Alfred v Construction, Forestry, Mining and Energy Union

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FEDERAL COURT OF AUSTRALIA

Alfred v Construction, Forestry, Mining and Energy Union [2011] FCA 556

Citation: Alfred v Construction, Forestry, Mining and Energy Union [2011] FCA 556
Parties: GREGORY ALFRED v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
File number: VID 390 of 2010
Judge: TRACEY J
Date of judgment: 2 June 2011
Catchwords: INDUSTRIAL LAW – unlawful industrial action – contravening conduct found to have occurred - penalty to be imposed – considerations to be taken into account
Legislation: Building and Construction Industry Improvement Act 2005 (Cth) ss 3, 37, 38, 44, 49, 69
Crimes Act 1914 (Cth) s 4AA
Cases cited: Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd (No 2) [2007] FCA 1 cited
Australian Opthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 cited
Cahill v Construction, Forestry, Mining and Energy Union (No 4) (2009 189 IR 304 cited
Construction, Forestry, Mining and Energy Union v Cahill (2010) 194 IR 461 referred to
Construction, Forestry, Mining and Energy Union v Williams (2009) 262 ALR 417 cited
Finance Sector Union of Australia v Commonwealth Bank of Australia (2005) 147 IR 462 cited
Kelly v Fitzpatrick (2007) 166 IR 14 applied
Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union (2006) 164 IR 375 cited
Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 referred to
Pearce v R (1938) 9 A Crim R 146 considered
Ponzio v B & P Constructions Pty Ltd (2007) 158 FCR 543 referred to
Stuart v Construction, Forestry, Mining and Energy Union (2010 185 FCR 308 cited
White v Construction, Forestry, Mining and Energy Union (2010 198 IR 470 compared
White v Construction, Forestry, Mining and Energy Union [2011] FCA 192 cited, applied
Williams v Construction, Forestry, Mining and Energy Union (No 2) [2009] FCA 548 cited
Date of hearing: 19 April 2011
Place: Melbourne
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 93
Counsel for the Applicant: Mr R Dalton
Solicitor for the Applicant: Blake Dawson
Counsel for the Respondent: Mr H Borenstein SC and Mr C Dowling
Solicitor for the Respondent: Slater and Gordon

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 390 of 2010
BETWEEN:

GREGORY ALFRED
Applicant
AND:

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
Respondent

JUDGE:

TRACEY J

DATE OF ORDER:

2 JUNE 2011

WHERE MADE:

MELBOURNE

THE COURT DECLARES THAT:

1.Between 19 May and 28 May 2010 the Respondent contravened s 38 of the Building and Construction Industry Improvement Act 2005 (Cth) by engaging in unlawful industrial action (being the establishment and maintenance of a total ban on the performance of work at the Melbourne Markets Relocation Project Site) (“the site”) by enforcing a blockade of the main entrance to the site over that period.

2.Between 19 May and 28 May 2010 the Respondent contravened s 44 of the Building and Construction Industry Improvement Act 2005 (Cth) by organising and taking action (being the establishment and maintenance of a…

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Details
Case
[2011] FCA 556
Decision Date

CaseChat Overview and Summary

The case of Alfred v Construction, Forestry, Mining and Energy Union involved an application by an ABC Inspector for the imposition of penalties under the Building and Construction Industry Improvement Act 2005 (Cth) against the Construction, Forestry, Mining and Energy Union (CFMEU). The dispute arose from the CFMEU's unlawful industrial action on a public project being developed at Epping, financed by the Victorian Government. The project, estimated to cost approximately $291 million, was managed by Bovis Lend Lease Pty Ltd as the principal contractor, with Fulton Hogan Pty Ltd engaged as a subcontractor. The CFMEU had a reasonable expectation that the 2005 enterprise agreement with Fulton Hogan's predecessor, the FRH Group Pty Ltd, would apply to the Epping market project. However, Fulton Hogan had negotiated and entered into a new agreement with the Australian Workers’ Union (AWU) without notice to the CFMEU, leading to the CFMEU's industrial action against Fulton Hogan on the Epping site.

The central legal issues in this case were whether the CFMEU's actions constituted unlawful industrial action under the Building and Construction Industry Improvement Act 2005 (Cth) and, if so, what penalty should be imposed. The court had to consider the nature of the contraventions, the necessity for the penalty to act as both a general deterrent and a specific deterrent to the CFMEU, and other mitigating factors. The court acknowledged the CFMEU's history of similar contraventions and the lack of contrition or remorse shown by the union, while also taking into account the substantial overlap in the provisions of the relevant sections of the Act and other mitigating circumstances.

The court concluded that the proposed penalty of $100,000 for both contraventions, while not ideal, was within the permissible range when considering the overlapping provisions of the Act and the mitigating factors. The court found the penalty to be sufficient both as a general deterrent to unlawful industrial action and as a specific deterrent to the CFMEU, given its history of similar misconduct. The court ordered a penalty of $100,000 to be imposed on the CFMEU, to be paid into the Consolidated Revenue Fund within 30 days, and also granted additional relief sought by the Applicant, including the payment of the Applicant’s costs of the proceeding.

Orders

Orders of the court

3. A penalty of $100,000 be imposed on the Respondent in respect of its contraventions of ss 38 and 44 of the Building and Construction Industry Improvement Act 2005 (Cth).

4. The penalty imposed upon the Respondent in paragraph 3 be paid into the Consolidated Revenue Fund within 30 days.

5. The Respondent pay the Applicant’s costs of the proceeding, fixed at $40,000, within 30 days.

Note:

Background

Background to the litigation

An ABC Inspector, such as the Applicant, has standing to apply for the imposition of penalties under s 49: see s 49(6)(b).BACKGROUND TO THE CONTRAVENTIONS The development of the market at Epping is a public project which is being financed by the Victorian Government. Its estimated cost is approximately $291 million. The new market is scheduled to open in 2012. The Victorian Government appointed Bovis Lend Lease Pty Ltd (“Bovis”) as the principal contractor for the project. In December 2009 Bovis engaged Fulton Hogan Pty Ltd (“Fulton Hogan”) as a sub‑contractor to carry out the civil construction works on the Epping site. These works included site establishment, bulk earthworks, the laying of bitumen surfaces, roads and pavements, storm water drainage and service trenching. Fulton Hogan had had a history of industrial negotiations with the CFMEU. In 2005, Fulton Hogan’s predecessor, the FRH Group Pty Ltd, had entered into an enterprise agreement with the CFMEU (“the 2005 agreement”). That agreement had regulated the terms and conditions of employment of Fulton Hogan employees on various projects between 2006 and 2009 on which Fulton Hogan was engaged to perform site clearing works of the kind which were to be performed on the market site. But for a development to which I will shortly refer this agreement would have applied to Fulton Hogan’s employees on the market site. It was an agreed fact that the CFMEU had a reasonable expectation, based on its previous dealings with Fulton Hogan, that its agreement with Fulton Hogan’s predecessor would have been applied on the project. In or about September 2009 and, apparently, in anticipation of obtaining work on the market site, and, without notice to the CFMEU, Fulton Hogan had contacted the AWU and commenced negotiations for a greenfields agreement with it which was to apply at the market site. That agreement was entered into on 8 December 2009. It was entitled “The Fulton Hogan and Australian Workers’ Union Melbourne Market Relocation Project Agreement 2009/2012” (“the greenfields agreement”). On 22 January 2010 it was approved by Fair Work Australia. It was to apply at the market site on and from 29 January 2010. Fulton Hogan commenced operations on the site in December 2009. It had five direct employees working as labourers on the site at varying times. In addition it engaged the services of a number of sub-contractors for haulage, earthmoving and trench digging work. These sub-contractors provided plants with drivers/operators. They included Egans Group Pty Ltd, Emerald Earthmoving Pty Ltd, Timco Earthworks Pty Ltd, W & K Fitchett Pty Ltd, H2O Hydration & Rayne Man and Trenching Systems Australia Pty Ltd. Fulton Hogan’s employees performed work on the market site in accordance with the terms and conditions prescribed by the greenfields agreement and the Building and Construction On-site Award 2010 (“the Award”). The employees of Fulton Hogan’s sub‑contractors performed their work pursuant to the terms of the Award and relevant enterprise agreements.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

There is also a need for any penalty to have a specific deterrent effect on the CFMEU. It has, as I have already outlined, a deplorable record of contraventions of the BCII Act and similar legislation. The union has not displayed any contrition or remorse for its conduct. The contraventions are significant. Substantial penalties for past misconduct have not served to prevent repetition. Comments such as “[t]he last time it cost us a shit load of money” and “it is going to be expensive but our fighting fund will have to fix it” evidence an attitude on the part of branch officials that the risk of the imposition of significant pecuniary penalties will not be allowed to act as a constraint on unlawful activity which they consider to be warranted.Additional considerations The maximum pecuniary penalty available for each contravention is $110,000. Were it not for the substantial overlap between the various elements of the provisions of ss 38 and 44 of the BCII Act (as to which compare White v Construction, Forestry, Mining and Energy Union (2010) 198 IR 470 at [4]), I would have regarded the proposed penalty of $100,000 for both contraventions as being manifestly inadequate. When that overlap is brought into account together with the other mitigating factors to which I have referred, I have come to the view that the proposed penalty is within the permissible range. A pecuniary penalty of $100,000 will be imposed. The additional relief sought by the Applicant will also be granted.