Director of the Fair Work Building Industry Inspectorate v Robinson [2016] FCA 525 | Case summary

Director of the Fair Work Building Industry Inspectorate v Robinson [2016] FCA 525 | Case summary | Zoe

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CHARLESWORTH J: 1 Laing O'Rourke Construction Australia Pty Ltd (O'Rourke) is a construction company. It performs work at a liquefied natural gas project in the Northern Territory (Project) pursuant to a subcontract with JKC Australia LNG Pty Ltd (JKC). The Project is situated at Blaydin Point, about 26 km southeast of Darwin. 2 JKC manages a bus transport system known as "park and ride", whereby employees of contractors who perform work at the Project (including those of O'Rourke) park their vehicles at designated locations in or near Darwin and then travel to and from the Project by bus. Two of those locations are known as the Yarrawonga Park and Ride (situated at Yarrawonga) and the Airport Park and Ride (situated at Darwin Airport). 3 On 19 June 2014, O'Rourke employees refused to board the buses at the Yarrawonga Park and Ride and the Airport Park and Ride to attend work at the Project. They remained absent from work for the remainder of the day. 4 The First, Second and Third Respondents are union officials who organised and encouraged the O'Rourke employees to refuse to attend work. In doing so, they organised industrial action within the meaning of, and in contravention of, s 417 of the Fair Work Act 2009 (Cth) (FW Act). The Fourth and Fifth Respondents are the unions who employed the officials. They are taken to have engaged in the same conduct as their respective officials by reason of s 793 of the FW Act, to which I will later refer. 5 Section 417 of the FW Act is a civil remedy provision: s 539 of the FW Act. 6 The Director of the Fair Work Building Industry Inspectorate (Director) is an inspector for the purposes of s 539 of the FW Act. He seeks declaratory orders in respect of the contraventions and the imposition of civil penalties on all of the respondents pursuant to s 546(1) of the FW Act. 7 The proceedings were commenced by Originating Application dated 27 July 2015. In its original form, it sought declarations that the respondents had contravened both s 417 and s 348 of the FW Act. By amendments to the Statement of Claim made on 10 February 2016, the allegations that the respondents had contravened s 348 were withdrawn. Shortly afterward, the respondents filed an Amended Defence admitting all of the facts alleged against them and further admitting that, by reason of those facts, each of them had contravened s 417 of the FW Act.

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Legislation 9 It is convenient at this early juncture to set out some of the relevant provisions of the FW Act. As will be seen, the text of s 417 and the context in which it appears in the FW Act suggests that it is a central provision when viewed against the objectives of the legislation, as expressed in s 3: 3 Object of this Act The object of this Act is to provide a balanced framework for cooperative and productive workplace relations that promotes national economic prosperity and social inclusion for all Australians by: (a) providing workplace relations laws that are fair to working Australians, are flexible for businesses, promote productivity and economic growth for Australia's future economic prosperity and take into account Australia's international labour obligations; and (b) ensuring a guaranteed safety net of fair, relevant and enforceable minimum terms and conditions through the National Employment Standards, modern awards and national minimum wage orders; and (c) ensuring that the guaranteed safety net of fair, relevant and enforceable minimum wages and conditions can no longer be undermined by the making of statutory individual employment agreements of any kind given that such agreements can never be part of a fair workplace relations system; and (d) assisting employees to balance their work and family responsibilities by providing for flexible working arrangements; and (e) enabling fairness and representation at work and the prevention of discrimination by recognising the right to freedom of association and the right to be represented, protecting against unfair treatment and discrimination, providing accessible and effective procedures to resolve grievances and disputes and providing effective compliance mechanisms; and (f) achieving productivity and fairness through an emphasis on enterprise level collective bargaining underpinned by simple good faith bargaining obligations and clear rules governing industrial action; and (g) acknowledging the special circumstances of small and medium sized businesses. 10 Section 417 relevantly provides: 417 Industrial action must not be organised or engaged in before nominal expiry date of enterprise agreement etc. No industrial action (1) A person referred to in subsection (2) must not organise or engage in industrial action from the day on which: (a) an enterprise agreement is approved by the FWC until its nominal expiry date has passed; or … (2) The persons are: (a) an employer, employee, or employee organisation, who is covered by the agreement or determination; or (b) an officer of an employee organisation that is covered by the agreement or determination, acting in that capacity. 11 The phrase "industrial action" is defined in s 19 of the FW Act, relevantly, as follows: 19 Meaning of industrial action (1) Industrial action means action of any of the following kinds: … (b) a ban, limitation or restriction on the performance of work by an employee or on the acceptance of or offering for work by an employee; (c) a failure or refusal by employees to attend for work or a failure or refusal to perform any work at all by employees who attend for work; (d) the lockout of employees from their employment by the employer of the employees. (2) However, industrial action does not include the following: … (c) action by an employee if: (i) the action was based on a reasonable concern of the employee about an imminent risk to his or her health or safety; and (ii) the employee did not unreasonably fail to comply with a direction of his or her employer to perform other available work, whether at the same or another workplace, that was safe and appropriate for the employee to perform. … 12 Section 417 is contained in Division 3 of Part 3.4 of Chapter 3 of the FW Act. It is preceded by Division 2, which prescribes the circumstances in which industrial action will be "protected industrial action": ss 408 - 414. When industrial action is protected industrial action within the meaning of those provisions, persons who participate in it enjoy a legal immunity such that (subject to limited exceptions) no action can be taken against them under any written or unwritten law merely by virtue of their participation: s 415 of the FW Act. The immunity would, at the very least, protect an employee from actions founded in breach of the employment contract that might otherwise lie against them. When industrial action is not protected industrial action, no such immunity is conferred. 13 Section 417 of the FW Act must also be read in the context of Part 2.4 of Chapter 2, which establishes a comprehensive regime for the making, content, approval, variation and termination of enterprise agreements: ss 169 - 257. An employer is not obliged under the FW Act to enter into an enterprise agreement: s 172. An enterprise agreement cannot be entered into unless it satisfies the test that employees to be covered by the agreement will be "better off overall" for having entered into it: s 193. There are identifiable advantages to both employers and employees in entering into enterprise agreements, including greater degrees of flexibility, certainty and stability in workplace relationships. The emphasis on enterprise bargaining is a central feature of the FW Act. Section 3(f), recited above, states that it is an objective of the FW Act that "enterprise level collective bargaining" be "underpinned" by "clear rules governing industrial action". 14 The clear rules governing industrial action are those set out in Divisions 2 and 3 of Chapter 3 of the FW Act, of which s 417 forms a part. Section 417 is itself underpinned by s 418. It provides (relevantly): 418 FWC must order that industrial action by employees or employers stop etc. (1) If it appears to the FWC that industrial action by one or more employees or employers that is not, or would not be, protected industrial action: (a) is happening; or (b) is threatened, impending or probable; or (c) is being organised; the FWC must make an order that the industrial action stop, not occur or not be organised (as the case may be) for a period (the stop period) specified in the order. Note: For interim orders, see section 420. (2) The FWC may make the order: (a) on its own initiative; or (b) on application by either of the following: (i) a person who is affected (whether directly or indirectly), or who is likely to be affected (whether directly or indirectly), by the industrial action; (ii) an organisation of which a person referred to in subparagraph (i) is a member. … As will be seen, ss 417 and 418 are provisions of which the individual respondents were well aware.

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Facts 17 On the basis of the affidavit evidence, the allegations admitted on the pleadings and concessions made in the course of submissions, I make the following findings of fact. 18 The CFMEU, the CEPU and the O'Rourke employees are all covered by an enterprise agreement approved by the Fair Work Commission (the EA) titled Laing O'Rourke Construction Australia Pty Ltd Ichthys Onshore Construction Greenfields Agreement. The EA was made pursuant to the provisions of the FW Act and approved by the Fair Work Commission on 15 May 2013. It is, as its title suggests, a "greenfields agreement" within the meaning of s 172(4) of the FW Act. The CFMEU and the CEPU are both parties to the EA. 19 As at 19 June 2014, each of Mr Robinson, Mr Taylor and Mr Haire knew that the EA was in place, and that it covered their respective unions and the O'Rourke employees. 20 From at least as early as 15 June 2014 a flyer was distributed at the workplace of the O'Rourke employees. The flyer was printed on a letterhead displaying corporate logos of the CFMEU, the Queensland and Northern Territory branch of the Australian Manufacturing Workers' Union and the Electrical Trades Union. It read: CONSTRUCTION UNIONS NORTHERN TERRITORY UNION MEETING Members are invited to a combined union meeting to be held on Thursday 19th June to discuss the issue with the park and rides. Meeting will be held at the Airport Port Park and Ride and both Yarrawonga Park and Rides. Meeting will start at 5.30am sharp. (Original emphasis) 21 In the weeks leading up to the distribution of the flyer, the O'Rourke employees had made complaints to JKC about traffic congestion at the Yarrawonga and Airport Park and Ride facilities. The congestion was said, among other things, to create delays exiting the facility. The complaints were to the effect that the congestion was causing drivers to become angry or frustrated and to take unnecessary safety risks. 22 For the purposes of these proceedings, it is neither possible nor desirable for the Court to make any finding as to whether the employees' complaints were justifiable, nor as to whether their beliefs concerning safety risks were genuinely or reasonably held. It should be noted that the respondents, having admitted that they organised "industrial action" within the meaning of s 19, cannot suggest (and did not suggest before this Court) that the industrial action they organised was "based on a reasonable concern of the employee about an imminent risk to his or her health or safety" within the meaning of subs 19(2)(c)(i) of the FW Act. 23 In his pleaded case, the Director did not expressly attribute the authorship or the distribution of the flyer to any one of the named respondents in this action. The existence of the flyer was alleged by way of particulars to pleas alleging that Mr Robinson, Mr Taylor and Mr Haire knew and intended that the Yarrawonga meeting and the Airport meeting were to be convened for particular purposes: subparagraphs 14(e)(i)(A) and 21(E)(i)(A) of the Amended Statement of Claim. 24 For the purpose of assessing the penalty to be imposed on the CFMEU, I find that the flyer was distributed as part of a concerted and coordinated effort by the unions named on it to organise employees, including the O'Rourke employees, to stop work as a means of, at the very least, protesting their dissatisfaction in relation to the Park and Ride facilities. The distribution of the flyer is, I find, conduct attributable to the CFMEU (although not to Mr Robinson and Mr Taylor) by an inference readily drawn from its contents. 25 Both the CEPU and Mr Haire admit the allegation that Mr Haire knew of the intended purpose of the Airport meeting by reference to the flyer.

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The Yarrawonga Meeting 26 Early in the morning of 19 June 2014, Mr Robinson, in his capacity as an official of the CFMEU, addressed a meeting of between 80 and 100 workers (including O'Rourke employees) at the Yarrawonga Park and Ride. At that meeting, Mr Robinson made these comments to the employees: Guys, you know 13 of us have come here on Sunday to support you. We've had discussions with JKC and it seems that they have only been paying lip service to us. We've got a motion before us that we stop work today and we all have to remain united. I've been working hard for you on these issues. We also have our brothers at the Airport Park and Ride doing the same there. Some of these guys have already gone home to support us. The plan will be to go home today, you'll probably get orders to return tomorrow, but we will have another meeting at the park and go tomorrow and go from there. 27 The reference in that statement to "13 of us" and "brothers" is a reference to 13 CFMEU officials who had gathered in Darwin for the purposes of, at least, arranging and conducting the Yarrawonga meeting and the Airport meeting (to which I refer below). I find that Mr Robinson's statement that the employees would "probably get orders to return tomorrow" was a reference to the likelihood that orders might be made under s 418 the FW Act in response to any failure by the employees to attend at work. In drawing that inference, I take into account submissions made on behalf of the respondents that the purpose of the Yarrawonga meeting was the same purpose as that for which the Airport meeting was conducted. I accept that the two individual CFMEU officers intended to convey the same or substantially the same message at the two meetings and to achieve the same results by them. 28 After making the above statements, Mr Robinson put a proposal to the employees. His words were to the following effect: We have a motion on the ground that we stop work this morning and come back tomorrow. Can I have a show of hands please? All those in favour raise your hands. 29 Mr Robinson coordinated a vote of the employees and a majority then voted in favour of the proposal. He then said: OK, the motion has been carried. We'll see you back here tomorrow morning. 30 As a consequence of Mr Robinson's conduct, O'Rourke employees returned to their cars and drove away. They refused to board the buses that had, by that time, arrived to transport them to work at the Project. They remained absent from work for the day.

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The Airport Meeting 31 At the same time that Mr Robinson conducted the Yarrawonga meeting, Mr Taylor and Mr Haire conducted a meeting of workers (including O'Rourke employees) at or near the Airport Park and Ride. At that meeting, Mr Taylor addressed the employees about their complaints concerning the Park and Ride facilities. He made the following comments in the company of Mr Haire: We've spoken to JKC about the issues, but they are doing nothing ... There are problems at both Yarrawonga sites ... Look at the congestion. You guys need to go home. It might be called strike action and there might be 418 orders and all that but we'll back you all the way, 100 percent. We've never not supported anyone, we'll back you 100 per cent. 32 The reference in Mr Taylor's comments to "418 orders" is an express reference to orders that might be made by the Fair Work Commission pursuant to s 418 of the FW Act in the event that the employees failed to attend for work. 33 Mr Haire addressed the meeting with words to the effect that the congestion at the Park and Ride facilities was wrong. He then said words to the following effect: Not getting on the busses would send a message to JKC. 34 At the conclusion of the meeting, Mr Taylor, in the company of Mr Haire, said: You should go home for the day. 35 It was submitted by both parties that Mr Taylor said more at the Airport meeting than Mr Haire and that Mr Haire's culpability was therefore diminished relative to that of Mr Taylor. I do not accept those submissions. 36 I find that Mr Taylor and Mr Haire jointly conducted the Airport meeting. Although Mr Taylor appears to have uttered more words than Mr Haire, Mr Haire did nothing to dissociate himself from Mr Taylor's words. He attended the meeting knowing that the flyer had been distributed in advance of it. It is artificial to measure the relative culpability on these two respondents by reference to a word count of their respective statements. Mr Haire's presence at the meeting in the capacity of an organiser, together with his statement that the employees' refusal to board the buses would "send a message to JKC", together with his failure to dissociate himself from Mr Taylor's statements, support a finding that he intended the employees to appreciate that he adopted and endorsed the words used by Mr Taylor. He said fewer words than Mr Taylor because it was not necessary for him to repeat what Mr Taylor had already said. For these reasons, I find that Mr Haire's contravening conduct is no less egregious than that of Mr Taylor. 37 Each of Mr Taylor and Mr Haire attended the Airport meeting for the purpose of encouraging the members of their respective unions to stop work for the day. Their words had the intended effect. At the conclusion of the Airport meeting, O'Rourke employees returned to their cars and drove away. They did not attend work.

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Impact of the Industrial Action 38 As I have already said, O'Rourke is a subcontractor to JKC at the Project. It is a construction company engaged in the building of tanks. On 19 June 2014, O'Rourke had scheduled the pouring of concrete. The timing of the proposed concrete pour was described as "critical" in the sense that the timing of subsequent works depended on it. 39 As a consequence of the conduct of Mr Robinson, Mr Taylor and Mr Haire, 66 O'Rourke employees were absent from work on that day. The concrete pour was cancelled. O'Rourke's productivity on that day was limited. Although neither party adduced evidence quantifying any economic loss suffered by O'Rourke as a result of the disruption, the inference naturally arises that the consequences of the respondents' conduct was precisely as they intended; sufficient disruption, inconvenience and expense to "send a message" to O'Rourke's head contractor, JKC. The Court does not require evidence of economic loss in order to draw that inference. 40 A further consequence of the conduct is the inescapable conclusion that the O'Rourke employees were knowingly encouraged to take steps that would expose the employees themselves to the consequences of contravening s 417 of the Act. The comments made by Mr Taylor at the Airport meeting demonstrate his appreciation that the employees would themselves be in breach of s 417 if they accepted the proposal stop work. His reference to s 418 of the FW Act indicates that he turned his mind to the unlawfulness of the industrial action he encouraged. His additional words "We'll back you all the way, 100 percent" can fairly be interpreted as a gesture of reassurance from the CFMEU that if and when action was taken against the employees, the CFMEU would protect their interests, insofar as that might conceivably be done. As I have said, Mr Haire lent support to those words by his presence and his own statements at the meeting. Mr Robinson's words at the Yarrawonga meeting were to similar overall effect.

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Operation and interrelation of s 557 and s 793 of the FW Act 44 Section 557(1) of the FW Act provides: 557 Course of conduct (1) For the purposes of this Part, 2 or more contraventions of a civil remedy provision referred to in subsection (2) are, subject to subsection (3), taken to constitute a single contravention if: (a) the contraventions are committed by the same person; and (b) the contraventions arose out of a course of conduct by the person. 45 As can be seen, s 557 only applies in circumstances where there are two contraventions of a provision committed by the same person. It applies where there are multiple contraventions of s 417(1): see s 557(2)(j). 46 Section 793 of the FW Act provides: 793 Liability of bodies corporate Conduct of a body corporate (1) Any conduct engaged in on behalf of a body corporate: (a) by an officer, employee or agent (an official) of the body within the scope of his or her actual or apparent authority; or (b) by any other person at the direction or with the consent or agreement (whether express or implied) of an official of the body, if the giving of the direction, consent or agreement is within the scope of the actual or apparent authority of the official; is taken, for the purposes of this Act and the procedural rules, to have been engaged in also by the body. State of mind of a body corporate (2) If, for the purposes of this Act or the procedural rules, it is necessary to establish the state of mind of a body corporate in relation to particular conduct, it is enough to show: (a) that the conduct was engaged in by a person referred to in paragraph (1)(a) or (b); and (b) that the person had that state of mind. Meaning of state of mind (3) The state of mind of a person includes: (a) the knowledge, intention, opinion, belief or purpose of the person; and (b) the person's reasons for the intention, opinion, belief or purpose. 47 The CFMEU is an organisation of employees registered under the Fair Work (Registered Organisations) Act 2009 (Cth) and is a body corporate by reason of s 27 of that Act. 48 Section 793 does not, of itself, fix upon a body corporate liability for contraventions found to have been committed by its officers, employees or agents. Rather, it attributes to the body corporate the conduct and state of mind of its officers, employees and agents in prescribed circumstances. The question of whether the body corporate has contravened the FW Act (and, if so, on how many occasions) must be answered by assessing the facts, namely the conduct and state of mind attributed to the body corporate, against the elements of the contravention said to have been committed by it. 49 Two further things should be said about s 793 of the FW Act. The first is that s 793 does not exhaustively prescribe the legal means by which the state of mind held by, or the conduct engaged in by, a body corporate may be ascertained. Its purpose is to provide for an expanded range of persons whose conduct and state of mind might be ascribed to a body corporate than that which exists at common law, whilst at the same time preserving the common law doctrines: Walplan Pty Ltd v Wallace (1985) 63 ALR 453, (1986) ATPR 40-650 at 74,252; Tesco Supermarkets Ltd v Nattrass [1972] AC 153). 50 The second thing to be said about s 793 arises from my earlier observation that it does not directly operate to fix liability for a contravention on a body corporate; it is not to be regarded as a codification of the doctrine of vicarious liability: cf Trade Practices Commission v Tubemakers of Australia Ltd (No 2) (1983) 76 FLR 455 (at [474]-[475]), 47 ALR 719 (at 739) (Toohey J). The mere fact that two employees of the CFMEU have each contravened the FW Act does not of itself, demand the conclusion that the CFMEU is liable for two contraventions. 51 The conduct attributed to the CFMEU by the operation of s 793(1) comprises the conduct of the Yarrawonga meeting and the words spoken there, together with the conduct of the Airport meeting and the words spoken there. As it was accepted by the parties that the flyer was distributed by or on behalf of the CFMEU, it is not necessary to draw upon s 793 to make a finding about that particular fact. 52 The Director's pleaded case referred to the "Yarrawonga Industrial Action" and the "Airport Industrial Action" to delineate between the organising conduct of each individual respondent. However, on examining the CFMEU's conduct as a whole, I find that it organised a single instance of industrial action, namely, the O'Rourke employees' refusal to attend work on 19 June 2014. On one view of the facts, it might be said that there were two physical acts of organisation conceived of as the Yarrawonga meeting and the Airport meeting, which were, I accept, separated in place, although not in time. The necessity to conduct the meetings at two places arose, however, from the fortuitous circumstance that some of the O'Rourke employees to whom the CFMEU's organising conduct was directed parked their vehicles at the Yarrawonga Park and Ride facility while others parked their vehicles at the Airport Park and Ride facility. 53 In reaching my conclusion that the CFMEU committed only one contravention, I have given the word "organise" in s 417 of the FW Act a meaning that encompasses the concept of "marshalling" or "rallying", which may inherently involve a number of discrete acts directed at achieving cohesiveness in a result (in this case, a single episode of industrial action). The CFMEU, as a body corporate, organised one instance of industrial action, albeit through the conduct of two human actors. 54 As there is a single contravention by the CFMEU of s 417 of the FW Act, s 557 of the FW Act has no application. 55 If my foregoing analysis is wrong, the same conclusion would, in any event, be reached by the application of s 557(1) of the FW Act. It imposes an obligation on the Court to deal with two contraventions of s 417(1) as a single contravention where two conditions are satisfied: the contraventions are committed by the same person and the contraventions arise out of a "course of conduct" by that person. 56 I have found that there is a close factual interrelation between the stop work meetings that occurred at each Park and Ride location. They coincided in time and purpose and were geographically proximate. The conduct at the meetings was directed at employees of the same employer. The meetings themselves formed a part of a concerted and coordinated effort by a number of the CFMEU officials, 13 of which were said by Mr Robinson himself to have "arrived" the previous weekend in Darwin to lend support to the O'Rourke employees. The distribution of the flyer further evidences the existence of a single planned and consolidated effort by the CFMEU, in connection with the same subject matter. 57 It was submitted on behalf of the Director that the mere commonality of purpose or motive vis à vis two contraventions committed by the same person is not sufficient to demand a conclusion that the contraventions arose out of a course of conduct by the person. Whilst I accept that submission as a matter of principle, the two contraventions to which the Director pointed (identified by the separate meeting locations) are not interrelated merely by reference to the motivations behind them. 58 On either analysis, for the purposes of fixing a penalty upon the CFMEU, I proceed on the basis that there is a single contravention, the maximum penalty for which is $51,000. The single penalty to be imposed on the CFMEU must have proper regard to the wider factual matrix to which I have referred: the distribution of a flyer and two organisers cooperating in their timing and methods with a view to elevating the impact of the industrial action so organised.

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The purpose of the FW Act civil penalty regime 59 Counsel for the Director submitted that a purpose of civil penalties was "punishment, which must be proportionate to the offence and in accordance with prevailing standards". In support of that submission, the Director relied on the decision of Lander J in Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65, (2007) 158 FCR 543 (Ponzio) at [92]. The respondents made the following submission to similar effect: "the Court has frequently identified the primary object of civil penalties is punishment and deterrence". 60 Until recently there has, in this Court, been an apparent divergence of views as to the purpose for which civil penalties are imposed. The differing schools of thought were identified by Finkelstein J in Australian Competition and Consumer Commission v ABB Transmission and Distribution Limited [2001] FCA 383 in the context of the civil penalty regime established by the then-named Trade Practices Act 1974 (Cth) and in connection with a contravention of Part IV of that Act. His Honour said (at [7]): There is as yet no concluded view on the object of the imposition of penalties for a contravention of Pt IV. It is only when this issue is finally resolved that there can be a degree of certainty in deciding the appropriate level of penalty in a particular case. At the moment there are two competing views, although the application of the principles of each school of thought may overlap. Some favour the view that deterrence, either specific or general, is the sole criterion. Others say that retribution is an important element. 61 The two views have found expression in, respectively, the judgment of French J (as he then was) in Trade Practices Commission v CSR Ltd (1991) 13 ATPR 41-076 (at 51,572), [1990] FCA 762 (at [40]) (CSR) and that of Lander J in Ponzio (at [93] to [94]). Each of those judgments was discussed by the Full Court in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (2015) 229 FCR 331. The Full Court said (at [65] to [67]): [65] In CSR, French J was concerned with penalties to be imposed pursuant to Pt IV of the Trade Practices Act 1974 (Cth). We do not understand his Honour to have said that all pecuniary penalties are imposed purely for the purpose of deterrence. He was speaking solely of penalties imposed pursuant to that legislation and, we suspect, making two points: • that corporations which breach the provisions of Pt IV are likely to be overwhelmingly motivated by commercial considerations; and • that in order to make potentially profitable, but unlawful conduct unappealing as a business choice, a substantial penalty or threat of such penalty is necessary. [66] We doubt whether French J intended to propound the broad proposition which the Commonwealth advances. Even if his Honour meant that as a matter of statutory construction, the purpose of Pt IV penalties was purely deterrence, there can be no justification for extending that view to all other statutory regimes which provide for such penalties. The relevant legislation will provide the most reliable basis for identifying Parliament's purpose. [67] At least some of the goals referred to in s 3 of the BCII Act - promoting respect for the rule of law, ensuring respect for the rights of building industry participants and ensuring accountability for unlawful conduct - go beyond mere deterrence. The promotion of respect for the rule of law and the rights of others suggests an element of education and rehabilitation. The term "ensuring accountability" implies recognition of any failure to behave in accordance with the law. Neither the Trade Practices Act (nor its successor) nor the BCII Act operates in isolation from the broader legal system. Respect for the rule of law necessitates a clear expression of the community's displeasure concerning unlawful conduct. Save in the most trivial of cases, any breach of the law must be seen as an affront to the dignity of the community in which the law operates, and by which it is established. Repeated failure to deal with such breaches may undermine the whole legal system. In marking community displeasure, the imposition of an appropriate penalty is an act of retribution. Similar comments apply to the notions of respect for the rights of building industry participants and accountability for unlawful conduct. Although the goals have been tailored to reflect the subject matter dealt with by the BCII Act, they are based on concepts which are fundamental to respect for, and enforcement of law in any civilized community. 62 The Full Court went on to cite, with approval, Ponzio (at [92]), to emphasise that the purposes for imposing a civil penalty included (but were not limited to) that of punishment. The Full Court rejected a submission advanced by the Commonwealth to the effect that the judgment in Ponzio was inconsistent with authority. It described the view expressed by Lander J as "entirely orthodox and consistent with common sense" (at [69]). 63 On an appeal brought by the Commonwealth, the High Court in Commonwealth v Director, Fair Work Building Industry Inspectorate (2016) 90 ALJR 113, 326 ALR 476, [2015] HCA 46 made a footnoted reference to the above passage of the Full Court's reasons. The majority (French CJ, Kiefel, Bell, Nettle and Gordon JJ) said (at [55], original footnote included): [55] No less importantly, whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance:75 Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act] … The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act. FN75: Trade Practices Commission v CSR Ltd [1991] ATPR 41-076 at 52,152; cf Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (2015) 229 FCR 331 at [65]-[67]. 64 The majority went on to say (at [59]) that "civil penalties are not retributive, but like most other civil remedies essentially deterrent or compensatory and therefore protective". 65 Although the High Court was there referring to the purpose of civil penalties generally, the case before it concerned the imposition of civil penalties for unlawful industrial action in contravention of the Building and Construction Industry Improvement Act 2005 (Cth), which establishes a regime with substantially the same objectives as those of the FW Act. The statutory context is relevantly the same as that in the matter before me.

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The role of proportionality in a non-retributive context 66 Once it is accepted that civil penalties are not retributive, concepts of proportionality should not be applied for the purposes of serving broader objectives of punishment in the sense described in R v Hunter (1984) 36 SASR 101 (at [103]) (King CJ) (applied by Lander J in Ponzio (at [93])): The basic concepts of justice which underlie the criminal law require that the punishment be fairly proportionate to the crime in accordance with the prevailing standards of punishment. Only when it meets that criterion can a sentence satisfy the sense of justice of the community which is expected in the criminal law and in the practice of the courts in applying the criminal law. 67 Proportionality is nonetheless a critical objective in exercising the discretion conferred by s 546 of the FW Act. That is because the degree of seriousness of a contravention is relevant to ascertain "the assessment of a penalty of appropriate deterrent value": CSR at [42]. A penalty of appropriate deterrent value is one that recognises that the maximum penalties prescribed in the statute are appropriately imposed in cases where the need for deterrence is the most pronounced. There remains, in addition, a discretion not to impose a penalty at all if the statutory purpose of deterrence would not be served by the imposition of one. 68 The seriousness of the conduct constituting the contravention is an important indicator of the need for deterrence in a particular case, but is not the sole indicator. Consistent with the reasoning of French J (as he then was) in CSR, in all cases it is proportionality in relation to the need for deterrence that must be achieved, having regard to all relevant circumstances, including the objective seriousness of the contravention before the Court. 69 It should also be recognised that penalties fixed for a deterrent purpose are intended to have an attitudinal effect: dissuasion. It is for this reason that my assessment of the seriousness of the conduct of the respondents places appropriate emphasis on the mental attitudes accompanying their physical acts.

[15]

Seriousness in the present case 70 It was submitted on behalf of the respondents that the industrial action organised by Mr Robinson, Mr Taylor and Mr Haire was relatively small in scale; it occurred over a brief period of time and "no allegation of loss or damage resulting from the conduct has been made". It was further submitted that the loss of O'Rourke's productivity on the day in question could be likened to other inconveniences that commonly occur on building sites forcing the temporary suspension of work. Unexpected thunderstorms were cited as an example. 71 I have found that the industrial action organised by the respondents involved the cessation of work by 66 employees for one day at a construction site. Their absence from the workplace caused significant disruption and inconvenience to O'Rourke on that day, although no serious or ongoing economic loss is proven. I reject the respondents' submission that both the scale of the industrial action and the seriousness of their contraventions are to be regarded as "low-level". 72 The following paragraphs summarise the inferences I have drawn from the affidavit material in respect of the individual respondents' states of mind. 73 Put simply, the individual respondents deliberately contravened s 417 of the FW Act. They knowingly encouraged the employees to do the same. Their actions formed a part of an organised strategy in respect of which their contraventions of s 417 were not merely an accidental or collateral consequence, but a planned and central feature. They were aware of at least the possibility that O'Rourke or some other person with standing may, as a result of their contraventions, suffer the costs and inconvenience of obtaining orders under s 418 of the FW Act to compel the employees' compliance with the requirements of the FW Act. Mr Robinson and Mr Taylor referred to that possibility at their respective meetings and Mr Haire, as I have found, both endorsed Mr Taylor's statements and added words of encouragement of his own. 74 It is reasonable to infer that the individual respondents knew that the industrial action taken by the employees was not protected industrial action and that the employees would be in breach of their obligations as employees to O'Rourke and enjoy no immunity under the FW Act in respect of it. The ballots conducted by them were not secret ballots and were accompanied by language intended to influence as many O'Rourke employees as possible to vote collectively in favour of the stop work proposals.

[16]

Motivation 75 It was submitted on behalf of the respondents that their motivations in conducting the Park and Ride meetings were well-intentioned in the sense that they acted in what they perceived to be the best interests of the O'Rourke employees in connection with the subject matter of a grievance. This circumstance, it was submitted, called for a reduction in penalty. I reject that submission for two reasons. 76 First, in all of the circumstances, and in the absence of evidence from the respondents themselves, I am not prepared to infer that the motivations of the individual respondents were well-intentioned in a sense that diminishes the seriousness of their contraventions. This is especially so in light of a concession by the respondents' counsel to the effect that the union organisers had other (lawful) means to address any safety issues they identified at the Park and Ride facilities, for example, by addressing the issues in accordance with State occupational health and safety laws. No evidence was given as to why lawful means of that kind were not pursued. 77 Second, and relatedly, the respondents' submission invites the Court to reduce the penalty that might otherwise be imposed for a contravention of s 417 in circumstances where the contravener knows that he or she is acting in contravention of its requirements, merely because he or she genuinely believes that the ends (advancing employees' interests in a dispute) justify the means (unlawful industrial action). In my opinion, the conduct of a union organiser who appreciates that the law proscribes industrial action as unlawful and therefore unjustified ought not be treated more leniently by reference to his or her subjective opinion that the law does not strike an appropriate balance and can justifiably be ignored. 78 That is not to say that there could not be cases in which an intentional breach of the law may nonetheless be accompanied by a motive supporting a finding that the conduct is less culpable. However, the text and context of s 417 of the FW Act (to which I have earlier referred), together with the facts of the present case, count against such a conclusion in favour of the respondents in this case. 79 In all of the circumstances, I regard the mental attitudes accompanying the contraventions of Mr Robinson, Mr Taylor and Mr Haire as defiant and serious. Their states of mind are attributable to their respective unions by the operation of s 793 of the FW Act.

[19]

Section 507 "consent" orders 82 The Court heard submissions to the effect that the respondents had entered into an agreement with the Director setting out the terms upon which these proceedings were to be resolved between them. It was said, from the bar table, that the agreement included a term whereby Mr Robinson, Mr Taylor and Mr Haire would "consent" to orders before the Fair Work Commission for the purposes of an application to be made by the Director for orders pursuant to s 507 of the FW Act. It provides: 507 FWC may take action against permit holder (1) The FWC may, on application by an inspector or a person prescribed by the regulations, take the following action against a permit holder: (a) impose conditions on any entry permit issued to the permit holder; (b) suspend any entry permit issued to the permit holder; (c) revoke any entry permit issued to the permit holder. (2) In deciding whether to take action under subsection (1), the FWC must take into account the permit qualification matters. 83 This Court was informed that Mr Robinson, Mr Taylor and Mr Haire will consent to orders that provide for the suspension of their permits for a period of three months, although the orders themselves would be "suspended" for 12 months. I am prepared to assume for present purposes that the "suspension" of the Fair Work Commission order is intended to have the effect that the individual respondents will not suffer any suspension of their s 512 permits unless they are found, within 12 months, to have committed a further contravention of the FW Act. I heard no submissions on the question of whether the Fair Work Commission had the power to suspend the taking of any action it is empowered to take under s 507, whether for 12 months or at all. In light of what I say below, it is not necessary to determine that question. 84 The reference in s 507(2) of the FW Act to "permit qualification matters" is a reference to the same matters to which the Fair Work Commission is to have regard when determining whether a person is a fit and proper person to hold an entry permit: see ss 512 and 513. The matters include, but are not limited to, the circumstance that the person has been ordered to pay a penalty for contravention of the FW Act or any other industrial law: s 513(1)(d). 85 The practice (if there be one) of agreeing orders to be made on an application made pursuant to s 507 is one that cannot bind the Fair Work Commission in its determination as to whether or not a person is a fit and proper person within the meaning of s 512 of the FW Act. 86 It was submitted nonetheless that the willingness of the individual respondents to consent to the orders evidenced an attitude of contrition and that it should be regarded as a step taken by them and their respective unions toward preventing future contraventions of the FW Act. I am not persuaded by that submission for three related reasons. 87 First, the respondents did not tender the agreement in these proceedings. As a consequence, this Court cannot make any assessment as to its terms, including on such matters as to whether the agreement to the consent orders was made in exchange for any concessions made by the Director. 88 Second, in circumstances where the respondents have not given any direct evidence of contrition or change of attitude, I am disinclined to draw inferences in their favour on the basis of statements from the bar table about the content or purpose of the agreement or the circumstances in which it was made. 89 Third, the reality for the respondents is that by virtue of their liability for contraventions of s 417 the FW Act, they would be at risk of the Fair Work Commission ordering a suspension of their permits on terms more severe than those proposed in the consent orders or, depending on the circumstances and the proper exercise of the Fair Work Commission's discretion, an order revoking their permits. The respondents may well have agreed to the consent orders to advance their self-interests in reducing that risk. In the absence of evidence, the Court is in no position to make a finding either way.

[20]

Specific deterrence: the CFMEU 90 The Director relied on a schedule listing 112 decisions dating back to 2000 in which the CFMEU had been proven to have contravened industrial laws. The respondents' counsel took issue with the inclusion in the schedule of certain decisions of the Fair Work Commission. He conceded (quite properly) that in taking such points he could only "chip at the edges" of the CFMEU's considerable contravention record. 91 It was submitted on behalf of the CFMEU that the fact that Mr Robinson and Mr Taylor had not previously contravened the FW Act justified the imposition of a lesser penalty upon the CFMEU than might otherwise be imposed. I have taken into account the absence of any past contravening conduct on Mr Robinson and Mr Taylor's part when determining the penalties to be imposed upon each of them personally. As I have already said, the weight that might otherwise have been accorded to this consideration is diminished by reason of them consciously averting to the fact that their conduct was in breach of the FW Act, and yet being undeterred from the breach. 92 The proposition that CFMEU's own penalty ought be reduced by reason of Mr Robinson and Mr Taylor's absence of prior contraventions is a curious one. 93 For the purpose of determining the penalty to be imposed on a body corporate pursuant to s 546 of the FW Act, it is important to bear in the mind that s 793 does not, on its terms, directly attribute to the body corporate the same objective qualities or circumstances of its employees, such as the quality of that of a first-time contravener. That is not to say that such a quality will be irrelevant in all cases involving the imposition of penalties on a body corporate for a contravention founded on conduct engaged in on its behalf by officials who have not previously contravened. Consistent with the deterrent objectives of s 546 of the FW Act, in circumstances where an employee whose conduct or state of mind has been ascribed to a body corporate under s 793 is a first-time contravener, it may, in an appropriate case, be proper to allow some credit to be given to the body corporate in light of that circumstance. By credit, I intend to refer to a finding that there is a lesser need for specific deterrence in the case of the body corporate. Whether the employer is deserving of credit of that kind is a question of proof. 94 The respondents could point to no evidence capable of supporting a finding that the absence of any record of past contraventions by Mr Robinson and Mr Taylor is in any way attributable to the CFMEU. There was no evidence before the Court of the longevity of the employment of Mr Robinson or Mr Taylor, and no evidence of any attempts to exercise sufficient control over them to reduce the risk of them contravening the requirements of the FW Act in the past. There is no evidence that their present contraventions are an aberration occurring against a background of a culture of compliance within the CFMEU. There is no evidence to support a finding that the CFMEU has since expressed disapproval of their conduct, nor a finding that the CFMEU is genuinely concerned to prevent subsequent contraventions by them. 95 Finally, it was asserted on behalf of the CFMEU that the conduct of Mr Robinson and Mr Taylor occurred without the involvement of senior management, and yet there was no evidence before the Court to support any finding on that question either way. It was further submitted that Mr Robinson and Mr Taylor were "very junior". That submission, too, is unsupported on the evidence, especially insofar as Mr Robinson is concerned. 96 The need for penalties sufficient to serve the objective of specific deterrence against the CFMEU is, in all of the circumstances, a pressing one.

Director of the Fair Work Building Industry Inspectorate v Robinson

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Judgment (24 paragraphs)

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Legislation Cited (5)

Cases Cited (10)

Cited By (26)