Radisich v McDonald
[2012] FMCA 919
•5 October 2012
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| RADISICH v MCDONALD & ANOR | [2012] FMCA 919 |
| INDUSTRIAL LAW – Building and construction industry – application for civil penalties – agreed contraventions – agreed statement of facts – penalties – factors for consideration. |
| Building and Construction Industry Improvement Act 2005 (Cth), ss.3(1) and (2), 38, 43, 44, 49(2) Crimes Act 1914 (Cth), ss.4(1), 4AA(1) Criminal Code Act 1913 (WA), s.7 Criminal Code (WA), s.70A Industrial Relations Act 1979 (WA) Workplace Relations Act 1996 (Cth), ss.3(1), 3(j), 778, 790(1), 807, 826 |
| Attorney-General v Tichy (1982) 30 SASR 84 Cruse v Construction, Forestry, Mining and Energy Union (No. 2) [2008] FCA 1637 Cruse v Multiplex Limited (2009) 182 IR 60; [2009] FMCA 236 Pine v Multiplex Constructions (Vic) Pty Ltd [2005] FCA 1428 Ponzio v B & P Caelli Constructions Pty Ltd and Ors (2007) 158 FCR 543; [2007] FCAFC 65 Secretary, Department of Health and Ageing v Pagasa Australia Pty Ltd [2008] FCA 1545 Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61; [2008] FCA 1426 The Queen v McInerney (1986) 42 SASR 111 Veen v The Queen (No. 2) (1988) 164 CLR 465 |
| Applicant: | JEFFREY JOSEPH RADISICH |
| First Respondent: | JOSEPH MCDONALD |
| Second Respondent: | CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
| File Number: | PEG 1 of 2010 |
| Judgment of: | Lucev FM |
| Hearing date: | 6 December 2010 |
| Date of Last Submission: | 6 December 2010 |
| Delivered at: | Perth |
| Delivered on: | 5 October 2012 |
REPRESENTATION
| Counsel for the Applicant: | Mr S Ellis |
| Solicitors for the Applicant: | Australian Government Solicitor |
| Counsel for the First Respondent: | Mr G Maclean |
| Solicitors for the First Respondent: | Maclean Legal |
| Counsel for the Second Respondent: | Mr K Sneddon |
| Solicitors for the Second Respondent: | Construction, Forestry, Mining and Energy Union |
DECLARATIONS AND ORDERS
The Court declares that:
(a)the first respondent by his conduct on 25 February 2008 at the Herdsman Business Park construction site at 71 Walters Drive, Herdsman, Western Australia, contravened each of:
(i)section 790(1) of the Workplace Relations Act 1996 (Cth); and
(ii)section 38 of the Building and Construction Industry Improvement Act 2005 (Cth),
on one occasion; and
(b)the second respondent by the conduct of the first respondent and other officers of the second respondent on 25 February 2008 at the Herdsman Business Park construction site at 71 Walters Drive, Herdsman, Western Australia, contravened each of:
(i)section 790(1) of the Workplace Relations Act 1996 (Cth); and
(ii)section 38 of the Building and Construction Industry Improvement Act 2005 (Cth),
on one occasion.
The Court orders that:
(a)the first respondent pay a penalty of:
(i)$1,980 in respect of the contravention of s.790(1) of the Workplace Relations Act 1996 (Cth); and
(ii)$4,400 in respect of the contravention of s.38 of the Building and Construction Industry Improvement Act 2005 (Cth); and
(b)the second respondent pay a penalty of:
(i)$6,600 in respect of the contravention of s.790(1) of the Workplace Relations Act 1996 (Cth); and
(ii)$22,000 in respect of the contravention of s.38 of the Building and Construction Industry Improvement Act 2005 (Cth);
(c)each of the above penalties be paid to Commonwealth Consolidated Revenue by 5 November 2012; and
(d)the respondents be jointly and severally liable to pay the applicant’s costs in the sum of $15,000 by 5 November 2012.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT PERTH |
PEG 1 of 2010
| JEFFREY JOSEPH RADISICH |
Applicant
And
| JOSEPH MCDONALD |
First Respondent
| CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
Second Respondent
REASONS FOR JUDGMENT
The application
The applicant seeks orders for the imposition of penalties against the first and second respondents, Joseph McDonald and the Construction, Forestry, Mining and Energy Union[1] for alleged contraventions of the Workplace Relations Act 1996 (Cth)[2] and the Building and Construction Industry Improvement Act 2005 (Cth).[3]
[1] “Mr McDonald” and the “CFMEU” respectively, collectively the “Respondents”.
[2] “WR Act”.
[3] “BCII Act”.
The parties have agreed to settle the application on the basis of there having been:
a)one contravention of s.38 of the BCII Act; and
b)one contravention of s.790(1) of the WR Act.
The parties have prepared and filed a statement of agreed facts.[4]
[4] “Agreed Statement”.
It remains for the Court to determine penalty in relation to the two now admitted contraventions by the first and second respondents.
Agreed Statement
The terms of the Agreed Statement are as follows:
Admission of contraventions
1.The first respondent (McDonald) admits that by his conduct on 25 February 2008 as alleged by the applicant and admitted herein, he breached each of:
1.1.section 790(1) of the Workplace Relations Act 1996 (WR Act); and
1.2.section 38 of the Building and Construction Industry Improvement Act 2005 (BCII Act),
on one occasion.
2.The second respondent (CFMEU) admits that, by the conduct of McDonald and other officers of the CFMEU on 25 February 2008 as alleged by the applicant and admitted herein, it breached each of:
2.1.section 790(1) of the WR Act; and
2.2.section 38 of the BCII Act,
on one occasion.
Statement of agreed facts
3.Each assertion in this Statement of Agreed Facts is agreed by the parties and admitted by each of the respondents for the purposes of the Court assessing and imposing pecuniary penalties upon the respondents for the respondents’ contraventions.
The Parties
4.The applicant:
4.1.is an ABC Inspector appointed pursuant to section 57(1) of the BCII Act;
4.2.is entitled by section 49 of the BCII Act to commence proceedings as an eligible person for orders under that section in respect of an alleged contravention of section 38 of the BCII Act; and
4.3.is entitled by section 73 of the BCII Act as preserved by Item 155 of Schedule 8 to the Fair Work/State Referral and Consequential and Other Amendments Act 2009 to commence proceedings as an eligible person for orders under section 807 of the WR Act in respect of alleged contraventions of Part 16 of the WR Act which involve a building industry participant, or building work, as defined by sections 4 and 5 of the BCII Act.
5.Diploma Constructions (WA) Pty Ltd (Diploma):
5.1.is, and was at all relevant times a trading corporation incorporated in Western Australia and accordingly is, and was at all relevant times:
5.1.1.a constitutional corporation within the meaning of section 785 of the WR Act;
5.1.2.a constitutional corporation within the meaning of section 4 of the BCII Act;
5.2.was at all relevant times the head contractor for a four-level office building with parking facilities being constructed at 71 Walters Drive, Herdsman, Western Australia, (Site) which was to be known as the "Herdsman Business Park" (the Project);
5.3.was, by reason of the matters set out in the two preceding subparagraphs, a building contractor, and accordingly, was a building industry participant within the meaning of section 4 of the BCII Act;
5.4.was, at all relevant times, the employer of Dennis Murphy (Murphy) (Site Manager) and Paul Griffin (Griffin) (Project Manager) and an “employer” within the meaning of that expression in section 6 of the WR Act; and
5.5.as at 25 February 2008, had engaged a number of persons as subcontractors to perform work on the Project.
6.McDonald is and was at all relevant times an officer, employee and agent of the CFMEU.
7.The CFMEU is, and was at all relevant times:
7.1.an organisation of employees registered pursuant to section 26 of Schedule 1 to the WR Act, and, by reason of such registration:
7.1.1.a body corporate pursuant to section 27 of Schedule 1 to the WR Act;
7.1.2.an organisation within the meaning of section 4 of the WR Act; and
7.1.3.an industrial association as defined in section 779 of the WR Act;
7.2.an organisation of employees whose eligibility rules allow membership by building employees;
7.3.by reason of the matters set out in the two preceding subparagraphs, both:
7.3.1.a building association; and
7.3.2.a building industry participant,
within the meaning of section 4 of the BCII Act; and
7.4.governed by its Rules.
8.Philip Kennedy (Kennedy), Mark Hudston (Hudston) and Brad Upton (Upton) (collectively, the Officers) were employees or agents of CFMEU.
Background
9.As at 25 February 2008, the Project was progressing towards the construction of a four level office bock.
10.Throughout the period of construction on the Project, Diploma had engaged a number of persons as subcontractors to perform work.
11.The subcontractors included employees of Triventi Electrical Services, Boral Formwork and Scaffolding Pty Ltd (Boral Formwork), Jako Industries (Jako), West Coast Commercial Industries (WCCI), Hays Recruiting, Otis Elevators (Otis), Ducourt Aluminium and Leighton Painting (Leighton) (collectively, the Workers).
12.On 25 February 2008, there was an unusually large number of Workers present on the Site, working on different parts of the Project. This increase in numbers may have placed additional pressure on the available amenities on Site including the toilets and the amenities sheds.
13.There was an ongoing problem with scaffolding on the Project which Diploma had been attempting to address by engaging Boral Formwork to attend the Project to remedy scaffolding problems caused by the deliberate removal of scaffold in certain areas. The scaffolding problems could potentially have created a risk of falling from heights. It is accepted by all parties that the scaffolding problems did not constitute an immediate risk to health and safety so as to justify the cessation of work.
14.At around 6.30am on 25 February 2008, Kennedy and Hudson arrived on the Site and at around 7.15am, McDonald and Upton arrived on the Site.
False or misleading representations about membership made by McDonald to Murphy and to the Workers
15.When he arrived on the Site, McDonald spoke to Murphy and said to Murphy words to the effect that the CFMEU had an agreement with Diploma management that every worker engaged by Diploma, would be a member of the CFMEU (Statement to Murphy).
16.At approximately 8:00am, McDonald called for a meeting on Site of all Workers (Meeting). The Meeting was held in the basement car park at the back of the Site. Around twenty five Workers attended. Some of the Officers and McDonald were present at the Meeting, but only McDonald addressed the Workers present.
17.During the course of the Meeting, McDonald stated to the Workers that Diploma had an agreement with the CFMEU that every worker on the Site had to be a CFMEU member (Statement to Workers).
Representations and Contraventions
18.By the Statement to Murphy and the Statement to Workers, McDonald represented that:
18.1.there was an agreement between Diploma and the CFMEU that workers on Site were obliged to be members of an industrial association or of the CFMEU; and
18.2.that the Workers were obliged to be, or to become, members of an industrial association or the CFMEU in order to continue to work on the Project,
(collectively referred to as the Representations).
19.The Representations were false and misleading in that:
19.1.there was no agreement between the CFMEU and Diploma that workers on the Site were obliged to be members of an industrial association or the CFMEU; and
19.2.the Workers were not obliged to be or become members of an industrial association or the CFMEU in order to continue to work on the Project.
20.By making the Representations, McDonald made a false and misleading statement about membership and in so doing, contravened section 790(1) of the WR Act.
21.The conduct of McDonald set out in the paragraph above was within the scope of McDonald’s actual or apparent authority on behalf of the CFMEU and was, therefore, also conduct of the CFMEU by virtue of section 826(2) of the WR Act.
22.By virtue of the matters referred to in paragraphs 15 to 21 above, the CFMEU contravened section 790(1) of the WR Act.
Building Industrial Action
23.Before the Meeting, between about 7:15am and about 8:00am:
23.1.one of the Officers approached Brendan Cooper (Cooper), an employee of Jako who was engaged on the Project, and said words to the effect of, "we gotta go downstairs for a meeting";
23.2.one of the Officers approached Ashley Hart (Hart), an employee of WCCI who was engaged on the Project, and said words to the effect of, "Everyone has to go downstairs for a meeting as there is a safety issue on site";
23.3.one of the Officers approached Michael Piccaro, an employee of Jako who was engaged on the Project, and said words to the effect of, "Put down your tools and go downstairs, there's a meeting on"; and
23.4.McDonald approached Colin Major, a fitter employed by Otis, and said words to the effect of, "We are holding a site union meeting and you need to attend.”
23.5.Shortly after making the Statement to Murphy, Murphy informed McDonald that he had arranged for additional chemical toilets to be supplied to Site (which were in fact delivered the following day). The conversation continued to the following effect:
McDonald:“It doesn’t matter, they [the Workers] are not going back until I have those facilities in place”.
Murphy:You’ve got to be reasonable Joe, it takes time.
McDonald:I don’t care, the men aren’t going back to work.
24.During the course of the Meeting
24.1.McDonald said words to the Workers to the effect, “the site is going to be closed down because there are not enough amenities and toilets and also because of problems concerning the scaffolding in place on the Project”; and
24.2.McDonald directed the Workers to go and sit in the “smoko sheds” on Site.
25.Following the Meeting:
25.1.two of the Officers spoke to Hart and another employee of WCCI, Jordan Kramer on three occasions and said to them words to the effect that the Site was closed because there were not enough amenities on Site;
25.2.two of the Officers told Hart and Kramer that they were going to shut down the level which Hart and Kramer were working on (which was level 1) because of a bad smell and said words to the effect, "It’s just not good enough to work in and you will have to leave.. Griffin the Diploma Construction Manager attended level 1 with the Officers and directed Hart and Kramer to relocate to a different level.
25.3.one of the Officers approached Rory Patrick Kirwan, an employee of Leighton, three times during the period between 10.10am and 11.00am and asked him to stop work; and
25.4.one of the Officers told Trent Jerome Meyers (Meyers), an employee of Otis to go off Site. Meyers relocated to a building site next door where Otis were also engaged.
26.As a result of the matters set out in paragraphs 23, 24 and 25, the majority of the Workers on Site ceased work on the Project a short time after the Meeting. A number of Workers were relocated by their direct employers to different work locations and continued to work at different locations for the remainder of the day.
27.The failure by the majority of Workers engaged at the Project to perform building work on 25 February 2008 following the meeting caused a disruption of work at the Project and a delay of progress in construction.
28.Collectively the matters referred to in paragraphs 23 to 27 above, constituted “Building Industrial Action” for the purposes of section 36(1)(a)(ii) of the BCII Act (collectively referred to as Building Industrial Action)
Unlawful Industrial Action
Industrial motivation
29.The Building Industrial Action was motivated by the purpose of advancing industrial objectives of the CFMEU, namely by doing all things which in the opinion of the CFMEU are in the interest of members including:
29.1.recruitment of additional members for the CFMEU; and
29.2.the improvement of the amenities enjoyed by Workers engaged on the Project,
and was accordingly “industrially-motivated” within the meaning of that term in section 36 of the BCII Act.
Constitutionally-connected action
30.The Building Industrial Action was constitutionally-connected action within the meaning of that term in section 36 of the BCII Act by reason that it:
30.1.was action taken by an organisation, namely the CFMEU;
30.2.adversely affected Diploma, being a constitutional corporation, in its capacity as a building industry participant in that the conduct disrupted the progress of work on the Project and caused Diploma cost and expense; and
30.3.was taken in connection with an industrial dispute, namely a dispute about conditions of the workers on Site, in particular, the amenities on Site and the scaffolding.
Not excluded action
31.The Building Industrial Action was not protected action or AWA industrial action for the purposes of the WR Act, and accordingly was not excluded action within the meaning of that term in section 36 of the BCII Act.
Engaged in Unlawful Industrial Action
32.By reason of the matters referred to in paragraphs 23 to 31 above the CFMEU engaged in Unlawful Industrial Action, contrary to section 38 of the BCII Act .
Knowingly involved in Unlawful Industrial Action
33.McDonald was directly or indirectly, knowingly concerned for the purposes of section 48(2) of the BCII Act, in the Unlawful Industrial Action, in that:
33.1.McDonald engaged in the conduct pleaded in paragraph 23.4 and 23.5, attended the Meeting and made the statements pleaded in paragraph 24.1 to 24.2; and
33.2.McDonald knew that Workers on Site were ceasing the performance of work on the Project ,
and thereby contravened section 38 of the BCII Act.
Penalty – general principles and considerations
General principles concerning penalty
The federal courts have regard to general principles which have been developed in relation to the imposition of penalties in workplace relations matters, including the following:
a)fundamentally, the penalty must be proportionate to the gravity of the contravening conduct;[5]
[5] Attorney-General v Tichy (1982) 30 SASR 84 at 92 per Wells J; Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2011] FCA 810 at para.25 per Gilmour J (“ABCC”).
b)penalties are imposed for the following purposes:
i)punishment, proportionate to the offence and according to prevailing standards;
ii)personal or specific deterrence, assessing the risk of reoffending, and general deterrence, as a deterrent to others who might be likely to offend; and
iii)rehabilitation;[6]
c)the sentencing task is one of instinctive synthesis in which the court takes account of all relevant factors and arrives at a single result taking due account of all of those relevant factors;[7]
d)proportionality and consistency are a final check on the penalty assessed;[8]
e)courts may identify a range of factors appropriate to the assessment of penalty, but ought to be wary of the use of check lists which “give rise to the risk of transforming the process of instinctive synthesis into the application of a rigid catalogue of matters for attention”;[9] and
f)courts ought also be wary of comparing penalties from other cases when assessing the amount of penalty to be fixed.[10]
[6] Ponzio v B & P Caelli Constructions Pty Ltd and Ors (2007) 158 FCR 543 at 559-560 per Lander J; [2007] FCAFC 65 at para.93 per Lander J (“Caelli Constructions”); ABCC at para.26 per Gilmour J.
[7] Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at 567-568 per Gray J and 572 per Graham J; [2008] FCAFC 8 at para.27 per Gray J and para.55 per Graham J (“Australian Ophthalmic Supplies”); Wong v The Queen (2001) 207 CLR 584 at 611-612 per Gaudron, Gummow and Hayne JJ; [2001] HCA 64 at paras.74-76 per Gaudron, Gummow and Hayne JJ; ABCC at para.27 per Gilmour J.
[8] Australian Ophthalmic Supplies FCR at 572 per Graham J; FCAFC at para.54 per Graham J; ABCC at para.28 per Gilmour J.
[9] ABCC at para.30 per Gilmour J; Australian Ophthalmic Supplies FCR at 579-580 per Buchanan J; FCAFC at paras.89-91 per Buchanan J.
[10] NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 295 per Burchett and Kiefel JJ; Australian Ophthalmic Supplies FCR at 563-564 per Gray J; FCAFC at para.12 per Gray J; FCR at 573 per Graham J; FCAFC at para.56 per Graham J; FCR at 579 per Buchanan J; FCAFC at para.87 per Buchanan J; Draffin v Construction, Forestry, Mining and Energy Union (2009) 189 IR 145 at 155 per Goldberg, Jacobson and Tracey JJ; [2009] FCAFC 120 at para.73 per Goldberg, Jacobson and Tracey JJ (“Draffin”).
General considerations relevant to assessment of penalty
Considerations which may be taken into account in assessment of penalty are well established and have been consistently applied by this Court,[11] but are not fixed or immutable.[12] Broadly, the relevant factors can be listed as follows:
[11] Examples include: Mason v Harrington Corporation Pty Ltd [2007] FMCA 7; Olsen v Sterling Crown Pty Ltd (2008) 177 IR 337; [2008] FMCA 1392 (“Sterling Crown”); Construction, Forestry, Mining and Energy Unionv Austral Bricks (Qld) Pty Ltd (2009) 178 IR 470; [2009] FMCA 143; Workplace Ombudsman vGolden Maple Pty Ltd (2009) 186 IR 211; [2009] FMCA 664 (“Golden Maple”); Fair Work Ombudsman v Industrial Roadpavers (WA) Pty Ltd (2010) 194 IR 436; [2010] FMCA 204 (“Industrial Roadpavers”).
[12] Australian Ophthalmic Supplies FCR at 580 per Buchanan J; FCAFC at para.91 per Buchanan J; Golden Maple IR at 224 per Lucev FM; FMCA at para.11 per Lucev FM.
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 Commonwealth workplace relations legislation);
c)the consequences of the contravening conduct;
d)the objects of Commonwealth workplace relations legislation;
e)whether the contraventions are distinct or arise from a single course of conduct;
f)deterrence, both general and specific;
g)relevant record of civil penalty contraventions;
h)the size and financial resources of the contravener;
i)co-operation with regulatory authorities;
j)the contravener’s contrition;
k)the size of the prescribed penalty, and any recent increases to that prescription; and
l)the totality principle.
A number of the factors are relevant to the present matter and are therefore considered below.
Nature and extent of the conduct and circumstances in which the conduct took place (including loss and damage)
Applicant’s submissions
The applicant submits that:
a)the nature and extent of the contravening conduct and the circumstances in which it took place are an important consideration because the central element of the penalty assessment process requires the Court to ensure that the penalty is appropriate to the gravity of the contravention;
b)on 25 February 2008 at approximately 7:15am, McDonald falsely and misleadingly represented to Denis Murphy, Site Manager, at 71 Walters Drive Herdsman, WA[13] that the CFMEU had an agreement with Diploma Constructions (WA) Pty Ltd[14] management that every worker engaged by Diploma, would be a member of the CFMEU;
[13] “Site”.
[14] “Diploma”.
c)at approximately 8:00am, McDonald called for a meeting of workers on Site and addressed the workers. At the meeting McDonald once again falsely and misleadingly represented that Diploma had an agreement with the CFMEU and that every worker on Site had to be a member of the CFMEU;
d)the conduct of McDonald and by virtue of s.826 of the WR Act the CFMEU, contravened s.790(1) of the WR Act by making representations that were false and misleading about union membership;
e)during this same meeting McDonald further addressed the workers advising that the Site was to be closed down due to problems with amenities (mainly toilets) and perceived safety concerns with scaffolding on the Site;
f)as a result of this representation by McDonald the majority of workers ceased work at the Site for the remainder of the day. A smaller number of workers were directed by their employers to work at different locations;
g)the assessment of the gravity of the conduct should have regard to:
i)the prominent role of the CFMEU as a significant industrial association in the building and construction industry; and
ii)the need for court orders;[15]
h)the action disrupted the progress of work and delayed construction on the Site, and cost Diploma at least half a day of production equating to between $7,500 and $10,000;
i)as a result of the failure of the majority of workers to perform building work both McDonald and the CFMEU engaged in and were knowingly involved in unlawful industrial action in contravention of s.38 of the BCII Act;
j)another factor to be weighed in the assessment is whether the contravening conduct was deliberate or part of a conscious act on the part of the contravener. Circumstances where someone had undertaken a deliberate industrial strategy to attempt to avoid its statutory obligations[16] will weigh in favour of a higher penalty than circumstances where the contravention flowed from a view of the law which was not wholly untenable, or genuinely believed to be correct.[17] Mere inadvertence will generally bring about a lighter penalty. On no basis could it be said that the conduct in this proceeding was inadvertent. It was a concerted exercise aimed at achieving outcomes contrary to s.38 of the BCII Act and s.790(1) of the WR Act;
k)McDonald made deliberate and calculated misrepresentations on 25 February 2008 at the Site by falsely stating that the CFMEU and Diploma had an agreement in which workers on the Site were obliged to be members of an industrial association in order to work on the Site. The conduct displayed by McDonald on behalf of the CFMEU was motivated purely by a desire to increase union membership of the CFMEU; and
l)McDonald further demonstrated complete disregard of industrial laws because in addressing the workers he stated that the Site was to be closed down on the basis of unsubstantiated health and safety concerns. Whilst there may have been conjecture over the number of amenities available on Site along with some possible safety concerns regarding the scaffolding on the Site, Diploma were more than willing to address any issues that had been raised regarding safety. In any event the claims made by McDonald on behalf of the CFMEU did not constitute an immediate risk to health and safety so as to justify cessation of work on the Site.
[15] Citing Stuart Mahoney v CFMEU (2008) 177 IR 61 at 72 per Tracy J; [2008] FCA 1426 at paras.56-57 per Tracy J (“Stuart-Mahoney”).
[16] Citing, as an example, Australian Ophthalmic Supplies FCR at 566 per Gray J; FCAFC at para.19 per Gray J.
[17] Citing Australian Federation of Pilots v Skywest Airlines Pty Ltd (1996) 70 IR 284 at 286 per Marshall J; Textile Clothing Footwear Union of Australia & Ors v Rocklea Spinning Mills Pty Ltd (1997) 76 IR 176 at 179 per North J; Victoria University of Technology v Australian Education Union (1999) 91 IR 96 at 107 per Ryan, Branson and Finkelstein JJ; [1999] FCA 1065 at para.34 per Ryan, Branson and Finkelstein JJ.
Respondents’ submissions
The Respondents submit that:
a)the nature of the conduct in this case has its factual context in a short industrial dispute played out between Diploma and the Respondents at the Site on 25 February 2008;
b)as to the extent of the conduct, the strike meant that the subcontract work programmed to be performed at the Site on 25 February 2008 was not performed, being a total of one working day;
c)Diploma suffered loss and damage from the fact that the majority of workers engaged to work at the Site on 25 February 2008 ceased working at that site following the 8.00am meeting called by Mr McDonald;
d)a substantial number of employees of the various subcontractors engaged on the Site that day were able to relocate their employees to other projects and in this way loss of productive time to employers was limited;[18]
[18] Agreed Statement, para.26.
e)a small number of workers engaged on the Site continued to work at that location for the entire work day of 25 February 2008;
f)the Respondents do not dispute the estimate that the loss and damage suffered by Diploma directly attributable to the stoppage is between $7,500 to $10,000;
g)this estimate of Diploma’s loss and damage places this particular contravention at the lower end of the scale;
h)work resumed at the Site the day following the dispute;
i)the conduct in this case was both limited in scope and effect, and that is directly relevant to the assessment of the seriousness of the conduct. It is submitted that this is a less serious contravention than other cases involving similar conduct;
j)the events of 25 February 2008 occurred at a time when the Site was experiencing a spike in worker numbers;[19]
[19] Agreed Statement, para.12.
k)this spike in worker numbers is logically consistent with the Respondents’ contention that worker numbers on the Site that day placed additional pressure upon Site amenities, including the available toilets and lunch sheds;
l)in addition to this there was also a long term problem with scaffolding at the Site which could potentially have lead to serious injuries caused by falls from heights;[20]
[20] Agreed Statement, para.13.
m)issues concerning adequacy of amenities, including toilets, and ensuring that workers are able to work in an environment free from hazards, are central to the industrial business of the Respondents;
n)the industrial motivation behind the industrial action and the misleading representations was to recruit members and to improve the amenities on Site;
o)the industrial action and the misleading statements occurred in the context of a building site which had safety and hygiene problems;
p)the industrial motivation in this case ought to be considered a less serious “industrially-motivated purpose” because it is clear that this motivation had a significant basis in occupational health and safety on the Site;
q)the Respondents dispute the applicant’s submissions that the conduct was part of a deliberate industrial strategy, as this is contrary to:
i)the one off nature of Mr McDonald’s attendance at the Site on 25 February 2008;
ii)the tensions inherent in increased worker numbers on the Site on 25 February 2008 particularly in relation to available amenities;
iii)the intrinsic tensions caused by long term safety problems such as scaffolding inadequacies, irrespective of Diploma’s willingness to resolve these, or the fact that the safety problems did not in themselves constitute an imminent threat to health or safety; and
iv)the absence of any indication that the events of 25 February 2008 were the consequence of any predetermined strategy;
r)Mr McDonald’s conduct should be viewed in the specific context of a building site which had safety and hygiene problems. These issues required a response from CFMEU representatives;
s)it is not submitted that the circumstances of the safety and hygiene problems excuse the conduct of the Respondents, but it does go some way to explain why Mr McDonald acted opportunistically in the way he did; and
t)in that regard, these contraventions are at the lower end of the scale of seriousness.
Consideration
The false and misleading representation as to an alleged agreement between Diploma and the CFMEU to have all persons on the Site as members of the CFMEU was made by Mr McDonald not once, but twice, and to both management and workers. The representation was utterly false, and was misleading.
The industrial action of one day’s duration in relation to amenities and scaffolding, neither of which posed an imminent threat to the health and safety of workers on Site, constituted industrial action of relatively limited duration.
The Respondents seek to justify the false and misleading representation on the basis that there were problems at the Site in relation to amenities and scaffolding. There is no doubt that those problems needed to be, and appear to have been being, dealt with by Diploma. The existence of problems with amenities, scaffolding, or health and safety generally, is not however justification for the making of a false and misleading representation by Mr McDonald, to both management and workers, with respect to the nature and scope of CFMEU membership at the Site.
The taking of the industrial action in relation to the same issues was likewise not justified, because there was no imminent threat to the health and safety of the workers who took industrial action, and steps were being taken to rectify the problems. Mr McDonald, however, adopted a “don’t care” approach to the attempted rectifications,[21] and industrial action followed from his actions, and those of other CFMEU officers, on behalf of the CFMEU.
[21] Agreed Statement, para.23.5.
Mr McDonald’s actions were described by the Respondents as “opportunistic”, and no doubt they were, at least to the extent that there appears to have been no pre-determination of any particular course of action in relation to the Site. The representations made by Mr McDonald, and the actions taken by Mr McDonald and the CFMEU, through its officers, were nevertheless:
a)deliberate;
b)part of an industrial strategy, engaged in by the CFMEU, and Mr McDonald, in order to increase the membership of the CFMEU; and
c)at the very least, responsive to perceived concerns of workers on the Site about conditions of work.
The industrial action was not extensive: it lasted only one day. The quantifiable damage was comparatively limited, to $7,500 to $10,000 for Diploma, the head contractor. There is no any evidence of other unquantifiable loss, but it does generally appear that there was otherwise loss of time or money for Diploma’s contractors or their employees, save for those who were able to be relocated to other (including nearby) sites.
The circumstances of this case must also include reference to the relevant statutory objective. Further, it is the case that intangible damage can arise from damage to the utility and effectiveness of the relevant statutory objective.[22]
[22] Secretary, Department of Health and Ageing v Pagasa Australia Pty Ltd [2008] FCA 1545 at para.56 per Flick J; Sterling Crown IR at 233 per Lucev FM; FMCA at para.54 per Lucev FM; Industrial Roadpavers IR at 446 per Lucev FM; FMCA at para.28 per Lucev FM.
The statutory objectives relevant to this contravention are:
Ensuring freedom of association, including the rights of employees and employers to join an organisation or association of their choice, or not to join an organisation or association.[23]
and
Balancing the right to take industrial action for the purposes of collective bargaining at the workplace level with the need to protect the public interest and appropriately deal with illegitimate and protected industrial action.[24]
and
[23] WR Act, s.3(j).
[24] WR Act, s.3(1).
In addition to the object set out in section 3, this Part has the following objects:
(a) to ensure that employers, employees and independent contractors are free to become, or not become, members of industrial associations;
(b) to ensure that employers, employees and independent contractors are not discriminated against or victimised because they are, or are not, members or officers of industrial associations;
(c) to provide effective relief to employers, employees and independent contractors who are prevented or inhibited from exercising their rights to freedom of association;
(d) to provide effective remedies to penalise and deter persons who engage in conduct which prevents or inhibits employers, employees or independent contractors from exercising their rights to freedom of association.[25]
[25] WR Act, s.778.
The main object of the BCII Act is as follows:
… to provide an improved workplace relations framework for building work to ensure that building work is carried out fairly, efficiently and productively for the benefit of all building industry participants and for the benefit of the Australian economy as a whole[26]
with that main object to be achieved by the following means:
[26] BCII Act, s.3(1).
(b)promoting respect for the rule of law;
(c)ensuring respect for the right of building industry participants;
(d)ensuring the building industry participants are accountable for their unlawful conduct;[27]
[27] BCII Act, s.3(2).
The false and misleading statements made by Mr McDonald are relatively serious because they were statements wholly inconsistent with the freedom of association objects of the WR Act. They were made more serious by the fact that they were repeated, and made to aid the objective of intending that as many workers as possible attend the meeting on Site called by the CFMEU. That is consistent with the industrial motivation for the conduct, which included the industrial strategy of increasing CFMEU membership, and seeking to improve conditions, on the Site. Thus, although the industrial action conduct which followed the false and misleading statements and the CFMEU Site meeting was not in the most serious category of industrial action, and far from it, the false and misleading statements made by Mr McDonald were more serious for the reasons set out above.
As indicated above, the industrial action being of only one day’s duration and causing limited economic damage was not in the most serious category of industrial action. It nevertheless was industrial action which was contrary to the objects of the BCII Act, and the penalty must reflect the fact that the objects, and the means of achieving those objects, have been compromised by the actions of the CFMEU and Mr McDonald.
Similar previous conduct
Applicant’s submissions
The applicant submits that:
a)the applicable principles are as follows.
i)similar prior relevant conduct may be taken into account in assessing penalty, but it cannot be given such weight as to lead to the imposition of a penalty that is disproportionate to the gravity of the instant contravention;[28]
[28] Citing Veen v The Queen (No. 2) (1988) 164 CLR 465 at 477 per Mason CJ, Brennan, Dawson and Toohey JJ (“Veen (No. 2)”).
ii)similar previous conduct may demonstrate that a person has a history of engaging in the particular conduct in question, that the penalties previously imposed were insufficient to deter the person from re-engaging in that conduct, and that the person has failed to take adequate steps to prevent further contraventions;[29]
[29] Citing Veen (No. 2) CLR at 477 per Mason CJ, Brennan, Dawson and Toohey JJ; Stuart-Mahoney IR at 70 per Tracey J; FCA at para.44 per Tracey J; Temple v Powell (2008) 169 FCR 169 at 188 per Dowsett J; [2008] FCA 714 at para.64 per Dowsett J (“Temple”); Draffin IR at 159 per Goldberg, Jacobson and Tracey JJ; FCAFC at para.92 per Goldberg, Jacobson and Tracey JJ.
iii)a person is not to be punished again for the prior conduct. Prior conduct may diminish leniency by reason of good character, having an upward affect on penalty, albeit within the proper limits indicated by the circumstances of the immediately contravening conduct;[30]
[30] Citing The Queen v McInerney (1986) 42 SASR 111 at 113 per King CJ (“McInerney”).
iv)the effect of prior contravening conduct is more cogent if it has been the subject of conviction. If not, the prior conduct is still relevant but perhaps of less weight;[31]
[31] Citing McInerney at 113 per King CJ and 124 per Cox J; Williams v Construction, Forestry, Mining and Energy Union (No. 2) (2009) 182 IR 327 at 338-340 per Jessup J; [2009] FCA 548 at paras.26-28 per Jessup J (“Williams (No. 2)”).
v)whether previous misconduct is relevant to fixing a penalty is a question of logic;[32]
[32] Citing Temple FCR at 188 per Dowsett J; FCA at para.63 per Dowsett J.
vi)conduct of a different character does not assist;[33]
[33] Citing Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union (2006) 164 IR 375 at 389-390 per Le Miere J; [2006] WASC 317 at para.67 per Le Miere J (“Leighton Contractors”); Stuart-Mahoney IR at 70 per Tracey J; FCA at para.44 per Tracey J.
vii)the quality of the conduct and its relevance to the industrial behaviour which the instant legislation seeks to address is determinative, not whether the prior conduct arose under different legislation or different provisions of the instant legislation;[34] and
[34] Citing Stuart-Mahoney IR at 71 per Tracey J; FCA at para.46 per Tracey J; Williams (No. 2) IR at 335-336 per Jessup J; FCA at paras.16-17 per Jessup J.
viii)prior relevant conduct includes prior relevant conduct of officials from other branches of the union;[35]
[35] Citing Williams (No. 2) IR at 336-338 per Jessup J; FCA at paras.19-25 per Jessup J.
b)the attached Table A identifies the prior relevant conduct to be taken into account. The entries in Table A include:
i)matters in which the conduct occurred, and contraventions have been recorded, prior to the conduct the subject of this proceeding;
ii)matters in which the conduct occurred prior to the conduct the subject of this proceeding, but in respect of which contraventions were not recorded until after the conduct which is the subject of this proceeding;
iii)conduct in contravention of the BCII Act; and
iv)conduct in contravention of provisions of the WR Act regarding freedom of association,
all of which is relevant on the principles set out above;
c)a list of prior relevant conduct in a table in similar form was submitted and considered relevant by the Court in Draffin[36] and Cahill v Construction, Forestry, Mining and Energy Union (No. 4)[37] and Williams v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union;[38]
d)all of the entries in Table A identify prior relevant conduct of the CFMEU;
e)Table A reveals that, the CFMEU, through its representatives at various levels around the country, has a history of engaging in freedom of association conduct relevantly similar to the kind in question in this case;
f)the conduct in this case occurred against a background of a large number of “prior convictions”. In the circumstances, specific deterrence looms large as a relevant consideration;
g)the extent of the relevant prior conduct is such as to give rise to a need for the Court to provide a particularly persuasive form of deterrence against similar future misconduct on the part of the CFMEU.[39] Similarly, the Court should have regard to the need for rehabilitation[40] in circumstances where penalties imposed in the past have seemingly failed to achieve rehabilitation;
h)items 1 and 2 in Table A identify prior relevant conduct of Mr McDonald; and
i)the attached Table B identifies prior relevant conduct to be taken into account for Mr McDonald in respect of criminal convictions and revocation of entry permits.
[36] Draffin IR at 154-155 per Goldberg, Jacobson and Tracey JJ; FCAFC at paras.68-74 per Goldberg, Jacobson and Tracey J.
[37] (2009) 189 IR 304 at 313-320 per Kenny J; [2009] FCA 1040 at paras.39-71 per Kenny J (“Cahill (No. 4)”).
[38] (2010) 196 IR 365 at 413-414 per Jessup J; [2010] FCA 754 at paras.161-164 per Jessup J (“Williams”).
[39] Citing Temple FCR at 188 per Dowsett J; FCA at para.64 per Dowsett J; Stuart-Mahoney IR at 70 per Tracey J; FCA at para.44 per Tracey J.
[40] Citing the cases in fn.17 above.
Respondents’ submissions
The Respondents submit that:
a)they generally agree with the propositions set out in paragraph 22(a) above;
b)to those general propositions ought to be added the following:
i)only conduct preceding that in question is taken into account in fixing penalties;[41]
[41] Citing Temple FCR at 187-188 per Dowsett J; FCA at para.62 per Dowsett J.
ii)past conduct cannot operate so as to increase the penalty beyond that which would be appropriate to the conduct in question;[42]
[42] Citing Temple FCR at 188 per Dowsett J; FCA at para.63 per Dowsett J.
iii)contraventions within a different branch of the Union are relevant, but are to be given less weight than contraventions within the branch in question;[43] and
[43] Citing Draffin IR at 154-155 per Goldberg, Jacobson and Tracey JJ; FCAFC at para.72 per Goldberg, Jacobson and Tracey JJ.
iv)although similar conduct which has been found to contravene other legislative provisions may have potential relevance, including contraventions of Part 9 of the WR Act relating to unlawful industrial action and coercion, conduct which is of a different character does not assist the penalty assessment;[44]
[44] Citing Stuart-Mahoney IR at 70 per Tracey J; FCA at para.44 per Tracey J.
c)when considering the use to be made of schedules of so-called “relevant prior records” of the respondents, the Supreme Court of Western Australia in Leighton Contractors adopted the approach in Construction, Forestry, Mining and Energy Union v Coal & Allied Operations Pty Ltd (No. 2),[45] when the Supreme Court said:
[45] (1999) 94 IR 231 at 232 per Branson J (“Coal & Allied Operations (No. 2)”).
It is not appropriate to consider all contraventions of any industrial legislation by any branch of the second respondent anywhere in Australia. The first defendant is a very large organization that operates throughout Australia. Branches, Divisions, officers and representatives of the first defendant are involved with employers in relation to industrial matters every day. It is inappropriate to take account of conduct of the first defendant through various branches, divisions & officers or representatives that is of a different character than the contravening conduct in question and are contraventions of different legislation.[46]
[46] Leighton Contractors IR at 389-390 per Le Miere J; WASC at para.67 per Le Miere J.
d)in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (No. 2)[47] the Federal Court adopted a cautious approach similar to that outlined in Coal & Allied Operations (No. 2) in assessing the weight to be attached to a table very similar to Tables A and B filed in these proceedings when the Federal Court said:
[47] (2010) 199 IR 373; [2010] FCA 977 (“ABCC v CFMEU (No. 2)”).
Overall, while it seems to me that it is appropriate that I should regard the information submitted in Table A and Table B by the ABC Commissioner I should also be mindful of the cautionary words of Branson J when doing so. Primarily, I consider the prior contraventions identified by the respondents to be the most relevant.[48]
[48] ABCC v CFMEU (No. 2) IR at 386 per Barker J; FCA at para.66 per Barker J.
e)it is noted that the “prior contraventions identified by the respondents” referred to in ABCC v CFMEU (No. 2) are identical contraventions to those identified by the Respondents in sub-paragraph (h) below;
f)the CFMEU does not accept Table A attached to the applicant’s submissions as containing an accurate summary of its relevant prior similar conduct;
g)contraventions under previous legislation involving coercive behaviour are relevant to s.43 of the BCII Act contraventions but not to s.38 of the BCII Act;
h)the CFMEU has two relevant prior penalties for contraventions of s.38 of the BCII Act in Western Australia, as follows:
i)fines totaling $90,000 for 18 contraventions arising from 10 unauthorized meetings, two overtime work bans and six strikes (between one and three days) occurring over one year, between 9 March 2005 and February 2006;[49] and
[49] Leighton Contractors IR at 391 per Le Miere J; WASC at para.75 per Le Miere J.
ii)a fine totaling $12,000 for 2 strikes on 17 August 2005 (48 hrs) and 25 August 2005 (24 hrs) involving 400 and 20 workers respectively;[50]
[50] Temple FCR at 189-190 per Dowsett J; FCA at para.72 per Dowsett J.
i)the CFMEU further accepts that penalties imposed on other branches of the CFMEU across Australia may have relevance in showing the prevailing range of penalties, being careful to distinguish those cases from the manner in which they have been summarized by the applicant. The CFMEU relies on Schedule A to these submissions which are responsive to Table A of the applicant’s submissions;
j)Mr McDonald does not accept Table B attached to the applicant’s submissions as containing any relevant prior similar conduct because:
i)offences of contempt and trespass under the Criminal Code of WA contain elements distinguishable from those required for unlawful industrial action under section 38 of the BCII Act or for false or misleading representations pursuant to section 790 of the WR Act; and
ii)the applications to revoke Mr McDonald’s Federal and State rights of entry are irrelevant to the elements of unlawful industrial action under s.38 of the BCII Act and false or misleading representations pursuant to s.790(1) of the WR Act;
k)in any event 2 of the 5 cases listed are 10 years old and do not show a pattern of repeated contraventions;
l)Mr McDonald has two prior penalties relevant to contraventions of s.38 of the BCII Act:
i)a fine of $1,500 for a strike by 400 workers for 2 days on 17 August 2005 in contravention of s.170MN of the WR Act;[51] and
ii)a fine of $30,000 for 16 contraventions of s.38 of the BCII Act arising from 8 unauthorised meetings, 2 overtime work bans and 6 strikes (between 1 and 3 days) occurring over 1 year between 9 March 2005 and February 2006;[52] and
m)Mr McDonald has no prior penalties relevant to contraventions of s.790(1) of the WR Act.
[51] Temple FCR at 191 per Dowsett J; FCA at para.77 per Dowsett J.
[52] Leighton Contractors IR at 378 and 391 per Le Miere J; WASC at paras.4 and 75 per Le Miere J.
Consideration
In relation to prior conduct the Federal Court has adopted the following principles:
61 Barker J in Australian Building & Construction Commissioner v Construction Forestry Mining & Energy Union (No 2) (City Square) (2010) 199 IR 373 summarised at [47] the agreed applicable principles in that case. These are discussed as follows:
(a) Similar prior contraventions may be taken into account in assessing penalty, but cannot be given such weight as to lead to the imposition of a penalty that is disproportionate to the gravity of the instant contravention. To do so would be to impose a fresh penalty for past contraventions: Veen v The Queen (No 2) (1988) 164 CLR 465 at 477.
(b) However, similar previous contraventions may demonstrate that a respondent has a history of engaging in the particular conduct in question, that the penalties previously imposed were insufficient to deter the respondent from re-engaging in that conduct and that the respondent has failed to take adequate steps to prevent further contraventions. Previous contraventions may demonstrate that the respondent has manifested in the commission of the latest contravention a continuing attitude of disobedience of the law. In such a case, "retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted": Veen (No 2) at 477.
(c) A sentencing court looks to the general record of conduct of the offender, his attitude to the law as disclosed by such conduct, apparent attempts at rehabilitation and similar considerations. Repeated conduct of a particular kind may lead to an identified need to provide some particularly persuasive form of deterrent against similar future conduct: Temple v Powell (2008) 169 FCR 169 at [64].
(d) A respondent is not to be punished again for the prior conduct. Prior conduct may diminish leniency by reason of good character, having an upward effect on penalty, albeit within the proper limits indicated by the circumstances of the immediately contravening conduct: R v McInerney (1986) 42 SASR 111 at 113.
(e) The effect of prior contravening conduct is more cogent if it has been the subject of conviction. If not, the prior conduct is still relevant but perhaps of less weight: McInerney at 113.
(f) Whether previous misconduct by branches in other states of a national organisation is relevant to fixing a penalty is a question of logic. In some cases, a pattern of conduct across the country may suggest a national culture of misconduct: Temple v Powell at [63].
(g) The quality of the conduct and its relevance to the industrial behaviour which the instant legislation seeks to address is determinative, not whether the prior conduct arose under different legislation or different provisions of the instant legislation: Stuart-Mahoney v CFMEU at [44] to [46].
(h) Prior relevant conduct includes that of officials from other branches of the union: Williams v Construction, Forestry, Mining and Energy Union (No 2) (2009) 182 IR 327 at [19]-[25]. However, Barker J in City Square at [48] accepted that contraventions in other branches of the CFMEU, while relevant, are to be given less weight than contraventions within the branch in question.[53]
[53] ABCC at para.61 per Gilmour J.
In relation to Mr McDonald the Court accepts that his two prior contraventions of s.38 of the BCII Act are relevant to a consideration of similar previous conduct. In that regard the Court notes that those two contraventions related to conduct in 2005 and between March 2005 and February 2006. The current contravention of s.38 of the BCII Act occurred on 25 February 2008. The two prior contraventions are therefore not only relevant, but reasonably proximate in time.
The Court also accepts that Mr McDonald has no prior penalties relevant to contraventions of s.790(1) of the WR Act.
In relation to the criminal convictions set out in Table B of the applicant’s submissions (the fact of the convictions not being disputed by Mr McDonald) the Court notes that the conviction for contempt of court under s.7 of the Criminal Code Act 1913 (WA) relates to conduct in 1999 and the imposition of a penalty of $2,000 on 15 June 2000. The contempt apparently consisted of Mr McDonald entering a building site without notice to conduct a meeting of employees in contravention of a prior undertaking. Other than being part of the general record of conduct of Mr McDonald, and perhaps indicative of his attitude to the law disclosed by the conduct, the conviction, being eight years previously, ought not be accorded significant weight even as part of an examination of Mr McDonald’s general record of conduct and attitude to the law disclosed by that conduct. The four convictions for criminal trespass on building sites in February and April 2007, contrary to s.70A of the Criminal Code (WA), are relevant in relation to Mr McDonald’s general record of conduct and his attitude to the law as disclosed by that conduct. The Court notes that the conduct is again reasonably proximate in time to the current conduct, being less than 12 months prior to it. In at least one of those cases, Wilson v McDonald,[54] the conduct concerned included Mr McDonald’s actions in entering a building site and discussing with workers matters such as safety issues. That occurred in circumstances where Mr McDonald had no authority to enter the building site, his authority to do so under the Industrial Relations Act 1979 (WA) and the WR Act, having been revoked.[55] The Supreme Court of Western Australia – Court of Appeal[56] found that Mr McDonald had no excuse for being on the building site, his authority to enter the building site having been revoked.[57] Indeed, the WA Court of Appeal found that there was no excuse, lawful or otherwise, established by Mr McDonald for being on the building site.[58] Whilst the conduct in Wilson is of a different kind to that in these proceedings, it was nevertheless unlawful conduct in an industrial setting, and goes to Mr McDonald’s general record of conduct and attitude to the law as disclosed by the conduct.
[54] (2009) 253 ALR 560; [2009] WASCA 39 (“Wilson”).
[55] Wilson ALR at 563 per Martin CJ; WASCA at para.10 per Martin CJ.
[56] “WA Court of Appeal”.
[57] Wilson ALR at 573 per Martin CJ; WASCA at para.65 per Martin CJ.
[58] Wilson ALR at 574 per Martin CJ; WASCA at para.66 per Martin CJ.
As with Mr McDonald, the Court accepts that the two prior contraventions of s.38 of the BCII Act in 2005 and between 2005 and 2006 which occurred in Western Australia are relevant to a consideration of the CFMEU’s similar previous conduct. The current contravention of s.38 of the BCII Act occurred on 25 February 2008, and the two prior contraventions are therefore not only relevant, but reasonably proximate in time.
Although to be given less weight, it is also relevant to a consideration of penalty that the CFMEU nationally (other than in WA) has, prior to the conduct on 25 February 2008, been penalised nine times for contraventions of s.38 of the BCII Act with penalties ranging from $5,000[59] through to $55,000,[60] albeit that in some of those cases there were also contraventions of ss.43 and 44 of the BCII Act. Those contraventions all occurred in the period from September 2005 to July 2007.
[59] Cozadinos v Construction, Forestry, Mining and Energy Union (No. 2) (2009) 183 IR 406; [2009] FMCA 272.
[60] “Stuart-Mahoney”.
In relation to false and misleading representations the CFMEU does not appear to have any prior contraventions in Western Australia. Nationally, however, the CFMEU appears to have at least four prior contraventions under s.790 of the WR Act, and its predecessor in the pre-reform WR Act, with penalties ranging from $4,000[61] to $49,550 (being $24,775 for each of two contraventions).[62] Those contraventions were found during the period from January 2004 to September 2006.
[61] Cruse v Construction, Forestry, Mining and Energy Union (No. 2) [2008] FCA 1637 at para.10 per Marshall J.
[62] Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (No. 3) (2008) 177 IR 75 at 80 per Burchardt FM; [2008] FMCA 1435 at para.34 per Burchardt FM. The penalty withstood an appeal: Construction, Forestry, Mining and Energy Union v Stuart-Mahoney [2011] FCA 56 at para.97 per Ryan J.
It suffices for present purposes to observe that the CFMEU has a not insignificant record of prior conduct in relation to similar contraventions, and that that record does not warrant, of itself, any reduction in the penalty that would otherwise be imposed.
By way of general record of conduct and attitude toward the law the Court observes that there were other contraventions in relation to conduct occurring prior to the conduct in this matter in respect of which the CFMEU had also been penalised.
Course of conduct
The applicant made no submissions with respect to the relevant course of conduct. There does not appear to be any dispute that the submissions made by the Respondents are correct. Those submissions were as follows:
a)the contraventions arose out of a single episode over the course of one morning rather than a continuing course of conduct occurring over a period of time;
b)the contraventions, while constituted by separate elements, arise from the same course of conduct;
c)the statement to the workers by Mr McDonald, containing false or misleading representations concerning obligations to join the CFMEU, was made during the course of the same meeting in which Mr McDonald told workers that the Site would be closed due to problems with amenities, toilets and scaffolding; and
d)the fact that the two contraventions arise from the same course of conduct has some relevance in determining the appropriate separate penalty for both.
Consideration
The two contraventions manifestly arise from the same course of conduct over a short period of time on the morning of 25 February 2008. The Court will, in determining penalty, take account of the fact that there is a single course of conduct giving rise to two separate contraventions.
Involvement of senior management
Applicant’s submissions
The applicant submits that:
a)Mr McDonald is and was at all material times an employee and officer of the CFMEU, holding the position of Assistant State Secretary of the Construction and General Division, Western Australian Divisional Branch of the CFMEU;
b)Mr McDonald knew that a walk off would prevent the workers from attending or performing their building work;
c)the walk off occurred with the knowledge and consent of Mr McDonald, as Assistant State Secretary of this Branch; and
d)this is an aggravating factor to be taken into account.[63]
[63] Citing Finance Sector Union of Australia v Commonwealth Bank of Australia (2005) 224 ALR 467 at 475 per Merkel J; [2005] FCA 1847 at para.27 per Merkel J (“Finance Sector Union”); Stuart-Mahoney IR at 71 per Tracey J; FCA at para.51 per Tracey J; compare Cahill (No.4) IR at 323 per Kenny J; FCA at paras.89-90 per Kenny J.
Respondents’ submissions
The Respondents submit that:
a)the CFMEU disputes the assertion that the knowledge of Mr McDonald about what the walk off would mean is an “aggravating factor” against the CFMEU;
b)in ABCC v CFMEU (No 2) the Federal Court did not accept that Mr McDonald, as a senior member of the CFMEU having knowledge of a strike action, would in itself constitute an “aggravating factor”;[64] and
c)there is no evidence to indicate, or from which to infer, that any of the senior management of the CFMEU (apart from Mr McDonald) either had any knowledge of, or endorsed, or was involved in either contravention.
[64] Citing ABCC v CFMEU (No. 2) at paras.82-84 per Barker J.
Consideration
As in ABCC v CFMEU (No. 2) there is no evidence, and nothing in the Agreed Statement, which would indicate that any member of the “management” of the CFMEU was involved with, or had knowledge of, or endorsed these contraventions.
There is, therefore, no evidence that Mr McDonald has done anything other than act of his own volition, certainly in relation to the false and misleading statements. In relation to the industrial action, that occurred with involvement from other CFMEU officers, but there is nothing to indicate that they were members of any part of the management of the CFMEU, such as, for example, a committee of management. The Agreed Statement simply indicates that they were employees or agents of the CFMEU. In those circumstances, the industrial action contravention did not involve any senior management of the CFMEU, apart from Mr McDonald himself.
The fact that Mr McDonald, as an Assistant State Secretary of a division of a branch of the CFMEU, which is a national union, was involved is a matter to which some weight can be accorded. Mr McDonald was also acting, albeit without the knowledge of other CFMEU management, in pursuance of a CFMEU strategy to increase membership in taking the actions that he did. There is not sufficient evidence, and nothing in the Agreed Statement, which would enable the Court to make any findings that the CFMEU had, by omission, silence or some kind of failure, acted in a manner which tacitly endorsed the conduct of Mr McDonald at Diploma on 25 February 2008.[65]
Contrition, corrective action, cooperation with enforcement authorities
[65] This is a separate issue to the question of whether or not there has been a failure of deterrence, which is dealt with below.
Applicant’s submission
The applicant submits that:
a)the conduct of the contravener after the contravention will have relevance, particularly whether the contravener has exhibited contrition, taken corrective action and co-operated with the relevant enforcement authorities;
b)contrition may manifest itself in an expression of remorse. Alternatively, and perhaps more significantly, it may manifest itself in the demonstration of contrition through some practical act such as an apology, or a genuine expression of regret. Co-operation can be exhibited in a range of ways, such as agreeing on facts, or agreeing on penalty. The timing of any such agreement, and the impact it has on the conduct of the hearing and witnesses who would have been likely to be called at hearing, are relevant; and
c)it is accepted by the applicant that there has been some contrition and remorse shown by Mr McDonald and the CFMEU in admitting to the two contraventions, and also by committing to the Agreed Statement.
Respondent’s submissions
The Respondents generally agree with the submissions of the applicant in relation to this factor.
Consideration
The Court accepts that Mr McDonald and the CFMEU have shown contrition and co-operation with the applicant by:
a)agreeing to settle the application on the basis that there was a contravention of s.38 of the BCII Act and a contravention of s.790(1) of the WR Act;
b)filing the Agreed Statement; and
c)consequently, limiting the argument in the matter to an argument on penalty, and thereby reducing cost and inconvenience to all concerned, including the Court and potential witnesses.
The contrition and co-operation shown are such as to warrant some discount on penalty for each of Mr McDonald and the CFMEU.
Size of the contraveners and capacity to pay
Applicant’s submission
The applicant submits that:
a)the size of the entity which has contravened and the involvement of senior management of that entity will be a relevant consideration.[66] Where the relevant contravener is an individual, relevant to the assessment of penalty will be the resources available to the individual to satisfy any obligation to pay a penalty imposed upon him or her.
[66] Citing Australian Competition and Consumer Commission v Australian Safeway Stores Pty Ltd (1997) 145 ALR 36 at 47-48 per Goldberg J.
b)this has been a consideration which has been taken into account in relation to prior relevant conduct of the CFMEU.[67]
[67] Citing Stuart-Mahoney IR at 71 per Tracey J; FCA at para.49 per Tracey J; Cahill (No. 4) IR at 321 per Kenny J; FCA at paras.77-78 per Kenny J.
c)the CFMEU is a national union registered under the WR Act, with adequate resources to pay a substantial penalty;
d)the CFMEU Construction and General Division’s Financial Report for the year ending 31 December 2009 states that it had 62,474 financial members as of 31 December 2009. The 2009 Financial Report also shows that for the year ending 31 December 2009, the Division:
i)made a loss of $213,186 against total revenues of $3,819,571 and total expenses of $4,032,757;
ii)had accumulated funds of $7,358,797 (total assets of $8,743,260 and total liabilities of $1,384,463); and
iii)had cash funds of $488,908;
e)the CFMEU Construction and General Division's Financial Report for the year ending 31 December 2008 (the latest report filed with the Australian Industrial Relations Commission[68] states that it had 63,570 financial members as of 31 December 2008. The 2008 Financial Report also shows that for the year ending 31 December 2008, the Division:
[68] “AIRC”.
i)made a loss of $667,541 (including a write down of $702,755) against total revenues of $4,117,474.00 and total expenses of $4,082,260);
ii)had accumulated funds of $7,571,983 (total assets of $8,694,817 and total liabilities of $1,112,834); and
iii)had cash funds of $156,550;
f)the CFMEU Construction and General Division, Western Australian Branch's Financial Report for the year ending 31 December 2007 (the latest report available filed with the AIRC) states that it had 8,471 members as of 31 December 2007. The 2007 Financial Report also shows that for the year ending 31 December 2007, the Western Australian Branch:
i)made a profit of $984,787 against total revenues of $6,372,612 and total expenses of $5,387,825;
ii)had accumulated funds of $3,161,694 (total assets of $4,588,703 and total liabilities of $1,427,009);
iii)had cash funds of $2,836,102; and
g)the fact that the CFMEU is a not for profit entity is of minimal relevance in the context of the industrial conduct (as opposed to a commercial conduct in a trade practices sense) which is of course the modus operandi of the CFMEU.[69]
[69] Citing Draffin IR at 156 per Goldberg, Jacobson and Tracey JJ; FCAFC at para.81 per Goldberg, Jacobson and Tracey JJ; Cahill (No. 4) IR at 321-322 per Kenny J; FCA at para.80 per Kenny J.
Respondents’ submissions
The Respondents submit that:
a)the CFMEU is a large national organisation divided into many branches and divisions. This conduct only involves the WA Division. There is capacity to pay a fine; and
b)Mr McDonald is an employee of the CFMEU.
Consideration
Properly evidenced, and for proper reasons, incapacity to pay may afford some relief by way of mitigation of penalty.[70]
[70] Workplace Ombudsman v KSN Engineering Pty Ltd (2009) 185 IR 316 at 322-323 per Lucev FM; [2009] FMCA 538 at paras.10 and 13 per Lucev FM. See also the extensive treatment of the issue in Sterling Crown IR at 352-356 per Lucev FM; FMCA at paras.58-76 per Lucev FM, and the various authorities referred to therein, including Federal Court authorities on penalties in trade practices and workplace relations cases.
In relation to the size and financial resources of a contravener this Court has concluded that:
“It therefore appears that the size and financial resources of a contravener are factors to be considered, and the impact of those factors upon the setting of penalty is in each case a matter for consideration of the particular circumstances of the size and financial resources of the contravener, plus the other factors which are relevant.”[71]
[71] Sterling Crown IR at 356 per Lucev FM; FMCA at para.76 per Lucev FM.
The applicant’s submissions contain significant material in relation to the financial status and capacity to pay of the CFMEU. No objection was taken to this material being put before the Court by way of submissions, but the Court notes that it is not otherwise in evidence. In any event, it does not appear to be in dispute that the CFMEU is of a size and has the capacity to pay any penalty imposed by the Court up to the maximum sought by the applicant.
In relation to Mr McDonald, there is no evidence as to his capacity to pay or otherwise. In the absence of any evidence of an incapacity to pay, the Court is entitled to conclude that Mr McDonald has the capacity to pay any fine. There is, therefore, no evidence sufficient to further mitigate any penalty to be imposed upon Mr McDonald by reason of a present incapacity to pay.
Deterrence
Applicant’s submissions
The applicant submits that:
a)the penalty arrived at must reflect the need for specific and general deterrence.[72] Specific deterrence is directed to ensuring that the contravener is not prepared to embark upon the risk of re-offending. General deterrence is directed to ensuring that the penalty will act as a deterrent to others who might be likely to offend. The penalty should be such as would be likely to act as a deterrent in preventing similar contraventions by like-minded persons or organisations. If it does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the relevant provision;[73]
b)the applicant further submits that in relation to the question of deterrence generally, in view of the fact that Mr McDonald occupies a senior position within the CFMEU, and is thus likely to be influential in setting the standards of behaviour and conduct of others within the CFMEU, it is appropriate that a significant penalty be imposed to deter similar contraventions in the future; and
c)these matters in conjunction with regard to the prior relevant conduct make specific deterrence an important consideration, for the Respondents.
[72] Citing Caelli Constructions FCR at 559-569 per Lander J; FCAFC at para.93 per Lander J.
[73] Citing Department of Public Prosecutions v Gordon (1994) 71 A Crim R 459 at 468 per Hunt CJ; Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd (No. 2) [2007] FCA 11 at para.66 per Young J; Finance Sector Union ALR at 479 and 487 per Merkel J; FCA at paras.41-42 and 71 per Merkel J; Australian Competition and Consumer Commission v Leahy Petroleum Pty Ltd & Ors (No. 2) (2005) 215 ALR 281 at 287 per Merkel J; [2005] FCA 254 at para.23 per Merkel J; Australian Competition and Consumer Commission v High Adventure Pty Ltd [2005] FCAFC 247 at para.11 per Heerey, Finkelstein and Allsop JJ.
Respondents’ submissions
The Respondents accept that specific and general deterrence will be considered by the Court, and made no specific submissions as to its application in this case.
Consideration
In Leighton Contractors the Supreme Court of Western Australia imposed penalties upon Mr McDonald for 16 contraventions of s.38 of the BCII Act. The penalty imposed was $30,000.[74] The Supreme Court of Western Australia observed in that case:
A penalty of $30,000 on the third defendant is a very large penalty on a union official and is a sufficient deterrent against repeat contraventions.[75]
[74] Leighton Contractors IR at 391 per Le Miere J; WASC at para.75 per Le Miere J.
[75] Leighton Contractors IR at 391 per Le Miere J; WASC at para.75 per Le Miere J.
Bearing in mind that the penalty in Leighton Contractors was imposed in November 2006 and the conduct the subject of these proceedings occurred just fifteen months later in February 2008 it is clear that what was intended to be a sufficient deterrent against repeat contraventions did not have a deterrent effect on this occasion. The penalty to be imposed by this Court for contravention of s.38 of the BCII Act in relation to Mr McDonald’s conduct must therefore be such as to seek to impose a specific deterrent upon the re-occurrence of such conduct in the future. The same considerations with respect to specific deterrence do not arise in relation to the s.790(1) WR Act contravention because Mr McDonald has not previously contravened that provision. Nevertheless, there must be some element of specific deterrence, given that it is a serious contravention in the circumstances of a provision which underpins objects of the WR Act, including freedom of association provisions, which was essentially the ultimate subject matter of the false and misleading representation.
In relation to the CFMEU its record of similar prior conduct, both at a State and national level, indicates a need for specific deterrence in relation to both contraventions. The national position must be considered because to ignore it would be to compromise the deterrent effect of any penalty, particularly in circumstances where the Court is dealing with federal legislation in relation to federal organisations which operate throughout the Commonwealth.[76] That said, some weight can be accorded in the assessment of penalty to the conduct of the particular part of a union concerned, but where, as here, the union concerned is a national union, and the relevant contraventions have occurred in a number of States of the Commonwealth, but all within the one division, those prior contraventions cannot be ignored in the overall assessment of penalty. Given the CFMEU’s record of prior relevant conduct it is therefore appropriate that there be a penalty reflecting the need for specific deterrence.
[76] Williams (No. 2) IR at 337-338 per Jessup J; FCA at paras.20-25 per Jessup J.
General deterrence is also appropriate in the circumstances to ensure that the penalties to be imposed in this case act as a deterrent to persons who might in the future consider making false and misleading representations or engaging in unlawful industrial action contrary to the terms of Commonwealth workplace relations legislation.
Appropriate penalties
Applicant’s Submissions
The applicant submits that:
a)in accordance with s.49(2) of the BCII Act, the maximum penalty for each contravention of s.38 of the BCII Act is:
i)for the CFMEU, $110,000; and
ii)for Mr McDonald, $22,000;[77] and
[77] Section 38 is a Grade A civil penalty provision. The maximum penalty is 1,000 penalty units for a corporate entity and 200 penalty units for an individual. A penalty unit is $110.00: ss.4(1) and 4AA(1), Crimes Act 1914 (Cth).
b)in accordance with s.807 of the WR Act, the maximum penalty for each contravention of s.790(1) of the WR Act is:
i)for the CFMEU, $33,000; and
ii)for Mr McDonald, $6,600.
c)in having regard to the above matters, and especially prior relevant conduct, the deliberateness of the conduct and the need for specific deterrence, the applicant submits that the appropriate quantum of penalty for contravention by Respondents of s.38 of the BCII Act is:
i)$5,500 to $8,800 (25% to 40% of the maximum) for Mr McDonald; and
ii)$27,500 to $44,000 (25% to 40% of the maximum) for the CFMEU; and
d)for contravention by the Respondents of s.790(1) of the WR Act, the applicant submits that the appropriate quantum of penalty is:
i)$2,640 to $3,300 (40% to 50% of the maximum) for Mr McDonald; and
ii)$13,200 to $16,500 (40% to 50% of the maximum) for the CFMEU.
Respondents’ submissions
Mr McDonald’s submissions – s.38 BCII Act penalty
Mr McDonald submits with respect to the s.38 BCII Act penalty that:
a)the penalty proposed by the applicant of $5,500 - $8,800 (25% to 40% of the maximum) is excessive and inappropriate because:
i)the circumstances of this case are distinguishable from other s.38 BCII Act cases in that the strike was of short duration and limited effect, and there was no deliberate orchestrated industrial strategy advocated by the first respondent;
ii)when considering Mr McDonald’s prior similar conduct, his penalties for a single contravention involving a 48 hr strike were between $1,500 and $3,000 whereas this walk off lasted less than one working day;
iii)Mr McDonald’s relevant prior similar conduct is now five years old; and
iv)it is higher than the range of prevailing penalties imposed on other union officials around Australia for unlawful building industrial action, the cases indicating a range of $1,000[78] to $11,000;[79] and
b)the appropriate penalty having regard to the circumstances of this case and comparable cases is a modest fine in the range between $1,500[80] and $3,500.[81]
CFMEU’s submissions – s.38 BCII Act penalty
[78] Citing Gregor v CFMEU & Anor [2009] FMCA 1266.
[79] Citing Cruse v Multiplex Limited (2009) 182 IR 60; [2009] FMCA 236 (“Cruse”).
[80] Citing Temple.
[81] Citing Cruse.
The CFMEU submits with respect to the s.38 BCII Act penalty that:
a)the penalty proposed by the applicant of $27,000 – $44,000 (between 25% to 40% of the maximum) is excessive and inappropriate for the following reasons:
i)the circumstances of this conduct are that it emanated from action to enforce site safety and improve working conditions;
ii)the strike action occurred with no warning, the circumstances having arisen on the day of the contravention, and about which there was no evidence of any knowledge or involvement by any senior management of the CFMEU apart from Mr McDonald;
iii)the strike was of short duration;
iv)the loss and damage caused to Diploma was limited;
v)the proposed penalty is disproportionate to the gravity of the conduct; and
vi)the proposed penalty is outside the prevailing range of penalties dispensed in similar cases; and
b)the appropriate penalty for the CFMEU having regard to the circumstances of this case and comparable cases is a fine at the lower end of the scale, the range being between $2,500[82] and $11,500[83] fine.
[82] Citing Pine v Multiplex Constructions (Vic) Pty Ltd [2005] FCA 1428.
[83] Citing John Holland Pty Ltd v Construction, Forestry, Mining and Energy Union[2009] FMCA 1248.
Mr McDonald’s submissions – s.790(1) WR Act penalty
Mr McDonald submits with respect to the s.790(1) WR Act penalty that:
a)the penalty proposed by the applicant of $2,640 to $3,300 (being 40% to 50% of the maximum) is excessive and inappropriate for the following reasons:
i)the absence of any relevant similar past contraventions; and
ii)the one-off nature of Mr McDonald’s attendance at the Site on 25 February 2008, and the safety and amenities conditions on the Site at that time; and
b)the appropriate penalty for Mr McDonald having regard to the circumstances of this case, and comparable cases, is a modest fine in the range between $1,000 and $2,000.
CFMEU’s submissions – s.790(1) WR Act penalty
The CFMEU submits with respect to the s.790(1) WR Act penalty that:
a)the penalty proposed by the applicant of $13,200 to $16,500 (between 40% to 50% of the maximum) is excessive and inappropriate for the following reasons:
i)the absence of relevant similar past contraventions recorded against the Western Australian Branch of the CFMEU; and
ii)the lack of evidence of any knowledge or involvement by any senior management of the CFMEU apart from Mr McDonald; and
b)the appropriate penalty for the CFMEU having regard to the circumstances of this case and comparable cases is a fine at the lower end of the scale, the range being between $2,000 to $4,000.
Consideration
Mr McDonald – s.790(1) WR Act penalty
The maximum penalty for Mr McDonald’s contravention of s.790(1) of the WR Act is $6,600. Bearing in mind the nature and extent of the circumstances in this case, the contravention, whilst serious, is not in the most serious category of case and falls toward the lower to lower-middle range of penalties. In the circumstances, the Court would not impose a penalty of more than 40% of the maximum penalty.
As has already been said, the contravention is deliberate and serious, relating to representations which were false and misleading, but false and misleading in relation to union membership, which goes to the question of freedom of association, and the objects of the WR Act relating to, and providing for, the freedom to be or not be a union member as a person sees fit. The representations were made consistent with a CFMEU strategy to increase membership, but done without pre-determination by the CFMEU management in Western Australia, and opportunistically by Mr McDonald on the day. It is a single instance of such conduct, albeit that it was repeated twice on the day. The quantifiable damage is minimal, but there is also intangible damage to the statutory objectives with respect to freedom of association in circumstances where a meeting was called on Site, the attendance at which may have been affected by the misrepresentations. That meeting ultimately determined to take industrial action which affected those working on the Site, whether union members or not.
This is not a contravention in which, for reasons otherwise set out above, specific deterrence looms large. Taking into account all of the circumstances, and giving credit for contrition and co-operation, the Court is of the view that a penalty of 30% of the maximum, that is $1,980, is appropriate.
CFMEU – s.790(1) WR Act penalty
The maximum penalty for the CFMEU for its contravention of s.790(1) of the WR Act is $33,000. Similar considerations apply in relation to the CFMEU as applied to Mr McDonald, save that:
a)the CFMEU was not involved generally at a management level, other than through the opportunistic and not pre-determined actions of Mr McDonald; and
b)given that there are prior contraventions, but in another State, there ought to be some measure of specific deterrence in relation to the CFMEU’s contravention of s.790(1) of the WR Act.
Bearing all the circumstances in mind, the Court is of the view that a penalty of 20% of the maximum, or $6,600, is appropriate.
Mr McDonald – s.38 BCII Act penalty
The maximum penalty for Mr McDonald for his contravention of s.38 of the BCII Act is $22,000.
The Court notes that the industrial action, which was a single day strike, in response to certain workplace pressures, is at the lower end of the penalty spectrum for unlawful industrial action (bearing in mind that that unlawful industrial action might range from minor bans through to indefinite industrial action accompanied by other action, such as picketing and secondary boycotts, or even violent protest), and that in the circumstances of this case a penalty of not greater than 30% of the maximum seems to be appropriate.
The circumstances in relation to this contravention are, viewed generally, not dissimilar to those in respect of the s.790(1) contravention, save that in this case there is a significant need for specific deterrence in relation to Mr McDonald’s conduct, bearing in mind that he has previously contravened the provisions of s.38 of the BCII Act, and incurred a significant penalty which was supposed to act as a specific deterrent. The Court also notes the continuity of conduct between the two offences on the day, which warrants some further discount, to ensure that the penalty is not excessive in relation to the overall conduct. In the circumstances a penalty of 20% of the maximum, or $4,400, is appropriate.
CFMEU – s.38 BCII Act penalty
The maximum penalty for the CFMEU for its contravention of s.38 of the BCII Act is $110,000. Similar considerations apply to the CFMEU as applied to Mr McDonald, save that:
a)there is a greater need for specific deterrence in the CFMEU’s case given its prior history of similar conduct, both in Western Australia and nationally; and
b)the industrial action taken was taken generally without the knowledge of the CFMEU management, the result of the opportunistic and not pre-determined actions of Mr McDonald.
In the circumstances, a penalty of 20% of the maximum, or $22,000, is appropriate.
Totality principle
The Court is obliged to consider the totality principle when making a final determination as to penalty. Essentially, the totality principle requires the Court, once it has made a judicial evaluation of what it considers to be an appropriate aggregate penalty, to examine one final time, the aggregate penalty in order to determine whether it appears wrong.[84]
[84] Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383 at 397 and 408 per Stone and Buchanan JJ; [2008] FCAFC 70 at paras.42-43 and 91 per Stone and Buchanan JJ; Australian Ophthalmic Supplies FCR at 567-568 per Gray J and 577 per Graham J; FCAFC at paras.27-28 per Gray J and 78 per Graham J.
Having considered the penalties that the Court has determined to be appropriate, for reasons set out above, the Court, having reviewed those penalties, in their totality, does not consider that they are in any way oppressive, crushing or otherwise inappropriate in the circumstances of this case. The application of the totality principle in this case does not warrant any further reduction in the penalties that the Court has determined are appropriate.
Declarations and orders
For the reasons set out above the Court will make:
a)declarations as to the admitted contraventions, as set out above;[85] and
b)orders that:
i)penalties in the amounts set out above for Mr McDonald and the CFMEU’s contraventions of s.38 of the BCII Act and s.790(1) of the WR Act be imposed; and
ii)the penalties be paid to the Commonwealth Consolidated Revenue Fund by 5 November 2012.
[85] See para.5 above, Agreed Statement, para.1.
Costs
There is agreement between the parties that the Respondents ought to pay the applicant’s costs in the sum of $15,000, and be jointly and severally liable for those costs.[86] There will be a further order accordingly, with costs payable by 5 November 2012.
[86] Transcript, page 15.
I certify that the preceding seventy-four (74) paragraphs are a true copy of the reasons for judgment of Lucev FM
Associate:
Date: 5 October 2012
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