FEDERAL COURT OF AUSTRALIA

MX Constructions Pty Limited v Adco Constructions Pty Limited

[2004] FCA 193

MX CONSTRUCTIONS PTY LIMITED and INSPECTOR GREGORY CHARLES ALFRED v ADCO CONSTRUCTIONS PTY LIMITED and DAVID RIX

N1032 of 2003

WILCOX J

3 MARCH 2004

SYDNEY

THE COURT ORDERS THAT:

1.         It be declared that:

(a)        each of the respondents has contravened s 170NC(1) of the Workplace Relations Act 1996 (Cth); and

(b)        the first respondent has contravened s 298K(2) of the said Act.

2.         A penalty of $2,000 be imposed on the first respondent pursuant to ss 170NF(2) and 298U(a)(i) of the said Act.

3.         The amount of the said penalty is to be paid into Consolidated Revenue.

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

REASONS FOR EX TEMPORE JUDGMENT

WILCOX J:

1                     I have given consideration to all of the matters that have been put to me by counsel.  I see no need to reserve my decision or to prepare elaborate reasons for judgment.  The facts of the matter are not controversial; they are set out in an agreed statement of facts, which has been marked as exhibit A.  That agreed statement is supplemented by three affidavits which have been read this morning, namely, the affidavit of Monica Seixas Nicholson dated 23 January 2004, the affidavit of Paul Ernest Chapman dated 27 February 2004 and the affidavit of David John Rix of the same date.

2                     I do not think there is any need for me to summarise the relevant facts.  It is admitted that the first respondent, Adco Constructions Pty Limited (‘Adco’), infringed s 170NC(1) of the Workplace Relations Act 1996 (Cth) (‘the Act’) with intent to coerce another person, namely the first applicant, MX Constructions Pty Limited (‘MX’), to make an agreement under Division 2 or 3 of Part VIB of the Act.

3                     It is also admitted that the second respondent, David Rix, committed the same infringement.  Further, it is admitted that Adco infringed ss 298K(2)(a) or (d) of the Act for a prohibited reason, being the reason specified in s 298L(1)(i) of the Act.

4                     Put shortly, Adco had agreed to grant to MX a subcontract in respect of building work at Dural.  As a result of forming a belief that there may be a problem between MX and a registered industrial organisation, the Construction, Forestry, Mining and Energy Union (‘CFMEU’), officers of Adco, including Mr Rix, asked officers of MX to enter into a certified agreement with CFMEU.  MX was unwilling to do this and, as a result, the subcontract was lost. 

5                     It is not necessary for me to determine whether there was a legally binding agreement between Adco and MX, which was subsequently terminated, or whether this was simply a case of Adco refusing to enter into an agreement that had already been negotiated.  The parties agree that declarations should be made and I propose to make declarations broadly in accordance with the amended application filed on 25 February 2004. 

6                     Mr Goot SC and Mr Braham, counsel for the applicants, submit that a pecuniary penalty should be imposed on Adco.  Mr Jordan, counsel for the respondents, submits that it is open to the Court, having regard to all of the circumstances, to determine not to impose a penalty on Adco.  In relation to Mr Rix, Mr Goot and Mr Braham put no submission.  Mr Jordan submits no penalty should be imposed upon Mr Rix.

7                     A number of mitigating circumstances should be mentioned.  Firstly, it is common ground that there is no record of any prior contravention of the legislation by either of the respondents.

8                     Secondly, an agreement was reached between the parties prior to the matter coming before me for payment of compensation to the first applicant, MX, in the sum of $40,000. Apparently this payment was accepted as covering the loss sustained by MX by reason of the respondents’ conduct.  It is, of course, a cost that has already been incurred by Adco and, therefore, should be taken into account at least as part of the general background.

9                     Thirdly, Adco agreed to give an undertaking to the Court against any repetition of that conduct; this was provided by Mr Jordan.  The undertaking is explicit in two respects: first, that Adco will consider future tenders by MX on their merits and will give no consideration to whether MX has an agreement with CFMEU and, secondly, that Adco will facilitate a compliance program for its officers.  It seems to me, as both counsel agree, that these steps go a long way towards reducing the need to impose a penalty to deter Adco from any repetition of the infringing conduct.

10                  Fourthly, I think there is force in the submission put by Mr Jordan about the circumstances in which the infringements occurred.  It seems that Adco felt itself to be under commercial pressure to obtain work from a major industrial developer, Bunnings, and was consequently concerned about possible delays on the site.  At the same time, it was under some industrial pressure by CFMEU, which wished to obtain site coverage through a certified agreement made with MX.  It is not difficult to understand the dilemma in which the Adco executives found themselves; and, indeed, to have some sympathy for their plight.  Mr Jordan submits that the decision to engage in the infringing conduct was a result of poor management practices.  In effect, as I understand him, he says that Adco, being in a dilemma, made the wrong choice as to the course it should take.

11                  I bear all these matters in mind; nonetheless, I believe it would not be appropriate to accede to Mr Jordan's submission to refrain from imposing any penalty at all or to impose a mere nominal penalty.  The legislature has laid down some rules about conduct in the workplace.  Sections 170NC and 298K of the Act are important elements in the mosaic of rules which govern workplace relationships.  For me to refrain from imposing any penalty, or to impose a mere nominal penalty, would be to trivialise those important provisions.

12                  Understanding the dilemma in which Adco found itself, I think the Court must emphasise the importance of people not resolving difficulties in ways which contravene the Act.  On the other hand, I agree with the submission that has been put by Mr Jordan, and not seriously disputed by Mr Goot, that the circumstances of this offence are far from the worst case that could be imagined and in respect of which the legislature has provided a penalty of only $10,000.

13                  Reference has been made to other decisions of this Court and I note the penalties that have been imposed in those cases.  It's probably true to say that the circumstances of this case are rather more serious than those considered by Branson J in Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) [1999] FCA 1714; 94 IR 231, but are less serious than the contraventions considered by Finkelstein J in The Age Company Limited v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2000] FCA 1757; 103 IR 148.

14                  In my view, the appropriate penalty to be imposed on Adco in this case, to cover both offences and treating them as a single course of conduct, is the sum of $2000.  I do not propose to impose any separate penalty on Mr Rix.  I think he should be seen as acting on behalf of Adco at the time.  I do not think it would be appropriate to burden him personally, or to indirectly increase the penalty being imposed on Adco, if it was minded to pay his fine.

15                  It is agreed that any penalty should go to Consolidated Revenue. 

16                  Accordingly, the orders that I make are as follows: the Court declares that each of the first and second respondents has contravened s 170NC(1) of the Act.  The Court declares that the first respondent has contravened s 298K(2) of the Act.  The Court imposes upon the first respondent a penalty under ss 170NF(2) and 298U(a)(i) of the Act in the total sum of $2000.  The Court orders that the penalty be paid into Consolidated Revenue.

Associate:

Dated:              26 March 2004