Fair Work Ombudsman v Transport Workers Union of Australia - [2010] FMCA 826

FEDERAL MAGISTRATES COURT OF AUSTRALIA

FAIR WORK OMBUDSMAN v TRANSPORT WORKERS UNION OF AUSTRALIA & ANOR

[2010] FMCA 826

INDUSTRIAL LAW – Penalty hearing – unlawful industrial action under the Workplace Relations Act 1996 (Cth) – failure to return right to enter and inspect permit within specified time – relevant factors.

Crimes Act 1914 (Cth), s.4AA
Fair Work Act 2009 (Cth), s.417, 507
Workplace Relations Act 1996 (Cth), ss.3, 494, 736, 745, 769, 841

Alfred v Wakelin (No. 1) [2008] FCA 1455
Alfred v Wakelin (No 4) (2009) 180 IR 335; [2009] FCA 267
Alfred v Walter Construction Group Limited [2005] FCA 497
Australian Ophthalmic Supplies Pty Limited v McAlary-Smith (2008) 165 FCR 560; [2008] FCAFC 8
Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) (1999) 94 IR 231; [1999] FCA 1714
Construction, Forestry, Mining and Energy Union v Hamberger (2003) 127 FCR 309; [2003] FCAFC 38
Draffin v Construction, Forestry, Mining and Energy Union (2009) 189 IR 145; [2009] FCAFC 120
Fair Work Ombudsman v AWU, NSW [2010] FMCA 744
Fair Work Ombudsman v Transport Workers' Union of Australia [2010] FCA 768
Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70
Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61; [2008] FCA 1426
Temple v Powell (2008)169 FCR 169; [2008] FCA 714

Applicant:

FAIR WORK OMBUDSMAN

First Respondent:

TRANSPORT WORKERS UNION OF AUSTRALIA

Second Respondent:

NEALE HARPER

File Number:

SYG3105 of 2009

Judgment of:

Barnes FM

Hearing date:

13 October 2010

Delivered at:

Sydney

Delivered on:

2 November 2010

REPRESENTATION

Counsel for the Applicant:

Mr M S White

Solicitors for the Applicant:

Minter Ellison

Counsel for the Respondents:

Mr A Hatcher SC

Solicitors for the Respondents:

Maurice Blackburn Lawyers

ORDERS

The first respondent pay a pecuniary penalty of $9,900 for contravention of section 494(1) of the Workplace Relations Act 1996 (Cth) (WR Act).
The second respondent pay a pecuniary penalty of $1,320 for contravention of section 494(1) of the WR Act.
The second respondent pay a pecuniary penalty of $100 for contravention of section 745(1) of the WR Act.
Each of the penalties in Orders 1–3 above be paid to the Commonwealth by 30 November 2010.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT SYDNEY

SYG3105 of 2009

FAIR WORK OMBUDSMAN

Applicant

And

TRANSPORT WORKERS UNION OF AUSTRALIA

First Respondent

NEALE HARPER

Second Respondent

REASONS FOR JUDGMENT

These proceedings

On 21 December 2009 the Fair Work Ombudsman (the FWO) commenced proceedings in this court seeking declaratory relief and the imposition of penalties on each of the first and second respondents, respectively the Transport Workers Union of Australia (the TWU) and Neale Harper, in relation to alleged contraventions of provisions of the Workplace Relations Act 1996 (Cth) (the WR Act) which was in force at the time of the conduct in question.
Among other things it was alleged that each of the respondents contravened s.494(1) of the WR Act which provided that industrial action must not be organised or engaged in before the nominal expiry date of a collective agreement or workplace determination. Mr Harper was also said to have contravened s.745(1) of the WR Act by failing to return a Right to Enter and Inspect Premises Permit to a Registrar within seven days after its expiration. Each of these provisions are civil remedy provisions in relation to which a pecuniary penalty may be imposed on a person in contravention.
The matter was listed for hearing on 11 October 2010. However at the start of the hearing the parties filed in court an Agreed Statement of Facts, in which the first and second respondents admitted the facts in paragraphs 1 to 25, 28 to 33, 35 to 37 and 41 to 44 of the Amended Statement of Claim filed by the FWO on 29 July 2010. The parties also agreed that the facts in paragraphs 12 to 21 of the Amended Statement of Claim constituted a single breach of s.494 of the WR Act.
In effect this constituted an admission by the TWU of one contravention of s.494(1) of the WR Act by organising and engaging in unlawful industrial action at the McColl’s Transport Pty Ltd Wetherill Park Depot, New South Wales on 16 February 2009. Mr Harper also admitted such a contravention of s.494(1) of the WR Act as well as a contravention of s.745(1) of the WR Act by failing to return his Right to Enter and Inspect Premises Permit within the stipulated time.
The Agreed Statement of Facts also recorded the parties’ agreement that the FWO would not make an application to Fair Work Australia pursuant to s.507 of the Fair Work Act 2009 (Cth) in relation to the second respondent in reliance, in part or in whole, on the contraventions admitted by him in these proceedings, as long as he did not breach a provision of Part 3-3 or Part 3-4 of the Fair Work Act within two years from the date of the document (11 October 2010). The parties agreed that no party would make any application for costs in this matter.
The parties agreed that it was appropriate for the court to make certain declarations on the basis of the Agreed Statement of Facts and for there to be a hearing on penalty after a relatively short adjournment.
On 11 October 2010 the court made declarations that:
… the First Respondent contravened section 494(1) of Workplace Relations Act 1996 (Cth) by organising and engaging in unlawful industrial action at the McColls Transport Pty Ltd Wetherill Park Depot in the State of New South Wales on 16 February 2009;
… the Second Respondent contravened section 494(1) of the Workplace Relations Act 1996 (Cth) by organising and engaging in unlawful industrial action at the McColls Transport Pty Ltd Wetherill Park Depot in the State of New South Wales on 16 February 2009; and
… in October 2008 the Second Respondent contravened section 745(1) of the Workplace Relations Act 1996 (Cth) by failing to return his Right to Enter and Inspect Premises Permit within the stipulated time.
Other allegations in the Amended Statement of Claim (in relation to alleged breaches of a collective agreement) were not pursued and that part of the application was dismissed.
At the time of the admitted contraventions of the WR Act the relevant maximum penalty for each contravention was $33,000 for a body corporate and $6,600 for an individual (see s.494(6) in relation to contraventions of s.494(1) of the WR Act, s.769(2) in relation to contraventions of s.745(1) of the WR Act and s.4AA(2) of the Crimes Act 1914 (Cth)).

Applicable Principles

The parties were not in dispute as to the applicable principles in relation to the determination of penalty, albeit different authorities were cited.
In written submissions counsel for the applicant referred to the matters Branson J held were appropriate to be considered in relation to the imposition of a penalty for a contravention of the freedom of association provisions in the WR Act as it stood at that time in Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) (1999) 94 IR 231; [1999] FCA 1714 at [7] – [8]. Her Honour’s approach, which was referred to with apparent approval by the Full Court of the Federal Court in Construction, Forestry, Mining and Energy Union v Hamberger (2003) 127 FCR 309; [2003] FCAFC 38 (at [51]), was as follows (at [8]):
The following matters, which are not intended to comprise an exhaustive list, seem to me to be considerations to which the Court may appropriately have regard in determining whether particular conduct calls for the imposition of a penalty, and assuming that it does, the amount of the penalty:
(a)The circumstances in which the relevant conduct took place (including whether the conduct was undertaken in deliberate defiance or disregard of the Act);
(b)Whether the respondent has previously been found to have engaged in conduct in contravention of [that Part] of the Act;
(c)Where more than one contravention of [that Part] is involved, whether the various contraventions are properly seen as distinct or whether they arise out of the one course of conduct;
(d)The consequences of the conduct found to be in contravention of [that Part] of the Act;
(e)The need, in the circumstances, for the protection of industrial freedom of association; and
(f)The need, in the circumstances, for deterrence.
The applicant acknowledged that similar factors have been applied in relation to penalties for unlawful industrial action in contravention of the Building and Construction Industry Improvement Act 2005 (Cth) (the BCII Act) (see Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61; [2008] FCA 1426; Alfred v Wakelin (No.1) [2008] FCA 1455 at [28]; and Alfred v Wakelin (No 4) (2009) 180 IR 335; [2009] FCA 267 at [15]), although courts have also taken into account other factors relevant to the particular circumstances of the contraventions in issue (see for example Temple v Powell (2008) 169 FCR 169; [2008] FCA 714 at [56] – [57] per Dowsett J and the discussion of these principles in Fair Work Ombudsman v AWU, NSW [2010] FMCA 744).
Counsel for the respondents referred to the non-exhaustive list of matters relevant to determining penalty identified by Tracey J in Stuart-Mahoney at [40] in the context of a contravention of the BCII Act (applied in Fair Work Ombudsman v Transport Workers' Union of Australia [2010] FCA 768 at [26] per Besanko J in relation to determination of penalty for contraventions of s.494(1) of the WR Act). In Stuart-Mahoney Tracey J expressed the view (at [40]) that potentially relevant and applicable considerations for determining the appropriate penalty for a contravention of the BCII Act included:
• The nature and extent of the conduct which led to the breaches.
• The circumstances in which that relevant conduct took place.
• The nature and extent of any loss or damage sustained as a result of the breaches.
• Whether there had been similar previous conduct by the respondent.
• Whether the breaches were properly distinct or arose out of the one course of conduct.
• The size of the business enterprise involved.
• Whether or not the breaches were deliberate.
• Whether senior management was involved in the breaches.
• Whether the party committing the breach had exhibited contrition.
• Whether the party committing the breach had taken corrective action.
• Whether the party committing the breach had cooperated with the enforcement authorities.
• The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements.
• The need for specific and general deterrence.
It is important to bear in mind that the Court has a broad discretion, not fettered by such a checklist. The matters listed above should not be treated as a “rigid catalogue of matters for attention” (Australian Ophthalmic Supplies Pty Limited v McAlary-Smith (2008) 165 FCR 560; [2008] FCAFC 8 at [91] per Buchanan J). The penalty “must be dictated by the individual circumstances” of the case (ibid. at [12]). As Buchanan J stated in Australian Ophthalmic Supplies (at [91]) the overriding principle is for the court:
… to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations.
In this case it is appropriate to have regard to a number of factors of particular relevance as part of all the circumstances:
·the nature and extent of the conduct which led to the contraventions;
·the circumstances in which the conduct took place (including whether the conduct was undertaken in deliberate defiance or disregard of the Act);
·where more than one contravention of the Act is involved whether the contraventions are properly distinct or arise out of one course of conduct;
·the consequences of the conduct in contravention of the Act (including the nature and extent of any loss or damage);
·whether either respondent has previously been found to have engaged in conduct in contravention of the Act in general or of provisions such as s.494(1) and/or s.745(1);
·whether senior management was involved in the contraventions;
·the extent of co-operation with the enforcement authority, contrition, corrective action and acknowledgement of wrongdoing;
·the financial position of each of the respondents (if the evidence suggests that they will personally pay any penalty imposed);
·the need for specific and/or general deterrence; and
·the applicant’s views on penalty as a specialist regulatory body.

Nature and circumstances of the conduct in contravention of section 494 of the WR Act

It is convenient to consider the nature and extent of the conduct which led to the s.494 contraventions together with the circumstances in which that conduct took place. The conduct in question is as described in the parts of the Amended Statement of Claim referred to in the Agreed Statement of Facts. The applicant also relied on parts of affidavits filed in these proceedings.
The TWU admitted a contravention of s.494(1) of the WR Act by reason of the conduct of its officers, Mr Harper, an employed organiser of the TWU, and Mr Michael Hopkinson, a site delegate of the TWU. Mr Harper, an officer of the TWU, also admitted such a contravention. The conduct in question was organising and engaging in industrial action prior to the nominal expiry date of the Pure Logistics Transport Pty Ltd Union Collective Agreement that was lodged with the Workplace Authority on 15 May 2008 (the Agreement). The TWU and McColl’s Transport Pty Ltd (McColl’s) and its employees were parties to this Agreement during the relevant period. The Agreement, which I note contained a dispute resolution procedure, had a nominal expiry date of 30 April 2010.
McColl’s conducted a freight operations and transport services business at various depots in New South Wales, including the Wetherill Park Depot (the Depot). It employed employees who were members or were eligible to be members of the TWU, including Mr Hopkinson, who was at all material times a delegate and officer of the TWU.
The admitted contraventions occurred at the Depot on 16 February 2009, but it is necessary to say something about the circumstances leading up to the events of that day.
At approximately 12 noon on Friday 13 February 2009, Mr Corben, McColl’s State Manager, General Freight, terminated the employment of Mr Michael Lindsell. Mr Lindsell, a forklift driver, was a McColls’s employee and TWU workplace representative or delegate. Mr Hopkinson was present at the meeting at which Mr Corben terminated Mr Lindsell’s employment and had been present at a number of prior meetings between Mr Corben and Mr Lindsell (from October 2008 on), in which there had been discussion about whether Mr Lindsell had arrived at work later than the time recorded on his timesheet. Mr Corben’s evidence is that warnings, including formal written warnings, had been given to Mr Lindsell prior to the termination of his employment on 13 February 2009.
It is agreed that during the evening of 13 February 2009, Mr Harper advised Mr Corben that “because Lindsell’s employment had been terminated, a stop work meeting of the McColl’s Employees had been organised to be held at the Wetherill Park Depot on 16 February 2009.”
Mr Corben asked Mr Harper to hold any such meeting between 12 noon and 2 pm as that was the quieter period of the day having regard to the scheduled activities of the morning shift and the afternoon shift, but Mr Harper refused to do so.
It is admitted that prior to 7.30 am on Monday, 16 February 2009 a stop work meeting was arranged by Mr Harper and Mr Hopkinson that was attended by various McColl’s morning shift employees (including Mr Hopkinson) and that “[a]s a consequence of the stop work meeting the Morning Shift Employees failed and/or refused to attend for work or perform work at the… Depot for the duration of the meeting” (from around 5 am to around 7.30 am on 16 February 2009).
Prior to or during that meeting Mr Harper spoke to the morning shift employees about the termination of Mr Lindsell. At the meeting the employees “resolved unanimously to stop work until Lindsell’s employment was reinstated”. As a consequence of this resolution the morning shift employees failed and/or refused to attend for work or perform work at the Depot on 16 February 2009.
At about 7.30 am Mr Harper advised Mr Corben of this action. During that morning Mr Harper and Mr Hopkinson visited Mr Corben in his office “on several occasions asking whether McColl’s would reinstate Lindsell”.
At or about 12 noon on 16 February 2009, Mr Harper and Mr Hopkinson arranged a further meeting of the morning shift employees at which a resolution (seconded by Mr Hopkinson) was passed unanimously to take further strike action by leaving the Depot and not performing any work until a further meeting of the employees to be held at 6 am on 17 February 2009.
As a consequence of this action, the morning shift employees left the Depot before the end of their shift and failed and/or refused to attend for work or perform work at the Depot until the morning of 17 February 2009.
It is also agreed that as a consequence, at or about 2 pm on 16 February 2009, the McColl’s employees who were rostered on the afternoon shift failed and/or refused to attend for or perform work on their rostered shift at the Depot (although the circumstances surrounding the afternoon shift workers are discussed further below).
Neither Mr Harper nor Mr Hopkinson “opposed, counselled against, or attempted to dissuade” the employees from taking the stop work action or the subsequent strike action.
In the Amended Statement of Claim these actions are described as the stop work action and the first, second and third strike actions. However the FWO accepted that the actions on 16 February 2009 formed a continuous course of conduct and that the conduct of each respondent on that day should be penalised as if it were a single contravention.
A number of issues were raised in submissions about the significance of various aspects of this conduct for the purposes of determination of penalty.
The first issue is what led to the industrial action. The catalyst for the commencement of the industrial action was the termination of the employment of Mr Lindsell, a TWU workplace representative. As set out above, it is agreed that Mr Harper advised Mr Corben on 13 February 2009 that “because” Mr Lindsell’s employment had been terminated, a stop work meeting had been organised for 16 February 2009. It is evident from the Agreed Facts and from Mr Corben’s unchallenged affidavit evidence that Mr Harper was involved in the organisation of the stop work meeting as early as 13 February 2009 and that this aspect of the action was premeditated. A copy of the Collective Agreement had been sent to Mr Harper by the Workplace Authority. There is no suggestion that he was not aware of its existence or operation.
Counsel for the respondents contended that the motivation for the industrial action could be characterised as a “protective” reason; that while it could be inferred from the admitted facts that the TWU, through its organiser Mr Harper, was involved in the organisation of the stop work meeting, the continuation of the action and the decision to go home were the result of “democratic decisions” taken by McColl’s morning shift employees at the initial and subsequent meetings; that the action of the afternoon shift employees was a “practical consequence” of the earlier strike action rather than a deliberate decision to engage in industrial action during the afternoon shift; and that the “industrial action which occurred was relatively small in scale”. These aspects of the circumstances were said to “place the s 494 contraventions in the less serious category”.

In FWO v TWU Besanko J suggested that where strikes took place in the context of a tender review process which raised the prospect of Union members losing their employment or suffering significant wage losses, “the circumstances in which the relevant conduct took place [we]re not as serious as if, for example, the industrial action was motivated by a desire to secure better conditions” although the context was not a mitigating factor (at [27]).
The motivation for the industrial action can be characterised as being primarily for a protective reason (concerning the dismissal of a union workplace representative) rather than being designed to secure better wages and conditions during the life of the Agreement. However there is nothing in the evidence before the court to suggest there was any legal justification for the industrial action in the events leading to the termination of Mr Lindsell. There is evidence that he brought unfair dismissal proceedings in the Australian Industrial Relations Commission which were subsequently discontinued in circumstances where the matter settled, although there is no evidence in relation to the terms of settlement.
As to the claim that the action after the stop work action was the result of democratic actions taken by the employees, it is apparent from the affidavit of Eva Domino, a Fair Work Inspector, sworn 8 September 2010 that the notes produced by the TWU in response to a Notice of Produce included a notebook entry of handwritten notes dated 16 and 17 February 2009, which included a notation for 16 February 2009 that during the day, both “Hoppo” (who, it is not in dispute, is Mr Hopkinson) and the note taker went to “the company” on three occasions to negotiate a deal. It appears from these notes that the writer spoke to each and every person about the termination (and it is admitted that prior to or during the first meeting on 16 February 2009 Mr Harper spoke to the employees about the termination of Mr Lindsell). It is not necessary to determine whether the note taker was Mr Harper, given that it is conceded that it can be inferred from the fact that on the evening of 13 February 2009 Mr Harper advised Mr Corben that because Lindsell’s employment had been terminated, a stop work meeting had been organised to be held on 16 February 2009 that Mr Harper was involved in the organisation of that meeting. It is also admitted that he spoke to the employees about the termination of Mr Lindsell prior to or during that meeting.
At the meeting it was resolved unanimously that the employees stop work, the company reinstate Mr Lindsell to full employment and that the company abide by the disputes procedure. Mr Hopkinson then moved a motion that an Occupational Health and Safety Committee be introduced in the company immediately. This motion was also carried unanimously.
The respondents contended that the continuation of the stoppage and the decision to go home were the result of democratic decisions taken by the employees and that this was relevant to the nature and extent of the conduct in question.
It is the case that what occurred after the stop work meeting was in accordance with the stop work resolution passed at that meeting and there is no evidence to suggest that there was any central or premeditated direction from the senior management of the TWU in relation to the strike action that followed the stop work meeting. At the same time, there was a clear involvement of both Mr Harper and Mr Hopkinson at the meeting (at which Mr Hopkinson must have voted in favour of the cessation of work). Neither of the TWU representatives opposed, counselled against or attempted to dissuade the employees from striking. Nor can it be said that the events that occurred after the stop work meeting were not in any way attributable to the TWU, insofar as they involved actions of Mr Hopkinson and Mr Harper who undertook a role of communicating with McColl’s management about the industrial action.
Mr Harper asked Mr Corben that Mr Lindsell be reinstated. He and Mr Hopkinson arranged a further meeting at midday at which the employees resolved to go home. Neither Mr Harper nor Mr Hopkinson attempted to implement the dispute procedures in the Agreement, although the evidence does not go so far as to support the contention that Mr Harper acted irresponsibly.
In addition, the respondents submitted that the failure of McColl’s to introduce an Occupational Health and Safety Committee was a secondary issue. Insofar as it is intended to be suggested that the motivation for the commencement of the industrial action involved an OH&S issue as well as Mr Lindsell’s termination, this is not made out on the Agreed Facts and the evidence before the court.
It was only after it was resolved at the first meeting on 16 February 2009 to stop work until McColl’s reinstated Mr Lindsell that a motion was passed calling for an OH&S Committee to be introduced immediately. There is no evidence that the decision to stop work thereafter related to the latter motion or to the OH&S Committee issue except that after the stop work meeting Mr Harper and Mr Hopkinson had a conversation with Mr Corben in which Mr Harper was asked why the men were not working. He said it was an OH&S issue and that there was no OH&S Committee. However when Mr Corben disputed this, suggesting that it was because of the decision to terminate Mr Lindsell, Mr Harper’s reply was that “The situation is that Lindsell is re-instated, or they won’t go back to work. Alternatively, the bloke should be suspended on full pay and we can the sort it out tomorrow.”
There is no suggestion that any OH&S issue had been raised on 13 February 2009 when Mr Corben was informed by Mr Harper that there would be a stop work meeting. The respondents conceded that the primary cause of the events of 16 February 2009 was the dismissal of Mr Lindsell.
While the applicant did not go so far as to contend that the OH&S issue was a sham in relation to the motivation for events after the stop work meeting, I note that the resolution about an OH&S Committee was merely that the company should introduce such a Committee. There was no suggestion that there should be industrial action based on that issue.
Hence, even if there was a secondary issue of concern to the employees about the failure of McColl’s to introduce an OH&S Committee, the existence of such a secondary concern is not such as to render the circumstances in which the relevant conduct took place less serious than they would otherwise have been. The industrial action was motivated by the termination of Mr Lindsell (in circumstances where there was a provision in the Agreement that until any employer/employee dispute or grievance was resolved, work was to continue). It has not been established that the action after the stop work meeting was motivated by a desire to address OH&S issues.
The OH&S Committee “issue” is not a mitigating factor or such as to mean that the contravention was less serious.
However, relevant to the seriousness of the contraventions, I accept that there is no evidence of any meeting or positive decision that the afternoon shift employees engage in industrial action. Their failure to perform work was a practical consequence of what had occurred in the morning of 16 February 2009, rather than the result of any deliberate decision to engage in industrial action during the afternoon shift. Mr Corben’s evidence is that after the morning shift workers left, even if work had resumed at that point on 16 February 2009, McColl’s could not have delivered or collected much freight that day in the time remaining, having regard to the work allocation of the morning shift employees and the difference between their tasks and those of the afternoon employees.
Further, Mr Corben’s evidence is that three or four of the afternoon shift employees arrived for their shift. It can be inferred that they arrived to work at the usual start time. Mr Corben asked them what they were doing at the Depot. He did not record their response, but told them that they were on strike and that no one was getting paid for the day. At that point they packed their belongings and left the Depot.
Nonetheless, the industrial action (which started with a meeting at a time that caused a greater disruption than a midday meeting would have done) had the consequence that the afternoon shift failed to perform any work that day, because the morning shift had not unloaded trucks arriving in the morning or sorted freight in preparation for loading on to trucks by the afternoon shift. The afternoon shift would have been unable to perform much useful work in those circumstances.
It is relevant in relation to the seriousness of the conduct that the industrial action was relatively small in scale and of short duration. The number of employees employed by McColl’s at the Depot was 16. Normal work was resumed the following day.
While the breaches of s.494 were intentional industrial action, overall the circumstances place the s.494 contraventions both by the TWU and by Mr Harper in the less serious category of contraventions of that nature, albeit the action is not as lacking in significance as was contended for by the respondents.

Nature and Circumstances of the section 745(1) contravention

The circumstances of the contravention of s.745(1) of the WR Act by Mr Harper are set out in his affidavit sworn on 11 October 2010. This was a separate event and was different in nature to his contravention of s.494(1) of the WR Act.
On 11 October 2005 Mr Harper was issued with a Right to Enter and Inspect Premises Permit under the WR Act which stated that it remained in force for 3 years and that it must be returned to the Registrar within 14 days (sic) after it expired or was revoked. Mr Harper did not return the permit to a Registrar within seven days of its expiration as required under s.745(1) of the Act as it stood at the relevant time (October 2008). He did not do so until June 2009.
Mr Harper swore a statutory declaration on 19 June 2009 which is an exhibit to the affidavit of Ms Domino, in which he explained that in March 2009 he became aware that the Permit had expired. He notified the Legal Department to seek a renewal. His renewal application was delayed by the need to wait for further training (by the ACTU on Right of Entry laws). He had not used the Permit to enter or inspect premises since its expiry date.
Similarly, in these proceedings Mr Harper swore an affidavit of 11 October 2010 to the effect that he was not initially aware that his Right of Entry Permit had an expiry date (although he conceded that this was apparent on the face of the Permit), because he thought that similar to an authority to enter premises permits issued by the New South Wales Industrial Relations Commission (which he held), such a Permit would not have an expiry date.
Mr Harper attested that he became aware that his Permit had expired in about March 2009 when in connection with ACTU training he was requested by the TWU Legal Department to check the date of his Permit. However he did not know and was not told at that time that he had to return the Permit because it had expired. Completion of his training was delayed until about June 2009. It was only during the course of that ACTU training that Mr Harper became aware that he had to return the permit to the AIRC. He did so.
Mr Harper’s unchallenged evidence is that he never used the Permit after its expiry date. Indeed during its currency he used the Permit only once in about 2007 as he was allowed to enter and conduct meetings as a TWU organiser responsible for a number of sites across Sydney during the period without being required to provide written notice of meetings or to display his permit.
The FWO submitted however that Mr Harper’s lack of awareness of the expiry date on his Permit for such a long period suggested a “carelessness on his part with regard to his legal obligations as an industry participant granted significant powers under the [WR] Act”.
However this must be seen in light of the fact that Mr Harper believed the Permit operated on the same basis as his permit under the Industrial Relations Act 1996 (NSW) which did not have a temporal restriction and the fact that he did not use it after its expiration. Further he returned it promptly when made aware of his obligation to do so.
It is not in dispute and I accept that this contravention was inadvertent and that Mr Harper had no knowledge of the requirement to return the permit. It had no adverse consequences given that Mr Harper did not use the permit after its expiration date. Such factors support the view that any penalty should be nominal.

Whether one course of conduct

While the Amended Statement of Claim characterised the activities on 16 February 2009 as a stop work action and three strike actions, the parties agreed, and I accept, that these actions formed a continuous course of conduct and that the conduct of each respondent on 16 February 2009 should be penalised as if it were a single contravention.
There was no suggestion that there was anything other than a single contravention of s.745(1) by Mr Harper. It was not part of the same course of conduct as the s.494(1) contravention, being a separate event and different in nature.

Consequences of the conduct, including the nature and extent of any loss or damage sustained as a result of the contraventions

Mr Corben’s evidence is that there was “no (or virtually no) work” performed by the morning and afternoon shift employees at the Depot on 16 February 2009. While the industrial action of 16 February 2009 involved less than 16 employees, according to Mr Corben it meant that on that day at the Depot in question no inbound trucks were unloaded; no freight dispatched or loaded from/to the warehouses; no outbound interstate trucks loaded; no inbound freight delivered to customers; no freight sorted and no freight picked up from customers. Some customers (particularly those who had “‘next day delivery’ to interstate areas” contracts) had to make other arrangements to have their freight collected and delivered. In addition “[s]ome” owner-drivers who were willing to work at the Depot were unable to do so because there were no employees to load and unload the trucks, dispatch goods and sort freight. These owner-drivers were not paid for that day and lost money as a result.
Mr Corben’s evidence is that McColl’s lost revenue to other transport carriers on 16 February 2009, especially for “next day” deliveries. McColl’s had operational costs to pay for that day, albeit it did not have to pay the workers engaged in industrial action. In essence, the industrial action had the effect of stopping the work at the Depot on one day with some flow on effect to the next day.
However there has been no quantification of the loss or damage. McColl’s is an organisation of some size with four main divisions, one of which is a specialist/general freight division which operated in a number of states and had Depots in each of those states. The action in this case was confined to one Depot. There was no further industrial action after 16 February 2009. The “employees returned to work as usual (but with additional workload[s]) on 17 February 2009”.
There is no suggestion of any misuse of the Permit while it was retained by Mr Harper or of any other consequences.

Whether prior similar conduct

In July 2010 (after the conduct in issue in this case) in FWO v TWU the TWU was found to have committed two earlier contraventions of s.494(1) of the WR Act by organising strike actions at Adelaide and Melbourne Airports in December 2007.
The earlier conduct in contravention occurred before the conduct in this case, although the finding of contraventions was after the February 2009 conduct. While this is not as serious as it would have been if, notwithstanding findings of contraventions, an entity had gone on to commit further contraventions, the prior conduct is still relevant as similar previous conduct by the TWU may disclose a propensity to engage in prescribed conduct (see Draffin v Construction, Forestry, Mining and Energy Union (2009) 189 IR 145; [2009] FCAFC 120).
I bear in mind however that there was no involvement of senior TWU management in the present contraventions, in contrast to the situation in the contraventions considered in the first TWU case, in which the Secretary of the South Australian and Northern Territory branches of the TWU was involved and encouraged employees to take industrial action (FWO v TWU at [18]). The magnitude and effect of the conduct in question in this case is not comparable to what occurred in the earlier case. I note that there is no evidence of general training by TWU in relation to rights and obligations of employees, unions and officials under legislation such as the WR Act or FWA (although it provided such training to Qantas employees prior to the penalty hearing in FWO v TWU and has undertaken to provide such training to Mr Harper).
There are no prior contraventions and no evidence of any prior conduct similar to the conduct of Mr Harper in contravention of s.494 and s.745. Nor is there any evidence of any contravention of any other industrial legislation by Mr Harper.

Whether any involvement of senior management

While Mr Harper was a TWU employee and organiser (and Mr Hopkinson was a site delegate), there is no evidence of any involvement of TWU senior management in the circumstances surrounding the s.494(1) contraventions. In relation to the s.745(1) contravention, Mr Harper was the person who had the obligation to return the permit.
While the TWU’s liability is a consequence of the conduct of its officers being imputed to it under the WR Act, such liability may be taken to be intended to encourage an entity such as a union to take active steps to educate and to control the conduct of its officers to avoid contraventions of the Act.

Contrition, corrective action, acknowledgment of wrongdoing and cooperation with enforcement authority

It is convenient to consider these matters together. During the investigation the TWU provided formal cooperation to the FWO. The proceedings were commenced on 21 December 2009 following an investigation that began in about March 2009. Mr Harper admitted a contravention of s.745 in his points of defence filed on 6 May 2010. The respondents admitted the s.494 contraventions on 8 October 2010, the Friday before the hearing scheduled for Monday 11 October 2010. As conceded by counsel for the respondents, this was at a very late stage of the proceedings. The timing of such an acknowledgement of breach is of relevance (Alfred v Walter Construction Group Limited [2005] FCA 497 at [15]).
The applicant contended that at most the very late admission of the s.494 contraventions might have saved the Court and parties no more than a day of hearing time. This would seem to be a somewhat conservative estimate given that the liability hearing in relation to the s.494(1) issues had been set down for three days. The timing of the admissions meant that there would have been a considerable expenditure of time and effort in preparation for the hearing (cf FWO v TWU at [30]).
Admission of liability prior to the trial of the action which serves to reduce the length of the trial and limit its content to the determination of the appropriate penalty is a factor relevant to penalty, but has been held to only be a modest mitigating factor (see Alfred v Walter Construction Group Limited at [15], Alfred v Wakelin (No. 1) at [37] and Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70 at [76]). It has also been said that in the case of a pecuniary penalty a discount on the penalty should not be allowed simply on this basis, but should be reserved for cases where the admission of liability has indicated an acceptance of wrongdoing and is a suitable and credible expression of regret and/or where such admission has indicated a willingness to facilitate the course of justice (see Mornington Inn Pty Ltd v Jordan at [72] – [85]).

The applicant submitted that the admission of liability in this case was so late that it should not warrant any discount on penalty, whereas the respondents contended that the s.494 contraventions were not properly pleaded until the applicant filed the Amended Statement of Claim on 29 July 2010. It was also pointed out that other alleged contraventions against the TWU and Harper in respect of the industrial action on 16 February 2009 had been dismissed as a result of the agreement between the parties which led to the s.494 admissions.
The applicant disputed that the contraventions were not properly pleaded as proper causes of action in the original Statement of Claim, having regard to the fact that the amendment in the Amended Statement of Claim was an amendment to the former name of McColl’s (from Pure Logistics Pty Ltd to Pure Logistics Transport Pty Ltd). However counsel for the respondents pointed out that it was originally asserted that the Collective Agreement in question was an Agreement other than the Agreement relied on in the Amended Statement of Claim. In this sense it could be said that the contraventions had not been properly pleaded prior to that time. However such technical arguments are of limited significance, having regard to the fact that the Amended Statement of Claim was filed on 29 July 2010, but there was no admission of liability in relation to the s.494 contraventions until 8 October 2010. In these circumstances the costs of preparation for the hearing (including preparation of affidavit evidence and pre-hearing submissions) were not avoided by the admissions.
In some cases such a late admission leaves open an inference that the admission has resulted from an assessment of the strength of the applicant’s case, rather than a “desire to facilitate the course of justice” (see Mornington Inn Pty Ltd v Jordan at [77]). There were, however, other alleged contraventions pleaded against the TWU and Mr Harper in respect of the industrial action of 16 February 2009, in particular in relation to the Agreement. These have been dismissed as a result of the agreement between the parties which led to the s.494 admissions, so that this is not a case in which all of the conduct alleged has ultimately, albeit belatedly, been admitted by the respondents.
Further, there are other factors which indicate an acceptance of wrongdoing and expression of regret. The TWU undertook to the court that it would require Mr Harper to undergo training in the operation of s.417 of Fair Work Act (which is the equivalent of s.494 of the WR Act). Mr Harper agreed to participate in such training. This does indicate an intention to avoid future contraventions akin to corrective action and is relevant to penalty (see Stuart-Mahoney at [3], Draffin v Construction, Forestry, Mining and Energy Union at [64] – [66] and FWO v TWU at [30]). While such training has not yet been undertaken, I am not persuaded that there is any reason to doubt Mr Harper’s agreement to participate in such training, which I accept.
During submissions a statement was made on behalf of the respondents as follows:
The New South Wales branch of the Transport Workers Union of Australia, the first respondent, and Neale Harper, the second respondent, express their regret that in disputing the manner of termination of employment of a workplace representative, they organised industrial action on 16 February 2009 which, by disrupting normal work, caused inconvenience to the company.
Neale Harper further regrets that by failing to return his right to enter and inspect premises Permit, he contravened the Workplace Relations Act.
I am satisfied that this is an expression of contrition on the part of both respondents. It is in similar terms to the statement accepted as an expression of contrition in FWO v TWU (at [29] – [30]).
While such an expression of contrition must be seen in the light of the remarks of the Full Court of the Federal Court in Mornington Inn Pty Ltd v Jordan at [76] – [78], I am satisfied that in the particular circumstances of this case there has been an acceptance of wrongdoing as well as an appropriate and credible expression of regret by both respondents in relation to the s.494 contraventions, notwithstanding the timing of the admission and statement. However the lateness of the admission is such that these factors should have only a minor mitigating effect.
It is otherwise in relation to the s.745 contravention, in relation to which the early admission by Mr Harper avoided preparation costs and clearly indicated a willingness to facilitate the course of justice. That is a mitigating factor of some significance.

The financial position of the parties

There is no evidence before the court as to the financial position of either the TWU or Mr Harper or as to whether Mr Harper would be required to pay any penalty personally (see Mornington Inn Pty Ltdv Jordan). This is not a factor that would lead to a discount of penalties.

The need for specific and general deterrence

The need for deterrence is a criterion of significance. The undertakings given by the TWU and Mr Harper that Mr Harper will undergo training in the operation of s.417 of the Fair Work Act are relevant to the need for specific deterrence as an indicator of steps to be taken to ensure that he will comply with the statutory prohibitions on unlawful industrial action in the future. He has undergone ACTU training in relation to the Right of Entry laws. It was this training that alerted him to the need to return the expired permit.
The need for specific deterrence in relation to the s.494 contraventions should be seen in light of the nature of the contraventions, the admission of liability and expressions of contrition which involve an acknowledgement of wrongdoing. It is however appropriate to have regard to the need to encourage the TWU to take active steps to educate and, as far as reasonably possible, control the conduct of its officers to avoid contraventions of industrial legislation such as s.494(1) of the WR Act. The need for general deterrence suggests that a penalty that may deter others from committing similar contraventions is appropriate.
The need for general deterrence is the main factor of relevance in relation to Mr Harper’s breach of s.745(1) of the WR Act. The object of Part 15 of the WR Act (in which s.745 appeared) included ensuring that permits to enter premises and inspect records were only held by persons who understood their rights and obligations under that part of the Act and who were fit and proper persons to exercise those rights (s.736(b)). I have had regard however to the understandable confusion caused by the different operation of the equivalent State permit.

Views of the applicant

The principal objects of the Act (see s.3(h) and (i) of the WR Act) included:
…
(h) supporting harmonious and productive workplace relations by providing flexible mechanisms for the voluntary settlement of disputes; and
(i) balancing the right to take industrial action for the purposes of collective bargaining at the workplace level with the need to protect the public interest and appropriately deal with illegitimate and unprotected industrial action;
…
As the applicant submitted, the penalties should reflect the need to support the framework of rights and obligations under the applicable parts of the WR Act and to deter future contraventions of such provisions, not only by these respondents but by other persons subject to such legislation.

Conclusion

There was no suggestion that the totality principle was of any relevance in the circumstances of this case. While it is necessary to take into account all relevant factors and to reduce the total penalty if the aggregate is excessive having regard to the totality of the conduct in question, in this case this principle is of little relevance. It is agreed that there is only one contravention by the TWU and Mr Harper’s contraventions are discrete in nature (see Stuart-Mahoney at [60]).
Counsel for the respondents provided the court with a reference to the Schedule to the judgment of Raphael FM in Fair Work Ombudsman v AWU, NSW which sets out examples of penalties imposed in cases involving unlawful industrial action. As Raphael FM pointed out in that case at [19], while helpful, such decisions are not binding but only informative. Each case must be decided having regard to the circumstances of that case in light of all the relevant circumstances (and see FWO v TWU at [31]).
The applicant contended that the TWU contravention of s.494(1) warranted a penalty of no less than 75 per cent of the maximum penalty of $33,000 while the contravention by Mr Harper warranted a penalty of about 50 per cent of the maximum penalty of $6,600 and that the contravention of s.745(1) by Mr Harper warranted a low range penalty, that is 10 to 30 per cent of the maximum penalty of $6,600.
The respondents submitted that the court should impose low range penalties on each respondent for the s.494 contraventions, having regard to the factors above and that there should be no penalty or only a nominal penalty imposed on Mr Harper in respect of the s.745(1) contravention.
The contraventions of s.494(1) of the Act were deliberate, albeit for a protective reason. They were of small scale. The union’s responsibility was a consequence of the conduct of its officers (see Construction, Forestry, Mining and Energy Union v Hamberger). The contraventions were unmitigated by any early admission of liability. However, there was a pre-hearing admission of liability and contrition and an acknowledgement of wrongdoing has now been expressed.
It can be inferred that some loss of income was suffered by McColl’s and the owner drivers as a result of the industrial action (although this has not been quantified) and that McColl’s and its customers suffered some inconvenience and disruption to their businesses. However the industrial action was of short duration and relatively limited impact. Senior management of the TWU was not involved. There have been findings of two prior contraventions of such a provision by the TWU, although these were not made before the action in question.
I accept that there should be a difference in the level of penalty as between the TWU and Mr Harper in relation to the s.494(1) contraventions, reflecting the greater need to deter the TWU as a past contravener. While undertakings have been given through counsel and in submissions, there has not been implementation of action to ensure future compliance with the law. However, the circumstances are not such as to warrant a penalty on the TWU in the order of 75 per cent of the maximum $33,000. In all the circumstances I am of the view that the TWU contravention is at the upper end of the less serious range of contraventions of s.494(1) warranting a penalty of $9,900 while Mr Harper’s contravention of s.494(1), having regard in particular to his direct involvement in deliberate conduct but also to the absence of past contraventions, warrants a penalty of $1,320.
On the other hand, Mr Harper’s contravention of s.745 was a discrete issue. It was inadvertent and was not a serious contravention. As Mr Harper had not used the expired Permit it had no consequences. However it demonstrated some lack of care in relation to a permit holder’s obligations. I am not persuaded that no penalty should be imposed, having regard to the need to deter such attitudes on the part of permit holders generally and to reinforce the need for permit holders to take seriously and be punctilious in compliance with their obligations. In my view a nominal penalty of $100 is appropriate.
Having regard to all the circumstances including the factors above, I am of the view that the appropriate penalty for each of the admitted contraventions is as follows:
·the contravention of s.494(1) of the WR Act by the TWU - $9,900.
·the contravention of s.494(1) of the WR Act by Mr Harper - $1,320.
·the contravention of s.745(1) of the WR Act by Mr Harper - $100.
The penalties are payable to the Commonwealth (see s.841 of the WR Act).

I certify that the preceding ninety-nine (99) paragraphs are a true copy of the reasons for judgment of Barnes FM

Associate:

Date: 2 November 2010