The Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union

[2016] FWC 811

[2016] FWC 811 [Note: An appeal pursuant to s.604 (C2016/569) was lodged against this decision - see decision dated 18 March 2016 [[2016] FWCFB 1692] and 27 May 2016 [[2016] FWCFB 3241]] respectively for result of appeals.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.508 - Application to restrict rights if organisation or official has misused permit rights

The Director of the Fair Work Building Industry Inspectorate
v
Construction, Forestry, Mining and Energy Union and others
(RE2014/1389)

VICE PRESIDENT WATSON MELBOURNE, 7 MARCH 2016

Application by Fair Work Building and Construction – misuse of entry rights - consequences of findings – general approach – whether orders suspending or revoking permits should be made – whether conditions should attach to current and future permits - Fair Work Act 2009, ss.505, 508, 509, 510, 512, 513.

Introduction

[1] On 24 December 2015 I handed down a Decision 1 concerning an application by the Director of the Fair Work Building Industry Inspectorate (the Director) pursuant to s.508 of the Fair Work Act 2009 (the Act). I made findings under s.508 of the Act that Construction, Forestry, Mining and Energy Union (CFMEU) officials Mr Myles, Mr Ingham, Mr O’Brien, Mr Kong, Mr Long and Mr Graauwmans had misused their rights of entry. I also found that the CFMEU itself was involved in the misuse of entry permits held by its officials.

[2] I provided the parties with the opportunity to make submissions on the consequences of my findings and issued directions to file written submissions. I also provided the parties with the opportunity to request a further hearing. Neither party requested a further hearing.

Legislation

[3] Section 508 of the Act provides:

“508 FWC may restrict rights if organisation or official has misused rights

(1) The FWC may restrict the rights that are exercisable under this Part by an organisation, or officials of an organisation, if the FWC is satisfied that the organisation, or an official of the organisation, has misused those rights.

Note: Only a Vice President, Deputy President or Full Bench may take action under this subsection (see subsections 612(2) and 615(1)).

(2) The action that the FWC may take under subsection (1) includes the following:

(a) imposing conditions on entry permits;

(b) suspending entry permits;

(c) revoking entry permits;

(d) requiring some or all of the entry permits that might in future be issued in relation to the organisation to be issued subject to specified conditions;

(e) banning, for a specified period, the issue of entry permits in relation to the organisation, either generally or to specified persons;

(f) making any order it considers appropriate.

(3) The FWC may take action under subsection (1):

(a) on its own initiative; or

(b) on application by an inspector.

(4) Without limiting subsection (1), an official misuses rights exercisable under this Part if:

(a) the official exercises those rights repeatedly with the intention or with the effect of hindering, obstructing or otherwise harassing an occupier or employer; or

(b) in exercising a right under Subdivision B of Division 2 of this Part, the official encourages a person to become a member of an organisation and does so in a way that is unduly disruptive:

(i) because the exercise of the right is excessive in the circumstances; or

(ii) for some other reason.”

The General Approach

[4] Senior Deputy President Watson said the following in McLoughlin’s Case:

“The type of orders envisaged include revoking or suspending all permits that have been issued in respect of the union or imposing limiting conditions on some or all of the permits. Such orders are directed to addressing abuse of the right of entry system and to ensure that right of entry is exercised responsibly within the new system, to reducing the extent of disruptive union entry into Australian workplaces and to limiting the systematic abuse of right of entry laws. The discretion is exercised to promote the purpose of the Act, including the object in s.736(d).” 2

[5] The Director submits that the making of orders to suspend, revoke and impose conditions on permits is directed to avoiding disruptive entry into workplaces and the abuse of right of entry laws, rather than punishment of permit holders. 3 The Director notes that this approach has been adhered to in subsequent cases,4 and submits that this does not mean that deterrence plays no part in formulating the restrictions to be imposed under s.508 of the Act, as in his submission, deterrence is separate from punishment.

[6] The Director submits that the best way to achieve the balance referred to in s.480 of the Act is to impose restrictions that effectively prevent and deter misuse of the powers under Part 3–4 of the Act, so that occupiers are protected from undue influence.

[7] The Director submits that the following factors are relevant to determining consequences of misuse, and has provided details of the following in relation to the individual permit holders:

• history of prior relevant contraventions and/or permit proceedings



• evidence of a permit holder’s prior conduct from other sources, and



• pending penalty matters.

[8] The Director submits that as a result of the findings of misuse in these proceedings, the Commission should suspend the permits of the relevant officials for substantial periods (immediately, rather than “suspended suspensions”) or revoke them. The Director submits that further, depending on the status of the permits of those respondents, suspension and revocation orders should be supported by banning orders in order to achieve the desired protection for occupiers. It is submitted that only such suspensions and bans will help achieve the object of Part 3–4 of the Act which includes the protection of occupiers of building sites from misuse of right of entry by CFMEU officials in the future.

[9] The Director submits that in addition, the need for more general attitudinal change is well documented. The Director submits that this can be addressed by imposing suitable conditions on permits issued and to be issued to CFMEU officials in Queensland and Victoria.

[10] The Director submits that the fact that he did not make submissions on the proposed Consent Order in the s.505 matter should not preclude him from making submissions in relation to this matter, as the nature of s.505 proceedings and s.508 proceedings is different. The Lend Lease proceedings were concerned with how the dispute should be settled. These proceedings are concerned with whether there has been misuse, and, if so, what restrictions should be imposed on the organisation and officials as a result. Further, the Director states that to accept the CFMEU’s submissions on this point would be to ignore the express limitations in s.73 of the Fair Work (Building Industry) Act 2012.

[11] The Consent Order issued on 18 February 2015 binds Lend Lease parties, the CFMEU and its officers, named individual CFMEU officials relevantly including Mr Kera, Mr Parker, Mr Myles, Mr Kong, Mr Ingham, Mr Graauwmans and Mr Long, and all other CFMEU officers. The order applies in relation to Lend Lease building and engineering sites and provides that parties to the order must comply with a number of conditions, including in relation to the provision of entry notices, notice of entry, safety requirements including wearing protective equipment, undertaking a site induction and signing a visitor’s book. Further, there are conditions concerning organising meetings in accordance with relevant legislation. The Order operates until 30 June 2016.

[12] The CFMEU submits it is of relevance that all of the misuses in this matter arise in relation to sites occupied by Lend Lease and all of them date back to a period of about six months between 21 January 2014 and 1 July 2014.

[13] The CFMEU submits that the discretion to make orders in s.508 is not at large and is not, for example, informed by considerations that might be otherwise relevant to the jurisdiction to revoke or suspend a permit (s.510) or to issue a permit (ss.512 and 512). It is submitted that the only jurisdiction that has been invoked here is the jurisdiction to make orders restricting rights of entry because the Commission is satisfied that rights have been misused.

[14] The CFMEU contends that the discretion to make orders restricting rights must ‘deal with’ the relevant misuse in the sense that there must be a nexus between the relevant misuse and any order restricting rights. 5 The CFMEU submits that the Director does not identify a nexus between the orders he seeks and the misuses found, apart from his submissions about deterrence. The CFMEU contends that there is no explanation as to why the conditions sought to be imposed are appropriate other than a general reference to the fact that they were imposed in another (and different) case.6 The CFMEU submits that there is no case developed, reasoned or argued as to why either the orders sought by way of suspension, revocation, ‘ban’ or conditions are necessary in the circumstances.

[15] Further, the CFMEU submits that the Director does not put forward any reasons why it is necessary to make any orders, in circumstances where:

• the relevant misuses occurred over a period of about six months on one constructor’s site



• an order was issued by Senior Deputy President Watson in the s.505 proceedings which relates to the same conduct, and



• there has been no repetition of those misuses, or any other misuse since then.

[16] The CFMEU contends that there is no finding by the Commission, and none has been sought by the Director (and in the face of the evidence nor could one be made) that there is any likelihood that the misuses found will be repeated in the future.

[17] The CFMEU submits that it is to be borne in mind that these are not proceedings for the imposition of civil penalties and concepts of deterrence are not of themselves relevant to the exercise of powers under s.508 of the Act. The CFMEU submits that although the Director acknowledges that these are not penalty proceedings directed to punishment, much of the thrust of the Director’s submissions are in terms of punishment, as the Director speaks of ‘deterrence’, the ‘record’ of individuals, the role of the regulator in civil penalty proceedings, a ‘Schedule of Past Penalties’ and so on. The CFMEU submits that it appears that the Director is seeking to use these proceedings as a means of imposing punishment on the CFMEU and the individuals, as in the CFMEU’s submission the Director has provided no reasoned basis for the orders sought (other than deterrence).

[18] The CFMEU submits that should the Commission make any orders, which the CFMEU submits it should not, the Commission should keep in mind that any order imposing conditions on the exercise of rights of entry which reflects the provisions of the Act or, alternatively, modifies them will act as a deterrent only because the CFMEU and the individuals will be exposed to a penalty for breach of the order and note that that is exactly the position that pertains anyway as a result of the order of Senior Deputy President Watson.

[19] In my view the scheme of s.508 contemplates a consideration of restrictions arising from misuse of right of entry rights and unless the misuse found is very minor or inconsequential appropriate consequences should follow a finding of misuse. The scheme of the Act confers the power on this Commission to modify the future use of permits when satisfied on application or of its own motion that rights of entry have been misused. Where an individual has misused rights, conditions on permits, suspension or revocation may be appropriate. Where there is a systemic case of misuse, consequences of a more general nature may be appropriate. The objective should be to ensure, as far as possible, that rights of entry are not misused in the future, and the balancing of rights intended by the Act is achieved.

Specific Orders

[20] The Director particularised the orders sought against each individual respondent as outlined below.

[21] In relation to the Director’s case as particularised, the CFMEU submits that neither the CFMEU nor the individuals were at any time on notice that the circumstances of misuse that would be relied upon to found the making of orders would be wider than those in the Application. It is submitted that the Commission should limit its consideration of any orders to the misuses found and referred to in the Decision.

[22] The CFMEU submits that the Commission should not have regard to the findings of the Royal Commission into Trade Union Governance and Corruption (Royal Commission), especially when they have no relevant nexus to the allegations of misuse made. Further, it submits that the Commission should reject reliance upon ‘Pending Penalty Matters’ given that these matters have not been finally determined. Likewise, it submits that matters that are subject to appeal and where there is a real contest as to liability and where orders have been stayed should not be considered as having any relevance.

[23] The CFMEU submits that the settlement of the dispute between Lend Lease and the CFMEU reflected in the orders of Senior Deputy President Watson is relevant to the making of any orders in this matter. The CFMEU submits that it is important to have regard to the fact that the orders made by Senior Deputy President Watson have successfully dealt with the issues in dispute which are in large part the same as the misuse relied on by the Director in these proceedings.

[24] The CFMEU submits that the importance of the orders of Senior Deputy President Watson should not be disregarded. It submits that it is no answer to say that those proceedings were dispute proceedings under s.505 and these proceedings are proceedings under s.508, when the very same circumstances were the basis for the orders made, the power to make orders was substantially the same, and the objective of both sections is informed by achieving those things that are set out in s.480 of the Act.

[25] The CFMEU submits that the fact that the Director has not suggested any breach of the orders of Senior Deputy President Watson is a very powerful discretionary factor against the making of any orders. The CFMEU submits that the orders of Senior Deputy President Watson have brought about achievement of the object of securing compliance with the statutory prescription. There is no need for ‘deterrence’ as it would seem that the punitive consequence of breach of the order of Senior Deputy President Watson has been effective.

[26] The CFMEU submits that the Director was present during the proceedings which led to Senior Deputy President Watson making orders, and that he did not suggest in his role as regulator that those orders were not appropriate. The CFMEU submits that s.73 of the Fair Work (Building Industry) Act 2012 has no relevance in this matter as it only applies to court proceedings. The CFMEU submits that the Director had the opportunity to make submissions in relation to the order but it chose not to.

[27] The CFMEU submits that the Director’s submissions concerning the balance referred to in s.480 of the Act ignore the backdrop of the orders of Senior Deputy President Watson, which the CFMEU submits have achieved the objective referred to. It is submitted that those orders adequately establish the ‘balance’ referred to in s.480 of the Act.

[28] In response, the Director submits that the discretion under s.508 of the Act to restrict the rights exercisable under Part 3–4 of the Act is not confined in the manner suggested by the CFMEU. He submits that once the Commission is satisfied there were misuses, the jurisdiction to impose restrictions has been established. It is submitted that what the Commission has to take into account is the nature, extent, frequency and effect of the misuses proved, and the Commission’s considerations are not, as the CFMEU suggests, confined to the particular circumstances of the misuses. The Director submits that this is made clear in the authorities. 7

[29] The Director submits that any material that sheds light on the extent to which the respondents can confidently be relied upon to comply with Part 3–4 in the future is relevant to the exercise of the Commission’s discretion under s.508. The fact that these matters may also be relevant under s.510 or ss.512 and 513 does not mean that they are not relevant under s.508.

[30] In response to the CFMEU’s contentions regarding the nexus between the restrictions to be imposed and the misuses, the Director submits that no defined ‘nexus’ is required, as the wording of s.508 does not require one. Further, it there is nothing in the wording of s.508 that suggests that the only restrictions that can be imposed are those that are ‘necessary’. It is submitted that what is required is that the restrictions be directed to ensuring that there will be no further misuses and that Part 3–4 will be complied with in the future.

[31] The Director submits that there is no onus on the Director, having proved the misuses to the satisfaction of the Commission, to go further and prove that certain restrictions are ‘necessary’ to prevent further misuses. He submits that any restriction that increases the confidence of the Commission in future compliance can be imposed.

[32] In response to the CFMEU’s submissions concerning likelihood of misuses, the Director submits that the Commission does not need to find that there is a ‘likelihood that the misuses found will be repeated in the future’ before restrictions can be imposed. The Director submits that the purpose of the restrictions is to ‘ensure’ that there are no further misuses, and the authorities refer to whether the Commission can be ‘confident’ there will be no further misuses. The Director submits that there is nothing in the CFMEU submissions or evidence to instil such confidence, and in those circumstances, the revocation of a permit is the ultimate way of ensuring that a permit holder does not again misuse entry rights.

[33] In response to the CFMEU’s submissions concerning deterrence, the Director submits that punishment is a separate concept from deterrence and rehabilitation. It submits that the restrictions to be imposed under s.508 are to be directed towards the public interest in promoting compliance with Part 3–4, and that deterrence plays a part in this. The Director submits that a respondent is less likely to misuse his or her rights again if, the last time the rights were misused, those rights were taken away for a substantial period. Conversely, if there are no consequences as a result of the litany of misuses, then the respondents are more likely to misuse their rights – knowing that they can do so without any adverse consequences.

[34] The Director repeats its submission that past penalties are relevant to the exercise of the Commission’s discretion under s.508 of the Act. He submits that the Commission needs to be informed if a respondent has been found to have contravened an industrial law. It is submitted that a significant ‘record’ of such contraventions will make the Commission less confident that the respondent will not misuse the rights of a permit holder again. The Director submits that it would be a strange result if the Director had to wait until the next s.512 application before bringing to the attention of the Commission matters relevant to a respondent’s fitness to hold a permit.

[35] In response to the CFMEU’s submissions about the deterrent effect of conditions to obey the law, the Director accepts that the fact that conditions imposed under s.508 may be enforced by civil penalty under s.509 of the Act lends support to such conditions as a “mechanism for encouraging compliance.” The Director submits that however, there is not much deterrence in imposing conditions that merely ‘reflect the provisions of the Act.’ Such conditions would be akin to ordering the respondents to obey the law.

[36] In response to the CFMEU’s submissions concerning notice of matters relevant to restrictions, The Director submits that there is a clear separation between the two-stage process in the s.508 proceedings, the first to determine whether the Commission is satisfied that the respondents have misused their rights, and the second concerning what restrictions should be imposed. The Director submits that it made submissions concerning restrictions at the appropriate time and the CFMEU has been afforded a chance to respond, as per the directions.

[37] In response to the CFMEU’s submissions concerning the Royal Commission, the Director submits that the Commission can take into account all probative material that sheds light on the extent to which it can be confident that the respondents will not misuse the rights of a permit holder in the future.

[38] Concerning the CFMEU’s submissions regarding pending penalty matters, the Director submits that where contraventions have been admitted in a Statement of Agreed Facts, the Commission does not have to wait until the court proceedings have been “finally determined” with respect to quantum of pecuniary penalty. The Director has asked the Commission not to take into account the last two matters on the ‘Pending Penalty Matters’ schedule at this stage, as they were contested.

[39] In light of the CFMEU submissions about the pending penalty matter under appeal, the Director now accepts that, because of the appeal pending before the Full Court of the Federal Court and the stay of the penalty, the judgment of Flick J in respect of Kong should only be taken into account to the extent that it records the Statement of Agreed Facts.

[40] In relation to the CFMEU’s submissions concerning the order in the s.505 proceedings, the Director accepts that the Order in the s.505 proceedings can be taken into account in assessing the extent to which the Commission can be confident there will be no further misuses and that Part 3–4 will be complied with by the respondents in the future.

[41] The Director repeats its submissions that the issues in a dispute proceeding under s.505 are different from the issues in a s.508 proceedings. It submits that all parties and the Commission were aware that the Director’s separate proceedings under s.508 were pending when the s.505 proceedings were settled. The Director expressed no view before Senior Deputy President Watson as to the proposed orders, knowing that the issues of misuse were to be heard and determined by the Commission at a later date, in the pending and separate s.508 proceedings.

Mr Parker and Mr Kera

[42] The Director made submissions as to the orders sought in respect of Mr Parker and Mr Kera on 10 and 13 July 2015. The Director and the CFMEU agreed to the restrictions to be imposed on their entry permits, subject to the views of the Commission. The orders sought by consent are as follows:

“The Fair Work Commission, being satisfied that Brian Parker and Robert Kera have misused rights exercisable under Part 3-4 of the Fair Work Act 2009 (“the Act”) orders that:

1. Subject to Order 2, the entry permit held by Brian Parker under Part 3-4 of the Act is suspended for a period of 3 months.

2. Order 1 shall not take effect unless Brian Parker is ordered by a court of competent jurisdiction to pay a pecuniary penalty in relation to a contravention of the Act which occurs within 6 months of the date of this Order.

3. Subject to Order 4, the entry permit held by Robert Kera under Part 3-4 of the Act is suspended for a period of 3 months.

4. Order 3 shall not take effect unless Robert Kera is ordered by a court of competent jurisdiction to pay a pecuniary penalty in relation to a contravention of the Act which occurs within 6 months of the date of this Order.”

[43] I am satisfied that these restrictions are appropriate and will make orders in line with the agreement reached.

Mr Myles

[44] In these proceedings, Mr Myles was found to have misused his entry rights on three occasions at The Green in Bowen Hills, Brisbane, including on 4 April 2014, 19 June 2014 and 26 June 2014.

[45] The Director notes that on each occasion, his entry resulted in industrial action. The Director submits that use of right of entry to procure unlawful industrial action is a serious misuse, and notes that Mr Myles did this three times in as many months.

[46] The Director notes that on 20 July 2015, prior to the hearing of this matter, the Commission considered Mr Myles’ prior relevant conduct when determining an application by the CFMEU and the CFMEUQ for an entry permit for Mr Myles. He was a respondent in 7 separate proceedings. 8 Mr Myles has also formally admitted having organised unlawful industrial action on the Arena Apartments and the QUT projects in a pending matter. The Commission was not satisfied that Mr Myles was a fit and proper person to hold an entry permit.9

[47] As a result, Mr Myles does not have an entry permit to suspend or revoke. The Director submits that restrictions should be imposed to protect head contractors from having to deal with Mr Myles, who it submits has used right of entry as a gateway to unlawful industrial action.

[48] The Director submits that although not directly applicable, a guide for the length of a ban that should be imposed under s.508(2)(e) can be found in s.510(4)-(6) of the Act. On this basis, it is submitted that Mr Myles should not be issued with a permit for a period of five years from the date of the order. The Director submits that this result can be achieved by a ban imposed under s.508(2)(e) of the Act.

[49] Arising from the circumstances of this matter I determine that a ban on the issue of a future permit with respect to Mr Myles should apply for two years from the date of the orders arising from this decision. If an application for a permit is made after that time it will need to be considered in relation to all of the relevant circumstances at the time.

Mr Ingham

[50] In these proceedings, Mr Ingham has been found to have misused his right of entry on three occasions. These include on 15 May 2014 at Sunshine Coast University Hospital, on 26 June 2014 at The Green, Bowen Hills, Brisbane, and on 10 July 2014 at Queensland Children’s Hospital Academic and Research Facility, South Brisbane.

[51] The Director contends that it is of relevance that Mr Ingham is a senior CFMEU official. His offices include State Joint Vice President of the Queensland State Branch of the CFMEU and Branch Assistant Secretary of the Queensland/NT Divisional Branch of the Construction and General Division of the CFMEU.

[52] The Director outlined a number of prior contraventions which it submits is relevant. 10 These include findings of the Royal Commission.11 The Director submits that the Commission can have regard to the findings of the Royal Commission in exercising its discretion under s.508 as to what restrictions should be imposed on Mr Ingham as a result of the misuses found in these proceedings.

[53] Mr Ingham’s permits are due to expire on 28 March 2016 and 10 April 2016. A decision as to whether those permits should be renewed has not yet been determined. Vice President Hatcher, who the matters are allocated to, has asked for further submissions in light of the findings of misuse in these proceedings.

[54] The Director submits that Mr Ingham’s permits should be suspended until they are due to expire and that the issue of fresh permits to Mr Ingham be banned for three years from the date of Order.

[55] The Director notes that Mr Ingham holds two permits, one as an official of the CFMEU and one as an official of the CFMEU, Industrial Union of Employees, Queensland, which is a transitionally recognised association (TRA), recognised under Schedule 1 of the Fair Work (Registered Organisations) Act 2009. The Director submits that although the TRA is not a respondent in these proceedings, any restriction imposed on the permits of these officials should apply to both the CFMEU and TRA permits. It is submitted that otherwise, the TRA permit could be used to obviate the restriction imposed on the CFMEU permit.

[56] In all of the circumstances I determine that Mr Ingham’s permits should be revoked and that the issue of new permits should be banned for a period of two years from the date of the orders arising from this decision.

Mr Kong

[57] In these proceedings, Mr Kong has been found to have misused his right of entry on 11 occasions on the Sunshine Coast University Hospital site between 21 February and 1 July 2014. Mr Kong was also found to have misused his rights under s.508(4).

[58] The Director notes that there have been a number of other proceedings involving Mr Kong. 12 There is also a matter pending in which the CFMEU has made admissions concerning Mr Kong’s conduct.13

[59] Mr Kong’s permit bears a condition that he advise the Commission within two weeks of any findings, penalties or proceedings relating to his qualification for a permit under the Act. Mr Kong holds a permit with both the CFMEU and the related TRA. Both permits are due to expire on 16 May 2017.

[60] The Director submits that Mr Kong’s permit should be revoked and that a three year ban should be imposed under s.508(2)(e). He repeats his submissions outlined above in relation to Mr Ingham, that any restrictions imposed on Mr Kong’ permit should apply to both the CFMEU and the TRA permit.

[61] I determine that Mr Kong’s entry permit should be revoked and that the issue of a new permit be banned for a period of two years from the date of orders arising from this decision.

Mr O’Brien

[62] In these proceedings, I found that Mr O’Brien misused his right of entry on one occasion, at the Queensland Children’s Hospital Academic & Research Facility in Brisbane on 10 July 2014.

[63] The Director outlined further past conduct involving Mr O’Brien. 14 The Director also advised that Mr O’Brien is involved in a pending matter, in respect of industrial action on the Arena Apartments site.

[64] At the hearing on 23 July 2015, counsel for the CFMEU advised that Mr O’Brien is no longer an official of the CFMEU. The Director notes that as such, his permit automatically expired pursuant to s.516(1) of the Act.

[65] The Director submits that although Mr O’Brien does not appear to hold a permit any longer, a banning order should be made for two years from the date of Order.

[66] As Mr O’Brien is no longer an official of the CFMEU I do not propose to make any orders with respect to further permits which may be sought in some future capacity.

Mr Graauwmans

[67] In these proceedings Mr Graauwmans was found to have misused his right of entry on three sites, all on 1 April 2014. The sites included the Monash University Green Chemicals Futures Building, Telstra New Data Centre and Monash Health Translation Precinct.

[68] The Director notes that Mr Graauwmans is a Branch Council Member, Geelong Zone, in the Victoria/Tasmania Divisional Branch, and a Divisional Conference Delegate for Victoria.

[69] The Director gave details of previous cases involving Mr Graauwmans which were taken in to consideration by the Delegate when deciding whether to grant Mr Graauwmans an entry permit. 15

[70] The Delegate imposed the following limiting condition:

“If any findings made or penalties imposed that are relevant to the permit qualification matters at s.513(1)(a)-(f) of the Fair Work Act 2009, or proceedings commenced that may lead to findings made or penalties imposed that are relevant to the permit qualification matters at s.513(1)(a)-(f) of the Fair Work Act 2009, then the permit holder is to notify the Fair Work Commission within 2 weeks of the finding being made, the penalty imposed or the proceeding commenced. See decision [2013] FWCD 452 issued on 25 March 2013.”

[71] The permit held by Mr Graauwmans is due to expire on 19 April 2016. The Director submits that this permit be suspended until expiry and a ban then imposed on the issue of a new permit until 6 months from the date of Order. He submits that the Conditions referred to below should then be imposed for the next six months.

[72] In my view it would be appropriate to consider the circumstances of Mr Graauwmans’ prior conduct in the context of his application for a new permit. That consideration should include a full review of his conduct over previous years and the appropriateness of future conditions on the issue of his permit.

Mr Long

[73] In these proceedings, Mr Long has been found to have misused his right of entry on six occasions between 21 January and 20 May 2014 on three sites.

[74] The Director notes that Mr Long was at the time and is currently a member of the Branch Management Committee of the Victoria/Tasmanian Divisional Branch of the CFMEU.

[75] The Director gave details of a previous proceeding involving Mr Long, which he submits is relevant to determining the consequences of the findings in these proceedings. 16

[76] The Director notes that Mr Long’s permit expires on 20 May 2018. The Director submits that it should be suspended for 12 months.

[77] In my view the conduct of Mr Long should not be without consequences. I propose to order that his permit be suspended for a period of twelve months from the date of orders arising from this decision.

Restrictions on the CFMEU

[78] The Director submits that in respect of individual respondents, the CFMEU ought not be able to apply under s.512 of the Act for an entry permit for an individual where the issue of that permit would have the effect of undermining an order for the suspension or revocation of that individual’s permit. The Director submits that such a ban on the CFMEU can be imposed under s.508(2)(e), and is akin to a ‘ban period’ under s.510(4).

[79] Apart from the individual respondents, the Director seeks that restrictions be imposed against the CFMEU itself, which was found to be involved in the misuse of rights in relation to entry permits held by its officials.

[80] The Director submits that the issue of entry permits on the application of the CFMEU under s.512 of the Act should be subject to conditions under s.508(2)(e) for 12 months in relation to any official of its Construction and General Division from the Victoria/Tasmania Divisional Branch or the Queensland/Northern Territory Divisional Branch.

[81] The Director submits that the same 12-month conditions should be imposed on the CFMEU, Industrial Union of Employees, Queensland (the TRA). The Director submits that although there are no findings of misuse against this organisation, any unconditional permits issued on the application of the TRA would subvert the purpose of restrictions imposed on the CFMEU.

[82] The Director submits that in dealing with these instances of misuse of rights under Part 3–4 of the Act, the Commission should take into account the context of the behaviour of the Construction & General Division of the CFMEU, particularly in Queensland and Victoria, which, it submits, has evidenced a general culture of non-compliance with industrial laws in the construction industry.

[83] The Director points to a number of judicial comments as to the pattern of lawless behaviour of the CFMEU over the past 15 years. 17

[84] The Director submits that the relevant parts of the CFMEU cannot expect to continue to enjoy the privileges of the right of entry system under Part 3–4 if its officials do not accept the attendant responsibilities of permit holders.

[85] The Director submits that the Commission can have no confidence that the permit holders will be encouraged by the CFMEU hierarchy in Queensland and Victoria to exercise their entry powers properly and in accordance with Part 3–4 of the Act. It notes that Mr Ingham, Mr Long and Mr Graauwmans each held official positions in the CFMEU according to the CFMEU’s 2014 and 2015 Annual Returns. It notes that there are 21 CFMEU officials who no longer have entry permits, most of who are in Victoria. It states that those CFMEU officials are apparently able to carry out their functions outside the right of entry system altogether. Generally they are still employed by the CFMEU.

[86] The Director submits that power to impose conditions on entry permits set out in s.508(a) and (d) is not confined to the permits of individual respondents.

[87] It submits that it addition to the regime under the Consent Order in the Lend Lease dispute proceedings, the Director seeks an order that conditions be imposed on all CFMEU entry permits issued and to be issued to officials of the Queensland/NT Divisional Branch or the Victoria/Tasmania Divisional Branch of the Construction and General Division of the CFMEU.

[88] The conditions sought are as follows, which the Director submits should be imposed for 12 months from the date of Order:

“That, for a period of 12 months from the date of this Order, there be conditions imposed on each of the permits issued or to be issued during that period to an official of the Queensland/Northern Territory Divisional Branch or the Victoria/Tasmania Divisional Branch of the Construction & General Division of the CFMEU, that:

a) if a proposed entry in Queensland or Victoria is for a purpose described in Subdivisions A and B of Division 2 of Part 3-4 of the Act, the permit holder must give the site manager of the occupier of the relevant site at least 24 hours' (but no more than 14 days') written notice of an intended site entry:

i. in the form of an entry notice consistent with the provisions of the Regulations under the Act;

ii. which specifies: the particular suspected contravention or purpose for which the entry is sought; the time at which the entry is sought; and all employers to which the proposed entry will relate; and

iii. give a copy of the notice to the Director at the same time as it is given to the site manager of the occupier of the site.

b) if a proposed entry in Queensland or Victoria is for the purpose of inquiring into a suspected contravention or contraventions of the relevant State OHS legislation, the permit holder must give the occupier 24 hours' written notice except where the permit holder has a reasonable concern that (a) there has been or is contravention of the relevant OHS legislation and (b) that contravention gives rise to a serious risk to the health or safety of a person emanating from an immediate or imminent exposure to a hazard.

c) the permit holder shall only enter a building or construction site in Queensland or Victoria after:

i. wearing all personal protective equipment required at that site,

ii. presenting at the site office and waiting for an escort to arrive,

iii. identify himself, including providing his full name,

iv. signing his name in the visitors' book.

d) the permit holder shall not enter a building or construction site in the company of, or in concert with, a CFMEU official or employee who does not hold an entry permit;

e) in the event of unauthorised entry, the permit holder shall leave the site immediately upon the request of an agent of the occupier;

f) the permit holder shall, whilst on any such site in Queensland or Victoria:

i. carry, and provide for inspection on request by the occupier, his entry permit and a copy of the entry notice;

ii. be accompanied by a representative of the occupier of the site at all times and comply with the instructions given by that escort; and

iii. ensure that any discussions with employees are held during designated breaks.

g) If any findings are made or penalties imposed that are relevant to the permit qualification matters at s.513(a)-(f) of the Fair Work Act 2009, or proceedings commenced that may lead to findings made or penalties imposed that are relevant to the permit qualification matters at s.513(a)-(f) of the Fair Work Act 2009, then the permit holder is to notify the Fair Work Commission within 2 weeks of the finding being made, the penalty imposed or the proceeding commenced.”

(citations omitted)

[89] The Director notes that these conditions are based on the conditions imposed by Senior Deputy President O’Callaghan in Re Fair Work Commission. 18

[90] The Director submits that those conditions should not be confined to the individual respondents, nor confined to Lend Lease sites. It submits that the need to protect head contractors from misuse is not confined to Lend Lease, just because all of the instances of misuse in these proceedings occurred on Lend Lease sites.

[91] The Director contends if conditions are imposed on Victoria and Queensland, then training in respect of the implementation of those conditions might be appropriate.

[92] The CFMEU submits that some of the conditions proposed are impracticable and unreasonable.

[93] The CFMEU submits that clause (a) of the proposed conditions departs from the requirements of the Act without sufficient explanation. It submits that the requirement to give notice to the ‘site manager of the occupier’, as opposed to ‘the occupier’ as prescribed in s.487(1)(a) of the Act is unnecessary and unreasonable. It submits that the permit holder may not know or be able to reasonably find out the identity of a particular site manager prior to entry, and it would be more difficult, and perhaps impossible, for a permit holder to comply with this requirement rather than the requirement in the Act.

[94] In relation to clause (a)(ii) of the proposed conditions, the CFMEU submits that the requirement that the written notice of intended entry specify ‘all employers to which the proposed entry will relate’ is unnecessary and unreasonable. It submits that on a large number of construction or building site there are likely to be a large number of employers present and it is unlikely that a permit holder will have knowledge of the identify of all employers present on a site, particularly prior to entry. If the permit holder wishes to engage in discussions with members or potential members in accordance with s.484 of the Act, the permit holder should not be limited to discussions with those employees of employers identified in advance of entry.

[95] Further in relation to clause (a)(ii) of the proposed conditions, the CFMEU notes that the entry notice must specify the time of entry. The CFMEU submits that this would enable an occupier or employer to alter break times so as to ensure that employees are not available to speak to the permit holder during their breaks, should an occupier or employer wish to defeat the purpose of the entry. It submits that this requirement does not meet the balance referred to in the Act.

[96] In relation to clause (c) of the proposed conditions, the CFMEU notes that should the occupier decline to provide an escort, or unreasonably delay in providing an escort, the permit holder arguably would not be permitted to enter the site. It submits that presumably this would apply even in cases where the permit holder holds concerns in respect of an imminent risk to health and safety. The CFMEU submits that this requirement is unnecessary and unreasonable, and may put the health and safety of construction workers at risk.

[97] In relation to the requirement in clause (e) that the permit holder leave the site immediately in the event of an unauthorised entry, the CFMEU submits that there may be a dispute between the permit holder and the occupier as to whether an entry is or is not authorised which would be problematic.

[98] The CFMEU submits that the requirement contained in clause (f)(ii) of the proposed conditions is oppressive and unreasonable. It notes that the proposed condition does not specify that the ‘instructions’ referred to are to be lawful or reasonable. The CFMEU submits that on the face of the condition, if the permit holder fails to comply with an unreasonable instruction, the permit holder would be in breach of the condition and be exposed to the imposition of penalty.

[99] The CFMEU submits that further, it is inappropriate to require an escort to be present during discussions between the permit holder and CFMEU members and potential members. It contends that the presence of the escort, who is likely to be a supervisor or manager of the occupier, would likely have the effect of intimidating workers who might participate in the discussions, or discouraging workers from participating in the discussions. It submits that such a condition again does not meet the balance referred to in s.480 of the Act.

[100] In relation to clause (f)(iii), the CFMEU submits that there is no reason that discussions in respect of suspected safety contraventions or contraventions of the Act or a Fair Work Instrument should be restricted to designated break times.

[101] The CFMEU raises concerns about the practicable administration of the Commission imposing conditions on all permits ‘issued or to be issued’ to an official of the Queensland/NT Branch or the Victoria/Tasmanian Branch of the CFMEU for a period of 12 months from the date of the proposed order, because of the requirements of ss.515(3) and (4) and 517(1).

[102] The CFMEU states that if it understands the orders sought correctly, on the making of the order, all permits held by officials of the Queensland/Northern Territory Branch and the Victoria/Tasmania Branch of the CFMEU would simultaneously cease to be in force, and would be required to be returned within 7 days. The CFMEU submits that there would likely be a delay before the Commission could record the conditions on a large number of permits and return the permits to the permit holders. During this period, the entire Queensland/Northern Territory Branch and the Victoria/Tasmania Branch of the CFMEU would be unable to exercise entry rights. The CFMEU submits that this is not in accordance with the balance referred to in s.480 of the Act.

[103] The CFMEU submits that the Commission should refrain from making any orders.

[104] In response to the CFMEU’s concerns about the proposed conditions, the Director notes that many of the conditions are similar to that contained in the Order of Senior Deputy President O’Callaghan.

[105] In relation to the CFMEU’s specific concern about clause (a), the Director has no objection to the deletion of the words ‘the site manager of’ in that clause.

[106] In relation to the condition sought at (a)(ii), the Director accepts that the requirement to notify affected employers could be confined to entry under Subdivision A of Division 2 of Part 3–4 of the Act—in accordance with s.487(1)(a) of the Act.

[107] In relation to the CFMEU’s submissions concerning the requirement to specify the time of proposed entry, the Director submits that the work of subcontractors on a building site is highly programmed and the Director considers that specification of the time of entry is not unreasonable and would minimise disruption to the site.

[108] In relation to the CFMEU’s submissions concerning the requirement for an escort, the Director submits that this is important for control of the site, and in particular, from a safety viewpoint, the escort would be familiar with specific site safety requirements. The Director notes that a large number of misuses in these proceedings arose from permit holders entering a site unannounced and unescorted, which is disruptive.

[109] In reply to the CFMEU’s submissions that permit holders may hold differing views concerning whether entry is authorised on unauthorised, the Director accepts this, but notes that in most of the entries in these proceedings the lack of authority was clear, for instance there had been no entry notice, the occupier had asked the official to leave the premises, the police were called, et cetera. The Director submits that the condition in (e) is directed towards avoiding these types of situations.

[110] In response to the CFMEU’s submissions regarding following instructions, the Director notes that occupiers must comply with s.502 which provides that a person must not intentionally hinder or obstruct a permit holder exercising rights in accordance with Part 3–4, which its submits should allay the CFMEU’s concerns.

[111] In reply to the CFMEU’s submissions concerning the attendance of management at meetings, the Director submits that a permit holder does not have under the Act a right to exclude management from discussions with workers. Management frequently chooses not to attend – which can still happen under the conditions sought.

[112] In response to the CFMEU’s submissions that there is no reason that discussions in respect of suspected safety contraventions or contraventions of the Act or a Fair Work Instrument should be restricted to designated break times, the Director submits that to the extent that this condition is stricter than required by OHS legislation, this is a consequence of misuse.

[113] In reply to the CFMEU’s submissions concerning the administrative difficulties associated with imposing conditions on all permits of officials of the Queensland/NT Divisional Branch and the Victoria/Tasmania Divisional Branch of the Construction & General Division of the CFMEU, the Director states this did not preclude the Commission from taking similar action in a previous matter, concerning CFMEU permit holders in South Australia. 19

[114] Having regard to the matters raised I consider that it is appropriate to make an order regarding the future issue of permits with respect to the relevant branches of the CFMEU. I have modified the terms of the conditions in certain respects. Nevertheless for the most part the conditions reflect existing legal obligations. The imposition of conditions of this type should enhance the prospects of adherence to the legislative requirements in the future. To ensure that these conditions are not circumvented I will also impose the conditions on the TRA. I am mindful of the practical difficulties in giving effect to the application of these conditions. I therefore propose to issue orders in relation to this decision 7 days after the date of this decision. I apprehend that the additional time thereby provided will enable the ready exchange of permits by the compliance branch of the General Manager’s Office, staged if necessary to ensure that appropriate rights are maintained in the changeover period. The terms of the order I propose to make will be as follows:

For a period of 12 months from the date of this Order, there be conditions imposed on each of the permits issued or to be issued during that period to an official of the Queensland/Northern Territory Divisional Branch or the Victoria/Tasmania Divisional Branch of the Construction & General Division of the CFMEU, or The Construction, Forestry, Mining & Energy, Industrial Union of Employees, Queensland, that:

1. if a proposed entry in Queensland or Victoria is for a purpose described in Subdivisions A and B of Division 2 of Part 3-4 of the Act, the permit holder must give the occupier of the relevant site at least 24 hours' (but no more than 14 days') written notice of an intended site entry:

i. in the form of an entry notice consistent with the provisions of the Regulations under the Act;

ii. which specifies: the particular suspected contravention or purpose for which the entry is sought; the time at which the entry is sought; and for an entry to hold discussions with employees, all employers to which the proposed entry will relate; and

iii. give a copy of the notice to the Director at the same time as it is given to the site manager of the occupier of the site.

2. if a proposed entry in Queensland or Victoria is for the purpose of inquiring into a suspected contravention or contraventions of the relevant State OHS legislation, the permit holder must give the occupier 24 hours' written notice except where the permit holder has a reasonable concern that (a) there has been or is contravention of the relevant OHS legislation and (b) that contravention gives rise to a serious risk to the health or safety of a person emanating from an immediate or imminent exposure to a hazard.

3. the permit holder shall only enter a building or construction site in Queensland or Victoria after:

i. wearing all personal protective equipment required at that site,

ii. presenting at the site office and waiting for an escort to arrive,

iii. identifying himself, including providing his full name,

iv. signing his name in the visitors' book.

4. the permit holder shall not enter a building or construction site in the company of, or in concert with, a CFMEU official or employee who does not hold an entry permit;

5. in the event of entry not in compliance with these conditions, the permit holder shall leave the site immediately upon the request of an agent of the occupier;

6. the permit holder shall, whilst on any such site in Queensland or Victoria:

i. carry, and provide for inspection on request by the occupier, his entry permit and a copy of the entry notice;

ii. comply with the lawful instructions given by a representative of the occupier; and

iii. ensure that any discussions with employees under s.484 are held during designated breaks.

7. If any findings are made or penalties imposed that are relevant to the permit qualification matters in s.513(a)-(f) of the Fair Work Act 2009, or proceedings commenced that may lead to findings made or penalties imposed that are relevant to the permit qualification matters at s.513(a)-(f) of the Fair Work Act 2009, then the permit holder is to notify the Fair Work Commission within 2 weeks of the finding being made, the penalty imposed or the proceeding commenced.

Conclusions

[115] For the above reasons I will make orders reflecting this decision seven days after the date of this decision. Those orders will include the revocations, suspensions, suspended suspensions, bans and permit conditions outlined in the text of this decision.

VICE PRESIDENT

Final written submissions:

FWBC on 15 January 2016.

CFMEU on 29 January 2016.

FWBC in reply on 5 February 2016.

 1   [2015] FWC 6889.

 2   Australian Building and Construction Commission [2007] AIRC 717, at [217].

 3   Australian Building and Construction Commission [2007] AIRC 717, at [221].

 4   Australian Building and Construction Commissioner [2009] AIRC 868, at [20]-[23].

 5   See CFMEU v Bechtel Constructions (Australia) Pty Ltd & Anor[2015] FWCFB 946 at [33].

 6   [2014] FWC 3907; PR551967.

 7   See, for example CFMEU – re application for a permit (for J. McDonald) PR935310, at [15].

 8   CFMEU and CFMEUQ [2015] FWC 4544, at [13] and [14].

 9   CFMEU and CFMEUQ [2015] FWC 4544.

 10   See Bechtel Construction (Australia) Pty Ltd v CFMEU[2014] FWC 5900; CFMEU v Bechtel Construction (Australia) Pty Ltd[2015] FWCFB 946; John Holland Pty Ltd v CFMEU [2013] FCA 1309.

 11   Final Report of the Royal Commission into Trade Union Governance and Corruption, volume 4, chapter 8.3.

 12   See Re CFMEU[2014] FWCD 1169; Director of the Fair Work Building Industry Inspectorate v CFMEU[2014] FWCFB 5947; John Holland Pty Ltd v CFMEU [2013] FCA 1309; Director of the Fair Work Building Industry Inspectorate v Bragdon [2015] FCA 668; Director of the Fair Work Building Industry Inspectorate v Bragdon (No 2) [2015] FCA 998.

 13   QUD257/2013.

 14   See Director, Fair Work Building Industry Inspectorate v Cradden [2015] FCA 614.

 15   See White v CFMEU [2011] FCA 192; Re CFMEU[2013] FWCD 452.

 16   See White v CFMEU [2011] FCA 192.

 17   See A & L Silvestri Pty Limited v Construction, Forestry, Mining and Energy Union [2008] FCA 466, Justice Gyles at [13]-[14]; Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426, Justice Tracey at [44]; Williams v Construction, Forestry, Mining and Energy Union and Mates (No 2) [2009] FCA 548, Justice Jessup at [29]; Draffin v CFMEU & Ors [2009] FCAFC 120, Justices Goldberg, Jacobson and Tracey at [70], [79], [92]; Draffin v CFMEU & Ors [2009] FCAFC 120, Justices Goldberg, Jacobson and Tracey at [70], [79], [92]; Cozadinos v CFMEU & Ors [2011] FMCA 284, Federal Magistrate Reithmuller at [18]; Hogan vJarvis [2012] FMCA 189, Federal Magistrate Burnett at [20]; Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2013] FCA 846, Justice Collier at [34]-[35]; Cozadinos v Construction, Forestry, Mining and Energy Union [2013] FCA 1243, Justice Tracey at [43]; Director of the Fair Work Building Industry Inspectoratev McDonald [2013] FCA 1431, Justice Barker at [73].

 18   [2014] FWC 3907; PR551967.

 19   PR551967.

Printed by authority of the Commonwealth Government Printer

<Price code C, PR576814>