Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Byrne Trailers Pty Limited
[2009] FMCA 1192
•3 December 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING & KINDRED INDUSTRIES UNION & ANOR v BYRNE TRAILERS PTY LIMITED & ANOR | [2009] FMCA 1192 |
| INDUSTRIAL LAW – Where breaches of provisions of Workplace Relations Act 1996 (Cth) relating to right of entry admitted, agreed statement of facts and penalties proposed by the parties – penalties appropriate in the circumstances of the case – appropriate recipient of penalties. |
| Crimes Act 1914 (Cth), s.4AA Occupational Health and Safety Act 2000 (NSW), s.77 Workplace Relations Act 1996 (Cth), ss.3, 4, 719, 728, 737, 738, 740, 756, 760, 763, 767, 769, 824, 841 Workplace Relations Regulations 2006 (Cth), reg.2.15.1 |
| Alfred v Walter Construction Group Limited [2005] FCA 497 Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) (1999) 94 IR 231; [1999] FCA 1714 Finance Sector Union v Commonwealth Bank of Australia (2005) 147 IR 462; [2005] FCA 1847 |
| First Applicant: | AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION |
| Second Applicant: | AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION – NEW SOUTH WALES BRANCH |
| First Respondent: | BYRNE TRAILER PTY LIMITED (ACN 003 551 371) |
| Second Respondent: | LAURENCE MICHAEL BYRNE |
| File Number: | SYG 317 of 2009 |
| Judgment of: | Barnes FM |
| Hearing date: | 26 November 2009 |
| Delivered at: | Sydney |
| Delivered on: | 3 December 2009 |
REPRESENTATION
| Counsel for the Applicants: | Mr I Latham |
| Solicitors for the Applicants: | Australian Manufacturing Workers Union |
| Counsel for the Respondents: | Ms E Brus |
| Solicitors for the Respondents: | Coleman & Greig |
ORDERS
THE COURT DECLARES THAT:
On Thursday 24 July 2008 the first respondent contravened s.767(3)(a) of the Workplace Relations Act 1996 (Cth) (“the Act”) in that it refused and/or unduly delayed entry to premises by permit holders who were entitled to enter the said premises.
On Tuesday 16 September 2008 the first respondent contravened s.767(3)(a) of the Act in that it refused and/or unduly delayed entry to premises by permit holders who were entitled to enter the said premises.
On Tuesday 16 September 2008 the first respondent contravened s.767(3)(b) of the Act in that it refused and/or unduly delayed entry to premises by permit holders who were entitled to enter the said premises.
On Thursday 24 July 2008 the second respondent contravened s.767(3)(a) of the Act in that he refused and/or unduly delayed entry to premises by permit holders who were entitled to enter the said premises.
On Tuesday 16 September 2008 the second respondent contravened s.767(3)(a) of the Act in that he refused and/or unduly delayed entry to premises by permit holders who were entitled to enter the said premises.
On Tuesday 16 September 2008 the second respondent contravened s.767(3)(b) of the Act in that he refused and/or unduly delayed entry to premises by permit holders who were entitled to enter the said premises.
THE COURT ORDERS THAT:
Pursuant to s.769(1)(a) of the Act, a penalty of $17,000 is imposed on the first respondent in respect of his contraventions of s.767(3)(a) and s.767(3)(b) of the Act.
Pursuant to s.769(1)(a) of the Act, a penalty of $3,000 is imposed on the second respondent in respect of his contraventions of s.767(3)(a) and s.767(3)(b) of the Act
Pursuant to s.841 of the Act, the penalty imposed on the first respondent is to be paid to the first applicant.
Pursuant to s.841 of the Act, the penalty imposed on the second respondent is to be paid to the first applicant.
There be no order as to costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 317 of 2009
| AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION |
First Applicant
| AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION – NEW SOUTH WALES BRANCH |
Second Applicant
And
| BYRNE TRAILERS PTY LIMITED (ACN 003 551 371) |
First Respondent
| LAURENCE MICHAEL BYRNE |
Second Respondent
REASONS FOR JUDGMENT
On 11 February 2009 the applicants filed an application in this court seeking declarations that each of the respondents breached s.767(3)(a) and (b) of the Workplace Relations Act 1996 (Cth) (the WR Act) and that penalties be imposed on each of the respondents pursuant to s.769 of the WR Act. The respondents filed a response on 24 March 2009 opposing the orders sought.
The matter was originally listed for hearing on 24 August 2009. The hearing was adjourned on the application of the respondents. Subsequently it was listed for hearing on 26 November 2009. However at the start of the hearing the court was informed that the parties had reached an agreement about the matters in issue and that the first and second respondents accepted that they had breached s.767 of the WR Act in the manner described in an agreed statement of facts that was tendered. The parties jointly proposed that the first respondent should pay a penalty of $17,000 in respect of its contraventions and that the second respondent should pay a penalty of $3,000, that each of these penalties should be paid to the first applicant and that the court should make no order as to costs.
Counsel for each of the parties made submissions in relation to the agreement and on penalty. Counsel for the respondents also addressed a number of matters which the second respondent had asked should be brought to the court’s attention. The parties accepted that while they had reached an agreement and had jointly proposed particular penalties, it was for the court to determine whether the proposed penalty was “appropriate in the circumstances of the case” (see Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at [53]).
The circumstances of the contraventions in issue are set out in the agreed statement of facts. There is nothing before the court to suggest that it should not rely on that statement of agreed facts.
First, I note that while the WR Act was repealed on 1 July 2009, under the Fair Work (Transitional Provisions And Consequential Amendments) Act 2009 (Cth) the WR Act continues to apply in relation to conduct that occurred before the repeal day (see Schedule 2, clause 11). The admitted breaches in this case occurred in 2008. Hence the WR Act applies.
Part 15 of the WR Act provides that subject to certain conditions being satisfied union officials who are permit holders (see s.740) have a right to enter certain premises in specified circumstances. Relevantly, s.760 provides for a right of entry to hold discussions with employees while s.756 regulates entry by a union official who is seeking to exercise a right of entry under a state or territory occupational health and safety law (“an OHS law”).
The first respondent (a corporation) is a person for the purposes of the WR Act and was the owner of 278 Hammond Avenue, Wagga Wagga, NSW (the “premises”) at all relevant times. The second respondent, Mr Byrne, is a person for the purposes of the WR Act and a director of the first respondent.
The first respondent was not an employer of any staff at the time of the alleged breaches. The employer, and also an occupier of the premises, was L.M. Byrne (A Limited Partnership) and the General Partner of the Limited Partnership was Byrne Group Management Pty Ltd that manages and carries on the business of the Limited Partnership. It is agreed, however, that the first respondent was an occupier of the premises at the time of the alleged breaches.
The work performed by employees on the premises was covered by the Coachmakers, &c., Road (State) and Perambulator Manufactures (State) Award to which the second applicant is a party.
On 23 July 2008 entry notices in respect of Keith Brown and Chip Eling (who are officers and employees of the applicant) were served upon the first respondent. These notices complied with the requirements of s.738 of the WR Act. On that day an employee of the occupier of the premises advised the applicant that there were no eligible employees working at the premises. However on 24 July 2009 Keith Brown and Chip Eling sought to exercise a right of entry pursuant to s.760 of the WR Act to hold discussions with employees.
For entry to be authorised by s.760 of the WR Act the official seeking entry must be a permit holder for an organisation who sought to enter the premises for the purposes of holding discussions with any eligible employees who wished to participate in those discussions and the conditions in s.763 must not be breached. The respondents accept that these conditions were satisfied (i.e., including the requirement of eligible employees) and that Keith Brown and Chip Eling were entitled, pursuant to s.760 of the WR Act, to enter the premises. It is agreed that on 24 July 2008 the first respondent, its agents, directors and/or employees refused and/or unduly delayed the entry of Keith Brown and Chip Eling to the premises.
Subsequently the first applicant notified the Australian Industrial Relations Commission to resolve the dispute as to the right to enter the first respondent’s premises. The first applicant and the respondents appeared in the Commission on 1 September 2008. Both respondents were represented by the second respondent in person. The applicants put a proposal to the respondents to guide further entry to the premises by officers and employees consistent with the relevant provisions of the WR Act. The respondent undertook to consider and respond to this proposal but did not respond.
On the basis that the respondents admit breaches of s.767(3)(a) the parties seek declarations to that effect. The declaration is sought in relation to the second respondent on the basis that he contravened s.767(3)(a) as a person involved in the contravention of a civil remedy provision (see s.767(4) and s.728).
On 2 September 2008 a Mr Lian Rox Xi was injured at the premises of the first respondent. He later died of those injuries. Mr Xi was a Chinese national on a subclass 457 visa. His death was and is the subject of an investigation by Workcover NSW.
On 15 September 2008 entry notices in respect of Chip Eling and Lily Yin that complied with s.738 of the WR Act were served on the first respondent.
On 16 September 2008 Chip Eling and Lily Yin sought to exercise a right of entry pursuant to s.760 of the WR Act and to enter the premises, but the first respondent, its agents, directors and/or employees and the second respondent refused and/or unduly delayed their entry to the premises. The respondents also admit to contraventions of s.767(3)(a) on 16 September 2008.
In addition, on 16 September 2008 David Henry and Chip Eling sought to enter the premises pursuant to s.77 of the Occupational Health and Safety Act 2000 (NSW) (the OHS Act). David Henry was the occupational health and safety officer of the applicant. As explained in written submissions for the applicant, entry was sought to investigate suspected breaches of the OHS Act relating to the recent fatality. Such entry is authorised by s.77 of the NSW legislation which provides that:
An authorised representative of an industrial organisation of employees may, for the purpose of investigating any suspected breach of the occupational health and safety legislation … enter any premises the representative has reason to believe is a place of work where members of that organisation (or persons who are eligible to be members of that organisation) work.
Section 756 of the WR Act imposes conditions on a union official seeking to exercise a right of entry under an OHS law (which by virtue of reg.15.1(1)(a) of Chapter 2 of the Workplace Relations Regulations 2006 (Cth) and s.737 of the WR Act includes the NSW OHS Act). If the conditions in s.756 of the WR Act are not satisfied the union official does not have a right to enter premises to investigate suspected breaches of the OHS law. Those conditions are that the official who sought entry is an official of an organisation who has a right under an OHS law to enter premises and a permit under the WR Act and sought to exercise the right during working hours.
It is not in dispute that on 16 September 2008 an officer David Henry and Chip Eling were entitled pursuant to s.77 of the Occupational Health and Safety Act 2000 (NSW), after satisfying the conditions of s.756 of the WR Act, to enter the Hammond Avenue premises. It is agreed that on that day the first respondents, its agents, directors and/or employees refused and/or unduly delayed the entry of David Henry and Chip Eling to the premises. The respondents each admit that their conduct on 16 September 2008 was a breach of s.767(3)(b) of the WR Act which provides that a person must not refuse or unduly delay entry to premises by a permit holder who is entitled to enter the premises under an OHS law in accordance with s.756. Section 767(3)(b) is also a civil remedy provision (see s.767(4) and s.728 in relation to the second respondent).
The penalties for contravention of the civil remedy provisions in Part 15 of the WR Act are to be found in s.769 which relevantly provides:
(1) The Court, on application by an eligible person, may make one or more of the following orders in relation to a person (the defendant) who has contravened a civil remedy provision of this Part:
(a) an order imposing a pecuniary penalty on the defendant;
(b) an order requiring the defendant to pay a specified amount to another person as compensation for damage suffered by the other person as a result of the contravention;
(c) any other order that the Court considers appropriate.
(2) The maximum pecuniary penalty under paragraph (1)(a) is 300 penalty units if the defendant is a body corporate and otherwise 60 penalty units.
(3) The orders that may be made under paragraph (1)(c) include:
(a) injunctions; and
(b) any other orders that the Court considers necessary to stop the conduct or remedy its effects.
(4) Each of the following is an eligible person for the purposes of this section:
(a) a workplace inspector;
(b) a person affected by the contravention;
(c) a person prescribed by the regulations for the purposes of this paragraph.
(5) A regulation prescribing persons for the purposes of paragraph (4)(c) may provide that a person is prescribed only in relation to circumstances specified in the regulation.
Under s.737 of the WR Act “Court” means the Federal Court of Australia or the Federal Magistrates Court. Under s.728 of the WR Act a person who is involved in a contravention of a civil remedy provision (as to which see s.728(2)) is treated as having contravened that provision.
The respondents accept that breaches of the relevant sections have occurred and the parties have agreed on appropriate orders to be made. They have jointly proposed penalties to be paid by each of the respondents. However the court must be satisfied that, having regard to the facts as established or agreed, the penalties proposed are within the range of penalties that arise for consideration in the exercise of the court’s discretion. As the Full Court of the Federal Court stated in Mobil Oil (and also see NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285) at [53]:
…
(vi) Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court’s view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range.
In Ponzio v B & P Caelli Constructions Pty Ltd and Others (2007) 158 FCR 543; [2007] FCAFC 65 Jessup J suggested at [129] that the phrase “permissible range” referred to in NW Frozen Foods Pty Ltd and in Mobil Oil at [53] (vi) referred to “a range which would be permitted by the court, that is, a range within which the penalty is neither manifestly inadequate nor manifestly excessive”.
In determining the appropriate penalty it is necessary to have regard to all the circumstances of the contraventions. As indicated above, there is nothing to suggest that the court should not rely on the agreed statement of facts which, in addition to the points outlined above, includes the fact that neither the first nor second respondent has been the subject of any prior notifications of breaches of the relevant sections of the WR Act. Nor has either respondent been charged with any breach of the NSW OHS Act as a result of the death of Mr Xi.
The maximum penalty under s.769 of the WR Act is 300 penalty units for a body corporate and otherwise 60 penalty units. A penalty unit is defined in s.4 as having the meaning given in s.4AA of the Crimes Act 1914 (Cth). On that basis, the maximum penalty for each breach by a corporate respondent is $33,000 and $6,600 for each breach by a non-corporate respondent.
The parties accept that the court has a broad discretion in relation to penalty not fettered by a checklist of mandatory criteria (see Australian Ophthalmic Supplies Pty Limited v McAlary-Smith (2008) 165 FCR 560; [2008] FCAFC 8 at [12], [86], [87] and [91]). The penalty should be determined by having regard to the individual circumstances of the case and not an attempt to make a line by line comparison with another case (ibid at [12] and also see generally Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70).
As Branson J stated Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) (1999) 94 IR 231 at 232; [1999] FCA 1714 at [7]:
The Act gives no explicit guidance as to the circumstances in which an order imposing a penalty … will be appropriate or as to the circumstances in which a penalty of or near the maximum, or alternatively of a lesser amount, may be called for. The Court is simply directed to consider what is appropriate in all the circumstances of the case.
Her Honour went on to list a number of matters which while not intended to comprise an exhaustive list, seemed to be considerations to which the court may appropriately have regard in determining whether conduct called for the imposition of a penalty and, if so, the amount of the penalty (ibid at [8]):
(a) The circumstances in which the relevant conduct took place (including whether the conduct was undertaken in deliberate defiance or disregard of the Act);
(b) Whether the respondent has previously been found to have engaged in conduct in contravention of [the relevant Part] of the Act;
(c) Where more than one contravention of [the relevant Part] is involved, whether the various contraventions are properly seen as distinct or whether they arise out of the one course of conduct;
(d) The consequences of the conduct found to be in contravention of [the relevant Part] of the Act;
(e) The need, in the circumstances, for the protection of industrial freedom of association;
and
(f) The need, in the circumstances, for deterrence.
While in CFMEU v Coal & Allied Operations Branson J was dealing with breaches of Part XA of the Act as it then stood (which related to freedom of association) the same approach may be taken to penalties imposed under other parts of the WR Act.
A number of other criteria may also be of relevance in particular circumstances, including the cost of the contravention, deterrence, the flagrancy and deliberateness of the breach, the offender’s past record of behaviour and any contrition displayed (see Seven Network (Operations) Pty Ltd v Communications, Electrical, Electronic, Energy Information, Postal, Plumbing & Allied Services Union (No 2) (2001) 110 IR 372; [2001] FCA 672 per Merkel J). As Finkelstein J observed in Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228 at 230; [2001] FCA 1364 the object of imposing pecuniary penalties may either to punish, to deter, to rehabilitate or some combination of the three (also see Ponzio v B & P Caelli Constructions Pty Ltd at [93] – [94]). General deterrence is of particular importance in relation to penalty (see Finance Sector Union v Commonwealth Bank of Australia (2005) 147 IR 462; [2005] FCA 1847 at [60]). It has also been said that the increases in penalty to the present maximum amounts mean that “any light handed approach that might have been taken in the past to serious, wilful and ongoing breaches of the industrial laws should no longer be applicable” (ibid at [72]).
As the legislation gives the Court a discretion whether or not to impose a penalty the court must be satisfied that it is appropriate in all of the circumstances to impose a penalty before it makes such an order (see Alfred v Walter Construction Group Limited [2005] FCA 497 at [7], [11] – [12]). Where there are several contraventions the aggregate penalty must be just and appropriate having regard to the circumstances (see generally Mornington Inn Pty Ltd and Australian Ophthalmic Supplies in relation to the totality principle).
The circumstances in which the conduct took place have been summarised above. On two separate dates the respondents refused and/or unduly delayed entry of union officials to premises for the purposes of holding discussions with employees in circumstances where they were entitled to hold such discussions and where, between the first and second occasions on which this occurred, the applicants had endeavoured to resolve the dispute about the right of entry in the Australian Industrial Relations Commission. The ability of union officials to enter premises to hold discussions is critical to promoting freedom of association (an object of the WR Act see ss.3(j)) (and see Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v John Holland Pty Limited ACN 004 282 268 (2009) 180 IR 350; [2009] FCA 274 at [12] in relation to the objects of Part 15 of the WR Act).
Moreover, the ability of union officials to enter premises to investigate suspected breaches of OHS laws such as the OHS Act is critical in ensuring a safe workplace and the conduct of the respondents in refusing and/or unduly delaying entry by union officials shortly after a workplace fatality is a serious contravention of the Act. However, I accept that, as submitted by counsel for the respondents, it may not have been known to the respondents that one of the officials who sought to enter was a person whom the applicants described as a highly regarded and experienced occupational health and safety officer.
While this is clearly a case in which it is appropriate to impose penalties, notwithstanding the seriousness of the contraventions, I am not persuaded that they are to be regarded as in the worst category of case for which a maximum penalty is appropriate. It is agreed that neither the first nor second respondent has been the subject of any prior notifications of breaches of relevant sections of the WR Act and that neither respondent has been charged with any breach of the OHS Act as a result of the death of Mr Xi. Nonetheless I accept that there is a need to protect not only industrial freedom of association but also the ability of union officials to enter premises to investigate suspected OHS breaches. Hence there is a need for general deterrence that is of particular significance, although in the absence of prior breaches there is not such a great need for specific deterrence in relation either of the respondents.
While technically there has been more then one contravention in each instance of each of the provisions of s.767(3) of the WR Act, the various contraventions of the specific provisions on each of the days in question can be seen as arising out of the one course of conduct on those dates (although note that there is no equivalent in s.769 of s.719(2) of the WR Act).
As the applicants accept, the second respondent and the first respondent through the second respondent, have shown contrition and the fact that agreement was reached has avoided the necessity for a lengthy hearing (the matter having been set down for two days). It is the case that agreement was only reached after the respondents obtained an adjournment of the original hearing dates and fresh legal representation, but there should be some reduction in the appropriate penalties in light of the respondents’ acceptance of the breach, albeit at a relatively late stage. This not only reflects the respondents’ contrition, it also has a significant utilitarian value and reduces the need for specific deterrence. The parties have also given up arguments as to costs. I am told that the second respondent has undertaken to pay the penalty on behalf of the first respondent.
It is also acknowledged that the totality principle is of relevance in determining the just and aggregate penalty to be imposed on each respondent. The respondents each have an otherwise good industrial record.
The parties proposed that pursuant to s.769(1)(a) of the Act the court impose a total penalty of $17,000 on the first respondent in respect of its contraventions of s.767(3)(a) and s.767(3)(b) of the WR Act and a total penalty of $3,000 on the second respondent in respect of his contraventions of s.767(3)(a) and s.767(3)(b) of the WR Act.
In each case it is proposed that penalties should be imposed on the bases that each of the respondents contravened of s.767(3)(a) on two occasions and contravened s.767(3)(b) once. I am satisfied that this is appropriate. The total penalty proposed in relation to the first respondent is $17,000. As the maximum available in respect of three contraventions would be $99,000 this is at the lower end of the available range, although it is not nominal. The same can be said in respect of a penalty of $3,000 for the second respondent, in relation to whom the maximum penalty that could be imposed for three contraventions would be $19,800.
While these might not be exactly the figures that I would have awarded, I consider that the proposed penalties are within the permissible range. I could not say the penalties are manifestly inadequate in all the circumstances and it is clear that they are not manifestly excessive having regard to all of the circumstances and in particular the principle that requires that the aggregate penalties for numerous offences be just and appropriate (see Ponzio v B & P Caelli Constructions Pty Ltd at [18]).
I am satisfied that the proposed penalties are appropriate in the particular circumstances of this case Hence the penalty payable by the first respondent for the breaches of paragraphs (a) and (b) of s.767(3) should be $17,000 while that payable by the second respondent (reflecting the difference between penalties applicable to corporations and individuals) should be $3,000.
The parties also proposed that the penalties should be paid to the first applicant. I am told from the bar table that the first applicant undertakes to put the money towards measures to promote occupational health and safety. Pursuant to s.841 of the WR Act the court may order that a penalty or a part of a penalty be paid to the Commonwealth or to a particular organisation or person. Relevantly, in Seven Network Merkel J suggested at [8]:
Where the conduct in question targets a particular organisation or person and that person is authorised to commence and commences a proceeding for the imposition of a penalty, in the usual course it is appropriate to order that the penalty be paid to the organisation or person.
Such “usual course” should be followed in this case, even if the conduct might not be described as “targeting” the first applicant. There is no suggestion of a “windfall gain” in this case (see generally Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357; [2008] FCAFC 170 and Rojas v Esselte Australia Pty Ltd (No 2) (2008) 177 IR 306; [2008] FCA 1585).
I am satisfied that the orders proposed by the parties that the penalties be paid to the first applicant are appropriate in this case. I note that the parties agree that there should be no order as to costs (and in any event see s.824 of the WR Act).
I therefore propose to make the orders sought by the parties.
I certify that the preceding forty-four (44) paragraphs are a true copy of the reasons for judgment of Barnes FM
Associate:
Date: 3 December 2009
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