Macpherson v Coal and Allied Mining Services Pty Limited (No.3) - [2009] FMCA 1205

FEDERAL MAGISTRATES COURT OF AUSTRALIA

MACPHERSON v COAL & ALLIED MINING SERVICES PTY LIMITED (No.3)

[2009] FMCA 1205

INDUSTRIAL LAW – Penalty – consideration of factors relevant to penalty – unlawful stand down following refusal to work lawful hours provided by new roster – where employee’s actions in breach of contract and alternative to stand down was dismissal – no prior contravention and no need for specific deterrence.

Workplace Relations Act 1996 (Cth), ss.3, 691B, 791, 841

Gapes v Commercial Bank of Australia Ltd (1980) 41 FLR 27
Australian Workers Union v Stegbar Australia Pty Ltd [2001] FCA 367
Rojas v Esselte Australia Pty Ltd (No.2) [2008] FCA 1585
Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65
Australian Rail, Tram and Bus Industry Union v Rail Corporation of New South Wales (No 2) [2009] FCA 1417
CFMEU v Coal & Allied Operations Pty Ltd (No 2) (1999) 94 IR 231
John L Pierce Pty Ltd v Kennedy (2001) 113 FCR 177

Applicant:

ALLAN MACPHERSON

Respondent:

COAL & ALLIED MINING SERVICES PTY LIMITED (ACN 104 081 290)

File Number:

SYG 2960 of 2008

Judgment of:

Raphael FM

Hearing date:

24 November 2009

Date of Last Submission:

24 November 2009

Delivered at:

Sydney

Delivered on:

10 December 2009

REPRESENTATION

Counsel for the Applicant:

Mr A M Slevin

Solicitors for the Applicant:

Slater & Gordon

Counsel for the Respondent:

Mr A B Gotting

Solicitors for the Respondent:

Freehills

ORDERS

The Respondent pay a penalty of $110.00 for breach of s.691B of the Workplace Relations Act 1996 (Cth).
Penalty be paid to the Applicant pursuant to s.841 of the Workplace Relations Act 1996 (Cth) within 28 days.

FEDERAL MAGISTRATES
COURT OF AUSTRALIA AT
SYDNEY

SYG 2960 of 2008

ALLAN MACPHERSON

Applicant

And

COAL & ALLIED MINING SERVICES PTY LIMITED
(ACN 104 081 290)

Respondent

REASONS FOR JUDGMENT

On 9 September 2009 I handed down a decision making a declaration that the respondent was in breach of s.691B of the Workplace Relations Act 1996 (Cth) (the “Act”) by standing down the applicant on 13 November 2008. I reserved my decision on penalty pending a hearing which took place on 24 November 2009. The factual matrix found by me and discussed in my reasons of 9 September 2009 inform this decision. So, whilst I will make a précis of the relevant findings here, it is those original findings which form the basis of the decision.
Mr MacPherson is a skilled electrical fitter working in the maintenance team for Coal and Allied Mining Services Pty Ltd (the “Company”). The Company had wished to introduce new rosters for its field services crew and over the spring months of 2008 held meetings with its workforce and negotiated with the union. The most significant change to the roster that Mr MacPherson was to work from to that he had previously been working was the introduction of a 44 hour week rotating through a two week cycle of four day shifts. Mr MacPherson had previously been working a 40 hour week on a rotating day/afternoon shift Monday to Friday. The proposed new roster was not popular with members of the field services crew who wanted the 40 hour week retained. On 12 November 2008, the second day of the first week of the operation of the new shifts, Mr MacPherson and a number of his colleagues informed their supervisor that they were only able to work until 2.30 pm that day because they had personal family commitments. Each of the employees was questioned about his reasons for needing to leave work early. Mr MacPherson’s supervisor, having been told by Mr MacPherson that he would not provide details of the “family commitments”, told Mr MacPherson that he would be stood down without pay until he was prepared to commit to work all the hours required by the roster. Mr MacPherson left work at 1.20 pm on 12 November 2008 and did not return to work until 14 November when he signed a document agreeing to work the new roster “under protest”.
In my decision, I found that the company had acted lawfully in changing the rosters and that Mr MacPherson had an obligation to work the full hours.
“[69] Mr MacPherson was not asked outright what the personal circumstances or family reasons were but whether he wished to inform his employer of them. Mr MacPherson declined. This left the employer with no information and with what I infer to be a strong suspicion that in the context of the moment the ground might not be genuine. The evidence is that all the maintenance workers who had informed the company that they could not work past 2.30 pm did so for the same reason. Some did give grounds that the company accepted as constituting valid family or personal reasons. I am satisfied that Mr MacPherson was given an opportunity to work his full shift on 12 November but declined to do so. I am satisfied that in all the circumstances the company was within its rights not to accept Mr MacPherson’ s bald statement that he had family reasons for not completing the shift that day.”
At [73] of my decision, I extracted part of the decision of Deane J (as he then was) in Gapes v Commercial Bank of Australia Ltd (1980) 41 FLR 27 where his Honour said:
“If, when the appellant refused to perform a significant part of his duties, the bank had simply directed him to refrain altogether from working in his job I would have been of the view that the appellant was not entitled to be paid his salary during any period in which he was absent from his duties in accordance with that direction or in which he performed some of his duties in defiance of the bank’s continuing direction to abstain from working altogether. An employer is entitled to decline the services of an employee who refuses to perform significant parts of the job which he is employed to do at least so long as that refusal of the employee persists.”
I continued at [74]:
“It seems to me that this dicta perfectly describes the situation with which Mr MacPherson faced his employers. He decided that he would not work after 2.30 p.m. on 12 November. The reasons he gave for doing so were not sufficient to enable him to avoid breaching his contract of service. He could have come back and performed his contract but he did not. My interpretation of his actions on 13 November was that he was still not prepared to comply with his contract of service. He refused to perform a significant part of his job, namely the extra six hours over the 38 hours referred to in s.226(1)(a)(i).”
I concluded that it was Mr MacPherson’s decision not to continue to work on 12 November. He had determined to leave work at 2.30 pm and leave work he did albeit about an hour earlier. On the other hand, having considered the decision of the Federal Court in Australian Workers Union v Stegbar Australia Pty Ltd [2001] FCA 367 and other authorities approving it, I concluded that the company’s actions in regard to 13 November did constitute an unauthorised stand down. I went on to say at [78]:
“There does appear to be some perversity in this situation. What is an employer whose employee declines to work the full hours required of him expected to do? It would be argued by Mr MacPherson that the employer was expected to go through the disputes procedure. But this takes time. The employer is then placed in the position of having either to dismiss Mr MacPherson, a long time employee, or suffer the consequences of him working shorter hours than other members of his shift with the consequent inconvenience to the company and possible danger to his fellow employees. It would have been a hard decision to dismiss Mr MacPherson. The action taken alleviated the necessity for it.”
Although the view which I have taken about what occurred on 13 November is the subject of an appeal (as is my finding that I was not prepared to order payment for that day) the parties wish me to dispose of the question of penalty so that all matters in contention could be dealt with by the Full Bench of the Federal Court.
I was provided with helpful submissions on penalty by both parties. The applicant argues that the respondent did have a number of options open to it other than standing Mr MacPherson down. The company could have taken disciplinary action, it could have accepted his part performance or it could have followed the dispute procedures contained in the collective agreement. He argues that the ongoing dispute with the company had been listed with the AIRC and the matter could have been resolved there. He did not state that he would have returned to work pursuant to the new roster, which I believe he was legally obliged to do, so in reality the company would be forced to accept him working less hours than other employees. Mr MacPherson also says that there was no evidence that this refusal to work caused any inconvenience or danger to his fellow employees. I think it would be fairer to say that there is no evidence either way and it should not be assumed that his actions did not cause inconvenience. The applicant argues that he did not refuse to work on 13 November, he had been stood down and he was not permitted to return until he acceded to the respondent’s demand. The stand down lasted only one day because he did accede to the demand that he make a commitment to work the disputed roster. The applicant says that the respondent achieved its industrial aim of introducing a disputed roster by the use of an unlawful stand down. I do not see the matter in quite the same light. Whilst I believe that the authorities require me to make a finding that Mr MacPherson was unlawfully stood down on 13 November 2008, he would have been in breach of his contract of employment if he had worked on that day hours less than those contained in the day’s roster. It is not correct to say that the respondent achieved its industrial aim by the use of an unlawful stand down, it achieved its industrial aim legally as I had previously found. The workplace agreement allowed the company to change the rosters provided it went through a particular process and I found that it had done that.
The maximum penalty for a breach under s.719 for this respondent is 300 penalty unit or $33,000.00.
There are a number of factors which a court should take into account when assessing an appropriate penalty. The applicant has set them out in his submissions and they include:
“a.the nature and extent of the conduct which led to the contraventions;
b.the circumstances of the conduct (including deliberate defiance or disregard of the Act);
c.       relevant record of civil penalty contraventions;
d.whether the contraventions are distinct or arise from a single course of conduct;
e.       the consequences of the contravening conduct;
f.       deterrence, both general and specific;
g.      the objects of the WR Act;
h.      the size and financial resources of the contravener;
i.        co-operation with regulator authorities;
j.       the contravener’s contrition; and
k.the size of the prescribed penalty, and any recent increase to that prescription.”
I have also taken into account the views of Moore J in Rojas v Esselte Australia Pty Ltd (No 2) [2008] FCA 1585 at [65] referred to by the applicant in his submission and those of Lander J in Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65 at [93]. The applicant says that the nature and conduct of the respondent was that it acted coercively and unlawfully in standing the applicant down. I do not agree that it acted coercively. The applicant was legally obliged to work the rosters scheduled. He did not wish to do so. He was in dispute with his employer. He had effectively walked off the job on 12 November. That was a serious breach of contract that would have entitled the company to dismiss him. It did not dismiss him. It took another course of action which, whilst illegal, was much less detrimental to the applicant than the legal course of dismissing him. I am not able to say that the actions of management constituted deliberate defiance or disregard of the Act. My view of their evidence was that they believed they were entitled to do as they had done because Mr MacPherson had indicated that he was not prepared to work in accordance with the roster. Once Mr MacPherson agreed to work lawfully, he was able to return to work even though he was working “under protest” and continues to work to this day.
I am informed that the company has no relevant record of civil penalty contraventions. In this case there is only one distinct contravention. The consequences of the contravening conduct were for Mr MacPherson that he was not paid for the time he did not work. He sought an order from me that he be paid but I have found that there was no obligation to pay him. If I am wrong about that then he will be paid and he will have suffered no consequences at all. If I am right, then the consequences were of his own making.
The question of deterrence is a difficult one. Naturally, employers should be discouraged from taking illegal action to stand down employees. The company freely entered into the workplace agreement. It could have contained a provision that it was entitled to stand down employees who refused to work in accordance with their contract of employment. But it did not. As a consequence the company acted wrongfully. Assuming that I have correctly applied the law in making the finding that I did about the contravention then this may well be a wake up call to other employers to ensure that their contracts of employment provide for this possibility because the alternative of dismissal may well be harsh and the alternative of permitting the employee to work the hours he or she chooses may well be antipathetic to efficiency and good workplace relations. In regard to specific deterrence I would take the view that the company has learnt many lessons from these proceedings so there would not be any need for specific deterrence to prevent these actions occurring again. The company is a substantial one and a subsidiary of an even more substantial one. I am of the view that it is unlikely to infringe in this way again.
In considering the objects of the Act, the applicant says that s.691B fell under Part 12 of the Act – Minimum Entitlements. He points out that the right not to be stood down except in circumstances prescribed formed a minimum entitlement protected by the Act. He noted that the principal objects found in s.3 of the Act include:
“The principal object of this Act is to provide a framework for cooperative workplace relations which promotes the economic prosperity and welfare of the people of Australia by:
…
(f) ensuring compliance with minimum standards, industrial instruments and bargaining processes by providing effective means for the investigation and enforcement of:
(i) employee entitlements; and
(ii) the rights and obligations of employers and employees, and their organisations; and.”
I should not want it to be thought that I consider an illegal stand down as a minor infringement. I fully accept that it is a serious matter and employees are entitled to be protected from its occurrence. However, this case illustrates the importance of looking at all cases on their own particular merits and on their own particular facts. Mr MacPherson was stood down illegally because his workplace agreement did not provide for a stand down in the circumstances which pertained. However, he had also breached his own contract of employment by declining to work lawful hours on 12 November 2008. His breach could have earned him a dismissal but that penalty was not imposed upon him. It would be wrong not to take those matters into account. In a recent decision, Australian Rail, Tram and Bus Industry Union v Rail Corporation of New South Wales (No 2) [2009] FCA 1417 at [13], Jagot J noted that, although general deterrence will almost always be important, a penalty must be proportionate to the gravity of the particular breach in question. In that case, as in the instant case, the employer’s breaches were not deliberate and its actions were motivated by a desire to act fairly towards its employees.
The respondent is a substantial company and, as I have said, a subsidiary of an even more substantial one. I have no evidence that it has not cooperated with the regulatory authorities. The company has not indicated contrition because at the time that I am writing these reasons it does not accept that it breached the law. I do not think this lack of contrition at this stage should weigh heavily against it.
The respondent urges me to impose no penalty or at most a nominal one. I accept that this is within my power; CFMEU v Coal & Allied Operations Pty Ltd (No 2) (1999) 94 IR 231 at [232]; John L Pierce Pty Ltd v Kennedy (2001) 113 FCR 177 at [25]. It cites the conduct of Mr MacPherson and his colleagues on 12 November 2008 and the genuine belief it had that it was able to stand him down whilstsoever he refused to work according to a lawful direction. It makes reference to the possibility that if this conduct reoccurred the perpetrator (not necessarily Mr MacPherson) would be dismissed rather than stood down. These are all matters discussed above.
I have taken all these matters into consideration when coming to the view that a penalty should be imposed but that it should be of one penalty unit or $110.00. The applicant has asked for an order under s.841 of the Act that the penalty be paid to him. That is an order that I am prepared to make.

I certify that the preceding sixteen (16) paragraphs are a true copy of the reasons for judgment of Raphael FM

Associate:

Date: 10 December 2009