GREGOR v CFMEU - [2011] FMCA 562

FEDERAL MAGISTRATES COURT OF AUSTRALIA

GREGOR v CFMEU & ANOR

[2011] FMCA 562

INDUSTRIAL LAW – Penalty hearing – contraventions of s.767(1) of the Workplace Relations Act 1996 (Cth) by respondents – contraventions admitted – agreed penalties – whether agreed penalties within permissible range.

Workplace Relations Act 1996, ss.760, 767

A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2008] FCA 466
Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560
John Holland Pty Ltd v CFMEU & Ors [2009] FMCA 1248
Michelle White v Construction Forestry Mining and Energy Union [2011] FCA 192

Applicant:

MURRAY GREGOR

First Respondent:

CFMEU

Second Respondent:

MARK TRAVERS

File Number:

MLG 1634 of 2009

Judgment of:

Riethmuller FM

Hearing date:

5 October 2010

Date of Last Submission:

9 November 2010

Delivered at:

Melbourne

Delivered on:

22 July 2011

REPRESENTATION

Counsel for the Applicant:

Mr Snaden of Counsel

Solicitors for the Applicant:

Tim Honey

Counsel for the Respondents:

No appearance

Solicitors for the Respondents:

CFMEU - Legal Branch

ORDERS

A penalty of $5,000 be imposed on the First Respondent for contravening section 767(1) of the Workplace Relations Act 1996 by its vicarious liability for the conduct of the second respondent for acting in an improper manner whilst exercising a right conferred upon him by s.760 of the WR Act.
A penalty of $1,000 be imposed on the Second Respondent for contravening section 767(1) of the Workplace Relations Act 1996 by his conduct in acting in an improper manner whilst exercising a right conferred upon him by s.760 of the WR Act.
The penalty amounts be payable within 28 days.
There be no order as to costs.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT MELBOURNE

MLG 1634 of 2009

MURRAY GREGOR

Applicant

And

CFMEU

First Respondent

MARK TRAVERS

Second Respondent

REASONS FOR JUDGMENT

These proceedings were issued on 16 December 2009 seeking orders imposing pecuniary penalties on the first respondent, the Construction, Forestry, Mining and Energy Union (‘CFMEU’), and the second respondent who is an employee of the CFMEU for contravention of s.767(1) of the Workplace Relations Act 1996 (‘the WR Act’).
The applicant is an Australian Building and Construction (ABC) Inspector appointed under s.57 of the BCII Act and is a person eligible to bring the proceedings for contravention of the civil penalty provisions.
The facts are that the second respondent breached s.767(1) of the Act on 24 February 2009 at the Melbourne Airport Tullamarine construction project (‘the site’) by entering onto the site, without authorisation, for a stop work meeting with workers on the site. The second respondent then refused to leave, despite repeated requests by management to do so, and swore at management. The total duration of the breach appears to have been of approximately 25 minutes.
The matter first came before me last year, early in the year, where it was directed to mediation. It did not settle at mediation and was set for a penalty hearing on 20 October 2010. Ultimately, the parties were able to resolve various differences which resulted in a statement of agreed facts and an agreement about the penalties the parties believed would be appropriate in the circumstances. The statement of agreed facts sets out, relevantly, as follows:
[15] By engaging in the conduct attributed to him in paragraphs 11-14 above (“the offending conduct”), [the second respondent] acted in an improper manner whilst exercising a right conferred upon him by s.760 of the WR Act.
Vicarious Liability of the CFMEU
[16] [The second respondent] engaged in the offending conduct in his capacity as an officer and an employee of the CFMEU and acting within the scope of the actual or apparent authority of his office and his employment.
[17] By reason of the matters agreed at paragraphs 15 and 16 above, and [the second respondent’s] having engaged in the offending conduct, the CFMEU is vicariously liable to the imposition of a penalty pursuant to s.769(1) of the WR Act.
Paragraph 3 of the applicant’s outline of submissions on penalty provides for a penalty of $5,000 for the first respondent and $1,000 for the second respondent for acting in an improper manner whilst exercising a right conferred upon him by s.760 of the WR Act. The respondents have indicated, at paragraph 25 of their outline of submissions on penalty, that they concur with the penalties set out by the applicant.

The Law

The appropriate approach in these matters is to have regard to all of the relevant circumstances. There are certain areas which one would commonly turn to, to identify relevant matters to take into account. In Michelle White v Construction Forestry Mining and Energy Union [2011] FCA 192 Kenny J summarised the appropriate approach when looking at a case where there is agreement as to penalty saying as follows:
(a) it is the responsibility of the Court to determine the appropriate penalty;
(b) determining the amount of penalty is not an exact science;
(c) within a permissible range, the courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another;
(d) there is public interest in promoting settlement of litigation, particularly where it is likely to be lengthy;
(e) the view of the regulator, as a specialist body, is a relevant, but not determinative, consideration;
(f) in determining whether the proposed penalty is appropriate, the Court examines all of the circumstances of the case; and
(g) 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, in the Court’s view, is 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 it is within the permissible range.
The parties have indicated a number of factors to address, from the cases. I note that checklists are intended as an aid, and that adopting an approach that simply applies a checklist can be confusing in some cases or overtake the primary task, which is to look at the whole of the circumstances in the context of the legislative instrument and strike an appropriate penalty for the particular conduct in this particular case involving these particular parties. To some extent, this was discussed in A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2008] FCA 466 and Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560.
I note the list of factors that the respondents have set out in their outline, from the cases, which provides a good guidance for areas in which to look in order to attempt to cover most of the major facts and circumstances that are relevant in exercising the discretion. In this regard, the respondent says:
[5] The Respondents submit that the following considerations are the relevant considerations for the assessment of penalty:
(a) the nature and extent of the conduct;
(b) the period of the conduct;
(c) the effect of the conduct, including the nature and extent of any loss or damage sustained as a result of the breaches;
(d) whether the respondents have previously been found to have engaged in conduct in contravention of the relevant part of the Act or of a relevantly similar nature;
(e) 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;
(f) the conduct of the senior officers of the first respondent;
(g) the financial position and nature of the Respondents;
(h) whether there has been contrition and/or an apology;
(i) the cooperation of the Respondents;
(j) the need, in the circumstances, for deterrence;
see: CFMEU v Coal & Allied Operation Pty Ltd (No. 2) (1999) 94 IR 231 at [7]-[8]; TPC v CSR Ltd (1991) ATPR 52, 135 at 52, 132-52, 153; Commonwealth Bank of Australia v Finance Sector Union [2007] FCAFC 18 at [181] per Branson J; Furlong v Australian Workers’ Union & Ors [2007] FMCA 443 at [7]-[10]; Carr v CEPU [2007] FMCA 1526 at [7]; Cruse v CFMEU & Anor [2007] FMCA 1873 at [71]; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] 165 FCR 560 at [89]; Stewart-Mahoney v CFMEU [2008] FCA 1426.
[6] The factors are not mandatory considerations: see Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (supra) per Buchanan J at [91].
Turning then to the nature of the contravening conduct, the circumstances in which it took place and how long it went on for, in the statement of agreed facts and circumstances, the parties say:
[4] In February 2009, John Holland Pty Ltd (“JHPL”) occupied a construction site located at Melbourne Airport, Tullamarine, Victoria (“the Site”) at which it employed, pursuant to contracts of employment, employees to perform work on a construction project at the Site known as the Tullamarine Airport Multilevel Car Park project (“the Construction Project”).
[5] Further, JPL engaged, pursuant to contracts of engagement, contractors to work at the Site in connection with the Construction Project, including…
[6] The Construction Project involved the performance of building work under s.5 of the BCII Act.
The Collective Agreements
[7] In February 2009, the CFMEU was party to and bound by pre-reform certified agreements with each of the Contractors that applied to the employment of the employees of the Contractors working on the Construction Project. These agreements, listed below, were “collective agreements” for the purposes of Part 15 of the WR Act…
Events of Tuesday 24 February 2009
[8] At approximately 12:55pm on Tuesday 24 February 2009, [the second respondent] attended the Site and convened and attended an unauthorised meeting in the lunch-room area at the Site of JHPL employees and/or employees of the Contractors that were employed or engaged in connection with the Construction Project and who were either members, or eligible to be members, of the CFMEU.
[9] The lunch time break on the Site was from 12:30pm to 1:00pm.
[10] [The second respondent’s] attendance at the Site on Tuesday 24 February 2009 was not authorised in advance by JHPL, not the subject of a notice issued under s.763 of the WR Act, and was pursuant to a right of entry conferred on him by s.760 of the WR Act.
[11] At or shortly after 12.55pm on Tuesday 24 February 2009, [the second respondent] was asked, in the presence of JHPL’s Project Manager, Mr [BW], by JHPL’s Site Manager at the Site, Mr [IW] to leave the Site. This request was made three times and [the second respondent] verbally refused to leave the Site each time. The requests and refusals were constituted by the following conversation:
[Mr IW]: [Second respondent], you are in breach of the code and you need to leave.
[Second respondent]: I will go when I am good and ready.
[Mr IW]: [Second respondent], I am requesting you to leave the site.
[Second respondent]: What, are you going to try and remove me forcibly?
[Mr IW]: [Second respondent], I am requesting you again to leave the site.
[Second respondent]: Do what you have to. Ring the police and I will wait here for them.
[12] At approximately 1:05pm on Tuesday 24 February 2009, [the second respondent] was asked, in the presence of JHPL Supervisor, Mr [MP], by Mr [BW] to leave the site.
[13] [The second respondent] verbally refused to leave the site. The request and refusal were constituted by the following conversation:
[Mr BW]: [Second respondent], I request you to leave the site as you are in breach of right of entry.
[Second respondent]: I’m not leaving. I have not finished talking to some of the members I am sitting with.
Further, [the second respondent] and [Mr BW] had the following conversation:
[Mr BW]: We have requested you to leave the site and the Federal Police have been called.
[Second respondent]: Yeah, yeah. Ok, now I’m staying till they come.
[Mr BW]: It’s company policy and the law.
[Second respondent]: Yeah, yeah, I have told you I’m staying till the police come. Do you think I am worried? When they come and ask what I am doing here I’ll them I’m talking to my members. Then they’ll fuck off and then when I’ve finished talking to my members I’ll leave. Big deal. You are making a big dick of yourself in front of all these people.
[Mr BW]: We are doing what we have to.
[Second respondent]: Yeah, yeah, whatever. Do what you have to, I’m talking to my members.
[Mr BW]: [Second respondent], I am allowed to be here on site, you’re not.
[Second respondent]: Yeah well stay if you want to, I don’t give a shit. I’m talking to my members.
[Mr BW]: Ok then, the Federal Police will be here soon I guess, so we’ll see what happens.
[14] [The second respondent] left the site approximately five minutes later, before police arrived. [Mr IW] notified the police that no police action was required to remove [the second respondent].
Turning then to the relevant prior conduct, at paragraph 13 of the applicant’s outline, the applicant says:
The second respondent has not been held in breach of sec.767 of the WR Act before. However, separate conduct of his at the site in question on 24 March 2009 was part of the basis upon which O’Sullivan FM on 14 December 2009 imposed a penalty of $23,000 on the first respondent for unlawful industrial action.
The applicant refers to the decision of O’Sullivan FM in John Holland Pty Ltd v CFMEU & Ors [2009] FMCA 1248, in which the second respondent in this case was also the second respondent. Although it was agreed that the second respondent was involved in stop-work action, (see paragraph [17] of his Honour’s decision), the applicant in that case did not seek a penalty order against the second respondent.
At paragraph 14 of his outline, the applicant lists 8 cases involving the first respondent, all of which feature a contravention of right of entry legislation. In the 14 cases listed the CFMEU was penalised either with a fine or a suspension of permits.
The next matter that I turn my mind to is whether the contraventions were distinct or arose out of one course of conduct. It seems clear that this was one course of conduct about one relatively narrow dispute. It is not clear how many of the site’s workers were involved, although it is worth noting that the conduct in question occurred primarily during the workers’ lunch hour. The conduct was clearly deliberate. The contravener, being the union, is a significant body. However, it is not a case where it is suggested that there was involvement of any of the senior management members of the union.
The applicant submits that the respondents have ‘demonstrated no contrition for their conduct’, although they did sign a Statement of Agreed Facts. The applicant notes, at paragraph 12 of his outline, that this occurred ‘after several months of “false starts” that necessitated the seeking of multiple directions from the Court’. The respondent says, at paragraph 22 of their outline:
…credit ought be given for reaching agreement on the Statement of Agreed Facts and therefore presenting the Court with an agreed outcome, not the course the parties took in arriving at the outcome.
It appears to me that there should be some regard to the fact that there has been, ultimately, admissions and that a trial did not need to take place. Whilst the agreement was finalised somewhat late in the piece it does seem to have reduced the costs of the matter considerably and certainly avoided having all of the relevant witnesses here on a morning for trial and then the matter reaching agreement at that very late point. It does not seem, however, that there is contrition or remorse.
Deterrence is a relevant factor. The applicant has made submissions on both general deterrence and specific deterrence saying:
SPECIFIC DETERRENCE
[16] The respondents’ history of prior “offences” (outlined above) underlines an important role for specific deterrence in this case, at least against the first respondent.
[17] Each of the respondents bears the hallmarks of what His Honour, Mr Justice North of the Federal Court, recently described – in the process of imposing a hefty penalty – as “…a dogmatic, inflexible person…” in respect of whom “…[t]he case for specific deterrence…[was] very strong.” – see AMWU v Thorton Engineering Australia Pty Ltd [2009] FCA 1584 at [28]-[29]. Equivalent reasoning is apposite in the present case, at least with respect to the first respondent.
GENERAL DETERRENCE
[18] There is a need for general deterrence in this case. Right of entry misconduct attracts a special significance, reflected by a dedicated legislative regime (namely, former Part 15 of the WR Act and now Part 3-4 of the Fair Work Act 2009 (Cth)) and the maximum penalties of $6,600 for an individual and $33,000 for a body corporate.
The relevance of deterrence is also acknowledged by the respondent. The respondent says:
[23] The Respondents accept that the Court is to have regard to the purpose of the legislation and that one of the factors in determining penalty is a question of general deterrence. However, the central role of the Court is to fix a penalty that is proportionate to the gravity of the offence and a minimum penalty consistent with the attainment of the relevant purposes of sentencing whilst reserving the maximum penalty for the worst types of cases.
[24] In any event, there is significant deterrence in the bringing of the proceeding which has costs the Respondents time and money…
Deterrence is clearly an important factor in this case, as the applicant submits because the union is a repeat offender and, indeed, it has a prior history of contraventions.
Turning to the extent of loss and damage sustained as a result of the conduct it seems that there was very little loss and damage suffered. The second respondent’s actions and language caused offence.
I also have regard to the maximum penalties provided for in s.767(2) of the WR Act which are 300 penalty units for the first respondent and 60 penalty units for the second respondent and a penalty unit is presently around $110 per unit.
In the scheme of things it seems to me to be significant that this was a relatively minor contravention. It occurred over a short period of time and involved a relatively small number of workers. The absence of any penalties imposed against the second respondent for breaches under the Act is also significant.
Whilst there are no particular losses caused by the conduct, it was nonetheless a breach in circumstances where there were real alternatives available and where the union has an unenviable history of past breaches.
In the circumstances, when looking at the matter as a whole, I am persuaded that the agreed penalty of $5,000 to be imposed on the first respondent is an appropriate penalty well within the reasonable range.
With respect to the second respondent I have regard to the much lesser maximum penalty that may be imposed and his role in the particular case and the very different history he has in comparison to the first respondent. Looking at the matter as a whole, I am persuaded that the penalties agreed are, likewise, well within the reasonable range and are appropriate penalties to be imposed in this case. I therefore impose a penalty of $1,000 on the second respondent.
I further order that the penalty amounts be paid within 28 days and by consent make no order as to costs.

I certify that the preceding twenty-four (24) paragraphs are a true copy of the reasons for judgment of Riethmuller FM

Date: 20 July 2011