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

THE AGREED CONTRAVENING CONDUCT 8 Bovis Lend Lease Pty Ltd ("Bovis") was the principal building contractor at a building site known as the Caroline Springs Square Shopping Complex ("the Site"). The building works that were undertaken at the Site comprised the extension of the Caroline Springs Shopping Complex. The total value of the building project was approximately $30,000,000. 9 Bovis engaged a number of subcontractors to perform work on its behalf at the Site. Those subcontractors were: (a) Akron Roads Pty Ltd ("Akron"); (b) KLM Group Limited ("KLM"); (c) Geschke Pty Ltd ("Geschke"); (d) Stilcon Holdings Pty Ltd ("Stilcon"); (e) Entire Fire Production Ltd ("Entire Fire"); and (f) Meridian Concrete Australia Pty Ltd ("Meridian"). A further subcontractor, ADH Plumbing Pty Ltd was engaged to perform work at the Site on behalf of Entire Fire. 10 It is admitted that Akron, KLM, Geschke, Stilcon, Meridian, ADH Plumbing and Bovis were each a "constitutional corporation" and a "building industry participant" for the purposes of s 4 of the BCII Act. It is further admitted that the work performed at the Site by the subcontractors was "building work" for the purposes of s 5 of the BCII Act. 11 In 2008, Bovis sought to implement a safety and security system for the Site, and at various other sites it had been contracted to perform works, which was called the "Blue Glue System" ("BGS"). The CFMEU opposed the implementation of the BGS at Bovis sites ("the BGS industrial objective") from in or around May 2008 until the end of December 2008 ("the BGS Industrial Dispute"). 12 On 19 November 2008, a request was made from the Bovis General Foreman at the Site, Mr Donahue, to Akron's foreman, Mr Meyzies, to ensure that Akron employees were present at the Site the following day to have their photos taken for the purpose of the BGS. On 20 November 2008, Mr Meyzies requested that Mr Wheadon, an Akron employee, have his photo taken. Wheadon replied that he first must consult with the CFMEU, which he did. 13 Later the same morning, the Second Respondent ("Reardon") entered the Site and asked Mr Donahue if he intended to take photos of "the men" for the purposes of the BGS. At about 9:20am Reardon proceeded to conduct a meeting ("the 20 November meeting") with approximately 50 to 55 employees and labour hire subcontractors engaged by Akron, KLM, Geshke, Meridian, Stilcon and ADH plumbing at the Site ("the 20 November subcontractors and employees"). 14 During the 20 November meeting, Reardon discussed the proposed use of the BGS by Bovis at the Site and other sites operated by Bovis and directed the 20 November subcontractors and employees to not perform any further work that day or for the next two days at the Site. Following the meeting, Reardon said to Mr Raff Vilardo, a Stilcon construction manager, words to the effect that "the guys had to be taken off that site and could not come back until Monday". 15 By reason of the 20 November meeting: (a) from approximately 11:00am on 20 November 2008, the 20 November subcontractors and employees refused to perform work at the Site until the completion of work that day (with the exception of the subcontractors and employees engaged by Geshke, who refused to perform work from approximately 1:30pm on 20 November 2008); (b) approximately 50 to 55 employees and subcontractors engaged by Akron, KLM, Geshke, Stilcon and ADH Plumbing refused and failed to perform any work at the Site on 21 November 2008; and (c) approximately 50 to 55 employees and subcontractors engaged by Akron, KLM Stilcon and Meridian refused and failed to perform any work at the Site on 22 November 2008. ("the November 2008 Industrial Action")

CONTRAVENTIONS OF THE BCII ACT 16 The CFMEU admits that the November 2008 Industrial Action constituted a contravention by the CFMEU of s 38 of the BCII Act. Each of the necessary constituent elements of engaging in "unlawful industrial action" pursuant to s 38 were admitted as follows: (a) The November 2008 Industrial Action constituted: (i) a ban, limitation or restriction on the performance of building work at the Site that was adopted in connection with the BGS industrial dispute; and (ii) a failure or refusal by persons to attend for building work at the Site or a failure or refusal to perform any work at all by persons who attend for building work at the Site; (b) The November 2008 Industrial Action was motivated by the following purposes: (i) Supporting or advancing claims against KLM, Akron, Geshke, Meridian, Stilcon, and ADH Plumbing, in respect of the employment of the employees and subcontractors with their respective employer or principal, the claim being in relation to the requirement to have their photo taken for the BGS; and (ii) Advancing the BGS industrial objective; and (c) The November 2008 Industrial Action: (i) adversely affected Bovis, Akron, KLM, Geshke, Meridian, Stilcon and ADH Plumbing, in their capacity as building industry participants; and (ii) was action taken by an organisation, the CFMEU. 17 The CFMEU further admits that Reardon engaged in the November 2008 Industrial Action and that Reardon was at all relevant times an "officer" of the CFMEU for the purposes s 69 of the BCII Act. There is no issue that by reason of that provision, the conduct of Reardon is taken to be conduct of the CFMEU. 18 On the basis of the agreed facts and omissions to which I have referred at [16]-[17], I am satisfied that the CFMEU engaged in unlawful industrial action in contravention of s 38 of the BCII Act. That unlawful industrial action was the engagement by Reardon on 20 November 2008 in the November 2008 Industrial Action, which by reason of s 69 of the BCII Act is deemed to be the conduct of the CFMEU.

RELEVANT PRINCIPLES FOR DETERMINING PENALTY 19 The relevant considerations required for an assessment of the appropriate penalty to be imposed for a breach of the BCII Act have been discussed at length by this Court: see Stuart- Mahoney v CFMEU [2008] FCA 1426 at [40] (Tracey J); Temple v Powell (2008) 169 FCR 169 at [56]-[78] (Dowsett J); Cahill v CFMEU (No 4) [2009] FCA 1040 at [9]-[10] (Kenny J). 20 As the parties have proposed an agreed penalty to be imposed in these proceedings, the relevant question for the Court is whether that agreed penalty is "appropriate in all the circumstances": Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at [51] (Branson, Sackville and Gyles JJ) where the Full Court adopted the reasoning of Burchett and Kiefel JJ (with whom Carr J agreed) in NW Frozen Foods Pty Ltd v ACCC (1996) 71 FCR 285 at 298-299. 21 In Mobil at [51], the Full Court listed the principles enunciated in NW Frozen Foods including that: it is the Court's responsibility to determine the appropriate penalty; determining the quantum of a penalty is not an exact science; there is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy; the view of the regulator, as a specialist body, is a relevant, but not determinative consideration on the question of penalty; in determining whether the proposed penalty is appropriate, the Court examines all the circumstances of the case; where the parties have put forward an agreed statement of facts, the Court may act on that statement if it is appropriate to do so in the circumstances of the case; where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement; the question is whether that figure is, in the Court's view, appropriate in the circumstances of the case; in answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure; and it will be appropriate if within the 'permissible range'. 22 The 'permissible range' of penalties refers to that range that would be permitted by the Court, which is neither manifestly inadequate nor manifestly excessive, and only where the agreed penalty falls outside the permissible range should the court depart from the figure agreed by the parties: see Wells v Locano Management Pty Ltd [2008] FCA 1034 at [23] (Jessup J); Ponzio v B & P Caelli Constructions (2007) 158 FCR 543 at [129] (Jessup J) and Alfred v CFMEU [2011] FCA 556 at [68] (Tracey J). 23 The CFMEU contended, and I agree, that the following principles should also inform the exercise of the Court's discretion: (a) Proportionality: that any penalty imposed should not exceed that which is appropriate or proportionate to the gravity of the contravention found proven in the light of its objective circumstances: Hoare v the Queen (1989) 167 CLR 348 at 354 (Mason CJ, Deane, Dawson, Toohey and McHugh JJ). See also the Veen v The Queen (No 1) (1979) 143 CLR 458 at 467-468 (Stephen J) and 482-483 (Jacobs J) and 495 (Murphy J); Veen v The Queen (No 2) (1988) 164 CLR 465 at 472 (Mason CJ, Brennan, Dawson and Toohey JJ), 485-486 (Wilson J), 490-491(Deane J) and 496 (Gaudron J). This approach has been adopted in relation to contraventions of the BCII Act: Stuart v CFMEU (2010) 185 FCR 308 at [30] (Moore J). (b) Parsimony: the Court must ensure that it imposes the minimum term consistent with the attainment of the relevant purposes of sentences taking care that the punishment is only for the crimes before the Court: R v Valentini (1980) 48 FLR 416 at 420 (Bowen CJ, Muirhead and Evatt JJ). (c) Penalty maximum: that the maximum penalty should be reserved for the worst type of contravention: Veen v The Queen (No 2) at 478 (Mason CJ, Brennan, Dawson and Toohey JJ); Stuart v CFMEU at [30] (Moore J).

THE APPROPRIATE PENALTY 24 I have considered the relevant and applicable considerations for determining an appropriate penalty by reference to the summary of such considerations helpfully provided by Tracey J in Stuart-Mahoney at [40]. The contravention in this case resulted in unlawful industrial action taken over a period of about two and a half days. For at least two days of that industrial action approximately 50 to 55 employees and subcontractors were involved. The conduct occurred in circumstances involving a broader industrial dispute between the CFMEU and its members and Bovis regarding the intention of Bovis to implement the BGS at the Site and a number of other sites it controls. There is nothing before me to suggest that the concern that the CFMEU and its members held in relation to the BGS was not genuine. Nevertheless, the conduct was deliberate and in contravention of the BCII Act. There is no evidence before me in respect of the quantum of any loss sustained as a result of the consequences of the contravening conduct. However, the admitted facts are that the conduct resulted in a delay to the project of at least two days. The delay adversely impacted on the schedule of works and did so at a time when the project was at the stage of a "critical path area", in that the work being completed was major structural work and precaste concrete panels. 25 The ABCC relied upon two schedules which listed cases involving previous contraventions of the BCII Act and other industrial legislation by the CFMEU. It is unnecessary that each of the prior contraventions relied upon be set out. It is sufficient that I state that I am satisfied that the CFMEU has contravened the BCII Act and similar legislation on many occasions and that those prior contraventions have weighed heavily in my consideration as to whether the proposed penalty is appropriate. 26 I have also taken into account the fact that the CFMEU is a large, well resourced, national organisation. Evidence was placed before the Court as to the financial position of the CFMEU. I have no reason to believe that the CFMEU would be unable to meet the penalty which I intend to impose. 27 It is not an issue that the conduct in question relates to a single course of conduct. 28 The ABCC contends that there is no evidence of any expression of contrition or any corrective action having been taken by the CFMEU. Lack of contrition is not necessarily an aggravating circumstance that might increase the penalty to be imposed: BHP Steel (AIS) Pty Ltd v CFMEU [2001] FCA 336 at [10] (Keifel J) and Cahill v CFMEU (No 4) at [87] (Kenny J). However, I am minded to take the view that the respondents have demonstrated a degree of contrition in admitting the contraventions: Cozadinos v CFMEU [2010] FCA 48 at [38] (Marshall J). 29 The respondents have cooperated with the enforcement authority by conceding those facts necessary to prove the contravention and by agreeing to the proposed penalty. The ABCC acknowledged that this conduct had saved the parties the significant time and expense of a lengthy trial. It has also reduced the time and costs expended by the Court and in that regard, from a public policy perspective, such cooperative conduct by the parties in forging a pre-trial agreement should be regarded as beneficial: Wells at [23] (Jessup J). 30 I have taken into account the need for both general and specific deterrence. 31 I am satisfied that the proposed penalty of $50,000 is within the 'permissible range' as an appropriate penalty for the conduct in question. A penalty of $50,000 is neither manifestly inadequate nor manifestly excessive and as it falls within what I consider to be the permissible range, I do not consider that I should depart from the proposed penalty agreed upon by the parties.

DISPOSITION 32 I will make an order that a penalty of $50,000 be imposed on the CFMEU for contravening s 38 of the BCII Act. I will further order that the penalty be paid to the Consolidated Revenue Fund within 28 days of the date of the making of these orders. As neither party has sought their costs in respect of the proceeding, it is appropriate that there be no order as to costs. I certify that the preceding thirty-two (32) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg.