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

Federal Court of Australia|2016-04-22|Before: White J

The Second Respondent, Luke Stephenson, contravened s 500 of the Fair Work Act 2009 (Cth) (the FW Act) on 11 November 2013 by acting in an improper manner, while seeking to exercise rights in accordance with Pt 3-4 of the FW Act, by entering the South Australian Health and Medical Research Institute construction site on North Terrace, Adelaide (the SAHMRI site) without having provided notice of entry as required by s 487 of the FW Act and by remaining on the SAHMRI site after he was asked to leave by a representative of Hindmarsh Construction Australia Pty Ltd (Hindmarsh), the head contractor and occupier of the SAHMRI site.
By reason of s 793 of the FW Act, the First Respondent, the Construction, Forestry, Mining and Energy Union (CFMEU), contravened s 500 of the FW Act by the conduct of Mr Stepenson constituting the contravention the subject of the first declaration herein.
The Fourth Respondent, Aaron Cartledge was knowingly concerned in the contravention of s 500 by the Second Respondent and, by reason of s 550 of the FW Act, thereby contravened s 500 himself.
The Third Respondent, David Kirner, contravened s 500 of the FW Act on 22 November 2013 by acting in an improper manner, while seeking to exercise rights in accordance with Pt 3-4 of the FW Act, by entering the SAHMRI site without having provided notice of entry as required by s 487 of the FW Act, by failing to complete all of the formalities in the SAHMRI site Visitors' Book, and by failing to leave the SAHMRI site immediately after he was requested to do so by a representative of Hindmarsh.
By reason of s 793 of the FW Act, the CFMEU contravened s 500 of the FW Act by the conduct of Mr Kirner constituting the contravention the subject of the fourth declaration herein. THE COURT ORDERS THAT:

WHITE J: 1 On 20 November 2015, I published my reasons for findings that each of the respondents had contravened s 500 of the Fair Work Act 2009 (Cth) (the FW Act) by acting in an improper manner in the exercise, or proposed exercise, of rights of entry at the South Australian Health and Medical Research Institute Construction Site on North Terrace, Adelaide (the SAHMRI site) in November 2013: DFWBII v CFMEU [2015] FCA 1287 (the principal judgment). I then adjourned the matter for separate hearing of the Director's claims for declarations and penalties. 2 This judgment concerns those matters. It should be read in conjunction with the principal judgment as I will assume knowledge by the reader with its contents. Whenever possible, I will avoid repetition. 3 I have delivered two other judgments today in proceedings commenced by the Director concerning contraventions by the CFMEU and its officials of provisions in the FW Act. They are DFWBII v CFMEU [2016] FCA 413 (the Lend Lease Sites Penalty Judgment) and DFWBII v O'Connor [2016] FCA 415 (the 2016 O'Connor Judgment). In the Lend Lease Sites Penalty Judgment, I addressed several matters which are common to the three sets of proceedings. In the interests of brevity and the avoidance of repetition, I incorporate by reference into these reasons some of the content of the Lend Lease Sites Penalty Judgment. They are the sections in that judgment appearing under (and including) the headings: Penalties: general principles [12]-[22] The significance of previous contraventions [23]-[32] The CFMEU record [33]-[38] Contraventions of s 500 in context [39]-[47] Single penalties [48]-[58] The totality principle [59]-[64] Declarations: general principles [80]-[82]

Declarations 4 The declarations sought by the Director with respect to Mr Stephenson's contravention of s 500 on 11 November 2013, Mr Cartledge's involvement as an accessory in that contravention, Mr Kirner's contravention on 22 November 2013, and with respect to the contraventions by the CFMEU by reason of s 793 of the FW Act are appropriate, and will be made. They will serve the purposes to which reference was made in the Lend Lease Sites Penalty Judgment at [80]-[82]. 5 I record that the Director did not seek a declaration that the CFMEU had, by reason of Mr Cartledge's conduct as an accessory to Mr Stephenson's contravention, committed a separate contravention itself of s 500. It was implicit in the Director's submission about this that he did not, in consequence, seek the imposition of a penalty on the CFMEU for such a separate contravention of s 500.

Mr Stephenson 6 Mr Stephenson contravened s 500 by entering the SAHMRI site at about 10 am on 11 November 2013 without having provided any notice of entry and by then defying Mr Bickerdike's request that he leave. Instead he remained on the site for approximately 30 minutes, during which time he spoke to employees of a sub-contractor while they were taking their break from work. As noted in the principal judgment at [33]-34], Mr Bickerdike, the Senior Project Manager on the SAHMRI site, had told Mr Stephenson that he was in breach of the FW Act and requested him to leave. Mr Stephenson refused to do so. 7 At the time of his contravention, Mr Stephenson was an employed organiser of the CFMEU. 8 Mr Stephenson has not proffered any explanation for his conduct on 11 November 2013 at the SAHMRI site. 9 I accept the Director's submission that Mr Stephenson's conduct amounted to a deliberate and premeditated contravention of s 500. Its deliberateness can be inferred from the conduct itself. Further, as noted in the principal judgment at [101], Mr Stephenson had previously provided notices for his entries onto the SAHMRI site and he did so again after 11 November 2013, indicating his awareness of the requirement for such notices. Further still, the deliberateness is evident in the conversation Mr Cartledge had with Mr Bickerdike shortly before the entry. When the latter inquired of Mr Cartledge why no notice had been provided by Mr Stephenson, Mr Cartledge told him that no notice would be provided, and that Mr Stephenson would follow any reasonable safety direction but no more. In the Amended Defence filed three days before trial, Mr Cartledge admitted that, in his capacity as State Secretary of the South Australian Branch of the CFMEU Construction and General Division, he had directed Mr Stephenson not to provide written notice of his entry and that he had conveyed this to Mr Bickerdike. 10 Accordingly, Mr Stephenson's contravention of s 500 should be characterised as an act of deliberate defiance of the requirements of the FW Act. For this reason alone, I do not accept the respondents' submission that Mr Stephenson's conduct is at the lower end of the scale. 11 Understandably, Mr Stephenson did not claim that the seriousness of his conduct was mitigated by Mr Cartledge's direction, as he was required to comply only with lawful directions. He has not made any expression of regret or apology. 12 I accept that, apart from his refusal to comply with Mr Bickerdike's request that he leave the site, Mr Stephenson did not otherwise engage in aggressive, threatening or abusive behaviour. 13 It is to Mr Stephenson's credit that he admitted his contravention. That indicates some willingness on his part to facilitate the course of justice. However, his acknowledgement was belated, being made only three days before the trial was to commence and well after the Director had provided his evidentiary material. In addition, Mr Stephenson had until that time asserted positively that he had been entitled to attend the site by reason of a standing invitation issued in early 2012. These matters reduce the amount of credit which can be afforded to Mr Stephenson for his acknowledgement, but it is nevertheless a mitigatory matter. 14 The Director did not suggest that Hindmarsh Construction Australia Pty Ltd (Hindmarsh), the head contractor and occupier of the SAHMRI site, suffered any quantifiable economic loss as a result of Mr Stephenson's conduct. There was, however, some inconvenience to Hindmarsh. Mr Bickerdike was distracted from his duties in having to confront Mr Stephenson. In addition, Mr McLeavey, the Senior Site Manager, was distracted from his duties by escorting Mr Stephenson throughout the period that he was on site. I take into account, however, that that same distraction of Mr McLeavey may have occurred had Mr Stephenson given the requisite notice of entry. 15 I take into account that Mr Stephenson had not, before 11 November 2013, been found to have contravened s 500 of the FW Act. However, he has been penalised in the Lend Lease Sites Penalty Judgment for contraventions of s 500 on 30 October 2013 (12 days before the subject contravention) and on 12 November 2013 (the next day). 16 In DFWBII v Stephenson [2014] FCA 1432, penalties of $1,700 and $2,300 were imposed on Mr Stephenson in respect of contraventions of s 500 on 31 March and 1 May 2014 and, in DFWBII v Cartledge [2014] FCA 1047, a penalty of $600 was imposed on him for a contravention of s 500 on 20 March 2014. In addition, Mr Stephenson has in the 2016 O'Connor Judgment delivered today been penalised for two contraventions of s 500 and one contravention of s 348 of the FW Act on 5 May 2014. The contraventions occurring after 11 November 2013 are relevant as they indicate that lenience cannot be extended to Mr Stephenson on the basis that the subject contravention was an isolated incursion into unlawful conduct. 17 Mr Stephenson is not of course to be punished again for those contraventions in respect of which penalties have already been imposed. Nor is he to be punished for those contraventions which have been the subject of other proceedings. 18 I accept that it is a matter of mitigation that Mr Stephenson, who is now 36 years old, has resigned as an organiser of the CFMEU. He has not worked for any union since July 2014 and no longer holds a permit under Pt 3-4. In addition, counsel for the respondents tendered a permanent impairment assessment made of Mr Stephenson on 26 November 2013 for workers compensation purposes. This indicates that Mr Stephenson has a permanent disability resulting from a lumbar disc herniation which affects his ability to engage in physical work. The Director conceded that it is unlikely that Mr Stephenson will work again as a union organiser and that this meant that the need for specific deterrence is less prominent in his case. I accept that that is a proper consideration. 19 The Director submitted that a penalty in the range of $1,000-$3,000 is appropriate. The respondents on the other hand contended for a penalty in the range $400-$600. In support of that submission, counsel submitted that Mr Stephenson's contravention should be regarded as being towards the lower end of the range of offences of its kind. As I have said, such a characterisation is inappropriate. Mr Stephenson's conduct was premeditated and deliberate; he defied Mr Bickerdike's request that he leave the site, and he remained on the site for approximately 30 minutes. 20 Although Mr Stephenson gets some credit for the matters I have mentioned, I consider that a penalty of $1,750 is appropriate.

Mr Cartledge 21 Mr Cartledge's acknowledgement that he had directed Mr Stephenson to enter the SAHMRI Site on 11 November without having provided a notice of entry makes his contravention as an accessory particularly serious. In addition, Mr Bickerdike's telephone call to Mr Cartledge before Mr Stephenson's arrival at the site gave Mr Cartledge an opportunity to withdraw his direction. He did not take advantage of that opportunity. The penalty to be imposed in his case should therefore reflect the defiance of the law involved in his conduct. 22 It is an aggravating circumstance that Mr Cartledge held a senior position, namely, State Secretary of the South Australian Branch of the CFMEU Construction and General Division. This is one of the most senior positions of the CFMEU in South Australia. It was within Mr Cartledge's power to give Mr Stephenson appropriate directions and he did not do so. Mr Stephenson was not of course obliged to comply with Mr Cartledge's directions, involving as it did an instruction that he behave unlawfully. It is however, a serious matter for a supervisor to direct a subordinate to act unlawfully. 23 As at November 2013, Mr Cartledge was himself a permit holder. In fact, he had held a permit since 1999. Mr Cartledge can be taken therefore to have been well aware of the requirements in the FW Act with respect to notices of entry. 24 As at November 2013, Mr Cartledge had no record of contraventions of the FW Act. That is to his credit. Mr Cartledge has been dealt with for a subsequent contravention, as in DFWBII v Cartledge, Mansfield J imposed a penalty of $3,000 on him for a contravention of s 500 on 20 March 2014. Mr Cartledge has also admitted that he contravened s 500 on 22 May 2014 (Action SAD 60 of 2015) for which a penalty hearing is yet to take place. Again, for the reasons already given, these subsequent contraventions are relevant for present purposes as they indicate that lenience cannot be extended on the basis that the contravention on 11 November 2013 was an isolated incursion into unlawful conduct. 25 Mr Cartledge's entry permit expired in March 2015 and he has not sought to renew it. His counsel submitted that this circumstance made considerations of personal and general deterrence less important in his case. I do not accept that submission. Mr Cartledge's contravention did not depend on him personally holding a permit. Further, he continues to be State Secretary of the Construction and General Division, and is still in a position to instruct CFMEU organisers as to their work. 26 I accept that it is relevant that no South Australian CFMEU official has been found to have contravened the FW Act by conduct occurring since July 2014, although the evidence does not permit a finding as to whether that is attributable in any way to conduct by Mr Cartledge. 27 Mr Cartledge's acknowledgement of his contravention is to his credit. However, as with Mr Stephenson, the weight which ordinarily would be attached to this circumstance is diminished by its belatedness. 28 The Director submitted that a penalty in the range $3,000-$4,000 was appropriate in Mr Cartledge's case. The respondents on the other hand suggested a penalty in the range $2,000-$3,000. 29 In my opinion, a penalty of $3,750 is appropriate. This would have been higher had Mr Cartledge's contravention on 11 November occurred after the contravention for which Mansfield J imposed a penalty and had he not acknowledged the contravention. The penalty of $3,750 reflects the particular seriousness of his conduct and the particular need for personal and general deterrence arising from the position which he holds.

Mr Kirner 30 In November 2013, Mr Kirner was the District Secretary of the Forestry and Furnishing Products Division of the CFMEU in South Australia. 31 Mr Kirner's contravening conduct is described at [40]-[58] and [175]-[179] of the principal judgment. Essentially, Mr Kirner entered the construction area of the SAHMRI site at about 11 am on 22 November. Having been told (in effect) that Mr Bickerdike was coming, he waited for about five minutes in a position some 8 m or so inside the perimeter fence. Initially Mr Kirner refused Mr Bickerdike's request that he leave and an unpleasant exchange between Mr Bickerdike and him then occurred. Mr Kirner then decided to leave, but did not give Mr Bickerdike an indication that he was doing so. Instead, he walked further into the site to ask a Hindmarsh employee to let the Ausrise employees know that the Enterprise Bargaining Agreement ballot would now take place on the North Terrace footpath. All in all, it is likely that Mr Kirner was on the site at this stage for about 10-15 minutes. 32 In the principal judgment, I rejected Mr Kirner's claims that he had been entitled to enter the site pursuant to a standing invitation issued to him by Hindmarsh; that he had been entitled to enter by reason of the request by Ausrise that he conduct the EBA ballot; and that he had been entitled to enter pursuant to s 117 of the Work Health and Safety Act 2012 (SA). I was satisfied that Mr Kirner knew that a notice of entry was required but thought that he could get away without providing such a notice on this occasion. His belief in that respect was, in part, informed by the circumstance that he had also been able to do so on several previous occasions. Mr Kirner's knowledge that notices of entry were required arose from Mr Bickerdike's statements to him earlier in 2013 and, as found in the principal judgment at [100], Mr Kirner had previously provided such notices. 33 I found that Mr Kirner's conduct was improper because he had entered the site without providing a notice of entry, without completing all the details required in the Visitors' Book and because he had not complied immediately with Mr Bickerdike's request that he leave. In assessing the significance of Mr Kirner's conduct, I think it reasonable to infer that he was aware at the time that proceedings had been taken against the CFMEU and other of its officials for contraventions of s 500. Accordingly, Mr Kirner can be taken to have been aware of the need to comply with the requirements of the FW Act. 34 The Director does not allege that Mr Kirner's contravention caused any quantifiable loss or damage to Hindmarsh. There was, on my findings at [56], a short pause in the work on a structural plenum by reason of Mr Kirner walking between a parked concrete truck and a concrete pump and because those in the vicinity paused to look at the confrontation between Mr Bickerdike and Mr Kirner. However, these disruptions for work can have been for only a few minutes and there is no suggestion that they had a practical consequence. It is appropriate however, to take into account that Mr Bickerdike was distracted from the performance of his usual work while addressing Mr Kirner's unlawful entry. 35 I found that Mr Kirner had been the cause of an unpleasant interchange at the site: at [178]. Some of the submissions of the respondents' counsel on the penalty hearing sought, inappropriately, to undermine that finding by attributing responsibility to Mr Bickerdike. I consider that it is appropriate to proceed on the basis that, had Mr Kirner not entered without providing a notice of entry, and had he complied immediately with Mr Bickerdike's request, the unpleasant interchange which followed would not have occurred. 36 I agree with the submission of counsel for the respondents that Mr Kirner's failure to enter all the required details in the Visitors' Book is not, by itself, of much moment. First, it appears to have been inadvertent omission. Secondly, a review of the Visitors' Book indicates numerous other instances in which visitors have not completed all the details and Mr Bickerdike acknowledged Hindmarsh had not taken action to enforce compliance. 37 It is to Mr Kirner's credit that, although having worked for the CFMEU and a predecessor union from 1987 to 1991 and again from 1994 until the present time, and having held an entry permit throughout, he has no record of any contraventions of the FW Act or its predecessors. In addition, the Director acknowledged that there are no pending allegations of unlawful conduct by Mr Kirner which are yet to be determined by a court. 38 It is also to Mr Kirner's credit that, having been alerted on 22 November 2013 to Mr Bickerdike's interest in his presence, he had waited near the entrance gate for Mr Bickerdike to arrive. He did not attempt to evade Mr Bickerdike or simply to carry on regardless. On the other hand, Mr Kirner has made no expressions of regret or contrition, nor has he expressed a determination to ensure that he complies with s 500 in the future. 39 As Mr Kirner contested the Director's allegations at trial, he is not entitled to any credit for an acknowledgement of his contraventions and the associated willingness to facilitate the course of justice. 40 Counsel for the respondents submitted that it was a circumstance of mitigation that Mr Kirner had attended the site for proper (and otherwise lawful) purposes, namely, to conduct an EBA ballot and to discuss with employees of Construction Glazing the circumstances of their workmate and the Mates In Construction program. I accept that these were in themselves proper purposes for which Mr Kirner was entitled to exercise his right of entry. However, I do not regard them as mitigatory presently as they constitute the kind of purposes authorised by s 484 and in respect of which s 500 operates. If Mr Kirner had not entered for a s 484 purpose, there would not have been a contravention of s 500, although his conduct may have been unlawful for other reasons. 41 Counsel for Mr Kirner submitted (correctly) that s 546 does not oblige the Court to impose a pecuniary penalty in every case: instead it vests a discretionary power in the Court. Counsel submitted that the discretion should be exercised against the imposition of a penalty in Mr Kirner's case. He emphasised the proper purposes for which Mr Kirner had entered the SAHMRI site, the fact that he had been on the site for no more than 15 minutes, that his entrance had not caused any material loss or damage, and Mr Kirner's good record. 42 Counsel also drew attention to s 510(1) of the FW Act which has the effect that, on the imposition of a penalty for a contravention of s 500, the FWC must consider the revocation or suspension of Mr Kirner's permit. Section 510 provides (relevantly): When the FWC must revoke or suspend entry permits When the FWC must revoke or suspend entry permits (1) The FWC must, under this subsection, revoke or suspend each entry permit held by a permit holder if it is satisfied that any of the following has happened since the first of those permits was issued: … (d) the permit holder, or another person, was ordered to pay a pecuniary penalty under this Act in relation to a contravention of this Part by the permit holder; … (2) Despite subsection (1), the FWC is not required to suspend or revoke an entry permit under paragraph (1)(d) or (f) if the FWC is satisfied that the suspension or revocation would be harsh or unreasonable in the circumstances. … Minimum suspension period (4) A suspension under subsection (1) must be for a period that is at least as long as the period (the minimum suspension period) specified in whichever of the following paragraphs applies: (a) if the FWC has not previously taken action under subsection (1) against the permit holder - 3 months; (b) if the FWC has taken action under subsection (1) against the permit holder on only one occasion - 12 months; (c) if the FWC has taken action under subsection (1) against the permit holder on more than one occasion - 5 years. … 43 Counsel accepted that the imposition of a pecuniary penalty for Mr Kirner's contravention of s 500 will satisfy the circumstance listed in s 510(1)(d) and that, subject to one qualification, the FWC will be obliged to revoke or suspend his entry permit. Given Mr Kirner's continued role with the CFMEU, such a revocation or suspension would be a significant impediment to the continued performance by him of all his duties. 44 The qualification to which I referred arises from subs (2). The FWC is not required to suspend or revoke an entry permit if satisfied that the suspension or revocation would be "harsh or unreasonable" in the circumstances. 45 I accept that the potential for a revocation or suspension of Mr Kirner's entry permit is a matter to which the Court may presently have regard. However, at the same time, I do not consider that it is a matter to which the Court should attach significant weight. That is because s 510 should be understood as the provision by the legislature of an additional consequence in those cases in which the Court has considered it appropriate for independent reasons that a penalty be imposed. It would subvert that legislative intention if the potential for revocation or suspension became a reason for the Court not to impose a penalty. 46 Although I found in the principal judgment that Mr Kirner's conduct was far from being the most egregious conduct of its kind, at [178], I do not accept the respondents' submission that it represents the least serious, on a scale of seriousness, of s 500 contraventions. Mr Kirner's conduct was deliberate and not unintentional or accidental. He thought that he could "get away" with not providing a notice and, having been confronted by Mr Bickerdike, did not accede immediately to his request that he leave the site. In my opinion, a pecuniary penalty should be imposed. 47 The Director contended for a penalty in the range of $1,000-$2,000. In my opinion, a penalty in that range is inappropriate. A penalty of $700 will be imposed.

CFMEU 48 Before the Director's concession that a penalty should not be imposed on the CFMEU in respect of Mr Cartledge's conduct, he had submitted that a single penalty in the range $30,600-$61,200 should be imposed on the CFMEU in respect of its three contraventions constituted by the conduct of Mr Stephenson, Mr Cartlege and Mr Kirner. His submissions indicated that this range was obtained by accumulating three individual penalties in the range $10,200-$20,400. The respondents, on the other hand, submitted that a single penalty in the range $10,000-$17,500 was appropriate. 49 For the reasons given in the Lend Lease Sites Penalty Judgment at [48]-[58], I do not accept that it is open to the Court to impose a single penalty for those contraventions. Further, and in any event, the CFMEU contravention on 22 November 2013 is separate and distinct from its contraventions on 11 November 2013 so that the contraventions could not be said to have occurred in a single course of conduct. 50 I accept the Director's submission that the CFMEU is a large, prominent and influential national union, that there is no evidence that it has an incapacity to pay penalties of the kind he has proposed, that it has not made any expressions of contrition or regret or even of a determination to ensure that both it and its officials comply with Pt 3-4 in the future, and that it has not provided any evidence of instructions or training to its officials with respect to the need to comply with the requirements of Pt 3-4. The CFMEU's dismal record means that deterrence must be a particularly important consideration in the penalties imposed on it. 51 The contravention of s 500 by the CFMEU constituted by Mr Stephenson's conduct is particularly serious. That seriousness arises from the circumstance that a senior official of the CFMEU had directed one of the employees for whom he was responsible to engage in unlawful conduct and that the employee committed the contravention by giving effect to that direction. 52 For this reason, I do not regard the penalty ranges suggested by the Director (which are the same in each case) to be appropriate, as they do not differentiate between the circumstances of the contraventions. 53 In my opinion, a penalty of $30,000 is appropriate in respect of the contravention constituted by Mr Stephenson's conduct. 54 The contravention constituted by Mr Kirner's conduct is less serious, and that should be reflected in the penalty. I consider that a penalty of $18,000 is appropriate. 55 Each of the penalties is to be paid to the Commonwealth.

Payment of the penalties 56 In his written outline of submissions, the Director sought an order that the penalties to be paid by the individual respondents be paid by them personally and that they not be reimbursed, either directly or indirectly, by the CFMEU. However, at the oral hearing, the Director withdrew that submission. Accordingly, it is not necessary to consider the questions of power and discretion to which the foreshadowed submission gave rise.

Summary 57 For the reasons given above, I make the declarations substantially in the form sought by the Director. In addition, I impose penalties in respect of the contraventions of s 500 at the SAMHRI site on 11 and 22 November 2013 as follows: Name Individual CFMEU 11 November 2013 Mr Stephenson $1,750 $30,000 Mr Cartledge $3,750 - 22 November 2013 Mr Kirner $700 $18,000

58 These penalties are to be paid to the Commonwealth. I certify that the preceding fifty-eight (58) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice White.

SCHEDULE OF PARTIES SAD 219 of 2014 Respondents Fourth Respondent: AARON CARTLEDGE

Fair Work Act 2009(Cth)ss 348, 500, 510, 546, 793, Work

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