FEDERAL COURT OF AUSTRALIA
Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Bendigo Theatre Case) (No 2) [2018] FCA 1211
ORDERS
AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER Applicant | ||
AND: | CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION First Respondent NIGEL DAVIES Second Respondent ALEX TADIC Third Respondent | |
DATE OF ORDER: |
TO: THE CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION, NIGEL DAVIES AND ALEX TADIC
IF YOU (BEING THE PERSON BOUND BY THIS ORDER):
(A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR
(B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO,
YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.
ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.
THE COURT DECLARES THAT:
1. The second respondent, being an officer of the first respondent and acting in that capacity for the purposes of section 793 of the Fair Work Act 2009 (Cth) (“the FW Act”), when attending at and entering the site of the Bendigo Theatre construction project (“the site”) and when exercising a right under Part 3-4 of the FW Act (“a Part 3-4 right”) on 22 July 2014, contravened:
(a) section 500 of the FW Act (“the first contravention”) by acting in an improper manner by:
(i) not providing the Entry Notice as required by section 487 of the FW Act;
(ii) not presenting himself to the site office;
(iii) not signing the site visitors book;
(iv) refusing a lawful request by the occupier of the site to produce the entry permit issued to him under section 512 of the FW Act (“a Federal entry permit”) for inspection and offering no viable explanation for that refusal; and
(v) directing foul and dismissive language towards the authorised representative of the occupier of the site when asked to produce his Federal entry permit;
(b) section 500 of the FW Act (“the second contravention”) by acting in an improper manner by refusing to comply with a lawful direction by the occupier of the site to leave the site and offering no viable explanation for that refusal;
(c) section 500 of the FW Act (“the third contravention”) by acting in an improper manner by:
(i) refusing to comply with a further lawful direction by the occupier of the site to leave the site and offering no viable explanation for that refusal; and
(ii) in response to that direction, saying dismissively “Why are you following me? Just go away”; and
(d) section 500 of the FW Act (“the fourth contravention”) by acting in an improper manner by:
(i) placing his mobile phone close to the face of the authorised representative of the occupier of the premises; and
(ii) persisting in his refusal of a lawful request by the occupier of the site to produce his Federal entry permit for inspection and offering no viable explanation for that refusal.
2. The second respondent, being an officer of the first respondent and acting in that capacity for the purposes of section 793 of FW Act, when attending at and entering the site and when exercising a State or Territory OHS Right within the meaning of subsection 494(2) of the FW Act on 29 July 2014, contravened:
(a) section 497 of the FW Act (“the fifth contravention”) by continuing to exercise a State or Territory OHS right after having refused a lawful request by the occupier of the site to produce his Federal entry permit for inspection; and
(b) section 500 of the FW Act (“the sixth contravention”) by acting in an improper manner by:
(i) refusing a lawful direction by the occupier of the site to leave the site; and
(ii) refusing a lawful request by the occupier of the site to produce his Federal entry permit for inspection.
3. The third respondent, being an officer of the first respondent and acting in that capacity for the purposes of section 793 of FW Act, when attending at and entering the site and when exercising a Part 3-4 right on 1 August 2014, contravened section 500 of the FW Act (“the seventh contravention”) by acting in an improper manner by acting in a loud, rude, aggressive and abusive manner and by using profane and indecent language towards the authorised representative of the occupier of the site, for between three and five minutes.
4. In respect of each of the first, second, third, fourth and sixth contraventions by the second respondent referred to in declarations 1(a)-1(d) and 2(b) above, the first respondent:
(a) engaged in the second respondent’s conduct by operation of section 793(1) of the Act and thereby participated in each of those contraventions;
(b) is taken by operation of section 793(2) of the FW Act, to have known of all of the essential facts constituting each of those contraventions;
(c) was accordingly knowing concerned in each of those contraventions within the meaning of section 550 of the FW Act; and
(d) thereby itself contravened section 500 of the FW Act in respect of each of the first, second, third, fourth and sixth contraventions.
5. In respect of the seventh contravention by the third respondent referred to in declaration 3 above, the first respondent:
(a) engaged in the third respondent’s conduct by operation of section 793(1) of the FW Act and thereby participated in that contravention;
(b) is taken by operation of section 793(2) of the FW Act, to have known of all of the essential facts constituting that contravention;
(c) was accordingly knowing concerned in that contravention within the meaning of section 550 of the FW Act; and
(d) thereby itself contravened section 500 of the FW Act in respect of the seventh contravention.
THE COURT ORDERS THAT:
1. The name of the first respondent be amended to “Construction, Forestry, Maritime, Mining and Energy Union”.
2. The second respondent pay the following pecuniary penalties:
(a) $5,000 in respect of the first contravention;
(b) $2,000 in respect of the second contravention;
(c) $3,000 in respect of the third contravention;
(d) $3,500 in respect of the fourth contravention;
(e) $2,000 in respect of the fifth contravention; and
(f) $3,500 in respect of the sixth contravention.
3. The third respondent pay a pecuniary penalty of $7,500 in respect of the seventh contravention.
4. The first respondent pay the following pecuniary penalties:
(a) $50,000 in respect of the first contravention;
(b) $30,000 in respect of the second contravention;
(c) $35,000 in respect of the third contravention;
(d) $40,000 in respect of the fourth contravention;
(e) $40,000 in respect of the sixth contravention; and
(f) $50,000 in respect of the seventh contravention.
5. The pecuniary penalties referred to in order 4 above are to be paid to the Commonwealth of Australia within 28 days.
6. The pecuniary penalties referred to in orders 2 and 3 above are to be paid to the Commonwealth of Australia within 60 days.
7. The proceeding otherwise be dismissed.
8. There be no order as to costs.
THE COURT DIRECTS THAT:
9. The applicant serve these orders on:
(a) the first respondent in accordance with rule 10.04 of the Federal Court Rules 2011 (Cth); and
(b) the second and third respondents in accordance with rule 10.01 of the Federal Court Rules 2011 (Cth).
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
TRACEY J:
1 Earlier this year I found that each of the respondents had committed contraventions of provisions contained in Part 3-4 of the Fair Work Act 2009 (Cth) (“the FW Act”): see Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Bendigo Theatre Case) [2018] FCA 122 (“the liability judgment”). These reasons should be read in conjunction with those in the liability judgment.
2 The parties have since filed written submissions relating to pecuniary penalties and other relief sought by the Commissioner.
3 The Commissioner sought:
a declaration that Mr Davies had contravened s 497 of the FW Act;
declarations that Mr Davies, Mr Tadic and the Construction, Forestry, Mining and Energy Union (“the CFMEU”) had each contravened s 500 of the FW Act;
the imposition of pecuniary penalties on each respondent;
an order that those penalties be paid to the Commonwealth of Australia within 28 days;
an order that Mr Tadic pay any pecuniary penalty imposed on him personally and that he not seek or receive reimbursement from the CFMEU of such penalty once paid; and
that there be no order as to costs.
DECLARATIONS
4 The Commissioner provided the Court with a draft of declarations which identified the various respondents’ contravening conduct by reference to findings made in the liability judgment.
5 The respondents did not formally oppose the granting of declaratory relief. Nor did they submit that any of the proposed declarations were inconsistent with findings made in the liability judgment.
6 The Court has power to grant declaratory relief pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth).
7 Any declaratory relief made in the exercise of that power must be directed to quelling legal controversy between the parties. The applicant must have a real interest in obtaining the relief sought: see Ainsworth v Criminal Justice Commission (1992) 175 CLR 564 at 581-582 (Mason CJ, Dawson, Toohey and Gaudron JJ). These requirements are satisfied in the present proceeding.
8 It is not appropriate to grant declaratory relief for the purpose of providing an advisory opinion. It will, however, be appropriate to do so in some cases where there has been a contravention of statutory norms. Such declarations must, however, be precise, be based on facts as found and serve a practical purpose: see Australian Competition and Consumer Commissioner v Digital Products Group Pty Ltd (2007) ATPR ¶42-144 at 56,794; [2006] FCA 1732 at [10]-[11] (Tracey J). Declarations may also serve an educative purpose in explaining to the public and persons whose conduct is governed by particular legislation, how and why contraventions of that have occurred: cf Director of the Fair Work Building Industry Inspectorate v Cartledge [2014] FCA 1047 at [101] (Mansfield J); DP World Sydney Limited v Maritime Union of Australia (No 2) (2014) 318 ALR 22 at 24; [2014] FCA 596 at [6]-[7] (Flick J).
9 In the present proceeding the declarations proposed will have such an effect. They will alert participants in the building and construction industry and others engaged in the Federal industrial system about the type of conduct which is proscribed by Part 3-4 of the FW Act.
10 The declarations sought will be made.
PECUNIARY PENALTIES
Quantum
11 The Court has power to impose pecuniary penalties if satisfied that a respondent has contravened a civil remedy provision: see s 546(1). Sections 497 and 500 of the FW Act are civil remedy provisions. The maximum penalties proscribed for a contravention of each provision is 300 penalty units (for a body corporate) and 60 penalty units (for an individual): see ss 539(2) and 546(2) of the FW Act. The value of a penalty unit at relevant times was $170: see s 12 of the FW Act and Crimes Act 1914 (Cth) s 4AA(1). As a result the maximum pecuniary penalty available for each contravention by the respondent union is $51,000 and, by the individual respondents, $10,200. The Court may order that any pecuniary penalty be paid to the Commonwealth: see s 546(3)(a).
Guiding principles
12 I have recently had occasion to review the principles which are applied by the Court when fixing pecuniary penalties: see Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 407 at [87]-[100]. What follows is a restatement of those principles which have, as a result of more recent authority, been varied at least in the weight to be accorded to some of them. I have also made some additional observations which have application in the circumstances of the present proceeding. I have had regard to these principles when fixing penalties.
13 The predominant purpose of civil penalty provisions is deterrence, both specific and general: see Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at 506; [2015] HCA 46 at [55] (“The Civil Penalties Case”).
14 The Court emphasised the pre-eminence of deterrence as a guiding principle where the fixing of civil penalties is concerned. In their joint judgment, French CJ, Kiefel, Bell, Nettle and Gordon JJ said (at 506 [55]) that:
No less importantly, whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance:
“Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act]. … The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.”
(Citations omitted.)
15 The comments of Keane J in the same case (at 523-524 [110]) were equally emphatic and endorsed observations earlier made in this Court:
It is because the Commissioner may, on occasion, be too pragmatic in taking such a stance that the court must exercise its function to ensure that the penalty imposed is just, bearing in mind competing considerations of principle, including that of equality before the law and the need to maintain effective deterrence to other potential contraveners. In this latter regard, in Australian Competition and Consumer Commission v TPG Internet Pty Ltd, French CJ, Crennan, Bell and Keane JJ approved the statement by the Full Court of the Federal Court in Singtel Optus Pty Ltd v Australian Competition and Consumer Commission that a civil penalty for a contravention of the law:
“must be fixed with a view to ensuring that the penalty is not such as to be regarded by [the] offender or others as an acceptable cost of doing business.”
(Citations omitted.)
16 Similarly strong statements are to be found in earlier decisions of this Court and of the Victorian Supreme Court. This Court has held that a penalty for contraventions of Part 3-4 of the FW Act must be fixed at a level that is sufficiently high to deter repetition by a contravener and by others who might be tempted to follow suit: cf DP World at 27 [18]; Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at 559-560; [2007] FCAFC 65 at [93] (Lander J). In Grocon v Construction, Forestry, Mining and Energy Union (No 2) (2014) 241 IR 288 at 357; [2014] VSC 134 at [196] Cavanough J observed that “few things could be more destructive to the authority of the Court and to the rule of law than the idea that fines or similar punishment are akin to a tax that, once budgeted for, enable the use of unlawful conduct to achieve industrial outcomes.” Put another way (as has been done in the context of contraventions of consumer law) a penalty “must be fixed with a view to ensuring that the penalty is not such as to be regarded by [the] offender or others as an acceptable cost of doing business”: see Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249 at 265; [2014] FCAFC 20 at [62] (Keane CJ, Finn and Gilmour JJ). The penalty must also reflect the need to maintain public confidence in the regime for which Part 3-4 provides: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at 580; [2008] FCAFC 8 at [91] (Buchanan J).
17 Some, but not all, of the principles which guide criminal sentencing remain applicable to the determination of civil penalties. Concepts such as retribution, denunciation and rehabilitation have no work to do: see Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) [2018] FCAFC 97 at [19] (Allsop CJ, White and O’Callaghan JJ).
18 Another criminal sentencing provision which is of limited ongoing relevance in the civil context is the principle that “the maximum penalty prescribed for an offence is intended for cases falling within the worst category of cases for which that penalty is proscribed”: see Veen v The Queen [No 2] (1988) 164 CLR 465 at 478 (Mason CJ, Brennan, Dawson and Toohey JJ). In R v Kilic (2016) 259 CLR 256 at 266; [2016] HCA 48 at [20] (Bell, Gageler, Keane, Nettle and Gordon JJ), the High Court said that the use of the expression “the worst category” of an offence is apt to mislead. It cautioned that “sentencing judges should avoid using the expression ‘worst category’ and instead, in those cases where it is relevant to do so, state in full whether the offence is or is not so grave as to warrant the maximum prescribed penalty.” A case may fall within this category even if it is possible to imagine an even worse incident of the offending.
19 There are difficulties in translating this principle to the civil realm. It concentrates on the gravity of a particular criminal act and seeks to compare that act with other criminal acts.
20 Given the emphasis on deterrence in the civil regime, the maximum penalty may be appropriate for a person who has repeatedly contravened the same or similar legislative provisions despite having been penalised regularly over a period of time for such misconduct. The gravity of the offending, in such cases, is to be assessed by reference to the nature and the quality of the recidivism rather than by comparison of individual instances of offending: see Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 1462 at [8] (Jessup J). Relevant matters will include the number of contraventions which have occurred over a period, whether the ongoing misconduct is the result of conscious decisions, whether the repeated contravenor has treated the payment of penalties as a cost of doing business and whether any attempt has been made to comply with the law as declared by the Court.
21 The penalty is to be determined by a process of “instinctive synthesis”: McAlary-Smith at 567-568 [27] (Gray J), 572 [55] (Graham J). This process involves the Court having regard to all relevant factors before fixing a penalty which brings them all into account.
22 In Kelly v Fitzpatrick (2007) 166 IR 14 at 18-19; [2007] FCA 1080 at [14] I identified a number of potentially relevant and applicable considerations which may be taken into account when the Court is deciding appropriate penalties for contraventions of the FW Act. They include:
• The nature and extent of the conduct which led to the breaches.
• The circumstances in which that conduct took place.
• The nature and extent of any loss or damage sustained as a result of the breaches.
• Whether there had been similar previous conduct by the respondent.
• Whether the breaches were properly distinct or arose out of the one course of conduct.
• The size of the business enterprise involved.
• Whether or not the breaches were deliberate.
• Whether senior management was involved in the breaches.
• Whether the party committing the breach had exhibited contrition.
• Whether the party committing the breach had taken corrective action.
• Whether the party committing the breach had cooperated with the enforcement authorities.
• The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements and
• The need for specific and general deterrence.
See also: The Non-Indemnification Personal Payment Case at [20]-[22].
23 Each of these considerations has the potential to have both an ameliorative and aggravating impact in the course of the instinctive synthesis process. Depending on the circumstances of a given case a particular factor may have no application or carry little or no weight.
24 As Buchanan J cautioned in McAlary-Smith at 580 [91], lists of this kind are not to be applied rigidly or allowed to subvert the overarching purpose of the penalty fixation process.
25 The Commissioner’s contentions referred to many of these considerations and the respondents dealt with most of them in their submissions.
26 Where, as in the present proceeding, multiple contraventions arise from a series of related events which constitute a course of conduct, principles of proportionality and consistency come into play in determining the appropriateness of the penalty: McAlary-Smith at 572 [51]-[54].
27 The ultimate penalty “must be proportionate to the offence and in accordance with the prevailing standards of punishment”: Ponzio at 559 [93] (Lander J); McAlary-Smith at 572 [53]-[54].
28 Consistency requires that “[l]ike cases should be treated in like manner”: Wong v The Queen (2001) 207 CLR 584 at 591; [2001] HCA 64 at [6] (Gleeson CJ). The consistency principle does not require a detailed factual comparison between past cases and that presently under consideration with a view to fixing a higher or lower penalty depending on the outcome of the comparative analysis: Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357 at 376; [2008] FCAFC 170 at [60] (Branson and Lander JJ). This principle may give way, over time, in its application to a recidivist: see Director of the Fair Work Building Industry Inspectorate v The Construction, Forestry, Mining and Energy Union [2015] FCA 1213 at [63].
29 It is also necessary to ensure that a respondent is not punished twice for the same conduct. The principle was explained by the Full Court in Construction, Forestry, Mining and Energy Union v Cahill (2010) 269 ALR 1 at 12; [2010] FCAFC 39 at [39] (Middleton and Gordon JJ) as follows:
It [the “course of conduct” principle] is a concept which arises in the criminal context generally and one which may be relevant to the proper exercise of the sentencing discretion. The principle recognises that where there is an interrelationship between the legal and factual elements of two or more offences for which an offender has been charged, care must be taken to ensure that the offender is not punished twice for what is essentially the same criminality. That requires careful identification of what is ‘the same criminality’ and that is necessarily a factually specific enquiry. Bare identity of motive for commission of separate offences will seldom suffice to establish the same criminality in separate and distinct offending acts or omissions.
(Original emphasis.)
The principle does not require that multiple contraventions be treated as a single contravention even if they occur in close proximity one to the other and arise to some extent as part of a course of conduct. On the contrary, the Court is required to impose a penalty for each contravention: see Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73 at [227], [229] (Allsop CJ, Middleton and Robertson JJ); Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68 at 95, 99-100; [2017] FCAFC 113 at [128]-[130] and [148]-[149] (Dowsett, Greenwood and Wigney JJ). The various penalties can be adjusted to ensure that the ultimate or aggregate penalty is proportionate to the offending. Ameliorative measures that are available to the Court include making penalties concurrent or reducing the overall burden when the totality principle is applied.
30 The Cahill principle is to be applied separately from and anterior to the final check constituted by the application of the totality principle: Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383 at 396-397; [2008] FCAFC 70 at [41]-[42] (Stone and Buchanan JJ). It does not necessarily require the application of a single penalty for all of the contravening conduct: Cahill at 13 [41]-[42].
31 The totality principle falls for consideration at the end of the process. It requires the Court to stand back and decide whether the aggregate of multiple penalties fixed by it is appropriate for the total contravening conduct involved: see Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36 at 53; [1997] FCA 450 at 49-50 (Goldberg J); Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (2015) 229 FCR 331 at 350; [2015] FCAFC 59 at [40]-[41] (Dowsett, Greenwood and Wigney JJ). The principle is designed to “ensure that the aggregate of penalties imputed is not such as to be oppressive or crushing”: Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61 at 73; [2008] FCA 1426 at [60] (Tracey J). A consequence of the application of the principle is that the aggregate penalty may be reduced if it is considered to be too great.
32 It is open to the Court to receive and act on submissions from the parties as to the amount of any pecuniary penalty to be imposed: see The Civil Penalties Case.
The number of contraventions
33 The Commissioner alleged that there had been seven contraventions of the FW Act on 22 and 29 July 2014 — six by Mr Davies and one by Mr Tadic.
34 It will be convenient to refer to these contraventions as “the first contravention”, “the second contravention” etc, as those contraventions are identified in paragraphs 1, 2, and 3 of the declarations made by the Court.
35 Of the contraventions attributed to Mr Davies, four (the first, second, third and fourth contraventions) were said to have occurred in the course of his entry to the site on 22 July 2014. Each of these four was a contravention of s 500.
36 I summarised the events which gave rise to these contraventions in the liability judgment at [144] and [145]. I then said (at [146]) that these events both “individually and collectively”, constituted conduct which fell below the standard which reasonably could be expected of a permit holder. I concluded that such conduct was “improper” within the meaning of s 500: see [147].
37 At the penalty hearing counsel for the respondents suggested that these passages were open to the construction that I had found a single contravention of s 500 as a result of the totality of Mr Davies’ aberrant conduct at the site on 22 July 2014.
38 Whilst all of the relevant conduct was summarised at [144] and [145], I found that the conduct, “both individually and collectively”, contravened s 500.
39 As a result it will be necessary to impose four penalties for Mr Davies’ contraventions of s 500 on that day.
Section 556
40 The Commissioner alleged that Mr Davies’ conduct at the site on 29 July 2014 gave to rise to contraventions of both ss 497 and 500 of the FW Act. These were the fifth and sixth contraventions.
41 The respondents contended that only one penalty should be imposed in respect of that conduct. They relied on s 556 of the FW Act which relevantly provides that:
If a person is ordered to pay a pecuniary penalty under a civil remedy provision in relation to particular conduct, the person is not liable to be ordered to pay a pecuniary penalty under some other provision of the Commonwealth in relation to that conduct.
42 I dealt with Mr Davies’ contraventions on 29 July 2014 in the liability judgment at [148]-[150].
43 The contravention of s 497 occurred because Mr Davies refused to produce his entry permit when requested to do so. I ventured the observation that such a contravention might also constitute “improper” conduct for the purposes of s 500. The finding that Mr Davies had contravened s 500 was not however founded simply on his contravention of s 497. As appears from [148] other aspects of Mr Davies’ conduct were brought to account in determining his liability under s 500. They included his failure to give notice of his attendance, his failure to comply with a direction that he should leave the site and his subsequent conduct of an inspection of parts of the site in defiance of the direction.
44 It is also to be noted that there are conflicting decisions about whether a mere contravention of one of the requirements, imposed on permit holders by Part 3-4, can constitute a contravention of s 500: see Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The Laverton North and Cheltenham Premises Case) [2018] FCAFC 88 at [6]-[7] (Allsop CJ) and [200]-[201] (White J); cf at [122] (Tracey J); Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (The Footscray Station Case) [2016] FCA 872 at [69] (Tracey J); Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1287 at [174] (White J); Director of the Fair Work Building Industry Inspectorate v McDermott [2016] FCA 1147 at [120] (Charlesworth J).
45 Penalties must be imposed in respect of both contraventions by Mr Davies on 29 July 2014.
Mr Davies
46 On both 22 and 29 July 2014 Mr Davies entered the site at the invitation of the designated health and safety representative. The request for assistance had been made under the Occupational Health and Safety Act 2004 (Vic) (“the Victorian Act”). Mr Davies, as an official of the CFMEU, held entry permits under both the Victorian Act and the FW Act.
47 He proffered various explanations for his failure to produce his FW Act entry permit upon request. He said that he believed that, because he had attended the site, following a request made under s 58 of the Victorian Act, he was not required to produce his Federal permit. No basis for this belief was established. At another point he said that he had not produced his permit because he was on the site for a quick visit and he “thought it would be more than appropriate just to see the problem at hand and just go about business.” I do not find these explanations persuasive. Mr Davies had his permit with him and could have easily have produced it upon request. He was determined not to comply with those requests. On one of these occasions he told the requesting manager to “fuck off”. On another he told the manager to “go away”. He was defiant and dismissive in the face of lawful directions that he leave the site.
48 In July 2014 Mr Davies had not previously contravened provisions of the FW Act, its predecessors or other application industrial legislation.
49 In the absence of any contrition or the provision of any assurances relating to his future conduct, there are no other mitigatory factors which should be brought to account in his favour.
50 Of the four contraventions of s 500 of the FW Act which occurred on 22 July 2014 I regard the first as the most serious. A penalty of $5,000 should be imposed for that contravention.
51 The second contravention warrants a penalty of $2,000.
52 The third warrants a penalty of $3,000.
53 The fourth contravention warrants a penalty of $3,500.
54 In respect of the two contraventions which occurred on 29 July 2014 the following penalties should be imposed:
The contravention of s 497 — $2,000; and
The contravention of s 500 — $3,500.
Mr Tadic
55 Like Mr Davies, Mr Tadic held entry permits under both the Victorian Act and the FW Act.
56 I found that Mr Tadic contravened s 500 of the FW Act at the site on 1 August 2014. This was the seventh contravention.
57 The circumstances in which this offending took place are recounted at [170]-[175] of the liability judgment. Suffice to say that Mr Tadic had acted rudely, aggressively and abusively towards one of the site managers. This verbal attack took place in the presence of others and continued for some minutes. The catalyst was a lawful and reasonable query regarding his presence on the site.
58 Such conduct is to be deprecated and it constitutes a serious contravention of s 500 of the FW Act.
59 Mr Tadic has contravened Federal industrial legislation on previous occasions. The first contravention occurred in 2004 and no penalty was imposed: see Cahill v Construction, Forestry, Mining and Energy Union [2008] FCA 495. In 2008 he was found to have been engaged in unlawful industrial action and coercive conduct and was fined a total of $10,500: see Cozadinos v Construction, Forestry, Mining and Energy Union [2011] FMCA 284; White v Construction, Forestry, Mining and Energy Union [2011] FCA 192.
60 A Full Court has found that he contravened s 500 at another site in the month before the present contraventions occurred: see Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Castlemaine Police Station Case) [2018] FCAFC 15. No penalty has yet been imposed.
61 Mr Tadic has not exhibited any contrition for his contraventions on 1 August 2014. Nor has he offered any assurances as to his future conduct. There are, therefore, no mitigatory factors to be brought to account in determining a penalty.
62 Having regard to all of the circumstances I consider that a penalty of $7,500 should be imposed.
63 The Commissioner has submitted that a personal payment order should be made in respect of the payment of this penalty. Such an order has been framed in accordance with the orders made by the Full Court in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) (No 2) [2018] FCAFC 117. Such an order requires the contravening official to pay the penalty imposed by the Court personally and that he not seek to be compensated by the CFMEU or accept any funds from the CFMEU which are related to his payment of the penalty.
64 The official concerned in The Non-Indemnification Personal Payment Case had what the Full Court described as “a history of significant contravention”. It considered that a personal payment order of the kind which it foreshadowed would “bring home to him, and others in his position, that he, and they, cannot act in contravention of the FW Act, knowing that Union funds will always bail him, or them, out”: see at [40].
65 The official who was the subject of the Full Court’s order had a considerably longer record of contraventions of relevant legislation than has Mr Tadic. No pecuniary penalties have been imposed on Mr Tadic for a decade.
66 On one reading of the Full Court’s reasons a case could be made out that such orders could or should be made in all cases in which officials have been found to have contravened pecuniary penalty provisions of the FW Act.
67 I do not consider that the Full Court’s reasons are to be so understood. The Court’s power to impose pecuniary penalties is a discretionary power. There will, inevitably, be circumstances in which the Court will consider that the making of a personal payment order is not required. The Full Court gave particular weight to the relevant officials’ long history of serious contraventions in deciding to make such an order.
68 I am not persuaded that Mr Tadic’s previous misconduct has risen to a level which would justify the making of a personal payment order at the present time. It is to be hoped that the imposition of the penalty in this case causes him carefully to consider his responsibilities as a permit holder under the FW Act and not repeat the disgraceful conduct in which he engaged on 1 August 2014.
The CFMEU
69 The CFMEU’s liability derives from that of Messrs Davies and Tadic.
70 The CFMEU is asset rich and well resourced. The union’s Victoria and Tasmanian Divisional Branch of the Construction and General Division had assets valued at over $58 million on 31 March 2017. In 2016 it received revenue of almost $31 million.
71 The union is registered as an organisation under the Fair Work (Registered Organisations) Act 2009 (Cth). As such the union enjoys benefits and undertakes responsibilities as a participant in the federal system of industrial relations.
72 As has been customary in cases involving contraventions of the FW Act the Commissioner has filed a table of the CFMEU’s previous contraventions of civil penalty provisions in the FW Act and related industrial legislation. The table reveals some 137 cases in which penalties (in many instances multiple penalties) have been imposed for such contraventions over a 15 year period between 1999 and 2014. Of these cases 24 related to breaches of requirements attaching to rights of entry. Twenty of those cases involved conduct which had occurred prior to the contravening conduct in this proceeding and eight of those judgments had been delivered before the relevant events occurred.
73 Despite this repeated and ongoing misconduct on the part of its officials, the CFMEU has failed to acknowledge any wrong doing or to take corrective steps to ensure that such conduct ceases. These failures lead to the irresistible inference that the officials are acting in accordance with the instructions or policies adopted by those responsible for the governance of the organisation. The union has adopted the attitude that it will not comply with any legislative constraints, placed on its operations, with which it disagrees. Such an approach is an anathema in a democratic society. As Dowsett and Rares JJ recently said in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 249 FCR 458 at 481; [2017] FCAFC 53 at [100]-[101]:
100 In a liberal democracy, it is assumed that citizens, corporations and other organisations will comply with the law. Such compliance is not a matter of choice. The community does not accept that a citizen, corporation or other organisation may choose to break the law and simply pay the penalty. The courts certainly do not accept that proposition. Such acceptance would pose a serious threat to the rule of law upon which our society is based. It would undermine the authority of Parliament and could lead to the public perception that the judiciary is involved in a process which is pointless, if not ridiculous.
101 The Parliament’s purpose in legislating to provide that particular proscribed conduct will attract a civil penalty was to deter persons, including but not limited to trade unions or corporations, from engaging or continuing to engage in such conduct. A civil penalty would lose its utility if the person on whom it was imposed simply treated it as a cost of continuing to carry on with the very conduct that had just been penalised.
74 Given this long history of recidivism there will, inevitably, be cases in which it will be appropriate, in the exercise of its discretion, for the Court to impose the maximum available penalty on the CFMEU because of the extensive litany of blatant contraventions: see Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) [2018] FCAFC 126. Unless the Court adopts such an approach when necessary to mark its dissatisfaction within this serial misconduct, the objectives of the civil penalties regime will not be realised. In other cases penalties at the high end of the available range will be appropriate.
75 I regard each of the six contraventions by its officials, for which the CFMEU is liable, to be serious contraventions by the union. In assessing appropriate penalties for the CFMEU regard must be had to the long history of contravening conduct by its officials and the cumulative impact of that offending in assessing the extent of its recidivism. The longer this misconduct continues the more likely it is that the Court will impose penalties falling at the high end of the available range. The union’s level of culpability may well, as a result, be disproportionately more severe than that attributed to individual officials.
76 I note that the union is not liable for the fifth contravention: see the liability judgment at [195].
77 The following penalties will be imposed on the union:
The first contravention — $50,000.
The second contravention — $30,000.
The third contravention — $35,000.
The fourth contravention — $40,000.
The sixth contravention — $40,000.
The seventh contravention — $50,000.
78 I have given effect to the totality principle in fixing these penalties. Although the aggregate penalty is significant it is proportionate to the gravity of the offending which forms part of a long continuum. It involves an on-going and deliberate disregard of the requirements of the FW Act with which the CFMEU disagrees. The organisation is prepared to pay any penalties imposed by the Court and treat such expenditure as a cost of pursing its industrial ends. A significant penalty is necessary in order to deter future misconduct of a similar kind to the extent that the monetary limits, prescribed by the FW Act, permit.
I certify that the preceding seventy-eight (78) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Tracey. |
Associate:
