FEDERAL COURT OF AUSTRALIA

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd (No 4) [2013] FCA 930

THE COURT ORDERS THAT:

1.    A penalty in the sum of $23,100 be imposed on the First Respondent for its contravention of s 340 of the Fair Work Act 2009 (Cth) by its conduct in:

   (i)    from 8 August 2011, instigating and conducting an investigation of the Second Applicant because he exercised a workplace right; and

   (ii)    on 8 August 2011, suspending the Second Applicant from work because he exercised a workplace right.

2.    A penalty in the sum of $4,620 be imposed on the Third Respondent for being involved in the contravention of s 340 of the Fair Work Act 2009 (Cth) by his conduct in:

   (i)    from 8 August 2011, instigating and conducting an investigation of the Second Applicant because he exercised a workplace right; and

   (ii)    on 8 August 2011, suspending the Second Applicant from work because he exercised a workplace right.

3.    A penalty in the sum of $24,750 be imposed on the First Respondent for its contravention of s 340 of the Fair Work Act 2009 (Cth) by its conduct, on 18 August 2011, in issuing a final written warning to the Second Applicant because he exercised a workplace right.

4.    Pursuant to s 546(3)(b) of the Fair Work Act 2009 (Cth) the penalties be paid to the First Applicant.

5.    The final written warning issued to the Second Applicant and dated 18 August 2011 be withdrawn and be treated as null, void and of no effect.

6.    The First Respondent be restrained, be itself, or by its servants or agents, from issuing any warning or further warning to the Second Applicant in relation to the Second Applicant’s conduct on 5 August 2011.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

Introduction

1    In this proceeding the applicants, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (“AMWU”) and Jonathan Zwart alleged that the respondents, Visy Packaging Pty Ltd (“Visy”) and two of its managers Tony Scott and Robin Street had contravened s 340 of the Fair Work Act 2009 (Cth) (“the FW Act”). They alleged that the respondents did so by instigating and conducting an investigation into the conduct of Mr Zwart, suspending Mr Zwart and issuing Mr Zwart with a final written warning, by reason of his conduct in “tagging” and thereby putting out of service two of Visy’s forklifts because they had inaudible warning beepers while carrying out his role as a health and safety representative under the Occupational Health and Safety Act 2004 (Vic) (“the OHS Act”).

2    On 29 May 2013 I handed down judgment on the question of contravention (“the contravention judgment”) (Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd (No 3) [2013] FCA 525). I made declarations that Visy and Mr Street took adverse action against Mr Zwart in contravention of s 340 by:

   (a)    instigating and conducting an investigation into his conduct on 5 August 2011;

   (b)    suspending him from employment on 8 August 2011; and

   (c)    issuing him with a final written warning on 18 August 2011;

because he had exercised a workplace right. I dismissed the application against Mr Scott.

3    It now falls to me to determine what, if any, penalty is to be imposed in respect of the proven contraventions. While the parties have not agreed on the penalties to be imposed they have reached agreement on the relevant legal principles, the number of applicable contraventions and also on the appropriate range for the quantum of the penalties.

The contravention judgment

4    In the contravention judgment I accepted Mr Zwart’s evidence that:

   (a)    he was surprised by a reversing forklift driven by another employee because he did not see it or hear its reversing warning beeper in the noisy factory;

   (b)    as a result of this incident he became concerned about the safety of the reversing warning beeper on that forklift and lodged a hazard report;

   (c)    shortly thereafter he became concerned that merely lodging a hazard report was not enough and that he might be liable if he did not take further steps to deal with the risk posed by the inaudible warning beepers;

   (d)    he considered the deficient beepers to be an immediate risk to occupational health and safety;

   (e)    he tagged the forklifts as “not to be used” because he considered that the deficient beepers were unsafe; and

   (f)    during subsequent meetings with Mr Street, Mr Scott and other managers he opposed the temporary measures proposed to deal with the issue, because he considered them unsafe.

5    I concluded (at [167]-[168]) that in expressing his view at the meetings about the safety of the temporary measures proposed, Mr Zwart was carrying out the responsibilities of a health and safety representative under the OHS Act. He held a different view to the managers as to the safety of the temporary measures proposed, but as I said at [168]:

The right to advocate such a different view is an important workplace right and the dialogue it promotes serves an important occupational health and safety function. In my opinion, actions taken by a health and safety representative in asserting a particular position on a health and safety issue should not lightly be treated as constituting uncooperative or obstructive behaviour.

6    There can be no doubt that the rights and obligations imposed on health and safety representatives and employees through the OHS Act are serious. The right of a health and safety representative to advocate a different view to that of the employer serves an important role in maintaining, so far as practicable, a safe workplace.

7    I did not accept Mr Street and Mr Scott’s evidence that they had no concerns about Mr Zwart’s tagging the forklifts. I considered that they in fact held serious concerns about his actions in doing so but sought to disguise that concern before me (at [193]). I did not accept the evidence of Rohan Wiltshire that his decision to issue Mr Zwart with a final written warning was based only on the report prepared by Gregory Halse, or that no part of his reasons for issuing the final written warning included Mr Zwart’s actions in tagging the forklifts and or asserting his views in subsequent meetings (at [218]).

8    I found that:

   (a)    Mr Zwart's rights or duties under the OHS Act were “workplace rights” within s 340 of the FW Act;

   (b)    Mr Zwart was exercising a workplace right when he tagged the forklifts because of his concern about the risk they posed to occupational health and safety and when, in the ensuing meetings with management, he resisted proposals to return the forklifts to service without fixing the deficient beepers;

   (c)    Visy and Mr Street failed to discharge their onus of establishing that Mr Zwart's exercise of workplace rights was not a substantial and operative factor in their decision to instigate the investigation of Mr Zwart, suspend him from work and issue him a final written warning.

the STATUTORY framework and relevant principles

9    The applicable law and the relevant principles relating to penalties under the FW Act are common ground between the parties.

Statutory framework

10    Section 546 of the FW Act provides that the Court may order a person to pay a pecuniary penalty if the Court is satisfied that the person has contravened a civil remedy provision. By operation of s 539, s 340 of the FW Act is a civil remedy provision.

11    Section 546(3) of the FW Act provides that the Court may order that the pecuniary penalty, or part of the penalty, be paid to a particular person or organisation.

12    Section 545 of the FW Act provides that the Court may make any other order the Court considers appropriate if it is satisfied that a person has contravened a civil remedy provision.

The maximum penalty

13    Section 4AA of the Crimes Act 1914 (Cth), at the relevant time, attributed a value to a penalty unit of $110. That amount has since been increased to $170 by Schedule 3, Part 2, item 7 of the Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012 (Vic). However, by operation of item 9 the increase only applies in relation to an offence committed after the commencement of item 7, being 28 December 2012. The contraventions in this matter took place in August 2011.

14    The maximum penalty payable for a contravention of s 340 by a body corporate was, at the relevant time, 300 penalty units. Visy is and was at all material times a body corporate. The maximum penalty for Visy is therefore $33,000 for each contravention.

15    The maximum penalty payable for a contravention of s 340 by an individual was, at the relevant time, 60 penalty units. The maximum penalty for Mr Street is therefore $6,600 for each contravention.

General principles

16    The purposes to be served by the imposition of penalties are threefold:

   1.    Punishment - which must be proportionate to the offence in accordance with prevailing standards;

   2.    Deterrence - both specific and general; and

   3.    Rehabilitation.

   See: Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 (“Ponzio”) at [93] per Lander J; Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union [2011] FCA 810 at [26] per Gilmour J.

17    Courts exercising industrial jurisdiction have identified a range of factors for assessing the appropriate penalty which, while not mandatory considerations, may be relevant to the circumstances of a particular case. These include:

   (a)    the nature and extent of the conduct;

   (b)    the circumstances in which the conduct took place;

   (c)    the period of the conduct;

   (d)    the nature and extent of any loss or damage sustained as a result of the conduct;

   (e)    whether there has been similar previous conduct by the respondents;

   (f)    whether the contraventions arose out of one course of conduct;

   (g)    whether senior management was involved in the conduct;

   (h)    whether any contrition has been exhibited;

   (i)    whether any corrective action has been taken;

   (j)    the cooperation of the respondents; and

   (k)    the need for deterrence.

   See: Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) (1999) 94 IR 231 at [8] per Branson J; Construction, Forestry, Mining and Energy Union v Hamberger (2003) 127 FCR 309 at [51] per Spender, Drummond and Marshall JJ; Commonwealth Bank of Australia v Finance Sector Union of Australia (2007) 157 FCR 329 at [181] per Branson J; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 (“Australian Ophthalmic Supplies”) at [89] per Buchanan J; Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61 at [40] per Tracey J; Fair Work Ombudsman v W.K.O Pty Ltd [2012] FCA 1129 at [50] and [93] per Barker J.

18    However, the Court’s task in assessing penalty is one of “instinctive synthesis”: Australian Ophthalmic Supplies at [27] per Gray J and [55] per Graham J. This process requires the Court to take all relevant factors into account to arrive at a single result which takes due account of them all: Wong v The Queen (2001) 207 CLR 584 at [74]-[76] per Gaudron, Gummow and Hayne JJ; Markarian v The Queen (2005) 228 CLR 357 at [37] per Gleeson CJ, Gummow, Hayne and Callinan JJ. Care should be taken with the use of a checklist setting out the range of relevant factors as they give rise to a risk of transforming the process of instinctive synthesis into the application of a rigid catalogue of matters for attention: Australian Ophthalmic Supplies at [89]-[91] per Buchanan J.

19    Proportionality and consistency commonly operate as a final check on the penalty assessed, but the penalty should not be derived from comparing the case which is the subject of the assessment with any other particular case: Australian Ophthalmic Supplies at [54], [56]-[57] per Graham J and at [87] per Buchanan J.

20    The totality of the penalties imposed must also be appropriate. The totality principle requires that the total penalty for all related contraventions ought not exceed what is proper for all contravening conduct involved: Trade Practices Commission v TNT Australia Pty Limited (1995) ATPR 41-375 at [20] per Burchett J. The rationale of the principle is to ensure that the proposed penalty is proportionate when the contraventions are viewed collectively.

The approach to an agreed penalty

21    While the parties have not agreed on the exact penalties to be imposed, they have agreed as follows:

   (a)    The instigation and conducting of the investigation into Mr Zwart’s conduct, and his suspension from employment, should be treated as arising from the same course of conduct and be considered as a single breach;

   (b)    The appropriate penalty for Visy and Mr Street for instigating and conducting the investigation and for suspending Mr Zwart from employment is between 60% and 80% of the maximum penalty;

   (c)    The appropriate penalty for Visy for issuing the final written warning to Mr Zwart on 18 August 2011 is between 70% and 90% of the maximum penalty;

   (d)    The range of penalties specified are appropriate in all the circumstances, including when considering the totality principle;

   (e)    The penalties be paid to the AMWU pursuant to s 546(3) of the FW Act;

   (f)    There be an order treating as null and void and of no effect the final written warning issued to Mr Zwart on 18 August 2011; and

   (g)    There be an order that Visy and Mr Street be restrained from issuing any warning or further warning to Mr Zwart in relation to his conduct on 5 August 2011.

22    The proper approach of the Court in respect of an agreed submission as to the quantum of penalty is set out in Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at [51] per Branson, Sackville and Gyles JJ, where the Court explained:

…

(iii)    There is a public interest in promoting settlement of litigation…

…

(vi)    Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court’s view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range.

See also: Australian Securities & Investments Commission v Vizard (2005) 145 FCR 57 at [45] per Finkelstein J.

23    I respectfully agree with the observations of Jessup J in Wells v Locarno Management Pty Ltd [2008] FCA 1034 at [23]. As his Honour explained:

The predictability involved in the resolution of penal proceedings in accordance with a pre-trial agreement reached by the parties is something which should, as a matter of public policy, be regarded as beneficial.

24    The question is whether the agreed range of penalties is within the “permissible range”, that is whether such a penalty is neither manifestly inadequate or manifestly excessive: See Ponzio at [129] per Jessup J.

Consideration

The number of contraventions

25    The parties propose that the instigation and conducting of the investigation and the suspension be treated as one course of conduct, and the imposition of a final written warning as another. In my view this is appropriate. There is a close legal and factual interrelationship between the respondents’ conduct in instigating and conducting the investigation of Mr Zwart and their conduct in suspending Mr Zwart while the investigation was on foot. Both involved the same decision maker, were closely related in time, and the suspension followed from the investigation. If these two contraventions are treated as separate there was a real risk that Visy and Mr Street will be punished twice for a contravention that was in fact one course of conduct: see Construction, Forestry, Mining and Energy Union v Cahill (2010) 194 IR 461 at [39]-[45] per Middleton and Gordon JJ.

26    The other contravention - the imposition of a final written warning - involved a different decision maker, a decision made two weeks later, and a decision making process which took different considerations into account. It is properly seen as a separate contravention.

The relevant factors in assessing penalty

27    I now turn to the relevant factors in assessing the quantum of the penalty to be imposed. While I will deal with each factor in turn I note that my task is to synthesise these factors in assessing penalty.

The nature and circumstances of the conduct

28    The applicants point to the Worksafe Victoria publication entitled “A Handbook for Workplaces - Forklift Safety reducing the risk” which describes forklifts as “one of the most dangerous pieces of equipment found at Victorian workplaces”. I have no difficulty in accepting that forklifts operating near pedestrian traffic, as is often required in an industrial setting, is inherently dangerous. In my view Visy should have understood this and been guided by that knowledge.

29    The applicants rely on my finding that, in taking the stance that he did, Mr Zwart was motivated by a genuine concern about the safety of the forklifts and the measures proposed to address those concerns. They argue that the respondents took adverse action against Mr Zwart for doing no more than trying to ensure a safe workplace for himself and his fellow workers.

30    On the applicants’ submission, the conduct of Visy, Mr Wiltshire and Mr Street was inconsistent with Visy's safety campaign “Tuff on Safety” and make that campaign hollow. They argue that the contraventions are therefore to be seen in the range of the most serious contraventions of s 340. The applicants propose a penalty set at 80% of the maximum for the investigation and suspension contravention and 90% for the final written warning contravention.

31    For their part, the respondents accept that they are liable for serious contraventions of s 340 of the FW Act. For the investigation and suspension contravention they propose that the penalty be set at 60% of the maximum, and 70% for the final written warning contravention.

32    A conclusion that Visy did not treat occupational health and safety seriously or that its safety campaign was hollow would be a serious matter for a company. It would require cogent evidence before it could be made. However, the applicants did not run the contravention hearing on that basis and I was not invited to reach that conclusion. I am not prepared to draw the inference that Visy does not take occupational health and safety seriously on the evidence that was before me in the previous hearing, and I have been offered no further evidence in the penalty phase.

33    In considering the general circumstances I note that a straight-forward health and safety issue was blown out of proportion by the parties. Mr Zwart, although not uncooperative or obstructive, could have taken a more conciliatory approach to it. It is impossible for me to know whether such an approach would have made any difference, but I do not see his approach as ideal. By this I do not mean to detract from the seriousness of the contraventions or to suggest that the respondents are not responsible for them. They are, and it is unnecessary to again set out my criticisms of their conduct.

34    In my view the nature and circumstances of the conduct indicate a significant penalty is appropriate. The range of penalties that the parties propose reflect the seriousness of the contraventions.

The loss and damage suffered

35    The applicants argue that the conduct of Visy and Mr Street has had serious consequences for Mr Zwart because:

   (a)    he was prevented from performing his work for a period;

   (b)    he was wrongly exposed to a disciplinary process and the distress and anxiety that accompanied it; and

   (c)    the issuing of the final written warning had the effect of making his continuing employment less secure.

36    However, while Mr Zwart was prevented from performing his work for a two week period from 9 August to 23 August 2011, he was on full pay throughout this time. I see it as likely that he suffered stress in the period including concern as to the security of his future employment, but there is no evidence as to any stress, distress or anxiety that he suffered. This gap in the evidence was raised in the contravention judgment and if the applicants wanted to pursue a higher penalty based on the effect of the contraventions on Mr Zwart they were obligated to put on some evidence.

37    In the contravention judgment I accepted that the final written warning had the effect of making Mr Zwart’s continuing employment less secure. But in assessing penalty it is important to recall that Visy was restrained from taking any action based on that warning from 31 August 2011 when an injunction against acting on the letter was granted: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd (No 2) [2011] FCA 953.

38    I do not see the loss and damage suffered by Mr Zwart as indicating a penalty in the range proposed. The applicants conceded as much in argument. However, there is more force to the applicants’ contention that other employees of Visy suffered loss and damage by the contravening conduct. The applicants argue that other employees were denied the benefit of Mr Zwart’s role as a health and safety representative for a period and they may be, and have been, discouraged from exercising their rights to raise their health and safety concerns.

39    The applicants also point out that the contraventions arose after Visy had been prosecuted by WorkSafe Victoria and convicted in September 2010, over a serious forklift accident at its Wodonga factory in December 2008. They do not argue that this is similar previous conduct by the respondents, but instead submit that in such circumstances it is even more important that employees feel free to raise occupational health and safety issues.

40    I accept that there is a risk that the contravening conduct may give rise to a concern amongst other employees that, like Mr Zwart, they may be disciplined if they exercise their right to raise health and safety concerns and that this may discourage them from doing so. It is important that other employees are not so discouraged. They have a legal obligation under s 26 of the OHS act to take reasonable care for their own safety and the safety of other employees and they must not be discouraged from raising their legitimate concerns. There is a real risk that if they are so discouraged it will lead to a reduction in workplace safety.

41    However, since the contravention judgment some steps have been taken which should reduce any such discouragement. First, counsel for the applicants informed me that the AMWU advised its members of the contravention judgment in a regular email to members as well as at meetings at the Coburg factory. It earlier advised its members of the interlocutory injunction restraining Visy from acting on the final written warning. While I do not know how many of the employees at the factory received this information or what they made of it, it is likely that these communications had some effect.

42    Secondly, Ian Harmer, Visy's General Manager for Health, Safety and Environment as well as Employee Relations made affidavits dated 22 August 2013 and 10 September 2013 which set out a regime of communication with Visy's employees which will also likely reduce discouragement. He deposes that a program of compliance training is being developed that will address the role of the health and safety representative and their rights, duties and obligations. I was provided with no detail as to the content of the proposed program or any detail as to who will receive it and I give it little weight.

43    However, Mr Harmer also deposes that through “toolbox meetings”, or other appropriate forums, all employees will be advised that they are entitled, and are encouraged to raise a genuine health and safety concern at any time, and that all of their rights, duties and obligations will be respected if they do so. The employees are to be informed that they will not suffer any adverse action as a result of raising a genuine health and safety concern. They will also be informed that, although it is the employee’s right to raise a genuine health and safety concern, Visy has the right to manage the concern consistent with its legal obligations. He deposes that the first of these advices to employees took place at Visy’s Coburg factory during a General Manager’s Update on 11 and 12 September 2013.

44    The applicants argue that this undertaking to advise employees was partly given to address matters they raised in their penalty submissions. They submit that little weight should be given to Mr Harmer’s recent efforts, and note that the undertaking was not offered until almost four months after the contravention judgment and more than two years after the contravention. There is force to this contention and I do not consider that the respondents readily offered to take these steps. However, the fact remains that they now propose to take these steps, which should reduce the discouragement of employees to which the applicants point.

45    Mr Harmer’s evidence also partly addresses the contention that employees have been discouraged to date from raising health and safety concerns. He deposes that in the period since August 2011, there have been 111 hazard reports at the Coburg factory. These hazard reports include 16 reports by Mr Zwart himself, 85 reports by enterprise agreement covered employees (which I presume to be largely AMWU members) and 17 reports by management. The applicants argue, and I accept, that this does not inform me about whether there has been any significant reduction in hazard reports from prior periods, or as to the preparedness of employees who raise a hazard report to maintain their position in the face of opposition from management. Even so, the evidence remains of some value.

46    I see the evidence as indicating some loss or damage having been suffered, but at a lower level than contended by the applicants.

Whether senior management was involved in the conduct

47    It is unarguable that senior management were involved in the conduct. Mr Street is Visy's Operations Manager and Mr Wiltshire is the General Manager of Visy's Food Can Division.

48    At [193] of the contravention judgment I found in relation to Mr Street and Mr Scott:

I am satisfied on the evidence that they actually held serious concerns about his tagging the forklifts, but sought to disguise that concern.

In reliance on this finding the applicants point to the observations of Merkel J in Finance Sector Union v Commonwealth Bank of Australia (2005) 224 ALR 467 (“FSU v CBA”) at [27], where his Honour said that the bank “acting through senior executive officers, carefully devised and implemented what I described…as an industrial regulation avoidance scheme that possesses an ingenuity that is reminiscent of the tax avoidance schemes of the 1970s.” The applicants seek to draw a parallel between the circumstances in that case and the present case, arguing that Visy and Mr Street had carefully implemented a plan to disguise the real reason for taking the adverse action that they did.

49    I do not accept this submission. My finding at [193] related to the tagging of the forklifts and my view that Mr Street and Mr Scott sought to disguise that concern from the Court in their evidence. That is, having taken the action which they did in August 2011 they gave evidence before me that their actions had nothing whatsoever to do with Mr Zwart’s tagging the forklifts. They were wrong in endeavouring to disguise their concerns about Mr Zwart’s actions and Visy ought not countenance such an approach, but there is insufficient evidence for a finding that there was any pre-existing plan to “get” Mr Zwart, or that Visy’s witnesses coordinated their evidence. The absence of evidence to support the claimed similarity to FSU v CBA is even clearer in relation to Mr Wiltshire’s conduct in imposing the final written warning.

The size of the contravener

50    It is indisputable that Visy is a large company. Its consolidated revenue for the financial year ending 30 June 2012 was in excess of $330.8 million and its consolidated gross assets exceed $1 billion. There can be no question that it has the capacity to pay a penalty in the ranges proposed.

Contrition

51    The authorities indicate that any lack of contrition or remorse, and the absence of an apology, is not an aggravating circumstance such as might increase the penalty, although it can operate to reduce a penalty: BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining and Energy Union [2001] FCA 336 per Kiefel J; Cahill v Construction, Forestry, Mining and Energy Union (No 4) (2009) 189 IR 304 at [87] per Kenny J (“Cahill v CFMEU”).

52    The applicants argue that the respondents have not expressed any contrition for their actions, and continue to maintain their disguise that Mr Zwart’s tagging of the forklifts was not any part of the reason for their conduct. They argue that this is a factor that weighs heavily against the respondents.

53    Against this Visy and Mr Street submit that they “have accepted responsibility for their actions and have accepted the degree of seriousness relating to these matters.” Mr Harmer deposes to the proposed compliance training and to the further advice to be provided as to the employees’ right to raise genuine health and safety concerns. In my view these matters tend to mitigate the penalty because they are corrective and tend to reduce future loss and damage, but they are not evidence of contrition.

Corrective action

54    The absence of corrective action is not an aggravating circumstance that would justify a higher penalty, although its presence can mitigate: Cahill v CFMEU at [88].

55    The applicants submit that in maintaining their disguise the respondents have not taken any corrective action to ensure that the contravening conduct does not reoccur. They argue that the corrective action open to the respondents includes:

   (a)    counselling the senior managers involved to ensure such conduct does not reoccur; and

   (b)    communicating with Visy’s employees to assure them that no adverse action will be taken against employees who are exercising a workplace right, including by raising safety concerns at the workplace.

They point to the absence of any public admonition of the senior managers for their conduct, and argue that the failure to take corrective action weighs heavily against the respondents.

56    The respondents submit that Mr Harmer has deposed to the advice that will be provided to assure other employees that they will not be disadvantaged if they raise genuine health and safety concerns, as well as to the compliance training to be provided.

57    For the reasons I have already set out I see these as corrective steps by Visy which tend to mitigate the penalty. It is not to the point that Visy may have taken these steps partly because of the applicants’ contentions in this hearing.

Cooperation

58    The history of this proceeding indicates a poor level of cooperation between the parties. However, the respondents were entitled to run their defence as they saw fit and the conduct of the trial should not be taken into account in fixing a penalty: Rural Press Ltd v Australian Competition and Consumer Commission (2002) 118 FCR 236 at [165]-[166] per Whitlam, Sackville and Gyles JJ.

59    Unlike applications for a pecuniary penalty brought by regulators such as ASIC or ACCC, it is hard to see where the occasion for cooperation arises. In proceedings brought by the regulators the occasion for cooperation usually arises during any preceding investigation, but in the present case once the respondents had committed the contraventions I can see no obvious occasion for cooperation.

60    The respondents say that they initiated and genuinely consulted with the applicants in respect of the penalty, and the applicants did not argue against this submission. However, this is just another part of the conduct of the trial and the authorities indicate that such a matter is not to be taken into account in fixing the penalty.

61    I give this factor little weight in my consideration.

General deterrence

62    It is well established that the penalty should deter others to encourage compliance with similar obligations. It must reflect the objective seriousness of the contravention and act as a deterrent to others who might be likely to engage in similar contraventions: Ponzio at [93] per Lander J.

63    As I found at [129] of the contravention judgment, the obligations imposed by s 25 of the OHS Act must be treated seriously. An elected health and safety representative takes on an important function under that Act, and it is a role which may bring him or her into conflict with an employer. Adverse action against a health and safety representative exercising his or her powers under the OHS Act must be treated as a serious matter.

64    In my view the most important single factor in the present case is to fix a penalty which (while not oppressive) sends a message that deters others from the type of conduct seen in this case. I see this as indicating a penalty at the upper end of the scale.

Specific deterrence

65    Specific deterrence is also an important factor in setting the penalty. It must be sufficient to deter Visy, Mr Street and Visy’s other managers from similar unlawful conduct in the future.

66    The respondents submit that they accept responsibility for their actions and accept the degree of seriousness relating to these matters. This is a relevant consideration in deciding whether a higher penalty is necessary to achieve specific deterrence.

67    I note too that Parliament has set the maximum penalty for a breach of s 340 at a level which is unlikely to provide much of a deterrent to a company the size of Visy. Visy had consolidated revenue of $330.8 million in the 2012 financial year and the maximum penalty that can be imposed directly against Visy is $66,000, plus a further $6600 if the maximum penalty is imposed on Mr Street, and Visy pays it. Having said this, I must do the best that I can with the object of specific deterrence, working within the principle that the maximum penalty should be reserved for the worst case.

68    The contraventions are serious, and Visy must be deterred from again infringing the workplace right enjoyed by health and safety representatives and employees to raise their legitimate occupational health and safety concerns. I see the requirement for specific deterrence as indicating a penalty in the upper end of the scale.

Similar previous conduct

69    It is common ground that neither Visy nor Mr Street have any other conviction for contravening s 340 of the FW Act.

70    Visy was convicted on 9 September 2010 of failing to ensure so far as is reasonably practicable that its Wodonga factory was safe and without risks to health. This conviction followed a forklift accident on 8 December 2008 at its Wodonga factory which led to a serious injury to a contractor working there. I was taken to the applicable principles in relation to similar previous conduct, as set out by Barker J in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) (2010) 199 IR 373 at [47]. It is unnecessary to apply those principles in the present case because the applicants do not rely on the earlier conviction as similar previous conduct.

The penalty fixed

71    I am satisfied that the agreed range of penalties is neither manifestly excessive or inadequate. Within the ambit of the competing submissions I must determine the penalty by instinctively synthesizing all of the relevant factors. I have reached the view that a penalty of 70% of the maximum is appropriate for the investigation and suspension contraventions, and 75% of the maximum for the final written warning contravention. This reflects my view that the contraventions are serious, but also takes account of the mitigating factors I have addressed above.

72    Although I have synthesized all the relevant factors, I have given the most weight to the need for general and specific deterrence. I see these as the most important considerations in the present case because the OHS Act (and equivalent legislation in other States and Territories) provides an effective regime for dealing with occupational health and safety issues arising in workplaces. The OHS Act requires that such issues be first dealt with between the employer and the employees as they are usually best placed to do so. It charges both with a duty to take reasonable care in relation to workplace safety. In my view, disciplinary action which infringes an employee’s right to raise legitimate workplace safety concerns has the tendency to discourage others from doing so, which may inhibit the operation of the OHS Act and reduce workplace safety.

Payment of the penalty to the Union

73    The parties have agreed that the penalty imposed should be paid to the AMWU. This is appropriate in the circumstance that the union brought the proceeding in order to protect the position of Mr Zwart and its members. The authorities indicate that such a payment is generally to be made: FSU v CBA at [63] and following and the cases there referred to; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (No 2) [2010] FCA 652 at [81] and following per Logan J.

The proposed orders treating the final written warning as null and void and restraining Visy from issuing any further warning

74    The parties have agreed that the final written warning issued to Mr Zwart be withdrawn and be treated as null, void and of no effect. They also consent to an order that Visy be restrained from issuing any warning or further warning to Mr Zwart in relation to his conduct on 5 August 2011.

75    I see no reason to interfere with the parties’ proposal in this regard. There can be no question that s 545(1) of the FW Act allows the making of such an order, and I will do so.

Associate:

Dated:    13 September 2013