ABCC v CFMEU (Pacific Highway Upgrade Case) (No 4)
[2022] FedCFamC2G 608
•4 August 2022
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
ABCC v CFMEU (Pacific Highway Upgrade Case) (No 4) [2022] FedCFamC2G 608
File number(s): SYG 2015 of 2020 Judgment of: JUDGE HUMPHREYS Date of judgment: 4 August 2022 Catchwords: INDUSTRIAL LAW – Fair Work – imposition of pecuniary penalties – consideration of like contraventions. Legislation: Fair Work Act (Cth) 2009 ss 500, 546(1), 550, 793,
Work Health and Safety Act 2011 (NSW) s 119.
Cases cited: ABCC v CFMMEU (Pacific Highway upgrade Case) (No 3) [2022] FedCFamC2G 388
ABCC v CFMEU [2015] FCA 226
ABCC v Pattinson (2022) 399 ALR 599
ABCC v Reilly (No 3) [2022] FedCFamC2G 1
ACCC v South Goulburn Co-Operative Limited [2018] FCA 1965
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560
Canturi v Sita Coaches Pty Ltd (2002) 116 FCR 276; [2002] FCA 349
CFMMUE V ABCC [2020] FCA 1662
CFMMEU v ABCC (Broadway on Ann case) (2018) 265 FCR 208 at [27]
CFMMEU v ABCC (the Palmerston Police Station Case) [2021] FCA 1418
Director, Fair Work Building Inspectorate v Myles [2014] FCCA 1429
Fair Work Ombudsman v NoBrace Centre Pty Ltd (in Liquidation) [2019] FCCA 2979
Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown [2017] FCA 1301
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Seven Network (Operations) Pty Ltd v Communications, Electrical, Electronic, Energy Information, Postal Plumbing and Allied Services Union of Australia (CEPU) (2001) 110 IR 372
Symons v Paperless Warehousing Pty Ltd (No 2) [2022] FedCFamC2G 504
Division: Division 2 General Federal Law Number of paragraphs: 74 Date of last submission/s: 26 July 2022 Date of hearing: 26 July 2022 Place: Parramatta Counsel for the Applicant: Mr Chin of Senior Counsel and Ms Bulut Of Counsel Counsel for the Respondents: Mr Latham ORDERS
SYG 2015 of 2020 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER
Applicant
AND: CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION
First Respondent
MR DEAN LESLEY RIELLY
Second Respondent
MR PAUL FITZPATRICK
Third Respondent
ORDER MADE BY:
JUDGE HUMPHREYS
DATE OF ORDER:
4 AUGUST 2022
THE COURT ORDERS THAT:
1.Under section 546(1) of the Fair Work Act 2009 (Cth) (‘the Act”), the First Respondent pay a pecuniary penalty of $100,800.00 to the Commonwealth for the contraventions declared on 23 May 2022, within 28 days of this order.
2.Under section 546(1) of the Act, the Second Respondent pay a pecuniary penalty of $8,820.00 to the Commonwealth for the contravention declared on 23 May 2022, within 28 days of this order.
3.Under section 546(1) of the Act, the Third Respondent pay a pecuniary penalty of $5,040.00 to the Commonwealth for the contravention declared on 23 May 2022, within 28 days of this order.
4.The application for a stay of these orders is adjourned to 9:00am on Friday 12 August 2022.
5.Parties are to file submissions in relation to the stay application on or before Thursday 11 August 2022.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE HUMPHREYS
INTRODUCTION
This judgement concerns the imposition of appropriate penalties to be imposed on the each of the respondents following the decision of this Court in ABCC v CFMMEU (Pacific Highway upgrade Case) (No 3) [2022] FedCFamC2G 388 handed down on 23 May 2022.
In that judgement, the Court found that each of the respondents contravened
s 500 of the Fair Work Act 2009 (Cth) (“the Act”) by intentionally hindering, or obstructing Seymour Whyte Constructions Pty Ltd and/or KFC Constructions Pty Ltd from completing a concrete pour at the site of the construction of a bridge, known as the A22 on the Pacific Highway upgrade project near Glenugie, while exercising or seeking to exercise rights of entry in accordance with Part 3-4 of the Act.
The full facts of the contraventions are set out in the previous judgement, but may be summarised as follows. Mr Dean Reilly (“the second respondent”) and Mr Paul Fitzpatrick (“the third respondent”) were Officials of the first respondent, the Construction, Maritime, Mining and Energy Union (“CFMMEU”).
On 22 August 2019, Mr Reilly and Mr Fitzpatrick lawfully entered the worksite, on the Woolgoolga to Ballina Pacific Highway upgrade, as the holders of work entry permits, in relation to issues concerning workplace safety. Mr Reilly and Mr Fitzpatrick intentionally positioned themselves in between the rear of a concrete truck and the site of a concrete pour, thereby preventing the truck from reversing towards the concrete pour area, for the purpose of completing the pour. This caused the concrete pour to be abandoned and the contents of the concrete truck, amounting to 6 m³ of concrete, to be dumped as no longer usable. It was alleged that one and a half days of work time was lost as a result of the actions of Mr Reilly and Mr Fitzpatrick. The proceedings against the CFMMEU proceeded upon the basis of accessorial liability, by reason of the operation of ss 793 and 550 of the Act.
The Court notes that the maximum penalty the Court can impose on each of the respondents for a breach of s 500 of the Act is 300 penalty units. This equates as at 22 August 2019 to:
a. $12,600 in respect of Mr Reilly and Mr Fitzpatrick.
b. $63,000 in respect of the CFMMEU for each of the contraventions.
EVIDENCE TENDERED ON BEHALF OF THE APPLICANT.
In an Affidavit sworn 16 June 2022, Cilla Robinson, Solicitor, provided the Court with the following information:
a. A list of changes to offices and the names and addresses of the persons holding those offices as at 7 June 2022;
b. Financial statements for the CFMMEU as at 31 December 2020;
c. financial statements for the CFMMEU for the year ended 31 March 2021;
d. two table documents outlining 192 previous matters involving penalties and declarations under industrial laws involving the CFMMEU or its predecessors dating back to approximately 1999, together with a second table outlining a history of s5900 contraventions by the CFMME or its predecessor.
e. A “Linked In” profile of Dean Reilly indicating that he has been a Union Official with the CFMMEU since June 2016.
Objection was taken by Counsel for the respondents to the tables outlined at point d above. It was submitted that based on the decision of the High Court in ABCC v Pattinson (2020) 399 ALR 599 (“Pattinson”) that the cases outlined were not like contraventions and thus had no relevance to the current matter. It was submitted that only those matters which arose post-2017, when the legislation was changed in relation to accessorial liability, were “like contraventions”: (see; Pattinson at [9]). It was submitted that the current case can be distinguished from others 500 of the Act contraventions, as the Court found that the respondents entered the work site lawfully. It was further submitted that the material in the tables can be given no weight in the absence of a full analysis of the factual issues in each matter.
The Court rejects this proposition. The Court is properly entitled to take account of the entire history of the CFMMEU in relation to contraventions. What weight the Court gives that history is a matter for the Court in the task it undertakes to arrive at the appropriate penalty. Clearly, like contraventions will factor more so in considering what is required as an appropriate penalty as compared to contraventions that are not recent and may involve breaches not similar to the one under consideration. It is all a matter of weight in the ‘instinctive synthesis’ process involved in arriving at an appropriate penalty.
The Court has taken the time to peruse those matters post-2017 and identify those matters that involve similar facts. The table simply simplifies the task of the Court in doing so. The Court does not rely upon the summaries of the cases within the second table as the only source of information. The Court notes n\however that there have been 24 contraventions post 2017 involving a breach of s500.
For these reasons the Court admitted the Tables into evidence.
THE APPLICANT’S SUBMISSIONS
On behalf of the applicant, it was submitted that the pecuniary penalties to be imposed on each of the three respondents, should be within the following ranges:
a. CFMMEU: $56,700 - $63,000 being 90-100% of the maximum for each contravention;
b. Mr Reilly: $8,820 - $10,080 being 70-80% of the maximum;
c. Mr Fitzpatrick: $40 - $6,300 being with 40 -50% of the maximum.
The Court’s discretion to order “appropriate” pecuniary penalties pursuant to
s 546(1) of the Act should be guided by the primary objective of deterrence, both specific and general. Further there is a need for proportionality in the sense of striking a reasonable balance between deterrence and oppressive severity: (see; Pattinson at [15] – [19]). The Court should have regard to all matters relevant to the deterrence of contraventions of this kind before the Court. These broadly relate to the objective nature and seriousness of the offending conduct, as well as the particular circumstances of the contraveners: (see; Pattinson at [15] – [19]).
In Pattinson, the High Court confirmed that the civil penalties under the Act “are not retributive, but rather are protective of the public interest in that they aim to secure compliance by deterring repeat contraventions”: (see; Pattinson at [42]). Accordingly, the maximum penalties provided under the Act are not reserved exclusively for the worst category of contravening conduct:
(see; Pattinson at [49]). All that is required, is a reasonable relationship between the theoretical maximum and the penalty imposed which may be established because of the circumstances of the contravened bears upon the extent of the need for deterrence in the penalty imposed: (see; Pattinson at [55]).
Thus a well-resourced, more determined and deliberate contravener will require a greater financial deterrent to ensure that the “price of having its way is not sustainable”: (see; Pattinson at [60]). Where a contravention has occurred as part of a strategy pursued without regard to the law, a Court may reasonably conclude that no penalty short of the maximum penalty would be appropriate. In such circumstances “with considerations of deterrence, and the protection of 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”: (see; Pattinson at [60]).
A maximum penalty may be particularly appropriate where a contravention involved “adherence to a strategy of choosing to pay a penalty in preference to obeying the law”: (see; Pattinson at [50] and [67]). In such case, the Court may “reasonably fix a penalty at the maximum set by statute with a view to making continued adherence to the strategy in the ongoing conduct of the contravener’s affairs as unattractive as it is open to the Court reasonably to”: (see; Pattinson at [50]).
In terms of the deliberate nature and extent of the contraventions, it was submitted that the ongoing differences between the CFMMEU Officials and Seymour White regarding site access, took place in circumstances where Seymour White considered that the Union Officials tried to enter the site improperly. Further, they did not follow the protocol for entry onto site. There was no reasonable or coherent explanation as to why Mr Reilly and Mr Fitzpatrick were present at the A22 bridge site other than, their arrival “may be viewed as rather convenient”. Upon arrival, Mr Reilly commenced filling an s 119 notice, pursuant to the Work Health and Safety Act 2011 (NSW) prior to entry onto the site. It was submitted that the pretext for obstructing the concrete pour being the exclusion zone issue, the spotter issue and the false allegation that the truck reversed towards them, were baseless and/ or otherwise failed to justify the obstruction. It was submitted that Mr Reilly and Mr Fitzpatrick effectively and deliberately created the safety risk while they were on the site, by positioning themselves directly behind a truck that was poised to commence a concrete pour. Conduct that jeopardises safety, is to be discouraged. Particular by those who profess to police it: (see; Director, Fair Work Building Inspectorate v Myles [2014] FCCA 1429 at [13]).
It was submitted that it should be concluded that the respondents entered the project site with the intention to cause disruption to the work being performed on the day, and intended for the concrete pour to be abandoned.
In terms of the loss suffered, this amounted to 6 m³ of concrete and the concrete pour scheduled to have been completed on 22 August 2019 was required to be completed on 24 August 2019.
In terms of remorse or contrition, there is no evidence of any remorse or contrition for any of the respondents conduct leading to the contraventions. Whilst not an aggravating factor, this may affect the capacity for any leniency: (see; CFMMEU v ABCC (the Palmerston Police Station Case) [2021] FCA 1418 at [98]). The failure to manifest contrition or insight into past behaviour (together with the other factors referred to herein), should lead the Court to conclude that higher penalties are in order to serve the purpose of deterring future contraventions:
(see; CFMMUE V ABCC [2020] FCA 1662 at [83]) per Colvin J.
In terms of the particular circumstances of the contraveners in the contravention, it was submitted that the CFMMEU is a well-resourced recidivist offender. The Courts have consistently and strongly criticised the Union for its poor compliance record. The Courts have held that the CFMMEU is a large, asset rich and well-resourced body. Specifically, the National Office of the Construction and General division had total equity or general funds of $11,789,133 as at 31 March 2021. It was submitted that the CFMMEU has historically acted in disregard of the law and treats the imposition of pecuniary penalties as “little more than the cost of its preferred business model” and “in preference to obeying the law”: (see; ABCC v CFMEU [2015] FCA 226 at [28]).
Since about 2000, the CFMMEU has contravened industrial legislation on approximately 192 separate cases with most cases involving findings of multiple contraventions. Specifically, there were 47 cases involving the CFMMEU’s contravention of s 500 of the Act and its predecessor, totalling 163 separate contraventions.
It was submitted that the CFMMEU’s continued willingness to engage in contravention conduct supports the view that earlier penalties, some of them up to the maximum, have to date not had a deterrent effect. Rather, the CFMMEU regards previous penalties imposed as an “acceptable cost of doing business”: (see; Pattinson at [43]).
It was further submitted that in relation to Mr Reilly, ABCC V Reilly (No 3) [2022] FedCFamC2G 1, Judge Driver of this Court found that Mr Reilly threatened to organise or take action against a third party, with the intent to coerce them to engage in industrial activity by complying with the requirement of the CFMMEU that its employees become Union members, that all labour hire entities engage be covered by a CFMMEU enterprise agreement and it terminate current contracts with labour hire entities because they had not made a CFMMEU enterprise agreement. The Court notes that in that case, Judge Driver imposed a pecuniary penalty of $10,000 for contraventions of ss 348, 355, 340 and 346 of the Act. Whilst this previous contravention does not result in penalties being increased, it means that any leniency which might be shown to Mr Reilly should be decreased.
Whilst there were two contraventions by the CFMMEU of s 500 one of the Act in relation to Mr Fitzpatrick, and in relation to Mr Reilly, it was submitted that these should be treated as substantially the same act and not attract a double penalty. Rather, a single overall penalty should be imposed for both contraventions.
In terms of Mr Reilly, it was submitted that his conduct was deliberate. Mr Reilly was the one who filled in the s 119 of the Act form, and refused to move after being repeatedly asked to do so.
In terms of Mr Fitzpatrick, again his conduct was deliberate. It was submitted however, that Mr Fitzpatrick’s penalty should be less than that of Mr Reilly.
EVIDENCE SUBMITTED BY THE RESPONDENTS
In an Affidavit of Timothy McCauley affirmed 7 July 2022, the Court was provided with material that indicated that Mr Reilly has undertaken a training in respect of his obligations under the Act. This appears however, to be also related to circumstances where Mr Reilly is seeking a renewal of his right of entry permit and it is being opposed.
A further Affidavit was tendered showing that that Mr Fitzpatrick had also undertaken retraining directed to his contravening conduct, and provided with sufficient knowledge to facilitate his future compliance with the law. This training was also undertaken Mr Brian Lacey AO. The Court has perused the content of the training provided and notes the opinion provided by Mr Lacey that both Mr Fitzpatrick and Mr Reilly now understand their responsibilities as a right of entry permit holder and have “the ability and a willingness to comply with the law in the future”.
THE RESPONDENTS’ SUBMISSIONS
Counsel for the respondents took issue with the fact that the Court related declarations in its liability judgement with respect to making declarations that the respondent should pay a pecuniary penalty in circumstances where there was a discretion as to whether or not to apply a penalty. Notwithstanding this, with it is conceded that the respondent’s accepted civil penalties of some sort, appropriate.
It was submitted that the principles derived from Pattinson, which relate to the importance of deterrence, need also to be read with the well-established important principle of discretion. Reliance was placed on Symons v Paperless Warehousing Pty Ltd (No 2) [2022] FedCFamC2G 504 (“Symons”) where the Court found at [12]:
The point of principle the plurality in Pattinson decided is a negative one: the notion of proportionality drawn from the criminal law has no place in the making of an order under s 546(1) of the FW Act for the payment of a pecuniary penalty; the plurality did not intend to alter the principles for assessing penalties that had been applied before the full Federal Court published its judgement in Pattinson.
It was submitted that the Court in Symons went on to hold that the two sets of well-settled principles. The first related to the importance of deterrence. The second related to the importance of discretion. As to the second, the Court at [16] referred to the “identification weighing particular factors when assessing a penalty”.
It was submitted that the following matters needed to be taken into account first, the nature and extent of the contravening conduct. It was submitted that both the first and second respondent exercise the rights of entry pursuant to s 117 of the WHS Act. They were entitled to do so for those purposes.
Further, they were not constrained by any “protocol” as suggested by the company Officials and the company Officials acted unlawfully in seeking to impose upon this protocol upon them.
It was submitted that the Court did not find that there was no reasonable or coherent explanation as to why the first and second respondent were present at the project site. There were a series of hazards that were accepted by Mr Lawson.
It was submitted that the submission that the area plainly constituted an exclusion zone was not supported by the evidence. There is no doubt that the error was potentially hazardous. That might well mean that people could reasonably be excluded from it, had steps been taken consistent with the policies and procedures that apply to the Pacific complete worksite. However, the evidence of the lack of delineation for the zone was clear.
It was also submitted that the applicant Commissioner does not describe all the harassment of the Officials by being repeatedly asked to sign the task card which was not a requirement of the site, the continual “unlawful” request to leave the site and the unjustified threats to call the Police.
In terms of the amount of loss or damage caused, it was submitted that the loss of 6 m³ of concrete whilst unfortunate, was at the low end of the range of potential economic loss.
In terms of the circumstances in which the conduct took place, it was submitted that the applicant’s submissions appeared to be focused almost exclusively on the past contraventions of the CFMMEU. It was submitted that in order for the Court to properly apply the principles in Pattinson, it was necessary for the Court to consider contraventions of a like kind. Contraventions not involving the right of entry are, it was submitted, irrelevant. Further, the circumstances of the incident contravention that need to be examined. The choice of penalty “must be dictated by the individual circumstances of the case, not by a line by line comparison with another case: (see; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at [12]).
It was submitted that the circumstances in this case were unusual. It was further submitted that, the Court could rightly assume that it is unlikely a person might find themselves in substantially the same circumstances as the respondents when they engage in the contravening conduct. In these circumstances, the principle of deterrence does not require a penalty at the high end.
It was noted that Mr Reilly, subsequent to the conduct of the subject of the present matter, was found to have contravened provisions of the Act being ss 340, 346, 348 and 355 of the Act. It was submitted that these findings were of a different nature to the contravention in the current proceedings and the findings were made after the conduct the subject of the present application. In these circumstances, there was no basis for the Court to infer in the present case that there was a tangible risk that Mr Reilly will contravene s 500 of the Act again, such that the penalty imposed should reflect an element of specific deterrence.
It was submitted that it was a significant to the issue of specific deterrence that Reilly has subsequently undertaken a training course presented by former Senior Deputy President Lacey AO of the former Australian Industrial Relations Commission. It was submitted that Mr Lacey reports that Mr Reilly participated positively in the training provided and responded well to the direction and instructions given. Mr Lacey states that Mr Reilly has learned from his contravening conduct and has committed not to engage in that conduct in the future. Further, he is satisfied that Reilly has a knowledge, the ability and willingness to comply with the law in the future.
In relation to Mr Fitzpatrick, it was submitted his role in the contraventions was significantly less than that of Mr Reilly. Nonetheless, on learning of Mr Reilly’s training, Mr Fitzpatrick requested the CFMMEU organise exactly the same training for him which the Union has agreed to. That training was scheduled to take place on 21 July 22. The respondents have adduced additional evidence, without objection, indicating that training has indeed taken place.
In the matter of ABCC v CFMEU (the Titan Cranes case) Justice Logan stated as follows at [47]:
Once again, in the present case, the training which Mr Lacey has administered to each of Mr Seiffert, Mr Murdoch and Mr Rapata can only be seen as a welcome development, or perhaps more aptly, a further welcome development. It is a development that reflects well on the CFMMEU for agreeing to undertake it. I accept it reflects an acknowledgement on the part of both individual respondents, as well as the CFMMEU of a problem requiring corrective action.
It was submitted that all of circumstances, the appropriate penalty for each of Mr Reilly and Mr Fitzpatrick was in the low to mid-range, between 25 – 45% of the maximum
It was further submitted that the tables contained in the Affidavit tendered by the applicants were of limited use, in particular in the absence of an analysis of the full facts, including not only factual issues but legal issues such as the application of s 556 of the Act or the principles relating to “course of conduct” and totality”: (see; ACCC v South Goulburn Co-Operative Limited [2018] FCA 1965 per Beach J). It was submitted that the organisation of the training was a significant reduction in the proposed penalty, combined with the principle of totality that the total penalty should be fixed at 30% of the combined maximum penalty in respect of the union.
A significant issue arose as to the issue of contrition and remorse. Counsel for the respondents submitted that post-Pattinson, contrition and remorse were no longer relevant considerations. It was submitted that deterrence was the only object in a civil penalty case (see; Pattinson at [16]), and that the considerations formulated in Mason v Harrington Corporation Pty Ltd [2007] FMCA in so far as they relate to contrition and remorse are no longer good law. The Court does not accept this submission. The following appears at [47] in Pattinson:
The penalty that is appropriate to protect the public interest in deterring future contraventions of the Act may also be moderated by taking into account other factors adverted to by French J in CSR [Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 at [52]. For example, where those responsible for a contravention express genuine remorse for the contravention, it might be considered appropriate to impose only a moderate penalty because no more would be necessary to incentivise the contravenors to remain mindful of their remorse and their public expressions of that remorse to the Court.
CONSIDERATION
The Court has a broad discretion as to penalty. In Fair Work Ombudsman v NSH North Pty Ltd t/as New Shanghai Charlestown [2017] FCA 1301 Bromwich J summarised how the discretion is to be approached at [36], as follows:
1. Identify the separate contraventions, with each breach of each obligation being a separate contravention, and each breach of a term of the Award being a separate contravention.
2. Consider whether each separate contravention should be dealt with independently or with some degree of aggregation for those contraventions arising out of a course of conduct, noting that s 557 of the FW Act provides that two or more contraventions of a given civil remedy provision are to be taken to be a single contravention if committed by the same person and arising out of a course of conduct by that person.
3. Consider whether there should be further adjustment to ensure that, to the extent of any overlap between groups of separate aggregated contraventions, there is no double penalty imposed, and that the penalty is an appropriate response to what each respondent did.
4. Consider the appropriate penalty in respect of each final individual group of contraventions, taken in isolation.
5. Consider the overall penalties arrived at, including by reference to those which may be proposed by the FWO (as permitted by Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; 258 CLR 482 (CFMEU Civil Penalties Case) at [64]) and what is proposed by the respondents, and apply the totality principle, to ensure that the penalties for each respondent are appropriate and proportionate to the conduct viewed as a whole, making such adjustments as are necessary: see Kelly v Fitzpatrick [2007] FCA 1080; 166 IR 14 at [30]; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; 165 FCR 560 at [23]. [71] and [102].
The purpose of a civil penalty is primarily, if not wholly, promoting the public interest in compliance with the laws that have been contravened, and it does not engage principles of retribution or rehabilitation: (see; Fair Work Ombudsman v NoBrace Centre Pty Ltd (in Liquidation) [2019] FCCA 2979 (“NoBrace”) per Kelly J at [65]). As these principles of retribution or rehabilitation are not involved in the determination of a civil penalty, this intensifies the focus of a civil penalty determination on issues of specific and general deterrence: (see; NoBrace at [66], Pattinson at [50]). That may include the imposition of the maximum penalty where it is apparent that no lesser penalty will be an effective deterrent
The Act does not set out any mandatory criteria, inclusive or exclusive, that the Court must consider when determining whether to impose a penalty or the amount of any penalty: (see; Canturi v Sita Coaches Pty Ltd (2002) 116 FCR 276; [2002] FCA 349 at [88]). The choice of penalty must be guided by the “individual circumstances of a case, not by a line-by-line comparison with another case”: (see; Australian Ophthalmic Supplies Pty Ltd v McAlary‑Smith (2008) 165 FCR 560 at [12]). The process is an intuitive one by the Court and not an application of a scientific process: (see; Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70 at [60]‑[63]).
In Mason v Harrington Corporation Pty Ltd [2007] FMCA 7, Mobray FCM set out what is a now well accepted set of factors relevant in assessing a pecuniary penalty. They are as follows:
a. the nature and extent of the conduct which led to the breaches;
b. the circumstances in which the conduct took place;
c. the nature and extent of any loss sustained as a result of the breaches;
d. whether there has been similar previous conduct by the Respondents;
e. whether the breaches were properly distinct or arose out of one course of conduct;
f. the size of the business enterprise involved;
g. whether or not the breaches were deliberate;
h. whether senior management was involved in the breaches;
i. whether the party committing the breach had exhibited contrition;
j. whether the party committing the breach had taken corrective action;
k. whether the party committing the breach had cooperated with enforcement authorities;
l. the need to ensure compliance with minimum standards by provision of an effective means for the investigation and enforcement of employee entitlements; and
m. the need for specific and general deterrence.
Merkel J in Seven Network (Operations) Pty Ltd v Communications, Electrical, Electronic, Energy Information, Postal Plumbing and Allied Services Union of Australia (CEPU) (2001) 110 IR 372 set out some guiding considerations for the Court at [374]:
…matters to be taken into account in determining the appropriate penalty include the cost of the contravention, deterrence, the flagrancy and deliberateness of the breach, the offender’s past record of behaviour and any contrition displayed by the offender.
It is perhaps appropriate to deal with the CFMMEU first. This is a Union which has a long and troubled history of breaches of the relevant workplace legislation. It is a Union that appears to have a preferred mode of business that accepts prosecution for breaches of the relevant legislation as an occupational hazard, and presumably the imposition of pecuniary penalties in the same casual manner.[1]
[1] With apologies to the opening of the television program “Porridge”
The Court rejects the assertion put on behalf of the CFMMEU that the Court can only look to breaches of s 500 of the Act in determining appropriate penalties. For the reasons set out above, the Court is satisfied that it is entitled to look at the totality of the history of contraventions by the CFMMEU of the Act in the consideration of what is appropriate penalty.
The Court accepts the submission of the applicants that nothing in the High Court’s decision in Pattinson confined the relevance of prior contraventions of those concerning only the same kind of contraventions of the same provisions of the Act. Specific reference was made by the High Court in Pattinson at [59] to “a strategy of non-compliance” by the CFMMEU with workplace legislation. Tracy J in CFMMEU v ABCC (Broadway on Ann case) (2018) 265 FCR 208 at [27] referred to the history of the CFMEU (as it was called then) stating:
…the many decisions of the Court over the past 15 years in which the CFMEU has been find liable and penalised for failures to comply with entry requirements on building sites and for the misconduct of its officials while exercising rights of entry on those sites.
His Honour went on to say that the repeated contraventions:
…emphasise the objective seriousness of the CFMEU’s conduct, acting through its officials. They bespeak deliberate abuse of the CFMEU’s privileged position as a registered organisation in the Federal industrial relations law.
Given the findings of the High Court in Pattinson the Court is satisfied that it is entitled to look at imposing a pecuniary penalty at the very high end of the available range of penalties in order to again emphasise the need for specific deterrence.
The Court has taken account of the size of the CFMMEU and its financial resources which indicate that has a capacity to pay any pecuniary penalty that the Court might deem appropriate.
The Court notes that the contraventions were not occasioned by senior employees of the CFMMEU. The nature of the loss occasioned by the contravention was agreed by the parties to be moderate, being the loss of 6 m2 of concrete and 1.5 days of work on a relatively small concrete pour.
The Court is also taken account that no remorse or contrition has been evidenced by the CFMMEU, and accordingly, no reduction in penalty is available in relation to this factor. Further, that has been no cooperation with the applicant post the initiation of the proceedings, and indeed, it would be fair to say that the prosecution has been very hard fought at every stage.
While the Court welcomes the conduct of remedial training in relation to its Officers, the Court does not consider that the conduct of this training is a matter that should attract a significant discount in the appropriate penalty. It is not unreasonable to expect that a Union Official should be fully trained upon their initial employment and aware of their rights under the Act and what conduct is appropriate when entering a worksite. That is, remedial training should not be necessary. The remedial training has, however, been considered when assessing the appropriate penalties to be imposed.
Whilst the Court accepts that Mr Rielly and Mr Fitzpatrick had a right of entry into the work site, the Court is satisfied that their conduct in standing at the rear of the concrete truck in between the truck and the poor side was intentional and deliberate.
The Court is reasonably satisfied that whilst there are two breaches of s 500 of the Act by the CFMMEU, the two breaches should be treated as a course of conduct and the overall pecuniary penalty moderated.
Taking all of the relevant factors into account, including the principle of totality, the Court is of the view that the appropriate penalty in respect of each contravention of s 500 of the Act should be set at 80% of the maximum available of $63,000.00. This equals $50,400.00 in respect of each contravention or a total of $100,800.00.
In relation to Mr Rielly, the Court notes the submission by the applicant is that it should be set at 70% to 80% of the maximum or between $8,820 and $10,800. The Court is satisfied that Mr Rielley took the lead role in the contraventions. At all times, Mr Rielly deliberately and intentionally refused to move away from the back of the concrete agitator until after the concrete pour was abandoned.
According to Mr Rielly’s LinkedIn profile, which was contained in evidence tendered by the applicant, he has been involved in the building industry for some considerable point of time and has been employed by the CFMMEU for over six years. The Court acknowledges that he has undertaken retraining, but notes this is in circumstances apparently where his application for a right of entry permit is being opposed.
No evidence has been put to the Court as to his financial situation and the Court assumes that his income is relatively modest but that, in the absence of any information to the contrary, he has the capacity to pay a pecuniary penalty.
There is no evidence before the Court that Mr Rielly has exhibited any contrition or remorse or that he has cooperated in any way with the applicant either prior to or post the initiation of the proceedings.
The Court notes Mr Reilly has a previous proven contravention but that the proceedings in relation to that contravention occurred post the date of this contravention. The Court has given very little weight to this previous contravention in assessing the overall appropriate penalty.
The Court is satisfied that there is a significant requirement for specific deterrence in his case and that there is a need for general deterrence amongst officials of the CFMMEU with in relation to breaches of the Act. Taking into account all of the relevant considerations, the Court is satisfied the appropriate penalty in this case should be $8,820.00.
In relation to Mr Fitzpatrick, the Court is satisfied that he played a lesser role in the contraventions. Unlike Mr Riley, Mr Fitzpatrick has no previous history of contraventions of the Act. This fact entitles the degree of leniency in relation to him as a first offender.
No evidence again is before the Court that Mr Fitzpatrick has exhibited any contrition or remorse or that his cooperated in any way with the applicant either prior to or post the initiation of the proceedings. The Court notes and welcomes the fact that Mr Fitzpatrick has undertaken retraining and gives this appropriate weight in the overall consideration of the penalty
No evidence is before the Court in relation to his financial circumstances and capacity to pay a pecuniary penalty. The Court assumes that he has a relatively modest income but has the capacity to pay whatever penalty the Court fixes.
CONCLUSION
Taking account all of the relevant factors, the Court fixes a penalty in respect of Mr Fitzpatrick of $5,040.00.
Each of the above penalties is to be paid within 28 days of the Court’s order. The penalties are to be paid to the Commonwealth.
I certify that the preceding seventy-four (74) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Humphreys. Associate:
Dated: 4 August 2022
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