defence articles, technical data and defence services owned by the United States Government, Thales requires permission to discriminate against prospective employees, existing employees and contract workers, on the ground of their nationality.
Without obtaining authorisation to discriminate on the ground of race, and in particular, nationality, under the EO Act, Thales could not comply with United States' law, with the consequence that it is unlikely that Thales could continue to supply systems, products and services to the ADF and the RAN in Western Australia. Furthermore, the defence industry is a major contributor to the tertiary education sector through cooperative research centres and other collaborative programs. If Thales were unable to maintain its workload, the evidence indicates that it may no longer be in a position to take part in such collaborations to the detriment of the Australian tertiary sector and, consequently, the country more broadly.
At [162] of the earlier SAT decision, the Tribunal articulated the following five adverse 'public interest aspects' which are likely to flow from not permitting the discriminatory conduct by Thales, with which, on the evidence now before the Tribunal, I agree:
(1)the potential loss of the production of defence equipment made in accordance with US controlled technology, from [Thales] and potentially from Western Australia and ultimately Australia;
(2)the significant prejudice to the national interest in particular with respect to defence capability if [Thales] could not comply fully with its contracts with the ADF [and the RAN];
(3)the adverse impact on employment in Western Australia if the exemption is not granted;
(4)the adverse effect or impact on the broader economy of Western Australia; and
(5)the adverse effect on tertiary sector funding if the exemption is not granted.
In the appeal decision, the Court of Appeal held at [75] that 'the Tribunal was plainly entitled to take account of those considerations, and to give them determinative weight'. In my opinion, these public interest considerations should be given determinative weight in the exercise of discretion as to whether to grant the further exemption because of their significance in terms of national defence, employment in Western Australia, and the broader economy of this State.
Furthermore, there has been no material change in circumstances since the Tribunal granted the exemption. 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. As Brennan J, President of the Administrative Appeals Tribunal, said in Re Drake and Minister for Immigration and Ethnic Affairs (No 2) (1979) 2 ALD 634 at 639, specifically in relation to decision-making in relation to deportation, but in terms which are generally applicable to all administrative decisionmaking:
Inconsistency is not merely inelegant: it brings the process of deciding into disrepute, suggesting an arbitrariness which is incompatible with commonly accepted notions of justice.
The Tribunal has also recognised that 'consistency is an important principle in administrative decisionmaking in general, and in planning assessment in particular': Swanhill Enterprises Pty Ltd and City of Perth [2011] WASAT 65 at [58]. The Tribunal has expressed the importance of consistency in decisionmaking in relation to successive planning decisions concerning the same property in Hanson Construction Materials Pty Ltd and Town of Vincent [2008] WASAT 71 at [54] in the following terms:
In circumstances where the planning framework is the same and the circumstances have not changed in any substantial way, it is in the interests of orderly and proper planning that planning decisions in relation to a site are made in a consistent way.
A similar principle applies in relation to successive decisions concerning the same exemption under the EO Act.
A further consideration in favour of granting the application is that the conditions imposed by the Tribunal in its earlier decision have been complied with.
It follows that the further exemption sought by Thales under s 135(2) of the EO Act should be granted subject to the conditions imposed in the earlier SAT decision and the further agreed condition.

Orders

1.Thales Australia Limited and ADI Munitions Pty Limited (together the Applicant Companies) are granted an exemption from s 37 and s 39 of the Equal Opportunity Act 1984 (WA) insofar as those sections relate to 'nationality' being a component of 'race' (in s 4 of the Act) of job applicants, employees and contract workers, on the conditions set out in Orders 2 to 9 below.
2.The exemption granted in Order 1 applies to conduct by the Applicant Companies only where:
(a)The conduct is necessary to enable the Applicant Company to undertake defence projects (Controlled Projects) in compliance with the laws of the United States of America, in particular the International Traffic in Arms Regulations and the Export Administration Regulations (together United States of America Export Laws); and
(b)The Applicant Company has taken all steps as are reasonably available (including steps which might be taken under the terms of agreements relating to the Controlled Projects) to avoid the necessity of engaging in the conduct.

3.Where an employee or contract worker is moved from a Controlled Project to any other work within the Applicant Company or any of its related companies, the Technology Control Officer of the relevant Applicant Company must explain to that person why he or she is being transferred.
4.Where an Applicant Company uses a system of security passes to reflect level of access to technology by employees and contract workers, the passes may be colour coded but not in such a way as to make identifiable the nationality of the person or the reason for the person's level of access.
5.All information related to security passes, security clearance levels and authorisation under the laws of the United States of America shall be restricted to the relevant Technology Control Officers, managers and Human Resources Officers of the relevant Applicant Company on a 'need to know' basis.

6.Each of the Applicant Companies' employment polices shall be amended as soon as reasonably possible so as to refer to the terms of this exemption including all conditions attached to it and to make it clear that the purpose of the request for information regarding nationality is made only for compliance with United States of America regulations.
7.The Applicant Companies shall report every six months to the Commissioner for Equal Opportunity on:
(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 United States of America Export Laws purposes, but subsequently appointed to other roles within each reporting period;
(c)the number of employees retrenched or redeployed due to United States of America 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 United States of America 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 are excluded by virtue of their nationality or citizenship.

8.This exemption is for a term of five years from 13 November 2012.
9.Thales Australia Limited shall pay the costs of publishing the notice of the exemption in the Government Gazette.

I certify that this and the preceding [20] paragraphs comprise the reasons for decision of the State Administrative Tribunal.
___________________________________
JUDGE D R PARRY, DEPUTY PRESIDENT