Keenan v Cummins South Pacific Pty Ltd (No.2)
[2019] FCCA 523
•6 March 2019
FEDERAL CIRCUIT COURT OF AUSTRALIA
| KEENAN v CUMMINS SOUTH PACIFIC PTY LTD (No.2) | [2019] FCCA 523 |
| Catchwords: INDUSTRIAL LAW – Penalty – reinstatement – large multinational corporation – deliberate breaches of the Fair Work Act. |
| Legislation: Fair Work Act 2009, s 545(2) |
| Cases cited: Australian Licenced Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd (2011) 193 FCR 526 Burazin v Blacktown City Guardian Pty Ltd [1996] IRCA 606 Cahill v Construction, Forestry, Mining and Energy Union (No 4) [2009] FCA 1040 Dafallah v Fair Work Commission (2014) 225 FCR 559 Dasreef Pty Ltd v Hawchar (2011) 243 CLR 588 March v E & MH Stramare Pty Ltd (1991) 171 CLR 506 Murrihy v Betezy.com.au Pty Ltd (No 2) (2013) 221 FCR 118 Qantas Airways Limited v Gama (2008) 167 FCR 537 Slonim v Fellows (1984) 154 CLR 505 Transport Workers’ Union of Australia (NSW) v No Fuss Liquid Waste Pty Ltd [2011] FCA 982 |
| Applicant: | ANDREW KEENAN |
| Respondent: | CUMMINS SOUTH PACIFIC PTY LTD (ACN 006 332 949) |
| File Number: | MLG 127 of 2016 |
| Judgment of: | His Honour Judge J D Wilson QC |
| Hearing date: | 1 March 2019 |
| Date of Last Submission: | 1 March 2019 |
| Delivered at: | Melbourne |
| Delivered on: | 6 March 2019 |
REPRESENTATION
| Counsel for the Applicant: | Mr R Millar |
| Solicitors for the Applicant: | McDonald Murholme |
| Counsel for the Respondent: | Mr J Forbes leading Mr J Fetter |
| Solicitors for the Respondent: | Fisher Jeffries |
DIRECTION
By 10:15am on Friday 8 March 2019 the parties submit a minute of proposed orders that give effect to these reasons.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT MELBOURNE |
MLG 127 of 2016
| ANDREW KEENAN |
Applicant
And
| CUMMINS SOUTH PACIFIC PTY LTD (ACN 006 332 949) |
Respondent
REASONS FOR JUDGMENT
Introduction
These are my orders and reasons following my decision on liability in this proceeding.[1]
[1] Kennan v Cummins South Pacific Pty Ltd [2018] FCCA 2600
In my decision on liability, I found that the respondent had contravened the provisions of the Fair Work Act in relation to six discrete events. Those proven contraventions were proscribed by s 340(1) of the Fair Work Act. I also found that the respondent’s dismissal of the applicant was in breach of s 352 of the Act.
Following evidence and submissions on penalty and consequential orders, I shortly reserved my decision, which I now deliver.
Synopsis
For the reasons that follow, in my judgment it is appropriate to make orders as follows –
a)the respondent must reinstate the applicant’s employment with the respondent forthwith;
b)the respondent must pay the applicant a sum representing his unpaid salary consequent upon his unlawful termination;
c)the respondent must pay the applicant superannuation entitlements;
d)the respondent must pay the applicant’s long service leave entitlements; and
e)the respondent must pay a penalty at the upper range.
Reinstatement
Mr Keenan gave evidence that he wanted to be reinstated to the job from which he was dismissed in November 2015. Initially, he requested that an order for reinstatement be accompanied by safeguards to prevent against the possibility of reprisals against him. Later, Mr Keenan’s counsel, Mr Millar, abandoned that stance. In the end, Mr Keenan sought unqualified orders for his reinstatement.
Mr Millar relied on a collection of authorities to the effect that s 545 of the Fair Work Act expressly empowers a court to make an order for the reinstatement of an employee. Those authorities include the decision of the High Court in Slonim v Fellows[2] where the court held that a court should act with caution before ordering reinstatement because such an order interferes with an employer’s ordinary rights.
[2] (1984) 154 CLR 505
That cautionary observation was the subject of comment by Finkelstein J in IndependentEducation Union v Geelong Grammar School[3] where his Honour held that when the relevant dismissal was for a prohibited reason the court should not be hesitant in granting the remedy in an appropriate case.
[3] [2000] FCA 557
On behalf of the respondent, in careful and helpful submissions, Mr Forbes and Mr Fetter contended that in all the circumstances of this case it was not appropriate to order reinstatement. Mr Forbes advanced a collection of propositions to support his contention. As his primary position, Mr Forbes said that, based on the observations of the High Court in Slonim, the discretion to order reinstatement must be exercised with caution where the working relationship between the employer and employee is so close that the imposition of such a relationship by court order would be destructive to industrial harmony.
Thereafter, the respondent spelt out the following.
First, subsequent to Mr Keenan’s departure from the respondent some other person has taken over the role that Mr Keenan occupied and it would be unfair to require the respondent to dismiss that other person.
Next, the respondent said that no other vacancies exist within the respondent.
Next, the respondent said it is not appropriate to require Mr Keenan to be reinstated in a role overseas, possibly with another entity within the respondent’s group of members, as only the respondent and not those other overseas entities is a respondent to this litigation.
Next, the respondent said that upon any reinstatement, Mr Keenan would be reporting to Ms Beaulieu, being a respondent executive in respect of whom Mr Keenan’s previous evidence disclosed his distrust for her.
Next, the respondent said it would be “inappropriate and embarrassing” (counsels’ words) to reinstate Mr Keenan to a leadership role because of unfavourable evidence in the trial on liability and because he has been out of leadership roles for three years.
Next, the respondent said reinstatement is not necessary to rehabilitate Mr Keenan’s career.
Finally, the respondent said it is likely to cause the respondent disruption to reinstate Mr Keenan because he will retire in about four years.
I reject each of those propositions advanced by the respondent.
By way of overview, it must not be overlooked that Mr Keenan’s loss of employment was the consequence of the respondent’s unlawful conduct. It ill behoves the respondent to mount an array of arguments to the effect that the respondent’s own internal organisation of its own staff is such as to prevent the court from reinstating Mr Keenan to the position he would still occupy had the respondent not engaged in the prohibited conduct. Put differently, I reject the notion that Mr Keenan is shut out from his primary remedy (reinstatement) merely because the respondent, after engaging in the unlawful conduct, installed an employee to take the very position from which Mr Keenan was unlawfully removed. Nor do I regard it as an acceptable reason not to order reinstatement merely because a more senior employee, Ms Beaulieu, will have contact with Mr Keenan. If she behaves inappropriately hereafter she may well expose herself to the consequences set out in the Fair Work Act.
Let me go to each of the respondent’s arguments against reinstatement.
The first argument is that Mr Keenan’s former role is now being filled by someone else and that “it would be unfair” to reinstate Mr Keenan to that role as the incumbent would have to be dismissed. That is wrong. If an order is made reinstating Mr Keenan to his former role, the current incumbent need not be dismissed. That person can be elsewise deployed. But in any event the consequences to the respondent of reinstatement is a matter for the respondent – it is not a reason for not making the order. To my mind, acceptance of the respondent’s contention would sanction the consequences of a respondent unlawfully dismissing an employee, then filling the role then later arguing that reinstatement was impossible despite the unlawful conduct leading to the dismissal. I do not accept that “it would be unfair” (to quote the respondent’s emotive proposition) to refuse reinstatement merely because the respondent organised its affairs consequent upon its unlawful dismissal of Mr Keenan to install his replacement. Whether or not that exposes the respondent to consequences at the hands of the incumbent cannot be gainsaid. At all events, an acceptance of the respondent’s contentions on the first point required me to accept the evidence about Mr Keenan’s former role having been filled indefinitely into the future, as given by Ms Britten. I did not find Ms Britten’s evidence to be particularly useful. She had next to no knowledge of the background history to this litigation and she had not even read the judgment on liability, a fact I found extraordinary given that she was to become a witness in the subsequent aspects of this case.
Let me turn to the argument that reinstatement is impossible because no other vacancies exist within the respondent. This argument became irrelevant in view of my decision that the respondent must reinstate Mr Keenan to the role he occupied immediately prior to his unlawful dismissal.
As to the argument that the respondent should not be required to reinstate Mr Keenan to a role overseas, I do not make such an order. The order I make is to reinstate him to the role he occupied immediately prior to his unlawful termination.
Then there was the argument that reinstatement was impossible as it involved Mr Keenan reporting again to Ms Beaulieu and that the two had suffered a difficult relationship making it impossible to order reinstatement. I disagree. The respondent’s conduct was found to have been unlawful. Ms Beaulieu was a participant deeply involved in a great deal of that unlawful conduct. Her behaviour hereafter must comply with good corporate governance according to Australian law as well as proper behaviour according specifically to the Fair Work Act. She has no choice in the matter. I do not accept that Mr Keenan’s reinstatement will necessarily lead to a difficult working relationship. Ms Beaulieu will be required to behave according to law.
Then the respondent said it would be “embarrassing” for a reinstatement order to be made. Precisely why a reinstatement order would orchestrate “embarrassment” to the respondent was not said nor was it explained in what way the respondent would be embarrassed. In the final sentence at paragraph 20 of their written submissions, counsel for the respondent made a submission that I took to be in terrorem as follows –
… While there may have been limited publicity of the trial to date, the Court should be realistic about the prospect that, if Mr Keenan is reinstated, the facts found in the judgment will come out.
That is not a valid basis for not ordering reinstatement. For that matter the reasons for judgment on liability contained observations about the respondent that supported the findings of multiple contraventions of the provisions of the Fair Work Act.
Then there was the argument that Mr Keenan is 55 years of age and will retire in four years and so reinstatement is not necessary. I reject it. The question is not whether Mr Keenan’s age renders reinstatement necessary or otherwise. The question is as posed by the High Court in Slonim and by the Federal Court in Geelong Grammar. In an appropriate case, reinstatement may be ordered. Mr Keenan’s age is but one matter to be assessed. It does not predominate in the list of considerations.
None of the grounds proffered by the respondent were attractive to me as a basis for refusing a reinstatement order. I order Mr Keenan to be reinstated forthwith to the role he occupied immediately prior to his unlawful termination in November 2015.
Back pay
Mr Keenan adduced evidence that he was not paid his salary from 1 January 2016 until the date of the hearing on penalties and other relief. That salary was calculated as follows –
Period
Amount
1/1/16 – 30/6/16
$163,504.40
1/7/16 – 30/6/17
$294,648.01
1/7/17 – 30/6/18
$302,148.32
1/7/18 – 1/3/19
*$207,151.12
Total
$967,451.85
*244 days @ 848.98 per day
Mr Millar submitted that the sum of $10 000 should be deducted, making an amount of $957 451.85 for back pay.
On behalf of the respondent it was argued that if I was minded to make an order for compensation then it should be limited to no more than six months’ worth of lost income calculated as follows (with the citation omitted) –
(a) Base salary
$99,096.00
(b) Variable Compensation (20%)
$39,638.40
(c) Car
$23,670.00
(d) Health benefit
$ 1,100.00
$163,504.40
less 5 weeks’ notice paid
$ 27,667.902
$135,836.50
The total of $135 836.50 was said to represent no more than six months’ salary. Three grounds were advanced to support that contention, namely –
a)at the time of his dismissal the applicant did not enjoy secure employment and by reason of performance deficiencies he was likely to have been terminated within six months;
b)the respondent could have exercised a contractual right to terminate the applicant lawfully at any time for cause or for no cause on five weeks’ notice; and
c)the applicant could have wholly or substantially mitigated any loss arising from the respondent’s contraventions within six months of the date of his termination had he wished to do so.
In addition, the respondent said it was appropriate to order –
a)the sum of $10 000 for pain, suffering and humiliation;
b)the sum of $3 000 in respect of losses associated with the termination of his membership with the respondent superannuation plan; and
c)superannuation amounts of $78 007.12.
A significant debate emerged between counsel about the proper order to be made on the question of compensation generally, assuming reinstatement was not ordered. That debate evaporated having regard to my orders concerning reinstatement. That said, the period between the termination (the end of 2015) and the date of these reasons in March 2019 represents more than six months and the respondent argued that Mr Keenan’s compensation should not go beyond six months for the reasons already recorded.
A substantial number of legal propositions underpinned this consideration of compensation. All counsel most helpfully distilled the essence of the points, making it easier to state them. They include the following –
a)the terms of s 545(2) of the Fair Work Act are enabling, not mandatory, in that the section permits an order awarding compensation to be made but the section does not require the making of any such award;
b)an appropriate causal connection must exist between the contravention and the loss claimed as was held Australian Licenced Aircraft Engineers Association v International Aviation Service Assistance Pty Ltd;[4]
c)the statutory provisions of s 545(2) of the Act have a connection to common law concepts of causation as espoused in cases that include March v E & MH Stramare Pty Ltd;[5]
d)the award of compensation is a task derived from statute and not from common law as was explained in Murphy v Overton Investments Pty Ltd[6] and in Qantas Airways Limited v Gama;[7]
e)having regard to the fact that the award of compensation is discretionary the governing consideration is the matter or matters the court considers appropriate in the circumstances and, in a particular case, that may even operate so that the court orders less than full compensation, as was held in Dafallah v Fair Work Commission;[8]
f)the Full Court in Maritime Union of Australia v Fair Work Ombudsman[9] held that the task of the court awarding compensation is to assess the compensation that was causally related to the contravention.
[4] (2011) 193 FCR 526
[5] (1991) 171 CLR 506
[6] (2004) 216 CLR 388
[7] (2008) 167 FCR 537
[8] (2014) 225 FCR 559
[9] [2015] FCAFC 120
The respondent argued that Mr Keenan’s employment was not guaranteed into the future even though he had been with the respondent for a long time. The respondent said the respondent was at all times able to terminate Mr Keenan’s employment if done in accordance with his employment contract or for no reason. The respondent argued that Mr Keenan did not enjoy secure employment. Further, the respondent contended that in the liability trial a large body of evidence was adduced to the effect that Mr Keenan’s work performance was defective and would likely have led to his dismissal in any event. Those factors were identified in the following manner[10] –
[10] Respondent’s outline of submissions on remedy and penalty (filed 22 February 2019) 10-12 [45(a)‑(n)]
a)Mr Keenan conceded non‑performance at the 2014 stakeholder feedback and accepted the validity of negative feedback from Ms Kirsch (Transcript p62 at 33 to p65 at 2).
b)He demonstrated a propensity for conflict in dealing with matters about which he did not agree. For example, his unwillingness to accept a decision about internal pricing and openly disputing a decision in the presence of other leaders and his most senior manager Ms Kirsch, who found the conduct to be unacceptable (Transcript Keenan XN p73 at 4‑32, p94 at 11‑45);
c)There was his abrasive behaviour at the Nashville meeting, which led him to upset and later apologise to his managers (Keenan affidavit at [83] and [85], Transcript p81 at 1 to p82 at 26);
d)His concession that his language at that meeting was perceived as hostile and that he had created a very bad first impression as a leader and with his new managers (Transcript Keenan p82 at 43 and following);
e)Mr Keenan conceded that his black and white analytical view of the world was creating difficulties for him accepting the way CBS worked and led to adverse perceptions about his approach (Transcript Keenan p82 at 43 and following);
f)His concession that he processes things quickly, gives responses quickly and that that makes him sound like he is not listening (Keenan affidavit [86]);
g)His incorrect approval of a credit card transaction by Mr Sharma and his acknowledgment that he wasn’t aware of the company policies about such things and that he should have been. He acknowledged that he did not properly exercise due diligence in checking the claim and that as Regional manager it was his job to do so (Keenan Transcript p38-39, p44 at 29-45, p162 at 10-15);
h)That he knowingly disobeyed a direction from Ms Beaulieu not to discuss the Sharma ethics investigation with others and that he knew it was not normally the right thing to do (Keenan Transcript p112 at 9-23, p137 at 14-28))
i)That his conduct in not signing a show cause letter in relation to Mr Sharma created a perception that he was more concerned about himself than he was about the company (Keenan p128 at 31-39);
j)He acknowledged that it was clear to him in July 2015 that he needed to find another role because he was not impressing his superiors with his performance and that time was ticking on that 6 months (Keenan p166 at 34-44);
k)In a “7-habits” self-assessment prior to a training course Mr Keenan had rated himself as a 10/100 on the following statements: I keep a positive attitude, I do not dominate discussions, I communicate with respect towards others (Keenan p169 at 20);
l)In that 7 Habits self-assessment, which he deposed to be true and accurate, Mr Keenan said that he needed to be more patient in finding answers and more collaborative - and that he needed to find a new role in Cummins that was better suited to his talents (Keenan Transcript p178 at 16‑44)
m)He acknowledged that he needed to improve his performance in having more interaction with his team, needed to share more, needed to accept Ms Kirsch’s criticism about not being comfortable in the grey, should not dominate discussions, be more patient and collaborate. He accepted the proposition that these things were failings on his part (Keenan Transcript 179 at 5 to 180 at 18). He said he was being brutally honest with himself (Keenan Transcript p 223 at 27‑39)
n)That he made a comment to a pregnant woman, regarded as a joke by him but not his managers, that “next time I see you you’ll be slimmer” (Keenan Transcript p194 at 36 to p195 at 7);
Those issues were explored at trial. Findings were made about them. Despite those arguments, I found that multiple contraventions had been proven. In my view, the contention that Mr Keenan’s employment was in jeopardy during 2015 was not open for the reasons I have addressed in the judgment on liability. Had he not been the subject of the matters I found to have been contraventions, in all likelihood Mr Keenan would have continued in his employment from late 2015 to the date of this judgment.
As to the argument that the respondent could at any time have exercised a contractual right to terminate Mr Keenan lawfully for cause, or upon five weeks’ notice for no cause, no evidence was adduced in this case that the respondent served a notice of its intention to terminate for either.
It seemed to me that the necessary causal link was in fact demonstrated between the contraventions and the period for which Mr Keenan sought compensation aggregating to the amount of $967 451.85 from which $10 000 was an amount Mr Keenan volunteered as warranting deduction.
Mr Millar relied on the decision of Gray J in National Tertiary Education Union v Royal Melbourne Institute of Technology[11] to the effect that Mr Keenan would be treated as having been employed by the respondent from the date of termination until the date of reinstatement. I am bound by that decision and regard it has pertinent to the circumstances in this case. I propose to apply it.
[11] [2013] FCA 451
The respondent argued that Mr Keenan failed to seek (or to adequately seek) alternative employment. I do not agree. Mr Keenan gave evidence of the measures he took to obtain alternative employment. Mr Forbes said Mr Keenan failed to retain an agent or consultant to search for job prospects for him. Mr Forbes said the respondent’s witness, one Holmes, gave evidence to the effect that Mr Keenan’s prospects of finding alternative employment were promising. Aside from the fact that Mr Holmes did not adequately qualify himself to give the information he gave, certainly not to the extent of which the High Court spoke in Dasreef Pty Ltd v Hawchar,[12] Mr Holmes’s evidence was premised on the unreality that a man of Mr Keenan’s years who had been terminated in undignified circumstances could readily obtain alternative employment. I found that evidence extremely difficult to accept as a matter of common human experience. I place little weight on the evidence of Mr Holmes.
[12] (2011) 243 CLR 588
Mr Keenan sought an order of compensation for distress and hurt. The respondent said any such sum was negligible. Conversely, Mr Keenan sought a figure of $100 000.
Certain legal principles must be stated before the amount of any award for distress is ordered. Among them are the following –
a)the court has power to order damages for distress shown to be a direct consequence of the contravention, as was held in Australian Licenced Aircraft Engineers Association;[13]
b)any award in respect of hurt should take into account confining compensation to reasonable limits, as was held in McIlwain v Ramsey Food Packaging Pty Ltd (No 4);[14]
c)it is insufficient to complain of the type of distress that ordinarily accompanies most terminations, as was held in Burazin v Blacktown City Guardian Pty Ltd;[15] and
d)orders for compensation for hurt have been made by the Federal Court in such cases as Australian Licenced Aircraft Engineers Association and Transport Workers’ Union of Australia (NSW) v No Fuss Liquid Waste Pty Ltd.[16]
[13] (2011) 193 FCR 526, 594‑596
[14] [2006] FCA 1302
[15] [1996] IRCA 606
[16] [2011] FCA 982
It was true that no medical evidence supported the claim for compensation for hurt. It struck me that the sum of $100 000 was an ambit claim unsupported by any scientific theory. Equally, the sum volunteered by the respondent was absurdly low. In my view, the correct amount was $20 000.
Long service leave
The respondent said that Mr Keenan should be paid $78 007.12 on the basis that –
a)he was owed $88 111.89;
b)at the date he was dismissed, he had been overpaid by $10 104.77
Consequently, the respondent said it was liable to Mr Keenan for no more than $78 007.12.
Mr Keenan’s position on long service leave was not clear from his submissions. Mr Millar said it would suffice for an order to be made recognising the period of service. I agree and propose to make an order in those terms.
Superannuation
Statutory amounts that would have been payable had there been no break in Mr Keenan’s employment must be paid. Those sums are easily ascertained.
Penalties
Certain matters concerning penalties were agreed. One was the agreed position that a single course of conduct was involved. The respondent said the relevant maximum amount payable was therefore $51 000 whereas Mr Millar said that by virtue of certain legislative amendments the relevant amount increased from $51 000 to $54 000, the amendment commencing on 1 July 2015.
Mr Forbes said that the total penalty to be imposed should be at the lower end, namely 20% to 30% of the maximum amount payable. Conversely, Mr Millar said that penalty should be at the maximum range.
In order to aid the speedy determination of this aspect of the case, let me state in a condensed form that all of the separate matters that fell for my decision according to Kelly v Fitzpatrick[17] and Australian Ophthalmic Supplies Pty Ltd v McAlary‑Smith[18] have been specifically considered by me. They are –
[17] [2007] FCA 1080
[18] (2008) 165 FCR 560
a)the nature and extent of the conduct which led to the breaches;
b)the circumstances in which that conduct took place;
c)the nature and extent of any loss or damage sustained as a result of the breaches;
d)whether there had been similar previous conduct by the respondent;
e)whether the breaches were properly distinct or arose out of the one course of conduct;
f)the size of the business enterprise involved;
g)whether or not the breaches were deliberate;
h)whether senior management was involved in the breaches;
i)whether the party committing the breach had exhibited contrition;
j)whether the party committing the breach had taken corrective action;
k)whether the party committing the breach had cooperated with the enforcement authorities;
l)the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements; and
m)the need for specific and general deterrence.
First, let me address the nature and extent of the conduct that led to the breaches. Mr Keenan said it was deliberate and not inadvertent. Rather, he said it was sustained over several months culminating in Mr Keenan’s termination. Mr Keenan urged me to impose a substantial penalty.
The deliberateness of the respondent’s conduct is obvious. It was no accident. The respondent’s conduct was sustained over a significant period.
Next, it is pertinent to consider the circumstances in which the relevant conduct took place. Mr Millar submitted that detailed factual findings have been made in respect of each contravention. That much is true and explains why the judgment on liability is so long. Mr Millar said no warrant was shown for reducing penalties. I agree.
Then it became relevant to examine the nature and extent of any loss or damage sustained as a result of the breaches. Mr Keenan said his loss and damage was substantial. That much is true. Mr Millar said the termination of Mr Keenan’s career was very significant and that was especially the case in view of the unlawful nature of that termination. The details of Mr Keenan’s losses have been canvassed above.
The question of previous breaches was next relevant. Both parties acknowledged that the respondent was a first‑time contravener. The respondent said that factor was an important factor in reducing penalty. Counsel for the respondent urged me to rely on a decision of a magistrate on point. It is not my practice to rely on magistrates’ decisions because they do not bind me. I decline to do so in this case. The respondent submitted that “the clean history of the respondent is a very important factor”. To my mind that overstated the position very considerably. The fact that this case is the first of its kind in the respondent’s history is a factor but only one factor of importance and by no means is it as important as the respondent’s counsel would have had me accept.
Then it became necessary to address whether the breaches were properly distinct or arose out of one course of conduct. Both parties agreed that one course of conduct was involved involving one penalty. Mr Millar said in written submissions that if a single penalty was involved, as it is in this case involving numerous breaches over an extended period, a substantial penalty should be ordered. I agree.
The size of the business enterprise is a relevant consideration. The respondent’s counsel conceded that the respondent was a substantial global entity.
The deliberateness of the contravention has already been addressed.
The involvement of senior management was next relevant. Several persons at high executive level in the respondent were involved in this dispute. They included Ms Kirsch, Ms Beaulieu and Ms Elderbrandt. While not all had the ultimate power of veto in respect of certain conduct it could not be said that any of those three were mere observers in the facts giving rise to this litigation. They were intimately involved.
The search for contrition, relevant to another of Tracey J’s formulations from Kelly, was a search in vain in the circumstances of this case. The absence of contrition is not an aggravating factor, a proposition that I specifically took into account by reason of the findings in Cahill v Construction, Forestry, Mining and Energy Union (No 4).[19] But the absence of contrition is a matter germane to penalty. In this case I detected no contrition. That was a telling factor.
[19] [2009] FCA 1040
So far as corrective action was concerned, the respondent said no opportunity existed for corrective action, and Mr Keenan said no corrective action was taken, opportunity or otherwise. The bottom line was that no corrective action was taken. That had a bearing on penalty.
Cooperation with the enforcement authorities was not relevant in this case as this was a private action.
Compliance with minimum standards was a matter over which the parties were divided. Mr Keenan said a significant penalty was called for to ensure compliance with the Fair Work Act. The respondent said this was not a relevant factor. In my view it was indeed a relevant factor.
Considerations of general and specific deterrence also divided the parties. The respondent relied on the observations in General Manager of the Fair Work Commission v McGiveron[20] in contending that there was no benefit in general deterrence. Conversely, Mr Millar relied on Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union[21] in contending that the imposition of significant penalties is the only way the respondent will “sit up and pay attention” (his words) to the unacceptability of breaches of the Fair Work Act. Citing Murrihy v Betezy.com.au Pty Ltd (No 2)[22] Mr Millar said the penalty should be payable to Mr Keenan.
[20] [2017] FCA 405
[21] (2008) 171 FCR 357
[22] (2013) 221 FCR 118
In my view, whether a large or small penalty is imposed on this respondent that will be unlikely to cause it to “sit up and pay attention”, as Mr Millar put it, having regard to the enormity of the respondent’s enterprise. It is a very large multinational corporation. The better issue is whether the imposition of a penalty and its size will deter this respondent specifically and other would‑be respondents generally from engaging in similar contraventions. In my view it will.
Amount of penalty
Taking into account all of those factors, I hold as follows –
a)the maximum penalty is $54 000 for a single contravention as is involved in this case;
b)the contravention is at the serious end of the range of contraventions;
c)an amount in the sum of $45 000 is appropriate
Orders and directions
I direct that counsel for the parties confer and bring in minutes to reflect these reasons within 48 hours.
I certify that the preceding sixty-seven (67) paragraphs are a true copy of the reasons for judgment of his Honour Judge J D Wilson QC
Date: 6 March 2019
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