Federal Court of Australia

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Elecnor Australia Pty Ltd (No 2) [2025] FCA 841

ORDERS

THE COURT DECLARES THAT:

1.    Elecnor Australia Pty Ltd contravened section 501 of the Fair Work Act 2009 (Cth) on 9 May 2023 by refusing Mr Matthew Murphy entry to the premises known as Buronga Camp, off Arumpo Road, Wentworth, NSW 2715, in circumstances where Mr Murphy had a right to enter the premises under section 484 of the Act and in accordance with Part 3-4 of the Act (the first contravention).

2.    Elecnor Australia contravened section 501 of the Act on 10 May 2023 by refusing Mr Matthew Murphy entry to the Buronga Camp in circumstances where Mr Murphy had a right to enter the premises under section 484 of the Act in accordance with Part 3-4 of the Act (the second contravention).

THE COURT ORDERS THAT:

1.    Elecnor Australia pay a pecuniary penalty of $75,000 in respect of the first contravention.

2.    Elecnor Australia pay a pecuniary penalty of $50,000 in respect of the second contravention.

3.    The pecuniary penalties payable by Elecnor Australia be paid to the first applicant, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

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

REASONS FOR JUDGMENT
(Delivered ex tempore; revised from transcript)

WIGNEY J:

1    On 6 March 2025, I published Reasons for Judgment in which I concluded that the respondent, Elecnor Australia Pty Ltd, had contravened s 501 of the Fair Work Act 2009 (Cth) on 9 and 10 May 2023 by refusing to allow an official of the respondent, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, to enter its premises when that official had a right to do so in accordance with Pt 3-4 of the Fair Work Act: see Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Elecnor Australia Proprietary Limited [2025] FCA 156 (Liability Judgment, or LJ).

2    The question of what relief should be granted in respect of those contraventions was to be determined separately. The parties were subsequently ordered to file any evidence and submissions concerning the question of what relief the Court should grant pursuant to the Fair Work Act so as to give effect to the Liability Judgment. No further affidavit evidence was filed by Elecnor, though it tendered various documents concerning its industrial relations policies and processes. The Union adduced further affidavit evidence from the Union official in question, Mr Matthew Murphy, and also tendered some documentary evidence. Both parties filed written submissions.

3    The parties agreed that the Court should make an appropriate declaration or declarations in respect of Elecnor’s contraventions. It is nevertheless necessary to consider whether it is appropriate in all the circumstances for the Court to grant declaratory relief. It is also necessary to settle the appropriate terms of the declaration or declarations.

4    The parties also agreed that the Court should order Elecnor to pay pecuniary penalties in respect of its contraventions, however their submissions concerning the size of the penalties that the Court should consider to be appropriate for the purposes of s 546(1) of the Fair Work Act differed widely. The Union submitted that it would be appropriate for the Court to impose the maximum penalty of $82,500 for each contravention. Elecnor, however, submitted that it would be appropriate for the Court to impose a penalty or penalties at the “lower end of the range”.

5    The issue for determination by the Court is the size of the penalty that would be appropriate in all the circumstances.

6    For the reasons that follow, I consider that it is appropriate to make declarations concerning Elecnor’s contraventions. As for penalty, I consider that the appropriate penalties in all circumstances are a penalty of $75,000 in respect of the first contravention on 9 May 2023, and a penalty $50,000 in respect of the second contravention on 10 May 2023. In my view, those penalties, individually and collectively, are appropriate to secure the objective of deterrence and the promotion of compliance. They are no more than is necessary to secure those objectives.

Applicable principles

7    The principles which must be applied in determining the issues before the Court were essentially not in dispute between the parties and need only be addressed in brief terms.

Declaratory relief

8    In relation to declaratory relief, the Court has a wide discretionary power to make declarations under s 21 of the Federal Court of Australia Act 1976 (Cth). Before making a declaration, even by consent, the Court must be satisfied that: first, the proceeding involves a real controversy as opposed to a hypothetical or theoretical question; second, that the applicant has a real interest in raising the controversy or question; and third, that there is a proper contradictor: see Forster v Jododex Australia Pty Ltd (1972) 127 CLR 421 at 437-438.

9    The fact that a respondent who has a real interest in opposing the declaration nevertheless consents to the making of the declaration does not mean that there is no contradictor: Australian Competition and Consumer Commission v MSY Technology Pty Ltd (2012) 201 FCR 378 at [30]-[33]. Where the declaration concerns a contravention of a civil penalty provision, the Court must be satisfied that the respondent contravened the provision, even if the respondent consents to the making of the declaration. Material that provides the basis for the Court’s satisfaction can include or comprise a statement of agreed facts and admissions: Australian Securities Investments Commission v Rich [2004] NSWSC 836 at [15].

10    Declarations relating to contraventions of legislative provisions are likely to be appropriate where they serve to: record the Court’s disapproval of the contravening conduct and vindicate a regulator’s claim that the respondent contravened the provisions, assist a regulator to carry out its duties, and deter other persons from contravening the provisions: Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union [2006] FCA 1730 at [6] and the cases cited therein. The Court must be satisfied that a proposed declaration of contravention identifies the conduct that constituted the contravention, or the gist of the finding that amounted to the contravention: Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53 at [89].

Pecuniary penalties

11    In respect of the fixing of pecuniary penalties, the principles that apply in those circumstances are well settled, particularly in light of the judgment of the High Court in Australian Building and Construction Commission v Pattinson (2022) 274 CLR 450.

12    In short summary, the purpose of imposing a civil penalty is to promote the public interest in compliance with the relevant Act by the deterrence of further contraventions of a like kind. The Court must, in effect, attempt to put a price on the contravention that is sufficiently high to deter repetition by the contravener and by others who might be tempted to contravene. The penalty must not be one which would be regarded by the contravener or others as an acceptable cost of doing business. The penalty must not, however, be greater than is necessary to achieve the objective of deterrence. An appropriate penalty is said to be one that strikes a balance between oppressive severity and the need for deterrence in the particular case.

13    In determining the size of the penalty which would serve the objective of deterrence, the Court must have regard to both the circumstances of the contravener and the circumstances of the contravention. Without intending to be exhaustive, where the contravener is a corporation, the factors concerning the circumstances of the contravener which are generally relevant when determining the size of the penalty which would serve the objective of deterrence include: the size and financial position of the corporation; whether the corporation has a corporate culture conducive to compliance with the relevant Act; whether the contravener has engaged in similar conduct in the past; and whether the contravener has demonstrated contrition and cooperated with the relevant authorities.

14    Likewise, without intending to be exhaustive, the factors concerning the circumstances of the contravention which are generally relevant to determining the size of the penalty which would serve the objective of deterrence include: whether the contravening conduct was systematic, deliberate or covert; the period over which the contravening conduct occurred; whether the contravention arose out of the conduct of senior management; whether the contravener profited from the contravention, and, if so, the extent of that profit; and whether the contravention caused any loss or injury.

15    It should be emphasised that both the factors relating to the circumstances of the contravener and those relating to the circumstances of the contravention are only relevant to the extent that they bear on the question of the size of the penalty that is necessary to achieve the objective of deterrence. The purpose of imposing a penalty does not include retribution or punishment. The pecuniary penalty also need not be proportionate to the nature and circumstances of the contravention, at least in the sense that the principle of proportionality is understood in the criminal law.

16    The maximum penalty is also relevant when it comes to determining the size of the penalty, though it does not constrain the exercise of the discretion, beyond requiring some reasonable relationship between the theoretical maximum to the final penalty imposed. The maximum penalty would generally only be appropriate in the case of a contravention which warranted the strongest deterrence.

RELEVANT FACTUAL FINDINGS

17    I do not propose to repeat what I said in the Liability Judgment in respect of the facts which gave rise to or resulted in the contraventions. Nor do I propose to rehearse all the factual findings I made concerning the circumstances in which the contravention occurred. These reasons for judgment should be read in conjunction with the Liability Judgment and will assume that the reader is familiar with the findings previously made. I will generally employ the same terminology and defined terms that I employed in the Liability Judgment.

The APPROPRIATE PENALTY

18    The competing submissions of the parties concerning the appropriate penalty raise the following potentially relevant issues.

19    First, whether Elecnor’s decision to refuse Mr Murphy entry to the premises was not based on a genuine belief that he had no right to enter the premises, but was instead the product of a “considered industrial strategy”. The Union submitted that I had effectively made such finding at the liability stage, or if I had not, I should make that finding on the basis of the evidence before the Court in any event. Elecnor submitted that I had not, and should not, make any such finding.

20    Second, and relatedly, whether I should find that the contraventions were the product of a genuine and innocent misunderstanding by Elecnor about Mr Murphy’s right to enter the premises. Elecnor submitted that the evidence supported that finding. The Union disagreed.

21    Third, whether the officers, employees or agents of Elecnor who were ultimately responsible for refusing to allow Mr Murphy to enter the premises were mere “low-level” officers. Elecnor submitted that they were. The Union submitted that they were not.

22    Fourth, whether Elecnor had any appropriate industrial relations guidelines, systems or processes concerning which dealt with union officials’ right of entry to Elecnor’s premises and whether any such guidelines, systems or processes had been appropriately modified following the contraventions.

Factual findings

23    My findings in respect of those four issues are as follows.

24    I do not entirely accept the submissions of either party concerning the genuineness or otherwise of Elecnor’s belief as to Mr Murphy’s right to enter the premises.

25    As I found in the Liability Judgment, Elecnor refused Mr Murphy entry to the premises mainly because its responsible managers believed, apparently on the advice of Elecnor’s industrial relations consultant, Mr Nelson, that the Union was not entitled to represent the interests of the Catalpa workers: see LJ at [78]-[81], [92] and [191]. As I indicated in the Liability Judgment (at [191]), the genuineness of that belief was somewhat questionable in the circumstances. I am nevertheless unable to make a positive finding that the belief was in fact not genuine, particularly given that the officers of Elecnor who entertained and communicated that belief were not cross-examined about the genuineness of their belief. It was certainly not put to them that their belief was not genuinely held.

26    Nor, however, am I able to, or prepared to, make a positive finding that the belief was genuinely held, or that the considered decision by Elecnor to refuse Mr Murphy entry was the product of an entirely innocent mistake. What I do find about the decision to refuse entry to Mr Murphy is, that based on the advice of Mr Darren Nelson, who was an apparently experienced industrial relations consultant, Elecnor determined to refuse to permit any officials of Union (including Mr Murphy) to enter the premises to hold discussions with the Catalpa workers. Mr Nelson’s advice, which provided that the basis for that determination, included that the Union was not entitled to represent the industrial interests of the Catalpa workers. That advice was based on what could, at best, be said to be a narrow, strained and above all contestable interpretation of the Union’s rules.

27    Despite the somewhat questionable and contestable nature of Mr Nelson’s advice, Elecnor’s response to the Union’s attempts to exercise, through Mr Murphy, its right of entry could fairly be described as intransigent, uncompromising, uncooperative and aggressive. Elecnor was demonstrably unwilling to constructively engage with the Union on the question of whether it was entitled to represent the industrial interests of the Catalpa workers. It is equally apparent that Elecnor was unwilling to acquiesce or waver from its inflexible resolve to exclude the Union from the premises.

28    There could be no question that, for whatever reason, Elecnor did not want the Union officials to hold discussions with the Catalpa workers and was determined to ensure that that did not occur. To that extent, I would infer that Elecnor’s position could fairly be described as a “considered industrial strategy”. Elecnor’s somewhat intransigent and combative approach to the Union’s attempts to exercise rights of entry to the premises, in my view, compares most unfavourably with the Union’s approach which was entirely reasonable and cooperative.

29    I also do not entirely accept Elecnor’s submission that all its officers or employees who responsible for excluding the Union officials from entering the premises could fairly be described as merely “low-level managers”. While some of the responsible officers or employees appeared some way down the relevant management hierarchy, that appeared to largely be the product of the size and scales of Elecnor’s operations. It does not follow that they could properly be said to be low-level managers. Perhaps more significantly, I would not describe Mr Nelson as a low-level manager. He had a senior and responsible position at Elecnor in respect of the management of their industrial relations strategy and it was Mr Nelson who was effectively responsible for the decision and resolve refuse to permit any Union officials to enter the premises come what May.

30    In any event, even if the relevant officers or employees could fairly be described as low-level managers, I consider that there is some merit in the Union’s submission that the fact that the decision to exclude the Union officers was left up to low-level managers in any event reflects poorly on Elecnor’s general approach to industrial relations issues. If the decision to exclude the Union officers was left up to mere low-level managers, it perhaps should not have been.

31    As for whether Elecnor had industrial relations guidelines, policies or processes which included appropriate instructions for dealing with permit holder who sought to enter Elecnor’s premises, Elecnor tendered some documentary evidence which, broadly speaking, comprised its industrial relations compliance or regulatory manuals or guidelines. Those documents were not the subject of any evidence at the liability stage of the proceeding. Nor did Elecnor adduce any evidence at the penalty stage from any officer, employee, or agent in respect of those documents, or the company’s regulatory or compliance regime more generally. There was, for example, no evidence that any changes had been made to the compliance or regulatory regime after the contraventions specifically for the purpose of ensuring that there was no repetition of the contravening conduct. Some changes were made to the parts of the guidelines which dealt with the rights of entry, though there was no evidence to suggest that those changes were made specifically in response to the contraventions. More significantly, the changes were very minor and there was no evidence that Elecnor conducted any training or education in respect of those changes, or rights of entry of permit holders more generally.

The appropriate penalty

32    The right conferred by the Fair Work Act on union officers to enter an employer’s premises to consult workers whose interests the union genuinely believes it is entitled to represent is an important workplace right. While the right to enter premises which is conferred by s 484 of the Fair Work Act is separate to the right to enter premises for other purposes, such as to investigate suspected contraventions (s 481 of the Fair Work Act), or to inspect premises in respect of occupational health and safety concerns (s 494 of the of the Fair Work Act), it is nonetheless an important workplace right. It is not, as some of Elecnor’s submissions tended to suggest, a right which is conferred merely for the purposes of enabling a Union to recruit members. Unions have a legitimate right to hold discussions with workers on an employer’s premises to, for example, advise the workers that the union is entitled to represent their industrial interests, or to advise them as to specific workplace rights, or to consult them in relation to their pay and conditions. The relative importance of the right to enter in question in this case, and the need to ensure compliance with it, is important when it comes to determining the size of the penalty that is required to achieve the objective of deterrence, both specific and general.

33    Elecnor’s contraventions of s 501 of the Fair Work Act were serious contraventions. For the reasons I have already given, the approach taken by Elecnor to the Union officials’ attempts to exercise their rights of entry reflect poorly on it, its attitude to the rights that a unions has in certain circumstances to enter its premises, and its approach to industrial relations issues generally. As discussed earlier, its general approach was combative, uncompromising and confrontational. That suggests a need to impose a significant penalty in order to achieve the objective of specific deterrence.

34    There are, on the other hand, few if any facts or circumstances which reduce or mitigate the need for a significant penalty to achieve specific deterrence in the circumstances of this case.

35    There is, for example, no indication of any genuine contrition or remorse on the part of Elecnor. Elecnor’s general approach to these proceeding, including the penalty hearing, also tends, if anything, to suggest a relevant lack of insight into the nature and seriousness of its contravening conduct. While I accept that Elecnor ultimately did not dispute that it was appropriate for the Court to make declarations and impose pecuniary penalties in respect of the contraventions, it is somewhat questionable that those concessions reflect any genuine contrition or insight in respect of the nature and seriousness of its contravening conduct. They more likely reflect an appreciation of the inevitable.

36    The one circumstance that does temper the need for specific deterrence is that there is no evidence to suggest that Elecnor has previously been found to have contravened s 501 of the Fair Work Act. It certainly could not be said to be a recidivist.

37    A factor that is generally of some relevance when determining the size of the penalty that would be appropriate to achieve deterrence is the size and financial position of the contravener. That is because it is well accepted that the Court must fix penalties which put a “price” on the contravention which is sufficiently high to deter any further contraventions of a like kind. The size and financial resources of the contravening corporation are relevant considerations in determining that price.

38    Elecnor is part of a very large, well-resourced multinational group of companies. I would infer from the evidence before the Court, including evidence concerning the size of the projects with which Elecnor is involved, that it is a well-resourced and financially secure or financially supported company. Recent financial statements of Elecnor’s Australian parent company disclose that, while it made a large loss in the last financial year, its net assets exceeded $200 million and its current assets included cash and cash equivalent exceeds $150 million. The ultimate company of the Elecnor group appears to be a company incorporated in Spain which has net assets in the millions of euros. While Elecnor’s financial statements as at 31 December 2023 record that it had made a loss and that it had net liabilities of about $8.5 million, I would nevertheless infer that it is likely to be financially supported by its parent companies.

39    Both Elecnor and the Union advance submissions concerning the applicability and significance of the principles relating to course of conduct and totality. Those principles strictly apply when sentencing offenders for criminal offences, though it is now accepted that they may be used as tools of analysis when fixing pecuniary penalties. In my view, however, care must be taken when applying those principles in the pecuniary penalty context given that they are principles which are deeply rooted in notions of punishment, in particular, the need to avoid double-punishment and proportionality, and the need to impose a punishment which fits the crime. As is made clear in Pattinson, punishment and proportionality have no relevant role to play in fixing pecuniary penalties. That said, it is generally appropriate when fixing pecuniary penalties for more than one contravention to consider whether the contraventions form part of a single course of conduct. If they do form part of a course of conduct, it may be appropriate to moderate the penalties to take that factor into account so as to ensure that the aggregate penalty does not exceed the amount that is required to achieve deterrence.

40    In the present case, it is perhaps appropriate to view Elecnor’s two contraventions as forming part of a single course of conduct. That is because they both effectively flowed from Elecnor’s decision, based on Mr Nelson’s advice, that Union officials should not be permitted to enter the premises because the Union was not entitled to represent the industrial interests of the Catalpa workers. The fact that, viewed in that way, the contraventions formed part of a single course of conduct warrants some degree of moderation, particularly in respect of the penalty imposed in respect of the second contravention. In my view, however, the extent of that moderation is not great. That is because Elecnor had the opportunity to reconsider and reflect on its position after Mr Murphy was first excluded from the premises, yet it did not do so. Instead, it maintained its uncompromising and combative stance to the Union’s right of entry.

41    In all the circumstances, I do not accept Elecnor’s submission that the penalties for contravention should be towards the lower end of the range. Nor, however, do I accept the Union’s submission that the maximum penalty for both contraventions is appropriate. I do not accept that Elecnor’s contraventions warrant the strongest deterrence, particularly given that it has no history of engaging in contravening conduct of this nature in the past.

42    Having regard to the applicable principles and the factors and considerations to which I have referred, and the facts and circumstances of the case more generally, I consider that the appropriate penalties for the two contraventions are $75,000 in respect of the first contravention and $50,000 in respect of the second. Those penalties are appropriate are an appropriate “price” to achieve the important objective of deterrence. They do not exceed the amount necessary to achieve deterrence and bear a reasonable relationship to the applicable maximum penalties.

DECLARATIONS

43    As for the declarations, I am satisfied that it is appropriate to grant the declaratory relief sought by the Union.

44    I am satisfied that the proceeding involves a real controversy, that the Union had and has a real interest in raising the controversy, and that Elecnor was an appropriate and effective contradictor. I am also satisfied that the declarations are appropriate as they serve to record the Court’s disapproval of Elecnor’s contravening conduct and vindicate the Union’s claim that Elecnor contravened the provisions.

45    As for the terms of the declarations, I am satisfied that the terms of the declarations proposed by the Union are, subject to one minor alteration, appropriate. Having regard to the way the liability hearing proceeded, the declarations should be confined to the refusal to permit Mr Murphy entry to the premises. Subject to that, I am satisfied that the declarations appropriately identify the conduct that gave rise to contraventions.

CONCLUSION AND DISPOSITION

46    The Court will make the following declarations:

1.    Elecnor Australia Proprietary Limited contravened section 501 of the Fair Work Act 2009 (Cth) on 9 May 2023 by refusing Mr Matthew Murphy entry to the premises known as Buronga Camp, off Arumpo Road, Wentworth, NSW 2715, in circumstances where Mr Murphy had a right to enter the premises under section 484 of the Act and in accordance with Part 3-4 of the Act (the first contravention).

2.    Elecnor Australia contravened section 501 of the Act on 10 May 2023 by refusing Mr Matthew Murphy entry to the Buronga Camp in circumstances where Mr Murphy had a right to enter the premises under section 484 of the Act in accordance with Part 3-4 of the Act (the second contravention).

47    The Court will also order that Elecnor pay a pecuniary penalty of $75,000 in respect of the first contravention and a pecuniary penalty of $50,000 in respect of the second contravention. Those pecuniary penalties should be paid to the Union pursuant to s 546(3) of the Fair Work Act.

Associate:

Dated:    17 July 2025

SCHEDULE OF PARTIES