Civil Air Operations Officers' Association of Australia v Airservices Australia

Federal Court of Australia|2023-02-17|Before: Bromberg J

The respondent pay a penalty of $35,000 in respect of its contravention of s 50 of the Fair Work Act 2009 (Cth) by reason of its non-compliance with cl 8.3(a) of the Airservices Australia (Air Traffic Control and Supporting Air Traffic Services) Enterprise Agreement 2017-2020.
The respondent pay a penalty in the amount of $35,000 in respect of its contravention of s 50 of the Fair Work Act 2009 (Cth) by reason of its non-compliance with clauses 8.3(b), 19.9 and 19.14 of the Airservices Australia (Air Traffic Control and Supporting Air Traffic Services) Enterprise Agreement 2017-2020.
The penalties referred to in orders 1 and 2 be paid to the applicant within 28 days.
There be no order as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

BROMBERG J: 1 These reasons address whether civil penalties should be imposed in relation to contraventions of the Fair Work Act 2009 (Cth) (FW Act) by the respondent (Airservices) dealt with by my judgment published as Civil Air Operations Officers' Association of Australia v Airservices Australia [2021] FCA 1313 (liability judgment). These reasons assume substantial familiarity with the liability judgment and, unless otherwise specified, adopt the abbreviations contained therein. 2 The contraventions found by the liability judgment arose out of a dispute between the applicant (Civil Air) and Airservices over the implementation of a remote overnight arrival and departure service for the Rockhampton/Mackay sector (SAFRA service) by air traffic controllers (ATCs) at the Cairns Terminal Control Unit (Cairns TCU). The subject matter of the dispute principally concerned whether Airservices had undertaken consultation with the affected employees in accordance with the Airservices Australia (Air Traffic Control and Supporting Air Traffic Services) Enterprise Agreement 2017-2020 (Enterprise Agreement). 3 In the liability judgment I made declarations that Airservices: (1) contravened s 50 of the FW Act by contravening cl 8.3(a) of the Enterprise Agreement, by making the SAFRA Implementation decision referred to at [14] of the liability judgment without consulting affected employees in the manner provided for by cl 8.5 of the Enterprise Agreement; and (2) contravened s 50 of the FW Act by: (a) contravening cl 19.9 of the Enterprise Agreement, by effecting changes to the base roster arrangements for Cairns TCU employees to facilitate an overnight SAFRA service for the Rockhampton/Mackey sector without consulting or discharging the other requirements imposed by that clause; (b) contravening cl 19.14 of the Enterprise Agreement, by publishing the Published Roster referred to at [4] of the [liability judgment] without consulting or discharging the other requirements imposed by that clause; and (c) contravening cl 8.3(b) of the Enterprise Agreement, by changing base roster arrangements and thereby changing the regular roster of the Cairns TCU employees without consulting in the manner provided for by cl 8.10 of the Enterprise Agreement. 4 The parties accepted that the contraventions of cll 8.3(b), 19.9 and 19.14 arose out of a single course of conduct and, by reason of s 557(1) of the FW Act, constitute a single breach of s 50 of the FW Act: see [5] and [166] of the liability judgment. It was thus accepted that two penalties should be imposed for the contraventions of s 50 - a penalty in relation to the contravention of cl 8.3(a) of the Enterprise Agreement and a penalty in relation to the contraventions of cll 8.3(b), 19.9 and 19.14. It was not in contest that the maximum applicable penalty for a contravention of s 50 of the FW Act was, at the time that the contravening conduct occurred, $63,000. Civil Air contended for two penalties of between 80% and 100% of the maximum. Airservices contended for penalties "at the lower end" of the penalty range. 5 The facts of this proceeding are set out in full in the liability judgment. By way of overview it is convenient to recite the key facts below. 6 Airservices is a Commonwealth statutory corporation established under and regulated by the Air Services Act 1995 (Cth) for the purpose of providing national civilian air traffic services. Its operations are supervised by the Civil Aviation Safety Authority (CASA). 7 In November 2016, Airservices ceased providing the overnight SAFRA service for the Rockhampton/Mackay sector. 8 On 25 May 2018, CASA issued a safety finding (Safety Finding) which identified a regulatory breach of civil aviation legislation by reason of Airservices' failure "to maintain enough suitably qualified and trained personnel to enable it to provide the published approach services to Rockhampton and Mackay for the entire period the Tower was inactive as required by Part 172.110 of [the Civil Aviation Safety Regulations 1998 (Cth)]". 9 Following the Safety Finding, CASA and Airservices engaged in a range of discussions as to how the deficiencies identified in the Safety Finding were to be addressed. 10 Although some preparations for the implementation of a SAFRA service were made by Airservices in the period from 25 May 2018 through to 9 October 2019, Airservices' preferred position was that it be relieved of the requirement to provide a SAFRA service. Airservices sought to convince CASA to support its proposed "Airspace Modernisation Program" which, if brought into effect, would dispose of the need for the SAFRA service. During that period a number of extensions were granted by CASA for the required implementation date of the SAFRA service. 11 Despite Airservices' anticipation that CASA would dispense with the need for Airservices to provide the SAFRA service and after Airservices failed to implement the SAFRA service by the then extended deadline of 30 September 2019, on 9 October 2019, CASA informed Airservices that it would not grant Airservices a further extension of time sought by Airservices for the provision of a SAFRA service. CASA required Airservices to provide a SAFRA service by no later than 31 October 2019. 12 On 10 October 2019, various Airservices managers met to discuss CASA's directive. A plan was developed for the resumption of a SAFRA service from 31 October 2019 (SAFRA Implementation decision). In the liability judgment I found that Airservices breached cl 8.3(a) of the Enterprise Agreement by making the SAFRA Implementation decision without undertaking the consultation required by that sub-clause. 13 On 11 October 2019, Mr David Wells, Airservices' Director Operations, Airspace Services, informed employees, including the Cairns TCU employees, that "we have received instructions to resume full SAFRA services using the existing APPR rating and endorsement model by 31st October 2019". 14 Clause 19.15 of the Enterprise Agreement required Airservices to publish rosters with at least 45 days' notice. 15 On 17 October 2019, Airservices published a roster for the Cairns TCU employees (Published Roster) which allocated shifts to the Cairns TCU employees, including evening and night shifts for the provision of the SAFRA service, for a six-week period commencing on 2 December 2019. In the liability judgment I found that Airservices published the Published Roster without undertaking the necessary consultation in accordance with cll 8.3(b), 19.9 and 19.14 of the Enterprise Agreement. 16 Shortly thereafter, CASA agreed to delay the implementation of the SAFRA service until mid-December 2019. 17 On 28 November 2019, the Published Roster was withdrawn. In its place Airservices published two rosters applying from 2 December 2019 to 12 January 2020 and 13 January 2020 to 23 February 2020, respectively. On the following day, Airservices withdrew both rosters and replaced them with a single roster applying from 2 December 2019 to 23 February 2020 which did not include the additional shifts for the SAFRA service.

The FW Act and the Applicable Principles 18 Section 546 of the Act provides the Court with the power to order that a person pay a pecuniary penalty that the Court "considers is appropriate", where the Court is satisfied that a person has contravened a civil remedy provision provided for by the FW Act. 19 In Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; (2022) 399 ALR 599, Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ considered the scope of the power conferred by s 546 and made the following observations: The purpose of a civil penalty is primarily, if not solely, the deterrence (both specific and general) of future contraventions of the FW Act at ([9]); The maximum available penalty is not to be reserved for only the most serious examples of offending but is available to be imposed where it is reasonably necessary to achieve the deterrence of future contraventions (at [10]). However, it does not follow that s 546 "must be taken to require the imposition of a penalty approaching the maximum in relation to any and every contravention by a recidivist offender" (at [46]); An "appropriate" penalty is one that strikes a "reasonable balance between oppressive severity and the need for deterrence in respect of the particular case" (at [46]); Both the circumstances of the contravener and the circumstances of the contravention (ie the seriousness of the contravention) may be relevant to the assessment (at [19] and [57]); The penalty appropriate to protect the public interest by deterring future contraventions may be "moderated" by a range of factors of the kind adverted to by French J in Trade Practices Commission v CSR Limited (1991) ATPR 41-076 (at [47]). However, the list of possible relevant considerations set out by French J ought not be treated as if it were a legal check list (at [19]).

Seriousness of the contraventions 20 In my view, the seriousness of the contraventions is undoubtedly relevant to the assessment of the appropriate penalties. I regard each of the contraventions as a serious contravention of the Enterprise Agreement and thus of the FW Act. 21 The rights or entitlements to consultation provided by the Enterprise Agreement are important rights and entitlements. As has been recognised in relation to a predecessor of the Enterprise Agreement, the consultation of employees required is a substantive and meaningful obligation which is of real industrial importance: Civil Air Operations Officers' Association of Australia v Airservices Australia [2019] FCA 1542 at [40] (Mortimer J). That observation may be regarded as applicable generally to consultation obligations because of the inherent benefits which flow from an employer consulting with those of its employees likely to be adversely affected by a prospective decision: see the observations made by Logan J in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited (No 2) [2010] FCA 652 at [49]-[51]. 22 The liability judgment is replete with my own observations confirming the importance which the Enterprise Agreement attaches to the consultation obligations in question. By not being consulted, the employees were denied a real opportunity to have input into Airservices' decision-making in relation to decisions with potentially very serious consequences for them. Consequently, an opportunity to avoid or mitigate adverse consequences for the employees was denied in circumstances where the implementation of the SAFRA service was likely to result in potentially significant disadvantage to employees because of the need for wholesale changes to rosters including the master roster which regulated the pattern of work of employees over the long-term. Over the short-term and because there would likely be an absence of trained employees it was likely that a large workload burden would be placed on those employees already trained to provide the SAFRA service. Consequently, there was a potential for seriously adverse consequences for employees who had made holiday, child-care and other personal commitments based on the existing master roster. The likely increased workload burden had potential ramifications not only for the health and safety of the employees affected but also the safety of air passengers for whom Airservices and the ATCs were responsible. The safety-critical environment in which ATC's work is underscored by regulations which require that ATCs ensure their own fitness for work and prohibit the performance of work by an ATC where even a minor ailment is likely to impair the ATC's efficiency. 23 Although, if the mounting list (to which I will shortly refer) of prior contraventions by Airservices of its consultation obligations continues to grow, a different conclusion may be warranted, I have not concluded that the contraventions in question occurred because of some general hostility by Airservices to comply with the consultation obligations imposed by the Enterprise Agreement. I am satisfied, including by reference to the evidence called by Airservices, that that was not the cause of the contraventions in question. That evidence included evidence that Airservices did consult with its employees in 2018 when the prospect of the SAFRA service being implemented was first raised by CASA: see [81] of the liability judgment. Furthermore, the evidence also demonstrated that after the implementation of the SAFRA service Airservices has engaged in various consultation with ATCs. 24 Whilst I am not satisfied that the failure to consult occurred by reason of some general hostility to consultation, I am satisfied that Airservices' failure to consult was caused, at least in part, by its failure to appreciate the importance of the consultation obligations imposed upon it and the importance of its compliance with those obligations. 25 As the liability judgment demonstrates, the contraventions of the FW Act occurred including because Airservices conducted itself in relation to the Safety Notice issued by CASA in such a way as to preclude the possibility of carrying out its obligations to consult in accordance with the Enterprise Agreement whilst at the same time meeting its obligation to provide at least 45 days' notice of a new published roster. That occurred including because Airservices was wrongly of the view that it would succeed in persuading CASA that the SAFRA service was unnecessary and that CASA should instead support Airservices' proposed "Airspace Management Program" as an alternative solution. Airservices should have recognised that there was a very significant risk that CASA would not agree to the proposed program, would not agree to further extensions to the required date for implementing the SAFRA service and would insist on the SAFRA service being implemented in accordance with (or closely in accordance with) previous deadlines set by CASA. 26 Airservices should have appreciated that if it failed to persuade CASA of its point of view, it risked putting itself in the position which ultimately it found itself in, of not having sufficient time to consult in accordance with the Enterprise Agreement in relation to the making of the SAFRA Implementation decision and in relation to the new rosters which that decision required be prepared and published. In my view, Airservices' conduct demonstrated that it was prepared to put at risk the benefit of consultation for its employees in order to pursue a commercial benefit for itself. Airservices' preparedness to put its capacity to meet its consultation obligations at risk is demonstrative of an indifference to those obligations, or in other words, a failure to properly appreciate the importance of the consultation obligations and the significant likely prejudice for affected employees should Airservices fail to comply with them. 27 Whilst the contraventions were not wilful they were, in my view, deliberate and brought about by an irresponsible attitude to compliance with the consultation obligations in the Enterprise Agreement. The contraventions were therefore serious. 28 In reaching that conclusion, I have taken into account the evidence of a senior manager called by Airservices, Mr Rodney Sciortino, who deposed that he understood and accepted the Court's liability judgment and that if faced again with the same or similar circumstances, Airservices would undertake the consultations required of it by the Enterprise Agreement. Although Mr Sciortino stated his belief that the consultation processes under the Enterprise Agreement "are valuable and required", I remain unpersuaded that Airservices fully appreciates the importance of the consultation provisions. It is of some concern that the evidence called by Airservices did not acknowledge what in my view was the source of its wrongdoing, namely Airservices' apparent indifference to the consultation obligations when pursuing its own commercial imperatives. Specific deterrence is warranted to ensure that Airservices properly understands the importance of complying with its consultation obligations. 29 The seriousness of the contraventions is also supported by the evidence before me of the impact that the contraventions had on affected ATCs despite the fact that ultimately the SAFRA service was not implemented. There was evidence from a number of employees and to some extent an acknowledgment from Airservices' management, of employees experiencing distress, annoyance, confusion, anger and resulting stress, as a result of the way in which Airservices went about trying to implement SAFRA particularly in the context of the impending Christmas holiday period. In large part, those consequences could have been avoided if the consultation required by the Enterprise Agreement had been provided.

The circumstances of the contravenor 30 The three circumstances personal to Airservices which point to the need for substantial penalties are Airservices' prior contraventions, the involvement of senior management in the contraventions and Airservices' size and capacity to pay in the context of the need to ensure that the penalties have a sting sufficient to meet the level of specific deterrence required. 31 In recent years, Airservices has failed to comply with consultation obligations required of it by enterprise agreements and thus contravened s 50 of the FW Act on three prior occasions. On one of those occasions it also relatedly contravened s 50 of the FW Act. Further, Airservices contravened an enterprise agreement in 2002. Dealing with those contraventions chronologically: (i) In 2002, Airservices contravened an enterprise agreement it was bound to observe by failing it to give effect to certain staffing principles. A penalty of $600 was imposed for a single contravention: see Civil Air Operations Officers' Association of Australia v Airservices Australia [2002] FCA 454; (ii) In December 2015, Airservices contravened s 50 of the FW Act by not complying with its consultation obligations under an enterprise agreement. The Court imposed a penalty of $12,000 on 20 September 2019, shortly prior to the contraventions in the present case occurring: see Civil Air Operations Officers' Association of Australia v Airservices Australia [2019] FCA 1542; (iii) In May 2018 and July 2018 (prior to the contravening conduct in this case), Airservices contravened s 50 of the FW Act twice. The first contravention involved a failure to consult as required by an enterprise agreement and the second was a related contravention for failing to maintain the status quo whilst a dispute as to the failure to consult was resolved. Penalties were initially fixed at $40,950 and $31,500 but were re-determined on appeal where a penalty of $12,600 was imposed for each contravention: see Civil Air Operations Officers' Association of Australia v Airservices Australia (No 2) [2021] FCA 993; Airservices Australia v Civil Air Operations Officers' Association of Australia [2022] FCAFC 172; and (iv) In March 2015, Airservices contravened s 50 of the FW Act by failing to consult in accordance with an enterprise agreement. A penalty of $12,750 was imposed by the Court. Both liability and penalty are currently the subject of an appeal. The penalty in question was imposed on 14 September 2022, after the contravening conduct in this case occurred, although at that time the proceeding had been on foot for almost four years: see Civil Air Operations Officers' Association of Australia v Airservices Australia [2021] FCA 1030; (2021) 309 IR 443; Civil Air Operations Officers' Association of Australia v Airservices Australia (No 2) [2022] FCA 1077. 32 I have taken into account that in assessing the weight to be given to prior offending, it is relevant to bear in mind the observations of King CJ in R v McInerney (1986) 42 SASR 111 at 113 that prior contraventions will be: more cogent if they have been the subject of conviction before the immediate offence. In such cases, the offender has committed the immediate offence notwithstanding the formal judgment and condemnation of the law in respect of the earlier offences and notwithstanding the warning as to the future which the conviction experience implies. 33 The contraventions did involve senior management of Airservices whom, I would infer, had ready access to specialist industrial relations and legal advice, in circumstances where Airservices had been given prior notice by Civil Air that it would contravene the consultation provisions of the Enterprise Agreement if it pursued the implementation of SAFRA in the way it did. 34 Airservices is a large statutory corporation. Since the advent of the COVID-19 pandemic it has experienced substantial declines in its revenue. However, Airservices has been the beneficiary of off-setting government grants and, I would infer, it is likely that its revenue has or is returning to more normal levels as aircraft arrivals and departures return to their normal levels. I do not regard Airservices as a corporation which has any relevant incapacity to pay substantial penalties and, given its size and resources, the penalties imposed should provide the sting necessary to address the deterrence which is required. 35 Airservices has demonstrated contrition and that has moderated the penalties which I would otherwise have imposed. Further, there is some evidence of a more attentive attitude to consultation, including in the aftermath of the withdrawal of the Published Roster. However, no evidence was called of any education programs, disciplinary or other corrective measures taken since Airservices acknowledged the contraventions. 36 Airservices contended that specific deterrence was unnecessary because the contraventions arose in what it described as "exceptional or unusual circumstances". I disagree. A situation in which commercial imperatives come into potential conflict with consultation obligations is not unusual. The potential for Airservices to ignore its consultation obligations when it is commercially inconvenient to comply, in my view, remains sufficiently real to warrant the imposition of substantial penalties.

General deterrence 37 The need for general deterrence is also relevant to my assessment of the appropriate penalties to be imposed. As I stated at [21] above, the rights or entitlements to consultation provided by the Enterprise Agreement are important. Airservices submitted that the "exceptional and peculiar circumstances that gave rise to the contraventions…mean that they are not an appropriate vehicle for general deterrence". As I have stated at [36] in relation to specific deterrence, I disagree with this submission. There is real potential for other employers the subject of consultation obligations under enterprise agreements to ignore these obligations when it is commercially inconvenient for them. With this in mind, I accept Civil Air's submission that the penalty should be sufficiently high to deter other employers from similar contravening conduct.

Conclusion 38 Taking all of those matters into account, including the substantial concern raised by the repeated occasions upon which Airservices has contravened its consultation obligations, I have determined that in the absence of the application of the totality principle, a penalty of $45,000 is appropriate for each contravention of s 50. However, taking into account the entirety of the contravening conduct including the significant connections between its two elements, the aggregate penalty should be reduced by $20,000. 39 Accordingly, I will make orders imposing a penalty of $35,000 for each of the two contraventions of s 50 of the FW Act. 40 Civil Air contended that there is no reason to depart from the "usual order" (Sayed v Construction, Forestry, Mining and Energy Union (2016) 239 FCR 336 at [116]-[121], Tracey, Barker and Katzmann JJ) that, where sought, any pecuniary penalty imposed should be paid to the applicant. Airservices did not contend to the contrary. I accept that the penalties imposed should be paid to Civil Air. 41 Given the operation of s 570 of the FW Act, there should be no order as to costs. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Bromberg.

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