consideration
19 Beginning with the Liability Judgment, I relevantly there observed as follows:
67. Further, and notwithstanding the submissions of HPS, I am unable to identify how it could possibly be argued that 455 hours of overtime, which is more than 4 times the benchmark of 104 hours agreed by the parties to the 2013 Enterprise Agreement as "generally reasonable", can be "reasonable" - or even "generally" reasonable - when measured against that agreed benchmark. HPS criticised the union's reliance on the terms of the 2013 Enterprise Agreement, and in particular the union's reliance on the definition of "reasonable overtime". In my view however the position of the union was justified, both from the perspective of language used in that Agreement, and the plain fact that the terms of the 2013 Enterprise Agreement reflected the intentions of the parties against the backdrop of negotiations between them.
68. The union submitted that 455 overtime hours per annum equated to 435% of the 104 hours "reasonable overtime" benchmark as defined in cl 5 of the 2013 Enterprise Agreement. HPS submitted that employees were entitled by the 2013 Enterprise Agreement to 6 weeks annual leave, which meant that the required overtime of such employees who took the whole 6 weeks leave would be only 402.5 hours of overtime for that year (rather than 455 hours of overtime per annum). However even assuming that this was the case, the outcome of the new work roster would still have been an increase in required overtime hours of such employees in the range of 387% compared with the 104 hours of overtime stipulated in the 2013 Enterprise Agreement.
69. Even more telling is the fact that the outcome of the new work roster requiring employees to work 455 hours of overtime per annum was that employees were required to work an average extra 8.75 hours per week overtime, on top of their ordinary 35 hours per week. That equated to an additional 25% of their ordinary working hours, which hours they were required to work, and which was not voluntary overtime.
20 It follows that the overtime imposed by the new work roster, on all relevant employees, was manifestly in excess of that which was reasonable in terms of that which had been agreed in cl 34.1 of the 2013 Enterprise Agreement. Whether prior to the new roster most production workers performed more than 104 hours of overtime annually was not to the point - the new roster required them to work significantly more than 104 hours of overtime, whether they wished to or not. It is not in dispute that, until the implementation of the new roster, working overtime was voluntary.
21 I reject the argument of the respondent that the new roster was more equitable for employees. It was not more equitable for those employees who had previously had a choice of working overtime, and chose not to do so. In any event, the hours the new roster imposed were far outside the scope of what the parties had agreed were reasonable within the scope of the 2013 Enterprise Agreement. In my view this was a serious contravention of the 2013 Enterprise Agreement within the meaning of s 50 of the FW Act.
22 To the extent that the new roster applied to all crews working over four shifts at the Hay Point Coal Terminal, it is plain that the imposition of the new roster involved senior management in the respondent rather than low level managers. Evidence supporting this finding includes the email to all staff and employees at the Hay Point Coal Terminal dated 10 May 2016 from Mr Peter Hanrahan, the General Manager - Hay Point, notifying them inter alia that:
After careful consideration, it has been decided that BMA will be implementing roster changes and new automation initiatives at Hay Point Coal Terminal.
…
BMA has decided to make two changes to achieve improved productivity and cost efficiencies at the port:
1. changing from a five panel to a four panel roster …
23 Further, it is plain that the respondent is part of a large multi-national conglomerate. As deposed by Mr David Power on behalf of the respondent in his affidavit filed on 24 February 2017:
2. HPCT is a coal export terminal located at the Port of Hay Point, approximately 40 kilometres south of Mackay. HPCT is owned and operated by BM Alliance Coal Operations Pty Ltd (BMA). Hay Point Services Pty Ltd (HPS) (a related entity of BMA) currently employs approximately 170 employees who perform one of two broad categories of work being production or maintenance work at HPCT. BMA and HPS are part of the BHP Billiton Group.
(Emphasis in original)
24 While the conduct of the respondent in seeking to impose the new roster was deliberate, a question arises whether the contravention of the 2013 Enterprise Agreement within the meaning of s 50 of the FW Act was deliberate. This is because:
the respondent clearly had a basis for arguing (at least initially) that cl 34.1 of the 2013 Enterprise Agreement was not a provision able to be contravened for the purposes of founding a breach of s 50 of the FW Act: Construction, Forestry, Mining and Energy Union v Hay Point Services [2018] FCA 417; and
the respondent cogently, although unsuccessfully, argued that the overtime hours imposed by the new roster were reasonable.
25 That this was the case is relevant to the issue of general deterrence, to the extent that the position argued by the respondent was open on the material before the Court: cf Gray J in Australian & International Pilots Association v Qantas Airways Limited [2009] FCA 500 at [9]-[10]. As Gordon J observed in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Telstra Corporation Ltd (2007) 168 IR 368; [2007] FCA 1607:
18 As the Primary Reasons demonstrate, the breaches arose out of a disputed and disputable construction of the 2005 Enterprise Agreement and the TRA. Neither breach was flagrant, wilful or deliberate. Amendments to the WR Act increasing the penalty for breaches of industrial instruments arising out of unlawful industrial conduct indicate a legislative desire to deter and discourage such conduct. These changes in industrial law have led to general deterrence being referred to as the "most significant factor" in determining the applicable penalty: see Finance Sector Union v Commonwealth Bank of Australia [2005] FCA 1847; (2005) 224 ALR 467 at [60], [72]. Where the unlawful conduct arises out of an arguable but erroneous construction of a relevant term, and the subsequent breach cannot be characterised as demonstrating a flagrant or wilful disregard for the agreement, this legislative purpose is not furthered by imposition of a penalty. In these circumstances, neither general nor specific deterrence is a significant factor weighing in favour of imposing a penalty. Moreover, Mr McDonald has been fully compensated for the loss suffered as a result of the breach. I do not consider that the circumstances in which the conduct took place warrant the Court exercising its discretion to impose a penalty on Telstra.
(Emphasis added)
26 Having found this, however, I note that there was no dispute between the parties that the applicant, through its solicitors, wrote to the proper officer of the respondent on 23 May 2016, placing the respondent on notice that the applicant considered that new roster contravened cl 34.1 of the 2013 Enterprise Agreement and s 50 of the FW Act (see affidavit of Mr Luke Tiley filed 28 February 2020 exhibit LMT-1). Indeed, ultimately the applicant was successful on the basis of its contentions in that letter.
27 As the applicant submitted, and I accept, there can be no doubt that the applicant took the point that the new roster was not permitted by cl 34.1 of the 2013 Enterprise Agreement and was unlawful. The respondent, in persisting with the implementation of the new roster, ran the risk that its conduct would be found to be unlawful. As Rangiah J observed in Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd (No 2) [2018] FCA 480 at [17]:
17. I consider that a penalty should be imposed upon the respondent in the circumstances of the case. Firstly, in circumstances where the applicant had contested the respondent's proposed conduct and where the proper construction of the Enterprise Agreement was far from certain, the respondent can be characterised as having "taken the odds". The respondent submits that the applicant did not specifically take the point that the case ultimately turned on: that despite the reduction in shift lengths, the roster descriptions continued to meet the description of an "Indicative 45.75 Hour Week" in the Table in Item 4 of Annexure 1. That may be so, but there is evidence that at a meeting on 11 December 2015, the applicant contended that the Roster Allowance that should be paid was the amount specified in the schedule to the Enterprise Agreement (which I understand to refer to the amounts set out in the Table), and that, by failing to pay the proper amount, the respondent was in breach of the Agreement. Therefore, the construction of the Table was always in issue. Further, the respondent's justification for reducing the Roster Allowance always depended upon its contention that the shifts no longer met the roster descriptions in the Table. What is significant is that the respondent knew that it was taking a risk that it would be contravening the Enterprise Agreement, but did not take an obvious step to avoid that risk. That step was to apply, in the face of the dispute, for an appropriate declaration. The minimum requirements for the making of a declaration set out in Forster v Jododex Australia Pty Ltd [1972] HCA 61; (1972) 127 CLR 421 at 437-438 would have been satisfied. The respondent elected to take the risk that its conduct would contravene s 50 of the FWA.
(Emphasis added)
28 I also note the following comments of the Full Court, albeit in respect of claimed contraventions of the Trade Practices Act 1974 (Cth), in Universal Music Australia Pty Ltd v Australian Competition & Consumer Commission (2003) 131 FCR 529 at 598-9, [2003] FCAFC 193:
308. As we have said, the contravening conduct was plainly and deliberately anti-competitive in its intent. It was conduct which, at least, ran a serious risk of being in breach of the Act. If this was appreciated, then the fact that the risk came home against expectations does not entitle the perpetrator to a discount. If the existence of the risk was not appreciated, then the company concerned misunderstood the law applicable to an important area of commerce and would not be entitled to any discount.
309. The fact that legal advice was obtained by one of the parties is also of little consequence. It illustrates that risk was appreciated. However, legal advice is obtained for the benefit of the company and only for the benefit of the company. It is not a discounting factor. If legal advice is wrong, that is a matter between the company and the legal adviser.
310. In our opinion, to give a substantial discount for these factors sends the wrong signal to the commercial community. It will encourage risk-taking and pushing the boundaries of anti-competitive conduct. If, nonetheless, a proceeding is instituted, it will encourage the most vigorous possible defence, in an endeavour to demonstrate the supposed complexity and uncertainty of the law. Many cases of contravening conduct can be described as complex and uncertain as to result. As submitted for ACCC, the Court has recognised in many cases that the difficulty of detecting and proving contraventions of Pt IV of the Act requires adequate penalties to be imposed when contravening conduct is detected and established… If a company `takes the odds', it must expect serious consequences if it miscalculates …
(Emphasis added)
29 See also comments of Murphy J in Australian Competition and Consumer Commission v TPG Internet Pty Ltd (No 2) [2] ATPR 42-402; [2012] FCA 629, in particular where his Honour observed:
106. The application of Universal Music is not limited only to those cases involving deliberate misleading conduct with intent, but it does require an appreciation of risk by the contravenor. In the present case as in Universal Music (and as distinct from Ranu and Australian Abalone) TPG had an appreciation of the risk that its conduct might breach the TPA. It made the judgment that it did not. In that sense it took the odds as described in Universal Music.
30 I am satisfied that, in the circumstances, the conduct of the respondent was "taking the odds" as explained by the Full Court in Universal Music. To that extent there is a need for specific deterrence.
31 Insofar as concerns the issue of general deterrence, I am satisfied that the penalty imposed for the conduct in question should reflect the seriousness of the conduct. I have particularly formed this view in circumstances where the respondent appeared to form the view, without consultation, that the terms of the new roster could be imposed by it, and where those terms were clearly well outside the scope of any agreement as contained in the 2013 Enterprise Agreement. To that extent, the penalty imposed should be such as to warn other employers in the position of the respondent against engaging in such conduct. As Tracey J observed in Director of the Fair Work Building Industry Inspectorate v Ellen (The Longford Gas Plant Case) [2016] FCA 1395:
36. General deterrence emerges as a much weightier consideration. There are, literally, hundreds of thousands of employees who are covered by enterprise agreements. Many of these are engaged, like the respondents, in the construction industry. It is necessary to make plain that resort to unprotected industrial action should not be a knee-jerk (or other) response to incidents occurring in the workplace, especially when lawful avenues exist and are provided for in enterprise agreements. Contraventions of provisions such as s 417(1) must attract meaningful penalties lest the purposes served by them be undermined.
(See also White J in Australian Building and Construction Commissioner v Huddy (No 2) [2017] FCA 1088 at [47] and Barker J in Australian Building and Construction Commissioner v McCullough (No 2) [2017] FCA 295 at [75]).