Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd - [2013] FCA 930 - FCA 2013 case summary — Zoe

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The contravention judgment 4 In the contravention judgment I accepted Mr Zwart's evidence that: (a) he was surprised by a reversing forklift driven by another employee because he did not see it or hear its reversing warning beeper in the noisy factory; (b) as a result of this incident he became concerned about the safety of the reversing warning beeper on that forklift and lodged a hazard report; (c) shortly thereafter he became concerned that merely lodging a hazard report was not enough and that he might be liable if he did not take further steps to deal with the risk posed by the inaudible warning beepers; (d) he considered the deficient beepers to be an immediate risk to occupational health and safety; (e) he tagged the forklifts as "not to be used" because he considered that the deficient beepers were unsafe; and (f) during subsequent meetings with Mr Street, Mr Scott and other managers he opposed the temporary measures proposed to deal with the issue, because he considered them unsafe. 5 I concluded (at [167]-[168]) that in expressing his view at the meetings about the safety of the temporary measures proposed, Mr Zwart was carrying out the responsibilities of a health and safety representative under the OHS Act. He held a different view to the managers as to the safety of the temporary measures proposed, but as I said at [168]: The right to advocate such a different view is an important workplace right and the dialogue it promotes serves an important occupational health and safety function. In my opinion, actions taken by a health and safety representative in asserting a particular position on a health and safety issue should not lightly be treated as constituting uncooperative or obstructive behaviour. 6 There can be no doubt that the rights and obligations imposed on health and safety representatives and employees through the OHS Act are serious. The right of a health and safety representative to advocate a different view to that of the employer serves an important role in maintaining, so far as practicable, a safe workplace. 7 I did not accept Mr Street and Mr Scott's evidence that they had no concerns about Mr Zwart's tagging the forklifts. I considered that they in fact held serious concerns about his actions in doing so but sought to disguise that concern before me (at [193]). I did not accept the evidence of Rohan Wiltshire that his decision to issue Mr Zwart with a final written warning was based only on the report prepared by Gregory Halse, or that no part of his reasons for issuing the final written warning included Mr Zwart's actions in tagging the forklifts and or asserting his views in subsequent meetings (at [218]). 8 I found that: (a) Mr Zwart's rights or duties under the OHS Act were "workplace rights" within s 340 of the FW Act; (b) Mr Zwart was exercising a workplace right when he tagged the forklifts because of his concern about the risk they posed to occupational health and safety and when, in the ensuing meetings with management, he resisted proposals to return the forklifts to service without fixing the deficient beepers; (c) Visy and Mr Street failed to discharge their onus of establishing that Mr Zwart's exercise of workplace rights was not a substantial and operative factor in their decision to instigate the investigation of Mr Zwart, suspend him from work and issue him a final written warning.

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General principles 16 The purposes to be served by the imposition of penalties are threefold: 1. Punishment - which must be proportionate to the offence in accordance with prevailing standards; 2. Deterrence - both specific and general; and 3. Rehabilitation. See: Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 ("Ponzio") at [93] per Lander J; Australian Building & Construction Commissioner v Construction, Forestry, Mining and Energy Union [2011] FCA 810 at [26] per Gilmour J. 17 Courts exercising industrial jurisdiction have identified a range of factors for assessing the appropriate penalty which, while not mandatory considerations, may be relevant to the circumstances of a particular case. These include: (a) the nature and extent of the conduct; (b) the circumstances in which the conduct took place; (c) the period of the conduct; (d) the nature and extent of any loss or damage sustained as a result of the conduct; (e) whether there has been similar previous conduct by the respondents; (f) whether the contraventions arose out of one course of conduct; (g) whether senior management was involved in the conduct; (h) whether any contrition has been exhibited; (i) whether any corrective action has been taken; (j) the cooperation of the respondents; and (k) the need for deterrence. See: Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) (1999) 94 IR 231 at [8] per Branson J; Construction, Forestry, Mining and Energy Union v Hamberger (2003) 127 FCR 309 at [51] per Spender, Drummond and Marshall JJ; Commonwealth Bank of Australia v Finance Sector Union of Australia (2007) 157 FCR 329 at [181] per Branson J; Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 ("Australian Ophthalmic Supplies") at [89] per Buchanan J; Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61 at [40] per Tracey J; Fair Work Ombudsman v W.K.O Pty Ltd [2012] FCA 1129 at [50] and [93] per Barker J. 18 However, the Court's task in assessing penalty is one of "instinctive synthesis": Australian Ophthalmic Supplies at [27] per Gray J and [55] per Graham J. This process requires the Court to take all relevant factors into account to arrive at a single result which takes due account of them all: Wong v The Queen (2001) 207 CLR 584 at [74]-[76] per Gaudron, Gummow and Hayne JJ; Markarian v The Queen (2005) 228 CLR 357 at [37] per Gleeson CJ, Gummow, Hayne and Callinan JJ. Care should be taken with the use of a checklist setting out the range of relevant factors as they give rise to a risk of transforming the process of instinctive synthesis into the application of a rigid catalogue of matters for attention: Australian Ophthalmic Supplies at [89]-[91] per Buchanan J. 19 Proportionality and consistency commonly operate as a final check on the penalty assessed, but the penalty should not be derived from comparing the case which is the subject of the assessment with any other particular case: Australian Ophthalmic Supplies at [54], [56]-[57] per Graham J and at [87] per Buchanan J. 20 The totality of the penalties imposed must also be appropriate. The totality principle requires that the total penalty for all related contraventions ought not exceed what is proper for all contravening conduct involved: Trade Practices Commission v TNT Australia Pty Limited (1995) ATPR 41-375 at [20] per Burchett J. The rationale of the principle is to ensure that the proposed penalty is proportionate when the contraventions are viewed collectively.

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The approach to an agreed penalty 21 While the parties have not agreed on the exact penalties to be imposed, they have agreed as follows: (a) The instigation and conducting of the investigation into Mr Zwart's conduct, and his suspension from employment, should be treated as arising from the same course of conduct and be considered as a single breach; (b) The appropriate penalty for Visy and Mr Street for instigating and conducting the investigation and for suspending Mr Zwart from employment is between 60% and 80% of the maximum penalty; (c) The appropriate penalty for Visy for issuing the final written warning to Mr Zwart on 18 August 2011 is between 70% and 90% of the maximum penalty; (d) The range of penalties specified are appropriate in all the circumstances, including when considering the totality principle; (e) The penalties be paid to the AMWU pursuant to s 546(3) of the FW Act; (f) There be an order treating as null and void and of no effect the final written warning issued to Mr Zwart on 18 August 2011; and (g) There be an order that Visy and Mr Street be restrained from issuing any warning or further warning to Mr Zwart in relation to his conduct on 5 August 2011. 22 The proper approach of the Court in respect of an agreed submission as to the quantum of penalty is set out in Minister for Industry, Tourism & Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at [51] per Branson, Sackville and Gyles JJ, where the Court explained: … (iii) There is a public interest in promoting settlement of litigation… … (vi) Where the parties have jointly proposed a penalty, it will not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure is, in the Court's view, appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It will be appropriate if within the permissible range. See also: Australian Securities & Investments Commission v Vizard (2005) 145 FCR 57 at [45] per Finkelstein J. 23 I respectfully agree with the observations of Jessup J in Wells v Locarno Management Pty Ltd [2008] FCA 1034 at [23]. As his Honour explained: The predictability involved in the resolution of penal proceedings in accordance with a pre-trial agreement reached by the parties is something which should, as a matter of public policy, be regarded as beneficial. 24 The question is whether the agreed range of penalties is within the "permissible range", that is whether such a penalty is neither manifestly inadequate or manifestly excessive: See Ponzio at [129] per Jessup J.

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The nature and circumstances of the conduct 28 The applicants point to the Worksafe Victoria publication entitled "A Handbook for Workplaces - Forklift Safety reducing the risk" which describes forklifts as "one of the most dangerous pieces of equipment found at Victorian workplaces". I have no difficulty in accepting that forklifts operating near pedestrian traffic, as is often required in an industrial setting, is inherently dangerous. In my view Visy should have understood this and been guided by that knowledge. 29 The applicants rely on my finding that, in taking the stance that he did, Mr Zwart was motivated by a genuine concern about the safety of the forklifts and the measures proposed to address those concerns. They argue that the respondents took adverse action against Mr Zwart for doing no more than trying to ensure a safe workplace for himself and his fellow workers. 30 On the applicants' submission, the conduct of Visy, Mr Wiltshire and Mr Street was inconsistent with Visy's safety campaign "Tuff on Safety" and make that campaign hollow. They argue that the contraventions are therefore to be seen in the range of the most serious contraventions of s 340. The applicants propose a penalty set at 80% of the maximum for the investigation and suspension contravention and 90% for the final written warning contravention. 31 For their part, the respondents accept that they are liable for serious contraventions of s 340 of the FW Act. For the investigation and suspension contravention they propose that the penalty be set at 60% of the maximum, and 70% for the final written warning contravention. 32 A conclusion that Visy did not treat occupational health and safety seriously or that its safety campaign was hollow would be a serious matter for a company. It would require cogent evidence before it could be made. However, the applicants did not run the contravention hearing on that basis and I was not invited to reach that conclusion. I am not prepared to draw the inference that Visy does not take occupational health and safety seriously on the evidence that was before me in the previous hearing, and I have been offered no further evidence in the penalty phase. 33 In considering the general circumstances I note that a straight-forward health and safety issue was blown out of proportion by the parties. Mr Zwart, although not uncooperative or obstructive, could have taken a more conciliatory approach to it. It is impossible for me to know whether such an approach would have made any difference, but I do not see his approach as ideal. By this I do not mean to detract from the seriousness of the contraventions or to suggest that the respondents are not responsible for them. They are, and it is unnecessary to again set out my criticisms of their conduct. 34 In my view the nature and circumstances of the conduct indicate a significant penalty is appropriate. The range of penalties that the parties propose reflect the seriousness of the contraventions.

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The loss and damage suffered 35 The applicants argue that the conduct of Visy and Mr Street has had serious consequences for Mr Zwart because: (a) he was prevented from performing his work for a period; (b) he was wrongly exposed to a disciplinary process and the distress and anxiety that accompanied it; and (c) the issuing of the final written warning had the effect of making his continuing employment less secure. 36 However, while Mr Zwart was prevented from performing his work for a two week period from 9 August to 23 August 2011, he was on full pay throughout this time. I see it as likely that he suffered stress in the period including concern as to the security of his future employment, but there is no evidence as to any stress, distress or anxiety that he suffered. This gap in the evidence was raised in the contravention judgment and if the applicants wanted to pursue a higher penalty based on the effect of the contraventions on Mr Zwart they were obligated to put on some evidence. 37 In the contravention judgment I accepted that the final written warning had the effect of making Mr Zwart's continuing employment less secure. But in assessing penalty it is important to recall that Visy was restrained from taking any action based on that warning from 31 August 2011 when an injunction against acting on the letter was granted: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Visy Packaging Pty Ltd (No 2) [2011] FCA 953. 38 I do not see the loss and damage suffered by Mr Zwart as indicating a penalty in the range proposed. The applicants conceded as much in argument. However, there is more force to the applicants' contention that other employees of Visy suffered loss and damage by the contravening conduct. The applicants argue that other employees were denied the benefit of Mr Zwart's role as a health and safety representative for a period and they may be, and have been, discouraged from exercising their rights to raise their health and safety concerns. 39 The applicants also point out that the contraventions arose after Visy had been prosecuted by WorkSafe Victoria and convicted in September 2010, over a serious forklift accident at its Wodonga factory in December 2008. They do not argue that this is similar previous conduct by the respondents, but instead submit that in such circumstances it is even more important that employees feel free to raise occupational health and safety issues. 40 I accept that there is a risk that the contravening conduct may give rise to a concern amongst other employees that, like Mr Zwart, they may be disciplined if they exercise their right to raise health and safety concerns and that this may discourage them from doing so. It is important that other employees are not so discouraged. They have a legal obligation under s 26 of the OHS act to take reasonable care for their own safety and the safety of other employees and they must not be discouraged from raising their legitimate concerns. There is a real risk that if they are so discouraged it will lead to a reduction in workplace safety. 41 However, since the contravention judgment some steps have been taken which should reduce any such discouragement. First, counsel for the applicants informed me that the AMWU advised its members of the contravention judgment in a regular email to members as well as at meetings at the Coburg factory. It earlier advised its members of the interlocutory injunction restraining Visy from acting on the final written warning. While I do not know how many of the employees at the factory received this information or what they made of it, it is likely that these communications had some effect. 42 Secondly, Ian Harmer, Visy's General Manager for Health, Safety and Environment as well as Employee Relations made affidavits dated 22 August 2013 and 10 September 2013 which set out a regime of communication with Visy's employees which will also likely reduce discouragement. He deposes that a program of compliance training is being developed that will address the role of the health and safety representative and their rights, duties and obligations. I was provided with no detail as to the content of the proposed program or any detail as to who will receive it and I give it little weight. 43 However, Mr Harmer also deposes that through "toolbox meetings", or other appropriate forums, all employees will be advised that they are entitled, and are encouraged to raise a genuine health and safety concern at any time, and that all of their rights, duties and obligations will be respected if they do so. The employees are to be informed that they will not suffer any adverse action as a result of raising a genuine health and safety concern. They will also be informed that, although it is the employee's right to raise a genuine health and safety concern, Visy has the right to manage the concern consistent with its legal obligations. He deposes that the first of these advices to employees took place at Visy's Coburg factory during a General Manager's Update on 11 and 12 September 2013. 44 The applicants argue that this undertaking to advise employees was partly given to address matters they raised in their penalty submissions. They submit that little weight should be given to Mr Harmer's recent efforts, and note that the undertaking was not offered until almost four months after the contravention judgment and more than two years after the contravention. There is force to this contention and I do not consider that the respondents readily offered to take these steps. However, the fact remains that they now propose to take these steps, which should reduce the discouragement of employees to which the applicants point. 45 Mr Harmer's evidence also partly addresses the contention that employees have been discouraged to date from raising health and safety concerns. He deposes that in the period since August 2011, there have been 111 hazard reports at the Coburg factory. These hazard reports include 16 reports by Mr Zwart himself, 85 reports by enterprise agreement covered employees (which I presume to be largely AMWU members) and 17 reports by management. The applicants argue, and I accept, that this does not inform me about whether there has been any significant reduction in hazard reports from prior periods, or as to the preparedness of employees who raise a hazard report to maintain their position in the face of opposition from management. Even so, the evidence remains of some value. 46 I see the evidence as indicating some loss or damage having been suffered, but at a lower level than contended by the applicants.

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Cases Cited (22)