Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd - [2016] FCA 1032 - FCA 2016 case summary — Zoe

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Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd

[2016] FCA 1032

Federal Court of Australia|2016-08-26|Before: Mr J, Reeves J

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Source facts

Court

Federal Court of Australia

Decision date

2016-08-26

Before

Mr J, Reeves J

Source

Original judgment source is linked above.

Judgment (25 paragraphs)

[1]

Introduction 1 In February 2016, I delivered my judgment in relation to the liability aspects of this matter: [2016] FCA 199 (the liability judgment). These reasons are concerned with the remaining issues of compensation and penalty. 2 There are three broad issues to be determined: (a) the compensation, if any, Mr Haylett should be awarded for his past loss of wages (including interest) and for his future loss; (b) the appropriate pecuniary penalty to be imposed on Hail Creek Coal Pty Ltd (Hail Creek Coal) for its contraventions of the Fair Work Act 2009 (Cth) (FWA); and (c) whether an order should be made that the pecuniary penalty be paid to the Construction, Forestry, Mining and Energy Union (CFMEU). Because of the nature of the compensation and penalty issues that fall to be determined, it is convenient to begin by outlining the factual background to this matter in a little detail.

[2]

Factual background 3 Until Monday, 18 November 2013, Mr Haylett worked as a drill rig operator for Hail Creek Coal. On that day, he was stood down from performing any further duties with effect from the next day. That decision was made by Mr Priestly, Hail Creek Coal's mine manager. It occurred against the backdrop of two events that happened at about the same time. First, on the previous Friday, 15 November 2013, Mr Haylett obtained an award of common law damages against Hail Creek Coal in the District Court of Queensland in the amount of approximately $638,000. 4 That claim arose out of a spinal injury Mr Haylett suffered at work with Hail Creek Coal in mid-2009. In the ensuing 12 months or so, he had a discectomy and spinal fusion at the C6/7 level and eventually returned to work on light duties in October 2010. After briefly attempting other duties, he was trained as a drill rig operator, a position which required Hail Creek Coal to make some special accommodation so that he could fill it. He worked as a drill rig operator from late 2010 until late 2013, when, as already noted above, he was stood down. 5 The second event occurred earlier on Monday, 18 November 2013, when Mr Haylett underwent a pre-arranged five yearly medical assessment under the provisions of the Coal Mining Safety and Health Act 1999 (Qld) (CMSH Act). That assessment was partly conducted by a Dr Parker. In the prescribed form he completed after the assessment, Dr Parker opined that Mr Haylett was unfit to undertake his current position, described in the form as "operator". 6 Soon after being stood down, Mr Haylett commenced proceedings in the Supreme Court of Queensland challenging the validity of Dr Parker's assessment under the CMSH Act. In August 2014, he was successful in those proceedings. 7 In the meantime, in early April 2014, Hail Creek Coal ceased paying Mr Haylett his wages, claiming that he had exhausted his sick leave and annual leave entitlements. Thereafter, it treated him as being on leave without pay. 8 In response to the Supreme Court ruling, Hail Creek Coal obtained another assessment from Dr Parker and, based on that assessment, maintained its decision to stand down Mr Haylett and not pay him any wages. The circumstances in which that further assessment was obtained from Dr Parker are controversial. It is therefore appropriate that I set out the findings I made about them in my liability judgment as follows: 7 … on 23 September 2014, Dr Parker produced an assessment form which had a cross in the box beside the statement "Is fit to undertake proposed/current position, subject to the following restrictions." Beneath that statement, the restrictions were listed as: "unfit for heavy or continuous jarring and vibration"; "unfit for working above shoulder height"; and "unfit for heavy haul trucks or dozers". However, the form stated he was assessed as: "fit for drill rig operation". 8 Dissatisfied with that assessment, Mr Lawler of Hail Creek Coal telephoned Dr Parker and prevailed upon him to issue another assessment form. It contained essentially the same information, but it had a cross beside a different box. The statement beside that box was: "Is not fit to undertake proposed/current position, because of the following restrictions". The same restrictions as above were then listed. 9 Mr Haylett again challenged Dr Parker's assessment in the Supreme Court of Queensland. In November 2014, he was again successful. Hail Creek Coal then appealed that decision to the Queensland Court of Appeal. Mr Haylett cross-appealed seeking a declaration that the first assessment form issued by Dr Parker (see [8(7)] above), dated 23 September 2014, was a valid assessment. 10 In December 2015, Mr Haylett was successful on both counts. As a result, the Court of Appeal made a declaration that: It is declared that the Section 4 - Health Assessment Report of Dr Parker dated 23 September 2014 is valid and meets the requirements of section 46 [CMSH Regulations]. 11 Notwithstanding Mr Haylett's total success before the Court of Appeal, Hail Creek Coal still refused to reinstate him to his former position and to recommence paying him his wages. It claimed it could only do that consistent with the provisions of the CMSH Act if he underwent yet a further assessment. 12 This proceeding was commenced by the CFMEU (Mr Haylett's union) in November 2014. Because Hail Creek Coal's appeal was, at that stage, still pending in the Queensland Court of Appeal, this proceeding was adjourned to await the outcome of that appeal. When Hail Creek Coal refused to reinstate Mr Haylett after his success in that appeal, Mr Haylett applied to this Court for an interlocutory injunction requiring it to reinstate him forthwith. Since that application was opposed by Hail Creek Coal, rather than dealing with the issue as an interlocutory matter, I set this proceeding down for an urgent trial. That occurred in February 2016. 13 In my liability judgment, I concluded that Hail Creek Coal had, in summary (liability judgment at [53]): (a) taken adverse action against Mr Haylett, in contravention of s 340 of the FWA; and (b) contravened s 50 of the FWA by breaching the provisions of clauses 7.1 and 7.6 of the Hail Creek Agreement 2011. 14 Accordingly, I made declarations to that effect. 15 Soon after the conclusion of the hearing in February 2016, Mr Haylett decided to abandon his attempts to be reinstated at Hail Creek Coal. Instead, on 29 February 2016, his lawyers sent a letter to Hail Creek Coal's lawyers accepting its repudiation of his employment agreement. Thereafter, he sought compensation for his past and future loss under s 545 of the FWA. Hail Creek Coal does not contest this termination of Mr Haylett's employment agreement, but it does contest his claims for compensation.

[3]

The particular issues that arise 16 The three broad issues set out above (at [2]) give rise to a number of particular issues. It is convenient to begin with the particular issues relating to Mr Haylett's claims for compensation (the broad issue in [2(a)] above). Those claims can be summarised as follows: (a) a claim for his past loss of wages grossed up to take account of the additional income tax he will be required to pay, plus interest to the date of judgment; and (b) a claim for his future loss of wages reduced to take account of contingencies, but grossed up to take account of the additional income tax he will be required to pay. 17 It should also be recorded that Mr Haylett did not include any claim for his accrued annual leave entitlements under clause 13.1 of the Hail Creek Agreement 2011, nor his long service leave entitlements, on the basis that they will both be payable in any event under the apposite contractual and/or legislative provisions. 18 Mr Haylett provided a set of figures and formulae by which he contended his compensation claims should be calculated. He partly based those figures on the fact that his roster and commute payments ceased on 18 March 2014 and the remainder of his wages ceased on 1 April 2014. He also calculated his loss on the assumption that income tax would be assessed on the award. Accordingly, he contended that, in order to avoid an unjust result, his award of compensation should be grossed up to take account of the extra income tax that he will be required to pay because it will be paid as a lump sum in one financial year and therefore will be calculated at higher marginal tax rates. Mr Haylett also contended that simple interest should be awarded at the Court's usual pre-judgment interest rates on the past unpaid wages component of his award. 19 Hail Creek Coal did not dispute Mr Haylett's figures and formulae, nor his claim for pre-judgment interest, however, it raised a number of issues concerning the basis upon which Mr Haylett's loss should be calculated, some of which were quite fundamental. Those issues can be summarised as follows: (a) he had no entitlement to any compensation because any loss he may have suffered had already been covered by the award he obtained in the District Court of Queensland; (b) if he has suffered any loss that was not covered by the District Court award, it should be calculated by relying: … upon Mr Haylett's 'statement of loss and damage' in the District Court proceeding as a true assessment of his exposure to economic loss resulting from his declared inability to work at the time of the District Court decision and then deducting the amount actually awarded to him by the District Court. This results in a rounded figure of $140,800.00 ($640,800.00 [sic] - $500,000.00). (c) if he is to receive any award for his past or future loss of wages, it should be calculated on a post-tax basis and it should not be grossed up to take account of any additional income tax he has to pay. Alternatively, at least with respect to his past loss of wages, Hail Creek Coal should be permitted to account to the Australian Taxation Office for the income tax that has to be deducted from those wages; (d) assuming he is to receive any award for his future loss of wages, that award should be reduced significantly to take account of adverse contingencies; (e) on the same assumption, a greater allowance should be made for his future employment prospects than had been allowed in Mr Haylett's calculations; (f) further, on the same assumption, the discounting of any award Mr Haylett is to receive for his future loss of wages to take account of the fact that he will receive it as a lump sum should be calculated at a higher discount rate. 20 I will address these issues in the order in which they are set out above. However, I will first outline the materials that were relied upon by the parties.

[4]

Materials relied upon by Mr Haylett 21 Mr Haylett filed two affidavits in support of his claims for compensation. In the first, he set out his personal, educational, training and employment history. The salient aspects of that history are as follows. 22 Mr Haylett is 45 years of age, having been born on 23 August 1971. He is married and he and his wife have three children. He and his family have lived in Sarina, North Queensland for approximately 14 years. 23 After completing Year 10 at high school, he undertook a one year pre-apprenticeship mechanical course at the TAFE Technical School in Albany, Western Australia. He then undertook a four year auto-electrical apprenticeship and gained qualifications as an auto electrician. After qualifying, however, instead of working as an auto electrician, he obtained employment in a variety of different labouring jobs in the construction industry. 24 In 2004, he began working in the mining industry. At first, he worked for a number of sub-contractors at mines in central Queensland, including the South Walker Coal Mine and the Hail Creek Coal Mine. Later in 2004, he obtained work as a truck operator for Thiess at the Goonyella Riverside Mine and then, in turn, worked as an operator for Roche Mining at the Millenium Mine, for Campbell Mining at the Moorvale Mine, for Legra Mining Services Pty Ltd at the Coppabella Mine and for Macarthur Coal Mine Management Pty Ltd at the Macarthur Coal Mine. 25 In 2009, he commenced working as an operator for Hail Creek Coal. As is already noted above, he sustained a spinal injury at work in mid-2009, but he was able to return to work in late 2010 and remained working at Hail Creek Coal until late 2013, when he was stood down. 26 Based on this employment history, Mr Haylett claimed to be competent to work as a machine operator, or a labourer. However, he claimed that his spinal injury prevented him from working both as a labourer and in generic operator roles because of the risk that such work may aggravate his injury. 27 In his affidavit, Mr Haylett also set out the steps he had taken during March 2016, immediately after accepting Hail Creek Coal's repudiation of his employment agreement (see at [15] above), to gain other employment. He described those attempts as follows: 42. On 3 March 2016, I travelled to Mackay to visit some more employment agencies. 43. I attempted to visit the four labour hire agencies that used to be based in Mackay. On arrival, I found that each of them was no longer operational. 44. I then went to Manpower, a labour hire agency. I advised Manpower of my work history and my injury. I was advised by a representative of Manpower that in my circumstances Manpower would find it difficult to find me work. I was advised to contact a disability employment agency. As I was already in the process of registering with IDEAL Placements, I decided to try another mainstream job agency. 45. I then went to Neato Placement. I was advised by a representative of Neato that I could not register with Neoto [sic] unless I was receiving the dole. 46. At the end of my damages claim, I received correspondence from Centrelink that stated that I would be unable to access Centrelink benefits until 18 November 2020 ... 47. I then telephoned Global Product Search, a labour hire company for the mining industry in the Bowen Basin. I spoke to a representative called "Sam" and told her about my employment history and neck injury. Sam advised me that there were no drill rig operator/driller jobs ... 48. Finally, I phoned Skilled Recruitment and spoke to "Rachel". I told Rachel about my employment history and neck injury. Rachel told me that there might be some warehouse jobs available in the sugar crush season starting in August 2016 however that would only be seasonal work. She asked me to send in my resume and said she would get back to me. 49. On 3 March 2016 I filled an online form and submitted my resume to Skilled Recruitment. 50. On 14 March 2016 I called Rachel at Skilled Recruitment to confirm she had received my application. She confirmed she had and she would see if there were any jobs available and contact me. I have not heard back from Skilled Recruitment. 28 As to his taxation affairs, Mr Haylett said that, in the 2015/2016 financial year, he "will not declare any taxable income, as [his] only income has been the loan from the CFMEU". He also said that he has private health insurance and he does not therefore believe he is required to pay the Medicare Levy Surcharge. 29 Mr Haylett also relied upon an affidavit made by Mr Alfred Maher, a Job Coordinator/Case Manager at IDEAL Placements, a recruitment agency. Mr Maher's role at IDEAL Placements is to "find jobs for job seekers with a disability, injury or illness who are registered with IDEAL Placements". In his affidavit, Mr Maher said that he had case managed in excess of 200 clients since 2010. At least 60 of those clients worked in the mining industry and approximately 30 worked as coal miners. 30 Before making his affidavit, Mr Maher said he met with Mr Haylett for approximately half an hour to discuss his employment history and the disability resulting from his spinal injury mentioned above. He said that, following their meeting, he arranged for Mr Haylett to attend an Employment Service Assessment and to obtain a medical report from his general practitioner, Dr Lockwood. 31 Based on those materials, Mr Maher expressed a number of opinions about Mr Haylett's future employment prospects as follows: 16. Overall, my assessment of Mr Haylett is that he is in a similar position to that of a school leaver because, although he has had significant experience in the labour market since leaving high school, none of the specific skills that he has gained in that time will be likely to lead to him finding alternative employment as his neck injury prevents him from working in most work in the mining industry and most labouring work. ... 18. I consider it would be very unlikely for Mr Haylett to find work in the mining industry in the future because his injury limits his ability to work in a generic operator role. ... 24. It is possible that Mr Haylett may be able to find work doing a light labouring job that he could manage with his neck injury, however with my experience of the current state of the labour market in the Mackay region, light labouring jobs are not very common. 32 At the conclusion of his affidavit, Mr Maher summarised his overall assessment of Mr Haylett's employability in the following terms: 46. Overall, I consider that it would take Mr Haylett about 3 - 6 months to find employment that does not require any retraining and 6 - 12 months to find to [sic] work that does require some retraining (following the relevant training period) having regard to: a) Mr Haylett's skill level; b) Mr Haylett's neck injury; c) the employment opportunities for people with disabilities in the Mackay region; d) the labour market generally. ... 48. Overall, I am of the view that the likely full-time wages that Mr Haylett could expect to earn given his skills and abilities in the next two years would be nor [sic] more than $40,000.00 per annum after he has undergone some retraining and is able to work in a full-time capacity. 33 At the compensation and penalty hearing, the CFMEU tendered a "Notice to Admit" dated 15 March 2016 where it sought to have Hail Creek Coal admit 10 facts. They included the following: 5. The Mine was commissioned in November 2003. ... 10. The Mine's life, on present estimates, is 25 years from commissioning. 34 As Hail Creek Coal did not respond to that notice, the abovementioned facts are deemed to be admitted: r 22.01 of the Federal Court Rules 2011 (Cth). It can therefore be concluded that the Hail Creek mine has a present estimated life span of approximately 13 years.

[7]

Relevant legislative provisions and principles 39 Section 545(1) and (2) of the FWA provide: Federal Court and Federal Circuit Court (1) The Federal Court or the Federal Circuit Court may make any order the court considers appropriate if the court is satisfied that a person has contravened, or proposes to contravene, a civil remedy provision. (2) Without limiting subsection (1), orders the Federal Court or Federal Circuit Court may make include the following: (a) an order granting an injunction, or interim injunction, to prevent, stop or remedy the effects of a contravention; (b) an order awarding compensation for loss that a person has suffered because of the contravention; (c) an order for reinstatement of a person. (Notes omitted) 40 In Maritime Union of Australia v Fair Work Ombudsman [2015] FCAFC 120 (MUA), the Full Court described the exercise that has to be undertaken in assessing an award of compensation under s 545(2), as follows (at [28]): The task of the primary judge, having found the relevant contraventions, was to assess the compensation, if any, that was causally related to those contraventions. That involved not an examination of what did happen, but an assessment of what would or might have occurred, but which could no longer occur (because of the contraventions). Subject to any statutory requirement to the contrary, questions of the future or hypothetical effects of a wrong in determining compensation or damages are not to be decided on the balance of probability that they would or would not have happened. Rather, the assessment is by way of the degree of probability of the effects - the probabilities and the possibilities: Malec v JC Hutton Pty Ltd [1990] HCA 20; 169 CLR 625 at 642-643; Sellars v Adelaide Petroleum NL [1994] HCA 4; 179 CLR 332 at 352-356. The above proposition must be qualified by the recognition that, where the fact of injury or loss is part of the cause of action or wrong, it must be proved on the balance of probability. Compensation is generally awarded for loss or damage actually caused or incurred, not potential or likely damage: Tabet v Gett [2010] HCA 12; 240 CLR 537; Sellars at 348; Wardley Australia Ltd v Western Australia [1992] HCA 55; 175 CLR 514 at 526; that is equally so here under ss 807(1)(b) and 545(2)(b). 41 Insofar as future or hypothetical events are concerned, in Sellars v Adelaide Petroleum NL (1994) 179 CLR 332 (Sellars) at 355, the High Court described how loss or damage was to be assessed, in the following terms: … Hence the applicant must prove on the balance of probabilities that he or she has sustained some loss or damage. However, in a case such as the present, the applicant shows some loss or damage was sustained by demonstrating that the contravening conduct caused the loss of a commercial opportunity which had some value (not being a negligible value), the value being ascertained by reference to the degree of probabilities or possibilities. It is no answer to that way of viewing an applicant's case to say that the commercial opportunity was valueless on the balance of probabilities because to say that is to value the commercial opportunity by reference to a standard of proof which is inapplicable. (Emphasis in original) 42 By its very nature, the calculation of future loss can only be a rough estimate. It cannot be undertaken with mathematical precision. The object is to arrive at an estimate which is "most likely to provide fair and reasonable compensation": see Todorovic v Waller (1981) 150 CLR 402 (Todorovic) at 413 per Gibbs CJ and Wilson J and also Gill v Australian Wheat Board [1980] 2 NSWLR 795 at 807 per Rogers J. 43 These observations dispose of a number of the more general submissions made by Hail Creek Coal. They include its submissions that compensation under s 545 is limited to "'out of pocket' losses actually incurred"; and that the "use of the words 'loss' and 'suffered' (past tense) within s 545(2)(b) of the [FWA] are very clear 'conditions precedent' and obvious words of constraint upon the appropriate formulation of an order for compensation". However, Hail Creek Coal is correct in some of its other general submissions, including: that the "compensation must not be based on remote connections"; that "'[d]ouble satisfaction' … or 'double dipping' … must not be permitted"; and that "[e]xemplary or punitive compensation" should not be awarded. I will return to the double compensation issue in the next section of these reasons. I should add that I do not understand Mr Haylett to be contesting any of these three propositions.

[9]

The effect of s 91 of the Evidence Act 44 Having identified the relevant legislative provision and principles, it is next convenient to turn to the first of the particular issues Hail Creek Coal has raised (see at [19] above). It relates to the effect, if any, Mr Haylett's District Court award has on his claims for compensation under s 545 of the FWA (see at [19(a)] above). Before considering the terms of that award, it is necessary, first, to deal with a question that arose during the compensation and penalty hearing concerning the effect of s 91 of the Evidence Act 1995 (Cth). It provides: (1) Evidence of the decision, or of a finding of fact, in an Australian or overseas proceeding is not admissible to prove the existence of a fact that was in issue in that proceeding. (2) Evidence that, under this Part, is not admissible to prove the existence of a fact may not be used to prove that fact even if it is relevant for another purpose. (Note omitted) 45 Mr Haylett's counsel relied on this section to attempt to limit the use that could be made of the reasoning employed by Baulch DCJ in his District Court judgment. 46 While it accepted that s 91 placed some constraints on the use that could be made of the reasoning in the District Court award, Hail Creek Coal submitted that it "does not prevent evidence being given of judgments for the purpose, not of establishing the truth or the facts found, but to establish the terms of the judgment and its legal effect upon subsequent proceedings". Further, it submitted that the section "will not prevent evidence being given of a decision if the facts thereby evidenced are not 'a fact that was in issue in the proceeding'". In making these submissions, it placed particular reliance on the decision of Lander J in Australian Competition and Consumer Commission v Prysmian Cavi E Sistemi Energia S.R.L. (formerly Pirelli Cavi E Sistemi Energia S.P.A.) (No 4) (2012) 298 ALR 251; [2012] FCA 1323 at [177]-[178]. 47 In response, Mr Haylett's counsel stated that Mr Haylett did not oppose the District Court award being relied upon "for the limited purpose of understanding how [Baulch DCJ's] award of $500,000 was arrived at". On that premise, he stated that Mr Haylett was willing to waive the application of s 91, under s 190(1)(c) of the Evidence Act. The latter section allows the Court, if the parties consent, to waive compliance with various provisions of that Act, including those in Parts 3.2 to 3.8. Since s 91 is in Part 3.5, that waiver provision applies to it. Accordingly, since Hail Creek Coal does not, as I understand it, seek to use the District Court award for any broader purpose, I will therefore limit my examination of it to the purpose described by Mr Haylett's counsel above.

[11]

The District Court award for loss of earning capacity 50 For present purposes, the relevant part of the District Court award was that relating to the assessment of Mr Haylett's loss of earning capacity. Baulch DCJ assessed that loss in the sum of $500,000, as follows. First, he calculated Mr Haylett's net weekly earnings, as follows: Using the table found at paragraph 31 of his quantum statement, it seems to me to be appropriate to assess his net earnings as having been as follows. In the 24 weeks up to the 30th of June 2009, he earned $1399 net per week. In the year ended 30th June 2010, he earned $1369 net per week. In the year ended 30th June 2011, he earned $1452 net per week. In the year ended the 30th June 2012, he earned $1791 net per week. And in the year ended the 30th June 2013, he earned $1848 net per week. If the current trends continue at the mine, then his earnings are likely to increase. The future, though, of the coal mining industry, like its past, must be approached with some caution. It seems to me to be safe to assume that if the plaintiff does suffer future economic loss, it will be suffered at a rate not less than $1750 per week during any period in which he is unemployed. 51 Next, he calculated Mr Haylett's total future earnings over the remainder of his working life as follows: Because he is aged 42 at present, he has between 23 and 25 years of working life ahead of him. If he continued to work for that period, earning his present rate of earnings, then his future earnings would have a present value of somewhere between $1,332,962 and $1,392,837. Those figures arrived at by using the five per cent tables. It seems to me that it is unlikely that wages will go backwards, and so there is a good argument in favour of using the present earnings as the basis for the assessment of future economic loss, but I note that the adoption of that figure, instead of the $1750 that I mentioned, has only a marginal effect on the calculation once the discount tables are applied. 52 Finally, he used the above figure to make his final assessment, as follows: … Having regard to the plaintiff's actual disability, his assessed disability, and the matters to which I have referred concerning the difficulties he encounters now and will encounter in the open labour market, I think an appropriate of damages for future economic loss is $500,000. I note that that is a little less than the sum that would be calculated if one assumed a loss of 40 per cent of the plaintiff's earning capacity, and that seems to be an appropriate level at which to assess the loss. (Error in original)

[12]

The different purposes of the two awards 53 It can therefore be seen that the District Court award was an award of damages for Mr Haylett's loss of earning capacity assessed by reference to the effect his physical injury and disability would have on his capacity to earn income in the future. By comparison, the assessment of an award of compensation under s 545 of the FWA is not directed to the effect of any physical injury, but rather is directed to the loss Mr Haylett has suffered because of Hail Creek Coal's contraventions of the FWA. The declarations I made in the liability judgment with respect to those contraventions are set out above (at [13]). In short, they are that Hail Creek Coal took adverse action against Mr Haylett and breached certain provisions of his employment agreement. His award of compensation will therefore involve an assessment of his past and future loss of wages by reason of those contraventions. It follows that the District Court award of damages and this award of compensation have different purposes. The purpose of the former is to compensate for a loss of earning capacity caused by physical injury and the purpose of the latter is to compensate for a loss of wages and future income caused by two contraventions of the FWA. 54 Nonetheless, because the assessment of each is founded on Mr Haylett's earnings or wages, there is a need when calculating the present award to be particularly vigilant to avoid any element of overlap, or double compensation, between the two awards. As Hail Creek Coal pointed out, citing the judgment in Haines v Bendall (1991) 172 CLR 60 (Mason CJ, Dawson, Toohey and Gaudron JJ (at 63): ... Compensation is the cardinal concept. It is the "one principle that is absolutely firm, and which must control all else": Skelton v. Collins, per Windeyer J. Cognate with this concept is the rule, described by Lord Reid in Parry v. Cleaver, as universal, that a plaintiff cannot recover more than he or she has lost. (Citations omitted) 55 Having said that, it must also be said that in this instance, the possibility of such an overlap, or double compensation, is likely to be quite limited. That is so because Mr Haylett's past and future loss of wages at Hail Creek Coal, to which this award will be directed, can only be assessed by reference to the remaining lifespan of the Hail Creek mine of approximately 13 years. That is approximately a half of the period over which the District Court award was assessed, namely his remaining working life of approximately 23 to 25 years. Furthermore, this award of compensation will be discounted to take account of future contingencies, including the possibility that Mr Haylett's employment at Hail Creek Coal might have been terminated sooner than the 13 year period mentioned above. It will also be reduced to take account of the alternative employment he is likely to obtain. Nonetheless, in calculating this award, I do intend to bear in mind constantly the need to avoid any double compensation.

[14]

The taxation treatment of this award 57 This issue was the third particular issue raised by Hail Creek Coal above (see at [19(c)]). While I have adopted the epithet "grossing up the award", this issue essentially concerns the taxation treatment of an award of compensation for a contravention of the FWA. It is convenient to begin with Hail Creek Coal's sole contention for opposing any grossing up of Mr Haylett's award. It submitted that, to do so, was "fundamentally flawed and wrong at law". It submitted this was so because "[w]hen Courts calculate exonomic [sic] loss (whether post or future) the calculation is done net of tax. The District Court Decision of Baulch J is an example of this." 58 This contention is, itself, fundamentally flawed. It fails to appreciate the distinction between damages awards that are subject to taxation and those that are not. Since the decision in Cullen v Trappell (1980) 146 CLR 1, where the High Court adopted the House of Lords decision in British Transport Commission v Gourley [1956] AC 185, damages for loss of earning capacity caused by personal injuries have been calculated on the footing that the award will not be taxed in the hands of the plaintiff and therefore no allowance should be made for taxation. As can be seen above (see at [50]), Baulch DCJ applied that approach by using Mr Haylett's net earnings after tax when calculating the District Court award. 59 However, as I have already observed above, an award of compensation under s 545 of the FWA is of a different character. It is not an award of damages for personal injuries. Instead, at least in this case, it is an award to compensate Mr Haylett for his past and future loss of wages as a result of Hail Creek Coal's contraventions of the FWA. This award is therefore more in the nature of an award of compensation for wrongful dismissal in that it compensates Mr Haylett for lost earnings or income. That being so, even though it will be paid in a lump sum, it will be treated as assessable income and taxed as such: see the authorities discussed in Barnett K and Harder S, Remedies in Australian Private Law (2014, Cambridge University Press) at 29 to 32 and ATO Taxation Determination 93/58.

[15]

Should the award be grossed up? 60 This award will be paid in a lump sum to Mr Haylett in the current financial year. As has already been pointed out above, that, in turn, will mean that he will be subject to income tax on the award at higher marginal rates. Specifically, Mr Haylett has estimated that he will pay an average income tax rate of 40% on the past loss of wages component of this award, compared with the average rate of 30% that he was paying on his total annual wages when he was employed by Hail Creek Coal before late 2013. Accordingly, he has submitted that, "in order to avoid this unjust result, the Court should use net figures and then gross up that figure to allow for tax" on the award. While Hail Creek Coal opposed Mr Haylett's entitlement to any grossing up, I did not understand it to dispute these calculations. 61 There has been some disagreement in the authorities as to how taxation should be accounted for in awards of compensation that are not related to personal injuries. In Davinski Nominees Pty Ltd v I & A Bowler Holdings Pty Ltd [2011] VSC 220 (Davinski) (at [33]-[58]), Kaye J conducted a helpful review of all the authorities on this issue dating back to the late 1970s. Davinski was a commercial tenancy dispute where the Victorian Civil and Administrative Tribunal had declared invalid two relocation notices issued under the Retail Leases Act 2003 (Vic) and ordered the party who issued those notices to pay compensation. One of the main issues was the liability to pay tax on the award of compensation (see Davinski at [22]). After reviewing all the authorities, his Honour came to the following conclusion (Davinski at [58]): … Thus, where an award of damages is not liable to taxation, it is just that the damages should be assessed by reference to the post-tax earnings of the claimant. Otherwise, the award of those damages would be well in excess of fair compensation for the loss sustained by the plaintiff. Further, where the award of damages is liable to taxation, and where it is possible, to calculate, with reasonable certainty, both the damages on the basis of the plaintiff's lost post-tax earnings, and also the tax liability arising from the compensatory verdict, it would be unfair to assess damages, without taking the relevant tax implications into account. In such a case, the assessment of damages, ignoring tax, would not result in an amount of compensation, which is fair both to the claimant and to the defendant. (Emphasis added) 62 More recently the Queensland Court of Appeal in Westpac Banking Corporation v Jamieson [2015] QCA 50 (Jamieson) considered this issue in relation to an award of damages for economic loss caused by negligent investment advice. In that matter, the proposition that there should be a further grossing up to take account of the tax implications of the initial grossing up was rejected as impractical, however, the Court did not question the initial grossing up: see McMurdo P at [6]-[7] and Applegarth J at [195]-[209]. 63 It is worth noting that, among the authorities Kaye J reviewed in Davinski, there were five single judge decisions of this Court dealing with the treatment of taxation in wrongful dismissal cases where allowances were made because the awards would be taxed as assessable income in the hands of the taxpayer (see Davinski at [39]-[40]): Wheeler v Philip Morris Ltd (1989) 97 ALR 282 per Gray J; Grout v Gunnedah Shire Council (1995) 129 ALR 372 per Moore J; Byrne v Australian Airlines Ltd (1992) 45 IR 178 per Hill J; Reilly v Praxa Ltd [2004] ACTSC 41 per Gray J; and Patterson v Middle Harbour Yacht Club (1996) 64 FCR 405 per Whitlam J.

[19]

Mr Haylett has suffered some loss 68 However, it can be seen from Sellars above (at [41]) that, as a first step, Mr Haylett must establish he has suffered some loss. On that question, Hail Creek Coal contended that there was "nothing in the contract of employment provision in the [Hail Creek Coal Agreement 2011] which gave Mr Haylett the entitlement to work to the life of the mine" and he "had no legal security whatsoever ... under [the Hail Creek Coal Agreement 2011]". Hail Creek Coal put that submission in the following terms: You will see that at clauses 5.5 and 5.6 the [Hail Creek Coal Agreement 2011] deals with the respective obligations to terminate, so that under 5.5 Mr Haylett had the right to terminate on one month's notice, or less by agreement. Under 5.6 Hail Creek had the right to terminate the employment on one month's notice, or payment in lieu of all or part of the required notice. 69 This contention is undoubtedly of relevance in calculating contingencies, but I do not consider it establishes that Mr Haylett has not suffered some loss. If Hail Creek Coal had not unlawfully stood Mr Haylett down in late 2013 and lately repudiated his employment agreement, there is little doubt, in my view, he would still be working at Hail Creek Coal. There is no evidence of any strained employment relationship between him and the management at Hail Creek Coal in the years prior to him being stood down. Indeed, the evidence adduced at the trial showed that he had good performance assessments throughout this period and that he was performing well as a drill rig operator. Furthermore, despite the recent downturn in the mining industry, the Hail Creek Coal mine continues to operate. I am therefore satisfied that Mr Haylett has suffered some loss of his future wages by reason of Hail Creek Coal's contraventions of the FWA. The question then is to assess an appropriate amount of compensation for that loss by reference to the degree of probabilities or possibilities referred to in Sellars.

[20]

Mr Haylett's methodology for calculating his future loss of wages 70 Mr Haylett contended that the appropriate methodology for calculating his future loss was to compare what "he was likely to have earned, 'but for' the contraventions", with what he is now likely to earn given the fact of the contraventions. He submitted that the following methodology should be adopted for that calculation: Step 1: calculate the weekly post-tax earnings Mr Haylett would have earned had he remained at the Mine until it closed (13 years), adjusted for contingencies (A); Step 2: calculate the weekly post-tax earnings Mr Haylett is now likely to earn over the same period, adjusted for contingencies (B); Step 3: subtract B from A, and obtain a nominal weekly loss (C). Step 4: use actuarial tables to obtain the present value of an income stream of C over a period of 13 years (D). Step 5: gross up D to account for taxation, such that the Court's award less tax shall be the sum of D. 71 This approach accords with that outlined in the authorities above so I propose to adopt it. Nonetheless, it is important to bear in mind the difference in purpose between compensation for loss under s 545 of the FWA and personal injuries related to future loss of earning capacity. 72 In my consideration of these steps below, with the exception of the figure under Step 2, I will exclude the figures Mr Haylett has provided because they will have to be recalculated in any event. 73 As to Step 1, with respect to the deduction for contingencies, Mr Haylett submitted that the following factors should be taken into consideration: (a) the stabilisation of his injury and the likelihood that his neck injury would not have worsened; (b) the likelihood that the demand for drill rig operators would not reduce over the next 13 years; (c) the possibility that Mr Haylett could have received a promotion; (d) the possibility that Mr Haylett would have received a generous severance package if retrenched upon the closing of the mine; (e) the possibility that the life of the mine would be extended; and (f) the possibility that Mr Haylett would have obtained another role at Rio Tinto (Hail Creek Coal's parent company) following the closure of the mine. 74 Mr Haylett submitted that there should therefore be a 10% deduction for contingencies. 75 This Step raises the particular issue described in [19(d)] above: the appropriate deduction for contingencies. On that question, Hail Creek Coal contended that Mr Haylett's 10% deduction for contingencies was "manifestly inadequate" and instead, it claimed a 50% deduction would be more appropriate. To support that level of reduction, it relied upon the following factors: (a) the evidence of currently available jobs for drill rig operators in Queensland, allowing mitigation of loss (b) the difficulty of predicting inherently fluid conditions for the mining industry, its product prices, customer demands … (c) the relative youth of the applicant and his work history of moving frequently between positions and employers … (d) to predict events upon to 13 years from now is inherently more difficult than predicting events 5 years from now … (f) the fluctuating fortunes of the resource industries which are influence[d] by key external factors such as market conditions, changes in mining and extraction methods, technological change and the economics of outsourcing particular functions. 76 Mr Haylett did not, as Hail Creek Coal has correctly pointed out, have a fixed term contract with it for the lifespan of the mine. Nonetheless, apart from factor [75(c)] above, it did not call any evidence, nor point to any other factor which would suggest Mr Haylett would not have remained employed at the mine for the next 13 years. In particular, it did not call any evidence, nor make any submissions, to counter the submissions made by Mr Haylett that his employment relationship was good, that his performance assessments were satisfactory, and that he was performing his role as a drill rig operator quite effectively. Since Mr Haylett and his family have now lived in Sarina, North Queensland for approximately 14 years, I do not consider there is any merit in factor [75(c)] above. As to the downturn in the mining industry which has been highlighted by Hail Creek Coal in factor [75(f)] above and described in more detail in Mr Ross' evidence (see at [35] above), I consider that presents somewhat of a paradox for it. On the one hand, it makes it much more likely that those who still have jobs in the mining industry will strive to retain them thus making it more likely that Mr Haylett would have attempted to ensure he remained employed as a drill rig operator in a position where special accommodation had been made to allow him to fill it. On the other hand, it makes it equally more likely that those who do not have jobs, which now includes Mr Haylett, will have far more difficulty obtaining employment in the industry. This latter matter is something I will return to below. There are also the favourable factors highlighted by Mr Haylett, although the factor described in [75(a)] above, appears to stray into the area covered by his District Court personal injuries award. While a period of 13 years could not be considered to be an extraordinarily lengthy one, Hail Creek Coal is obviously correct in [75(d)] above in underscoring the inherent difficulty in predicting any future events. Recognising that there is no ready empirical measure by which this assessment can be made and, taking into account the various matters discussed above and the factors identified by the parties, I consider 20% is a fair and reasonable deduction for contingencies. 77 As to Step 2, and his prospects of obtaining other employment, Mr Haylett submitted that his weekly income should be assessed in the amount of $800 pre-tax or gross and $759 post-tax or net, having regard to his "disability, lack of educational qualifications, and location, and the expert evidence of Mr Maher". This figure of $800 per week approximates to the figure of $40,000 per annum proffered by Mr Maher (see at [32] above). Mr Haylett further submitted that this figure of $759 should be subject to a 30% discount (to $531) to account for the "risks that [he] does not find a job for some time; that his job is not full-time or else is paid less than $800 per week; and the risk that he loses his employment at some point over the next 13 years". 78 This Step raises the particular issue described in [19(b)] above: the proper allowance for Mr Haylett's future employment prospects. On that question, Hail Creek Coal's concern was the 30% discount proposed by Mr Haylett. It submitted the factors justifying that discount have already been taken into account in the District Court award. 79 Neither of these sets of submissions can, in my view, be accepted. It is apparent from Mr Maher's evidence (see at [31]-[32] above) that Mr Haylett's physical injury was a dominant factor affecting his assessment of Mr Haylett's future employment prospects. It is also apparent from that evidence that he has taken account of the factors that Mr Haylett has relied upon to propose a discount of 30% in reaching his proposed annual salary figure of $40,000. There is, therefore, a significant, if not total, overlap between the two. It follows that Mr Maher has essentially (but not entirely) made his assessment of Mr Haylett's future employment prospects by reference to his physical injury, rather than Hail Creek Coal's contravention of the FWA which, as has been mentioned a number of times above, is the true object of this award. For similar reasons, I consider Hail Creek Coal's reliance on the District Court award is immaterial to this aspect of this assessment. Instead, the critical question is to assess the effect Hail Creek Coal's unlawful decision to stand Mr Haylett down in November 2013 had on his employment prospects in the mining industry, or more generally. In the mining industry, there is the paradox mentioned above. Because of Hail Creek Coal's contravention, Mr Haylett has gone from having a secure, well paid job, involving special accommodation, close to his family home and in the industry where he had been employed for about a decade, to competing in an employment market where, insofar as the mining industry is concerned, there is a significantly larger group of competitors, the vast majority of whom will not require any special accommodation to gain employment. Outside the mining industry, he would, as Mr Maher points out, need to retrain to have a reasonable prospect of obtaining employment. It is Mr Haylett's loss caused by the interaction between Hail Creek Coal's unlawful conduct and these adverse labour market conditions to which this award is directed. While Hail Creek Coal did not cause the latter, I do not consider it can avoid liability for its interaction with the former, namely its unlawful conduct. Again, recognising the inherent uncertainty in this assessment and without obtaining much assistance from either of the parties, it seems to me that a reasonable measure of Mr Haylett's future employment prospects is a gross (before tax) annual salary of $50,000, or approximately $1,000 gross per week. 80 As mentioned above, since the parties will need to prepare a new set of calculations to take account of the conclusions expressed in these reasons, it is unnecessary for me to comment on Step 3. 81 As to Step 4, Mr Haylett contended that the 3% discount tables should be used and he provided a calculation of the present value of his future loss of wages based on that discount rate. 82 This step raises the particular issue described in [19(f)] above: the appropriate discount rate. In turn, it raises a question about the application of the Civil Proceedings Act 2011 (Qld) (CPA). That arises because Hail Creek Coal submitted that, by virtue of s 79 of the Judiciary Act 1903 (Cth), both the procedural and substantive provisions in State legislation will apply to courts, including the Federal Court, when they are exercising federal jurisdiction within a State. Hence, it submitted, s 61 of the CPA was such a provision. That section provides: (1) This section applies to an award of damages for deprivation or impairment of earning capacity, or for a liability to incur expenditure in the future. (2) However, this section does not apply to an award of damages to which the Civil Liability Act 2003, chapter 3 applies. (3) When assessing an amount of damages as a lump sum for a future loss or expense, the amount must be the present value, calculated using the prescribed discount rate, of the future loss or expense. (4) In this section - prescribed discount rate, for an award, means - (a) the discount rate prescribed under a regulation as in force when the award is made; or (b) if a discount rate is not prescribed under a regulation when the award is made - 5%. 83 Consequently, Hail Creek Coal submitted that the discount rate of 5% prescribed by this section should be used to calculate the lump sum value of Mr Haylett's future loss of wages. To support this contention, it referred to a number of authorities, but it placed particular reliance on the Full Court decision of Centrepoint Freeholds Pty Ltd v TN Lucas Pty Ltd (1985) 6 FCR 133. In that matter, a majority of the Court found that s 79 of the Judiciary Act 1903 (Cth) applied to pick up s 79A of the Supreme Court Act 1958 (Vic) (Supreme Court Act) and apply it in an action in the Federal Court under s 52 of the Trade Practices Act 1974 (Cth). Section 79A of the Supreme Court Act provided a right to receive damages by way of interest unless good cause was shown to the contrary. Importantly, s 60 of the Supreme Court Act provided: The several rules of law enacted by Part VII of this Act shall unless express provision is otherwise made be in force and receive effect in all courts whatsoever so far as the matters to which such rules relate shall be respectively cognizable by such courts. 84 In his submissions on this issue, Mr Haylett accepted that s 79 was "capable of picking up State laws regulating matters of substance, as well as procedure". However, he contended that s 79 did not apply where a contrary result was "otherwise provided" in another federal law. In support of this contention, he relied upon the Full Court decision in Fair Work Ombudsman v Toyota Material Handling (NSW) Pty Ltd (2012) 209 FCR 428; [2012] FCAFC 193. In that matter, while the Court held that s 79(1) of the Judiciary Act 1903 (Cth) picked up s 18(1) of the Limitation Act 1969 (NSW). It also held the latter section did not impose a limitation period on proceedings commenced under the Workplace Relations Act 1996 (Cth), or its successor, because it only applied to "a cause of action to recover a penalty or forfeiture" pursuant to a New South Wales enactment. On that basis, Mr Haylett contended that the provisions of s 61 of the CPA did not apply in this proceeding. 85 Section 61(1) of the CPA makes it clear that that section relevantly applies to "an award of damages for deprivation or impairment of earning capacity". Furthermore, s 3 of the CPA provides: Unless this Act otherwise expressly provides, this Act applies to civil proceedings and proceedings in relation to contempt of court in the following courts - • the Supreme Court • the District Court • a Magistrates Court. 86 The word "court" is defined in s 5 of the CPA as follows: In this Act - court means, if otherwise appropriate - (a) in the context of the Supreme Court - the Supreme Court; or (b) in the context of the District Court - the District Court; or (c) in the context of Magistrates Courts - a Magistrates Court. 87 There is no provision in the CPA similar to the all-embracing terms of s 60 of the Supreme Court Act of Victoria above (see at [83]). 88 Having regard to these matters, I do not consider s 79 of the Judiciary Act 1903 (Cth) picks up s 61 of the CPA and applies it to this award of compensation. Instead, I consider s 61 of the CPA only applies to proceedings in the prescribed State courts with respect to an award of damages for loss of earning capacity. Conversely, I do not consider it applies to an award of damages for loss caused by a contravention of the FWA. 89 Neither party referred me to any provision of any Commonwealth legislation which contains a provision similar to s 61 of the CPA. In the absence of such a legislative provision, I therefore consider I am bound to apply the 3% discount rate adopted by the High Court in Todorovic (see at 409 per Gibbs CJ). 90 As to Step 5, Mr Haylett submitted that, as the future loss component of the award will be taxed at a marginal rate of 49%, the total figure should be grossed up to take account of the extra tax he will be required to pay. 91 For the reasons already set out above (at [64]), I consider it is appropriate and fair that Mr Haylett's award be grossed up in this manner.

[22]

Penalty 93 I turn next to the issue described in [2(b)] above: the appropriate penalty to be imposed on Hail Creek Coal for its contraventions of the FWA. 94 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 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. 95 In my liability judgment, as I have already noted above, I found (at [53]) that Hail Creek Coal had contravened two provisions of the FWA: ss 340 and 50. Both of those provisions are civil remedy provisions (s 539(1)). 96 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 equated to a maximum penalty of $54,000. 97 Hail Creek Coal accepted that the two contraventions were separate contraventions. However, it submitted that the totality principle should be applied so that "the aggregate of these two penalties corresponds with an appropriate sanction for what was the one wrong". 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 Construction, Forestry, Mining and Energy Union v North Goonyella Coal Mine Pty Ltd [2013] FCA 1444 at [58]-[63]. 98 In assessing the appropriate penalty, I will also have regard 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. 99 The CFMEU pointed to a range of factors which it submitted should be taken into account in assessing the quantum of the penalty to be imposed on Hail Creek Coal. Those factors included: (a) Hail Creek Coal deliberately stood Mr Haylett down and the standing down was done for an unlawful reason; (b) Hail Creek Coal deliberately ceased paying Mr Haylett his wages; (c) Hail Creek Coal persisted with its actions in circumstances including where the CFMEU's legal representatives wrote to Hail Creek Coal on a number of occasions urging them to desist, which it refused to do, and where Hail Creek Coal maintained its position despite three decisions against it in Queensland courts; (d) the decision to stand Mr Haylett down was made by Hail Creek Coal's senior management, in particular by its mine manager, Mr Priestly; (e) Hail Creek Coal is a large and well-resourced corporation which had the means to obtain legal and human resources advice at all times; (f) Hail Creek Coal has not given any evidence that it sought or acted upon legal advice when it made its decision to stand Mr Haylett down and cease paying him his wages; (g) Hail Creek Coal's contraventions of the FWA were compounded by the actions of Mr Lawler and Mr Priestly in prevailing upon Dr Parker to change his medical certificate in September 2014; (h) Hail Creek Coal's contraventions of the FWA has caused Mr Haylett significant harm, namely: (i) he has suffered extreme stress and worry; (ii) his loss of pay caused him to use approximately $130,000 of his personal savings; and (iii) he suffered financial hardship and was not able to travel to England in 2015. 100 The CFMEU also submitted that an element of general deterrence should also be included in the penalty as "there are many other employers who might be tempted to take adverse action against employees who bring successful negligence claims against them". 101 For its part, Hail Creek Coal submitted that there was a range of factors which should be taken into account in assessing the quantum of the penalty. Those factors included: (a) it had not acted deliberately. Instead, it found itself in a "difficult position with regard to the application of the Coal Mining Safety and Health Regulation 2001 (Qld) … and the Coal Mining Safety and Health Act 1999 (Qld) …, which provide very strict requirements in relation to maintaining safety at a mine"; (b) it received advice from Mr Lawler, its in-house health and human resources professional, and Ms Robinson, its in-house injury management professional, in relation to its decision; (c) after the decision was delivered by the Queensland Court of Appeal, it was required to have Mr Haylett examined by a medical professional in accordance with routine practice for employees returning to work in the mine after a period of absence; and (d) it is a large employer and it has not been previously subject to penalties for adverse action over the 13 year life of the mine to date.

[23]

Consideration 102 In my view, an appropriate penalty for each of Hail Creek Coal's contraventions is $25,000 or a total penalty of $50,000. In assessing this penalty, I have had regard to each of the matters mentioned above and, in particular, to the following matters. First, I reject the first three factors advanced by Hail Creek Coal above. Each of them is, to a varying degree, contrary to express findings I made in my liability judgment. Specifically, Hail Creek Coal's claim not to have acted deliberately ([101(a)] above) was addressed at [35] where I found, among other things, that Mr Priestly had acted under a pretext, hastily, and with the intention of removing Mr Haylett from the workforce at Hail Creek Coal because of the risk he thought he posed to its operations. The proposition that it was in a "difficult position" with regard to the CMSH Regulations and Act ([101(b)] above) is based upon its erroneous construction of those provisions which I rejected in my liability judgment at [31]. The contention that it, namely Mr Priestly, received advice from Mr Lawler and Ms Robinson ([101(b)] above) is not consistent with the facts as I found them in the liability judgment (at [35]). Moreover, it is contrary to the findings I made about the unsatisfactory nature of Mr Priestly's evidence vis-à-vis the statements in the emails emanating from Mr Lawler and Ms Robinson at [32]-[33] and [40] of my liability judgment. Hail Creek Coal's claim "it was required to have Mr Haylett examined by a medical professional in accordance with routine practice for employees returning to work in the mine after a period of absence" ([101(c)] above) masks its failure to provide any satisfactory explanation for its conduct with respect to the Court of Appeal judgment highlighted in my liability judgment at [29]-[30]. 103 Together, these submissions, made in the face of findings to the contrary in my liability judgment, some of which related to a similar attitude displayed in relation to other court decisions, particularly the Court of Appeal decision, demonstrate a disturbing level of recalcitrance on the part of Hail Creek Coal. It also concurrently demonstrates a number of other features that compound the seriousness of its wrongdoing. To begin at the start, I consider Mr Priestly's conduct was deliberate and undertaken without obtaining any advice. In this respect, insofar as legal advice is concerned, I agree with the CFMEU's contention that there is no evidence that Mr Priestly sought or acted upon legal advice before making his decision to stand Mr Haylett down. Its original contravention was then compounded by its refusal to reconsider it when approached by Mr Haylett's lawyers in early 2014. It was further compounded by its decision, without consulting Mr Haylett, to offset the wages it was paying him in early 2014 against his sick leave and other entitlements. Further still, it was compounded when it ceased paying him any wages in March/April 2014. While this amounted to a compounding of its original contravention, it also constituted a separate contravention in that it was undertaken in breach of Mr Haylett's employment agreement. These two contraventions were then further compounded by Hail Creek Coal's failure to respond to Mr Haylett's lawyers' requests in 2014 and 2015 that it reconsider its position after each success he had in the Supreme Court proceedings, and later the Court of Appeal proceeding. Finally, they were compounded by its repudiation of Mr Haylett's employment agreement, as eventually accepted by him in late February 2016. 104 Apart from compounding its wrongdoing, this history demonstrates a number of other features which must be reflected in the penalties to be imposed on Hail Creek Coal. First, the effects of Hail Creek Coal's contravening conduct, as detailed above, persisted over a long period of time - more than two years. Secondly, there is no indication that Hail Creek Coal accepts that it has contravened the FWA. To the contrary, the submissions above demonstrate that it has no insight into its wrongdoing. Thirdly, there is no evidence of any remorse for its contraventions. Fourthly, there is no evidence of Hail Creek Coal having any concern for the effects of its conduct on Mr Haylett. This makes particularly hollow its claims to be acting out of concern to comply with the CMSH Regulations and Act. As I remarked in my liability judgment, those provisions are directed to the health and safety of mine workers, not to Hail Creek Coal's operational considerations. Apart from the fact that Hail Creek Coal has not previously been subject to penalties for adverse action over the 13 year life of the mine, a factor which I will take into account, it is difficult to identify any aspect of its conduct with respect to these contraventions that does it any credit. 105 In all the circumstances outlined above, I consider there is a need to reflect both specific and general deterrence in this penalty, the latter to ensure that other employers are not tempted to engage in a similar course of conduct. The conduct of Mr Priestly and Hail Creek Coal, as a corporate entity, throughout this matter involves, what I regard as, quite serious and persistent wrongdoing. It was deliberate, conscious and persisted in for a period of more than two years. There is no indication to this day that it has any remorse for its contraventions, nor any appreciation of the nature of its wrongdoing. I have taken all these considerations into account in assessing whether the total penalty of $50,000 is consistent with the totality principle. Having done so, I do not consider any deduction is appropriate.

Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd

At a glance

Court

Decision date

Before

Source

Judgment (25 paragraphs)

Parties

Legislation Cited (12)

Cases Cited (36)

Cited By (2)