Federal Court of Australia

Fair Work Ombudsman v Blakeley [2023] FCA 1121

ORDERS

THE COURT DECLARES BY CONSENT THAT:

1.    In contravention of s 500 of the Fair Work Act 2009 (Cth), the first respondent acted in an improper manner on 23 November 2020, at the project known as the “Central Energy Plant Towers Upgrade” located near to the Queensland Museum at the corner of Grey and Peel Street, South Brisbane in Queensland, by:

(a)    directing workers to cease work; and

(b)    using abusive language towards Mr Rohan Matthew Howard.

2.    By reason of s 550(1) of the Fair Work Act 2009 (Cth), the second respondent was, by way of act or omission, directly or indirectly, knowingly concerned in or party to the first respondent’s contravention in paragraph 1(a) above and, as a result, the second respondent contravened s 500 of the Fair Work Act 2009 (Cth).

3.    By reason of ss 793(1) and 550(2)(c) of the Fair Work Act 2009 (Cth), the third respondent was, by way of act or omission, directly or indirectly, knowingly concerned in or party to the contraventions set out at paragraph 1 above and, as a result, the third respondent contravened s 500 of the Fair Work Act 2009 (Cth).

THE COURT ORDERS THAT:

1.    The first respondent pay one pecuniary penalty of $7,500.

2.    The second respondent pay one pecuniary penalty of $4,500.

3.    The third respondent pay one pecuniary penalty of $50,000.

4.    The pecuniary penalties referred to in Orders 1 to 3 above be paid to the Commonwealth of Australia within 28 days of the date of these Orders.

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

REASONS FOR JUDGMENT

THOMAS J:

INTRODUCTION

1    Between September 2020 and May 2021, a construction project was being undertaken at the Queensland Museum, South Brisbane (the Project Site). Mr Andrew Blakely (the first respondent) and Mr Beau Seiffert (the second respondent) were employed by the Construction, Forestry, Maritime, Mining and Energy Union (the CFMMEU) (the third respondent) and entered the Project Site as agents of the CFMMEU.

2    Upon attending the Project Site, the first respondent directed workers to cease work for a period of time and used offensive and obscene language towards the site manager.

3    The Fair Work Ombudsman (the applicant) alleged that the conduct of the respondents contravened ss 500 and 550 of the Fair Work Act 2009 (Cth) (the Act). By the respondents’ amended defence filed 25 August 2022, the respondents admitted to the conduct detailed above and admitted to contravening s 500 of the Act. The only question which remains before the Court is the question of the appropriate penalty and whether the Court should make the declarations sought by the applicant.

4    The applicant sought the following declarations, which the respondents do not oppose:

1.    A declaration that, in contravention of s.500 of the [Act], [the first respondent] acted in an improper manner on 23 November 2020, at the project known as the ‘Central Energy Plant Towers Upgrade’ located near to the Queensland Museum at the corner of Grey and Peel Street, South Brisbane in Queensland [the Project Site]), by:

a.    directing workers to cease work; and

b.    using abusive language towards Mr Rohan Matthew Howard.

2.    A declaration that, by reason of s.550(1) of the [Act], [the second respondent] was, by way of act or omission, directly or indirectly, knowingly concerned in or party to [the first respondent’s] contravention in paragraph 1(a) above and, as a result, [the second respondent] contravened s.500 of the [Act].

3.    A declaration that, by reason of ss.793(1) and 550(2)(c) of the [Act], the [CFMMEU] was, by way of act or omission, directly or indirectly, knowingly concerned in or party to the contraventions set out at paragraph 1 above and, as a result, the CFMMEU contravened s.500 of the [Act].

5    The relevant sections of the Act provide:

500    Permit holder must not hinder or obstruct

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.

Note 1:    This section is a civil remedy provision (see Part 4-1).

Note 2:    A permit holder, or the organisation to which the permit holder belongs, may also be subject to an order by the FWC under section 508 if rights under this Part are misused.

Note 3:    A person must not intentionally hinder or obstruct a permit holder, exercising rights under this Part (see section 502).

…

550    Involvement in contravention treated in same way as actual contravention

(1)     A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.

Note:    If a person (the involved person) is taken under this subsection to have contravened a civil remedy provision, the involved person’s contravention may be a serious contravention (see subsection 557A(5A)). Serious contraventions attract higher maximum penalties (see subsection 539(2)).

(2)    A person is involved in a contravention of a civil remedy provision if, and only if, the person:

(a)    has aided, abetted, counselled or procured the contravention; or

(b)    has induced the contravention, whether by threats or promises or otherwise; or

(c)    has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or

(d)    has conspired with others to effect the contravention.

…

793    Liability of bodies corporate

Conduct of a body corporate

(1)    Any conduct engaged in on behalf of a body corporate:

(a)    by an officer, employee or agent (an official) of the body within the scope of his or her actual or apparent authority; or

(b)    by any other person at the direction or with the consent or agreement (whether express or implied) of an official of the body, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the official;

is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body.

State of mind of a body corporate

(2)    If, for the purposes of this Act or the procedural rules, it is necessary to establish the state of mind of a body corporate in relation to particular conduct, it is enough to show:

(a)    that the conduct was engaged in by a person referred to in paragraph (1)(a) or (b); and

(b)    that the person had that state of mind.

Meaning of state of mind

(3)    The state of mind of a person includes:

(a)    the knowledge, intention, opinion, belief or purpose of the person; and

(b)    the person’s reasons for the intention, opinion, belief or purpose.

…

THE FACTS

6    On 23 November 2020, the first and second respondents attended the Project Site and were met by the site manager. At approximately 10.30 am, the first and second respondents walked through the Project Site until they arrived at level 3 where they engaged in discussions with workers. During the course of these discussions, the first respondent raised an issue regarding the availability of water with the site manager. The conversation which followed was to the following effect:

[First respondent:]    Where is the water on this level? These guys aren’t fucking dogs.

[Site manager:]    There is a bubbler located on level 2 for these workers. It is outside the amenities on that level.

[First Respondent:]    It is in the fucking code - every 20 metres.

7    The first respondent then directed the workers in the area to come down from level 3 and move to level 2, saying words to the effect of: “Do not work here until water is available for you on this level” (the Cease Work Direction).

8    After the Cease Work Direction, the workers stopped working and the site manager said to the first respondent that water was being organised for the following day. The first respondent responded with words to the effect of “this is not fucking good enough and needs to be right now”. The site manager said to the first respondent that the concerns that the first respondent had raised would be resolved within the next hour, to which the first respondent (in the presence of the second respondent) said words to the effect of “well we are fucking waiting here until he comes back”.

9    The site manager arranged for water bottles to be made available on level 3, after which the workers returned to work on level 3. According to the applicant’s amended statement of claim, at 11.26 am it was approximately 32 degrees Celsius.

10    Shortly after 12.30 pm, the first respondent led the site manager to an area on level 3 of the Project Site where an area of walkway scaffolding was partially blocked (the Access Issue). The first respondent said words to the effect of “sort out the fucking access here”. The site manager, with the assistance of some workers, commenced resolving the Access Issue. While work was being undertaken to resolve the Access Issue, the first respondent said words to the effect of “you don’t know what the fuck you are doing”, “this shit should already be done immediately” and “this isn’t good enough”.

11    At approximately 1.15 pm, Work Health and Safety Queensland Inspectors (the Inspectors) arrived at the Project Site and undertook a walk around the Project Site with the site manager and the first and second respondents. The first and second respondents departed from the Project Site shortly after the walk concluded. Following the walk, three improvement notices were issued under the Work Health and Safety Act 2011 (Qld) (the WHS Act).

12    The applicant alleged that the first respondent contravened s 500 of the Act by giving the Cease Work Direction and by using abusive language towards the site manager. The applicant also alleged that the second respondent was “knowingly concerned” within the meaning of s 550(2)(c) of the Act in the first respondent’s alleged contravention of s 500 of the Act.

13    With respect to the CFMMEU, the applicant alleged that the CFMMEU was “knowingly concerned” within the meaning of s 550(2)(c) of the Act as each action taken by the first respondent was alleged to have been in his capacity as an officer of the CFMMEU.

14    The respondents admitted the contraventions and conceded that each respondent was liable to the imposition of a single pecuniary penalty.

THE CIVIL PENALTY PROVISIONS

15    Under s 546(1) of the Act, the Court may order that a person pay a pecuniary penalty that the Court considers appropriate.

16    The maximum penalty which may be imposed for a contravention of s 500 of the Act must not be more than the listed maximum penalty units referred to in column 4 of the table in s 539(2) for a person or five times that amount for a body corporate (s 546(2)). The maximum penalty for a contravention of s 500 is 60 penalty units (item 25 of the table in s 539(2)). At the relevant time, the value of a penalty unit was $222.

17    The maximum penalties which could be imposed on the first and second respondents are $13,320 each and for the CFMMEU is $66,600.

RELEVANT PRINCIPLES IN RELATION TO CIVIL PENALTY PROVISIONS

18    The High Court discussed the principles guiding the imposition of a civil penalty in Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 450; [2022] HCA 13 (Pattinson).

19    The plurality in Pattinson (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ) held that “the purpose of a civil penalty is primarily, if not solely, the promotion of the public interest in compliance with the provisions of the Act by the deterrence of further contraventions of the Act” (at [9]) and contrasted the civil penalty provisions to criminal sentencing (at [15]). The Court was required to take into account two aspects of deterrence, namely general and specific deterrence.

20    The penalty to be imposed “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” (Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54, approving the statement of the Full Federal Court in Singtel Optus Pty Ltd (ACN 052 833 208) v Australian Competition and Consumer Commission (2012) 287 ALR 249; [2012] FCAFC 20 at [62] (per Keane CJ, Finn and Gilmour JJ)).

21    The plurality in Pattinson (at [18]) also approved the factors outlined in Trade Practices Commission v CSR Ltd (1991) ATPR ¶41-076 (CSR Ltd), where French J (as his Honour then was) outlined several factors which informed the appropriate penalty level, albeit in the context of the Trade Practice Act 1974 (Cth) – although the principles remain relevant when considering the imposition of any civil penalty:

The assessment of a penalty of appropriate deterrent value will have regard to a number of factors which have been canvassed in the cases. These include the following:

1.    The nature and extent of the contravening conduct.

2.    The amount of loss or damage caused.

3.    The circumstances in which the conduct took place.

4.    The size of the contravening company.

5.    The degree of power it has, as evidenced by its market share and ease of entry into the market.

6.    The deliberateness of the contravention and the period over which it extended.

7.    Whether the contravention arose out of the conduct of senior management or at a lower level.

8.    Whether the company has a corporate culture conducive to compliance with the [Trade Practices] Act, as evidenced by educational programs and disciplinary or other corrective measures in response to an acknowledged contravention.

9.    Whether the company has shown a disposition to co-operate with the authorities responsible for the enforcement of the [Trade Practices] Act in relation to the contravention.

22    The plurality observed that the factors in CSR Ltd were not a rigid checklist and noted that the factors roughly fell into two groups: matters pertaining to the character of the contravenor; and to the character of the contravening conduct (Pattinson at [19]).

23    As the plurality held, any penalty imposed must be “‘proportionate’, where that term is understood to refer to a penalty that strikes a reasonable balance between deterrence and oppressive severity” (at [41]) and that “the discretion conferred by s 546 is, like any discretionary power conferred by statute on a court, to be exercised judicially, that is, fairly and reasonably having regard to the subject matter, scope and purpose of the legislation” (at [40]).

24    In NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 293, Burchett and Kiefel JJ (as her Honour then was) addressed the same principle of not being too high as to be oppressive:

[I]nsistence upon the deterrent quality of a penalty should be balanced by insistence that it “not be so high as to be oppressive”. Plainly, if deterrence is the object, the penalty should not be greater than is necessary to achieve this object; severity beyond that would be oppression.

25    The plurality in Pattinson held that the maximum penalty was not reserved for the most serious examples of conduct, provided the penalty to be imposed did not exceed what was necessary to achieve the object of deterrence (at [10]):

Nothing in the text, context or purpose of s 546 requires that the maximum penalty be reserved for the most serious examples of misconduct within s 349(1). What is required is that there be “some reasonable relationship between the theoretical maximum and the final penalty imposed”. That relationship is established where the maximum penalty does not exceed what is reasonably necessary to achieve the purpose of s 546: the deterrence of future contraventions of a like kind by the contravenor and by others.

(footnote omitted)

26    Further, the plurality concluded (at [49]) that:

The Full Court erred in treating the statutory maximum as implicitly requiring that contraventions be graded on a scale of increasing seriousness, with the maximum to be reserved exclusively for the worst category of contravening conduct. Nothing in the text of s 546, or its broader context, requires that the maximum constrain the statutory discretion in this way.

27    The plurality continued (at [50]) that the Court could fix penalties at the maximum where it was appropriate to do so, in the interest of ensuring deterrence:

Considerations of deterrence, and the protection of the public interest, justify the imposition of the maximum penalty where it is apparent that no lesser penalty will be an effective deterrent against further contraventions of a like kind. Where a contravention is an example of adherence to a strategy of choosing to pay a penalty in preference to obeying the law, the court may reasonably fix a penalty at the maximum set by statute with a view to making continued adherence to that strategy in the ongoing conduct of the contravenor’s affairs as unattractive as it is open to the court reasonably to do.

28    In summary, the imposition of a civil penalty is primarily for the purpose of deterrence: both specific deterrence against the contravenor; and general deterrence against anyone who might contravene. The penalty should strike a reasonable balance between achieving the objective of deterrence and being so high that it could be considered to be oppressive. That is to say, the penalty should be fixed at such an amount that it would not be considered as merely the cost of doing business. The Court should take into account matters pertaining to the character of the contravenor; the character of the contravening conduct; and the subject matter, scope and purpose of the underpinning legislation.

SUBMISSIONS

Applicant

29    The applicant submitted that the Court should impose the maximum penalty of $13,320 on the first respondent, a penalty of $10,500 on the second respondent and the maximum penalty of $66,600 on the CFMMEU. The applicant also sought non-indemnification orders to ensure that the first and second respondents are personally responsible for paying the penalties imposed upon them.

30    In addition to a pecuniary penalty, the applicant sought declarations pursuant to s 21 of the Federal Court of Australia Act 1976 (Cth) that: the first respondent contravened s 500 of the Act by directing workers to cease work and by using abusive language towards the site manager; the second respondent contravened s 500 of the Act by reason of s 550(1) of the Act; and the CFMMEU contravened s 500 of the Act by reason of ss 793(1) and 550(2)(c) of the Act.

31    The Court should not hesitate to fix the penalty imposed at the maximum. The conduct of the first respondent was deliberate and targeted. The second respondent had a much more passive role and therefore the appropriate penalty is approximately 80% of the maximum penalty.

32    The CFMMEU has a history of unlawful conduct and has been described as recidivist and to deliberately flout industrial laws: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68; [2017] FCAFC 113 (ABCC v CFMEU) at [158]-[159] (per Dowsett, Greenwood and Wigney JJ).

33    While the parties did admit their conduct, it was only on the eve of the trial date. Any such admissions does justify a reduction in penalty: Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (No 2) [2019] FCA 938 at [28] (per Wheelahan J). There has not been any indication of remorse or acceptance of responsibility.

34    The applicant highlighted 196 cases where penalties and declarations had been awarded against the CFMMEU or its representatives under either the Act, the Building and Construction Industry (Improving Productivity) Act 2016 (Cth), the Building and Construction Industry Improvement Act 2005 (Cth) or the Workplace Relations Act 1996 (Cth) (together the industrial laws). The CFMMEU has a significant history of offending which has not been altered by the imposition of penalties. The need for deterrence is high against the CFMMEU and warrants the imposition of the maximum penalty.

35    The need for specific deterrence is high for both the first and second respondents. The first respondent has been penalised thrice for contraventions of s 500 of the Act; and the second respondent has been penalised twice for contraventions of s 52(c) of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (the BCIIP Act) and s 500 of the Act. However, at the time of the conduct neither the first nor the second respondent had been penalised for a contravention. Notwithstanding the timing, these matters can be taken into account when imposing a penalty.

36    The first respondent’s Cease Work Direction and the use of obscene and offensive language was deliberate and targeted towards the site manager.

Respondents

37    The respondents submitted that the penalties which should be imposed are: for the first respondent between $5,000 and $6,500; for the second respondent between $3,000 and $4,500; and for the CFMMEU between $35,000 and $38,000. No non-indemnification order should be made.

38    The respondents conceded that the first respondent had no power to issue a Cease Work Direction, but workers were entitled to consult with him about their rights to cease working pursuant to s 118 of the WHS Act. The contravention arose because the conduct of the first respondent went beyond consulting with workers, but nevertheless was at the lower end of the scale of seriousness. The contraventions were the product of frustration with the lack of water and the safety concerns at the Project Site. As for the second respondent, his only contravention was his presence and failure to distance himself from the conduct of the first respondent during the contravening conduct.

39    The foul language used by the first respondent can be described as “sentence enhancers” and were used as punctuation and emphasis.

40    The period of the contravening conduct was limited to the conduct on 23 November 2020 and shortly over an hour. There is no evidence of any loss suffered as a result of the contravening conduct.

41    Although the first and second respondents were CFMMEU officials at the time, they are now no longer employed by the CFMMEU and no longer hold permits under the Act. As such, there was no need for specific deterrence. The CFMMEU has taken steps to organise training, touching upon permit holders’ powers under s 118 of the WHS Act, by a former Deputy President of the Fair Work Commission (former Deputy President). The object of deterrence of like conduct is limited to contraventions of Part 3-4 of the Act. The first and second respondents are no longer permit holders and are no longer employed by the CFMMEU and will no longer be able to contravene s 500 of the Act.

42    The previous conduct of the second respondent which contravened s 500 of the Act involved a legal dispute of s 81(3) of the WHS Act and was not conduct of the same kind as in the present conduct. The previous contravention of s 52(c) of the BCIIP Act was also unrelated to the present conduct.

43    In reply submissions, the applicant submitted that, although the first and second respondents were no longer employed by the CFMMEU, they were now instead employed as organisers by the Construction, Forestry, Mining & Energy, Industrial Union of Employees Queensland (CFMMEUQ). This would mean that the first and second respondents would still be in a position to further commit offences of a like kind.

CONSIDERATION OF THE APPROPRIATE PENALTY

Nature and extent of the contravening conduct

44    The conduct was targeted and deliberate. The respondents submitted that the Court should infer that the contraventions of the first respondent were out of frustration with the safety concerns and lack of water on the Project Site that day. There is no evidence to suggest frustration. The reaction (bad language) from the first respondent was immediate. The event was not ongoing in a way that, I would accept, would lead to frustration. No affidavit evidence was provided by the first respondent as to his level of frustration at the time. During the hearing, counsel for the respondents quantified the swearing of the first respondent as “sentence enhances” intended to emphasise or punctuate. Even accepting the inference the Court has been asked to draw with respect to the purpose of the swearing, the fact remains that some of the conduct in question was targeted at the site manager, for example “you don’t know what the fuck you are doing”. Because of the context, I do not accept that the swearing was a “sentence enhancer” to make a point.

45    The conduct of the first and second respondents is on the low end on the scale of seriousness. The conduct of the second respondent was being “knowingly concerned” with the conduct of the first respondent and not distancing himself from it. It is not disputed between the parties that the penalty of the second respondent should be a lesser penalty than the first respondent due to the lower level of involvement.

Loss or damage

46    The applicant has not pointed to any loss suffered as a result of the respondents’ contraventions of the Act nor is any loss apparent from the facts.

Circumstances in which the conduct took place

47    The respondents have pointed to the fact that three improvement notices were issued by the Inspectors that there were serious safety issues on the Project Site on the day. It is not in dispute that at the time the temperatures were approximately 32 degrees Celsius and that there was no water available to the workers on level 3 until it was rectified that day. This is no excuse for the use of foul and aggressive language.

48    Notwithstanding those factors, the language of the first respondent towards the site manager was unwarranted, targeted and personal. It was targeted at the site manager and questioned his competence in an intimidatory way.

Size of the contravening company/Degree of power

49    The CFMMEU “is a registered organisation of substantial size, resources and influence”: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (the Webb Dock case) [2017] FCA 62 at [65] (per Jessup J).

Deliberateness of conduct and period of contravention

50    The conduct took place over a short period of time and work stopped briefly. However, the conduct was deliberate.

51    The foul language of the first respondent was submitted to be “sentence enhancers” like the description used in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Castlemaine Police Station Case) (2018) 258 FCR 158; [2018] FCAFC 15 (per Dowsett, Tracey and Charlesworth JJ). I have addressed this earlier. The foul language went beyond just emphasising a point. Elements of the language were clearly targeted at the site manager and were deliberate and critical of his competence.

Involvement of senior management

52    The first and second respondents were not senior officials of the CFMMEU. There is no evidence in this matter that any senior officials of the CFMMEU were involved in the contravening conduct. This is not a case akin to Finance Sector Union v Commonwealth Bank of Australia (2005) 224 ALR 467; [2005] FCA 1847 (per Merkel J) and this is not an aggravating factor.

Corporate culture conducive to compliance

53    The CFMMEU has been recognised by this Court as being a “recidivist” organisation whose conduct in many prior cases has been described as revealing “a lamentable, if not disgraceful, record of deliberately flouting industrial laws”: ABCC v CFMEU at [158].

54    The CFMMEU pointed to the training conducted by a former Deputy President to show that the CFMMEU was committed to complying with the Act. The training in question focused on the powers of permit holders under s 118 of the WHS Act, including the obligations as to appropriate conduct and how to respond to safety issues. The training only occurred three weeks after this matter was originally set down for hearing and was only organised once the CFMMEU admitted liability. The respondents filed an affidavit by the former Deputy President which deposed to his having been instructed to organise the training following the admissions in this matter.

Co-operation with the authorities – admissions

55    It cannot be said that the admission of the respondents came at an early stage in these proceedings. By joint communication to Chambers on 12 August 2022, the parties indicated that they had resolved the issues in dispute. Consent orders were made on 15 August 2022 vacating the hearing dates of 17, 18 and 19 August 2022 and as to programming for the penalty hearing. By 12 August 2022, the parties had already provided discovery, filed evidence and opening submissions. The admissions were made after the applicant amended the statement of claim and did not press certain matters. The admissions avoided the expense of a trial for both parties and “freed up” court time.

56    In Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70 (Mornington Inn), Gyles, Stone and Buchanan JJ held:

74    It is important to note that it is not a sufficient basis for a discount that the plea has saved the cost of a contested hearing – that would discriminate against a person who exercised a right to contest the allegations. A discount may be justified, however, if the plea is properly to be seen as willingness to facilitate the course of justice. Remorse and an acceptance of responsibility also merit consideration where they are shown.

75    A conventional consideration in assessing a discount in a criminal case for a plea of guilty is the stage in the proceedings at which the plea is entered. Normally, the maximum discount for this factor, sometimes thought to be 25%, is reserved for a plea made at the first reasonable opportunity although, as was indicated in Cameron (at [23] – [24]) there is no obligation to make an early plea to a charge which wrongly particularises the substance to which the charge relates.

76    … Nevertheless, in our view, it should be accepted, for the same reasons as given in Cameron, that 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 a suitable and credible expression of regret; and/or (b) has indicated a willingness to facilitate the course of justice.

77    A respondent who admits liability will spare itself the unnecessary cost of a contested hearing. Its motivation, therefore, should not be regarded as unduly altruistic ... It is impossible to resist a conclusion that the appellant was finally moved by its assessment of the strength of the case against it rather than any desire to facilitate the course of justice.

78    The primary judge found moreover, that there was no evidence of contrition or remorse. He said: ‘Frank admissions of wrongdoing, and apologies to the employees who have been disgracefully treated, may have operated in mitigation. None were forthcoming’. In the circumstances of the present case, the admission of liability two weeks before the trial was not evidence of contrition or remorse or, except in the most formal of senses, an indication of acceptance of wrongdoing. It would have been open to the primary judge, in our view, to refuse any discount for the admission of liability. There is no basis, therefore, upon which to complain about the allowance of a ‘modest’ discount of 10%. It was more than ample in the circumstances of this case.

(italics in original)

57    Should the penalty be reduced due to the admissions?

58    In ABCC v CFMEU, the Full Court held (at [163]):

About the only thing that could be said in favour of the CFMEU, other than that the conduct was related to genuine concerns about sham contracting, is that it cooperated with the Commissioner in relation to these proceedings by admitting the contraventions and reaching agreement in relation to the facts … There is no doubt that the CFMEU should receive credit for this cooperation. From a public policy perspective, it is important to encourage such cooperation by reflecting it in the penalties imposed. It also shows willingness on the part of the CFMEU to accept responsibility for its actions and to facilitate the course of justice. The fact that the proceedings were not defended saved the community the expense of a potentially lengthy contested hearing.

59    The applicant relied upon Mornington Inn (at [74]) and submitted that, in the absence of evidence, the Court cannot assume that the respondents have shown any remorse and the admissions should not carry any weight in mitigating the penalty. The respondents submitted that there was significant utilitarian value in an admission as the cost of a lengthy trial was avoided.

60    In Construction, Forestry, Maritime, Mining and Energy Union v Fair Work Ombudsman (2023) 322 IR 233; [2023] FCA 72 (the QPAC case), Rangiah J analysed the relevant authorities and concluded that admissions had been held to fall into three categories (at [70]):

(a)    demonstrating remorse on the part of the contravenor;

(b)    demonstrating the willingness of the contravenor to co-operate with authorities and facilitate the course of justice; and

(c)    reflecting the public interest in the saving of public resources.

61    In the present matter, there is no evidence of remorse of the contravenors. The second factor was described as an “acknowledgment that the charge has been rightly laid”: Director of Public Prosecutions (Cth) v Thomas (2016) 315 FLR 31; [2016] VSCA 237 at [7] (per Redlich JA, Santamaria JA and McLeish JA) and does not appear to be relevant in the present matter. The third factor is often also described as being the utilitarian aspect of an admission.

62    Ground 2 before the Full Federal Court in Pattinson v Australian Building and Construction Commissioner (2020) 282 FCR 580; [2020] FCAFC 177 at [206], before it was overturned on appeal in the High Court, was that the primary judge had erred when determining that the appellants “should not receive any material discount on penalty by reason of the admission”. The Full Court held that Ground 2 was made out and, on appeal to the High Court, special leave to appeal was granted, but limited only to Ground 1 (Pattinson at [120] per Edelman J). Therefore, there was no dispute that the primary judge in Pattinson erred “by imposing penalties without giving due account for the material discount for co-operation to which the respondents were entitled” (Pattinson at [120]).

63    The applicant made the submission that a lower penalty would also detract from the object of specific deterrence. This argument would appear to be inconsistent with Pattinson, as there was no dispute in Pattinson that a discount on the penalty would not detract from the need for deterrence.

64    It follows that the admissions made by the respondents should be taken into consideration. The admissions did not come early in the proceedings, but were made after the applicant no longer pressed certain matters. The discount should reflect the utilitarian value of a saved trial. A discount of 15% on each of the penalties will be appropriate in the circumstances. I note that Rangiah J in the QPAC case allowed a 15% discount for an admission 14 days prior to the scheduled hearing, which followed the applicant making amendments to the statement of claim shortly before the hearing.

Need for deterrence

65    Reference is made in the authorities to deterrence of further contravention of “offences of a like kind”. The applicant contended that “offences of a like kind” should be wide enough to encompass contraventions under industrial laws. The respondents submitted that “offences of a like kind” should be limited to contraventions of Part 3-4 of the Act and further that, since losing their status as permit holders, the first and second respondents were no longer able to commit “offences of a like kind”.

66    There must be an adequate connection between the circumstances of the contravention under consideration and deterrence of contravening conduct that may occur in the future. In Pattinson, the plurality’s consideration of penalties reasonably necessary to deter contraventions “of a like kind” proceeded by reference to contraventions of the Act premised on, or flowing from, the CFMMEU’s continued deployment of an unlawful “no ticket no start” policy.

67    It seems to follow that “of a like kind” does not refer to all and any industrial laws. This case is not one like a continued deployment of the unlawful “no ticket no start” policy.

68    The first and second respondents are no longer permit holders and are no longer employed by the CFMMEU. While they may be officers of the CFMMEUQ, they will not be in a position where they can contravene s 500 of the Act. Of course, penalties are important in the context of general deterrence.

69    The applicant provided a schedule of the penalties and declarations imposed upon the CFMMEU and its representatives. As previously mentioned, there were 196 entries in the schedule of past conduct. Of those 196 entries, there were 51 contraventions of s 500 of the Act. Fifty one contraventions remain a very significant number. In the case of the CFMMEU, the need for specific deterrence remains very relevant in terms of the level of penalty.

Previous contraventions of the Act where the penalty decisions were handed down after the day the conduct occurred

70    It seems not to be in dispute between the parties that neither the first nor the second respondent can be considered to have a clean record. As previously outlined, the conduct which gave rise to the contraventions occurred on 23 November 2020. At that time, no penalty had been imposed upon the first and second respondents for any contraventions under any industrial laws. It cannot be concluded that any penalties from the earlier contraventions did not have a deterrent effect.

71    The first respondent has been the subject of three previous decisions pursuant to s 500 of the Act.

72    On 25 May 2023, judgment was handed down in Construction, Forestry, Maritime, Mining and Energy Union v Fair Work Ombudsman (Boggo Road Cross River Rail Case) [2023] FCA 507 (per Abraham J), which was an appeal from the decision handed down on 28 July 2022, ABCC v CFMMEU (Boggo Road Cross River Rail Case) [2022] FedCFamC2G 574 (per Judge Vasta). The conduct the subject of the contraventions occurred on 15 April 2020. The penalty imposed on the first respondent on appeal was $7,000 and the non-indemnification order was set aside.

73    On 11 March 2022, judgment was handed down in Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining And Energy Union [2022] FedCFamC2G 156 (per Judge Vasta). The conduct the subject of the contraventions occurred on 30 April 2020. A penalty of $7,000 was imposed on the first respondent. There were no non-indemnification orders made.

74    On 10 February 2023, judgment was handed down in the QPAC case, which was an appeal from Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union [2022] FedCFamC2G 40 (per Judge Egan) which had been handed down on 3 February 2022. The conduct the subject of the contravention occurred on 5 November 2020. The penalty imposed on appeal was $6,000 and the non-indemnification order was set aside.

75    The second respondent was the subject of two previous contraventions.

76    The conduct of the second respondent on 12 and 13 January 2021 contravened s 52(c) of the BCIIP Act and on 16 June 2022 the decision of Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (the Titan Cranes Case) [2022] FCA 774 (Titan Cranes Case) (per Logan J) was handed down. A penalty of $30,000 was imposed on the second respondent, 50% of which was subject to a non-indemnification order. It should be noted that the conduct which gave rise to the Titan Cranes Case occurred almost two months after the conduct in the current matter.

77    On 17 September 2021, judgment was handed down in Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (the Toowoomba Bypass Case) [2021] FCA 1128 (per Rangiah J). A penalty of $8,000 was imposed on the second respondent, with no non-indemnification order. The conduct the subject of the contravention occurred on 30 April, 1 and 2 May 2018.

78    These contraventions are relevant to the need for general deterrence of such conduct.

PENALTY

79    In the case of the first respondent, I take into account that the first respondent was not a senior manager of the CFMMEU and the incidents were of short duration and there was no loss suffered as a result of the conduct. In terms of the nature and extent of the contravening conduct and the circumstances in which it took place, the conduct was of lower severity compared with the “no ticket no start” infringements, although it was aggravated by the use of language and also the fact that many of the comments and aggression were directed towards an individual, criticising the individual’s competence. I also note that an admission was made which took place shortly after an amendment to the statement of claim by the applicant, but just before the hearing date. The first respondent has infringed in the past, arising from conduct and circumstances of the contravention with adequate connection.

80    In the circumstances, it is appropriate to impose a penalty on the first respondent which is around 70% of the maximum penalty and to apply a reduction of around 15% to take into account the admission. A penalty of $7,500 will be imposed on the first respondent.

81    In the case of the second respondent, I note that there was no active participation by the second respondent with the allegation against him being that he did not attempt to prevent the contravention by the first respondent. I have noted the nature of the contravention above. I conclude it is appropriate to impose a penalty on the second respondent that is around 40% of the maximum penalty and also to allow a reduction of around 15% to take into account the admission. A penalty of $4,500 will be imposed on the second respondent.

82    The CFMMEU is a large, well-funded and resourced organisation of considerable influence which has been found to have engaged in like conduct 51 times and is recidivist in nature. The previous offences are significant in the assessment of penalty. They demonstrate a high need for specific deterrence. The CFMMEU organised training, which took place after the contravening conduct had occurred. The nature of the particular contravention is described in the previous paragraphs. The CFMMEU made admissions shortly after the amended statement of claim was delivered, but not early in the proceedings. In those circumstances, it is appropriate to impose a penalty of around 90% of the maximum penalty of $66,600, but allow a reduction of around 15% to take account of the admission made. A penalty of $50,000 will be imposed on the CFMMEU.

Non-Indemnification Order

83    The applicant has submitted that an order be made that the first and second respondents personally pay the penalty, that is, that they cannot be indemnified by the third respondent. The Court may make a non-indemnification order for the personal payment of a civil penalty order. The non-indemnification order forbids the accepting of money to assist or pay the penalty imposed. The reasoning behind it is to attach a certain “sting” to the penalty which is felt by the contravening party and not absorbed by the resource rich CFMMEU. The making of a non-indemnification order is a discretion the Court has pursuant to s 546 of the Act: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157; [2018] HCA 3, where Kiefel CJ said (at [44]):

A personal payment order adds only to the effect which is felt by a contravenor: the penalty ordered remains the same. It brings home to that person the reality of a pecuniary penalty which is critical to the attainment of the deterrent effect which is the very point of the penalty. It seeks to accomplish the purpose for which the power is given by s 546(1) within the limits of what is necessary to its effective exercise.

84    The purpose of the pecuniary penalty is the deterrent effect of a penalty. In circumstances were, at the time of the contravening conduct, the first and second respondents had not had any penalty orders against them, it cannot be said that any of the previously imposed penalties did not have a deterring effect. No non-indemnification order will be made.

Associate:    

Dated:    20 September 2023