Cahill v Construction, Forestry, Mining and Energy Union

Bovis 6 Between December 2003 and about December 2005, Bovis was the principal contractor on the redevelopment of the Herald and Weekly Times building on the corner of Flinders and Exhibition Streets in Melbourne ("the site"). Bovis engaged employees to perform work on the site. Those employees included some who were members of the CFMEU.

A safety issue 7 On the afternoon of 10 May 2004, during a concrete pour into formwork for a wall near a corner of the core building on the site, a concrete spill occurred in the immediate vicinity of the wall formwork. The spill caused an imminent risk to health and safety in that part of the site where it occurred. Approximately 12 tonnes of concrete was spilled. 8 On 11 May 2004 a Worksafe inspector inspected the site. His report states: During a pour on the Monday afternoon, one of the shutters on the western face of Level 11 was found to be misaligned, resulting in concrete pouring onto the lower level of the protection deck. It is estimated approximately 4-6 meters (approx. 12 tonnes) of concrete fell onto the deck. The pour was immediately ceased. No one was injured. The report noted that rectification work had commenced and that "(w)ork at the site has ceased pending rectification." 9 There had been other safety concerns at the site. In March 2003, a safety issue arose concerning the presence of lead paint fragments becoming airborne during demolition of the old building. In January 2004, an issue arose concerning the presence of asbestos in lifts in the then existing building.

The events of 11 May 2004 10 At 7.00 am on 11 May 2004, CFMEU members and other workers employed at the site were due to commence work. The workers refused to start work and remained in the sheds. Instead, at that time, a meeting occurred. It was attended by representatives from Bovis and various union delegates and occupational, health and safety representatives. 11 At the meeting, representatives of Bovis said that the affected area could be isolated and workers relocated to other areas on the site. While the spill was investigated, they suggested work could continue on the rest of the site. Mr Tadic, together with another or other union delegates, suggested that the workers on site should go home for the day while a small clean up crew remained on the site. 12 At about 8.15 am a representative of Bovis told CFMEU members that the spill would be isolated by barricades. He then directed the members to commence a general site clean up before working as usual in all other areas of the site. 13 At about 8.30 am, all delegates and safety representatives, including Mr Tadic, held a meeting with all workers on the site. After the meeting, at about 9.30 am, all the workers on the site commenced a 48 hour stoppage of work.

The events of 13 May 2004 14 At about 9.30 am on 13 May 2004, the workers returned to the site but remained in the sheds. At about 10.00 am, Mr Setka and Mr Tadic asked Bovis to pay CFMEU members for time lost during the two day stoppage. Bovis rejected that request. Mr Setka and Mr Tadic then said that workers on the site, including CFMEU members, would not return to work. 15 At about 2.00 pm, Mr Setka and Mr Tadic again requested Bovis to pay CFMEU members for the stoppage period and also for the subsequent period during which the members refused to return to work. Bovis again refused. 16 At about 3.00 pm, Mr Setka and Mr Tadic told the workers on site that they should leave the site, prior to the usual 3.30 pm finish time, and when they returned in the morning they should stay in the sheds.

The events of 14 May 2004 17 At about 6.00 am on 14 May 2004, Mr Setka again asked Bovis to pay CFMEU members for the 48 hour stoppage and the subsequent period during which Bovis employees refused to return to work. Bovis representatives showed Mr Setka a document concerning the planned rectification work and said that while that work was carried out, the workers could return to work on the remainder of the site. Mr Setka was not swayed. 18 At 7.00 am, the workers arrived at the site but remained in the sheds. From about 8.00 am to 8.15 am, Mr Setka, Mr Tadic and various union and safety representatives held a meeting with the workers on the site. Immediately after the meeting, all workers began to leave the site. As this occurred, at about 8.30 am, either Mr Setka or Mr Tadic, or both of them, told representatives of Bovis that the workers on the site had withdrawn their labour until 7.00 am on Tuesday 18 May 2004, and that they would not commence work on that day unless they were paid wages for the period 11 to 15 May 2004. In the same conversation it was also said that "action" would start to affect other Bovis sites in Victoria. 19 At about 11.00 am, two employees of Bovis, and site delegates for the CFMEU at another construction site ("the Melbourne Central site"), told the Bovis foreman at the Melbourne Central site that there would "be trouble at the Melbourne Central site unless the issues at the Herald and Weekly Times site were fixed." 20 At about 1.30 pm, at another site at 385 Bourke Street, Melbourne in which Bovis was also engaged, Bovis employees banned induction training, mobile cranes and work with villaboard material. 21 At about 2.40 pm, Bovis made an application in the Australian Industrial Relations Commission pursuant to s 127 of the Act with a view to stopping the industrial action. That proceeding was adjourned at 3.54 pm.

Subsequent events 22 Although Saturday 15 May 2004 was a normal working day, no CFMEU members attended the site. Monday 17 May 2004 was a rostered day off. 23 At about 7.00 am on 18 May 2004, the workers employed at the site returned to work but remained in the sheds. During that morning, between 7.00 am and 8.15 am, Bovis and the CFMEU, and other unions with members on the site, resolved the dispute on the basis that Bovis would pay the workers for ten hours. 24 Payment for 10 hours reflected the following times: · 11 May - 7.00 am to 9.30 am; · 13 May - 9.30 am to 3.30 pm; and · 14 May - 7.00 am to 9.00 am. Mr Setka and Mr Tadic were involved in the meetings which led to the negotiated settlement. 25 At about 9.30 am on 18 May 2004 all workers resumed work on the site.

The contraventions 26 The respondents each breached s 187AB(1)(a) on three occasions: · at 10.00 am on 13 May 2004; · at 2.00 pm on 13 May 2004; and · at 6.00 am on 14 May 2004. 27 The respondents breached s 187AB(1)(b) on the following occasions: · by organising and engaging in industrial action at the site from about 9.30 am on 13 May 2004 until 9.30 am on 18 May 2004; · by threatening to organise industrial action against Bovis at about 8.30 am and 11.00 am on 14 May 2004; and · by imposing bans at 385 Bourke Street on 14 May 2004 (this applies to the CFMEU alone and not to the personal respondents). This is a total of seven contraventions by the CFMEU and six by the personal respondents when one considers the two threats in the second last dot point above. 28 Each of the factors constituting breaches of s 187AB(1)(a) and (b) amount to one breach for each respondent of each of those paragraphs. This approach is consistent with that adopted by Jessup J in Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at 575-576.

Factors to consider in assessment of penalty 29 The authorities suggest that in matters involving contraventions of civil penalty provisions the following factors are relevant: · the circumstances in which the relevant conduct took place (including whether the conduct was undertaken in deliberate defiance or disregard of the Act); · whether the respondents have previously been found to have engaged in conduct in contravention of the relevant part of the Act; · whether the various contraventions are properly seen as distinct or whether they arise out of one course of conduct; · the consequences of the conduct found to be in breach of the Act; and · the need for deterrence. 30 These factors, together with the need for the protection of industrial freedom of association, were re-affirmed by two members of the Full Court in Commonwealth Bank of Australia v Finance Sector Union of Australia (2007) 157 FCR 329 per Branson J at 362 and Marshall J at 370. 31 Other factors made relevant by other authorities include: · the financial position and nature of the respondents; · the co-operation of the respondents; and · the contrition of the respondents.

Submissions of the respondents 32 Counsel for the respondents reminds the Court that the dispute which led to the contraventions of the Act arose out of a serious and legitimate safety dispute which caused an imminent risk to health and safety at the site after a spillage of 12 tonnes of concrete. This occurred in circumstances where previous serious safety issues about lead paint fragments and asbestos had arisen on the site. 33 Counsel for the respondents submits that the contraventions arose out of a single course of conduct. Essentially, it concerned a claim for payment for a period in which industrial action was taken and the organising of industrial action to seek to secure that payment. 34 Counsel for the respondents submits that there is no need for specific deterrence because involvement in the proceeding has cost the CFMEU considerable time and money. He submits that there is no need for general deterrence because prosecutions for breach of strike pay provisions have ceased and strike pay claims are no longer a feature of the construction industry. 35 Counsel for the respondents also stresses that the CFMEU is not a profit making body and did not engage in the action it took for its own gain or that of its officials. Further, he contends that the respondents co-operated with Mr Cahill in reaching an agreement on the essential facts before the Court. That measure of agreement avoided the expense, time and effort associated with a lengthy trial of the proceeding.

Submissions for Mr Cahill 36 Counsel for Mr Cahill submits that the dispute could have been avoided if the CFMEU followed safety procedures which would have resulted in work continuing in areas unaffected by the spill. Counsel contends that the contraventions were deliberate and resulted in losses to Bovis in excess of $100,000. Counsel also stresses the need for specific and general deterrence. 37 Counsel for Mr Cahill refers to the fact that the CFMEU has previously been fined for engaging in industrial action contrary to the Act. He refers to previous transgressions against s 187AB in Ponzio (2007) 158 FCR 543 as well as transgressions of other provisions.

Conclusion on penalty 38 Consistently with the approach taken in Ponzio (2007) 158 FCR 543, I consider that a penalty should be imposed on the CFMEU, because the CFMEU officially applied pressure to representatives of Bovis to pay strike pay to CFMEU members. Bans were imposed at another Bovis site as part of that pressure in addition to stoppages at the site. Also, costly industrial action occurred over several days. The breaches, although in response to a safety issue, were deliberate. Resolution of the safety issue did not require the taking of industrial action. There was no reason why work could not continue on other parts of the site which were unaffected by the spill. So much is consistent with the safety disputes resolution procedure which is commonly applied on building sites. That procedure involves the immediate problem being isolated and work being performed elsewhere when it is safe to do so. 39 I accept that there is no need for specific deterrence. The making of claims for strike pay is not now a feature of the construction industry. The events the subject of this proceeding occurred nearly four years ago in a vastly different industrial climate to that which currently exists. I accept there is some need for general deterrence, although not to any great extent, as breaches of this type are now rare, and will be so, irrespective of what percentage of the maximum penalty is imposed on the CFMEU. 40 The CFMEU is a large organisation with nationwide coverage. I do not consider that the actions of other branches or officials (other than those involved in this matter) in respect of other provisions of industrial legislation should be visited upon them for the purposes of assessing penalty. I form a different view, of course, concerning prior contravention of s 187AB. 41 Weighing up all the circumstances and relevant sentencing factors, including the CFMEU's co-operation in the proceeding with Mr Cahill and its expenditure of funds in its involvement in the proceeding, I consider that a penalty of $4,000 is an appropriate one, doing one's best to weigh together all the countervailing factors referred to above and applying the totality principle to the contraventions; see Ponzio (2007) 158 FCR 543 per Jessup J at 575 and Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8 per Gray J at [23] and Graham J at [66] and [71-73]. 42 The most significant breaches of the Act were the engaging in industrial action from 13 to 18 May 2004 (other than on the days during that time when work would not ordinarily be performed) and the imposing of bans at the 385 Bourke Street site. A penalty of $2,000 is appropriate in each case. The demands for payment made on 13 and 14 May 2004 are also significant breaches for which a penalty of $1,000 is appropriate for the first occasion and $500 for the other two subsequent occasions. The other breaches constituted by the two threats on 14 May 2004 involve overlapping conduct for which no extra penalty should be imposed. Applying the totality principle, the figure of $6,000 is reduced to a penalty of $4,000. 43 An important factor in striking the appropriate penalty at a rate set slightly below that struck by the majority in Ponzio (2007) 158 FCR 543 is that it is now April 2008 and since May 2004 there have been no new applications alleging any breaches of strike pay provisions of the Act, including as amended on 27 March 2006 by the Workplace Relations Amendment (Work Choices) Act 2005 (Cth). The only other breaches of the strike pay provisions of the Act arose out of a single death in the industry in August 2003. The other significant matter in this case is the cooperation of the CFMEU in ensuring that the Court dealt with penalty on agreed facts thus saving much time and expense.

The second and third respondents 44 I consider that no useful purpose would be served by fining Mr Setka or Mr Tadic. Mr Setka was simply doing his job as a union official in accordance with the CFMEU's then approach to safety issues and strike pay. That approach has changed. Mr Setka, like other organisers in the industry, does not now make claims for strike pay. His conduct was that of an agent for his employer. He represented the members of the CFMEU in accordance with its then corporate approach to issues of the type dealt with in these reasons for judgment. 45 I also consider that no useful purpose would be achieved by fining Mr Tadic. He was performing his representative role as a shop steward. No doubt, he was guided by the more industrially experienced Mr Setka and the then expectations of the CFMEU. Shop stewards in the industry are now well aware that agitating for strike pay is a thing of the past. 46 I propose to only make declarations of breach in respect of each personal respondent. I certify that the preceding forty-six (46) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.

Associate: Dated: 11 April 2008 Counsel for the Applicant: Mr P O'Grady

Solicitor for the Applicant: Australian Government Solicitor