The primary judge's reasons in relation to penalties
25 The primary judge noted at [22] that s 46 of the BCIIP Act and s 475(2) of the FW Act are both civil penalty provisions. The primary judge set out in a table the maximum penalties in respect of each contravention and the parties' positions as regards the contraventions. The Commissioner's position was that penalties totalling $378,000 should be imposed on the AWU and penalties totalling $43,470 should be imposed on Mr Kelly. The respondents put forward particular amounts for each of the contraventions (totalling $63,000 in respect of the AWU and $4,830 in respect of Mr Kelly), but also submitted that the course of conduct principle and the totality principle should then be applied to these figures to reduce the quantum of pecuniary penalties imposed on the respondents by a significant margin.
26 The primary judge summarised the applicable principles at [24]-[29]. It is not submitted that his Honour erred in this statement of the applicable principles.
27 The primary judge considered the nature and seriousness of the contraventions at [30]-[41], dealing first with the industrial action on 31 October and 1 November 2018, and then with the Pay Request.
28 In relation to the industrial action, the primary judge stated, at [30], that the contraventions of s 46 were "deliberate and objectively serious" contraventions of the BCIIP Act. After indicating that he would treat the industrial action on 31 October and that on 1 November as "roughly equivalent" in terms of seriousness (at [31]), the primary judge stated that he inferred that each of the contraventions "was calculated to exert pressure by exposing OneSteel to loss or damage" (at [32]).
29 The primary judge stated, at [32], that although any actual loss incurred by OneSteel was not established, he would infer from the AWU's preparedness to pay $90,000 in compensation to OneSteel and the Commissioner's agreement as to the sum to be paid, that loss or damage of that order was suffered. The primary judge then stated (at [32]):
Nevertheless, I accept the submission of the AWU that any loss or damage has been appropriately remedied by the AWU's willingness to pay $90,000 in compensation to OneSteel (see [79] below). I therefore proceed on the basis that no loss or damage has gone without a remedy. The absence of any enduring loss or damage diminishes the seriousness of the respondents' contraventions of s 46 of the BCIIP Act.
30 At [34], the primary judge stated that he accepted the respondents' contention that the contraventions should be regarded as less serious than would otherwise have been the case because:
(a) in organising the industrial action, Mr Kelly was not hostile, rude or threatening to OneSteel management; his communications with management, including his attempts to resolve the dispute through consultations, were initially appropriate before he organised the unlawful industrial action; and
(b) in respect of the AWU, there was no involvement of senior management or senior officials in the contravening conduct.
31 The primary judge accepted, at [36], that Mr Kelly genuinely believed that it was not unlawful for the employees to attend the rally. His Honour then stated (at [36]):
However, his conduct in organising the industrial action was nevertheless deliberate. I do not accept that Kelly did not appreciate that the industrial action taken on 31 October and 1 November (as distinct from that taken to attend the rally) was not unlawful.
32 The primary judge accepted, at [36], the AWU's contentions that in organising the industrial action Mr Kelly was genuinely concerned about the health and safety of the employees due to the employees being distracted, angry and upset by the interviews which OneSteel were conducting. The primary judge continued (at [37]):
Those considerations demonstrate that, though unlawful, Kelly's behaviour was, at a subjective level, genuinely regarded by him as reasonably justified. True it is that options short of industrial action may have been available to Kelly to further the cause he was pursuing. To some extent, the weight to be afforded to these considerations is therefore diminished by the existence of more reasonable alternatives to address the unfairness and the unsafe working conditions Kelly had in mind. Nevertheless, these considerations deserve some weight. To my mind, they inform the seriousness of the contraventions in question because they demonstrate that the need for specific deterrence is somewhat lower than it would have been in their absence. That is so because they enable the conduct to be characterised as a specific reaction to peculiar circumstances which is unlikely to recur in the context of the lessons likely learned through this proceeding. The conduct can therefore be regarded as isolated rather than driven by systemic factors which, if not appropriately addressed by specific deterrence, would likely result in conduct of a like kind being repeated.
(Emphasis added.)
33 In the context of considering the nature and seriousness of the Pay Request, the primary judge stated, at [38], that the conduct of the respondents undermined the objective of ss 474 and 475 of the FW Act. The primary judge stated that the "conduct was deliberate even if it be the case that Kelly did not mean to act unlawfully". It is convenient to observe that, in this sentence, the primary judge did not make a finding that Mr Kelly did not mean to act unlawfully; this is indicated by the words "even if it be the case".
34 The primary judge also stated, at [38], that the conduct was "objectively serious".
35 At [39]-[40], the primary judge rejected a submission of the respondents that relied on BlueScope Steel Ltd v Australian Workers' Union [2019] FCA 182 (BlueScope), considering the facts to be "very different". The primary judge found, at [40], that Mr Kelly's conduct must be regarded as a "deliberate contravention" of s 475(2). However, the primary judge accepted the respondents' submission that Mr Kelly did not "wilfully flout" the provision or make any threats or unduly forceful demands. The primary judge also stated (at [40]): "I accept that the conduct arose out of Kelly's genuine belief that the workers had been treated unfairly." Further, the primary judge stated at [41]:
The nature of the circumstances which drove the request for pay deserve some consideration. Again, I consider that the unlawful conduct occurred in peculiar and isolated circumstances, in relation to which the need for specific deterrence is diminished. I do not accept that in making the request for payment, Kelly did not intend that the workers be paid in relation to a period during which unlawful industrial action was taken. From the perspective of the AWU, there was no involvement by senior management.
(Emphasis added.)
36 The primary judge then considered a series of factors under the following headings:
(a) Contrition and Remorse;
(b) Co-operation;
(c) Prior Contraventions;
(d) Culture of Compliance; and
(e) Capacity to Pay.
37 In relation to contrition and remorse, the primary judge accepted, at [42], the submission of the respondents that both Mr Kelly and the AWU had demonstrated genuine contrition and remorse. The primary judge stated that the evidence before him of Mr Kelly and the Victorian Branch Secretary of the AWU demonstrated genuine regret about the events. The primary judge noted that the Commissioner accepted that the respondents had shown true regret and remorse. The primary judge also stated, at [43], that the willingness of the AWU to pay substantial compensation to OneSteel further demonstrated its contrition and remorse.
38 In relation to co-operation, the primary judge accepted, at [44], the respondents' submission that they had demonstrated significant co-operation with the Commissioner by admitting the contraventions. His Honour considered that the admissions were provided in a timely manner, in the circumstances of the case.
39 In the context of considering prior contraventions, the primary judge made the following observations, referring to Pattinson (FFC):
48 The appropriate approach to the consideration of prior contraventions was affirmed in Pattinson. The majority in Pattinson provided a detailed and scholarly analysis of the authorities on the correct approach to assessing the relevance of prior contraventions in the exercise of the discretion to issue a civil penalty. Their Honours concluded that prior contraventions may bear upon the seriousness of the offence but cannot justify a penalty that is disproportionate to the gravity of the instant offence: see, eg, at [180] and [194] (Allsop CJ, White and Wigney JJ).
49 That position was put succinctly by Besanko and Bromwich JJ, agreeing with the majority, at [227(3)]: "Prior history may be relevant to an assessment of the seriousness or gravity of the instant contravening conduct, but neither that history, nor the object of deterrence, can result in a penalty that is disproportionate to the contravening conduct itself, having regard to the maximum penalty provided."
50 In assessing the weight to be given to prior offending, it is also important to bear in mind the comments of King CJ in R v McInerney (1986) 42 SASR 111 at 113 that prior contraventions will be:
more cogent if they have been the subject of conviction before the immediate offence. In such cases, the offender has committed the immediate offence notwithstanding the formal judgment and condemnation of the law in respect of the earlier offences and notwithstanding the warning as to the future which the conviction experience implies.
40 The primary judge noted, at [51], that the Pay Request occurred shortly after Wigney J determined that the AWU had breached s 475(2) of the FW Act in BlueScope Steel Ltd v Australian Workers' Union [2018] FCA 1574 (BlueScope (Liability)) (but before the decision in BlueScope on the quantum of penalty). The primary judge stated that, in these circumstances, the AWU committed the contravention "in spite of the condemnation of the law in relation to its previous conduct of the same kind".
41 At [52], the primary judge stated that three of the AWU's previous contraventions were not committed by officials of the Victorian branch of the AWU, and that these contraventions should be afforded less weight because they did not go directly to the "culture of compliance" of the Victorian branch.
42 At [53], the primary judge stated that the majority of the past contraventions occurred over a decade ago, and that, in the intervening period, there had been relatively few incidents. The primary judge considered that there was no basis for an inference to be drawn that the AWU has a policy of disobedience or of a determined refusal to comply with the law, and noted that no contention to that effect had been made by the Commissioner.
43 The primary judge described, at [55], evidence given by the Secretary of the Victorian Branch of the AWU regarding compliance training.
44 The primary judge considered the course of conduct principle at [58]-[66]. The primary judge held that the contraventions of s 46 of the BCIIP Act and s 475(2) of the FW Act could not be regarded as a single course of conduct (at [65]). However, his Honour held that Mr Kelly's contraventions of s 46 did constitute a single course of conduct (at [66]). It followed that the AWU's contraventions of s 46 also constituted a single course of conduct.
45 The primary judge then considered the appropriate penalty (in light of the considerations already discussed) at [67]-[78].
46 The primary judge set out the applicable maximum penalties at [68]. In relation to the contraventions of s 46 of the BCIIP Act, the maximum penalty is $210,000 for the AWU and $42,000 for Mr Kelly: see s 81 of the BCIIP Act. In relation to the contraventions of s 475(2) of the FW Act, the maximum penalty is $210,000 for the AWU and $12,600 for Mr Kelly: see s 539 of the FW Act and s 49(c) of the BCIIP Act.
47 The primary judge then stated, with reference to Pattinson (FFC):
69 The maximum penalty does not only provide an upward limit on the power of the Court to impose a penalty; it establishes a statutory indication of the appropriate punishment for the worst type of case. By this yardstick a proportionate penalty for lesser cases can be assessed: Pattinson at [62] (Allsop CJ, White and Wigney JJ).
70 The contraventions here in question are far from the worst types of case. Each contravention was nevertheless deliberate and objectively serious. The industrial action contraventions, which occurred in a single course of conduct, resulted in significant economic pressure being imposed on an innocent party. The unlawful request for strike pay was also deliberate and serious. However, in neither case was any enduring loss or damage suffered. In both cases, the conduct was that of a single organiser without the condonance of the organisation for which he works, which would have been demonstrated if senior management had been involved.
(Emphasis added.)
48 The primary judge reasoned, at [71], that the need for general deterrence demanded a meaningful penalty, but one which also "takes into account the somewhat peculiar and isolated industrial circumstances which drove each of the contraventions".
49 The primary judge considered that the need for specific deterrence was not substantial in the case of Mr Kelly (at [72]). The primary judge imposed the following penalties on Mr Kelly (at [73]):
(a) for the contraventions of s 46 of the BCIIP Act, a total penalty of $5,400, being $2,700 for each contravention; and
(b) for the contravention of s 475(2) of the FW Act, a penalty of $1,600.
50 The primary judge considered that the need for specific deterrence in relation to the AWU was greater and there was a greater need for a meaningful penalty to address general deterrence (at [74]). The primary judge imposed the following penalties on the AWU (at [77]):
(a) for the contraventions of s 46 of the BCIIP Act, a total penalty of $50,000, being $25,000 for each contravention; and
(b) for the contravention of s 475(2) of the FW Act, a penalty of $30,000.