Quantum of the penalty
35 In determining the penalty to be imposed on Alcheringa pursuant to s 298U(a), it is first necessary to consider whether the various offences admitted by Alcheringa should be treated as a single contravention of the freedom of association provisions, or rather as multiple contraventions. This issue has been considered recently by this Court in Community and Public Sector Union v Telstra Corp Ltd (2001) 108 IR 228, where Finkelstein J observed, at 228-229;
'Now it is necessary to decide what penalty, if any, should be imposed. In this regard it is necessary to deal with some preliminary matters. The first issue concerns the number of contraventions that have occurred. A single act, the sending of the email, caused the position of Telstra's employees to be altered to their prejudice. However, a number of employees were relevantly prejudiced. Telstra says that there is but one contravention, and the unions submit to the contrary.
The position is covered by authority. The principal case is Maritime Union ofAustralia v Geraldton Port Authority (No 2) (2000) 94 IR 404. There it was argued that where a single act has an impact on more than one employee in a manner proscribed by s298K, the single act does not result in numerous contraventions of s298K. R D Nicholson J rejected this argument. He said that an examination of the relevant provision showed that the proscribed conduct is not addressed to employees generally, but to the particular position of a particular employee. Accordingly R D Nicholson J held there was a contravention in respect of each employee who was treated in a proscribed manner. See also Automotive, Food, Engineering, Printing and Kindred Industries Union v DMG Industries Pty Ltd (2000) 102 IR 175, where Marshall J arrived at the same conclusion.'
36 In Geraldton Port Authority (cited above), R D Nicholson J, in considering s 298U(a), held, at 413, that 'ultimately the Court is required to fix a penalty for each particular offence.' While Telstra Corp and Geraldton Port Authority referred to s 298K(1)(c) of the WR Act, in my view, the principles enunciated in these decisions apply equally to s 298K(1)(a). In both sections, the proscribed conduct is not described as directed to employees generally, but is cast in terms that it will impinge on 'an employee'.
37 In applying the principles explained in Telstra and Geraldton Port Authority, it is also important to recognise that the conduct in those cases, although directed at numerous employees, involved only a single contravention of s 298K(1) in respect of each employee. The facts in this case are different. As well as involving several employees, there have also been multiple contraventions of s 298K(1) in respect of each employee. As discussed above, Alcheringa has admitted conduct in contravention of s 298K(1) for five separate prohibited reasons in relation to each employee. The critical question is whether the contravention in relation to each employee for each of the five reasons is to be regarded as constituting separate offences or, rather, a single offence for each employee. In my view, the language of ss 298K(1) and 298L(1) favours a construction whereby a single act, if committed for one of the prohibited reasons enumerated in s 298L or a combination of more than one of those reasons, constitutes a single contravention of s 298K(1).
38 I favour this construction because s 298K(1) is the sub-section which creates the offence which is constituted by one or other of the five discrete actual or threatened items of conduct identified in par (a), (b), (c), (d) and (e) of that sub-section. None of those items of conduct specified in s 298K(1), as I perceive it, is capable of being engaged in at one and the same time in respect of the same employee or other person. Sub-section 298K(1) recognises that each identified item of conduct may be engaged in for a complex of reasons and makes it a condition of the commission of the offence that the complex of reasons "include a prohibited reason." Had it been intended that two or more separate contraventions would occur if it were identified that a single item of proscribed conduct had been engaged in for two or more prohibited reasons, it would have been relatively easy for the framers of the legislation to have said so. Sub-section 298K(1) takes its place as part of a regime of penal provisions and any ambiguity of the kind discussed above should, at least as a "last resort", be resolved in favour of a defendant; see Beckwith v The Queen (1976) 12 ALR 333 per Gibbs J at 339. Moreover, it is to be borne in mind that s 298V creates a rebuttable presumption, if it is alleged that conduct was, or is being, carried out for a particular prohibited reason, that it was actuated by that reason. I am reluctant, in the absence of intractable language pointing to a different construction, to impute to the legislature an intention that a defendant should be liable to a separate penalty for each failure to negative one of several alleged reasons for a single item of conduct.
39 The conclusion which I have just reached makes it unnecessary to resolve an issue related to Ms Sally Higgs, the eighth respondent. The evidence establishes that, at the time of the contraventions by Alcheringa, Ms Higgs was not a registered nurse. Mr Turner, of Counsel for the respondent, submitted that, as Ms Higgs was not a registered nurse at the time of the contraventions, she was not covered by the Roping-in-Award and therefore not entitled to the benefits of the Nurses Award (see cl 8 of the Roping-in Award set out at [23] of these reasons). As a result, Mr Turner submitted, Ms Higgs could not claim that Alcheringa had dismissed her for two of the prohibited reasons, specifically ss 298L(1)(h) and (i).
40 Had the prohibited reason in respect of Ms Higgs been confined to that specified in s 298L(1)(h), I would have accepted that the analysis urged by Mr Turner exculpated Alcheringa of a contravention of s 298K(1) in respect of her. Ms Higgs was not, at the time of her dismissal, entitled to the benefits of the Roping-in-Award nor the Nurses Award, which were the applicable industrial instruments. Ms Higgs could not, therefore, have been dismissed by reason of her entitlement to the benefit of an industrial instrument (see Burnie Port Corporation v Maritime Union of Australia (2000) 104 FCR 440, at 445).
41 However, with one exception, it is not disputed that Alcheringa has failed to discharge its onus of proving that its conduct in respect of Ms Higgs was not at least partly actuated by the other alleged reasons prohibited under s 298L(1). The exception was in relation to the prohibited reason described in s 298L(1)(i) as to which Mr Turner submitted that, as Ms Higgs was not entitled to the benefit of the Roping-in-Award, she could not have made a complaint seeking compliance with that award. I am not persuaded by this submission. Unlike s 298L(1)(h), s 298L(1)(i) does not require, in its terms, that the employee the subject of the proscribed conduct be entitled to the benefit of an industrial instrument. Rather, it requires, for present purposes, that the employee have made an enquiry or complaint to a body having a capacity under an industrial law to seek either compliance with that law or the observance of a person's rights under an industrial instrument. It may be that an employee, having made such an enquiry or a complaint to a union, is subsequently informed that the employer is not required to comply with a particular law or the employee has no rights under an industrial instrument. Nevertheless, the employee will still have made that complaint or enquiry and thus would come within the scope of s 298L(1)(i). Indeed, the presence in s 298L(1)(i) of the phrase "the observance of a person's rights" (emphasis added) suggests that the enquiry or complaint made by the employee need not necessarily be about that employee's own rights under an industrial instrument. As already indicated, I am not required in the circumstances of the present case to decide whether s 298L(1)(i) is to be read this broadly. However, in my view, it is not necessary for Ms Higgs to establish an existing entitlement to the benefit of an industrial instrument for her dismissal to be presumed to have occurred because of the prohibited reason set out in s 298L(1)(i).
42 As already indicated, I hold that Alcheringa's admitted breaches of s 298K(1) involved a single contravention of s 298K(1) in respect of each of the eight individual applications. As each contravention attracts a maximum penalty of $10,000 (see s 298U(a)), the total of the available maximum penalties which could be imposed on Alcheringa is $80,000.
43 It next becomes necessary to consider whether I should apply what is referred to as the 'totality principle' in determining the quantum of the penalty. The totality principle was described by Finkelstein J in Telstra (supra) at 230, as follows;
'The next matter, which logically follows from the last, but is not properly described as a preliminary matter, is the totality principle. The principle is that in imposing a penalty for a number of offences it is necessary to ensure that the penalties in aggregate are just and appropriate. One way the totality principle can be given effect is to determine what is an appropriate total penalty and then divide that penalty by the number of offences to produce a penalty for each separate offence…thus it will be necessary to resolve upon the appropriate total penalty, dividing that penalty by the number of individual contraventions and record that amount as the penalty for each contravention, whether or not the sum produced might be regarded as an inappropriate individual penalty.'
This principle was applied by Wilcox J in Finance Sector Union of Australia v Australia & New Zealand Banking Group Ltd [2002] FCA 1035, at [2]-[3].
44 Although the conduct amounting to breaches of the freedom of association provisions by Alcheringa related to eight separate employees and occurred for various prohibited reasons, I regard what I have held to be the eight contraventions as having occurred as part of a single course of conduct attracting the application of the totality principle. I must therefore determine what is an appropriate total penalty. A helpful starting point in this exercise is provided by these observations of Branson J in Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) (1999) 94 IR 231, at 232 [7]-[8];
'… the [Workplace Relations] Act gives no explicit guidance as to the circumstances in which an order imposing a penalty under s 298U of the Act will be appropriate or as to the circumstances in which a penalty of or near the maximum, or alternatively of a lesser amount, may be called for. The Court is simply directed to consider what is appropriate in all the circumstances of the case.
The following matters, which are not intended to comprise an exhaustive list, seem to me to be considerations to which the Court may appropriately have regard in determining whether particular conduct calls for the imposition of a penalty, and assuming that it does, the amount of the penalty:
(a) The circumstances in which the relevant conduct took place (including whether the conduct was undertaken in deliberate defiance or disregard of the Act).
(b) Whether the respondent has previously been found to have engaged in conduct in contravention of Pt XA of the Act.
(c) Where more than one contravention of Pt XA as above is involved, whether the various contraventions are properly seen as distinct or whether they arise out of the one course of conduct.
(d) The consequences of the conduct found to be in contravention of Pt XA as above of the Act.
(e) The need, in the circumstances, for the protection of industrial freedom of association.
(f) The need, in the circumstances, for deterrence.'
These considerations were applied by Marshall J in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v DMG Industries Pty Ltd [2000] FCA 1492.
45 In weighing the submissions on behalf of the applicant and the respondent on the amount of any penalty, I have had regard to the following matters;
(a) The consequences of Alcheringa's conduct were serious and affected the Division 2 nurses in a significant way. Each of the Division 2 nurses was dismissed from her employment, which would have been distressing both financially and personally, particularly in circumstances where the only other employer of nurses in the Swan Hill District is the Swan Hill Hospital, of which Mr Fisher is also the chief executive officer. However, I am also mindful that the consequences to the Division 2 nurses were mitigated somewhat by the provision of termination benefits and the reinstatement of the nurses within one week of the termination (whereupon the termination benefits were repaid) without loss of pay or accrued entitlements.
(b) This is the first contravention by Alcheringa of Pt XA of the WR Act.
(c) I am satisfied that Mr Fisher, who at all times acted on behalf of Alcheringa, did not decide on the relevant conduct in deliberate defiance or disregard of the WR Act. I accept his evidence that the decision to reclassify, and ultimately dismiss, the Division 2 nurses was dictated by the need to reduce Alcheringa's operating costs. I have not overlooked the fact that a significant reason for the dismissal was the intimation by the ANF that it would initiate proceedings in this Court for breach of an award. This is supported by the letter sent to the ANF by Alcheringa on 9 April 2004 (see [28] of these reasons) and the letter of termination sent to the Division 2 nurses on 11 April 2003 (see [29] of these reasons). Nevertheless, I accept that Mr Fisher did not believe or understand that the conduct on which he had determined would be in breach of the freedom of association provisions in the WR Act. Of course, absence of such a belief or understanding is no defence but it does bear on whether Alcheringa's conduct was in deliberate disregard or defiance of the Act. That consideration, however, loses some force when it is remembered that the decision to dismiss the Division 2 nurses was a calculated one, taken pursuant to advice received from employee relations specialists on what they regarded as an appropriate industrial strategy.
(d) Alcheringa admitted in its pleadings that it had contravened the freedom of association provisions. I do not regard that admission as bearing, as Mr Turner submitted, on the likelihood of Alcheringa's re-offending. However, I consider that it should be allowed some weight on the quantum of the penalty as it significantly reduced the time which the Court had to devote to the application with a consequent saving of costs incurred by the applicants.
(e) The contraventions of the freedom of association provisions were very serious. They affected eight employees and involved dismissal, which is certainly at the graver end of the spectrum of conduct proscribed by s 298K(1). Accordingly, the need for the penalty in this case to act as a deterrent is strong. The importance of deterrence as a factor in fixing a penalty for a breach of the freedom of association provisions was discussed by Finkelstein J in Telstra (supra), where his Honour said, at [9];
'On the other hand, the basic objective of punishment should be to enhance social welfare by minimising the net social cost of wrongdoing. This is achieved by deterrence. Here I speak not only of specific deterrence but also general deterrence. In a case such as the present, that may be of some importance. The reason is that Telstra submits that there is no need to impose any penalty because it will not offend again. That may be true. But even if there be no need for specific deterrence, there will be occasions where general deterrence must take priority, and in that case a penalty should be imposed to mark the law's disapproval of the conduct in question, and to act as a warning to others not to engage in similar conduct: R v Thompson (1975) 11 SASR 217. It is also important to remember that proscribed conduct is often engaged in because it is profitable, or will enhance the profitability of the company. To deter conduct engaged in with that purpose, any penalty imposed must have the potential to render the conduct unprofitable.'
In this case, I attach little or no significant to the deterrent effect of any penalty on Alcheringa itself. However, the need generally to deter and warn other employees against engaging in similar conduct remains important and does, in my view, bear on the amount at which the penalty should be fixed.
(f) Alcheringa is a community-based, non-profit organisation that has been in difficult financial straits for the last few years. It did not seek to reduce labour costs so as to increase the wealth of itself or any shareholders. Rather, it acted on a perception, real or otherwise, that it was essential for its financial survival for medication to be administered by persons other than Division 1 nurses. I have also borne in mind that a heavy financial penalty will divert already scarce resources from Alcheringa's residents and the community it serves.
46 After weighing all these matters, in conjunction with the totality principle, I consider that the total penalty to be imposed should be $3,200 or $400 for each of the eight contraventions which I have held have been established. I shall order that each penalty be paid to the ANF.