FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Maritime, Mining and Energy Union v Hay Point Services Pty Ltd (No 3) [2021] FCA 282

ORDERS

THE COURT ORDERS THAT:

1.    The respondent pay a penalty of $40,500 for its contravention of s 50 of the Fair Work Act 2009 (Cth).

2.    Pursuant to s 546(3) of the Fair Work Act 2009 (Cth) the respondent pay the penalty to the applicant within 28 days.

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

REASONS FOR JUDGMENT

COLLIER J:

1    On 19 December 2019, I delivered judgment in Construction, Forestry, Maritime, Mining and Energy Union v Hay Point Services [2019] FCA 2145 (Liability Judgment). In summary, I found that the respondent had contravened s 50 of the Fair Work Act 2009 (Cth) (FW Act). The dispute now before the Court relates to the appropriate penalty to be imposed in relation to the respondent’s contravention of s 50 of the FW Act.

background

2    By the applicant’s originating application, it sought the following:

1.    Determinations that the Respondent has contravened s.50 of the Fair Work Act 2009 (Cth) (the Act).

2.    An order pursuant to s 546(1) of the Act that the Respondent pay pecuniary penalties for its contraventions of the Act.

3.    An order pursuant to s 546(3) of the FW Act that any pecuniary penalties be paid to the Applicant.

4.    Such further or other orders as to the Court seem appropriate.

3    The Liability Judgment considered the respondent’s conduct in introducing a “four panel roster”, referred to as the new roster, which commenced in July 2016. The new roster required employees to work 35 ordinary hours per week, with 8.75 hours of rostered overtime per week, amounting to 455 hours of overtime per employee annually. Clause 34.1 of the Haypoint Services Pty Ltd Enterprise Agreement 2013 (2013 Enterprise Agreement) stated that the respondent could require an employee to work reasonable overtime. Clause 5 of the 2013 Enterprise Agreement provided that 104 overtime hours annually “is generally considered reasonable”.

4    In those circumstances, and in light of the proper construction of cl 34.1 of the 2013 Enterprise Agreement as noted at [64] of the Liability Judgment, I determined at [73] that the applicant was entitled to the declaration it sought, being that the respondent had contravened s 50 of the FW Act by requiring its employees, who were covered by the 2013 Enterprise Agreement, to work 455 overtime hours per annum from 16 July 2016 until the 2013 Enterprise Agreement ceased to operate on 5 June 2017, in contravention of cl 34.1 of the 2013 Enterprise Agreement.

5    On 19 December 2019, I ordered further case management of the matter to allow the filing of further submissions and material referable to penalty.

6    On 3 February 2020, I made orders relating to the filing and serving of evidence and submissions as to penalty. I made further Orders dated 17 March 2020, vacating the hearing date then set for 7 April 2020. This vacation was as a result of the COVID-19 pandemic. On 31 March 2020, I ordered that the matter be heard via video link. The hearing took place on 22 May 2020.

7    The parties have made both oral and written submissions in relation to penalties. It is not in dispute that it is appropriate to impose a penalty.

applicable law

8    Sections 545(1) and 545(2) of the FW Act provide the orders open to this Court to make in relation to contraventions of the FW Act:

(1)    The Federal Court or the Federal Circuit Court may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision.

Note 1:    For the court’s power to make pecuniary penalty orders, see section 546.

   Note 2:     For limitations on orders in relation to costs, see section 570.

Note 3:     The Federal Court and the Federal Circuit Court may grant injunctions in relation to industrial action under subsections 417(3) and 421(3).

Note 4:    There are limitations on orders that can be made in relation to contraventions of subsection 65(5), 76(4), 463(1) or 463(2) (which deal with reasonable business grounds and protected action ballot orders) (see subsections 44(2), 463(3) and 745(2)).

(2)    Without limiting subsection (1), orders the Federal Court or Federal Circuit Court may make include the following:

(a)     an order granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention;

(b)     an order awarding compensation for loss that a person has suffered because of the contravention;

(c)     an order for reinstatement of a person.

9    Pecuniary penalty orders are imposed pursuant to s 546 of the FW Act, which provides:

Pecuniary penalty orders

(1)    The Federal Court, the Federal Circuit Court or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.

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

Determining amount of pecuniary penalty

(2)    The pecuniary penalty must not be more than:

(a)    if the person is an individual–the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); or

(b)    if the person is a body corporate–5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2).

Payment of penalty

(3)    The court may order that the pecuniary penalty, or a part of the penalty, be paid to:

(a)    the Commonwealth; or

(b)    a particular organisation; or

(c)    a particular person.

Recovery of penalty

(4)    The pecuniary penalty may be recovered as a debt due to the person to whom the penalty is payable.

No limitation on orders

(5)    To avoid doubt, a court may make a pecuniary penalty order in addition to one or more orders under section 545.

10    Note 1 to s 50 of the FW Act provides that the provision is a civil remedy provisions.

11    It is common ground that the maximum penalty which can be imposed on the respondent is $54,000.00 (namely 60 penalty units at $180.00 per unit).

12    The imposition of a penalty and the appropriate quantum of any such penalty imposed is a matter of discretion for the Court: PIA Mortgage Services Pty Ltd v King (2020) 292 IR 317; [2020] FCAFC 15 at [54]. There are a number of factors, well enunciated in case law, aimed at guiding the exercise of the Court’s discretion. As stated by Rangiah and Charlesworth JJ in PIA Mortgage Services Pty Ltd at [57]:

57.     There are well-established principles which guide the exercise of the Court’s discretion to determine the appropriate penalty. Although the authorities warn against applying a rigid check-list of matters, the factors recognised as being potentially relevant to the determination of the appropriate penalty include the following:

(1)    the nature and importance of the project where the conduct was undertaken (in a building case);

   (2)    the nature and extent of the conduct which led to the breaches;

   (3)    the circumstances in which the conduct took place;

(4)    the nature and extent of any loss or damage sustained as a result of the breaches;

   (5)    whether there had been similar previous conduct by the respondents;

(6)    whether the breaches were properly distinct or arose out of one course of conduct;

   (7)    the size of the business enterprise involved;

   (8)    whether or not the breaches were deliberate;

   (9)    whether senior management was involved in the breaches;

   (10)    whether the party committing the breach exhibited contrition;

   (11)    whether the party committing the breach has taken corrective action;

(12)    whether the party committing the breach cooperated with the enforcement authorities;

    (13)    the need for specific and general deterrence.

(see, for example, Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union (2008) 171 FCR 357 at [57] –[58] ; Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [14] , [28] – [30] ; Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) (2015) 234 FCR 451; [2015] FCA 407 at [90] ).

13    In determining the appropriate penalty to be imposed, consideration must also be given to the purpose of imposing a civil penalty as explained, for example, by the Full Court in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68; [2017] FCAFC 113:

98.    … The principal object of a pecuniary penalty is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene; both specific and general deterrence are important: Chemeq at [90]; Ponzio at [93]. A pecuniary penalty for a contravention of the law must be fixed with a view to ensuring that the penalty is not to be regarded by the offender or others as an acceptable cost of doing business: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at 659 [66]; Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; (2012) 287 ALR 249 at 265 [62]–[63]. In relation to general deterrence, it is important to send a message that contraventions of the sort under consideration are serious and not acceptable: Australian Securities and Investments Commission v Southcorp Ltd (No 2) (2003) 130 FCR 406 at 418 [32].

14    Subsequently in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157 at 173; [2018] HCA 3, Kiefel CJ reiterated that:

42.    … what is sought to be achieved by a pecuniary penalty order is to put a price on future contravention that is sufficiently high to deter repetition by the contravener and others who may be tempted to contravene the FWA…

(See also Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at 506; [2015] HCA 46 at [55]).

15    Section 557 of the FW Act requires multiple contraventions of certain single provisions, to be treated as a single contravention of the FW Act. It provides:

Course of conduct

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

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

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

(2)    The civil remedy provisions are the following:

(a)    subsection 44(1) (which deals with contraventions of the National Employment Standards);

(b)     section 45 (which deals with contraventions of modern awards);

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

(d)     section 280 (which deals with contraventions of workplace determinations);

(e)     section 293 (which deals with contraventions of national minimum wage orders);

(f)     section 305 (which deals with contraventions of equal remuneration orders);

(g)     subsection 323(1) (which deals with methods and frequency of payment);

(h)     subsection 323(3) (which deals with methods of payment specified in modern awards or enterprise agreements);

(i)     subsection 325(1) (which deals with unreasonable requirements on employees to spend or pay amounts);

(ia)     subsection 325(1A) (which deals with unreasonable requirements on prospective employees to spend or pay amounts);

(j)     subsection 417(1) (which deals with industrial action before the nominal expiry date of an enterprise agreement etc.);

(k)     subsection 421(1) (which deals with contraventions of orders in relation to industrial action);

(l)     section 434 (which deals with contraventions of Ministerial directions in relation to industrial action);

(m)     subsection 530(4) (which deals with notifying Centrelink of certain proposed dismissals);

(n)     subsections 535(1), (2) and (4) (which deal with employer obligations in relation to employee records);

(o)     subsections 536(1), (2) and (3) (which deal with employer obligations in relation to pay slips);

(p)     subsection 745(1) (which deals with contraventions of the extended parental leave provisions);

(q)     section 760 (which deals with contraventions of the extended notice of termination provisions);

(r)     subsection 785(4) (which deals with notifying Centrelink of certain proposed terminations);

(s)     any other civil remedy provisions prescribed by the regulations.

(3)    Subsection (1) does not apply to a contravention of a civil remedy provision that is committed by a person after a court has imposed a pecuniary penalty on the person for an earlier contravention of the provision.

16    It is common ground between the parties that, by reason of s 557 of the FW Act, the respondent’s conduct amounted to a single contravention of s 50 of the FW Act. I accept that this is the case.

submissions of the parties

17    The applicant submitted that the imposition of a penalty between $35,640 and $40,500, being the high end of the mid-range to the low end of the high-range (66%-75% of the maximum), was appropriate for the following reasons:

    The circumstances of the contravening conduct were serious.

    The applicant had alerted the respondent to the unlawfulness of the new roster in correspondence on 23 May 2016.

    The new roster mandated the same amount of overtime, whereas under the previous regime working overtime was voluntary. The overtime mandated by the new roster was also substantially more than the average overtime worked under the previous regime (being 163.4 hours in 2014, 175 hours in 2015 and 197.4 hours in 2016).

    The effect of the additional overtime, which increased the quantum of work by 25%, was that affected employees were denied a significant period of leisure time. The nature of the loss is impossible to quantify.

    The period of the contravening conduct was substantial as it took place over the course of an entire year and affected the entire workforce of the respondent covered by the 2013 Enterprise Agreement.

    The respondent had no prior contraventions, but was a wholly owned subsidiary of a company with a prior contravention, such that the conduct should not be viewed as the respondent’s first contravention.

    It can be inferred from the fact that the roster was announced by the General Manager of the Hay Point Coal Terminal that senior management was involved in the decision, which is an aggravating factor.

    Whilst an employee nominated by the applicant represented employee interests in the roster change consultation process, which initially proposed the new roster, this occurred in circumstances where the respondent had stated it was only prepared to consider a “four-panel roster”. Any type of “four-panel roster” meant that the numbers of employees would reduce and the hours of the remaining employees would increase.

    The employees’ attendance for work was not an indicator of some form of assent to the new roster. The employees had a lawful obligation pursuant to s 417 of the FW Act to attend work. Nor did the absence of resignation indicate employees were agreeable to the new roster.

    Whilst the same new roster was included in the 2017 Enterprise Agreement, employees were to be subjected to the roster regardless of whether they voted for the 2017 Enterprise Agreement.

    The respondent should not receive any reduction in penalty due to its size as it was a part of a large multi-national minerals conglomerate.

    The respondent was not entitled to any discount on the basis of contrition or co-operation as it had not displayed any.

    General deterrence in respect of compliance with enterprise agreements was a matter of significance, as a substantial number of the working population were regulated by such agreements.

    It is important the Court should impose a penalty which was sufficient to reflect the gravity of the wrongdoing, and to ensure that the respondent and other employers in the position of the respondent did not see the penalty as simply the cost of doing business.

18    The respondent submitted that the penalty to be imposed should be nominal or, at most, at the lowest end of the available range for the following reasons:

    The applicant’s contention that the contravening conduct was an unduly onerous imposition on the respondent’s employees was founded on an erroneous assumption. The calculation that the quantum of work of affected employees increased by 25% was based on the hypothetical starting point of no overtime work. However prior to the new roster, most production workers performed more than 104 hours of overtime annually.

    The new roster was more equitable, as it required all employees to work an equal amount of overtime. While some employees’ working hours were increased, others had their hours reduced.

    The new roster required employees to work 43.75 hours per week. The Full Bench of the then Australian Industrial Relations Commission in the Working Hours Case (2002) 114 IR 390 at [211] stated that standard working hours in Australia were between 35 and 44 hours per week.

    A safety and risk assessment of the new roster was conducted in consultation with an employee health and safety representative and an external expert. The unchallenged opinion of Dr Keith Adam, a consultant occupational and environmental physician, was that the new roster was safe, without excessive risk to the health and safety of employees.

    No employee actually felt themselves to have suffered any loss as a consequence of the new roster. In support of this submission, the respondent pointed to, in summary, the following:

(a)    An employee nominated by the applicant represented employee interests in the roster change consultation process initially proposed the new roster.

(b)    No production employee worked more than 14 consecutive hours.

(c)    No employee ever refused to work the new roster.

(d)    No employee left the respondent in the seven months following the introduction of the new roster.

(e)    No employee engaged the dispute resolution process.

(f)    Employees agreed to a 43.75 hour work week in the roster in the 2017 Enterprise Agreement which replaced the 2013 Enterprise Agreement.

    The respondent did not wilfully depart from or directly contradict the 2013 Enterprise Agreement. It believed (and had cogent grounds for doing so) that it was entitled either under cl 5 or cl 34.1 to act as it did by introducing the new roster.

    Consideration of contrition and co-operation is inapposite where the respondent’s conduct has been to defend these proceedings on cogent grounds.

    The respondent has no relevant prior conduct; the actions of a parent company are not those of the respondent. Nor was the parent company’s contravention of a similar type to the respondent’s contravention.

    The respondent has no need of a message that the cost of a contravention is not to be regarded as an acceptable cost of doing business. Nor is this an occasion to warn other employers in the position of the respondent against engaging in such conduct.

consideration

19    Beginning with the Liability Judgment, I relevantly there observed as follows:

67.    Further, and notwithstanding the submissions of HPS, I am unable to identify how it could possibly be argued that 455 hours of overtime, which is more than 4 times the benchmark of 104 hours agreed by the parties to the 2013 Enterprise Agreement as “generally reasonable”, can be “reasonable” – or even “generally” reasonable – when measured against that agreed benchmark. HPS criticised the union’s reliance on the terms of the 2013 Enterprise Agreement, and in particular the union’s reliance on the definition of “reasonable overtime”. In my view however the position of the union was justified, both from the perspective of language used in that Agreement, and the plain fact that the terms of the 2013 Enterprise Agreement reflected the intentions of the parties against the backdrop of negotiations between them.

68.    The union submitted that 455 overtime hours per annum equated to 435% of the 104 hours “reasonable overtime” benchmark as defined in cl 5 of the 2013 Enterprise Agreement. HPS submitted that employees were entitled by the 2013 Enterprise Agreement to 6 weeks annual leave, which meant that the required overtime of such employees who took the whole 6 weeks leave would be only 402.5 hours of overtime for that year (rather than 455 hours of overtime per annum). However even assuming that this was the case, the outcome of the new work roster would still have been an increase in required overtime hours of such employees in the range of 387% compared with the 104 hours of overtime stipulated in the 2013 Enterprise Agreement.

69.    Even more telling is the fact that the outcome of the new work roster requiring employees to work 455 hours of overtime per annum was that employees were required to work an average extra 8.75 hours per week overtime, on top of their ordinary 35 hours per week. That equated to an additional 25% of their ordinary working hours, which hours they were required to work, and which was not voluntary overtime.

20    It follows that the overtime imposed by the new work roster, on all relevant employees, was manifestly in excess of that which was reasonable in terms of that which had been agreed in cl 34.1 of the 2013 Enterprise Agreement. Whether prior to the new roster most production workers performed more than 104 hours of overtime annually was not to the point – the new roster required them to work significantly more than 104 hours of overtime, whether they wished to or not. It is not in dispute that, until the implementation of the new roster, working overtime was voluntary.

21    I reject the argument of the respondent that the new roster was more equitable for employees. It was not more equitable for those employees who had previously had a choice of working overtime, and chose not to do so. In any event, the hours the new roster imposed were far outside the scope of what the parties had agreed were reasonable within the scope of the 2013 Enterprise Agreement. In my view this was a serious contravention of the 2013 Enterprise Agreement within the meaning of s 50 of the FW Act.

22    To the extent that the new roster applied to all crews working over four shifts at the Hay Point Coal Terminal, it is plain that the imposition of the new roster involved senior management in the respondent rather than low level managers. Evidence supporting this finding includes the email to all staff and employees at the Hay Point Coal Terminal dated 10 May 2016 from Mr Peter Hanrahan, the General Manager – Hay Point, notifying them inter alia that:

After careful consideration, it has been decided that BMA will be implementing roster changes and new automation initiatives at Hay Point Coal Terminal.

…

BMA has decided to make two changes to achieve improved productivity and cost efficiencies at the port:

1.    changing from a five panel to a four panel roster …

23    Further, it is plain that the respondent is part of a large multi-national conglomerate. As deposed by Mr David Power on behalf of the respondent in his affidavit filed on 24 February 2017:

2.    HPCT is a coal export terminal located at the Port of Hay Point, approximately 40 kilometres south of Mackay. HPCT is owned and operated by BM Alliance Coal Operations Pty Ltd (BMA). Hay Point Services Pty Ltd (HPS) (a related entity of BMA) currently employs approximately 170 employees who perform one of two broad categories of work being production or maintenance work at HPCT. BMA and HPS are part of the BHP Billiton Group.

(Emphasis in original)

24    While the conduct of the respondent in seeking to impose the new roster was deliberate, a question arises whether the contravention of the 2013 Enterprise Agreement within the meaning of s 50 of the FW Act was deliberate. This is because:

    the respondent clearly had a basis for arguing (at least initially) that cl 34.1 of the 2013 Enterprise Agreement was not a provision able to be contravened for the purposes of founding a breach of s 50 of the FW Act: Construction, Forestry, Mining and Energy Union v Hay Point Services [2018] FCA 417; and

    the respondent cogently, although unsuccessfully, argued that the overtime hours imposed by the new roster were reasonable.

25    That this was the case is relevant to the issue of general deterrence, to the extent that the position argued by the respondent was open on the material before the Court: cf Gray J in Australian & International Pilots Association v Qantas Airways Limited [2009] FCA 500 at [9]–[10]. As Gordon J observed in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Telstra Corporation Ltd (2007) 168 IR 368; [2007] FCA 1607:

18    As the Primary Reasons demonstrate, the breaches arose out of a disputed and disputable construction of the 2005 Enterprise Agreement and the TRA. Neither breach was flagrant, wilful or deliberate. Amendments to the WR Act increasing the penalty for breaches of industrial instruments arising out of unlawful industrial conduct indicate a legislative desire to deter and discourage such conduct. These changes in industrial law have led to general deterrence being referred to as the “most significant factor” in determining the applicable penalty: see Finance Sector Union v Commonwealth Bank of Australia [2005] FCA 1847; (2005) 224 ALR 467 at [60], [72]. Where the unlawful conduct arises out of an arguable but erroneous construction of a relevant term, and the subsequent breach cannot be characterised as demonstrating a flagrant or wilful disregard for the agreement, this legislative purpose is not furthered by imposition of a penalty. In these circumstances, neither general nor specific deterrence is a significant factor weighing in favour of imposing a penalty. Moreover, Mr McDonald has been fully compensated for the loss suffered as a result of the breach. I do not consider that the circumstances in which the conduct took place warrant the Court exercising its discretion to impose a penalty on Telstra.

(Emphasis added)

26    Having found this, however, I note that there was no dispute between the parties that the applicant, through its solicitors, wrote to the proper officer of the respondent on 23 May 2016, placing the respondent on notice that the applicant considered that new roster contravened cl 34.1 of the 2013 Enterprise Agreement and s 50 of the FW Act (see affidavit of Mr Luke Tiley filed 28 February 2020 exhibit LMT-1). Indeed, ultimately the applicant was successful on the basis of its contentions in that letter.

27    As the applicant submitted, and I accept, there can be no doubt that the applicant took the point that the new roster was not permitted by cl 34.1 of the 2013 Enterprise Agreement and was unlawful. The respondent, in persisting with the implementation of the new roster, ran the risk that its conduct would be found to be unlawful. As Rangiah J observed in Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd (No 2) [2018] FCA 480 at [17]:

17.    I consider that a penalty should be imposed upon the respondent in the circumstances of the case. Firstly, in circumstances where the applicant had contested the respondent’s proposed conduct and where the proper construction of the Enterprise Agreement was far from certain, the respondent can be characterised as having “taken the odds”. The respondent submits that the applicant did not specifically take the point that the case ultimately turned on: that despite the reduction in shift lengths, the roster descriptions continued to meet the description of an “Indicative 45.75 Hour Week” in the Table in Item 4 of Annexure 1. That may be so, but there is evidence that at a meeting on 11 December 2015, the applicant contended that the Roster Allowance that should be paid was the amount specified in the schedule to the Enterprise Agreement (which I understand to refer to the amounts set out in the Table), and that, by failing to pay the proper amount, the respondent was in breach of the Agreement. Therefore, the construction of the Table was always in issue. Further, the respondent’s justification for reducing the Roster Allowance always depended upon its contention that the shifts no longer met the roster descriptions in the Table. What is significant is that the respondent knew that it was taking a risk that it would be contravening the Enterprise Agreement, but did not take an obvious step to avoid that risk. That step was to apply, in the face of the dispute, for an appropriate declaration. The minimum requirements for the making of a declaration set out in Forster v Jododex Australia Pty Ltd [1972] HCA 61; (1972) 127 CLR 421 at 437-438 would have been satisfied. The respondent elected to take the risk that its conduct would contravene s 50 of the FWA.

(Emphasis added)

28    I also note the following comments of the Full Court, albeit in respect of claimed contraventions of the Trade Practices Act 1974 (Cth), in Universal Music Australia Pty Ltd v Australian Competition & Consumer Commission (2003) 131 FCR 529 at 598–9, [2003] FCAFC 193:

308.    As we have said, the contravening conduct was plainly and deliberately anti-competitive in its intent. It was conduct which, at least, ran a serious risk of being in breach of the Act. If this was appreciated, then the fact that the risk came home against expectations does not entitle the perpetrator to a discount. If the existence of the risk was not appreciated, then the company concerned misunderstood the law applicable to an important area of commerce and would not be entitled to any discount.

309.    The fact that legal advice was obtained by one of the parties is also of little consequence. It illustrates that risk was appreciated. However, legal advice is obtained for the benefit of the company and only for the benefit of the company. It is not a discounting factor. If legal advice is wrong, that is a matter between the company and the legal adviser.

310.    In our opinion, to give a substantial discount for these factors sends the wrong signal to the commercial community. It will encourage risk-taking and pushing the boundaries of anti-competitive conduct. If, nonetheless, a proceeding is instituted, it will encourage the most vigorous possible defence, in an endeavour to demonstrate the supposed complexity and uncertainty of the law. Many cases of contravening conduct can be described as complex and uncertain as to result. As submitted for ACCC, the Court has recognised in many cases that the difficulty of detecting and proving contraventions of Pt IV of the Act requires adequate penalties to be imposed when contravening conduct is detected and established… If a company `takes the odds’, it must expect serious consequences if it miscalculates …

(Emphasis added)

29    See also comments of Murphy J in Australian Competition and Consumer Commission v TPG Internet Pty Ltd (No 2) [2] ATPR 42-402; [2012] FCA 629, in particular where his Honour observed:

106.    The application of Universal Music is not limited only to those cases involving deliberate misleading conduct with intent, but it does require an appreciation of risk by the contravenor. In the present case as in Universal Music (and as distinct from Ranu and Australian Abalone) TPG had an appreciation of the risk that its conduct might breach the TPA. It made the judgment that it did not. In that sense it took the odds as described in Universal Music.

30    I am satisfied that, in the circumstances, the conduct of the respondent was “taking the odds” as explained by the Full Court in Universal Music. To that extent there is a need for specific deterrence.

31    Insofar as concerns the issue of general deterrence, I am satisfied that the penalty imposed for the conduct in question should reflect the seriousness of the conduct. I have particularly formed this view in circumstances where the respondent appeared to form the view, without consultation, that the terms of the new roster could be imposed by it, and where those terms were clearly well outside the scope of any agreement as contained in the 2013 Enterprise Agreement. To that extent, the penalty imposed should be such as to warn other employers in the position of the respondent against engaging in such conduct. As Tracey J observed in Director of the Fair Work Building Industry Inspectorate v Ellen (The Longford Gas Plant Case) [2016] FCA 1395:

36.    General deterrence emerges as a much weightier consideration. There are, literally, hundreds of thousands of employees who are covered by enterprise agreements. Many of these are engaged, like the respondents, in the construction industry. It is necessary to make plain that resort to unprotected industrial action should not be a knee-jerk (or other) response to incidents occurring in the workplace, especially when lawful avenues exist and are provided for in enterprise agreements. Contraventions of provisions such as s 417(1) must attract meaningful penalties lest the purposes served by them be undermined.

(See also White J in Australian Building and Construction Commissioner v Huddy (No 2) [2017] FCA 1088 at [47] and Barker J in Australian Building and Construction Commissioner v McCullough (No 2) [2017] FCA 295 at [75]).

Conclusion

32    In my view the appropriate penalty in this case, reflecting my conclusion that the conduct of the respondent was at the low end of the high range of seriousness, is $40,500, being 75% of the maximum penalty for a single contravention.

33    Finally, in its originating application the applicant sought an order that the respondent pay any pecuniary penalty to the applicant pursuant to s 546(3) of the FW Act. In accordance with the principles set out in detail by the Full Court in Sayed v Construction, Forestry, Mining and Energy Union (2016) 239 FCR 336; [2016] FCAFC 4, I consider an order in such terms to be appropriate.

Associate:

Dated:    26 March 2021