FEDERAL COURT OF AUSTRALIA

Alfred v Construction, Forestry, Mining and Energy Union [2011] FCA 556

THE COURT DECLARES THAT:

1.    Between 19 May and 28 May 2010 the Respondent contravened s 38 of the Building and Construction Industry Improvement Act 2005 (Cth) by engaging in unlawful industrial action (being the establishment and maintenance of a total ban on the performance of work at the Melbourne Markets Relocation Project Site) (“the site”) by enforcing a blockade of the main entrance to the site over that period.

2.    Between 19 May and 28 May 2010 the Respondent contravened s 44 of the Building and Construction Industry Improvement Act 2005 (Cth) by organising and taking action (being the establishment and maintenance of a blockade at the main entrance to the site over that period) with the intent to coerce Fulton Hogan Pty Ltd to do either or both of the following:

(a)    agree to make an enterprise agreement on terms acceptable to the Respondent;

(b)    terminate or vary an existing enterprise agreement.

THE COURT ORDERS THAT:

3.    A penalty of $100,000 be imposed on the Respondent in respect of its contraventions of ss 38 and 44 of the Building and Construction Industry Improvement Act 2005 (Cth).

4.    The penalty imposed upon the Respondent in paragraph 3 be paid into the Consolidated Revenue Fund within 30 days.

5.    The Respondent pay the Applicant’s costs of the proceeding, fixed at $40,000, within 30 days.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

introduction

1    The Applicant is an inspector appointed for the purposes of the Building and Construction Industry Improvement Act 2005 (Cth) (“the BCII Act”). He seeks declarations that the Respondent (“the CFMEU”) contravened ss 38 and 44 of the BCII Act, the imposition of pecuniary penalties in respect of those contraventions and ancillary relief.

2    The alleged contraventions occurred in the course of a dispute relating to the performance of work at the site of a new Melbourne fruit, vegetable and flower market in Epping (“the market”). The CFMEU wished to represent workers engaged in the site preparation works at the market. The sub-contractor engaged to perform this work entered into a greenfields agreement with another union, the Australian Workers’ Union (“the AWU”) to regulate the employment of workers engaged by it to work at the market. In an effort to force the contractor to enter into an agreement with it, the CFMEU blockaded the site for some 10 days. During this period work at the site ceased.

3    After the application was made and while the hearing was pending discussions took place between the parties. Following those discussions a statement of agreed facts was prepared. The CFMEU has admitted the facts necessary to establish the contraventions of ss 38 and 44 of the BCII Act which the Applicant has alleged.

4    The parties have agreed on and proposed a monetary penalty which they submit should be imposed in respect of the contraventions.

THE LEGISLATION

5    Section 38 of the BCII Act provides that

“A person must not engage in unlawful industrial action.”

6    “Unlawful industrial action” is defined in s 37 of the BCII Act as follows:

“Building industrial action is unlawful industrial action if:

(a)    the action is industrially-motivated; and

(b)    the action is constitutionally-connected action; and

(c)    the action is not excluded action.”

7    “Building industrial action” is defined, relevantly, in s 36(1) as:

…

(b)    a ban, limitation or restriction on the performance of building work, or on acceptance of or offering for building work, in accordance with the terms and conditions prescribed by an industrial instrument or by an order of an industrial body; or

(c)    a ban, limitation or restriction on the performance of building work, or on acceptance of or offering for building work, that is adopted in connection with an industrial dispute (within the meaning of subsection (4));

(d)    …”

Paragraphs (e), (f) and (g) contain certain exceptions, none of which has application to this case.

8    “Constitutionally-connected action” is defined, in s 36, to cover action taken by a registered organisation.

9    The term “industrially-motivated” is also defined in s 36. It means:

“… motivated by one or more of the following purposes, or by purposes that include one or more of the following purposes:

(a)    supporting or advancing claims against an employer in respect of the employment of employees of that employer;

(b)    …

(c)    advancing industrial objectives of an industrial association;

(d)    disrupting the performance of work.

…”

10    By s 36(4) “industrial dispute” is defined to mean, inter alia, “an industrial dispute … that is about matters pertaining to the relationship between employers and employees”; and “a dispute about the representation of the industrial interests of employees by an industrial association of employees.”

11    Section 44(1) provides, relevantly, that:

“(1)    A person must not:

(a)    take or threaten to take any action; or

(b)    refrain or threaten to refrain from taking any action;

with intent to coerce another person, or with the intent to apply undue pressure to another person, to agree, or not to agree:

(c)    to make … a building enterprise agreement; or

(d)    to approve any of the things mentioned in paragraph (c).”

12    Section 69 deems the conduct of officers or agents of a union, when acting in that capacity, to be the conduct of that union.

13    Section 49(1) empowers the Court to impose a pecuniary penalty on a person who has contravened ss 38 and 44 of the BCII Act.

14    Sections 38 and 44 of the BCII Act are both grade A civil penalty provisions. The maximum pecuniary penalty for a grade A civil penalty provision committed by a union is one thousand penalty units. This number of units corresponds with a monetary figure of $110,000: see s 4AA of the Crimes Act 1914 (Cth).

15    An ABC Inspector, such as the Applicant, has standing to apply for the imposition of penalties under s 49: see s 49(6)(b).

BACKGROUND TO THE CONTRAVENTIONS

16    The development of the market at Epping is a public project which is being financed by the Victorian Government. Its estimated cost is approximately $291 million. The new market is scheduled to open in 2012.

17    The Victorian Government appointed Bovis Lend Lease Pty Ltd (“Bovis”) as the principal contractor for the project.

18    In December 2009 Bovis engaged Fulton Hogan Pty Ltd (“Fulton Hogan”) as a subcontractor to carry out the civil construction works on the Epping site. These works included site establishment, bulk earthworks, the laying of bitumen surfaces, roads and pavements, storm water drainage and service trenching.

19    Fulton Hogan had had a history of industrial negotiations with the CFMEU. In 2005, Fulton Hogan’s predecessor, the FRH Group Pty Ltd, had entered into an enterprise agreement with the CFMEU (“the 2005 agreement”). That agreement had regulated the terms and conditions of employment of Fulton Hogan employees on various projects between 2006 and 2009 on which Fulton Hogan was engaged to perform site clearing works of the kind which were to be performed on the market site. But for a development to which I will shortly refer this agreement would have applied to Fulton Hogan’s employees on the market site. It was an agreed fact that the CFMEU had a reasonable expectation, based on its previous dealings with Fulton Hogan, that its agreement with Fulton Hogan’s predecessor would have been applied on the project.

20    In or about September 2009 and, apparently, in anticipation of obtaining work on the market site, and, without notice to the CFMEU, Fulton Hogan had contacted the AWU and commenced negotiations for a greenfields agreement with it which was to apply at the market site. That agreement was entered into on 8 December 2009. It was entitled “The Fulton Hogan and Australian Workers’ Union Melbourne Market Relocation Project Agreement 2009/2012” (“the greenfields agreement”). On 22 January 2010 it was approved by Fair Work Australia. It was to apply at the market site on and from 29 January 2010.

21    Fulton Hogan commenced operations on the site in December 2009. It had five direct employees working as labourers on the site at varying times. In addition it engaged the services of a number of sub-contractors for haulage, earthmoving and trench digging work. These sub-contractors provided plants with drivers/operators. They included Egans Group Pty Ltd, Emerald Earthmoving Pty Ltd, Timco Earthworks Pty Ltd, W & K Fitchett Pty Ltd, H2O Hydration & Rayne Man and Trenching Systems Australia Pty Ltd.

22    Fulton Hogan’s employees performed work on the market site in accordance with the terms and conditions prescribed by the greenfields agreement and the Building and Construction On-site Award 2010 (“the Award”). The employees of Fulton Hogan’s subcontractors performed their work pursuant to the terms of the Award and relevant enterprise agreements.

23    When it became aware of the agreement the CFMEU filed a notice of appeal against the decision approving it. On 19 February 2010 Fair Work Australia refused an application by the CFMEU that the approval be stayed pending the hearing and determination of the appeal. The appeal was listed to be heard on 14 April 2010. On that day the CFMEU applied for an adjournment. The application was refused. The CFMEU then discontinued its appeal.

24    During this period discussions took place between Mr Gareth Stephenson, an organiser employed by the CFMEU, and two managers employed by Fulton Hogan. They discussed the possibility of an agreement being entered into to replace the 2005 agreement and the making of a further project agreement to cover work on the market site. In the course of these discussions Mr Stephenson advised Fulton Hogan’s representatives that the CFMEU would not accept an AWU agreement operating on the site. On or about 13 April 2010 he telephoned Fulton Hogan’s southern region human resources manager, Ms Katrina Harper-Greenwell, and sought to persuade her that Fulton Hogan should negotiate with the CFMEU an enterprise agreement for the project. He said that the matters in dispute between his union and Fulton Hogan “could be very easily resolved if we fixed the agreement”. Ms Harper-Greenwell asked Mr Stephenson to send her an email setting out the CFMEU’s position. This was done on the same day. Ms Harper-Greenwell did not respond to Mr Stephenson’s email.

25    On 19 May 2010, the blockade of the market site commenced. A summary of events which occurred during the blockade, taken from the agreed statement of facts, follows.

19 May 2010

26    The blockade commenced at about 6:00 am. There were 15 to 20 persons gathered outside the main entrance to the site. These included a number of CFMEU organisers. Five or six cars were positioned across the entrance so as to render it impossible for any vehicle approaching the site to enter it without first stopping. At least three of the cars belonged to the CFMEU.

27    Workers who sought to enter the site were advised by CFMEU organisers that there was no work available and that they should go home. Trucks were not able to enter the site. By about 8:30 am over 20 trucks had banked up outside the site.

28    When Bovis’ project manager asked one of the CFMEU organisers what was going on he was told that he should contact a CFMEU official and get Fulton Hogan’s project manager to speak to Mr Ralph Edwards, the president of the CFMEU Construction and General Division, Victorian Branch.

29    At about 8:30 am one of Fulton Hogan’s sub-contractors was advised by Mr Shaun Reardon, an organiser and vice president of the CFMEU’s Construction and General Division, Victorian Branch, that “nobody’s going in and nothing’s coming out. You won’t be working until this is resolved”.

30    In the course of the day CFMEU flags and banners were positioned near the entrance. Gazebos, deckchairs, a 44 gallon drum and a pile of fire wood were placed nearby.

31    Police attended the site. At mid afternoon the senior officer present spoke to Mr Reardon and asked that access to the site should be allowed. Mr Reardon responded that he would get advice from his superiors. Shortly afterwards Mr Reardon spoke to the police officer, using words to the effect that “based on what I’ve been instructed, I won’t be removing the blockade or the picket.”

20 May 2010

32    At about 7:00 am a number of CFMEU organisers were present at the main entrance. The vehicles that had been impeding access to the site had been removed. In their place was a large quantity of crushed rock which had been dumped across the entrance during the night. The rock pile made it impossible for a truck or any heavy equipment to enter or leave the site. Forty four gallon drums and deckchairs were positioned at or immediately next to the gate. One of the 44 gallon drums was placed next to the rock pile and in front of the entrance. It prevented any vehicle from entering or leaving the site. A fire was burning in that drum. Gazebos were placed behind the pile of crushed rock. The locks on the gates had been glued shut with superglue. Signs with derogatory messages about Bovis and Fulton Hogan had been hung nearby.

33    When Bovis’s project manger asked one of the organisers to remove the 44 gallon drum so that managers and administrative staff could drive their cars into and out of the site the organiser made a telephone call. Shortly afterwards he told the project manager that staff could come in on foot but could not drive their cars onto the site.

34    About 7:00 am one of Fulton Hogan’s sub-contractors asked two CFMEU organisers how long the blockade was going to continue. One of the organisers, Mr Mick Powell, responded with words to the effect: “It’s a CFMEU site. It will go on for as long as we say it will go on.”

35    At about 8:00 am representatives of Fulton Hogan met with senior representatives of the CFMEU, including Mr Edwards, at the CFMEU office in Carlton. The CFMEU officials said that the market site was a fenced building project, that all such work on such a site was CFMEU work and that the greenfields agreement would not be tolerated by the CFMEU. They complained that the greenfields agreement had been entered into in secret without giving the CFMEU an opportunity to put forward an enterprise agreement for the project. They outlined possible ways in which such an enterprise agreement might be struck. One option raised by them was to “split” the site into separate civil works and building works and to negotiate an enterprise agreement to cover building works on terms and conditions agreeable to the CFMEU. They identified what they saw as the deficiencies of the greenfields agreement.

36    No workers were able to enter the site on this day and no construction work was carried out.

37    Late in the afternoon the Court heard an urgent application by an inspector for injunctive relief. The Court made interim orders restraining continuation of the blockade. Sealed copies of the Court’s orders were served on the branch secretary of the CFMEU’s Construction and General Division, Victorian Branch by email at approximately 6:46 pm.

21 May 2010

38    At about 7:00 am about 20 persons were standing at the entrance gate to the market site. At about 7:55 am one of the union organisers gave an assurance that managers and administration staff would be able to enter the site without harassment.

39    The crushed rock, 44 gallon drums, gazebos and deckchairs remained where they had been the previous day. They prevented any vehicle entering or leaving the site. A fire continued to burn in one of the drums. The CFMEU flags and the signs remained in place.

40    At 10:13 am sealed copies of the Court’s order which had been made the previous evening were served on the CFMEU at the office of its Victorian Construction and General Division.

41    Despite the terms of the orders, during this day a number of vehicles, registered to the CFMEU, were parked within 25 metres of the main entrance to the site.

22 and 23 May 2010

42    The obstructions, earlier described, to the entrance to the market site remained in place over this weekend.

24 May 2010

43    On this morning a number of CFMEU organisers were present at the site. The obstructions of the entrance remained in place.

44    At about noon a further meeting was held between representatives of Fulton Hogan and the CFMEU at the CFMEU office in Carlton. Further options were discussed to separate the civil and building works on the site and to provide for separate representational rights for the CFMEU and the AWU. One of the CFMEU officials present, Mr John Setka, said that, if an agreement could be reached, Fulton Hogan employees and sub-contractors would be allowed onto the site.

45    In the course of the day CFMEU organisers made arrangements, through mobile text messages, to roster other officials to attend at the site.

46    At 2:15 pm the Fulton Hogan application for injunctive relief returned to the Court. There was no appearance by the CFMEU. The injunctions were continued subject to some minor amendments.

47    Despite the terms of the injunction at least three vehicles which were registered to the CFMEU were parked within 30 metres of the main entrance to the site at various times during the day.

25 May 2010

48    CFMEU officials were present at the site throughout the day. The obstructions remained in place.

49    At about 10:55 am the order made by the Court the previous day was served on the CFMEU at its office in Carlton. Shortly afterwards copies of the orders made on 20 May and 24 May were served at the CFMEU’s national office in Sydney.

50    At various times during the day at least two vehicles registered to the CFMEU were placed within 20 to 30 metres of the main entrance to the site.

26 May 2010

51    CFMEU officials were present at the site at various times throughout the day. The obstructions to the entrance remained in place. At about 3:30 pm a truck arrived and delivered wood for the fire which was burning in the drum.

52    At 4:00 pm a further meeting took place between representatives of the CFMEU and Fulton Hogan at the CFMEU’s Carlton office. In the course of the meeting one of the Fulton Hogan representatives asked Mr Edwards if the CFMEU was proposing comply with the Court orders. Mr Edwards responded with words to the effect: “It’s not for me to say. The last time it cost us a shit load of money.” Mr Setka said words to the effect that the CFMEU would need representation on the site before access would be granted.

53    Following the meeting Fulton Hogan wrote to the CFMEU advising that it was prepared to enter into negotiations for an enterprise agreement with the CFMEU in relation to the project if the CFMEU agreed immediately to lift its blockade of the site.

54    In the course of the day a vehicle registered to the CFMEU was parked within 30 metres of the main entrance to the site.

27 May 2010

55    Again CFMEU officials were present at the site. The various obstructions remained in place.

56    About 3:00 pm the Victorian branch manager for Egans Group Pty Ltd telephoned the CFMEU Victorian branch office in Carlton. He asked to speak to the organiser responsible for the site. He was put through to Mr Paul Sullivan. The manager advised that he needed to remove an hydraulic rock hammer from the site. Mr Sullivan said that access to the site was blocked and terminated the conversation.

57    At 4:30 pm further discussions were held between representatives of Fulton Hogan and the CFMEU at the CFMEU’s Carlton office. In the course of the meeting Mr Edwards said words to the effect: “I am here to do a deal because I know our organisation is in contempt of court in relation to the picket at the site. I understand it is going to be expensive but our fighting fund will have to fix it.” An in principle agreement was reached whereby the CFMEU would accept the proposal, made by Fulton Hogan on the previous day, subject to approval by the branch executive at a meeting the following morning.

58    In the course of the day three vehicles which were registered to the CFMEU were, at various times, parked within 30 metres of the main entrance to the site.

28 May 2010

59    CFMEU organisers were again present at the site from early in the morning.

60    At about 10:00 am Mr Edwards advised Fulton Hogan that the CFMEU had agreed to accept Fulton Hogan’s proposal to negotiate a new agreement. Mr Edwards said that the blockade would be lifted by close of business that day.

61    At about 1:38 pm Mr Edwards attended the site and spoke to those present. Immediately afterwards the persons to whom he spoke started to pack up and eventually left the site. All had departed by about 2:10 pm.

62    Left behind was the pile of crushed rock, three 44 gallon drums (one of which still had wood burning in it), two temporary fence panels, a bin full of rubbish, pallets and a pile of wood. This debris was removed by employees of Bovis and Fulton Hogan.

63    For the first time, since 18 May 2010, Bovis, Fulton Hogan and their sub-contractors were able to enter the site and perform work.

PENALTY

64    The parties are agreed (and I accept) that the events at the market site between 19 and 28 May 2010 should be treated as a single course of conduct: see: Construction, Forestry, Mining and Energy Union v Cahill (2010) 194 IR 461.

65    The parties are also agreed (and I also accept) that although the CFMEU contravened both ss 38 and 44 of the BCII Act in its implementation of the blockade there is a substantial overlap between the elements which must be established to make good allegations that these two provisions have been contravened.

66    The parties jointly propose that the Court should impose a single monetary penalty of $100,000 in respect of the two admitted contraventions.

The Court’s approach

67    The approach of the Court to proposals of this kind is now well established. It was propounded by the Full Court in Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 and was summarised by Kenny J in White v Construction, Forestry, Mining and Energy Union [2011] FCA 192 at [5] as follows:

“(a)    it is the responsibility of the Court to determine the appropriate penalty;

(b)    determining the amount of penalty is not an exact science;

(c)    within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another;

(d)    there is public interest in promoting settlement of litigation, particularly where it is likely to be lengthy;

(e)    the view of the regulator, as a specialist body, is a relevant, but not determinative, consideration;

(f)    in determining whether the proposed penalty is appropriate, the Court examines all of the circumstances of the case; and

(g)    where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure, in the Court’s view, is appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if it is within the permissible range.”

68    A penalty will be within the permissible range if it is neither manifestly inadequate nor manifestly excessive: see Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at [129] (per Jessup J).

69    In Kelly v Fitzpatrick (2007) 166 IR 14 I identified a non-exhaustive range of considerations which are of potential relevance in determining a penalty for contraventions of civil penalty provisions of Chapters 5 and 6 of the BCII Act. These considerations were derived from a number of decisions of the Court under other legislation. They have been found to be relevant to the fixing of penalties under the BCII Act: see Stuart v Construction, Forestry, Mining and Energy Union (2010) 185 FCR 308 at 331-2 (per Besanko and Gordon JJ). These considerations are not, of course, to be applied rigidly regardless of the circumstances of a particular case. They may, however, provide helpful guidance. In the end, however, it is the responsibility of the Court “to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations”: Construction, Forestry, Mining and Energy Union v Williams (2009) 262 ALR 417 at [29], citing with approval Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at [91] (per Buchanan J).

70    The following factors, in my view, have relevance in the circumstances of the present proceeding:

    The nature and extent of the conduct which led to the breaches.

    The circumstances in which that relevant conduct took place.

    The nature and extent of any loss or damage sustained as a result of the breaches.

    Whether there had been similar previous conduct by the respondent.

    Whether or not the breaches were deliberate.

    Whether the respondent had exhibited contrition.

    Whether the respondent had taken corrective action.

    Whether the respondent had co-operated with the enforcement authority.

    The need for specific and general deterrence.

The nature and extent of the conduct

71    The blockade meant that no work was performed at the market site between 19 and 28 May 2010. It involved the positioning of a number of obstacles across the main entrance to the site. These obstacles prevented vehicles and equipment entering or leaving the site. Workers approaching the site were advised that no work was available and that they should go home. Only administrative staff were permitted to enter the site.

72    The CFMEU devoted considerable resources to the establishment and maintenance of the blockade. Many organisers were diverted from their normal duties in order to strengthen the union’s presence at the blockade. Union vehicles were used to prevent access to the site.

Circumstances to which the conduct took place

73    The CFMEU imposed the blockade when it became aware that Fulton Hogan had negotiated the greenfields agreement with the AWU. The CFMEU regarded these arrangements as being “provocative” because, had the greenfields agreement not been entered into, an extant agreement which it had with Fulton Hogan’s predecessor would have applied to Fulton Hogan’s employees at the site. The CFMEU also suspected that, at the time at which Fair Work Australia approved the greenfields agreement, Fulton Hogan already had at least one employee working at the market site. If this were the case and had Fair Work Australian been made aware of it, the greenfields agreement would not have been approved.

74    The CFMEU determined on parallel courses of action. It lodged an appeal against the decision to approve the greenfields agreement. Simultaneously it initiated contact with Fulton Hogan with a view to persuading the company to enter into a fresh agreement covering its employees at the site. In neither endeavour was it successful: it abandoned its appeal to the full bench of Fair Work Australia on the day fixed for the hearing of the appeal; and Fulton Hogan did not respond positively or at all to the CFMEU’s overtures about a new agreement. Five days after abandoning its appeal the CFMEU sought to achieve its objective by preventing work continuing at the site.

75    Fulton Hogan had a lawful right to initiate negotiations for an agreement with the AWU. If the statutory pre-requisites for the making of a greenfields agreement were satisfied (as Fair Work Australia accepted) Fulton Hogan was entitled to enter into the greenfields agreement with the AWU. The fact that it took these steps without notice to the CFMEU, whose interests would be prejudicially affected by the arrangement, was bound to cause resentment in a volatile industrial relations environment. This resentment was, no doubt, compounded by the CFMEU’s suspicion that Fair Work Australia had been misled in the course of the application for approval of the agreement and the unwillingness of Fulton Hogan to enter into negotiations with it for a new agreement. None of these matters, however, provided justification for the CFMEU’s conduct at the site between 19 and 28 May 2010. The blockade was imposed in preference to alternative, lawful, responses such as the prosecution of the appeal to Fair Work Australia against the approval of the greenfields agreement or resort to other dispute resolution mechanisms which did not involve cessation of work at the site.

76    The conduct of parties who are involved in industrial disputes is sometimes branded as “provocative”. This expression is generally understood to mean that the actor has done something which is intended or likely to incite a reaction by the other party. This begs the question “what reaction?”. The reaction might be either lawful or unlawful. Where, in cases such as the present, unlawful action is embarked on when a lawful response is available, the offering of the provocation will not weigh heavily as an extenuating circumstance.

77    The CFMEU relied on the decision of the Victorian Court of Appeal in Pearce v R (1983) 9 A Crim R 146. In that case the applicant’s sentence for malicious wounding with a shotgun was held to be manifestly excessive and was reduced because of what was considered by the Court to be “a highly significant extenuating circumstance.” That circumstance was that the accused was an Aboriginal man who had suddenly and most offensively been told to leave a party by persons who had no authority to do so and who wanted the Aboriginal man and his companions to leave simply because they were Aboriginals. It may be doubted that conduct of the kind which induced the applicant in Pearce to act as he did can be equated with the type of conduct normally involved in the interaction between participants in the industrial relations arena. It is sufficient for present purposes to note that the conduct which was found, in Pearce, to have provided extenuating circumstances warranting a reduction in sentence, bore no resemblance to the conduct of Fulton Hogan which was relied on in the present proceeding.

78    Although the blockade was directed against Fulton Hogan its impact was felt far more widely. Bovis staff were impeded in their movements. Productive work by sub-contractors engaged by Fulton Hogan was prevented. Some of those sub-contractors had equipment on the site which they were prevented from deploying elsewhere.

The nature and extent of loss or damage

79    At the time at which the blockade occurred the development of the new market was at an early stage. The project is not scheduled for completion until 2012. The disruption caused by the blockade may or may not ultimately cause loss to Bovis. It is sufficient, for present purposes, to record that neither Bovis nor Fulton Hogan sought to suggest that the interruption of work at the site had caused it economic loss.

80    The same cannot be said for Fulton Hogan’s sub-contractors. It was agreed that they had suffered losses as follows:

    W & K Fitchett Pty Ltd: $4,405.40.

    Emerald Earthmoving Pty Ltd: $8,650.17.

    Egans Group Pty Ltd: $79,532.72.

    Timco Earthworks Pty Ltd: $12,957.05.

    H20 Hydration & Rayne Man: $4,454.65.

    Trenching Systems Australia Pty Ltd: $10,000.

81    These losses totalled $120,000. The CFMEU has agreed to compensate each of these sub-contractors for the losses which they sustained.

Similar previous conduct

82    The CFMEU has a long and unfortunate history of similar misconduct. A table disclosing some 39 cases in which the union has been found to have contravened the BCII Act and other legislative provisions proscribing coercion in the years since 1999 was provided to the Court.

83    Whilst acknowledging the accuracy of the table the CFMEU drew attention to certain observations of Kenny J in Cahill v Construction, Forestry, Mining and Energy Union (No 4) (2009) 189 IR 304 at 320 [69]. Having examined a similar table her Honour said:

“In summary, the history referred to above shows that the Union, through its representatives at various levels around the country, has a history of engaging in coercive conduct relatively similar to the kind in question in this case. I would not, however, accord equal weight to all parts of this history, especially having regard to the fact that not all elements of this history are to be treated as prior contraventions and many elements relate to events outside Victoria and also at a level that might be thought more indicative of local and national concern. Further, as the respondents submitted, it must be borne in mind that, from 1999 to date, the Union, whether or not considered from the relevant divisional perspective, had a considerable spread of activities – from large to small – all over the country.”

See also Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union (2006) 164 IR 375 at 389-390 [67].

84    Notwithstanding the fact that the CFMEU is a large national organisation which is divided into a series of divisions and branches, it is notable that the branch involved in the present contraventions has caused the organisation to incur an overwhelmingly disproportionate amount in pecuniary penalties when compared with the other constituent elements of the organisation. The BCII Act commenced operation in 2005. Since then the CFMEU and its officials have been found, in 28 cases, to be liable for contraventions of that Act. Of these, 22 cases have involved the Victorian branch of the Construction and General Division of the union (“the branch”). Pecuniary penalties totalling $2,711,150 have been imposed on the CFMEU under the BCII Act. Of this sum $2,328,550 has been attributable to the unlawful activities of the branch. It is inconceivable that the national governing councils of the CFMEU were and are unaware of the significant misconduct of the branch and the detrimental consequences for its members. They are either unable or unwilling to curb the unlawful activities of the branch. Moreover, an earlier offence of the CFMEU is no less an offence by that corporate body because it was committed by a division or branch other than the one responsible for the contravention presently under consideration. As Jessup J observed in Williams v Construction, Forestry, Mining and Energy Union (No 2) [2009] FCA 548 at [20], “the deterrent effect of a penalty would be significantly compromised if the court were obliged to turn a blind eye to a prior contravention merely because it occurred in a different division or branch of an organisation.” The CFMEU’s deplorable record of contraventions of the BCII Act must rank as a significant consideration when fixing a penalty in the present proceedings.

Whether or not the breaches were deliberate

85    There can be no doubt that the CFMEU’s conduct was calculated and deliberate. The imposition of the blockade was intended to coerce Fulton Hogan into entering into an agreement with it – an objective in which it was ultimately successful.

Contrition

86    There was no material before the Court to suggest that the CFMEU was in any way contrite. The end was considered to justify the means which it employed.

Corrective action

87    The CFMEU has agreed to compensate Fulton Hogan’s sub-contractors for losses incurred by them as a result of the blockade.

Co-operation with enforcement authorities

88    The CFMEU has co-operated with the Australian Building and Construction Commission in the preparation of an agreed statement of facts and by participating in negotiations which have led to the quantification of the proposed penalty. As a result the cost and expense of a contested hearing have been avoided.

Deterrence

89    The principal object of the BCII Act is “to provide an improved workplace relations framework for building work to ensure that building work is carried out fairly, efficiently and productively for the benefit of all building industry participants and for the benefit of the Australian economy as a whole”: see s 3(1). The BCII Act aims to achieve this object through various means, including, relevantly:

    Promoting respect for the rule of law (s 3(2)(b));

    Ensuring respect for the rights of building industry participants (s 3(2)(c)); and

    Ensuring that building industry participants are accountable for their unlawful conduct (s 3(2)(d)).

90    In order to secure these objectives it is necessary that contraventions of the BCII Act should be visited with penalties which will serve to deter others from similar misconduct. Penalties must be imposed at a meaningful level if they are to serve as a general deterrent to others who may be disposed to engage in proscribed conduct: see, for example, Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd (No 2) [2007] FCA 11 at [66]; Finance Sector Union of Australia v Commonwealth Bank of Australia (2005) 147 IR 462 at [41].

91    There is also a need for any penalty to have a specific deterrent effect on the CFMEU. It has, as I have already outlined, a deplorable record of contraventions of the BCII Act and similar legislation. The union has not displayed any contrition or remorse for its conduct. The contraventions are significant. Substantial penalties for past misconduct have not served to prevent repetition. Comments such as “[t]he last time it cost us a shit load of money” and “it is going to be expensive but our fighting fund will have to fix it” evidence an attitude on the part of branch officials that the risk of the imposition of significant pecuniary penalties will not be allowed to act as a constraint on unlawful activity which they consider to be warranted.

Additional considerations

92    The maximum pecuniary penalty available for each contravention is $110,000. Were it not for the substantial overlap between the various elements of the provisions of ss 38 and 44 of the BCII Act (as to which compare White v Construction, Forestry, Mining and Energy Union (2010) 198 IR 470 at [4]), I would have regarded the proposed penalty of $100,000 for both contraventions as being manifestly inadequate. When that overlap is brought into account together with the other mitigating factors to which I have referred, I have come to the view that the proposed penalty is within the permissible range.

93    A pecuniary penalty of $100,000 will be imposed. The additional relief sought by the Applicant will also be granted.

Associate:

Dated:    2 June 2011