Carr v CEPU & Anor
[2007] FMCA 1526
•14 September 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CARR v CEPU & ANOR | [2007] FMCA 1526 |
| INDUSTRIAL LAW – Penalty – breach of civil penalty provision – unlawful industrial action – agreed facts – agreed penalty – consideration of factors relevant to penalty. |
| Building and Construction Industry Improvement Act 2005 (Cth), ss.3(1), (2)(a), (b), (d), 4(1), 38, 48(2), 49(2)(a), 69 Trade Practices Act 1974 (Cth), s.45D |
| ACCC v AFMEPKIU [2004] FCA 517 ACCC v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36 ACCC v ABB Transmission and Distribution Ltd (No 2) [2002] FCA 559 ACCC v Colgate-Palmolive Pty Ltd [2002] FCA 619 ACCC v IPM Operations Maintenance Loy Yang Pty Ltd (No 2) [2007] FCA 11 ASC v Forem-Freeway Pty Ltd (1999) 30 ASCR 339 CFMEU v Coal & Allied Operations Pty Ltd (No 2) (1999) 94 IR 231 CFMEU & Ors v Clarke (2007) 164 IR 299; [2007] FCAFC 87 Commonwealth Bank of Australia & Anor v Finance Sector Union of Australia (2007) 157 FCR 329; [2007] FCAFC 18 Finance Sector Union v Commonwealth Bank of Australia (2005) 224 ALR 467; [2005] FCA 1847 Flattery v Zeffirelli’s Pizza Restaurant [2007] FMCA 9 Furlong v AWU & Ors [2007] FMCA 443 Furlong v Maxim Electrical Services (Aust) v Vic Pty Ltd & Ors [2006] FCA 1705 Kelly v Fitzpatrick [2007] FCA 1080 Leighton Contractors & Anor v CFMEU & Ors [2006] WASC 317 Martino v CEPU & Mooney (unreported, Magistrates Court of Victoria, 7 April 2007) Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 Ponzio v B & P Caelli Constructions Pty Ltd and Ors (2007) 158 FCR 543; [2007] FCAFC 65 Seven Network (Operations) Limited v CEPU [2001] FCA 672 TPC v CSR Limited (1991) ATPR 41-076 |
| Applicant: | DENNIS CARR |
| First Respondent: | COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENGINEERING, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA |
| Second Respondent: | KEVIN HARKINS |
| File Number: | LNG 24 of 2007 |
| Judgment of: | Lucev FM |
| Hearing date: | 4 September 2007 |
| Date of Last Submission: | 4 September 2007 |
| Delivered at: | Perth (by telephone link to Melbourne) |
| Delivered on: | 14 September 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr P M O’Grady |
| Solicitors for the Applicant: | Australian Government Solicitor |
| Counsel for the Respondent: | Mr K Farouque |
| Solicitors for the Respondent: | Maurice Blackburn Cashman |
DECLARATION AND ORDERS
THE COURT DECLARES THAT:
The First Respondent contravened s.38 of the Building and Construction Industry Improvement Act 2005 (Cth) (“BCII Act”) by engaging in unlawful industrial action constituted by a 24 hour strike of employees in the electrical contracting industry in Tasmania on 14 December 2005.
The Second Respondent contravened s.38 of the BCII Act by engaging in unlawful industrial action constituted by a 24 hour strike of employees in the electrical contracting industry in Tasmania on 14 December 2005.
AND THE COURT ORDERS THAT:
A penalty of $11,000 be imposed on the First Respondent in respect of the contraventions of s.38 of the BCII Act, payable to the Consolidated Revenue Fund within 30 days.
A penalty of $8,800 be imposed on the Second Respondent in respect of the contraventions of s.38 of the BCII Act, payable to the Consolidated Revenue Fund within 30 days.
The Application filed by the Respondents on 7 August 2007 for disqualification be dismissed.
Each party bears its own costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
LNG 24 of 2007
| DENNIS CARR |
Applicant
And
| COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENGINEERING, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA |
First Respondent
| KEVIN HARKINS |
Second Respondent
REASONS FOR JUDGMENT
Introduction
On 14 December 2005, eighty one employees of electrical contractors in Tasmania failed to attend work, and thereby undertook industrial action.
The Communications, Electrical, Electronic, Engineering, Information, Postal, Plumbing and Allied Services Union of Australia[1] and Mr Harkins admit contraventions of s.38 of the Building and Construction Industry Improvement Act 2005 (Cth)[2] arising from the industrial action.
[1] The “CEPU”.
[2] The “BCII Act”.
The parties have agreed on declarations to be made and penalties to be imposed on the CEPU and Mr Harkins. The declarations are that the CEPU and Mr Harkins have contravened s.38 of the BCII Act by engaging in unlawful industrial action constituted by a 24 hour strike of employees in the electrical contracting industry in Tasmania on 14 December 2005. The penalties are $11,000.00 for the CEPU and $8,800 for Mr Harkins.
At a hearing in Melbourne on 4 September 2007 the Court made the agreed declarations, and ordered that the agreed penalties be imposed. At that hearing the Court said that it would deliver its reasons for judgment at a later date. These are those reasons.
Issues
The only issue for the Court is whether the agreed penalties are appropriate penalties. This involves:
a)a consideration of the principles concerning the approach to be taken by the Court where an agreed penalty is proposed; and
b)an assessment of whether the penalty proposed is appropriate having regard to relevant considerations.
Relevant principles concerning agreed penalty
In dealing with proposed agreed penalties the courts have developed certain principles for guidance. They include:
a)that the court bears ultimate responsibility for penalty, is not bound by the parties agreement, and must consider for itself what constitutes an appropriate penalty;[3]
b)determining penalty quantum is not an exact science, and within a permissible range a particular figure is not necessarily more appropriate than another figure;[4]
c)promoting settlement of litigation (particularly lengthy litigation) is in the public interest, and where the parties agree on facts and penalty, they may present a statement of agreed facts, including a view as to the effect of those facts, and submissions on penalty;[5]
d)the view of the regulatory body is relevant, particularly where the view concerns matters within the regulator’s expertise, but not determinative of penalty;[6]
e)in determining appropriate penalty the court will examine all the circumstances, including an agreed statement of facts, and, if appropriate, may act on that statement;[7] and
f)a jointly proposed penalty will not be rejected simply because the court might have chosen a different figure: it is sufficient if the jointly proposed penalty is “within the permissible range”[8] or “broadly speaking” within that range.[9]
[3] Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at paras 53(i), 56 and 79 per Branson, Sackville and Gyles JJ (“Mobil Oil”); Furlong v AWU & Ors [2007] FMCA 443 at para 7 per Burchardt FM (“Furlong”).
[4] Mobil Oil at para 53(ii) per Branson, Sackville and Gyles JJ.
[5] Mobil Oil at para 53(iii) per Branson, Sackville and Gyles JJ.
[6] Mobil Oil at para 53(iv) per Branson, Sackville and Gyles JJ. Here the regulatory body is the Australian Building and Construction Commissioner (“the Commissioner”): see BCII Act ss.9, 10 and 15.
[7] Mobil Oil at para 53(v) per Branson, Sackville and Gyles JJ.
[8] Mobil Oil at para 53(vi) per Branson, Sackville and Gyles JJ.
[9] ACCC v Colgate-Palmolive Pty Ltd [2002] FCA 619 at para 24 per Weinberg J.
Assessment of appropriate penalty
In assessing whether the proposed penalty is appropriate there are a number of considerations, relevant to this matter, which the Court must consider.[10] They are:
[10] See generally CFMEU v Coal & Allied Operations Pty Ltd (No 2) (1999) 94 IR 231 at paras 7-8 per Branson J (“Coal & Allied Operations”) and TPC v CSR Limited (1991) ATPR 41-076 at 52, 152-153 per French J; both of which were cited with approval by this Court in Furlong at paras 8-10 per Burchardt FM. The list which follows is derived from those decisions, but limited to factors which are relevant to this case. Other factors which might be added to the list include: (a) the extent to which dispute resolution procedures were followed or not; and (b) whether there had been compliance with applicable orders of a court or industrial tribunal. See also Commonwealth Bank of Australia & Anor v Finance Sector Union of Australia (2007) 157 FCR 329 at 362 per Branson J; [2007] FCAFC 18 at para 181 per Branson J (“Commonwealth Bank Appeal”), where a list in similar terms to that in Coal & Allied Operations is set out, and Coal & Allied Operations is cited along with a number of subsequent cases.
a)the nature of the unlawful industrial action which occurred;
b)the effect of that unlawful industrial action;
c)the deliberateness of the contraventions and the period over which they extended;
d)whether the contraventions arose out of the conduct of senior management;
e)the organisational culture of the contravener;
f)the contravener’s past relevant record of contraventions of civil penalty provisions;
g)the contravener’s co-operation with the Commissioner;
h)the contravener’s contrition;
i)the contravener’s financial position;
j)the need for deterrence, both general and individual; and
k)the need to give effect to the statutory purposes underlying the relevant legislation.
Finally, the penalty must be appropriate in totality.[11]
[11] Ponzio v B & P Caelli Constructions Pty Ltd and Ors (2007) 158 FCR 543 at 570-571 per Jessup J; [2007] FCAFC 65 at paras 145-146 per Jessup J (“Caelli Constructions”).
Nature of the unlawful industrial action
The unlawful industrial action was serious. It involved withdrawal of labour by 81 employees for a full day of work on 14 December 2005. The unlawful industrial action took place in a period in which the CEPU and Mr Harkins (on behalf of the CEPU) were negotiating with electrical contractors for new enterprise bargaining agreements to succeed or replace existing certified agreements.[12] The CEPU and Mr Harkins had sought significant pay increases for the employees of the electrical contractors, those increases to be included in any new enterprise bargaining agreements, but those pay increases had not been accepted by the electrical contractors and there was a stalemate in negotiations for new enterprise bargaining agreements.[13]
[12] Statement of Agreed Facts, paras 13-14.
[13] Statement of Agreed Facts, paras 14 and 30.
The unlawful industrial action was however of short duration: just one day.[14] Further, although the CEPU and Mr Harkins were involved in activity leading to the contravention, particularly by their conduct at the meeting at the Glenorchy Football Club on 13 December 2005, there is no evidence that the CEPU or Mr Harkins initiated the proposal that unlawful industrial action be taken by withdrawing labour on 14 December 2005.[15] Also, there is no evidence, and it is not alleged, that the CEPU or Mr Harkins coerced employees to engage in the unlawful industrial action.[16]
[14] Compare Furlong at para 14 per Burchardt FM: “a short strike lasting only for a day and a bit”.
[15] Statement of Agreed Facts, paras 16-18.
[16] Statement of Agreed Facts, paras 20 and 32.
Effect of industrial action
The unlawful industrial action resulted in the electrical contractors each losing a day of work on 14 December 2005. That loss was not quantified. A number of the electrical contractors also acceded to the CEPU claims, and consequently, a standard form enterprise bargaining agreement providing significant pay increases for employees, was certified.[17] The cost of that accession was not quantified. However, the effect of the industrial action was serious in terms of loss of work, and the electrical contractors’ reluctant accession to the CEPU claims.
[17] Statement of Agreed Facts, paras 30.
Deliberateness and period of contraventions
The contraventions were deliberate. That is evident from Mr Harkins telling employees at the meeting at the Glenorchy Football Club that only he would suffer the consequences of the taking of unlawful industrial action.[18] The contraventions lasted only one day.
[18] Statement of Agreed Facts, paras 29(g).
Conduct of senior management
The most senior management of the CEPU’s Electrical Division Southern States Branch, namely the Branch Committee of Management and the Branch Secretary were not aware of or involved in the unlawful industrial action on 14 December 2005 and did not authorise that action.[19] However, Mr Harkins was a member of the senior management team of the Branch, being its Assistant Secretary. He was involved in the unlawful industrial action, and whilst not its initiator, and whilst no coercion was involved, he did nothing to prevent the unlawful industrial action.[20] Nevertheless, Mr Harkins conduct is taken to be conduct of the CEPU as he was at all relevant times an officer of the CEPU, and consequently both the CEPU and Mr Harkins were involved in the unlawful industrial action.[21]
[19] Statement of Agreed Facts, para 36.
[20] Statement of Agreed Facts, para 29(f). Compare CFMEU & Ors v Clarke (2007) 164 IR 299; [2007] FCAFC 87, where the relevant union organisers positively advised their members against the taking of industrial action.
[21] BCII Act, ss.48(2) and 69.
The consequence of Mr Harkins’ actions is that he bears a greater degree of culpability in relation to the breach of the civil penalty provisions of s.38 of the BCII Act than the CEPU, which is less culpable. The degree of culpability is reflected in the agreed penalties: that for the CEPU is only ten per cent of the maximum penalty, whilst that for Mr Harkins is forty per cent of the maximum penalty.[22]
[22] Section 38 of the BCII Act is a Grade A civil penalty provision: BCII Act, ss.4(l) and 38. The maximum pecuniary penalty for a Grade A civil penalty is 1000 penalty units for a body corporate, otherwise 200 penalty units: BCII Act, s.49(2)(a). A penalty unit is $110.00: Crimes Act, 1914 (Cth), s.4AA(1).
Organisational Culture
The Branch Committee of Management and the Branch Secretary of the CEPU’s Electrical Division Southern States Branch were not aware of or involved in the unlawful industrial action on 14 December 2005 and did not authorise that action. Nevertheless, Mr Harkins, who was a member of the senior management of the Branch, as its Assistant Secretary, was involved.
The unlawful industrial action on 14 December 2005 was the first industrial action engaged in by the CEPU in the Tasmanian electrical contracting industry for many years.[23] There has been no industrial action in the Tasmanian electrical contracting industry since the unlawful industrial action on 14 December 2005.[24]
[23] Statement of Agreed Facts, para 31.
[24] Statement of Agreed Facts, para 33.
The Court was informed by the applicant that the CEPU had, over the previous six years, had penalties imposed for two breaches of s.187AB(1) of the Workplace Relations Act 1996 (Cth)[25] (coercion to make, vary or terminate certified agreements), one breach of s.187AB(1) of the WR Act (organisations taking action for payment in relation to periods of industrial action) and one breach of s.45D of the Trade Practices Act 1974 (Cth).[26]
[25] The “WR Act”.
[26] The “TP Act”; Statement of Agreed Facts, para 32(b)-(e).
Given that the CEPU is a large organisation registered under the WR Act, operating on a national basis with national officials and national branches, and notwithstanding that those with ultimate responsibility for the affairs of the CEPU must discharge that responsibility properly,[27] the foregoing record is not such as to indicate that there is within the CEPU an organisational culture of deliberate defiance of relevant industrial laws.[28] Further, insofar as Tasmania is concerned, this case appears to be an isolated, albeit serious, contravention. Further, it appears that practical responsibility for the taking of the unlawful industrial action rests principally with Mr Harkins and the attendees at the meeting of the Glenorchy Football Club rather than with the organisational culture of the CEPU as a whole. Again, as indicated above, the degree of responsibility (or culpability) is reflected in the percentage of the maximum penalty imposed on each of the CEPU and Mr Harkins.
[27] ACCC v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36 at 42 per Goldberg J (“Safeway Stores”).
[28] This assumes that contravention of provisions of a statute other than the BCII Act is relevant, which is not necessarily the case: see para 22 below.
Relevant record of civil penalty contraventions
There is no evidence that the CEPU or Mr Harkins have previously contravened the provisions of the BCII Act, or that Mr Harkins has any prior civil penalty contraventions at all.
The Court was informed that the CEPU had breached the provisions of the WR Act on three occasions. On the first occasion the Federal Court imposed a penalty of $7,500 on the CEPU for a breach of s.170NC of the WR Act.[29] On the second occasion a penalty of $1750 was imposed on the CEPU by the Federal Court for breaches of s.187AB(1) of the WR Act.[30] In that case, were it not for the parties agreeing penalty, the Federal Court would not have imposed a penalty.[31] On the third occasion the Magistrates Court of Victoria imposed an agreed penalty of $13,000 on the CEPU on an admitted contravention of s.170NC of the WR Act occurring in November 2004.[32]
[29] Seven Network (Operations) Limited v CEPU [2001] FCA 672.
[30] Furlong v Maxim Electrical Services (Aust) v Vic Pty Ltd & Ors [2006] FCA 1705 (“Maxim”).
[31] Maxim at para 21 per Marshall J.
[32] Martino v CEPU & Mooney (unreported, Magistrates Court of Victoria, 7 April 2007).
In relation to the breach of s.45D of the TP Act the Federal Court was again faced with an agreed penalty. The Federal Court observed that if it had been determining the penalty it would have fixed a figure considerably lower than that agreed.[33] That was a penalty agreed in the context of a maximum pecuniary penalty of $750,000.
[33] ACCC v AFMEPKIU [2004] FCA 517 at para 8 per Gray J.
The applicant submitted that in setting penalty the Court ought to take account of non-BCII Act civil penalty contraventions, at least where they relate to the taking of industrial action. On that basis the breaches of the WR Act and the TP Act set out above were said to be relevant to setting penalty. That arguably common sense approach is not supported by the case law. Albeit part of a non-exhaustive list of factors when set out in Coal & Allied Operations, the consideration for penalty purposes of prior civil penalty breaches appears to be restricted to like contraventions of the Act which has been found to be breached.[34] In Leighton Contractors the Supreme Court of Western Australia in fixing penalty for unlawful industrial action in contravention of s.38 of the BCII Act was referred to eight proceedings against the CFMEU over the previous six years. The Supreme Court said those contraventions were “of a different nature than the contraventions now being considered and did not involve contraventions of the [BCII] Act.”[35] Having referred to the approach of the Federal Court in Coal & Allied Operations as the “correct approach” the Supreme Court said it “is not appropriate to consider all contraventions of any industrial legislation by any Branch of the first defendant [the CFMEU] anywhere in Australia” and that it “is inappropriate to take account of … contraventions of different legislation.”[36] It therefore appears that the relevant civil penalty contraventions for present purposes are any prior contraventions of the BCII Act, of which there are none by either the CEPU or Mr Harkins. Therefore, any contravention by the CEPU of other laws concerning industrial action is not to be taken into account by the Court. The CEPU it is to be treated for present purposes as a first time contravener. Mr Harkins is a first time contravener.
[34] Coal & Allied Operations at para 8(b) per Branson J; Leighton Contractors & Anor v CFMEU & Ors [2006] WASC 317 at para 67 per Le Miere J (“Leighton Contractors”); Commonwealth Bank Appeal at para 181 (“whether particular conduct under the Act calls for the imposition of a penalty”), and sub-para 181(b) (“whether the respondent has previously been found to have engaged in conduct in contravention of Part XA of the Act”).
[35] Leighton Contractors at para 67 per Le Miere J.
[36] Leighton Contractors at para 67 per Le Miere J.
Co-operation with Commissioner
Both the CEPU and Mr Harkins have co-operated with the Commissioner in reaching agreement on both facts and penalty. Their agreement acknowledges the contraventions. More importantly, it avoids the expense, time and effort associated with a lengthy hearing, thus freeing the Court’s resources which would otherwise have been devoted to a hearing. The Court notes that the admission of the contraventions was however only made a few days before the hearing of a preliminary issue (an application to disqualify the presiding Federal Magistrate) was to commence.[37] Nevertheless, the co-operation does warrant a penalty discount for both the CEPU and Mr Harkins.
[37] Compare Leighton Contractors at para 71 per Le Miere J.
Contrition
There is evidence of contrition by both the CEPU and Mr Harkins. That contrition is evidenced by:
a)their admissions of the contraventions; and
b)their co-operation with the Commissioner.
The CEPU’s contrition is further evidenced by agreement to the provision of training by the Commissioner for Southern States Branch officials and delegates in relation to the rights and obligations of the CEPU, its officials and delegates arising under the BCII Act and the WR Act.[38] That training will include Mr Harkins, and Counsel appearing for Mr Harkins gave an undertaking to the Court that Mr Harkins would attend training provided by the Commissioner.[39]
[38] Statement of Agreed Facts, para 35; Furlong at para 17 per Burchardt FM.
[39] Transcript at 10.
The Court accepts that there is contrition on behalf of the CEPU and Mr Harkins entitling them to a discount on penalty.
Financial position
There is an established principle in setting penalties for both individuals and corporations that regard is had to their financial position, and more particularly their capacity to pay.[40]
[40] ASC v Forem-Freeway Pty Ltd (1999) 30 ASCR 339 at 351 per Madgwick J; ACCC v ABB Transmission and Distribution Ltd (No 2) [2002] FCA 559.
There is no evidence before the Court of the financial position of either the CEPU or Mr Harkins. However, as the penalties are agreed it does not appear to be an issue, and the Court can infer that both the CEPU and Mr Harkins have the capacity to pay.
Deterrence
General and specific deterrence are significant considerations given that deterrence is a primary objective of imposing penalties.[41] It is necessary for deterrence to be both specific and general. Specific deterrence relates to the need to deter a contravener from further contravention of the BCII Act, whilst general deterrence refers to the need to deter others from contravening the BCII Act by showing the seriousness with which the Court considers the contraventions. The penalties must be meaningful and consistent with other considerations to be taken into account in determining an appropriate penalty.[42] In the light of legislative changes in recent years, a “light handed approach” is no longer applicable to the imposition of civil penalties for breaches of industrial law.[43] The penalty imposed in Commonwealth Bank for breach of s.298K of the WR Act was reduced from $600,000 to $300,000 on appeal but a penalty of $150,000 for breach of a certified agreement was not reduced. [44] The reduction in the s.298K penalty was because the penalty was “manifestly excessive” having regard to previous penalties under s.298K of the WR Act.[45] There was however no disagreement in principle with the judgment in Commonwealth Bank, and in Commonwealth Bank Appeal Branson J noted this,[46] and went on to observe that it might be appropriate for penalties under s.298K of the WR Act to “rise appreciably”.[47] This more heavy-handed approach applies particularly where breaches are “serious, wilful and ongoing”.[48] This Court has previously adopted an approach to penalties in industrial law matters, albeit under the WR Act, reflecting the approach in Commonwealth Bank,[49] and it is appropriate to do so in this case, having regard to the fact that the contraventions were serious and wilful, but short rather than ongoing.
[41] Leighton Contractors at para 74 per Le Miere J.
[42] ACCC v IPM Operations Maintenance Loy Yang Pty Ltd (No 2) [2007] FCA 11 at para 66 per Young J.
[43] Finance Sector Union v Commonwealth Bank of Australia (2005) 224 ALR 467 at 487 per Merkel J; [2005] FCA 1847 at para 72 per Merkel J (“Commonwealth Bank”).
[44] Commonwealth Bank Appeal.
[45] Commonwealth Bank Appeal, FCR at 364 per Branson J; FCAFC at para 191 per Branson J (with whom Spender J specifically agreed on this point: FCR at 333 and 334; FCAFC at paras 17 and 19).
[46] Commonwealth Bank Appeal, FCR at 364 per Branson J; FCAFC at para 191 per Branson J.
[47] Commonwealth Bank Appeal, FCR at 364 per Branson J; FCAFC at para 192 per Branson J.
[48] Commonwealth Bank, ALR at 487 per Merkel J; FCA at para 72 per Merkel J.
[49] See Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 at para 22 per Mowbray FM; Flattery v Zeffirelli’s Pizza Restaurant [2007] FMCA 9 at para 16 per Mowbray FM.
In this case the penalties have been agreed between the parties at a meaningful level. They also reflect the seriousness of the contraventions and the relative culpability of the parties in relation to the contraventions.[50] The Court is satisfied that the penalties are appropriate and sufficient both as to general and specific deterrence.
[50] Leighton Contractors at paras 73-74 per Le Miere J.
Statutory purposes
The BCII Act is recent legislation, introduced following the findings of a lengthy royal commission into the building and construction industry.[51]
[51] Final Report of the Royal Commission into the Building and Construction Industry, Volumes 1-23 (Canberra: Commonwealth of Australia, 2003).
The BCII Act includes amongst its objects:
a)the improvement of the workplace relations framework in the building and construction industry;[52]
b)improving the bargaining framework to further encourage genuine bargaining at workplace level;[53]
c)promoting respect for the rule of law;[54] and
d)ensuring that building industry participants are accountable for unlawful conduct.[55]
[52] BCII Act, s.3(1).
[53] BCII Act, s.3(2)(a).
[54] BCII Act, s.3(2)(b).
[55] BCII Act, s.3(2)(d).
In assessing the seriousness of the conduct, and whether the level of penalty is appropriate, the Court must have regard to the statutory purposes of the BCII Act. One of the reasons why the conduct of the CEPU, and in particular Mr Harkins, is serious is that, unchecked, it would undermine some of the statutory purposes of the BCII Act which the Court has set out above.
Totality Principle
There is no dispute that the totality principle ought to be applied to penalty in this case. Where penalty is being fixed by the Court that principle requires that the Court impose a penalty appropriate for each contravention, and then check at the end of the process, to see if the aggregate is appropriate for the total contravening conduct involved.[56] The principle ensures the penalty to be imposed is not oppressive or crushing.[57]
[56] Caelli Constructions, FCR at 570-571 per Jessup J; FCAFC at paras 145-146 per Jessup J. See also Kelly v Fitzpatrick [2007] FCA 1080 at para 30 per Tracey J (“Kelly”): “The orthodox position … is that the starting point is the determination of appropriate penalties for each contravention of the statutory norm. The aggregate figure is then considered with a view to ensuring that it is an appropriate response to the conduct which led to the breaches”.
[57] Kelly at para 30 per Tracey J. See also Caelli Constructions at para 93 per Lander J: “The penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat.”
The position is slightly different where, as here, the Court is faced with an agreement on penalty expressed as a total sum in relation to the relevant contraventions. It is sufficient in a setting which involves an agreement on penalty for the Court to conclude that the overall penalty is appropriate and complies with the totality principle. [58]
[58] Compare Caelli Constructions, FCR at 571 per Jessup J; FCAFC at para 146 per Jessup J where the approach in para 33 above is said to relate to “a setting which … [does] not involve an agreement on penalty”, and see also FCR at 571 per Jessup J; FCAFC at para 145 per Jessup J: “The position as stated in Mill v The Queen (1988) CLR 59, on which Goldberg J relied [in Safeway Stores at 53], was described by Gummow, Callinan and Heydon JJ as the “orthodox, but not necessarily immutable, practice” in Johnson v The Queen (2004) 78 ALJR 616; 205 ALR 346 at [26].”
In this case, the Court is satisfied that the total penalty to be imposed on the CEPU and Mr Harkins is appropriate under the totality principle.
Penalties
The penalties of $11,000 and $8,800 imposed on the CEPU and Mr Harkins respectively reflect the seriousness of the breaches of the BCII Act by each of them in proportion to their relative culpability. The penalty imposed on the CEPU, at ten percent of the maximum penalty, is at the low end of the range of penalty. The penalty imposed on Mr Harkins, at forty percent of the maximum penalty, is at the upper end of the range of penalty which might be imposed upon a person with no prior breaches where co-operation and contrition are shown, and notwithstanding the seriousness and effect of the contraventions. Both penalties are nevertheless within the permissible range.
Declaration and Orders
Declarations and orders were made by the Court in Melbourne on
4 September 2007 in the terms set out immediately prior to these Reasons for Judgment.
I certify that the preceding thirty-eight (38) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate: M Hewitt
Date: 14 September 2007
28
24
4