Construction, Forestry, Mining and Energy Union-Construction and General Division, Queensland Builders' Labourers' Divisional Branch

[2014] FWCD 2437

[2014] FWCD 2437

The attached document replaces the document previously issued with the above code on 11

April 2014.

The reference in endnote 43 has been corrected.

James Hall

Dated 15 April 2014 [2014] FWCD 2437

DECISION

Fair Work Act 2009
s.512—Application for a right of entry permit
Construction, Forestry, Mining and Energy Union
(RE2013/1638)
MR ENRIGHT	MELBOURNE, 11 APRIL 2014
Background

[1] On 18 October 2013, an application under s. 512 of the Fair Work Act 2009 (the Act) dated 18 October 2013 was lodged in the Fair Work Commission (the Commission) by the Construction, Forestry, Mining and Energy Union (CFMEU) for a permit to enter and inspect premises for the following official of the CFMEU:

Kane Pearson: RE2013/1638

[2] I acknowledge receipt on 23 January 2014 of a permit returned to the Commission by Mr Pearson in matter RE2010/3822. The CFMEU made an application pursuant to s. 516(2) of the Act to extend the date on which that permit would have otherwise expired in matter RE2013/1684. In two decisions dated 18 November and 12 December 2013,1 I granted an extension to the expiry date of the permit until 17 January 2014.

[3] The application was supported by declarations from Mr David Hanna, the relevant Committee of Management member, and Mr Kane Pearson, the proposed permit holder, both dated 18 October 2013 (the declarations). Mr Hanna is the Branch Secretary of the Queensland Builders' Labourers' Divisional Branch (the Divisional Branch) of the Construction and General Division of the CFMEU. Mr Pearson is the Branch Assistant Secretary of the Divisional Branch.

[4]        The declarations disclose that:

 Mr Pearson and the CFMEU were ordered to pay penalties pursuant to the

Building and Construction Industry Improvement Act 2005 (the BCII Act) in the

matter of Lend Lease Project Management & Construction (Australia) Pty Ltd v

Construction, Forestry, Mining and Energy Union (No 5) [2012] FCA 1144 (Lend

Lease v CFMEU);

 Mr Pearson and the Australian Building Construction Employees and Builders’

Labourers’ Federation (Queensland Branch) Union of Employees (BLFQ), a state- registered2 and transitionally recognised association,3 were ordered to pay penalties pursuant to the Workplace Relations Act 1996 (the WR Act) in the matter of

Lovewell v Kane Pearson & Anor [2011] FMCA 102 (Lovewell v Pearson); and

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 The CFMEU was ordered to pay a penalty pursuant to the BCII Act in the matter of

Director, Fair Work Building Inspectorate v Andrew Sutherland & Ors (FWBC v

Sutherland).4

[5] On 20 November 2013, the Commission wrote to the CFMEU noting the above matters and invited it to make any submissions it wished to make in the present matter regarding Mr Pearson’s status as a “fit and proper person” to hold an entry permit addressing the “permit qualification matters” set out in section 513(1) of the Act. In this regard, the Commission particularly sought submissions concerning the conduct of Mr Pearson in FWBC

v Sutherland given the absence of published reasons for decision in that matter. The

Commission also invited the CFMEU to make submissions in relation to the then pending matters of Director, Fair Work Building Industry Inspectorate v Joseph Myles & Ors (FWBCv Myles)5, Baulderstone Pty Ltd & Ors v Construction, Forestry, Mining and Energy Union &

Ors (Baulderstone v CFMEU)6 and John Holland Pty Ltd ACN 004 282 268 & Anor v

Construction, Forestry, Mining and Energy Union & Ors7 (John Holland v CFMEU) where

Mr Pearson was listed as a respondent. The Commission directed that any such submissions should be filed by 4 December 2013.

[6]         On 3 December 2013, the CFMEU filed brief written submissions with the

Commission.

[7] On 12 December 2013, the Commission wrote to the CFMEU inviting it to make further submissions regarding whether the interlocutory relief granted by Rangiah J on 4, 7 and 8 November 2013 in the matter of John Holland v CFMEU was a relevant matter for the Commission to take into account for the purposes of section 513(1)(g) of the Act.

[8] On 12 December 2013, the Office of the Fair Work Building Inspectorate (FWBC) advised that it wished to make submissions in the present matter and provided the Commission with a copy of a statement of agreed facts filed in the matter of FWBC v

Sutherland.

[9] On 13 December 2013, the Commission wrote to the FWBC advising that I had granted its request to file submissions in the present matter and directed that such submissions should by lodged by 20 December 2013. On the same day, the Commission advised the CFMEU that I had granted the FWBC’s request to lodge submissions in the present matter and that it would be provided with an opportunity to lodge submissions it may wish to make in reply.

[10] On 18 December 2013, the CFMEU filed further written submissions in response to the Commission’s correspondence of 12 December 2013.

[11] On 19 December 2013, the FWBC advised that a decision regarding liability in the matter of FWBC v Myles was to be issued on 20 December 2013 and, given this, requested an extension of time to file submissions in the present matter until 24 December 2013. This request was granted.

[12] On 24 December 2013, the FWBC filed written submissions in the present matter and a notice to the General Manager of the Commission pursuant to s. 72 of the Fair Work

(Building Industry) Act 2012 (the FW(BI) Act).

[2014] FWCD 2437

[13] On 7 January 2014, the Commission wrote to the CFMEU inviting it to make submissions in reply to the submissions of the FWBC and directed that such submissions should be filed by 14 January 2014. On the same day, the CFMEU requested an extension of time to file submissions by 21 January 2014. This request was granted.

[14] On 21 January 2014, the CFMEU requested a further extension of time to lodge submissions by 28 January 2014. This request was also granted.

[15] On 29 January 2014, the CFMEU lodged written submissions in reply to the

submissions of the FWBC. Although this was outside the time granted by the Commission for
lodging submissions, I will allow the submissions to be filed on this later date.

[16]      On 4 February 2014, the Commission wrote to the CFMEU noting that the matter of

FWBC v Myles was listed for penalty hearing on 28 February 2014 and advising that, in the

circumstances, it was my view that I should not fully consider the present application until the
final disposition of that matter.

[17] On 3 March 2014, the FWBC wrote to the Commission advising that on 28 February 2014, Burnett J delivered an ex tempore judgement in the matter of FWBC v Myles imposing penalties upon both Mr Pearson and the CFMEU. The FWBC further advised that it would forward copies of the sealed orders of Burnett J upon receiving them and provide further correspondence to the Commission once it had an opportunity to review the transcript of the proceedings of the penalty hearing.

[18] On 7 March 2014, the FWBC advised the Commission that it had yet to receive sealed orders in relation to the ex tempore judgement delivered on 28 February 2014 and that the transcript of the penalty hearing of the same date did not include that judgement. The FWBC further informed the Commission that it was anticipating that written reasons for judgement would be published in due course and requested an opportunity to further address the Commission in relation to the matter of FWBC v Myles once it had the benefit of reading them.

[19] On 11 March 2014, the FWBC provided copies of the written orders of Burnett J made on 28 February 2014 imposing penalties upon Mr Pearson and the CFMEU.

[20] On 18 March 2014, the CFMEU also provided copies of these orders and made brief

submissions regarding the significance of the penalties imposed in relation to whether Mr
Pearson is a “fit and proper person” to hold an entry permit.

[21] Given that written reasons for judgement regarding the penalties imposed in the matter of FWBC v Myles have not yet been issued at the time of this decision, and considering the obligations of the Commission to perform its functions in a timely fashion,8 I will deal with the present matter without further delay.

[22] At the time this decision was issued, the matter of Baulderstone v CFMEU had been

discontinued and the matter of John Holland v CFMEU was still pending.
[2014] FWCD 2437

Legislative framework

[23] Under s.512 of the Act, the Commission may, on application by an organisation, issue an entry permit to an official of the organisation if it is satisfied that the official is a “fit and proper person” to hold an entry permit. In deciding this, the Commission must take into account the “permit qualification matters” set out in s.513(1).

[24] Section 513(1) of the Act is set out below:

“513 Considering application

(1) In deciding whether the official is a fit and proper person, the FWC must take into

account the following permit qualification matters:

(a) whether the official has received appropriate training about the rights and

responsibilities of a permit holder;

(b) whether the official has ever been convicted of an offence against an

industrial law;

(c) whether the official has ever been convicted of an offence against a law of

the Commonwealth, a State, a Territory or a foreign country, involving:

(i) entry onto premises; or

(ii) fraud or dishonesty; or

(iii) intentional use of violence against another person or intentional
damage or destruction of property;

(d) whether the official, or any other person, has ever been ordered to pay a penalty under this Act or any other industrial law in relation to action taken by the official;

(e) whether a permit issued to the official under this Part, or under a similar law of the Commonwealth (no matter when in force), has been revoked or suspended or made subject to conditions;

(f) whether a court, or other person or body, under a State or Territory
industrial law or a State or Territory OHS law, has:

(i) cancelled, suspended or imposed conditions on a right of entry for industrial or occupational health and safety purposes that the official had under that law; or

(ii) disqualified the official from exercising, or applying for, a right of entry for industrial or occupational health and safety purposes under that law;

(g) any other matters that the FWC considers relevant.”

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[25] Sections 512–513 are within Part 3–4 of the Act, entitled ‘Right of Entry’. The objects of Part 3–4 are set out at s.480:

“480 Object of this Part

The object of this Part is to establish a framework for officials of organisations to enter premises that balances:

(a) the right of organisations to represent their members in the workplace, hold discussions with potential members and investigate suspected contraventions of:

(i) this Act and fair work instruments; and

(ii) State or Territory OHS laws; and

(b) the right of employees and TCF award workers to receive, at work,

information and representation from officials of organisations; and

(c) the right of occupiers of premises and employers to go about their business
without undue inconvenience.”

[26] In Re Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia9, Delegate Nassios made the following observations

regarding the objects of Part 3–4 of the Act with respect to an application for an entry permit:

“[21] The objects of Part 3-4 are set out in section 480 of the Act. The object of right of entry provisions is to establish a framework for officials of organisations to enter premises while balancing competing rights of organisations, employees and occupiers/employers. Organisations have the right to represent their members in the workplace, to hold discussions and to investigate suspected contraventions of relevant laws. Balanced against these rights are the rights of occupiers and employers ‘to go about their business without undue inconvenience’. The objects set out in section 480 of the Act emphasise the mutual rights and responsibilities of participants in the system in much the same way as the objects under the Workplace Relations Act 1996. Earlier decisions regarding the granting of right of entry permits under the Workplace Relations Act 1996 have made reference to the ‘important contextual issue’ of the nature of the power that is exercised by permit holders. In Vivienne Daniels v Joe Patti

& Anor, Munro J observed that:

Permit holders exercise a power that causes them to be exercising a public right and duty. Those rights, powers and duty stem from the statute. Due diligence, reasonable civility, and avoidance of unnecessary obstruction in the exercise of the powers under Division 11A are not only to be expected, they are a statutory condition of the powers being retained.

The observations of Munro J apply equally to the granting of right of entry permits under the legislative regime set out in the Fair Work Act 2009.”10 (endnotes omitted)

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[27] Although I am not bound by the above views I find they are a useful context for considering an application for an entry permit.

Submissions

[28]      As noted above, both the FWBC and the CFMEU filed written submissions in this

matter.

FWBC Submissions

[29] The written submissions of the FWBC filed with the Commission on 24 December 2013 comprise both general submissions and specific submissions regarding Mr Pearson.

[30]      The general submissions address five primary issues, namely:

 The statutory framework of the Commission’s powers under s. 512 of the Act

including the discretionary nature of this power, the proper construction to be given to the term “fit and proper person” as it appears in that provision and the particular relevance of the “permit qualification matters” set out in paragraphs (a), (d) and (g) of subsection 513(1) of the Act for the current matter before me;

 The history of the CFMEU in contravening various pieces of industrial legislation;

 An alleged failure to adequately disclose relevant matters in the application

currently before me;

 Further orders that have been made against the CFMEU and/or Mr Pearson since

the application was lodged on 18 October 2013; and

 The need for the issues that arise in the present matter before me to be dealt with in

a transparent manner and in accordance with proper principles.

[31] The specific submissions of the FWBC also raise the following matters beyond those addressed by the general submissions:

 The penalties imposed in the matters of Lend Lease v CFMEU, Lovewell v Pearson

and FWBC v Sutherland for the purposes of subsection 513(1)(d) of the Act;

 The factual context that led to the imposition of the penalties in those matters and

the conduct complained of against the CFMEU and Mr Pearson in John Holland v

CFMEU;

 The nature of the “industrial misconduct” Mr Pearson was found to have engaged

in the matters of Lend Lease v CFMEU, Lovewell v Pearson and FWBC v

Sutherland including the substantial inconvenience caused to employers

particularly in relation to major construction projects, an inadequate appreciation for lawful alternatives and the protracted period in which Mr Pearson engaged in such conduct in the matter of Lend Lease v CFMEU; and

[2014] FWCD 2437

 The prospects of Mr Pearson “re-offending” including a lack of genuine contrition

or remorse on the part of Mr Pearson, a disregard for the privilege of holding an entry permit, the multiple contraventions of s. 500 of the Act found to have occurred in the matter of FWBC v Myles and the adequacy of the training, incentive and support systems Mr Pearson has and will continue to receive as an entry permit holder.

[32] The FWBC concludes that, having regard to the “permit qualification matters” in subsection 513(1) of the Act, Mr Pearson “has failed to demonstrate that he possesses the requisite fitness and propriety to hold an entry permit” and, therefore, the Commission should refuse to issue an entry permit to him. The FWBC particularly highlights that the contraventions of industrial legislation committed by Mr Pearson “strikes at the heart of abusing the rights and privileges he enjoys as a permit holder”.

[33] The FWBC submits that, alternatively, if the Commission determines that Mr Pearson

is a “fit and proper person” to hold an entry permit, then conditions should be imposed on any
permit issued to him issued to him pursuant to s. 515 of the Act.

CFMEU Submissions

[34]      The CFMEU filed three separate sets of submissions in this matter.

[35] In its first set of submissions lodged on 3 December 2013, the CFMEU provides that in the matter of FWBC v Sutherland Mr Pearson filed an affidavit denying all allegations against him regarding contraventions of industrial law, that the proceedings against him in that matter were discontinued and that the agreed statement of facts filed in the associated proceedings provided that Mr Pearson was involved in one contravention of the BCII Act on one day.

[36] Regarding the matters of FWBC v Myles, Baulderstone v CFMEU and John Holland v CFMEU, the CFMEU noted that Mr Pearson had denied all allegations raised and that there

had been no adverse findings made against him at the time the submissions were filed. The CFMEU submitted that in the absence of adverse findings being made against Mr Pearson, those matters were not required to be disclosed to the Commission in the application currently before me and should not affect my consideration of whether Mr Pearson is a “fit and proper person” to hold an entry permit.

[37] The CFMEU argues that Mr Pearson should be issued an entry permit without the imposition of any conditions but that if the Commission determines to impose any such conditions, then they should not be “harsh or interfere with Mr Pearson’s ability to perform his job under the Union’s registered rules.”

[38] The second set of submissions filed on 18 December 2013 address the relevance of the interlocutory relief granted in the matter of John Holland v CFMEU for the purposes of the Commission’s determination of whether Mr Pearson is a “fit and proper person” to hold an entry permit. The essential thrust of those submissions is that there should be no adverse inferences drawn against Mr Pearson in the present matter related to the interlocutory relief granted given the nature of interlocutory proceedings and the requisite standard of proof that must be established in such matters.

[2014] FWCD 2437

[39] On 29 January 2014, the CFMEU filed submissions in reply to the submissions of the FWBC. Those submissions address three primary issues, namely:

 The alleged failure of Mr Pearson and the CFMEU in properly disclosing relevant

matters in the application currently before me;

 The relevance of the conduct of Mr Pearson in the matters of Lend Lease v

CFMEU, Lovewell v Pearson, FWBC v Sutherland, FWBC v Myles and John Holland v CFMEU for the purposes of determining whether he is a “fit and proper

person” to hold an entry permit; and

 Mr Pearson’s role as an office holder in both the Divisional Branch and the BLFQ.

[40] The CFMEU argues that the submissions of the FWBC in relation to those issues are without foundation and should not be accepted by the Commission. The CFMEU concludes that Mr Pearson meets the requirements for holding, and should be issued, an entry permit. The CFMEU submits that any entry permit issued to Mr Pearson should not have conditions imposed upon it but that if such conditions are imposed, they should not be in the form proposed by the FWBC in its submissions.

Permit Qualification Matters

[41] Section 512 of the Act provides that, upon application by an organisation, the Commission may issue an entry permit to an official of that organisation if it is satisfied that the official is a “fit and proper person to hold the entry permit”. Thus, the task of the Commission in the present matter is to consider and determine whether Mr Pearson is a “fit and proper person” not in a universal sense entirely divorced from any context but specifically whether he is a “fit and proper person” to hold an entry permit. As observed by Toohey and Gaudron JJ in Australian Broadcasting Tribunal v Bond (1990) 170 CLR 321 at 380:

“The expression ‘fit and proper person’, standing alone, carries no precise meaning. It takes its meaning from its context, from the activities in which the person is or will be engaged and the ends to be served by those activities. The concept of ‘fit and proper’ cannot be entirely divorced from the conduct of the person who is or will be engaging in those activities. However, depending on the nature of the activities, the question may be whether improper conduct has occurred, whether it is likely to occur, whether it can be assumed it will not occur, or whether the general community will have confidence that it will not occur. The list is not exhaustive but it does indicate that, in certain contexts, character (because it provides an indication of public perception as to likely future conduct) may be sufficient to ground a finding that a person is not fit and proper to undertake the activities in question.”

[42] Therefore, the determination of whether a particular official is a “fit and proper person” to hold an entry permit for the purposes of section 512 of the Act is required to be made by having regard to the nature of the statutory right of entry powers potentially provided to the official pursuant to Part 3-4 of the Act, the activities that the official will be engaged in when exercising such powers and the ends to be served by such activities. As the Full Bench of the Commission in The Maritime Union of Australia [2014] FWCFB 1973 (The Maritime

Union of Australia [2014]) observed:

[2014] FWCD 2437

“The question of whether an officer is a fit and proper person to hold an entry permit will therefore necessarily require a consideration of the rights the holder of an entry permit may exercise, the limitations on and conditions attaching to the exercise of those rights, and the responsibilities that must be discharged in the exercise of those rights. These are all to be found in Part 3-4 of the Act”.11

[43] Section 513(1) of the Act provides that, in order to make the primary determination required to be made pursuant to s. 512 of the Act, the Commission must take into account the “permit qualification matters” listed at paragraphs (a) to (g) therein. Although several of those matters do not directly relate to statutory right of entry powers, the Commission is bound to take them into account and apply them in a manner that assists the Commission in determining whether a particular official is a “fit and proper person” to hold an entry permit.

[44] I will consider each of the “permit qualification matters” separately below as they pertain to the current matter before me.

Training about rights and responsibilities

[45] Section 513(1)(a) of the Act requires me to take into account whether Mr Pearson has received appropriate training about the rights and responsibilities of a permit holder. The declarations disclose that Mr Pearson last undertook such training on 18 October 2013. The content of the training material was approved by, then, Fair Work Australia on 6 October 2009.

[46] In its submissions, the FWBC suggests that the training undertaken by Mr Pearson does not appear to be sufficient given the unlawful conduct he has engaged in since 2009, the length of time that elapsed between the commission of that conduct and the relevant training completed and the subsequent proceedings in John Holland v CFMEU. The FWBC further submits that Mr Pearson should have also undertaken training regarding compliance with industrial law generally beyond right of entry.

[47]      This matter will be considered later in this decision.

Conviction/s against an industrial law

[48] Section 513(1)(b) of the Act requires me to take into account whether Mr Pearson has ever been convicted of an offence against an industrial law. The declarations do not disclose any such convictions against Mr Pearson. There is no other evidence before me that suggests otherwise.

Conviction/s involving fraud, dishonesty or intentional use of violence

[49] Section 513(1)(c) of the Act requires me to take into account whether Mr Pearson has ever been convicted of an offence against a law of the Commonwealth, a State, a Territory or a foreign country involving entry onto premises, fraud or dishonesty or intentional use of violence against another person or intentional damage or destruction of property. The declarations do not disclose any such convictions against Mr Pearson. There is no other evidence before me that suggests otherwise.

Order/s to pay a penalty under an industrial law in relation to action taken by the official
[2014] FWCD 2437

[50] Section 513(1)(d) of the Act requires me to take into account whether Mr Pearson, or any other person, has ever been ordered to pay a penalty under the Act or any other industrial law, in relation to action taken by Mr Pearson. As noted at paragraph [4] of this decision, Mr Pearson, the BLFQ and/or the CFMEU were ordered to pay penalties under the BCII Act in

Lend Lease v CFMEU and FWBC v Sutherland and under the WR Act in Lovewell v Pearson.

Further, both Mr Pearson and the CFMEU were ordered to pay penalties under the Act in the matter of FWBC v Myles. These matters will be considered in detail later in this decision.

Permit/s revoked, suspended or made subject to conditions under Commonwealth law

[51] Section 513(1)(e) of the Act requires me to take into account whether a permit issued to Mr Pearson under Part 3–4 of the Act, or under a similar law of the Commonwealth (no matter when in force), has been revoked, suspended or made subject to conditions. The declarations do not disclose that any such permits issued to Mr Pearson having ever been revoked, suspended or made subject to conditions. There is no other evidence before me that suggests otherwise.

Right of entry revoked, suspended or made subject to conditions or a disqualification imposed under State or Territory industrial law or State or Territory OHS law

[52] Section 513(1)(f) of the Act requires me to take into account whether a court, or other person or body, under a State or Territory industrial law or State or Territory occupational health and safety (OHS) law has cancelled, suspended or imposed conditions on a right of entry for industrial or OHS purposes that Mr Pearson had under that law or disqualified Mr Pearson from exercising, or applying for, a right of entry for industrial or OHS purposes under that law. The declarations do not disclose any cancellation, suspension or imposition of conditions on a right of entry Mr Pearson has held for industrial or OHS purposes by any court, or other person or body, under a State or Territory industrial law or an OHS law. Further, the declarations do not disclose that Mr Pearson has been disqualified by any court, or other person or body, under a State or Territory industrial law or an OHS law, from exercising, or applying for, a right of entry for industrial or OHS purposes. There is no other evidence before me that suggests otherwise.

Any other matter the Commission considers relevant

[53] Section 513(1)(g) of the Act provides the Fair Work Commission with a broad discretion to take into account any other matters it considers relevant. This discretion is limited to a consideration of matters that pertain to a proposed permit holder’s status as a “fit and proper person” to hold an entry permit. The proper construction should be determined by examining the provision in the context of the Act as a whole and the specific considerations set out in subsections 513(1)(a)-(f) of the Act in particular in the sense that such matters must fall within the purview of relevance delineated by the subject, scope and purpose of the Act, particularly Part 3-4 of the Act.12 Relevant considerations in this regard include whether a

particular matter has an industrial or OHS “flavour” or context, the extent to which it raises issues analogous to the considerations set out in subsections 513(1)(a)-(f) of the Act and its pertinence to the exercise of the public right associated with the exercise of statutory right of entry powers pursuant to Part 3-4 of the Act.

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[54] As noted above, the submissions of the FWBC address the issues of the history of the CFMEU in contravening various pieces of industrial legislation, an alleged failure to adequately disclose relevant matters in the application currently before me, further orders that have been made against the CFMEU and/or Mr Pearson since the application was lodged including those made in the matter of John Holland v CFMEU, the factual context which led to the imposition of the relevant penalties in the matters outlined above and the prospects of Mr Pearson “re-offending”. The FWBC and the CFMEU also briefly addressed the matter of Mr Pearson’s role as an office holder in both the Divisional Branch and the BLFQ in their submissions.

[55]      These matters will be considered in further detail below.

[56]      In this regard, I have also taken into consideration the objects of Part 3-4 of the Act.

Training about rights and responsibilities

[57] As noted above, the most recent training undertaken by Mr Pearson regarding the rights and responsibilities of permit holder occurred on 18 October 2013. That training was delivered by the Australian Council of Trade Unions (ACTU) and has previously been approved by the then, Fair Work Australia, for the purposes of satisfying the permit qualification matter set out in subsection 513(1)(a) of the Act.

[58] The declarations also disclose that Mr Pearson previously undertook training delivered by Slater & Gordon Lawyers regarding right of entry under Part 3-4 of the Act and the Work

Health and Safety Act 2011. This training appears to have been undertaken in accordance with

the terms of settlement in Lend Lease v CFMEU.

[59] The FWBC submits that it does not appear that the training undertaken by Mr Pearson is sufficient given the conduct he has been found to have engaged in since 2009 in the matters of Lend Lease v CFMEU, FWBC v Sutherland and Lovewell v Pearson and the subsequent proceedings involving Mr Pearson. The FWBC further argues that Mr Pearson should also undertake training regarding compliance with industrial law generally beyond right of entry under Part 3-4 of the Act.

[60] I accept that Mr Pearson has undertaken appropriate training for the purposes of subsection 513(1)(a) of the Act. The training delivered by the ACTU was undertaken by Mr Pearson on the same day the application in the present matter was lodged, and is therefore, the most recent relevant training that could have been undertaken by Mr Pearson.

[61] Subsection 513(1)(a) of the Act refers to “appropriate training” specifically regarding the “rights and responsibilities of a permit holder”. I am not persuaded that the reference to “appropriate training” should be extended to embrace training beyond such “rights and responsibilities” as contained within Part 3-4 of the Act.

Penalties imposed under the WR Act

[62] I am satisfied that the WR Act is an “industrial law” for the purposes of section

513(1)(d) of the Act.

Lovewell v Pearson
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[63] In Lovewell v Pearson, a penalty of $4,500 was imposed upon Mr Pearson for contravening section 767(1) of the WR Act. A penalty of $16,500 was imposed upon the BLFQ as a result of the conduct of Mr Pearson. The judgement in the matter was delivered, and the final orders issued, on 25 February 2011.

[64] Section 767(1) of the WR Act provided that:

“767 Hindering, obstruction etc. in relation to this Part

(1) A permit holder exercising, or seeking to exercise, rights:

(a) under section 747, 748 or 760; or

(b) under an OHS law in accordance with section 756 or 757;

must not intentionally hinder or obstruct any person, or otherwise act in an
improper manner.”

[65] The commensurate provision to s. 767(1) of the WR Act is now contained in s. 500 of

the Act.

[66] In the statement of agreed facts filed by the parties in the proceedings, both Mr Pearson and the BLFQ admitted to contravening section 767(1) of the WR Act on 5 June 2009 by intentionally hindering or obstructing a contractor engaged in the construction of an residential development in the performance of its work and otherwise acted in an improper manner. Mr Pearson’s conduct involved parking a motor vehicle immediately behind a cement truck that was discharging primer slurry into a pump as part of the process of a scheduled concrete pour on the relevant construction site. This conduct both prevented the cement truck from leaving the site and impeded several other cement trucks from accessing the concrete pump to discharge their loads and effectively stopped the concrete pour from occurring. Mr Pearson refused to move the vehicle despite several requests from employees and contractors of the affected contractor until the police intervened.

[67] The parties agreed to the quantum of penalties to be imposed on Mr Pearson and the BLFQ. In considering the appropriate level of penalty, Jarrett FM commented that Mr Pearson’s conduct was contrary to the relevant objects of the WR Act, that he “clearly misused the powers of entry granted to him by the [WR Act]”,13 that he “demonstrated a

flagrant disregard for, and a lack of appreciation of, the rights and obligations imposed on him

under the [WR Act]”14 and that “the behaviour on the part of Mr Pearson was [a] serious

departure from the standards of behaviour expected of those who are clothed with statutory power to enter premises”.15 It was further noted that impeding the concrete pour was “highly

disruptive”,16 had the potential to affect the entire schedule of construction of the development and had financial implications for the affected contractor including the expense of disposing of spoiled concrete which totalled $12,327.04.

[68] Jarrett FM determined that the penalties imposed must reflect the need for both specific and general deterrence and noted that, apart from the admissions made, there was no other evidence of contrition or corrective action by Mr Pearson and the BLFQ. The penalties imposed upon Mr Pearson and the BLFQ fell within the mid to high range and represented

[2014] FWCD 2437

approximately 68% of the maximum penalty available in respect to Mr Pearson and

approximately 50% of the maximum penalty available in relation to the BLFQ.

Penalties imposed under the BCII Act

[69] Mr Pearson and/or the CFMEU have been ordered to pay penalties under section 38 of

the BCII Act. To be satisfied that this is a penalty relevant to s. 513(1)(d), s. 38 of the BCII
Act must be an “industrial law” for the purposes of that provision.

[70]      ‘Industrial law’ is defined at s.12 of the Act:

“12 The Dictionary...

industrial law means:

(a) this Act; or

(b) the Fair Work (Registered Organisations) Act 2009; or

(c) a law of the Commonwealth, however designated, that regulates the

relationships between employers and employees; or

(d) a State or Territory industrial law.”

[71] I note that the BCII Act was renamed the FW(BI) Act and amended by the Building and Construction Industry Improvement Amendment (Transition to Fair Work) Act 2012 on 1

June 2012. In particular, the amending Act repealed Chapters 5 and 6 of the BCII Act which contained various building industry specific provisions, including the provision that Mr Pearson and the CFMEU were found to have contravened. However, the repeal of these building industry specific provisions does not affect any previous liability acquired, or penalty incurred, under them.17 In addition, the amendments also abolished the Office of the

Australian Building and Construction Commissioner (ABCC) and established a new agency, the FWBC. For clarity, where I refer to the BCII Act I am referring to that legislation at the time the contraventions took place.

[72] I am not aware of any authorities that have determined whether the BCII Act was or

was not, or the FW(BI) Act is or is not, a law of the Commonwealth that “regulates the
relationships between employers and employees”.

[73] In Dowling v Fairfax Media Publications Pty Ltd18 (Dowling v Fairfax), Justice Jagot considered whether the Occupational Health and Safety Act 2000 (NSW) and the Workplace

Injury Management and Workers Compensation Act 1998 (NSW) were ‘industrial laws’ for

the purposes of the repealed s.779 of the WR Act. Her Honour observed that:

“[79] WorkCover has a range of enforcement powers under legislation vesting it with functions including the taking of criminal proceedings, the issuing of penalty notices, the preparation of industry codes of practice, powers to issue investigation notices, improvement notices and prohibition notices, powers to take proceedings for offences against such notices, and powers to include directions in such notices…

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[80] The legislation in respect of which WorkCover has functions includes issues relating to the relationships between employers and employees and not merely, as the respondent submitted, regulating the environment within which such relationships operated. For example, s 46 of the Workplace Injury Management and Workers Compensation Act requires employers to participate and co-operate in the establishment of an injury management plan required to be established for an injured worker and to comply with the plan. Section 47 imposes reciprocal obligations on employees. Section 48 imposes an obligation on an injured employee to return to work and s 49 imposes a reciprocal obligation on the employer to provide suitable work for an injured employee. There are many other examples of such mutual or related obligations as between employers and employees in the legislation vesting functions in WorkCover.

[81] Having regard to these matters I am satisfied that the legislation vesting functions in WorkCover, in a number of respects, regulates the relationship between employers and employees. The legislation is thus within the definition of ‘industrial law’ in s. 779.”19

[74] The BCII Act vested the ABCC with enforcement powers including the investigation and prosecution of breaches of its provisions20 and specifically proscribed certain conduct,21

and created criminal offences.22 Although the former BCII Act adopted the concept of

“building industry participants”23 and generally imposed obligations on “persons” rather than

“employers” and “employees”, it did appear to regulate the relationship between employers and employees engaged in “building work” 24 in a number of significant ways.

[75] The relevant provision of the BCII Act that was contravened by Mr Pearson and the CFMEU is s. 38. An extract of that provision is set out below:

“38 Unlawful industrial action prohibited

A person must not engage in unlawful industrial action

[76] For the purposes of s. 38 unlawful industrial action must be industrially-motivated, which is defined at s. 36 of the BCII Act:

“36 Definitions...

(1) In this Chapter, unless the contrary intention appears:

industrially-motivated means motivated by one or more of the following purposes, or

by purposes that include one or more of the following purposes:

(a) supporting or advancing claims against an employer in respect of the

employment of employees of that employer;

(b) supporting or advancing claims by an employer in respect of the

employment of employees of that employer;

(c) advancing industrial objectives of an industrial association;

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(d) disrupting the performance of work.”

[77] Whilst regulation in the above provision is not limited to employees and employers, it does appear to regulate the industrial context of the building and construction industry, including enterprise bargaining and industrial action, an important relationship between employers and employees. Although the mere use of the term industrial should not lead to an immediate finding that a provision is an industrial law for the purposes of the Act, it is clear from the above provisions that the industrial context being regulated affects relations between employers, employees and industrial organisations, even where the person to whom the provision may apply is not an employer or employee themselves. The term industrial law, in my view, applies to at least the provision of the BCII Act pursuant to which penalties were imposed on Mr Pearson and the CFMEU.

[78] I shall proceed on the basis that the BCII Act is an industrial law for the purposes of s.513(1)(d) of the Act.

[79] Even if it is ultimately determined the relevant provision of the BCII Act was not an industrial law as contemplated by s.513(1)(d) of the Act, the imposition of a penalty under the BCII Act is, in any event, a matter to which I could relevantly turn my mind under s.513(1)(g) of the Act since the conduct occurred in an industrial context and arose while Mr Pearson was acting in his role as an official of the CFMEU at all material times.

[80]      I now turn to the particulars of the penalties imposed.

FWBC v Sutherland

[81] In the matter of FWBC v Sutherland a penalty of $50,000 was imposed upon the

CFMEU for two contraventions of the BCII Act which occurred on 28 February and 1 March
2011. The orders imposing the penalty issued on 10 July 2013.

[82] Given the absence of published reasons for judgment in that matter, the FWBC provided the Commission with a copy of the statement of agreed facts made by the CFMEU, CEPU and the FWBC and filed in the associated proceedings. In the statement of agreed facts, the CFMEU made admissions that on 28 February 2011, Mr Pearson in concert with another official of the CFMEU entered the site of a construction project and held a meeting with workers engaged on the project. During the course of that meeting, Mr Pearson made representations to the relevant workers that the principal contractor involved in the construction project had been engaged in the practice of “sham contracting” and facilitated a vote on whether they wished to support the CFMEU’s campaign by withdrawing their labour. After the conclusion of this meeting, approximately 65 of the relevant workers withdrew their labour and immediately left the site of the project. On the same day, Mr Pearson, in concert with another official of the CFMEU, advised senior managers of the affected principal contractor that the CFMEU was conducting a “sham contracting” campaign and that the relevant workers had determined to withdraw their labour for the remainder of the day.

[83] The parties agreed on the quantum of penalties to be imposed on the CFMEU. Section 38 of the BCII Act was a Grade A civil penalty provision, which at the time attracted a maximum penalty of $110,000 for a body corporate. Therefore, the penalty imposed upon the CFMEU represented approximately 23% of the maximum penalty available.

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Lend Lease v CFMEU

[84] In Lend Lease v CFMEU a penalty of $6,450 was imposed upon Mr Pearson for four contraventions of s. 38 of the BCII Act. A penalty of $550,000 was also imposed on the CFMEU, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the Construction, Forestry, Mining and Energy Union, Industrial Union of Employees, Queensland (the CFMEUQ), a state-registered 25 and transitionally recognised association,26in which each was jointly and severally liable.

The judgment was handed down, and the penalty orders issued, on 19 October 2012.

[85] The judgment in Lend Lease v CFMEU dealt with three separate applications involving industrial conflict which took place on two major construction project sites in which Lend Lease Project Management & Construction (Australia) Pty Ltd (Lend Lease) was the principal contractor. The projects involved development of a new Brisbane Supreme and District Court building (the law courts project) and Gold Coast University Hospital (the hospital project). The industrial conflict was associated with a campaign conducted by the CFMEU to purportedly prevent the practice of “sham contracting”. The overall conduct involved employees of Lend Lease taking industrial action at the site of the hospital project from 18–26 May 2011 and at the site of the law courts project from 24–27 May 2011. In addition to Mr Pearson and the CFMEU, the CFMEUQ, the CEPU, one official of the CEPU and five other officials of the CFMEU, were also respondents in the matter. The respondents admitted, in a statement of agreed facts and contentions, to contravening s.38 of the BCII Act on twelve separate occasions from 18–27 May 2011.

[86] Regarding Mr Pearson specifically, Justice Collier found he engaged in and organised, in concert with other officials of the CFMEU, the unlawful industrial action that occurred at the law courts project site on 24, 25, 26 and 27 May 2011. The action taken by Mr Pearson included convening and addressing meetings of employees of Lend Lease at the site, informing employees that there was a strike and that they should not be working, and advising them to attend a meeting at another location and not enter the site of the law courts project. As a result of this conduct, workers departed from the law courts project site and failed to perform work on 24, 25, 26 and 27 May 2011.

[87] The parties agreed on the quantum of penalties to be imposed on each respondent. In considering whether the agreed penalties where within the appropriate range, Collier J observed that the unlawful industrial action “was protracted, conspicuously public and co- ordinated across the two project sites”,27 was taken despite orders from the then Fair Work Australia that it should not occur, was undertaken as part of an industry-wide campaign rather than motivated by specific concerns relevant to the relevant sites, caused serious disruption to Lend Lease, who suffered loss and damage totalling $1,210,770.65, that it was questionable whether the respondents had displayed contrition in respect of the contraventions and that the respondents had demonstrated co-operation with the regulatory authorities in the proceedings.28 Section 38 of the BCII Act was a Grade A civil penalty provision, which at the time attracted a maximum penalty of $110,000 for a body corporate and $22,000 for a natural person for each contravention.29 Therefore, the penalty imposed upon Mr Pearson represented approximately 7% of the maximum penalty available.

[88] The respondents were the subject of further injunctive relief granted on 16 November 2012.30 In relation to Mr Pearson, he gave an undertaking to the Court to the effect that he would not intentionally hinder or obstruct any other person when exercising or seeking to

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exercise statutory right of entry powers under Part 3-4 of the Act until the completion of the law courts project and the hospital project. The FWBC submits that the fact that this undertaking was given by Mr Pearson indicates that he was unable to demonstrate the appropriate standards required of a person to hold a permit.

[89] In my view, this further injunctive relief, and the undertaking given by Mr Pearson in this regard, are relevant matters for the purposes of subsection 513(1)(g) of the Act as they arise directly from a consideration of the penalties imposed in Lend Lease v CFMEU and involve the exercise of right of entry powers. However, I do not accept the submission that this necessarily means that Mr Pearson was or is incapable of adhering to the rights, conditions, limitations and responsibilities attaching to the exercise of entry permits set out in Part 3-4 of the Act. Rather, it is a matter to be taken account when determining whether Mr Pearson is a “fit and proper person” to hold an entry permit.

Penalties imposed under the Act

FWBC v Myles

[90] In FWBC v Myles a penalty of $4,950 was imposed upon Mr Pearson for three contraventions of s. 500 of the Act. A penalty of $26,400 was also imposed upon the CFMEU as a result of the conduct of Mr Pearson and two other officials of the CFMEU. The orders imposing the penalties issued on 28 February 2014.

[91]      Section 500 of the Act provides that:

“500 Permit holder must not hinder or obstruct

A permit holder exercising, or seeking to exercise, rights in accordance with this Part must not intentionally hinder or obstruct any person, or otherwise act in an improper manner.”

[92] In the published reasons for judgment regarding liability,31 Burnett J, found that Mr Pearson contravened s. 500 of the Act on three occasions on 11 February 2010. More specifically, it was held that Mr Pearson otherwise acted in an improper manner by being rude and offensive including by swearing at and insulting the foreman of a construction site, intentionally hindered, obstructed or otherwise acted in an improper manner by soliciting business on behalf of the CFMEU and by engaging in conduct that contributed in a substantial way to the disruptions on the site by imploring workers to down tools and stop work whilst at the site. Mr Pearson was exercising right of entry powers pursuant to Part 3-4 of the Act at all material times. Burnett J observed in relation to the first contravention found to have occurred that the relevant conduct was:

“in breach of the standards of conduct that would be expected of a reasonable person in the position of Mr Pearson with knowledge of the duties, powers and authority of the position and circumstances of the case”32

[93] Regarding the second contravention, Burnett J observed that the kind of distraction

caused by Mr Pearson’s conduct would be “hazardous and unwelcome and thereby constitute
an appreciable obstruction or hindrance”.33
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[94] The penalty imposed upon Mr Pearson represented approximately 16% of the

maximum penalty available. The penalty imposed upon the CFMEU represented
approximately 43% of the maximum penalty available.34

Other relevant matters

History of contraventions by the CFMEU

[95] The FWBC submits that the history of contraventions of industrial law committed by various officials of the CFMEU, particularly officials attached to the Construction and General Division (the Division), is a relevant matter for me to take into account pursuant to subsection 513(1)(g) of the Act. Annexed to its general submissions, the FWBC provided a list of matters in which it was found that that the CFMEU had contravened various pieces of industrial legislation. The FWBC argues that, given this history of contravening conduct, the Commission should exercise caution in determining whether or not to issue an entry permit on the basis of an application made by the CFMEU.

[96] I share the concerns of the FWBC regarding the CFMEU’s history, particularly that of the Division, in contravening various pieces of industrial legislation. As set out in the submissions of the FWBC, the courts have made several observations in relation to this history. For instance, in Williams v Construction, Forestry, Mining and Energy Union (No. 2) [2009] FCA 548, noted that:

“...the history tends to suggest that the Union has, with respect to anti-coercion and

similar provisions of industrial laws, what the High Court in Veen described as ‘a

continuing attitude of disobedience of the law’...”.35

[97] Further in Cozadinos v Construction, Forestry, Mining and Energy Union [2013] FCA 1243, Tracey J remarked that the CFMEU has “...a deplorable record of contraventions of the

BCII Act and similar legislation”36 and in Cozadinos v Construction, Forestry, Mining and

Energy Union & Ors [2011] FMCA 284 Reithmuller FM noted its “...unenviable history of

breaches as set out in the various cases”.37

[98] However, in my view, given the structure of sections 512 and 513(1) of the Act, this history of contraventions of industrial legislation by the CFMEU is not a proper matter to take into account for the purposes of subsection 513(1)(g) of the Act. As noted above, section 512 of the Act provides that the determination required to be made is whether the Commission is satisfied that a particular official is a “fit and proper person to hold the entry permit”. Similarly, the “permit qualification matters” set out in paragraphs (a) to (f) of subsection 513(1) of the Act pertain to matters specifically in relation to such an official. Thus, the inquiry required to be made in determining whether or not to issue an entry permit to a particular official is directed to the status and attributes of that official. Given this, it would not be appropriate to take into account matters not directly involving a particular proposed permit holder for the purposes of subsection 513(1)(g) of the Act. It would not be a proper exercise of the Commission’s discretion pursuant to section 512 of the Act to determine all applications from the CFMEU or the Division with a pre-determined adverse disposition.

[99] The appropriate vehicle for pursuing such matters may in some instances be provided by s. 508 of the Act. That provision provides that the Commission may restrict the right of entry powers otherwise exercisable under Part 3-4 of the Act if it is satisfied that a particular

[2014] FWCD 2437

organisation or an official of such an organisation has misused those powers. Such restrictions may include suspending, revoking or imposing conditions on entry permits, requiring some or all of the entry permits issued in relation to a particular registered organisation to be issued subject to specific conditions, banning the issue of entry permits in relation to a particular registered organisation for a specified period and any other order the Commission considers appropriate.

Disclosure of relevant matters in application

[100] In its submissions, the FWBC argues that the declarations in support of the application currently before me have not been made in a full and frank manner. In support of this submission, the FWBC notes that the relevant provision of the WR Act Mr Pearson was found to have contravened in Lovewell v Pearson was not identified, that the relevant provision of the BCII Act Mr Pearson was found to have contravened in Lend Lease v CFMEU and the further orders made in respect to him in that matter were not disclosed and that the declarations did not adequately disclose that the penalty imposed on the CFMEU in FWBC v

Sutherland arose, in part, as a result of Mr Pearson’s conduct. The FWBC further submits that

the proceedings in the matter of FWBC v Myles should have been disclosed in the declarations
as it was highly relevant for the purposes of subsection 513(1)(g) of the Act.

[101]    The CFMEU submits that the matters of Lovewell v Pearson, Lend Lease v CFMEU

and FWBC v Sutherland were “plainly and squarely disclosed” and that, given that the proceedings in those matters are a matter of public record, it was not necessary to provide a summary of those proceedings in order to provide full disclosure. Regarding the matter of

FWBC v Sutherland, the CFMEU submits that Mr Pearson was not required to disclose this

matter as he denied the allegations made against him, did not make any admissions in relation those allegations and the proceedings against him were discontinued. The CFMEU further asserts that the proceedings in the matter of FWBC v Myles were not required to be disclosed and that the decision regarding liability in that matter was also not required to be disclosed as it did not enliven any of the “permit qualification matters” set out in paragraphs (a) to (f) of subsection 513(1) of the Act.

[102] In “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union”

known as the Australian Manufacturing Workers’ Union (AMWU)-Victorian Branch38,
Delegate Nassios expressed the following view:

“[14] Thoroughness by an applicant in disclosing adverse issues is paramount in

assisting a Delegate to make an informed judgment as to whether an application for an

entry permit is a fit and proper person. Thoroughness however can only be gauged in

relation to each individual applicant’s circumstances.”39

[103] The above quote has been cited as a statement of general principle in several decisions regarding applications under s.512 of the Act.40 This obligation to disclose facts relevant to

the permit qualification matters has been defined as a “duty of full and frank disclosure”41 and

reflects the practice that entry permits are issued to officials of organisations largely on the basis of the contents of the declarations made by proposed permit holders and members of the Committee of Management of the relevant registered organisation.

[104] As the level of disclosure provided in an application bears upon both the character and

the level of due diligence demonstrated by and can be expected of a proposed permit holder, I
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accept the submission of the FWBC that this is a relevant matter to take into account for the
purposes of subsection 513(1)(g) of the Act.

[105] In my view, Mr Pearson and the CFMEU adequately disclosed the matters of Lovewell v Pearson, Lend Lease v CFMEU and FWBC v Sutherland. The declaration of Mr Hanna

clearly made reference to the penalties imposed in and the relevant legislation that was contravened in those matters. This enabled the Commission to be alerted to their existence and identify them in a sufficient manner to fully consider them including what particular statutory provisions were contravened and any further orders made. The declaration of Mr Pearson, whilst not precisely identifying the title of those particular matters, also clearly makes reference to both the penalties imposed, and relevant legislation under which they were imposed, in those matters. The submission of the CFMEU that Mr Pearson was not required to disclose the matter of FWBC v Sutherland does not arise as I have found that it was adequately disclosed in the declarations.

[106] However, I reject the implication in the submissions of the CFMEU that only matters strictly pertaining to paragraphs (a) to (f) of subsection 513(1) of the Act need to be disclosed. In my view, given the effect of subsection 513(1)(g) of the Act and for the reasons given in previous decisions regarding applications under s. 512 of the Act,42 any matter that can be considered reasonably relevant to the status of a particular official as a “fit and proper person” to hold an entry permit ought to be disclosed.

[107] Whether or not such matters are properly to be taken into account pursuant to

subsection 513(1)(g) of the Act is a matter for the Commission to subsequently consider and

determine.

[108] I note that the template declarations to be completed by the relevant Committee of

Management member and the proposed permit holder in the prescribed form for making applications under s. 512 of the Act only make reference to the “permit qualification matters” set out in paragraphs (a) to (f) of subsection 513(1) of the Act. However, this does not prevent an applicant organisation or a proposed permit holder from disclosing other potentially relevant issues beyond such matters within the declaration or elsewhere in the application.

[109] In this regard, the matter of FWBC v Myles could have been disclosed in a manner that indicated that neither the CFMEU nor Mr Pearson were making any admissions in relation to those proceedings and that they did not consider that adverse findings should be made against Mr Pearson in relation to it. Given that penalties were subsequently imposed upon both the CFMEU and Mr Pearson in that matter and that the proceedings involved alleged contraventions of s. 500 of the Act, the proceedings in that matter should have been disclosed. However, given that the decision regarding liability was delivered and the relevant penalty orders issued after the application was made in the current matter, I will make no adverse findings against Mr Pearson in this regard. Despite this, had the decision regarding liability in

FWBC v Myles been delivered before the application was made, I would further consider

making such a finding.

Further orders made against the CFMEU and Mr Pearson

[110] The FWBC submits that the further orders that have been made against the CFMEU

and/or Mr Pearson since the application in the present matter was lodged are proper matters

for the Commission to take into account for the purposes of subsection 513(1)(g) of the Act.

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[111] For the reasons given at paragraphs [95] to [99] above, I do not accept that the further

matters identified in the FWBC’s submissions which do not directly involve Mr Pearson are
proper matters for me to take into account pursuant to subsection 513(1)(g) of the Act.

[112] Regarding John Holland v CFMEU, the FWBC argues that the alleged conduct complained of against the CFMEU and Mr Pearson and the interlocutory orders that have issued in that matter are relevant matters for the Commission to take into account in the current matter. In its submissions, the CFMEU notes that no findings of fact have been made against Mr Pearson and that no final relief has been imposed in that matter.

[113] While there may be circumstances in which interlocutory proceedings could be

relevant in addressing the “fit and proper person’ requirement in s. 512, I do not propose to make any adverse findings against Mr Pearson in determining whether he is a “fit and proper person” to hold an entry permit in this regard.

Factual context of matters in which penalties have been imposed

[114] The FWBC argues that the factual context in matters where Mr Pearson and/or the

CFMEU have had penalties imposed upon them as a result of the actions of Mr Pearson is also a relevant matter to take into account pursuant to subsection 513(1)(g) of the Act.

[115] Subsection 513(1)(d) of the Act provides that the Fair Work Commission must take

into account whether an official, or any other person, has ever been ordered to pay a penalty under the Act or any other industrial law in relation to action taken by the official. In my view, this encompasses a consideration of the relevant conduct of the official which led to the imposition of such penalties. In any event, I accept the submissions of the FWBC that I am entitled to take such conduct into account pursuant to subsection 513(1)(g) of the Act as they are clearly relevant matters.

Leadership role of Mr Pearson

[116] In its submissions, the FWBC urges the Commission to take into account the

leadership role of Mr Pearson within the CFMEU. The CFMEU also briefly addressed this issue in its submissions by noting that upon the amalgamation of the Divisional Branch with the Queensland Construction Workers’ Divisional Branch, Mr Pearson will cease to hold the offices of Branch Assistant Secretary of the Divisional Branch and Assistant Secretary of the BLFQ.

[117] I consider the leadership role of Mr Pearson to be a relevant matter for the purposes of subsection 513(1)(g) of the Act. This matter arises squarely from a consideration of the penalties imposed upon Mr Pearson and/or the CFMEU in FWBC v Sutherland and Lend

Lease v CFMEU and as such, in my view, is a relevant matter for me to take into account in

determining whether or not Mr Pearson is a “fit and proper person” to hold an entry permit.

[118]    As I noted in a previous decision,43 voluminous research narrative and commentary is

available on the concept of leadership and the criticality of its importance in influencing followers. The circumstances contained within the materials appear to indicate that Mr Pearson acted in the capacity of organiser attached to both the Divisional Branch and the BLFQ at the time the contraventions of the WR Act and the Act which were found to have [2014] FWCD 2437

occurred in the matters of Lovewell v Pearson and FWBC v Myles. However, at the time that the relevant contraventions of the BCII Act which were found to have occurred in the matters of FWBC v Sutherland and Lend Lease v CFMEU, he held the senior leadership position of Branch Assistant Secretary of the Divisional Branch. The information lodged by the CFMEU pursuant to s. 233 of the Fair Work (Registered Organisations) Act 2009 indicates that Mr Pearson held that office since at least 1 January 2011.

[119]    In my view it is not unreasonable to expect that leaders set standards and that Mr

Pearson’s senior leadership role at the time of the contraventions on 28 February and 24-27
May 2011 is a matter to be taken into account in accordance with section 513(1)(g) of the Act.

[120]    The submissions of the CFMEU that Mr Pearson will cease to hold the offices of

Branch Assistant Secretary of the Divisional Branch and Assistant Secretary of the BLFQ does not diminish my concern in this regard.

Prospects of Mr Pearson re-offending

[121] The FWBC submits that the prospects of Mr Pearson “re-offending” is a relevant

matter to be taken into account pursuant to subsection 513(1)(g) of the Act. In this regard, the FWBC argues that Mr Pearson’s lack of “genuine contrition or remorse” for his conduct, his demonstrated disregard for the privilege of holding an entry permit, the multiple contraventions of s. 500 found to have occurred in FWBC v Myles and the adequacy of the training, incentive and support systems provided to him by the CFMEU are relevant to this consideration.

[122] In reply to this submission, CFMEU argues that the effectiveness of the training

received by Mr Pearson is demonstrated by his adherence to the undertakings given in the matter of Lend Lease v CFMEU and that nearly three years have elapsed since he has been found to have committed any relevant contravention. The CFMEU submits that an inference can be drawn that the matters in which penalties have been imposed have had a “scarifying effect on Mr Pearson and that he has learnt from his previous experiences and his recent training”.

[123] I accept that the past conduct demonstrated, and penalties imposed as a result of such conduct, by a particular official is a matter to be properly taken into account when considering whether he or she is a “fit and proper person” to hold an entry permit as this will directly bear upon the level of satisfaction the Commission will have regarding that official’s potential adherence to the rights, conditions, limitations and responsibilities attaching to the exercise of entry permits set out in Part 3-4 of the Act. In my view, the level of regard or disregard for the provisions of industrial law, including the statutory right of entry regime, is also a matter that can be properly inferred from the previous conduct of a particular official.

Objects of Part 3-4 of the Act

[124] In exercising my discretion under s.512 of the Act to determine whether or not to issue an entry permit to Mr Pearson, I have also considered the objects of Part 3-4 of the Act.

[125] In this regard, I have taken into account the role Mr Pearson performs as an official of

the CFMEU and the importance of holding an entry permit in fulfilling that role in terms of
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holding discussions with employees and members, investigating suspected contraventions and

ensuring workplace health and safety.

Consideration

[126] My task in the present matter is to determine whether Mr Pearson is a “fit and proper person” to hold the entry permit for which application is made taking into account the nature of the powers that are bestowed pursuant to the grant of such a permit within the statutory regime set out in Part 3-4 of the Act, the activities that he will potentially be engaged in when exercising such powers and the ends to be served by such activities. In order to make this determination, I must take into account the “permit qualification matters” set out in paragraphs (a) to (g) of section 513(1) of the Act. Those matters are to be taken into account and applied in a way that assists me in determining whether Mr Pearson is a “fit and proper person to hold the entry permit”.

[127] The issues referred to in the application raise particular concerns regarding the permit qualification matters set out in paragraphs (d) and (g) of section 513(1) of the Act.

[128] The total quantum of penalties imposed upon Mr Pearson in Lovewell v Pearson, Lend Lease v CFMEU and FWBC v Myles amounts to $15,900. In Lovewell v Pearson, a penalty of

$16,500 was imposed upon the BLFQ as a result of the conduct of Mr Pearson. Penalties of $50,000 and $26,400 were imposed upon the CFMEU in FWBC v Sutherland and FWBC v

Myles respectively as a result of the conduct of Mr Pearson and several other officials of the

CFMEU. Finally, a penalty of $550,000 was imposed upon the CFMEU, CFMEUQ and CEPU in which each was jointly and severally liable as a result of the conduct of several officials from each of those entities including Mr Pearson in the matter of Lend Lease v

CFMEU. I have taken into account that the penalties imposed in FWBC v Sutherland, FWBC v Myles and Lend Lease v CFMEU were attributable to Mr Pearson only in part. However, it

is not possible to precisely quantify or approximate the share of the penalties which is directly attributable to Mr Pearson, and the penalties are substantial. The total quantum of penalties imposed upon Mr Pearson and the penalty imposed upon BLFQ are also substantial.

[129] In my view, as noted above, I am also entitled to take into account the conduct of Mr Pearson found to have occurred in those matters under either paragraph (d) or (g) of subsection 513(1) of the Act.

[130] As I have earlier indicated, the CFMEU is the applicant for an entry permit under s. 512 of the Act on behalf of Mr Pearson and it was the CFMEU which entered into a statement of agreed facts in the matter of FWBC v Sutherland. In the current application, the CFMEU seeks by submission to separate Mr Pearson from its statement of agreed facts in FWBC v

Sutherland and submits that Mr Pearson is not bound by it. According to its submission, in

addition to Mr Pearson not being bound by the CFMEU statement of agreed facts concerning his (Mr Pearson’s) conduct, those findings of fact cannot be taken into account in the current matter before me as Mr Pearson denied the allegations, made no relevant admissions and the proceedings were discontinued against him in that matter.

[131] The CFMEU further submits that the admissions of the CFMEU are not admissible against Mr Pearson pursuant to Part 3.4 of the Evidence Act 1995. I note that no published reasons for judgment were made in that matter. I will assume without deciding that the conduct of Mr Pearson contained in the statement of agreed facts filed in the proceedings as [2014] FWCD 2437

set out in paragraph [82] of this decision is not a proper matter for me to take into account when determining whether he is a “fit and proper person” to hold an entry permit. However, in my view, given that I must take into account whether any other person has ever been ordered to pay a penalty under an industrial law in relation to action taken by Mr Pearson pursuant to subsection 513(1)(d) of the Act, I cannot disregard the fact that a penalty was imposed upon the CFMEU in that matter and that the penalty was imposed due to the conduct of Mr Pearson as admitted by the CFMEU.

[132] In Lovewell v Pearson, it was found that Mr Pearson intentionally hindered or obstructed a contractor engaged in a construction project by parking a motor vehicle in a

manner which prevented a scheduled concrete pour from proceeding on 5 June 2009. Jarrett

FM commented that Mr Pearson “clearly misused the powers of entry granted to him”,44

demonstrated “a flagrant disregard for, and a lack of appreciation of, the rights and

obligations imposed upon him” 45 and that his conduct was a “serious departure from the

standards of behaviour expected of those who are clothed with statutory power to enter

premises”.46

[133] Similarly in FWBC v Myles, it was found that Mr Pearson, whilst exercising statutory right of entry powers under Part 3-4 of the Act, entered the site of a construction project on 11 February 2010 and intentionally hindered, obstructed or otherwise acted in an improper manner on three separate occasions. Mr Pearson’s conduct included swearing at and insulting a foreman at the site of the project , soliciting business and imploring workers to down tools and stop work. Burnett J found Mr Pearson’s conduct was contrary to the standards of conduct expected of a reasonable person in the position of Mr Pearson and that the distraction

caused by Mr Pearson’s conduct was of a kind that would be “hazardous and unwelcome and

thereby constitute an appreciable obstruction or hindrance”.47

[134] In the matter of FWBC v Sutherland, the CFMEU admitted to contraventions of s. 38 of the BCII Act which occurred on 28 February and 1 March 2011. As noted above, I will not take into account the relevant conduct of Mr Pearson as contained in the admissions of the CFMEU beyond noting the penalty imposed and the date that the contraventions occurred.

[135] In Lend Lease v CFMEU, it was found that Mr Pearson had engaged in and organised, in concert with other officials of the CFMEU, the unlawful industrial action which occurred at the site of a major public construction project on 24, 25, 26 and 27 May 2011. Collier J observed that the unlawful industrial action committed by the respondents in the matter was protracted, taken despite orders from the then Fair Work Australia that it should not occur and caused serious disruption and loss to Lend Lease.

[136] Given the substantial penalties imposed, and the conduct of Mr Pearson found to have occurred, in the above matters, I have serious reservations regarding Mr Pearson’s status as a “fit and proper person” to hold an entry permit bearing in the mind the rights, conditions, limitations and responsibilities attaching to the exercise of entry permits set out in Part 3-4 of the Act.

[137] In particular, the contraventions of the right of entry provisions of the WR Act and the Act found to have occurred in the matters of Lovewell v Pearson and FWBC v Myles are matters of serious concern as they directly relate to Mr Pearson’s demonstrated adherence to the duties and obligations imposed upon permit holders. The “permit qualification matters” set out in subsection 513(1) of the Act are not to be taken into account only to the extent that

[2014] FWCD 2437

they are relevant to the exercise of right of entry powers under Part 3-4 of the Act.48 However, in my view, if those matters are enlivened due to the conduct of a particular official when exercising such powers, then this is a relevant consideration for the weight to be given to such matters when determining whether he or she is a “fit and proper person to hold the entry permit”.

[138]    The subsequent penalties imposed in FWBC v Sutherland and Lend Lease v CFMEU

heightens this concern.

[139] In my view, the penalties imposed in the above matters, and the conduct found to have occurred in Lovewell v Pearson, FWBC v Myles and Lend Lease v CFMEU, demonstrate a lack of regard for the provisions of industrial legislation on the part of Mr Pearson. This disregard, particularly as it relates to the contraventions of the statutory right of entry regime set out in the WR Act and the Act, directly bears upon the assessment of whether he is a “fit and proper person” to hold an entry permit given the rights, conditions, limitations and responsibilities attaching to the exercise of such permits set out in Part 3-4 of the Act.

[140] This is compounded by considering that Mr Pearson held the senior leadership

position of Branch Assistant Secretary of the Divisional Branch at the time that the contraventions in FWBC v Sutherland and Lend Lease v CFMEU occurred. That he may not hold this office upon a restructure within the Division does not diminish this concern.

[141] On the other hand, I have also taken into account that there is no evidence before me that indicates that Mr Pearson has ever had any adverse findings made against him regarding the permit qualification matters set out in paragraphs (b), (c), (e) and (f) of subsection 513(1) of the Act and that he has received appropriate training for the purposes of subsection 513(1)(a) of the Act.

[142] In accordance with CFMEU’s submissions, I further note that Mr Pearson has not been found to have contravened the Act or any other industrial law since May 2011.

[143] Another relevant consideration includes the role Mr Pearson performs as an official of the CFMEU including the provision of advice, support and assistance to its members. This is relevant to the objects set out in sections 480(a) and (b) of the Act and the absence of an entry permit will obviously affect Mr Pearson’s capacity to effectively undertake such activities.

[144]    In my view, the further injunctive relief granted in the matter of Lend Lease v CFMEU

and the interlocutory orders issued in John Holland v CFMEU are neutral considerations for the purposes of assessing Mr Pearson’s status as a “fit and proper person” to hold an entry permit.

Conclusion

[145] I have carefully considered all of the available circumstances of this matter and have had particular regard to the permit qualification matters for the purposes of s.512 of the Act.

[146] I have also had particular regard to the lack of any adverse findings made against Mr Pearson regarding the permit qualification matters set out in paragraphs (b), (c), (e) and (f) of subsection 513(1) of the Act, the length of time that has elapsed since he was last found to have committed a relevant contravention, the relevant training he has received and a [2014] FWCD 2437

consideration of his important role to the CFMEU membership as an official of that
organisation.

[147] However, I cannot disregard the various relevant and compelling findings referred to throughout this decision such as those by Jarrett FM in Lovewell v Pearson that Mr Pearson

“clearly misused the powers of entry granted to him by the [WR Act]”,49that he

“demonstrated a flagrant disregard for, and a lack of appreciation of, the rights and obligations imposed on him under the [WR Act]” 50 and that “the behaviour on the part of Mr

Pearson was [a] serious departure from the standards of behaviour expected of those who are

clothed with statutory power to enter premises”. 51 Similarly, Collier J commented in Lend

Lease v CFMEU that the unlawful industrial action Mr Pearson engaged in and organised in

concert with other officials “was protracted, conspicuously public and co-ordinated across the two project sites” 52 which “caused serious disruption to Lend Lease, who suffered loss and damage totalling $1,210,770.65. Further, in relation to the three contraventions of s. 500 of the Act found to have been committed by Mr Pearson in FWBC v Myles whilst exercising right of entry powers, Burnett J observed that Mr Pearson’s conduct was “in breach of the

standards of conduct that would be expected of a reasonable person in the position of Mr

Pearson....”. 53

[148] These findings and each of the facts and circumstances to which I have referred, and the substantial nature of the penalties imposed as a consequence, have raised serious concerns regarding Mr Pearson’s demonstrable lack of regard for provisions of industrial legislation, particularly as it pertains to the statutory right of entry regime. The senior leadership role Mr Pearson held within the Divisional Branch at the time the contraventions in FWBC v

Sutherland and Lend Lease v CFMEU occurred is a matter I have also taken into account.

[149] I cannot be satisfied that Mr Pearson will exercise the powers derived from the issue of an entry permit in a manner expected of permit holders exercising a public right in conformity with the duties, conditions and limitations imposed by Part 3-4 of the Act. Therefore, on balance I have concluded that I am not satisfied that Mr Pearson is a “fit and proper person” to hold an entry permit and accordingly, I must refuse the application to issue a permit.

[150] Although I am not bound by the decisions of previous Delegates of the Commission, for the sake of completeness I note that my determination in this matter differs from that reached in relation to several applications under s. 512 of the Act pertaining to other officials of the Divisional Branch. For instance, an entry permit was issued to Mr Hanna with conditions imposed in matter RE2013/113954 and a permit was issued to Mr Adam Olsen in

matter RE2012/2250.55 However, those matters are readily distinguishable from the present matter before me given the significantly greater penalties imposed upon Mr Pearson and other persons as a result of his conduct and that the penalties imposed in Lovewell v Pearson and

FWBC v Myles specifically arose due to Mr Pearson’s contravention of the statutory right of

entry regimes of the WR Act and the Act.

[151] As I have determined not to issue a permit to Mr Pearson, it is not necessary for me to

consider imposing any conditions pursuant to section 515 of the Act or the submissions of the
FWBC and the CFMEU in that regard.

[2014] FWCD 2437

DELEGATE OF THE FAIR WORK COMMISSION

FAIR WORK COMMISSION

Endnotes:

1 Construction, Forestry, Mining and Energy Union [2013] FWCD 8874; Construction, Forestry, Mining and Energy Union

[2013] FWCD 9749.

2 Registered under the Industrial Relations Act 1999 (Qld) Ch12 Pt 2.

3 Recognised under the Fair Work (Registered Organisations) Act 2009 Sch 1.

4 Director, Fair Work Building Inspectorate v Andrew Sutherland & Ors (BRG1008/2011)

5 Director, Fair Work Building Industry Inspectorate v Joseph Myles & Ors (BRG961/2011)

6 Baulderstone Pty Ltd & Ors v Construction, Forestry, Mining and Energy Union & Ors (BRG770/2012).

7 John Holland Pty Ltd ACN 004 282 268 & Anor v Construction, Forestry, Mining and Energy Union & Ors

(QUD729/2013).

8 Fair Work Act 2009 s.577.

9 [2011] FWAD 3518.

10 Ibid at [21].

11 The Maritime Union of Australia [2014] FWCFB 1973 at [25].

12 Santos Ltd v Saunders (1988) 49 SASR 556.

13 Lovewell v Pearson & Anor [2011] FMCA 102 at [53].

14 Ibid at [57].

15 Ibid at [72].

16 Ibid at [60].

17 Building and Construction Industry Improvement Amendment(Transition to Fair Work) Act 2012 sch 2, item 1; Building

and Construction Industry Improvement Amendment(Transition to Fair Work) Regulation 2012, reg 2.4; Acts

Interpretation Act 1901 s7(2).

18 Dowling v Fairfax Media Publications Pty Ltd [2008] FCA 1470.

19 Ibid at [79]-[81].

20 Building and Construction Industry Improvement Act 2005 ch 7.

21 Building and Construction Industry Improvement Act 2005 ch 5.

22 Building and Construction Industry Improvement Act 2005 ss 52(6) & 65(2).

23 Building and Construction Industry Improvement Act 2005 s 3. 24 Building and Construction Industry Improvement Act 2005 s 5.

25 Registered under the Industrial Relations Act 1999 (Qld) Ch12 Pt 2.

26 Recognised under the Fair Work (Registered Organisations) Act 2009 Sch 2.

27 Lend Lease Project Management & Construction (Australia) Pty Ltd v Construction, Forestry, Mining and Energy Union

(No.5) [2012] FCA 1144 at [36].

28 Ibid at [37]-42].

29 Building and Construction Industry Improvement Act 2005 s 49(2); Crimes Act 1914 s 4AA.

30 Lend Lease Project Management & Construction (Australia) Pty Ltd v Construction, Forestry, Mining and Energy Union

(No.6) [2012] FCA 1273.

31 Director, Fair Work Building Industry Inspectorate v Myles & Ors [2013] FCCA 229.

32 Ibid at [109].

33 Ibid at [115].

34 Fair Work Act 2009 s 539; Crimes Act 1914 s 4AA.

35 At [29].

36 At [43].

37 At [18].

38 [2010] FWAD 10039.

39 Ibid at [14].

40 For example, see The Australian Workers’ Union [2011] FWAD 5025;“Automotive, Food, Metals, Engineering, Printing

and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)-Victorian Branch

[2011] FWAD 443; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services

Union of Australia [2011] FWAD 3518; Construction, Forestry, Mining and Energy Union [2011] FWAD 5188;

Construction, Forestry, Mining and Energy Union [2012] FWAD 962; Construction, Forestry, Mining and Energy Union

[2012] FWAD 8712.

41 For example see “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the

Australian Manufacturing Workers’ Union (AMWU) - Victorian Branch [2010] FWAD 10039; Re Communications,

Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2011] FWAD 3518.

42 For example see Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services

Union of Australia [2011] FWAD 3518.

43 The Maritime Union of Australia [2013] FWCD 8459 at [51].

44 Lovewell v Pearson & Anor [2011] FMCA 102 at [53]

45 Ibid at [57].

46 Ibid at [72].

47 Director, Fair Work Building Industry Inspectorate v Myles & Ors [2013] FCCA 229 at [115].

48 The Maritime Union of Australia [2014] FWCFB 1973.

49 Lovewell v Pearson & Anor [2011] FMCA 102 at [53].

50 Ibid at [57].

51 Ibid at [72].

52 Lend Lease Project Management & Construction (Australia) Pty Ltd v Construction, Forestry, Mining and Energy Union

(No.5) [2012] FCA 1144 at [36].

53 Director, Fair Work Building Industry Inspectorate v Myles & Ors [2013] FCCA 229 at [109].

54 Construction, Forestry, Mining and Energy Union [2013] FWCD 4666.

55 Construction, Forestry, Mining and Energy Union [2013] FWCD 1242.

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