The general principles
23 For the most part, there was no disagreement about the general principles to be applied.
24 First, the purpose of a civil penalty under the FW Act "is primarily, if not solely, the promotion of the public interest in compliance with the provisions of the Act by the deterrence of further contraventions of the Act": Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 96 ALJR 426; 399 ALR 599; 175 ALD 383; 314 IR 301 at [9]. In determining an appropriate penalty for the purpose of s 546, this purpose must be kept firmly in mind.
25 Second, that purpose is to be achieved by imposing penalties that are sufficiently high to deter the wrongdoer from engaging in "contraventions of a like kind" (specific deterrence) and to deter others who might be tempted to contravene (general deterrence). The penalty for each contribution is no more and no less than is necessary for that purpose. See Commonwealth v Director, Fair Work Building Industry Inspectorate; Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 at [55] (French CJ, Kiefel, Bell, Nettle and Gordon JJ), citing Trade Practices Commission v CSR Ltd (1991) ATPR ¶41-076 (TPC v CSR) at 52,152 (French J). The same language was used by the plurality in Pattinson at [9] where their Honours said that the penalties fixed by the primary judge in that case were "appropriate because they were no more than might be considered to be reasonably necessary to deter further contraventions of a like kind …" (emphasis added).
26 Dick Stone submitted that this means that in determining penalty the Court must consider what, if any, penalty is required to deter a contravention of the particular award term or provision of the NES which underpinned the contraventions of ss 44 and 45 of the FW Act, rather than what penalty is required to deter contraventions of the NES and the Award. In so doing it relied upon the analysis in Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153 at [24] where the Full Court (North, Flick and Jagot JJ) said:
[I]t it is wrong to characterise the provision of the NES and the term of the modern award alleged to be contravened as a mere particular of the contravention of section 44(1) and 45 and then to seek to apply that to the construction question. Whether the provision of the NES or the term of the modern award is a particular or an element of the offence is not the question. Accordingly, the concept of elevating a particular to an element of the contravention is inapt and liable to confuse the proper inquiry.
27 Dick Stone's use of these remarks to interpret what the High Court meant when it referred in Pattinson to "contraventions of a like kind" is misconceived. Rocky Holdings provides no support for Dick Stone's submission. If anything, it supports the contrary proposition. The Full Court in Rocky Holdings was considering a completely different question. That question was the proper construction of s 557(1) of the Act. The purpose of s 557 is to ensure that a contravenor is not punished twice for what is essentially "the same criminality": Rocky Holdings at [18]. In Rocky Holdings at [23], the paragraph immediately preceding the paragraph upon which Dick Stone relied, the Full Court expressed its agreement with the remarks of Jessup J in Murrihy v Betezy.com.au Pty Ltd (No 2) (2013) 221 FCR 118 at [33] that, in the context of s 557(1), the reference to a "civil remedy provision" is "a conscious, specific, one" and the section should not be given a broader operation than that for which Parliament expressly provided. The argument the Full Court was addressing in Rocky Holdings, and which it rejected, was that s 557 requires the imposition of a single penalty for multiple contraventions of s 44 and s 45 respectively. The argument put by Dick Stone is a variation on the same theme. Like the argument put by Rocky Holdings, it is without merit. All the High Court meant by "further contraventions of a like kind" was further contraventions of laws of a similar kind to the contraventions admitted or proved in the particular case. That said, I accept, of course, that the Court must penalise a contravenor for the proven contraventions. When determining the appropriate amount for the purpose of deterrence, however, a court does not shut its eyes, so to speak, to the prospect of contraventions of an award or the NES in general. It follows that the mere fact that corrective action is taken to address a particular contravention does not mean that no or no appreciable penalty is required for that particular contravention. The effect of Dick Stone's submission is to read the reference to "contraventions of a like kind" in Pattinson as "the same" or "the identical contraventions".
28 Third, the fundamental proposition in criminal sentencing that the punishment must fit the crime which, before Pattinson¸ had influenced courts to impose civil penalties that are proportionate to the seriousness of the contravening conduct, has no place in a civil penalty regime. The statutory maximum is not reserved for the worst cases or, put another way, for the most serious examples of misconduct covered by the section which has been contravened. Rather, as the plurality put it in Pattinson at [10]:
What is required is that there be "some reasonable relationship between the theoretical maximum and the final penalty imposed". That relationship is established where the maximum penalty does not exceed what is reasonably necessary to achieve the purpose of s 546: the deterrence of future contraventions of a like kind by the contravenor and by others.
(Citations omitted).
29 In Pattinson the plurality endorsed the imposition of the maximum penalty where it is considered necessary for the purpose of deterrence even if the nature of the conduct does not fall into the most serious category of wrongdoing. As Wigney J observed in Construction, Forestry, Maritime, Mining and Energy Union v Richard Crookes Construction Pty Limited [2022] FCA 992 at [161] (CFMMEU v Crookes), it appears to follow that a large pecuniary penalty may be appropriate for a relatively minor contravention in order to serve the purpose of deterrence, whether specific or general or both. And the converse is also true, namely, that a small pecuniary penalty may be appropriate for a serious contravention if such a penalty would be a sufficient deterrent.
30 The plurality in Pattinson explained at [46]:
It is important to recall that an "appropriate" penalty is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case. A contravention may be a "one-off" result of inadvertence by the contravenor rather than the latest instance of the contravenor's pursuit of a strategy of deliberate recalcitrance in order to have its way. There may also be cases, for example, where a contravention has occurred through ignorance of the law … or where the official responsible for a deliberate breach has been disciplined ... In such cases, a modest penalty, if any, may reasonably be thought to be sufficient to provide effective deterrence against further contraventions.
31 Fifth, the reasonableness of the relationship between the theoretical maximum and the final penalty imposed may be established having regard to the circumstances of the conduct involved in the contravention and the circumstances of the contravenor. That is because either the circumstances of the contravening conduct or the circumstances of the contravenor may bear upon the extent of the need for deterrence in the penalty. See Pattinson at [55].
32 Thus, in determining "a penalty of appropriate deterrent value", a number of factors will be relevant, although there is "no rigid catalogue" or "legal checklist": Pattinson at [19]. They include: the nature and extent of the contravening conduct and the circumstances in which it took place; the nature and extent of loss or damage; whether the conduct was deliberate; the period over which the conduct extended; whether senior management was involved; whether the contraventions are truly distinct or arose out of the one course of conduct; whether the contravener has previously engaged in similar conduct; the size of the contravening company; the existence and extent of any contrition and corrective action; and whether the company has a corporate culture conductive to compliance. See, for example, TPC v CSR at 52, 152-3 (French J); Kelly v Fitzpatrick [2007] FCA 1080; 166 IR 14 (Tracey J) at [14].
33 Some of these factors will weigh in favour of a heavy penalty, some will pull in the opposite direction. A court might consider it "appropriate to impose only a moderate penalty" where those responsible for a contravention of the Act express "genuine remorse" or the conduct is unlikely to recur because of changes implemented by the contravenor: Pattinson at [47]. A small penalty is unlikely to act as an effective deterrent to a "well-resourced contravenor": Pattinson at [60]. The Court must ensure that the penalty imposed is not to be regarded by the contravenor or anyone else as "an acceptable cost of doing business": Australian Competition and Consumer Commission v TPG Internet Pty Ltd (2013) 250 CLR 640 at [66]. As the plurality in Pattinson explained at [66]:
The theory of s 546 of the Act is that the financial disincentive involved in the imposition of a pecuniary penalty will encourage compliance with the law by ensuring that contraventions are viewed by the contravenor and others as an economically irrational choice.
34 The question whether particular contraventions arise out of a course of conduct is not determined exclusively by s 557 of the FW Act. It is well established that s 557 is not a code and the common law course of conduct principle continues to apply. That principle was described by the Full Court in Construction, Forestry, Mining and Energy Union v Cahill [2010] FCAFC 39; 194 IR 461; 269 ALR 1 at [39] in the following way:
The principle recognises that where there is an interrelationship between the legal and factual elements of two or more offences for which an offender has been charged, care must be taken to ensure that the offender is not punished twice for what is essentially the same criminality. That requires careful identification of what is "the same criminality" and that is necessarily a factually specific enquiry. Bare identity of motive for commission of separate offences will seldom suffice to establish the same criminality in separate and distinct offending acts or omissions.
(Original emphasis.)
35 But the principle is neither a rigid rule of law nor "a straitjacket, denying a judge the capacity to craft a result that properly reflects the conduct in question even if the course of conduct principle does squarely apply". Rather, it is a guide to the exercise of judicial discretion. See Parker v Australian Building and Construction Commissioner (2019) 270 FCR 39 at [273]-[274] (Besanko and Bromwich JJ). The fact that two or more contraventions may be part of a single course of conduct does not limit "the penal response" to a single maximum penalty: Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Nine Brisbane Sites Appeal) (2019) 269 FCR 262 at [12] (Allsop CJ).
36 Finally, where multiple contraventions are being penalised, it is necessary to conduct "a final check" to ensure that the aggregate penalty is "not unjust or out of proportion to the circumstances of the case": Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383 at [42]. This is commonly referred to as the "totality principle". If the aggregate penalty is unjust or out of proportion to the circumstances of the case, then an adjustment or adjustments to the figures will need to be made.