Of the four potential Charter cases that came out this week, just one is now available online: the VCAT decision, BAE Systems Australia Ltd (Anti-Discrimination)  VCAT 1799. As I guessed, this is an application by a defence contractor for an exemption from the Equal Opportunity Act‘s ban on nationality discrimination in employment, to fit in with the US’s discriminatory approach to security. VCAT Deputy President Cate McKenzie didn’t much like the US’s policy:
[A]lthough this comment is unlikely to influence the framing of the Australian and US security requirements, I would have thought that the use of nationality-based measures to prevent unauthorised access to information or material is a blunt and imperfect instrument. Assessment of individuals on a non-stereotyped basis, or training and education about the importance of the obligation of secrecy, would seem to me to be a better approach.
No kidding. But, just like every other decision that’s ever been made on this issue, McKenzie granted the exemption (albeit with more conditions than BAE wanted.) South Australia’s Equal Opportunity Tribunal granted BAE an exemption last year, so VCAT’s exemption saved 180 employees at BAE’s Abbotsford digs from having to move to Adelaide! Discrimination was obviously the lesser of two evils. Alas, McKenzie, in passing, engaged in some Charter analysis of unprecedented lousiness.
As I previously noted, VCAT had granted a number of similar exemptions last year, accompanied by warnings that, next time, the Charter may change things, with the Charter’s interpretation mandate becoming operational at the start of this year. In the ACT, where a brand new interpretation mandate identical to the Charter’s kicked in on 18th March this year, its equivalent to VCAT has already considered whether its approach to exemptions was compatible with human rights. (It decided that it was.) But, amazingly, McKenzie held that the Charter’s interpretation mandate, which was in place for two-and-a-half months before the ACT’s, didn’t apply to BAE’s application!
Alas, McKenzie was helped to this conclusion by VEOHRC. This is what Victoria’s defender of both equal opportunity and human rights (and typically the only opponent to applications for exemption) had to say in relation to BAE’s application:
Apart from submissions by BAE, the only other submission received was a letter from the Commission noting that the Victorian Charter of Human Rights and Responsibilities (the Charter) did not apply to this proceeding and also that, if VCAT granted the exemption subject to conditions involving reporting to the Commission, the Commission would be willing to accept this role.
Although we aren’t told, it sounds like VEOHRC is relying on the Charter’s transitional provision for proceedings:
49(2) This Charter does not affect any proceedings commenced or concluded before the commencement of Part 2.
Part 2 commenced on 1 January 2007. So, when did BAE’s proceeding commence?:
On 24 December 2007 BAE applied to VCAT for exemption under s83 of the EO Act.
Fortunately, Deputy President McKenzie has the apparently rare ability to get a simple date right:
The explanatory memorandum for the Bill which eventually became the Charter explains that s2 was intended as a staggered commencement provision, in order to allow government to review existing laws, policies and procedures for Charter compliance. Among other things, it says that s 49 provides that the Charter ‘does not apply to legal proceedings commenced before 1 January 2008’ and that the Charter ‘may not be relied on in proceedings commenced before that date’. It explains that s49(3) means that ‘the obligations upon public authorities in the Charter to do not apply to an act or decision made before 1 January 2008’. There is a difficulty with s49(2). It provides that the Charter does not apply to proceedings commenced or concluded before the commencement of Part 2. That part commenced on 1 January 2007, not 1 January 2008. But s2 directly provides that Division 3 of Part 3 (the division in which the obligation to interpret statutes in a rights-compatible way appears) commences on 1 January 2008.
In the light of the explanatory memorandum, I suspect that the reference to the commencement of Part 2 in s49(2) is an error. However, the wording is clear and I am not prepared to say that the result is so absurd that Parliament could never have intended it. After all, the bulk of the Charter commenced on 1 January 2007. If s49(2) contains an error, it is an error that will need to be corrected by Parliament. In my view, s49(2) does not apply to this proceeding, because this proceeding was commenced after the commencement of Part 2, that is after 1 January 2007
Thank god. She’s completely right about all of that. Alas, despite that second-last sentence, she still ‘corrected’ Parliament’s error with her own woeful approach to retrospectivity:
The key question in this proceeding is how the general discretion to grant or refuse exemptions given to VCAT under s83 of the EO Act should be interpreted. Section 32 of the Charter requires that a statutory provision like s83 must be interpreted, so far as is possible consistently with the purpose of s83, in a way that is compatible with human rights. That provision, according to s2 of the Charter, commenced on 1 January 2008. Section 32 makes a fundamental change in the way in which all Victorian statutory provisions are required to be interpreted. If Parliament had intended that the new interpretation were to apply to proceedings commenced before those new rules came into operation, it would have said so. It did not. It follows that s32 of the Charter at the new interpretation rules do not apply to this proceeding.
Are you freaking kidding me??? Where do I start?
First, commencement provisions aren’t transitional provisions. Commencement governs when a law exists, not what times it applies. If a commencement provision is to have any effect on the application of a law, then it does so via the common law presumption against the retrospective operation of statutes. Not only doesn’t McKenzie discuss the common law presumption (which is not irrebutable, but rather context dependant) but she fails to observe that the operation of such a presumption is surely rebutted (presumptively at least) when Parliament enacts a specific transitional provision, like (say) Charter s. 49.
Second, there isn’t actually any question of retrospectivity here. VCAT isn’t applying the law last year. It isn’t reviewing a decision made last year. Instead, McKenzie applied s. 83 of the EOA yesterday. That’s nine months after Charter s. 32 became operational. Moreover, the exemption will apply only prospectively, lasting until 1 October 2011. Indeed, it isn’t even operational yet (as McKenzie stayed it pending further quibbling from BAE.) So, why the hell is transition an issue at all?
Third, whether or not Charter s. 32 makes a ‘fundamental change’ (something that might matter to the common law presumption), it’s only a change to how provisions are interpreted (as I argued here.) The retrospective application of new interpretations is commonplace. Every time a court interprets a statute in a new way, it applies it to the parties before it. Hell, McKenzie even did so in this case, announcing her own new approach to s. 83 of the EOA, rejecting an approach announced by VCAT President Morris just last year in favour of her own approach that was less generous to BAE. And she also announced a new approach to Charter s. 32′s operation (supportive of BAE), retrospectively applying it in an action BAE commenced last year. Why is it OK to apply an interpretation McKenzie announced yesterday to BAE, but not to apply an interpretation that Parliament announced in 2006 and which commenced eight-and-a-half months ago? (See this post on why I don’t think Charter s. 32 goes beyond interpretation to a more fundamental re-writing.)
Fourth, as McKenzie had just held, Parliament enacted a provision on whether or not anything in the Charter should ‘apply to proceedings commenced before the new rules came into operation’. It’s Charter s. 49(2), which, as she’d just been discussing, barred the Charter from proceedings before 1/1/7. Why on earth would Parliament have done that if neither of the two divisions in the Charter that could have any effect on legal proceedings could apply in proceedings commenced after 1/1/7 but before 1/1/8? In effect, she’s overridden Charter s. 49(2), rewriting the relevant date as 1/1/8, even though she held that the ‘error’ was parliament’s to fix.
Fifth, not only that, but Parliament also specifically provided for the transition of one of the two divisions that could affect proceedings:
49(3) Division 4 of Part 3 does not apply to any act or decision made by a public authority before the commencement of that Division.
If Parliament expressly provided for one of the two divisions with a bar on retrospective application (albeit to conduct, not proceedings) then why on earth should its silence be regarded as evidence of its intent to bar the retrospective application of the other division? Moreover, Charter s. 49′s sole remaining provision was expressly about the application of the Charter to statutes:
49(1) This Charter extends and applies to all Acts, whether passed before or after the commencement of Part 2, and to all subordinate instruments, whether made before or after that commencement.
Although this doesn’t mention proceedings, surely it shows that Parliament had thought about the transitional arrangements for the application of the Charter to statutes? The terms of Charter s. 49(1) surely point to retrospective, rather than prospective operation.
Sixth, she completely ignores the fact that an ACT tribunal had no difficulty in applying its new interpretation mandate to a proceeding that (I assume) commenced long before the new mandate commenced. Ironically, Charter s. 32(2), which prompts Victorians to consider other courts’ decisions on human rights matters when interpreting Victorian statutes (including the Charter), is part of Division 3 of Part 3, which McKenzie held didn’t apply to this proceeding. Oy.
Eighth, she completely ignores the UK approach to the retrospective operation of the HRA’s interpretation mandate, which would only bar retrospectivity if vested interests have been affected. Here there are no vested interests, as BAE is applying for a prospective exemption. See this post for my discussion of the UK approach and also for my argument that, in the case of the Charter, an even bolder approach to retrospectivity is arguably both available and desirable.
Ninth, just in case anyone thinks that McKenzie had an eye to some actual unfairness to BAE, let’s take another look at what day BAE lodged its application:
On 24 December 2007 BAE applied to VCAT for exemption under s83 of the EO Act.
Dude! Why do you think BAE decided to lodge its application on Christmas Eve, presumably the last date of 2007 that VCAT’s front office was open? Don’t you think it’s just a little bit possible that BAE timed its application precisely so that it could avoid the effect of the full onset of the Charter, which another VCAT member had warned about a couple of months earlier? So, don’t you think it’s a bit rich for it to now complain about the rules being shifted? Jeez. Either McKenzie is gullible or she just didn’t want to be bothered with having to apply the Charter. Either way, BAE, by getting its application in a week early, gets a pre-Charter exemption that lasts for three years.
Tenth, what’s especially appalling is that this is not a contested matter. BAE is the only party, and therefore the only one who had any knowledge of the application when it was lodged. McKenzie ordered that BAE advertise in the Hun and tell its employees, but that notice would not have been received until after the Charter fully commenced. Although it’s hypothetical, surely those employees and others would have been quite justified, after reading Charter s. 49, in assuming that the Charter did apply to the matter and would safeguard their interests? Alas, the only entity to make a submission, VEOHRC, not only failed to defend their interests but contributed to McKenzie’s lousy approach. BAE’s lawyers, Blake Dawson, must have been laughing their heads off yesterday.
What’s sad about this is that there is an ongoing debate within VCAT about how to interpret the relevant section of the EOA:
83(1) The Tribunal, by notice published in the Government Gazette, may grant an exemption- (a) from any of the provisions of this Act in relation to- (i) a person or class of people; or (ii) an activity or class of activities; or (b) in the circumstances referred to in section 28; or (c) from any of the provisions of this Act in any other circumstances specified by the Tribunal.
While this provision lacks some of the interpretive hooks of the ACT’s provision, it has produced quite different rulings from VCAT members in the four cases on the defence-nationality issue that have been before it in the last twelve months. As McKenzie observed:
Until recently, the Tribunal’s approach to exemption applications has been to consider the following questions – * Is the exemption necessary? * Is the relevant conduct arguably prohibited by the EO Act? * Is there some interest sufficient to justify the exemption? Under this third question the Tribunal has looked at matters such as whether the exemption will further one of the objectives of the Act, whether the conduct is within the spirit (although not necessarily the letter) of one of the express exception provisions in the Act, or whether there is some public interest to justify exemption
In my view, a number of recent cases require this approach to be re-examined. I briefly mention them. In 2007, the then President of VCAT Justice Morris (as he then was) granted a renewal of an exemption earlier granted to Boeing and related companies, but on more stringent conditions. He rejected the argument that the discretion to grant exemptions could only be exercised to further an objective of the EO Act. His view was that, in an appropriate case, an exemption could be granted although unrelated to those objectives, if justified by some public or private interest. He also rejected the submission that a test similar to that in s7 of the Charter should apply. That test would have looked at whether the exemption imposed reasonable limits on the rights given by the EO Act. Relevant factors would have been the nature of the right (to be free from prohibited discrimination), the importance of the purpose of the exemption and its nature and extent, the relationship between that purpose and the exemption, and whether there was any less restrictive way of achieving the purpose of the exemption.
He considered that the correct question to ask was: is the exemption necessary or desirable to avoid an unreasonable outcome (that is, in the operation of the legislation)?… My approach is slightly different from that of Morris J. In my view, one must look to the nature of the freedom from prohibited discrimination which the Act gives, its objectives, and whether the interests served by the exemption are sufficient to justify taking the conduct sought to be exempted out of the prohibitions of the EO Act. It is not simply a question of whether the application of the prohibitions in the Act would produce an unreasonable result.
That’s a lot of ambiguity. McKenzie also noted that the differing interpretations meant that BAE was dealt with differently in SA and Victoria and inconsistently with its Victorian competitors:
[I]t is unfortunate that those exemptions which have been granted to BAE and its competitors are all slightly differently framed. But this no doubt has to do with the way in which each of the applications was framed and differences in submissions made in each proceeding.
And, of course, sometime in the future (maybe), there’ll possibly be an all new approach, because of the Charter. Indeed, McKenzie notes that BAE contractors aren’t covered by BAE’s exemption, so any application they bring wil be subject to the Charter. One benefit the Charter may bring is to move all of VCAT’s members and all applicants to a single new approach that is most compatible with human rights. I find it hard to see how putting that new approach off for yet another day is a fairer outcome to those involved, both employers and employees.
And if all that isn’t disaster enough, McKenzie also buggered up the conduct mandate too. I’ll leave that for another post.