Federal Court of Australia

Australian Building and Construction Commissioner v Australian Workers’ Union [2021] FCA 861

ORDERS

THE COURT DECLARES THAT:

1.    On 31 October 2018, the Second Respondent (Kelly) organised employees of OneSteel Reinforcing Pty Ltd (OneSteel), who were employed at 180 Browns Road, Noble Park, Victoria (the Site), to take industrial action that day in contravention of s 46 of the Building and Construction Industry (Improving Productivity) Act 2016 (BCIIP Act) (the 31 October 2018 s 46 Kelly Contravention).

2.    By operation of ss 94(1)(a) and 95(1)(b) of the BCIIP Act, the First Respondent (AWU) has contravened s 46 of the BCIIP Act in respect of the 31 October 2018 s 46 Kelly Contravention (the 31 October 2018 s 46 AWU Contravention).

3.    On 1 November 2018, Kelly organised employees of OneSteel to take industrial action at the Site that day in contravention of s 46 of the BCIIP Act (the 1 November 2018 s 46 Kelly Contravention).

4.    By operation of ss 94(1)(a) and 95(1)(b) of the BCIIP Act, the AWU has contravened s 46 of the BCIIP Act in respect of the 1 November 2018 s 46 Kelly Contravention (the 1 November 2018 s 46 AWU Contravention).

5.    On 31 October 2018, Kelly, at a meeting at the Site with OneSteel management, in contravention of s 475(2) of the Fair Work Act 2009 (FW Act), made a request that OneSteel pay its day shift employees for their shift that day in circumstances where those employees had taken industrial action for the majority of that shift (the 31 October 2018 s 475(2) Kelly Contravention).

6.    By operation of s 793(1) of the FW Act, the AWU has contravened s 475(2) of the FW Act in respect of the 31 October 2018 Kelly s 475(2) Contravention (the 31 October 2018 s 475(2) AWU Contravention).

THE COURT ORDERS THAT:

1.    The Second Respondent pay a penalty in respect of:

(a)    the 31 October 2018 s 46 Kelly Contravention in the amount of $2,700;

(b)    the 1 November 2018 s 46 Kelly Contravention in the amount of $2,700; and

(c)    the 31 October 2018 s 475(2) Kelly Contravention in the amount of $1,600.

2.    The First Respondent pay a penalty in respect of:

(a)    the 31 October 2018 s 46 AWU Contravention in the amount of $25,000;

(b)    the 1 November 2018 s 46 AWU Contravention in the amount of $25,000; and

(c)    the 31 October 2018 s 475(2) AWU Contravention in the amount of $30,000.

3.    The penalties referred to in Orders 1 to 2 be paid to the Commonwealth of Australia within 28 days.

4.    The First Respondent pay compensation to OneSteel Reinforcing Pty Ltd in the sum of $90,000 within 60 days of this order.

5.    There be no order as to costs.

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

REASONS FOR JUDGMENT

BROMBERG J:

1    The applicant (Commissioner) seeks civil penalties and declarations in relation to contraventions of s 46 of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (BCIIP Act) and 475(2) of the Fair Work Act 2009 (Cth) (FW Act). The first respondent (AWU) and the second respondent (Kelly) (collectively, the respondents) have admitted those contraventions. Accordingly, the only issue remaining in dispute is the quantum of the penalties to be imposed on respondents.

Background Facts

2    At all material times, the AWU was an “industrial association” within the meaning of s 12 of the FW Act and a “building industry participant” within the meaning of s 5 of the BCIIP Act. In relation to the matters set out below, Kelly acted in his capacity as an “officer” of the AWU within the meaning of s 5 of the BCIIP Act and s 12 of the FW Act.

3    OneSteel Reinforcing Pty Ltd (OneSteel) manufactures steel products for major construction projects at a site located at 180 Browns Road, Noble Park, Victoria (the site). The parties agreed that OneSteel is a “constitutionally‑covered entity” within the meaning of s 5 of the BCIIP Act and conducted “building work” within the meaning of s 6(1)(d) of the BCIIP Act.

4    The dispute arose in the context of Kelly organising for the employees at the site to attend the “Change the Rules” rally organised by the Australian Council of Trade Unions and held on 23 October 2018 (the rally). Kelly deposed that he genuinely believed that it was not unlawful for the employees to attend the rally and conveyed this to the AWU’s delegate on the site before the rally.

5    Before the rally, Kelly contacted OneSteel’s site manager to inform him that the majority of AWU members on the site wanted to attend the rally. The site manager did not protest, say that the employees should not attend the rally, or request any further details.

6    After 23 October 2018, OneSteel began interviewing employees about their absences from the site at the time of the rally.

7    On 31 October 2018, Kelly arrived at the site and discussed the interviews with the employees. Kelly deposed that the employees appeared angry, stressed and upset by the interviews. Kelly spoke with the Health and Safety Representative (HSR) at the site, who told Kelly that he did not think it was safe for the employees to continue working.

8    Kelly then discussed the interviews with representatives of OneSteel. The representatives told him that management had a right to speak to employees about the rally and that the employees’ pay may be docked if they did not return to work. Following this discussion, OneSteel’s representatives addressed the employees. They explained that disciplinary action may be taken if the employees did not return to work. OneSteel’s representatives then left the meeting.

9    Kelly addressed the employees and after hearing their concerns arranged for them to leave work for the remainder of the day. Kelly left the site with the employees.

10    At or around 3.15 pm on 31 October 2018, Kelly returned to the site and met with the representatives of OneSteel and the AWU’s delegate at the site. During the meeting, Kelly told the representatives of OneSteel that the afternoon-shift employees would not continue working unless the day-shift workers received full pay for the day shift and the interviews were suspended indefinitely (Pay Request). Kelly gave evidence that he considered this to be an appropriate solution in the circumstances where employees had ceased work because they were distracted, angry and upset at having to attend the interviews. OneSteel did not accept the proposal. Kelly then organised for the afternoon-shift workers to leave work for the remainder of the day. Kelly also organised for the three night-shift employees not to attend the site that evening.

11    Over the course of 31 October 2018, 51 employees across three shifts ceased performing or did not attend the site to perform work (31 October Industrial Action). The respondents admit that this action was organised by Kelly and not authorised by OneSteel in writing.

12    On 1 November 2018, 26 employees attended the site but did not commence work. Kelly returned to the site and the HSR again advised him that the workers did not feel safe to work while the interviews were on foot. Acting on those concerns, Kelly organised for the employees not to commence work. The employees did not work until 1.45 pm when they were advised that the Fair Work Commission (FWC) had made an order requiring them to return to work pursuant to s 418 of the FW Act (1 November Industrial Action).

The Admitted Contraventions

13    Section 46 of the BCIIP Act provides that “[a] person must not organise or engage in unlawful industrial action”.

14    The respondents admitted that the 31 October Industrial Action and the 1 November Industrial Action constituted “unlawful industrial action” for the purpose of the BCIIP Act and that Kelly had organised each incident in contravention of s 46 of the BCIIP Act. The AWU admitted that, by operation of s 94(1) of the BCIIP Act, the conduct of Kelly was imputed to it and that it too had therefore contravened s 46 of the BCIIP Act.

15    Section 475(2) of the FW Act relevantly provides that:

475 Accepting or seeking payments relating to periods of industrial action

…

(2)      An employee organisation, or an officer or member of an employee organisation, must not ask an employer to make a payment to an employee if the employer would contravene section 474 by making the payment.

16    Section 474(1) prohibits employers from making payments to employees in respect of a period in which employees undertake industrial action that is not protected industrial action under the FW Act.

17    The respondents admitted that the 31 October Industrial Action constituted “industrial action” within the meaning of s 19(1)(c) of the FW Act and that it was not protected industrial action under that Act. Further, it was admitted that OneSteel would have breached s 474(1) if it had accepted Kelly’s request and paid the workers in relation to the period of the 31 October Industrial Action. Accordingly, the respondents admitted that Kelly had contravened s 475(2) of the FW Act by making the Pay Request. By operation of 793(1)(a) of the FW Act, the AWU admitted that it was derivatively liable for Kelly’s conduct and had therefore also contravened s 475(2).

Declaratory Relief

18    The Commissioner seeks declarations pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth) that the respondents contravened s 475(2) of the FW Act and s 46 of the BCIIP Act. The respondents do not oppose the making of the declarations and accept that it is open to the Court to do so.

19    In Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Laverton North and Cheltenham Premises Case) (No 2) [2019] FCA 973, I said at [8] that “[i]t is well settled that there is educative value and utility in formally recording the basis upon which the proceeding has been resolved”. Other decisions have also helpfully explained the utility of granting declaratory relief in relation to a breach of civil penalty provisions: see, eg, Australian Competition and Consumer Commission v The Construction, Forestry, Mining and Energy Union [2006] FCA 1730; (2007) ATPR 42-140 at [6] (Nicholson J).

20    The Commissioner seeks declarations in the following terms:

1. On 31 October 2018, the Second Respondent (Kelly) organised employees of OneSteel Reinforcing Pty Ltd (OneSteel), who were employed at 180 Browns Road, Noble Park, Victoria (the Site), to take industrial action that day in contravention of s 46 of the Building and Construction Industry (Improving Productivity) Act 2016 (BCIIP Act) (the 31 October 2018 s 46 Kelly Contravention).

2. By operation of ss 94(1)(a) and 95(1)(b) of the BCIIP Act, the First Respondent (AWU) has contravened s 46 of the BCIIP Act in respect of the 31 October 2018 s 46 Kelly Contravention (the 31 October 2018 s 46 AWU Contravention).

3. On 1 November 2018, Kelly organised employees of OneSteel to take industrial action at the Site that day in contravention of s 46 of the BCIIP Act (the 1 November 2018 s 46 Kelly Contravention).

4. By operation of ss 94(1)(a) and 95(1)(b) of the BCIIP Act, the AWU has contravened s 46 of the BCIIP Act in respect of the 1 November 2018 s 46 Kelly Contravention (the 1 November 2018 s 46 AWU Contravention).

5. On 31 October 2018, Kelly, at a meeting at the Site with OneSteel management, in contravention of s 475(2) of the Fair Work Act 2009 (FW Act), made a request that OneSteel pay its day shift employees for their shift that day in circumstances where those employees had taken industrial action for the majority of that shift (the 31 October 2018 s 475(2) Kelly Contravention).

6. By operation of s 793(1) of the FW Act, the AWU has contravened s 475(2) of the FW Act in respect of the 31 October 2018 Kelly s 475(2) Contravention (the 31 October 2018 s 475(2) AWU Contravention).

21    The terms of the declarations sought are not in contest. There is utility in the declarations sought being made and it is appropriate that they be made.

Pecuniary Penalties

22    Section 46 of the BCIIP Act and s 475(2) of the FW Act are both civil penalty provisions. It is necessary therefore to determine the quantum of the penalties that should be imposed on the respondents. The positions of the parties in respect of the quantum of penalties sought at the date of the hearing and the applicable maximum penalties are tabulated below:

23    The respondents submitted that the course of conduct and the totality principle should then be applied to the above figures to reduce the quantum of pecuniary penalties imposed on the respondents by a significant margin.

The Applicable Principles

24    It is unnecessary to embark on a lengthy exposition of the principles relevant to the assessment of civil penalties under s 81 of the BCIIP Act and s 546 of the FW Act. Each of those provisions confers jurisdiction on a court to order that an appropriate penalty be imposed for a contravention of a civil penalty provision. The authorities were not disputed by the parties. Nevertheless, I set out several important statements of principle.

25    The purpose of a civil penalty is primarily, if not wholly, protective to promote the public interest in compliance: Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 (the “Agreed Penalties Case”) at [54]-[55] (French CJ, Kiefel, Bell, Nettle and Gordon JJ); Pattinson v Australian Building and Construction Commissioner [2020] FCAFC 177; 384 ALR 75 at [25] (Allsop CJ, White and Wigney JJ). As Allsop CJ, White and Wigney JJ said in Pattinson at [98]:

The court’s task is to determine and impose a penalty that it considers “appropriate” if it is satisfied that a person upon whom the penalty is to be imposed has contravened a civil remedy provision. That task is to be undertaken in the light of the object or purpose of the imposition: the promotion of the public interest in compliance with the provision of the statute in question, by deterrence, specific and general. It is clear that the object of deterrence is directed to the subject contravention. That is, it is the deterring of contraventions of the kind before the court to which regard must be had in fixing the penalty that is considered appropriate, by reference to the frame of reference or yardstick provided by the maximum penalty as set by Parliament. Thus, it will always be important to understand the nature, character and full context of the contravening.

26    Their Honours further observed that:

    the judicial discretion as to the fixing of an appropriate civil penalty for the object of obtaining compliance through deterrence must be exercised reasonably (at [106]);

    the imposition of an appropriate penalty in furtherance of the object of deterrence does not authorise the imposition of an oppressive penalty, being a penalty greater than is necessary to achieve the object of deterrence (at [104] and [107]);

    the process is whole and discretionary, and evaluative in character, to which objective aspects of the contravention and what might be called the subjective characteristics of the contravener, indeed all considerations that rationally touch on or inform deterrence, are relevant, including the mental attitude of the contravener, whether innocent, or whether reflective of a determined refusal to comply with the law (at [109]);

    an instinctive synthesis approach remains relevant as a convenient way to express an evaluative process to which many factors may be relevant in reaching a conclusion of an appropriate penalty necessary in the circumstances for the object of deterrence, without exceeding what is reasonably necessary and thus becoming oppressive, in respect of a contravention of a kind before the Court (at [112]).

27    In relation to specific deterrence, it has been frequently observed that 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 [66] (French CJ, Crennan, Bell and Keane JJ); Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20 at [62]-[63] (Keane CJ, Finn and Gilmour JJ). On the other hand, general deterrence is directed at sending a message to a broader audience that contraventions of the kind under consideration are serious and not acceptable: Australian Securities and Investments Commission v Southcorp Ltd (No 2) (2003) 130 FCR 406 at [32] (Lindgren J).

28    Non-exhaustive lists of the considerations that may be relevant when fixing a pecuniary penalty in relation to a contravention of industrial law have been formulated in various cases. Lists of that kind provide useful guidance but should not be slavishly applied. In Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68 (the “QLD Infrastructure Case”) the Full Court identified guiding considerations that relate to the objective nature and seriousness of the offending conduct and those that concern the particular circumstances of the respondent in question in the following terms at [103] and [104] (Dowsett, Greenwood and Wigney JJ):

The factors relating to the objective seriousness of the contravention include: the extent to which the contravention was the result of deliberate, covert or reckless conduct, as opposed to negligence or carelessness; whether the contravention comprised isolated conduct, or was systematic or occurred over a period of time; if the defendant is a corporation, the seniority of the officers responsible for the contravention; the existence, within the corporation, of compliance systems and whether there was a culture of compliance at the corporation; the impact or consequences of the contravention on the market or innocent third parties; and the extent of any profit or benefit derived as a result of the contravention.

The factors that concern the particular circumstances of the defendant, particularly where the defendant is a corporation, generally include: the size and financial position of the contravening company; whether the company has been found to have engaged in similar conduct in the past; whether the company has improved or modified its compliance systems since the contravention; whether the company (through its senior officers) has demonstrated contrition and remorse; whether the company had disgorged any profit or benefit received as a result of the contravention, or made reparation; whether the company has cooperated with and assisted the relevant regulatory authority in the investigation and prosecution of the contravention; and whether the company has suffered any extra-curial punishment or detriment arising from the finding that it had contravened the law.

29    Furthermore, s 81(6) of the BCIIP Act prescribes a series of considerations which the Court must take into account in determining a penalty, including:

(a)    the nature and extent of the contravention;

(b)    the nature and extent of any loss or damage suffered because of the contravention;

(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.

The Nature and Seriousness of the Contraventions

31 October Industrial Action and 1 November Industrial Action

30    The contraventions of s 46 were both deliberate and objectively serious contraventions of the BCIIP Act.

31    The 31 October Industrial Action occurred over the course of three shifts and involved 51 workers ceasing work or refusing to perform work. The 1 November Industrial Action involved 26 workers from a single shift. It may be that the 31 October Industrial Action should be regarded as objectively more serious than the 1 November Industrial Action because of the disparity in the scope and extent of industrial action organised by Kelly. However, in terms of effect or consequence no distinction has been made by the evidence between the two events and the safest course is to treat them as roughly equivalent instances of unlawful industrial action.

32    I would infer that each of the contraventions was calculated to exert pressure by exposing OneSteel to loss or damage. That a person the subject of contravening conduct has incurred extensive loss or damage is ordinarily a potent consideration in the assessment of the seriousness of a contravention. Although any actual loss incurred by OneSteel was not established, I would infer from the AWU’s preparedness to pay $90,000 in compensation to OneSteel and the Commissioner’s agreement as to the sum to be paid that loss or damage of that order was suffered. Nevertheless, I accept the submission of the AWU that any loss or damage has been appropriately remedied by the AWU’s willingness to pay $90,000 in compensation to OneSteel (see [79] below). I therefore proceed on the basis that no loss or damage has gone without a remedy. The absence of any enduring loss or damage diminishes the seriousness of the respondents’ contraventions of s 46 of the BCIIP Act. It does not, however, diminish the fact that the respondents unlawfully imposed substantial economic pressure on OneSteel which, of itself, requires their conduct to be characterised as objectively serious.

33    The Commissioner contended that the seriousness of the s 46 contraventions was aggravated by the fact that the unlawful industrial action did not cease until the FWC made an order requiring the action to stop. The suggestion here made seems to be that the respondents would have continued the industrial action but for the FWC’s intervention. However, the fact is that the action was not continued and I fail to see how what might have happened but did not can be regarded as an aggravating factor.

34    I accept the respondents’ contention that the contraventions should be regarded as less serious than what otherwise may have been the case because:

(a)    in organising the industrial action, Kelly was not hostile, rude or threatening to OneSteel management. His communications with management, including his attempts to resolve the dispute through consultations, were initially appropriate before he organised the unlawful industrial action; and

(b)    in respect of the AWU, there was no involvement of senior management or senior officials in the contravening conduct.

35    The respondents also contended that the seriousness of the contraventions was diminished by the fact that Kelly genuinely believed that it was lawful for the workers to attend the rally organised by the ACTU. In this respect, the respondents said that Kelly’s conduct should be regarded as voluntary but not deliberate.

36    It is not necessary for me to determine whether attendance at a political rally constitutes “industrial action” for the purposes of the BCIIP Act. Kelly was not challenged either as to the genuineness or reasonableness of his belief that a refusal to work to attend at a political rally is not unlawful and I accept that he genuinely and, subjectively speaking, not unreasonably believed that to be so. However, his conduct in organising the industrial action was nevertheless deliberate. I do not accept that Kelly did not appreciate that the industrial action taken on 31 October and 1 November (as distinct from that taken to attend the rally) was not unlawful. Kelly’s genuine belief that the workers being interviewed by OneSteel had not acted unlawfully by attending the rally and that the workers were being unfairly treated by being interviewed does, however, inform the extent to which he believed that his conduct was justified. In that respect, I note that OneSteel management did not protest when told that the workers would attend a rally. I also accept Kelly’s evidence that he was motivated to assist the workers because, having told them that it was lawful to attend the rally, he felt guilty that he had put them in trouble. Further, I accept the AWU’s contentions that in organising the industrial action Kelly was genuinely concerned about the health and safety of the workers due to the workers being distracted, angry and upset by the interviews which OneSteel were conducting.

37    Those considerations demonstrate that, though unlawful, Kelly’s behaviour was, at a subjective level, genuinely regarded by him as reasonably justified. True it is that options short of industrial action may have been available to Kelly to further the cause he was pursuing. To some extent, the weight to be afforded to these considerations is therefore diminished by the existence of more reasonable alternatives to address the unfairness and the unsafe working conditions Kelly had in mind. Nevertheless, these considerations deserve some weight. To my mind, they inform the seriousness of the contraventions in question because they demonstrate that the need for specific deterrence is somewhat lower than it would have been in their absence. That is so because they enable the conduct to be characterised as a specific reaction to peculiar circumstances which is unlikely to recur in the context of the lessons likely learned through this proceeding. The conduct can therefore be regarded as isolated rather than driven by systemic factors which, if not appropriately addressed by specific deterrence, would likely result in conduct of a like kind being repeated.

The Pay Request

38    Sections 474 of the FW Act prohibits payment being made to an employee by his or her employer for a period in which the employee has engaged in unlawful industrial action. Section 475 prohibits an employee accepting such a payment and prohibits an employee organisation, or an officer or member thereof, requesting such a payment. The provisions are designed to deter employees from taking unlawful industrial action. The conduct of the respondents in unlawfully requesting that the workers be paid in contravention of s 475(2) undermined that objective. The conduct was deliberate even if it be the case that Kelly did not mean to act unlawfully. It was objectively serious. It was, however, ineffectual.

39    The respondents relied on the judgment of Wigney J in BlueScope Steel Limited v The Australian Workers’ Union [2019] FCA 182 where it was found that a similar contravention of s 475(2) of the FW Act was not of a serious nature. BlueScope provides some support for the respondents’ contention. It must be observed, however, that BlueScope turned on very different facts. The official in BlueScope had deliberately framed the relevant request for payment in a way that he thought would not contravene s 475(2) of the FW Act. The request was framed as a question about whether the respondent employer intended to pay its workers. It was argued that the official had merely enquired about the company’s position in respect of paying the employees and that the question was not of itself a request that the company pay its employees for a period of industrial action. In a separate judgment, that question was held to constitute a request for pay in contravention of s 475(2): BlueScope Steel Limited v Australian Workers’ Union [2018] FCA 1574 (BlueScope (Liability)) at [165] (Wigney J). Nevertheless, in BlueScope it was accepted that the official had framed the question in a way that he genuinely thought might not offend s 475(2) of the FW Act. In that context, Wigney J found that the offending was at the “very low end of the range or spectrum”: BlueScope at [25].

40    In the present circumstances, however, unlike in BlueScope, the conduct must be regarded as a deliberate contravention of s 475(2) of the FW Act. Nevertheless, I accept that Kelly did not wilfully flout s 475(2) or make any threats or unduly forceful demands: see BlueScope at [23]. The respondents also submitted that the purpose of his request was well-intentioned because it sought to alleviate tensions and secure the return to work of the employees: see BlueScope at [24]. I accept that the conduct arose out of Kelly’s genuine belief that the workers had been treated unfairly.

41    The nature of the circumstances which drove the request for pay deserve some consideration. Again, I consider that the unlawful conduct occurred in peculiar and isolated circumstances, in relation to which the need for specific deterrence is diminished. I do not accept that in making the request for payment, Kelly did not intend that the workers be paid in relation to a period during which unlawful industrial action was taken. From the perspective of the AWU, there was no involvement by senior management.

Inidividual Factors

Contrition and Remorse

42    I accept the submission of the respondents that both Kelly and the AWU have demonstrated genuine contrition and remorse. The evidence before me of Kelly and the Victorian branch Secretary of the AWU demonstrated genuine regret about the above events. The Commissioner accepted that the respondents have shown true regret and remorse.

43    Further, I consider that the willingness of the AWU to acknowledge and pay substantial compensation to OneSteel further demonstrates its contrition and remorse. The Commissioner accepted that the applicant’s contrition was a consideration relevant to the assessment of penalties. In my view, it is a relevant consideration and a weighty one. When pressed, the Commissioner proposed that the demonstration of contrition and remorse, along with cooperation (see below at [44]-[45]), ought to be recognised by a discount to the pecuniary penalty in the order of 20% less than what would otherwise be imposed.

Cooperation

44    I accept the submission of the respondents that they demonstrated significant cooperation with the Commissioner by resolving the questions of fault. In his reply, the Commissioner accepted that the respondents had exhibited cooperation and that it is a factor mitigating the quantum of the penalty to be imposed on them. This was not a case where any cooperation came too late for any significant weight to attach to it. Although the contraventions were not admitted until one year after the proceeding commenced, the parties were, for the bulk of this period, either in initial stages of litigation or awaiting dates for mediation. The proceeding was settled at the first realistic opportunity available to the respondents, which was at the mediation before a trial date was fixed. This was not a case where substantive matters were only conceded on the eve of the trial.

45    Further, the history of pleadings before the Court discloses that the original proceeding brought by the Commissioner was much broader in scope, seeking civil penalties against individual employees. The parties were entitled, and indeed encouraged, to discuss and negotiate in respect of those matters. Through the process of mediation, the claims against individual employees appear to have fallen away, demonstrating that there were questions of merit that required consideration by the parties: see Registered Organisations Commissioner v Australian Workers’ Union [2019] FCA 1852 at [197] (Mortimer J). The proceeding could not have been realistically settled in respect of fault before the individual claims were resolved because matters such as the amount of compensation to be paid could not have been appropriately assessed. In this context, the respondents cannot be criticised for any delay in the settlement. Accordingly, the Commissioner made the prudent decision not to rely on its earlier written submission that the cooperation of the respondents should be qualified. The conduct of the matter was at all times appropriate and the respondents’ cooperation was timely. I therefore consider that the cooperation of the respondents ought to be afforded its full weight.

Prior Contraventions

46    Kelly has no history of prior contraventions of industrial legislation. Although the Commissioner originally submitted that an absence of prior contraventions was not itself a mitigating factor but merely did not contribute to what would otherwise be an increased penalty if prior contraventions existed, that submission was later withdrawn. The Commissioner acknowledged that the weight of authority supports the proposition that the absence of prior contraventions may be a mitigating factor in the assessment of a penalty: see, eg, Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Palmerston Police Station Case) [2021] FCAFC 7 at [8] (Bromwich J), [38] (Katzmann J) and [40] (Griffiths J); Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at [138] (Jessup J); Australian Opthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at [24] (Gray J) and [110] (Buchanan J); QR Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2010] FCAFC 150 at [59] (Keane CJ and Marshall J); Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Perth Childrens’ Hospital Contraventions Case) [2017] FCA 491 at [29]-[33] (Barker J).

47    The respondents provided a table setting out the prior convictions of the AWU, which I set out below in modified form:

48    The appropriate approach to the consideration of prior contraventions was affirmed in Pattinson. The majority in Pattinson provided a detailed and scholarly analysis of the authorities on the correct approach to assessing the relevance of prior contraventions in the exercise of the discretion to issue a civil penalty. Their Honours concluded that prior contraventions may bear upon the seriousness of the offence but cannot justify a penalty that is disproportionate to the gravity of the instant offence: see, eg, at [180] and [194] (Allsop CJ, White and Wigney JJ).

49    That position was put succinctly by Besanko and Bromwich JJ, agreeing with the majority, at [227(3)]: “Prior history may be relevant to an assessment of the seriousness or gravity of the instant contravening conduct, but neither that history, nor the object of deterrence, can result in a penalty that is disproportionate to the contravening conduct itself, having regard to the maximum penalty provided.”

50    In assessing the weight to be given to prior offending, it is also important to bear in mind the comments of King CJ in R v McInerney (1986) 42 SASR 111 at 113 that prior contraventions will be:

more cogent if they have been the subject of conviction before the immediate offence. In such cases, the offender has committed the immediate offence notwithstanding the formal judgment and condemnation of the law in respect of the earlier offences and notwithstanding the warning as to the future which the conviction experience implies.

51    That principle is of especial relevance to the gravity of the misconduct in respect of the Pay Request because the AWU had been previously found to have breached s 475(2) of the FW Act. The Pay Request occurred shortly after Wigney J determined that the AWU had breached s 475(2) of the FW Act in BlueScope (Liability) but before the decision in BlueScope on the quantum of penalty. In these circumstances, it must be accepted that the AWU committed the offence in spite of the condemnation of the law in relation to its previous conduct of the same kind. This is a significant matter that should be afforded its full weight. Although the AWU did so without the benefit of knowing the quantum of the penalty to be imposed upon it for the breach, I consider that this should not be treated as a significant mitigating factor.

52    Three of the offences included in the table above were not committed by officials of the Victorian branch of the AWU. These offences should be afforded less weight because they do not go directly to the culture of compliance of the Victorian branch (see further below at [55]) and therefore have less bearing on the degree of the deterrence required in the specific circumstances.

53    It may be observed that many of the instances of past conduct referred to in the above list concern unlawful industrial action. The majority of these incidents, however, occurred over a decade ago. In the intervening period, there have been relatively few incidents. Where incidents have occurred, the penalties imposed upon the AWU have been relatively minor. Furthermore, the incidents occurred in the context of a very large union which, over the period in question, was likely involved in many thousands of industrial transactions.

54    There is no basis for an inference to be drawn that the AWU has a policy of disobedience or of a determined refusal to comply with the law. No contention to that effect was made by the Commissioner. The AWU’s contrition and regret in relation to the contraventions in question and the evidence of its compliance regime (see below at [55]) serve to support an inference that the union’s past contraventions were likely episodic lapses of an ordinarily lawful and compliant organisation rather than instances of systemic non-compliance.

Culture of Compliance

55    The Secretary of the Victorian branch of the AWU gave evidence that he expects the branch’s organisers and delegates to comply with industrial laws. To that end, the AWU provides a continuous training program, accredited by WorkSafe, to educate organisers, delegates and HSRs on industrial law. The Secretary gave evidence that organisers at the AWU are required to hold a right of entry permit and undertake training to obtain and maintain that permit. This requirement, it was said, embeds training about industrial law within the organisational structure of the AWU. The training program described by the Secretary is extensive. Kelly himself gave evidence of undertaking significant compliance training as part of the AWU’s program. I accept the evidence of the Secretary and Kelly, and I accept that the Victorian branch of the AWU maintains a culture of compliance with industrial law.

Capacity to Pay

56    The AWU conceded that it is an organisation with substantial funds, but submitted that the COVID-19 pandemic may nevertheless affect its financial standing. In that context, it was said that a penalty which was not ordinarily oppressive might be in the present circumstances. The evidence of the Commissioner demonstrated that the AWU has substantial resources and that its finances have not thus far been dramatically curtailed by the COVID-19 pandemic. In these circumstances, I am not persuaded that the AWU does not have the capacity to pay substantial penalties.

57    There was no evidence before me of Kelly’s financial position other than his employment with the AWU. I therefore proceed on the basis that the penalty should be a penalty that would be meaningful for an ordinary working person: see The Laverton North and Cheltenham Premises Case at [70] (Bromberg J).

The Course of Conduct Principle

58    The respondents put forward two positions in respect of whether the contraventions should be treated as a single course of conduct:

(1)    first, that all the contraventions of Kelly constitute a single course of conduct; and

(2)    second, and in the alternative, that Kelly’s contraventions of s 46 of the BCIIP Act constitute a single course of conduct.

The respondents submitted that by parity of reasoning the Court should adopt same position for the AWU as it does for Kelly.

59    In respect of the first position, the respondents submitted that there is no impediment to the Court applying the common law course of conduct principle to recognise the interconnectedness of the contraventions under s 46 of BCIIP Act and s 475(2) of the FW Act. The respondents observed that in the criminal law the course of conduct principle can be applied regardless of whether the offender’s conduct was a breach of the common law or of different statutes. In the present circumstances, the Pay Request occurred in the context of Kelly seeking to resolve the dispute which had resulted in the industrial action. Thus the contraventions were said to occur within the same matrix of facts.

60    In respect of the second position, the respondents submitted that, while there were two specific acts of organisation, Kelly engaged in the contraventions of s 46 of the BCIIP Act in connected and similar circumstances. The contraventions occurred on consecutive days and arose from the disciplinary interviews in relation to attendance at the rally. Accordingly, the respondents contended that the 1 November Industrial Action ought to be properly understood as a continuation of the 31 October Industrial Action.

61    The Commissioner submitted that it is wrong to assume that the quantum of the penalty will be reduced as a matter of course if the principle is found to apply. Rather, it was said that the principle is not a “rigid rule[] of law” but a tool of analysis “to guide the exercise of the penalty imposing discretion”: Parker v Australian Building and Construction Commissioner (2019) 270 FCR 39 at [273] (Besanko and Bromwich JJ).

62    The Commissioner also contended that that the course of conduct principle at common law does not permit a court to impose a single penalty in respect of multiple contraventions and that each contravention should attract a separate penalty: Australian Building and Construction Commissioner v Menon [2020] FCA 1418 at [80] (White J). Nor does the principle, the Commissioner said, have the effect that the maximum penalty for a single contravention becomes the maximum penalty for all contraventions in a single course of conduct: Menon at [80] (White J). In oral argument, the Commissioner nevertheless observed that the purpose of the task is ultimately to ensure that no wrongdoing across the contraventions is punished twice.

63    In respect of the facts before the Court, the Commissioner submitted that, to the extent that the principle is relevant, it only applies to the breaches of s 46 of the BCIIP Act. The Commissioner contended that conduct arising out of the same substratum of facts alone is not sufficient to attract the operation of the principle. Such a finding, the Commissioner said, is the beginning of the enquiry, not the end: see Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Nine Brisbane Sites Appeal) (2019) 269 FCR 262 at [12] (Allsop CJ, with Griffiths J agreeing at [13]). Each contravention of s 46 was said to be constituted by separate acts and decisions of Kelly. The Commissioner submitted that each incident involved separate acts of organisation and therefore did not arise out of a single course of conduct.

64    The respondents referred to the judgment of Rangiah J in The Nine Brisbane Sites Appeal at [124] in which several propositions relevant to the common law course of conduct principle were set out. Consistently with the views of Rangiah J, in The Laverton North and Cheltenham Premises Case at [81] I said of the common law course of conduct principle that “[a]n interrelationship between the legal and factual elements of each of the instances of conduct concerned is relevant, but ultimately the object of the exercise is to ensure that a contravener is not punished twice for what is essentially the same wrongdoing”.

65    The contraventions of s 46 of the BCIIP Act and s 475(2) of the FW Act cannot be regarded as a single course of conduct. The nature of the wrongdoing under each statute differs significantly. That difference cannot be negated by the mere fact that each incident arose from a single factual origin, namely Kelly’s concerns about the disciplinary interviews. The first position put by the respondents cannot be sustained.

66    In respect of the contraventions of s 46 of the BCIIP Act, however, I consider that Kelly’s actions constituted a single course of conduct. While there were indeed two separate acts of organising, the conduct constituted an unabridged whole that spanned two days. Equivalent conduct could have been arranged on the same occasion by organising the employees to engage in industrial action for two days. The Commissioner could have maintained that each of the four shifts should be characterised as a separate contravention of s 46 of the BCIIP Act. In either case, the gravity of the offending would be substantially the same. The fact that the conduct occurred over two calendar days should not of itself negate the conclusion that the contraventions constituted a single course of conduct. Accordingly, I accept the second position put by the respondents that the two contraventions of s 46 occurred in a single course of conduct. I agree with the Commissioner’s contention that each contravention should attract a single penalty, but I will adjust those penalties to reflect the single course of conduct in which they occurred.

The Appropriate Penalty

67    I have taken into account each of the considerations I consider to be relevant to the level of deterrence, both general and specific, which are necessary to address the instant contravention. Whilst I have grouped those considerations into the two broad categories set out above, the majority in Pattinson counselled against a staged approach to the fixing of a penalty in favour of a holistic approach in which all of the relevant considerations are evaluated together at once in setting a penalty sufficient to dissuade the contraveners and others from contravening in a like manner: see Pattinson at [109]-[110] (Allsop, White and Wigney JJ). I will adopt that approach.

68    Under s 81 of the BCIIP Act, the Court may impose a maximum penalty of $42,000 for Mr Kelly and $210,000 for the AWU for a breach of s 46. Under s 539 of the FW Act, the Court may impose a maximum penalty of $12,600 for Kelly for a breach of a 475(2) of the FW Act. In respect of the AWU, the operation of s 539 of the FW Act is modified by s 49(c) of the BCIIP Act such that the maximum penalty is $210,000.

69    The maximum penalty does not only provide an upward limit on the power of the Court to impose a penalty; it establishes a statutory indication of the appropriate punishment for the worst type of case. By this yardstick a proportionate penalty for lesser cases can be assessed: Pattinson at [62] (Allsop CJ, White and Wigney JJ).

70    The contraventions here in question are far from the worst types of case. Each contravention was nevertheless deliberate and objectively serious. The industrial action contraventions, which occurred in a single course of conduct, resulted in significant economic pressure being imposed on an innocent party. The unlawful request for strike pay was also deliberate and serious. However, in neither case was any enduring loss or damage suffered. In both cases, the conduct was that of a single organiser without the condonance of the organisation for which he works, which would have been demonstrated if senior management had been involved.

71    The need for general deterrence demands a meaningful penalty, but one which also takes into account the somewhat peculiar and isolated industrial circumstances which drove each of the contraventions.

72    The need for specific deterrence is not substantial in the case of Kelly. He has no prior history of offending. His offending which is the subject of this proceeding occurred in peculiar and isolated circumstances which are less likely to be repeated given the lessons he will have now learned. His ongoing training as part of the AWU’s compliance regime should further assist him to help avoid the errors of judgement and apparent ignorance of industrial laws which seem, at least in part, to have driven the instant contraventions. His contrition and regret is genuine. His cooperation in relation to this proceeding is deserving of its full weight as a discounting factor. His capacity to pay is that of an ordinary working person.

73    For the industrial action contraventions of s 46 of the BCIIP Act, and bearing in mind that they involve a single course of conduct, I would impose on Kelly a total penalty of $5,400, being $2,700 in relation to each contravention. For the contravention of s 475(2) of the FW Act constituted by the Pay Request, I would impose a penalty of $1,600.

74    The need for specific deterrence in relation to the AWU is greater and there is a greater need for a meaningful penalty to address general deterrence. The AWU has a prior history of offending which is neither insignificant nor so serious as to be suggestive of a culture of non-compliance with the law. It has a compliance regime in place and according to the unchallenged evidence of its Victorian Secretary, its Victorian branch is governed by an expectation that organisers and delegates will comply with industrial laws.

75    These proceedings have demonstrated that that expectation is not always met in circumstances where there are means available to the AWU to ensure that they are. That an organiser had apparent authority to organise industrial action without the express consent of senior management seems to be a troubling flaw in the AWU’s compliance regime. The AWU must therefore take responsibility for that failure and a meaningful penalty which takes into account the AWU’s capacity to pay should be imposed to help ensure that such a failure is not repeated.

76    However, the AWU’s regret and contrition expressly given but also inherent in its preparedness to compensate for the loss and damage caused, as well as its co-cooperation, must also be given their full weight as discounting factors.

77    For the contraventions of s 46 of the BCIIP Act, and again bearing in mind that they involve a single course of conduct, I would impose a total penalty of $50,000, being $25,000 for each contravention. For the contravention of s 475(2) of the FW Act, bearing in mind that this is a second recent contravention of this provision, I would impose a penalty of $30,000.

78    The application of the totality principle does not require any adjustment to those penalties.

Other Orders

79    The respondents admitted that OneSteel had sustained loss or damage arising out of the 31 October Industrial Action and 1 November Industrial Action. In recognition of this, the AWU agreed to pay OneSteel $90,000 as part of the resolution of the proceeding and consents to an order to that effect being made.

80    The parties agree that there should be no order as to costs.

81    I will make orders and declarations consistent with these reasons.

Associate:

Dated:    28 July 2021