FEDERAL COURT OF AUSTRALIA

Carr v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2005] FCA 1802

INDUSTRIAL LAW – certified agreement – threats to induce – determination of penalty

Workplace Relations Act 1996 (Cth) s 170NC

Director of Public Prosecutions v Merriman [1973] AC 584 applied

Mill v The Queen (1988) 166 CLR 59 applied

DENNIS JAMES CARR v AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION, ALE MULIPOLA, FERGAL EIFFE, IAN THOMAS and STEVE MANSOUR

VID 916 of 2004

FINKELSTEIN J

13 DECEMBER 2005

MELBOURNE

THE COURT DECLARES THAT:

1.      On 11, 14, 18 and 26 June 2003 the first respondent, Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, contravened s 170NC of the Workplace Relations Act 1996 (Cth).

2.      On 11, 14, 18 and 26 June 2003 the second respondent, Ale Mulipola, contravened s 170NC of the Workplace Relations Act 1996 (Cth).

3.      On 14 June 2003 the third respondent, Fergal Eiffe, contravened s 170NC of the Workplace Relations Act 1996 (Cth).

4.      On 26 June 2003 the fourth respondent, Ian Thomas, contravened s 170NC of the Workplace Relations Act 1996 (Cth).

5.      On 26 June 2003 the fifth respondent, Steve Mansour, contravened s 170NC of the Workplace Relations Act 1996 (Cth).

THE COURT ORDERS THAT:

6.      A penalty of $25,000 be imposed on the first respondent, to be paid as follows:

(a)    $20,000 to Direct Solutions (Australia) Pty Ltd trading as Engineering Directions; and

(b)   $5,000 in to the Consolidated Revenue Fund.

7.      A penalty of $1,000 be imposed on the second respondent and be paid in to the Consolidated Revenue Fund.

8.      A penalty of $600 be imposed on the third respondent and be paid in to the Consolidated Revenue Fund.

9.      A penalty of $400 be imposed on the fourth respondent and be paid in to the Consolidated Revenue Fund.

10.  A penalty of $400 be imposed on the fifth respondent and be paid in to the Consolidated Revenue Fund.

11.  The parties have 21 days from the date reasons are published in this matter to appeal.

12.  There be liberty to apply, in relation to the method of payment of the penalties only.

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

REASONS FOR JUDGMENT

1                     Industrial disputes can be tough affairs.  There is often open hostility between employers and employees until the dispute is resolved.  Australian labour relations statutes are concerned primarily with the conciliation and arbitration of industrial disputes.  But they also deal with the control of concerted activity, such as strikes, lock-outs and other forms of direct action designed to influence the outcome of an industrial dispute.  Thus, for example, it is illegal for a person to threaten industrial action with intent to coerce another person to make a certified agreement.  This action is outlawed by s 170NC of the Workplace Relations Act 1996 (Cth).  A contravention of s 170NC was at the relevant time punishable by a pecuniary penalty of not more than $10,000 in the case of a body corporate (which includes a union) and $2,000 for an individual. 

2                     In this case, for the admitted contraventions of s 170NC by the respondent union (which was responsible for the actions of its organisers, the other respondents), I imposed a pecuniary penalty of $25,000.  The second respondent (Mr Mulipola) had imposed upon him a pecuniary penalty of $1,000, the third respondent (Mr Eiffe) $600, and the fourth and fifth respondents (Mr Thomas and Mr Mansour) $400 respectively, for their conduct.  While the contravening conduct was not in the general scheme of things very serious, the pecuniary penalty imposed upon the union was relatively high while that imposed on the individuals was modest.  The reason for this was that this was not the union’s first contravention of s 170NC, but it was the first offence for each individual. 

3                     The events which led to this proceeding took place in June 2003.  They concern Direct Solutions (Australia) Pty Ltd, a company which under the trading name “Engineering Directions” manufactures and installs structural steel (a strong type of steel used to reinforce structures such as retaining walls), heavy architectural steel (used for internal columns, exposed beams, or canopies) and gantries (used for a variety of purposes including providing shelters or platforms around perimeters of a construction site).  Engineering Directions is a small concern with an annual turnover of around $4 million.  At the relevant time it had twelve employees.

4                     In May 2003 Engineering Directions was contracted by Austin Australia Pty Ltd, a construction company, to provide and erect gantries at a site on the corner of Queensberry and Swanston Streets, Carlton (the Austin site).  The work was to commence on 14 June and be completed by 21 June.  As a result of the events which are referred to below, the work was not completed until mid-July 2003. 

5                     Engineering Directions had also entered into agreements to carry out work on the redevelopment of the Victorian Brewery building at the corner of Victoria Parade and Powlett Street, East Melbourne (the Tribeca site).  One agreement was with Delta Pty Ltd.  This agreement required Engineering Directions to manufacture and install structural steel to support old walls that were to be retained as part of the project.  The other agreement, with Multiplex Constructions (Vic) Pty Ltd, was for the manufacture and installation of structural steel for a building on the site.  The work under the two contracts was to be performed during June 2003.  That work also was delayed.

6                     Since well before May the union had been engaged in negotiations for an enterprise bargaining agreement to cover Engineering Directions’ employees.  The negotiations were moving rather slowly and the union decided to force the issue.  The individual respondents, Mr Mulipola, Mr Eiffe, Mr Thomas and Mr Mansour, were instructed to take action to move things along.  The result was action which contravened s 170NC. 

7                     The action began on 11 June 2003.  On that day Mr Mulipola told Mr Moir, the sole director of Engineering Directions, that unless Engineering Directions signed up to an enterprise bargaining agreement he would stop any work on the Austin site on 14 June 2003.  Mr Callipiri was the project manager and site supervisor in charge of Engineering Directions’ work at the Austin site.  He arrived at work at 6.00am on Saturday 14 June to set things up so that Engineering Directions’ crew and contractors could commence work that day.  Mr Moir was also in attendance.  The crew arrived on site at around 7.00am and were awaiting induction.  Mr Mulipola and Mr Eiffe, who had gone to the site, told Mr Moir that union members would not be inducted until the enterprise bargaining agreement was sorted out.  To make sure that work could not begin, Mr Mulipola parked his car over the Queensberry site entrance to block the access and Mr Eiffe parked his vehicle across the Swanston Street site entrance.  This action prevented trucks and a crane from entering the site.  After some negotiation the vehicles were removed.  Mr Mulipola told Mr Moir that he had until 10.00am on Monday 16 June to sign up or he would not be allowed to work at the site.  Work then commenced at around 10.30am. 

8                     Engineering Directions started work at the Tribeca site on 14 June.  On that day, Mr Mulipola and Mr Eiffe told an employee of Engineering Directions that employees would be sent off-site unless Engineering Directions entered into a certified agreement.  Mid-morning on 18 June Mr Callipiri was informed that the union would picket the site unless the certified agreement was signed.  Mr Mulipola went to the Tribeca site, and directed the Engineering Directions’ employees to stop work and leave or return to the workshop in Altona.  He threatened the workers saying that if they continued to work something would happen. 

9                     Then, on 26 June 2003 Mr Mulipola went to the Austin site with a view to ensuring that no work was done by Engineering Directions or its employees.  On the same day at the Tribeca site Mr Thomas and Mr Mansour told representatives of Engineering Directions, among other things, that they could not work at the site and that if they continued to work the whole site would be closed down. 

10                  The action caused delay in carrying out work at the two sites.   Mr Moir has estimated that the cost to his company of the delay at the Austin site on 14 June 2003 was around $7,500 and that the costs incurred on 21 and 26 June 2003 were in the range of $5,000 to $10,000 for each day.  As regards the Tribeca site, Mr Moir thinks that the company incurred additional cost of approximately $2,700 for each of 18 and 26 June 2003.  Mr Moir noted other effects on his company’s business.  His time was taken up with dealing with the dispute which prevented him from looking for new work.  Engineering Directions sold its gantry business because Mr Moir took the view that the company’s reputation in that area had suffered. 

11                  As regards fixing the appropriate pecuniary penalty to impose upon the union there is a preliminary issue that must be resolved, namely whether there was but one contravention of s 170NC constituted by several acts (which is what the union contended) or whether there were several contraventions, one on each occasion upon which one or other individual respondents carried out one of the acts complained of. 

12                  The cases say that if “a number of acts of a similar nature committed by one or more defendants [are] connected with one another, in the time and place of their commission or by their common purpose, in such a way that they could fairly be regarded as forming part of the same transaction or criminal enterprise” they should be regarded as one activity or one offence:  Director of Public Prosecutions v Merriman [1973] AC 584, 607 per Lord Diplock.  In substance it is necessary to apply some common sense to the facts.  It seems to me to be both appropriate and fair to treat the union as having committed separate offences, one on each of the days on which its organisers engaged in the conduct earlier described.  If that conduct was engaged in at more than one site, then there will be a separate offence committed at each site.  The upshot of this approach is that the union has contravened s 170NC on six separate occasions.  Notwithstanding the number of separate contraventions it is still necessary for me to apply the totality principle.  As to this principle see Mill v The Queen (1988) 166 CLR 59.

13                  The other factors that must be taken into account in determining the appropriate penalty for the union are these.  The most important is deterrence, both specific and general.  This is not just a theoretical exercise.  In the past four years the union has been found to have contravened provisions of the Workplace Relations Act on four separate occasions, some involving contraventions of s 170NC.  I accept that on some occasions it was a different branch of the union that was involved in the contravention.  I also accept having regard to the manner in which industrial disputes are fought in this country that it is inevitable that the involvement of organisations such as the union will conflict with the requirements of the Workplace Relations Act.  Nevertheless, after several contraventions the court must take a strong stand to deter future contraventions.  If the court does not do so it will be abrogating its responsibilities. 

14                  The union is a registered trade union and a large one at that.  As can be seen from its name, its membership spans across several industries.  The union has a large membership, exceeding 135,000.  It has a substantial income for the most part derived from member contributions.  Its net assets exceed $40 million and it has a sizeable cash fund. 

15                  In the circumstances, prima facie at least, a harsh penalty was justified.  That is true not only because of the prior contraventions but also because the contravening conduct caused Engineering Directions to suffer loss.  It is also likely that the construction companies which had engaged Engineering Directions to carry out work on the sites were put to expense.  On the credit side there are the following matters (in no order of importance).  First, the threatening conduct was short-lived.  Second, while the conduct caused Engineering Directions to incur unnecessary expense, the amounts involved were not very great in the general scheme of things.  Third, the contraventions were admitted thereby avoiding what could have been a lengthy trial.  Putting all of these things into the mix, I arrived at the conclusion that a pecuniary penalty of $25,000 was appropriate. 

16                  Turning to the individual respondents, I have approached the ascertainment of the number of offences committed by them in the same way as the union:  one offence for each day’s conduct at a particular site.  The result is that Mr Mulipola has committed five contraventions, Mr Eiffe one contravention, and Mr Thomas and Mr Mansour one contravention, of s 170NC. 

17                  As regards their penalties I have taken the following matters into account.  First, each individual engaged in the conduct in his role as a union organiser doing what he thought best for its members, albeit on this occasion pressing the point of negotiations too far.  Second, each individual respondent is a first offender.  Third, each individual is a working man with dependants, earning just enough to get by and having no surplus funds.  Finally, if I were to
 

impose any higher penalties on these men the result would be oppressive. 

Associate:

Dated:              13 December 2005