REASONS FOR JUDGMENT
(REVISED FROM TRANSCRIPT)
1 In March 2012, Grocon Constructors Queensland Pty Ltd (Grocon), was the managing contractor of a Queensland Government Housing project at South Brisbane known as the Common Ground Project. That project was an initiative of the State Government to the end of providing housing for those in the community who had experienced long-term homelessness. Grocon was, at that time, also the managing contractor at two other sites in south-east Queensland, one known as the SOUL site located in Surfers Paradise on the Gold Coast, the other in the Brisbane central business district, the ATO Tower site.
2 In February and March 2012, the respondent union, the Construction, Forestry, Mining and Energy Union (CFMEU), and Grocon were engaged in bargaining with respect to a proposed enterprise agreement. That proposed enterprise agreement was to replace an earlier agreement, the Grocon Constructors Queensland Pty Ltd and CFMEU Union Collective Agreement 2008 to 2011 (the Grocon agreement). The Grocon agreement had passed its nominal expiry date of 31 March 2011. The objective of negotiations was the coverage by the proposed agreement of Grocon's employees at each of the Common Ground project site, the ATO site and the SOUL site. The proposed agreement was one which, if made, would become a building enterprise agreement in terms of the Building and Construction Industry Improvement Act 2005 (Cth) (BCII Act).
3 On 29 February 2012, the Australian Electoral Commission conducted a protected action ballot. The result of that ballot was the authorisation of indefinite protected industrial action by employees of Grocon. Such protected industrial action occurred between 13 March 2012 and 23 March 2012 at the Common Ground project site and also at the other two sites mentioned. That action was taken in support of the negotiations mentioned in respect of the proposed agreement. It took the form of employees engaging in strike action.
4 Between 13 March 2012 and 21 March 2012, the CFMEU also engaged in other activities in relation to the Common Ground Project site. Those activities did not constitute protected industrial action. The individual respondents, who were at the time either officers of the CFMEU or, in one case, a CFMEU delegate, were the persons who, on behalf of the CFMEU, engaged in that non-protected industrial action.
5 That non-protected industrial action may be summarised in this way:
(a) the parking of vehicles in a work zone on Hope Street to obstruct access to the Common Ground Project site;
(b) the placing of a CFMEU van on Hope Street and gathering around a barbecue under an awning attached to that van such that there was a practical impediment to entry to the site; and
(c) upsetting, intimidating, abusing, and threatening sundry Grocon employees and subcontractors and their employees who sought access to the Common Ground Project site.
Later in these reasons for judgment, I shall set out in some detail the nature of the activities in which the CFMEU, by particular individual respondents, engaged on particular days in the period mentioned.
6 There can be no doubt that the non-protected industrial action described was a deliberate stratagem on the part of the CFMEU to supplement lawful bargaining and protected industrial action. Equally, there can be no doubt that the non-protected action was neither unique to that site or to those times. Rather, it displayed a paradigm example of behaviour described by the Honourable Terence Cole RFD, as Royal Commissioner, in the Final Report of the Royal Commission into the Building and Construction Industry (Royal Commission report).
7 It is necessary, in order both to put the CFMEU stratagem in context and also to understand the penalties, both individual and union-specific, that I propose to impose, to return later in these reasons for judgment to the Royal Commission report and to particular observations made by Commissioner Cole in that report. First though, there ought to be an acknowledgment of particular features of the industrial relations system in our country, less the penalties proposed and the reasons for them be misunderstood.
8 Ever since we have had a Federal industrial relations system and, for that matter, before then in colonial times, trade unionism has been lawful in Australia. I set out the heritage of Australian trade unionism in developments in the United Kingdom which may be traced to the Tolpuddle Martyrs case, R v Lovelass and others (1834) 172 ER 1380, in Construction, Forestry, Mining and Energy Union v North Goonyella Coal Mine Pty Ltd [2013] FCA 1444 at [30] to [33] (North Goonyella case). As I observed in that case at [32] by reference to that heritage:
… trade unions have been recognised expressly by our parliament upon registration as lawful organisations having a recognised representational role in our industrial relations system.
9 With the representational role of industrial organisations comes particular privileges, as well as particular responsibilities. One cannot have one without the other. An industrial organisation, be it an employer organisation or an employee organisation, which persistently abuses the privilege by engaging in unlawful conduct cannot expect to remain registered.
10 The BCII Act was, as the second reading speech delivered in the Senate by Senator, the Honourable Eric Abetz, reveals, a deliberate response by the Parliament to, and an acceptance of, recommendations found in the Royal Commission report. The main object of the BCII Act is set out in s 3(1):
(1) The main object of this 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.
11 Also pertinent in this case are the aims of the BCII Act as set out in s 3(2)(a), (b), (c), (d) and (e):
(2) This Act aims to achieve its main object by the following means:
(a) improving the bargaining framework so as to further encourage genuine bargaining at the workplace level;
(b) promoting respect for the rule of law;
(c) ensuring respect for the rights of building industry participants;
(d) ensuring that building industry participants are accountable for their unlawful conduct;
(e) providing effective means for investigation and enforcement of relevant laws;
…
12 The conduct which I have already described in a summary way, and which I shall set out in more detail shortly, constituted a contravention of s 44(1) of the BCII Act which provides:
44 Coercion of persons to make, vary, terminate etc. certified 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 agreement under Division 2 or 3 of Part VIB of the Workplace Relations Act; or
(d) to approve any of the things mentioned in paragraph (c).
13 Such contraventions are subject to the penalties for which s 49 provides. In respect of a grade-A civil penalty of the kind specified in respect of a contravention of s 44(1), the applicable maximum penalties are 1000 penalty units if the defendant is a body corporate, such as the CFMEU, or otherwise 200 penalty units. It is the latter maximum which is applicable to the individual respondents in this proceeding in respect of each contravention.
14 The effect of s 69 of the BCII Act is that the union is made responsible for the conduct of individual members. It is by means of s 69 that the CFMEU is exposed to penal liability in this case.
15 What then was the detailed nature of the conduct engaged in by particular respondents for which the CFMEU is also made liable? That conduct was as follows:
Events of 13 March 2012
2.3 At or about 6.30am on 13 March 2012, the Third Respondent, Mark O'Brien (Mr O'Brien) and the Fifth Respondent, Jack Cummins (Mr Cummins) stood at the Fleet Lane gate entry to the Common Ground Project together with a group of approximately 2 men, including Grocon employees.
2.4 At around 6.30am, the First Respondent, Paul Cradden (Mr Cradden), Second Respondent, Joseph Myles (Mr Myles), O'Brien and the Fourth Respondent, Mike Davis (Mr Davis) were present at the Hope Street entrance to the Common Ground Project site. There were also approximately twenty people present outside the main gate of the Common Ground Project, including a number of Grocon Employees.
2.5 At or around approximately 6.40am Damien Ennis, Finishes Foreman for the Common Ground Project, employed by Grocon (Mr Ennis), went to enter into the site via the Fleet Lane entrance.
2.6 Mr Cummins said to Mr Ennis words to the effect "I can't believe you're crossing the picket line" to which Mr Ennis replied "It's my job" and entered the Common Ground Project site.
2.7 A number of vehicles were parked along the front of the Common Ground Project site on Hope Street, parked nose to tail such that they blocked access to vehicles entering the Common Ground Project site and impeded pedestrian entry to the site.
2.8 The vehicles had banners tied to them that stated, inter alia, "CFMEU Workers Protest".
2.9 The CFMEU was, at the relevant time, the registered owner of two of the vehicles (64 DUB and 208 RRD). The registered owner of 419 MRA was "Qld Branch Aust Builders Labourers'", which has the same address as the CFMEU.
2.10 At or about 6.30am Mitchell Bourke, Contracts Administrator for the Common Ground Project (Mr Bourke), John Fellicissimo, Structures Foreman for the Common Ground Project (Mr Fellicissimo), Yun Ok, Safety Advisor for the Common Ground Project (Mr Ok), and Mr Sutalo, all employed by Grocon, approached the main gate on Hope Street to open the gates.
2.11 The gathered persons outside the main gate yelled words such as "scab", and "scum" at Messrs Bourke, Sutalo, Fellicissimo and Ok. Mr Myles said to Messrs Bourke, Sutalo, Fellicissimo and Ok, words to the effect:
"You've all got a long time left in the industry, and we can influence your future jobs".
2.12 Mr Sutalo approached Mr Cradden and said words to the effect that could he move the vehicles as they were in the Grocon work zone and were blocking access to the site. Mr Cradden responded with words to the effect that "if my car is towed I will hold you personally responsible".
2.13 Mr Cradden also said to Mr Sutalo "when is the finishing date, you'll never get this job finished".
2.14 Vehicles parked in the work zone were ticketed with infringement notices. When this occurred, Mr Cradden said to Mr Sutalo words to the effect "you think a $75.00 fine will stop us?"
2.15 The actions set out above:
(a) impeded, hindered or denied access to the Common Ground Project site:
(i) for Grocon Employees who were not engaged in the protected industrial action;
(ii) for employees of the Common Ground Project Sub-contractors; and
(iii) persons attempting to deliver goods and materials to the Common Ground Project site;
(b) by means of verbal threats and statements made to the persons pleaded, was intended to prevent or disrupt those persons from performing work on the Common Ground Project site
Events on 14 March 2012
2.16 On 14 March 2012, Messrs Cradden, Myles, O'Brien, Davis and Cummins were present outside the Common Ground Project site.
2.17 At approximately 6.30am a number of vehicles were parked along the front of the Hope Street entrance to the Common Ground Project site in the work zone in a position that blocked access to the site for vehicles and impeded pedestrian entry to the Common Ground Project site.
2.18 The vehicles had banners tied to them that stated, inter alia, "CFMEU Workers Protest".
2.19 A van with a large CFMEU logo on the side was parked directly in front of the main gate on Hope Street entrance (the CFMEU van) and had an awning that stretched out onto Hope Street.
2.20 Approximately six men wearing clothing with insignia and logos of the CFMEU were gathered under the awning of the CFMEU van around a BBQ. The men included Messrs Cradden, Myles and O'Brien, Grocon Employees and Kane Pearson, assistant secretary of the CFMEU Queensland Builders' Labourers' Divisional branch.
2.21 Messrs Bourke, Ennis and Sutalo then approached the main gate on Hope Street to open the gates.
2.22 The group of approximately six men, including Messrs Cradden, O'Brien, Davis and Cummins yelled in the direction of Mr Ennis words to the effect of "scabby".
2.23 Mr Sutalo asked Mr Cradden words to the effect to move the CFMEU van that was blocking the Hope Street entrance and Mr Cradden replied with words to the effect that he had parked the van and would never move it.
2.24 At or around 11.00am Mr Ennis and Sean Moore, a Grocon Foreman (Mr Moore), were present on the balcony of level 2, unit 210 of the Common Ground Project to install clotheslines.
2.25 The group of approximately six men who had been under the awning of the CFMEU van, including Messrs Cradden, O'Brien, Davis and Cummins, yelled in the direction of Messrs Ennis and Moore on multiple occasions over a period of approximately 15 minutes, words to the effect of "scab".
2.26 Later that same day, while Mr Ennis was present at the top of the ramp down to the basement level, Mr O'Brien stood with approximately three Grocon Employees at the Fleet Lane entrance to the site and yelled out in the direction of Mr Ennis words to the effect of "scab".
2.27 At approximately 11.47am Mr Sutalo was talking on the telephone and Mr Cradden came over to him and whispered "you're fucked" in Mr Sutalo's ear.
2.28 The actions set out above:
(a) impeded, hindered or denied access to the Common Ground Project site:
(i) for Grocon Employees who are not engaged in the protected industrial action;
(ii) for employees of the Common Ground Project Sub-contractors who are contracted to perform building work on the Common Ground Project; and
(iii) for persons attempting to deliver goods and materials to the Common Ground Project site.
(b) by means of verbal threats and statements made to the persons pleaded, was intended to prevent or disrupt those persons from performing work on the Common Ground Project site.
Events on 15 March 2012
2.29 On 15 March 2012, Messrs Cradden, O'Brien, Davis and Cummins were present outside the Common Ground Project site.
2.30 At approximately 6.30am a number of vehicles including two registered to the CFMEU were parked in the work zone for the Common Ground Project directly in front of the site at Hope Street, including the CFMEU van. The vehicles had banners tied to them that stated, inter alia, "CFMEU Workers Protest". The vehicles blocked access to vehicles entering the Common Ground Project site, and impeded pedestrian entry to the Common Ground Project site.
2.31 At or around approximately 6.30am, Mr Cummins was present outside the Fleet Lane entrance and said to Mr Ennis as Mr Ennis entered the site words to the effect of "scab".
2.32 At or around 6.30am Messrs Bourke, Ennis and Sutalo, approached the main gates on Hope Street to open the gates.
2.33 Messrs Cradden, O'Brien, Davis and Cummins approached Messrs Bourke, Ennis and Sutalo and a discussion to the following effect occurred:
Mr Sutalo said: "Whose vans are these?"
Mr Sutalo said: "Can you please move the vans?"
Mr O'Brien said: "No, I don't know where the keys are."
Mr Cradden said: "How many photos are you going to fucking take of us?"
Mr Sutalo said: "Every day."
Mr Cradden said: "Go for it."
Mr Cummins said: "Why don't yous [sic] take a leaf out of Elizabeth Street."
Mr Cummins said: "Because Mark Gaskin knows what the fuck he is doing, fucking moron."
Mr O'Brien said to Ennis: "Hey Scabby, Gay Boy, Gay Boy, Gay Boy, Scabby".
Mr Cradden said, pointing to Ennis: "It's amazing what people become, once a fucking union delegate hey, that piece of shit there, used to be a union delo."
Mr O'Brien said: "You're joking."
Mr Cummins said: "Start mouthing off now Damien"
Mr O'Brien said: "Come on Mate you had plenty to fucking say over there before in front when it was just the boys."
Mr O'Brien said: "You should fuck off back inside"
Mr Cummins said: "Fucking parasite."
Mr Cummins said: "Unions got this prick a job, got him a job as a leading hand with Matrix."
Mr Davis said: "He used to run with us? Fucking hell."
Mr O'Brien said: "Lowest sort of fucking dog ever."
Mr Cradden said: "Think you would know better than to go against the unions."
Mr Davis said: "You've seen fucking what we've done even as a delegate mate, what we've done for our Brothers and Sisters."
Mr Cummins said: "He wouldn't make it, he's got no pride or nothing"
Mr Cradden said: "He's got no fucking balls, backbone, piece of shit"
Mr Cradden said: "You know when all this shit is over, it's just beginning for you then isn't it, the union covers the whole of fucking Australia"
2.34 Mark Hatton, the Managing Director of Quality Handrails, a Common Ground Project Sub-contractor (Mr Hatton), arrived at the Fleet Lane entrance to the Common Ground Project site at or around 6.30am.
2.35 Messrs Cradden and Cummins were standing near the Fleet Lane entrance to the Common Ground Project site. Mr Hatton had a conversation with Messrs Cradden and Cummins in words to the effect of:
Mr Hatton said: "Is this stoppage still going on?"
Mr Cradden said: "It's still on. We are waiting for a result."
Mr Hatton said: "My guys want to work. They want to do stuff and they aren't getting paid."
Mr Cradden said: "He [indicating Mr Cummins] isn't getting paid either."
Mr Hatton said: "What are the consequences to my business if I bring my boys on site?"
Mr Cradden said: "You want to know what the consequences are? You would be committing industrial suicide."
2.36 The actions set out above:
(a) impeded, hindered or denied access to the Common Ground Project site:
(i) for Grocon Employees who are not engaged in the protected industrial action;
(ii) for employees of Quality Handrails who are contracted to perform building work on the Common Ground Project; and
(iii) for persons attempting to deliver goods and materials to the Common Ground Project site.
(b) by means of verbal threats and statements made to the persons pleaded, was intended to prevent or disrupt those persons from performing work on the Common Ground Project site.
Events on 16 March 2012
2.37 On 16 March 2012, Messrs Cradden, Myles, Davis and Cummins were present outside the Common Ground Project site.
2.38 A number of vehicles were parked in the work zone for the Common Ground Project directly in front of the site at Hope Street, including the CFMEU van. The vehicles had banners tied to them that stated, inter alia, "CFMEU Workers Protest".
2.39 The vehicles blocked access to vehicles entering the Common Ground Project site, and impeded pedestrian entry to the Common Ground Project site.
2.40 At approximately 10.00am Messrs Ennis, Moore and Bourke were present on the balcony of level 2, unit 211 of the Common Ground Project to install clotheslines. A group of people that had been present outside the Fleet Lane entry to site, including Mr Cummins, started shouting at Messrs Ennis, Moore and Mr Bourke.
2.41 Mr Cummins yelled out at Messrs Bourke, Moore and Ennis words to the effect "scabs" repeatedly.
2.42 Soon after this Mr Cradden came to join the crowd. Mr Cradden yelled at Messrs Bourke, Moore and Ennis words to the effect of "What do you think you're doing? You're all scabs."
2.43 The actions set out above:
(a) impeded, hindered or denied access to the Common Ground Project site:
(i) for Grocon Employees who are not engaged in the protected industrial action;
(ii) for employees of the Common Ground Project Sub-contractors who are contracted to perform building work on the Common Ground Project; and
(iii) for persons attempting to deliver goods and materials to the Common Ground Project site.
(b) by means of verbal threats and statements made to the persons pleaded, was intended to prevent or disrupt those persons from performing work on the Common Ground Project site.
Events on 17 March 2012
2.44 On 17 March 2012, the CFMEU van was parked directly in front of the Hope Street entrance to the Common Ground Project site and it had an awning that stretched out onto Hope Street. Messrs Cradden, Myles, O'Brien and Davis were sitting under the awning of the van.
2.45 The CFMEU van and other vehicles adjacent to it had banners tied to them which stated, inter alia, "CFMEU Workers Protest".
2.46 The vehicles blocked access to vehicles entering the Common Ground Project site, and impeded pedestrian entry to the Common Ground Project site.
2.47 The actions set out above impeded, hindered or denied access to the Common Ground Project site:
(a) for Grocon Employees who are not engaged in the protected industrial action;
(b) for employees of the Common Ground Project Sub-contractors who are contracted to perform building work on the Common Ground Project; and
(c) for persons attempting to deliver goods and materials to the Common Ground Project site.
Events on 19 March 2012
2.48 On 19 March 2012, Messrs Cradden, Myles and O'Brien were present outside the Common Ground Project site on Hope Street.
2.49 The CFMEU van was parked directly across the front of the Hope Street entrance to the Common Ground Project site. The CFMEU van and other vehicles adjacent to it had banners tied to them which stated, inter alia, "Workers Protest". The CFMEU van also had an awning that stretched out onto Hope Street. Messrs Cradden, Myles and O'Brien were sitting under the awning of the van where a BBQ was being cooked.
2.50 The vehicles blocked access to vehicles entering the Common Ground Project site, and impeded pedestrian entry to the Common Ground Project site.
2.51 The actions set out above impeded, hindered or denied access to the Common Ground Project site:
(a) for Grocon Employees who are not engaged in the protected industrial action;
(b) for employees of a Common Ground Project Sub-contractor who are contracted to perform building work on the Common Ground Project; and
(c) for persons attempting to deliver goods and materials to the Common Ground Project site.
Events on 21 March 2012
2.52 On 21 March 2012, Mr Ennis approached Mr Hatton when he pulled up in front of the Common Ground Project site in his vehicle and said to Mr Hatton words to the effect that the site was open and asked him words to the effect "Are your guys coming to work?".
2.53 Mr Cummins walked over to Mr Ennis and Mr Hatton and shouted words to the effect "Don't listen to these fuckwits, the picket line is still running".
2.54 Mr Hatton left the site approximately five minutes after this occurred.
2.55 The actions above impeded, hindered or denied access to the Common Ground Project site for a Common Ground Project Subcontractor who was to perform building work on the Common Ground Project.
Other events
2.56 On a date between 13 March 2012 and 21 March 2012, Jarrod Doyle, a fitter employed by KWA Blinds, a Common Ground Project Sub-contractor (Mr Doyle), arrived outside the Hope Street entrance to the Common Ground Project site to install curtain tracks at or around 1.00pm.
2.57 There were a number of people gathered outside the Hope Street entrance together with banners bearing the CFMEU logo.
2.58 Mr O'Brien approached Mr Doyle and had a conversation to the effect of the following:
Mr Doyle said: "What's going on?"
Mr O'Brien said: "The site is closed because we are here to support the Grocon employees in their wage dispute. We are expecting everybody that's on site to support them."
Mr Doyle said: "Can I go on site? There are tracks on site that I need to secure."
Mr O'Brien said: "There is no way that you're getting on site."
Mr Doyle said: "They're expensive, I need to put them away."
Mr O'Brien: "There's no one on site so they won't get damaged or stolen. There's no possibility that you're going on site."
2.61 Mr Doyle then left the Common Ground Project site without entering the site.
2.62 The actions set out above:
(a) impeded, hindered or denied access to the Common Ground Project site for an employee of a Common Ground Project Sub-contractor who was to perform building work on the Common Ground Project.
(b) by means of the statements made to Mr Doyle, was intended to prevent or disrupt Mr Doyle from entering the Common Ground site and performing work on the site.
16 There was some debate in the course of submissions as to what, if any, of the conduct which I have just described in detail constituted, for the purposes of assessment of penalty, a "course of conduct". Some care needs to be taken in the use of the phrase "course of conduct" in relation to its role in the imposition of penalties and, in particular, its role in ensuring that there is not an over-penalisation in respect of conduct which may constitute what are, strictly, a number of discrete contraventions. At a general level of abstraction, one might very well choose to describe the events which occurred between 13 March and 21 March 2012 as a course of conduct.
17 As I observed at the outset, there is evidenced a deliberate stratagem employed by the CFMEU. That is not though the way in which course of conduct ought to be understood and applied for the purposes of avoiding over-penalisation. The correct approach is as set out by Middleton and Gordon JJ in their joint judgment in Construction, Forestry, Mining and Energy Union v Cahill (2010) 194 IR 461 at 473 at [39] - [41] (CFMEU v Cahill). An example of the application of the explanation offered by their Honours is to be found in the North Goonyella case. In this particular case, on each individual date, it would, in my view, be to over-penalise the CFMEU, to treat the sum of the maximum penalties in respect of a given day to which it is theoretically exposed by operation of s 69 of the BCII Act as the total maximum for that given day. That is because on each day, in my view, there is evident, via the actions of particular individual respondents for whose actions the CFMEU is also made liable by s 69, a course of conduct.
18 That is not to say, though, that those individual days collectively, in terms of CFMEU v Cahill, also amount to a course of conduct. I have approached the assessment of penalties accordingly.
19 Something more needs to be said now in respect of the Common Ground Project site. There were two primary access points to that site. The main access point was on Hope Street. There was a subsidiary access point on Fleet Lane. It was put on behalf of the CFMEU that there had not, by any of the conduct, been obstruction of the Fleet Lane access. That is true, but that was not the main access point to the site.
20 The CFMEU's choice of the Hope Street access point was no coincidence. It was one indicator, along with the use of union vehicles and the presence of union officials, related banners and the like, of the deliberate stratagem which I have mentioned already.
21 Why then have I described this case as a paradigm example of conduct described by Commissioner Cole? The answer to that is to be found in volume 11, Reform - Achieving Cultural Change of the Royal Commission report. In particular, the following passages are pertinent:
An industry like no other?
6 There is no characteristic that sets the building and construction industry apart from all other industries. Building and construction is project based with projects varying from short to long terms, but this is also true of the information technology industry. Building and construction workers move between employers relatively frequently, but the same can be said for hospitality workers. The large number of small contractors in building and construction is also a characteristic of the agricultural industry. The work is dangerous, as is mining and much of manufacturing. Together, however, all these and other characteristics do distinguish building and construction from other industries. The other characteristics include the following.
7 The work is project based. Each 'product' is constructed in a different location under different circumstances. The 'product' is discrete in nature, location, time and cost. While the processes used in building or construction may be repetitive in concept, each production process is unique.
8 As the work is project based the workforce on the site is not constant through the project. Each project involves different workers with differing skills and for differing but overlapping periods of time.
9 This work structure requires flexibility in work arrangements. Almost universally, businesses are looking for alternative ways of managing the workforce. The largest companies employ very few tradespeople on site. They rely on contractors that have a small number of employees or work as individual subcontractors.
10 Continuity of employment is, in the main, not assured and usually depends on the success of very small businesses operating in a highly competitive environment. Workers face great uncertainty about the availability of future work. They look to unions to provide new employment for them. They develop stronger ties to their union than to their employer of the day. But they do not protest when union officials act in an undemocratic, unresponsive or unlawful fashion.
11 The head contractor of the project has no direct relationship with most of the workers on the project. Nevertheless the head contractor requires workers to work in sequence, and in co-operation and close proximity to others who have different employers with no prior or continuing association. This increases the risk of accidents.
12 The mobilisation and co-ordination of labour, plant and materials is an organisational task of great complexity. That task continues throughout the whole building project. Disruption can impose large costs on the parties involved. As a result building and construction is a risky industry. Plant, capital and labour are mobile and the cost of disruptions is high.
13 Overall, this has resulted in the following key characteristics:
• while having specialist trade skills, subcontractors often lack broader business management skills;
• the level of bargaining power of those who employ the bulk of the workface is limited;
• subcontractors are dependent on head contractors for continuity of work;
• the relationship between head contractors and the unions results in conditions adopted on one site quickly flowing through to others;
• head contractors have a short term, project-based focus on profitability and performance;
• clients only select head contractors with a reputation for delivering on time and on budget;
• head contractors are responsible for most of the project-based risk, including industrial relations risk - they seek to pass on that risk to subcontractors, or limit that risk by insisting that subcontractors conform to union demands such as 'no ticket no start', and 'no EBA no start';
• workers feel insecure about their long term employment and the safety of their workplace;
• the level of unionisation is high on major projects;
• the cost of industrial unrest is high; and
• industrial action or the threat of industrial action is highly effective in obtaining what is demanded.
14 Such an environment can quickly result in an industry where all participants pursue short term commercial expediency at the expense of the industry's long term performance.
15 Such an environment also accounts, in part, for the culture of the industry.
16 My initial impression of the culture and characteristics of the building and construction industry, particularly on major central business district (CBD) site throughout Australia (except in South Australia and the Northern Territory) was set out in my First Report. That impression has since been confirmed by findings. The precise details are in the case studies. The particular characteristics of each State are summarised in the State and Territory Overview volumes of this report. As is there explained, the lawlessness on civil construction sites in certain Australian jurisdictions is less pronounced than those that apply on almost all CBD building sites outside of South Australia and the Northern Territory. There is a serious departure from the rule of law on building sites and on many construction sites.
17 Generally, the perpetrators of this conduct are unions, acting initially through their officers, employees, delegates, and members, but also through pressure upon head contractors. The behaviour of the particular branches or divisions of, or groups within, the unions that operate on major CBD building sites (which, for convenience, I call 'the unions') is, in many respects, unacceptable.
18 The unions arrogate to themselves a 'right' to interfere with employer-employee relations that goes well beyond what is appropriate. Thus, unions regularly insist (not merely recommend), upon a sub or head contractor employing, and paying the wages of, a particular individual whom the union has decided is to be the site delegate or the site occupational health and safety representative. Not infrequently demands, coupled with actual or threatened industrial action, are made that particular unemployed union members become paid employees of the general site workforce.
19 The unions are substantial institutions with considerable assets. So, for example, the most recently available figures show their net assets to be:
• Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (referred to as the Australian Manufacturing Workers Union) (AMWU) - $37.3 million;
• The Australian Workers' Union (AWU) - $12.3 million;
• Construction, Forestry, Mining and Energy Union (CFMEU) - $71.2 million; and
• Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) - Electrical Division and Electrical Trades Union of Australia, New South Wales Branch (ETU NSW) - $51.3 million.
These assets are far greater than those of all but the largest building contractors.
20 Many union organisers and delegates display a disregard or contempt for the rule of law. They are used to taking unlawful action for industrial ends which frequently causes loss to others within the building and construction industry. They are rarely held to account by the legal or industrial system. Even where they are, the orders of tribunals and courts that are adverse to them are frequently disobeyed. Those who suffer from this unlawful behaviour fear that if union demands are not met further loss will be inflicted. It is unhealthy in our democracy that any group of persons be able to act in these ways outside the law. My recommendations address this matter.
21 Head contractors, who face powerful commercial pressure from their clients, take a 'commercial' approach to this unlawfulness by union officials, delegates and members, frequently giving in to union demands or becoming the instruments for meeting those demands. An example is the frequent insistence by head contractors that subcontractors enter into the union's pattern agreement before commencing work on site (or even before being listed as a pre-qualified subcontractor for tender purposes).
(footnote references omitted)
22 The individual respondents in this case are exemplars of the union organisers and delegates displaying a disregard or contempt for the rule of law referred to in paragraph 20. One in particular should be singled out for special mention and, in turn, special recognition in relation to penalty. I refer in this regard to Mr Myles.
23 At the time when he engaged in the conduct which I have described, Mr Myles had engaged already in other conduct which was later found to be in contravention of applicable industrial legislation; see Director, Fair Work Building Industry Inspectorate v Myles & Ors [2014] FCCA 1429 at [31] to [38], conduct which saw him fined $4,950 in respect of contraventions of s 500 of the Fair Work Act 2009 (Cth) (Fair Work Act), that occurred in February 2010; see also Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2013] FCA 846 in which a penalty of $99,000 was imposed on the CFMEU for breaches of s 44 and s 43 of the BCII Act referrable to the actions, amongst others, of Mr Myles.
24 The court cases concerning those actions were not finalised until after Mr Myles' conduct in 2012 but the contravening conduct concerned occurred before the events in question in this case. I have no evidence from Mr Myles, or for that matter, any of the other individual respondents which would enable in mitigation a view to be formed that prior to the outcomes in those other cases, Mr Myles honestly and reasonably formed a view that particular actions on his part were justified or excused at law. I do not see that the fact that the contraventions were found by judicial pronouncement afterwards means that I should now regard Mr Myles as someone who does not have a propensity to engage in contravening conduct. Nor, for the reason given, do I regard him as someone who had a particular belief, mistaken but honest, from which he was shaken by later judicial pronouncement as to the lawfulness of earlier behaviours.
25 Mr Myles strikes me as a union official who is predisposed to engage in unlawful conduct to supplement legitimate industrial aims. A very real question indeed necessarily emerges in relation to Mr Myles as to whether he ought to continue to enjoy any privileges under any industrial law, state or federal.
26 The particular proscription, found in s 44 of the BCII Act, in relation to coercion is no longer in force. That is not to say that there is not to be found in our present industrial law analogue proscription: see in particular s 343 and also s 348 of the Fair Work Act. In respect of the current proscriptions, Parliament has made a value judgment in relation to the applicable level of penalty for a contravention which is different to that which is applicable in respect of a s 44 of the BCII Act contravention. The respondents in this case are to be penalised by reference to the then value judgment of Parliament, applicable to the conduct in which they engaged in 2012.
27 In Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 407, Tracey J made recent observations concerning similar behaviours with which I am in complete agreement. His Honour observed:
103. Underlying the various contraventions some consistent themes are apparent. In seeking to achieve its desired outcomes the CFMEU had available to it lawful processes which it could have pursued. It chose, instead, to prosecute its objectives by means which it must have known or, at least, should have known, were unlawful. Not for the first time the CFMEU sought to impose its will by means of threats and coercion against employers. Its approach was one of entitlement: it was free, despite legal constraint, to deploy its considerable resources in order to achieve its industrial objectives. The concept of the rule of law was anathema to it.
104. The Director submitted that the CFMEU had "an egregious record of repeated and wilful contraventions of the provisions of industrial legislation." This contention was supported by a table, appended to the Director's submissions. The table contained a list of some 87 cases, involving contraventions of industrial legislation by the CFMEU, since 1999. In most of these cases the CFMEU was found to have sought, by means of threats, coercion or unlawful industrial action, to achieve industrial outcomes. Most of the cases involved multiple contraventions.
105. The Director also provided a collection of judicial observations derived from some of these cases in which members of this Court and the Federal Circuit Court (and the Federal Magistrates Court as it was then) had noted the CFMEU's propensity to deliberately flout industrial legislation. The most recent of these observations was that of White J in Director of the Fair Work Building Industry Inspectorate v Stephenson [2014] FCA 1432 at [76] and [77] in which his Honour referred to the CFMEU's record as being "dismal" and indicating "an attitude of indifference … to compliance with the requirements of the legislation …".
106. The circumstances of these cases were not identical to those in the present case. They, nonetheless, bespeak a deplorable attitude, on the part of the CFMEU, to its legal obligations and the statutory processes which govern relations between unions and employers in this country. This ongoing willingness to engage in contravening conduct must weigh heavily when the need for both specific and general deterrence is brought to account.
107. The CFMEU is not to be punished again for its earlier misconduct. It is, however, to be punished more severely than it would have been had it had no adverse record or been responsible for only a few isolated incidents over a period of many years. Its continued willingness to engage in contravening conduct supports the view that earlier penalties, some of them severe, have not had a deterrent effect: cf Veen v R (No 2) (1988) 164 CLR 465 at 477-8.
108. The conduct which gave rise to many of the contraventions involved the placing of vehicles and other obstacles across entrances to the site. Typically, these blockades commenced early in the morning before workers were due to enter the site. These were not spontaneous actions. They required preparation and planning. …
28 Of course, in this case, the facts are different in the sense that there was not a great distance which was needed to be travelled to the site in question. The logistics were not as challenging for the CFMEU. It is the type of conduct which attracts me so powerfully to the observations made by Tracey J.
29 As in that case, so with this, submissions were made in mitigation on behalf of the CFMEU and individual respondents that there was no violence or criminal property damage which occurred in the course of the blockades. It was possible, albeit at a subsidiary rather than the main access point, still to access the site. Further, those seeking to enter, be they Grocon employees or subcontractors, were able, albeit at the price of foul abuse and obstructive behaviours, to enter the Common Ground Project site. The scene on the ground at the site each day does not leave much to the imagination in terms of the intimidation encountered by those employees and subcontractors. It is not to be trivialised. Especially, it is not to be trivialised in light of this being a paradigm example of behaviours described in the Royal Commission report and also in the many earlier decided cases involving the CFMEU to which I was helpfully referred on behalf of the Director in the course of submissions.
30 There are other mitigating factors which also need to be acknowledged. In the end, the case did not proceed to a contested hearing. By the amended pleadings, the respondents came, late but, nonetheless, they came, to acknowledge particular pleaded contraventions. The expense of a trial was thereby saved to the public purse. The burden of preparing for that trial was, though, fully visited on the public purse, given the lateness of the notification of the change in the respondents' disposition to the Director. So, while some account must be taken of that change of heart, it is not the same as an acknowledgment of a contravention at the earliest possible opportunity.
31 Further, there is no direct economic loss to Grocon evidenced. That is not to say that this type of conduct, for all of the reasons given by Commissioner Code, is without overall adverse economic impact on Australia.
32 I do not have the benefit, because there is no evidence of particular economic circumstances, of making an accurate assessment of the capacity to pay of particular individual respondents. There was no submission made on their behalf of any particular incapacity. As far as the CFMEU is concerned, there is no particular evidence of its net worth, but neither is there any reason to think that there has been any change in terms of the overall economic power described in the Royal Commission report.
33 Just as with adverse action taken by an employer in respect of a workplace right not being, in terms of penalty, nothing more than an affordable price of doing business, so too in relation to a transgression of s 44 should penalty not be seen or assessed on the basis of being nothing more than an affordable price of an unlawful adjunct to industrial bargaining. Particularly in relation to the CFMEU, the penalties must reflect deterrence and punishment, and the same factors loom large in relation to individual respondents.
34 Recently, in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (2015) 105 ACSR 403 at [40] to [41] (Director, Fair Work Building Industry Inspectorate v CFMEU), the Full Court, by reference to pertinent earlier authority, offered guidance as to the approach to be taken in a case like this where it falls to the Court to assess penalty in respect of multiple contraventions. It was there observed:
[40] In sentencing for multiple criminal offences, absent any specific statutory provision permitting a single global sentence, the court must fix a sentence for each contravention. The court must then consider the "totality principle": Mill v R (1988) 166 CLR 59 at 63; 83 ALR 1 at 3; Pearce v R (1998) 194 CLR 610; 156 ALR 684; [1998] HCA 57 at [45]-[49] (Pearce); Johnson v R (2004) 205 ALR 346; [2004] HCA 15 at [18]-[20] (Johnson). Once an appropriate sentence is fixed for each offence, the court must determine whether the sentences should be cumulative or concurrent in order to address the principle of totality. In other words once appropriate sentences are determined in relation to each individual offence, the aggregate must be reviewed to ensure that it is just and appropriate for all the offences. If not, the sentence should be adjusted by making some of the sentences concurrent or partly concurrent.
[41] The totality principle applies to the fixing of fines: Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 704; EPA v Barnes [2006] NSWCCA 246 at [43]-[50]. The court must fix a fine for each offence and then review the aggregate, considering whether it is just and appropriate, as a reflection of the overall criminality. Such consideration may lead to moderation of the fine imposed in respect of each offence: Barnes at [49]. It is at this stage that it is relevant to consider matters such as whether the separate offences were part of a single course of conduct (or whether the offences may be grouped together in some way as representing separate courses of conduct) and whether there is an overlap between the legal elements of some of the offences.
[42] There would appear to be no fixed, or single way to adjust fines to reflect the totality of the criminality. However it would, in most cases, be erroneous to select a single offence and fix a penalty for that offence which is appropriate to reflect the total criminality - and then impose nominal or lenient sentences in relation to the balance of the offences: Johnson at [26]; R v Hammoud (2000) 118 A Crim R 66; [2000] NSWCCA 540 at [8]-[10]; R v Bahsa (2003) 138 A Crim R 245; [2003] NSWCCA 36 at [67]. The reason is that the nominal or lenient sentences for all the other counts would not be appropriate sentences for those charges.
[43] In any event, the main point is that, however the sentences are adjusted to take into account the totality of the criminality, a court may not simply impose a single global sentence (in the absence of statutory authority for such course). Authorities which make this point (in the context of criminal sentencing) include: R v Bibaoui [1997] 2 VR 600 at 603-4; (1996) 139 ALR 746 at 749-50 per Ormiston JA and at VR 607; ALR 753 per Tadgell JA; R v Finnie [2002] NSWCCA 533 at [54]-[57]; Thorn v R (2009) 198 A Crim R 135; [2009] NSWCCA 294 at [39]- [47].
35 I raised with counsel in the course of the penalty hearing whether there was in applicable Commonwealth statute law any provision which might admit of the imposition of a single penalty on either the individual or union respondents. Reference came to be made to s 4K(4) of the Crimes Act 1914 (Cth), which provides:
(4) If a person is convicted of 2 or more offences referred to in subsection (3), the court may impose one penalty in respect of both or all of those offences, but that penalty shall not exceed the sum of the maximum penalties that could be imposed if a separate penalty were imposed in respect of each offence.
That reference was not to the end on the part of either the Director or the respondents of seeking to persuade me that s 4K was applicable in relation to the imposition of pecuniary penalties under the BCII Act.
36 It will be noticed that s 4K(4) uses the term "offences". It might be thought that this is an intended reference only to criminal offences, although that word can have about it a wider meaning sufficient to embrace conduct the subject of pecuniary rather than just criminal sanction: see in this regard Brown v Allweather Mechanical Grouting Co. Limited [1954] 2 QB 443 at 447-448, where Lord Goddard stated:
I do not think that the mere fact that the word "offence" is used in subsection (2) shows that it is to be regarded as a criminal offence. A failure to do something prescribed by a statue may be described as an offence although Parliament does not impose a criminal sanction upon it, but a merely pecuniary sanction which is to be recovered as a civil debt. Justices, as is well known, have in very many cases power to order the recovery of sums of money. In section 65 of the Excise Management Act, 1827, one finds that excise penalties may always be recovered before justices of the peace, but there is no indication in the section that justices are empowered to imprison or to impose a fine. It simply gives them power to impose penalties. Of course, once penalties have been imposed, if they are not paid there may be proceedings under the Debtors Act and many other Acts, and possibly under the Summary Jurisdiction Acts, and a committal to prison may be made, but that is because the penalty has not been paid. It is not a punishment for the offence itself. It is a punishment for not paying, or a means of endeavouring to compel a defendant to pay a penalty, which is a different matter.
Passages in the judgment of the Master of the Rolls in Attorney-General v Bradlaugh, to which Mr. Brown directed our attention, fully support his argument. The Master of the Rolls points out in that case that where a penalty is imposed for doing a particular act, the penalty is the only sanction, and the recovery of the penalty, if that is the only consequence, does not make the prohibited act a crime. It was far more common in those days than it is nowadays to prohibit certain acts and to impose, as the sanction, the recovery of the penalty, which the Acts very often provided could be recovered by a common informer. There were many Acts of that kind on the statute book till last year, when the Common Informers Act was passed, which abolished that particular form of public nuisance. A well-known example of the type of Act to which I have referred was the Sunday Observance Act, under which, if a person gave a theatrical performance or certain other entertainments on Sunday he was liable to a penalty which could be sued for, and used to be sued for in recent times, by a common informer, but no one ever suggested that a criminal act had been committed.
(Footnote references have been omitted.)
37 The point was neither the subject of full argument nor, much less, urging in terms of its use. Further and, in any event any use of s 4K(4), even if it were applicable, would be discretionary. For these reasons, the prudent course, in my view, in this case is to approach the imposition of penalties on the basis that a single penalty ought not to be imposed in respect of the numerous contraventions. Rather, I propose to treat this as a case where it is appropriate, if not necessary, to impose particular penalties in respect of particular contraventions albeit, tempered both by the mitigating factors mentioned but also, in the case of the CFMEU, by the conclusion which I have reached in relation to a course of conduct on each given day.
38 Taking all of these factors into account, the penalties which I propose to impose in respect of particular individuals and the CFMEU are as follows. In respect of the conduct on 13 March, the following:
Mr Myles $ 10,000
Mr Cradden $ 5,000
Mr O'Brien $ 5,000
Mr Cummins $ 5,000
Mr Davis $ 5,000
The CFMEU $ 50,000
39 In respect of the contravening conduct on 14 March:
Mr Myles $ 10,000
Mr Cradden $ 5,000
Mr O'Brien $ 5,000
Mr Cummins $ 5,000
Mr Davis $ 5,000
The CFMEU $ 50,000
40 In respect of the contravening conduct on 15 March 2012:
Mr Cradden $ 5,000
Mr O'Brien $ 5,000
Mr Cummins $ 5,000
Mr Davis $ 5,000
The CFMEU $ 50,000
41 In respect of the contravening conduct on 16 March 2012:
Mr Cradden $ 5,000
Mr Cummins $ 5,000
CFMEU $ 50,000
42 In respect of the contravening conduct on 17 March 2012:
Mr Myles $ 10,000
Mr Cradden $ 5,000
Mr O'Brien $ 5,000
Mr Davis $ 5,000
CFMEU $ 50,000
43 In respect of the contravening conduct on 19 March 2012:
Mr Myles $ 10,000
Mr Cradden $ 5,000
Mr O'Brien $ 5,000
CFMEU $ 50,000
44 In respect of the contravening conduct on 21 March 2012:
Mr Cummins $ 5,000
CFMEU $ 50,000
45 In respect of the contravening conduct alleged to have occurred on a date between 13 March and 21 March 2012:
Mr O'Brien $ 5,000
CFMEU $ 50,000
46 That yields in respect of proposed penalties the following totals:
Mr Myles $ 40,000
Mr Cradden $ 30,000
Mr O'Brien $ 30,000
Mr Cummins $ 25,000
Mr Davis $ 20,000
CFMEU $ 400,000
47 In reflecting on those proposed penalties, I have expressly taken into account the totality principle, referred to by the Full Court in Director, Fair Work Building Industry Inspectorate v CFMEU in the passage which I have set out already. In total, these particular proposed penalties do not strike me as excessive or oppressive. I propose therefore to adhere to them.
48 A particular feature of the penalties, so far as individuals are concerned, is that I have deliberately chosen to visit upon Mr Myles a greater penalty in respect of individual days than other individuals. That reflects the observations which I have earlier made in relation to Mr Myles.
49 As to the CFMEU, I am firmly of the view, having regard to its outrageous disregard in the past and also in the present case of Australian industrial norms, as set out materially for this case in s 44 of the BCII Act, that anything less than a penalty of the individual amounts for particular days and the total amount would not serve the main purpose of the Act and the particular public interest, described in the Royal Commission report, which this Act was designed to promote. Had there been evidence of particular economic loss at the site, or worse conduct, and had there not been at least something of the mitigation entailed in an acknowledgement of the contraventions, the penalties in respect of the CFMEU would have been much greater.
50 I have also expressly taken into account in imposing both the individual penalties and reflecting on their totality that there has been no expression of contrition or remorse.
51 The parties are agreed that the individual respondents and the CFMEU ought be allowed 28 days to pay. Though, as I have said, I do not have particular evidence of economic circumstances of the respondents, it does seem to me that this is a reasonable time to allow respondents to pay. It will allow the respondents to take advice in relation to payment, having regard to particular circumstances which they have each chosen not to disclose to the Court. That, of course, is their perfect right. To have required the payment of penalties forthwith would, in my view, even in the absence of any such evidence, have been oppressive.
52 The parties are also agreed as to an amount which ought to be ordered in respect of costs and as to which party ought to be the subject of responsibility for the payment of costs. It is agreed between the parties that costs should be fixed in the sum of $10,000 and that the CFMEU ought to be responsible by order for the payment of costs in that sum. For the avoidance of doubt, I should record that I have taken that particular costs liability into account, given that it will be an extra economic burden, when assessing the overall penalty which I have, by the sum of the individual penalties, imposed on the CFMEU.
53 The case is one where there is a strong public interest in the granting of declaratory relief recording the contraventions.
54 As a matter of fairness, it seems to me that the 28 days for the payment of the pecuniary penalties imposed should run from the date upon which the orders are entered. By s 49(5) of the BCII Act a pecuniary penalty is payable to the Commonwealth or to some other person if the court so directs. It may be recovered as a debt. There is, in terms of s 49(5), no "other person" who is, on the evidence, much less by submission, put forward as an alternative recipient of the pecuniary penalties. There will, therefore, also be a further order that each of the pecuniary penalties imposed be paid to the Commonwealth of Australia.
55 I direct that the parties bring in short minutes of orders to give effect to these reasons for judgment.
I certify that the preceding fifty-five (55) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Logan.