Construction, Forestry, Mining and Energy Union v Decmil Engineering Pty Ltd (No 2)

Case [2017] FCA 1237

FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Mining and Energy Union v Decmil Engineering Pty Ltd (No 2) [2017] FCA 1237

File number: VID 121 of 2016
Judge: TRACEY J
Date of judgment: 24 October 2017
Catchwords: INDUSTRIAL LAW – first and second respondents admitted contraventions of s 501 of the Fair Work Act 2009 (Cth) – the applicant and those respondents proposed an agreed pecuniary penalty – consideration of appropriate penalty – whether payment should be made to the applicant
Legislation:

Crimes Act 1914 (Cth) s 4AA(1)

Fair Work Act 2009 (Cth) ss 12, 494(3), 497, 498, 501, 502, 512, 539(1), 539(2) item 25 column 1, 539(2) item 25 column 4, 546(1), 546(2)(b), 546(3)(b), 793, Pt 3-4 Div 3, Pt 8

Fair Work (Registered Organisations) Act 2009 (Cth)

Fair Work Regulations 2009 (Cth) reg 3.25 item 2

Occupational Health and Safety Act 2004 (Vic) ss 5, 83, 87, 87(1), 87(1)(a), 87(2)

Cases cited:

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 5

Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113

Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640; [2013] HCA 54

Construction, Forestry, Mining and Energy Union v Australian Building and Construction Commissioner (2016) 247 FCR 339; [2016] FCAFC 184

Construction, Forestry, Mining and Energy Union v Decmil Engineering Pty Ltd [2016] FCA 615Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; [2015] HCA 46

Construction, Forestry, Mining and Energy Union v Safety Glass Pty Ltd [2010] FCA 989

Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2016] FCA 413

Fair Work Ombudsman v Grouped Property Services Pty Ltd (No 2) [2017] FCA 557

Murrihy v Betezy.com.au Pty Ltd (No 2) (2013) 221 FCR 118; [2013] FCA 1146

Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357; [2008] FCAFC 170

Ponzio v B & P Caelli Construction Pty Ltd (2007) 158 FCR 543; [2007] FCAFC 65

Sayed v Construction, Forestry, Mining and Energy Union (2016) 239 FCR 336; [2016] FCAFC 4

Singtel Optus Pty Ltd v Australian Competition and Consumer Commission (2012) 287 ALR 249; [2012] FCAFC 20

Date of hearing: 10 April 2017
Registry: Victoria
Division: Fair Work Division
National Practice Area: Employment & Industrial Relations
Category: Catchwords
Number of paragraphs: 58
Counsel for the Applicant: Ms S Fitzgerald
Solicitor for the Applicant: Construction, Forestry, Mining and Energy Union
Counsel for the First, Second and Fourth Respondents: Mr J Blackburn SC
Solicitor for the First, Second and Fourth Respondents: Lavan
Counsel for the Third Respondent: The Third Respondent did not appear

ORDERS

VID 121 of 2016
BETWEEN:

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

Applicant
AND:

DECMIL AUSTRALIA PTY LTD (ACN 116 776 991)

First Respondent

EASTCOAST DEVELOPMENT ENGINEERING PTY LTD (ACN 093 799 387)
Second Respondent

LLOYD BAM

Third Respondent

MARK REEVES

Fourth Respondent

JUDGE:

TRACEY J

DATE OF…

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AGLC
Construction, Forestry, Mining and Energy Union v Decmil Engineering Pty Ltd (No 2) [2017] FCA 1237
Case
[2017] FCA 1237
Decision Date

CaseChat Overview and Summary

The Construction, Forestry, Mining and Energy Union (CFMEU) brought proceedings against Decmil Engineering Pty Ltd, Lloyd Bam, and Mr Reeves in relation to contraventions of section 501 of the Fair Work Act 2009 (Cth). The CFMEU sought an order that the respondents admitted to the contraventions and that they pay a pecuniary penalty for those contraventions. The respondents admitted the contraventions, and the parties proposed a specific penalty amount. The court had to decide whether to accept the parties' proposed penalty and, if so, whether the payment should be made to the CFMEU.

The court considered that while the parties' proposed penalty was highly influential, it was not determinative. The court would only accept the proposed penalty if it was sufficiently persuaded of the accuracy of the parties' agreement as to facts and consequences, and that the penalty was an appropriate remedy. The court noted the importance of protecting workers' safety on building sites and the potential for breaches of the relevant provisions to fundamentally undermine that safety. The court also considered the conditional rights of entry provided for under the Fair Work Act to minimise inconvenience and disruption on work sites.

The court found that the conditions for entry were satisfied in this case and that the permit holder, Mr Doyle, was entitled to unimpeded access to the site. The court further found that the contraventions were egregious given that inspectors had advised that Mr Doyle had a lawful right of entry but was still refused access. The court accepted the parties' proposed penalty of $16,500 and ordered that it be paid to the CFMEU.

The court ordered that Lloyd Bam, Decmil Engineering Pty Ltd, and Mr Reeves admit the contraventions of section 501 of the Fair Work Act 2009 (Cth) and pay a pecuniary penalty of $16,500 to the CFMEU. The court also ordered that the proceeding against Mr Reeves be wholly dismissed.

Orders

Orders of the court

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Background

Background to the litigation

The CFMEU has agreed to an order that the proceeding against Mr Reeves “be wholly dismissed”.THE BACKGROUND FACTS The tanks were being constructed using what was described as a “top down” method. Prefabricated parts of each tank were delivered to the site and were raised into position by a hydraulic jacking system. As new parts were added to the tank welding was required. This welding was undertaken from outside and within the tank. For the most part workers who were undertaking the welding had access to the internal part of a tank through a three metre gap in the side of the tank. Once the gap was closed, however, workers could only access the inside of the tank by crawling under a ring of vertical plates (called “strakes”) which sat on a plate set 400 to 500 millimetres above the ground. Mr Fergal Doyle was employed by the CFMEU and was an official of that organisation within the meaning of s 12 of the FW Act. He was also an “authorised representative” of the CFMEU within the meaning of s 5 of the Occupational Health and Safety Act 2004 (Vic) (“the OHS Act”). Mr Doyle held entry permits under s 512 of the FW Act and under s 83 of the OHS Act. These permits entitled him to enter premises such as the Hastings site subject to the satisfaction of certain preconditions. One of those conditions was that he held a reasonable suspicion that a contravention of the OHS Act had occurred or was occurring at the premises: see s 87(1) of the OHS Act. On 21 January 2016 Mr Doyle formed such a suspicion; it was that there had been a failure to provide a safe system of work in relation to the erection of one of the tanks, in part because of concerns about the safe workload of the jacking system. Mr Doyle attended at the site on that day. He gave Mr Reeves a notice of suspected contravention of the OHS Act and produced his entry permits. Mr Reeves referred the matter to Mr Bam. Three inspectors from WorkSafe Victoria (“WorkSafe”) attended the site and one of them advised Mr Bam that he (the inspector) considered that Mr Doyle had a lawful right of entry to the premises pursuant to s 87 of the OHS Act. Despite this Mr Bam directed Mr Reeves to advise Mr Doyle that he would not be admitted to the site. Mr Reeves conveyed Mr Bam’s decision to Mr Doyle. On 2 February 2016 Mr Doyle again attended at the site. He had formed a reasonable suspicion that a contravention of the OHS Act had occurred and was occurring at the premises. The suspicion related to concerns about the safe workload of the jacking system and to a further concern relating to the manner in which workers could enter the tank once it had been closed. As he had done on 21 January 2016, Mr Doyle approached Mr Reeves and provided him with a notice of suspected contravention and a copy of his entry permits. Again Mr Reeves referred the matter to Mr Bam. Again WorkSafe inspectors were called to the site and one of them told Mr Bam that she considered that Mr Doyle had a lawful right of entry to the premises. Despite this Mr Bam determined that Mr Doyle would be refused entry to the site.

Evidence

Evidence Before The Court

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Decision

Reasons for decision

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Ratio Decidendi

Legal Principle Established

Where the parties have proposed a particular penalty or a range within which the penalty is to be fixed that proposal will be highly influential but not determinative. As the plurality said in Commonwealth v Director, Fair Work Building Industry Inspectorate (at 491 [58]):Subject to the court being sufficiently persuaded of the accuracy of the parties’ agreement as to facts and consequences, and that the penalty which the parties proposed is an appropriate remedy in the circumstances thus revealed, it is consistent with principle and … highly desirable in practice for the court to accept the parties’ proposal and therefore impose the proposed penalty.See also at 511 [68] (Gageler J) and at 513 [79] (Keane J).CONSIDERATION As White J pointed out in the Flinders University case, the provisions of Part 3-4 of the FW Act seek to balance the competing interests of various parties on construction and other work sites. Under the scheme, rights of entry are made conditional in order that any such right is exercised in accordance with the provisions of the FW Act in a manner that minimises inconvenience to the occupier of a site and the disruption of productive work: cf Construction, Forestry, Mining and Energy Union v Safety Glass Pty Ltd [2010] FCA 989 at [18] (Tracey J). Once, however, the conditions are satisfied, as they were in the present case, a permit holder such as Mr Doyle is entitled to unimpeded access to the site to ascertain whether the health and safety of members of his union are or have been compromised. As counsel for the CFMEU rightly submitted, the protection of workers’ safety on building sites is a highly important function and breaches of provisions such as s 501 have the potential fundamentally to undermine workers’ safety: cf Ponzio v B & P Caelli Construction Pty Ltd (2007) 158 FCR 543 at 545; [2007] FCAFC 65 at [1] (Marshall J). The CFMEU submitted that the contraventions were all the more egregious because inspectors, appointed under the OHS Act, had attended the site on both days and advised Mr Bam that they considered that they had each “formed the reasonable belief that [Mr Doyle had] a lawful right of entry into this workplace under section 87 of the OHS Act …”. Despite being so advised Mr Bam had refused entry to Mr Doyle. On each occasion an inspector prepared what was described as an “entry report”. The reports were prepared off-site and after Mr Doyle had been refused entry. The relevant parts of the two reports were in almost identical terms. The report made in relation to the events on 21 January 2016 read:I discussed the issues in dispute with Lloyd Bam and the above said management and elected health and safety representatives.I have verified from my discussions, enquiries and observations that Fergul [sic] Doyle is an ARREO [Authorised Representative of a Registered Employee Organisation] as a representative of CFMEU being a registered employee organisation and I have sighted a copy of:Ÿa valid entry permit F11786236 issued under the Occupational Health and Safety Act 2004; andŸa valid federal entry permit RE2015/773 27 August 2015 under the Commonwealth Fair Work Act 2009. I am satisfied that the ARREO satisfies or can satisfy the requirements under which the federal entry permit is issued.I observed that the ARREO has completed an approved Notice of Suspected Contravention form and confirmed that the ARREO reasonably suspects that a contravention of the Occupational Health and Safety Act 2004 OR the Occupational Health and Safety Regulations has occurred or is occurring at this workplace and that the suspected contravention relates to or affects work that is being carried out by:ŸPersons eligible to be members of the CFMEU, as a registered employee organisation but whose employment is not subject to a certified agreement by which the registered employee organisation is bound.For these reasons I have formed the reasonable belief that the ARREO has a lawful right of entry into this workplace under section 87 of the OHS Act 2004.I informed Lloyd Bam and Fergul [sic] Doyle of my belief, and advised that a refusal to allow the ARREO to enter this workplace would be contravention of section 93(a) of the OHS Act.