Construction, Forestry and Maritime Employees Union v Fair Work Ombudsman

THE COURT: 1 For the reasons published on 29 January 2024, we ordered that the appeal in this matter be allowed in part, that the declarations made in the Federal Circuit and Family Court of Australia (Division 2) (FCFCOA) be varied in one respect by deleting therefrom that the second appellant, Mr Rielly, contravened s 500 of the Fair Work Act 2009 (Cth) (FW Act) on 1 July 2021 when, on entering a worksite known as the Brisbane Cross River Rail Construction Project, he failed to comply with a relevant visitor conduct entry requirement to be accompanied by an escort from the site occupier: Construction, Forestry, Maritime, Mining and Energy Union v Fair Work Ombudsman (Cross River Rail Appeal) [2024] FCAFC 1. In these reasons, each reference to a statutory provision is to the FW Act unless otherwise stated. 2 We otherwise dismissed the appeal. However, the appellants' limited success necessarily resulted in a consequential order that the penalty orders made in the FCFCOA on 29 June 2023 were set aside: Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union (No 2) [2023] FedCFamC2G 564 (PJ). The agreed position before us was, in the event that not all findings of the primary judge were upheld, we should redetermine the penalties following the receipt of supplementary written submissions. Those submissions have been received and considered. 3 We do not repeat in detail the relevant background, the evidence before or the findings that were made by the primary judge as set out in our reasons. What follows should be read with those reasons. It is sufficient to state that Mr Rielly was employed as a State Organiser by the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU), as it was then known, who exercised a right of entry to the worksite as a permit holder within the meaning of ss 497 and 500. In doing so he failed to comply with reasonable requests made by representatives of the occupier to comply with Occupational Health & Safety Requirements that applied to the worksite when he failed to sign the visitor register and to complete a visitor induction, entered an area known as the tower crane pad and refused to leave it when requested to do so, failed to read and obey all safety signs at the worksite, entered a restricted area without permission and, having done so, refused to leave upon request each contrary to s 499. Mr Rielly also contravened s 500 by acting in an improper manner while exercising his right of entry by failing to sign the visitor register and complete a visitor induction, by failing to read and obey all safety signs on the worksite and by entering areas of the worksite to which access was restricted. Pecuniary penalties cannot be imposed for the same conduct (s 556) and the respondent has elected to seek penalties only for the contraventions of s 499. The Construction, Forestry and Maritime Employees Union (CFMEU), as it is now known, is liable for the imposition of pecuniary penalties by operation of s 550(2)(c) and 793. 4 The primary judge ordered those penalties be paid in the amounts of $5,500 by Mr Rielly and $37,500 by the CFMMEU. Each penalty was imposed implicitly on the assumption that Mr Rielly engaged in a single contravention (his conduct prior to entering the worksite and thereafter within it). It would not appear that submissions were put to the primary judge on that question. Although the course of conduct provision at s 557 was not engaged (ss 499 and 500 are not listed as relevant civil remedy provisions at s 557(2)) his Honour's attention was not drawn to multiple relevant decisions of this Court where it had been held that s 557 does not cover the field and the common law single course of conduct principle may be applied, for example: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2017] FCAFC 53; 249 FCR 458 and Construction, Forestry, Mining, Maritime and Energy Union v Australian Building and Construction Commissioner (The Broadway on Ann Case) [2018] FCAFC 126; 265 FCR 208. As we explain, the Broadway on Ann Case is factually analogous to the present. 5 The maximum penalty for the contravention of s 499 by Mr Rielly at the time was $13,320 and $66,600 for the CFMMEU as the prescribed penalty unit was $222 as at 1 July 2021: ss 539 and 546 (2) when read with s 4AA of the Crimes Act 1914 (Cth). 6 The respondent submits that the appropriate penalty "approaching the maximum" should be imposed on the CFMEU and one within a range of $6,000-$7,560 on Mr Rielly. In contrast, the appellants submit that the appropriate penalty for the CFMEU is one within the range of $27,500-$32,500 and for Mr Rielly less than $3,150. 7 Section 546 permits the imposition of pecuniary penalties for contravention of a civil penalty provision in an amount that this Court considers appropriate. The principles are well-understood. The quantum must reflect an assessment amounting to "no more than might be considered to be reasonably necessary to deter further contraventions of a like kind" by the respondents or others: Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 274 CLR 450 at [9] (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ). The primary purpose is to achieve deterrence, both specific and general: Pattinson at [15]. 8 The respondent submits that Mr Rielly's conduct was objectively serious and deliberate, that he repeatedly ignored requests that were made of him, treated such requests with disdain and engaged in obstructionist behaviour. The primary judge in his liability reasons relevantly found that Mr Rielly was given ample opportunity to comply with the visitor entry requirements, was directed to comply with those requirements "but steadfastly refused to do so" and further that "even if he had been given the opportunity to orally undertake the visitor entry requirements, he would have been unlikely to have agreed. Requests and requirements given to him were treated with disdain and ignored": Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union [2022] FedCFamC2G 101 (LJ) at [27]. The primary judge further found that Mr Rielly manifested an intent "to be obstructionist and non-compliant from the outset": LJ [28]. 9 As to Mr Rielly's conduct upon entering the worksite, the primary judge relevantly found at PJ [35] that: [T]he only likely way that Mr Rielly would have been effectively discouraged from entering upon the site, or otherwise going where he wanted to when he had entered upon the site, would have been for him to have been physically restrained. Employees in the position of those present on the day shouldn't be put in that position of possible physical harm to themselves when they have already given reasonable instructions relating to visitor entry requirements, and had made other requests, for Mr Rielly to leave the site once he had entered upon it. 10 The primary judge was satisfied that Mr Rielly would not have been unduly delayed or frustrated in exercising his right of entry by compliance with the requests made of him: PJ [37]. 11 None of those findings was disturbed on appeal. 12 Overall, the respondent submits that a right of entry to private premises is a serious encroachment upon private rights (Darlaston v Parker [2010] FCA 771; 189 FCR 1 at [44] (Flick J)) and compliance with legislative requirements which permit entry is an important consideration in the assessment of a penalty that is appropriately deterrent in effect. 13 Mr Rielly ceased to be a permit holder pursuant to s 512 on 2 September 2022, when his application for a new permit was refused by the Fair Work Commission. Mr Rielly ceased employment with the CFMMEU on 6 September 2022 and thereafter commenced employment with the Construction, Forestry, Mining and Energy Industrial Union of Employees Queensland, which is a registered organisation pursuant to the Industrial Relations Act 2016 (Qld). It is not registered pursuant to the FW Act. Mr Rielly has been ordered to pay pecuniary penalties in two other cases by the FCFCOA as well as one case by this Court, but in each case the penalties were not imposed until after the events in this proceeding: Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (Pacific Highway Upgrade Case) (No 4) [2022] FedCFamC2G 608; Australian Building And Construction Commissioner v Rielly (No 3) [2022] FedCFamC2G 1 and Fair Work Ombudsman v Rielly [2023] FCA 1144. 14 As to the CFMEU, the respondent draws attention to its well-documented history of non-compliance with industrial laws and has provided a comprehensive list of agreed or determined penalties imposed upon it, or its representatives, for conduct between January 1999 and May 2022, by reference to individual cases, by jurisdiction and with a summary of the nature of the conduct and the penalties ultimately imposed either by admission or finding. In all, within that period there were 207 reported penalty cases involving the CFMEU. 15 The appellants make a number of submissions, commencing with the proposition that the need for general and specific deterrence is "diminished" because Mr Rielly no longer holds an entry permit, he is no longer employed by the CFMEU and Mr Brian Lacy AO was engaged by the CFMEU in September 2022 to provide training to its officials relating to the exercise of rights of entry to workplaces. That task was completed by delivery of a report on 15 September 2022. In broad terms, the appellants submit that the contravening conduct was not coercive and nor did it display disregard for safety obligations at the worksite or endanger other persons. Mr Rielly's conduct is categorised as "limited and relatively benign", was not rude, threatening, or aggressive and that we should find that his conduct was no more than an "over-enthusiastic approach to the exercise of his right of entry on the relevant day". They submit that there is no evidence of loss or damage having been caused to the worksite occupier, senior management of the CFMEU were not involved in the contraventions, Mr Rielly's conduct was not deliberate, there is evidence of contrition being the engagement of Mr Lacy (which is also submitted as amounting to the taking of corrective action by the CFMEU) and that, despite that the appellants did not cooperate in the investigation and legal proceeding, there is no need for specific deterrence in this case. 16 There are two threshold issues that arise. 17 The first concerns the relevance of the penalties imposed by the primary judge. The appellants submit that, although those penalties are "strictly irrelevant" to the exercise of the discretion of this Court, the respondent did not by a notice of cross-appeal contend that the primary judge's discretion miscarried, which then caused him to impose inadequate penalties. In that circumstance the appellants contend that it would be unjust to impose greater penalties. The point was not further developed. Had the appellants received timely notice that the respondent intended to submit that this Court should impose greater pecuniary penalties in the event of partial success on the appeal, it is possible that the appeal may have been differently prosecuted. On one view the imposition of greater penalties upon a partially successful appellant when the discretion falls to be re-exercised might be thought to be an unfair outcome. On another, the inherent risk of only partial success on the appeal with the consequential imposition of greater penalties by this Court was a foreseeable outcome. 18 Be that as it may, s 546 of the FW Act requires this Court to impose penalties that are appropriate when satisfied that a person has contravened a civil remedy provision. It is not open to ameliorate any unfairness of which the appellants complain by failing to comply with the statutory requirement. The question is now what this Court determines is the appropriate penalty for the contravening conduct of Mr Rielly. 19 The other concerns Mr Rielly's course of conduct. Initially, the parties' penalty submissions did not distinguish between Mr Rielly's conduct before he entered the worksite and what he did after doing so. Implicitly each assumed that there was one course of conduct. We invited the parties to provide supplementary submissions on this question and drew attention to The Broadway on Ann Case. The respondent submits that in the proceeding before the primary judge and in its penalty submission to the Court it proceeded on the basis that there is only one course of conduct that Mr Rielly engaged in and as a matter of fairness to the appellants it does not now depart from that position. 20 The appellants submit that, in a case of multiple contraventions, the course of conduct principle, together with the totality principle, should each be deployed as an analytical tool to ensure that the overall penalty is not "greater than necessary to achieve the object of deterrence": Construction, Forestry, Maritime, Mining and Energy Union v Richard Crookes Constructions Pty Ltd [2022] FCA 992 at [165] (Wigney J). 21 The concern of the course of conduct principle, as explained by Bromwich J in The Broadway on Ann Case, is to "ensure that the contravener is not penalised twice for what is essentially the same wrongdoing": [145]. His Honour dissented in the result on this question, but not as a matter of principle. Although in this case the contraventions occurred on the same day, by the same person and at the same worksite, the issue is whether there is a qualitative difference between Mr Rielly's disregard of the visitor entry requirements, before he set foot on the worksite, and the visitor conduct requirements which applied thereafter. This requires close attention to the facts. 22 At approximately 2.30 pm on 1 July 2021, Mr Rielly spoke with representatives of the site occupier and produced his written notice of entry and entry permit. That documentation was in order. He was then requested to "please head over to the Lot 1 compound" so that he could be signed in as a visitor and undertake the visitor induction process. Mr Rielly refused, responding: "I don't need to do that, I want to go on to site". Further requests were made of him to complete the visitor entry requirements. Once again, Mr Rielly ignored the requests and walked around the individuals and towards the gate at the main entrance of the worksite. A traffic controller at the gate remonstrated with Mr Rielly that as a visitor he was required to report to the site office. A representative of the occupier distinctly told him not to enter the site. Mr Rielly simply proceeded through the gate and commenced walking around the worksite. 23 Having entered the worksite in breach of the visitor entry requirements, Mr Rielly walked up a set of scaffold stairs and onto a tower crane pad. He did so despite being told not to proceed to that location, to "come back down, you're not authorised to go up there". Mr Rielly did not respond. There were further requests that he should leave the tower crane pad, each of which was ignored. 24 Eventually Mr Rielly left the tower crane pad, at a time of his choosing, and then walked towards a restricted area at the southern end of the site, designated for excavation works. For good reason that area was restricted for access because heavy plant and equipment was being used, a self-evident risk to individuals. The restricted area was clearly delineated by separate fencing and signage. Once again, Mr Rielly ignored relevant questions put to him about his lawful authority to enter the restricted area pursuant to his s 117 notice. On at least three occasions whilst in the restricted area, a clear instruction was given to Mr Rielly that he must leave. Undeterred, Mr Rielly considered it appropriate to wander about the restricted area including walking into the swinging radius of an excavator (albeit not in operation at the time). For an individual ostensibly concerned with occupational health and safety at the worksite, that conduct was extraordinary and ultimately unexplained by Mr Rielly in that he chose not to give evidence in the proceeding. 25 At approximately 3.10 pm, having been spoken to by the site safety lead, Mr Rielly left the restricted area and then the worksite. In all, Mr Rielly ignored the visitor entry and visitor conduct requirements for approximately 40 minutes. 26 The appellants further submit that we should conclude that there was a single course of conduct by Mr Rielly commencing with entry to the worksite and concluding with his voluntary exit approximately 40 minutes later. It is emphasised that: [T]he found contraventions did not crystallise until Mr Rielly entered the worksite having not complied with the visitor entry requirements. A characterisation of his actions as involving two courses of conduct, viz, a pre-entry course of conduct and a post-entry course of conduct, is therefore submitted to be an inapposite dichotomy. That is because, in light of the found contraventions and the circumstances of this case, there was no pre-entry conduct that resulted in a contravention. (Original emphasis.) 27 There is force in that submission, despite the fact that the visitor entry and visitor conduct requirements serve different purposes, and in this case imposed separate obligations upon Mr Rielly in the exercise of his rights as a permit holder to obey any reasonable request by the occupier to comply with an occupational health and safety requirements applicable to the worksite. 28 A question of procedure also arises. The respondent did not frame a case before the primary judge as one of multiple contraventions of s 499 and does not depart from that position in this Court. 29 Accordingly, we have determined that pecuniary penalties should be imposed upon Mr Rielly for a single course of conduct as appropriate to achieve the twin deterrence objectives. 30 We deal next with the respondent's submission that Mr Rielly's conduct was objectively serious and deliberate. 31 The appellants' re-characterisation of Mr Rielly's conduct as anodyne is inconsistent with the findings made by the primary judge which must now be taken as our findings to the extent that the appeal grounds failed: see generally the discussion in Bankstown Football Club Ltd v CIC Insurance Ltd (1998) 10 ANZ Insurance Cases 61-406 at 74,458-74,459 (Giles J). His conduct (summarised above and addressed in our primary reasons at [21]-[23], [41]-[44] and [46]-[52]) was deliberate and defiant. The contravening course of conduct commenced the moment he presented himself to employees of the occupier at the boundary of the worksite. A permit holder must be taken to be aware, and Mr Rielly must have been aware, that a building worksite poses dangers to employees and contractors of the occupier, that various workplace health and safety laws apply and that it is the primary responsibility of the occupier to implement practices, procedures and requirements designed to ensure that the workplace is safe. The visitor entry and visitor conduct requirements were uncomplicated, easily complied with and clearly communicated to him. Objectively, Mr Rielly's behaviour leads us to conclude that he did not consider that he was bound to comply with those requirements for undisclosed reasons at best or, at worst, was fully cognisant of the requirement to comply and chose to ignore them in an act of open defiance. 32 In the result of the appeal, the appellants enjoyed partial success in establishing that the respondent had failed to make good the contention that, having entered the worksite, Mr Rielly had not been accompanied by one or more employees of the occupier. On that score, the appellants submit that the contravention findings are now "objectively less serious". We do not agree. As correctly submitted for the respondent, the overall seriousness of the contraventions, once Mr Rielly had entered the worksite, is not materially reduced by the appellants' success on this point. At best, it has a minor impact in considering Mr Rielly's course of conduct within the worksite. It does not detract from his intransigence and open defiance of the reasonable requirements that were made of him. 33 That Mr Rielly is no longer employed by the CFMEU and is not a permit holder is relevant to specific deterrence, however, as correctly submitted by the respondent, balanced against those factors is the likelihood that Mr Rielly may once again become a permit holder and indeed at some time may be re-employed by the CFMEU. As an employee of the Queensland registered organisation, he is still involved in industrial relations. No evidence has been adduced as to whether his current employment requires him to perform duties that differ from his previous employment with the CFMEU. There is still a need for specific deterrence to discourage Mr Rielly from engaging in the same, or similar, conduct in the future. 34 For permit holders generally, it is obvious that an appropriate pecuniary penalty must be imposed to deter others from engaging in conduct in defiance of reasonable Occupational Health & Safety requirements that apply to worksites. 35 Taking into account the entirety of the conduct of Mr Rielly as set out in our primary reasons, that one aspect of the contraventions was not upheld on appeal, and considered together with the matters above, we consider that the appropriate pecuniary penalty that must be imposed upon Mr Rielly for his contravening conduct is $6,300 being an amount that is no more than reasonably necessary to deter the prospect of future conduct of a similar character by him and to deter others in like circumstances. 36 Next considering the CFMEU, there is little that can be said in its favour. The imposition of many pecuniary penalties since January 1999 has clearly not had the desired effect of deterring it from engaging in conduct in contravention of various provisions of the FW Act. The CFMEU has an extensive record of failing to comply with various provisions of the FW Act which, in some cases and under different provisions, has attracted very severe civil penalties. Justice Tracey in the Broadway on Ann Case chronicled several of his judgments (at [17]-[22]) delivered between 2015 and 2017 where he recounted the recidivist conduct of the CFMEU and his concern about "ongoing misconduct" despite the imposition of civil penalties, particularly by the holders of entry permits. At [23], his Honour observed, in terms we respectfully endorse, that: The contravening conduct has continued unabated to a point where there is an irresistible inference that the CFMEU has determined that its officials will not comply with the requirements of the FW Act with which it disagrees. If this results in civil penalties being imposed they will be paid and treated as a cost of the union pursuing its industrial ends. The union simply regards itself as free to disobey the law. 37 In this case, as we have noted, some evidence was adduced before the primary judge of educative steps taken by the CFMEU, after the events in this case, to provide training to officials who were permit holders about the right to enter workplaces, the limitations thereon and what is improper conduct contrary to s 500. There was in evidence an affidavit made by Mr Lacy in April 2023 of his engagement by the CFMMEU in September 2022 to provide training to CFMMEU Queensland and Northern Territory Branch officials and then to prepare and deliver a report. Each task was completed by mid-September 2022. In the executive summary to the report, Mr Lacy notes that the officials who attended participated "positively in the training" and responded well to instructions "albeit with some reservation about a perceived lack of balance in the statutory regulation of the conduct and activity of the industrial parties on construction sites". In situational exercises, the attendees correctly identified potential contraventions. Mr Lacy expressed the opinion that the attendees "know and understand their rights as permit holders under s 118 when exercising a s 117 right of entry to investigate suspected contraventions and their obligation to not act in an improper manner." 38 No evidence was adduced as to whether this training was in fact subsequently effective. No explanation was given as to why this training was undertaken in September 2022 for Queensland permit holders when it is a necessary condition for the issue of an entry permit that the Fair Work Commission must be satisfied that the official is a fit and proper person by taking into account, inter alia, whether the official has received "appropriate training about the rights and responsibilities of a permit holder": s 513(1)(a). 39 The clear inference which is open, and which we draw, is that the CFMEU defiantly considers that pecuniary penalties are simply a cost of undertaking its industrial activities. The evidence that since the events in this case educative steps have been taken to appraise Queensland officials who are entry permit holders of their rights and responsibilities, balanced against the long history of contraventions by officials of the CFMEU, is not a significant ameliorating factor. The primary consideration in our view is that the CFMEU has an extensive history of failures to comply with the requirements of the FW Act, did not cooperate in the investigation of this matter, did not at an early stage accept that the conduct of Mr Rielly was contrary to the FW Act and is vicariously liable for his steadfast refusals, as found by the primary judge, to comply with his legal obligations as a permit holder in the exercise of his right of entry to the worksite. 40 In our view the appropriate penalty to impose upon the CFMEU is $60,000. 41 We order as follows:

1. Pursuant to s 546 of the Fair Work Act 2009: (a) The Construction, Forestry and Maritime Employees Union must pay a pecuniary penalty in the amount of $60,000 to the Commonwealth of Australia; (b) Mr Dean Lesley Rielly must pay a pecuniary penalty in the amount of $6,300 to the Commonwealth of Australia.
2. Each pecuniary penalty must be paid within 14 days of the making of these orders. I certify that the preceding forty-one (41) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Halley, Goodman and McElwaine.