Fair Work Ombudsman v Construction, Forestry and Maritime Employees Union
[2024] FedCFamC2G 235
•14 March 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Construction, Forestry and Maritime Employees Union [2024] FedCFamC2G 235
File number(s): MLG 663 of 2022 Judgment of: JUDGE MANSINI Date of judgment: 14 March 2024 Catchwords: INDUSTRIAL LAW – FAIR WORK – admitted contravention by CFMEU official who inappropriately threatened a site safety manager in an attempt to prevent exercise of workplace rights to report to the then building regulator – admitted contravention by CFMEU through its involvement – consideration of relevant factors – declaratory relief granted and pecuniary penalties ordered. Legislation: Building and Construction Industry (Improving Productivity) Act 2016 (Cth)
Crimes Act 1914 (Cth) ss. 4AA
Fair Work Act 2009 (Cth) ss. 12, 340, 513, 539, 546, 550, 687, 701, 793
Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth)
Fair Work (Registered Organisations) Act 2009 (Cth) ss. 27
Occupational Health and Safety Act 2004 (Vic)
Cases cited: A & L Silvestri Pty Limited v Construction, Forestry, Mining and Energy Union [2008] FCA 466
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157
Australian Building and Construction Commissioner v Construction, Maritime, Mining and Energy Union (Constitution Place Case) [2020] FCA 1070
Australian Building and Construction Commissioner v Pattinson [2022] HCA 13
Australian Opthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8
Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate; Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate (the Agreed Penalties Case) [2015] HCA 46
Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non‑Indemnification Personal Payment Case) [2018] FCAFC 97
Construction, Forestry, Maritime, Mining and Energy Union v Fair Work Ombudsman (The 250 East Terrace Case) [2023] FCAFC 161
Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union [2023] FedCFamC2G 1060
Trade Practices Commission v CSR Ltd [1990] FCA 762
United Group Resources Pty Ltd v Calabro (No 7) [2012] FCA 432
Wong v The Queen [2001] HCA 64
Division: Division 2 General Federal Law Number of paragraphs: 81 Date of last submission/s: 23 November 2023 Date of hearing: 4 December 2023 Place: Melbourne Counsel for the Applicant: Mr A Denton with Mr Crocker Counsel for the Respondents: Mr P Boncardo Solicitor for the Applicant: Lander & Rogers Lawyers Solicitor for the Respondents: Construction, Forestry and Maritime Employees Union ORDERS
MLG 663 of 2022 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: CONSTRUCTION, FORESTRY AND MARITIME EMPLOYEES UNION
First Respondent
MR GERALD MCCRUDDEN
Second Respondent
ORDER MADE BY:
JUDGE MANSINI
DATE OF ORDER:
14 MARCH 2024
PENAL NOTICE TO THE RESPONDENTS:
·CONSTRUCTION, FORESTRY AND MARITIME EMPLOYEES UNION; AND
·GERALD MCCRUDDEN.
IF YOU (BEING THE PERSON BOUND BY THIS ORDER):
(A) REFUSE OR NEGLECT TO DO ANY ACT WITHIN THE TIME SPECIFIED IN THIS ORDER FOR THE DOING OF THE ACT; OR
(B) DISOBEY THE ORDER BY DOING AN ACT WHICH THE ORDER REQUIRES YOU NOT TO DO,
YOU WILL BE LIABLE TO IMPRISONMENT, SEQUESTRATION OF PROPERTY OR OTHER PUNISHMENT.
ANY OTHER PERSON WHO KNOWS OF THIS ORDER AND DOES ANYTHING WHICH HELPS OR PERMITS YOU TO BREACH THE TERMS OF THIS ORDER MAY BE SIMILARLY PUNISHED.THE COURT DECLARES THAT:
1.The Second Respondent contravened s.340(1)(b) of the Fair Work Act 2009 (Cth) (Act) by taking adverse action against another person on 25 June 2021 when he threatened another person (as admitted) in an attempt to prevent the other person’s exercise of workplace rights.
2.The First Respondent contravened s.340(1)(b) of the Act, by its involvement within the meaning of s.550 of the Act in the conduct of the Second Respondent subject of declaration 1 and by operation of s.793 of the Act.
THE COURT ORDERS THAT:
3.The Second Respondent pay the pecuniary penalty of $3,300 in respect of his contravention subject of declaration 1.
4.The First Respondent pay the pecuniary penalty of $33,300 in respect of its involvement in the contravention subject of declaration 2.
5.The pecuniary penalties be paid to the Commonwealth of Australia within 28 days.
6.There be no order as to costs.
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 Mansini
INTRODUCTION
This decision is about the pecuniary penalty to be imposed on the CFMEU and a CFMEU official for their admitted contraventions of the Fair Work Act 2009 (Cth) (Act).
The contraventions related to an intimidatory threat by a CFMEU official to a site health and safety manager made in an effort to prevent the exercise of workplace rights to report to the then building regulator. The threat to the manager’s future career in the building industry was made during the official’s visit to the otherwise private workplace for purposes of investigating alleged safety issues.
These reasons explain the relief granted.
CONTEXT
The following is a summary of the admitted facts and unchallenged evidence before the Court.
The parties and relevant actors
The matter involves the following:
(a)The Applicant is the Fair Work Ombudsman (FWO);
(b)The First Respondent is the Construction, Forestry and Maritime Employees Union (CFMEU);
(c)The Second Respondent, Mr McCrudden, is and at all relevant times was an officer or official of the CFMEU for the purposes of s.793 of the Act (as defined in s.12 of the Act);
(d)McConnell Dowell Constructors (Aust) Pty Ltd and Decmil Southern Pty Ltd (the Contractor) were engaged by the State of Victoria through Major Roads Projects Victoria to design and construct improvements to the Mordialloc Freeway between the Dingley Bypass and south of Springvale Road (Project);
(e)Health and Safety Manager, Mr Fuller, was at all relevant times employed by the Contractor to work on the Project;
(f)Health and Safety Manager, Ms Cannata, was at all relevant times employed by the Contractor to work on the Project.
About the CFMEU official and his experience
In 2005, Mr McCrudden relocated from Ireland to Melbourne, where he commenced work in the construction industry.
From approximately 2005 to 2010, Mr McCrudden worked as a labourer (for a bricklayer, a labour hire company and in the domestic construction industry) and as a scaffolder in the domestic construction industry.
In 2010, Mr McCrudden was elected as a union delegate and was an elected Health and Safety Representative under the Occupational Health and Safety Act 2004 (Vic) (OHS Act).
From approximately 2010 to 2016, Mr McCrudden continued to work as a scaffolder in the domestic and civil construction industry while in his capacity as a Health and Safety Representative.
At the time of the hearing and since late 2017, Mr McCrudden was employed in the role of “Organiser” at the CFMEU. In that role, he looks after the interests of CFMEU members employed in the civil construction industry.
As CFMEU Organiser, Mr McCrudden’s duties include inquiring into suspected contraventions of the OHS Act that affect CFMEU members or workers eligible to be members of the CFMEU and assisting members employed in the civil construction industry with industrial or workplace health and safety issues.
The incident of concern
On 25 June 2021, Mr McCrudden entered the Project in his role as CFMEU Organiser and permit-holder. He was there for the purpose of inquiring into suspected contraventions of the OHS Act.
Upon arrival at the Project on this day, Mr McCrudden was escorted to an area of the Project by a Superintendent (employed by the Contractor, a Mr Josh Willis) where he met Mr Fuller and Ms Cannata.
As Mr McCrudden was concluding his visit at the Project, Mr Fuller waved and grinned at him where he was positioned on an abutment. Mr McCrudden gave evidence that he viewed the actions of Mr Fuller as a demonstration of hostility and an attempt to antagonise him.
In response, Mr McCrudden recalled saying to Mr Fuller words to the effect of:
You will not have much of a future if you continue talking to the ABCC. You’ll see mate, you’ll see.
In cross-examination at the hearing, Mr McCrudden’s evidence was that he felt very frustrated at the time, that he did not think about what he said and that the statement he made was something that just came out.
The CFMEU official’s reflections on his 25 June 2021 conduct
In his written affidavit, Mr McCrudden deposed to accepting full responsibility for his conduct on 25 June 2021. He also offered the following reflections:
(a)He appreciates that Mr Fuller had a right to talk to the Australian Building and Construction Commissioner (ABCC) (as it then was) or any other regulator without any apprehension about what it would mean for his future in the industry.
(b)He sincerely regrets his conduct and the words he said to Mr Fuller.
(c)He had not thought through what he said and its seriousness and effects.
(d)He is uncomfortable with the fact that union resources have been directed at defending these proceedings and that penalties will be ordered against himself and the CFMEU in relation to his conduct, which is something that could have been avoided.
(e)He takes ownership of his behaviour toward Mr Fuller and is committed to ensuring that there will be no repeat of such behaviour in the future.
(f)He is committed to ensuring that, as a union official, he represents workers in a professional way that delivers a safe workplace for them without resorting to conduct such as threats.
In the week prior to hearing, Mr McCrudden had reached out to Mr Fuller by email. The email, which Mr McCrudden insisted that he wrote himself, was in the following terms:
Dear Grant,
Mordialloc Freeway Project – 25 June 2021
I attempted to contact you yesterday by phone but unfortunately couldn’t get through to you. I was reaching out to you for the purpose of expressing my sincere regret for my conduct on 25 June 2021.
I have reflected on my behaviour and I acknowledge that you had the right to contact the ABCC, and it was wrong of me to threaten you to prevent you from doing so. I was frustrated and not thinking clearly at the time but there is no excuse for my comments.
I am committed to avoiding a repeat of such behaviour in the future and I hope that we can move forward from this.
I am sorry I could not contact you earlier about this but I had been advised by my lawyers not to discuss the matter with anyone after the case was started. I found out yesterday from my lawyers that I was no longer under any restrictions on speaking about what I said to you on 25 June 2021 and I wanted to reach you straight away.
Please feel free to contact me if you would like to discuss. Otherwise, I look forward to seeing you on site again in the future and working with you.
All the best,
Gerry
(italics per original)
Mr McCrudden explained that he had not communicated with Mr Fuller in these terms any sooner because: in the time since these proceedings commenced he had been advised not to contact Mr Fuller; and he was understood to say that, prior to the commencement of these proceedings, he had not realised the seriousness of his actions.
Mr McCrudden also told the Court that there are posters and stickers about the ABCC around the CFMEU’s office and accepted that he was probably wearing stickers on his hard hat on the day of the subject incident. When pressed in cross-examination, Mr McCrudden could not recall exactly what was expressed on the posters and stickers and claimed not to have thought about those or the role that the ABCC played in the industry until the hearing.
The CFMEU official’s training
Mr McCrudden deposed to having completed the following training:
(a)Resilience training arranged by the CFMEU in March 2022 for its union organisers, conducted by an external organisation (Mentor Hub), in which Mr McCrudden had participated in six sessions of two hours’ duration (on 3 May 2022, 24 May 2022, 7 June 2022, 17 June 2022, 28 June 2022 and 19 July 2022).
(b)One-on-one individual coaching session by Mentor Hub focussed on how to improve leadership skills and manage and prioritise tasks. Further to this, a particular focus of the training was learning how to conduct and manage behaviour in confrontational situations and to implement techniques to de-escalate conflict.
(c)One-on-one training with a Mr Brian Lacy (with substantial expertise and experience in workplace relations), which focussed on the admitted contravention in this matter, as well as a broader discussion regarding freedom of association, what is meant by the term 'workplace right' and the meaning of coercion and false and misleading representations (on 15 May 2023).
(d)Training with Mr Lacy as part of a group, which covered the rights and responsibilities of permit holders under work health and safety laws at a general level (in March 2021).
(e)A training course about the rights and responsibilities of a permit holder for the purposes of obtaining a federal right of entry permit (a matter that the Fair Work Commission may take into account in deciding whether an official is a fit and proper person pursuant to s.513(1)(a) of the Act) (on 25 February 2021).
In cross-examination at the hearing, Mr McCrudden was asked about the 25 June 2021 incident which had occurred a few months after he had received the group adverse action training by Mr Lacy (in March 2021). His evidence was that he could not recall in detail Mr Lacy’s training which he sought to explain on account of taking in and doing a lot of things every day, and it being hard for him to recall every detail of what he does. The cross-examiner took Mr McCrudden to the presentation given at the training (annexed to Mr Lacy’s evidence) which included a slide about adverse action and the specific provision subject of Mr McCrudden’s admitted contravention in this proceeding. Mr McCrudden denied that he was not paying attention during this training and maintained that he just did not recall the specific details of the training which was some two years ago.
In relation to training undertaken since then, Mr McCrudden’s evidence was that he has benefitted greatly from the Mentor Hub sessions and deposed to his belief that, had the resilience training described above been conducted sooner, he would have implemented such techniques when engaging with Mr Fuller such as using controlled breathing and taking time to consider his responses. Further, as a result of the resilience training, Mr McCrudden said that he continues to utilise techniques taught in the program when he encounters confrontation on job sites.
In his written affidavit, Mr McCrudden also deposed that, as a result of undertaking the one-on-one training with Mr Lacy, he has a better understanding of the scope of the general protections provisions contained in the Act, and why Mr Fuller had the right, if he wished, to make a complaint to the ABCC. He further said that Mr Lacy’s training reinforced that he cannot threaten or take adverse action against someone for reasons including that they have exercised a workplace right, have proposed to exercise a workplace right or, as was the case on 25 June 2021 involving Mr Fuller, to prevent them from exercising a workplace right.
Prior conduct
According to the FWO prepared table of prior contraventions, as at 1 December 2023, the CFMEU’s prior contravening of s.340 of the Act had been subject of 12 different judgments.
At the time of hearing, Mr McCrudden had not been found to have contravened industrial laws prior to the incident subject of these proceedings.
Financial capacity
The financial report of the CFMEU’s Construction and General Division, Victoria-Tasmania Divisional Branch (for the year ended 31 March 2023) was before the Court as evidence of the CFMEU’s financial capacity. There was no evidence that the CFMEU’s financial capacity weighed against any particular order as to penalty.
There was no evidence of Mr McCrudden’s financial capacity or inability to pay any penalty (whether of the scale sought by the FWO or otherwise within jurisdiction) as may be ordered in these proceedings.
PROCEEDINGS BEFORE THIS COURT
By its amended statement of claim filed 4 April 2023 and submissions to the Court, the FWO sought:
(a)Declaratory relief, specifically:
(i)A declaration that, on 25 June 2021, Mr McCrudden contravened s.340(1)(b) of the Act by taking adverse action against a representative of the Contractor by stating to the representative of the Contractor “you’re not going to have much of a future if you continue to speak with the ABCC. You’ll see mate, you’ll see”; and
(ii)A declaration that the CFMEU is liable for the contravention at (a).
(b)Pecuniary penalties against each of the CFMEU and Mr McCrudden pursuant to s.546 of the Act by reason of the contravention in the ranges of $42,624.00-$47,952.00 for the CFMEU and $5,328-$6,393.60 for Mr McCrudden, arrived at as follows:
Party Maximum aggregate penalty Recommended penalty Further discount for cooperation Total CFMEU $66,600 $53,280 - $59,940
(80% - 90% of maximum)20% $42,624.00 - $47,952.00 McCrudden $13,320 $6,660 - $7,992
(50% - 60% of maximum)20% $5,328 - $6,393.60
The CFMEU and Mr McCrudden did not oppose the application to the extent of the declarations sought or the form of those declarations.
The CFMEU and Mr McCrudden also did not oppose the imposition of penalties but opposed the level of penalties sought and asked for a suspended payment in Mr McCrudden’s case. They contended for penalties in the ranges of $16,650.00-$19,980.00 for the CFMEU and $1,320.00-$1,930.00 for Mr McCrudden.
Materials relied upon
The FWO relied on:
(a)Amended statement of claim filed on 4 April 2023;
(b)Affidavit of Zoe Clippingdale filed on 11 September 2023;
(c)Outline of submissions on penalty filed on 20 October 2023;
(d)Outline of submissions on penalty in reply filed on 17 November 2023; and
(e)Oral submissions of counsel at hearing on 4 December 2023.
Having initially, on 14 March 2023, foreshadowed a claim to privilege against self-exposure to a penalty, Mr McCrudden came to admit a single contravention and, in that limited respect, was understood to have effectively waived the privilege and advanced a positive case in opposition.
The CFMEU and Mr McCrudden relied on:
(a)CFMEU’s amended response filed on 18 April 2023;
(b)Mr McCrudden’s amended response filed on 18 April 2023;
(c)Affidavit of Brian Lacy filed on 4 October 2023;
(d)Affidavit of Mr McCrudden filed on 6 October 2023, who also gave evidence and was subject of cross-examination at hearing;
(e)Outline of Respondents’ (joint) submissions on penalty filed on 3 November 2023; and
(f)Oral submissions of counsel at hearing on 4 December 2023.
THE CONTRAVENTION
On the materials before the Court, there was no dispute and I find that the FWO is (and was at all material times):
(a)A statutory appointee of the Commonwealth, appointed by written instrument pursuant to s.687(1) of the Act;
(b)A fair work inspector pursuant to s.701 of the Act;
(c)An authorised applicant for orders in proceedings relating to a contravention of a civil remedy provision to which the Australian Building and Construction Commissioner was a party, and which was pending in court immediately before 7 December 2022, pursuant to item 323 of Part 3 of Schedule 1 of the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth); and
(d)By reason of sub-paragraphs (a) to (c) above, a person with standing and authority to bring these proceedings under s.539 of the Act.
There was no dispute and I find that the CFMEU is (and was at all material times):
(a)An organisation of employees registered under the Fair Work (Registered Organisations) Act 2009 (Cth) and by reason of being so registered, a body corporate pursuant to s.27 of that Act;
(a)A body corporate capable of being sued in its registered name; and
(b)An "industrial association" within the meaning of that term in s.12 of the Act.
There was also no dispute and I find that Mr McCrudden is (and was at all relevant times):
(a)An "officer" of the CFMEU for the purposes of s.793 of the Act (as defined in s.12 of the Act); and
(b)In relation to all matters in respect of Mr McCrudden, for the purposes of s.793 of the Act, acting in his capacity, and within the scope of his authority, as an officer of the CFMEU.
There was no dispute and I find that the two entities earlier defined as the Contractor were the “occupier” of the Project within the meaning of s.12 of the Act.
By their amended defences:
(a)Mr McCrudden admitted that he contravened s.340(1)(b) of the Act on 25 June 2021, by taking adverse action against Mr Fuller – specifically, by stating to Mr Fuller “you’re not going to have much of a future if you continue to speak with the ABCC. You’ll see mate, you’ll see”; and
(b)In relation to the contravention, the CFMEU admitted that Mr McCrudden had actual, apparent or ostensible authority to act on behalf of the CFMEU;
(c)By operation of s.793 of the Act, the CFMEU admitted that the actions and conduct of Mr McCrudden were also the actions and conduct of the CFMEU, the CFMEU possessed the same state of mind as Mr McCrudden in relation to the above conduct; and
(d)In the circumstances, the CFMEU contravened s.340(1)(b) of the Act by reason of Mr McCrudden’s admitted conduct on 25 June 2021 as pleaded.
I am satisfied that the amended statement of claim filed in this matter and upon which the FWO relies complies with the rules of pleading and properly pleads causes of action that support the grant of relief. In particular, I am satisfied that the facts alleged in the statement of claim and the admissions of the CFMEU and Mr McCrudden in their amended defences supported by the affidavit of Mr McCrudden establish that:
(a)Mr McCrudden contravened s.340(1)(b) of the Act by taking adverse action against Mr Fuller; and
(b)By operation of s.793 of the Act, the actions and conduct of Mr McCrudden were also the actions and conduct of the CFMEU and the CFMEU possessed the same state of mind as Mr McCrudden in relation to his actions and conduct.
The Court has a wide discretion to make declarations. Having regard to the admissions of the CFMEU and Mr McCrudden and in the particular circumstances of this case, I am satisfied that this is an appropriate case for declaratory relief, if for no other reason than to record the Court’s disapproval of the contravening conduct.
APPROPRIATE PENALTIES
The Court’s power to impose pecuniary penalties in respect of the established contraventions resides in s.546(1) of the Act.
Section 546(1) permits the Court to impose a pecuniary penalty “that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision”. For the above reasons, that state of satisfaction exists.
It falls to determine what level of penalty is appropriate as against the CFMEU and Mr McCrudden in light of their respective contraventions and concessions in this respect.
The value of a penalty unit at the relevant time was $222 and the maximum penalty which might be imposed for each contravention of s.340 of the Act is therefore:
(a)$66,600 in respect of the CFMEU; and
(b)$13,320 in respect of Mr McCrudden,
(see s.4AA of the Crimes Act 1914 (Cth) and Notice of Indexation of the Penalty Unit Amount [F2020N00061]; ss.539(2) and 546(2)(b) of the Act).
Factors relevant to the Court’s discretion
The Court’s discretion in determining appropriate penalties is very broad: A & L Silvestri Pty Limited v Construction, Forestry, Mining and Energy Union [2008] FCA 466 at [6].
As affirmed by the High Court of Australia in Australian Building and Construction Commissioner v Pattinson [2022] HCA 13 (Pattinson), the purpose of a civil penalty under the regime provided by the Act is primarily, if not wholly, protective in the promotion of the public interest in compliance with the provisions of the Act and in (general and specific) deterrence of further contraventions. An “appropriate” penalty being one that “strikes a reasonable balance between oppressive severity and the need for deterrence in a particular case”: Pattinson at [15]-[16] and [41] citing the plurality in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate; Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate (the Agreed Penalties Case) [2015] HCA 46 and French J in Trade Practices Commission v CSR Ltd [1990] FCA 762 (CSR Ltd); and as cited in Construction, Forestry, Maritime, Mining and Energy Union v Fair Work Ombudsman (The 250 East Terrace Case) [2023] FCAFC 161.
The task of assessing what amount to impose involves the selection of a figure taking into account all factors relevant to the particular case: Wong v The Queen [2001] HCA 64 at [75]. The oft cited decision of French J in CSR Ltd listed those factors relevant to an overall assessment of penalty, restated by the Full Court in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non‑Indemnification Personal Payment Case) [2018] FCAFC 97 at [20]:
..the nature, character and seriousness of the conduct; the loss and damage caused; the circumstances in which the conduct took place; the size of the contravener and its degree of power; the deliberateness of the conduct and the time over which it occurred; the degree of involvement of senior officials or management; the culture of the organisation as to compliance or contravention; and, any co-operation with the regulator and contrition.
This is not an exhaustive list. Further, each case warrants an “idiosyncratic” approach and a careful analysis of all relevant circumstances - as was stated in Australian Opthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 at [12]:
Penalties are not a matter of precedent. The choice of penalty must be dictated by the individual circumstances of a case, not by a line by line comparison with another case.
I consider the present matter in light of those well-established principles and case authorities (for completeness, the principles from the authorities regarding penalties imposed under the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) having equal application here: Australian Building and Construction Commissioner v Construction, Maritime, Mining and Energy Union (Constitution Place Case) [2020] FCA 1070 at [205]).
Nature, character and seriousness of the contravening conduct
The contravening conduct is not disputed. It involved CFMEU official, Mr McCrudden, making an intimidatory threat directed at the Project Health and Safety Manager and his future career in the industry. Like any threat, it was intended to achieve an end – and, in this way, was a deliberate attempt to prevent the manager from exercising his workplace right (and responsibility) to make a complaint or inquiry to the then building industry regulator.
As came to be admitted during the course of these proceedings, there is no question that the verbal threat made by Mr McCrudden toward the Project Health and Safety Manager constituted a contravention of s.340(1)(b) of the Act, was serious and should not be repeated in the future. While Mr McCrudden gave evidence of his perception of the Project Health and Safety Manager’s hostility toward him, which essentially prompted his “spur of the moment” response, the threat was properly not sought to be excused by any alleged antagonism. Indeed, in reflecting on his own behaviour subject of the incident, Mr McCrudden gave evidence to the Court whereby he acknowledged that the role of a union official is to represent workers in a professional way that delivers a safe workplace and without inappropriately resorting to conduct such as threats.
Also relevant to the assessment of the nature, character and seriousness of the admitted contravention is the context of the workplace relations laws. Mr McCrudden’s conduct was counter to the objects of the “general protections” provisions at Part 3-1 of the Act, which exist in order to protect workplace rights – like that of the Project Health and Safety Manager who had a role (and responsibility) to report certain matters under the then building laws (which, in turn, had the main object of providing an improved workplace relations framework for building work) and was able to make a complaint or inquiry to the then building regulator. Further, Mr McCrudden came to be in the position to deliver the threat at the Project Health and Safety Manager’s place of work because of his statutorily conferred right to enter the Project as a CFMEU official and permit holder. Mr McCrudden was there at the Project to investigate alleged non-compliance with safety laws yet chose to engage in non-compliance with the workplace laws in the course of his work.
The admitted contravention did not occasion any loss or damage or have any known impact on any person, on the evidence before the Court. When viewed in its proper context, the absence of any practical impact does not alter the character or the seriousness of the contravention in the particular circumstances of the present case.
On account of its knowing concern and by operation of the body corporate liability provision at s.793 of the Act, the CFMEU’s involvement in Mr McCrudden’s contravention was also admitted.
This case is distinct from that of Pattinson to the extent that, here, the CFMEU was an indirect contravenor. The evidence did not bear out what the paraphernalia around the CFMEU’s office and on Mr McCrudden’s hardhat in fact said. It did not establish that such paraphernalia was demonstrative of the organisational culture or (dis)regard for the then building regulator or some greater industrial objective. Nonetheless, the nature and seriousness of the CFMEU’s admitted contravention in this matter is to be viewed against its record of statutory contraventions: Pattinson at [9]. The CFMEU’s record of contravening is extensive. On the updated schedule before the Court, it has been involved in contraventions of the same provision as the instance offence on at least 12 prior occasions (noting that, in some of the 12 judgements referred to by the FWO, there was more than one contravention of s.340). The union’s historical contravening is reflective of its organisational culture and attitude toward compliance with workplace laws.
Mr McCrudden did not have a prior contravention or record. That state of affairs ought not be surprising and might be consistent with public expectations – that a union official empowered with the statutory right to enter private workplaces might conduct themselves in accordance with the very workplace laws that the union is responsible to enforce on behalf of its members.
Having regard to the above, the contravening conduct is objectively serious and reflective of a disregard for the workplace laws that exist to protect what was, at the relevant time, a workplace right.
It was not directly argued but, as the questions appeared to arise on the materials and for completeness, the seriousness of the contravening conduct is not reduced by the subsequent change to the law which resulted in the building regulator (the ABCC) being disbanded or in the change to the officers of the union on account of their separation with the Mining Division.
Corrective action, cooperation with the FWO and contrition
Mr McCrudden’s evidence of his acceptance of responsibility and commitment that he will not repeat such unacceptable behaviour in the future may be taken at face value. However, Mr McCrudden also made a troubling admission – that he did not initially consider his behaviour to be as serious as he now appreciates. That is troubling given, at the time of the contravention, he had considerable experience in the construction industry and had attended CFMEU-sponsored training of direct relevance (including appropriate behaviour of a permit holder and about his obligations to comply with the contravened provision).
Mr McCrudden’s communication to Mr Fuller was made, in writing, some 2.5 years after the subject incident between them and proximate to the hearing. Its value or utility is therefore questionable. The evidence that Mr McCrudden wrote the email himself was unconvincing in the moment. That said, any assistance with drafting the email is not necessarily reflective of insincerity. And, in fairness, Mr McCrudden was not accused of lying or given an opportunity to respond to such allegation and as such there is no basis to make an adverse credibility finding.
It is also relevant that the CFMEU has facilitated training for its employees and officials including Mr McCrudden about the operation of adverse action laws and resilience which is understood to involve education in personal regulation of emotions or management of behaviours to the standard expected of a union official entering a private workplace. That Mr McCrudden no longer recalls the specifics of the group training about adverse action is not a great endorsement of the calibre or utility of the training he has undertaken or reflective of his ability to retain those learnings and apply them in the performance of his role going forward.
These are all relevant factors but, in the present case, given limited weight in the exercise of the penalty setting discretion.
Size and financial circumstances of the contravenors
There is no evidence from Mr McCrudden of his financial position, such that he says he cannot afford to pay the FWO’s proposed penalty. However he did contend for a suspended penalty and for a significantly lesser penalty to be imposed (addressed further below).
It is uncontroversial that the CFMEU is a large industrial association with financial capacity to pay the FWO’s proposed penalty with no impact on the CFMEU’s viability. Nonetheless, the CFMEU also sought a lesser penalty be imposed with regard to other factors.
Deterrence
The general protections provisions of the Act establish a framework for ensuring the protection of individual workplace rights.
By their admitted conduct subject of these proceedings, Mr McCrudden and the CFMEU have respectively admitted to undermining that framework. In considering the need for deterrence, it is relevant that the occurrence of the threat in contravention of the general protections provisions of the Act occurred during the exercise of the special privilege to enter an otherwise private workplace conferred by another part of the Act.
Mr McCrudden’s acceptance of responsibility and regret in these proceedings has been accepted on its face and is relevant to consideration of the need for deterrence. He has taken steps to receive training as a preventive measure going forward. However, those matters are properly viewed against the context that Mr McCrudden ought to have appreciated the seriousness of his actions from the outset and was vague on the details of his relevant (adverse action related) training when pressed. His conduct was deliberate. Accordingly, there is a need for specific deterrence.
The steps that the CFMEU has taken to offer training to its officials and specifically Mr McCrudden is also relevant and accepted on its face. It has also cooperated with the FWO and these are matters favourable to consideration of the appropriate penalty to be fixed. Similarly, the degree of cooperation in these Court proceedings and the substantial narrowing of issues for determination warrants allowance. That there was no greater industrial objective or strategy established as underlying the contraventions is relevant but does not render the conduct in any way excusable.
The CFMEU’s track record is extensive and reflective of a culture of non-compliance. Consistent with the approach adopted in Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union [2023] FedCFamC2G 1060, the colourful and illuminating insights of prior judicial consideration as to the significance of the union’s track record are respectfully observed but strictly unnecessary to repeat here. Suffice to say that I consider the CFMEU’s contravention in the present case when weighed against the relevant factors before the Court to warrant specific and general deterrence in respect of the CFMEU.
THE APPROPRIATE PENALTY
When all of the above factors are considered, I am satisfied that it is appropriate to impose a pecuniary penalty on Mr McCrudden for his contravention of s.340(1)(b) of the Act on the CFMEU for its involvement in that contravention pursuant to s.550(1) of the Act.
Overall, the combination of factors to which I have referred leads to a conclusion that in respect of Mr McCrudden the contravention is objectively serious and justifies a penalty fixed at a sufficient level to give effect to the object of general and specific deterrence. I shall impose on Mr McCrudden a pecuniary penalty for his contravention of s.340(1)(b) of the Act in the total amount of $3,300.
Also having regard to the combination of factors referred to above, by its involvement as defined by s.550, I shall impose on the CFMEU a penalty reflective of the seriousness of its contraventions and directed at the object of general and specific deterrence. I shall impose on the CFMEU a pecuniary penalty for its contravention pursuant to s.793 in the total amount of $33,300.
Totality principle
The “totality principle” requires that I ask myself, before imposing anything, whether the total of the penalties that I would impose might amount to a disproportionate response to the wrongdoing.
Having considered them in their totality, I am satisfied that the respective penalties are a proportionate response to the wrongdoing of Mr McCrudden and the CFMEU and at an appropriate level to achieve the deterrent objective to which a civil penalty is directed.
Application for suspension of Mr McCrudden’s penalty
Having admitted the relevant contravention and accepted that a pecuniary penalty (at some level) would be imposed, Mr McCrudden asked the Court to consider a wholly suspended penalty for a period of 5 years. The FWO strongly opposed.
The Court has an implied power to suspend a pecuniary penalty arising from the express power under s.546(1) of the Act, where it would be to do what is legally required or ancillary for the accomplishment of the specific remedy of the imposition of a pecuniary penalty: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157 at [114] – [116]. Suspension may be considered appropriate where conditional on the contravenor abstaining from further contraventions, for example where injuncted from further contravening: as in United Group Resources Pty Ltd v Calabro (No 7) [2012] FCA 432 at [74].
I have determined that there is a need for both general and specific deterrence in Mr McCrudden’s case. Mr McCrudden has a clean record as to prior contraventions of the workplace laws. Mr McCrudden has offered his commitment that this will not happen again in the future, which is properly balanced against the reservations expressed above (for example, regarding his inability to recall specifics of the training).
Other relevant factors to the suspension consideration include the absence of any restraint by injunction or otherwise and the quantum of the penalty that has been arrived at, which go to matters of potency and deterrence.
In all of the circumstances of this case I am not satisfied that a suspended penalty for any period of time, in whole or in part, would be a meaningful deterrent or meet the purpose of the civil penalty regime.
CONCLUSION
I will make declarations and orders in accordance with the above reasons.
I certify that the preceding eighty-one (81) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Mansini. Associate: CE
Dated: 14 March 2024
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