FEDERAL COURT OF AUSTRALIA
Director, Fair Work Building Industry Inspectorate v Bolton (No 2) [2016] FCA 817
ORDERS
DATE OF ORDER: |
THE COURT DECLARES THAT:
1. (a) The first respondent, David Bolton, has contravened section 500 of the Fair Work Act 2009 (Cth) (the FW Act) by reason of acting in an improper manner while exercising, or seeking to exercise, rights in accordance with Part 3-4 of the FW Act on 29 April 2014.
(b) By reason of section 793 of the FW Act, the fourth respondent, the Construction, Forestry, Mining and Energy Union, is taken to have contravened section 500 of the FW Act by the conduct of the first respondent constituting the contravention in Declaration 1(a) hereof.
(c) The second respondent, Michael Huddy, has contravened section 500 of the FW Act by reason of acting in an improper manner while exercising, or seeking to exercise, rights in accordance with Part 3-4 of the FW Act on 29 April 2014.
(d) By reason of section 793 of the FW Act, the fourth respondent, the Construction, Forestry, Mining and Energy Union, is taken to have contravened section 500 of the FW Act by the conduct of the second respondent constituting the contravention in Declaration 1(c) hereof.
(e) The third respondent, Brendan Pitt, has contravened section 500 of the FW Act by reason of acting in an improper manner while exercising, or seeking to exercise, rights in accordance with Part 3-4 of the FW Act on 29 April 2014.
(f) By reason of section 793 of the FW Act, the fourth respondent, the Construction, Forestry, Mining and Energy Union, is taken to have contravened section 500 of the FW Act by the conduct of the third respondent constituting the contravention in Declaration 1(e) hereof.
THE COURT ORDERS THAT:
2. For the contravention of section 500 of the FW Act referred to in Declaration 1(a) hereof, the first respondent is ordered to pay a pecuniary penalty of $4,000.
3. For the contravention of section 500 of the FW Act referred to in Declaration 1(c) hereof, the second respondent is ordered to pay a pecuniary penalty of $2,000.
4. For the contravention of section 500 of the FW Act referred to in Declaration 1(e) hereof, the third respondent is ordered to pay a pecuniary penalty of $4,000.
5. For the contraventions of section 500 of the FW Act referred to in Declarations 1(b), (d) and (f) hereof, the fourth respondent is ordered to pay a pecuniary penalty of $50,000.
6. Pursuant to section 546(3) of the FW Act, the pecuniary penalties referred to in these Orders be paid to the Commonwealth.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ORDERS
SAD 60 of 2015 | ||
BETWEEN: | DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE Applicant | |
AND: | AARON CARTLEDGE First Respondent DAVID BOLTON Second Respondent CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION (CFMEU) SA BRANCH Third Respondent | |
JUDGE: | COLLIER j |
DATE OF ORDER: | 19 JULY 2016 |
THE COURT DECLARES THAT:
1. (a) The first respondent, Aaron Cartledge, has contravened section 500 of the Fair Work Act 2009 (Cth) (the FW Act) by reason of acting in an improper manner while exercising, or seeking to exercise, rights in accordance with Part 3-4 of the FW Act on 22 May 2014.
(b) By reason of section 793 of the FW Act, the third respondent, the Construction, Forestry, Mining and Energy Union, is taken to have contravened section 500 of the FW Act by the conduct of the first respondent constituting the contravention in Declaration 1(a) hereof.
(c) The second respondent, David Bolton, has contravened section 500 of the FW Act by reason of acting in an improper manner while exercising, or seeking to exercise, rights in accordance with Part 3-4 of the FW Act on 22 May 2014.
(d) By reason of section 793 of the FW Act, the third respondent, the Construction, Forestry, Mining and Energy Union, is taken to have contravened section 500 of the FW Act by the conduct of the second respondent constituting the contravention in Declaration 1(c) hereof.
THE COURT ORDERS THAT:
2. For the contravention of section 500 of the FW Act referred to in Declaration 1(a) hereof, the first respondent is ordered to pay a pecuniary penalty of $4,000.
3. For the contravention of section 500 of the FW Act referred to in Declaration 1(c) hereof, the second respondent is ordered to pay a pecuniary penalty of $4,000.
4. For the contraventions of section 500 of the FW Act referred to in Declarations 1(b) and (d) hereof, the third respondent is ordered to pay a pecuniary penalty of $40,000.
5. Pursuant to section 546(3) of the FW Act, the pecuniary penalties referred to in these Orders be paid to the Commonwealth.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
ORDERS
SAD 61 of 2015 | ||
BETWEEN: | DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE Applicant | |
AND: | MICHAEL MCDERMOTT First Respondent CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION (CFMEU) SA BRANCH Second Respondent | |
JUDGE: | COLLIER J |
DATE OF ORDER: | 19 JULY 2016 |
THE COURT DECLARES THAT:
1. (a) The first respondent, Michael McDermott, has contravened section 500 of the Fair Work Act 2009 (Cth) (the FW Act) by reason of acting in an improper manner while exercising, or seeking to exercise, rights in accordance with Part 3-4 of the FW Act on 4 June 2014.
(b) By reason of section 793 of the FW Act, the second respondent, the Construction, Forestry, Mining and Energy Union, is taken to have contravened section 500 of the FW Act by the conduct of the first respondent constituting the contravention in Declaration 1(a) hereof.
THE COURT ORDERS THAT:
2. For the contravention of section 500 of the FW Act referred to in Declaration 1(a) hereof, the first respondent is ordered to pay a pecuniary penalty of $4,000.
3. For the contravention of section 500 of the FW Act referred to in Declaration 1(b) hereof, the second respondent is ordered to pay a pecuniary penalty of $20,000.
4. Pursuant to section 546(3) of the FW Act, the pecuniary penalties referred to in these Orders be paid to the Commonwealth.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
COLLIER J:
1 Before the Court are three separate proceedings – SAD 59 of 2015, SAD 60 of 2015 and SAD 61 of 2015 – in which the Director of the Fair Work Building Industry Inspectorate (the Director) seeks declarations that provisions of the Fair Work Act 2009 (Cth) (the FW Act) have been breached, and pecuniary penalties. There is significant commonality in the three proceedings, in that:
in each matter, the Director alleged contraventions of the FW Act wherein individual officials of the Construction, Forestry, Mining and Energy Union (CFMEU) allegedly acted in an improper manner while exercising, or seeking to exercise, rights in accordance with Pt 3-4 of the FW Act;
in particular, in each matter the Director alleged entry by the relevant officials onto premises in South Australia, and refusal by the officials to leave when requested;
Mr David Bolton is a respondent in both SAD 59 of 2015 and SAD 60 of 2015;
the CFMEU is a respondent in all three matters;
the same lawyer represented the applicant in all three matters, and the same Counsel represented all respondents in all three matters;
a statement of agreed facts was signed in all three cases, and in those statements the respondents admitted contraventions of the FW Act but could not agree as to penalties.
2 Materially:
the respondents in SAD 59 of 2015 are Mr David Bolton, Mr Michael Huddy, Mr Brendan Pitt and the CFMEU;
the respondents in SAD 60 of 2015 are Mr Aaron Cartledge, Mr David Bolton, and the CFMEU; and
the respondents in SAD 61 of 2015 are Mr Michael McDermott and the CFMEU.
3 All three matters were heard together as to penalty. Common submissions as to the legal principles referable to penalties under the FW Act were made by both parties, with further specific submissions made in respect of each matter. The legal representatives submitted that it was appropriate that all three matters be considered together in one judgment. Accordingly, this judgment deals with all three matters.
4 It is useful to set out the background to all three matters and the facts agreed before turning to the submissions of the parties.
5 The parties filed a Statement of Agreed Facts on 5 August 2015 in which the parties agreed, in summary and materially, as follows:
At relevant times Lend Lease Building Contractors Pty Ltd (Lend Lease) was the head contractor on a construction project known as the Southern Expressway Duplication (the SED Project) which was taking place at a site at 3 Majors Road, O’Halloran Hill, South Australia (the Majors Road Site). The Site constituted “premises” for the purposes of Pt 3-4 of the FW Act.
Lend Lease was a “building industry participant” within the meaning of s 4(1) of the Fair Work (Building Industry) Act 2012 (Cth) (the FWBI Act).
The individual respondents were CFMEU officials.
Lend Lease employed employees and engaged subcontractors to perform work at the Majors Road Site (Project Workers).
On Tuesday 29 April 2014 at about 6.50 am the individual respondents attended the Majors Road Site. At the time of their attendance project work had ceased at the Majors Road Site because of rain, and workers were in crib sheds. Approximately 150-200 employees and contractors were in the crib shed area for a tool box meeting scheduled to commence at 6.55 am.
While on the Majors Road Site, and between 6.50 am and approximately 7.50 am, the individual respondents had discussions with the employees for the purposes of s 484 of the FW Act.
Between 6.50 am and 7.00 am at the end of the tool box meeting conducted by Lend Lease employee and Safety Manager Mr Gavin Wright, Mr Bolton stated to several Project Workers words to the following effect:
“Is everyone aware that Lend Lease got the improvement notice for evacuations, it says you have to have an evacuation drill”
and
“Have you had a drill”
and
“The union action that lead to the improvement notice being issued was justified and it had worked”
Until Mr Bolton spoke to the Project Workers, Lend Lease was not aware that the individual respondents were on the Majors Road Site.
Discussions were held by the individual respondents with the Project Managers during a break in work caused by rain, being an “other break” for the purposes of s 490(2) of the FW Act.
The individual respondents were given directions to leave the Majors Road Site by persons authorised to give those directions. Specifically, Lend Lease employee and Operation Manager Mr Danny Parkinson told each of the individual respondents to leave the Majors Road Site. Mr Parkinson told both Mr Bolton and Mr Huddy that they did not have a proper right of entry.
Notwithstanding Mr Parkinson’s directions, the individual respondents did not leave the site.
The police attended the Majors Road Site, and in the presence of the police Mr Parkinson asked the individual respondents to leave the Majors Road Site. The individual respondents then left.
The individual respondents were seeking to exercise rights in accordance with s 484 of the FW Act.
At the time of the entry, the individual respondents had not provided Lend Lease with an entry notice in respect of their entry to the Majors Road Site on 29 April 2014 for the purposes of s 487 of the FW Act.
The Fair Work Commission had not issued an exemption certificate for the entry.
The CFMEU is taken by the operation of s 793 of the FW Act to have engaged in the conduct of the individual respondents.
By reason of these matters, the individual respondents, as permit holders exercising or seeking to exercise rights in accordance with s 484 of the FW Act, acted in an improper manner in contravention of s 500 of the FW Act.
The CFMEU contravened s 500 of the FW Act.
6 The parties filed a Statement of Agreed Facts on 5 August 2015 in which the parties agreed, in summary and materially, as follows:
At relevant times Lend Lease was the head contractor on a construction project known as the Tonsley Redevelopment Project (the TR Project) which was taking place at a site at Alawoona Avenue, Mitchell Park, South Australia (the Flinders University Site).
Lend Lease was a “building industry participant” within the meaning of s 4(1) of the FWBI Act.
The individual respondents were CFMEU officials. Mr Cartledge was the Secretary of the CFMEU Construction and General Division, South Australian Divisional Branch.
At all relevant times the Flinders University Site constituted “premises” for the purposes of Pt 3-4 of the FW Act, and Lend Lease was the occupier of those premises for the purposes of the FW Act.
On 22 May 2014 at around 10.30 am Mr Bolton and Mr Cartledge attended the Flinders University site to speak about enterprise bargaining with employees of a subcontractor “GMR” who were on the site. Mr Bolton and Mr Cartledge were directed to leave by Mr Brenton Crabb, the site manager, who told them that they were not permitted on site without a right of entry notice or permits.
Mr Cartledge told Mr Crabb words to the effect that he and Mr Bolton were there to speak to the GMR employees about the enterprise bargaining agreement and would do so doing their break.
Mr Bolton and Mr Cartledge proceeded to the lunch sheds and spoke to Project Workers at about 10.30 am during a smoko break being a break in work for the purposes of s 490(2) of the FW Act.
Mr Bolton and Mr Cartledge did not leave the Flinders University Site until about 11.30 am.
Mr Bolton and Mr Cartledge were seeking to exercise rights in accordance with s 484 of the FW Act.
As at the time of the entry Mr Bolton and Mr Cartledge had not provided Lend Lease with an entry notice for the purposes of s 487 of the FW Act within the requisite period or at all.
The Fair Work Commission had not issued an exemption certificate for the entry.
The CFMEU is taken by the operation of s 793 of the FW Act to have engaged in the conduct of the individual respondents.
By reason of these matters, the individual respondents, as permit holders exercising or seeking to exercise rights in accordance with s 484 of the FW Act, acted in an improper manner in contravention of s 500 of the FW Act.
The CFMEU contravened s 500 of the FW Act.
7 The parties filed a Statement of Agreed Facts on 22 June 2015 in which they agreed, in summary and materially, as follows:
At relevant times Mossop Group Pty Ltd (Mossop) was the head contractor on a construction project known as St Mark’s College (the St Mark’s Project) which was taking place at a site situated at Kermode Street, North Adelaide (the Kermode Street Site). The Kermode Street Site constituted “premises” for the purposes of Pt 3-4 of the FW Act.
At all relevant times Mr McDermott was an officer and agent, and therefore an official of the CFMEU for the purposes of s 793 of the FW Act, and acting within the scope of his actual or apparent authority.
Mr McDermott held an entry permit for the purposes of s 512 of the FW Act.
Mossop employed employees and engaged subcontractors to perform work at the Kermode Street Site, which workers were eligible to be members of the CFMEU.
Mossop was the occupier of the premises for the purposes of Pt 3-4 of the FW Act.
On 4 June 2014 at about 6.50 am, Mr McDermott attended the Kermode Street Site. Site opening hours were 7.00 am through to 4.00 pm, and work was due to commence at 7.00 am. On arrival Mr McDermott had a conversation with Mr Peter Bruns, an employee and the Safety Supervisor at Mossop, to the following effect:
McDermott: “who is on site today”
Bruns: “concreters and steel fixers”
McDermott: “what companies are they from”
Bruns: “you already know who they are”
McDermott: “I want to have a chat to the boys”
Bruns: “no you can’t do that without your documentation”
McDermott: “you know I’m not going to do that”
Bruns: “well you can’t come on site”
Mr McDermott proceeded on to the Kermode Street Site.
Mr McDermott drew to Mr Bruns’ attention the adequacy of pre-dawn lighting.
Between 6.50 am and 7.10 am Mr McDermott held or attempted to hold discussions with employees for the purposes of s 484 of the FW Act outside a lunch shed located at the site. Discussions were held with workers for between 10 and 20 minutes.
At between 6.50 am and 6.59 am Mr Bruns engaged in a discussion to the following effect:
Bruns: “you cannot enter the site without the correct right of entry notice”
McDermott did not respond.
Bruns: “you are not allowed to enter the site without right of entry, if you continue to stay on site I will call the police”.
McDermott: “are you going to be one of those dickheads are you? Call them then, they are only going to escort me off if I’m still here”.
Bruns: “dealing with fuckwits like you yes I am”.
Mr Bruns telephone the police at 6.59 am, reported the unauthorised entry and requested that they attend the site to have Mr McDermott ejected.
Mr McDermott entered the site, and remained there until approximately (or no later than) 7.10 am.
Mr McDermott asked workers how many were union members, and, in the presence of Mr Bruns, spoke with the workers about union membership and benefits. During this time Mr McDermott twice requested Mr Bruns to stand somewhere else while he spoke with the workers. Mr Bruns refused. Mr McDermott turned to the workers and stated words to the effect “this is what we are fighting against”.
Mr McDermott was given directions not to enter the site and to leave the site by a person with authority to give those directions, namely Mr Bruns.
the CFMEU was taken by operation of s 793 of the FW Act to have engaged in the conduct of Mr McDermott.
Mr McDermott was a permit holder exercising, or seeking to exercise, rights in accordance with s 484 of the FW Act, and acted in an improper manner in contravention of s 500 of the FW Act.
the CFMEU contravened s 500 of the FW Act.
8 It is common ground that s 500 of the FW Act is a civil penalty provision, and the maximum penalty available for a contravention is 300 penalty units for a body corporate and 60 penalty units for an individual. At the time of the relevant conduct the value of a penalty unit was $170, meaning that the maximum penalty for a contravention of s 500 of the FW Act is $51,000 for the CFMEU and $10,200 for each of the individual respondents.
9 All three matters were heard on 25 November 2015 in respect of penalties, prior to the delivery by the High Court of its judgment in Commonwealth of Australia v Director, Fair Work Building Industry Inspector [2015] HCA 46. The parties subsequently filed submissions as to penalty range.
2. ISSUE ARISING AT THE HEARING
10 At the hearing the lawyer for the Director informed the Court of two recently delivered decisions of the Court which he submitted were relevant, namely Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1287 (in which Mr Cartledge was also a respondent) and Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1293.
11 Further, as I noted earlier the Director made additional submissions (not previously raised in written submissions) in respect of the nature of the admitted improper conduct. The specific point of distinction concerned whether that improper conduct included the initial entry on to the premises without giving the requisite prior notice.
12 In summary, the respondents submitted that:
the identification of this issue at the hearing as a point of contention between the parties was the first they had heard of it as an issue in dispute; and
the only improper conduct of the respondents was the failure of the individual respondents to leave when requested to do so. As established by Plenty v Dillon [1991] HCA 5; (1991) 171 CLR 635 there is a common law right to enter on to property for the purposes of advising of one’s presence and seeking entry.
13 The Director disagreed, submitting that:
the respondents’ approach was contrary to the statement of agreed facts in each case;
the improper conduct of the respondents included the initial entry on to the premises without providing the requisite prior notice required by the FW Act;
the contraventions arose from the individual respondents seeking to exercise rights in accordance with s 484 without giving the requisite notice;
that the respondents’ contraventions included the initial entry was a matter which went to the level of contravention;
the Court should take into account the totality of the respondents’ conduct, including the nature of their entry on to the premises to exercise statutory rights without giving requisite notice.
14 Other than in respect of a – somewhat belated – dispute as to the totality of the elements of the contraventions of the respondents, at the hearing the parties were not in real dispute in relation to the principles applicable in this case. There is no dispute that the respondents should be penalised – the dispute lies in respect of the quantum of the penalties to be imposed.
15 In summary, the Director claimed as follows:
The individual respondents have different degrees of culpability.
No quantifiable economic loss or damage appears to have been suffered as a result of the conduct of the respondents, Lend Lease employees had time taken up to monitor the unauthorised entry of the individual respondents.
All individual respondents have previously contravened industrial legislation.
Two previous decisions of the Court concerning Mr Bolton are Director, Fair Work Building Industry Inspectorate v Cartledge [2014] FCA 1047 (where Mr Bolton was penalised $4,000) and Director, Fair Work Building Industry Inspectorate v Stephenson [2014] FCA 1432 (where Mr Bolton was penalised $2,000 and $1,800).
Mr Cartledge had contravened industrial legislation on one previous occasion and was penalised $3,000: Director, Fair Work Building Industry Inspectorate v Cartledge.
Mr McDermott had contravened industrial legislation on two previous occasion: in Director, Fair Work Building Industry Inspectorate v Stephenson he was penalised $4,000 and in Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2014] FCA 160 he was penalised $1,320.
Mr Huddy had contravened industrial legislation on one previous occasion and was penalised $800: Director, Fair Work Building Industry Inspectorate v Stephenson.
Mr Pitt had contravened industrial legislation on three previous occasions: in Director, Fair Work Building Industry Inspectorate v Cartledge he was penalised $3,000 and $6,000, in Director of the Fair Work Building Inspectorate v CFMEU [2013] FCA 515 he was penalised $3,000 and in Director of the Fair work Building Industry Inspectorate v Stephenson he was penalised $3,500.
Prior contraventions by a number of the respondents had deprived them of any mitigation which would be available if they had not previously contravened the FW Act, and such contraventions demonstrated a history of engagement in prior conduct.
The CFMEU has a significant record of non-compliance with the provisions of industrial legislation.
The individual respondents have admitted acting in an improper manner. The contraventions were deliberate and indifferent.
The respondents are entitled to credit for admission of facts.
At the time of the relevant conduct the individual respondents were the holders of entry permits, which entitlement conferred obligations on them. Although they no longer held entry permits, concepts of general and individual deterrence remain relevant factors in assessing penalty, and it would be an inadequate deterrent to others if it could be said that no longer holding an entry permit after the event made a material difference to any penalty otherwise applicable.
In Director of the Fair Work Building Industry Inspectorate v Bragdon (No 2) [2015] FCA 998 a Judge of this Court took the view that penalties were not providing any real deterrent, and pursuant to s 545 of the FW Act imposed an order to the effect that the penalties should be paid by the individuals themselves, with no reimbursement by the union or anyone else. The Court in this case should impose similar orders.
Any penalties ordered should be paid to the Commonwealth.
Submissions of the respondents
16 The respondents submit, in summary:
The overriding principle is to ensure that the sentence is proportionate to the gravity of the contravening conduct.
Punishment, deterrence and rehabilitation are the key purposes of imposition of penalty.
The only improper conduct of the individual respondents was their failure to leave the site when requested to do so.
The decision in Bragdon was clearly wrong because, inter alia:
○ the orders exceeded the power conferred on the Court;
○ there are practical and discretionary reasons as to why such orders would not be made;
○ the power in s 546(1) does not dictate how a person is to pay a penalty or from where the person obtains the funds to pay that penalty;
○ section 546 is a specific provision which provides for a specific procedure in relation to the payment of a pecuniary penalty.
The offending is at the low end of the scale of seriousness in respect of offending which might come before the Court for a right of entry breach and a failure to leave the site.
Although the Director emphasised that relevant contraventions over a relatively short period of time between October 2013 and June 2014, the contemporaneity of those events suggests an aberrant course of conduct rather than escalating levels of individual offending.
Where no previous penalty has been imposed it cannot be said that the imposition of a prior penalties has not acted as a deterrent.
There were early admissions and an early agreed statement of facts in each case.
There was no suggestion of offending after June 2014.
17 In relation to the conduct of the individual respondents in each case, the respondents submit, in summary, as follows.
Additional submissions of the respondents specific to SAD 59 of 2015
18 In relation to Mr Bolton, Mr Huddy and Mr Pitt in SAD 59 of 2015:
The first time Mr Bolton was penalised was on 2 October 2014.
No penalties have been imposed on Mr Bolton since the contravention occurred.
There is no basis for finding that Mr Bolton had engaged in any contraventions since the first penalty was imposed on him.
Mr Bolton’s entry permit has been suspended by the Fair Work Commission and he is no longer an entry permit holder. It follows that it is impossible for him to engage in further contraventions of s 500, and there is no role for specific deterrence.
No penalties were imposed on Mr Huddy when this contravention occurred. The first time Mr Huddy was penalised was on 23 December 2014. Prior to this Mr Huddy had resigned from the CFMEU and had ceased to be a permit holder. Accordingly, it was impossible for him to engage in further contraventions of s 500, and there was no role for specific deterrence.
Mr Pitt has been the subject of penalties imposed by judgments of 31 May 2013 (which penalty did not relate to right of entry provisions), 2 October 2014 and 23 December 2014. He no longer held an entry permit, and his application for an entry permit was discontinued. There was no prospect of contravention of s 500 by Mr Pitt, and as such there was no role for specific deterrence.
The fact that Mr Bolton, Mr Huddy and Mr Pitt had ceased to hold entry permits as a result of their contraventions provided for significant general deterrence.
The resolution of right of entry issues as between Lend Lease and the CFMEU through consent orders was a mitigating factor in terms of penalty.
Additional submissions of the respondents specific to SAD 60 of 2015
19 In relation to Mr Cartledge and Mr Bolton in SAD 60 of 2015:
Previous penalties imposed on Mr Cartledge and Mr Bolton had clearly deterred them from re-engaging in similar conduct because no penalties had been imposed on them since the contraventions occurred.
The entry permits held by Mr Cartledge and Mr Bolton at the time of the contravention had expired. They were no longer entry permit holders, and accordingly it was impossible for them to engage in further contraventions of s 500. It followed that there was no role for specific deterrence.
Additional submissions of the respondents specific to SAD 61 of 2015
20 In relation to Mr McDermott in SAD 61 of 2015:
Mr McDermott was only on site 20 minutes, work was delayed for no more than 10 minutes, and he drew safety concerns to the attention of the Safety Supervisor while on site.
There was no basis to find that Mr McDermott had engaged in any contraventions since the imposition of penalties in 2014.
Additional contraventions of s 500 and s 497 in 2013 were admitted by Mr McDermott or found proved in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1293. Further, Mr McDermott admitted two s 500 contraventions on 5 May 2014 (in SAD 303 of 2014 and SAD 306 of 2014) and one on 6 May 2014 (in SAD 304 of 2014).
Mr McDermott ceased being a permit holder on 28 August 2015, and accordingly could not contravene s 500. That he no longer held an entry permit was an issue of general deterrence.
SAD 59 of 2015
21 So far as concerns penalties, the Director submits that the following penalty ranges are appropriate:
in relation to Mr Bolton, taking into account that he has been found to have contravened industrial legislation on two previous occasions and his conduct during this contravention – $4,000 to $6,000;
in relation to Mr Huddy, taking into account that he has been found to have contravened industrial legislation on one previous occasion – $2,000 to $3,000;
in relation to Mr Pitt, taking into account that he has been found to have contravened industrial legislation on three previous occasions – $4,000 to $6,000;
in relation to the CFMEU, taking into account its significant record of non-compliance with industrial legislation – a total of $50,000 to $75,000 comprising:
○ $20,000 to $30,000 for Mr Bolton’s contravention;
○ $10,000 to $15,000 for Mr Huddy’s contravention; and
○ $20,000 to $30,000 for Mr Pitt’s contravention.
The Director submits that this penalty should be reduced to $50,000 having regard to the totality principle.
22 The respondents submit that the following penalty ranges are appropriate:
in relation to Mr Bolton – $1,000 to $2,000;
in relation to Mr Huddy – $500 to $1,000;
in relation to Mr Pitt – $1,000 to $2,000;
in relation to the CFMEU, noting that its liability is pursuant to s 793(1)(a) of the FW Act (not s 550), that there was no material before the Court to support a finding that the CFMEU had (inter alia) aided, induced, or conspired with others to effect the contraventions, and that it was proper to group the CFMEU’s contraventions as a single contravention – a total of $15,000 to $25,000.
SAD 60 of 2015
23 So far as concerns penalties, the Director submits that the following penalty ranges are appropriate:
in relation to Mr Cartledge, taking into account that he has been found to have contravened industrial legislation on one previous occasion and his conduct during this contravention – $4,000 to $6,000;
in relation to Mr Bolton, taking into account that he has been found to have contravened industrial legislation on two previous occasions – $4,000 to $6,000;
in relation to the CFMEU, taking into account its significant record of non-compliance with industrial legislation – a total of $40,000 to $60,000 comprising:
○ $20,000 to $30,000 for Mr Cartledge’s contravention; and
○ $20,000 to $30,000 for Mr Bolton’s contravention.
The Director submits that this penalty should be reduced to $40,000 having regard to the totality principle.
24 The respondents submit that the following penalty ranges are appropriate:
in relation to Mr Cartledge – $2,000 to $3,000;
in relation to Mr Bolton – $1,000 to $2,000;
in relation to the CFMEU, noting that its liability is pursuant to s 793(1)(a) of the FW Act (not s 550), that there was no material before the Court to support a finding that the CFMEU had (inter alia) aided, induced, or conspired with others to effect the contraventions, and that it was proper to group the CFMEU’s contraventions as a single contravention – a total of $10,000 to $20,000.
SAD 61 of 2015
25 So far as concerns penalties, the Director submits that the following penalty ranges are appropriate:
in relation to Mr McDermott, taking into account that he has been found to have contravened industrial legislation on two previous occasions – $4,000 to $6,000;
in relation to the CFMEU, taking into account its significant record of non-compliance with industrial legislation – a total of $20,000 to $30,000.
26 The respondents submit that the following penalty ranges are appropriate:
in relation to Mr McDermott – $2,000 to $3,000;
in relation to the CFMEU, noting that its liability is pursuant to s 793(1)(a) of the FW Act (not s 550), and that there was no material before the Court to support a finding that the CFMEU had (inter alia) aided, induced, or conspired with others to effect the contraventions, but noting that Mr McDermott was the Assistant Secretary of the CFMEU Construction & General Division, South Australian Divisional Branch – $10,200 to $20,400.
27 Principles relevant to a consideration of appropriate civil penalties for contraventions of the FW Act were discussed by Barker J in Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2010] FCA 977. Generally, his Honour observed:
6. The purpose to be served by the imposition of penalties is at least threefold:
(1) Punishment, which must be proportionate to the offence and in accordance with prevailing standards;
(2) Deterrence, both personal (assessing the risk of re-offending) and general (a deterrent to others who might be likely to offend); and
(3) Rehabilitation.
See Ponzio v BP Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543 (Ponzio), Lander J at [93]-[94].
7. The task which a sentencing judge is faced with is one of “instinctive synthesis”: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560 (Australian Ophthalmic Supplies), Gray J at [27] and Graham J [55]. Such a process requires that a court take into account all relevant factors and to arrive at a single result which takes due account of them all: see Wong v The Queen [2001] HCA 64; (2001) 207 CLR 584 at [74]-[76]; Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 (Markarian), Gleeson CJ, Gummow, Hayne and Callinan JJ at [37]-[39]. The penalty must not be so great as to crush the person upon whom the penalty is imposed or reveal the person as a scapegoat: Ponzio at [93] (Lander J); McDonald v R [1994] FCA 956; (1994) 48 FCR 555 at 563. The maximum penalty is reserved for only the most serious of contraventions: Markarian at [31]. Proportionality and consistency commonly operate as a final check on the penalty assessed: Australian Ophthalmic Supplies at [53].
28 More specific principles were identified at [15]:
(1) The nature and extent of the conduct which led to the breaches;
(2) The circumstances in which that relevant conduct took place;
(3) The nature and extent of any loss or damage sustained as a result of the breaches;
(4) Whether there had been similar previous conduct by the respondent;
(5) Whether the breaches were properly distinct or arose out of the one course of conduct;
(6) The size of the business enterprise involved;
(7) Whether or not the breaches were deliberate;
(8) Whether senior management was involved in the breaches;
(9) Whether the party committing the breach had exhibited contrition;
(10) Whether the party committing the breach had taken corrective action;
(11) Whether the party committing the breach had cooperated with the enforcement authorities; and
(12) The need for specific and general deterrence.
29 These issues are relevant to the proceedings before me, and can be applied in all three proceedings in the following respects.
30 As I noted earlier in this judgment, at the hearing before me a dispute arose between the parties as to whether relevant conduct of all respondents was only the refusal of the individual respondents to leave the site, or both their entry on to the relevant site and their refusal to leave the site.
31 In my view it was both the entry on to the site and the refusal of the individual respondents to leave the site when requested to do so which constituted the contravening conduct. That this is so is clear from each statement of agreed facts between the parties. It is clear that all individual respondents entered the relevant site without the provision of an entry notice in respect of their entry for the purposes of s 487 of the FW Act, and had not sought an exemption certificate from the Fair Work Commission. Indeed, if they had entered lawfully they would not (and presumably could not) have been asked to leave in the terms put to them by the head contractor.
32 I consider that the more serious aspect of their conduct was their refusal to leave when requested to do so by representatives of the head contractor, improperly holding discussions with employees on the site for the purposes of s 484 of the FW Act, and remaining sufficiently long that the police were required to attend.
33 I also note, however, that there was no suggestion that the conduct of the individual respondents was aggressive or threatening.
2. Circumstances in which the relevant conduct took place
34 It is common ground that, at material times, the individual respondents were all officials of the CFMEU for the purposes of s 793 of the FW Act, and in relation to their conduct were acting within the scope of their actual or apparent authority as officials of the CFMEU.
35 All individual respondents were, at that time, holders of entry permits under the FW Act.
36 In SAD 59 of 2015, it is accepted that until Mr Bolton spoke to workers on the site, Lend Lease was not aware that Mr Bolton, Mr Huddy or Mr Pitt were on the site. Further, the presence of Mr Bolton, Mr Huddy and Mr Pitt on the site for approximately one hour interrupted a tool box meeting being conducted by Lend Lease employee and Safety Manager Gavin Wright in the presence of workers on the site.
37 The respondents point out that, at the time of the visit of Mr Bolton, Mr Huddy and Mr Pitt, the workers were not engaged in work because of rain. In my view this is a happy coincidence rather than a factor which should be taken into account in mitigation of the circumstances surrounding the contraventions.
38 In SAD 60 of 2015, it is accepted that after they arrived, Mr Bolton and Mr Cartledge ignored a direction by Mr Brenton Crabb of Lend Lease to leave the site, and that they proceeded to lunch sheds to have discussions with workers. It appears that they arrived at about 10.30 am and remained for approximately one hour. That their arrival appeared to coincide with a smoko break is, in my view, another happy coincidence – that their visit lasted for one hour was an unacceptable interruption of the work day of the workers at the site.
39 In SAD 61 of 2015, it is accepted that although Mr McDermott arrived at the site before the commencement of the work day, he ignored a direction that he not enter the site, and that he remained on the site for approximately 20 minutes. While this is not a particularly lengthy period of time, it was nonetheless a disruption to the beginning of the work day.
3. Nature and extent of any loss or damage sustained as a result of the breaches
40 No loss or damage sustained by Lend Lease as a result of the breaches of the FW Act by the respondents has been identified.
4. Similar previous conduct by the respondents
41 It is not in dispute that there have been previous contraventions by the individual respondents. These prior contraventions by the individual respondents demonstrate that they have a history of engaging in the particular conduct in question in these proceedings. A very real question arises as to whether penalties previously imposed on individual respondents has acted as a deterrent.
42 There is also extensive material before the Court indicating a significant record of non-compliance with the provisions of the industrial legislation by the CFMEU. Penalties imposed on the CFMEU appear to have no impact – indeed the obvious inference to be drawn is that the CFMEU has ignored such penalties as inconsequential.
5. Whether the breaches were properly distinct or arose out of the one course of conduct
43 While these three cases have been grouped together there is no suggestion that, cumulatively, they constitute one course of conduct, at least by the CFMEU. In relation to contraventions by its officials in each set of proceedings however, it is appropriate that the penalty to be imposed on the CFMEU be considered in light of the principle of totality.
6. Size of the business enterprise involved
44 The CFMEU is a large and prominent national union. There is no suggestion that it is unable to pay penalties in the range it submits, or submitted by the Director.
7. Whether or not the breaches were deliberate
45 The material before the Court supports a finding that the breaches by the individual respondents were deliberate.
46 The CFMEU submits, in summary, that there is no material to support a finding that it was in any way an accessory to the contraventions by the individual respondents. In my view this is a nonsensical submission. At material times the individual respondents were all officials of the CFMEU. I am satisfied that they were acting with apparent, if not actual, authority of the CFMEU in respect of their conduct.
8. Whether senior management was involved in the breaches
47 There is no material that very senior management of the CFMEU were involved in the breaches, however each of the individual respondents was a union official holding entry permits under the FW Act and both Mr Cartledge and Mr McDermott had management positions in the CFMEU in South Australia. The circumstances of the contraventions demonstrates a disregard by the individual respondents, and through them the CFMEU, of obligations imposed on them by Pt 3-4 of the FW Act as the holders of such permits, in particular the provision of an entry notice as required by s 487 of the FW Act.
9. Whether the party committing the breach had exhibited contrition
48 There is no material before the Court to support a finding of contrition by the respondents in respect of the contraventions.
10. Whether the party committing the breach had taken corrective action
49 There is no material before the Court to support a finding of corrective action by the respondents in respect of the contraventions.
11. Whether the party committing the breach had cooperated with the enforcement authorities
50 I am satisfied that the respondents have cooperated with the Director, in that in each case the parties have agreed on a statement of facts rather than requiring the Director to take the matter to trial. While I note that the parties were unable to agree on appropriate penalties, I do not consider that the inability of the respondents to agree with the Director on this issue militates against a overall finding of cooperation on the part of the respondents.
51 While I am satisfied that the contraventions are at the lower end of the range of seriousness, I also note that:
the CFMEU is a “repeat offender” which generally appears indifferent to imposition of penalties for contraventions of the FW Act;
each of the individual respondents had contravened the FW Act at least once prior to the contraventions in this case.
52 Further, I am not persuaded that the loss of entry permits by the individual respondents was an adequate deterrent in these circumstances. Similarly, I find the respondents’ submission that there is no role for specific deterrence because none of the respondents continues to hold an entry permit to be both cynical and specious, and I reject it.
53 At the hearing the Director sought orders in accordance with those made by a Judge of this Court in Director of the Fair Work Building Industry Inspectorate v Bragdon (No 2) [2015] FCA 998. I note that an appeal against this decision was allowed by the Full Court in Bragdon v Director of the Fair Work Building Industry Inspectorate [2016] FCAFC 64. In that judgment the Full Court observed, inter alia, that there was some impracticality associated with an order prohibiting reimbursement of a union official by the union when there was no real ability to ensure compliance with the order. Their Honours also observed:
91. … [T]he deterrent aspect of industrial penalties is not removed (even if it might be eroded) by the prospect that the penalty will ultimately be paid, or reimbursed, by a union. The individual wrongdoer is the person liable in law for the payment of a penalty, and to the consequences for non-payment.
92. There may also be a wider context to take into account. An unpaid fine becomes recoverable as a debt (FW Act, s 546(4)). As a debt, it might normally be satisfied by a third party if debt recovery proceedings were commenced, or if a judgment debt set the matter on a course towards bankruptcy. The orders involved no express prohibition on third parties, even the other appellants, making payments of the penalty. We doubt that the Commonwealth could refuse a tender of payment from a third party with respect to either the penalty or a debt. If the penalty was paid, or a claimed debt was satisfied, the Commonwealth would be in no position to claim, or even accept, personal payment again under the orders.
54 In my view these principles are relevant in the proceedings before me. Accordingly, I am not prepared to make orders similar to those made by the primary Judge in Bragdon, as submitted by the Director.
55 All respondents reached agreements with the Director as to the facts, and admitted their contraventions. These agreements are a mitigating factor in respect of all respondents, warranting a penalty of less than the maximum available.
56 However comparing the penalties proposed by the Director and the respondents, I consider that the penalties proposed by the Director are appropriate, particularly taking into account the fact that each of the individual respondents has previously contravened the FW Act, the management positions in the CFMEU of Mr Cartledge and Mr McDermott at relevant times, the fact that the individual respondents entered unlawfully and refused to leave, the appropriateness of a deterrent penalty in respect of the CFMEU, and the principle of totality so far as concerns penalties to be imposed on the CFMEU for multiple breaches by its officials.
57 That the individual respondents no longer have entry permits does not mean that there is no role for specific deterrence, or that the principle of general deterrence has been satisfied. The individual respondents were officials of the union, and as such can be expected to be role models for other union members, not only in representing the CFMEU but in compliance with the law and fulfilment of their legal obligations. The conduct of the individual respondents, while at the lower end of the spectrum, demonstrates a demoralising lack of respect for either the law or their roles as officials. That a number of the individual respondents may no longer hold management positions in the CFMEU, or be union officials with the CFMEU, is irrelevant. The penalties proposed by the Director are a proper deterrent for such conduct.
I certify that the preceding fifty-seven (57) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier. |
Associate:
