Construction, Forestry, Mining and Energy Union v WA Universal Crane Hire Pty Ltd
[2016] FCCA 1939
•28 July 2016
FEDERAL CIRCUIT COURT OF AUSTRALIA
| CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION & ANOR v WA UNIVERSAL CRANE HIRE PTY LTD & ORS | [2016] FCCA 1939 |
| Catchwords: INDUSTRIAL LAW – Contravention of penalty provision of Fair Work Act 2009 (Cth) – contravention admitted – penalty agreed. |
| Legislation: Crimes Act 1914 (Cth), s.4AA Fair Work Act 2009 (Cth), ss.12, 13, 337, 338, 340, 341, 342, 348, 360, 361, 539, 540, 545, 546, 566, 570 Fair Work (Registered Organisations)Act 2009 (Cth) |
| Cases cited: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560; (2008) 246 ALR 35 Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 90 ALJR 113; (2015) 255 IR 87; (2015) 326 ALR 476 |
| First Applicant: | CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
| Second Applicant | MICHAEL BYRNE |
| First Respondent: | WA UNIVERSAL CRANE HIRE PTY LTD |
| Second Respondent: | AARON HOLDING |
| Third Respondent: | DAVID HOLDING |
| Fourth Respondent: | CHRIS HOLDING |
| Fifth Respondent: | CRAIG GUNNIS |
| File Number: | PEG 248 of 2014 |
| Judgment of: | Judge Antoni Lucev |
| Hearing date: | 22 July 2016 |
| Date of Last Submission: | 22 July 2016 |
| Delivered at: | Perth |
| Delivered on: | 28 July 2016 |
REPRESENTATION
| Counsel for the Applicants: | Mr J Nicholas |
| Solicitors for the Applicants: | Nicholas Legal |
| Counsel for the Respondents: | Mr T French |
| Solicitors for the Respondents: | Clyde & Co Australia |
DECLARATION AND ORDERS
THE COURT DECLARES
Under s.545(1) of the Fair Work Act 2009 (Cth) (“FW Act”) as follows:
WA Universal Crane Hire Pty Ltd contravened s.340(1)(a)(ii) of the FW Act by terminating the employment of Michael Byrne on 6 June 2014 for reasons including that he made a complaint in relation to his employment about the payment of a crane allowance.
AND THE COURT ORDERS:
Under s.546(1) of the FW Act that WA Universal Crane Hire Pty Ltd pay a penalty of $25,500 for its contravention of s.340(1)(a)(ii) of the FW Act.
Under s546(3)(b) of the FW Act that the penalty be paid to the Construction, Forestry, Mining and Energy Union.
The proceedings otherwise be dismissed.
Each party bear its own costs of the proceedings.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 248 of 2014
| CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
Applicant
And
| WA UNIVERSAL CRANE HIRE PTY LTD |
First Respondent
| AARON HOLDING |
Second Respondent
| DAVID HOLDING |
Third Respondent
| CHRIS HOLDING |
Fourth Respondent
| CRAIG GUNNIS |
Fifth Respondent
REASONS FOR JUDGMENT
Introduction
Before the Court is an application for declarations and penalties in relation to a contravention of the Fair Work Act 2009 (Cth) (“FW Act”), where the parties have agreed upon the penalty to be imposed.
Statement of agreed facts and admissions
The parties have filed a Statement of Agreed Facts and Admissions (“SAFA”) for the purposes of s.191 of the Evidence Act 1995 (Cth) in these proceedings, which is relevantly in the following terms:
2. The First Applicant (CFMEU) is, and was at all material times:
(a)an organisation of employees registered under the Fair Work (Registered Organisations) Act 2009 (Cth);and
(b)an “industrial association” as defined in section 12 of the Fair Work Act 2009 (Cth) (FW Act); and
(c)entitled to represent Byrne’s industrial interests.
3. The Second Applicant (Byrne):
(a)was employed by the First Respondent as a Mobile Crane Operator on or about 1 July 2013 to 6 June 2014 (Employment);
(b)by reason of the matters in paragraph 3(a) was at all material times a national system employee within the meaning of section 13 of the FW Act; and
(c)was at all material times and is a member of the CFMEU.
4. The First Respondent (Universal Crane Hire), was at all material times:
(a)a corporation engaged in trade and carrying on a business in the State of Western Australia;
(b)by reason of the matters identified in subparagraph 4(a), a constitutional corporation for the purposes of the FW Act;
(c)by reason of the matters identified in subparagraph 4(a) and (b), a constitutionally covered entity for the purposes of s.338 of the FW Act.
5. The Second Respondent (Aaron Holding), was at all material times:
(a) the sole director;
(b) an employee; and
(c) acting within the scope of his actual or apparent authority as Managing Director and an employee;
of Universal Crane Hire.
6. The Third Respondent (David Holding), was at all material times:
(a) a shareholder of Universal Crane Hire;
(b)acting with the express or implied consent or agreement of Universal Crane Hire.
7. The Fourth Respondent (Chris Holding), was at all material times:
(a) a shareholder of Universal Crane Hire;
(b)acting with the express or implied consent or agreement of Universal Crane Hire.
8. The Fifth Respondent (Craig Gunnis), was at all material times:
(a) a shareholder of Universal Crane Hire;
(b)acting with the express or implied consent or agreement of Universal Crane Hire.
Negotiations for the Universal Crane Hire Agreement
9. At all material times the CFMEU was the bargaining representative under s.176 of the FW Act for Byrne and other crane operator employees of Universal Crane Hire (Employees) for the purposes of the negotiation of a proposed enterprise agreement between those employees and Universal Crane Hire (Negotiations).
10. From on or around 10 January 2014, Byrne acted as a representative of the CFMEU.
11. The CFMEU represented to Universal Crane Hire during the Negotiations that employees of Universal Crane Hire should be entitled to an allowance that operated on an “all purpose” basis (CFMEU Representation).
12. Universal Crane Hire's interpretation of the allowance was that it would not be paid on an all-purpose basis.
Operation of the Universal Crane Hire Agreement
13. The WA Universal Crane Hire Pty Ltd and CFMEU (WA) Enterprise Agreement 2014 -2017 (Mobile Crane Hire)(Universal Crane Hire Enterprise Agreement):
(a) was:
(i) made for the purposes of s.182 of the FW Act on 16 May 2014;
(ii) approved as an enterprise agreement under Division 4 of Part 2-4 of the FW Act by the Fair Work Commission on 26 May 2014;
and, therefore:
(i) a workplace instrument within the definition of that term in s.12 of the FW Act.
(b)from 2 June 2014:
(i) operated, under s.54 of the FW Act;
and
(ii) was expressed to cover:
A. Byrne;
B. the Employees; and
C. Universal Crane Hire;
and
(iii) covered the CFMEU.
14. Byrne:
(a)was classified for the purposes of Appendix A of the Universal Crane Hire Enterprise Agreement as a Mobile Crane Operator 100t to 180t;
(b)was paid at the ordinary hourly rate of $43.71 per hour by reference to cl. 53 – No Reduction of the Universal Crane Hire Enterprise Agreement.
The All Purpose Crane Allowance Dispute
15. Prior to 28 August 2014, Clause 23 – Crane Allowance of the Universal Crane Hire Enterprise Agreement provided an entitlement for employees to receive an “all purpose” Crane Allowance of $5.00 for each hour worked (Crane Allowance).
16. Clause 2 – Definitions of the Universal Crane Hire Enterprise Agreement defined the meaning of “all purpose” for the purposes of clause 23 the Universal Crane Hire Enterprise Agreement.
17. Prior to 28 August 2014, the effect of clause 23 and clause 2 of the Universal Crane Hire Enterprise Agreement was to provide an entitlement for employees to receive overtime penalties on the Crane Allowance.
18. On or around 28 May 2014 Universal Crane Hire purported to pay Byrne and the Employees by reference to the Universal Crane Hire Enterprise Agreement.
19. On or around 29 May 2014 Byrne complained to Universal Crane Hire to the effect that employees of Universal Crane Hire were entitled under the Universal Crane Hire Enterprise Agreement to be paid overtime penalties on the Crane Allowance and that Universal Crane Hire were failing to pay such penalties (All Purpose Complaint).
20. On or around 30 May 2014:
(a)Byrne repeated the All Purpose Complaint to Universal Crane Hire.
(b)Aaron Holding sent a text message to Byrne and the Employees as follows:
“All, It has come to my attention some of you are unhappy with our interpretation of the crane allowance and how it should be paid. We will not be paying this at penalty rates. I'm aware you are planning on getting the union involved. However please note both companies are currently experiencing negative cashflow. We believe the $5 allowance is more than fair at a flat rate given the current climate. If this issue is pushed we have no option but to close down the current WAUCH.”
21. On or around 5 June 2014 Aaron Holding:
(a)explained to the CFMEU the reasons Universal Crane Hire had adopted its interpretation of the Crane Allowance; and
(b)indicated to the CFMEU that Universal Crane Hire would, nonetheless pay overtime penalties on the Crane Allowance until there was further clarification on the issue.
The Termination
22. On or around 6 June 2014:
(a)Byrne attended a meeting with Universal Crane Hire (Toolbox Meeting);
(b)the Toolbox Meeting was also attended by:
(i) Aaron Holding;
(ii) David Holding;
(iii) Chris Holding;
(iv) Craig Gunnis; and
(v) the Employees.
(c)at the commencement of the Toolbox meeting, David Holding on behalf of Universal Crane Hire, terminated Byrne (Termination) and 2 other Employees.
Adverse Action
23. The Termination was adverse action for the purpose of Item (1)(a) in the table after s. 342(1) of the FW Act.
Workplace Rights
24. Byrne was able to make a complaint or enquiry in relation to his employment to Universal Crane Hire in relation to payment of the Crane Allowance (Complaint or Enquiry Right).
25. By reason of the making the All Purpose Complaint on 29 and 30 May 2014, Byrne exercised the Complaint or Enquiry Right.
26. The Complaint or Enquiry Right was a workplace right under s.341(1)(c) of the FW Act.
Universal Crane Hire’s Contravention
27. The Applicants have alleged that Universal Crane Hire terminated Byrne for reasons including Byrne’s All Purpose Complaint on 29 and 30 May 2014.
28. Terminating Byrne for that reason would contravene s.340(1)(a)(ii) of the FW Act.
29. By operation of s.361 of the FW Act, it is presumed Universal Crane Hire terminated Byrne for that reason, unless Universal Crane Hire proves otherwise.
30. Universal Crane Hire does not seek to prove otherwise.
31. In the circumstances, it is appropriate for the Court to find that Universal Crane Hire contravened s.340(1)(a)(ii) of the FW Act.
Proposed agreed declaration and penalties
The parties have agreed that it is appropriate for the Court to:
a)make a declaration that:
WA Universal Crane Hire Pty Ltd contravened s.340(1)(a)(ii) of the FW Act by terminating the employment of Michael Byrne on 6 June 2014 for reasons including that he made a complaint in relation to his employment about the payment of a crane allowance;
b)impose a penalty of $25,500 against the first respondent under s.546(1) of the FW Act for its contravention of s.340(l)(a)(ii) of the FW Act;
c)order under s.546(3)(b) of the FW Act that the penalty be paid to the first applicant;
d)order that the proceedings otherwise be dismissed; and
e)make no order as to costs.
On the basis of the above, the applicants have agreed not to pursue any of the other alleged contraventions in the application.
Jurisdiction
The Federal Circuit Court has jurisdiction in relation to any civil matter arising under the FW Act by operation of s.566 of the FW Act.
The application in this matter is made under s.539 of the FW Act.
Section 340 of the FW Act is a civil remedy provisions referred to at Item 11 of column 1 in the table in s.539 of the FW Act.
Section 340 is in Part 3-1 of the FW Act. Section 337 of the FW Act provides Part 3-1 only applies to the extent provided by Division 2 of Part 3-1. Section 338(1)(a) of the FW Act, within Division 2, provides that Part 3-1 applies to action taken by a constitutionally-covered entity. The first respondent was at all material times a constitutional corporation and therefore a constitutionally-covered entity within the meaning of s.338(l)(a) of FW Act.
The first applicant:
a)is an industrial association for the purposes of that term in column 2 in the table in s.539 of the FW Act; and
b)entitled to represent the second applicant's industrial interests for the purposes of s.540(2)(b) of the FW Act,
and therefore entitled to apply for orders under s.539(2) of the FW Act.
The second applicant was:
a)an employee of the first respondent affected by the admitted contravention for the purposes of s.540(1) of the FW Act; and
b)a national system employee within the meaning of s.13 of the FW Act,
and therefore entitled to apply for orders under s.539(2) of the FW Act.
If the Court is satisfied that a person has contravened a civil remedy provision:
a)s.545(1) of the FW Act provides that it may make any order it considers appropriate; and
b)s.546(1) of the FW Act provides that it may, on application, order a person to pay a pecuniary penalty that the Court considers appropriate; and
c)s.546(3)(b) of the FW Act provides that it may order that the pecuniary penalty be paid to a particular organisation.
Liability
Section 340(1) of the FW Act is a civil remedy provision which prohibits adverse action taken against a person in relation to workplace rights:
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.
Section 341(1) of the FW Act defines “workplace right” for the purposes of s.340 of the FW Act:
Meaning of workplace right
(1) A person has a workplace right if the person:
(a)is entitled to the benefit of, or has a role or responsibility under, a workplace law, workplace instrument or order made by an industrial body; or
(b)is able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument; or
(c)is able to make a complaint or inquiry:
(i)to a person or body having the capacity under a workplace law to seek compliance with that law or a workplace instrument; or
(ii)if the person is an employee - in relation to his or her employment.
Adverse Action
Item l(a) in the table after s.342(1) of the FW Act provides that adverse action is taken by an employer against an employee if the employer dismisses the employee.
Reverse Onus and Multiple Reasons
Section 361(1) of the FW Act provides:
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 .
In Board of Bendigo Regional Institute of Technical and Further Education v Barclay & Anor [2012] HCA 32; (2012) 248 CLR 500; (2012) 86 ALJR 1044; (2012) 220 IR 445; (2012) 290 ALR 647 (“Barclay”) French CJ and Crennan J held at [44]-[45]:
[44] ... The imposition of the statutory presumption in s 361, and the correlative onus on employers, naturally and ordinarily mean that direct evidence of a decision-maker as to state of mind, intent or purpose will bear upon the question of why adverse action was taken, although the central question remains “why was the adverse action taken?”
[45] This question is one of fact, which must be answered in the light of all the facts established in the proceeding. Generally, it will be extremely difficult to displace the statutory presumption in s 361 if no direct testimony is given by the decision-maker acting on behalf of the employer. Direct evidence of the reason why a decision-maker took adverse action, which may include positive evidence that the action was not taken for a prohibited reason, may be unreliable because of other contradictory evidence given by the decision-maker or because other objective facts are proven which contradict the decision-maker's evidence. However, direct testimony from the decision-maker which is accepted as reliable is capable of discharging the burden upon an employer ...
Section 360 of the FW Act provides that “a person takes action for a particular reason if the reasons for the action include that reason”.
As the Federal Court observed in Rojas v Esselte Australia Pty Ltd (No. 2) [2008] FCA 1585; (2008) 177 IR 306 at [46]-[50] per Moore J (“Rojas (No. 2)”) in order for a reverse onus such as that in s.361 of the FW Act to operate, the Court must be satisfied:
a)that adverse action was taken (in this case, the termination of the second applicant); and
b)that the second applicant exercised the relevant right (in this case, his Complaint or Enquiry right).
Admitted contravention
The first respondent admits:
a)that the second applicant was able to make a complaint or enquiry in relation to his employment (Complaint or Enquiry Right): SAFA at [23], and exercised it by making the All Purpose Complaint on 29 and 30 May 2014: SAFA at [24];
b)it terminated the second applicant on 6 June 2014: SAFA at [21(c)];
c)terminating the second applicant for making the All Purpose Complaint would contravene s.340(l)(a)(ii) of the FW Act: SAFA at [27]; and
d)by operation of s.361 of the FW Act, it is presumed the first respondent terminated the second applicant for that reason, unless the first respondent proves otherwise: SAFA at [28].
The first respondent does not seek to rebut the presumption that it terminated the second applicant for making the All Purpose Complaint: SAFA at [29].
The parties agree that in the circumstances, it is appropriate for the Court to find that the first respondent contravened s.340(l)(a)(ii) of the FW Act.
Declarations
The making of a declaration (in this case under s.545(1) of the FW Act) and its terms are a matter for the Court’s discretion and when made should reflect the final outcome of the case with certainty and precision: Stuart v Construction, Forestry, Mining and Energy Union [2010] FCAFC 65; (2010) 185 FCR 308; (2010) 197 IR 202; (2010) 269 ALR 49 at [89] per Besanko and Gordon JJ.
The declarations sought are agreed by the parties and:
a)reflect the final outcome of the proceedings;
b)provide certainty and precision; and
c)in relation to the admitted contravention, have utility in that they record the conduct by the first respondent that constitutes the contravention of the FW Act.
Maximum Penalties
Under item 11 of the table in s.539(2) of the FW Act, the maximum penalty for a contravention of s.348 is 60 penalty units. Under s.546(2)(b) of the FW Act the maximum penalty for a corporation is 5 times the maximum number of penalty units referred to in the table in s.539(2) of the FW Act. Section 4AA of the Crimes Act 1914 (Cth) determines the rate of a penalty unit, by reference to the definition of that term in s.12 of the FW Act.
The applicable penalty is fixed by reference to the date of the contravening conduct: Murrihy v Betezy.com.au Pty Ltd (No. 2) [2013] FCA 1146; (2013) 221 FCR 118 at [6]-[28] per Jessup J. At the time of the admitted contravention, 1 penalty unit was $170.
The maximum penalty for the admitted contravention by the first respondent at the relevant time is therefore $51,000.
Agreed penalties
The parties agree that it is appropriate to impose a penalty of $25,500 against the first respondent.
General principles relevant to determining penalty where agreed penalty sought
In dealing with proposed agreed penalties the courts have developed a number of principles for guidance. They include:
a)while the court bears ultimate responsibility for penalty, it is not bound by the parties’ agreement, and must consider for itself what constitutes an appropriate penalty;
b)determining penalty quantum is not an exact science, and within a permissible range a particular figure is not necessarily more appropriate than another figure;
c)promoting settlement of litigation (particularly lengthy litigation) is in the public interest, and where the parties agree on facts and penalty , they may present a statement of agreed facts, including a view as to the effect of those facts, and submissions on penalty ;
d)the view of the regulatory body is relevant, particularly where the view concerns matters within the regulator’s expertise, but not determinative of penalty;
e)in determining appropriate penalty the Court will examine all the circumstances, including an agreed statement of facts, and, if appropriate, may act on that statement; and
f)a jointly proposed penalty will not be rejected simply because the Court might have chosen a different figure: it is sufficient if the jointly proposed penalty is "within the permissible range" or "broadly speaking" within that range.
See Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72; [2004] ATPR 41-993 at [53], [56] and [79] per Branson, Sackville and Gyles JJ; approved in Commonwealth v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 90 ALJR 113; (2015) 255 IR 87; (2015) 326 ALR 476 (“FWBII”); referred to in Roughton v Pinjarra Crane and Access Hire Pty Ltd [2015] FCCA 481 at [7] per Judge Lucev (“Roughton”):
Although courts exercising industrial jurisdiction have identified a range of factors which are commonly relevant to the circumstances of a particular case
when assessing penalty: Kelly v Fitzpatrick [2007] FCA 1080 at [30] per Tracey J, referred to in Roughton at [8] per Lucev, it would be an error to treat such lists as a rigid catalogue: the task is to fix a penalty by reference to the particular circumstances in which the contravention occurred: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560; (2008) 246 ALR 35 at [91] per Buchanan J.,
The High Court has confirmed that:
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 propose is an appropriate remedy in the circumstances thus revealed, it is consistent with principle and, for the reasons identified in Allied Mills, highly desirable in practice for the court to accept the parties' proposal and therefore impose the proposed penalty.
See FWBII at [58] per French CJ, Kiefel, Bell, Nettle and Gordon JJ.
Nature and extent of the conduct and circumstances in which hit occurred
The first respondent's contravening conduct should be characterised as serious. Its termination of the second applicant occurred in the following aggravating circumstances:
a)it was carried out publicly, in the sense that it occurred in front of the other crane operator employees and in the presence of and consent by the first respondent's Managing Director and its three shareholders;
b)it occurred in the context of a dispute over the correct interpretation of the entitlement of employees to be paid overtime on the "all purpose" Crane Allowance under the Universal Crane Hire Enterprise Agreement; and
c)the second applicant was acting on his own behalf and on behalf of the other crane operator employees to secure their legal entitlements under the Universal Crane Hire Enterprise Agreement.
The following facts from the SAFA provide context to the contravention :
a)the first respondent is a corporation engaged in business in Western Australia as a crane hire company: SAFA at [4];
b)the first respondent was engaged in negotiations with the first applicant for the purposes of entering into a proposed enterprise agreement with its crane operator employees: SAFA at [9];
c)there was a dispute in respect to the interpretation of one of the entitlements in the relevant enterprise agreement, being the operation of the All Purpose Crane Allowance (“Allowance”): SAFA at [12], [20] and [21];
d)the second respondent's text message to the employees of the first respondent on 30 May 2014 indicated the reasons for the first respondent's interpretation of the Allowance and the potential consequences for the business if the Allowance was to apply to overtime hours:
However please note both companies are currently experiencing negative cash flow. We believe the $5 allowance is more than fair at a flat rate given the current climate. If this issue is pushed we have no option but to close down the current WAUCH.
SAFA at [20(b)];
e)on 5 June 2014, despite the dispute, the second respondent indicated to the first applicant that the first respondent would “nonetheless pay overtime penalties on the Crane Allowance until there was further clarification on the issue”: SAFA at [21]; and
f)on 6 June 2014, a meeting was held which was attended by the respondents and the employees of the first respondent, including the second applicant, at which meeting the second applicant's employment was terminated along with two other employees: SAFA at [22].
Effect of the contravention
The termination resulted in the second applicant losing his employment.
Prior relevant conduct
There is no record before the Court of any prior relevant contraventions of the FW Act, or any cognate legislation, by the first respondent.
Whether or not the contraventions were deliberate
The circumstances in which the termination of the second applicant was effected suggest that the conduct by at least the first and third respondent to effect that termination was deliberate.
Involvement of senior management
The termination occurred in the presence of the first respondent’s managing director and its three shareholders, and there is no evidence of any dissent by any of them in relation to the termination of the second applicant by the first respondent.
Capacity to pay
There is no dispute that the first respondent has agreed the penalties and has the capacity to pay them.
Contrition, corrective action and cooperation
The first respondent deserves credit for having conceded liability and agreeing facts and penalty without the need for a hearing on liability. The SAFA is evidence of some contrition and it has assisted in the administration of justice and saved the time and expense of a trial on liability. At the same time, it should be noted the first applicant's concession came after initially denying liability and after significant pre-trial steps had been taken, including the filing of affidavits and submissions and just prior to the hearing commencing.
The first respondent has cooperated with the applicants by agreeing to accept liability and an agreed penalty and by providing the Statement of Agreed Facts and Admissions.
The need for specific and general deterrence
The penalty must reflect the need for specific and general deterrence. In Ponzio v B & P Caelli Constructions Pty Ltd[2007] FCAFC 65; (2007) 158 FCR 543; (2007) 162 IR 444 at [93] per Marshall J the Federal Court observed that:
The penalty must recognise the need for deterrence, both personal and general. In regard to personal deterrence, an assessment must be made of the risk of re-offending. In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend: Yardley v Betts (1979) 22 SASR 108. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty: R v Thompson (1975) 11 SASR 217. In some cases, although hardly in this type of contravention, rehabilitation is an important factor.
The penalties agreed upon between the parties reflect the need for specific and general deterrence.
The Court considers that the amount of the agreed penalty demonstrates an appropriate assessment of the seriousness of the contravention, which is significant enough to act as a deterrent to others and specifically to the first respondent.
Permissible range and totality principle
The applicants submit that the contravention may adequately be described as falling at the middle to upper level of seriousness. The agreed penalty, which is 50% of the maximum, is within the permissible range and is not excessive or crushing.
The first respondent submits that:
a)it is not appropriate to describe the contravention as falling at the upper level of seriousness; and
b)that it is more appropriate to describe the contravention as falling at the middle level of seriousness; and
c)the agreed penalty, which represents 50% of the maximum penalty, is within the permissible range and is not excessive or crushing.
There can be no doubt that the termination of an individual employee’s employment is a serious matter for that employee: indeed, it might be the most serious adverse event to afflict an individual employee in the course of their working life. In this case, however, the termination occurred in a particularly limited context, albeit one involving, and arising from, a dispute concerning the payment of an entitlement to the Allowance. But for all of the seriousness of the event of termination for an individual employee (and in this case there were two other employees who were terminated although they are not the subject of the present application) this is not a case concerning a significant ongoing contravention, such as the prolonged non or underpayment of wages, overtime and other allowances, in respect of vulnerable employees, such as those on work-related visas where their entitlement to stay in Australia is dependent upon their employment, or those in poorly paid but necessary (for the economic wellbeing of the employee) employment, or those who are not supported, as the second applicant was here, by a union of which the employee is a member. Nor were there any characteristics of vulnerability such as a limited capacity to speak English or a limited and unsophisticated knowledge of entitlements under Australian workplace law. Nor does it appear that there was any failure to keep or produce employment records in an endeavour to avoid possible detection of any non-payment or underpayment of entitlements. Matters such as those to which the Court has just adverted are more likely to result in a characterisation of the matter as being one in the upper level of seriousness: see, for example, Fair Work Ombudsman v Taj Palace Tandoori Indian Restaurant Pty Ltd [2012] FMCA 258; Fair Work Ombudsman v Orwill Pty Ltd [2011] FMCA 730; Fair Work Ombudsman v ACN 146 435 118 Pty Ltd & Anor (No. 2) [2013] FCCA 1270.
In all of the above circumstances, the Court is of the view that the contravention falls at the middle level of seriousness, and not at the upper level of seriousness.
Payment of the penalties to the CFMEU
Section 546(3) of the FW Act provides that it may order that a pecuniary penalty be paid to the Commonwealth, a particular organisation or a particular person.
The first applicant is registered as an organisation under the Fair Work (Registered Organisations)Act 2009 (Cth) and therefore and organisation for the purposes of s.546(3) of the FW Act by reference to the definition of that term in s.12 of the FW Act.
The agreement by the parties that the penalties be paid to the first applicant reflects the fact that the first applicant is an applicant in its own right and otherwise facilitated the application on the Second applicant's behalf. It is appropriate in those circumstances to order that the penalties be paid to the first applicant: Rojas (No. 2) at [68] per Moore J; Liquor, Hospitality and Miscellaneous Union & Anor v Cuddles Management Pty Ltd (No. 2) [2009] FMCA 746; (2009) 188 IR 435 at [37] per Lucev FM.
Costs
Section 570 of the FW Act limits the Court’s power to award costs in relation to proceedings under the FW Act. The parties agree that in the circumstances they should each bare their own costs. An award of costs under s.570 of the FW Act is very much the exception rather than the rule, and is not a discretion to be exercised with too much haste: Construction, Forestry, Mining and Energy Union v Clarke [2008] FCAFC 143; (2008) 170 FCR 574; (2008) 176 IR 245 at [29] per Tamberlin, Gyles and Gilmour JJ. In those circumstances, the Court considers the parties’ agreement that each should bear their own costs to be an appropriate disposition of the matter of costs.
Declarations and orders
Having regard to all of the above matters and circumstances, including the terms of the SAFA, the Court is satisfied that the agreed penalty is an appropriate penalty, which sees the settlement of this litigation, a settlement which is in the public interest. The Court therefore proposes to make a declaration and orders in the terms sought by the parties, and reflected in the Minute of Proposed Order tendered at hearing.
I certify that the preceding fifty-one (51) paragraphs are a true copy of the reasons for judgment of Judge Antoni Lucev
Date: 28 July 2016
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