Cahill v CFMEU

Case [2008] FCA 495

FEDERAL COURT OF AUSTRALIA

Cahill v Construction, Forestry, Mining and Energy Union [2008] FCA 495

INDUSTRIAL LAW – industrial action due to safety concerns – claim for payment for a period of industrial action – statutory prohibition on claim for payment – agreed breach – penalty – whether penalty should be imposed for breach – factors relevant to exercise of discretion – application of totality principle
Held: breach of statutory prohibition – penalty imposed on union

Workplace Relations Act 1996 (Cth) ss 84, 127, 187AB(1)(a), 187AB(1)(b)
Building and Construction Industry Improvement Act 2005 (Cth) s 57
Workplace Relations Amendment (Work Choices) Act 2005 (Cth)

Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543, applied
Commonwealth Bank of Australia v Finance Sector Union of Australia (2007) 157 FCR 329, applied
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8, applied

CHRISTOPHER JAMES CAHILL v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION, JOHN SETKA and ALEX TADIC

VID 502 OF 2006

MARSHALL J
11 APRIL 2008
MELBOURNE


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 502 OF 2006

BETWEEN:

CHRISTOPHER JAMES CAHILL
Applicant

AND:

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
First Respondent

JOHN SETKA
Second Respondent

ALEX TADIC
Third Respondent

JUDGE:

MARSHALL J

DATE OF ORDER:

11 APRIL 2008

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:

1.A penalty of $4,000 is imposed on the first respondent for breach of s 187AB of the Workplace Relations Act 1996 (Cth) (“the Act”).

2.It is declared that the second and third respondents have each contravened s 187AB of the Act.

3.The penalty is to be paid into consolidated revenue on or before 11 June 2008.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 502 OF 2006

BETWEEN:

CHRISTOPHER JAMES CAHILL
Applicant

AND:

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
First Respondent

JOHN SETKA
Second Respondent

ALEX TADIC
Third Respondent

JUDGE:

MARSHALL J

DATE:

11 APRIL 2008

PLACE:

MELBOURNE

REASONS FOR JUDGMENT

  1. The issue for determination in this proceeding is the assessment of the appropriate penalty, if any, to be imposed on the respondents for breaching s 187AB of the Workplace Relations Act 1996 (Cth) (as it applied prior to 27 March 2006) (“the Act”).

  2. Section 187AB prohibits an organisation, or an officer, member or employee of an organisation, from making a claim for an employer to make a payment to an employee in relation to a period during which the employee engaged, or engages, in industrial action; see s 187AB(1)(a). It also prohibits the organising or engagement in, or threats to organise or engage in, industrial action against an employer with intent to coerce the employer to make such a payment; see s 187AB(1)(b).

  3. The events the subject of this proceeding occurred in May 2004. At that time the maximum penalty for breach of s 187AB was $10,000 for a corporation and $2,000 for an individual.

    The…

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AGLC
Cahill v CFMEU [2008] FCA 495
Case
[2008] FCA 495
Decision Date

CaseChat Overview and Summary

In the case of Cahill v CFMEU, the Federal Circuit Court was tasked with determining a penalty against the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU) for breaches of the Workplace Relations Act 1996 (Cth). The primary dispute centred around the CFMEU's actions, including imposing bans and stoppages, and applying pressure to Bovis to pay strike pay to its members. The court was required to decide whether the CFMEU's actions constituted breaches of the Act and, if so, to determine an appropriate penalty.

The legal issues before the court included whether the CFMEU's actions were deliberate and in breach of the Act, and what weight should be given to factors such as deterrence, the nature of the breaches, and the need for general deterrence. The court also had to consider the totality principle in determining the appropriate penalty, weighing various sentencing factors, including the co-operation of the CFMEU and its expenditure in the proceeding. The court found that the breaches were deliberate and in breach of s 187AB of the Act. It acknowledged that while specific deterrence was not necessary due to the current industrial climate, some degree of general deterrence was required.

After considering all relevant factors, the court concluded that a penalty of $4,000 was appropriate. This decision was based on the totality principle and the significant breaches identified, such as the industrial action from 13 to 18 May 2004 and the bans at the 385 Bourke Street site. The court also took into account the overlap in some of the breaches, which reduced the overall penalty from $6,000 to $4,000.

The court's final orders included imposing a penalty of $4,000 on the CFMEU, declaring that the second and third respondents had contravened s 187AB of the Act, and directing that the penalty be paid into consolidated revenue by a specified date.

Orders

Orders of the court

1. A penalty of $4,000 is imposed on the first respondent for breach of s 187AB of the Workplace Relations Act 1996 (Cth) (“the Act”).

2. It is declared that the second and third respondents have each contravened s 187AB of the Act.

3. The penalty is to be paid into consolidated revenue on or before 11 June 2008.

Background

Background to the litigation

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Evidence

Evidence Before The Court

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Decision

Reasons for decision

MARSHALL J
Counsel for Mr Cahill refers to the fact that the CFMEU has previously been fined for engaging in industrial action contrary to the Act. He refers to previous transgressions against s 187AB in Ponzio (2007) 158 FCR 543 as well as transgressions of other provisions.Conclusion on penalty Consistently with the approach taken in Ponzio (2007) 158 FCR 543, I consider that a penalty should be imposed on the CFMEU, because the CFMEU officially applied pressure to representatives of Bovis to pay strike pay to CFMEU members. Bans were imposed at another Bovis site as part of that pressure in addition to stoppages at the site. Also, costly industrial action occurred over several days. The breaches, although in response to a safety issue, were deliberate. Resolution of the safety issue did not require the taking of industrial action. There was no reason why work could not continue on other parts of the site which were unaffected by the spill. So much is consistent with the safety disputes resolution procedure which is commonly applied on building sites. That procedure involves the immediate problem being isolated and work being performed elsewhere when it is safe to do so. I accept that there is no need for specific deterrence. The making of claims for strike pay is not now a feature of the construction industry. The events the subject of this proceeding occurred nearly four years ago in a vastly different industrial climate to that which currently exists. I accept there is some need for general deterrence, although not to any great extent, as breaches of this type are now rare, and will be so, irrespective of what percentage of the maximum penalty is imposed on the CFMEU. The CFMEU is a large organisation with nationwide coverage. I do not consider that the actions of other branches or officials (other than those involved in this matter) in respect of other provisions of industrial legislation should be visited upon them for the purposes of assessing penalty. I form a different view, of course, concerning prior contravention of s 187AB. Weighing up all the circumstances and relevant sentencing factors, including the CFMEU’s co-operation in the proceeding with Mr Cahill and its expenditure of funds in its involvement in the proceeding, I consider that a penalty of $4,000 is an appropriate one, doing one’s best to weigh together all the countervailing factors referred to above and applying the totality principle to the contraventions; see Ponzio (2007) 158 FCR 543 per Jessup J at 575 and Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 per Gray J at [23] and Graham J at [66] and [71-73]. The most significant breaches of the Act were the engaging in industrial action from 13 to 18 May 2004 (other than on the days during that time when work would not ordinarily be performed) and the imposing of bans at the 385 Bourke Street site. A penalty of $2,000 is appropriate in each case. The demands for payment made on 13 and 14 May 2004 are also significant breaches for which a penalty of $1,000 is appropriate for the first occasion and $500 for the other two subsequent occasions. The other breaches constituted by the two threats on 14 May 2004 involve overlapping conduct for which no extra penalty should be imposed. Applying the totality principle, the figure of $6,000 is reduced to a penalty of $4,000.

Ratio Decidendi

Legal Principle Established

Established by: MARSHALL J

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