FEDERAL COURT OF AUSTRALIA

Clarke v Baulderstone Hornibrook Pty Ltd [2003] FCA 1426

WORKPLACE RELATIONS – payments in relation to periods of industrial action – payment by employer to an employee in relation to a period during which the employee engaged in industrial action while the employee was a member of an organisation – contravention admitted – breach admitted – circumstances in mitigation – institution of procedures to prevent further breaches – no weight given to Royal Commission findings of further contraventions by respondent – penalty fixed

Workplace Relations Act 1996 (Cth) ss 187AA, 187AA(1), 187AA(3), 187AC, 187AC(2)(c), 187AD

Workplace Relations Regulations reg 32B

Royal Commission into the Building and Construction Industry, Final Report, 24 February 2003

R v Collins; Ex parte ACTU-Solo Enterprises Pty Ltd (1976) 8 ALR 691 applied

MARCUS CLARKE v BAULDERSTONE HORNIBROOK PTY LTD

W194 of 2003

RD NICHOLSON J

5 DECEMBER 2003

PERTH

THE COURT ORDERS THAT:

1.                  A penalty of $1000 is imposed on the respondent in respect of contravention of s 187AA of the Workplace Relations Act 1996 (Cth) on 16 September 2001.

2.                  Such penalty be paid into the Consolidated Revenue Fund.

3.                  Such penalty be payable forthwith to the District Registrar of this Court in Perth by way of a cheque payable to the Consolidated Revenue Fund.

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

REASONS FOR JUDGMENT

1                     This is an application made pursuant to s 187AC of the Workplace Relations Act 1996 (Cth) (‘the Act’).  That section provides that an application may be made to the Court for orders under s 187AD in respect of contraventions of s 187AA.

2                     Section 187AA(1) provides that an employer must not make a payment to an employee in relation to a period during which the employee engaged, or engages, in industrial action if:

‘(a)      the employer or employee was or is a member of an organisation during that period; …’

Section 187AA(3) provides that a contravention of subs (1) is not an offence.

3                     Section 187AD provides that in respect of a contravention under s 187AA the Court may, if the Court considers it is appropriate in all the circumstances of the case, make one or more of certain orders.  The first of those orders, and the only relevant order here, is an order imposing on a person who contravened or is contravening the section a penalty of not more that $10 000.

circumstances of the offence

4                     In the statement of claim it is said that the applicant is an Inspector duly appointed under s 84 of the Act and entitled to bring these proceedings pursuant to reg 32B of the Workplace Relations Regulations and s 187AC(2)(c) of the Act. 

5                     It is claimed that at all material times the respondent was for the purposes of s 187AA(1) a constitutional corporation bound by the Baulderstone Hornibrook Pty Ltd, 240 St George’s Terrace, Perth Enterprise Agreement 2000 (‘the Enterprise Agreement’), being an agreement duly made and certified pursuant to the provisions of Pt VIB of the Act. 

6                     At all relevant times Michael Cullen, Peter Delaney and Roy McIlwaine (‘the Employees’), were employees of the respondent. 

7                     On 16 September 2001 the Employees engaged in industrial action, which involved their failure or refusal to attend for work at the Woodside Towers Project (‘the Project’) at 240 St George’s Terrace, Perth.  The respondent paid the Employees a total amount of approximately $1520 in relation to that period of one day.  As a consequence it was claimed that the respondent breached s 187AA(1) of the Act. 

8                     The applicant filed what was described as an agreed statement of facts.  That, with some additions, repeats the substance of the statement of claim.  Counsel for the respondent advised the Court that the respondent admitted the contravention of s 187AA. 

9                     The agreed statement of facts makes apparent that the offence occurred in the following particular circumstances.  The Employees were members of the Construction, Forestry, Mining and Energy Union (‘the CFMEU’).  Their refusal to work on 16 September 2001 was in accordance with the decision made, or direction given, by an officer of the CFMEU, namely, one Kevin Reynolds (‘Mr Reynolds’). 

10                  On the evening of 15 September 2001 Mr Reynolds withdrew the permission previously granted pursuant to the Enterprise Agreement for work to continue on Sunday, 16 September 2001.  He demanded that the Employees scheduled to work on that day be paid triple time, who were ordinarily paid double time on Sunday.  He threatened industrial action would continue on Monday, 17 September 2001 and Tuesday, 18 September 2001 if the payment was not made.  It was in these circumstances that the respondent agreed to make the payment in relation to the industrial action undertaken on 16 September 2001. 

11                  The agreed statement of facts sets out that in departing from the respondent’s policy of not acceding to the CFMEU’s unlawful demands, the respondent considered the significant daily costs associated with delaying the construction program for the Project and prolonging the works in addition to the antecedent delays.  It is said on behalf of the respondent that it also faced penalties which might be imposed by the principal by virtue of a liquidated damage clause in the head contract for the Project. 

FACTORS IN MITIGATION

ADMISSION OF OFFENCE

12                  Reference has already been made to the admission of the contravention of the Act by the respondent. 

COOPERATION WITH AUTHORITY

13                  The respondent cooperated with the Building and Industry Taskforce (‘the Taskforce’), by representatives of the respondent meeting with members of the Taskforce on various occasions, information being provided to the Taskforce concerning the names of the Employees and other relevant details and the respondent agreeing at an early stage not to oppose any application commenced by the Taskforce in relation to the contravention of the section. 

RESPONDENT’S ATTITUDE

14                  The respondent’s policy did not at the relevant time, and does not now, support or condone any payment being made to employees engaged in industrial action.  In its submissions before the Royal Commission the respondent’s counsel stated that the possible unlawful payments on 16 September 2001 in relation to the Project were reactive to the threat of unlawful industrial action to be taken by the CFMEU.  The payments were not initiated by the respondent nor, it is said, were they systematic. 

SUBSEQUENT ACTION CONCERNING COMPLIANCE

15                  Since 16 September 2001 the respondent has implemented a number of measures.  These include the introduction of a Code of Ethical Conduct; the preparation of Industrial Relations Guidelines together with an Industrial Relations Policy; the preparation of a new Vision and Mission Statement together with Key Leadership Behaviours; the establishment of a formal relationship with Ethi-Call; the conduct of sessions with various leadership teams in connection with ethical dilemmas; the conduct of workshops; the introduction of a new employee appraisal system; the preparation of a draft policy for managing and reporting inappropriate behaviour and undertaking internal investigations; the overhaul of its general legal compliance processes and the implementation of stronger internal controls over authorisation of payments on sites. 

prior record

16                  The respondent claims not to have occasioned any previous contraventions of s 187AA of the Act and to be of good character.  However, the Final Report of the Royal Commission into the Building and Construction Industry (published on 24 February 2003), vol 21, ch 21 contains findings at [77] and [79] by the Royal Commissioner that on the material before him he was satisfied that the respondent had engaged in unlawful conduct in making payments to its employees during periods which they were on strike from 12 to 13 June 2001 and 28 June 2001.  That is in addition to the finding in [81] of the payment to employees on 16 September 2001. 

quantum of penalty

17                  For the respondent it is submitted that its agreement not to oppose the application made by the applicant at the earliest available opportunity ought to be regarded in a similar way as an early plea of guilty in criminal proceedings.  Further, it is submitted, this is not a matter where specific deterrence is warranted.  It was said on behalf of the respondent that it has not engaged in conduct of contravention of s 187AA of the Act in the past and has put in place measures to ensure no further contraventions occur.  Therefore the respondent submits there is no need for a high penalty to be imposed or to deter it from engaging in such contravening conduct.  

18                  For the applicant it is submitted that the respondent is remorseful for its conduct and that its lack of opposition to the application at the earliest available opportunity is a mitigating factor to be taken into account in opposing an appropriate penalty.  In addition, the applicant accepts that the respondent has put into place procedures to ensure that there will be no further contraventions. 

19                  It must be said that the findings of the Royal Commissioner raise some doubt as to whether it is correct that the respondent has not engaged in contravening conduct in the past.  Nevertheless, I accept that the findings of the Royal Commissioner cannot be taken as the equivalence of convictions:  R v Collins; Ex parte ACTU-Solo Enterprises Pty Ltd (1976) 8 ALR 691 at 695.  My concern with the findings was that they were not disclosed to the Court when the claims of no prior conduct were made.  Nevertheless, I give them no weight in arriving at the appropriate penalty. 

20                  I accept that the factors in mitigation as set out above are strongly in the respondent’s favour.  The task is to impose a penalty which acknowledges that but also properly acknowledges the contravention of the Act.  In my view this balance would be struck with the imposing of a penalty in the sum of $1000.

21                  An order will be made for the imposition of a penalty in that amount together with an order pursuant to s 356 of the Act that any penalty imposed on the respondent be paid into the Consolidated Revenue Fund. 

Associate:

Dated:              5 December 2003