FEDERAL COURT OF AUSTRALIA

Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union v DMG Industries Pty Ltd [1999] FCA 735

INDUSTRIAL LAW – contraventions of s298K of the Workplace Relations Act 1996 (Cth) by respondent – penalty to be imposed – appropriate factors to be taken into account – whether appropriate for penalty to be paid to the applicant union – whether appropriate for penalty to be paid to an individual.

Workplace Relations Act 1996 (Cth) ss178(2), 298K, T & U, 349 & 356(b)

AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING & KINDRED INDUSTRIES UNION v DMG INDUSTRIES PTY LTD

VG 272 OF 1998

MARSHALL J

MELBOURNE

 2 JUNE 1999

THE COURT ORDERS THAT:

1.                  A penalty of $5,000 be imposed on the respondent for contravention of Part XA of the Workplace Relations Act 1996 (Cth) (“the Act”) by the respondent on 1 May 1998 in the circumstances referred to in the reasons for judgment herein.

2.                  Pursuant to s356(b) of the Act $3,000 of the penalty referred to in the order numbered one be paid to Mr Manoel Fernandes within 21 days of the date of this order.

3.                  Pursuant to s356(b) of the Act $2,000 of the penalty referred to in the order numbered one be paid to Mr Cherian Mammen within 21 days of the date of this order.

4.                  No penalty be imposed on the respondent in respect of the remaining four contraventions of Part XA of the Act referred to in the reasons for judgment herein and occurring on 29 April 1998, 15 June 1998 (twice) and 19 June 1998.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

REASONS FOR JUDGMENT

1                     On 25 June 1998 the applicant, the Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union (“the Union”) made application pursuant to s298T of the Workplace Relations Act 1996 (Cth) (“the Act”) for orders under s298U of the Act in respect of certain conduct of the respondent, DMG Industries Pty Ltd (“DMG”) which was alleged to be in contravention of Part XA of the Act.

2                     The application was heard by the Court on 27, 28 and 29 April 1999. On the morning of the last day of the hearing counsel for DMG, Mr Frank Parry, advised the Court that agreement had been reached between the parties which would result in the Court only being required to consider the question of what penalties ought be imposed on DMG for five contraventions of Part XA of the Act.

Background Facts

3                     The following facts were not in contest:

·        DMG is a medium sized company which operates in the manufacturing industry.  Inter alia the company produces tools which are used in the automotive industry.

·        DMG employed, at all material times, Mr Manoel Fernandes and Mr Cherian Mammen as tool makers at its premises in Keysborough, an outer suburb of Melbourne. Both men joined the Union in October 1997.

·        At all material times the following persons held the respective positions referred to below with DMG :

Mr Dimitri Glavinic-           managing director

Ms Kate Taussig                -           personnel officer

Mr Ronald Snow               -           tool room group leader

Mr Carlos Anguita-           senior team leader in the tool room

Mr Gary Krug                    -           a team leader in the tool room

·        Mr Kim Elliott, at all material times, was an organiser employed by the Union. His duties extended to attending to the industrial interests of employees of DMG who were engaged in DMG’s tool room.

·        On 29 April 1998 Mr Glavinic, in the company of Mr Krug, approached Mr Fernandes to inquire about the Union’s presence in the tool room. In the course of that conversation Mr Glavinic said to Mr Fernandes words to the following effect:

“If you push for the union I will sack you, do you have money to fight? The union cannot do anything for you, they are useless. If I sack you no other tool room will employ you, do you know that?”

·        On 1 May 1998 Mr Glavinic addressed DMG’s afternoon shift tool room employees, including Mr Fernandes and Mr Mammen. Mr Glavinic’s address was in the following form:

“What I want to tell you I hear a lot of things here union, union, unions but I want to warn you we don’t want the union here, we have been for so many years without union and we going to stay without union.

If somebody is not productive and does not obey the law of the company doesn’t matter you are in the union or not union we can’t afford to have you here, but I tell you if you are working hard and doing a good job and everything nobody is going to sack you and we don’t want to put nobody out, but please do not buggerise with the union and I am telling everyone which is in the union I will get him out from here, doesn’t matter he can go to father God if he wants but he will be out from here, so I am just telling you, forget about union, concentrate on the job and nobody, I guarantee you nobody, will be dismissed from here. I want you to work as a team and concentrate on the job not thinking about the bloody union.

Why you have to pay the union money, what you get from the union, you get nothing just pay them and the union leaders have a good job, a good life don’t you worry.

They are not wearing the dirty dust coats like you and you have to pay them with the money. For me it wouldn’t make any difference if you are in the union or not the main thing is we produce, because today everything is competitive, if we can’t beat the competition and keep competition we are gone, so forget about the union, I don’t want to hear nothing about union.

We have to work together and pull together as a team.

Do we understand.  Who is in the union I tell him, I’m telling him now, get out from the union, the union is not going to help you.  I’m your union, I’m giving you the job and I’m looking after you.  Anyone who has got a problem should come to see me through your team leaders, through your management.

OK. gentlemen is it clear to everyone.  OK. Thank you.

I’m telling you again everyone who is in the union here is not going to stay here. One way or another he will be out and you looking for another job in another tool room if they hear that you are in the union nobody will take you, because we have enough problems to get a job, because the jobs is so competitive and is not much, not much work is around.

I am telling you we are only one tool room which is very busy and we are going to be very busy, only tool room in Australia.

Please listen and respect your jobs, but look after your jobs.

OK, thank you, that’s all I can tell you.”

·        Mr Elliott arranged to meet with employees of DMG who were members of the Union at DMG’s premises on 15 June 1998 during the lunchbreak, commencing at 12 noon.

·        At about 11.20 am on 15 June 1998, Mr Snow told Mr Fernandes that those employees who wanted to meet with Mr Elliott could do so one on one commencing at 12 noon and that they could not meet together in a large group.

·        Mr Fernandes decided that the meeting would be held outside DMG’s premises so that those who wanted to attend could meet as a group.

·        For several minutes between 11.20 am and 12 noon on 15 June 1998 Mr Fernandes spoke with other employees in the tool room to inform them that the meeting would be held outside.

·        At the meeting on 15 June 1998 Mr Fernandes was elected shop steward and later became an official delegate of the union.

·        At about 1.25 pm on 15 June 1998 Mr Glavinic said to Mr Fernandes words to the following effect:

“I have seen what you have done this afternoon. I will sack you. Don’t tell me afterwards that I did not warn you.”

·        At about 1.35 pm on 15 June 1998 Mr Glavinic said to Mr Mammen words to the following effect:

“I warned you not to join the union. You’ll see what I can do now, you go and look for another job. You ask the union for another job. You go to the union meeting. I’ll fix you.”

·        When making those threats, Mr Glavinic spoke in a loud voice, stood very close to Mr Mammen and poked his finger into Mr Mammen’s chest.

·        At about 1.30 pm on 17 June 1998, Mr Snow, Mr Anguita and Ms Taussig counselled Mr Fernandes for wasting time by talking to other employees in the tool room on 15 June 1998, when Mr Fernandes was informing these employees that the union meeting would be held outside DMG’s premises.

·        On 19 June 1998 Mr Fernandes was given a “second written warning” for wasting time on 15 June 1998. He was previously recorded on DMG’s records as having received a written warning in December 1997 for wasting time by spending too long in the toilet when he was suffering from diarrhoea.

·        Mr Fernandes did not receive his “first written warning” until 19 June 1998.

Contravention of Part XA of the Act

4                     It was conceded by Mr Parry that the conduct of Messrs Glavinic, Snow, Anguita, Krug and Ms Taussig was conduct engaged in on behalf of DMG within the scope of the actual or apparent authority of such persons and thereby was conduct engaged in by DMG by reason of s349 of the Act. I accept that concession.

5                     It was also conceded by Mr Parry that the following conduct involved contraventions of s298K of the Act:

·        29 April 1998         -           Mr Glavinic and Mr Krug

·        1 May 1998           -           Mr Glavinic

·        15 June 1998         -           Mr Glavinic, in respect of Mr Fernandes

·        15 June 1998         -           Mr Glavinic, in respect of Mr Mammen

·        17 June 1998         -           Messrs Snow, Anguita and Ms Taussig

6                     It was further conceded that as a result of such conduct Messrs Fernandes and Mammen suffered loss and damage.  Those concessions are also accepted.

7                     Mr Parry also agreed that it was appropriate in all the circumstances of the case for the Court to make orders under s298U of the Act imposing a penalty on DMG in respect of the five contraventions of s298K of the Act.

The Agreement and Undertakings

8                     The parties agreed that DMG would pay $683.90 less tax to Mr Fernandes in respect of overtime forgone in August 1998. I have not dealt with the issue of Mr Fernandes’ being deprived of such overtime as it was not ultimately an issue in contention in the proceeding. It related to a contention of fact which was withdrawn, no doubt as a result, at least in part, of DMG offering to make such payment.

9                     DMG undertook to the Union that it would remove from Mr Fernandes’ personnel file and not rely on in the future, the two written warnings earlier referred to in these reasons.

10                  DMG also undertook to the Union that it would issue a statement signed by Mr Glavinic as managing director in the following terms:

“DMG Industries recognises the important role that employees’ membership of a union has in maintaining a stable, safe and efficient working environment. The company recognises the AMWU as the appropriate union to cover tool room employees. DMG recognises that the AMWU has shop stewards and that these shop stewards currently are Manoel Fernandes and David Guerra. The company acknowledges that all tool room employees have a right to join the union.”

11                  DMG gave an undertaking to the Court in the following terms:

“UNDERTAKINGS

The Respondent undertakes that it will not, by itself, its servants or agents:

1.                  contravene section 298K of the Workplace Relations Act 1996 (Cth) by:

(a)               injuring or threatening to injure Manoel Fernandes and other employees of the Respondent who are members of the Applicant (“the Employees”) in their employment; or

(b)               altering or threatening to alter the Employees’ position to their prejudice; or

(c)                dismissing or threatening to dismiss the Employees,

for a prohibited reason or for reasons that include a prohibited reason, namely:

(d)               because they are members of the Applicant, an industrial association;

or

(e)                while Fernandes is a delegate of the Applicant, because he is a delegate.

2.                  dismiss the Employees for a prohibited reason or for reasons that include a prohibited reason, namely:

(a)               because they are members of the Applicant, an industrial association; or

(b)               while Fernandes is a delegate of the Applicant, because he is a delegate.

3.                  threaten to dismiss the Employees for a prohibited reason or for reasons that include a prohibited reason, namely:

(a)               because they are members of the Applicant, an industrial association; or

(b)               while Fernandes is a delegate of the Applicant, because he is a delegate”

12                  The parties also agreed that DMG would pay the Union the sum of $13,600 by way of reimbursement of its legal expenses and members’ expenses for attending court.

Penalty

13                  The Court was invited by the parties to take into account, in assessing the penalty to be imposed on DMG, the matters referred to above and on which the parties had agreed and also DMG’s undertakings to the Union and the Court.  The Court considers it appropriate to do so.

14                  The Court has also taken into account that no previous conduct of the sort engaged in by DMG and referred to in these reasons has been alleged by the Union.

15                  Mr Parry submitted that one single penalty in the order of between $2,000 and $4,000 was appropriate having regard to the agreement and undertakings and to the fact that the conduct amounted to a single course of conduct extending over a relatively short period of time. Mr Parry also referred to the saving of court time which resulted from the decision DMG made, after the first two sitting days, to essentially no longer defend the proceeding.

16                  Ms Melinda Richards, of counsel, appeared for the Union. Ms Richards accepted that it was appropriate for the Court to take a cumulative approach to the imposition of a penalty. However she submitted that any penalty should be in the high range having regard to the deliberateness of the conduct, the extent of the conduct (that is, five contraventions over a six week period), the damage caused by the conduct and the fact that senior management initiated the conduct. Ms Richards also referred to the public interest in deterring repetition of the conduct both by DMG and by others. Ms Richards submitted that a penalty in the order of $10,000 to $15,000 was appropriate. It was also submitted that pursuant to s356(b) of the Act any such penalty imposed should be paid to the Union.

17                Notwithstanding the submissions of counsel on the “course of conduct” issue I consider it appropriate to individually consider the contraventions of s298U of the Act which have been found to have occurred. Part XA of the Act does not contain a provision akin to s178(2) of the Act.  This does not mean that conduct which properly considered as conduct adjunct to other conduct may not in appropriate circumstances result in no penalty being imposed with respect to a particular contravention.  This is a standard sentencing principle. 

18                  It is difficult to imagine a more deliberate or serious breach of s298K of the Act than the breach committed by Mr Glavinic in his anti-union speech of 1 May 1998. Notwithstanding the lack of any previous like conduct it is the view of this Court that it is conduct which would ordinarily call for the imposition of a high penalty, save for some matters in mitigation to be considered later in these reasons.  The penalty the Court would have imposed but for such matters is $9,000. 

19                  As Ms Richards submitted:

“Being placed in fear of losing their job for the simple lawful act of joining a union, electing a shop steward and asserting their rights in the workplace is something that ought not to be tolerated in an Australian workplace at this end of the century.”

20                  The Court is of the view that neither should it have been tolerated at the other end of the century.

21                  The intimidating words uttered to Mr Fernandes by Mr Glavinic in Mr Krug’s presence on 29 April 1998 were a harbinger of things to come on 1 May 1998. The fact that they were said specifically to Mr Fernandes in a personally intimidating fashion by the principal person at DMG makes the comments all the more pernicious. It is significant that the comments were personally directed at Mr Fernandes rather than at the general workforce as on 1 May 1998.  It is the opinion of the Court that a penalty of $4,000 would have been appropriate but for the matters referred to below.

22                  Mr Glavinic’s 15 June 1998 conduct in respect of Mr Fernandes and Mr Mammen is conduct akin to that engaged in by Mr Glavinic on 29 April 1998 and in each case deserves a penalty in the same order.

23                  The conduct engaged in by Messrs Snow, Anguita and Taussig on 17 June 1998, was in context I believe, conduct influenced by Mr Glavinic’s behaviour and is the type of conduct which should be considered as an adjunct to Mr Glavinic’s conduct of 15 June 1998. I do not consider it appropriate to order a penalty in respect of it.

24                  Absent the mitigating factors about to be addressed the Court would have ordered the payment by DMG of penalties totalling $20,000.

25                  The first mitigating factor to take into account is the payment of $13,800 to the Union to ensure that it is reimbursed for the cost of initiating and pursuing the application. This reduces the total appropriate penalty to $6,200.

26                  The Court further discounts the amount of $6,200 by the sum of $1,200.  It does so having regard to the undertakings offered to the Union and the Court by DMG and referred to earlier in these reasons for judgment together with DMG’s lack of history of similar conduct. The resultant total final penalty is the sum of $5,000. It is appropriate to impose the penalty in respect of the contravention of the Act which occurred on 1 May 1998 as, in the Court’s view, it was the most serious of the five contraventions as a threat not only to Mr Fernandes and Mr Mammen but a threat to the entire DMG tool room afternoon shift workforce.

27                  The Court rejects Ms Richards’ submission that, in the circumstances, it is appropriate to order that the penalty be paid to the Union. As a result of DMG’s undertaking to meet the Union’s legal costs it will not be out of pocket by issuing these proceedings.  It is inappropriate, in that context, for the Union to receive a windfall as a consequence of the payment of a penalty by DMG.

28                  Section 356(b) of the Act permits any penalty to be made payable to an individual. The two individuals who have suffered the most at the hands of DMG and in particular Mr Glavinic are Mr Fernandes and Mr Mammen. Mr Fernandes seems to have been singled out for the most adverse treatment as a result of his Union activities from all those who featured in this unfortunate episode in DMG’s history.

29                  In all the circumstances the Court considers it appropriate to order that the penalty to be paid by DMG be paid as to $3,000 to Mr Fernandes and as to $2,000 to Mr Mammen. I note that no order by way of compensation was sought by the Union and emphasise that the payment of the penalty in the way referred to above should not be confused with the amount of compensation which may have been ordered had it been sought.

Order

The Court orders as follows:

1.      A penalty of $5,000 be imposed on the respondent for contravention of Part XA of the Workplace Relations Act 1996 (Cth) (“the Act”) by the respondent on 1 May 1998 in the circumstances referred to in the reasons for judgment herein.

2.      Pursuant to s356(b) of the Act $3,000 of the penalty referred to in the order numbered one be paid to Mr Manoel Fernandes within 21 days of the date of this order.

3.      Pursuant to s356(b) of the Act $2,000 of the penalty referred to in the order numbered one be paid to Mr Cherian Mammen within 21 days of the date of this order.

4.      No penalty be imposed on the respondent in respect of the remaining four contraventions of Part XA of the Act referred to in the reasons for judgment herein and occurring on 29 April 1998, 15 June 1998 (twice) and 19 June 1998.

Associate:

Dated:              2 June 1999