Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union

The Fair Work Building Industry Inspectorate sought penalties against the Construction, Forestry, Mining and Energy Union (CFMEU) and an individual, Mr McDermott, for alleged breaches of the Fair Work Act 2009 (Cth). The CFMEU and Mr McDermott were accused of organising BDSF employees to refuse work until Mr Lewis was reinstated and threatening non-cooperation with BDSF until that demand was met. The Federal Circuit Court of Australia was tasked with determining whether the alleged conduct constituted breaches of the Fair Work Act and, if so, the appropriate penalties.

The primary legal issue before the court was whether the actions of the CFMEU and Mr McDermott amounted to a contravention of section 355 of the Fair Work Act, which prohibits coercion of employers to achieve certain employment outcomes. The court had to consider the nature and extent of the conduct, the circumstances in which it occurred, and the potential impact on BDSF. Additionally, the court needed to assess the appropriate penalties, considering various factors including the seriousness of the breaches, the size of the business, and the need for deterrence.

The court found that the CFMEU and Mr McDermott had indeed contravened section 355 by organising and threatening the BDSF employees to withhold their labour. The court acknowledged that while Mr McDermott's actions were serious, they did not result in any practical effect due to external circumstances. The court also took into account Mr McDermott's genuine belief that his actions were in response to the unfair termination of Mr Lewis. Despite this, the court ruled that the actions were coercive and thus constituted a breach of the Fair Work Act. The court ordered the CFMEU to pay a penalty of $16,500 and Mr McDermott to pay $1,320. These amounts represented 50% and 20% of the maximum penalties, respectively, and were deemed appropriate given the circumstances.

In conclusion, the court dismissed the claims regarding Mr McDermott's conduct on 21 June 2012 and ordered the CFMEU and Mr McDermott to pay specified pecuniary penalties. The court emphasised the importance of compliance with the Fair Work Act and the need for deterrence in such cases. The remaining claims against the CFMEU were dismissed, and no costs were ordered.