Crosthwaite v National Jet Systems Pty Ltd (No.5)

[2011] FMCA 136

FEDERAL MAGISTRATES COURT OF AUSTRALIA

CROSTHWAITE v NATIONAL JET SYSTEMS PTY LTD (NO.5) [2011] FMCA 136

INDUSTRIAL LAW – Civil penalty proceedings – underpayment of salary –course of conduct – whether single contravention or multiple contraventions – penalty – factors – quantum – whether declaration of contravention in relation to underpayment of salary necessary.

COSTS – Adjourned hearing – failure to particularise - whether unreasonable act or omission.

Fair Work Act 2009 (Cth), ss.45, 50
Judiciary Act 1903 (Cth), ss.55ZF, 55ZG
Workplace Relations Act 1996 (Cth), ss.170BM, 718, 719, 400(5), 824(2)

Alcantara & Anor v Buildpower Pty Ltd (No. 2) [2010] FMCA 763
Attorney-General v Tishy (1982) 30 SASR 84
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2011] FCA 810
Australian Competition and Consumer Commission v Dataline.Net.Au Pty Ltd (2006) 236 ALR 665; [2006] FCA 1427
Australian Competition and Consumer Commission vYellow Page Marketing BV & Anor (No. 2) [2011] FCA 352
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; [2008] FCAFC 8
Brobbel v Darrell Lea Chocolate Shops Pty Ltd [2008] FMCA 714
CEPU v QR Ltd (2010) 198 IR 382; [2010] FCA 591
CFMEUvAustral Bricks (Qld) Pty Ltd (2009) 178 IR 470; [2009] FMCA 143
Commonwealth Bank of Australia & Anor v Finance Sector Union of Australia (2007) 157 FCR 329; [2007] FCAFC 18
Construction, Forestry, Mining and Energy Union & Ors v Clarke (2008) 170 FCR 574 at 582; [2008] FCAFC 143
Crosthwaite v National Jet Systems Pty Ltd (No.2) [2007] FMCA 1773
Crosthwaite v National Jet Systems Pty Ltd (No.4) (2010) 205 IR 176; [2010] FMCA 965
Dowling v Fairfax Media Publications Pty Ltd (No.2) [2010] FCAFC 28
Fair Work Ombudsman v Industrial Roadpavers (WA) Pty Ltd (2010) 194 IR 436; [2010] FMCA 204
Fair Work Ombudsman v Roselands Fruit Market & Anor (2010) 200 IR 199; [2010] FMCA 599
Fair Work Ombudsman v The Palcon Group Pty Ltd (2009) 190 IR 94; [2009] FMCA 974
Finance Sector Union of Australia v Commonwealth Bank of Australia (2005) 224 ALR 467; [2005] FCA 1847
Flynn v CFMEU and Mathers v Feehan & Anor [2011] FMCA 32
Hadgkiss v Aldin & Ors (2007) 164 FCR 394; [2007] FCA 2068
Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080
Klousia v TKM Investments Pty Ltd & Anor [2009] FMCA 208
Leighton Contractors & Anor v CFMEU & Ors (2006) 164 IR 375; [2006] WASC 317
Mahenthirarasa v State Rail Authority of New South Wales (No.2) (2008) 72 NSWLR 273; [2008] NSWCA 201
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333
Morley & Ors v Australian Securities and Investments Commission (2010) 247 FLR 140; [2010] NSWCA 331
Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70
NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285
Olsen v Sterling Crown Pty Ltd (2008) 177 IR 337; [2008] FMCA 1392
P&C Cantarella Pty Ltd v Egg Marketing Board (NSW) [1973] 2 NSWLR 366
Reynolds v Southcorp Wines Pty Ltd & Anor (2002) 122 FCR 301; [2002] FCA 712
Scott v Handley (1999) 58 ALD 373; [1999] FCA 404
Smith v Zinifex Australia Ltd (No.2) (2008) 178 IR 285; [2008] FCA 836
Wong v The Queen (2001) 207 CLR 584; [2001] HCA 64
Workplace Ombudsman v Golden Maple Pty Ltd (2009) 186 IR 211; (2009] FMCA 664

The Worker, 19 July 1923

Applicant: KERREN MAREE CROSTHWAITE

Respondent: NATIONAL JET SYSTEMS PTY LTD

File Number: PEG 109 of 2007

Judgment of: Lucev FM

Hearing dates: 17 May 2011

Date of Last Submission: 17 May 2011

Delivered at: Perth

Delivered on: 9 December 2011

Applicant: KERREN MAREE CROSTHWAITE

Respondent: NATIONAL JET SYSTEMS PTY LTD

File Number: PEG 122 of 2007

Judgment of: Lucev FM

Hearing dates: 17 May 2011

Date of Last Submission: 17 May 2011

Delivered at: Perth

Delivered on: 9 December 2011

REPRESENTATION

Counsel for the Applicant: Mr R L Hooker

Solicitors for the Applicant: Corrs Chambers Westgarth

Counsel for the Respondent: Mr H J Dixon SC and Mr A B Gotting

Solicitors for the Respondent: EMA Legal

PEG 109 of 2007

DECLARATION AND ORDERS

1. Declares that the respondent contravened clause 27.3 of each Australian Workplace Agreement between the respondent and each employee listed hereunder, by underpaying each employee in the amount and for the period listed hereunder, and that under s.719(1) of the Workplace Relations Act, 1996 (Cth), orders that the respondent pay each penalty listed hereunder:

   (a)A King, underpayment of $1102.54 for the period 1 July 2006 to 15 December 2006, a penalty of $2640.

   (b)L Kruger, underpayment of $1307.56 for the period 1 July 2006 to 15 December 2006, a penalty of $2640.

   (c)M London, underpayment of $6471.77 for the period 1 July 2006 to 31 October 2007, a penalty of $3960.

2. The applicant’s application for orders against the respondent under s.407(1)(b) of the Workplace Relations Act, 1996 (Cth) for contravention of s.400(5) of the Workplace Relations Act, 1996 (Cth) with respect to A King and L Kruger be dismissed.

3. The respondent’s application for an order under s.824 of the Workplace Relations Act, 1996 (Cth) for the costs of, and thrown away by, the adjourned hearing on 15 and 16 October 2007, be dismissed.

PEG 122 of 2007

DECLARATION AND ORDERS

1. Declares that the respondent contravened clause 27.3 of each Australian Workplace Agreement between the respondent and each employee listed hereunder, by underpaying each employee in the amount and for the period listed hereunder, and that under s.719(1) of the Workplace Relations Act, 1996 (Cth), orders that the respondent pay each penalty listed hereunder:

   (a)J Adams, underpayment of $4108.48 for the period 1 July 2006 to 31 October 2007, a penalty of $2640.

   (b)S Carter, underpayment of $3899.04 for the period 1 July 2006 to 31 October 2007, a penalty of $2640.

   (c)J Coldhill, underpayment of $3672.36 for the period 1 July 2006 to 31 October 2007, a penalty of $2640.

   (d)D Deckert, underpayment of $59.81 for the period 1 July 2006 to 7 July 2006, a penalty of $1650.

   (e)S De Legh, underpayment of $5963.24 for the period 1 July 2006 to 31 October 2007, a penalty of $3960.

   (f)R Dyson, underpayment of $2676.78 for the period 1 July 2006 to 4 August 2007, a penalty of $2640.

   (g)C Edmunds, underpayment of $4089.51 for the period 1 July 2006 to 31 October 2007, a penalty of $2640.

   (h)A Edwards, underpayment of $3849.78 for the period 1 July 2006 to 31 October 2007, a penalty of $2640.

   (i)M Free, underpayment of $5026.96 for the period 1 July 2006 to 31 October 2007, a penalty of $3960.

   (j)A Funnell, underpayment of $733.95 for the period 1 July 2006 to 30 September 2006, a penalty of $1650.

   (k)L Galletti underpayment of $282.93 for the period 1 July 2006 to 18 July 2006, a penalty of $1650.

   (l)A Godfrey, underpayment of $6861.67 for the period 1 July 2006 to 31 October 2007, a penalty of $3960.

   (m)A Hardy, underpayment of $4556.96 for the period 1 July 2006 to 31 October 2007, a penalty of $2640.

   (n)R Holgate, underpayment of $3650.38 for the period 1 July 2006 to 31 October 2007, a penalty of $2640.

   (o)G Inness, underpayment of $4006.03 for the period 1 July 2006 to 31 October 2007, a penalty of $2640.

   (p)I Johnson, underpayment of $6378.24 for the period 1 July 2006 to 31 October 2007, a penalty of $3960.

   (q)D Martin, underpayment of $6085.05 for the period 1 July 2006 to 31 October 2007, a penalty of $3960.

   (r)D McKillop, underpayment of $6094.72 for the period 1 July 2006 to 31 October 2007, a penalty of $3960.

   (s)S McLean, underpayment of $611.38 for the period 1 July 2006 to 30 September 2006, a penalty of $1650.

   (t)C Milenkovic, underpayment of $4076.29 for the period 1 July 2006 to 31 October 2007, a penalty of $2640.

   (u)M Millar, underpayment of $6669.10 for the period 1 July 2006 to 31 October 2007, a penalty of $3960.

   (v)J Murdoch, underpayment of $1337.73 for the period 1 July 2006 to 19 October 2006, a penalty of $2640.

   (w)R Park, underpayment of $7337.80 for the period 1 July 2006 to 31 October 2007, a penalty of $3960.

   (x)V Rayner, underpayment of $6582.92 for the period 1 July 2006 to 31 October 2007, a penalty of $3960.

   (y)P Saario, underpayment of $556.21 for the period 1 July 2006 to 11 September 2006, a penalty of $1650.

   (z)N Schmidt, underpayment of $627.54 for the period 1 July 2006 to 28 September 2006, a penalty of $1650.

   (aa)J Speed, underpayment of $6307.06 for the period 1 July 2006 to 31 October 2007, a penalty of $3960.

   (bb)R Stevens, underpayment of $2241.10 for the period 1 July 2006 to 1 June 2007, a penalty of $2640.

   (cc)B Stevenson, underpayment of $880.20 for the period 1 July 2006 to 25 January 2007, a penalty of $1650.

   (dd)G Whitbread, underpayment of $5318.36 for the period 1 July 2006 to 31 October 2007, a penalty of $3960.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT PERTH

PEG 109 of 2007

KERREN MAREE CROSTHWAITE

Applicant

And

NATIONAL JET SYSTEMS PTY LTD

Respondent

PEG 122 of 2007

KERREN MAREE CROSTHWAITE

Applicant

And

NATIONAL JET SYSTEMS PTY LTD

Respondent

REASONS FOR JUDGMENT

Introduction

1. These Reasons for Judgment concern:

   a)the penalty or penalties, if any, to be imposed upon the respondent, National Jet Systems Pty Ltd,[1] for contravening the Workplace Relations Act 1996 (Cth);[2] and

   b)costs of a part of earlier proceedings in this matter.

   [1] “National Jet”.

   [2] “WR Act”.

Background

1. National Jet is a contract aviation service provider which employed the 33 pilots the subject of these penalty proceedings. National Jet is a member of the Cobham Group of companies operating a fleet of approximately 25 jet aircraft with a combination of freight and passenger options Australia-wide. The Cobham Group employs approximately 1000 employees, and has a human resources department and ready access to industrial relations advisers, including lawyers.[3]

   [3] Crosthwaite v National Jet Systems Pty Ltd (No. 4) (2010) 205 IR 176 at 178-179 per Lucev FM; [2010] FMCA 965 at para.2 per Lucev FM (“Crosthwaite (No. 4)”).

2. In Crosthwaite (No. 4) the Court found that:

   a)National Jet had not applied duress to two pilots, Messrs King and Kruger, in connection with the making of a new Pre-Reform Australian Workplace Agreement[4] and a new AWA;

   b)National Jet was required to adjust a pilot’s salary on 1 July each year to reflect upward CPI Movements whilst AWAs which applied to the pilots concerned were current;

   c)the AWAs were current until such time as they were terminated in accordance with the provisions of s.170BM of the WR Act as in force at 26 March 2006;[5] and

   d)to the extent that salary increases were not paid to reflect any upward CPI Movement with effect from 1 July 2006 and 1 July 2007, there were underpayments in relation to Pre-Reform AWAs containing a clause in the terms of clause 27.3 of the Pre-Reform AWA for two pilots, Messrs King and Kruger, which clause was reflected in Pre-Reform AWAs for a further 31 pilots.

   [4] “AWA”.

   [5] “Pre-Reform WR Act”.

3. The 33 pilots concerned were employed by National Jet prior to 1 July 2006 under individual AWAs.[6]

   [6] Statement of Agreed Facts, para.1. The Statement of Agreed Facts is set out in full in Crosthwaite (No. 4) IR at 180-181 per Lucev FM; FMCA at para.11 per Lucev FM.

4. Each of the AWAs concerned contained a clause in the following terms:

   During the currency of this agreement the gross annual salary of each Pilot as tabled (sic) Schedule 1 of the Agreement shall be adjusted with effect 1 July each year to reflect any positive annual movement in the March All Groups Consumer Price Index (“CPI”) as determined by the Australian Bureau of Statistics. Salaries will not be reduced by any negative movement to the CPI.

5. National Jet sent to each of the 33 pilots concerned a 30 June 2006 CPI Memorandum[7] advising that they were not eligible for a CPI increase as of 1 July 2006. Consistent with the terms of the CPI Memorandum, National Jet did not pay CPI increases to any of the 33 pilots on or from 1 July 2006, or to any of the 24 pilots who had still not signed a new AWA, and were still employed, on or from 1 July 2007. It was this failure to pay CPI increases with effect from 1 July 2006 and 1 July 2007 to the pilots concerned that the Court has determined to be an underpayment in relation to the Pre-Reform AWAs for those pilots from those dates.[8]

   [7] “CPI Memorandum”.

   [8] Crosthwaite (No. 4) IR at 187, 197 and 229 per Lucev FM; FMCA at paras.34, 59 and 201(a) per Lucev FM.

6. The terms of the CPI Memorandum provide, in part, as follows:

   I note that you are one of the NJS pilots that has not as yet, signed the 2005 NJS Pilots Australian Workplace Agreement (AWA).

   Whether you do so remains entirely up to you but I thought it was necessary to let you know that as a consequence of this you remain bound by the terms [sic] your previous employment agreement, which does not allow for CPI adjustments to base salary beyond the expiration date of the applicable agreement (Clause 3 refers). This means that you will not be eligible for a CPI increase as of 1^st July 2006.

   The purpose of this memo is to provide you with the opportunity to sign the 2005 agreement, which would make you eligible for the CPI increase as of 1^st July 2006, provided the agreement is signed and returned by 15^th July 2006.

Evidence

1. The Statement of Agreed Facts is relied upon by both parties.

2. Both parties also relied upon the affidavits filed at hearing.

3. National Jet also relies upon an additional affidavit of Steven James Barrett sworn on 27 April 2011, which was admitted into evidence at the penalty hearing, and not cross-examined upon.[9]

   [9] “Barrett Affidavit”.

Issues

1. The issues to be determined by the Court in these proceedings are:

   a)i)      what are the contraventions?

   i)whether the contraventions involve a single course, or multiple courses, of conduct; and

   ii)how many contraventions are there?

   b)to identify and deal with the factors relevant to determining the appropriate penalty for any contravention, having regard to the circumstances of the case, which in this case are likely to be affected by an argument as to whether there should be any penalty at all;

   c)if there is to be a penalty, whether there should also be declaratory relief; and

   d)whether National Jet should be awarded the costs of the hearing on 15 and 16 October 2007.

What are the contraventions?

1. The contraventions which arise from the findings of the Court in Crosthwaite (No. 4) referred to above,[10] are that National Jet contravened:

   a)an applicable provision in each of the 33 Pre-Reform AWAs made between National Jet and each of the 33 pilots named in Schedule 1 to the Second Further Amended Points of Claim relating to the non-payment of a 3% salary increase on and from 1 July 2006; and

   b)an applicable provision in each of the 24 Pre-Reform AWAs made between National Jet and each of the 24 pilots named in Schedule 2 to the Second Further Amended Points of Claim relating to the non-payment of a 2.4% salary increase on and from 1 July 2007.

   [10] See para.3 above.

Course of conduct and maximum penalty – how many contraventions?

1. Section 718(1) of the Pre-Reform WR Act provided that a term of an AWA was an “applicable provision”.

2. Section 719(1) of the WR Act empowers the Court to impose a penalty on a person if:

   a)the person is bound by an applicable provision; and

   b)the person breaches the provision.

3. The applicant argues that as each AWA for each pilot is a separate industrial instrument, it follows that each term of each AWA is a separate “applicable provision”.

4. Section 719(2) of the WR Act provides as follows:

   (2)  Subject to subsection (3), where:

   (a)  2 or more breaches of an applicable provision are committed by the same person; and

   (b)  the breaches arose out of a course of conduct by the person;

   the breaches shall, for the purposes of this section, be taken to constitute a single breach of the term.

5. The applicant submits that in assessing whether multiple contraventions of the same applicable provision arose from a single course of conduct, it is open to the Court to have regard to any discrete or distinct acts or omissions which can fairly said to have caused, or contributed to, the contraventions.

6. The applicant says that the Court may conclude that:

   a)from 30 June 2006 National Jet applied a consistent policy of not paying CPI increases to any pilot who continued to be employed under an AWA with a nominal expiry date prior to 1 July 2006; and

   b)there is no evidence that National Jet made a further and distinct decision in mid 2007 to not pay a CPI increase to 24 of the 33 pilots with effect from 1 July 2007.

7. The applicant acknowledges that National Jet’s second contravention of each of the AWAs on the 24 pilots concerned in July 2007 arose out of a course of conduct that began in June 2006 in relation to each of those pilots. The applicant therefore does not assert that National Jet’s contraventions in July 2007 ought to be treated as separate contraventions of each of those 24 pilots’ AWAs for the purposes of determining penalty. Rather, the applicant submits that National Jet’s conduct should be treated as amounting to 33 contraventions of 33 separate applicable provisions.

8. The applicant submits that s.719(2) of the WR Act has no application in circumstances where each clause 27.3 of each AWA is a separate term and each breach of clause 27.3 of each AWA is a distinct contravention, arising from a distinct decision by National Jet not to pay the pilot the subject of that AWA the CPI increase under his AWA. The applicant says that each such decision, 33 in total, was separately communicated to each pilot via the CPI Memorandum sent to each pilot, and that there were distinct decisions to deny a CPI increase to each of the 33 pilots who had not signed a new AWA.

9. The applicant also points to the fact that National Jet adopted a strategy whereby it sought to enter into AWAs rather than collective agreements, and submits that it would be disingenuous for National Jet to now try to argue that the 33 individual agreements should be considered as one agreement involving one contravention.

10. National Jet submits that:

    a)each breach of clause 27.3 of each AWA did not represent a distinct decision by National Jet not to pay the pilot concerned the CPI increase, but rather that a single decision was made in June 2006 not to pay the CPI increase to any pilot whose employment was governed by an out of term AWA, and that that decision also had effect in June 2007 (the latter fact not being disputed by the applicant);

    b)the separate communication to each pilot of the CPI Memorandum did not constitute a distinct decision by National Jet not to pay each pilot the CPI pay increase, in reality, a single decision was made not to pay the CPI pay increase and the effect of that single decision was communicated to each pilot concerned; and

    c)no criticism can be directed at National Jet for electing to use AWAs as they were entitled to do so under the WR Act.

11. Having regard to their respective positions with respect to National Jet’s course of conduct:

    a)the applicant submits that for the purposes of s.719 of the WR Act, the Court should start from the premise that National Jet committed a total of 33 contraventions of an “applicable provision” with a maximum penalty of $33,000 per contravention, resulting in a maximum possible penalty of $1,089,000 for these contraventions; and

    b)National Jet submits that the Court should proceed on the basis of a single contravention, notwithstanding the number of employees involved and the number of separate AWAs, and, therefore, the maximum possible penalty should be $33,000.

1. Various authorities were referred to by the parties in support of their submissions.

2. Brobbel v Darrell Lea Chocolate Shops Pty Ltd[11] does not assist as the primary issue was determination of penalty for 12 admitted contraventions of s.400(5) of the WR Act (related to duress),[12] and the provisions of s.719(2) of the WR Act, and the number of contraventions, were not in issue.

   [11] [2008] FMCA 714 (“Darrell Lea Chocolate Shops”).

   [12] Darrell Lea Chocolate Shops at para.1 per Burchardt FM.

3. In Smith v Zinifex Australia Ltd (No. 2)[13] there were again an agreed number of admitted contraventions (one), and the specific issue of how many contraventions there were did not therefore arise for consideration by the Court. Zinifex Australia is therefore also not of particular assistance to the Court.

   [13] (2008) 178 IR 285; [2008] FCA 836 (“Zinifex Australia”).

4. Of more assistance is Fair Work Ombudsman v The Palcon Group Pty Ltd.[14] There were two employees, each a signatory to a separate AWA, each in like terms, which had been contravened in each fortnight over periods of approximately two years and 18 months respectively with respect to payments owed to the employees.[15] The breaches arose as a result of the employer’s misunderstanding of the relevant terms of each AWA.[16]

   [14] (2009) 190 IR 94; [2009] FMCA 974 (“The Palcon Group”).

   [15] The Palcon Group at paras.10-25 per Cameron FM.

   [16] The Palcon Group at paras.49 and 52 per Cameron FM.

5. The Court found that there was one course of conduct by the employer in relation to each fortnightly contravention of each of the employees’ AWAs, and therefore a single contravention with respect to each of the employees. Thus two contraventions were found to have been committed by the employer,[17] and penalty was calculated on the basis of there being two contraventions.[18]

   [17] The Palcon Group at paras.60-61 per Cameron FM.

   [18] The Palcon Group at paras.80-81 per Cameron FM.

6. By analogy with The Palcon Group in this matter:

   a)there are 33 employees each a signatory to a separate AWA, relevantly in like terms;

   b)there has been a failure to pay in accordance with the terms of the AWA over varying, sometimes lengthy, periods;

   c)the failure to pay is a result of a misunderstanding or misinterpretation of the provisions of the AWAs by National Jet; and

   d)there was only one course of conduct giving rise to a decision to underpay the employees under the AWAs.

7. On the basis of the Court’s judgment in The Palcon Group, which is, in principle, very similar to this case, the Court would find that this case involves 33 separate contraventions, one for each employee underpaid during the relevant periods.

8. National Jet relied on a passage in Mornington Inn Pty Ltd v Jordan[19] where the majority of the Full Court of the Federal Court said:

   It is clear that Mr Barry’s treatment of Ms Thompson occurred in the pursuit of the overall objective of prevailing upon a number of employees to sign AWAs. However, so to conclude does not compel a finding that the offences relating to Ms Thompson should necessarily be considered, and penalised, together. On that reasoning the contraventions concerning the other employees might be seen also as part of the same course of conduct. Such an approach would suggest a single penalty fixed for all contraventions, treating them all as part of the one course of conduct. Although that might be a proper course in some cases, nobody suggested it was the course to be adopted in the present case.[20]

   [19] (2008) 168 FCR 383; [2008] FCAFC 70 (“Mornington Inn”).

   [20] Mornington Inn FCR at 399 per Stone and Buchanan JJ; FCAFC at para.51 per Stone and Buchanan JJ.

9. National Jet therefore submitted that it was open to this Court to impose a single penalty in relation to National Jet’s single course of conduct in underpaying 33 employees as a consequence of the decision giving rise to the dissemination of, and the giving effect to, the CPI Memorandum.

10. It is important however to read Mornington Inn completely, and in context. Whilst the majority of the Full Court of the Federal Court said that it “might” be proper in “some cases” to fix a single penalty for all contraventions treating them as part of one course of conduct, it was not a course adopted in Mornington Inn. Indeed, the Full Court of the Federal Court went on to say that:

    The primary judge indicated, by his reasons for judgment, that he understood the matters at issue. In the end he appears to have made a deliberate choice to punish the contraventions involving Ms Thompson as separate contraventions and at the same level as the others. This may represent a stern approach but we do not think it can be said that an appealable error was thereby committed. Accordingly we dismiss ground 1 of the appeal.[21]

    [21] Mornington Inn FCR at 402-403 per Stone and Buchanan JJ; FCAFC at para.68 per Stone and Buchanan JJ.

11. Earlier, the majority of the Full Court of the Federal Court had distinguished between:

    a)multiple contraventions for which consecutive sentences might be imposed;

    b)multiple contraventions involving one multi-faceted course of conduct for which concurrent sentences are just and convenient,[22]

    and it distinguished the situation with respect to the occurrence of multiple contraventions, whether consecutively or concurrently sentenced, from the application of the totality principle as a final check on the justice and proportionality of the contravening conduct.[23]

    [22] Mornington Inn FCR at 396-397 per Stone and Buchanan JJ; FCAFC at para.41 per Stone and Buchanan JJ.

    [23] Mornington Inn FCR at 397 per Stone and Buchanan JJ; FCAFC at para.42 per Stone and Buchanan JJ.

12. Thus the majority of the Full Court of the Federal Court found no appealable error with respect to the imposition of penalty with respect to six separate contraventions concerning duress by the employer upon a single employee with a view to having that employee sign an AWA.

13. Although not relevant to the actual judgment to be made in Mornington Inn, the majority of the Full Court of the Federal Court did observe that s.719 of the WR Act “provides, in respect of breaches of awards and other instruments, that a continuing breach is to be treated as a single breach.”[24]

    [24] Mornington Inn FCR at 396 per Stone and Buchanan JJ; FCAFC at para.41 per Stone and Buchanan JJ.

14. Therefore, on the basis of Mornington Inn, there is nothing to prevent the Court from finding separate contraventions (even in respect of a single course of conduct) and imposing a separate penalty in respect of each contravention, but due regard must be paid to any penalties that might apply, and the totality of any penalties must be appropriate.

15. In Klousia v TKM Investments Pty Ltd & Anor[25] there was agreement as to the relevant contraventions,[26] and the “only issue” for the Court was the quantum of penalties and time for payment.[27]

    [25] [2009] FMCA 208 (“Klousia”).

    [26] Klousia at paras.12, 18 and 79 per O’Sullivan FM.

    [27] Klousia at para.12 per O’Sullivan FM.

16. National Jet submitted that in Klousia the Court considered 46 contraventions in respect of six different employees but proceeded to assess penalty on the basis of the employer engaging in a course of conduct that ought to be viewed as eight separate contraventions only (with different obligations being treated as giving rise to eight separate contraventions).

17. The Court’s approach in Klousia is set out in the following passages:

    95.The same could be said of the 24 other breaches of the Automotive Industries NAPSA that are recorded for the Employees at Attachment A to these reasons. That makes clear that for each of the Employees there is a single breach of Automotive Industry NAPSA in relation to superannuation. There are also breaches in relation to the requirement to pay penalty rates for time on Saturdays, Sundays and public holidays as well as overtime and minimum shift payments. All these contraventions have common elements and arose from the decision to pay a flat hourly rate regardless of the day or hour worked.

    96. There have been contraventions established in respect of the (six) Employees and those contraventions occurred I am satisfied as part of a course of conduct. The eight contraventions are the failure to:

    a) provide the basic periodic rate of pay;

    b) provide casual loading;

    c) provide minimum of 4 hours work or payment for same for each start;

    d) pay double time and one half for work performed on a public holiday;

    e) pay time and one half for the first 2 hours and double time thereafter for work performed outside of ordinary hours;

    f) pay time and one half for the first 2 hours and double time thereafter for work on Saturday;

    g) pay double time for work on Sunday; and

    h) make contributions for superannuation.[28]

    [28] Klousia at paras.95 and 96 per O’Sullivan FM (footnotes omitted).

18. In Klousia the Court was able to deal with the matter as eight contraventions because it was a clause of an award which was being contravened, not an individual AWA. Therefore, the relevant decision resulted in a breach of an applicable provision in an award, which affected a number of employees, and which could be treated as a single contravention because there was, in each instance, only one applicable provision of the award which had been contravened. Thus the contraventions were able to be treated as eight contraventions because there were eight applicable provisions in the award which had been contravened, and each of those applicable provisions applied to a group of employees, who had been underpaid.

19. In Alcantara & Anor v Buildpower Pty Ltd (No. 2)[29] there was one claimed contravention in relation to a single course of conduct relating to contravention of a single statutory regulation with respect to two employees.[30] Alcantara (No2) is therefore of little assistance.

    [29] [2010] FMCA 763 (“Alcantara (No. 2)”).

    [30] Alcantara (No. 2) at paras.12 and 23-24 per Lucev FM.

20. In this case, there was only one course of conduct by National Jet which resulted in the issuance of, and giving effect to, the CPI Memorandum, which resulted in the underpayments in 2006 and 2007. However, that single course of conduct affects each AWA for each employee and results in separate contraventions of each of the applicable provisions. There is a single breach of each applicable provision. There are therefore 33 separate contraventions of 33 separate applicable provisions in the 33 separate AWAs. In this case, as in The Palcon Group, each separate applicable provision is of a separate AWA and applies separately to each employee, thereby resulting in 33 separate contraventions.[31]

    [31] Bearing in mind that there is a concession by the applicant that there are only 33 contraventions at most, and not 57, as a consequence of the failure to pay on and from 1 July 2007: see para.19 above.

21. The Court has therefore concluded that, for the purposes of assessing penalty, there are 33 separate contraventions by National Jet.

Principles relevant to the determination of an appropriate penalty

1. The federal courts have developed general principles to which regard is had in determining civil penalties for contravention of workplace relations legislation. Those principles include the following:

   a)fundamentally, the penalty must be proportionate to the gravity of the contravening conduct;[32]

   [32] Attorney-General v Tishy (1982) 30 SASR 84 at 92 per Wells J; Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2011] FCA 810 at para.25 per Gilmour J (“ABCC”).

   b)penalties are imposed for the following purposes:

   i)punishment, proportionate to the offence and according to prevailing standards;

   ii)personal or specific deterrence, assessing the risk of reoffending, and general deterrence, as a deterrent to others who might be likely to offend; and

   iii)rehabilitation;[33]

   c)the sentencing task is one of instinctive synthesis in which the Court takes account of all relevant factors and arrives at a single result taking due account of all of the relevant factors;[34]

   d)proportionality and consistency are a final check on the penalty assessed;[35]

   e)courts may identify a range of factors appropriate to the assessment of penalty, but ought to be wary of the use of check lists which “give rise to the risk of transforming the process of instinctive synthesis into the application of a rigid catalogue of matters for attention”;[36] and

   f)courts ought also be wary of comparing penalties from other cases when assessing the amount of penalty to be fixed.[37]

   [33] Ponzio v B & P Caelli Constructions Pty Ltd and Ors (2007) 158 FCR 543 at 559-560 per Lander J; [2007] FCAFC 65 at para.93 per Lander J (“Caelli Constructions”); ABCC at para.26 per Gilmour J.

   [34] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at 567-568 per Gray J and 572 per Graham J; [2008] FCAFC 8 at para.27 per Gray J and para.55 per Graham J (“Australian Ophthalmic Supplies”); Wong v The Queen (2001) 207 CLR 584 at 611-612 per Gaudron, Gummow and Hayne JJ; [2001] HCA 64 at paras.74-76 per Gaudron, Gummow and Hayne JJ; ABCC at para.27 per Gilmour J.

   [35] Australian Ophthalmic Supplies FCR at 572 per Graham J; FCAFC at para.54 per Graham J; ABCC at para.28 per Gilmour J.

   [36] ABCC at para.30 per Gilmour J; Australian Ophthalmic Supplies FCR at 579-580 per Buchanan J; FCAFC at paras.89-91 per Buchanan J.

   [37] NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 295 per Burchett and Kiefel JJ; ABCC at para.31 per Gilmour J.

General factors relevant to assessment of penalty

1. Factors which may be taken into account in assessment of penalty are well established and have been consistently applied by this Court.[38] Broadly, those relevant factors can be listed as follows:

   [38] Examples include: Mason v Harrington Corporation Pty Ltd [2007] FMCA 7; Olsen v Sterling Crown Pty Ltd (2008) 177 IR 337; [2008] FMCA 1392; CFMEUv Austral Bricks (Qld) Pty Ltd (2009) 178 IR 470; [2009] FMCA 143; Workplace Ombudsman v Golden Maple Pty Ltd (2009) 186 IR 211; (2009] FMCA 664; Fair Work Ombudsman v Industrial Roadpavers (WA) Pty Ltd (2010) 194 IR 436; [2010] FMCA 204.

   a)the nature and extent of the conduct which led to the contraventions;

   b)the circumstances of the conduct (including deliberate defiance or disregard of Commonwealth workplace relations legislation);

   c)the consequences of the contravening conduct;

   d)the objects of Commonwealth workplace relations legislation;

   e)whether the contraventions are distinct or arise from a single course of conduct;

   f)deterrence, both general and specific;

   g)relevant record of civil penalty contraventions;

   h)the size and financial resources of the contravener;

   i)co-operation with regulatory authorities (if any);

   j)the contravener's contrition (if any);

   k)the size of the prescribed penalty, and any recent increases to that prescription; and

   l)the totality principle.

2. A number of the factors are relevant to the present case and are therefore considered below.

Nature and extent of the conduct which led to the contraventions

1. The applicant submits that:

   a)the contraventions are not the most serious contraventions of Commonwealth workplace relations law, as they did not involve a breach of minimum statutory entitlements;

   b)the total underpayment of $123,423.45 was large, and consequently, a significant benefit was obtained by National Jet;

   c)individual employees were each out of pocket by as much as $7,337.80;[39]

   d)without the commencement of these proceedings it is likely that National Jet would have continued to deny the pilots any CPI increase in their respective salaries, so that the pilots would have suffered an even greater loss; and

   e)the contraventions continued over a period of at least 16 months (from at least July 2006 to October 2007), and continued after the commencement of the investigation by the regulatory authorities, and the commencement of these proceedings in May 2007.

   [39] See the table of quantum of underpayments in Crosthwaite (No. 4) IR at 181-182 per Lucev FM; FMCA at para.12 per Lucev FM (“Table of Quantum of Underpayments”).

2. The respondent submits that:

   a)the Court should not consider the amount of the underpayments in absolute terms, as the total amount of the underpayment over a 16 month period (1 July 2006 to 31 October 2007) of $123,423.45 should be considered against the size of the payroll of National Jet for the financial year ending 30 June 2006, which was $51,827,357, and 30 June 2007, which was $51,570,235;[40] and

   b)there is no basis in the evidence to suggest the likely response of National Jet to claims of the pilots had the applicant not commenced the proceedings, and that any submission with respect to any further loss is speculative and without foundation.

   [40] Barrett Affidavit at para.29.

3. In the Court’s view:

   a)these were not the most serious contraventions of Commonwealth workplace relations law, not only because they did not involve a breach of minimum statutory entitlements, but also because the non-payment was based, initially, on a view of the construction of the AWA clause which the Court found to be arguable, albeit ultimately wrong;[41]

   b)in context the total amount of the underpayments ($123,423.45) was not large, but nor was it infinitesimal, but in the context of a payroll in excess of $50m a year for National Jet it amounts to less than .24% of the total payroll, and its non-payment cannot therefore be described as a “significant benefit” to National Jet;

   c)some of the contraventions were ongoing over a lengthy period of time, up to 16 months, during which time there is no evidence of National Jet seeking or obtaining a lawyer’s advice on the construction of the relevant clause, at least until a Response was filed in these proceedings;

   d)inferences may be drawn from the conduct of the parties, and it is possible to infer from the failure of National Jet to make the underpayments to the pilots prior to these proceedings commencing, and indeed for some time after these proceedings commenced, that it is unlikely that National Jet would have paid the CPI Increase if these proceedings had not been commenced;

   e)although the maximum underpayment of a pilot was $7,330.80, there was significant variation in the amounts underpaid, which were obviously affected by individual pilots’ pay rates, and by the time for which they were engaged, such that:

   i)the minimum underpayment was $59.81; and

   ii)the average underpayment was $3,741.10.[42]

   [41] Crosthwaite (No. 4) IR at 217 per Lucev FM; FMCA at para.155 per Lucev FM.

   [42] See Table of Quantum of Underpayments.

4. The significant difference in the quantum of underpayments is indicative of there possibly having to be different penalties, or ranges of penalties, for the various contraventions.

Circumstances of the conduct

1. The applicant submits that National Jet had a policy of employing its pilots on individual AWAs from 1997 to the end of 2007 and points to a number of different versions of AWAs between National Jet and its pilots, each version being in a standard form. The applicant points to the negotiations between the National Jet Pilots Group, an unregistered organisation representing the interests of pilots employed by National Jet, and National Jet, in relation to an AWA intended by National Jet to put into effect salary reductions for pilots, and an increase in the overtime trigger, as well as a possible contribution by pilots towards the cost of B717 training, which contribution was ultimately to be repaid subject to performance bonuses. The necessity to negotiate such an AWA arose from a bid submitted by National Jet to Qantas in relation to the operation and maintenance of Boeing 717 aircraft with effect from July 2005. National Jet had been advised by Qantas that its bid was uncompetitive, and National Jet sought to review the costs which lay behind its bid, including its labour costs, hence the negotiation of a new AWA. Negotiations ensued and the pilots group sent to individual pilots a draft AWA for consideration in late May 2005. A number of pilots took up a B717 position but, by July 2005, had not signed the draft 2005 AWA. The applicant says that National Jet implemented a plan[43] to deal with this situation and that the Plan involved the preparation of the CPI Memorandum advising that the then current AWA did not allow for a CPI increase, but that a CPI increase would be granted if the draft AWA offer was signed by those pilots. The CPI Memorandum was sent with an amended draft AWA offer to reflect certain mandatory changes required by changed legislation.

   [43] “Plan”.

1. The applicant submits that National Jet’s conduct was deliberate and committed in the context of the Plan to pressure pilots to sign the draft 2005 AWA which had been agreed to by the pilots group. The applicant submits that although the Court concluded that an arguable case was mounted by National Jet at hearing that the proper construction of clause 27.3 of the AWAs was that no CPI increases were payable after the nominal expiry date,[44] it remains open for the Court to conclude that at the time the CPI Memorandum was issued, National Jet did not actually and genuinely rely on the arguable interpretation in withholding the CPI increases in July 2006, and that, to the contrary, National Jet had paid CPI increases to employees in previous years notwithstanding that those employees’ AWAs has passed their nominal expiry date.[45]

   [44] Crosthwaite (No. 4) IR at 217 per Lucev FM; FMCA at para.155 per Lucev FM.

   [45] Transcript, 11 April 2008, page 346.

2. In relation to the circumstances of the conduct National Jet submits that:

   a)there is:

   i)no allegation pleaded;

   ii)no evidence to support a suggestion; and

   iii)no finding of the Court,

   that the underpayments occurred as part of a wider effort to pressure all the Pilots to sign the new AWAs;

   b)the non-payment of CPI increases was:

   i)not part of the Plan; and

   ii)that the Court did not find that such non-payment was part of the Plan;[46]

   c)the Court found that the Plan was implemented against Mr King and Mr Kruger,[47] and did not find that the Plan was implemented against any of the other 31 Pilots;

   d)there was no suggestion put in cross-examination that non-payment of CPI pay rises was part of the Plan, and that the evidence of the respondent suggested that the decision not to pay the CPI pay rise was made by an executive of National Jet other than those involved in developing the Plan;[48] and

   e)there is no basis for the Court to conclude that National Jet did not genuinely rely on the interpretation of the CPI clause adopted in July 2006 as there was no evidence to that effect, and no suggestion put to that effect in cross-examination.

   [46] Crosthwaite (No. 4) IR at 202-203 per Lucev FM; FMCA at para.94 per Lucev FM.

   [47] Crosthwaite (No. 4) IR at 202-203 per Lucev FM; FMCA at para.94 per Lucev FM.

   [48] See Transcript, 11 April 2008, pages 347, 348 and 350.

3. In relation to the Plan the Court observed in Crosthwaite (No. 4) as follows:

   94. Officers of the respondent met on or about 25 July 2005. Mr Roberts and Mr Siebert were included in that meeting. A plan[49] was formulated to deal with pilots, including Mr King and Mr Kruger, who had taken up a B717 position but had not accepted the 2005 AWA offer. The respondent’s objective was to have those pilots accept the terms and conditions of B717 endorsement training as contained in the 2005 AWA Offer and later the 2006 AWA Offer. A number of steps were involved in the Plan, including the “ramping up the nature of the communications from … [the respondent] and ending with an application to terminate the extant AWAs of those pilots”.[50] The Plan was formulated and implemented against Mr King and Mr Kruger. The individual steps in relation to both Mr King and Mr Kruger are set out below.

   95. Duress may be constituted by conduct which is otherwise legal. In this case, the Plan reveals nothing other than an intention on the part of the respondent to engage in conduct which was legal. The fact that the Plan involved putting pressure upon those pilots who had not accepted the 2005 AWA Offer, and later the 2006 AWA Offer, does not of itself constitute duress. Nor does the fact that the Plan ends with an application to terminate the pilots existing AWAs. The Plan was consistent with the respondent not intending to continue to pay pilots upon their existing AWAs if they did not accept the terms and conditions of the B717 endorsement training. For reasons set out below, there is nothing in the evidence which would indicate that the respondent’s application and pressure, which in the circumstances was legal, went beyond the boundaries of legitimate pressure and became duress. Therefore, there was nothing in the Plan, in and of itself, which constituted duress in relation to Mr King and Mr Kruger.[51]

   [49] “Plan”.

   [50] Transcript, page 298.

   [51] Crosthwaite (No. 4) IR at 202-203 per Lucev FM; FMCA at paras.94-95 per Lucev FM.

4. Based on the Court’s findings in Crosthwaite (No. 4) the Plan was formulated to deal with all of the pilots. However, it was not formulated with a view to underpaying those pilots, but rather to having them accept certain terms and conditions, and to their not continuing to be paid upon their existing AWAs if they did not accept the proposed terms and conditions. To that extent, there is no evidence that the underpayments were a deliberate part of the Plan. Likewise, there was no evidence that National Jet did not genuinely rely on the interpretation of clause 27.3 of the AWAs set out in the CPI Memorandum. That said, there was nevertheless a deliberate decision made, by senior management, seemingly without the benefit of external advice, not to pay the CPI increase, and thereby to underpay the pilots concerned.

Involvement of senior management in the contraventions

1. The applicant asserts that the decision not to pay the CPI increases was part of the Plan formulated by National Jet’s senior management, and that the evidence indicates that National Jet’s conduct was a result of decisions made by those at a very senior managerial level. The position with respect to the Plan is set out above.[52]

   [52] See paras.55-56 above.

2. Senior managers were involved in the discussions which led to the issuance of the CPI Memorandum, and the giving effect to of the CPI Memorandum. There is therefore no doubt that senior management were involved in the contraventions at the time they occurred.

3. Although more relevant to the issue of specific deterrence, it is appropriate however to observe that the senior managers who were involved in the contraventions, either no longer work for National Jet, or no longer have senior management positions.[53]

   [53] Barrett Affidavit at para.25.

Background of the respondent

1. There is no dispute that National Jet has no record of a prior contravention of Commonwealth workplace relations laws.

2. It is therefore appropriate to treat National Jet as a first time contravener of Commonwealth workplace relations laws.

Co-operation with authorities and contrition

1. The applicant submits that there was limited co-operation in the applicant’s initial investigation by officers of National Jet by participating in an interview with the applicant on 18 December 2006 and by producing, albeit late, documents in response to notices to produce issued in August 2006. To that extent, the applicant submits that there was minimal co-operation.

2. The applicant also submits that it should be taken into account that National Jet:

   a)refused to rectify the underpayments when it received the applicant’s first breach notice of 27 November 2006;

   b)refused to rectify the underpayments when it received the applicant’s final breach notice of 4 January 2007;

   c)refused to rectify the underpayments when these proceedings were commenced; and

   d)only rectified the underpayments some six months after the proceedings were commenced, and a month after the hearing commenced, but without admission of liability.

3. The applicant submits that although the underpayments were eventually rectified, it was done without any admission of liability, and that the Court may infer that if the current proceedings had not been commenced it is highly likely that National Jet’s contraventions would have continued. The Court has already expressed a view that that is likely to be so.[54]

   [54] See para.50(d) above.

4. To the extent that there was a Statement of Agreed Facts entered into, thereby reducing the need for the Court to hear evidence regarding the underpayments, the applicant says that this occurred after the proceedings had been adjourned part heard, and ought be afforded limited weight.

5. The applicant also suggests that National Jet did not express contrition sufficiently speedily following the Court’s finding of liability.

6. National Jet submits that there was extensive co-operation, as follows:

   a)participation in the interviews cited by the applicant;

   b)factual admissions made for the purposes of the proceedings;[55]

   c)certain factual matters were not put in issue in the proceedings;[56]

   d)preparation of the Statement of Agreed Facts, which, together with the admissions cited above, had the effect that the applicant did not need to call evidence from 31 of the pilots; and

   e)payments were made to the pilots by National Jet on a without admission basis when there was no obligation on it to do so, and in circumstances where the proper interpretation of the relevant provisions of the AWA had not been determined.

   [55] Citing Further Amended Points of Defence, paras.A5, 1-17, 26-27, 32-33, 35-36, 38-39, 41-42, 44-45, 47-48, 50-51, 53-54, 56-57, 59-60, 62-63, 65-66, 68-69, 71-72, 74-75, 77-78, 88(1), 83-84, 86-87, 89-90, 92-93, 95-96, 98-99, 101-102, 104-105, 107-108, 110-111, 113-114, 116-117 and 119-120.

   [56] Citing, for example, Further Amended Points of Defence, para.A4.

7. National Jet also relies upon its express statement of contrition, made by the Vice President Human Resources with responsibility for National Jet to the effect that National Jet “express[ed] sincere regret that the underpayments occurred in the way found by the Court.”[57]

   [57] Barrett Affidavit at para.11.

8. The issue of co-operation has to be seen in context. That context includes the fact that this was seriously contested in lengthy litigation.

9. The co-operation exhibited in the process of the litigation included admissions in matters not put in issue, and the Statement of Agreed Facts (albeit put in part-way through the hearing), which significantly shortened an otherwise already lengthy hearing.

10. Some credit must be given for the eventual payment of the underpayments by National Jet, although it is difficult to reconcile the making of the payments part-way through the hearing, with the continuation of the hearing and an ongoing contest as to liability. The latter reduces somewhat the credit that might otherwise have been afforded to National Jet for making the payment at the time that it occurred.

11. The Court notes that there was participation by officers of National Jet in pre-litigation interviews, but that co-operation must have been, in its context, limited, as it was necessary to commence the litigation with respect to the underpayments, and the underpayments were not rectified until after the litigation commenced, but again without admission of liability.

12. In the Court’s view the co-operation in this case was neither limited, as asserted by the applicant, nor extensive, as asserted by National Jet. Rather, it was a relatively significant co-operation, more particularly in relation to the litigation process such that the length of the hearing (and the consequent expense to the parties and the taxpayer), was significantly reduced by National Jet’s co-operation in that regard.

13. In the Court’s view the expression of contrition by National Jet was genuine, there being nothing to suggest otherwise, appropriate and timely it being made, and reduced to affidavit form, in advance of the penalty hearing.

14. The level of co-operation afforded by National Jet obviously warrants some reduction in penalty when compared to the penalty that might be imposed if there had been no co-operation, and the applicant had been put to proof on all issues, with a consequently very lengthy hearing with all witnesses having to be called.

Deterrence

1. The applicant acknowledges that AWAs are no longer part of the Commonwealth workplace relations framework, and that therefore the specific circumstances of this case are unlikely to be repeated. However, the applicant points to the fact that National Jet’s conduct was the failure to pay its employees their entitlements under an applicable industrial instrument, which is behaviour that continues to be subject to a civil penalty under the Fair Work Act 2009 (Cth).[58]

   [58] Fair Work Act 2009 (Cth), ss.45 and 50.

2. In relation to the failure to pay in accordance with an industrial instrument the applicant submits that a penalty at a meaningful level for general deterrence ought to be imposed, and that this has been the consistent policy and principle of the federal courts in imposing penalties for such contraventions.[59]

   [59] Citing Kelly v Fitzpatrick (2007) 166 IR 14 at 21 per Tracey J; [2007] FCA 1080 at para.28 per Tracey J; Flynn v CFMEU and Mathers v Feehan & Anor [2011] FMCA 32 at para.14 per Simpson FM; Fair Work Ombudsman v Roselands Fruit Market & Anor (2010) 200 IR 199; [2010] FMCA 599 at para.80 per Driver FM.

3. The applicant submits that specific deterrence is necessary, and refers to National Jet’s failure to express contrition forthwith upon the finding of liability, and says that the Court should apply a penalty that would have the effect of demonstrating to National Jet that contraventions of Commonwealth workplace relations laws will not be tolerated. The applicant also notes that National Jet continues to conduct business as a national passenger and freight services provider as part of the Cobham Group, and continues to employ employees in the industry.

4. National Jet submits that:

   a)there is express contrition by National Jet;[60]

   b)the mere existence of an industrial instrument does not mean that there is a need for deterrence of any kind, and indeed if it were the case, then a Court could never refuse to impose a penalty on an employer, a submission inconsistent with settled principle and settled case law; and

   c)there is no need for specific deterrence given:

   i)the limited duration of the contraventions;

   ii)the lack of deliberateness of the contraventions;

   iii)the payment to the pilots in circumstances where the construction of clause 27.3 adopted by National Jet was arguable;

   iv)the changes to the membership and structure of the human resources team and management at National Jet; and

   v)National Jet’s contrition for the contraventions.

   [60] Barrett Affidavit at para.11.

5. As to the changes in management National Jet says that the evidence indicates that:

   a)since 1 July 2007 as a consequence of a change in the human resources structure of the Cobham Group each of the four business units now has a dedicated human resource manager;[61]

   b)the corporate human resources team comprises Mr Barrett as Vice President Human Resources, who commenced on 7 March 2011, Ms Swinton who commenced in October 2007 and Mr Puro who commenced in 2006, whilst the human resources manager for the airline services business, Mr Bowels, commenced in November 2010;[62] and

   c)the managers responsible for implementation and management of the underpayments have either left National Jet or no longer hold management positions with National Jet.[63]

   [61] Barrett Affidavit at para.22.

   [62] Barrett Affidavit at paras.1, 23 and 24.

   [63] Barrett Affidavit at para.25.

6. As to general deterrence National Jet submits that there is, by publication of the Reasons for Judgment in Crosthwaite (No 4), sufficient general deterrence in relation to employers generally, particularly in circumstances where the contravention found by the Court does not concern any provision of general application, but rather one very specific to National Jet and some of its employees.

7. As to general deterrence the Court considers that where:

   a)there has been 33 contraventions of 33 industrial instruments;

   b)the contraventions are constituted by underpayments;

   c)the underpayments in total amount to $123,423.45; and

   d)some of the contraventions took place over a period of 16 months,

   there ought to be a penalty imposed with respect to each contravention. In this regard the Court notes the increase in penalties for contravention of Commonwealth workplace relations laws provided in recent years by the Parliament,[64] and the significance of those increased penalties for penalties imposed by the Court, and the need to demonstrate to others the seriousness with which the Court views contravention of industrial instruments, with a view to deterring others from committing such contraventions.[65]

   [64] Finance Sector Union of Australia v Commonwealth Bank of Australia (2005) 224 ALR 467 at 487 per Merkel J; [2005] FCA 1847 at para.72 per Merkel J; Commonwealth Bank of Australia & Anor v Finance Sector Union of Australia (2007) 157 FCR 329 at 364 per Branson J; [2007] FCAFC 18 at paras.191-192 per Branson J; ABCC at paras.32-33 per Gilmour J.

   [65] Leighton Contractors & Anor v CFMEU & Ors (2006) 164 IR 375 at 391 per Le Miere J; [2006] WASC 317 at para.74 per Le Miere J.

8. The mere publication, and dissemination, of the Reasons for Judgment in Crosthwaite (No. 4) is not, contrary to the submissions of National Jet, a reason not to impose a penalty on National Jet in this case.

9. The position with respect to specific deterrence is less clear cut. Specific deterrence might be said to be required because of:

   a)National Jet’s ongoing operations employing significant numbers of employees; and

   b)its specific possible future effect on National Jet in relation to the proper payment of employee entitlements, especially in circumstances where:

   i)the contraventions were deliberate in the sense that the acts which gave rise to the contraventions were knowingly committed, albeit under a misapprehension as to the correct interpretation of clause 27.3 of the AWAs; and

   ii)some of the contraventions had effect over a period of 16 months.

10. In the Court’s view specific deterrence does not however loom large in this case because:

    a)there is express contrition by National Jet amounting to acknowledgement of error and genuine regret;

    b)the pilots have long since been paid, and there has been no indication whatsoever of a recurrence of underpayment of pilots, or anyone else, at National Jet;

    c)the senior management team responsible for the decisions that led to the contraventions no longer occupy senior management positions at National Jet;

    d)there is a new management structure at National Jet, with dedicated human resources at both senior and intermediate levels, who appear to be undertaking external and internal training appropriate to their roles;

    e)AWAs are no longer available as an industrial instrument; and

    f)specific provisions have been included in the current industrial instrument applicable to the pilots to deal with the issue which gave rise to the contraventions.

11. The Court will therefore impose a meaningful penalty, appropriate to effect general deterrence, but having limited regard to specific deterrence.

Financial factors

1. The applicant submits that there should be no discount of the penalty on account of National Jet’s financial circumstances. There is no dispute that National Jet’s financial circumstances would not prevent it from being able to pay the penalty ultimately sought by the applicant in this matter (being $120,000).

The appropriate penalty for each contravention

1. In all of the circumstances the applicant submits that a penalty of approximately $15,000 per contravention (that is approximately 45% of the maximum penalty for each contravention) is appropriate.

2. The applicant submits that its suggested penalty of $15,000 would lead to an aggregate penalty of $495,000 for 33 contraventions, but that applying the totality principle, and taking into account all of the circumstances of the case, an appropriate total penalty to be imposed on National Jet is $120,000. It is fair to observe that the disparity between these figures is such as to suggest that one, or both of them, is wrong.

1. National Jet contends that:

   a)a penalty of $15,000 per contravention, particularly in circumstances where there are 33 such contraventions, is not appropriate but manifestly excessive and cannot be warranted by the objective circumstances of the contravention; and

   b)no penalty should be imposed at all in the circumstances of the contravention. National Jet says that the Court has a clear discretion as to whether to impose a penalty, and the discretion conferred ought to be exercised so as to impose no penalty in all of the circumstances of this case.

2. National Jet says that there is no need to impose a penalty because of the following circumstances:

   a)the Court found that the position of National Jet on the construction of clause 27.3 was arguable;[66]

   [66] Crosthwaite (No. 4) at para.155 per Lucev FM.

   b)National Jet acted on a genuine belief that it was entitled to withhold CPI increases;[67]

   [67] Crosthwaite (No. 4) at para.155 per Lucev FM.

   c)that although the contraventions occurred in 2006 and 2007, the contraventions did not occur over a relatively long period as National Jet made a single decision in June 2006 (with effect also in June 2007) not to pay the CPI increases;

   d)National Jet paid the disputed CPI increases, on a without prejudice basis, on 15 November 2007, and therefore since that time the pilots have not had any monies outstanding or owing to them;

   e)objectively, in the circumstances, the contravention does not amount to a serious contravention;

   f)given the endeavours by National Jet to provide greater clarity in its pay increase clauses in industrial instruments it is unlikely that the contravention will occur again. It cites evidence that the National Jet Systems Pty Ltd Pilots Collective Agreement 2007-2012 contains a clause, clause 25.4, dealing with remuneration which utilises clearer languages, as to the circumstances when a pilot is entitled to an increase in gross annual salary, providing that from 1 July in each year from 2008 to 2011 that pilots are entitled to further increases, based on the gross annual salary in the relevant schedule of the Collective Agreement, such increase “to reflect any positive annual movements in the March … [insert relevant year] All Groups Consumer Price Index (‘CPI’) for the preceding 12 month period as determined by the Australian Bureau of Statistics.”;[68]

   [68] Barrett Affidavit at para.17, and at Annexure SJB1.

   g)there is no evidence that National Jet has failed to adhere to its obligations to pay salary (including CPI increases) since 2007;

   h)given National Jet’s involvement in these proceedings it is unlikely that this type of contravention will occur again;

   i)there is no evidence of prior contravention of Commonwealth workplace relations legislation by National Jet;[69]

   j)there is no, or a limited, need for specific deterrence, given:

   i)the limited duration of the contraventions;

   ii)the lack of deliberateness of the contraventions;

   iii)the payment to the pilots on a without prejudice basis in circumstances where the construction adopted by National Jet was arguable;

   iv)the changes to the membership and structure of the human resources team managing National Jet;[70] and

   v)National Jet’s contrition for the contraventions;[71] and

   k)there is, by publication of the Reasons for Judgment in Crosthwaite (No. 4), sufficient general deterrence for reasons expressed above.[72]

   [69] Barrett Affidavit at para.28.

   [70] As to the latter see paras.80 and 85(c) above.

   [71] Barrett Affidavit at para.11.

   [72] See para.81 above.

3. National Jet also submits that in deciding whether to impose a penalty at all the Court ought to take account of the conduct of the Workplace Ombudsman in issuing a media release on 23 August 2007. The terms of that media release were as follows:

   Workplace Ombudsman in Perth Today As The Workplace Watchdog’s Prosecution Of Major Transport Operator National Jet Systems Resumes

   Australia’s Workplace Ombudsman today resumed its prosecution in Perth Federal Magistrate’s Court of major transport company National Jet Systems Pty Ltd over grave allegations it applied duress to two of its pilots to sign Australian Workplace Agreements (AWAs) and underpaid 33 pilots.

   Nicholas Wilson, Australia’s Workplace Ombudsman is in Perth today as part of a tour of metropolitan and regional Australia said “the community has a justifiable expectation that workers’ rights will be respected by their bosses; that they will not be subject to undue pressure to sign AWAs and that their bosses will pay them their lawful wages and entitlements.”

   National Jet Systems Pty Ltd provide contract aviation services including air charter flights and maintenance services to the Australian Government as well as other organisations including Qantas for who it supplies pilots, cabin crews and aircraft for Qantaslink flights around Australia.

   National Jet Systems have an application before the Federal Magistrate’s Court seeking leave of the court to allow them to ‘join’ two of the pilots to the legal action.

   “What this case shows is that anyone in the community can have their workplace rights and entitlements brought into question and that the Workplace Ombudsman is unremitting in our efforts to protect the workplace rights of all Australian workers,” Mr Wilson said.

   “We recognise that most employers meet their legal obligations to their workers. However, the Workplace Ombudsman will relentlessly and untiringly pursue bosses who do not comply with workplace law by not paying their workers the wages they are entitled to or seek to contravene their workers’ rights in other ways such as applying duress to sign AWAs.”

   Today’s court action also illustrates the workplace watchdog’s determination to inexorably prosecute employers who allegedly contravene workplace law. The Workplace Ombudsman’s initial court proceedings against National Jet Systems were initiated on behalf of three National Jet Systems pilots in May 2007 and was subsequently widened to include 33 pilots in June 2007.[73]

   [73] Affidavit of Michael James Kay, sworn 25 September 2007, Annexure MJK2 (Exhibit R10).

4. National Jet argued that the Media Release was harmful to it in that it strongly presumed that National Jet had engaged in unlawful conduct by applying duress to its pilots, and that the press release sought to publicly disparage and shame National Jet.[74] This occurred at the same time as the matter was pending before the Court and in advance of the Court determining the issue, and in circumstances where the Court ultimately concluded that no duress was applied.[75] National Jet submit that the Workplace Ombudsman was obliged, due to the operation of the legal services direction issued pursuant to s.55ZF of the Judiciary Act 1903 (Cth)[76] to act fairly in connection with the proceedings.

   [74] Kay Affidavit, Annexure MJK2.

   [75] Crosthwaite (No. 4) at paras.196-200 and 201(b) per Lucev FM.

   [76] “Judiciary Act”.

5. National Jet submits that the applicant has a duty in the conduct of the proceedings, as does the office which she represents, namely the Office of the Workplace Ombudsman, as representatives of the Crown, to act fairly,[77] and that that includes:

   a)the obligation of acting with fairness and detachment;[78]

   b)the obligation of adhering to standards of fair dealing;[79]

   c)the obligation to ascertain the law and apply it;[80] and

   d)the concomitant obligation not to prejudge the outcome in the public arena.

   [77] Citing Melbourne Steamship Co Ltd v Moorehead (1912) 15 CLR 333 at 342 per Griffith CJ; See also the Legal Services direction.

   [78] Citing Morley & Ors v Australian Securities and Investments Commission (2010) 247 FLR 140 at 168 per Spigelman CJ, Beazley and Giles JJ; [2010] NSWCA 331 at paras.707 and 710 per Spigelman CJ, Beazley and Giles JJ.

   [79] Citing Scott v Handley (1999) 58 ALD 373 at 382 per Spender, Finn, Weinberg JJ; [1999] FCA 404 at para.39 per Spender, Finn, Weinberg JJ [check which judge/s]; Mahenthirarasa v State Rail Authority of New South Wales (No. 2) (2008) 72 NSWLR 273 at 278 per Basten JA (with whom Giles and Bell JJA agreed); [2008] NSWCA 201 at para.18 per Basten JA (with whom Giles and Bell JJA agreed) (“Mahenthirarasa”).

   [80] Citing P&C Cantarella Pty Ltd v Egg Marketing Board (NSW) [1973] 2 NSWLR 366 at 388 per Mahoney J; Mahenthirarasa NSWLR at 278 per Basten JA (with whom Giles and Bell JJA agreed); NSWCA at para.16 per Basten JA (with whom Giles and Bell JJA agreed).

6. National Jet submits that by issuing the Media Release the Workplace Ombudsman failed to conduct itself in accordance with the duty to act fairly. It further submits that in the general absence of the ability to award costs against the applicant,[81] the Court ought to enforce attention to the duties required of a model litigant by not imposing any penalty in the present case, and that in any event, when the conduct of the Workplace Ombudsman in issuing the Media Release is considered with the other factors relied upon by National Jet,[82] it should leave the Court to reach the view that no penalty should be imposed.

   [81] Save as outlined in s.824(2) of the WR Act.

   [82] See para.91 above.

7. The Court agrees with the tenor of the submissions made by National Jet. The Media Release is not couched in neutral terms, nor does it seek to simply disseminate information. Rather it juxtaposes words – “workers” and “bosses” – in a way redolent with conflict,[83] and uses colourful phrases such as “inexorably prosecute”. Although the Media Release is arguably outside the scope of these proceedings its publication in such terms seems hardly to be the act of a model litigant. But these are matters about which the Court can do nothing, for:

   a)“[t]he issue of non-compliance with a Legal Services Direction may not be raised in any proceeding (whether in a court, …) except by, or on behalf of, the Commonwealth”;[84] and

   b)“[c]ompliance with a Legal Services Direction is not enforceable except by, or upon the application of, the Attorney-General.”[85]

   [83] “The bosses are fighting for their very existence, and no method is too dirty for them to use against the workers” in “More Foul Tactics Exposes” The Worker, 19 July 1923, page 6.

   [84] Judiciary Act, s.55ZG(3).

   [85] Judiciary Act, s.55ZG(2).

8. It is evident that non-compliance with the Legal Services Direction requiring the Commonwealth and its various emanations to act as a model litigant is not a matter for this Court, unless the relevant matter is:

   a)raised by the Commonwealth; or

   b)sought to be enforced by the Attorney-General,

   neither of which occurred here.

9. Even if the matter was one within the purview of the Court there was no sufficient evidence about either the deterrent or deleterious effects of the publication of the Media Release on National Jet such as to enable the Court to make any findings thereon.

10. In the Court’s view the contraventions in this case are not in the most serious category of contravention, and they would initially fall within the low to low-middle range of penalties. Arguably, that would mean a range of between 10% to 30% of the maximum penalty.

11. National Jet is however entitled to a reduction in penalty on the basis that it is a first time contravener of Commonwealth workplace relations law. Further, the contraventions arise from a single course of conduct resulting in multiple contraventions of the same type, and thus the fact that there are 33 contraventions does not mean that the overall effect of the contraventions is 33 times as serious as it would be if there was a single contravention. That said, there is the additional difficulty in this case that some of the contraventions fall at the very minor end of the scale in terms of underpayment, whilst others are more significant.

    
    

    In that regard at least the Court has taken the view that there ought to be a differentiation in any penalty imposed by reason of the quantum of underpayment. National Jet is also entitled to some reduction of penalty for the relatively significant co-operation with the applicant during the litigation process. Having regard to the factors in reduction of penalty the Court is satisfied that these contraventions sit at the low end of the scale and that penalties within a range of 5% to 15% are appropriate for the contraventions.

12. In all the circumstances, the Court has concluded that penalties ought to be imposed as follows:

    a)where the underpayment is less than $1000 the penalty will be 5% of the maximum penalty, that is $1650;

    b)where the underpayment is $1000 or more but less than $5000 the penalty will be 8% of the maximum penalty, that is $2640; and

    c)where the underpayment is $5000 or more the penalty will be 12% of the maximum penalty, that is $3960.

    That results in penalties as follows:

Name	Period	Amount	Penalties
J Adams	1/7/06 – 31/10/07	$4108.48	$2640
S Carter	1/7/06 – 31/10/07	$3899.04	$2640
J Coldhill	1/7/06 – 31/10/07	$3672.36	$2640
D Deckert	1/7/06 – 7/7/06	$59.81	$1650
S De Legh	1/7/06 – 31/10/07	$5963.24	$3960
R Dyson	1/7/06 – 4/8/07	$2676.78	$2640
C Edmunds	1/7/06 – 31/10/07	$4089.51	$2640
A Edwards	1/7/06 – 31/10/07	$3849.78	$2640
M Free	1/7/06 – 31/10/07	$5026.96	$3960
A Funnell	1/7/06 – 30/9/06	$733.95	$1650
L Galletti	1/7/06 – 18/7/06	$282.93	$1650
A Godfrey	1/7/06 – 31/10/07	$6861.67	$3960
A Hardy	1/7/06 – 31/10/07	$4556.96	$2640
R Holgate	1/7/06 – 31/10/07	$3650.38	$2640
G Inness	1/7/06 – 31/10/07	$4006.03	$2640
I Johnson	1/7/06 – 31/10/07	$6378.24	$3960
A King	1/7/06 – 15/12/06	$1102.54	$2640
L Kruger	1/7/06 – 15/12/06	$1307.56	$2640
M London	1/7/06 – 31/10/07	$6471.77	$3960
D Martin	1/7/06 – 31/10/07	$6085.05	$3960
D McKillop	1/7/06 – 31/10/07	$6094.72	$3960
S McLean	1/7/06 – 30/9/06	$611.38	$1650
C Milenkovic	1/7/06 – 31/10/07	$4076.29	$2640
M Millar	1/7/06 – 31/10/07	$6669.10	$3960
J Murdoch	1/7/06 – 19/10/06	$1337.73	$2640
R Park	1/7/06 – 31/10/07	$7337.80	$3960
V Rayner	1/7/06 – 31/10/07	$6582.92	$3960
P Saario	1/7/06 – 11/9/06	$556.21	$1650
N Schmidt	1/7/06 – 28/9/06	$627.54	$1650
J Speed	1/7/06 – 31/10/07	$6307.06	$3960
R Stevens	1/7/06 – 1/6/07	$2241.10	$2640
B Stevenson	1/7/06 – 25/1/07	$880.20	$1650
G Whitbread	1/7/06 – 31/10/07	$5318.36	$3960

1. The total of the penalties for the 33 contraventions is $96,030.

2. In the circumstances the Court will make declarations[86] and orders to reflect the penalties imposed with the orders being generally in the following terms:

   That the respondent contravened clause 27.3 of each Australian Workplace Agreement between the respondent and each employee listed hereunder, by underpaying each employee in the amount and for the period listed hereunder, and that under s.719(1) of the Workplace Relations Act, 1996 (Cth), the respondent pay the penalty listed hereunder:

   (a) [employee name], underpayment of [amount] for the period [insert period], a penalty of [insert amount].

   repeated for each of the contraventions in each of the two applications, PEG 109 of 2007 and PEG 122 of 2007.

   [86] As to which see para.108 below.

3. In relation to the totality principle the Court has considered, as a final check, whether, the individual penalties, and the aggregate of those penalties, is unjust or inappropriate or excessive. The Court does not consider them to be so. The individual penalties have been tailored to have regard to all the circumstances, but particularly the range of quantum of underpayment for the contraventions. The total of the penalties is significant, but not excessive, when regard is had to the number of contraventions, some of which occurred over a long period of time, and the fact that the contraventions relate to a fundamental issue – underpayment of earnings under an industrial instrument. In all of the circumstances, the Court does not consider the totality principle requires any reduction in penalties.

Should there be declaratory relief in addition to the imposition of penalties?

1. The applicant seeks both the imposition of a penalty and declaratory relief. The applicant says that declaratory relief is appropriate to:

   a)emphasise that National Jet’s conduct was in contravention of Commonwealth workplace relations law; and

   b)generally, the public interest in regulatory proceedings, so as to recognise the seriousness of the contraventions and explain the basis for the imposition of pecuniary penalties and other relief.[87]

   [87] Citing Hadgkiss v Aldin & Ors (2007) 164 FCR 394 at 415 per Gilmour J; [2007] FCA 2068 at paras.114-116 per Gilmour J; CEPU v QR Ltd (2010) 198 IR 382 at 424-425 per Logan J; [2010] FCA 591 at para.154 per Logan J.

2. The applicant therefore requests that the Court make a declaration in the following terms:

   The respondent breached clause 27.3 of the Australian Workplace Agreement between the respondent and each of its employees listed in Schedule A [reproducing the list of employees attached as Schedule 1 to the Applicants Further Amended Points of Claim] by failing to pay on due date a 3% salary increase from 1 July 2006 to each of the employees listed in Schedule A and breached clause 27.3 of the Australian Workplace Agreement between the respondent and each of its employees listed in Schedule B [being the list of employees attached as Schedule 2 to the Applicants Further Amended Points of Claim] by failing to pay on due date a 2.4% salary increase from 1 July 2007 to each of the employees listed in Schedule B, resulting in a total underpayment of $123,423.45.

3. National Jet does not oppose the making of a declaration if the Court accepts its submissions that no penalty, or a nominal penalty should be imposed. However, it says that if the Court was minded to impose a substantive penalty there is no need to make a declaration as it would be a mere signpost to the imposition of a penalty.[88]

   [88] Citing, by way of analogy, Reynolds v Southcorp Wines Pty Ltd & Anor (2002) 122 FCR 301 at 307 per Hely J; [2002] FCA 712 at para.30 per Hely J.

4. In a case such as this the Court considers it appropriate to make declarations. Both the liability and these penalty Reasons for Judgment are lengthy, and not easily digested, and it is therefore in the public interest to make declarations which will help inform others about the nature of the contraventions, but also about obligations to comply with statutory minimum imposed under relevant laws, and to act as a warning of the consequences of a failure to meet those obligations. The declarations must convey the gist of the contravening conduct, setting out how and why the conduct contravened the relevant laws, both accurately and concisely, and can be used to mark the Court’s disapproval of the contravening conduct.[89]

   [89] Australian Competition an d Consumer Commission v Dataline.Net.Au Pty Ltd (2006) 236 ALR 665 at 680-683 per Kiefel J; [2006] FCA 1427 at paras.54-59 and 63-66 per Kiefel J; Australian Competition and Consumer Commission v Yellow Page Marketing BV & Anor (No. 2) [2011] FCA 352 at paras.66-69 per Gordon J.

5. The form of the proposed declaration and order combined will therefore be as set out above.[90]

   [90] See para.103 above.

Costs

1. National Jet seeks the costs of the hearing on 15 and 16 October 2007, which were reserved, as well as the costs thrown away by the adjournment of that hearing. National Jet submits that the basis for the adjournment was that the evidence sought to be tendered and relied upon by the applicant did not relate to the particularised case and the subsequent application to amend the particulars to the claim.[91] National Jet submits that the Court concluded effectively that the failure of the applicant to particularise the case sought to be agitated at trial, in circumstances where the applicant had been specific in the particularisation in the pleading and had not raised such a case in the particularisation, necessitated the adjournment of the hearing. National Jet submits that this failure, particularly in light of the evidence filed and the subsequent act of applying to amend the particulars, constituted an unreasonable act or omission justifying a costs order under s.824(2) of the WR Act.[92]

   [91] Crosthwaite v National Jet Systems Pty Ltd (No. 2) [2007] FMCA 1773 at paras.1, 3 and 15 per Lucev FM.

   [92] Citing Dowling v Fairfax Media Publications Pty Ltd (No. 2) [2010] FCAFC 28 (“Dowling (No. 2)”).

1. In Crosthwaite (No. 2) there was no dispute that the additional affidavit evidence of Mr King, which had not been particularised in the Points of Claim, was ultimately relevant to a claim of duress under s.400(5) of the WR Act, but not to the claim of duress as then pleaded.[93] The objections to Mr King’s evidence that were made by National Jet would, if successful, have resulted in evidence relevant to a claim of duress not being put before the Court because of a lack of particularisation in the Points of Claim.[94] It is relevant to note that National Jet had an opportunity to put on evidence in reply to Mr King’s affidavit before the hearing, but because:

   a)it had determined to meet only the case as particularised in the Points of Claim; and

   b)of a crowded interlocutory timetable leading up the commencement of the hearing,

   it did not do so.[95]

   [93] Crosthwaite (No. 2) at paras.2-5 per Lucev FM.

   [94] Crosthwaite (No. 2) at para.14 per Lucev FM.

   [95] Crosthwaite (No. 2) at para.8 per Lucev FM.

2. The Court in determining to adjourn the hearing had to take into account the interests of justice, and it determined that the interests of justice would best be served by hearing the claims of duress as revealed in Mr King’s evidence, but that they ought to be properly put and particularised so as to enable National Jet to respond and put on any necessary additional evidence.[96]

   [96] Crosthwaite (No. 2) at para.14 per Lucev FM.

3. The applicant’s actions did not constitute an unreasonable act or omission as contemplated by s.824(2) of the WR Act. Rather, it was conduct in the course of litigation designed to boost a claim of duress. It was not conduct in support of an unsupportable claim, notwithstanding that the claim was ultimately dismissed.[97] The fact that the applicant did not conduct the litigation in the most efficient way does not mean that there has been an unreasonable act or omission such as to overcome the usual rule as to no costs in workplace relations matters under the WR Act.[98]

   [97] Crosthwaite (No. 4) IR at 229 per Lucev FM; FMCA at paras.200 and 201(b) per Lucev FM.

   [98] Construction, Forestry, Mining and Energy Union & Ors v Clarke (2008) 170 FCR 574 at 582 per Tamberlin, Gyles and Gilmour JJ; [2008] FCAFC 143 at paras.28-29 per Tamberlin, Gyles and Gilmour JJ.

4. National Jet sought to rely upon Dowling (No. 2), but the circumstances of that case, where there was a failure to file and serve appropriate appeal papers by  a self-represented litigant making what the Full Court of the Federal Court considered to be an entirely hopeless case, are so removed from the present circumstances as to warrant no further consideration.

5. In the circumstances, the respondent’s costs application must be dismissed, and there will be an order accordingly.

Conclusion and orders

1. For the reasons set out above the Court has concluded that:

   a)there are 33 separate contraventions by National Jet of 33 separate AWAs;

   b)National Jet must pay a penalty with respect to each contravention;

   c)it is appropriate to make declarations and orders to give effect to the conclusions in (a) and (b) above;

   d)there should be no order as to the costs of, or thrown away by, the adjournment of the hearing on 15 and 16 October 2007.

2. There will also be an order dismissing the application with respect to alleged duress against Mr King and Mr Kruger by National Jet, in accordance with the Court’s findings in Crosthwaite (No. 4).[99]

   [99] Crosthwaite (No. 4) IR at 229 per Lucev FM; FMCA at paras.200 and 201(b) per Lucev FM.

I certify that the preceding one hundred and seventeen (117) paragraphs are a true copy of the reasons for judgment of Lucev FM

Date:  9 December 2011