Eckel v Ballarat Community Health Ltd (No 2)
[2023] FedCFamC2G 519
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Eckel v Ballarat Community Health Ltd (No 2) [2023] FedCFamC2G 519
File number(s): MLG 2742 of 2018 Judgment of: JUDGE SYMONS Date of judgment: 22 June 2023 Catchwords: INDUSTRIAL LAW – application for imposition of pecuniary penalty and for compensation to be paid to former employee – refusal of employment in newly created role – claim for economic loss premised on applicant being appointed to the new role if contravention had not occurred – where applicant not prepared to work the hours required of the new role - humiliation and distress and loss of opportunity to pursue General Protections Application Not Involving Dismissal – factors relevant to penalty – whether penalty should be ordered to be paid to applicant – compensation for pain and suffering awarded – penalty imposed Legislation: Crimes Act 1914 (Cth) s 4AA
Fair Work Act 2009 (Cth) ss 12, 340, 372, 539, 545, 546, 557A
Cases cited: Aitken v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia – Western Australian Branch (1995) 63 IR 1
Australian Building and Construction Commissioner v Pattinson & Anor (2022) 399 ALR 599; [2022] HCA 13
Construction, Forestry, Mining, and Energy Union v Hail Creek Coal Pty Ltd [2016] FCA 1032
Eckel v Ballarat Community Health Ltd [2022] FedCFamC2G 890
Ewin v Vergara (No 3) (2013) 307 ALR 576; [2013] FCA 1311
James Cook University v Ridd (2020) 382 ALR 8; [2020] FCAFC 123
Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080;
Mason v Harrington Corporation Pty Ltd [2007] FMCA 7
Richardson v Oracle Corporation Australia Pty Ltd (2014) 312 ALR 285; [2014] FCAFC 82
Sayed v Construction, Forestry, Mining and Energy Union (2016) 239 FCR 336; [2016] FCAFC 4
Trade Practices Commission v CSR Ltd [2009] FCA 521
Division: Division 2 General Federal Law Number of paragraphs: 80 Date of last submission/s: 17 May 2023 Date of hearing: 17 May 2023 Place: Melbourne Applicant: In person Counsel for the Respondent: Mr N Harrington Solicitor for the Respondent: K & L Gates ORDERS
MLG 2742 of 2018 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: BRENDAN ECKEL
ApplicantAND: BALLARAT COMMUNITY HEALTH LTD
Respondent
order made by:
JUDGE SYMONS
DATE OF ORDER:
22 June 2023
THE COURT ORDERS THAT:
1.Pursuant to ss 545(1) and (2)(b) of the Fair Work Act 2009 (Cth) (the FW Act), the respondent pay to the applicant compensation in the amount of $4,750 within 28 days of the date of this order.
2.Pursuant to s 547(2) of the FW Act, the respondent pay pre-judgment interest to the applicant on the amount of compensation specified in paragraph 1 within 28 days of the date of this order, with the interest to be calculated:
(a)In accordance with the applicable pre-judgment interest rate prescribed by the Federal Court of Australia; and
(b)From 30 June 2018 to the date of this Order.
3.Pursuant to s 546(1) of the FW Act, the respondent pay to the applicant, within 28 days of the date of this order, a pecuniary penalty in the amount of $8,500 in respect of the contravention the subject of the declaration made by the Court on 27 October 2022.
Note: The form of the order is subject to the entry in the Court’s records.
Note: The Court may vary or set aside a judgment or order to remedy minor typographical or grammatical errors (r 17.05(2)(g) Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth)), or to record a variation to the order pursuant to r 17.05 Federal Circuit and Family Court of Australia (Division 2) (General Federal Law) Rules 2021 (Cth).
REASONS FOR JUDGMENT
JUDGE SYMONS:
INTRODUCTION
On 27 October 2022 I published reasons for judgment (earlier reasons) on the basis of which I declared that the respondent (BCH) had contravened s 340(1) of the Fair Work Act 2009 (Cth) (FW Act) by taking adverse action against the applicant (Mr Eckel) for a prohibited reason by refusing to employ him in the role of Clinical Liaison and Withdrawal Nurse.[1] I also set the matter down for directions on 7 December 2022 on which date I made orders by consent that the parties file and serve evidence and submissions on the question of penalty and relief and set the matter down for a hearing on this question on 17 May 2023.
[1] Eckel v Ballarat Community Health Ltd [2022] FedCFamC2G 890.
In these reasons for judgment, I consider whether I should make an order under s 545(1) of the FW Act and whether I should make an order under s 546(1) of the FW Act that BCH pay a pecuniary penalty for its contravention of s 340(1) of the FW Act and, if so, the amount of the penalty I should order BCH to pay.
POWER AND PRINCIPLES OF ASSESSMENT
Section 545 FW Act
Under s 545(1) of the FW Act this Court may make any order that it considers appropriate if the Court is satisfied that a person has contravened a “civil remedy provision”. That expression is defined in s 539(1) of the FW Act to include the provisions identified in column 1 of the table to s 539(2) of the FW Act. Column 1 includes s 340(1) of the FW Act.
Section 545(2) of the FW Act identifies three types of order that the Court may make where a civil remedy provision has been contravened, including an order awarding compensation for loss that a person has suffered because of the contravention (s 545(2)(b)). However, these examples are not intended to limit the Court’s power under s 545(1). [2] To the extent that a limit does apply it reflects the governing consideration that any order must give effect to what the Court considers “appropriate”.
[2] James Cook University v Ridd [2020] FCAFC 123 at [155].
It is not controversial that s 545(1) empowers the Court to make orders that provide redress for economic loss as well as to compensate a person for pain and suffering, for loss of amenity or enjoyment of life and other intangibles which are not readily capable of arithmetic calculation.[3] In both cases there must be an appropriate causal connection between the loss suffered and the relevant contravention of the FW Act.[4] In determining whether this connection exists the Court will often be required to make projections about what would have been likely to occur had the FW Act not been contravened. This is an assessment that operates on probabilities and possibilities.[5]
[3] This was the expression adopted by Bromberg J in Ewin v Vergara (No 3) [2013] FCA 1311 at [39] which has been applied in the context of the FW Act. See, e.g. Clarke v Elite Systems Australia Pty Ltd (No 2) [2018] FCCA 2864 at [129].
[4] See Australian Licensed Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (2011) 193 FCR 526 at [423] per Barker J.
[5] Construction, Forestry, Mining, and Energy Union v Hail Creek Coal Pty Ltd [2016] FCA 1032 at [40] per Reeves J.
Where a claim for general damages is made, the Court will be assisted by medical evidence, however this is not a necessary pre-condition to prove a compensable injury or condition nor to prove that a person has experienced hurt or injured feelings as a result of a contravention.[6] However, something more than mere assertion is required to justify an order for compensation for non-economic loss.
[6] Richardson v Oracle Corporation Australia Pty Ltd [2014] FCAFC 82 at [104].
The approach overall is for the Court to consider the detriment occasioned to the employee by the employer’s contravention of the FW Act, and the extent to which it is reasonable to compensate the employee for such consequences.[7]
[7] Aitken v Construction, Mining, Energy, Timberyards, Sawmills and Woodworkers Union of Australia – Western Australian Branch (1995) 63 IR 1 per Lee J when considering factors relevant to an award of compensation under s 170EE of the then Industrial Relations Act 1988 (Cth).
Section 546 FW Act
Under s 546(1) of the FW Act this Court may, on application, order a person to pay a pecuniary penalty the Court considers appropriate if the Court is satisfied the person has contravened a “civil remedy provision”. As noted above, s 340(1) is identified in the FW Act as a “civil remedy provision”.
Section 546(2) of the FW Act provides that the pecuniary penalty the Court may impose must not, where the person is an individual, be more than “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)” and if the person is a “body corporate”, must not be more than five times “the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2)”.
The maximum penalty units specified in the table in s 539(2) of the FW Act for the contravention of s 340(1) is 60 penalty units. Under s 12 of the FW Act, “penalty unit” has the meaning given by s 4AA of the Crime Act 1914 (Cth). In this case, while I did not record a finding as to the precise date on which the contravention by BCH occurred, it was accepted by the parties that the relevant date must have been located in the second half of June 2018. At that time, the penalty unit was $210. That means the maximum penalty that may be imposed on BCH is $63,000.
The approach to determining penalty was revisited by the High Court in Australian Building and Construction Commissioner v Pattinson & Anor [2022] HCA 13 (Pattinson). The majority upheld the Commissioner’s appeal and confirmed that the purpose of a civil penalty is primarily, if not solely, the promotion of the public interest in compliance with the provisions of the FW Act by the deterrence of further contraventions of the FW Act by those responsible and by (like) others. The Court rejected the approach implicit in the decision of the Full Court (the subject of the appeal) that a penalty must be proportionate to the seriousness of the conduct that constituted the contravention. The majority held instead that “[t]he power conferred by s 546 of the Act is not subject to constraints drawn from the criminal law and there is no place for a ‘notion of proportionality’…in a civil penalty regime”.[8] However, the Court did accept that s 546 requires the Court to ensure that any penalty “strikes a reasonable balance between deterrence and oppressive severity”.[9] It was only in this more qualified sense that the concept of “proportionality” had any role to play.
[8] Australian Building and Construction Commissioner v Pattinson & Anor [2022] HCA 13 at [10].
[9] Ibid at [41].
The High Court also referred to the several factors identified by French J in Trade Practices Commission v CSR Ltd [1990] FCA 521 which informed the assessment of a penalty of an appropriate deterrent value. This list revealed that both the circumstances of the contravenor and the circumstances of the contravention may be relevant to the assessment of whether the maximum level of deterrence is called for.[10] However, the Court repeated the caution that the list of possible relevant considerations should not be approached as a “rigid catalogue of matters for attention” and instead the task of the court remains to determine what is an “appropriate” penalty in the circumstances of the particular case.[11]
[10] Ibid at [57].
[11] Ibid at [18] and [19].
In the specific context of breaches of workplace laws, courts have often considered relevant to the assessment of penalties the factors Mowbray FM identified in Mason v Harrington Corporation Pty Ltd.[12]These factors are:
[12] Mason v Harrington Corporation Pty Ltd [2007] FMCA 7. In Kelly v Fitzpatrick [2007] FCA 1080; (2007) 166 IR 14 at [14] Tracey J adopted this same list of factors as “potentially relevant and applicable”.
(a)the nature and extent of the conduct which led to the breaches;
(b)the circumstances in which that conduct took place;
(c)the nature and extent of any loss or damage sustained as a result of the breaches;
(d)whether there had been similar previous conduct by the party committing the breach;
(e)whether the breaches were properly distinct or arose out of the one course of conduct;
(f)the size of the business enterprise involved;
(g)whether or not the breaches were deliberate;
(h)whether senior management was involved in the breaches;
(i)whether the party committing the breach had exhibited contrition;
(j)whether the party committing the breach had taken corrective action;
(k)whether the party committing the breach had cooperated with the enforcement authorities;
(l)the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
(m)the need for specific and general deterrence.
SUBMISSIONS ON ORDER UNDER SECTION 545 OF THE FW ACT
Mr Eckel
Mr Eckel relied on a set of written submissions filed on 27 January 2023 and an affidavit made and filed on 5 May 2023. Mr Eckel was directed to file this affidavit on 26 April 2023 in an effort to focus his evidence on matters germane to an application for remedies and penalty and after he had filed, or attempted to file, five earlier affidavits which contained material that was in large measure not relevant to the issues now before the Court. I also admitted into evidence four documents that had been annexed to an earlier affidavit prepared by Mr Eckel and which were relevant to Mr Eckel’s case for remedies. These documents and their corresponding exhibit number were:
(a)Payslip for pay period 10 October 2022 to 23 October 2022 for Central Highlands Rural Health (Exhibit “A1”);
(b)Mr Eckel Individual Tax Return for 1 July 2017 to 30 June 2018 (Exhibit “A2”);
(c)Mr Eckel Individual Tax Return for 1 July 2018 to 30 June 2019 (Exhibit “A3”); and
(d)Advertisement for role of Alcohol and Other Drug Clinical Liaison and Withdrawal Nurse Ballarat (Exhibit “A4”).
In broad terms, Mr Eckel seeks compensation for economic loss and for pain and suffering.
His claim for economic loss operates on the premise that but for the contravention by BCH of s 340(1) of the FW Act, he would have been employed in the role of Clinical Liaison Withdrawal Nurse (identified in the earlier reasons as “the new role”) on and from 30 June 2018; this being the date upon which his employment in the role of Alcohol and Other Drug Withdrawal Nurse came to an end because of the cessation of his fixed term contract.
Mr Eckel’s claim for economic loss also operates on the premise (or reflects the position) that his employment in the new role would have been on a part-time 2 days per week (or 0.4 EFT basis). He quantifies his loss as being in the amount of $132,584 referable to the period 1 July 2018 to 30 June 2022. Mr Eckel seeks a further unquantified sum for what he describes as the loss of a scholarship for the Master of Nursing (Nurse Practitioner). He submits that although the scholarship was not advertised as part of the new role he nonetheless came to understand that the incumbent to the new role negotiated with BCH to undertake a Nurse Practitioner course.
Mr Eckel also makes the submission that after 30 June 2022, but for the contravention, he would have been employed in a newly created (or revived) role of non-residential withdrawal nurse and on the same 2 day or 0.4 EFT basis. He claims compensation for the period 1 July 2022 to 27 October 2022 (date of judgment) in the amount of $19,091.
In addition to these claims, Mr Eckel identified in his material that he sought compensation for payment of lost wages for work that he was “coerced into doing” ($10,182), compensation for lost wages for work undertaken in relation to “the GPIR Innovation Fund” ($1,902) and “reimbursement of sick leave with a WC payment” ($4,164). When it was explained to Mr Eckel that these claims had not been part of his original application to the Court and that they did not relate to the contravention by BCH of the FW Act, he acknowledged properly that they could not be pursued in this proceeding.
When asked to explain how he framed his claim for pain and suffering, Mr Eckel told the Court that as a result of BCH’s contravention he had not been able to continue his general protections claim in the Fair Work Commission as this required the maintenance of an employment relationship between himself and BCH. Mr Eckel explained that the inability to pursue this claim had caused him serious distress. He referred to physical symptoms of sweating, light-headedness, and disrupted sleep. Mr Eckel told the Court that because of the summary nature of his dismissal he felt disempowered. When asked to clarify the amount that he was seeking by way of compensation for his pain and suffering Mr Eckel told the Court that he considered an amount of $25 million to be appropriate.
In his written submissions Mr Eckel referred to having received a diagnosis of Adjustment Disorder on 1 May 2015 just prior to commencing work with BCH and a subsequent finding of Acute Stress Disorder by a medical panel on 31 March 2016 (some ten months after commencing work at BCH). He also referred to having experienced three severe hypertensive attacks during his employment with BCH and to an event of ST-Elevation Myocardial Infarction and VF Arrest at some time in 2019.
Mr Eckel made the following submissions in writing:[13]
19)The Applicant’s remedy seeks compensation for loss of life, in the real sense, which was artificially restored by the application of an Automatic External Defibrillator by paramedics with Ambulance Victoria on the 26th June 2019, some three years after being medically cleared of any physical medical complaint by the Medical Panel.
20)The Applicant attributes this rapid decline in his physical health resulting in damage to his heart and damage to his kidneys was the result of being subjected to behaviours by a core group of colleagues intent on harming his mental health and his physical wellbeing…
[13] Paragraphs 19 and 20 of Mr Eckel’s written submissions filed 27 January 2023.
Mr Eckel did not however produce any medical evidence to establish a connection between the contravention and any of the events or physical conditions referred to in these paragraphs.
BCH
BCH relied on written submissions filed on 24 February 2023 and an affidavit affirmed by Mr Sean Duffy on 22 February 2023. Mr Duffy is the current Chief Executive Officer of BCH. He commenced employment in this role on 10 December 2018.
BCH submits that Mr Eckel’s claim for economic compensation must fail because he did not sustain any past economic loss caused by BCH’s contravention of the FW Act. BCH submits that the premise of his claim is misconceived because even if the contravention of s 340(1) had not occurred, Mr Eckel could not and would not have accepted or been available to accept and undertake the new role.
BCH submits that this outcome is inevitable having regard to the following facts and circumstances.
First, the new role was a full-time position.
Second, Mr Eckel was not available to accept the full-time position because he was committed to pre-existing employment with Hepburn Health Service on a two day (or 0.4 EFT) per week basis.
Third, Mr Eckel had made clear to the panel that had interviewed him for the new role that he could only accept a position working one day (0.2 EFT) per week.
As far as the first proposition is concerned there is no dispute that the role of Alcohol and Other Drug Clinical Liaison Nurse was a full-time position. This is made clear from the advertisement for the new role.[14] During cross-examination in the hearing on liability Mr Eckel acknowledged that he knew going into the interview for the new role that it was to be a 1 FTE position.[15]
[14] “Exhibit “A4”.
[15] See earlier reasons at [57(j)].
Mr Eckel did not dispute the second proposition. Indeed, it was Mr Eckel’s evidence that after he left BCH, he increased his work at Hepburn Health Service to three days per week.
Mr Eckel did however dispute the accuracy of the third proposition. However, it is the case that during the hearing on liability, Mr Eckel agreed that he had told the panel during his interview for the new role that he would be willing to work (only) one day a week “because working under [Ms Powell] has been very difficult”.[16] Mr Eckel maintained however that his preference for working one day per week could have been accommodated through a job-sharing arrangement.
[16] See earlier reasons at [57(j)].
BCH made the further submission that even if it was to be accepted that, but for its contravention, Mr Eckel would have been employed on a part-time basis (1 day per week) in the new role, he had suffered no financial loss.
This was because (as noted above) Mr Eckel had increased his hours at Hepburn Health Service so that he was working (and generating income) three days (or 0.6 EFT) per week.
BCH submitted that the financial material produced by Mr Eckel was proof that his financial circumstances had not materially changed since his employment with BCH came to an end.
Specifically, in his income tax return for the financial year ending 30 June 2018,[17] Mr Eckel declared gross earnings related to his employment with BCH and Hepburn Health Service of $50,113 (amounts of $18,427 and $31,686 respectively). In his income tax return for the financial year ending 30 June 2019,[18] Mr Eckel declared gross earnings related to his employment with BCH and Hepburn Health Services of $50,017 (amounts of $2,170 and $47,847 respectively). The difference between the two amounts from year to year was negligible.
[17] Exhibit “A2”.
[18] Exhibit “A3”.
As far as Mr Eckel’s claim for compensation for the value of a Master of Nursing degree was concerned, BCH submitted that while Mr Eckel was entitled to speculate as to what might have happened once the successful candidate had been placed in the new role, it was the case that a scholarship for this course never formed part of the new role. This was clear both from the advertisement which made no reference to a scholarship and from the evidence of Mr Duffy who denied that any scholarship was provided as part of the new role.[19] Mr Eckel did not seek to challenge Mr Duffy’s evidence, except through assertions made from the bar table.
[19] Affidavit of Sean Duffy affirmed 22 February 2023 at [14].
As far as Mr Eckel’s claim for compensation on account of pain and suffering was concerned, BCH accepted that Mr Eckel had been upset about the way in which his employment with BCH had come to an end. However, it emphasised the failure of Mr Eckel to produce any medical evidence that connected his physical or psychological health to the single contravention. BCH appeared to accept that Mr Eckel has significant health challenges (both physical and mental) but noted that on Mr Eckel’s own case most of these pre-dated the contravention and that Mr Eckel had made workers’ compensation claims and received benefits in respect of some of these.
BCH made the further submission that it was important to recognise and make allowance for the position disclosed in the evidence given at trial that Mr Eckel was deeply unhappy during his employment with BCH. It was said that during his employment Mr Eckel demonstrated a real animus to certain female managers and that he had not managed, through his submissions or evidence, to disentangle that experience or those emotions, from the fact of the single contravention. BCH submitted that any award of compensation on account of distress or pain and suffering should be at the very low end of the spectrum.
SUBMISSIONS ON ORDER UNDER SECTION 546 OF THE FW ACT
Mr Eckel submitted that the Court should impose a “punitive or exemplary fine” on BCH for its contravention of the FW Act. I understood him to submit that the contravention was a “serious contravention” with the result that the Court could impose civil penalties up to ten times the amount otherwise prescribed for a contravention.
Mr Eckel was critical and suspicious of the steps taken by BCH in this penalty stage of the proceeding which included the making of an apology and evidence directed at steps taken to improve the recruitment process of BCH. Mr Eckel submitted that these measures should not be understood to demonstrate contrition but instead involved a late acknowledgement of wrongdoing and a calculated exercise to mitigate loss.
Mr Eckel was also critical of the way BCH had sought to portray him through this proceeding. He made particular reference to paragraphs 15 and 35 of BCH’s written submissions which referred to the animus demonstrated by Mr Eckel to certain female managers and his conflict with female work colleagues. Mr Eckel submitted that this indicated that the view taken by BCH was that he essentially deserved everything that he got. He submitted that the promulgation of these views served to damage his reputation in perpetuity.
Mr Eckel emphasised the need for any penalty to operate as a deterrent to other organisations to prevent the same treatment that he received being directed at other employees.
BCH
BCH acknowledged that the Court was empowered by s 546 of the FW Act to impose a civil penalty for its contravention of s 340(1) of the FW Act but emphasised the broad discretion reposed in the Court by the provision which could accommodate a situation where no penalty was ordered.
By reference to the affidavit of CEO Mr Duffy, BCH identified and placed emphasis upon its character as a publicly funded entity providing a range of critical health services to its local community. Counsel for BCH, Mr Harrington, described BCH as an organisation with “tentacles deep in the community”. It was submitted that BCH had no profit motive and had established a reputation of significant good will in the community.
BCH submitted that its culpability was low in circumstances where, despite the finding that it had contravened the FW Act by refusing to employ Mr Eckel in the new role, it had survived Mr Eckel’s challenge to the restructure that resulted in the creation of the new role and the challenge to the character of his employment, with the Court finding that it had been a fixed term contract and that his role ceased to exist as at 30 June 2018.
It was submitted that there was no evidence of intentional defiance of the FW Act; rather, liability was established in the context of strained and difficult working relationships in the workplace and where BCH had made an admittedly ill-advised decision to include on the interview panel a person who was compromised in her ability to bring a clear mind to the role (this being a reference to Ms Powell). Further, it was of significance in relation to penalty, that Mr Eckel had not been prepared to accept the job offered by it on the terms offered.
As far as contrition was concerned, BCH submitted that this was demonstrated through the apology made by Mr Duffy which read:[20]
I understand Judge Symons made a finding that BCH breached the FW Act because of the Contravention. My understanding is that finding was based upon adverse findings in relation to the decision making by individual panel members who recommended against offering employment to Mr Eckel in their report to the former CEO of BCH. On behalf of BCH, I unreservedly apologise to Mr Eckel for that conduct of the Panel and BCH more generally.
[20] Paragraph 15 of the affidavit of Sean Duffy affirmed 22 February 2023.
In response to the suggestion by Mr Eckel that the apology should be viewed as a last-ditch measure to improve the position of BCH on penalty, it was submitted that the way in which Mr Eckel articulated and ran his case meant that it was not an option for BCH to make any admissions. BCH had been confronted with a multitude of claims which meant that it was always going to run.
As far as the need for general deterrence was concerned, BCH accepted that this was a consideration that required close attention, especially in light of the decision of Pattinson. BCH accepted that the Court should make plain that contravening the FW Act is a serious matter and not to be understood as a simple incident of undertaking business or employment.
Finally, on the question of specific deterrence BCH submitted that this was of lower order priority and indeed in this case, it might be appropriate for the Court not to attach any significance to the consideration including for the purpose of fixing a penalty. BCH submitted that the decision on liability had already created adverse consequences for its reputation.
BCH submitted that it had no history of contravening and was not therefore a recidivist. It had apologised and therefore demonstrated insight and it was strongly arguable that it had learnt from the single contravention and would be alive to the operation of the relevant “protections” in the FW Act in the future. BCH described the single contravention as an “uncharacteristic aberration” and noted that there was no evidence of a continuing attitude of disobedience that the Court needed to be astute to deal with.
BCH referred to the evidence of Mr Duffy that since the contravention had occurred BCH had significantly invested in its People and Culture (P&C) expertise and had installed an Executive Manager in the P&C division who had implemented a range of reforms and improvements in process and in the availability and provision of expert advice. It was said, by reference to the decision of Kelly v Fitzpatrick (2007) 166 IR 61, that where these measures had been put in place to avoid future breaches of the FW Act, specific deterrence might not be in issue.
Insofar as it was suggested by Mr Eckel that its contravention of s 340(1) of the FW Act was a “serious contravention” as defined in s 557A of the FW Act, BCH submitted that Mr Eckel had failed to identify or to establish the elements required for a finding that the single contravention had this character. Mr Eckel had not identified or established that BCH knowingly contravened s 340(1) or that the conduct of BCH constituting the contravention was part of a systematic pattern of conduct relating to one or more other persons. Furthermore, it was not open to Mr Eckel to now seek to make this case when it was not flagged previously or with precision given that it concerned the imposition of penalties.
CONSIDERATION
Should the Court make an order under s 545(1) of the FW Act?
As noted above, I have been asked by Mr Eckel to make an order that recognises economic loss caused by the contravention and an order to provide compensation for pain and suffering connected to the contravention.
I am not persuaded that an order for past economic loss is appropriate. There are several reasons why this is the case.
First, had BCH approached the decision of whether to employ Mr Eckel in the new role in a manner that was entirely dissociated from the proscribed reason, it is open to serious question that BCH would have identified him as the preferred candidate, even leaving to one side, Mr Eckel’s inability and express unpreparedness to work the hours demanded of the new role.
In this regard, and as I observed in the earlier reasons, Mr Eckel held strong and entrenched adverse views concerning BCH and its workplace culture such that one might be forgiven for questioning whether he was genuine in his desire to obtain employment with BCH in the new role. These views included that the BCH workplace was one that involved a systematic bias against men[21] and BCH acted as an agent of the ALP and had subjected Mr Eckel to the ALP “dirt unit treatment”.[22]
[21] See earlier reasons at [57(b)].
[22] See earlier reasons at [57(c)].
A similar view was communicated by Mr Eckel in the application letter that he submitted for the new role. In that letter, Mr Eckel accused BCH of having engaged in “abrasive, directive, coercive and dismissive behaviours all geared around eroding basic human rights”.[23] While Mr Eckel was entitled to communicate his views about BCH, it was entirely possible (if not inevitable) that BCH would have understood the maintenance and expression of such views as being inconsistent with there being a sufficient level of trust and confidence to make any employment relationship between it and Mr Eckel viable and productive.
[23] See earlier reasons at [57(g)].
Second, I accept the submission of BCH that based on Mr Eckel’s explicit statements and representations made to it (which BCH was entitled to accept at face value), and the fact that Mr Eckel was already committed to ongoing employment with Hepburn Health Service on a part time (two days per week) basis, that he was both unwilling and unable to accept employment in the new role. BCH would have been entitled for this reason to reject his application for the new role and/or to fail to identify him as the preferred candidate.
Third, even if I was to accept that but for the contravention, Mr Eckel would have been employed in the new role, Mr Eckel has not demonstrated that he suffered any financial loss as a result. His income in the year following the cessation of his employment with BCH remained almost unchanged.
Fourth, it follows from my conclusion that BCH would not have employed Mr Eckel in the new role that he is not entitled to any monetary compensation for the loss of the opportunity to pursue study in the Master of Nursing. In any case, I am not persuaded that a scholarship for this course was offered as a component of the new role.
As far as Mr Eckel seeks compensation for pain and suffering, I accept that he suffered a measure of hurt feelings and indignation because of the decision taken by BCH to refuse to employ him in the new role. However, the already imprecise science of quantifying loss of this kind is further complicated by the fact that before this decision was taken Mr Eckel was already demonstrably unhappy in the BCH workplace. It appears that he was especially aggrieved by the fact that his extant employment in the role of Alcohol and Other Drug Treatment Services Withdrawal Nurse had come to an end on 30 June 2018. In the earlier reasons I found that Mr Eckel’s employment in this role was pursuant to a fixed term contract and came to an end lawfully due to the effluxion of time.[24] However, Mr Eckel questioned that his employment had this character and was clearly upset when he discovered that his expectation of ongoing employment (albeit incorrect) was unfulfilled.
[24] See earlier reasons at [100] and [103].
Mr Eckel was also plainly upset and disappointed by a range of other events that took place prior to the decision not to employ him in the new role and which were either raised only tangentially in this proceeding found not to involve unlawful conduct by BCH. For instance, Mr Eckel’s affidavit material and submissions referred to a litany of exchanges and events, many of which took place months or even years before the date of the contravention and which Mr Eckel said contributed to his poor mental and physical health.
Insofar as Mr Eckel seeks compensation for the loss of the opportunity to continue his general protections claim in the Fair Work Commission, given that this required the maintenance of an employment relationship between himself and BCH there is a short answer as to why such relief would not be appropriate.
In the earlier reasons I recorded (this being an agreed or uncontroversial fact) that the General Protections Application Not Involving Dismissal commenced by Mr Eckel on 26 March 2018 had proceeded to a conciliation conference but was later discontinued by Mr Eckel on the understanding that BCH would arrange for the provision of appropriate workplace behaviour training.[25] While Mr Eckel was ultimately not satisfied as to the manner in which BCH gave effect to this commitment, the fact remains that his inability to pursue a Non-Dismissal General Protections Claim was not causally related to the contravention.
[25] See earlier reasons at [13].
In any case, had the act of discontinuance not been interposed I would not have made an order for compensation in recognition of the loss to pursue this claim. As noted above, Mr Eckel’s employment with BCH came to an end because his fixed term contract expired. The operation of legislative provisions then produced the result that Mr Eckel was no longer able to pursue any general protections claim other than one that involved a dismissal (FW Act, s 372(b)).
I consider in all of the circumstances that BCH should be ordered to pay to Mr Eckel a modest amount of general compensation in recognition of the hurt and disappointment he experienced because of the refusal by BCH to employ him in the new role and the manner in which the interview process was conducted, especially through the involvement of Ms Powell (a person about whom Mr Eckel had made complaints). Taking into account the absence of any probative evidence other than Mr Eckel’s assertions that his physical and mental health deteriorated following his departure from BCH, and the fact that Mr Eckel promptly obtained additional employment with Hepburn Health Service, I consider that an amount of $4,750 is appropriate.
Should the Court make an order under s 546(1) of the FW Act?
I consider that it is appropriate to make an order under s 546(1) of the FW Act that BCH pay a pecuniary penalty. In circumstances where it is now clear that the primary object of a penalty is deterrence, the fact that BCH contravened s 340(1) of the FW Act requires that I signal, through financial sanction, that such conduct is not acceptable.
The question that I need to then resolve is the amount of such penalty.
The contravention was serious, in the sense that it was responsive to Mr Eckel making complaints about his employment and availing himself of a right to apply to the Fair Work Commission. It also had consequences, at least superficially, for Mr Eckel’s employment with BCH. However, I accept that upon deeper analysis it was unlikely if not impossible that Mr Eckel was going to be employed in the new role and that his employment came to an end on 30 June 2018 through the effluxion of time rather than through some unlawful act of BCH.
BCH submitted that its contravention did not involve intentional defiance of the FW Act. However, I have difficulty accepting this submission because it ignores the nature of the conduct that constitutes a contravention of s 340(1) of the FW Act. The subsection prohibits conduct that is engaged in for a particular proscribed reason, or for reasons that include as a substantial reason the proscribed reason. It makes no sense to say that a person who engaged in contravening conduct for a proscribed reason did so unintentionally. This is the case even where the Court finds culpability through a failure to discharge the reverse onus and where the contravention involved decision-making against the backdrop of strained and difficult working relationships. It is also the case that the contravention by BCH involved senior management insofar as its then CEO, Ms Reeves, was the person who decided ultimately that Mr Eckel should not be offered the new role. However, I accept that the contravention did not have characteristics or occur in circumstances that made it a serious contravention for the purpose of s 557A of the FW Act.
Mr Eckel failed to prove any economic loss arising from the contravention. This is a factor that would suggest the assessment of a penalty at the lower scale.
I accept that BCH provides important health services to many vulnerable people in the regional city of Ballarat (and surrounding regions) and that it receives both Commonwealth and State government funding to perform this work. It is a substantial organisation based on the breadth of its service delivery and the number of its employees.
As noted earlier, Mr Duffy has sworn an affidavit in which he said that BCH has made a significant investment in its P&C expertise and has implemented a range of reforms in process and in the availability and provision of expert advice. While the detail of such reforms is not before the Court, I accept that BCH has demonstrated a preparedness to learn from the experience in Mr Eckel’s case and is taking proactive steps to redress shortcomings in its recruitment process. Mr Duffy has also deposed that there is no history of BCH having contravened the FW Act on any other occasion. I accept this evidence and on the basis of it, I am satisfied that the penalty that is to be assessed need not incorporate an element for specific deterrence.
I also accept the submission by BCH that it manifested contrition through the apology given to Mr Eckel through its current CEO, Mr Duffy. While Mr Duffy was not the CEO at the time of the contravention, he is nonetheless now authorised to offer the apology on its behalf. I accept that it is genuinely given. I also accept that BCH should not be criticised for failing to demonstrate any contrition at any earlier stage. This is a clear example of a proceeding that inevitably was going to run to a final hearing, including because it had characteristics of the kind that I referred to in the earlier reasons.[26]
[26] See earlier reasons at [4], [16], [17], [21], [2].
Taking all the foregoing matters into account I am satisfied that $8,500 is the appropriate penalty for BCH’s contravention of s 340(1) of the FW Act.
BCH did not put any evidence before the Court about the capacity of the organisation to absorb a penalty, including whether payment would come at the expense of its service delivery. I cannot speculate on such matters and therefore do not consider it necessary to make any further adjustment to the proposed penalty on account of it operating oppressively on BCH.
To whom should the penalty be paid?
Subsection 546(3)(c) of the FW Act provides that the Court may order that a pecuniary penalty be paid to a “particular person”. Mr Eckel is comprehended by this description. In Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4, at [116] the Full Court observed:
In this appeal…the policy considerations of s 546(3) “speak loudly” in the circumstances to justify the payment of the penalty imposed to the individual affected by the contravention who, under the authority of the FW Act, commenced and maintained this enforcement proceeding. If [the applicant] had not pursued the action, it is unlikely that it would have been pursued. He took on the proceeding at obvious cost to himself.
It is appropriate, and I therefore propose, to make an order under s 546(3)(c) of the FW Act that BCH pay to Mr Eckel the amount of $8,500 as a pecuniary penalty.
I certify that the preceding eighty (80) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Symons . Associate:
Dated: 22 June 2023
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