Hogan v Riley and Ors (No.2) - [2010] FMCA 760

FEDERAL MAGISTRATES COURT OF AUSTRALIA

HOGAN v RILEY & ORS (No.2)

[2010] FMCA 760

INDUSTRIAL LAW – Union rights of entry – entry to premises under ACT occupational health and safety legislation – entry refused at direction of managers and site foreman – liability admitted – appropriate penalty – pervasive misapprehension that notice was required – penalty of $10,000 on building company – penalty of $1,000 on director and project manager – no penalty on site foreman.

Building and Construction Industry Improvement Act 2005 (Cth)
Fair Work Act 2009 (Cth)
Occupational Health and Safety Act 1989 (ACT), ss.77, 78, 79, 80
Workplace Relations Act 1996 (Cth), ss.756, 757, 758, 759, 767, 769, 824, 826, 841
Workplace Relations Amendment (Work Choices) Act 2005
Workplace Relations and Other Legislation Amendment Act 1996 (Cth)

BGC Contracting Pty Ltd v Construction, Forestry, Mining and Energy Union of Workers (2004) 140 FCR 53
Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39
Construction, Forestry, Mining and Energy Union v Merhis Constructions Pty Ltd [2010] FMCA 751
Construction, Forestry, Mining and Energy Union v Williams (2009) 262 ALR 417
Dalzell v Ferguson (2009) 185 IR 392
Hogan v Riley [2009] FMCA 269, (2009) 186 IR 267
Hogan v Riley & Ors [2010] FMCA 408, (2010) 195 IR 326
Hogan v Riley [2010] FCAFC 30, (2010) 182 FCR 583
Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543
Being There: Changing Union Rights of Entry under Federal Industrial Law (2000) 13 AJLL 1

Applicant:

GERARD JOSEPH JOHN HOGAN

First Respondent:

MICHAEL RILEY

Second Respondent:

WAYNE CLARK

Third Respondent:

BRENDAN BYATT

Fourth Respondent:

IQON PTY LIMITED (ACN 008 595 122)

File Number:

CAG 57 of 2007

Judgment of:

Smith FM

Hearing dates:

31 August 2010
1 September 2010

Delivered at:

Sydney

Delivered on:

12 November 2010

REPRESENTATION

Counsel for the Applicant:

Ms P McDonald

Solicitors for the Applicant:

Australian Government Solicitor

Counsel for the Respondents:

Mr G McCarthy

Solicitors for the Respondents:

Macphillamy's

THE COURT DECLARES

Michael Riley, Wayne Clark, and Brendan Byatt were in breach of s.767(3) of the Workplace Relations Act 1996 (Cth) on 7 June 2007, when each of them refused entry to the construction site at the National Convention Centre, Canberra, to Halafihi Kimonu Kivalu and Jason Lawrence O’Mara, who were entitled to enter the premises under s.77 of the Occupational Health and Safety Act 1989 (ACT) and s.756 of the Workplace Relations Act 1996 (Cth).
Iqon Pty Ltd (ACN 008 595 122) is taken to have been engaged in the same conduct as Michael Riley, Wayne Clark, and Brendan Byatt pursuant to s.826(2) of the Workplace Relations Act 1996 (Cth), and was also in breach of s.767(3) on 7 June 2007.

THE COURT ORDERS

A penalty of $10,000 is imposed on Iqon Pty Ltd (ACN 008 595 122) under s.769(1) of the Workplace Relations Act 1996 (Cth) for its breach of s.767(3).
A penalty of $1,000 is imposed on Brendan Byatt under s.769(1) of the Workplace Relations Act 1996 (Cth) for his breach of s.767(3).
A penalty of $1,000 is imposed on Michael Riley under s.769(1) of the Workplace Relations Act 1996 (Cth) for his breach of s.767(3).
The penalties under the above orders must be paid to the Commonwealth pursuant to s.841 of the Act.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT CANBERRA

CAG 57 of 2007

GERARD JOSEPH JOHN HOGAN

Applicant

And

MICHAEL RILEY

First Respondent

WAYNE CLARK

Second Respondent

BRENDAN BYATT

Third Respondent

IQON PTY LIMITED (ACN 008 595 122)

Fourth Respondent

REASONS FOR JUDGMENT

Mr Hogan is an inspector under the Building and Construction Industry Improvement Act 2005 (Cth). On 28 December 2007 he commenced proceedings in this Court, seeking the imposition of pecuniary penalties under s.769(1)(a) of the Workplace Relations Act 1996 (Cth) (“the Act”) on each of the four respondents. They were alleged to be liable for breaches of s.767(3)(b) of the Act, in relation to events on 7 June 2007 occurring on a building site involving the refurbishment of the National Convention Centre in Canberra. The fourth respondent Iqon Pty Ltd had general responsibility for the management of the building site under a construction contract with the ACT government. It exercised that responsibility through a hierarchy of officers, employees and contractors, including its director Mr Byatt, a contracted project manager Mr Riley, a general site foreman Mr Clark, and a young sub-foreman Mr Perry.
In the events which I shall recount, Messrs O’Mara and Kivalu, two officials of the Construction, Forestry, Mining and Energy Union (“the CFMEU”), were refused entry at the gate of the site, when they attended with the purpose of investigating a complaint by a member that he had been punched by Mr Riley in an altercation occurring on the site on 30 May 2007. The CFMEU officials claimed to hold authorities and permits issued under both the Occupational Health and Safety Act 1989 (ACT) (“the OH&S Act”) and the Act, which gave them a right to enter premises without any prior notice, and without being required to justify their entry, for the purpose of investigating possible contraventions of the OH&S Act which they had reasonable grounds to suspect. They claimed to have acted on 7 June 2007 in accordance with all the requirements of both the ACT and Commonwealth legislation in relation to their rights of OH&S entry.
In his statement of claim, Mr Hogan claimed that Messrs Riley, Clark, and Byatt were in breach of s.767(3)(b) by refusing or directing the refusal of entry to the officials at the site gate, and were each liable to a maximum penalty of $6,600. He claimed that Iqon was vicariously liable for their conduct, to a maximum penalty of $33,000.
Section s.767(3)(b) provided that: “a person must not refuse or unduly delay entry to premises by a permit holder who is entitled to enter the premises … under an OHS law in accordance with section 756”.
The respondents successfully defended the proceedings before Neville FM, who found that the CFMEU officials were not entitled to enter the site (see Hogan v Riley [2009] FMCA 269, (2009) 231 IR 267). However, his Honour’s orders were set aside by the Full Court (see Hogan v Riley [2010] FCAFC 30, (2010) 182 FCR 583). The Full Court determined some of the legal and factual issues which were then in controversy, and remitted all other issues for further trial. Their declarations and orders made on 1 April 2010 were:
THE COURT ORDERS THAT:
1.The appeal be allowed.
2.The orders made by the Federal Magistrates Court of Australia on 10 July 2009 be set aside.
THE COURT DECLARES THAT:
3.On 7 June 2007, Halafihi Kimonu Kivalu and Jason Lawrence O’Mara, authorised representatives for the purposes of Div 5.4 of the Occupational Health and Safety Act 1989 (ACT), were entitled to enter the construction site at the National Convention Centre, Canberra, for the purposes of s 767(3) of the Workplace Relations Act 1996 (Cth).
4.In seeking to exercise their rights of entry to the National Convention Centre site on 7 June 2007, Halafihi Kimonu Kivalu and Jason Lawrence O’Mara did not intentionally hinder or obstruct any person, and did not otherwise act in an improper manner, within the meaning of s 767(1) of the Workplace Relations Act 1996 (Cth).
THE COURT FURTHER ORDERS THAT:
5.The proceeding be remitted to the Federal Magistrates Court of Australia for the following purposes:
(a)to determine whether any, and if so which, of the respondents refused or unduly delayed entry to the National Convention Centre site of Halafihi Kimonu Kivalu and Jason Lawrence O’Mara, or either of them, on 7 June 2007, in breach of s 767(3) of the Workplace Relations Act 1996 (Cth);
(b)consistently with such determination or determinations, to impose such pecuniary penalties, if any, as are thought appropriate pursuant to s 769 of the Workplace Relations Act 1996 (Cth); and
(c)to make such incidental orders, including any orders as to costs, that are appropriate in the circumstances.
The proceedings were then placed in my docket (see Hogan v Riley & Ors [2010] FMCA 408; (2010) 195 IR 326).
Shortly before the resumed trial in Canberra on 31 August 2010, the respondents’ solicitor conceded that Messrs Clark and Byatt had contravened s.767(3) and that Iqon was also liable for their conduct, but maintained Mr Riley’s defence. Their letter of 20 August 2010 said:
There is no dispute that on 7 June 2007, Mr Clark refused to permit Mr O’Mara and Mr Kivalu from entering the site. In those circumstances, and where the Federal Court has declared that the union officials were entitled to enter the site, the 1^st [sic: 2^nd] and 4^th respondents accept that Mr Clark (in his capacity as an employee of Iqon Pty Ltd) breached s.767(3) of the Act.
Likewise, there is no dispute that on 7 June 2007, Mr O’Neil telephoned Mr Byatt and stated that some union officials wished to enter the site. There is no dispute, and never has been, that in answer to Mr O’Neil’s question whether they should be permitted to enter, Mr Byatt replied that they were not to enter the site in circumstances where he did not know what they wanted and they had not given 24 hours notice. There is no dispute, and never has been, that Mr O’Neil conveyed that information to Mr Clark who confirmed to Mr O’Mara and Mr Kivalu that they were not to enter the site.
In those circumstances, and where the Federal Court has declared that union officials were entitled to enter the site, the 3^rd and 4^th Respondents accept that Mr Byatt (in his capacity as a director of Iqon Pty Ltd) breached s.767(3) of the Act.
There is no dispute, and never has been, that Mr Clark and Mr Byatt acted within the authorisation of Iqon Pty Ltd, and that through Mr Clark and Mr Byatt the company breached s.767(3) of the Act.
Mr Riley maintains that he never stated to anybody that the union officials were not to enter the site.
Notwithstanding these concessions, the respondents maintain that no declaratory orders or penalties should be made or imposed against any of them.
On the first day of the resumed trial, the previously received evidence was re-tendered and further oral evidence was taken from Messrs O’Mara, Hogan, Perry, Riley and Byatt. The next day, at the start of his submissions, counsel for the respondents announced:
The second issue is, your Honour, that I have had an opportunity to speak to the first respondent, Mr Riley, in light of the evidence that was given yesterday, and he instructs me that he accepts that he gave an instruction to Mr Perry not to allow the union officials on the site because they had not given 24 hours’ notice. He instructs me that he does not have any real recollection of any more – of positively doing so, but he accepts, in light of all the evidence that that is far more likely than not that he did; and accordingly, also accepts that in those circumstances, he is in the same position as Mr Byatt by giving that instruction, and thus, accepts that he, too, is in breach of – I think it’s 767, subsection (3).
The matter has, therefore, become confined to issues of penalty in relation to admitted breaches by each of the respondents.
In his written submissions, counsel for the respondents maintained that no penalties should be imposed on any of his clients. He submitted, inter alia, that “this enforcement action is quite out of proportion to what occurred”, that any breach was “of a technical and inconsequential kind”, and that “the concerns of deterrence and education have been achieved without the Court having to proceed to declaratory orders and penalties”. He also criticised the conduct of the CFMEU officials and of the ABCC, and submitted that it was “extraordinary, and unexplained, that …the applicant still prosecutes the respondents for doing no more than what they thought they were entitled to do.” He pointed to other mitigating elements also.
In oral submissions, he emphasised that Mr Clark had been acting upon instructions from his superiors, and that there was a universal misapprehension of law by the relevant managers of Iqon, who thought that in all circumstances union officials were required to give at least 24 hours notice of their intention and reasons for exercising a right of entry. He submitted that their misunderstanding had been acknowledged by Mr Byatt on the day of the relevant events, that there were no adverse consequences from the CFMEU officials being turned away at the gate, and that all respondents were persons of high repute and otherwise unblemished record in the industry.
I shall address the respondents’ submissions below. I accept that the circumstances of the breaches do point towards reduced penalties being imposed on Iqon, Mr Byatt and Mr Riley, and no penalty being imposed on Mr Clark. However, I need to recount the background to the legislation, and describe the circumstances of the contraventions, to explain why I firmly reject the respondents’ general position that no culpability was exhibited in their conduct, and that no penalties should be imposed on the senior managers and on Iqon.
In particular, I need to explain why it is of public importance that construction managers in the building industry should be fully and accurately informed as to the right of authorised union officials to have unimpeded immediate access under OH&S legislation, and that they should be aware of an obligation to recognise that right before, not after, they are asked to permit entry to a building site. In the present case, as in Construction, Forestry, Mining and Energy Union v Merhis Constructions Pty Ltd [2010] FMCA 751, I consider that ignorance or misapprehension of the legislation points in favour of, rather than against, penalties being imposed on the appropriately responsible persons.

The legislative background

The ACT OH&S union right of entry under Division 5.4 of the Occupational Health and Safety Act 1989 (ACT) appears to be modelled on the NSW legislation which I explained in Merhis Constructions. It was introduced in 2004, nine years after the NSW provisions. Although that Act was repealed by the Work Safety Act 2008 (ACT), the current legislation contains the same provisions.
The 1989 Act provided for the issuing and regulation of authorisations to nominated employees and officers of registered industrial organisations. Sections 77 to 80 provided:
77Entry to workplaces by authorised representatives
(1)This section applies if an authorised representative of a registered organisation suspects on reasonable grounds that—
(a)a contravention of this Act may have happened, may be happening or is likely to happen at premises; and
(b)the premises are a workplace where members of the organisation (or people who are eligible to be members of the organisation) work.
(2)The authorised representative may enter the premises to investigate the contravention.
NoteA reference to an Act includes a reference to the statutory instruments made or in force under the Act, including regulations (see Legislation Act, s 104).
(3)However, the authorised representative may enter the premises only at a time when work is carried on, or is usually carried on, at the premises by those members (or people).
(4)Also, this section does not authorise entry into a part of premises that is being used only for residential purposes.
78Notice of entry by authorised representative
(1)This section applies to an authorised representative who is authorised to enter premises under this division.
(2)The authorised representative may enter the premises without notice.
(3)The authorised representative must tell the occupier of the premises that the representative is on the premises as soon as reasonably practicable after entering the premises.
(4)However, the authorised representative need not tell the occupier of the premises that the representative is on the premises if—
(a)to do so would defeat the purpose for which the premises were entered; or
(b)the occupier had been told in writing when the representative would enter the premises.
79Production of authorised representative’s authorisation
An authorised representative must not remain at premises entered under this part if the representative does not produce his or her authorisation for inspection when asked by the occupier.
NoteAn authorisation must be in writing (see s 74, def authorised representative).
80Powers available to authorised representative on entry
(1)This section applies if an authorised representative enters premises under section 77 (Entry to workplaces by authorised representatives) to investigate a suspected contravention of this Act.
(2)The authorised representative may investigate the contravention by doing 1 or more of the following:
(a)inspect or view work, materials, plant or systems at the premises;
(b)interview members of the registered organisation (or people who are eligible to be members of the organisation) with their consent;
(c)take measurements and make sketches, drawings or any other kind of record (including photographs, films, or audio, video or other recordings) at the premises;
(d)require the production for inspection of documents relating to occupational health and safety at the premises;
(e)examine and copy, or take extracts from, any document produced as required under paragraph (d);
NoteIt is an offence for a person (including an authorised representative) to disclose protected information obtained while exercising a function under this Act (see s 207).
(f)require the occupier, an employee or anyone else working at the premises, to give the representative any assistance reasonably needed to exercise a function under this part at the premises.
(3)However, the authorised representative must not make a requirement of a person under subsection (2) (d) or (f) unless the representative has shown the person his or her authorisation.
In the present circumstances, it notable that s.78(2) expressly provided that “the authorised representative may enter the premises without notice”. It was also implicit under that section, that by holding ACT authorisations Messrs O’Mara and Kivalu were “entitled to enter the Convention Centre site without providing Iqon with particulars of the safety matter which they wished to investigate” (see Hogan v Riley [2010] FCAFC 30 at [22]).
In Merhis Constructions, I examined the effect of Commonwealth legislation on State and Territory union rights of OH&S entry, and it is convenient for me to repeat parts of that judgment.
The enforcement of safety requirements in workplaces has historically been a concern of State and Territory legislation, rather than Commonwealth industrial legislation. It remains so, although there are proposals for a national approach (see http://>
The interests of employees and their unions were long recognised in OH&S legislation, including by giving them a role in worksite safety committees. The conferral of immediate rights of entry and inspection on authorised union officials was introduced progressively in State and Territory legislation from the mid 1990s. As I have noted, this scheme reached the ACT in 2004, and remains in force.
The conferral of the above powers on authorised union officials should not be regarded by employers and other persons potentially affected by their exercise as an unjustified imposition. As well as recognising the legitimate concerns of unions for the safety of their members and potential members on worksites, the OH&S legislation serves important public purposes when vesting these powers in non-government agents who are independent of the employers and occupiers of workplaces. Although government agencies and government inspectors are appointed under the legislation, and are given extensive powers of investigation and remedy for OH&S breaches, the successful operations of these agencies will often depend upon initial inquiries being conducted speedily by union officials unimpeded by employers and occupiers.

The benefits to safety in the building industry from all of its participants having accurate knowledge of, and giving full effect to, union rights of immediate OH&S entry can never be dismissed lightly. Marshal J commenced his judgment in Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 by explaining how “safety in the workplace is a matter of paramount importance, especially in the construction industry”.
The character of the NSW OH&S rights of entry was described by Walton, Kavanagh, Haylen and Backman JJ in Dalzell v Ferguson (2009) 185 IR 392 at [42]:
Sections 77-79 are intended to be enabling or beneficial provisions. The rights conferred on an authorised representative under the provisions are significant and play an important role in ensuring the safety of members of an industrial organization (and those eligible to be members) at work. They also play a vital role in facilitating the investigation and enforcement of suspected breaches of occupational health and safety law. … (citation omitted).
The ACT legislation regulates the conferral of OH&S authorities on identified union officials, and imposes important legal obligations on them, including, of course, compliance with OH&S requirements themselves. Substantial sanctions are available under both the ACT and the Commonwealth legislation, where a union official’s right of entry for OH&S purposes is abused, in particular, if improperly used as a cloak for pursuing other industrial objectives.
An employer or occupier in the building industry is also at risk of substantial penalty, if it asserts a right to refuse entry or to obstruct investigations on the ground of lack of prior notice or other formality not provided under the legislation, or if it insists upon knowing and verifying a safety concern motivating the union inspector when this is not required under the legislation.
Different rights of entry have also been conferred on union officials under Commonwealth legislation, with different objectives. Commonwealth legislation was historically directed at regulating award conditions which allowed entry and inspection of records and premises, to allow unions to examine compliance with award and other statutory entitlements of workers, and also to allow entry for discussions with members and prospective members. The history of this legislation prior to the 2006 WorkChoices amendments, was explained by W J Ford in ‘Being There: Changing Union Rights of Entry under Federal Industrial Law’ (2000) 13 AJLL 1. Notably, amendments were made in 1996 which restricted union rights of entry to premises for the purpose of investigating suspected breaches of entitlement provisions and holding discussions (see the Workplace Relations and Other Legislation Amendment Act 1996 (Cth) which inserted Division 11A (ss.285A – 285G) into Part IX of the renamed Workplace Relations Act 1996 (Cth). These amendments required the holding of special Commonwealth permits, and imposed other preconditions to the exercise of rights of entry, including the giving of 24 hours prior notice.
However, until the WorkChoices amendments of 2005 the Commonwealth legislation left the State and Territory OH&S rights of immediate entry untouched and fully effective (see BGC Contracting Pty Ltd v Construction Forestry Mining and Energy Union of Workers (2004) 140 FCR 53 at [5], and [92], addressing WA industrial legislation which included OH&S rights of entry (see [39])).
Substantial amendments to union rights of entry under Commonwealth legislation were made by the Workplace Relations Amendment (Work Choices) Act 2005, and the concurrent State and Territory OH&S regimes were recognised. The amendments repealed old Div.11A of Pt.IX, and inserted a new (renumbered) Part 15 regulating rights of entry. The amendments continued and extended the previous restraints.
The 2005 Commonwealth legislation was intended to ‘cover the field’, to the exclusion of State and Territory legislation and award provisions, “to reduce the extent of disruptive union entry into Australian workplaces” (see the Explanatory Memorandum for the Bill, at pp.27-28, and 364 and following). In accordance with these objects, OH&S entry rights were recognised in new provisions inserted as Div.5 of Pt.15, which the explanatory memorandum explained:
2481. Division 5 would impose additional conditions on right of entry pursuant to State or Territory OHS legislation. No additional rights of entry would be conferred by Division 5.
2482 State and Territory OHS laws contain their own limitations and obligations for permit holders for when they seek to exercise OHS right of entry. These limitations would continue to apply.
In effect, the WorkChoices amendments introduced dual regulation of union officials with OH&S rights of entry, by continuing to require them to hold State or Territory authorisations, and requiring them also to obtain Commonwealth permits under that Part (see ss.756, 758, and 759). Moreover, use of OH&S rights to gain access to records concerning employees’ entitlements, as distinct from those concerning employees’ safety, was precluded without 24 hours written notice (see s.757).
However, the WorkChoices amendments did not impose any additional restraints on the exercise of OH&S rights of immediate entry under State and Territory legislation. Rather, they gave additional effect to that legislation under Commonwealth law, and provided a new Commonwealth regime for its enforcement. The new enforcement regime “takes the provisions of the OHS Act as its starting point”, and does not impose new obligations to give prior notice except in relation to access to some employee records. Nor do they require a union permit holder to justify his or her proposed exercise of the OH&S right of entry before or during its exercise (see Hogan v Riley [2010] FCAFC 30 at [22]).
The same Commonwealth scheme in relation to State and Territory OH&S rights of entry currently operates under Div.3 of Pt.3-4 of the Fair Work Act 2009 (Cth).
Under the Workplace Relations Act 1996 (Cth) as applicable in June 2007, any unlawful interference by a person with the exercise of a State right of OH&S entry, was made a Commonwealth civil offence under several provisions of Division 7 of Part 14. In the present case, only s.767(3) and (4) are now relevant:
767 Hindering, obstruction etc. in relation to this Part
…….
(3)A person must not refuse or unduly delay entry to premises by a permit holder who is entitled to enter the premises:
(a)under section 747, subsection 748(8) or (10) or section 760; or
(b)under an OHS law in accordance with section 756.
(4)Subsection (3) is a civil remedy provision.
……..
In relation to corporations, s.826 is applicable:
826 Conduct by officers, directors, employees or agents
(1)Where it is necessary to establish, for the purposes of this Act or the BCII Act, the state of mind of a body corporate in relation to particular conduct, it is sufficient to show:
(a)that the conduct was engaged in by an officer, director, employee or agent of the body corporate within the scope of his or her actual or apparent authority; and
(b)that the officer, director, employee or agent had the state of mind.
(2)Any conduct engaged in on behalf of a body corporate by:
(a)an officer, director, employee or agent of the body corporate within the scope of his or her actual or apparent authority; or
(b)any other person at the direction or with the consent or agreement (whether express or implied) of an officer, director, employee or agent of the body corporate, where the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the officer, director, employee or agent;
shall be taken, for the purposes of this Act or the BCII Act (as the case requires), to have been engaged in also by the body corporate.
(3)A reference in this section to the state of mind of a person includes a reference to the knowledge, intent, opinion, belief or purpose of the person and the person’s reasons for the intent, opinion, belief or purpose.
This Court is given jurisdiction to respond to a breach of s.767(3), under s.769:
769 Penalties etc. for contravention of civil remedy provisions
(1)The Court, on application by an eligible person, may make one or more of the following orders in relation to a person (the defendant) who has contravened a civil remedy provision of this Part:
(a)an order imposing a pecuniary penalty on the defendant;
(b)an order requiring the defendant to pay a specified amount to another person as compensation for damage suffered by the other person as a result of the contravention;
(c)any other order that the Court considers appropriate.
(2)The maximum pecuniary penalty under paragraph (1)(a) is 300 penalty units if the defendant is a body corporate and otherwise 60 penalty units.
(3)The orders that may be made under paragraph (1)(c) include:
(a)injunctions; and
(b)any other orders that the Court considers necessary to stop the conduct or remedy its effects.
(4)Each of the following is an eligible person for the purposes of this section:
(a)a workplace inspector;
(b)a person affected by the contravention;
(c)a person prescribed by the regulations for the purposes of this paragraph.
(5)A regulation prescribing persons for the purposes of paragraph (4)(c) may provide that a person is prescribed only in relation to circumstances specified in the regulation.

The circumstances of the breaches

In June 2007 Mr O’Mara was employed as a union organiser by the CFMEU ACT branch. He held entry authorisations under the ACT and Commonwealth legislation, and had previous experience in the industry as an OH&S officer on large construction projects. He was the president of the ACT branch of the CFMEU. Mr Kivalu had shorter experience in the building industry, and was also a union organiser and holder of entry authorisations. On 6 June 2007, they received a complaint from Glen Thornton, who had been a plasterer employed by a sub-contractor on the Convention Centre renovations site. Mr Thornton gave them a written statement describing an incident early in the morning of 30 May 2007, which escalated when he was reprimanded by Mr Riley for leaving his safety helmet on the scaffolding while he was mixing plaster. This led to strong language, Mr Thornton being told to leave the site, provocative gestures, and an allegation that Mr Riley “threw a punch at my head hitting my ear making my glasses come off my left ear”.
There is a suggestion in the evidence that Mr Thornton might also have complained to the police, and that they attended the site and interviewed Mr Riley on 6 June. However, Mr Riley’s colleagues were not aware of this, nor of the incident with Mr Thornton the previous week, at the time when they refused entry to Messrs O’Mara and Kivalu.
Mr O’Mara also had not heard anything of the incident before receiving Mr Thornton’s complaint, but he thought – very properly, in my opinion – that the complaint raised a safety concern deserving investigation by inspecting the site’s safety policies and procedures and interviewing relevant people on the site, including Mr Riley. As he explained: “we couldn’t determine, at that stage, whether it was a one-off incident – whether it’s systemic, you know. So that was why we wanted to investigate. But potentially, there was no life-threatening injury going to happen in the short term”. If he had been given access on the morning of 7 June, “we would have looked at things such as their induction – site induction, their bullying and harassment policies and procedures. We would have interviewed witnesses to the alleged incident, spoke to the people involved, things like that. … You look at … whether it was of a one off nature or whether we could expect that that had been the culture in the workplace for these sorts of incidents to occur.”
Mr Riley’s breach of s.767(3). The layout of the Convention Centre site meant that the union officials needed to enter the construction site through a gate on Constitution Avenue, before talking to anyone in the site office. Mr Perry, a young sub-foreman, was at the gate acting as ‘pedestrian spotter’, and recognised their union status as they approached because they were wearing safety vests with CFMEU written on the back. This was at some time between 7.30 and 9am. Mr Perry immediately phoned Mr Riley, who was in a meeting with clients at a different project. There then ensued a conversation, in which it is now conceded that Mr Riley’s conduct constituted a breach of s.767(3) of the Act on his own part, and vicariously on the part of Iqon.
Their brief conversation is the subject of differing evidence from both of them, but the admission made by Mr Riley’s counsel does not require me closely to examine that evidence. It is enough, that I find that the admission reflects my opinion, on the balance of probabilities, that Mr Perry asked Mr Riley “what do I do?”, and that Mr Riley said words expressly or implicitly directing Mr Perry to refuse admission to the site for all purposes. I find that he probably said words to the effect, “they are not to come on site. They have not given any notice”, which accords with written statements made by Mr Perry for his employer and for Mr Hogan in 2007 and 2008, and which I consider provide the most reliable evidence. Mr Riley now believes that he gave no direction to Mr Perry, and said that he expected their entry to be addressed by Iqon employees who were on the site.
Based on Mr Riley’s recent oral evidence, I find that at the time of this conversation with Mr Perry, Mr Riley probably thought that the union officials wanted to talk to him about the Thornton incident, and that he gave no specific thought to their having OH&S rights of entry. He gave evidence, and I accept, that he had no knowledge at that time that the ACT OH&S Act gave authorised union officials a right of entry without notice, and that he held an incorrect opinion that all union rights of entry to a building site required 24 hours prior notice. As I have noted, this was inconsistent with the clear language of s.78(2) of the ACT Act, with which a person in his position and with his background should have been familiar.
When the union officials reached the gate, Mr Perry told them that they were not allowed to go on site, but agreed to call the general site foreman, who was Mr Clark. Mr Perry did not know, did not request, and was not given any reasons for their request to enter. He has properly not been joined as a respondent to the proceedings, presumably on the ground that he acted purely on orders from his superiors. However, I need to consider whether Mr Clark’s conduct should be assessed in the same light.
Mr Clark’s breach of s.767(3). According to the affidavits of Mr O’Mara and Mr Kivalu, when Mr Clark reached the gate, they told him that he would be in breach of the Act if he refused to allow “access to the site for safety breaches”, and showed him their permits. Using forceful language, Mr Clark told them: “it is our company policy that the union is not allowed on the site”. He maintained his refusal to allow their entry during further conversations, and the union officials returned to their office and discussed what they should do.
Mr Clark later declined to give a statement to Mr Hogan, and he gave no evidence in the proceedings. Other Iqon employees made statements suggesting that the CFMEU officials had themselves used forceful language when requesting entry, which is denied. It is uncontested that Mr Clark, exercising his responsibilities as the most senior Iqon employee on the site that morning, refused entry to the union officials who demonstrated to him their authorisations to enter under the ACT OH&S Act.
When assessing his conduct, and noting his recent admission of breach, I consider it is appropriate to rely upon his own description of the incident, which is set out in a statement he wrote for his employer on or about the day of the incident, although it is not entirely consistent with the evidence of other witnesses. In this he said:
National Convention Centre
Re: Attempted site visit by CFMEU officials Jason O’Mara and Halafihi Kivalu on 7/6/07.
At around 7.58 am I Wayne Clark received a phone call from Adam Perry that the CFMEU was attempting to gain entry to the site via the centre set of site gates on Constitution Avenue.
I immediately went to the above location and introduced myself to both persons of the CFMEU which they both gave me their business cards. Present at the time were Adam Perry of Iqon then followed by Steve Kolano of Iqon, Michael O’Neil of Iqon then later Owen Little of Iqon. They advised me that they were here to visit the site on a report of a safety breach. I advised them that they will not be entering our site under any circumstances.
Jason O’Mara advised me that I am liable for a $33,000 fine for stopping them access. My reply being I am under instructions not to let them in and until advised different they will not be letting them on site.
Both Organisers showed me laminated copies of their ID which I found hard to read as did not have my reading glasses on.
I asked them what was the safety breach in which Jason O’Mara replied an incident on site with Mike Riley, our project manager. I replied that Mike was not on site and best call him. I gave Jason O’Mara Mike’s phone number which he then moved away and called him.
Halafihi Kivalu then told me that if they want to come onto site no one would stop them only the police. I replied ‘try it’ and I will. These comments were repeated on several occasions between both parties.
Jason O’Mara returned and advised me that he had spoken to Mike Riley and that he was in a meeting and would contact him later when available. I told the CFMEU officials that I don’t like them and their version of access is different to my understanding and that 48 hrs notice required to gain access and until advised differently I will be following my superiors instructions.
Jason O’Mara then moved away and made a phone call which I assume was his superior. He then returned and advised me that he will obtain further paperwork and return in a week. I advised ‘no problem and see you later’. Jason O’Mara asked me for my details which I refused to give him. “Wayne” my name only.
Other Iqon witnesses including Mr Byatt denied that there was a general company policy to exclude union officials, and I accept this evidence. I also accept evidence of several Iqon witnesses, including Mr Byatt and Mr Riley, that “at that time we all understood that if the union wanted to come on site they needed to give 24 hours notice.” Mr Clark’s hand-written statement and that of Mr Kolano suggests that some employees might have been unsure whether the required period was 48 hours.
It is the general ignorance throughout the management structure of a substantial ACT building contractor about the OH&S immediate right of entry under ACT legislation, which is of most concern when determining appropriate penalties in the present case.
Mr Riley’s further conduct. The content of Mr O’Mara’s telephone conversation with Mr Riley is the subject of not entirely consistent evidence from both of them. Mr Riley was still engaged in his meeting with other clients, and the conversation was brief. According to Mr O’Mara, he informed Mr Riley that “you are in breach of the Workplace Relations Act because you are obstructing my right of entry to investigate a safety breach”. Mr Riley said he would get legal advice and call back, but never did so before the CFMEU officials returned to their office. According to Mr Riley, he suggested to Mr O’Mara that there was no need to speak to anyone other than himself, and that he would call Mr O’Mara to arrange a meeting when he returned to the Convention Centre site.

There is no need to attempt to reconcile or adjudicate upon some differences in their evidence. It is common ground that Mr Riley implicitly declined to facilitate the union officials’ immediate right of entry by giving the necessary instruction to Mr Clark which would have allowed them to enter the site.
Mr Riley’s response to Mr O’Mara’s telephone call probably amounted to a further refusal of entry or, at least, conduct which delayed entry by authorised persons. However, essentially, it formed part of the same conduct by Mr Riley as his instruction to Mr Perry, which is conceded to have been in breach of s.767(3). If Mr Hogan had pressed an allegation of a separate breach of s.767(3), an adverse finding would probably not have given rise to an added penalty on Mr Riley nor on Iqon (see Construction, Forestry, Mining and Energy Union v Williams (2009) 262 ALR 417 at [14]-[19] and [25]-[26], and Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39 at [39]-[42]). However, as I understood Mr Hogan’s counsel, she was content that I should impose one penalty on Mr Riley for only one breach, being his admitted conduct when directing Mr Perry to refuse entry. His later conversations with various people, including Mr O’Mara and Mr Byatt on the same day remain relevant when considering the surrounding circumstances.
Mr Byatt’s breach of s.767(3). Mr Byatt did not have direct communication with the union officials when they were being refused entry at the gate to the Convention Centre site. However, Mr Clark’s conduct at the gate must be considered in the light of instructions from Mr Byatt which were communicated to him by another employee of Iqon, Mr O’Neil. Mr O’Neil was a procurement officer working in the site office when he was told that “the union is trying to enter the site”. He observed Mr Clark and the CFMEU officials, and overheard some of their conversations. He then withdrew and phoned Mr Byatt, who was at home attending to domestic tasks.
According to Mr Byatt’s affidavit:
[5]    Mr O’Neil said “Brendan, it’s Michael O’Neil here. The union has turned up at the site. They want to enter the site. Should we let them on? Mike Riley is not here at the moment”.
[6]    I said to Mr O’Neil “What do they want?”.
[7]    I can no longer recall everything Mr O’Neil said. I recall Mr O’Neil said “I don’t know”. He repeated that the union wanted to come on to the site and that he did not know why.
[8]    I said “Last time I had a dealing with the union they gave us 24 hours notice that they were going to come on to the site. Unless I know why they want to come onto the site, then they’re not to enter the site.”
[9]    Mr O’Neil said “okay” and the conversation ended. I then went to work at my office in Phillip.
……
[15] On getting to work at Phillip, I rang the site administrator, Daniel Meiklejohn, and asked if he knew what the union wanted on the site that morning. He told me that the union wanted to access an alleged safety breach. I had not previously heard anything about a safety breach.
Immediately after speaking to Mr Byatt, Mr O’Neil returned to the gate and told Mr Clark: “I have been advised by Brendan that they must give us 24 hours notice”, and this led to Mr Clark’s further statements to the union officials which caused them to give up their efforts to enter the site, and to return to their office.
Mr Byatt now concedes that his instruction conveyed to Mr Clarke by Mr O’Neil was not consistent with the ACT OH&S Act, and constituted a breach of s.767(3). In his evidence to me, he accepted that he had obligations as a director to keep up-to date with legislative requirements, and that he had not had accurate knowledge when responding to Mr O’Neil’s call. He “just went on my previous understanding of the requirements for right of entry”.
My Byatt had been involved in the building and construction industry since starting as a cadet in 1989. He had been a director of Iqon since 2004. The company operated only in the ACT in 2006, and was involved in a number of substantial government building projects, mostly as project managers. The National Convention Centre project involved a construction contract for approximately $32m.
The subsequent events. Following the union official’s return to their offices, there was a flurry of telephoning and correspondence. Mr O’Mara reported to the Secretary of his union that there had been a denial of entry, and she instructed him that she would deal with that issue. This led to a complaint being rapidly conveyed to the ABCC and Mr Hogan, who telephoned Mr Byatt in the late morning of 7 June 2007. Mr Byatt accepted Mr Hogan’s advice that “the unions don’t always have to give notice. It depends. Right of entry can’t be refused for alleged OH&S breaches. They can come onsite without notice to investigate suspected OH&S breaches and 24 hours notice is not required in these instances”. Mr Byatt then made inquiries within Iqon. He learned of the union officers’ concerns arising from Mr Thornton’s complaint, and spoke to Mr Riley and officers at the CFMEU.
Mr O’Mara did later interview Mr Riley about the 30 May incident, and the CFMEU and Iqon reported the matter to the ACT Workcover authority. The full investigation and outcome of Mr Thornton’s complaints are obscure on the evidence before me, but it is sufficient to find that there is no evidence showing, with hindsight, that the refusal of entry to Messrs O’Mara and Kivalu on the morning of 7 June materially impeded the subsequent investigations of the CFMEU officials, the ACT OH&S authority, or any other authority.
Mr Byatt gave evidence, which I accept, that he also responded in a timely and sufficient manner to his discovery that he and other managers in Iqon were ignorant of the ACT OH&S rights of immediate entry. He accepted Mr Hogan’s offer to provide a presentation on rights of entry to Iqon staff. This was held on 21 June 2007, and was attended by all the managers who had shared his, Mr Riley’s, and Mr Clark’s misapprehensions. There is no evidence that there was any later cause for concern. Although the respondents have fiercely defended the present application for penalties over several years, I accept that after June 2007 there was little risk of repetition of the breaches which they now admit. I accept Mr Byatt’s evidence to me that the separate rights of entry under ACT OH&S legislation and Commonwealth legislation are “very clear to me now”. I also accept that this has been a stressful and expensive learning process for him and his company.
These subsequent events undoubtedly should be taken into account when considering how to exercise my power to impose penalties for the breaches which occurred on 7 June 2007. The reduced penalties I determine below have given them significant weight in favour of the respondents. However, I do not accept the submissions of the respondents’ counsel that the acknowledgement and speedy rectification by Iqon managers of their ignorance of an important aspect of the OH&S legislation demonstrates that the present application was improperly commenced and pursued, and for that reason no penalties should be imposed on anyone.
It is not the task of the Court itself to decide when prosecutions such as the present should or should not be initiated. Many considerations may properly inform a decision of a government regulator such as the ABCC as to when to initiate proceedings for the imposition of penalties. The Court does not know what these are, and does not expect to be informed of them. In the present case, my assessment that it is appropriate to impose penalties on the evidence before me and in the light of all the circumstances – including the subsequent conduct of Mr Byatt, Mr Riley and Iqon – renders it impossible for me to characterise the proceedings as an improper exercise of a prosecutor’s discretion. I can take into account the length and likely expense to the respondents of the proceedings, but these matters do not themselves tarnish the proceedings, particularly since Mr Hogan’s position on law and fact has been vindicated in the Full Court and by the present admissions of liability by the respondents.
I also do not accept the respondents’ attack on the conduct of the CFMEU officials for not providing advance notice and better reasons for seeking entry on the morning of 7 June 2007. As the Full Court pointed out, the OH&S legislation allowed the union officials to inquire without notice and without first demonstrating a justification. It was reasonable for the officials to expect that the law would be known by the senior managers of Iqon. It was reasonable in the circumstances of Mr Thornton’s complaint for the union officials to exercise their powers by initiating a speedy inquiry, and not broadcasting their concerns to Mr Perry and to the other people who refused them entry at the gate. It was appropriate that their investigation should be conducted with discretion and in a confidential manner, at least until speaking to Mr Riley. It was not unreasonable for them to expect to be able to speak to a senior manager of Iqon at the site office, to inspect relevant safety records, and to speak to people working on the site. They were under no legal obligation to justify their entry at the gate, and I do not accept any of the criticisms made by counsel for the respondents of their failure to give more explanations before or in the course of seeking entry to investigate the Thornton incident, beyond indicating that it concerned an OH&S investigation.
Counsel for the respondents also at times sought to mitigate the circumstances of the beaches on the basis that the persons who refused their entry reasonably expected to receive justifications for entry to accompany the request for entry to the site. I do not consider that there is an evidentiary foundation for this contention, since the evidence suggests that all the relevant Iqon supervisors thought that they could refuse entry solely on the ground of not receiving prior notice and without any discussion with the union officials, and that they responded on that ground alone. Mr Riley was well aware of the safety concern, and did not dispute the legitimacy of an investigation, although he might not have welcomed and wanted to assist it. Mr Byatt was inadequately informed by his own employees, and gave insufficient thought to the situation, when giving his direction to refuse entry. When he did become properly informed later in the morning of 7 June, he accepted – very reasonably – that the Thornton incident justified a prompt investigation. Mr Clark has never given sworn evidence, but his statement to his employer explained his refusal purely upon the basis of a mistaken belief that union officials should always give notice, and upon directions to that effect given by his superiors.

The sentencing considerations

The sentencing principles relevant to a case such as the present were usefully summarised in the submissions of counsel which I recently attached as a schedule in Merhis Constructions, and I shall not repeat it nor its citations. Lists of considerations have been suggested in some judgments, and they can usefully ensure that all possibly relevant matters are thought about. However, the matters which become determinative in each case differ with the particular circumstances, and recent judgments of the Full Court have emphasised the discretionary nature of the power to impose civil penalties for breach of industrial legislation, and have supported a mental process of ‘instinctive synthesis’ (cf. Australian Ophthalmic Supplies v McAlary-Smith (2008) 165 FCR 560 at [27]). I think it better to seek to explain how I have arrived at my decision, rather than to progress through a list of headings of variable importance.
In the circumstances of the breaches which I have set out above, the clearly important element is the admitted ignorance, pervasive throughout the relevant management structure of Iqon, of its obligation immediately to admit authorised union officials to enter a building site for the purpose of OH&S investigations, and the managers’ failure to appreciate that they had no right to refuse entry on the ground of lack of prior formal or informal notice, nor to demand explanations and first be satisfied that an investigation was justified. This misunderstanding of the legislation led to peremptory denial of access by on-site supervisors on this occasion, directed and supported by instructions inadequately considered by the senior off-site managers.
In one sense, the breaches of law by the Iqon managers on 7 June 2007 are understandable in the light of their misapprehension of the law and in circumstances where they were required to make immediate decisions. However, these circumstances point to the underlying serious deficiency in Iqon’s conduct of its business which deserves acknowledgment in the imposition of penalties. The events of 7 June 2007 revealed a serious weakness in the OH&S practices and policies of a substantial building contractor, and in my opinion justify the imposition of a substantial penalty on the company and its responsible senior manager and consultant.
I do not accept that the lack of proper knowledge of the union OH&S right of entry under ACT legislation was reasonable or excusable. Submissions of the respondents suggested that publications by Commonwealth building industry regulators provided an excuse, but in my opinion there is no foundation for such a conclusion. The publications which were tendered did not contain anything misleading at the time of their publication. They clearly were not directed at explaining State and Territory OH&S requirements. Nor is there any evidence that they had any misleading effect on the minds of the Iqon managers or on their company’s policies and instructions concerning union rights of entry. Rather, it is my impression that the managers simply failed to inform themselves about current legal requirements under ACT OH&S legislation. The managers and their company were residents of the ACT, and conducted most of their business activities in that jurisdiction. I can see no excusable reason why they could not have been properly informed about important elements of the local OH&S regime, including its rights of immediate union access to building sites.
As I explained in a similar situation in Merhis Constructions:
28. The agreed facts suggest that a construction manager responsible for two building sites was inadequately educated as to OH&S rights of entry. This is a real concern, suggesting that special deterrence in relation to Khalil Merhi and the company which is responsible for his actions, as well as general deterrence in the building industry, are important considerations when considering penalty. In relation to general deterrence, it is of great public importance that construction company managers, whether off site or on site, should have accurate knowledge of the legal conditions attaching to the OH&S right of entry by authorised union officials, and should have acquired that knowledge before – not during or after – an attempt by an official to exercise that right. There will be circumstances where lives may be put at risk if site managers fail to appreciate and recognise the very substantial limitations on their powers to refuse or delay immediate entry.
…
33. I accept counsel’s submission that there might have been some confusion in the industry, and within Merhis Constructions in particular, as to the effects of Commonwealth legislation on union rights of OH&S entry under State legislation. However, for reasons I have explained above, this submission cannot completely excuse the admitted breach, and a strong message of special and general deterrence needs to be reflected in the appropriate penalty, to encourage the industry to become fully and accurately informed.
I consider that considerations of public interest and general deterrence support the imposition of penalties in the present case on Iqon, Mr Byatt and Mr Riley.
I consider that it is appropriate to recognise that Mr Clark’s conduct did constitute a separate breach of the Act. However, more senior employees of Iqon were responsible for its general policies and practices when responding to requests for entry by union officials. They have accepted that they had immediate supervision of Mr Clark’s conduct on the day, and I do not regard Mr Clark’s conduct as revealing any substantial element of personal culpability. It is, no doubt, desirable that all foremen left in charge of building sites should be accurately educated in how to respond to requests for entry for OH&S investigations. It is desirable that they should educate themselves, if their employers are deficient in doing so. However, in the present circumstances, I consider that it is sufficient to respond to Mr Clark’s personal involvement in a breach of s.767(3) by making a declaration to that effect, without imposing any penalty on him. When reaching this assessment, I have taken into account that Mr Clark is not shown to have any previous or later record of similar contraventions, and I have also had regard to the character reference given by Darren Sterzenbach.
Assessing the mitigating circumstances in relation to the other respondents, I have above pointed to circumstances which mitigate the gravity of the breaches and the need for special deterrence in the present case. In particular, I give substantial weight to the evidence of Mr Byatt’s swift acknowledgement of his ignorance and his appropriate efforts to rectify the prevailing misconceptions within his company. For his part, Mr Riley also seems to have swiftly rectified his refusal to acknowledge the union’s right of entry, and there is no suggestion that there was any repetition.
However, I am not confident that even now Iqon fully appreciates the seriousness of the deficiency in the education of its managers which was revealed in the events of 7 June 2007. I found lacking in the case presented to the Court on behalf of the respondents, even in final submissions, an unequivocal expression of understanding and contrition in relation to the deficiency. There remained in the respondents’ submissions a strong note of protest and belief that they were unfairly or even improperly prosecuted. The managers of Iqon need to appreciate that they have a constant duty to be familiar with their company’s current obligations under industrial legislation, particularly OH&S legislation, and to implement that knowledge in appropriate work practices and procedures. It is unsatisfactory for them to excuse their failures by blaming the persons whose conduct has revealed their deficiencies.
Although the respondents did ultimately admit that their conduct was in breach of s.767(3), their admissions came at the end of the proceedings, and produced no savings to the public purse. I do not consider that this circumstance should result in any substantial reduction in penalty.
I accept that Mr Byatt and his company have an otherwise excellent record in relation to compliance with legislation and generally in his conduct in the building industry. I have given weight to the reference from Mr Armstrong in this respect. I accept that Mr Riley is similarly a respected participant in the building industry with an otherwise unblemished record.
Balancing all the relevant considerations, and giving particular thought to the significance of the breaches in all the circumstances I have described above, I consider that a real penalty at the lower end of the permissible range would provide an appropriate response in the exercise of my powers under s.769(1) of the Act. I would impose a penalty of $10,000 on Iqon, and $1,000 on each of Mr Byatt and Mr Riley. Proportionately, this recognises that the company is primarily responsible for the pervasive ignorance of its managers about OH&S rights of entry, and that the culpability of its managing director and of the project manager for the site should be treated as roughly equal.

I accept the applicant’s submission that I should make declarations as to the breaches, and that the penalties should be paid to the Commonwealth.
I note that, although issues concerning the costs of all the proceedings in this Court were remitted by the Full Court for further consideration, neither party submitted that I should make any costs award under the exceptional grounds provided in s.824 of the Act.

I certify that the preceding seventy-five (75) paragraphs are a true copy of the reasons for judgment of Smith FM

Date: 12 November 2010