Alfred v CFMEU and Ors (No.2) - [2009] FMCA 1003

FEDERAL MAGISTRATES COURT OF AUSTRALIA

ALFRED v CFMEU & ORS (No.2)

[2009] FMCA 1003

INDUSTRIAL LAW – Contravention of freedom of association protections – union organiser’s coercion of subcontractor and his workers to become members of union – union organisations liable for his conduct – penalties of $2,600 and $13,000 imposed on organiser and unions.

Building and Construction Industry Improvement Act 2005 (Cth)
Federal Magistrates Court Rules 2001 (Cth), r.26.01
Federal Magistrates Act 1999 (Cth), ss.42, 77, 77(2)
Workplace Relations Act 1996 (Cth), ss.778(a), 779, 779(2), 779(2)(b), 789, 807, 807(1), 807(1)(a), 807(2), 807(3), 841, Pt.16

Alfred v Construction, Forestry, Mining & Energy Union & Ors [2009] FMCA 613
Australian Ophthalmic Supplies Pty Ltd v McAlary‑Smith [2008] FCAFC 8
Cahill v Construction, Forestry, Mining & Energy Union (No 4) [2009] FCA 1040
Commonwealth Bank of Australia v Finance Sector Union of Australia (2007) 157 FCR 329
Construction, Forestry, Mining & Energy Union v Hadgkiss [2009] FCAFC 17
Draffin v Construction, Forestry, Mining & Energy Union [2009] FCAFC 120
Kelly v Fitzpatrick (2007) 166 IR 14
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550
Stuart v Construction, Forestry, Mining & Energy Union [2009] FCA 1119
TWU v DHL Exel Supply Chain (Australia) Pty Ltd (No.2) [2008] FMCA 920
Williams v Construction, Forestry, Mining & Energy Union (No 2) (2009) 182 IR 327

Applicant:

GREGORY CHARLES ALFRED

First Respondent:

CONSTRUCTION, FORESTRY, MINING & ENERGY UNION

Second Respondent:

CONSTRUCTION, FORESTRY, MINING & ENERGY UNION (NEW SOUTH WALES BRANCH)

Third Respondent:

SAMMY MANNA

File Number:

SYG 870 of 2008

Judgment of:

Smith FM

Hearing date:

11 September 2009

Delivered at:

Sydney

Delivered on:

20 October 2009

REPRESENTATION

Counsel for the Applicant:

Mr J J E Fernon SC and Ms E Raper

Solicitors for the Applicant:

Freehills

Counsel for the Respondents:

Mr J Pearce

Solicitors for the Respondents:

Taylor & Scott

ORDERS

There is imposed on the third respondent pursuant to s.807(1)(a) of the Workplace Relations Act 1996 (Cth) a penalty in the amount of $2,600 for his contravention of s.789 of that Act.
There is imposed on the first respondent pursuant to s.807(1)(a) and s.779(2)(b) of the Workplace Relations Act 1996 (Cth) a penalty in the amount of $13,000 for its contravention of s.789 of that Act by reason of the conduct of the third respondent.
There is imposed on the second respondent pursuant to s.807(1)(a) and s.779(2)(b) of the Workplace Relations Act 1996 (Cth) a penalty in the amount of $13,000 for its contravention of s.789 of that Act by reason of the conduct of the third respondent.
The application is otherwise dismissed.
The penalties payable under orders 1, 2, and 3 must be paid to the Commonwealth pursuant to s.841 of the Act.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 870 of 2008

GREGORY CHARLES ALFRED

Applicant

And

CONSTRUCTION, FORESTRY, MINING & ENERGY UNION

First Respondent

CONSTRUCTION, FORESTRY, MINING & ENERGY UNION (NEW SOUTH WALES BRANCH)

Second Respondent

SAMMY MANNA

Third Respondent

REASONS FOR JUDGMENT

I have published reasons for concluding that Mr Manna is liable to orders under s.807 of the Workplace Relations Act 1996 (Cth) (“the Act”) for a contravention of s.789 which occurred on 11 April 2006, and that each of the two union entities for which he was an official organiser are liable for the same contravention by reason of s.779(2)(b) (see Alfred v Construction, Forestry, Mining & Energy Union & Ors [2009] FMCA 613).
The contravention occurred in the course of a telephone conversation between Mr Manna and Mr Holm, a concreting subcontractor on a shopping centre project, in which Mr Manna threatened to organise or take action against Mr Holm with intent to coerce him and his workers to become members of the CFMEU. Specifically, he threatened Mr Holm that “if you proceed with the job and do not join the union, pay your men the benefits, we’ll send you bankrupt” and “have you audited” and “screw you and make your life a misery”. I found that these threats were intended to coerce, were capable of exerting overwhelming influence on Mr Holm and of negating choice in a practical sense, and were devoid of any legitimate justification.
Although the amended application sought orders under s.807(3) for the publication of remedial advertisements or other orders, these prayers were not pressed in submissions, possibly in the light of Construction, Forestry, Mining & Energy Union v Hadgkiss [2009] FCAFC 17. The applicant sought only the imposition of pecuniary penalties on each of the respondents under s.807(1)(a). Under s.807(2) the maximum penalty which can be imposed on Mr Manna is $6,600, and the maximum for each of the union organisations is $33,000.
It is unnecessary for me to repeat my reasons for finding that the respondents’ liability to penalties was established. Counsel did not seek to re‑open my factual findings in the course of the further hearing on issues of penalty, and I do not propose to revisit them. I invited additional submissions on Mr Manna’s state of mind at the time of his contravention, and I shall consider this further in the course of assessing the degree of his culpability. Additional evidence was also received from the respondents going to mitigation of penalty.
It is often convenient to address penalty by reference to a list of considerations, such as those identified by Mowbray FM in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 and summarised by Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14 at [14]. A list of considerations can guide the identification of the appropriate penalties, but is not a substitute for “the unrestrained statutory discretion” (cf. Gyles J in Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550 at [11]). Ultimately, I must arrive at an amount within the range of penalties provided in the legislation which is proportionate to the gravity of the offence committed (cf. Graham J in Australian Ophthalmic Supplies Pty Ltd v McAlary‑Smith [2008] FCAFC 8 at [54]).
I propose to discuss what I regard as significant considerations in the present case under brief headings which cover the matters identified in Commonwealth Bank of Australia v Finance Sector Union of Australia (2007) 157 FCR 329 at [181] and other judgments concerning contravention of freedom of association provisions of this Act and their predecessors (also see recently: Cahill v Construction, Forestry, Mining & Energy Union (No 4) [2009] FCA 1040 at [9]‑[10]). I was referred to numerous such cases in the submissions of the parties, and have taken their approaches to the assessment of penalty into account. However, I do not propose to give a comparative analysis of the present case with the circumstances of those other cases.

The circumstances and significance of the contravention

My earlier judgment explained why I accepted the evidence of Mr Holm as to the coercive conduct, and rejected the evidence of Mr Manna which denied that conduct. Applying relevant judicial gloss on the elements of s.789, I found:
87.However, once I accept Mr Holm’s evidence, I have little difficulty being satisfied as to all the elements of s.789, including those arising under judicial gloss on its language:
i)I am satisfied that Mr Manna’s words were made to Mr Holm as a “person” and, in my opinion, taking into account his apparent authority in his business they also were made to the three “persons” who were the partners in Anything Concrete. I find that they “threatened to organise or take” action against him and his partners in Anything Concrete as “persons”.
ii)Although Mr Manna said “we’ll” take the action, he was clearly including himself with other union officials and supporters as one of the organisers of the threatened interference with the business. Section 789 encompasses threats made by one person acting for himself or in an official capacity for several persons. The “action” which is threatened does not necessarily need to be actions of that person, nor of other persons for whom he or she acts, since the section encompasses actions of third persons “organised” by the maker of threats. In my opinion, Mr Manna’s statements threatened “action” falling within that section.
iii)In my opinion, Mr Manna used threatening language to procure either the union membership of the Anything Concrete workforce or to force it to abandon the project so as to allow a union approved contractor to be employed. The fact that the latter purpose may have appeared more dominant in Mr Manna’s words and actions is explained by Mr Holm’s likely and then apparent intransigence against joining the union. The evidence of a later purpose of removing Anything Concrete from the site, does not diminish the fact that Mr Manna had offered Mr Holm an alternative method of placating the union by his becoming a member and paying union benefits to his workers. I therefore consider that the proscribed intention, if mixed with other intentions which became dominant, was a “substantial or operative” intention at the time that the relevant words were spoken.
iv)The expressed language of the threats, as well as the implication from the surrounding circumstances, reveals that there was an intention to coerce Mr Holm personally to become a member of the two industrial associations of which Mr Manna was an officer and organiser. Although there was an obvious ambiguity in the language, I also consider that, in context, his demand that “you ... join the union” also was probably intended to encompass the other workers who would be engaged by Anything Concrete to perform work under its contract with Conform. In my opinion, Mr Manna intended to prevent concreting workers being employed on the project who did not receive the union supported benefits, and it seems likely that he also expected their employer to procure their joining the union as part of the benefits which he was promoting. I therefore find that there was an intent to coerce both “the person” and “third persons” (implying a plural) within the language of s.789.
v)In the light of the person who made the threats, and the context in which they were made, they were capable of exerting overwhelming influence on a contractor in the building industry such as Mr Holm, either to conform to union demands proscribed by s.789 or to abandon his contractual rights. This is notwithstanding that the threats used colloquial and imprecise language: “bankrupt”, “have audited”, and “screw you and make your life a misery”. In the context, the vagueness of their language is likely to have increased, not lessened, the apprehensions of Mr Holm and the coercive effects of the threats.
vi)The threats were capable of “negating choice” in a practical sense. This is apparent from the obvious vulnerability of a relatively small subcontractor in the building industry to a union‑organised attack on its financial stability. In relation to a project where the head contractor appeared to be amenable to union demands, the action threatened was serious action. More significantly, the negation of apparent choice is established by Mr Holm’s evidence of his and his partners’ readiness to accept that they must take the option urged by Mr Symond of abandoning their important contract in the face of the union hostility.
vii)I do not accept the respondents’ submission that a coercive quality to the threatened action is disproved by the subsequent facts that Anything Concrete’s workers did not join the union, that the contract was not terminated, and that Anything Concrete attempted to perform the contract and did so in part. Section 789 clearly is intended to encompass threats of coercion which, in fact, are unsuccessful in achieving either the outcome which was their purpose or the harm which was threatened. Its focus is upon the content and quality of threats viewed at the time they are made. In the present case, Mr Holm’s reactions on 11 April 2006 have greater significance, than his change of heart when Mr Younan refused to accept Anything Concrete’s offer of abandonment. Moreover, on the evidence before me, I am not satisfied that, in fact, Anything Concrete did not suffer serious financial loss in relation to its Conform contract for the Toongabbie project, as a result of the union hostility which was reflected in Mr Manna’s threats, and which I have found to have been due solely to the absence in its workforce of union members drawing union benefits.
viii)The potentially coercive effects of the threats were, in my opinion, known to and intended by their maker. This is apparent from the language used by Mr Manna and the context in which it was used. His coercive purposes cannot have been accidental, and I consider that Mr Manna must have been conscious of the coercive effect of his words at the time. I consider that his awareness of his contravening conduct is confirmed by the presentation of his contrived evidence about his conversation with Mr Holm. This shows that he probably was at the time, and remains, conscious that he was applying unlawful coercion to achieve union objectives to which he gave priority over the legitimacy of his methods.
ix)The illegitimacy of the pressure applied by Mr Manna is apparent. No legitimate justification for the union to interfere in the contractual relations of Conform and Anything Concrete has been established, or even pointed to, in the evidence and submissions of the respondents. Whatever the benefits of union membership and the receipt by building workers of union sponsored benefits might be, it was plainly contrary to the purposes and provisions of the Workplace Relations Act to coerce the exclusion of a subcontractor based upon the union membership status of his workforce. The protections of freedom of association given under Part 16 include both the rights of building workers to belong to a union, and their rights not to belong to a union (cf. s.778(a)), and Mr Manna’s coercive threats appear inconsistent with the protections of the latter rights which are provided under s.789.
As these findings indicate, the elements of any contravention are such that it is difficult to conceive of contravening coercive conduct which was involuntary, accidental, or innocent of serious fault. I find to the contrary in relation to Mr Manna. In particular, I maintain my finding that “the potentially coercive effects of the threats were … known to and intended by their maker”. I also found that he was “aware of his contravening conduct” in the sense that it was intentional, and found support for this in his presentation to the Court of contrived evidence of a conversation with Mr Holm which did not occur.
Clearly, in the course of the present proceedings, Mr Manna has become aware that his conduct was unlawful. However, I accept the submission of the applicant, that I should not find that Mr Manna was aware when making his coercive statements to Mr Holm that they were proscribed by the Workplace Relations Act in the circumstances in which they were made. This was not put to him in cross‑examination, and the applicant has accepted that it would not be appropriate for me to determine a penalty on the basis that the breach was ‘deliberate’ in the sense of revealing a conscious defiance of law. My findings extracted in [7](viii) above should, therefore, be read as subject to this qualification.
The circumstances of the threats did involve the making of complaints to the head contractor about Mr Holm’s business ‘Anything Concrete’ which I found to be “specious, cloaking the real objection of the two union officials to the employment of Anything Concrete on the project”. The circumstances also included Mr Manna seeking a private conversation with Mr Holm, in which he made the threats which revealed the true motivation of his hostility. This conduct suggests a consciousness by Mr Manna at the time that his threatening conduct was, or at least might be, improper and illegitimate, in the sense of lacking any moral or legal justification. It also suggests that the threats were premeditated, and were made in the pursuit of union objectives regardless of the legitimacy of the means adopted. His conduct showed a clear lack of awareness amounting to disregard of the values of freedom of association which are protected by the legislation. It was conduct by a very experienced union official, at a time when he should have been informed of and fully aware of the unlawful nature of his conduct. In my opinion, it is appropriately characterised as reprehensible on his part. Although not falling within the most serious range of conceivable contraventions, a substantial penalty may therefore be called for.
The seriousness of Mr Manna’s conduct is illustrated by its potential effects, and by the community expectation which is reflected in the legislation which it contravened. Section 789, as with other protections in the Act against coercive conduct, is particularly intended to protect the freedoms of the vulnerable against oppression by the powerful. In the present case, union power and influence was invoked by Mr Manna seriously to interfere in the contractual arrangements of a small contractor legitimately employed in an important building project. It had the immediate effect of inducing Mr Holm and his partners to decide to abandon a very valuable contract. It was only the later intervention of Mr Younan which persuaded them to attempt to defy the union. Although the evidence does not allow me to find confidently that Mr Manna’s conduct actually resulted in serious financial loss to Mr Holm and his partners, or to other participants in the project, it had the obvious potential to have that effect at the time when the threats were made, and I am not satisfied that it did not have that consequence.
Many judgments have emphasised the central importance of the freedom of association provisions of the legislation. They represent Parliament’s assessment of a balance between encouraging the involvement of union and industry associations in workplace relations, and the need to protect individual freedoms against oppression from collective or financial power. They require all participants in industrial relations to pay close attention to the lawfulness of the means they adopt for the pursuit of their personal interests. The balance is seriously jeopardised unless all persons involved in Australian industrial relationships accept their responsibility to be aware of, and observe, the legislative restraints upon their pursuit of their personal interests.
It is the role of Australian courts to impose penalties for contraventions of the freedom of association protections which emphasise in a substantial manner, the consequences for pursuing legitimate objectives with reprehensible disregard for the legitimacy of the means adopted. The Court’s responses are even‑handed in this respect, applying to employers who impermissibly elevate their business objectives, as much as to union officials who pursue the objectives of unionism with disregard for the legitimacy of their methods (compare my assessment of an employer’s conduct in TWU v DHL Exel Supply Chain (Australia) Pty Ltd (No.2) [2008] FMCA 920 at [13]‑[21]).
All these considerations point towards the imposition of a real and substantial penalty on Mr Manna, at least in the absence of the Court being satisfied that he and his union are in no need of a reminder of his responsibility to know and observe the relevant industrial laws. As I shall discuss further, I am far from being so satisfied, and the need for particular as well as general deterrence remains a substantial consideration in this case in relation to the assessment of penalties.

It will be apparent from the above that I do not accept the written and oral submissions of counsel for Mr Manna that his actions were “neither serious nor audacious” and that its consequences “were not serious”.
Turning to the position of the two union organisations, my attention was drawn in submissions to the fact that they become liable by force of law under s.779(2) for the contravention constituted by Mr Manna’s conduct. Their submissions emphasised that this was a ‘deemed liability’, without findings being made as to the involvement of other union officials and of the union in its corporate capacities. It was submitted that this meant that I had made no findings showing serious culpability on the union’s part, so that a substantial penalty should not be imposed on the two relevant union organisations.
In my opinion, this submission misconceives the significance of the liability imposed under s.779(2). By imposing on the union a liability for the contravening actions of a union official acting in that capacity, Parliament has indicated that it may be held similarly responsible for the contravention without finding any other involvement in the contravention. The Act does not exclude consideration of the surrounding circumstances of the union’s involvement in the contravention when assessing penalty, but absent considerations of aggravation or mitigation on the part of a union organisation itself, it may be appropriate to assess the culpability of the union as being comparable to the individual culpability of the official whose actions constituted the contravention.
I consider it appropriate to approach the present case on this basis, notwithstanding that there is little evidence suggesting that Mr Manna’s coercive conduct directed at Mr Holm was part of a particular or general plan of the union or its other officials to dictate the choice of subcontractors on this or other projects based upon their union membership. Although there was an unexplained absence of evidence from an important union witness at the significant site meeting, I would draw no particular inference from this when assessing penalty. However, the conduct which is the subject of the proceedings involved a union organiser of great experience in the building industry and of high repute in his union, acting directly in the performance of his duties as an organiser of an important branch of the union. There is almost completely absent from the evidence anything suggesting that his conduct in relation to Anything Concrete was then, or is now, regarded as aberrant or intolerable by his colleagues and by the union organisations. Moreover, as I shall explain, I am satisfied that there is a need in the present case to give some weight to the union’s poor record of observance of industrial legislation in similar situations, and a continuing need for deterrence when assessing the appropriate penalty to impose on the union organisations in the present circumstances. All these, and other considerations which I shall touch upon below, tend in my mind to support the determination of a penalty for each of the union organisations which is roughly proportionate to that determined for Mr Manna individually.

The character and antecedents of the respondents

Mr Manna presented himself to the Court as a witness with 45 years of membership of the union and 29 years as an organiser. At the penalty hearing, he submitted ten character references. These included references from directors of construction companies, from CFMEU delegates, from a Cbus co‑ordinator, and from Mr Laurie Ferguson MP. The referees claimed to have many years of knowledge of Mr Manna’s union activities in the industry. They provide assessments which include:
·… I know him to be a strong advocate for workers rights, particularly in relation to the non‑payment and underpayment of employee entitlements such as superannuation. He has always conducted himself professionally and in the best interests of the members he represents.
·I consider Mr Manna to be thoroughly professional with his dealings with our company. I find it out of character for Mr Manna to have made the alleged statements, as our dealings have always been civil and have never had any confrontations.
·I consider Mr Manna to be a conscientious, responsible, honest, reliable and trustworthy man of high integrity.
·Mr Manna is particularly active in ensuring that occupational health and safety issues on site are addressed and he has also assisted many times in ensuring that workers received their lawful entitlements. I have always observed Mr Manna to advocate strongly for improvements on behalf of workers. He is well liked and held in high regard by those construction workers he helps. In my dealings with Mr Manna he has always acted in a genuinely committed way in addressing the issues of concern. He also always displayed skill and professionalism in resolving matters on behalf of CFMEU members.
·I consider that Mr Manna is held in high regard not only by the workers that I represent but also the company for which I work. Over the years Mr Manna has also become a valued friend. Mr Manna has always taken up issues on our behalf in a strong, but professional way. I believe that he is someone that is committed to ensuring that workers are properly represented in respect of employment issues and having their problems addressed. In all of my dealings with Mr Manna I have regarded him as someone with great commitment and passion for what he does. I also believe that Mr Manna carries out his duties with integrity.
·I have always found Salvatore acted in a professional and conciliatory manner, trying to assist with the resolution of any problematic issues. As far as I am aware his conduct when dealing with any members of the CFMEU on site, whether our workers or subcontractors working for De Martin & Gasparini was always carried out in a satisfactory manner.
·Mr Manna at all times throughout the years of our association has demonstrated a commitment to the principles of trade unionism and democracy, for which he is employed. Mr Manna has always put the needs of his members (our employees) furthermost in our discussions. He has demonstrated a thorough knowledge of OH&S laws and is concerned for the well being of our workers. He is at times forthright in his dealings with our company but this is balanced with his willingness to obtain a resolution to which all parties are concur.
·Throughout our working relationship Salvatore Manna has played an integral role in promoting safe work practice and a safe working environment for the benefit of not only the operations of my organisation but for the benefit of my employees and the wider community.
·I have known Sammy, as he is called, for more than twenty years. In fact, his employment with the CFMEU has spanned 29 years or so. Sammy is a dedicated employee who worked his way up from humble beginnings in Australia to the position he now holds as an official of the Union. He is held in high esteem by members of the building industry, where he has been a strong voice in the name of safety, conditions and entitlements. Sammy is known as a loyal and devoted employee whose first thoughts have always been for the welfare of the workers in his Union. He was a good friend of my father, the late Jack Ferguson, who admired him for his straightforward attitude and devotion to the CFMEU where the lines would often blur between Sammy’s own personal time and his work in the name of duty and responsibility.
·On numerous projects, I have worked closely with Sammy on day to day safety and industrial issues and found him to be fair and reasonable when addressing these issues. We both continuously strive to enhance the relationship between employers, employees and the unions, as Sammy on numerous occasions helped in negotiations with other union officials to maintain a level of industrial harmony on that site.
I accept all of the statements in these references, and have given the referees’ high opinions of Mr Manna considerable weight. I accept that Mr Manna has, over very many years, established himself highly in the regard of many participants in the construction industry, and has generally performed his work as a union organiser in an admirable fashion. It is common ground that he has no record of any previous contravention of the present nature, and I accept that I should assess penalty on the basis of a previously unblemished reputation and character. This consideration has caused me to discount in a real fashion the penalty which the seriousness of the contravention might otherwise warrant, even for a first offender.
However, there are limitations on the extent to which Mr Manna’s personal references and good record allow me to discount the penalty. Significantly, these arise from Mr Manna’s personal response to the allegations and to this proceeding, and I shall discuss this aspect below. The references themselves leave me lacking in reassurance that the present contravention was a complete aberration in his career as a union official, and that Mr Manna is a person who the Court can have confidence does not need a penalty containing an element of personal deterrence in relation to his future conduct. They do not reassure me that Mr Manna does not need a firm warning that an important provision in Australian law does not permit the pursuit of his industrial objectives with disregard to an important freedom which it guarantees. They also do not reassure me that there is no need for a penalty to include a component for general deterrence of other union officials in the CFMEU or other unions from engaging in similar conduct in the future.
My reservations are supported by a concern whether the referees were able sufficiently to reflect upon my findings of contravention by Mr Manna. One of them stated an explicit response. This contractor said: “Salvatore Manna is well respected amongst all levels of my organisation. I still hold the same opinion of Mr Salvatore, as that prior to becoming aware of the allegations”. However, this referee, as with most of the others including Mr Ferguson, stated only that he had read “the allegations of coercion and findings of workplace regulations as set out in Reasons for Judgment, Points 1‑6”. I was informed that this was the first six paragraphs of my earlier judgment. If, as I would infer, this was the only part of my judgment which these people were shown, then they would have been left with an inadequate knowledge of the circumstances of the contravention and of the Court’s findings about Mr Manna’s evidence.
Much more time was spent in the submissions of counsel addressing the antecedents of the two union respondents, than those of Mr Manna. Indeed, it became apparent that the current litigation battleground between the construction industry regulator and the CFMEU has become preoccupied with the extent to which the courts should take into consideration previous contraventions of industrial law found against CFMEU union organisations and their officials. Numerous citations of previous judgments were made, and counsel made submissions exploring the nuances of different judgments in the Federal Court in recent years. I was invited to prefer some dicta over other dicta which was submitted to be ‘clearly wrong’. These submissions overlooked the inferior position of this Court, and its statutory obligation to exercise its jurisdictions “to ensure that the proceedings are not protracted” (see s.42 of the Federal Magistrates Act). The former consideration requires the Court to follow the most recent authorities of the superior court, and the latter consideration suggests that the parties should focus their submissions in a manner suitable to the forum and with a keen appreciation of the real issues in the particular case.
In the present case, the elaborate submissions from both sides of the bar table relating to the record of the CFMEU added little to the assessment of penalty which did not emerge clearly enough from the circumstances of the particular contravention and the responses of the respondents to the allegation and to my published findings. In particular, showing the clear need for a substantial component in the penalties reflecting a need for special and general deterrence. I shall explain this consideration below. Otherwise, the record of the CFMEU to which I was taken impacted on my assessment of penalty mainly by negating a proposition which, in any event, was not put by the CFMEU: that it is a union with a good record of observance of industrial legislation applying to the building and construction industry.
However, acknowledging the instructions to counsel which have led to the making of these submissions, I shall briefly explain my general approach to the judgments which were cited to me.
In relation to general principles, recent Federal Court judgments do not exclude the Court from consideration of other contraventions of industrial law previously found against the union organisations and their constituent bodies, even where they concerned different provisions of legislation, different officials, different branches of the CFMEU, and contraventions and judgments occurring before and after the relevant contravention. The reasons for this were examined extensively by Jessup J in Williams v Construction, Forestry, Mining & Energy Union (No 2) (2009) 182 IR 327, and his Honour explained the varying degrees of relevance and weight which might be given when assessing a previous record of contraventions. As his Honour said at [16]: “what is important, in my view, is the quality of the conduct in each case, and the relevance of the conduct to the norms of industrial behaviour which the instant legislation seeks to establish or support”.
I do not accept the submission that I am free not to follow Williams. I note that it has been recently cited by Kenny J in Cahill v Construction, Forestry, Mining & Energy Union (No 4) [2009] FCA 1040 at [39] in the course of another extensive discussion of these issues, and was very recently followed by Gray J in Stuart v Construction, Forestry, Mining & Energy Union [2009] FCA 1119 at [23].
In Draffin v Construction, Forestry, Mining & Energy Union [2009] FCAFC 120, a Full Court recently held that the assessment of penalty must take into account any history of previous contraventions by the union of similar legislative provisions, and should consider whether, as in that case, they disclosed “a propensity, on the part of the Union, to engage in proscribed conduct” (see at [58] and [92]).
In the present proceedings, the applicant presented a schedule citing 56 ‘cases’ of contraventions, many with multiple published judgments, which have found contraventions of various statutory provisions concerning prohibited industrial action, protections of freedom of association, proscribed coercive conduct, and breaches of rights of entry and strike pay provisions. In oral submissions, counsel for the applicant indicated that he did not rely upon 14 of these, because they did not concern the CFMEU. I was then generally invited to consider all the remainder, with broad submissions that some of them involved coercive conduct by CFMEU union officials with some similarities to the present. I was not taken to any particular case as being of particular pertinence to the present matter, and it was conceded that there was no previous finding of liability of the CFMEU in relation to s.789 of the Workplace Relations Act.
I have read the applicant’s schedule, and some of the cases cited which appeared to me to be of possible guidance. This exercise tended again to show the wisdom of numerous warnings from appeal courts that sentencing should concentrate on the circumstances relating to the findings of contravention, and that reference to the determination of penalty in other cases is usually unnecessary and potentially distracting. I accept that I am able to take into account as a separate consideration the CFMEU’s record as shown in this schedule, and to give its contents such weight as is indicated in the above authorities. However, ultimately my consideration of this material did not identify anything arising from it requiring particular emphasis in my assessment of penalty in the present case. I therefore do not consider it necessary for me to give a detailed comparative analysis of the contraventions shown in the judgments which were cited to me by comparison to the present case.
In the present case, when considering the CFMEU’s record, I have respectfully found myself in general agreement with the approach taken by Gray J to a similar schedule in Stuart (supra) at [23], albeit in relation to a different type of contravention. He said:
For present purposes, it is sufficient for me to say that I deal with the first respondent on the basis that it has a record of prior contraventions of the BCII Act and similar provisions, in circumstances having some similarities to those of the present case. It is not surprising that an organisation in the position of the first respondent will have some difficulty adjusting to legislation that applies sanctions in an attempt to bring about a change to an entrenched culture. It remains to be seen whether repeated imposition of penalties, and lapse of time, will bring about greater compliance. The first respondent cannot be treated as having first offender status for the purposes of this case.

The responses of the respondents to the allegation

It is relevant to penalty to consider the manner in which Mr Manna and the union organisations responded to the allegation of a contravention and to my published findings that it occurred. It is possible for the Court to discount the culpability arising from the circumstances of the contravention, if the respondents’ subsequent conduct exhibited contrition, or cooperation with regulatory authorities, or showed that the respondents have taken corrective action, or propose to respond constructively to the Court’s findings. Such conduct might also show that there is no need for the Court to be concerned about future deterrence. Even if these elements are lacking, the Court hopes to receive some acknowledgement by a respondent at a sentencing hearing that the adverse findings on contravention will be taken seriously, and to hear that future conduct will be reviewed and amended. However, the present respondents have shown none of these things.
As my earlier judgment found, Mr Manna’s response to the allegation was one of denial, supported by a contrived version of a conversation showing innocence. His submissions in response to my findings were lacking in any acceptance of my findings, or remorse or contrition in relation to the past conduct which I have found. They contained no assurances of any modification of conduct in the future. It is possible that this posture was the result of a desire to challenge my findings on appeal, or to conform to a union culture of hostility to the prosecuting authority. However, the result is that I am both unable to discount an appropriate penalty based upon the above considerations, and also am required to ensure that the penalty imposed on Mr Manna includes a personal deterrent against the possibility of future repetition of similar coercive conduct for an unlawful reason.
Council for the respondents submitted against giving consideration to the need for specific deterrence against Mr Manna, because he “has not previously been found to have engaged in conduct in contravention of the Act”. However, in the circumstances explained above, I am not satisfied that Mr Manna’s previous record alone is enough for me to exclude specific deterrence as an important consideration. Particularly, in the absence of any acknowledgement of fault or evidence of contrition.

Counsel’s submissions in relation to the union respondents referred to evidence appearing aimed at persuading me that the union had in the past, both before and after the contravention, taken sufficient action to prevent conduct such as Mr Manna’s. It was submitted that “the First and Second Respondents’ controlling bodies have generally taken action of an educational and managerial nature to assist organizers and delegates to comply with the Act and to prevent organizers and delegates from engaging in conduct in contravention of the Freedom of Association provisions of the Act”. In support, I was referred to an affidavit by a CFMEU legal officer, attaching documents showing periodic educational and training sessions over many years given to different groups of union members and officers, attempting to educate them in relation to changing industrial legislation.
In relation to Mr Manna, this consisted of training sessions for union organisers he attended on 16 December 2005, 24 November 2008 and 5 August 2009. The ‘powerpoint presentations’ of these sessions are in evidence. They are far from satisfying me that a real or sufficient effort was ever taken to bring home to Mr Manna and other union organisers the unlawful nature of attempts to coerce non‑unionised contractors and their workers to join the union. The first session was directed at addressing the complex Work Choices changes to legislation and the Building and Construction Industry Improvement Act 2005 (Cth) (“the BCII Act”). Of 86 powerpoint pages from this session, only two made general reference to the various prohibitions on coercive conduct. The second session was attended by Mr Manna after the present contravention, and gave training on ‘rights of entry’ for union organisers, without any reference to the presently relevant restraint. The recent training session was attended by him after the publication of my first judgment, and covered “bargaining, right of entry and general protections under the Fair Work Act 2009”. It does not seem to have touched upon the present topic. This evidence is far from suggesting that a real attempt to educate Mr Manna in his responsibility to avoid attempted coercion of union membership occurred either before or after the present contravention.
The affidavit also refers to national rule changes in 2006, adding rules which might appear designed to absolve the union from unlawful conduct by its members, delegates, and officers, rather than to encourage a culture of observance of law by these persons. Thus a new subrule 22(9) provides that “no officers, employees, delegates or members shall be required to do, or required to omit to do, any action in breach of legislation applicable to the CFMEU”. I was not shown any union rule or term of employment of organisers, or practice or procedure, under which the union imposes sanctions on organisers in the event of their contravening an important provision in industrial legislation such as the present. There is no evidence that any sanction or response of any type has been contemplated or will be contemplated by his employing union organisations in relation to Mr Manna’s employment, or in relation to any officer found to have contravened the legislation in the manner which I have found in this case. Rather, the impression I am left with on all the evidence and submissions, is that the union organisations which are the first and second respondents endorse and support the response taken by Mr Manna to the present allegation and to my findings of contravention by his conduct.
I accept that the CFMEU does engage in some appropriate training programs, and has a difficult task to educate its members and officers, particularly those engaged ‘at the coal face’, with the legal restraints on their conduct on behalf of the union. However, none of the material presented by the union respondents, including the evidence of training given to delegates and officers other than Mr Manna, causes me to think that a penalty imposed upon them should be substantially discounted by reason of their responses to the contravention which has been established in this case.

The need for general and specific deterrence

The general importance of these considerations has been explained in many judgments. I have pointed to many reasons above for giving specific deterrence substantial weight in relation to Mr Manna and the union organisations in the present case. None of the respondents have satisfied me that they will take appropriate corrective action in relation to the future actions of Mr Manna or other CFMEU organisers to ensure that similar coercion of a vulnerable subcontractor will not occur again.
I am also satisfied that the importance of the particular rights of freedom of association protected by s.789 and the circumstances of the present contravention make it appropriate to give weight to the need to set penalties at a level providing general deterrence. As was pointed out in the submissions of the applicant, coercion of the present type has an insidious quality, since it occurs in private conversation in circumstances of oppression of the weak by the powerful. It is the function of a sentencing court to send a strong message to the community at large, that legal prohibitions against such conduct must be understood and respected.

Mitigating factors

As explained above, the two main mitigating factors which I can find in the situation of Mr Manna are that this is his first offence of this nature in the course of a long and respected career, and that he is not found to have deliberately flouted the law. Otherwise, I am not satisfied that the circumstances of his conduct reveal any substantial ameliorating consideration able to reduce an appropriate penalty.
As I have found, the union respondents should not be treated as first offenders with an unblemished record. However, I have given substantial discounting weight to the absence of evidence that Mr Manna’s conduct was part of a plan, scheme or practice encouraged by the union organisations. I have also taken into account the evidence of the general educational activities of the union, and accept that the persons involved in performing these activities are genuinely attempting to respond to the requirements of relevant industrial laws. However, as with other contraventions by the CFMEU which have recently come before the courts, the present case again reveals ‘cultural’ attitudes of disregard for legal restraints on the part of CFMEU union officials which the union has, on the evidence before me, not yet adequately addressed.

The appropriate penalties

Taking into account all the above considerations, and having regard to all the submissions which have been made to me, I have decided that an appropriate penalty to be imposed on Mr Manna is $2,600, and $13,000 on each of the union organisations.
Since this is a case of a single contravention, the appropriateness of these penalties does not need to be reviewed under ‘same course of conduct’ principles nor the ‘totality’ principle.
No submissions were made, and there is no evidence before me, suggesting that these penalties would operate in an unduly oppressive financial manner on any of the respondents.
It is appropriate that the penalties should be paid to the Commonwealth.
I shall make no express order for the payment of interest, since no application for such an award has been made. Interest might, however, accrue by force of law (see s.77(2) of the Federal Magistrates Act 1999 (Cth), and r.26.01 of the Federal Magistrates Court Rules 2001 (Cth)).
Although the application sought declarations as to the contraventions alleged, the applicant did not press for these to be made. There are some differences of opinion in the Federal Court as to the necessity or appropriateness of making declarations of breach of civil penalty provisions, where findings of contravention are clearly apparent from a published judgment delivered after a contested hearing. In the present case, I do not consider that it is necessary to add declarations to my orders imposing penalties under s.807(1)(a), since the contravention is readily identified from my reasons for judgment.

I certify that the preceding forty-eight (48) paragraphs are a true copy of the reasons for judgment of Smith FM

Associate: Lilian Khaw

Date: 20 October 2009