FEDERAL COURT OF AUSTRALIA

Alfred v Walter Construction Group Limited [2005] FCA 497

INDUSTRIAL LAW – Workplace Relations Act 1996 (Cth) – Part VIB Certified Agreements – where respondent admitted contravention at commencement of hearing – making of a declaration – fixing of penalty – matters to be considered – totality principle – mitigating factors

Workplace Relations Act 1996 (Cth) s 170NC, s 170NF

Federal Court Rules O 11 r 1B, O 11 r 13

Cameron v R (2002) 209 CLR 339 distinguished

Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2)  (1999) 94 IR 231 applied

CPSU, the Community and Public Sector Union  v Telstra Corporation Limited (2001) 108 IR 228 cited

Schanka v Employment National (Administration) Pty Limited (No 2) (2001) 114 FCR 379 referred to

INSPECTOR GREGORY CHARLES ALFRED v WALTER CONSTRUCTION GROUP LIMITED (ACN 008 390 074), JOHN STORER, CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION OF AUSTRALIA, PETER ZABOYAK AND DAVID KELLY

NSD 775 of 2003

BRANSON J

3 MAY 2005

SYDNEY

THE COURT ORDERS THAT:

1.                  It be declared that, having regard to the facts and matters set out in paragraphs 28, 29, 30, 31, 32 and 33 of the second further amended statement of claim, the third respondent contravened subsection 170NC(1) of the Workplace Relations Act 1996 (Cth) (‘the Act’) on the occasions, and in the respects, set out in paragraphs 29.7, 31.7 and 33.7 of the second further amended statement of claim;

2.                  A penalty of $2500 be imposed on the third respondent for the contravention of s 170NC of the Act pleaded by paragraph 29.7 of the second further amended statement of claim;

3.                  A penalty of $2500 be imposed on the third respondent for the contravention of s 170NC of the Act pleaded by paragraph 31.7 of the second further amended statement of claim;

4.                  A penalty of $2500 be imposed on the third respondent for the contravention of s 170NC of the Act pleaded by paragraph 33.7 of the second further amended statement of claim;

5.                  The third respondent pay into the Consolidated Revenue Fund the total of penalties being $7500 within twenty‑eight (28) days of the date of these orders;

6.                  The proceeding be otherwise dismissed.

REASONS FOR JUDGMENT

1                     As at the date of publication of these reasons for judgment the applicant has discontinued the proceeding against all respondents other than the third respondent.  Nonetheless, it has proved convenient to publish these reasons for judgment in a form which reflects the identity of the original parties to the proceeding. 

2                     By his further amended application the applicant sought declaratory and injunctive relief against all respondents and orders pursuant to s 170NF of the Workplace Relations Act 1996 (Cth) (‘the Act’) imposing a penalty on the first and third respondents.

3                     After the first respondent was placed under external administration it took no further part in the proceeding.  The applicant did not seek leave to proceed against it and eventually, with leave, discontinued the proceeding against the first respondent.  The applicant also sought and obtained leave to discontinue the proceeding against the second respondent, a former employee of the first respondent.

4                     The Court was then invited by the applicant and the third, fourth and fifth respondents (‘the remaining parties’) to make certain orders by consent.  In addition to orders allowing certain pleadings to be amended, the remaining parties invited the Court to make a declaratory order in the following terms:

‘that, having regard to the facts and matters set out in paragraphs 28, 29, 30, 31, 32 and 33 of the second further amended statement of claim, the third respondent contravened subsection 170NC(1) of the Workplace Relations Act 1996 (‘the Act’) on the occasions, and in the respects, set out in paragraphs 29.7, 31.7 and 33.7 of the second further amended statement of claim.’

5                     The remaining parties also consented to the making of an order under s 170NF of the Act imposing a penalty on the third respondent in respect of the three contraventions of s 170NC(1) of the Act identified in the draft declaratory order.  Additionally, they consented to the applicant being granted leave to discontinue the proceeding against the fourth and fifth respondents.

6                     In my view, it would be an exceptional case in which the Court declined to grant leave to an applicant to discontinue a proceeding against a respondent where that respondent consented to the order being made.  For this reason the applicant was granted leave to discontinue this proceeding against the fourth and fifth respondents.

7                     However, it is for the Court itself to determine whether in any case a declaratory order should be made.  Further, in circumstances in which legislation gives the Court a discretion to impose, or alternatively not to impose, a penalty, the Court must be satisfied that it is appropriate in all of the circumstances to impose a penalty before it makes an order imposing a penalty.  Of course, the fact that the parties consent to the making of the order in question, particularly where all parties enjoy legal representation, is a factor on which the Court will place considerable weight in determining whether the order is one that it is appropriate to make.

8                     Having regard to the admissions made by the third respondent on the pleadings, to the agreed statement of facts, and to the third respondent’s consent, I am satisfied that it is appropriate in all of the circumstances to make the declaratory order referred to above.  Having regard to the same factors, I am also satisfied that orders imposing a penalty in respect of each of the three contraventions of s 170NC(1) of the Act should be made.

9                     Section 170NF(2) of the Act, as in force at the relevant time, provided that a penalty for a contravention of s 170NC cannot be more than $10 000 for a body corporate.

10                  In Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) [1999] FCA 1714; 94 IR 231 at [7]‑[8] I observed:

‘The Act gives no explicit guidance as to the circumstances in which an order imposing a penalty under s 298U of the Act will be appropriate or as to the circumstances in which a penalty of or near the maximum, or alternatively of a lesser amount, may be called for. The Court is simply directed to consider what is appropriate in all the circumstances of the case.

The following matters, which are not intended to comprise an exhaustive list, seem to me to be considerations to which the Court may appropriately have regard in determining whether particular conduct calls for the imposition of a penalty, and assuming that it does, the amount of the penalty:

(a)        The circumstances in which the relevant conduct took place (including whether the conduct was undertaken in deliberate defiance or disregard of the Act);

(b)               Whether the respondent has previously been found to have engaged in conduct in contravention of Pt XA of the Act;

(c)               Where more than one contravention of Pt XA is involved, whether the various contraventions are properly seen as distinct or whether they arise out of the one course of conduct;

(d)               The consequences of the conduct found to be in contravention of Pt XA of the Act;

(e)               The need, in the circumstances, for the protection of industrial freedom of association; and

(f)                The need, in the circumstances, for deterrence.’

11                  The applicant accepts that the three contraventions of s 170NC(1) with which I am concerned were related in the sense that they arose out of unsuccessful negotiations between the third respondent and a subcontractor on a particular site (‘the Site’) for an agreement under Division 2 of Part VIB of the Act (‘a Federal EBA’).  The aggregate penalty to be imposed for the three contraventions must for this reason be ‘just and appropriate’ having regard to the circumstances (CPSU, the Community and Public Sector Union  v Telstra Corporation Limited [2001] FCA 1364; 108 IR 228 at [7]).

12                  The aggregate penalty that is just and appropriate in the circumstances is one that reflects that the contravening conduct of the third respondent was calculated to interfere with an important freedom that the legislature has sought by the Act to protect, namely the freedom of the subcontractor and its employees to negotiate a Federal EBA in terms regarded by them as appropriate (see Schanka v Employment National (Administration) Pty Limited (No 2) [2001] FCA 1623; 114 FCR 379 at [74]).  The contravening conduct was also calculated to, and did, prevent the subcontractor from continuing to work on the Site with the result that the work of the kind previously done by the subcontractor was thereafter done by another operator or operators.  The third respondent, by those who acted on its behalf, may be assumed to have been aware that its contravening conduct was capable of causing significant financial harm to the subcontractor. 

13                  The third respondent has previously been found to have engaged in conduct in contravention of s 170NC of the Act.  That contravention occurred on 15 October 2002.  However, the relevant judgment of the District Court of New South Wales was published after the date of the conduct with which this proceeding is concerned.  For this reason I do not consider it appropriate to fix the amount of the penalty to be imposed on the basis that the third respondent engaged in the contravening conduct after having been found to have earlier contravened s 170NC.  However, nor do I consider it appropriate to mitigate the penalty otherwise appropriate on the basis that the contravening course of conduct on the Site was an isolated instance of contravening conduct entirely uncharacteristic of the third respondent.

14                  In my view the aggregate penalty imposed in this case should be sufficiently large to act as a deterrent against future contraventions of s 170NC by the third respondent and as a general deterrent against future contraventions of the Act by others.

15                  I am willing to treat the eventual acknowledgment by the third respondent that it had contravened s 170NC as alleged by the applicant as a modest mitigating factor so far as penalty is concerned.  This acknowledgment avoided the need for a hearing to determine whether the allegations made by the applicant against the third respondent could be substantiated.  As a consequence the community was spared the cost of a contested trial.  However, I do not accept that the Court should adopt the approach that the third respondent should receive a penalty mitigated to the same degree as it would be appropriate to mitigate a sentence passed on an individual after a plea of guilty entered at the first reasonable opportunity (see Cameron v R (2002) 209 CLR 339).  The present proceeding is not a criminal proceeding.  The third respondent was not asked to plead to any offence.  Rather the third respondent was required in its defence to traverse specifically each of the allegations of fact made against it in the statement of claim that it did not admit (see O 11 r 13 of the Federal Court Rules).  Indeed under O 11 r 1B of the Federal Court Rules the third respondent’s legal representative ought to have certified at the time of the filing of the third respondent’s defence that the factual and legal material available to him or her provided a proper basis for each denial or non‑admission in that defence.

16                  In my view, an aggregate penalty of $7500 constituted by a penalty of $2500 for each of the contraventions is appropriate in all of the circumstances of this case.  Were it not for the acknowledgement before trial of the third respondent that it had contravened s 170NC on the three occasions alleged by the applicant I would have awarded penalties approximately ten percent higher.

17                  The orders of the Court, in addition to the orders already made, will be:

1.                  It be declared that, having regard to the facts and matters set out in paragraphs 28, 29, 30, 31, 32 and 33 of the second further amended statement of claim, the third respondent contravened subsection 170NC(1) of the Act on the occasions, and in the respects, set out in paragraphs 29.7, 31.7 and 33.7 of the second further amended statement of claim;

2.                  A penalty of $2500 be imposed on the third respondent for the contravention of s 170NC of the Act pleaded by paragraph 29.7 of the second further amended statement of claim;

3.                  A penalty of $2500 be imposed on the third respondent for the contravention of s 170NC of the Act pleaded by paragraph 31.7 of the second further amended statement of claim;

4.                  A penalty of $2500 be imposed on the third respondent for the contravention of s 170NC of the Act pleaded by paragraph 33.7 of the second further amended statement of claim;

5.                  The third respondent pay into the Consolidated Revenue Fund the total of penalties being $7500 within twenty‑eight (28) days of the date of these orders;

6.                  The proceeding be otherwise dismissed.

Associate:

Dated:              3 May 2005