Alfred v Wakelin

FEDERATED ENGINE DRIVERS' AND FIREMENS' ASSOCIATION OF QUEENSLAND, UNION OF EMPLOYEES

REASONS FOR JUDGMENT 1 The first and eighth respondents (Robert Wakelin and the Construction, Forestry, Mining and Energy Union (CFMEU)) have each admitted that, by reason of certain events on 10 November 2005, they contravened s 38 of the Building and Construction Industry Improvement Act 2005 (Cth) (the BCII Act) by engaging in unlawful industrial action. The remaining issue is what, if any, orders the Court should make in respect of each respondent's contravention having regard to the relevant provisions of the BCII Act and the circumstances of each case. 2 The applicant discontinued the proceedings against the second, third, fourth, tenth and eleventh respondents before this hearing but I have recorded them as parties given the references to some of them in the evidence. The proceedings against the fifth, sixth and seventh respondents were heard separately. 3 Section 38 of the BCII Act provides that a person must not engage in unlawful industrial action. Section 38 is a civil penalty provision (being a Grade A civil penalty provision) as defined in s 4 of the BCII Act. 4 Section 49(1) of the BCII Act provides as follows: (1) An appropriate court, on application by an eligible person, may make one or more of the following orders in relation to a person (the defendant) who has contravened a civil penalty provision: (a) an order imposing a pecuniary penalty on the defendant; (b) an order requiring the defendant to pay a specified amount to another person as compensation for damage suffered by the other person as a result of the contravention; (c) any other order that the court considers appropriate. 5 The maximum penalty for a contravention of s 38 is $110,000 for the CFMEU and $22,000 for Mr Wakelin (s 49(2)). 6 The parties agreed the relevant facts.

FACTS 7 The applicant is an ABC Inspector appointed under the BCII Act and entitled to make the application for relief under the Act. 8 The CFMEU is a building association as referred to in the BCII Act (s 4). 9 Mr Wakelin was an employee of John Holland Engineering Pty Ltd (a construction company) until 13 November 2005. At all material times Mr Wakelin was also: - (i) a member of the CFMEU, (ii) a delegate of the CFMEU, (iii) an officer of the CFMEU within the meaning of s 69(3) of the BCII Act, (iv) dealing with John Holland on his own behalf and for other members of the CFMEU within the meaning of s 69(1)(d) of the BCII Act, and (v) a member of the OH&S Committee of the mine site identified below. 10 The mine site is a gold mine at Lake Cowal in New South Wales owned by Barrick Australia Limited. Barrick engaged John Holland to carry out a construction project at the mine site comprising civil, structural, mechanical and piping works. The construction project involved building work within the meaning of the BCII Act. 11 The CFMEU, John Holland, and John Holland's employees (including Mr Wakelin) were each building industry participants as defined in s 4 of the BCII Act. 12 The CFMEU and John Holland were parties to a certified agreement entitled John Holland Engineering Pty Ltd New South Wales - SMP Certified Agreement 2005 (the agreement) made under Div 2 of Pt VIB of the Workplace Relations Act 1996 (Cth). The Australian Industrial Relations Commission certified the agreement on 14 July 2005. The agreement had a nominal expiry date of 31 March 2006. The agreement applied to and bound employees working on the construction project at the mine site including Mr Wakelin. 13 During October or early November 2005 the Australian Council of Trade Unions and various unions advertised an organised national day of community protest to be held on 15 November 2005 against Federal Government legislation (the protest day). The advertising invited union members to attend the protest day. 14 On or about 9 November 2005 James Bryce, the project manager of John Holland at the mine site, arranged for a memorandum to all employees to be placed on the notice boards in the crib hut area at the site. The memorandum advised that, with the exception of union delegates, all employees were expected to attend work and John Holland did not give its consent for employees to be absent from work on the protest day. 15 On or about 7.00 am on 10 November 2005 Mr Bryce and Mr Wakelin had a conversation to the following effect: Bryce: Rob, we need to know if the men will accept a recommendation from the AIRC on the question of payment for meals during the camp dispute. Wakelin: We need to put it to them at a meeting. Bryce: It should not take long. I authorise a 15 minute meeting after smoko. 16 On or around 10.30 am on 10 November 2005 the employees at the mine site held the meeting. The meeting went longer than the 15 minutes authorised. Mr Bryce and Roland Smits (a construction manager employed by John Holland) interrupted the meeting and told the employees to return to work. Mr Bryce said words to the effect of "The time authorised for the meeting has passed. Please return to work immediately". Mr Wakelin subsequently began shouting words to the effect "What are we going to do about this, men? Should we vote on this? Hands up who's for the motion? Hands up for who's against the motion?". The employees at the meeting resolved to go on strike for the remainder of 10 November 2005 in protest against Mr Bryce's interruption of the meeting, the memorandum, and alleged intimidation by John Holland's management, and in fact did so. 17 Shortly after the meeting Mr Best (a delegate of the Australian Manufacturing Workers Union on the construction project) said to Mr Bryce words to the effect of "The blokes have voted to withdraw their labour for the rest of the day in protest at management intimidation. The intimidation was the notice put up yesterday and your actions in disrupting a union meeting and telling them to return to work". 18 A number of employees, including Mr Wakelin, did not attend work at the mine site from around 11.00 am on 10 November 2005 until 6.30 am on 11 November 2005. 19 By reason of these facts, Mr Wakelin and the employees: - (i) failed or refused to attend for building work, (ii) engaged in action that was industrially-motivated and constitutionally-connected within the meaning of s 36 of the BCII Act, and (iii) engaged in action that was not protected action for the purposes of the Workplace Relations Act and was unlawful industrial action in contravention of s 38 of the BCII Act. Further, Mr Wakelin also contravened s 38 by reason of his involvement, within the meaning of s 48(2) of the BCII Act, in the contravention of that section by the other employees who did not attend work. Section 48(2) provides as follows: (2) For the purposes of this Part, a person who is involved in a contravention of a civil penalty provision is treated as having contravened that provision. For this purpose, a person is involved in a contravention of a civil penalty provision if, and only if, the person: (a) has aided, abetted, counselled or procured the contravention; or (b) has induced the contravention, whether by threats or promises or otherwise; or (c) has been in any way, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention; or (d) has conspired with others to effect the contravention. 20 Mr Wakelin's actions were conduct: - (i) by him as an officer or agent of the CFMEU acting in that capacity, (ii) by a member of the CFMEU authorised by its rules and/or by an officer or agent of the CFMEU acting in that capacity, and (iii) by a member of the CFMEU who performs for the CFMEU the function of dealing with an employer on behalf of himself and other members of the CFMEU acting in that capacity. Accordingly, by Mr Wakelin's actions and the operation of s 69 of the BCII Act, the CFMEU contravened s 38 of the BCII Act. Section 69 is as follows: (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. 21 Mr Wakelin swore an affidavit. He was not cross-examined. Mr Wakelin has worked in the building and construction industry for about 31 years. For the last 15 years he has worked as a crane operator/rigger for which he possesses the relevant course qualifications. He is a member of the CFMEU and has been since the 1980s. He has been an assistant delegate for the CFMEU at various sites from time to time and was the CFMEU's delegate at the mine site owned by Barrick Australia at Lake Cowal. 22 Mr Wakelin is 46 years old, single, with no dependants. He is currently employed on a large construction job in Brisbane which has approximately 12 months to run to completion. He is not a union delegate or assistant delegate on that job. Mr Wakelin lives alone in rented accommodation. Depending on whether he works Saturdays he currently earns between $60,000 and $70,000 per year net. He pays monthly car repayments of $550 and has about $10,000 in the bank. 23 Mr Wakelin has never before been the subject of any relevant legal action and has not been found to have breached any industrial relations legislation. Further, he has not been a delegate or assistant delegate of the CFMEU since he resigned as the delegate at the mine site whilst employed by John Holland. He resigned because he was spending a lot of his time on work related problems both in his role as delegate and as a member of the mine's OH&S committee. The main reason he resigned his employment was frustration at all the problems he had to deal with as a delegate. Mr Wakelin said that, although he recognises the importance of being a union member, he has had no desire since 10 November 2005 to be a delegate or to participate in any other representative role on behalf of the CFMEU. 24 The CFMEU agreed to provide formal training to the first to fourth respondents in respect of all of their obligations under the BCII Act and Workplace Relations Act, with the CFMEU bearing the costs of such training and the nature and content of the training being the subject of consultation with the applicant.

SUBMISSIONS 25 The applicant submitted that: - (1) The inference that should be drawn in the circumstances is that Mr Wakelin and the employees used the alleged intimidation as an excuse to punish John Holland. (2) On the facts there was no intimidation by John Holland. (3) Mr Wakelin's conduct was obviously hot-headed and an over-reaction to Mr Bryce's intervention in the meeting which had run over the agreed time. This indicates ulterior or collateral motivations behind the withdrawal of labour. (4) In his position as delegate, Mr Wakelin's exhorting of the employees to react precipitately was not responsible conduct conducive to respecting the industrial laws or the rights of John Holland or the employees. It was also contrary to the objects of the BCII Act which include promoting respect for the rule of law, ensuring respect for the rights of building industry participants, and ensuring that building industry participants are accountable for their unlawful conduct. (5) The conduct was in breach of the agreement and precisely the type of conduct the agreement was intended to avoid. Although the terms of the agreement were not in evidence any contrary inference as submitted on behalf of the respondents would involve accepting that the agreement permitted unlawful industrial action. (6) The Court can infer that the failure of the employees to attend work was a substantial disruption to John Holland's operations at the mine, although limited in time to approximately 24 hours. Contrary to the submissions for the respondents, this inference should be drawn as to do otherwise would suggest that the employees who did not attend work were wholly superfluous to John Holland's operations. (7) The CFMEU's record of contraventions of the BCII Act (three matters) and Workplace Relations Act (seven matters) before the present contravention "attests to the corporate culture of the union as a serial abuser of the industrial laws and rights of building industry participants, and calls for some deterrent". (8) Although the CFMEU and Mr Wakelin admitted the contravention of s 38, this is a modest mitigating factor as the admissions were made on the first day of the trial. Before that, almost every allegation in the pleading was denied, including that Mr Wakelin was a delegate and officer of the CFMEU acting in that capacity on 10 November 2005. (9) The applicant had been put to the time and expense of making applications for substituted service on the first to fourth respondents who are all members of the CFMEU. (10) Mr Wakelin and the CFMEU had not expressed any remorse for their conduct or apologised to John Holland. Mr Wakelin's affidavit studiously avoided any expression of remorse or apology. Contrary to the respondents' submissions, had any apology been made to John Holland then the respondents would have given evidence of the apology, but there was no such evidence. (11) The CFMEU had not offered training of all persons likely to be acting in the position of union delegate or organiser. (12) There is no evidence of financial hardship on Mr Wakelin's part or that he will have to pay any fine personally. (13) Having regard to these matters, a mid range penalty should be imposed on Mr Wakelin as a first offender with a higher penalty being imposed on the CFMEU. 26 The submissions on behalf of Mr Wakelin and the CFMEU in response to the applicant's submissions were that: (1) The strike was not for a period of 24 hours. It started at 11.00 am and finished by 6.30 am the next morning. Moreover, it could not be suggested that the employees otherwise would have worked through the night. (2) There was no evidence of the number of employees who failed to attend work (as the agreed facts refer only to Mr Wakelin and a number of employees not attending). (3) There was no evidence of substantial disruption or even disruption to John Holland's operations. (4) There was no evidence that the failure to attend for work involved a breach of the agreement as the terms of the agreement were not in evidence. Further, claims for breach of the agreement initially pleaded by the applicant had been discontinued. (5) There was no evidence that Mr Wakelin and the CFMEU used the alleged intimidation as an excuse to punish John Holland. This submission involved mere speculation. (6) The applicant's submissions that Mr Wakelin's conduct was hot-headed and an over-reaction are difficult to understand and, in any event, not supported by the evidence. (7) The timing of the respondents' admissions has to be seen in the context of the large number of claims the applicant made against many respondents. All of the allegations were withdrawn insofar as the CFMEU and its members were concerned but for a single allegation against each of Mr Wakelin and the CFMEU for contravention of s 38 of the BCII Act by reason of the events on 10 November 2005. The admissions had utilitarian value and should be given weight for that reason and because the admissions evidence contrition. (8) The applicant could not make submissions on what might have happened with respect to any apology to John Holland. 27 It was also submitted on behalf of Mr Wakelin and the CFMEU that s 49 of the BCII Act vested the Court with discretion. It did not create a presumption of any order being made, let alone any penalty being imposed. The word "appropriate" in s 49(1)(c) indicates the discretion involved. The classes of case where a penalty might be inappropriate are not closed and should be informed by the object that would be served in imposing a penalty and the seriousness of the conduct. In this case no penalty should be imposed having regard to the following matters: (1) Immediately before the contravention arose Mr Wakelin was performing a task that his employer had requested him to undertake. (2) The basis of Mr Wakelin's complicity in the contravention is unclear (whether as a person present at the meeting who took the vote or because he took industrial action himself). If the former, recording the views of others does not involve serious culpability. If the latter, Mr Wakelin is the only person being pursued for a penalty. (3) It is difficult to determine if the contravention was wilful, flagrant or deliberate in the sense of a conscious decision by Mr Wakelin to defy the legislative proscription in s 38. There is no evidence of Mr Wakelin or the CFMEU instigating discussion about strike action or engineering or contributing to a situation from which such action ensued. (4) Mr Wakelin's actions were responsive to management action rather than in pursuit of some unlawful object, advantage or gain. (5) The strike action involved other people and organisations against whom no action has been taken, without any explanation for that fact. Mr Wakelin and the CFMEU should not be left with some justifiable sense of grievance by this lack of parity. (6) The limited duration of the action taken (less than one shift) by an indeterminate number of employees (at least two), and the fact that it was at least in part responsive to management action is relevant, as is the offer of training and Mr Wakelin not having any desire to be a delegate or assistant delegate in the future. (7) It is also relevant that the CFMEU attracted liability solely by reason of the operation of s 69 of the BCII Act and the actions of Mr Wakelin, who was employed by John Holland. (8) Penalties in other cases are also relevant. Hadgkiss v Aldin (2007) 164 FCR 394; [2007] FCA 2068 involved more serious contraventions and resulted in fines on individuals of $9000 and $7500 with two thirds suspended in the form of a good behaviour bond (that is, effective fines of $3000 and $2500). Suspended fines also act as a deterrent. Temple v Powell (2008) 173 IR 189; [2008] FCA 714 involved far more serious conduct with more serious consequences and resulted in a fine of $12,000 on the CFMEU and $2500 for an employed organiser of the CFMEU. Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union (2006) 164 IR 375; [2006] WASC 317 involved a multiplicity of offences in contrast to the present case and that in Temple v Powell. In Leighton Contractors, the parties agreed and the Court imposed penalties of $90,000 on the CFMEU, $30,000 on the Construction, Forestry, Mining and Energy Union of Workers and $30,000 on a CFMEU official. (9) The BCII Act was of recent origin at the time of the contraventions in this case. Neither respondent had been found to have contravened s 38 at 10 November 2005.

DISCUSSION 28 In Construction, Forestry, Mining and Energy Union v Coal and Allied Operations Pty Ltd (No 2) (1999) 94 IR 231; [1999] FCA 1714 Branson J identified certain factors relevant to the assessment of whether conduct calls for a penalty to be imposed and, if so, the amount of the penalty as including: (a) The circumstances in which the relevant conduct took place (including whether the conduct was undertaken in deliberate defiance or disregard of the Act); (b) Whether the respondent has previously been found to have engaged in conduct in contravention of …the Act; (c) Where more than one contravention …is involved, whether the various contraventions are properly seen as distinct or whether they arise out of the one course of conduct; (d) The consequences of the conduct found to be in contravention …of the Act; (e) The need, in the circumstances, for the protection of industrial freedom of association; and (f) The need, in the circumstances, for deterrence. 29 Observations in other cases are also relevant. In Leighton Contractors (2006) 164 IR 375; [2006] WASC 317 at [58] Le Miere J made the following comment 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. 30 In Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426 at [58] 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 if they are to serve as a general deterrent to others who may be disposed to engage in proscribed conduct. 31 Any penalty must nevertheless be proportionate to the conduct of the individual or organisation in contravention (Temple v Powell (2008) 173 IR 189; [2008] FCA 714 at [58]). 32 The issue of any and, if so, what order should be made under s 49 of the BCII is to be assessed having regard to the facts either as agreed or as proved. 33 From the agreed facts and other evidence I do not know the number of employees involved in the industrial action other than that a number were involved including Mr Wakelin. Nor do I know the terms of the agreement in order to find breach of the agreement as submitted by the applicant. Further, I cannot be satisfied that John Holland's operations at the mine site suffered substantial disruption. I can infer that the operations must have suffered some disruption for the reason given by the applicant (namely, that I can and should infer that Mr Wakelin and the other employees who failed to report for work were not wholly superfluous to John Holland's operations). But I accept that the nature and extent of the disruption is unknown except that it would have been limited in duration to shifts which would otherwise have been worked between 11.00 am on 10 November and 6.30 am on 11 November 2005. These facts (or lack of facts) are relevant to the capacity to assess the seriousness of the contravention of s 38 by Mr Wakelin and the CFMEU. 34 I am satisfied that the agreed facts disclose that Mr Wakelin's liability flows from both his own taking of unlawful industrial action and his involvement in the taking of the industrial action by a number of other employees in his capacity as a delegate and officer of the CFMEU. The agreed facts disclose that Mr Wakelin shouted about what was going to be done (I infer about the interruption to the meeting against the background of apparent concerns about the memorandum relating to the protest day) and took the vote. It is also an agreed fact that he was involved in the contravention of s 38 by the employees (which can only mean the other employees, whatever their number) by reason of s 48(2). Taken together these facts show that Mr Wakelin, in his capacity as a delegate and officer of the CFMEU, was involved in the instigation of the unlawful industrial action. I do not accept the respondents' submissions to the contrary. 35 The agreed facts also permit (and I draw) the inference that Mr Wakelin reacted to perceived intimidation by John Holland management when there was no reasonable basis to do so. This is supported by Mr Wakelin's evidence expressing the frustrations he felt at dealing with issues as the CFMEU's delegate on the mine site. Accordingly, the applicant's characterisation of Mr Wakelin's conduct as an over-reaction and inconsistent with the objects of the BCII Act was well founded. However, I do not accept the applicant's submission that, on the evidence, I can infer that Mr Wakelin and the employees used the alleged intimidation as an excuse to punish John Holland. I do accept that the evidence supports the inference that the action was, at least in part, a response to John Holland's position with respect to the protest day as set out in the memorandum posted on or about 9 November 2005. In other words, Mr Wakelin's actions on 10 November 2005 were not a wholly spontaneous response to Mr Bryce's intervention in the meeting. 36 I do not consider the lack of action by the applicant against other people involved in the unlawful industrial action of any material weight or capable of legitimately founding any sense of grievance on the part of Mr Wakelin and the CFMEU. 37 The admissions of liability were not made until the first day of the hearing. Although various allegations of breach were not ultimately pursued by the applicant, Mr Wakelin and the CFMEU effectively denied all relevant allegations until the last moment. The admissions of liability nevertheless have some utilitarian value. They also provide some evidence of contrition but, as the applicant said, not particularly weighty evidence given the lack of any other supporting material. In these circumstances I adopt the approach of Branson J to admissions of liability in Alfred v Walter Construction Group Ltd [2005] FCA 497 at [15] as follows: [15] I am willing to treat the eventual acknowledgment by the third respondent that it had contravened s 170NC … as a modest mitigating factor so far as penalty is concerned. This acknowledgment avoided the need for a hearing to determine whether the allegations made by the applicant against the third respondent could be substantiated. As a consequence the community was spared the cost of a contested trial. However, I do not accept that the Court should adopt the approach that the third respondent should receive a penalty mitigated to the same degree as it would be appropriate to mitigate a sentence passed on an individual after a plea of guilty entered at the first reasonable opportunity (see Cameron v R (2002) 209 CLR 339; [2002] HCA 6). The present proceeding is not a criminal proceeding. The third respondent was not asked to plead to any offence. Rather the third respondent was required in its defence to traverse specifically each of the allegations of fact made against it in the statement of claim that it did not admit (see O 11 r 13 of the Federal Court Rules). Indeed under O 11 r 1B of the Federal Court Rules the third respondent's legal representative ought to have certified at the time of the filing of the third respondent's defence that the factual and legal material available to him or her provided a proper basis for each denial or non-admission in that defence. 38 Mr Wakelin has no record of prior contraventions of industrial legislation, a significant factor in his favour. He is of relatively modest means, albeit with no dependants. He is in regular employment. He is not presently acting as a union delegate and has no desire to do so (although that may change in the future). Specific and general deterrence remain relevant considerations. I am satisfied that a penalty should be imposed on Mr Wakelin in the circumstances recorded above. To make no order by way of penalty, even given the offer of training by the CFMEU, would undermine the objects of the BCII Act (as set out in s 3(2)(b), (c) and (d) in particular). 39 To be proportionate to the circumstances (particularly the relatively short duration of the unlawful industrial action and Mr Wakelin's lack of any relevant prior unlawful conduct), a fine at the low end of the scale is required with respect to Mr Wakelin. Taking into account the late admission of liability I impose a penalty of $1100 on Mr Wakelin. I see no reason in the circumstances of this case to suspend payment of any part of the penalty. 40 The CFMEU contravened industrial legislation, including s 38 of the BCII Act, on a number of occasions before 10 November 2005 (including three contraventions of s 38, albeit in circumstances different from the present case). The liability provisions in s 69 are a part of the statutory scheme. The fact that the CFMEU attracted liability under s 69 through the actions of Mr Wakelin acting as its delegate and officer on the mine site is part of the factual context. However, there is no reason to treat liability attracted under s 69 as necessarily of a different character or consequence for the purpose of making orders under s 49. Mr Wakelin was the CFMEU's delegate and officer within the meaning of the BCII Act. His actions in shouting about what was to be done, taking the vote, and being involved in the contravention of s 38 by a number of employees were all carried out by him in that capacity. Consistent with my approach to Mr Wakelin, I consider a penalty should be imposed on the CFMEU having regard to the circumstances of the contravention and the objects of the BCII Act. In particular, specific and general deterrence are of greater weight with respect to the CFMEU than Mr Wakelin. 41 Having regard to the relatively short duration of the unlawful industrial action and the lack of evidence about the number of employees involved and any particular disruption John Holland suffered in consequence, I consider that a penalty towards the lower end of the scale is required. Taking into account the late admission of liability I impose a penalty of $8000 on the CFMEU. Again, I see no justification for suspending any part of the penalty with respect to the CFMEU. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.

Associate: Dated: 25 September 2008 Counsel for the Applicant: Mr RM Goot SC with Mr M S White

Solicitors for the Applicant: Minter Ellison

Counsel for the First and Eighth Respondents: Mr R Reitano

Solicitors for the First and Eighth Respondents: Slater & Gordon Lawyers