Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (the WGC Cranes Case) [2021] FCA 622
File number:
NSD 1792 of 2019
Judgment of:
KATZMANN J
Date of judgment:
9 June 2021
Catchwords:
INDUSTRIAL LAW – contraventions of s 54(1) of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (‘BCIIP Act’) and s 346 of the Fair Work Act 2009 (Cth) – where two union officials admitted to engaging in intimidatory and disruptive conduct with intent to apply undue pressure on employer to make or approve a building enterprise agreement on terms proposed by the union – where the union posted photograph of employee on social media labelling employee as a “scab” attracting abusive comments – assessment of penalties – where s 94 of the BCIIP Act provides that a body corporate is taken to have engaged in the same conduct as an officer, employee or agent of the body within the scope of his or her actual or apparent authority, whether union committed one or three contraventions of s 54(1) – where contraventions occurred on consecutive days and were part of a single industrial campaign, whether contraventions should be treated as a single course of conduct – whether ss 83 and 84 of the BCIIP Act exclude the operation of the common law course of conduct principle – whether contraventions objectively serious – where union officials have no previous contraventions – where union has a history of non-compliance with industrial laws – where conduct of union officials occurred on consecutive days, was directed to a common end, and had some common features, whether the totality principle required adjustment of aggregate penalties
Legislation:
Building and Construction Industry (Improving Productivity) Act 2016 (Cth) ss 5, 54, 57, 81, 83, 84, 94, 95
Fair Work Act 2009 (Cth) ss 12, 342, 346, 347, 539, 546, 557, 570
Fair Work (Registered Organisations) Act 2009 (Cth) ss 5, 26, 27
Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Constitution Place Case) [2020] FCA 1070; 299 IR 231
[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.
[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.
[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.
Consideration
[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.
[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.
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Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (the WGC Cranes Case) [2021] FCA 622
Case
[2021] FCA 622
Decision Date
CaseChat Overview and Summary
The case before the court involved the Australian Building and Construction Commissioner (Commissioner) and the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU). The Commissioner alleged that the CFMEU and two of its officials, Mr. Gutierrez and Mr. Danalis, engaged in intimidatory and disruptive conduct with the intent to pressure the employer to make or approve a building enterprise agreement on terms proposed by the union. Specifically, the union posted a photograph of an employee on social media, labelling the employee as a "scab" and attracting abusive comments. The court was required to decide several legal issues, including whether the union committed one or three contraventions of s 54(1) of the BCIIP Act, whether the contraventions should be treated as a single course of conduct, and whether the totality principle required adjustment of aggregate penalties. The court found that the union committed three contraventions of the BCIIP Act and that the contraventions should be treated as a single course of conduct. The court also found that the totality principle required adjustment of aggregate penalties. The court imposed penalties on the union and the two officials, taking into account factors such as the union's history of non-compliance with industrial laws and the officials' lack of previous contraventions. The court ordered that the union pay a penalty of $100,000 for each of the three contraventions, and that Mr. Gutierrez and Mr. Danalis pay penalties of $6,000 and $14,800 respectively. The court also ordered that each of the pecuniary penalties be paid to the Commonwealth of Australia within 28 days.
Orders
Orders of the court
8. Mr Gutierrez pay a penalty of $6,000 in respect of his contravention of s 54(1) of the BCIIP Act on 15 October 2018.
9. Mr Danalis pay a penalty of $4,800 in respect of his contravention of s 54(1) of the BCIIP Act on 15 October 2018.
10. Mr Danalis pay a penalty of $8,000 in respect of his contravention of s 54(1) of the BCIIP Act on 15 and 16 October 2018.
11. The Union pay a penalty of $100,000 in respect of its contravention of s 54(1) of the BCIIP Act by reason of Mr Gutierrez’s conduct on 15 October 2018.
12. The Union pay a penalty of $100,000 in respect of its contravention of s 54(1) of the BCIIP Act by reason of Mr Danalis’s conduct on 15 October 2018.
13. The Union pay a penalty of $120,000 in respect of its contravention of s 54(1) of the BCIIP Act by reason of Mr Danalis’s conduct on 15 and 16 October 2018.
14. The Union pay a penalty of $44,000 for its contravention of s 346 of the FW Act.
15. Each of the pecuniary penalties be paid to the Commonwealth of Australia within 28 days.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
Background
Background to the litigation
The facts were largely agreed and otherwise not contested. I make the following findings based on the parties’ statement of agreed facts.Background At all material times WGC was the operator of two main depots. They were the Wollongong depot at 49 Industrial Road, Unanderra (Wollongong depot) and the Smeaton Grange depot located at 11–15 Orielton Road, Smeaton Grange (Smeaton Grange depot). Before October 2018, WGC was covered by two enterprise agreements made with the Construction, Forestry Mining and Energy Union (CFMEU), as the Union then was, under s 186 of the FW Act. The Union is an organisation of employees registered under the Fair Work (Registered Organisations) Act 2009 (Cth) (Registered Organisations Act) and a building association and building industry participant within the meaning of s 5 of the BCIIP Act. On or about 27 April 2018, Marc Sergi, Area Manager of WGC, met with Darren Greenfield, Secretary of the NSW Branch of the Union’s Construction and General Division. Mr Greenfield indicated that the Union wished to initiate bargaining for a new building enterprise agreement and provided Mr Sergi with a proposed enterprise agreement. WGC did not agree to the Union’s proposed agreement. WGC rejected the Union’s proposed agreement and provided the Union with a copy of its proposed agreement. The Union did not agree to WGC’s proposed agreement and applied to the Fair Work Commission (FWC) for a protected industrial action ballot. The FWC granted its application and on 20 August 2018, the Union gave notices to WGC that it would take industrial action in the form of indefinite strike action commencing at 5 am on 27 August 2018. On 31 August 2018, however, the FWC made orders preventing the employees of WGC from taking industrial action for a period of three months. On 8 October 2018 the FWC allowed an appeal by the Union and the order preventing industrial action was reduced to two weeks. The Union notified WGC that the industrial action would begin on 15 October 2018. On or about 11 October 2018, Mr Sergi arranged for employees of Freo Group Pty Ltd, a related entity of WGC, to be rostered on jobs in the event that WGC employees took part in the industrial action scheduled to start on 15 October 2018. On or about 14 October 2018, Mr Sergi arranged for WGC’s cranes and trucks to be moved out of the Wollongong depot to locations including a transport yard owned by Ross Transport at Five Islands Road, Port Kembla (Ross Transport Yard). The same day, Troy Blackmore, WGC Manager, arranged for WGC’s cranes and trucks to be moved out of the Smeaton Grange depot to various sites in and around Sydney. At about 5 am on 15 October 2018 Mr Sergi attended the Wollongong depot to collect the keys to one of the cranes intended to be used for work that day at the premises of a client of WGC. At that time, approximately 40 individuals had formed a picket line outside the Wollongong depot, brandishing Union banners and flags.The events at the Ross Transport Yard on 15 October 2018 and their consequences
Evidence
Evidence Before The Court
The conduct of Mr Danalis at the Port Kembla Coal Terminal on 15 and 16 October 2018 was adverse to WGC in that it hindered or prevented the employees working and the use of its cranes to carry out scheduled work for PKCT on 16 October 2018, causing loss of revenue to WGC. The actions were also adverse to the employment of Messrs Paniagua, Windle, and the other seven Freo employees.The additional evidence The Commissioner tendered the 2020 annual return for the national office of the Union. He also tendered what I take to be the most recent financial reports for the National Office of the Union, the National Construction and General Division of the Union and the NSW Divisional Branch to demonstrate the Union’s financial position. The only party to offer any evidence was Mr Danalis. He affirmed an affidavit on 17 March 2021. Mr Danalis was not required for cross-examination. I accept his evidence. Mr Danalis deposed that he was formerly an organiser for the Union but left its employ in about September 2019 and is now employed by the Health Services Union as an industrial officer. He said that he did not admit all the allegations in the original statement of claim but he instructed his solicitors to make admissions and file an amended defence as soon as the amended originating application and statement of claim were filed. He admitted that his conduct contravened s 54 of the BCIIP Act and he apologised for it. He provided the following explanation (without alteration):That conduct happened whilst CFMEU members working at WGC Cranes were taking lawful industrial action and I wanted to support them. At the Ross Transport Yard and the Port Kembla Coal terminal, I was concerned to stop “WGC Cranes” engaging strikebreaking workers from another company “Freo Cranes” owned by the same parent company undermine the WGC employees’ industrial action.At the Ross Transport Yard, I got involved in a heated argument with John Williams.I regret becoming heated towards Mr Williams. Mr Williams had been placed in a difficult situation by his employer by being asked to break a strike, and I should have been prepared for the possibility of an argument.I immediately regretted the exchange with Mr Williams, and if I had my time over I would have removed myself from the discussion.At the PKCT, on 15 and 16 October 2018 I raised a number of safety issues. I admit that one of the reasons for my attendance at the site was in order to put pressure on WGC Cranes. Regardless of this, there were some genuine safety issues which WGC needed to deal with.I accept that when Mr Paniagua said “who are you looking for?”, I replied “your mum”. I was just being immature and impertinent. I was not talking specifically about Mr Paniagua’s mother, and I had no idea if she was deceased. I did not know Mr Paniagua personally, and had only met him the previous day at the PKCT. Mr Danalis went on to say that in 2018 he decided he no longer wanted to work as a union organiser, “largely because [he] did not enjoy or wish to continue working in the industrial relations environment of the construction industry”. He applied for work elsewhere, enrolled in the College of Law to complete his Graduate Diploma of Legal Practice, and in 2019 he undertook work experience with a firm of solicitors. He said he has no intention of returning to work for the Union. Having recently completed his legal studies, he intends to apply for admission as a solicitor later this year. He added that he had recently become a father for the first time and wants to “move on” from his time at the Union. Having left the building and construction industry and having decided to pursue a career in a very different type of workplace, he believes he is unlikely to contravene the BCIIP Act again. He expressed regret for his actions in October 2018. He concluded his affidavit with the following reflections:I have spent much time considering my own responses and behaviour during October 2018 and why I did what I did. With the benefit of hindsight I believe if I were ever to find myself in a similar confrontational situation that I am now much more mature, wiser and able to respond in an appropriate and acceptable way to the pressures of such a situation.The relevant statutory provisionsThe BCIIP Act contraventions
Decision
Reasons for decision
With respect to the contraventions on 15 October 2018 at the Ross Transport Yard, I would impose a penalty of $6,000 on each of Mr Gutierrez and Mr Danalis. With respect to the contraventions by Mr Danalis at the Port Kembla Coal Terminal on 15 and 16 October 2018, I would impose a penalty of $10,000.Conclusions with respect to the Union I will deal first with the contraventions for which the Union is taken to have engaged because of the conduct of its officers, being the three contraventions of the BCIIP Act. It will be recalled that the maximum penalty for each of these contraventions is $210,000. The contraventions are serious but they are not so serious as to warrant penalties approaching the maximum. Viewed through the prism of the Union’s record, however, they are far more serious than the contraventions of the two union officials. Unlike the union officials, the Union is not entitled to any leniency because of its past behaviour. While the contraventions by the union officials might be regarded as uncharacteristic aberrations, the contraventions by the Union manifest a continuing attitude of disobedience of the law. While there is no need for specific deterrence in the case of the union officials, there is a pressing need for specific deterrence in the case of the Union. Having regard to the Union’s apparent disdain for industrial laws that get in its way, in order to achieve the objective of deterrence, both specific and general, substantial penalties are called for. That said, the Union is entitled to some credit for the utilitarian value of its admission of culpability and its cooperation with the regulator. Moreover, I am mindful of the need to ensure that the penalties are proportionate to the seriousness of the particular contraventions. In all the circumstances, I consider that the following penalties should be imposed on the Union:(a)for the contravention by Mr Gutierrez on 15 October 2018, $126,000;(b)for the contravention by Mr Danalis on 15 October 2018, $126,000; and(c)for the contravention by Mr Danalis on 15 and 16 October 2018 at the Port Kembla Coal Terminal, $147,000. I now turn to the contravention for which the Union is solely and directly liable for, the contravention of s 346 of the FW Act. In this respect, the Union’s conduct is similar to the conduct of the Maritime Union of Australia in FWO v MUA. In FWO v MUA union posters were placed on noticeboards at various locations and on a bollard to an entry gate naming a number of employees as “scabs” for having worked while their workmates took protected action in a dispute with Fremantle Ports for a new enterprise agreement. The behaviour of these employees was described as “treacherous”, warranting condemnation by all Fremantle workers. The employees were referred to in the posters as “lowlifes”, who turned on their colleagues to do the bosses’ bidding. The poster also included a reproduction of the short essay attributed to the late author, Jack London, sometimes called “Ode to a Scab”.
Ratio Decidendi
Legal Principle Established
As I indicated earlier, the size of a body corporate is relevant to the central question of deterrence, particularly specific deterrence. The Union is a large, prominent and influential national union. The evidence tendered by the Commissioner establishes that it is both cash and asset rich. In these circumstances the penalties will need to be sufficiently high to operate as an effective deterrent (though not so high as to be disproportionate to the gravity of the contraventions). That is particularly so in the case of the Union having regard to its culture of non-compliance with industrial laws which it has steadfastly refrained from addressing.Cooperation with the regulator While it is true that the admissions were made relatively late, after the proceeding had been listed for trial, it appears that the respondents made admissions shortly after significant amendments were made to the statement of claim. All the respondents are entitled to receive credit for their cooperation with the Commissioner by admitting the contraventions and reaching agreement on the facts. As the Full Court observed in The Queensland Infrastructure Case at [163]:From a public policy perspective, it is important to encourage such cooperation by reflecting it in the penalties imposed. It also shows willingness on the part of the CFMEU to accept responsibility for its actions and to facilitate the course of justice. The fact that the proceedings were not defended saved the community the expense of a potentially lengthy contested hearing.Contrition There was no evidence of contrition on the part of either Mr Gutierrez or the Union. Mr Danalis, on other hand, gave evidence that suggests he is genuinely contrite. The Commissioner accepted that this was so, as do I. Mr Danalis has left the employ of the Union and forged a new career in the law. Although there is no evidence to indicate whether he remains a Union member, the prospect of him engaging in further contravening conduct appears to be remote. Mr Latham of counsel, who appeared for Mr Danalis and Mr Gutierrez, submitted that Mr Gutierrez does not work for the Union anymore either. While there was no evidence to support the submission, the Commissioner accepted that Mr Gutierrez was no longer working for the Union. In these circumstances and notwithstanding the absence of evidence of contrition on the part of Mr Gutierrez, the Commissioner effectively accepted that there was no need for specific deterrence in either case.Conclusions with respect to Mr Gutierrez and Mr Danalis While there is no need for specific deterrence in either case, there remains a need for general deterrence. The respondents did not argue otherwise. The Commissioner submitted that Mr Danalis’s contraventions should attract penalties in the mid-range because they were “premeditated, deliberate and sustained contraventions and involved the serious and disruptive blockade action”, and that a penalty “from mid-range” was also appropriate for Mr Gutierrez.