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[2007] FCA 1634
Federal Court of Australia
2007-10-30
Branson J
Original judgment source is linked above.
INTRODUCTION 1 On 6 September 2007 I published reasons for judgment in this matter: CPSU, the Community and Public Sector Union v Commonwealth of Australia [2007] FCA 1397. I concluded that the circulation of certain memoranda of advice by the Department of Employment and Workplace Relation ('the DEWR Advice') resulted in contravention by the Commonwealth of s 298K(1) of the Workplace Relations Act 1996 (Cth) ('the WR Act'). I also concluded that by denying the second and fifth applicants approval to access leave on 15 November 2005 because they proposed to attend the Day of Protest organised to demonstrate opposition to proposed amendments to the WR Act, the Commonwealth breached two industrial instruments, namely the Australian Customs Service Certified Agreement 2004-2007 ('the ACS Agreement') and the Stay Here and Grow - DEST Certified Agreement 2002-2005 ('the DEST Agreement'). 2 The proceeding was stood over to a date to be fixed for the purpose of making orders giving effect to my reasons for judgment and orders as to the penalties, if any, appropriate to be imposed. The parties were directed to provide to my Associate, if possible, an agreed minute as to the orders to be made (other than as to penalties) and written submissions on the order or orders, if any, as to penalty which they respectively contended should be made. The parties were invited to indicate in their respective written submissions if they sought a further oral hearing. Neither party so indicated.
DECLARATIONS 3 The parties provided my Associate with an agreed minute as to declarations to be made. Subject to deleting from each of the draft declarations a statement to the effect that the Commonwealth is liable to have a penalty or penalties imposed on it, I will make those declarations because of the parties' agreement that they are appropriate to be made having regard to my reasons for judgment of 6 September 2007 (see Commonwealth of Australia v Evans (2004) 81 ALD 402 at [88]). Notwithstanding the parties' agreement I see no utility in making a declaration as to the plain effect of the WR Act.
Penalty - the DEWR Memorandum 4 The first issue to be determined concerning any penalty or penalties to be imposed in respect of the issuing of the DEWR Advice is whether the Commonwealth is to be penalised for a single or for multiple breaches of s 298K(1) of the WR Act. 5 The question of whether a single act which has an impact on a number of employees in a manner proscribed by s 298K(1) of the WR Act results in one contravention or in a contravention in respect of each affected employee is answered by authority that I should follow; the number of contraventions equals the number of affected employees (see particularly Maritime Union of Australia v Geraldton Port Authority (No 2) (2000) 94 IR 404 at [41] and CPSU, the Community and Public Sector Union v Telstra Corporation Limited (2001) 108 IR 228 at [3]). 6 The critical issue for my determination in this matter is not the number of actual contraventions of the WR Act but rather whether the case pleaded by the applicants, being the case which the Commonwealth was required to answer, was of one or multiple breaches. 7 By the amended application the applicants claimed: '1. A declaration that the respondent breached s 298K(1) of the WR Act in that it subjected employees to a disadvantage in their employment for a reason prohibited under s 298L(1)(a) by the issuing of the DEWR memorandum dated 9 November 2005 which is Schedule 'A' to the Statement of Claim. … 3. An order that the respondent pay a penalty with respect to the conduct of the respondent in issuing the DEWR memorandum dated 9 November 2005.' (emphasis added) 8 In my view, the above claims, on a fair reading, sought the imposition of a single penalty on the Commonwealth for its conduct in issuing the DEWR Advice. This reading of the claims finds support in other claims made by the amended application of which the following is an example: '5. An order that the respondent pay a penalty with respect to the determination by the ACS that employees would not be permitted to take flex leave if the purpose of such leave was to attend the Day of Protest.' (emphasis added) 9 Nothing in the language of the Further Amended Statement of Claim was apt to place the Commonwealth on notice that, notwithstanding the language of the amended application, the applicants alleged that, by issuing the DEWR Advice, the Commonwealth had committed numerous contraventions of s 298K(1) of the WR Act. Nor did this become clear during the course of the hearing. 10 In its written submissions on penalty the CPSU submitted, for the first time, that as there were at the relevant time 38,418 CPSU members within the APS whose employment was affected by the DEWR memorandum, the Commonwealth committed 38,418 contraventions of the WR Act by issuing the memorandum. It submitted: '2. It is not unusual to use the singular term when referring to a composite number of penalties arising from a single act. Where multiple penalties are applied in respect of a single act which gives rise to a breach of the WRA, it is common for the orders made by the Court, and the case law, to refer to the penalties imposed as a composite "penalty". In such cases an order may be made for a single penalty, but the maximum available penalty is determined by the number of persons whose position was relevantly altered giving rise to individual breaches. 3. See for example Commonwealth Bank of Australia v Finance Sector Union of Australia at first instance and on appeal where a single penalty was imposed by Merkel J and apportioned between the breaches. The parties, the primary Judge, and Full Court referred consistently to this composite penalty as a single penalty. 4. Accordingly, the use of the singular word "penalty" may properly be taken to refer to a composite penalty arising from a number of breaches which arise from a single act. In the present case the [Further Amended Statement of Claim] permits such an approach.' 11 Nothing in the reasons for judgment in Commonwealth Bank of Australia v Finance Sector Union of Australia (2007) 157 FCR 329 at first instance or on appeal suggests that the issue of the nature of the claim in respect of penalty that the respondent was required to meet arose for determination in that case. Nor, at least before the Full Court, was any significance ascribed to the use of the word 'penalty'as opposed to 'penalties'. 12 In my view it would be unfair to the Commonwealth to allow the applicants now to depart from what, in my view, they claimed by the amended application; namely an order that the Commonwealth pay a single penalty in respect of the issuing of the DEWR Advice. I accept the submission of the Commonwealth that had it been aware that the applicants sought the imposition of a penalty in respect of each CPSU member within the APS it would have tested the applicants' evidence of the extent of CPSU membership. It may be that in this circumstance the Commonwealth would also have investigated more thoroughly the impact of the DEWR Advice on individual APS employees or different categories of APS employees within the various Departments and agencies. 13 The maximum penalty for a body corporate for a contravention of Part XA of the WR Act is 300 penalty units (s 298U(a)(i) of the WR Act). This translates to $33,000 (s 4AA(1) of the Crimes Act 1914 (Cth)). 14 In Commonwealth Bank of Australia v Finance Sector Union of Australia at [181] I observed: "The authorities accept that the matters to be taken into account in determining whether particular conduct under the Act calls for the imposition of a penalty, and assuming that it does, the amount of the penalty, include: (a) the circumstances in which the relevant conduct took place (including whether the conduct was undertaken in deliberate defiance or disregard of the Act); (b) whether the respondent has previously been found to have engaged in conduct in contravention of Pt XA of the Act; (c) where more than one contravention of Pt XA is involved, whether the various contraventions are properly seen as distinct or whether they arise out of the one course of conduct; (d) the consequences of the conduct found to be in contravention of Pt XA of the Act; (e) the need, in the circumstances, for the protection of industrial freedom of association; and (f) the need, in the circumstances, for deterrence. (Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) (1999) 94 IR 231 at [8]; Australian Workers Union v Johnson Matthey (Aust) Ltd [2000] FCA 728 at [5]; Employment Advocate v National Union of Workers (2000) 99 IR 376 at 377 at [5]; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v DMG Industries Pty Ltd (2000) 102 IR 175 at [10]; Australian Nursing Federation v Alcheringa Hostel Inc (2004) 136 FCR 530 at [44]; and Alfred v Walter Construction Group Ltd [2005] FCA 497 at [10].)' 15 I accept the submission of the CPSU that this was a serious contravention of s 298K(1) of the WR Act because the Department involved is that responsible for advising other Departments and Commonwealth agencies with respect to their obligations under the WR Act. It was also a serious contravention because of the number of employees, and particularly CPSU employees, whose positions it affected. On the other hand, it appears that the disadvantage suffered by CPSU employees was transient in nature and may have been of limited, if any, significance to many of them. 16 I take into account that the conduct in question was not that of a single DEWR officer who acted alone but rather the outcome of significant process of consultation involving senior officers of DEWR, apparently including the Secretary. Additionally I note that each of Ms Chaudhury and Mr Maynard gave evidence that indicated an awareness at the time on her or his part that it would have been wrong to issue advice that leave should not be granted to a Commonwealth employee if the leave was sought for the purpose of attending the Day of Protest. Yet, notwithstanding the considerable evidence tending to show that the DEWR memorandum was being understood to so advise, no senior officers of DEWR took steps to ascertain the true position or to have the DEWR memorandum reviewed by the Australian Government Solicitor ('AGS'). Indeed, when Mr O'Sullivan received advice from AGS, apparently with respect to the policy to be adopted when considering leave requests from DEWR staff, neither he, nor it seems, any other DEWR officer took steps to convey that advice to the Department and agencies to which the DEWR Advice had been issued. 17 I conclude that in all the circumstances a penalty that approaches the maximum penalty for a single contravention is appropriate. 18 A penalty of $30,000 will be imposed on the Commonwealth for its contravention of s 298K(1) of the WR Act.
Penalty - Breaches of Certified Agreement 19 The maximum penalty for each breach of a Certified Agreement was $10,000 as the breach did not continue for more than one day (s 178(4)(a)(iib) of the WR Act). 20 The CPSU accepts that the main reason for these breaches was the issuing of the DEWR Advice and the fact that the Departments felt obliged to comply with the memorandum. 21 I am satisfied in each case that the breach occurred because of the DEWR Advice. In the circumstances I do not consider it appropriate to impose a penalty additional to that imposed in respect of the DEWR Advice.
Application of Penalty 22 Section 356 of the WR Act provides: 'A court that imposes a monetary penalty under this Act (other than a penalty for an offence) may order that the penalty, or a part of the penalty, be paid: (a) into the Consolidated Revenue Fund; or (b) to a particular organisation or person.' 23 Orders are commonly made that a penalty imposed under the WR Act be paid to an industrial organisation where that organisation instituted the proceeding in question to protect the legitimate interests of its individual members (see CPSU v Telstra at [20]-[28]). In this case the Commonwealth, understandably in the circumstances, did not seek an order that any penalty imposed be paid into the Consolidated Revenue Fund. 24 It will be ordered that the penalty imposed be paid to the CPSU. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.
Counsel for the Respondent: Mr S D Robb QC and Mr R F Crow
Solicitor for the Respondent: Australian Government Solicitor
CPSU, The Community and Public Sector Union
Commonwealth of Australia
(2007) 157 FCR 329
(2001) 108 IR 228
(2000) 94 IR 404
(1999) 94 IR 231
(2000) 99 IR 376
(2000) 102 IR 175
(2004) 136 FCR 530