Fair Work Ombudsman v Construction, Forestry and Maritime Employees Union (North East Link Project Case)
[2024] FedCFamC2G 396
•2 May 2024
FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA
(DIVISION 2)
Fair Work Ombudsman v Construction, Forestry and Maritime Employees Union (North East Link Project Case) [2024] FedCFamC2G 396
File number(s): MLG 3368 of 2021 Judgment of: JUDGE CHAMPION Date of judgment: 2 May 2024 Catchwords: INDUSTRIAL LAW – Application for civil penalties for contraventions of s. 499 and 500 of the Fair Work Act 2009 (Cth) – Where the Respondents made admissions as to contraventions – Declaratory relief – Order for penalties appropriate to meet the objective of deterrence Legislation: Building and Construction Industry (Improving Productivity) Act 2016 (Cth) s. 46
Fair Work Act 2009 (Cth) ss. 480, 499, 500, 546, 550, 556, 793
Cases cited: Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Yatala Labour Prison Case) [2022] FCA 492
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Castlemaine Police Station Case) (2018) 258 FCR 158; [2018] FCAFC 15
Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157; [2018] HCA 3
Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Beams Lift Case) [2021] FCA 1414
Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) (U Vet School Case) [2022] FCA 1068
Australian Building and Construction Commissioner v Pattinson (2022) 247 CLR 540; [2022] HCA 13
Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Adelaide Airport Case) [2021] FCA 951
Canturi v Sita Coaches Pty Ltd (ACN 004 444 900) [2002] FCA 349
Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25; [2016] FCAFC 181
Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (2019) 272 FCR 290; [2019] FCAFC 201
Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Bruce Highway Caloundra to Sunshine Upgrade Case) (2020) 281 FCR 365; [2020] FCAFC 203
Construction, Forestry, Maritime, Mining and Energy Union v Fair Work Ombudsman (Boggo Road Cross River Rail Case) [2023] FCA 507
Construction, Forestry, Maritime, Mining and Energy Union v Fair Work Ombudsman (The 250 East Terrace Case) [2023] FCAFC 161
Fair Work Ombudsman v Brook [2024] FCA 262
Fair Work Ombudsman (formerly Australian Building and Construction Commissioner) v Construction, Forestry, Maritime, Mining and Energy Union (The Constitution Place Case) (No 2) [2023] FCA 13
Mason v MWREDC Ltd. [2012] FCA 1083
Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union [2023] FedCFamC2G 1060
Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union (Kiama Aged Care Centre Case) (No 3) [2023] FCA 1324
R v Byrnes (1995) 183 CLR 501
Trade Practices Commission v CSR Ltd (1991) ATPR 41-076; [1990] FCA 521
Division: Division 2 General Federal Law Number of paragraphs: 103 Date of last submission/s: 25 March 2024 Date of hearing: 18 March 2024 Place: Melbourne Counsel for the Applicant: Mr Denton and Ms Pase Solicitor for the Applicant: HWL Ebsworth Counsel for the Respondents: Mr Saunders Solicitor for the Respondents: Construction, Forestry, Maritime and Energy Union ORDERS
MLG 3368 of 2021 FEDERAL CIRCUIT AND FAMILY COURT OF AUSTRALIA (DIVISION 2)
BETWEEN: FAIR WORK OMBUDSMAN
Applicant
AND: CONSTRUCTION, FORESTRY AND MARITIME EMPLOYEES UNION
First Respondent
PAUL TZIMAS
Second Respondent
ORDER MADE BY:
JUDGE CHAMPION
DATE OF ORDER:
2 MAY 2024
PENAL NOTICE TO THE RESPONDENTS:
·CONSTRUCTION, FORESTRY AND MARITIME EMPLOYEES UNION; AND
·PAUL TZIMAS.
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.On 4 February 2021, the Second Respondent (Mr Tzimas) committed a contravention of section 499 of the Fair Work Act 2009 (Cth) (FW Act) when, while exercising a State or Territory OHS right, he failed to comply with a reasonable request of the occupier of the site at Trinity Marles Playing Fields in Bulleen Victoria (Project) to comply with an occupational health and safety requirement that no person enter the plant operating zone without authorisation (First Contravention).
2.On 4 February 2021, Mr Tzimas committed a contravention of section 500 of the FW Act when he acted in an improper manner while exercising rights in accordance with Part 3-4 of the FW Act at the Project by:
(a)entering the plant operating zone without authorisation; and
(b)refusing to exit the plant operating zone when reasonably requested to do so, (Second Contravention).
3.On 4 February 2021, the First Respondent (CFMEU) also committed a contravention of:
(a)section 499 because it was involved in the First Contravention within the meaning of s 550 of the FW Act; and
(b)section 500 because it was involved in the Second Contravention within the meaning of s 550 of the FW Act.
THE COURT ORDERS THAT:
1.The CFMEU pay the following pecuniary penalty in respect of the contravention of section 500 referred to in declaration 3(b) above: $43,290.
2.Mr Tzimas pay the following pecuniary penalty in respect of the contravention of section 500 referred to in declaration 2 above: $7,990.
3.The pecuniary penalties imposed on the CFMEU and Mr Tzimas be paid to the Commonwealth of Australia within 28 days of the date of the order.
4.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 CHAMPION:
INTRODUCTION
The Fair Work Ombudsman seeks declarations and penalties for contraventions of ss. 499 and 500 of the Fair Work Act 2009 (Cth) (FW Act) against Mr Paul Tzimas (Mr Tzimas) and the Construction, Forestry and Maritime Employees Union (CFMEU).
I will refer to this case as the North East Link Project Case so as to distinguish it, if necessary, from other cases involving the same parties: Fair Work Ombudsman v Construction, Forestry and Maritime Employees Union and Tzimas (North East Link Project Case) [2024] FedCFamC2G 396.
The contravening conduct
The contravening conduct occurred on 4 February 2021 at a construction site located at the Trinity Marles Playing Fields in Bulleen, Victoria (the Site) during work on the North East Link Project.
On 4 February 2023 an excavator operator was digging a caisson shaft at the Site. The OHS reasons for the exclusion of people from an area where an excavator was operating require no elaboration. Mr Tzimas did not comply with a reasonable request from the Site occupier to comply with an occupational health & safety (OHS) requirement not to enter without authorisation an area in which an excavator was operating, referred to as a Plant Operation Zone (POZ) and thereby contravened s. 499. Further, Mr Tzimas entered the POZ without authorisation and failed to leave the POZ when reasonably requested to do so and thereby contravened s. 500.
Mr Tzimas, as of 4 February 2021, was a “permit holder” for the purposes of Part 3.4 of the FW Act. He no longer holds a permit. On 4 February 2201 he was, and remains, an official of the CFMEU.
Mr Tzimas has admitted two contraventions of ss. 499 and 500 of the FW Act. The CFMEU has admitted that it was “involved in” within the meaning of s. 550 of the FW Act the contraventions of Mr Tzimas, and thereby is also taken to have committed, each of the 2 contraventions of Mr Tzimas.
The issue for decision is the appropriate penalty to be ordered against Mr Tzimas and the CFMEU pursuant to s. 546(1) of the FW Act. It was common ground that it was appropriate that the court order a pecuniary penalty against each of them. The parties disputed the level of the appropriate penalty.
Civil double jeopardy
The same conduct of Mr Tzimas contravened both ss. 499 and 500 of the FW Act. Notwithstanding that the Respondents admit contraventions of ss. 499 and 500 of the FW Act, s. 556 of the FW Act precludes a person being required to pay more than one civil penalty for particular conduct (CFMMEU v ABCC (2019) 272 FCR 290; [2019] FCAFC 201, [16] (Bromberg, Wheelahan and Snaden JJ).
Because of s. 556, the FWO elected to seek a penalty for the contravention of s. 500 of the FW Act and not in respect of contravention of s. 499 (Canturi v Sita Coaches Pty Ltd (2002) 116 FCR 276; [2002] FCA 349, [84]). The penalties I will impose “will in fact be imposed in respect of the respondents’ conduct, rather than in respect of the particular statutory provisions in breach of which it was undertaken” (FWO v Brook [2024] FCA 262, [32]).
Maximum penalties
The maximum penalty that might be imposed under s. 546(1) against each of the Respondents is $13,320 for Mr Tzimas and $66,600 for the CFMEU.
The parties’ positions
The FWO submitted that “the appropriate penalties to be imposed on the respondents are at the higher end of those available for the CFMEU and in the higher range for Mr Tzimas.” In oral submissions it refined that position to seek a penalty as to each respondent in the range of 80% to 90% of the maximum with a discount of approximately 15% because of admissions, cooperation, training and contrition.
The CFMEU and Mr Tzimas submitted “a single penalty for Tzimas and the CFMEU’s respective s. 500 contraventions should be imposed. That penalty should be below the middle of the range.” In oral submissions, the Respondents refined that position to submit that an appropriate penalty for each Respondent was in the “second quintile”: that is, 20% – 40% of the maximum.
Summary of penalties
I will order that Mr Tzimas pay a pecuniary penalty of $7,990 (which approximates 60% of the maximum). I will order that the CFMEU pay a pecuniary penalty of $43,290 which approximates 65% of the maximum.
My reasons follow.
MATERIAL BEFORE THE COURT
The FWO tendered:
(a)affidavits of Mr Peter Quinn, the excavator operator at the time of the contraventions, made on 16 November 2022 (and its annexures) and made on 8 January 2024 (and its annexures) (with the deletion of paragraphs [28]–[29] and PQ-16);
(b)an affidavit of Mr Barney Adams, a solicitor for the FWO, made on 21 December 2023; and
(c)a table which set out 207 prior contraventions of industrial laws by the CFMEU.
The Respondents relied on an affidavit of Mr Paul Tzimas made on 8 February 2024 (Tzimas Affidavit).
THE ADMITTED FACTS
The following facts are admitted on the pleadings.
In about September 2019 CPB Contractors Pty Ltd (CPB) was engaged by the State of Victoria to deliver the Early Works Package on the North East Link Project (Project). The Project involved work at the Site.
CPB was the occupier of the Site. CPB employed Mr Brendan Luddy (Mr Luddy) in the position of supervisor. Quinn Civil Pty Ltd (Quinn Civil) was carrying out excavation works at the Site. Mr Peter Quinn (Mr Quinn) was the director of Quinn Civil. On 4 February 2021 Mr Quinn was working as an excavator operator at the Site.
On 4 February 2021 Mr Tzimas arrived at the Site at approximately 8.00 am and produced his Federal and State entry permits.
Shortly after arriving on the Site, Mr Tzimas issued to Mr Luddy two notices of suspected contraventions (NOSC) of the Occupational Health and Safety Act 2004 (Vic). The two NOSCs raised issues of inadequate Safe Work Method Systems (SWMS) and monitoring of silica dust from the haul road (and other issues).
In entering the Site, Mr Tzimas was exercising rights in accordance with Part 3.4 of the FW Act.
On 4 February 2021, as a part of the Project, workers of Quinn Civil and in particular, Mr Quinn, were performing excavation works at the Site and, in particular, in the construction of a caisson shaft in the POZ. The POZ extended to exclude unauthorised persons within the reach of excavator’s arm, an area covering about a 10 metre circular radius around the excavator.
CPB requested that no person enter the POZ without authorisation. The request was in writing in a “Pre-Start Card”, standard in the construction industry, and implied or to be inferred because it was “so obvious it did not require specific comment”. The request was reasonable because of the OHS issues inherent in the operation of heavy machinery such as an excavator. It was common ground that CPB’s request that no person enter the POZ without authorisation was a “reasonable request” within the meaning of that phrase in s. 499 of the FW Act.
Initially, after Mr Tzimas arrived, work stopped between about 8.00 am and 8.20 am while Mr Luddy, the Site supervisor, addressed the safety issues Mr Tzimas had raised. Sometime between 8.30 am and 8.40 am, after the issues raised by Mr Tzimas had been addressed, Mr Luddy instructed the workers of Quinn Civil to recommence work. This instruction included Mr Quinn’s recommencement of the operation of the excavator in the POZ.
Mr Tzimas then requested that work stop again because the address SWMS relating to the excavation work was apparently for a site located in Yalambie, not the Bulleen site. Mr Luddy declined to direct work stop because his position was that the issue of the address on the SWMS could be amended while work continued.
About 5 minutes after work had recommenced, Mr Tzimas walked into the POZ while Mr Quinn was operating the excavator with a full bucket in the air. Mr Quinn stopped operating the excavator because it was not safe to continue operations while Mr Tzimas remained in the POZ.
Mr Luddy requested that Mr Tzimas leave the POZ by saying words to the effect: “come on Paul [Tzimas], we can’t stop the job. We have to keep going. You can’t be inside this zone. You shouldn’t be here”.
It was admitted that Mr Luddy’s request for Mr Tzimas to leave the POZ was a reasonable request because of “the potentially serious consequences of non-compliance with the request” and that “the excavator could not continue operating and working safely while [Mr] Tzimas was located inside the POZ”.
Mr Tzimas did not comply with Mr Luddy’s request to leave the POZ.
Mr Tzimas’ own evidence was that “in total I was in the POZ for no more than about 10 minutes”: Mr Tzimas (CB531, [54]).
It was common ground that Mr Tzimas called Worksafe at 8.46 am to request their attendance at the Site. Worksafe inspectors duly arrived at the Site about 11.30 am. The Worksafe inspectors did not identify any concern with the SWMS. Work resumed at the Site at 1.35 pm after Mr Tzimas left the Site.
THE EVIDENCE
I note the following additional facts as to the evidence.
As to the evidence, the parties, by consent, and in a way which narrowed the issues and was of assistance to the Court, proceeded solely on the basis of submissions. No witness was cross-examined as to his affidavit and, accordingly, no party sought to impugn the credit of any witness.
Mr Quinn’s affidavits
Mr Quinn was a director of Quinn Civil. On 4 February 2021 he was operating the excavator to sink a caisson shaft.
In his affidavit made on 16 November 2022 he deposed that between 8.30 am and 8.40 am on 4 February 2021 he was told that it was okay to recommence work and that he got into the cab of the excavator and started digging. He then deposed at [54]–[55] (CB52) that:
54. At approximately 8:40 am, I picked up a load in the bucket of the excavator and I turned the excavator around to my left to load the truck. At this point, I saw Mr Tzimas sitting on the excavator’s tracks. He was sitting in the POZ on the left-hand track of the excavator. Mr Luddy was standing about two or three metres behind Mr Tzimas. As soon as I saw Mr Tzimas on the track inside the POZ, I immediately stopped operating the excavator, however the full bucket remained elevated.
55. The place and timing of where and when Mr Tzimas was sitting in the track was extremely dangerous. I remember thinking at the time that I saw him that it was lucky that moments before I had seen him, I had swung the bucket from right to left to unloaded it if I had lifted the bucket and moved the excavator back on its tracks to unload the bucket without seeing him the excavator would have crushed Mr Tzimas. There are no rear mirrors on the excavator so I would not have seen that Mr Tzimas was behind the excavator.”
[Emphasis added]
In his second affidavit made on 8 January 2024, Mr Quinn deposed that having to continue to deal with Mr Tzimas at the Site on a regular basis after the events of 4 February 2021 was “distressing and upsetting”: Mr Quinn, 8 January 2024, (CB174, [32]).
Mr Adams’ affidavit
Mr Barney Adams is a solicitor, retained by the FWO in this matter. By reference to the CFMEU’s annual return and financial reports annexed to Mr Adams’ affidavit, it was common ground that the CFMEU is a large and well-resourced organisation.
Mr Tzimas’ affidavit
Mr Tzimas deposed that he has been employed as an organiser by the Victoria-Tasmania branch of the construction and general division of the CFMEU since August 2017.
Mr Tzimas deposed that he attended at the Site on 4 February 2021 because of “safety concerns” which (among others) included “inadequate first aid facilities… [and] excessive dust resulting from a lack of dust suppression”: Mr Tzimas, (CB526, [19]).
Mr Tzimas deposed that he was “generally aware that in the construction industry when an excavator is in operation it is unsafe to be near where the arm of the excavator could reach”: Mr Tzimas, (CB530, [40]). He then deposed at [41]–[45] (CB531):
41. It did not occur to me that I should not enter the POZ. I thought I could inspect any plan, thing or substance I had inquired about, and that I could enter the POZ.
42. After I had spoken to the operator, Mr Luddy said words to the effect, ‘I want you out of this zone so we can get going’ and ‘You can’t be inside this job’. Mr Luddy had followed me to where I was standing and was beside me in the POZ at this point.
43. Mr Luddy said words to the effect, “Can we get out of here and keep going [with the excavation]”?
44. I said words to the effect “let me inspect what I’m here to do and then we’ll move on”. In my view at the time, I needed to remain in the POZ to continue to inspect the excavator, including the safety notices and warnings on the excavator, which had to be legible in accordance with the risk assessment.
45. In total I was in the POZ for no more than ten minutes.
CONTRAVENTIONS
Section 499 contravention
Each of Mr Tzimas and the CFMEU has admitted to contravening s. 499 of the FW Act. Each admits that it was a reasonable OHS requirement that applied to the Project that no person enter the POZ unless authorised to do so. Each admits that Mr Tzimas contravened s. 499 of the FW Act by entering the POZ on 4 February 2021 and not leaving the POZ when Mr Luddy reasonably requested he do so.
Section 500 contravention
43 Section 500 of the FW Act provides as follows:
Permit holder must not hinder or obstruct
A permit holder exercising, or seeking to exercise, rights in accordance with this Part must not intentionally hinder or obstruct any person, or otherwise act in an improper manner.
Section 500 may be contravened in two ways. Section 500 has two limbs: a prohibition on a permit holder intentionally hindering or obstructing a person (the first limb) and a prohibition on a permit holder otherwise acting in an “improper manner” (the second limb). The contravention in this case concerns Mr Tzimas as a permit holder acting “in an improper manner” under the second limb of the conduct s. 500 proscribes. There is no basis for commencing with an a priori assumption that acting in an “improper manner” is objectively less serious than conduct which constitutes an intentional hindering or obstruction. “The proper course is to assess the gravity of the instant contraventions having regard to the facts and circumstances in which they occurred” (ABCC v CFMMEU (The Adelaide Airport Case) [2021] FCA 951, [132] (White J)).
As to acting in an “improper manner”, “impropriety consists in a breach of the standards of conduct that would be expected of a person in the position of the alleged defendant by reasonable persons with knowledge of the duties, powers and authority of the position and circumstances of the case” (ABCC v CFMEU (Castlemaine Police Station Case) (2018) 258 FCR 158; [2018] FCAFC 15 (Dowsett, Tracey, and Charlesworth JJ), [39] with reference to R v Byrnes (1995) 183 CLR 501, 514-515).
Each of Mr Tzimas and the CFMEU admit that Mr Tzimas acted in an “improper manner” on 4 February 2021 by entering the POZ without authorisation and failing to leave the POZ when reasonably requested to do so and thereby contravened s. 500 of the FW Act.
PRINCIPLES GOVERNING THE DETERMINATION OF PENALTIES
Pursuant to s. 546(1) of the FW Act the court may order a person to pay a pecuniary penalty that the court considers is “appropriate”, if the court is satisfied that the person has contravened a civil remedy provision.
In ABCC v Pattinson (2022) 274 CLR 540; [2022] HCA 13 (Pattinson) the High Court said at [9]:
… the purpose of a civil penalty is primarily, if not solely, the promotion of the public interest in compliance with the provisions of the Act by the deterrence of further contraventions of the Act…
Deterrence is both specific deterrence and general deterrence.
In terms of an appropriate penalty, it is required that there be “reasonable relationship between the theoretical maximum and the final penalty imposed”. That “relationship” will be established where the penalty does not exceed what is reasonably necessary to achieve “the deterrence of future contraventions of a like kind by the contravenor and by others” (Pattinson, [10]).
In Pattinson, the plurality noted at [66] that “the theory of s. 546 of the Act is that the financial disincentive involved in the imposition of a pecuniary penalty will encourage compliance with the law by ensuring that contraventions are viewed by the contravenor and others as an economically irrational choice.”
In Pattinson, the High Court explained that the various factors — pertaining both to the character of the contravening conduct and to the character of the contravenor — which French J (as he then was) identified in Trade Practices Commission v CSR Ltd (1991) ATPR 41-076; [1990] FCA 521 (CSR) (at 52-152–52-153) — were relevant to determining the quantum of the penalty which would achieve deterrence in the case (Pattinson, [18], [55]).
However the court ought not to be distracted by a concern, drawn from the criminal law, that a penalty must be proportionate to the seriousness of the conduct that constituted the contravention (Pattinson, [10]).
Concepts such as totality, parity and course of conduct familiar from the criminal law may be deployed to assist in the assessment of what may be considered reasonably necessary to deter further contraventions of the Act (Pattinson, [45]). “[…]Those concepts, when appropriated into civil penalties, must be applied under a different prism to the criminal law. They are tools which may assist in ensuring the object of deterrence is achieved while avoiding oppressive severity…” (Justin Gleeson SC and Kunal Sharma, ‘Course of Conduct and Totality in Civil Penalties’ in The Law of Civil Penalties (Federation Press, 2023, 105).
Instinctive synthesis
Noting that the purpose of imposing a civil penalty to achieve the purpose of deterrence as identified in Pattinson, the fixing of a penalty continues to require a process of instinctive synthesis to the extent that the court must integrate a number of identified input factors into a single, numerical outcome with the aim of achieving deterrence (ABCC v Reckitt Benckiser (Australia) Pty Ltd (2016) 340 ALR 25; [2016] FCAFC 181, [175]. As Justice Bromwich and Anna Holtby noted in ‘What’s in the Box? Instinctive Synthesis in the Determination of Civil Penalties’ in The Law of Civil Penalties (Federation Press, 2023, 34), instinctive synthesis is not the application of a complex mathematical formula and is “not the incremental development of a numerically consistent set of additions and subtractions for sentencing judges to make based on the nature of each factor present in a case and the weight given to it”.
APPROPRIATE PENALTY FOR MR TZIMAS
The following matters are relevant as to what is necessary to achieve the statutory purpose of specific and general deterrence in the current case.
The nature and extent of the contravening conduct
Section 500 provides that a person “must not … act in an improper manner.” The nature of the impropriety will vary from case to case. It remains relevant in the fixing of an “appropriate” penalty to consider “the nature and extent of the contravening conduct” as to what is necessary to assess “a penalty of appropriate deterrent value” (Pattinson, [18]; CSR, [42(1)]).
The nature and extent of Mr Tzimas’ contravening conduct was objectively serious because entering the POZ and remaining there without authorisation had the potential to expose Mr Tzimas to serious injury. In terms of acting in an “improper manner” it was a serious departure from safe conduct with regard to OHS rules, which are so necessary to ensure the safety of all on a building site. Mr Tzimas was a person experienced in the construction industry, who professed to have attended at the site because of OHS concerns and then proceeded to conduct himself in a highly “improper manner” by sitting on the tracks of an operating excavator. Because of the starkness of the departure from safe conduct with regard to OHS rules, his conduct had a high level of impropriety. The assessment of an appropriate penalty for the purpose of deterrence requires recognition of the seriousness of the conduct.
The Respondents characterised Mr Tzimas’ conduct as “imprudent and impulsive” (RS, [28]) and “foolish and unthinking” (RS, [26]). I accept that the evidence does not establish that Mr Tzimas arrived at the site with any premeditated intent to act in an improper manner. I also accept that he may have acted emotionally and in that sense in an “unthinking” way. Further, his actions occurred over a relatively short period of time of about 10 minutes.
Nonetheless, his entering of the POZ and his refusal to comply with Mr Luddy’s request to leave were deliberate and intentionally defiant actions.
The importance of the obligations of permit holders under Part 3.4 of the FW Act
I accept the FWO’s submissions that the scheme of Part 3.4 of the FW Act — which balances the competing right of organisations to represent their members in the workplace and the right of occupiers of premises and employers to go about their business without undue inconvenience (see, in particular, s. 480 as to the Part’s object) — is undermined if permit holders who contravene their obligations incur no real or meaningful consequence. If a penalty is to act as a deterrent to prevent similar contraventions by like-minded persons it must have the necessary “sting or burden” to act as a deterrent (ABCC v CFMEU (Non-Indemnification Case) (2018) 262 CLR 157; [2018] HCA 3, [116]).
It is also striking in this case that Mr Tzimas was entering premises to investigate a suspected contravention of state or territory OHS laws (see; FW Act, s. 480) but then himself acted in an “improper manner” as to occupational health and safety issues of a kind which had ostensibly caused him to attend the Site in the first place.
The other contraventions of Mr Tzimas
The FWO submits, and I accept, that there is a particular need for specific deterrence for Mr Tzimas because he:
(a)On 26 July 2018 has previously contravened s. 46 of Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (ABCC v CFMMEU (U Vet School Case) [2022] FCA 1068);
(b)admitted 5 previous contraventions of s. 500 of the FW Act which occurred in December 2019 in respect of which the current situation is that penalties are awaiting redetermination in the Federal Court (ABCC v CFMMEU (The Beams Lift Case) [2021] FCA 1414);
(c)committed admitted contraventions of s. 500 on 2 May 2022 – subsequent to the conduct at the Site (Fair Work Ombudsman v CFMMEU [2023] FedCFamC2G 1060).
Mitigating factors
I have above identified several matters which underpin the need for a substantial penalty to achieve the statutory object of the deterrence. There are some mitigating factors which reduce the level of the necessary penalty to achieve a deterrent effect.
These factors include admissions, cooperation, contrition, training and the fact that Mr Tzimas no longer holds a permit. I turn next to these matters.
Utilitarian benefit of cooperation
I take into account the utilitarian value of admissions of wrongdoing and cooperation with the FWO in this proceeding because those matters free the regulator to investigate and prosecute other contraventions by avoiding a hearing on liability and thereby increases deterrence. As Katzmann J put it in FWO (formerly ABCC) v CFMMEU (The Constitution Place Case) (No 2) [2023] FCA 13 at [44]:
…The relatively early admissions spared the regulator the costs of a trial, freeing up its resources to increase the chances that other contraveners will be detected and brought before the courts, which has the effect of increasing deterrence…
Mr Tzimas’ admissions and cooperation with authorities which has avoided the need for a liability hearing means that a lesser penalty will be imposed than may have otherwise been the case without the admissions and his cooperation.
Contrition
A “genuine remorse for the contravention” may mean it is appropriate to impose only a “moderate penalty” because “no more would be necessary to incentivise the contravenors to remain mindful of their remorse” (Pattinson, [47]).
Mr Tzimas states at [52] of his affidavit (CB532):
On reflection, I should not have entered the POZ at the Trinity site on 4 February 2021 and should have left when asked to do so. At the time, I did not think I was not permitted to enter the POZ. I was wrong about this. I also did not think I was required to leave when asked. I was wrong about this.
He also said that “I regret my contravening and am committed to being diligent to comply with occupational health and safety requirements on site in the future” (Mr Tzimas, CB533, [58]).
Mr Tzimas’ contrition mitigates, to some extent, the level of penalty needed to achieve the aims of deterrence.
Training
Mr Tzimas gave evidence that on 18 November 2023 he attended training with Mr Brian Lacy AO organised by the CFMEU. The training “caused him to reflect on his conduct and why it contravened the FW Act”. It focused on the terms and requirements of “ss 499 and 500 of the Fair Work Act and the importance of complying with them” (Mr Tzimas, CB533, [57]).
The FWO acknowledged that the training engaged in by Mr Tzimas “is a positive step forward and accepts that this Court can take it into account in the assessment of penalty” (FWO submissions in reply, [12]).
Training has not, however, proved a fully effective measure in terms of Mr Tzimas’ contravening conduct. The Beams Lift Case is a matter in which Mr Tzimas is awaiting determination of penalties for 5 contraventions of s. 500 which occurred in December 2019, approximately 14 months before the contravening conduct in this case. In The Beams Lift Case Kerr J at first instance at [133] referred to Mr Tzimas’ evidence before him that he had “undertaken one-on-one training conducted by Brian Lacy AO on behalf of the Union relevant to his controlling his emotions on the job”. He undertook this training in October 2020 and August 2021. Kerr J’s careful identification of the evidence discloses the fact that even though Mr Tzimas received training in October 2020, following his contravening conduct in The Beams Lift Case the contravening conduct which I am considering occurred in February 2021 just 4 months after the date of that training.
Mr Tzimas no longer holds a permit
Because Mr Tzimas no longer holds a permit there is a reduced risk of future contravention which bears upon the need for specific deterrence (see CFMMEU v FWO (Boggo Road Cross River Rail Case) [2023] FCA 507, [72]–[73]). I have taken that matter into account. This fact does not affect the analysis as to general deterrence.
Conclusion
In all the circumstances, I will impose a penalty fixed at $7,990 (approximately 60% of the maximum penalty of $13,320).
By way of a final check and application of the totality principle, I must ensure that the total penalty is not, in all the circumstances excessive. I am satisfied that the penalty of $7,990 is appropriate.
In circumstances in which the FWO did not press for personal payment order against Mr Tzimas, I do not make such an order.
APPROPRIATE PENALTY FOR THE CFMEU
The contravening conduct: the statutory attribution of Mr Tzimas’ conduct to the CFMEU
79 Section 793(1) of the FW Act creates a statutory attribution of Mr Tzimas’ conduct to the CFMEU. It is as follows:
(1) Any conduct engaged in on behalf of the body corporate:
(a) by an officer, employee or agent (an official) of the body within the scope of his or her actual or apparent authority;
[…]
is taken, for the purposes of this Act, and the procedural rules, to have been engaged in also by the body.
The CFMEU did not submit that Mr Tzimas was acting outside the scope of his actual or apparent authority. Accordingly, his conduct is taken, for the purposes of the FW Act, also to have been engaged in by the CFMEU.
In circumstances in which an officer, employee or agent of the body corporate is the principal contravenor, a body corporate can be knowingly concerned in a contravention of a provision of the FW Act within the meaning of s 550(2)(c) of the FW Act solely by means of the statutory attribution under s 793 of the conduct of an officer of the body corporate to that body corporate (CFMMEU v ABCC (The Bruce Highway Caloundra to Sunshine Upgrade Case) (2020) 281 FCR 365; [2020] FCAFC 203, [42], [51]–[53], [55] (Reeves, Charlesworth and O’Callaghan JJ).
Mr Tzimas’ conduct is taken to be the conduct of the CFMEU.
To the extent that the assessment of an appropriate penalty is to be determined by reference to the “nature and extent of the contravening conduct” as contrasted with facts concerning the contravenor (Pattinson, [18]; CSR, [18(2)]), Mr Tzimas and the CFMEU are in the same position because the same conduct is at issue.
The seriousness of the impropriety of the conduct — with its stark departure from acceptable OHS standards — requires the imposition of a meaningful penalty against the CFMEU to achieve the aim of deterrence.
The CFMEU as a recidivist contravenor
In Pattinson the High Court held the CFMEU’s “persistent adherence to a strategy of non-compliance warranted the imposition of the maximum penalty” even “where the contravening conduct was not the worst example of contravening conduct” (Pattinson [59]). I accept the FWO’s submissions that “the circumstances of the contravenor may be more significant than the circumstances of the contravention.” In Pattinson, with reference to the CFMEU, the High Court referred to the primary judge’s observations that the CFMEU was “notoriously, a serial offender” in that it had historically acted in disregard of the law and appeared to treat the imposition of pecuniary penalties in respect of those contraventions as “little more than the cost of the preferred business model”. When Pattinson was decided, the union had contravened civil remedy provisions of the FW Act or its predecessor on approximately 150 occasions (Pattinson, [21]).
In the table the FWO prepared for this case, the FWO noted 207 prior contraventions of industrial laws. It submitted that the CFMEU has contravened s. 500 of the FW Act in 56 different judgments and s. 499 in 7 different judgments.
Contraventions “of a like kind”
In Pattinson, the High Court said that the deterrent object of a penalty is directed to deterring future contraventions “of a like kind” (Pattinson, [9]–[10], [50], [61]). The Respondents submitted that “contraventions of “a like kind” are “not contraventions of industrial law generally.”
I am not persuaded that the fact that the contraventions in this case were not “planned”, or the fact that they were not motivated by some unlawful industrial purpose or part of some unlawful strategy or plan, significantly mitigates the appropriate penalty.
In Pattinson, notwithstanding the court’s reference to contraventions “of a like kind” the High Court said that the CFMMEU “identified no basis on which this court might properly ignore” what was then approximately 150 occasions on which the CFMMEU had contravened civil remedy provisions of the [FW Act] or its predecessor (Pattinson, [21], [22]).
Since Pattinson, at an intermediate Full Court level in CFMMEU v FWO (The 250 East Terrace Case) [2023] FCAFC 161 at [76], a Full Court said that “the primary judge was not obliged to identify a specific industrial objective to the advancement of which the Picket was directed, nor to associate any such objective with prior contravening conduct. That he did not do so is irrelevant.”
The fact that the CFMEU is a recidivist contravener means that “deterring the prospect of repeated wrongdoing necessarily requires a greater incentive in the case of wrongdoers who have exhibited the levels of indifference toward compliance with the law that are fairly attributable to the CFMMMEU and its officers” (The 250 East Terrace Case, [78]).
Other factors
In Pattinson, High Court identified that “where the official responsible for a deliberate breach has been disciplined by the union” that may mitigate penalty (Pattinson, [47]). There was no evidence that the CFMEU had disciplined Mr Tzimas which would mitigate the penalty.
The observation I set out above that it is important that a breach of the obligations of a permit holder under Part 3.4 of the FW Act carry a meaningful consequence to achieve deterrence also applies to the CFMEU.
There was no contest that the CFMEU is a large, and well resourced, organisation.
I take into account as a mitigating factor the utilitarian benefit of the CFMEU’s cooperation in this case. The CFMEU has admitted to the contraventions and cooperated with the regulator. Its admissions and its cooperation have avoided the need for a trial.
Further, the CFMEU has initiated training for Mr Tzimas. I can, and do, take the training into account in the assessment of the appropriate penalty. However, the weight I give to training is limited by the fact that there was no evidence that the CFMEU has engaged Mr Lacy (or any other person) to ensure compliance. As Katzmann J observed in FWO v CFMMEU (Kiama Aged Care Centre Case) (No 3) [2023] FCA 1324 at [23], “If the Union were serious about eliminating or reducing the risk of contravening conduct, it would have rolled out an education program to all union officials across the country upon their engagement and at regular intervals thereafter”. There was no evidence of that kind in this case.
Conclusion
In all the circumstances, I will impose a penalty fixed at $43,290 on the CFMEU (approximately 65% of the maximum penalty of $66,600).
Among other factors, the long record of the CFEMU as a recidivist contravenor accounts for the imposition of a higher level of penalty against it than that which I will impose on Mr Tzimas.
Again, by way of a final check and application of the totality principle, I must ensure that the total penalty is not, in all the circumstances excessive. I am satisfied that the penalty of $43,290 is appropriate.
Inclusion of penal notice
In accordance with both parties’ submissions, I have endorsed the order with a penal notice as a proper course for ensuring enforcement of the order (Mason v MWREDC Ltd. [2012] FCA 1083, [43]).
Declarations
Although the court has a discretion, in proceedings brought by a regulator involving contraventions of civil penalty provisions, a declaration is an appropriate order to record the basis upon which the proceeding has been resolved even when penalties are to be imposed (Cruse v Multiplex Limited (2008) 172 FCR 279, [53]) (Goldberg and Jessup JJ). Neither party contended otherwise. I will make declarations in the form contended for by the FWO and not opposed by the Respondents.
Section 556 “is directed at penalty, not contravention”. As a result, s. 556 does not operate to prevent the Court from finding that there were two separate contraventions constituted by the same conduct (ABCC v CFMMEU (The Yatala Labour Prison Case) [2022] FCA 492, [49] (O'Sullivan J).
I make a finding accordingly. I will make declarations in the form contended for by the FWO and not opposed by the Respondents.
I certify that the preceding one hundred and three (103) numbered paragraphs are a true copy of the Reasons for Judgment of Judge Champion. Associate:
Dated: 2 May 2024
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