Penalty
14 Section 546 of the FWA provides:
(1) The Federal Court, the Federal Circuit Court or an eligible State or Territory court may, on application, order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.
Note: Pecuniary penalty orders cannot be made in relation to conduct that contravenes a term of a modern award, a national minimum wage order or an enterprise agreement only because of the retrospective effect of a determination (see subsections 167(3) and 298(2)).
Determining amount of pecuniary penalty
(2) The pecuniary penalty must not be more than:
(a) if the person is an individual - the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2); or
(b) if the person is a body corporate - 5 times the maximum number of penalty units referred to in the relevant item in column 4 of the table in subsection 539(2).
Payment of penalty
(3) The court may order that the pecuniary penalty, or a part of the penalty, be paid to:
(a) the Commonwealth; or
(b) a particular organisation; or
(c) a particular person.
Recovery of penalty
(4) The pecuniary penalty may be recovered as a debt due to the person to whom the penalty is payable.
No limitation on orders
(5) To avoid doubt, a court may make a pecuniary penalty order in addition to one or more orders under section 545.
15 In my liability judgment, I found (at [214]) that Clermont Coal had contravened two provisions of the FWA: ss 340 and 346. Both of those provisions are civil remedy provisions (s 539(1)).
16 For a body corporate, the maximum penalty for a contravention of each of those provisions is 300 penalty units (ss 539 and 546(2)(b)). The parties agree that, at the relevant time, 300 penalty units equates to $51,000.
17 Both parties referred to the list of considerations identified by Mowbray FM in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 and adopted by Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14; [2007] FCA 1080 at [14] as potentially relevant to the assessment of an appropriate pecuniary penalty in this matter. Those considerations have been applied in numerous single judge and Full Court decisions since. An example of the latter is Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union (2008) 171 FCR 357; [2008] FCAFC 170 at [57] per Branson and Lander JJ. Nonetheless, as Buchanan J pointed out in Australian Ophthalmic Suppliers Pty Ltd v McAlary-Smith (2008) 165 FCR 560; [2008] FCAFC 8 at [91], this list of considerations should not be applied too rigidly because:
At the end of the day the task of the Court is to fix a penalty which pays appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations.
18 The High Court reflected similar sentiments recently in Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 326 ALR 476; [2015] HCA 46 where French CJ, Kiefel, Bell, Nettle and Gordon JJ observed (at [55]) the distinction to be drawn between civil penalty provisions and penalties under the criminal law:
No less importantly, whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance:
"Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act]. … The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act."
(Footnotes omitted)
19 Mr Scott pointed to a range of factors which he submitted should be taken into account in assessing the quantum of the penalty to be imposed on Clermont Coal. They included: (a) the need to deter repetition by Clermont Coal and others who might be tempted to commit similar contraventions of the FWA; (b) the lack of any contrition demonstrated by Clermont Coal; (c) to send a message to the management of corporations that they should not victimise trade union delegates carrying out legitimate industrial activities on behalf of their members; and (d) the fact that Clermont Coal is a large well-resourced corporation which was able to access high quality advice in implementing the restructuring process at the Clermont mine.
20 On the latter factor, it claimed that Clermont Coal's contraventions were therefore easily detectable by it and therefore preventable.
21 In Clermont Coal's favour, Mr Scott accepted that: (a) it had no history of contraventions of the FWA and should therefore be treated as a first time contravener; (b) the prohibited reasons were not the sole reasons for Clermont Coal's decision to terminate Mr Scott; and, (c) while the course of conduct provisions of the FWA do not apply to ss 340 and 346, the application of the totality principle is likely to result in the same outcome.
22 With respect to the last matter above, Mr Scott referred to the decision of Logan J in Construction, Forestry, Mining and Energy Union v North Goonyella Coal Mine Pty Ltd [2013] FCA 1444 (North Goonyella) at [62], where his Honour found that contraventions of ss 340 and 346 fell outside the provisions of s 557. I respectfully agree with his Honour's conclusion and will therefore treat Clermont Coal's contraventions of ss 340 and 346 separately. Nonetheless, I will take into account the totality principle in assessing the appropriate penalty for its contraventions. I therefore reject the submission of Clermont Coal that its contravention should be treated as a single course of conduct.
23 On the application of the totality principle, I will have regard to the observations of Katzmann J in Construction, Forestry, Mining and Energy Union v Pilbara Iron Company (Services) Pty Ltd (No 4) (2012) 225 IR 113; [2012] FCA 894 at [12]-[18], Collier J in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 5) [2013] FCA 1384 at [5]-[6] and Logan J in North Goonyella at [58]-[63].
24 For its part, Clermont Coal submitted that: (a) the penalty to be imposed should be proportionate to the objective circumstances of its contravening; (b) its conduct was not found to be wilful or deliberate and so deterrence should be a less significant factor; (c) there was no material risk of it re-offending; and (d) its absence of contrition, which it appeared to accept, was not an aggravating factor and consequently there were no aggravating factors that affected the objective seriousness of its contraventions.
25 In its favour, apart from the matters identified by Mr Scott, which it adopted, it also submitted it should be given credit for continuing to pay him his wages after his dismissal and reinstating him soon after the liability judgment was delivered.
26 Finally, Clermont Coal submitted that Mr Scott's claim that its contraventions were easily detectable and preventable should be rejected. On this aspect, it submitted that regard should be had to the findings in the liability judgment that: Mr Fleming had been fully briefed by Ms Washington about his responsibilities; the selection process was not found to be inherently biased against employees who engaged in union activities; and Mr Fleming, but not Mr Christensen, had failed to make the difficult distinction between Mr Scott's general attitude and his conduct as a union delegate for the CFMEU.
27 In my view, an appropriate penalty for each of Clermont Coal's contraventions is $2,500, or a total penalty of $5,000. In assessing this penalty, I have had regard to each of the matters mentioned above and, in particular, to the following factors. First, I do not consider that, in the circumstances, the contraventions were easily detectable and preventable. The matters highlighted by Clermont Coal above have led me to this conclusion. Secondly, as to the relative seriousness of the contraventions, I consider they were towards the low end of the scale. There was no evidence that Mr Scott was targeted, that there was any wilful or deliberate conduct involved in the contraventions, or that they occurred as a result of some systemic failure. Instead, they arose out of the limited, but significant, role of one individual, Mr Fleming, in a system that could reasonably have been expected by Clermont Coal to identify the candidates for compulsory redundancy, without being affected by a prohibited reason under the FWA.