FEDERAL COURT OF AUSTRALIA
VID 123 of 2019
Date of judgment:
Crimes Act 1914 (Cth) s 4AA
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68
Fair Work Division
National Practice Area:
Employment & Industrial Relations
Number of paragraphs:
Solicitor for the Applicant:
Corrs Chambers Westgarth
Counsel for the Respondents:
Ms L Doust
DATE OF ORDER:
TO: THE AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION AND ZELJKO CIMBORA
IF YOU (BEING THE PERSON BOUND BY THIS ORDER):
(A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR
(B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO,
YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.
ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.
THE COURT DECLARES THAT:
1. The second respondent (Mr Cimbora), being an officer of the first respondent (AMWU), and acting in that capacity for the purposes of s 94 of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (the BCIIP Act), contravened s 52(a) of the BCIIP Act on 17 October 2017 by engaging in conduct with an intent to coerce NewCold Melbourne Holding Pty Ltd to employ persons as employees (Mr Cimbora’s Contravention).
2. In respect of Mr Cimbora’s Contravention, the AMWU is taken to have contravened s 52(a) of the BCIIP Act on 17 October 2017 by operation of ss 94(1)(a), 94(2), 95(1)(b) and 95(3) of the BCIIP Act (the AMWU’s Contravention).
THE COURT ORDERS THAT
3. Mr Cimbora pay a penalty of $12,000 in respect of Mr Cimbora’s Contravention.
4. The AMWU pay a pecuniary penalty of $100,000 in respect of the AMWU’s Contravention.
5. The pecuniary penalties referred to in orders 3 and 4 are paid to the Commonwealth of Australia within 28 days.
6. The AMWU pay the applicant’s costs of the proceeding in the amount of $10,000.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
1 By an Originating Application and a Statement of Claim, both dated 12 February 2019, the Australian Building and Construction Commissioner sought declarations of contraventions of s 52(a) of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (BCIIP Act) by the first respondent (the AMWU), the second respondent (Mr Cimbora) and the third respondent (Mr Paterson), and the imposition of pecuniary penalties. The applicant no longer seeks any order in respect of Mr Paterson.
2 The AMWU and Mr Cimbora initially denied the allegations, but later admitted that they had contravened the BCIIP Act in a Statement of Agreed Facts and Admissions made with the applicant on 16 September 2019 (SAFA).
3 It remains for the court to deal with the claims as to final relief, including the question of penalties.
4 The parties agree that the court should:
(1) declare that the AMWU and Mr Cimbora contravened s 52(a) of the BCIIP Act;
(2) impose appropriate pecuniary penalties on the AMWU and Mr Cimbora for their contraventions;
(3) order that those penalties be paid to the Commonwealth of Australia within 28 days;
(4) otherwise dismiss the application; and
(5) order the AMWU to pay the applicant’s costs in the amount of $10,000.
5 The sole dispute is in relation to the quantum of the penalties. That said, the parties were not far apart even on that question. The parties agree that a penalty should be imposed on Mr Cimbora “in the low range”. As for the AMWU, the applicant submits that the penalty should be in the lower range of a mid-range penalty. The AMWU says that it should be in the upper range of the low range. One might imagine that is a distinction without much difference, but in any event, having reached that position, counsel for both sides were content to rely on their (very helpful) written submissions and some brief oral submissions in support of them.
6 In fixing penalties, it is necessary to have regard to the maximum penalties that might apply to the relevant contraventions. Section 81(2) of the BCIIP Act provides that the maximum penalty for each contravention in this proceeding is:
(1) 200 penalty units for Mr Cimbora’s contravention of s 52(a); and
(2) 1000 penalty units for the AMWU’s contravention of s 52(a).
7 A penalty unit is defined in s 4AA of the Crimes Act 1914 (Cth). At the time that the contraventions occurred, the value of a penalty unit was $210. Accordingly, the maximum penalty that might be imposed for the AMWU’s contravention is $210,000 and the maximum penalty that might be imposed for Mr Cimbora’s contravention is $42,000.
8 Section 81(6) of the BCIIP Act provides that in determining a pecuniary penalty the court must take into account:
(a) the nature and extent of the contravention; and
(b) the nature and extent of any loss or damage suffered because of the contravention; and
(c) the circumstances in which the contravention took place; and
(d) whether the person has previously been found by a court (including a court in a foreign country) to have engaged in any similar conduct.
9 However, that provision does not limit the matters that may be considered. The task of fixing a penalty involves the making of a value judgment as to the appropriate penalty in light of the protective and deterrent purposes of the pecuniary penalty. Factors relevant to this task include those concerning the objective seriousness of the contravening conduct, as well as those concerning the circumstances of the contravener: see Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68, 88-89 -.
10 I turn now to the factors that the parties agreed are relevant here.
CONSIDERATIONS RELEVANT TO PENALTY
The nature, character and seriousness of the conduct and the circumstances in which it took place
11 By the terms of the SAFA, the parties agreed the following facts.
12 At all relevant times, NewCold Melbourne Holding Pty Ltd (NewCold):
(1) had entered into a contract for services with Hansen Yuncken Pty Ltd (Hansen Yuncken) pursuant to which Hansen Yuncken agreed to build, or arrange the building of, a refrigerated freezer distribution centre located at Agar Drive, Truganina (the NewCold 1 Site); and
(2) had entered into a contract for services with Hansen Yuncken pursuant to which Hansen Yuncken agreed to build, or arrange the building of, a cold storage distribution centre located at Agar Drive, Truganina (the NewCold 2 Site).
13 On 3 October 2017, a meeting took place at the NewCold 1 Site between Markoen Flos, NewCold Project Manager (Mr Flos), Mr Cimbora and another AMWU representative during which:
(1) Mr Cimbora requested that NewCold employ several persons (the AMWU Workers) who had previously worked on the NewCold 1 Site;
(2) Mr Flos said words to the effect that NewCold could not engage individual workers directly, but if NewCold was to engage workers, it would prefer to do so through a contract with another company, which would then employ or engage the workers; and
(3) Mr Cimbora provided Mr Flos with the details of two companies who would engage or employ the AMWU Workers (Remi Mechanical Plant Installations Pty Ltd (Remi) and Melbourne Installations Pty Ltd (Melbourne Installations)), and the names of the AMWU Workers.
14 Between 3 and 10 October 2017, Mr Flos had discussions with representatives of Remi and Melbourne Installations about those companies performing services for NewCold at the NewCold 1 Site and employing or otherwise engaging the AMWU Workers. Further, during this period, Mr Flos and Mr Cimbora exchanged emails on the progress of Mr Flos’s discussions with Remi and Melbourne Installations.
15 On 12 October 2017, Mr Cimbora sent an email to Mr Flos stating “you should be in a position now Of which company you have chosen from the two I put forward I’m assuming they would be starting next week given Monday is a construction industry RDO could please confirm who & when they are starting” (sic). On 13 October 2017, Mr Cimbora sent an email to Mr Flos following up on the 12 October 2017 email. Mr Flos did not respond to either of these emails.
16 By approximately 16 October 2017, discussions between Mr Flos and Remi and Melbourne Installations about performing work at the NewCold 1 Site had ceased.
17 Between approximately 1.00pm and 1.45pm on 17 October 2017, a meeting was held in Mr Flos’s office at the NewCold 1 Site between Mr Cimbora, another AMWU organiser, Mr Flos, Raymond Perry (a NewCold Director (Mr Perry)), Brandon Finucane (a Hansen and Yuncken Senior Project Manager) and Dale Robinson (a Hansen and Yuncken Site Manager). During this meeting, a conversation occurred to the following effect:
(1) Mr Cimbora stated that Mr Flos had to put the AMWU Workers “back on the job”;
(2) Mr Flos said that there was no “job” for the AMWU Workers to go back to, as the project that they were working on had been completed;
(3) Mr Perry said to Mr Cimbora words to the effect of “Do you expect us to get rid of the people we’ve employed, who are local Australian guys?”, to which Mr Cimbora responded “Yes”;
(4) Mr Cimbora then said words to the effect of “Tomorrow morning we’re going to block all your gates. You won’t get any trucks in or out of this place. We’re going to have the newspapers here, the radio here. We’re going to get the other unions involved, you’re going to have health and safety issues. It’s going to be a community action, you’re going to have hundreds of people here” (the 17 October Threat);
(5) Mr Cimbora then said words to the effect of “So, you’re still going to do it?”;
(6) Mr Perry responded “Yes, I have no choice”; and
(7) the other AMWU organiser then said words to the effect of “Right, we’re off then”, following which Mr Cimbora and the other AMWU organiser left Mr Flos’s office.
18 Mr Cimbora admits that his conduct described in the previous paragraph constituted threatening to take action against NewCold with an intent to coerce NewCold to employ the AMWU Workers as employees.
19 Further, Mr Cimbora admits that the 17 October Threat was:
(1) made with an intent to negate NewCold’s choice as to whether to employ the AMWU Workers as employees; and
(2) a threat to engage in action that was illegitimate and unconscionable as it:
(a) was disproportionate to the industrial interests of Mr Cimbora and the AMWU to find work for the AMWU Workers; and
(b) comprised a threat to engage in conduct that Mr Cimbora knew would have been unlawful, that is a picket blocking the gates of the NewCold 1 Site and the NewCold 2 Site.
20 By reason of the above, Mr Cimbora admits that he contravened s 52(a) of the BCIIP Act.
21 The AMWU admits that:
(1) the conduct of, and actions taken by, Mr Cimbora (as admitted by him) were also the conduct of, and actions taken by, the AMWU, because Mr Cimbora was at all relevant times acting in his capacity as an officer of the AMWU and was engaging in conduct on behalf of the AMWU within the scope of his actual or apparent authority; and
(2) the state of mind of Mr Cimbora when engaging in the conduct and actions that he has admitted in the proceeding is taken to be the state of mind of the AMWU by reason of the fact that Mr Cimbora was at all relevant times acting in his capacity as an officer of the AMWU and engaging in the conduct on behalf of the AMWU within the scope of his actual or apparent authority.
22 By reason of the above, the AMWU admits that it contravened s 52(a) of the BCIIP Act.
23 The applicant submits that “these contraventions were serious and deliberate”, and that “[t]he 17 October Threat was an attempt by the AMWU to use its [power] to organise a disruptive picket, to organise a media campaign, and to manufacture health and safety issues, in order to coerce NewCold to employ employees in circumstances where NewCold did not wish to do so.”
24 As to the objective seriousness of the contraventions, the respondents submit:
First, the unlawful conduct of Mr Cimbora was isolated. It was confined to a single discussion on 17 October 2017. It was not part of any systematic course of conduct on the part of either Mr Cimbora or the union toward NewCold. Nothing untoward is indicated from the prior communications between Mr Cimbora and Mr Flos. Indeed, the communications appear courteous, prompt and co-operative. Given the circumstances leading up to the conduct, the Court would consider Mr Cimbora’s conduct was impulsive, and a response to circumstances that would cause a person with a reasonable level of patience and tolerance a degree of frustration. Mr Cimbora left either immediately or shortly after the exchange at the suggestion of his colleague. There is no evidence Mr Cimbora put the threat into action.
Second, so far as the union’s culpability is concerned, whilst Mr Cimbora was authorised to act on behalf of the union, he would not be regarded as one of its senior officers. Nor did the exchange appear to be planned.
Third, there is no evidence before the Court of the conduct having any effect on NewCold’s course of conduct, nor is there any claim that the conduct caused any loss or damage to NewCold.
Fourth, no benefit or advantage was derived by either Mr Cimbora or the union as a consequence of the contravention.
25 In reply to the first of these points, the applicant submitted that there was no evidence as to whether Mr Cimbora’s conduct was impulsive or borne of reasonable frustration. The applicant pointed out that Mr Cimbora could have adduced evidence to this effect but declined to do so.
26 In reply to the fourth of these points, the applicant submitted that since the contravening conduct was carried out with the admitted intention of coercing NewCold to employ the AMWU Workers, the fact that it failed to do so is irrelevant.
Nature and extent of any loss or damage suffered because of the contraventions
27 There is no evidence that NewCold or Hansen Yuncken suffered any financial loss as a result of the contraventions.
Similar previous conduct by the respondents
28 The AMWU has contravened industrial legislation on 11 previous occasions. The last of the 11 contraventions occurred in July 2017. The AMWU had been sanctioned for these past contraventions prior to engaging in the conduct the subject of this proceeding (which occurred in October 2017). Five of the prior contraventions involved coercion or threats of coercion.
29 Prior to engaging in the conduct the subject of this proceeding, Mr Cimbora had never before contravened industrial legislation.
The need for specific and general deterrence
30 Deterrence is the principal, if not only, object of imposing civil penalties for contraventions of industrial laws, including the BCIIP Act: see, for example, Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68, 88 . It follows that general and specific deterrence must play a primary role in assessing the appropriate penalty for such contraventions.
31 The size of a respondent corporation is relevant in determining the size of the pecuniary penalty that would operate as an effective deterrent: see, for example, Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68, 90 .
32 In the year ending 30 September 2018, the AMWU reported:
(1) total income of $45,425,625;
(2) net assets of $180,379,434; and
(3) cash at the end of the year of $6,186,906.
33 Mr Cimbora has not previously contravened any industrial legislation. As such, the applicant agreed that specific deterrence looms less large for him than for the AMWU. Nevertheless, it was submitted that a penalty should be imposed on him sufficient to deter him from engaging in any further contraventions of industrial legislation.
The need to ensure compliance
34 The need to ensure compliance with provisions of industrial legislation was reinforced in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 249 FCR 458, 481  (Dowsett and Rares JJ), in this passage upon which the applicant relied:
In a liberal democracy, it is assumed that citizens, corporations and other organisations will comply with the law. Such compliance is not a matter of choice. The community does not accept that a citizen, corporation or other organisation may choose to break the law and simply pay the penalty. The courts certainly do not accept that proposition. Such acceptance would pose a serious threat to the rule of law upon which society is based. It would undermine the authority of Parliament and could lead to the public perception that the judiciary is involved in a process which is pointless, if not ridiculous.
Cooperation with the applicant
35 A respondent’s cooperation with an investigative body bringing proceedings is a factor in mitigation of penalty. The AMWU and Mr Cimbora have admitted that they contravened s 52(a) of the BCIIP Act. This is a factor that mitigates penalty, as the parties agreed.
36 The respondents made the following additional submissions in respect of Mr Cimbora. To the extent that they refer to additional factual matters (including Mr Cimbora’s apology to the court, and the fact that the AMWU has provided, and Mr Cimbora has received, training designed to minimise the risk of re-offending) those facts were proved in affidavit material to which it is not necessary to make separate reference:
Mr Cimbora has no history of contravening conduct prior to the events in question, or subsequently. He has satisfied the character requirement for the issue of entry permits pursuant to the provisions of the Fair Work Act 2009 since 2011.
Mr Cimbora has no criminal history. He has provided a reference as to his good character from Mr Demiri. The Court would accept that other than in respect of the contravening conduct, Mr Cimbora is a man of good character.
Mr Cimbora has accepted responsibility for the conduct by his admission of contravention at an early stage in the proceeding. He has co-operated and assisted the resolution of the present matter by:
a. agreeing to the making of orders for declarations;
b. agreeing to a Statement of Facts and Admissions to be put before the Court; and
c. agreeing to orders for the payment of the applicants’ costs in an agreed amount.
Mr Cimbora has also written to the Court apologizing for his conduct. The Court would conclude that Mr Cimbora appreciates that his conduct was wrong, and regrets it, and its effect on others. In those circumstances, it is appropriate for the Court to determine a discount on the penalty that would otherwise apply to the contravening conduct …
The Court would conclude that the fact of the proceeding, the declarations the Court will make, and the consequences for Mr Cimbora’s employer as a result of his conduct are matters that will have a chastening effect upon him.
Having regard to all of the relevant considerations, in setting a penalty the Court would be satisfied there is no imperative to impose a penalty above the lower end of the range.
37 In my view, given that the parties themselves were not far apart on the question of assessment of penalty, and no question of principle is involved, I can state my reasons succinctly.
38 In my view, it is appropriate to impose a penalty of $12,000 on Mr Cimbora and a penalty of $100,000 on the AMWU.
39 The former is obviously in the low range agreed by the parties, which is appropriate given Mr Cimbora’s contrition, his post-offence training, that he has not previously contravened any industrial legislation, and his relatively early cooperation.
40 The AMWU rightly seeks credit for offering the training program that was the subject of evidence, and for its cooperation. And it has also agreed to pay the applicant’s costs fixed in the sum of $10,000. But it has contravened industrial legislation on 11 occasions between 2003 and 2017, so there is a need for specific deterrence, even recognising that no relevant conduct has occurred since 2017. In those circumstances, a penalty of $100,000 is appropriate.