FEDERAL COURT OF AUSTRALIA

Australian Federation of Air Pilots v HNZ Australia Pty Ltd [2015] FCA 755

THE COURT DECLARES THAT:

1.    The respondent has contravened s 50 of the Fair Work Act 2009 (Cth) by contravening cll 22.8 and 22.9 of the HNZ Australia Pty Ltd (Helicopter Pilots – Australian Operations) Enterprise Agreement 2013 by its conduct in failing to consult in respect of the proposed change to its employees’ regular roster or ordinary hours of work.

THE COURT ORDERS THAT:

1.    A penalty in the sum of $9,000 be imposed upon the respondent for its contravention of s 50 of the Fair Work Act 2009 (Cth).

2.    Pursuant to s 546(3) of the Fair Work Act 2009 (Cth) the penalty imposed upon the respondent, as set out in Order 1, be paid to the applicant.

3.    The proceeding otherwise be dismissed.

4.    There be no order as to costs.

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

REASONS FOR JUDGMENT

INTRODUCTION

1    This is an application for declaratory relief and the imposition of penalties on the respondent in respect of alleged breaches of the Fair Work Act 2009 (Cth), relating to the respondent’s failure to consult the applicant and some of the respondent’s employees on proposed changes to the employees’ rosters.

2    The parties have acted responsibly and cooperatively and avoided a trial of the allegations by the respondent admitting a contravention, which enables the Court to determine the question of contravention and appropriate relief on the basis of broadly agreed facts.

3    For the reasons I set out below, with some modifications which arose at the hearing, the declarations sought by the applicant will be made. A penalty of $9,000 will be imposed on the respondent, payable to the applicant.

FACTUAL BACKGROUND

4    The parties filed an agreed statement of facts which was admitted into evidence pursuant to s 191 of the Evidence Act 1995 (Cth). The respondent also read an affidavit of Ms Nina Dillon-Phillips, its human resources manager, without objection from the applicant. I am satisfied there is a sufficient factual basis for the Court to determine the application, although its brevity in some places means some nuances in the parties’ respective submissions are unsupported by an evidentiary foundation. There is no debate between the parties that the applicant is relevantly entitled to bring this proceeding on behalf of the affected employee pilots.

5    The respondent (HNZ) first commenced operations in Australia as an employer in 1992 when it purchased an entity called Westcoast Helicopters. It became HNZ Australia Pty Ltd on 16 October 2012. The evidence suggests, and I find, that it has never been subject to a penalty on account of any breach of the provisions of the Fair Work Act or its predecessors. The employees whose interests were affected by HNZ’s conduct are helicopter pilots employed by HNZ.

6    The applicable enterprise agreement is the HNZ Australia Pty Ltd (Helicopter Pilots – Australian Operations) Enterprise Agreement 2013 (the 2013 Agreement). It is a single-enterprise agreement within s 12 of the Fair Work Act, read with s 172(2).

7    Relevantly, HNZ conducts its operations out of Karratha in Western Australia transporting “fly in/fly out” workers to workplaces such as oil rigs. HNZ employs helicopter pilots on different bases: some pilots are employed as touring pilots who are permanently on rostered tours of duty away from their home base, and some pilots are employed as live-on-site (LOS) pilots who live on site at a base that is predominantly crewed by touring pilots.

8    Pilots work on roster cycles, for which the 2013 Agreement provides. The pilots on whose behalf this proceeding is brought are either touring or LOS pilots, and at the time of the alleged contravention were working on a variety of rosters. What follows is a brief description of the pilots concerned.

9    Mr Greg Duncombe, Mr Nigel Saunders and Ms Ivana Gorlin were employed as touring pilots, and Mr Mark Quayle and Mr Ric Casparis were employed as LOS pilots. All of them except Ms Gorlin are and were rostered by HNZ to work regular rosters of 15 days on followed by 13 days off. Ms Gorlin was rostered to work a regular roster of 28 days on followed by 28 days off. Each has been employed by HNZ for different periods of time, some for as long as 13 years (Mr Quayle), some for a little over or a little under two years (Ms Gorlin and Mr Casparis).

10    HNZ’s position on the evidence, which I accept, was that it wanted to introduce changed roster cycles so as to make a series of cost savings such as reducing the costs to it of the pilots’ travel to Karratha at the beginning and the end of their respective roster cycles, reducing overtime paid to LOS pilots and reducing the need to employ additional pilots to cover leave arrangements. What it wanted to do was move its touring pilots to roster cycles of 21 days on, 21 days off, and move its LOS pilots to rosters that ensured they had four days off in 14 days.

11    HNZ advised its pilots of these changes on various dates in mid-2014. None of the pilots agreed to the changes. Their position on the evidence, which I accept, was that their opposition to the changes stemmed from reasons which included the impact on their family lives from increased days on tour; objections by the touring pilots to the proposed deduction from the employees’ annual leave balance in order to accommodate each roster cycle; and concern about the inability to take extended periods of leave (of four weeks or more in one block) and the consequential impacts on wellbeing, family time and recreational or study activities that might be undertaken during those periods. The LOS pilots were concerned about a potential significant loss of income derived from overtime pay and reduction in rostered days off.

12    All of the pilots informed HNZ that the applicant was their representative in relation to any roster change, however despite communications and correspondence from the applicant on behalf of the pilots, HNZ did not engage with the applicant about its proposed roster changes as contemplated by the 2013 Agreement.

13    A debate ensued about the roster changes, and about HNZ’s compliance with the 2013 Agreement.

14    The applicant commenced proceedings pursuant to s 739 of the Fair Work Act. Those proceedings have included an appeal to the Full Bench of the Fair Work Commission. In the context of those proceedings, HNZ gave some undertakings not to implement any of the proposed roster changes. Accordingly, the pilots kept their previous roster cycles. In other words, HNZ abandoned its attempt to change their rosters.

15    In the context of these proceedings, HNZ now accepts that if it wishes to propose roster changes, it must act in accordance with the process set out in the 2013 Agreement, to which I now turn.

APPLICABLE LEGISLATION

16    Section 50 of the Fair Work Act provides:

A person must not contravene a term of an enterprise agreement.

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

Note 2:    A person does not contravene a term of an enterprise agreement unless the agreement applies to the person: see subsection 51(1).

17    Although there were initially allegations of contraventions of other clauses of the 2013 Agreement, the clause about which the applicant presses for findings of contravention is cl 22 of the 2013 Agreement. The whole of cl 22 should be set out:

CONSULTATION

22.1     Company to notify

22.1.1     Where the Company has made a definite decision to introduce major changes in production, program, organisation, structure or technology that are likely to have significant effects on Pilots, the Company must notify the Pilots who may be affected by the proposed changes, and their representatives, if any.

22.1.2     Significant effects include termination of employment; major changes in the composition, operation or size of the Company's workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of Pilots to other work or locations; and the restructuring of jobs. Provided that where this enterprise agreement makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

22.2     Company to discuss change

22.2.1     The Company must discuss with the Pilots affected and their representatives, if any, the introduction of the changes referred to in clause 22.1, the effects the changes are likely to have on Pilots and measures to avert or mitigate the adverse effects of such changes on Pilots and must give prompt consideration to matters raised by the Pilots and/or their representatives in relation to the changes.

22.2.2     The discussions must commence as early as practicable after a definite decision has been made by the Company to make the changes referred to in clause 22.1.

22.2.3     For the purposes of such discussion, the Company must provide in writing to the Pilots concerned and their representatives, if any, all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on Pilots and any other matters likely to affect Pilots provided that the Company is not required to disclose confidential information, the disclosure of which would be contrary to the Company's interests.

22.3     The employer must give prompt and genuine consideration to matters raised about the major change by the relevant employees.

22.4     If a term in this agreement provides for a major change to production, program, organisation, structure or technology in relation to the enterprise of the employer, the requirements set out in paragraph 22.1.1 and subclauses 22.7 and 22.9 are taken not to apply.

22.5     In this term, a major change is likely to have a significant effect on employees if it results in:

(a)    the termination of the employment of employees; or

(b)    major change to the composition, operation or size of the employer's workforce or to the skills required of employees; or

(c)    the elimination or diminution of job opportunities (including opportunities for promotion or tenure); or

(d)    the alteration of hours of work; or

(e)    the need to retrain employees; or

(f)    the need to relocate employees to another workplace; or

(g)    the restructuring of jobs.

22.6     Change to regular roster or ordinary hours of work

For a change regular roster or ordinary hours of work:

(a)    the employer must notify the relevant employees of the proposed change; and

(b)    subclauses 22.7 to 22.11 apply.

22.7    The relevant employees may appoint a representative for the purposes of the procedures in this term.

22.8    If:

(a)    a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and

(b)    the employee or employees advise the employer of the identity of the representative;

the employer must recognise the representative.

22.9     As soon as practicable after proposing to introduce the change, the employer must:

(a)    discuss with the relevant employees the introduction of the change; and

(b)    for the purposes of the discussion – provide to the relevant employees:

i.    all relevant information about the change, including the nature of the change; and

ii.    information about what the employer reasonably believes will be the effects of the change on the employees; and

iii.    information about any other matters that the employer reasonably believes are likely to affect the employees; and

(c)    invite the relevant employees to give their views about the impact of the change (including any impact in relation to their family or caring responsibilities).

22.10     However, the employer is not required to disclose confidential or commercially sensitive information to the relevant employees.

22.11     The employer must give prompt and genuine consideration to matters raised about the change by the relevant employees.

22.12     Workplace Consultative Group

22.12.1     The Company shall establish and maintain a Workplace Consultative Group (WCG) comprised of equal numbers (of no less than two each) of senior management representatives and nominated (and where necessary elected) Pilots representatives as the formal mechanism to facilitate consultation with the Pilot group on all major workplace changes that the Company has definitely decided to implement.

22.12.2     The WCG shall meet as required when major change has been definitely decided and the details of the implementation of the change are being planned.

22.13     Introduction of New Equipment

22.13.1     When new types of aircraft or special equipment (such as Night Vision Goggles) are to be introduced the WCG shall enter into discussions on the establishment of appropriate terms and conditions of employment in relation to such aircraft or equipment.

22.13.2     In the event of a delay in agreeing on the terms and conditions of employment, any agreed changes shall be backdated to the date of introduction of the new or special equipment.

22.13.3     The discussions shall occur in accordance with clause 22 of this Agreement with disputed matters resolved in accordance with clause 21 of this Agreement.

18    In relation to the imposition of penalties for contraventions of a civil remedy provision of the Fair Work Act, s 546 of the Act provides:

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.

Note:    Pecuniary penalty orders cannot be made in relation to conduct that contravenes a term of a modern award, a national minimum wage order or an enterprise agreement only because of the retrospective effect of a determination (see subsections 167(3) and 298(2)).

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

(3)    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

(4)    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.

19    The penalties that may be imposed by this Court are set out in s 539 of the Fair Work Act. Relevantly, s 539 provides:

Applications for orders in relation to contraventions of civil remedy provisions

(1)     A provision referred to in column 1 of an item in the table in subsection (2) is a civil remedy provision.

(2)     For each civil remedy provision, the persons referred to in column 2 of the item may, subject to sections 540 and 544 and Subdivision B, apply to the courts referred to in column 3 of the item for orders in relation to a contravention or proposed contravention of the provision, including the maximum penalty referred to in column 4 of the item.

Note 1:     Civil remedy provisions within a single Part may be grouped together in a single item of the table.

Note 2: Applications cannot be made by an inspector in relation to a contravention of a civil remedy provision by a person in certain cases where an undertaking or compliance notice has been given (see subsections 715(4) and 716(4A)).

Note 3: The regulations may also prescribe persons for the purposes of an item in column 2 of the table (see subsection 540(8)).

20    Section 50 is included as a civil remedy provision at item 4 of the table set out in s 539(2). Under that item, the maximum penalty to be imposed for a contravention of s 50 is 60 penalty units. Further, the penalty to be imposed on a body corporate pursuant to s 546(2)(b) of the Fair Work Act is five times the maximum number of penalty units referred to in the relevant item in column 4 of the table in s 539(2).

21    Section 4AA of the Crimes Act 1914 (Cth) determines the rate of a penalty unit, and it is currently fixed at $170. The parties are agreed that the maximum applicable penalty is accordingly calculated to be $51,000.

CONSIDERATION

Contravention

22    I am satisfied that HNZ’s conduct falls within cl 22, and in particular within cll 22.8 and 22.9, read with cl 22.6.

23    At the hearing of this matter, I raised with counsel some issues of construction about cl 22. It is apparent from the evidence that HNZ complied with cl 22.6(a), which both parties accepted was the “trigger” for the operation of cll 22.7 to 22.11. Where employees nominate a representative pursuant to cl 22.7, cl 22.8 imposes a specific obligation on the employer to “recognise” that representative. The use of the word “recognise” indicates the intent of the 2013 Agreement is that the employer will then deal with the representative for the purposes of consultation. The context of the consultation obligation in cl 22.9 is such that it might be undertaken directly with employees (if there has been no nomination under cl 22.7) or with the employees’ nominated representative. It is likely that the obligation will be discharged, where an employer has recognised a representative, through consultation with the representative. Otherwise, the intent of cl 22.7 would be frustrated. Clauses 22.8 and 22.9 must be read together, in a way that gives them practical operation. The consultation envisaged by cl 22.9 is then intended to provide information and material for the employer actively to consider: see cl 22.11.

24    I am satisfied on the evidence before me that HNZ has contravened s 50 of the Fair Work Act, in that HNZ failed to comply with its obligations in cll 22.8 and 22.9 of the 2013 Agreement, read with cl 22.6. HNZ failed:

(1)    to recognise the applicant as the representative of the pilots;

(2)    to consult with the applicant (as the pilots’ appointed representative) about the proposed roster change, and therefore failed to seek the pilots’ views (through the applicant) about the proposed changes; and

(3)    to discuss with the applicant the introduction of the changes to the pilots’ rosters or provide any information to the pilots (through the applicant) about the proposed changes.

25    The parties put this forward as a single contravention. While HNZ’s conduct may have been capable of being characterised as multiple contraventions, I am satisfied it is appropriate to proceed on the basis it is a single contravention, because the failure is put as a failure to recognise and consult with the applicant as the pilots’ representative.

26    HNZ seeks to explain (but not excuse) its contravening conduct in large part by referring to its reliance on advice it sought and obtained from the Chamber of Commerce and Industry of Western Australia. The evidence is thin about the circumstances in which the advice was sought. There is no evidence of the content of the advice, other than the very general evidence of Ms Dillon-Phillips that it was “to the effect that consultation with the Applicant was not either necessary or required by the 2013 Agreement”. On the other hand, cl 22.9 is clear on what must be done, even if who must be consulted is less clear. HNZ contends, and I accept, that in declining to consult the applicant it acted on the advice of the Chamber of Commerce as described by Ms Dillon-Phillips. It accepts this advice was incorrect. The evidence shows that it was given correct advice when it consulted its legal representatives in this proceeding. I infer that is what has led HNZ to decide not to contest the contravention allegation.

27    Accordingly, there should be declarations giving effect to this finding of contravention.

28    As to penalty, the parties submitted and I accept that while the process of “instinctive synthesis” (see Markarian v The Queen [2005] HCA 25; 228 CLR 357 at [37]), which has been regularly applied to civil penalty decision-making and adopted by the Full Court in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59; 105 ACSR 403 at [221] and [239], is such that no mandatory considerations can or should be specified, and the Court must look at all the circumstances, taking into account the totality principle, nevertheless guidance has now been given on many occasions about the kinds of factors the Court might consider. The appropriate approach is set out in Australian Ophthalmic Supplies v McAlary-Smith [2008] FCAFC 8; 165 FCR 560 at [89] (per Buchanan J, referring to a list of factors previously set out by Tracey J in Kelly v Fitzpatrick [2007] FCA 1080; 166 IR 14).

29    Taking into account the parties’ respective submissions, and from my own consideration of the evidence, I accept the following factors are relevant in the circumstances of this particular contravention.

30    Consultation is an important and valuable right in the employment relationship, and is no mere formality: it is purposive, not just procedural: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited [2010] FCA 591; 268 ALR 514 at [43]-[44] citing with approval Port Louis Corporation v Attorney-General of Mauritius [1965] AC 1111 at 1124 and TVW Enterprises Ltd v Duffy (No 2) [1985] FCA 251; 7 FCR 172 at 178. See also Construction, Forestry, Mining and Energy Union v Laing O’Rourke Australia [2013] FCA 246 at [21]. It is important because it is through consultation that employers may be assisted in seeing proposals from different perspectives, including being alerted to negative aspects or adverse consequences of proposals: see generally QR Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2010] FCAFC 150; 204 IR 142 at [81] per Gray J.

31    HNZ’s conduct as I have set out above meant the pilots could provide no such input nor could the applicant on their behalf. It was a conscious course of conduct, occurring at different times in relation to different pilots, and there was a deliberate refusal by HNZ to engage with the applicant when it was asked to do so.

32    HNZ says that it did express “a willingness to consult” with two of the pilots, Mr Duncombe and Mr Saunders. It is true there is an agreed fact referring to written communications on or about 30 June 2014 to Mr Duncombe and Mr Saunders, to the effect that HNZ was available to meet for consultation on 1 or 2 July 2014. However that occurred in the context of the proposed changes being pursued by HNZ, having deliberately decided not to engage actively with the applicant. I do not consider this isolated correspondence, which was not in evidence before me, reduces the seriousness of the contravention to any meaningful extent.

33    The chronology as set out in the agreed statement of facts at [12] to [16] and [20] to [22] is also important. The initial offer of “willingness” to meet is all but neutered by what then occurs, in terms of the nomination of the applicant by Mr Duncombe and Mr Saunders, and HNZ’s failure to engage with the applicant as required. Further as the applicant submitted, the once-off “invitation” is far removed from the consultation obligation in the 2013 Agreement.

34    The evidence of the pilots’ concerns about the proposals indicates they may have had useful perspectives which could have influenced HNZ’s decision-making. Besides that, they were entitled to be heard about proposals that significantly affected their working arrangements, and therefore (because of the nature of their employment and the fact they worked in remote locations on long rosters) their family lives.

35    There was some debate in the submissions about the characterisation of the fact that the roster change was not implemented. I accept, as I set out below when dealing with previous decisions, that the non-implementation means as a matter of fact that any loss to the employees was mitigated. However I accept the applicant’s submissions that the non-implementation was driven by the action taken by the applicant on behalf of the pilots.

36    HNZ gave undertakings about non-implementation only after the applicant initiated proceedings, pursuant to s 739 of the Fair Work Act, in the Fair Work Commission. These undertakings initially applied to only some of the pilots. The applicant sought, and was granted, interim orders maintaining the pre-dispute roster cycles for all the remaining pilots. Prior to the hearing of an appeal before the Full Bench of the Fair Work Commission, the applicant sought orders to maintain the pre-dispute roster cycles of the pilots. No orders were necessary in the end because HNZ agreed not to implement its proposed changes and to consult the pilots as the 2013 Agreement contemplated in cll 22.7 to 22.11. That sequence of events places the fact of non-implementation of the roster changes in a different light and one less favourable to HNZ.

37    I accept the applicant’s submissions that the capacity of HNZ to pay a penalty should be taken into account, in the sense of HNZ having a capacity to pay a penalty without undue hardship. HNZ accepts this. The fact it is a profitable organisation of significant size may also be relevant to the assessment of its explanation for the contravention. There was, in terms of its financial and organisational capacity, nothing to prevent it seeking its own legal advice before engaging in the roster changes, rather than simply relying on communications with the WA Chamber of Commerce.

38    HNZ’s cooperation should be taken into account in its favour. By making an admission and agreeing to the facts underlying the admitted contravention, the parties’ and the Court’s resources and time have been used as effectively and efficiently as possible. The parties have indicated they had also reached agreement on an appropriate penalty, but in the light of the Full Court’s decision in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59; 105 ACSR 403, that agreement is not before the Court.

39    I have accepted the applicant’s submissions that the pilots’ entitlement to consultation, including through their union, is an important one. It is appropriate that the penalty imposed emphasises that these kinds of obligations cannot be ignored, or sidestepped, by employers. In Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; 158 FCR 543, Lander J said (at [93]):

There are three purposes at least for imposing a penalty: punishment; deterrence; and rehabilitation. The punishment must be proportionate to the offence and in accordance with the prevailing standards of punishment: R v Hunter (1984) 36 SASR 101 at 103. Therefore the circumstances of the offence or contravention are especially important. The penalty must recognise the need for deterrence, both personal and general. In regard to personal deterrence, an assessment must be made of the risk of re-offending. In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend: Yardley v Betts (1979) 22 SASR 108. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty: R v Thompson (1975) 11 SASR 217. In some cases, although hardly in this type of contravention, rehabilitation is an important factor.

40    The agreed facts in this case, although somewhat sparse, nevertheless demonstrate a real error of judgment by HNZ, in terms of who should be sought out by an employer seeking to understand its consultation obligations under an enterprise agreement. Other employers should learn from this that it is far preferable to engage experienced lawyers to give advice in full context. Counsel for HNZ frankly and properly recognised this aspect.

41    I do not consider that specific deterrence has a large role to play in the current circumstances. I accept that HNZ acted in quite a “short cut” kind of way in simply seeking out the advice of the WA Chamber of Commerce and then acting on it. It can be inferred those within HNZ who were responsible for the proposal knew the roster change proposal would be unpopular with the pilots. However I am satisfied that HNZ has, through this proceeding, learned that it cannot take such short cuts, and now appreciates the consequences of doing so. The likelihood of a further contravention of this nature is remote, in my opinion. Further, I do not see this as a case where any kind of “corrective action” by HNZ, beyond its undertaking to adhere to the terms of the 2013 Agreement, should be expected.

42    I do not accept the applicant’s submission that weight should be placed on the role of senior management. Although the roster change proposal necessarily came from a person within senior management (as one would expect), this is not a case of some premeditated plan to avoid obligations in which all senior management were closely involved.

43    I do not accept the applicant’s invitation to place weight on the absence of contrition, or an apology from HNZ. I prefer the submission of HNZ that these aspects are not particularly appropriate to the circumstances of this contravention. No doubt there will be cases where the refusal, or absence, of an apology, would be significant. That might be the case especially where there has been unlawful conduct targeted at a particular employee, or there are circumstances of embarrassment, humiliation, or worse. Further, there is an aspect of contrition in the response of HNZ by admitting the contravention and submitting to a penalty. Agreement was reached between the parties relatively early in the course of the proceedings: some six months before trial and some four months after the proceeding was issued.

Penalty

44    In Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59; 105 ACSR 403 at [252] the Full Court indicated it was appropriate for judges imposing penalties to look at previous decisions so as to ensure the development of a consistent approach to the fixing of pecuniary penalties.

45    In this case, the parties have referred to a number of previous decisions, but are somewhat at odds about which of them have any relevance to the circumstances of the current contravention.

46    Two of the decisions relied on by the applicant (CEPU v ThyssenKrupp Elevator Australia Pty Ltd [2014] FCCA 1615 and National Tertiary Education Industry Union v Swinburne University of Technology [2013] FCA 1128) do present rather different circumstances, which no doubt affected the level of penalty imposed. In both, the right to consultation was in substance irretrievably lost. Further, in both of these cases the effects on the employees were significant – either loss of employment or ongoing effects on job security. There is no evidence of such effects here – although that in large part is attributable, as I have found, to the actions of the applicant in contesting HNZ’s conduct, and preventing implementation of the roster changes.

47    I also accept, in substance, the submissions of HNZ about the differences in the situation presented by QR Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2010] FCAFC 150; 204 IR 142.

48    Although there were some mitigating factors (absence of dishonesty, a non-deliberate breach and a first offence), there were other factors which make QR Limited quite different. The respondent’s submissions list the following differences, which I accept:

(a)    the breach involved the contravention of 20 agreements;

(b)    the breaches affected the industrial rights of 10,300 employees;

(c)    the failure to consult was considered to be heedless of the rights of employees;

(d)    the breach itself was considered serious (although falling short of the "worst imaginable cases");

(e)    QR Limited did not admit to the contravention and the parties were put to the expense of a trial;

(f)    there was no evidence of contrition, the employer parties arguing that they were under no obligation to consult;

(g)    the Full Court considered that there had been a serious failure to take steps in order to ensure that the employers discharged their obligations and it was noted that they had not attempted to seek legal advice; and

(h)    in the assessment of the Full Court, the employers' management had taken "the easy way out".

49    HNZ submitted the Court should see two other decisions as closer in nature.

50    In Ratnayake v Greenwood Manor Pty Ltd (No 2) [2012] FMCA 440, the Court imposed a penalty of $6,600 for failure to consult, which was 20% of the maximum penalty at the time. Measured against the current maximum, the penalty would be the equivalent of $10,200 in the present proceeding. In that case, the employer had failed to consult in connection with a proposed reduction in an employee’s hours of work (from 40 hours per week to 25 hours per week).

51    In Construction, Forestry, Mining and Energy Union v Whitehaven Coal Limited [2014] FCCA 2657, the Court considered that a penalty of $19,000 was at the high end of an appropriate penalty. This case involved a major restructuring approved by senior executives with 14 affected employees being notified on the same day that their positions were made redundant, effective immediately. There had been no prior consultation. There was an additional payment of compensation as well.

52    I accept these cases provide some guidance as to what might be a consistent approach to penalty in this matter, although in both cases the adverse changes were implemented.

53    The role of the parties, perhaps especially the moving party which is in a position akin to a prosecutor, in making submissions as to an appropriate range of penalty is attended with some difficulty. In CMB v Attorney-General (NSW) [2015] HCA 9; 317 ALR 308 (at [64]), Kiefel, Bell and Keane JJ said:

The determination of the appropriate sentence is one that rests solely with the court. The public interest in the sentencing of offenders does not permit the parties to bind the court by their agreement. None the less, the prosecutor is under a duty to assist the court to avoid appealable error. Where the sentencing judge indicates the form of proposed sentencing order and the prosecutor considers that such a penalty would be manifestly inadequate, the prosecutor discharges his or her duty to the court by so submitting. The failure to do so is a material consideration in the exercise by the Court of Criminal Appeal of the residual discretion. The weight of that consideration will depend upon all of the circumstances. A prosecution concession that a non-custodial sentence is an available disposition is a powerful consideration weighing against intervening to impose a sentence of imprisonment on appeal.

(Citations omitted.)

54    In the Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59; 105 ACSR 403 at [239] and [241], the Full Court described a submission on actual penalty as an “opinion”, the expression of which is impermissible. The Full Court described the law as “forbidding” such submissions (whether as to actual penalty or a range of penalties), and said no dire consequences flowed from this: see at [236].

55    In June 2015, the High Court granted special leave to appeal in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union: see Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA Trans 149 (18 June 2015). The terms of the Full Court’s decision are binding on me. How they are to be reconciled with what was said in CMB v Attorney-General (NSW) may, or may not, be considered by the High Court.

56    In the meantime, although there were submissions made about an appropriate range of penalties at the hearing of this matter (at my invitation and, I accept, erroneously) I have not taken those submissions into account.

Appropriate orders on penalty

57    The applicant seeks payment of the penalty to it. The respondent accepts that submission. I am satisfied this is an appropriate case in which to order payment in that way. I canvassed the applicable principles in Sayed v Construction, Forestry, Mining and Energy Union [2015] FCA 338 at [73]-[88] and I consider those principles applicable here.

58    Unlike Sayed, it is the union who has prosecuted this matter, and has done so not for its own benefit but for the benefit of its members. Indeed, the gravamen of the contravention is that the union was seeking to act on behalf of its members in relation to the roster changes. There were several members affected and the union has acted collectively for them all, and there are considerable efficiencies in it doing so. The evidence suggests it acted promptly and responsibly to protect its members’ entitlements under the 2013 Agreement, and it should be compensated for the resources it has expended.

CONCLUSION

59    I note that the parties proposed dismissal of those aspects of the proceeding (three further alleged contraventions) which were not pressed. This is an appropriate order. I also accept it is appropriate to insert a fourth order dealing with the parties’ agreed position that there should be no order as to costs.

60    HNZ’s conduct was deliberate, but it did have an aspect of misguidedness and poor judgment. Its failure to consult could have been more serious but for the applicant’s prompt and effective action. The penalty should recognise the material failure to follow the clear terms of cll 22.8 and 22.9, and send a message that employers should not take short cuts in seeking advice on their obligations. Critically, the penalty should also reflect the subsequent responsive and responsible conduct of HNZ in desisting from an unlawful course, and acknowledging it as such, in a way which meant the changes were not implemented and no further adverse effects flowed on to the employees. I consider an appropriate penalty is $9,000.00. It is at the lower end of the scale, but far from token to an organisation such as HNZ. The penalty should be payable to the applicant.

Associate:

Dated:    24 July 2015