FEDERAL COURT OF AUSTRALIA

National Tertiary Education Industry Union v Central Queensland University [2008] FCA 481

INDUSTRIAL LAW – collective agreement – breach – failure to hold consultation with employees and/or employees’ representatives – penalty to be imposed – whether penalty to be paid to applicant

Workplace Relations Act 1996 (Cth) ss 328, 340(2), 351, 709, 719, 728, 841

Central Queensland University Act 1998 (Qld) ss 4, 8, 32

Conciliation and Arbitration Act 1904 (Cth) s 178(2)

Crimes Act 1914 (Cth) s 4AA

National Tertiary Education Industry Union v Central Queensland University [2007] AIRC 539, PR977528, cited

Lynch v Buckley Sawmills Pty Ltd (1984) 3 FCR 503, applied

Electrical Trades Union of Australia v Sims Products Ltd trading as Besco Batteries (1998) 42 IR 250, applied

Gibbs v City of Altona (1992) 37 FCR 216, applied

Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228, applied in part, not followed in part.

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

L Vogel & Sons Pty Ltd v Anderson, Minister of State for Customs and Excise (1968) 120 CLR 157, cited

Murphy, Minister of State for Customs and Excise v H. F. Trading Co Pty Ltd (1971) 47 ALJR 198, cited

Finance Sector Union v Australia and New Zealand Banking Group Limited [2002] FCA 1035, applied

Scott v Geoghan & Sons Pty Ltd (1969) 43 ALJR 243, cited

NATIONAL TERTIARY EDUCATION INDUSTRY UNION v CENTRAL QUEENSLAND UNIVERSITY and PROFESSOR JOHN RICKARD

VID 789 OF 2007

LOGAN J

11 APRIL 2008

BRISBANE

THE COURT ORDERS THAT:

1.                  The First Respondent pay a penalty of $6,600 for a breach of cl 22.2 of the Central Queensland University Union Collective Agreement (General Staff Employees) 2007, by failing, between 1 May and on or about 15 May 2007, to consult, as provided for by that provision, prior to making its decision on or about 15 May 2007.

2.                  The First Respondent pay a penalty of $200 for breaches of cl 22.3 of the Central Queensland University Union Collective Agreement (General Staff Employees) 2007 for failing to consult in the way required by that provision, as a consequence of the breach of clause 22.2, between 1 May and 15 May 2007 and on 29 May 2007.

3.                  The First Respondent pay a penalty of $200 for a breach of cl 24 of the Central Queensland University Union Collective Agreement (General Staff Employees) 2007, by failing, between 1 May and on or about 15 May 2007, to undertake the consultations required by that provision.

4.                  No penalties be imposed in respect of the involvement of the Second Respondent in those breaches.

5.                  Of the total of the penalties imposed, the sum of $6,600 be paid to the Applicant and the balance of $400 be paid to the Commonwealth of Australia.

6.                  As to the sum of $6,600 to be paid to the Applicant, the receipt of the Applicant’s secretary or other proper officer of the Applicant shall be a good discharge to the First Respondent in respect of its satisfaction of this payment order.

7.                  As to the sum of $400 ordered to be paid to the Commonwealth of Australia, this sum be paid to the District Registrar for payment in turn by him into the Consolidated Revenue of the Commonwealth with the receipt of the District Registrar being good discharge to the First Respondent of this payment order.  If payment is effected by cheque rather than legal tender, the cheque should be made payable to “Federal Court of Australia”.

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

REASONS FOR JUDGMENT

1                     In April 2007, and in the context of the present proceedings, two events of significance occurred in the affairs of the Central Queensland University (“the University”).

2                     On 24 April 2007, a collective agreement known as the Central Queensland University Union Collective Agreement (General Staff Employees) 2007 (“the Collective Agreement”) was lodged with what was then known as the Office of the Employment Advocate (replaced on and from 1 July 2007 by the Office of the Workplace Authority Director) pursuant to the Workplace Relations Act 1996 (Cth)(“Workplace Relations Act”). 

3                     Within a few days thereafter and certainly by the end of April 2007, the University’s Vice Chancellor, Professor Rickard, who is the Second Respondent in these proceedings, received, in the course of the usual and regular updating of enrolments, advice of a significant and unexpected decline in the number of international students for the 2007 calendar year. That decrease greatly impacted upon the University’s finances.  It required prompt remedial action by the University. 

4                     Unfortunately, in taking that remedial action, the University breached particular terms in the Collective Agreement to which it had so recently subscribed.  Those breaches have given rise to the present proceedings in which the National Tertiary Education Industry Union (“the Union”) seeks the imposition of the pecuniary penalties against both the University and its Vice Chancellor pursuant to s 719 of the Workplace Relations Act.

5                     Prior to the University’s receipt of the updated advice in respect of enrolments, it had already embarked upon a review of its strategic direction, academic and administrative structures and processes and staffing.  The updated enrolment advice lent a particular urgency to aspects of this review.  An indication of just how dramatic the change in projected enrolments was is provided by the following statistics to which Professor Rickard attested in an affidavit read on the penalty hearing:

“AIC” is an abbreviation for what the University terms its “Australian International Campus”, i.e. those campuses situated in Brisbane, Gold Coast, Melbourne and Sydney.

6                     That there would be such a decline was not foreseen at the time when the University’s Council adopted the University’s 2007 budget in December 2006.  According to Professor Rickard, that budget, “although tight, was balanced and provided for acceleration of the capital expenditure programme from accumulated liquid reserves”.  The decline in enrolments created a severe financial situation for the University which persists to this day.

7                     On 1 May 2007, Professor Rickard met with the following senior officials of the University to discuss the dire situation faced by the University – the Deputy Vice Chancellor, Professor Angela Delves, the Executive Director (Resources) Mr John Nelson and Ms Jenny Roberts, an Executive Officer as well as a “specialist consultant”, Mr Barry Rees.  In the result, it was determined at this meeting that the University would need to reduce costs through various measures which included a reduction in the number of employees.  It was further determined at the meeting that it was preferable that permanent employees of the University not be adversely impacted by the overall reduction in employee numbers contemplated.  It was also considered that it was not at that time viable to reduce academic roles.  Instead, on a review of the University’s payroll data, a large number of general staff fixed term appointments (145 in total) which were due to end by 30 June 2007 were identified.  The upshot of the meeting was a decision the effect of which Professor Rickard described as follows:

“If the urgent savings we required could in part be achieved and the University’s operational needs met by not renewing these fixed term appointments, then this was the most appropriate and expeditious means of implementing a reduction in employee numbers”.

8                     On 15 May 2007, the decision made at the meeting on 1 May 2007 not to renew some 200 fixed term appointments of general staff whose appointments expired between that date and 31 December 2007 was announced with Professor Rickard’s authority by Professor Delves at a staff forum.  At that staff forum Professor Delves stated, inter alia, as follows:

“The Vice Chancellor has directed that we will not renew some 200 fixed term contracts … by the end of the year, by the end of December 2007.”

“…This is 200 positions out of a total workforce of around 3500.”

“… and we are also going to focus very carefully on casual positions.”

“In the short term those fixed term positions not required will expire when their turn becomes due.”

9                     On 17 May 2007, in a memorandum to the University’s Pro-Vice Chancellors, Heads of Division and Heads of Campus, Professor Rickard stated as follows:

“I have decided that by 31 December 2007 we will not renew some 200 fixed term positions, and will also critically review casual positions.

At June 2007, a minimum of 51 fixed term positions will not be renewed.”

10                  The Collective Agreement continued clauses respectively directed to introduction of change and job security.  Unsurprisingly, given the subjects to which they were directed, the clauses admit of an overlapping application.  They provide:

22        Introduction of Change

22.1         The University acknowledges that the management of workplace change requires the involvement of employees who will be directly affected by that change.

22.2         Following a decision by the University that changes may be required in work activities, programmes, organisation, structure or technology which may have significant consequences, the University will initiate consultation with the relevant employees, and/or at the request of the employees with the employees’ representative(s), in a timely manner about the need for the change and the development of any significant change proposal in accordance with the University guidelines.

22.3         This consultation will occur via the variety of mechanisms to communicate and consult, including the Staff Consultative Committee. This consultation will provide an opportunity for employees, and/or at the request of employees, their representatives, to consider and purpose alternate options for managing change and to be meaningfully involved in the final decision about proceedings with change.

22.4         Significant consequences include, but are not limited to:

·          Substantial changes in the composition, operation or size of the University workforce or in the skills required;

·          The restructuring of organisational units;

·          Variation to the delivery of the University services which impact on its staffing structure, or any changes likely to lead to job losses.

22.5         Following consideration of feedback, if a decision is taken by the University to proceed with a significant change proposal, the University will consult with the relevant employees, and/or at the request of the employees, with the employees’ representative(s), about any impacts of the implementation of that change on the performed by employees. Such consultation will include consideration and means to avoid detrimental impacts on employees including voluntary measures such as retraining, redeployment, part0time employment opportunities or voluntary separation.  Where changes lead to positions becoming redundant, the University will comply with the redundancy provisions of this Agreement.

22.6         Where significant change to work organisation has occurred, a review of the impact of the change on workloads will occur six (6) months after the implementation of the significant change or at a longer period as discussed during the consultations regarding the implementation.

24                Job Security

(This clause does not apply to support research-only employees or to Senior Staff except as provided of in subclause 4.43.4 of clause 4 Operation of Agreement)

The University is committed, wherever possible, to maximising the job security of its employees. The University recognises that the first priority in dealing with the job reductions is the range of voluntary measures as outlined below.

24.1          Consultation

(i)            If rationalisation or reorganisation of staffing levels is considered necessary, University management will initiate consultations with affected employees and/or where they choose their representative(s) as outlined in clause 7 Consulting on Workplace Issues about the need and incidence of such a process.  The consultation will include provision of relevant information and seek to reach a shared decision about the change. Seeking to reach a shared decision does not mean that consensus must be reached.

(ii)           Where after such consultations, management determines that job reductions through a downsizing or restructuring scheme are to occur, management will initiate consultations with affected employees, and/or where they choose their representative(s), on implementation arrangements including a timetable, processes to be used and measures to ensure equity.  Every effect will be made to ensure that remaining employees are not disadvantaged by increased workloads or loss of career prospects.

24.2          Voluntary measures

Where possible, the University will endeavour to manage job reductions through natural attrition and voluntary measures including:

·     Voluntary part-time employment;

·     Voluntary redeployment; and

·     Voluntary separation.

In circumstances when only one or a small number of positions are subject to redundancy, the University will not instigate a large scale call for expressions of interest in voluntary part-time employment, voluntary redeployment or voluntary separation.  The individuals whose positions are subject to redundancy will be afforded the opportunity to express an interest in the above voluntary measures.

24.3          Voluntary separation package

(i)      Employees who are successful in obtaining a voluntary separation will receive a separation payment as follows:

·               Six (6) weeks further employment or payment in lieu thereof at the discretion of the University; plus

·               A sum calculated at the rate of two (2) weeks salary, which shall include work related allowances, for each completed year of service with the University or part thereof, to a maximum entitlement of 52 weeks salary, but not less than the severance payment outlined in subclause 11.2 Fixed-term employment (fixed-term employees); plus

·               Balance of unused eight (8) week consideration period as described in University policy; plus

·               Payment on a pro-rata basis for long service leave calculated on completed years of service or part thereof, less nay period(s) of long serviced leave already taken; plus

·               Other leave entitlements and loadings payable on termination.

An employee who has worked different modes of employment on a continuous basis (eg full-time, part-time or casual), will have the equivalent full-time years of service used in the calculation of their voluntary separation payment. For example, where an employee has served for ten (10) years, eight (8) years on a full-time basis and two (2) years on a 50% part-time basis, this service will equate to nine (9) years full-time service.

(ii)   All payments under this clause shall be calculated on the employee’s salary rate at the date of cessation of employment.

11                  Schedule 2 to the Collective Agreement contains definitions of which the definition of “consultation” should be noted:

‘Consultation’ means conferring in a timely manner between the relevant employee(s), and where they choose their representatives, in such a way that the participants, who are provided with access to the relevant information, have the opportunity to contribute to and to influence the decisions.  Consultation with employees does not mean reaching agreement.

12                  The Union’s allegation, which is not contested by the University, is that, on or about 15 May 2007, the University made a decision not to renew the contracts of 200 of the fixed term general staff. Those affected by this decision included members of the Union.  It is not contested by the University that, in terms of cl 22.4 of the Collective Agreement, this decision had “significant consequences”, in that it was one which would lead to a substantial change in the composition, operation or size of the University’s workforce.  It is likewise not contested that the decision was one where changes were required in the University’s work activities, organisation and structure, within the meaning of those terms in clause 22.2 of the Collective Agreement.

13                  In these circumstances, the Union alleges that the University was obliged by cl 22.2 of the Collective Agreement to initiate consultation with either or each of the relevant employees or the Union about the need for the changes and the development of any significant change proposal prior to making the decision.  It is further alleged that the University did not, prior to making the decision, initiate consultation with either or each of relevant employees or the Union.  These allegations are not contested by the University.  It follows that the University has contravened cl 22.2 of the Collective Agreement.  For his part, Professor Rickard does not contest that he was “involved” in that contravention in terms of s 728 of the Workplace Relations Act.

14                  It is further alleged and not contested that the circumstances related above gave rise to what might be a termed a consequential or derivative breach of cl 22.3 of the Collective Agreement.  The breach is consequential or derivative in that it follows axiomatically from the absence of any consultation prior to the making of a decision that none of the mechanisms mentioned in cl 22.3 were engaged.

15                  Another consequential or derivative breach flowing from the absence of any consultation prior to the making of the decision is a breach of cl 24.1 of the Collective Agreement.

16                  Between 15 May 2007 and 28 May 2007, the University did follow a consultation process. Professor Rickard described that process in his affidavit as follows:

31          The consultation entered into by the University from 15 May to 28 May 2007 comprised:

(a)          On 17 and 18 May 2007, Mr Rees and Ms Roberts, acting on my behalf, held individual meetings with each Pro-Vice Chancellor, Head of Division and Head of Campus of the University (the senior managers) to advise that a minimum of 51 general staff fixed term appointments across the University (out of a possible 145 general staff fixed term appointments expiring at 30 June 2007) would not be renewed at 30 June 2007.

(b)         At those meetings, the senior managers were requested to consult with the relevant affected staff in their area and to provide advice to the Vice-Chancellor by 22 May 2007 regarding those general staff fixed term appointments which could not be renewed at 30 June 2007, as well as those general staff fixed term appointments which should be extended to 30 September 2007.

(c)          Following receipt of this advice from the senior managers, I made the final decision regarding the renewal and non-renewal of general staff fixed term appointments, and which individual employees were and were not to have their fixed term contracts extended or renewed on expiry.

17                  In addition, on 22, 28 and 29 May 2007, meetings of the staff consultative committee established under the Collective Agreement were held. In the course of these meetings it was stated on behalf of the University that 51 employees on fixed term contracts would not have their contracts renewed when they expired on 30 June 2007.  At the meeting on 29 May 2007, the University, via Professor Delves, refused to reconsider these terminations. This is alleged by the Union to constitute a separate breach of cl 22.3 of the Collective agreement by the University.  Even though, in the final result, only 34 fixed term appointments of general staff were not renewed at 30 June 2007, it is accepted by the University that, strictly, the refusal at the meeting of 29 May 2007 constituted a discrete breach of cl 22.3 of the Collective Agreement. It is not alleged that Professor Rickard was involved in that contravention.

18                  On 1 June 2007, Professor Rickard’s office prepared individual letters advising each of the affected 34 staff members that their fixed term appointments would not be renewed.  Those affected included members of the Union. 

19                  On 20 June 2007, the Union filed an application in the Australian Industrial Relations Commission (“the Commission”) pursuant to s 709 of the Workplace Relations Act.  The University was the respondent to that application.  The purpose of the proceeding in the Commission was to restrain the implementation by the University of the decision that came to be reached not to renew 34 fixed term appointments when they expired on 30 June 2007.  An arbitration hearing was conducted before Senior Deputy President Richards in the Commission on 29 June 2007.  His Honour handed down his decision in respect of the application that same day, in National Tertiary Education Industry Union v Central Queensland University [2007] AIRC 537, PR977528.  In so doing he adopted the following interpretation of cl 22 of the Collective Agreement:

[35]       However subclause 22.3 cannot be read separately from sub clause 22.2 of the Agreement.  Rather, it is logically interconnected with the structure of the preceding sub clause.  It is interconnected in that the consultation described in sub clause 22.3 can only occur in the context of the University’s decision making having only reached a stage whereby it has decided only that change may be necessary and that it may have significant effects if implemented.

[36]       It is because the consultation is to take place in this particular context that the meaningful consultation is given effect as referred to in sub clause 22.3.  And it is only in that decision-making stage that the employees and/or their representatives can consider and propose alternatives to managing change.

[37]       It is sufficiently apparent that at this decisional stage the University might propose the strategies it has developed for consultation and discussion.  This is made clear by the inclusion of the verb form ‘to consider’ in sub clause 22.3 of the Agreement.  But these must be strategies that are proposed only at the particular embryonic stage in the evolution of the University’s decision making described above.  The University cannot have come to a final or even a provisional conclusion on the implementation of these strategies before the consultation in clause 22 can take place.

[38]       Sub clause 22.5 prescribes further the steps the University must take at the completion of the consultation process described above.  If at this point the University proceeds to implement a significant change proposal it must embark upon a further tier of consultation, this time to:

·          Consult with affected employees (themselves or through their representative(s)) about the impact of the implementation of the change proposal on work;

·          Consult with affected staff about alternative options to implementing the changes on work; and

·          Consult with staff about options for avoiding detrimental impacts (such as retraining, part time work etc).  [Emphasis added]

20                  In the result, His Honour made the following determination:

[57]       The staged process of consultation required by clause 22 is outlined above.  The clause effectively serves as a fetter on the University’s prerogative to make decision about aspects of its organisation that have significant consequences for its workforce until such time as it has interacted in a prescriptive manner with its employees and/or their representatives.  Without doubt, the procedure to which the University agreed will slow its capacity to respond to changing circumstances and will require the allocation of more time (for consultation) in advance of decision making.  But this is the implication of the Agreement, the Agreement the University made with its employees and various of their representative organisations.

[58]       Further, the consultation process envisaged by the Agreement is required to commence at an embryonic point in the decision making process, that is when the very prospect of major change with major consequences appears as a possible outcome of a set of particular circumstances.

[59]       Put another way, clause 22 invokes consultation when a view is formed by the University that significant change with significant consequence may be necessary.  The University appears to have invoked the clause only after it had formed a view that such change was indeed necessary.  That is, the University’s decision making appears to me to have traversed the critical juncture between the prospect of significant change with significant consequences and the actuality of that change.

[60]       The decision making by the University therefore was not made in conformity with its Agreement.  [Emphasis added]

21                  His Honour declined to grant any relief which would restrain the ability of the University to allow the fixed term appointments to expire by effluxion of time.  There was no appeal by the University or by the Union against the decision of Senior Deputy President Richards. 

22                  I respectfully agree with the remarks made by His Honour in respect of the interpretation and operation of the cl 22 of the Collective Agreement.  I would only add that, while the clause does introduce a lag into the University’s decision making processes in relation to those bound by the agreement, that temporal element is not fixed but flexible according to prevailing circumstances.

23                  Sections 328 of the Workplace Relations Act makes provision for what is known as a “Union Collective Agreement”. The agreement in question in this case is of this kind.  It resulted from negotiations with the University conducted by a number of unions acting as a single bargaining unit.  Following the reaching of agreement between the University and those unions, the Collective Agreement was approved by a majority vote of the relevant University workforce as contemplated by s 340(2) of the Workplace Relations Act.  The agreement was then lodged with the Office of the Employment Advocate (now termed the Workplace Authority Director) pursuant to Div 5 Pt VIII of the Workplace Relations Act.  The Agreement came into operation on the date that it was lodged – s 347, Workplace Relations Act. 

24                  When it came into operation the effect of s 351 of the Workplace Relations Act was that the Collective Agreement bound the University, each person whose employment was then or was at anytime when the agreement was in operation subject to that agreement and, given that the agreement was a Union Collective Agreement, each of the industrial organisations, including the Union, which was a party to the agreement. 

25                  The foregoing brief survey of provisions in the Workplace Relations Act relevant to the making and coming into operation of the Collective Agreement serves to remind that such an agreement is not a mere matter of private contract.  More particularly, given that the acknowledged breaches arise against the background of action taken by the University in response to unforseen, and, it seems, unforeseeable events having profound financial ramifications, it makes particularly apposite the following observations made by Keely J in Lynch v Buckley Sawmills Pty Ltd (1984) 3 FCR 503 at 508:

“In this connection it is important that the respondent – and other employers bound by the award or by the other awards under the Act – understand the importance of complying with an award and it follows that any decision taken by them which is regarded as affecting their obligations to comply with particular provisions of an award or the award generally should only be taken after careful consideration.  They must not be left under the impression that in times of financial difficulty they can breach an award made under the Act either with impunity or in the belief that no substantial penalty will be imposed in respect of a breach found by a court to have been committed.”

26                  While His Honour’s remarks were addressed to the terms of an industrial award and those bound by an award, they are just as applicable to the terms of a collective agreement which has come into operation per force of the Workplace Relations Act and to those bound by such an agreement.  When the terms of a collective agreement come into operation per force of statute they become part of the law of the land and must be obeyed by all of those bound by the agreement; see by analogy, Electrical Trades Union of Australia v Sims Products Ltd trading as Besco Batteries (1992) 42 IR 250 at 253, per Gray J (“Sims Products case”).  Clauses 22 and 24 of the Collective Agreement, like the other terms of that agreement, were not aspirational statements. 

27                  There is no doubt that the University and Professor Rickard were aware in a general sense of a need to consult with affected persons and their trade union representatives.  What was ignored though was the staged process for which cl 22 of the Collective Agreement in particular provided, as described by Senior Deputy President Richards.  This failure was acknowledged by the University and Professor Rickard at the earliest possible opportunity following the institution of the present proceedings.

28                  In the Sims Products case Gray J was confronted with an application for the imposition of pecuniary penalties arising out of a breach of a consultation clause in respect of redundancies then found in the Metal Industry Award 1994.  In effect, the clause provided that, where an employer had made a definite decision that it no longer wished a particular job to be done by anyone in circumstances where this was not due to the ordinary and customary turn over of labour and that the decision may lead to termination of employment, the employer was obliged to hold discussions with directly affected employees and with their Union or Unions. The award provided that such discussions where to take place as soon as was practicable after the employer had made a definite decision of the kind described.  There was a separate provision in the award for the notification of the Commonwealth Employment Service by the employer where such a definite decision had been made.  In that case the employer made a definite decision of the kind contemplated in the award which decision did in fact lead to the termination of its employees at a particular plant.  It held no discussions at all with those employees or the union prior to effecting the termination of the employees.  Nor did the employer give any notice of the kind contemplated in the award to the Commonwealth Employment Service.

29                  The breaches of the award in the Sims Products case were flagrant.  In a sense, so too were the breaches in the present case but, as was submitted on behalf of the University and Professor Rickard, a distinguishing feature in the present case is that the University did not completely ignore a need for consultation.  Rather, it conflated what was meant to be staged consultation process. 

30                  In his evidence on the penalty hearing, Professor Rickard stated that, even if the form of consultation for which the “literal terms” of the Collective Agreement had been undertaken, “the same eventual outcomes would have been achieved as were achieved in the process which was directed by me”.  Given the anticipated financial effect of the decline in enrolments, that may have been the case, but it is, with respect, nothing to the point in terms of mitigation in respect of the particular Collective Agreement breaches alleged by the Union. 

31                  One reason why this is so is provided by analogy in another earlier award breach case arising from a failure to conduct consultations prior to the effecting of redundancy based terminations, Gibbs v City of Altona (1992) 37 FCR 216, at 221.  In the course of his Judgment in that case Gray J remarked:

“It is possible that, had requisite discussions taken place, with the Union in possession of the required information, some way might have been found of avoiding the termination of Mr Clarke’s employment.  It is not enough to say that the Counsel of the Respondent was unable to see anyway in which Mr Clarke might have been retained in another position.  It is possible that the Union might have been able to suggest a way in which this could have been done.  The Respondent should have taken the trouble to ascertain precisely what its award obligations where.”

32                  Here, the University should have taken the trouble to ascertain precisely what its Collective Agreement obligations were.  The response under contemplation to the threat to its financial position affected its workforce.  That, in itself, should have alerted those advising the Vice Chancellor that it would be prudent to consult the terms of the Collective Agreement.  Perhaps it may have been possible at the early stage at which cl 22 operated, after consultation, to conceive of some variant to the course contemplated.  Even if it was not, that does not mean that there is no utility either in cl 22 or, for that matter, cl 24 of the Collective Agreement.  The digestion by affected employees of the bitter pill of the prospect of non-renewal of their fixed term appointments may well have been eased by the knowledge at an early stage of the truly dire predicament faced by the University and that, notwithstanding the consideration of such input or suggestion as they were able to offer, no other course was open in practice.  Suspicion and mistrust in a workplace with resultant potential for industrial disharmony feed upon an absence of candid communication between employer and employee, not on the presence of such communication.  Consultation at least allows employees or, where appropriate, their trade union to influence the taking of a decision by an employer.

33                  These matters noted, I accept that the fact that the University did engage in some consultation, albeit not at all of the stages contemplated in the Collective Agreement, is a mitigating factor. It seems that this conflation was the result of a misunderstanding on the part of the Vice Chancellor and those advising him as to the precise nature and extent of the consultation obligations assumed by the University under the Collective Agreement.

34                  It was submitted on behalf of the University that the Union had already achieved, via the proceedings in the Commission, an arbitrated decision as to the extent to which the University had not complied with its consultation obligations under the Collective Agreement.  That carried with it, I apprehended, the suggestion that no separate purpose was achieved by the institution in August last year of the application for pecuniary penalties.  I disagree.  It is certainly unlikely that the University, especially under Professor Rickard’s stewardship, will again breach either cl 22 or cl 24 of the Collective Agreement during the life of that agreement. No past breaches of the Workplace Relations Act are alleged against the University.  To that end, I see no particular need for specific deterrence arising in the circumstances of this case.  However, there are other public interests served by the institution of a proceeding like the present.  Further, the Union is one of the parties authorised by s 718 of the Workplace Relations Act to institute such a proceeding.  As Finkelstein J remarked in the Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228, 230-1, “… even if there be no need for specific deterrence, there will be occasions when general deterrence must take priority, and in that case a penalty should be imposed to mark the law’s disapproval of the conduct in question, and to act as a warning to others not to engage in similar conduct”.  The imposition of a pecuniary penalty in the present case will serve as a reminder that the terms of collective agreements made for the purposes of the Workplace Relations Act must be considered in managerial decision making even, and perhaps especially, in the face of alarming financial imperatives. 

35                  Another factor considered by Finkelstein J in relation to general deterrence was the need to render at least to a degree unprofitable breaches of an industrial instrument in circumstances where the breach may be occasioned by a profit motive.  The University being a public educational institution conducted on a “not for profit basis”, I do not apprehend this factor to be of particular significance, although any penalty imposed will, of course, serve to reduce in some measure funds otherwise available for those educational ends.

36                  It was submitted on behalf of the respondents that this was a case in which the Court ought, in exercise of its discretion, to impose no penalty either on the University or on Professor Rickard personally.  It seems to me that a need for general deterrence dictates that some penalty ought to be imposed on the University.

37                  The University is constituted under the Central Queensland University Act 1998 (Qld) as a body corporate – s 4, Central Queensland University Act 1998.  The University’s governing body is its Council – s 8, Central Queensland University Act 1998.  The Council consists of official members (the Chancellor, the Vice Chancellor and the President of the Academic Board, five members appointed by the Governor in Council and three elected members, one drawn from the academic staff, one from the general staff and one student – see Div 3 of Part II of the Central Queensland University Act 1998.  The Vice Chancellor is the University’s Chief Executive Officer – s 32, Central Queensland University Act 1998.  He is responsible to the Council for his actions in managing the University’s operations. He is assisted by both academic and general staff in the operations of the University. 

38                  I see Professor Rickard as standing in a different light to the University in relation to penalty.  His joinder seemed to me, with respect, to be gratuitous in the circumstances of the present case.  He as Vice Chancellor was responsible for the day to day management of the University.  It was in that capacity that he came to sign the Collective Agreement on behalf of the University but neither the negotiation of that Agreement nor the breaches were the result of his individual actions.  He frankly and with obvious embarrassment acknowledged in the course of his evidence an “involvement” as alleged.  The University’s negotiating team in respect of the making of what became the Collective Agreement was led by the Deputy Vice Chancellor, Professor Delves, who also chaired negotiation meetings. Professor Rickard gained no financial benefit from the breaches. Those breaches reflected not just an involvement by Professor Rickard but a failure by those whose duty it was to advise him, including those whom one might presume from involvement with the negotiation of the terms of the Collective Agreement had a much more intimate knowledge than did Professor Rickard of the terms of that agreement. There was a failure to highlight to the Vice Chancellor the terms of cl 22 and cl 24 at appropriate times. The University’s breaches were the result of a collective failure of its senior managerial staff, not just the conceded involvement of Professor Rickard. Penalising the University will aptly highlight that collective failure.

39                  Professor Rickard is a distinguished Australian academic of good character.  No finding of a previous breach of any industrial instrument or involvement in the same is alleged against him. He has acknowledged frankly and at the earliest possible stage his “involvement” in terms of the Workplace Relations Act in the breaches alleged arising out of events which occurred prior to 29 May 2007.  There is no need whatsoever in his case for specific deterrence. Such need as there is for general deterrence in respect of the breach of a collective agreement will be served by the imposition of a penalty on the University. I decline to impose a separate penalty in respect of Professor Rickard’s involvement.

40                  The question becomes what should the penalty be in the case of the University?

41                  Subsection 719(2) of the Workplace Relations Act provides that:

Section 719(2)

Subject to subsection (3), where:

(a)       2 or more breaches of an applicable provision are committed by the same person; and

(b)       the breaches arose out of a course of conduct by the person;

the breaches shall, for the purposes of this section, be taken to constitute a single breach of the term.

42                  Subsection 719(3) is not applicable in the circumstances of the present case.  There was some debate before me as to whether and to what extent s 719(2) of the Workplace Relations Act intruded in the circumstances of the present case.  In the City of Altona case, at 223, Gray J had occasion to consider the meaning and the effect of a like provision, s 178(2), found in the former Conciliation and Arbitration Act 1904 (Cth).  His Honour remarked of that provision:

The object of s 178(2) appears to be that a party bound by an award and pursuing a course of conduct involving repeated acts or omissions, which ordinarily be regarded as giving rise to a series of separate breaches, should not be punished separately for each of those breaches.  If such a party has pursued a course of conduct which gives rise to breaches of several different obligations, there is no reason why it should be treated as immune in respect of its breach of one obligation, merely because it has acted in breach of another.  This reasoning leads to the conclusion that each separate obligation found in an award is to be regarded as a “term”, for the purposes of s 178 of the Act.  The ascertainment of what is a term should depend not on matters of form, such as how the award maker has chosen to designate by numbers or letter the various provisions of an award, but on matters of substance, namely the different obligations which can be spelt out.  For these reasons, I incline to the view that each separate obligation imposed by an award is to regarded as a “term”, for the purposes of s 178 of the Act.  If the different terms impose cumulative obligations or obligations that substantially overlap, it is possible to take into account the substance of the matter by imposing no penalty, or a nominal penalty, in respect of breaches of some terms, but a substantial penalty in respect of others.

43                  Like Gray J, I incline to the view that each separate obligation imposed by a collective agreement is an “applicable provision” for the purposes of s 719(2) of the Workplace Relations Act.  The breaches of cl 22.2 and cl 22.3 in particular are, therefore, discrete breaches of discrete “applicable provisions”.  Subsection 719(2) of the Workplace Relations Act has no application to those alleged breaches.  It obviously has no application to the alleged breach of cl 24 of the Collective Agreement.  That subsection does though, in my opinion, have application to the two alleged breaches by the University of cl 22.3 of the Collective Agreement, one which occurred prior to the decision made on or about 15 May 2007, the other which occurred on 29 May 2007.

44                  Such matters concerning the operation of s 719(2) of the Workplace Relations Act acknowledged, there is in this case also “overlap” in this instance, in the operation and application of cl 22 and cl 24 of the Collective Agreement. Thus the same considerations as those described by Gray J in the passage quoted arise in relation to the imposition of penalty. 

45                  The maximum penalty that may be imposed under s 719(1) of the Workplace Relations Act for a breach of an “applicable provision”, here a provision of a collective agreement, is, for a body corporate, 300 penalty units.  Materially, the effect of s 4AA of the Crimes Act 1914 is that the amount of a “penalty unit” is $110.  That means that the maximum applicable penalty for a given breach of a provision of the Collective Agreement by the University is $33,000.  So far as the University is concerned, four breaches in all of the Collective Agreement are alleged.  Two of those breaches are affected by the operation of s 719(2) of the Workplace Relations Act.  That means that the cumulative total of the maximum applicable penalties in respect of the University is $99,000.  This is hardly a case which calls for the imposition of a maximum penalty in respect of any breach, especially having regard to the very timely acknowledgment of the commission of those breaches by the University in these proceedings.

46                  Neither the Union nor the University submitted that there were any directly applicable comparative sentences, a position confirmed by my own researches.  It is true, as Branson J noted in Construction, Forestry, Mining and Energy Union v Coal and Allied Operations Pty Ltd (No 2) (1999) 94 IR 231, at 232 in respect of a materially similar earlier penalty regime, that the Workplace Relations Act does not give any explicit guidance as to the circumstances in which an order imposing penalty will be appropriate or as to the circumstances in which a penalty of or near the maximum or alternatively of a lesser amount will be warranted. That does not mean that the fixing of penalty is at large, unrestrained by evident statutory purposes or the circumstances in which a breach occurred and its consequences.  In the context of this case, the penalty must reflect and be able to be seen to reflect considerations which I have emphasised – sufficiently high to serve as a general reminder about the obligation to adhere to a collective agreement yet acknowledge conflated rather than ignored consultation which seems to have been the result of a misunderstanding as to the precise nature of the consultation obligations assumed by the University under the Collective Agreement, a timely acceptance of the alleged breaches and an absence on the part of the University of any past breaches of the Workplace Relations Act.  It must reflect the circumstance that the consequence of the breaches was the loss of a chance, the chance to be heard and to influence.  It is not possible to conclude on the material before me that the fate of those fixed term appointees affected would have been any different had all of the required consultation been undertaken.

47                  I find that the University breached the following provisions of the Collective Agreement:

(a)               clause 22.2, between 1 May and on or about 15 May 2007, by failing to consult, as provided for by that provision, prior to making its decision on or about 15 May 2007.

(b)               clause 22.3, between 1 May and 15 May 2007, as a consequence of the breach of clause 22.2;

(c)               clause 24, between 1 May and on or about 15 May 2007 by failing to undertake the consultations required by that provision;

(d)               clause 22.3 – on 29 May 2007 by failing to consult in the way required by that provision.

48                  There was also some debate before me as to whether declarations ought to be made in respect of these breaches.  So far as I can tell from previous proceedings for civil penalties in industrial cases, the practice of the Court seems to be not to make such declarations in the formal orders pronounced by the Court.  I decline in this case to make declarations but rather, as seems to be the practice, will make orders imposing penalties.  Those penalties will be as follows:

(a)                for a breach of cl 22.2 of the Collective Agreement:  a penalty of $6,600;

(b)               for the breaches of cl 22.3:  a penalty of $200;

(c)                for the breach of cl 24: a penalty of $200.

49                  In fixing penalties in this way I have adopted an approach which commended itself to the High Court in the original jurisdiction in customs prosecutions (then regarded as suits for the recovery of a pecuniary penalty) in circumstances where what was, in essence, a single transaction gave rise to what were strictly multiple offences. In that context it was regarded as material to consider that, “though the offences in each group were separate offences in law, they were substantially contemporaneous and connected” L Vogel & Sons Pty Ltd v Anderson, Minister of State for Customs and Excise (1968) 120 CLR 157, at 168; applied Murphy, Minister of State for Customs and Excise v H. F. Trading Co Pty Ltd (1971) 47 ALJR 198, at 200.  Here, though there is no fixed minimum penalty, it is necessary, in my opinion, that the separate breaches of cl 22.3 and cl 24 be penalised but that those penalties reflect their consequential, derivative or overlapping qualities relative to the breach of cl 22.2.

50                  There remains a question as to whether some or all of the total of the penalties imposed ought to be awarded to the Union as it has requested pursuant to a s 841(b) of the Workplace Relations Act.  The University opposes the making of such an order.  Again in this context it questions the purpose served by these proceedings in light of the outcome in the Commission and submits that I should conclude that the Union’s purpose was solely to derive a financial “windfall” of the kind described by Finkelstein J in the CPSU v Telstra case.  I reject that submission.  I have already highlighted the separate public interest served by a civil penalty proceeding like the present and the recognition by the Parliament of an industrial organisation such as the Union as an appropriate party in the present circumstances to initiate such a proceeding.   Further, there is long standing authority in this Court which draws attention to the role that a provision like s 814(b) has in the encouragement of a common informer.  I respectfully agree with the following observation made by Wilcox J in Finance Sector Union v Australia and New Zealand Banking Group Limited [2002] FCA 1035, at [16]:

“In CPSU Finkelstein J suggested that such an order should not be made if it is likely to result in a “windfall to the organisation”.  I am not sure I agree with that; the rationale of the practice is that it tends to encourage a “common informer” to police the relevant legislation:  see Vehicle Builders’ Employees’ Federation of Australia v General Motors-Holden Pty Ltd (1977) 32 FLR 100 at 113.  That rationale is likely to be defeated if the common informer is not to be allowed to make a profit.”

51                  I have considered whether some part of the total penalty ought not be ordered to be paid to the Union in light of what I have termed the gratuitous joinder of Professor Rickard.  However, it seems to me that so to do would be wrong in principle as no part of the total penalty is referable to a penalty imposed in respect of a separate breach by Professor Rickard. The penalty proceeding did though exhibit a vice akin to that described by Taylor J in Scott v Geoghan & Sons Pty Ltd (1969) 43 ALJR 243, at 245 whose remarks were endorsed by Gibbs J (as his Honour then was) in Murphy, Minister of State for Customs and Excise v H. F. Trading Co Pty Ltd supra, at 200 – the joinder of a multiplicity of charges arising out of the one transaction. The policy objectives served by a civil penalty proceeding under the Workplace Relations Act did not, in my respectful opinion, require the allegation of derivative, consequential or overlapping breaches. Of the total of the penalties imposed, I therefore propose to order that the sum of $6,600 be paid to the Union and the balance of $400 be paid to the Commonwealth of Australia pursuant to s 841(b) and 841(a) respectively of the Workplace Relations Act.

52                  Neither in the rules of court (Order 48) nor in the Workplace Relations Act or the regulations made there under is there any particular provision as to procedure to be followed in respect of the making and receipt of penalty payments.  I therefore direct as follows:

(a)           as to the sum of $6,600 to be paid to the Union, that the receipt of the Union’s secretary or other proper officer of the Union shall be a good discharge to the University in respect of its satisfaction of this payment order;

(b)          as to the sum of $400 ordered to be paid to the Commonwealth of Australia, I direct that this sum be paid to the District Registrar for payment in turn by him into the Consolidated Revenue of the Commonwealth with the receipt of the District Registrar being good discharge to the University of this payment order.  If payment is effected by cheque rather than legal tender the cheque should be made payable to “Federal Court of Australia”.

Associate:

Dated:         11 April 2008