Australian Building and Construction Commissioner v Barker - [2017] FCCA 1143

FEDERAL CIRCUIT COURT OF AUSTRALIA

AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER v BARKER & ANOR

[2017] FCCA 1143

Catchwords:
INDUSTRIAL LAW – Application for imposition of pecuniary penalties – misrepresentation for requirement to pay outstanding union fees to CFMEU.

Legislation:

Fair Work Act 2009 (Cth), s.349(1)(a)

Cases cited:
ABCC v CFMEU and Reardon [2012] FCA 189
ABCC v Moses & Ors [2017] FCCA 738
Cahill v CFMEU (No.3) [2009] FCA 52
Construction, Forestry, Mining and Energy Union v Endeavour Coal Pty Ltd (2015) 231 FCR 150
Darlaston v Parker (No.2) [2010] FCA 1382
Director of the Fair Work Building Industry Inspectorate v CFMEU (No.2) [2016] FCA 436
Gregor v CFMEU and Berardi [2009] FMCA 1266
Stuart-Mahoney v CFMEU (2008) 177 IR 61
Wilson v Nesbit and CFMEU [2009] FCA 1574

Applicant:

AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER

First Respondent:

DANIEL BARKER

Second Respondent:

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

File Number:

BRG 854 of 2016

Judgment of:

Judge Jarrett

Hearing date:

19 May 2017

Date of Last Submission:

19 May 2017

Delivered at:

Brisbane

Delivered on:

30 May 2017

REPRESENTATION

Counsel for the Applicant:

Ms McCartney

Solicitors for the Applicant:

Clayton Utz

Counsel for the Respondents:

Mr Massy

Solicitors for the Respondents:

Hall Payne Lawyers

ORDERS

THE COURT DECLARES THAT:

On 28 January, 2016 the First Respondent contravened s.349(1)(a) of the Fair Work Act 2009 (Cth) by recklessly making a false or misleading representation about Mr Ciaran Duffy’s obligation to engage in industrial activity namely, to pay a fee to the Second Respondent;
On 28 January, 2016 the First Respondent contravened s.349(1)(a) of the Fair Work Act 2009 (Cth) by recklessly making a false or misleading representation about Mr Wesley Lee’s obligation to engage in industrial activity namely, to pay a fee to the Second Respondent;
By reason of s.363(1)(b) of the Fair Work Act 2009 (Cth), the Second Respondent contravened s.349(1)(a) of the Fair Work Act 2009 (Cth) by the conduct of the First Respondent constituting the contravention the subject of declaration (1) herein;
By reason of s.363(1)(b) of the Fair Work Act 2009 (Cth), the Second Respondent contravened s.349(1)(a) of the Fair Work Act 2009 (Cth) by the conduct of the First Respondent constituting the contravention the subject of declaration (2) herein;

THE COURT ORDERS THAT:

The First Respondent pay penalties totalling $6,000 ($3,000 for each contravention) in respect of the contraventions the subject of declarations (1) and (2) herein;
The Second Respondent pay penalties totalling $80,000 ($40,000 for each contravention) in respect of the contraventions the subject of declarations (3) and (4) herein;
Each of the First and Second Respondents pay the said penalties to the Applicant within 28 days of the date of this order.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 854 of 2016

AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER

Applicant

And

DANIEL BARKER

First Respondent

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

Second Respondent

REASONS FOR JUDGMENT

This is yet another case in the ever-growing number of cases that involve officers, delegates or agents of the Construction, Forestry, Mining and Energy Union contravening the provisions of the Fair Work Act 2009 (Cth). In this case, the CFMEU, by its delegate Daniel Barker, is alleged to have contravened s.349(1)(a) of the Fair Work Act on two separate occasions on 28 January, 2016 when Mr Barker prevented two men from working on a particular building site because the were not then current paid up members of the CFMEU.
Both Mr Barker and the CFMEU admit the contraventions. The application before me has proceeded on the basis of the allegations in the amended statement of claim filed on 16 March, 2017, the respondents’ further amended defence filed on 21 March, 2017 and the amended reply filed on 7 April, 2017. The respondents led no evidence on the hearing of this application other than to tender two documents going to the non-admission of certain peripheral matters.
These reasons are about the pecuniary penalties to be imposed on the respondents for the admitted contraventions.
The subsection of the Fair Work Act contravened in this case, s. 349(1)(a), appears in Part 3-1 of the Act. It provides:
349 Misrepresentations
(1) A person must not knowingly or recklessly make a false or misleading representation about either of the following:
(a)another person’s obligation to engage in industrial activity;
(b)another person’s obligation to disclose whether he or she, or a third person:
(i)is or is not, or was or was not, an officer or member of an industrial association; or
(ii)is or is not engaging, or has or has not engaged, in industrial activity.
Note: This subsection is a civil remedy provision (see Part 4‑1).
(2) Subsection (1) does not apply if the person to whom the representation is made would not be expected to rely on it.
The purpose of Part 3-1 was described by the Full Court in Construction, Forestry, Mining and Energy Union v Endeavour Coal Pty Ltd (2015) 231 FCR 150 at [182] in the following way:
The evident purpose of Pt 3-1 is to protect the workplace rights conferred by that Part including by protecting the exercise of those rights and providing effective relief for persons discriminated against, victimised or otherwise adversely affected. So much may be discerned from the title to Part 3-1, the summary of Div 3 given by s 334 and the objects of Part 3-1 set out in s 336.
In Director of the Fair Work Building Industry Inspectorate v Construction Forestry, Mining and Energy Union (Quest Apartments and Greek Community Centre) [2016] FCA 1262, Tracey J said at [32]:
It is necessary, in cases such as the present, to recall that one of the purposes served by s 349 of the Act is to uphold the principle of freedom of association. That principle is recognised in general object (e) in s 3 of the Act and in the objects of Part 3-1 in which s 349 appears: see s 336(1)(b).
Against that statutory framework, it is necessary to set out the facts upon which the contraventions took place.
Hindmarsh Construction Australia Pty Ltd was the head contractor for a building project at Musk Avenue, Kelvin Grove called in the material before me, the Zest Apartments Project. Silverstrand Developments Pty Ltd was contracted by Hindmarsh to provide labour hire services on the project. Mr Wesley Daniel Lee was an employee of Silverstrand.
In turn, Silverstrand entered into a contract for services with Future Civil Pty Ltd for the provision of labouring work to the Project, starting on 28 January, 2016. Mr Ciaran Duffy was a director and employee of Future Civil.
On 28 January, 2016, Daniel Barker was:
a)an employee of Hindmarsh;
b)an official of the CFMEU, namely an elected Shop Steward/Delegate; and
c)provided with an on-site office by Hindmarsh to facilitate the performance of his duties as a delegate of the CFMEU.
On 28 January, 2016 Mr Duffy attended at the project site to provide labouring work. He was scheduled to perform 8 hours work at the site on both 28 and 29 January, 2016. He arrived on site at approximately 7.00am on 28 January for an induction.
Mr Barker was present outside the office where persons, including Mr Duffy, were to undergo their induction. There is no dispute that Mr Barker approached Mr Duffy and asked him for his name and date of birth. Mr Duffy provided that information to Mr Barker.
After he completed the site induction, at Mr Barker’s request Mr Duffy accompanied Mr Barker to Mr Barker’s office. Mr Barker made a demand to Mr Duffy for unpaid union membership fees. Specifically, Mr Barker said to Mr Duffy words to the effect that Mr Duffy had to pay his unpaid union membership fees in order to work on the site. There is no dispute that a conversation to the following effect occurred between Mr Barker and Mr Duffy:
Mr Barker: You owe $1,290.00 for union fees that are unpaid and this will have to be sorted out before you can work on this site.
Mr Duffy: I am only recently back in the country and I do not have the money to pay that.
Mr Barker: Well something has to happen. I’ll phone someone and see what deal I can do for you.
After Mr Barker made a phone call, a further conversation to the following effect occurred between Mr Barker and Mr Duffy:
Mr Barker: You have to pay $520.00 which includes your union fees for three months. That is a really good deal, you should take it.
Mr Duffy: I don’t have it but I’m willing to pay forty or fifty dollars per week.
Mr Barker: You will either have to pay it or Silverstrand will have to pay it.
Mr Duffy: I don’t know how long I will be working on this site.
Mr Barker: Hang on, I am going to have to go up and find out; this is going to have to be sorted.
After a few minutes, Mr Barker further said to Mr Duffy words to the effect that either he (Mr Duffy) or Silverstrand would have to pay $520.00 before Mr Duffy could work on the Site. A conversation to the following effect occurred between Mr Barker and Mr Duffy:
Mr Barker: You’re only going to be here for two days. You will have to pay the fees. Do you have a debit card?
Mr Duffy said: No
Mr Barker: Either you will have to pay the $520.00 or Silverstrand would have to pay it before you can work on this site.
Mr Duffy did not pay the union membership fees demanded by Mr Barker and left the site. Mr Duffy did not work at the Zest Project site on either 28 or 29 January, 2016.
Mr David Liebke was the Site Manager for Hindmarsh for the Zest Project on 28 January, 2016. He became aware that Daniel Barker had prevented Mr Duffy from working on the site. Mr Liebke approached Mr Barker. There is no dispute that the following conversation occurred:
Mr Liebke: What are you doing?
Mr Barker: These blokes can’t work on site, they’re not in the union and you got to be in the union to work on this site. They’re not in the union and they won’t join and they can’t be on site, this is an EBA site.
Mr Liebke: No it’s not Dan, and what are you doing sending those workers away because I need them to do work here.
Mr Barker: They don’t, one of them is not financial, he owes $1750.
Mr Liebke: You can’t do that. They don’t have to be in the union, that’s their right to not be in the union and their right to be able to work on our site.
Mr Barker: No, everybody’s got to be in the union, this is an EBA site, it’s in your EBA that they all have to be on site in the union and have an EBA.
Mr Liebke: Oh, is that right. Fair Work’s in there doing an audit on Hindmarsh at the moment and I can’t believe you’re doing what you’re doing right under their noses.
Mr Barker: Oh, it’s not me, I’m just following instructions from Tony Floro.
On 28 January, 2016 Mr Lee also attended at the Zest Project Site for the purpose of performing labouring work. Mr Lee was scheduled to perform 8 hours work on both 28 and 29 January, 2016. In accordance with his instructions, Mr Lee began work soon after he arrived on site on 28 January.
After a scheduled break about mid-morning, Mr Lee was working when he was approached by Mr Barker. Mr Barker asked Mr Lee to provide some details so that Mr Barker could perform a “credit check”.
Mr Lee provided the requested details. Mr Barker then used his mobile telephone and asked the person on the other end to do a “credit check” on Mr Lee.
After the call ended, Mr Barker asked Mr Lee to go to his office with him. Mr Lee complied. After arriving at Mr Barker’s Office, Mr Barker made a demand to Mr Lee for unpaid union membership fees. Mr Barker said to Mr Lee that if the union membership fees were not paid, Mr Lee could not work on the site. There is no dispute that a conversation to the following effect occurred between Mr Barker and Mr Lee:
Mr Barker: I just got off the phone in doing your credit check. It appears that you had a CFMEU membership that has run out some time ago. On the basis of how long it’s been you have fees owed to the total of $1,290.
Mr Lee: I had a membership with the CFMEU in 2012 which was paid for by the company I worked for which was Brisbane Bricklaying and I only worked for them for a period of two months and I did not realise that my membership had run out or that I needed to renew it.
Mr Barker: Because you have been a member before, that when your membership runs out, it’s your responsibility to send a letter terminating your membership. Because they didn’t receive such a letter, the fees kept building up.
Mr Lee: I was unaware of that action having to be taken and I never received any letters, emails or phone calls telling me of that and that I have been working out west for the previous two years and was only on the Hindmarsh site as a temporary two day event to help them out. I felt that because I worked away out west in Miles, union membership would be useless to me as there was no CFMEU presence on site.
Mr Barker: The CFMEU is everywhere in Queensland and if you ever had an issue out west and you were a member, they could be contacted. When I was on the phone, they told me that you had never done settlement with them. I could maybe do something for you in that regard.
Mr Lee: I don’t think paying you any money was justified under the circumstances because I’m only going to be here for two days.
Mr Barker: It is a requirement to be a paid up member to work on the Zest site and that’s the way it is and if you don’t want to pay the fees, you cannot work on site.
Mr Lee: Yeah, that’s fine.
After the conversation referred to above, Mr Lee left Mr Barker’s Office and Mr Barker followed him out. As they walked out, Mr Barker gestured to Mr Lee with his right hand pointing towards the site delivery exit gate.
Mr Lee did not pay the union membership fees demanded by Mr Barker and left the site. He did not perform any other work at the Zest Project site on 28 or 29 January, 2016.

The Contraventions

There is no dispute that Mr Barker contravened s.349(1)(a) of the Fair Work on each occasion that he told Mr Duffy and Mr Lee that they could not work on the Zest Project site without first paying the money said to be outstanding for union dues. There is no dispute that the CFMEU is also liable for the contraventions.
In certain circumstances, s.557(1) requires the Court to treat multiple contraventions of penalty provisions specified in s.557(2) of the Act as a single contravention of the relevant provision. However, s.557(1) has no application in the present case because s.349(1)(a) is not specified in s.557(2) of the Act.
Nonetheless, it is open to the Court to consider whether or not separate contraventions should in any event be regarded as a single course of conduct. That might result in a reduced penalty for each of the contraventions or a larger penalty for one contravention and a lesser, or no penalty for the other contraventions. As the respondents point out, ultimately it is a matter of discretion. A Court can regard conduct as involving a single course of conduct where there is an inter-relationship between the legal and factual elements of two or more offences and must, in appropriate circumstances, ensure that an offender is not punished twice for the same conduct.
The ultimate control on the exercise of the discretion is the requirement that the penalty be proportionate to the gravity of the contravening conduct. To that end, as the final step in the exercise of the penalty fixing discretion, the Court must ensure that the totality of the penalties imposed are just, appropriate and proportionate to the contraventions when viewed collectively.
The maximum penalty for a contravention of s.349 of the Act, as at January, 2016 was 60 penalty units (being $10,800) for an individual; and 300 penalty units ($54,000) for a body corporate such as the CFMEU.
The contraventions of s. 349 of the Act in this case are serious. The CFMEU has a prominent role in the Australian industrial landscape as a significant industrial association in the building and construction industry. Daniel Barker was an official of the CFMEU and engaged in the contravening conduct whilst acting in his role as Shop Steward/Delegate. His duties included enrolling members and collecting dues.
There is no evidence from either respondent that Mr Barker did not understand the law or was mistaken as to its application to Mr Duffy or Mr Lee on 28 January, 2016. Indeed, Mr Barker told Mr Liebke that he was acting on instructions.
In my view, the evidence indicates that both Mr Barker and the CFMEU (on the uncontested facts he was acting on instructions) at the very least recklessly disregarded the provisions of the Fair Work Act and the way in which they applied to the performance of Mr Barker’s duties for the CFMEU. I accept the applicant’s submission that Mr Barker’s conduct is indicative of Mr Barker having received no training in relation to the application of industrial laws to his role from the CFMEU. The respondents led no evidence that Mr Barker had been properly trained. A lack of training is consistent with Mr Barker’s statement that he was acting on instructions from Tony Floro who, in the context of the relevant conversation with Mr Liebke, could only have been a person within the CFMEU that Mr Barker had consulted about the issue.
On the admitted facts, I am satisfied that Mr Barker’s conduct in respect of both contraventions was recklessly indifferent to what the law required of his conduct and the rights of the workers concerned.
More than that, Mr Barker’s conduct toward Mr Lee was bordering on the deliberate given that Mr Liebke had informed Mr Barker that workers on the site did not need to be in the CFMEU. Mr Barker led no evidence to show that he took steps to obtain advice about what Mr Liebke had told him or to check its veracity. He simply stated that he was acting on instructions.
The contraventions ae serious because they deprived two men of the right to work at the Zest Project site as they had planned to do. They lost the opportunity to earn income from that source for those two days.
Mr Barker’s conduct ran contrary to the stated purposes of Part 3-1 of the Fair Work Act.
Mr Barker has not previously been found to have contravened the Fair Work Act in ways similar to the present case or in other ways. He is no longer a delegate or a shop steward for the CFMEU, having ceased that role earlier this year. I take those matters into account. However, in Director of the Fair Work Building Industry Inspectorate v CFMEU (No.2) [2016] FCA 436 Mortimer J said at [143], in relation to the CFMEU’s office holders:
A registered industrial organisation such as the CFMEU can only act through its office holders, members or employees. Although considerations of specific deterrence might be described as applicable to the CFMEU as a registered organisation, in a practical sense they are applicable to those who hold office within the organisation and, it is fair to assume, make decisions about industrial actions by the union, and are accountable to their members for such actions.
The CFMEU has been found to have contravened the Fair Work Act by making, through its agents:
a)misrepresentations to members about their obligations to pay fees to the CFMEU; and
b)misrepresentations or threats to employees that the employees were obliged to join the CFMEU.
The material to which I have been taken by the parties demonstrates that the CFMEU has been dealt with for such contraventions on no less than nine occasions: ABCC v CFMEU and Reardon [2012] FCA 189; Darlaston v Parker (No.2) [2010] FCA 1382; Cahill v CFMEU (No.3) [2009] FCA 52; Wilson v Nesbit and CFMEU [2009] FCA 1574; Gregor v CFMEU and Berardi [2009] FMCA 1266; Cruse v CFMEU (No.2) [2008] FCA 1637; Stuart-Mahoney v CFMEU (2008) 177 IR 61; Martino v CFMEU and Maher (unrep. No. T02692326, Melbourne Magistrates Court, 28 October, 2004) and ABCC v Moses & Ors [2017] FCCA 738.

Cleary, in respect of the CFMEU the imposition of substantial pecuniary penalties does not seem to have the desired effect of deterring further contraventions. I accept the applicant’s submission that the conduct in this case occurred against a background of a large number of prior contraventions on the part of the CFMEU and its officials for coercive conduct. In the circumstances, specific deterrence looms large as a particularly relevant consideration.
In Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (the Webb Dock case) [2017] FCA 62 Jessup J made some comments that are entirely apposite to the present case. At [65] his Honour said:
It is now well-established that deterrence, both specific and general, is the predominant purpose of civil penalties in a statutory regime such as that of the FW Act. The CFMEU is a registered organisation of substantial size, resources and influence. Any suggestion that it did not fully understand the operation of the provisions of the Act under which the Director proceeded could not be taken seriously. Indeed, its past record of encounters with these, or similar, provisions speaks loudly of its familiarity with them. That record, to which I refer further below, justifies only one inference: that the CFMEU has done nothing, over the years, to cause its own staff to comply with the law. Indeed, the inference that the CFMEU will always prefer its own interests, whatever they may be from time to time, to compliance with the law is a compelling one. This case presented yet another instance of that pattern of behaviour. The CFMEU and its members may be grateful that the staff of the banks and other financial institutions to whom it has, I presume, entrusted its considerable assets do not take the same approach to compliance with the law.
I accept the applicant’s submission that while the CFMEU is not to be punished again for its earlier misconduct, it should be punished more severely because of its continued willingness to engage in contravening conduct, which suggests that earlier penalties have not had any real deterrent effect.
There is no evidence that Mr Barker was disciplined in any way by the hierarchy of the CFMEU for his conduct. There is nothing here to suggest any contrition or corrective conduct by either respondent. Indeed, the suggestion from Mr Barker that he was acting on instructions demonstrates that his behaviour was tolerated, facilitated and encouraged by the CFMEU and its hierarchy.
There is also a need for general deterrence. Union officials, delegates and other agents of industrial unions must be sent a message that their first duty is to obey the industrial laws of this country rather than the instructions given to them by their superiors further up the union hierarchy.

Penalties

Despite the respondents’ submissions, in my view each of the contraventions calls for the imposition a penalty for each. Whilst the contraventions arose on the same day and in respect of the same building project, the contraventions related to separate employees and were temporally not connected. I accept the applicant’s submissions that despite being close in time, the contraventions in relation to Mr Duffy and Mr Lee should not be treated as one course of conduct. Mr Barker has admitted to two separate contraventions and each contravention arose from separate conduct, namely separate interaction with Mr Duffy and Mr Lee.
Further, I accept that it is important that each contravention was separated by the intervening conversation that Mr Barker had with Mr Liebke. After his conversation with Mr Liebke, Mr Barker had an opportunity to reflect on his actions toward Mr Duffy and act with some restraint in future. However, when faced with similar circumstances a short time later, Mr Barker again acted in the same way by making separate but similar statements to Mr Lee.
In my view there is no question of Mr Barker, or the CFMEU being punished twice for the same conduct if I do not treat the contraventions as arising from a course of conduct and I impose a substantive penalty in respect of each contravention.
In my view an appropriate penalty for each contravention by Mr Barker is $3,500 for each contravention. That is a total penalty of $7,000 for both contraventions. In my view that is not an inappropriate response to Mr Barker’s contravening conduct. In light of Mr Barker cooperation in these proceedings, however, the total penalty should be reduced to $6,000, or $3,000 for each contravention.
An appropriate penalty for each contravention that the CFMEU is to be taken to have committed is $45,000 for each. That is a total penalty of $90,000 which, in light of the CFMEU’s deplorable history of compliance with industrial laws, the ongoing need for specific deterrence, the absence of evidence of corrective action and general lack of contrition is an appropriate response to the offending. A reduction to reflect the CFMEU’s cooperation in these proceedings which has led to the avoidance of a trial on liability should attract some discount. For that reason the total penalty should be reduced to $80,000 or $40,000 for each contravention.
I make the declarations and orders set out at the commencement of these proceedings.

I certify that the preceding forty-nine (49) paragraphs are a true copy of the reasons for judgment of Judge Jarrett

Associate:

Date: 30 May 2017