Federal Court of Australia

Civil Air Operations Officers Association of Australia v Airservices Australia (No 2) [2021] FCA 993

ORDERS

THE COURT DECLARES THAT:

1.    By failing to consult with its Air Traffic Controller employees in the Byron Group prior to withdrawing from use a set of guidelines regulating the use of “grey days” in the Byron Group roster (the Grey Day Guidelines) by no later than 13 May 2018, the Respondent failed to comply with cl 8 of the Airservices Australia (Air Traffic Control and Supporting Air Traffic Services) Enterprise Agreement 2017 -2020 (the EA) and thereby contravened s 50 of the Fair Work Act 2009 (Cth) (FW Act) (the Consultation Contravention).

2.    By failing to maintain the status quo by not reinstating the use of the Grey Day Guidelines in the Byron Group roster by no later than 5 July 2018, after being notified by the Applicant of a dispute in relation to the withdrawal of those guidelines, the Respondent failed to comply with cl 10.1(g) of the EA and thereby contravened s 50 of the FW Act (the Status Quo Contravention).

THE COURT ORDERS THAT:

1.    Pursuant to s 546 of the FW Act the Respondent pay a pecuniary penalty of:

(a)    $40,950 in relation to the Consultation Contravention; and

(b)    $31,500 in relation to the Status Quo Contravention.

1.    Pursuant to s 546(3) of the FW Act, the pecuniary penalties in order 1 be paid to the Applicant within 28 days of this order.

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

REASONS FOR JUDGMENT

MURPHY J:

INTRODUCTION

1    The applicant in this proceeding, Civil Air Operations Officers’ Association of Australia (Civil Air), is a registered industrial association under the Fair Work (Registered Organisations) Act 2009 (Cth) which represents the industrial interests of civilian air traffic controllers (ATCs) and supporting staff. The respondent, Airservices Australia (Airservices), is an Australian Government statutory authority which employs civilian air traffic controllers and others. In 2017, the parties entered into an enterprise agreement under the Fair Work Act 2009 (Cth) (FW Act), the Airservices Australia (Air Traffic Control and Supporting Air Traffic Services) Enterprise Agreement 2017–2020 (the EA).

2    In mid-2018, a dispute arose between Civil Air and Airservices as to matters arising under the EA. Broadly, the dispute arose out of Airservices’ decision on 13 May 2018 to withdraw from use of a set of guidelines regulating the use of stand-by or “grey day” rosters in the rostering of ATCs for duty (the Grey Day Guidelines or the Guidelines). In brief terms, grey day rosters are provided for under cl 19.18 of the EA. They allow Airservices to roster employees to be on stand-by, for relief in the event that an employee who is rostered on duty is unavailable to work. To achieve this, the stand-by employee is rostered for a specific grey day shift, also known as a nominal shift, but is not required to attend for work unless called to do so. The employee must keep themselves available to be called in to perform duty for a period representing twice the length of the nominal shift and they are on-call for a period of nine hours or such other period as agreed. When rostered on stand-by, the employee is paid their ordinary rate of pay in respect of the nominal shift, regardless of whether or not they are required to attend for duty. The dispute essentially concerned whether cl 19.18 permitted Airservices to call ATCs rostered on a grey day shift in to work to fill what are called “manufactured” or “consequential” vacancies rather than only “direct” vacancies. Broadly, a manufactured or consequential vacancy is one created by an employee rostered on for duty becoming unavailable for their original shift because they are ordered to fill a vacancy caused by another employee rostered on for duty being absent from work.

3    On 5 July 2018, Civil Air informed Airservices of the dispute. On 13 July 2018, Civil Air notified the dispute to the Fair Work Commission (FWC). Amongst other things, Civil Air claimed that:

(a)    Airservices failed to consult with ATCs before it withdrew the Grey Day Guidelines from use, in breach of cl 8 of the EA;

(b)    Airservices failed to maintain the status quo by not reinstating the Grey Day Guidelines after being notified of a dispute in relation to their withdrawal, in breach of cl 10.1(g) of the EA; and

(c)    the Grey Day Guidelines were consistent with the proper construction of cl 19.18 of the EA.

4    The parties were unable to resolve the dispute by conciliation, and Civil Air then sought that the FWC arbitrate the dispute pursuant to the power conferred on the FWC under cl 10.1(e) of the EA. Commissioner Wilson of the FWC heard the dispute and on 11 April 2019 he handed down Civil Air Operations Officers Association v Airservices Australia T/A Airservices Australia [2019] FWC 2136 (the FWC Decision). Amongst other things, the FWC:

(a)    found that Airservices failed to consult with ATCs in the Brisbane-based Byron Group before withdrawing the Grey Day Guidelines from use, in breach of cl 8 (but was not obliged to consult in respect of ATCs in the Brisbane Tower Group);

(b)    found that Airservices failed to maintain the status quo by not reinstating the use of the Guidelines in the Byron Group after being notified by Civil Air of a dispute, in breach of cl 10.1(g) (but was not obliged to reinstate the Guidelines in respect of the Brisbane Tower Group); and

(c)    did not accept Civil Air’s construction of cl 19.18.

5    Pursuant to cl 10.1(e) of the EA, the FWC Decision was binding on the parties, subject to either party exercising a right of appeal to a Full Bench of the FWC. Neither party sought to appeal the decision.

6    On 8 June 2019, armed with the FWC’s findings that Airservices breached cll 8 and 10.1(g), Civil Air commenced this proceeding by way of originating application and statement of claim. The proceeding seeks:

(a)    declarations pursuant to s 545 of the FW Act and/or s 21 of the Federal Court of Australia Act 1976 (Cth) (the FCA) that:

(i)    by failing to consult with its ATC employees in the Byron Group prior to withdrawing the Grey Day Guidelines from use Airservices breached cl 8 of the EA and thereby contravened s 50 of the FW Act; and

(ii)    by failing to maintain the status quo by not reinstating the Grey Day Guidelines in relation to the Byron Group, after being notified by Civil Air of a dispute in relation to the withdrawal of the Guidelines, Airservices breached cl 10.1(g) of the EA and thereby contravened s 50 of the FW Act,

(b)    an order pursuant to s 546 of the FW Act that Airservices pay pecuniary penalties for its contraventions of the FW Act; and

(c)    an order that any pecuniary penalty be paid by Airservices to Civil Air.

7    By an interlocutory application dated 8 July 2019, Airservices sought orders to set aside the originating application pursuant to r 13.01 of the Federal Court Rules 2011 (Cth), doing so on the basis of an asserted want of jurisdiction. Broadly, Airservices contended that by reason of the FWC Decision there was no subsisting justiciable controversy between the parties and thus no “matter arising” under the FW Act within the meaning of s 562 of the FW Act; and the Court therefore lacked jurisdiction to hear and decide the proceeding. In Civil Air Operations Officers Association of Australia v Airservices Australia [2020] FCA 1665 (the jurisdiction judgment) I found that the Court has jurisdiction to hear and decide the proceeding, and dismissed the interlocutory application. Airservices has not appealed that judgment but it has reserved its right to do so pending final determination of the proceeding.

8    Subject to a contention that the Court lacks jurisdiction, Airservices admits it contravened s 50 of the FW Act; but it opposes declarations in respect of the contraventions, orders for pecuniary penalties and orders that any pecuniary penalty be paid to Civil Air.

9    For the reasons I explain, I am satisfied that Airservices contravened s 50 of the FW Act; and consider it appropriate to make declarations of contravention, to order that Airservices pay pecuniary penalties totalling $72,450, and to order that the penalties be paid to Civil Air.

THE EVIDENCE

10    Civil Air relies on:

(a)    two affidavits of Mr David Irvine, an ATC employed by Airservices and the Civil Air delegate responsible for the Byron Group at the relevant time, made 23 March 2021 and 12 May 2021; and

(b)    two affidavits of Mr James Walsh, an ATC employed by Airservices and the Vice President, Professional, of Civil Air, made 23 March 2021 and 12 May 2021.

Their affidavits were treated as read, subject to various rulings on the objections to evidence. Both Mr Irvine and Mr Walsh were cross examined.

11    Airservices relies on:

(a)    the affidavit of Mr Anthony Nugent, formerly employed by Airservices as an Air Traffic Management Service Manager, made 20 April 2021; and

(b)    two affidavits of Mr Jamie Dawe, employed by Airservices as a Workforce Deployment Lead, made on 20 April 2021 and 29 June 2021.

Their affidavits were treated as read, subject to various rulings on the objections to evidence. Both Mr Nugent and Mr Dawe were cross examined.

THE ISSUES FOR DETERMINATION

12    There are four issues for determination by the Court:

(a)    whether the alleged contraventions of s 50 of the FW Act have been made out;

(b)    if the Court is satisfied that Airservices contravened s 50 of the FW Act, whether it is appropriate:

(i)    to make declarations of contravention under s 545 of the FW Act and/or s 21 of the FCA; and

(ii)    to order that Airservices pay a pecuniary penalty under s 546 of the FW Act; and

(c)    whether any pecuniary penalty that is imposed should be paid to Civil Air.

THE RELEVANT PROVISIONS OF THE FW ACT

13    The FW Act creates the obligation for parties to an enterprise agreement to be bound by its terms, and provides specific mechanisms for obtaining orders in relation to contraventions. The relevant provisions of the FW Act provide as follows:

(a)    s 172 provides that employers and employees may make enterprise agreements;

(b)    s 50 provides that a person (bound by an enterprise agreement) must not contravene a term of it;

(c)    item 4 of the table in s 539 provides that s 50 is a civil remedy provision and that, amongst others, an employee organisation to which the enterprise agreement concerned applies, may apply to specified courts, including this Court, for orders in relation to a contravention of the section;

(d)    s 540(6) provides that an industrial association may apply for an order under Pt 4-1, Div 2 in relation to a contravention of a civil remedy provision if the industrial association is affected by the contravention or is entitled to represent the industrial interests of an employee affected by the contravention;

(e)    s 545(1) provides that this Court may make any order the court considers appropriate if the court is satisfied that a person has contravened a civil remedy provision;

(f)    s 546(1) provides that this Court may 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;

(g)    s 546(3) provides that this Court may order that a pecuniary penalty, or a part of the penalty, be paid to a particular organisation or person; and

(h)    s 557 provides that where multiple contraventions of a civil remedy provision are committed by the same person, and the contraventions arise out of a course of conduct by the person, then the contraventions are taken to constitute a single contravention.

WHETHER THE ALLEGED CONTRAVENTIONS HAVE BEEN MADE OUT

14    In its amended statement of claim (ASOC) Civil Air alleges that:

(a)    on or about 13 May 2018, Airservices withdrew from use the Grey Day Guidelines which applied to the Byron Group of ATCs; the withdrawal of the Guidelines constituted a change within the meaning of cll 8.3(b) and 8.10 of the EA; Airservices failed to consult as required by cll 8.3(b) and 8.10; and consequently Airservices breached cl 8 of the EA and thus contravened s 50 of the FW Act (the Consultation Contravention); and

(b)    on 5 July 2018, Civil Air notified Airservices of a dispute within the meaning of cl 10 of the EA about the withdrawal of the Guidelines; and on 5 July 2018 Civil Air requested maintenance of the status quo in accordance with cl 10.1(g) of the EA, namely the reinstatement of the Guidelines. Airservices did not reinstate the Guidelines and consequently it breached cl 10.1(g) of the EA and thus contravened s 50 of the FW Act (the Status Quo Contravention).

15    To be satisfied that the alleged contraventions of s 50 have been made out the Court must be satisfied that the facts pleaded and admitted, and any other evidence adduced before the Court, establish the following:

(a)    that at all relevant times the EA covered and applied to Airservices and the ATCs in its employ;

(b)    the relevant terms of the EA; and

(c)    that the relevant terms of the EA were contravened.

For the reasons I now explain, I am satisfied in relation to each of those matters.

Whether at all relevant times the EA covered and applied to Airservices and the ATCs in its employ

16    The evidence shows that the EA was approved by the FWC on 23 March 2017 and came into effect on 30 March 2017, with a nominal expiry date of 30 March 2020. The EA was therefore in effect at the time that the breaches of cll 8 and 10.1(g) are alleged to have occurred. Clause 4 the EA states that it covers Airservices and all employees in the classifications described in cl 4.1(b) of the EA, which includes ATCs.

17    In any event, Airservices admits that at all relevant times the EA applied to Civil Air and to Airservices; and that it bound Airservices in respect of its employment of employees covered by the EA, including ATCs.

The relevant terms of the EA

18    The relevant term of the EA for the alleged Consultation Contravention is cl 8. Civil Air pleads in the ASOC that cl 8 of the EA relevantly provided:

8.    CONSULTATION ON CHANGE

8.1    The intent of this consultation provision is to ensure employees and any employee representatives are fully informed, consulted and provided with a genuine opportunity to express their views and provide comments and/or suggestions prior to any final decision being made about changes that are likely to have a significant impact on employees covered by this Agreement and/or changes to an employee’s regular roster or ordinary hours of work. Airservices will give genuine consideration and respond to matters raised and proposals and options put forward.

8.2    These consultation arrangements support Airservices in meeting legislative and Operating Certificate requirements.

8.3    Airservices will consult employees and their employee representatives about:

…

(b)    changes to an employee’s regular roster or ordinary hours of work.

…

Consultation on changes to an employee’s regular roster or ordinary hours of work

8.10    For a change of the kind referred to in clause 8.3(b) Airservices will consult with affected employees and their representatives by:

(a)    providing information about the change;

(b)    inviting the employee to give their views about the impact of the change (including any impact in relation to their family and caring responsibilities);

(c)    giving prompt and genuine consideration to matters raised about the change.

19    Airservices admits the content of cl 8 of the EA as pleaded.

20    Civil Air pleads cl 10 of the EA. In summary that clause provided a mechanism for the settlement of disputes. It required the parties to first attempt to resolve any dispute at the workplace level (10.1(a)); then, at the senior management level (10.1(b)); and then through conciliation before the FWC or by use of such other alternative dispute resolution process as the parties agree, and which the FWC can conduct under the FW Act (10.1(d)). If the dispute remained unresolved then cl 10.1(e) permitted private arbitration by the FWC and provided that any such determination was binding on the parties subject to their exercising a right of appeal against the decision to a Full Bench of the FWC.

21    The relevant term of the EA for the alleged Status Quo Contravention is cl 10.1(g), which provided:

While a concern or dispute is being dealt with, work will continue as normal being the status quo save for any bona fide safety concerns.

22    Airservices admits the content of cl 10 of the EA as pleaded.

Whether the facts giving rise to the alleged breaches of cl 8 and 10.1(g) are established

23    Under cover of a contention that the Court lacks jurisdiction to hear and decide the proceeding, Airservices admits that:

(a)    it breached cl 8 of the EA and admits that by its breach of cl 8 it thereby contravened s 50 of the FW Act; and

(b)    it breached cl 10.1(g) of the EA and admits that by its breach of cl 10.1(g) it thereby contravened s 50 of the FW Act.

24    It is likely Airservices made those admissions as it was estopped from denying the breaches of the EA. Clause 10 of the EA permitted the parties to submit a dispute regarding a matter arising under the EA to the FWC for arbitration, and conferred on the FWC the power to finally and conclusively determine such a dispute: Construction, Forestry, Mining and Energy Union v The Australian Industrial Relations Commission [2001] HCA 16; 203 CLR 645 at [31]-[32] (Gleeson CJ, Gaudron, McHugh, Gummow, Kirby, Hayne and Callinan JJ). Civil Air submitted the present dispute to the FWC for arbitration, the FWC made positive findings as to the relevant facts and determined that Airservices had breached cll 8 and 10.1(g) of the EA (but not other clauses). Those findings are binding and conclusive on the parties to the dispute: cl 10.1(e) of the EA; TCL Air Conditioner (Zhongshan) Co Ltd v The Judges of the Federal Court of Australia [2013] HCA 5; 251 CLR 533 at [78] (Hayne, Crennan, Kiefel and Bell JJ).

25    In relation to the alleged Consultation Contravention, the FWC found as follows:

(a)    in early 2017, Airservices wanted to introduce grey day shifts into the Byron Group, the ATC group responsible for managing the airspace located geographically between the Gold Coast and Coffs Harbour which comprised 18 ATCs at the time. There was a meeting between an ATC, Leigh Meyer; and Mr Nugent, Airservices’ Air Traffic Management Service Manager, to discuss how that could occur: FWC Decision at [57]-[58];

(b)    following the meeting, Mr Meyer prepared a document entitled “Application of Grey Days” and provided it to another Airservices manager, Mr Francis. After some amendment a settled document emerged which was provided by Mr Nugent to ATCs working in the Byron Group: FWC Decision at [60];

(c)    a further iteration of the document, entitled “Specifically for SM/SS’s - Usage and callout procedures for Grey/Stand-by shifts”, footnoted with the same date as the original version, 3 February 2017, contained an important addition being a “Special Note” qualifying that “Grey/Stand-by shifts” were not to be used in respect of “manufactured shifts”. The Special Note said:

Special Note: Without agreement, Grey/Stand-by is only required to cover the actual specific vacancy not any backfill arrangement. E.g. 1400-2300 call ins, Grey/Stand-by only required to cover 1400-2200 (2300 with agreement) thus you are not able to simply organise a change (COS) where you move the 1230-2130 into the vacant 1400-2300 with plans to use the Grey-Stand-by the backfill as the new vacancy has become a manufactured vacancy. However, prior to any change organised you can obtain agreement from the Greys/Stand-by person to do the alternate shift.

(d)    on or about 6 February 2017, grey day shifts were introduced into the Byron Group, but not into other groups within the Brisbane Tower or Brisbane Centre: FWC Decision at [63];

(e)    from about April 2018, Airservices considered that the Grey Day Guidelines were no longer relevant. By no later than 13 May 2018, Airservices walked away from the Guidelines when Phillip Bassingthwaite, an ATC Line Manager in Brisbane, emailed staff advising that he had deleted the Guidelines because they were “misleading and incorrect”: FWC Decision at [70];

(f)    there was ample evidence to the effect that employees did not like grey day roster arrangements, and they also foresaw significant fatigue, social and familial consequences from working on such rosters. It was entirely foreseeable that removing a restriction to the effect that grey day roster arrangements could be used to fill manufactured shifts was a matter upon which employees would have wished to express a view before a final decision was made and was also a matter that could potentially have fatigue, social or familial impacts: FWC Decision at [88];

(g)    the import of these findings, together with cl 8.3(b) of the EA considered in conjunction with cl 8.10, led to a finding that the opportunity for consultation afforded by those provisions was not given to employees in the Byron Group: FWC Decision at [88]; and

(h)    Airservices was required to comply with the consultation obligation in cll 8.3(b) and 8.10 of the EA before ceasing to apply the Guidelines in relation to the Byron Group and had failed to do so. Airservices was not though obliged to comply with the consultation obligation in cll 8.3(b) and 8.10 in relation to the Brisbane Tower Group (as the Guidelines did not apply to that group): FWC Decision at [87] and [90].

26    The FWC treated both iterations of the guidelines document, individually and collectively, as the relevant guidelines: FWC Decision at [64]-[65]. I have done the same, although I have named them the “Grey Day Guidelines”;

27    In relation to the alleged Status Quo Contravention, the FWC found as follows:

(a)    when Mr Bassingthwaite withdrew the Grey Day Guidelines from use on 13 May 2018 discussions ensued between the parties about that decision and what should be done. Civil Air claimed that in order to preserve the status quo the Guidelines should be reinstated while the dispute was progressed: FWC Decision at [110];

(b)    on 24 June 2018, Civil Air commenced a dispute on the subject and met with Airservices about its concerns on 27 June 2018. The meeting included Mr Nugent for Airservices, and Mr Irvine and Mr Walsh for Civil Air: FWC Decision at [111];

(c)    the participants disputed what was agreed at the meeting on 27 June 2018. Irrespective of what was discussed in the meeting, the Grey Day Guidelines were not reinstated: FWC Decision at [112]-[113];

(d)    on 5 July 2018, Civil Air wrote to Airservices formally raising the dispute, and it couched the dispute as being a failure by Airservices to comply with “the consultation requirements as outlined in clauses 8 and 18” of the EA. Civil Air asserted that the dispute came about because of Airservices’ unilateral decision “to withdraw the grey day guidelines, without consultation”: FWC Decision at [129]. Civil Air formally requested reinstatement of the Guidelines in accordance with cl 10.1(g) of the EA: FWC Decision at [114];

(e)    Airservices, as well as Mr Nugent, did not provide an adequate explanation about why, no later than 5 July 2018, the Grey Day Guidelines were not immediately reinstated until the wider dispute was resolved: FWC Decision at [130]; and

(f)    Civil Air had notified Airservices of a dispute within the meaning of cl 10 of the EA in relation to ceasing the use of the Guidelines in respect of the Byron Group (but not the Brisbane Tower Group). Airservices was required to comply with the obligation in cl 10.1(g) of the EA to maintain the status quo by reinstating the Guidelines in the Byron Group (but not the Brisbane Tower Group). Airservices failed to comply with cl 10.1(g) in relation to the Byron Group (but not the Brisbane Tower Group): FWC Decision at [132].

28    Thus the FWC found that Airservices breached cll 8 and 10 of the EA in respect of the Byron Group of ATCs in the manner alleged by Civil Air in this proceeding, and those findings are binding upon the parties.

29    For completeness I also note that Mr Nugent’s evidence before me establishes that, after receipt of Civil Air’s 5 July 2018 letter formally seeking reinstatement of the Guidelines, Mr Nugent attended the national Service Manager’s meeting that day, where the letter was discussed. The relevant minutes from that meeting are as follows:

Review of Civil Air letter re Consultation, change to rosters and stand-by rosters [grey days] - Anthony Nugent

• See handout [includes Civil Air Letter, past Grey Day guidelines etc]

• Guidelines never published as a formal document

• No intention to formally publish the Byron guidelines

• [Mr Nugent] has issue with Special note on page 5 of guidelines

• Return to status quo position which is as detailed in the FWC decision 2 August 2012

• Agreed - no action to be taken

30    Fleshed out, the minutes record the decision of the meeting that it was not necessary for Airservices to take any further action in relation to the Grey Day Guidelines because: (a) the Guidelines were not published as a formal document and there was no intention to do so; (b) Mr Nugent disagreed with the Special Note in the Guidelines (which provided that employees on a grey day roster could not be called in to fill a manufactured or consequential vacancy); and (c) in relation to Civil Air’s claim for reinstatement of the Guidelines, the status quo position was not the continued operation of the Guidelines but rather, was detailed in a decision of Fair Work Australia in 2012 in relation to a materially identical predecessor to cl 19.18 (the 2012 FWA Decision). Airservices’ position was that the 2012 FWA Decision held that Airservices was permitted to call in employees on a grey day shift to fill a manufactured or consequential vacancy.

31    After receiving advice from Airservices’ industrial officers and human resources department, Mr Nugent responded to Civil Air’s 5 July 2018 letter by letter dated 11 July 2018. It relevantly said:

The Fair Work decision is the status quo and rostering practices will be in accordance with that decision and the current EA.

In the event a formal Grey Days policy or procedure is developed in accordance with clause of [sic] 7.1 of the current EA, Airservices will ensure appropriate consultation occurs.

32    Having regard to the matters pleaded and admitted, by reason of the FWC’s findings, and, to a limited extent, by reference to the evidence adduced before me, I am satisfied that the alleged contraventions of s 50 of the FW Act are established.

WHETHER DECLARATIONS OF CONTRAVENTION SHOULD BE MADE

33    Civil Air seeks declarations of contravention of s 50 of the FW Act in the following terms:

1    By failing to consult with its Air Traffic Controller employees in the Byron Group prior to withdrawing from use a set of guidelines regulating the use of grey days in the Byron Group roster, Airservices failed to comply with cl 8 of the Airservices Australia (Air Traffic Control and Supporting Air Traffic Services) Enterprise Agreement 2017 -2020 and thereby contravened s 50 of the Fair Work Act 2009 (Cth) (FW Act) (the Consultation Contravention).

2    By failing to maintain the status quo by reinstating a set of guidelines regulating the use of grey days in the Byron Group Air Traffic Control roster after being notified by Civil Air of a dispute in relation to the withdrawal of those guidelines, Airservices failed to comply with cl 10.1(g) of the Airservices Australia (Air Traffic Control and Supporting Air Traffic Services) Enterprise Agreement 2017 -2020 and thereby contravened s 50 of the FW Act (the Status Quo Contravention).

Airservices’ submissions

34    Broadly, Airservices submits that the Court should not make the declarations of contravention Civil Air seeks because they are too general and lack precision; they do not show the full context in which the contraventions occurred including the breadth of the dispute between the parties; and they have no utility having regard to the considerations set out in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; 254 FCR 68 (ABCC v CFMEU) at [90]-[93] (Dowsett, Greenwood and Wigney JJ) and in Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union [2006] FCA 1730 (ACCC v CFMEU) at [6] (Nicholson J).

35    I accept that the dispute before the FWC was broader than the alleged contraventions now before the Court. Civil Air was unsuccessful on some of its claims before the FWC and on the claims on which it succeeded, its success was limited to the Byron Group only and did not include other groups of ATCs. The context which Airservices contends is missing from the proposed declarations includes that:

(a)    the genesis of the dispute was Civil Air’s claim that the Guidelines were consistent with cl 19.18 of the EA. Because that claim concerned the proper construction of cl 19.18, it went further than ATCs in the Byron Group; rather, it applied to ATCs wherever they were employed. The FWC did not accept Civil Air’s construction of the clause and found that on its proper construction, cl 19.18 did not mean that Airservices could only utilise an employee rostered on a grey day shift to fill a “direct” vacancy in a roster caused by the absence of an employee rostered to work. Instead, it permitted Airservices to utilise an employee rostered on a grey day shift to fill both direct and consequential vacancies in the roster (FWC Decision at [149]);

(b)    Civil Air’s claims that Airservices failed to consult before withdrawing the Guidelines, and that it failed to maintain the status quo by not reinstating the Guidelines, went further than the 18 ATCs in the Byron Group. Those claims were pressed in relation to all Brisbane-based operational groups, which covered more than 200 ATCs, or at least in relation to both the Byron Group and the Brisbane Tower Group. In relation to the Brisbane Tower Group, the FWC did not accept Civil Air’s claims in respect of an obligation to consult or in respect of a requirement to maintain the status quo by reinstating the Guidelines. It found that those obligations only applied in relation to the Byron Group (FWC Decision at [90] and [132]); and

(c)    Airservices refused Civil Air’s claims for consultation and for the reinstatement of the Guidelines in circumstances where it was or at least considered itself to be bound by the 2012 FWA Decision in relation to the construction of a materially identical predecessor to cl 19.18. It submits that the 2012 FWA Decision construed the predecessor to cl 19.18 consistently with Airservices’ proposed construction of cl 19.18, which construction was confirmed as correct by the FWC.

36    Based on that Airservices submits that the proposed declarations should not be made because they are shorn of the context in which the contraventions occurred. It argues that it would be very cumbersome to qualify the declarations in a way that properly contextualises the contraventions, and in those circumstances they should not be made.

37    Airservices also submits that the proposed declarations should not be made because the breaches of the EA have already been brought to the attention of the public and other relevant entities through the publication of the FWC Decision on the FWC website and on www.austlii.edu.au, and also through the publication of the jurisdiction judgment by this Court. It says that the FWC set out its findings including the findings of contravention of cll 8 and 10.1(g) of the EA in a manner that was accessible to the public and which puts those findings in their full context including: (a) the history of the matter including the 2012 FWA Decision; (b) that the FWC determined the construction of cl 19.18 in Airservices’ favour; (c) that the FWC found that the Guidelines were not “policies” of Airservices within the meaning of the EA; and (d) the particular circumstances of the contraventions, including their scope being restricted to the Byron Group, and their short duration. It says that all the proposed declarations add to that already written in the FWC Decision is that a person contravenes s 50 of the FW Act by contravening a term of an enterprise agreement, and that fact is readily apparent on the face of the section.

38    It contends that, in circumstances where the FWC Decision has already been published, and having regard to the fact that the proposed declarations do not disclose the full context in which the contraventions occurred, they:

(a)    are not an appropriate vehicle through which to record the Court’s disapproval of Airservices’ contravening conduct;

(b)    are not necessary to vindicate Civil Air’s claims of contravention;

(c)    will not assist anyone in carrying out duties under the FW Act, nor in clarifying the law, because they add nothing of substance to the terms of the FWC Decision;

(d)    will not inform employees of any “dangers” arising from Airservices’ conduct; and

(e)    will not operate to deter contraventions of the FW Act as all they do is summarise some of the findings in the FWC Decision.

39    Airservices further submits that as a matter of discretion and having regard to the broader context of the dispute resolution role performed by the FWC, the Court should not grant declaratory relief in situations such as the present where the FWC resolved the dispute as an arbitrator under the EA. It contends that the proposed declarations would introduce a level of formality and consequences quite foreign to the FWC performing its functions and exercising its powers in a manner that is “quick, informal and avoids unnecessary technicalities” (FW Act, s 577). For example, the FWC “may inform itself in relation to any matter before it in such a manner as it considers appropriate” (FW Act, s 590(1)); it is not bound by the rules of evidence and procedure (s 591) nor is it required to even conduct a hearing (s 593(1)); and the default position in a matter before the FWC is that a person cannot be legally represented without permission of the FWC (s 596). Airservices submits that a decision made in such a setting is not an appropriate basis for this Court to make declarations.

Consideration regarding declaratory relief

40    A grant of declaratory relief pursuant to s 545 of the FW Act and/or s 21 of the FCA is an exercise of discretion and such relief should not be allowed unless there is some utility in doing so: Australian Competition and Consumer Commission v MSY Technology Pty Ltd [2012] FCAFC 56; 201 FCR 378 at [35] (Greenwood, Logan and Yates JJ).

41    In Warrumunda Village Inc v Pryde [2001] FCA 61; 105 FCR 437 at [8] (Gray, Branson and North JJ) the Full Court said that the remedy of a declaration of right under s 21 of the FCA is:

…intended to state the rights of the parties with respect to a particular matter with precision, and in a binding way. The remedy of a declaration is not an appropriate way of recording in a summary form, conclusions reached by the Court in reasons for judgment. This is even more strongly the case when the conclusion is not one from which any right or liability necessarily flows.

42    The principles to be applied in determining whether to grant declaratory relief in a proceeding under the FW Act were summarised in ABCC v CFMEU at [90]-[93], where the Full Court said:

[90]    The fact that the parties have agreed that a declaration of contravention should be made does not relieve the Court of the obligation to satisfy itself that the making of the declaration is appropriate: Commonwealth v Director, FWBII at 489 [59]; Australian Competition and Consumer Commission v MSY Technology Pty Ltd No 2 [2011] FCA 382 at [7] (overturned by the Full Court in Australian Competition and Consumer Commission v MSY Technology Pty Ltd [2012] FCAFC 56; (2012) 201 FCR 378 on a separate issue). It is not the role of the Court to merely rubber stamp orders that are agreed as between a regulator and a person who has admitted contravening a public statute: Australian Securities and Investments Commission, in the matter of Chemeq Limited (ACN 009 135 264) v Chemeq Limited (ACN 009 135 264) [2006] FCA 936; (2006) 234 ALR 511 at 534-535 [100]; Commonwealth v Director, FWBII at 484 [31], 489 [48], 491 [58].

[91]    The facts necessary to support the declaration may be established by agreed facts (under s 191 of the Evidence Act 1995 (Cth)) and admissions: Minister for Environment, Heritage and the Arts v PGP Developments Pty Ltd (2010) 183 FCR 10.

[92]    The Court has a wide discretionary power to make declarations under s 21 of the Federal Court of Australia Act 1976 (Cth): Forster v Jododex Australia Pty Limited (1972) 127 CLR 421 at 437-438 (per Gibbs J, citing Russian Commercial and Industrial Bank v British Bank for Foreign Trade Limited [1921] 2 AC 438 at 448); Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89 at 99 (per Sheppard J). Before making a declaration, the Court should be satisfied that the question is real, not hypothetical or theoretical, that the applicant has a real interest in raising the issue, and that there is a proper contradictor: Forster at 437-438.

[93]    Declarations relating to contraventions of legislative provisions are likely to be appropriate where they serve to record the Court's disapproval of the contravening conduct, vindicate the regulator's claim that the respondent contravened the provisions, assist the regulator to carry out its duties, and deter other persons from contravening the provisions: Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union [2006] FCA 1730; (2007) ATPR 42-140 at [6], and the cases there cited; Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53 at [95].

43    The Full Court (at [93]) expressly approved the considerations set out in ACCC v CFMEU (at [6]) in which Nicholson J held that the declarations sought in that case were appropriate because they:

1.    are an appropriate vehicle to record the Court’s disapproval of the contravening conduct (Tobacco Institute of Australia Limited v Australian Federation of Consumer Organisations Inc (1993) 41 FCR 89 at 100; Australian Competition and Consumer Commission v Chen (2003) 132 FCR 309 at [36] (Chen 132 FCR));

2.    serve to vindicate the Commission’s claim that the respondents contravened the Act (Australian Competition and Consumer Commission v Goldy Motors (2000) 23 ATPR 41-801 at [34] (Goldy Motors 23 ATPR));

3.    are of some assistance to the Commission in the future in carrying out the duties which are conferred upon it by the Act (Goldy Motors 23 ATPR at [34]);

4.    are of assistance in clarifying the law (Goldy Motors 23 ATPR at [34]; Australian Competition and Consumer Commission v. Chaste Corporation Pty Ltd (in liq) [2005] FCA 1212 at [146]);

5.    may inform consumers of the dangers arising from a respondent’s contravening conduct (Chen 132 FCR at [48]); and

6.    may deter corporations from contravening the Act (Australian Competition and Consumer Commission v. Midland Brick Co Pty Ltd (2004) 207 ALR 329 at [22]).

44    Having regard to these principles I am satisfied that it is appropriate to make declarations of contravention broadly in line with those proposed by Civil Air.

45    First, Airservices’ written submission that the proposed declarations are too broad and lack precision can be speedily dealt with. That submission was based on the declaratory relief claimed in the originating application which said:

On the grounds stated in the Statement of Claim, the Applicant claims:

…

2    Pursuant to s 21 of the FCA Act and s 545 of the [FW] Act, a declaration that the Respondent has contravened s 50 of the [FW] Act by its contraventions of clause 8 of the Agreement.

3    Pursuant to s 21 of the FCA Act and s 545 of the [FW] Act, a declaration that the Respondent has contravened s 50 of the [FW] Act by its contraventions of clause 10 of the Agreement.

46    By the time of hearing, Civil Air had filed the proposed declarations in the detailed form set out at [33] above. In my view they are stated with sufficient precision and are not too broad.

47    Second, Airservices contends that the context in which the contraventions occurred includes that its breaches of cll 8 and 10.1(g), and thus its contraventions of s 50 of the FW Act, flowed from its (correct) understanding of its obligations under cl 19.18. The gist of this submission is that declarations should not be made because it enjoyed success before the FWC in relation to the primary issue in the dispute - the proper construction of cl 19.18 of the EA.

48    This contention eludes the point. Airservices’ obligation to consult with Byron Group ATCs before it withdrew the Guidelines, and its obligation to maintain the status quo by reinstating the Guidelines, arose irrespective of which party prevailed on the issue as to the proper construction of cl 19.18. Whatever the proper construction of that clause Airservices was obliged to comply with the obligation to consult and to maintain the status quo.

49    Third, Airservices submits that the proposed declaration in relation to the Consultation Contravention should not be made because it would be shorn of the context that:

(a)    Civil Air’s claim for consultation extended well beyond the Byron Group ATCs (who the FWC found were the only employees entitled to be consulted).

The contention that the claim for consultation extended well beyond the Byron Group ATCs is correct, but Airservices’ argument is misconceived. It was required to consult with ATCs before withdrawing the Guidelines. It is not really to the point that after Airservices had failed to comply with that obligation, Civil Air (wrongly) claimed an entitlement to consultation in relation a broader range of ATCs. By the time Civil Air made that claim Airservices had already breached its obligation to consult and its contravention of s 50 had already occurred; and

(b)    Airservices did not consult with Byron Group ATCs in circumstances where it was or at least considered itself bound by the 2012 FWA Decision.

This contention has no force because there is no evidence that Airservices failed to consult because it was or at least considered itself bound by the 2012 FWA Decision, and the FWC made no such finding. The FWC found that Mr Bassingthwaite withdrew the Guidelines no later than 13 May 2018 when he emailed staff advising that he had deleted the Guidelines as the document was “misleading and incorrect” (FWC Decision at [70]). Before me, Mr Nugent testified that Mr Bassingthwaite did so because they were “no longer fit for purpose due to several reasons”, including operational reasons such as “changes to the master roster”. I do not accept that the 2012 FWA Decision was material to the context in which the Consultation Contravention occurred.

50    Relatedly, Airservices contends that the declaration Civil Air seeks in relation to the Status Quo Contravention should not be made as it does not include the context that:

(a)    Civil Air’s demand for reinstatement of the Guidelines was in fact a demand for their reinstatement across all operational groups in Brisbane whereas they only applied to the Byron Group.

I am not persuaded that the breadth of Civil Air’s claim for reinstatement is material to the context in which this contravention occurred. It is correct that Civil Air sought reinstatement of the Guidelines to all Brisbane-based operational groups but Mr Nugent gave evidence that this made no difference to Airservices’ decision to refuse to reinstate them. He said that even if Civil Air had only sought reinstatement for Byron Group ATCs, Airservices would not have agreed to do so; and

(b)    Airservices did not reinstate the Guidelines in the Byron Group after being notified of the dispute because it was or at least considered itself bound by the 2012 FWA Decision not to do so.

I accept that the 2012 FWA Decision informed Airservices’ view that maintenance of the status quo did not require reinstatement of the Guidelines in the Byron Group. But, as the FWC found, Airservices was wrong in its view that the 2012 FWA Decision represented the status quo. Its misapprehension in this regard, however reasonable, does not lead to the conclusion that the declaration should not be made. In any event, as I later explain, the evidence shows that the 2012 FWA decision was just one of Airservices’ reasons for refusing to reinstate the Guidelines, and the reasonableness of its position should not be overstated.

51    In any event, I can see little merit in the contention that declarations should not be made unless they reveal the full context in which a contravention occurred. Airservices points to no authority in support of that argument and there is no rule or requirement that declarations must set out or summarise all of the surrounding context. Ordinarily the salient surrounding circumstances will be set out in reasons for judgment.

52    Fourth, the preconditions for declaratory relief referred to in Forster v Jododex Australia Pty Limited [1972] HCA 61; 127 CLR 421 at 437-438 (Gibbs J as his Honour then was) are made out:

(a)    there is a real question as to whether Airservices contravened s 50 of the FW Act by failing to consult with ATCs in the Byron Group prior to withdrawing the Grey Day Guidelines from use in that group, as required by cl 8 of the EA; and in failing to maintain the status quo by not reinstating the Guidelines for the Byron Group upon notification of the dispute, as required by cl. 10.1(g) of the EA;

(b)    Civil Air has an obvious interest in bringing the proceeding, as the industrial organisation representing the interests of ATCs employed by Airservices in the Byron Group; and

(c)    as the alleged contravenor of s 50, Airservices has an interest in opposing the relief, notwithstanding its admissions made subject to its contention that the Court lacks jurisdiction.

53    Fifth, I consider the proposed declarations have utility, as they:

(a)    are an appropriate vehicle to record the Court’s disapproval of the contravening conduct. The fact that Airservices’ breaches of the EA may have already been brought to the attention of the public through publication of the FWC Decision is not really to the point. The FWC had no power to make a finding of contravention of s 50 of the FW Act; to make declarations of contravention of s 50 of the FW Act in relation to Airservices’ breaches of the EA; nor to impose a pecuniary penalty on Airservices. Airservices’ submission fails to appreciate the difference between the proceeding in the FWC and this proceeding, which is not just an extension of what occurred in the FWC. The declarations will record this Court’s disapproval of the contravening conduct;

(b)    will vindicate Civil Air’s claims in this Court that Airservices contravened s 50 of the FW Act by its breaches of the EA;

(c)    will inform others, including other persons and organisations that deal with Airservices, of the nature of Airservices’ contravening conduct;

(d)    will make clear to the public and to other statutory agencies and persons subject to enterprise bargaining agreements of the harm caused by such contravening conduct: Australian Competition and Consumer Commission v Coles Supermarkets Australia Pty Ltd [2014] FCA 1405 at [78] (Gordon J); and

(e)    should, in conjunction with pecuniary penalties, operate to deter Airservices from a repetition of similar conduct, and deter other companies and organisations from similar conduct.

54    Sixth, I do not accept Airservices’ submission that the Court should not grant declaratory relief in circumstances where the FWC determined the dispute in a private arbitration, as that would introduce a level of formality and consequence which is foreign to the FWC performing its functions and exercising its powers in a manner that is “quick, informal and avoids unnecessary technicalities”: s 577 of the FW Act.

55    As I have said, the Court is satisfied to the requisite standard that Airservices contravened s 50 as alleged. Further, to the extent that finding is based in the FWC Decision, I reiterate my remarks in the jurisdiction judgment (at [116]-[117]), as follows:

… the parties agreed on the dispute resolution procedure in cl 10.1 of the EA and it was open to them to select an independent person other than the FWC to settle any disputes that arose, and to agree upon the processes that would be used in any arbitration. The parties chose the FWC and must have known that the FWC could inform itself in such manner as it considers appropriate (s 590(1)), and was not required to follow the rules of evidence and procedure (s 591). It is appropriate to infer that the parties understood and were content with the manner in which any dispute that arose would be determined by the FWC, and content that any finding would be final and binding subject to their right to appeal to the Full Bench.

Further, to the extent that by this contention Airservices seeks to insinuate that the FWC’s processes in the present case were somehow deficient, or that it did not receive procedural fairness, that must also be rejected. The Questions for Determination by the FWC were identified with precision, both parties were legally represented including by senior and junior counsel, evidence was adduced by way of witness statements provided in advance of the hearing and the witnesses were available for cross-examination. The FWC provided comprehensive reasons, and neither party appealed the result. In my view the parties enjoyed an abundance of procedural fairness.

56    I have made declarations of contravention in a form which broadly accords with those Civil Air seeks.

WHETHER A PECUNIARY PENALTY SHOULD BE ORDERED

57    Civil Air seeks the imposition of a pecuniary penalty under s 546 of the FW Act for each of the Consultation Contravention and the Status Quo Contravention. Section 546(1) provides that a court of competent jurisdiction, including this 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.” Section 50 is a civil remedy provision.

58    In Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (“Cardigan St Case”) [2018] FCA 957 at [48]-[54] Bromberg J usefully summarised the applicable principles under s 546(1) as follows:

[48]    Section 546(1) of the FW Act provides no express guidance in relation to the determination of an appropriate pecuniary penalty in respect of the contravention of a civil remedy provision under the FW Act. The section simply says that the Court may make an order imposing a pecuniary penalty the Court considers is appropriate.

[49]    However, the authorities provide substantial guidance. The purpose of a civil penalty is primarily, if not wholly, protective to promote the public interest in compliance: Commonwealth of Australia v Director of the Fair Work Building Industry Inspectorate (2015) 258 CLR 482 (the “Agreed Penalties Case”) at [54]-[55] (French CJ, Kiefel, Bell, Nettle and Gordon JJ). This objective is achieved by putting a price on contraventions 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 considerations: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113 (the “QLD Infrastructure Case”) at [98] (Dowsett, Greenwood and Wigney JJ).

[50]    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).

[51]    The fixing of a pecuniary penalty involves the identification and balancing of all the considerations relevant to the contravention and the circumstances of the respondent, and making a value judgment as to what is the appropriate penalty in light of the protective and deterrent purposes of a pecuniary penalty. This process has been described as an “instinctive synthesis” akin to that undertaken in criminal sentencing: Markarian v The Queen (2005) 228 CLR 357 at [51] (McHugh J); QLD Infrastructure Case at [100].

[52]    A non-exhaustive list of the considerations that may be relevant when fixing a pecuniary penalty is conveniently set out in the QLD Infrastructure Case, where the Full Court identified those 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:

[103]    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.

[104]    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.

[53]    In determining the appropriate penalty, the Court must also give consideration to the maximum penalty for the contravention. As the Full Court observed in the QLD Infrastructure Case at [106], there are at least three reasons for this: first, that the legislature has legislated for the maximum penalty as an expression of the legislature’s policy concerning the seriousness of the prescribed conduct; second, that it permits comparison between the case under consideration and the worst possible case (where the maximum penalty can be treated as the penalty appropriate for the worst possible case); and third, that the maximum penalty provides a “yardstick” which should be taken and balanced with all the other relevant factors.

[54]    While giving appropriate significance to the principle of deterrence, the amount of the penalty should also be proportionate to the contravention and should not be so high as to be oppressive: Trade Practices Commission v Stihl Chainsaws (Aust) Pty Ltd (1978) ATPR 40-091 (Smithers J) at 17,896; NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 293 (Burchett and Kiefel JJ); QLD Infrastructure Case at [107].

The course of conduct principle

59    Section 557 of the FW Act relevantly 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:

…

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

…

(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.

60    The common law course of conduct principle recognises that where there is a sufficient interrelationship between the legal and factual elements of the acts or omissions that constitute contraventions, the Court may, absent legislative direction, in its discretion, penalise the acts or omissions as a single course of conduct. The question as to whether contraventions should be treated as a single course of conduct involves consideration of all the circumstances of the case. The principle was explained in Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; 194 IR 461 (Middleton and Gordon JJ) at [47]:

What the single course of conduct principle recognises is that where there is an interrelationship between the legal and factual elements of two or more offences for which an offender has been charged, care must be taken to ensure that the offender is not punished twice for what is essentially the same criminality.

61    Airservices contends that there is a clear interrelationship between the legal and factual elements of the Consultation Contravention and the Status Quo Contravention, both of which flowed from Airservices’ belief that its obligations in respect of consultation and/or maintenance of the status quo were impacted by the 2012 FWA Decision. It argues that its contravening conduct should be grouped as a single course of conduct so as to ensure that it is not punished more than once for the same conduct.

62    This contention fails at the first hurdle. There is no evidence that the 2012 FWA Decision played any part in Mr Bassingthwaite’s failure to consult before he withdrew the Guidelines on 13 May 2018, and the FWC made no such finding. In oral submissions Senior Counsel for Airservices appeared to accept that.

63    Further, even if (contrary to my view) Airservices’ reliance on the 2012 FWA Decision was an element of the Consultation Contravention, I do not accept that s 557 or the common law course of conduct principle mean that the contraventions should be treated as one. The conduct in relation to the two contraventions is separate and distinct as it involved:

(a)    withdrawal of the Guidelines without first consulting with Byron Group ATCs, which decision was made by Mr Bassingthwaite no later than 13 May 2018; and

(b)    failure to maintain the status quo by refusing to reinstate the Guidelines, which decision was made at the national Service Manager’s meeting on 5 July 2018 and confirmed by Mr Nugent’s letter of 11 July 2018.

The Consultation Contravention was complete on 13 May 2018. The Status Quo Contravention commenced no later than 5 July 2018 and continued until 11 May 2019. The decisions were made about different matters, by different people, at different times and in different places.

64    Section 557 and the course of conduct principle have no application in the circumstances of the present case.

The maximum penalty

65    Section 546(2)(b) of the FW Act provides that if the contravenor is a body corporate, a pecuniary penalty must not be more than five times the maximum number of penalty units referred to in the relevant item in column 4 of the table at s 539(2). Item 4, column 4 of the table at s 539(2) provides that for a “serious contravention” of s 50, the maximum penalty is 600 penalty units; for all other contraventions, the maximum penalty is 60 penalty units. Under s 4AA of the Crimes Act 1914 (Cth), at all relevant times a penalty unit ordered to be paid for a contravention of a law of the Commonwealth is $210.

66    Section 557A of the FW Act provides that a contravention of a civil remedy provision is a “serious contravention” if the person knowingly contravened the provision and the conduct constituting the contravention was part of a systematic pattern of conduct. Civil Air did not contend that the contravening conduct in the present case met those requirements, and it is common ground that the maximum penalty in the present case is $63,000 per contravention ($210 x 60 penalty units x 5 times).

67    The “maximum penalty is not just a limit on power, it provides a statutory indication of the punishment for the worst type of case, by reference to which the assessment of the proportionate penalty for other offending can be made, according to the will of Parliament”: Pattinson v Australian Building and Construction Commissioner [2020] FCAFC 177; 299 IR 404 at [62] (Allsop CJ, White and Wigney JJ, with whom Besanko and Bromwich JJ agreed).

68    As the Full Court said in Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; 340 ALR 25 at [156] (Jagot, Yates and Bromwich JJ):

Care must be taken to ensure that the maximum penalty is not applied mechanically, instead of it being treated as one of a number of relevant factors, albeit an important one. Put another way, a contravention that is objectively in the mid-range of objective seriousness may not, for that reason alone, transpose into a penalty range somewhere in the middle between zero and the maximum penalty. Similarly, just because a contravention is towards either end of the spectrum of contraventions of its kind does not mean that the penalty must be towards the bottom or top of the range respectively. However, ordinarily there must be some reasonable relationship between the theoretical maximum and the final penalty imposed.

The parity principle

69    As I said in Australian Competition and Consumer Commission v SMS Global Pty Ltd [2011] FCA 855 at [80]:

Assessments of penalty in analogous cases may provide guidance to the Court to ensure equal treatment in similar circumstances, meeting the principle of equal justice. However, those cases show that the circumstances in different cases are rarely the same, which means that it is difficult to apply this principle, and when applied it is a guide only: Schneider Electric (Australia) Pty Ltd v Australian Competition and Consumer Commission (2003) 127 FCR 170 at [10]-[17] per Sackville J and [52]-[60] per Merkel J; Australian Competition and Consumer Commission v Universal Music Australia Pty Ltd (No 2) [2002] FCA 192; 201 ALR 618 at [17]; NW Frozen Foods at 295; and ACCC v Telstra at [210].

70    In Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; 260 FCR 68 at [69] Allsop CJ, Davies and Wigney JJ said:

There is little utility in reference to the other cases with different facts. One does not work back or forward from other more or less serious cases. One evaluates all the circumstances of the case at hand. Comparables may give some broad guidance.

71    In relation to this principle none of the authorities to which the Court was referred require particular consideration.

The totality principle

72    The Court must apply this principle to ensure that the total penalty does not exceed what is appropriate for the entirety of the contravening conduct. It operates as a final check to ensure that the aggregate penalty imposed for the conduct, when viewed collectively, is just and proportionate to the circumstances of the case: Mill v The Queen [1988] HCA 70; 166 CLR 59 at 63 (Wilson, Deane, Dawson, Toohey, Gaudron JJ); Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd [1997] FCA 450 at 40-41; 77 FCR 238 (Goldberg J).

The factors relevant to penalty

73    I consider the following factors to be relevant in the circumstances of the present case:

(a)    the importance of the rights in question;

(b)    the seriousness of the contravening conduct;

(c)    whether the contraventions arose out of the conduct of senior management;

(d)    the impact of the contravening conduct;

(e)    whether Airservices “took the odds”;

(f)    the duration of the contravening conduct;

(g)    the size and nature of Airservices;

(h)    whether Airservices has shown contrition or remorse;

(i)    whether Airservices has taken corrective or remedial action;

(j)    whether there has been similar previous contravening conduct by Airservices; and

(k)    the requirement for specific and general deterrence.

The importance of the rights in question

74    As Civil Air submits, there is a public interest in requiring adherence to an industrial bargain and the courts have long recognised the importance of ensuring that obligations in industrial bargains are vindicated and seen to be vindicated. In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (No 2) [2010] FCA 652 at [36]-[37] Logan J observed, and I respectfully agree:

…Parliament has recognised a public interest in requiring adherence to an industrial bargain. 

It is not hard to see why; the alternative is a form of industrial anarchy, where the strong, be it union or employer, may oppress the weak. It is vitally important in such a circumstance that an obligation created by Parliament to honour an industrial bargain is vindicated and seen to be vindicated. 

75    The purpose of an obligation for an employer to consult with employees before making workplace changes is to ensure that the employer substantively takes the views of its employees into account, and factors them into any decision. Affected employees are entitled to a genuine opportunity to influence a decision: Civil Air Operations Officers’ Association of Australia v Airservices Australia [2019] FCA 1542 (2019 Airservices Decision) at [40] (Mortimer J).

76    I have no difficulty in accepting Airservices’ contention that the circumstances of the failure to consult in QR Limited (No 2) are a far cry from the circumstances found by the FWC in the present case. That case concerned a failure to consult about redundancy and other major changes which involved “an historic and radical proposed change that [would] affect thousands and thousands of employees”: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited [2010] FCA 591; 268 ALR 514 at [154]. That is a different order of magnitude from a failure to consult in relation to a change to rostering guidelines, in which no one lost their job, and which affected only 18 ATCs.

77    But while the circumstances of the cases are self-evidently different, the underlying principle is not. Byron Group ATCs were entitled to a genuine opportunity to influence any decision as to whether to withdraw the Grey Day Guidelines and were entitled to that opportunity regardless of whether they were likely to be successful (see 2019 Airservices Decision at [22]). The right to consultation about a proposed workplace change is a valuable right (QR Limited at [44]) and, at least prima facie, Airservices’ failure to consult is a serious breach.

78    The same can be said of the importance of adhering to the bargain in the EA with respect to maintenance of the status quo while a dispute is on foot. I infer that the parties agreed to that term in the EA because it was likely to make the dispute resolution procedures more effective. The entitlement to maintenance of the status quo is important to the operation of those procedures and, at least prima facie, Airservices’ failure to maintain the status quo is a serious breach.

The seriousness of the contravening conduct

79    The FWC found (at [88]) that there was ample evidence before it:

…to the effect that employees not only did not like Grey Day roster arrangements, but they foresaw significant fatigue, social and familial consequences from working on Grey Day rosters. It is entirely foreseeable that removing a restriction to the effect that Grey Day roster arrangements could be used to fill Manufactured Shifts in other rosters would not only be matters upon which employees wish to express a view before a final decision was made but also one that potentially may have fatigue, social or familial impacts.

80    I consider Airservices’ failure to consult in the present case to be serious, albeit not rising to the level of a “serious contravention” under s 557A which would attract a substantially higher penalty. The decision to withdraw the Guidelines was deliberate in the sense that it was consciously made by Mr Bassingthwaite, a member of Airservices’ management team, and he did not provide an opportunity to consult when it was entirely foreseeable that Byron Group ATCs would want that opportunity. As a result ATCs lost the chance to seek to persuade Airservices not to withdraw the Guidelines. It cannot be known whether they would have been successful in such an attempt but it should be kept in mind that the Guidelines were themselves the result of consultation between Airservices and ATCs, which tends to show that agreement could be reached on matters relating to the use of grey day shifts.

81    The FWC’s findings also indicate that Airservices’ failure to maintain the status quo was serious although somewhat less so. The Guidelines had been in place for more than a year when they were unilaterally withdrawn. Airservices’ refusal to reinstate them was deliberate in the sense that the decision was consciously made at the national Service Manager’s meeting on 5 July 2018 (and confirmed by Mr Nugent in his letter of 11 July 2018), although there is nothing to show that Airservices deliberately breached the EA. As the FWC found, Byron Group ATCs were concerned about fatigue, social and familial impacts from working on grey day rosters; and had Airservices reinstated the Guidelines as the FWC found it was obliged to do, they would have had the benefit of the Guidelines for approximately a further 10 months until the FWC Decision was handed down on 11 April 2019. But, as I later explain, Civil Air did not establish that following the withdrawal of the Guidelines and the refusal to reinstate them, Byron Group ATCs experienced a material increase in being called in to work when rostered on grey day shifts.

82    I do not accept Airservices’ submission that the seriousness of the Consultation Contravention is mitigated because:

(a)    Civil Air’s claim for consultation extended well beyond those persons who were entitled to be consulted, being the ATCs in the Byron Group; and

(b)    the claim for consultation was rejected by Airservices in circumstances when it was or at least considered itself to be bound by the 2012 FWA Decision.

As I have said, Airservices was required to consult with ATCs in the Byron Group before withdrawing the Guidelines. It is not material to the seriousness of its breach that, after Airservices had failed to comply with that obligation, Civil Air (wrongly) claimed an entitlement to consultation in relation a broader range of ATCs. Nor does the evidence show that the 2012 FWA Decision played any part in Airservices’ failure to consult.

83    Relatedly, I do not accept Airservices’ submission that the seriousness of the Status Quo Contravention is mitigated because Civil Air’s claim for reinstatement of the status quo was in fact a demand for the reinstatement of the Guidelines across all operational groups in Brisbane, whereas they only applied to the Byron Group. As I have said, Mr Nugent gave evidence that even if Civil Air had said that it only sought reinstatement for the Byron Group, Airservices would not have agreed to do so.

84    There is, though, some merit in Airservices’ contention that the seriousness of the Status Quo Contravention is mitigated because its refusal to maintain the status quo occurred in the context that it was or considered itself to be bound by the 2012 FWA Decision. While that mitigates the seriousness of Airservices’ conduct, the innocence of its breach should not be overstated. The evidence shows that Airservices voluntarily agreed to apply the Guidelines in the Byron Group in February 2017, and then allowed those Guidelines to operate until it unilaterally withdrew them in May 2018. Civil Air repeatedly argued that maintenance of the status quo required reinstatement of the Guidelines. Given that the Guidelines were in place for over a year, the proposition that the status quo was not the continued operation of the Guidelines, but rather the operation of a predecessor to cl 19.18 as construed in the 2012 FWA Decision six years earlier, involved something of a leap. Airservices’ position was not obviously correct and the FWC ultimately found its conduct breached cl 10.1(g). In my view Airservices should be treated as having assumed a risk that its view was wrong.

85    Further, the evidence shows that the 2012 FWA Decision was just one of the reasons that Airservices refused to reinstate the Guidelines. The minutes of the National Service Manager’s meeting indicate that the reasons for refusing to reinstate the Guidelines were that they were not published as a formal Airservices’ document and it had no intention to formally publish them; Mr Nugent had an “issue” with the Special Note; and Airservices considered that the 2012 FWA Decision detailed the status quo position. In cross examination Mr Nugent said, at different points, that Airservices refused to reinstate the Guidelines because:

(a)    they were not fit for purpose, including that they no longer described the actual shift banks and patterns in the Byron Group;

(b)    they were not an official document, being just guidelines;

(c)    they were not a policy covered by the status quo obligation;

(d)    they were issued in error; and

(e)    more broadly, they, and particularly the Special Note, did not comply with the 2012 FWA Decision.

In relation to the reasons other than the 2012 FWA Decision, Airservices assumed a risk that its view was wrong, as the FWC ultimately found.

Whether the contraventions arose out of the conduct of senior management

86    In relation to the Consultation Contravention the relevant conduct was that of Mr Bassingthwaite, an ATC Line Manager, who was the Operations Room Manager in Brisbane at the relevant time. It is not clear whether he is a member of senior management.

87    In relation to the Status Quo Contravention, the decision to refuse to reinstate the Guidelines was made at the national Service Manager’s meeting on 5 July 2018, which included Mr Nugent. That was a decision by senior management.

The impact of the contravening conduct

88    As I said earlier, the right to consultation under cl 8 of the EA is important in and of itself. It gave Byron Group ATCs an entitlement to an opportunity to engage with Airservices about the proposed withdrawal of the Guidelines; and to persuade it that they should not be withdrawn. That entitlement was taken away from ATCs notwithstanding that it was eminently foreseeable that they would want to be consulted about any such proposal. The failure to provide that opportunity involved a serious breach of the EA.

89    Similarly, the right to maintenance of the status quo upon notification of a dispute is important in and of itself. In the present case Airservices’ failure to maintain the status quo meant that Byron Group ATCs lost the benefit of the Guidelines in the period from 5 July 2018 until the FWC Decision was handed down on 11 April 2019. That failure too involved a serious breach.

90    However, Civil Air’s contentions as to the impact of the contraventions go further than that. It contends that the serious impact of the withdrawal of the Guidelines can also be seen in a material increase in the number of ATCs called in to work when rostered on a grey day shift. In contrast, Airservices argues that there was minimal, if any, adverse impact on ATCs.

91    Civil Air has the burden of establishing that ATCs were materially adversely impacted in the way it contends.

92    I accept Mr Walsh’s evidence that while some ATCs like being rostered on a grey day shift, many do not. He said that the benefit of being rostered on a grey day shift is that it holds open the possibility that the ATC will not be called in to work but will nonetheless be credited for the time that they held themselves ready for work, and thus would be paid while staying at home and attending to other responsibilities. But he said, and I accept, that many ATCs do not like grey day shifts because such shifts are uncertain and can have a significant impact on the ATC, even if they are not called in for duty.

93    First, that is because grey day shifts do not allow ATCs to plan their day with any certainty as they are required to hold themselves ready for work for a period which is generally 16 hours (twice the length of the nominal grey day shift, which is usually 8 hours). This means that those with parental responsibilities cannot plan to perform any childcare responsibilities that day. Nor can they plan to do anything on a grey day shift that might mean that they become unable to attend for work within two hours of receiving the call to come into work, or become unfit for duty by, for example, engaging in heavy physical activity and becoming tired. Second, the requirement to hold themselves available for the relevant window of time can make managing rest and fatigue challenging. For example, where the nominal shift is 6am to 2pm, employees must prepare as though they may be required attend work at 6 am, which means they cannot drink alcohol the night before (to ensure that the have a 0.00 BAC) and must go to sleep at a time that means they are rested and ready for work at 6 am. Having done that, the employee might only be called in to start a shift as late as 2 pm, and therefore they would need to be fit and alert through to the conclusion of that shift at 10 pm. Mr Walsh said that being rostered on a grey day shift and having to prepare for a shift that is twice the length of the nominal shift is fatiguing.

94    In cross examination, Mr Walsh accepted that in the meeting with Mr Nugent on 27 June 2018, both he and Mr Irvine put the position that the Guidelines were consistent with cl 19.18 rather than providing an additional benefit. Based on that, Airservices submits that if Civil Air’s position was that the Guidelines did not provide any additional benefit to the terms of the EA then their withdrawal could not have had a materially adverse impact on ATCs.

95    I do not accept that submission. The fact that Civil Air previously argued that the requirements in the Guidelines were consistent with cl 19.18 of the EA does not show that their withdrawal had no impact. Having regard to the totality of the evidence I am satisfied that many Byron Group ATCs considered the Guidelines to be of benefit to them because the Special Note meant that when on grey day shifts they could not be called in to work to fill manufactured or consequential vacancies and because they considered that working on a grey day roster caused “fatigue, social or familial impacts” (FWC Decision at [88]). Even Mr Nugent said that he understood there would be some disharmony among ATCs because of their withdrawal.

96    I am not however persuaded that withdrawal of the Guidelines meant that there was a material increase in Byron Group ATCs being called in to work on a grey day shift. The evidence Civil Air relies upon for this contention has several deficiencies.

97    I accept Mr Irvine’s evidence that following the withdrawal of the Guidelines he received multiple complaints from ATCs, who were “vocal and upset” and complaining about being called in to work on grey days. I also accept Mr Walsh’s evidence that when he was working in the control room after the withdrawal of the Guidelines he saw a change in Airservices’ use of grey days in the Byron Group. On one occasion he witnessed the shift manager for the Byron Group utilising an ATC rostered on a grey day shift differently to the way employees were utilised when the Guidelines were in place. He also said that after the withdrawal of the Guidelines, he received multiple complaints from Byron Group ATCs about grey day shifts “being activated” to cover a consequential vacancy.

98    However, Mr Irvine’s and Mr Walsh’s evidence regarding complaints by Byron Group ATCs is hearsay and it was admitted subject to a ruling that it was not admissible to show the truth of the subject-matter of the complaints; that is, that the complaints had any substance or that grey day shifts were being used more often in order to fill manufactured or consequential vacancies. Mr Walsh’s evidence that he personally witnessed one ATC rostered on a grey day shift being called in to fill a manufactured vacancy following the withdrawal of the Guidelines is, though, in a different category.

99    If Civil Air wished to establish that, following withdrawal of the Guidelines, Byron Group ATCs on grey day shifts were called in to work more, including so as to fill manufactured or consequential vacancies, it would have been straightforward to call some of the affected ATCs as witnesses. It did not however adduce evidence from a single ATC to the effect that he or she was adversely affected by the withdrawal of the Grey Day Guidelines, or by the failure to reinstate them once the dispute was notified. It did not even identify an individual ATC working in the Byron Group during the relevant period who was adversely affected by the withdrawal of the Guidelines. That is a significant deficiency.

100    The deficiencies in Civil Air’s evidence fall to be considered in light of the evidence Airservices adduced. Mr Dawe is the head of Airservices’ Workforce Deployment Team, which prepared the rosters for all ATCs and firefighters nationally, and whose duties included managing his team in producing master rosters, populating rosters, and overseeing Airservices’ national electronic rostering system, Quintiq. He gave evidence which painted a quite different picture as to the impact of the withdrawal of the Guidelines on ATCs in the Byron Group. Relying on data extracted from the Quintiq database he testified that:

(a)    in the period immediately after the withdrawal of the Grey Day Guidelines on 13 May 2018, the proportion of days on which ATCs rostered to work a grey day shift were actually required to work on the day reduced;

(b)    in the period 13 May 2018 to 30 June 2018 (being the period immediately after withdrawal of the Guidelines), not a single day is identified as one in which the ATC rostered on a grey day shift was called in to cover a manufactured or consequential vacancy. The effect of his evidence is that, in the period between the withdrawal of the Guidelines on 13 May 2018 and the meeting on 27 June 2018 (in which Mr Irvine and Mr Walsh told Mr Nugent they were receiving complaints from ATCs about the withdrawal of the Guidelines), no employees were called in to work during a grey day shift to cover a manufactured or consequential vacancy; and

(c)    Airservices’ practice is not to use grey day shifts to cover absences that are known at the time the roster is posted, but rather to cover absences for something unknown at the time of fixing the roster, including a consequential vacancy.

Airservices relies on Mr Dawe’s evidence to argue that the withdrawal of the Guidelines and the refusal to reinstate them had little if any adverse impact on ATCs in the Byron Group.

101    Civil Air objected to the salient parts of Mr Dawe’s evidence on various grounds. Amongst other things, it argued that the relevant paragraphs of Mr Dawe’s first affidavit were inadmissible hearsay, on the basis that the Quintiq data on which Mr Dawe based his analysis were prior representations either of the person that entered the data or someone else. It argued that Mr Dawe’s evidence as to what the Quintiq data showed was opinion evidence and inadmissible under s 76(1) of the Evidence Act 1995 (Cth) (Evidence Act). It also contended that his opinions were not based on specialised knowledge, training or experience and it was therefore not admissible under s 79. In that regard it said that Mr Dawe failed to adequately explain the process by which data was extracted from Quintiq or how it was reviewed and summarised; he did not identify with any specificity what data he looked at, or the process of analysis or the basis upon which he drew his conclusions; and he did not annex all the material he analysed. Civil Air said that Mr Dawe did not sufficiently expose his reasoning process to enable an evaluation as to how he used his expertise to reach his opinion and it was therefore inadmissible, citing ASIC v Rich [2005] NSWSC 149; 190 FLR 242 at [289]-[291] (Austin J).

102    I did not accept Civil Air’s objections. I was satisfied that the information extracted in the Excel spreadsheet and in the three audit trails dated 19 May 2018, 11 June 2018 and 20 June 2018 tendered by Airservices, upon which Mr Dawe’s evidence was essentially based, had been extracted from the Quintiq database and to a limited extent other Airservices’ business records. I inferred that the relevant entries were made either by a person who had or might reasonably be supposed to have had personal knowledge as to why the relevant employee was called in for duty from a grey day shift or because the relevant entries were made on the basis of information directly or indirectly supplied by a person who had or might reasonably be supposed to have had personal knowledge of that: see s 69(2) of the Evidence Act. In my view the Excel spreadsheet and audit trails are an extract from or a summary of the relevant parts of Airservices’ business records, primarily the Quintiq database, and were admissible pursuant to s 48(1)(e) of the Evidence Act.

103    The data in the Excel spreadsheet is, though, of limited assistance unless it is explained, and I took the view that Mr Dawe’s evidence would assist the Court by doing so. Civil Air’s contention - that Mr Dawe did not properly explain the process by which data was extracted from Quintiq by him or someone else at his direction, nor how he reviewed and summarised it - was not without force; but, I concluded that on the basis of his training and experience working with the database and rostering ATCs, his opinion evidence was admissible under s 79.

104    It was relevant to my conclusion that Civil Air did not suffer any real unfairness. It had been provided with Mr Dawe’s evidence, and the Excel spreadsheet and audit trails, well in advance of trial. It had an opportunity to analyse that material and to seek access to the database by an independent expert. It also had an opportunity to call Byron Group ATCs to give evidence that, contrary to Mr Dawe’s analysis, following withdrawal of the Guidelines they were in fact called in more often to work when rostered on grey day shifts. It did not do so.

105    I decided to admit Mr Dawe’s evidence over Civil Air’s objections. Then, in cross examination, it became apparent that it was appropriate to give little weight Mr Dawe’s evidence because:

(a)    the Quintiq system does not capture, as a separate data point, whether a person who worked on a grey day shift was called in to fill a direct vacancy or a consequential vacancy. Establishing that required analysis of other data in Airservices’ business records. Mr Dawe said that he analysed the data for all relevant employees on all dates in the period 13 May 2018 to 30 June 2018; but, he only provided Civil Air and the Court with audit trails for three dates: 19 May 2018, 11 June 2018 and 20 June 2018. He accepted that Civil Air’s legal representatives were not given the opportunity to review the full scope of material that he considered in his analysis;

(b)    he did not undertake an analysis of when and in what circumstances an employee rostered on a grey day shift was called in to work during 2017, notwithstanding that a grey day roster was introduced in the Byron Group in February 2017. The earliest period that he analysed commenced on 5 February 2018, which only covered a relatively short period before the Guidelines were withdrawn in May 2018;

(c)    except for the period 13 May 2018 to 30 June 2018, his analysis of ATCs working on their rostered grey day shift did not distinguish between a “tactical change” (being a change made to the roster during the 45 day period commencing on its publication and ending on the first shift of the roster) which results in an ATC being taken off a grey day shift and allocated instead to a fixed shift; and an ATC rostered on a grey day shift being called in to work. Mr Dawe’s evidence was that tactical changes to the roster were common. At paragraph 13(b) of his first affidavit Mr Dawe stated that from 19 March 2018 to 12 May 2018, ATCs rostered on a grey day shift actually worked on the day 79% of the time. However, under cross examination he accepted that without further analysis it was not possible to say what proportion of the 79% were in fact days worked by ATCs who were originally rostered on a grey day shift but were re-allocated to a fixed shift in advance of the roster commencing due to a “tactical change”. That is, it was not possible to say how many of the 79% represented ATCs who were called in to work on a grey day shift because another ATC became unavailable for work. The same deficiency is true of Mr Dawe’s conclusions about the proportion of ATCs who were called in to work on a grey day shift during the later periods of time found in paragraphs 13(d) and (e) of his affidavit dated 20 April 2021; and

(d)    in cross examination, he accepted that his conclusion in respect of 19 May 2018, that the grey day was not utilised, was incorrect because the grey day shift had in fact been replaced with a different type of shift three days before the shift was due to commence. That is, he was wrong on one out of only three audit trails he relied on.

106    The result on this aspect of the evidence is that Civil Air did not establish that withdrawal of the Guidelines resulted in a material increase in Byron Group ATCs being called in to work when rostered on grey day shifts. Airservices’ evidence was also deficient, but it did not have to prove anything.

The duration of the contravening conduct

107    The duration of the Consultation Contravention was short. The FWC found (at [70]) that from “about April 2018”, Airservices considered the Grey Day Guidelines to be no longer relevant, and by no later than 13 May 2018 it walked away from them. That period is the window within which Airservices should have consulted with ATCs in the Byron Group before it decided to withdraw the Guidelines.

108    The duration of the Status Quo Contravention was longer. It ran from no later than 5 July 2018, when Civil Air formally requested reinstatement of the Guidelines, until publication of the FWC Decision on 11 April 2019. Airservices should have reinstated the Guidelines immediately following notification of the dispute but, it not having done so, it could (and should) have done so at any time up until 11 April 2019.

Whether Airservices “took the odds”

109    Civil Air submits that Airservices “took the odds”, in the sense discussed in in Universal Music Australia Pty Ltd v Australian Competition and Consumer Commission [2003] FCAFC 193; 131 FCR 529. In that case the Full Court (Wilcox, French (as his Honour then was) and Gyles JJ) considered an appeal from a decision in which the penalty imposed by the trial judge was at the bottom of the range, for reasons which included the trial judge’s view that: (a) the contravenor had obtained legal advice from its solicitors to the effect that the relevant conduct would not be a contravention of the Trade Practices Act 1974 (Cth) (TPA); (b) the legal advice was relevantly unqualified; and (c) the question as to whether the relevant conduct contravened the TPA was a most difficult one on which minds could differ and had not been previously agitated in a Court: see Universal Music at [306].

110    The Full Court emphatically rejected that approach and observed at [308] – [310]:

[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 (Trade Practices Commission v Carlton & United Breweries Ltd (1990) 24 FCR 332 at 540; J McPhee & Son (Aust) Pty Ltd v Australian Competition and Consumer Commission (2000) 172 ALR 532 at [184] to [185]; and Australian Competition and Consumer Commission v Simsmetal Ltd (2000) ATPR 41-764 at [16] to [21]. If a company ‘takes the odds’, it must expect serious consequences if it miscalculates. As was said by the Full Court in NW Frozen Foods Pty Ltd v ACCC 71 FCR 285 at 294-295:

‘The Court should not leave room for any impression of weakness in its resolve to impose penalties sufficient to ensure the deterrence, not only of the parties actually before it, but also of others who might be tempted to think that contravention would pay …’

111    Civil Air submits that, at the least, Airservices’ contravening conduct ran a serious risk of being in breach of the EA and consequently the FW Act. In relation to the Status Quo Contravention, it says that it repeatedly asked for reinstatement of the Guidelines, and argues that Airservices’ refusal to do so must have been done with an appreciation of the risk that it could be wrong. It says that Airservices must be treated as having “taken the odds” and it must suffer “serious consequences” for its miscalculation.

112    Airservices rejects that contention. It submits that the comments of the Full Court in Universal Music must be read as a whole and in context, and says that it is in a particular context – relating to anti-competitive conduct in contravention of Part IV of the TPA – that the Full Court referred to the principle that a company that “takes the odds” should expect serious consequences if it miscalculates. It says that, as explained by the Full Court, “the difficulty of detecting and proving contraventions of Pt IV of the [TPA] requires adequate penalties to be imposed when contravening conduct is detected and established”: Universal Music at [310], citing Trade Practices Commission v Carlton United Breweries Ltd [1990] FCA 357; 24 FCR 532 at 541 (Northrop J).

113    Airservices also argues that the present case is nothing like the kinds of cases referred to in Universal Music at [310]. It submits that its withdrawal of the Guidelines and its refusal to reinstate the Guidelines were not secret. It communicated its position on those issues to Civil Air at the time, it participated in a bona fide way in the FWC proceeding, and it was successful in relation to the construction of cl 19.18. It also says there was minimal, if any, impact on ATCs in the Byron Group and that there is nothing in the present case which warrants the “serious consequences” that Civil Air proposes.

114    I do not accept that the application of the Full Court’s remarks in Universal Music is as limited as Airservices submits. The Full Court was explicit at [308] – [310] that whether or not a party appreciates that there is a risk of its conduct contravening the TPA (and therefore whether or not it has made an assessment of the contravening nature of its conduct) is irrelevant or is of minimal weight in determining the penalty: see also Visy Paper Pty Ltd v Australian Competition and Consumer Commission [2005] FCAFC 236; 224 ALR 390 at [49] (Stone and Allsop JJ as his Honour then was). Nor is the application of the remarks in Universal Music limited only to the anti-competitive conduct provisions of the TPA (and now the ACL): see e.g. Construction, Forestry, Maritime, Mining and Energy Union v Hay Point Services Pty Ltd (No 3) [2021] FCA 282; 304 IR 85; Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd (No 2) [2018] FCA 480; United Firefighters Union of Australia v Country Fire Authority (No 2) [2017] FCA 1614.

115    In relation to the Consultation Contravention, Mr Nugent said that the Guidelines were withdrawn by Mr Bassingthwaite because he considered them “no longer fit for purpose due to several reasons”, including operational reasons such as “changes to the master roster”. There is no evidence that Mr Bassingthwaite was aware of the consultation obligation in cl 8 of the EA, nor that he obtained legal or other advice before he withdrew the Guidelines. However an ATC Line Manager in his position should have been aware of that obligation, and Airservices is not entitled to a discount on penalty because he did not know of the obligation (if that was the case). There is no evidence that Mr Bassingthwaite deliberately contravened the EA by withdrawing the Guidelines without consulting the Byron Group ATCs; but, the requirement for consultation was obvious, and it is appropriate to infer that Airservices took a risk that withdrawing the Guidelines without first consulting with affected ATCs would breach the EA.

116    In relation to the Status Quo Contravention, I accept that, in part, Airservices’ failure to maintain the status quo occurred because it was or considered itself to be bound by the 2012 FWA Decision. But as I have said, in circumstances where Airservices voluntarily agreed to introduce the Guidelines in February 2017, and permitted them to operate until May 2018, the proposition that the 2012 FWA Decision represented the status quo involved something of a leap and a risk that it might breach the EA. Similarly, to the extent that Airservices’ decision to refuse to reinstate the Guidelines was made on the basis that they were no longer fit for purpose, were not an official policy or procedure of Airservices, and/or were issued in error, that too involved a risk that it would breach the EA.

117    In this sense Airservices “took the odds” by refusing to reinstate the Guidelines. However, contrary to Civil Air’s submissions, it does not automatically follow that Airservices must suffer “serious consequences”. There is no such inflexible rule arising out of Universal Music at [308]-[310]. The assessment of an appropriate penalty is far more nuanced, and requires that all relevant circumstances be taken into account. Amongst other things, the fundamental purpose of a penalty is deterrence, both specific and general. Where conduct is undertaken believing it to be innocent, and the evidence shows that the contravenor, having been disabused of its belief, will not or is likely not to reoffend, specific deterrence will be of less significance: Flight Centre at [64].

Airservices’ size and nature

118    Airservices is an Australian government statutory authority and the national provider of air traffic control services. It operates two Air Traffic Service Centres, one at Brisbane and another at Melbourne. In addition to those centres, there are Terminal Control Centres in Perth and Sydney, and between 28-29 Air Traffic Control Towers based in major cities and regional centres: FWC Decision at [18]-[20]. Mr Walsh’s evidence shows that, at the relevant time, there were 200+ employees in the Brisbane Air Traffic Service Centre. I approach the question of penalty on the basis that Airservices is a large employer with substantial resources.

Whether Airservices has shown contrition or remorse

119    Civil Air submits that Airservices has shown no contrition or remorse. It says that Airservices “took the odds” on the contraventions and upon notification of the dispute it decided to refuse to reinstate the Guidelines. Then, following the FWC Decision, Airservices took no steps to remedy its failure to consult or its failure to maintain the status quo. It did not apologise to the ATCs in the Byron Group or acknowledge its failures, and it has taken no steps to demonstrate contrition or remorse in this proceeding.

120    Against that, Airservices contends that Civil Air’s submissions ignore both its reliance on the 2012 FWA Decision and the fact that the FWC Decision decided the central issue in the dispute, the construction of cl 19.18, in its favour. It argues that there was no cause for Airservices (or indeed Civil Air in relation to those parts of the dispute in which it was unsuccessful before the FWC) to express contrition or remorse once the FWC Decision was published. It says that both parties held reasonable views as to the construction of the relevant provisions of the EA, and as to the application of those provisions to the facts. The FWC determined those issues and there was no requirement that any further steps be taken.

121    There was in my view occasion for Airservices to apologise to affected ATCs in relation to the Consultation Contravention. The obligation to consult with them before withdrawing the Guidelines was obvious and it did not do so, thereby taking away a valuable employee entitlement. As I later explain, its failure occurred in circumstances where it was already facing a proceeding in this Court in which Civil Air sought imposition of a civil penalty for an alleged earlier failure to consult. The absence of contrition in relation to the Consultation Contravention is not an aggravating factor in terms of penalty, but it points to the need for specific deterrence.

122    I take a different view in relation to the Status Quo Contravention. Whether the 2012 FWA Decision or the continued implementation of the Guidelines represented the status quo was a question on which reasonable minds could differ. The FWC found that Airservices breached the obligation to maintain the status quo; but in my view Airservices’ belief was not unreasonable. The absence of any expression of contrition in relation to the Status Quo Contravention is not significant to penalty.

Whether Airservices has taken corrective or remedial action

123    In relation to the Consultation Contravention, Mr Nugent said that following the FWC Decision, management level discussions took place about Airservices being “very careful” to comply with its obligation to consult in the EA. Because Mr Nugent’s role changed within Airservices such that he was not involved in the relevant management group shortly thereafter, he did not know whether other specific steps had been taken by Airservices in response to the FWC Decision.

124    In relation to the Status Quo Contravention, Mr Nugent said that due to the change in his role he was not in a position to say whether any corrective action that had been taken by Airservices to avoid a repetition of conduct which would result in the status quo not being maintained upon notification of a dispute.

125    If Civil Air wished to establish that Airservices failed to take appropriate corrective or remedial action it had the onus and there is no cogent evidence on this issue. This factor is not significant in relation to penalty.

Whether there had been similar contravening conduct by the contravenor

126    The present case is the first time that Airservices has been found to have failed to maintain the status quo upon notification of a dispute as required under an enterprise agreement and thereby to have contravened s 50 of the FW Act. It is not however the first time it has been found to have breached an obligation to consult under an enterprise agreement and thereby to have contravened s 50.

127    The 2019 Airservices Decision (at [16]-[17]) shows that Airservices admitted that it “developed and implemented an annual leave program without consulting with employees in contravention of cl 36.8(b) of the 2012 [enterprise] Agreement”, and that it thereby contravened s 50 of the FW Act. On 20 September 2019, Mortimer J ordered Airservices to pay a pecuniary penalty for that contravention. The contravening conduct occurred in December 2015, and Civil Air filed the originating application seeking imposition of a penalty in late 2017. Thus, that case was on foot at the time the contravening conduct in the present case occurred.

128    At [31] Mortimer J described Airservices’ failure to consult as “a conscious decision” to ignore what Civil Air sought to draw to its attention and to press on, without consulting with the relevant employees, with its plan to require them to take their leave when Airservices wanted them to take it. Her Honour found that Airservices only addressed Civil Air’s complaint after it was too late to do anything about it.

129    Civil Air relies on this decision as cogent evidence of the need to impose a penalty which operates to deter Airservices from a repetition of similar conduct. Airservices contends that Civil Air’s reliance on the 2019 Airservices Decision is misplaced because it was handed down more than 12 months after the contravening conduct in this case and almost 6 months after the FWC Decision was published. It argues that its earlier breach cannot be considered to aggravate the contraventions under consideration here, and in any event, Airservices says that the particular circumstances of the present contraventions were not present when the earlier contraventions occurred.

130    I do not accept Airservices’ contentions. Of course, as King CJ (with whom Cox and Bollen JJ agreed) said in The Queen v McInerney (1986) 42 SASR 111 at 113, the effect of prior offences in relation to sentencing is more cogent if they have been the subject of conviction before the commission of the offending conduct being sentenced (the “immediate offence”), because in such circumstances the offender has committed the immediate offence notwithstanding the formal judgment in respect of the earlier offence and notwithstanding the warning which that conviction implied: see also Williams v Construction, Forestry Mining and Energy Union (No 2) [2009] FCA 548; 182 IR 327 at [28] (Jessup J). But it is established that offending conduct which occurred before the immediate offence, but which was not the subject of conviction until after the commission of the immediate offence, may still be relevant to sentence.

131    In McInerney at 111-112 King CJ explained:

[T]here is no rule of law which precludes a sentencing court from taking into account in an appropriate way and for appropriate purposes offences in respect of which there has been a conviction between the time of the offence for which the sentence is being imposed and the time of sentence, whether those offences have been committed before or after the current offence.

132    To similar effect Cox J concluded (at 121) that the sentencing court should “look at all relevant aspects of a defendant’s behaviour up to the time when he is sentenced”: see also Williams at [27]; Australian Building and Construction Commissioner v Menon [2020] FCA 1418 at [71]-[72] (White J).

133    Having regard to the authorities, the question of penalty in the present case falls to be decided in circumstances where: (a) this is not the first time Airservices has been found to have failed to consult with its employees as required under an enterprise agreement; and (b) the failure to consult occurred at a time when Airservices was already facing a proceeding seeking imposition of a civil penalty in relation to an alleged earlier failure to do so.

The requirement for specific and general deterrence

134    It is uncontroversial that deterrence, both specific and general, is the principal, and perhaps the only, object of penalties under s 546: Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Ors [2015] HCA 46; 258 CLR 482 at 506 [55] (French CJ, Kiefel (as her Honour then was), Bell, Nettle and Gordon JJ).

135    Airservices submits that in the circumstances of the present case there is no requirement for specific deterrence, in light of the fact that:

(a)    the contraventions “flowed from” Airservices’ withdrawal of the Guidelines which it (rightly) considered were inconsistent with cl 19.18 of the EA, in reliance upon the construction of a materially identical predecessor clause in the 2012 FWA Decision. It says that it was not acting in flagrant or reckless disregard for the terms of the EA; rather, it thought it was applying cl 19.18 in the way it had been told the clause was to be applied;

(b)    Civil Air’s claim for consultation extended to persons well beyond those who were entitled to be consulted;

(c)    Civil Air’s claim for maintenance of the status quo by reinstatement of the Guidelines also extended to persons well beyond those who were entitled to have the Guidelines reinstated;

(d)    Airservices rejected the claims for consultation and for maintenance of the status quo by reinstatement of the Guidelines in circumstances where it was or at least considered itself to be bound by the 2012 FWA Decision; and

(e)    there was minimal, if any, impact caused by the contravening conduct on ATCs in the Byron Group.

136    In relation to general deterrence, Airservices contends that the unusual circumstances of the case mean that this is not an appropriate case in which to fix a penalty so as to deter others from similar contravening conduct.

137    I do not accept Airservices’ submissions.

138    First, Airservices’ contention that the breaches found by the FWC “flowed from” its understanding of its obligations under cl 19.18 of the EA misunderstands the seriousness of its breaches of cll 8 and 10.1(g). Essentially it contends that its contraventions are somehow less serious because it was correct in relation to the construction of the clause which was the genesis of the dispute. That minimises the importance of the obligations under cll 8 and 10.1(g) which existed irrespective of which party prevailed on the construction question, and indicates that Airservices still fails to fully appreciate the importance of those obligations.

139    Second, there is no merit in Airservices’ submission that any requirement for specific deterrence in relation to the Consultation Contravention must be considered in the context that Civil Air’s claims for consultation went well beyond Byron Group ATCs, and that Airservices was or at least considered itself bound by the 2012 FWA Decision. As I have said:

(a)    Airservices’ contravention was a failure to consult with Byron Group ATCs before it withdrew the Guidelines and it is not material that after Airservices had failed to comply with that obligation Civil Air (wrongly) claimed an entitlement to consultation in relation a broader range of ATCs; and

(b)    there is no evidence that the 2012 FWA Decision was in any way material to Airservices’ failure to consult.

140    Third, Airservices’ submission - that the requirement for specific deterrence must be considered in the context that the impact of its failure to consult was minimal - is overstated. It can be accepted that its failure to consult affected only the 18 ATCs in the Byron Group, the window for any consultation to occur was short, and Civil Air did not establish that its unilateral withdrawal of the Guidelines had material adverse effects on the ATCs. But the importance of Airservices’ failure to consult was that the Byron Group ATCs considered the Guidelines to be valuable and (as the FWC found) they foresaw significant fatigue, social and familial consequences from working on grey day rosters. They had an entitlement to be consulted before the Guidelines were withdrawn and thus an opportunity to persuade Airservices to leave them in place. Had Airservices consulted as required under the EA, it would have been required to bring an open mind, capable of persuasion, to the process of consultation (QR Limited at [43]). Civil Air may have been able to persuade Airservices not to withdraw the Guidelines, which it should be recalled were introduced by agreement of the parties. The right to consultation is a valuable right in and of itself. Airservices’ continued failure to recognise this indicates a need to impose a penalty sufficient to deter it from a repetition of similar conduct.

141    Fourth, in relation to the Consultation Contravention, the need to impose a penalty sufficient to deter Airservices from repeating similar conduct is heightened because: (a) this is not first time Airservices has failed to consult with its employees as required under an enterprise agreement; and (b) its failure to consult occurred when it was already facing a proceeding in relation to an earlier alleged failure to do so. This also indicates a heightened need for a penalty sufficient to provide specific deterrence.

142    Fifth, there is little merit in Airservices’ submission that any requirement for specific deterrence in relation to the Status Quo Contravention must be considered in the context that Civil Air’s claims for reinstatement of the Guidelines went well beyond the Byron Group ATCs. The evidence shows that Civil Air’s claim for reinstatement across all Brisbane-based operational groups was not material to Airservices’ refusal to reinstate the Guidelines, and it would have refused to reinstate the Guidelines even if Civil Air’s claim was limited just to the Byron Group.

143    Sixth, I accept that Airservices had reasonable grounds for believing that it was bound by the 2012 FWA Decision, and that its belief was relevant to its refusal to reinstate the Guidelines so as to maintain the status quo. It is settled that an honest and reasonable belief may be a relevant mitigating or ameliorating factor in determining whether or not a penalty is to be imposed and, if so, the extent of the penalty imposed: Ostrowski v Palmer [2004] HCA 30; 218 CLR 493 at [2] (Gleeson CJ and Kirby J) and at [85] (Callinan and Heydon JJ); Flight Centre at [63]-[64]; SMEC Holdings Pty Ltd v Commissioner of the Australian Federal Police [2018] FCA 609 at [39] (Bromwich J); Hail Creek Coal at [15] (Rangiah J); Fair Work Ombudsman v Transpetrol TM AS [2019] FCA 400 at [128] (Rares J); Australian Building and Construction Commissioner v Powell (No 2) [2019] FCA 972 at [42] (Bromberg J).

144    It is though wrong to extrapolate from those cases a legal principle or rule that “if one reasonably misunderstands one’s liability position in circumstances that give rise to a civil penalty, one should be relieved of the penalty or one should receive a light penalty”: Flight Centre at [63]. The decisions of the Full Courts in Universal Music at [308]-[310] and Visy Paper at [49] show otherwise.

145    In my view it is appropriate to treat Airservices’ belief that it was bound by the 2012 FWA Decision as mitigating the requirement for specific deterrence in relation to the Status Quo Contravention, but not entirely removing it. To the extent that Airservices refused to reinstate the Guidelines believing that decision to be compliant with the EA, and that it is now unlikely to engage in a repetition of similar conduct, the requirement for specific deterrence is not significant. But, as I have explained, the evidence shows that the 2012 FWA Decision was just one of the reasons for Airservices’ refusal to reinstate the Guidelines, and their conclusion that the 2012 FWA Decision represented the status quo involved a leap. Either way Airservices took a risk that its conduct would contravene the EA (as the FWC subsequently found). There remains a need to fix a penalty which operates to deter Airservices from a repetition of similar conduct.

146    Seventh, I can see no merit in Airservices’ submission that the “unusual circumstances” of its failure to consult mean that it is not an appropriate vehicle for general deterrence. The asserted unusual circumstances are that:

(a)    Airservices’ failure to consult flowed from its withdrawal of Guidelines which it (rightly) considered were inconsistent with the terms of the EA;

(b)    Civil Air’s claim for consultation extended well beyond those persons who were entitled to be consulted;

(c)    Airservices rejected the claim for consultation in circumstances where it was or at least considered itself to be bound by the 2012 FWA Decision; and

(d)    the impact of its failure to consult was minimal, or non-existent.

147    For the reasons previously explained there is little force in these contentions. There is little that is unusual about an employer failing to consult with its employees notwithstanding a requirement to do so in an award or enterprise agreement. The cases show that it is not at all uncommon. Nor were Airservices’ circumstances as unusual as it asserts. As I have said:

(a)    while the genesis of the dispute was the construction of cl 19.18, Airservices’ obligation to consult arose irrespective of which party was correct as to the construction of that clause;

(b)    Airservices’ failure to consult with Byron Group ATCs before it withdrew the Guidelines constitutes the breach of cl 8. It is not to the point that after the breach had already occurred Civil Air (wrongly) asserted that Airservices had an obligation to consult with a broader group of ATCs than just those in the Byron Group;

(c)    the evidence does not support Airservices’ contention that its rejection of Civil Air’s claim for consultation was because it was or considered itself to be bound by the 2012 FWA Decision. There is nothing to show that the 2012 FWA Decision played any part in Mr Bassingthwaite’s decision to withdraw the Guidelines without consultation; and

(d)    it can be accepted that Airservices’ failure to consult directly affected only the 18 ATCs in the Byron Group, that the window for consultation was short, and that Civil Air did not establish that the withdrawal of the Guidelines had material adverse effects on them. But that does not lead to a conclusion that the present case is not a suitable vehicle to deter others from similar conduct. The significance of Airservices’ failure to consult is that it took away the Byron Group ATCs’ entitlement to an opportunity to persuade it not to withdraw the Guidelines, which entitlement was valuable in and of itself.

148    The importance of the right to consultation, the obviousness of the breach, the fact that the requirement to consult is a regular feature of enterprise agreements, and the fact that breaches of such clauses are not uncommon, indicate a need for the penalty to be sufficient to deter other employers from similar contravening conduct.

149    Eighth, I accept that - to the extent that Airservices’ refusal to reinstate the Guidelines occurred because it considered itself bound by the 2012 FWA Decision - the requirement for general deterrence is not a significant factor. But, as I have said, the 2012 FWA Decision was just one of the reasons for Airservices’ refusal. It took a view as to what constituted the status quo, which the FWC found to be erroneous. A requirement for the parties to maintain the status quo while dispute resolution procedures are on foot is a regular feature of enterprise agreements, and the penalty should be sufficient to deter other employers from similar contravening conduct.

Determination regarding penalty

150    Section 546 of the FW Act empowers the Court to order a person to pay a pecuniary penalty in the amount that the Court considers to be appropriate, if the Court is satisfied that the person has contravened a civil remedy provision. I am satisfied as to the contravention, and having regard to the various considerations set out above, I am satisfied that it is appropriate to impose a pecuniary penalty in relation to both contraventions.

151    In relation to the nature of the assessment task, including the role of the maximum penalty, I adopt my remarks in Australian Competition and Consumer Commission v Optus Mobile Pty Limited [2019] FCA 106 at [28] - [30]. It was put more succinctly (and better) by the Full Court in Flight Centre at [55]:

[T]he task is one that is evaluative, taking into account all the circumstances of the case, not to be reached mechanically or by some illusory process of exactitude, but rather by evaluation that is articulated to a point (but no further) that is useful and meaningful. One starts the process by giving proper weight to the statutory maximum as referable to the most serious kind of contravention.

152    The maximum penalty under s 546 for each contravention in the present case is $63,000. Civil Air seeks imposition of a high to mid-range penalty, being 55% to 65% of the maximum for each contravention; totalling between $34,650 - $40,950 per contravention.

153    I have taken into account Airservices’ contentions, including:

(a)    as to the all the surrounding circumstances;

(b)    that its conduct was not covert and its breaches were not surreptitious;

(c)    that the evidence does not establish that the withdrawal of the Guidelines and its refusal to reinstate them caused Byron Group ATCs to suffer material adverse effects;

(d)    that its refusal to reinstate the Guidelines occurred because it was or considered itself bound by the 2012 FWA Decision; and

(e)    that it has expended substantial costs and resources in defending this proceeding.

I cannot though accept its contention that any penalty should be minimal or at the bottom of the range.

The Consultation Contravention

154    The decision to withdraw the Guidelines without consulting with ATCs in the Byron Group was deliberate, unilateral and made at a management level. Mr Bassingthwaite ought to have known of the obligation to consult under cl 8, and it should have been clear that unless Airservices consulted with affected ATCs before withdrawing the Guidelines it would be in breach of that clause. While there is nothing to show that, in withdrawing the Guidelines, Mr Bassingthwaite intended to breach the obligation to consult, in my view Airservices should, at least, be treated as having taken that risk.

155    By failing to consult before withdrawing the Guidelines, Airservices took away an important right from ATCs in the Byron Group: an entitlement to an opportunity to seek to persuade Airservices not to withdraw the Guidelines in circumstances where it was entirely foreseeable that ATCs would wish to be consulted. There is a public interest in industrial agreements being vindicated and being seen to be vindicated. Airservices’ failure to consult involved a serious breach of cl 8 of the EA, and thus of s 50 of the FW Act.

156    Fundamentally, the decision to impose the penalty that I have is because there is a need to impose a penalty sufficient to deter Airservices from again breaching its obligation to consult. It is a large and well-resourced statutory corporation and the penalty imposed must be sufficient to ensure that it does not see such conduct as merely a cost of doing business. It is relevant too that the contravening conduct occurred in circumstances where, (a) it was entirely foreseeable that ATCs would wish to be consulted before withdrawal of the Guidelines; (b) Mr Bassingthwaite should have been aware of the obligation to consult; (c) Airservices continues to show insufficient appreciation of the seriousness of its failure to consult; (d) this is not the first time Airservices has breached its obligation to consult under an enterprise agreement; and (e) the present failure to consult occurred when Airservices was already facing a civil penalty application for an earlier alleged failure to do so.

157    There is also a need to impose a penalty sufficient to deter other employers from similar contravening conduct. It is not uncommon for employers to fail to consult with their employees about proposed workplace changes notwithstanding a requirement to do so in an award or enterprise agreement, and there is little substance in the “unusual circumstances” Airservices asserts.

158    Having regard to the maximum penalty of $63,000 and particularly the requirement for specific and general deterrence, I gave consideration to imposing a penalty higher than the range sought by Civil Air, but in the finish I am satisfied that a penalty of $40,950 is appropriate, representing 65% of the maximum.

The Status Quo Contravention

159    The decision to refuse to reinstate the Guidelines so as to maintain the status quo was a conscious decision of senior management. The evidence shows that attendees at the national Service Manager’s meeting, including Mr Nugent, were aware of the obligation under cl 10.1(g) and the FWC found that Airservices failed to comply with it. There is, however, nothing to show that Airservices deliberately contravened that obligation. Airservices understood the obligation but took an erroneous view of what was required to satisfy it.

160    Byron Group ATCs saw the Guidelines as providing them with a valuable benefit, and (as the FWC found) they foresaw significant fatigue, social and familial consequences from working on grey day rosters. By refusing to reinstate the Guidelines Airservices took away their benefit for the approximately 10 month period that the dispute was on foot, although I note that Civil Air did not establish that Byron Group ATCs suffered material adverse effects as a result. Airservices’ refusal to reinstate the Guidelines involved a serious breach. Again, there is a public interest in industrial agreements being vindicated and being seen to be vindicated.

161    To the extent that this contravention was based in Airservices’ view that it was bound by the 2012 FWA Decision, a need for specific and general deterrence is not a significant factor; but, as I have said, that was only one of the Airservices’ reasons. Airservices took a view as to the status quo which the FWC subsequently found to be erroneous, and in my opinion it took a risk that its conduct would breach the EA. The innocence of its contravening conduct should not be overstated. There remains a requirement to satisfy those fundamental objectives of the civil penalty regime, and a need to fix a penalty which is sufficient to deter Airservices from a repetition of similar conduct. In circumstances where such clauses are a regular feature of enterprise agreements and they are aimed at assisting dispute resolution, the penalty should also be sufficient to deter other employers from engaging in similar conduct.

162    In the circumstances, having regard to the maximum penalty of $63,000, and in particular the requirement for specific and general deterrence, I consider a penalty of $31,500 is appropriate, representing 50% of the maximum. That is slightly less than the bottom of the range proposed by Civil Air.

163    Standing back and considering the total penalty of $72,450 I am satisfied that the aggregate penalty is just and proportionate to the contravening conduct and the surrounding circumstances.

Whether the pecuniary penalty should be paid to Civil Air

164    Section 546(3) of the FW Act empowers the Court to order that a pecuniary penalty, or a part of the penalty, be paid to a particular organisation or person. Civil Air seeks an order that any pecuniary penalties imposed in the present case be paid to it.

165    Airservices submits that, similarly to the position in Actrol Parts Pty Ltd v Coppi (No 3) [2015] VSC 758; 49 VR 573 at [99] and [114] (Bell J), Civil Air should not be found to be the successful party and any penalties ordered should not be payable to it.

166    That submission has no force. Civil Air was successful in this proceeding and the discretion under s 546(3) is ordinarily to be exercised by awarding any penalty to the successful applicant; that being the “usual order”: Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4; 239 FCR 336 at [101] (Tracey, Barker and Katzmann JJ). Airservices identifies nothing that would operate to displace the “usual order” or otherwise persuade me that it is inappropriate to order that the penalties imposed be paid to Civil Air.

Conclusion

167    I have made the attached declarations and orders for pecuniary penalties.

Associate:

Dated:    20 August 2021