FEDERAL COURT OF AUSTRALIA

DP World Sydney Limited v Maritime Union of Australia (No 2) [2014] FCA 596

THE COURT DECLARES THAT:

1.    The First Respondent organised industrial action at Port Botany in New South Wales between 10.30 am and 2.00 pm on 18 December 2012, before the nominal expiry date of the DP World Sydney Enterprise Agreement 2011 (“DP World Agreement”), in contravention of s 417 of the Fair Work Act 2009 (Cth).

2.    The First Respondent organised industrial action at Port Botany in New South Wales between 2.00 pm and 10.00 pm on 18 December 2012, before the nominal expiry date of the DP World Agreement, in contravention of s 417 of the Fair Work Act 2009 (Cth).

3.    The First Respondent organised industrial action at Port Botany in New South Wales between 10.00 pm on 18 December 2012 and 6.00 am on 19 December 2012, before the nominal expiry date of the DP World Agreement, in contravention of s 417 of the Fair Work Act 2009 (Cth).

4.    The Second Respondent organised industrial action at Port Botany in New South Wales between 10.30 am and 2.00 pm on 18 December 2012, before the nominal expiry date of the DP World Agreement, in contravention of s 417 of the Fair Work Act 2009 (Cth).

5.    The Second Respondent organised industrial action at Port Botany in New South Wales between 2.00 pm and 10.00 pm on 18 December 2012, before the nominal expiry date of the DP World Agreement, in contravention of s 417 of the Fair Work Act 2009 (Cth).

6.    The Second Respondent organised industrial action at Port Botany in New South Wales between 10.00 pm on 18 December 2012 and 6.00 am on 19 December 2012, before the nominal expiry date of the DP World Agreement, in contravention of s 417 of the Fair Work Act 2009 (Cth).

7.    The Third Respondent organised industrial action at Port Botany in New South Wales between 10.30 am and 2.00 pm on 18 December 2012, before the nominal expiry date of the DP World Agreement, in contravention of s 417 of the Fair Work Act 2009 (Cth).

8.    The Third Respondent organised industrial action at Port Botany in New South Wales between 2.00 pm and 10.00 pm on 18 December 2012, before the nominal expiry date of the DP World Agreement, in contravention of s 417 of the Fair Work Act 2009 (Cth).

9.    The Third Respondent organised industrial action at Port Botany in New South Wales between 10.00 pm on 18 December 2012 and 6.00 am on 19 December 2012, before the nominal expiry date of the DP World Agreement, in contravention of s 417 of the Fair Work Act 2009 (Cth).

AND THE COURT ORDERS THAT:

1.    A pecuniary penalty of $30,000 is imposed on the First Respondent pursuant to s 546 of the Fair Work Act 2009 (Cth) in respect of the three contraventions referred to in the declarations made in paragraphs 1 to 3 above.

2.    A pecuniary penalty of $8,000 is imposed on the Second Respondent pursuant to s 546 of the Fair Work Act 2009 (Cth) in respect of the three contraventions referred to in the declarations made in paragraphs 4 to 6 above.

3.    A pecuniary penalty of $3,000 is imposed on the Third Respondent pursuant to s 546 of the Fair Work Act 2009 (Cth) in respect of the three contraventions referred to in the declarations made in paragraphs 7 to 9 above.

4.    The above penalties are to be paid to the Applicant in accordance with s 546(3) of the Fair Work Act 2009 (Cth) within 30 days of the date of this order.

5.    The proceeding is dismissed.

6.    There is no order as to costs.

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

REASONS FOR JUDGMENT

1    On 18 and 19 December 2012 there occurred some industrial disruption to the activities at Port Botany in Sydney.

2    On 21 December 2013 there was filed in this Court an Originating Application and a Statement of Claim by DP World Sydney Limited (“DP World”). The Respondents to that proceeding were the Maritime Union of Australia (“the Maritime Union”) and two individuals, Messrs Paul McAleer and Paul Keating. Mr McAleer is the Branch Secretary of the Maritime Union; Mr Keating is the Deputy Branch Secretary of the Maritime Union. Defences were filed on 18 January 2013.

3    The orders which were then sought included orders restraining a contravention of s 417 of the Fair Work Act 2009 (Cth) (“Fair Work Act”) and restraining Messrs McAleer and Keating from aiding, abetting, counselling, procuring, inducing or otherwise being knowingly concerned in a contravention of s 50 of the Fair Work Act in relation to clauses 8 and 12 of the DP World Sydney Enterprise Agreement 2011.

4    In February 2013 orders were made for the separate determination of questions of liability in advance of any hearing as to penalty and damages. The proceeding was transferred into the docket of the Court as presently constituted on 30 August 2013. A Directions Hearing was held on 31 March 2014 when the parties sought no departure from the order that liability be determined first. The proceeding was listed for hearing for five days commencing on 29 April 2014.

5    On 28 April 2014 the Court was informed that the parties were discussing a settlement of the questions going to the liability of the Respondents. By 29 April 2014 those questions had been resolved and the parties were left to discuss the form of any injunctive relief. The hearing was stood over to 5 May 2014.

6    In addition to the form of declaratory relief which had been agreed upon, the parties had also agreed that appropriate penalties in respect to each of the Respondents was as follows:

    a penalty of $30,000 be imposed upon the First Respondent;

    a penalty of $8,000 be imposed on the Second Respondent; and

    a penalty of $3,000 be imposed on the Third Respondent.

It was further agreed that these monies were to be paid to the DP World. Brief reasons should nevertheless be given setting forth:

    the facts which gave rise to the disruption;

    the considerations to be taken into account when fixing a penalty; and

    the principles to be applied when consideration is given to any agreement between the parties as to the quantum of any penalty and the entity to whom those monies are to be paid.

7    Concurrence is expressed as to the form of the declaratory relief sought and the appropriateness of those penalties.

The agreed facts

8    DP World is part of a group of companies that conducts stevedoring operations for shipping companies. The group operates container terminals at various facilities throughout Australia, including Sydney, Brisbane, Melbourne and Fremantle.

9    At the Port Botany Terminal in Sydney DP World employs about 650 stevedores. The work they perform is covered by the DP World Sydney Enterprise Agreement 2011 (“the Sydney Agreement”).

10    Operations at Port Botany are based around three eight hour continuous shifts, being:

    the day shift: from 6.00 am to 2.00 pm;

    the evening shift: from 2.00 pm to 10.00 pm; and

    the night shift: from 10.00 pm to 6.00 am.

11    The background facts which gave rise to the relief now being sought took place on 18 and 19 December 2012. Two elements of those facts assume some importance – namely, the conversations which gave rise to the disruption and the time lost as a result of those disruptions.

12    Although the facts which gave rise to the dispute took place on 18 and 19 December 2012, they had their genesis a lot earlier.

13    One employee, Mr Darrell Wills, had been off work for approximately 18 months having suffered an ocular occlusion. DP World had decided that some action was required. It was at 9.00 am on 18 December 2012 that a meeting was held to discuss the issue. In attendance were Messrs McAleer and Wills. Also in attendance was Ms Seta Samimi (the Human Resources Manager) and Mr Brendan Bilston (the Operations Manager).

14    Because the events of that meeting provided the catalyst for the industrial disruption that later followed, it is necessary to set forth the substance of what was said. At the meeting it is agreed that the following conversation and events took place:

Ms Samimi:    ‘I don’t think that it is safe for him [Mr Wills], to drive an IT vehicle or a forklift. We want a safe workplace.’

Mr McAleer [raised voice]:    ‘Don’t talk to me about safety, I can close this site, this meeting is finished…’

Ms Samimi:    ‘We need to talk about this.’

Mr McAleer and Mr Wills then stood up.

Ms Samimi:    ‘We will send you a letter.’

Mr Wills:    ‘I will wait for the letter then.’

Mr McAleer and Mr Wills left the room.

Mr McAleer and Mr Wills left the meeting. Mr Bilston observed that Mr McAleer and Mr Wills were in an agitated state. Mr Bilston followed them out of the room and they walked up the corridor outside the employee change rooms. Mr McAleer still appeared to be in an agitated state and he said words to the following effect:

Mr McAleer:    “It’s time to take action.”

Approximately five minutes later, Mr Bilston sought out Mr McAleer, who was located in the canteen at the Port Botany Terminal. Mr Bilston indicated their earlier discussion had not been concluded, and invited Mr McAleer and Mr Wills back to the meeting. Mr McAleer and Mr Bilston had a conversation with words said to the effect of:

Mr Bilston:    We haven’t finished the meeting and would like you both to come back to the meeting with HR [Human Resources] to continue discussions.

Mr McAleer:    Today’s meeting should not be going down the path of termination, The decision was made prior to Darrell [Wills] or me coming onto the site. I don’t understand why you need to terminate this employment, it is not costing the company any money – Darrell has income protection.

Mr Bilston:    This isn’t about Darrel [Wills] having income insurance or not, it is about his long-term absence and doctor’s report that states that he is not fit to return to work any time soon.

Mr McAleer:    Then we won’t be coming back. DP World is treating the MUA with contempt, especially HR.

Mr Bilston:    If you [Mr Wills] are not prepared to sit down with the company and continue the meeting, I will be sending you a termination letter.

Mr Wills:    I understand but I’m not prepraed to go to a meeting just to get sacked.

Mr McAleer:    We will not be coming back into any meeting with HR if it is about him [Mr Wills] getting the sack.

Mr Bilston:    The decision and the termination stands, you [Mr Wills] will receive a termination letter outlining the decision.

Mr McAleer:    I am going to explain the outcome of this morning’s meeting to the workforce and I’ll let you know the outcome of that.

Mr Bilston then left, and Mr McAleer and Mr Wills remained in the canteen.

15    It is unnecessary to set forth the balance of the conversations that took place on 18 and 19 December 2012. It is sufficient, for present purposes and given the agreement between the parties, to simply note that there was disruption to each of the three shifts. Mr McAleer took a more prominent role than did Mr Keating.

The imposition of penalties – the considerations to be taken into account

16    The power to impose a pecuniary penalty for a contravention of the Fair Work Act is that conferred by s 546. That section provides as follows:

Pecuniary penalty orders

(1)    The Federal Court, the Federal Circuit Court or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.

Determining amount of pecuniary penalty

(2)    The pecuniary penalty must not be more than:

(a)    if the person is an individual – the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); or

(b)    if the person is a body corporate – 5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2).

Payment of penalty

(1)    The court may order that the pecuniary penalty, or a part of the penalty, be paid to:

(a)    the Commonwealth; or

(b)    a particular organisation; or

(c)    a particular person.

Recovery of penalty

(2)    The pecuniary penalty may be recovered as a debt due to the person to whom the penalty is payable.

No limitation on orders

(5)    To avoid doubt, a court may make a pecuniary penalty order in addition to one or more orders under section 545.

17    The principles to be applied when determining the appropriate penalty to be imposed have previously been addressed by Moore J in Rojas v Esselte Australia Pty Ltd (No 2) [2008] FCA 1585, (2008) 177 IR 306. The applicant in that proceeding, Mr Rojas, was a member of the National Union of Workers of Australia and had had his employment terminated. He alleged the dismissal contravened s 792 of the Workplace Relations Act 1996 (Cth). His Honour embraced the following observations of Branson J in Construction, Forestry, Mining and Energy Union v Coal and Allied Operations Pty Ltd (No 2) [1999] FCA 1714, (1999) 94 IR 231 at 232:

[7]    The Act gives no explicit guidance as to the circumstances in which an order imposing a penalty under s 298U [a predecessor provision to s 807] of the Act will be appropriate or as to the circumstances in which a penalty of or near the maximum, or alternatively of a lesser amount, may be called for. The Court is simply directed to consider what is appropriate in all the circumstances of the case.

[8]    The following matters, which are not intended to comprise an exhaustive list, seem to me to be considerations to which the Court may appropriately have regard in determining whether particular conduct calls for the imposition of a penalty, and assuming that it does, the amount of the penalty:

(a)    The circumstances in which the relevant conduct took place (including whether the conduct was undertaken in deliberate defiance or disregard of the Act);

(b)    Whether the respondent has previously been found to have engaged in conduct in contravention of Pt XA of the Act;

(c)    Where more than one contravention of Pt XA is involved, whether the various contraventions are properly seen as distinct or whether they arise out of the one course of conduct;

(d)    The consequences of the conduct found to be in contravention of Pt XA of the Act;

(e)    The need, in the circumstances, for the protection of industrial freedom of association; and

(f)    The need, in the circumstances, for deterrence.

Moore J noted that this “check list” provided a “useful starting point in determining whether a penalty ought to be imposed, and if so the level of such penalty” but further observed that “at the end of the day the task for the court is to fix a penalty that pays appropriate regard to the contraventions that have occurred”: [2008] FCA 1585 at [65], (2008) 177 IR 306 at 325. Various other Judges of this Court have also expressed, albeit in differing terms, a list of “non-exhaustive” considerations to be taken into account when assessing the penalty to be imposed: eg, Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426 at [40] per Tracey J; Fair Work Ombudsman v Transport Workers’ Union of Australia [2010] FCA 768 at [26] to [27], (2010) 202 IR 411 at 417 to 418 per Besanko J; Darlaston v Parker (No 2) [2010] FCA 1382 at [6] to [8], (2010) 200 IR 353 at 356 per Flick J.

18    The need for a penalty to act as a “deterrent” has attracted repeated attention. It is well-recognised that a principal purpose of ordering the payment of a financial penalty is “to put a price on contravention that is sufficiently high to deter repetition by the contravener and by others who might be tempted to contravene the Act”: Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 at 52,152; Australian Competition and Consumer Commission v Singtel Optus Pty Ltd (No 4) [2011] FCA 761 at [75], (2011) 282 ALR 246 at 265 per Perram J; Global One Mobile Entertainment Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 134 at [125] per Greenwood, Logan and Yates JJ. The quantification of an appropriate penalty, accordingly, focuses attention upon the conduct of the contravener and upon the public interest in deterring others from engaging in like conduct.

19    Any penalties that may be imposed for related offences, however, should not be disproportionate to the contravening conduct. The “final step” which is to be taken by the Court before imposing the penalties otherwise considered to be appropriate is to apply what has been referred to as the “totality principle”. This principle was explained by Middleton J in Australian Competition and Consumer Commission v AGL Sales Pty Ltd [2013] FCA 1030 as follows:

[61]    Lastly, I must consider the totality principle, parity and deterrence.

[62]    With respect to the totality principle, it is trite law that the total penalty for related offences should not exceed what is proper for the entire contravening conduct involved… Put another way, the totality principle involves a final consideration of the sum of the penalties determined. Goldberg J, in Safeway Stores [(1997) 145 ALR 36 at 53] noted that the Court:

must, as an initial step, impose a penalty appropriate for each contravention and then as a check, at the end of the process, consider whether the aggregate is appropriate for the total contravening conduct involved.

Agreement as to the quantum of penalties – the role of the Court

20    The role of the Court when giving consideration to an agreement between the parties is also well-settled. It is a question which has arisen in a variety of different statutory contexts.

21    In Ministry for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72, (2004) ATPR 41-993 a pecuniary penalty was sought to be imposed upon Mobil by reason of a contravention of s 10 of the Petroleum Retail Marketing Sites Act 1980 (Cth). The parties had prepared a Statement of Agreed Facts. The parties had also reached agreement as to the quantification of a penalty in the sum of $844,500. When focussing attention upon the agreement as to penalty, Branson, Sackville and Gyles JJ referred to the earlier decision of the Full Court in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 and continued:

[51]    The following propositions emerge from the reasoning in NW Frozen Foods:

(i)    It is the responsibility of the Court to determine the appropriate penalty to be imposed under s 76 of the TP Act in respect of a contravention of the TP Act.

(ii)    Determining the quantum of a 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.

(iii)    There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed.

(iv)    The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty. In particular, the views of the regulator on matters within its expertise (such as the ACCC’s views as to the deterrent effect of a proposed penalty in a given market) will usually be given greater weight than its views on more “subjective” matters.

(v)    In determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so.

(vi)    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 is, in the Court’s view, 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 within the permissible range.

The Full Court there went on to express a number of further principles, including the following:

[53]    First, the rationale for giving weight to a joint submission on penalty is said by the Court to be the savings in resources for the regulator and the Court, as well as the likelihood that a negotiated resolution will include measures designed to promote competition. As Jeremy Thorpe points out, a related advantage is that the savings in resources can be used by the regulator to increase the likelihood that other contraveners will be detected and brought before the courts. This has the effect of increasing deterrence which is one of the principal justifications, if not the only justification for imposing civil penalties under the TP Act or the Sites Act: J Thorpe, “Determining the Appropriate Role for Charge Bargaining in Pt IV of the Trade Practices Act” (1996) 4 Comp & Cons LJ 69, at 72–74. Of course the arguments in favour of negotiated settlements have to take account of the fact that it is the Court that bears the ultimate responsibility for determining the appropriate penalty.

[54]    Secondly, the sixth proposition drawn from the reasoning in NW Frozen Foods does not mean, in our opinion, that the Court must commence its reasoning with the proposed penalty and limit itself to considering whether that penalty is within the permissible range. A Court may wish to take that approach. However, it is open to a Court, consistently with the reasoning in NW Frozen Foods, first to address the appropriate range of penalties independently of the parties’ proposed figure and then, having made that judgment, determine whether the prepared penalty falls within the range.

See also: Australian Competition and Consumer Commission v Mitsubishi Electric Australia Pty Ltd [2013] FCA 1413 at [12] to [19] per Mansfield J; Australian Competition and Consumer Commission v Avitalb Pty Ltd [2014] FCA 222 at [17] per Griffiths J. When considering the role of the Court where there has been an agreement as to the quantum of any penalty, it is also relevant to recall that Burchett and Kiefel JJ in NW Frozen Foods, supra, observed that penalties are “not criminal sanctions, and their purpose, established now by a long line of cases, is not punishment”: (1996) 71 FCR 285 at 296-297.

22    The guidance that these considerations provide in respect to the approach of the Court when dealing with the imposition of penalties for contraventions of industrial legislation is well accepted: e.g., General Manager of Fair Work Australia v Health Services Union [2013] FCA 1306 at [17] to [29] per Middleton J; Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2014] FCA 126 at [41] to [42] per Gilmour J; Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2014] FCA 160 at [23] to [24] per White J.

23    It is respectfully further concluded that the decision of the High Court in Barbaro v The Queen [2014] HCA 2, (2014) 88 ALJR 372 does not require any departure from the approach formerly applied by this Court. Barbaro, supra, was a case about criminal custodial sentencing. In Australian Competition and Consumer Commission v Energy Australia Pty Ltd [2014] FCA 336, Middleton J, however, noted the potential impact of Barbaro, supra, upon cases involving the imposition of civil penalties as follows:

[114]    However, it is appropriate that I make mention of the recent decision of the High Court of Australia in Barbaro… having the benefit of submissions from the ACCC on the impact of that decision, and having reached my own conclusions on its application to civil penalty proceedings of the type now before me. I appreciate that there is no contradictor.

[115]    On a broad reading of the majority reasoning in Barbaro, and taking in isolation some of the comments made, it might be thought that the Court should not take into account the submissions of the parties as to the ‘agreed’ penalty amount in civil penalty proceedings. However, I do not consider the decision goes that far or that it implicitly overrules Full Court authority applied on numerous occasions in this Court.

His Honour then proceeded to review the differences between “sentencing principles” applicable to criminal proceedings and the principles to be applied when imposing a civil penalty and continued:

[130]    Then, it is to be recalled in the situation confronting me, I have not just been provided with a “bare” statement of range of penalties, or specific penalty, which tells the judge nothing of the conclusions or assumptions upon which the proposed penalty depends (a problem referred to in Barbaro). I have the advantage of submissions of law and an agreed statement of facts (which I regard as sufficient for my task), which go beyond the mere bare expression of opinion by a prosecutor.

[131]    Further, there is still binding Full Court authority in the civil penalty context which supports the practice of civil regulators making submissions as to penalty amount, based upon agreed statement of facts and joint legal submissions from the parties indicating an ‘agreed’ penalty.

[132]    In NW Frozen Foods Burchett and Kiefel JJ surveyed authorities on agreed penalties and concluded that a regulator and respondent could jointly propose specific penalty amounts to the Court. Their Honours emphasised that (provided the Court was satisfied that the proposed amount was appropriate) there was a strong public interest in imposing that penalty, even if the Court may otherwise have selected a different figure for itself.

[133]    The effect of NW Frozen Foods was given further consideration by the Full Court in Mobil Oil, where Branson, Sackville & Gyles JJ surveyed the relevant authorities, including several which had criticised the reasoning in NW Frozen Foods. Their Honours went on to uphold the approach outlined in NW Frozen Foods and to explain and support the reasons for that approach.

[134]    The principles in NW Frozen Foods and Mobil Oil have been followed and applied in subsequent civil penalty cases in the Federal Court.

His Honour ultimately concluded:

[150]    In light of the above observations, I do not consider that the High Court intended to exclude, in a civil context, the making of submissions (joint or otherwise) by the parties as to appropriate orders to make (not just as to penalty, but also as to injunctions and disqualification orders). Without specific mention and consideration, I do not conclude that the High Court implicitly overruled the earlier Full Court decisions of NW Frozen Foods and Mobil Oil.

The parties to the present proceeding jointly submitted that his Honour’s decision should be followed. That submission is accepted. Gratitude is expressed to his Honour for his careful and detailed exposition of the authorities and principles. His decision, with respect, is clearly correct.

24    Notwithstanding the criticism expressed by the Victorian Court of Appeal in Australian Securities and Investments Commission v Ingelby [2013] VSCA 49, (2013) 275 FLR 171, the principles set forth in NW Frozen Foods, supra, and Mobil Oil, supra, remain the principles to be applied in the present case.

25    In the present proceeding there is, of course, agreement between the Applicant company and the Maritime Union and the other two Respondents. The proceeding is, accordingly, not one in which the Court has the benefit of the “specialist” input of the regulator. The absence of that assistance may serve to only increase the need for the Court to scrutinise even more carefully the appropriateness of the quantum of the agreed penalties. But the public interest in “promoting settlement of litigation” remains.

The principles applied

26    The difficulty in many cases in which the Court is called upon to either determine the quantum of penalties to be imposed or in giving consideration to any agreement between the parties is the fact that one or other of the considerations to be taken into account go “in different directions”. Some considerations point in the direction of a lesser penalty being appropriate whilst other considerations point in the opposite direction.

27    In the present proceeding, it was common ground that there had been three contraventions by each of the Respondents of s 417 of the Fair Work Act and further agreement that each of those contraventions gave rise to a penalty.

28    Although it must be recognised at the outset that each of the contraventions involved deliberate conduct which had the consequence that there was some disruption to work during each of the three shifts on 18/19 December 2012, the contraventions were, in essence, an over-reaction on the part of the Respondents to the decision to dismiss Mr Wills. Although the response on the part of the Respondents was unjustified, it was certainly not conduct warranting the imposition of a penalty at anything other than the “lower range”.

29    In reaching that conclusion, two aspects of the Respondents’ conduct warrant separate attention, namely:

    the fact that the Respondents only reached agreement as to the terms of the settlement of the proceeding immediately preceding the commencement of the hearing; and

    the fact that the Maritime Union has previously been found to have contravened s  417 of the Fair Work Act.

Each consideration can be briefly addressed.

30    The “co-operation” of a contravener is relevant to the assessment of the penalty to be imposed: e.g., Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 at 52,152 – 52,153 per French J; see also Australian Competition and Consumer Commission v BAJV Pty Ltd [2014] FCAFC 52 at [39] per Rares, Jessup and Flick JJ. Although the “co-operation” of the Respondents may have occurred at a late stage in the proceeding, there was ultimately co-operation. Moreover, at that point of time when an order had been made for the separate determination of liability as opposed to relief, there may well have been an understandable reluctance on the part of the Respondents to expose themselves to as-yet unquantified claims for loss or damage. When agreement emerged as to the orders to be made there was thereafter co-operation on the part of the Respondents which may properly be taken into account.

31    Past contraventions are also relevant to the assessment of penalties: e.g., Australian Building & Construction Commissioner v Construction, Forestry, Mining & Energy Union [2011] FCA 810 at [35] per Gilmour J. The greater the past wrongful conduct, the greater may be the penalties to be imposed for current wrongdoing. There have been two prior contraventions on the part of the Maritime Union: Fair Work Ombudsman v Maritime Union of Australia [2012] FCA 1521 and Fair Work Ombudsman v Maritime Union of Australia [2012] FCA 1232. The former case involved conduct that took place in May 2009; the latter case involved conduct that took place in March 2010. There have been no prior contraventions on the part of Messrs McAleer or Keating. Some weight is to be given to this prior conduct on the part of the Maritime Union – but such weight as is given to it may be regarded as slight.

32    Separate from these two matters, consideration must also be given to a fundamental objective of imposing penalties, namely deterrence. The imposition of penalties, it is to be recalled, serves both the purpose of providing a general deterrence and a more specific deterrence. On the facts of the present case, it is concluded that the penalties as agreed sufficiently expresses the Court’s condemnation of the unlawful industrial action that occurred and serve to promote the object and purpose of the Fair Work Act. At a general level, the penalties serve as a general deterrent to unlawful action. The penalties in the amounts as agreed, it is also considered, will serve as a specific deterrence to the Respondents again engaging in such conduct.

33    Having considered each of the matters identified by the Full Court in NW Frozen Foods, supra, and Mobil Oil, supra, it is considered that the imposition of penalties as agreed is appropriate. Effect should be given to the settlement of the proceeding as agreed between the parties.

34    Some reservation was expressed during the course of the hearing as to the appropriateness of an order that the penalties were to be paid to DP World. Section 546(3)(c) provides for the making of such an order. The reservations expressed during the hearing centred upon the need for separate and discrete attention to be given to:

    the process of quantifying the appropriate penalties to be imposed in any given case

and the need for that process to be kept separate and discrete from any consideration that may be given to:

    the quantification of any claim for loss or damages that may have been suffered by an employer/applicant; and

    the making of any order as to costs.

Where the party seeking an order as to contraventions of the Act is (for example) the Fair Work Ombudsman, an order that penalties are to be paid to the Commonwealth is unquestionably the imposition of a sanction against a contravener and the payment of monies to the public benefit. Where the party seeking an order as to contraventions is (by way of contrast) the “victim” of the contraventions, an order that penalties are to be paid to the “victim” may be seen in substance as the blurring of the line between when monies are truly the payment of penalties as opposed to some form of “disguised” damages claim or a “disguised” costs order.

35    However the “victim” who seeks to enforce the Fair Work Act may regard or characterise the receipt of monies order to be paid as penalties, the function of the Court in quantifying penalties must forever in fact and in substance remain separate and discrete from any consideration it may give to either:

    the appropriateness of an order for loss or damages; and

    the making of a costs order pursuant to s 570(2) of the Fair Work Act.

The process of quantifying either loss or damage or the quantum of any costs order that may be made, self-evidently, involves recourse to different considerations to those involved in the quantification of penalties. It would be a manifestly erroneous exercise of discretion to increase the quantum of penalties against the contravener in order to compensate the “victim” or complainant for any loss or damage it has suffered or for the costs it has incurred in bringing and prosecuting a proceeding.

36    Any need to consider these issues further was removed when DP World agreed that it would abide by the settlement reached with the Respondents, even in the event that the Court should consider that the penalties should be made payable to the Commonwealth.

37    In the present proceeding, it is concluded that the penalties should be made payable to DP World. The quantum of those penalties has been fixed by reference to those considerations identified by the Full Court. In bringing the present proceeding, DP World has not only vindicated its own self-interest in exposing the wrongful conduct of the Respondents; it has also served a considerable public purpose in ensuring compliance with the Fair Work Act.

Conclusions

38    Having considered each of the matters identified by Moore J in Rojas, supra, and Branson J in Coal and Allied, supra, and the agreement between the parties as to the appropriate penalties to be imposed, concurrence is expressed with the appropriateness of those penalties.

39    The events as they unfolded on 18/19 December 2012 merely exposed what was in all probability an overreaction on the part of Mr McAleer. Contraventions nevertheless followed and there were disruptions to the business activities of DP World. Penalties at the “lower end” of the spectrum were clearly appropriate. The involvement of Mr McAleer was clearly much greater than that of Mr Keating and the larger penalty imposed upon Mr McAleer reflects this greater involvement.

THE COURT DECLARES THAT:

1.    The First Respondent organised industrial action at Port Botany in New South Wales between 10.30 am and 2.00 pm on 18 December 2012, before the nominal expiry date of the DP World Sydney Enterprise Agreement 2011 (DP World Agreement), in contravention of s 417 of the Fair Work Act 2009 (Cth).

2.    The First Respondent organised industrial action at Port Botany in New South Wales between 2.00 pm and 10.00 pm on 18 December 2012, before the nominal expiry date of the DP World Agreement, in contravention of s 417 of the Fair Work Act 2009 (Cth).

3.    The First Respondent organised industrial action at Port Botany in New South Wales between 10.00 pm on 18 December 2012 and 6.00 am on 19 December 2012, before the nominal expiry date of the DP World Agreement, in contravention of s 417 of the Fair Work Act 2009 (Cth).

4.    The Second Respondent organised industrial action at Port Botany in New South Wales between 10.30 am and 2.00 pm on 18 December 2012, before the nominal expiry date of the DP World Agreement, in contravention of s 417 of the Fair Work Act 2009 (Cth).

5.    The Second Respondent organised industrial action at Port Botany in New South Wales between 2.00 pm and 10.00 pm on 18 December 2012, before the nominal expiry date of the DP World Agreement, in contravention of s 417 of the Fair Work Act 2009 (Cth).

6.    The Second Respondent organised industrial action at Port Botany in New South Wales between 10.00 pm on 18 December 2012 and 6.00 am on 19 December 2012, before the nominal expiry date of the DP World Agreement, in contravention of s 417 of the Fair Work Act 2009 (Cth).

7.    The Third Respondent organised industrial action at Port Botany in New South Wales between 10.30 am and 2.00 pm on 18 December 2012, before the nominal expiry date of the DP World Agreement, in contravention of s 417 of the Fair Work Act 2009 (Cth).

8.    The Third Respondent organised industrial action at Port Botany in New South Wales between 2.00 pm and 10.00 pm on 18 December 2012, before the nominal expiry date of the DP World Agreement, in contravention of s 417 of the Fair Work Act 2009 (Cth).

9.    The Third Respondent organised industrial action at Port Botany in New South Wales between 10.00 pm on 18 December 2012 and 6.00 am on 19 December 2012, before the nominal expiry date of the DP World Agreement, in contravention of s 417 of the Fair Work Act 2009 (Cth).

AND THE COURT ORDERS THAT:

1.    A pecuniary penalty of $30,000 is imposed on the First Respondent pursuant to s 546 of the Fair Work Act 2009 (Cth) in respect of the three contraventions referred to in the declarations made in paragraphs 1 to 3 above.

2.    A pecuniary penalty of $8,000 is imposed on the Second Respondent pursuant to s 546 of the Fair Work Act 2009 (Cth) in respect of the three contraventions referred to in the declarations made in paragraphs 4 to 6 above.

3.    A pecuniary penalty of $3,000 is imposed on the Third Respondent pursuant to s 546 of the Fair Work Act 2009 (Cth) in respect of the three contraventions referred to in the declarations made in paragraphs 7 to 9 above.

4.    The above penalties are to be paid to the Applicant in accordance with s 546(3) of the Fair Work Act 2009 (Cth) within 30 days of the date of this order.

5.    The proceeding is dismissed.

6.    There is no order as to costs.

Associate:

Dated:    6 June 2014