Wotherspoon v CFMEU
[2010] FMCA 786
•11 October 2010
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| WOTHERSPOON v CFMEU & ORS | [2010] FMCA 786 |
| INDUSTRIAL LAW – Penalty hearing – unlawful building industrial action – admitted contraventions – considerations on penalty – agreed penalty. |
| Building and Construction Industry Improvement Act 2005 (Cth) s.38 Workplace Relations Act 1996 (Cth) s.719 |
| Minister for Industry, Tourism & Resources v Mobil Oil [2004] FCA FC 72 Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426 Leighton Contractors v Construction, Forestry, Mining and Energy Union (2006) 164 IR 375 Temple v Powell (2008) 169 FCR 169 Stuart v L.U. Simon Builders Pty Ltd [2008] FCA 107 Wells v Locarno Management Pty Ltd [2008] FCA 1034 Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 Construction Forestry Mining & Energy Union v Coal & Allied Operations Pty Ltd (No.2) (1999) 94 IR 231 Australian Ophthalmic Supplies Pty Limited v McAlary-Smith (2008) 165 FCR 560 Stuart v Construction, Forestry, Mining and Energy Union [2010] FCAFC 65 |
| Applicant: | JOHN MARK WOTHERSPOON |
| First Respondent: | CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
| Second Respondent: | MATTHEW HUDSON |
| Third Respondent: | SHAUN REARDON |
| File Number: | MLG1541 of 2009 |
| Judgment of: | O'Sullivan FM |
| Hearing date: | 11 October 2010 |
| Date of Last Submission: | 11 October 2010 |
| Delivered at: | Melbourne |
| Delivered on: | 11 October 2010 |
REPRESENTATION
| Counsel for the Applicant: | Mr M. Biviano |
| Solicitors for the Applicant: | Lander & Rogers |
| Counsel for the First, Second and Third Respondents: | Ms E. Walters |
| Solicitors for the First, Second and Third Respondents: | Construction, Forestry, Mining and Energy Union |
DECLARATION AND ORDERS
It is declared that the First Respondent contravened section 38 of the Building and Construction Industry Improvement Act 2005 (Cth) (“the BCII Act”) on 1 April 2009 and the First Respondent is ordered to pay a penalty to the Consolidated Revenue Fund in the amount of $22,500 within 30 days.
It is declared that the Second Respondent contravened section 38 of the BCII Act on 1 April 2009 and the Second Respondent is ordered to pay a penalty to the Consolidated Revenue Fund in the amount of $2,500 within 30 days.
It is declared that the Third Respondent contravened section 38 of the BCII Act on 1 April 2009 and the Third Respondent is ordered to pay a penalty to the Consolidated Revenue Fund in the amount of $2,500 within 30 days.
The proceedings be otherwise dismissed and removed from the Pending Cases List.
There be no order as to costs.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
MLG1541 of 2009
| JOHN MARK WOTHERSPOON |
Applicant
And
| CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
First Respondent
| MATTHEW HUDSON |
Second Respondent
| SHAUN REARDON |
Third Respondent
REASONS FOR JUDGMENT
(Revised from transcript)
John Wotherspoon (“the applicant”) is an inspector appointed pursuant to s.57 of the Building and Construction Industry Improvement Act 2005 (“the BCII Act”). On 1 December 2009 the applicant commenced these proceedings against the Construction Forestry, Mining and Energy Union (“the first respondent”), Matthew Hudson (“the second respondent”) and Shaun Reardon (“the third respondent”).
The applicant alleged conduct in breach of the BCII Act by the respondents at a building site at the Walter & Eliza Hall Institute in Victoria on 1 April 2009.
After the application was filed the matter was listed for a directions hearing which was adjourned by consent until 11 June 2010.
By the time the matter returned to Court the parties had attended mediation. Further orders and directions were made at a directions hearing on 11 June 2010 and again at another directions hearing on |
12 July 2010. At the most recent directions hearing and as a result of an agreement arrived at in the mediation the matter was fixed for a penalty hearing on 11 October 2010.
The parties then filed a Statement of Agreed Facts which is Annexure A to these reasons on 24 June 2010 (“S.O.A.F”).
Both parties filed submissions as contemplated by the abovementioned orders. The applicant filed submissions on 26 July 2010 and the respondents on 7 October 2010.
At the penalty hearing, the applicant was represented by Mr Biviano of Counsel, and the respondents by Ms Walters.
The applicant relied on the S.O.A.F and the submissions referred to above as did the respondents. The applicant tendered, without objection, a table of ‘Prior Penalties and Declarations.’[1] The parties also tendered a minute embodying an agreed form of proposed declarations and orders.[2]
[1] Exhibit A1
[2] Exhibit A2
The application
The application as filed on 1 December 2009 sought the following orders:
“1.A declaration that each of the First Respondent, the Second Respondent and the Third contravened section 38 of the Building and Construction Industry Improvement Act 2005 (Cth) (BCII Act) by engaging in unlawful industrial action constituted by a failure or refusal by employees engaged at the Walter and Eliza Hall Institute site located at 1G Royal Parade, Parkville, Victoria to attend for and/or perform building work from the time they stopped work at the site between 11.00am on 1 April 2009 to 7.00am on 2 April 2009.
2.A declaration that pursuant to section 48 BCII Act, the First Respondent has contravened section 38 of the BCII Act by either aiding, abetting, counselling procuring, inducing, being directly or indirectly, knowingly concerned in or a party to or conspiring with others, namely the Second Respondent, the Third Respondent, and/or the CFMEU members, in unlawful industrial action constituted by a failure or refusal by employees engaged at the Walter and Eliza hall Institute site located at 1G Royal Parade, Parkville, Victoria to attend for and/or perform work from the time they stopped work at the site between 11.00 an on 1 April 2009 to 7.00am on 2 April 2009.
3.A declaration that pursuant to section 48 BCII Act, the Second and Third Respondents have contravened section 38 of the BCII Act by either aiding, abetting, counselling, procuring, inducing, being directly or indirectly, knowingly concerned in or a party to or conspiring with others, namely the First Respondent, and/or the CFMEU members, in unlawful industrial action constituted by a failure or refusal by employees engaged at the Walter and Eliza Hall Institute site located at 1G Royal Parade, Parkville, Victoria to attend for and/or perform building work from the time they stopped work at the site between 11.00am on 1 April 2009 to 7.00am on 2 April 2009.
4.The imposition upon the First Respondent of a penalty or penalties for each contravention of section 38 of the BCII Act.
5.The imposition upon the Second and Third Respondents of a penalty or penalties for each contravention of section 38 of the BCII Act.
6.A declaration pursuant to section 719 Workplace Relations Act 1996 (Cth) (WR Act) that the First Respondent breached each of the following certified agreements.
(a)The Hooker Cockram Projects Ltd and the CFMEU Building and Construction Industry Enterprise Agreement 2005-2008.
(b)The Central Scaffolding Pty Ltd and the CFMEU Building and Construction Industry Enterprise Agreement 2005-2008.
(c)The Delta Pty Ltd and CFMEU Building and Construction Industry Collective Bargaining Agreement 2005-2008.
(the Collective Agreements)
by:
a.not seeking to resolve the dispute in accordance with the dispute resolution procedure contained at paragraph 10.2 of each of the agreements and failing to refer the mater Victorian Building Industry Disputes Panel; and
b.engaging in unlawful industrial action, stoppages and bans, constituted by a failure or refusal by employees and workers engaged at the Walter and Eliza Hall Institute site located at 1G Royal Parade, Parkville, Victoria to attend for and/or perform work from the time they stopped work at the site between 11.00 am on 1 April 2009 to 7.00 am on 2 April while the dispute was not resolved.
7.A declaration that pursuant to section 727 WR Act, the Second and Third Respondents have contravened section 719 of the WR Act by either aiding, abetting, counselling, procuring, inducing, being directly, or indirectly, knowingly concerned in or a party to or conspiring with others, namely the First Respondent, in contravening section 719 of the WR Act and the Collective Agreements by:
(a)not seeking to resolve the dispute in accordance with the dispute resolution procedure contained at paragraph 10.2 of each of the agreements and failing to refer the matter Victorian Building Industry Disputes Panel; and
(b)engaging in unlawful industrial action, stoppages and bans, constituted by a failure or refusal by employees and workers engaged at the Walter and Eliza Hall Institute site located at 1G Royal Parade, Parkville, Victoria to attend for and/or perform building work from the time they stopped work at the site between 11.00am on 1 April 2009 to 7.00am on 2 April 2009 while the dispute was not resolved.
8.The imposition upon the First Respondent of a penalty or penalties for each contravention of section 719 of the WR Act.
9.The imposition upon the Second and Third Respondents of a penalty or penalties for each contravention of section 719 of the WR Act.
10.An order that any penalty or penalties be payable into the Consolidated Revenue Fund.
11. An order for costs.”
Background
The proceedings are brought in respect of events that occurred on and after April Fools Day in 2009.
There was agreement on formal matters such as the applicant’s ability to bring these proceedings, the status of the respondents under the BCII Act and that the second and third respondents’ at all relevant times were acting in their capacity as officers of the first respondent.[3]
[3] see para 2 of respondents submissions
The Statement of Agreed Facts (“S.O.A.F”) and the abovementioned submissions make clear the respondents made certain admissions,[4] the parties have an agreed position on penalty and the Court was only asked to consider what penalties should be imposed on the respondents for reasons that will become clear presently.
[4] see also para 4 of respondents submissions
The following summary, which is taken from the S.O.A.F, is necessary to understand the position of the parties on the appropriate penalties.
In 2009 Hooker Cockram Projects Pty Ltd (ACN 004 799 508) (“Hooker Cockram”) was the head contractor for a project at the Walter Eliza and Hall Institute Enabling Works Project in Parkville, Victoria. (“the Site”).
Hooker Cockram engaged Central Scaffolding Pty Ltd (ACN 094 837 108) and Delta Pty Ltd (ACN 007 069 794) to carry out work at the Site and they each engaged employees eligible to be members of the first respondent at the Site (“the employees”).
On the morning of 1 April 2009 the second and third respondents attended the Site without prior notification purportedly about non-payment of height allowance at the Site. Meetings were held by the second and third respondent with the employees at the Site.
At that meeting the second and third respondent arranged a stop work on the Site. The employees were encouraged and directed not to perform any work on the Site between 11.00am and 11.30 am on
1 April 2009. Following that meeting the employees stopped work, left the Site and did not return until the next day.
The relevant provisions of the BCII Act
Section 38 of the BCII Act provides:
“A person must not engage in unlawful industrial action. Grade A civil penalty.”
“[U]nlawful industrial action” is described in s.37 of the BCII Act as follows:
Building industrial action is unlawful industrial action if:
(a) the action is industrially-motivated; and
(b) the action is constitutionally-connected action; and
(c) the action is not excluded action.”
The expression “building industrial action” is defined in s 36(1) of the BCII Act to mean:
“(a)the performance of building work in a manner different from that in which it is customarily performed, or the adoption of a practice in relation to building work, the result of which is a restriction or limitation on, or a delay in, the performance of the work , where: (i) the terms and conditions of the work are prescribed, wholly or partly, by an industrial instrument or an order of an industrial body; or (ii) the work is performed, or the practice is adopted, in connection with an industrial dispute (within the meaning of subsection (4)); or
(b)a ban, limitation or restriction on the performance of building work, or on acceptance of or offering for building work, in accordance with the terms and conditions prescribed by an industrial instrument or by an order of an industrial body; or
(c)a ban, limitation or restriction on the performance of building work, or on acceptance of or offering for building work, that is adopted in connection with an industrial dispute (within the meaning of subsection (4)); or
(d)a failure or refusal by persons to attend for building work or a failure or refusal to perform any work at all by persons who for building work;
but does not include:
(e)action by employees that is authorised or agreed to, in advance and in writing, by the employer of the employees; or
(f)action by an employer that is authorised or agreed to, in advance and in writing, by or on behalf of employees of the employer; or
(g) action by an employee if:
(i)the action was based on a reasonable concern by the employee about an imminent risk to his or her heath or safety; and
(ii)the employee did not unreasonably fail to comply with a direction of his or her employer to perform other available work, whether at the same or another workplace, that was sage for the employee to perform;
Note: See also subsection (2), which deals with the burden of proof of the exception in paragraph (g) of this definition.”
Section s.69 of the BCII Act provides:
(1)For the purposes of this Act, the following conduct in relation to a building association is taken to be conduct of the building association:
(a)conduct of the committee of management of the association;
(b)conduct of an officer or agent of the association acting in that capacity;
(c)conduct of a member, or group of members, of the association where the conduct is authorised by:
(i) the rules of the association; or
(ii) the committee of management of the association; or
(iii) an officer or agent of the association acting in that capacity;
(d)conduct of a member of the association, who performs the function of dealing with an employer on behalf of the member and other members of the association, acting in that capacity.
(2) Paragraphs (1)(c) and (d) do not apply if:
(a)a committee of management of the building association; or
(b) a person authorised by the committee; or
(c)an officer of the industrial association; has taken reasonable steps to prevent the action.
(3) In this section:
officer, in relation to a building association, includes:
(a)a delegate or other representative of the association; and
(b) an employee of the association.
The maximum penalties for a contravention of s.38 of the BCII Act are $22,000 for an individual and $110,000 for an organisation.
Contraventions
As noted above the parties filed the S.O.A.F which relevantly for present purposes set out that on 1 April 2009:
“8.On the morning of 1 April 2009, Tony Hudson, Site Manager of Hooker Cockram (Tony) and Reg Pyle, OHS representative on the site for Hooker Cockram (Pyle) were working on the site.
9.At about 10.30 am on 1 April 2009, M.Hudson and Reardon attended the site without prior notification to Hooker Cockram and spoke to Pyle in Pyle’s office.
11.After the Hooker Cockram meeting, at about 10.45 am that day both M.Hudson and Reardon arranged and held a stop work meeting on site with the workers at the site in an area known as the triangle - which was a triangle shaped area at the top of the site near the entrance into the site (the CFMEU stop work meeting).
12.The CFMEU stop work meeting was attended by approximately 14 workers who were either members of the CFMEU or eligible to be members of the CFMEU (“the employees”).
13. During the CFMEU stop work meeting;
(a)The employees expressed to Hudson and Reardon their dissatisfaction at not being paid the appropriate height allowance.
(b)both M. Hudson and Reardon encouraged, persuaded, recommended, endorsed and/or directed the employees:-
(i) not to perform any further work at the site; and
(ii) to leave the site immediately (the direction).
14.At all material times the direction was not retracted by M. Hudson or Reardon or any other person and Hooker Cockram was not informed or given notice of the direction.
15.By reason of the direction, after the conclusion of the CFMEU stop work meeting the employees did not perform any work on the site from between 11.00am and 11.30am on the 1 April 2009 and for the remainder of that day.”
As is clear from the S.O.A.F it is acknowledged by the respondents that:
“16.The CFMEU stop work meeting and the CFMEU ban disrupted the performance of work at the site.
17.The actions of M. Hudson, Reardon and the CFMEU, in respect of:
(a) the CFMEU stop work meeting;
(b) the direction; and/or
(c)the CFMEU ban constituted building industrial action within the meaning of that term in s.36 of the BCII Act (the building industrial action).
…
20. By reason of the building industrial action being:
(a) industrially-motivated action;
(b) constitutionally-connected action; and
(c)action that was not excluded action – the building industrial action constituted unlawful industrial action within the meaning of that term in s.37 of the BCII Act (unlawful industrial action).
21.By reason of each of the acts of the building industrial action being unlawful industrial action and the operation of s. 69 BCII Act:
(a)both M.Hudson and Reardon have each committed a single contravention s.38 of the BCII Act; and
(b)the CFMEU has committed a single contravention of s.38 of the BCII Act.”
Approach to penalty proceedings
The factors relevant to a penalty for a contravention of the BCII Act have been set out in a number of decisions of the Federal Court such that the factors which are to be considered in relation to penalty are now well established; see, eg, Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426 per Tracey J at [40]. The relevant considerations include:
·the nature and extent of the conduct which led to the breaches.
·the circumstances in which that relevant conduct took place.
·whether or not the breaches were deliberate.
·the nature and extent of any loss or damage sustained as a result of the breaches.
·whether there had been similar previous conduct by the respondent.
·whether the breaches were properly distinct or arose out of the one course of conduct.
·whether the party committing the breach had exhibited contrition.
·whether the party committing the breach had cooperated with the enforcement authorities.
·whether the party committing the breach had taken corrective action.
·the need for specific and general deterrence.
In submissions the parties took the Court to a number of decisions of the Federal Court where the approach to these sorts of proceedings has been considered.[5] In particular the applicant’s submissions noted:
[5] see for example para 12-15 of the respondents submissions
“12.In Leighton Contractors v Construction, Forestry, Mining and Energy Union, Le Miere J made the following comments when dealing with contraventions of the BCII Act:
[58] Contraventions of the Act, whether by individuals or organisations, are always to be treated as a serious matter. The main object of the Act is 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.
13.In Stuart-Mahoney v Construction, Mining and Energy Union Tracey J observed as follows:
…in light of the statutory purposes of the BCII Act, the need for general deterrence for contraventions of the BCII Act is particularly strong. Penalties must be imposed at a meaningful level of they are to serve as a general deterrent to others who may be disposed to engage in proscribed conduct.
14.Any penalty must nevertheless be proportionate to the conduct of the individual or organisation in contravention.”
As noted earlier the applicant had tendered a table marked as exhibit A1, but only for the purposes of assisting the Court in the task of determining whether the agreed penalty in this case was within the “permissible range.”
Of the matters set out in that table and as has been noted in other cases the Court should adopt a “cautionary approach” to “relevant prior records.”[6] However I note the basis upon which the exhibit was tendered and decisions of the Full Court make clear the task is for the Court to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations.[7]
[6] see CFMEU v Coal & Allied Operations Pty Ltd (No.2) (1999) 94 IR 231
[7] see Australian Ophthalmic Supplies Pty Limited v Mc Alary-Smith (2008) 165 FCR 560
Each of the parties had addressed what they contended were the relevant factors that should be considered in their written submissions[8] and it is to that stage that I now turn.
[8] see for example para 5-7 and paras 16-23 of the respondents submissions
Consideration of factors on penalty
The S.O.A.F sets out the background to and nature of the unlawful conduct (i.e. the contraventions). The details relevant to the first three of the abovementioned factors have already been set out above.
I accept the unlawful conduct whilst of limited duration (and there was no evidence of loss or damage) comprised each of the respondents being involved in:[9][9] see paras 5(a)-9 of the applicants submissions
“5.…
a)the performance of building work in a manner different from that in which it was customarily performed, or the adoption of a practice in relation to building work, the result of which was a restriction or limitation on, or delay in, the performance of work where:
i. the terms and conditions of the work are prescribed wholly or partly by industrial instruments; or
ii. the work was performed, or the practice was adopted, in connection with the industrial dispute;
b)a ban, limitation or restriction on the performance of building work, or on the acceptance or offering for building work, in accordance with the terms and conditions prescribed by the industrial instruments.
c)a ban, limitation or restriction on the performance of building work, or on the acceptance or offering for building work, that is adopted in connection with the industrial dispute; and/or
d)a failure or refusal by persons to attend for building work or a failure or refusal to perform any work at all by persons who attend for building work.
which constitutes building industrial action within the meaning of s.36 of the BCII Act.
6.The building industrial action was constitutionally-connected action within the meaning of s.36 of the BCII Act by reason of it satisfying all or, alternatively, at least one of the following conditions:
a)the action was taken by an organisation, namely, the First Respondent;
b)the action adversely affected a constitutional corporation in its capacity as a building industry participant, namely, Hooker Cockram, Delta and/or Central Scaffolding;
c)the action was taken in connection with the industrial dispute with respect of the payment of a height allowance; and/or
d)the action related to building work that was regulated by industrial instruments.
7.The building industrial action was industrially-motivated action within the meaning of s.36 of the BCII Act by reason of it being motivated by one or more of the following purposes, or by purposes which included one or more of the following purposes:
a)supporting or advancing claims against Hooker Cockram, Delta and/or Central Scaffolding in respect of the employment of employees of Hooker Cockram, Delta and/or Central Scaffolding;
b)advancing the industrial objectives of the First Respondent, namely, ensuring that workers working for Hooker Cockram, Delta and/or Central Scaffolding at the Site were paid a height allowance; and/or
c)disrupting the performance of the building work at the Site.
8.At all material times, the building industrial action was not excluded action within the meaning of that term in s.36 of the BCII Act.
9.By organising and conducting the CFMEU stop work meeting, the direction and the CFMEU Ban, each of the First Respondent, the Second Respondent and the Third Respondent have engaged in unlawful industrial action within the meaning of s.38 of the BCII Act.”
I note that whilst there have been previous findings against the first respondent there has been no evidence of any such finding against the second and third respondents.[10]
[10] see para 21 of the applicants submissions
In relation to prior contraventions the respondents made the following submission in relation to similar previous conduct:[11]
[11] see paras 17-19 of the respondents submissions
“17.The respondents submit the following principle should be applied in the Court’s consideration of prior contraventions:
(a)prior contraventions are relevant and may justify heavier sentence than may otherwise be imposed but, in the absence of statute, they cannot lead to the imposition of a penalty that is disproportionate to the gravity of the instant offence: see Veen v The Queen (No.2) [1988] 164 CLR 465 at 477-478;
(b)prior contraventions of a different statute and/or of a different character should not be considered as relevant prior contraventions or relevant prior conduct: see Leighton Contractors Pty Ltd & Anor v CFMEU (2006) 164 IR 375 at 390 and Stuart-Mahoney v CFMEU [2008] FCA 1426 at [44];
(c)prior contraventions of another autonomous division and/or branch of the first respondent should not be taken into account see Leighton Contractors Pty Ltd v CFMEU (2006) 164 IR 375 at 390 and Temple v Powell (2008) 173 IR 189 at [63];
(d)conduct engaged in prior 3 March 2008 and for which a contravention was not recoded until 3 March 2008, is not a prior contravention: see Alfred v Walter Construction Group Ltd [2005] FCA 497 at 13;
(e)If conduct prior 3 March 2008 for which a contravention was not recorded prior to 3 March 2008, is taken into account it is to be given less weight than a prior contravention: see R v McInerney (1986) 42 SASR 111 at 113 and 124;
(f)In relation to the second respondent, the only prior contraventions which are relevant are those which relate to his conduct, of which there are none.
18.In Leighton Contractors Pty Ltd v CFMEU (supra) the Supreme Court of Western Australian (sic) in fixing a penalty for unlawful industrial action in contravention of s38 of the BCII Act, was referred to eight proceedings against the CFMEU over the previous 6 years. The Supreme Court said at [67] that those contraventions were “of a different nature” than the contraventions then being considered and did not involve contraventions of the BCII Act. Having regard to the approach of the Federal Court in CFMEU v Coal & Allied Operations (No.2) (1999) 94 IR 231 at 232, “as the correct approach, the Supreme Court said at 390:
“It is not appropriate to consider all contraventions of any industrial legislation by any branch of the first defendant [the CFMEU] anywhere in Australia.”
and
“It is inappropriate to take into account of contraventions of different legislation it therefore appears that the relevant civil penalty contraventions for present purposes are any prior contraventions of the BCII Act…”
19. In Temple v Powell (Supra) Dowsett J at [63] said:
“The respondent submitted that in a large organisation such as the CFMEU, with autonomous state branches, it is not necessarily appropriate to treat conduct by all branches throughout the country as relevant past conduct for the purpose of fixing a penalty in connection with the unlawful conduct of one branch. There is substance in that submission.”
However, in Stuart v Construction, Forestry, Mining and Energy Union [2010] FCAFC 65 at para 76, Besanko and Gordon JJ said:
“76.It is not in dispute that the evidence disclosed that the CFMEU had a number of previous contraventions, some involving similar conduct which was unlawful under the BCII Act and its predecessors such as s170NC of the WR Act. Again, given the views we have formed about the other appeal grounds, it is sufficient for present purposes to note that we do not accept that the trial judge’s descriptions are an accurate reflection of the CFMEU’s previous contraventions. Those contraventions (by reference to date, unlawful conduct and relevant statutory framework) will be relevant matters in the re-exercise of the sentencing discretion.”
It is important that the Court have regard to the seriousness of the contravening conduct in this case, but also prior to examples of contravening behaviour particularly with respect to s.38 of the BCII Act.
I accept that the respondents have co-operated and made admissions thereby relieving the applicant of the effort and expense of a hearing on liability. I accept that the co-operation of the respondents and the agreed position of the parties evidenced an understanding and acknowledgment of the unlawful conduct.
Agreement on Penalty
It was the position of the parties before the Court[12] that having regard to the above mentioned matters, the matters in the S.O.A.F and the conduct involved in the contraventions that:
“22.In respect of penalties, the parties agree that appropriate penalties and orders to be made by the Court are as follows.
(a)The First Respondent pay to the Consolidated Revenue Fund by way of penalty for a contravention on 1 April 2009 of s.38 Building and ConstructionIndustry Improvement Act 2005 (Cth) the sum of $22,500 within 30 days.
(b)The Second Respondent pay to the Consolidated Revenue Fund by way of penalty for a contravention on 1 April 2009 of s.38 Building and ConstructionIndustry Improvement Act 2005 (Cth) the sum of $2,500 within 30 days.
(c)The Third Respondent pay to the Consolidated Revenue Fund by way of penalty for a contravention on 1 April 2009 of s.38 Building and ConstructionIndustry Improvement Act 2005 (Cth) the sum of $2,500 within 30 days.
[12] see for example para 4 of the respondents submissions
(d) The proceeding be otherwise dismissed.
(e) There be no order as to costs.[13]
[13] see paragraph 22 of S.O.A.F
The submissions filed on behalf of the parties helpfully summarised the principles which should be applied by the Court with respect to an agreed penalty. In submissions filed on behalf of the applicant it was contended as follows:
“23. The principles with respect to agreed penalty are that:-
a)in cases where parties have agreed on proposed penalties, the Court is not bound to impose those penalties but will do so if it is satisfied that the proposed penalties fall within “the permissible range”;[14]
b)in this respect, the “permissible range” of penalties refers to a range “which would be permitted by the Court, that is, a range within which the penalty is neither manifestly inadequate nor manifestly excessive”[15]
c)there is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy. Accordingly, when the regulator and contravener have reached agreement, they may present to the Court a statement of facts and opinions as to the effect of those facts, together with joint submissions as to the appropriate penalty to be imposed;[16]
d) the view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty;[17]
e) in determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case. Where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so;[18] and
f)where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court’s view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range.[19]”[20]
[14] Hills v Sutton (2007) 169 IR 327; [2007] FCA 2033 at [7] per Tracey J, Wells v Locarno
[15] Wells at [23] per Jessup J.
[16] Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at [53] per Branson, Sackville, & Giles JJ.
[17] see [53] of the Mobil case;
[18] see [53] of the Mobil case
[19] see [53] of the Mobil case
[20] see para 23 of applicant’s submissions, see also paras 8-11 of respondents submissions
In submissions filed on behalf of the respondents it was contended:[21]
“8.The respondents submit that the following sentencing principles should also inform the Court’s exercise of its discretion.
9.In NW Frozen Foods Pty Ltd v ACCC (1996) 71 FCR 285 the court noted that there is a public interest in promoting settlement of litigation and to this end parties may present to the Court joint submissions as to the recommended penalty to be imposed. Further Jessup J said in Wells v Locarno Management Pty Ltd [2008] FCA 1034 at 23:
‘The predictability involved in the resolution of penal proceedings in accordance with a pre-trial agreement reached by the parties is something which should as a matter of public policy be regarded as beneficial.’
10.The court is not bound to impose the recommended penalties proposed but should do so where the recommended sum is within the permissible range. [Minister for Industry, Tourism & Resources v Mobile Oil Australia Pty Ltd [2004] FCAFC 72 at 53].
11.The respondents submit the agreed sum is within the permissible range.”
[21] see paras 8-11 of the respondent’s submissions
As is clear from the above the parties had agreed on the quantum of the penalty they submitted the Court should impose. In submissions the applicant put the agreed position as follows:
“22.In all the circumstances, it is the joint submissions of the Applicant, the First Respondent, the Second Respondent and the Third Respondent that the appropriate quantum of penalty for this contravention is:
(a)$22,500 (10.22% of the maximum) for the First Respondent; and
(b)$2,500 (11.36% of the maximum) for each of the Second Respondent and the Third Respondent.”
Finally as noted earlier the parties tendered an agreed minute reflecting the appropriate declarations and orders.[22] As the Full Court noted in Stuart v Construction, Forestry, Mining and Energy Union [2010] FCAFC 65 at para 92, declarations of contraventions are necessary to set out the foundation for the pecuniary penalty.
[22] see Exhibit A2
Conclusion
I am prepared to accept the agreed position of the parties on penalty.
I am satisfied that the penalty is appropriate as it is neither manifestly inadequate nor manifestly excessive but within the permissible range. Moreover, and having regard to the S.O.A.F, the conduct involved (including any previous conduct) of the respondents, and all of the matters referred to above I am satisfied the proposed orders are appropriate.
Therefore, as the Court:
a)is directed by the relevant authorities to consider what is appropriate in all the circumstances of this case;[23] and
[23] see Construction Forestry Mining & Energy Union v Coal & Allied Operations Pty Ltd (No.2) (1999) 94 IR 231
b)in its discretion in relation to penalty is not fettered by a checklist of mandatory criteria:[24] and
[24] see Australian Ophthalmic Supplies Pty Limited v McAlary-Smith (2008) 165 FCR 560
c)notes the parties have filed the S.O.A.F and agreed on penalties which are within the permissible range for each offence;[25] and
[25] see Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543
d)is satisfied the agreed penalties are just and appropriate[26] and it is proper to make the orders sought;
[26] Ibid
there will be orders as set out at the beginning of these reasons for decision.
I certify that the preceding forty-two (42) paragraphs are a true copy of the reasons for judgment of O'Sullivan FM
Date: 11 October 2010
IN THE FEDERAL MAGISTRATES’ COURT
OF AUSTRALIA
VICTORIA DISTRICT REGISTRY No. MLG1541 of 2009
BETWEEN:
JOHN WOTHERSPOON
Applicant
and
CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION
First Respondent
and
MATTHEW HUDSON
Second Respondent
and
SHAUN REARDON
Third Respondent
STATEMENT OF AGREED FACTS
The Parties
1. The Applicant (Wotherspoon) is and was at all material times:-
(a)an Australian Building and Construction Inspector appointed pursuant to s.57 of the Building and Construction Industry Improvement Act 2005 (Cth) (the BCII Act); and
(b)a person eligible to bring proceedings for a contravention of a civil penalty provision of the BCII Act pursuant to s.49(6) of that Act; and
(c)is entitled to bring proceedings seeking declaratory relief and a penalty in the Federal Magistrates’ Court for a contravention of s.38 of the BCII Act pursuant to s.49(1) of that Act.
2.The First Respondent (the CFMEU) is and was at all material times:
(a)an organisation pursuant to the provisions of Schedule 1 of the Workplace Relations Act 1996 (Cth) (the WR Act);
(b)by reason of its being so registered, a body corporate capable of being sued in its own name pursuant to the WR Act;
(c) a person by reason of s.48(1) of the BCII Act;
(d)a building industry participant for the purposes of s.4 of the BCII Act; and
(e)a building association and an industrial association within the meaning of that term in s.4 of the BCII Act.
3.Both the Second Respondent (M.Hudson) and the Third Respondent (Reardon), each are and were at all material times:
(a) members of the CFMEU;
(b) employees of the CFMEU acting in that capacity;
(c)officers of the CFMEU acting within that capacity, namely, being a union official of the CFMEU; and
(d)building industry participants for the purposes of s.4 of the BCII Act.
Hooker Cockram and its subcontractors
4.Hooker Cockram Projects Pty Ltd (ACN 004 799 508) (Hooker Cockram) at all material times:
(a)was head contractor for the Walter Eliza and Hall Institute Enabling Works Project located at 1G Royal Parade, Parkville, Victoria, (the site), which required refurbishment work, demolition of existing buildings, bulk excavation and site retention works (the works);
(b)was a building employer, a building industry participant and a constitutional corporation within the meaning of that term in s.4 of the BCII Act; and
(c)was bound by the following industrial instruments regarding the performance of building work at the site:-
(i)the National Building and Construction Industry Award 2000 (NBC Award);
(ii)the National Building and Construction Industry Victorian Common Rule Declaration 2005 (which incorporates the terms (with minor exceptions) of the National Building and Construction Industry Award 2000) (NBC Declaration) ; and
(iii)the Hooker Cockram Projects Ltd and the CFMEU Building and Construction Industry Enterprise Agreement 2005-2008 (PR972448) (HCP Agreement).
5.Central Scaffolding Pty Ltd (ACN 094 837 108) (Central Scaffolding) at all material times:
(a)had been retained by Hooker Cockram to supply, erect and dismantle scaffolding at the site;
(b)was a building employer, a building industry participant, a building contractor, and a constitutional corporation within the meaning of that term in s.4 of the BCII Act; and
(c)was bound by the following industrial instruments regarding the performance of building work at the site:-
(i) the NBC Award;
(ii) the NBC Declaration; and
(iii)the Central Scaffolding Pty Ltd and the CFMEU Building and Construction Industry Enterprise Agreement 2005-2008 (PR966631) (CS Agreement).
6. Delta Pty Ltd (Delta) (ACN 007 069 794) at all material times:
(a)had been retained by Hooker Cockram to perform demolition and excavation work at the site;
(b)was a building employer, a building industry participant, a building contractor, and a constitutional corporation within the meaning of that term in s.4 of the BCII Act; and
(c)were bound by the following industrial instruments regarding the performance of building work at the site:-
(i) the NBC Award;
(ii) the NBC Declaration; and
(iii)the Delta Pty Ltd and CFMEU Building and Construction Industry Collective Bargaining Agreement 2005-2008 (PR946812) (DG Agreement).
The building work
7.At all material times, the building and construction work performed, or to be performed, at the site by Hooker Cockram, Central Scaffolding and Delta constituted building work within the meaning of that term in s.5 of the BCII Act (the building work).
The unlawful conduct - The stop work meeting
8.On the morning of 1 April 2009, Tony Hudson, Site Manager of Hooker Cockram (Tony) and Reg Pyle, OHS representative on the site for Hooker Cockram (Pyle) were working on the site.
9.At about 10.30 am on 1 April 2009, M.Hudson and Reardon attended the site without prior notification to Hooker Cockram and spoke to Pyle in Pyle’s office.
10. During the discussion between M.Hudson, Reardon and Pyle:-
(a)Tony entered into Pyle’s office and asked M.Hudson and Reardon why they were on site;
(b)M. Hudson said that he had attended the site having received complaints from members engaged on the site with respect to the non-payment of height allowance by their employers;
(c)Tony told M.Hudson and Reardon they were not supposed to be on site as they had not given notice and asked them to sign the visitor’s book; and
(d)M.Hudson said that he intended to hold a meeting with the workers to discuss the issue of height allowance as raised with him;
(e) (the Hooker Cockram meeting).
11.After the Hooker Cockram meeting, at about 10.45 am that day both M.Hudson and Reardon arranged and held a stop work meeting on site with the workers at the site in an area known as the triangle - which was a triangle shaped area at the top of the site near the entrance into the site (the CFMEU stop work meeting).
12.The CFMEU stop work meeting was attended by approximately 14 workers who were either members of the CFMEU or eligible to be members of the CFMEU (“the employees”).
The direction and the CFMEU ban
13. During the CFMEU stop work meeting;
(a)The employees expressed to Hudson and Reardon their dissatisfaction at not being paid the appropriate height allowance.
(b)both M. Hudson and Reardon encouraged, persuaded, recommended, endorsed and/or directed the employees:-
(i) not to perform any further work at the site; and
(ii) to leave the site immediately (the direction).
14.At all material times the direction was not retracted by M. Hudson or Reardon or any other person and Hooker Cockram was not informed or given notice of the direction.
15.By reason of the direction, after the conclusion of the CFMEU stop work meeting the employees did not perform any work on the site from between 11.00am and 11.30am on the 1 April 2009 and for the remainder of that day.
16.The CFMEU stop work meeting and the CFMEU ban disrupted the performance of work at the site.
17.The actions of M. Hudson, Reardon and the CFMEU, in respect of:
(a) the CFMEU stop work meeting;
(b) the direction; and/or
(c)the CFMEU ban constituted building industrial action within the meaning of that term in s.36 of the BCII Act (the building industrial action).
Vicarious liability of the CFMEU
18.At all material times both M. Hudson and Reardon had actual, apparent or ostensible authority to engage in the conduct referred to in paragraphs 8 to 17 above (the unlawful conduct) for and on behalf of the CFMEU.
19.Further and/or in the alternative, the unlawful conduct of both M. Hudson and Reardon, or either M. Hudson or Reardon pursuant to s.69 of the BCII Act, is taken to be conduct of the CFMEU.
The unlawful building industrial action
20. By reason of the building industrial action being:
(a) industrially-motivated action;
(b) constitutionally-connected action; and
(c)action that was not excluded action – the building industrial action constituted unlawful industrial action within the meaning of that term in s.37 of the BCII Act (unlawful industrial action).
21.By reason of each of the acts of the building industrial action being unlawful industrial action and the operation of s. 69 BCII Act:
(a)both M.Hudson and Reardon have each committed a single contravention s.38 of the BCII Act; and
(b)the CFMEU has committed a single contravention of s.38 of the BCII Act.
Agreed penalties and orders
22.In respect of penalties, the parties agree that appropriate penalties and orders to be made by the Court are as follows.
(a)The First Respondent pay to the Consolidated Revenue Fund by way of penalty for a contravention on 1 April 2009 of s.38 Building and ConstructionIndustry Improvement Act 2005 (Cth) the sum of $22,500 within 30 days.
(b)The Second Respondent pay to the Consolidated Revenue Fund by way of penalty for a contravention on 1 April 2009 of s.38 Building and ConstructionIndustry Improvement Act 2005 (Cth) the sum of $2,500 within 30 days.
(c)The Third Respondent pay to the Consolidated Revenue Fund by way of penalty for a contravention on 1 April 2009 of s.38 Building and ConstructionIndustry Improvement Act 2005 (Cth) the sum of $2,500 within 30 days.
(d) The proceeding be otherwise dismissed.
(e) There be no order as to costs.
Management Pty Ltd [2008] FCA 1034 at [23] per Jessup J, Alfred v Lanscar;
[2007] 167 IR 320 at [15] per Buchanan J.
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