FEDERAL COURT OF AUSTRALIA

Maritime Union of Australia v Fair Work Ombudsman [2015] FCAFC 120

THE COURT ORDERS THAT:

1.    The appeal be allowed in part.

2.    Order 2 made by the Court on 27 March 2015 be varied by substituting $134,000 for $352,100 and substituting $196,000 for $371,200.

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

REASONS FOR JUDGMENT

THE COURT

Introduction and background

1    This is an appeal under s 24 of the Federal Court of Australia Act 1976 (Cth) (FCA Act) against orders by way of compensation made by a judge of the Court, pursuant to s 807(1) of the Workplace Relations Act 1996 (Cth) (WR Act) and s 545(2)(b) of the Fair Work Act 2009 (Cth) (FW Act) against the appellant, Maritime Union of Australia (MUA), in proceedings brought by the respondent, Fair Work Ombudsman (FWO): see Fair Work Ombudsman v Skilled Offshore (Australia) Pty Ltd [2015] FCA 275 (Compensation Judgment). This order followed an earlier finding by the primary judge that the MUA had contravened provisions of the WR Act and the FW Act by engaging in unlawful conduct in relation to the proposed employment of Mr Bruce Love and Mrs Lynne Love and their proposed membership of the MUA: see Fair Work Ombudsman v Offshore Marine Services Pty Ltd (No 2) [2013] FCA 943 (Liability Judgment).

2    The relevant contraventions involved not only the MUA, but also Offshore Marine Services Pty Ltd, now called Skilled Offshore (Australia) Pty Ltd (OMS), which carried on a business of supplying crew to vessels engaged in the off-shore oil and gas industry. The essence of the contraventions was that the MUA persuaded (to use an neutral term) OMS to use a system under which only persons who were MUA members would be placed into positions on such vessels and persons who were not MUA members would not be offered work on such vessels. The Loves were not MUA members. One of the OMS officers, who was responsible for placing crew on vessels, wanted to place the Loves as stewards on off-shore vessels, but could not because they were not members of the MUA. The Loves attempted to join the MUA, but were refused; the union took the view that it had sufficient membership numbers. The Loves were thereby denied the opportunity of working as stewards or cleaners on off-shore vessels from 2009.

Relevant provisions

3    The relevant legislation at the time provided as follows.

WR Act provisions

4    Section 792(1)(d) of the WR Act relevantly provided that an employer must not, for a prohibited reason, refuse to employ a person as an employee. The phrase “prohibited reason” included the reason that the person was not a member of an industrial association: s 793(1)(b) of the WR Act.

5    By s 728(1) of the WR Act, a person who was involved in a contravention of such a provision was to be treated as having contravened that provision. The phrase “involved in” was satisfied if (and only if) the person: aided, abetted, counselled, or procured the contravention: s 728(2)(a); induced the contravention, whether by threats or promises or otherwise: s 728(2)(b); was in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention: s 728(2)(c); or conspired with others to effect the contravention: s 728(2)(d).

6    By s 796(5)(a) of the WR Act, an industrial association must not advise, encourage, or incite an employer to take action in relation to a person that would, if taken, contravene s 792(1).

7    By s 797(3)(a) of the WR Act, an industrial association must not take, or threaten to take, action having the effect, directly or indirectly, of prejudicing a person in his or her prospective employment; by s 797(3)(b) it must not advise, encourage, or incite a person to take action that has the effect, directly or indirectly, of prejudicing another person in that other person’s prospective employment for reasons that include that the other person is not a member of the industrial association: s 797(3)(d).

8    Sections 792(1)(d) and 797(3)(a) were civil remedy provisions: ss 792(2) and 797(4).

9    Section 807 of the WR Act provided, relevantly, for two types of relief on contravention by a party of a civil remedy provision: a pecuniary penalty: s 807(1)(a); and compensation for damage suffered by a person as a result of the contravention: s 807(1)(b).

FW Act provisions

10    Section 346 of the FW Act relevantly provided that a person must not take adverse action against another person because that other person was not a member of an industrial organisation. The phrase “adverse action” included a prospective employer refusing to employ a prospective employee: s 342(1) item 2 of the FW Act; and an industrial organisation taking action that had the effect, directly or indirectly, of prejudicing a person’s prospective employment: s 342(1) item 7 of the FW Act.

11    By s 550(1) of the FW Act, a person who was involved in a contravention was taken to have contravened the provision. The phrase “involved in” was given the same meaning in s 550(2) of the FW Act as it had been given in s 728(2) of the WR Act (as set out in [5] above).

12    Section 346 is a civil remedy provision: s 539(1) and (2) item 11.

13    Sections 545 and 546 of the FW Act provided, relevantly, for the same two types of relief on contravention by a party of a civil remedy provision: a pecuniary penalty: s 546, and compensation for loss that a person has suffered because of the contravention: s 545(2)(b).

Essential facts

14    The following background is based on the reasons of the primary judge. Some of the primary judge’s factual findings are challenged. Nevertheless, the following is a convenient explanation of the dispute.

15    In January 2009, the Loves attended a meeting with OMS at which they discussed the prospect of employment as cleaners or stewards on off-shore vessels which were supplied labour by OMS. At that meeting, the Loves were told that OMS would be interested in hiring them if they first completed several training courses and passed a medical assessment conducted by OMS. Sometime between 23 January 2009 and 30 January 2009, OMS sent pre-employment forms to the Loves which they completed and returned on or about 30 January 2009. By 20 February 2009, the Loves had satisfied the conditions specified in the January meeting. On 25 February 2009, OMS advised the Loves that they would need to satisfy a further condition of employment, namely acquiring membership of the MUA. The Loves applied to the MUA on 25 February 2009, but were unsuccessful. At the time the OMS Employment Practice Guide specified that membership of the MUA was a prerequisite for employment in any areas covered by the MUA. During this same period, the MUA had a practice of granting new memberships to persons offered employment with OMS only when there were no existing MUA members available to take up that employment.

16    The primary judge found that the Loves persisted with their attempts to gain membership of the MUA throughout 2009, but remained unsuccessful and therefore were never employed by OMS, despite the fact that OMS had employment available and wanted to employ them: [53] of the Liability Judgment. His Honour also found (at [5]-[6] of the Liability Judgment) that it was the objective of the MUA that its current members would receive preference in employment with OMS; that both organisations were aware of the other’s practices; that the MUA’s objective depended on the maintenance by OMS of its practice; that the MUA had effectively procured the instigation and maintenance by OMS of that practice; and that the two practices were deliberately inter-related and inter-dependent.

17    On 28 June 2011, the FWO filed an application against OMS and the MUA in respect of various contraventions of the WR Act and FW Act and sought, by way of relief, declarations and penalties. Prior to the hearing, OMS admitted contraventions of s 792(1)(d) of the WR Act and s 346(a) of the FW Act (Fair Work Ombudsman v Offshore Marine Services Pty Ltd [2012] FCA 498; 219 IR 435), specifically that OMS had refused to employ the Loves because of, or for reasons including, a prohibited reason (namely, that they were not an officer or member of an industrial association) and that this was an adverse action. The trial therefore continued only in relation to the liability of the MUA. At trial, the primary judge found that the MUA was involved in these contraventions by OMS and that therefore it was to be taken as having committed the same contraventions (at [164]-[167] of the Liability Judgment) as it had advised, encouraged, or incited OMS to establish the relevant employment practice (including threatening to take industrial action against OMS, with the intention to coerce them) and to not employ the Loves. His Honour also found that the MUA had independently and directly contravened s 346(a) of the FW Act and ss 765(5)(a), 797(3)(a), and 797(3)(b) of the WR Act by its conduct in advising, encouraging, or inciting OMS to maintain and apply its employment practice of only employing MUA members, and by its conduct in not granting and refusing the Loves union membership, and advising, encouraging, or inciting OMS not to employ the Loves because they were not members of the MUA (at [168]-[171] of the Liability Judgment).

18    There is no appeal from the findings that the MUA had contravened the WR Act and the FW Act.

19    Following these findings, the FWO made an interlocutory application, under r 8.21 Federal Court Rules 2011 (Rules), seeking additional relief in the form of a compensation order for the Loves against the MUA. The primary judge granted leave to file and serve an amended application: see Fair Work Ombudsman v Offshore Marine Services Pty Ltd (No 3) [2013] FCA 1391. The MUA then applied for leave under r 15.05 of the Rules to file a notice of cross-claim in which it sought to recover contribution from OMS in respect of any liability to pay compensation to the Loves, with leave being granted: see Fair Work Ombudsman v Offshore Marine Services Pty Ltd (No 4) [2014] FCA 249.

The judgment under appeal

20    On 27 March 2015, the primary judge heard the compensation claim. His Honour noted that the task of fixing compensation under s 807(1)(b) WR Act and s 545(2)(b) FW Act was a statutory one, rather than one arising from general law, and that the level of compensation awarded should be no greater than what is “reasonable” in the circumstances. His Honour further noted that the making of a compensation order is confined by the statutory precondition that there has been loss or damage suffered because of, or as a result of, the contravention; that there must be “an appropriate causal connection between the contravention and the loss claimed”: Australian Licenced Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd [2011] FCA 333; 193 FCR 526 at [423] per Barker J. The primary judge concluded, based on the evidence of OMS employees, that a reasonable assessment of compensation in the case would be the amount of income that the Loves would have expected to receive as cleaners or stewards over the relevant period; that they would have been covered by the applicable enterprise agreement pay rates for that period; and that it was likely that they would have been engaged in ongoing work (at [74]-[78] of the Compensation Judgment). His Honour further found that, based on the efforts which the Loves had gone to in order to attempt to secure employment with OMS, they would not have readily given up such employment (at [110]), and therefore calculated their loss based on possible employment for 6 years for Mr Love and 5 years for Mrs Love (at [138]). His Honour set out two separate approaches for calculating the appropriate level of compensation and took the average figure from the two approaches in order to reach his compensation figure of $352,100 for Mr Love and $371,200 for Mrs Love (see [118]-[150] of the Compensation Judgment).

21    In terms of contribution between the MUA and OMS, his Honour found that the appropriate proportion was the MUA as to two-thirds and OMS as to one-third, in light of the fact that the MUA had been the one to persuade OMS to follow the OMS employment practice and had also been the one to refuse to permit the Loves to join the MUA, with both of these actions being critical in causing the Loves’ loss (see [159]-[164] of the Compensation Judgment).

22    The MUA filed a notice of appeal from this decision on 16 April 2015, and both OMS and the MUA filed interlocutory applications seeking a stay of the orders from the Compensation Judgment. This stay was granted by a judge of the Court on 22 April 2015, pending the determination of the appeal.

The appeal – introductory comments

23    There were three grounds of appeal. Grounds 1 and 2 asserted that the primary judge erred by finding at [82], [112], and [138] of the Compensation Judgment, and [53], [104], [116], [166]-[168], and [169]-[171] of the Liability Judgment, that:

(a)    because of, or as a result of, any contravention for which the MUA was responsible, each of Mr Love and Mrs Love was not employed by OMS for periods of six and five years, respectively; and

(b)    it was reasonable to compensate Mr and Mrs Love for those respective periods, less a 20% discount for the vicissitudes of life.

24    Ground 3 asserted that the primary judge erred by finding at [119] of the Compensation Judgment, and by finding without evidence or without probative evidence:

(a)    that the Loves would have been above average employees; and

(b)    that it was appropriate to exclude from the calculations casual stewards who for whatever reason did not work much in any year; and

(c)    that it was therefore appropriate to calculate the Loves’ potential loss by reference to a 30% uplift from the average; and

his Honour, therefore, erred (at [145]-[149] of the Compensation Judgment) in calculating the Loves’ compensation by reference to a figure so derived.

25    Until the oral submissions in reply (supplemented by brief written submissions after the hearing of the appeal) there was no substantive debate on appeal about the correct legal principles which were applicable. In particular, it was not submitted that the primary judge had misunderstood or mis-stated any principle of law. Rather, the appeal was substantially one concerned with factual findings. The latterly formulated legal question (and ensuing debate) concerned the proper approach to the assessment of compensation under provisions such as s 792 of the WR Act and s 346 of the FW Act, the question of what had to be proved on the balance of probability, and what was available to be assessed as a loss of opportunity.

26    During argument it had appeared to be common ground that the proper approach was to view the denial to the Loves of the opportunity to be placed by OMS on vessels as the relevant prejudice and loss or damage suffered by them, which had been caused by the contraventions. The task was then to value that prejudice, loss, or damage in order to inform the order for compensation. However, in closing oral submissions, and written submissions filed after the hearing, the MUA put as its ultimate position the submission that the relevant loss or damage that had to be proved on the balance of probability was the loss of individual work contracts. It was argued that the Loves would have been casual employees and therefore could only show loss if they showed that they had lost particular jobs; that their loss crystallised only upon being denied a particular casual contract.

27    We reject that narrow approach.

28    The task of the primary judge, having found the relevant contraventions, was to assess the compensation, if any, that was causally related to those contraventions. That involved not an examination of what did happen, but an assessment of what would or might have occurred, but which could no longer occur (because of the contraventions). Subject to any statutory requirement to the contrary, questions of the future or hypothetical effects of a wrong in determining compensation or damages are not to be decided on the balance of probability that they would or would not have happened. Rather, the assessment is by way of the degree of probability of the effects – the probabilities and the possibilities: Malec v JC Hutton Pty Ltd [1990] HCA 20; 169 CLR 625 at 642-643; Sellars v Adelaide Petroleum NL [1994] HCA 4; 179 CLR 332 at 352-356. The above proposition must be qualified by the recognition that, where the fact of injury or loss is part of the cause of action or wrong, it must be proved on the balance of probability. Compensation is generally awarded for loss or damage actually caused or incurred, not potential or likely damage: Tabet v Gett [2010] HCA 12; 240 CLR 537; Sellars at 348; Wardley Australia Ltd v Western Australia [1992] HCA 55; 175 CLR 514 at 526; that is equally so here under ss 807(1)(b) and 545(2)(b).

29    Difficulties sometimes arise in relation to the distinction between these two principles: see Sydney South West Area Health Service v Stamoulis [2009] NSWCA 153, discussed in Evans v Queanbeyan City Council [2011] NSWCA 230 at [54] per Allsop P, [59]-[61] per Hodgson JA, and [100]-[103] per Basten JA. Here, the statutes provide for an order requiring the defendant to pay an amount “as compensation for damage suffered by the other person as a result of the contravention”: s 807(1)(b) of the WR Act; and an order “awarding compensation for loss that a person has suffered because of the contravention”: s 545(2)(b) of the FW Act (emphasis added). Thus, there must be proved, on the balance of probability, to have been some “damage suffered…as a result of the contravention” and some “loss…suffered because of the contravention.” The wording is not dissimilar to the wording and structure of s 82(1) of the Trade Practices Act 1974 (Cth), which was dealt with by the High Court in Sellars: “A person who suffers loss or damage by conduct of another person that was done in contravention of a provision…may recover the amount of the loss or damage.”

30    What such damage or loss is (in the present context) that must be proved on the balance of probability will be governed by an understanding of the statute. Given the evident protective purpose of provisions such as s 792 of the WR Act and s 346 of the FW Act, there would be no sensible statutory purpose in denying a proposition that the damage or loss in relation to prospective employment can be constituted by the loss of an opportunity or chance to be considered for employment as a result of, or because of, the contravention (which then has to be given a value to inform the order for compensation); and there would be no sensible statutory purpose in limiting the compensation to damage or loss proved by reference to the proof of events that would, on the balance of probability, have or have not occurred. Thus, if the relevant contravention by a party has prejudiced a person in prospective employment, it would conform entirely with the statutory purpose to identify the damage or loss by reference to, indeed as, that prejudice. Depending on the circumstances, such prejudice may best be seen as the loss of the chance or opportunity of particular employment. That certainly was the relevant prejudice here, and it can be seen to have been proved on the balance of probability – indeed, to the point of demonstration.

31    The Loves were not seeking some one-off casual work for a day, a week, or a month. They were seeking to be placed by OMS as regular casual stewards on off-shore vessels. OMS had a number of permanent employees whom it placed on vessels and it also had a number of casual employees on its books. The former were paid as full-time employees, the latter were paid as and when they worked. The evidence was, however (as will be clear below), that people could work as casual stewards for long periods of time.

32    What the contraventions by the MUA caused to the Loves was the denial of the opportunity, from 2009 and continuing, to be considered for employment as casual stewards. That was the clearest prejudice to their prospects of employment; it was the clearest damage to their capacity to obtain work. There could be no doubt that, in commercial terms, this was the denial of a valuable opportunity. No different conclusion should be reached in the context of these statutes; indeed, the evident purpose of the statutes conforms with such a conclusion: the protection of freedoms of workers in the workplace from the exercise of power or influence in proscribed manners by both employers and industrial organisations.

33    The point can be illustrated by the following example. If an employer had 10 valuable jobs that it proposed to give by ballot or lottery and 25 people applied, 13 of whom were union members, 12 of whom were not, and the union forced the employer to ballot the jobs only among the 13 union members, could it be said that the 12 non-unionists had not suffered loss or damage by being denied the opportunity to participate in a ballot for a valuable job? Clearly they had been. Their compensation would be assessed by reference to the loss that they had suffered – the loss of the opportunity.

34    The assessment of the value of the loss of an opportunity may involve an evaluative judgment that calls for restraint in appellate review: McCartney v Orica Investments Pty Ltd [2011] NSWCA 337 at [126]-[127]; Horne v Cranney [2011] QCA 149 at [9]; Hammond Worthington v Da Silva [2006] WASCA 180 at [128]; Nigam v Harm (No 2) [2011] WASCA 221 at [259]; Falkingham v Hoffmans (a firm) [2014] WASCA 140 at [47]-[49]; Wainwright v Barrick Gold of Australia Ltd [2014] WASCA 15 at [88]-[90]. It may also involve factual analysis and findings of a non-evaluative character, and it will almost necessarily involve a degree of speculation. Thus, how (that is, by what methodology), and with what ultimate result, an evaluation is made may involve questions of choice, and judgments about which reasonable minds may differ.

35    It is also relevant to recall that all evidence is weighed according to the proof which it is in the power of one side to have produced and in the power of the other side to have contradicted: Blatch v Archer (1774) 1 Cowp 63 at 65; 98 ER 969 at 970; Hampton Court Ltd v Crooks [1957] HCA 28; 97 CLR 367 at 371-372; Cullen v Welsbach Light Company of Australasia [1907] HCA 3; 4 CLR 990 at 1013-1014; see also JD Heydon Cross on Evidence (10th Australian Edition) at 312-313 [7160] and the cases at footnote 132.

The reasons of the primary judge and the criticisms thereof

36    It is convenient to deal with the primary judge’s reasons in the two judgments. Much of the discussion of the evidence and the arguments in the Liability Judgement is of little relevance to the appeal, there being no complaint about the conclusions of the primary judge on the issue of the MUA’s liability for the contraventions.

The Loves – a history of work

37    Bearing in mind the two considerations to which we have referred, it is convenient to begin by describing Mr and Mrs Love and their desire to work as stewards or cleaners on off-shore vessels.

38    For the description of the Loves, we have supplemented the primary judge’s findings with material from their evidence.

39    At the time of the events in 2009 Mr Love was 51 years of age. He had never been other than in full-time work. He began his working life as an apprentice plumber in 1973. He worked as a plumber until 1988 in Victoria and New South Wales. Then he and Mrs Love bought a bakery franchise business in Wangaratta, which they ran successfully for five years until 1993 when they sold the business. They then bought a wholesale cut flower business and ran it for a short time, losing “a lot of money”. Thereafter, in late 1993, they purchased and ran a party hire business in Wangaratta until they sold it in 1998. They then bought a health food shop and café which they ran until they sold it in 2000. Mr Love also worked full-time in 1999 to 2000 for a cleaning and packaging company. From 2000 to 2006, Mr Love worked full-time as a correctional services officer with the Victorian Correctional Service; during this time he also did additional work at the cleaning and packaging company, and at a medical transport company, on a casual basis until 2005. In 2006, the Loves followed their daughter to Queensland where she was studying. Mr Love underwent retraining to become a correctional services officer with the Queensland Correctional Services. While he was retraining, he obtained part-time work as a barman at an RSL club. After retraining, he became a casual correctional service officer and a casual security officer at a resort. In 2007, Mr and Mrs Love obtained work at a retirement village as onsite managers. Part of Mr Love’s duties in this work was the preparing of meals for more than 50 residents every day, office administration, property maintenance, and other supporting duties. In 2008, he and Mrs Love began to work as sales advisors selling units in a retirement complex. In late 2008 the Loves moved to Perth where their daughter now lived. From 2009, Mr Love and Mrs Love undertook various jobs: in 2009, Mr Love worked as an assistant manager of a food business; from late 2009, they both worked as assistant managers at a motel; later, from 2010, they worked as onsite managers at another motel; and from late 2011, Mr Love worked as a full-time manager and caretaker at apartments.

40    Mrs Love, who is a year or so younger than Mr Love, like him, has also always worked, except for a period of a few years while their daughter was young. After commencing work in 1977 as a clerk, she became a hairdresser, working as such in Wangaratta from 1980 until 1986, running her own salon. From 1986 to 1988, when the Loves were in Orange, New South Wales, she did not engage in paid work but instead was caring for their daughter while she was an infant. In addition to the activity referred to earlier, when the Loves owned the flower business in 1993, Mrs Love also bought and ran a hairdressing salon. When the flower business failed, bankruptcy threatened, but the Loves sold their house and the hairdressing salon to clear their debts. From 2000 to 2005, while Mr Love was working as a correctional officer, Mrs Love worked full-time as a manager and sales assistant at a health food store as well as undertaking additional part-time work. After they went to Queensland, Mrs Love once again worked in a health food shop, ran a cleaning business, undertook child care work, and worked as an administrative assistant in a company. From 2009, in addition to the work with her husband to which we have referred, Mrs Love worked as a sales assistant and a caretaker and hostess at apartments.

41    The above detail assists in recognising the importance of the findings of the primary judge about the Loves. They were hard-working and determined people. After the one financial failure of their business in the 1990s, they had been left, by 2008, in their early fifties, with little savings and no significant assets, despite a lifetime of hard work. Their experience did not involve any contact with a seafaring life, but they were people who had worked both with their hands and in white-collar occupations. They had undertaken the responsibilities and organisational challenges of running businesses; they had adapted in a versatile way to circumstance and adversity; and their experience was broad and included food preparation, catering, and hospitality, to a degree.

42    As the detail of the evidence and findings reveals, the Loves saw the opportunity of making over $100,000 per annum each as an important opportunity for them to earn enough money to give them some security for the future (including purchasing a home and building a superannuation fund). This was why they wanted the opportunity offered by OMS to work on off-shore vessels from 2009 for a number of years.

The Liability Judgment

43    The following factual findings are relevant to the appeal. Ms Tamianne McSherry (née Wright) was one of ten crewing officers at OMS. She had direct responsibility for placing employees (including as stewards) on off-shore vessels.

44    In January 2009, Mrs Love contacted OMS by telephone and spoke to Ms McSherry and said that she and her husband were looking for work as cleaners. The Loves came in to discuss possible opportunities. Mrs Love, having been told by Ms McSherry that they needed to be members of the MUA, rang the MUA and was told that she needed a job before she could become a member. They were then told by Ms McSherry that they would need to undertake various training courses and a medical examination and obtain a maritime passport. During January and February, the Loves, at some expense, completed all these relevant training courses. Mr Love initially failed a medical examination because of his weight, but he lost weight and passed a later examination.

45    On 25 February 2009, Ms McSherry told the Loves that they should go to the MUA offices to become members. They did so. They were refused membership. The primary judge found the following at [84] of the Liability Judgment:

The evidence discloses that, as at 25 February 2009, the MUA, through Cain, knew that OMS wanted to employ the Loves but, in accordance with the OMS employment practice, would not do so unless and until each had MUA membership. Cain was not prepared to allow that to happen then or later. As I have already found, MUA officials had advised Del Rosso not to send prospective employees to the MUA office to sign up as members of the MUA as it already had enough members.

46    In February 2009, Ms McSherry was trying to place the Loves on vessels crewed by OMS. To the extent that Ms McSherry was an employee of OMS responsible for employee placement, she, and thus OMS, wanted to place the Loves on off-shore vessels as stewards.

47    At [53] of the Liability Judgment, the primary judge found the following:

During December 2008, the Loves moved from Victoria to Perth. From January to December 2009, they sought employment with OMS as cleaners and/or stewards but as they could not obtain membership with the MUA, despite all their efforts to do so, they were never employed by OMS although it actually wanted to employ them and had employment available for them.

48    This paragraph contains one of the factual findings challenged: that in 2009 OMS wanted to employ the Loves and had employment available for them. It was a summary finding. It will be analysed in the context of the Compensation Judgment. It may be correct to criticise the finding that there was employment available before August 2009, but there was no error in stating broadly at this point that there was employment available for them, at least from August 2009. It should be noted here that the cross-examination conducted by counsel for the MUA at the liability hearing reflected instructions (or at least an assumption) that the Loves would have been given work as stewards except for their disqualifying characteristic of lack of union membership (see [89] below).

49    Various other paragraphs of the Liability Judgment are criticised in the notice of appeal: [104], [116], [166]-[168], and [169]-[171]. It is unnecessary to set these paragraphs out in full. It is sufficient to set out the terms of the challenge in the written submissions: that the primary judge erred in finding that:

but for the Contraventions, the Loves would have obtained employment with [OMS] from 1 August 2009.

The Compensation Judgment

50    After setting out at [69]-[78] the general principles as to the operation of the statutory provisions, about which no complaint was made, the primary judge turned to the question of the quantum of the compensation.

51    At [82] the primary judge made the following findings:

The figures put forward by the applicant proceed on the basis that the Loves would have been employed by OMS from 1 March 2009. However I find that they would have likely commenced in the position from 1 August 2009. Whilst the Loves completed the pre-requisite courses and qualifications by late-February 2009, they most likely would have secured a position in the second half of 2009.

As indicated above, this finding is challenged.

52    The primary judge approached compensation as follows. He used and then averaged the results of two approaches. The first approach was to take annual remuneration for a casual cleaner or steward of $109,886.40 p.a. Mr Love said he intended to work for 5 to 10 years. His Honour found that the Loves would likely have commenced work in August 2009: [82] (as set above at [51]). The primary judge took the figure of $109,886.40 and extrapolated it to the end of 2014 (5 years) deducting in each year what Mr Love in fact earned. This ignored any potential pay rises or the possibility of earning a higher steward’s remuneration: [86] and [87]. This led to a “potential past loss” of basic income of $326,771.07, up to 30 June 2014.

53    At [89] the primary judge noted the argument of the FWO that a further one year’s loss should be allowed for:

Having regard to the vicissitudes of life, including the possibility that he may have stayed in employment for up to ten years, weighed against an earlier loss of employment or departure, the applicant submits that a further one year’s loss should be allowed for based on the loss for the year ending 30 June 2014.

He later accepted that argument (at [138]-[140] Compensation Judgment): see [71] and [75] below.

54    Using the same first approach in respect of Mrs Love (at [90]-[97] of the Compensation Judgment) and recognising that she had lower actual earnings from 2009 to 2014 this led to a calculation of “potential past loss” for her, up to 30 June 2014, of $403,773. No further years were sought in relation to Mrs Love: [97].

55    At [98]-[100] of the Compensation Judgment the primary judge recognised that it was a relevant factor that the Loves would have been casual employees and would have been terminable on short notice.

56    At [101]-[103] the primary judge recorded the submission of the MUA that it was likely that the difficulties of conditions at sea would have meant that the Loves would not have been willing to remain in employment. The MUA pointed in this submission to aspects of the Loves’ employment after 2008 that was said to reveal an unwillingness to persevere through adversity. It also pointed to the likely unwillingness of the Loves to be apart for long periods on different vessels.

57    At [104] and [105], the primary judge discussed the evidence of Mr Caldwell from OMS whose affidavit sought, amongst other things, to describe the difficulty of life at sea and conditions on board the vessels. The primary judge said:

[104]    Mr Stuart Caldwell, Operations Manager at OMS, was called by OMS. His concessions under cross-examination softened the harder edges of his written evidence. He described, in his oral testimony, conditions on OMS vessels, which included air-conditioning, as ranging from good to excellent. Part of his role at OMS is to inspect vessels to ensure that conditions for employees are satisfactory. He said the company had key people on these vessels working towards providing a very good environment for workers. Conditions on vessels had been getting better over the last ten years but particularly so in the last five to six years. Rosters of four weeks on, four weeks off were, he said, unremarkable amongst “Fly In Fly Out” (FIFO) workers in Western Australia. Nonetheless he said that living space on board the vessels was limited. In one sense this is self-evident.

[105]    There was evidence that some stewards had been working for OMS for 10 years and more. Mr Caldwell agreed that it was by no means unknown for people to be working in such jobs “year in year out”. Some workers, on the other hand, stayed for only short periods. Mr Caldwell suggested that it was a shock for some stewards, when they first go offshore, to see how hard the work is.

58    At [107]-[119], the primary judge gave consideration to the various factors that he saw as relevant. Importantly, at [107]-[109], he found the Loves to be determined to obtain employment on a vessel with OMS, with such a conclusion being supported by: their willingness to spend their own funds in obtaining the required training; their work history which revealed “a tenacious determination to overcome personal and financial adversity”, and “a very strong work ethic”; and their clear aim and determination to provide for their own future. He described them as “salt of the earth people”, with no sense of “entitlement”. These findings are important, and they are further illuminated by the detailed work history that we have already set out. They are findings that depend on the assessment by the trial judge of the character of these people judged from seeing them give their evidence. Whilst it can be accepted that their expressed determination as to staying with these jobs for years, if offered, should be weighed against the objective possibilities of the effect of the rigours of life at sea and extended separation on even determined people, the assessment of the determined character of the Loves is important.

59    At [111] the primary judge recognised expressly that there was a period in 2009 of economic difficulty, that not everyone who wanted employment was rostered on (noting that in December 2009, there were 20 stewards waiting to be rostered on by OMS), and that the work was, to a degree, seasonal. However, at [112] the primary judge found as follows:

I do not know anything of the characteristics of those MUA members. What I have found both in the MUA Liability Judgment and reaffirmed in the evidence of Ms McSherry upon the present application is that she was impressed with the Loves and wanted to employ them as stewards on vessels. I find that this would have occurred. It is no answer to say that OMS preferred experienced personnel. The fact is, despite this, and the existence of some “beached” MUA members, Ms McSherry wanted to employ them. Had this occurred they quickly would have gained experience. The Loves had experience in hospitality. They had together for a period run a café.

60    As mentioned, this finding that they would have been employed is challenged.

61    At [113] the primary judge made findings rejecting the characterisation of the work as difficult or abnormal:

I do not accept the MUA’s characterisation of the job of steward on a vessel as difficult and abnormal. It was but an attempt to paint the bleakest possible picture of such work by the MUA. By its description it was not technically difficult or physically arduous. Whilst work rosters of five weeks on and five weeks off, or similar, may not be the norm, at least in Western Australia, for many years now, such rosters have become a way of life for many FIFO workers employed in the northwest of the State. It should not be thought of necessarily as an obstacle to a conclusion that the Loves would have been able to undertake such work. The position is neutral. Some might not like it. Others might be attracted to a regime that gives them relatively high paid employment and effectively up to 6 months paid leave a year.

62    There is no challenge to these findings.

63    At [114], the primary judge noted that, in the past, the Loves had been prepared to be separated by their work.

64    At [115]-[117], the primary judge discussed some statistical evidence led through the affidavit of a solicitor (Ms Grylls), a “commercial analyst” (Mr Clay), and a Ms Williams. These statistics (not explained in the evidence) gave information as to periods of employment, number of employed persons, and remuneration. At [116] the primary judge found that the annualised median band of remuneration for stewards fell between $60,000 and $180,000, recognising that stewards sometimes worked for periods of less than a year. His Honour said the following at [117]:

As I said, I know nothing of why some stewards worked for such short periods. Perhaps they were itinerant and were just passing through. Perhaps they became ill. There are any number of reasons. However, there was no evidence as to such matters.

65    There was no complaint in the notice of appeal or written submissions on appeal about the findings in [116], although oral submissions were put as to a lack of reliability of annualising monthly figures.

66    At [118] the primary judge made clear the basis of his first approach: that it would “involve an assumption that the Loves would have worked as full-time casuals but apply a discount to take into account the probabilities that they would not have actually worked full-time.” (emphasis added)

67    At [119] the primary judge described his second approach as follows:

The second approach will assume that in the relevant periods each would have earned 30% more than the average of wages earned by casual stewards. I do this for two reasons. First, it is readily apparent that the income casual stewards who for whatever reason did not work much in any year can significantly reduce the averages. Second, I regard the Loves as people who for the reasons I have described would have been above average employees.

68    These findings are challenged by ground 3 of the notice of appeal.

69    In [120]-[144], the primary judge applied the first approach to each of Mr and Mrs Love.

70    At [120]-[137] the primary judge examined the various allowances available under the relevant enterprise agreement that could, as his Honour said at [137], “have figured in tens of thousands of dollars in additional pay”. These allowances were not taken into account. The clear purpose in their consideration was to ensure that the base sum, from which the past potential loss had been calculated ($109,886.40), could be considered as conservative. No challenge is made on appeal to any part of [120]-[137].

71    At [138] the primary judge said the following:

The Court is required to do the best it can. In the case of Bruce Love I find that a period of six years is a reasonable period to compensate him. That is from 1 August 2009 to 31 July 2015. I would allow a period of five years in the case of Mrs Love from 1 August 2009 to 31 July 2014.

72    This is the subject of challenge in grounds 1 and 2 of the notice of appeal.

73    It is important, however, to note at this point what the primary judge found in [82], [112], and [138] of the Compensation Judgment, which is sought to be impugned by grounds 1 and 2 of the notice of appeal. He found that the Loves would have been employed from August 2009; that, having obtained employment, they would have gained experience; and that it was reasonable to compensate Mr Love for 6 years’ and Mrs Love for 5 years’ employment.

74    At [139] the primary judge adjusted the base amount of $109,886.40 by 6% increase per annum, as provided in the enterprise agreement. At [141] he did the same for Mrs Love.

75    At [140] he added a sixth year for Mr Love.

76    At [142]-[143] the primary judge recognised that the Loves may not have been able to obtain work for a continuous period, and so applied a 20% discount:

However, work as stewards on a continuous basis was by no means a given. Whilst I find that the Loves were the sort of hard-working and mature people who would likely impress as employees, the winter trough in available jobs and other commercial intrusions which may have impacted this field of endeavour, warrant a discount.

Accordingly, I would, in employing this approach, discount the compensation figures I have assessed by an amount of 20%. I will also round down or up the figures assessed to the nearest hundred dollars.

77    The results of this first approach were:

Mr Love    $380,156.63

Mrs Love    $379,024.68

78    It is important to understand what the primary judge had done in essential terms. First, the primary judge applied the discount to a figure after actual earnings had been subtracted. This had the effect of applying the discount to actual earnings during the period. Secondly, though he did not express it as we will (no doubt because of how the matter was presented to him), it is implicit in both the Liability Judgment and the Compensation Judgment that the primary judge found that the contraventions had caused damage or loss to the Loves by denying them the opportunity to be employed (as they wished to) on off-shore vessels from 2009 for a number of years. The primary judge found it more likely than not that they would have been so employed in about August 2009 and thereafter gained experience. While those were expressed as findings of fact, they can be equally understood as assessments of the probabilities and possibilities of a sufficiently high degree as to underpin the assumption set out in [118] of the Compensation Judgment (see [66] above).

79    From [145]-[148] the primary judge applied the second approach. The primary judge adopted the average amounts earned by casual stewards as was set out in one of the annexures to Ms Grylls’ affidavit: $391,608 from 2009-2014. To this the primary judge added 30% for the reasons he gave in [119] (see [67] above). This is challenged in ground 3 of the notice of appeal. Then actual earnings were deducted.

80    From this calculation the primary judge calculated the losses under the second approach as:

Mr Love    $324,043.84

Mrs Love    $363,431.40

81    After averaging the two approaches (at [150]), and rounding the figures to the nearest $100, the losses, as calculated by the primary judge, were:

Mr Love     $352,100

Mrs Love    $371,200

The submissions on appeal

82    In paras 8 and 9 of the MUA’s submissions on appeal, complaint is made about six findings of fact:

(a)    In 2009, [OMS] wanted to employ the Loves and had employment available for them: Liability Judgement at [53].

(b)    But for the Contraventions, the Loves would have obtained employment with [OMS] from 1 August 2009: Compensation Judgment at [82]; Liability Judgment at [116], [166], [169], [171].

(c)    The Loves would have been above average employees: Compensation Judgment at [119].

(d)    Because of the Contraventions, Mr Love lost six years of employment with [OMS]: Compensation Judgment at [138].

(e)    Because of the Contraventions, Mrs Love lost five years of employment with [OMS]: Compensation Judgment at [138].

(f)    It was only appropriate to discount the Loves’ compensation by 20% to reflect the fact that “work as stewards on a continuous basis was by no means a given”: Compensation Judgment at [142]-[143].

83    The submissions do not thereafter deal with these findings individually (though the submissions of the FWO do). Rather, facts in (a), (b), (d), (e) and (f) were dealt with in submissions under grounds 1 and 2 of the notice of appeal, and fact (c) was dealt with under ground 3.

Grounds 1 and 2

84    The MUA submitted that: OMS “would not have been willing or able to employ the Loves for a 5 to 6 year period”; even if it had employed them, they would have been casuals and their work would not have been “at the intensity found by his Honour”; and even if they had been employed, there was a “real possibility that the Loves would not themselves have been willing to remain in the coastal shipping industry.” The substantive submission on appeal was that the Loves could not prove that they would have received any more than one, perhaps two, “swings” in or about January 2010.

85    These challenges were framed as challenged findings of fact both as to future events, and as to a possibility. This, in part, can be understood from the expression of the primary judge’s findings. But, in assessing the value of the loss or damage, being the lost opportunity to work on off-shore vessels caused by the MUA’s contraventions, one looks to the probabilities and possibilities of the events that may well have taken place. Thus, the primary judge’s finding that the Loves would have obtained employment in August 2009 was a conclusion that the material before him justified an assumption that work would be available for them from August 2009: see [118] of the Compensation Judgment.

86    In its challenge to the finding that OMS would have employed the Loves, the MUA points to the lack of comprehensiveness of Ms McSherry’s evidence. Its main objections to her evidence may be summarised as follows: she was only a crewing officer for 20 months until June 2010; and she was not the decision-making crewing officer responsible for the two vessels (Jascon 25 and Castoro Otto) upon which she told the Loves she was hoping to place them in February 2009 (there were nine other crewing officers employed by OMS, each of whom were responsible for different vessels), and therefore she could not ensure that they would be so placed. These shortcomings were said by the MUA to be reflected in the primary judge’s finding that the Loves would not have been employed until August 2009 (implicitly meaning that he did not find that Ms McSherry would have successfully placed them on these vessels). The MUA further submitted that there was no evidence of any positions becoming available in August; that August was a period of “very limited” employment because of weather and sea conditions; and that there was a downturn in coastal shipping in mid-2009. The essential criticism was that the primary judge’s finding (at [53] Liability Judgment) was made in the absence of a specific opening during a time of industry downturn in a low period of seasonal employment.

87    A central submission of the MUA was that the whole of Ms McSherry’s evidence was governed by a crucial concession given in cross-examination: “that if there was nobody experienced [she] would have put them forward.” They were not experienced, others were, therefore, according to her own evidence, she would not have put them forward.

88    In assessing the findings of the primary judge, regard can be had to all the evidence that was called, and, especially, to all of Ms McSherry’s evidence. The FWO called the Loves and a crewing officer who gave direct evidence that she would have sought to place them on vessels. No other crewing officer was called by OMS or the MUA to comment upon the Loves. Statistical evidence was called; Mr Caldwell gave evidence in general terms about the work. In cross-examination, he gave important evidence that supported the case of the FWO. There was no evidence from OMS or the MUA that at any time, or during any period, there were so-called “beached” stewards or cleaners, not only on the books, but who were also ready, willing, and able to undertake work. The statistics exhibited to Ms Grylls’ affidavit revealed that there were a significant number of casual and permanent stewards, with these working numbers reflecting a seasonal industry. The evidence was not directed, beyond a few remarks in emails of Ms McSherry, to showing exactly how many (if indeed any) experienced stewards could not get work. If it were the case that there were such people, the MUA and OMS were the parties who would, in the ordinary course, be in a position to prove it.

89    It is also relevant to note here how this issue was dealt with during the course of the liability hearing. Although the FWO had not, at that stage, sought an order for compensation against the MUA, the question of whether OMS would, or would not have, been willing to employ the Loves but for the contraventions by the MUA was a live issue. During the course of this hearing evidence was given by Ms McSherry and by Mr Marten Quirk, who was the Human Resources Manager at OMS at the relevant time, that, but for the MUA membership issue, the Loves would have been given jobs at OMS. The MUA did not seek, in its cross-examination of these witnesses, to allege that even in the absence of contraventions by the MUA the Loves would still not have been given a job with OMS (for reasons such as inexperience or lack of available work). Indeed, the cross-examination by counsel for the MUA appeared to reflect instructions (or an assumption) accepting that they would have been so employed.

90    It should be further noted that, despite the MUA’s submission on appeal that, at its highest, the Loves would have been employed for only one or two swings, during its closing submissions in the compensation hearing the MUA had contended that, if compensation was to be ordered, then the proper period would be for 10 months; in other words, for around four or five swings.

91    Looking at all the evidence, and assessing it according to the power of those to call it, the real question is whether there was sufficient evidence for the primary judge to infer that it was sufficiently likely that the Loves would have been placed on board a vessel by August 2009, in circumstances where they had proved that one crewing officer wanted to place them, no other crewing officer had said that they would not, and they were both qualified and anxious to begin working, even though neither had gone to sea.

92    It can be accepted that an experienced steward or cleaner may have an advantage in gaining work because of that experience. But the evidence did not rise as high as entitling a conclusion that the Loves would have been refused work by operators and other crewing officers because of their lack of experience.

93    Of course, once the Loves had been on board, they would have begun to obtain experience. This was a matter which the primary judge directly raised with the MUA during their final address. In response, the MUA contended that one swing would not be enough to place the Loves at the head of the queue. Nevertheless, the MUA did not deny that the Loves would, once on board, gain some degree of experience; it merely asserted that their experience would be less than that of others.

94    The evidence regarding the presence of so-called beached stewards (with whom it was contended the Loves would be competing for positions) was as follows. In March 2009, Ms McSherry told the Loves in an email that “we still have union members on the beach”, who were mostly experienced marine stewards. A later email from Ms McSherry in December 2009 to the Loves stated that she had looked at the union list and “there were 20 stewards on there.” This is far from a detailed and comprehensive understanding of the state of available and willing experienced marine stewards and cleaners to compete with the Loves. It cannot be doubted that the existence of beached experienced stewards was a factor to consider in assessing the intensity of likely work. Given, however, Ms McSherry’s desire to get the Loves a start, and given the lack of any evidence from other crewing officers that they would not have placed them, a finding that they would have been so placed in August 2009 is not unreasonable. Her desire to get them a start can be seen to be a contemporaneous judgment by Ms McSherry of their suitability and, to some degree, of her comparative assessment of some “on the beach” stewards, as discussed below at [104]-[105].

95    The submission of the MUA identified January 2010 as the likely time that the Loves may first have got work. They so submitted by reference to the statistics in evidence about available jobs. Those statistics were a central part of the submission made at the hearing of the appeal that it was likely that the Loves would only have been placed on one swing, perhaps two swings. It will therefore be necessary to return to them. First, however, the submissions were directed to undermining the force of the evidence of Ms McSherry.

96    On its face, Ms McSherry’s evidence was powerfully in support of the proposition that she would have placed them on vessels as casuals. However, there was also evidence that OMS had a practice of placing permanent employees ahead of casuals. In addition, the statistics exhibited to Ms Gryll’s affidavit revealed employment of casuals and permanent staff, at the same time, throughout the period. Yet, without more precise evidence about the number of permanent staff at any one time or during the relevant period who could not get work – matters which, if anyone could prove, OMS and the MUA should have been in a position to prove to some degree of generality – it cannot be inferred that the Loves would not have got employment at some time in 2009.

97    In her first affidavit dated 28 March 2013, Ms McSherry said:

When I was working at OMS between late 2008 and mid 2010, there was regularly a need to fill positions on vessels with crew. There was a particular demand for stewards and also ship’s cooks.

She was not directly challenged in cross-examination on this statement.

98    She also said in the same affidavit:

…I know that the only thing that would have prevented Mr and Mrs Love from obtaining employment with OMS was the fact they weren’t members of the MUA.

She was not directly challenged on this.

99    Ms McSherry said directly that if the union-members-only practice had not existed:

I would have placed the Loves on a vessel in 2009.

100    That evidence of a crewing officer familiar with the industry and the Loves’ background was powerful evidence, even if it was after the event, and provides a reasonable foundation for a conclusion that in 2009 they would have found casual employment as stewards.

101    The attack on Ms McSherry’s evidence centred upon several issues: the asserted need for persons to have seafaring experience before they could be placed by OMS; the fact that the Loves had no relevant experience at sea; the practice that permanent employees would be placed on board vessels before casuals; and the fact that the work was cyclical. Thus it was argued by the appellants that the Loves would not have got a job until extreme demand for staff was present. The question of experience was also put as one of preference of the ultimate hirers of the labour – the owners or operators of the vessels in question. Many of the questions to Ms McSherry about this were put in a passive form, eg: “Generally people with shipboard experience would be preferred to people who had no such experience, correct? …” (see Tp11, 1 December 2014). The answers there masked the question: preferred by whom?

102    The reality was that OMS, as the crewing company, in almost all cases, made the decision about crewing a vessel. Ms McSherry and her colleagues had the responsibility of placing people. While she gave answers that generally experienced persons were preferred, that evidence should be seen in the light of all the evidence. It should also be recognised that Ms McSherry had said that there was a mix of experienced and non-experienced people placed.

103    While the Loves did not have seafaring experience, their basal experience covered common tasks performed by stewards: Mr Love had been a bar steward and waiter; they had both prepared and served food at a café, health food shop, and at a retirement village; they had both run a bakery.

104    It is to be inferred that the reason Ms McSherry wanted to employ the Loves was because they struck her as hard-working, determined people with a skill set (developed through their extensive past employment and business experience) which was highly suitable for the work, and she believed that they would very quickly develop into valuable, experienced, hard-working employees. The work the Loves were seeking principally involved cleaning, laundry, and serving food, with the potential to be promoted to more senior work. A recognition of the background of the Loves easily explains the enthusiasm of Ms McSherry to place them. The Loves had wide and varied experience working with their hands, in white collar work, in organisational tasks, in dealing with people of all kinds (from prisoners to pensioners, in various industries), in serving in the hospitality industry, and in food preparation and service in an institutional environment. They were well-suited, if they wished to follow it, to develop a long-term career on off-shore vessels and to become valued and easily placed employees.

105    Common-sense and life experience tells one that although a large group of people might be attracted to working in such jobs, such potential employees will possess a very diverse range of skills, backgrounds, and characteristics, and it is not uniformly the case that such persons would match the basic skill set, experience, and hard-working attitude of the Loves. This is further supported by evidence from Mrs Love that Ms McSherry had, in the course of their communications in 2009, complained to them about the fact that some of the OMS employees were “pretty ordinary workers” and that she could “pull [her] hair out sometimes”. In turn, the contemporaneous view of Ms McSherry that the Loves should be employed, as they were likely to be hard-working and motivated employees, is to be given real weight, as the primary judge did.

106    If one recognises that these people were likely to be employed for their qualities, one recognises the defect of the next aspect of the submissions of the MUA.

107    The MUA submitted that, when one took into account the practice of OMS to employ permanent staff first, the cyclical nature of the employment, and the statistics revealed in the exhibits to Ms Grylls’ affidavit, one could conclude that the Loves were unlikely to have been placed on vessels.

108    Two answers can be given to this submission. First, the statistics themselves do not permit qualitative statistical judgments to be made about who would have been employed. No person gave evidence from the MUA or OMS about the identities or numbers of people not working at any one time or about qualitative aspects of the statistics that might enable judgments to be made about the likelihood of any particular person to get work at any particular time.

109    Secondly, there was evidence that if a person was adept and skilled, he or she could expect to be given work, could expect to be retained on a vessel, and could expect there to be a long term, ongoing body of work available. Ms McSherry gave evidence as to this as follows:

(a)    That “basically once you obtained the position, employment was ongoing”.

(b)    “Employees had ongoing positions and would generally return to work on the same vessel … unless their vessel had been de-mobilised … However, even if the vessel was de-mobilised, most employees were transferred to a different vessel after their off swing. There were circumstances where an employee could not immediately be placed on a new vessel and had to wait before they started on a new vessel, if the off swings and on swings did not line up.”

(c)    She was cross-examined as to demobilisation, but not as to the basic premise of (a) and (b).

(d)    “Most employees would return to their position on their same vessel after their off swing, unless they were going on holidays, were moving to a higher paying vessel or were moving to another job outside OMS. However, during the period that I worked at OMS [2009-2010], I don’t recall any employees who worked on offshore vessels leaving the offshore industry to pursue alternate career paths.”

(e)    “There were employees on off-shore vessels who had been employed by OMS for extended periods of time.”

(f)    She recalled a cook who had worked for 20 years, two others who had worked for 8, and another two who had worked for 4 and 5 years. “If Mr and Mrs Love had been employed by OMS, they could have kept ongoing regular roles as cooks or stewards for many years.” (She was not cross-examined on this.)

110    Mr Caldwell, Operations Manager from OMS, gave evidence that, whilst people sometimes only worked for a shorter time, that was very often a matter of choice, and how long people stayed in the industry often depended on the particular person and their skills. He said:

You know what, it absolutely depends on the person and the skill set that they bring.

This answer was given to a question about length of service.

111    He was asked what were the factors that might allow a person to stick at a job. He said, as to: a willingness for hard work and determination: “absolutely”. He also gave evidence that he was aware of stewards working on vessels for more than 10 years.

112    The evidence did not disclose that the likelihood of the Loves obtaining employment could be assessed only by looking at the overall numbers of people employed month to month. All the evidence not only permitted the inference (but, indeed, called for it) that if people were placed on vessels and were thereby able to obtain experience as a steward (a job, for which their background skills and experience amply suited them, but which was not, of itself, demanding in skill level), and in turn demonstrated the hard work and determination required to remain at such a job, then such people had good prospects of remaining on board vessels for years on end, and possibly being promoted. The MUA submitted that there was inadequate evidence to ground a provision in the income stream for promotion. We disagree. Assuming that the Loves would have gained employment and been determined to stay working off-shore, additional remuneration from award payments and some degree of promotion would be very likely.

113    The MUA submitted that it was unlikely that the Loves would have been willing to remain employed by OMS even if work was available. The following, it was said, militated in favour of that submission: their lack of experience living on board a ship; the extended swings involved in a four to five week off/on work schedule; the lack of privacy associated with on board life; the unique working conditions in coastal shipping; the personal preferences of the Loves to work together; the difficulty of rostering couples together or to be at sea at the same time; and the fact that the statements in evidence from the Loves as to their willingness to work were post hoc self-serving evidence which should be viewed in that light.

114    Before examining these submissions in a little more detail, the framework of the Loves’ evidence should be noted. Mr Love gave evidence that he estimated that he would have worked with OMS for 5 to 10 years; Mrs Love for 5 to 7 years. He was 51, she, 50 years of age. The work was highly remunerative. Their circumstances made the maximisation of this remuneration critical to them. The prospective wages were much higher than they had ever received and that factor was important in assessing how they would have reacted to circumstances such as possible isolation from one another and lack of privacy.

115    Aspects that might have affected how long they would have worked with OMS were partly personal: how they would have reacted to shipboard life, the nature of the work, and how long they would have been prepared to undertake it.

116    The primary judge at [113] of the Compensation Judgment rejected the MUA’s characterisation of the job of a steward as difficult and abnormal. No appeal is made against that finding. Nevertheless, the submission was repeated. It can be readily accepted that while the positions at sea were well-paid and with good conditions, a seafaring life has its own intrinsic challenges: possible sickness, the extended periods of time in confined spaces, isolation from others (especially from a loving companion and spouse), and a lack of privacy. Some people do not adapt to shipboard life.

117    Care must be exhibited, however, in assessing the effect of such matters. There was no doubt that the work was cyclical and that there was a degree of turnover of staff. Mr Caldwell said that a high proportion of stewards resigned shortly after commencing work. In cross-examination he said that this comment was principally drawn from his experience in the North Sea off Scotland, and that the principal reason for leaving or not depended on a person’s willingness to work hard and their level of determination. It was not based on the involuntary physical or emotional reaction to shipboard life that might overcome a person’s real determination. Ms McSherry’s experience led her to deny the proposition that a high proportion of stewards resigned shortly after commencing. She said most stewards had ongoing work once they were placed. Certainly, there was some turnover, but the evidence did not support a finding that most left soon after starting because of a reaction to the seafaring life.

118    The Loves’ lack of experience of life at sea, even accepting that pay and conditions were good, was however a relevant factor.

119    The MUA also pointed to the Loves’ own preferences and their work history as telling against them likely remaining on board for 5 or 6 years. The MUA referred to the evidence that the Loves left a job at a caravan park because Mrs Love was not comfortable with the accommodation; that they left a job at the Kings Park Motel because they found the lack of outdoor space difficult and had problems with the “living quarters”; and their evidence that they preferred living together.

120    The MUA submitted, with some force, that in circumstances where OMS generally (unless an operator requested it) did not place couples on the same vessel, that there was a real question as to whether the Loves, long married and in their 50s, would be prepared to live and work separately for such extended periods.

121    Further, the evidence was that it was difficult to roster on couples so that they were both at sea at the same time (even if on different vessels). Such discordant swings would mean restricted time together, even ashore, unless, on the evidence, a reduction of pay was acceptable to them.

122    All these factors were real, but they were directly confronted by the Loves in their evidence. They deposed that, for the money the jobs would bring, they would have accepted separation. They also dealt with the contentions regarding their leaving of some jobs for reasons of conditions in a way that was understandable and which did not reflect, at all, upon the finding that they were determined people (against which there was no appeal).

123    Looking at the evidence as a whole, there were various contingencies that were necessary to consider in making a realistic assessment of the Loves’ likely work period: how they physically and emotionally would react to shipboard life; how they would, even as determined people, react to separation; and how they would react to a lack of privacy and space. These contingencies were in addition to the question of whether, as casuals, they would obtain continuous employment. In relation to this last contingency, the primary judge gave a discount of 20%. He did not express any contingency for the other matters.

124    Whether a further discount should be made for the personal factors to which we have referred is not a question of credit, but it is a question involving the character of the Loves. No doubt can be cast (and none was sought to be cast) on the assessment of the Loves by the primary judge as hard-working, determined people. They had a skill set from their background that made them likely to be hard-working efficient stewards with good prospects for promotion. That they wanted and were determined to undertake and persevere with a new career cannot be doubted. Though appellate restraint should be shown, we are of the view that these exigencies and contingencies, in all fairness, needed to be taken into account.

125    One must recall what the primary judge was doing: he was seeking to estimate reasonable compensation – to determine a value for their lost opportunity. That could have been done in a variety of ways; he employed two approaches (the second of which will be considered in relation to ground 3 below). Any such valuation, ultimately, reduces to two factors: the appropriate income stream and the appropriate discount. In his first approach, the primary judge used a baseline of income of $109,886.40 plus 6% incremental annual increases, less actual earnings and then less a discount of 20% for contingencies. Even if we think the discount of 20% was inadequate to encompass all of the contingencies relevant to continuous casual work, it is relevant to note that the value of the income stream could legitimately have been significantly more if the primary judge had included the valuable award payments (discussed at [120]-[137] of the Compensation Judgment) and factored in the possibility of promotion.

126    The order sought in the notice of appeal is to set aside the ultimate monetary orders made by the primary judge – a final figure of $352,100 for Mr Love and $371,200 for Mrs Love (after averaging the two approaches used, see [150] of the Compensation Judgment). It is that sum which must be shown to be excessive. It is relevant to note here that, in its closing submissions before the primary judge, the MUA submitted that the appropriate ultimate monetary order would be $150,000 (as a total figure representing the loss of both Mr and Mrs Love). During the appeal hearing the MUA did not attempt to raise the question of what it considered to be the appropriate compensation amount to be ordered by this Court. However, in later written submissions the MUA contended either that the Loves lost only one contract each (one swing) in late 2009 or early 2010, to the value of $18,984.74 each, or that if the primary judge’s first calculation approach was to be undertaken that the appropriate contingency discount would be 80%.

127    On the primary judge’s first approach, Mr Love’s compensation figure was $380,156.63, being a total income stream of $475,000 less 20% (see [144] of the Compensation Judgment). In arriving at this figure the primary judge proceeded by subtracting the actual annual earnings of Mr Love prior to applying the contingency discount. This was an error. By doing so the primary judge effectively discounted moneys actually earned. The proper way to approach the calculation of the loss of opportunity was by: first, calculating the value of potential earnings of Mr Love; secondly, applying the discount for contingencies to that figure; and then thirdly, subtracting Mr Love’s actual annual income. Such an approach is in line with that formulated by Finkelstein J in La Trobe Capital & Mortgage Corporation Ltd v Hay Property Consultants Pty Ltd [2011] FCAFC 4 at [97]-[105] (Jacobson and Besanko JJ agreed with that methodology at [116]); see also the comments in Valcorp Australia Pty Ltd v Angas Securities Limited [2012] FCAFC 22 at [177]-[180]. After the Court raised this issue with the parties, the FWO did not seek to make any objection to this finding regarding the appropriate approach to the calculation of compensation.

128    If one approaches the calculation in this manner, using the primary judge’s figures and first approach, one takes the base figure of $109,886.40, then applies a 6% increase per annum, over six years, giving a total potential salary for Mr Love of $766,492.64. To this one would apply the contingency discount of 20% (resulting in a figure of $613,194.11) and then subtract actual earnings ($291,296.86), to reach a compensation figure for Mr Love of $321,897.25 (not $380,156.63).

129    If the same method of calculation was applied to Mrs Love, then the total salary for five years’ employment would be $619,439.85, to which is applied a 20% contingency (resulting in a figure of $495,551.88), with actual earnings ($145,659) then being subtracted, to reach a final compensation figure of $349,892.88 (not $379,024.68).

130    The primary judge did not say that he was including any discount for contingencies in setting the level of the income stream.

131    One also cannot see in the reasons an allowance for the type of personal factors to which we have referred. Nevertheless, restraint must be shown. The choice of the income stream to reach the evaluative conclusion as to the appropriate compensation was conservative. The discount of 20% did not take into account consideration of the personal circumstances of the Loves and the contingencies as to how they would have reacted to life at sea. That was an evaluation made in part by a personal assessment of them as people. It was also an evaluation made in the context of a choice of a conservative income stream.

132    It should here be noted that the case by both parties was put on the basis of “2 in, none in”; that either both the Loves would have worked or neither would have. There is however a possibility that, after encountering the difficulties of off-shore work, one of the Loves would have continued to work in the off-shore industry (and perhaps for longer than posited by the primary judge) whilst the other ceased and worked on-shore instead. Nevertheless no such submission was made by the parties. In those circumstances, we will not approach the matter thus.

133    We are persuaded that there were two errors in how the primary judge approached the matter. First, the contingency discount was applied to the result of the subtraction of the income actually earned from the posited income from working on the vessels. If that were the only error it might simply be rectified by the calculations performed at [128]-[129] above. Secondly, we consider the discount for contingencies of 20% to be too low, exercising, as we do, restraint in assessing the evaluation.

134    The 20% discount for the likelihood of not getting continuous work reflected a high probability of gaining casual work for 5 to 6 years. There was evidence to support the conclusion that once skilled and experienced people (with the Loves gaining such experience following their initial period of employment) were placed on vessels, there was a likelihood of remaining. Set against that is the reduced amount of work that the evidence demonstrated was available, especially from the winter of 2012, and otherwise during the winter months. In our view, 20% as a discount for the likelihood of not obtaining continuous casual work was itself too low.

135    One must also consider the personal exigencies and contingencies. We think it not only reasonable, but also necessary, to factor in a discount for the strains of separation for long periods over years for such a couple as the Loves. Whilst we are reluctant to interfere with the evaluative judgment of the primary judge, we do not see that the primary judge made any allowance for such matters in the discount applied. In our view, it is necessary to take such matters into account. Therefore we consider that a 20% discount for contingencies was too low, sufficiently low for us to intervene. Taken together with other necessary personal exigencies and contingencies, and the contingencies relating to casual work in a cyclical market, we consider an appropriate discount to be significantly greater than 20%.

136    Having found there to be these errors in the approach of the primary judge, it becomes necessary for us to assess and evaluate for ourselves the value of the lost opportunity.

Ground 3

137    The MUA challenges the integer applied in the primary judge’s second approach which provided a 30% uplift from the average wages earned by casual stewards (at [119], [145]-[148] of the Compensation Judgment). Given that we propose to reassess the value of the lost opportunity, it is strictly unnecessary to deal with this ground of appeal. However, full argument was delivered and we propose to deal with it.

138    The first criticism was directed to the primary judge’s comment that it was necessary to make up for the fact that the average wage figure would have been lowered by including the wages of those who worked for less than a year or did not work much in a given year. There may be some validity in this criticism, because, in this second method, no discount was used. To remove this factor of short period labour may, perhaps, be seen to remove a contingency that was legitimate. However, the average figures tell one very little. They were used only as a check and an average.

139    The second criticism was directed to the primary judge’s view that the Loves would have been above average employees because of their work ethic. It was said that this conclusion could not be reached without evidence of the work ethic and abilities of others, of which there was no evidence. We disagree. This was not a true comparison. It was a common-sense conclusion about people based on life experience which a judge was entitled to draw. It was a reflection of their work ethic and abilities, as found by the primary judge. It was also supported by the evidence of Ms McSherry referred to at [104]-[105] above.

Reassessment

140    In undertaking the reassessment it is appropriate to give full weight to the available evidence regarding the value of the opportunity lost by the Loves and the proper discount to be extracted for contingencies. An overly conservative approach should not be taken when performing this task; the full value of the likely income stream which the Loves would have obtained had they acquired casual work on a continuous basis for 5 and 6 years respectively, should be calculated. The contingencies and vicissitudes are then taken up by the discount. We think it likely that the Loves would have gained employment in late 2009, or even early 2010, and thereby gained shipboard experience and become highly efficient, hard-working stewards with good prospects of promotion. We think the lengths of service of 6 and 5 years are reasonable assumptions for the full valuing of the opportunities.

141    In their written submissions, received after the appeal hearing, the MUA submitted that “no allowance should be made for additional potential financial benefits [as] the FWO has not met its onus of showing that those benefits would reasonably have been obtained”. Whilst it may be accepted that minimal evidence was raised which directly related to the possibility of obtaining these benefits, there was sufficient and available evidence to conclude that the Loves would have been determined, hard-working, and highly skilled employees. Such evidence is sufficient to found an assumption that the Loves would have, after gaining experience in their first year of employment, been likely to obtain additional award benefits and/or gained promotion. In order to compensate for the contingencies of award allowances and promotion we would add a modest figure in the second and subsequent years of: $10,000 in the second year, $15,000 in the third year, and $20,000 in each of the following years. This modestly reflects what the primary judge said about potential allowances (but not the prospect of promotion) at [121] of the Compensation Judgment of “tens of thousands of dollars”.

142    The question then is what is the appropriate discount to be applied to this income stream of continuous casual work. The discount must first take into account the real possibility that the Loves would not have obtained continuous full-time work, in recognition of the nature of the industry, the amount of work available, and competition from other stewards, both permanent and casual. It must then take account of the particular vicissitudes of life at sea and incorporate a significant discount for the possibility that the Loves would find the lengthy periods of separation as unsustainable.

143    We consider a figure significantly above 20% is necessary to take account of the seasonal and cyclical employment. For instance, the statistics tendered showed comparatively low numbers of employment opportunities for both casual and permanent employees from mid-2012.

144    We also consider that there was a real possibility that the separation for long periods would have taken its toll on the Loves as years went by. This is not to cavil with the primary judge’s assessment of them as determined people; rather, it is to recognise a human contingency. No one can say how they would react to long and regular periods of separation from a spouse.

145    There are also the contingencies of reacting to a seafaring life.

146    Choosing the income stream that we have referred to above, we would place a discount of 50% on that fully valued income stream.

147    Thus the following calculations apply:

148    The discounted values of these two sums at 50% are: $425,746.32 and $342,219.93 respectively.

149    Mr Love’s gross actual income over the six years was $291,296.86 and Mrs Love’s was $145,659.

150    Subtracting the latter from the former, this would produce figures of $134,449.46 for Mr Love and $196,560.93 for Mrs Love

151    We do not consider that the average wage analysis is useful as a check or otherwise. As the primary judge pointed out, an unknown number of people work for short periods for a variety of reasons. The approach that we have adopted gives an income stream conformable with the Loves obtaining work, and becoming experienced and valued employees. The discount recognises industry and personal contingencies.

152    The primary judge awarded Mr Love $352,100 and Mrs Love $371,200 in compensation. Using the above approach, we would assess compensation for a monetary order, rounding the figures down to the nearest thousand, for Mr Love at $134,000 and for Mrs Love at $196,000.

153    The parties were agreed that the proceedings were within the “no-costs jurisdiction” of s 570 of the FW Act.

154    We would thus make orders as follows:

1.    The appeal be allowed in part.

2.    Order 2 made by the Court on 27 March 2015 be varied by substituting $134,000 for $352,100 and substituting $196,000 for $371,200.

Associate:    

Dated:    28 August 2015