Australian Building and Construction Commissioner v Myles and Ors (No.2)
[2019] FCCA 1932
•12 July 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER v MYLES & ORS (No.2) | [2019] FCCA 1932 |
| Catchwords: INDUSTRIAL LAW – Imposition of pecuniary penalties – taking unprotected industrial action. |
| Legislation: Fair Work Act 2009 (Cth), ss.19(1)(c), 417, 546(3), 557(1), 557(1)(b), 557(2) |
| Cases cited: ABCC v CFMEU [2018] HCA 3 |
| Applicant: | AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER |
| First Respondent: | MICHAEL MYLES |
| Second Respondent: | RYAN WHAKARURU |
| Third Respondent: | DUNCAN MCALLISTER |
| Fourth Respondent: | KEVIN GRIFFIN |
| Fifth Respondent: | CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
| File Number: | BRG 1165 of 2014 |
| Judgment of: | Judge Jarrett |
| Hearing date: | By written submission |
| Date of Last Submission: | 24 April 2019 |
| Delivered at: | Brisbane |
| Delivered on: | 12 July 2019 |
REPRESENTATION
| Solicitors for the Applicant: | Australian Building and Construction Commissioner |
| Counsel for the Second Respondent: | Mr Reitano |
| Solicitors for the Second Respondent: | Hall Payne Lawyers |
ORDERS
In respect of the second respondent’s contravention of s.417 of the Fair Work Act2009 (Cth) constituted by his engagement in industrial action when he refused to perform work on 11 September, 2014 at the QUT Project Site at Kelvin Grove in Queensland while he was covered by the John Holland Queensland Pty Ltd Building and Construction Enterprise Agreement (QLD & NT) 2012 – 2016, the second respondent pay a pecuniary penalty of $3,750;
In respect of the second respondent’s contravention of s.417 of the Fair Work Act 2009 (Cth) constituted by his engagement in industrial action when he refused to perform work on 12 September, 2014 at the QUT Project Site at Kelvin Grove in Queensland while he was covered by the John Holland Queensland Pty Ltd Building and Construction Enterprise Agreement (QLD & NT) 2012 – 2016, the second respondent pay a pecuniary penalty of $3,750;
The penalties imposed by orders (1) and (2) hereof be paid to the Commonwealth of Australia within 28 days of the date of these orders.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT BRISBANE |
BRG 1165 of 2014
| AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER |
Applicant
And
| MICHAEL MYLES |
First Respondent
| RYAN WHAKARURU |
Second Respondent
| DUNCAN MCALLISTER |
Third Respondent
| KEVIN GRIFFIN |
Fourth Respondent
| CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
Fifth Respondent
REASONS FOR JUDGMENT
These reasons concern the imposition of pecuniary penalties upon the second respondent for engaging in unprotected industrial action in breach of s.417 of the Fair Work Act 2009 (Cth). The unprotected industrial action occurred on a construction site for the redevelopment of the Queensland University of Technology campus at Kelvin Grove, Brisbane. The project involved the demolition and refurbishment of existing buildings and the construction of a new building at Kelvin Grove in Queensland, Brisbane.
The second respondent contravened s.417 of the Fair Work Act 2009 (Cth) by engaging in unprotected industrial action when he refused to perform work for his employer on 11 and 12 September, 2014 at the project site while he was covered by the John Holland Queensland Pty Ltd Building and Construction Enterprise Agreement (QLD & NT) 2012 – 2016.
At the relevant time, Mr Whakaruru was employed as a construction worker by John Holland Queensland Pty Ltd, the principal contractor on the QUT Project. He worked at the site as a traffic controller, hoist driver and labourer. He was also an elected delegate of the then Construction, Forestry, Mining and Energy Union.
The contraventions arose out of an industrial dispute between workers at the QUT Project and John Holland in September, 2014. The dispute related to the belief amongst some of the workers on site that John Holland’s Project Safety Advisor had provided certain personal details of some workers to the Fair Work Building and Construction Commission, as the applicant was then known, without the workers’ knowledge or consent. I have set out some more details relating to the dispute later in these reasons.
The contraventions
Section 417 of the Fair Work Act relevantly provides:
(1) A person referred to in subsection (2) must not organise or engage in industrial action from the day on which:
(a) an Enterprise Agreement is approved by the FWC until its nominal expiry date has passed; or
(b) a workplace determination comes into operation until its nominal expiry date has passed;
whether or not the industrial action relates to a matter dealt with in the agreement or determination.
(2) The persons are:
(a) an employer, employee, or employee organisation, who is covered by the agreement or determination; or
(b) an officer of an employee organisation that is covered by the agreement or determination, acting in that capacity.
The enterprise agreement covering John Holland and the CFMEU had not reached its nominal expiry date at the time Mr Whakaruru refused to perform work for his employer.
A failure or refusal by employees to attend for work or a failure or refusal to perform any work at all by the employees who attend for work is Industrial action for the purposes of the Fair Work Act: s.19(1)(c) of the Act. Mr Whakaruru’s refusal to perform any work for his employer on 11 and 12 September, 2014 was industrial action for the purposes of the Act. The taking of that industrial action was a contravention of s.417 of the Fair Work Act. He contravened the Act twice, once on 11 September, and then again on 12 September.
Some background to the contraventions
On 10 September, 2014 two CFMEU officials, Michael Myles and Adam Olsen, entered the QUT Project site and were escorted by Mr Whakaruru to the office of John Holland’s Construction Project Manager, Peter Kazaglis. Mr Myles questioned Mr Kazaglis as to whether he knew if anyone had supplied induction records to the FWBC and whether a specific officer of John Holland was responsible for the provision of that information. Mr Kazaglis told Mr Myles that he did not know anything about it.
John Holland’s Operations Manager, Colin Matthews, set out John Holland’s response to matters raised by Mr Myles and emailed it to John Holland’s Site Manager, Victor Van der Rhede during the evening of 10 September, 2014.
On 11 September, 2014 another of John Holland’s Construction Project Managers, Jeffrey Lacoste, tasked Mr Van der Rhede with conveying to the workers at the QUT Project site John Holland’s response to the claim that workers’ details had been provided to FWBC. Subsequently, at about 5:45am that day, Mr Van der Rhede met with Mr Whakaruru in Mr Van der Rhede’s office. Mr Van der Rhede read out John Holland’s response to Mr Myles’ concerns that had been raised the previous day. Mr Whakaruru advised Mr Van der Rhede that Mr Myles was coming to the site later that day and that he should show Mr Myles the email.
Between 5:30am and 6:00am, the CFMEU delegate for one of the subcontractors working on the QUT Project Site, Duncan McAllister, began advising employees of a union meeting to be held at 6:30am that day. He told workers of the meeting as they approached the entrance to the site.
At or about 6:23am, Mr Myles arrived at the site. Mr Van der Rhede approached him and read out John Holland’s response to the issues Mr Myles had raised the day before. Mr Myles stated that he still had to address the members. By this time, approximately 50 workers had gathered in a group. Mr Myles addressed the assembled group for about 10 minutes. The workers were observed by Mr Van der Rhede raising their hands. Mr Kazaglis and Mr Van der Rhede observed the gathering disperse and the workers walk back to the crib rooms and start collecting their personal belongings before leaving the site.
Mr Whakaruru admits that he left the site and performed no work on 11 September, 2014 following the meeting.
On 12 September, 2014 Mr Whakaruru and Mr Kazaglis met at about 5:45am. Mr Whakaruru asked Mr Kazaglis whether John Holland would provide a letter stating that it would refuse to willingly provide contact details of employees on the QUT Project site to the FWBC. Mr Kazaglis told him that John Holland would not provide such a letter.
Later, at about 6:00am that day, between 70 and 80 employees who were scheduled to work on the site that day assembled in the QUT Project site carpark. Mr Myles again attended the carpark and began conversing with the employees. At or about 6:30am, Mr Kazaglis addressed the assembly of employees and told them that John Holland refused to provide a letter stating that it would refuse to willingly provide contact details of employees on the QUT Project site to the FWBC as requested by Mr Whakaruru.
Mr Myles again addressed the assembled employees. Soon thereafter, the workers who were addressed by Mr Myles left the QUT Project site and did not perform any work that day. At about 7:30am, representatives of John Holland asked Mr Myles to leave the QUT Project site because he refused to provide details about his right to enter the site. He did not leave and at about 9:50am, Mr Myles was directed by officers of the Queensland Police Service to leave the site. At about 10:00am, Mr Myles, Mr Whakaruru and Mr McAllister left the site.
Mr Whakaruru admits that he left the site and performed no work on 12 September, 2014 for his employer.
Penalty
The primary purpose for the imposition of pecuniary penalties under the Fair Work Act is deterrence: ABCC v CFMEU [2018] HCA 3 at [116]; Commonwealth of Australia v Director of the FWBII (2015) 258 CLR 482 at 506 [55]. The task is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions occurred and the need to sustain public confidence in the statutory regime which imposes the obligations.
The maximum penalty applicable to the contraventions committed by Mr Whakaruru was $10,200 for each contravention.
Multiple contraventions
Subsection 557(1) of the Fair Work Act has the effect of treating multiple contraventions of, amongst other sections, s.417 of the Act as a single contravention. That is the combined effect of ss.557(1) and 557(2) of the Act. For s.557(1) to operate, however, two conditions must be satisfied, namely:
a)the contraventions were committed by the same person; and
b)the contraventions arose out of a course of conduct by the person.
The applicant contends that Mr Whakaruru does not receive the benefit of s.557(1) of the Act because his conduct does not arise out of a course of conduct for the purposes of s.557(1)(b) of the Act. Mr Whakaruru argues that there is no reason why the Court would not regard his contraventions as a single contravention under s.557(1) of the Act notwithstanding that it occurred on two consecutive days.
The applicant argues that Mr Whakaruru’s conduct reveals two discrete contraventions arising from separate acts on separate days. He made two conscious and separate, albeit related decisions to engage in unlawful industrial action – one on each day. I accept the applicant’s submission that it is significant that there was no statement of intent by Mr Whakaruru that he would engage in work stoppages for a defined period of time. His decisions were discrete events, informed by different considerations on each day.
I am satisfied that I should treat Mr Whakaruru’s contraventions as two separate and discrete contraventions of s.417 of the Act. Section 557(1) does not apply in this case so as to require the Court to treat the two contraventions as one.
Nature and extent of the relevant conduct
Mr Whakaruru’s conduct in this case was part of a two day action which was instigated to have another employee of John Holland removed from the QUT Project site due to the belief that the other employee had provided the FWBC with workers’ details without their consent. Whilst it is necessary to recognise in the imposition of any penalty that Mr Whakaruru is not to be punished for the conduct of others, it is appropriate for the penalty to recognise the significance of Mr Whakaruru’s conduct in the context in which it occurred. That context should not be disregarded, although he is not to be held responsible for the actions of others.
Mr Whakaruru took unprotected industrial action on the two days in question. There is no concession or finding that he organised such action to be taken by others. That is important. But so too is the fact that the reason Mr Whakaruru took that action was to support a campaign by others from the CFMEU to have another employee of his employer removed from the QUT Project site. As the applicant submits, that was an attempt to infringe upon John Holland’s right to freely employ workers as it saw fit.
Mr Whakaruru’s actions were deliberate. I accept that as a CFMEU delegate, Mr Whakaruru’s actions were likely to have carried weight amongst the other workers on the QUT Project site.
The nature and extent of any damage sustained as a result of the contraventions
There is no evidence of any financial loss suffered by John Holland or any other entity or person as a result of Mr Whakaruru’s contraventions. Plainly, however, there was some loss of productivity on the work site because Mr Whakaruru was not available to perform his usual duties. But beyond that there is no evidence of any particular loss. As Mr Whakaruru submits, in Australian Competition and Consumer Commission v MSY Technology Pty Ltd & Ors (No.2) (2011) 279 ALR 609; [2011] FCA 382, Perram J observed at [79]:
…if harm is likely to have been suffered by reason of the contravening conduct but no evidence is led which suggests that it was, the respondent is entitled to be sentenced on the basis that the conduct has not caused harm which, plainly enough, will be a mitigating circumstance.
Those remarks were the subject of some explanation by Barker J in Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2016] FCA 798 at [68]:
While the represented respondents submit that the Court should assess the penalty on the basis that there is no evidence of any financial loss, relying on dicta of Perram J in MSY Technology referred to above, it must be said the statutory setting in which his Honour made those observations is different from that here and, in any event, there is clear evidence of prejudice or harm in terms of the conduct of construction activities in this case flowing from the industrial action taken on 4 June 2014. What might be said is that, unless there is further evidence led as to the extent of harm suffered in terms of particular financial loss or damage, the Court should not assume that the harm disclosed was extensive. As the represented respondents say, perhaps more in passing than substantively, the employers relevantly saved on some wages that they would otherwise have had to pay that day. [Emphasis added]
Co-operation and contrition
Mr Whakaruru has shown no contrition for his actions and did not immediately admit the contraventions. He has not apologised for his conduct. In fact, he did not make any admissions about his conduct until the close of the applicant’s case. In that respect, there is nothing in Mr Whakaruru’s submissions that because the vast majority of the issues that were the subject of the liability findings were resolved in favour of the other respondents, Mr Whakaruru’s failure to admit the contraventions, which he now argues in effect were insignificant, should attract no attention. Mr Whakaruru can properly be criticised in the context of the present exercise for his lack of cooperation.
Having said those things, it is right to say that a lack of contrition is not an aggravating circumstance that might increase the penalty.
In the present case, no discount is appropriate. Mr Whakaruru’s admissions were made late in the proceedings and in circumstances where the admissions amount to little more than an acceptance of the inevitable.
Deterrence
General and specific deterrence plays the primary role in the assessment of the appropriate penalty. Penalties must be fixed with a view to ensuring that the penalty is not such as to be regarded by the offender or others as an acceptable cost of doing business: Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 88 ALJR 176 at [66] endorsing Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2010) 287 ALR 249 at [62]. Deterrence is plainly relevant in this matter but it must not lead to a penalty that is beyond the bounds of proportionality.
Mr Whakaruru has a previous history of contravening s.417 of the Fair Work Act. He acknowledges that he was found to have contravened the s.417 of the Act in Australian Building and Construction Commissioner v Ingham (No.2) (The Enoggera Barracks Case) [2018] FCA 263. Those contraventions were not established until 9 March, 2018 some 3.5 years after the events the subject of this proceeding and it is common ground that the conduct the subject of that case took place well before the events the subject of this proceeding. On 9 March, 2018 the Federal Court imposed penalties of $3,500 on Mr Whakaruru in respect of his conduct in the Enoggera Barracks Case. Mr Whakaruru does not submit that he should be treated as a first time contravener.
The applicant submits, and I accept, that Mr Whakaruru is not to be punished again for his earlier conduct but the penalties should be set so as to effectively deter repeat contraventions.
I accept that general deterrence is important in this case so as to deter other individuals from engaging in such unlawful conduct. In ABCC v CFMEU (above) at [116], the High Court observed (footnotes omitted):
As has been observed, the principal object of an order that a person pay a pecuniary penalty under s 546 is deterrence: specific deterrence of the contravener and, by his or her example, general deterrence of other would-be contraveners. According to orthodox sentencing conception as they apply to the imposition of civil pecuniary penalties, specific deterrence inheres in the sting or burden which the penalty imposes on the contravener. Other things being equal, it is assumed that the greater the sting or burden of the penalty, the more likely it will be that the contravener will seek to avoid the risk of subjection to further penalties and thus the more likely it will be that the contravener is deterred from further contraventions; likewise, the more potent will be the example that the penalty sets for other would-be contraveners and therefore the greater the penalty’s general deterrent effect. Conversely, the less the sting or burden that a penalty imposes on a contravener, the less likely it will be that the contravener is deterred from further contraventions and the less the general deterrent effect of the penalty. Ultimately, if a penalty is devoid of sting or burden, it may not have much, if any, specific or general deterrent effect, and so it will be unlikely, or at least less likely, to achieve the specific and general deterrent effects that are the raison d’être of its imposition.
Proposed penalty
The applicant contends that in all the circumstances, penalties in the range of $2,040 to $4,080 (representing 20% to 40% of the maximum penalty) be imposed on Mr Whakaruru for each of the contraventions. This results in an aggregate penalty in the range of $4,080 to $8,160 for the two separate contraventions.
Mr Whakaruru submits that a penalty at the low end of the range is appropriate in the circumstances. A total penalty of between $1,000 and $2,000, for both contraventions, is consistent with the low level offending of the second respondent. He submits that it is also proportionate to his wrongdoing.
To support his submissions, Mr Whakaruru referred to a number of other cases that he submitted were comparable to his and from which I ought to derive so guidance as to the penalty to be imposed upon him. I have had regard to those cases, but the exercise is of little assistance. It is well established that penalties in earlier cases cannot dictate the penalty in a later case and that the penalty to be fixed in one matter cannot be derived from comparing the facts of the case before the court to the facts and circumstances of earlier cases: NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 295; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] 165 FCR 560 at [12]- [13]; ABCC v CFMEU (No.2) (2010) 199 IR 373 at [11] upheld on appeal in McDonald v Australian Building and Construction Commissioner [2011] FCAFC 29.
In my view, penalty of $3,750 for each contravention is appropriate to mark the Court’s disapproval of Mr Whakaruru’s conduct in the context in which it occurred. Penalties fixed in that amount answer the need to be served by the imposition of a penalty, namely specific and general deterrence. They also recognise Mr Whakaruru’s failure to cooperate, his lack of contrition and that he is not a first time contravenor of s.417.
Overall assessment of the appropriate penalties: totality
Having fixed appropriate penalties for the contraventions, I must consider the aggregate penalty to determine whether it is an appropriate response to the conduct which led to the contraventions and that the penalties imposed are not such as to be oppressive or crushing.
The total penalty of $7,500 is, having regard to the facts and circumstances I have outlined above, an appropriate and reasonable aggregate penalty. It is a proportionate response to Mr Whakaruru’s contraventions.
The applicant seeks an order pursuant to s.546(3) of the Fair Work Act that Mr Whakaruru pay the penalties to the Commonwealth of Australia within 28 days of the date of the order. That order is not opposed by Mr Whakaruru.
I make the orders set out at the commencement of these reasons.
I certify that the preceding forty-three (43) paragraphs are a true copy of the reasons for judgment of Judge Jarrett
Associate:
Date: 12 July 2019
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