Australian Building and Construction Commissioner v Fissenden

CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION Second Respondent

JUDGE: RANGIAH J DATE OF ORDER: 9 JULY 2020

THE COURT DECLARES THAT:

1. On 8 March 2019 the first respondent, being an employee and officer of the second respondent, contravened ss 346(a) and (b) of the Fair Work Act 2009 (Cth) (FWA) by threatening to deny Cooper Crosthwaite the right to work at the Sunshine Plaza Site on 10 March 2019 which Mr Crosthwaite had been engaged to do, because: (a) Mr Crosthwaite was not a member of the second respondent; (b) Mr Crosthwaite had engaged in industrial activity within the meaning of s 347(a) of the FWA, by not becoming a member of the second respondent; and (c) Mr Crosthwaite had engaged in industrial activity within the meaning in s 347(b)(vi) of the FWA, by not paying a fee to the second respondent.
2. By the operation of ss 363 or 793 of the FWA, the second respondent contravened s 346 of the FWA by reason of the conduct of the first respondent the subject of Declaration 1.
3. On 8 March 2019 the first respondent contravened s 348 of the FWA by threatening to deny Norman Holdings (QLD) Pty Ltd (Norman Holdings) and its workers, the right to work on 10 March 2019 at the Sunshine Plaza Site with the intention of negating the choice of Norman Holdings to engage in industrial activity for the purposes of s 347(b)(vi) of the FWA, namely to pay a fee to the second respondent.
4. By the operation of ss 363 or 793 of the FWA, the second respondent contravened s 348 of the FWA by reason of the conduct of the first respondent the subject of Declaration 3.

THE COURT ORDERS THAT: 5. The first respondent pay a pecuniary penalty of $4,000 for his contravention of s 348 of the FWA. 6. The second respondent pay a pecuniary penalty of $40,000 for its contravention of s 348 of the FWA. 7. The penalties referred to in Orders 5-6 above be paid as follows: (a) the second respondent pay $625.50 to Norman Holdings within 30 days; and (b) the first and second respondents pay the remainder to the Commonwealth of Australia within 30 days. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

RANGIAH J: 1 The applicant, the Australian Building and Construction Commissioner (the Commissioner) alleges that the first respondent, James Fissenden, contravened ss 346 and 348 of the Fair Work Act 2009 (Cth) (the FWA). The Commissioner also alleges that the second respondent (the Union) contravened the same provisions by reason of the conduct of Mr Fissenden. The respondents admit the allegations. 2 The Commissioner seeks declarations and the imposition of pecuniary penalties. The respondents accept that declarations should be made and that pecuniary penalties should be imposed. The only dispute is the quantum of the penalty to be imposed. 3 I will discuss the facts, the legislation and the principles relevant to determination of the appropriate penalties.

The Facts 4 Norman Holdings (QLD) Pty Ltd (Norman Holdings) was contracted to conduct shopfitting work at a site at the Sunshine Plaza in Maroochydore in Queensland (the Sunshine Plaza Site). Mr Fissenden was an officer and official of the Union, and was the Union's delegate for the site. 5 Ezra Norman was the sole director and an employee of Norman Holdings. On the morning of 8 March 2019, Mr Fissenden requested a list of who would be working on the weekend from Mr Norman, so that Mr Fissenden could "get approval" for them to work. Mr Norman provided that list. Mr Fissenden then phoned Mr Norman about Cooper Crosthwaite, who Mr Fissenden stated was not "coming up" as a Union member. Mr Crosthwaite was an independent contractor engaged by Norman Holdings to perform shopfitting work at the Sunshine Plaza Site. 6 Mr Fissenden then attended the Sunshine Plaza Site where Mr Norman and Mr Crosthwaite were working, and, in two conversations, threatened that he would not approve Mr Norman and the contractors to work on Sunday, 10 March 2019 until Mr Crosthwaite joined the Union. As a result of these conversations, Norman Holdings paid the sum of $625.50 to the Union to cover Mr Crosthwaite's membership fee. Mr Norman and the contractors scheduled to work on the weekend were not prevented from working at the Sunshine Plaza Site on the Sunday. 7 The Commissioner alleges, and the respondents admit, that: (1) Mr Fissenden took adverse action against Mr Crosthwaite by threatening to deny him the right to work at the Sunshine Plaza Site on 10 March 2019 which Mr Crosthwaite had been engaged to do, because: (a) Mr Crosthwaite was not a member of the Union; in contravention of s 346(a) of the FWA; (b) Mr Crosthwaite had engaged in industrial activity within the meaning of s 347(a) of the FWA by not becoming a member of the Union; in contravention of s 346(b) of the FWA; and (c) Mr Crosthwaite had engaged in industrial activity within the meaning of s 347(b)(vi) of the FWA by not paying a fee to the Union; in contravention of s 346(b) of the FWA; (2) Mr Fissenden took adverse action against Norman Holdings by threatening to deny Norman Holdings and its contractors the right to work at the Sunshine Plaza Site on 10 March 2019 with the intention of negating the choice of Norman Holdings to engage in industrial activity (within the meaning of s 347(b)(vi) of the FWA) by not paying a fee to the Union; in contravention of s 348 of the FWA; (3) by the operation of ss 363 and/or 793 of the FWA, the Union contravened ss 346 and 348 of the FWA. 8 The Commissioner submits that a penalty should be imposed against Mr Fissenden within the range of $7,560 to $8,820, and against the Union for $63,000, the maximum penalty. The respondents submit that the appropriate penalty to be imposed on Mr Fissenden is $3,000, whilst the appropriate penalty to be imposed on the Union is $30,000.

The Legislation 9 The following provisions of the FWA are relevant to this proceeding: 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; 545 Orders that can be made by particular courts Federal Court and Federal Circuit Court (1) The Federal Court or the Federal Circuit Court may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision. … 546 Pecuniary penalty orders (1) The Federal Court, the Federal Circuit Court or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision. … Determining amount of pecuniary penalty (2) The pecuniary penalty must not be more than: (a) if the person is an individual - the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); or (b) if the person is a body corporate - 5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2). … 556 Civil double jeopardy If a person is ordered to pay a pecuniary penalty under a civil remedy provision in relation to particular conduct, the person is not liable to be ordered to pay a pecuniary penalty under some other provision of a law of the Commonwealth in relation to that conduct. … 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 … is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body.

Principles 10 Section 546 of the FWA confers a discretion on the Court to order a person who has contravened a civil remedy provision to pay a pecuniary penalty (up to the statutory maximum) "that the court considers is appropriate". 11 The factors that may be relevant to the exercise of discretion have been described in a number of cases. The Full Court in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68 at [102] categorised the factors based on, "whether they relate to the objective nature and seriousness of the offending conduct, or concern the particular circumstances of the defendant in question", and continued: [103] The factors relating to the objective seriousness of the contravention include: the extent to which the contravention was the result of deliberate, covert or reckless conduct, as opposed to negligence or carelessness; whether the contravention comprised isolated conduct, or was systematic or occurred over a period of time; if the defendant is a corporation, the seniority of the officers responsible for the contravention; the existence, within the corporation, of compliance systems and whether there was a culture of compliance at the corporation; the impact or consequences of the contravention on the market or innocent third parties; and the extent of any profit or benefit derived as a result of the contravention. [104] The factors that concern the particular circumstances of the defendant, particularly where the defendant is a corporation, generally include: the size and financial position of the contravening company; whether the company has been found to have engaged in similar conduct in the past; whether the company has improved or modified its compliance systems since the contravention; whether the company (through its senior officers) has demonstrated contrition and remorse; whether the company had disgorged any profit or benefit received as a result of the contravention, or made reparation; whether the company has cooperated with and assisted the relevant regulatory authority in the investigation and prosecution of the contravention; and whether the company has suffered any extra-curial punishment or detriment arising from the finding that it had contravened the law. 12 While such "checklists" of factors may be useful, they must not become a "rigid catalogue of matters for attention": Australian Opthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at [91]. Rather, the task of the Court when assessing penalty is one of "instinctive synthesis", involving the "identification and balancing of all the considerations relevant to the contravention and the circumstances of the respondent": Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union ("Cardigan St Case") [2018] FCA 957 at [51]. Ultimately, the Court must "ensure that any penalty which is imposed is proportionate to the gravity of the contravening conduct": Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 353 at [66]. 13 The principal object of an order to pay a pecuniary penalty under s 546 was described by the High Court in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2018) 262 CLR 157 (ABCC v CFMEU) at [116] as, "deterrence: specific deterrence of the contravener and, by his or her example, general deterrence of other would-be contraveners". 14 Much of the argument in this case concerned a dichotomy asserted to exist between the approach of the majority in Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) (2018) 265 FCR 208, and the approach of the Full Court in a number of other cases. This dichotomy relates to whether a significant prior history of contraventions of the FWA can justify the imposition of maximum penalties in respect of conduct that, alone, does not fall in the "worst category", in order to deter further contraventions. 15 However, in oral submissions it became clear that what was ultimately in issue was not the principle advanced in these cases, but rather its application to the facts. It is necessary to consider the cases in order to understand the positions of the parties and the current state of the law. 16 In The Broadway on Ann Case, Tracey J at [14] drew a distinction between, "the need to ensure that a contravener is not doubly penalised for past and present misconduct and the consideration of historic misconduct for the purpose of assessing the need for specific deterrence of a recidivist organisation". Justice Tracey referred at [23]-[25] to the history of contravening conduct by the Union, and characterised the Union's view of the civil penalties that have resulted from such conduct as being, "a cost of the union pursuing its industrial ends". While it was emphasised that the Court will not lightly impose the maximum penalty, the features of that case, and in particular the history of past contraventions, were considered to warrant the imposition of the maximum penalties available on the Union. Justice Logan also concluded at [77] that such a, "lengthy and repeated pattern of unrepentant, outlaw behaviour" by the Union warranted the imposition of the maximum penalty. There were six contraventions of s 500 of the FWA in that case, involving a senior officer of the Union being present illegally on the site, refusing to leave when asked, making verbal threats and removing a number of workers for half an hour. The majority imposed the maximum penalty for each individual contravention by the Union, taking into account both the seriousness of the contravening conduct and the need for general and specific deterrence. Justice Bromwich dissented as to the appropriate penalty, as his Honour did not consider all the contravening conduct to be in the "most serious category" so as to warrant the maximum penalty, and would only have imposed the maximum penalty for one of the six contraventions. 17 In Construction, Forestry, Maritime, Mining and Energy Union v Australian Building and Construction Commissioner (The Non-Indemnification Personal Payment Case) (2018) 264 FCR 155, the Full Court emphasised proportionality when imposing a penalty under the FWA: [22] 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; (1988) 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. (Underlining added.) 18 In Auimatagi v Australian Building and Construction Commissioner (2018) 267 FCR 268, the Full Court also placed similar emphasis on proportionality: [176] It is a fundamental principle, at the core of the judicial power to impose a penalty, that the imposition is for the contravention in question. Prior contraventions, even so many and often so serious as the Union may have engaged in in the past, is a factor which may be taken into account in determining the appropriate quantum for the contravention; it cannot be taken to lead to a penalty that is disproportionate to the gravity of the instant contravention. The maximum is for the worst category of cases. The Full Court in that case considered that the imposition of the maximum penalty by the primary judge was manifestly excessive, and that the past conduct was not merely a factor considered when assessing the relevant penalty, but rather the substantial reason for punishment. 19 The majority in Parker v Australian Building and Construction Commissioner (2019) 270 FCR 39, Besanko and Bromwich JJ emphasised at [341]-[348] that a history of prior contraventions should be a, "prism through which to view the instant contravention". This enables the court to assess whether the instant conduct manifests "a continuing attitude of disobedience of the law", which may indicate that a "more severe penalty" is warranted. However, the majority emphasised the principle of proportionality, stating that the penalty imposed, "must still fall within the applicable range that is otherwise considered appropriate for that contravention". 20 The authorities discussed above propound a unitary principle that a history of prior contraventions may assist in assessing the appropriate level of penalty to be imposed as a deterrent against further contraventions. However, the majority in The Broadway on Ann Case placed emphasis on the "lengthy and repeated pattern of unrepentant, outlaw behaviour" engaged in by the Union when assessing the appropriate penalty, such that the maximum penalty was justified for contravening conduct which, considered alone, would not fall within the "worst category of cases". In contrast, the Full Courts in The Non-Indemnification Personal Payment Case, Auimatagi and Parker, placed emphasis on proportionality, and ensuring that the maximum penalty is reserved for the "worst category of cases". 21 The Commissioner submits that as the approach of the majority in The Broadway on Ann Case has not been overruled by the later Full Court decisions, it should be followed by this Court. I was taken to two recent decisions which were submitted to endorse that approach. 22 Firstly, Snaden J in Australian Building and Construction Commissioner v Pattinson [2019] FCA 1654 imposed the maximum penalty on the Union on the basis that such a penalty, "represents the court's best chance, however limited it might be, of achieving the deterrent objective to which civil penalties are directed": at [117]. 23 Secondly, Anastassiou J in Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (Castlemaine Police Station Case No 2) [2020] FCA 202 also imposed the maximum penalty on the Union, taking into account its significant history of prior contraventions. His Honour characterised the contravention as "a manifestation of a continuing attitude of disobedience to the law": at [28]. Anastassiou J set out in some detail the current state of the law as it relates to this issue of prior contravening conduct and provided a summary at [22] as follows: In circumstances that may correctly be characterised as I have above, it is open for a court to conclude that the aggregation of the anterior offences should be given such weight as appropriate, even if that results in relatively minor individual instances being characterised as falling within "the worse category of case" and therefore justifying the maximum penalty. In my view, such a conclusion is not offensive to the proportionality principle. It is but a recognition that individual instances of concerted, unlawful and self-arrogated behaviour may reasonably be characterised as meeting the description of the "worst category of cases" when considered in the context of such intractable recidivism. In this context every instance of contravention may be viewed as layered upon earlier instances, such that each instance becomes part of a laminated course of conduct. (Underlining added.) 24 The Commissioner submitted that the approaches of the majority in The Broadway on Ann Case, Snaden J in Pattinson and Anastassiou J in Castlemaine Police Station Case No 2 should be followed, such that the contravening conduct engaged in by Mr Fissenden, which alone may be considered a relatively minor contravention, should come into the "worse category of case" and justify the imposition of close to or maximum penalty on the Union. The Commissioner contends that because of the Union's "unrepentant, outlaw behaviour that can properly be described as intractable recidivism", such an approach is required in order to achieve the object of deterrence. 25 The respondents submit that the reasoning of the majority in The Broadway on Ann Case is contrary to the reasoning of the Full Court in The Non-Indemnification Personal Payment Case, Auimatagi and Parker, and that the Court should follow the approach of the latter category of cases, which has "been consistently applied since": see Australian Building and Construction Commissioner v Hassett [2019] FCA 855; Australian Building and Construction Commissioner v Powell (No 2) [2019] FCA 972; Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (the Laverton North and Cheltenham Premises Case) (No 2) [2019] FCA 973; Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (Geelong Grammar School Case) [2019] FCA 1498; Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (Syme Library Case) (No 2) [2019] FCA 1555; and Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Aldi/Altona North Case) (No 2) [2019] FCA 1667. 26 The Broadway on Ann Case has not been directly overruled by later Full Court decisions. However, the result of that case was reached based on the seriousness of the contravening conduct seen in the context of the history of prior contraventions by the Union. The case involved egregious conduct by an officer or delegate of the Union in a senior position and a significant disruption to the workplace, whereas in the instant case Mr Fissenden holds a relatively junior position, and only made a threat not ultimately carried out, to prevent Mr Crosthwaite and Norman Holdings from working on a single day. Given the comparatively less serious nature of the contraventions in this case, The Broadway on Ann Case was a quite different case. 27 In any event, Auimatagi and Parker were decided more recently, and given the less serious category of the contravening conduct involved, are more relevant when assessing the weight to be given to prior contraventions in the instant case. I will apply the conclusions of the Full Court in those cases, that any penalty that is imposed must not be "disproportionate to the gravity of the instant contravention", and that the maximum penalty should generally be reserved for the "worst category of cases".

Consideration 28 As the contraventions of ss 346 and 348 of the FWA admitted in this case are in relation to the same conduct engaged in by Mr Fissenden, s 556 of the FWA applies such that the Court may only impose a penalty in respect of one of the admitted contraventions. The Commissioner has elected to proceed upon contraventions of s 348 of the FWA in relation to the imposition of pecuniary penalties: cf Canturi v Sita Coaches Pty Ltd (2002) 116 FCR 276 at [84]. 29 At the time of the offending conduct, the maximum penalty for a contravention of s 348 of the FWA was 60 penalty units or $12,600 for individuals, and 300 penalty units or $63,000 for a body corporate, such as the Union. 30 The parties all accept that the conduct of the respondents was serious. The Commissioner characterises it as, "a repudiation of the principle of freedom of association, which is an object of the FW Act". The conduct of Mr Fissenden, and through him the Union, was described by counsel for the Commissioner as, "aggressive, intimidatory (sic), loud, abusive. In effect, plain and pure industrial standover tactics". 31 Two videos recording the contravening conduct were provided to the Court. The videos show that Mr Fissenden was loud and abusive, and used offensive language to describe Mr Crosthwaite. The contravening conduct was engaged in openly and in front of others at the Sunshine Plaza Site. 32 Mr Fissenden's conduct involved a threat to the incomes and revenues of Mr Crosthwaite and Norman Holdings. However, the threat was confined to preventing Mr Crosthwaite and Norman Holdings from working for a single day. Further, the threat was never enacted, although Norman Holdings was required to pay Mr Crosthwaite's membership fee of $625.20 to the Union to avoid that outcome. 33 There is no evidence of contrition by Mr Fissenden or the Union. They have cooperated with the Commissioner to the extent of admitting the contravention at the earliest opportunity. The early admission has assisted in the administration of justice and should be taken into account in favour of the respondents. 34 Mr Fissenden was an official of the Union, but he was not a senior official. The Union is a large and well-resourced national organisation. 35 There is no evidence of any previous contraventions of the FWA by Mr Fissenden. However, the Union has a lengthy history of contravening the FWA. On that basis, this was submitted to be an apt case for the imposition of the maximum penalty against the Union in accordance with the principle expressed by the High Court that, "specific deterrence inheres in the sting or burden which the penalty imposes on the contravener": ABCC v CFMEU at [116]. 36 The respondents contend that the conduct should not be regarded as conduct of the worst type, principally because of its limited scope, the threat being confined to a single day. The Union admitted that its history deprives it of the capacity to seek lenience. However, it was submitted that this does not warrant the imposition of the maximum penalty. 37 It is true that the Union has an extensive history of contraventions of industrial laws, including s 348 of the FWA. The Commissioner provided the Court with a schedule demonstrating that there have been 168 separate cases in which this Court or the Federal Circuit Court of Australia have imposed civil penalties upon the Union for contraventions of the FWA, the Workplace Relations Act 1996 (Cth), the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) and the Building and Construction Industry Improvement Act 2005 (Cth). Most relevantly, 19 of those cases involved the Union engaging in similar conduct to that engaged in by Mr Fissenden, namely the prosecution of a "no ticket-no start" policy at construction sites. 38 The principal object of the FWA is deterrence, both specific and general. However, whilst a history of prior contraventions may justify more severe penalties than might otherwise have been imposed, this cannot lead to the imposition of a penalty that is disproportionate to the gravity of the instant contravention. 39 The conduct of Mr Fissenden does not fall into the "worst category of cases" so as to justify the imposition of the maximum penalty on the Union. However, the Union's significant history of prior contraventions and apparent disregard for compliance with the law does indicate that a more severe penalty is justified as a specific deterrent. I consider it appropriate and proportionate to assess a penalty on the Union in the mid-range of that available. I will impose a penalty against the Union of $40,000. 40 As this is Mr Fissenden's first contravention and given that he held a relatively junior position within the Union, I consider it appropriate to assess a penalty upon Mr Fissenden in the lower range. I will impose a penalty upon Mr Fissenden of $4,000. 41 I will order that the penalties be paid as follows: (a) $625.20 to Norman Holdings; and (b) the balance to the Commonwealth. 42 The Commissioner also seeks the making of declarations, as set out in the amended originating application. I consider that it is appropriate to make the declarations broadly in that form. I certify that the preceding forty-two (42) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Rangiah.