Draffin v Construction, Forestry, Mining and Energy Union - [2009] FCA 243

FEDERAL COURT OF AUSTRALIA
Draffin v Construction, Forestry, Mining and Energy Union [2009] FCA 243
INDUSTRIAL RELATIONS – contraventions of ss 43 and 45 of the Building Industry Improvement Act 2005 (Cth) – contraventions of s 298P of the Workplace Relations Act 1996 (Cth) – contraventions admitted – determination of penalty to be imposed
Building and Construction Industry Improvement Act 2005 (Cth) ss 43, 45, 69
Workplace Relations Act 1996 (Cth) s 298P
National Building and Construction Industry Award 2000
Australian Competition & Consumer Commission v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2004] FCA 517 cited
Draffin v Construction, Forestry, Mining and Energy Union [2007] FCA 2011 cited
Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426 applied
JOHN WILLIAM DRAFFIN v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION, STEVE ALLEN, GERARD BENSTEAD, BILL OLIVER and WALTON CONSTRUCTIONS PTY LTD
VID 221 of 2007
MARSHALL J
17 MARCH 2009
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 221 of 2007

BETWEEN:
JOHN WILLIAM DRAFFIN
Applicant

AND:
CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
First Respondent

STEVE ALLEN
Second Respondent

GERARD BENSTEAD
Third Respondent

BILL OLIVER
Fourth Respondent

WALTON CONSTRUCTIONS PTY LTD
Fifth Respondent

JUDGE:

MARSHALL J

DATE OF ORDER:

17 MARCH 2009

WHERE MADE:

MELBOURNE

THE COURT ORDERS THAT:
1. A penalty of $18,000 is imposed on the first respondent for contravening s 43 of the Building and Construction Industry Improvement Act 2005 (Cth) (the BCII Act).
2. A penalty of $2,000 is imposed on the first respondent for contravening s 45 of the BCII Act.
3. A penalty of $750 is imposed on the first respondent for breaching s 298P of the Workplace Relations Act 1996 (Cth) (“the WR Act”).
4. A penalty of $2,000 is imposed on each of the third and fourth respondents for breach of s 43 of the BCII Act. Such penalty to be wholly suspended for 12 months from the date of this order if these respondents are not found to have breached any provision of the BCII Act as a result of conduct occurring within 12 months of these orders they will not be obliged to pay the penalties.
5. Subject to paragraph 4, the penalties imposed in paragraphs 1, 2, 3 and 4 of this order be paid into Consolidated Revenue by 30 April 2009.
6. It is declared that on 16 November 2005 the second respondent contravened ss 43 and 45 of the BCII Act and s 298P of the WR Act.
7. It is declared that on 16 November 2005 the third and fourth respondents contravened s 45 of the BCII Act and s 298P of the WR Act.
Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

VID 221 of 2007

BETWEEN:
JOHN WILLIAM DRAFFIN
Applicant

AND:

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2009] FCA 243
Decision Date: 17 March 2009

CaseChat Overview and Summary

The case of Draffin v Construction, Forestry, Mining and Energy Union involved a dispute where the plaintiff alleged that the union had breached certain provisions of the Building and Construction Industry Improvement Act 2005 (Cth) (BCII Act) and the Workplace Relations Act 1996 (Cth) (WR Act). The primary legal issues before the court were to determine the appropriate penalties for the breaches of the BCII Act and the WR Act by the Union and certain individuals associated with the Union. The court had to consider various factors, including the nature and seriousness of the breaches, the conduct of the individuals involved, and the appropriate deterrence and corrective measures.

The court's reasoning involved a detailed analysis of the factors set out in previous case law, such as the totality principle, cooperation, minimum standards enforcement, deterrence, and the previous conduct of similar cases. The court compared the current breaches with those in the Stuart-Mahoney case, finding the breaches in the present case to be less severe. It also considered the penalty imposed on an individual, Walton, finding his conduct to be at least as serious as the Union’s. The court determined that imposing a penalty on the Union that exceeds the penalty on Walton would not be appropriate. It also took into account the non-profit nature of the Union, funded by its members. After evaluating all these factors, the court concluded that the appropriate penalty for the breach of s 43 of the BCII Act was $18,000, and a penalty of $2,000 for the breach of s 45 of the BCII Act. A penalty of $750 was imposed for the breach of s 298P of the WR Act.

The court made specific orders for the penalties to be paid into the Consolidated Revenue by 30 April 2009. Additionally, it declared that certain respondents had contravened specified sections of the BCII Act and the WR Act on 16 November 2005. Certain penalties were made wholly suspended for 12 months, contingent upon the respondents not breaching any provisions of the BCII Act within that period.

Orders

Orders of the court

1. A penalty of $18,000 is imposed on the first respondent for contravening s 43 of the Building and Construction Industry Improvement Act 2005 (Cth) (the BCII Act).

2. A penalty of $2,000 is imposed on the first respondent for contravening s 45 of the BCII Act.

3. A penalty of $750 is imposed on the first respondent for breaching s 298P of the Workplace Relations Act 1996 (Cth) (“the WR Act”).

4. A penalty of $2,000 is imposed on each of the third and fourth respondents for breach of s 43 of the BCII Act. Such penalty to be wholly suspended for 12 months from the date of this order if these respondents are not found to have breached any provision of the BCII Act as a result of conduct occurring within 12 months of these orders they will not be obliged to pay the penalties.

5. Subject to paragraph 4, the penalties imposed in paragraphs 1, 2, 3 and 4 of this order be paid into Consolidated Revenue by 30 April 2009.

6. It is declared that on 16 November 2005 the second respondent contravened ss 43 and 45 of the BCII Act and s 298P of the WR Act.

7. It is declared that on 16 November 2005 the third and fourth respondents contravened s 45 of the BCII Act and s 298P of the WR Act.

Note:

Background

Background to the litigation

Full text does not contain this section.

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

MARSHALL J

The closest relevant previous conduct is that identified in Stuart-Mahoney. In Stuart-Mahoney, the relevant events occurred over one month before 16 November 2005. However, no penalty was imposed until 19 September 2008. The circumstances of Stuart-Mahoney were more serious than the current circumstances in that the overtime ban in that case caused a greater disruption to the site than did the exclusion of Monjon in this case. It is significant that these events also occurred before the May 2006 seminar. Tracey J imposed a fine of $35,000 on the Union for breach of s 43 of the Act and $20,000 for breach of s 38. No unlawful industrial action arose in the present case, so s 38 is not relevant. The current breaches of ss 43 and 45 are less serious than the breach of s 38 in Stuart-Mahoney. In Stuart-Mahoney the overtime ban had a much greater disruptive effect on the site.(xii) conclusion I consider it important to take into account the penalty imposed on Walton by Ryan J. Walton’s conduct was at least as serious as that of the Union, if not more serious. Walton could have resisted the coercive behaviour of the Union but took the easy way out. I do not consider it appropriate to impose a higher penalty on the Union than the one imposed on Walton. The $40,000 penalty on Walton, although within range, was (given the transient nature of the conduct) at the high end of the appropriate range. The penalty was assuaged by half of it being suspended. I do not consider a suspended penalty to be appropriate to an organisation such as the Union which is involved in the industry every day of its existence. I am mindful of the imposition by Tracey J of a $25,000 fine for a more serious breach of the BCII Act than that which occurred here. Considering the totality principle and all other factors referred to above, the appropriate penalty for the breach of s 43 of the BCII Act is $18,000. It must be borne in mind that the Union is not a profit making body but exists for the benefit of its members and is ultimately funded by those members; see Australian Competition & Consumer Commission v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2004] FCA 517 at [8] per Gray J. The breach of s 45 of the BCII Act involves conduct which is essentially the same as the conduct in breach of s 43. However, according to the totality principle it must attract some meaningful penalty. Accordingly, I will impose a penalty of $2,000 for breach of s 45 of the BCII Act. The breach of s 298P of the WR Act is in the same category. I impose a penalty of $750 for breach of that provision. A penalty of that size reflects the much lower maximum penalty applicable to a breach of the WR Act, as at November 2005, when compared with the BCII Act.PERSONAL RESPONDENTS I see no point in imposing penalties on the second respondent. Mr Allen was simply the voice of the Union at the site, reflecting the position of Union management about the Union’s attitude to people being employed on building sites having their wages and conditions regulated by AWAs in circumstances where the Award applied to that employment. Mr Allan considered that his hands were tied by Union policy. Mr Benstead as a Union employee was giving effect to Union policy and Mr Oliver, albeit at a higher level than Mr Benstead was also guided by the then Union attitude to firms such as Monjon, which employed people on AWAs instead of on the Award. All three gentlemen have subsequently had the benefit of a seminar designed to guard against repetition of this conduct.

Ratio Decidendi

Legal Principle Established

Established by: MARSHALL J

The only corrective action was the holding of the seminar.(vii) cooperation The agreed statement of facts filed more than two weeks before the penalty hearing is evidence of cooperation with the relevant authorities.(viii) minimum standards enforcement The statutory purposes of the BCII Act are referred to in Stuart-Mahoney at [56]. As Tracey J said at [57]:The imposition of pecuniary penalties for contraventions of civil penalty provisions gives effect to the statutory purposes of the BCII Act.(ix) deterrence As Tracey J said in Stuart-Mahoney at [58], “[p]enalties must be imposed at a meaningful level if they are to act as a general deterrent to others”. Specific deterrence is also a factor which informs the level of penalty in this case.(x) totality principle At [60] Tracey J said:Another factor to be considered is the totality principle. The principle is designed to ensure that the aggregate of penalties imputed is not such as to be oppressive or crushing… The orthodox position requires the determination of appropriate penalties for each contravention arising from the same course of conduct. The aggregate figure is then considered to ensure that the penalty is an appropriate response to the conduct in question…(xi) previous conduct The closest relevant previous conduct is that identified in Stuart-Mahoney. In Stuart-Mahoney, the relevant events occurred over one month before 16 November 2005. However, no penalty was imposed until 19 September 2008. The circumstances of Stuart-Mahoney were more serious than the current circumstances in that the overtime ban in that case caused a greater disruption to the site than did the exclusion of Monjon in this case. It is significant that these events also occurred before the May 2006 seminar. Tracey J imposed a fine of $35,000 on the Union for breach of s 43 of the Act and $20,000 for breach of s 38. No unlawful industrial action arose in the present case, so s 38 is not relevant. The current breaches of ss 43 and 45 are less serious than the breach of s 38 in Stuart-Mahoney. In Stuart-Mahoney the overtime ban had a much greater disruptive effect on the site.(xii) conclusion I consider it important to take into account the penalty imposed on Walton by Ryan J. Walton’s conduct was at least as serious as that of the Union, if not more serious. Walton could have resisted the coercive behaviour of the Union but took the easy way out. I do not consider it appropriate to impose a higher penalty on the Union than the one imposed on Walton. The $40,000 penalty on Walton, although within range, was (given the transient nature of the conduct) at the high end of the appropriate range. The penalty was assuaged by half of it being suspended. I do not consider a suspended penalty to be appropriate to an organisation such as the Union which is involved in the industry every day of its existence. I am mindful of the imposition by Tracey J of a $25,000 fine for a more serious breach of the BCII Act than that which occurred here. Considering the totality principle and all other factors referred to above, the appropriate penalty for the breach of s 43 of the BCII Act is $18,000. It must be borne in mind that the Union is not a profit making body but exists for the benefit of its members and is ultimately funded by those members; see Australian Competition & Consumer Commission v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2004] FCA 517 at [8] per Gray J.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 221 of 2007

JUDGE:	MARSHALL J
DATE OF ORDER:	17 MARCH 2009
WHERE MADE:	MELBOURNE