FEDERAL COURT OF AUSTRALIA

Pine v Multiplex Constructions (Vic) Pty Ltd [2005] FCA 1428

INDUSTRIAL LAW – penalty for contravention of s 187AA of the Workplace Relations Act 1996 (Cth) – payments to employees in relation to a period of industrial action – contravention admitted – penalty to be imposed

Workplace Relations Act 1996 (Cth) ss 187AA, 187AD

Ponzio v BVM Builders Pty Ltd [2005] FCA 238 - applied

Pine v Austress Freyssinet (Vic) Pty Ltd (ACN 089 766 576) [2005] FCA 583 - applied

CPSU, The Community and Public Sector Union v Telstra Corporation Ltd (2001) 108 IR 228 - applied

Pine v Seelite Windows & Doors Pty Ltd [2005] FCA 500 - cited

Ponzio v Firebase Sprinkler Systems Pty Ltd [2005] FCA 773 - cited

LISETTE EILEEN PINE v MULTIPLEX CONSTRUCTIONS (VIC) PTY LTD AND OTHERS

VID 1472 OF 2004

MERKEL J

11 OCTOBER 2005

MELBOURNE

THE COURT ORDERS THAT:

1.                              A penalty of $4000.00 be imposed on the first respondent in respect of contraventions of s 187AA of the Workplace Relations Act 1996 (Cth) in relation to periods of industrial action on 5 and 6 August 2003.

2.                              The penalty be payable within 21 days of the date of this judgment to the District Registrar of this Court in Melbourne 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                     The applicant is applying for the imposition of a penalty under s 187AD(1) of the Workplace Relations Act 1996 (Cth) (‘the Act’) on the basis of contraventions by the first respondent (‘Multiplex’) of s 187AA of the Act.  The contraventions have arisen as a result of Multiplex paying wages to ten of its employees in respect of a period during which those employees engaged in industrial action.

2                     Section 187AA of the Act provides as follows:

‘Payments not to be made or accepted in relation to periods of industrial action

(1)               Employer not to make payments

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; or

(b)               the employer was or is a constitutional corporation bound by an award, a certified agreement or an AWA during that period; or

(c)                the industrial action was taken, or is being taken, in connection with work regulated by an award, a certified agreement or an AWA; or

(d)               the industrial action was taken, or is being taken, in relation to an industrial dispute; or

(e)                the industrial action was or is of a kind referred to in paragraph (a), (b) or (c) of the definition of industrial action in subsection 4(1); or

(f)                 the industrial action was taken, or is being taken, in a Territory.

(2)               Employee must not accept payment

An employee must not accept a payment from an employer if the employer would contravene subsection (1) by making the payment.

(3)               A contravention of subsection (1) or (2) is not an offence.’

3                     If there is a contravention of s 187AA of the Act, the Court has power under s 187AD of the Act to impose a penalty not exceeding, at the time of the contraventions, $10 000 in respect of each contravention of s 187AA.  In a statement of agreed facts the applicant and Multiplex have agreed that the requirements set out in ss 187AA(1)(a)-(e) have been met in respect of the contraventions claimed by the applicant.

4                     It is unnecessary to outline the agreed facts in detail as similar, if not identical, facts in relation to the industrial action the subject of the present case have been the subject of other cases before the Court: see for example, Ponzio v BVM Builders Pty Ltd [2005] FCA 238 (‘Ponzio’) and Pine v Austress Freyssinet (Vic) Pty Ltd (ACN 089 766 576) [2005] FCA 583 (‘Pine’). 

5                     Multiplex admitted its contraventions of s 187AA in respect of ten employees (‘the relevant employees’) on the basis of the following facts.  On or about 1 August 2005, there was a death in the building and construction industry that was unrelated to Multiplex.  As a result of the death, the Construction, Forestry, Mining and Energy Union (‘CFMEU’) took industrial action on certain building sites, including Multiplex’s Concept Blue Apartments project at 336 Russell Street, Melbourne (‘the Concept Blue site’).  The industrial action by the relevant employees at the Concept Blue site commenced on 5 August 2003.  The industrial action initially took place while representatives of the CFMEU conducted an occupational health and safety audit at the Concept Blue site.  The relevant employees failed or refused to perform work they were rostered to perform on 5 and 6 August 2003.  Although some of the relevant employees may have worked for parts of the period during which industrial action occurred at the Concept Blue site, and were entitled to pay in respect of that work, it is admitted that all of the relevant employees engaged in industrial action for part of the period during which industrial action occurred at the Concept Blue site and were paid for that period.  As a result, there has been a breach of s 187AA by Multiplex in respect of each of the relevant employees.  Multiplex paid the relevant employees a total of $3366.08 (not including allowances), which included pay for a period or periods during which they engaged in industrial action.

6                     The following factors are of particular relevance to the imposition of a penalty in the present case:

(a)               the totality principle should be applied and, as a consequence, an aggregate penalty that is just and appropriate in the circumstances should be imposed in respect of Multiplex’s contraventions (see CPSU, The Community and Public Sector Union v Telstra Corporation Ltd (2001) 108 IR 228);

(b)               Multiplex admitted that, between approximately 1999 to 2003, it had adopted a practice of paying employees who stopped work during periods in which safety audits were conducted on Multiplex sites following a death in the building and construction industry in Victoria, but it has now adopted, and is prepared to proffer undertakings to enforce, a policy that rejects that practice;

(c)               Multiplex was aware of all of the facts that constituted the contraventions, namely that the relevant employees had engaged in industrial action and that the payments made to those employees included pay for the period during which they were engaged in industrial action;

(d)               the amount paid by Multiplex to the relevant employees in respect of the period they were engaged in industrial action was likely to be less than $3366.08;

(e)               Multiplex made its admissions in respect of the contraventions at a relatively early stage of the proceeding;

(f)                 Multiplex had not previously been found to be liable for a contravention of s 187AA, or any other relevant section, of the Act.

7                     Having regard to the above matters, I have concluded that it is appropriate to impose a penalty upon Multiplex, particularly given Multiplex’s admission that it was its practice to pay employees who were on strike in the circumstances that arose in the present case, notwithstanding that it either was aware, or ought to have been aware, that it was unlawful to pay striking employees.  Therefore, this is not a case of inadvertent or careless payment which might justify the Court declining to impose a penalty (cf Pine v Seelite Windows & Doors Pty Ltd [2005] FCA 500 and Ponzio v Firebase Sprinkler Systems Pty Ltd [2005] FCA 773).

8                     There have been a number of cases concerning industrial action engaged in in response to the death in the building and construction industry on 1 August 2003, including the two cases referred to in [4] above which concerned industrial action at the Concept Blue site.  In those cases the Court imposed penalties of $100 and $200 respectively for each contravention of s 187AA by sub-contractors at the Concept Blue site, resulting in total penalties of $200 and $800 respectively: see Ponzio and Pine.  Having regard to the principles applied, and the penalties imposed, in those cases; Multiplex’s agreement to admit to the contraventions; and Multiplex’s present policy of not making payments to employees for periods of industrial action (making future contraventions of s 187AA unlikely); it may have been appropriate to impose a similar penalty of $200 in respect of each of Multiplex’s contraventions of s 187AA.  However, there are several distinguishing features in the present case.  They are that Multiplex was the head contractor; it is a large corporation with ready access to legal advice concerning its obligations under the Act; it had adopted a practice of paying employees who stopped work during safety audits; and it either was aware, or ought to have been aware, that its practice was unlawful.  As a result of those additional circumstances, which I regard as significant, it is appropriate to impose a total penalty of $4000 in respect of the ten contraventions.  It is common ground that any penalty should be paid into the Consolidated Revenue Fund.

9                     In previous cases the Court appears to have taken a lenient approach to contraventions of s 187AA of the Act by imposing penalties that can fairly be described as modest, given that the maximum penalty at the relevant time was $10 000 for each contravention.  In the present case, in arriving at the total penalty of $4000, I have had regard to the need to retain some parity with the penalties imposed in analogous circumstances in previous cases.  However, the prohibition contained in s 187AA should by now be known and any future contraveners of s 187AA should not assume that the leniency of the past will continue.

10                  There is one further matter.  The other respondents to the proceeding, the CFMEU and certain employees of Multiplex, are contesting the allegations of contravention of s 187AA made against them.  In acting upon the statement of agreed facts put forward by the applicant and Multiplex, I have not formed any view whatsoever as to whether the contraventions alleged against the other respondents have occurred or will be established by the applicant.  The determination of those matters will, of course, depend on the evidence before the Court when the applicant’s claims against those respondents are prosecuted at trial.  In the circumstances, which include that the applicant and Multiplex requested an early hearing on penalty, I do not regard it as appropriate to accede to the request of the other respondents that I adjourn the penalty hearing pending the outcome of the prosecution against those respondents.

Associate:

Dated:              10 October 2005