Federal Court of Australia

Civil Air Operations Officers’ Association of Australia v Airservices Australia (No 2) [2022] FCA 1077

ORDERS

THE COURT ORDERS THAT:

1.    The respondent pay pecuniary penalties totalling $12,750.00.

2.    The sum referred to in order 1 be paid to the applicant within 28 days.

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

REASONS FOR JUDGMENT

SNADEN J:

Introduction

1    The respondent, Airservices Australia (“Airservices”), employs (amongst others) air traffic controllers (“ATCs”) throughout Australia. It is a statutory authority established pursuant to the Air Services Act 1995 (Cth). The applicant, the Civil Air Operations Officers’ Association of Australia (“Civil Air”), is an employee organisation registered as such pursuant to the Fair Work (Registered Organisations) Act 2009 (Cth).

2    Airservices maintains a policy known as the “ATC Career Model” (hereafter, the “Policy”) and has done so for some time. It has been subject to multiple iterations. The Policy records processes by which ATCs can monitor and manage their career progression, and identifies levels of skill and experience required for potential career development within Airservices. In March 2015, Airservices introduced some changes to what was then “version 2” of that instrument. It did so without first consulting with its employees or Civil Air. That failure sounded in Airservices’ contravening provisions of the Airservices Australia (Air Traffic Control and Supporting Air Traffic Services) Enterprise Agreement 2012-2015 (the “2012 EA”); and, thereby, in its contravention of section 50 of the Fair Work Act 2009 (Cth) (the “FW Act”). As much was determined by the judgment of this court in Civil Air Operations Officers’ Association of Australia v Airservices Australia [2021] FCA 1030 (hereafter, the “Liability Judgment”; Snaden J).

3    The court is now called upon to determine what remedies might appropriately be imposed in respect of Airservices’ contraventions of s 50 of the FW Act (hereafter, the “Contravening Conduct”). That question was the subject of separate submissions and a separate penalty hearing, scheduled after the Liability Judgment was pronounced. As is usually the case in matters such as this, two species of remedy assume particular significance: declaratory relief and the imposition of pecuniary penalties.

4    Civil Air invites the court to:

(1)    impose upon Airservices a penalty set at 50 to 75 per cent of the maximum available for a single contravention under the FW Act; and to

(2)    grant relief in the form of declarations consistent with what the Liability Judgment determined.

5    Airservices submits that the court should impose declaratory relief only. In the alternative, it submits that any penalty or penalties that the court might impose should be set at the “lower end” of what the FW Act permits.

6    For the reasons that follow, I am satisfied that it is appropriate to impose upon Airservices pecuniary penalties in the sum of $12,750.00 (being 25 per cent of the maximum available under the FW Act for a single contravention of s 50). I am not satisfied that there is any utility in granting—which is to say that I do not consider it appropriate to grant—declaratory relief additional to the penalties that I consider to be appropriate. That being so, none shall be granted.

Background

7    The nature of the Contravening Conduct is explored in the Liability Judgment. In the analysis that follows, some familiarity with that judgment is assumed; but, by way of summary, it suffices to note that:

(1)    in March 2015, “version 3” of the Policy took effect, introducing various changes;

(2)    those changes were of kinds sufficient to trigger consultation requirements imposed upon Airservices by cll 7 and 8 of the 2012 EA; and

(3)    Airservices did not consult with its employees or their representatives about those changes.

8    By the Liability Judgment, the court drew the following conclusions (at [167]):

However generous cll 7 and 8 of the 2012 EA might appear, their application is clear enough. Airservices was not at liberty to adopt version 3 of the ATC Career Model without first consulting with its employees and Civil Air. Having done so, it contravened those provisions and, by extension, s 50 of the FW Act.

9    The Contravening Conduct thus lies in Airservices’ failure to consult about the changes to the Policy that were introduced by “version 3” in March 2015; specifically, its failure to consult in accordance with the requirements of cll 7 and 8 of the 2012 EA.

10    The nature of the changes to the Policy that were introduced in March 2015 is uncontroversial. It was the subject of some analysis in the Liability Judgment (at [54]):

Version 3 of the ATC Career Model introduced a wide array of changes. It is necessary to record only some of them. Amongst other things, version 3 of the ATC Career Model:

(1)    removed what had previously been a requirement for Airservices’ ATC Executive Management Team to meet every six months to review training, work experience opportunities and requests across the ATC group; and

(2)    increased the number of years’ experience that an employee required (or would typically require) before qualifying for consideration for various career-development opportunities.

11    Perhaps of greater significance, version 3 of the Policy also introduced a new term, cl 4.3, concerning some performance requirements applicable to staff who were transferred from one location to another. Relevantly (and in part), that provision (the “Transfers Amendment”) read as follows:

Staff who fail to achieve required endorsements/ratings at the requested unit will be subject to the provisions of [a separate “Performance Improvement Procedure”], and have no entitlement to return to their previous location/unit…

The evidence relevant to relief

12    Both parties led evidence for the purposes of assisting the court in determining what, if any, relief it should grant in connection with the Contravening Conduct.

13    In Civil Air’s case, that evidence assumed the form of four affidavits: two affirmed by Mr David Irvine (an ATC and elected official of Civil Air); one affirmed by Mr Brett Hands (an ATC and former Civil Air official); and one affirmed by Mr Peter McGuane (Civil Air’s Executive Secretary). All were read subject to various objections that were addressed at the commencement of the penalty hearing.

14    Airservices led evidence in the form of an affidavit of its Head of Airspace Services, Mr Rodney Sciortino.

15    None of the deponents was required for cross-examination at the penalty hearing.

16    Civil Air’s evidence—particularly the affidavits of Messrs Hands and Irvine—tended to suggest that the changes to the Policy visited several impacts upon Airservices’ employees. Mr Irvine’s evidence was that the new Transfers Amendment term, for example, was a deviation from the “standard practice” that existed (or otherwise applied) under version 2 of the Policy. His evidence suggested that employees who transferred locations were afforded “an express right to return to a previous location if [he or she] failed [his or her] training at the new location”.

17    Civil Air’s evidence was that employees who accepted transfers did not realise that they were at risk under version 3 of the Policy of being performance managed or dismissed if they failed to meet requisite standards at their new location. Mr Hands gave evidence that, after becoming aware that the Transfers Amendment had been introduced into version 3 of the Policy, he withdrew an application that he had made for a transfer. Mr Irvine gave evidence about his participation in a transfer from one location to another. His evidence was that, if he had known about the risk of dismissal inherent in the Transfers Amendment, he would not have embarked upon that course.

18    Mr McGuane also gave evidence of the impact on ATCs arising from the removal of the requirement for bi-annual management meetings. He suggested that it affected the “transparency over the sharing of information” between Airservices and its employees.

19    By his evidence, Mr Sciortino:

(1)    acknowledged and accepted that the Liability Judgment had determined that Airservices had acted inconsistently with the 2012 EA;

(2)    acknowledged that Airservices’ conduct in that regard was regrettable;

(3)    deposed that Airservices has since “implemented a range of mechanisms directed at institutionalising regular consultation and engagement with employees and Civil Air” that “go beyond” what was required under the 2012 EA;

(4)    deposed that one such innovation was the development of a working group with employees (and employee representatives), the National Joint Working Group (the “NJWG”); and

(5)    deposed that Airservices had suffered a 70 per cent decline in revenue during the financial year ending 30 June 2021 (when compared against the financial year ending 30 June 2019), resulting in a net loss after tax of $470 million (excluding government grants).

The statutory framework

20    Section 50 of the FW Act states, simply, that:

A person must not contravene a term of an enterprise agreement.

21    Section 50 of the FW Act is a “civil remedy provision”: FW Act, s 539. Insofar as concerns conduct engaged in in contravention of it, the court may make any order that it considers appropriate: FW Act, s 545(1). There is little doubt that that extends to the granting of declaratory relief, which is a remedy that the court is empowered to grant in any event: see Federal Court of Australia Act 1976 (Cth), s 21.

22    The court is also empowered to impose a pecuniary penalty in respect of such conduct. Relevantly in that regard, s 546(1) of the FW Act provides as follows:

546 Pecuniary penalty orders

(1)    The Federal Court, the Federal Circuit and Family Court of Australia (Division 2) or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.

23    Section 557(1) of the FW Act also assumes some importance to the present matter. It provides as follows:

557 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.

24    Section 50 is one such civil remedy provision: FW Act, s 557(2)(c).

Declaratory relief

25    For the reasons outlined below, I am of the view that it is appropriate to impose upon Airservices pecuniary penalties for its Contravening Conduct. Having so concluded, the court must determine whether it is also appropriate to grant declaratory relief (as Civil Air requests).

26    In Construction, Forestry, Maritime, Mining and Energy Union v Milin Builders Pty Ltd [2019] FCA 1070 (hereafter, “Milin Builders”), I made (at [77]-[78]) the following observations about the court’s power to grant declaratory relief in matters such as this (emphasis added):

The granting of declaratory relief involves an exercise of judicial discretion: Ainsworth, 581 (Mason CJ, Dawson, Toohey and Gaudron JJ); Cruse v Multiplex Ltd & Ors (2008) 172 FCR 279 (hereafter, “Cruse”), 299 [55] (Goldberg and Jessup JJ, Gray J dissenting but not on that point); McLeish v Faure (1979) 25 ALR 403, 414-415 (Sweeny, Evatt and Northrop JJ). That discretion, it has been said, should “…be exercised ‘sparingly,’ with ‘great care and jealousy,’ with ‘extreme caution,’ [and] with ‘the utmost caution’” and, at all events, with “…a proper sense of responsibility and a full realisation that judicial pronouncements ought not to be issued unless there are circumstances that call for their making”: Ibeneweka v Egbuna [1964] 1 WLR 219, 224-225 (Viscount Radcliffe, Guest and Upjohn LLJ); Ainsworth, 596 (Brennan J).

Ordinarily, it will not be appropriate to grant declaratory relief unless it can be said that there is some utility in doing so: Ainsworth, 582 (Mason CJ, Dawson, Toohey and Gaudron JJ); Truth About Motorways Pty Ltd v Macquarie Infrastructure Investment Management Limited (2000) 200 CLR 591, 613 [52] (Gaudron J); Lifeplan Australia Friendly Society Ltd v Ancient Order of Foresters in Victoria Friendly Society Limited (No 2) [2017] FCAFC 99, [3] (Allsop CJ, Middleton and Davies JJ); Australian Competition and Consumer Commission v MSY Technology Pty Ltd & Ors (2012) 201 FCR 378, 388 [35] (Greenwood, Logan and Yates JJ); Aussie Airlines Pty Ltd v Australian Airlines Ltd (1996) 68 FCR 406, 414 (Lockhart J, with whom Spender and Cooper JJ agreed); Tobacco Institute of Australia Ltd v Australian Federation of Consumer Organisations Inc (No 2) (1993) 41 FCR 89 (“Tobacco Institute”), 99 (Sheppard J); Ogawa v Attorney-General (No 2) [2019] FCA 1003, [50] (Logan J).

27    A question thus arises: is there is any utility in here making a declaration or declarations in the form sought by Civil Air?

28    In some circumstances, courts have been moved to grant declaratory relief (in addition to other forms of relief) as a means of marking their disapproval of the conduct brought before them. In Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (CFMEU) (2017) 254 FCR 68 (Dowsett, Greenwood and Wigney JJ), the full court said (at 87, [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…

29    Civil Air submits that the present matter is one in which declaratory relief would serve an educative purpose and/or would otherwise vindicate its claim. Separately, it is said that there is utility in granting declaratory relief because doing so would ensure that the court could identify with clarity the conduct in respect of which Airservices is to be penalised. Civil Air submits that:

Here, the making of a declaration for this purpose has particular utility where only one of the applicant’s claims [was] upheld (and where it was recorded in one out of 168 paragraphs). The declaration serves to make clear which of the applicant’s claims were vindicated and (if a penalty is imposed) to make clear the conduct for which the respondent is penalised.

30    I am not persuaded that the circumstances here warrant the granting of declaratory relief. The Liability Judgment—and, indeed, these reasons—already identify the conduct in respect of which Airservices is to be penalised. I do not accept that a grant of declaratory relief would serve any educative, deterrent or clarifying purpose additional to that which is already achieved by these reasons, the Liability Judgment and the penalty that I consider is appropriate to impose.

31    That being so, I do not consider that it is appropriate to grant declaratory relief and none shall be granted.

Pecuniary penalties

General principles

32    For present purposes, the maximum penalty that can be imposed for a single contravention of s 50 is 300 penalty units: FW Act, ss 546(2) and 539(2). It was not controversial that, at the time that the Contravening Conduct took place, 300 penalty units totalled $51,000.00.

33    The principles that guide the determination of pecuniary penalties have been frequently cited and were not materially in contest. They have been the subject of recent High Court and full court consideration: Australian Building and Construction Commissioner v Pattinson (2022) 175 ALD 383, 386 [9], 389 [19] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ); Australian Building and Construction Commissioner v Australian Workers’ Union [2022] FCAFC 143, [99]-[101] (Moshinsky and O’Callaghan JJ, Snaden J agreeing).

34    In Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (College Crescent Case) (2020) 295 IR 446, I identified the relevant principles as follows (at 458-459 [32]–[35]):

In determining what penalties are appropriate in the present case, the court’s discretion is very broad: A and L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2008] FCA 466 at [6] (Gyles J). The task of assessing what amount to impose is one of “instinctive synthesis” that involves the selection of a figure that takes due account of all factors relevant to the particular case: Wong v The Queen (2001) 207 CLR 584 at [75] (Gaudron, Gummow and Hayne JJ); Markarian v The Queen (2005) 228 CLR 357 at [37] (Gleeson CJ, Gummow, Hayne and Callinan JJ); Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) (2018) 260 FCR 68 at [55] (Allsop CJ, Davies and Wigney JJ); Australian Competition and Consumer Commission v Reckitt Benckiser (Aust) Pty Ltd (2016) 340 ALR 25 at [44] (Jagot, Yates and Bromwich JJ).

What those factors are will be case-specific, although the authorities are replete with recurring examples of matters to which regard has properly been had in the exercise of the broad discretion at play. In Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at [91] Buchanan J (with whom, in the result, Gray and Graham JJ agreed), considered those recurring factors and what was, at the time, an emerging tendency to treat them as “checklists”. His Honour noted:

Checklists of this kind can be useful providing they do not become transformed into a rigid catalogue of matters for attention. At the end of the day the task of the Court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations.

The sole object to which the court must give effect in setting an appropriate penalty is to deter repetition of the conduct in respect of which it is imposed: Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (Non-Indemnification Personal Payment Case) (2018) 264 FCR 155; 280 IR 28 at [19] (Allsop CJ, White and O’Callaghan JJ; the NIPP Case). That requires that the court should strive to “… put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene”: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68; 271 IR 321 at [98] (Dowsett, Greenwood and Wigney JJ); Trade Practices Commission v CSR Ltd [1991] ATPR 41-076 at 52,152 (French J). In the NIPP Case, the full court set the task in the following terms (at 167-168):

19 It is unnecessary to engage in any extended discussion of principle. Of particular significance is the recognition that deterrence (general and specific) is the principal and indeed only object of the imposition of a penalty — to put a price on contravention that is sufficiently high to deter repetition by the contravener and others who might be tempted to contravene the Act: French J in Trade Practices Commission v CSR Ltd [1990] FCA 762; [1991] ATPR 41-076 at 52,152, cited by the plurality in Commonwealth v Director of the Fair Work Building Industry Inspectorate (Civil Penalties Case) [2015] HCA 46; (2015) 258 CLR 482 at [55]. Retribution, denunciation and rehabilitation have no part to play.

20 Relevant factors in the overall assessment of penalty were helpfully listed by French J in CSR. They have been adopted in many cases. For present purposes, they can be restated as follows: the nature, character and seriousness of the conduct; the loss and damage caused; the circumstances in which the conduct took place; the size of the contravener and its degree of power; the deliberateness of the conduct and the time over which it occurred; the degree of involvement of senior officials or management; the culture of the organisation as to compliance or contravention; and, any co-operation with the regulator and contrition.

21 The seriousness of the contravention and other features of the conduct which may be seen as relevant to it … find their place in understanding the degree of deterrence that is necessary to be reflected in the size of the penalty: Flight Centre Ltd v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; 260 FCR 68 at [71].

22 The overwhelming importance of deterrence as the protective purpose of the penalty does not exclude the need to determine a penalty which is proportionate to the contravening conduct. The history of contravention is to be taken into account in fixing the proper level of penalty for the proportionate response to the contravention in question. Proportionality has within it the need to characterise the seriousness of the contravention. Proportionality of penal response to a contravention assessed by reference to its seriousness and gravity is an essential characteristic of the application of the statute. The penal response is for that contravention, not earlier contraventions: Veen v The Queen (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 477-478. Prior contraventions may reveal an apparent disregard for the Act and the need for deterrence by a penalty at a level appropriate to achieve that objective. It is to be borne in mind, however, that it is for the conduct in question that the penalty is imposed, not for prior conduct.

Realising the sole objective to which its imposition is directed requires that a pecuniary penalty “…must be fixed with a view to ensuring that the penalty is not such as to be regarded by [the] offender or others as an acceptable cost of doing business”: Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249, 265 [62]-[63] (Keane CJ, Finn and Gilmour JJ); Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640, 659 [66] (French CJ, Crennan, Bell and Keane JJ); Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 249 FCR 458, 481 [101] (Dowsett and Rares JJ, North J dissenting; the Perth Airport Case).

Nature and seriousness of Airservices’ conduct

35    Civil Air submits that the Contravening Conduct is, by nature, very serious. It says that, by it, employees were deprived of the opportunity to persuade Airservices not to introduce the changes to which version 3 of the Policy gave effect. Approximately 1,000 employees were affected by those changes, with whom Airservices was obliged to consult before doing what was done. Such consultation, it was said, ought to have involved Airservices inviting its employees (and their representatives) to voice their views about the changes that it proposed to make to the Policy and to identify alternatives to them. Civil Air contends, on the strength of the evidence that it led, that the changes that were made to the Policy were profound, which should inform the court’s assessment of the seriousness of Airservices’ failure.

36    Airservices submits that there is no evidence to suggest that the changes that version 3 of the Policy introduced would not have transpired even had there been consultation under cll 7 and 8 of the 2012 EA. It submitted that the impacts that the changes visited upon employees were limited and, by nature, predominantly (if not wholly) theoretical.

37    Both sets of observations are fair. An employee’s right to be consulted about matters that affect them is no mere triviality. Where it exists, it serves a purpose whose importance should not be understated. As this court has repeatedly found, it is a right of some significance: see Civil Air Operations Officers’ Association of Australia v Airservices Australia [2019] FCA 1542, [40] (Mortimer J); see also Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Ltd (No 2) [2010] FCA 652, [36]-[37] (Logan J). Here, employees were wrongly deprived of its undoubted value.

38    Nonetheless, the nature of the changes that were effected without consultation is also relevant. In that respect, the evidence tends to suggest that the impact that the changes to version 2 of the Policy visited upon Airservices’ employees (perhaps other than Mr Hands) was not especially profound in any practical sense. With the possible exception of Mr Hands, there was no evidence of any ATCs whose career trajectory was any different on account of the changes (or, more accurately, the failure to consult about them). Although it is likely that the changes had at least some impact on Airservices’ employees (not least in that they are likely to have made decisions related to their career progression without a proper appreciation of the policy framework that ought to have informed them), such evidence as there is does not persuade me that it was seriously prejudicial to them in practice.

39    Insofar as concerns employee transfers (and the impact of the Transfers Amendment), it is not clear on the evidence if any employees who transferred from one location to another subsequently failed to achieve the required standards and thereafter were dismissed or performance managed.

40    It is also not clear what might have been said in opposition to the changes had Airservices complied with its obligations to consult, nor that any such representations might have resulted in any kind of different outcome.

41    Those are matters that inevitably inform the court’s assessment of the value of the right that Airservices’ employees (and Civil Air) were denied (and, thereafter, of the nature and seriousness of the conduct by which they were denied it); but the evidence does not permit anything in the way of informed speculation on that front (at least not insofar as concerns the practical impacts visited upon employees).

42    I am persuaded that Airservices’ Contravening Conduct was serious insofar as it had the effect of depriving Civil Air and its members (and perhaps others) of a valuable and important right that formed part of the industrial bargain that applied to them. But I do not accept that it was so serious as to have resulted in profound or widespread adverse practical consequences for ATCs.

Contrition and corrective action

43    Airservices invites the court to conclude that it has shown at least some measure of contrition for having engaged in the Contravening Conduct. It points, in that regard, to the evidence of Mr Sciortino; in particular, to the acknowledgment contained in his affidavit that “…by not consulting with employees before adopting version 3 of the ATC Career Model, Airservices acted inconsistently with clauses 7.2 and 8 of the [2012 EA]” and to his expression of “regret” that it did so.

44    Without doubting the sincerity with which those observations were offered, I am not persuaded that much should be made of them. Mr Sciortino’s affidavit was prepared for the purposes of the penalty hearing. It is not directed to employees and cannot sufficiently be characterised as an apology; and certainly not one directed to them. There is no evidence of any internal correspondence or acknowledgement of wrongdoing that the respondent could rely on as evidence of contrition. Respectfully, Mr Sciortino’s expression of regret, though not irrelevant, is not as compelling as it could have been.

45    Airservices also points to the establishment of the NJWG, which it says is evidence of its commitment to consult with its employees and their representatives. It is clear that the NJWG was not established in response to the present contraventions. The development of the NJWG, as a consultative body, is relevant only insofar as it demonstrates Airservices’ commitment to consultation moving forward. I accept that it does. Plainly for present purposes, the interests of deterrence—or specific deterrence, at the least—loom less large on account of that commitment than they otherwise might, which is a circumstance that informs what an appropriate penalty might here look like.

Other transgressions

46    In the usual course, the deterrent effect to which the setting of an appropriate penalty is directed should take account of a wrongdoer’s propensity to engage in the conduct that warrants it. Where, for example, a specific instance of contravening conduct can be seen as a manifestation of a wrongdoer’s broader tendency to engage in that (or a similar) species of conduct, a more severe penalty might be warranted in order to realise the desired deterrent effect.

47    That observation has at least some resonance presently, in that the Contravening Conduct is not the only example of a time that Airservices has failed to meet its obligations to consult about certain matters (and has thereby contravened s 50 of the FW Act). The other occasions—which are described below—are matters of record and were not in contest. However, because all of them post-dated the conduct presently in focus, there was some debate about how, if at all, they might properly bear upon the court’s assessment of an appropriate penalty in this matter.

48    Before addressing that contest, I should identify the other occasions upon which Civil Air relies.

49    In December 2015—approximately nine months after it introduced version 3 of the Policy—Airservices required two of its employees to take “recreational leave” during the Christmas/New Year period. By doing so, it contravened cl 36.8(b) of the 2012 EA (which required that employees be consulted about “annual leave programs” applicable to them) and, thereby, s 50 of the FW Act: Civil Air Operations Officers’ Association of Australia v Airservices Australia [2019] FCA 1542 (Mortimer J). The court determined that, by requiring the employees to take leave over the “shut down” period, Airservices had “developed and implemented” an annual leave program without first discharging its obligation to consult the affected employees. In September 2019, the court imposed upon Airservices a pecuniary penalty of $12,000 in respect of that conduct.

50    In 2018, there was a similar failure. It concerned the unilateral withdrawal by Airservices of what were known as "Grey Day Guidelines”. That instrument recorded certain processes that Airservices maintained for the purposes of rostering and paying employees who performed a duty or “stand-by” function. The applicable enterprise agreement (a successor instrument to the 2012 EA) contained consultation obligations similar (if not identical) to those relevant now. They were not complied with. That failure also came before this court and, on 20 August 2021, a pecuniary penalty of $40,950.00 (or 65 per cent of the available maximum) was imposed upon Airservices in connection with its failure to consult prior to withdrawing the “Grey Day Guidelines”: Civil Air Operations Officers’ Association of Australia v Airservices Australia (No 2) [2021] FCA 993 (Murphy J). An appeal from that judgment is pending but nothing turns upon that presently.

51    A similar failure transpired in 2019, when Airservices took various steps unilaterally to implement a directive of the Civil Aviation Safety Authority. Again, it was alleged in this court that Airservices had done so without first complying with consultation obligations that were imposed upon it by an applicable enterprise agreement. The court broadly accepted that contention: Civil Air Operations Officers Association of Australia v Airservices Australia [2021] FCA 1313, [162]-[165] (Bromberg J).

52    Civil Air submits that Airservices’ failures in 2015, 2018 and 2019 to consult as required reflects a measure of historic indifference to those (or equivalent) obligations, which should inform this court’s assessment of what penalty is appropriate in the present matter. Airservices submits that, because the other examples of contravening conduct all took place after the failure with which the court is currently seized, they should have little or no bearing on the court’s current task.

53    In Civil Air Operations Officers’ Association of Australia v Airservices Australia (No 2) [2021] FCA 993, [130]-[133], Murphy J made the following observations that are relevant to the question at hand:

…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.

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.

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).

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.

54    His Honour was, of course, there dealing with a chronology not precisely replicated here. In this matter, the conduct warranting relief took place not just prior to the imposition of penalties related to similar transgressions; here, the relevant conduct also pre-dated those transgressions.

55    I do not accept that Airservices’ failures in 2015, 2018 and 2019 to honour its various consultation obligations are irrelevant for present purposes. They are, in my view, circumstances that are capable of informing the deterrent effect to which the setting of a penalty in this case must be directed. To borrow from the observations of Dowsett J in Temple v Powell (2008) 169 FCR 169, 188 [64], they constitute a:

…general record of conduct of the relevant offender, his or her attitude to the law as disclosed by such conduct, apparent attempts at rehabilitation and similar considerations. Repeated conduct of a particular kind may lead to an identified need to provide some particularly persuasive form of deterrent against similar future misconduct.

56    It follows that, in fashioning a penalty that is appropriate for present purposes, I take account of Airservices’ conduct since March 2015, including that which has been the subject of findings and admonition in this court.

Size and finances

57    Airservices’ evidence was that the COVID-19 pandemic and the consequent downturn experienced by the aviation industry has, in recent times, precipitated a dramatic loss of revenue, which in turn, it says, should inform the court’s assessment of what an appropriate penalty might here look like. It was not controversial (and I readily accept) that a wrongdoer’s size and financial strength (which, of course, are often if not usually related) are relevant criteria for the court to consider when fashioning appropriate penalties.

58    Whatever might be said of the financial position in which Airservices now finds itself, two considerations bear noting. The first concerns Airservices’ quasi-public nature: it is, of course, a statutory corporation whose operations are largely underwritten by taxpayers. It might well be that, in recent years, it has become more reliant on taxpayer funds than is ideal; but (and this is the second consideration of note) it could hardly be supposed that any penalty that this court might impose in respect of the Contravening Conduct might suffice to imperil the important public function with which it is charged.

Involvement of senior management

59    It is plain that senior representatives of the respondent were aware of and were directly involved in the introduction of version 3 of the Policy. It was uncontroversial that the amendments made in version 3 of the Policy were authored by Mr Rajesh Mishra, Senior Advisor, ATC Workforce, and Mr Craig Charker, Manager, ATM Planning and Resourcing. The authors clearly have some authority within the respondent—enough to be responsible for amending the Policy, which affected approximately 1,000 ATCs. Airservices did not provide any evidence or alternative explanation sufficient to displace the inference that its senior management was involved in, or at least aware of, the changes that were made to the Policy. That is properly a circumstance to which this court might here have regard in setting an appropriate penalty and I do so.

Course of conduct

60    Although the Contravening Conduct here gives rise to two contraventions of s 50 of the FW Act, it was not controversial that each arises from the same course (if not instance) of conduct: specifically, Airservices’ failure to consult with its employees and Civil Air prior to implementing version 3 of the Policy. That reality suffices to invoke the “course of conduct” principle that informs the setting of pecuniary penalties (or its statutory analogue in s 557 of the FW Act).

61    In Construction, Forestry, Mining and Energy Union v Cahill (2010) 269 ALR 1, 12 [39], Middleton and Gordon JJ made the following observations about the course of conduct principle:

The principle recognises 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. That requires careful identification of what is “the same criminality” and that is necessarily a factually specific enquiry.

(Emphasis omitted)

62    The principle is concerned to secure “appropriate penal relief that does not punish twice for the same conduct”: Transport Workers’ Union of Australia v Registered Organisations Commissioner (No 2) (2018) 267 FCR 40, 59 [91] (Allsop CJ, Collier and Rangiah JJ).

63    In the present circumstances, each of the statutory contraventions attributable to Airservices arose from its failure to consult with its employees and Civil Air prior to implementing version 3 of the Policy. Each arose from the same course (or instance) of conduct and, that being so, it is appropriate that the court should impose only a single penalty (or two penalties set having regard to the maximum available for a single contravention). Anything else risks punishing the respondent twice for the same conduct.

Disposition

64    In all of the circumstances, I consider that it is appropriate to impose upon Airservices pecuniary penalties totalling 25 per cent of the maximum available for a single contravention of s 50 of the FW Act—in other words, penalties totalling $12,750.00. I am satisfied that this is an appropriate penalty that is proportionate to the Contravening Conduct and that will serve to deter the respondent (and others) from similar misconduct in the future.

Conclusion

65    That penalty sum identified above ($12,750.00) should, in the usual way, be payable to the applicant within 28 days. Section 570(1) of the FW Act prohibits the court from awarding costs in the present circumstances and no order will be made on that front.

Associate:

Dated:    14 September 2022