Australian Building and Construction Commissioner v Moses and Ors (No.2)
[2017] FCCA 2738
•9 November 2017
FEDERAL CIRCUIT COURT OF AUSTRALIA
| AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER v MOSES & ORS (No.2) | [2017] FCCA 2738 |
| Catchwords: INDUSTRIAL LAW – Application for imposition of pecuniary penalties – coercion – penalties imposed. |
| Legislation: Fair Work Act2009 (Cth), ss.346, 348, 349, 550(1), 793, 556 |
| Cases cited: ABCC v Barker and Anor [2017] FCCA 1143 Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 3) [2017] FCA 10 Australian Building and Construction Commissioner v Moses & Ors [2017] FCCA 738 Australian Building and Construction Commissioner v Pauls [2017] FCA 843 Canturi v Sita Coaches Pty Ltd (2002) 116 FCR 276 Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (The Yarra's Edge Case) [2016] FCA 772 Director of the Fair Work Building Industry Inspectorate v Robinson [2016] 241 FCR 338 Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2016] FCA 436 United Group Resources Pty Ltd v Calabro (No 7) (2012) 203 FCR 247 |
| Applicant: | AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER |
| First Respondent: | JODY MOSES |
| Second Respondent: | GREGG CHURCHMAN |
Third Respondent: | CONSTRUCTION, FORESTRY MINING AND ENERGY UNION |
| File Number: | BRG 450 of 2016 |
| Judgment of: | Judge Jarrett |
| Hearing date: | 11 August 2017 |
| Date of Last Submission: | 11 August 2017 |
| Delivered at: | Brisbane |
| Delivered on: | 9 November 2017 |
REPRESENTATION
| Counsel for the Applicant: | Mr C J Murdoch QC with Mr Mackie |
| Solicitors for the Applicant: | Ashurst Australia |
| Counsel for the Respondents: | Mr Massy |
| Solicitors for the Respondents: | Hall Payne |
ORDERS
THE COURT DECLARES THAT:
In contravention of s.348 of the Fair Work Act2009 (Cth), on 11 September, 2013 at the Gladstone Boardwalk Construction Project, the First Respondent threatened to take action against 7 workers engaged at that Project with intent to coerce those workers to engage in industrial activity, namely to become a member of the Third Respondent, by telling the workers:
(a)if they did not join the CFMEU then:
(i)no work would occur by the workers that day; and
(ii)they would be removed from the site;
(b)it was a union site and if they wanted to work on the site they had to join the CFMEU;
(c)the workers had five minutes to think about it; and
(d)after some discussion, that he would give the workers 48 hours to decide, and that he would return on Friday 13 September, 2013.
In contravention of s.346(a) of the Fair Work Act2009 (Cth), on 11 September, 2013 the First Respondent took adverse action within the meaning in items 7(b) and 7(c) of s.342(1), and s.342(2) of the Fair Work Act2009 (Cth), being the action set out in paragraphs 1(a) to 1(d) of declaration 1 above, because some of the workers were not members of the Third Respondent.
In contravention of s.349(1)(a) of the Fair Work Act2009 (Cth), on 11 September, 2013 the First Respondent, by the conduct set out in paragraph 1(b) in declaration 1 above, knowingly made a false or misleading representation about the workers’ obligation to engage in industrial activity, namely to become a member of the Third Respondent.
On 11 September, 2013 the Second Respondent aided, or was knowingly concerned in, the contraventions of the First Respondent set out in declarations 1 to 3 hereof within the meaning in ss.550(2)(a) and 550(2)(c) of the Fair Work Act 2009 (Cth), thereby contravening ss. 348, 346(a) and 349(1)(a) of the Fair Work Act 2009 (Cth).
On 11 September, 2013 by the conduct of the First Respondent referred to in declarations 1 to 4 hereof and the operation of s.793 of the Fair Work Act 2009 (Cth), the Third Respondent engaged in the contravening conduct of the First Respondent and thereby contravened ss. 348, 346(a) and 349(1)(a) of the Fair Work Act 2009 (Cth).
THE COURT ORDERS THAT:
the First Respondent pay a pecuniary penalty of $5,500 in respect of the contravention the subject of declaration (1) herein;
the Second Respondent pay penalties totalling $4,000 in respect of the contravention of s.348 of the Fair Work Act 2009 (Cth) the subject of declarations (1) and (4) herein;
the Third Respondent pay penalties totalling $45,000 in respect of the contravention of s.348 of the Fair Work Act 2009 (Cth) the subject of declarations (1) and (5) herein;
Each of the First, Second and Third Respondents pay the said penalties to the Commonwealth of Australia within 28 days of the date of this order.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 10 of 2016
| AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER |
Applicant
And
| JODY MOSES |
First Respondent
| GREGG CHURCHMAN |
Second Respondent
| CONSTRUCTION, FORESTRY MINING AND ENERGY UNION |
Third Respondent
REASONS FOR JUDGMENT
On 18 April, 2017 I found that:
a)Mr Moses contravened ss.346, 348 and 349 of the Fair Work Act 2009 (Cth);
b)Mr Churchman was involved in those contraventions for the purposes of s.550(1) of the Act; and
c)the CFMEU was liable for those contraventions by reason of s.793 of the Act.
Australian Building and Construction Commissioner v Moses & Ors [2017] FCCA 738.
I directed that the parties bring in minutes of orders that they agreed should, in the circumstances, be made and otherwise adjourned the application for a hearing as to the penalties that should be imposed for the contraventions. Save for one matter, the parties have agreed upon the orders that should be made. Each has made submissions about the penalties that should be imposed in the circumstances of this case.
A preliminary issue
The parties’ submissions reveal that an issue exists about the extent to which I found that Mr Churchman was involved in the contraventions found to have been committed by Mr Moses. I found that Mr Moses committed three contraventions of the Fair Work Act namely one contravention of each of ss.346, 348 and 349(1)(a) of the Act. The contraventions were constituted by Mr Moses’ statements made by him to certain workers assembled for the purposes of a meeting with him on 11 September, 2013. The statements constituting the contraventions were made over the course of two attendances by Mr Moses and Mr Churchman upon the assembled workers and, as I point out in my reasons at [149] – [156], the applicant’s case was one whereby the statements made by Mr Moses over the course of his two attendances amounted to the relevant contraventions.
For the reasons I gave at [157] - [168] I concluded that Mr Churchman was liable pursuant to s.550(1) of the Act because he was involved in Mr Moses’ contraventions. To the extent that it is apparently unclear, in my view Mr Churchman is liable pursuant to s.550(1) of the Act for each of Mr Moses’ contraventions.
In those circumstances and having regard to the respondents’ submissions, it is appropriate to make orders and declarations in accordance with each of those proposed by the applicant in its written submissions filed on 19 May, 2017.
Penalty
Section 556 of the Fair Work Act provides:
556 Civil double jeopardy
If a person is ordered to pay a pecuniary penalty under a civil remedy provision in relation to particular conduct, the person is not liable to be ordered to pay a pecuniary penalty under some other provision of a law of the Commonwealth in relation to that conduct.
Note: A court may make other orders, such as an order for compensation, in relation to particular conduct even if the court has made a pecuniary penalty order in relation to that conduct (see subsection 546(5)).
The applicant concedes that Mr Moses, Mr Churchman and the CFMEU should only each be dealt with for a contravention of one of the provisions identified in the declarations and that s.556 prevents the imposition of more than one penalty on each respondent in the circumstances of this case.
The applicant submits that the penalty ought to be imposed for the contravention of s.348, being the most serious of the three contraventions and that the applicant may elect from the available penalty provisions that which should be the vehicle for the imposition of the single penalty: Canturi v Sita Coaches Pty Ltd (2002) 116 FCR 276 at [84].
I accept the applicant’s submissions in that regard. I will impose a penalty upon each respondent for a contravention of s.348 of the Fair Work Act. However, in doing so, it is appropriate to have regard to the overall conduct of each respondent, including the fact that the action in which the respondents engaged, or are taken to have engaged, contravened multiple civil penalty provisions even though only one penalty relating to the contravention of one civil penalty provision is being imposed: Canturi v Sita Coaches Pty Ltd at [86], United Group Resources Pty Ltd v Calabro (No 7) (2012) 203 FCR 247, 276 [83]-[85].
One further issue arises on the arguments made by each party. The applicant contends that the CFMEU is liable to the imposition of two penalties: one by reason of Mr Moses’ contravention and one by reason of Mr Churchman’s contravention. The respondents argue that the CFMEU is only liable to one penalty for Mr Moses’ conduct, but not Mr Churchman’s conduct. The issue between the parties turns upon the work that is done by s.793 of the Fair Work Act because it is by reason of that section that the CFMEU is liable for the conduct of its officers and delegates.
The respondents’ argument points me to Director of the Fair Work Building Industry Inspectorate v Robinson [2016] 241 FCR 338, where Charlesworth J held:
[48] Section 793 does not, of itself, fix upon a body corporate liability for contraventions found to have been committed by its officers, employees or agents. Rather, it attributes to the body corporate the conduct and state of mind of its officers, employees and agents in prescribed circumstances. The question of whether the body corporate has contravened the FW Act (and, if so, on how many occasions) must be answered by assessing the facts, namely the conduct and state of mind attributed to the body corporate, against the elements of the contravention said to have been committed by it.
…
[50] The second thing to be said about s 793 arises from my earlier observation that it does not directly operate to fix liability for a contravention on a body corporate; it is not to be regarded as a codification of the doctrine of vicarious liability: cf Trade Practices Commission v Tubemakers of Australia Ltd (No 2) (1983) 76 FLR 455 (at [474]-[475]), 47 ALR 719 (at 739) (Toohey J). The mere fact that two employees of the CFMEU have each contravened the FW Act does not of itself, demand the conclusion that the CFMEU is liable for two contraventions.
[51] The conduct attributed to the CFMEU by the operation of s 793(1) comprises the conduct of the Yarrawonga meeting and the words spoken there, together with the conduct of the Airport meeting and the words spoken there …
[52] The Director's pleaded case referred to the ‘Yarrawonga Industrial Action’ and the ‘Airport Industrial Action’ to delineate between the organising conduct of each individual respondent. However, on examining the CFMEU's conduct as a whole, I find that it organised a single instance of industrial action, namely, the O'Rourke employees' refusal to attend work on 19 June 2014 …
In Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (The Yarra's Edge Case) [2016] FCA 772, Jessup J considered s.69 of the Building and Construction Industry Improvement Act 2005 (Cth), an equivalent of s.793 of the Fair Work Act and said:
[19] All of the organisers were employees of the CFMEU, and thus officers by the operation of s 69(3). Their conduct was attributed to the CFMEU. It does not follow, however, that the CFMEU contravened s 38 as many times as the organisers in total did. This provision had an effect which differed in an important way from s 48(2): it was the conduct, not each contravention, which was attributed to the building association (see Director of the Fair Work Building Industry Inspectorate v Robinson [2016] FCA 525 at [50]). Having attributed the conduct, the question remains: did that conduct amount to engagement in unlawful industrial action within the meaning of s 38, and if so, to how many separate instances thereof? On the facts of the present case, it would, in my opinion, be artificial to regard the conduct of the CFMEU as having amounted to a separate engagement in industrial action in respect of the conduct of each of the five organisers concerned … I would hold, therefore, that the CFMEU contravened s 38 of the BCII Act once.
In Australian Building and Construction Commissioner v Pauls [2017] FCA 843, Rangiah J considered the approach of Charlesworth J and Jessup J as set out above and said:
[48] Similarly, it is the conduct of Pauls, Steele and Bland that is attributed to the CFMEU by the operation of s 793 of the Act, not each of their contraventions. The Commissioner's pleading alleges that Pauls and Steele attended the Southpoint, Velodrome, RMH and Newstead Projects and organised meetings of the subcontractors' employees there and encouraged, organised for, instructed or counselled those employees to not perform work. The only differentiation drawn by the Commissioner's pleading between Pauls' and Steele's conduct is as to the words they used to explain why the industrial action was being taken, but I have found that distinction to be of no significance. It would be artificial to regard the conduct of Pauls and Steele at the four projects they attended as amounting to two separate contraventions by the CFMEU at each of those projects. I accept the respondents' submission that the CFMEU must be taken to have engaged in only one contravention at each of the four sites attended by Pauls and Steele to the extent that the Commissioner relies on s 793.)
In contrast to that approach is the approach taken by Besanko J in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 3) [2017] FCA 10:
33. There were two threats in this case, one by Mr Cartledge and the other by Mr McDermott. No doubt they were closely related, as I have indicated, but they remain two threats. I accept that s 363(1) of the FW Act does not in terms attribute the contraventions to the CFMEU and that it is the actions of Mr Cartledge and Mr McDermott which are attributed to the CFMEU. Nevertheless, those actions involved two threats. Once that conclusion is reached, it is not clear to me by what process of reasoning or principle a court would be entitled to say that for attribution purposes there was one contravention rather than two, or by reference to what principle a court would be able to distinguish between cases involving one contravention as distinct from two contraventions. It might be different if the words of the provision contravened made it clear that there could be only one contravention. Otherwise, in my opinion, the course of conduct or single course of conduct considerations are reflected in one of the other three approaches where applicable. I would also note it may be that the presence of s 557 of the FW Act and the limitations on its scope in s 557(2) of the FW Act bears upon the problem in the case of civil remedy provisions not referred to in s 557(2) of the FW Act. I do not think the first approach can be taken in the case of s 343(1) of the FW Act.
However, the facts of the present case distinguish it from the authorities I have just mentioned. Here there is one principal offender, one accessory and the Union which is fixed with the actions of both.
Section 793 of the Fair Work Act is in the following terms:
793 Liability of bodies corporate
Conduct of a body corporate
(1) Any conduct engaged in on behalf of a body corporate:
(a) by an officer, employee or agent (an official) of the body within the scope of his or her actual or apparent authority; or
(b) by any other person at the direction or with the consent or agreement (whether express or implied) of an official of the body, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the official;
is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body.
State of mind of a body corporate
(2) If, for the purposes of this Act or the procedural rules, it is necessary to establish the state of mind of a body corporate in relation to particular conduct, it is enough to show:
(a) that the conduct was engaged in by a person referred to in paragraph (1)(a) or (b); and
(b) that the person had that state of mind.
Meaning of state of mind
(3) The state of mind of a person includes:
(a) the knowledge, intention, opinion, belief or purpose of the person; and
(b) the person’s reasons for the intention, opinion, belief or purpose.
Disapplication of Part 2.5 of the Criminal Code
(4) Part 2.5 of Chapter 2 of the Criminal Code does not apply to an offence against this Act.
Note: Part 2.5 of the Criminal Code deals with corporate criminal responsibility.
(5) In this section, employee has its ordinary meaning.
As the authorities to which I have just referred point out, s.793 is concerned with attributing conduct (which might also include omissions) and the state of mind of various persons to a body corporate. It operates differently to s.550(1) which requires that a person who is involved in a contravention of a civil remedy provision be taken to have contravened that provision in the circumstances prescribed by that subsection. That is to say, s.793 is concerned with attributing conduct and the other matters dealt with by that section to a body corporate, not the contravention itself.
In the present case Ms Moses’ conduct is taken to have been engaged in by the CFMEU. Those actions, without more, amount to a contravention of s.348 of the Act by Mr Moses and the CFMEU given that it is to be taken to have engaged in them as well as Mr Moses. The CFMEU has direct liability for the contravention as a principal.
The CFMEU is also taken to have engaged in the actions taken by Mr Churchman. His actions without more however, do not amount to a contravention of s.348 of the Act. His actions, because they meet the descriptions set out in s.550(2)(a) and 550(2)(c) of the Act, mean that he is to be taken to have contravened that provision, even though his actions, when viewed on their own, do not contravene s.348 of the Act.
Mr Churchman’s actions lead him to have accessorial liability for Mr Moses’ contraventions. His actions are attributable to the CFMEU, and arguably therefore attract to the CFMEU accessorial liability for Mr Moses’ contraventions. But it is accessorial liability for a contravention which the CFMEU is also taken to have committed as a principal because it is fixed with Mr Moses’ conduct. On the applicant’s argument, the CFMEU would have accessorial liability for a contravention that it is taken to have committed as a principal. Such a result is plainly curious to say the least and not one which I consider is intended by s.793 of the Act. I will impose one penalty upon the CFMEU as the respondents contend, not two.
The maximum penalties that applied for a contravention of s.348 at the time of the contravention found in this case were:
a)$10,200 (60 penalty units) for individuals; and
b)$51,000 (300 penalty units) for a body corporate.
The applicant submits that the appropriate penalties for the found contravention of s.348 of the Act ought to be:
a)for Mr Moses, $6,630 or 65% of the maximum;
b)for Mr Churchman, $4,080 or 40% of the maximum; and
c)for the CFMEU, $91,800 or 90% of the maximum.
The respondents submit that the appropriate penalties for the found contravention ought to be:
a)for Mr Moses, a mid-range penalty in the order of $3,500 - $4,500;
b)for Mr Churchman, a mid-range penalty in the order of $2,000 - $3,000; and
c)for the CFMEU, a high range penalty in the order of $37,000 -$42,000.
I accept that the contravention in this case was serious. It involved a flagrant disregard of workplace rights and the freedoms of association guaranteed under the Fair Work Act.
Mr Moses, the principal actor in the contravention, had become an organiser for the CFMEU only shortly prior to the contravention. He was an employee of the CFMEU and the contravention was committed in the course of his employment. His evidence at the liability hearing established, however, that he knew that the things that I found him to have said to the assembled workers were false. The enthusiasm of a new role with the third respondent does not mitigate the contravention in those circumstances.
Mr Churchman also gave evidence that he knew what Mr Moses was saying was not correct, yet he did nothing to correct Mr Moses’ statements. His position was that of a site delegate, employed by a company engaged on the relevant work site. The respondents suggested that Mr Moses was a more senior office holder of the CFMEU. I do not know if that is strictly correct because there was no evidence about the hierarchy of officials within the CFMEU, but it is certainly the case that Mr Churchman took a passive role in the conduct which constituted the contraventions. His wrongdoing extended to remaining silent and offering implicit support.
In that sense, then, the contraventions were deliberate and not accidental. I accept that the conscious and deliberate nature of the contravention make it serious because of the first and second respondents’ deliberate disregard of the law.
The respondents point out that the threats made by Mr Moses to the assembled workers were not acted upon. I take that into account in respect of each respondent. It is relevant to note that a couple of weeks after the relevant events, one of the workers who was present joined the CFMEU.
There is no evidence to suggest that Mr Moses has been found to have previously contravened any relevant provisions of the Fair Work Act. So too, Mr Churchman.
Moreover, there is no evidence that the conduct has been repeated since the events the subject of these proceedings.
There is no suggestion that any relevant party suffered any loss as a result of Mr Moses’ actions and Mr Churchman’s inaction. I take that into account.
Nonetheless, the applicant submits that there is a recognised need for protection of industrial freedom of association.
I accept that the coercion contravention is particularly significant. In Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2016] FCA 436, Mortimer J commented at [136]:
Coercion and intimidation as methods of achieving desired ends can occur in many walks of life, not only in industrial activity. Such conduct involves abuse, and misuse, of power. Coercive and intimidatory conduct is part of an ‘end justifies the means’ way of thinking which is frequently inconsistent and incompatible with the rule of law. The Court by its civil penalty orders should make it clear that coercion and intimidation contrary to law will not be tolerated and will be the subject of sanctions. Significant penalties are required to give some public confidence that those who administer the law will not condone coercive and intimidatory conduct, in this case in the sphere of industrial activity, but also more generally.
These remarks underscore the seriousness of the coercion contravention in respect of which I must assess a penalty in this case.
The respondents have shown no contrition for their actions. No apology has been issued by any of the respondents, nor has there been any acknowledgement of any wrongdoing. Whilst this is not an aggravating circumstance that might increase the penalty, it precludes any mitigation of penalty on that basis. It is also relevant to the role of specific deterrence in this particular case.
The applicant submits that in the present case both general and specific deterrence are relevant and important considerations. I agree.
The first and second respondents are officials within the CFMEU. Their role requires a proper understanding of the limits of the conduct in which they might engage for industrial purposes. The community generally, and the workers on any given workplace where the CFMEU is active more specifically, are entitled to expect that officers of the CFMEU such as the first and second respondents know the limits of their authority.
There is no evidence that either the first or second respondents have resigned their positions with the CFMEU, or that either of them have ceased to be active in industrial relations more generally. I accept that there is a need in this case for specific deterrence.
The CFMEU is a large and well-established organisation. It has an extensive litigation history, both as an applicant seeking to enforce compliance with industrial laws, often successfully, and more notoriously as a respondent or defendant to proceedings in which the CFMEU and its officers have been found to have contravened industrial laws. It is highly active in the industrial sphere. Specific deterrence is relevant to the penalty to be imposed upon the CFMEU in this case.
As part of his submissions, the applicant provided a schedule of some 123 decisions made between 2003 and 2017 in which a penalty has been imposed upon the CFMEU for a contravention of industrial legislation. Not all of those matters, however, are relevant for present purposes.
Counsel for the respondents quite properly pointed out that the CFMEU has a prior history in respect of threats being made to employees about joining that union. Counsel identified at least seven and perhaps eight previous matters in which conduct similar to that in this case was dealt with by a court. The most recent example is ABCC v Barker and Anor [2017] FCCA 1143.
However, reference to other cases decided upon different facts is not particularly helpful where the task of the Court is to assess the gravity of the relevant conduct in the case before it and assess a penalty which is both proportionate and reflective of the gravity of the contravention concerned.
The penalties to be imposed also need to have a general deterrent effect. They need to be set at a level sufficient to deter other union officials from engaging in the same type of behaviour as has been found to have occurred here.
The contraventions were both blatant and serious, and were committed by individuals and entities in responsible positions who are still active in the industrial relations sphere.
The applicant requests that any pecuniary penalty be paid to the Commonwealth.
In my view, the following are appropriate penalties in the circumstances of this case:
a)In respect of the first respondent Mr Moses - $5,500;
b)In respect of the second respondent Mr Churchman - $4,000;
c)In respect of respect of the third respondent the CFMEU - $45,000.
I make the orders set out at the commencement of these reasons.
I certify that the preceding forty-seven (47) paragraphs are a true copy of the reasons for judgment of Judge Jarrett delivered on 9 November, 2017.
Date: 9 November, 2017
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