Federal Court of Australia
Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The DoubleTree Hilton Case) [2021] FCA 1468
ORDERS
AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER Applicant | ||
AND: | CONSTRUCTION FORESTRY MARITIME MINING AND ENERGY UNION Third Respondent | |
DATE OF ORDER: |
THE COURT DECLARES THAT:
A. On 15 February 2019, the respondent (CFMMEU) contravened s 500 of the Fair Work Act 2009 (Cth) (FW Act), by operation of s 550 and s 793 of the FW Act, by Mr John Windus and Mr Stephen Parker, being officials of the CFMMEU and holders of entry permits under s 512 of the FW Act, acting improperly in exercising or seeking to exercise rights of entry under Pt 3-4 of the FW Act at the DoubleTree Hilton hotel project located at Barrack Square in Perth, Western Australia.
THE COURT ORDERS THAT:
1. The CFMMEU pay a pecuniary penalty of $23,000 in respect of the declared contravention.
2. The pecuniary penalty be paid to the Commonwealth of Australia within 28 days.
3. There be no order as to costs.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
MCKERRACHER J:
1 The third respondent (CFMMEU) admits to a contravention of s 500 of the Fair Work Act 2009 (Cth) (FW Act) by reason of the conduct of the former first respondent (Mr Windus) and the former second respondent (Mr Parker) on 15 February 2019, as set out in a Statement of Agreed Facts and Admissions (SAFA) signed by the applicant (the Commissioner) and the CFMMEU dated 20 September 2021. On 9 September 2021, the proceedings were discontinued against Mr Windus and Mr Parker with no order as to costs.
2 The contravention arose at the construction site of the 18-storey DoubleTree Hilton hotel situated at Barrack Square, Perth, Western Australia (the Site). At the relevant time, SKS Builders Pty Ltd was the principal contractor and occupier of the Site.
3 The Commissioner seeks the following orders, as well as a declaration in a form agreed to by the parties and the imposition of an appropriate penalty on the CFMMEU for the admitted contravention:
1. The CFMMEU pay a pecuniary penalty of [an amount to be assessed by the Court] in respect of the declared contravention.
2. The pecuniary penalty be paid to the Commonwealth of Australia within 28 days.
3. There be no order as to costs.
4 The only significant area of dispute between the parties concerns the extent to which the CFMMEU’s long history of non-compliance with industrial laws should elevate what is agreed by both parties to be a ‘low range’ contravention, so as to warrant a higher penalty. The Commissioner contends that the history of prior contraventions is so significant as to demand the imposition of a penalty in the ‘high range’, though no dollar figure or percentage by reference to the maximum amount was proffered. The CFMMEU, by contrast, contends that there is no basis to increase the penalty beyond the ‘low range’ in the circumstances of this case. Indeed, it says that the Commissioner’s approach would lead to a penalty that is disproportionate to the seriousness of the instant contravention and would amount to a re-penalisation of the CFMMEU for its past contraventions. The CFMMEU submits that a penalty in the range of 25% to 30% of the maximum would be appropriate in this case, having regard to the relative seriousness of the contravention in the context of the Union’s prior contraventions and the other relevant factors.
NATURE AND CIRCUMSTANCES OF THE CONTRAVENTION
5 The Commissioner relies on the following matters which are agreed.
6 On 15 February 2019, at approximately 11:25 am, Messrs Windus and Parker attended and entered the Site, and in doing so, were exercising, or seeking to exercise, rights in accordance with Pt 3-4 of the FW Act.
7 After Messrs Windus and Parker signed into the Site’s sign-in register, they were attended to by Mr Thayalan Krishnan, SKS’s Site Safety Supervisor, who asked that Messrs Windus and Parker follow him to the scaffolding area at the Site (given that Mr Windus had identified the scaffolding as an issue of concern).
8 Messrs Windus and Parker did not acknowledge or comply with the requests from Mr Krishnan. Instead of following Mr Krishnan, they continued in the opposite direction to the direction from that in which Mr Krishnan had requested them to walk.
9 Mr Windus gestured to materials on the floor of the Site and had an exchange with Mr Krishnan, in the presence of Mr Parker, to the following effect:
[Mr] Windus “How do you expect workers to access this area with all these trip hazards?”
“This is on the walk way, do some housekeeping.”
[Mr] Krishnan “This is not a walk way but I will clean it up once my boys come back from lunch. This is a contractor’s materials.”
Dissatisfied with this response, in a raised voice [Mr] Windus insisted:
“You pick this up or I’ll stand here all day.”
This rankled [Mr] Krishnan, who responded in a raised voice:
“I’m not meant to do this, I’ll get my boys to pick it up when they get back from lunch and some are on traffic duty.”
10 Mr Windus then made further complaint to Mr Krishnan about the materials on the floor of the Site and in doing so made a reference to the ‘third world’.
11 The CFMMEU admits that on 15 February 2019, both Messrs Windus and Parker acted in an improper manner by not complying with Mr Krishnan’s reasonable requests, and Mr Windus also acted in an improper manner by acting unreasonably and disrespectfully in raising his voice in the exchange with Mr Krishnan, by being insensitive and inconsiderate to Mr Krishnan in making a reference to the ‘third world’, which was interpreted as a racist slur, and by using foul language in Mr Krishnan’s presence.
12 The CFMMEU admits that this conduct of Messrs Windus and Parker constituted a contravention of s 500 of the FW Act. That section provides:
A permit holder exercising, or seeking to exercise, rights in accordance with this Part must not intentionally hinder or obstruct any person, or otherwise act in an improper manner.
(Emphasis added.)
13 As the emphasis in the above extract from s 500 indicates, the admitted contravention is that Messrs Windus and Parker acted ‘in an improper manner’ whilst exercising a right of entry under Pt 3-4 of the FW Act.
14 The CFMMEU admits it has contravened s 500 by reason of being a person involved in the s 500 contraventions of Messrs Windus and Parker by operation of s 550 of the FW Act. Notwithstanding that primary liability under s 500 can only fix on an individual ‘permit holder’, another person (including a body corporate such as a registered organization), can be accessorily liable as a ‘person involved’ in the permit holder’s contravention by operation of s 550 of the FW Act: Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Bruce Highway Caloundra to Sunshine Upgrade Case) [2020] FCAFC 203; (2020) 281 FCR 365 (at [42] and [51]-[53]).
15 By reason of the operation of s 793(1) and s 793(2) of the FW Act, the conduct and knowledge of Messrs Windus and Parker is attributed to the CFMMEU. The CFMMEU is therefore taken to have:
(a) participated in the contravention; and
(b) held the knowledge of the essential elements that make up that contravention.
16 The CFMMEU was thereby a person ‘involved in’ the improper conduct that constituted the contravention of s 500 of the FW Act within the meaning of s 550(2)(a) or 550(2)(c) of the FW Act. Therefore, as the CFMMEU admits, the CFMMEU is taken to have contravened s 500 of the FW Act.
GENERAL PRINCIPLES FOR ASSESSING PENALTY
17 Section 546(1) of the FW Act contains the Court’s power to impose pecuniary penalties for contraventions of the FW Act where the Court considers it is appropriate to do so. This power is discretionary. Submissions from the parties have been comprehensive.
18 As the Commissioner notes, the principal, and possibly only, legitimate purpose of a pecuniary penalty order under s 546 of the FW Act is the protective purpose of ‘promoting the public interest in compliance’, or in other words deterrence: see Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 258 CLR 482 (the Agreed Penalty Case) (at [55]). That purpose is ‘to put a price on contravention that is sufficiently high to deter repetition by the contravener and by others who might be tempted to contravene the Act’: Trade Practices Commission v CSR Ltd [1990] FCA 521; [1991] ATPR 41-076 (at [40]), cited with approval in the Agreed Penalty Case (at [55]), and in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3; (2018) 262 CLR 157 per Kiefel CJ (at [42]) and Keane, Nettle and Gordon JJ (at [116]). The quantum of the penalty must be such that it is not regarded by the contravener or others as ‘an acceptable cost of doing business’: Singtel Optus Pty Ltd v Australian Competition and Consumer Commission [2012] FCAFC 20; (2012) 287 ALR 249 (at [62]-[63]), cited with approval in Australian Competition and Consumer Commission v TPG Internet Pty Ltd [2013] HCA 54; (2013) 250 CLR 640 (at [66]). An aspect of the protective purpose, or aligned with it, is ‘the need to sustain public confidence in the statutory regime which imposes the obligations’: Australian Ophthalmic Supplies v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560 (at [91]). It is appropriate for the Court to receive submissions from the Commissioner (and the CFMMEU) about the appropriate penalty: Agreed Penalty Case (at [60]).
19 The Court’s task is to determine what penalty (if any) is ‘appropriate’ with a view to the protective purpose identified above. This must be done by reference to all the relevant circumstances of the case: see, for example, Australian Ophthalmic Supplies per Gray J (at [12]) and Buchanan J (at [91]); Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The College Crescent Case) [2020] FCA 757; (2020) 295 IR 446 (at [33]). Those circumstances can be categorised broadly as relating to the objective nature and seriousness of the offending conduct, and the particular circumstances of the contravener: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; (2017) 254 FCR 68 (the Queensland Infrastructure Case) (at [102]). Various factors have been recognised in previous decisions as relevant to assessing an appropriate penalty: see, for example, Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) [2018] FCAFC 97; (2018) 264 FCR 155 (at [20]) and Queensland Infrastructure Case (at [102]-[104]). Such factors ought not be treated as a rigid or exhaustive catalogue and do not substitute for identifying and balancing all relevant considerations in the particular case before the Court: Australian Ophthalmic Supplies (at [91]).
20 Regard must also necessarily be had to the maximum penalty, such that there should ordinarily be ‘some reasonable relationship between the theoretical maximum and the final penalty imposed’ having regard to the objective seriousness of the contravention in question: Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181; (2016) 340 ALR 25 (at [154]-[156]), cited with approval in The Non-Indemnification Personal Payment Case (at [26]). For a contravention of s 500, the maximum penalty is 60 penalty units: s 539(2), Item 25, of the FW Act. The pecuniary penalty for a body corporate must not exceed five times the maximum number of penalty units referred to in s 539(2) for the relevant civil remedy provision: s 546(2) of the FW Act. At the time of the contravention (15 February 2019), one penalty unit was equal to $210: s 4AA of the Crimes Act 1914 (Cth). Accordingly, the maximum penalty applicable to the present contravention is 300 penalty units, which is $63,000.
21 When considering the relative seriousness of the contravening conduct, it is important to recognise that, in granting rights of entry under the FW Act, it is evident that the legislature has sought to balance the interests of occupiers of premises, employers, unions and employees: Maritime Union of Australia v Fair Work Commission [2015] FCAFC 56; (2015) 230 FCR 15 (at [14]-[15]). On the one hand, right of entry is an important tool for unions to investigate suspected breaches of safety requirements and industrial laws, and as an aid to effective communication between union officials and employees. Equally, employers have an interest in conducting their business activities without disruption or inconvenience: Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Adelaide Airport Case) [2021] FCA 951 (at [32]).
22 Section 500 is part of this scheme of balancing of interests, that ensures proper standards of conduct by permit holders when exercising a right of entry: Adelaide Airport Case (at [36]). The requirement of civility in exercising a right of entry is also reflected in s 512 and s 513(1)(g) of the FW Act; in issuing a permit, the Fair Work Commission must be satisfied that the union official is a fit and proper person to be a permit holder. In Re CFMEU (permit application for Joe McDonald) (decision of the Australian Industrial Relations Commission, 25 July 2003, print reference (PR935310)), Ross VP (as his Honour then was) approved of the observations of Munro J in Vivienne Daniels v Joe Patti and another (decision of the Australian Industrial Relations Commission, 31 March 2000, print reference (Print S4571) at [34]) regarding an equivalent predecessor provision in s 285A(3) of the Workplace Relations Act 1996 (Cth):
Permit holders exercise a power that causes them to be exercising a public right and duty. Those rights, powers and duty stem from the statute. Due diligence, reasonable civility, and avoidance of unnecessary obstruction in the exercise of the powers under Division 11A are not only to be expected, they are a statutory condition of the powers being retained.
23 Acting in an ‘improper manner’ means acting contrary to the requirements of the right of entry provisions in Pt 3-4, and is conduct ‘which falls below that standard which can reasonably be expected of those who occupy positions of responsibility’: Director of the Fair Work Building Industry Inspectorate v Bragdon [2015] FCA 668; (2015) 147 ALD 373 (at [97]), cited in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Castlemaine Police Station Case) [2018] FCAFC 15; (2018) 258 FCR 158 (at [40]). The relevant conduct need not be deliberate or intentional for liability to arise (as distinct from ‘intentionally hinder or obstruct’), and where the conduct is inadvertent or unintentional, these ameliorative factors will be relevant in determining the appropriate penalty: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The Laverton North and Cheltenham Premises Case) [2018] FCAFC 88; (2018) 262 FCR 473 per Tracey J, Allsop CJ agreeing (at [122]).
24 In relation to the important consideration in this case of the relevance of prior contraventions to the assessment of penalty, the correct approach has recently been confirmed by a five member Full Court in Pattinson v Australian Building and Construction Commissioner [2020] FCAFC 177; (2020) 282 FCR 580. The Full Court there held that prior contraventions are relevant only to the extent that they may inform an assessment of the seriousness of the instant contravention. In making this assessment, evidence of prior contraventions may be sufficient to increase the seriousness of the instant contravention by demonstrating ‘wilful recidivism’ or an attitude of disobedience to the law and thus justify a higher penalty than might otherwise be ordered. However, and critically, the Full Court enjoined against any additional consideration of prior contraventions divorced from an assessment of the seriousness of the instant case (Allsop CJ, White and Wigney JJ at [180]-[181] and [191]-194]):
180 In all these cases what can be seen as clear and as taken from the content of the statute (as directed to the instant contravention for the objective of deterrence of such kind of contravention, in a statutory context of a maximum penalty for the worst type of contravening warranting the heaviest possible penalisation for the object of deterrence) is that the notion of proportionality of the penal response is central to the content of the statutory power to impose the penalty. That proportional response is not blind to wilful recidivism, to asserted impunity from obedience to the law, or to any other aspect of intentional disobedience to the will of Parliament. Such matters form a principled part of the assessment of the seriousness of the contravention and thus the evaluation of the appropriate penalty. No Full Court has said to the contrary. The jurisprudence of the Court in point of expression of principle is clear and consistent. What is not permitted in the name of deterrence is to untether the penal response from the nature and character of the instant contravention such that the penalty imposed can be seen to be undifferentiated between grades of conduct assessed and characterised on a principled basis.
181 Were the statute to permit such penalisation: that is the imposition of a penalty disproportionate to the seriousness of the contravention (having considered any willingness to disobey the law in that assessment), one would need the clearest words. Any such interpretation of the statute, that is to remove proportionality from the assessment of an appropriate penal response to a contravention or to make it a subsidiary consideration, would lead to an interpretation of a statutory power to inflict a penal consequence untethered to the nature and seriousness of the contravention. In such circumstances one is no longer penalising for an instant contravention, rather one is imposing penalties to bring about compliance generally by, in effect, saying the maximum penalty is always available against the recidivist for any contravention since the penalty will always conform with the object of deterrence. Such an approach could encourage or lead to inconsistent decision-making informed by personal perspective and opinion. A view that that is the current law would require the High Court to state as much. The view that Parliament would intend a discretion in sentencing with such capacity for variance according to personal choice and attitude is not lightly to be made. Any such interpretation would be required to confront what Gleeson CJ said in Wong v The Queen [2001] HCA 64; 207 CLR 584 at 591 [6] (albeit in the criminal law), as approved by the plurality (French CJ, Gummow, Hayne, Crennan, Kiefel and Bell JJ) in Hili v The Queen [2010] HCA 45; 242 CLR 520 at 535 [47]:
All discretionary decision-making carries with it the probability of some degree of inconsistency. But there are limits beyond which such inconsistency itself constitutes a form of injustice. The outcome of discretionary decision-making can never be uniform, but it ought to depend as little as possible upon the identity of the judge who happens to hear the case. Like cases should be treated in like manner. The administration of criminal justice works as a system; not merely as a multiplicity as unconnected single instances. It should be systematically fair, and that involves, amongst other things, reasonable consistency.
…
191 Nevertheless, we are not in the domain of crime. The imposition of civil penalties is free from notions of retribution and denunciation, its object is deterrence. But as is clear from the overwhelming preponderance of authority, the penalty is imposed for the instant contravention in furtherance of the deterrence of such or like contraventions by the contravenor or by others. The assessment of the character of the contravention includes all factors that can rationally go to its gravity and seriousness, bearing in mind that the object of the imposition is deterrence. That includes an attitude of displayed and continuing disobedience to the law, as part of a characterisation of the nature and character of what was done.
192 Thus for the reasons earlier expressed, we would reject the second appellant’s submission to the extent that it drew upon the strictness of the proposition that the union’s history of contravention was irrelevant to assessing the gravity or seriousness of the offending, and that some range was to be set, a-contextually divorced from such history, with past contravening relevant only to the choice of a level of penalty within that range.
193 The submissions of the second appellant were, however, somewhat broader and more subtle than that. They invoked a proper application of Parker and the recognition that the penalty was to be imposed for the instant contravention to dissuade like contraventions by the contravenor or others in the future. Within that submission was the demand for a degree of proportionality referable to the character of the contravening affected in its assessment by any demonstrated unwillingness to obey the law. The statutory task involved necessarily the assessment of the objective characteristics of the contravening in the light of all the factors attending the contravention, including prior contraventions. Thus, as was said in Parker, the history of prior contravention may assist in the proper characterisation of the instant contravention, but caution was required not to use it to overwhelm the process to change the character of the instant contravention into something it cannot properly and reasonably be seen to be. If one were to do so it would lead to the imposition of a penalty, again, for past conduct: Parker at [339]–[342] and the 2nd Non-Indemnification Personal Payment Case (FC) at [22]. The penalty imposed was submitted to be excessive.
194 The point is a subtle one, but important and real. It is not to be lost in definitional taxonomies and rules of bright lines. The task should not be complex to understand. A demonstrated unwillingness to obey a law of Parliament can be seen to bear upon the seriousness of conduct that is a contravention of that law. How one approaches, properly and fairly, the proof of such a present state of disobedience relevant to the instant contravention was not explored in argument. The relevant question may be seen to be the demonstrated or inferred attitude or state of mind of the contravenor to the law in question. That will be assessed and taken into account along with, and not ignoring, all the other features of the contravening. The danger of just referring to prior contraventions without a proper evaluation and taking account of the circumstances of the instant contravening (that is what actually happened) can be seen in Auimatagi, where past contraventions had little, if anything, to do with the events of the day in question that led to the stoppage of work.
(Emphasis added.)
25 Similarly, Besanko and Bromwich JJ (who agreed with the plurality judgment at [226]) made a number of additional observations which distinguish the correct approach from the other approaches which have been urged on this Court (at [227] and [230]-[231]):
227 The possible approaches that could be taken to the role of prior contraventions in the task of imposing a civil penalty for a further contravention may be summarised as follows:
(1) Prior history is not relevant to the characterisation of the seriousness or gravity of the instant contravening conduct and only plays a role in deciding where in the range of already appropriate penalties that conduct falls. This is the argument advanced by the appellants, and rejected by the Chief Justice, White and Wigney JJ, and by us.
(2) Prior history can inform the seriousness of the instant contravening conduct to the extent of justifying the imposition of the maximum penalty for conduct that is not of itself of that character, because of the primacy of the role of deterrence. This is the approach urged upon us by the respondent’s notice of contention, being in substance what the primary judge in fact did despite his Honour’s comments perhaps suggesting the contrary. This unavoidably entails putting the principle of proportionality identified in Veen v The Queen (No 2) [1988] HCA 14; 164 CLR 465 (Veen No 2) to one side. It is an approach that is contrary to any persuasive authority or the proper understanding of the relevant principles of civil penalty imposition derived from criminal sentencing, and is also rejected by the Chief Justice, White and Wigney JJ, and by us.
(3) Prior history may be relevant to an assessment of the seriousness or gravity of the instant contravening conduct, but neither that history, nor the object of deterrence, can result in a penalty that is disproportionate to the contravening conduct itself, having regard to the maximum penalty provided. This is directly supported by the principles stated in Veen No 2, especially at 477–8, as analysed by the Chief Justice, White and Wigney JJ. This is the correct approach.
…
230 Rather, as we endeavoured to explain in Parker at [341]–[342] and [348], and as Wheelahan J correctly recognised in Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (Syme Library Case) (No 2) [2019] FCA 1555 at [96], in properly applying Veen No 2, prior contravening history may be able to be demonstrated to be relevant to an assessment of the seriousness or gravity of the instant contravening conduct. However, neither that history, nor the object of deterrence, can result in a penalty that is disproportionate to contravening conduct itself, having regard to the maximum penalty. That is, prior contraventions may be illuminating in properly characterising what has happened, including the extent of the need for deterrence. This may in turn assist in determining both the appropriate range within which a penalty may be imposed, and in determining where within that range the penalty to be imposed should fall.
231 The proper role of relevant prior contraventions is therefore in assisting with better understanding what has taken place and how it should be assessed. This can include having regard to how that history informs the need for deterrence in the context of the maximum penalty, but falls short of changing what has happened in the instant case because the effect of taking that additional step would be to penalise again for what has happened in the past. This is the subtle but fundamental difference between characterising what has happened, which is conventional and permissible, and changing the character of what has happened, which is impermissible because it has the effect of at least in part imposing a penalty for what has been sanctioned previously. It is the injustice of the latter approach that is precluded by the principle of proportionality identified in Veen No 2. The contrary conclusion that imposing a disproportionate civil penalty in this sense is permissible is a matter only for the High Court to decide or for the legislature to enact.
(Emphasis added.)
26 In applying the principles enunciated by the Full Court in Pattinson, Rangiah J summarised the effect of the decision and its confirmation of the correct approach in Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (the Toowoomba Bypass Case) [2021] FCA 1128 in terms which I respectfully adopt (at [56]-[58]):
56 The Full Court in Pattinson determined that the principle of proportionality applies in a civil penalty context to determine that deterrence is for contraventions of a “like kind”, and that the maximum penalty assists to shape the penalty for the contravention under consideration, with the maximum being reserved for cases falling in the worst possible category where the need for deterrence is most pronounced.
57 The Full Court explained that in determining the appropriate penalty, all the circumstances of the case are to be considered, including the personal circumstances of the contravener. Hence, the demonstrated willingness of a contravener to break the law may inform the assessment of what is reasonably appropriate to deter a contravener from committing like contraventions, and may inform the ascertainment of an appropriate (and proportionate) penalty. However, a history of contravening does not, of itself, and without proper analysis and explanation, determine that a contravention is more serious in the hands of a recidivist contravener. Attention must be paid to the nature, context and circumstances of the instant contravention.
58 Pattinson also indicated that a contravener’s recidivism cannot be deployed to permit the imposition of a penalty at or near the maximum without real evaluation of the objective characteristics of the contravention. While the sole object of the imposition of penalties is deterrence, the penal response to a contravention cannot be untethered from the nature and character of the contravention.
(Emphasis added.)
27 All members of the Court in Pattinson also endorsed (at [202] and [230]) the reasoning in Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (Syme Library Case) (No 2) [2019] FCA 1555 per Wheelahan J (at [96]):
On the issue of the relevance of past contraventions by the CFMEU respondents and proportionality, I shall apply the principles and guidance identified in The Non-Indemnification Personal Payment Case, the Broadway on Ann case, and in Parker in the passages to which I have referred above. I accept the submission made on behalf of the CFMEU respondents that the prior record of a contravener does not permit the imposition of a penalty that is disproportionate to the offending conduct for which the penalty is to be imposed. But Veen v The Queen (No 2), the reasons of Tracey J and Logan J in the Broadway on Ann case, and the reasons of the members of the Court in Parker support the idea that past contraventions may be relevant in assessing the seriousness of the instant contraventions. A history of contraventions may affect a number of features of the instant contraventions, including whether the instant contraventions are a manifestation of a continuing attitude of disobedience to the law. For this reason, and when all the background circumstances and other features of a contravention are considered, what might in isolation and superficially be a minor contravention may take on the complexion of a much more serious contravention. And consistently with deterrence being the principal object of the imposition of civil penalties under the Fair Work Act, a history of contravention may point to a need for a more severe penalty than would otherwise be the case if there was no history of contravention. The significance of a history of contraventions may be compounded by the absence of contrition, and the absence of evidence addressing steps taken to ensure future compliance with the law. For these reasons, a severe penalty may be proportionate to what might in other circumstances be a minor contravention. Overriding these considerations is the care that should be exercised to ensure that any penalties imposed for the instant contraventions do not amount to double punishment for prior contraventions. Care in avoiding double punishment also informs other aspects of the process of fixing penalties, including whether the contraventions are part of a course of conduct, and the totality principle.
(Emphasis added.)
28 Although an appeal from Pattinson has been brought in the High Court, pending the outcome of that proceeding, this Court is bound to follow Pattinson.
29 On the admitted facts, the Commissioner says the conduct of Messrs Windus and Parker involved deliberate (as opposed to accidental) breaches of proper standards of conduct. Further, on the admitted facts, it may be inferred, the Commissioner says, that the improper acts of Messrs Windus and Parker caused some degree of disruption and distraction to SKS (in that it diverted and distracted Mr Krishnan from attending directly to any safety concern) and that Mr Windus’ foul language and reference to the ‘third world’ caused offence to Mr Krishnan.
30 Notwithstanding the CFMMEU’s liability is accessorial via s 550 of the FW Act, (including the applicability and effect of s 793 of the FW Act), the conduct and state of mind of Messrs Windus and Parker is taken to be the conduct and state of mind of the CFMMEU. In these circumstances, the Commissioner says it is not open for the CFMMEU to distance itself as an organisation from the conduct engaged in by its permit holders. In evaluating the nature and seriousness of the contravening conduct, the CFMMEU stands in the shoes of the individual permit holders: McDonald v Australian Building and Construction Commissioner [2011] FCAFC 29; (2011) 202 IR 467 (at [35]-[36]) (a case involving primary liability of the union).
31 The Commissioner acknowledges that on the spectrum of seriousness, the contraventions of the individual permit holders in the present case would be below the mid-point (broadly in the range of the intersection of low and medium). However, the Commissioner says the same cannot be said for the CFMMEU. There is said to be an additional, aggravating consideration. In evaluating the nature and seriousness of the conduct of the CFMMEU, a significant factor to consider is the CFMMEU’s history of contravening conduct and non-compliance with workplace laws.
32 The Commissioner submits that the CFMMEU is a recidivist offender. It or its representatives have contravened industrial legislation in more than 180 separate proceedings since 2000 with most cases finding multiple contraventions. The Commissioner says that an extraordinary number of judgments of this Court have strongly criticised the CFMMEU for its poor compliance record: see for example, Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The Quest Apartments Case) (No 2) [2018] FCA 163; (2018) 358 ALR 725 (at [41]-[45]); Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (“Cardigan St Case”) [2018] FCA 957 (at [82]-[87]); Non-Indemnification Personal Payment Case (at [23]); Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Bendigo Theatre Case) (No 2) [2018] FCA 1211 (at [73]); Australian Building and Construction Commissioner v Menon [2020] FCA 1418 (at [75]); Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Elizabeth Street Hobart Case) [2020] FCA 1742 (at [68]).
33 More specifically, there have been, in total, 41 proceedings imposing penalties for contraventions of s 500 of the FW Act. Prior to the contravening conduct in this case (i.e. 15 February 2019), there were 35 proceedings involving 237 contraventions of s 500 of the FW Act. The Commissioner produced a lengthy schedule which provided details of each of these contraventions by the CFMMEU of various provisions of workplace laws over the last two decades.
34 Given this prior record of contraventions, the Commissioner notes that the CFMMEU has been recognised in the courts as a notorious ‘recidivist’ offender of Australia’s workplace laws: Parker v Australian Building and Construction Commissioner [2019] FCAFC 56; (2019) 270 FCR 39 (at [350]); Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) [2018] FCAFC 126; (2018) 265 FCR 208 (at [14] and [65]); Queensland Infrastructure Case (at [159]). Its history of contraventions has been described as ‘disgraceful and shameful’ (The Broadway on Ann Case at [65]), ‘deplorable’ (Cozadinos v Construction, Forestry, Mining and Energy Union [2013] FCA 1243 at [43]), and ‘dismal’ (Director of the Fair Work Building Industry Inspectorate v Stephenson [2014] FCA 1432; (2015) 146 ALD 75 at [76]) and more recently that their conduct ‘has a theme of deliberateness in contravention of the Act’, and that ‘it is difficult, if not impossible, not to come to the conclusion that the Union is prepared, when it suits it, to contravene the Act and, as here, seek to coerce employers to comply with its demands’: Non-Indemnification Personal Payment Case (at [23]).
35 The Commissioner observes that this Court has previously drawn the inference that the repeated, unlawful behaviour of the CFMMEU’s representatives is condoned at the very highest levels of management of the CFMMEU and is institutionalised within ‘an organisational culture in which contraventions of the law has been normalised’: Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (The Mitcham Rail Case) [2015] FCA 1173 (at [29]).
36 Specifically, in the context of s 500 contraventions, the Commissioner notes that the Court has observed that the CFMMEU’s record of relevant prior contraventions ‘…indicates an attitude of indifference by the CFMEU to compliance with the requirements of the legislation regarding the exercise of right of entry’: Stephenson (at [77]).
37 The Commissioner contends that, in line with Pattinson (at [193]-[194] and [202]), the Syme Library Case (at [89] and [96]) and Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (Castlemaine Police Station Case No 2) [2020] FCA 202 (at [13]), the Court ought conclude that the contravention of s 500 of the FW Act by the CFMMEU in this proceeding is serious when viewed through the prism of the circumstances of the CFMMEU. That is, it is submitted that the present contravention of s 500 by the CFMMEU must be assessed as having been committed as part of an ongoing unwillingness on the part of the CFMMEU to comply with workplace laws, including adhering to proper standards of conduct when exercising a right of entry under the FW Act. This means, the Commissioner says, that the appropriate penalty to be imposed on the CFMMEU is substantially higher than that which would otherwise have been an appropriate penalty to have imposed on the permit holders for their contravention.
38 The Commissioner also observes that the CFMMEU is registered as an organisation pursuant to the Fair Work (Registered Organisations) Act 2009 (Cth). As a registered organisation, it is a recognised participant in the national industrial relations system which is governed by the FW Act, with associated benefits and responsibilities: Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 226 (at [28]).
39 This Court has previously observed that the CFMMEU is large, asset-rich, and well-resourced: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (the Webb Dock Case) [2017] FCA 62 (at [65]); Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Werribee Shopping Centre Case) [2017] FCA 1235 (at [25]). This is particularly relevant in determining the penalty which will operate as an effective deterrent: Queensland Infrastructure Case (at [105]). The Commissioner says that the penalty must be set at an amount that is meaningful to provide the necessary ‘sting’ to deter the CFMMEU and other registered organisations from allowing their officials to misconduct themselves on building sites and other workplaces in exercising a right of entry. Otherwise, the penalty runs the risk of allowing the CFMMEU to continue to treat the penalty as just a ‘cost of doing business’: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 53; (2017) 249 FCR 458 (at [102]); Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The Footscray Station Case) [2017] FCA 1555; (2017) 274 IR 460 (at [52]).
40 Finally, the Commissioner argues that although the CFMMEU did ultimately cooperate and admit a contravention, there is no evidence of contrition or any corrective action taken by the CFMMEU.
41 In Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70; (2008) 168 FCR 383, Stone and Buchanan JJ said (at [76]):
…a discount should not be available simply because a respondent has spared the community the cost of a contested trial. Rather, the benefit of such a discount should be reserved for cases where it can be fairly said that an admission of liability: (a) has indicated an acceptance of wrongdoing and suitable and credible expression of regret; and/or (b) has indicated a willingness to facilitate the course of justice.
42 The Commissioner contends that any mitigation of penalty would be small at best. Absent evidence of contrition, the CFMMEU’s agreement to settle the proceeding by making admissions on a contravention of s 500 of the FW Act implies a forensic and pragmatic decision, as distinct from any acceptance of wrongdoing or a willingness to facilitate the course of justice.
43 On these bases, the Commissioner submits the appropriate (and proportionate) penalty on the CFMMEU would be in the high range, taking proper account of the factors canvassed above, in particular:
(a) the improper conduct of the permit holders (and therefore the CFMMEU) was deliberate;
(b) the contravening conduct of the CFMMEU must be viewed as another manifestation of the CFMMEU allowing its officers and employees to contravene workplace laws of this kind without taking any meaningful steps to address an organisational culture that tolerates and normalises such unlawful conduct by its permit holders; and
(c) the need for specific deterrence is paramount, given the CFMMEU has not demonstrated contrition, it is a recidivist offender and is large, asset-rich, and well-resourced. A small penalty risks being ineffective as a deterrent.
44 The CFMMEU submits that a penalty in the ‘high range’ would be entirely disproportionate, and therefore an inappropriate response, to what is accepted to be a fairly low grade contravention. It emphasises particular aspects of Messrs Windus’ and Parker’s conduct as follows.
45 The CFMMEU emphasises that the concerns Messrs Windus and Parker held about the materials on the floor at the Site which led to the contravention were legitimate. The Site was a place where SKS’s employees and contractors performed their work and was thus a ‘workplace’ within the meaning of s 3 of the Occupational Safety and Health Act 1984 (WA) (OSH Act). SKS, as an employer, and the principal contractor and occupier, had duties to its employees and sub-contractors pursuant to s 19 and s 22 of the OSH Act to provide and maintain a safe working environment and safe access and egress from the workplace. Further, SKS was required to comply with regs 3.17 and 3.18 of the Occupational Safety and Health Regulations 1996 (WA) (OSH Regulations) at the Site and could be ordered to pay a civil penalty for non-compliance:
3.17 Cleanliness of workplace and rubbish etc. removal, duties of employer etc. as to
(1) A person who, at a workplace, is an employer, the main contractor, a self-employed person or a person having control of the workplace must ensure that —
(a) the workplace and other areas ancillary to the workplace are maintained in such clean condition as is necessary to avoid hazards to persons at the workplace; and
(b) where practicable, rubbish and debris are removed by mechanical means; and
(c) as far as practicable, dust is prevented from being released into the atmosphere.
(2) A person who, at a construction site, is the main contractor, an employer or a self-employed person must ensure that rubbish, building material and plant is stored away from footpaths and roadways at the site.
…
3.18. Floors, stairs etc., duties of employer etc. as to
(1) A person who, at a workplace, is an employer, the main contractor, a self-employed person, a person having control of the workplace or a person having control of access to the workplace must ensure that as far as practicable —
(a) the floor of the workplace; or
(b) any stair or ramp in the workplace,
has an unbroken and slip resistant surface and is free from any obstruction that may cause a person to trip or fall.
(Emphasis added.)
46 The OSH Regulations do not define ‘hazard’, but the OSH Act defines ‘hazard’ as anything that may result in ‘injury to the person’ or ‘harm to the health of the person’ (s 3). In Saliba v Shepherd [2006] WASCA 228 (at [25]-[27]), the Court of Appeal of the Supreme Court of Western Australia held that the definition of ‘hazard’ in s 3 of the OSH Act was applicable to r 3.17 of the OSH Regulations, and further, that a site in an unclean condition could constitute a tripping hazard and result in an injury to persons at the workplace.
47 The CFMMEU says that it was in these circumstances that Messrs Windus and Parker did not comply with Mr Krishnan’s requests to follow him to the scaffolding. Mr Windus gestured to the materials on the floor of the Site, identified those materials as trip hazards impeding access to the work area, and had the exchange with Mr Krishnan in the presence of Mr Parker. The CFMMEU says it was legitimate for Mr Windus to raise concerns about the materials with Mr Krishnan, but accepts that Mr Windus was unreasonable and disrespectful in raising his voice at Mr Krishnan and insisting Mr Krishnan attend to the materials immediately. Mr Windus then made further complaint to Mr Krishnan about the materials on the floor of the Site and in doing so made a reference to the ‘third world’: the Macquarie Dictionary (2020, 8th ed, 1586) defines ‘third world’ as (noun) ‘developing countries collectively, especially in Africa, South America and South-East Asia, which are not heavily Industrialised, which have a low standard of living…’ and (adj) ‘relating to or inhabiting countries considered to be part of the Third World’.
48 The CFMMEU says there is nothing inherently improper about referring to the ‘third world’ in a safety context. In WorkCover Authority (NSW) v Rexma Pty Ltd [2008] NSWIRComm 78; (2008) 172 IR 210 per Walton J Vice-President; Schmidt and Backman JJ, which concerned an appeal of sentencing proceedings under the Occupational Health and Safety Act 2000 (NSW), the Industrial Court of New South Wales observed that in the sentencing proceedings at first instance, the Industrial Magistrate (at [7]):
… described Mr Kim’s injuries as “serious”, and observed that the photographs of the area of the factory where Mr Kim had been working at the time of the incident, “looked like a factory situation where third world conditions prevailed.
49 However, the CFMMEU accepts that Mr Windus was insensitive and inconsiderate to Mr Krishnan, a person of South-East Asian descent, by making the reference to the ‘third world’ in Mr Krishnan’s presence. In the context of the exchange, Mr Windus’ reference to the ‘third world’ offended Mr Krishnan, who interpreted the remark to imply a racist slur and that he had lower safety standards because he was Asian, although Mr Windus did not intend that implication. Mr Windus also used foul language in Mr Krishnan’s presence during the course of the entry.
50 The CFMMEU argues that the offence Mr Windus caused to Mr Krishnan was accidental. Whilst it may be accepted that Messrs Windus and Parker otherwise acted deliberately in the sense that it may be inferred they knowingly, and did not accidentally, engage in their respective conduct, there is nothing in the SAFA which justifies an inference that Mr Windus’ or Mr Parker’s conduct was planned or premeditated. Nor can it be inferred that it was engaged in with disregard of the law or to pursue some other industrial pretext, or to deliberately cause offence, racial or otherwise. The CFMMEU says the conduct of Messrs Windus and Parker (and therefore the CFMMEU) was at least partly apparently motivated by genuine concerns about safety:
(a) Messrs Windus and Parker lawfully entered the Site for a safety-related purpose concerning the scaffolding. Messrs Windus and Parker complied with SKS’s requirement that they sign in their attendance. Mr Windus’ and Mr Parker’s conduct in not following Mr Krishnan to the scaffolding was a spontaneous reaction to Mr Parker having observed the trip hazards, which presented a new and additional safety concern and possible contravention of the OSH Act and OSH Regulations;
(b) Mr Windus raised the safety concern about the materials on the floor with Mr Krishnan. Mr Windus apparently genuinely believed the safety concern was sufficiently serious to become frustrated and cause him to raise his voice at Mr Krishnan, and to warrant insisting that Mr Krishnan, as Site Safety Supervisor, immediately and personally attend to the materials on the floor;
(c) Mr Windus’ reference to the ‘third world’ was connected with the materials on the floor and whilst spoken to Mr Krishnan, was not directed at Mr Krishnan. Mr Windus was insensitive and inconsiderate in speaking those words but was unthinking, and he did not intend the racial imputation interpreted by Mr Krishnan; and
(d) Whilst spoken in Mr Krishnan’s presence, Mr Windus’ foul language during the course of the entry was not directed at Mr Krishnan. Contrary to the Commissioner’s submissions, unlike the reference to the ‘third world’, there is no evidence the foul language used in Mr Krishnan’s presence caused Mr Krishnan offence.
51 The CFMMEU accepts, as it must, that its history of prior contraventions is relevant to an assessment of penalty for the contravention. However, it stresses the need for any penalty to be proportionate to the seriousness for the current contravention. It emphasises, relying on Pattinson, that there must be some relevant connection between the circumstances of the instant contravention and some prior contravening conduct to justify a finding of wilful recidivism or disobedience warranting a higher penalty. It says that the Commissioner’s broad reliance on the CFMMEU’s history of general offending, without more, is insufficient to demonstrate the relevant connection to the specific conduct of Messrs Windus and Parker and would, in effect, amount to re-penalising the CFMMEU for its prior contraventions.
52 Accordingly, the CFMMEU submits that an appropriate penalty which is proportionate to the low-grade conduct and acknowledges but does not re-penalise the CFMMEU for its past conduct, and builds in a meaningful discount for it cooperation and corrective action, would be an amount in the ‘upper low range’, between 25% and 30% of the maximum.
CONSIDERATION
53 The Commissioner acknowledges that a single judge of this Court is bound to follow the Full Court’s decision in Pattinson (at least subject to the High Court appeal outcome). Notwithstanding this, the Commissioner submits that a contravention may fall into the worst category because a prior history of contraventions reveals an attitude of disobedience, and the statutory maximum penalty may be applied to achieve effective deterrence even if the Court does not consider the contravening conduct itself to be of the most serious kind. Thus, the Commissioner’s formal submission is that if the instant contravening conduct of the CFMMEU is not adjudged to be of a character justifying the imposition of a penalty in the high range, then the CFMMEU’s recidivism nevertheless warrants a penalty in the high range. Only a high range penalty could achieve the required objective of deterring the CFMMEU from re-offending. This submission from the Commissioner is the major area of contention in the present penalty debate.
54 The CFMMEU stresses that the principles relating to the manner in which a contravener’s history of contraventions are to be taken account are as enunciated in Pattinson. The object of deterrence is directed to the instant contravention and the deterrence of contraventions of that kind, and the fixing of an appropriate penalty requires reference to the maximum penalty set by Parliament and the nature, character and full context of the contravening. Whilst a contravener’s history of contraventions may assist in the characterisation of the seriousness of the instant contravention, considerable caution must be exercised to ensure that past conduct is not used to impose a penalty which is disproportionate to the nature, gravity and seriousness of the instant contravention and thereby, effectively, re-penalising past conduct: see Pattinson per Allsop CJ, White and Wigney JJ (at [98], [160]-[162]) and Besanko and Bromwich JJ (at [227(3)], [230]-[231]). I accept this contention. To proceed otherwise, as the Commissioner urges, would risk the same kind of error identified in Pattinson (at [195]):
The error of the primary judge here, being the error of the majority in Broadway on Ann, was that in the name of utilising a notion of recidivism of the union it was seen as in accordance with principle to impose a penalty at the highest level because of the number of prior contraventions, in what was said to be the demonstrated intention of promoting a no-ticket no-start policy, but without any real evaluation of, or weight being given to, the objective characteristics of what occurred as part of the assessment of what was the subject contravention of the penalty to be imposed. Thus, the penalty for the instant contravention became subsumed by a proposition that the time had come, once the perceived threshold level of prior contravening was reached, that henceforth all contraventions would be treated as of the worst category or warranting the maximum penalty, irrespective of the nature and the character of the human conduct that constituted the contravention in question. This can be seen in the approach of the primary judge at [71], [72], [83] and [84] set out above. The past has been used beyond the point of characterising the nature of the contravening (which is the subject of the imposition of the penalty) and has become the reason for the maximum penalty irrespective of the nature and seriousness of the instant contravening. To ask the rhetorical question in the last sentence of [72] of the primary judge’s reasons as a supporting proposition is to raise the object of the imposition of the penalty to a justification for ignoring the nature of the contravening, and so to impose the penalty because of, and framed by, only the past. This is not to use, but to jettison, a notion of proportionality by setting to one side the nature of the conduct that comprised the contravention. The penalty becomes imposed not for the instant contravention but, to some degree, for the past, again. This approach elevated past offending to be the defining consideration of the character or gravity of the contravening, irrespective of the actual reality of what constituted the contravention. It was not an assessment of the gravity of the circumstances, including (but not limited to or defined by) what could be drawn legitimately and contextually as to the instant contravention from past contraventions; rather, it was to draw from the past a conclusion that, regardless of how objectively serious or not the conduct in question was otherwise, the maximum penalty should henceforth be imposed.
(Emphasis added.)
55 In my view, the inquiry must be directed to whether evidence of prior contraventions demonstrates ‘wilful recidivism’ or an ‘attitude of disobedience’. Although a contravention of s 500 based on impropriety does not depend on a state of mind, a state of mind may nevertheless be relevant to penalty and may have an aggravating or ameliorative impact. It is for the party asserting any aggravating or mitigatory state of mind to prove its assertion. As the Full Court stated in Reckitt Benckiser (at [131]-[132]):
[131] If a contravention does not involve any state of mind then it is for the party asserting any particular state of mind (be it a deliberate flouting of the law, recklessness, wilful blindness, “courting the risk”, negligence, or innocence or any other characterisation of state of mind) to prove its assertion. If, in the event, neither party discharges its onus to establish any particular state of mind in relation to the contraventions, the Court determines penalty on no more than the fact of the proscribed nature of the conduct (see, by analogy see R v Olbrich (1999) 199 CLR 270; 166 ALR 330; [1999] HCA 54 (Olbrich) at [22]–[28]). However, if any degree of awareness of the actual or potential unlawfulness of the conduct is proved then, all other things being equal, the contravention is necessarily more serious. Such awareness may be able to be inferred from the very nature of the conduct or representations constituting the conduct. However absence of such proof does not establish a mitigatory state of mind (see, by analogy, R v Storey [1998] 1 VR 359 at 369, quoted with approval by the majority in Olbrich at [27]; see also [25]). It means only that the neutral state of mind required for liability has not been disturbed for the purposes of penalty. If a contravening party wishes to go beyond the neutral statutory state of mind for liability and positively assert a lack of consciousness of the character of the conduct for the purposes of penalty, that is a circumstance of mitigation which the contravening party must prove.
[132] Ultimately, a judge must form his or her own views on whether and if so what state of mind existed on the evidence that is before the Court, provided that a party has been given an opportunity to be heard. To do otherwise is to require a judge to surrender an essential judicial function, even if it is not as clear-cut for civil penalty proceedings as it is for criminal proceedings: the CFMEU civil penalty case at [61]. The Court cannot surrender the ultimate responsibility for making the necessary findings leading to penalty, even if any penalty agreed between the parties cannot easily be departed from. The determination of state of mind, if any, is a central judicial function.
(Emphasis added.)
56 The Commissioner asserts that the conduct of Messrs Windus and Parker, and therefore the CFMMEU, was ‘deliberate’. I do not consider the assertion of ‘deliberateness’ is made out. There is no expressly agreed fact that the conduct was deliberate. The SAFA is premised on a neutral state of mind. The CFMMEU says, and I accept in this instance that it is not open for the Commissioner to invite the Court to fill gaps in the SAFA with inferences on such topics, which may be critical to penalty assessment, and which are not founded upon the admissions and the terms of the SAFA itself: see the Agreed Penalty Case (at [61]).
57 Although the Commissioner invites the Court to infer that Mr Windus’ and Mr Parker’s conduct caused ‘some degree of disruption and distraction to SKS’, there is no agreed fact to that effect. In any event, any exercise of a right of entry in those circumstances where there is no requirement to provide advance notice of the entry to the employer or occupier, as was the case here, will naturally involve a degree of disruption and distraction. Further, Mr Krishnan would still have been disrupted and distracted even if Messrs Windus and Parker had followed him to the scaffolding. There is certainly no evidence of any financial or economic loss suffered as a result of the contravention.
58 The conduct which gave rise to the admitted contravention was of short duration and is undoubtedly at the lower or less serious end of the spectrum of conceivable contraventions of the statutory norm. So much is conceded by the Commissioner. Yet the Commissioner makes a formal submission that deterrence requires the imposition of a penalty in the high range of the statutory maximum by reference to the CFMMEU’s history and numbers of contraventions, and generic references to past observations about the CFMMEU’s attitude to compliance with right of entry requirements. Other than those generic matters, the Commissioner makes no attempt at an evaluation of which, if any, of the past contraventions bear any rational connection to what actually happened on the day of the instant contravention. That generic approach is clearly contrary to Pattinson at [180]-[181], [191]-[195], [227] and [230]-[231], which have been set out above. Additionally, the Full Court said (at [197]-[198] and [201]):
197 For the reasons that we have already set out, the notion of proportionality inheres in the task of imposition of an appropriate penalty in aid of the object of deterrence. It is not a free-standing principle to be seen as based on retribution, as the principle of proportionality in sentencing for crime can be (at least historically). Rather, the relevance of the notion of proportionality inheres in the statutory task of the imposition of a reasonably appropriate penalty for the contravention before the court to deter such or like contraventions, and a rejection of the double imposition of penalty consequences.
198 In a clear, frank and open submission, senior counsel for the Commissioner recognised that, to support the notice of contention, and, really, to support the primary judge’s approach (as discussed above), he must support the contention that deterrence, as the sole object of the imposition of the penalty, and the terms of s 546, together, entitled the court, because of past contraventions, to impose a penalty more than once for the same contravention or to a level that bore no real relationship to the facts and circumstances of the instant contravention: That once the past contraventions reached a certain point, it could be appropriate to deter any contravention, whatever its seriousness otherwise, by the maximum penalty, irrespective of the acts and circumstances that otherwise made up the contravention.
…
201 The assessment of what is an appropriate penalty is informed by a reasonable appreciation of all the circumstances that rationally go to an assessment of the gravity and seriousness of the contravention before the court, including (but not limited to) what can be drawn from past conduct as to the instant contravention, and that rationally go to an assessment of what is reasonably necessary, and thus appropriate, to deter such or like contravention in the future by the contravenor or by others. If a grave contravention and a much less serious contravention (thus analysed in the same context) are both said to require the imposition of the maximum penalty, it is difficult to conclude otherwise than that in respect of the latter contravention, the less serious, the penalty is being imposed for both the present contravention and for the past contraventions: a conclusion that was frankly recognised in the argument on the notice of contention. That is also why we consider the approach of the majority in Broadway on Ann to award the maximum penalty for each and every contravention to have been a misapplication of principle.
(Emphasis added.)
59 Similarly, Allsop CJ, White and Wigney JJ referred in Pattinson (at [183]-[184]) to Auimatagi v Australian Building and Construction Commissioner [2018] FCAFC 191; (2018) 267 FCR 268, where the Full Court (Allsop CJ, Collier and Rangiah JJ) said (at [175]-[176]):
175 As to the Union, the imposition of the maximum penalty of $51,000 was manifestly excessive. It is difficult to escape the conclusion that the “recidivism” to which the primary judge referred was not merely a factor in giving a penalty at the high end of an appropriate response to the contravention, but in substance there was punishment for past conduct.
176 The quality or objective seriousness of the contravention (on this hypothesis) fell far short of being worthy of the maximum penalty. It is a fundamental principle, at the core of the judicial power to impose a penalty, that the imposition is for the contravention in question. Prior contraventions, even so many and often so serious as the Union may have engaged in in the past, is a factor which may be taken into account in determining the appropriate quantum for the contravention; it cannot be taken to lead to a penalty that is disproportionate to the gravity of the instant contravention. The maximum is for the worst category of cases. See the points of principle set out in the reasons of Bromwich J (dissenting in the result, but not in point of principle) in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) (2018) 265 FCR 208 at [93] and [102]-[110], and see Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) (2018) 264 FCR 155 at [22].
(Emphasis added.)
60 In those cases, as here, the Commissioner made generic submissions that the CFMMEU was a ‘recidivist’ and the penalty should thus be ‘at the high end’. Whilst history of the CFMMEU is relevant, it is contrary to Pattinson to conclude that for every contravention, the penalty to be imposed on the CFMMEU ‘is to be substantially higher’ than that which is to be or might have been imposed on the permit holder personally. Rather, in every case the nature, character and full context of the instant contravening is to be evaluated, as is the presence or absence of any relevant connection with past contravening conduct shedding light on whether the contravention is aberrant or manifests an attitude of disobedience to the law. If the latter, a heightened penalty may be warranted, but only to the extent that such demonstrated attitude or state of mind increases the seriousness of the instant contravention such that the penalty remains directly proportionate to the seriousness of the present conduct.
61 Indeed, the Full Court in Pattinson considered the CFMMEU’s penalty should be higher than that of Mr Pattinson because the conduct was ‘an example of a continuation of a policy framed and implemented in direct opposition to the statutory policy of freedom of association’ (at [222]):
In the light of the history of contravening conduct in attempted enforcement of the union’s policy, the absence of any evidence of contrition or that the policy has been changed or ended, the character and gravity of the contravening conduct in the hands of the union is more serious than it is for Mr Pattinson, and the call for deterrence is heightened by that seriousness. It can be taken that the contravening in question (though on the evidence, Mr Pattinson’s first contravention) is an example of a continuation of a policy framed and implemented in direct opposition to the statutory policy of freedom of association under Div 4 of Pt 3-1 of the Fair Work Act and reflects a willingness in that respect to contravene the statute. Taking such matters into account, but also having regard to the nature of the objective circumstances of what actually occurred including the single episodic nature in the exchange with two people in company, but recognising that there were two contraventions, the lack of any proof of financial impact on anyone, the public policy in the cooperation shown, and the maximum penalty for one contravention of $63,000, we consider that an appropriate penal response in aid of the object of deterrence would be to impose upon the union penalties for the two contraventions of $38,000 and $2,000 totalling $40,000.
(Emphasis added.)
62 The contraventions of the kind that are of concern in this proceeding are those of s 500. The instant contravention of s 500 is explained, contextualised and localised, and does not manifest any attitude of indifference or deliberate non-compliance with right of entry requirements, thus rendering the contravening by the CFMMEU significantly more serious.
63 The Commissioner has not attempted, beyond provision of a lengthy schedule listing all of the CFMMEU’s contraventions dating back to 2000 and identification of 35 proceedings involving at least one contravention of s 500 to draw any relevant connection between the human conduct in this case and that of previous cases. Senior counsel for the Commissioner did draw the Court’s attention to a further subset of at least 15 proceedings said to involve at least one contravention of s 500 by reason of similar improper conduct involving abusive language and/or obstructive behaviour while lawfully exercising a right of entry. The CFMMEU seeks to further narrow the relevant prior contraventions on the basis that only those that occurred in Western Australia are most relevant to the current penalty assessment. In my view, there is no basis to confine the consideration in the manner contended by the CFMMEU. Both of these points were addressed by Gilmour J in Director of the Fair Work Building Industry Inspectorate v Upton [2015] FCA 672 (at [57]-[61]), where his Honour said:
57 Nonetheless, I have had regard only to those cases involving abuse of the right of entry system and the use by CFMEU officials, including senior CFMEU officials, of obscene and abusive language, the making of threats including threats of physical assault and actual assault directed at employees or officers employed by the regulator. The matters to which I have had regard are numbered 1, 2, 4, 23, 30, 32, 35, 39, 43, 46, 50, 59, 65, 68 and 75 in the provided table. Appendix A of these reasons is an abridged and amended version of this table. The amendments are to correct citation and other errors.
58 The CFMEU submits that while contraventions within a different branch of an organisation are relevant, they are given less weight than contraventions within the branch in question. The decision of the Full Court in Draffin v Construction, Forestry, Mining and Energy Union (2009) 189 IR 145; [2009] FCAFC 120 at [72], which was cited in support, is not authority for such a proposition. Indeed, the Full Court at [72] expressly doubted its correctness.
59 I respectfully adopt, in this respect, what was stated by White J in Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (2014) 140 ALD 337 at [58]:
I do not consider it correct in principle that a previous contravention by an organisation which is otherwise relevant should be ignored altogether when fixing penalty, or be given less weight, only because it occurred in another state and by a different branch of the organisation.
60 The CFMEU is a national organisation and should be regarded as such where considerations of penalty, in particular, the promotion of specific deterrence are under consideration.
61 Whilst the CFMEU’s record does not mean that a disproportionate penalty can or should be imposed, it is nonetheless relevant to the assessment of the level of penalty that is necessary for deterrence (see Temple at [64]). The CFMEU’s long history of its officials conducting themselves unlawfully involving the very kind of conduct in which Upton engaged on 8 October 2012 calls for a significant component of specific deterrence.
64 Whilst acknowledging that these observations must be read in the light of Pattinson, I respectfully agree. This being said, although the history of prior relevant contraventions should not be limited in any way to the Western Australian instances, those particular prior contraventions do provide a useful means of comparison and may inform the circumstances of the present contravention. Of the 35 proceedings noted by the Commissioner relating to contraventions by the CFMMEU or its representatives of s 500, only three appear to have occurred in WA. Those three historical contraventions of s 500 relate to the conduct of two officials on four occasions which occurred between 9 and 6 years ago. The relevant conduct was objectively graver and more serious than the instant contravention.
65 The earliest was in fact Upton, and related to conduct that occurred some nine years ago. On 8 October 2012, CFMMEU (at that time the CFMEU) official Mr Bradley Upton attended Bechtel’s Wheatstone Gas project near Onslow to hold discussions under the FW Act. Whilst on site Mr Upton behaved in an improper manner by abusing a Bechtel employee using obscene and racist remarks. On 13 February 2013, Mr Upton again attended the Wheatstone project to hold discussions with employees and behaved in an improper manner by failing to comply with a direction not to hold discussions in the ‘wet mess’ area of the project. The CFMMEU was found liable for two contraventions of s 500 and penalties of $15,000 and $5,000 were imposed which were respectively equivalent to 45% and 10% of the maximum penalty, the value of a penalty unit having increased in the time between the first and second contravention.
66 The next was Australian Building and Construction Commissioner v Harris [2017] FCA 733, and related to conduct that occurred some six and a half years ago. On 25 May 2015, CFMMEU organiser Mr Tawa Harris attended the Joondalup carpark construction site to hold discussions with employees on the site. Mr Harris did not provide an entry notice and despite being directed not to enter, and to leave the site, refused to leave the site for 45 minutes when police were called. Whilst a penalty of $2,000 was imposed on Mr Harris, the proceedings against the CFMMEU were dismissed.
67 Shortly after that was Australian Building and Construction Commissioner v Upton (The Gorgon Project Case) (No 2) [2018] FCA 897, which related to conduct that occurred some six years ago, and some three years prior to the instant contravention. On 3 December 2015, Mr Upton entered the Gorgon Project in the exercise of entry rights. Mr Upton addressed a meeting of about 50 to 60 employees of various contractors. Mr Upton attended the meeting displeased with what he understood to be as many as 90 members of the CFMMEU resigning from the union. Mr Upton spoke in an aggressive and expletive-laden manner. The CFMMEU was found liable for one contravention of s 348, one of s 346(a), and one of s 500, and a penalty of $43,200 imposed.
68 The CFMMEU has also accepted that the following other conduct in WA post-dating the instant contravention is also relevant: see Upton (at [55]-[56]).
69 On 5 December 2019, some 10 months after the instant contravention, Mr Parker exercised his State OHS right for the purpose of Pt 3-4 of the FW Act at the Next DC P2 Project in Perth. During that entry, Mr Parker acted in an improper manner by remaining on site without an escort by a Multiplex representative, and by not complying with requests to move from where he was standing when Multiplex employees were unloading doorframes from a truck. That conduct is the subject of separate proceedings (WAD 197 of 2020). As here, the CFMMEU and the Commissioner agreed to a statement of agreed facts, wherein the CFMMEU admitted a single contravention of s 500 based on Mr Parker’s conduct, which was filed on 23 June 2021. It is apparent from the statement of agreed facts that Mr Parker’s improper conduct was not planned or premeditated but was the result of an unusual and unlikely to be repeated concatenation of events. Mr Parker had previously exercised right of entry at the NEXT DC P2 Project on more than 20 occasions which were not complained about by the Commissioner, and Mr Parker’s improper conduct on 5 December 2019 was, in the context of those entries, said to be a deviation from the norm, which was explained and contextualised. On 2 July 2021, at the request of the parties, the Court endorsed consent orders in WAD197 of 2020: declaring one contravention of s 500 of the FW Act by the CFMMEU; requiring each of the CFMMEU’s relevant permit holders based in WA, including Mr Parker (but not Mr Windus who had left the Union) to attend training addressing the obligations of a permit holder under Pt 3-4 of the FW Act; and programming the matter for a hearing on the amount of penalty, if any, to be imposed on the CFMMEU for the admitted contravention of s 500 of the FW Act. On 28 September 2021, the parties filed a supplementary statement of agreed fact, which confirmed that the CFMMEU’s relevant permit holders based in WA, including Mr Parker, had, in the period of 7 to 9 September 2021, attended the training addressing the obligations of a permit holder under Pt 3-4 of the FW Act. The penalty hearing in WAD197 of 2020 occurred on 29 October 2021.
70 All of the CFMMEU’s contraventions of s 500 should be taken into account, particularly those involving officials acting in an improper manner while exercising a right of entry. Similarly, to the extent that the Western Australian cases inform the circumstances of the present contravention, they should be given more weight. In this case, it is relevant that Mr Parker has been involved in a subsequent contravention of s 500: see Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2014] FCA 160 (at [54]-[58]) and Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Constitution Place Case) [2020] FCA 1070; (2020) 299 IR 231 (at [153]-[160]). However, it is also relevant that Mr Parker has since been required to attend relevant training.
71 The CFMMEU has also demonstrated cooperation in reaching agreement on liability, including the admission of contravention and preparation of the SAFA. The Commissioner’s original application was broader in scope than that which is now before the Court. The Commissioner agreed to discontinue the proceedings against Messrs Windus and Parker. The CFMMEU agreed to discontinue its cross-claim. The CFMMEU’s cooperation followed a process of mediation and has relieved the parties and the Court of the need to prepare for and conduct what would have been a substantial trial. The CFMMEU has accepted wrongdoing and ought to be given some credit for giving substantial cooperation at the earliest reasonably available time: Queensland Infrastructure Case (at [163]) cited in Pattinson (at [116]); see also Australian Building and Construction Commissioner v Australian Workers’ Union [2021] FCA 861; (2021) 308 IR 195 (at [44]-[45]).
72 The size of CFMMEU is relevant to the determination of penalty. However, there is no need for heightened deterrence, whether relative to the CFMMEU’s size or otherwise, on the facts in this case. The need for specific deterrence to ensure compliance is diminished including where the instant contravening was low-grade, Mr Windus is no longer employed by the CFMMEU and WA permit holders, including Mr Parker, recently received appropriate training. An appropriate penalty which is proportionate to the low-grade conduct for which the CFMMEU is wholly derivatively liable, which takes into account but does not re-penalise the CFMMEU for its past conduct and builds in a meaningful discount for the CFMMEU’s cooperation and corrective action is an amount in the low mid-range compared with the maximum. However any penalty below one-third of the maximum would be unlikely to operate as any deterrent to the CFMMEU. I fix the penalty at $23,000.
73 Finally, I should explain why I think it is appropriate to make a declaration (to which the parties have consented). It may be thought that a declaration in this instance serves no apparent additional functionality. It may also be a matter of indifference to either party whether or not a declaration is made. Further, the court’s disapproval of the contravening conduct should be apparent from the reasons themselves. But the reality is that very few people will examine these reasons, let alone closely, particularly given this relatively minor contravention. It is helpful at least in this case, to see at a glance what events or incident the penalty relates to and why it is being imposed. It is right also, I think, for the Court itself to consider whether or not it should record its disapproval of the contravening conduct. In this case for the reasons given I consider it should do so.
I certify that the preceding seventy-three (73) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice McKerracher. |
Associate:
