FEDERAL COURT OF AUSTRALIA

BHP Coal Pty Ltd v Construction, Forestry, Mining and Energy Union (No 2) [2014] FCA 193

THE COURT ORDERS THAT:

1.    Within 30 days of this Order the first respondent pay the applicant pecuniary penalties in the sum of $33,000, being the total penalties payable in respect of:

(a)    the contravention of s 340 of the Fair Work Act 2009 (Cth) (“Fair Work Act”);

(b)    the contravention of s 345 of the Fair Work Act;

(c)    the contravention of s 349 of the Fair Work Act; and

(d)    the contravention of s 417 of the Fair Work Act.

2.    The first respondent (including its officers, employees and officials) is prohibited from publishing or otherwise implementing the policy known as the “Overtime Policy” in this proceeding by any means including, but not limited to, written or oral means.

3.    Within 30 days of this Order, the first respondent issue a written statement that the “Overtime Policy” the subject of this proceeding is unlawful and is withdrawn.

4.    The written statement referred to in Order 3 be:

(a)    signed by the current Peak Downs Lodge Executive on behalf of the first respondent’s Peak Downs Lodge; and

(b)    issued to the applicant and the employees of the applicant employed at the Peak Downs Mine who are members of the first respondent.

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

REASONS FOR JUDGMENT

1    In BHP Coal Pty Ltd v Construction, Forestry, Mining and Energy Union [2013] FCA 1291 I found that the respondent union (“the union”) had contravened s 340 of the Fair Work Act 2009 (Cth) (“the Act”), and that the union and the fifth respondent Mr Leggett had contravened ss 345, 349 and 417 of the Act. Materially for the purposes of the present judgment, I considered that the union had issued an overtime policy which restricted the amount of work union members could undertake per roster, that in doing so the union had taken adverse action against the applicant, and that the overtime policy included false and misleading representations by the union concerning the right of the applicant to require overtime to be worked by employees.

2    As ss 340, 345, 349 and 417 of the Act are civil penalty provisions, following delivery of judgment I invited the parties to make submissions concerning appropriate penalties under the Act. They have now done so.

3    The applicant does not seek imposition of penalties on Mr Leggett, but does seek an order that pecuniary penalties be imposed on the union pursuant to s 546 of the Act. The parties disagree fundamentally in respect of this issue, including on the question whether the Court ought order penalties be imposed at all on the union, and the quantum of such penalties.

4    The parties also disagree in respect of associated orders the applicant seeks, namely orders that the union be prohibited from seeking to “enforce” the overtime policy and that it retract the policy.

5    Before turning to consideration of issues before the Court it is useful to summarise the case of each party.

The respective cases

6    In summary, the applicant has submitted as follows:

    Principles explained by Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [14] are relevant to consideration of whether the conduct in question calls for the imposition of a penalty and the quantum of that penalty.

    The contraventions were at the more serious end of the spectrum.

    The contraventions were wilful, calculated and a serious breach of the Act.

    The applicant has been disadvantaged by the ongoing existence of the overtime policy.

    The union has engaged in similar previous conduct.

    The contraventions should be treated as similar contraventions arising out of separate courses of conduct.

    The course of conduct of the union resulting in the relevant contraventions of the Act involved multiple repeat behaviour through the issuing of the policy to each existing member of the union working at the mine over an extended period. This involved regular and wilful reissuing of the overtime policy. The number of actual breaches is unknown and unable to be determined by the applicant.

    Penalties should be imposed on the union by separating out those contraventions.

    The union is a large enterprise with significant resources.

    The relevant contraventions were all deliberate on the part of the union with active involvement by senior management.

    The union has not admitted any liability or exhibited any contrition.

    There is no evidence before the Court of any steps taken by the union to retract or withdraw the overtime policy.

    A penalty should be imposed which reflects the need for specific and general deterrence.

    Penalties should be imposed at the higher end of the range for each contravention.

    Any penalty ordered should be paid to the applicant.

7    On the other hand the union has submitted, in summary, as follows:

    Proceedings were commenced without any forewarning or attempt by BHP to discuss matters that were the subject of litigation.

    No penalty should be imposed upon the union, or alternatively any penalty should be at the lower end of the scale.

    An injunction to prohibit enforcement of the overtime policy is not appropriate as the Court has not made any findings that the union has “enforced” the overtime policy, and it is not clear what such an order would require of the union.

    An order that the first respondent retract the overtime policy is similarly unclear.

    There is no evidence that the overtime policy was designed to have or had any adverse effect on the applicant.

    There is no evidence that the respondents gained anything as a result of the overtime policy.

    There is no evidence that the breaches by the respondents were wilful, calculated or deliberate.

    There is no evidence before the Court that, as a result of the overtime policy, the applicant could not find employees to work overtime.

    The only previous conduct of any relevance was actually of a completely different nature to the present conduct before the Court, occurring more than fourteen years ago.

    In claiming that the contraventions of the Act should be treated separately and therefore multiple penalties ought be imposed, the submissions of the applicant are misconceived.

    The judgment is predicated on there being only one overtime policy, and the findings of the Court are clearly focused on a single course of conduct.

    While the union is a large organisation, it is also a not for profit organisation.

    There is no evidence that senior management of the first respondent were involved in the contraventions found by the Court.

    The form of industrial action that took place in this case was not typical. It was not designed to cause any harm to the applicant and there is no evidence of it having caused harm to the applicant. Accordingly specific deterrence is not a reason why the Court should impose or increase the quantum of penalties imposed on the union.

    The judgment should provide sufficient deterrence by alerting both the respondent union and other unions for the first time that an overtime policy of this nature does not comply with the Act.

Consideration

Penalties

8    First, in my view a pecuniary penalty ought be imposed on the union under the Act.

9    I am not satisfied that there is no evidence that the overtime policy was designed to have any adverse impact on the applicant. While it may well be that a key motivation for the development of the overtime policy was the union’s concern for the health and well-being of its members, in my view an inference could also be drawn that another motivation was to force the applicant to hire more workers (including union members) rather than utilising the existing workforce, and thus increasing the applicant’s costs. I draw this inference from the statement in the copy of the overtime policy affixed to the wall of the maintenance bay service area, and in particular the statement therein that:

There is a limitation placed on the amount of overtime you can work at Peak Downs. This helps us to get more new employees like yourself a job.

(Emphasis added.)

10    Further, I do not consider that any inference could be drawn that conduct of the union in respect of the overtime policy was in any manner accidental or inadvertent. To that extent any intention on the part of the union to impact the applicant was clearly intentional.

11    Second, I consider that any pecuniary penalty imposed on the union should be paid directly to the applicant. I note the extensive authority supporting the position that pecuniary penalties imposed by the Court will ordinarily be paid to the party prosecuting proceedings where that party is other than an enforcement agency (Woodside Burrup Pty Ltd v Construction, Forestry, Mining and Energy Union (2011) 209 IR 302; [2011] FCA 949 at [148]; Gibbs v The Mayor, Councillors and Citizens of the City of Altona (1992) 37 FCR 216 at [26]; Seven Network (Operations) Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (No 2) (2001) 110 IR 372; [2001] FCA 672 at [8]; and Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357 at [44], [65]; Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 5) [2013] FCA 1384 at [25]). The applicant in this case is a corporation which has incurred expense in prosecuting proceedings under the Act, and there is no reason for the Court to do otherwise than adopt the usual approach in respect of payment of the penalty.

12    Third, I am satisfied that the contraventions of the Act the Court found in this case arose from a single course of conduct, and accordingly multiple penalties are not warranted.

13    In the case of multiple contraventions the Court will have regard to whether those contraventions amounted to a single course of conduct to ensure that the offender is not punished twice for the same conduct. As Middleton and Gordon JJ observed in Construction, Forestry, Mining and Energy Union v Cahill (2010) 194 IR 461; [2010] FCAFC 39 at [41]:

… the principle recognises that where there is an interrelationship between the legal and factual elements of two or more offences for which an offender has been charged, the court must ensure that the offender is not punished twice for the same conduct. In other words, where two offences arise as a result of the same or related conduct that is not a disentitling factor to the application of the single course of conduct principle but a reason why a court may have regard to that principle, as one of the applicable sentencing principles, to guide it in the exercise of the sentencing discretion: Johnson v R (2004) 205 ALR 346; [2004] HCA 15 at [3]–[4] and [34] and Attorney-General v Tichy (1982) 30 SASR 84 at 92–3 (Tichy). It is a tool of analysis (Tichy at 93) which a court is not compelled to utilise: Royer v Western Australia [2009] WASCA 139 at [21]–[34] and [153]–[156] (Royer).

14    Similar observations were made in QR Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (2010) 204 IR 142; [2010] FCAFC 150 at [49] where the Full Court said:

Even if s 557(2) does not apply to a case to oblige to treat as one contravention all the consequences of a particular piece of conduct, it is open to the Court, in an appropriate case, to take into account, as a matter of discretion, the circumstance that the same acts or omissions have resulted in multiple contraventions by multiple breaches of a term cast in similar language in each of multiple agreements, by imposing a lesser penalty or even no penalty in respect of breaches of some terms, while imposing a substantial penalty in respect of breaches of other terms (Gibbs v Mayor, Councillors and Citizens of Altona (1992) 37 FCR 216 at 233; Kelly v Fitzpatrick (2007) 166 IR 14 at 17).

15    In this case, while the applicant substantiated its case that there had been contraventions of more than one section of the Act, a finding to this effect does not equate to multiple acts of the union warranting imposition of multiple penalties by the Court. In particular, the actions of the union in promulgating the policy (including providing material to new members and the display of the policy in the service bay crib room) constituted overlapping and inter-related conduct, such as to constitute a single course of conduct. I am not persuaded that this constituted a “range of acts” committed by the union to implement its ban on overtime.

16    Fourth, I am satisfied that a penalty should be imposed at the higher end of the scale. Both parties in this proceeding accepted that principles outlined by Tracey J in Kelly v Fitzpatrick at [14] provided a useful guide to the Court of relevant considerations to which the Court could have regard in determining an appropriate penalty, namely:

    the nature and extent of the conduct which led to the breaches;

    the circumstances in which that 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 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;

    the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and

    the need for specific and general deterrence.

17    In this case:

    The overtime policy was clearly a long-standing policy of the union at the Peak Downs Mine, with a wide circulation among new union members and existing workers at the mine.

    The overtime policy was deliberately promulgated by the union through the Peak Downs Lodge, notwithstanding the terms of the BHP Coal Pty Ltd Workplace Agreement 2007 (“2007 Agreement”) which the applicant and the union entered following extensive and detailed negotiations.

    While it is not possible to specifically identify the nature of loss suffered by the applicant as a result of the overtime policy, it is clear that:

o    the applicant had a right to require employees to work unrostered overtime in circumstances contemplated by the 2007 Agreement;

o    the overtime policy unlawfully purported to restrict workers undertaking unrostered overtime as may have been required by the applicant over an indeterminate time, and it is reasonable to infer that union members worked in accordance with that policy;

o    although a purpose of the overtime policy may have been beneficial in respect of workers employed by the applicant, I am not persuaded by the submission of the union that it was not designed to cause any harm to the applicant.

    While the union may be a not for profit organisation, it is clearly an entity of considerable assets and resources.

18    Further, while I am not persuaded that there is any recent similar conduct of the union to which I can properly have regard in respect of determining an appropriate penalty, the union has exhibited no contrition for its conduct, and there is no evidence that it has taken any corrective action in respect of the publication or promulgation of the overtime policy. From the perspective of the need for specific deterrence I am satisfied that a penalty of substance is warranted. I take a similar view in relation to the need for the penalty imposed by the Court in this case to have an appropriate effect generally to deter the union and similar organisations from engaging in similar conduct.

19    In my view, and treating the contraventions in this case as relating to a single course of conduct, the appropriate penalty is the maximum which can be imposed for a single contravention, namely $33,000.

Additional orders

20    Further, the applicant seeks additional orders:

    Prohibiting the union from publishing or otherwise implementing the overtime policy.

    Requiring the union to issue a written statement that the overtime policy is unlawful and is withdrawn, such statement to be signed by the Peak Downs Lodge Executive and issued to the applicant and employees of the applicant at the Peak Downs Mine.

(It is clear that the additional orders sought by the applicant have been modified slightly since written submissions as to penalty were filed by the parties.)

21    In my view it is appropriate to make these orders in the circumstances of this case.

22    As I have already observed it is clear that the overtime policy is of long standing at the Peak Downs Mine, had received the approval of the Peak Downs Lodge on behalf of the union, and had been promulgated to new members of the union at Peak Downs for an indeterminate time as well as being in areas frequented by union members at the mine. To that extent, it is important that the union take positive action to ensure that its members are aware of the effect of the primary judgment in this proceeding.

23    The union claims in its submissions that there is no evidence that the overtime policy has ever been raised at the workplace with the applicant or its employees at any time since the proceedings began. In my view this submission is somewhat disingenuous. One might equally say that there is no evidence before the Court that the conduct of the union in promulgating the policy has changed or ceased since the proceedings began.

24    Further, the union submits that the orders sought by the applicant are not clear in their requirements of the union and Peak Downs Lodge. I do not accept this submission, at least in respect of the orders now sought by the applicant. In my view the orders sought by the applicant are clear, and warranted in circumstances where an inference might properly be drawn that union members at the Peak Downs Mine would take very seriously any overtime policy which they understood was endorsed by the union and the Peak Downs Lodge Executive of the union.

25    Third, I note the submission of the union that the primary judgment should provide sufficient deterrence by alerting both the respondents and other unions for the first time that an overtime policy of this nature does not comply with the Act. This submission is an acknowledgment by the union of the unlawfulness of the overtime policy, is particularly relevant to the issue of deterrence, and bears some relevance to the question whether the status of the overtime policy is in the public arena. In my view the existence of the primary judgment, while undoubtedly of importance and relevance to the union itself, may not have been brought to the attention of ordinary union members employed at Peak Downs Mine. Direct action by the union, and in particular the Peak Downs Executive, to bring the effect of the primary judgment to the attention of workers is, in my view, necessary and justified in circumstances where union members at the mine would expect to take into account union policies in carrying out their duties.

26    Finally I note that since the primary judgment was delivered the applicant has filed an affidavit sworn on 20 January 2014 by Mr Shaun McKenzie, an employee relations manager with the applicant. No evidence has been filed by the union to assist the Court in determining whether any corrective action has been taken by the union in relation to the overtime policy. Similarly, no material has been filed by the union to demonstrate any difficulty it might have complying with the additional orders proposed by the applicant.

Associate:

Dated:    10 March 2014