FEDERAL COURT OF AUSTRALIA

Director of the Fair Work Building Industry Inspectorate v Cartledge

[2014] FCA 1047

1.    THE COURT DECLARES THAT:

(a)    The first respondent Aaron Cartledge contravened s 500 of the Fair Work Act 2009 (Cth) Act (FW Act) by reason of intentionally hindering and obstructing site managers of Hansen Yuncken Pty Ltd (Hansen Yuncken) while seeking to exercise rights in accordance with Part 3-4 of the FW Act on 20 March 2014 at the construction project known as the “50 Flinders Street” project (the Project).

(b)    The second respondent Jim O’Connor contravened s 500 of the FW Act by reason of acting in an improper manner while seeking to exercise rights in accordance with Part 3-4 of the FW Act on 19 March 2014 at the Project.

(c)    The second respondent O’Connor contravened s 500 of the FW Act by reason of intentionally hindering and obstructing site managers of Hansen Yuncken while seeking to exercise rights in accordance with Part 3-4 of the FW Act on 20 March 2014 at the Project.

(d)    The third respondent Brendan Pitt contravened s 500 of the FW Act by reason of acting in an improper manner while seeking to exercise rights in accordance with Part 3-4 of the FW Act on 19 March 2014 at the Project.

(e)    The third respondent Pitt contravened s 500 of the FW Act by reason of intentionally hindering and obstructing site managers of Hansen Yuncken while seeking to exercise rights in accordance with Part 3-4 of the FW Act on 20 March 2014 at the Project.

(f)    The fourth respondent David Bolton has contravened s 500 of the FW Act by reason of intentionally hindering and obstructing site managers of Hansen Yuncken while seeking to exercise rights in accordance with Part 3-4 of the FW Act on 20 March 2014 at the Project.

(g)    The fifth respondent Luke Stephenson contravened s 500 of the FW Act by reason of intentionally hindering and obstructing a site manager of Hansen Yuncken while seeking to exercise rights in accordance with Part 3-4 of the FW Act on 20 March 2014 at the Project.

(h)    By reason of s 793 of the FW Act, the sixth respondent the Construction, Forestry, Mining and Energy Union (CFMEU) is taken to have contravened s 500 of the FW Act by the conduct of its officers constituting their respective contraventions in paras (a) to (g) hereof.

2.    THE COURT ORDERS THAT:

Pursuant to s 545(2)(a) of the FW Act that the first respondent Cartledge, the second respondent O’Connor, the third respondent Pitt, the fourth respondent Bolton, and the fifth respondent Stephenson (individual respondents) and the sixth respondent, the CFMEU by the conduct of the individual respondents and/or any of its other organisers employed in its Construction and General Division, South Australian Divisional Branch, be restrained from attending the Project, or the project for the construction of the New Royal Adelaide Hospital in which Hansen Yuncken is engaged as a head contractor, unless they are lawfully exercising or lawfully seeking to exercise rights in accordance with Pt 3-4 of the FW Act.

3.    THE COURT FURTHER ORDERS THAT:

(a)    The first respondent Cartledge pay a pecuniary penalty of $3000 for the contravention of s 500 of the FW Act referred to in Order 1(a) hereof.

(b)    The second respondent O’Connor pay a pecuniary penalty of $1500 for the contravention of s 500 of the FW Act referred to in Order 1(b) hereof.

(c)    The second respondent O’Connor pay a pecuniary penalty of $4500 for the contravention of s 500 of the FW Act referred to in Order 1(c) hereof.

(d)    The third respondent Pitt pay a pecuniary penalty of $3000 for the contravention of s 500 of the FW Act referred to in Order 1(d) hereof.

(e)    The third respondent Pitt pay a pecuniary penalty of $6000 for the contravention of s 500 of the FW Act referred to in Order 1(e) hereof.

(f)    The fourth respondent Bolton pay a pecuniary penalty of $4000 for the contravention of s 500 of the FW Act referred to in Order 1(f) hereof.

(g)    The fifth respondent Stephenson pay a pecuniary penalty of $600 for the contravention of s 500 of the FW Act referred to in Order 1(g) hereof.

(h)    The sixth respondent the CFMEU pay:

(i)    a pecuniary penalty of $30,000 for the conduct of the second respondent O’Connor and the third respondent Pitt in the contraventions of s 500 of the FW Act referred to in Orders 1(b) and (d) hereof; and

(ii)    a pecuniary penalty of $100,000 for the conduct of the respondents Cartledge, O’Connor, Pitt, Bolton and Stephenson in the contraventions of s 500 of the FW Act referred to in Orders 1(a), (c), (e), (f) and (g) hereof.

4.    Pursuant to s 546(3) of the FW Act, the pecuniary penalties referred to in Order 3 of these Declarations and Orders be paid to the Commonwealth of Australia.

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

REASONS FOR JUDGMENT

INTRODUCTION

1    This application concerns the conduct of five officers of the Construction, Forestry, Mining and Energy Union (CFMEU) and the CFMEU at a building construction site at 50 Flinders Street, Adelaide on 19 and 20 March 2014.

2    The Director of the Fair Work Building Industry Inspectorate (the Director) is a statutory appointee of the Commonwealth appointed by the Minister for Employment and Workplace Relations by written instrument pursuant to s 15(1) of the Fair Work (Building Industry) Act 2012 (the FW(BI) Act). It is accepted that the Director has the standing and authority to bring the application.

3    To cover the matters of formal proof, I note also that it is accepted that the CFMEU is an organisation of employees registered under the Fair Work (Registered Organisations) Act 2009 (Cth) (FW(RO) Act) and by reason of being so registered, a body corporate by reason of s 27 of the FW(RO) Act. It is capable of being sued in its registered name. It is also an “industrial association” within the meaning of that term in s 12 of the Fair Work Act 2009 (Cth) (FW Act) whose membership rules allow membership by persons whose employment consists of or includes building work. Finally, in a formal sense, it is a “building association” and a “building industry participant” within the meaning of s 4(1) of the FW(BI) Act.

4    The Director alleges that the CFMEU and its five officers who are also respondents variously contravened s 500 of the FW Act on those dates at the construction project known as the “50 Flinders Street” project (the Project) in Adelaide. Each of the individual respondents were (and still are, other than one) officials of the CFMEU. The purpose of the respondents’ attendance at the Project on those dates concerned a demand that a subcontractor to the Project, Mitcon Formwork Pty Ltd (Mitcon) replace casual employees with full time employees. The Project head contractor is Hansen Yuncken Pty Ltd (Hansen Yuncken).

5    The allegations were contested by all respondents and the application was listed for hearing commencing on 1 September 2014. Directions were given to ensure the hearing proceeded efficiently.

6    Apparently as a result of discussions between the Director and the respondents, or their representatives, the issue of liability for the alleged contraventions became moot. On 29 August 2014, a Statement of Agreed Facts and Admissions was filed. The alleged contraventions were admitted.

7    Consequently, the application proceeded as a hearing on the appropriate relief for the admitted contraventions.

8    The recital of the relevant facts is therefore taken largely from the Statement of Agreed Facts and Admissions. As noted below, prior to 29 August 2014, substantial material had been filed for the purpose of the anticipated contested liability hearing. That material provides a clear foundation for the Statement of Agreed Facts and Admissions.

9    For the reasons which appear below, the appropriate orders having regard to the facts and in the light of the helpful and focused submissions of counsel for the Director and for the respondents, are as the declaratory and injunctive orders proposed by the parties. The issue as to the appropriate pecuniary penalties remained contentious. The orders I propose to make in that regard are set out in [97] below.

THE FACTS CONCERNING THE CONTRAVENTIONS

10    Each of the individual respondents was at material times an employee of the CFMEU’s Construction and General Division and an officer and agent of the CFMEU for the purposes of s 793 of the FW Act. In relation to the conduct of each of them, each was acting in his capacity, and within the scope of his authority as an employee and officer of the CFMEU. Each was also a permit holder within the meaning of that term in s 12 of the FW Act.

11    Cartledge is and was the Secretary of that Division of the South Australian Divisional Branch of the CFMEU. Each of O’Connor, Bolton and Stephenson were organisers within that Branch, and other than Stephenson they remain in those positions. Pitt is the national organiser of the Construction and General Division of the CFMEU.

12    Hansen Yuncken was at all relevant times the head contractor responsible for the Project and the New Royal Adelaide Hospital Project (NRAH). It engaged subcontractors at the Project and NRAH, including Mitcon, who employed employees to work on the Project and the NRAH (Mitcon employees). At all relevant times, the Mitcon employees were eligible to be members of the CFMEU. It is also appropriate to record that, at all relevant times, the Project was a “premises” for the purposes of Pt 3-4 of the FW Act, and Hansen Yuncken was the “occupier of the premises” for the purposes of Pt 3-4 of the FW Act.

13    Another formal admission is that at all relevant times, the building and construction work performed in connection with the Project constituted building work within the meaning of that term in s 5 of the FW(BI) Act.

(a)    The morning of 19 March 2014

14    At or about 8:03 am on 19 March 2014, Cartledge telephoned Francesco Pietrobon, the General Manager of Mitcon, and told him that he wanted to talk to him about enterprise agreement negotiations with the CFMEU and an issue relating to Mitcon laying off workers at NRAH. Pietrobon said words to the effect: “At the moment, Mitcon has no work for those workers and I am making every effort to get some work for them.” The matter did not rest there.

15    At or about 10:20 am on 19 March 2014, Pitt and O’Connor attended outside the Project and then entered it by walking through the gate near the loading bay at Gate 1. There is no direct evidence about what they did on the Project, although it can be inferred from the following conversation.

16    After Pitt and O’Connor left the Project on 19 March 2014, they and Pietrobon had a conversation in words to the effect of:

Pitt:    Why are you laying off our members who are permanent and you have so many casuals here?

Pietrobon:    How did you assess we have casuals?

Pitt:    We asked the casuals for a show of hands in the smoko shed and we counted them … You can’t lay off our full time members. You have to get rid of the casuals first, last on first off.

Pietrobon:    You’ve got members who are casual. What about them?

O’Connor:    Why have you got so many casuals on the site? Why can’t you move the full timers onto the job?

Pietrobon:    That is discrimination against casuals.

Pitt:    If you don’t do anything about it we will take action … We are going to be back at lunchtime and we want a result.

17    After Pitt and O’Connor left the Project on 19 March 2014, Brenton Knowles, Hansen Yuncken’s Senior Site Manager at the Project, telephoned Cartledge and left a message on his mobile telephone in words to the effect of: “If you are looking to come tomorrow, you need to put in 24 hours’ notice” (19 March Voice Message). Knowles also telephoned O’Connor and repeated the 19 March Voice Message, to which O’Connor said words to the effect of: “I’m not coming tomorrow. I’ll give you 24 hours’ notice …”. Following this, Knowles sent a text message to O’Connor which said: “Just to clarify I meant twenty four hours written notice”.

18    It is accepted that when Pitt and O’Connor entered the Project on 19 March 2014:

(1)    they had not provided Hansen Yuncken with an entry notice pursuant to s 487 of the FW Act; and

(2)    they did so each in their capacity as a permit holder exercising, or seeking to exercise, rights of entry in accordance with Pt 3-4 of the FW Act.

(b)    Morning of 20 March 2014

19    Sometime shortly before 6:00 am on 20 March 2014, Bolton, Pitt, O’Connor and Stephenson attended outside the Project.

20    After arriving outside the Project, Bolton, Pitt and O’Connor had a conversation with Knowles in words to the effect of (First 20 March Conversation):

Knowles:        What’s going on?

Pitt:    We’re here to talk to the Mitcon guys. It’s not a Hansen Yuncken issue.

Knowles:    You have not issued notice in writing 24 hours’ prior. If you are thinking of coming on site, I will be asking you to leave. None of Bolton, Pitt or O’Connor responded to this comment.

Knowles:        Can I see your permits?

21    When Knowles asked Bolton, Pitt, O’Connor and Stephenson to produce their permits for inspection, each of them said “No”. About five minutes after the First 20 March Conversation, Stephenson approached Knowles and when Knowles again asked Stephenson to produce his entry permit he did so.

22    At or about 6:35 am on 20 March 2014, Bolton, Pitt, O’Connor and Stephenson each walked through the access gate to the Project located at Gawler Place (Access Gate) and walked into the lunch room shed where approximately 40 Mitcon employees were located (Lunch Room).

23    When they walked into the Lunch Room, Knowles said words to the effect of: “Please leave”. None of them responded to that request. They remained in the Lunch Room with the Mitcon employees until they all walked out of the Lunch Room at about 6:55 am on 20 March 2014.

24    Pitt and Knowles then had a short discussion in words to the effect of:

Pitt:            Can you induct the NRAH workers?

Knowles:    No. I haven’t been advised by Mitcon that I should induct anyone today.

25    Then, at about 7:00 am on 20 March 2014, Bolton, Pitt, O’Connor and Stephenson walked outside the Access Gate.

26    At or about 8:00 am on 20 March 2014, Bolton asked Knowles if he could use the toilet which was located on the Project. Knowles said: “I’d prefer you didn’t”. After this was said by Knowles, Bolton then walked through the Access Gate and used the toilet on the Project.

27    Between about 7:00 am and 8:16 am, Bolton, Pitt, O’Connor and Stephenson stood about three metres outside the Access Gate to the Project. At 8:16 am, they each again walked through the Access Gate and walked along the west side walkway inside the Project perimeter and then exited the Project at the loading bay entry gate at the corner of Flinders Street and Gawler Place (Gate One) at 8:17 am.

28    When Bolton, Pitt and O’Connor entered the Project on the morning of 20 March 2014 they:

(a)    had not provided Hansen Yuncken with an entry notice pursuant to s 487 of the FW Act;

(b)    did not produce their authority documents on request as required by s 489 of the FW Act; and

(c)    did so in their capacity as permit holders exercising, or seeking to exercise, rights of entry in accordance with Pt 3-4 of the FW Act.

29    When Stephenson entered the Project on the morning of 20 March 2014 he:

(a)    had not provided Hansen Yuncken with an entry notice pursuant to s 487 of the FW Act; and

(b)    did so in his capacity as a permit holder exercising, or seeking to exercise, rights of entry in accordance with Pt 3-4 of the FW Act.

(c)    Afternoon of 20 March 2014

30    At or about 12:55 pm on 20 March 2014, Pitt, Bolton, O’Connor and Cartledge attended outside the Project and stood about two metres outside the Project access gate located at the corner of Santos Lane and Flinders Street (Gate Two). They then walked to a position outside the Access Gate.

31    Cartledge and Lino Nuzzo, Site Manager, had a conversation outside the Access Gate in words to the effect of:

Nuzzo:            What is the reason for your presence?

Cartledge:    Paul Mitolo telling full-time carpenter employees from NRAH to take annual leave due to no work for them. At the same time, taking on part-time labourers and having them working on your site here.

Nuzzo:    You’re not welcome and you’re not allowed on site to talk to Mitcon employees on this site due to not giving us any entry notice 24 hours prior as required for entry to site.

Cartledge:        Look guys, we are going on the site to talk to our members.

Nuzzo:            No, Aaron.

Cartledge:    You have to do what you have to do and we are going to do what we want to do.

Nuzzo remained standing in front of the Access Gate with his back to the door after Cartledge walked through it.

32    As Cartledge entered the Project, Pitt walked towards Nuzzo and they had a conversation in words to the effect of:

Pitt:            Get out of the way as the remainder of us are going in.

Nuzzo:            No, you are not going in. No entry notice, not entry [sic].

33    Nuzzo and Bolton then had a short conversation in words to the effect of:

Bolton:    We are going in under a WHS contravention and you cannot stop us from entering under the Act.

Nuzzo:    Tell me what exactly the WHS issue is and where as we don’t have any WHS issues on site.

Bolton:            You can’t stop us.

Nuzzo:            You are not entering.

34    After Nuzzo’s discussion with Bolton, Pitt said to Nuzzo words to the effect of: “You’re making a big mistake for stopping our entry. There will be trouble.”

35    At or about 1:10 pm on 20 March 2014, Pitt grabbed the Access Gate with his hands and attempted to pull it open. In an attempt to stop Pitt from doing this, Nuzzo grabbed Pitt’s arm and tried to push the Access Gate closed to stop Pitt entering it. As Nuzzo grabbed Pitt’s arm, O’Connor then approached Nuzzo, and became involved in the physical altercation, forceably pulling Nuzzo away from the Access Gate. In response, Nuzzo pulled Pitt by the arm with his right hand and continued to push the Access Gate closed with his other hand.

36    When Nuzzo was then told by Knowles to move away from the Access Gate, Pitt said to Knowles and Nuzzo words to the effect of, “You’ve just made things a hell of a lot harder for you now”.

37    After Pitt’s statement, each of Pitt, Bolton and O’Connor walked through the Access Gate and into the Lunch Room on the Project where Cartledge and Mitcon employees were located. Knowles then said to Cartledge, O’Connor, Pitt and Bolton: “Please leave”. No response was given to this statement and they remained in the Lunch Room.

38    When Cartledge, O’Connor, Pitt and Bolton entered the Project on the afternoon of 20 March 2014 they:

(a)    had not provided Hansen Yuncken with an entry notice pursuant to s 487 of the FW Act; and

(b)    did so in their capacity as permit holders exercising, or seeking to exercise, rights of entry in accordance with Pt 3-4 of the FW Act.

THE CONTRAVENTIONS

39    It is helpful to note a little about the relevant provisions in the FW Act.

40    Part 3-4 deals with rights of entry.

41    Within that part, Div 2 deals with entry rights under the FW Act and Subdiv B containing s 484 provides for entry to hold discussions. Subdiv C deals with requirements for permit holders. In particular in Subdiv C, s 487 in the present circumstances required a permit holder to give to the occupier of the Project an entry notice (as specified in s 518) at least 24 hours before the entry. Section 489 in practical terms in the present circumstances required a permit holder who has entered building premises to produce that person’s authority (in this case the entry permit) for inspection upon the request of the occupier of the Project.

42    Division 4 then contains the prohibitions. Section 500 provides:

A permit holder exercising, or seeking to exercise, rights in accordance with this Part must not intentionally hinder or obstruct any person, or otherwise act in an improper manner:

Note 1:    This section is a civil remedy provision (see Part 4-1).

Note 2:    A permit holder, or the organisation to which the permit holder belongs, may also be subject to an order by the FWC under section 508 if rights under this Part are misused.

Note 3.    A person must not intentionally hinder or obstruct a permit holder, exercising rights under this Part (see section 502).

43    Section 546 addresses pecuniary penalty orders. Section 546(2) provides for the maximum number of penalty units for an individual and a body corporate, by reference to column 4 in the table in s 539(2). Section 539 prescribes the civil remedy provisions, and in the table in s 539(2) item 25 deals with Part 3-4 – Rights of Entry. As noted, the relevant prohibition is s 500 and it prescribes the maximum penalty units as 60 (and therefore as 300 for a body corporate). The contravention of ss 487 or 489 is not identified as a civil remedy provision, so such conduct exposes the contravener to a pecuniary penalty to the extent that such conduct also contravenes s 500.

44    It is accepted that:

(a)    by reason of his conduct on the afternoon of 20 March 2014 as noted above, Cartledge intentionally hindered and obstructed Knowles and Nuzzo while seeking to exercise rights in accordance with Pt 3-4 of the FW Act;

(b)    by reason of his conduct on 19 March 2014 as noted above, O’Connor acted in an improper manner while seeking to exercise rights in accordance with Part 3-4 of the FW Act;

(c)    by reason of his conduct in the morning and afternoon of 20 March 2014 as noted above, O’Connor intentionally hindered and obstructed Knowles and Nuzzo while seeking to exercise rights in accordance with Pt 3-4 of the FW Act;

(d)    by reason of his conduct on 19 March 2014 as set out above, Pitt acted in an improper manner while seeking to exercise rights in accordance with Pt 3-4 of the FW Act;

(e)    by reason of his conduct in the morning and afternoon of 20 March 2014 as set out above, Pitt intentionally hindered and obstructed Knowles and Nuzzo while seeking to exercise rights in accordance with Part 3-4 of the FW Act;

(f)    by reason of his conduct in the morning and afternoon of 20 March 2014 as set out above, Bolton intentionally hindered and obstructed Knowles and Nuzzo while seeking to exercise rights in accordance with Pt 3-4 of the FW Act; and

(g)    by reason of his conduct in the morning of 20 March 2014 as set out above, Stephenson intentionally hindered and obstructed Knowles while seeking to exercise rights in accordance with Pt 3-4 of the FW Act.

45    It is also accepted that, by reason of the facts and matters already referred to, by the operation of s 793(1)(a) of the FW Act, all of the conduct of Cartledge constituting Cartledge’s contravention is taken to have been engaged in also by the CFMEU, so that the CFMEU contravened s 500 of the FW Act by reason of Cartledge’s contravention.

46    On the same basis, it is accepted that all of the conduct of O’Connor constituting O’Connor’s contraventions is taken to have been engaged in also by the CFMEU, so that the CFMEU contravened s 500 of the FW Act by reason of each of O’Connor’s two contraventions.

47    Without repeating the reasoning, on the same basis it is accepted that the CFMEU contravened s 500 of the FW Act by reason of each of Pitt’s two contraventions; and it contravened s 500 of the FW Act by reason of Bolton’s contravention; and it contravened s 500 of the FW Act by reason of Stephenson’s contravention.

48    By reason of those contraventions, it is accepted that appropriate declaratory orders should be made in respect of each of the contraventions. The parties also agree to an order being made pursuant to s 545(2)(a) of the FW Act that Cartledge, O’Connor, Pitt, Bolton, Stephenson (individual respondents) and the CFMEU by the conduct of the individual respondents and/or any of the other organisers employed in its Construction and General Division, South Australian Divisional Branch, be restrained from attending the Project, or the project for the construction of the NRAH in which Hansen Yuncken is engaged as a head contractor, unless they are lawfully exercising or lawfully seeking to exercise rights in accordance with Part 3-4 of the FW Act.

49    As noted, the appropriate pecuniary penalties for the contraventions are contentious.

GENERAL PRINCIPLES

50    The general principles for determining the appropriate penalties in a case such as this are well established.

51    There are at least three purposes for imposing penalties for breaches of industrial law: punishment – which must be proportionate to the offence and in accordance with prevailing standards of punishment; deterrence – both specific (personal) and general; and rehabilitation: see Ponzio v B&P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at [93]. Ultimately, as Barker J said in Australian Building and Construction Commission v Construction, Forestry, Mining and Energy Union (No 2) [2010] FCA 977 at [4] (CFMEU (No 2)), the overriding principle is to ensure that the penalty is proportionate to the gravity of the contravening conduct.

52    By a process of “instinctive synthesis”: see Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 (Australian Ophthalmic Supplies) at [27] and [55], a court is required to 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) 207 CLR 584 at [74]-[76]; Markarian v R (2005) 228 CLR 357 at [37]-[39]. Proportionality and consistency commonly operate as a final check on the penalty: see Australian Ophthalmic Supplies at [54].

53    Merkel J said in Finance Sector Union of Australia v Commonwealth Bank of Australia (2005) 224 ALR 467 at [72]:

It may be that breaches by unions and employers of industrial legislation from time to time have been accepted as part of the give and take of industrial disputation. However, in recent years industrial legislation has increasingly codified and prescribed what is acceptable, and what is unacceptable, industrial conduct. The legislature has, over time, also moved to increase the penalties that may be imposed in respect of unlawful conduct. In my view, any light-handed approach that might have been taken in the past to be serious, wilful and ongoing breaches of the industrial laws should no longer be applicable. As is apparent from the penalties that I have imposed, I have not accepted that such an approach, which was urged by CBA (which contended that either no penalty or only a nominal penalty was appropriate), is applicable in the present case.

His Honour’s comments were endorsed by the Full Court in Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357 at [62] (Plancor).

54    I also note that, although rehabilitation is said to be one of the purposes for imposing penalties, it does not appear to be treated as a significant factor by the Courts in this context. Hence, in Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2014] FCA 160 (Director v CFMEU) at [32], White J said rehabilitation may have no part in fixing the pecuniary penalty for a civil contravention, citing Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 at 51,152. It is fair to say that neither the submissions of the Director nor the submissions of the respondents invited the Court to place any real significance on rehabilitation in the present matter. I have simply had general regard to it.

55    It is also apparent that the courts now tend to regard more seriously contraventions of industrial laws than may have been the case in the past: Director v CFMEU at [32] and Finance Sector Union of Australia v Commonwealth Bank of Australia (2005) 224 ALR 467 at [72]; cited with approval by a Full Court of the Federal Court in Plancor at [62].

56    Courts exercising industrial jurisdiction have identified a range of factors that may be relevant to the circumstances of a particular case when assessing the appropriate penalty: Plancor at [57]. However, the use of checklists is only a useful tool which should not give rise to the risk of transforming the process of instinctive synthesis into the application of a rigid catalogue of matters for attention. Hence, the Court observed in Australian Ophthalmic Supplies at [89]-[91]:

At the end of the day the task of the court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligation.

57    Bearing in mind the warning against the routine application of a checklist of matters, the authorities have recognised the following factors as potentially relevant to the imposition of a penalty in an industrial regulatory context (as noted in Plancor at [57]):

(a)    the nature and extent of the conduct which led to the breaches;

(b)    the circumstances in which the relevant conduct took place;

(c)    the nature and extent of any loss or damage sustained as a result of the breaches;

(d)    previous contraventions of industrial legislation;

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

(f)    the size of the business enterprise involved;

(g)    whether or not the breaches were deliberate;

(h)    whether senior management was involved in the breaches;

(i)    whether the party committing the breach had exhibited contrition;

(j)    whether the party committing the breach had taken corrective action;

(k)    whether the party committing the breach had co-operated with the enforcement authorities; and

(l)    the need for specific and general deterrence.

That is not an exhaustive list, and cannot be. What is relevant depends on the particular circumstances of each case. Some only are relevant to the present matter, as identified in the submissions.

58    The respondents also did not dispute that another relevant, but not determinative, consideration is the view of the regulator (in this case, the Director), as a specialist body as to the significance of the contraventions: Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at [51], [53].

59    Finally, in terms of the applicable principles as relevant on the submissions, when imposing penalties for multiple contraventions, the Court must take into account the totality principle: Australian Ophthalmic Supplies at [23]. The totality principle requires that, after the Court has fixed a penalty appropriate for each individual contravention, the Court consider whether the total of those penalties is appropriate for the total contravening conduct: Australian Ophthalmic Supplies at [96]-[97].

CONSIDERATION

60    Obviously, each respondent has a different degree of culpability.

61    Cartledge entered the Project on one occasion in the afternoon of 20 March 2014. There he intentionally hindered and obstructed Knowles, Hansen Yuncken’s Senior Site Manager, and Nuzzo, Hansen Yuncken’s Site Manager by deliberately entering the Project, knowing that he was obliged to give 24 hours prior notice, and in the face of being told at the proposed entry by Knowles and Nuzzo not to enter the Project. He then refused to leave the Project after being required by Knowles on two separate occasions to do so. As recorded, he did not provide an entry notice as required by s 487 of the FW Act, and so did not comply with his obligations under Part 3-4 of the FW Act.

62    Cartledge, as the Secretary of the CFMEU’s Construction and General Division, South Australian Divisional Branch, is the most senior CFMEU officer in South Australia. He was aware that what he was doing did not comply with the law. It is agreed that he said, knowing the legal position: “we are going to do what we want to do”. He was, in the afternoon of 20 March 2014, taking a front position in relation to others in their contraventions.

63    I take into account that Cartledge has worked for the CFMEU for some 15 years, and he has not previously contravened s 500 of the FW Act, or any relevant industrial legislation. Like the other respondents, I give him credit for the admissions of the facts and the contraventions as recorded as indicative of a willingness to facilitate the course of justice. Clearly, those admissions do not attract as much credit as might have been the case. They were made only after the Director and then the respondents had filed a significant volume of affidavit material. In the respondents’ material was an attempt to criticise Nuzzo. The Director’s preparation extended to putting on all of the evidence, issuing subpoenas, commencing the preparation of liability submissions and preparing the court book. That obviously incurred considerable expense. However, there were doubtless discussions between the parties before the Statement of Agreed Facts and Admissions was arrived at. There has also been a considerable saving of the time and expense of a trial, both for the parties and for the Court.

64    It is, in my view, significant that neither Cartledge nor any other respondent has expressed any contrition, or taken any formal corrective conduct, in relation to conduct of the type constituting their contraventions. Counsel for the respondents acknowledged that the contravening conduct was undertaken by the conscious decision of each of them, knowing that there was a “flagrant” breach of the law. The explanation offered for that conduct is simply that there was a genuine interest in protecting the full-time Mitcon employees. That does not explain why there was any need to breach the provisions referred to, particularly on 20 March 2014 after the CFMEU had been formally notified of the need to give notice.

65    I have also taken into account that no quantifiable economic loss or damage was suffered by Hansen Yuncken by any of the contraventions. It is true that both Knowles and Nuzzo were required to monitor, and deal with, the individual respondents but that would largely have applied if the entry on each day was on notice.

66    I have also taken into account that, whilst the contraventions were deliberate, they did not occur as part of a pre-meditated industrial strategy by the CFMEU, on some orchestrated, concerted or deliberate campaign. As I have noted, they occurred in the context of a genuine concern about Mitcon not employing full-time employees at the expense of casual employees, but that context does not provide any real explanation for the deliberate contraventions. I do not accept that the contraventions were “clumsy”, but I accept they were not directed towards any ulterior or improper outcomes beyond demonstrating the ability to ignore the entry requirements prescribed.

67    Those comments apply to Cartledge and to each of the respondents. I shall not repeat them in detail in relation to each of the respondents. I revert to their individual conduct and circumstances.

68    O’Connor’s conduct involves two contraventions on 19 and 20 March 2014, the latter involving conduct on separate occasions on that day.

69    The first O’Connor contravention on 19 March 2014 is described in terms of acting in an improper manner, whereas the contraventions of the individual respondents on 20 March 2014 are described as intentionally hindering or obstructing Knowles and/or Nuzzo. The maximum number of penalty units for a contravention of s 500 does not differ according to which particular part of s 500 has been contravened. However, clearly the course of conduct on 20 March 2014 was more confronting and more sustained. That difference has been taken into account in determining the appropriate penalties, both in O’Connor’s case and in Pitt’s case.

70    The detail of those contraventions is recorded above. I will not repeat it. As in the case of Cartledge, it was engaged in knowing that it was wrong, and on 20 March 2014 after he had been specifically reminded of the requirement to give notice of entry, and after entry had been specifically refused by Knowles.

71    It is necessary to comment further on the confrontation with Nuzzo on the afternoon of 20 March 2014. Nuzzo was entitled to, and did, try to prevent Pitt from entering the Project. Pitt nevertheless tried to push past Nuzzo to enter the site, and O’Connor physically tried to pull Nuzzo away from the gate so Pitt could enter. Both Pitt and O’Connor were prepared to use force to gain entry, when they knew they were not entitled to do so. It may be that, as counsel for Pitt and O’Connor said, the confrontation occurred in the heat of the moment. I accept that the forced entry, enabled when Knowles took the heat out of the confrontation when he told Nuzzo to step away from the gate, occurred without premeditation. It occurred because Nuzzo attempted to do what he was entitled to do: to prevent the proposed entry. It demonstrates a firm disregard for the entry provisions imposed by the legislation, and in the absence of explanation, that level of disregard is a quite significant one. The physical exchange was brief, and in the event inconsequential, but that appears to have been because of Knowles’ instruction to Nuzzo.

72    I do not accept the submission on behalf of Pitt and O’Connor, and the CFMEU, that Nuzzo’s actions “were somewhat contributory to the altercation”. The situation was created by the deliberate decision of Pitt and O’Connor (and Cartledge and Bolton) that afternoon to pursue entry to the site in breach of the entry requirements, and then the altercation occurred because Pitt and O’Connor were prepared to further that decision by forcefully trying to prevent Nuzzo from trying to stop them from having such access.

73    I take into account that O’Connor, like all the individual respondents other than Pitt, has not previously contravened s 500 of the FW Act or any relevant industrial legislation. The other matters referred to above in relation to Cartledge apply also to O’Connor, save that Cartledge is of course the senior to O’Connor. On the other hand, O’Connor has acknowledged two contraventions and the second has the exacerbating of his role in the altercation on 20 March 2014. It is easy to conceive of far graver forceful conduct than that which took place, as counsel submitted; but that does not mean that the deliberate contravention accompanied by force to achieve it is not a serious one.

74    It is also appropriate to bear in mind, when fixing the total penalty imposed on both O’Connor and Pitt, that their contraventions occurred over two consecutive days and were not prolonged or drawn out. In a general sense can be described as reflecting a course of conduct, proximate in time and related to the same objective of getting entry in breach of the law but for an identifiable and understandable industrial purpose.

75    Pitt also has admitted two contraventions, on 19 and 20 March 2014, as noted earlier in these reasons.

76    As in the case of Cartledge, his contraventions are of particular concern because he is the national organiser of the CFMEU’s Construction and General Division, and so he is a senior officer of the CFMEU.

77    His contraventions also were deliberate, and indicate an intention not to comply with the applicable entry provisions. His contravention on 20 March 2014 includes a refusal to produce an entry permit when requested on the morning of that date, a refusal to leave the Project when requested on the morning of that date, and his conduct on the afternoon of that date including his role in the altercation with Nuzzo discussed above when considering O’Connor’s position. He initiated that altercation by telling Nuzzo, who was attempting to block his entrance, to “get out of the way” as the “others are going in” (after Cartledge had wrongfully entered the Project), by the threat that Nuzzo was making a big mistake and that there would be trouble, by attempting to force entry until Nuzzo stepped aside, and then by telling Nuzzo his lawful attempt to block his entry had “just made things a hell of a lot harder” for Nuzzo. He then again refused to leave the Project when requested to do so by Knowles.

78    That behaviour demonstrates that he not only did not care that he was breaking the entry rules, but that he was so indifferent to complying with them as to force entry and to make the threats to Nuzzo set out above.

79    In Pitt’s case, he has previously been found to have contravened industrial legislation: Director of the Fair Work Building Inspectorate v Construction, Forestry, Mining and Energy Union [2013] FCA 515, namely engaging in coercive conduct contrary to s 43 of the Building and Construction Industry Improvement Act 2005 (Cth). He cannot therefore get the credit which is given to the other individual respondents for having no relevant prior contraventions of such legislation.

80    In other respects, my comments in relation to Cartledge concerning the factors applicable to the determination of the appropriate penalty for each of Pitt’s contraventions apply.

81    Bolton’s contravention occurred on 20 March 2014 in the circumstances referred to above. He was not involved in the attempted forceful entry and the related altercation on that afternoon.

82    However, I accept that one matter relevant to the appropriate penalty in his case is his assertion that he (or they) were proposing to enter the site in relation to a safety matter. If that were correct, no notice of entry is required. It was accepted on his behalf that there was no safety matter of concern to him at the time. For obvious reasons, the particular right of entry without notice in the case of a safety concern is not one which should be misused.

83    In other respects, to the extent that they are applicable to Bolton, my observations about matters concerning Cartledge apply also to Bolton. I note he was not a senior officer of the CFMEU. I note that he has no prior instances of a contravention of relevant industrial legislation. Like the other individual respondents, there is no expression of contrition.

84    Stephenson’s contravention occurred only on the morning of 20 March 2014. He entered the Project without giving proper notice of entry. Unlike the others, although he refused to leave the Project when requested to do so by Knowles, he did show his permit to Knowles shortly after entering the Project. I infer from that that, unlike the others, he was less assertive about the determination to secure entry without complying with the relevant provisions of the FW Act.

85    He has no relevant recorded contravention of industrial legislation. Apart from the absence of any contrition, each of the factors which might go to reducing the applicable penalty apply to him. He was not a senior officer of the CFMEU. He no longer works for the CFMEU, so the element of personal deterrence in my view is also a little less significant in his case.

86    I accept the Director’s contention that his conduct was the least serious by a considerable margin, and the applicable penalty should be towards the lower end of the scale.

87    The CFMEU is in a different position. It has acknowledged the seven contraventions reflected in the conduct of its officers. The details are set out above. Two of those officers are senior officers: Pitt and Cartledge.

88    It is a large, prominent and influential national union. There is no evidence of any incapacity to pay a significant penalty.

89    Moreover, the CFMEU has a significant record of non-compliance with the provisions of industrial legislation. The table attached to the written submission of the Director lists 105 previous reported decisions involving such contraventions by the CFMEU. In a general sense, they are of relevance to the overall conclusion as to appropriate penalties because they may inform the assessment of the personal deterrence appropriate in respect of these contraventions.

90    However, it is important to bear in mind the correct principles with regard to considering previous conduct relevant to penalty. Barker J in CFMEU (No 2) at [47]-[49], recently explained them:

(1)    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 current contravention: Veen v The Queen (No 2) (1988) 164 CLR 465 (Veen) at [477];

(2)    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: Veen at 477; Stuart-Mahoney v CFMEU [2008] FCA 1426 (Mahoney) at [44]; Temple v Powell (2008) 173 IR 189 (Temple) at [63]-[64];

(3)    a respondent is not to be punished again for prior conduct – prior conduct may diminish leniency by reason of its character, having an upward effect 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;

(4)    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 at 113; Williams v CFMEU (No 2) [2009] FCA 548 (Williams (No 2)) at [26]-[28];

(5)    past conduct cannot operate so as to increase the penalty beyond that which would be appropriate to the conduct in question: Temple at [63];

(6)    contraventions within a different branch of the union are relevant, but are to be given less weight than contraventions within the branch in question: Draffin v CFMEU (2009) 189 IR 145 (Draffin) at [72];

(7)    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: Mahoney at [44].

See also the observations of White J in Director v CFMEU at [47]-[58].

91    It is therefore important only to weigh in the scales when determining penalty in an appropriate way the prior contraventions of the CFMEU. I do not need to add to the debate referred to by White J in that case at [57]-[58]. In this matter the Director and the respondents accepted that regard should be had to all the relevant CFMEU contraventions, but that less regard should be had to them where the South Australian Branch was not the location of the contraventions. I have proceeded on that basis, perhaps pragmatically put forward. That accords with the approach adopted by Gyles J in A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2008] FCA 466 at [13]. So far as I can see, only two of the many CFMEU previous contraventions took place in South Australia.

92    I have remarked upon the fact that each of the individual respondents’ conduct indicates that each (with the exception of Stephenson) simply did not care about complying with the entry provisions. In the case of Pitt and Cartledge, as senior officers of the CFMEU and therefore as demonstrating to the other organisers the attitude of the CFMEU to such requirements, that conduct is egregious.

93    I consider that the CFMEU’s record of contraventions also demonstrates that a particularly persuasive form of personal deterrence against similar conduct in the future is appropriate: cf Temple at [64]; Mahoney at [44].

DETERMINATION OF PENALTIES

94    Section 500 of the FW Act is a civil remedy provision. The maximum penalty available for a contravention of this provision is 300 penalty units for a body corporate and 60 penalty units for an individual: see s 546. The value of a penalty unit is $170: see s 4AA(1) of the Crimes Act 1914 (Cth).

95    Consequently, the maximum penalty for a contravention of s 500 of the FW Act is:

(a)    for each contravention by the CFMEU $51,000; and

(b)    for each contravention by the individual respondents $10,200.

96    I have had regard to the particular matters discussed above in relation to individual respondents and to their particular conduct constituting the various contraventions. I have had regard to the need for penalties that are sufficiently high to send a message to others engaged in matters like the present that the failure to comply with the applicable provisions is significant, and in particular that the sort of forceful behaviour engaged in by Pitt and O’Connor to achieve entry in breach of the applicable provisions will be met with serious consequences. I have had regard to the need for specific deterrence, in the context that each of the respondents simply chose deliberately not to comply with the applicable entry provisions. As I have noted, there are other significant personal factors which operate to inform the appropriate penalty, varying from one individual to the other. In the case of the CFMEU, there is not much to excuse its conduct through its officers. I have referred above to the matters raised in submissions and which I have taken into account. The CFMEU has not identified much particular to it as an entity to mitigate the penalty which is otherwise appropriate.

97    In my view, applying the relevant principles, and taking into account the matters referred to, I impose penalties as follows for the contraventions of s 500 of the FW Act:

(1)    In relation to Cartledge, a penalty of $3000.

(2)    In relation to O’Connor:

(i)    contravention on 19 March 2014, a penalty of $1500;

(ii)    contravention on 20 March 2014, a penalty of $4500.

(3)    In relation to Pitt:

(i)    contravention on 19 March 2014, a penalty of $3000;

(ii)    contravention on 20 March 2014, a penalty of $6000.

(4)    In relation to Bolton, a penalty of $4000.

(5)    In relation to Stephenson, a penalty of $600.

(6)    In relation to the CFMEU:

(i)    two contraventions on 19 March 2014, a penalty of $30,000;

(ii)    five contraventions on 20 March 2014, a penalty of $100,000.

98    In the case of Pitt and O’Connor and the CFMEU, I have separately fixed penalties for their separate contraventions, having regard to the totality principle, those penalties are lesser than might otherwise have been the case. In addition, the CFMEU penalties have been reduced not just on the totality principle but as I accept that the conduct of the CFMEU through its senior officers Cartledge and Pitt is more significant and in the overall picture the conduct of O’Connor, Bolton and Stephenson (apart from the aggravating elements of the conduct of O’Connor and Bolton) reflects that of organisers following the lead of the more senior officers. The penalties also reflect, in the cases where there are more than one contravention, their close temporal proximity and the common purpose which they served, albeit (as I have said) a purpose that was readily able to be achieved without the contraventions: see eg per Flick J in Darlaston v Parker (No 2) [2010] FCA 1382.

99    It is necessary to note one other aspect of the penalties in relation to the CFMEU. It was common ground that the pecuniary penalties imposed on it should be given as two separate penalties, even though it was accepted that it (through the conduct of its various officers) committed two contraventions on 19 March 2014 and five contraventions on 20 March 2014 [I note the Director’s submission for some reason is based upon four contraventions]. That approach is reflected in the agreement about the maximum applicable pecuniary penalties for its contraventions on each separate day. I have fixed the pecuniary penalties on that basis. They are significantly reduced because, apart from the totality principle, I think its contraventions on each day reflect very much a course of conduct through several of its officers on each day rather than separate unrelated conduct by its several officers on each day. Were it necessary to do so (contrary to the submissions), I would have apportioned the pecuniary penalty for the contraventions on each separate day separately for the conduct of the CFMEU by its several officers, but the total arrived at would have been the same.

100    I order that the penalties should be paid to the Commonwealth: see s 546(3)(a) of the FW Act.

101    The parties agreed that declaratory orders should be made in relation to the contraventions. I agree that that is appropriate. The orders which I make, as proposed by the parties, are declaratory orders that:

102    The Court declares that:

(a)    The first respondent Cartledge has contravened s 500 of the FW Act by reason of intentionally hindering and obstructing site managers of Hansen Yuncken while seeking to exercise rights in accordance with Part 3-4 of the FW Act on 20 March 2014 at the Project.

(b)    The second respondent O’Connor has contravened s 500 of the FW Act by reason of acting in an improper manner while seeking to exercise rights in accordance with Part 3-4 of the FW Act on 19 March 2014 at the Project.

(c)    The second respondent O’Connor has contravened s 500 of the FW Act by reason of intentionally hindering and obstructing site managers of Hansen Yuncken while seeking to exercise rights in accordance with Part 3-4 of the FW Act on 20 March 2014 at the Project.

(d)    The third respondent Pitt has contravened s 500 of the FW Act by reason of acting in an improper manner while seeking to exercise rights in accordance with Part 3-4 of the FW Act on 19 March 2014 at the Project.

(e)    The third respondent Pitt has contravened s 500 of the FW Act by reason of intentionally hindering and obstructing site managers of Hansen Yuncken while seeking to exercise rights in accordance with Part 3-4 of the FW Act on 20 March 2014 at the Project.

(f)    The fourth respondent Bolton has contravened s 500 of the FW Act by reason of intentionally hindering and obstructing site managers of Hansen Yuncken while seeking to exercise rights in accordance with Part 3-4 of the FW Act on 20 March 2014 at the Project.

(g)    The fifth respondent Stephenson has contravened s 500 of the FW Act by reason of intentionally hindering and obstructing a site manager of Hansen Yuncken while seeking to exercise rights in accordance with Part 3-4 of the FW Act on 20 March 2014 at the Project.

(h)    By reason of s 793 of the FW Act, the CFMEU is taken to have contravened s 500 of the FW Act by the conduct of its officers constituting their respective contraventions in paras (a) to (g) hereof.

103    The Court orders pursuant to s 545(2)(a) of the FW Act that Cartledge, O’Connor, Pitt, Bolton, Stephenson (individual respondents) and the CFMEU by the conduct of the individual respondents and/or any of its other organisers employed in its Construction and General Division, South Australian Divisional Branch, be restrained from attending the Project, or the project for the construction of the NRAH in which Hansen Yuncken is engaged as a head contractor, unless they are lawfully exercising or lawfully seeking to exercise rights in accordance with Pt 3-4 of the FW Act.

104    I have referred above to the declaratory orders sought and granted with the consent of the respondents.

105    I have also referred above at [103] to the order under s 545(2)(a) of the FW Act I have made by agreement. It is appropriate that I explain in a little more detail why it is appropriate to have made that order.

106    The claim for an order under s 545(2)(a) is made under s 545(1) of the FW Act. The statutory power to order an injunction under s 545(1) is essentially at large, although the injunction must relate in some way to the contravention that provides for its making. Clearly, this condition is met, and in my view the circumstances otherwise warrant the making of the injunction.

107    The statutory power to grant an injunction to restrain conduct does not depend upon the Court reaching a finding that the respondents intended to engage in conduct of that kind in the immediate or distant future: see United Group Resources Pty Ltd v Calabro (No 7) (2012) 203 FCR 247 (United Group Resources) at [48].

108    The injunctive order is not permanent and only applies until the completion of the Project and the NRAH project.

109    Although the injunction does no more than require the respondents to comply with the law, its granting has the benefit of deterring the respondents from engaging in a contravention of Part 3-4 of the FW Act in the future by attaching to any such contraventions the range of sanctions available for breach of a Court order: see United Group Resources at [52] and [54].

110    I am satisfied that the granting of the injunction is in the public interest, as it requires compliance with a statutory regime that the respondents have shown an inclination to this regard. The granting of the injunction will enable Hansen Yuncken to complete the Project and the NRAH project without having to address unlawful site entries by the respondents.

111    There is no inappropriate obligation on the respondents in having to comply with their obligations under Pt 3-4 of the FW Act. Taking account of those matters, I exercise the discretion to grant the injunction sought.

Associate:

Dated:    2 October 2014