Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia v Austal Ships Pty Ltd

AND THE COURT ORDERS: 8. The first cross-respondent pay penalties of $80,000 in respect of the contraventions declared in orders 1 to 7 above. 9. The penalties referred to in order 8 above be paid to the cross-applicant within 28 days. 10. The cross-application be otherwise dismissed. 11. No order as to costs. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

COLVIN J: 1 On each of three days over a week and a half in 2021 an employed official of the Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia who held the relevant permit sought to gain entry to premises occupied by Austal Ships Pty Ltd. On the first two of the days, entry was sought to premises in Henderson in Western Australia. On the third of the days, entry was sought to premises in Naval Base, Western Australia. On each occasion, entry was sought so that the official might meet with employees of Austal to persuade those who he met to sign a petition in support of the making of a bargaining order by the Fair Work Commission and to obtain signatures on the petition from those who were willing to provide them, amongst other things. On each occasion entry was refused by a senior employee of Austal. 2 Relevantly for present purposes, a permit holder may enter premises for the purposes of holding discussions with one or more employees who work at the premises, whose interests the permit holder's organisation is entitled to represent and who wish to participate in the discussions: see s 484 of the Fair Work Act 2009 (Cth). 3 The Fair Work Act provides that a person must not refuse entry onto premises by a permit holder who is entitled to enter: s 501. It also provides that a person must not hinder or obstruct a permit holder exercising those (and other) rights, including by conduct that occurs after notice of entry is given but before the permit holder enters the premises: s 502. 4 The Court has jurisdiction to impose a pecuniary penalty of up to $66,600 for each contravention of those provisions. 5 The Union claimed that Austal had contravened s 501 and s 502 by its conduct in relation to the entry sought by the official. It is established practice for signatures on a petition to be used to support an application to the Commission for the making of a bargaining order. It was not in dispute that an official of a union with coverage who was a holder of the relevant permit was entitled to enter upon a site for the purpose of discussing with employees whether they were willing to sign the petition and seeking their support. Ultimately, the central issue between the parties concerned whether the permitted purposes extended to obtaining signatures on the petition. 6 After a final hearing on issues other than penalty, I found that entry for the purposes of obtaining signatures on petitions was not entry for the purposes of holding discussions and, for that reason, there had been no contravention of s 501 or s 502 when the official was refused entry: Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia v Austal Ships Pty Ltd [2022] FCA 1462. I reasoned that entry for the purpose of securing and recording a pledge or commitment that will have future operative effect in order to support some future action went beyond what was encompassed by the statutory language of 'holding discussions': at [36]-[45]. On appeal, that conclusion was found to be in error and it was held that entry for the purposes of obtaining signatures on a petition to be used to support the making of a bargaining order under s 230 of the Fair Work Act was entry for the purposes of holding discussions: Communications Electrical Electronic Energy Information Postal Plumbing and Allied Services Union of Australia v Austal Ships Pty Ltd [2023] FCAFC 180; (2023) 300 FCR 396 at [41], see also [8], [31]-[40] (Bromberg, Rangiah and Snaden JJ). 7 Consistently with the reasoning of the Full Court, the parties jointly proposed the making of declaratory orders as to seven contraventions by Austal based upon agreed facts as to what occurred when entry was refused. They also proposed the making of an order requiring Austal to pay pecuniary penalties of $80,000 with those penalties to be paid to the Union. They otherwise proposed that the proceedings be dismissed with no order as to costs. 8 I made the orders sought and indicated that I would provide my reasons for doing so. These are my reasons.

Joint submissions 9 I had the benefit of joint written submissions prepared by the parties. As I substantially accepted the matters advanced by the parties in support of the making of the orders, I am able to express my reasons briefly.

Declarations 10 I was satisfied, for the reasons advanced by the parties, and in the circumstances I have outlined, that it was appropriate to make declarations in the terms proposed.

Penalties 11 As there was an agreed penalty, the question for determination was whether the agreed figure was within the range of possible appropriate penalties for the conduct: Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate [2015] HCA 46; (2015) 258 CLR 482. I summarised the principles in Australian Energy Regulator v EnergyAustralia Pty Ltd [2022] FCA 644 at [4]-[10]. 12 Determining an appropriate penalty involves an instinctive synthesis of relevant factors: Markarian v The Queen [2005] HCA 25; (2005) 228 CLR 357. The purpose of a civil penalty of the kind sought to be imposed in a case like the present is primarily, if not solely, the promotion of the public interest in compliance with the provisions of the legislation by deterrence of further contraventions: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; (2022) 274 CLR 450 at [15]-[16]. Both general and specific deterrence must be considered. 13 In the present case, the conduct of Austal reflected a reasonable but erroneous view of what the law required. This is not a case where there is any suggestion that Austal took a risk that the conduct might involve a contravention. Nor is it suggested that any evaluation of that kind was undertaken (whether informed by legal advice or otherwise). Rather, reliance was placed upon a submission to the effect that there was no real concern as to specific deterrence now the legal position was known with certainty. 14 In such cases, the proper approach to assessing penalty was described in the following way by Allsop CJ, Davies and Wigney JJ in Flight Centre Limited v Australian Competition and Consumer Commission (No 2) [2018] FCAFC 53; (2018) 260 FCR 68 at [64] (after emphasising that there is no inflexible rule as to the relevance of advice taken or views formed as to whether conduct was lawful): Usually a belief in the innocence of conduct that is a contravention of the statute is not an ameliorating factor. Nevertheless the object of the imposition of a penalty is substantially deterrence - specific and general. It is relevant to know that the conduct was done believing it to be innocent and knowing that the party, now disabused of its belief, will not, or is likely not to, reoffend. Specific deterrence in such circumstances is of less significance. 15 In the present case, the submission advanced was to the effect that the Court may consider it unlikely that Austal would engage in the same contravening conduct now being aware of the true reality of the issue. Having regard to the circumstances of the present case, I concluded that it is unlikely that Austal would engage in the same conduct given the decision of the Full Court and its approach to the issue in the conduct of the proceedings. This is not a case where the quality of the conduct suggests that Austal is willing to proceed despite a risk that the conduct may contravene. Rather, it acted upon a view of what was required that was reasonable at the time. 16 In consequence, this is not a case where the commercial size of the contravener weighs significantly in the required synthesis. That is because this is not an instance where there is any concern that there may be some form of economic calculation about the risk of the conduct being a contravention or of the likelihood of the conduct being uncovered by the regulator. 17 The parties agree that the conduct of Austal on the three days amounts to seven contraventions. Whether the view is taken that there was a single course of conduct over the period or that the conduct on each day was a separate course of conduct for the purposes of assessing penalty or that there were two courses of conduct in relation to each of the two separate premises, the admitted facts establish consistent and repeated refusals of entry, albeit over a relatively confined period of time where entry was sought for the same purpose. 18 Further, it is necessary to ensure that the total penalty does not exceed that which is appropriate for the entire contravening conduct. 19 It was relevant that Austal made admissions in its defence, had agreed facts and joined in submissions as to penalty. In effect it had confined its substantive defence to legal questions that were reasonably open. It was also relevant that Austal had not previously contravened the Fair Work Act. 20 However, there remained the significant matter of general deterrence. In that regard, s 501 and s 502 provide very significant protections for the lawful rights of access conferred by the Fair Work Act. Although, in the present case, the consequences of the conduct did not manifest in loss or damage that was readily quantifiable, there were material consequences. The interests of the Union and its members are advanced by the activities of officials. In the present case, the refusal of entry meant that the efforts of the official were frustrated and, it may be inferred, other steps were required with the likely consequence that efforts to pursue bargaining for improved conditions were delayed. 21 Bringing all these matters together I was satisfied that the proposed penalties in the aggregate amount of $80,000 were within the range of appropriate penalties.

Payment of the penalties to the Union 22 It is well established that the power conferred by s 546(3) of the Fair Work Act concerning where to direct the payment of the penalty is ordinarily to be exercised by ordering the payment of the penalty to the party who brought the proceeding that has given rise to that determination: Sayed v Construction, Forestry, Mining and Energy Union [2016] FCAFC 4; (2016) 239 FCR 336 at [96]-[101] (Tracey, Barker and Katzmann JJ); and Construction, Forestry, Maritime, Mining and Energy Union v Fair Work Ombudsman (The Botany Cranes Case) [2023] FCAFC 40; (2023) 297 FCR 438 at [235]-[239] (Bromberg, Moshinsky and Bromwich JJ). The claim in the present case was brought by the Union. There was no indication in the facts agreed or the submissions advanced of any reason why there should be any departure from this usual approach. I was satisfied that the order proposed for the payment of the penalties to the Union was appropriate.

Costs order 23 The parties were agreed that there should be no order as to costs and based upon that agreement I made the order as proposed. I certify that the preceding twenty-three (23) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Colvin.