Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union

Events on 9 November 2010 at the TRI Project Site 13 On 9 November 2010 Watpac engaged employees to perform construction work on the TRI Project. On that day work was scheduled to commence at 6.30 am. 14 Mr Patrick O'Doherty and Mr Joseph Myles were both organisers of the CFMEU. On 9 November 2010 Mr O'Doherty and Mr Myles entered the site at approximately 6 am and spoke to some of the Watpac employees there. 15 Shortly after Mr O'Doherty and Mr Myles spoke with the employees, some of them left the site and some remained but did not commence work. The employees did not seek the permission of Watpac to behave in this way. 16 The parties agree that: Mr O'Doherty and Mr Myles induced, counselled, procured and organised the Watpac employees at the TRI Project site to not commence work as scheduled on 9 November 2010. Mr Stewart Roberts, a project manager employed by Watpac, said words to Mr O'Doherty to the effect of "What has happened?" Mr O'Doherty replied to the effect: We have put a vote to the workforce that Watpac doesn't have a union ratified EBA in Queensland. This is part of a campaign. Mr Roberts said words to Mr Myles to the effect of "What is going on?" Mr Myles replied to the effect: This is a campaign to get Watpac to change to a union EBA. Queensland doesn't have one, other States do have the union EBA. The actions of Mr O'Doherty and Mr Myles were taken with intent to coerce Watpac or with intent to apply undue pressure to Watpac to agree to accept a building enterprise agreement with the CFMEU. Mr O'Doherty and Mr Myles acted in breach of s 44 of the BCII Act. By the actions of Messrs O'Doherty and Myles, pursuant to s 69(1)(b) of the BCII Act the CFMEU is taken to have acted in breach of s 44 of the BCII Act. The CFMEU has contravened s 44 of the BCII Act.

Events on 9 and 10 November 2010 at the QIMR Project Site 17 On 9 and 10 November 2010 Mr Peter Ong, Mr Andrew Clark and Mr Edward Bland each entered the QIMR Project site. Mr Ong was an organiser of the CEPU. Mr Clark and Mr Bland were organisers of the CFMEU.

9 November 2010 18 On 9 November 2010 Mr Ong, Mr Clark and Mr Bland entered the site at approximately 5.45 am and met with some workers there. Mr Ong spoke with Mr David Fordham, the Watpac site manager, and said words to the following effect: We are having a talk to the boys about Watpac and its [sic] national. 19 Mr Ong, Mr Clark and Mr Bland subsequently addressed a meeting attended by some of the employees of Watpac and of the QIMR Project sub-contractors on the QIMR Project site. During the meeting the following occurred: Mr Ong opened the meeting by introducing himself and the other two officials. Mr Ong said words to the following effect: The reason for the meeting was that we have had enough of Watpac using inferior subbies … We have had enough, it is time to stand up and take action to the likes of Watpac, they are one of the main offenders. By using non EBA subcontractors they are pushing everyone's wages down … Watpac are continuing to use non-union EBA companies like Blue Star Pacific and they are driving the prices down and are bleeding the union EBA companies, forcing them to compete against each other, forcing them to drive the prices down. Mr Clark said words to the following effect: Swiftform was a non-union EBA subcontractor working on the site. Mr Bland addressed the meeting. Mr Ong or Mr Clark said words to the following effect: We motion that we take the day off and go home to our families and take a stand against Watpac. The majority of the employees present raised their hands, and then seconded the motion. Mr Clark then said: Do you wish us to be back tomorrow morning to have a meeting with you all? A few workers shouted "Yes". 20 Work on the project was scheduled to commence at 6 am. 21 Some of the assembled employees of Watpac and of the QIMR Project sub-contractors began to pack up their possessions and left the QIMR Project site. They did not return to the site that day. 22 The parties agree that: Those employees were induced, counselled, procured and organised to leave the QIMR Project site by Messrs Ong, Clark and Bland. The relevant action was taken by Messrs Ong, Clark and Bland to coerce Watpac or with intent to apply undue pressure to Watpac to cease to engage contractors that did not have an enterprise agreement with a union, and to engage contractors that did. The relevant action was intended by Messrs Ong, Clark and Bland to compel and/or force Watpac to cease to engage contractors that did not have an enterprise agreement with a union, and to engage contractors that did. By the actions of Messrs Clark and Bland, pursuant to s 69(1)(b) of the BCII Act the CFMEU is taken to have acted in breach of s 43(1)(b) of the BCII Act. By the actions of Mr Ong pursuant to s 69(1)(b) of the BCII Act the CEPU is taken to have acted in breach of s 43(1)(b) of the BCII Act. The CFMEU and the CEPU each contravened s 43(1)(b) of the BCII Act.

10 November 2010 23 The following day on 10 November 2010 Messrs Ong, Clark and Bland returned to the QIMR Project site. At approximately 6 am they attended a meeting with employees at the site. During the meeting the following occurred: Mr Ong or Mr Clark said words to the following effect: [He was] happy with the efforts of Tuesday 9 November 2010, and the unions were having a meeting with the Federal Manager of Watpac and Mr Phillip Corcoran, the State Manager of Watpac, on Monday. Mr Ong said words to the following effect: We propose that if the meeting doesn't go well we come back Tuesday for a meeting and discuss the outcome of Monday's meeting. Pending on the outcome of Monday's meeting as to whether we take further action … I propose a motion that if the meeting doesn't go well Monday, we take action Tuesday. 24 The parties agree that: During the meeting Mr Ong and Mr Clark proposed to take action which constituted a threat to take action in the form of further industrial action made with the intent to coerce Watpac or with intent to apply undue pressure to Watpac to cease to engage contractors that did not have enterprise agreements with a union and to engage contractors that did. These threats were made by Mr Ong and Mr Clark to compel and/or force Watpac to cease to engage contactors that did not have enterprise agreements with a union and to engage contractors that did. By the actions of Mr Clark, pursuant to s 69(1)(b) of the BCII Act the CFMEU is taken to have acted in breach of s 43(1)(b) of the BCII Act. By the actions of Mr Ong pursuant to s 69(1)(b) of the BCII Act the CEPU is taken to have acted in breach of s 43(1)(b) of the BCII Act. The CFMEU and the CEPU each contravened s 43(1)(b) of the BCII Act.

Events on 9 November 2010 at the Carrara Stadium Project site 25 At approximately 6 am on 9 November 2010 Mr Andrew Temoho and Mr Timothy Jarvis entered the Carrara Stadium Project site. Both Mr Temoho and Mr Jarvis were organisers of the CFMEU. 26 At approximately 6.20 am Mr Temoho and Mr Jarvis attended a meeting of employees at the site, including employees of the Carrara Stadium Project sub-contractors. During the meeting the following occurred: Mr Temoho and Mr Jarvis addressed the meeting and said words to the following effect: ▪ Watpac would no longer utilise the present subcontractors on the Carrara Stadium Project as they were contractors that had union EBAs; and ▪ Watpac wanted to use "grubby subbies". Mr Temoho and Mr Jarvis then put a motion to the employees present to the effect that the workers leave the site. 27 Work was scheduled to commence at the site at 6.30 am that day. 28 At approximately 7.15 am employees of the sub-contractors at the Carrara Stadium Project site began to leave the site and did not return to work as scheduled on that day. 29 The parties agree that: The departure of the workers was induced, counselled, procured and organised by Mr Temoho and Mr Jarvis. The actions taken by Mr Temoho and Mr Jarvis were taken with intent to coerce Watpac or with intent to apply undue pressure to Watpac to agree to engage a person or persons, or not engage a person or persons, as a building contractor. By the actions of Mr Temoho and Mr Jarvis, pursuant to s 69(1)(b) of the BCII Act the CFMEU is taken to have acted in breach of s 43(1)(b) of the BCII Act. The CFMEU contravened s 43(1)(b) of the BCII Act.

Relevant legislation 30 At relevant times s 43(1)(b) and s 44 of the BCII Act read as follows: 43. Coercion in relation to engagement etc. of building employees and building contractors (1) A person (the first person) must not organise or take action, or threaten to organise or take action, with intent to coerce another person (the second person): (a) … (b) to engage, or not engage, a person as a building contractor; or (c) … (d) … (2) … 44. Coercion of persons to make, vary, terminate etc. enterprise agreements etc. (1) A person must not: (a) take or threaten to take any action; or (b) refrain or threaten to refrain from taking any action; with intent to coerce another person, or with intent to apply undue pressure to another person to agree, or not to agree: (c) to make, vary or terminate, or extend the nominal expiry date of, a building enterprise agreement; or (d) to approve any of the things mentioned in paragraph (c). Note: Grade A civil penalty. (2) Subsection (1) does not apply to action that is protected industrial action (as affected by Part 3 of Chapter 5 of this Act) (3) An employer must not coerce, or attempt to coerce, an employee of the employer in relation to who is to be, or is not to be, the employee's bargaining representative. Note: Grade A civil penalty. (4) An employer must not apply, or attempt to apply, undue pressure to an employee in relation to who is to be, or is not to be, the employee's bargaining representative. Note: Grade A civil penalty. (5) To the extent that section 343 of the FW Act relates to: (a) the making, varying or terminating of an enterprise agreement; or (b) the appointment, or termination of employment, of a bargaining representative for an enterprise agreement; that section does not apply if the agreement is a building enterprise agreement. 31 It is not in dispute that, at relevant times, s 69 of the BCII Act held the respondents responsible for the conduct of their members. Materially s 69 provided: 69 Building association responsible for conduct of members etc. (1) For the purposes of this Act, the following conduct in relation to a building association is taken to be conduct of the building association: (a) conduct of the committee of management of the association; (b) conduct of an officer or agent of the association acting in that capacity; (c) conduct of a member, or group of members, of the association where the conduct is authorised by: (i) the rules of the association; or (ii) the committee of management of the association; or (iii) an officer or agent of the association acting in that capacity; (d) conduct of a member of the association, who performs the function of dealing with an employer on behalf of the member and other members of the association, acting in that capacity. (2) Paragraphs (1)(c) and (d) do not apply if: (a) a committee of management of the building association; or (b) a person authorised by the committee; or (c) an officer of the industrial association; has taken reasonable steps to prevent the action. (3) In this section: officer, in relation to a building association, includes: (a) a delegate or other representative of the association; and (b) an employee of the association.

Consideration 32 As the Director properly submits, there is no rigid catalogue of matters for the Court to take into consideration in assessing penalties. However it is uncontentious that the purpose to be served by the imposition of penalties is at least threefold: punishment, which must be proportionate to the offence and in accordance with prevailing standards; deterrence, both personal (assessing the risk of re-offending) and general (a deterrent to others who might be likely to offend); and rehabilitation. (Ponzio at [93]-[94]). 33 Appropriate factors to which the Court may have regard include: 1. The nature and extent of the conduct which led to the breaches. 2. The circumstances in which that relevant conduct took place. 3. The nature and extent of any loss or damage sustained as a result of the breaches. 4. Whether there had been similar previous conduct by the respondent. 5. Whether or not the breaches were deliberate. 6. Whether the respondent had exhibited contrition. 7. Whether the respondent had co-operated with the enforcement authority. 8. The need for specific and general deterrence. 34 With these points in mind, and turning now to the conduct the subject of the Director's application, I make the following observations. 1. In this case there is no dispute in respect of the relevant conduct of the respondents. In particular I note that: (a) both respondents are prominent industrial associations in the building and construction industries; (b) the relevant conduct caused cessation of work on the sites over two days. In itself I do not consider this a lengthy period of disruption, however it appeared to be a calculated and co-ordinated campaign against Watpac over those two days. That this was so is clear from the facts that the relevant conduct of the respondents: (i) was of a similar nature; (ii) commenced at approximately the same time on the same dates; (iii) continued for approximately the same time; (iv) was organised by the respondents' officers; and (v) related to the same employer, that is Watpac; (c) it is clear that the purpose of the industrial action was to coerce Watpac into accepting the respondents' industrial demands concerning enterprise bargaining agreements and engagement of contractors. 2. It is not in dispute that the three projects in respect of which the respondents' conduct took place were major building projects in south east Queensland, each valued at more than $100 million (indeed the TRI Project is apparently valued at close to $200 million). Each project also engaged large numbers of workers on any one day of construction - the TRI Project up to 200 workers, the QIMR Project up to 100 workers, and the Carrara Stadium Project up to 100 workers. 3. No conclusive evidence is before the Court as to the nature and extent of any loss or damage sustained by Watpac (or anyone else) as a result of the respondents' conduct. I note, however, that the respondents concede that the effect on Watpac was not trivial as the results of the respondents' conduct was to cause an unidentified number of workers to leave the projects on two days and a threat that they might leave on another day. 4. While the Court should be cautious in giving undue weight in assessing penalty to similar prior conduct, that penalties previously imposed may have been insufficient to deter the relevant respondent from engaging in further conduct is relevant to the form the penalty should take in the circumstances before the Court (Veen v R (No 2) (1988) 164 CLR 465). In this case both respondents have a history of engaging in unlawful conduct similar to that in question. On the material before the Court the CFMEU appears a worse offender than the CEPU, in that the CFMEU has been penalised approximately $1.2 million of members' money (in addition to penalties personally imposed on individual union officials) in respect of more than 40 contraventions of laws relating specifically to coercive conduct. This may be compared with the CEPU, which has been penalised approximately $25,000 (in addition to penalties personally imposed on individual union officials) in respect of three contraventions of laws relating specifically to coercive conduct. To that extent, I accept the Director's submission that the extent of prior relevant conduct of the CFMEU in particular is such that the Court should order a penalty acting as a specific deterrent to future similar conduct. 5. I am satisfied that the conduct of both respondents was deliberate, and that both respondents were aware of the potential legal consequences of their conduct. 6. Neither respondent has demonstrated any contrition for their conduct. 7. Notwithstanding the absence of contrition however, both respondents have co-operated with the Director, including reaching agreement on relevant facts and penalties. This is an important factor for the Court to take into account in assessing penalty. 8. I am satisfied that the conduct of both respondents in this case warrants penalties that meet the objective of general deterrence. I consider the following observations of Tracey J in Alfred v Construction, Forestry, Mining and Energy Union [2011] FCA 556 equally applicable to the case before me: [89] The principal object of the BCII Act is "to provide an improved workplace relations framework for building work to ensure that building work is carried out fairly, efficiently and productively for the benefit of all building industry participants and for the benefit of the Australian economy as a whole": see s 3(1). The BCII Act aims to achieve this object through various means, including, relevantly: Promoting respect for the rule of law (s 3(2)(b)); Ensuring respect for the rights of building industry participants (s 3(2)(c)); and Ensuring that building industry participants are accountable for their unlawful conduct (s 3(2)(d)). [90] In order to secure these objectives it is necessary that contraventions of the BCII Act should be visited with penalties which will serve to deter others from similar misconduct. Penalties must be imposed at a meaningful level if they are to serve as a general deterrent to others who may be disposed to engage in proscribed conduct: see, for example, Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd (No 2) [2007] FCA 11 at [66]; Finance Sector Union of Australia v Commonwealth Bank of Australia [2005] FCA 1847; (2005) 147 IR 462 at [41]. 35 Further, I consider that the facts demonstrate the need to impose penalties which meet the objective of specific deterrence, particularly in relation to the CFMEU whose organisers appear to have shown a somewhat cavalier disregard both of the need to comply with the law and of penalties which have been previously imposed on the union for similar conduct.

Conclusion 36 Conduct in the workplace constituting coercion as admitted by the respondents is a serious matter. In my view such conduct warrants a penalty adequate to act as a deterrent for such future conduct. 37 However, I note that the respondents have admitted the relevant contraventions and have co-operated with the Director, thus saving the Director the need to take the matter to contested trial. 38 Further, I note that it is not in dispute that a number of contraventions of the BCII Act have taken place, and to that extent it is appropriate to apply the totality principle as explained by the High Court in the criminal context in Johnson v R (2004) 205 ALR 346; [2004] HCA 15. The penalties proposed by the parties are such as to have regard to the entirety of the conduct in question. 39 In relation to the conduct of the CFMEU, the penalty proposed - namely $99,000 - is at the upper end of the range for a contravention of the BCII Act. In my view, given the CFMEU's history of similar conduct and their involvement in the contraventions the subject of this proceeding, a penalty in this amount is appropriate. I consider further that the penalty proposed in the lesser amount of $20,000 for the CEPU is similarly appropriate given their comparatively shorter history of contraventions and their smaller role in events the subject of the application before me. 40 Accordingly, in the circumstances I am prepared to make the orders proposed by the parties. I certify that the preceding forty (40) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Collier.