Australian Rail, Tram and Bus Industry Union v Rail Corporation of New South Wales

Federal Court of Australia|2009-12-03|Before: Jagot J

REASONS FOR JUDGMENT 1 On 18 August 2009 I declared that the respondent, Rail Corporation of New South Wales (RailCorp), breached cl 22.1 of the New South Wales, Rail Infrastructure Corporation and State Rail Authority of New South Wales Enterprise Agreement (the 2005 agreement) with respect to 22 positions at Town Hall Railway Station (Australian Rail, Tram and Bus Industry Union v Rail Corporation New South Wales [2009] FCA 894). The question of penalty in respect of these breaches remains outstanding. 2 It was common ground between RailCorp and the applicant, the Australian Rail, Tram, Bus and Industry Union (the Union), that cl 22.1 of the 2005 agreement is an "applicable provision" within the meaning of s 719(1) of the Workplace Relations Act 1996 (Cth). It follows that the Court (being an "eligible court") may impose a penalty on RailCorp in accordance with Div 2 of Pt 14 of the Workplace Relations Act. Under s 719(4) the maximum penalty that may be imposed on a corporation in respect of a breach of an applicable provision is 300 penalty units or $33,000. However, s 719(2) provides that: (2) Subject to subsection (3), where: (a) 2 or more breaches of an applicable provision are committed by the same person; and (b) the breaches arose out of a course of conduct by the person; the breaches shall, for the purposes of this section, be taken to constitute a single breach of the term. 3 RailCorp submitted that, on the facts of this case, no penalty should be imposed in respect of any of the breaches. Alternatively RailCorp submitted s 719(2) applied so that the breaches in respect of each of the 22 positions must be treated as a single breach. The Union took issue with both contentions. It submitted that the breaches called for the imposition of a substantial penalty which should be paid to it in accordance with s 842 of the Workplace Relations Act.

RAILCORP'S "SINGLE BREACH" ARGUMENT 15 As noted, the parties disagreed about the application of s 719(2) of the Workplace Relations Act to the breaches in respect of each of the 22 positions identified in the declaration made on 18 August 2009. The parties did not address the fact that I found multiple breaches in respect of some of the 22 positions. I infer that they did not do so because they implicitly recognised that RailCorp's treatment of a particular position over time should be understood as arising out of a course of conduct by RailCorp with respect to that position. Accordingly, and consistent with the way in which this matter was run by the parties, I treat all breaches of cl 22.1 found in respect of a particular position as a single breach of cl 22.1. The question is whether I also should treat all breaches of cl 22.1 in respect of the individual positions in question as breaches which arose out of a course of conduct by RailCorp so that those 22 breaches shall be taken to "constitute a single breach" of cl 22.1. 16 RailCorp submitted that I should do so as all of the breaches related to cl 22.1 of the 2005 agreement. All arose out of RailCorp's mistaken belief that part of cl 3.10 of the 2002 agreement continued in force and qualified RailCorp's obligations under cl 22 of the 2005 agreement. All related to positions rather than individual employees. All were a consequence of one course of "multifaceted conduct" (Klousia v TKM Investments Pty Ltd [2009] FMCA 208 at [75] citing Wells J in Attorney-General (SA) v Tichy (1982) 30 SASR 84 at 92-3, Gibbs v Mayor, Councillors and Citizens of the City of Altona (1992) 37 FCR 216, Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 citing Quinn v Martin (1977) 16 ALR 141 at 143-145; Seymour v Stawell Timber Industries Pty Ltd (1985) 9 FCR 241 at 244 and 266-267, and Textile Clothing and Footwear Union of Australia v Southern Cross Clothing Pty Ltd [2006] FCA 325 at [28]). According to RailCorp, the facts in Jordan v Mornington Inn Pty Ltd (2007) 166 IR 33; [2007] FCA 1384 (affirmed in Mornington Inn Pty Ltd v Jordan (2008) 168 FCR 383; [2008] FCAFC 70) are distinguishable. In that case the employer applied duress to employees on separate occasions. 17 The Union submitted that s 719(2) was inapplicable. RailCorp bore the onus of establishing the applicability of that section (Australasian Meat Industry Employees' Union v Meneling Station Pty Ltd (1987) 16 IR 245, affirmed in Meneling Station Pty Ltd v Australasian Meat Industry Employees' Union (1987) 18 FCR 51). The facts in Jordan areindistinguishable. Heerey J (the judge at first instance in Jordan) at [91] observed that "the statutory provisions are not directed to a continuing state of affairs, but rather conduct which answers a particular description. If there are episodes of conduct distinct in time or place, albeit related and engaged in with the same purpose, there will be separate contraventions. To take an example discussed in argument, if an employer on each morning of a week threatened to assault an employee if he did not sign an AWA, there would be a contravention on each day". 18 The Union also referred to the observations of the Full Court in Jordan at [58] that it would have been open to Heerey J to conclude that there was a single course of conduct but he was not obliged to do so. The Full Court recognised that other factors "suggested that the contraventions should be treated separately and as equally serious. The contraventions occurred on different days. They each involved conduct which, viewed in isolation, was of the same character and significance as the individual events concerning other employees. The fact that Mr Barry persisted, in circumstances where Ms Thompson was obviously distressed, gives support to the idea that the repeat contraventions could be regarded progressively more seriously rather than less seriously". 19 According to the Union the critical factual reference established by s 719(2) is the nature of the conduct and not the reason for it. RailCorp's approach, focusing on the reason for the breaches, is not contemplated by the language of s 719(2). 20 The 2005 agreement was certified on 19 July 2005. It remained in force until 2 October 2008. From not later than 18 January 2006 the Union repeatedly advised RailCorp that RailCorp was breaching cl 22 of the 2005 agreement with the consequence that authorised positions were not being filled as required. After initially communicating to the Union in its letter of 27 January 2006 that all authorised positions would be filled in accordance with cl 22, RailCorp appears to have adopted the view that cl 22 was subject to part of cl 3.10 of the 2002 agreement. This position is reflected in RailCorp's facsimile of 20 December 2006 and was maintained thereafter. 21 According to Mr Greenhalgh, after the employees rejected the station reform proposal in June 2006, RailCorp considered all vacant positions to be at risk of future abolition unless RailCorp specifically determined that the position should continue. Mr Greenhalgh said that decisions to fill positions were thus made on an ad hoc basis by reference to the requirements of the particular position which had become vacant. He said these decisions were made "at senior HR management level". This evidence is consistent with the facts relating to the 22 positions in respect of which I found breach of cl 22.1 of the 2005 agreement. The positions in question are all at Town Hall Railway Station. They became vacant at different times throughout the life of the 2005 agreement (from January 2006 through to March 2008). Some of the positions were advertised. Others were not. Some were ultimately filled. Others were not. 22 These facts make it difficult to accept that the breaches arose out of "a course of conduct" by RailCorp. It may be accepted that RailCorp held a view about the meaning of cl 22 of the 2005 agreement. Undoubtedly it relied on that view as authorising the actions it took (or did not take) when positions became vacant. But the fact that RailCorp held a view does not mean that the actions it took at different times over a period of two to three years in respect of different positions may be described as arising out of "a course of conduct". Not only were the positions different. They became vacant at different times. They were treated differently by RailCorp depending on RailCorp's approach to the particular position at the time it became vacant. This is demonstrated by Mr Greenhalgh's evidence of RailCorp's ad hoc approach and the factual summary in [100]-[105] and [119]-[170] of my principal reasons for judgment. 23 For these reasons I do not accept that s 719(2) applies to the breaches found in respect of the 22 positions identified in the declaration made on 18 August 2009. By its actions RailCorp committed separate breaches of cl 22.1 with respect to those positions.

DETERMINING THE APPROPRIATE PENALTIES 24 The parties agreed that if s 719(2) did not apply, nevertheless, the principle of totality requires a penalty to be determined for each breach and, thereafter, an assessment of the total penalty to be made in light of the overall contravening conduct. The total penalty must be proportionate to the overall conduct (Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560; [2008] FCAFC 8 at [23] and Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union (2008) 171 FCR 357; [2008] FCAFC 170 at [34]). 25 In determining the appropriate penalty for each breach it is necessary to take into account all of the surrounding circumstances and consequences of the breaches and the position of RailCorp. I have identified the surrounding circumstances above. I have also identified the fact that RailCorp is a large organisation with many employees. It must have been subject to numerous industrial agreements. Despite this, neither RailCorp nor its statutory predecessors have been previously found in breach. This is a significant factor weighing in RailCorp's favour. I am also satisfied that RailCorp has taken steps to ensure that it is able to meet its obligations under the provisions of the 2008 agreement equivalent to cl 22 of the 2005 agreement. Further, I accept that RailCorp takes its industrial obligations seriously. Although I have found RailCorp to be in breach of cl 22.1 of the 2005 agreement and do not consider that its approach to compliance with cl 22 was adequate in all of the circumstances, I nevertheless recognise that RailCorp believed it was entitled to act as it did. RailCorp also devoted substantial resources to managing vacant positions. It did not do so in accordance with its obligations in respect of the 22 positions identified, but it did not simply ignore vacant positions. 26 I have considered but rejected formulating different penalties having regard to the nature of any particular position or the length of time over which it remained vacant. First, I am not able to determine the relative importance of positions and understand Mr Livingstone's evidence about the resulting management difficulties he has experienced to be a consequence of none of the positions having been filled as cl 22 required. Second, cl 22.1 required a decision about the continuation of each position as it became vacant within a period of four weeks. Each breach was committed by reason of RailCorp's failure to make the required decision within the required time. The Union's allegations of breach were made throughout the period of RailCorp's contravening actions. RailCorp's conduct in respect of later breaches, accordingly, was no more or less serious than its conduct in respect of earlier breaches. 27 Taking into account the maximum penalty and all of the factors to which I have referred above (including specific and general deterrence) I consider that each breach should attract a penalty towards the lower end of the scale in the sum of $5000. If this penalty were to be imposed for each of the 22 breaches, RailCorp would be subject to a total penalty of $110,000. I consider a total penalty of $110,000 disproportionate to RailCorp's overall culpability. In terms of RailCorp's overall culpability I consider that the total penalty should not exceed $70,000. Application of the totality principle thus requires each penalty to be reduced. As mathematical precision is neither necessary nor appropriate I have determined the penalty for each breach to be $3100. The penalties should be paid to the Union as sought. I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Jagot.

Associate: Dated: 3 December 2009 Counsel for the Applicant: Ms C Howell

Workplace Relations Act 1996(Cth)

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