Australian Building and Construction Commissioner v Automotive, Food,... [2017] FCA 367 | Case summary

On 27, 28 and 31 March 2014, the fourth respondent, an employee of the first respondent acting within the scope of his authority as such within the meaning of s 550 of the Fair Work Act 2009 (Cth), was knowingly concerned in the contraventions of s 417(1) of that Act by employees of BMC Welding & Construction Pty Ltd and John Beever (Aust) Pty Ltd when they engaged in industrial action before the enterprise agreements by which they were covered had reached their nominal expiry dates, thereby contravening the said s 417(1).

JESSUP J: 1 These reasons, and the orders which accompany them, deal with the penalties proper to be imposed, and the orders otherwise proper to be made, in consequence of the judgment in The Australian Paper Case [2017] FCA 167 delivered on 1 March 2017. The reasons assume a familiarity with that judgment, and the reasons for it. 2 In my reasons of 1 March 2017 I held that Messrs Dodd, Thornton and Sharp contravened ss 417(1), 421(1) and 346 of the Fair Work Act 2009 (Cth) ("the FW Act") by their involvement (in the s 550 sense) in the contraventions of those provisions by the employees of BMC Welding & Construction Pty Ltd ("BMC") and John Beever (Aust) Pty Ltd ("JBA") (or, in the case of s 346, by Messrs Cockrane and Cuddy). Therefore, as a foundation for considering the penalties to be imposed on the three organisers and the unions by which they were employed, it will be necessary to commence with an identification of the contraventions (by others) in which they were involved. 3 Commencing with s 417(1), the statutory prohibition is upon engaging in industrial action, that is to say (in the context of the present case), upon engaging in a failure or refusal to perform work. Each of the relevant employees of BMC and JBA did so engage from the normal time of recommencing work after the meal break on 27 March 2014 until the resolution of the dispute on 31 March 2014. It was submitted on behalf of the applicant that each day should be regarded as a separate contravention, but I cannot appreciate why this should be so. My reasons of 1 March 2017 do not contain, and would not sustain, a finding that there was a discrete episode of industrial action, separate from any other, on any of 27, 28 and 31 March 2017. From 1.30 pm on 27 March 2017 until the resolution of the dispute on 31 March 2017, there was no period during which normal work was performed such as might mark off, as it were, separate periods of industrial action. In this regard, although the statutory context is not in complete alignment, my thinking has not changed from that which I expressed in Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543, 566-567 [136]. 4 Aside from the operation of s 557 of the FW Act, therefore, I would hold that each relevant employee contravened s 417(1) once over the three days in question. Should I be mistaken in that respect, s 557 would then need to be considered from the starting point that each employee contravened s 417(1) three times - once on each of the relevant days. 5 Section 557(1) provides as follows: (1) For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if: (a) the contraventions are committed by the same person; and (b) the contraventions arose out of a course of conduct by the person. Sections 417(1) is a provisions referred to in s 557(2). 6 Counsel for the applicant did not resist the proposition that s 557 operated, in the circumstances of this case, to collapse each group of three contraventions (one per day) into a single contravention at the point when the court came to fix penalties, but submitted that the original contraventions should form the basis of declarations made by the court. I do not accept that submission. Section 557 of the FW Act operates for the purposes of Pt 4-1, not only for the purposes of s 546. It governs the findings available in a proceeding commenced under s 539(2), whatever may be the remedial outcomes either sought or granted. Moreover, it operates in relation to two or more nominal contraventions, even those done by non-parties which have become relevant under s 550. If there were three contraventions of s 417(1) by each employee of BMC and JBA, therefore, they were collapsed into one by the operation of s 557. 7 The present case must, therefore, be decided on the basis that each employee of BMC and of JBA contravened s 417(1) once over the period 27-31 March 2014. It was the contraventions of all of those employees in which Messrs Dodd, Thornton and Sharp were involved within the meaning of s 550. Nominally, each of them contravened s 417(1) as many times as there were employees. But those contraventions, in turn, were subject to s 557. It could hardly be doubted that, for each organiser, his contraventions (by his involvement) arose out of the same course of conduct. In the result, therefore, I would hold that each of Messrs Dodd, Thornton and Sharp contravened s 417(1) once over the period referred to. 8 Turning to the liability of the unions, s 793(1) of the FW Act provides as follows: Conduct of a body corporate (1) Any conduct engaged in on behalf of a body corporate: (a) by an officer, employee or agent (an official) of the body within the scope of his or her actual or apparent authority; or (b) by any other person at the direction or with the consent or agreement (whether express or implied) of an official of the body, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the official; is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body. This provision does not make a body corporate vicariously liable for the contravention of its officer, employee, etc. Rather, it attributes to the body the conduct of the relevant human agency. 9 In the facts of the present case, each of the unions was taken to have engaged in the conduct of its respective organiser and thereby to have contravened s 417(1) in exactly the same way as the organiser, as held above. There was, therefore, a single contravention of this provision by each of the unions over the period 27-31 March 2014. 10 Turning to the contraventions of s 421(1) of the FW Act, here there is no issue about the timing of the contraventions: the applicant alleges, and I have found, that contraventions occurred on 31 March 2014 only. But the applicant alleges that each of the organisers, by his involvement within the meaning of s 550, contravened s 421(1) twice that day: once in relation to the employees of BMC, who were covered by the BMC Welding & Construction and AMWU/CFMEU Metal Engineering On-Site Construction Agreement 2011-2014, and once in relation to the employees of JBA, who were covered by the John Beever (Aust) Pty Ltd/AMWU/CFMEU Metal Engineering On-Site Construction Agreement 2011-2014. 11 Section 421(1) operates not by reference to the coverage of the employees concerned by an enterprise agreement, but by reference to an order made under (relevantly to the present case) s 420. Here there were three such orders: one which was binding on and applied to the employees of BMC, one which was binding on and applied to the employees of JBA and one which was binding on and applied to both categories of employees. Some of the employees who took industrial action on 31 March 2014 did so in breach of the first order, some of them did so in breach of the second order, and all of them did so in breach of the third order. That is to say, every such employee contravened two orders. There can be no doubt but that, factually, the two contraventions by each employee arose out of the same course of conduct within the meaning of s 557: indeed, they were constituted by the very same conduct. In each case there was, therefore, only one contravention of s 421(1). 12 In respect of the single contravention by each employee, there was, correspondingly, one contravention by each organiser by reason of his involvement in the employee's contravention and the operation of s 550. It is those contraventions to which s 557, in turn, must then be applied. By this stage of the analysis, it is not to the point that there were originally different orders (of the Commission) under which the employees' contraventions arose: there is now only one contravention on the part of each employee and only one contravention (per employee) in which each organiser was involved. Then applying s 557, there could be no conclusion other than that, in the case of each organiser, his involvement in the contraventions of all the employees (both of BMC and of JBA, if it matters) constituted a single course of conduct within the meaning of para (b) of subs (1). 13 It was submitted on behalf of the applicant that the organisers' contraventions of s 421(1) were not collapsed into a single contravention by s 557 because of the reasoning in QR Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (2010) 204 IR 142 and Rocky Holdings Pty Ltd v Fair Work Ombudsman (2014) 221 FCR 153 to which I referred in The Kane Constructions Case [2017] FCA 168 at [64]. Although not articulated, the premise upon which this submission was based was that the organisers' nominal contraventions of s 421(1) arose by reference to each of the Commission's orders. In the view I have taken, however, those contraventions arose by reference to the contraventions of the relevant employees, each of which was singular. At this level, therefore, the case is not governed by QR and Rocky Holdings. 14 But the applicant's submission does need to be considered at the anterior point, that is, at the point where, on what I consider to be the natural fit of the facts of the case into the terms of the statute, s 557 collapsed the two contraventions of each of the employees into a single contravention. Do QR and Rocky Holdings require the conclusion that s 557 did not operate in this way? 15 Although it is not crystal clear from the report, it seems that QR was concerned with a situation in which different categories of employees were covered by different collective agreements (such as that which related to train crews referred to in para 11 of the reasons of Keane CJ and Marshall J, 204 IR at 145). That is to say, the employer was required to consult with employees in category A under one agreement, with employees in category B under a second agreement, and so on. By contrast in the present case, each employee was covered by the order made on the application of his or her employer (BMC or JBA as the case required) and, additionally, by the order made on the application of Australian Paper ("AP") (that order having been a requirement under s 420(2) once AP made itself an applicant under s 418(2)(b)). But, taken together, the orders required one thing only: that the industrial action stop. In my view, the proposition that the two nominal contraventions that arose from an employee's failure to stop industrial action were captured by the terms of s 557 is not contradicted by the judgment of the Full Court in QR. 16 In the facts which came before the court in Rocky Holdings, there had been contraventions of different terms of the National Employment Standards and of a modern award. Those contraventions related to quite different entitlements, those dealing with overtime, holiday pay and pay for carer's leave, amongst others. But there were only two "civil remedy provisions" under which the proceedings were brought. The Full Court said (221 FCR at 159 [13]): The reference in s 557(1) to "a civil remedy provision referred to in subsection (2)" discloses that it is the provision which is relevant. Section 557(2) identifies each of ss 44(1) and 45 as a civil remedy provision. It is the substance of those provisions which create the proscriptions. Section 44(1) proscribes contraventions of a provision of the NES. Section 45 proscribes contravention of a term of a modern award. The appellants' alternative contention treats the references to ss 44(1) and 45 (and every provision listed in s 557(2)) as a reference not to the substance but to the mere existence of the provision irrespective of the nature of the contravention the provision creates. Section 557(2) should be recognised to be a form of definitions provision. It defines civil remedy provisions for the purposes of s 557(1). The function of s 557(2) is to indicate that when a provision is identified, it is the substance of the provision found elsewhere in the Act (in this case, in ss 44(1) and 45) which is the civil penalty provision. As the FWO put it in written submissions: However, section 557 also operates on contraventions which relevantly occur when a term of an award or a provision of an NES is contravened. This now occurs indirectly through the operation of sections 44 and 45. In the case of s. 45 (for example), the contravention occurs when a term of a modern award is contravened. Thus the effect of subsection 557(1) in relation to contraventions of s 45 is that: … 2 or more contraventions of (a term of an award) are, subject to subsection 3, taken to constitute a single contravention … The appellants construe s 556 [sic] as if it said that 2 or more contraventions of an award or 2 or more contraventions of an NES are taken to constitute a single contravention. (Emphasis in original.) Analogously, it might be said that it is the substance of the obligation created by a s 420 order that stands as the "civil remedy provision" for the purposes of s 557(2)(k). In the present case, the precise same obligation was imposed on each relevant employee by the order obtained by his or her employer (BMC or JBA as the case may be) and the order obtained by AP. Clearly, Rocky Holdings is no authority for the proposition that the nominal contraventions of s 421(1) by each employee are not subject to the operation of s 557(1). 17 The position is, therefore, that, by the operation of s 550 of the FW Act, each of Messrs Dodd, Thornton and Sharp contravened s 421(1) once on 31 March 2014. So did the unions by which they were respectively employed. 18 That leaves the contraventions of s 346, to which s 557 does not apply. For the reasons I have given in para 3 above, I hold that each of Mr Cuddy and Mr Cockrane contravened s 346 once over the two days 28 and 31 March 2014. By their involvement in the s 550 sense, each of Messrs Dodd, Thornton and Sharp likewise contravened this section - two contraventions in the case of each of them. Each of the unions by which they were respectively employed also contravened s 346 twice. 19 That brings me to the matter of penalties. At the time of the contraventions, the maximum penalties were $10,200 in the case of an individual and $51,000 in the case of a corporation. An argument advanced on behalf of the applicant that the maxima applicable to the circumstances of the present case were the higher penalties legislated in July 2015 finds no support in the decided cases and should be rejected. 20 Save with respect to the matter of previous contraventions, it was not suggested by either side that there was anything in the facts of the case that would cause the court to perceive different levels of culpability as between the respondents. 21 Commencing with the contraventions of s 417(1), they were wilful not only in the sense of not being accidental but also in the sense that, save for one aspect to which I shall turn, it was, I would infer, self-evident that the conduct of the employees of BMC and JBA amounted to industrial action within the terms of the applicable enterprise agreements. Any suggestion that this was not apparent to the organisers could not be taken seriously, and was not made by their counsel. Furthermore, as full-time officials responsible for the relevant areas of industry, the organisers would rightly have been perceived by the workers as their advisers on any issue as to the consistency of their conduct with the FW Act. They should have counselled against the taking of industrial action. If status as a registered organisation means anything, it must bring with it a responsibility to assist the members concerned in a dispute to keep their actions within the requirements of industrial laws. On this occasion, the organisers took the opposite course: they took advantage of the employees' unlawful conduct to strengthen their hands in their negotiations with the companies. The penalties imposed in the present case should be such as will act as a deterrent, both specific and general, against this kind of stratagem. 22 The one aspect which has the potential to qualify what I said in the previous paragraph is the view, which appears to have been given currency in the advice which the workers received, that the work stoppages over the period 27-31 March 2014 were related to safety and did not, therefore, amount to unlawful industrial action. That view was a mistaken one. What is more important for present purposes is that the organisers' evidentiary cases were not framed around the proposition that this supposedly exculpating circumstances was the subject of any considered advice taken by them or offered by them to the workers. Before involving themselves in industrial action which clearly had a serious impact on a significant construction project, and which led to their members losing about two days' pay, they ought to have been more conscientious about the correctness of the proposition that, because it related to safety in some way, that action could not have been unlawful. 23 I take into account that fact that each relevant contravention was not confined to a single occasion. Although singular, it covered a period of three working days and was, in that respect, more serious than a contravention arising from, for example, the holding of a 30-minute stop work meeting on a particular day. 24 I also recognise that none of these contraventions involved conduct taken at the instigation, or on the initiative, of the unions concerned. In some building and construction cases, one finds an otherwise peaceable workplace being disrupted by the intervention, and the demands, of a visiting union official for reasons which have little or nothing to do with the workers on the site. The present case is not in that category. The genesis of the dispute was on the site itself, and the organisers were brought into the prosecution of the dispute by workers on the site. They very properly responded positively to the workers' needs, and it is only by reason of their involvement in the unlawful methods being deployed that I have found them to have contravened the FW Act. 25 I do not place any store by the fact that, at the car park meeting on 27 March 2014, the organisers discouraged the workers from leaving the site altogether and going home. To the extent that they did so, I infer that this was tactical advice by them informed by the philosophy that the work stoppage was related to safety, with the consequence that the workers had to appear to be ready to recommence work once the safety issues were resolved. So far as the effectiveness of the industrial action as a negotiating lever was concerned, for the workers to be sitting in the sheds was every bit as efficacious as would have their absence from site. 26 In three cases in 2008-2009 in the Federal Magistrates Court, and in one instance the Federal Court, Mr Dodd was found to have contravened the Building and Construction Industry Improvement Act 2005 (Cth) ("the BCII Act") in a number of respects which are directly relevant to the exercise now being undertaken. Furthermore, those contraventions arose out conduct at one or other sites at the Maryvale Mill. In all, penalties totalling $9,450 were imposed on Mr Dodd. Less than five years after these findings against him, he contravened again in the circumstances which have led to the present proceeding. I consider that the findings made in 2008-2009 are relevant to the need for the penalty imposed on him to act as a specific deterrent. 27 I consider that a penalty of $4,500 is appropriate in respect of Mr Dodd's contravention of s 417(1) of the FW Act. 28 According to a table handed up by the applicant, the AMWU has been the subject of findings of contraventions of presently relevant industrial laws on nine previous occasions, most recently in 2010 (twice in that year). In all but one of those cases, penalties were imposed - a total of $379,550. A substantial component of that figure was made up of the penalties of $298,000 in total imposed on the AMWU in Williams v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2010] FCA 754. That judgment preceded the conduct with which these reasons are concerned by less than four years. To a greater or lesser extent, these prior contraventions are relevant to the need for the penalty imposed on the AMWU to act as a specific deterrent. 29 I consider that a penalty of $25,000 is appropriate in respect of the AMWU's contravention of s 417(1) of the FW Act. 30 Mr Thornton has not previously contravened a presently relevant industrial law. I consider that a penalty of $3,500 is appropriate in respect of his contravention of s 417(1) of the FW Act. 31 According to a table handed up by the applicant, the CFMEU has been the subject of findings of contraventions of presently relevant industrial laws on 121 previous occasions. Of those findings, 89 were made before March 2014. The normalisation of contraventions of industrial laws by the construction and general division of the CFMEU has been the subject of comment by Judges on so many previous occasions that any further observation on my part here would amount to little more than stating the obvious. Counsel for the respondents made no attempt to justify, to rationalise, or to play down the significance of his client's appalling record. I recognise that, in the respects which I mentioned in para 24 above, the present case does not fit the template of the more egregious examples of the CFMEU's lawlessness, but, if there is any union in the industrial universe which should be acutely aware of the importance of understanding the boundaries of lawful conduct in the prosecution of disputes, it is this one. Self-evidently, it does not care to do so. In the circumstances, the need for the penalty to act as a specific deterrent in the case of the CFMEU is overwhelming. 32 I consider that a penalty of $45,000 is appropriate in respect of the CFMEU's contravention of s 417(1) of the FW Act. 33 Mr Sharp has not previously contravened a presently relevant industrial law. I consider that a penalty of $3,500 is appropriate in respect of his contravention of s 417(1) of the FW Act. 34 According to a table handed up by the applicant, the AWU has been the subject of findings of contraventions of presently relevant industrial laws on six previous occasions, most recently in 2010. Penalties totalling $106,200 were imposed. To a greater or lesser extent, these prior contraventions are relevant to the need for the penalty imposed on the AWU to act as a specific deterrent. 35 I consider that a penalty of $20,000 is appropriate in respect of the AWU's contravention of s 417(1) of the FW Act. 36 I consider next the contraventions of s 421(1) of the FW Act on 31 March 2014. In this area of the case, s 556 of the FW Act is relevant. It provides as follows: If a person is ordered to pay a pecuniary penalty under a civil remedy provision in relation to particular conduct, the person is not liable to be ordered to pay a pecuniary penalty under some other provision of a law of the Commonwealth in relation to that conduct. The question arises whether, having imposed a penalty on a particular respondent for his or its contravention of s 417, the court is prevented by s 556 from imposing a separate penalty for his or its contravention of s 421. 37 The predecessor to this provision was introduced into the Workplace Relations Act 1996 (Cth) by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth), but neither that predecessor nor s 556 itself has, it seems, been the subject of any judicial examination in any context that would yield useful results for the present occasion. The relevant passage in the Explanatory Memorandum for the Bill which became the Act of 2005 is unrevealing as to how the section was intended to be applied in the kind of problematic situation which now confronts the court. 38 The problem has two dimensions. The first arises in what I shall describe as the simple case of two or more provisions having been contravened by the same conduct. That looks as though it ought to attract the operation of s 556, but counsel for the applicant submitted that the section operates only where the constituent elements of each contravention are the same. For example, in the matter which is presently under consideration - industrial action taken in contravention of ss 417(1) and 421(1) - the elements were not the same. Under s 417(1), but not under s 421(1), it was an element that the relevant enterprise agreement be within term. Under s 421(1), but not under s 417(1), it was an element that an order by the Commission proscribing the industrial action have been made. It was submitted that, in this sense, it could not be said that the penalty for which the FW Act provided related to the same "particular conduct" in each case. 39 I think it unlikely that the draftsman had such a limited operation in mind when s 556 was on the drawing board. I doubt that he or she would have contemplated that there were, either in the FW Act as such or in that Act and in another law of the Commonwealth, two or more provisions which defined contravening conduct in terms that involved precisely matching elements. I am not aware of any such situation, and counsel for the applicant drew my attention to none. It is hard to imagine why the legislature would double up with identical legislation in the way that would be required to provide a setting for the viability of this submission on behalf of the applicant. 40 The better view is that the reference to "particular conduct" in s 556 is to what the person actually did, with all of its attributes and in its whole context. If that conduct gives rise to liability to penalty under two or more provisions, the section is, in my view, engaged. In the present case, the conduct of the workers who took the industrial action attracted liability under s 417(1) and under s 421(1). It is true that, additionally to that conduct, there were adjectival elements the presence of which were necessary ingredients of the provisions respectively, and that these elements differed as between the two (the in-term agreement under s 417(1) and the Commission's order under s 421(1)), but, as it happened, both were in fact present on 31 March 2014 and both gave legal consequences to what the workers actually did. In my view, s 556 would stand in the way of penalties being imposed on the workers themselves under both sections, and the same applies where others, such as the organisers, were deemed to have contravened because of their involvement in that very conduct. 41 But I must now consider the second dimension of the problem. This arises in the context of the present case because the contraventions of s 417(1) in which the organisers were involved were not discrete ones which occurred on each of 27, 28 and 31 March 2014. They were "course of conduct" contraventions, the result of the operation of s 557 of the FW Act. The "particular conduct" which gave rise to those contraventions was spread over the three days. The question arises whether, at the point of considering the imposition of penalties for contraventions of s 421(1) on 31 March 2014, the "particular conduct" to which those contraventions related had already been subject to penalty under s 417(1). 42 In my view, this question must be answered in the affirmative. The conduct of the workers on 31 March 2014, and the organisers' involvement in that conduct, have already been subjected to penalty under s 417(1) - as part of a course of conduct, by all means, but as conduct in relation to which a penalty was imposed. That is all that is required by s 556. 43 It follows that the imposition of penalties for the respondents' contraventions of s 421(1) of the FW Act is prevented by s 556. I shall, however, make appropriate declarations. 44 Turning finally to the respondents' contraventions of s 346 of the FW Act on 28 and 31 March 2014, those contraventions were tied, via s 550, to the contraventions of Messrs Cuddy and Cockrane. The "conduct" to which attention must be directed was adverse action within the meaning of item 5(b) in the table in s 342(1), that is to say, taking industrial action. So far, the situation would appear to be on all fours with that with which I have dealt above in relation to ss 417(1) and 421(1). However, the additional element required for liability under s 346 - the reason for the action - is not so obviously external to the conduct of those who engaged in the proscribed conduct. Necessarily, the reasons of Messrs Cuddy and Cockrane were internal to themselves and, the applicant would say, intrinsic elements of their conduct. 45 As counsel for the respondents pointed out, the FW Act seems to make a distinction between conduct and the reasons for it. The structure of s 346 itself is an example of this: although using the synonym "action" rather than the word "conduct" as such, it does not make unlawful the taking of adverse action. It is only when taken for a proscribed reason that the action becomes unlawful. Also, s 793 distinguishes between the conduct of a body corporate and "the state of mind of a body corporate in relation to particular conduct". Although indirect and weak, these instances provide some support for the suggestion that s 556 is concerned with different provisions which penalise particular conduct, whether or not one or other of them also requires, as a condition of liability, that the conduct have been engaged in for a particular reason. 46 I also consider it more in harmony with the intent of s 556, as I have identified it above, that the section be construed as applying to a situation in which the conduct is common to the requirements of both contraventions, whether or not one of them requires the presence of a reason for acting as a condition of liability. In the present case, I intend to impose penalties for contraventions of s 417(1), but this might have been a case in which penalties were first imposed for contraventions of s 346, constituted by the taking of industrial action for a proscribed reason. For the respondents then to have been subject to further penalties under s 417(1) in relation to the industrial action as such, abstracted from any issue as to why that action was taken, would seem to be contrary to the intent of s 556. 47 Under the FW Act, the taking of industrial action, as such, is not unlawful. But it may become unlawful if there is some additional element making it so. I have dealt with ss 417(1) and 421(1) in this respect and, in my view, s 346 represents but another instance of industrial action becoming unlawful because of the presence of an additional element. As a matter of principle, I do not consider that s 556 has a different impact in the context of s 346 from that which it has in the other contexts, such as those which engage the other provisions referred to. In both situations, it is the conduct as such with which s 556 is concerned. 48 It follows that the imposition of penalties for the respondents' contraventions of s 346 of the FW Act is prevented by s 556. I shall, however, make appropriate declarations. I certify that the preceding forty-eight (48) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jessup.

Australian Building and Construction Commissioner v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union

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