Director, Fair Work Building Industry Inspectorate v Devine Constructions Pty Ltd

FEDERAL CIRCUIT COURT OF AUSTRALIA

DIRECTOR, FAIR WORK BUILDING INDUSTRY INSPECTORATE v DEVINE CONSTRUCTIONS PTY LTD & ORS

[2019] FCCA 1394

Catchwords:
INDUSTRIAL LAW – Application for the imposition of pecuniary penalties – whether principal under a contract for services took adverse action against contractor – whether adverse action taken because contractor did not have an enterprise agreement that covered CFMEU – whether principal discriminated against contractor because contractor did not have an enterprise agreement that covered CFMEU.

Legislation:

Fair Work Act 2009 (Cth), ss.340, 340(1), 342, 342(1), 354, 354(1)(a)(iii), 550, 550(1), 361

Workplace Relations Act 1996 (Cth), ss.327, 340, 340(2), 341, 342(1), 344, 418(e), Div 5A, Pt 8
Workplace Relations Regulations 2006 (Cth), regs.8.13(1), 8.13(2), 8.13(5)

BHP Coal Pty Ltd v Construction, Forestry, Mining and Energy Union (2014) 253 CLR 243
Board of Bendigo Regional Institute of Technical and Further Education v Barclay [No.1] (2012) 2012 CLR 500
National Tertiary Education Union v Royal Melbourne Institute of Technology (2013) 234 IR 139
Shop Distributive and Allied Employees Association v Karellas Investments Pty Ltd (2008) 166 FCR 562
Tsilibakis v Transfield Services (Australia) Pty Ltd [2015] FCA 740
Yorke v Lucas (1985) 158 CLR 661

Applicant:

DIRECTOR, FAIR WORK BUILKDING INDUSTRY INSPECTORATE

First Respondent:

DEVINE CONSTRUCTIONS PTY LTD

Second Respondent:

MICHAEL TUCKER

Third Respondent:

ANDREW BLORE

Fourth Respondent:

WAYNE SENGELMAN

File Number:

BRG 773 of 2015

Judgment of:

Judge Jarrett

Hearing date:

14 June 2016

Date of Last Submission:

14 June 2016

Delivered at:

Brisbane

Delivered on:

24 May 2019

REPRESENTATION

Counsel for the Applicant:

Mr Duffy QC with Mr Mackie

Solicitors for the Applicant:

Clayton Utz

Counsel for the Respondents:

Mr Murdoch QC

Solicitors for the Respondents:

ClarkeKann Lawyers

ORDERS

Within 14 days of today, the parties bring in minutes of orders, including directions for the determination of penalty, upon which they agree to give effect to these reasons;
Otherwise the application be adjourned to a date to be fixed for the making or orders consistent with these reasons and in relation to the issues of penalty.

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT BRISBANE

BRG 773 of 2015

DIRECTOR, FAIR WORK BUILKDING INDUSTRY INSPECTORATE

Applicant

And

DEVINE CONSTRUCTIONS LIMITED

First Respondent

MICHAEL TUCKER

Second Respondent

ANDREW BLORE

Third Respondent

WAYNE SENGELMAN

Fourth Respondent

REASONS FOR JUDGMENT

A person must not take adverse action against another person because that other person has a workplace right or has not exercised a workplace right: s.340(1) of the Fair Work Act 2009 (Cth).
Further, a person must not discriminate against an employer because employees of the employer are covered by an enterprise agreement that does not cover an employee organisation or a particular employee organisation: s.354(1)(a)(iii) of the Fair Work Act.
In this case, the applicant alleges that the first respondent took adverse action against an employer called Craig’s Engineering Pty Ltd because:
a)Craig’s Engineering had exercised a workplace right to have an enterprise agreement with its employees that did not cover the Construction, Forestry, Mining and Energy Union of Employees; and
b)Craig’s Engineering had an enterprise agreement with its employees that did not cover the CFMEU.
The adverse action alleged to have been taken by the first respondent against Craig’s Engineering was:
a)preventing Craig’s Engineering from carrying out work it was contracted to undertake for the first respondent, cast in these proceedings as the failure of the first respondent to accept Craig’s Engineering’s offer of services in respect of a particular subcontract for construction related work described in the pleadings, evidence and submissions as the Bracing and Waler Works; and
b)refusing to engage Craig’s Engineering for the purpose of construction related work described in the pleadings, evidence and submissions as the Structural Steel Works.
The applicant seeks declarations of contraventions of the Fair Work Act 2009 (Cth) by each of the respondents and the imposition of pecuniary penalties against each of them. The application is opposed by all respondents.
The facts upon which the applicant relies to prove its case unfolded at a civil construction site on which the first respondent was the head contractor and described in the evidence as the Double One 3 Apartments, 113 Commercial Road, Teneriffe, Brisbane.
The second and third respondents are alleged to have been involved in the first respondent’s contravention of the Fair Work Act for the purposes of s.550(1) of the Act, in respect of the contravention alleged to have arisen in connection with the Bracing and Waler Works.
The fourth respondent is alleged to have been involved in the first respondent’s contravention of the Fair Work Act for the purposes of s.550(1) of the Act, in respect of the contravention alleged to have arisen in connection with the Structural Steel Works.
Evidence in chief was given by way of affidavit. The applicant relied upon affidavits of Jamie Lynch filed on 28 January, 2016 and 9 November, 2016, Andrew Rainbow and Sharon Wolff both filed on 9 November, 2015, and Elizabeth Rakitovszky filed on 15 June, 2016.
Mr Lynch and Mr Rainbow were cross-examined. Ms Wolff and Ms Rakitovszky were employees of the applicant at the relevant times of affirming their affidavits. Their affidavits were in relation to the production of relevant documents. They were not required for cross-examination.
The respondents rely upon affidavits of the second, third and fourth respondents each filed on 14 December, 2015, 26 May, 2016 and 9 June, 2016, Allana Agnew filed on 26 May, 2016, and Eamonn Cremin filed on 14 December, 2015.
Each of the second, third and fourth respondents, and Mr Cremin were cross-examined. Mr Harin Paw was also called to give oral evidence by the respondents. Ms Agnew’s affidavit dealt with a formal matter and she was not cross-examined.

Background

The facts within this section of these reasons are uncontroversial. They are the subject of admissions in the pleadings and are otherwise common ground having regard to the evidence given by the witnesses called by each of the parties.
During parts of 2013 and 2014 the first respondent was responsible as head contractor for the Double One 3 Apartments Project.
The second respondent, Mr Michael Tucker was at all relevant times an employee of the first respondent and was engaged in the position of General Manager. The third respondent, Mr Andrew Blore was at all relevant times an employee of the first respondent and was a contracts administrator. The fourth respondent, Mr Wayne Sengelman was at all relevant times also an employee of the first respondent and was a project manager. There is no dispute that each gentleman was at all times acting within the scope of his actual or apparent authority.
Craig’s Engineering Pty Ltd is a company that entered into contracts for services to provide building and construction work such as that in issue in this case. Mr Jamie Lynch was, and continues to be, a project manager employed by Craig’s Engineering. Mr Andrew Rainbow was also a project manager employed by Craig’s Engineering.
In either March or April, 2013 the first respondent entered into a contract with Craig’s Engineering whereby Craig’s Engineering would perform the Bracing and Waler Works on the Double One 3 Apartments Project. The work was undertaken by Craig’s Engineering between 9 April and 6 August, 2013.
The parties agree that between 23 and 25 July, 2013 Mr Tucker knew that the CFMEU did not want Craig’s Engineering to perform the Bracing and Waler Works as the first respondent and Craig’s Engineering had agreed.
Further, and quite separately from the Bracing and Waler Works, on or about 11 October, 2013 Mr Lachlan Vigna, a contracts administrator working for the first respondent sent a message to Craig’s Engineering inviting Craig’s Engineering to tender for work described as the Structural Steel Works which was to be carried out at the Double One 3 Apartments Project. In response, on about 23 October, 2013 Mr Lynch sent a tender for the Structural Steel Works to the first respondent. Mr Lynch subsequently met with Mr Vigna and Mr Blore to discuss the tender. There was also a telephone discussion in January, 2014 between Mr Lynch and Mr Blore in which the tender was further discussed.
The Bracing and Waler Works were undertaken between about 9 April, 2013 and 6 August, 2013. The parties agree that during that period the relationship between the first respondent and Craig’s Engineering was that of a principal and independent contractor pursuant to a contract for services, within the terms of s.342(1) item 3 of the Fair Work Act.
On about 22 or 23 January, 2014 Mr Blore and two other employees of the first respondent recommended to Mr Tucker, that the Structural Steel Works be awarded to a contractor other than Craig’s Engineering. Then, on 23 January, 2014 Mr Tucker decided, on behalf of the first respondent, to award the Structural Steel Works contract to that other contractor.
The parties agree that during the period 11 October, 2013 to 23 January, 2014 the relationship between the first respondent and Craig’s Engineering was that of a principal proposing to enter into a contract for services with an independent contractor, within the terms of s.342(1) item 4 of the Fair Work Act.

Craig’s Engineering Pty Ltd Employee Collective Agreement

The applicant’s case depends, in part, upon there being in place during 2013 and early 2014 an enterprise agreement between Craig’s Engineering and its employees that did not cover the CFMEU, or any other employee union. Whether such an agreement was in place is in issue between the parties.
The evidence demonstrates that an agreement called the Employee Collective Agreement For Craig’s Engineering Pty Ltd was lodged with the Workplace Authority Director on 21 November, 2007.
In 2007 an employer could make an agreement in writing with persons employed at the time in a single business (or part of a single business) of the employer whose employment would be subject to the agreement. By s.327 of the Workplace Relations Act 1996 (Cth) such an agreement was described as an employee collective agreement.
Exhibit 1 in these proceedings is a certified, but unexecuted copy of a document entitled “EMPLOYEE COLLECTIVE AGREEMENT FOR CRAIGS ENGINEERING PTY LTD”. The certification on exhibit 1 is in the following terms;
I James Strang, Assistant Director, Workplace Relations Advice and Pay Tools, of the Fair Work Ombudsman certify for the purposes of section 156 of the Evidence Act 1995 (Cth), that this is a true and correct copy of Craig’s Engineering Pty Ltd Employee Collective Agreement, ID Number WPA/Old ID: CAEN073880513 which the Fair Work Ombudsman retains custody of.
[Signed] 10/6/16
Another copy of the agreement appears as annexure ER-5 to the affidavit of Elizabeth Rakitovszky filed on 15 June, 2016. Page 11 of that document provides a section for both a “Representative of the Employees” and the “Employer” to sign. There are no signatures on that page, but the certification to which I have earlier referred appears on that document as well.
It is this agreement that the applicant relies upon to prove this aspect of its case. The respondents argue that the applicant has not sufficiently proved the existence or validity of the agreement and so the applicant’s case must fail.
The statutory regime that applied to the approval of employee collective agreements generally when the Craig’s Agreement was made is relevant. That approval scheme is found in the now repealed Workplace Relations Act 1996. Subsection 340(2) of that Act relevantly provided (emphasis in original):
(2) An employee collective agreement or union collective agreement is approved if:
(a) the employer has given all of the persons employed at the time whose employment will, or would but for the operation of an ITEA that has passed its nominal expiry date, be subject to the agreement a reasonable opportunity to decide whether they want to approve the agreement; and
(b) either:
(i) if the decision is made by a vote--a majority of those persons who cast a valid vote decide that they want to approve the agreement; or
(ii) otherwise--a majority of those persons decide that they want to approve the agreement.
Relevantly, s.342(1) of the Workplace Relations Act provided:
342 Employer must Lodge certain workplace agreements with the Workplace Authority Director
(1) If an …, an employee collective agreement … has been approved in accordance with section 340, the employer must lodge the agreement, in accordance with section 344, within 14 days after the approval.
Section 344 of the Workplace Relations Act provided:
(1) The employer in relation to a workplace agreement lodges the workplace agreement with the Workplace Authority Director if:
(a) the employer lodges a declaration under subsection (2); and
(b) the workplace agreement:
(i) in the case of an ITEA--meets the signature requirements of subsection 340(1); or
(ii) in the case of a collective agreement--meets the signature requirements of regulations made for the purposes of paragraph 418(e); and
(c) a copy of the signed agreement is annexed to the declaration.
(2) An employer lodges a declaration with the Workplace Authority Director if:
(a) the employer gives it to the Workplace Authority Director; and
(b) it meets the form requirements mentioned in subsection (3).
(3) The Workplace Authority Director may, by notice published in the Gazette, set out requirements for the form of a declaration for the purposes of paragraph (2)(b).
…
Subsection 418(e) of the Workplace Relations Act provided that the regulations that might be made pursuant to that Act might make provision in relation to the signing of workplace agreements by persons bound by those agreements, or representatives of those person. The Workplace Relations Regulations 2006 (Cth) make such provision. Subregulation 8.13(1) and (2), as it was in November, 2007 required an employer to obtain signatures of certain persons to a collective agreement and relevant details of those persons. However, failure to comply with those subregulations was not fatal. Paragraph (5) of reg.8.13 provides:
The validity of a workplace agreement is not affected by a failure to comply with subregulations (1) and (2).
The evidence demonstrates that the Craig’s Agreement was lodged with the Workplace Authority Director on 21 November, 2007. It was accompanied by a declaration made on 21 November, 2007 by Danielle Wilkinson, someone said to be “an agent appointed by the employer and given authority to make this declaration”. Ms Wilkinson was not called to give evidence, but her declaration was produced as part of the records held by the Fair Work Ombudsman in its role established under the Fair Work Act and as successor to the Workplace Authority Director. The declaration is in rather curious form, but nonetheless, there appears to be a clear declaration that all employees employed at the time whose employment will be subject to the employee collective agreement were given a reasonable opportunity to decide if they wanted to approve the agreement.
By reason of the Workplace Relations Act as it stood on 21 November, 2007 when the Craig’s Agreement was lodged, the agreement needed to pass the “Fairness Test” prescribed by Division 5A of Part 8 of the Act. When the Agreement was first lodged it was assessed as not passing that test. The Workplace Authority Director required changes to the agreement so that it passed that test.
Pursuant to an Employer Declaration Form and an Undertaking to vary a collective agreement in response to the Fairness Test signed by David Humphrey, a bargaining agent appointed by Craig’s Engineering, on 7 November, 2008 the agreement was varied. On 7 November, 2008 a letter was sent to Amy Wilson, Craig’s Engineering Pty Ltd. The letter does not include the name of an author, except that it provides at the end of the text “Workplace Authority Director”. The changes required were made by an agent of Craig’s Engineering giving an undertaking to the satisfaction of the Workplace Authority Director.
By correspondence dated 7 November, 2008 the Workplace Authority Director notified Craig’s Engineering that the Collective Agreement passed the Fairness Test. The correspondence provided:
Your Agreement as changed by your undertaking continues to operate from the date the undertaking was received by the Workplace Authority.
…
This notice relates only to whether or not a workplace agreement passes the Fairness Test. It does not verify that an agreement complies with the other requirements of the Workplace Relations Act 1996, for example that it does not contain prohibited content.
Both Mr Lynch and Mr Rainbow gave evidence in cross-examination that they were aware of the Craig’s Agreement. Mr Rainbow gave evidence that he had signed the agreement, probably as long ago as 2008 and that he was aware that other employees had signed the agreement. Mr Lynch gave evidence that when preparing tenders for work he had reference to the “EBA” rates of pay. That was a reference to the rates of pay for employees of Craig’s Engineering calculated by reference to current enterprise bargaining agreements to which the “Unions” were party or by which they were covered. However, according to the evidence the other terms of the collective agreement were liable to govern the employment of employees of Craig’s Engineering.
Neither copy of the Craig’s Agreement in evidence is signed. But that does not affect the validity of the agreement: reg.8.13(5) of the Workplace Regulations 2006.
The respondents submit that there is insufficient evidence to support a finding that there was a “Craig’s Engineering Pty Ltd Collective Agreement”, that it was approved in the way required by the Workplace Relations Act and even if there was, that there is insufficient evidence to support a finding that the agreement did not cover the CFMEU.
Senior counsel for the applicant argued that the evidence did establish that the Craig’s Agreement was approved and that it did not cover the CFMEU. First, he pointed to the declaration by Danielle Wilkinson that the relevant requirements of the Workplace Relations Act had been satisfied. Second, he argued by reference to s.341 of the Workplace Relations Act that it was a contravention of that Act for an employer to lodge with the Workplace Authority Director a workplace agreement that has not been approved in accordance with s.340 and I should presume that Craig’s Engineering acted in accordance with the law. Third, s.342(1) of the Act imposed an obligation on Craig’s Engineering to lodge the employee collective agreement in accordance with s.344 of the Act within 14 days after its approval and there was evidence that it had been lodged as required. Fourth, the documents produced by Ms Rakitovszky established that Craig’s Engineering lodged the employee collective agreement in accordance with s.344 of the Act. Fifth, Craig’s Engineering had acted in accordance with the agreement as the evidence of Mr Lynch and Mr Rainbow demonstrated. Finally, the fact that the agreement appeared unsigned did not affect its validity.
Further, I was taken by senior counsel for the applicant to a paragraph in Shop Distributive and Allied Employees Association v Karellas Investments Pty Ltd (2008) 166 FCR 562 where the Full Court of the Federal Court of Australia explained the operation of the provision in the Workplace relations Act that gave operative force to an employee collective agreement and the way in which non-compliance with s.340(2) of the Act (relating to approval) impacted upon the operation of the agreement:
25. Of greater current importance is the question of whether Karellas’ failure to satisfy the requirements of s 340(2)(a) (if it did so fail) meant that the employee collective agreement that it lodged with the Employment Advocate on 1 May 2007 had not been “made”. Plainly, one of the requirements that would enable it to be said that the agreement had been approved, for the purposes of the Act, would not have been met. Nonetheless, the agreement came into operation, in accordance with its terms, on and from the date of its lodgement. Section 347(2) so provided. By s 351, it was and remains binding on the employer and its relevant employees. If it is alleged that such an agreement has not been approved, a person who has standing under s 405 may seek certain forms of redress. One of them, as already noted, is the imposition, on the employer, of a civil penalty under s 341. Another is an order, under s 409(a) of the Act, declaring that the workplace agreement is void). Any such order operates prospectively: see s 412(1).
26. This review of the legislative provisions leads strongly to the conclusion that Parliament intended that an employee collective agreement will be treated as having been made and having come into operation notwithstanding a failure, on the part of the employer, to meet its obligations under s 340(2) of the Act. In this respect employee collective agreements may be contrasted with multiple business agreements, which according to s 347(3) of the Act, only come into operation if a necessary precondition has been satisfied.
…
28. Having regard to this legislative scheme, it cannot be said that for the purposes of the Act, an employee collective agreement has not been made on the basis that one of the preconditions for treating it as having been approved by the relevant employees has not been met. …
(my emphasis)

I am satisfied that there was an agreement made between Craig’s Engineering and its employees that was an employee collective agreement for the purposes of the Workplace Relations Act. I am satisfied on the balance of probabilities that the agreement was approved as required by s.340(2) of Act. I am satisfied that Craig’s Engineering was bound by the Craig’s Agreement as were all persons whose employment was subject to the agreement. I am satisfied that the Craig’s Agreement did not cover the CFMEU. It was an agreement that was in force as a consequence of the Fair Work Transitional Provisions and Consequential Amendments Act2009 (Cth). It was a transitional instrument which continued in existence despite the repeal of the Workplace Relations Act. It was continued in validity by the Fair Work Act (by schedule 3 and schedule 12).
I am satisfied that in 2013 and 2014 the employees of Craig’s Engineering were covered by the Craig’s Agreement, as was Craig’s Engineering. The collective agreement did not cover the CFMEU or the Builders Labourers’ Federation. It was in force as at the time the Bracing and Waler Works were undertaken by Craig’s Engineering and at the time Craig’s engineering tendered for the Structural Steel Works.

The Bracing and Waler Works

The third respondent gave evidence that in his role as contracts administrator for the project he was responsible for:
a)identifying the subcontractors that needed to be engaged to complete the project; and
b)overseeing the tendering processes required to engage subcontractors to perform the work.
The third respondent gave detailed evidence about the tendering process for projects generally. He said that he created a short list of around five to ten potential tenderers based on appropriate criteria and advice from and conversations with relevant persons. He then contacted the companies on the short list and invited them to submit a price by using a particular program called “Aconex”. After each tenderer submitted a price, he would consider each tender, with particular attention on determining whether they had properly understood the proposed work on the project. In the event of any apparent misunderstandings, he would contact the tenderers directly to discuss their tender.
The third respondent said that he recommended Craig’s Engineering for the Bracing and Waler Works because he was satisfied that it had the capacity to perform the Bracing and Waler Works and could perform those works most efficiently at the best price.
In April, 2013 the first respondent entered into a contract with Craig’s Engineering for the Bracing and Waler Works. A copy of the Bracing and Waler Works contract is contained in annexure SW-3 to Ms Sharon Wolff’s affidavit filed on 9 November, 2015. The contract is signed by the “subcontractor” but not by the relevant officer of the first respondent. That is because the copy of the contract in evidence appears as an attachment to an email sent by the third respondent to Mr Lynch on 27 March, 2013.
The contract relevantly provides (my emphasis):
The Subcontractor shall provide all necessary labour, materials, tools, plant, and equipment as required and inferred by the specification, drawings, Scope of Works, conditions of contract, the relevant Australian Standards, codes & statutory requirements and other documentation to complete trade related works to DoubleOne 3 Apartments Project.
…
4.0 TRADE SPECIFIC
…
4.2 The Subcontractor is to allow to procure, fabricate, deliver to site, and install the diaphragm wall bracing & walers, including all welding, grinding, bearing plates, “U-bolts” bearing seats, angles, side plates, bracing, angles, brackets, stiffeners, ties, flanges and similar as required to complete the works.
4.3 The Subcontractor has allowed for all cranage, labour, materials, plant and equipment, (including all access equipment), including the establishment or movement of plant, material and equipment as required to complete the installation at the diaphragm wall bracing & waler works.
4.4. The Subcontractor is to allow to remove and disposal of the diaphragm wall bracing & walers including the cutting off of exposed bolts to remove the hazard. Please note that the OVC lower crane will be operational at this point, so cranage for the removal works only will be by DVC.
4.5. The Subcontractor has allowed for all labour, materials, plant and equipment, (including all access equipment), including the establishment or movement of plant, material and equipment as required to complete the removal of the diaphragm wall bracing & waler works.
4.6. The Subcontractor shall allow for all levelling nuts, shims and packers under steel members, chemical, anchors and masonry fixings, all as required.
4.7 The Subcontractor shall allow for all grouting under or behind base plates walers and the like.
4.8 Allow to supply & install all HD bolts (chemsets or approved equivalent) as required and in accordance with the construction program.
4.9 Allow to supply all cast in elements & HD bolts (chemsets or approved equivalent) as required and in accordance with the construction program to be installed by others.
…
4.26 The Subcontractor acknowledges and accepts all site access and conditions.
…
It is in relation to these works that the applicant’s first contention that the first respondent contravened the Fair Work Act arises. The applicant pleads that on 25 July, 2013 the first respondent refused to make use of, or agree to make use of, the services of two employees of Craig’s Engineering that Craig’s Engineering had intended to, and had offered the first respondent to, perform under their contract because Craig’s Engineering:
a)had the benefit of an enterprise agreement that did not cover the CFMEU; and/or
b)had not exercised its workplace right to make an enterprise agreement that would or might cover the CFMEU; and/or
c)did not have an enterprise agreement that covered the CFMEU.
It also pleads that the first respondent discriminated against Craig’s Engineering by refusing to allow Craig’s Engineering workers to perform duties under the Bracing and Waler Works contract on 25 July, 2013 because the employees of Craig’s Engineering were not covered by an enterprise agreement that also covered the CFMEU.
In the afternoon of 9 July, 2013 the fourth respondent sent an email to an email address group titled “Devine Constructions” in the following terms:
For your information
Use the information below as a guide only, consult respective Unions or QMBA for the latest up to date information on Company status.
Regards
Wayne Sengelman
Below the excerpt of that email there is an email from “Darcy murdoch” to the fourth respondent also dated 9 July, 2013, which refers to an “updated list”. Below that email is an email from “Michelle Clare” to Darcy Murdoch also dated 9 July, 2013 which refers to an attached “EBA list”. The document attached to the email is titled “Signed EBA Companies As at 12 June 2013”. It contains several headings such as “Builders”, “Formworkers”, “Steelfixing” and so on. Under the headings are lists of what appear to be company names with dates next to those names. The evidence of the fourth respondent was that Michelle Clare was an industrial relations officer of the Builders Labourers Federation and that the Builders Labourers Federation became integrated in the CFMEU and later became known as the “Construction and General Division of the CFMEU”. According to the fourth respondent, that amalgamation did not occur until sometime after July, 2013. The second respondent said that the amalgamation did not occur until 2014. The evidence does establish when the BLF formed part of the CFMEU. But it does not matter.
In cross-examination the fourth respondent accepted that he sent the email dated 9 July and that the email was “a broadcast email to all employees of Devine Constructions”. He said that he had asked for the “EBA list” because he wanted a list of active subcontractors in the market at that time and not because it “is a list of those who have got agreements with the CFMEU”.
The second respondent says that he was a recipient to that email. In his affidavit filed on 14 December, 2015 relevantly he says that:
a)he appreciated the list contained information that had been compiled by someone in the CFMEU about whether that person thought the named company had an enterprise agreement (at paragraph 11.7);
b)he did not understand the email “to be any sort of instruction, direction or even advice from the Fourth Respondent to me to use or not use the particular contractors within that list”; and
c)he “did not give any employees of the First Respondent any direction or instruction about how to use the information in the EBA List Email”.
The applicant submits that the 9 July email “should be understood as an instruction to not engage contractors unless they had a CFMEU Agreement, to use the attached list from the CFMEU as a guide, but to confirm that its contents were up to date before relying upon it”. I accept that is a fair construction of the email. The text of the email is to that effect. It was an instruction to consult the list but, by implication at least, to ensure that the information in the list was accurate. Having regard to the content of the list, the reference to “Company Status” is, on balance, a reference to the status of the company having an EBA with the CFMEU.
At 5:52pm on 23 July, 2013 the fourth respondent sent an email to the second respondent in the following terms (emphasis and errors in original):
Hi Mike
Subject: 113 contractor not compliant
As discussed, please find below and attached details of Craigs Engineering’s contract sum, scope and schedule as follows:
• Owner   Craig Douglas 074 0408 206
• Contract sum           $60,000 ref: attached letter of intent
• Structure steel          supply & install - temp Braces and Walers
• Work Agreement      AWA
• Duration  approx 2 days - set out/rig/grout
• Due onsite                Saturday 27.7.13
• Other Project           currently working on Mater childrens hospital and previously worked on Hamilton Harbour H1 H2 H3
•
Brief State of play
Chad the BLF organizer has indicated craigs are “black” and the unions will do everything in their power to stop Craigs from coming onsite,
However, Chad will allow steel to be delivered by Craigs with alternate compliant labour to install.
Chad is also happy to discuss and resolve with Craigs.
Craig Douglas the owner, whom I spoke with today, will contact Chad tomorrow to discuss.
Spoken to Andrew Sutherland and he was going to contact Chad (BLF) and Craigs to resolve.
I certainly don’t want this to turn into a battle its not worth it, given the duration and sum of the works.
If the two parties can’t come to an amicably resolution for the two days of work, I will firstly consult you on the matter with the intent of approaching Craigs (off the record) to supply alternate labour and craneage to install. steel.
Regards,
Wayne Sengelman
Mr Andrew Rainbow was employed as a project manager by Craig’s Engineering for the relevant period of time. He says that his responsibilities included (at paragraph 5 of his affidavit):
a) Preparing and submitting quotes and estimations on behalf of CE;
b) Organising and overseeing work of CE employees;
c) Overseeing the installation of steel on projects; and
d) Preparation of safe work method statements for CE projects.
Mr Rainbow said that on 25 July, 2013 he attended the project site with another employee, Mr Jason Smith. The purpose of Mr Rainbow’s attendance, he says, was “to attend a site induction in order to carry out works associated with the Bracing and Walers Package”. Upon Mr Rainbow’s arrival, Mr Smith said to him words to the effect of “This guy Darcy over here said he is not going to let us on site”. The man referred to as “Darcy”, is, according to the evidence of the fourth respondent given in cross-examination, Darcy Murdoch, a labourer for the first respondent and the CFMEU union delegate on the project at the time. According to Mr Rainbow, he and Mr Murdoch had the following exchange (at paragraphs 11 and 12 of his affidavit):
Murdoch: You boys from Craig’s cannot come on site. If you try to work on site the whole job site will walk. Craig’s are not signed up to our EBA.
Rainbow: That’s not my problem, go see Wayne [Sengelman]. We are here to do our induction and drop off and mark out steel works.
Mr Rainbow and Mr Smith then entered the project site and commenced their work. Mr Rainbow said that he was told that the fourth respondent wished to speak with him. He and the fourth respondent had the following conversation (at paragraph 15 of his affidavit):
Sengelman: “What are we going to do about this? They are not going to let you on site to do any work because you don’t have a union EBA.”
[Rainbow]: “We have your hold down bolts here. We are ready to mark out. You’re pouring the slab tomorrow. It’s not my problem; it’s your problem.”
According to Mr Rainbow’s evidence, the fourth respondent left his office and about five minutes later returned. Mr Rainbow and the fourth respondent then had a further exchange to the following effect (at paragraph 17 of his affidavit):
Sengelman: “We can take your hold down bolts off but Jason is not allowed to touch them. He is not allowed to do any work here. You guys aren’t allowed to do any work here.”
[Rainbow]: “Everything is not going to be marked out ready for your pour then. Devine can do the marking out. I will be their foreman and Jason can be the delivery driver.”
Mr Rainbow said that he remained on site for the day and instructed a “Devine foreman how to mark out the site”, a job which “would normally have been undertaken by a CE employee”.
At 8:57am on 25 July, 2013 the fourth respondent sent an email to the second respondent in the following terms (emphasis and errors in original):
Mike
RE: Craigs non union EBA Agreement
Managed to get Craig’s Engineering and the Union (chad) talking yesterday.
Basically, as of this morning, I’m getting two conflicting outcomes from their discussions.
Craigs is saying all is okay and their working through the matter and
Chad is still adamant he will not let Craig’s onsite and that DVC/Craigs need to cross hire the onsite works.
Events this morning at 6.30am
Two Craigs employees turned up this morning for inductions and to set up cast ins bolts for our next slab pour (photo attached)
Chad wanted them gone or he was going to “pull the site” I managed to convince him that Craigs were here on a supervisory capacity only, and that steel fixers would be installing bolts.
Does the means justify the end
DVC could fight this battle alongside with Craigs and have the steel eventually installed, however DVC will have to live with the aftermath, not Craigs
My intent is to speak with Craig the owner of Craigs Eng to come to an arrangement wher he out sources plant and labour to install steel.
At 11:38am on 25 July, 2013 the second respondent sent an email to the fourth respondent in the following terms:
I have left a message for Closey to call me
At 2:24pm on 25 July, 2013 the fourth respondent sent an email to the second respondent in the following terms:
Update
Spoke with Craig Douglas from Craigs engineering in an attempt to go forward with this issue, long story short.
In light of what happened this morning with the unions and looking at his company’s future, Craig’s had a realization he needs to “sign” and so he is going to call Chad up again to resolve.
Craig still adamant Chad has gone back on his word, he believes Chad was fine with everything they both spoke and agreed with last night.
I suggested he has both CFMEU and BLF involved in the talks and agreements.
He agreed on my strategy, so I have contacted Andrew sutherland who will ring him and sort this arvo, hopefully.
Also reminded him on the “give and take” relationship we have with the project and the time/cost of the works.
At 2:34pm on 25 July, 2013 the second respondent sent an email to the fourth respondent in the following terms:
Mate keep this up and you will finish up in the diplomatic corp
Both the second respondent and fourth respondent were cross-examined about these emails. The fourth respondent could not remember many of the details although he accepted that he wrote those attributed to him. Despite his difficulty with recalling the emails and the circumstances in which he came to write them, in cross-examination the fourth respondent said or accepted that:
a)the reference to “contractor not compliant” in the subject lines of the emails is that the contractor did not have “an agreement with the CFMEU or BLF”;
b)he was told by someone else what “Chad” had said and he took seriously what had been communicated to him about what had been said by “Chad”;
c)it was Craig Douglas (the owner of Craig’s Engineering) that initially suggested that Craig’s Engineering would be approached “off the record to supply alternate labour and crainage to install steel” – it was not the idea of the fourth respondent;
d)he never spoke to Chad Bragdon about the matters discussed in the emails. The only “union bloke” that he spoke to was Andrew Sutherland. Later he accepted that he also spoke to Peter Close, “the assistant secretary of the CFMEU”;
e)the phrase in the email “I managed to convince him that Craigs were here on a supervisory capacity only …” was a “bad choice of words”; and
f)by the phrase “fight the battle” he meant to “take on the union who were wrongly insisting that Craig’s couldn’t work onsite because they didn’t have a union EBA agreement”.
The fourth respondent denied that he coached or coerced Craig’s Engineering in any way to enter into an EBA with the CFMEU or BLF.
In relation to the first email, the second respondent said at paragraph 18 of his affidavit filed on 14 December, 2015 that:
a)he did not have any clear understanding of the nature of the issue between Craig’s Engineering and the CFMEU. He thought that it could have been any one of a wide variety of issues that tend to arise between a union and a subcontractor. He specifically referred to “bad blood” between the two arising out of “industrial conflict” from a prior construction project, although did not suggest that it was the reason for the issues at the time; and
b)the fourth respondent had a sufficient delegation of authority to deal with the issue between Craig’s Engineering and the CFMEU without the need to obtain permission or direction from the second respondent and he did not discuss with the fourth respondent, or anyone else, the matters identified therein.
In respect of the second email, the second respondent said that he never gave the fourth respondent or anyone else any directions as to how to deal with Craig’s Engineering prior to receiving the email.
The second respondent said that he contacted Mr Peter Close after receiving the second email. He said that he contacted Mr Close to “try to avoid any industrial issues causing a delay to the Project because of any bad blood between the CFMEU and CE”. The substance of the conversation, the second respondent says, was to the effect of:
Tucker: “Closey, there seems to be an issue with Craig’s on 113, mate it is $60k worth of work and Craig’s have the contract for it, so let’s get on with it and leave it alone.”
Close: “Yeah ok. I’ll see”
The second respondent says that Mr Close did not confirm what the issue was between CFMEU and Craig’s Engineering. The second respondent says that he “did not know that the CFMEU did not want CE to perform work on the Project because CE did not have a CFMEU Agreement”. However, he accepted that in speaking to “Chad” and Mr Close he was communicating with both or either of the two unions.
In cross-examination the second respondent was taken to the emails dated 23 and 25 July, 2013. He was asked what he understood the emails to mean, particularly:
a)the subject “113 - non compliant contractor - Craigs Engineering” and “Subject: 113 contractor not compliant”; and
b)the sentence, “However, Chad will allow steel to be delivered by Craigs with alternate compliant labour to install”.

In response the second respondent said “There’s nothing in this that says that there’s an issue with an EBA, as far as I’m concerned”. His evidence was that he did not think about them at all. He said that he did not understand the subject lines to mean that Craig’s Engineering “did not have an EBA with the CFMEU”. He denied that that terminology was used within the first respondent’s business, albeit he qualified his response by saying “at that stage”. His evidence about his understanding of the emails was that they referred to complications that Craig’s Engineering had with the CFMEU (or BLF) whilst working on a project at the Mater Children’s Hospital. According to the second respondent, “A lot of subcontractors that had worked on that project were not recommended by the unions after that”. He said that the words “compliant labour” did not mean anything to him.
The second respondent seems to suggest that the emails were in response to a request from him that the fourth respondent “give me a brief summary of the contract as he sees it, meaning the price and everything else, what they were doing there”. He denied that the 23 July email identified that there was a “problem”. Instead he said that the email was “giving me a heads up on what the contract issue is” and that “there might be a problem at some stage”.
However, by the time of the 25 July emails, the second respondent accepts that there was “the making of a problem”. He accepted that he understood the text under the heading, “Does the means justify the end”, in the first 25 July email to mean that the first, second and fourth respondents “could do the right thing and fight the battle, but it will cost Devine more than it will cost Craig’s to do that”. The second respondent accepted that there was an alternative to fighting. The transcript reveals: (T64 line 39 – 44):
That’s right. You see that. And, in effect, is he not saying, “Rather than fighting this battle alongside with Craig’s, what about we roll over and I will convince Craig’s to do something different”?---You could take that in .....
Well, did you?---Reading it there, that would be one way of getting around the big issue. Yes.
In re-examination the second respondent said that he did “fight” the unions with Craig’s Engineering because he “phoned the unions up and said go away”.
In response to the fourth respondent saying in the second 25 July email that “Craig’s had a realization he needs to “sign” …” the second respondent accepted that he understood part of that to mean that “Mr Douglas realised that he was in a position where he had to go and get an EBA with the CFMEU”.
In respect of the statement, “I managed to convince him that Craigs were here on a supervisory capacity only …”, the second respondent said that the employees of Craig’s Engineering were “probably not” on site on 25 July in a supervisory capacity only.
The second respondent’s evidence was that no one informed him that there was no longer an issue regarding employees of Craig’s Engineering conducting work on the project site. He seemingly took no further action after leaving a message for Mr Close because people stopped reporting problems to him.
The second respondent conceded that he was aware that the CFMEU did not want Craig’s Engineering to perform work on the project site. Whilst the second and fourth respondent did not directly admit these matters, I am satisfied that the second and fourth respondents (and therefore the first respondent) knew:
a)that the CFMEU did not want Craig’s Engineering to perform work on the project site because Craig’s Engineering did not have a CFMEU agreement;
b)the fourth respondent told the CFMEU that Craig’s Engineering would not install bolts on the project site;
c)the fourth respondent informed the second respondent of the above matters by email on 23 and 25 July, 2013; and
d)on 25 July, 2013 the second respondent contacted Mr Close to discuss the CFMEU’s concerns regarding Craig’s Engineering performing work on the project site.
In cross-examination Mr Rainbow said that the workers on the project site on 25 July, 2013 “were marking out and installing the same day”. Senior counsel for the respondents cross-examined Mr Rainbow about the process of installing the hold down bolts. His evidence was that the bolts were required to be put in place before the slab of concrete was poured, thus securing the bolts. He gave the following evidence (T39 lines 35-47 and T40 lines 1-27):
You had a second discussion with Wayne Sengelman, didn’t you?---I spoke to him after that. Yes.
Yes. And the two of you had a problem, didn’t you?---We did.
And it was you who came up with the solution?---I did.
And the solution was a very practical one, wasn’t it?---Mmm.
And the solution was that Jason could drive the vehicle on the site and drop off the bolts?---Yes.
First stage. Jason could then go back to the Craig’s factory. Correct?---Yes.
And, presumably, he did productive work back there?---Yes.
And you remained on the site, and you showed the Devine personnel where the marks were to go on the diaphragm?---Yes.
So you spent the day there, and you directed the marking out?---Correct.
And that was a practical way that you proposed to get around the threat of a site walkout?---Correct.
And Wayne Sengelman agreed with your suggestion, and that’s how it happened?---Correct.
Now, what that meant was that the project wasn’t held up by a walkout?---Correct.
Correct?---Yes.
And it meant that Craig’s were able to deliver the bolts as they had intended?---Correct.
Craig’s were able to ensure that the placement of the bolts was marked out where Craig’s wanted them to be - - - ?---Yes.
- - - because you oversaw that?---Yes.
And Craig’s were able to ensure that the bolts were, therefore, in the position that they needed to be for when Craig’s came back to place the beams? --- Correct.
Mr Rainbow accepted that the job was completed, the job passed, and Craig’s Engineering was paid in full. He accepted that nothing that the first respondent did slowed down the progress of work performed by Craig’s Engineering. His evidence was that any obstruction to their work was because of the “union people”. The first respondent, Mr Rainbow accepted, had worked with him to enable the work to get done in light of the “hassles” from the union. The “union threat” was only made to Mr Rainbow on the one occasion – 25 July, 2013. Because of the solution that he proposed to the fourth respondent and later implemented, a “head-to-head conflict with the union that day” was avoided. In respect of the later days that employees of Craig’s Engineering attend the project site, Mr Rainbow said that there were no further hassles and the Craig’s Engineering employees could carry out the work they were required to perform.
The second respondent gave evidence that employees of Craig’s Engineering performed their duties under the contract on 25 July, 2013. He said that their duties involved the delivery of hold down bolts and “supervision of the marking out of the site and providing instructions while the Site was being marked out for the Bracing and Waler Works”. But those services were not the services that the first respondent had contracted Craig’s Engineering to perform (see clauses 4.8 and 4.9 of the subcontract set out above). They are the works and services that Mr Rainbow suggested could be performed by Craig’s Engineering together with the first respondent’s employees so as to avoid the “union people”.
The second respondent gave evidence that the project site was not ready for the installation of the hold down bolts in the morning of 25 July, 2013. He said that was because the slab was not poured until after 25 July and Craig’s Engineering’s “offer” on 25 July, 2013 to install the hold down bolts could not have been accepted by the first respondent. However, I cannot accept that evidence because the weight of the evidence is that the site was ready to be marked out and that is why Mr Rainbow and his off-sider were there. The bolts were to be positioned ready to take “the beams” before the concrete for the relevant slab was poured. That is consistent with the email sent by the fourth respondent at 8:57am on 25 July, 2013 which acknowledged that:
Two Craigs employees turned up this morning for inductions and to set up cast ins bolts for our next slab pour (photo attached)
On 30 July, 2013 Mr Rainbow received a telephone call from Mr Harin Paw. Mr Paw, at relevant times, was an employee of the first respondent engaged in the position of Project Engineer. Mr Rainbow said that he had the following conversation with Mr Paw (at paragraphs 21 and 23 of his affidavit):
Paw: “Devine are ready for Craig’s to come back and set the chem studs. Have you guys sorted out your EBA problem?”
[Rainbow]: “Craig [Douglas] is looking in it. Nothing has happened with it. You can’t just get one and go sign it. Your employees have to sign it; it has to be approved. You can’t just do it in a couple of days.”
The applicant suggests that in that conversation with Mr Rainbow, Mr Paw “inferred that CE would not be allowed to complete the works until CE had a CFMEU Agreement”. The applicant pleads that the second part of the following conversation refers to the progress of Craig Douglas’s dealings with the CFMEU (paragraph 23 of Mr Rainbow’s affidavit):
Paw: “Where is Craig with it?”
[Rainbow]: “I haven’t spoken to him about it. You will have to talk to him yourself … You will have to get Wayne to talk to Craig.”
Paw: “Alright then.”
I am satisfied that the earlier portion of that conversation, extracted above in these reasons (at paragraph 21 of Mr Rainbow’s affidavit), was in relation to Craig’s Engineering’s “EBA problem”.
Mr Rainbow said that “later on that day”, on 30 July, 2013 he had the following conversation with the fourth respondent (at paragraph 25 of his affidavit):
[Rainbow]: “Craig has sent an expression of interest to the CFMEU but we haven’t heard anything back. You can’t just instantly signed up to an EBA. We don’t know what rates they pay. What are the CFMEU/BLF rates for boilermakers? Because I’ve had a look at their EBA rates and they don’t have any rates for boilermakers. How can we have an EBA with them if they don’t have any rates for boilermakers? Go back and ask them what rates we are supposed to be paying.”
Sengelman: “Okay. I don’t know. I’ll find out.”
As previously mentioned, on 26 July, 2013 Mr Paw was forwarded the email chain between the fourth respondent and the second respondent dated 23 and 25 July, 2013. Mr Paw did not give any evidence in relation to this.
The respondents in their written submissions refer to several terms of the Bracing and Waler Works contract, as extracted above, and particularly emphasise the use of the phrase “as required” in several clauses to establish that “the services of CE under the Subcontract were to be performed as required by the First Respondent”. Further, they submit that it was not a term of the contract that the employees of Craig’s Engineering were to perform all work connected with the Bracing and Waler Works, with specific reference to the marking out of the site for subsequent installation of the hold down bolts.

Consideration – the bracing and waler works claims

The applicant submits that the Court should find that the first respondent took adverse action against and discriminated against Craig’s Engineering by refusing to accept its offer to deliver hold down bolts onto the site and then to mark out the steel works to prepare for installation of the hold bolts. The applicant pleads that neither Mr Rainbow nor Mr Smith performed the duties that Craig’s Engineering had intended them to perform.
The respondents’ argument is put in the alternative. Firstly, Craig’s Engineering did not offer services on 25 July, 2013. The services that the applicant contends were offered were provided for under the Bracing and Waler Works contract, which does not amount to an offer. Mr Rainbow and Mr Smith did nothing more and nothing less than they were obliged to do by their employer’s subcontract with the first respondent. Secondly, if the conduct of the Craig’s Engineering employees was tantamount to services offered by the independent contractor then there was no refusal because those employees performed the relevant services. The respondents submit that those services were:
a)to deliver the hold down bolts to the project site;
b)to oversee the delivery of the hold down bolts; and
c)to oversee employees of the first respondent to mark out the site for the later installation of the hold down bolts.
The applicant relies on three particular circumstances to support its contentions. First, the conversations involving Mr Andrew Rainbow, Mr Darcy Murdoch, and the fourth respondent, which purportedly demonstrate that Mr Murdoch and the fourth respondent refused to allow employees of Craig’s Engineering to work on the project site. Second, an email from the fourth respondent purportedly to employees of the first respondent “impliedly instructing them to ensure that subcontractors were covered by enterprise agreements to which the CFMEU was a party”. The respondents deny that the email constituted such an instruction and deny that the email was received by the recipients to it as such an instruction. Third, an email from the fourth respondent to the second respondent in which reference is made to Mr Chad Bragdon, “of the CFMEU”, who allegedly informed the fourth respondent that Craig’s Engineering “was not to perform any work on the Site because they did not have a CFMEU Agreement”.
The applicant claims that the respondents’ actions on that day caused two relevant impacts, namely:
a)that Craig’s was prohibited from performing the contract it had with the first respondent in the way in which it was intended to do; and
b)that the events of 25 July were considered in the subcontractor comparison document in relation to the structural works contract dealt with later in these reasons.
The applicant submits that the fourth respondent, Mr Sengelman, is liable under s.550 for this contravention.
The first issue to be addressed, I think, is whether the first respondent, through Mr Sengleman, took any adverse action against Craig’s Engineering. The respondents argue that he did not and so the applicant does not have the benefit of the operation of s.361 of the Fair Work Act. Notwithstanding that argument, if the respondents’ argument is correct, then no occasion for the application of s.361 of the Act arises because there has been no adverse action for the purposes of s.340 of the Act and the applicant’s case on this point would fail.
It is worth recalling the text of the relevant item in s.342 of the Fair Work Act which defines adverse action for the purposes of that Act. Stated in a direct way, and adding in references to the actors in these proceedings, the relevant text is:
Adverse action is taken by the first respondent against Craig’s Engineering, if the first respondent refuses to make use of services offered by Craig’s Engineering.
I accept that the services offered by Craig’s Engineering on 25 July, 2013 are set out in the evidence of Mr Rainbow. I am satisfied that Mr Rainbow and Mr Smith, as employees of Craig’s Engineering, presented to the project site on 25 July, 2013 ready to perform the services that their employer had contracted to perform for the first respondent. Their presentation for that purpose was clearly, in my view, an offer to perform the services that Craig’s Engineering had promised to perform under the subcontract. That they were services that Craig’s Engineering were otherwise contracted or obliged to perform is nothing to the point. The work they intended to do – deliver the hold down bolts to site and mark out the positions of the bolts ready for the concrete was work that Craig’s Engineering was contractually obliged to perform and they were on site offering services – namely the performance of the contract. So much appears from clauses 4.2 and 4.8 of schedule 3 to the Scope of Work for the Bracing and Waler Works contract. The marking out for the placement of the hold down bolts was an integral part of installing those bolts as required by clauses 4.2 and 4.8. The contrary was never suggested.
The respondents submit that it was not a term of the contract that employees of Craig’s Engineering would perform all work connected with the Bracing and Waler Works. They emphasise that the contract provided that the services of Craig’s Engineering were to be performed as required. On their case, Mr Rainbow and Mr Smith attended the project site on 25 July, 2013 to deliver the hold down bolts to the site and to mark out the site for the later installation of the bolts. They argue that the evidence does not demonstrate that the employees of Craig’s Engineering attended the site to install, or to offer to install, the hold down bolts and that the work which was done by the first respondent’s employees was work that Craig’s Engineering either did not have to perform, or it was not required to perform for the purposes of its subcontract.
However, there are difficulties with this argument. The phrase as required where it appears throughout the Scope of Work for the Bracing and Waler Works contract is, in my view, a reference to the provision of goods and services “as required and inferred by the specification, drawings, Scope of Works, conditions of contract, the relevant Australian Standards, codes & statutory requirements and other documentation to complete trade related works to DoubleOne 3 Apartments Project” as provided for in the subcontract. It was not a reference to the first respondent’s ad hoc requirements that might be made from time to time. The only relevant qualification upon the work to be undertaken by Craig’s Engineering was that it be undertaken “in accordance with the construction program” (see clauses 4.8 and 4.9 for example) and that it be necessary “to complete the works”. To read the phrase as required where it appears in the subcontract in the way in which the respondents contend is inconsistent with the context in which that phrase appears throughout the subcontract.
I am satisfied that Mr Sengleman refused to let the Craig’s Engineering employees perform the services that they offered to perform on behalf of Craig’s Engineering. Mr Rainbow’s unchallenged evidence that Mr Sengleman said to him, “We can take your hold down bolts off but Jason is not allowed to touch them. He is not allowed to do any work here. You guys aren’t allowed to do any work here.” establishes that the first respondent, through the fourth respondent’s actions, refused to make use of the services offered by Craig’s Engineering in accordance with its subcontract. It is no answer to this finding to say that it was the actions of the CFMEU or its delegate on site, Mr Murdoch, that prevented Craig’s Engineering from performing its work. The first respondent was in control of the site and it was Mr Sengleman who directed Mr Rainbow not to perform any work.
The respondents place reliance upon the fact that Mr Rainbow came up with and offered a solution to the problem which Mr Sengleman was happy to accept. The respondents submit that in the event that the Court was satisfied that the employees of Craig’s Engineering offered services on 25 July, 2013, there was nonetheless no refusal of those services because the employees of Craig’s Engineering did in fact perform the services, namely:
a)they delivered the hold down bolts to the site;
b)they oversaw the delivery of the hold down bolts onto the site; and
c)they oversaw the employees of the first respondent marking out the site for the later installation of the hold down bolts.
But none of that is to the point. Mr Rainbow’s solution was devised by him after the relevant adverse action was taken by Mr Sengleman against Craig’s Engineering. Craig’s Engineering did not contract to oversee the delivery of the hold down bolts to the site or to oversee the employees of the first respondent marking out the site for the later installation of the hold down bolts. In offering those solutions, Mr Rainbow was offering a solution to the impasse created by the first respondent and its requirement that Craig’s Engineering not perform any work on site. In that respect, the submissions of senior counsel for the applicant aptly summarised the position:
… the CFMEU were then threatening Devine’s to pull the site and Mr Sengelman was, in effect, standing there saying, “Well, you’ve got to come up with a solution.”

I find that when Mr Sengleman told Mr Rainbow and Mr Smith that “We can take your hold down bolts off but Jason is not allowed to touch them. He is not allowed to do any work here. You guys aren’t allowed to do any work here”, the first respondent took adverse action as defined in item 3(d) of the table to s.342(1) of the Fair Work Act.
The applicant must prove on the balance of probabilities that the first respondent took that action because of at least one of the reasons identified earlier. The submissions of senior counsel for the respondents were made on the unspoken basis that if the Court found that there was adverse action taken against Craig’s Engineering on 25 July, 2013, s.361 of the Act would be engaged and the onus would shift to the respondents to prove to the requisite standard the relevant adverse action was not taken for a proscribed reason.
That requires a consideration and determination about the reasons that motivated Mr Sengelman to give the direction that I have found he gave. The Court’s task is to identify the “operative and immediate reason for the taking adverse action”: Board of Bendigo Regional Institute of Technical and Further Education v Barclay [No.1] (2012) 2012 CLR 500 at [65], [103]-[104] and [140]; BHP Coal Pty Ltd v Construction, Forestry, Mining and Energy Union (2014) 253 CLR 243 at [19] per French CJ and Kiefel J and at [85] per Gageler J.
The respondents submit that Mr Sengleman’s refusal was not motivated by the reasons alleged by the applicant, namely that Craig’s Engineering:
a)was entitled to the benefit of the Craig’s Engineering Collective Agreement, which did not cover the CFMEU or the BLF; and
b)was able to initiate, or participate in, the process of creating an enterprise agreement that would or might cover the CFMEU but had not done so.
The respondents submit that the issue for determination is the reason or reasons that motivated the fourth respondent on 25 July, 2013 to act in the way that he did on that day. I accept that submission.
The evidence clearly establishes that the CFMEU or the BLF or both did not want Craig’s Engineering performing any work on site because there was no relevant EBA with either of those unions. I am also satisfied that the site delegate, Mr Murdoch, had threatened both Mr Rainbow and the first respondent (through amongst others Mr Sengleman) that “the site would be pulled” if Craig’s Engineering were permitted to perform any relevant work on the site.
The emails that were sent by Mr Sengleman on 25 and 26 July, 2013 make clear that Mr Sengleman knew that the reason why the CFMEU or the BLF objected to Craig’s Engineering performing work on the site was because it had no relevant agreement with either of those unions. I accept the applicant’s submission that both the fourth respondent and the second respondent knew what the Union was doing was wrong.
The respondents argue that although Mr Sengleman’s email of 25 July, 2013 identifies Craig’s Engineering as “black”, there is a “large area of uncertainty” about how Craig’s Engineering came to be “black”. Senior counsel suggested that it could have related to Craig Douglas’s dealings with the CFMEU around that time or what he termed a “legacy issue” carried over from work at the Mater Children’s Hospital. Whilst that is a possibility, I do not consider on the evidence that it is probable. That is especially so in light of the broadcast email sent by Mr Sengleman on 9 July, 2013 which specifically had a list of contractors with whom the CFMEU or the BLF had relevant agreements.
The respondents submit that even if there was a “ban” of employees of Craig’s Engineering from attending the project site, it was a ban imposed by a third party. However, I reject that submission. The words of Mr Sengleman’s statement to Mr Rainbow are clear. The direction was imposed by the first respondent albeit as a result of the threats of the CFMEU or the BLF and its delegate.
But I am not satisfied that the fourth respondent refused the offer of services of the employees of Craig’s Engineering because “Craig’s Engineering had its own agreement, which didn’t involve the CFMEU, and they did not have an EBA with the CFMEU”. The evidence establishes that the real reason for Mr Sengleman’s conduct was the threat made by the delegate to “pull the site”. The evidence does not establish that at the operative time on 25 July, 2013 Mr Sengleman gave the direction he did because of the absence of any relevant agreement between Craig’s Engineering and the CFMEU or the BLF. Rather, his motivation was to avoid the site being closed down by the Unions and the consequential chaos that would ensue. That was the real, substantial and operative reason for the direction given by Mr Sengleman.
The respondents emphasise the efforts they say they made to prevent further interference with the work to be performed by Craig’s Engineering including the second respondent’s phone call to Mr Close, the scheduling of work by Craig’s Engineering such that work would be performed on weekends where necessary when union personnel were less likely to interfere, and the attendance on site of Mr Paw on one occasion to minimise risk of interference. Those matters demonstrate that the existence of a relevant agreement between Craig’s Engineering and the relevant union was of no particular importance to the first respondent. What was important was keeping the Union happy such that it did not move to close down the project site.
Further, I accept the respondents’ submission that Mr Sengleman’s subsequent conduct is consistent with a conclusion that the operative reason for his direction to Mr Rainbow and Mr Smith was to keep the Union delegate from shutting down the site. Mr Sengleman assisted in resolving the problem caused by the Union delegate. The contents of the email dated 25 July, 2013 at 8:57am is consistent with that finding:
I managed to convince him that Craigs were here on a supervisory capacity only, and that steel fixers would be installing bolts.
…
My intent is to speak with Craig the owner of Craigs Eng to come to an arrangement wher he out sources plant and labour to install steel.
I accept the respondents’ submission that the substantial and operative reason for the fourth respondent’s actions on 25 July, 2013 was to overcome the conduct of the CFMEU and the impact of that conduct on the ability of Craig’s Engineering to perform its obligations under the subcontract. The workplace rights of Craig’s Engineering identified by the applicant were not a substantial or operative part of the fourth respondent’s reasoning. At best they are a surrounding circumstance.
The respondents submit that in any event, the fourth respondent had no knowledge or understanding of the meaning of the concepts underpinning the alleged reasons. It cannot be said, the respondents submit, the fourth respondent’s actions were motivated by reasons the fundamental notions about which he did not understand. He did not understand the concept of “coverage”. Therefore, the respondents argue, the fourth respondent’s actions were not motivated by the exercise of (or failure to exercise) a workplace right to have an enterprise agreement which did or did not cover the CFMEU.
As to the claim that the first respondent contravened s.354 of the Fair Work Act, the applicant’s case fails for the same reasons. The applicant claims that the first respondent contravened s.354 by discriminating against Craig’s Engineering by refusing to allow its workers to perform duties under the contract on 25 July, 2013 because Craig’s Engineering were not covered by an enterprise agreement that also covered the CFMEU. If Craig’s Engineering was covered by an enterprise agreement that also covered the CFMEU then the first respondent would not have prevented Craig’s Engineering’s workers from performing their full duties on 25 July, 2013. The applicant submits that the evidence which supports its claim under s.340 supports this claim.
However, I do not accept those submissions. Assuming that there was discrimination between Craig’s Engineering’s workers and other workers that discrimination did not happen because of the reasons identified by the applicant. It happened for the same reasons that Mr Sengleman directed the worker’s not to perform any work on the project site.
Senior counsel for the applicant submitted that the incident or incidents that occurred on 25 July, 2013 “resonated as a reason in relation to the steel contract”, to which I will come later in these reasons. In support of that submission, senior counsel referred to the comment associated with Craig’s Engineering on the subcontractor comparison spreadsheet, “Non-EBA – we already had union issues caused by Craigs when erecting bracing & walers earlier on in the project”. It was submitted that that comment can only be a reference to the incident that occurred on 25 July. However, those matters do not detract from the real reason why Mr Sengleman took the action that he did – it was because the Union delegate on site was going to “pull the site” if the Craig’s Engineering workers worked on the site.
In light of my findings about the alleged contraventions of ss.340 and 354 of the Fair Work Act arising out of the events of 25 July, 2013 Mr Sengleman cannot be said to have been involved in any contravention of the Act for the purposes of s.550.

The structural steel works tender

The second relevant package of work was termed the “structural steel works”. On its face the structural steel works was a more complicated package of work because, as the third respondent puts it (paragraph 19 of his affidavit filed on 14 December, 2015):
a)it involved a much larger scope of works;
b)it required the subcontractor to perform different tasks in different areas; and
c)there were significant logistical issues associated with moving and installing the steel around the various work areas.
The third respondent was responsible for the tender process and preparing documentation including an “Authority to Let” and a “Subcontractor Comparison” spreadsheet. The third respondent, Mr Cremin and Mr Paw co-signed the Authority to Let before providing it to the second respondent. It acted as a brief as well as their recommendation. The second respondent was ultimately responsible for making the decision about to whom the structural steel works tender would be awarded.
The third respondent gave evidence about the method of the tender process used for the structural steel works package. A few short of a dozen companies were invited to tender for the structural steel works package. Craig’s Engineering was one of the seven companies that submitted a tender. The third respondent said that each of the initial tenderers provided quotes which were “all far too high in the context of the budgeted amount” and each of those tenderers was contacted to obtain further information about their respective tenders.
On 11 October, 2013 Mr Lachlan Vigna sent a message to Craig’s Engineering via the Aconex program inviting Craig’s Engineering to tender for the structural steel works package. On 25 October, 2013 Mr Lynch submitted a tender on behalf of Craig’s Engineering.
On 21 November, 2013 Mr Lynch attended a meeting with Mr Vigna and the third respondent in respect of the tender. Mr Lynch gave evidence that he and the third respondent had a conversation to the following effect (paragraph 15 of his affidavit filed on 14 October, 2015):
Blore:   “Do Craig’s Engineering have an EBA Agreement?”
[Lynch]:    “No, we don’t; we have our own company agreement and we pay the workers the EBA rates.”
Blore:   “We would like you to do the job but you don’t have an EBA Agreement.”
[Lynch]:    “We don’t need to have an EBA agreement to work on a building site. We’ve got a registered agreement.”
Blore:   “We have had problems with the union on the entire job.”
In Mr Lynch’s affidavit he says that a reference to “the union” in the above extract was a reference to either the CFMEU or the BLF. He said that he did not ask during that conversation what “problems” the third respondent referred to. In fact, Mr Lynch’s evidence in cross-examination was that “[Craig’s Engineering] never had industrial issues”.
Mr Lynch was challenged in cross-examination about his evidence concerning the 21 November meeting. His evidence was not shaken and he added that the third respondent said to him during the meeting that the first respondent would be happy for Craig’s Engineering to do the structural steel works. He was aware that Craig Douglas of Craig’s Engineering had spoken to Andrew Sutherland of the CFMEU but he did not know what the conversation was about.
In cross-examination Mr Lynch accepted that he asked the third respondent a question to the effect of “Does Craig’s Engineering need a CFMEU agreement to be successful in getting the structural steelworks tender?”. He said that he was aware that the first respondent required workers on their projects to be paid “EBA rates”. However, when it was put to him that the discussion with the third respondent was about the need to pay the “EBA rate” rather than the need to have an agreement with the CFMEU, he reiterated that “it was about the EBA agreement to work on that site”. However, he did agree that when he raised with Mr Blore whether Craig’s needed a CFMEU agreement to be successful in getting the structural steelworks package that Mr Blore said, “No, not at all. We are just working through the tender process and we are looking at options.”
The third respondent said the meeting on 21 November, 2013 was a standard part of the tendering process. It was more efficient to deal with the tenderers “face to face”, though such meetings were only conducted with tenderers who submitted the “most competitive prices”. Similar meetings, he says, took place with Steel Construct Australia Pty Ltd and two other tenderers. The third respondent gave the following evidence in reply to Mr Lynch’s affidavit (paragraph 36 of his affidavit filed on 14 December, 2015):
36.4 I did not tell Mr Lynch that First Respondent would like to engage CE to do the Structural Steel Works but would not do so because CE were not covered by a CFMEU Agreement - that is untrue.
36.5 As I recall, the majority of the discussion was about the scope of works and how we could adjust the scope to reduce the price and improve our position in relation to the Project budget.
36.6 During the meeting, I do recall asking Mr Lynch if CE had resolved the issues with the union that I had heard about.
36.7 By “issues” I recall Mr Lynch telling me that CE had some problems with the CFMEU.
36.8 I recall Mr Lynch saying something like that CE had spoken to Andrew Sutherland and they were “sorting it out”. I understood this to mean there was little to no risk of industrial issues arising between CE and the CFMEU.
36.9 I recall saying to Mr Lynch that we were happy for CE to do the Structural Steel Works.
Mr Lynch denied saying to the third respondent that Craig’s Engineering was “sorting it out”.
In November or December, 2013 Mr Cremin suggested to the third respondent that Steel Construct be invited to submit a tender. Mr Cremin said that the reason for recommending Steel Construct to the third respondent was that:
a)he had experience from working for a different and prior employer that Steel Construct had performed similar construction works;
b)Steel Construct’s quality of work on that previous job was good and they delivered the work within the allocated budget; and
c)he thought that Steel Construct would likely do a good job if they were successful with their tender.
On 11 or 12 December, 2013 Mr Cremin contacted Mr Simon Newitt, of Steel Construct, to discuss the structural steel works tender. Mr Newitt said that he would be interested in providing a tender. Some emails were then exchanged between the two resulting in Steel Construct’s proposal for the structural steel works. A copy of a chain of two emails is annexed to the affidavit of Ms Wolff. The first in time is an email from Mr Newitt to Mr Cremin and the second is an email from Mr Cremin to the third respondent. There are a number of handwritten notes and markings. The third respondent was cross-examined about these emails.
The first in time email is a quote of $103,650 plus GST, valid for 30 days, and lists a number of inclusions. With the assistance of the third respondent’s oral evidence, the following handwritten notes are relevant:
a)handwritten notes were taken during a meeting that took place with Mr Newitt on 16 December;
b)the words “including crainage” which appear in the inclusions section of the email are underlined;
c)the email is struck through by two lines between which “S/S” appears. The third respondent said that “S/S” refers to “superseded”;
d)the words “NON – EBA” appear written in the middle of the first page of the chain.
The third respondent accepted that he handwrote the words “NON – EBA” on the chain of the two emails. He said that it is to mean that Steel Construct did not have an EBA with the CFMEU or BLF. He did not accept, initially, that it would have come up as a topic of discussion during the meeting with Mr Newitt on 16 December. Mr Cremin said that he asked Mr Newitt whether or not Steel Construct had an EBA, he was told that Steel Construct did not, and he conveyed to Mr Newitt that for Steel Construct to have an EBA with the CFMEU “would be an easier option for us”.
On 12 December, 2013 Steel Construct submitted an initial tender quoting $103,650 for the work. The third respondent said that was “significantly lower than the initial tender quotes of the other tenderers”.
On 17 December, 2013 Mr Newitt sent an email to Mr Cremin and the third respondent. It appears to be a revised quotation. Relevantly it provides (annexure SW-12 to Ms Wolff’s affidavit):
With regards to the EBA with CFMEU, they have advised that they will require the following –
1. registration -$1,650.00
2. Employee membership - $441.00 per person – I will have to register 6 permanent employees - $2,646.00
3. EBA rates increase my project labour costs also.
I’d need to apply a portion of these costs to your project – say 50% - $3,000.00 plus GST.
After being taken to this email, and with some probing by senior counsel for the applicant, the third respondent accepted that from that email it could be inferred that Mr Newitt had made inquiries with the CFMEU (or BLF or both) subsequent to and by reason of some discussions that they had had in their meeting on 16 December. That is to say, the meeting on 16 December plainly included some discussion about foreshadowed issues concerning the CFMEU (or BLF or both).
The third respondent and Mr Vigna, a contracts administrator of the first respondent, prepared a “comparison spread sheet” for the structural steel tender. It was described as a “living document” because it was added to from time to time. In fact, multiple documents were created rather than a single document being overwritten with changes.
On 22 January, 2014 the third respondent completed and signed the document titled “Authority to Let” a copy of which is annexure SW-17 to the affidavit of Ms Sharon Wolff. The Authority to Let lists, inter alia, eight subcontractors with their initial and revised (if any) tender quotes and some “Comments/Special Conditions” for each subcontractor. It is signed by Mr Paw, the third respondent, Mr Cremin, the second respondent, and three other persons who it seems signed in respect of “Information Only”. Relevantly, it provides:

Subcontractor

Final

Comments/Special Conditions

1. Steel Construct Australia

$97,160

Using Mulherin Rigging for the installation works – supervised by SCA – approved by CFMEU

2. …

$116,620

Union approved

3. …

$95,490

Union recommended not to use.

4. …

$112,270

Union recommended not to use.

5. Craig’s Engineering

$111,402

Union recommended not to use - in the process of signing an EBA.

6. …

$117,538

Allowed to use union labour Union recommended not to use - in the process of signing an EBA.

7. …

$126,755

Too expensive

8. …

$128,637

Too expensive

The applicant argues that the first, second and third respondents took adverse action against Craig’s Engineering by not awarding it the structural steel works contract because, inter alia, it did not have an enterprise agreement that covered the CFMEU. In support of its claim, the applicant referred to the evidence of Mr Lynch. As I have set out above, according to Mr Lynch:
a)the third respondent said to him during conversation “We need to get this EBA agreement sorted out before we can go any further. We don’t want to have any trouble with the union on site”; and
b)after the structural steel package had been awarded to Steel Construct in March, 2014 Mr Lynch and the third respondent had the following conversation:
[Lynch]: “Do you need a signed EBA agreement to work on this site?”
Blore: “Yes. We do not want any problems with the union.”
The applicant submits that the third respondent’s denial about saying those things to Mr Lynch should not be accepted and is not supported by the other evidence. In particular, the applicant referred to:
a)the Authority to Let which provides “Union recommended not to use - in the process of signing an EBA.” next to Craig’s Engineering;
b)the subcontractor comparison spreadsheet which provides:
i)in respect of Steel Construct “Using a EBA rigger – approved by CFMEU”; and
ii)in respect of Craig’s Engineering “Non-EBA – we already had union issues caused by Craigs when erecting bracing & walers earlier on in the project”;
c)the emails of 9, 23 and 25 July, 2013 referred to above in detail in connection with the Bracing and Walers Work.
I have earlier recorded my preference for Mr Lynch’s evidence over Mr Blore’s evidence concerning this conversation. I accept the applicant’s submissions that the matters he identified support Mr Lynch’s version of the conversation.
The respondents submitted that the second respondent’s decision was based on the following considerations:
a)the competitive or best price;
b)efficient methodology and ability to do the job;
c)Steel Construct had the capacity to do the job, in particular because they had been recommended by the third respondent and Mr Cremin;
d)Steel Construct had a mini-crane which meant that the first respondent’s tower crane would not be tied up and could be used for other work given greater productivity and flexibility to the first respondent; and
e)Steel Construct had the best price on an overall basis taking into account the mini-crane.
The applicant submitted that the Court was not obliged to take the second respondent’s evidence at face value and relied upon the following passage from Barclay at [44] – [45] (citation omitted):
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 even though an employee may be an officer or member of an industrial association and engage in industrial activity.
The objective evidence, the applicant argues, is replete with expression of concern about whether tenderers were covered by an enterprise agreement that covered the CFMEU. The applicant refers to the documentary evidence in support of its submission that the “EBA issue” was directly relevant to the decisions made by the second and third respondents. The second respondent gave evidence that he had some regard to the comments on the Authority to Let. Mr Paw said that he perused but did not read the various comments. But of course, perusing is reading. Moreover, there was no mention in the Authority to Let of a mini-crane – something which the second and third respondents swore to being a significant factor in their respective decisions.
The applicant argues that the third respondent “did not care very much about price at all” save that he was concerned about remaining within budget. In support of that assertion, the applicant refers to the increase in Steel Construct’s tender price upon proposing to engage Mulherin Rigging. The applicant submitted that the third respondent was not concerned with that price increase because they would not be faced with an “EBA issue”. Additionally, the third respondent ignored the requests by Mr Lynch for the amended drawings, demonstrating that he was not concerned with any possibility of ascertaining a better price from Craig’s Engineering.
Senior counsel for the respondents pointed to the documentary evidence said to support the respondents’ evidence. The Authority to Let, it was submitted, demonstrated the focus on price. It contains a ranking of tenderers from one to eight. However, the ranking of tenderers is not in price or quotation order as one might expect. Even taking into account that the position of Steel Construct on the list is influenced by the provision of a mini-crane, price alone does not seem to be the reason for the ranking of tenderers on the Authority to Let.
The Authority to Let contains a “Comments/Special Conditions” section. The comments next to six of the eight tenderers refer to the CFMEU or “Union”. The other two comments are “Too expensive”. The reference to two tenderers being “Too expensive” tends to suggest that the others were not too expensive and that there must have been some other distinction or distinctions between them. Two are obvious. The first is price or the “Gain or Loss” to the first respondent (expressed as a percentage of the margin by which the price was more than or less than the first respondent’s budgeted sum for the works). The second are the comments that appear on the form that reference the “Union”. Only the first two tenderers are said to be “Union approved”. None of the others are. Of the two that were “Union approved”, one was for a higher price than three of the other tenders.
The respondents submitted that the relevant distinction between Steel Construct and Craig’s Engineering was price. However, in circumstances where Craig’s Engineering was not given the opportunity to submit a revised quotation, and as senior counsel for the applicant put it, Craig’s Engineering was not tendering on a level playing field, I cannot accept that submission. The applicant submits that by Mr Lynch asking for the revised drawings, Craig’s Engineering was in effect putting the first respondent on notice that it intended to give a revised quotation for the work. The applicant argues that because the third respondent did not reply, he was not interested in Craig’s Engineering submitting a revised price because they had already solved Steel Construct’s “EBA issue”, an issue which remained with Craig’s Engineering. It was further submitted that an inference is open that the third respondent did not foresee a similar solution open to Craig’s Engineering.
Senior counsel for the respondents submitted that notwithstanding the state of mind of the three nominators, the evidence demonstrates that the second respondent acted solely on the things about which he gave evidence. However, that submission fails to appreciate the evidence of the second respondent that he gave some regard to the comments on the Authority to Let. On his own evidence those matters played some part in his decision making process. The respondents submitted that that regard was had to how the subcontractor would be managed, and how the industrial relations around that subcontractor would be managed. But those matters were a function of whether Craig’s Engineering had a relevant agreement with the CFMEU or BLF. Against the background of the dispute with the CFMEU that occurred at the time of the Bracing and Waler Works it is, in my view, an inescapable conclusion that Craig’s Engineering was unattractive to the first respondent because engagement of them would lead to more difficulties with the CFMEU, the progress of the relevant works and the progress of the project more generally.
Senior counsel for the respondents submitted that the comments on the Authority to Let (and presumably the comparison spreadsheet as well) are explained by reference to clause 33 and paragraphs 35.2 and 35.3 of the Devine Constructions Pty Ltd and CFMEU Union Collective Agreement 2011-2015. Senior counsel submitted:
So where you have a body of rights and obligations to consult, I would suggest it’s not unusual to find that the unions, having been consulted, express views, so that references to union approves, or union recommends not to use, in my submission, are to be seen in the context of a unionised site where the unions have a substantial body of rights. It’s, in my submission, consistent with the evidence from the company witnesses, that it was necessary to note these things because, going forward, if there was a successful tender from a company that the union had recommended not to use, during the performance of that tenderer’s contract, the industrial relations would need to be managed.
The increase in Steel Construct’s quote price from $91,585 to some $99,600 was addressed in submissions. Senior counsel for the respondents accepted that the increase was solely due to “EBA labour rates”, that is, the engagement of Mulherin Rigging for labour. It was put to senior counsel that because the increase in price was accepted, it must mean that having EBA workers was important. It was submitted that the reason the increase in price was accepted was because of the first respondent’s obligation under its enterprise agreement. Further, the evidence demonstrates, it was submitted, that Mulherin Rigging was engaged and they were paying “EBA rates”, not necessarily because they were – the point being the rates that they were paying, not the origin of the rates. In fact, Craig’s Engineering had indicated in its tender that it would pay “EBA rates”. Thus, paying the “EBA rates” was something that each tenderer had contemplated and adopted in their respective tenders. The respondents submit that the fact that Steel Construct had subcontracted the labour under its contract with the first respondent to an organisation that paid “EBA rates” should not be seen as a requirement, imposed by the first respondent, that the Union should be kept happy by engaging a contractor that paid “EBA rates”. But a conclusion that the use of Mulherin Rigging labour somehow improved the attractiveness of the Steel Construct tender underscores the importance of a relevant agreement being in place
The applicant submits that neither the second nor third respondents relied upon the notion of payment of “EBA rates” in arriving at their decision. Craig’s Engineering was not asked if it paid “EBA rates”. The evidence of Mr Lynch was that Craig’s Engineering did in fact pay “EBA rates”. There was no reference or mention to payment of “EBA rates” in any of the relevant emails. Further, even if there were consultations with the union and if there was a reliance on what fell from those consultations, the respondents have not discharged their onus because no evidence was called from anyone from the union. The relevant conversations that I have recorded above dealt with whether Craig’s Engineering had an EBA with the relevant union.
The applicant submits that the first respondent was indeed interested in whether tenderers had an enterprise agreement that covered the CFMEU and that matter was important. The evidence demonstrates that on 20 January, 2014 Mr Newitt advised the first respondent that he had solved the “EBA issue” by proposing to engage Mulherin Rigging, and two days later was awarded the structural steel works contract. The reference to the “EBA issue” begs the question: “What EBA issue?” The answer could only be “Whether the employer of the relevant workers had an EBA with the CFMEU”.
The respondents submitted that it would be speculation rather than inference to conclude that the reason for Steel Construct utilising Mulherin Rigging for labour on the structural steel works was to secure the approval of the relevant union. But the inference is plainly open and in my view it is compelling given:
a)the fact that each tenderer was asked a question about whether it was covered by an enterprise agreement that covered the CFMEU in the tender documents; and
b)there were specific comments about union approval recorded in the Authority to Tender.
The respondents submitted that the historical context of the business dealings between the first respondent and Craig’s Engineering is relevant. For instance, Craig’s Engineering performed worked on the project after the Bracing and Waler Works. Thus, it is submitted, the incident on 25 July did not prevent Craig’s Engineering from securing further work with the first respondent or on the project. Sometimes Craig’s Engineering “were successful in their tenders, sometimes they weren’t”. I accept that those matters tend against the ultimate proposition advanced by the applicant and support the respondents’ proposition that the existence of an EBA between Craig’s Engineering and the CFMEU was of no importance.
The second respondent denied that the alleged reason formed part of his reasons to not award Craig’s Engineering the contract. He also said that he did not base his decision on the words “Union recommended not to use”. The respondents submit that the third respondent and Mr Cremin based their decision to recommend Steel Construct based on price and ability to complete the job efficiently.
I accept the respondents’ argument that price was a critical factor in determining which subcontractor would be offered the structural steel works contract. But that does not mean that the matters identified by the applicant were not also substantial and operative reasons for the relevant decision. Indeed, a person takes action for a particular reason if the reasons for the action include that reason: s.360 of the Fair Work Act. It was for the respondents to prove on the balance of probabilities that it did not take adverse action against Craig’s Engineering for a proscribed reason. In my view, the respondents do not discharge that onus. The evidence establishes that the second and third respondents and Mr Cremen took the information on both the Authority to Let and the subcontractor comparison spreadsheet into account when making his decision. The information about Craig’s Engineering and its “EBA status” was relevant information. That it was included in both the subcontractors spreadsheet and the Authority to Let evidences that. The oral testimony confirm that as well. Further, Mr Cremin failed to disavow prohibited reasons as affecting his decision to recommend against Craig’s Engineering. That is plainly a relevant matter: National Tertiary Education Union v Royal Melbourne Institute of Technology (2013) 234 IR 139 at [131].
I am not persuaded on the balance of probabilities or otherwise that the second and third respondents, and thereby the first respondent did not refuse to engage the services of Craig’s Engineering for the purposes of the structural steel works because Craig’s Engineering did not have an enterprise bargaining agreement with the CFMEU or any other relevant union, or had exercised its workplace right to not enter into an enterprise bargaining agreement with any relevant union.

The structural steel works claim: s.354

The applicant claims that the first respondent contravened s.354 by discriminating against Craig’s Engineering because its employees were not covered by an enterprise agreement that covered the CFMEU or the BLF.
The respondents submit that there was no discrimination as alleged because Craig’s Engineering was not awarded the contract based on “price and capacity”, and there was no discrimination against Craig’s Engineering which is distinguishable from that of the other five unsuccessful tenderers.
Senior counsel for the respondents submitted that the case against the first respondent was entirely unclear (p14 lines 36-41 of transcript of 16.6.16):
But nowhere do we see in the pleadings the particular area of discrimination which is said to have occurred. So it’s not really being pleaded as a discrimination case and in our submission, very difficult for us to establish what they say the relevant comparators are, and very difficult to, in the absence of knowing what the comparators are, to answer a case that is frankly so vague.
But the purport of the applicant’s case is clear. Craig’s Engineering was treated differently to Structural Steel Australia and a substantial and operative reason for that treatment was that employees of Craig’s Engineering were not covered by an enterprise agreement that also covered a particular employee organisation, being the CFMEU.
Neither party developed their arguments in respect of this aspect of the claim in the course of submissions. I have approached this aspect of the claim on the basis that the adverse action that I have identified above in respect of the first respondent’s refusal to engage Craig’s Engineering for the structural steel works is also discrimination for the purposes of s.354 of the Act because that conduct discriminates between Craig’s engineering and other tenderers who were union approved. On that basis, the applicant’s claim for a contravention of s.354 of the Act is made out.

The structural steel works claim: s.550

The applicant claims that the second and third respondents are liable under s.550 of the Fair Work Act for these contraventions. The issue in dispute is whether the second and third respondents were involved in the contraventions of the first respondent.
The applicant submits that the second and third respondents had knowledge of the essential facts constituting the contravention and intentionally participated in the contravention: Yorke v Lucas (1985) 158 CLR 661 at [14]-[17]. On the evidence they were plainly involved in the contraventions. Senior counsel for the respondents did not contend to the contrary in the event that I found the contraventions proved. The second respondent and third respondents each had knowledge of all of the matters that constituted the contraventions of ss.340 and 354 of the Act.

Conclusions

The applicant has not proved that in respect of the Bracing and Waler Works the first respondent took any adverse action for a proscribed reason in contravention of s.340 of the Fair Work Act. The respondents have demonstrated that the relevant adverse action was taken for a reason other than a proscribed reason. The proceedings against all respondents insofar as the claims arise out of the Bracing and Waler Works must be dismissed.
The applicant has, however, demonstrated that in respect of the structural steel works the first respondent contravened ss.340 and 354 of the Fair Work Act because it refused to engage Craig’s Engineering to perform the structural steel works and a substantial and operative reason for that refusal was that Craig’s Engineering did not have an enterprise bargaining agreement with the CFMEU. The second and third respondents were involved in those contraventions for the purposes of s.550 of the Fair Work Act.

The parties should bring in short minutes of orders that reflect these reasons and which provide for the orderly disposition of the balance of the proceedings concerning penalty. I will make directions accordingly.

I certify that the preceding two hundred and thirty (230) paragraphs are a true copy of the reasons for judgment of Judge Jarrett

Date: 24 May 2019

[2019] FCCA 1394

24 May 2019

Key Legal Topics

Areas of Law

Employment Law

Administrative Law

Legal Concepts

Judicial Review

Procedural Fairness

Standing

Statutory Construction

Subcontractor	Final	Comments/Special Conditions
1. Steel Construct Australia	$97,160	Using Mulherin Rigging for the installation works – supervised by SCA – approved by CFMEU
2. …	$116,620	Union approved
3. …	$95,490	Union recommended not to use.
4. …	$112,270	Union recommended not to use.
5. Craig’s Engineering	$111,402	Union recommended not to use - in the process of signing an EBA.
6. …	$117,538	Allowed to use union labour Union recommended not to use - in the process of signing an EBA.
7. …	$126,755	Too expensive
8. …	$128,637	Too expensive