Australian Building and Construction Commissioner v J Hutchinson Pty Ltd T/A Hutchinson Builders

The appeal before the Full Court of the Federal Court of Australia was initiated by the Australian Building and Construction Commissioner against J Hutchinson Pty Ltd, trading as Hutchinson Builders, following a penalty imposed by the Federal Circuit Court. The penalty arose from Hutchinson Builders' contravention of section 474(1)(b) of the Fair Work Act 2009 (Cth), which pertains to unprotected industrial action. The Federal Circuit Court had determined a penalty of $1,200 for ten separate contraventions, which Hutchinson Builders contested as manifestly inadequate. The central legal issues before the Full Court involved whether the primary judge had failed to properly consider the deterrence aspect of imposing penalties, and if the penalty was indeed inadequate. The Full Court considered that the primary judge acknowledged the purposes of civil penalties as being punishment, deterrence, and rehabilitation, but the penalty imposed did not sufficiently reflect the significance of general deterrence, particularly given that this was the first contravention for Hutchinson Builders, a major building company.

The Full Court of the Federal Court held that the primary judge did not adequately weigh the importance of deterrence when imposing the penalty. The Full Court recognised that the penalty for contraventions of the Fair Work Act must serve the principal purpose of deterrence to ensure compliance with workplace laws. Given Hutchinson Builders' status as a significant player in the building industry, the Full Court considered that a higher penalty was necessary to effectively deter not only Hutchinson Builders but also other entities from similar breaches in the future. The Full Court found that the penalty of $1,200 was manifestly inadequate in light of the statutory maximum penalty of $510,000 and the role of general deterrence. Consequently, the appeal was allowed, and the penalty imposed by the Federal Circuit Court was set aside.

In light of the findings, the Full Court exercised its discretion to impose a fresh penalty. The managing director of Hutchinson Builders was aware of the unprotected industrial action but failed to follow up on compliance, highlighting a level of negligence. The Full Court determined a penalty of $20,000, comprising $2,000 for each of the ten contraventions. This amount was deemed appropriate to achieve the objectives of deterrence and punishment while considering the company's first-time contravention status. The Full Court further ordered that the penalties be paid within 28 days into the Consolidated Revenue Fund of the Commonwealth. No order regarding costs was made.