Federal Court of Australia

Fair Work Ombudsman v Rielly [2023] FCA 1144

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 April 2021 by failing to comply with a site requirement that applied to the project known as the “Pacific Motorway Upgrade VL2B Project” located on and around the M1 Motorway, between Varsity Lakes and Burleigh, Queensland, namely a requirement to be accompanied by a fully inducted Seymour Whyte Constructions Pty Ltd representative at all times.

2.    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 first respondent’s contravention in 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 $8,500.

2.    The third respondent pay one pecuniary penalty of $58,000.

3.    The pecuniary penalties referred to in Orders 1 and 2 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    Mr Dean Rielly (the first respondent) admitted that, on 23 April 2021, he engaged in conduct which was in contravention of s 500 of the Fair Work Act 2009 (Cth) (the Act) while attending the Pacific Motorway Upgrade VL2B construction project located on the M1 Motorway between Varsity Lakes and Burleigh, Queensland (the Project Site). By operation of ss 550(2)(c) and 793(1) of the Act, the Construction, Forestry, Maritime, Mining and Energy Union (the CFMMEU) (the third respondent) admitted that the CFMMEU contravened s 500 of the Act.

2    Prior to the hearing on the question of liability listed to begin on 11 April 2023, the Fair Work Ombudsman (the applicant) discontinued the proceedings against Mr Paul Fitzpatrick (the second respondent) and several changes were made to the pleadings, including the removal of some allegations. The first and third respondents admitted some contraventions following the changes to the pleadings and the liability hearing was subsequently vacated by orders dated 6 April 2023.

3    The 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 Fair Work Act 2009 (Cth) (FW Act), [the first respondent] acted in an improper manner on 23 April 2021 by:

…

(d)     failing to comply with a site requirement that applied to the project known as the ‘Pacific Motorway Upgrade VL2B Project’ located on and around the M1 Motorway, between Varsity Lakes and Burleigh, Queensland …, namely a requirement to be accompanied by a fully inducted Seymour Whyte Constructions Pty Ltd representative at all times.

…

2.    A declaration that, by reason of sections 793(1) and 550(2)(c) of the FW Act, [the third respondent] was, by way of act or omission, directly or indirectly, knowingly concerned in or party to the contravention set out at paragraph [1] above and, as a result, [the third respondent] contravened section 500 of the FW Act.

RELEVANT LEGISLATION

5    The relevant sections of the Act are:

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.

…

6    Sections 117 and 118 of the Work Health and Safety Act 2011 (Qld) (the WHS Act) provide:

117    Entry to inquire into suspected contraventions

(1)    A WHS entry permit holder may enter a workplace for the purpose of inquiring into a suspected contravention of this Act or the Electrical Safety Act 2002 that relates to, or affects, a relevant worker.

(2)    The WHS entry permit holder must reasonably suspect before entering the workplace that the contravention has occurred or is occurring.

118    Rights that may be exercised while at workplace

(1)     While at the workplace under this division, the WHS entry permit holder may do all or any of the following in relation to the suspected contravention of this Act or the Electrical Safety Act 2002—

(a)     inspect any work system, plant, substance, structure or other thing relevant to the suspected contravention;

(b)     consult with the relevant workers in relation to the suspected contravention;

(c)    consult with the relevant person conducting a business or undertaking about the suspected contravention;

(d)     require the relevant person conducting a business or undertaking to allow the WHS entry permit holder to inspect, and make copies of, any document that is directly relevant to the suspected contravention and that—

(i)     is kept at the workplace; or

(ii)     is accessible from a computer that is kept at the workplace;

(e)     warn any person whom the WHS entry permit holder reasonably believes to be exposed to a serious risk to his or her health or safety, emanating from an immediate or imminent exposure to a hazard, of that risk.

…

BACKGROUND

7    On 12 April 2021, Seymour Whyte Constructions Pty Ltd (SWC) was issued with an improvement notice in relation to the Project Site which described a failure to ensure the provision of a safe system of work and that pre-start inspections for powered mobile plant were not completed or were not being completed properly.

8    On 19 April 2021, SWC was issued with two prohibition notices and was directed to comply with SWC’s own procedure “004 – work on or near roads” and to provide its procedures.

9    The SWC Site Rules required visitors to the Project Site to be accompanied at all times by a fully inducted SWC representative: “All Visitors must be accompanied by a fully inducted SWC representative at all times” (the escort requirement).

10    On 23 April 2021, the first respondent attended the Project Site exercising a right of entry under s 117 of the WHS Act to consult with the workers of the Project Site in relation to a suspected failure by SWC to comply with s 118 of the WHS Act. It was agreed that the first respondent entered the Project Site at the OLD2 site on foot, unaccompanied, at approximately 12 pm. Work conducted at the OLD2 site included asphalting laying works, which involved working at very hot temperatures and with heavy machinery.

11    Mr Wayne Pitt, the Project Safety Manager, and Mr Anthony Nixon, the Superintendent of SWC, approached the first respondent while the first respondent was talking to workers on the Project Site and engaged in discussions with him.

12    While the discussions continued, the first respondent walked away unaccompanied in a southerly direction towards two diggers which were approximately 100 metres away. When the first respondent approached the diggers, one of the diggers’ engines was running and both their amber lights were flashing. However, neither of the diggers’ drivers were in the cabs at that time. Mr Pitt requested that the first respondent stop as it was unsafe to go near the diggers. The first respondent continued to approach the diggers and walked within the radius of an excavator bucket. As well, in that same vicinity, other heavy machinery was located within an area of about 100 metres at that time, including an additional digger, two rollers and two trucks.

13    The first respondent then walked further south towards the area being asphalted, into the vicinity of the operating plant and machinery. He walked alongside the work area, then approached a worker who was operating a roller. At this time he was within approximately five metres of Mr Pitt, Mr Nixon and Mr Robert Maroney, the Regional Human Resources Manager (Northern).

14    While walking back and forth at the southern side of the site, the first respondent continued to engage in discussions with SWC workers. He walked alongside the site within the vicinity of two moving rollers, two trucks moving in and out of the area, a paver, a hopper and a moving remixer and came within two metres of the moving paver and remixer. When this was happening, Mr Pitt, Mr Nixon and Mr Maroney were generally standing in front of the first respondent.

15    The first respondent then began moving north and approached four parked trucks, moving in between the trucks in an attempt to engage in conversation with the drivers, including the driver who was reversing a truck at the time. Other trucks were also moving in the vicinity of the first respondent at that time. Mr Nixon intervened and directed the driver of the reversing truck to stop. During this period, Mr Pitt, Mr Nixon and Mr Maroney were within approximately five metres of the first respondent.

16    The asphalting works were temporarily halted due to the first respondent’s proximity to the asphalting works.

17    Work Health and Safety Inspectors attended the Project Site at approximately 2.30 pm and spoke with the first respondent, Mr Pitt, Mr Nixon and Mr Maroney. Work finished for the day at approximately 3 pm and the first respondent left the Project Site at approximately 4 pm. The contravening conduct occurred for a period of approximately 2.5 hours.

18    The first respondent is no longer an employee of the CFMMEU, is no longer an official within the meaning of the Act and no longer holds a right of entry permit (entry permit) under the Act.

LIABILITY

19    Prior to the liability hearing on 11 April 2023, the first respondent admitted that his conduct, when walking away from the representatives of SWC towards the diggers and when walking in a southerly direction, was “unaccompanied” and a contravention under the Act. The CFMMEU also admitted liability for the first respondent’s conduct pursuant to s 793 of the Act. The admissions were made by joint communication to the Court on 4 April 2023. The admissions did not incorporate all of the contraventions alleged by the applicant.

20    The amended statement of claim particularised the contravention of s 500 of the Act as acting in an improper manner by failing to comply with the escort requirement as follows:

83.    In the premises of the matters alleged at paragraph 80 herein (and thereby exercising, or seeking to exercise, a right in accordance with Part 3-4 of the [Act]), and the matters alleged at paragraphs and 69 to 76 herein, on 23 April 2021 [the first respondent] acted in an improper manner, namely by:

…

(d)    failing to comply with the Escort Requirement.

…

84.    In the premises of the matters alleged at paragraph 83 herein, [the first respondent] contravened section 500 of the [Act].

21    The reference to “[e]scort [r]equirement” in the pleadings was used as a defined term and was not referred to as such by SWC in their Site Rules.

22    The question of the extent of the breach by the first respondent remained for consideration at the penalty hearing, which involved consideration of whether the first respondent was unaccompanied for the entire duration of the approximately 2.5 hours, or whether the first respondent was accompanied at all times, except during the times to which the admissions related.

23    The applicant submitted that the term “accompanied” should not be construed to mean “in proximity to”, but rather refers to the person being “escorted under the guidance and supervision of a relevant SWC representative”. The applicant submitted that the construction of “accompanied” in that manner is consistent with the intention for a visitor to travel around the Project Site in a safe manner and that, for approximately 2.5 hours after 12 pm on 12 April 2023, the first respondent was not accompanied.

24    The respondents submitted that the term “accompanied” should be construed in its ordinary meaning, that is, that the first respondent conduct his inspections in the presence of fully inducted representatives of the SWC. That would allow SWC to know where the first respondent was at all times, to assist with the exercise of statutory functions under the WHS Act, and to make requests to comply with occupation health and safety requirements.

25    The respondent submitted that the applicant’s submission that the first respondent was unaccompanied at all times is incorrect. The ordinary meaning of the word means that the first respondent was accompanied at some times and at other times he was not accompanied.

26    For the reasons that follow, I do not accept the respondents’ submission that the first respondent was accompanied at all other times than those the subject of the admissions.

27    The purpose of the escort requirement was to assist SWC to comply with its workplace health and safety obligations by managing risks associated with the carrying out of the work on the Project Site in accordance with Part 3.1 of the Work Health and Safety Regulation 2011 (Qld) (the WHS Regulation). This included minimising risks to health and safety, so far as reasonably practicable, pursuant to s 36(2) of the WHS Regulation. The health and safety duty and the escort requirement were particularised in the amended statement of claim as follows:

12.    By reason of the matters alleged in paragraph 11, at all material times, SWC:

(a)    held a duty to ensure, so far as was reasonably practicable, the health and safety of:

(i)    workers engaged, or caused to be engaged by SWC; and

(ii)    workers whose activities in carrying out work were influenced or directed by SWC,

pursuant to section 19(1) of the WHS Act;

(b)    held a duty to ensure, so far as was reasonably practicable, that the [Project Site], the means of entering and exiting the [Project Site] and anything arising from the [Project Site] was without risks to the health and safety of any person, pursuant to section 20(2) of the WHS Act;

(c)    held a duty to ensure, so far as was reasonably practicable, that the health and safety of other persons was not put at risk from work carried out as part of the business or undertaking pursuant to section 19(2) of the WHS Act;

(d)    held a duty to manage risks associated with the carrying out of the Project in accordance with Part 3.1 of the WHS Regulation, including:

(i)    to identify reasonably foreseeable hazards that could give rise to risks to health and safety, pursuant to regulation 34 of the WHS Regulation; and

(ii)    to implement risk control measures where not practicable to eliminate risks to health and safety, pursuant to regulation 36(2) of the WHS Regulation;

(e)    held the additional duties of a principal contractor pursuant to Part 6.4 of the WHS Regulation

13.    In discharging the duties referred to in paragraph 12, at all material times, amongst other things, SWC required that all visitors to the Site:

…

(c)    comply with all directions given by a SWC representative; and

(d)    be accompanied by a fully inducted SWC representative at all times (Escort Requirement).

(emphasis and underlining in original)

28    As Allsop CJ, White and O’Callaghan JJ held in Australian Building and Construction Commissioner v Powell (2017) 251 FCR 470; [2017] FCAFC 89 (at [14]):

[P]rovisions as to entry on to work sites and the regulation thereof should be construed conformably with the language used by Parliament practically and with an eye to commonsense so that they can be implemented in a clear way on a day-to-day basis at work sites. The legislation needs to work in a practical way at the work site, and if at all possible not be productive of fine distinctions concerning the characterisation of entry on to a site.

29    The requirement to be accompanied must be implemented in a clear and practical way and in a manner that is consistent with the purpose of efficiently promoting compliance with SWC’s obligations under the WHS Act and WHS Regulation.

30    The purpose of the escort requirement was to ensure that the “health and safety of other persons was not put at risk” from the works being carried out on the Project Site and was also to control visitors who may be unfamiliar with the Project Site while they were visiting.

31    The Macquarie Dictionary (8th ed, Macquarie Dictionary Publishers, 2020) Vol 1, 9 defines “accompany” as “to go in company with; join in action”.

32    The Oxford English Dictionary (2nd ed, Oxford Press 1989) Vol 1, 80 defines “accompany” as “to make any one, to make oneself, become or act as a companion” and “to go in company with, to go along with; to convoy, to escort (for safety), to attend (as a retinue)”. The definition of “escort” is “[a] number of persons, or often a single person, accompanying any one on a journey for the purpose of protection or guidance, or for courtesy’s sake” (Vol 5, 390).

33    It seems clear the intention was to enable a visitor to move around the Project Site while under the guidance or supervision of a designated, fully inducted SWC representative.

34    The requirement for a visitor at the Project Site to be accompanied is not a legislative requirement, but was a requirement of SWC which was imposed to manage the risks of work, health and safety at the Project Site.

35    Particularly in the context of a requirement dealing with safety, there must be certainty and clarity at the Project Site in the operation of the requirement. The operation of such a requirement must be practical and, if possible, not productive of fine distinction as to the characterisation of whether or not a person is accompanied . There should not be confusion on a construction site as to whether a visitor is accompanied. The purpose and context of the requirement leads to the conclusion that the visitor must know they are being accompanied, and equally, the designated, fully inducted SWC representative must be aware that they have this responsibility to accompany the visitor. Otherwise, the requirement will not work effectively to achieve the purpose and object. The notion that a person may be accompanied simply by moving into the vicinity of another person does not effectively and with precision achieve the purpose and object of the Site Rules. The Site Rules should be interpreted in a way which achieves their purpose. There is little certainty of application in the interpretation advanced by the respondents.

36    In my view, being accompanied requires more than physical proximity to another person. To “accompany” requires an element of escorting, going along with, joining and being in the company of another person.

37    The first respondent was, for the above reasons, unaccompanied for approximately 2.5 hours after 12 pm on 23 April 2021.

THE CIVIL PENALTY PROVISIONS

38    Pursuant to s 546 of the Act, the Court may order that a person pay a pecuniary penalty that the Court considers appropriate.

39    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 (see s 546(2) of the Act). 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.

40    The maximum penalties which could be imposed on the first respondent is $13,320 and on the CFMMEU is $66,600.

RELEVANT PRINCIPLES IN RELATION TO CIVIL PENALTY PROVISIONS

41    The principles guiding the imposition of a civil penalty were canvased by the High Court in Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 450; [2022] HCA 13 (Pattinson). Those principles were summarised in my decision in Fair Work Ombudsman v Blakeley [2023] FCA 1121 at [18]-[28].

42    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]). Penalties can be fixed at the maximum where it is appropriate to do so and they should be fixed such that it is not considered as merely the cost of doing business.

43    The principles outlined by French J (as his Honour then was) in Trade Practices Commission v CSR Ltd (1991) ATPR ¶41-076 (CSR Ltd) are of relevance. The principles remain relevant when considering the imposition of any civil penalty, although the principles were in the context of the Trade Practice Act 1974 (Cth) at the time:

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 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 Act in relation to the contravention.

44    The factors in CSR Ltd are not a rigid checklist, as observed by the plurality in Pattinson (at [19]). The factors fell into two groups: matters pertaining to the character of the contravenor and to the character of the contravening conduct.

45    In CSR Ltd, French J identified that the object of the penalties imposed “is to attempt 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 the Act” (at [40]).

SUBMISSIONS

Applicant

46    The first respondent’s conduct occurred in a high-risk work environment and the conduct posed a risk to the first respondent and to the other workers on the Project Site. The conduct also resulted in the temporary stop of the asphalt works.

47    The conduct of the first respondent was deliberate and designed to cause interruptions at the Project Site. It should be accepted that, as a permit holder, the first respondent was aware of his obligations on site and knew (or ought to have known) that the conduct was dangerous.

48    The CFMMEU is a large organisation which has been described as a “large, asset rich, and well-resourced industrial organisation” (Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Werribee Shopping Centre Case) [2017] FCA 1235 at [25] (per Tracey J)). Any penalty imposed against the CFMMEU should be significantly high to deter the CFMMEU, and other like organisations, from engaging in like conduct.

49    Although the first and third respondents admitted the conduct, the admissions came late in the proceedings and were not accompanied with any evidence of remorse. Any utilitarian value of the admissions was reduced due to the proximity to the hearing.

50    The CFMMEU has a long history of contraventions under the Act, the Building and Construction Industry (Improving Productivity) Act 2016 (Cth), the Building and Construction Industry Improvement Act 2005 (Cth) and the Workplace Relations Act 1996 (Cth) (together the industrial laws). The CFMMEU has been described as a “recidivist” organisation and having “a lamentable, if not disgraceful, record of deliberately flouting 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)). Regularly, very large penalties are imposed on the CFMMEU to no avail.

51    At the time of the offending conduct, the first respondent had not been subject to any penalty orders. On the date of the conduct in this matter, the first respondent had been found liable by Judge Driver for contraventions which occurred on 25 January 2019 and 4, 5 and 14 March 2019 (Australian Building and Construction Commissioner v Rielly (No 2) [2021] FCCA 43 (ABCC v Reilly (No 2)).

52    The first respondent was also before the Federal Court in relation to conduct which had occurred on 22 August 2019, but the liability and penalty judgments were not handed down until after the conduct of this matter. Nevertheless, the other matters can be taken into account to show the need for specific deterrence.

53    The applicant submitted that a penalty of $8,500 was appropriate for the first respondent and a penalty of $58,000 was appropriate for the CFMMEU.

Respondents

54    The first respondent was entitled to enter the Project Site in accordance with s 117 of the WHS Act. The right to enter does not require the consent or agreement of SWC. The contravening conduct was the failure of the first respondent to be accompanied at all times.

55    The first respondent was entitled to inspect work, plant and machinery and consult with workers. The conduct where the first respondent admits the first respondent was unaccompanied caused no delay in work and was brief.

56    The applicant asserted that the first respondent was unaccompanied when first arriving at the Project Site. The first respondent must have been unaccompanied when first arriving at the site in order to make contact with the occupier and become accompanied.

57    There were two instances where the first respondent was unaccompanied. The first was when he walked off towards the two diggers which did not have drivers in the cabs at the relevant time. The second instance was when he walked south in the direction of where the asphalting occurred. While he may have been unaccompanied and there were hazards in the area, the first respondent was entitled to inspect the diggers and the asphalting work.

58    The applicant’s complaint about the stopping of work during the inspection fails to appreciate the balance of the WHS Act to enable an inspection of the type authorised to be carried out. Work may be impeded by the lawful inspection under the WHS Act. There is no evidence that the first respondent posed a risk to any person.

59    The first respondent can no longer contravene provisions of like kind as he is no longer employed by the CFMMEU and is no longer a permit holder under the Act.

60    The penalty imposed on the first respondent should range between $3,000 and $4,500. The penalty which should be imposed on the CFMMEU should be between $18,000 and $25,000.

DISCUSSION

61    I will consider the applicable level of penalty by reference to relevant matters outlined in CSR Ltd.

Penalty for first respondent

Nature and extent of the contravening conduct

62    I have found that the first respondent was not accompanied. I have, however, indicated in the paragraphs below where there was agreement.

63    The first respondent was at the Project Site from approximately 12 pm until 4 pm. The duration of the contravening conduct was alleged to have been approximately 2.5 hours. The contravening conduct of the first respondent was a failure to be accompanied while on the Project Site.

64    The first respondent was not accompanied when he first attended the Project Site at 12 pm. The first respondent engaged in discussions with workers and the conduct cannot be considered to be dangerous that put him or others at risk.

65    It was admitted that the first respondent was unaccompanied when approached by Mr Pitt and Mr Nixon. There was no indication that this contravening conduct was disruptive or caused any delays. The conduct also cannot be considered dangerous or to put him and others at risk.

66    It was admitted that the first respondent was unaccompanied when he walked off in a southerly direction towards the two diggers. The two diggers did not have drivers in their cabs, but one of the digger’s engine was running with its amber lights flashing. As the first respondent approached the diggers, he walked into the radius of an excavator bucket. While this conduct does not appear to have caused delays, it was dangerous and put him at risk.

67    It was admitted that the first respondent was unaccompanied when he walked further south towards the operating plant and machinery and approached a worker who was operating a roller. The area in the vicinity of the asphalt plant and machinery was a high risk area with poor visibility, noisy and machinery which was unable to stop quickly. This conduct was very dangerous, putting himself at risk. This conduct was disruptive and caused the asphalting works to be temporarily halted. The duration of the halt is unknown.

68    It was not admitted that the first respondent was unaccompanied when he walked back and forth at the southern site while engaging in discussions with SWC workers. This conduct involved the first respondent walking within the vicinity of two moving rollers, two trucks moving in and out of the area, a paver, a hopper and a moving remixer. This conduct was hazardous putting himself and others at risk. During this time the asphalting work was temporarily halted for a short time.

69    It was not admitted that the first respondent was unaccompanied when he approached the four parked trucks, moving in between the trucks and attempting to engage in conversation with the drivers while other trucks were moving in the vicinity of the first respondent. The first respondent was engaging in dangerous conduct and caused Mr Nixon to intervene and halt the driving of a reversing truck.

Loss or damage

70    The first respondent did not cause any damage while attending the Project Site.

71    It was not in dispute between the parties that, due to the first respondent’s conduct, the asphalting works were temporarily stopped. There was, however, no indication of how long the asphalting works were stopped. The first respondent also had a right to inquire into a suspected contravention with workers pursuant to ss 117 and 118 of the WHS Act. I attribute little weight to the fact that the asphalting works stopped without any further evidence. In the absence of any evidence led regarding the extent of any loss or damage, “the Court should not assume that the harm disclosed was extensive” (Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2016] FCA 798 at [68] (per Barker J)).

Circumstances in which the conduct took place

72    The first respondent entered the Project Site in accordance with s 117 of the WHS Act. The first respondent was entitled to enter the Project Site for the purpose of inquiring into suspected contraventions of the WHS Act and, while on the Project Site, to inspect any work system, plant, substance, structure or other thing relevant to the suspected contravention and to consult with the relevant workers about the suspected contravention pursuant to s 118 of the WHS Act.

Deliberateness of conduct and period of contravention

73    The period of contravention was over a period of approximately 2.5 hours.

74    The applicant submitted that the first respondent’s conduct was “deliberate and designed to cause interruption to work at the Project [Site]”.

75    The respondents accepted that the conduct was deliberate “in the sense that [the first respondent] did not unintentionally walk off”, but maintained that the submission that the first respondent intentionally disrupted work should not be accepted and that impatience is an equally open explanation.

76    The respondents did not rely on any evidence as to the first respondent’s reasons for the conduct. Of course, as outlined at [8], [9], [11], [12] and [13] of these reasons, the first respondent was observed engaging in discussions, or attempting to engage in discussions, with workers of the Project Site as was permitted under ss 117 and 118 of the WHS Act.

77    The respondents made the submission that the disruption of work would have occurred regardless of whether or not the first respondent was accompanied and referred to a decision of Gray J in Curran v Thomas Borthwicks & Sons (Pacific) Limited (1990) 26 FCR 241 (at 257):

Applying this approach to the statutory provisions applicable in the present case, it will be seen that the content of the obligation not to hinder or obstruct may differ as between an employer confronted by an officer seeking to exercise the rights of entry, inspection and interview, and the officer exercising those rights whilst employees are carrying out their work during working hours. A few examples may suffice. It may only be possible to inspect a particular part of premises by standing in one spot. That spot may happen to be part of a passageway used for the wheeling of trolleys, which is an essential part of the work of employees on those premises. Trolleys cannot be wheeled through the passageway while an officer is standing inspecting the part of the premises. There will be no hindrance or obstruction of the work of any employee, even if one attempts to wheel a trolley through the passageway and is unable to do so. If remaining in the spot for the legitimate purpose of inspecting amounted to a hindrance or obstruction of the employee, the right to inspect would be negated entirely. In contrast, a refusal to move from the passageway after the completion of the inspection of the particular part of the premises would amount to hindering or obstructing an employee.

(emphasis added)

78    No deliberate disruption of work is obvious from the facts.

79    As to the question of whether the first respondent deliberately infringed, I accept the applicant’s submission that the first respondent, as an entry permit holder, must have been aware of his obligation to be accompanied – yet he was not accompanied. It follows that the conduct must have been deliberate. In that respect, I note the concession by the respondents that the conduct was deliberate “in the sense that [the first respondent] did not unintentionally walk off”.

80    In the circumstances, I conclude that the first respondent’s conduct was deliberate.

Involvement of Senior Management

81    The first respondent was an official of the CFMMEU, but was not involved in conduct of the type targeted by this consideration, where senior officers “carefully devised and implemented” a scheme of contravention (Finance Sector Union v Commonwealth Bank of Australia (2005) 224 ALR 467; [2005] FCA 1847 at [27] (per Merkel J)).

Co-operation with the authorities

Admissions

82    The applicant acknowledged that the admissions came at a late stage due to negotiations between the parties as to the framework of the particularisation of the charge and that the admissions have utilitarian benefit by saving the Court time and money. However, the applicant submitted that the respondents should not get the benefit of early admissions, but are nevertheless entitled to a benefit for their admissions.

83    The respondents submitted that the circumstances surrounding the admissions involved the proceedings against the second respondent being discontinued and many of the allegations no longer being pressed.

84    The admissions did not come early in the proceedings. However, they followed significant amendments to the charges from the applicant. The admissions were not full admissions of all the conduct. Of course, the respondents were entitled to advance such an argument as they were advised and cannot be penalised for exercising that right. There is utilitarian value in the admissions and a discount of approximately 10% will be allowed to the first respondent.

Deterrence

85    The plurality in Pattinson referred to deterrence of further contravention of “offences of a like kind”. The respondents submitted that the first respondent is no longer able to contravene “offences of a like kind” and should be limited to contraventions under s 500 of the Act. Accordingly, there would be no need for specific deterrence. The applicant submitted that the Court should look at the history of non-compliance with the law which demonstrates a “history of contraventions as a whole” and that the Court should fix the appropriate penalty.

86    There must be an adequate connection between the circumstances of the contravention and the deterrence of contravening conduct that may occur in the future. As Rangiah J said in Construction, Forestry, Maritime, Mining and Energy Union v Fair Work Ombudsman [2023] FCA 72:

109.    I accept the appellants’ submission that [in Pattinson] the plurality’s consideration of the penalties reasonably necessary to deter contraventions “of a like kind” proceeded by reference to contraventions of the Act premised on or flowing from the Union’s continued deployment of an unlawful “no ticket no start” policy. That was made clear at [61]. The plurality’s approach is consistent with the necessity for an adequate connection between the circumstances of the instant contravention and deterrence of contravening conduct that may occur in the future.

110.    The respondent has not attempted to demonstrate, either by reference to evidence or forensic analysis of the Union’s past contraventions, that the Union has a general policy of deliberate defiance of any or all or industrial laws whenever the Union considers that it is in its interests to do so, such that any and all future contraventions of industrial laws will necessarily fall within the description of, “future contraventions of a like kind”. Accordingly, I will not determine the appropriate penalty on the basis of what is reasonably necessary to deter the Union from engaging in deliberate contraventions of any and all industrial laws. It has not been demonstrated that all of the Unions’ past contraventions of industrial laws will necessarily be relevant to determining the appropriate penalties in the present case.

87    The first respondent is no longer a permit holder nor employed by the CFMMEU. There is evidence that he works for Construction, Forestry, Mining and Energy Union New South Wales and holds a State entry permit. Therefore, he will not be able to contravene s 500 of the Act. Any penalty which should be imposed is limited to general deterrence.

88    The first respondent has been subject to two previous decisions under the Act.

89    On 12 February 2021, Judge Driver found the first respondent liable for contraventions of ss 340, 346, 348 and 355 of the Act (ABCC v Rielly (No 2)), which was prior to the conduct the subject of these proceedings. However, his Honour’s penalty decision was not handed down until 28 January 2022 (Australian Building and Construction Commissioner v Rielly (No 3) [2022] FedCFamC2G 1).

90    On 23 May 2022, Judge Humphreys found the first respondent liable for contraventions under s 500 of the Act. A penalty of $8,820 was imposed on the first respondent on 4 August 2022 (ABCC v CFMEU (Pacific Highway Upgrade Case) (No 3) [2022] FedCFamC2G 388). The penalty decision was appealed and dismissed by the Federal Court on 13 March 2023 (Construction, Forestry, Maritime, Mining and Energy Union v Fair Work Ombudsman (Pacific Highway Upgrade Case) [2023] FCA 202 (per Katzmann J)).

91    The contraventions by the first respondent can be taken into account in the context of the need for general deterrence.

Penalty

92    The applicant submitted that a penalty of $8,500 was appropriate for the first respondent.

93    The respondents submitted that the penalty for the first respondent should be in the range of $3,000 and $4,500.

94    Taking into account the above factors, the appropriate penalty for the first respondent is $9,500. I will discount the penalty by approximately 10% because of the admissions. The penalty to be imposed on the first respondent is $8,500.

Penalty for CFMMEU

Degree of power

95    The degree of power the CFMMEU holds is not relevant in the present matter.

Corporate culture conducive to compliance

96    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]). The organisational culture of the CFMMEU has also been described as “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] (per Jessup J)).

97    The CFMMEU pointed to some training conducted by a former Deputy President of the Australian Industrial Relations Commission to show that the CFMMEU was committed to complying with s 500 of the Act. The training in question was organised subsequent to a different contravention against a different respondent. The training 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 respondents filed an affidavit by the former Deputy President which deposed to his having been instructed to organise the training pursuant to a separate matter.

Size of the contravening company

98    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)).

Co-operation with the authorities

Admissions

99    As indicated in the discussion previously, the CFMMEU will also be allowed a penalty reduction of approximately 10% for the admissions.

Deterrence

100    The applicant provided a schedule of the penalties and declarations imposed upon the CFMMEU and its representatives. The schedule contained 200 entries of past penalties imposed. Of those 200 entries, there were 53 contraventions of s 500 of the Act. The number of past penalties is significant and underlines the need for specific deterrence.

Penalty

101    The applicant submitted that a penalty of $58,000 is appropriate for the CFMMEU.

102    The respondents submitted that a penalty in the range of $18,000 and $25,000 would instead be appropriate for the CFMMEU.

103    The CFMMEU is an organisation of significant size, resources and influences. As mentioned above, the CFMMEU is a “recidivist” organisation with “a lamentable, if not disgraceful, record of deliberately flouting industrial laws”. The CFMMEU has taken some action to provide education to change its corporate attitude. In view of this, I will impose a penalty of $65,000 on the CFMMEU and I will allow a discount of approximately 10% because of the admissions. The penalty to be imposed on the CFMMEU is $58,000.

NON-INDEMNIFICATION ORDER

104    The applicant sought an order that the first respondent be personally responsible for the payment of the penalty imposed and to prohibit the first respondent from accepting money for the payment of the penalty imposed. This attaches a certain “sting” to the penalty to be felt by the first respondent.

105    A non-indemnification order is implied within the express power conferred upon the Court to order the payment of a pecuniary penalty. The making of a non-indemnification order is a discretion the Court has pursuant to s 546 of the Act. In Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157; [2018] HCA 3, 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.

106    In circumstances where the first respondent is no longer a permit holder and was not the subject of a penalty order at the time of the contravening conduct, there is no need for specific deterrence that “brings home to [the first respondent] the reality of a pecuniary penalty”. As such, it is not necessary to make a non-indemnification order.

Associate:    

Dated:    26 September 2023