ABCC v Forest Meiers Construction Pty Ltd and Anor (No.2)

[2019] FCCA 2663

FEDERAL CIRCUIT COURT OF AUSTRALIA

ABCC v FOREST MEIERS CONSTRUCTION PTY LTD & ANOR (No.2) [2019] FCCA 2663

Catchwords:
INDUSTRIAL LAW – Commonwealth – compliance and enforcement – civil remedies – pecuniary penalty orders – assessing penalty – deterrence.

Legislation:

Fair Work Act 2009 (Cth), ss.340, 354, 546, 550(1), 557(1)

Cases cited:

Australian Building And Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Quest Apartments Case) (No 2) (2018) 358 ALR 725

Australian Building And Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157
Construction, Forestry, Mining and Energy Union v Australian Building And Construction Commissioner (Non-Indemnification Personal Payment Case) (2018) 280 IR 28

Applicant: AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER

First Respondent: FOREST MEIERS CONSTRUCTION PTY LTD

Second Respondent: WILLIAM MUNRO

File Number: BRG 151 of 2016

Judgment of: Judge Jarrett

Hearing date: 18 September 2019

Date of Last Submission: 18 September 2019

Delivered at: Brisbane

Delivered on: 20 September 2019

REPRESENTATION

Counsel for the Applicant: Mr Duffy QC with Mr Mackie

Solicitors for the Applicant: K & L Gates

Counsel for the Respondents: Mr J Murdoch QC

Solicitors for the Respondents: Norton Rose Fulbright Australia

ORDERS

1. In respect of the first respondent’s contravention of s.340 of the Fair Work Act 2009 (Cth) the subject of declaration 1 made on 17 July, 2019 the first respondent pay a pecuniary penalty of $32,000;

2. In respect of the first respondent’s contravention of s.354 of the Fair Work Act 2009 (Cth) the subject of declaration 2 made on 17 July, 2019 no pecuniary penalty be imposed upon the first respondent;

3. In respect of the second respondent’s contravention of s.340 of the Fair Work Act 2009 (Cth) the subject of declaration 3 made on 17 July, 2019 the second respondent pay a pecuniary penalty of $3,000;

4. In respect of the second respondent’s contravention of s.354 of the Fair Work Act 2009 (Cth) the subject of declaration 4 made on 17 July, 2019 no pecuniary penalty be imposed upon the second respondent;

5. The penalties imposed by orders (1) and (3) hereof be paid to the Commonwealth of Australia within 28 days of the date of these orders.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 151 of 2016

AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER

Applicant

And

FOREST MEIERS CONSTRUCTION PTY LTD

First Respondent

WILLIAM MUNRO

Second Respondent

REASONS FOR JUDGMENT

1. In March, 2014 Forest Meiers contravened s.340 and s.354 of the Fair Work Act 2009 (Cth) when, acting through the agency of the second respondent Mr Munro, it refused to engage another unrelated company, C&K Tiling Pty Ltd to supply and install tile at a construction project at the corner of Remora Road and MacArthur Avenue, Hamilton, Queensland. Forest Meiers refused to engage C&K Tiling for that work because C&K had a workplace right represented by:

   a)the benefit of having the C & K Tiling Pty Ltd Enterprise Agreement; and

   b)the choice that it made when it entered into the C&K Agreement not to have it cover the Construction, Forestry, Mining, Energy Union.

2. By reason of its contravention of the Fair Work Act, Forest Meiers is liable to the imposition of pecuniary penalties pursuant to s.546 of that Act. So too, is Mr Munro. He was involved in Forest Meier’s contraventions for the purposes of s.550(1) of the Fair Work Act and is liable to the imposition of a pecuniary penalties under the Act as if he too, contravened the Act in the way in which Forest Meiers did. These reasons relate to the assessment and imposition of those penalties.

3. The contravention by Forest Meiers arises against the following background facts:

   a)between 2013 and 2015, Shayher Developments Pty Ltd was the developer of a mixed use residential and commercial construction project consisting of four high-rise towers known as the Remora Road project located at the corner of Remora Road and MacArthur Avenue, Hamilton, Queensland.  Construction commenced in or around December, 2012 and was completed in or around May, 2015;

   b)Shayher Developments engaged Forest Meiers as the head contractor to manage and deliver the construction of the project.  Mr Munro was, at all relevant times, an employee of Forest Meiers and engaged in the position of construction manager for the project;

   c)during the construction of the project, Forest Meiers conducted a tender process for a particular package of work, namely, the supply and installation of tile to the commercial and residential tenancies and the common areas of four buildings that comprised the project;

   d)in early February, 2014 Forest Meiers advertised the tiling works for tender.  At some point in the tender process, tenderers were also asked whether or not the tenderer was covered by an enterprise agreement that covered the CFMEU;

   e)on 25 February, 2014 Mr Elie Chebib, on behalf of C&K, sent a tender to Forest Meiers for the tiling works.  However, the scope of works was evolving.  There were multiple revisions to both the scope of works and the price tendered.  Between February and June, 2014 Mr Chebib and Mr Jason Karam of C&K had several discussions with Mr Munro and Mr William Blacker of Forest Meiers regarding the price for the tiling works;

   f)on 3 April, 2014 Mr Julian Souva, Mr Blacker and Mr Chebib of Forest Meiers had a meeting with Mr Karam regarding the tiling works.  Words to the following effect were exchanged:

   Mr Blacker: Do you have an EBA?

   Mr Karam: Yes we have an EBA with Fair Work.

   Mr Blacker: Do you have an EBA with the CFMEU?

   Mr Karam: No.

   Mr Blacker: Will you have any problems getting an EBA with them?

   Mr Karam: No, but we shouldn’t need to as we have an EBA.

   Mr Blacker: Does the CFMEU have any problems with you? You will need to have an EBA with them.

   Mr Karam: No, they don’t have a problem with us but that shouldn’t be an issue if it is an EBA-site. We have an EBA. We don’t need to have it with the Union. But, if it is an issue, we can pay in accordance with union rates.

   Mr Blacker: How would that work?

   Mr Karam: We worked on an LNG project in Gladstone that was a union site and we paid workers under that agreement but we weren’t signed up ourselves. We just paid our workers the union rates.

   Mr Blacker: I’ll have to think about it.

   g)following the 3 April, 2014 meeting, correspondence continued to be exchanged between Mr Souva and Mr Chebib regarding revisions to the scope of works and price;

   h)on 18 or 19 May, 2014 Mr Karam received a telephone call from Mr Souva requesting that C&K revise its pricing based on the Forest Meiers union collective agreement.  On 19 May 2014, Mr Chebib received an e-mail attaching a copy of the Forest Meiers Agreement, and Mr Karam informed him of the request to revise C&K’s price based on that;

   i)on 26 May, 2014 Mr Chebib and Mr Karam attended a meeting with Mr Munro and Thomas Kim of Forest Meiers when the following exchange occurred:

   Mr Karam: We are willing to pay to your EBA rates to get on site and you can put a clause in the contract to that extent.

   Mr Munro: Everything is running smooth on site as everyone that is signed up has a CFMEU agreement. Will you sign up to an EBA with the CFMEU?

   Mr Karam: It will affect our current projects as we have not priced those projects according to CFMEU rates

   Mr Blacker: Are you willing to sign up under a new company? That’s what some companies have been doing.

   Mr Karam: I would rather not. I’d prefer to find some other option but I’ll think about it.

   Mr Blacker: Does the union have a problem with you?

   Mr Karam: No.

   Mr Munro: I’ll make some more enquiries and get back to you.

   j)on 4 June, 2014 Mr Blacker and Mr Munro attended an unscheduled meeting with several “CFMEU organisers”, one of whom was Andrew Sutherland.  Both Mr Blacker and Mr Munro gave evidence that, if Forest Meiers engaged C&K, it “could expect trouble” from the CFMEU;

   k)in the week of 9 June, 2014 Mr Karam discussed the idea that a new company would be incorporated for the purpose of entering into an enterprise agreement with the CFMEU and performing the tiling works.  Mr Jason Karam and his brother, Anthony Karam, agreed with the proposed course of action;

   l)on 17 June, 2014 CK Tiling (Qld) Pty Ltd was incorporated.   On that same day, Mr Blacker of Forest Meiers called Mr Chebib and provided him with the contact details for Mr Sutherland of the CFMEU.  Mr Karam directed Mr Chebib to arrange a meeting with the CFMEU for the purpose of discussing a union enterprise agreement;

   m)on 19 June, 2014 Anthony Karam, Mr Chebib and Mr Sutherland met at the CFMEU office to discuss CK Qld entering into a union collective agreement with the CFMEU.  Mr Sutherland said words to the effect of “It won’t take more than 2 weeks to be processed but that all agreements have to be approved by the State Secretary.  But, as soon as it is logged with the FWA then we can commence”;

   n)on 23 June, 2014 Mr Karam, Mr Chebib, Mr Munro, Mr Blacker and Mr Thomas Kim (of Forest Meiers) had another meeting.  At the commencement of the meeting, Mr Chebib said words to the effect of “We want you on this project”.   Words to the following effect were also exchanged:

   Mr Munro: Andrew Sutherland told me he doesn’t want to know about it. What other options do you have to get around this issue? There are no other avenues that we feel we can take.

   Mr Karam: We have opened up another company and are prepared to sign this company up to an enterprise agreement with the union in order to secure this project.

   Mr Munro: That’s great. If you open the new company and get the EBA and all the insurances in place and all goes well, we will give you the contract.

   Mr Karam: So we can move forward with the job, can you please issue a ‘Letter of Intention’ to proceed with CK Qld. Before I go any further and spend money with the union, I want to know that we have the job.

   o)after the meeting, some of those involved walked around the site and discussed further changes to the scope and the order of works.  Mr Blacker said words to the effect of “Can you confirm in writing that anything related to the tender will be valid under the new company”.  Mr Karam acknowledged that he would.    An e-mail containing words to that effect was sent from Mr Chebib to Mr Blacker on 23 June, 2014;

   p)on 24 June, 2014 Mr Blacker, Mr Kim, Mr Munro and Mr Sia signed a document entitled “Revised Commitment Authority for the tiling works”.  It recorded the outcome of the tender process, authorised Forest Meiers to pay the relevant subcontractor up to the limit set out in the commitment authority, and recorded essential facts leading to a recommendation as to which subcontractor to engage.  The signed document referred to “C&K Tiling”.  Mr Munro’s affidavit evidence was that this was a reference to CK Qld, but under cross-examination accepted that this was not possible because it referred to the history of C&K.   It recorded the following information about the four companies that had submitted a final tender (errors in original):

Tenderers	Final Tender	Comments
Tile-It	$2,771,075.83	The subcontractor has offered a conforming quotation based on the prescribed scope of works and documentation, however, the final offer is not good value for money and the tenderer has confirmed that it will not obtain a Union Collective Agreement
Tile Corp	$2,970,377.00	Tilecorp have a solid track record of projects completed similar to this one, however it seems that due to their current workload, this subcontractor has increased its price substantially.
C&K Tiling	$2,566,442.82	C&K Tiling have proven they can successfully complete jobs of similar nature and value and their price respresents best value for money, This subcontractor has consulted with the CFMEU and will negotiate an UNION COLLECTIVE EBA to enable it to carry out works on this project. THE CFMEU has confirmed to Forest Meiers that it is satisfied with C&K Tiling and that it will approve them for this project.
S&K Commercial	$2,854,489.95	This subcontractor has a UNION COLLECTIVE EBA however does not represent best value for money and is therefore not recommended.

q)the commitment authority was signed by Mr Sia (of Forest Meiers);

r)on 25 June, 2014 Mr Karam and Mr Blacker had a telephone conversation in which Mr Blacker said words to the effect of “We are going to give you the contract”;

s)on 26 June, 2014 Mr Blacker sent an e-mail to (inter alia) Mr Chebib and Mr Karam, which relevantly provided:

We confirm our intention to enter into subcontract agreement with CK Tiling QLD Pty Ltd (CK Tiling) for the tiling subcontract trade works for the above mentioned project on the conditions that CK Tiling achieve successful negotiations for industrial agreements with applicable parties and put in place insurances and QBCC licences for the company CK Tiling QLD Pty Ltd. The subcontract price shall be calculated by giving regard to latest communications from C&K Tiling.

t)on 26 June, 2014 Mr Chebib sent a document titled “expression of interest for a union collective agreement” and a credit card authorisation form for $1,650 to the CFMEU.  He did not receive a response;

u)between 2 and 9 July, 2014 several conversations and e-mails were exchanged regarding the ongoing attempt to obtain an enterprise agreement with the CFMEU.  Eventually, on 10 July, 2014 Mr Jade Ingham of the CFMEU informed Mr Munro that the CFMEU would not agree to an enterprise agreement.  Mr Munro’s evidence was that the concern was that C&K did not “train their workers correctly”, although this concern was never raised with C&K.   Mr Munro’s file note of the conversation records that the first reason given by Mr Ingham for refusing to allow an enterprise agreement was that “C&K would not sign an agreement a couple of years ago”;

v)on 15 July, 2014 Mr Karam attended the project site and met with Mr Munro and Mr Kim.  Words to the following effect were exchanged:

Mr Munro: I’m not having any success with the CFMEU. I’ve attempted to contact the union but now I’ve escalated it to the Secretary. “We are talking to both the secretary of the union and Sutherland. Both are saying that they will speak to the other but it does not appear to be happening. I have spoken to Master Builders, Fair Work and our legal people about where we stood. I will give it to the end of that day to get a response back from Sutherland and would make a final decision where we stand.  If Forest Meiers goes with you, I need to know that you will support us and not cause any problems with the union on site

Mr Karam: I’ve got confidence in my guys. They aren’t troublemakers

Mr Munro: If Sutherland doesn’t get back to me by the end of the day, I am prepared to go with you and take it on his back as long as you are prepared to go with me and tough it out to whatever comes from the union.

w)on 17 July, 2014 Mr Munro was informed that Mr Ingham’s decision regarding C&K was final.  Mr Munro was not able to give concrete reasons for the CFMEU’s decision, but stated that as far as he was aware it was because (inter alia) the CFMEU had previously attempted to sign an agreement with C&K, which was refused;

x)at 10:59am on 18 July, 2014 Mr Munro sent an e-mail to Mr Sia and others, which is set out below (errors in original).   Mr Blacker sent a “reply all” response to the e-mail shortly afterwards, pointing out that the figure of “$33k” should have been “$300k”.  Mr Munro’s e-mail reads:

Hi Peter

Would you be available for a meeting on site today with Thomas, Os and myself with regard to having C & K Tiling as our preferred tiling contractor which as of 5.30pm last night was rejected by the CFMEU contrary to earlier discussions that they would be signed up. There is a significant $33k cost difference to the next tenderer who have been endorsed by the CFMEU which is totally wrong with principals.

Alternatively we could continue forward and incur major issues with the CFMEU and ongoing uncomfortable relationship with the unions on George St.

Your input for a company decision will be appreciated.

y)at 1:05pm, Mr Sia responded as follows (errors in original):

Bill and all

My thinking:

1. We may not afford the resulting effect of a court exercise, winning or losing we will be the losing side in other projects we all know;

2. From A plus to C & K to the third potential candidate we are looking at roughly $800, 000 +/- cost escalation from the original awarded contract;

3. Looks like Forest Meiers has not been and will not be able to resolved the impasse with the Union.

We have 3 choices here unless situation dramatically changed:

1. Court application - we face with time, and cost and hearing date delay- worst, immediately seen by defending party we declare war – Not a preferred option. (look at Abigroup, Grocon);

2. Go with the third tenderer - Not ideal due to wasted costs unless you can talk the third party into agreeing to a more amenable price closer to C & K;

3. Immediately look for other contractors with EBA far and beyond Brisbane area. (Shadforth, our civil contractor for Indooroopilly is one example, further, hungrier while price remains competitive)

I would suggest activating option 3 unless you have other suggestions.

Subject to my meetings this arvo, I will come over.

z)on 18 July, 2014 a meeting was held with Mr Karam, Mr Chebib, Mr Souva, Mr Blacker, Mr Munro and Mr Kim.  In this meeting, Mr Munro stated words to the effect that the CFMEU had threatened action if C&K were engaged to perform the tiling works, and Mr Karam confirmed that this would not prevent C&K from performing the tiling works;

aa)at 1:21pm on 18 July, 2014 Mr Munro responded to Mr Sia’s e-mail of 1:05pm as follows (errors in original):

Further to our ongoing communication with regard to C & K Tiling we confirm that the next tenderer is S & K Tiling who have a union endorsed EBA and have on a number of occasions been referred to by the CFMEU but the difference is $300k. S & K Tiling have been in the tiling business for only a short period of approx. 7 months whereas C & K Tiling have an extended history of tiling.

Ultimately it will be if we can incur $300k of pain and although legal wise the CFMEU is wrong it will be the rank and file members who will call the shots and this will be twisted and turned around by the CFMEU to their members with withdrawal of labour and this will impact on the project with non-productivity as you realise.

If we were to have a stach with the unions then now is the time to do it with the way Fair Work Building and Construction is now targeting the unions but unfortunately we will incur pain and so will some of the subcontractors –

We need to make a decision today to allow the project to move forward as any delay will naturally affect the completion date. I also concur that on many occasions when industrial action is taken there is no winner and the financial loss is greater than the original intended loss but you should not be told what to eat.

We will come back to you with our thoughts and recommendation.

bb)at 3:00pm, Mr Munro sent a further e-mail.  It states:

…The consequences of an ongoing protracted scenario with the CFMEU is real with escalating cost both to this project as well as others but as we move forward there will be time that Forest Meiers Constructions/ Shayher Group will be in conflict with the CFMEU.

It concludes that Forest Meiers:

…should proceed with the tenderer that was next closest in price and was endorsed by the CFMEU.

cc)on 21 and 22 July, 2014 Mr Karam had discussions with Mr Munro by telephone in which Mr Munro was told that C&K had not been given the tiling works.  The exchange included the following:

i)on 21 July, 2014:

Mr Karam: If you aren’t going to go with me because of the union, advise me in writing. You may be in breach of the Fair Work Act by not going with me because of the union

Mr Munro: I have the right to award the project to whoever I chose (sic)

ii)on 22 July 2014:

Mr Karam:  Why did you give it to S&K? They have only been around a year and Hutchies won’t use them again.

I think you have breached the Fair Work Act by not awarding us the contract. It’s not my intention to pursue Forest Meiers but I want to target the union for its unethical actions. If Fair Work contacts you, I hope it won’t affect our relationship and you will consider us for projects in the future…

Assessment of penalty

1. The principal object of pecuniary penalties under s.546 of the Fair Work Act is deterrence: specific deterrence of the contravener and, by his or her example, general deterrence of other would-be contraveners: ABCC v CFMEU (2018) 262 CLR 157 at [116].

2. A pecuniary penalty for a contravention of the Fair Work Act must be fixed with a view to ensuring that the penalty is not to be regarded by the offender or others as an acceptable cost of doing business. It is important to send a message that contraventions of the Act are serious and not acceptable: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68 at [98]. Retribution, denunciation and rehabilitation have no part to play: Construction, Forestry, Mining and Energy Union v Australian Building and Construction Commissioner (Non-Indemnification Personal Payment Case) (2018) 280 IR 28 at [19].

3. Here there are two contraventions of the Fair Work Act to be considered – a contravention of ss.340 and 354 of the Act. In the circumstances of this case, s.557(1) of the Act is not engaged so as to oblige me to treat the two separate contraventions as one. However, I must take account of the relationship between the contraventions and the facts upon which they are based. Here they are closely connected, as the applicants says, both factually and motivationally. I must ensure that Forest Meiers (and Mr Munro) is not punished twice for the same conduct. Thus, whilst there are two separate contraventions to be considered, one way of avoiding the evil just mentioned is to impose a penalty for one of the contraventions and no, or a lesser penalty, for the other. All parties urge me to adopt that course and I intend to do so. It is appropriate in the circumstances of this case.

4. I have set the facts surrounding the contraventions out above. Forest Meiers and its project managers on the relevant project no doubt faced a difficult position arising from the conduct of the CFMEU. As the respondents submit, the relevant conduct took place in an environment consisting of threats of delay, disruption and coercive conduct by the CFMEU. Arguably, the conduct of the CFMEU also contravened the Fair Work Act.

5. But the purpose of the provisions that feature in this case (particularly s.354) are designed to ensure that parties such as Forest Meiers do not wittingly or unwittingly lend assistance to others intent on advancing their own agendas, such as the CFMEU. I accept that the conduct of Forest Meiers and Mr Munro served to facilitate the conduct of the CFMEU.

6. Mr Munro and the others from Forest Meiers mentioned above knew that the impugned conduct was unlawful and that the regulator – the applicant in this case – was active in taking action against unions engaged in illegal behaviour.  They say as much in their written submissions, pointing out that in March, 2014 the applicant had highlighted that coercion on building sites was an issue requiring the attention of its enforcement activities. 

7. The evidence shows that Forest Meiers had previously made use of the applicant’s services in responding to unlawful industrial behaviour. Mr Karam explicitly suggested to Mr Munro that his (and thereby Forest Meiers) conduct may contravene the Fair Work Act and yet did not deviate from their chosen course of action. Mr Munro refused to acknowledge that he was bound by any limitations of the Fair Work Act by responding to Mr Karam’s concerns by saying “I have the right to award the project to whoever I chose”.

8. I accept the applicant’s submission that Mr Munro and Forest Meiers deliberately chose to contravene the Fair Work Act. The evidence clearly establishes that faced with two commercially unpalatable alternatives, they chose the one which led Forest Meiers to knowingly contravene the Fair Work Act, rather than to take a stance against the CFMEU. That is consistent with Forest Meiers and Mr Munro’s submission that the motivation for not engaging C&K was to minimise the disruption and delays of industrial action. That exercise must have necessarily engaged the respondents in a consideration of the effect of the delays and disruptions upon the progress of the project.

9. Senior personnel of Forest Meiers were involved in the contraventions, namely:

   a)Mr Kim, Construction Director; and

   b)Mr Munro, Construction Manager.

10. The contraventions are, I accept, serious. The Fair Work Act contains significant protections designed to level the playing field between industrial participants, that provide for freedom of association and which recognise the choice that employers and employees have to engage with industrial unions. C&K had an agreement with its employees that did not cover the CFMEU. C&K was entitled to do that and it was entitled to do that without then having that held against it when competing for work. Here, the playing field was uneven – despite having the best price for the tiling works, a competitor was engaged whose price was some $300,000 more than that tendered by C&K. I accept the applicant’s submissions that such behaviour is not only to the detriment of victims such as C&K, but to the industry and the community at large. The monetary loss suffered by C&K – $200,000 – is a measure of the seriousness of the behaviour engaged in by Forest Meiers.

11. C&K has now been compensated for its loss.  The alacrity with which the compensation was paid demonstrates genuine contrition on the part of Forest Meiers in my assessment.  I accept that both Forest Meiers (through its directors) and Mr Munro are remorseful for the contraventions.  That is so even though there was no early acceptance of liability (or indeed any at all) by them.  Whilst that tends against the notion that they are genuinely remorseful, I am nonetheless satisfied that they are.  There is no suggestion that Forest Meiers or Mr Munro have been involved in any similar contraventions on previous occasions.  That tends to suggest that the contraventions were out-of-character, as it were. 

12. Whilst the respondents did not accept liability, early or at all, that matter does not serve to increase the penalty that might be imposed, only to remove the possibility of a discount being applied to take account of that cooperation. 

13. Forest Meiers is a significantly resourced entity.  There is no suggestion that any penalty within the ranges identified by the parties would be crushing, in the sense used in the authorities.

14. Specific deterrence is one of the objects to be promoted by the imposition of a pecuniary penalty.  That is perhaps more so in relation to Forest Meiers.  Mr Munro has now retired from active employment and it is unlikely, it seems, that he will be in the same or a similar position to that in which he found himself in March, 2014.

15. But specific deterrence has a bigger role to play for Forest Meiers given its continued operation in Australia.  However, I bear in mind what fell from the Federal Court in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Quest Apartments Case) (No 2) (2018) 358 ALR 725 at [47] – [48] that the need for deterrence against a contravenor may weigh less heavily where they have no prior history of contravening the Fair Work Act.

16. However, the factor of greatest significance in relation to penalty in the present case is the need to impose a penalty that will constitute a general deterrent to others who may be disposed to engage in proscribed conduct of a similar kind.  For a penalty to have the desired effect, it must be imposed at a meaningful level and therefore must be such that a potentially offending corporation will see the penalty as not worth the prospect of gain.

17. The general protections provision of the Fair Work Act are concerned with protecting workplace rights and freedom of association. The actions of the respondents are at odds with these objectives. A penalty must be imposed to reflect the importance of those rights and protections and the serious view taken as to their contravention. I accept the applicant’s submission that Forest Meiers’s conduct against C&K has the potential to perpetuate a culture of submission in the building and construction industry where economic duress is able to be applied to sub-contractors to force them to become covered by an enterprise agreement that also covers a union. I accept that there is a clear need for general deterrence against companies engaging in such conduct in the building and construction industry.

Penalties

1. The maximum penalties for the contraventions are:

   a)for Forest Meiers, $51,000 for each contravention (a total of $102,000);

   b)for Mr Munro, $10,200 for each contravention (a total of $20,400).

2. As I have mentioned already, the approach to be taken here will be to impose one penalty for the breach of s.340 of the Act and no penalty for the breach of s.354 of the Act.

3. The applicant submits that the following penalties should be imposed:

   a)in relation to Forest Meiers, a pecuniary penalty of between $25,000 to $35,000 for the contravention of s.340 and no penalty for the contravention of s.354; and

   b)in relation to Mr Munro, a pecuniary penalty of $3,000 to $4,000 for the contravention of s.340 and no penalty for the contravention of s.354.

4. The respondents submit that penalties in the low range are appropriate for the respondents for contravention of s.340 of the Act, namely:

   a)$10,200 - $25,500 for Forest Meiers; and

   b)$2,000 - $4,000 for Mr Munro.

5. The respondents contend that no separate penalty should be imposed for the contravention of s.354 of the Act.

6. I fix the penalties for the contravention of s.340 of the Act as follows:

   a)for Forest Meiers – $32,000; and

   b)for Mr Munro – $3,000.

7. In my view, those penalties are an appropriate response to the offending conduct in this case.  They reflect the objective seriousness of the contraventions.  They are fixed at such a level that they carry an appropriate deterrent effect generally, but also respond to the particular circumstances of the case at hand.  They take into account the different considerations that apply, as between the respondents, for specific deterrence.

8. There is no dispute that there should be an order that the penalties be paid to the Commonwealth within twenty eight (28) days of the Court’s order.

I certify that the preceding twenty-eight (28) paragraphs are a true copy of the reasons for judgment of Judge Jarrett

Associate: 

Date:  20 September 2019