Furlong v AWU & Ors
[2007] FMCA 443
•19 April 2007
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| FURLONG v AUSTRALIAN WORKERS UNION & ORS | [2007] FMCA 443 |
| INDUSTRIAL LAW – Application for imposition of penalties – unlawful strike – agreed facts – contrition and early co-operation of respondents – consideration of matters relevant to penalty. |
| Building and Construction Industry Improvement Act 2005, s.38 Workplace Relations Act 1996 (Cth), Part XA |
| CPSU v Telstra Corporation (2001) 108 IR 228 CFMEU v Coal and Allied Operations Pty Limited Number 2 (1999) 94 IR 231 TPC v CSR Limited (1991) ATPR 52 Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Limited (2004) FCAFC 72 NW Frozen Foods Pty Limited v ACCC (1996) 71 FCR 285. |
| Applicant: | MURRAY FURLONG |
| First Respondent: | AUSTRALIAN WORKERS UNION |
| Second Respondent: | TERRY LEE |
| Third Respondent: | DOUGLAS BROWN |
| Fourth Respondent: | PETER LAMBE |
| Fifth Respondent: | GREG WATKINS |
| File number: | MLG 1320 of 2006 |
| Judgment of: | Burchardt FM |
| Hearing date: | 19 March 2007 |
| Date of last submission: | 19 March 2007 |
| Delivered at: | Melbourne |
| Delivered on: | 19 April 2007 |
REPRESENTATION
| Counsel for the Applicant: | Mr P. O’Grady |
| Solicitors for the Applicant: | Australian Government Solicitor |
| Counsel for the Respondents: | Mr C. Dowling |
| Solicitors for the Respondents: | Ms S. Hodgers, Australian Workers’ Union |
ORDERS
That the following penalties be imposed:
(a)on the AWU,
(i)subject to the following sub-paragraph, a penalty of $40,000.00 in respect of the contraventions of s.38 of the BCII Act and s.178 of the WR Act, such penalty to be paid into the Consolidated Revenue Fund;
(ii)the AWU is not obliged to pay one half of the said penalty if for a period of 6 months from the date of trial in this proceeding, it has not been adjudged to have breached any provision of the BCII Act or the WR Act in so far that those breaches relate to the building and construction industry;
(b)on Mr Lee,
(i)a penalty of $4,000.00 in respect of the contraventions of s.38 of the BCII Act, such penalty to be paid into the Consolidated Revenue Fund;
(c)on Mr Brown,
(i)a penalty of $4,000.00 in respect of the contraventions of s.38 of the BCII Act and s.178 of the WR Act, such penalty to be paid into the Consolidated Revenue Fund;
(d)on Mr Lambe,
(i)a penalty of $4,000.00 in respect of the contraventions of s.38 of the BCII Act and s.178 of the WR Act, such penalty to be paid into the Consolidated Revenue Fund;
(e)on Mr Watkins,
(i)a penalty of $4,000.00 in respect of the contraventions of s.38 of the BCII Act and s.178 of the WR Act, such penalty to be paid into the Consolidated Revenue Fund.
FEDERAL MAGISTRATES |
MLG1320 of 2006
| MURRAY FURLONG |
Applicant
And
| AUSTRALIAN WORKERS UNION |
First Respondent
| TERRY LEE |
Second Respondent
| DOUGLAS BROWN |
Third Respondent
| PETER LAMBE |
Fourth Respondent
| GREG WATKINS |
Fifth Respondent
REASONS FOR JUDGMENT
By an application filed on 20 October 2006 the Applicant seeks orders imposing penalties upon the Five Respondents. The First Respondent is the Australian Workers Union and the other Respondents are all officers of that union. The Second Respondent is an organiser and the Third, Fourth and Fifth Respondents are shop stewards. The parties have prepared statements of agreed facts which are exhibited as MAF2 and MAF3 to the affidavit of Murray Furlong affirmed on 20 October 2006 and filed with the Court on that day.
The relevant facts can be stated fairly shortly. The Respondents were at all times involved in one way or another with work undertaken by members of the AWU employed by Roche Mining (JR) Pty Ltd (“RMJR”) in respect of a mineral sands separation plant at Burgins Road, Hamilton in Victoria referred to in the statement of agreed facts as “MSP” site. There was at all relevant times a binding certified agreement in respect of that site described in the statement of agreed facts as “the RMJR agreement”.
On Friday, 24 March 2006 the Second Respondent arrived at the MSP site in the early morning as a result of a dispute that had arisen over the payment of what was described as a camp allowance and more particularly as to whether that allowance was subject to taxation or not. This dispute arose towards the end of the currency of the project upon which RMJR was then involved. At about 11.00 am the Second Respondent informed the management of RMJR as was indeed the fact that AWU members had gone on strike and did not propose to return until Tuesday, 28 March 2006.
The RMJR project was scheduled to continue on the Friday and then on the Saturday, 25 March 2006 but work was not scheduled for either Sunday, 26 March or Monday, 27 March 2006. On 27 March 2006 RMJR succeeded in obtaining orders made by Deputy President Ives of the Australian Industrial Relations Commission which effectively required the employees to return to work the following day, which they did. During the strike RMJR was unable to find productive work for its remaining employees and subcontractors on the site and they were stood down.
RMJR was about to conduct through-put testing at a related site, the WCP site, in order to reach practical completion and handover on that part of the project. That testing had to be abandoned or rather was delayed and the strike cost RMJR a sum alleged by a Mr Duce in an affidavit affirmed on 4 January 2007 and filed in this Court on
9 January 2007, as $203,292.00. While that figure is not conceded by the Respondents as being accurate, there is no dispute that RMJR suffered a substantial loss as a result of the strike. On the material of Mr Duce there was additionally some $45,000.00 payable by RMJR to its principal under a liquidated damages clause in its contract with that principal.
The proceeding is slightly unusual in the sense that all the Respondents admit a breach of s.38 of the Building and Construction Industry Improvement Act 2005 (“the BCII Act”). They also admit breaching the RMJR agreement. There was some issue before me as to how many breaches or contraventions of the relevant Act and certified agreement arose, so to speak, out of what took place but given that both sides agreed that what is known as “the totality principle”
(see Finklestein J in CPSU v Telstra Corporation (2001) 108 IR 228 at 230 [7]) applies, this is not a matter that it is necessary for me in these circumstances to determine. It is sufficient to note that the contraventions of the BCII Act and of the certified agreement are admitted. That is because the strike was plainly industrial action within the meaning of the BCII Act and was not lawful because of the terms of that legislation. Likewise the dispute resolution clauses of the RMJR agreement were clearly not adhered to.
The parties have in fact proposed levels of penalty to be imposed upon the Respondents. From the authorities it is clear that that agreement does not bind this Court. It is equally clear that the Court itself has to turn its mind to what the proper outcome of the proceedings ought to be. In considering whether the penalties proposed by the parties are appropriate or not, the Court has to consider a number of matters. In CFMEU v Coal and Allied Operations Pty Limited Number 2 (1999) 94 IR 231 (“Coal and Allied Operations”) at [7]-[8] Branson J identified a number of considerations relevant to the assessment
of penalty, albeit in the context of a contravention of Part XA of the Workplace Relations Act 1996 (Cth) (“the WR Act”) concerning freedom of association.
Those factors are:
a)The circumstances in which the relevant conduct took place, including whether the conduct was undertaken in deliberate defiance or disregard of the WR Act.
b)Whether the Respondent has previously been found to have engaged in conduct in contravention of the relevant part of the WR Act.
c)Where more than one contravention 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 the WR Act.
e)The need in the circumstances for the protection of industrial freedom of association.
f)The need in the circumstances for deterrents.
In my respectful view those principles are applicable to cases of this sort. A similar set of considerations arise from TPC v CSR Limited (1991) ATPR 52, 135 in which French J considered an action brought by the Trade Practices Commission, which might be said to raise slightly different considerations. Nonetheless in my view, his Honour’s observations are still relevant here. French J found (at P 52, 152-3) that relevant factors included:
a)The nature and extent of the contravening conduct.
b)The amount of loss or damage caused, if any.
c)The circumstances in which the conduct took place.
d)The size of the contravening company.
e)The deliberateness of the contravention and the period over which it extended.
f)Whether the contravention arose out of the conduct of senior management.
g)The company’s corporate culture.
h)Whether the company had co-operated with the authorities in relation to the contravention.
These sort of indicia are in my view broadly, at least, applicable to the sort of legislation and the sort of contraventions with which the Court is concerned in this case.
The nature and extent of the Respondents’ contravening conduct was essentially that there was a two day strike at a particularly sensitive time, in terms of the project in which RMJR was engaged, as I would readily infer both the union and the officers and members were well aware. It was designed to bring pressure to bear and to cause difficulty.
It did so. Very substantial financial loss on any view was occasioned to RMJR.
The circumstances in which the conduct took place are likewise worthy of comment. In particular the conduct took place against a background in which the parties not only had a certified agreement applicable to the work the subject of the strike, but that agreement had in it a dispute resolution clause that had indeed recently been upgraded, so to speak, on 23 January 2006 (see exhibit R2 clause 14.2.5).
The size of the contravenor is large, although I note that it is not of the character of a large public company. Nonetheless, the AWU has substantial resources, whether they are as claimed precisely by the Applicant or otherwise. The deliberateness of the contravention is perhaps slightly clouded by the fact that there is not a lot in the agreed statement of facts that goes to that aspect of the matter, but I have no difficulty in finding that the contraventions were intended and were done in disregard of the obligations that the union and the respondents must have known they had, both under the BCII Act and under the certified agreement. It was, however, a short strike lasting only for a day and a bit.
The contraventions, in my view, can be said to have all arisen out of the one course of conduct and the question of the involvement of senior management referred to by French J does not arise. Likewise because these were first such breaches, so far as the Court has been made aware, the question of the company’s corporate culture does not arise in that sense.
There are two areas which do fall for further consideration. First of all, the Respondents have all shown contrition. It is apparent from the responses filed by the Respondents as early as 3 November 2006 and the affidavit material filed with that response, that the respondents have admitted from an early stage that they contravened the BCII Act and the certified agreement and have co-operated with the Applicant in that regard. They deserve credit for doing so.
Secondly, the AWU has made compulsory attendance at courses designed to further inform both the Respondents and their other staff of their obligations under the BCII Act and under the certified agreement. So that once again stands to their credit. I am prepared to assume contrition and co-operation in the Respondents’ favour, both individually and collectively.
The next matter that arises is the basis upon which the Court should approach, as it were, the methodology of the quantification of penalties. The judgment of Branson J in Coal and Allied Operations already referred to, at paragraph [7] and following, sets out guidelines as to how the Court should approach this matter. The issue has, however, also been considered by a Full Court of the Federal Court in Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Limited (2004) FCAFC 72 (“Mobil Oil”) and in paragraph [51] the Full Court analysed an earlier decision in NW Frozen Foods Pty Limited v ACCC (1996) 71 FCR 285.
The Full Court there was dealing with penalties to be imposed under s.76 of the Trade Practices Act (“the TP Act”), but in my view the principles set out in paragraph [51] of that judgment are applicable here. They are as follows:
“
i)It is the responsibility of the Court to determine the appropriate penalty to be imposed under section 76 of the TP Act in respect of a contravention of the TP Act.
ii)Determining the quantum of a penalty is not an exact science. Within a permissible range the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another.
iii)There is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravenor have reached agreement, they may present to the Court a statement of facts and opinions as to the effects of those facts, together with joint submissions as to the appropriate penalty to be imposed.
iv)The view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty. In particular the views of the regulator on matters within its expertise (such as the ACCC’s views as to the deterrent effect to a proposed penalty in a given market) will usually be given great weight than its views on more “subjective” matters.
v)In determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts the Court may act on that statement if it is appropriate to do so.
vi)Where the parties have jointly proposed a penalty it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is in the Court’s view appropriate in the circumstances of the case. In answering that question the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range.”
Following argument and consideration the Court in Mobil Oil approved that methodology. Although I accept that the case was concerned with breaches of the TP Act and the activities of the ACCC, which are not identical with those with which the Court is concerned here, in my view that methodology is properly applicable in large part to a case like this.
To the extent that Counsel for the Respondents sought to suggest that the approach of Branson J in Coal and Allied Operations is different, I would respectfully doubt that that is the case. It seems to me that the two decisions can be read together without any difficulty. Having made that clear I will say simply that in all the relevant circumstances which I have already set out above, the penalties proposed by the parties seem to me to properly reflect both the nature of the contraventions, the contrition and co-operation of the Respondents, the need for deterrents upon the Respondents themselves and the need for deterrents generally.
The penalties imposed are dealing with the Respondents who are only shown on the materials to have contravened on these occasions for the first time and they fall in my view appropriately within the permissible range of potential outcomes. The Court will make orders giving effect to the penalties proposed by the parties.
I certify that the preceding twenty-two (22) paragraphs are a true copy of the reasons for judgment of Burchardt FM
Associate: Brooke Evans
Date: 19 April 2007
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