FEDERAL COURT OF AUSTRALIA

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2011] FCA 1518

THE COURT DECLARES THAT:

1.     On 15 January 2009, the second respondent (McDonald) contravened s 38 of the Building and Construction Industry Improvement Act 2005 (Cth) (BCII Act) by imposing a ban on a concrete pour that was scheduled to occur on 16 January 2009 at the Probuild Constructions (Aust) Pty Ltd (Probuild) construction at 140 Williams Street, Perth (Project).

2.    Pursuant to s 69(1)(b) of the BCII Act, the CFMEU contravened s 38 of the BCII Act on 15 January 2009 by the reason of McDonald’s conduct described in order 1 above.

3.    On 2 February 2009, McDonald contravened s 38 of the BCII Act by effecting a ban on the carrying out of work in connection with the scheduled erection of a gantry at the Project that night.

4.    Pursuant to s 69(1)(b) of the BCII Act, the CFMEU contravened s 38 of the BCII Act on 2 February 2009 by reason of McDonald’s conduct described in order 3 above.

5.    On 3 February 2009, McDonald contravened s 44(1) of the BCII Act by applying undue pressure on Ridgebay Holdings Pty Ltd to make a building agreement with CFMEU.

6.    Pursuant to s 69(1)(b) of the BCII Act, the CFMEU contravened s 44(1) of the BCII Act on 2 February 2009 by reason of McDonald’s conduct described in order 5 above.

7.    On 24 June 2009, McDonald encouraged workers at a meeting on the Project not to resume work as a result of inclement weather, following which they did not, and McDonald was thereby involved in unlawful industrial action in contravention of s 38 of the BCII Act.

8.    Pursuant to s 69(1)(b) of the BCII Act, the CFMEU contravened s 38 of the BCII Act on 24 June 2009 by reason of McDonald’s conduct described in order 7 above.

9.    On 20 August 2009, McDonald told workers on the Project at a meeting that they should not resume work in response to an amenities problem, following which they did not, and McDonald was thereby involved in unlawful industrial action in contravention of s 38 of the BCII Act.

10.    Pursuant to s 69(1)(b) of the BCII Act, the CFMEU contravened s 38 of the BCII Act on 20 August 2009 by reason of McDonald’s conduct described in order 9 above.

THE COURT ORDERS THAT:

11.    Pursuant to s 49(1)(a) of the BCII Act, the CFMEU shall pay the following pecuniary penalties within 30 days of this order:

(a)    $22,000 by reason of the contravention of s 38 of the BCII Act described in order 2 above.

(b)    $27,500 by reason of contravention of s 38 of the BCII Act described in order 4 above.

(c)    $38,500 by reason of the contravention of s 44(1) of the BCII Act described in order 6 above.

(d)    $49,500 by reason of the contravention of s 38 of the BCII Act described in order 8 above.

(e)    $55,000 by reason of the contravention of s 38 of the BCII Act described in order 10 above.

12.    Pursuant to s 49(1)(a) of the BCII Act, McDonald shall pay the following pecuniary penalties within 30 days of this order:

(a)    $4,400 by reason of the contravention of s 38 of the BCII Act described in order 1 above.

(b)    $5,500 by reason of the contravention of s 38 of the BCII Act described in order 3 above.

(c)    $7,700 by reason of the contravention of s 44(1) of the BCII Act described in order 5 above.

(d)    $9,900 by reason of the contravention of s 38 of the BCII Act described in order 7 above.

(e)    $11,000 by reason of the contravention of s 38 of the BCII Act described in order 9 above.

13.    Pursuant to s 49(5) of the BCII Act, the pecuniary penalties referred to in orders 11 and 12 above be paid to the Commonwealth.

14.    The CFMEU shall pay costs of the Applicant in the amount of $19,000 within 30 days of this order.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011

REASONS FOR JUDGMENT

A QUESTION OF PENALTY – agreement as to penalty

1    The applicant sought orders imposing pecuniary penalties on the first respondent, the Construction, Forestry, Mining and Energy Union (CFMEU), and the second respondent, Joseph McDonald, for contraventions of s 38 and s 44(1) of the Building and Construction Industry Improvement Act 2005 (Cth) (BCII Act).

2    The parties reached an agreement on liability as well as on the proposed penalties which they considered within a range of penalties appropriate for each of the admitted contraventions of the BCII Act, acknowledging that their agreement was subject to the Court’s approval.

3    In the applicant’s written submissions on penalty filed 21 November 2011 at [1] the applicant contended that the respondents admitted having contravened s 38 of the BCII Act on four occasions by being involved in unlawful industrial action at the Probuild Constructions (Aust) Pty Ltd (Probuild) building site at 140 William Street, Perth on:

    16 January 2009 (Concrete Pour Ban);

    2 February 2009 (Gantry Ban);

    24 June 2009 (Rain Stoppage); and

    20-21 August 2009 (Amenities Strike).

4    Further, the applicant noted that the respondents admitted having contravened s 44(1) of the BCII Act, by engaging in conduct on 2 February 2009 with intent to coerce or apply undue pressure on Ridgebay Holdings Pty Ltd (Ridgebay) to agree to make an enterprise bargaining agreement (the Coercion).

5    The respondents accepted and adopted the applicant’s submissions in this regard: see the respondents’ submissions on penalty filed 2 December 2011 at [2].

6    Sections 38 and 44(1) of the BCII Act are both Grade A civil penalty provisions. In accordance with s 49(2) of the BCII Act, the maximum penalty is 1,000 penalty units for a body corporate and 200 penalty units for an individual. A “penalty unit” is $110: s 4AA(1) of the Crimes Act 1914 (Cth). Accordingly, the maximum penalty for each contravention of s 38 and s 44(1) of the BCII Act is:

    for a body corporate, such as the first respondent (CFMEU), $110,000; and

    for individuals, such as the second respondent (Mr McDonald), $22,000.

7    The parties agreed to the imposition of the following pecuniary penalties, subject to the Court’s approval, in relation to the CFMEU:

    $22,000 (20% of a worst case) for the Concrete Pour Ban;

    $27,500 (25% of a worst case) for the Gantry Ban;

    $38,500 (35% of a worst case) for the Coercion;

    $49,500 (45% of a worst case) for the Rain Stoppage; and

    $55,000 (50% of a worst case) for the Amenities Strike.

8    The parties agreed to the imposition of the following pecuniary penalties in relation to Mr McDonald, also subject to the Court’s approval:

    $4,400 (20% of a worst case) for the Concrete Pour Ban;

    $5,500 (25% of a worst case) for the Gantry Ban;

    $7,700 (35% of a worst case) for Coercion;

    $9,900 (45% of a worst case) for the Rain Stoppage; and

    $11,000 (50% of a worst case) for the Amenities Strike.

9    The parties also agreed that it is appropriate for first respondent to pay the costs of the applicant in the sum of $19,000.

orders made

10    On 12 December 2011 the matter was listed for a hearing on penalty at the conclusion of which the Court accepted the proposed penalties as appropriate.

11    These are the written reasons for making the declarations and granting the orders as agreed by the parties.

assessment of penalty – general principles

12    The parties agree generally on the principles to be applied in determining penalty, except for a few points on which I will elaborate below.

13    The applicant cited in its written submissions the authority of Attorney-General (SA) v Tichy (1982) 30 SASR 84 at 92-93 to support the proposition that the overriding principle in imposing penalty is to ensure the penalty is proportionate to the gravity of the contravening conduct. The respondents submitted that this authority is of limited assistance as it contains criminal principles of penalty and an action to recover a pecuniary penalty is a civil, not criminal, proceeding. The respondents nonetheless accept the applicant’s submission that the purposes to be served by the imposition of penalties in a case such as the present are threefold:

    punishment, which must be proportionate to the offence and in accordance with prevailing standards;

    deterrence, both personal (assessing the risk of re-offending) and general (a deterrent to others who might be likely to offend); and

    rehabilitation.

See Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543 (Caelli) at [93]-[94] per Lander J.

14    The parties agreed the approach of the Court in determining penalty to be one of ‘instinctive synthesis’: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560 (Australian Ophthalmic Supplies), Gray J at [27] and Graham J [55]. Such a process requires that a court take into account all relevant factors and to arrive at a single result which takes due account of them all: see Wong v The Queen [2001] HCA 64; (2001) 207 CLR 584 at [74]-[76]; Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 (Markarian), Gleeson CJ, Gummow, Hayne and Callinan JJ at [37]-[39]. Proportionality and consistency commonly operate as a final check on the penalty assessed: Australian Ophthalmic Supplies at [54].

15    The respondents adopted the approach suggested in my earlier decision in Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) (2010) 199 IR 373 at [7], which essentially mirrors the above principles, except to add that the penalty must not be so great as to crush the person upon whom the penalty is imposed, or reveal the person as a scapegoat: Caelli at [93]; McDonald v R (1994) 48 FCR 555 (McDonald) at 563 and, that the maximum penalty is reserved for only the most serious of contraventions: Markarian at [31].

16    The parties also acknowledges that courts now regard far more seriously any contravention of industrial laws than has generally been the case in the past: see Finance Sector Union of Australia v Commonwealth Bank of Australia [2005] FCA 1847; (2005) 224 ALR 467 at [72] per Merkel J and there are a number of cases referring to this observation, including Plancor Pty Ltd v LHMU (2008) 171 FCR 357 at [62].

17    The parties agree, and I accept, that the principles applicable where the parties are agreed on penalties are as follows:

    it is the responsibility of the Court to determine the appropriate penalty;

    determining the amount of penalty is not an exact science. Within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another;

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

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

    in determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward agreed facts, the court may act on that statement if it is appropriate to do so; and

    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.

See Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at [47]-[60], and for examples of the principles applied in an industrial context, Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union [2006] WASC 317 (Leighton) at [53]-[56] per Le Miere J; Williams v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2010] FCA 754 at [158] per Jessup J.

18    The respondents also contend, which I accept, that regard should be had to Jessup J’s approach in Wotherspoon v Construction, Forestry, Mining and Energy Union [2010] FCA 111 at [8] and [27] as follows:

[8]     The authorities make it clear that, notwithstanding the agreement of the parties to a particular proceeding, the determination of the correct penalty is a matter for the court. The court is not obliged to accept the parties’ agreement; nor is it entitled to take the easy course of doing so without deliberation. However, the authorities also show that, where the parties have agreed on a penalty, the court should give weight to that agreement, and should generally give effect to it so long as the agreed penalty falls within the appropriate range, that is, so long as it may be described as neither manifestly inadequate nor manifestly excessive…

…

[27]     The touchstone by reference to which to approach the question whether the penalties agreed in the present case are either manifestly inadequate or manifestly excessive is that the penalties should pay ‘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.’: Australian Ophthalmic Supplies Pty Ltd v McAlary Smith (2008) 165 FCR 560, 580 [91]: Construction, Forestry, Mining and Energy Union v Williams (2009) 262 ALR 417, 428. Although it is not the function of the court to substitute its own preferred penalties for those agreed by the parties, it is necessary for the court to come at least to a general view about the seriousness of the conduct involved in the admitted contraventions of s 38 of the BCII Act.

particular FACTORS RELEVANT TO PENALTY

19    The parties acknowledge that although courts exercising industrial jurisdiction have indentified a range of factors which may or may not be relevant to the circumstances of a particular case when assessing the appropriate penalty, the courts have warned against the use of checklists because they give rise to the risk of transforming the process of instinctive synthesis into the application of a rigid catalogue of matters for attention. In this regard, the task of the court is to ultimately 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 obligation: see Australian Ophthalmic Supplies at [89]-[91] per Buchanan J.

20    With this warning in mind, the parties identify the following considerations relevant to the assessment of penalty for a contravention of the BCII Act, by reference to the authorities:

    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 any similar previous conduct by the respondent;

    whether the breaches were properly distinct or arose out of the one course of conduct;

    the size of the business enterprise involved;

    whether or not the breaches were deliberate;

    whether senior management was involved in the breaches;

    whether the party committing the breach had exhibited contrition;

    whether the party committing the breach had taken corrective action;

    whether the party committing the breach had cooperated with the enforcement authorities; and

    the need for specific and general deterrence.

21    This range of factors which are relevant to penalty should not restrict other matters which the Court may take into account: Fair Work Ombudsman v Kentwood Industries Pty Ltd (No 3) [2011] FCA 579 at [21].

22    The courts also warn against comparing the case the subject of the assessment with any other particular case so as to derive from it the amount of penalty to be fixed: NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 141 ALR 640; (1996) 71 FCR 285 at 295.

23    The parties agree, and I accept, that the objects of the legislation will be relevant when determining penalty. In this regard, s 3(1) of the BCII Act provides that the main 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 Woodside Burrup Pty Ltd v Construction, Forestry, Mining and Energy Union [2011] FCA 949 at [21]-[22] per Gilmour J.

24    The BCII Act aims to achieve that object by the means set out in s 3(2) of the BCII Act, which includes promoting respect for the rule of law and ensuring that building industry participants are accountable for their unlawful conduct.

NATURE AND EXTENT OF THE RELEVANT CONDUCT AND THE CIRCUMSTANCES IN WHICH IT OCCURRED

25    In its written submissions on penalty, the applicant outlined at [21]-[38] the four contraventions of the BCII Act which they say were committed by the respondents. I note that the respondents referred to and relied upon the statement of agreed facts as the proper recitation of the facts in this matter.

Concrete Pour Ban (16 January 2009)

26    The applicant contends that on 15 January 2009, the construction employees performed work in connection with a concrete pour scheduled to take place on 16 January 2009. Weather bureau authorities predicted that temperatures in Perth would reach 41° celsius on 16 January and accordingly, Probuild developed a procedure in consultation with occupational health and safety representatives of the employees who would be involved in the concrete pour to take account of the weather forecast.

27    Mr McDonald called a meeting of about 130 employees on 15 January at approximately 1:00 pm and addressed the meeting on the subject of the concrete pour. At this meeting, Mr McDonald said to those attending, or words to the effect of: “fuck this, you are not pouring concrete tomorrow. We are not pouring concrete when it is going to be 40 degrees”.

28    As a result of Mr McDonald’s conduct, a ban on the concrete pour was imposed by the employees and Mr McDonald. The concrete pour did not proceed on 16 January 2009, and accordingly had to be rescheduled for another day.

29    In aiding, abetting, counselling and procuring the Concrete Pour Ban, Mr McDonald contravened s 38 of the BCII Act by engaging in building industrial action: see s 48(2).

30    By reason of the conduct of Mr McDonald, the CFMEU is taken to have contravened s 38 of the BCII Act: s 69(1)(b).

Gantry Ban (2 February 2009)

31    In the evening of 2 February 2009 the erection of a gantry over the Wellington Street heritage façade of the construction project was scheduled by Probuild to take place, and for this purpose, Probuild obtained a road closure permit and scheduled a special night shift.

32    For the purposes of the gantry erection, various employees attended at the Probuild Site, including riggers employed by Ridgebay, and several persons employed by a labour hire company, whose function was to manage traffic.

33    Before work could commence, Mr McDonald entered the Probuild Site and at some time before 8:00 pm, entered the office where the riggers were undergoing induction and informed the Probuild management and the riggers that the induction process should stop. Mr McDonald then told the Probuild management that he would not allow the employees to work that night because of a number of issues, one of which being that the employer did not have a current enterprise bargaining agreement (EBA).

34    At approximately 8:00 pm, Mr McDonald spoke to the riggers and said they had to stick together and they should go.

35    Mr McDonald then spoke to the State Manager of Probuild, and stated that the EBA issue was very important and that it had to be sorted out before the gantry erection commenced.

36    At about 9:30 pm, Mr McDonald told a management representative of Ridgebay by telephone that Ridgebay could not perform work on a city block without an EBA, that no work would be done on the job that night and that the representative should be making his way to the Probuild Site to sign an EBA.

37     As a result of the delays caused by the above discussions between Mr McDonald and Probuild, and between Mr McDonald and Ridgebay, the gantry erection was not performed on its scheduled time and date.

38    Mr McDonald’s conduct in respect of the EBA issue had the intent to apply undue pressure on Cape to agree to make a building agreement in contravention of s 44(1) of the BCII Act. By affecting a ban on the carrying out of work in connection with the gantry erection, Mr McDonald was also in contravention of s 38 of the BCII Act.

39    By reason of the conduct of Mr McDonald in contravention of s 44(1) and s 38 of the BCII Act, the CFMEU is taken to have also contravened these sections: s 69(1)(b).

Rain Stoppage (24 June 2009)

40    On 24 June 2009, the Probuild Site was subject to intermittent rain and to high wind.

41    At about 9:00 am, Probuild determined that by reason of the weather conditions a concrete pour taking place on level 11 of the multi level building under construction on the Probuild Site would be suspended and all employees working on the Probuild Site on that day would perform work in covered areas below level 8.

42    At about 10:00 am, Mr McDonald entered the Probuild Site in his capacity as an official of the CFMEU, and shortly afterwards, informed Probuild management of a position that he had in regard to work on the Probuild Site, which was that the Probuild Site was “inclement” as a whole, the employees on the site should be going home and that he intended to put that position to the employees at a meeting.

43    At about 10:15 am, Mr McDonald convened and addressed a meeting of employees who were members or eligible to be members of the CFMEU on the Probuild Site, and encouraged those present not to resume work.

44    Shortly after that meeting the employees left the site without resuming work and Mr McDonald informed the representatives of Probuild that the employees had held a vote and decided to go home and that the CFMEU’s members considered the Probuild Site was inclement.

45    In aiding, abetting, counselling and procuring the Rain Stoppage, Mr McDonald, for the purposes of s 48(2) of the BCII Act, contravened s 38 of the BCII Act himself.

46    By reason of the operation of s 69(1)(b) of the BCII Act, the CFMEU also contravened s 38.

Amenities Strike (20-21 August 2009)

47    On 20 August 2009, before 8:30 am, because a PVC pipe was broken, certain toilet amenities situated at ground level ceased functioning properly and an area adjacent to those toilet amenities was subjected to leakage from the broken pipe.

48    Probuild arranged to repair the broken pipe, for clearing and disinfecting the toilet amenities and for the remediation of the area affected by the leakage. At all times there were toilet amenities available elsewhere on the Probuild Site, although the respondents raise a question about the adequacy of these amenities.

49    At about 10:00 am, a meeting of the majority of the construction employees working on the site was held. Shortly before the meeting commenced, Mr McDonald told Probuild management words to the effect of “there are no amenities on the Site”, “there should not be any labour on the Site” and “this should not be happening”.

50    Mr McDonald addressed the meeting and told those attending that they should not resume work and a majority of those present indicated they were in favour of not resuming work.

51    At or around 10:15 am, most of the construction employees left the site and did not return to work that day.

52    On 21 August 2009, the next day, the majority of employees rostered to work at the Probuild Site failed to attend for work. Mr McDonald was present on the Probuild Site, and told those who had attended for work that they should not be there and should cease work.

53    By aiding, abetting, counselling and procuring the Amenities Strike, Mr McDonald contravened s 38 of the BCII Act: s 48(2).

54    By reason of the operation of s 69(1)(b) of the BCII Act, as a result of Mr McDonald’s conduct, the CFMEU also contravened s 38.

55    The parties agree that the respondents’ four contraventions of s 38 of the BCII Act above each constituted “building industrial action” within the meaning of that term in s 36(1), and that none of the above contraventions fall within the exception in s 36(1)(g) of the definition of “building industrial action”.

56    The parties also agree that the respondents’ contraventions of s 38 were each “industrially-motivated” for the purposes of s 36(1) of the BCII Act.

57    The nature and extent of the above contravening conduct, and the circumstances in which it took place, is a factor about which the parties appear to have diverging views in many respects. The applicant contends that the assessment of the gravity of the conduct should have regard to the following:

    The prominent role of the CFMEU as an industrial association in the building and construction industry. The respondents contend that the fact that the CFMEU is an industrial association should not increase or decrease the level of penalty for a breach of the BCII Act.

    The senior role that Mr McDonald holds in the CFMEU, namely, as Assistant Secretary of the Western Australian Divisional Branch of its Construction and General Division, to which the respondents submitted that the relevant seniority of that position must be viewed as what it is – the Assistant Secretary of a Branch of a Division of the CFMEU.

    The respondents’ repeated unlawful conduct at the Probuild Site over a prolonged period from 16 January 2009 to 21 August 2009. The respondents contend that there is no evidence that the particular conduct giving rise to the contraventions was connected, save that they occurred on the same site and that the events of 2 February 2009 give rise to a contravention of both s 38 and s 44(1) of the BCII Act.

    The respondents’ advancement of their industrial aims in an unlawful fashion – particularly, their desire for building contractors to have EBAs with the CFMEU, as demonstrated by the Coercion. The respondents contend that that issue of the desire of the CFMEU to have EBAs relates to the events of 2 February 2009 in relation to one building contractor.

    The strong directive of Mr McDonald that caused the Concrete Pour Ban in circumstances where Probuild had organised safe working conditions for the pour to take place. The respondents contend that the Concrete Pour Ban occurred in circumstances where the temperature was forecast to reach 41 degrees and that Probuild had drafted a procedure for carrying out the Concrete Pour that took account of the weather forecast in consultation with occupations health and safety representatives and where the construction employees moved a motion and voted for the Concrete Pour Ban. The respondents refer to the statement of agreed facts filed 10 November 2011 at [11(c)], [12], [13] and [18] in this regard.

    The strong directive of Mr McDonald that caused the Gantry Ban in circumstances where Probuild had organised special working conditions.

    The strong directive of Mr McDonald that caused the Rain Stoppage in circumstances where Probuild had arranged for work to take place in safe areas. The respondents referred to [54]-[55], [57] and [60] of the statement of agreed facts, which they say is to the effect that Probuild determined that “all Construction Employees working on the Site on that day would perform work in covered areas below level 8” and further that Mr McDonald considered the whole Site was “inclement” and that the Rain Stoppage occurred in circumstances where the Site was subject to intermittent rain and high wind and where the construction employees had held a vote and decided to go home and that the first respondent’s members considered the Site was inclement.

    The strong directive of Mr McDonald that caused the Amenities Strike, particularly in circumstances where at all times, adequate amenities was available for use and Probuild had arranged for rectification works to be performed. The respondents contend that the Amenities Strike occurred in circumstances where there was a broken toilet pipe leaking adjacent to toilet amenities, that Mr McDonald considered there was an immediate risk to health and safety, that the construction employees had resolved to cease work, and to the extent that it is agreed fact that there were toilet amenities available to employees elsewhere on the site, this does not address their adequacy.

    The fact that the respondents’ conduct in all instances was deliberate and in complete disregard of the BCII Act for which they have had a history of contravening in the past. The respondents say that the evidence supports a conclusion that the conduct giving rise to the contraventions was reactive rather than premeditated.

    The impact that the respondents’ unlawful conduct had, not only on the operations of Probuild, but also on the sub-contractors concerned. The respondents contend that the Concrete Pour Ban resulted in the rescheduling of a concrete pour rather than any stoppage of work, that the Gantry Erection Ban caused a stoppage of work between 8:00 pm and 11:15 pm on 2 February 2009 and that at approximately 11:15 pm Mr McDonald effectively ceased any action preventing the gantry erection proceeding, but it was cancelled by Probuild, and that the Rain Stoppage caused a stoppage of work for part of one day and caused Probuild to re-schedule work. Further, that the Amenities Strike resulted in a stoppage of work by a majority of employees from approximately 10:15 am on Thursday 20 August 2009 and Friday 21 August 2011.

    The need for general deterrence. The respondents contend further that the need for general deterrence is not a factor in assessing the gravity of the relevant conduct, but rather a factor in determining appropriate penalty by reference to relevant conduct.

    The need for specific deterrence, particularly in circumstances where the respondents are repeat contraveners of the BCII Act, to which the respondents repeat their submission above.

    The fact that the respondents have admitted liability, and in doing so, avoided the need for an otherwise costly trial. The respondents contend that liability was admitted at an early stage in these proceedings.

58    The respondents also add that the contraventions as a whole resulted in no more than 3 working days being lost on the Probuild Site in total over an 8 month period. Further, that the contraventions both separately and as a whole were limited in scope and effect in comparison with other cases involving similar breaches.

PRIOR RELEVANT CONTRAVENTIONS

59    The applicant contends that the agreed principles of prior relevant conduct to be taken into account in assessing penalty are summarised as follows, and referred to my previous decision in Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2010] FCA 977 (ABCC v CFMEU (No 2)) at [47]-[49]:

    Similar prior relevant conduct may be taken into account in assessing penalty, but it cannot be given such weight as to lead to the imposition of a penalty that is disproportionate to the gravity of the instant contravention: Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 (Veen), Mason CJ, Brennan, Dawson and Toohey JJ at 477.

    Similar previous conduct may demonstrate that a respondent has a history of engaging in the particular conduct in question, that the penalties previously imposed were insufficient to deter the respondent from re-engaging in that conduct and that the respondent has failed to take adequate steps to prevent further contraventions. Previous contraventions may demonstrate that the respondent has manifested in the commission of the latest contravention a continuing attitude of disobedience of the law. In such a case, “retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted”: Veen at 477.

    A sentencing court looks to the general record of the offender, his attitude to the law as disclosed by such conduct, apparent attempts at retribution and similar considerations. Repeated conduct of a particular kind may lead to an indentified need to provide some particularly persuasive form of deterrent against similar future conduct: Temple v Powell [2008] FCA 714; (2008) 169 FCR 169 (Temple v Powell) at [64] per Dowsett J.

    A respondent is not to be punished again for the prior conduct. Prior conduct may diminish leniency by reason of good character, having an upward affect on penalty, albeit within the proper limits indicated by the circumstances of the immediately contravening conduct: The Queen v McInerney (1986) 42 SASR 111 (McInerney) at 113 per King CJ.

    The effect of prior contravening conduct is more cogent if it has been the subject of conviction. If not, the prior conduct is still relevant but perhaps of less weight: McInerney, King CJ at 113 and Cox J at 124.

    Whether previous misconduct by branches in other states of a national organisation is relevant to fixing a penalty is a question of logic. In some cases, a pattern of conduct across the country may suggest a national culture of misconduct: Temple v Powell at [63].

    The quality of the conduct and its relevance to the industrial behaviour which the instant legislation seeks to address is determinative, not whether the prior conduct arose under different legislation or different provisions of the instant legislation: Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426; (2008) 177 IR 61 (Stuart-Mahoney) at [44]-[46].

    Prior relevant conduct includes that of officials from other branches of the union: Williams v Construction, Forestry, Mining and Energy Union (No 2) [2009] FCA 548 at [19]-[25] per Jessup J. However, in ABCC v CFMEU (No 2) at [48], I accepted that contraventions by other branches of the CFMEU, while relevant, are to be given less weight than contraventions within the branch in question.

60    The respondents accept that the above principles apply but contend the following principles should also be considered:

    Only conduct preceding that in question is taken into account in fixing penalties; and past conduct cannot operate so as to increase the penalty beyond that which would be appropriate: Temple v Powell at [62]-[63].

    Contraventions within a different branch of the Union are relevant, but are to be given less weight than contraventions within the branch in question: ABCC v CFMEU (No 2); Cahill v Construction, Forestry, Mining and Energy Union (No 4) [2009] FCA 1040 (Cahill) at [69] per Kenny J; Leighton at [67] per Le Miere J; cf Alfred v Construction, Forestry, Mining and Energy Union [2011] FCA 556 at [84].

    Although similar conduct which has been found to contravene other legislative provisions may have potential relevance, conduct which is of a different character does not assist the penalty assessment: Stuart-Mahoney at [44].

61    In the applicant’s written submissions on penalty, an attached Table A identifies the prior relevant conduct of the CFMEU to be taken into account, which includes matters in which the conduct occurred, and contraventions were judicially recorded, prior to the conduct the subject of this proceeding, as well as the matters in which the conduct occurred prior to the conduct the subject of this proceeding, but where contraventions were not judicially recorded until after that date. Items referred to at reference numbers 14, 15 and 45 of Table A identify the prior relevant conduct of Mr McDonald.

62    The first respondent accepts that some of the matters listed under the headings “Industrial Action Cases” and “Coercive Conduct” in Table A shows prior conduct of the first respondent, but notes:

    the “Industrial Action Cases” referred to in reference numbers 3, 5, 7, 11, 13, 20, 22, 29, 30, 31 and 33 do not involve the CFMEU;

    the “Coercive Conduct” cases referred to in reference numbers 62, 65, 72 and 81 do not involve the CFMEU;

    there is a significant “double up” of cases listed under each heading in Table A;

    a substantial number of the cases referred to under other headings do not involve the CFMEU;

    the West Australian Divisional Branch of the CFMEU is involved in only 5 of the 118 matters listed in Table A; and

    of the 5 matters listed involving the West Australian Divisional Branch of the CFMEU, one of the matters relates to a right of entry matter and is not related to s 38 or s 44 of the BCII Act or the equivalent sections under the Workplace Relations Act 1996.

63    The applicant contends that this table reveals that the CFMEU, through its representatives at various levels around the country, has a history of engaging in unlawful industrial action similar to the kind in question in this case. In reply the respondents say that the Court should only have regard to relevant cases referred to in Table A.

64    The applicant further states that the conduct in this case occurred between 15 January 2009 and 21 August 2009, against a backdrop of a large number of prior contraventions, which makes specific deterrence a very relevant consideration in this case. The extent of the relevant prior conduct is such as to give rise to a need for the Court to provide a particularly persuasive form of deterrence against similar future misconduct on the part of the CFMEU: Temple v Powell at [64]. Similarly, the Court should have regard to the need for rehabilitation in circumstances where penalties imposed in the past have seemingly failed to achieve this.

65    The respondents agree that specific deterrence will be a relevant consideration in this case, but say further that although similar prior relevant conduct may be taken into account in assessing penalty, it cannot be given such weight as to lead to the imposition of a penalty that is disproportionate to the gravity of the contravention: see Veen at 477. The second respondent also notes that there are significantly less relevant prior contraventions relating to him than the first respondent.

deliberate conduct

66    The parties agree that circumstances involving deliberate industrial strategy will weigh in favour of a higher penalty than circumstances where the contravention flowed from a view of the law which was not wholly untenable, or genuinely believed to be correct: Australian Federation of Air Pilots v Skywest Airlines Pty Ltd (1996) 70 IR 284 at 286. It follows that mere inadvertence will generally bring about a lighter penalty.

67    The applicant submitted that on no basis can it be said that the respondents’ conduct in this proceeding was inadvertent. The four contraventions of s 38 of the BCII Act were aimed at disrupting the performance of work, and the contravention of s 44(1) of the BCII Act was aimed at advancing the industrial objectives of the CFMEU.

68    The applicant says further that the deliberate nature of the conduct is emphasised by the respondents’ lengthy history of engaging in conduct of the type the subject of this proceeding and, therefore, they have clear awareness of the legal consequences of their actions.

69    The respondents accepted that the behaviour was not inadvertent, but do not accept that there was evidence suggesting the contraventions were deliberated on by either respondent prior to the time of their occurrence. The respondents otherwise rely on the statement of agreed facts to disclose the nature of the respondents’ contravening conduct.

SIZE OF CFMEU AND INVOLVEMENT OF SENIOR MANAGEMENT

70    The size of the entity and involvement of senior management of that entity will be relevant considerations to the question of penalty: Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 75 FCR 238 at 240 per Goldberg J. This has been a consideration which has been taken into account in relation to prior relevant conduct of the CFMEU: see Stuart-Mahoney at [49].

71    The applicant submitted that the CFMEU is a national organisation registered with Fair Work Australia, with adequate resources to pay a substantial penalty. Given Mr McDonald’s position as a senior official of the CFMEU, the CFMEU holds a high level of responsibility for Mr McDonald’s repeated incidents of unlawful conduct. The first respondent agreed that it is liable for Mr McDonald’s conduct in this regard.

72    The applicant further contends that the fact that the CFMEU is a not for profit entity is of minimal relevance in the context of deliberate action by officials of the CFMEU in the course of their duties, who chose to act unlawfully: Draffin v Construction, Forestry, Mining and Energy Union [2009] FCAFC 120 (Draffin) at [81]; Cahill at [80].

DETERRENCE

73    The penalty arrived at by the court must reflect the need for specific and also general deterrence: Caelli at [93].

74    The applicant submitted that specific deterrence is directed to ensure that the contraveners are not prepared to embark upon the risk of re-offending, and that general deterrence is directed to ensure that the penalty will act as a deterrent to others who might be likely to act unlawfully. The penalty should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like-minded persons or organisations, and if it does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the relevant provision: DPP v Gordon (1994) 71 A Crim R 549.

75    The applicant further submitted that these matters in conjunction with regard to prior relevant conduct, as exhibited in Table A, make specific deterrence an important consideration in this case. In this regard, the applicant referred in its written submissions to the decision of Cahill at [93] per Kenny J:

Deterrence, both specific and general, is a basic objective of punishment. In the case of the Union, there is a need for specific deterrence and general deterrence. The need for specific deterrence is underscored by the Union’s history of similar conduct and its continuing involvement in the building and construction history. There is also a distinct need for general deterrence, which requires a penalty to be set so 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.

76    The respondents agreed with the above, and added that although specific deterrence is an important consideration, the prior relevant conduct has adequately been taken into account by the parties in coming to the agreed penalty.

POST CONTRAVENTION CONDUCT

77    The applicant contends that any contrition, corrective conduct or cooperation with relevant enforcement authorities after the contravention will have relevance to penalty, a submission with which I generally agree.

78    The applicant says that contrition may manifest itself in an expression of remorse, but there is no evidence of any contrition or remorse in these proceedings.

79    Cooperation can be exhibited in a range of ways, such as an agreement on facts, or agreeing on penalty, and the timing of any such agreement, and the impact it has on the conduct of the trial and witnesses who would have been called at trial, are relevant: Stuart-Mahoney at [52]. Furthermore, the agreement on facts and penalty, the lack of opposition to a judicial finding of contraventions and the absence of any contest on the evidence are all factors relevant to the exercise of the discretion by the Court: Draffin at [95].

80    The applicant contends that the timing of the agreement was at a relatively early stage in this proceeding and it avoided the need for the filing of evidence and any substantial preparation for a trial and this factor ought to be taken into account.

81    The respondents agreed generally with the submissions above, and say further that proper regard should be had to the cooperation of the respondents in their early admission of liability, as well as its involvement in the statement of agreed facts. The respondents referred to the decision of the Full Court of the Federal Court in Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70; (2008) 168 FCR 383 at [76]-[78] where it was said that an admission of liability (a) has indicated an acceptance of wrongdoing and a suitable and credible expression of regret; and/or (b) has indicated a willingness to facilitate the course of justice. Similarly, frank admissions of wrongdoing may operate in mitigation: see also Australian Communications and Media Authority v Radio 2UE Sydney Pty Ltd (No 2) [2009] FCA 754; 178 FCR 199 at [150].

totality

82    As a final check on the appropriateness of the penalties to be imposed, the Court is required to consider whether the overall penalty is just and appropriate in the circumstances: see [63]-[69] of the applicant’s written submissions on penalties in this regard.

83    The Court must fix a penalty appropriate for each individual contravention and then, as a check at the end of the process, consider whether the aggregate is appropriate for the total contravening conduct: McDonald at 556.

84    The Court must ensure that the aggregate of penalties imputed is not oppressive or crushing: Stuart-Mahoney at [60].

85    The application of the totality principle is compulsory, not discretionary, in the sense that a Court must give effect to the principle where more than one contravention has been found: Johnson v R (2004) 205 ALR 346 at [35].

86    The aggregate sum of the agreed penalties in this case is $192,500 for the CFMEU and $38,500 for Mr McDonald.

87    The applicant says that the four contraventions of s 38 of the BCII Act are clearly distinct in time, amount to separate contraventions, and could not be considered as part of the same course of conduct.

88    Accordingly, the applicant submitted that the total amount of the penalties agreed between the parties is appropriate and within the permissible range, being neither manifestly excessive nor manifestly inadequate, having regard to the conduct in question and taking into account the respondents’ prior relevant conduct.

89    The respondents agreed with the applicant’s submissions in this regard, and submitted that the agreed penalties appropriately reflect the totality principle as outlined in the applicant’s submissions.

CONSIDERATION

90    In setting penalty – and in this case considering whether what the parties have agreed is appropriate – I am mindful of the many cautions in this Court against rigidly applying a catalogue of matters to determine the outcome. The Court must ultimately consider what is appropriate in the circumstances of the case.

91    In this case, on four separate occasions the first and second respondents have deliberately committed acts in contravention of the BCII Act. I regard the conduct of the respondents to have been reactive. While obviously premeditated it cannot be characterised as the sort of conduct that was planned months in advance. This is an analysis with which the applicant’s Counsel agreed with at hearing.

92    I accept the respondents’ submissions that certain examples of prior contravening conduct as set out in Table A are not wholly relevant or should be given less weight. However, the fact remains that there are a number of examples of similar and relevant contravening conduct, by both the first and second respondents. Certainly, the respondents are not first time contraveners of the BCII Act. The Court is required to consider whether the respondents are properly cognizant of the importance of complying with industrial legislation, as well as to appreciate the increased risk they run if they engage in future contraventions. In this regard, I consider the prior contraventions of the first and second respondents to be a relevant consideration favouring the imposition of a higher penalty which imports the need to regard compliance with industrial legislation seriously.

93    I also consider the need for both general and specific deterrence to be an important factor in determining penalty in this case. The respondents have exhibited behaviour which does not demonstrate a willingness to comply with industrial law, and the imposition of penalties should be at a sufficiently high level to reflect the Court’s concern at such conduct, as well as an indication to others that like conduct will receive like penalties.

94    I accept it is appropriate to view the four contraventions of s 38 as being separate courses of conduct. It is not apparent that there is any commonality of facts between the contraventions.

95    I also consider that the aggregate sums of the proposed penalties not to be overly oppressive or crushing, having due regard to the circumstances of this case.

96    The CFMEU is an organisation that also appears equipped with the resources to pay any fine imposed on it. Little is offered as to Mr McDonald’s resources and the Court assumes his capacity to pay.

97    All that being said, I also consider the considerable time and expense saved by an agreement between the parties that avoided a long trial, should be regarded.

98    The agreed penalty appears, on all the facts, to be reasonable and within the bounds of what seems appropriate. The aggregate sum of agreed penalty of $192,500 for the CFMEU, and $38,500 for Mr McDonald, constitutes a significant sum of financial penalty for each respondent, but also one which appropriately marks the Court’s disapproval of the contraventions, especially in circumstances where the respondents have committed prior contraventions of the BCII Act. Accordingly, I will make the orders as proposed by the parties.

THE COURT DECLARES THAT:

1.    On 15 January 2009, the second respondent (McDonald) contravened s 38 of the Building and Construction Industry Improvement Act 2005 (Cth) (BCII Act) by imposing a ban on a concrete pour that was scheduled to occur on 16 January 2009 at the Probuild Constructions (Aust) Pty Ltd (Probuild) construction at 140 Williams Street, Perth (Project).

2.    Pursuant to s 69(1)(b) of the BCII Act, the CFMEU contravened s 38 of the BCII Act on 15 January 2009 by the reason of McDonald’s conduct described in order 1 above.

3.    On 2 February 2009, McDonald contravened s 38 of the BCII Act by effecting a ban on the carrying out of work in connection with the scheduled erection of a gantry at the Project that night.

4.    Pursuant to s 69(1)(b) of the BCII Act, the CFMEU contravened s 38 of the BCII Act on 2 February 2009 by reason of McDonald’s conduct described in order 3 above.

5.    On 3 February 2009, McDonald contravened s 44(1) of the BCII Act by applying undue pressure on Ridgebay Holdings Pty Ltd to make a building agreement with CFMEU.

6.    Pursuant to s 69(1)(b) of the BCII Act, the CFMEU contravened s 44(1) of the BCII Act on 2 February 2009 by reason of McDonald’s conduct described in order 5 above.

7.    On 24 June 2009, McDonald encouraged workers at a meeting on the Project not to resume work as a result of inclement weather, following which they did not, and McDonald was thereby involved in unlawful industrial action in contravention of s 38 of the BCII Act.

8.    Pursuant to s 69(1)(b) of the BCII Act, the CFMEU contravened s 38 of the BCII Act on 24 June 2009 by reason of McDonald’s conduct described in order 7 above.

9.    On 20 August 2009, McDonald told workers on the Project at a meeting that they should not resume work in response to an amenities problem, following which they did not, and McDonald was thereby involved in unlawful industrial action in contravention of s 38 of the BCII Act.

10.    Pursuant to s 69(1)(b) of the BCII Act, the CFMEU contravened s 38 of the BCII Act on 20 August 2009 by reason of McDonald’s conduct described in order 9 above.

THE COURT ORDERS THAT:

11.    Pursuant to s 49(1)(a) of the BCII Act, the CFMEU shall pay the following pecuniary penalties within 30 days of this order:

(a)    $22,000 by reason of the contravention of s 38 of the BCII Act described in order 2 above.

(b)    $27,500 by reason of contravention of s 38 of the BCII Act described in order 4 above.

(c)    $38,500 by reason of the contravention of s 44(1) of the BCII Act described in order 6 above.

(d)    $49,500 by reason of the contravention of s 38 of the BCII Act described in order 8 above.

(e)    $55,000 by reason of the contravention of s 38 of the BCII Act described in order 10 above.

12.    Pursuant to s 49(1)(a) of the BCII Act, McDonald shall pay the following pecuniary penalties within 30 days of this order:

(a)    $4,400 by reason of the contravention of s 38 of the BCII Act described in order 1 above.

(b)    $5,500 by reason of the contravention of s 38 of the BCII Act described in order 3 above.

(c)    $7,700 by reason of the contravention of s 44(1) of the BCII Act described in order 5 above.

(d)    $9,900 by reason of the contravention of s 38 of the BCII Act described in order 7 above.

(e)    $11,000 by reason of the contravention of s 38 of the BCII Act described in order 9 above.

13.    Pursuant to s 49(5) of the BCII Act, the pecuniary penalties referred to in orders 11 and 12 above be paid to the Commonwealth.

14.    The CFMEU shall pay costs of the Applicant in the amount of $19,000 within 30 days of this order.

Associate:

Dated:    23 December 2011