Australian Building and Construction Commission v Construction, Forestry, Mining and Energy Union

[2017] FWC 3595

[2017] FWC 3595

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.508 - Application to restrict rights if organisation or official has misused permit rights

Australian Building and Construction Commission
v
Construction, Forestry, Mining and Energy Union & Ors
(RE2014/1389)

VICE PRESIDENT CATANZARITI SYDNEY, 6 JULY 2017

Application by the Australian Building and Construction Commission - Misuse of entry rights.

[1] On 24 December 2015, Vice President Watson made findings 1 (“first Decision”) in relation to an application by the Australian Building and Construction Commission (formerly the Director of the Fair Work Building Industry Inspectorate and hereafter “the ABCC”) under section 508 of the Fair Work Act 2009 (Cth) (“the Act”) that certain Construction, Forestry, Mining and Energy Union (“CFMEU”) officials had misused their rights of entry. On 7 March 2016, Vice President Watson issued a Decision2 (“second Decision”) in relation to the section 508 application in which the Vice President concluded inter alia that it was appropriate to suspend and, in some instances, revoke the entry permits of certain officials of the CFMEU. Orders giving effect to the second Decision were issued on 16 March 2016.3 The Orders also prescribed time periods in which certain CFMEU officials were banned from being issued entry permits.

[2] On 11 March 2016, the CFMEU lodged an appeal against the second Decision and noted in its Notice of Appeal that it sought a stay of several of the Orders in the Vice President’s second Decision. On 18 March 2016, a stay of the Orders (excluding the Orders made in relation to Mr Kera and Mr Parker) and the second Decision was granted. 4 Vice President Watson’s first Decision was not affected by the stay order and was not challenged on appeal.

[3] On 27 May 2016, a Full Bench of the Commission heard the appeal and issued a Decision. 5 The Full Bench upheld the appeal, quashed the second Decision (save for the part which affected Ms Kera and Mr Parker) and quashed Orders PR577987 and PR578000. Subsequently, the matter and the question of what orders, if any, should be made arising from the first Decision, excluding the question of whether orders should be made against the CFMEU, was referred to me for a full rehearing.

[4] I heard the matter on 27 March 2017 and reserved my Decision. At the hearing, Mr I. Neil, of Senior Counsel, and Mr R. Dalgleish, of Counsel, sought permission to appear for the Applicant. Mr R. Reitano, of Counsel, and Mr P. Boncardo sought permission to appear for the Respondent. Given the complexity of the matter and having regard to section 596 of the Act, permission was granted to both parties to be represented.

Submissions – Final Hearing

[5] At the final hearing on 27 March 2017, the ABCC relied upon its submissions dated 4 October 2016 and 10 November 2016, and the CFMEU relied upon its submissions dated 28 October 2016.

[6] I note the extensive history of the matter and I have reviewed and considered all material filed by the parties including all submissions, correspondence and relevant authorities. As the parties intended to rely on the abovementioned submissions at the final hearing, I summarise those submissions as follows.

ABCC’s submissions dated 4 October 2016

[7] The ABCC submitted that orders should be made by the Commission under section 508 of the Act restricting the rights that are exercisable under Part 3-4 by:

(a) Suspending or revoking the entry permits of the remaining individual respondents and banning the issue of entry permits to them for specified periods; 6 and

(b) Imposing conditions on all existing entry permits of CFMEU Construction and General Division officials in Queensland and Victoria and any permits to be issued for the period of 12 months from the date of order. 7

[8] The ABCC sought the orders set out in paragraphs 1(a)-(d) under heading 2.1 of the Second Further Amended Application (“SFAA”) dated 23 August 2016. The ABCC submitted that Mr Ingham, Mr Myles and Mr Kong each be effectively banned from holding a permit for a period of 2 years, with Mr Long’s permit being suspended for 12 months. The ABCC noted these should be immediate suspensions, not “suspended suspensions”.

[9] The ABCC asserted that the imposition of restrictions on rights exercisable under Part 3-4 of the Act in the event of misuse of those rights is directed to avoiding disruptive entry into workplaces and the abuse of right of entry laws, rather than the punishment of permit holders. 8 Further, the ABCC referred to Fair Work Australia in which Senior Deputy President O’Callaghan stated that restrictions must go towards “ensuring that those rights are not again misused.”9 The ABCC noted the Senior Deputy President repeated this sentiment in Fair Work Commission.10

[10] Pursuant to section 508 of the Act, the ABCC contended that both general and specific deterrence are relevant considerations, noting the purpose of restrictions is primarily protective and promoting the public interest in compliance with Part 3-4 of the Act. In order to achieve the balance referred to in section 480 of the Act, the ABCC submitted that restrictions on rights of permit holders under Part 3-4 should effectively prevent and deter future misuse of these rights so that occupiers are protected. The ABCC asserted that the restrictions under section 508(2) of the Act result in the permit holder being “penalised” or “punished” in the sense that he or she will no longer enjoy the privilege of holding a permit, and will no longer be able to use the rights conferred by Part 3-4. In this regard, the ABCC contended that the removal of rights that have been misused is both protective and punitive. 11 The ABCC also had regard to Rich v ASIC12 and Re HIH Insurance Ltd (in prov liq); ASIC v Adler13 in support of its submissions.

[11] The ABCC noted the additional material filed on 30 August 2016 which is referred to in paragraph 4 under heading 2.2 of the SFAA (“the additional material”). The ABCC contended that the additional material includes evidence of past contraventions of workplace relations laws which are particularly relevant. The ABCC contended that, given the history, the Commission could not be confident, in the absence of a substantial period without a permit, that the respondents would not misuse rights of entry again in the future. Pursuant to section 513(1)(d) of the Act, the ABCC contended that, whether an official or any other person has ever been ordered to pay a penalty under an industrial law in relation to action taken by the official is a “permit qualification matter” that must be taken into account by the Commission in assessing whether the official is a fit and proper person to be issued with a permit. In this regard, the ABCC referred to Construction, Forestry, Mining and Energy Union – re Application for a permit to enter and inspect premises 14 as to the relevant considerations to be taken into account in determining whether to issue an entry permit.

[12] The ABCC then turned to make submissions about each of the individual respondents.

[13] In relation to Mr Myles, Mr Ingham, Mr Kong and Mr Long, the ABCC made submissions as to their misuses as permit holders and prior relevant conduct, which I will not recite for the purposes of this Decision. The ABCC contended that Mr Myles, Mr Ingham and Mr Kong should be banned from being issued a permit for 2 years from the date of this Decision, whilst Mr Long should be banned from being issued a permit for 12 months from the date of this Decision.

[14] The ABCC submitted that the conditions set out in paragraph 2 under heading 2.1 in the SFAA should be imposed. The ABCC accepted that the consent order made in the section 505 proceedings should be taken into account by the Commission in determining what restrictions should be imposed under section 508 of the Act. The ABCC asserted that the respondents submitted that, as a result of the section 505 order, no restrictions should be imposed under section 508 at all. That is, the respondents submit that, because the disputes have been “dealt with” under section 505, there is no room for the operation of section 508. The ABCC contended that this could not be correct. In this regard, the ABCC contended that there is nothing preventing it from continuing its application under section 508 and noted that the nature of section 505 proceedings and section 508 proceedings are fundamentally different. The ABCC noted the Lendlease proceedings were concerned with how the private dispute should be settled, however, by contrast, the section 508 proceedings are concerned with matters of public interest and the supervision by the Commission of the exercise of Part 3-4 rights. Therefore, the ABCC submitted the Commission must determine:

(a) Whether there were misuses; and

(b) If so, the restrictions that should be imposed, having regard to the mixed protective and penal purposes of the discretion under section 508.

[15] The ABCC had particular regard to Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union 15 in relation to the weight to be given to section 505 orders as mitigation. The ABCC agreed that it had not investigated any suspected contravention of the consent orders, however, the ABCC contended that the CFMEU had put forward no evidence of its compliance more generally with Part 3-4 in respect of other head contractors. At paragraphs [195]-[207] of its submissions, the ABCC refers to the CFMEU’s “culture of non-compliance” which I have considered and will not recite in this Decision.

[16] For the above reasons, the ABCC submitted that the misuses found in the first Decision should result in the Commission suspending the permits of the relevant officials for substantial periods or revoking the permits. In this regard, the ABCC asserted that only such suspensions and bans will help achieve the object of Part 3-4 that protects occupiers of building sites from misuse of right of entry by CFMEU officials in the future.

CFMEU’s submissions dated 28 October 2016

[17] The CFMEU contended there is no sound basis for the Commission making any orders, especially noting there are already relevant restrictions in place which were the result of orders of the Commission relating to the very same circumstances that gave rise to the application. The CFMEU asserted that the Order made under section 505 by Senior Deputy President Watson (as he then was) dealt with the misuses relied on by the ABCC. The CFMEU submitted that the Order successfully regulated the exercise of entry rights by CFMEU permit holders at Lendlease sites. The CFMEU noted that the section 505 order has not been contravened by the CFMEU, or any of the individual respondents.

[18] The CFMEU posited that the power in section 508 to make orders imposing restrictions on permit holders where a misuse has been found must be exercised to achieve the objects of the Act to ensure that there is an appropriate balance between the rights of occupiers, employers, unions and permit holders. 16 Therefore, the CFMEU asserted that the power to make orders under section 508 must necessarily have regard to any other orders of the Commission that have been made in relation to the circumstances of the misuses found, the lapse of time since those misuses occurred and the likelihood that they may or may not be repeated. In this regard, the CFMEU contended that proceedings under section 508 are not for the purpose of imposing punishment or penalising permit holders. The CFMEU outlined that the ABCC’s further material should not be considered for seven reasons, which I have considered and will not repeat for the purposes of this Decision.

[19] The CFMEU had regard to the proceedings brought under section 505 of the Act before Senior Deputy President Watson on 18 February 2015. The CFMEU contended that the Order made by Senior Deputy President Watson was a complete answer to the ABCC’s case and that the ABCC’s case from then on was nothing more than an argument ad hominem against the CFMEU and the individual respondents.

[20] The CFMEU asserted that, whether any orders should be made by the Commission in proceedings and the nature of those orders must be by reference to the object of achieving the balance envisaged by section 480 of the Act. In this regard, the CFMEU submitted that section 508 is not directed to protecting occupiers. The CFMEU contended that there must be a connection between the particular misuses found and any order made. 17 The CFMEU asserted that the ABCC seeks orders against the entire CFMEU branches that have no connection to the misuses found. Moreover, the CFMEU contended that the ABCC submitted that past unlawful or inappropriate conduct may be considered in determining what, if any, orders should be made upon findings of misuses. Further, that in making such a submission, the ABCC relied on the proposition that considerations relevant in proceedings under sections 510, 511 and 513 must be relevant to section 508 matters. In this regard, the CFMEU asserted there was no basis for this contention for five main reasons, which I have considered and will not recite for the purposes of this Decision.

[21] The CFMEU contended the proceedings brought by the ABCC were for the purpose of punishing the CFMEU and the respondents, and not for the purpose which section 508 proceedings are intended. Further, the CFMEU asserted that the ABCC should be bound by the conduct of its case as the ABCC’s original and amended applications particularised the misuses relied on to ground orders under section 508 as solely relating to the constructor Lendlease.

[22] The CFMEU also made submissions in relation to what material could be utilised by the ABCC. In this regard, I note that I issued a Decision 18 on 17 February 2017 which outlined what material could be utilised by the ABCC and, therefore, I will not summarise the submissions of the CFMEU in this regard.

ABCC’s reply submissions dated 10 November 2016

[23] The ABCC contended that the section 505 order was not a complete answer and that more needed to be done to ensure there were no further misuses of the kind that had been proved. The ABCC asserted that revocation or suspension of a permit is the surest way of ensuring there is no future misuse.

[24] The ABCC submitted that the Commission’s discretion under section 508 is wider than that provided under section 505 of the Act. The ABCC asserted that the misuses found are serious and repeated and outlined three examples in which Mr Ingham was found to have misused his permit, which I have considered and will not repeat in this Decision. The ABCC noted the CFMEU’s submission that the ABCC had reframed its case, however, asserted that this submission made by the CFMEU was incorrect. In this regard, the ABCC contended that there was nothing to suggest that the prior conduct of the respondents would not be relied upon at the hearing of the second stage. As noted above, the ABCC made lengthy submissions as to what material could be utilised and I issued a Decision 19 in this regard on 27 March 2017. As such, I will not summarise the submissions of the ABCC in this regard.

Submissions – Proposed Order

[25] At the final hearing, the CFMEU outlined a number of propositions that it considered the Commission could utilise in determining the matter. One of those propositions involved the Commission issuing one of the two potential Orders drafted by the CFMEU. In this regard, I note the CFMEU did not contend that either Order should be made. The first draft Order had regard to the CFMEU’s rights of entry in relation to Lendlease building and construction sites in Victoria and Queensland. The second draft Order referred to the CFMEU’s rights of entry in relation to building and construction sites in Victoria and Queensland more broadly. I noted at the hearing that I did not see utility in making an Order in relation to Lendlease sites only. Therefore, I directed the parties to make submissions in relation to the proposed Order regarding building and construction sites in Victoria and Queensland more broadly. I summarise the parties’ submissions in relation to that proposed Order as follows.

ABCC’s submissions dated 3 April 2017

[26] The ABCC contended that the proposed Order did not represent a suitable or appropriate outcome under section 508 of the Act to the orders sought in the SFAA. The ABCC asserted that the proposed Order would not be an appropriate response to the number and serious nature of the misuses of rights of entry found against each individual respondent. In this regard, the ABCC submitted that making such an Order would involve no element of general or specific deterrence and would be a powerful demonstration that permit holders and organisations may seriously contravene their obligations under Part 3-4 of the Act with complete impunity. Thus, the ABCC posited that some direct restriction on the permits of those responsible should result from the large number of proved serious misuses.

[27] The ABCC contended that this is not a matter of punishment, but what is required for the Commission to be confident there will be no further misuses by these officials in the future. The ABCC asserted that, if the Commission treated the misusers of rights in the same way as others who have not misused, this would send the wrong message that the rights of a permit holder can be misused with impunity. In this regard, the ABCC maintained its position that the entry permits of the individual respondents should be the subject of the restrictions sought in the SFAA. The ABCC noted that the conditions sought in the SFAA are modelled on those imposed by Senior Deputy President O’Callaghan in Fair Work Commission, 20 which were adopted by Vice President Hatcher in Construction, Forestry, Mining and Energy Union – Robert Graauwmans.21 The ABCC contended there is no utility in simply imposing another set of legal obligations on respondents who have already convincingly demonstrated that they are not constrained by existing legal obligations.

[28] The ABCC noted that the conditions sought by the ABCC would work differently to the proposed Order in five respects, which I have considered and will not recite for the purposes of this Decision. The ABCC also noted issues in relation to paragraphs 2, 3, 4, 5, 7, 9(a), 11, 12, 13, 15, 16, 17 and 18 of Schedule 1 of the proposed Order, which I have considered and will not repeat in this Decision.

[29] For the above reasons, the ABCC contended that:

(a) The proposed Order is no substitute for the revocations, suspension and ban sought in respect of the permits of the individual respondents; and

(b) The Commission should impose on the permits of CFMEU officials the conditions sought in the SFAA, with the addition of paragraph 12 of Schedule 1 of the Proposed Order to condition 2(e) of the SFAA.

CFMEU’s submissions dated 10 April 2017

[30] The CFMEU contended that the ABCC’s submissions in relation to the proposed Order continued to demonstrate a failure to consider that section 508 is not directed at punishment or the mere making of orders suspending or revoking entry permits, or banning people from applying for permits for the sake of doing so. Rather, the CFMEU submitted that section 508 refers to the Commission restricting rights upon a satisfaction that there has been a misuse of those rights. The CFMEU asserted that the principal purpose of the power to make orders must be, as Senior Deputy President O’Callaghan observed, to ensure that the relevant rights are not misused again. 22 Therefore, the CFMEU posited that the fact that the proposed Order would not revoke or suspend entry permits and would not ban a permit holder from applying for a permit is beside the point. Rather, the question is whether or not the making of an order would “prevent the misuses occurring again”.23

[31] The CFMEU contended that the Commission can be satisfied that the proposed Order operates to restrict rights under Part 3-4 of the Act. In response to the ABCC’s submission that the proposed Order would not achieve general or specific deterrence, the CFMEU queried what is to be deterred in circumstances where there has been no repetition or recurrence of the misused found by Vice President Watson. Further, the CFMEU submitted that the ABCC fails to appreciate that the Order of Senior Deputy President Watson itself operated as a significant restriction upon the CFMEU and the respondent permit holders, such that it operated as an effective deterrent.

[32] Moreover, the CFMEU asserted that the ABCC was incorrect to suggest that no consequences would flow to the individual respondents if the proposed Order was made. In this regard, the CFMEU posited that the individuals will be personally bound by the Order (clause 1(b)) and they will be exposed to a civil penalty should they breach its terms under section 509 of the Act. The CFMEU submitted that almost every restriction created by the proposed Order bears a direct nexus to Vice President Watson’s findings of misuse.

[33] In relation to paragraphs [26], [31] and [32] of the ABCC’s submissions, the CFMEU noted it was content to delete the provisions referred to from the proposed Order and attached a revised Order with its submissions.

Submissions – Federal Court Judgments

[34] On 22 May 2017, the CFMEU sent correspondence to my chambers drawing my attention to a Decision 24 and Order25 of Deputy President Gostencnik. My chambers responded to this correspondence on the same date and enquired whether the parties wished to make further submissions as a result of the correspondence received by the CFMEU. On 24 May 2017, the ABCC informed my chambers that it did not wish to make further submissions in relation to the Decision and Order of Deputy President Gostencnik. However, the ABCC did wish to make submissions in relation to two Federal Court judgments26 and the CFMEU consented to the ABCC bringing these judgments to my attention. As a result, directions were issued for the parties to file submissions in relation to these two judgments, which I summarise as follows.

ABCC’s submissions dated 30 May 2017

[35] In relation to the Kane Constructions Case, the ABCC noted that contravening conduct occurred on various Kane Constructions sites in Victoria on 2 April 2014 and 22 May 2014. The ABCC further submitted that Mr Long was penalised for organising industrial action and the CFMEU was penalised $42,000.00 in respect of this contravention. The ABCC contended that this contravention was the day after Mr Long’s three misuses in relation to this matter on 1 April 2014, but before the final misuse on 20 May 2014 and, hence, it can be regarded as prior relevant conduct of Mr Long. The ABCC noted that Jessup J found there was a need for specific deterrence regarding Mr Long’s prior contraventions.

[36] The ABCC further noted that, in respect of the CFMEU’s record of industrial lawlessness, Jessup J adopted what His Honour said in another judgment delivered that day, namely, The Australian Paper Case at [31]:

“The normalisation of contraventions of industrial laws by the construction and general division of the CFMEU has been the subject of comment by Judges on so many previous occasions that any further observation on my part here would amount to little more than stating the obvious. Counsel for the respondents made no attempt to justify, to rationalise, or to play down the significance of his client’s appalling record. … if there is any union in the industrial universe which should be acutely aware of the importance of understanding the boundaries of lawful conduct in the prosecution of disputes, it is this one. Self-evidently, it does not care to do so. In the circumstances, the need for the penalty to act as a specific deterrent in the case of the CFMEU is overwhelming.”

[37] The ABCC highlighted, in that case, the CFMEU was penalised $45,000.00 in respect of unlawful industrial action under section 417 of the Act at the Australian Paper Mill in Morwell, Victoria on 27, 28 and 31 March 2014. The ABCC posited that the action on 31 March 2014 also contravened section 421 of the Act, as it was contrary to a Commission order to return to work.

CFMEU’s submissions dated 7 June 2017

[38] The CFMEU contended that the abovementioned judgments were irrelevant to what, if any, restrictions should be imposed on the respondents pursuant to section 508(2) of the Act. The CFMEU submitted that the ABCC mistakenly believes these proceedings are about punishing the CFMEU and its officials for matters that have no connection with anything that occurred on Lendlease sites in 2014. The ABCC asserted that reliance on this material appears motivated to deflect attention from the fact that the 2014 misuses on Lendlease sites have already been dealt with and addressed by the 18 February 2015 orders of Senior Deputy President Watson. Therefore, the CFMEU posited that the misuses which were the subject of these proceedings have been dealt with in a manner that has, in fact, ensured that they have not happened again and because of the extension of the order, will not be repeated.

Consideration

[39] The matter before me essentially relates to whether I am persuaded to exercise the discretion conferred upon me under section 508 of the Act to impose restrictions on the CFMEU and the respondents. In particular, the issue is whether any orders should be made in addition to those previously made by Senior Deputy President Watson under section 505 of the Act. In this regard, I note that all the applications lodged by the ABCC with the Commission, including the final application entitled “Second Further Amended Application”, relate to the issues regarding rights of entry in relation to the Lendlease sites.

[40] I now turn to outline the reasons for my Decision in determining the above issue.

[41] Section 505 of the Act states:

“FWC may deal with a dispute about the operation of this Part

(1) The FWC may deal with a dispute about the operation of this Part, including a dispute about:

(a) whether a request under section 491, 492A or 499 is reasonable; or

(b) when a right of the kind referred to in section 490 may be exercised by a permit holder on premises of a kind mentioned in subsection 521C(1) or 521D(1), despite that section; or

(c) whether accommodation is reasonably available as mentioned in subsection 521C(1) or premises reasonably accessible as mentioned in subsection 521D(1); or

(d) whether providing accommodation or transport, or causing accommodation or transport to be provided, would cause the occupier of premises undue inconvenience as mentioned in paragraph 521C(2)(a) or 521D(2)(a); or

(e) whether a request to provide accommodation or transport is made within a reasonable period as mentioned in paragraph 521C(2)(c) or 521D(2)(c).

Note 1: Sections 491 and 499 deal with requests for permit holders to comply with occupational health and safety requirements.

Note 2: Section 492A deals with requests for a permit holder to take a particular route to a room or area in which an interview is to be conducted or discussions held.

Note 3: Section 490 deals with when rights under Subdivision A, AA or B of Division 2 of this Part may be exercised.

Note 4: Sections 521C and 521D deal with accommodation in and transport to remote areas for the purpose of exercising rights under this Part.

(2) The FWC may deal with the dispute by arbitration, including by making one or more of the following orders:

(a) an order imposing conditions on an entry permit;

(b) an order suspending an entry permit;

(c) an order revoking an entry permit;

(d) an order about the future issue of entry permits to one or more persons;

(e) any other order it considers appropriate.

Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(3) The FWC may deal with the dispute:

(a) on its own initiative; or

(b) on application by any of the following to whom the dispute relates:

(i) a permit holder;

(ii) a permit holder's organisation;

(iii) an employer;

(iv) an occupier of premises.

(4) In dealing with the dispute, the FWC must take into account fairness between the parties concerned.

(5) In dealing with the dispute, the FWC must not confer rights on a permit holder that are additional to, or inconsistent with, rights exercisable in accordance with Division 2, 3 or 7 of this Part, unless the dispute is about:

(a) whether a request under section 491, 492A or 499 is reasonable; or

(b) when a right of the kind referred to in section 490 may be exercised by the permit holder on premises of a kind mentioned in subsection 521C(1) or 521D(1), despite that section; or

(c) whether accommodation is reasonably available as mentioned in subsection 521C(1) or premises reasonably accessible as mentioned in subsection 521D(1); or

(d) whether providing accommodation or transport, or causing accommodation or transport to be provided, would cause the occupier of premises undue inconvenience as mentioned in paragraph 521C(2)(a) or 521D(2)(a); or

(e) whether a request to provide accommodation or transport is made within a reasonable period as mentioned in paragraph 521C(2)(c) or 521D(2)(c).”

[42] Further, I note that section 508 of the Act states as follows:

“FWC may restrict rights if organisation or official has misused rights

(1) The FWC may restrict the rights that are exercisable under this Part by an organisation, or officials of an organisation, if the FWC is satisfied that the organisation, or an official of the organisation, has misused those rights.

Note: Only a Vice President, Deputy President or Full Bench may take action under this subsection (see subsections 612(2) and 615(1)).

(2) The action that the FWC may take under subsection (1) includes the following:

(a) imposing conditions on entry permits;

(b) suspending entry permits;

(c) revoking entry permits;

(d) requiring some or all of the entry permits that might in future be issued in relation to the organisation to be issued subject to specified conditions;

(e) banning, for a specified period, the issue of entry permits in relation to the organisation, either generally or to specified persons;

(f) making any order it considers appropriate.

(3) The FWC may take action under subsection (1):

(a) on its own initiative; or

(b) on application by an inspector.

(4) Without limiting subsection (1), an official misuses rights exercisable under this Part if:

(a) the official exercises those rights repeatedly with the intention or with the effect of hindering, obstructing or otherwise harassing an occupier or employer; or

(b) in exercising a right under Subdivision B of Division 2 of this Part, the official encourages a person to become a member of an organisation and does so in a way that is unduly disruptive:

(i) because the exercise of the right is excessive in the circumstances; or

(ii) for some other reason.”

[43] During the hearing on 27 March 2017, I noted the unusual nature of this matter due to the Order issued under section 505 of the Act in relation to the Lendlease sites. 27 In particular, the ABCC applied to join its proceedings with those involving Lendlease and the CFMEU, however, this application was refused. Since the matters have proceeded separately, the issues between Lendlease and the CFMEU have been determined by consent. However, an extensive amount of time has lapsed in relation to the matter between the ABCC and the CFMEU without final determination. In this regard, I noted at the hearing on 27 March 2017 that this unusual nature would have to be taken into account in considering what follows from the misuses, to which the ABCC agreed with this proposition.28

[44] The application before Senior Deputy President Watson (as he then was) was heard on 18 February 2015, after which a Decision 29 was issued. The ABCC appeared in that matter pursuant to section 72 of the Fair Work (Building Industry) Act 2012 (Cth). Senior Deputy President Watson decided to exercise his discretion under section 505 of the Act to make an Order30 dealing with the dispute between the parties. In this regard, the Senior Deputy President stated during the hearing on 18 February 2015 that:

“I am satisfied also that the proposed consent order provides an appropriate basis for resolving the dispute between the parties.” 31

[45] I note that the ABCC did not oppose that Order or seek to be heard in relation to that Order. Moreover, as noted above, the ABCC accepted at the hearing and in its submissions that the Order made under section 505 should be taken into account by the Commission in determining what restrictions should be imposed under section 508 of the Act. 32 The terms of the Order made under section 505 of the Act restricted and regulated the entry rights of CFMEU permit holders and settled the dispute between Lendlease and the CFMEU. In its submissions, the ABCC conceded that the dispute settled33 and noted that it had not investigated any suspected contravention of the Order made under section 505 of the Act.34 In this regard, since that Order has been made, there have been no contraventions by the CFMEU. The Order contained a dispute settlement procedure in the event that there was an alleged breach of that Order, however, this dispute settlement procedure has not been utilised due to the compliance of the CFMEU and the individual respondents. In fact, Lendlease, the CFMEU and the respondents have extended this Order by consent on numerous occasions. This is corroborated by the correspondence dated 27 June 2016 which was sent from Mr Jeremy Hanrahan, Group Manager, Industrial Relations at Lendlease, to the chambers of Senior Deputy President Watson, stating:

“… This order has been effective in not only resolving the dispute that was the subject of these proceedings but in also maintaining industrial harmony between the parties so far as right of entry is concerned. In the circumstance, Lendlease seeks, with the consent of the CFMEU, that his Honour exercises the Commission’s powers pursuant to section 603 of the Act, to vary paragraph (b) of this order and substitute a new end date of 31 August as the current end date.

The parties also seek that his Honour list the matter for conciliation as soon as convenient so that the parties can discuss the ongoing application of the order and any matters that may need clarifying with a view to agreeing on an order for a further period.”

[46] Furthermore, noting there had been no contravention of the Order issued by Senior Deputy President Watson, Deputy President Gostencnik extended this Order by consent on 27 February 2017 35 and again on 4 April 2017.36

[47] The ABCC and the CFMEU addressed the purpose of section 508 in relation to restrictions on rights of entry. In this regard, the ABCC’s submissions are contradictory. At paragraph [15] of its submissions dated 4 October 2016, the ABCC submitted that:

“The imposition of restrictions on rights exercisable under Part 3-4 of the Act in the event of misuse of those rights is directed to avoiding disruptive entry into workplaces and the abuse of right of entry laws, rather than the punishment of permit holders.”

[48] However, at paragraph [23] if its submissions dated 4 October 2016, the ABCC contended that:

“Such restrictions will result in the permit-holder being ‘penalised’ or ‘punished’ in the sense that he or she will no longer enjoy the privilege of holding a permit, and will no longer be able to use the rights conferred by Part 3-4. Thus, the removal of rights that have been misused is both protective and punitive.”

[49] Thus, at paragraph [15] of its submissions, the ABCC asserted that the impositions under Part 3-4 of the Act were not directed at punishing permit holders. However, contrarily at paragraph [23] of its submissions, the ABCC contended that such restrictions will result in permit holders being punished.

[50] At paragraph [7] of the CFMEU’s submissions dated 28 October 2016, it was contended that:

“Proceedings under s 508 of the Fair Work Act 2009 (Cth) (Act) are not for the purpose of imposing punishment or penalizing (sic) permit holders or unions.”

[51] The manner in which restrictions on rights of entry under section 508 are to be imposed is outlined in Construction, Forestry, Mining and Energy Union v Fair Work Commission, 37 whereby a Full Bench of the Commission held that:

“… the identification of the specific uses and misuses of statutory entry rights was necessary to assess the nature and extent of the misuse for the purposes of allowing the parties to put submissions and for Senior Deputy President O’Callaghan to make a decision about actions under s 508(2) of the FW Act which should follow as a consequence of the misuses.

In formulating an action under s 508(2) … it is necessary to have regard to the nature of the misuse.”

[52] Moreover, in Fair Work Australia, 38 Senior Deputy President O’Callaghan stated:

“I do not consider that any restriction of Part 3-4 rights pursuant to s.508 should be regarded as penalties for the misuse of rights. The fact that numerous sections within this Part are civil remedy provisions, the functions of FWA, as an arbitral tribunal, and the provisions of s.508 make this clear. Accordingly, I consider that any restriction of rights I impose must go towards ensuring that those rights are not again misused.”

[53] Thus, noting the above authorities, I am satisfied that one must have regard to the nature of the misuse in utilising the discretion afforded by section 508 to impose certain restrictions. Further, any restriction of rights imposed must be directed at ensuring that those rights are not again misused, rather than punishing the relevant permit holders. As such, and noting the contradictory submissions made by the ABCC, I am not satisfied that the restrictions that may be imposed under section 508 are directed at punishing permit holders.

[54] Section 480 of the Act stipulates as follows:

“Object of this Part

The object of this Part is to establish a framework for officials of organisations to enter premises that balances:

(a) the right of organisations to represent their members in the workplace, hold discussions with potential members and investigate suspected contraventions of:

(i) this Act and fair work instruments; and

(ii) State or Territory OHS laws; and

(b) the right of employees and TCF award workers to receive, at work, information and representation from officials of organisations; and

(c) the right of occupiers of premises and employers to go about their business without undue inconvenience.”

[55] The ABCC submitted that Mr Ingham, Mr Myles and Mr Kong each be effectively banned from holding a permit for a period of 2 years from the date of this Decision, whilst Mr Long should be banned from being issued a permit for 12 months from the date of this Decision. In particular, I note the following extract from transcript at the hearing on 27 March 2017 in relation to how the ABCC reached the conclusion regarding the length of time the permit holders should be banned:

“THE VICE PRESIDENT:  I understand that proposition but what Mr Reitano is saying is how do you get to two years prospectively having regard to that?  Where does it come from?

MR NEIL:  Well, the answer is it’s a synthesis of all of the relevant considerations …” 39

[56] I note that section 508 affords the Commission discretion to determine what, if any, restrictions are to be imposed. Having regard to the relevant considerations, in particular, those outlined at [45] – [53] of this Decision, I am not satisfied that the Orders sought by the ABCC achieve the object of Part 3-4 outlined in section 480 of the Act. The dispute between Lendlease and the CFMEU has been resolved; there is no evidence of any ongoing issues on those sites; and the Order has been extended by consent on numerous occasions as noted previously. Thus, the Order imposed by Senior Deputy President Watson has been implemented effectively. In this regard, I am satisfied that this Order operated as an effective deterrent. Noting there has been compliance by the CFMEU and the respondents with that Order, it is difficult to see the justification in granting the Orders sought by the ABCC.

[57] A finding of misuse of entry rights does not, as a matter of course, lead to the conclusion that there must be restrictions imposed on rights of entry. In utilising the discretion conferred by the Act, one must have regard to the nature of the misuses and any restriction of rights imposed must go towards ensuring that those rights are not again misused. Noting that this case is of an unusual nature, there has been no contravention of the Order made under section 505 and the general compliance by the CFMEU and the respondents, I am not satisfied that the Orders sought by the ABCC achieve the object of Part 3-4 outlined in section 480 of the Act. I have considered all the authorities tendered by the parties and the individual records of each of the respondents, including the two Federal Court judgments recently brought to my attention by the ABCC. Whilst the records of the individual respondents in relation to their misuses may differ, I am not satisfied that the Orders sought by the ABCC are necessary to deal with such misuses in any event.

[58] As noted above, the CFMEU made multiple propositions to the Commission and did not require the Commission to make the proposed Order considered in this Decision. In exercising my discretion pursuant to the Act, I am satisfied that the proposed Order proffered by the CFMEU entitled “Order under s 508 applying in Victoria and Queensland”, with the conceded amendments should be issued as a draft Order and the parties will be required to make further submissions. I am satisfied this draft Order recognises the findings of misuse and is appropriate having regard to the nature of those misuses, as noted in Fair Work Commission. As such, I am satisfied this draft Order achieves the object of Part 3-4 pursuant to section 480 of the Act.

[59] A draft Order to this effect and directions requiring submissions will be issued in accordance with this Decision.

VICE PRESIDENT

Appearances:

I. Neil, of Senior Counsel, and R. Dalgleish, of Counsel, for the Applicant.

R. Reitano, of Counsel, and P. Boncardo for the Respondent.

Hearing details:

2017:

8 February & 27 March.

2016:

18 August & 14 November.

Submissions:

ABCC submissions dated 4 October 2016, 10 November 2016, 3 April 2017 & 30 May 2017.

CFMEU submissions dated 28 October 2016, 10 April 2017 & 7 June 2017.

 1   [2015] FWC 6889.

 2   [2016] FWC 811.

 3   PR577986; PR577987; PR578000.

 4   [2016] FWC 1692.

 5   [2016] FWCFB 3241.

 6   Fair Work Act 2009 (Cth) s 508(2)(b), (c) and (e).

 7 Ibid s 508(2)(a) and (d).

 8   Australian Building and Construction Commissioner v McLoughlin (2007) 165 IR 369.

 9   [2011] FWA 5824, [26].

 10   [2014] FWC 3907, [54].

 11   Re Australian Building and Construction Commissioner (2009) 189 IR 244, [26]-[27].

 12 (2004) 220 CLR 129, 144-147.

 13   (2002) 42 ASCR 80, 97-99.

 14   [2003] AIRC 888 [26] (PR935310).

 15 [2016] FCA 413.

 16   Fair Work Commission [2011] FWA 5824, [26]; Australian Building and Construction Commission v McLoughlin[2007] AIRC 717, [221].

 17   Construction, Forestry, Mining and Energy Union v Fair Work Commission [2014] FWCFB 2709, [180]-[181].

 18   [2017] FWC 863.

 19   [2017] FWC 863.

 20   [2014] FWC 3907, [7]-[12].

 21   [2016] FWC 4180, [44].

 22   Fair Work Australia [2011] FWA 5824, [26].

 23   Ibid.

 24   [2017] FWC 2698.

 25   PR592988.

 26   Australian Building and Construction Commission v Construction, Forestry, Mining and Energy Union (The Australian Paper Case) [2017] FCA 367; Australian Building and Construction Commission v Construction, Forestry, Mining and Energy Union (The Kane Constructions Case) (No 2) [2017] FCA 368.

 27   Transcript dated 27 March 2017, PN319.

 28   Transcript dated 27 March 2017, PN319-320.

 29   [2015] FWC 1130.

 30   PR561155.

 31   Transcript dated 18 February 2015, PN88.

 32   ABCC’s submissions dated 4 October 2016, [179].

 33 Ibid [182].

 34 Ibid [193].

 35   PR590548.

 36   PR591541.

 37   [2014] FWCFB 2709, [180]-[181].

 38   [2011] FWA 5824, [26].

 39   Transcript dated 27 March 2017, PN321-322.

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