Australian Building and Construction Commissioner v Pauls

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FEDERAL COURT OF AUSTRALIA

Australian Building and Construction Commissioner v Pauls [2017] FCA 843

File number: QUD 831 of 2016
Judge: RANGIAH J
Date of judgment: 28 July 2017
Catchwords: INDUSTRIAL LAW – respondents organised industrial action in contravention of ss 355 and 417 of the Fair Work Act 2009 (Cth) – respondents admit allegations – whether contraventions arose out of two or six courses of conduct – how many findings of contravention and declarations to be made – quantum of pecuniary penalties – declarations made and penalties determined
Legislation:

Building and Construction Industry Improvement Act 2005 (Cth) ss 39, 43 and 69

Evidence Act1995 (Cth) s 140(2)

Fair Work Act 2009 (Cth) ss 355, 417, 545, 546, 550, 556, 557, 793 and Part 4-1

Workplace Relations Act1996 (Cth)
Cases cited:

Australian Building and Construction Commission v Construction, Forestry, Mining and Energy Union (the Kane Constructions Case) (No 2) [2017] FCA 368

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 53

Australian Competition and Consumer Commission v Construction, Forestry, Mining and Energy Union [2007] ATPR 42-140; [2006] FCA 1730

Commonwealth v Director of Fair Work Building Industry Inspectorate (2015) 326 ALR 476; [2015] HCA 46

Construction, Forestry, Mining and Energy Union v Cahill (2010) 269 ALR 1; [2010] FCAFC 39

Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 353

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 Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 407

Director of the Fair Work Building Industry Inspectorate v Robinson [2016] 241 FCR 338

Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2013] FCCA 2130

Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2013] FCA 846

Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080

Plancor v Liquor Hospitality and Miscellaneous Union (2008) 171 FCR 357

Rural Press Ltd v Australian Competition and Consumer Commission (2003) 216 CLR 53

Trade Practices Commission v CSR Ltd (1991) ATPR 41-076

Veen v The Queen (1988) 164 CLR 465
Date of hearing: 7 June 2017
Registry: Queensland
Division: Fair Work Division
National Practice Area: Employment & Industrial Relations
Category: Catchwords
Number of paragraphs: 75
Counsel for the Applicant: Mr M Steele
Solicitor for the Applicant: Minter Ellison
Counsel for the Respondents: Mr CA Massy
Solicitor for the Respondents: Hall Payne Lawyers
Table of Corrections
4 August 2017 In the sixth sentence of paragraph 71, the word “simple” has been replaced with the word “single”.

ORDERS

QUD 831 of 2016
BETWEEN:

AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER

Applicant
AND:

KURT PAULS

First Respondent

JUSTIN STEELE

Second Respondent

EDDIE BLAND (and another named in the Schedule)

Third Respondent

JUDGE:

RANGIAH J

DATE OF ORDER:

28 JULY 2017

THE COURT DECLARES THAT:

1.On 19…

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Details
Case
[2017] FCA 843
Decision Date

CaseChat Overview and Summary

In the case of Australian Building and Construction Commissioner v Pauls, the Fair Work Ombudsman, acting through the Australian Building and Construction Commissioner, filed a claim against Pauls, Steele, Bland, and the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) for contraventions of sections 355 and 417 of the Fair Work Act 2009 (Cth). The respondents admitted to the allegations made in the Commissioner's statement of claim, which pertained to industrial action organised by the respondents at six construction sites in Brisbane. The primary legal issues the court had to address were the number of contraventions to be found, the applicability of section 557 of the Fair Work Act, and the quantum of pecuniary penalties to be imposed.

The court considered the submissions of the respondents that the contraventions should be treated as a single contravention under section 557 of the Fair Work Act, which states that two or more contraventions of certain civil remedy provisions are taken to constitute a single contravention for the purposes of the Act. The respondents argued that this section applied to both the findings of contravention and the declarations to be made. However, the court rejected this argument, finding that section 557(1) primarily governs the imposition of penalties and does not affect the number of findings of contravention that can be made. The court noted that the section describes how multiple contraventions are to be treated for the purposes of orders under section 545 and penalties under section 546, but does not limit the number of contraventions that can be found. Therefore, the court found that the contraventions by each respondent were distinct and warranted separate findings.

The court subsequently determined the quantum of the pecuniary penalties. It found that the contraventions by Pauls, Steele, and Bland warranted a penalty of $10,000 each for their individual contraventions of sections 355 and 417. Given that the CFMEU was vicariously liable for the actions of its officials, it was also ordered to pay a penalty of $10,000 for each of the individual contraventions. However, because the CFMEU was the head contractor for the projects, and its contraventions were more serious, it was ordered to pay a penalty of $50,000 for each contravention, totaling $100,000.

The court made its orders pursuant to the submissions and the admitted facts. Each respondent was ordered to pay their respective penalties to the Commonwealth of Australia within 30 days. The court's reasoning was based on the seriousness of the contraventions and the role of each respondent in organising the industrial action. The court found that the actions taken by the respondents were deliberate and intended to coerce the employer to not engage subcontractors that were not covered by an enterprise agreement that covered the CFMEU.

Orders

Orders of the court

5. The first respondent pay a pecuniary penalty of $10,000 for his contraventions of ss 355 and 417 of the FWA.

6. The second respondent pay a pecuniary penalty of $10,000 for his contraventions of ss 355 and 417 of the FWA.

7. The third respondent pay a pecuniary penalty of $10,000 for his contraventions of ss 355 and 417 of the FWA.

8. The sixth respondent pay two pecuniary penalties of $50,000, a total of $100,000, for its contraventions of ss 355 and 417 of the FWA.

9. The penalties referred to in orders 5-8 above be paid to the Commonwealth of Australia within 30 days.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

I will discuss the facts, the legislation and the principles relevant to determination of the appropriate penalties before considering the issues in dispute. THE FACTS The Commissioner relies upon his further amended statement of claim. In their amended defence, the respondents admit each of the allegations made in the further amended statement of claim. The parties have not called any evidence. Accordingly, the facts are to be ascertained from the pleadings alone. Watpac Construction Pty Ltd (Watpac) was the head contractor for six construction projects in Brisbane. These projects are described as the Southpoint Project, the Velodrome Project, the RMH Project, the Newstead Project, the Pullman Ibis Project and the Mary Street Project. Pauls, Steele and Bland are employees, officers and officials of the CFMEU. At about 6 am on 19 August 2016, Pauls and Steele attended the Southpoint Project and proceeded to convene a meeting with employees of various subcontractors. Pauls and Steele encouraged, organised for, instructed or counselled the employees to cease or not perform work. As a consequence, the employees left the site and did not perform work for the remainder of that day and the next day. Pauls and Steele repeated their conduct at about 6.45 am on 19 August 2016 at the RMH Project in Brisbane, at about 8 am at the Velodrome Project and at about 9.10 am at the Newstead Project. At the Newstead Project, one of Watpac’s employees, as well as the employees of various subcontractors, attended the meeting. At each project, the employees left the site and did not work for the rest of the day and the next day. At about 6 am on 19 August 2016, Bland attended the Pullman Ibis Project site and at about 8.15 am on 19 August 2016, he attended the Mary Street Project. At each project, Bland convened a meeting with employees of Watpac and various subcontractors. The employees left the site after each meeting and did not work for the remainder of that day and the next day. The Commissioner pleads, and the respondents admit, that:(a)Pauls and Steele organised action against Watpac at the Southpoint Project, the RMH Project, the Velodrome Project and the Newstead Project in contravention of s 355 of the FWA; (b)Bland organised action against Watpac at the Pullman Ibis Project and the Mary Street Project in contravention of s 355 of the FWA; (c)by the operation of s 550 of the FWA, the CFMEU also contravened s 355 of the FWA;(d)Pauls and Steele organised the stoppages of work at the Southpoint Project, the RMH Project and the Velodrome Project (but not the Newstead Project) in contravention of s 417 of the FWA;(e)Bland organised the stoppages of work at the Pullman Ibis Project and the Mary Street Project in contravention of s 417 of the FWA;(f)by the operation of ss 793 and/or 550 of the FWA, the CFMEU also contravened s 417. In respect of each contravention of s 355 of the FWA, the Commissioner alleges, and the respondents admit, that Pauls, Steele and Bland acted “with intent to coerce Watpac to not engage Subcontractors that were or are not covered by an Enterprise Agreement that covered or covers the CFMEU”. Those subcontractors included Wagstaff, Micos, Austral and Wideform.THE LEGISLATION

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

Further, the four contraventions of s 355 by Pauls and Steele fall within the “course of conduct” or “one transaction” principle. So too do the two contraventions of s 355 by Bland.How many findings of contraventions of ss 355 and 417 of the FWA and declarations should be made against Pauls, Steele and Bland? The respondents submit that s 557 of the FWA also operates upon the number of findings of contravention of s 417 that should be made and how many declarations should be made. They submit that in circumstances where Pauls’, Steele’s and Bland’s conduct at each of the projects was part of a course of conduct engaged in by each of them, there should only be one finding of contravention of s 417 and one declaration reflecting that contravention in respect of each of them. The Commissioner has not made any response to the respondents’ submission on that issue. In support of their submission, the respondents refer to Australian Building and Construction Commission v Construction, Forestry, Mining and Energy Union (the Kane Constructions Case) (No 2) [2017] FCA 368, where Jessup J said:[6]Counsel for the respondents submitted that…s 557 operated only for the purposes of the imposition of penalties and that it was irrelevant to, and had no part to play in, the anterior point at which the court made its findings of contravention. I do not accept that submission. Section 557 of the FW Act operates for the purposes of Pt 4-1, not only for the purposes of s 546. It governs the findings available in a proceeding commenced under s 539(2), whatever may be the remedial outcomes either sought or granted. Under s 557(1) of the FWA, “2 or more contraventions” of certain civil remedy provisions are “taken to constitute a single contravention” in the circumstances set out in the section. The section starts from the premise that there have been two or more contraventions of a single civil penalty provision. The provision does not operate unless there are findings by a court that a person has engaged in two or more contraventions of a relevant provision. Therefore, the respondents’ submission s 557(1) operates such that there can only be a finding of a single contravention cannot be accepted. Section 557(1) describes how two or more findings of contraventions of a civil remedy provision are to be treated in the circumstances described in the provision. As Jessup J observed in the Kane Constructions Case at [6], such contraventions are taken to constitute a single contravention “for the purposes of Part 4-1”. Part 4-1 of the FWA includes s 545(1), which provides for the Court to make any order it considers appropriate if the Court is satisfied that a person has contravened a civil remedy provision. The orders that may be made include declarations. Section 546(1), which allows the Court to order that a person pay a pecuniary penalty, is also found in Pt 4-1. Therefore, under s 557(1), two or more contraventions of a relevant civil penalty provision must be taken to be a single contravention of the provision for the purposes of any order made under s 545 and any pecuniary penalty imposed under s 546. Where s 557(1) applies, only a single pecuniary penalty may be imposed. It also follows that where s 557(1) applies, only a single declaratory order would usually be made under s 545(1) in respect of the single contravention. However, I would not foreclose the possibility that it might be appropriate to make more than one declaratory order in respect of a single contravention in an appropriate case.