Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union v DMG Industries Pty Ltd

Agreed facts 4 On 18 October 2000, an agreed statement of facts in the following terms was supplied by the parties to the Court: "STATEMENT OF AGREED FACTS "1. The Respondent ("DMG") is a medium sized company which operates in the manufacturing industry. Inter alia, the company produces tools which are used in the automotive industry. 2. DMG employed, at all material times, Manoel Fernandes, Jagadish Tuppad, Sachi Anand, Kalai Periyappa and David Guerra ("the Employees") as tool makers in the tool room of its factory in Keysborough, an outer Melbourne suburb. 3. All of the Employees joined the Applicant ("the AMWU") in October 1997. 4. Fernandes and Guerra have held the positions of shop stewards of the AMWU at the Respondent's premises since June 1998. 5. DMG employs about 90 employees in its tool room. Prior to October 1997, nearly all of these employees were not a member of any union. Some of these employees became members of the AMWU in October 1997. A minority of the tool room employees were, at times material to this proceeding, members of the AMWU. 6. At all material times, Dimitri (Jim) Glavinic held the position of managing director with DMG. 7. At all material times, Carlos Anguita held the position of senior team leader in the tool room with DMG. 8. After Anand attended a meeting of AMWU members with an AMWU organiser, Kim Elliott, in about June 1998 which was held directly outside the workplace, Carlos Anguita said to him words to the effect, "You made a big mistake going to that meeting." Anguita said this to Anand directly after Anand returned inside the workplace from the meeting. 9. In May 1999, Carlos Anguita spoke to Periyappa about Fernandes and Cherian Mammen. Anguita said to Periyappa words to the effect, "I want to get rid of these people, Kalai, because these people started the Union, these really bastards, that's why I want to get rid of these guys." 10. On 5 July 1999, Glavinic spoke to Tuppad in the CMM Room of the Respondent's tool room inter alia about Tuppad's finger injury. No one else was present during the conversation. Glavinic said "Manoel is your teacher and is teaching you." Glavinic then yelled, "I will fuck you slowly, first Manoel, next you, all in the Union one by one". Tuppad told him that neither Manoel nor the Union had anything to do with his finger. Tuppad said he would call Manoel and that Glavinic should talk to him. Tuppad went to leave the room to call Fernandes when Glavinic shouted "Get fucked" and slammed the CMM Department door and walked out of the room. 11. At or about 8.00 a.m. on 6 July 1999 Glavinic approached Periyappa near the tool fabrication area of the Respondent's premises and said to him words to the effect: Do you think you are the boss here? Do you think Manoel is the boss? I want to get rid of him, everyone says Manoel is the boss. I'm the boss here, I want to get rid of him, he's a bastard. 12. At or about 8.00 a.m. on 6 July 1999 Glavinic approached Guerra near the tool fabrication area of the Respondent's premises and said to him words to the effect: David, you know who is the boss here, not fucking Manoel, do you understand that? I gave you the job and the fucking money to get food for your fucking family and you'll take orders from me and not Manoel. I'm going to fucking sack you and your fucking Union. I prefer to shut down the place and not give a fucking job to anyone here. 13. In respect of the matters referred to in paragraphs 10, 11 and 12, Fernandes was informed by Tuppad, Periyappa and Guerra respectively of the substance of what was said by Glavinic in each of the exchanges."

5 In a separate proceeding in respect of which judgment was delivered on 2 June 1999, a penalty was imposed on DMG for contravention of Part XA of the Act in circumstances which can be broadly described as aggressive anti-union behaviour engaged in by representatives of DMG: see Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union v DMG Industries Pty Ltd (1999) 89 IR 360, [1999] FCA 735 ("DMG No 1").

6 Some of the people who feature prominently in this proceeding were also significant participants in DMG No 1. Those persons include the following: · Mr Dimitri Glavinic - managing director of DMG. · Mr Carlos Anguita - senior team leader in DMG's tool room. · Mr Manoel Fernandes - a toolmaker employed by DMG and a shop steward for the Union. 7 Among the additional relevant participants in this proceeding were the following: · Mr Jagadish Tuppad - a toolmaker employed by DMG since 1995 who became a member of the Union in October 1997. · Mr Kalaivanan Periyappa - a milling machine operator employed by DMG since 1995 who became a member of the Union in October 1997. · Mr David Guerra - a toolmaker employed by DMG who became a member of the Union in October 1997 and who became a shop steward for the Union on 15 June 1998. · Mr Sachi Anand - a toolmaker employed by DMG since 1996 who became a member of the Union in October 1997.

The Contraventions 8 Mr S Moore, of counsel, who appeared for the Union, submitted that DMG had engaged in eight separate contraventions of the Act. Those contraventions were identified by Mr Moore to be: · a threat to Mr Anand in breach of s298M of the Act; · a threat to Mr Periyappa in breach of s298M of the Act; · a threat to Mr Tuppad in breach of s298K of the Act; · a threat to Mr Fernandes (communicated to Mr Tuppad) in breach of s298K of the Act; · a threat to Mr Periyappa in breach of s298K of the Act; · a threat to Mr Fernandes (communicated to Mr Periyappa) in breach of s298K of the Act; · a threat to Mr Guerra in breach of s298K of the Act; and · a threat to Mr Fernandes (communicated to Mr Guerra) in breach of s298K of the Act. 9 Mr F Parry, of counsel, who appeared for DMG, submitted that DMG had engaged in only five contraventions of the Act. He contended that three alleged contraventions involving threats to Mr Fernandes were not separate contraventions from those which occurred at the same time in the course of conversations which Mr Glavinic had with Messrs Tuppad, Periyappa, and Guerra. That contention does not sit comfortably with DMG's acceptance that each threat to Mr Fernandes, although made directly to other people in each case, was a threat "of a type prohibited by s298K(1)". In my opinion, each of the eight threats constituted conduct in breach of Part XA of the Act. Each threat made to Mr Fernandes was "an intentional act of the employer directed to an individual employee": see BHP Iron Ore Pty Ltd v Australian Workers' Union (2000) 171 ALR 680, [2000] FCA 430 at [35], per Black CJ, Beaumont and Ryan JJ.

Applicable principles 10 In Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) (1999) 94 IR 231, [1999] FCA 1714, Branson J identified a non-exhaustive range of 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": see Coal & Allied at [8]. In the same paragraph of her Honour's judgment, Branson J identified those considerations as follows: "(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 Part XA of the Act. (c) Where more than one contravention of Part XA 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 Part XA 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." 11 In The Australian Workers Union v Johnson Matthey (Aust) Ltd [2000] FCA 728 at [5], I followed the approach of Branson J in Coal & Allied. More recently, Einfeld J referred to her Honour's judgment with apparent approval in Employment Advocate v National Union of Workers [2000] FCA 965. It was not submitted that I should depart from that approach in this proceeding and I am content to once again apply the considerations to which Branson J referred.

The circumstances in which the conduct occurred 12 The threat to Mr Anand which was made in June 1998 occurred in a factual setting which is distinct from the circumstances in which the other threats occurred. It occurred in the same month in which the proceeding in DMG No 1 was issued. It occurred prior to an undertaking given to the Court by DMG not to engage in conduct in breach of s298K of the Act. That undertaking was given on 29 April 1999 in the course of submissions on the question of the appropriate penalty to be imposed in DMG No 1. The undertaking appears at [11] of the judgment in that matter and was in the following terms: "The Respondent undertakes that it will not, by itself, its servants or agents:

contravene section 298K of the Workplace Relations Act 1996 (Cth) by:

(a) injuring or threatening to injure Manoel Fernandes and other employees of the Respondent who are members of the Applicant ("the Employees") in their employment; or

(b) altering or threatening to alter the Employees' position to their prejudice; or

(c) dismissing or threatening to dismiss the Employees,

for a prohibited reason or for reasons that include a prohibited reason, namely:

(d) because they are members of the Applicant, an industrial association;

(e) while Fernandes is a delegate of the Applicant, because he is a delegate. 2. dismiss the Employees for a prohibited reason or for reasons that include a prohibited reason, namely:

(a) because they are members of the Applicant, an industrial association; or

(b) while Fernandes is a delegate of the Applicant, because he is a delegate. 3. threaten to dismiss the Employees for a prohibited reason or for reasons that include a prohibited reason, namely:

(a) because they are members of the Applicant, an industrial association; or

(b) while Fernandes is a delegate of the Applicant, because he is a delegate." 13 The threat to Mr Anand constituted conduct in breach of s298M of the Act rather than s298K of the Act. This observation is not meant to excuse the conduct but to highlight that it was of a different type to that which was covered by the subsequent undertaking. Further, the time of the occurrence of the threat to Mr Anand makes that conduct less significant than the other conduct referred to in the agreed statement of facts which the parties acknowledged to involve breaches of Part XA of the Act. It is also notable that this contravention preceded the other contraventions in this proceeding by about one year. 14 The second contravention of s298M of the Act was the threat to Mr Periyappa made in May 1999. This threat was inconsistent with a statement made by Mr Glavinic on 29 April 1999 as part of the agreement to settle DMG No 1. That statement was set out at [10] of the reasons in DMG No 1 and was as follows:

"DMG Industries recognises the important role that employees' membership of a union has in maintaining a stable, safe and efficient working environment. The company recognises the AMWU as the appropriate union to cover tool room employees. DMG recognises that the AMWU has shop stewards and that these shop stewards currently are Manoel Fernandes and David Guerra. The company acknowledges that all tool room employees have a right to join the union."

It is extraordinary that very soon after that statement was made, the senior team leader in the tool room would state an intention to get rid of the people who were instrumental in the Union gaining membership at DMG. It was conduct "undertaken in deliberate defiance or disregard of the Act": see Coal & Allied at [8].

15 All other six contraventions involve breaches of s298K of the Act in most extraordinary circumstances where the conduct was in breach of the undertaking given to the Court in DMG No 1. Save for the actual carrying out of the threats which were made, it is difficult to imagine a more serious set of breaches of Part XA of the Act. It was conduct in deliberate defiance not only of the Act, but in deliberate defiance of the Court. It is conduct which would ordinarily be deserving of high penalties.

Previous breaches 16 In DMG No 1, DMG admitted five contraventions of Part XA of the Act. This is DMG's second set of contraventions of s298K of the Act. The most significant contraventions occurred in early July 1999, just over a month after the publication of the Court's reasons for judgment in DMG No 1. This consideration reinforces my view of the appropriateness of the imposition of high penalties.

Distinct contraventions or otherwise 17 Each contravention of s298M of the Act was a distinct one. The six contraventions of s298K of the Act occurred in three separate conversations between Mr Glavinic and each of Messrs Tuppad, Periyappa and Guerra. On one view, the contraventions may be seen to have been committed in three separate courses of conduct. In DMG No 1, the Court said (at [17]): "Notwithstanding the submissions of counsel on the "course of conduct" issue I consider it appropriate to individually consider the contraventions of s 298U of the Act which have been found to have occurred. Part XA of the Act does not contain a provision akin to s 178(2) of the Act. This does not mean that conduct which properly considered as conduct adjunct to other conduct may not in appropriate circumstances result in no penalty being imposed with respect to a particular contravention. This is a standard sentencing principle." 18 I see no reason to depart from that approach and view the additional threats to Mr Fernandes on each occasion (with one reservation discussed below) as conduct adjunct to the threats to the other three employees. However, it would ordinarily be unjust to permit DMG to escape any penalty as a consequence of its threats to Mr Fernandes. Even though those threats were conveyed through other members of the Union, I infer that they were made and repeated in order to impact upon Mr Fernandes in his capacity as a delegate of the Union.

The consequences of the conduct and the need for protection of freedom of association 19 Mr Parry submitted that the Court should have regard to the fact that the threats were not carried out. However, as the Court said in Johnson Matthey at [5]: "The lack of long-term adverse consequences, whilst significant, should not loom too large as a mitigating factor on penalty. A transgressor should not unduly benefit from the stoicism of the injured party. Although the Company has no history of offending against the Act, the need to deter like conduct is an important factor to consider on the question of penalty." 20 Less courageous delegates than Mr Fernandes and Mr Guerra may have been intimidated into resigning their positions under the pressure imposed upon them by DMG. That is especially so given that the pressure emanated from Mr Glavinic, the managing director of DMG. Less committed unionists than Mr Tuppad and Mr Periyappa may have resigned from the Union in the face of the pressure exerted on them by Mr Glavinic and Mr Anguita. 21 One significant consequence of the conduct is that delegates and members of the Union still need to be anxious about whether Mr Glavinic and shop floor management will comply with the law given the immediacy of the breaches of s298K after the conclusion of the hearing in DMG No 1, the issuing of the statement by Mr Glavinic as part of the settlement in that case and the undertaking given to the Court. As Mr Moore submitted, given the belligerent conduct of Mr Glavinic, the members of the Union at DMG can only look with confidence to the Court for any protection of their right to freedom of association.

The need for deterrence 22 Having regard to the considerations referred to earlier in these reasons for judgment, it is hard to think of a case involving breaches of Part XA of the Act where there is a greater need for deterrence.

Factors in mitigation 23 The matter was scheduled for a four day trial. The Court was spared the need to sit on this matter for that time by the settlement of the proceeding on questions of liability. Some credit should be given to DMG for taking that course. However, greater credit would have been given had that course been taken at an earlier stage. The other factor relevant to mitigation is the payment of the Union's legal fees made by DMG. This payment was no doubt made in recognition of the expense which the Union was put to in taking steps to enforce the law. I consider it appropriate to deduct from any penalty ordered the sum which was paid to the Union to cover its legal fees. The same approach was taken in DMG No 1.

Appropriate penalties 24 The Court will impose a small penalty for the breach of s298M of the Act in respect of Mr Anand. I do not intend, by imposing a small penalty, to excuse the conduct. Employees ought not be discouraged from attending meetings of organisations to which they belong and their jobs ought not be prejudiced by their union activity. Ordinarily, a mid-range penalty would have been imposed for this contravention. However, a small penalty will be imposed having regard to DMG's concession in relation to contraventions in this proceeding which led to the settlement of all liability issues and also having regard to the fact that the contravention occurred in June 1998, before the 29 April 1999 statement made by Mr Glavinic and undertaking given by DMG in DMG No 1, and before the publication of the Court's reasons in DMG No 1. I will impose a penalty of $500 in respect of that contravention. 25 The remaining breach of s298M of the Act occurred after the statement made by Mr Glavinic recorded at [10] of the Court's reasons for judgment in DMG No 1. I have elsewhere in these reasons recorded my view of Mr Anguita's conduct. I add that I consider it, in context, to be an appalling abuse of power by a senior team leader made with ostensible authority. It is conduct which is deserving of a high penalty. In the circumstances, I consider it appropriate to impose a penalty of $8,500 in respect of the contravention of s298M of the Act referred to at paragraph 5(b) of the terms of settlement. 26 The breaches of s298K in respect of Messrs Tuppad, Periyappa and Guerra call for a very high penalty in each case. Restraint prevents me from describing Mr Glavinic's behaviour more descriptively than extremely regrettable. This is especially so having regard to it being conduct in breach of an undertaking to the Court and involving a repeat series of contraventions after previous contraventions. I consider this to be one of those rare occasions where a maximum penalty would ordinarily be appropriate for each of the three contraventions concerned. 27 In respect of the contraventions involving threats to Mr Fernandes, I consider it would ordinarily be appropriate to impose the maximum penalty in respect of one such threat, ie. that communicated to Mr Guerra. It is more likely that a threat directed against a shop steward to a fellow shop steward by Mr Glavinic would be considered by Mr Fernandes to be more serious than a threat communicated via a union member who is not a shop steward. I am prepared to consider the threats made to Mr Fernandes via Mr Tuppad and Mr Periyappa to be conduct adjunct to the other threats made directly to those employees. I impose no penalty with respect to the contraventions constituted by the threats made to Mr Fernandes via Mr Tuppad and Mr Periyappa but would ordinarily impose the maximum penalty in respect of Mr Glavinic's threat to Mr Fernandes which was made in his 6 July 1999 conversation with Mr Guerra, for the reasons discussed in [18] above. 28 The penalties which the Court finally imposes will reflect a discount for the payment by DMG of $31,203.45 for the Union's legal fees. The formal penalty which will be imposed will be as follows: · $500 for breach of s298M of the Act in respect of the threat made to Mr Anand; · $8,500 for breach of s298M of the Act in respect of the threat made to Mr Periyappa; and · $8,796.55 for breach of s298K of the Act in respect of the threat made to Mr Guerra concerning Mr Guerra himself. 29 No penalty will be imposed with respect to the other contraventions having regard to the payment made by DMG in respect of the Union's legal fees.

To whom shall the penalties be paid 30 The usual order under s356(b) of the Act is to make the penalties payable to the person who applied for the order: see Coal & Allied at [17] to [18]. In DMG No 1, I departed from that approach. I considered that because DMG had paid the Union's legal costs, the Union should not have received a windfall gain. On reflection, I do not consider that such an approach gives any recognition to a factor raised by Mr Moore who correctly submitted that the payment of the Union's legal costs "does not in any way compensate the Applicant for the financial, human and other resources which it has been required to dedicate to assisting and representing its members in respect of the allegations in the proceedings". Accordingly, I will order that each penalty imposed on DMG be paid to the Union.

Orders 1. A penalty of $500 be imposed on the respondent for contravention of Part XA of the Act in respect of its threat to Mr Anand in the circumstances referred to in the reasons for judgment herein.

A penalty of $8,500 be imposed on the respondent for contravention of Part XA of the Act in respect of its threat to Mr Periyappa made in breach of s298M of the Act.

A penalty of $8,796.55 be imposed on the respondent for contravention of Part XA of the Act in respect of the threat made to Mr Guerra in the circumstances referred to in the reasons for judgment herein, involving a direct threat to Mr Guerra himself.

No penalty be imposed in respect of each of the remaining five contraventions identified in the reasons for judgment herein.

Each such penalty so imposed totalling $17,796.55 be paid to the applicant within 21 days of the date of this order. I certify that the preceding thirty (30) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.

Associate: Dated: 27 October 2000 Counsel for the Applicant: Mr S Moore

Solicitor for the Applicant: Maurice Blackburn Cashman

Date of Hearing: 17 and 18 October 2000