Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union (the Hutchison Ports Appeal) [2019] FCAFC 69
ORDERS
Appellant | ||
AND: | CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION Respondent | |
DATE OF ORDER: |
THE COURT ORDERS THAT:
2. The orders of the primary judge are set aside.
3. The matter is remitted to the primary judge to determine the issue of penalty.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
FLICK J:
1 In November 2017, the primary Judge published her reasons for concluding that the former Maritime Union of Australia ("MUA") contravened s 417 of the Fair Work Act 2009 (Cth): Fair Work Ombudsman v Maritime Union of Australia [2017] FCA 1363. In June 2018, her Honour published reasons for imposing penalties and for not ordering compensation: Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union [2018] FCA 934.
2 The Fair Work Ombudsman now appeals. An Amended Notice of Appeal set forth nine Grounds of Appeal.
3 The issues sought to be resolved by each of those Grounds, together with the reasons of the primary Judge, have been set forth in considerable detail in the reasons for decision of Ross J. The opportunity has been taken to read those reasons in draft. Gratitude is extended to his Honour for the care with which those issues have been canvassed. His Honour's exposition renders it unnecessary to separately set forth the facts, the statutory provisions, and the arguments advanced in respect to each of those Grounds. Gratitude is also expressed to Rangiah J for his own careful exposition of the competing considerations in need of resolution.
4 Concurrence, it may be noted at the outset, is expressed with the conclusions of Ross and Rangiah JJ that Grounds 2 to 9 should be rejected. It is respectfully concluded that the primary Judge committed none of the errors sought to be ascribed to her by the Fair Work Ombudsman in the present proceeding. Her Honour's reasons with respect to each of the matters sought to be canvassed in these Grounds are persuasive. Little point is to be served by now repeating, albeit in different terms, those reasons. Broad agreement is also expressed with the reasons of Ross and Rangiah JJ for rejecting Grounds 2 to 9.
5 Contrary to the conclusion of Ross and Rangiah JJ, however, it is respectfully considered that Ground 1 should also be rejected. That was the Ground which challenged the primary Judge's construction of s 557 of the Fair Work Act 2009 (Cth).
6 The factual background to the argument was that the pecuniary penalties that had previously been imposed on the MUA for contraventions of s 417(1) had "nothing to do with the present case": [2018] FCA 934 at [24]. The argument being advanced before the primary Judge by the Fair Work Ombudsman was that s 557(1) "did not apply to the MUA because it [had] previously had a civil penalty imposed on it for contravention of s 417(1), as provided for in s 557(3)": [2018] FCA 934 at [12(5)].
7 The conclusion of the primary Judge was that:
by reason of s 557(1), two or more contraventions of s 417 were to be taken as a single contravention so long as the circumstances in s 557(1)(a) and (b) applied, namely that the "contraventions are committed by the same person and arose out of a course of conduct by that person" as opposed to "an unrelated course of conduct in the past": [2018] FCA 934 at [22] to [23]. To extend s 557(3) to such "unrelated" conduct would be, according to her Honour, to render s 557(3) "a form of 'one strike' rule" ([2018] FCA 934 at [14]) and to give s 557(3) a "freestanding operation, disconnected from ss 557(1)" ([2018] FCA 934 at [23]). On this approach, and on the facts of the present case, her Honour concluded since the earlier penalty that had been imposed for a contravention of s 417 was unrelated to the present conduct and did not arise out of the same course of conduct as was involved in the present case, the MUA could invoke s 557(1) and other contraventions of s 417 were taken as a single contravention ([2018] FCA 934 at [24] and [40] to [41]).
By way of contrast, Ross and Rangiah JJ in separate judgments have concluded that:
section 557(3) is not confined to those circumstances in which a penalty has been imposed in respect to the same course of conduct: at [41] to [46] and [169] to [190]. The reference in s 557(3) to "an earlier contravention", on the approach of Ross J, "indicates that the contravention does not have to have occurred in a particular context, such as a contravention arising from the same course of conduct": at [46].
8 With the greatest of deference to the views of both Ross and Rangiah JJ, it is concluded that the construction given by the primary Judge to s 557 is correct and for the reasons given by her Honour. Those reasons, again, need not be repeated. It would only do a disservice to her Honour's reasons to attempt to rephrase them only in an attempt to express in different words the same considerations. In essence, it is concluded that s 557 should be read as a composite whole – s 557(3) creating an exception to s 557(1), namely an exception to the ability of a "person" to invoke s 557(1) in those circumstances where there have been two or more contraventions arising out of "a course of conduct by the person". The conclusion of the primary Judge gives effect to what is considered to be the plain meaning of the words employed in s 557. So construed, s 557 looks to the facts and circumstances of the matters immediately before the Court; s 557 does not look to some anterior and completely independent facts and circumstances which may previously have attracted a finding that there has been a past contravention.
9 After the hearing had concluded, the Court's attention was drawn to the recent decision of the Full Court in Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Nine Brisbane Sites Appeal) [2019] FCAFC 59. One issue involved in that case was whether on each of the nine days of industrial disruption there was a single course of conduct. The decision of their Honours in that case does not, with respect, impact upon the discrete question of statutory construction which has divided this Court. Nor, and more relevantly, does the decision of the Full Court lead to any different conclusion with respect to Ground 6 of the Amended Notice of Appeal and the manner in which the primary Judge resolved the question as to whether the conduct involved in the present proceeding at the Sydney and Brisbane terminals constituted a single "course of conduct".
10 It is thus concluded that the appeal should be dismissed. None of the nine Grounds of Appeal have been made out.
I certify that the preceding ten 10 numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Flick. |
Associate:
REASONS FOR JUDGMENT
ROSS J:
INTRODUCTION
11 At about 11.30pm on 6 August 2015 Hutchison Ports Australia (HPA) sent emails to employees notifying them of their employment status, including the foreshadowed redundancies of nearly 100 employees with effect from 14 August 2015. Between 7 and 14 August 2015 work effectively ceased at the Brisbane and Sydney terminals operated by HPA. On 11 August 2015 the Maritime Union of Australia (MUA) commenced proceedings in this Court alleging that the foreshadowed termination of the employment of employees was unlawful and seeking interim and final relief including Orders for reinstatement. On 13 August 2015 the Court made Orders requiring the companies to rescind their decisions to terminate the employment of the 100 or so employees and preventing the companies from proceeding further with termination of their employment pending the final hearing of the MUA's claims.
12 The Fair Work Ombudsman subsequently commenced proceedings in this Court contending that the MUA organised and was involved in the employees' conduct in ceasing work which was unlawful industrial action and, as a result, contravened s 417(1) of the Fair Work Act 2009 (Cth) (the FW Act), which is a civil penalty provision.
13 On 24 November 2017 Jagot J found that the MUA organised, and was involved in, industrial action of employees of Sydney International Container Terminals Pty Ltd and Brisbane Container Terminals Pty Ltd (entities of HPA) in contravention of s 417 between 7 and 14 August 2015 (the Liability Judgment) ([2017] FCA 1363).
14 The Court made declarations to this effect on 8 December 2017, as follows:
1. In the period from 7 August 2015 to 14 August 2015, the Respondent contravened section 417(1) of the Fair Work Act 2009 (Cth) (FW Act), by organising industrial action by:
(a) employees of Sydney International Container Terminals Pty Ltd (ACN 134 826 798) (SICT) at the international container terminal at Port Botany, NSW operated by SICT (Sydney Terminal); and
(b) employees of Brisbane Container Terminals Pty Ltd (ACN 126 650 020) (BCT) at the international container terminal at Port Brisbane, QLD operated by BCT (Brisbane Terminal).
2. In the period from 7 August 2015 to 14 August 2015, the Respondent was involved, within the meaning of subsection 550(2) of the FW Act, in contraventions of section 417(1) of the FW Act by:
(a) employees of SICT engaging in industrial action at the Sydney Terminal; and
(b) employees of BCT engaging in industrial action at the Brisbane Terminal.
15 After the Liability Judgment was issued the MUA amalgamated with the Construction, Forestry, Mining and Energy Union and the Textile, Clothing and Footwear Union of Australia to become the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU). Subsequently the Court made Orders substituting the CFMMEU for the MUA in the proceeding in accordance with s 79(a) of the Fair Work (Registered Organisations) Act 2009 (Cth).
16 In the judgment handed down on 21 June 2018 (the Penalty Judgment) ([2018] FCA 934) the primary Judge rejected both the FWO's principal and alternative cases on penalty. The June 2018 Order required the CFMMEU to pay a pecuniary penalty of $38,000 in respect of its contraventions of s 417(1) of the FW Act and the July 2018 Order otherwise dismissed the originating application.
17 The FWO's principal case on penalty was that the maximum penalty was just over $30 million calculated as follows:
(i) there were 240 shifts the subject of industrial action at the Sydney Terminal and 38 shifts the subject of industrial action at the Brisbane Terminal, giving a total of 278 shifts the subject of industrial action;
(ii) each of the 278 shifts during which each employee took industrial action was a discrete contravention of s 417(1);
(iii) as the MUA both organised those industrial actions and was involved in them (as provided for in s 550(1)), the MUA contravened s 417(1) twice for each of the 278 shifts, giving a total of 556 contraventions;
(iv) 556 contraventions multiplied by the maximum penalty of $54,000 equals $30,024,000;
(v) s 557(1) does not apply to the MUA because it has previously had a civil penalty imposed on it for contravention of s 417(1), as provided for in s 557(3). Accordingly, the 556 contraventions cannot be taken to constitute a single contravention as provided for in s 557(1) even if they did arise out of a single course of conduct by the MUA (which, submitted the FWO in its alternative case, they did not, there being four separate courses of conduct); and
(vi) as s 557(1) does not apply by reason of the operation of s 557(3), the common law course of conduct principle relating to the determination of penalty is also excluded by necessary implication.
18 In the Penalty Judgment the primary Judge considered the propositions put by the FWO and found:
(a) To construe s 557(3) such that s 557(1) does not apply to any future contravention of the same provision by that person impermissibly construes s 557(3) literally, rather than purposively, and in isolation from its context (at [14]–[25]).
(b) Section 557(3) should not be read to exclude the common law course of conduct principle (at [26]–[27]).
(c) The MUA did not organise employees non-attendance at work on 278 separate occasions (at [28]–[33]).
(d) The MUA was not involved in separate industrial actions for each shift the employees were rostered to work (at [34]).
(e) The FWO should not be permitted to go behind the declarations and approach of the liability reasons which did not identify the number of employees engaged in industrial action and the number of shifts for such employees (at [35]).
19 The FWO's alternative case was that if s 557(1) applied there were four contraventions; two 'organising' contraventions, one each in Sydney and Brisbane, and two 'involved in' contraventions, one each in Sydney and Brisbane. The primary Judge rejected that case and found:
(a) There was a single course of conduct by the MUA as the same facts founded the conclusion in the Liability Judgment that the MUA both organised and was involved in the employees' industrial action (at [38]).
(b) What occurred in Sydney and Brisbane were contraventions arising from the one course of conduct as the MUA was involved in one concerted industrial campaign at HPA as the owner of both the Sydney and Brisbane ports (at [39] – [40]).
20 The primary Judge found that s 557(1) operated so that the contraventions of s 417(1) were required to be treated as a single contravention with a maximum penalty of $54,000.
21 After considering a number of factors including the MUA's campaign at the two terminals, the loss at the two terminals, that the MUA was engaged in a "comprehensive strategy" against HPA, that senior officials were involved in the overall strategy, and the MUA's history of contravening s 417(1) of the FW Act, the Court imposed a penalty of $38,000 for a single contravention of s 417(1). The primary Judge refused the FWO's application to make a compensation Order in favour of HPA.
22 The FWO seeks leave to appeal, and has appealed, the Orders issued on 21 June 2018 and 10 July 2018. The Orders subject to appeal gave effect to the Penalty Judgment.
23 The Appellant contends that the primary Judge made fundamental errors when dealing with two critical issues:
(i) the application of the "course of conduct" principle as prescribed in s 557(3) of the FW Act; and
(ii) whether to make an Order of compensation in favour of HPA.
COURSE OF CONDUCT
Ground 1: Error in finding s 557(3) applied where the earlier contraventions arose out of the same course of conduct
24 The primary Judge held that the stoppages of work at the Sydney and Brisbane terminals involved one course of conduct committed by the CFMMEU and that by virtue of s 557(1), the multiple contraventions were required to be treated as a single contravention. Her Honour's conclusion involved the determination of a threshold question as to whether s 557(3) disentitled the CFMMEU to the benefit of s 557(1) because of the MUA's prior contraventions of s 417(1) of the FW Act.
25 It was common ground that pecuniary penalties had previously been imposed on the MUA for contravention of s 417(1): see Fair Work Ombudsman v Maritime Union of Australia [2012] FCA 1232; DP World Sydney Limited v Maritime Union of Australia (No 2) [2014] FCA 596 and Chevron Australia Pty Ltd v Maritime Union of Australia (No 2) [2016] FCA 768. As observed by the primary Judge, the pecuniary penalties previously imposed on the MUA had nothing to do with the industrial action subject of the declarations in this case, they "concerned entirely unrelated conduct" ([2018] FCA 934 at [14]).
26 As I have mentioned, at first instance the FWO contended that s 557(3) disentitled the CFMMEU to the benefit of s 557(1) because it had previously had a civil penalty imposed upon it for a contravention of s 417(1). The primary Judge rejected the FWO's construction of s 557(3) and held, at [22] – [25] of the Penalty Judgment:
The key to the proper construction of the provision is that s 557(3) is an exception to s 557(1). It follows that it must be read as creating an exception for matters which would otherwise be subject to s 557(1); that is, matters which comprise a single and continuing course of conduct. The FWO's construction ignores this context and reads s 557(3) as if it extends to cases to which s 557(1) would not otherwise apply; that is, cases in which the respondent has been penalised under the same provision but for an unrelated course of conduct in the past. To read an exception or exclusion provision in such a manner is to decontextualize it, which is an impermissible approach to statutory construction.
In summary, by s 557(1) two or more contraventions of a civil remedy provision are taken to be a single contravention of that provision so long as the circumstances identified in s 557(1)(a) and (b) apply and the contraventions were in respect of the provisions identified in s 557(2). If the contravention is of a nominated provision, the requisite circumstances are that the contraventions are committed by the same person and arose out of a course of conduct by that person. Section 557(3), being an exception to s 557(1), does no more than exclude from s 557(1) cases which would otherwise be within the scope of that provision. Once this is recognised, it is apparent that the only cases which would otherwise be within s 557(1) are cases to which s 557(1) applies, being cases involving two or more contraventions as part of a course of conduct by the same person. Section 557(3) may apply to such cases if its terms are engaged. To read s 557(3) as the FWO proposes is to give the provision a freestanding operation, disconnected from ss 557(1). Nothing in the language or context supports such a reading.
The previous pecuniary penalties imposed on the MUA for contravention of s 417(1), as the FWO acknowledged, have nothing to do with the present case … Accordingly, ss 557(1) and (2) could not apply to the present contraventions and those past contraventions the subject of previously imposed pecuniary penalties. Section 557(3) thus has no work to do in the present case because it is concerned with cases in which a penalty has already been imposed for a contravention forming part of the same course of conduct by the same person. As there has been no pecuniary penalty imposed on the MUA for any contravention forming part of the same course of conduct as that in the present case, s 557(3) is not engaged.
The FWO submitted that this leaves s 557(3) with no work to do. Again, I disagree. Section 557(2) identifies a range of civil penalty provisions which are within the potential scope of s 557(1). It is not difficult to imagine cases in which there is a single course of conduct by the same person contravening a civil penalty provision which may continue after the imposition of a pecuniary penalty. In such a case, s 557(1) would otherwise apply but s 557(3) operates so that s 557(1) does not apply. This means that another contravention could be acknowledged and a further penalty imposed for the same course of conduct notwithstanding subsection (1). This prevents the contravener from continuing in an unlawful course of conduct with impunity following the initial imposition of a penalty. (Emphasis added)
27 The Appellant contends that the primary Judge erred in not applying s 557(3) to disentitle the CFMMEU of the benefit of s 557(1) on the basis of the MUA's prior contraventions of s 417(1). The Appellant submits that the primary Judge's construction of s 557(3) is not supported by the text and that s 557(3) uses temporal concepts in order to remove the benefit of s 557(1). The provision is said to comprise of two elements occurring at different points of time.
28 Ascertaining the legal meaning of a statutory provision necessarily begins with the ordinary grammatical meaning of the words used, having regard to their context and legislative purpose. Context includes the language of the FW Act as a whole, the existing state of the law, the mischief the provision was intended to remedy and any relevant legislative history (see Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27 at 47; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at 408; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 (Project Blue Sky) at [69]).
29 Section 15AA of the Acts Interpretation Act 1901 (Cth) requires that a construction that would promote the purpose or object of the FW Act is to be preferred to one that would not promote that purpose or object (noting that s 40A of the FW Act provides that the Acts Interpretation Act 1901, as in force at 25 June 2009, applies to the FW Act). The purpose or object of the FW Act is to be taken into account even if the meaning of a provision is clear. When the purpose or object is brought into account an alternative interpretation may become apparent. If one interpretation does not promote the object or purpose of the FW Act, and another does, the latter interpretation is to be preferred. Of course, s 15AA requires us to construe the FW Act, not to rewrite it, in the light of its purpose (Mills v Meeking (1990) 169 CLR 214 at 235 per Dawson J; R v L (1994) 49 FCR 534 at 538).
30 The plurality in SZTAL v Minister for Immigration and Border Protection (SZTAL) [2017] HCA 34 at [14] (Kiefel CJ, Nettle and Gordon JJ) succinctly described the contemporary approach to statutory construction (also see Australian Mines and Metals Association Inc v Construction, Forestry, Maritime, Mining and Energy Union [2018] FCAFC 223 at [76]–[86]):
The starting point for the ascertainment of the meaning of a statutory provision is the text of the statute whilst, at the same time, regard is had to its context and purpose. Context should be regarded at this first stage and not at some later stage and it should be regarded in its widest sense. This is not to deny the importance of the natural and ordinary meaning of a word, namely how it is ordinarily understood in discourse, to the process of construction. Considerations of context and purpose simply recognise that, understood in its statutory, historical or other context, some other meaning of a word may be suggested, and so too, if its ordinary meaning is not consistent with the statutory purpose, that meaning must be rejected. (Footnotes omitted)
31 Turning then to the text of the statute, s 557 of the FW Act relevantly states:
557 — Course of conduct
(1) For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:
(a) the contraventions are committed by the same person; and
(b) the contraventions arose out of a course of conduct by the person.
(2) The civil remedy provisions are the following:
…
(j) subsection 417(1) (which deals with industrial action before the nominal expiry date of an enterprise agreement etc.);
…
(3) Subsection (1) does not apply to a contravention of a civil remedy provision that is committed by a person after a court has imposed a pecuniary penalty on the person for an earlier contravention of the provision.
32 Section 557 provides that for the purposes of Part 4-1 of the FW Act, where two or more contraventions by the same person of a civil remedy provision referred to in s 557(2) arose out of a single course of conduct by the person, they must be taken to be a single contravention. Section 417(1), which deals with industrial action before the nominal expiry date of an enterprise agreement (the contravention in the present case), is one of the civil remedy provisions referred to in s 557(2) (at s 557(2)(j)).
33 Section 417 of the FW Act relevantly states:
417 Industrial action must not be organised or engaged in before nominal expiry date of enterprise agreement etc.
No industrial action
(1) A person referred to in subsection (2) must not organise or engage in industrial action from the day on which:
(a) an enterprise agreement is approved by the FWC until its nominal expiry date has passed; or
(b) a workplace determination comes into operation until its nominal expiry date has passed;
whether or not the industrial action relates to a matter dealt with in the agreement or determination.
Note: This subsection is a civil remedy provision (see Part 4 1).
(2) The persons are:
(a) an employer, employee, or employee organisation, who is covered by the agreement or determination; or
(b) an officer of an employee organisation that is covered by the agreement or determination, acting in that capacity.
34 Section 557(1) is properly characterised as a beneficial provision. A provision within an Act may be so characterised without the need to conclude that the Act is, as a whole, beneficial legislation (Nilant v Macchia (2000) 104 FCR 238).
35 As a general proposition, a beneficial provision is to be given a liberal construction rather than being construed in a narrow of pedantic manner (IW Applicant v The City of Perth (1997) 191 CLR 1 at [11]). The approach to the interpretation of beneficial provisions is subject to the qualification that the interpretation adopted "must be restrained within the confines of the actual language employed and what is fairly open on the words used" (Khoury v Government Insurance Office (NSW) (1984) 165 CLR 622 at 638. Also see Accident Insurance Mutual Ltd v Sullivan (1986) 7 NSWLR 65 at 68; Secretary, Department of Social Security v Knight (1996) 72 FCR 115 at 122; Commonwealth v Anti-Discrimination Tribunal (Tasmania) (2008) 169 FCR 85 at 118). As the majority (Gibbs CJ, Mason, Wilson and Dawson JJ) observed in Waugh v Kippen (1986) 160 CLR 156 at 164:
the court must proceed with its primary task of extracting the intention of the legislature from the fair meaning of words by which it has expressed that intention, remembering that it is a remedial measure passed for the protection of the worker. It should not be construed so strictly as to deprive the worker of the protection which Parliament intended he should have…
36 If the words to be construed admit only one outcome then that is the meaning to be attributed to the words. However if more than one interpretation is available or there is uncertainty as to the meaning of the words, such that the construction of the legislation presents a choice, then a beneficial interpretation may be adopted.
37 I accept, as contended by the Appellant, that s 557(3) comprises two elements. The first element provides that s 557(3) operates as an exception to the operation of s 557(1). So much is clear from the expression "Subsection (1) does not apply to a contravention of a civil remedy provision that is committed by a person". The "contravention" referred to in this expression is the contravention of a civil remedy provision before the Court in respect of which penalties are sought to be imposed. In the current matter the relevant contraventions are the CFMMEU's contraventions of s 417(1) of the FW Act.
38 The second element specifies the nature of the exception to s 557(1); that is, s 557(1) does not apply "after a Court has imposed a pecuniary penalty on the person for an earlier contravention of the provision" (emphasis added). Two things may be said about the exception.
39 First, the reference to "the provision" is to the contravention of the same civil remedy provision that is before the Court; in the present matter, s 417(1). Thus, in the context of this case, s 557(3) is only enlivened if a Court has imposed a pecuniary penalty on the MUA for an earlier contravention of s 417(1).
40 Second, as contended by the Appellant, the use of the words "after" and "earlier contravention" create a temporal relationship between the contravention presently before the Court and the earlier contravention.
41 The issue in contention is her Honour's conclusion (Penalty Judgment at [24]) that:
s 557(3) … has no work to do in the present case because it is concerned with cases in which a penalty has already been imposed for a contravention forming part of the same course of conduct by the same person. As there has been no pecuniary penalty imposed on the MUA for any contravention forming part of the same course of conduct as that in the present case, s 557(3) is not engaged.
42 In essence, the primary Judge held that s 557(3) is directed at only disqualifying a person from having the benefit of s 557(1) (provided all requirements in s 557(1) are otherwise met) if the same course of conduct that is the subject of consideration has previously resulted in a penalty being imposed by the Court. In this respect, her Honour observed at [25]:
It is not difficult to imagine cases in which there is a single course of conduct by the same person contravening a civil penalty provision which may continue after the imposition of pecuniary penalty.
43 With respect, contrary to her Honour's observation, it seems to me that it would be a very unusual case where a person commenced a course of conduct in contravention of the FW Act, had a penalty imposed for that contravention, and continued to engage in the same course of conduct, resulting in further civil remedy proceedings. The fact that such an occurrence is unlikely tells against the construction of s 557(3) adopted by her Honour.
44 The primary Judge's construction focuses on a previous contravention in respect of the same "course of conduct" which is before the Court. A difficulty with that construction is that it requires importing or adding words to the end of s 557(3) which do not appear in the subsection, namely "where the earlier contravention arose out of the same course of conduct committed by the same person". As Lord Mersey, in an oft-cited passage from Thompson v Gould & Co [1910] AC 409 at 420, said "It is a strong thing to read into an Act of Parliament words that are not there, and in the absence of clear necessity it is the wrong thing to do" (cited with approval by Flick J in JJ Richards & Sons Pty Ltd v Fair Work Australia (2012) 201 FCR 297). With respect to the view taken by her Honour, I am not persuaded that there is the requisite necessity in the case of s 557(3).
45 Further, the use of the indefinite article in the expression "an earlier contravention" in s 557(3) indicates that the contravention does not have to have occurred in a particular context, such as a contravention arising from the same course of conduct. This also tells against the construction adopted by the primary Judge.
46 In my view a plain reading of the text compels the conclusion that in order to enliven the operation of s 557(3) the prior contravention must be of the same civil remedy provision and the Court's order imposing a penalty for that contravention must have occurred before the contraventions found in the present matter. Further, s 557(3) is not confined to cases in which the prior penalty has been imposed for a contravention forming part of the same course of conduct that is before the Court.
47 Of course, the literal meaning (or the ordinary grammatical meaning) of the words of a statutory provision may be displaced by the context and legislative purpose. As the majority observed in Project Blue Sky at [78] (also see Australian Mines and Metals Association Inc v Construction, Forestry, Maritime, Mining and Energy Union [2018] FCAFC 223 at [76]–[86]):
the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.
48 The purpose of s 557(1) is to provide a degree of leniency in the imposition of a penalty by requiring the Court to treat multiple contraventions of certain civil remedy provisions (i.e. those referred to in s 557(2)) as a single contravention, if the contraventions are committed by the same person and arise out of the same course of conduct by that person. The operation of s 557(1) is subject to the exception in s 557(3).
49 It is appropriate to view the purpose of the exception in s 557(3) as being to provide a practical balance between competing public interests—namely the provision of leniency in the circumstances specified in s 557(1) and the need to deter non-compliance with civil remedy provisions. Such a characterisation is consistent with the object of the FW Act in s 3, namely "to provide a balanced framework for cooperative and productive workplace relations". Provisions such as s 557(3) are to be interpreted carefully in order not to destroy the balance between the competing public interests (see Chief Executive Officer of Customs v Adelaide Brighton Cement Ltd (2004) 139 FCR 147 at [17]).
50 If the scope of the exception in s 557(3) is confined in the manner adopted by the primary Judge then the circumstances in which leniency is afforded by s 557(1) will be correspondingly expanded. In my view such a construction would disturb the balance between the competing interests which is the very purpose of the provision. In particular, such a construction undermines the primary purpose of imposing a civil penalty, that is to deter the contravener and others from repeating the proscribed conduct (see Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at [54]–[55] per French CJ, Kiefel, Bell, Nettle and Gordon JJ). The construction I have adopted is consistent with the legislative purpose.
51 As to the context, I note that the heading and subject matter of s 557 is directed at contraventions arising out of a course of conduct by the same person. But that context does compel the construction adopted by the primary Judge and nor does it provide the requisite necessity to import or add words to the end of s 557(3).
52 A further contextual consideration is that the construction adopted by the primary Judge is not consistent with other language used in the FW Act in dealing with similar concepts. In particular, s 556, which deals with civil double jeopardy, adopts a drafting style linking the civil remedy provision in question to the "conduct":
556 Civil double jeopardy
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 a law of the Commonwealth in relation to that conduct. (Emphasis added)
53 A similar drafting style could have been adopted in respect of s 557(3), linking the previous contravention to the "course of conduct", but it was not.
54 Finally, the construction I have adopted is consistent with the obiter observations of Dowsett and Rares JJ in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 53; (2017) 249 FCR 458 (Perth International Airport Case) at [88]:
In our opinion, s 557 did not cover the field and did not exclude the common law principle of taking into account, when imposing a penalty, whether the conduct complained of constituted a single course of conduct. However, s 557 provided a legislative indication that certain forms of concerted industrial action, such as multiple contraventions of ss 417(1), would be deemed, only in the case of a first contravention by the person, to be a single contravention. That contrasted with the legislative purpose of treating one contravention of s 348 differently from ones to which s 557 applied. The Parliament appears to have intended that multiple contraventions of s 348, in what, in other circumstances (such as those covered by s 557), might be treated as a course of conduct, would not necessarily attract any sentencing leniency.
55 In Australian Building and Construction Commissioner v Pauls [2017] FCA 843 (Pauls) Rangiah J said:
[20] Under s 557(1) and (3) of the FWA, two or more contraventions of s 417(1) are taken to constitute a single contravention if the contraventions arose out of a course of conduct by the person, provided that a Court has not previously imposed a pecuniary penalty on the person for an earlier contravention of that provision.
[21] The Commissioner does not allege that Pauls or Steele have previously contravened s 417 of the FWA, so s 557(1) is capable of applying to their conduct. The Commissioner's written submissions assert that Bland has had "previous involvement in similar proceedings", but do not allege that any pecuniary penalty has previously been imposed upon him for contravention of s 417. I therefore accept that s 557(1) is capable of applying to Bland's contravention of s 417. Pecuniary penalties have been imposed upon the CFMEU for contravention of s 417 on a number of previous occasions, so s 557(1) does not apply to its conduct.
56 I note that in Pauls the CFMEU did not advance a contrary submission about s 557(3).
57 Further, in Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557 (Grouped Property Services) Katzmann J made the following observation (at [402]) regarding s 557:
Unless a court has previously imposed a pecuniary penalty on the person for an earlier contravention of the same civil remedy provision, two or more contraventions of certain civil remedy provisions are taken to constitute a single contravention if they are committed by the same person and arose out of a course of conduct by that person.
58 Neither the Perth International Airport Case nor Grouped Property Services make any reference to a requirement that the previously imposed pecuniary penalty arise out of the same course of conduct which is before the Court. In Pauls, as I have mentioned, the point was not contested.
59 For the reasons given the primary Judge erred in her construction of s 557(3). Before turning to the disposition of the appeal it is necessary to say something about the application of the construction of s 557(3) I have adopted in the circumstances in the present matter.
60 One of the reasons given by the primary Judge for the adoption of her construction of s 557(3) was that a consequence of adopting the Appellant's construction was that s 557(3) would constitute a form of "one strike" rule. At [13] of the Penalty Judgment her Honour said:
I do not accept that s 557(3) constitutes a form of "one strike" rule so that if a person has had a pecuniary penalty imposed on them for contravention of a provision, s 557(3) means that s 557(1) does not apply to any future contravention of the same provision by that person. In my view, this involves impermissibly construing s 557(3) literally, rather than purposively, and in isolation from its context. When read purposively and in context, it is reasonably clear that s 557(3) is concerned with pecuniary penalties that have previously been imposed on the same person in respect of the same course of conduct. In the present case, the pecuniary penalties previously imposed on the MUA had nothing to do with the industrial action the subject of the declarations in this case. They concerned entirely unrelated conduct.
61 It seems to me that the extent to which s 557(3) operates as a "one strike" rule, and indeed the application of s 557(3) in the present case, depends on the meaning given to the expression "a contravention of a civil remedy provision" in s 557(3). I note that an almost identical expression is used in s 557(1).
62 The proper construction of the expression "contraventions of a civil remedy provision" in s 557(1) was considered by the Full Court in Rocky Holdings Pty Limited v Fair Work Ombudsman (2014) 221 FCR 153 (Rocky Holdings).
63 In Rocky Holdings the primary Judge imposed a single penalty in respect of multiple contraventions of each of three terms of the NES and each of six terms of a modern award (nine separate penalties). The appellants contended that the primary Judge had misconstrued s 557(1) and that it required only one penalty to be imposed in respect of the three contraventions of s 44(1) and one penalty to be imposed in respect of the six contraventions of s 45.
64 The Full Court rejected the submission that, because there were only two legislative provisions involved, the effect of s 557(1) was that, if all nine contraventions were indeed part of the same course of conduct, they were reduced to two. Their Honours agreed (221 FCR 162 at [19]) with the reasoning of Logan J in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Ltd (No 2) [2010] FCA 652 (QR) at [16] that:
the course of conduct must be associated with the particularised term of the particularised instrument. That is the contravention of the term of the transitional instrument. One does not look at course of conduct for the purposes of s 557 at a level of abstraction divorced from the contravened provision as particularised (ie the term in question and the transitional instrument in question).
65 The Full Court considered that ss 557(1) and (2) are ambiguous in that they are capable of being read as referring to the existence of the identified provision or to the substance of the identified provision. The Full Court resolved that ambiguity as follows, at [13]:
The reference in s 557(1) to "a civil remedy provision referred to in subsection (2)" discloses that it is the provision which is relevant. Section 557(2) identifies each of ss 44(1) and 45 as a civil remedy provision. It is the substance of those provisions which create the proscriptions. Section 44(1) proscribes contraventions of a provision of the NES. Section 45 proscribes contravention of a term of a modern award. The appellants' alternative contention treats the references to ss 44(1) and 45 (and every provision listed in s 557(2)) as a reference not to the substance but to the mere existence of the provision irrespective of the nature of the contravention the provision creates. Section 557(2) should be recognised to be a form of definitions provision. It defines civil remedy provisions for the purposes of s 557(1). The function of s 557(2) is to indicate that when a provision is identified, it is the substance of the provision found elsewhere in the Act (in this case, in ss 44(1) and 45) which is the civil penalty provision. As the FWO put it in written submissions:
However, section 557 also operates on contraventions which relevantly occur when a term of an award or a provision of an NES is contravened. This now occurs indirectly through the operation of sections 44 and 45. In the case of s. 45 (for example), the contravention occurs when a term of a modern award is contravened. Thus the effect of subsection 557(1) in relation to contraventions of s. 45 is that:
… 2 or more contraventions of (a term of an award) are, subject to subsection 3, taken to constitute a single contravention …
The appellants construe s. 556 as if it said that 2 or more contraventions of an award or 2 or more contraventions of an NES are taken to constitute a single contravention.
66 In short, their Honours regarded the relevant term in each agreement as a separate "civil remedy provision" for the purposes of s 557(1), such that they were not required to be treated as a single contravention.
67 The Full Court did not need to consider the construction of s 557(3), as its application was not in contention. It appears to follow from the Full Court's reading of "contraventions of a civil remedy provision" in s 557(1), that s 557(3) would have been engaged, for example, in respect of the multiple contraventions of an award term requiring payment of a Sunday overtime rate, if a Court had previously imposed a pecuniary penalty for an earlier contravention of that term of that award.
68 Rocky Holdings has been applied in subsequent cases and, relevantly, in the context of breaches of the terms of enterprise agreements (see for example Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd (No 2) [2016] FCA 727; Fair Work Ombudsman v South Jin Pty Ltd (No 2) [2016] FCA 832; Fair Work Ombudsman v Lohr (2018) 356 ALR 424).
69 If the approach taken in Rocky Holdings to award breaches is applied to s 417(1) contraventions then industrial action organised by officers of an employee organisation where there are multiple in-term enterprise agreements covering the relevant organisation, would be regarded as giving rise to contraventions of separate civil remedy provisions for the purposes of s 557(1). This would be so even if all of the relevant enterprise agreements operated at a single site or applied to the same employer.
70 The application of Rocky Holdings also has consequences for the construction of s 557(3), given that the relevant expressions in each subsection are almost identical. Section 557(3) would only disentitle an organisation of the benefit of s 557(1) if the earlier contravention of s 417(1) was in relation to the same enterprise agreement which is the subject of the present proceedings. This reading would avoid s 557(3) constituting a "one strike" rule, as concerned the primary Judge in the instant case.
71 Applying this reasoning to the instant case it would follow that s 557(3) had no application because the pecuniary penalties previously imposed on the MUA for contraventions of s 417(1) did not relate to industrial action during the term of the enterprise agreement concerned in the present matter.
72 Absent such a reading of s 557(3), a single breach of s 417(1) would forever disentitle an organisation from the benefits of s 557(1) in circumstances completely unrelated to the prior breach. Such a result seems incongruous given that, applying Rocky Holdings, an employer is only denied the benefit of s 557(1) in respect of, say, a breach of the wages term of an enterprise agreement if they have previously contravened the same term of that agreement. Hence, if the enterprise agreement is replaced by a new agreement, the employer, as it were, starts with a clean slate.
73 I note that in Australian Building and Construction Commission v Construction, Forestry, Mining and Energy Union (The Kane Constructions Case) [2017] FCA 168, Jessup J dealt with the application of s 557 in circumstances where there were multiple in-term enterprise agreements which provided the basis for the s 417(1) breaches. Jessup J distinguished QR and Rocky Holdings on the following basis ([2017] FCA 168 at [66]):
The existence of an in-term enterprise agreement is an element of liability arising under s 417, but the section is not concerned with a contravention of the agreement, or a term of it. The substance of the norm for which the section provides is exactly the same as between two or more employees each of whom is covered by a different enterprise agreement: he or she must not organise or engage in industrial action.
74 There is, with respect, reason to doubt his Honour's conclusion. Importantly, his Honour did not give any consideration to s 557(3) and nor did he consider the relevant legislative history. The legislative history is quite instructive.
75 The legislative antecedents to s 557 may be traced back to the insertion of s 119(1A) into the Conciliation and Arbitration Act 1904 (Cth) in 1970 and to s 178(2) the Industrial Relations Act 1988 (Cth) and more recently s 719(2) of the Workplace Relations Act 1996 (Cth).
76 In Rocky Holdings the legislative history was a central consideration. The Full Court observed (at [16]) that the difference in language between s 557 and its predecessor provisions "are differences in form rather than substance". The legislative history may be said to support the extension of the approach taken in Rocky Holdings to s 417(1) contraventions because in times past industrial action was not the subject of a discrete civil remedy provision, but was dealt with through the insertion of a term into the relevant award, namely a bans clause.
77 As observed by Logan J in QR at [25]:
There is no hint in the explanatory memorandum of any intention on the part of Parliament to cause any break with the past in relation to the operation of the course of conduct provision, s 557 in the Fair Work Act. Of course, it may be just that such a break occurred inadvertently. In this case, though, I doubt that there is any break with the past. One might have expected, given the age of course of conduct provisions, if there were to have been an intended break with the past, for there to have been express reference to that in the explanatory memorandum.
78 In the normal course I would express a concluded view on the application of Rocky Holdings to s 417(1) contraventions, but I am conscious that this issue has not been raised in the parties' submissions, nor was it canvassed during the course of oral argument. While the Court is plainly not bound by the parameters of counsels' submissions on interpretation and may adopt a construction that has not been argued by the parties, the freedom to do so is subject to considerations of procedural fairness (see Accident Towing & Advisory Committee v Combined Motor Industries Pty Ltd [1987] VR 529 at 547 per McGarvie J and Coleman v Power (2004) 220 CLR 1 at [243] per Kirby J). The parties have not been afforded an opportunity to comment on this issue and in those circumstances I do not propose to express a concluded view. The parties may wish to address the matter on the remittal.
Ground 2: Error in finding that s 557(1) did not exclude the common law course of conduct principle in respect of contraventions of civil remedy provisions listed in s 557(2)
79 At first instance the FWO contended that if it was correct that s 557(1) did not apply due to s 557(3) then the common law course of conduct principle would also be excluded. Her Honour's consideration of this issue is at [26]–[27] of the Penalty Judgment:
nothing supports the FWO's related proposition that, if s 557(3) does apply (which, in the present case, it does not), the section is also to be read as implicitly excluding the common law course of conduct principle. The FWO would have it that observations of Bromwich J in Fair Work Ombudsman v Lohr [2018] FCA 5 at [33]-[34] support this proposition. The point Bromwich J was making, however, is that if s 557(1) applies, then it is not apparent that there is any scope remaining for the operation of the common law principle. The FWO's proposition in the present case is that if s 557(1) does not apply because of s 557(3), the common law course of conduct principle is excluded, presumably by necessary implication. There is no foundation in the language of s 557 to support this proposition. I reject it.
As a result, even if s 557(1) did not apply in the present case, the common law course of conduct principle would apply to the determination of penalty.
80 The Appellant contends that the primary Judge's finding was contrary to authority. In support of its contention the Appellant relies on the following observation by Bromwich J in Fair Work Ombudsman v Lohr (2018) 356 ALR 424 (Lohr) at [33]–[34]:
The written submissions for the FWO on these grounds summarised the error asserted to have been made by the primary judge as follows (emphasis in original; footnotes omitted):
First, properly understood, the "one transaction" or "course of conduct" principle does not permit a sentencing judge to impose a single sentence for multiple contraventions on the basis that they formed part of a course of conduct, except where that is a course agreed or accepted by the parties. Absent a statutory provision that provides otherwise, a sentencing judge is required to impose a separate penalty for each contravention, having considered whether the penalties need to be adjusted to avoid the aggregate penalty being excessive. The Primary Judge did not do that.
Second, s.557 of the Act is the express statutory manifestation of the one transaction or course of conduct principle. By enacting s.557 Parliament has determined how multiple contraventions arising from a course of conduct are to be treated. Having applied s.557 of the Act it was not open for the Primary Judge to further consolidate the 12 contraventions into one contravention by applying that principle, in effect, again.
Those submissions for the FWO should be accepted. Despite important factual differences between this case and Rocky Holdings, the Full Court's decision in that case compels this outcome. Even if s 557 allows for the continued application of the course of conduct principle, which may be doubted, the application of s 557 to the facts of this case meant that there was no remaining work for the course of conduct principle to do. The fact of flat rates of pay cannot operate to deny the multiplicity of contraventions that this approach was found by his Honour to have produced. His Honour therefore erred in further consolidating the number of contraventions from 12 to one, noting, as already observed, that the FWO was content to proceed upon the basis of nine contraventions. These grounds of appeal must therefore succeed. Order 5(a) made by his Honour must accordingly be set aside. (Emphasis added)
81 The Appellant relies on the above passage in support of its submission that s 557 "has been held to be the statutory manifestation of the course of conduct principle thereby excluding the common law principle".
82 Contrary to the Appellant's submission Lohr is not authority for the proposition advanced. As is apparent from the emphasised parts of the passage from Lohr, and as concluded by the primary Judge (Penalty Judgment at [26]), the point being made by Bromwich J was that if s 557(1) applies then it "may be doubted" that there is any scope remaining for the common law course of conduct principle also to be applied. That proposition is quite different to that which is being advanced by the Appellant.
83 In the course of oral argument Senior Counsel for the Respondent submitted that the Perth International Airport Case stands against the proposition advanced by the Appellant. The relevant passage in that case is from the judgment of Dowsett and Rares JJ at [88]:
In our opinion, s 557 did not cover the field and did not exclude the common law principle of taking into account, when imposing a penalty, whether the conduct complained of constituted a single course of conduct.
84 When seen in context, the above observation is of no assistance in resolving the matter presently before the Court. In the Perth International Airport Case their Honours were dealing with contraventions of s 348, which is not referred to in s 577(2) and hence s 557(1) had no operation. The case is authority for the proposition that the common law principle applies in respect of civil penalty provisions which are not listed in s 557(2) and to which s 557(1) has no application. The case says nothing about whether the common law principle applies in circumstances where a person is denied the benefit of s 557(1) because of the operation of s 557(3).
85 In Pauls it appears from [56] of Rangiah J's judgment that his Honour proceeded on the basis that s 557(1) could not apply to the CFMEU, given s 557(3), but determined penalty on the basis that the common law course of conduct principle did apply.
86 The Appellant contends that there does not appear to be a logical explanation as to why Parliament would have codified the common law course of conduct principle to apply to multiple contraventions of the same civil remedy provision, and at the same time, by operation of s 557(3) legislated to remove that benefit in certain circumstances, only to reinstate the common law principle to achieve the same practical effect as if s 557(3) had never existed. It is submitted that such a construction renders s 557(3) otiose.
87 The Appellant also submits that a more coherent and sensible construction is that s 557(1) mandated that the benefit of the course of conduct principle be applied to the civil remedy provisions in s 557(2), but that beneficial operation is withdrawn if a person was a repeat contravener of the same civil remedy provision. The clear purpose of such a construction is to deter persons from contravening the same civil remedy provision again.
88 Two points are sufficient to dispose of the argument put.
89 First, the submission proceeds, wrongly, on the premise that s 557 represents a codification of the common law course of conduct principle. The course of conduct principle at common law operates quite differently to s 557. In respect of s 557, if the multiple contraventions arise out of the same course of conduct, then s 557(1) mandates that the contraventions are to be taken to constitute a single contravention and therefore only a single penalty may be imposed.
90 In contrast, at common law, even if a Court concludes that a number of contraventions arise out of the one course of conduct, it is not bound to only impose one penalty. The Court may impose more than one penalty in order to ensure that the wrongdoing involved is adequately punished and the objects for fixing penalty have been adequately met: Construction, Forestry, Mining and Energy Union v Cahill (2010) 269 ALR 1 (Cahill) at [48].
91 As the Full Court said in Transport Workers' Union of Australia v Registered Organisations Commissioner [No 2] [2018] FCAFC 203; 363 ALR 464 at [91]:
'… Absent the relevant application of a provision such as s 557(1) of the Fair Work Act, the task is to evaluate the considerations informing the contraventions (factual and legal) in order to impose appropriate penal relief that does not punish twice for the same conduct. To use a phrase such as "a course of conduct" may imply that there is such an abstracted concept to be found, and once found it implies a single contravention or a single maximum penalty. That is the danger of the phrase. Rather, it is necessary (in the absence of a statutory enquiry such as in s 557(1)) to examine all the conduct and enquire how its course and its explanation factually and legally informs the imposition of penal orders, in particular to avoid double punishment. We see nothing in Williams or The Agreed Penalties Case that was intended to displace the need to consider the statute in question and to recognise that the object of the course of conduct principle is to avoid double punishment.' (Also see Australian Building and Construction Commissioner v Construction Forestry, Maritime, Mining and Energy Union (The Nine Brisbane Sites Appeal) [2019] FCAFC 59)
92 Indeed, as submitted by Appellant, the course of conduct principle is merely "a tool of analysis" which a Court may choose to use to assist in ensuring that a contravener is not punished twice for what is essentially the same wrongdoing. A Court is not compelled to utilise the principle because, as Owen JA said in Royer v Western Australia [2009] WASCA 139 at [28], "[d]iscretionary judgments require the weighing of elements, not the formulation of adjustable rule or benchmarks". See Cahill at [39] and [41]; Australian Competition and Consumer Commission (ACCC) v Yazaki Corporation [2018] FCAFC 73; (2018) 357 ALR 55 at [229].
93 Second, as observed by the primary Judge (Penalty Judgment at [26]), there is no foundation in the language of s 557 to support the proposition advanced by the Appellant. The absence of such a foundation is telling.
94 Absent a clear legislative intention, legislation is presumed not to alter "common law doctrines". One of the most commonly cited authorities in support of this presumption is the statement of O'Connor J in Potter v Minahan (1908) 7 CLR 277 at 304 in which his Honour quoted with approval the following passage from Maxwell on the Interpretation of Statutes (4th edition):
It is in the last degree improbable that the legislature would overthrow fundamental principles, infringe rights, or depart from the general system of law without expressing its intention with irresistible clearness; and to give any such effect to general words, simply because they have that meaning in their widest, or usual, or natural sense, would be to give them a meaning in which they were not really used.
95 Contrary to the submission advanced by the Appellant the primary Judge was correct to conclude that if s 557(1) did not apply in the present case (because of the operation of s 557(3)), the common law course of conduct principle would apply to the determination of penalty.
Ground 3: In the alternative to Ground 2 – error in finding that the Court must impose one penalty
96 This ground is advanced as an alternative to Ground 2. It is contended that if the common law course of conduct principle was available, then her Honour erroneously applied this principle by finding that she was bound to only impose one penalty.
97 In the Penalty Judgment at [26]-[27], the primary Judge concluded that, even if s 557(1) was excluded in the present case because of the prior contraventions of the MUA, the common law principle of "course of conduct" would nevertheless apply:
nothing supports the FWO's related proposition that, if s 557(3) does apply (which, in the present case, it does not), the section is also to be read as implicitly excluding the common law course of conduct principle. The FWO would have it that observations of Bromwich J in Fair Work Ombudsman v Lohr [2018] FCA 5 at [33]-[34] support this proposition. The point Bromwich J was making, however, is that if s 557(1) applies, then it is not apparent that there is any scope remaining for the operation of the common law principle. The FWO's proposition in the present case is that if s 557(1) does not apply because of s 557(3), the common law course of conduct principle is excluded, presumably by necessary implication. There is no foundation in the language of s 557 to support this proposition. I reject it.
As a result, even if s 557(1) did not apply in the present case, the common law course of conduct principle would apply to the determination of penalty.
98 In my view this ground is misconceived. Her Honour's finding at [27] of the Penalty Judgment was merely that if s 557(1) did not apply, the common law principle would apply; a finding with which I respectfully agree, for the reasons given earlier. Contrary to the Appellant's contention it is plain from the above passage that her Honour did not apply the common law principle at all and made no finding about how it would apply in the instant case.
Ground 4: Error in finding that organising is not different from being involved in engaging in industrial action
99 In Ground 4 the Appellant contends that the primary Judge erred in:
(a) finding that the CFMMEU's conduct in organising the relevant employees to engage industrial action in contravention of s 417(1) was not different to the CFMMEU being involved in the relevant employees engaging in industrial action under s 550(1) and therefore arose out of the same course of conduct by the CFMMEU (Reasons [37]-[38]); and
(b) not finding that the CFMMEU's conduct in organising the relevant employees in question to engage industrial action in contravention of s 417(1) and the CFMMEU's conduct in being involved in the same employees engaging in industrial action did not arise out of the same course of conduct by the CFMMEU.
100 I deal later with the proposition that the primary Judge erred in finding that the MUA's conduct arose out of the same course of conduct (Ground 4(b)).
101 As to Ground 4(a), the primary Judge found that the CFMMEU both organised industrial action under s 417(1) and was involved in the relevant employees engaging in the industrial action under ss 550(2)(a) and 550(2)(c) (Liability Judgment [100]–[101]). In the Penalty Judgment, her Honour found that the contraventions of s 417(1) by organising the relevant employees to engage industrial action, and by being involved in the relevant employees engaging in industrial action under s 550(1), arose out of the same course of conduct by the CFMMEU.
102 The Appellant contends that the primary Judge erred by collapsing the distinction between organising industrial action and being involved in the employees engaging in unlawful industrial action.
103 At [38] of the Penalty Judgment the primary Judge said:
I do not accept that, merely because "organising" industrial action within the meaning of s 417(1) is different from being "involved in" employees engaging in industrial action as provided for in s 550(1), the MUA's conduct in the present case involved two different courses of conduct. As the principal reasons disclose, the same facts founded my conclusions the MUA both organised industrial action and was involved in employees engaging in industrial action. In short, the acts which led me to find the MUA organised the industrial action also led me to find that the MUA was involved in employees engaging in the industrial action. It is difficult to conceive of a case in which a finding of "organising" industrial action would not also necessarily prove being "involved in" employees engaging in industrial action but for present purposes it is sufficient that the same acts resulted in two sources of liability. There was thus a single course of conduct by which the MUA organised industrial action and was involved in employees engaging in industrial action. (Emphasis added)
104 Contrary to the submission put by the Appellant, it is clear from the above passage that the primary Judge expressly acknowledged that "organising" industrial action within the meaning of s 417(1) is different from being "involved in" employees engaging in industrial action within the meaning of s 550(1). Her Honour did not "collapse the distinction" between organising and being involved in as contended by the Appellant. The point being made by her Honour in the passage extracted above was that the conduct of the MUA was a single course of conduct that led to contraventions of the two provisions. Accordingly, I would dismiss this ground of appeal.
Ground 5: Error in finding that employees who had failed or refused to attend work as required on more than one occasion had engaged in a single period of industrial action
105 In Ground 5 the Appellant contends that the primary Judge erred in:
(a) finding that each relevant employee who had failed or refused to attend for work for two or more shifts during the period between 7 and 14 August 2015 had engaged in a single period of industrial action during that period at the Sydney and Brisbane terminals in contravention of s 417 of the FW Act (Reasons [31]–[32], [34] and [37]); and
(b) not finding, by operation of s 550 of the FW Act, that the CFMMEU had been involved in 278 contraventions of the FW Act by virtue of the relevant employees having engaged in 278 contraventions of s 417 of the FW Act comprising each occasion where a relevant employee failed or refused to attend for work for a shift which he or she had been required to work during the period between 7 and 14 August 2015 at the Sydney and Brisbane terminals.
106 In the Penalty Judgment (at [32]) the primary Judge rejected the notion that the employees were engaged in separate contraventions on a per shift basis as "an artificial construct of the FWO's making irreconcilable with the findings I made in the principle reasons and the factual underpinning of the declaration made". At [102] of the Liability Judgment her Honour concluded as follows:
The FWO has proved its case. The MUA organised and was involved in the industrial action of employees of SICT and BCT at the Sydney and Brisbane Terminals respectively between 7 and 14 August 2015 and, thereby, itself contravened s 417(1) of the Fair Work Act. To my mind, it is not necessary that any declaration be more specific than this but I will give the FWO seven days to file proposed orders consistent with these reasons for judgment and a timetable for the finalisation of the matter and the MUA a further seven days to respond.
107 The declarations made are set out earlier; they are in the terms filed by the FWO in the proceedings at first instance. The first declaration was that in the period from 7 August 2015 to 14 August 2015 the MUA contravened s 417(1) by organising industrial action by employees at the Sydney and Brisbane terminals. The second declaration was that in the period from 7 August 2015 to 14 August 2015 the MUA was involved in the contraventions of s 417(1) by employees engaging in industrial action at the Sydney and Brisbane terminals. The two declarations reflect the findings in the Liability Judgment (see [14], [79], [80], [81] and [100]), which in turn underpin the conclusion at [102], which is set out above.
108 In the penalty proceedings the FWO accepted that the declarations made did not identify the number of employees who had engaged in industrial and thus did not provide the requisite finding to support the FWO's contention. The primary Judge rejected the FWO's proposal that the Court should proceed to make such findings (Penalty Judgment at [35]):
I accept that it would be possible for me to identify the number of employees who were engaged in industrial action by adding up the names highlighted red and orange in tabs 83 and 84 on an employee rather than a shift-by-shift basis as appears in those tabs, but the exercise would be pointless because I have concluded that s 557(1) applies. I am also concerned that such an exercise would be unfair to the MUA in circumstances where I rejected the MUA's proposition that the FWO's case required it to prove each and every employee was engaged in industrial action. The FWO obtained the benefit of my approach in the principal reasons and I then made declarations consistent with the principal reasons as sought by the FWO. The FWO should not now be permitted to go behind the declarations given the approach taken in the principal reasons.
109 I would respectfully adopt her Honour's reasons and on that basis dismiss this ground of appeal.
Ground 6: Error in finding that the CFMMEU organised a single instance of industrial action
110 Ground 6 contends that the primary Judge erred in finding that the CFMMEU organised a single instance of industrial action taken by the relevant employees during the period between 7 and 14 August 2015 at the Sydney and Brisbane terminals. The relevant finding is at [33] of the Penalty Judgment:
On the facts as found in the principal reasons it is apparent that the MUA was engaged in one overall concerted action to bring industrial pressure to bear on HPA not to implement the proposed redundancies at the Sydney and Brisbane terminals in a manner which the MUA considered would be in breach of the enterprise agreement, would result in the unlawful termination of around 100 employees, and destroy its own capacity to continue to function as an effective industrial organisation. On this basis the MUA organised industrial action by employees once, with that industrial action organised to occur in two locations, Sydney and Brisbane.
111 The Appellant contends that by organising industrial action, the CFMMEU must have persuaded or induced each employee to refuse or fail to attend work or not to perform work. Each employee is an independent person whose mind must be persuaded to take the industrial action. Necessarily, this means the CFMMEU took action to persuade and therefore organise each employee not to attend or perform work on each shift: see ABCC v CFMEU (Queensland Children's Hospitals Case) at [123]. It follows that the CFMMEU organised 278 separate instances of industrial action.
112 For the reasons given earlier I reject the proposition that the CFMMEU organised 278 separate instances of industrial action.
113 In the alternative, the Appellant submits that the CFMMEU at the very least engaged in two courses of conduct in organising two stoppages of labour at two locations.
114 The Appellant does not cavil with the proposition that the industrial action was organised as part of overall strategy by the MUA to bring industrial pressure to bear on HPA not to implement the proposed redundancies at the Sydney and Brisbane terminals. But it is submitted that a common intent or purpose is not in itself enough to establish a single act of "organisation" and that one must look at the actual conduct: Cahill v Construction Forestry Mining and Energy Union (No 2) (2008) 170 FCR 357 at [47].
115 The short point put is that the stoppages involved different workers, employed by different companies and at different locations and on that basis it is contended that each course of conduct in organising industrial action at the Sydney and Brisbane terminals were separate and distinct actions.
116 It is uncontroversial that in considering the applicability of the course of conduct principle one must look at the actual conduct. As their Honours Middleton and Gordon JJ observed in Cahill (at [47]):
What the single course of conduct principle recognises is 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.
117 Contrary to the Appellant's submission the primary Judge did look at the conduct of the MUA (see Liability Judgment at [25]–[90]; at [2] of the Penalty Judgment her Honour states that the reasons in the Penalty Judgment are to be read with the Liability Judgment "in which … the factual findings leading to the making of the declarations were made"). Further, the primary Judge addressed the specific factors identified by the Appellant at [39]:
As to the Sydney and Brisbane terminals, again, I accept that different MUA personnel were involved at some lower levels of action but it is also apparent from the principal reasons that the MUA was engaged, from its highest level down, in one concerted industrial campaign against HPA's proposed redundancies. While the corporate entities in Sydney and Brisbane were different, they were related HPA companies and, on the facts found in the principal judgment, the MUA was implementing a single plan directed at HPA as the ultimate corporate owner of both ports.
118 During the course of oral argument Senior Counsel for the Appellant accepted that her Honour's finding involved the exercise of a discretionary judgment and consequently the Appellant had to identify error within the principles in House v The King (1936) 55 CLR 499 at 504-505. It was not contended that the primary Judge had failed to take into account some material consideration or that her Honour had taken into account extraneous or irrelevant matters. Rather, the Appellant sought to rely on what is sometimes referred to as the last limb of House v The King (at 505), namely:
It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.
119 In short, the Appellant contended that no reasonable decision maker could have arrived at the conclusion reached by the primary Judge.
120 As noted earlier, the primary Judge was satisfied that what occurred at the Sydney and Brisbane terminals were contraventions arising from a single course of conduct by the MUA. In my view not only was that conclusion reasonably open to her Honour but, with respect, I agree with it.
121 As mentioned earlier, on 20 July 2015 HPA notified the MUA and its employees of its intention to reduce its workforce by 56 employees in Sydney and 41 in Brisbane. As her Honour observed in the Liability Judgment at [27]:
By 20 July 2015 HPA had notified the MUA and employees of its intention to reduce the workforce by 56 employees in Sydney and 41 in Brisbane. The MUA, rightly or wrongly, perceived that HPA's decision had been made without consultation and in breach of the enterprise agreement. It also perceived this proposal as an attempt to both introduce automation by stealth and to destroy the MUA's power at the terminals (referred to in the MUA's documents as "union busting") by discriminating against MUA delegates in the selection of employees to be sacked.
122 The industrial action was organised as part of an overall strategy by the MUA to bring industrial pressure to bear on HPA not to implement the proposed redundancies at the Sydney and Brisbane terminals. As her Honour put it: "the MUA perceived that it was being confronted with an existential threat of the utmost seriousness" (Liability Judgment at [30]). The industrial action was organised in response to that threat, as the primary Judge found at [55] of the Liability Judgment:
The withdrawal of labour at both terminals, it must be inferred, was intended to pressure HPA to meet with the MUA. HPA considered that it had offered to consult and been stymied in its attempts by the MUA. The MUA considered that HPA had never consulted and was setting about to destroy the MUA by discriminatory sackings so that it could automate the waterfront. Whatever the truth of these perceptions, the relevant fact for present purposes is that the industrial character and purpose of the action is plain; the employees withdrew their labour as a means of pressuring the employer to deal with the MUA about the sacking of the employees.
123 I accept, as contended by the Appellant, that the corporate entities employing the workers in Brisbane and Sydney were different; but the relevant point is that they were related HPA companies. It is also relevant to observe the industrial action at the two terminals took place within the same time period and meant that the two terminals could not operate between 7 and 14 August 2015.
124 In my view the facts point irresistibly to the conclusion that what occurred in Sydney and Brisbane were contraventions arising from a single course of conduct by the MUA.
COMPENSATION
Grounds 7, 8 and 9: Error in declining to make an order under s 545(1) that CFMMEU pay compensation
125 In the penalty proceedings the FWO sought an order that the MUA pay $620,217.34 in compensation to HPA. The amount sought was based on the evidence of Ms Mihalopulos as to the loss suffered as a result of the two terminals not operating between 7 and 14 August 2015. Despite Ms Mihalopoulos providing an affidavit quantifying the alleged loss suffered by HPA, her affidavit was silent as to whether HPA wished to be the beneficiary of a compensation order under s 545. Before Ms Mihalopoulos was excused from giving oral evidence the primary Judge raised her Honour's concern about the lack of evidence concerning HPA's position, but the FWO made the forensic decision to leave the evidence as it was and relied only on its submission that HPA's conduct and position were irrelevant, a submission which her Honour ultimately rejected.
126 The primary Judge declined to make an order for compensation and in doing so took into account the following considerations (Penalty Judgment at [61]):
(1) HPA is a multinational company well able to look after its own interests;
(1) there is evidence that the MUA and HPA managed to resolve their dispute following a process of conciliation undertaken by the Fair Work Commission;
(2) HPA has not at any time claimed compensation from the MUA in connection with the industrial action; and
(3) I do not know what HPA's position is in respect of the payment of compensation...
127 The FWO submits that her Honour erred in failing to order compensation in this case for two reasons. First, s 545(1) is remedial in purpose and the remedial purpose of righting the consequences of the MUA's unlawful conduct has not been met by the primary Judge declining to make a compensation order. Second, in light of the remedial purpose of s 545(1), the factors to be taken into account in determining whether it is appropriate to grant an order must be directed to this purpose and the primary Judge erred by taking into account irrelevant considerations that are not directed to this purpose.
128 For the reasons which follow both propositions must be rejected.
129 Section 545 of the FW Act provides:
(1) The Federal Court or the Federal Circuit Court may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.
(2) Without limiting subsection (1), orders the Federal Court or Federal Circuit Court may make include the following:
(a) an order granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention;
(b) an order awarding compensation for loss that a person has suffered because of the contravention;
(c) an order for reinstatement of a person.
…
(4) A Court may make an order under this section:
(a) on its own initiative, during proceedings before the Court; or
(b) on application.
130 Section 545 confers a broad and flexible power to make "any order the Court considers appropriate". The breadth of the power was acknowledged in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3; (2018) 351 ALR 190 at [103] in which Keane, Nettle and Gordon JJ (at [103]) (Gageler J expressing approval at [51]) said:
the first and most immediate point of significance is the breadth of the terms in which s. 45(1) empowers the court to make any order the court considers appropriate. What is 'appropriate' for the purpose of s.545(1) falls to be determined in light of the purpose of the section and is not to be artificially limited. As the ABCC submitted, such broad terms of empowerment are constrained only by limitations that are strictly required by the language and purpose of the section.
131 The joint judgment went on to observe (at [110]) that despite the breadth of the power conferred by s 545(1), it is limited by its context to making appropriate preventative, remedial and compensatory Orders and as such does not include a power to make penal Orders.
132 Further, as is clear from s 545(2)(b) a necessary condition for the making of an Order for compensation is that loss is suffered because of the contravention. As Barker J put it in Australian Licenced Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd [2011] FCA 333; (2011) 193 FCR 526 at [423] (the Australian Aircraft Case), "this requires an appropriate causal connection between the contravention and the loss claimed". (Also see Maritime Union of Australia v Fair Work Ombudsman and Skilled Offshore (Australia) Pty Ltd [2015] FCAFC 120 at [20]). It necessarily follows that any order for compensation is an order directed to compensating a person for such a loss. As Katzmann J observed in Shizas v Commissioner of Police ([2017] FCA 61 at [209]) the focus of such an order is "in a loose sense, the restoration of those affected by a contravention to the positions they would have occupied but for its occurrence".
133 The first point advanced by the FWO demands acceptance of the proposition that once the contravention of a civil penalty provision has been proven the Court may only decline to exercise its discretion to order an appropriate remedy if the relief would not be directed to the remedial purpose. The FWO advanced the same submission in the penalty proceedings and it was rejected by the primary Judge for these reasons (Penalty Judgment at [53]):
If this were so, it would be tantamount to saying that if loss has been suffered as a result of a contravention there is no discretion to exercise, as an order for compensation must be made. This is not what s 545 provides.
134 I respectfully agree with her Honour. The adoption of the proposition advanced by the FWO would be an unwarranted fetter on the exercise of what the legislature clearly intended to be a discretionary decision. As Bowen LJ observed in Gardner v Jay (1885) 29 ChD 50 at [58]:
When a tribunal is invested by Act of Parliament or by Rules with a discretion, without any indication in the Act or Rules of the grounds upon which the discretion is to be exercised, it is a mistake to lay down any rules with a view to indicating the particular grooves in which the discretion should run, for if the Act or the Rules do not fetter the discretion of the Judge why should the court so do.
(Also see JJ Richards & Sons Pty Ltd v Fair Work Australia [2012] FCAFC 53 at [63] per Flick J, with whom Tracey J agreed (at [33]); and Dix v Crimes Compensation Tribunal [1993] 1 VR 297 at 302.)
135 As to the second point advanced by the FWO, the discretion conferred by s 545(1) is relatively unconfined, in the sense that the latitude as to the choice of the decision to be made is considerable: Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission (2000) 203 CLR 194 at [19] per Gleeson CJ, Gaudron and Hayne J.
136 Section 545 contains no positive indication of the considerations upon which the Court is to determine whether a compensation order is to be made. Consistent with principle, the power is to be exercised judicially, that is to say not arbitrarily, capriciously or so as to frustrate the legislative intent. But, subject to such considerations the discretion conferred is unconfined except insofar as "the subject matter and the scope and purpose" of the legislation may enable an appellate Court to pronounce the reasons given by the primary Judge to be "definitely extraneous to any objects the legislature could have in view": Oshlack v Richmond River Council [1998] HCA 11; (1998) 193 CLR 72 at [22] per Gaudron and Gummow JJ.
137 A consequence of the FWO's argument would be that in every case the Court would be prohibited from having regard to the conduct and position of the person in whose favour a compensation order is sought.
138 As mentioned earlier, the object of the FW Act is to provide "a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians" by the means set out in s 3(a) to (g). The objective of providing a "balanced framework for cooperative and productive workplace relations" finds expression in various parts of the FW Act. For example, in the factors that the Fair Work Commission must take into account in deciding upon the terms of a workplace determination (including the conduct of the bargaining representatives) set out in s 275, and the criteria for determining the amount of compensation to be paid to a person who has been unfairly dismissed (including the efforts of the person to mitigate their loss) in s 392(2).
139 Plainly, the matters to be considered in relation to s 545 must bear some relationship to the power being exercised. But I see no warrant in the subject matter and scope of the provision and purpose of the Act which would preclude the Court from considering a range of contextual matters, including the conduct of the person who suffered the loss and whether that person's position with respect to compensation is known, and if so, what that position is. Such considerations may well be relevant and accorded weight depending on the circumstances of the case.
140 The FWO contends that it seeks and obtains compensation orders against employers on behalf of employees in circumstances where the position of the individual employees as to whether or not they wish to receive compensation is unknown; and that if evidence is required of each employee's position it could potentially undermine the FWO's ability to ensure compliance with the FW Act.
141 The point put is misconceived. A conclusion that in the circumstances of this case it was a relevant consideration that HPA's position in respect of the payment of compensation was unknown, does not mandate that the position of the beneficiary of a compensation order will be a relevant consideration in every case. In the circumstances referred to by the FWO it would be entirely appropriate to infer, without evidence, that employees not paid wages or other safety net contractual entitlements would wish to be compensated. Indeed s 541 expressly provides that the FWO may apply for a compensation order on behalf of an employee in relation to the employer's contravention of a safety net contractual entitlement of the employee.
142 The approach adopted by the primary Judge is also consistent with the application of s 545 in other cases.
143 In the Australian Aircraft Case Barker J awarded compensation (pursuant to s 545(2)(b)) for a contravention of ss 340 and 346 of the FW Act and in doing so took into account that the applicant had sought to mitigate his loss by attempting to obtain alternative employment in his field. Similarly, in Flavel v RailPro Services Pty Ltd (No 2) [2013] FCCA 1449 the primary Judge took into account Mr Flavel's duty to mitigate his loss by taking steps to obtain other suitable employment; an approach which was not the subject of criticism in the subsequent appeal judgment [2015] FCA 504 at [163] (see further Kennewell v MG & CG Atkins T/as Cardinia Waste & Recyclers [2015] FCA 716 at [84]).
144 Further, in considering whether to order the reinstatement of a person pursuant to s 545(2)(c) the Court has had regard to a range of contextual matters, including the size of the business to which such an order is directed, and the effect of the conduct of the person seeking the order on the relationship of trust and confidence between the parties: Kennewell v MG & CG Atkins T/as Cardinia Waste & Recyclers [2015] FCA 716 at [77]–[78].
145 At [55] of the Penalty Judgment the primary Judge set out a passage from Qantas Airways Ltd v Transport Workers' Union of Australia (No 2) [2011] FCA 816 per Moore J; (2011) 211 IR 119 (Qantas) describing it as consistent with her Honour's conclusions. At [56] her Honour made the following observation:
His Honour's essential point (as relevant to this case) was that where compensatory orders would tend to remedy a pecuniary loss that was brought about in part by a person's own unreasonable conduct, or would tend to endanger present relations to the detriment and disturbance of the relevant parties or industry, compensation orders may not be appropriate or even "remedial".
146 The FWO submits that the primary Judge's reliance on Qantas was "misplaced" and that (at [56] of the Penalty Judgment set out above) her Honour placed a gloss on the judgment of Moore J in Qantas. The FWO further submits that implicit in her Honour's observation is a finding "that HPA acted unreasonably in provoking the industrial action and that compensation orders would disturb the existing relationship between the parties" (Appellant's Outline of Submissions in Reply at [27]). These submissions are devoid of merit.
147 Taking the last submission first, in declining to exercise her discretion to order compensation the primary Judge made no mention of HPA's conduct. It is not one of the circumstances set out at [61] of the Penalty Judgment as informing her Honour's decision not to make any order of compensation against the MUA and in favour of companies within HPA. At [54] her Honour is making a general observation about the breadth of considerations which may be relevant depending on the circumstances of the case:
Consistent with principle, the only limits on the matters that may legitimately be considered in the exercise of discretion under s 545 are those arising by necessary implication from the scope, purpose and objects of the legislation. I see nothing in the scope, purpose and objects of the legislation which would preclude the Court from considering a wide range of matters including the conduct of the person who suffered the loss and whether that person's position with respect to compensation is known, and what that position is. The FWO's contrary submission should be rejected. In particular, I do not accept the FWO's argument by analogy that it seeks and obtains compensation orders on behalf of employees against employers when the position of individual employees as to whether they wish to receive compensation or not is unknown. In the example provided by the FWO it may well be appropriate to infer without evidence that employees not paid wages or other amounts to which they were legally entitled would wish to be compensated. The point for present purposes is that if a consideration is irrelevant it is prohibited from being taken into account in all cases. The FWO would have it that, in every case, the Court is prohibited from having regard to the conduct and position of the person in whose favour a compensation order is sought. It is this proposition which I consider must be rejected. Such a consideration may well be relevant and have weight depending on the circumstances of the case.
148 I also reject the proposition that the primary Judge placed a "gloss" on Qantas and that her Honour's reliance upon that judgment was misplaced. Rather, it is the FWO who has misconceived the import of Qantas. Nothing Moore J said in Qantas supports the FWO's contention regarding the limitations as to the matters the Court may take into account in determining whether it is appropriate to grant a compensation order. Moore J said about an equivalent provision (s 494(5)(b) of the Workplace Relations Act 1996):
[9] However, I should observe at this stage that the nature of the discretion to order the payment of a sum to remedy the effects of industrial action is not, in my opinion, exercisable by reference to general considerations of fairness. It is a power conferred for a specific purpose as part of a statutory scheme which made certain conduct unlawful. Whether this proscription of conduct is, in some broad sense, fair, desirable or appropriate is not a matter for me to assess. Also whether engaging in proscribed conduct might, in any given situation, be reasonable or justifiable on broad grounds concerning fairness or "industrial justice" is again not a matter for me to assess. Once it is accepted that the purpose of the conferral of the power to make an order to remedy the effects of industrial action is to address the consequences of unlawful industrial action then the exercise of the discretion both to make an order and to determine the terms on which it is made, is limited.
[10] It would be undesirable for me to endeavour to catalogue in a comprehensive way, considerations which might inform the exercise of the discretion. However, I can deal with those that appear to me as possibly arising in the present case. First, an application needs to be made for an order, at least in the ordinary course. Qantas need not have, but has, made such an application. Another employer in similar circumstances might conclude that, on balance, it was preferable not to risk alienating or antagonizing its workforce, and the union and its officers representing them, by seeking an order for payment of money from union funds. However, Qantas has a legal right to seek an order and it has exercised that right. It is entitled to do so.
[11] Another consideration would be whether the application for the order was bona fide. By that I mean the order was not being sought for an ulterior purpose. There has been no suggestion in the evidence or in the submissions that Qantas has sought the order, not simply to secure payment to compensate it for losses suffered, but rather to secure some advantage in future workplace negotiations with the TWU and its members which Qantas employs. Such negotiations are, I assume, imminent as EBA 7 nominally expired on 1 July 2011. Had there been such an ulterior purpose, I would not make the order I propose to make.
[12] Another consideration would be whether the effect of the industrial action was occasioned, in whole or in part, by the unreasonable conduct of the party seeking the order and, in particular, unreasonable conduct in response to the industrial action. In the present case the respondents submitted it was. They pointed to Qantas acting at SIT, Brisbane, Adelaide and Perth on the basis that it was obliged not to pay the TWU members who had engaged in some form of industrial action four hours pay. This, the respondents pointed out, was not the approach Qantas adopted at SDT where some industrial action was effectively sanctioned by local management, the employees told their pay would not be docked and they returned to work. I must acknowledge the difference in approach. However, the response at SIT, Brisbane, Adelaide and Perth was not the unreasonable one, in the circumstances. On one view of s 507 (but not, in my opinion, the correct view) the employer has no capacity to agree or approve of industrial action after it has taken place. On that view Qantas was obliged to take the approach it did. Also it was not unreasonable to inform the TWU membership of the consequences for them of what they had done. I would not infer that Qantas' response (even though one of the principal architects of the response, Brad Moore, was not called) was anything other than a genuine response to events as they unfolded, based on the legal effect of s 507 as understood by Moore and others. (Emphasis added)
149 It is plain from the highlighted passages that the observations of Moore J in Qantas are consistent with the views expressed by the primary Judge. Moore J's statement (at [9] in the extracted passage) that the discretion is not exercisable by reference to general considerations of fairness means no more than that an order under s 545 is directed at compensating a person for loss suffered because of the contravention. It is not a power to grant a remedy at large based simply on general considerations of fairness. But such an observation does not imply that the factors to be taken into account in determining whether it is appropriate to grant an order must be confined to the remedial purpose of the order. So much is clear from the balance of Moore J's judgment.
150 As to the particular matters the primary Judge identified (at [59] of the Penalty Judgment) as relevant and as persuading her Honour to make no order for compensation, the Appellant submits that there was no requirement for HPA to commence its own proceeding in order for a compensation order to be made. The proceeding had been commenced by the FWO in the FWO's role as a regulator, which is an independent function, separate from the interests of the private parties: Tomlinson v Ramsay Food Processing Pty Limited (2015) 256 CLR 507 at [45]–[46] and [114].
151 In circumstances where proceedings had been commenced by the regulator, it may be accepted that there was no requirement for HPA to commence its own proceedings in order to be the beneficiary of a compensation order. Indeed, the Court may make such an order on its own initiative (s 545(4)(a) of the FW Act). But the absence of such a requirement does not mean that the matters to which the primary Judge had regard were irrelevant considerations. The fact that HPA had never sought compensation; that it had resolved the dispute with the MUA on terms which it may be inferred were acceptable; and that despite a senior employee of HPA giving evidence, that evidence was silent about whether HPA wished to be the beneficiary of a compensation order were, not irrelevant considerations.
152 There is one final matter. Appeal Ground 9 asserts that if the position is that the FWO needed to establish that HPA wanted compensation (which the Appellant disputes), then that position of HPA should have been inferred by:
(a) "the filing of an affidavit on the question of compensation by Harriet Mihalopoulos sworn 12 April 2017, Ms Mihalopoulos being the General Manager, Human Resources and industrial Relations for HPA; and/or
(b) FWO pursuing the order for compensation."
153 In oral argument Senior Counsel submitted that it was "not permitted for her Honour to conclude that they [HPA] didn't want [a compensation order]" in circumstances where HPA had one of their senior employees swear an affidavit in support of the calculation of the loss (transcript p32).
154 Senior Counsel then went further, submitting that "the primary purpose for Ms Mihalopoulos being called was directed to compensation" (transcript p33). The evidentiary basis for this submission was not put and if counsel was seeking to give evidence as to the purpose of Ms Mihalopoulos being called, that was entirely inappropriate.
155 The short point put seems to be that the primary Judge erred in her characterisation of HPA's position in respect of the payment of compensation and that her Honour should have drawn an inference from Ms Mihalopoulos' evidence that HPA wished to be compensated.
156 This point is devoid of merit. No inference of the type now sought to be drawn was sought before her Honour. Ms Mihalopoulos' evidence as to HPA's loss as a consequence of the contravention was not solely relevant to a compensation order; that evidence was relevant to penalty and was taken into account in that regard (see Penalty Judgment at [42(4)]). I do not propose to lengthen this judgment by elaborating further upon the poverty of the point.
CONCLUSION
157 For the reasons given, I would uphold Ground 1, set aside the primary Judge's Order of 10 July 2018 and remit the issue of penalty to the primary Judge for further hearing. I would dismiss the other grounds of appeal.
I certify that the preceding one hundred and forty-seven (147) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ross. |
Associate:
Dated: 2 May 2019
REASONS FOR JUDGMENT
RANGIAH J:
158 I have had the considerable advantage of reading the judgment of Ross J in draft. I gratefully adopt his Honour's description of the facts, the primary judgment and the parties' submissions. I also adopt his Honour's abbreviations.
159 The amended notice of appeal sets out nine grounds. The first six allege that the primary judge misconstrued or misapplied s 557 of the FW Act, and the remaining three allege that her Honour erred in failing to order compensation in favour of HPA.
160 I will start by considering the first ground, which occupied the bulk of the parties' attention in the appeal. That ground alleges, in effect, that the primary judge ought to have held that the application of s 557(1) of the FW Act was excluded by s 557(3) on the basis that pecuniary penalties had previously been imposed on the MUA for earlier contraventions of s 417(1).
The legislation
161 Part 4–1 of Chapter 4 of the FW Act is entitled "Civil remedies". Section 546(1) provides:
546 Pecuniary penalty orders
(1) The Federal Court, the Federal Circuit Court or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.
162 The civil remedy provisions, and the maximum penalty that may be imposed for a contravention of each such provision, are set out in s 539 of the FW Act.
163 The power of a court under s 546(1) of the FW Act to order payment of an "appropriate" penalty is limited by s 557. That section provides, relevantly:
557 Course of conduct
(1) For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:
(a) the contraventions are committed by the same person; and
(b) the contraventions arose out of a course of conduct by the person.
(2) The civil remedy provisions are the following:
…
(j) subsection 417(1) (which deals with industrial action before the nominal expiry date of an enterprise agreement etc.);
…
(3) Subsection (1) does not apply to a contravention of a civil remedy provision that is committed by a person after a court has imposed a pecuniary penalty on the person for an earlier contravention of the provision.
The judgment of the primary judge
164 The primary judge found that the MUA committed multiple contraventions of s 417(1) of the FW Act between 7 and 14 August 2015. Her Honour found that those contraventions arose out of a single course of conduct. Her Honour held that the contraventions were, under s 557(1), taken to constitute a single contravention.
165 In so holding, the primary judge rejected the FWO's submission that s 557(3) of the FW Act operated to exclude the application of s 557(1). Her Honour held that s 557(3) "is concerned with pecuniary penalties that have previously been imposed on the same person in respect of the same course of conduct". Her Honour found that while pecuniary penalties had previously been imposed upon the MUA for earlier contraventions of s 417(1), they were unrelated to this course of conduct. Accordingly, her Honour held that s 557(3) was not engaged.
166 The primary judge held that as s 557(1) of the FW Act applied to the MUA's multiple contraventions, those contraventions were taken to constitute a single contravention. The maximum penalty for a single contravention of s 417(1) was $54,000, and her Honour imposed a penalty of $38,000.
The alternative constructions of s 557(3) of the FW Act
167 The primary judge's construction of s 557(3) of the FW Act is one of two possible constructions. The alternative, contended for by the FWO, is that s 557(3) applies where there has been a pecuniary penalty imposed for an earlier contravention of the same civil remedy provision even if the earlier contravention is unrelated to the present contravention. On that construction, the earlier pecuniary penalties imposed on the MUA for contraventions of s 417(1) could engage s 557(3), such that s 557(1) would not apply.
168 The outcome would, however, be subject to an issue stemming from Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153 identified by Ross J, but not addressed by the parties. That issue is whether any of the earlier penalties can be regarded as being for contraventions of the same civil penalty provision.
Consideration
169 While I appreciate the force of the primary judge's reasoning, I respectfully prefer the FWO's construction of s 557(3) of the FW Act.
170 There are textual difficulties with the construction favoured by the primary judge. Section 557(3) of the FW Act does not say that the earlier contravention must be one that arises in the same course of conduct as the later contravention. On the other hand, s 557(3) uses the indefinite article "an". That attaches a level of generality to the succeeding words that is consistent with the FWO's construction.
171 The primary judge considered that the FWO's construction impermissibly construes s 557(3) literally. In so saying, her Honour accepted, as I have, that the FWO's submission is consistent with a literal construction of s 557(3). However, her Honour considered that a literal construction is impermissible because it involves reading the provision in isolation from its context, and not purposively.
172 As to context, the primary judge observed that s 557(3) of the FW Act is an exception to s 557(1). Her Honour considered that s 557(3) must be read as creating an exception for matters that would otherwise be subject to s 557(1), that is, matters "which comprise a single and continuing course of conduct". Her Honour's opinion was that the FWO's construction ignores this context and reads s 557(3) as if it extends to cases to which s 557(1) would not otherwise apply. Her Honour considered that once it is recognised that s 557(3), being an exception, "does no more than exclude from s 557(1) cases that would otherwise be within the scope of that provision", it is apparent that the only cases that are excluded are those where a pecuniary penalty has been imposed for an earlier contravention forming part of the same course of conduct.
173 It is unclear what the primary judge meant when referring to s 557(1) of the FW Act as comprising a "continuing" course of conduct. Her Honour's proposition that s 557(3) of the FW Act is an exception to s 557(1) is obviously correct, as is the proposition that s 557(3) does no more than exclude from s 557(1) cases that would otherwise be within the scope of that provision. However, to merely state these propositions does not address the critical question: What is excluded?
174 It can certainly be accepted that s 557(3) of the FW Act operates to exclude from s 557(1) cases where a pecuniary penalty has already been imposed on the same person for a contravention committed in the same course of conduct. However, it is not obvious why the consequence based on a textual construction of s 557(3) – that the provision may extend to cases where a pecuniary penalty has been imposed for an earlier contravention unrelated to the later course of conduct – should be regarded as outside its scope.
175 The application of s 557(1) of the FW Act is expressed to be "subject to subsection (3)". Obviously, s 557(3) must be construed in the context of s 557 as a whole, including that it is an exception to s 557(1). However, that is not the only matter of context. The broader sentencing regime under Part 4–1 must be also considered. It is from consideration of the whole of the context that the purpose of s 557(3) emerges.
176 The primary judge considered the purpose of s 557(3) of the FW Act, holding that the provision is intended to apply where there is a single course of conduct that continues after the imposition of a pecuniary penalty. If that were the only purpose of the provision, it would have a very narrow field of operation. That scenario would require, in order: contraventions; proceedings brought; a finding by a court that such contraventions occurred and the imposition of a pecuniary penalty; and then more contraventions; etc. All the contraventions would have to arise out of the same course of conduct. That seems unlikely, as there would usually be at least a temporal disconnection, enforced by injunctions if necessary, between the contraventions committed before and after the pecuniary penalty. A scenario like that is not impossible to imagine, but would be rare. That rarity tends against the scenario identified as being the sole target of s 557(3). In any event, if such a scenario did arise, it would also be caught by the broader interpretation of s 557(3) contended for by the FWO.
177 Section 546(1) of the FW Act empowers a court to, "order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision." The effect of s 546(1) and (2) is that a court may impose a pecuniary penalty up to the maximum amount for each contravention. However, s 557(1) operates as a limitation upon the power of a court under s 546(1). Section 557(1) limits the power to impose the penalty "the court considers appropriate" by providing that multiple contraventions are "taken to constitute a single contravention", so that the court can only impose a single penalty for that single contravention.
178 In Rocky Holdings it was held at [18] that the object and purpose of s 557 is to ensure that an "offender is not punished twice for what is essentially the same criminality". In that sense, s 557(1) must be understood as related to the course of conduct principle under the general or common law, although, as will be discussed, it does not adopt that principle completely.
179 Section 557(1) of the FW Act applies in respect of two or more contraventions of "a civil remedy provision set out in subsection (2)". Section 557(2) sets out some of the civil remedy provisions contained in s 539, but not all. There are 20 civil remedy provisions set out in s 557(3), in four broad categories. The categories are: industrial instruments or statutory provisions that prescribe rights and obligations of employers and employees; provisions dealing with industrial action; provisions dealing with record keeping and other administrative requirements; and other civil remedy provisions prescribed under regulation. The commonality of those provisions is that they may readily be contravened multiple times by the implementation of a single decision, purpose or action. For example, where a single misinterpretation of an industrial instrument leads to dozens of employees being underpaid on dozens of occasions, the employer may have committed hundreds of contraventions. Where numerous employees engage in a single event of industrial action in contravention of s 417(1), a union that is knowingly concerned in the action may be taken under s 550 to have engaged in as many contraventions as there were employees. In these examples, the multiple contraventions may be understood to arise out of a single course of conduct.
180 Section 557(1) of the FW Act deals with contraventions that "arose out of a course of conduct". The concept of a course of conduct is a familiar one in sentencing for criminal offences, and has been adapted to sentencing for civil penalty contraventions.
181 The common law course of conduct principle has been considered in a number of recent judgments of the Full Court. The principle recognises that where there are multiple contraventions arising out of a single course of conduct, there is a danger of a contravener being punished more than once for essentially the same offending conduct. However, the principle does not involve a simplistic transposition of multiple contraventions into one contravention, or, necessarily, the imposition of only one penalty. The court's task is to evaluate the conduct and its course and assess what penalty is, or penalties are, appropriate for the contraventions: see Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Nine Brisbane Sites Appeal) [2019] FCAFC 59 at [10] – [12], [123] – [124] and [132]; Transport Workers' Union Australia v Registered Organisations Commissioner [No 2] [2018] FCAFC 203 at [84] and [92]; and the authorities referred to therein. That may, but will not necessarily, result in a single penalty being imposed for multiple contraventions arising out of a course of conduct.
182 In contrast, under s 557(1) of the FW Act, multiple contraventions arising from a course of conduct are taken to constitute a single contravention, for which only a single penalty can be imposed. It may be seen that s 557(1) of the Act does not wholly adopt the common law course of conduct principle, but modifies it.
183 As I have said, s 557(1) of the FW Act was regarded in Rocky Holdings at [18] as a protection against double punishment. Seen in that context, s 557(3) withholds from a contravener a protection that would otherwise be conferred by s 557(1). However, s 557(3) does not remove the protection against double punishment conferred under the course of conduct principle. The primary judge held that where s 557(1) does not apply because of s 557(3), the course of conduct principle would apply, and I respectfully agree. If s 557(1) does not apply, a court is left with the instruction of s 546(1) to impose a pecuniary penalty that "the court considers is appropriate". Where there are multiple contraventions, assessment of an appropriate penalty must take into account whether the factual or legal circumstances overlap to an extent that there is a risk of multiple punishments for what is essentially the same contravention. In other words, the course of conduct principle must be considered.
184 Section 557(3) of the FW Act, having withheld the absolute protection against more than one penalty conferred by s 557(1), leaves the contravener with the same protection as a person who commits, within a single course of conduct, multiple contraventions of a civil penalty provision not set out in s 557(2). That protection is the course of conduct principle. That does not automatically or necessarily mean that a single penalty must be imposed, but, rather, that the sentencing court is left to decide what penalty is, or penalties are, appropriate.
185 These matters are consistent with a legislative intention that s 557(3) of the FW Act will be engaged where a pecuniary penalty has been imposed for an earlier contravention of a civil remedy provision set out in s 557(2) and the same person later contravenes the same provision, even if the later contravention is unrelated to the earlier one. That this is the intention is unsurprising. On the construction favoured by the primary judge, no matter how many times a recidivist has contravened the same civil remedy provision in the past, and no matter how wilful, harmful or extensive the contravening conduct presently under consideration may be, the court would be restricted to imposing only a single pecuniary penalty. That would be inconsistent with the primary (probably, only) object of a pecuniary penalty as a deterrent: cf Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 258 CLR 482 at [55].
186 Finally, the contrast between the drafting of s 556 and s 557(3) of the FW Act tells against the primary judge's construction. Section 556 also deals with protection of a contravener from double punishment. It 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 a law of the Commonwealth "in relation to that conduct". The phrases "particular conduct" and "in relation to that conduct" make clear that the pecuniary penalty must have been ordered in relation to the same conduct. In contrast, the language used in s 557(3) is general, referring only to "an earlier contravention of the provision", and that is consistent with the FWO's construction.
187 Section 557(1) of the FW Act requires a court to treat a person who is, for the first time, to be penalised for multiple contraventions of a civil remedy provision set out in s 557(2) with a degree of leniency (or at least, without undue severity) where the contraventions arise out of a single course of conduct. However, if the same person has previously contravened the same provision, the effect of ss 557(3) and 546(1) is that it is left for the court to assess the appropriate number of penalties, as well as their scale.
188 Where a court has imposed a pecuniary penalty for an earlier contravention of a civil remedy provision set out in s 557(2), s 557(3) of the FW Act is engaged where the same person again contravenes the same civil remedy provision, even if the contraventions are unrelated.
189 However, I agree with Ross J that the reasoning in Rocky Holdings raises further issues, not addressed in this appeal, concerning the construction and application of s 557(3) of the FW Act. In particular, there may be an issue as to whether, in the circumstances of a particular case, there has been another contravention of the same civil remedy provision. The relevant language in s 557(1) and (3) is similar but not identical and, in the absence of argument, I prefer not to express any opinion, provisional or otherwise, upon those issues.
190 For these reasons, the first ground of appeal should be upheld.
The remaining grounds of appeal
191 The second ground of appeal asserts that the primary judge erred in holding that s 557(1) of the FW Act does not exclude the common law course of conduct principle in respect of the civil remedy contraventions set out in s 557(2). For the reasons I have given at [183], as well as the reasons given by Ross J, the second ground of appeal should be rejected.
192 I agree with the reasons given by Ross J for rejecting the remaining seven grounds of appeal.
193 I concur with the orders proposed by Ross J.
I certify that the preceding thirty-six (36) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rangiah. |
Associate:
Dated: 2 May 2019
