FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd (No. 2) [2016] FCA 727

ORDERS

THE COURT DECLARES THAT:

1.    On the true construction of the Hail Creek Agreement 2011 (the Enterprise Agreement):

(a)    subject to the other provisions of cl 13.7 of the Enterprise Agreement, the first sentence under the subheading “Sick Leave” in that clause entitles an employee, other than a casual, to be absent from work when he or she is unable to work due to illness or injury, and to be paid for the period of that absence his or her Total Salary as defined in the agreement;

(b)    by virtue of the first sentence of cl 7.6 of the Enterprise Agreement, that employee’s Total Salary which, by cl 7.1, includes payment in respect of an absence taken as aforesaid, is to be paid monthly such that payment in respect of attendances at work and any such absences over the preceding month are each included in the monthly instalment of Total Salary.

2.    The respondent contravened cl 13.7 of the Enterprise Agreement by refusing to provide its employee, Mr Alan Atherton with access to paid personal leave in respect of his inability to work due to illness or injury on 10, 11, 12, 13, 19, 20 and 21 February 2014.

3.    The respondent contravened cl 13.7 of the Enterprise Agreement by refusing to provide its employee, Mr Christopher Cooney with access to paid personal leave in respect of his inability to work due to illness or injury on 11 and 12 April, 1, 13, 14 and 15 August 2014, 9, 10 and 11 June, 15 July, 20, 21 and 22 August, 21 September, 6 and 7 November and 27 December 2015, 8, 9 10, 11, 26, 27, 28 and 29 February 2016, 7, 8, 9, 10, 16, 17, 18, 19 and 20 March 2016.

4.    The respondent contravened cl 13.7 of the Enterprise Agreement by refusing to provide its employee, Mr Paul Duncan with access to paid personal leave in respect of his inability to work due to illness or injury on 5, 6 and 7 October 2014.

5.    The respondent contravened cl 13.7 of the Enterprise Agreement by refusing to provide its employee, Mr Robert Gibbs with access to paid personal leave in respect of his inability to work due to illness or injury on 21, 22 and 23 May, 10, 11 and 12 June, 27, 28 and 29 September, 7, 9, 10 and 11 October 2014.

6.    The respondent contravened cl 13.7 of the Enterprise Agreement by refusing to provide its employee, Mr David Halford with access to paid personal leave in respect of his inability to work due to illness or injury on 10 shifts between 3 April 2014 and 23 April 2014 and 4 shifts between 24 April 2014 and 29 April 2014.

7.    The respondent contravened cl 13.7 of the Enterprise Agreement by refusing to provide its employee, Mr Robert Hoffman with access to paid personal leave in respect of his inability to work due to illness or injury on 27, 28 and 29 May 2014 and 6, 7, 8, 9 and 10 and 16, 17, 18 and 19 January 2016.

8.    On each of the occasions referred to in paras 2 to 7, the contravention of that term of the Enterprise Agreement constituted a contravention of s 50 of the Fair Work Act 2009 (Cth) (the Act) by the respondent.

9.    The said contraventions of s 50 of the Act arose out of a course of conduct by the respondent.

10.    As a consequence and by virtue of s 557(1) of the Act, those contraventions of s 50 by the respondent are taken to be a single contravention.

THE COURT ORDERS THAT:

11.    In respect of what, by s 557(1) of the Act, is taken to be a single contravention, the respondent is to pay a pecuniary penalty in the amount of $24,000 (the pecuniary penalty).

12.    The pecuniary penalty is to be paid to the applicant.

13.    Enforcement of the applicant’s right, under s 546(4) of the Act, to recover the pecuniary penalty as a debt due to it is stayed for a period of one month from the date of this order so as to allow the respondent time to pay that penalty to the applicant without the need for the institution of recovery proceedings.

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

REASONS FOR JUDGMENT

LOGAN J:

1    In Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd [2015] FCAFC 149 a Full Court of this Court (Jessup, Rangiah and White JJ) determined, contrary to a conclusion earlier reached by me (Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd [2015] FCA 532), that a question of law reserved for separate consideration in the proceeding ought to be answered in the following way:

Subject to the other provisions of cl 13.7 of the Hail Creek Agreement 2011, the first sentence under the subheading “Sick Leave” in that clause entitles an employee, other than a casual, to be absent from work when he or she is unable to work due to illness or injury, and to be paid for the period of that absence his or her Total Salary as defined in the agreement.

2    The effect of answering the question in this way meant that it became necessary, following a remitter of the proceeding by the Full Court, to determine whether, on the evidence and construing the Hail Creek Agreement 2011 in that way, Hail Creek Coal Pty Ltd (the company) had, as the Construction, Forestry, Mining and Energy Union (CFMEU) alleged, contravened s 50 of the Fair Work Act 2009 (Cth) (the Act). That section provides that a person must not contravene a term of an enterprise agreement. The Hail Creek Agreement 2011 (the Enterprise Agreement) is an enterprise agreement for the purposes of the Act and cl 13.7 is a term in that Enterprise Agreement. It provides:

Personal Leave

Personal leave includes both sick leave and special leave.

Notwithstanding this clause, no Employee will have access to less than the personal leave prescribed by the National Employment Standards of the Fair Work Act (Cth) 2009.

Sick Leave

Employees, other than casuals, have access to paid sick leave on Total Salary when they are unable to work due to illness or injury. Employees are required to let their Manager know as soon as possible when they realise they are unable to attend work.

An Employee’s Manager may exercise their discretion requiring an Employee to provide a medical certificate or other evidence for any period of sick leave.

Where, due to illness or injury, an Employee takes extended sick leave (usually longer than 3 months duration) the Employee’s Manager will have the discretion as to whether any further component of salary will continue or be amended in any further payments made.

There will be no payment for sick leave upon termination of employment.

Special Leave

Special leave may be approved for an Employee to provide care to members of their immediate family for whom they have responsibility or for other personal emergencies. Employees may be required to provide evidence of their need for special leave.

Employees will be paid their Total Salary for special leave.

3    The CFMEU contends that the company has contravened cl 13.7 of the Enterprise Agreement and thus s 50 of the Act on divers occasions by denying six employees access to sick leave. It seeks the imposition of civil penalties in respect of those contraventions.

4    That these are civil penalty proceedings means that, even though the standard of proof remains on the balance of probabilities, inexact proofs and indirect references are insufficient: s 140, Evidence Act 1995 (Cth) (the Evidence Act) and Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-362. Even so, I am well satisfied that, given the construction of the Enterprise Agreement favoured by the Full Court and notwithstanding a defence (detailed below) promoted by it, the company has contravened cl 13.7 of the Enterprise Agreement and thus s 50 of the Act. That means that it will be necessary, later in these reasons for judgment, to consider the meaning and application of s 557 of the Act so as to determine the number of contraventions which are taken to have occurred. First it is necessary to set out with greater particularity the manner in which the company is alleged to have contravened cl 13.7 of the Enterprise Agreement and why it is that I am satisfied, to the standard mentioned, it has contravened that agreement.

5    The Enterprise Agreement was approved by the Federal conciliation and arbitration commission presently known as the Fair Work Commission (the industrial commission) on 13 April 2011. It commenced operation a week later, on 20 April 2011. It applies to the company (which is a “constitutional corporation”), to the CFMEU and also to the company’s employees employed in operator or, as the case may be, maintainer appointments at the Hail Creek coal mine (Hail Creek mine) site. The company is the employer of labour in those callings at that mine site. Its employees there include, materially, Mr Alan Atherton, Mr Christopher Cooney, Mr Paul Duncan, Mr Robert Gibbs, Mr David Halford and Mr Robert Hoffmann (collectively, “the workers”). Each of the workers is a permanent employee of the company, not a casual. Each is also a member of the CFMEU.

6    The Hail Creek mine is managed on behalf of a joint venture known as the Hail Creek Joint Venture by Rio Tinto Coal Australia Pty Ltd. It was, I understood, common ground that both the company and this management company were ultimately held by one or the other of the dual United Kingdom and Australian listed and managed companies, Rio Tinto plc and Rio Tinto Limited. It is a feature of the correspondence directed to the workers that, under a generic “Rio Tinto” letterhead, reference is made to that joint venture and to the management role of Rio Tinto Coal Australia Pty Ltd.

7    On the remitter and subject to one exception which I mention below, there came to be no factual controversy between the CFMEU and the company as to the application for sick leave by each of the workers on the occasions alleged, the fate of their respective applications and whether and how, if at all, they were paid by the company in respect of that leave. Naturally, that provokes the thought that the Full Court’s passing observation, at [62], about the wisdom of the separate determination of questions of law has, indeed, proved to be accurate. But in this case such was the earlier, apprehended evidentiary controversy that thought, with respect, is the wisdom of hindsight. The almost complete absence of evidentiary controversy also meant that, as it transpired, there was no advantage, as the Full Court (again at [62]) apprehended there might be, just in considering the circumstances of one of the workers as a vehicle for the resolution of issues arising on the remitter.

8    On the basis of the affidavit evidence given by the respective workers (none of whom was, in the result, required for cross-examination) and the admissions on the pleadings, I make the following findings of fact. It is desirable to record these by reference to the circumstances of each worker.

9    As to each of the absences recorded below in respect of each of the workers and on the construction of cl 13.7 of the Enterprise Agreement determined by the Full Court, each of the workers had then an accrued entitlement to be granted access to paid sick leave.

MR ALAN ATHERTON

10    Mr Atherton has been employed by the company since 24 March 2003. He holds an Operator position on a full-time basis. Between the commencement of his employment and 7 February 2014, Mr Atherton had taken 181 shifts of paid personal leave as sick leave. On 7 February 2014, Mr Atherton received from the company a letter which made reference to the sick leave which he had taken (expressed to be 180 days), to the Act and to the enterprise agreement and asserted that this leave, “exceeds relevant legislative entitlements”. It was further stated in this letter that, “any further applications for personal leave will result in unpaid personal leave until such time as your personal leave entitlement is no longer exhausted”.

11    Mr Atherton was on approved sick leave in respect of an arm tendon injury at the time when the letter of 7 February 2014 was sent and received. He continued to be absent from his employment on leave as a result of this injury on the following further days in February 2014 – 10, 11, 12, 13, 19, 20 and 21 February. Though granted leave for these days by the company, he was paid for them by the company’s appropriation, without Mr Atherton’s permission, of amounts in respect of accrued annual leave. Put another way, the company treated these days as paid annual leave, not paid sick leave, days. Mr Atherton’s annual leave balance was debited and reduced accordingly by the company.

12    The practice at the Hail Creek mine, which is in conformity with the Enterprise Agreement, is that the company pays its employees monthly, on the 19th of each month. These monthly payments include any payment in respect of approved sick leave taken over the month up to the pay day. Thus, the leave which Mr Atherton took in February 2014 bridged two pay periods. That leave also extended back to January 2014 but it is unnecessary further to detail it.

13    In May this year, by a letter sent and received on 13 May 2016 (part of Exhibit 4), the company notified Mr Atherton that, following a review of his claim for sick leave entitlements, it had decided to “re-credit” his annual leave account “for all of the days claimed”. In particular, it was stated that he would be re-credited for the leave deducted on the following dates:

    4 shifts between 10 and 13 February 2014; and

    3 shifts between 19 and 21 February 2014.

The company stated that it was doing this “both as a gesture of good faith and as a way to amicably resolve the dispute”. These particular proceedings are not expressly referred to in this letter. I infer though that they are intended to be included in the reference to “dispute”.

14    Correspondence to like effect was sent by the company to each of the other workers. That correspondence notified an intention to re-credit annual leave where that had been taken when sick or, as the case may be, to make payment in respect of leave taken when sick but not hitherto paid.

15    In a subsequent letter, dated 16 May 2016 (Exhibit 5), which passed between the company’s solicitors and the solicitors for the CFMEU, it is stated, on instructions, that this re-crediting had occurred (and, for that matter, that amounts in respect of sick leave hitherto claimed but unpaid had been paid).

16     Notwithstanding this correspondence, it was controversial in the proceedings as to whether the company had proved that the re-crediting or, as the case may be, payment in respect of leave taken as sick leave but hitherto unpaid had been paid. The company pointed to no other asserted proofs on this subject. The defence it put forward depended for its factual foundation on these asserted proofs amounting to evidence. The point is one of general application. It is convenient to deal with it at once.

17    The letters which collectively comprise Exhibit 4, of which that sent to Mr Atherton is an example, are, in my view, business records of the company for the purposes of the exception, found in s 69(1) of the Evidence Act, to the hearsay rule. They each contain a representation made in the course of that business but that representation is as to an intention to undertake an act, re-crediting or, as the case may be, payment, not that the act has occurred. The letter from the company’s solicitors contains a representation as to the act having occurred, which I am prepared to infer was made on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of that asserted fact. The difficulty is that the representation is made in a letter which, on its face, was prepared in connection with an Australian legal proceeding namely, this proceeding. That being so, the evidentiary effect which the representation might otherwise have had pursuant to s 69(2) of the Evidence Act is denied by s 69(3) of that Act, unless that qualification is dispensed with.

18    It would be possible, under s 190(3) of the Evidence Act, to order that the qualification found in s 69(3) does not apply in relation to the representation in the solicitor’s letter. It seems inherently likely, in light of the representations made as to the company’s intentions in the correspondence which is Exhibit 4 and the fact that the solicitor’s letter was prepared and sent on instructions, that the application of that provision would cause or involve unnecessary expense or delay. Further, my very strong impression at the trial was that the matter to which the evidence relates was in dispute only because, given the late emergence of a particular defence, those representing the CFMEU were unable, in the time available, to secure requisite instructions about the asserted evidentiary foundation from that union and the workers. For these reasons, were there any merit in law in the defence, I would be disposed to order that the qualification did not apply. As it happens though, there is, for reasons set out below, no merit in the defence.

MR CHRISTOPHER COONEY

19    Mr Cooney has been employed by the company since 19 May 2008. He is another who holds an Operator position on a full-time basis.

20    Between the commencement of his employment and 18 December 2013, Mr Cooney had taken 75 shifts of paid sick leave. On 18 December 2013, the company sent to Mr Cooney and he received a letter in like terms to that later sent to Mr Atherton on 7 February 2014. As a result of his receipt of this letter and his subsequent experience of the company administering his sick leave applications accordingly, Mr Cooney believed that he had no further entitlement to paid sick leave until such time as he had worked in excess of the number of years for which he had already used his sick leave entitlement. As a result and because his circumstances were such that he needed to receive pay for absences, he ceased to apply for paid sick leave. Instead when sick and to the extent possible he either attended work anyway or applied for annual leave. On some occasions though, when he had no annual leave entitlement of which to avail, he took unpaid sick leave. Though the absence was approved on these occasions, there was no payment for the latter in the company’s usual, monthly pay cycle.

21    As to leave when sick, Mr Cooney has been unable, because of illness or injury, to attend for work at the Hail Creek mine on the following days and has been paid, or, as the case may be, not paid in respect of them as indicated:

Unpaid absences

    2014 – 11 and 12 April; 1, 13, 14 and 15 August;

    2015 – 21 September;

    2016 – 29 February; 7, 8, 9, 10, 16, 17, 18, 19 and 20 March.

Absences paid as annual leave

    2015 – 9, 10 and 11 June; 15 July; 20, 21 and 22 August; 6 and 7 November; 27 December.

MR PAUL DUNCAN

22    Mr Duncan has been employed by the company since 10 September 2007. He is another who holds an Operator position on a full-time basis.

23    Between the commencement of his employment and 31 March 2014, Mr Duncan had taken 97 shifts of paid sick leave. On 31 March 2014, the company sent to Mr Duncan and he received a letter in like terms to that later sent to Mr Atherton on 7 February 2014. As a result of his receipt of this letter, Mr Duncan believed that he had no further entitlement to paid sick leave until such time as he had worked in excess of the number of years for which he had already used his sick leave entitlement. This was contrary to his experience of the way in which the company had viewed and administered his sick leave entitlements when he was injured in 2009. After the receipt of the letter and because of the belief its advice engendered, he ceased to apply for paid sick leave. When sick he either attended work anyway or applied for unpaid sick leave.

24    As to unpaid sick leave, as a result of being unable, because of illness or injury, to attend for work at the Hail Creek mine, Mr Duncan has, since 31 March 2014, consequentially sought and been granted unpaid sick leave on the following dates:

Unpaid absences

    2014 – 5, 6 and 7 October.

25    When, in March this year, Mr Duncan sought advice from the company as to his present sick leave position he was given the following information on behalf of the company by a Mr Lex Ward, following a referral by Ms Angela Martin, Human Resources Officer, Operations Regional Qld, Rio Tinto Services Limited. The latter is, inferentially, ultimately held by one or the other (or perhaps each, a question unnecessary to resolve) of the dual United Kingdom and Australian listed and managed companies mentioned above and provides services to, inter alia, the company in its capacity as an employer at the Hail Creek mine. Mr Ward informed Mr Duncan that the company did not give sick leave information to employees and that if he needed leave there was other leave he could request on a case by case basis. He added words to the following effect, “There is a figure here – I don’t know if I can tell you but it’s negative 14.” I infer from this and from the evidenced instances of others of the workers not being granted paid sick leave after the judgement of the Full Court was published that neither the company nor those within the Rio Tinto corporate umbrella which serviced it had adjusted personnel records or practices to take account of the construction of cl 13.7 of the enterprise agreement determined by the Full Court.

MR ROBERT GIBBS

26    Mr Gibbs has been employed by the company since 28 May 2012. He is another who holds an Operator position on a full-time basis. Between the commencement of his employment and 31 March 2014, Mr Gibbs had taken 22 shifts of paid sick leave. Like Mr Duncan, Mr Gibbs received from the company on 31 March 2014, a letter of that date which was in like terms to that later sent to Mr Atherton on 7 February 2014. His receipt of that letter and the advice it contained was the first occasion on which Mr Gibbs became aware that the company considered that there was a limit on sick leave for employees such as him at the Hail Creek mine.

27    The practice at the mine in relation to sick leave was that employees would notify an absence for that reason by telephone to their supervisor, who would advise them as to whether a medical certificate was needed for the particular absence and process the application on their behalf. Mr Gibbs’ experience, after the receipt of this letter from the company, was that when, in May 2014, he telephoned his then supervisor (a Mr Terry Spredborough) to advise him that he was sick he was advised that, if he did not send in a document authorising annual leave to be paid instead of sick leave, he would not be paid for a sick leave absence. His later experience concerning absences when he was sick bore ought this advice.

28    Since 31 March 2014, Mr Gibbs has been unable, because of illness or injury, to attend for work at the Hail Creek mine on the following days, and has been paid, or, as the case may be, not paid in respect of them as indicated:

Unpaid absences

    2014 – 10, 11 and 12 June;

Absences paid as annual leave

    2014 – 21, 22 and 23 May; 27, 28 and 29 September; 7, 9, 10 and 11 October.

29    Once again, as with the other workers, the position with Mr Gibbs is that, though granted leave for these days by the company, he has been paid for them by the company’s appropriation of amounts in respect of accrued annual leave or, as the case may be, not at all.

MR DAVID HALFORD

30    Mr Halford has been employed by the company since 20 November 2011. He is another who holds an Operator position on a full-time basis. Between the commencement of his employment and 31 March 2014, Mr Halford had taken 31 shifts of paid sick leave. Like Mr Duncan and Mr Gibbs, Mr Halford received from the company on 31 March 2014 a letter of that date which was in like terms to that later sent to Mr Atherton on 7 February 2014.

31    Mr Halford’s receipt of this letter corresponded with a time when he required surgical revision of surgical treatment which he had undergone in 2013 in respect of an injury to his left knee. In accordance with the usual practice at the mine, he contacted his supervisor (Mr Fabian Apruzzese) in late March or early April to advise him of the need for this surgery and related leave. The advice Mr Apruzzese then gave him was that sick leave would be granted and to send in a medical certificate once he knew the number of days required. On 9 April 2014, the day of his surgery, Mr Halford received a telephone call from Mr Apruzzese who relayed advice which he, in turn, had received from a Mr Colby Miller (the Superintendent – Drag Line Drill and Blast Team and, inferentially, a superior of both Mr Apruzzese and Mr Halford). As Mr Halford recalls, the effect of what Mr Apruzzese said was:

I know I said yes your leave has been approved however Colby Miller has overruled it and you will be receiving a letter explaining that your sick leave has been exhausted. You will need to apply for annual leave for this absence [sic].

32    Mr Halford’s affidavit evidence was also that he had received the company’s letter of 31 March 2014 that very day. By a letter of 28 April 2014 he disputed the company’s sick leave position as related in the letter of 31 March. The company formally acknowledged receipt of this on 29 April 2016. On 5 May 2014, Mr Halford in effect reiterated his earlier position and sought to escalate the dispute. No response from the company is in evidence. Mr Halford’s recollection of the conversation of 9 April is imperfect to the extent that he recalls Mr Apruzzese stating that he “would be receiving” a letter from the company. It may be that the reference really was to a letter already received (that of 31 March). Mr Halford was not cross-examined and nothing was made of this interrogative note in his evidence. In the result, nothing turns on it. The point is that, as a result of the further surgical treatment of his knee injury, Mr Halford was absent on leave for 10 days (or shifts, which is materially the same) between 3 and 23 April 2014 and four days (or, again shifts, which is materially the same) between 24 and 29 April 2014, in all 14 days. Without his permission these absences, though approved by the company, were paid as annual leave, not sick leave. It was this position which Mr Halford disputed by his letter of 28 April 2014.

33    In February this year, Mr Halford was again sick to the extent that he was unable to attend work between 26 and 29 February. In respect of this period, the absence was paid as sick leave in the usual, monthly pay cycle.

MR ROBERT HOFFMANN

34    Mr Hoffmann has been employed by the company since 10 November 2008. He, too, holds an Operator position on a full-time basis. Between the commencement of his employment and 3 December 2013, Mr Hoffmann had taken 89 shifts of paid sick leave. The later of these included paid sick leave for periods during October and November 2013 in respect of a stress related condition. During the later of these periods, on 5 November 2013, he received advice from the Mining Manager at the Hail Creek mine (Mr Michael Priestly) that his roster and commuter allowances would cease to be paid from 19 November 2013 and that his salary would cease to be paid from 3 December 2013 as a result of his extended sick leave. On 3 December 2013 he was sent a letter in like terms to that later sent to Mr Atherton on 7 February 2014. Mr Hoffmann cannot recall, precisely, when he received that letter. He places the time of his receipt of it as on the day he returned to work following the October/November periods of sick leave already mentioned. Looking at his leave record, which shows all types of leave (Affidavit of Robert Hoffmann, annexure RH2) and given the date of the letter, I infer that Mr Hoffmann more probably than not received the letter in the first week of December 2013, either on or after 3 December.

35    Mr Hoffmann has the misfortune to suffer from what he described as “a stomach condition”. Suffice it to say, a sequel of that condition and related surgical treatment is that he sometimes becomes unwell to the extent that he has occasion to seek sick leave. Following his receipt of the letter of 3 December 2013, one such occasion arose in May 2014. When he requested leave from his supervisor, he was told that he had exhausted all his sick leave and would have to take unpaid leave. This advice, in conjunction with that in the letter of 3 December 2013 moved Mr Hoffmann to seek annual leave instead. This same supervisor informed him that he was not able to substitute annual leave for sick leave.

36    In January this year, Mr Hoffmann’s stomach condition necessitated his hospitalisation and a related absence from work. On this occasion, also when he informed his supervisor of this need to be absent and requested that he be allowed to use annual leave, he was informed that he could not substitute this for sick leave. In the result, though Mr Hoffmann’s absence from work was approved, he was not paid any sick leave in respect of this January 2016 period of absence while he was sick. On his return to work later in January this year, Mr Hoffmann was informed by the Mine Superintendent (a superior of his supervisor) that he should have been entitled to use annual leave for the period when he was sick.

37    In summary, the absences in 2014 and 2016 during which, though Mr Hoffmann notified he was sick (and provided medical certificate verification) he was absent from work but not paid sick leave were:

Unpaid absences

    2014 – 27, 28 and 29 May;

    2016 – 6, 7, 8, 9, 10, 16, 17, 18, and 19 January.

ACCESS TO PAID SICK LEAVE – A CLAUSE 7.6 DEFENCE?

38    Clause 13.7 of the Enterprise Agreement speaks of an employee having “access to paid sick leave on Total Salary when they are unable to work due to illness or injury”.

39    Each of the workers applied to be granted absence from work on the basis of “illness or injury” in the usual way, which was via contacting their supervisor once they saw a need for such leave. Have they been denied “access” to paid sick leave, contrary to the requirements of cl 13.7?

40    In respect of a predecessor enterprise agreement previously operative at the Hail Creek mine, the Hail Creek Agreement 2003 (the 2003 agreement), the Full Court, at [33], held that “have access to paid sick leave” meant “are entitled to paid sick leave”. The answer given by the Full Court in respect of cl 13.7 is consistent with its provenance.

41    Perhaps inspired by this construction, although not in so many words in submissions, the company contended by way of defence that the leave taken was paid sick leave. This was because it had now made payment in respect of any leave taken when sick but unpaid and that leave taken as annual leave when it ought to have been granted as sick leave was, nonetheless, paid with any resultant diminution in annual leave entitlements now reversed. From this it was said to follow that, notwithstanding the error in its approach to the construction of cl 13.7 and related administration of sick leave, there was no contravention of the Enterprise Agreement and thus no contravention of s 50 of the Act.

42    Support for this defence was said to be found in cl 7.6 of the Enterprise Agreement. To give relevant context, cl 7.1 ought also to be set out:

7    Remuneration

7.1    Full-time and Fixed Term Employees

    Full-time and fixed term Employees will be paid an annualised salary that includes provision for all ordinary hours averaged over a roster cycle, overtime penalties, loadings and all other payments or allowances (Total Salary).

    The Total Salary is comprised of a Role Base Salary, a Market Allowance, a Commute Allowance and a roster Allowance where applicable. Annexure 1 sets out the salary structure.

    The quantums of salary payable under this Agreement may be varied having regard to the provisions of Clause 7.5.

…

7.6    Method of Payment

    An Employee’s Total Salary following adjustment if required for a salary sacrificing arrangement, will be paid monthly into bank accounts of the Employee’s choice.

    Any errors in payments must be notified as soon as is practicable. Any over payments shall be recoupled from the Employee’s Total Salary, any accrued entitlements owing or any other payments made to Employees. Any under payments shall be rectified as soon as is practicable.

43    In respect of leave hitherto taken as unpaid sick leave, even though, on the true construction of cl 13.7 there existed an entitlement to paid leave, the company submitted that all that had occurred was that it had, as cl 7.6 anticipated, rectified an underpayment as soon as practicable.

44    A reference to cl 7.6 is not to be found in the Defence as originally pleaded. Rather, reference to it emerged in submissions in the course of the trial on the remitter from the Full Court and in response to an application by the CFMEU further to amend the Statement of Claim. It is desirable first to set out in more detail how that amendment application came about.

45    In the course of the CFMEU’s submissions, I raised with its counsel the subject of when it was that an employee “accessed” paid sick leave; was it on the day in respect of which absence was sought on account of illness or injury or was it when that worker was paid in respect of that absence? As hitherto pleaded, the case for the CFMEU had looked to the former only. Out of an abundance of caution, and there being no controversy that employees at the Hail Creek mine were in fact paid monthly, I granted the CFMEU leave further to amend the Statement of Claim so as to allege in each instance and in the alternative a contravention based on a failure to grant access to paid sick leave on the monthly pay day which covered the relevant absence. The company did not object to the granting of leave but did raise the issue just mentioned in response. Whether that is truly responsive just to amendment sought by the CFMEU is moot, as the issue was one which, if good at all, was also a defence to the CMFEU’s case as hitherto pleaded. It was though convenient to deal with the point as another construction issue in the case.

46    Neither in my earlier judgment nor in that of the Full Court on the subsequent appeal was there occasion to address when an employee has “access” to paid sick leave. As noted, the Full Court treated “have access to paid sick leave” as meaning “are entitled to paid sick leave”. In the original jurisdiction, deference must be given to that meaning. It must though be appreciated that the appeal did not require that there be any further exploration than that as to what, if anything else, was entailed in the expression “have access to paid sick leave”. More particularly, when does access to paid sick leave occur or, to take up the meaning given in the Full Court, when is the exercise of an entitlement to paid sick leave complete?

47    Within cl 13.7, “access” is used to govern the generic term, “personal leave”, as well as the specific term, “sick leave”. The use of the word “access” in clause 13.7 of the Enterprise Agreement is hardly idiosyncratic to the parties to that agreement. “Access” was, for example, used repeatedly by the Full Bench of the industrial commission then known as the Australian Industrial Relations Commission in the Re Request from the Minister for Employment and Workplace Relations—28 March 2008 – Award Modernisation Statement (AM2008/25-63) (2009) 187 IR 192 (Award Modernisation Decision) both in a context similar to that found in cl 13.7, as well as with reference to other forms of leave at [89], with reference to dispute resolution procedure training leave and, at [139] with reference to annual leave. As so used, and this includes its use in cl 13.7, “access” is being used as a transitive verb for which the meaning, “to obtain, acquire; to get hold of” is assigned by the Oxford English Dictionary (online edition http://www.oed.com/ viewed 16 June 2016). The notion of entitlement found by the Full Court is consistent with this but may not fully describe the extent of what is embraced by “access to” in relation to paid leave. By that I mean, entitlement is one thing, enjoyment of that entitlement is another. Axiomatically, denying the existence of the entitlement denies its exercise. This is a denial of getting hold of the entitlement, of access. But even conceding entitlement, denying the exercise of that entitlement is also a denial of access.

48    Clause 13.7 of the Enterprise Agreement stipulates the requirements for accessing paid sick leave or, put another way, for exercising the entitlement. The employee must “let their Manager know as soon as possible when they realise they are unable to attend work” and “provide a medical certificate or other evidence for any period of sick leave” if that Manager so requires in the exercise of their discretion. The prevailing arrangement, described above, by which employees notify by telephone their supervisor of a need for sick leave conforms to the requirements of cl 13.7. It is doubtless a feature of the managerial discretion in relation to the provision of a medical certificate or other evidence that it must be exercised reasonably and proximately to the employee’s request for leave. If these access requirements are met and the employee has, under the Enterprise Agreement, an entitlement to sick leave, he or she is entitled to that leave as paid sick leave.

49    That paid sick leave must be paid as part of the employee’s “Total Salary”. “Sick leave”, in my view, falls within the reference to “all other payments or allowances” in the definition of “Total Salary” found in cl 7.1 of the Enterprise Agreement. The effect of the first sentence of cl 7.6 is that “Total Salary” must be paid monthly. That materially includes payment of any component referable to any day (or shift) taken in the exercise of an entitlement to paid sick leave. The further provision in cl 7.6 in respect of the rectification of errors is not a licence to defer the payment of any element of “Total Salary”. If anything, that further provision takes as its premise that Total Salary is payable monthly.

50    I surveyed in my earlier judgment principles relating to the construction of an enterprise agreement. I do not repeat that survey. To that survey might now be added Moreton Bay Regional Council v Mekpine Pty Ltd (2016) 90 ALJR 420. That case concerned the construction of a lease, not an enterprise agreement. In their joint judgment, at 427 [54] and 428 [57], French CJ, Kiefel, Bell and Nettle JJ expressly adopted “business common sense” as a relevant consideration in the construction of the lease in question. It is difficult to see that this same consideration ought not to attend the construction of an enterprise agreement or, for that matter, that so doing is inconsistent with the authorities earlier surveyed. It is unnecessary in this case to see how, if at all, the Full Court’s observation, at [54], that the nature and quality of a director’s duties are too remote from the human endeavour of entering into and construing an enterprise agreement is relevant to construction can be reconciled with this more recent, “business common sense” approach of the High Court. It is enough that the company’s promoted construction of cl 7.6 as to when it may, without contravention, pay sick leave so as to have permitted access in accordance with cl 13.7 to paid sick leave defies cl 7 read as a whole, not also to mention business common sense.

51    As to the company’s separate submission that the appropriation of annual leave so as to make payment in respect of days taken when one or the other of the workers was absent due to illness or injury, the short answer is that this leave is a separate entitlement. On the construction of cl 13.7 adopted by the Full Court, each of the workers, on each occasion when they notified an absence from illness or injury, had a subsisting entitlement to paid sick leave. Yet on behalf of the company each was told, by the letters respectively sent between 3 December 2013 and 31 March 2014, that he had no such entitlement. When leave due to illness or injury was sought the company declined to pay such leave, instead paying them not at all at the related monthly pay day for the absence or appropriating a different leave entitlement to the end of payment for that absence. Insofar as that appropriation was, at all, authorised, that authorisation was engendered by what has proved to be not just misleading but false advice from the company as to the subsisting existence of an entitlement to paid sick leave. Neither of the company’s recent practices with respect to the workers can amount to affording access, on the days hitherto sought, to paid sick leave. There is no merit in the company’s defence.

52    The process of accessing paid sick leave commences when an employee contacts his or her manager. That is what occurred here. It is not complete until that employee is not just granted leave but paid at the next applicable monthly pay day in respect of that leave. Using business common sense as a guide, it is consistent with cl 13.7 for the company to be conceded an entitlement to withhold payment pending the provision, if reasonably required, of a covering medical certificate or other evidence, or at least to pay provisionally, at the next applicable monthly pay day, pending the provision of such a certificate or other evidence. Were such a certificate or other evidence not provided, the company might then, in accordance with cl 7.6, recover that provisional payment as an over-payment. In this case, it is not necessary to delve further into the application of cl 13.7. Each of these workers sought access by a means which conformed with cl 13.7 to a sick leave entitlement and furnished in a proximate way a response to any requirement for a medical certificate or other evidence. Such was the company’s view of the operation of cl 13.7, each was denied on the day sought or additionally prospectively any further days sought paid sick leave. The company’s consistent and erroneous position was that these workers had no sick leave entitlement at all.

53    In my view, this means that, in the circumstances of this case, the primary position of the CFMEU as to when the contraventions occurred is the preferable one. It is possible to conceive of other cases where an employer concedes an entitlement to sick leave, grants that leave and then fails to make payment in respect of that leave at the applicable pay day. In such cases, the denial of access to paid sick leave would occur at the later point when payment in respect of that leave was not made. Here, the denial is earlier in time with the failure to pay in respect of sick leave being but confirmatory of a denial of access which has already occurred.

54    It follows then that, in respect of each and every of the absences respectively detailed above the company has refused access to paid sick leave. It has thus contravened cl 13.7 of the Enterprise Agreement.

PENALTY

55    Given the substantial absence of any evidentiary controversy, the parties invited and I agreed to the adoption of a course whereby submissions as to both liability and, if there were liability, penalty were made at the one time.

56    Section 546 of the Act empowers the Court to 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. Section 50 of the Act is a “civil remedy provision”: s 539(1) and Item 4 in the table in s 539(2). The operation of s 546 of the Act can be, and in this case is, affected by s 557 of the Act in terms of what is, for the purposes of the imposition of a penalty to be taken as a single contravention.

57    The question then becomes how are these contraventions of s 50, constituted by contraventions of cl 13.7, to be treated for the purposes of s 557 of the Act? How to answer that question is not without difficulty in this case.

58    Materially, s 557 provides:

557    Course of conduct

(1)    For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if:

    (a)    the contraventions are committed by the same person; and

(b)    the contraventions arose out of a course of conduct by the person.

    (2)    The civil remedy provisions are the following:

    …

(c)    section 50 (which deals with contraventions of enterprise agreements);

It is common ground that a civil penalty has not previously been imposed on the company. This means that s 557(3) of the Act does not render s 557(1) inapplicable.

59    The contraventions of s 50 are, in this instance, each constituted by a contravention of but one term of the Enterprise Agreement. So construed, s 557 has a like operation to earlier analogues: Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153 (Rocky Holdings Case). Thus, the focus of inquiry in respect of what is, by s 557(1), to be taken to be a single contravention is, in this case, whether the contraventions of cl 13.7 of the Enterprise Agreement arose out of a single course of conduct by the company?

60    Neither party suggested that, so approaching the circumstances, the effect of s 557(1) was that there was nonetheless a contravention on each and every day access to sick leave was refused. That is clearly correct. Rather, the choice presented was this. The CFMEU submitted that there is a separate course of conduct with respect to each of the six workers such that, in the application of s 557(1), there are six single contraventions. For its part, the company submitted that there is but one course of conduct in respect of one term of the Enterprise Agreement such that the effect of s 557(1) is that there is a single contravention only.

61    The company did not lead any evidence from a senior officer as to the making of a particular, anterior strategic decision as to adopting a particular construction of cl 13.7 of the Enterprise Agreement with respect to its employees at the Hail Creek mine. Even so, the inference is inescapable, when one has regard to the letters respectively sent to the workers between 3 December 2013 and 31 March 2014, that there must have been such a decision, if not within the company itself then by a senior officer in another Rio Tinto controlled company providing services to the company, which has then been operationally implemented by the company. The company invited the drawing of such an inference. With that premise, the company then submitted that the operational implementation of that decision, highlighted by the six instances proved, constituted a single course of conduct.

62    The riposte to this by the CFMEU was that this analysis was made at too general a level of abstraction and that the operational implementation of the decision had had different consequences for each of the six workers. Those different consequences are evident enough from the particular differing experiences of each worker as to a need for paid sick leave between the start of December 2013 and as recently as May this year.

63    I was initially attracted to the CFMEU’s submission as to the operation of s 557(1) in the circumstances of this case but, on reflection, I consider that I am compelled by prior authority, including a judgment of mine in an earlier case, to accept the company’s submission.

64    I was earlier called upon to consider the operation of s 557 of the Act in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (No 2) [2010] FCA 652 (Queensland Rail Case). There, too, there was but one term (the consultation clause) in each applicable industrial instrument with which particular respondents did not comply - QR Limited had contravened one term in each of 12 separate instruments, QR Passenger had contravened one term in respect of seven separate instruments and QR Network had contravened one term in the only instrument applicable to it. The union applicants in that case submitted, and I accepted, contrary to the submission of those respondents, that the operation of s 557(1) was such that there were 20 single contraventions. The respondents in that case had submitted that the effect of s 557(1) was that there was but one. On the subsequent appeal, the Full Court did not agree that the case was one for the imposition of maximum penalties in respect of those 20 contraventions, but accepted as correct my characterisation as to how s 557(1) operated in the circumstances of that case, remarking, “There may be one course of conduct in respect of each agreement associated with the relevant term in each of many agreements.”: QR Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (2010) 204 IR 142 at 163 [48] per Keane CJ and Marshall J (Gray J agreeing). The contraventions by the respondents in that case affected 10,300 employees. Had the application of s 557(1) promoted by the CFMEU in this case been adopted in the Queensland Rail Case, the conclusion would have been that there were 10,300 contraventions.

65    In reaching my conclusion as to the operation of s 557(1) in the circumstances of the Queensland Rail Case, I gained assistance, as I do again in the present case, from the relevant explanatory memorandum. At [2189] and [2190] of the Explanatory Memorandum, the following examples are given as to how it was envisaged that s 557(1) would operate:

2189    For example, if a company contravenes a single term of a modern award in respect of ten employees, these ten contraventions are taken to be a single contravention. This means that the maximum penalty that the Court can impose for the contravention is 300 penalty units.

2190    Similarly, if a company contravenes five separate terms on a modern award in respect of ten employees, these 50 contraventions are taken to be five contraventions. This means that the maximum penalty that the Court can impose is five times a maximum penalty of 300 penalty units.

The first of these examples is apposite in the circumstances of this case.

66    In Fair Work Ombudsman v Ramsey Food Processing Pty Ltd (No 2) [2012] FCA 408 Buchanan J adopted a like approach to characterisation of conduct to that which I had adopted in the Queensland Rail Case. The case before Buchanan J concerned not contraventions of the Act and an enterprise agreement but rather of the Workplace Relations Act 1996 (Cth) (the WR Act) and an award (the Federal Meat Industry (Processing) Award 2000). The Rocky Holdings Case confirms that s 557(1) operates in a like way to its earlier analogue, s 719(2) of the WR Act. The circumstances were that ten employees had not been provided with the required notice of termination of employment, ten employees had not been paid severance pay as required and eight employees had not been paid accrued annual leave on termination of employment as required. Buchanan J rejected a submission that the effect of s 719(2) was that there were 28 contraventions, instead concluding that there were three. His Honour remarked, at [2]:

On one view, the failure to make any of the required payments arose from a single course of conduct. They all arose from a determination by the respondents that no payment would be made upon the termination of employment of any of the employees, or the employees as a group. However, this approach gives insufficient attention to the separate legal character of the three forms of obligation earlier identified. I am satisfied that each of those forms of obligation requires separate recognition. I am not, however, satisfied that each individual example of defiance of an obligation is permitted separate recognition. In my view the individual examples, constituted by the failure to make payments to particular individual employees, arise out of a course of conduct in each of the three instances.

67    In this case, there was but one strategic decision which was that one term, cl 13.7, meant that its employees had no more than an entitlement to paid personal leave as specified in the National Employment Standards. There was a resultant determination to implement that decision concerning that one term in individual cases of which six are offered by the present proceedings. Those six individual cases offer what are but examples which arise out of a single course of conduct in respect of one term of the enterprise agreement.

68    It follows that, in the circumstances of this case, the multiple failures by the company to afford access to paid sick leave are, by virtue of s 557(1) of the Act, taken to constitute not six contraventions but rather only one contravention.

69    What ought to be the penalty in respect of that deemed single contravention?

70    The penalty, as specified in s 539 of the Act, is 60 penalty units. For an individual, that specification is the maximum penalty: s 546(2)(a); for a body corporate such as the company the maximum is five times that specification, in other words, 300 penalty units: s 546(2)(b) of the Act. The amount of a penalty unit is specified in s 4AA of the Crimes Act 1914 (Cth). The applicable specification is determined by the date of the contravening conduct: Murrihy v Betezy.com.au Pty Ltd (No 2) (2013) 221 FCR 118 at 121-127 [6]-[28]. At the time when the company embarked in December 2013 on what is taken by s 557 of the Act to be a single course of conduct, the effect of s 4AA of the Crimes Act 1914 was that the amount of a penalty unit was $170. Thus, expressed in dollar terms, the maximum penalty in this case is $51,000.

71    It was common ground between the parties that this was not a case warranting the imposition of the maximum penalty. I agree. Indeed, to take a contrary view would be inconsistent with the approach of the Full Court in the appeal in the Queensland Rail Case.

72    In Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union (2008) 171 FCR 357 (Plancor v LHMU), Branson and Lander JJ (at 375 [57]) referred with approval to a collation of considerations gathered by Mowbray FM in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7, derived from earlier judgments of this Court and described by Tracey J in Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14 as “potentially relevant and applicable” in cases entailing a need to consider the imposition of pecuniary penalties in cases such as the present. Also in Plancor v LHMU and with respect to such collations, Branson and Lander JJ particularly emphasised an observation made by Buchanan J in Australian Ophthalmic Suppliers v McAlary-Smith (2008) 165 FCR 560 at 580 [91] with respect to the need to avoid transforming these considerations into “a rigid catalogue of matters for attention”. As Buchanan J further observed in that case, “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 obligations”.

73    More recently, in Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 90 ALJR 113, French CJ, Kiefel, Bell, Nettle and Gordon JJ observed, at 127 [55], in respect of civil penalty regimes compared with the criminal law:

No less importantly, whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance:

“Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act]. ... The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.”

[Footnote reference omitted]

74    Though the object of civil penalties is “to attempt to put a price on contravention”, it is necessary to remember that the maximum price is fixed by parliament. It would be quite wrong, in imposing penalty, for a court to fix a penalty higher than that counselled by such of the considerations collated in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 as were applicable to the circumstances of a particular case on the basis that the resultant “price” was inadequate because of a failure by parliament to adjust the maximum for the effects of inflation. One must in a case like the present make a penalisation value judgment within the limit parliament has chosen to fix.

75    The company chose not to lead any evidence as to what prompted the review of sick leave entitlements referred to in the letters sent to the workers between 3 December 2013 and 31 March 2014. As the Full Court’s judgment reveals, there has been longstanding like provisions to cl 13.7 in earlier agreements applicable at the Hail Creek mine. The entitlements are more generous than those otherwise enjoyed under more generally applicable industrial regulation (as mentioned in my earlier judgment). From this one might infer, and I do, that the review was prompted by a desire on the part of the company to reduce, if lawfully possible, its overall labour costs.

76    The entitlement to paid sick leave conferred by cl 13.7 is part of the price that the company has, by the enterprise agreement, agreed to pay to attract and keep labour to and at its mine. The contravention of that agreement has not been victimless. Each of the workers and, indirectly where they have them, their dependents has been affected. The effects have not just been financial insofar as leave has been unpaid. Inferentially, there must have been an associated emotional impact on each of the workers by the disturbance of their hitherto understanding and experience of paid sick leave entitlements at the mine. In some cases, workers whose illness or effects of injury would otherwise reasonably have moved them to access paid sick leave have felt compelled to attend at work notwithstanding their condition. In other cases, the separate entitlement to annual leave has been reduced in order that an income stream be maintained while ill or suffering from the effects of injury.

77    To reduce an annual leave entitlement is to reduce a worker’s enjoyment of the amenities of life away from the workplace and the greater opportunity for the related society of friends and family. That annual leave entitlement forms part of the balance between recreation and labour for which provision is made in the Enterprise Agreement. As to that balance, it is now almost two centuries since the English socialist, Robert Owen, promoted, in 1817, the ideal that workers should enjoy, “8 Hours Work, 8 Hours Recreation, 8 Hours Rest” (“888”), an ideal taken up in Australia in 1856 when, on April 21, Victorian Stonemasons downed tools at the construction site of the Old Quadrangle Building, the original site of Melbourne University and marched on parliament in support of that ideal (see: “Eight Hour Day Monument” Monument Australia: http://monumentaustralia.org.au/themes/culture/social/display/32235-eight-hour-day-monument viewed 17 June 2016). What was once an ideal is now accepted and often the subject of even more generous provision in respect of time for recreation. To recall this history is to highlight that conduct by an employer which diminishes the provision for a worker’s recreation struck in an industrial bargain is not to be trivialised.

78    Accepting all this, given the conclusion earlier reached by me on the separate question in this case, I could hardly describe the company’s adoption of a different construction of cl 13.7 as idiosyncratic. It is not a case where, knowing the true construction of that clause, the company wilfully set out to contravene it for the purposes of economic advantage.

79    The company has in these proceedings always co-operated in what (at least as was seen at the time) was conducive to their efficient and expeditious resolution. Though that is a form of co-operation in the administration of justice, it is not of a kind that, as a matter of sentencing principle, resonates in a discounting of a penalty otherwise applicable as does an acknowledgement of a contravention at the earliest available opportunity.

80    Even after having the benefit of the Full Court’s construction of cl 13.7, the company maintained its stance that there was no resultant contravention in light of its submitted construction of cl 7.6 and asserted payment of hitherto unpaid sick leave or, as the case may be, re-crediting of hitherto appropriated annual leave. Of course it was always for the CFMEU to prove in law and in fact the asserted contraventions but the basis upon which a defence was maintained was, as I have observed above, contrary to business common sense. In these circumstances, any payments of the hitherto unpaid sick leave and any re-crediting of hitherto appropriated annual leave are not truly indicative either of insight or remorse, as opposed to the laying of a foundation for a perceived but unmeritorious defence. That the company chose to continue to deny any contravention was its right. That it chose to exercise this right is, most certainly, not, in itself, an aggravating factor in relation to penalty. It is just a case where there is neither evidenced apology based on insight derived from having had the benefit of the Full Court’s judgment nor remorse.

81    Related to a lack of insight is that, even after the Full Court delivered its judgment in October last year and as recently as May this year, the company continued, on occasion, to deny particular workers access to paid sick leave, contrary to the construction of cl 13.7 determined by the Full Court.

82    Within the limit fixed by parliament, these factors to me bespeak a need to recognise deterrence both specific to the company and more generally in the imposition of a penalty. That is so even though the company has not hitherto been penalised. The company submitted that it was unlikely to re-offend. In relation to paid sick leave and given the rejection now of its cl 7.6 based defence, I am prepared to and do accept this but its promotion of a construction of cl 7.6 contrary to business common sense is of concern. Relative to the maximum, the penalty ought to be at a level which reflects an absence of remorse in relation to the consequential effects at the time, financial and otherwise, of denying access to paid sick leave.

83    No comparable penalty cases were cited by either party in submissions from which a range might be determined. The CFMEU did submit that the case was one which one might describe as within a “low to medium” range, suggesting in so doing that this would be recognised by a penalty in the order of 40 per cent of the maximum. Were this just, as the company put it, a case of misinterpretation, I should have been inclined to accept the union’s suggestion as to how in percentage of maximum terms the contravening conduct might be recognised in a penalty. To me, the manifested, subsequent absence of insight or remorse once the misinterpretation was exposed by the Full Court suggests that the penalty ought to be somewhat higher.

84    When all is said and done, what is called for is a discretionary value judgment, not the application of a mathematical formula. In my view, the penalty necessary to maintain public confidence in adherence to the requirement to observe the terms of an enterprise agreement is, in the circumstances of the present case, $24,000.

85    The parties were agreed that it was appropriate, in the exercise of the discretion conferred by s 546(3) of the Act, to order that this penalty be paid to the CFMEU. That is the usual way in which, in a case like this, that discretion is exercised: Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4. In that case, at [117], the Full Court observed:

It is as clear today, as it was in 1904, that unions will not always, or invariably, be the prosecutor in an enforcement proceeding under industrial legislation. Yet the principle adopted by the primary judge would have the effect of stultifying civil penalty proceedings by persons affected by a contravention who are not backed by industrial power of one sort or another.

It may be doubted whether, without the “industrial power” of their union, any of the workers in this case would have been able to afford to institute the civil penalty proceedings, let alone prosecute them to intermediate appellate level in order to vindicate an apprehended right and seek the penalisation in respect of its denial. Parliament has recognised that an industrial organisation such as the CFMEU has a legitimate role in securing compliance with the statutory obligation to observe the terms of an enterprise agreement by conferring standing upon such an organisation to institute a proceeding such as the present. In Construction Forestry Mining and Energy Union v North Goonyella Coal Mine Pty Ltd [2013] FCA 1444, I had occasion to recall the history of trade unionism. Like that case, the present is an example of how in modern times a trade union may continue to serve both the public interest and the interests of its members. Given that, amongst other members of the Court, I have had occasion to be censorious of other behaviours of the CFMEU and certain of its officers (in my case, see: Director, Fair Work Building Industry Inspectorate v Cradden [2015] FCA 614) it is only fair to acknowledge that there is another side to this union. To order that the penalty be paid to the union is to recognise how that other side has served a public interest, as well as the interests of the six worker members.

86    There is also agreement between the parties that the company should be allowed one month within which to pay the penalty.

87    The CFMEU has also sought declaratory relief related to the findings of contraventions. The company questioned whether, in light of the making of payment in respect of hitherto unpaid sick leave and the re-crediting of hitherto appropriated annual leave the granting of such relief was warranted. Even assuming that these actions were evidenced, this is not a case where the underlying dispute has settled, as the promotion of the cl 7.6 based defence evidenced. Having regard to the discussion of principle by the Full Court in Cruse v Multiplex Ltd (2008) 172 FCR 279 at 296-299 [50] - [55], this is a case where it is appropriate to grant declaratory relief.

88    There will be orders accordingly.

Associate:

Dated:    22 June 2016