Australian Building and Construction Commissioner v CoreStaff WA Pty Ltd

Federal Court of Australia|2021-09-24|Before: Ms J, Smith J

Counsel for the Applicant: Ms E Raper SC and Mr D Fuller

Solicitor for the Applicant: Herbert Smith Freehills

Solicitor for the First Respondent: DLA Piper Australia

BETWEEN: AUSTRALIAN BUILDING AND CONSTRUCTION COMMISSIONER Applicant

AND: CORESTAFF WA PTY LTD First Respondent

GUMALA ENTERPRISES PTY LTD Second Respondent

order made by: BANKS-SMITH J DATE OF ORDER: 24 SEPTEMBER 2021

The first respondent pay a pecuniary penalty in respect of its contravention of s 351(1) of the Fair Work Act 2009 (Cth) the subject of the declaration made 3 July 2020 in the sum of $20,000, payment to be made in equal parts to Peter Selsmark (50%) and to the Commonwealth (50%).
The second respondent pay a pecuniary penalty in respect of its contravention of s 351(1) of the Fair Work Act the subject of the declaration made 3 July 2020 in the sum of $9,000, payment to be made in equal parts to Peter Selsmark (50%) and to the Commonwealth (50%). Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BANKS-SMITH J: 1 The Commissioner brought these proceedings under s 539 of the Fair Work Act 2009 (Cth) (FW Act) against CoreStaff Pty Ltd and Gumala Enterprises Pty Ltd relating to alleged adverse action against a prospective employee, Peter Selsmark, by way of discrimination based on age. 2 I have previously delivered judgment and liability reasons in this matter: Australian Building and Construction Commissioner v CoreStaff WA Pty Ltd [2020] FCA 893. 3 I made the following declaration following judgment: 1. On 25 October 2018 the first respondent took adverse action against Peter Selsmark within the meaning of Item 2(a) of s 342(1) of the Fair Work Act 2009 (Cth) (FW Act), because of his age, and therefore contravened s 351(1) of the FW Act. 2. The second respondent: (a) advised, encouraged or incited the first respondent to take adverse action against Peter Selsmark within the meaning of Item 2(a) of s 342(1) of the FW Act; and (b) did so for a particular reason being Mr Selsmark's age; and therefore contravened s 351(1) of the FW Act by virtue of s 362(1) of the FW Act. 4 The Commissioner seeks penalties under s 546 of the FW Act for the contraventions of s 351(1). It submitted that the following penalties would be appropriate: (a) for CoreStaff - $20,000 to $25,000 (32% - 40% of the maximum applicable penalty); and (b) for Gumala - $10,000 to $15,000 (16% - 24% of the maximum applicable penalty). 5 CoreStaff submitted the appropriate penalty to be imposed on it is around 24% of the maximum applicable. 6 Gumala submitted that if any penalty should be imposed on it, then it should be no more than around 5% of the maximum penalty. 7 All parties accepted that although they had suggested the parameters of any penalty, the amount of the penalty is a matter for the Court. There was no real issue between the parties as to the findings relevant to the question of penalty, the facts relating to each entity or the applicable principles.

Summary of facts 8 The following summary is based on that included in the Commissioner's submissions, and reflects the findings made in the liability reasons. The respondents did not take issue with the summary. 9 CoreStaff is a labour hire and recruitment company. It had an overarching agreement (Credit Agreement) to provide services to Gumala, a company providing civil construction, transport and mining-related services to clients in places including the Pilbara region of Western Australia. CoreStaff was to provide services to Gumala under the auspices of the Credit Agreement as requested by Gumala from time to time. 10 Mr Selsmark was 70 years old and looking for work as a grader operator. 11 On 22 October 2018, Mr Selsmark responded to an advertisement on SEEK for an experienced grader operator. The advertisement had been placed by Terry Ingram, CoreStaff's area manager for the Pilbara region of Western Australia. Mr Ingram placed that advertisement in response to an email from Nikki Maltese, a human resources advisor employed by Gumala, identifying a grader operator position that Gumala was seeking to have filled. Mr Selsmark also received an email through SEEK from Mr Ingram about that position, to which he responded on 22 October 2018. Mr Ingram considered the résumé and qualifications sent to him by Mr Selsmark and, on their face, thought that Mr Selsmark could be suitable for the position. 12 The successful candidate for the grader operator position was to be employed by CoreStaff, not Gumala. This issue was contested by CoreStaff and was addressed in the liability reasons at [58]-[64]. 13 After receiving Mr Selsmark's résumé and qualifications, Mr Ingram emailed Ms Maltese his name and some details (not including his age). Ms Maltese passed those on to Gumala's operations manager and a project manager for review. 14 Over the next few days, Mr Ingram checked in with Ms Maltese about the status of Mr Selsmark's application. In a reply email of 25 October 2018, Ms Maltese said: Peter we had his details already, he applied directly with us. He has all the tickets we are looking for however [his] age is a concern - 70 years old. The other guy is a no. 15 Mr Ingram replied to Ms Maltese saying: Wow didn't know that however I would have found out eventually … yes will certainly keep looking. 16 Mr Ingram then sent to Mr Selsmark the following email: Sorry Peter, no joy with the role at [Gumala] due to your age mate. 17 Having regard to the evidence I found that CoreStaff was a prospective employer of Mr Selsmark (liability reasons at [64]); that Mr Selsmark was CoreStaff's prospective employee (at [70]-[71]); that CoreStaff had a vacancy for a grader operator (at [88]-[94]); and that CoreStaff refused to employ Mr Selsmark to fill that vacancy (at [95]). I also found, based on the evidence of Mr Ingram's reasoning (including his testimony and the email referred to at [16] above), that Mr Selsmark's age was a substantial and operative reason for CoreStaff's refusal to employ Mr Selsmark (at [102]-[114]). It followed that CoreStaff contravened s 351(1) of the FW Act (at [116]). 18 CoreStaff contested liability. Gumala admitted in its defence in the proceeding that, through Ms Maltese, it advised encouraged or incited Mr Ingram to refuse to employ Mr Selsmark on behalf of CoreStaff; that Ms Maltese did so for a particular reason being Mr Selsmark's age; and that, accordingly, Gumala contravened s 351(1) by reason of s 362(1) of the FW Act. Gumala did not otherwise participate in the liability hearing.

Principles 19 Section 546 of the FW Act provides for the imposition of pecuniary penalties for contraventions of the FW Act. 20 The pecuniary penalty for a body corporate must not exceed five times the maximum number of penalty units referred to in s 539(2) for the relevant civil remedy provision. For a contravention of s 351(1), as in this case, that number is 60 penalty units. At the time of the contraventions by CoreStaff and Gumala (25 October 2018), one penalty unit was equal to $210.26. Accordingly, the maximum penalty applicable to each of the present contraventions is $63,000. 21 The task of the court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560 at [91] (Buchanan J). 22 Factors that might be relevant to the exercise of the court's discretion in assessing what penalty should be imposed are well known and set out elsewhere: see Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1213 at [11]-[23] (Tracey J) and the cases cited therein. The principles that have developed through the authorities are not rules, but are tools to assist the court in arriving at an appropriate penalty: Australian Competition and Consumer Commission v Yazaki Corporation [2018] FCAFC 73; (2018) 262 FCR 243 at [226] (Allsop CJ, Middleton and Robertson J). However, the Court's power has no retributive or rehabilitative aspect: Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 at 52,152 (French J). This and other distinctions between civil and criminal penalties means it is appropriate for the Court to receive submissions from the Commissioner (and the respondents) about what penalty may be appropriate: Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 258 CLR 482 at [55]. 23 The topics addressed below are those that the parties identified as of particular relevance in this case. In the end, however, it is necessary to have general regard to all of the circumstances in order to reach a penalty for each respondent which balances many conflicting features.

Nature and circumstances of the conduct 24 The seriousness with which the community regards age discrimination is reflected in the Age Discrimination Act 2004 (Cth) and also the express provisions of the FW Act, both of which guard against assumptions and stereotyping based upon age. Both recognise that a person may only defend against allegations of age discrimination when their reasoning is based not upon unsubstantiated assumption but, generally, upon a proper assessment as to the person's ability to undertake the inherent requirements of the particular position: s 351(2)(a) of the FW Act; s 18(4) and s 18(5) of the Age Discrimination Act. 25 The discrimination against Mr Selsmark was clear - the only roadblock to his continued consideration for employment was his age. Conscious recognition was given to his age by both Gumala (by at least Ms Maltese) and by CoreStaff (through Mr Ingram) and that factor was then relied upon to deny his opportunity of employment. I acknowledge that the conduct of the respondents was confined to one incident, but it was a serious, and not trivial, example of discrimination. However, I accept there was no malevolence in Mr Ingram's conduct - he appeared to be motivated to some extent out of care for Mr Selsmark, but that motivation was itself based upon the type of assumptions against which the legislation guards.

Loss and damage 26 This is not a case where quantifiable loss and damage on the part of the victim of the discrimination has been established. However, it can be said that Mr Selsmark lost the opportunity to remain in the pool of potential contenders for the grading job, a job which was likely to be a casual position.

Size and status of respondents 27 CoreStaff is part of the CGH Group, which was described on CoreStaff's website at the time the evidence for the penalty hearing was prepared as 'one of Australia's leading providers of outsourced recruitment and human resources consulting solutions'. The Western Australian entity, CoreStaff, has 20 employees across three offices. No financial information was provided about CoreStaff. 28 According to its website, CoreStaff's whole business is the provision of services relating to recruitment. It provides labour hire, managed workforce, permanent recruitment and other recruitment-related services in a variety of industries from mining, resources, energy and construction to agriculture, aquaculture and food manufacturing. 29 CoreStaff submitted that it is wrong to emphasise CoreStaff's size and financial position and relationship to a larger organisation in order to influence the penalty that is imposed. Put generally, that is not a submission that would be accepted, as it is well established that the size and financial position of a company may be relevant to an assessment of whether a fine might be seen as no more than the price of doing business. But in this case, and having regard to the relatively limited range of penalties that might be imposed, I do not consider the size and financial position of CoreStaff to be of any particular weight. 30 I also take into account that there is no suggestion that any CoreStaff officials more senior to Mr Ingram were involved in or had prior knowledge of the email communications that evidence the contravention. 31 Gumala describes itself as a mid-sized organisation that employs approximately 80 people. Although it operates as a commercial enterprise, the evidence of its chief executive officer, Mr Larkin, was that Gumala is a wholly owned subsidiary of Gumala Aboriginal Corporation (GAC). 32 GAC is an indigenous corporation established in 1997 following the signing of the Yandi Land Use Agreement between Hamersley Iron Pty Ltd (now Rio Tinto) and GAC, and subject to the Corporations (Aboriginal and Torres Strait Islander) Act 2006 (Cth). GAC is the manager of the General Gumala Foundation, which is a charitable trust established for the management and distribution of the compensation monies received under the terms of that agreement. GAC represents the native title claimants of the Banjima, Yinhawangka and Nyiyaparli people of the Pilbara region (members). The objectives of GAC include to provide direct relief from poverty and sickness of its members, but also to give effect to the principles of self-management, economic independence and self-determination for Aboriginal people by establishing and fostering business enterprises and commercial ventures for and by its members. 33 Gumala was incorporated as a vehicle to achieve the commercial objectives of GAC, and its profits are directed to GAC to assist it with its objectives. Gumala undertakes mining and civil works and also operates the Karijini Eco Retreat in the Karijini National Park in Western Australia. Over 25% of its workforce are Aboriginal and at the time of the discrimination against Mr Selsmark, it employed 10 people over the age of 60 and three people over the age of 70. 34 Gumala uses a number of labour hire providers from time to time, such as CoreStaff, to supplement its permanent workforce on an 'as needs' basis. 35 GAC's annual report 2018-2019 reported income of over $10.6 million for the financial year ending 30 June 2019, but that over 70% of this income was expended providing the members benefit services referred to by Mr Larkin. Gumala's separate financial information was not provided.

General deterrence 36 The Commissioner submitted that: It is notoriously harder for older Australians to obtain and retain work. An inquiry by the Australian Human Rights Commission (AHRC) in 2016 found that there is a significant increase in the time it takes for older people to find work once they become unemployed ['Willing to Work: National Inquiry into Employment Discrimination Against Older Australians and Australians with Disability' (2 May 2016), p 37]. This trend, and the overall decline in labour force participation with age (despite a desire to continue working), sit alongside what the AHRC describes as 'negative assumptions and pervasive stereotypes about older people that contribute to discriminatory practices', including perceptions about health problems, learning ability, aptitude and attitudes. (footnotes omitted) 37 The Commissioner also submitted: The labour hire industry also has widespread problems in relation to workplace compliance. A number of inquiries undertaken across Australian jurisdictions in recent years have highlighted the particular vulnerability of labour hire workers to workplace compliance issues. A 2019 audit by the ABCC of labour hire employers operating in the building and construction industry identified that 79% of the companies audited were not complying with Australian workplace laws [Australian Building and Construction Commission, 'Labour Hire Campaign Report' (June 2020)]. All of the recent inquiries into labour hire practices raised concerns about deficiencies in enforcement action against labour hire companies contravening workplace laws, including penalties. These issues are not limited to labour hire employers: for example, the South Australian inquiry identified a particular concern about the 'end users' of labour hire being able to absolve themselves of responsibility by shifting blame to labour hire providers. This is not a small industry. Although the proportion of Australian employees reported as being employed by labour hire companies is relatively small, it still accounted for over 12.5 million Australian workers in August 2018 [Australian Parliament Department of Parliamentary Services, 'Trends in use of non-standard forms of employment' (10 December 2018)]. (footnotes omitted) 38 CoreStaff objected to any weight being given to such reports, describing it as extraneous and being referred to 'in order to import a sense of seriousness to the facts at hand', rather than addressing the particular facts. 39 The Commissioner relied on the decision of Bromwich J in Fair Work Ombudsman v NSH North Pty Ltd (t/as New Shanghai Charlestown) [2017] FCA 1301 in which his Honour indicated that such reports or compilations of statistics are relevant and may be given appropriate weight insofar as they establish that there are problems in the particular industry which render general deterrence of importance in fixing civil penalties - 'the existence and prevalence of such conduct usefully informs the exercise of the Court's discretion': at [134]. 40 I accept that such materials may be relevant to the question of the measure of the penalty that serves the purpose of general deterrence. I accept, even without regard to the particular extrinsic materials, that it is a notoriously known matter that it is harder for older Australians to obtain and retain work, and that age and age discrimination play a part in that circumstance. 41 I am not satisfied that the material upon which the Commissioner seeks to rely as to alleged endemic issues in the labour hire industry is sufficiently specific to or connected to the prevalence of age discrimination to usefully inform to any real degree the exercise of my discretion insofar as a penalty is to be imposed upon CoreStaff. In contrast to the quite specific history of numerous relevant contraventions in Fair Work Ombudsman v NSH North, the Commissioner has not pointed to any trend of decisions that concern discrimination on the basis of age in the labour hire industry. 42 However, and having regard to what has been said at [40] above, there is a need for any penalty imposed in this matter to reflect the need for general deterrence with respect to age discrimination by employers, and the quantum of such penalty is to be assessed accordingly.

Other matters relating to CoreStaff 43 In addition to the role of general deterrence, to my mind there is a significant role for specific deterrence in the case of CoreStaff. The contravention in this case relates to the heart of CoreStaff's business. It operates in the employment field and holds itself out as having expertise. It should hold itself to high standards in the context of an understanding of employment law and discrimination. It should act consistently with those obligations, even if its own client may appear to misunderstand such obligations. It should have a proper understanding of its contractual relationships with its clients. It should be conscious of its role as an employer. 44 Mr Ingram held a relatively senior position in CoreStaff as an area manager for the Pilbara region and consciously chose to make a decision based upon age. He was frank and open about his decision-making and gave direct evidence that he thought about Mr Selsmark's age; that he thought about the risks of a man of Mr Selsmark's age working in the adverse conditions of the Pilbara; and that he did not employ Mr Selsmark because of his age (liability reasons at [103]). He did not simply adopt the position of Gumala (liability reasons at [112]). There is a spectrum of possibilities available to the Court when considering whether conduct was deliberate, and the fact that the conduct may not be knowing or reckless does not mean it is innocent: Australian Competition and Consumer Commission v Reckitt Benckiser (Australia) Pty Ltd [2016] FCAFC 181 at [129]. The absence of positive intention to contravene, or any other state of mind such as recklessness or wilful blindness, is not mitigatory, but simply means that the neutral state of mind required for liability has not been disturbed for the purpose of penalty: Reckitt Benckiser at [131]. 45 However, of concern is the fact that although CoreStaff knew of Mr Ingram's conduct from at least 6 December 2018, at no time has CoreStaff apologised to Mr Selsmark for that conduct. An affidavit was filed by Mark Seigel, the general manager of CoreStaff, for the purpose of the penalty hearing. There was therefore an opportunity to express contrition or remorse for the conduct of CoreStaff but that opportunity was not taken. 46 My reference to 6 December 2018 is a reference to an email of that date sent by Mr Seigel to Mr Ingram. In that email Mr Seigel wrote: In accordance with the disciplinary process for internal employees, I am writing to you regarding an email that I have today seen for the first time, and is in relation to an email that was sent to Peter Selsmark from yourself on the 25th October 2018. My understanding is that Peter Selsmark responded to an advertisement that you had posted on Seek. In that email you have stated that Mr Selsmark was not successful for the position he applied for due to his age. In our verbal conversation you have acknowledged and understand that the content of your email is in breach of the companies Equal Employment Opportunity Policy and goes against everything this company represents. You have also acknowledged you have breached anti-discrimination laws. I understand you are deeply remorseful for any distress you have caused to both Mr Selsmark and to the company, and it was not your intention to do so. … I also direct that you contact [name redacted] the quality and compliance manager to undertake re-training to ensure you are fully aware of all the companies policies. 47 As is apparent from that email, Mr Seigel assessed in December 2018 that Mr Ingram's conduct was in breach of anti-discrimination laws. I accept CoreStaff's evidence that it was not until 15 April 2020 that it was provided with a copy of the transcript of the interview with Mr Ingram, referred to at [19] of the liability reasons and in other parts of those reasons that refer to Mr Ingram's evidence. That is unfortunate. I also accept there was a level of cooperation in that CoreStaff made Mr Ingram available to the Commissioner for an interview and provided documents when requested. However, CoreStaff knew of Mr Ingram's conduct prior to the proceedings being instituted (in April 2019), assessed in December 2018 that Mr Ingram's conduct was in breach of anti-discrimination laws and had the opportunity to proffer an apology or express remorse to the Court through Mr Seigel at any time prior to or for the purpose of the penalty hearing. 48 The absence of an apology is not an aggravating circumstance, although an apology may serve to reduce a penalty that might otherwise be imposed: BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining & Energy Union [2001] FCA 336 at [10] (Kiefel J). 49 I acknowledge that there is no evidence of any relevant history of non-compliance with the FW Act on the part of CoreStaff. Therefore, the conduct stands to be assessed for what it has been found to be. There is no evidence which might otherwise contribute to any increase in penalty: Sayed v Construction, Forestry, Mining and Energy Union [2015] FCA 338 (Mortimer J) at [51] (and this principle was not disturbed on appeal). 50 I take into account that CoreStaff had an Equal Employment Opportunity Policy in place at the time of Mr Ingram's contravening conduct; that it took disciplinary action against Mr Ingram in relation to that conduct; that it now has a suite of online training in place which includes discrimination training (although such training does not appear to have been implemented until shortly before the penalty hearing, and does not appear to specifically address a scenario where a client expresses a view that might itself be discriminatory). I acknowledge that CoreStaff has taken steps to enhance its compliance culture since the conduct the subject of these proceedings.

Other matters relating to Gumala 51 Gumala submitted that there is no role for general or specific deterrence in assessing the penalty that should properly be imposed against it. 52 In support of this submission Gumala placed weight on its role in the community - that its core purpose is to provide funding for services that relieve its Aboriginal members from the adverse impacts on their communities of past discrimination based on their race. It submitted that it is well aware of the consequences that unlawful discrimination can have on individuals and the community. 53 It submitted that it employs a diverse workforce, including persons over the age of 60 and 70. 54 Based on the email exchanges, it was Ms Maltese who raised the issue of Mr Selsmark's age. Gumala by its admission in the proceedings accepted that she was wrong to do so. Ms Maltese appears to have occupied a relatively senior human resources role. 55 The Commissioner invited the Court to infer that others within Gumala, including its operations manager and project manager, may have also held discriminatory views, as Ms Maltese would have consulted with them about Mr Selsmark. I am not prepared, without more, to infer that there was any broader culture of discriminatory views based on the relevant incident. I note that Ms Maltese's employment was terminated for reasons that included her conduct with respect to Mr Selsmark. 56 I accept that both general and specific deterrence have a less significant role in assessing the appropriate penalty for Gumala. However, they are not irrelevant. Whilst it is to be acknowledged that Gumala has an important reconciliatory and empowerment role in the Pilbara, it remains subject to obligations under the FW Act, whether it employs persons directly or through labour hire companies. Although I accept that Gumala is acutely aware of issues of racial and other discrimination, it is not immune to error, as the case of Mr Selsmark reveals. No organisation, regardless of its beneficial purpose and role in the community, is entitled to complacency when it comes to discrimination in the employment environment. 57 I note that Gumala also initiated a review of its recruitment procedures including in relation to equal opportunity and diversity in response to this incident, which led to it reviewing and updating its Equal Opportunity Policy (now Diversity Policy). 58 I accept that Gumala is a first time contravener of the FW Act. 59 I also accept there was considerable cooperation on the part of Gumala by way of agreement of a statement of agreed facts and its concessions as to liability with respect to these proceedings. The importance of concessions should not be underestimated. They indicate insight into behaviour. They promote certainty of results for the parties as well as a reduction in the costs of final hearings and in the use of court resources. Gumala admitted liability at an early stage. 60 Mr Larkin also expressed concern and contrition in relation to Mr Selsmark's treatment and apologised to Mr Selsmark through his affidavit. It is appropriate given this conduct that a discount be applied to the penalty that might have otherwise been imposed. I give Gumala's cooperation and concessions considerable weight by way of mitigation.

Range of penalties 61 Both the Commissioner and Gumala referred to a number of cases where penalties had been imposed for contraventions of s 351 of the FW Act. I have not included reference to all cases as the comparative exercise is not particularly useful. I will mention three. Those relied upon by the Commissioner did not relate to age discrimination. They included an example of discrimination because of mental disability where liability was contested but the contravention was not cynical, and where there was no history of similar conduct: Robinson v Western Union Business Solutions (Australia) Pty Ltd [2018] FCA 1913 at [109]-[115] (Flick J) (penalty of $20,000, being approximately 37% of the maximum). The second related to discrimination because of pregnancy where liability was admitted but there was no contrition, and where there was no history of similar conduct: Fair Work Ombudsman v WKO Pty Ltd [2012] FCA 1129 at [104]-[105] (Barker J) (penalty of $13,200, being 20% of the maximum). Gumala referred to one case that involved discrimination on the basis of age, where there were two contraventions involving dismissal based on age and a failure to communicate with the former employee about that issue: Fair Work Ombudsman v Theravanish Investments Pty Ltd [2014] FCCA 1170. The Federal Circuit Court imposed a penalty against the corporate employer indicating that a base penalty of 20% of the maximum would be appropriate. 62 It is not in issue that reference to other cases does not create any particular tariff nor dictate the penalty that should be imposed in any particular case. However, they may be used to ensure a degree of consistency in the application of principles: Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) [2018] FCAFC 126; (2018) 265 FCR 208 at [93] (Bromwich J). Those cases to which I have referred suggest that the penalties suggested by the Commissioner were not outside the bounds of what might be considered reasonable. 63 It remains, however, for the Court to fix a penalty which pays appropriate regard to the circumstances in which the contravention has occurred and the need to sustain public confidence in the statutory regime which imposes the obligations: Australian Ophthalmic Supplies v McAlary-Smith at [91] (Buchanan J). The penalty must be just and proportionate, and is not an exercise in mathematical compartmentalisation. Rather, the process of formulating an appropriate penalty involves, in the end, an 'instinctive synthesis' of competing factors: in Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357 at [37] (Gleeson CJ, Gummow, Hayne and Callinan JJ); Australian Ophthalmic Supplies v McAlary-Smith at [27] (Gray J), [55] (Graham J); and The Broadway on Ann Case at [93].

Determination of penalties 64 Whilst I have had regard to all of the matters raised by the parties, I have had particular regard to the nature of CoreStaff's business, a business where knowledge of the laws of discrimination and its status as an employer should be central and well understood. Accordingly, and as I have noted above, I consider specific deterrence is a significant factor in the assessment of penalty for CoreStaff. 65 I am assessing the penalty based on the specific circumstances of CoreStaff's own conduct relating to Mr Selsmark. I consider that the discrimination was overt and serious. However, I acknowledge the absence of malevolence and that the particular conduct was limited to Mr Ingram. 66 In all the circumstances, and having regard to the need for general and specific deterrence, I consider a penalty of $20,000 is appropriate. 67 The absence of any indication of remorse on the part of CoreStaff is disappointing. I would have accorded a discount had there been a genuine indication of insight and remorse. 68 I note that CoreStaff, by the nature of its business, is in the position to disabuse its clients of any misunderstanding as to discriminatory conduct in employment and so to reduce the prospect of such conduct occurring. It is to be hoped that it will be attuned to this potential in the future. 69 As to Gumala, I consider its conduct was less serious. It raised the issue of Mr Selsmark's age and has properly made concessions as to liability on that basis, but it was CoreStaff that refused Mr Selsmark employment, after independent assessment by Mr Ingram. Whilst there remains a role for general and specific deterrence in fixing the penalty, it is more limited: I accept that in general Gumala is attuned to the need to guard against discrimination in the workforce. 70 I also consider there should be a discount accorded to Gumala to the penalty that would otherwise have been imposed in light of its contrition and express apology directed to Mr Selsmark. 71 In all the circumstances I consider a penalty of $9,000 to be paid by Gumala is appropriate.

Orders 72 The Commissioner sought an order pursuant to s 546(3) of the FW Act that any pecuniary penalties ordered be paid in equal parts to Mr Selsmark (50%) and to the Commonwealth (50%). That request required an amendment to the prayer for relief in the statement of claim, but that course was not opposed by the respondents. 73 In Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4; (2016) 239 FCR 336 at [78] and [101]-[102] the Full Court held that a civil pecuniary penalty is ordinarily payable to the applicant or person who seeks it in the proceeding, but a provision such as s 546(3) of the FW Act gave the Court a discretion to vary that result. The Court approved Gilmour J's observation in Woodside Burrup Pty Ltd v Construction, Forestry, Mining & Energy Union [2011] FCA 949; (2011) 220 FCR 551 in relation to the similar s 49(5) of the Building and Construction Industry Improvement Act 2005 (Cth) that payment of such a penalty is not compensatory. Such an order does not increase the quantum of the penalty but directs some portion of it to a third person or persons. 74 In Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Botany Cranes Case) (No 4) [2021] FCA 525, Rares J observed that an order that part of a penalty be paid to a third party may be seen as part of the specific deterrence that inheres in 'the sting or burden which the penalty imposes on the contravener': at [14], citing Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2018] HCA 3; (2018) 262 CLR 157 at [116] (Keane, Nettle and Gordon JJ) (The Non-Indemnification Case). 75 I consider it appropriate to order that 50% of the penalties be paid to Mr Selsmark. He was an innocent party in the circumstances and the target of the discrimination. 76 I will make orders accordingly. I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Banks-Smith.

Building and Construction Industry Improvement Act 2005(Cth)

Fair Work Act 2009(Cth)ss 351, 362, 539, 546

At a glance

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