Cozadinos v Construction, Forestry, Mining and Energy Union

1. A penalty of $20,000 is imposed on the first respondent for contravening s 38 of the BCII Act.
2. A penalty of $2,000 is imposed on the third respondent for contravening s 38 of the BCII Act.
3. A penalty of $20,000 is imposed on the first respondent for contravening s 43 of the BCII Act.
4. A penalty of $3,000 is imposed on the third respondent for contravening s 43 of the BCII Act.
5. The penalties imposed on the respondents are to be paid into the Consolidated Revenue Fund on or before 9 March 2010.
6. There is no order as to costs. Note:Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court's website.

AND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

REASONS FOR JUDGMENT 1 The Construction, Forestry, Mining and Energy Union ("the Union") and Mr Robert Anthony Mates have each admitted contraventions of ss 38 and 43 of the Building and Construction Industry Improvement Act 2005 (Cth) ("the BCII Act"). The contraventions arose from conduct which occurred on 8 March 2007. The applicant discontinued the proceeding in relation to the second respondent, Mr Danny Berardi. This judgment concerns the penalties to be imposed for the contraventions of the BCII Act admitted by the Union and Mr Mates. 2 This proceeding was commenced on 20 February 2009. On 30 October 2009, the parties filed a statement of agreed facts which included admissions of the contraventions by the Union and Mr Mates. The Court conducted a penalty hearing on 5 February 2010 to determine the appropriate penalties to impose on the Union and Mr Mates.

AGREED FACTS 3 The applicant, Michelle Cozadinos, is an Australian Building and Construction Commission inspector pursuant to s 57 of the BCII Act and eligible to commence this proceeding pursuant to s 49(6) of the BCII Act. 4 The Union is an organisation registered pursuant to the Workplace Relations Act 1996 (Cth) ("the WR Act") and the Fair Work (Registered Organisations) Act 2009 (Cth). The Union is also a "building association" and "industrial association" within the meaning of s 4 of the BCII Act and an "organisation" for the purposes of the BCII Act. 5 At all relevant times, Mr Mates was employed as an organiser by the Union and is a member of the Union. He also a "building industry participant" and an "officer" of the Union within the meaning of ss 4 and 69(3) of the BCII Act at all relevant times. 6 Adco Constructions (Victoria) Pty Ltd ("Adco") was responsible for refurbishment and construction works at Caulfield Grammar School ("the Site"). Adco in turn engaged Gladwyn Plumbing Pty Ltd ("Gladwyn"), Derry Formwork Pty Ltd ("Derry") and Skylift Cranes (Aust) Ltd ("Skylift") to perform building works at the Site. Adco is a constitutional corporation within the meaning of s 4 of the BCII Act. Adco, Gladwyn, Derry and Skylift were each "building employers" and "building industry participants" within the meaning of s 4 of the BCII Act. The work performed by Adco, Gladwyn, Derry and Skylift was "building work" within the meaning of s 5 of the BCII Act. 7 Mr Leigh Scott was an Adco employee and a Union delegate for the Site. At all material times, Mr Scott was a "building employee" within the meaning of s 4 of the BCII Act. Mr Scott was also elected as the Site's health and safety representative pursuant to the Occupational Health and Safety Act 2004 (Vic). Mr Scott raised health and safety concerns with Adco from time to time. 8 Adco terminated Mr Scott's employment at approximately 3.00 pm on 7 March 2007. The statement of agreed facts filed by the parties did not disclose a reason for the termination of Mr Scott's employment.

The events of 8 March 2007 9 Messrs Mates and Berardi entered the Site with Mr Gerry Ayers, a Union health and safety officer, at approximately 10.40 am on 8 March 2007. They organised and attended a meeting of the Gladwyn, Derry and Skylift employees on the Site which began at approximately 11.00 am ("the 8 March 2007 meeting"). The termination of Mr Scott's employment was discussed at the meeting. 10 Shortly after the commencement of the meeting, at 11.10 am, Messrs Mates, Berardi and Ayers had a discussion with Adco's site manager, Mr Steven Greer. During that conversation, Mr Mates asserted that the employees of Gladwyn, Derry and Skylift were concerned by the termination of Mr Scott's employment. Mr Mates also stated that the employees on the Site demanded that Mr Scott be reinstated and expressed his belief that if Mr Scott was not reinstated the employees would go home. Mr Mates said to Mr Greer that he was "shutting down the Site until [Mr] Scott is reinstated" and the "guys are going home". Messrs Mates, Berardi and Ayers then returned to the meeting of Gladwyn, Derry and Skylift employees. 11 At around 11.30 am, the employees of Gladwyn, Derry and Skylift left the Site and did not perform any work on the Site for the rest of the day.

THE CONTRAVENTIONS 12 The respondents admitted the following contraventions of the BCII Act occurred as a result of the events of 8 March 2007: · Mr Mates contravened s 38 of the BCII Act by engaging in unlawful industrial action; and · Mr Mates contravened s 43 of the BCII Act by taking action intended to coerce Adco into employing Mr Scott and negate Adco's choice as to whether or not to employ Mr Scott. 13 The respondents also admit that as a result of s 69 of the BCII Act: · the Union contravened s 38 of the BCII Act by engaging in unlawful industrial action; and · the Union contravened s 43 of the BCII Act by taking action intended to coerce Adco into employing Mr Scott and negate Adco's choice as to whether or not to employ Mr Scott. 14 Sections 38 and 43 of the BCII Act are both Grade A civil penalty provisions. The maximum penalty for a contravention of a Grade A civil penalty provision by the Union is 1,000 penalty units ($110,000). The maximum penalty for a contravention by Mr Mates is 200 penalty units ($22,000); see s 49(2)(a) of the BCII Act and s 4AA of the Crimes Act 1914 (Cth).

SUBMISSIONS ON PENALTY 15 The applicant submitted that the appropriate penalties are $25,000 for each contravention by the Union ($50,000 in total) and $7,500 for each contravention by Mr Mates ($15,000 in total). 16 The respondents contended that "minimal penalties" were appropriate. Counsel for the respondents suggested that the range of appropriate penalties were $7,500-$12,000 in relation to the contraventions by the Union and $5,000-$10,000 in relation to Mr Mates. The respondents also submitted that a penalty should be imposed in respect of only one contravention by each respondent as "the impugned conduct is not qualitative[ly] different albeit amounting to two offences".

RELEVANT CONSIDERATIONS IN DETERMINING PENALTIES 17 The relevant considerations in assessing an appropriate penalty for breaches of the BCII Act have been extensively discussed by this Court; see eg, Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61; [2008] FCA 1426 at [40] per Tracey J; Temple v Powell (2008) 169 FCR 169 at [56]-[78] per Dowsett J and Cahill v Construction, Forestry, Mining and Energy Union (No 4) [2009] FCA 1040 at [9]-[10] per Kenny J.

Nature and extent of the conduct 18 The contraventions of the BCII Act by Mr Mates and the Union arose from a brief meeting followed by a stoppage of relatively limited duration. Mr Mates and, through him, the Union also breached the BCII Act by engaging in the unlawful industrial action with the intent to coerce Adco to reinstate Mr Scott. These contraventions were the result of deliberate acts in breach of the BCII Act.

Circumstances in which the conduct took place 19 The respondents contended that occupational health and safety concerns were a mitigating factor in the contraventions. 20 The statement of agreed facts at [9] observes that: in the period prior to 7 March 2007, a number of health and safety issues had arisen on the Site particularly relating to the interface between the construction work on the Site and the school's operations, and that from time to time Scott raised those issues with Adco. The Applicant does not contest this. It is also clear from the agreed facts that the termination of Mr Scott's employment was discussed at the 8 March 2007 meeting. The respondents sought to rely on these facts to support an inference that the dismissal of Mr Scott resulted in concern on the part of the employees who attended the 8 March 2007 meeting and that "the concern of those employees related to [Mr] Scott raising with his employer the range of safety issues". 21 The difficulty with the respondents' argument is that the statement of agreed facts does not indicate that the employees were concerned by the termination of Mr Scott's employment. Nor is there any indication that the Gladwyn, Derry and Skylift employees perceived the Site to be unsafe. The statement of agreed facts simply discloses that Mr Scott's employment was discussed at the 8 March 2007 meeting and that Mr Mates asserted to Mr Greer that the Site's employees were concerned. This does not support the inferences pressed by the respondents. 22 Importantly, the respondents did not seek to assert that Mr Mates was motivated by occupational health and safety concerns when he engaged in the contraventions of ss 38 and 43 of the BCII Act. Such an inference could not have been drawn on the basis of the evidence before the Court.

Extent of any loss or damage 23 There is no evidence before the Court to indicate the financial impact of the contravention on Adco, Gladwyn, Derry or Skylift. The absence of evidence to establish a financial loss or damage is neither a mitigating nor aggravating factor in assessing an appropriate penalty.

Similar previous conduct 24 The applicant's submissions relied on a Schedule said to show the prior contraventions of ss 38 and 43 of the BCII Act by the Union and two previous contraventions of s 43 of the BCII Act by Mr Mates. Some of the contraventions by the Union and Mr Mates were recorded after the relevant date, 8 March 2007, but concerned conduct engaged in prior to 8 March 2007. Similarly, not all the contraventions were committed by officers or members attached to the Victorian branch of the Union. The applicant also sought to rely on breaches by the Union of provisions of the WR Act said to demonstrate similar previous coercive conduct or participation in unlawful industrial action. 25 The prior contraventions by Mr Mates of the BCII Act are contraventions of s 43 of the BCII Act arising out of conduct on: · 15, 17 and 21 February 2006; Cahill v Construction, Forestry, Mining and Energy Union (No 3) [2009] FCA 52 (contraventions recorded 5 February 2009); and · 31 July 2006; Williams v Construction, Forestry, Mining and Energy Union [2009] FCA 223 (contraventions recorded 13 March 2009). 26 The applicant relied on eight cases recording prior contraventions of s 38 of the BCII Act by the Union where the conduct in question occurred prior to 8 March 2007. These were summarised in Schedule 1 of the applicant's submissions on penalty. In all but one of the cases, the contraventions were recorded after 8 March 2007. 27 The applicant also sought to rely on three cases recording contraventions by the Union of s 38 of the BCII Act where the conduct in question and the recording of the contravention both occurred after 8 March 2007; Cozadinos v CFMEU [2008] FMCA 1591; Cruse v Construction, Forestry, Mining and Energy Union [2009] FCA 787 and Gregor v CFMEU [2009] FMCA 1266. 28 In addition to the contraventions of s 38 of the BCII Act, the applicant pointed to four cases which she said recorded contraventions of similar unlawful industrial action provisions of the WR Act by the Union where the conduct in question occurred prior to 8 March 2007; Ponzio v B & P Caelli Construction Pty Ltd (2007) 158 FCR 543; Cahill v Constructions, Forestry, Mining and Energy Union [2008] FCA 495; Temple v Powell and Cruse v Multiplex Limited (2008) 172 FCR 279. 29 The applicant relied on four cases recording prior contraventions of s 43 of the BCII Act by the Union, where the conduct in question occurred prior to 8 March 2007; Stuart‑Mahoney; Cahill v CFMEU (No 3); Williams v CFMEU and Draffin v Construction, Forestry, Mining and Energy Union [2009] FCA 243. These contraventions of s 43 of the BCII Act by the Union were recorded after 8 March 2007. 30 The applicant, in Schedule 1 of her submissions, also referred to eight cases recording breaches of similar coercive conduct provisions of the WR Act by the Union. The conduct in question occurred prior to 8 March 2007 but in three instances the contraventions were not recorded until after 8 March 2007. 31 The Full Court in Draffin v Construction, Forestry, Mining and Energy Union [2009] FCAFC 120 ("Draffin")held that contraventions which arose prior to the relevant date, but were not recorded until a later stage were relevant in assessing similar previous conduct by a respondent. As Goldberg, Jacobson and Tracey JJ stated at [92]: Although, in each of the cases, the impugned conduct had occurred wholly, or in substantial part, prior to the presently relevant events, the penalty hearings in most of them post-dated November 2005. We cannot therefore, and do not, proceed on the basis that, when the Union committed the present contraventions, it did so in the knowledge that Courts had considered all similar earlier conduct by it to have contravened industrial legislation. That prior similar conduct, however, does have relevance to our present task as indicating a propensity, on the part of the Union, to engage in proscribed conduct. The weight to be attached to this consideration will not be as great where the prior similar conduct had not led to the imposition of a penalty before November 2005: cf R v McInerney (1986) 42 SASR 111 at 113 and 124. In examining the previous conduct by the Union, the Full Court in Draffin considered both contraventions of s 43 of the BCII Act and contraventions of provisions of the WR Act which dealt with coercive conduct; see Draffin at [90]-[91]. 32 Previous breaches of ss 38 and 43 of the BCII Act and similar legislative provisions are relevant to show whether the present contraventions are evidence of "a calculated indifference" to legislation prohibiting coercive conduct and unlawful industrial action; Draffin at [90] citing Ponzio at [110] per Lander J. 33 Contraventions within a different branch of the Union are relevant to determining an appropriate penalty, however they are to be given less weight than contraventions within the branch in question; Cahill v CFMEU (No 4) at [65]-[69] per Kenny J and see also Draffin at [72]. 34 Most of the contraventions relied on by the applicant were not recorded prior to 8 March 2007. However, contraventions of ss 38 or 43 of the BCII Act by the Union or Mr Mates are relevant to the determination of an appropriate penalty where the relevant conduct occurred prior to that 8 March 2007. Similarly, the breaches by the Union of the coercive conduct or unlawful industrial action provisions in the WR Act which resulted from conduct prior to 8 March 2007 will also be of relevance. In both cases the contraventions are to be given less weight than any contraventions of ss 38 or 43 of the BCII Act which were recorded prior to 8 March 2007. 35 Accordingly, the breaches relied on by the applicant are relevant in assessing the appropriate penalties to be imposed on Mr Mates and the Union. The previous breaches indicate that the current contraventions of the BCII Act are not an aberration, but suggest a relaxed attitude towards legislative compliance with the BCII Act on the part of the Union, and to a lesser extent, Mr Mates. To an even lesser extent, the same may be said about contraventions in which the conduct occurred after 8 March 2007 as a matter going to deterrence only.

Involvement of Senior Management 36 There is no evidence to indicate that senior management of the Union were involved in the contraventions.

Size of the respondent 37 The Union is a large national organisation. The applicant in her submissions contended that the Union has sufficient resources to enable it to pay a significant penalty. There was no specific evidence before the Court to support the applicant's statements regarding the Union's financial position, but the Court has no reason to believe that the Union is unable to meet the penalties which are to be imposed.

Contrition and cooperation 38 The Union and Mr Mates have demonstrated a degree of contrition by admitting the contraventions and have cooperated in the preparation of a statement of agreed facts. The applicant acknowledged that this reduced the time and costs expended by the Court and the parties.

Deterrence 39 There is a need for both general and specific deterrence. The penalties imposed on the respondents must be sufficient to deter others from engaging in similar conduct. Specific deterrence is particularly relevant given the similar previous conduct of both the Union and Mr Mates.

PENALTIES 40 Both the Union and Mr Mates have admitted two contraventions of the BCII Act. Each contravention of the BCII Act must attract a meaningful penalty. However where contraventions arise out of a single course of conduct it may be appropriate for the penalties imposed to be concurrent rather than consecutive; see eg, Construction, Forestry, Mining and Energy Union v Williams [2009] FCAFC 171 at [23]-[25], [31] per Moore, Middleton and Gordon JJ. 41 As the applicant conceded, the contraventions by Mr Mates and the Union arose from a single course of conduct on 8 March 2007. That course of conduct included Mr Mates's participation in unlawful industrial action and his participation in that action in an attempt to coerce Adco to reinstate Mr Scott's employment. In determining the appropriate penalty to impose, it is appropriate to impose fines which recognise that the contraventions arose from a single course of conduct. The practical effect is that the maximum total penalties which can be imposed for the contraventions by the Union and Mr Mates are therefore $110,000 for the Union and $22,000 for Mr Mates; CFMEU v Williams at [31]. 42 Finally, the totality principle serves as a mechanism to ensure that "the punishment imposed (considered as a whole) is a proper reflection of the contravening conduct"; see CFMEU v Williams at [34]. 43 In light of the factors discussed above, I consider that the aggregate penalty to impose for the contraventions of the BCII Act by the Union is $40,000. This will comprise a $20,000 penalty for each breach of the BCII Act by the Union. 44 In relation to Mr Mates, I consider that the aggregate penalty should be $5,000. Mr Mates has engaged in similar previous conduct only in relation to s 43 of the BCII Act. Accordingly, I consider that the appropriate penalties are $2,000 for the contravention of s 38 of the BCII Act and $3,000 for the contravention of s 43 of the BCII Act by Mr Mates.

COSTS 45 Neither party sought their costs in respect of the proceeding. It is appropriate that there is no order as to costs. I certify that the preceding forty-five (45) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.