Director General, NSW Department of Education and Training and the Managing Director of TAFE v NSW Teachers Federation

CASES CITED: Director General, NSW Department of Education and Training v NSW Teachers Federation [2009] NSWIRComm 147 Director General, NSW Department of Education and Training v NSW Teachers Federation [2010] NSWIRComm 44

HEARING DATES: 15 December 2009 & 8 June 2010

Mr S Crawshaw SC with Mr M Gibian of counsel Solicitors New South Wales Teachers Federation LEGAL REPRESENTATIVES: Mr P Kite SC with Ms M Fraser of counsel Solicitors Crown Solicitor's Office

Director General, NSW Department of Education and Training and the Managing Director of TAFE v NSW Teachers Federation

Application pursuant to s 139 re contravention of dispute orders

1 The applicant in these proceedings, the Director General, NSW Department of Education and Training and the Managing Director of TAFE, has applied for the imposition of a penalty against the respondent, the New South Wales Teachers' Federation, for breach of dispute orders issued by a Full Bench of this Commission on 1 September 2009 in proceedings Director General, NSW Department of Education and Training v NSW Teachers Federation [2009] NSWIRComm 147. The proceedings are constituted by an amended application filed on 26 May 2010. By a Record of Admission, filed in Court on 8 June 2010, the respondent admitted that:

On or about 10 November 2009, in contravention of the order made by Boland J, Sams DP and Grayson DP on 1 September 2009 in proceedings IRC 513 of 2009, the NSW Teachers Federation by its officers and members took industrial action, in that approximately 2,360 employees of the Managing Director of TAFE who are members of the Federation, took industrial action in the form of stop work action for up to three hours on Tuesday 10 November 2009, and this industrial action was authorised by the Federation. Background

2 In order to deal with the application and the competing submissions of the parties, it is necessary to set out in summary form some of the background circumstances that gave rise to the making of the dispute orders. This background is taken from the decision of the Full Bench. An industrial claim made by the respondent on behalf of its members resulted in agreement being made with the applicant for salary increases of 12 per cent over three years,

on the basis that if the parties failed to reach agreement between themselves or through a process of conciliation over the teaching hours issue, the matter would proceed to arbitration for resolution." (At [28])

The "teaching hours issue" was not resolved by discussion between the parties or after lengthy and involved conciliation chaired by Walton J, Vice President. Consequently, this issue was arbitrated. The issue involved a consideration of direct teaching hours of work of TAFE teachers and time credit hours to fund the salary increases beyond 2.5 per cent each year. When the relevant Award was varied so as to provide for the salary increases totalling 12 per cent, there was a specific provision which was the subject of agreement by both parties that the Industrial Relations Commission of New South Wales should, if necessary, "arbitrate on and determine by June 2009, the employee related cost savings necessary to fund the salary increases under this Award" in default of agreement. Agreement not having been reached, as I have said, and conciliation having failed, the next step involved arbitration of the outstanding claim. 3 Notwithstanding that the Full Bench had ordered that the respondent file and serve its material in preparation for the arbitration proceedings, which were scheduled to commence on 14 September 2009, the respondent allegedly convened stop work meetings of TAFE teachers on 11 August 2009 contrary to a prior direction by the Commission that no such industrial action should take place. On 31 August 2009, the respondent indicated that there would be industrial action taken on 2 September 2009, which would be in the form of a 24-hour strike by TAFE teachers as well as a rally. The applicant sought the making of dispute orders. In orders made on 1 September 2009, the Full Bench, comprising Boland J, President, Sams DP and Grayson DP, made a number of dispute orders. The order that is relevant for the purpose of these proceedings is that:

the NSW Teachers Federation by its officers, employees and members employed by the Managing Director of TAFE are hereby ordered to refrain from taking industrial action including a 24-hour strike proposed to take place commencing 2 September 2009. That order, inter alia, was expressed to take effect from 2.30pm on 1 September 2009 and to remain in force for three months, unless earlier varied or rescinded. 4 In determining to make the dispute order, the Full Bench said:

[27] Resort by the Commission to the issuing of dispute orders is a rare occurrence. Most often disputes are resolved by conciliation, but if that is unsuccessful, by arbitration, usually in the complete absence of industrial action. In 2008 and 2009 the Commission has been able to assist in resolving every major wage dispute in the public sector with either no or minimal industrial disruption, despite seemingly intractable positions being adopted by both sides of the industrial relationship.

[28] The present dispute, however, is an exception. One can understand an organisation representing teachers having strong disagreement with any proposal to increase in direct teaching hours to fund the salary increases in excess of 2.5 per cent. The organisation is entitled to mount a case in opposition. But in the present case, the Teachers Federation has secured salary increases of 12 per cent over three years on the basis that if the parties failed to reach agreement between themselves or through a process of conciliation over the teaching hours issue, the matter would proceed to arbitration for resolution. That was always understood to be the case by the Federation to the extent that directions were made without demur from the Federation for the filing and serving of material in preparation for the arbitration proceedings scheduled to commence on 14 September 2009.

[29] By its conduct in organising and encouraging industrial action by its members employed at TAFE, the Federation is now undoubtedly attempting to pressure the Department to either forego its right to have the hours issue proceed to arbitration or to have the Department alter its position to the advantage of the Federation, but at the same time the Federation intends that its members should keep the benefits of the Recommendation it accepted in February 2009. It is a clear attempt to subvert the process that the Federation understood would occur from the outset in return for the substantial increase in salaries.

[30] The attitude of the Federation in pursuing a course of industrial action in this matter was indefensible, a fact reinforced by the Federation's weak defence of its position to embark on industrial action. That the Premier and/or Minister did not respond to the Federation's demand for them to intervene was to be completely expected given that the matter was proceeding before the Commission in conciliation, with dates having already been set for the matter to go to arbitration before a Full Bench, if conciliation was unsuccessful.

[31] The planned industrial action had the potential to be highly disruptive for students and employers in circumstances where the action was inexcusable. 5 On 26 October 2009, the respondent posted on its website an article entitled "Council Condemns TAFE Salaries Decision" in which it said that it was "appalled" at the decision of the New South Wales Industrial Relations Commission in granting the Department of Education and Training's application "for sweeping changes to the teaching and working conditions of TAFE teachers in NSW" and foreshadowed state wide meetings of TAFE members in the week beginning 9 November "to report and consider appropriate action." On 6 November 2009, it listed details of venues at which TAFE teachers might attend meetings at 9am on Tuesday 10 November "to hear the latest information from the Federation on the campaign to protect TAFE teachers' working conditions from the attack by the DET's new award." 6 On 9 November 2009, at 8.42am, Mr Phil Bradley, who described himself as "Assistant General Secretary (post school education)", forwarded an email with certain attachments to all Federal Representatives, head teachers, TAFE teachers' association, councillors, executive and "other Members" regarding the TAFE stop work meeting to be held the following day at venues shown in the attachments. Recipients were told to "stop work for up to three hours in order to attend, but please ensure you record your actual period of absence." 7 One of the attachments was entitled "Stop work meeting" and indicated that classes would be suspended for up to three hours from 9am, Tuesday 10 November 2009. The stop work meeting was intended:

to protest against a proposal that (members) be required to work drastically increased hours. Negotiations with the Department of Education and Training have continued all year, and the outcome of the Industrial Relations Commission case impacts heavily on teaching and student learning conditions. Teachers are stopping work to protest these negative changes. 8 On 10 November 2009, an article appeared on the respondent's website stating:

Thousands of striking TAFE teachers attending stop work meetings across the State today voted overwhelmingly (99.9 per cent) to reject the Work Choices style changes to their working conditions announced in the recent judgment of the NSW Industrial Commission. Teachers at some centres were so incensed that they voted not to return to work today.

The article quoted Bob Lipscombe, said to be "President of the NSW Teachers Federation" as saying:

TAFE teachers today have overwhelmingly rejected the appalling decision of the NSW Industrial Relations Commission to introduce Work Choices style changes to their working conditions. There was then reference to the possibility of further industrial action. 9 It is against the above factual background as established by evidence tendered in the proceedings that I consider the application brought by the applicant. It is brought under s 139 of the Industrial Relations Act 1996 ("the Act"), which is in the following terms:

(1) The Commission, on application, must deal expeditiously with an alleged contravention of a dispute order. The application may be made by the person who applied for the order or any other person who was authorised to apply for the order.

(2) Before dealing with an alleged contravention of the order, the Commission is required to summon the person alleged to have contravened the order to show cause why the Commission should not take action for the contravention.

(3) The Commission may, after hearing any person who answered the summons to show cause and considering any other relevant matter, do any one or more of the following: (a) dismiss the matter if it finds that the dispute order was not contravened or if it finds that the circumstances were such that the Commission should take no action on the contravention,

(b) cancel the approval of an enterprise agreement,

(c) suspend or modify for any period all or any of the entitlements under an industrial instrument,

(d) cancel the registration of an industrial organisation or take any other action authorised by Division 2 of Part 3 of Chapter 5,

(e) impose a penalty on an industrial organisation or an employer as provided by subsection (4),

(f) make any other determination that the Commission considers would help in resolving the industrial dispute. (4) The maximum penalty that may be imposed on an industrial organisation or employer is: (a) except as provided by paragraph (b) - a penalty not exceeding in total $10,000 for the first day the contravention occurs and an additional $5,000 for each subsequent day on which the contravention continues, or

(b) if a penalty has previously been imposed on the industrial organisation or employer for a contravention of an earlier dispute order - a penalty not exceeding in total $20,000 for the first day the contravention occurs and an additional $10,000 for each subsequent day on which the contravention continues. (5) Any such penalty may be recovered in the same way as a penalty imposed by the Commission for an offence against this Act. 10 It was common ground that the maximum penalty applicable, in the circumstances of these proceedings, was $10,000. 11 The provisions of s 139 of the Act and relevant authorities have recently been considered by Staff J in this Court in Director General, NSW Department of Education and Training v NSW Teachers Federation [2010] NSWIRComm 44. It will be observed that those proceedings are between the same parties as these proceedings. In fact, it was common ground between the parties that the underlying industrial disputation which gave rise to those proceedings is the same industrial disputation at the heart of these proceedings. The Court was informed during submissions that after the expiry of the dispute orders made by the Full Bench of the Commission on 1 September 2009, there was a continuation of industrial action which culminated in an application made by the applicant for further dispute orders. The breach of those dispute orders was the subject of an application brought under s 139 of the Act and is dealt with in the judgment of Staff J. 12 The comprehensive discussion of the relevant principles undertaken by Staff J and his Honour's summary of the relevant principles, which I adopt, with respect, obviates the necessity for me to undertake any in depth consideration of the relevant principles. 13 I set out [34] to [36] of the judgment of Staff J as providing the principles against which a consideration of this matter needs to be undertaken.

[34] In Bluescope Steel (AIS) Ltd v AWU and Anor (No 2) Boland J (as he then was) in considering the imposition of a penalty under s 139(3)(e) stated: [36] In Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No. 2) (1999) 94 IR 231, Branson J considered the principles that should inform a court in determining the amount of penalty to be imposed on a defendant for the contravention of Part XA - Freedom of Association of the Workplace Relations Act 1996 (Cth). At [8] of her judgment her Honour stated: [8] The following matters, which are not intended to comprise an exhaustive list, seem to me to be considerations to which the Court may appropriately have regard in determining whether particular conduct calls for the imposition of a penalty, and assuming that it does, the amount of the penalty: (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. [37] The list of relevant matters identified by her Honour is helpful in compiling a similar list that may be relevant in respect of contraventions of dispute orders under s 139 of the Industrial Relations Act where the conduct constituting a contravention calls for the imposition of a penalty under s 139(3)(e). In my opinion, the matters that may be considered to be relevant and appropriate are: (a) The circumstances in which the relevant contravention took place (including whether the contravention was undertaken in deliberate defiance or disregard of the dispute order); (b) Whether the person found to have been in contravention of a dispute order has previously been found to have engaged in conduct in contravention of an earlier dispute order (in this respect see s 139(4)(b), which provides for higher maximum penalties where there has been an earlier contravention);

(c) The consequences of the conduct found to be in contravention of the dispute order;

(d) The need, in the circumstances, for deterrence;

(e) Any relevant subjective factors including undertakings regarding future conduct.

[35] His Honour's reasoning in determining the quantum of penalty to be imposed was approved by the Full Bench in Australian Workers' Union NSW v Bluescope Steel (AIS) Pty Ltd at [72] (although the penalties imposed were themselves overturned for other reasons relating to the maximum penalties applicable to the contraventions).

[36] In exercising the discretion as to an appropriate penalty under s 139(3)(e) of the Act, it is necessary for the Court to consider the overall culpability of the guilty person, whilst noting that the imposition of a penalty under s 139 is not an application of the criminal law: see BHP Steel Ltd v The Australian Workers' Union, New South Wales (at [94] - [99]). Regard must also be had to the fact that the legislature has provided for a higher maximum penalty for the first day of the contravention and a lower penalty for each subsequent day the contravention occurs. 14 However, it is also necessary to make reference to one additional matter, namely the context in which dispute orders are made and the part that dispute orders play in the overall regulation of industrial matters in New South Wales. Chapter 3 of the Industrial Relations Act deals with industrial disputes and provides for mandatory conciliation and then arbitration. There is provision in the Act for the enforcement of awards and determinations made by the industrial tribunal. Furthermore, the tribunal is empowered to make dispute orders (s 136) of a kind described in s 137 and subject to conditions set out in s 138. Section 139 empowers this Court to impose a penalty for breach of a dispute order. Accordingly, the regulation of industrial disputes in New South Wales involves the empowerment of a third party umpire to make binding orders on parties which can be enforced through mechanisms established by the State and which include the creation of civil penalties as part of the armoury of measures that may be taken to ensure compliance with and enforcement of awards, orders and determinations. 15 The existence of a system such as that established by the Industrial Relations Act 1996 reflects a sophisticated and civilised approach to dealing with industrial disputation, including differences of opinion which do not necessarily manifest themselves in any industrial action. In any sophisticated and civilised regime that regulates the manner in which persons, and entities that represent them, conduct their affairs, it is necessary to provide an overarching structure to ensure that the regime works in practice. Without such an overarching structure, there would be no means of compelling obedience to authority and this would lead to anarchy. So that any teacher who might read this judgment may fully understand the situation to which I am referring, the need for a hierarchical structure of authority, and means of implementing it, is replicated in TAFE and school campuses. 16 As was observed by Staff J in Director General, NSW Department of Education and Training, previously referred to:

the making of a dispute order is a serious step given the consequences for contravention and persons against whom a dispute order is made are bound to take it seriously, especially members, officials and employees of organisations who may be putting in jeopardy the very existence of their organisation … (At [37]). 17 The principles established by this Court and its predecessor require that the starting point for the assessment of an appropriate penalty is a consideration of the objective seriousness of the breach by the respondent of the dispute order. As the evidence to which I have referred demonstrates, there was on the part of the respondent a deliberate and planned course of conduct leading up to the arranging and holding of the stop work meeting. That stop work meeting was undertaken in calculated disregard of the dispute orders issued by the Full Bench of the Commission. The circumstances in which that stop work meeting was conducted are indicative of an act of defiance in reaction to a decision of a Full Bench of the Commission. It is representative of a disregard for and dismissal of the authority of the New South Wales Industrial Relations Commission. This type of conduct if committed by a student at a TAFE college would not and could not be tolerated because of the obvious impact that it would have on the integrity of the organisation and the authority of those conducting it. 18 The respondent sought to argue that the breach of the dispute order was in some way less serious because of a number of matters. 19 It was said that the stop work meeting was of short duration, was scheduled in advance and permitted TAFE institutes to prepare and implement contingencies. Such a submission ignores the reality of the context in which the stop work meeting was organised and conducted. It ignores the fact that these proceedings are concerned with a breach of dispute orders which have the force of law. It assumes that a stop work meeting of up to three hours would have a limited impact upon activities at TAFE colleges. In the same way, it was submitted:

there is no evidence that teaching programs were disrupted in a manner that could not be recovered in the course of the semester or that any loss of revenue occurred. I am sure that teachers and students alike would be surprised to learn that there was so much "fat" in TAFE curricula that would easily accommodate the making up of three hours of lost time. In any event, the duration of the stop work meeting is not to the point. What is of significance is the fact that there was a blatant and calculated breach of the dispute orders made by a Full Bench of the Commission. 20 It was submitted that the Court should take into account the purposes of the stop work meeting. It was said that one of the purposes "was to provide information to members in relation to significant changes to their conditions of employment and to consider appropriate action." I firstly observe that this is a benign interpretation of the purpose of the meeting. Material circulated to members of the respondent, which became evidence in these proceedings, indicated that the stop work meeting was held "to protest against the proposal that they be required to work drastically increased hours." In reality, the stop work meeting may be characterised in terms that are readily understood by those with experience in industrial matters. It was, in effect, a strike. However, no matter how one characterises it or its purpose, it was conducted in breach of the dispute orders made by a Full Bench of the Commission. 21 The respondent pointed to the fact that ultimately the dispute between it and the New South Wales Government had been resolved. It was said that this was relevant to the consideration of the assessment of penalty by the Court. The respondent submitted,

The Federation has been able to successfully engaged in discussions with the Government and resolve the dispute. The dispute is now in the past. There is no need for the Court to take any action with respect to the contravention in order to assist in resolving the industrial dispute. There is no necessity for a penalty to be imposed to restore 'industrial order' or prevent the escalation of the dispute as the dispute has been settled through the positive steps taken by the Federation. In support of that submission, the respondent relied on s 3 of the Industrial Relations Act which sets out the objects of the Act. It is in the following terms:

(a) to provide a framework for the conduct of industrial relations that is fair and just,

(b) to promote efficiency and productivity in the economy of the State,

(c) to promote participation in industrial relations by employees and employers at an enterprise or workplace level,

(d) to encourage participation in industrial relations by representative bodies of employees and employers and to encourage the responsible management and democratic control of those bodies,

(e) to facilitate appropriate regulation of employment through awards, enterprise agreements and other industrial instruments,

(f) to prevent and eliminate discrimination in the workplace and in particular to ensure equal remuneration for men and women doing work of equal or comparable value,

(g) to provide for the resolution of industrial disputes by conciliation and, if necessary, by arbitration in a prompt and fair manner and with a minimum of legal technicality,

(h) to encourage and facilitate co-operative workplace reform and equitable, innovative and productive workplace relations. 22 In particular, the respondent relied on the provisions of s 3(g) which emphasises the resolution of industrial disputes by conciliation and, if necessary, by arbitration. The respondent then directed the attention of the Court to s 139(3)(f), the provisions of which I have previously set out in these reasons for judgment. The respondent submitted that any order that the Court should make should be directed to one that "would help in resolving the industrial dispute." It was said that the imposition of a monetary penalty would not help in resolving the industrial dispute, and, in any event, the dispute had been resolved. Therefore, presumably, there was no need to impose a penalty or at least a penalty of a high amount. 23 This submission, in that it relies on s 139(3)(f), is misconceived. That provision refers to "any other determination" which must be a reference to a determination other than any of the matters referred to earlier in (a) to (e). It ignores the fact that all of the earlier matters involve the imposition of a sanction. There is nothing within s 139(3)(f) which would derogate in any way from recourse to any of the sanctions earlier referred to in the subsection. 24 In the same way, I would regard the reference to the objects of the Act as contained within s 3 as being irrelevant to the determination of these proceedings brought under Part 2 of Chapter 3 of the Act. The substance of this submission may be dealt with shortly. The essence of these proceedings is that they are directed to the contravention of a dispute order. They are not concerned, other than by way of background, with the underlying industrial dispute. The dispute order is, as I have previously said, a manifestation of the authority of the Industrial Relations Commission of New South Wales whose orders, awards and determinations have the force of law. This reflects the will of the legislature. On this basis, the fact that the underlying industrial dispute has been resolved is irrelevant for the purpose of the determination of these proceedings. This is particularly so because the Court has not been informed as to the basis upon which the dispute was resolved. There are logically many possible reasons why the underlying dispute may have resolved and there are many possible bases upon which that might occur. Whether and to what extent the fact that the underlying dispute has been resolved may have been taken into account in other proceedings brought under Part 2 of Chapter 3 of the Act is, in my opinion, irrelevant for the purpose of the determination that I am required to make in these proceedings. 25 In all the circumstances, I regard the breach by the respondent of the dispute order as a most serious matter. Furthermore, the Court is required to have regard to the deterrent effect of any monetary penalty that is imposed. This deterrent effect will apply to all others within the State of New South Wales who may be the subject of dispute orders made by the Industrial Relations Commission. It will also apply to this respondent. 26 In the context of the specific deterrent effect on this respondent, it was submitted on its behalf that "there is no reason to believe that the Federation is likely to contravene dispute orders in the future …." Of course, this is contrary to the later contravention of a dispute order by the same respondent, which was the subject of the proceedings before Staff J in Director General NSW Department of Education and Training, to which I have previously referred. In those proceedings, the respondent pleaded guilty to having contravened a dispute order made on the 4 February 2010, such contravention occurring on 11 February 2010. 27 Given the manner in which the respondent went about organising the stop work meeting in flagrant breach of the dispute order, this Court can have no confidence that the respondent will not breach any further dispute order if it determines that it should act in that way. I intend taking into account the deterrent effect both generally and on this respondent to the fullest possible extent when assessing the appropriate penalty. 28 There is a subjective matter which can be taken into account to mitigate the amount of the penalty to be assessed, namely the fact that the respondent indicated that it was prepared to plead guilty at an early point in time in the proceedings. 29 However, the respondent further submitted that its admission of a contravention of the dispute order constituted evidence

of contrition and recognition of conduct in breach of its obligations under the dispute orders … it should be given proper weight should the Court be giving consideration to the imposition of a penalty. I should state at the outset in response to this submission that at no time during the course of the proceedings did the respondent give any hint of apology for its conduct nor did it give any indication of any feelings of remorse or contrition for that conduct. To the contrary, the respondent appeared to be submitting that it was entitled to contravene the dispute order because of the nature of the underlying dispute. I do not accept in these circumstances that the entry of a plea of guilty constitutes an indication of contrition or remorse. It is equally explicable in terms of a realisation that if the proceedings had been litigated the inevitable result would have been a finding of guilt. 30 I am not prepared to accord any discount to the respondent for this matter. 31 I have previously indicated the maximum penalty is $10,000. Having regard to the serious nature of the offence, the need to ensure deterrence and the subjective matter to which I have previously referred, I am of the opinion that an appropriate penalty in all the circumstances is $7000. 32 There is no question of any order for costs being made. 33 For completeness, I should note that the disposal of the proceedings consequent upon the entry of a plea of guilty has obviated the need for me to deliver reasons for judgment when dealing with interlocutory matters concerning the appropriate standard of proof to be applied in the course of the proceedings and concerning also the validity of a summons for the production of documents. I should also add that the Court is required by s 139(1) to deal with applications brought under Part 2 of Chapter 3 of the Act "expeditiously." Despite the fact that the Court has endeavoured on a number of occasions to bring the proceedings to a final hearing, because of reasons that are personal to each of the parties, the disposal of these proceedings has been anything but expeditious. I emphasise that the reason for this lies with the parties, and in no manner reflects the inability or reluctance of this Court to deal with the proceedings. Orders

34 I make the following orders: 1. The New South Wales Teachers Federation is found guilty of contravening the dispute order made by Boland J, President, Sams DP and Grayson DP on 1 September 2009 in proceedings IRC 513 of 2009. 2. I impose a monetary penalty on the New South Wales Teachers Federation of $7000, which penalty is to be paid within 28 days of the date of this judgment.

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