CFMEU v Quality 1 Security Services Pty Ltd
[2009] FMCA 1076
•2 November 2009
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CFMEU v QUALITY 1 SECURITY SERVICES PTY LTD | [2009] FMCA 1076 |
| INDUSTRIAL LAW – Breach of provisions of Workplace Relations Act 1996 relating to freedom of association – where breaches admitted and parties put forward agreed statement of facts and joint submissions on penalty – matters to be taken into account by the court. |
| Workplace Relations Act 1996, ss.778, 792, 793, 807 Fair Work (Transitional Provisions) Act 2009 |
| Davids Distribution v TWU 91 IR 198 Australian Ophthalmic Supplies v McAlary Smith (2008) 165 FCR 560 CFMEU v Coal & Allied Operations (No 2) (1999) 94 IR 231 Seven Network Operations Pty Ltd v CEPU [2001] FCA 672 Alfred v Walter Construction Group Limited [2005] FCA 497 Veen v R (No 2) (1988) 164 CLR 465 Ponzio v B&P Caelli Constructions Pty Ltd [2007] FCAFC 65 |
| Applicant: | CONSTRUCTION FORESTRY MINING AND ENERGY UNION |
| Respondent: | QUALITY 1 SECURITY SERVICES PTY LTD |
| File Number: | SYG 1163 of 2009 |
| Judgment of: | Raphael FM |
| Hearing date: | 28 October 2009 |
| Date of Last Submission: | 28 October 2009 |
| Delivered at: | Sydney |
| Delivered on: | 2 November 2009 |
REPRESENTATION
| Counsel for the Applicant: | Mr I Latham |
| Solicitors for the Applicant: | CFMEU |
| Counsel for the Respondent: | Mr R de Meyrick |
| Solicitors for the Respondent: | A J Gallagher |
ORDERS
The Respondent pay a penalty pursuant to s.807 of the Workplace Relations Act 1996 for breach of s.792 of the Act on 15 October 2008 in the sum of $8,000.00.
The said penalty of $8,000.00 be paid to the Applicant Union pursuant to s.807(4) of the Act within twenty-eight days.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY |
SYG 1163 of 2009
| CONSTRUCTION FORESTRY MINING AND ENERGY UNION |
Applicant
And
| QUALITY 1 SECURITY SERVICES PTY LTD |
Respondent
REASONS FOR JUDGMENT
On 14 May 2009 the Construction Forestry Mining and Energy Union (the “Union”) filed an application in this court seeking declarations that the respondent had breached s.792 of the Workplace Relations Act 1996 (the “Act”) when an officer of the respondent threatened to dismiss employees for the reason for the reason or, for reasons which included, that the employees had made an enquiry or proposed to make an enquiry with the CFMEU about their wages. The Union also sought a declaration that on 17 October and 21 October the respondent had breached s.792 of the Act when it dismissed employees for the reason, or for reasons which included that the employees had make an enquiry or proposed to make an enquiry with the CFMEU about their wages. The Union also sought a declaration that on 31 October 2008 the respondent breached s.792 of the Act when it caused a notice to be posted which indicated that any employee who attended a meeting with the CFMEU would be dismissed. The Union sought orders that a civil penalty be imposed upon the respondent in respect of the contraventions referred to, that those penalties be paid to the Union and that the respondent pay the Union’s costs. The matter proceeded to a directions hearing on 24 June 2009 when orders were made for the filing of evidence and the preparation of the case for trial including a provision for mediation. The matter was originally set down for hearing on 23 and 24 September 2009 but that date was later moved to 28 and 29 October. The respondent filed a Response on 3 June 2009 opposing the orders sought and indicating that it disputed the allegations made by the applicant Union.
Shortly before the matter was due to be heard the court was informed that the parties had come to an agreement about the matters in issue and that the respondent accepted that had it breached s.792 in the manner described in the Agreed Statement of Facts, details of which are set out below. The applicant and the respondent had also agreed that an appropriate penalty to be paid by the respondent in respect of this breach was the sum of $8,000.00 and that the court should not make any order as to costs. These agreements avoided the substantive hearing of the application but the parties attended for the purposes of putting to the court their position on penalty, accepting that whilst the parties could put forward a joint penalty proposal the final decision on penalty would be that of the court guided by the authorities. This decision relates to the penalty to be imposed against the respondent. The court believes that the agreement between the parties as to the payment of the penalty moneys to the Union and that there be no order as to costs are agreements with which the court should not concern itself.
The Agreed Statement of Facts, which is the basis upon which the court will make its decision as to the appropriate penalty is as follows:
“1.Major work was conducted by builders known as McConaghy Built on the Grafton Shopping world complex extending over a period of about 18 months ending on 6 March 2009. It involved substantial alterations and extensions to an existing shopping centre. It was a difficult project more so because it involved construction work going on while the centre was still trading. It also involved relocating traders on a temporary basis to sites within the centre whilst their new site was being completed. It involved working around the clock for quite a few months.
2.Those worked on the site were a mixture of private contractors engated by McConaghy Built, and other tradesmen and labourers who were engaged by labour hire companies, one of which was the Respondent, Quality 1 Security Services Pty Ltd. The sole Director of the Respondent is Stephen Michael Austin.
3.On 15 October 2008, the site foreman for McConaghy Built, Tom Furness arranged a meeting of workers employed by Quality 1 Security Services Pty Ltd for 5pm that day to discuss ongoing problems and the future of the works at the site. Tom Furness addressed the meeting. He indicated the job was coming to an end and that as things slowed down people would be finished up. Stephen Austin spoke at the meeting. He spoke about tools disappearing. He also spoke about people “going behind his back” and complaining about their wages. Some of the employees of Quality 1 Security Services Pty Ltd understood Stephen Austin to be threatening their employment for talking to the Union.
4.On 17 October 2008, a few of the Respondent’s employees received a week’s notice to finish up on 24 October 2008 as the job was coming to an end. Stephen Austin accepts that in the circumstances his statements at the meeting on 15 October 2008 could reasonably have been interpreted by some of the Respondent’s employees as a threat of dismissal if they had “gone behind his back” and spoken to the Union about their pay rates.
5.Stephen Austin regrets that his language at the meeting was such that it could reasonably be interpreted as a threat as he fully accepts that all employees should be confident they can associate with whomever they please and can freely seek the advice of the Union or anyone else without feeling threatened.”
The court has power to hear these proceedings, being a breach of the Workplace Relations Act 1996 pursuant to the Fair Work (Transitional Provisions) Act 2009 Schedule 2, s.11:
“11(1)The WR Act continues to apply, on and after the WR Act repeal day, in relation to conduct that occurred before the WR Act repeal day.”
Section 792 of the Act falls within Part 16 – Freedom of Associate at s.778 the objects of that Part are set out:
“In addition to the object set out in section 3, this Part has the following objects:
(a)to ensure that employers, employees and independent contractors are not discriminated against or victimised because they are, or are not, members of officers of industrial associations;
(b)to ensure that employers, employees and independent contractors are not discriminated against or victimised because they are, or are not, members of officers of industrial associations;
(c)to provide effective relief to employers, employees and independent contractors who are prevented or inhibited from exercising their rights to freedom of association;
(d)to provide effective remedies to penalise and deter persons who engage in conduct which prevents or inhibits employers, employees or independent contractors from exercising their rights to freedom of association.”
It is not in dispute that the CFMEU is an industrial association within the meaning of s.779.
Section 792 describes the conduct which is proscribed if it is done or threatened to be done for a prohibited reason:
“792 Dismissal etc. of members of industrial associations etc.
(1)An employer must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following:
(a)dismiss an employee;
(b)injure an employee in his or her employment;
(c)alter the position of an employee to the employee’s prejudice;
(d)refuse to employ another person as an employee;
(e) discriminate against another person in the terms or conditions on which the employer offers to employ the other person as an employee.
(2)Subsection (1) is a civil remedy provision.
Note:See Division 9 for enforcement.
(3)For the purposes of paragraph (1)(d), an employer does not refuse to employ another person if the employer does not intend to employ anyone.
(4)An employer does not contravene subsection (1) because of paragraph 793(1)(i) unless the entitlement described in that paragraph is the sole or dominant reason for the employer doing any of the things described in paragraphs (1)(a), (b), (c), (d) and (e) of this section.
(5)A person must not, for a prohibited reason, or for reasons that include a prohibited reason, do or threaten to do any of the following:
(a) terminate a contract for services that he or she has entered into with an independent contractor;
(b) injure the independent contractor in relation to the terms and conditions of the contract for services;
(c) alter the position of the independent contractor to the independent contractor’s prejudice;
(d) refuse to engage another person as an independent contractor;
(e) discriminate against another person in the terms or conditions on which the person offers to engage the other person as an independent contractor.
(6)Subsection (5) is a civil remedy provision.
Note:See Division 9 for enforcement.
(7)For the purposes of paragraph (5)(d), a person does not refuse to engage another person if the person does not intend to engage anyone.
(8)A person does not contravene subsection (5) because of paragraph 793(1)(i) unless the entitlement described in that paragraph is the sole or dominant reason for the person doing any of the things described in paragraphs (5)(a), (b), (c), (d) and (e) of this section.”
Prohibited reasons are defined in s.793 of which the relevant sub-sections are 793(1)(a), (i) and (j):
“793 Prohibited Reasons
(1)Conduct referred to in subsection 792(1) or (5) is for a prohibited reason if it is carried out because the employee, independent contractor or other person concerned:
(a)is, has been, proposes to become or has at any time proposed to become an officer, delegate or member of an industrial association; or
(i)is entitled to the benefit of an industrial instrument, an order of an industrial body or the Australian Fair Pay and Conditions Standard; or
(j)has made or proposes to make any inquiry or complaint to a person or body having the capacity under an industrial law to seek:
(i) compliance with that law; or
(ii) the observance of a person’s rights under an industrial instrument; or”
The penalties for contravention of the civil remedy provisions of Part 16 are found at s.807
“807 Penalties etc. for contravention of civil remedy provisions
(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.
Note: Division 3 of Part 14 contains other provisions relevant to civil remedies.”
It is not in dispute that the applicant Union is an eligible person for the purposes of s.807(4).
In an Amended Outline of Submissions, provided by the applicant, reference has been made to Davids Distribution v TWU 91 IR 198 where the Full Federal Court said of similar, although not identical, provisions that:
“[106] The objective of s298K is to ensure the threat of dismissal or discriminatory treatment cannot be used by an employer to destroy or frustrate an employee's right to join an industrial association and to take an active role in that association to promote the industrial interests of both the employee and association.
[107]In the context of the Act, Pt XA does not stand alone. It is aimed at ensuring that employees may band together, if they wish, for collective bargaining of the type provided for in the Act to achieve the broader objectives of the Act as contained in s3. In this regard the Act operates in the same way and to the same ends as similar legislation in the United States of America (National Labor Relations Act s2(3), s7, s8(a)(1,3), s13 as amended 29 USCAS 152(3), 157, 158(a), (1,3), 163); American Ship Building Co v National Labor Relations Board 85 S Ct 955 (1965); National Labor Relations Board v Brown 85 S Ct 980 (1965). That which is protected by such legislation is more than the right to be a member. It is the right to participate in protected union activities, including the taking of collective industrial action against an employer to seek to obtain better industrial conditions: American Ship Building Co at 965.”
The parties accept that the court has a broad discretion not fettered by a checklist of mandatory criteria in coming to a penalty decision; Australian Ophthalmic Supplies v McAlary Smith (2008) 165 FCR 560; 246 ALR 35 at [12], [86], [87] and [91]. The court must decide upon penalty looking at the facts of the individual case and not attempt to make a line by line comparison with other cases. The matters which should be taken into account by the court in considering penalty were considered by Branson J in CFMEU v Coal & Allied Operations (No 2) (1999) 94 IR 231 at 232 where her Honour suggested that the following matters be taken into consideration:
“(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 Part XA of the Act.
(c)Where more than one contravention of Part XA 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 Part XA 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.”
In addition to these matters the court should consider the cost of the contravention, specific and general deterrence, the flagrancy and deliberateness of the breach, the offender’s past record of behaviour and any contrition displayed by the offender; Seven Network Operations Pty Ltd v CEPU [2001] FCA 672 per Merkel J. As the court has a discretion whether to impose or not to impose a penalty it must be satisfied that it is appropriate in all of the circumstances to impose a penalty before an order is made; Alfred v Walter Construction Group Limited [2005] FCA 497 at [7]. I propose to look at the relevant matters in relation to penalty in turn.
The breach which has been admitted arises out of statements by Mr Austin that people were going behind his back and complaining about their wages. Mr Austin accepts that an inference could be drawn from those words that the complaints were being made to the Union and that they could be taken as a threat to the employee’s continued employment. In fact the employees who were given notice were given notice on 24 October 2008 because the job was coming to an end. It would appear that the threats did not discourage employees from speaking to the Union nor were the job losses due to the employees so speaking. The threats do not appear to have been blatant although Mr Austin has rightly acknowledged that the interpretation put upon them by the employees was open to them. I do not believe that this activity could be considered in the worst category of case for which the maximum penalty is reserved; Veen v R (No 2) (1988) 164 CLR 465 at 478. I am advised that the respondent has not been previously found to have engaged in conduct contravening the Act and it is accepted that there was only one contravention involved. It would appear from the Agreed Statement of Facts that there were no apparent adverse consequences to the conduct found to be in contravention. I accept that there is a need for the protection of industrial freedom of the association. That need is set out in the objects of the Act previously extracted. There is therefore certainly a need for deterrence in the general sense although I am satisfied that given the apparent good record of the respondent there is not such a great need for a specific deterrence. I do believe that it is important to send a message to employers generally that the right of freedom of association is to be respected.
The Union accepts that the respondent, through Mr Austin, has shown contrition and has avoided the necessity for a lengthy hearing (the matter was set down for two days) by coming to the agreement upon which this decision is based. The facts agreed constitute actions which are less serious than those originally asserted. I am informed that because of the agreement there has been a considerable saving in legal costs. The respondent company is not large, it currently has three casual employees and a director.
I have taken all these matters into account when considering the agreed proposed penalty of $8,000.00. In Ponzio v B&P Caelli Constructions Pty Ltd [2007] FCAFC 65 Jessup J said at [129]:
“In Mobil Oil, the Full Court considered NW Frozen Foods Pty Ltd v ACCC[1996] FCA 1134; (1996) 71 FCR 285, and extracted therefrom a number of propositions ([2004] ATPR |P 41-993 at [53]), one of which was that set out in par [6] of the reasons of the trial Judge in the present matter, namely:
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.
Neither in NW Frozen Foods nor in Mobil Oil did the Full Court expand on the meaning of the phrase "permissible range". I consider that the phrase refers 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.”
If the maximum penalty is $33,000.00 the proposed penalty is slightly above the median of the lower range (0 - $10,000.00). Whilst it might not, in the absence of further evidence about the respondent’s financial position, have been exactly the figure I would have awarded, I could not say that it is manifestly inadequate. It is certainly not manifestly excessive. I would therefore propose to accept the figure put forward by the parties as the appropriate penalty which I shall order be paid to the applicant Union.
I certify that the preceding thirteen (13) paragraphs are a true copy of the reasons for judgment of Raphael FM
Associate:
Date: 2 November 2009
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