FEDERAL COURT OF AUSTRALIA

Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union [2019] FCA 1942

ORDERS

THE COURT ORDERS THAT:

1.    The respondent pay a pecuniary penalty of $38,000 in respect of its contraventions of s 417(1) of the Fair Work Act 2009 (Cth).

2.    The penalty be paid to the Commonwealth, within 28 days of the date of these orders.

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

REASONS FOR JUDGMENT

JAGOT J:

1    For the reasons set out below I have decided that the respondent should pay a single penalty of $38,000 for its contraventions of the Fair Work Act 2009 (Cth) (the FW Act).

Background

My penalty reasons

2    In Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union [2018] FCA 934 (my penalty reasons) I imposed a single penalty of $38,000 on the respondent in respect of its contravention of s 417(1) of the FW Act. I did so on the basis of the facts as found by me in Fair Work Ombudsman v Maritime Union of Australia [2017] FCA 1363, which I referred to as my principal reasons and declarations which I made in consequence as follows:

1.    In the period from 7 August 2015 to 14 August 2015, the Respondent contravened section 417(1) of the Fair Work Act 2009 (Cth) (FW Act), by organising industrial action by:

a.     employees of Sydney International Container Terminals Pty Ltd (ACN 134 826 798) (SICT) at the international container terminal at Port Botany, NSW operated by SICT (Sydney Terminal); and

b.    employees of Brisbane Container Terminals Pty Ltd (ACN 126 650 020) (BCT) at the international container terminal at Port Brisbane, QLD operated by BCT (Brisbane Terminal).

2.    In the period from 7 August 2015 to 14 August 2015, the Respondent was involved, within the meaning of subsection 550(2) of the FW Act, in contraventions of section 417(1) of the FW Act by:

a.     employees of SICT engaging in industrial action at the Sydney Terminal; and

b.    employees of BCT engaging in industrial action at the Brisbane Terminal.

3    To the extent relevant to the matter as presently constituted, I decided that s 557(3) of the FW Act should be construed to apply to pecuniary penalties that have previously been imposed on the same person in respect of the same course of conduct: at [14] of my penalty reasons. As a result I considered that s 557(3) of the FW Act did not prevent the CFMMEU from relying on s 557(1), that two or more contraventions are taken to constitute a single contravention if they are committed by the same person and arose out of a course of conduct by the person. I also decided at [27] that:

…even if s 557(1) did not apply in the present case, the common law course of conduct principle would apply to the determination of penalty.

4    I said at [33] of the penalty reasons that:

On the facts as found in the principal reasons it is apparent that the MUA was engaged in one overall concerted action to bring industrial pressure to bear on HPA not to implement the proposed redundancies at the Sydney and Brisbane terminals in a manner which the MUA considered would be in breach of the enterprise agreement, would result in the unlawful termination of around 100 employees, and destroy its own capacity to continue to function as an effective industrial organisation. On this basis the MUA organised industrial action by employees once, with that industrial action organised to occur in two locations, Sydney and Brisbane.

5    I also said:

38    I do not accept that, merely because “organising” industrial action within the meaning of s 417(1) is different from being “involved in” employees engaging in industrial action as provided for in s 550(1), the MUA’s conduct in the present case involved two different courses of conduct. As the principal reasons disclose, the same facts founded my conclusions the MUA both organised industrial action and was involved in employees engaging in industrial action. In short, the acts which led me to find the MUA organised the industrial action also led me to find that the MUA was involved in employees engaging in the industrial action. It is difficult to conceive of a case in which a finding of “organising” industrial action would not also necessarily prove being “involved in” employees engaging in industrial action but for present purposes it is sufficient that the same acts resulted in two sources of liability. There was thus a single course of conduct by which the MUA organised industrial action and was involved in employees engaging in industrial action.

39    As to the Sydney and Brisbane terminals, again, I accept that different MUA personnel were involved at some lower levels of action but it is also apparent from the principal reasons that the MUA was engaged, from its highest level down, in one concerted industrial campaign against HPA’s proposed redundancies. While the corporate entities in Sydney and Brisbane were different, they were related HPA companies and, on the facts found in the principal judgment, the MUA was implementing a single plan directed at HPA as the ultimate corporate owner of both ports.

40    For these reasons also I am satisfied that what occurred in Sydney and Brisbane were contraventions arising from a single course of conduct by the MUA.

41    It follows that s 557(1) operates according to its terms. The multiple contraventions of s 417(1) by the MUA are taken to constitute a single contravention. The maximum penalty for this single contravention is $54,000.

6    I then identified the matters of relevance to the imposition of penalty at [42] – [49], concluding at [49] that:

Having regard to all of these circumstances I consider that a penalty at the higher end of the range should be imposed in the amount of $38,000 for what must be taken as the MUA’s single contravention of s 417(1) of the Fair Work Act. This is about 70% of the maximum penalty which may be imposed.

The Full Court’s judgment

7    The Fair Work Ombudsman (the FWO) appealed from my order, resulting in the Full Court’s reasons, Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union (the Hutchison Ports Appeal) [2019] FCAFC 69.

8    Justice Flick, in dissent, would have dismissed the FWO’s appeal on all grounds.

9    Justice Ross disagreed with my construction of s 557(3). His Honour held that “s 557(3) is not confined to cases in which the prior penalty has been imposed for a contravention forming part of the same course of conduct that is before the Court”: [46]. His Honour also considered, however, that s 557(3) “would only disentitle an organisation of the benefit of s 557(1) if the earlier contravention of s 417(1) was in relation to the same enterprise agreement which is the subject of the present proceedings”: [70]. This led to Ross J’s conclusion at [71] that:

Applying this reasoning to the instant case it would follow that s 557(3) had no application because the pecuniary penalties previously imposed on the MUA for contraventions of s 417(1) did not relate to industrial action during the term of the enterprise agreement concerned in the present matter.

10    Justice Ross rejected the FWO’s other appeal grounds but said at [98] that because I “did not apply the common law principle at all and made no finding about how it would apply in the instant case”, having instead applied s 557(1), it was necessary to remit the matter to me for the determination of penalty. In the course of rejecting the FWO’s other arguments, Ross J referred to the fact that I had found the conduct of the MUA to be a single course of conduct: [104]. At [120] Ross J said:

…the primary Judge was satisfied that what occurred at the Sydney and Brisbane terminals were contraventions arising from a single course of conduct by the MUA. In my view not only was that conclusion reasonably open to her Honour but, with respect, I agree with it.

11    Justice Rangiah preferred the FWO’s construction of s 557(3) of the FW Act: [169]. His Honour noted that the common law contemplates that a single penalty may but will not necessarily involve a single fine for multiple contraventions arising from the course of conduct. In contrast, under s 557(1) of the FW Act, “multiple contraventions arising from a course of conduct are taken to constitute a single contravention, for which only a single penalty can be imposed”: [182]. Justice Rangiah was also of the view (in common with Ross J) that if s 557(1) did not apply the common law course of conduct principle would apply, the court being left with the instruction of s 546(1) to impose a pecuniary penalty that “the court considers is appropriate”. His Honour continued, saying at [183]:

Where there are multiple contraventions, assessment of an appropriate penalty must take into account whether the factual or legal circumstances overlap to an extent that there is a risk of multiple punishments for what is essentially the same contravention. In other words, the course of conduct principle must be considered.

12    At [189] Rangiah J said:

…I agree with Ross J that the reasoning in Rocky Holdings [Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153] raises further issues, not addressed in this appeal, concerning the construction and application of s 557(3) of the FW Act. In particular, there may be an issue as to whether, in the circumstances of a particular case, there has been another contravention of the same civil remedy provision. The relevant language in s 557(1) and (3) is similar but not identical and, in the absence of argument, I prefer not to express any opinion, provisional or otherwise, upon those issues.

(Original emphasis.)

13    As a result, the Full Court ordered that my orders be set aside and remitted to me for the determination of penalty.

The competing submissions

14    The FWO contended that Ross J’s approach to s 557(3), confining its operation to a contravention of the same enterprise agreement, was in error and should not be applied. As a result of the respondent’s prior contraventions of s 417(1) of the FW Act, on the FWO’s construction, s 557(1) did not apply. Consistent with the Full Court’s reasoning, the common law course of conduct principle did apply, the issue being whether the interrelationship between the legal and factual elements of the conduct may involve the offender being punished twice for what is essentially the same criminality: Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; (2010) 269 ALR 1 at [39]. The FWO noted that even if the contraventions arise from a single course of conduct a court may impose more than one penalty to ensure adequate punishment: Cahill at [48].

15    The FWO submitted, by reference to the facts as I had found them, that I should impose two penalties in respect of two contraventions of s 417(1) of the FW Act (one “organising” contravention and one s 550 “engaging” contravention) in order to ensure that the wrongdoing involved is adequately punished and that the objects of fixing an appropriate penalty have been adequately met. In so doing it referred to two recent findings of contraventions by the CFMMEU in unrelated matters which I had not taken into account in my earlier determination of penalty but otherwise relied on my findings.

16    The respondent submitted that the Full Court had not interfered with my finding at [40] of the penalty reasons that the two contraventions arise from a single course of conduct. The respondent also submitted that s 557(1) applied to the facts, adopting the reasoning of Ross J, with the consequence that the two contraventions were taken to be a single contravention for which a single penalty may be imposed. Alternatively, a single penalty should be imposed for the contraventions because they arose from a single course of conduct. The FWO had not identified any basis upon which the subsequent offences should be considered in determining penalty. Further, nothing in the Full Court’s reasons gives any cause to depart from the approach taken in the penalty reasons, the common law course of conduct principle applies, and it is appropriate for the respondent to be punished only once (albeit at the higher end of the scale as indicated in the penalty reasons).

Discussion

17    I do not consider that these reasons for judgment provide an appropriate opportunity to attempt to resolve the tension between the judgments of Ross and Rangiah JJ about the proper construction of s 557(3).

18    On that basis, I propose to proceed on the undisputed basis that the common law course of conduct principle applies. In my penalty reasons I found at [40] that the contraventions arose from a single course of conduct. I consider that the pecuniary penalty that it is appropriate to apply in all the circumstances of this case is the single penalty which I determined in my penalty reasons, being $38,000. In my view, to impose two penalties as proposed by the FWO, would involve punishing the respondent twice for the same criminality. I say this because, as set out in the penalty reasons at [39], the respondent was involved in “one concerted industrial campaign against HPA’s proposed redundancies”. Having regard to this fact and the other matters referred to in my penalty reasons, in particular at [42], I consider that to impose two penalties as the FWO sought would involve double punishment which the course of conduct principle is intended to avoid. In contrast, the penalty of $38,000 adequately reflects the wrongdoing involved in the respondent’s conduct and is an appropriate penalty in all of the circumstances.

19    In reaching these conclusions I have taken into account the two subsequent contraventions of the FW Act. I do not accept that these are irrelevant considerations. However, these subsequent contraventions do not change my view that the imposition of two penalties would involve double punishment, and nor do they lead me to a view that a greater penalty than $38,000 (or about 70% of the maximum) should be imposed.

20    Orders will be made accordingly.

Associate:

Dated:    21 November 2019