FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Mining and Energy Union v De Martin & Gasparini Pty Limited (No 2) [2017] FCA 1046

ORDERS

THE COURT ORDERS THAT:

1.    The parties provide the Court with short minutes of order within 14 days, including a timetable for the further hearing in relation to relief and any other orders that can be agreed having regard to these findings and reasons.

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

REASONS FOR JUDGMENT

Table of Contents

WIGNEY J:

1    In June 2017, De Martin & Gasparini Pty Limited found itself between the proverbial rock and a hard place. On the one hand, as a company that operated in the building industry, it faced the impending onset of the Code for the Tendering and Performance of Building Work 2016 (Cth) (the Code), including its highly prescriptive and potentially punitive provisions concerning the content of enterprise agreements. On the other hand, it faced its employees and their union, who perhaps understandably wanted to retain the benefit of their existing enterprise agreement and the ability to decide whether or not to approve variations to it. This case concerns the actions that De Martin & Gasparini took in response to the conundrum it found itself in.

2    De Martin & Gasparini entered into an Enterprise Agreement with its employees and their union, the Construction, Forestry, Mining and Energy Union (CFMEU), in March 2015. The agreement provided that it was to remain in force until 31 March 2018. While at the time the agreement was negotiated the parties appear to have contemplated that some form of building code might come into existence in the future, the Code did not commence operation until 2 December 2016, some 20 months later. The Code provided that building industry participants were not to be covered by enterprise agreements that included certain types of clauses. More ominously, the Code provided that a building industry participant which was covered by an existing enterprise agreement that did not comply with the Code, together with any of its related entities, would be ineligible to tender for, be awarded, or perform Commonwealth Government funded building work after a specified transitional period.

3    The difficulty that De Martin & Gasparini found itself in was that some of the clauses in the Enterprise Agreement were not permitted by the Code. To make matters worse, in February 2017 the end date of the transitional period, which was originally 29 November 2018, was brought forward to 1 September 2017. Perhaps not surprisingly, the fact that come 1 September 2017 De Martin & Gasparini might find itself covered by an enterprise agreement that did not comply with the Code was perceived to be a major problem, not least because De Martin & Gasparini’s related entities included its parent company, Boral Limited and other companies in the Boral Group. Needless to say, the Boral Group was a large group of companies operating in the construction industry.

4    De Martin & Gasparini initially endeavoured to overcome the problem caused by the Code by attempting to vary the Enterprise Agreement to make it “Code compliant”. That required the agreement of its employees. Securing the agreement of the employees was made difficult by at least two considerations. First, the proposed varied agreement was perceived by the employees and the CFMEU to diminish various rights or conditions the employees had under the agreement. Second, the CFMEU appears to have been generally opposed to varying enterprise agreements to make them Code compliant, at least while there was still a prospect that the Senate might vote to disallow the Code pursuant to a motion that was to be determined in August 2017. In any event, the proposal to vary the agreement was put to the workers on 28 June 2017 and their votes were taken. A majority of the employees voted against the proposed variations.

5    If De Martin & Gasparini found itself between a rock and a hard place, its response to the employees’ refusal to vary the Enterprise Agreement was to put the employees in an even harder place. On the afternoon of the day that the employees voted not to approve the proposed variations to the Enterprise Agreement, a number of senior officers of De Martin & Gasparini and Boral, and their lawyers, met and conferred to consider the “next steps”. While there is some dispute about precisely what was discussed and agreed at that meeting, in one way or another the next step involved potentially making all the employees who were covered by the Enterprise Agreement redundant by 31 August 2017. Given that this would constitute a ‘major workplace change’, a clause in the Enterprise Agreement required De Martin & Gasparini to consult with the employees and the CFMEU. A meeting of the employees was therefore organised.

6    A few days later, on 3 July 2017, two managers employed by De Martin & Gasparini, Mr Louie Mazzarolo and Mr Greg Miller, spoke at a meeting of the employees. Mr Mazzarolo read a memorandum to the workers which advised them that De Martin & Gasparini was “seriously considering” making all its employees who were covered by the Enterprise Agreement redundant. The reason for that was said to be because of the risk to the Boral Group as a result of De Martin & Gasparini’s “inability to achieve Code compliance”. Other things were said at the meeting, though the precise content of the further statements by Mr Mazzarolo and Mr Miller was contentious. Mr Miller also conducted meetings with small groups of employees in relation to the proposed redundancies at various De Martin & Gasparini project sites on 5 July 2017. While the content of those discussions was again contentious, the discussions appeared to touch on the possibility of a further vote.

7    The CFMEU alleged that, by its actions through Mr Mazzarolo and Mr Miller, De Martin & Gasparini took adverse action against the employees because they had a workplace right in contravention of s 340 of the Fair Work Act 2009 (Cth), and threatened to take action against the employees with the intention of coercing them to vary the Enterprise Agreement contrary to s 54 of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (Building Act). It also alleged that Mr Mazzarolo and Mr Miller were involved as accessories to De Martin & Gasparini’s contraventions, and that Mr Mazzarolo and Mr Miller themselves contravened s 54 of the Building Act.

8    In relation to s 340 of the Fair Work Act, the CFMEU alleged that in proposing to employees covered by the Enterprise Agreement that they could be made redundant, De Martin & Gasparini threatened to dismiss the employees, injured them in their employment, and altered their positions to their prejudice. On the CFMEU’s case, that action was taken because the employees had and continued to have workplace rights: being the benefit of the Enterprise Agreement and the ability to vote in relation to the variation of the Enterprise Agreement, which is a process under the Fair Work Act. In relation to s 54 of the Building Act, the CFMEU alleged, in short, that Mr Miller and Mr Mazzarolo, and through them De Martin & Gasparini, threatened to take action against the employees with the intention of coercing them to vary or approve a variation of the Enterprise Agreement.

9    The CFMEU’s allegations raise complex questions of fact and law. In the first instance, it is necessary to determine exactly what was said and done at the various meetings, in particular the mass meeting on 3 July, but also the smaller meetings on 5 July. It is then necessary to determine whether the words and conduct as found constituted adverse action, for the purposes of s 340 of the Fair Work Act, or threatening to take action for the purposes of s 54 of the Building Act. The most complex questions, however, undoubtedly involve determining the reasons and intentions of the relevant actors. In relation to s 340, if the words and conduct of Mr Mazzarolo and Mr Miller constituted adverse action, was that adverse action taken because the employees had the benefit of the Enterprise Agreement or had exercised their right to vote under the Fair Work Act in relation to any proposed variation to the Enterprise Agreement? If the words and conduct of Mr Mazzarolo and Mr Miller constituted a threat to take action against the employees, was that done with the intention of coercing the workers to vary the agreement?

PROCEDURAL BACKGROUND

10    The CFMEU initially sought urgent interlocutory relief in respect of the proposed redundancies. The interlocutory application was resolved on the basis of undertakings given, without admission, by De Martin & Gasparini in circumstances where the final hearing was expedited.

11    The expedited final hearing ultimately proceeded over six hearing days. Judgment was reserved. Given the importance of ensuring that the parties knew where they stood prior to the end of the transitional period on 31 August 2017, at least in respect of the issues that arose in this proceeding, it was initially intended to hand down this judgment on 21 August 2017. That remained the intention until two developments occurred.

12    The first development was an application by the CFMEU to amend its originating application and amended statement of claim. That amendment application arose in the following way. In its originating application and amended statement of claim, the CFMEU claimed that the alleged actions of Mr Mazzarolo and Mr Miller in threatening to take action against the employees with the intention of coercing the employees amounted to contraventions of s 343 of the Fair Work Act. After judgment was reserved, however, the Court requested further submissions from the parties concerning the operation of s 54 of the Building Act. Section 343 of the Fair Work Act and s 54 of the Building Act are in very similar terms, save that s 54 relevantly applies only in the case where the action or threatened action was taken “with intent to coerce another person, or … apply undue pressure … to agree, or not to agree … to make, vary or terminate a building enterprise agreement”. Importantly, s 54(5) relevantly provides that, to the extent that s 343 of the Fair Work Act relates to the making, varying or terminating of an enterprise agreement, that section does not apply if the agreement is a building enterprise agreement. It seemed tolerably clear that the Enterprise Agreement was a building enterprise agreement as defined in the Building Act.

13    The CFMEU’s response to the request for submissions was to seek leave to amend its application and pleading to effectively substitute alleged contraventions of s 54 of the Building Act for what was originally alleged to be contraventions of s 343 of the Fair Work Act. The CFMEU claimed that it had not been aware of s 54 of the Building Act, that it mistakenly alleged contraventions of s 343 of the Fair Work Act when it should have alleged contraventions of s 54 of the Building Act, that the effect of s 54(5) was that its existing case under s 343 of the Fair Work Act was not maintainable, and that if the amendment was permitted, it would not seek to call any further evidence. It submitted that the amendment should be permitted so that the real issues in dispute between the parties could be determined by the Court.

14    De Martin & Gasparini, Mr Mazzarolo and Mr Miller opposed the CFMEU’s amendment application. They submitted that they would be prejudiced by the amendment, primarily because s 54 of the Building Act was in at least one respect broader than s 343 of the Fair Work Act. The intention element in s 343 of the Fair Work Act is an intention to coerce, whereas the intention element in s 54 of the Building Act is an intention to coerce or apply “undue pressure”. As will be seen, there is considerable authority in relation to the element of intention to coerce in this context. What little authority there is in relation to the element of intention to apply undue pressure, however, tended to suggest that it may have a wider operation, or impose a lower threshold, than the element of intention to coerce: John Holland Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2009] FCA 235; 174 FCR 526 at [56]-[61]; Australian Federation of Air Pilots v Jetstar Airways Pty Ltd [2014] FCA 15 at [13]. It was submitted that in those circumstances, it would be unfair to permit the CFMEU to amend after the evidence and submissions had concluded and judgment had been reserved. Other submissions were advanced, though it is unnecessary to refer to them at length. Not surprisingly they focussed on the late stage at which the amendment application was being made.

15    The CFMEU’s amendment application was allowed, but only to the extent that the amendments did not include the allegation that Mr Mazzarolo and Mr Miller acted with the intention of applying undue pressure on the employees. The CFMEU was restricted to alleging that the alleged contraventions of s 54 of the Building Act were made out on the basis that there was an intention to coerce. The parties agreed that if the amendments were limited in that way, it would be unnecessary to call any further evidence, or make any further submissions. In those circumstances there would be no prejudice to De Martin & Gasparini, Mr Mazzarolo or Mr Miller. Nor would there be any other basis to refuse the amendment application. Limited in that way, the CFMEU’s case was factually and legally the same as it had been prior to the amendment, save that the alleged conduct contravened s 54 of the Building Act rather than s 343 of the Fair Work Act.

16    The second development was that De Martin & Gasparini requested that the Court defer handing down the judgment. In support of that request, evidence was adduced that indicated that on 23 August 2017 the employees were to vote in respect of a further proposed variation of the Enterprise Agreement. Preliminary advice had been received from the Australian Building and Construction Commission to the effect that the proposed amended enterprise agreement would meet the requirements of the Code. More significantly, it would appear that the CFMEU, as the industrial association able to represent the industrial interests of the employees, agreed with the proposed amended enterprise agreement. De Martin & Gasparini put forward a number of reasons why, given that development, the Court should not hand its judgment down on 21 August 2017 as proposed. It is unnecessary to detail those reasons. It was clear that the urgency had gone out of the situation and that there was no longer any pressing reason to hand the judgment down prior to 31 August 2017.

ADVERSE ACTION UNDER THE FAIR WORK ACT

17    Part 3-1 of the Fair Work Act contains a number of provisions the object of which is, amongst other things, to protect workplace rights and the exercise of those rights: s 336(1)(a).

18    Section 340(1), which provides protection against adverse action, is in the following terms:

340 Protection

(1)  A person must not take adverse action against another person:

(a)  because the other person:

(i)  has a workplace right; or

(ii)  has, or has not, exercised a workplace right; or

(iii)  proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or

(b)  to prevent the exercise of a workplace right by the other person.

19    In broad terms, s 340 relevantly contains two key elements. The first element is that a person does something that comprises “adverse action” against another person. The second is that the adverse action is taken “because” the other person has a workplace right, or has or has not exercised a workplace right, or proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right.

20    In relation to the first element, s 342 relevantly defines adverse action as follows:

342 Meaning of Adverse Action

(1)    The following table sets out circumstances in which a person takes adverse action against another person.

(Emphasis added)

21    As will be considered in more detail later, injuring an employee in her or her employment, for the purposes of category (b), extends beyond financial injury or the deprivation of contractual rights: it is applicable to “any circumstances where an employee in the course of his employment is treated substantially differently to the manner in which he or she is ordinarily treated and where that treatment can be seen to be injurious or prejudicial”: Squires v Flight Stewards Association of Australia (1982) 2 IR 155 at 164. It includes injury of any compensable kind: Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [1998] HCA 30; 195 CLR 1 at [4], discussing the analogous s 298K(1)(b) of the former Workplace Relations Act 1996 (Cth).

22    Likewise, prejudicial alteration of employment per category (c) is a broad category “which covers not only legal injury but any adverse affection of, or deterioration in, the advantages enjoyed by the employee before the conduct in question”: Patrick Stevedores at [4], discussing s 298K(1)(c) of the Workplace Relations Act; cited with approval in Qantas Airways Limited v Australian Licensed Aircraft Engineers Association [2012] FCAFC 63; 202 FCR 244 at [30].

23    Section 342(2)(a) relevantly provides that adverse action includes threatening to take action covered by the table in s 342(1). As discussed in some more detail later, a threat to take action can be conditional and generally requires the threat to be communicated directly or indirectly to the intended recipients: Construction, Forestry, Mining and Energy Union v State of Victoria & Ors [2013] FCA 445 at [219]-[229].

24    Finally, in relation to the first element of s 340, s 342(3) relevantly provides that adverse action does not include action that is authorised by or under the Fair Work Act.

25    In relation to the second element of s 340, s 341(1)(a) provides that a person has a workplace right if the person is, inter alia, entitled to a benefit under a “workplace instrument”; and s 341(1)(b) provides that a person has a workplace right if the person is able to initiate, or participate in, a process or proceeding under a workplace law. A “workplace instrument” is defined in s 12 as meaning an instrument that is made under, or recognised by, a workplace law and concerns the relationships between employers and employees. A workplace law is defined in s 12 as including the Fair Work Act itself. Part 2-4 of the Fair Work Act contains detailed provisions concerning enterprise agreements. An enterprise agreement is therefore a workplace instrument for the purposes of the Fair Work Act. As will be seen, the provisions of the Fair Work Act that deal with enterprise agreements include a process that persons covered by an enterprise agreement are able to initiate or participate in for the purposes of varying the agreement.

26    Perhaps more significantly, the requirement that the adverse action be taken “because” the other person, relevantly, had or had exercised a workplace right, means that it is necessary to determine whether the person took the action for a particular reason. In that regard, s 360 provides that for the purposes of Part 3-1, which includes s 340, “a person takes action for a particular reason if the reasons for the action include that reason”.

27    Importantly, s 361 effectively reverses the onus in respect of proving the reason that action was taken for the purpose of contraventions of Part 3-1 of the Fair Work Act, which includes s 340. Section 361 provides as follows:

361 Reason for action to be presumed unless proved otherwise

(1)    If:

(a)    in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and

(b)    taking that action for that reason or with that intent would constitute a contravention of this Part;

it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.

(2)    Subsection (1) does not apply in relation to orders for an interim injunction.

28    There is considerable jurisprudence concerning the “because” element in s 340 (and the similar element in s 346) and the operation of s 361 in that context. The leading authorities are Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; 248 CLR 500 and Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41; 253 CLR 243. The principles to be derived from those and other authorities in relation to this element will be considered later in these reasons.

29    Section 793, which provides for the circumstances in which the conduct of an officer, employee or agent of a body corporate is taken to have been the conduct of the body corporate, and also facilitates proof of the state of mind of the body corporate, is in the following terms:

793 Liability of bodies corporate

Conduct of a body corporate

(1)    Any conduct engaged in on behalf of a body corporate:

(a)     by an officer, employee or agent (an official ) of the body within the scope of his or her actual or apparent authority; or

(b)    by any other person at the direction or with the consent or agreement (whether express or implied) of an official of the body, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the official;

is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body.

State of mind of a body corporate

(2)    If, for the purposes of this Act or the procedural rules, it is necessary to establish the state of mind of a body corporate in relation to particular conduct, it is enough to show:

(a)    that the conduct was engaged in by a person referred to in paragraph (1)(a) or (b); and

(b)    that the person had that state of mind.

Meaning of state of mind

(3)    The state of mind of a person includes:

(a)    the knowledge, intention, opinion, belief or purpose of the person; and

(b)    the person's reasons for the intention, opinion, belief or purpose.

30    Section 550 of the Fair Work Act provides for a form of accessorial liability in respect of contraventions of civil penalty provisions. It is in the following terms:

550 Involvement in contravention treated in same way as actual contravention

(1)    A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.

(2)    A person is involved in a contravention of a civil remedy provision if, and only if, the person:

(a)    has aided, abetted, counselled or procured the contravention; or

(b)    has induced the contravention, whether by threats or promises or otherwise; or

(c)    has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or

(d)    has conspired with others to effect the contravention.

31    Section 340 is a civil penalty provision: s 539(1) and item 11 in the table in s 539(2). A person affected by a contravention of s 340 and an industrial association may apply to, inter alia, this Court, for orders in relation to the contravention: s 539(2) and columns 2 and 3 of item 11 of the table thereto; see also s 540(1)(a) and s 543(6)(b). There was no dispute that De Martin & Gasparini’s employees were affected by the alleged contravention, or that the CFMEU is an industrial association which is entitled to represent the employees’ industrial interests and therefore has standing to apply for orders in respect of the alleged contraventions. The maximum penalty for a contravention of s 340 is sixty penalty units: column 4 of item 11 in the table in s 539(2). As of 1 July 2017, this amounts to a maximum penalty of $12,600 per contravention: s 4AA of the Crimes Act 1914 (Cth).

COERCION UNDER THE BUILDING ACT

32    Section 54 of the Building Act provides as follows:

54 Coercion of persons to make, vary, terminate etc. enterprise agreements etc.

(1)    A person must not:

(a)    organise or take, or threaten to organise or take, any action; or

(b)    refrain, or threaten to refrain, from taking any action;

with intent to coerce another person, or with intent to apply undue pressure to another person, to agree, or not to agree:

(c)    to make, vary or terminate a building enterprise agreement; or

(d)    to approve any of the things mentioned in paragraph (c).

Note 1: See also Division 2 (reason for action and coercion).

Note 2: Grade A civil penalty.

(2)    Subsection (1) does not apply to protected industrial action.

…

(5)    To the extent that section 343 of the FW Act relates to:

(a)    the making, varying or terminating of an enterprise agreement; or

(b)    the appointment, or termination of appointment, of a bargaining representative for a proposed enterprise agreement;

that section does not apply if the agreement is a building enterprise agreement.

33    As has already been noted, s 54(1) of the Building Act essentially mirrors s 343 of the Fair Work Act, subject to its limited scope of operation in respect of making, varying, terminating or approving a building enterprise agreement as outlined above. The intention element in s 54(1) of the Building Act also includes the additional element of intention to apply “undue pressure”. For the reasons already given, however, the CFMEU’s case was limited to intention to coerce. Section 343 of the Fair Work Act also has a potentially wider operation than s 54 of the Building Act insofar as it applies to action taken against another person with the intent to coerce a third person. That difference is immaterial in the circumstances of this case. The CFMEU alleged that the threatened action was against the employees and was intended to coerce the employees.

34    Section 54(5) of the Building Act limits the operation of s 343 if it relates to varying a building enterprise agreement. The expressions ‘building enterprise agreement’ and ‘enterprise agreement’, are defined in s 5 of the Building Act as follows:

building enterprise agreement means an enterprise agreement that applies to building work (whether or not it also applies to other work).

…

enterprise agreement has the same meaning as in the FW Act.

35    ‘Building work’ is defined extensively in s 6 to include, relevantly, the construction, alteration, extension, restoration, repair, demolition or dismantling of buildings, structures or works that form, or are to form, part of the land, whether or not the buildings, structures or works are permanent. Work that is preparatory to this work, such as the laying of foundations is also ‘building work’ for the purposes of s 6. ‘Enterprise agreement’ is defined in s 12 of the Fair Work Act to mean a single-enterprise agreement or a multi-enterprise agreement, which are in turn defined in ss 172(2) and 172(3).

36    Section 56 of the Building Act is in similar terms to s 360 of the Fair Work Act. It provides that for the purposes of Part 2 of Chapter 6 of the Building Act, which relevantly includes s 54, a person takes action for a particular reason if the reasons for the action include that reason. It is not entirely clear if this section applies in the case of s 54, which does not refer to a person taking action for a particular reason, but rather refers to a person taking action with a particular intention. On the one hand, in some circumstances at least, there may not be a significant difference between saying that a person has taken action for a particular reason, and saying that the person has taken action for a particular purpose or with a particular intent. On the other hand, section 57 of the Building Act, like s 361 of the Fair Work Act, expressly distinguishes between taking action for a reason, and taking action with a particular intent. That would suggest that s 56 is limited to reasons, not intention. The CFMEU did not submit that s 56 applied in the case of its allegations of contravention of s 54.

37    Section 57 of the Building Act is in relevantly identical terms to s 361 of the Fair Work Act. When applied to s 54, the effect is that, where it is alleged that a person took action with an intention to coerce, it is presumed that the action was taken with that intention unless the person proves otherwise. As will be discussed in more detail later, however, there is authority to the effect that s 361 of the Fair Work Act does not apply where the alleged action taken by the person only constitutes a threat. Given that s 57 of the Building Act is in identical terms to s 361 of the Fair Work Act, the same principle would appear to apply to it.

38    Section 97 of the Building Act, which has no analogue in the Fair Work Act, concerns the capacity and state of mind of the person being coerced. It provides as follows:

97 Capacity, state of mind etc. of person being coerced etc.

In applying a provision of this Act that refers to:

(a)    coercing a person to do a particular thing; or

(b)    applying undue pressure to a person to do a particular thing; or

(c)    encouraging a person to do a particular thing; or

(d)    advising a person to do a particular thing; or

(e)    inciting a person to do a particular thing; or

(f)    engaging in conduct with the intention of doing any of the above;

it is not relevant whether or not that person is able, willing or eligible to do that particular thing.

39    The CFMEU did not contend that s 97 had any particular relevance to its case concerning contravention of s 54 of the Building Act. That was perhaps because there was no question that the employees were able and eligible to vote on varying the Enterprise Agreement

40    Section 94 of the Building Act is in the same terms as the corporate liability provision in s 793 of the Fair Work Act, to the effect that the conduct of an officer or employee of a corporation acting within their actual or apparent authority will be taken to have been engaged in by the corporation.

41    Section 92 of the Building Act provides for a form of accessorial liability in essentially the same terms, and with the same effect, as s 550 of the Fair Work Act.

42    Section 81 of the Building Act sets out the regime for civil penalties. Section 81(1) empowers the Court to impose a pecuniary penalty, damages or any other order the court considers appropriate in respect of a contravention of a civil penalty provision. Relevantly, s 83(1) clarifies that ‘any other order that the court considers appropriate’ includes the power to order injunctions and interim injunctions.

43    Section 81(2) sets the maximum penalties under the Act. The notation to s 54(1) indicates that a contravention of s 54 is a Grade A civil penalty. Section 81(2)(a) provides that the maximum penalty for a contravention of a Grade A civil penalty provision is 1000 penalty units for a body corporate, and otherwise 200 penalty units. Accordingly, the maximum penalty if De Martin & Gasparini is found to have contravened s 54 is $210,000, while the maximum penalty for Messrs Mazzarolo and Miller is $42,000 each: s 4AA of the Crimes Act.

ENTERPRISE AGREEMENTS UNDER THE FAIR WORK ACT

44    As noted earlier, Part 2-4 of the Fair Work Act contains detailed provisions concerning enterprise agreements. Having regard to the nature of the allegations in this matter, it is necessary to refer to some of the provisions that deal with the making, coverage, variation and termination of enterprise agreements.

45    Section 172(1), which provides for the making of enterprise agreements, is in the following terms:

172 Making an enterprise agreement

Enterprise agreements may be made about permitted matters

(1)    An agreement (an enterprise agreement) that is about one or more of the following matters (the permitted matters) may be made in accordance with this Part:

(a)    matters pertaining to the relationship between an employer that will be covered by the agreement and that employer’s employees who will be covered by the agreement;

(b)    matters pertaining to the relationship between the employer or employers, and the employee organisation or employee organisations, that will be covered by the agreement;

(c)    deductions from wages for any purpose authorised by an employee who will be covered by the agreement;

(d)    how the agreement will operate.

Note 1: For when an enterprise agreement covers an employer, employee or employee organisation, see section 53.

Note 2: An employee organisation that was a bargaining representative for a proposed enterprise agreement that is not a greenfields agreement will be covered by the agreement if the organisation notifies the FWC under section 183 that it wants to be covered.

46    The Fair Work Commission (FWC) must approve an enterprise agreement: s 186(1). The requirements and conditions for approval are contained in s 187.

47    Section 52 states that an enterprise agreement will apply to an employer, employee or employee organisation in relation to particular employment if the agreement is in operation, it ‘covers’ the employer, employee or employee organisation, and the application of the agreement is not precluded by any other provision of the Fair Work Act. Section 53(1) relevantly provides that an enterprise agreement will cover an employer or employee if the agreement is expressed, however described, to cover the employer or employee. An employee organisations such as the CFMEU will relevantly be covered by an enterprise agreement if the FWC notes in its approval decision that the agreement covers the organisation: s 53(2)(a). It should be noted that an employee organisation which was the bargaining representative for an enterprise agreement is entitled to make a written application to the FWC under s 183(1) to have the agreement cover it. If the relevant organisation makes an application under s 183, and the FWC approves the agreement, the FWC must note in its decision approving the agreement that the agreement covers the organisation: s 201(2).

48    Section 54, which sets out when an approved enterprise agreement commences and ceases to operate, is in the following terms:

54 When an enterprise agreement is in operation

(1)    An enterprise agreement approved by the FWC operates from:

(a)    7 days after the agreement is approved; or

(b)    if a later day is specified in the agreement—that later day.

(2)    An enterprise agreement ceases to operate on the earlier of the following days:

(a)    the day on which a termination of the agreement comes into operation under section 224 or 227;

(b)    the day on which section 58 first has the effect that there is no employee to whom the agreement applies.

Note: Section 58 deals with when an enterprise agreement ceases to apply to an employee.

(3)    An enterprise agreement that has ceased to operate can never operate again.\

49    Whether De Martin & Gasparini’s non-Code compliant Enterprise Agreement would remain in operation if all of the workers covered by the agreement were made redundant was a topic of some controversy between the parties. Suffice it to say, at this juncture, that for the purposes of s 54(2), ss 224 and 227 relate to formal applications to the FWC to terminate an agreement, and s 58 governs the interaction between an existing enterprise agreement and a replacement agreement which cover the same employees, and the circumstances in which the old agreement will no longer apply to the employees. Neither s 54(2)(a) nor s 54(2)(b) contemplate an enterprise agreement ceasing to operate by virtue of the employees to whom the agreement applies being made redundant.

50    Variations to enterprise agreements are governed by s 207 of the Fair Work Act. Section 207 relevantly provides that an agreement between a single employer and its employees may be jointly varied by the employer, the current employees covered by the existing agreement, and the current employees who will be covered by the varied agreement: s 207(1)(a). Those employees are together referred to as ‘affected employees’: s 207(2).

51    Section 208 relevantly provides that an employer may request the affected employees to approve a proposed variation by voting for it, including by ballot or electronically. A variation of an enterprise agreement is taken to be made when a majority of the affected employees who cast a valid vote approve the variation: s 209(1).

52    As with enterprise agreements generally, variations to an enterprise agreement have no effect until they are approved by the FWC: s 207(3). The mechanism and conditions for the FWC’s approval of variations are contained in ss 210 to 216. In summary, once a variation is made pursuant to s 209, an application for approval must be made to the FWC within 14 days: s 210. The FWC must make a determination according to the conditions and requirements in s 211, which relevantly require the FWC to approve the variation if it is satisfied of three things: first, that had an application been made for the approval of the agreement as a new agreement, in the form as proposed to be varied, the FWC would have been required to approve the agreement under s 186; second, that the nominal agreement does not exceed four years; and third, that there are no serious public interest grounds for not approving the variation. A variation can be approved with undertakings (ss 212, 213), and the FWC retains the power to refuse an application for approval (s 214).

53    In much the same way as variations, an employer and the employees covered by an enterprise agreement can jointly agree to terminate the agreement: s 219(1). The termination must be approved by the FWC: s 219(2). Employers may request that employees vote to approve a proposed termination (s 220(1)) and a termination is taken as agreed to when a majority of the employees cast a valid vote to approve the termination: s 221(1). Upon a termination being agreed to, an application for approval must be made to the FWC within 14 days (s 222(1), (3)), and the FWC must approve the termination if satisfied of the conditions in s 223.

THE BUILDING ACT AND THE CODE

54    To put the relevant events that occurred in late June and early July 2017 in context, it is necessary to refer briefly to some provisions of both the Building Act and the Code.

The Building Act

55    The Building Act commenced operation on 2 December 2016.

56    Section 34 of the Building Act allows the Minister to issue a code of practice to be known as the Building Code. Section 34(1) and (2) provide as follows:

34  Minister may issue Building Code

(1)    The Minister may, by legislative instrument, issue one or more documents that together constitute a code of practice that is to be complied with by persons in respect of building work.

Note:    The code is called the Building Code (see the definition of Building Code in section 5).

(2)    Without limiting subsection (1), the Minister:

(a)    must issue one or more documents under that subsection in relation to procurement matters relating to building work; and

(b)    may issue one or more documents under that subsection in relation to work health and safety matters relating to building work.

Note:    A single document may contain the entire Building Code (including the matters referred to in paragraph (2)(a) and, if applicable, paragraph (2)(b)).

57    Section 34(2E) is of particular relevance to the facts and circumstances of this matter. As enacted, s 34(2E) was in the following terms:

(2E)    If a document issued under subsection (1) includes requirements in relation to the content of building enterprise agreements, a building industry participant may, before 29 November 2018, submit expressions of interest or tender for building work funded (whether directly or indirectly) by the Commonwealth or a Commonwealth authority even if a building enterprise agreement, made before the document is issued, that covers the building industry participant does not comply with any one or more of the requirements.

Note:    A building enterprise agreement, made after the document is issued, that covers a building industry participant must comply with the requirements if the building industry participant is to submit expressions of interest or tender for building work.

(Emphasis added)

58    It is to be noted that s 34(2E) effectively prescribed a transitional period in respect of non-complying enterprise agreements made before the Code was issued. A building industry participant covered by such a non-complying enterprise agreement could submit expressions of interest or tender for building work funded by the Commonwealth before 29 November 2018. On 17 February 2017, however, the Building and Construction Industry (Improving Productivity) Amendment Act 2017 (Cth) amended s 34(2E) with the effect that the transition period was brought forward to 1 September 2017. It also inserted a new notation to s 34(2E), which clarified that “…a building enterprise agreement, made before the document is issued, that covers a building industry participant must comply with the requirements if the building industry participant is to be awarded or perform building work.”

The Code

59    The Code is a legislative instrument made under s 34(1) of the Building Act.

60    Section 6 of the Code, which sets out the Code’s application to building industry participants and their related entities, provides as follows:

6 Application of the code of practice

(1)    A building contractor or building industry participant that could be required to comply with this code of practice by section 34 of the Act becomes subject to this code of practice (a code covered entity) from the first time they submit an expression of interest or tender (howsoever described) for Commonwealth funded building work on or after the date this code of practice commences.

Related entities become code covered entities

(2)    A related entity of an entity (the first entity) becomes a code covered entity subject to this code of practice at the time the first entity becomes subject to the code of practice.

Code of practice applies to all new work

(3)    A code covered entity is subject to this code of practice in respect of all building work that is described in Schedule 1 for which an expression of interest or request for tender (howsoever described) was called on or after the date this code of practice commenced.

…

Note 4:    once a building contractor or building industry participant is subject to this code of practice, it and its related entities must comply with this code of practice on all new projects, including projects that are privately funded. However, some obligations in the code of practice only apply in respect of Commonwealth funded building work –see for example subsections 8(2)-(7) and Part 6.

61    There was no evidence that De Martin & Gasparini had submitted an expression of interest or tender following the commencement of the Code so as to bring itself within the terms of s 6(1). However, it was implicit from the way both parties conducted themselves, and conducted the proceedings, that they considered De Martin & Gasparini to be a ‘code covered entity’.

62    Section 3(2) defines “related entity” for the purposes of the Code in the following terms:

(2)    In this code of practice, an entity (the second entity) is a related entity of a code covered entity if the second entity is engaged in building work and is:

(a)    connected with the code covered entity by being a member of the entity; or

(b)    an associated entity (within the meaning of section 50AAA of the Corporations Act 2001) of the code covered entity.

Note:    two entities will be associated if they are related bodies corporate.

63    It can be seen the definition includes two limbs. The first limb relates to corporate structure; whether the entities are associated or connected as a matter of corporate structure. The second limb involves whether the related entity is “engaged in building work”. It was effectively common ground between the parties that Boral and other companies within the Boral Group that were engaged in building work were related entities of De Martin & Gasparini for the purposes of the Code.

64    Section 11 of the Code sets out the primary conditions an enterprise agreement must satisfy in order to be Code compliant. With examples and some notations excluded, s 11 provides as follows:

11 Content of agreements and prohibited conduct, arrangements and practices

(1)    A code covered entity must not be covered by an enterprise agreement in respect of building work which includes clauses that:

(a)    impose or purport to impose limits on the right of the code covered entity to manage its business or to improve productivity;

(b)    discriminate, or have the effect of discriminating against certain persons, classes of employees, or subcontractors; or

(c)    are inconsistent with freedom of association requirements set out in section 13 of this code of practice.

(2)    Subsections (1) and (3) are subject to Schedule 5.

(3)    Without limiting the generality of subsection (1), clauses are not permitted to be included in enterprise agreements that:

(a)    prescribe the number of employees or subcontractors that may be employed or engaged on a particular site, in a particular work area, or at a particular time;

(b)     restrict the employment or engagement of persons by reference to the type of contractual arrangement that is, or may be, offered by the employer;

(c)     require, or result in, discrimination between classes of employees because of the basis on which they are lawfully entitled to work in Australia;

(d)    require a code covered entity to consult with, or seek the approval of, a building association or an officer, delegate or other representative of the building association in relation to the source or number of employees to be engaged, or type of employment offered to employees;

(e)    require a code covered entity to consult with, or seek the approval of, a building association or an officer, delegate or other representative of the building association in relation to the engagement of subcontractors;

(f)    prescribe the terms and conditions on which subcontractors are engaged (including the terms and conditions of employees of a subcontractor);

(g)    prescribe the scope of work or tasks that may be performed by employees or subcontractors;

(h)    limit or have the effect of limiting the right of an employer to make decisions about redundancy, demobilisation or redeployment of employees based on operational requirements;

(i)    prohibit the payment of a loaded rate of pay (whether or not expressed as an annual amount);

(j)    require, or have the effect of requiring, the allocation of particular work to individual employees only if that allocation is extended to all other employees in the class of employees to which the individual employee belongs;

(k)    provide for the monitoring of agreements by persons other than the employer and employees to whom the agreement applies;

(l)    include requirements to apply building association logos, mottos or indicia to company supplied property or equipment;

(m)    directly or indirectly require a person to encourage, or discourage, a person from becoming, or remaining, a member of a building association;

(n)    directly or indirectly require a person to indicate support, or lack of support, for persons being members of a building association or any other measure that suggests that membership is anything other than a matter for individual choice;

(o)    limit the ability of an employer to determine with its employees when and where work can be performed to meet operational requirements or limit an employer’s ability to determine by whom such work is to be performed;

(p)    provide for the rights of an official of a building association to enter premises other than in compliance with Part 3-4 of the FW Act;

(q)    provide for the establishment or maintenance of an area which is intended to be designated to be used by members, officers, delegates or other representatives of a building association in that capacity.

Note 1: this section does not authorise the taking of action that would constitute a contravention of the FW Act, and should be read in a manner that ensures consistency with that Act. For example, paragraph (d) does not override section 205 of the FW Act which provides that an enterprise agreement must include a consultation term that provides for consultation on major changes at the workplace.

…

Conduct by parties

(4)    A code covered entity must not engage in conduct, or implement a procedure or practice (howsoever described) in respect of building work which has, or is likely to have, any of the effects described in subsections (1) or (3) if the conduct, practice or procedure was contained in an enterprise agreement.

(5)    Subsection (4) does not apply if the conduct, practice, or arrangement is:

(a)    expressly permitted or required by a Commonwealth industrial instrument; or

(b)    necessarily linked to the code covered entity’s compliance with, or conduct expressly permitted by, an industrial instrument.

Note: section 11 does not require, permit or authorise a code covered entity to fail to comply with an enterprise agreement. A failure to meet the requirements of section 11 by a code covered entity, however, renders the entity ineligible to tender for, or be awarded, Commonwealth funded work—see subsection 23(1)(a).

65    Two further sections of the Code govern the contents of enterprise agreements. Section 11A provides:

11A Attempts to avoid section 11 requirements

(1)    A code covered entity must not be covered by an agreement in respect of building work which includes clauses that:

(a)    purport to remedy, or render ineffective, clauses in an enterprise agreement that are inconsistent with section 11, including clauses which:

(i) provide for clauses in the enterprise agreement to be read in a manner that is consistent with subsections 11(1) and (3); or

(ii) provide for clauses in the enterprise agreements to have no effect if they are inconsistent with subsection 11(1) or subsection 11(3); or

(b)    require or provide for the application of terms and conditions contained in an enterprise agreement that does not cover and apply to the relevant employer and employees.

(2)    Subsection (1) is subject to Schedule 5.

66    Finally, s 15 provides that enterprise agreements must have terms dealing with dispute settlement. It is in the following terms:

15 Dispute settlement

(1)    A code covered entity must:

(a)    ensure that an enterprise agreement that covers the entity in respect of building work includes a term for settling disputes in accordance with subsection 186(6) of the FW Act; and

(b)    if a dispute settlement term of an enterprise agreement in respect of building work provides for arbitration of a dispute or other binding outcome, the entity must ensure that the term requires any decision of the arbiter to be consistent with this code of practice.

(2)    Subsection (1) is subject to Schedule 5.

67    A failure to comply with the content requirements for enterprise agreements in ss 11, 11A and 15 of the Code results in the Code covered entity, along with its related entities, being ineligible to tender for or be awarded Commonwealth funded building work. Sections 23 and 24(1) of the Code provide as follows:

23     Key criteria for eligibility to be awarded Commonwealth funded building work

(1)    To be eligible to be awarded Commonwealth funded building work:

(a)    a code covered entity and its related entities must meet the requirements of section 11 of this code of practice; and

(b)    a code covered entity must not be subject to an exclusion sanction.

24 Expressions of interest and tenders

(1)    A funding entity must ensure that tender processes and calls for expressions of interest (howsoever described) in respect of Commonwealth funded building work are conducted in a manner consistent with this code of practice and must ensure that respondents are only permitted to participate in tender processes (howsoever described) where the respondent meets the eligibility requirements set out in section 23.

68    Schedule 5 to the Code provides for the application of s 11(1), 11A and 15. It provides as follows:

1 Application of sections 11, 11A and 15

(1)    Subsections 11(1) and (3), 11A(1) and 15(1) do not apply in relation to an enterprise agreement made before 2 December 2016 that covers a building contractor, a building industry participant, or a related entity of a building contractor or building industry participant, to the extent that the requirements in those subsections must be met for the purposes of:

(a)    the lodging of an expression of interest or tender by the contractor or participant before 1 September 2017; or

(b)    the awarding, before 29 November 2018, of building work relating to an expression of interest or tender lodged by the contractor or participant in the period beginning on 2 December 2016 and ending at the commencement of the Building and Construction Industry (Improving Productivity) Amendment Act 2017 (the Amendment Act commencement); or

(c)    the undertaking of building work referred to in paragraph (b); or

(d)    the awarding, before 1 September 2017, of building work relating to an expression of interest or tender lodged by the contractor or participant after the Amendment Act commencement if the enterprise agreement does not apply to the contractor, participant or related entity in respect of that building work; or

(e)    the undertaking of building work referred to in paragraph (d).

(2)    Subsections 11(1) and (3), 11A(1) and 15(1) do not apply in relation to an enterprise agreement that covers a building contractor, a building industry participant, or a related entity of a building contractor or building industry participant, if:

(a)    the enterprise agreement:

(i)    was made before 2 December 2016; and

(ii)    applies to the contractor, participant or related entity in respect only of building work relating to an expression of interest or tender lodged by the contractor or participant before 2 December 2016; or

(b)    the enterprise agreement:

(i)    was made before 25 April 2014; and

(ii)    has not been varied in accordance with section 207 of the Fair Work Act 2009.

UNCONTROVERSIAL FACTS AND EVIDENCE

69    De Martin & Gasparini is a company engaged in the building and construction industry. Amongst other things, it provides specialist concrete pumping and placement services. It operates out of premises at Homebush and employs about 110 construction workers. It is a wholly owned subsidiary of Boral, which is a well-known international building and construction company. Boral has a number of subsidiaries that, together with Boral, comprise the Boral Group. De Martin & Gasparini is part of the Boral Group’s Australian cement business unit, called Boral Cement.

70    Mr Mazzarolo is a director of De Martin & Gasparini. He is also its general manager. He reports to Mr Ross Harper, who is executive general manager of Boral Cement, a member of the executive committee of Boral and also a director of De Martin & Gasparini. Mr Miller is the general manager of finance and operations at De Martin & Gasparini. He reports to Mr Mazzarolo.

71    The CFMEU is a well-known industrial association and employee organisation, as defined in the Fair Work Act. As its name suggests, it represents the industrial interests of employees in the construction industry, amongst others. Many of the 110 construction workers employed by De Martin & Gasparini are members of the CFMEU. Mr Rocco Ianni and Mr Anthony Vecchio are employees of De Martin & Gasparini and delegates of the CFMEU for De Martin & Gasparini employees who are members of the CFMEU.

The Enterprise Agreement

72    On 9 March 2015, De Martin & Gasparini, its employees and the CFMEU entered into the Enterprise Agreement. The agreement was signed by Mr Mazzarolo on behalf of De Martin & Gasparini, Mr Ianni on behalf of the employees and the State Secretary of the CFMEU. The agreement provided that it was to remain in force until 31 March 2018 and was to continue to apply beyond that date until replaced by another agreement or cancelled by one of the parties. It relevantly covered and applied to De Martin & Gasparini, its employees and the CFMEU: see s 52 and 53 of the Fair Work Act. It was approved by the FWC on 30 March 2015.

73    As might be expected, the Enterprise Agreement contained detailed provisions concerning the terms and conditions of the employment of the De Martin & Gasparini employees, including wage rates and other employment benefits, leave entitlements, employment security, hours of work, overtime and trade union rights and representation. Clause 31 of the Enterprise Agreement related to consultation regarding major workplace changes. It provided as follows:

31    CONSULTATION FOR THE PURPOSES OF s 205 of the FAIR WORK ACT 2009

31.1    Consultation regarding major workplace change

(a)     Company to notify/discuss

(i)    Where the Company is seriously considering, and prior to the taking of any definite decision on, the introduction of major workplace changes that are likely to have a significant effect on Employees, the Company must notify and consult with the Employees and their Union/s or other representative/s.

…

(ii)    Significant effects include termination of employment; …

74    The Enterprise Agreement was entered into well before the Code was issued or came into effect. It would appear, however, that participants in the building industry, including De Martin & Gasparini and the CFMEU, had been aware since at least 2014 that the Government was planning to issue some form of code of practice that would impact on enterprise agreements. On 17 April 2014, the then Minister for Employment, Senator Abetz, issued a media release which stated, in part:

The Government has today published an advance release of the Building and Construction Industry (Fair and Lawful Building Sites) Code 2014, designed to restore the rule of law and fairness to Australia’s construction sector.

The new code will come into effect when the Building and Construction Industry (Improving Productivity) Bill 2014 commences as an Act.

Minister for Employment, Senator Eric Abetz, said the new code sets out the standard of workplace relations conduct expected from those contractors that want to perform work funded by the Commonwealth Government.

"Fair, productive and lawful building sites are critical to Australia’s competitiveness, and job creation potential,” Senator Abetz said.

"It is important that contractors that want to work on projects funded by the taxpayer have the ability to operate efficiently and flexibly to ensure projects are delivered on time and on budget.

"For too long, the building and construction sector has provided the worst examples of industrial relations lawlessness.

"The new code emphasises the importance of compliance with the law and freedom of association on building sites.

"Our new code, together with a stronger ABCC, will help get the building and construction industry back on track.”

Under the Fair and Lawful Building Sites Code 2014, contractors that choose to be eligible for Commonwealth-funded building work will need to comply with the new code. If contractors do not comply with the code, they won’t be able to work on Commonwealth-funded projects.

The code reverses the previous Labor Government’s changes which were made to appease the extreme CFMEU which holds sway in the ALP.

Enterprise agreements and other “procedures” will no longer be able to contain restrictive work practices or discriminatory provisions. For example, clauses and practices that will not be permitted by the code include:

•    requiring contractors to employ a non-working shop steward or job delegate

•    ‘one in, all in’ clauses where, if one person is offered overtime, all the other workers must be offered overtime whether or not there is enough work

•    ‘jump up’ provisions that prevent engaging subcontractors unless they provide certain union-dictated terms and conditions to workers despite their existing lawful industrial arrangements

•    requiring contractors to obtain the approval of a union over the number and types of employees that a contractor may engage on a project.

…

Contractors will be covered, prospectively, from the first time they tender for Commonwealth-funded building work after the new code commences. Once a contractor is covered by the code, it will be required to act consistently with it, including on future privately funded work.

When in effect, the provisions of the code will apply in respect of enterprise agreements made after 24 April 2014. This means that from commencement of the code, contractors covered by agreements that were made after 24 April 2014 that do not comply with the code’s content requirements for enterprise agreements, will not be eligible to tender for and be awarded Commonwealth-funded building work.

…

75    It is perhaps not surprising, then, that the Enterprise Agreement contained a clause that provided for what was to occur if such a code came into force. Clause 33 provided:

33. CODE COMPLIANCE/SEVERABILITY

Code Compliance:

In the event that the Code comes into force and a provision of this Agreement is deemed as being non-compliant with the Code, the parties will vary the Agreement so that the non-compliant provision of the Agreement is Code complaint.

Actions taken by a party under this clause are not an extra claim.

Severability:

It is the intention of those covered by this Agreement that the Agreement contains only permitted matters under the Fair Work Act 2009.

The severance of any term of this Agreement that is, in whole, or in part, of no effect by virtue of the operation of s 253 of the Fair Work Act must not be taken to affect the binding force and effect of the remainder of the Agreement.

To the extent it is possible, all terms should be interpreted in a manner that would make them permitted matters.

76    The “Code” was defined as meaning “the Building and Construction Industry (Fair and Lawful Building Sites) Code 17 April 2014, when and is in force from time to time”.

77    It should be noted, in this context, that there was evidence to suggest that the CFMEU and, it would seem, some of the De Martin & Gasparini employees, did not consider that clause 33 obliged them to approve the variations to the Enterprise Agreement that De Martin & Gasparini considered were necessary to ensure that the Enterprise Agreement complied with the Code. That appeared to be in part due to the fact that the code referred to or defined in the Enterprise Agreement and clause 33 specifically was not the Code that came into effect on 2 December 2016.

Proposal to vary the Enterprise Agreement

78    In February 2017, Mr Mazzarolo became aware that there were some clauses in the Enterprise Agreement that did not comply with the Code. He also became aware that if De Martin & Gasparini did not have an enterprise agreement that complied with the Code by 1 September 2017, it and its related entities could not tender for or be awarded Commonwealth funded building work.

79    Once Mr Mazzarolo became aware of that issue, he and Mr Miller discussed it with Mr Vecchio and Mr Ianni, who were members of the De Martin & Gasparini Consultative Committee. At a Consultative Committee meeting on 10 March 2017, Mr Mazzarolo told Mr Vecchio and Mr Ianni that De Martin & Gasparini wanted to vary the Enterprise Agreement to make it Code compliant before 1 September 2017. Further discussions between or involving Mr Mazzarolo, Mr Miller, Mr Vecchio and other CFMEU representatives took place over the following months. The evidence concerning some of those discussions was controversial and a matter of dispute between the parties.

80    It is unnecessary to make findings concerning the precise content of the conversations between the parties concerning the CFMEU’s attitude to the proposal to vary the Enterprise Agreement. Suffice it to say that, as a result of the discussions that did occur, it became clear to Mr Mazzarolo and Mr Miller that the CFMEU was unlikely to support, or recommend to the De Martin & Gasparini employees that they should support, any variations to the Enterprise Agreement to make it Code compliant, at least prior to the anticipated Senate vote on the disallowance motion on 9 August 2017. For his part, Mr Mazzarolo was concerned that waiting until 9 August 2017 to deal with the variation of the Enterprise Agreement was not a viable option because that would not provide sufficient time to ensure that the agreement was Code compliant before 31 August 2017. That concern was shared by other senior officers of De Martin & Gasparini and Boral, including Mr Harper and Mr Miller.

81    In mid-June, Mr Mazzarolo decided that De Martin & Gasparini’s proposed variations to the Enterprise Agreement would be put to a vote of the employees. He arranged for there to be a meeting of the employees on 20 June 2017 to discuss the proposed variations. The vote was to be held on 28 June 2017.

82    At the meeting on 20 June 2017, Mr Mazzarolo made a presentation to the employees concerning the proposed variations to the Enterprise Agreement. He outlined the proposed variations and conveyed to the employees his views concerning the importance of varying the agreement to make it Code compliant. The CFMEU also addressed the workers.

83    It is unnecessary to set out at length the evidence concerning what was said and by whom at the 20 June meeting. Some of it was a source of controversy between the parties, though mostly in respect of matters that ultimately matter little to the issues in this case. It is sufficient to refer two aspects of the evidence.

84    The first concerns something that was said by Mr Mazzarolo in response to a question asked by one of the employees concerning the possibility that Boral might shut down De Martin & Gasparini, or make all the employees redundant, if the employees did not vote to approve the proposed variations. Mr Mazzarolo’s response sheds some light on Mr Mazzarolo’s state of mind at the time. Mr Mazzarolo was, of course, a director of De Martin & Gasparini.

85    Mr Ianni’s evidence of the exchange was as follows:

During Mr Mazzarolo’s presentation, he had an interaction with one of DMG’s employees Scott Ferguson in words to the following effect:

Mazzarolo:    We are a tiny dot. We are insignificant to Boral. Boral makes $1 billion a year and we only make $100 million. They aren’t going to risk $1 billion for us.

Ferguson:    Are you saying they will get rid of us? They will shut us down?

Mazzarolo:    They are your words not mine.

86    Mr Vecchio’s evidence was as follows:

One of the workers, Scott Ferguson asked a question. He said words to the effect of, “well if Boral is so big, and we’re just a small part of Boral, is what you’re saying that if we don’t get this done they’re going to shut us down? Mr Mazzarolo pulled a face and said words to the effect of “well Scott, they’re your words, not mine but, yeah that’s it. You said it though, I didn’t say it.

87    Mr Mazzarolo denied that he said the words attributed to him by Mr Vecchio. His version of the exchange was as follows:

There were no questions until the end. Scott Ferguson, one of [De Martin & Gasparini’s] mechanics asked:

“Does this mean if we are not Code compliant we will all get sacked?

I replied in words to the effect of:

“They are your words not mine. We need to be Code complaint so we can make sure the whole Boral Group is compliant.”

88    There was some, albeit fairly limited, cross-examination of each of Mr Ianni, Mr Vecchio and Mr Mazzarolo in relation to their evidence of this exchange. It is unnecessary to decide which version of the exchange should be accepted. They are all very similar. Whichever version is accepted, the substance and effect of Mr Mazzarolo’s response to the question was that he would not, or could not, exclude the possibility that Boral might shut down De Martin & Gasparini and make all the employees redundant if the employees did not approve the variations to the Enterprise Agreement. Mr Mazzarolo’s response tended to reveal his state of mind at the time concerning the prospect or potential for redundancies. It suggested that he believed that if the employees voted against the proposed variations, and retained their existing rights and benefits under the non-complying Enterprise Agreement, there was a distinct possibility, if not probability, that Boral management would decide to make them redundant. It may be inferred that Mr Mazzarolo’s state of mind in that regard may have been the product, at least in part, of discussions he had previously had with officers of Boral. As events transpired, of course, that is exactly what happened.

89    It should also perhaps be noted in this context that Mr Miller’s evidence concerning this exchange differed significantly from the other three witnesses. It is unnecessary to say what Mr Miller’s evidence was. It suffices to say that his version, which could perhaps be seen as being more favourable to De Martin & Gasparini and Mr Mazzarolo, cannot be accepted given the relative commonality of the versions given by Mr Ianni, Mr Vecchio and Mr Mazzarolo. The unreliability of Mr Miller’s evidence concerning this exchange reflected poorly on Mr Miller and the reliability of his evidence generally. That is an issue which will be returned to in due course.

90    The second aspect of the evidence concerning the 20 June meeting that warrants brief mention is that it is fairly clear that the advice and information provided to the employees by the CFMEU was, at the very least, likely to have been perceived by the employees as amounting to a recommendation not to approve the variations. Ms Malia told the employees, in effect, that some of the proposed variations reduced the employees’ rights and benefits under the Enterprise Agreement. She also advised them that there was no guarantee that the Australian Building and Construction Commission would necessarily accept that the variations would make the Enterprise Agreement compliant in any event.

91    On the day following the meeting, De Martin & Gasparini gave the employees a bundle of documents under cover of a memorandum from Mr Mazzarolo. The documents included a letter from Mr Mazzarolo, a copy of the Enterprise Agreement, a copy of the “Varied Code Compliant EBA (to be voted on)”, a document that listed and summarised the proposed variations to the Enterprise Agreement, documents that set out the views or preliminary advice of the Australian Building and Construction Commission concerning the Enterprise Agreement and a copy of the relevant award.

92    It is relevant to set out the content of Mr Mazzarolo’s letter in full. It provides relevant context and a snap-shot of Mr Mazzarolo’s thinking at the time.

21 June 2017

Dear Employees,

In February 2015 we finalised the [De Martin & Gasparini] enterprise agreement (DMG EBA). It was a difficult and lengthy negotiation that ended only after nearly 5 days of industrial action.

Issues in relation to the Code during the last negotiations

Employees will remember one of the biggest sticking points in negotiations was about the Federal Government’s proposed Building Code. In 2014 and 2015 the Building Code was not legally in force.

During negotiations Boral and DMG took a strong position regarding the proposed Code and we wanted to ensure the DMG EBA was Code compliant. We thought it was necessary to make the DMG EBA Code compliant to protect DMG if the Code did end up becoming law.

The Union took a different position. The Union told employees that the proposed Code was not yet legally in force and that DMG had no right to insist on a Code compliant agreement. However, the Union agreed to insert the below clause into the EBA.

Extract from clause 33 of the DMG EBA

33. CODE COMPLIANCE/SEVERABILITY

Code Compliance

In the event that the Code comes into force and a provision of this Agreement is deemed as being non-compliant with the Code, the parties will vary the Agreement so that the non-compliant provision of the Agreement is Code compliant.

Actions taken by a party under this clause are not an extra claim.

Everyone knows how things finished up. DMG accepted the demands of employees after days of intense pressure that impacted our pours and our customers. We also agreed to adopt the CFMEU”s agreement which they provided to us in the negotiation process (including clause 33).

Many relationships were damaged during the strike action and we have worked hard to rebuild the trust that was lost at the time.

Building Code 2016

As most employees already know, the Building Code 2016 has now become the law which means we need to change the DMG EBA to ensure Code compliance.

We must ensure we are code compliant so that we can continue to tender and do work, along with all other Boral companies. You must understand that under this new code all Entities of a company that do building work have to be code compliant. In simple terms if DMG is not compliant we prevent all the other Boral businesses in Australia from doing future Federal Government building work which is a large amount of work and certainly a massive amount more than DMG’s revenues.

The code is the law today. We need to get this done now. We aren’t prepared to take the risk and wait. Clause 33 was put in the DMG EBA to protect workers and DMG when the code became law. We agreed to fix the DMG EBA.

As you know you will have the chance to vote “yes” to make the DMG EBA code compliant at next week’s secret ballot at Homebush. If employees vote “yes” we can then lodge the amended EBA with the Fair Work Commission to get it approved. We will then send the amended EBA to the ABCC so that we can get a letter confirming that DMG is code compliant. Once we have this letter we can put this behind us and focus on the work. It also means we can win Government building work before 1 September 2017 (we currently can’t win new Federal Government work because we don’t have a compliant EBA).

Code compliant EBA

The ABCC has now confirmed in writing that the changes we want you to vote in favour of next week at the secret ballot will make the DMG EBA code compliant. A copy of the amended DMG EBA is enclosed in this information pack. You will note the amended EBA:-

•    Does not reduce your pay rates

•    Does not take away your RDOs or 36 hour week.

•    Does not take away your entitlements

•    Still provides for Union representation

•    Provides for Leisure day weekends

Next steps

Over the course of the next week we will be meeting with employees to explain the changes to the DMG EBA. Please ask questions at these meetings and feel free to call Louie or Greg.

Please vote “yes”

I am asking that you please vote “vote” yes to change the DMG EBA so that we can be code complaint. This is what we agreed to do in the DMG EBA when the code became law and it is what we need to do to avoid all the risks that will arise if we can’t get this done.

Thank you for taking the time to read this letter. We will let you know of upcoming information sessions in the coming days where you will learn more about this matter.

Yours sincerely,

Louie M

The 28 June vote to vary the Enterprise Agreement

93    On 28 June 2017, the proposed variation to the Enterprise Agreement was put to the vote of the De Martin & Gasparini employees. The result of the ballot was 34 in favour and 64 against, with one invalid vote. The employees accordingly did not agree to the variation. The result was known by about 7.30 am.

94    There was an issue or dispute between the parties concerning the reasonableness or otherwise of the position taken by the CFMEU concerning the proposed variation of the Enterprise Agreement. There was also some evidence of claims and counter-claims about the provision of allegedly incorrect or misleading information to the employees in the context of the vote. Much of the evidence that was adduced on that topic was contentious. It is, however, unnecessary to make any definitive findings in respect of those matters.

95    The CFMEU was perfectly entitled to take a position in relation to the proposed variation to the Enterprise Agreement and to communicate that position to the employees. It is largely immaterial whether that position was reasonable or unreasonable, or was based on a general opposition to the Code, or was based on the fact that the proposed variations removed or varied certain employee rights or entitlements in the existing agreement. Equally, it is largely immaterial whether or not some of the employees may have voted against the variations because of the information and advice provided to them by the CFMEU, or because they were reluctant to go against what may have been perceived to be the general position taken by the CFMEU in relation to the variation of enterprise agreements to make them Code compliant. The employees were perfectly entitled to vote against the proposed variations, whatever may have been their reasons for doing so.

96    The alleged misleading information concerned whether or not the CFMEU had negotiated Code compliant variations of enterprise agreements with other construction companies. That again is an issue that does not need to be resolved. It does not bear on the issues that need to be determined in relation to the alleged contraventions of the Fair Work Act and the Building Act.

97    The important point that does flow from the evidence concerning these contentious issues is that it is tolerably clear that Mr Mazzarolo and Mr Miller had formed the view that the position that had been taken by the CFMEU had made it more difficult to secure the agreement of the employees to vary the Enterprise Agreement. They had also formed the view that the CFMEU’s position was unlikely to change, at least prior to 10 August 2017. The views they formed in that regard undoubtedly informed their views, and the views of Boral management, about what should happen next.

The 28 June discussions between officers of Boral and De Martin & Gasparini

98    Very shortly after Mr Miller learned that the employees had voted against the variation, he arranged a meeting of officers of De Martin & Gasparini and Boral to discuss and consider the “next steps”. The meeting was attended, in person or by telephone, by Mr Mazzarolo, Mr Miller, Mr Harper, Mr Daniel Sleeman, Ms Elizabeth Macri, Mr Bill Fisher, Mr Damien Sullivan, Mr John Matthews, Ms Jane Cleary, Mr Marco Gidaro, Ms Ekaterini Karabatos and Mr Jason Donnelly. Mr Sleeman was Boral’s National Industrial Relations and Employee Relations Manager. Mr Macri was the Human Resources Manager for Boral Australia. Mr Fisher was the Executive General Manager of Human Resources for Boral Australia. Mr Sullivan was the Boral Group General Counsel. Mr Matthews was Senior Legal Counsel for Boral. Ms Cleary was National Industrial Relations Legal Counsel for Boral. Ms Karabatos and Mr Donnelly were external legal advisers. As can readily be seen, this was a very high level meeting. The participants included very senior officers of Boral who were responsible for employment and industrial relations, senior in-house lawyers at Boral and external legal advisers.

99    The evidence concerning what was said and done, and more significantly what was decided, at the 28 June meeting was, to a certain extent, controversial. The evidence concerning the reasons for taking the next steps, and what inferences or conclusions should be drawn from it, was even more controversial. The evidence and the issues arising from the meeting are addressed in detail later.

100    What is clear, however, is that a consensus was reached by those present at the meeting concerning what steps De Martin & Gasparini should take given the unsuccessful attempt to vary the Enterprise Agreement to make it Code compliant. Mr Harper, as the most senior officer of Boral responsible for the operations of De Martin & Gasparini made, or at least approved, a decision about what to do next. The decision involved, at least, a proposal to make all of the existing De Martin & Gasparini employees who were covered by the Enterprise Agreement redundant by 31 August 2017. As making all the employees redundant would plainly amount to a major workplace change, it was decided that the employees would need to be consulted in accordance with clause 31 of the Enterprise Agreement.

The 3 July meeting of the employees

101    Needless to say, much of the evidence concerning the 3 July meeting was controversial. There was, however, some common ground.

102    First, it was common ground that Mr Mazzarolo spoke first at the meeting. Exactly what he said was a matter of dispute and is important to the CFMEU’s case.

103    Second, it was also common ground that after his initial remarks, Mr Mazzarolo read a memorandum to the employees. That memorandum, which was given to the employees at the end of the meeting, was in the following terms:

Memorandum

Date:        3 July 2017

To:        EA Covered Employees, Consultative Committee and CFMEU

From:        Louie Mazzarolo

Subject:     Proposed Major workplace change

Introduction

After 36 years with this Company, it is with the deepest regret that I am writing to notify you that DMG is seriously considering major workplace changes. These changes arise as a direct consequence of the Building Code 2016 becoming law and the serious risk that DMG will be unable to achieve Code compliance by the required date. The operation of the Code means that DMG’s inability to achieve Code compliance impacts not only DMG but the Boral Group as a whole.

Legal requirement to notify

Clause 31.1(a)(i) of the DMG EBA places a legal obligation on the Company to notify and consult with employees and their representatives where the Company is “seriously considering” major workplace change. The clause is set out below:-

Where the Company is seriously considering, and prior to the taking of any definite decision on, the introduction of major workplace changes that are likely to have a significant effect on Employees, the Company must notify and consult with the Employees and their Union/s or other representative/s.

Nature of the change

The change being considered involves DMG ceasing to have EBA covered employees doing any work at all from the end of August. This may be the only way to ensure that DMG’s failure to comply with the Code does not prevent the entire Boral Group from being able to do Commonwealth funded building work.

This means that all existing EBA covered employees could be made redundant.

On 20 June 2017 and in the lead-up to the vote to vary the DMG EBA on 28 June 2017, DMG tried its best to explain how important it was for DMG and Boral to become Code compliant.

As we have explained, the inability for the Boral Group to tender for Commonwealth funded building work from September arises if even one of Boral’s businesses is not able to achieve Code compliance.

Therefore, the reason this change is being seriously considered is because of the risk posed to the entire Boral Group as a result of DMG’s current inability to achieve Code compliance

As far as I’m concerned the need to consider making employees redundant to protect DMG and the Boral Group is the worst possible outcome.

Consultation process

In accordance with the EBA, and given the seriousness of the situation, DMG will engage in consultation with the workforce, our Consultative Committee and the union on the proposed redundancies.

The consultation process commences from the date of this memorandum and will be completed on or before 24 July 2017.

Measures to avert or mitigate the adverse effects of the changes

DMG was hoping that the 28 June 2017 would have resulted in DMG becoming Code compliant as DMG does not know any other way we can become Code compliant.

If the workforce or the union has any ideas for how the changes currently under consideration can be averted, or the effects of the changes mitigated, we can discuss these during the consultation period.

Selection Criteria for redundancies

Given that all EBA covered employees would be made redundant in the circumstances described in this letter, it is unlikely there would be any need to apply a selection criteria for making employees redundant.

Employee assistance

The Boral Employee Assistance Program (BEAP) is available on 1300 002 327 should you wish to seek professional and confidential counselling support at any time both during and after the consultation process. This service is provided to assist employees and their families who may benefit from a counselling service. We cover the cost of this service so there is no charge to employees.

Please do not hesitate to contact me if you have any questions.

Regards,

Louie Mazzarolo

104    After reading the memorandum, Mr Mazzarolo told the employees that he was stepping down from the Consultative Committee and that Mr Miller, Ms Macri and Mr Gidaro would represent De Martin & Gasparini on that committee. Mr Mazzarolo then left the meeting.

105    After Mr Mazzarolo left, Mr Miller addressed the employees. He also answered questions, or at least exchanged words, with some of the employees. Exactly what Mr Miller said was disputed and is of considerable importance to the CFMEU’s case, in particular its case in relation to coercion. The evidence will be addressed in detail later.

The 5 July meeting at the Barangaroo site

106    On 5 July 2017, Mr Miller, Ms Macri and Mr Gidaro attended a building site at Barangaroo where some De Martin & Gasparini employees were working for the purpose of conducting a scheduled “toolbox” talk. A toolbox talk is an informal group discussion that usually focuses on safety issues, though Mr Miller’s evidence was that the purpose of this toolbox talk was to consult with the employees about the proposed workplace changes. The other persons present during this toolbox talk were Mr Fabio Tuttucore, who was a construction manager at De Martin & Gasparini, Mr Ianni and two other employees, Mr Jason D’Amico and Mr Joe Squadrito.

107    The statements made by Mr Miller during the toolbox talk at Barangaroo were controversial and in dispute. The CFMEU’s case concerning coercion hinges to a large extent on those statements. The evidence will be addressed later.

The 5 July meeting at the Harold Park site

108    Mr Miller, together with Ms Macri and Mr Gidaro, also conducted a toolbox talk at a building site in Harold Park later in the day on 5 July 2017. Mr Ianni, Mr Vecchio and two other employees, Mr Paul Mederas and Mr Lewis Palmer were present at this talk. There was again an issue between the parties concerning the precise content of statements made by Mr Miller during this talk. The CFMEU’s case concerning coercion again depends on statements allegedly made by Mr Miller during this talk. The evidence will be addressed later.

Other events

109    On 10 July 2017, Mr Mazzarolo sent a memorandum to the employees. The memorandum attached a newspaper article which was headed “Crack in the Concrete … Union’s hardline public stance forces secret talks, backroom deals and side stepping as deadline nears”. In general terms, the article reported some instances where the CFMEU had apparently been involved in negotiating Code compliant enterprise agreements with other construction companies. Also attached to the memorandum was the front page and signature page of an enterprise agreement that covered another construction company. That agreement had been signed by Ms Malia on behalf of the CFMEU. Mr Mazzarolo’s memorandum stated:

Memorandum

Date:    10 July 2017

To:    All EA Covered Employees

From:    Louie Mazzarolo

You may have seen an article in The Australian Financial Review last weekend (attached) that indicates the CFMEU have made deals with other construction companies and signed off on Code compliant EBAs.

We have made our own inquiries on the Fair Work Commission website (www.fwc.gov.au) and attach the front page and signature page of an EBA that is Code compliant.

You will see that this Code compliant EBA was signed off by Rita Mallia.

Yours sincerely

Louie M

110    De Martin & Gasparini, Mr Mazzarolo and Mr Miller objected to the tender of this memorandum on the basis that it was not referred to in the pleading and was in any event irrelevant because it post-dated the alleged contravening conduct. The memorandum was admitted into evidence on the basis that it was potentially relevant to Mr Mazzarolo’s state of mind as at 3 July 2017. Mr Mazzarolo’s evidence was that he sent this memorandum to the employees because it supposedly showed that, contrary to what the employees had apparently been told, the CFMEU had in fact negotiated Code compliant enterprise agreements with other building companies.

THE ALLEGED CONTRAVENTIONS

111    In its Further Amended Statement of Claim (FASOC) the CFMEU alleged that De Martin & Gasparini, Mr Mazzarolo and Mr Miller contravened, or were involved in contraventions of, both s 340 of the Fair Work Act and s 54 of the Building Act. The pleading is somewhat complex and convoluted. Following is a brief summary of the key pleaded allegations.

De Martin & Gasparini – adverse action on 3 July 2017

112    The CFMEU alleged that De Martin & Gasparini contravened s 340 of the Fair Work Act on 3 July 2017. The conduct that constituted that contravention was the words and conduct of Mr Mazzarolo and Mr Miller at the meeting on 3 July 2017 “in proposing to employees covered by the [Enterprise] Agreement that they could be made redundant after 24 July 2017 and before the end of August 2017”: FASOC [21]. Specifically, Mr Mazzarolo is alleged to have informed the employees that “they had been told that this would happen if they did not vote up the … proposed variation to the [Enterprise] Agreement”: FASOC [14]. Mr Miller is alleged to have distributed the 3 July memorandum and to have told the employees that the CFMEU had “fed them bullshit”, that De Martin & Gasparini “really was proposing to make them redundant” and that “the employees were the only ones who could change the situation they were in”: FASOC [15] and [16].

113    The conduct of Mr Mazzarolo and Mr Miller was alleged to amount to adverse action against the employees because it constituted threatening to dismiss the employees (FASOC [21.1]) and/or injuring the employees in their employment (FASOC [21.2]) and/or altering the position of the employees to their prejudice (FASOC [21.3]).

114    It was also alleged that the adverse action was taken “for the reasons or for a reason that included one or more of the reasons” that the employees had one or more of the following workplace rights: first, that they were “entitled to the benefit of a workplace instrument being the [Enterprise] Agreement”; and second, that “they are able to participate in a process under the [Fair Work] Act, namely voting to approve or not approve a variation of the [Enterprise] Agreement”: FASOC [19], [20], [22]. In relation to the second of the alleged workplace rights, it should be noted that the CFMEU’s pleading does not expressly allege that the adverse action was taken because the employees had “exercised” that workplace right: cf. s 340(1)(a)(ii) of the Fair Work Act. It was clear from the outset, however, that the CFMEU put its case, at least in part, also on the basis that the adverse action was taken because the employees had exercised their ability to vote in relation to the variation of the Enterprise Agreement: see for example, the CFMEU’s outline of opening submissions at [41.2] and closing submissions at [92.2], [96], [106]. No complaint was raised about, and no objection was taken to, this minor deviation from the pleadings. As will be seen, evidence adduced from Mr Harper and Mr Miller was directed specifically to the question whether the action was taken because the employees had exercised their right to vote in relation to variations to the Enterprise Agreement.

Mr Mazzarolo and Mr Miller – aiding and abetting adverse action on 3 July 2017

115    The CFMEU alleged that both Mr Mazzarolo and Mr Miller “aided, abetted, counselled or procured, or was otherwise knowingly concerned in or party to” De Martin & Gasparini’s contravention of s 340 on 3 July 2017. They were therefore involved in that contravention and taken to have contravened s 340 of the Fair Work Act by virtue of s 550 of the Fair Work Act: FASOC [32] and [34].

116    In relation to Mr Mazzarolo, the conduct that was alleged to constitute the aiding and abetting was “making the decision and/or implementing the decision that [De Martin & Gasparini’s] employees to whom the [Enterprise] Agreement applied would be made redundant after 24 July 2017 and before the end of August 2017 because the [Enterprise Agreement] had not been varied and communicating this to the employees on 3 July 2017”: FASOC [31].

117    In relation to Mr Miller, the conduct that was alleged to constitute the aiding and abetting was “being present when [Mr Mazzarolo] told employees on 3 June 2017 that they would be made redundant after 24 July 2017 and before the end of August because the [Enterprise] Agreement had not been varied, telling employees that [De Martin & Gasparini] was proposing to make them redundant, and saying that the employees were the only ones who could fix the situation they were in”. In that way, it was alleged that Mr Miller “associated himself with the actions of” De Martin & Gasparini and Mr Mazzarolo: FASOC [33].

De Martin & Gasparini – coercion on 3 and 5 July 2017

118    The CFMEU alleged that, through the words and conduct of Mr Mazzarolo and/or Mr Miller on 3 and 5 July 2017, De Martin & Gasparini contravened s 54 of the Building Act: FASOC [26]. The particulars of that alleged contravention were that Mr Mazzarolo and Mr Miller “threatened to take or organise to take action against” the employees with the intention of coercing the employees covered by the Enterprise Agreement “to vary the [Enterprise] Agreement”: FASOC [25]. It should perhaps be noted that the wording of s 54(1) prohibits action or threatened action with intent to coerce another person to agree to vary a building enterprise agreement, rather than simply to vary an agreement. However, the distinction is immaterial in the present proceedings.

Mr Mazzarolo – coercion on 3 July 2017

119    The CFMEU alleged that Mr Mazzarolo contravened s 54 of the Building Act: FASOC [28]. The particulars were that by his words and conduct at the 3 July meeting (particularised at FASOC [13]-[15]) Mr Mazzarolo “threatened to organise or take action to make the employees to whom the [Enterprise] Agreement applied redundant with the intent of coercing employees to vary the [Enterprise] Agreement”: FASOC [27]. The particularised words and conduct included informing the employees to whom the Enterprise Agreement applied that De Martin & Gasparini was considering making them all redundant because the Enterprise Agreement had not been varied, informing the employees that they had been told this would happen if they did not vote up the proposed variation, and the distribution of the 3 July memorandum to the employees.

Mr Miller – coercion on 3 July 2017

120    The CFMEU alleged that Mr Miller contravened s 54 of the Building Act: FASOC [30]. The particulars were essentially the same as the particulars to Mr Mazzarolo’s alleged contravention of s 54, though the conduct was limited to Mr Miller’s words and conduct at the 3 July meeting pleaded at FASOC [16]. This included telling the employees that the CFMEU had fed them bullshit, that De Martin & Gasparini really was proposing to make them redundant, and that the employees were the only ones who could change the situation they were in.

Mr Mazzarolo – aiding and abetting coercion on 3 July 2017

121    The CFMEU alleged that Mr Mazzarolo aided, abetted, counselled or procured, or was otherwise knowingly concerned in or party to both De Martin & Gasparini’s contravention of s 54 of the Building Act on 3 July 2017 (FASOC [35]) and Mr Miller’s contravention of s 54 of the Building Act on 3 July 2017 (FASOC [36]). The particulars of the alleged aiding and abetting of De Martin & Gasparini’s contravention were the words and conduct particularised in FASOC [13]-[15] referred to earlier. The particulars of the alleged aiding and abetting of Mr Miller were that Mr Mazzarolo was present and associated himself with the words and conduct of Mr Miller at the 3 July meeting particularised in FASOC [16].

Mr Miller – aiding and abetting coercion on 3 July

122    The CFMEU alleged that Mr Miller aided, abetted, counselled or procured, or was otherwise knowingly concerned in or party to both De Martin & Gasparini’s contravention of s 54 of the Building Act on 3 July 2017 and Mr Mazzarolo’s contravention of s 54 on 3 July 2017 (FASOC [38] and [39]). The particulars of the alleged aiding and abetting of De Martin & Gasparini’s contravention were that Mr Miller was present and associated himself with Mr Mazzarolo’s actions at the 3 July meeting as particularised in FASOC [13] and [14], that Mr Miller distributed the 3 July memorandum, and that Mr Miller himself addressed the employees at the 3 July meeting: FASOC [38] and [39]. The particulars of the alleged aiding and abetting of Mr Mazzarolo’s contravention were that Mr Miller was present and associated himself with the words and conduct of Mr Mazzarolo at the 3 July meeting particularised in FASOC [13] and [14].

ISSUES

123    The parties agreed that the CFMEU’s pleaded case raised the following factual and legal questions.

124    First, what was said and done and, more particularly, what was decided at the 28 June meeting between the Boral and De Martin & Gasparini officers and their lawyers? De Martin & Gasparini and Messrs Mazzarolo and Miller contended that they were only carrying out or putting into effect the decision that was made at the 28 June meeting when they addressed the workers on 3 July 2017. In those circumstances, it is relevant to consider what was said and done at the 28 June meeting in considering the reason or reasons that Mr Mazzarolo and Mr Miller took the relevant actions they took at the meetings on 3 and 5 July 2017.

125    Second, what was said and done by Mr Mazzarolo and Mr Miller at the 3 July meeting? While some of what was said and done at this meeting was not contentious, including for example the fact that Mr Mazzarolo read out the 3 July memorandum, the CFMEU’s case relied to a certain extent on some specific statements that it alleged were made by both Mr Mazzarolo and Mr Miller at the meeting.

126    Third, did the action taken by Mr Mazzarolo and Mr Miller at the 3 July meeting constitute adverse action as alleged by the CFMEU? This question turns not only on the factual findings made in relation to the second issue, but also on whether the words and conduct can be characterised as amounting to threatening to dismiss the employees, injuring the employees in their employment, and/or altering the position of the employees to their prejudice.

127    Fourth, if the words and conduct of Mr Mazzarolo and Mr Miller at the 3 July meeting can be characterised as adverse action, was that action authorised by or under the Fair Work Act and therefore taken not to be adverse action by reason of s 342(3) of the Fair Work Act? De Martin & Gasparini, Mr Mazzarolo and Mr Miller contended that the actions of Mr Mazzarolo and Mr Miller at the 3 July meeting were authorised by the Fair Work Act because De Martin & Gasparini was required to comply with the consultative process under clause 31 of the Enterprise Agreement.

128    Fifth, was the action taken at the 3 July meeting taken because the De Martin & Gasparini employees had, or had exercised, a workplace right? De Martin & Gasparini bear the onus of proving that the actions taken on its behalf by Mr Mazzarolo and Mr Miller were not taken because the employees had the benefit of the Enterprise Agreement, or because the employees were able to vote, and had voted, on approving or not approving a variation of the Enterprise Agreement. De Martin & Gasparini contended that the relevant decision maker was Mr Harper and that Mr Harper’s evidence was that the fact that the employees had rights under the Enterprise Agreement, and had exercised their right not to vary the agreement, played no part in his decision. Mr Harper’s evidence concerning the reasons for the decision he took on 28 June 2017 was, in short, that De Martin & Gasparini had to find a way to make the non-compliant Enterprise Agreement inoperative by 31 August 2017, otherwise all the companies in the Boral Group would not be permitted to tender for or be awarded Commonwealth funded building work. Did De Martin & Gasparini discharge its burden of proving that the workplace rights of the employee’s under the Enterprise Agreement, and their rights in relation to varying the Enterprise Agreement, were not the substantial and operative reason for the action taken on 3 July 2017?

129    Sixth, having regard to the findings made in relation to issues 3, 4 and 5, did De Martin & Gasparini contravene s 340 of the Fair Work Act as alleged by the CFMEU?

130    Seventh, if it is found that De Martin & Gasparini contravened s 340 as a result of the words and conduct of Mr Mazzarolo and Mr Miller at the 3 July meeting, were Mr Mazzarolo and Mr Miller involved in that contravention: did Mr Mazzarolo and Mr Miller aid, abet, counsel or procure the contravention; or were they otherwise knowingly concerned in or party to that contravention?

131    Eighth, what was said and done by Mr Miller at the 5 July toolbox meetings at Barangaroo and Harold Park? The CFMEU’s coercion case against De Martin & Gasparini depended, in part, on the contention that Mr Miller told the employees who attended those meetings that the employees could request a revote.

132    Ninth, did De Martin & Gasparini, through the words and conduct of Mr Mazzarolo and Mr Miller at the meeting on 3 July 2017, and the words of Mr Miller at the meetings on 5 July 2017, threaten to take or organise to take action against the employees? This question relates to the first element of the CFMEU’s coercion case against De Martin & Gasparini.

133    Tenth, if De Martin & Gasparini did threaten to take, or organise to take, action against the employees, was that done with the intention of coercing the employees to vary the Enterprise Agreement? This question relates to the second element of the CFMEU’s coercion case against De Martin & Gasparini.

134    Eleventh, having regard to the findings made in relation to issues 9 and 10, did De Martin & Gasparini contravene s 54 of the Building Act as alleged by the CFMEU?

135    Twelfth, if it is found that De Martin & Gasparini contravened s 54 of the Building Act by the actions of Mr Mazzarolo and Mr Miller on 3 July 2017 and the actions of Mr Miller on 5 July 2017, did Mr Mazzarolo and Mr Miller aid, abet, counsel or procure that contravention; or were they otherwise knowingly concerned in or party to that contravention?

136    Thirteenth, did Mr Mazzarolo and Mr Miller themselves contravene s 54 of the Building Act by their words and actions on 3 July 2017? This issue overlaps, to a considerable extent, with the eight to tenth issues.

137    Fourteenth, were Mr Mazzarolo and Mr Miller otherwise involved in contraventions of s 54 of the Building Act? This issue again overlaps to a considerable extent with the eighth to eleventh issues, and relates to the CFMEU’s remaining allegations that Mr Mazzarolo and Mr Miller aided and abetted each of the other’s various contraventions of s 54 of the Building Act.

138    If any of the alleged contraventions are made out, issues will arise in relation to the appropriate form of relief. That will include whether pecuniary penalty orders should be made; if so, the quantum of that order or those orders; whether injunctive relief should be granted; and if so, what should be the form of the injunction or injunctions. The parties’ submissions did not address those issues, or at least address them at any length. That is because it was agreed that if contraventions are made out, there should be a further hearing in relation to remedies.

RESOLUTION OF THE ISSUES

139    Before dealing with each of these fourteen issues in turn, it is necessary to say something briefly concerning the evidence adduced at the hearing.

The evidence generally

140    The CFMEU adduced affidavit and oral evidence from three witnesses: Mr Ianni, Mr Vecchio and Ms Rita Mallia, the State President of the General Division, New South Wales Branch, of the CFMEU. The evidence of both Mr Ianni and Mr Vecchio included evidence concerning various meetings and discussions leading up to and including the 28 June 2017 vote in relation to the variation of the Enterprise Agreement. Perhaps more importantly, however, both Mr Ianni and Mr Vecchio gave evidence about what was said and done at the 3 July meeting of the employees. That evidence was given orally: the portions of their affidavits concerning the 3 July meeting were not read. That was also the case in relation to Mr Ianni’s evidence concerning the 5 July meetings at Barangaroo and Harold Park. Both Mr Ianni and Mr Vecchio were cross-examined and their evidence was challenged in certain respects. Ms Mallia’s evidence was somewhat more limited. It related primarily to some meetings leading up to the 28 June vote.

141    De Martin & Gasparini ultimately submitted that Mr Ianni and Mr Vecchio were not credible or reliable witnesses in relation to the disputed events and conversations, in particular at the 3 July meeting. As discussed in more detail later, that submission is rejected. Mr Ianni and Mr Vecchio presented as honest and credible witnesses and their evidence, for the most part, was consistent, plausible and reliable. As events transpired, not a lot turned on Ms Mallia’s evidence.

142    The CFMEU also led oral evidence from Mr Gidaro. The circumstances in which the CFMEU came to call evidence from an officer of De Martin & Gasparini should briefly be explained. De Martin & Gasparini did not file an affidavit of Mr Gidaro. That was despite the fact that Mr Gidaro was present at each of the meetings on 28 June, 3 July and 5 July and, as it turned out, appears to have been the only person who took notes of what was said at those meetings. Prior to the hearing, the CFMEU issued a subpoena to De Martin & Gasparini. The terms of that subpoena were challenged and narrowed by consent. On just about any view, the narrowed terms of the subpoena required De Martin & Gasparini to produce Mr Gidaro’s notes. It would appear, however, that Mr Gidaro’s notes of the 3 and 5 July meetings were not produced until the very eve of the hearing.

143    The production of the notes prompted the CFMEU to take the somewhat unusual step of making an oral application for a subpoena to be issued to Mr Gidaro to compel him to give evidence. As events transpired, Mr Gidaro was at court and the formal issue of a subpoena was not required. The CFMEU adduced evidence from Mr Gidaro concerning the 3 and 5 July meetings. Leave was granted to allow some limited cross-examination based on Mr Gidaro’s notes. As will be discussed in more detail later, Mr Gidaro was not a reliable or credible witness in relation to matters that were, or might have been perceived to be, adverse to De Martin & Gasparini’s case.

144    Mr Gidaro’s notes of the 28 June meeting were not produced until after the CFMEU had closed its case and only after the CFMEU raised a number of queries and concerns about De Martin & Gasparini’s compliance with the subpoena. No satisfactory explanation for the late production of Mr Gidaro’s notes was ever provided. In any event, the result was that ultimately Mr Gidaro was not able to be questioned concerning his notes or what was said at the 28 June meeting. The notes were, however, tendered and admitted into evidence. It should be noted, in this context, that there was no CFMEU representative at the 28 June meeting. Nor were any of the affected De Martin & Gasparini employees at the meeting. The evidence led concerning the 28 June meeting came only from witnesses associated with the management of De Martin & Gasparini and Boral. It was not surprising in those circumstances that the CFMEU was anxious to seek the production of any notes made by persons who were present at the meeting. What was somewhat surprising was that it appears that nobody other than Mr Gidaro took a note of what was said or decided at the meeting.

145    De Martin & Gasparini, Mr Mazzarolo and Mr Miller adduced affidavit and oral evidence from three witnesses: Mr Mazzarolo and Mr Miller themselves, and Mr Harper. De Martin & Gasparini also filed an affidavit sworn by Ms Elizabeth Macri, the Human Resources Manager, however that affidavit was not read. The CFMEU tendered certain paragraphs of Ms Macri’s affidavit in its case.

146    Mr Harper’s evidence primarily concerned the 28 June meeting between officers of De Martin & Gasparini and Boral which occurred after the unsuccessful vote in relation to the variation of the Enterprise Agreement. Mr Harper’s evidence was that he was the relevant decision-maker. He gave evidence concerning the discussions that occurred at the 28 June meeting and his reasons for making or approving the decision to proceed to make the employees redundant, and to initiate the consultation process in that regard.

147    The evidence of both Mr Mazzarolo and Mr Miller addressed the events leading up to the 28 June vote on the variation of the Enterprise Agreement. Both Mr Mazzarolo and Mr Miller also attended the 28 June meeting and gave evidence concerning the discussions that occurred at the meeting. They also gave evidence concerning their belief or understanding concerning the reasons for the decision that was made or approved at the meeting.

148    The evidence of each of Mr Harper, Mr Mazzarolo and Mr Miller concerning the 28 June meeting will be discussed in detail later in the context of the first and fifth issues. It is, however, useful to make a few general observations concerning the evidence in relation to this aspect of the case. As has already been noted, De Martin & Gasparini, Mr Mazzarolo and Mr Miller effectively bore the onus of proving that the action that was taken on 3 July 2017 was not taken because the employees had workplace rights under the Enterprise Agreement, or because they had the right, under the Fair Work Act, to vote to approve or not approve a variation to the Enterprise Agreement. It was their case that the action taken on 3 July 2017 was taken pursuant to a decision made or approved by Mr Harper at the 28 June meeting.

149    The 28 June meeting was no doubt an extremely important meeting for De Martin & Gasparini. It was called to consider the “next steps” after the unsuccessful attempt to vary the Enterprise Agreement. It was attended by a number of senior officers of Boral, including at least four of whom were lawyers, or occupied senior in-house legal positions. Two external legal advisers were also present. Aside from Mr Harper, Mr Mazzarolo and Mr Miller, none of the other officers or lawyers were called to give evidence. With only some limited exceptions, the evidence of Mr Harper, Mr Mazzarolo and Mr Miller in relation to the meeting did not attribute any specific statements of substance to any of the other officers. They certainly did not attribute any statements to the internal or external lawyers. Mr Miller’s affidavit referred to the fact that legal advice was received from the lawyers present, but stated that he had not referred to the advice in his affidavit. Mr Harper’s affidavit, on the other hand, said nothing about the receipt of legal advice. Nor did Mr Mazzarolo’s affidavit.

150    It seems highly unlikely that the internal and external lawyers that were present at the meeting did not provide any relevant or material input in relation to the important decision that was apparently arrived at by consensus at the meeting. Equally, it seems implausible and barely credible that Mr Harper’s decision, and his reasons for arriving at it, were not materially influenced by what was said by the other persons present at the meeting, including the lawyers. Yet according to Mr Harper, Mr Mazzarolo and Mr Miller, they had no recollection of anything, or at least anything of significance being said by the other officers, and in particular the lawyers. That is difficult to accept.

151    It may well be that the in-house and external lawyers were not called to give evidence because some or all of what they could say would be covered by client legal privilege under s 118 of the Evidence Act 1995 (Cth). If that was the case, the evidence could not be adduced if objected to by De Martin & Gasparini. Needless to say, however, it was open to De Martin & Gasparini to waive any privilege claim it might have. Putting express waiver to one side, the other problem that De Martin & Gasparini had to grapple with in relation to the presence of the internal and external lawyers at the meeting was that, if it was conceded that anything said by the lawyers may have been taken into account by Mr Harper in arriving at his decision, or otherwise influenced his state of mind or reasoning, any privilege attaching to those communications could be impliedly waived: see Archer Capital 4A Pty Ltd as trustee for the Archer Capital Trust 4A v Sage Group plc (No. 3) [2013] FCA 1160; 306 ALR 414 at [3]-[23] and the cases there referred to.

152    It is difficult to escape the conclusion that, instead of either expressly waiving privilege, or confronting the issue of implied waiver, the lawyers were simply written out of the script.

153    It should perhaps be noted, in this context, that De Martin & Gasparini did claim legal professional privilege in respect of a number of written communications that would otherwise have been required to be produced in answer to the CFMEU’s subpoena. That privilege claim was challenged by the CFMEU, including on the basis that any privilege attaching to the documents had been impliedly waived. The privilege claim was upheld on the basis of the material that was before the Court at that time: see Construction, Forestry, Mining and Energy Union v De Martin & Gasparini Pty Limited [2017] FCA 856. As already indicated, however, no such privilege claim was made in respect of any oral communications at the 28 June meeting, other than one claim made in the course of the cross-examination of Mr Miller. That privilege claim was not challenged by the CFMEU.

154    Had De Martin & Gasparini claimed client legal privilege in respect of any oral communications at the 28 June meeting, and if that claim had been upheld, no adverse inference could be drawn against De Martin & Gasparini on that basis. If, however, it is accepted that it is likely that some legal advice was given at the meeting, the failure of De Martin & Gasparini to call evidence of that legal advice may be taken into account in the circumstances. In Wayne Lawrence Pty Ltd v Hunt [1999] NSWSC 1044, Hodgson CJ in Eq said (at [15]):

It appears to be the law that where legal professional privilege or other privilege is claimed, that of itself cannot be the basis of an adverse inference being drawn against the party claiming that privilege. However, in my opinion, where a party is claiming to make out a case, and that party bears the onus of proof, and where that case could be given positive support by calling evidence of legal advice or lack of legal advice, the failure of that party to call that evidence can be taken into account in deciding whether that party has discharged the onus of proof which it bears. The plaintiff's solicitor accepted that this was so during argument. I take that view into account in reaching the conclusion that I do reach, because my view that the upholding of privilege does not involve unfairness to the defendant does depend upon my view that the defendant is not precluded from commenting on, and relying on, the failure of the plaintiff to support its case by giving evidence about its legal advice, or lack of legal advice, on this point.

155    The reasoning in this passage from Hodgson CJ in Eq’s judgment in Wayne Lawrence does not directly apply to the circumstances of this case, if only because, aside from the oblique reference in Mr Miller’s affidavit, the evidence adduced by De Martin & Gasparini did not suggest that any legal advice was given during the 28 June meeting. For the reasons already given, and for the reasons given later in the context of the evidence of each of Mr Harper, Mr Mazzarolo and Mr Miller, I consider that implausible and difficult to accept. For this, and other reasons given later, I am far from persuaded that the evidence given by Mr Harper, Mr Mazzarolo and Mr Miller concerning the 28 June meeting was a complete, honest, reliable and credible account of what was said and decided at the meeting. Rather, I consider that the evidence that was given concerning the meeting was limited to very general statements that were consistent with the defence to the CFMEU’s claim. Anything that was perceived as being problematic or inconvenient to the defence, including anything said be the lawyers, appears to have been conveniently forgotten or ignored.

156    Another matter that causes me to doubt the reliability and credibility of De Martin & Gasparini’s evidence concerning the 28 June meeting has already been briefly adverted to. It would seem that, with the exception of Mr Gidaro, none of the other meeting attendees or participants took a note of the discussions or the decision taken or approved at the meeting. Reference has already been made to the late production of Mr Gidaro’s notes concerning the 28 June meeting. The note that was produced was redacted to reflect a legal professional privilege claim. This in and of itself supports the inference that some legal advice was given at the 28 June meeting. No other notes were produced in answer to the CFMEU’s subpoena. The evidence of each of Mr Harper, Mr Mazzarolo and Mr Miller was to the effect that they did not take notes and did not see anyone else taking notes. It would, at first blush, appear to be somewhat surprising, if not unusual, that only one person, Mr Gidaro, who was probably the most junior officer at the meeting, and who only attended by telephone, would takes notes at such an important meeting.

157    Both Mr Mazzarolo and Mr Miller also gave evidence about what was said and done during the 3 July meeting. That evidence was given orally. They were cross-examined concerning that evidence. As was the case with their evidence concerning the 28 June meeting, there were some issues concerning the credibility and reliability of aspects of their evidence in relation to what was said during the 3 July meeting. These issues will be addressed later in the context of some of the specific issues.

158    As this is a civil proceeding, the standard of proof is the balance of probabilities. The Court must, however, have regard to s 140(2) of the Evidence Act, which provides that, without limiting the matters that a court may take into account in deciding whether it is satisfied on the balance of probabilities, the court is to take into account: the nature of the cause of action or defence; the nature of the subject-matter of the proceeding; and the gravity of the matters alleged.

159    It is generally accepted that s 140(2) largely reflects the position at common law; in particular the frequently cited discussion of the civil standard of proof by Dixon J in Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336 at 361-363. In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v Australian Competition and Consumer Commission [2007] FCAFC 132; 162 FCR 466, it was observed (at [31]):

Even though he spoke of the common law position, Dixon J’s classic discussion in Briginshaw v Briginshaw (1938) 60 CLR 336 at 361-363 of how the civil standard of proof operates appositely expresses the considerations which s 140(2) of the Evidence Act now requires a court to take into account. Dixon J emphasised that when the law requires proof of any fact, the tribunal must feel an actual persuasion of its occurrence or existence before it can be found. He pointed out that a mere mechanical comparison of probabilities independent of any belief in its reality, cannot justify the finding of a fact. But he recognised that (Briginshaw 60 CLR at 361-362):

No doubt an opinion that a state of facts exists may be held according to indefinite gradations of certainty; and this has led to attempts to define exactly the certainty required by the law for various purposes. Fortunately, however, at common law no third standard of persuasion was definitely developed. Except upon criminal issues to be proved by the prosecution, it is enough that the affirmative of an allegation is made out to the reasonable satisfaction of the tribunal. But reasonable satisfaction is not a state of mind that is attained or established independently of the nature and consequence of the fact or facts to be proved. The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters “reasonable satisfaction” should not be produced by inexact proofs, indefinite testimony, or indirect inferences. Everyone must feel that, when, for instance, the issue is on which of two dates an admitted occurrence took place, a satisfactory conclusion may be reached on materials of a kind that would not satisfy any sound and prudent judgment if the question was whether some act had been done involving grave moral delinquency.

160    This proceeding is a civil penalty proceeding. It involves very serious allegations against De Martin & Gasparini, Mr Mazzarolo and Mr Miller that may result in findings that those persons contravened provisions in the Fair Work Act and Building Act. These are considerations that must be borne in mind when making findings of fact, on the balance of probabilities, concerning those allegations. That said, the standard of proof remains the balance of probabilities. There is no separate “Briginshaw standard”. That point was made, and the proper way to take account of matters such as the gravity of the allegations was articulated, in Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd [1992] HCA 66; 110 ALR 449 at 449-450:

The ordinary standard of proof required of a party who bears the onus in civil litigation in this country is proof on the balance of probabilities. That remains so even where the matter to be proved involves criminal conduct or fraud. On the other hand, the strength of the evidence necessary to establish a fact or facts on the balance of probabilities may vary according to the nature of what it is sought to prove. Thus, authoritative statements have often been made to the effect that clear or cogent or strict proof is necessary “where so serious a matter as fraud is to be found”. Statements to that effect should not, however, be understood as directed to the standard of proof. Rather, they should be understood as merely reflecting a conventional perception that members of our society do not ordinarily engage in fraudulent or criminal conduct and a judicial approach that a court should not lightly make a finding that, on the balance of probabilities, a party to civil litigation has been guilty of such conduct.

Issue 1: what was said and done at the 28 June meeting?

161    As noted earlier, only Mr Harper, Mr Miller and Mr Mazzarolo were called to give evidence in relation to the meeting that was held on the afternoon of 28 June 2017. Of course, neither the CFMEU nor any of the employees were at the meeting.

Mr Harper’s evidence concerning the 28 June meeting

162    Mr Harper was a director of De Martin & Gasparini. De Martin & Gasparini was a business within the Boral Cement business unit of Boral Australia. Mr Harper was Executive General Manager of Boral Cement and thereby had management responsibility within the Boral hierarchy for the De Martin & Gasparini business. It seemed to be ultimately accepted by the CFMEU that Mr Harper was the most senior officer at the 28 June meeting and was the person who made or approved the decision that led to the action taken by Mr Mazzarolo and Mr Miller at the 3 July meeting.

163    Mr Harper’s evidence was that after becoming aware of the unsuccessful vote to vary the Enterprise Agreement, he formed the view that there was no viable course of action other than make the employees who were party to the Enterprise Agreement redundant and thereby “remove” the non-compliant agreement. He said:

Q: And did you, during the day on 28 June, resolve anything in relation to those options, in your own mind?

A: In my own mind, yes. I was aware of the outcome of the vote early in the morning, and that day I had scheduled to spend some time – the – the – the – the day after, I had a commitment – a whole-day commitment where I needed to do some preparation, but I had some time during that day, before a scheduled meeting, I think, at about 4 pm, to – to really dwell on the – the merits and otherwise of the options that presented themselves to – to me, and as referred to there, one option was to consider an indication from the union that they were willing to meet on the 10th. I think elsewhere in my affidavit, I – I describe the reasons why that was untenable to me. That did not form a – a commitment. I could not rely on and put the interests of the business and the risks the business faced simply in the hands of a third party on the basis that they were apparently going to meet. It was at that stage – given that that was an untenable option in my own mind, it was at that stage that I confronted the reality that the only viable course of action, to me, was – to achieve compliance for the organisation, was to be able to remove a non-compliant agreement, that I had to consider major workplace change and consider redundancies for all EBA-covered employees because the deadline of 1 September was very much in my mind.

(Emphasis added)

164    Mr Harper explained that the “deadline” of 1 September 2017 was the date that Boral Australia was required to ensure that its businesses were all “Code compliant”, failing which it would breach the Code and be sanctioned. If De Martin & Gasparini had an enterprise agreement that did not comply with the Code, Mr Harper was concerned that this would have a significant adverse impact for all the Boral Australia businesses.

165    Mr Harper’s evidence concerning the discussions that occurred at the 28 June meeting was vague and at times confused and confusing. That is surprising given the importance of what was discussed and apparently decided at the meeting. It is worth noting in this context as well that only a month had passed between the meeting and the occasion that Mr Miller was called upon to give evidence about it.

166    Mr Harper’s evidence was that the first topic that was discussed at the meeting was the results of the vote. Some of the participants at the meeting viewed it positively, whereas others viewed it negatively.

167    The next topic, which was introduced by Mr Sleeman, was next steps. There was discussion about the available options. Mr Sleeman said that the options were to “canvass whether another vote was possible” and to “consider major workplace change and the consideration of redundancies”.

168    Mr Harper appeared to have very little recollection of exactly what was discussed concerning the option of a second vote. In his affidavit, Mr Harper simply said that it was his understanding that it “was a matter for the workers to decide if there would be a further vote and it was not a matter that [De Martin & Gasparini] could initiate” and that “no-one said anything to contradict this in the meeting”. In his oral evidence in chief, Mr Harper said that he recalled Mr Mazzarolo saying that “if we did not have union support, then our history was that we would not get a favourable outcome”. Mr Harper also said that he was concerned about the “timeliness” of arranging a second vote. Beyond that, Mr Harper said that he did not recall anyone saying anything about the possibility of a second vote.

169    Mr Harper was cross-examined about the basis of his understanding that only the workers could initiate a second vote. His evidence included the following:

Q: Now, I’m just trying to understand, whether rightly or wrongly, where you got that understanding from in the meeting?

A: Well, I think I’ve already submitted that there was some discussion about the merits or otherwise of another vote.

Q: And it was during that discussion?

A: During that discussion where I listened to the fact that history was against us. I think I’ve already submitted around that.

Q: Yes?

A: It was just during the course of that discussion I took away the fact that somehow the workers would have to invoke another vote. It was my simple misunderstanding of process.

Q: Well, someone discussed the question of whether the workers could, as it were, change their mind and re-agitate the question of the vote for themselves; is that the situation?

A: Say that again.

Q: Someone raised the prospect of the workers coming to management and saying, “We want another vote.” Even if they’re not going to initiate the vote, that they could come to management and say, “We want another vote”?

A: Well, however that would arise, whether it was workers initiating it or the union initiating it.

Q: Yes. But that matter was discussed?

A: The matter of – of a second vote was discussed.

Q: Yes?

A: And as I’m saying here, my take away, whether correct or incorrect, was that, you know, it was for the workers to decide.

Q: So you understood at the time, rightly or wrongly, as you say, that the workers could initiate a second vote?

A: Yes.

Q: And you say no one said anything to contradict this in the meeting?

A: Not at the meeting, no.

Q: Well, did someone say something after the meeting?

A: No. No. It was simply I am stating my misunderstanding or understanding at the time.

Q: Well, do you now think it was a misunderstanding, do you?

A: Yes. I understand that, you know, what – that that is not solely workers to initiate another – another vote.

Q: And when did you find that out?

A: Well, I don’t know exactly when, but some time after – some time after this meeting. But we had already discounted, as I said, that a second vote had merit.

Q: Yes, but what you discounted was the company putting forward a second vote?

A: No. A second vote.

170    In answer to subsequent questioning, Mr Harper seemed to suggest that he obtained his understanding from the statement that Mr Mazzarolo made to the effect that there was unlikely to be a favourable result if the CFMEU did not support the vote. Ultimately, Mr Harper confirmed that the option of another vote with the support of both the CFMEU and the workers was canvassed at the meeting, though he appeared unable to recall anything said by anybody on that topic beyond the single statement made by Mr Mazzarolo.

171    It is perhaps understandable and plausible that Mr Harper might have come to understand that there was little point in arranging another vote unless it was supported by the voters. What is difficult to understand, however, is Mr Harper’s apparent suggestion that he rejected altogether the option of a second vote, even if it was a vote that was instigated and supported by the employees. It is also somewhat difficult to accept that Mr Harper had such a limited recollection of the discussions concerning the option of a second vote and the basis of his understanding that De Martin & Gasparini could not initiate a second vote. One would expect, for example, that the lawyers who were present at the meeting may have provided some input in relation to that issue.

172    Mr Harper’s evidence concerning the discussion that occurred in relation to the other option, major workplace change in the form of redundancies, was equally vague. The extent of Mr Harper’s evidence on that topic was that Mr Fisher said that “major workplace change and effecting redundancies was a viable option”. Mr Harper said that there was consensus with Mr Fisher’s statement, though he was unable to recall any specific statement from anyone to that effect.

Q: And do you recall any particular statement?

A: I don’t recall any particular statement. My state of mind was that I had formed my own view coming into that meeting and that the exchanges were interesting. The fact that major workplace change was what was being discussed as the most realistic option was consistent with my own view that I had formed in coming into the meeting. The purpose of the steering committee, as the businessperson responsible, was to listen to those views.

Q: All right. And did you yourself say anything about the topic of redundancies or major workplace change?

A: Having – having listened to, you know, that consensus view, I think at – towards the end of the meeting, I said, “I understand the position, and I agree with it.” That was consistent with the view that I had formed coming into the meeting, but I did not want to presume that it was going to be the prevailing view until I had heard, you know, what – what was going to transpire at the meeting.

173    The next topic that was discussed, accordingly to Mr Harper, was “process”. Mr Harper’s evidence was that Mr Sleeman said that “this” – presumably meaning redundancies, or considering redundancies – “constituted major workplace change” which “triggered clause 31, which required notification and commitment to consultation”.

174    Mr Harper’s evidence was that he listened to and participated in the discussions between the “advisers and functional subject matter experts” who were present at the meeting. He was there to “speak for and act for the business”. At the end of the meeting, if he agreed and endorsed the view, then that was the decision taken. When asked what the decision was, he said “to effect workplace change”. According to Mr Harper, that workplace change was “redundancies for all EBA covered employees, of which we had approximately 110”. He agreed that, putting aside the option of a second vote, as he saw it the only other way to make the company Code compliant was to make all of the employees who were parties to the agreement redundant.

175    There could be little doubt that, as Mr Harper saw it, once the employees had voted down the proposed variations to the Enterprise Agreement, unless the employees initiated a second vote and agreed to vary the Enterprise Agreement to make it Code compliant, the only option available to him, on behalf of De Martin & Gasparini and Boral, was to make the employees redundant by 31 August 2017. That was confirmed during the following exchange in cross-examination:

Q: And can I just ask this about the decision that the employees could be made redundant that was taken, that I think you gave evidence about. It was your understanding at the time that decision was made that the only way the redundancies could be averted was if the agreement by whatever means became code compliant prior to the proposed dates of the redundancies?

A: Yes.

Q: And the only way that could occur is if there was another vote; you understood that, didn’t you?

A: Yes.

Q: And you also took the decision that the company wouldn’t be initiating another vote at that meeting?

A: I didn’t take the position. It was my understanding.

Q: I thought you rejected that?

A: Sorry. Yes. No, you’re right. I had rejected that in my mind from the point of view of its time – time duration. So time was against us.

Q: Yes. But it left open the option – that left open the only option by which there could be another vote being at the initiative of the workers or the union?

A: Yes.

Q: And you thought that at the time?

A: Yes.

Q: On the 28th?

A: As –as remote as it seemed in terms of outcome, yes.

Q: Yes. But if there wasn’t any change in the vote, your thinking as at 28 June was that the dismissals would inevitably occur?

A: That was the only realistic option that was presenting itself at that time.

Q: So the answer to my question is you thought they would inevitably occur, those redundancies?

A: I could not 100 per cent rule out the fact that another vote would occur. I mean

Q: I’m saying putting that aside?

A: Well, why would I put it aside, because I couldn’t 100 per cent rule it out. There are externalities that happen in business

Q: No. But my question was, if there was no such vote, your thinking was that the redundancies would inevitably occur?

A: Yes.

176    Importantly, Mr Harper gave the following evidence in relation to his reasons for making that decision:

Q: So could you, for the benefit of his Honour, just briefly summarise the reasons why you made that decision?

A: Look, I go back to my description of the risks to – to the business. I was – my – my real belief was that I was running out of runway, the organisation was running out of runway in terms of 1 September to effect a code compliant entity for that business to stay with Boral Australia and all of the risk that presented if it was non-compliant. So I won’t go back over them. I think, your Honour, they are as I described. That we had an exposure that meant that De Martin & Gasparini were subservient to the rest of the Boral Australia group of businesses.

Q: Thank you. Now, at the meeting on 28 June you were aware, of course, that the DMG construction workers had the benefit of the enterprise agreement?

A: Indeed.

Q: You’re aware of that?

A: Yes.

Q: And to what extent did that fact have any role in the decision you made?

A: None. I respect that fact.

Q: And you were aware at the meeting that the DMG construction workers had exercised their right to vote on the varied enterprise agreement; were you aware of that?

A: I was aware of that. I understood that.

Q: And to what extent did that fact have any role to play in the decision you made?

A: None at all. I respected the fact that that was their right to exercise their vote in a particular way and it was in the negative. Whilst it was disappointing, I respect that right.

177    It will be necessary to consider Mr Harper’s evidence concerning his reason or reasons for making the relevant decision in detail later in these reasons. It is perhaps sufficient to say at this stage that it is difficult to accept the emphatic and unqualified assertion or denial by Mr Harper that the fact that the employees had the benefit of rights under the Enterprise Agreement, and had exercised their right to vote in relation to varying the agreement, played no role in his decision. It may be accepted that Mr Harper’s ultimate concern was that there would be potentially serious financial and other repercussions for De Martin & Gasparini and Boral if De Martin & Gasparini was covered by an enterprise agreement that did not comply with the Code on 1 September 2017. However, De Martin & Gasparini’s non-compliance with the Code was only an issue because the employees had refused to approve the variations to the Enterprise Agreement that the company had put forward. The employees therefore continued to be covered by and have the benefit of an enterprise agreement that apparently did not to comply with the Code. It is difficult to see how Mr Harper could credibly or plausibly claim that those considerations played no role in his decision where they were the very reason that De Martin & Gasparini and Boral found themselves in the difficult position they were in.

178    On an even more basic level, it is abundantly clear that the very reason for the meeting attended by Mr Harper on the afternoon of 28 June 2017 was to consider what to do in light of the fact that the employees had exercised their right to vote in relation to the variation of the Enterprise Agreement. If the workers had exercised their right in favour of approving the variations, there would have been no reason to make them redundant. To that extent, the fact that the employees had voted against approving the variations to the Enterprise Agreement was fundamental to Mr Harper’s decision. He confirmed as much in cross-examination:

Q: What I’m suggesting is this: that if the employees earlier in the day had voted for the variations to the agreement proposed by the company, you wouldn’t have taken any of the decisions that you took later in the day?

A: That’s correct.

Q: That vote by the employees was fundamental to your decisions that were made later in the day, wasn’t it?

A: Yes.

179    There are some other significant question marks over Mr Harper’s evidence concerning his reasons for making the decision. Central to Mr Harper’s reasoning, as he explained it, was his apparent belief that if the employees were made redundant, De Martin & Gasparini would somehow become Code compliant. Mr Harper was pressed in cross-examination to explain the basis of his belief in that regard. His evidence on that issue was far from compelling.

Q: … Now, I just want to understand or go to your understanding of the provisions of the code that you talked about and that you talk about in your affidavit. How does this – how do you understand that the dismissal of all these employees will lead to a situation where, to use your words, you’re not in breach of the code?

A: My understanding as of 1 September, if we have a noncompliant entity, then in the Boral Australia portfolio of businesses, it will compromise all the other businesses that are engaged in Commonwealth-funded work from expressing an interest in tendering or being awarded work and, if they do so, it places them in breach of the code.

Q: Well, thanks for that. I think you’ve told us that already, but I’m asking you how it helps your situation. How do you understand it helps your situation to dismiss all the employees?

A: Because that satisfies compliance across the Boral Australia portfolio of businesses.

Q: How?

A: Because DMG is then a compliant entity.

Q: How?

A: Because it does not have – it has avoided being in possession of a noncompliant enterprise agreement.

Q: And how does that work? The agreement’s still going to be in place, isn’t it?

A: No. We would remove the agreement.

Q: How?

A: Through the process of not having EA covered employees.

Q: Has someone told you you can remove the agreement if you’ve got no employees?

A: That’s my understanding.

Q: Where do you get that from?

A: It’s my understanding. I can’t recollect

Q: Where do you get that? Did it come out of your head? I noticed you’ve attached the legislation. Did you read the legislation?

A: I’m not a subject matter expert in terms of the code. I don’t profess to be.

180    As the person who made the decision to make the employees redundant, supposedly to ensure that De Martin & Gasparini was Code compliant, one would expect that Mr Harper would have a sound understanding as to exactly how redundancies would achieve that objective. It does not appear that he did, at least if his evidence was to be accepted. One would equally expect that, if he did not have a sound understanding as to how redundancies would achieve the desired outcome, Mr Harper would have asked for advice in relation to that issue. It will be recalled that the 28 June meeting was attended by a number of lawyers, or persons in apparently senior legal positions at Boral, including lawyers who apparently specialised in employment and workplace relations. One would expect that there would have been detailed discussion on that topic. It may be accepted that legal advice given during the meeting would have been covered by legal professional privilege. Mr Harper could have made a claim of legal professional privilege on behalf of De Martin & Gasparini or Boral. Mr Harper’s evidence, however, was that he had no recollection of receiving any legal advice on this issue:

Q: You do – you said you weren’t an expert on this. Didn’t you get some advice on it?

A: We have a compliance team that I’ve already described.

Q: And did they give you advice on it?

A: Not formal advice to correct my understanding.

Q: Forget about -- ?

A: I think it would be obvious that if you are indeed correct, then what I’ve said means that that advice has not been forthcoming to me in --

Q: I’m sorry? What are you saying?

A: I’m saying that I did not receive advice that – that changes my understanding. I’ve already submitted my understanding.

Q: But did you receive advice along the lines that you’ve just outlined as your understanding?

A: I can’t recall formal advice on that matter. Whether I picked it up from steering committee meetings or whatever, that was my understanding.

Q: Are you trying to – has someone told you to try and avoid mentioning any legal advice you’ve been given as a basis for your understanding?

A: Not at all.

Q: You’re sure about that?

A: I think I’ve sworn today, so --

Q: You’re telling the court that on a matter as important as this, you may not have got legal advice about it?

A: I am telling the court that the advice that I’ve received, formal or informal, has not led to an understanding that’s different than what I’ve already described.

Q: So you have had formal or informal advice on this topic, have you?

A: That’s not what I said. I said in the event that I have had formal or informal advice. I can’t recollect receiving formal advice specifically on the topic --

Q: All right?

A: -- that you are raising.

Q: So the answer to my question about your telling the court that you may not have got any legal advice on this topic is, “That’s correct.” You may not have got any legal advice on this topic at all?

A: Not the specific question you’re asking.

Q: Well, on the question of how – have you had any legal advice – and, once again, you may not recall – on the question of whether a code covered entity is no longer covered by an enterprise agreement if it has no employees. Have you had any legal advice on that?

A: As I say, I can’t remember formal legal advice on that specific question.

181    It should be noted that Mr Gidaro’s note of what was said at the 28 June meeting, which as discussed earlier was belatedly produced in answer to the CFMEU’s subpoena, was almost completely redacted on the basis of a claim of legal professional privilege. It seems tolerably clear that legal advice was given in relation to some issues in the course of the 28 June meeting.

182    In any event, it is implausible that the specific issue of whether making the employees redundant would result in De Martin & Gasparini being Code compliant by 1 September 2017 was not discussed at the 28 June meeting. It is equally implausible that, if it had been discussed, and legal advice given on that topic, Mr Harper would have had no recollection of that occurring. Mr Harper’s evidence on this issue lacked credibility. It casts doubt on the reliability of his evidence concerning the 28 June meeting and the basis of the decision he reached at or as a result of it.

183    On the whole, I consider that Mr Harper’s evidence concerning what was said and done at the 28 June meeting, and his reasons for making or endorsing the decision that was made at that meeting, to be lacking in reliability and credibility. His evidence concerning the discussions at the meeting was at best vague and imprecise. Given the importance of what was discussed and apparently decided at the meeting, and the fact that it occurred less than a month before he gave evidence, I consider it surprising, if not implausible, that Mr Harper would not recollect more about what was said and by whom at the meeting. In all the circumstances, I do not accept that Mr Harper gave a full and accurate account of all that was said and done at the 28 June meeting. I doubt that he was making a genuine attempt to recall all the discussions. Rather, he gave a version of events that was carefully tailored to support, or at least not damage, De Martin & Gasparini’s defence of the claim that the actions subsequently taken as a result of the decision made at the meeting constituted adverse action or coercion.

184    Equally, and more significantly, I do not accept that Mr Harper gave a full, accurate and honest account of his reasons for arriving at the decision. There is no doubt that De Martin & Gasparini was in a very difficult position following the employees’ vote against approving the proposed variations. As Mr Harper himself said in his evidence, the potential adverse commercial implications for Boral from De Martin & Gasparini having an enterprise agreement that did not comply with the Code were very serious. The decision was an extremely important and delicate decision for both Boral and De Martin & Gasparini, but also the employees. Yet Mr Harper’s evidence concerning his reasons for making the decision was at best rudimentary and sparse. It amounted to little more than an assertion that his reason for making the decision was that Boral was “running out of time to effect a code compliant entity for that business [De Martin & Gasparini] to stay with Boral”, coupled with a denial that the fact that the employees had the benefit of the [non Code compliant] Enterprise Agreement, and the fact that the employees had exercised their right to vote against the proposed varied agreement, played any role in his decision. Mr Harper was unable to give any plausible or credible explanation for how or why he came to understand that redundancies would result in De Martin & Gasparini becoming Code compliant. And for the reasons already given, his self-serving and unqualified denials about the employees’ benefits and rights relating to the Enterprise Agreement and its variation are incompatible with the objective facts.

Mr Miller’s evidence concerning the 28 June meeting

185    Mr Miller participated in the meeting by telephone. He was in De Martin & Gasparini’s offices at Homebush, together with Mr Mazzarolo and Mr Gidaro. His evidence was that the first topic discussed at the meeting was the result of the vote. It is unnecessary to detail Mr Miller’s evidence concerning the discussion that occurred in relation to that topic. The second topic that was discussed was the option of a second vote. That option was raised by Mr Sleeman. Mr Miller’s evidence was that, after some discussion on that topic, Mr Harper said: “look, the vote has gone down two-thirds to one third. The union position hasn’t changed. Louis and Greg have been discussing this with the union for months now. We’ve all seen what has happened in the papers. There’s – there’s no second vote”.

186    It was put to Mr Miller in cross-examination that at some stage during the meeting he said something along the lines that there would only be another vote if it came from the workforce. Mr Miller said that he did not believe that he said such a thing. The contemporaneous note of the meeting made by Mr Gidaro, however, tends to suggest that Mr Miller did say something about the possibility of there being a second vote if it was suggested by the employees. Mr Miller ultimately did not deny that there was a discussion around the option of another vote with the support of the union or the workers. His evidence, however, was that in the end the option of a revote was rejected by Mr Harper. As indicated earlier in the context of Mr Harper’s evidence, it seems somewhat implausible that Mr Harper would reject the option of entertaining a second vote, even if it was a vote instigated and supported by the employees.

187    According to Mr Miller, the next topic that was discussed was redundancies. Mr Miller could not recall who first raised that topic, but he recalled that at some stage Mr Harper said: “we need to consider redundancies to ensure that – as an option to ensure that DMG is code compliant by 31 August”. Mr Sullivan then said: “Well, that’s going to trigger clause 31. We need to notify the workforce that we would be seriously considering major workplace change in the form of redundancies”. Mr Harper agreed and said “yes, I agree with that. We need to start a consultation process”.

188    Mr Miller gave the following evidence concerning his view about the course that was being discussed:

Q: All right. And what was your view about the course that was being discussed?

A: I agreed with it. As I said, this was a – this is not necessarily a DMG issue. This is a – this is a Boral Australia issue and – and the risk to the business, as I mentioned before, was – was – was – was of non-compliance was too great. So I understood the decision and I – and I agreed with it. I was happy to act on it.

189    Like Mr Harper, Mr Miller was asked about his understanding of the reasons for the decision that was made at the 28 June meeting. He gave the following evidence in examination in chief:

Q: Now, at the time of the meeting, you were aware, weren’t you, that the DMG construction workers had the benefit of the enterprise agreement?

A: Yes.

Q: And what role if any did that play in the decision on 28 June, as far as you understood it?

A: None.

Q: And --

HIS HONOUR: What do you mean by that?

A: Well, the – the fact that they have an enterprise agreement has nothing to do with the decision that was made. The decision that was made is all about Boral achieving Code compliance, DMG achieving Code compliance.

HIS HONOUR: Thank you.

MR WHITE: And you were aware that the DMG workers had exercised their right to vote on the varied agreement?

A: Yes.

Q: And to what extent, as you understood it, did that play a role in the decision?

A: None.

190    As can be seen, Mr Miller’s evidence on this topic was almost identical to Mr Harper’s evidence. A number of points can again be made in relation to that evidence.

191    First, it was not suggested that Mr Miller was the relevant decision-maker. His evidence, therefore, appears to relate to his understanding of Mr Harper’s reasoning.

192    Second, and more significantly, Mr Miller’s explanation of the basis for his understanding was scant, at best. His evidence concerning what was said at the 28 June meeting was very limited. The fact that the decision was “all about Boral achieving Code compliance” and that the “risk to [Boral’s] business … of non-compliance was too great” does not mean, in the circumstances, that the decision had nothing to do with the fact that the employees had the benefit of an enterprise agreement and had voted not to approve the proposed variations to that agreement. The issue concerning Code compliance only arose because the employees were parties to an enterprise agreement that was considered not to comply with the Code and had not agreed to vary it to make it Code compliant.

193    Third, it is difficult to see how Mr Miller could genuinely have had this understanding. When asked later whether there would have been any reason to make the employees redundant if they had not been covered by the Enterprise Agreement, Mr Miller said: “I don’t think so. If they’re not – if there was no enterprise agreement, then this whole Building Code issue wouldn’t be – wouldn’t be an issue”. Likewise, when asked whether there would have been any reason to make the employees redundant if they had voted to vary the agreement, Mr Miller simply replied “no”.

194    Fourth, Mr Miller’s evidence that he understood that the decision made at the 28 June meeting was all about Boral achieving Code compliance appeared to be based on his understanding that Code compliance could be achieved by making the De Martin & Gasparini employees redundant. As was the case with Mr Harper, however, Mr Miller was unable to adequately explain that understanding, or where it came from. Mr Miller’s understanding was that if the company had no workforce, it wouldn’t be carrying on building work and therefore could not affect the rest of the “organisation”, meaning Boral. He also said that if there was no workforce, he assumed “that the Enterprise Agreement doesn’t exist as well”. That somewhat vague understanding did not appear to be based on anything that was said during the 28 June meeting. Mr Miller’s evidence was that he did not believe that anyone at the 28 June meeting explained how making the employees redundant would result in the Enterprise Agreement ceasing to exist.

195    There are a number of difficulties with Mr Miller’s evidence concerning how he understood that redundancies would result in De Martin & Gasparini becoming Code compliant. As noted earlier in the context of Mr Harper’s evidence, it is difficult to accept that nobody said anything concerning that important topic at the 28 June meeting. It is particularly difficult to accept that the lawyers present at the meeting did not provide any input on that topic. Like Mr Harper, Mr Miller appears to have largely written the lawyers out of the script insofar as the discussions at the 28 June meeting, and his understanding of the basis of the decision, were concerned. While Mr Miller’s affidavit made an oblique reference to legal advice being given and received at the meeting, he did not suggest that his understanding of the decision and the reasons for it was influenced in any way by that advice.

196    Mr Miller’s explanation also appeared to hinge on the proposition that once the employees were made redundant, De Martin & Gasparini would cease to engage in any building work. That aspect of his explanation was undermined by other evidence which suggested that De Martin & Gasparini would not necessarily cease to engage in any building work once the employees were made redundant. When pressed about his evidence that the company would cease to carry on building work after the redundancies, Mr Miller suggested that there was in fact some discussion at the 28 June meeting about “different operating models” or “different ways of doing business” that could be employed after the employees were made redundant. It thus appeared to be envisaged that De Martin & Gasparini would or could continue to engage in construction work after the employees were made redundant. Mr Miller was questioned further about the “different operating models”, however confidentiality orders were made in respect of some of that evidence, and ultimately the questioning came to an end when a claim of legal professional privilege was made. It is to be noted that Mr Miller volunteered nothing about the discussions on that topic when giving his evidence in chief.

197    The memorandum that was drafted after the 28 June meeting, the final version of which was given to the employees at the 3 July meeting, also suggests that the decision taken at the 28 June meeting did not necessarily involve De Martin & Gasparini ceasing to engage in any building work after 31 August 2017. Early drafts of the memorandum expressly referred to De Martin & Gasparini ceasing all work on or before 31 August 2017 and suggested that the proposed redundancies flowed from that fact. The final draft of the memorandum, however, removed all references to the company ceasing all work. It simply referred to De Martin & Gasparini “ceasing to have EBA employees doing any work”. That appeared to undermine Mr Miller’s understanding of how the redundancies would result in De Martin & Gasparini becoming Code compliant. The 3 July memorandum went through various iterations and was worked on by a number of people, including some of the lawyers who were present at the 28 June meeting. Mr Miller was consulted about and provided input in relation to the drafting of the 3 July memorandum. The memorandum was no doubt carefully worded.

198    Finally, as will be seen, Mr Mazzarolo’s evidence also suggested that there were discussions about retaining subcontractors so that De Martin & Gasparini could continue to engage in building work after the employees had been made redundant. Mr Miller did not recall any discussions concerning subcontractors. Mr Mazzarolo’s evidence on this issue again undermined Mr Miller’s explanation of his understanding about how the redundancies would result in De Martin & Gasparini and Boral becoming Code compliant.

199    In all the circumstances, I am not satisfied that Mr Miller gave a reliable and credible account of the discussions that occurred at the 28 June meeting. Nor am I satisfied that Mr Miller gave a fulsome account of all that was discussed at the meeting. Rather, he tended to tailor his evidence to suit what he perceived to be in the interests of his and De Martin & Gasparini’s defence. Equally, I do not consider Mr Miller’s evidence concerning his understanding of the reasons for the decision made at the meeting to be credible, reliable or persuasive. I do not accept that Mr Miller genuinely believed or understood that the decision had nothing to do with the fact that the employees had the benefit of rights under the Enterprise Agreement and had exercised their rights not to agree to a variation of the Enterprise Agreement. While it may perhaps be accepted that Mr Miller understood that the decision reached at the meeting was “all about Boral achieving Code compliance”, Mr Miller well knew that the very reason senior management was meeting was because the employees had exercised their right to vote in relation to the proposed variations. He accepted that there would have been no reason to make the employees redundant if they had not exercised their voting right against approving the variations, or if the employees no longer retained the benefit of the non-complying Enterprise Agreement.

Mr Mazzarolo’s evidence concerning the 28 June meeting

200    Mr Mazzarolo had a relatively poor recollection of what was said at the 28 June meeting. He effectively recalled only six specific things that were said during the meeting.

201    First, he recalled that someone said that “it is imperative that the Boral Group is not exposed to the risk of operating under a non-Code compliant agreement as at 1 September 2017”. He initially did not recall who said that, but subsequently said that he believed it was Mr Harper.

202    Second, someone said that “there is a realistic prospect that in order to avoid the risk of Boral not being Code compliant [De Martin & Gasparini] would need to make the employees redundant”. Mr Mazzarolo does not know or does not recall who made that statement. He did recall, however, that someone also said that they could not see any other realistic option. It was Mr Mazzarolo’s view that the only way that Boral could avoid the risk of not complying with the Code was to make the workforce redundant.

203    Third, someone said “if we are considering making the employees redundant, it is necessary to notify them under the EA and follow the consultation process”. Mr Mazzarolo again could not recall who said those words. He also recalled that someone said that the consultation process had to begin quickly. Mr Mazzarolo agreed, in cross examination, that the discussion concerning the consultation process only occurred after the decision concerning redundancies had been made.

204    Fourth, someone said “even though 34 employees voted for the compliant EA, 64 voted against it and it seems a waste of time to try to have a second vote”. Mr Mazzarolo also recalled that, on this topic, he said that the only way the employees would change their mind is if the union changed its mind. Importantly, Mr Mazzarolo denied that Mr Miller said, in that context, that the only way that there would be another vote is if it came from the workforce.

205    Fifth, Mr Mazzarolo said “if we are considering making the men redundant and replacing them with subbies [subcontractors], that will not be an easy process because the union will obstruct it”. It is not clear whether anyone said anything in response to that statement. Mr Mazzarolo did not appear to recall if anything was said in reply. Needless to say, neither Mr Harper nor Mr Miller recalled Mr Mazzarolo making this statement. Mr Harper’s evidence did not touch on what was going to happen once the employees were made redundant. In any event, it is quite clear that Mr Mazzarolo was under the impression that no decision had been made that De Martin & Gasparini would cease building work altogether when the employees were made redundant. Indeed, Mr Mazzarolo’s main concern appeared to be how the company was going to deliver the projects and honour its existing contracts. Where was it going to source the labour once the existing employees were made redundant?

206    Sixth, towards the end of the meeting, Mr Harper said “I agree we should go ahead with the consultation process”.

207    Like Mr Harper and Mr Miller, Mr Mazzarolo was questioned about his understanding concerning the reasons for the decision reached at the 28 June meeting. In particular, he was asked whether the fact that the employees had the benefit of the Enterprise Agreement and had exercised their right to vote in relation to the proposed variations to the agreement, played any role in the decision that was made at the 28 June meeting. His evidence was as follows:

Q: Now, I just want to ask you at the 28 June meeting, you were aware that the DMG construction workers had the benefit of the EBA. You were aware of that fact?

A: Yes.

Q: To what extent, as you understood it, did that play a role in the decision that was made at the meeting?

A: Well, the EBA says that we must consult as soon as we’re aware that we’re making a workplace change. So as soon as the decision was made that we were considering redundancies, under our EBA, we’re obligated to start consulting with the workers and their representatives.

Q: And at the meeting on the 28th, you were obviously aware that the DMG workers had exercised their right to vote on the varied agreement. You’re aware of that fact?

A: Yes.

Q: To what extent did that fact, as you understood it, play a role in the decision that was made on 28 June?

A: Only that it meant that we didn’t achieve [Code] compliance.

208    On the whole, while Mr Mazzarolo appeared to be endeavouring to give an honest account of what he recalled about the 28 June meeting, I do not consider that his very sparse account of what was said and decided at the 28 June meeting was either accurate or reliable. It certainly wasn’t complete. His evidence, such as it was, concerning his understanding of the reasons for the decision made at the meeting showed, if anything, that he had limited insight into the underlying reasons for the decision. It was of little, if any, assistance.

Mr Gidaro’s note

209    The final piece of evidence concerning the 28 June meeting was Mr Gidaro’s note. As has already been noted, De Martin & Gasparini did not call Mr Gidaro. He was called by the CFMEU after Mr Gidaro’s notes of the 3 July meeting and the 5 July toolbox talks were eventually produced in answer to the CFMEU’s subpoena. He was only questioned about those meetings. Mr Gidaro’s note of the 28 June meeting was not produced until the CFMEU had closed its case. The CFMEU tendered the note and it was admitted into evidence.

210    The note is only one page long. It is redacted on the basis of a claim of legal professional privilege that was not challenged by the CFMEU. What it does reveal is that the meeting lasted for 38 minutes, that the unsuccessful vote was the first topic that was discussed and that, in that context, or at least shortly after that discussion, Mr Miller said words to the effect “only next vote if it comes from the workforce”. As already noted, Mr Miller effectively denied that he said any such thing.

Conclusions in relation to the 28 June meeting

211    For the reasons that have already been touched on, the evidence concerning the 28 June meeting was unsatisfactory and unreliable in some respects. In particular, I am not satisfied that any of the three witnesses who gave evidence about the meeting, Mr Harper, Mr Mazzarolo and Mr Miller, gave a full and accurate account of what was said at the meeting. Nor am I satisfied that they gave a credible or reliable explanation of the reason, or their understanding of the reason, for the decision that was made or approved at the meeting.

212    The following findings can be made about the meeting.

213    First, the meeting was called very shortly after, and directly in response to, the employees voting not to approve the variations to the Enterprise Agreement proposed by De Martin & Gasparini. The purpose of the meeting was to discuss and decide on the next steps that should be taken, in light of the adverse vote, to ensure that De Martin & Gasparini would comply with the Code by 1 September 2017.

214    Second, it was a high-level meeting attended by senior officers of Boral and De Martin & Gasparini, along with internal and external lawyers. Many of the attendees were members of Boral’s Steering Committee responsible for ensuring that Boral complied with the Code. Mr Harper was the most senior officer responsible for De Martin & Gasparini.

215    Third, the first issue that was addressed at the meeting was the result of the vote. Some different views were expressed about what the result indicated, though it was agreed that there was little point in De Martin & Gasparini instigating a second vote unless it was supported by the CFMEU. In that context, Mr Miller said something along the lines that there should only be a second vote if it came from the workforce.

216    Fourth, the next issue that was discussed was redundancies. The consensus reached after discussion was that, if no second vote was instigated by the workforce, the only viable option for De Martin & Gasparini to achieve Code compliance by 1 September 2017 was to make all of the approximately 110 employees who were covered by the Enterprise Agreement redundant by 31 August 2017. Mr Harper agreed and endorsed that decision. While each of Messrs Harper, Mazzarolo and Miller, at various times, claimed that it was only decided that “major workplace change” in the form of redundancies should be “seriously considered”, there could be no doubt that the decision that was made was that, unless the employees instigated and supported a second vote, the employees would be made redundant by 31 August 2017.

217    Fifth, it was next discussed and agreed that, given that redundancies would constitute a major workplace change, De Martin & Gasparini was required by clause 31 of the Enterprise Agreement to consult with the employees and the CFMEU. That was the process that had to be gone through before the redundancies could be effected. When giving evidence concerning the decision that was made at the 28 June meeting, each of Mr Harper, Mr Mazzarolo and Mr Miller said redundancies were only being “seriously considered” because they knew that was the language used in clause 31. The decision concerning process, however, was only made once it was decided that the employees would be made redundant on 31 August 2017 unless there was a second vote.

218    Sixth, as already indicated, I am not satisfied that any of the witnesses who gave evidence concerning the meeting gave a full, accurate or entirely truthful account of the discussions that occurred at the 28 June meeting in relation to redundancies and the reasons for deciding that, unless there was a second successful vote instigated by the employees, the employees would all be made redundant by 31 August 2017. It is difficult to accept that there was not a more detailed discussion concerning whether the proposed redundancies would result in De Martin & Gasparini becoming Code compliant and if so how that would come about. Equally, it is difficult to accept that there was not a discussion concerning the pros and cons of the decision, including the legal risks involved.

219    Seventh, for the reasons outlined earlier, I do not accept the evidence of either Mr Harper or Mr Miller concerning the reasons for the decision. In particular, I do not accept their evidence that the fact that the employees had the benefit of the Enterprise Agreement, and had the right under the Fair Work Act to vote in relation to the variation of that agreement, did not play any role in the reasons for making or approving the relevant decision concerning redundancies. I do not consider their unqualified denials that those matters played any role in the decision to be credible or reliable. Mr Mazzarolo gave no meaningful evidence concerning his understanding about whether those matters played any role in the decision.

220    Finally, as will be seen, the evidence concerning what was said at the 3 July meeting with the employees tended to undermine the reliability of the evidence of Messrs Harper, Miller and Mazzarolo concerning the 28 June meeting. In particular, some of the things that were said by both Mr Mazzarolo and Mr Miller tended to suggest, contrary to the evidence of Mr Harper and Mr Miller, that the decision taken in relation to proposed redundancies had everything to do with the fact that the employees had voted against the variations to the Enterprise Agreement and therefore still had the benefit of an enterprise agreement that was seen by Boral and De Martin & Gasparini to cause them problems concerning compliance with the Code.

Issue 2: what was said and done at the 3 July meeting?

221    It is unnecessary to consider the evidence concerning the 3 July meeting in its entirety. Some of the things that were said and done at the 3 July meeting were either uncontentious or relatively immaterial. As was noted earlier, it is clear that Mr Mazzarolo addressed the meeting first. He then read out the 3 July memorandum, advised the employees that he was stepping down from the Consultative Committee and that Mr Miller, Ms Macri and Mr Gidaro would represent De Martin & Gasparini on the committee, and then left the meeting. Mr Miller then addressed the meeting and engaged in some exchanges with some of the employees. The questions for resolution are what Mr Mazzarolo said at the very beginning of the meeting and what Mr Miller said after Mr Mazzarolo left.

Mr Mazzarolo’s opening remarks

222    In relation to Mr Mazzarolo’s statement at the commencement of the meeting, the key questions are whether Mr Mazzarolo represented to the employees that De Martin & Gasparini was considering making them all redundant because the Enterprise Agreement had not been varied (FASOC [13]) and that he had told them that that would happen if they did not “vote up” the proposed variations (FASOC [14]). More broadly, and having regard to the evidence that was adduced, the question is whether Mr Mazzarolo said words to the effect that the meeting was being held because they had not “got the yes vote up” and whether, after referring to the consideration of redundancies, he said words to the effect that “I told you that this would happen if you didn’t vote yes”.

223    The evidence of both Mr Ianni and Mr Vecchio was to the effect that Mr Mazzarolo said both those things. Mr Ianni’s evidence was that Mr Mazzarolo said:

The last couple of weeks been lots of talk about the Building Code and the company becoming Code compliant. I failed to get a Yes vote last week … because of that we are here this morning ... The vote wasn’t successful. Because of the vote not being successful, we are here today to consult with the committee and the workers in regards of major workplace change and the possibility of making everyone redundant.

224    Mr Ianni’s evidence was that Mr Mazzarolo then said that he was leaving the Consultative Committee and named the new members. More significantly he then said: “…we told you. We told you this was going to happen if you didn’t vote Yes. Boral is not going to jeopardise its business for De Martin’s”.

225    Mr Vecchio’s evidence was that Mr Mazzarolo said “…we’ve been talking about being co-compliant [sic] for the last couple of weeks. We’re here today because we failed to get a yes vote up … I told you this was going to happen if you guys didn’t vote up to change the variation”. Mr Vecchio then said that Mr Mazzarolo went on to read the letter.

226    Mr Gidaro’s evidence was that Mr Mazzarolo said “… we’ve been speaking about the building code for the last couple of weeks … we’re here as a result of not getting the vote up … there will be major workplace change or consultation period happening over the next few weeks”. Mr Gidaro’s account of the words spoken by Mr Mazzarolo was broadly consistent with his note, which reads “L: talking about bc past 2 weeks. Here because failed to get yes vote up. Legal obligation workplace changes.” In cross-examination by senior counsel for De Martin & Gasparini, Mr Mazzarolo and Mr Miller, Mr Gidaro said that Mr Mazzarolo did not say “told you so” or words to that effect. Mr Gidaro’s notes do not refer to any such statement.

227    Mr Mazzarolo’s evidence was that at the beginning of the meeting he said: “Guys, because of the failed vote, we’re no longer – we’re not Code compliant”. It is important to note, in this context, that Mr Mazzarolo read a copy of Mr Gidaro’s notes before he swore his affidavit. He did not say this in his affidavit, however the subheading above the part of his affidavit which deals with the 3 July meeting reads “Meeting of 3 July 2017 Marco notes 3 July”. The reference to Mr Gidaro’s note in the subheading appears to have been inadvertent. In cross-examination, Mr Mazzarolo admitted that he had asked Mr Gidaro for a copy of the note. He said that the “Marco notes 3 July” heading was included in his affidavit “as a reminder when we were doing the draft, and then when I was reading the final version, I didn’t read the heading”. When cross-examined on the note, Mr Mazzarolo’s version of what he said changed slightly. He said he did not recall saying “we’re here because we failed to get the yes vote up”, and said that what he said was: “Because we failed to get the vote up, we’re no longer – we are not Code compliant, and because of that we need to go the next process”. Mr Mazzarolo denied saying anything along the lines of “we told you this was going to happen”.

228    Mr Miller’s evidence concerning Mr Mazzarolo’s opening statement was quite different from all the other witnesses. His evidence was that Mr Mazzarolo said:

Gents, I’ve got a difficult situation that I’ve got to talk you through right now. I’m going to talk to you and then I’m going to hand over to Greg, who’s going to talk about the next steps. There’s no easy way of saying this, so I’m just going to read through this letter that you will get at the end of the meeting.

229    In cross examination, Miller said that he did not recall, but did not deny, that Mr Mazzarolo opened the meeting with words to the effect “we’ve been speaking about the building code for the last couple of weeks”. He emphatically denied, however, that Mr Mazzarolo said something to the effect that “we’re here as a result of not getting the vote up”.