Construction, Forestry, Mining and Energy Union v De Martin & Gasparini Pty Ltd (No 2)
[2017] FCA 1046
•1 September 2017
FEDERAL COURT OF AUSTRALIA
Construction, Forestry, Mining and Energy Union v De Martin & Gasparini Pty Limited (No 2) [2017] FCA 1046
File number: NSD 1143 of 2017 Judge: WIGNEY J Date of judgment: 1 September 2017 Catchwords: INDUSTRIAL LAW – Code for the Tendering and Performance of Building Work 2016 (Cth) – building industry participants required to be compliant with Code – Code prohibits certain types of clauses in enterprise agreements – non-compliant building industry participants and their related entities unable to tender for or be awarded Commonwealth funded building work after 1 September 2017 – where Respondent had a non-compliant enterprise agreement – where Respondent sought its employees’ approval to vary non-compliant agreement – where employees voted down the variations
INDUSTRIAL LAW – civil penalty proceedings – adverse action – s 340 Fair Work Act 2009 (Cth) – adverse action by employer against employees – whether employer took adverse action against employees – threat to dismiss employees – injuring employees in their employment – altering the position of the employees to their prejudice –whether action authorised by or under Fair Work Act – reason for taking action – whether action taken because employees had or had exercised a workplace right – reason for action presumed by s 361 Fair Work Act 2009 (Cth) – accessorial liability of officers of employer for adverse action – where employer through officers informed employees it was considering ‘major workplace change’ in the form of redundancies
INDUSTRIAL LAW – civil penalty proceedings – coercion – s 54 Building and Construction Industry (Improving Productivity) Act 2016 (Cth) – where s 343 Fair Work Act 2009 (Cth) does not apply – threat to take action – intent to coerce – whether employer threatened to make employees redundant with intent to coerce employees to vary building enterprise agreement – accessorial liability of officers of employer for coercion – whether officers themselves threatened to take action with intent to coerce employees to vary building enterprise agreement
Legislation: Building and Construction Industry (Improving Productivity) Act 2016 (Cth), ss 5, 6, 34, 54, 56, 57, 81, 92, 94, 97
Building and Construction Industry (Improving Productivity) Amendment Act 2017 (Cth)
Code for the Tendering and Performance of Building Work 2016 (Cth), ss 3, 6, 11, 11A, 15, 23, 24, Schedule 5
Crimes Act 1914 (Cth), s 4AA
Evidence Act 1995 (Cth), ss 118, 140
Fair Work Act 2009 (Cth), ss 12, 50, 52, 53, 54, 58, 172, 183, 186, 187, 201, 207, 208, 209, 210, 211, 212, 213, 214, 215, 216, 219, 220, 221, 222, 223, 224, 227, 336, 340, 341, 342, 343, 346, 360, 361, 539, 540, 543, 550, 793
Workplace Relations Act1996 (Cth), s 298K
Cases cited: Archer Capital 4A Pty Ltd as trustee for the Archer Capital Trust 4A v Sage Group plc (No. 3) (2013) 306 ALR 414
Australian Building and Construction Commission v Construction, Forestry, Mining and Energy Union [2017] FCA 157
Australian Building and Construction Commissioner v Parker [2017] FCA 564
Australian Federation of Air Pilots v Jetstar Airways Pty Ltd [2014] FCA 15
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd (No 3) (2013) 216 FCR 70
Board of Bendigo Regional Institute of Technical and Further Education v Barclay (2012) 248 CLR 500
Briginshaw v Briginshaw (1938) 60 CLR 336
Byrne v Australian Ophthalmic Supplies Pty Ltd [2008] FCA 66
Commonwealth Bank of Australia v Finance Sector Union of Australia (2007) 157 FCR 329
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v Australian Competition and Consumer Commission (2007) 162 FCR 466
Community and Public Sector Union v Telstra Corporation Ltd (2001) 107 FCR 93
Construction, Forestry, Mining & Energy Union v Clarke [2007] FCAFC 87
Construction, Forestry, Mining & Energy Union v Rio Tinto Coal Australia Pty Ltd (2014) 232 FCR 560
Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (2014) 253 CLR 243
Construction, Forestry, Mining and Energy Union v De Martin & Gasparini Pty Limited [2017] FCA 856
Construction, Forestry, Mining and Energy Union v State of Victoria & Ors [2013] FCA 445
Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 353
Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Entergy Union (The Red & Blue Case) [2015] FCA 1125
Esso Australia Pty Ltd v Australian Workers Union (2016) 245 FCR 39
Ex parte Johnson; Re MacMillan (1946) 47 SR (NSW) 16
Fair Work Ombudsman v Australian Workers Union [2017] FCA 528
Fair Work Ombudsman v Maritime Union of Australia [2014] FCA 440
Giorgianni v The Queen (1985) 156 CLR 473
Greater Dandenong City Council v Australian Municipal, Clerical and Services Union (2001) 112 FCR 232
John Holland Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2009) 174 FCR 526
Klein v Metropolitan Fire and Emergency Services Board (2012) 208 FCR 178
Maritime Union of Australia v CSL Australia Pty Ltd [2002] FCA 513
Maritime Union of Australia v Fair Work Ombudsman (2016) 339 ALR 286
Maritime Union of Australia v Geraldton Port Authority (1999) 93 FCR 34
National Tertiary Education Industry Union v Commonwealth (2002) 117 FCR 114
Neat Holdings Pty Ltd v Karajan Holdings Pty Ltd (1992) 110 ALR 449
Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia (1998) 195 CLR 1
Port Kembla Coal Terminal Ltd v Construction, Forestry, Mining and Energy Union [2016] FCAFC 99
Qantas Airways Limited v Australian Licensed Aircraft Engineers Association (2012) 202 FCR 244
Seven Network (Operations) Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (2001) 109 FCR 378
Squires v Flight Stewards Association of Australia (1982) 2 IR 155
Unsworth v Tristar Steering and Suspension Australia Limited (2008) 216 FCR 122
Victoria v Construction, Forestry, Mining and Energy Union (2013) 218 FCR 172
Wayne Lawrence Pty Ltd v Hunt [1999] NSWSC 1044
Yorke v Lucas (1985) 158 CLR 661
Date of hearing: 24-26, 28, 31 July and 2 August 2017 Registry: New South Wales Division: Fair Work Division National Practice Area: Employment & Industrial Relations Category: Catchwords Number of paragraphs: 386 Counsel for the Applicant: Mr S Crawshaw SC with Mr P Boncardo Solicitor for the Applicant: CFMEU NSW Counsel for the Respondents: Mr M S White SC with Mr Y Shariff Solicitor for the Respondents: Herbert Smith Freehills ORDERS
NSD 1143 of 2017 BETWEEN: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
Applicant
AND: DE MARTIN & GASPARINI PTY LIMITED
First Respondent
LOUIE MAZZAROLO
Second Respondent
GREG MILLER
Third Respondent
JUDGE:
WIGNEY J
DATE OF ORDER:
1 SEPTEMBER 2017
THE COURT ORDERS THAT:
1.The parties provide the Court with short minutes of order within 14 days, including a timetable for the further hearing in relation to relief and any other orders that can be agreed having regard to these findings and reasons.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
REASONS FOR JUDGMENT
Table of Contents
PROCEDURAL BACKGROUND
[10]
ADVERSE ACTION UNDER THE FAIR WORK ACT
[17]
COERCION UNDER THE BUILDING ACT
[32]
ENTERPRISE AGREEMENTS UNDER THE FAIR WORK ACT
[44]
THE BUILDING ACT AND THE CODE
[54]
The Building Act
[55]
The Code
[59]
UNCONTROVERSIAL FACTS AND EVIDENCE
[69]
The Enterprise Agreement
[72]
Proposal to vary the Enterprise Agreement
[78]
The 28 June vote to vary the Enterprise Agreement
[93]
The 28 June discussions between officers of Boral and De Martin & Gasparini
[98]
The 3 July meeting of the employees
[101]
The 5 July meeting at the Barangaroo site
[106]
The 5 July meeting at the Harold Park site
[108]
Other events
[109]
THE ALLEGED CONTRAVENTIONS
[111]
De Martin & Gasparini – adverse action on 3 July 2017
[112]
Mr Mazzarolo and Mr Miller – aiding and abetting adverse action on 3 July 2017
[115]
De Martin & Gasparini – coercion on 3 and 5 July 2017
[118]
Mr Mazzarolo – coercion on 3 July 2017
[119]
Mr Miller – coercion on 3 July 2017
[120]
Mr Mazzarolo – aiding and abetting coercion on 3 July 2017
[121]
Mr Miller – aiding and abetting coercion on 3 July
[122]
ISSUES
[123]
RESOLUTION OF THE ISSUES
[139]
The evidence generally
[140]
Issue 1: what was said and done at the 28 June meeting?
[161]
Mr Harper’s evidence concerning the 28 June meeting
[162]
Mr Miller’s evidence concerning the 28 June meeting
[185]
Mr Mazzarolo’s evidence concerning the 28 June meeting
[200]
Mr Gidaro’s note
[209]
Conclusions in relation to the 28 June meeting
[211]
Issue 2: what was said and done at the 3 July meeting?
[221]
Mr Mazzarolo’s opening remarks
[222]
Mr Miller’s statements
[238]
Issue 3: did De Martin & Gasparini take adverse action against the employees on 3 July?
[258]
Threatening to dismiss the employees
[259]
Prejudicial alteration
[270]
Injuring the employees in their employment
[277]
Issue 4: were the actions authorised by or under the Fair Work Act?
[281]
Issue 5: was the action taken because the De Martin & Gasparini employees had, or had exercised, a workplace right?
[295]
Issue 6: did De Martin & Gasparini contravene s 340 of the Fair Work Act?
[328]
Issue 7: were Mr Mazzarolo and Mr Miller involved in De Martin & Gasparini’s contravention of s 340?
[329]
Issue 8: what was said by Mr Miller at the 5 July meetings?
[338]
Barangaroo site
[339]
Harold Park site
[347]
Issue 9: did De Martin & Gasparini on 3 and 5 July 2017 threaten to take action against the employees?
[356]
Issue 10: did De Martin & Gasparini intend to coerce the employees?
[360]
Issue 11: did De Martin & Gasparini contravene s 54 of the Building Act?
[379]
Issue 12: did Mr Mazzarolo and Mr Miller aid and abet any contravention of s 54 of the Building Act by De Martin & Gasparini?
[380]
Issue 13: did Mr Mazzarolo and Mr Miller themselves contravene s 54 of the Building Act?
[381]
Issue 14: other accessorial liability of Mr Mazzarolo and Mr Miller.
[382]
SUMMARY OF FINDINGS
[383]
ORDERS
[386]
WIGNEY J:
In June 2017, De Martin & Gasparini Pty Limited found itself between the proverbial rock and a hard place. On the one hand, as a company that operated in the building industry, it faced the impending onset of the Code for the Tendering and Performance of Building Work 2016 (Cth) (the Code), including its highly prescriptive and potentially punitive provisions concerning the content of enterprise agreements. On the other hand, it faced its employees and their union, who perhaps understandably wanted to retain the benefit of their existing enterprise agreement and the ability to decide whether or not to approve variations to it. This case concerns the actions that De Martin & Gasparini took in response to the conundrum it found itself in.
De Martin & Gasparini entered into an Enterprise Agreement with its employees and their union, the Construction, Forestry, Mining and Energy Union (CFMEU), in March 2015. The agreement provided that it was to remain in force until 31 March 2018. While at the time the agreement was negotiated the parties appear to have contemplated that some form of building code might come into existence in the future, the Code did not commence operation until 2 December 2016, some 20 months later. The Code provided that building industry participants were not to be covered by enterprise agreements that included certain types of clauses. More ominously, the Code provided that a building industry participant which was covered by an existing enterprise agreement that did not comply with the Code, together with any of its related entities, would be ineligible to tender for, be awarded, or perform Commonwealth Government funded building work after a specified transitional period.
The difficulty that De Martin & Gasparini found itself in was that some of the clauses in the Enterprise Agreement were not permitted by the Code. To make matters worse, in February 2017 the end date of the transitional period, which was originally 29 November 2018, was brought forward to 1 September 2017. Perhaps not surprisingly, the fact that come 1 September 2017 De Martin & Gasparini might find itself covered by an enterprise agreement that did not comply with the Code was perceived to be a major problem, not least because De Martin & Gasparini’s related entities included its parent company, Boral Limited and other companies in the Boral Group. Needless to say, the Boral Group was a large group of companies operating in the construction industry.
De Martin & Gasparini initially endeavoured to overcome the problem caused by the Code by attempting to vary the Enterprise Agreement to make it “Code compliant”. That required the agreement of its employees. Securing the agreement of the employees was made difficult by at least two considerations. First, the proposed varied agreement was perceived by the employees and the CFMEU to diminish various rights or conditions the employees had under the agreement. Second, the CFMEU appears to have been generally opposed to varying enterprise agreements to make them Code compliant, at least while there was still a prospect that the Senate might vote to disallow the Code pursuant to a motion that was to be determined in August 2017. In any event, the proposal to vary the agreement was put to the workers on 28 June 2017 and their votes were taken. A majority of the employees voted against the proposed variations.
If De Martin & Gasparini found itself between a rock and a hard place, its response to the employees’ refusal to vary the Enterprise Agreement was to put the employees in an even harder place. On the afternoon of the day that the employees voted not to approve the proposed variations to the Enterprise Agreement, a number of senior officers of De Martin & Gasparini and Boral, and their lawyers, met and conferred to consider the “next steps”. While there is some dispute about precisely what was discussed and agreed at that meeting, in one way or another the next step involved potentially making all the employees who were covered by the Enterprise Agreement redundant by 31 August 2017. Given that this would constitute a ‘major workplace change’, a clause in the Enterprise Agreement required De Martin & Gasparini to consult with the employees and the CFMEU. A meeting of the employees was therefore organised.
A few days later, on 3 July 2017, two managers employed by De Martin & Gasparini, Mr Louie Mazzarolo and Mr Greg Miller, spoke at a meeting of the employees. Mr Mazzarolo read a memorandum to the workers which advised them that De Martin & Gasparini was “seriously considering” making all its employees who were covered by the Enterprise Agreement redundant. The reason for that was said to be because of the risk to the Boral Group as a result of De Martin & Gasparini’s “inability to achieve Code compliance”. Other things were said at the meeting, though the precise content of the further statements by Mr Mazzarolo and Mr Miller was contentious. Mr Miller also conducted meetings with small groups of employees in relation to the proposed redundancies at various De Martin & Gasparini project sites on 5 July 2017. While the content of those discussions was again contentious, the discussions appeared to touch on the possibility of a further vote.
The CFMEU alleged that, by its actions through Mr Mazzarolo and Mr Miller, De Martin & Gasparini took adverse action against the employees because they had a workplace right in contravention of s 340 of the Fair Work Act 2009 (Cth), and threatened to take action against the employees with the intention of coercing them to vary the Enterprise Agreement contrary to s 54 of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (Building Act). It also alleged that Mr Mazzarolo and Mr Miller were involved as accessories to De Martin & Gasparini’s contraventions, and that Mr Mazzarolo and Mr Miller themselves contravened s 54 of the Building Act.
In relation to s 340 of the Fair Work Act, the CFMEU alleged that in proposing to employees covered by the Enterprise Agreement that they could be made redundant, De Martin & Gasparini threatened to dismiss the employees, injured them in their employment, and altered their positions to their prejudice. On the CFMEU’s case, that action was taken because the employees had and continued to have workplace rights: being the benefit of the Enterprise Agreement and the ability to vote in relation to the variation of the Enterprise Agreement, which is a process under the Fair Work Act. In relation to s 54 of the Building Act, the CFMEU alleged, in short, that Mr Miller and Mr Mazzarolo, and through them De Martin & Gasparini, threatened to take action against the employees with the intention of coercing them to vary or approve a variation of the Enterprise Agreement.
The CFMEU’s allegations raise complex questions of fact and law. In the first instance, it is necessary to determine exactly what was said and done at the various meetings, in particular the mass meeting on 3 July, but also the smaller meetings on 5 July. It is then necessary to determine whether the words and conduct as found constituted adverse action, for the purposes of s 340 of the Fair Work Act, or threatening to take action for the purposes of s 54 of the Building Act. The most complex questions, however, undoubtedly involve determining the reasons and intentions of the relevant actors. In relation to s 340, if the words and conduct of Mr Mazzarolo and Mr Miller constituted adverse action, was that adverse action taken because the employees had the benefit of the Enterprise Agreement or had exercised their right to vote under the Fair Work Act in relation to any proposed variation to the Enterprise Agreement? If the words and conduct of Mr Mazzarolo and Mr Miller constituted a threat to take action against the employees, was that done with the intention of coercing the workers to vary the agreement?
PROCEDURAL BACKGROUND
The CFMEU initially sought urgent interlocutory relief in respect of the proposed redundancies. The interlocutory application was resolved on the basis of undertakings given, without admission, by De Martin & Gasparini in circumstances where the final hearing was expedited.
The expedited final hearing ultimately proceeded over six hearing days. Judgment was reserved. Given the importance of ensuring that the parties knew where they stood prior to the end of the transitional period on 31 August 2017, at least in respect of the issues that arose in this proceeding, it was initially intended to hand down this judgment on 21 August 2017. That remained the intention until two developments occurred.
The first development was an application by the CFMEU to amend its originating application and amended statement of claim. That amendment application arose in the following way. In its originating application and amended statement of claim, the CFMEU claimed that the alleged actions of Mr Mazzarolo and Mr Miller in threatening to take action against the employees with the intention of coercing the employees amounted to contraventions of s 343 of the Fair Work Act. After judgment was reserved, however, the Court requested further submissions from the parties concerning the operation of s 54 of the Building Act. Section 343 of the Fair Work Act and s 54 of the Building Act are in very similar terms, save that s 54 relevantly applies only in the case where the action or threatened action was taken “with intent to coerce another person, or … apply undue pressure … to agree, or not to agree … to make, vary or terminate a building enterprise agreement”. Importantly, s 54(5) relevantly provides that, to the extent that s 343 of the Fair Work Act relates to the making, varying or terminating of an enterprise agreement, that section does not apply if the agreement is a building enterprise agreement. It seemed tolerably clear that the Enterprise Agreement was a building enterprise agreement as defined in the Building Act.
The CFMEU’s response to the request for submissions was to seek leave to amend its application and pleading to effectively substitute alleged contraventions of s 54 of the Building Act for what was originally alleged to be contraventions of s 343 of the Fair Work Act. The CFMEU claimed that it had not been aware of s 54 of the Building Act, that it mistakenly alleged contraventions of s 343 of the Fair Work Act when it should have alleged contraventions of s 54 of the Building Act, that the effect of s 54(5) was that its existing case under s 343 of the Fair Work Act was not maintainable, and that if the amendment was permitted, it would not seek to call any further evidence. It submitted that the amendment should be permitted so that the real issues in dispute between the parties could be determined by the Court.
De Martin & Gasparini, Mr Mazzarolo and Mr Miller opposed the CFMEU’s amendment application. They submitted that they would be prejudiced by the amendment, primarily because s 54 of the Building Act was in at least one respect broader than s 343 of the Fair Work Act. The intention element in s 343 of the Fair Work Act is an intention to coerce, whereas the intention element in s 54 of the Building Act is an intention to coerce or apply “undue pressure”. As will be seen, there is considerable authority in relation to the element of intention to coerce in this context. What little authority there is in relation to the element of intention to apply undue pressure, however, tended to suggest that it may have a wider operation, or impose a lower threshold, than the element of intention to coerce: John Holland Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2009] FCA 235; 174 FCR 526 at [56]-[61]; Australian Federation of Air Pilots v Jetstar Airways Pty Ltd [2014] FCA 15 at [13]. It was submitted that in those circumstances, it would be unfair to permit the CFMEU to amend after the evidence and submissions had concluded and judgment had been reserved. Other submissions were advanced, though it is unnecessary to refer to them at length. Not surprisingly they focussed on the late stage at which the amendment application was being made.
The CFMEU’s amendment application was allowed, but only to the extent that the amendments did not include the allegation that Mr Mazzarolo and Mr Miller acted with the intention of applying undue pressure on the employees. The CFMEU was restricted to alleging that the alleged contraventions of s 54 of the Building Act were made out on the basis that there was an intention to coerce. The parties agreed that if the amendments were limited in that way, it would be unnecessary to call any further evidence, or make any further submissions. In those circumstances there would be no prejudice to De Martin & Gasparini, Mr Mazzarolo or Mr Miller. Nor would there be any other basis to refuse the amendment application. Limited in that way, the CFMEU’s case was factually and legally the same as it had been prior to the amendment, save that the alleged conduct contravened s 54 of the Building Act rather than s 343 of the Fair Work Act.
The second development was that De Martin & Gasparini requested that the Court defer handing down the judgment. In support of that request, evidence was adduced that indicated that on 23 August 2017 the employees were to vote in respect of a further proposed variation of the Enterprise Agreement. Preliminary advice had been received from the Australian Building and Construction Commission to the effect that the proposed amended enterprise agreement would meet the requirements of the Code. More significantly, it would appear that the CFMEU, as the industrial association able to represent the industrial interests of the employees, agreed with the proposed amended enterprise agreement. De Martin & Gasparini put forward a number of reasons why, given that development, the Court should not hand its judgment down on 21 August 2017 as proposed. It is unnecessary to detail those reasons. It was clear that the urgency had gone out of the situation and that there was no longer any pressing reason to hand the judgment down prior to 31 August 2017.
ADVERSE ACTION UNDER THE FAIR WORK ACT
Part 3-1 of the Fair Work Act contains a number of provisions the object of which is, amongst other things, to protect workplace rights and the exercise of those rights: s 336(1)(a).
Section 340(1), which provides protection against adverse action, is in the following terms:
340 Protection
(1) A person must not take adverse action against another person:
(a) because the other person:
(i) has a workplace right; or
(ii) has, or has not, exercised a workplace right; or
(iii) proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or
(b) to prevent the exercise of a workplace right by the other person.
In broad terms, s 340 relevantly contains two key elements. The first element is that a person does something that comprises “adverse action” against another person. The second is that the adverse action is taken “because” the other person has a workplace right, or has or has not exercised a workplace right, or proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right.
In relation to the first element, s 342 relevantly defines adverse action as follows:
342 Meaning of Adverse Action
(1)The following table sets out circumstances in which a person takes adverse action against another person.
Meaning of adverse action Item Column 1
Adverse action is taken by ...
Column 2
if ...
1 an employer against an employee the employer:
(a) dismisses the employee; or
(b) injures the employee in his or her employment; or
(c) alters the position of the employee to the employee’s prejudice; or
(d) discriminates between the employee and other employees of the employer.
(Emphasis added)
As will be considered in more detail later, injuring an employee in her or her employment, for the purposes of category (b), extends beyond financial injury or the deprivation of contractual rights: it is applicable to “any circumstances where an employee in the course of his employment is treated substantially differently to the manner in which he or she is ordinarily treated and where that treatment can be seen to be injurious or prejudicial”: Squires v Flight Stewards Association of Australia (1982) 2 IR 155 at 164. It includes injury of any compensable kind: Patrick Stevedores Operations No 2 Pty Ltd v Maritime Union of Australia [1998] HCA 30; 195 CLR 1 at [4], discussing the analogous s 298K(1)(b) of the former Workplace Relations Act1996 (Cth).
Likewise, prejudicial alteration of employment per category (c) is a broad category “which covers not only legal injury but any adverse affection of, or deterioration in, the advantages enjoyed by the employee before the conduct in question”: Patrick Stevedores at [4], discussing s 298K(1)(c) of the Workplace Relations Act; cited with approval in Qantas Airways Limited v Australian Licensed Aircraft Engineers Association [2012] FCAFC 63; 202 FCR 244 at [30].
Section 342(2)(a) relevantly provides that adverse action includes threatening to take action covered by the table in s 342(1). As discussed in some more detail later, a threat to take action can be conditional and generally requires the threat to be communicated directly or indirectly to the intended recipients: Construction, Forestry, Mining and Energy Union v State of Victoria & Ors [2013] FCA 445 at [219]-[229].
Finally, in relation to the first element of s 340, s 342(3) relevantly provides that adverse action does not include action that is authorised by or under the Fair Work Act.
In relation to the second element of s 340, s 341(1)(a) provides that a person has a workplace right if the person is, inter alia, entitled to a benefit under a “workplace instrument”; and s 341(1)(b) provides that a person has a workplace right if the person is able to initiate, or participate in, a process or proceeding under a workplace law. A “workplace instrument” is defined in s 12 as meaning an instrument that is made under, or recognised by, a workplace law and concerns the relationships between employers and employees. A workplace law is defined in s 12 as including the Fair Work Act itself. Part 2-4 of the Fair Work Act contains detailed provisions concerning enterprise agreements. An enterprise agreement is therefore a workplace instrument for the purposes of the Fair Work Act. As will be seen, the provisions of the Fair Work Act that deal with enterprise agreements include a process that persons covered by an enterprise agreement are able to initiate or participate in for the purposes of varying the agreement.
Perhaps more significantly, the requirement that the adverse action be taken “because” the other person, relevantly, had or had exercised a workplace right, means that it is necessary to determine whether the person took the action for a particular reason. In that regard, s 360 provides that for the purposes of Part 3-1, which includes s 340, “a person takes action for a particular reason if the reasons for the action include that reason”.
Importantly, s 361 effectively reverses the onus in respect of proving the reason that action was taken for the purpose of contraventions of Part 3-1 of the Fair Work Act, which includes s 340. Section 361 provides as follows:
361 Reason for action to be presumed unless proved otherwise
(1)If:
(a)in an application in relation to a contravention of this Part, it is alleged that a person took, or is taking, action for a particular reason or with a particular intent; and
(b)taking that action for that reason or with that intent would constitute a contravention of this Part;
it is presumed that the action was, or is being, taken for that reason or with that intent, unless the person proves otherwise.
(2)Subsection (1) does not apply in relation to orders for an interim injunction.
There is considerable jurisprudence concerning the “because” element in s 340 (and the similar element in s 346) and the operation of s 361 in that context. The leading authorities are Board of Bendigo Regional Institute of Technical and Further Education v Barclay [2012] HCA 32; 248 CLR 500 and Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2014] HCA 41; 253 CLR 243. The principles to be derived from those and other authorities in relation to this element will be considered later in these reasons.
Section 793, which provides for the circumstances in which the conduct of an officer, employee or agent of a body corporate is taken to have been the conduct of the body corporate, and also facilitates proof of the state of mind of the body corporate, is in the following terms:
793 Liability of bodies corporate
Conduct of a body corporate
(1)Any conduct engaged in on behalf of a body corporate:
(a)by an officer, employee or agent (an official ) of the body within the scope of his or her actual or apparent authority; or
(b)by any other person at the direction or with the consent or agreement (whether express or implied) of an official of the body, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the official;
is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body.
State of mind of a body corporate
(2)If, for the purposes of this Act or the procedural rules, it is necessary to establish the state of mind of a body corporate in relation to particular conduct, it is enough to show:
(a)that the conduct was engaged in by a person referred to in paragraph (1)(a) or (b); and
(b)that the person had that state of mind.
Meaning of state of mind
(3)The state of mind of a person includes:
(a)the knowledge, intention, opinion, belief or purpose of the person; and
(b)the person's reasons for the intention, opinion, belief or purpose.
Section 550 of the Fair Work Act provides for a form of accessorial liability in respect of contraventions of civil penalty provisions. It is in the following terms:
550 Involvement in contravention treated in same way as actual contravention
(1)A person who is involved in a contravention of a civil remedy provision is taken to have contravened that provision.
(2)A person is involved in a contravention of a civil remedy provision if, and only if, the person:
(a)has aided, abetted, counselled or procured the contravention; or
(b)has induced the contravention, whether by threats or promises or otherwise; or
(c)has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or
(d)has conspired with others to effect the contravention.
Section 340 is a civil penalty provision: s 539(1) and item 11 in the table in s 539(2). A person affected by a contravention of s 340 and an industrial association may apply to, inter alia, this Court, for orders in relation to the contravention: s 539(2) and columns 2 and 3 of item 11 of the table thereto; see also s 540(1)(a) and s 543(6)(b). There was no dispute that De Martin & Gasparini’s employees were affected by the alleged contravention, or that the CFMEU is an industrial association which is entitled to represent the employees’ industrial interests and therefore has standing to apply for orders in respect of the alleged contraventions. The maximum penalty for a contravention of s 340 is sixty penalty units: column 4 of item 11 in the table in s 539(2). As of 1 July 2017, this amounts to a maximum penalty of $12,600 per contravention: s 4AA of the Crimes Act 1914 (Cth).
COERCION UNDER THE BUILDING ACT
Section 54 of the Building Act provides as follows:
54 Coercion of persons to make, vary, terminate etc. enterprise agreements etc.
(1)A person must not:
(a)organise or take, or threaten to organise or take, any action; or
(b)refrain, or threaten to refrain, from taking any action;
with intent to coerce another person, or with intent to apply undue pressure to another person, to agree, or not to agree:
(c)to make, vary or terminate a building enterprise agreement; or
(d)to approve any of the things mentioned in paragraph (c).
Note 1: See also Division 2 (reason for action and coercion).
Note 2: Grade A civil penalty.
(2)Subsection (1) does not apply to protected industrial action.
…
(5)To the extent that section 343 of the FW Act relates to:
(a)the making, varying or terminating of an enterprise agreement; or
(b)the appointment, or termination of appointment, of a bargaining representative for a proposed enterprise agreement;
that section does not apply if the agreement is a building enterprise agreement.
As has already been noted, s 54(1) of the Building Act essentially mirrors s 343 of the Fair Work Act, subject to its limited scope of operation in respect of making, varying, terminating or approving a building enterprise agreement as outlined above. The intention element in s 54(1) of the Building Act also includes the additional element of intention to apply “undue pressure”. For the reasons already given, however, the CFMEU’s case was limited to intention to coerce. Section 343 of the Fair Work Act also has a potentially wider operation than s 54 of the Building Act insofar as it applies to action taken against another person with the intent to coerce a third person. That difference is immaterial in the circumstances of this case. The CFMEU alleged that the threatened action was against the employees and was intended to coerce the employees.
Section 54(5) of the Building Act limits the operation of s 343 if it relates to varying a building enterprise agreement. The expressions ‘building enterprise agreement’ and ‘enterprise agreement’, are defined in s 5 of the Building Act as follows:
building enterprise agreement means an enterprise agreement that applies to building work (whether or not it also applies to other work).
…
enterprise agreement has the same meaning as in the FW Act.
‘Building work’ is defined extensively in s 6 to include, relevantly, the construction, alteration, extension, restoration, repair, demolition or dismantling of buildings, structures or works that form, or are to form, part of the land, whether or not the buildings, structures or works are permanent. Work that is preparatory to this work, such as the laying of foundations is also ‘building work’ for the purposes of s 6. ‘Enterprise agreement’ is defined in s 12 of the Fair Work Act to mean a single-enterprise agreement or a multi-enterprise agreement, which are in turn defined in ss 172(2) and 172(3).
Section 56 of the Building Act is in similar terms to s 360 of the Fair Work Act. It provides that for the purposes of Part 2 of Chapter 6 of the Building Act, which relevantly includes s 54, a person takes action for a particular reason if the reasons for the action include that reason. It is not entirely clear if this section applies in the case of s 54, which does not refer to a person taking action for a particular reason, but rather refers to a person taking action with a particular intention. On the one hand, in some circumstances at least, there may not be a significant difference between saying that a person has taken action for a particular reason, and saying that the person has taken action for a particular purpose or with a particular intent. On the other hand, section 57 of the Building Act, like s 361 of the Fair Work Act, expressly distinguishes between taking action for a reason, and taking action with a particular intent. That would suggest that s 56 is limited to reasons, not intention. The CFMEU did not submit that s 56 applied in the case of its allegations of contravention of s 54.
Section 57 of the Building Act is in relevantly identical terms to s 361 of the Fair Work Act. When applied to s 54, the effect is that, where it is alleged that a person took action with an intention to coerce, it is presumed that the action was taken with that intention unless the person proves otherwise. As will be discussed in more detail later, however, there is authority to the effect that s 361 of the Fair Work Act does not apply where the alleged action taken by the person only constitutes a threat. Given that s 57 of the Building Act is in identical terms to s 361 of the Fair Work Act, the same principle would appear to apply to it.
Section 97 of the Building Act, which has no analogue in the Fair Work Act, concerns the capacity and state of mind of the person being coerced. It provides as follows:
97 Capacity, state of mind etc. of person being coerced etc.
In applying a provision of this Act that refers to:
(a)coercing a person to do a particular thing; or
(b)applying undue pressure to a person to do a particular thing; or
(c)encouraging a person to do a particular thing; or
(d)advising a person to do a particular thing; or
(e)inciting a person to do a particular thing; or
(f)engaging in conduct with the intention of doing any of the above;
it is not relevant whether or not that person is able, willing or eligible to do that particular thing.
The CFMEU did not contend that s 97 had any particular relevance to its case concerning contravention of s 54 of the Building Act. That was perhaps because there was no question that the employees were able and eligible to vote on varying the Enterprise Agreement
Section 94 of the Building Act is in the same terms as the corporate liability provision in s 793 of the Fair Work Act, to the effect that the conduct of an officer or employee of a corporation acting within their actual or apparent authority will be taken to have been engaged in by the corporation.
Section 92 of the Building Act provides for a form of accessorial liability in essentially the same terms, and with the same effect, as s 550 of the Fair Work Act.
Section 81 of the Building Act sets out the regime for civil penalties. Section 81(1) empowers the Court to impose a pecuniary penalty, damages or any other order the court considers appropriate in respect of a contravention of a civil penalty provision. Relevantly, s 83(1) clarifies that ‘any other order that the court considers appropriate’ includes the power to order injunctions and interim injunctions.
Section 81(2) sets the maximum penalties under the Act. The notation to s 54(1) indicates that a contravention of s 54 is a Grade A civil penalty. Section 81(2)(a) provides that the maximum penalty for a contravention of a Grade A civil penalty provision is 1000 penalty units for a body corporate, and otherwise 200 penalty units. Accordingly, the maximum penalty if De Martin & Gasparini is found to have contravened s 54 is $210,000, while the maximum penalty for Messrs Mazzarolo and Miller is $42,000 each: s 4AA of the Crimes Act.
ENTERPRISE AGREEMENTS UNDER THE FAIR WORK ACT
As noted earlier, Part 2-4 of the Fair Work Act contains detailed provisions concerning enterprise agreements. Having regard to the nature of the allegations in this matter, it is necessary to refer to some of the provisions that deal with the making, coverage, variation and termination of enterprise agreements.
Section 172(1), which provides for the making of enterprise agreements, is in the following terms:
172 Making an enterprise agreement
Enterprise agreements may be made about permitted matters
(1)An agreement (an enterprise agreement) that is about one or more of the following matters (the permitted matters) may be made in accordance with this Part:
(a)matters pertaining to the relationship between an employer that will be covered by the agreement and that employer’s employees who will be covered by the agreement;
(b)matters pertaining to the relationship between the employer or employers, and the employee organisation or employee organisations, that will be covered by the agreement;
(c)deductions from wages for any purpose authorised by an employee who will be covered by the agreement;
(d)how the agreement will operate.
Note 1: For when an enterprise agreement covers an employer, employee or employee organisation, see section 53.
Note 2: An employee organisation that was a bargaining representative for a proposed enterprise agreement that is not a greenfields agreement will be covered by the agreement if the organisation notifies the FWC under section 183 that it wants to be covered.
The Fair Work Commission (FWC) must approve an enterprise agreement: s 186(1). The requirements and conditions for approval are contained in s 187.
Section 52 states that an enterprise agreement will apply to an employer, employee or employee organisation in relation to particular employment if the agreement is in operation, it ‘covers’ the employer, employee or employee organisation, and the application of the agreement is not precluded by any other provision of the Fair Work Act. Section 53(1) relevantly provides that an enterprise agreement will cover an employer or employee if the agreement is expressed, however described, to cover the employer or employee. An employee organisations such as the CFMEU will relevantly be covered by an enterprise agreement if the FWC notes in its approval decision that the agreement covers the organisation: s 53(2)(a). It should be noted that an employee organisation which was the bargaining representative for an enterprise agreement is entitled to make a written application to the FWC under s 183(1) to have the agreement cover it. If the relevant organisation makes an application under s 183, and the FWC approves the agreement, the FWC must note in its decision approving the agreement that the agreement covers the organisation: s 201(2).
Section 54, which sets out when an approved enterprise agreement commences and ceases to operate, is in the following terms:
54 When an enterprise agreement is in operation
(1)An enterprise agreement approved by the FWC operates from:
(a)7 days after the agreement is approved; or
(b)if a later day is specified in the agreement—that later day.
(2)An enterprise agreement ceases to operate on the earlier of the following days:
(a)the day on which a termination of the agreement comes into operation under section 224 or 227;
(b)the day on which section 58 first has the effect that there is no employee to whom the agreement applies.
Note: Section 58 deals with when an enterprise agreement ceases to apply to an employee.
(3)An enterprise agreement that has ceased to operate can never operate again.\
Whether De Martin & Gasparini’s non-Code compliant Enterprise Agreement would remain in operation if all of the workers covered by the agreement were made redundant was a topic of some controversy between the parties. Suffice it to say, at this juncture, that for the purposes of s 54(2), ss 224 and 227 relate to formal applications to the FWC to terminate an agreement, and s 58 governs the interaction between an existing enterprise agreement and a replacement agreement which cover the same employees, and the circumstances in which the old agreement will no longer apply to the employees. Neither s 54(2)(a) nor s 54(2)(b) contemplate an enterprise agreement ceasing to operate by virtue of the employees to whom the agreement applies being made redundant.
Variations to enterprise agreements are governed by s 207 of the Fair Work Act. Section 207 relevantly provides that an agreement between a single employer and its employees may be jointly varied by the employer, the current employees covered by the existing agreement, and the current employees who will be covered by the varied agreement: s 207(1)(a). Those employees are together referred to as ‘affected employees’: s 207(2).
Section 208 relevantly provides that an employer may request the affected employees to approve a proposed variation by voting for it, including by ballot or electronically. A variation of an enterprise agreement is taken to be made when a majority of the affected employees who cast a valid vote approve the variation: s 209(1).
As with enterprise agreements generally, variations to an enterprise agreement have no effect until they are approved by the FWC: s 207(3). The mechanism and conditions for the FWC’s approval of variations are contained in ss 210 to 216. In summary, once a variation is made pursuant to s 209, an application for approval must be made to the FWC within 14 days: s 210. The FWC must make a determination according to the conditions and requirements in s 211, which relevantly require the FWC to approve the variation if it is satisfied of three things: first, that had an application been made for the approval of the agreement as a new agreement, in the form as proposed to be varied, the FWC would have been required to approve the agreement under s 186; second, that the nominal agreement does not exceed four years; and third, that there are no serious public interest grounds for not approving the variation. A variation can be approved with undertakings (ss 212, 213), and the FWC retains the power to refuse an application for approval (s 214).
In much the same way as variations, an employer and the employees covered by an enterprise agreement can jointly agree to terminate the agreement: s 219(1). The termination must be approved by the FWC: s 219(2). Employers may request that employees vote to approve a proposed termination (s 220(1)) and a termination is taken as agreed to when a majority of the employees cast a valid vote to approve the termination: s 221(1). Upon a termination being agreed to, an application for approval must be made to the FWC within 14 days (s 222(1), (3)), and the FWC must approve the termination if satisfied of the conditions in s 223.
THE BUILDING ACT AND THE CODE
To put the relevant events that occurred in late June and early July 2017 in context, it is necessary to refer briefly to some provisions of both the Building Act and the Code.
The Building Act
The Building Act commenced operation on 2 December 2016.
Section 34 of the Building Act allows the Minister to issue a code of practice to be known as the Building Code. Section 34(1) and (2) provide as follows:
34 Minister may issue Building Code
(1)The Minister may, by legislative instrument, issue one or more documents that together constitute a code of practice that is to be complied with by persons in respect of building work.
Note:The code is called the Building Code (see the definition of Building Code in section 5).
(2)Without limiting subsection (1), the Minister:
(a)must issue one or more documents under that subsection in relation to procurement matters relating to building work; and
(b)may issue one or more documents under that subsection in relation to work health and safety matters relating to building work.
Note:A single document may contain the entire Building Code (including the matters referred to in paragraph (2)(a) and, if applicable, paragraph (2)(b)).
Section 34(2E) is of particular relevance to the facts and circumstances of this matter. As enacted, s 34(2E) was in the following terms:
(2E)If a document issued under subsection (1) includes requirements in relation to the content of building enterprise agreements, a building industry participant may, before 29 November 2018, submit expressions of interest or tender for building work funded (whether directly or indirectly) by the Commonwealth or a Commonwealth authority even if a building enterprise agreement, made before the document is issued, that covers the building industry participant does not comply with any one or more of the requirements.
Note:A building enterprise agreement, made after the document is issued, that covers a building industry participant must comply with the requirements if the building industry participant is to submit expressions of interest or tender for building work.
(Emphasis added)
It is to be noted that s 34(2E) effectively prescribed a transitional period in respect of non-complying enterprise agreements made before the Code was issued. A building industry participant covered by such a non-complying enterprise agreement could submit expressions of interest or tender for building work funded by the Commonwealth before 29 November 2018. On 17 February 2017, however, the Building and Construction Industry (Improving Productivity) Amendment Act 2017 (Cth) amended s 34(2E) with the effect that the transition period was brought forward to 1 September 2017. It also inserted a new notation to s 34(2E), which clarified that “…a building enterprise agreement, made before the document is issued, that covers a building industry participant must comply with the requirements if the building industry participant is to be awarded or perform building work.”
The Code
The Code is a legislative instrument made under s 34(1) of the Building Act.
Section 6 of the Code, which sets out the Code’s application to building industry participants and their related entities, provides as follows:
6 Application of the code of practice
(1)A building contractor or building industry participant that could be required to comply with this code of practice by section 34 of the Act becomes subject to this code of practice (a code covered entity) from the first time they submit an expression of interest or tender (howsoever described) for Commonwealth funded building work on or after the date this code of practice commences.
Related entities become code covered entities
(2)A related entity of an entity (the first entity) becomes a code covered entity subject to this code of practice at the time the first entity becomes subject to the code of practice.
Code of practice applies to all new work
(3)A code covered entity is subject to this code of practice in respect of all building work that is described in Schedule 1 for which an expression of interest or request for tender (howsoever described) was called on or after the date this code of practice commenced.
…
Note 4: once a building contractor or building industry participant is subject to this code of practice, it and its related entities must comply with this code of practice on all new projects, including projects that are privately funded. However, some obligations in the code of practice only apply in respect of Commonwealth funded building work –see for example subsections 8(2)-(7) and Part 6.
There was no evidence that De Martin & Gasparini had submitted an expression of interest or tender following the commencement of the Code so as to bring itself within the terms of s 6(1). However, it was implicit from the way both parties conducted themselves, and conducted the proceedings, that they considered De Martin & Gasparini to be a ‘code covered entity’.
Section 3(2) defines “related entity” for the purposes of the Code in the following terms:
(2)In this code of practice, an entity (the second entity) is a related entity of a code covered entity if the second entity is engaged in building work and is:
(a)connected with the code covered entity by being a member of the entity; or
(b)an associated entity (within the meaning of section 50AAA of the Corporations Act 2001) of the code covered entity.
Note: two entities will be associated if they are related bodies corporate.
It can be seen the definition includes two limbs. The first limb relates to corporate structure; whether the entities are associated or connected as a matter of corporate structure. The second limb involves whether the related entity is “engaged in building work”. It was effectively common ground between the parties that Boral and other companies within the Boral Group that were engaged in building work were related entities of De Martin & Gasparini for the purposes of the Code.
Section 11 of the Code sets out the primary conditions an enterprise agreement must satisfy in order to be Code compliant. With examples and some notations excluded, s 11 provides as follows:
11 Content of agreements and prohibited conduct, arrangements and practices
(1)A code covered entity must not be covered by an enterprise agreement in respect of building work which includes clauses that:
(a)impose or purport to impose limits on the right of the code covered entity to manage its business or to improve productivity;
(b)discriminate, or have the effect of discriminating against certain persons, classes of employees, or subcontractors; or
(c)are inconsistent with freedom of association requirements set out in section 13 of this code of practice.
(2)Subsections (1) and (3) are subject to Schedule 5.
(3)Without limiting the generality of subsection (1), clauses are not permitted to be included in enterprise agreements that:
(a)prescribe the number of employees or subcontractors that may be employed or engaged on a particular site, in a particular work area, or at a particular time;
(b)restrict the employment or engagement of persons by reference to the type of contractual arrangement that is, or may be, offered by the employer;
(c)require, or result in, discrimination between classes of employees because of the basis on which they are lawfully entitled to work in Australia;
(d)require a code covered entity to consult with, or seek the approval of, a building association or an officer, delegate or other representative of the building association in relation to the source or number of employees to be engaged, or type of employment offered to employees;
(e)require a code covered entity to consult with, or seek the approval of, a building association or an officer, delegate or other representative of the building association in relation to the engagement of subcontractors;
(f)prescribe the terms and conditions on which subcontractors are engaged (including the terms and conditions of employees of a subcontractor);
(g)prescribe the scope of work or tasks that may be performed by employees or subcontractors;
(h)limit or have the effect of limiting the right of an employer to make decisions about redundancy, demobilisation or redeployment of employees based on operational requirements;
(i)prohibit the payment of a loaded rate of pay (whether or not expressed as an annual amount);
(j)require, or have the effect of requiring, the allocation of particular work to individual employees only if that allocation is extended to all other employees in the class of employees to which the individual employee belongs;
(k)provide for the monitoring of agreements by persons other than the employer and employees to whom the agreement applies;
(l)include requirements to apply building association logos, mottos or indicia to company supplied property or equipment;
(m)directly or indirectly require a person to encourage, or discourage, a person from becoming, or remaining, a member of a building association;
(n)directly or indirectly require a person to indicate support, or lack of support, for persons being members of a building association or any other measure that suggests that membership is anything other than a matter for individual choice;
(o)limit the ability of an employer to determine with its employees when and where work can be performed to meet operational requirements or limit an employer’s ability to determine by whom such work is to be performed;
(p)provide for the rights of an official of a building association to enter premises other than in compliance with Part 3-4 of the FW Act;
(q)provide for the establishment or maintenance of an area which is intended to be designated to be used by members, officers, delegates or other representatives of a building association in that capacity.
Note 1: this section does not authorise the taking of action that would constitute a contravention of the FW Act, and should be read in a manner that ensures consistency with that Act. For example, paragraph (d) does not override section 205 of the FW Act which provides that an enterprise agreement must include a consultation term that provides for consultation on major changes at the workplace.
…
Conduct by parties
(4)A code covered entity must not engage in conduct, or implement a procedure or practice (howsoever described) in respect of building work which has, or is likely to have, any of the effects described in subsections (1) or (3) if the conduct, practice or procedure was contained in an enterprise agreement.
(5)Subsection (4) does not apply if the conduct, practice, or arrangement is:
(a)expressly permitted or required by a Commonwealth industrial instrument; or
(b)necessarily linked to the code covered entity’s compliance with, or conduct expressly permitted by, an industrial instrument.
Note: section 11 does not require, permit or authorise a code covered entity to fail to comply with an enterprise agreement. A failure to meet the requirements of section 11 by a code covered entity, however, renders the entity ineligible to tender for, or be awarded, Commonwealth funded work—see subsection 23(1)(a).
Two further sections of the Code govern the contents of enterprise agreements. Section 11A provides:
11A Attempts to avoid section 11 requirements
(1)A code covered entity must not be covered by an agreement in respect of building work which includes clauses that:
(a)purport to remedy, or render ineffective, clauses in an enterprise agreement that are inconsistent with section 11, including clauses which:
(i) provide for clauses in the enterprise agreement to be read in a manner that is consistent with subsections 11(1) and (3); or
(ii) provide for clauses in the enterprise agreements to have no effect if they are inconsistent with subsection 11(1) or subsection 11(3); or
(b)require or provide for the application of terms and conditions contained in an enterprise agreement that does not cover and apply to the relevant employer and employees.
(2)Subsection (1) is subject to Schedule 5.
Finally, s 15 provides that enterprise agreements must have terms dealing with dispute settlement. It is in the following terms:
15 Dispute settlement
(1)A code covered entity must:
(a)ensure that an enterprise agreement that covers the entity in respect of building work includes a term for settling disputes in accordance with subsection 186(6) of the FW Act; and
(b)if a dispute settlement term of an enterprise agreement in respect of building work provides for arbitration of a dispute or other binding outcome, the entity must ensure that the term requires any decision of the arbiter to be consistent with this code of practice.
(2)Subsection (1) is subject to Schedule 5.
A failure to comply with the content requirements for enterprise agreements in ss 11, 11A and 15 of the Code results in the Code covered entity, along with its related entities, being ineligible to tender for or be awarded Commonwealth funded building work. Sections 23 and 24(1) of the Code provide as follows:
23 Key criteria for eligibility to be awarded Commonwealth funded building work
(1)To be eligible to be awarded Commonwealth funded building work:
(a)a code covered entity and its related entities must meet the requirements of section 11 of this code of practice; and
(b)a code covered entity must not be subject to an exclusion sanction.
24 Expressions of interest and tenders
(1)A funding entity must ensure that tender processes and calls for expressions of interest (howsoever described) in respect of Commonwealth funded building work are conducted in a manner consistent with this code of practice and must ensure that respondents are only permitted to participate in tender processes (howsoever described) where the respondent meets the eligibility requirements set out in section 23.
Schedule 5 to the Code provides for the application of s 11(1), 11A and 15. It provides as follows:
1 Application of sections 11, 11A and 15
(1)Subsections 11(1) and (3), 11A(1) and 15(1) do not apply in relation to an enterprise agreement made before 2 December 2016 that covers a building contractor, a building industry participant, or a related entity of a building contractor or building industry participant, to the extent that the requirements in those subsections must be met for the purposes of:
(a)the lodging of an expression of interest or tender by the contractor or participant before 1 September 2017; or
(b)the awarding, before 29 November 2018, of building work relating to an expression of interest or tender lodged by the contractor or participant in the period beginning on 2 December 2016 and ending at the commencement of the Building and Construction Industry (Improving Productivity) Amendment Act 2017 (the Amendment Act commencement); or
(c)the undertaking of building work referred to in paragraph (b); or
(d)the awarding, before 1 September 2017, of building work relating to an expression of interest or tender lodged by the contractor or participant after the Amendment Act commencement if the enterprise agreement does not apply to the contractor, participant or related entity in respect of that building work; or
(e)the undertaking of building work referred to in paragraph (d).
(2)Subsections 11(1) and (3), 11A(1) and 15(1) do not apply in relation to an enterprise agreement that covers a building contractor, a building industry participant, or a related entity of a building contractor or building industry participant, if:
(a)the enterprise agreement:
(i)was made before 2 December 2016; and
(ii)applies to the contractor, participant or related entity in respect only of building work relating to an expression of interest or tender lodged by the contractor or participant before 2 December 2016; or
(b)the enterprise agreement:
(i)was made before 25 April 2014; and
(ii)has not been varied in accordance with section 207 of the Fair Work Act 2009.
UNCONTROVERSIAL FACTS AND EVIDENCE
De Martin & Gasparini is a company engaged in the building and construction industry. Amongst other things, it provides specialist concrete pumping and placement services. It operates out of premises at Homebush and employs about 110 construction workers. It is a wholly owned subsidiary of Boral, which is a well-known international building and construction company. Boral has a number of subsidiaries that, together with Boral, comprise the Boral Group. De Martin & Gasparini is part of the Boral Group’s Australian cement business unit, called Boral Cement.
Mr Mazzarolo is a director of De Martin & Gasparini. He is also its general manager. He reports to Mr Ross Harper, who is executive general manager of Boral Cement, a member of the executive committee of Boral and also a director of De Martin & Gasparini. Mr Miller is the general manager of finance and operations at De Martin & Gasparini. He reports to Mr Mazzarolo.
The CFMEU is a well-known industrial association and employee organisation, as defined in the Fair Work Act. As its name suggests, it represents the industrial interests of employees in the construction industry, amongst others. Many of the 110 construction workers employed by De Martin & Gasparini are members of the CFMEU. Mr Rocco Ianni and Mr Anthony Vecchio are employees of De Martin & Gasparini and delegates of the CFMEU for De Martin & Gasparini employees who are members of the CFMEU.
The Enterprise Agreement
On 9 March 2015, De Martin & Gasparini, its employees and the CFMEU entered into the Enterprise Agreement. The agreement was signed by Mr Mazzarolo on behalf of De Martin & Gasparini, Mr Ianni on behalf of the employees and the State Secretary of the CFMEU. The agreement provided that it was to remain in force until 31 March 2018 and was to continue to apply beyond that date until replaced by another agreement or cancelled by one of the parties. It relevantly covered and applied to De Martin & Gasparini, its employees and the CFMEU: see s 52 and 53 of the Fair Work Act. It was approved by the FWC on 30 March 2015.
As might be expected, the Enterprise Agreement contained detailed provisions concerning the terms and conditions of the employment of the De Martin & Gasparini employees, including wage rates and other employment benefits, leave entitlements, employment security, hours of work, overtime and trade union rights and representation. Clause 31 of the Enterprise Agreement related to consultation regarding major workplace changes. It provided as follows:
31CONSULTATION FOR THE PURPOSES OF s 205 of the FAIR WORK ACT 2009
31.1 Consultation regarding major workplace change
(a) Company to notify/discuss
(i)Where the Company is seriously considering, and prior to the taking of any definite decision on, the introduction of major workplace changes that are likely to have a significant effect on Employees, the Company must notify and consult with the Employees and their Union/s or other representative/s.
…
(ii)Significant effects include termination of employment; …
The Enterprise Agreement was entered into well before the Code was issued or came into effect. It would appear, however, that participants in the building industry, including De Martin & Gasparini and the CFMEU, had been aware since at least 2014 that the Government was planning to issue some form of code of practice that would impact on enterprise agreements. On 17 April 2014, the then Minister for Employment, Senator Abetz, issued a media release which stated, in part:
The Government has today published an advance release of the Building and Construction Industry (Fair and Lawful Building Sites) Code 2014, designed to restore the rule of law and fairness to Australia’s construction sector.
The new code will come into effect when the Building and Construction Industry (Improving Productivity) Bill 2014 commences as an Act.
Minister for Employment, Senator Eric Abetz, said the new code sets out the standard of workplace relations conduct expected from those contractors that want to perform work funded by the Commonwealth Government.
"Fair, productive and lawful building sites are critical to Australia’s competitiveness, and job creation potential,” Senator Abetz said.
"It is important that contractors that want to work on projects funded by the taxpayer have the ability to operate efficiently and flexibly to ensure projects are delivered on time and on budget.
"For too long, the building and construction sector has provided the worst examples of industrial relations lawlessness.
"The new code emphasises the importance of compliance with the law and freedom of association on building sites.
"Our new code, together with a stronger ABCC, will help get the building and construction industry back on track.”
Under the Fair and Lawful Building Sites Code 2014, contractors that choose to be eligible for Commonwealth-funded building work will need to comply with the new code. If contractors do not comply with the code, they won’t be able to work on Commonwealth-funded projects.
The code reverses the previous Labor Government’s changes which were made to appease the extreme CFMEU which holds sway in the ALP.
Enterprise agreements and other “procedures” will no longer be able to contain restrictive work practices or discriminatory provisions. For example, clauses and practices that will not be permitted by the code include:
•requiring contractors to employ a non-working shop steward or job delegate
•‘one in, all in’ clauses where, if one person is offered overtime, all the other workers must be offered overtime whether or not there is enough work
•‘jump up’ provisions that prevent engaging subcontractors unless they provide certain union-dictated terms and conditions to workers despite their existing lawful industrial arrangements
•requiring contractors to obtain the approval of a union over the number and types of employees that a contractor may engage on a project.
…
Contractors will be covered, prospectively, from the first time they tender for Commonwealth-funded building work after the new code commences. Once a contractor is covered by the code, it will be required to act consistently with it, including on future privately funded work.
When in effect, the provisions of the code will apply in respect of enterprise agreements made after 24 April 2014. This means that from commencement of the code, contractors covered by agreements that were made after 24 April 2014 that do not comply with the code’s content requirements for enterprise agreements, will not be eligible to tender for and be awarded Commonwealth-funded building work.
…
It is perhaps not surprising, then, that the Enterprise Agreement contained a clause that provided for what was to occur if such a code came into force. Clause 33 provided:
33. CODE COMPLIANCE/SEVERABILITY
Code Compliance:
In the event that the Code comes into force and a provision of this Agreement is deemed as being non-compliant with the Code, the parties will vary the Agreement so that the non-compliant provision of the Agreement is Code complaint.
Actions taken by a party under this clause are not an extra claim.
Severability:
It is the intention of those covered by this Agreement that the Agreement contains only permitted matters under the Fair Work Act 2009.
The severance of any term of this Agreement that is, in whole, or in part, of no effect by virtue of the operation of s 253 of the Fair Work Act must not be taken to affect the binding force and effect of the remainder of the Agreement.
To the extent it is possible, all terms should be interpreted in a manner that would make them permitted matters.
The “Code” was defined as meaning “the Building and Construction Industry (Fair and Lawful Building Sites) Code 17 April 2014, when and is in force from time to time”.
It should be noted, in this context, that there was evidence to suggest that the CFMEU and, it would seem, some of the De Martin & Gasparini employees, did not consider that clause 33 obliged them to approve the variations to the Enterprise Agreement that De Martin & Gasparini considered were necessary to ensure that the Enterprise Agreement complied with the Code. That appeared to be in part due to the fact that the code referred to or defined in the Enterprise Agreement and clause 33 specifically was not the Code that came into effect on 2 December 2016.
Proposal to vary the Enterprise Agreement
In February 2017, Mr Mazzarolo became aware that there were some clauses in the Enterprise Agreement that did not comply with the Code. He also became aware that if De Martin & Gasparini did not have an enterprise agreement that complied with the Code by 1 September 2017, it and its related entities could not tender for or be awarded Commonwealth funded building work.
Once Mr Mazzarolo became aware of that issue, he and Mr Miller discussed it with Mr Vecchio and Mr Ianni, who were members of the De Martin & Gasparini Consultative Committee. At a Consultative Committee meeting on 10 March 2017, Mr Mazzarolo told Mr Vecchio and Mr Ianni that De Martin & Gasparini wanted to vary the Enterprise Agreement to make it Code compliant before 1 September 2017. Further discussions between or involving Mr Mazzarolo, Mr Miller, Mr Vecchio and other CFMEU representatives took place over the following months. The evidence concerning some of those discussions was controversial and a matter of dispute between the parties.
It is unnecessary to make findings concerning the precise content of the conversations between the parties concerning the CFMEU’s attitude to the proposal to vary the Enterprise Agreement. Suffice it to say that, as a result of the discussions that did occur, it became clear to Mr Mazzarolo and Mr Miller that the CFMEU was unlikely to support, or recommend to the De Martin & Gasparini employees that they should support, any variations to the Enterprise Agreement to make it Code compliant, at least prior to the anticipated Senate vote on the disallowance motion on 9 August 2017. For his part, Mr Mazzarolo was concerned that waiting until 9 August 2017 to deal with the variation of the Enterprise Agreement was not a viable option because that would not provide sufficient time to ensure that the agreement was Code compliant before 31 August 2017. That concern was shared by other senior officers of De Martin & Gasparini and Boral, including Mr Harper and Mr Miller.
In mid-June, Mr Mazzarolo decided that De Martin & Gasparini’s proposed variations to the Enterprise Agreement would be put to a vote of the employees. He arranged for there to be a meeting of the employees on 20 June 2017 to discuss the proposed variations. The vote was to be held on 28 June 2017.
At the meeting on 20 June 2017, Mr Mazzarolo made a presentation to the employees concerning the proposed variations to the Enterprise Agreement. He outlined the proposed variations and conveyed to the employees his views concerning the importance of varying the agreement to make it Code compliant. The CFMEU also addressed the workers.
It is unnecessary to set out at length the evidence concerning what was said and by whom at the 20 June meeting. Some of it was a source of controversy between the parties, though mostly in respect of matters that ultimately matter little to the issues in this case. It is sufficient to refer two aspects of the evidence.
The first concerns something that was said by Mr Mazzarolo in response to a question asked by one of the employees concerning the possibility that Boral might shut down De Martin & Gasparini, or make all the employees redundant, if the employees did not vote to approve the proposed variations. Mr Mazzarolo’s response sheds some light on Mr Mazzarolo’s state of mind at the time. Mr Mazzarolo was, of course, a director of De Martin & Gasparini.
Mr Ianni’s evidence of the exchange was as follows:
During Mr Mazzarolo’s presentation, he had an interaction with one of DMG’s employees Scott Ferguson in words to the following effect:
Mazzarolo:We are a tiny dot. We are insignificant to Boral. Boral makes $1 billion a year and we only make $100 million. They aren’t going to risk $1 billion for us.
Ferguson: Are you saying they will get rid of us? They will shut us down?
Mazzarolo: They are your words not mine.
Mr Vecchio’s evidence was as follows:
One of the workers, Scott Ferguson asked a question. He said words to the effect of, “well if Boral is so big, and we’re just a small part of Boral, is what you’re saying that if we don’t get this done they’re going to shut us down? Mr Mazzarolo pulled a face and said words to the effect of “well Scott, they’re your words, not mine but, yeah that’s it. You said it though, I didn’t say it.
Mr Mazzarolo denied that he said the words attributed to him by Mr Vecchio. His version of the exchange was as follows:
There were no questions until the end. Scott Ferguson, one of [De Martin & Gasparini’s] mechanics asked:
“Does this mean if we are not Code compliant we will all get sacked?
I replied in words to the effect of:
“They are your words not mine. We need to be Code complaint so we can make sure the whole Boral Group is compliant.”
There was some, albeit fairly limited, cross-examination of each of Mr Ianni, Mr Vecchio and Mr Mazzarolo in relation to their evidence of this exchange. It is unnecessary to decide which version of the exchange should be accepted. They are all very similar. Whichever version is accepted, the substance and effect of Mr Mazzarolo’s response to the question was that he would not, or could not, exclude the possibility that Boral might shut down De Martin & Gasparini and make all the employees redundant if the employees did not approve the variations to the Enterprise Agreement. Mr Mazzarolo’s response tended to reveal his state of mind at the time concerning the prospect or potential for redundancies. It suggested that he believed that if the employees voted against the proposed variations, and retained their existing rights and benefits under the non-complying Enterprise Agreement, there was a distinct possibility, if not probability, that Boral management would decide to make them redundant. It may be inferred that Mr Mazzarolo’s state of mind in that regard may have been the product, at least in part, of discussions he had previously had with officers of Boral. As events transpired, of course, that is exactly what happened.
It should also perhaps be noted in this context that Mr Miller’s evidence concerning this exchange differed significantly from the other three witnesses. It is unnecessary to say what Mr Miller’s evidence was. It suffices to say that his version, which could perhaps be seen as being more favourable to De Martin & Gasparini and Mr Mazzarolo, cannot be accepted given the relative commonality of the versions given by Mr Ianni, Mr Vecchio and Mr Mazzarolo. The unreliability of Mr Miller’s evidence concerning this exchange reflected poorly on Mr Miller and the reliability of his evidence generally. That is an issue which will be returned to in due course.
The second aspect of the evidence concerning the 20 June meeting that warrants brief mention is that it is fairly clear that the advice and information provided to the employees by the CFMEU was, at the very least, likely to have been perceived by the employees as amounting to a recommendation not to approve the variations. Ms Malia told the employees, in effect, that some of the proposed variations reduced the employees’ rights and benefits under the Enterprise Agreement. She also advised them that there was no guarantee that the Australian Building and Construction Commission would necessarily accept that the variations would make the Enterprise Agreement compliant in any event.
It follows from the findings that have been made in relation to issues 3, 4 and 5 that, through the words and conduct of Mr Mazzarolo and Mr Miller on 3 July 2017, De Martin & Gasparini contravened s 340 of the Fair Work Act. The action taken on 3 July 2017 constituted adverse action because it constituted a threat to dismiss the employees, caused injury to the employees in their employment and altered the position of the employees to their prejudice. The action was taken because the employees had a workplace right (the benefit of the Enterprise Agreement, a workplace instrument under the Fair Work Act) and exercised a workplace right (the ability to vote to approve or not approve variations to the Enterprise Agreement, a process under the Fair Work Act). The action is presumed to have been taken for those reasons because I am not satisfied that De Martin & Gasparini proved otherwise for the purposes of s 361 of the Fair Work Act.
Issue 7: were Mr Mazzarolo and Mr Miller involved in De Martin & Gasparini’s contravention of s 340?
The next question is whether Mr Mazzarolo and Mr Miller were involved in De Martin & Gasparini’s contravention of s 340 of the Fair Work Act because they aided, abetted, counselled, procured, or were otherwise by their acts knowingly concerned in or party to the contravention: s 550 of the Fair Work Act.
The words in s 550 of the Fair Work Act are taken from the criminal law where they are used to designate accessorial liability. It is unnecessary to consider the authorities concerning accessorial liability in any great detail. Suffice it to say that a person will be found to have aided, abetted, counselled or procured, or been knowingly concerned in an offence (or, in the case of s 550, a contravention), if the person intentionally participates in the offence: Yorke v Lucas [1985] HCA 65; 158 CLR 661. To form the requisite intent, the person must have knowledge of the essential matters which go to make up the offence (or contravention), whether or not the person knows that those matters amount to a crime (or contravention): Giorgianni v The Queen [1985] HCA 29; 156 CLR 473 at 479-480 (per Gibbs CJ), 493 (per Mason J), 500 (per Wilson, Deane and Dawson JJ); Construction, Forestry, Mining & Energy Union v Clarke [2007] FCAFC 87; 164 IR 299 at [26].
There could be little doubt that Mr Mazzarolo and Mr Miller relevantly participated in De Martin & Gasparini’s contravention of s 340, because it was through their words and conduct that the company took the relevant adverse action. The critical issue, however, is whether their participation was intentional. Did they have knowledge of all the essential elements that make up the contravention?
Importantly, as would be apparent from the consideration and determination of issue 5, the finding that De Martin & Gasparini contravened s 340 of the Fair Work Act was based in part on the fact that De Martin & Gasparini had not discharged the burden, imposed by s 361 of the Fair Work Act, of proving that it did not take the adverse action because the employees had a workplace right or rights. Importantly, however, s 361 of the Fair Work Act does not apply to claims of accessorial liability under s 550 of the Fair Work Act: Port Kembla Coal Terminal Ltd v Construction, Forestry, Mining and Energy Union [2016] FCAFC 99; 263 IR 344 at [448]; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd (No 3) [2013] FCA 525; 216 FCR 70 at [241]; Australian Building and Construction Commissioner v Parker [2017] FCA 564 at [107]. The critical question, then, is whether the evidence establishes to the requisite standard that Mr Mazzarolo and Mr Miller knew and intended that the adverse action was taken because the employees had a workplace right or rights, the rights being that the employees were entitled to the benefit of the Enterprise Agreement and that they were able to participate in a vote in relation to the variation of the Enterprise Agreement.
I am satisfied that the evidence concerning the words and conduct of Mr Mazzarolo and Mr Miller at the 3 July meeting establish that both Mr Mazzarolo and Mr Miller knew and intended that the actions taken at the meeting amounted to or constituted a threat to dismiss the employees, or relevantly injured the employees in their employment, or altered the positions of the employees to their prejudice. The evidence that supports that finding is set out at length earlier in these reasons. I am not satisfied to the requisite standard, however, that Mr Mazzarolo and Mr Miller knew or intended that the action was taken because the employees had the relevant workplace rights.
Neither Mr Mazzarolo nor Mr Miller was the relevant decision-maker. In doing and saying what they did at the 3 July meeting, they were essentially implementing the decision made by Mr Harper. Both Mr Mazzarolo and Mr Miller participated in the 28 June meeting, where the decision was made. I have found that the evidence concerning that meeting is somewhat unsatisfactory. I do not consider that the evidence of Mr Harper, Mr Mazzarolo and Mr Miller concerning the meeting was reliable or credible. That forms part of the reasons for finding that De Martin & Gasparini have not discharged the burden under s 361. I have also found that those parts of Mr Mazzarolo’s evidence and Mr Miller’s evidence that touch on their understanding or knowledge of the reasons for the decision were unreliable. It does not follow, however, that I can be positively satisfied that Mr Mazzarolo and Mr Miller knew or intended that the relevant decision was made, or the relevant action was taken for the proscribed reasons.
In many cases it will be difficult for an applicant who alleges a contravention of s 340 to prove the reason or reasons that particular adverse action was taken. That is particular so given the fine and nuanced distinctions that apply by reason of the judgments in Barclay and BHP Coal. That is, no doubt, why the legislature saw fit to include s 361 and effectively reverse the onus in relation to that element of the contravention. As already noted, however, s 361 does not assist an applicant who is alleging that a person was involved in another’s contravention by reason of s 550 of the Fair Work Act. It does not assist the CFMEU in seeking to prove Mr Mazzarolo’s and Mr Miller’s knowledge or state of mind concerning the reasons for taking the relevant adverse action.
There is no direct evidence that Mr Mazzarolo and Mr Miller knew that the decision taken by Mr Harper, on behalf of De Martin & Gasparini, which they implemented or carried into effect on 3 July 2017, was made or taken because the employees had the relevant workplace rights. The question, then, is whether the facts as found support the inference that they knew that to be the case. On balance, I am not comfortably satisfied that the facts support that inference.
For the reasons already given, I have little doubt that Mr Mazzarolo and Mr Miller knew that the decision made by Mr Harper was temporally and causally linked to the fact that the employees continued to have the benefit of the non-compliant Enterprise Agreement, and to the fact that the employees had exercised their right under the Fair Work Act to vote down the proposed variations to the agreement that were intended to make it Code compliant. They knew that De Martin & Gasparini was in the difficult position it was in by virtue of those very matters. The difficulty, however, is that there is little if anything to suggest that Mr Mazzarolo and Mr Miller knew that Mr Harper made the decision because those matters had the character of workplace rights. I am not satisfied that the evidence supports the inference that either Mr Mazzarolo or Mr Miller knew that that was the substantial or operative reason for Mr Harper’s decision.
Issue 8: what was said by Mr Miller at the 5 July meetings?
There were two relevant toolbox talks or meetings on 5 July 2017: one at the Barangaroo construction site and one at the Harold Park construction site. It should be noted that, unlike the 3 July meeting, there were only a handful of De Martin & Gasparini workers at these two toolbox talks.
Barangaroo site
The issue, in relation to the toolbox meeting at Barangaroo on 5 July 2017 is whether Mr Miller told the assembled employees that “the only way another vote to vary the [Enterprise] Agreement could only be held [sic] if the [CFMEU] asked for a revote”: FASOC [17].
The evidence establishes that Mr Miller did tell the employees something along those lines.
Mr Ianni’s evidence was that an exchange occurred between an employee, Mr D’Amico, and Mr Miller, during which Mr D’Amico said “the only way we could fix this is if we [vote] yes next time?” Mr Miller replied: “there won’t be a revote. The only way [there] can be a revote is if you ask the union and the union asks us”.
The CFMEU tendered a paragraph of an affidavit sworn by Ms Macri in which Ms Macri recounted that Mr Miller said “there is no revote planned unless it is supported by the union”.
The note taken by Mr Gidaro in relation to the 5 July meeting at Barangaroo provides some limited support for Mr Ianni’s account of the exchange between Mr D’Amico and Mr Miller. The note records:
JD asked what can be done, what are the options, the only option he sees is that they must vote yes.
Clarified that there is to be no vote offered and that we are open to suggestions.
Mr Gidaro’s evidence was broadly consistent with this part of his note. His evidence was that Mr Miller’s reply to Mr D’Amico was that “there’s not another vote scheduled”.
Mr Miller’s evidence was that, in reply to Mr D’Amico, he said: “Jason, there’s – there’s no other vote, but look, that’s the purpose of – of consultation. I will take your feedback on board”.
On balance, I prefer the evidence of Mr Ianni. It was broadly confirmed by the passage from Ms Macri’s affidavit. Moreover, it was clear from the evidence concerning the 28 June meeting that the consensus of those present at the meeting was that there was no point having a second vote unless the CFMEU supported it. It is entirely credible that Mr Miller would have communicated that view to the employees.
Harold Park site
The issue in relation to the toolbox meeting at Harold Park on 5 July is whether Mr Miller told the assembled workers that “there could be a revote on [De Martin & Gasparini’s] variation and that the employees or [the CFMEU] needed to ask”: FASOC [18].
I am satisfied that the evidence establishes that Mr Miller did tell the employees something along those lines.
Mr Ianni’s evidence was as follows:
Q: And once again, doing the best you can, can you tell us what was said on that occasion?
A: Mr Gidaro said words to the effect of, “Lendlease is Code compliant.” At that point, Mr Miller started talking. A conversation occurred, and there were words to the effect of – Miller, “If you want a revote, you have to ask the union, and the union will ask us.” Macri, “No. There won’t be another revote.” Miller, “Yes. They can have another revote. They just need to ask the union. That’s the whole point of this consultation.”
Mr Vecchio’s evidence differed somewhat to Mr Ianni’s evidence, but was relevantly to similar effect. His evidence was as follows:
Q: And, once again, and doing your best, in chronological order, can you tell me what was said at that meeting?
A: Yes. One of the boys – I can’t remember who asked the question. They asked Greg is there going to be another ---
Q: When you say one of the boys?
A: One of the boys. It was either Paul Mederas or Louis Palmer.
Q: Yes?
A: He asked Greg will there be another vote? And Greg said – he said if it’s part of the feedback we will seriously look at it. And then Elizabeth Macri said no, no. There won’t be another vote. We’ve had the vote. Then Greg Miller said to the words of – he said, well, if it’s part of the feedback we will have a look at doing another vote. And Elizabeth said no, no.
In her affidavit, Mr Macri deposed to the fact that Mr Miller said “there can be a revote if its supported by the union”, and that in response she said “No. There is no revote scheduled”.
As already indicated, Mr Gidaro was called as a witness by the CFMEU. In cross examination, he gave the following evidence concerning what was said at the Harold Park site toolbox talk:
Q: And do you recall Mr Palmer asking any questions?
A: Yes. Mr Palmer asked if there could just be another vote.
Q: And did anyone from DMG make a response to that?
A: I can’t remember who said what but someone said that there’s not another vote. Again, there’s not another vote being – or there’s not another vote happening and then I think that might have been – and then someone else said the only way that that would happen is if there’s an ask from the workforce as part of the consultation process for that to happen.
Mr Miller’s evidence in chief was as follows:
Q: Okay. And what do you recall happened in the Q and A? Who said what?
A: There was – pardon me. So there was two workers there, Louis Palmer and Paul Mederas. Louis Palmer said, “Can’t we just have another vote? Can’t we have a revote?” Liz Macri answered that question, and she said, “No. You know, there’s no other vote. There’s no second vote.” Louis then kind of gestured over to me, kind of like that, saying, you know, more, and I said, “Look, Louis, you know, there’s no other vote. The only way there could be another vote is if it overwhelmingly came out in the consultation period, but you know, thanks, and I – I will take your feedback on board.”
Mr Miller denied that he mentioned the union or the workforce in his answer to the question put to him at the meeting.
There are obviously some differences between these accounts of what was said at the Harold Park toolbox meeting. It is unnecessary to resolve all those differences. Suffice it to say that I am satisfied that while Ms Macri may have endeavoured to convey that no revote was scheduled, Mr Miller nevertheless conveyed that there could be another vote if it was supported by the employees or the CFMEU. That was the effect of the evidence of Mr Ianni, Mr Gidaro and Ms Macri. For the reasons already given, I have significant doubts concerning the credibility and reliability of much of Mr Miller’s evidence. It was readily apparent that he often fashioned his evidence to suit his and De Martin & Gasparini’s defence. His denial that he referred to the workforce or the union in the context of a possible revote was another example of that sort of evidence.
Issue 9: did De Martin & Gasparini on 3 and 5 July 2017 threaten to take action against the employees?
This issue relates to the first element of CFMEU’s pleaded allegation that De Martin & Gasparini contravened s 54 of the Building Act.
While the CFMEU pleaded that De Martin & Gasparini “threatened to take or organise to take” action against the employees on 3 and 5 July (FASOC [24]), it is clear that the CFMEU’s case was limited to threatening to take action. The action that was threatened was making all the employees who were parties to the Enterprise Agreement redundant by 31 August 2017: FASOC [24]. That threat was conveyed or constituted by the statements made by Mr Mazzarolo (FASOC [13] and [14]) and Mr Miller at the 3 July meeting (FASOC [16]), by Mr Miller handing the employees a copy of the 3 July memorandum at the end of the 3 July meeting (FASOC [15]) and by Mr Miller telling the employees on 5 July 2017 (presumably at the toolbox meetings as Barangaroo and Harold Park) “that the [Enterprise] Agreement could be varied if the employees or [the CFMEU] asked for another vote”: FASOC [24].
For the reasons given earlier in the context of issues 2 and 3, I am satisfied that the evidence establishes that the words and conduct of Mr Mazzarolo and Mr Miller on 3 July 2017 amounted to a threat to make the employees redundant should De Martin & Gasparini not otherwise be Code compliant by that date. The only way that De Martin & Gasparini could become Code compliant by 31 August 2017, putting aside for present purposes the threatened redundancies, was if there was a second vote at which the proposed variations to the Enterprise Agreement were approved by the employees. For the reasons given in the context of issue 8, I am satisfied that Mr Miller did convey to the handful of workers at the two relevant toolbox talks on 5 July 2017 that, in effect, there could or would only be a second vote if it was requested by the workers or the CFMEU.
The more significant issue in relation to the CFMEU’s case in relation to the alleged contravention of s 54 of the Building Act is whether the alleged action was threatened with the intention to coerce the employees.
Issue 10: did De Martin & Gasparini intend to coerce the employees?
This issue relates to the first element of CFMEU’s pleaded allegation that De Martin & Gasparini contravened s 54 of the Building Act.
The CFMEU contended that De Martin & Gasparini (by the words and conduct of Mr Mazzarolo and Mr Miller on 3 July 2017, and the words of Mr Miller on 5 July 2017) threatened to make the employees redundant with the intention to coerce the employees covered by the Enterprise Agreement to vary the Enterprise agreement: FASOC [24].
In the context of s 343 of the Fair Work Act, which as already noted is the analogue of s 54 of the Building Act, it is well accepted that “intention to coerce” involves two elements: first, it must be shown that it was intended that pressure would be exerted which would, in a practical sense, “negate choice”: and second, the exertion of pressure must involve conduct that is “unlawful, illegitimate or unconscionable”: Victoria v Construction, Forestry, Mining and Energy Union [2013] FCAFC 160; 218 FCR 172 at [71]-[72]; Seven Network (Operations) Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2001] FCA 456; 109 FCR 378 at [41]; Esso Australia Pty Ltd v Australian Workers Union [2016] FCAFC 72; 245 FCR 39 at [174].
In relation to the first element, it has been said that coercion implies a high degree of compulsion, and that it is insufficient to prove merely an intent to influence, persuade, induce or some other form of pressure by which a person is left with a realistic choice as to whether or not to comply: National Tertiary Education Industry Union v Commonwealth [2002] FCA 441; 117 FCR 114 at [103]; Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 353 at [51]-[52]. Having regard to the way the CFMEU pleaded its case, therefore, the CFMEU must prove that, in threatening to make the employees redundant as explained earlier, De Martin & Gasparini intended to exert sufficient pressure on the workers to ensure that they effectively had no choice but to call for a second vote and approve the proposed varied enterprise agreement.
It should be noted, in this context, that the CFMEU bore the onus of proving that subjective intention. There is authority that s 361 of the Fair Work Act does not apply in relation to an alleged contravention of s 343 of the Fair Work Act where the alleged action is a threat: Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Entergy Union (The Red & Blue Case) [2015] FCA 1125; 254 IR 200 at [111]; Parker at [105]. For my own part, I consider that the relevant principle established by those decisions is possibly contestable, though the CFMEU did not contend that the decisions were wrong, let along plainly wrong. Nor did the CFMEU otherwise submit that I was not bound to, or should not, follow those decisions. In the circumstances, I consider myself bound to follow them. Given that s 54 of the Building Act is in relevantly the same terms as s 343 of the Fair Work Act, and s 57 of the Building Act is in relevantly the same terms as s 361 of the Fair Work Act, the same principle would apply in relation to proof of the subjective element of an alleged contravention of s 54 of the Building Act where the alleged action constituted a threat. The CFMEU did not submit otherwise.
De Martin & Gasparini’s threat to make the employees redundant, through the words and conduct of Mr Mazzarolo and Mr Miller, undoubtedly had the effect of putting the employees under considerable pressure. That is an inference that is available from the very nature of the threat. It is in any event fairly apparent from the reaction of the employees, both at the 3 July meeting and the 5 July toolbox talks, that they felt under considerable pressure. That pressure was to a certain extent increased by Mr Mazzarolo’s statements at the 3 July meeting to the effect that they were there because the employees had not voted to approve the variations, and that he had told the employees that this would happen. The pressure was perhaps increased further still by Mr Miller’s statements about what was and was not “bullshit”, and in particular his statement that the only thing that was not bullshit was that if De Martin & Gasparini was not Code compliant by 31 August 2017 then there would be major workplace change. It may also be accepted that Mr Miller made some statements at the two 5 July toolbox talks that tended to suggest that a second vote was possible if it was supported by the employees and the CFMEU. Those statements were perhaps capable of being seen by the few employees present as suggesting a way to avoid the threatened redundancies.
While the effect of De Martin & Gasparini’s actions may have been to exert some degree of pressure on the workers, on balance I am not satisfied that the evidence is such that the CFMEU has discharged its burden of proving that De Martin & Gasparini intended to exert pressure on the workers to call a second vote, let alone such a high degree of pressure or compulsion as to negate choice, in the sense that the employees felt that they had no choice other than to call a second vote to approve the proposed variation. That is so for a number of reasons.
First, for the reasons already given, I am satisfied that the evidence shows that Boral and De Martin & Gasparini had effectively decided to make the employees redundant by 31 August 2017. The consensus at the 28 June meeting appeared to be that the only way that could be avoided would be if there was a second vote approving the variation, but there was little or no point in the company planning or arranging a second vote unless it was supported by the CFMEU. That was seen to be highly unlikely. It also appeared to be the consensus, or at least it was Mr Harper’s view, that there was insufficient time for a second vote. The evidence indicated that the company did not plan to arrange or facilitate a second vote. Nor did it expect that one would take place.
Second, while as previously indicated I have doubts about the reliability and credibility of some of the evidence concerning the discussions at the 28 June meeting, there was ultimately no evidence to suggest that the persons participating in the meeting discussed, let alone agreed, that the communication of the proposed redundancies to the workers was intended to coerce, compel or put pressure on the employees or the CFMEU to call for a second vote. There was insufficient evidence to support the CFMEU’s contention that there was, in effect, a secret plan to coerce the employees to call for a second vote and approve the variations. Indeed, that proposition was not even squarely put to either Mr Harper, Mr Mazzarolo or Mr Miller in cross-examination.
Third, the 3 July memorandum that was handed out to the employees alone was unlikely to have exerted sufficient pressure on the employees to call a second vote such as to constitute coercion. More significantly, the terms of the 3 July memorandum do not suggest any intention on the part of De Martin & Gasparini to exert pressure on the employees. It follows that if De Martin & Gasparini did intend to exert pressure on the employees by the threatened redundancies, it must have been intended that the pressure would be exerted by the words of Mr Mazzarolo or Mr Miller or both.
Fourth, I am not satisfied, on balance, that the words spoken by either Mr Mazzarolo or Mr Miller at the 3 July meeting support the inference that they had the intention, or De Martin & Gasparini had the intention, of coercing the employees to hold a second vote and approve the proposed variations. Mr Mazzarolo’s statements linked the employees’ positions with their failure or refusal to vote to approve the variations on 28 June 2017. Nothing he said, however, suggested that the employees could or should call a second vote. Mr Mazzarolo then absented himself from the meeting, effectively on the basis that he had been unable to persuade the employees to approve the variations in the first place. It is unlikely that he saw himself as being in any position to pressure the employees.
As for Mr Miller’s statements at the 3 July meeting, while his statements concerning what was and was not “bullshit” were clearly unhelpful, intemperate and somewhat inflammatory, they do not clearly reveal an intention to coerce the employees to call a second meeting. The only comment that referred or related, directly or indirectly, to the employees being able to hold a second vote to avoid redundancies was responsive to the question asked by Mr Ferguson. That response did not suggest an intention to exert the sort of pressure necessary to amount to coercion under s 54 of the Building Act.
Fifth, Mr Miller’s statements at the 5 July toolbox talks that related, directly or indirectly, to the employees calling a second vote, were also purely responsive to questions. Those responses again did not reveal an intention to exert the sort of pressure necessary to amount to coercion. His responses were, in a sense, accurate and not misleading. It was in fact open to the employees to arrange a second vote. It is also relevant that Mr Miller’s statements were accompanied by fairly emphatic statements from Ms Macri said that there would be no second vote. It is difficult to see why Ms Macri would say that if it was De Martin & Gasparini’s intention to coerce the employees to hold a second vote.
Sixth, the CFMEU’s case that De Martin & Gasparini intended to coerce the employees into holding a second vote was entirely circumstantial and inferential. The inferences were said to flow primarily from some of the things that Mr Mazzarolo and Mr Miller said at the relevant meetings. As noted earlier, in assessing whether the CFMEU has proved, on the balance of probabilities, that Mr Mazzarolo and Mr Miller intended to coerce the employees to have a second vote, it is necessary to have regard to the nature of the cause of action and the gravity of the matters alleged: s 140(2) of the Evidence Act. Section 54 of the Building Act is a civil penalty contravention and the matters alleged against De Martin & Gasparini, Mr Mazzarolo and Mr Miller are serious and grave. Reasonable satisfaction should not be produced by “inexact proofs, indefinite testimony, or indirect inferences”: Briginshaw at 362. In light of the gravity of the allegations, I am not reasonably satisfied that the statements made by Mr Mazzarolo and Mr Miller, and the surrounding facts and circumstances, support the inference of an intention to coerce.
It may well be that Mr Mazzarolo and Mr Miller, and through them De Martin & Gasparini, may have hoped or maybe even expected that by communicating the threat to make them redundant, the employees may have been influenced, persuaded or induced to change their mind about the variations and call a second vote to approve them. Even if that be so, that is insufficient to establish an intent to coerce. Such a hope or even expectation does not amount to an intention to exert such a high degree of compulsion that the employees felt they had no choice.
In light of the finding that the CFMEU has failed to prove that De Martin & Gasparini subjectively intended to exert sufficient pressure to negate choice, it is strictly unnecessary to consider the second element of proving an intention to coerce, being that the conduct involved in exerting the requisite pressure was objectively unlawful, illegitimate or unconscionable. The CFMEU advanced two bases on which this element was satisfied in the circumstances of this case: first, that the conduct engaged in by De Martin & Gasparini was unlawful because it constituted adverse action and contravened s 340 of the Fair Work Act; and second, that if the conduct was lawful, it was nonetheless illegitimate because there was no reasonable or justifiable connection or proportionality between the pressure and the demand that the pressure supported: Australian Building and Construction Commission v Construction, Forestry, Mining and Energy Union [2017] FCA 157 at [149]-[154].
For the reasons already given, the conduct of De Martin & Gasparini, through the words and conduct of Mr Mazzarolo and Mr Miller, contravened s 340 of the Fair Work Act. It was therefore relevantly unlawful. It is unnecessary for the CFMEU to prove that De Martin & Gasparini intended to act unlawfully: Esso Australia at [176]. The objective element of “intention to coerce” would therefore have been satisfied, had the subjective element been satisfied.
It is in those circumstances unnecessary to consider the more contentious issue whether, if the conduct had been lawful, it would nonetheless have been illegitimate or unconscionable. It is sufficient to note in that regard that, while the threat to make the employees redundant was significant, so too was the commercial threat faced by De Martin & Gasparini as a result of the impending onset of the Code and the non-compliant Enterprise Agreement.
In the end result, the CFMEU has failed to prove that in engaging in the action on 3 and 5 July 2017, De Martin & Gasparini intended to coerce the employees to vary the Enterprise Agreement. The CFMEU accordingly has failed to prove that De Martin & Gasparini contravened s 54 of the Building Act.
Issue 11: did De Martin & Gasparini contravene s 54 of the Building Act?
It follows from the finding in relation to issue 10 that De Martin & Gasparini did not contravene s 54 of the Building Act by virtue of the words and conduct of Mr Mazzarolo and Mr Miller on 3 and 5 July 2017.
Issue 12: did Mr Mazzarolo and Mr Miller aid and abet any contravention of s 54 of the Building Act by De Martin & Gasparini?
This issue does not arise. That is because it has been found that De Martin & Gasparini did not contravene s 54 of the Building Act. There was no contravention that Mr Mazzarolo and Mr Miller could be relevantly involved in.
Issue 13: did Mr Mazzarolo and Mr Miller themselves contravene s 54 of the Building Act?
The CFMEU’s case that Mr Mazzarolo and Mr Miller themselves contravened s 54 of the Building Act must fail for essentially the same reasons that its s 54 case against De Martin & Gasparini failed. The evidence does not establish that the actions of either Mr Mazzarolo or Mr Miller were taken with an intention to coerce the employees to vary the Enterprise Agreement.
Issue 14: other accessorial liability of Mr Mazzarolo and Mr Miller.
This issue again does not arise given the earlier findings. Neither Mr Mazzarolo nor Mr Miller has been found to have contravened s 54 of the Building Act. Neither of them, therefore, could relevantly be involved in the other’s contravention of s 54.
SUMMARY OF FINDINGS
De Martin & Gasparini contravened s 340 of the Fair Work Act by the words and conduct of Mr Mazzarolo and Mr Miller on 3 July 2017. The action taken by Mr Mazzarolo and Mr Miller on 3 July 2017 constituted adverse action because it amounted to a threat to dismiss the employees, or action which injured the employees in their employment, or action which altered the position of the employees to their prejudice. De Martin & Gasparini did not discharge the burden cast on it by s 361 of the Fair Work Act to prove that the action taken on 3 July 2017 was not taken because the employees had a workplace right, being the benefit of the Enterprise Agreement (a workplace instrument under the Fair Work Act), or because the employees were able to initiate or participate in, or had exercised, a process under the Fair Work Act, being the process of voting on whether or not to approve a variation to the Enterprise Agreement. I do not accept that the evidence of Mr Harper, Mr Mazzarolo or Mr Miller in relation to the reasons for taking the relevant action was credible, reliable or consistent with the inferences that were otherwise available from the surrounding facts and circumstances.
I am not satisfied, however, that Mr Mazzarolo and Mr Miller aided, abetted, counselled or procured, or were otherwise knowingly concerned or party to De Martin & Gasparini’s contravention of s 340 of the Fair Work Act. The evidence did not go so far as to prove that Mr Mazzarolo and Mr Miller knew or intended that their actions, which were intended to carry into effect a decision made by Mr Harper on behalf of De Martin & Gasparini, were taken because the employees had, or had exercised, the relevant workplace rights.
I am also not satisfied that either De Martin & Gasparini, Mr Mazzarolo or Mr Miller contravened s 54 of the Building Act. The evidence did not go so far as to prove that the action taken by Mr Mazzarolo and Mr Miller, on behalf of De Martin & Gasparini, was intended to coerce the employees to vary the Enterprise Agreement by holding another vote to approve the proposed variations to the Enterprise Agreement.
ORDERS
The parties agreed that should it be found that there was any contravention of either the Fair Work Act or the Building Act, there should be a separate hearing in relation to relief. The CFMEU sought declarations, injunctions and pecuniary penalties. It may be that the parties will be able to agree on an appropriate declaration arising from the finding that De Martin & Gasparini contravened s 340. Injunctive relief is likely to be more contentious, though it may be that subsequent events have rendered injunctive relief unnecessary. The Court will also need to consider submissions in relation to the appropriate pecuniary penalty. I propose at this stage to simply order that the parties provide the Court with short minutes of order within 14 days which include a timetable for the further hearing in relation to relief and any other orders that can be agreed having regard to these findings and reasons.
I certify that the preceding three hundred and eighty-six (386) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wigney. Associate:
Dated: 1 September 2017
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