Australian Building and Construction Commissioner v Construction, Forestry,... [2019] FCA 1555 | Case summary | Zoe

CTHFCA

Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining, and Energy Union

[2019] FCA 1555

Federal Court of Australia|2019-09-20|Before: Wheelahan J

View original source

At a glance

Source facts

Court

Federal Court of Australia

Decision date

2019-09-20

Before

Wheelahan J

Source

Original judgment source is linked above.

Judgment (40 paragraphs)

[1]

Introduction 1 The Australian Building and Construction Commissioner seeks declarations and the imposition of civil penalties in respect of contraventions of the Fair Work Act 2009 (Cth) (Act) by the respondents. The contraventions occurred in October and November 2013 in connection with a project for the redevelopment of the Kathleen Syme Library and Community Centre in Carlton, Melbourne. The redevelopment involved the repair and refit of an existing building, and the construction of an extension to the building. 2 The respondents to the proceeding are - (1) the first respondent, the Construction, Forestry, Mining, Maritime and Energy Union (to which I shall refer as the CFMEU); (2) the second respondent, Mr Theo Theodorou, who was an officer and organiser of the CFMEU; (3) the third respondent, Harris HMC Interiors (Vic) Pty Ltd (Harris Interiors), which was engaged as principal contractor to undertake works in connection with the project; and (4) Messrs Silvestro, Darker, and Dwyer, who were employees of Harris Interiors, and who are the fourth, fifth, and sixth respondents. Mr Silvestro was the site manager, Mr Darker was a project manager, and Mr Dwyer was the operations manager. 3 Harris Interiors engaged a subcontractor, Monark Industries Pty Ltd, which traded as Hughes Demolition, to perform demolition works at the site. The demolition works commenced in October 2013. Hughes Demolition did not have an enterprise agreement with its employees. So that there is consistency with the references to such an agreement in the evidence before the Court, from time to time I shall refer to an enterprise agreement as an "EBA". The Commissioner claimed that the respondents required Hughes Demolition to enter into an EBA in order to perform the works, and alleged that in doing so they dealt with Hughes Demolition in a way that contravened the Act.

[2]

The course of the proceeding 4 A hearing of the proceeding relating to questions of contravention took place on 13 to 17 February 2017. The issues raised at that hearing were whether the Commissioner had established the contraventions of the Act which were alleged against the respondents. On 1 August 2018, Tracey J delivered reasons for judgment in which his Honour found that each of the respondents had contravened provisions of the Act: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (the Syme Library Case) [2018] FCA 1142. His Honour ordered that the further hearing of the application be listed on 14 August 2018, and made directions for the filing and service of affidavits and written submissions relating to penalties and the other relief sought. Tracey J intended that the question of remedies be heard and determined following the publication of his Honour's reasons, however the hearing fixed for 14 August 2018 did not take place as his Honour had intended. Counsel retained for the CFMEU had other commitments that prevented him from preparing submissions for the proposed hearing. On 8 August 2018, the Court vacated the orders made on 1 August 2018, and ordered that the further hearing of the proceeding be listed on a date to be fixed. On 17 August 2018, Tracey J's term of office expired, and his Honour retired from the Court. 5 The further hearing of the proceeding was listed before me on 11 April 2019. The day before the hearing was due to commence, I listed the proceeding for mention to raise with the parties the question whether I could continue to hear the proceeding and determine questions related to remedies based upon the findings of Tracey J. In raising this question I referred the parties to the decisions in Orr v Holmes (1948) 76 CLR 632, Brennan v Brennan (1953) 89 CLR 129, Chua Chee Chor v Chua Kim Yong [1962] 1 WLR 1464, and Wentworth v Rogers (No 3) (1986) 6 NSWLR 642. The question arose because, although Tracey J had published detailed reasons for judgment, and had made all necessary findings as to the questions of contravention of the Act that were raised by the pleadings, no declarations had been made. I gave the parties time to consider their position and adjourned the further hearing of the proceeding. 6 When the further hearing of the proceeding resumed on 23 May 2019 I received into evidence a minute signed by the solicitors for the parties in the following terms - All parties to the proceeding give their unqualified consent to the questions of declaratory relief and penalties being determined by Justice Wheelahan, based on the findings made by Justice Tracey in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (The Syme Library Case) [2018] FCA 1142. 7 The receipt into evidence of the minute signed by the parties' solicitors had the consequence that no evidence was required to prove the facts the subject of Tracey J's findings: Evidence Act 1995 (Cth), s 191(2). I regard the parties' agreement to this course as sensible. The parties' agreement avoided the need for the Court to hear submissions and then rule upon whether the findings of Tracey J could be acted upon absent the agreement of the parties, and avoided the prospect that the hearing of the proceeding might have to commence afresh. Counsel for the Commissioner properly accepted that the respondents' agreement to the course that was adopted is a matter that might be taken into account by way of mitigation in determining whether any penalties should be imposed, and if so in what amount.

[4]

Adverse action 9 Tracey J found that there were contraventions of s 340 of the Act, which provides - 340 Protection (1) A person must not take adverse action against another person: (a) because the other person: (i) has a workplace right; or (ii) has, or has not, exercised a workplace right; or (iii) proposes or proposes not to, or has at any time proposed or proposed not to, exercise a workplace right; or (b) to prevent the exercise of a workplace right by the other person. Note: This subsection is a civil remedy provision (see Part 4‑1). … 10 A person has a "workplace right" if the person is "able to initiate, or participate in, a process or proceedings under a workplace law or workplace instrument": s 341(1)(b). Section 341(2)(e) provides that "a process or proceedings under a workplace law or workplace instrument" includes "making, varying or terminating an enterprise agreement". 11 The circumstances in which a person takes "adverse action" against another are set out in s 342(1). Relevantly, "adverse action" is taken by: "a person (the principal) who has entered into a contract for services with an independent contractor against the independent contractor, or a person employed or engaged by the independent contractor", if the principal "terminates the contract": item 3(a). the principal, if the principal "alters the position of the independent contractor to the independent contractor's prejudice": item 3(c). the principal, if the principal "refuses to supply, or agree to supply, goods or services. to the independent contractor": item 3(d). an industrial association, or an officer or member of an industrial association, if the association, officer or member "organises or takes industrial action against the person": item 7(a). 12 Section 342(2)(a) of the Act provides that "adverse action" includes "threatening to take action". 13 The term "industrial action" is relevantly defined by s 19 of the Act as: 19 Meaning of industrial action (1) Industrial action means action of any of the following kinds: (a) the performance of work by an employee in a manner different from that in which it is customarily performed, or the adoption of a practice in relation to work by an employee, the result of which is a restriction or limitation on, or a delay in, the performance of the work; (b) a ban, limitation or restriction on the performance of work by an employee or on the acceptance of or offering for work by an employee; …

[8]

Attribution of liability to the CFMEU and to Harris Interiors 22 Some of the findings made by Tracey J involved attributing conduct of individual respondents to the CFMEU and to Harris Interiors. Section 363 of the Act relevantly provides - 363 Actions of industrial associations (1) For the purposes of this Part, each of the following is taken to be action of an industrial association: … (b) action taken by an officer or agent of the industrial association acting in that capacity; … … (3) If, for the purposes of this Part, it is necessary to establish the state of mind of an industrial association in relation to particular action, it is enough to show: (a) that the action was taken by a person, or a group, referred to in paragraphs (1)(a) to (e); and (b) that the person, or a person in the group, had that state of mind. (4) Subsections (1) to (3) have effect despite subsections 793(1) and (2) (which deal with liabilities of bodies corporate). 23 Section 793 of the Act provides - 793 Liability of bodies corporate 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. State of mind of a body corporate (2) If, for the purposes of this Act or the procedural rules, it is necessary to establish the state of mind of a body corporate in relation to particular conduct, it is enough to show: (a) that the conduct was engaged in by a person referred to in paragraph (1)(a) or (b); and (b) that the person had that state of mind. Meaning of state of mind (3) The state of mind of a person includes: (a) the knowledge, intention, opinion, belief or purpose of the person; and (b) the person's reasons for the intention, opinion, belief or purpose. …

[12]

(3) The threat by Mr Theodorou on 15 November 2013 32 Mr Seckold of Hughes Demolition and Mr Theodorou of the CFMEU planned to meet on 14 and 15 November 2013. Mr Seckold did not attend those meetings. Mr Seckold understood the purpose of the meetings to be the signing of an EBA acceptable to the CFMEU, but he did not intend to keep the latter appointment as he did not want to sign an EBA. 33 On 15 November 2013, Mr Seckold spoke to Mr Theodorou by telephone. During that conversation Mr Seckold told Mr Theodorou that, "financially I am not able to sign the enterprise agreement right now". Tracey J found that Mr Theodorou said in response - I am going to make everything very difficult and not let the boys work on the site. 34 Tracey J held that Mr Theodorou's response to Mr Seckold constituted, and was understood by Mr Seckold, to be a threat to organise or take industrial action against Hughes Demolition by banning its employees from working on the site, and that Mr Theodorou made the threat because Mr Seckold had not agreed to sign the EBA. 35 Tracey J found that in making this threat to Mr Seckold, Mr Theodorou took adverse action in contravention of s 340 of the Act. His Honour also found that Mr Theodorou intended to negate Hughes Demolition's choice as to whether to enter into an EBA, that by reason of the contravention of s 340 of the Act the threat was unlawful, and that Mr Theodorou made the threat for proscribed reasons, namely so that Hughes Demolition would exercise its workplace right to enter into an enterprise agreement (s 343), and so that it would engage in industrial activity by complying with a lawful request made by the CFMEU to enter into an enterprise agreement (s 348). Therefore, Mr Theodorou threatened to take action with intent to coerce in contravention of s 343 and s 348 of the Act. 36 His Honour also held that in taking the adverse action and engaging in coercion, Mr Theodorou was acting within the scope of his actual or apparent authority as an officer of the CFMEU, and that by operation of s 793(1) of the Act, the CFMEU was also taken to have contravened s 340, s 343, and s 348 of the Act.

[13]

(4) The threat by Mr Dwyer on 15 November 2013 37 Tracey J found that on 15 November 2013 Mr Dwyer of Harris Interiors made the following statements in a telephone conversation with Mr Seckold of Hughes Demolition - If you don't sign the EBA with the union, then your boys would not be able to work on the site on Tuesday. … [You need to meet with Mr Theodorou to] sort this all out as he has hit the roof. … If you don't sign the enterprise agreement they're going to get other employees that are covered by an enterprise agreement to finish the job and then charge Hughes Demolition for it. 38 Tracey J found that the statements were a threat to ban Hughes Demolition's employees from working on the site on the following Tuesday unless, in the meantime, Hughes Demolition signed an EBA in a form acceptable to the CFMEU. His Honour held that by making these statements, Mr Dwyer took adverse action in contravention of s 340 of the Act. 39 Tracey J also found that Mr Dwyer's threat presented an ultimatum to Hughes Demolition, namely, to make an EBA or to stop work and pay for replacement workers, and that Mr Dwyer plainly intended by his threat to pressure Hughes Demolition to make an EBA and to comply with the CFMEU's request that one be made. His Honour found that Mr Dwyer intended to negate the choice of Hughes Demolition about both these matters, and that by reason of the contravention of s 340 of the Act the threat was unlawful. His Honour was also satisfied that Mr Dwyer made the threat for proscribed reasons. His Honour found therefore that in making the threat, Mr Dwyer contravened s 343, and s 348 of the Act. 40 His Honour also held that, as there was no dispute that at relevant times Messrs Darker, Dwyer and Silvestro were acting within the scope of their actual and apparent authority as employees of Harris Interiors, their actions were to be taken to be those of the company, and therefore their conduct in contravention of the Act was to be taken to have been engaged in by Harris Interiors. Therefore, Harris Interiors is to be taken to have made Mr Dwyer's threat and also to have contravened s 340, s 343, and s 348 of the Act.

[20]

Mr Headberry 52 Mr Headberry stated that Harris Interiors is a family run and operated privately-owned company. It has been operating since 1984, and currently employs about 100 staff. It is a specialist provider of interior fit-out and refurbishment, and is one of the larger operators in the Melbourne market, having grown substantially in the past three to four years. However, at the time of the events giving rise to this proceeding, Harris Interiors was a smaller operation, and employed about 50 staff. Mr Headberry stated that in the 2013 to 2014 financial year the revenue of Harris Interiors was approximately $43 million. 53 Mr Headberry stated that at the time of the Kathleen Syme Library project, Mr Silvestro was a site manager, based at the project site, with no other sites to manage. Mr Headberry stated that a site manager was not considered to be a senior management position at Harris Interiors, and that it currently has around 30 site managers. Mr Silvestro has since progressed to a management role within Harris Interiors. Mr Darker was at the time of the Kathleen Syme Library project, a project manager who was based at Harris Interiors' office, rather than on-site. Mr Headberry stated that a project manager is not considered to be a senior management position at Harris Interiors, and that there are currently around 12 other project managers. Mr Dwyer was at the time of the Kathleen Syme Library project an operations manager for Harris Interiors, and is one of three operations managers who report to Mr Headberry. 54 Mr Headberry stated that Harris Interiors and its staff had co-operated with the Commissioner's investigations, including the attendance at meetings on a voluntary basis, although he acknowledged that at one meeting he and Mr Silvestro declined to have the meeting recorded, and on that basis declined to participate. Mr Headberry also stated that he had co-operated with the Commissioner in relation to a subsequent event at another site, where on behalf of Harris Interiors he initiated a report to the Commissioner of an event. Mr Headberry also referred to subsequent meetings with officers of the Commissioner that were initiated by him, including a meeting between him and the managing director of Harris Interiors, Mr Dale Kennedy, and the Commissioner. 55 Mr Headberry referred to training courses which Harris Interiors had arranged for its staff to undertake at a cost of over $150,000, and of internal communications relating to improvement in the practices of Harris Interiors. Mr Headberry referred to a training session conducted by the office of the Commissioner on 23 January 2018 that was attended by around 30 representatives of Harris Interiors including himself, Mr Darker, Mr Dwyer, and Mr Silvestro. Mr Headberry stated that as general manager for Harris Interiors, he can say that the company is determined to do everything to help its staff comply with the Code (which I take to be a reference to the Code for the Tendering and Performance of Building Work 2016 (Cth)) and the Fair Work Act. 56 Finally, Mr Headberry referred to the publicity that had been given to this proceeding, including by press releases issued on behalf of the Commissioner, and articles in the media. Mr Headberry stated that the impact of this publicity and the proceeding generally had been to reinforce the severe and lasting consequences of non-compliance with the Act.

[26]

Penalties against the CFMEU 64 The Commissioner submitted that the contraventions for which the CFMEU is liable called for penalties to be imposed at the high end of the range, or the maximum available. The Commissioner submitted that the contraventions for which the CFMEU was liable were deliberate, and designed to apply maximum pressure on Mr Seckold and Hughes Demolition to enter into an enterprise agreement with the CFMEU. The Commissioner submitted that the CFMEU is a recidivist offender, and relied upon the tables of previous contraventions of industrial legislation which had been tendered at the hearing, and previous judicial criticism of the CFMEU in a number of cases over many years. The Commissioner relied upon the financial strength of the CFMEU, as reflected in the financial records of the Victoria/Tasmania divisional branch of the Construction and General Division, to which I have referred at paragraph [49] above. The Commissioner submitted that the CFMEU had not expressed any contrition, had not taken any corrective action, and had not co-operated with the Commissioner. The Commissioner relied upon the objective of ensuring compliance with the Fair Work Act, and on a number of cases where this Court has spoken of the CFMEU's record of non-compliance with industrial legislation as indicating at least indifference, if not a deliberateness in contravention of the Act. Counsel emphasised the need for specific deterrence in relation to the CFMEU. 65 The CFMEU respondents submitted that the consideration of proportionality limited the penalty to what was appropriate have regard to objective seriousness of the contravention in question. I shall refer to that submission in more detail later. 66 The CFMEU submitted that the course of conduct principle should be applied to the contraventions on 23 October 2013 and in late October 2013. It was submitted that the contraventions were temporally linked, concerned the same subject matter, that the tenor of the representations was the same, and that the Court should approach the matter on the premise that the maximum penalty for both contraventions should be the maximum penalty for one contravention only. On the other hand, the Commissioner submitted that the contraventions on 23 October and late October 2013 were two discrete and separate events, and ought to be treated as two discrete contraventions, notwithstanding that the contraventions were in pursuit of the same objective. 67 In relation to the particular contraventions, the CFMEU respondents submitted that Mr Theodorou's representation of 23 October 2013 did not in fact mislead Hughes Demolition, because it did not act upon it, and the representation did not cause it any loss. The only consequence of the representation was to cause Mr Seckold to seek independent advice. It was submitted that the 23 October 2013 representation therefore fell below the middle of the range of objective seriousness. The CFMEU submitted that for the same reasons, the late October representation should be regarded as also below the middle of the range, and that by applying course of conduct principles, although a separate penalty should be imposed for each contravention, they should be dealt with compendiously. The CFMEU respondents submitted by way of comparison that the contraventions by Harris Interiors and Mr Silvestro were more serious, because they actually prevented Hughes Demolition from performing work. 68 In relation to Mr Theodorou's threat made on 15 November 2013, the CFMEU respondents submitted that there was no economic loss arising from the threat, and there was no evidence that Mr Theodorou carried out the threat. It was submitted that the conduct fell within the middle of the spectrum of seriousness, and it was submitted that the conduct was less serious than that of Mr Dwyer, Mr Darker and Mr Silvestro. 69 The CFMEU respondents submitted that there was no evidence of any collaboration or collusion between them and the Harris respondents, and Tracey J had rejected a claim by the Commissioner that Mr Theodorou was an accessory to Harris Interiors' contraventions. The CFMEU respondents submitted that they are to be punished for the contraventions found against them, and not for the contraventions of the Harris parties. 70 The CFMEU respondents relied on the principle of totality and submitted that after setting penalties for all contraventions, the Court should consider whether the aggregate of those penalties is just and appropriate to the total contravening conduct.

[27]

Penalties against Mr Theodorou 71 The Commissioner accepted that s 556 of the Fair Work Act was engaged in relation to the several contraventions by Mr Theodorou so that two penalties should be imposed - (1) one penalty in respect of the representation on 23 October 2013 referred to at paragraphs [27]-[28] above; and (2) a second penalty in relation to Mr Theodorou's conduct on 15 November 2013 by saying to Mr Seckold that "I am going to make everything very difficult and not let the boys work on the site", which is referred to at paragraphs [33]-[34] above. 72 In relation to Mr Theodorou's representation on 23 October 2013, the Commissioner submitted that this warranted a penalty at the medium to high end of the range, and in relation to the contraventions on 15 November 2013 involving adverse action and intent to coerce, Mr Theodorou's conduct called for penalties at the high end of the range. The Commissioner relied upon previous contraventions of industrial legislation by Mr Theodorou, and the fact that two of his three previous contraventions related to conduct that took place prior to the contraventions the subject of this proceeding, and in respect of one of those contraventions judgment had been given before the contraventions the subject of this proceeding. The Commissioner relied on the finding of Tracey J at [6] that Mr Theodorou was an officer and organiser employed by the CFMEU, and submitted that he had not expressed any contrition, had not taken any corrective action, and had not co-operated with the Commissioner. The Commissioner submitted that both specific and general deterrence were material considerations in fixing any penalty to be imposed upon Mr Theodorou. 73 In addition, the Commissioner sought against Mr Theodorou what has become known as a personal payment order: Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (the Non-Indemnification Personal Payment Case) (No 2) [2018] FCAFC 117; 281 IR 306. The Commissioner submitted that a personal payment order was appropriate for the following reasons - (1) the complete absence of any contrition, or evidence of a change in approach from the CFMEU or Mr Theodorou; (2) the history of contravention by the CFMEU through its officials, reflecting a willingness to contravene the law and pay penalties as a cost of its approach to industrial relations; and (3) the history of contravention by Mr Theodorou in his role as a CFMEU official. 74 Counsel for the CFMEU respondents submitted that the implied power to make a personal payment order should be exercised with caution, and only in circumstances where it is required to accomplish the deterrent effect of the penalty. Counsel submitted that the objective seriousness of the conduct was far removed from that considered by the Full Court in The Non-Indemnification Personal Payment Case, and was not so egregious as to call for the unusual step of the imposition of a personal payment order on Mr Theodorou.

[28]

Penalties against the Harris respondents 75 The Commissioner submitted that the penalties that should be imposed upon Harris Interiors, and Messrs Dwyer, Darker and Silvestro should be in the low to medium range. The Commissioner accepted that none of them had been involved in any prior proceedings relating to contraventions of industrial law. The Commissioner also accepted that s 556 of the Fair Work Act was engaged in relation to Messrs Silvestro, Darker, and Dwyer, and submitted that single penalties should be imposed as follows - (1) a single penalty be imposed upon Mr Silvestro in respect of his conduct on 19 November 2013, and referred to at paragraphs [44]-[46] above; (2) a single penalty be imposed upon Mr Darker in relation to his conduct on 15 November 2013 and referred to at paragraphs [41]-[43] above; and (3) a single penalty be imposed on Mr Dwyer for his conduct on 15 November 2013 that was found to have contravened ss 340, 343 or 348, and which is referred to at paragraphs [37]-[40] above. 76 The Commissioner initially characterised each of Messrs Silvestro, Darker and Dwyer as members of "senior management" of Harris Interiors, but then in reply submissions accepted that Mr Silvestro and Mr Darker were not "senior management", but maintained that Mr Dwyer was. The Commissioner submitted that there was no evidence of any corrective action taken by the Harris Interiors' parties, and that apart from some early co-operation in the investigation, the Harris respondents did not co-operate with the Commissioner. The Commissioner submitted that no contrition had been demonstrated by any of the Harris respondents, and submitted that during the hearing before Tracey J, the Harris respondents had sought to shift the blame onto Hughes Demolition by alleging that it had falsely represented to Harris Interiors that it had an enterprise agreement, and that this motivated Harris Interiors' conduct. The Commissioner submitted that whilst the Harris respondents were entitled to put the Commissioner to proof, they are not now entitled to any discount in penalty. The Commissioner emphasised general deterrence as a material consideration in the case of the Harris respondents. 77 The Harris respondents relied on the following matters - (1) none of the Harris respondents has any prior record of contravention of industrial legislation; (2) in this case, the Harris respondents were "caught in the cross-fire" between Hughes Demolition and the CFMEU respondents, and have been held by the Court to have contravened the Act; (3) the actions of the Harris respondents were not in deliberate contravention of the Act; (4) the motivation of the Harris respondents was to ensure continuity of work at the site, and to avoid disruption to work at the site, which may have been jeopardised by the fact that Hughes Demolition did not have an enterprise agreement in circumstances where the Harris respondents believed that Hughes Demolition had represented to them that it had an enterprise agreement, when it did not; (5) the extent of their conduct was limited as to duration and content, resulted in a work stoppage of two hours only, and was the product of a legitimate business concern to keep the project moving; (6) in relation to Harris Interiors' liability for the conduct of Messrs Silvestro, Darker, and Dwyer, a single penalty should be imposed upon it in respect of each instance of conduct referred to at [75] above, rather than a separate penalty for the several contraventions of the Act resulting from that conduct; (7) senior management, in terms of the directors or managing director of Harris Interiors, were not involved in the contraventions; (8) it was submitted that the Harris respondents co-operated with the Commissioner in the investigations, save for the objection to having an interview recorded, which was referred to in the evidence of Mr Headberry and Mr Silvestro and summarised at [54] and [57] above; (9) the Harris respondents have undertaken corrective action by their meetings with the Commissioner and the training and education that they have undertaken; (10) the Harris respondents submitted that the matter could have been resolved by the Commissioner seeking enforceable undertakings, or another outcome without recourse to litigation and the expense that it has caused; (11) there has been adverse publicity that has affected the Harris respondents; (12) specific deterrence has little or no role to play in this case; (13) general deterrence equally was of little or no importance in this case; (14) it was not appropriate to impose a penalty in this case; (15) alternatively, if the Court determined that it should impose penalties, they should be at the very low end of the range, which was submitted to be 5% to 10% of the maximum penalty for each contravention.

[31]

General considerations 81 The considerations relevant to the questions whether a penalty should be imposed, and if so in what amount, are well-known, and do not require extensive narration. Deterrence is the principal object of the imposition of a civil penalty for contravention of a civil penalty provision of the Fair Work Act. Penalties are imposed in an attempt to put a price on contravention that is sufficiently high to deter repetition by the contravener, and also by others who might be tempted to contravene the Act: Trade Practices Commission v CSR Limited [1990] FCA 762; (1991) 13 ATPR 41-076 at 52,152 (French J), cited in Commonwealth v Director, Fair Work Building Industry Inspectorate (The Agreed Penalties Case) [2015] HCA 46; 258 CLR 482 at [55]. Relevant factors in the overall assessment of penalty may include: the nature, character and seriousness of the conduct; any loss and damage caused; the circumstances in which the conduct took place; the size of the contravener and its degree of power; the deliberateness of the conduct and the time over which it occurred; the degree of involvement of senior officials or management; the culture of the organisation as to compliance or contravention; and any co-operation with the regulator and contrition. The material considerations may pull in different directions, and the task of identifying and giving weight to those considerations involves questions of discretion, and of degree. 82 There are two other material considerations which I mention here. The first is whether in a case of multiple contraventions by a respondent, the contraventions may be viewed as part of a course of conduct by that respondent for the purpose of assessing what penalties are appropriate for each contravention. In this case, s 557(1) of the Fair Work Act which aggregates two or more contraventions by the same person if the contraventions arose out of a course of conduct, is not applicable. That is because s 557(2) of the Act specifies those provisions to which s 557(1) is applicable, and the provisions of the Act that were contravened in the present case are not specified. However, in the case of multiple contraventions by a respondent it remains necessary to examine all the conduct and to enquire how its course and its explanation factually and legally informs the imposition of penal orders, in particular to avoid double punishment: Transport Workers' Union of Australia v Registered Organisations Commissioner [No 2] [2018] FCAFC 203; 363 ALR 464 at [91]. Unlike s 557(1) of the Act, this examination does not commence or end with an assumption that contraventions are part of a single course of conduct, or confine the maximum allowable penalty to that which would be applicable for one contravention: Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Nine Brisbane Sites Appeal) [2019] FCAFC 59; 366 ALR 698 at [12] (Allsop CJ, Griffiths J at [13] agreeing). This issue raises questions of fact and degree that may inform the exercise of the Court's discretion in fixing penalties for the individual contraventions so as to avoid double punishment. 83 The second material consideration is the principle of totality which involves a final check on the overall result to ensure that the total of the penalties that are imposed on a respondent for multiple contraventions is not excessive. There is in my view much overlap between the totality principle and the examination of the whole of a respondent's conduct for the purpose of fixing appropriate penalties where there have been multiple contraventions arising from that conduct.

[32]

Proportionality 84 Before turning to the question of the imposition of a penalty on the individual respondents, I shall consider a question of principle raised by the parties' submissions, which is the proportionality of the penalty to the contravention. 85 In making its assessment of penalty, the Court must determine a penalty that is proportionate to the contravening conduct: The Non-Indemnification Personal Payment Case at [20], [22]. Counsel for the CFMEU respondents submitted that while the primary purpose of imposing civil penalties under the Fair Work Act is specific and general deterrence, a civil penalty should not exceed what is proportionate to the objective seriousness of the contravening conduct, citing (inter alia) Parker v Australian Building and Construction Commissioner [2019] FCAFC 56; 365 ALR 402 at [339] (Besanko and Bromwich JJ, Reeves J agreeing), and Veen v The Queen (No 2) [1988] HCA 14; 164 CLR 465 where Deane J stated at p 491 - It is only within the outer limit of what represents proportionate punishment for the actual crime that the interplay of other relevant favourable and unfavourable factors - such as good character, previous offences, repentance, restitution, possible rehabilitation and intransigence - will point to what is the appropriate sentence in all the circumstances of the particular case. 86 Earlier in Veen v The Queen (No 2), at p 477-8, Mason CJ, Brennan, Dawson and Toohey JJ stated - There are two subsidiary principles which should be mentioned. The first is that the antecedent criminal history of an offender is a factor which may be taken into account in determining the sentence to be imposed, but it cannot be given such weight as to lead to the imposition of a penalty which is disproportionate to the gravity of the instant offence. To do so would be to impose a fresh penalty for past offences: Director of Public Prosecutions v. Ottewell ([1970] AC 642 at p 650). The antecedent criminal history is relevant, however, to show whether the instant offence is an uncharacteristic aberration or whether the offender has manifested in his commission of the instant offence a continuing attitude of disobedience of the law. In the latter case, retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted. It is legitimate to take account of the antecedent criminal history when it illuminates the moral culpability of the offender in the instant case, or shows his dangerous propensity or shows a need to impose condign punishment to deter the offender and other offenders from committing further offences of a like kind. Counsel for the applicant submitted that antecedent criminal history was relevant only to a prisoner's claim for leniency. That is not and has never been the approach of the courts in this country and it would be at odds with the community's understanding of what is relevant to the assessment of criminal penalties. [Emphasis added] 87 In reliance on Veen v The Queen (No 2), counsel for the CFMEU respondents submitted that the prior record of a contravener does not permit the imposition of a penalty that is disproportionate to the offending conduct for which the penalty is to be imposed, and that while a contravener's record is relevant to determining the appropriate penalty to be imposed, the penalty is to be within the range set by the objective seriousness of the contravener's conduct. Counsel submitted that the concept of proportionality, which applies in civil penalty proceedings, fixes the outer limits of a permissible penalty, citing Ryan v The Queen [2001] HCA 21; 206 CLR 267 at [48] (McHugh J), Australian Building and Construction Commissioner v Huddy (No 2) [2017] FCA 1088 at [42] (White J), and Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2010] FCA 977; 199 IR 373 at [5] (Barker J). The CFMEU respondents accepted that there was a history of contravening conduct by them. However, they submitted that while that history indicated that considerations of specific deterrence will be important in the exercise of the discretion to impose a penalty, the penalty imposed should not exceed what is appropriate having regard to the objective seriousness demonstrated by the nature and circumstances of the contravening conduct, citing R v McNaughton [2006] NSWCCA 242; 66 NSWLR 566 at [26], and Hoare v The Queen [1989] HCA 33; 167 CLR 348 at p 354. 88 In response, the Commissioner accepted that any penalty imposed on the CFMEU respondents had to be proportionate, citing The Non-Indemnification Personal Payment Case [2018] FCAFC 97; 264 FCR 155 at [22]. The Commissioner submitted that an evaluation of proportionality is to be undertaken by reference to the objective seriousness of the contravention together with the circumstances of the contravener. The Commissioner submitted that the consideration of deterrence is therefore reflected in the assessment of proportionality by taking into consideration the contravener's culture of compliance with the law. Accordingly, where the contravener is a recidivist, very high or maximum penalties may be imposed notwithstanding that the contravention in issue is not of the worst kind. The Commissioner relied on the decisions of the Full Court in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) [2018] FCAFC 126 at [14], [24]-[27] (Tracey J) and [66]-[69] (Logan J); Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 113; 254 FCR 68 at [100]-[104] (Dowsett, Greenwood and Wigney JJ); and Parker v Australian Building and Construction Commissioner [2019] FCAFC 56; 365 ALR 402 at [341]-[342], [363] (Besanko and Bromwich JJ, Reeves J agreeing). The Commissioner submitted, however, that there were some authorities that appeared to adopt a narrower view of the assessment of proportionality, and that these authorities limited the measurement of proportionality by reference to the objective seriousness of the instant contravention, and cited (inter alia) the dissenting judgment of Bromwich J in The Broadway on Ann Case at [102], and Auimatagi v Australian Building and Construction Commissioner [2018] FCAFC 191; 363 ALR 246 at [176] (Allsop CJ, Collier and Rangiah JJ in obiter). 89 I shall address the inter-relationship between the object of deterrence underpinning the imposition of civil penalties, the relevance of past contraventions, and the application of principles of proportionality, by reference to three recent Full Court decisions where that consideration formed part of the ratio of those decisions. In those circumstances, it is unnecessary that I consider the dissenting reasons of Bromwich J in The Broadway on Ann Case, or the reference to them by the Full Court in Auimatagi v Australian Building and Construction Commissioner at [176], where the appeal was allowed on liability issues and penalty therefore did not arise for decision on appeal: see, Holmes à Court v Papaconstuntinos [2011] NSWCA 59 at [3] (Allsop P), (note that the decision was affirmed on appeal in Papaconstuntinos v Holmes à Court [2012] HCA 53; 249 CLR 534). 90 In the Non-Indemnification Personal Payment Case, the matter came before the Full Court upon a remitter from the High Court for the reimposition of penalties: see, Australian Building and Construction Commissioner v Construction Forestry Mining and Energy Union [2018] HCA 3; 262 CLR 157 at p 206. The following principles were stated at [22] of the reasons for judgment of the Full Court (Allsop CJ, White and O'Callaghan JJ) - The overwhelming importance of deterrence as the protective purpose of the penalty does not exclude the need to determine a penalty which is proportionate to the contravening conduct. The history of contravention is to be taken into account in fixing the proper level of penalty for the proportionate response to the contravention in question. Proportionality has within it the need to characterise the seriousness of the contravention. Proportionality of penal response to a contravention assessed by reference to its seriousness and gravity is an essential characteristic of the application of the statute. The penal response is for that contravention, not earlier contraventions: Veen v The Queen [No 2] [1988] HCA 14; 164 CLR 465 at 477-478. Prior contraventions may reveal an apparent disregard for the Act and the need for deterrence by a penalty at a level appropriate to achieve that objective. It is to be borne in mind, however, that it is for the conduct in question that the penalty is imposed, not for prior conduct. 91 The above passage was cited by Tracey J in the Broadway on Ann Case at [13], which is the second Full Court case to which I refer. In that case, the Full Court set aside the decision of the primary judge on the ground that there had been an error of principle, and by majority (Tracey J and Logan J, Bromwich J dissenting) the Court refixed the penalties at the maximum available, as the primary judge had done. Tracey J at [27] held that a number of considerations combined to emphasise the objective seriousness of the CFMEU's conduct in that case. His Honour identified those considerations at [25] as follows - The many decisions of the Court over the past 15 years in which the CFMEU has been found liable and penalised for failures to comply with entry requirements on building sites and for the misconduct of its officials whilst exercising rights of entry on those sites. The failure of the CFMEU to respond to these repeated findings by acknowledging error and implementing remedial measures. The absence of any contrition for the earlier offending. The absence of any contrition for the present offending. The ongoing willingness of the CFMEU to pay the pecuniary penalties imposed by the Court by drawing on its considerable financial resources. The fact that it was a State Divisional President of the CFMEU who was found to have engaged in multiple contraventions on the site. The blatant and public assertion by such a senior official that he would not comply with the notice requirements imposed by the Fair Work Act. 92 Logan J, with whose reasons Tracey J agreed, addressed an argument by the CFMEU with reference to Veen v The Queen (No 2) that prior contraventions cannot lead to the imposition of a penalty that is disproportionate to the gravity of the instant offence. In addressing that argument, Logan at [68] referred to the passage from the reasons of Mason CJ, Brennan, Dawson and Toohey JJ in Veen v The Queen (No 2) that I have set out and emphasised at [86] above and then stated at [69] - We are bound by [Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate; Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate (the Agreed Penalties case) [2015] HCA 46; 258 CLR 482] to recognise and give effect to a civil penalty regime the purpose of which is ensuring compliance with norms of industrial behaviour prescribed by Parliament in the public interest. To view the conduct of the CFMEU on 10 February 2015 in isolation from the past and to penalise on the basis that there have been worse cases is to fail to recognise that the conduct is but a further manifestation of a lengthy and repeated pattern of unrepentant, outlaw behaviour by the CFMEU. 93 Logan J then stated that all of the features of unrepentant, outlaw behaviour were present in the conduct of the CFMEU official, Mr Hanna, on the day in question, which was accepted as giving rise to six separate contraventions. Logan J concluded at [87] - Approaching the subject of penalisation afresh and for all of the reasons given, I consider that the maximum penalty in respect of each contravention is warranted in the circumstances of this case. Being of this view, I have, in deference to the totality principle, asked myself whether, in total, such an overall penalty would be a disproportionate response in the overall circumstances of the case? So recalcitrant is the contravening conduct charged having regard to the past history in the tabulation and such is the importance of deterrence and compelling conformity with the requirements of the [Fair Work Act] my view is that only the most condign penalisation of a cumulative maximum punishment is warranted in the circumstances of this case. I would impose that so as to bring home emphatically to the CFMEU that, in its internal governance, it must force systemic behavioural change upon its Construction Division. That penalisation is necessary but it can be viewed as a cruel necessity. The cruel element is that there is an opportunity cost in the payment of the total penalty in terms of other activities, beneficial to members, to which the union's funds might otherwise be deployed. It is to be hoped that the realisation of that promotes change in the internal governance of the CFMEU. 94 The third recent Full Court case to which I refer is Parker v Australian Building and Construction Commissioner [2019] FCAFC 56; 365 ALR 402. In that case, Besanko and Bromwich JJ, with whom Reeves J agreed, stated at [339] - As to the second consideration, being the use that was put by the primary judge to prior contraventions, especially in respect of the CFMEU, a court imposing a civil penalty is entitled to have regard to such prior contraventions in the exercise of the discretion, but that does not permit such a history to be given such weight as to lead to the imposition of a penalty that is disproportionate to the gravity of the contravention that is being considered: Veen (No 2) at 477. That is because a court should impose a penalty that is proportionate to the gravity of the contravention being sanctioned, and no more. This is also supported by s 546(1) of the Act, which expressly provides for what would otherwise likely be implicit, namely, for the Court to fix an "appropriate" penalty for a contravention. A civil penalty that is not proportionate cannot be regarded as appropriate, and therefore cannot meet that statutory requirement. 95 At [340] their Honours cited The Non-Indemnification Personal Payment Case at [22] which I have set out at [90] above, before stating at [341] - Thus, the role of any past contraventions is to be no more than a prism through which to view the instant contravention. This enables a court to assess whether, for example, the instant contravention is an "uncharacteristic aberration", or whether the contravener has, by the instant conduct, manifested "a continuing attitude of disobedience of the law". If the latter, as is clearly available to be concluded in this case, the heightened need for deterrence may indicate that a more severe penalty is warranted for the instant contravention. Nonetheless, that penalty must still fall within the applicable range that is otherwise considered appropriate for that contravention. If that is not carefully observed, the contravener may suffer the fate of being sanctioned anew for past contraventions, as the above quote from Veen (No 2) makes clear is not permitted. 96 On the issue of the relevance of past contraventions by the CFMEU respondents and proportionality, I shall apply the principles and guidance identified in The Non-Indemnification Personal Payment Case, the Broadway on Ann case, and in Parker in the passages to which I have referred above. I accept the submission made on behalf of the CFMEU respondents that the prior record of a contravener does not permit the imposition of a penalty that is disproportionate to the offending conduct for which the penalty is to be imposed. But Veen v The Queen (No 2), the reasons of Tracey J and Logan J in the Broadway on Ann case, and the reasons of the members of the Court in Parker support the idea that past contraventions may be relevant in assessing the seriousness of the instant contraventions. A history of contraventions may affect a number of features of the instant contraventions, including whether the instant contraventions are a manifestation of a continuing attitude of disobedience to the law. For this reason, and when all the background circumstances and other features of a contravention are considered, what might in isolation and superficially be a minor contravention may take on the complexion of a much more serious contravention. And consistently with deterrence being the principal object of the imposition of civil penalties under the Fair Work Act, a history of contravention may point to a need for a more severe penalty than would otherwise be the case if there was no history of contravention. The significance of a history of contraventions may be compounded by the absence of contrition, and the absence of evidence addressing steps taken to ensure future compliance with the law. For these reasons, a severe penalty may be proportionate to what might in other circumstances be a minor contravention. Overriding these considerations is the care that should be exercised to ensure that any penalties imposed for the instant contraventions do not amount to double punishment for prior contraventions. Care in avoiding double punishment also informs other aspects of the process of fixing penalties, including whether the contraventions are part of a course of conduct, and the totality principle.

[33]

(1) The CFMEU 97 I shall impose penalties on the CFMEU for the following contraventions - (1) the representation made by Mr Theodorou to Mr Seckold of Hughes Demolition on 23 October 2013 which is referred to at [27] above which Tracey J found constituted a contravention by the CFMEU of s 345 and s 349 of the Act, in respect of which one penalty shall be imposed (s 556); (2) the representation made by one of Mr Theodorou or Mr Reardon to Mr Seckold of Hughes Demolition in late October 2013 and referred to at [30] above which Tracey J found constituted a contravention by the CFMEU of s 345(1) and s 349(1) of the Act, in respect of which one penalty shall be imposed (s 556); and (3) the threat made by Mr Theodorou to Mr Seckold of Hughes Demolition on 15 November 2013 and referred to at [33] above which Tracey J found constituted a contravention by the CFMEU of s 340, s 343, and s 349 of the Act, in respect of which one penalty shall be imposed (s 556). 98 I consider that the separate representations on 23 October 2013 and in late October 2013 were linked factually, and that the contraventions had as a common feature that the CFMEU represented to Hughes Demolition that it was required to enter into an enterprise agreement, when there was no such requirement. At [296] Tracey J found that it was as a result of two telephone conversations that Mr Seckold had with Mr Theodorou on 23 October 2013 that he attended the CFMEU's offices shortly thereafter where the second representation was made. I am not satisfied that this constituted a single course of conduct, but I am satisfied that the two contraventions were related. I will take account of this circumstance so as to avoid imposing penalties for the separate contraventions in a way that might give rise to double punishment. On the other hand, I consider the contraventions of the CFMEU that occurred on 15 November 2013 involved different conduct that was factually distinct, even though the contraventions might be said to have been directed at the same object. 99 Tracey J found at [302] that the representations made to Mr Seckold in October 2013 were made in order to give effect to a union policy that was inconsistent with the Fair Work Act to the extent that the policy required contractors working on city construction sites to enter into enterprise agreements with the CFMEU. Tracey J found that this inconsistency between Union policy and the Act was well known to the two experienced officials involved in making the representations, and that the representations that were made to Mr Seckold were intended to be misleading. Tracey J found at [303] that the maker of each statement intended that Mr Seckold would accede to the demand, and that Mr Seckold relied on the representations, at least to an extent, by seeking advice about making an EBA. I therefore reject the submission of the CFMEU respondents that Hughes Demolition did not act on the representations. 100 In relation to the threat made by Mr Theodorou on 15 November 2013 to ban Hughes Demolition employees from the project site, Tracey J found at [416] that Mr Theodorou intended to negate Hughes Demolition's choice as to whether to enter into an EBA or to comply with the CFMEU's request that it do so. Necessarily, the threat giving rise to the contraventions that occurred on 15 November 2013 was deliberate. 101 In assessing the penalties to be imposed upon the CFMEU, I take account of its substantial financial position, and its history of contraventions of industrial legislation. The table of contraventions that was tendered identified 142 proceedings between 2003 and 2018 in which findings of contraventions of industrial legislation have been made against the CFMEU as a result of its conduct in the building and construction industry. I have paid particular attention to the prior conduct of the CFMEU which resulted in findings of contravention and penalties in Director of the Fair Work Building Industry Inspectorate v Construction Forestry Mining and Energy Union [2015] FCA 353, which was listed in the table of prior penalties that was tendered without objection as evidence of its truth. The table states that in June and July 2013 CFMEU officials entered a building site in Hawthorn in Melbourne and in contravention of ss 340, 343 and 348 of the Fair Work Act made threats of industrial action with the intent of coercing the head contractor to enter into an enterprise agreement with the CFMEU. The significance of that history of contravention is that it informs the seriousness of what occurred in the instant case, but taking care so as not to impose double punishment for the prior contraventions. It could not be supposed that the CFMEU's conduct in the instant case was an aberration, and of course the CFMEU put no such submission. 102 There was no evidence tendered on behalf of the CFMEU relating to penalty, or at all. Therefore, there was no evidence that addressed the question whether the CFMEU has taken any steps to ensure that it will comply with industrial laws in the future. Nor were any submissions made by the CFMEU to suggest that any change in attitude might ever occur. Rather, the submissions proceeded upon an acceptance that the CFMEU's history of contravening conduct is well-known to the Court, and little more. These considerations have the consequence that in assessing a penalty that is proportionate to the contraventions that occurred in this case, in addition to the seriousness of the contraventions being assessed in light of prior contraventions, the heightened need for deterrence indicates that a more severe penalty is warranted. 103 In assessing appropriate penalties to impose on the CFMEU, I give some allowance in a way favourable to the CFMEU for its consent to proceed upon the findings of Tracey J as the foundation upon which any penalties are to be assessed and orders made. I do so because: (1) it involved the CFMEU accepting the contraventions, albeit at a very late stage and in the face of the comprehensive findings of Tracey J; (2) it facilitated the course of justice; and (3) I consider that parties to penalty proceedings should be encouraged to adopt reasonable positions: see, The Non-Indemnification Personal Payment Case at [17]; Mornington Inn Pty Ltd v Jordan [2008] FCAFC 70; 168 FCR 383 at [76] (Stone and Buchanan JJ). 104 I do not accept the Commissioner's submission that maximum penalties should be imposed on the CFMEU. In relation to the representations in October 2013, I consider the proportionate response to that conduct to be a penalty towards the upper mid-range, having regard to the contraventions themselves, the history of contraventions by the CFMEU, the absence of any material to suggest that the CFMEU proposes to comply with industrial laws in the future, the financial strength of the CFMEU, and the need for a more severe penalty in order to meet the object of deterrence. In assessing penalty for the two contraventions in October 2013, I shall ameliorate the penalties by having regard to the factual relationship between them, but not to the extent submitted by the CFMEU, which was to treat the maximum penalty as applying to both contraventions. In relation to the threat made on 15 November 2013, I consider that a proportionate penalty is at the upper mid-range. In relation to the penalties in their totality, I have had regard to whether they are excessive, and I am satisfied that they are not. 105 The penalties that I impose on the CFMEU are as follows - (1) For the representation on 23 October 2013 I impose one penalty for the contravention of s 345 of the Act in the sum of $18,000. Pursuant to s 556 of the Act, I do not impose a penalty for the contravention of s 349. (2) For the representation in late October 2013 at the meeting at the CFMEU offices, I impose one penalty for the contravention of s 345 of the Act in the sum of $18,000. Pursuant to s 556 of the Act, I do not impose a penalty for the contravention of s 349. (3) For the threat that was made by Mr Theodorou on 15 November 2013 I impose one penalty for the contravention of s 343 of the Act in the sum of $36,000. Pursuant to s 556 of the Act, I do not impose a penalty for the contraventions of s 340 or s 348.

[34]

(2) Mr Theodorou 106 Mr Theodorou was an official of the CFMEU, and the evidence before the Court is that he remains an official. Obviously enough, the CFMEU acts through its human agents, and the imposition of penalties on any of its officials who have been found to have contravened the Act is to be directed towards deterrence, both specific and general. 107 A table in evidence before the Court shows that Mr Theodorou has been the subject of adverse findings in three other proceedings concerning contraventions of industrial legislation in respect of conduct occurring in 2011, 2012, and 2014. One such penalty was imposed on Mr Theodorou on 31 May 2013, several months before he engaged in the contraventions the subject of this proceeding. Like the CFMEU, the significance of that history of contravention is that there is no direct evidence before the Court from Mr Theodorou that he has taken heed of the findings against him or the penalties that have been imposed on him. There is no evidence concerning whether Mr Theodorou has taken steps so that he will comply with industrial laws in the future. There is no evidence before the Court of Mr Theodorou's assets. If that was a material consideration in his favour, then Mr Theodorou was in the best position to adduce that evidence. 108 Having regard to these matters, I consider that the appropriate penalty for Mr Theodorou's representation on 23 October 2013 to be towards the mid-range. The coercive threat on 15 November 2013 was more serious, and I assess the penalty at the upper mid-range. In the assessment of both penalties I shall take account of Mr Theodorou's agreement to accept the findings of Tracey J. I have also considered both penalties in their totality to ensure that the combined penalties are not excessive. 109 The Commissioner sought a personal payment order in terms that correspond to the order that was made in The Non-Indemnification Personal Payment Case (No 2) [2018] FCAFC 114; 281 IR 306. Mr Theodorou resisted the making of such an order, submitting that the implied power to make such an order should only be exercised with caution, and only where it is required by the circumstances of the contravening conduct and the contravener to accomplish the deterrent effect of the penalty. Mr Theodorou submitted that the objective seriousness of his contravening conduct was far removed from that considered by the Full Court in The Non-Indemnification Personal Payment Case, and was not so egregious as to call for the imposition of a personal payment order. 110 I reject the submissions made on behalf of Mr Theodorou. I do not consider that the implied power to make a personal payment order is to be reserved for cases where the contraventions are egregious. The main consideration is to give the penalties that will be imposed upon Mr Theodorou their intended deterrent effect by ensuring that the burden of the penalty is recognised. Having regard to Mr Theodorou's prior contraventions, and the absence of any evidence or submissions directed towards contrition or his future compliance with industrial legislation, a personal payment order should be made to further the objects of specific and general deterrence. A personal payment order will, as far as possible, be directed towards the penalties having a burden on Mr Theodorou so as to operate as a specific deterrent on him, and generally on other CFMEU officials: The Non-Indemnification Personal Payment Case at [40]. I have taken account of the personal payment order in determining the penalties imposed on Mr Theodorou. 111 I shall impose penalties on Mr Theodorou for the following contraventions - (1) For the representation on 23 October 2013 I impose one penalty for the contravention of s 345 of the Act in the sum of $3,600. Pursuant to s 556 of the Act, I do not impose a penalty for the contravention of s 349. (2) For the threat that was made by Mr Theodorou on 15 November 2013, I impose one penalty for the contravention of s 343 of the Act in the sum of $5,400. Pursuant to s 556 of the Act, I do not impose a penalty for the contraventions of s 340 or s 348.

[35]

(3) Harris Interiors 112 I reject the submissions of the Harris respondents that no penalties should be imposed upon them. In particular, I reject the submission that the case against the Harris respondents might have been more appropriately dealt with by way of an enforceable undertaking. That submission was misplaced and, if anything, suggested that Harris Interiors did not regard the findings of Tracey J as being of sufficient significance to justify the Commissioner seeking the imposition of penalties. The contraventions of the Fair Work Act by the Harris respondents were sufficiently serious to warrant the imposition of penalties, principally as a measure of general deterrence. 113 There was a dispute at the hearing before Tracey J as to whether, prior to entry into its sub-contract, Hughes Demolition had represented to Harris Interiors that it had an EBA in place. The dispute was the subject of conflicting evidence relating to two meetings between the parties: one on 24 September 2013, and the other on 1 October 2013. Tracey J held at [23] that it was difficult to determine whether an EBA had been discussed at the meeting on 24 September 2013, and at [28] held that it was difficult to determine precisely what was said at the meeting on 1 October 2013. Subsequently, Harris Interiors sent several emails to Hughes Demolition between 2 and 17 October 2013 which are referred to in the reasons of Tracey J at [29]-[34]. Only one of those emails requested production of an EBA. Harris Interiors permitted Hughes Demolition to commence work at the site on 10 October 2013, and executed the sub-contract on 18 October 2013 without Hughes Demolition having produced an EBA. 114 Thereafter, on 22 and 23 October 2013 and after Mr Theodorou of the CFMEU had become interested in the site, Harris Interiors requested copies of Hughes Demolition's EBA. Those emails are referred to in the reasons of Tracey J at [44]-[47]. Two of those emails asserted that Hughes Demolition had confirmed in meetings prior to the award of the sub-contract that it had an EBA in place. Tracey J did not make any findings as to whether Hughes Demolition had made those representations at the meetings. It would not be appropriate for me to make any findings on the contested issue of what was said at the meetings, which would involve the evaluation of the evidence of witnesses who had differing recollections where Tracey J, who had the benefit of seeing the witnesses, found that it was difficult to determine precisely what was said. Moreover, the hearing before me proceeded on the basis of the findings made by Tracey J, and not the evidence that was before his Honour: see, Evidence Act, s 191(2)(b). 115 Tracey J found at [356], [363], [368]-[369] and [371] that the conduct of Harris Interiors, Mr Dwyer, Mr Darker, and Mr Silvestro was linked to the failure of Hughes Demolition to comply with the CFMEU's demand that it enter into an EBA. Whatever may have been the belief of the Harris respondents as to the representations that had been made by Hughes Demolition prior to its engagement, the contravening conduct in which they engaged was in order to give effect to the CFMEU's demands that Hughes Demolition enter into an EBA that was suitable to it. That was a practice that was the subject of findings of the Royal Commission into the Building and Construction Industry in February 2003. There are thousands of small contractors in the construction industry, and they are susceptible to pressure being applied by unlawful means to enter into union-approved enterprise agreements as a condition of commencing or continuing their work. I regard the contraventions of the Harris respondents as being the result of deliberate conduct on their part, but I do not find that they knowingly breached the law. Penalties against the Harris respondents must be imposed and fixed at a level that will deter other contractors from engaging in such unlawful practices. 116 In relation to all the Harris respondents, the fact that they have no history of contraventions of industrial legislation weighs in their favour. The seriousness of the contraventions by them is to be looked at through the prism that they have not offended before, or since. 117 Overall, I regard the position taken by the Harris respondents in relation to the investigation and prosecution of the proceedings as being neutral on the question of penalty, save that I take into account in their favour their agreement to accept the findings of Tracey J for the purposes of considering penalties. 118 As to the adverse publicity upon which the Harris respondents relied, that publicity is no more than an ordinary incident of the discharge of the Commissioner's functions under s 16(1) of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth), the corresponding functions of the Director under s 10 of the Fair Work (Building Industry) Act 2012 (Cth) (repealed from 2 December 2016), and the prosecution of this proceeding. I do not take the publicity into account as a matter in mitigation: see, Cousins v Merringtons Pty Ltd (No 2) [2008] VSC 340 at [64] (Hansen J). Indeed, publicity is necessary so that any penalties achieve the object of general deterrence. 119 I consider that the steps that the Harris respondents have taken to acquaint themselves with their obligations under industrial laws by undertaking training seminars and by other means to be matters in their favour. I also consider the fact that each of the individual Harris respondents and Mr Headberry gave affidavit evidence on the question of penalty in which they expressed awareness of their obligations and identified the steps that they have taken to ensure compliance in the future is relevant. I reject the submission of the Commissioner that the co-operation of Harris Interiors in relation to other matters is not relevant. I take the view that co-operation in the other matters together with the steps taken by Harris Interiors to engage the Commissioner for educational purposes is relevant to any need for specific deterrence. These circumstances indicate that general deterrence rather than specific deterrence should be the main object of penalties to be imposed on the Harris respondents. 120 Profit and loss statements and balance sheets of Harris Interiors were not in evidence. For the purpose of evaluating what level of penalty is sufficient to meet the object of general deterrence, I shall regard Harris Interiors as a substantial enterprise. 121 Harris Interiors sought to rely on a business document that it tendered titled "Cheques Enquiry" dated 24 September 2018 as evidence that it had tendered a cheque in the sum of $616 to Hughes Demolition as compensation for its lost time on 19 November 2013. I infer from the document that the cheque was raised on or about 21 September 2018 and remained unpresented as at 24 September 2018, which is unremarkable. Although the quality of the evidence adduced by Harris Interiors as proof that it had endeavoured to pay this sum to Hughes Demolition is slim, in the absence of contradictory evidence adduced by the Commissioner, and in the absence of any challenge to the inference by cross-examination, I accept that the cheque was drawn and sent to Hughes Demolition, and I give it some weight as indicating an acceptance by Harris Interiors of the findings of contravention made by Tracey J. 122 I have given consideration to the question of parity between the penalties to be imposed upon the CFMEU and Mr Theodorou, and the penalties to be imposed on the Harris respondents: see, NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission [1996] FCA 1134; 71 FCR 285 at p 295 (Burchett and Kiefel JJ). The penalties to be imposed on the Harris respondents will be at a lower level, because the seriousness of their contraventions is to be assessed having regard to the absence of any history of contraventions. Further, the evidence that they have adduced and which I accept as showing their desire to comply with industrial laws, stands in marked contrast to the position taken by the CFMEU and Mr Theodorou, and therefore differential treatment of the respondents is required. 123 In relation to Mr Darker's email of 15 November 2013, which was the subject of the findings by Tracey J at [361]-[364], that email was sent by Mr Darker at Mr Dwyer's direction, shortly after the conversation between Mr Dwyer and Mr Seckold which was the subject of his Honour's findings at [354]-[359]. For the purposes of assessing penalties to be imposed on Harris Interiors, I regard the two contraventions as factually linked, and I will take this into account in fixing penalties so as to avoid double punishment. 124 In assessing the gravity of the conduct of Harris Interiors, I take account of the findings of Tracey J at [368] and [357] that one of the motivations of Mr Dwyer and Mr Silvestro was to keep the project moving: see the observations of Katzmann J in Construction, Forestry, Mining and Energy Union v Pilbara Iron Co (Services) Pty Ltd (No 4) [2012] FCA 894; 225 IR 113 at [22]. I consider that Mr Dwyer and Mr Silvestro must have found themselves in difficult circumstances brought about by the interest shown in the project by the CFMEU which their training and education at that point may not have equipped them sufficiently to address. I give more weight to that consideration in assessing the individual penalties to be imposed on Messrs Silvestro, Darker, and Dwyer than in relation to Harris Interiors itself. 125 Overall, the combination of factors to which I have referred above indicates that in respect of Harris Interiors penalties towards the lower end of the range are appropriate, but at a sufficient level to give effect to the object of general deterrence. 126 I shall impose the following penalties on Harris Interiors - (1) For Mr Dwyer's conduct on 15 November 2013 in saying to Mr Seckold that if he did not "sign the EBA with the union then your boys would not be able to work on the site on Tuesday", I impose upon Harris Interiors one penalty for contravention of s 343 of the Act in the sum of $6,300. Pursuant to s 556 of the Act, I do not impose a penalty for the contraventions of s 340 or s 348. (2) For Mr Darker's conduct on 15 November 2013 in sending an email to Mr Seckold stating that if an EBA was not signed with the CFMEU by the following Monday, "additional sourced of fully compliant labour will required to be sourced by Tuesday onsite, as this project must be kept moving. If this cannot be sourced we will have no other option but to find the additional labour", I impose upon Harris Interiors one penalty for the contravention of s 343 of the Act in the sum of $6,300. Pursuant to s 556 of the Act, I do not impose a penalty for the contraventions of s 340 or s 348. (3) For Mr Silvestro's conduct on the morning of 19 November 2013 in stopping the Hughes Demolition employees from working, I impose upon Harris Interiors one penalty of $10,800 for the contravention of s 340 of the Act. Pursuant to s 556 of the Act, I do not impose a penalty for the contravention of s 354. 127 I have considered these penalties in their totality, and I am satisfied that in combination they are not excessive.

Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining, and Energy Union

At a glance

Court

Decision date

Before

Source

Judgment (40 paragraphs)

Parties

Legislation Cited (6)

Cases Cited (33)

Cited By (17)