Director of the Fair Work Building Industry Inspectorate v Upton

Federal Court of Australia|2015-07-03|Before: Mr J, Gilmour J

THE COURT DECLARES THAT: (a) The first respondent contravened s 500 of the Fair Work Act 2009 (Cth) Act (FW Act) by reason of acting in an improper manner at the Wheatstone liquefied natural gas project located near Onslow in Western Australia (Project) on 8 October 2012, while exercising rights in accordance with Part 3-4 of the FW Act, as a consequence of verbal exchanges between the first respondent and representatives of the occupier of the Project (Upton's First Contravention). (b) By reason of s 793 of the FW Act, the third respondent is taken to have contravened s 500 of the FW Act as a result of Upton's First Contravention. (c) The first respondent contravened s 500 of the Fair Work Act 2009 (Cth) Act (FW Act) by reason of acting in an improper manner at the Project on 13 February 2013, while exercising rights in accordance with Part 3-4 of the FW Act, as a consequence of holding a meeting with employees in a part of the Project used mainly for residential purposes (Upton's Second Contravention). (d) By reason of s 793 of the FW Act, the third respondent is taken to have contravened s 500 of the FW Act as a result of Upton's Second Contravention.
THE COURT ORDERS THAT: (a) The first respondent pay a pecuniary penalty of $3,000 for the contravention of s 500 of the FW Act referred to in Order 1(a) hereof. (b) The third respondent pay a pecuniary penalty of $15,000 for the contravention of s 500 of the FW Act referred to in Order 1(b) hereof. (c) The first respondent pay a pecuniary penalty of $1,000 for the contravention of s 500 of the FW Act referred to in Order 1(c) hereof (d) The third respondent pay a pecuniary penalty of $5,000 for the contravention of s 500 of the FW Act referred to in Order 1(d) hereof. (e) Pursuant to s 546(3)(a) of the FW Act, the pecuniary penalties referred to in Orders 2(a)-(d) be paid to the Commonwealth of Australia. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

IN THE FEDERAL COURT OF AUSTRALIA WESTERN AUSTRALIA DISTRICT REGISTRY FAIR WORK DIVISION WAD 201 of 2014

BETWEEN: DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE

JUDGE: GILMOUR J DATE: 3 july 2015 PLACE: PERTH

REASONS FOR JUDGMENT 1 This proceeding concerns admitted contraventions of s 500 of the Fair Work Act 2009 (Cth) (FW Act) on 8 October 2012 and 13 February 2013 at the Wheatstone liquefied natural gas project (Project), located near Onslow in Western Australia. 2 The first respondent (Upton), an official of the third respondent (CFMEU), attended the Project on each of the relevant days while seeking to exercise rights under Part 3-4 of the FW Act, and thereafter acted in an improper manner, in contravention of s 500 of the FW Act. 3 The parties have agreed to resolve all matters of liability on the basis of a Statement of Agreed Facts and Admissions (SOAFA) filed on 5 February 2015. The question now is as to the appropriate penalties to be imposed by the Court arising from the respondents' admitted contraventions. 4 The parties have also agreed that the following declarations should be made by the Court, which reflect the admitted contraventions: (a) A declaration that Upton contravened s 500 of the FW Act by reason of acting in an improper manner at the Project on 8 October 2012, while exercising rights in accordance with Part 3-4 of the FW Act, as a consequence of verbal exchanges between Upton and representatives of the occupier of the Project (Upton's First Contravention). (b) A declaration that by reason of s 793 of the FW Act, the CFMEU is taken to have contravened s 500 of the FW Act as a result of Upton's First Contravention. (c) A declaration that Upton contravened s 500 of the FW Act by reason of acting in an improper manner at the Project on 13 February 2013, while exercising rights in accordance with Part 3-4 of the FW Act, as a consequence of holding a meeting with employees in a part of the Project used mainly for residential purposes (Upton's Second Contravention). (d) A declaration that by reason of s 793 of the FW Act, the CFMEU is taken to have contravened s 500 of the FW Act as a result of Upton's Second Contravention.

The relevant maximum penalties 5 Section 500 of the FW Act is a civil remedy provision: see s 539(1). 6 The maximum penalty available for a contravention of this provision is 300 penalty units for a body corporate and 60 penalty units for an individual: ss 539(2), 546(1) and 546(2). 7 The value of a penalty unit is currently $170: FW Act s 12 and Crimes Act 1914 (Cth) s 4AA(1). The value of a penalty unit increased from $110 to $170 on 28 December 2012: Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012 (Cth) Sch 3 item 7. 8 Accordingly, the maximum penalty for a contravention of s 500 of the FW Act: (a) for the conduct which occurred on 8 October 2012 is: (i) for the CFMEU, $33,000; and (ii) for Upton, $6,600. (b) for the conduct which occurred on 13 February 2013 is: (i) for the CFMEU, $51,000; and (ii) for Upton, $10,200.

General principles 9 The general principles for determining the appropriate penalties in a case such as this are well established. There is no need to rehearse these here. I will refer only, in due course, to those which have immediate relevance to this case. Broadly there are three purposes for imposing penalties for breaches of industrial law: punishment, deterrence and rehabilitation: Ponzio v B & P Caelli Construction Pty Ltd (2007) 158 FCR 543 at [93], approved in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (2015) 105 ACSR 403; [2015] FCAFC 59 at [68]-[69]. 10 By a process of "instinctive synthesis" a court is required to take into account all relevant factors and to arrive at a single result which takes due account of them all: Wong v The Queen (2001) 207 CLR 584 at [74]-[76], cited by Markarian v The Queen (2005) 228 CLR 357 at [37] and Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 at [27] and [55]. 11 Proportionality and consistency commonly operate as a final check on the penalty: Australian Ophthalmic Supplies Pty Ltd at [54]; Markarian at [83] 12 The decision of the Full Court in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union was delivered on 1 May 2015. This case considered the application, if any, to civil penalty cases, such as the present, of the High Court's decision in Barbaro v The Queen (2014) 253 CLR 58 involving criminal sentencing proceedings. 13 I gave the parties liberty to make further written submissions as to the effect of this judgment upon this matter, given that each party had made separate, but different, submissions as to the quantum of penalty by reference to a range in each case which the Court should impose. 14 The applicant submits, particularly having regard to what was stated by the Full Court at [139] and [243], that the parties are not permitted to make a submission to the Court as to the amounts or range of amount of penalties. 15 Conversely, the respondents submit that the decision in Barbaro and, implicitly, the decision of the Full Court, precludes only the applicant in make submissions on the range or amount of penalties, but not a respondent. The respondents referred to [27] of the Full Court's reasons which state that the "content of the prosecution's submissions is now regulated by the decision in Barbaro". 16 This does not give support to the respondents' submission. It merely refers to the fact that Barbaro concerned an appeal by offenders who argued that they had been denied procedural fairness by the sentencing judge's refusal to receive statements of what the prosecution considered to be the bounds of the available sentencing ranges. 17 There is no reason in principle as to why an applicant should be precluded from making submissions on the range or amount of penalties but not a respondent. Indeed in Barbaro, there are a number of references concerning where "a party makes a submission to a sentencing judge" (emphasis added): see for example Barbaro at [35] and [36]. 18 The passages of the Full Court's reasons referred to by the applicant, on their face, support the applicant's conclusion. The Full Court was exercising original, not appellate, jurisdiction upon a direction by the Chief Justice pursuant to s 20(1A) of the Federal Court of Australia Act 1976 (Cth). This was so, as appears from [8] of the Full Court's reasons, as a combined result of the decision in Barbaro and, in particular, first instance judgments in this Court which have held that Barbaro had no application to civil penalty questions. The Full Court concluded at [244] that it was not seeking to establish general rules as to the conduct of such proceedings. I take that to mean just what it says. It does not amount to a retreat from its conclusions concerning the admissibility of submissions as to quantum, be it a fixed amount, or a range. These conclusions do not extend to the use of prior contraventions in assessing an appropriate penalty, as is apparent, were it necessary, from the Full Court's reasons at [252]-[253]. 19 Accordingly, I propose to follow the decision of the Full Court, albeit in its original jurisdiction. Special leave to appeal to the High Court has recently been granted in June 2015. It is unnecessary to await the outcome of that appeal before disposing of this matter. This is because I would not have been assisted by the penalty ranges proffered by the parties. They were significantly different one from the other. I would have imposed the penalties which I have for the reasons I will explain.

Upton's First Contravention: 8 October 2012 20 Upton's First Contravention occurred on 8 October 2012 at the Project while he was exercising rights in accordance with Part 3-4 of the FW Act. Upton attended the Project on that day in order to hold discussions with employees for the purposes of s 484 of the FW Act. 21 As at 8 October 2012, the occupier of the Project, Bechtel (Western Australia) Pty Ltd (Bechtel) had requested that discussions by permit holders be held in a temporary sea container (8 October Meeting Room). Although Upton's view was that the 8 October Meeting Room was inadequate, Bechtel's view was that it was the best available option because of the construction phase of the Project. 22 The applicant accepts that Upton's view as to the adequacy of the 8 October Meeting Room was not wholly unreasonable, but submits that in light of the phase of the Project at that point in time, it was the best option available, and it did not excuse the verbally abusive behaviour engaged in by Upton. 23 Upton acted in an improper manner on 8 October 2012 by engaging in the following conduct: (a) After being escorted to the 8 October Meeting Room, Upton thereafter spoke to James Garrett, Bechtel's Employee Relations Representative at the Project. After he was instructed by Garrett that he was not to go to Bechtel's office and that if he had issues with the 8 October Meeting Room, he should raise it with Fair Work Australia, Upton responded with obscene remarks in words to the effect of: That's the AWU way, we don't do things that way. We do things the fucking CFMEU way. and I won't accept you treating the boys like fucking dogs. Fuck off. (the First Obscene Remarks). (b) After making the First Obscene Remarks, Upton then engaged in further inappropriate behaviour and said words to the effect of the following to Ben Cravey, Bechtel's Deputy Employee Relations Manager: Is this shithole place acceptable to you? Is this shithole good for you fucking Americans? This is not fucking America. You think you can treat us like shit, you fucking Americans. Australians won't stand for this. You fucking Americans can't push us around like we're pieces of shit. We won't put up with you fucking Americans here, not here. (the Second Obscene Remarks). (c) Shortly after the Second Obscene Remarks, Cravey approached to within two to three feet of Upton and then Upton stepped towards Cravey and made further obscene remarks in words to the effect of: You want to hit me? Go ahead and hit me you fucking American. Come on and hit me you fucking American. Hit me, go ahead. 24 The applicant submits that Upton's First Contravention was serious and, in particular, that Upton's repeated obscene language towards Garrett and Cravey, who were merely performing their jobs, amounts to a clear breach of the standards of conduct that would be expected of a person in Upton's position by reasonable persons with knowledge of the duties, powers and authority of the position and the circumstances of the case: R v Byrnes (1995) 183 CLR 501 at 514-515, cited in Director, Fair Work Building Industry Inspectorate v Myles [2014] FCCA 1429 at [11]. 25 The respondents submit that Upton's outbursts constituting his First Contravention were a result of particular circumstances on the day leading to understandable frustration and anger. I find that those circumstances existed. As the respondents concede they do not excuse Upton's conduct. Nor, in my opinion, contrary to the respondents' submission, do they operate to mitigate penalty. 26 The circumstances relied upon included his three hour car journey, the extreme heat on the day, the facilities Bechtel sought to impose on him were a sea container with only one window, no apparent air-conditioning and with an internal temperature at the time of over 50 degrees, and that Bechtel's own safety advisor did not consider those facilities fit for purpose. Upton fully accepts that his outbursts were wrong and apologises for them. 27 They also submit that Upton's final obscene remarks on 8 October 2012 were made at a time at which Upton believed that Cravey was about to hit him. I give little weight to this submission based on Upton's evidence that he thought Cravey was trying to intimidate him and was going to hit him. I note that, in his written evidence, Upton states that, in retrospect, he has come to the conclusion that Cravey would not have actually hit him. That belated conclusion is well justified. It is the case that Cravey approached Upton to within two to three feet of him after Upton had directed the Second Obscene Remarks to him. However, Cravey said nothing. He did not raise his arms. It was Upton who then moved even closer to Cravey and made his final obscene remarks actually challenging Cravey three times, in rapid succession, to hit him. Cravey did not do so. It would not have been surprising, in the circumstances, if Cravey had hit Upton. However, he did not respond to the challenges, turned his back on Upton and walked away. Upton then followed him. Cravey's exercise of self-control was commendable and stands in stark relief against the lack of it displayed by Upton. 28 I regard Upton's conduct as deplorable particularly so for someone acting in his official capacity. There were plainly other avenues for Upton to have advanced his legitimate concerns as to the meeting room. Indulging in racially tainted abusive language was not one of them. I do not regard any of the circumstances as relevant to the mitigation of penalty. It was Upton who was acting aggressively and using obscene and racist language directed at Cravey. He was informed that he should take his concerns to Fair Work Australia. Upton, I infer, would already have known this to be the case. 29 I have taken into account that this is the first contravention of industrial laws by Upton. Nonetheless, I regard it as a serious contravention. It is the kind of contravention which could so easily have resulted in actual violence. The language used, as well as being repeatedly obscene, had a particularly nasty racist overtone. This is a case which calls for a strong deterrent penalty, both specific and general. I will impose a penalty of $3,000. 30 I accept Upton's apology for his conduct contained in his written evidence as a genuine statement of remorse. This does not however, extinguish the need for specific deterrence. I do not place much weight on the corrective action taken by the CFMEU related to Upton. 31 Upton, in his written evidence, acknowledges that before he could obtain a right of entry permit under the FW Act he had to undergo training about his rights and responsibilities and that the CFMEU had provided that training both before and after the events of 8 October 2012. Although Upton said that his conduct on that day "was inconsistent with that training" there is a history over a number of years of contraventions of industrial laws by CFMEU officials for whom the CFMEU is responsible and which have involved those officials, variously, in using obscene and threatening language, making threats of assault and in some cases involving scuffles and physical altercation.

Upton's Second Contravention: 13 February 2013 32 Upton's Second Contravention occurred on 13 February 2013 at the Project while he was exercising rights in accordance with Part 3-4 of the FW Act. Upton attended the Project on 13 February 2013 to hold discussions with employees for the purposes of s 484 of the FW Act (13 February Discussions). 33 The following are agreed facts. As at 13 February 2013, right of entry discussions at the Project were held in a demountable building (13 February Meeting Room). The 13 February Meeting Room was not fit for holding the 13 February Discussions and it was not reasonable for Bechtel to request that the discussions be held there. However, it was Bechtel's view that it was the best available option because of the construction phase of the Project. 34 However, the applicant submits that although this is a factor which mitigates the penalty which should be imposed, it does not relieve Upton of liability for the conduct that he thereafter engaged in. 35 Upton acted in an improper manner on 13 February 2013 by engaging in the following conduct: (a) after being instructed by Brett Waller, the Construction Manager for Monadelphous Engineering Associates Pty Ltd (Monadelphous), Bechtel's subcontractors, that he was not permitted anywhere on the Project other than the 13 February Meeting Room, Upton ignored this instruction and walked into the 'wet mess' area of the Project (Fly Camp); and (b) thereafter conducted the 13 February Discussions in the Fly Camp. 36 The Fly Camp was a part of the Project that was used mainly for residential purposes for the purposes of s 493 of the FW Act. 37 Section 493 of the FW Act is a provision within Part 3-4 of the FW Act and provides that: The permit holder must not enter any part of premises that is used mainly for residential purposes. 38 The Explanatory Memorandum to the Fair Work Bill 2008 (Cth) provides, in relation to s 493, that: If a permit holder enters a part of premises used for residential purposes, that permit holder is not authorised to enter or remain on the premises because of the operation of clause 486. 39 Although it is agreed that Bechtel did not assert that Upton was entering an area used mainly for residential purposes, the applicant submits that this fact is irrelevant. Contravention of s 500 of the FW Act by reason of entering a part of a premises used mainly for residential purposes contrary to s 493 is not dependent on the occupier (or any other person) positively stating the nature of the premises to the permit holder. The applicant submits that this is particularly so when: (a) Upton ought to have known about the Fly Camp because he earlier asserted that he was going to "the Fly Camp mess facility"; (b) Upton remained on the Project after entering the Fly Camp, when he was not permitted to do so; (c) Upton was given multiple instructions not to venture beyond the 13 February Meeting Room; and (d) even after arriving at the Fly Camp, he was again warned by Waller that he was not permitted to be there. 40 The applicant submits that although Upton's Second Contravention was not as serious as Upton's First Contravention, it still constitutes a blatant contravention of s 500 of the FW Act. 41 I accept Upton's evidence which, in effect, was that his use of the Fly Camp was not a premeditated contravention. Rather, I accept that it arose out of carelessness on his part in failing to properly consider the nature of the area he was entering. I accept that Upton did not believe, when entering this area, and then remaining there, that it was used mainly for residential purposes. I accept his evidence that if he had known the Fly Camp was used mainly for residential purposes he would not have gone there. I have also taken into account the fact that this area was not in use at the time Upton went there, and therefore no residents were in any way inconvenienced. 42 The applicant submits that Upton's insistence in not holding the 13 February Discussions in the 13 February Meeting Room, but rather holding them in a residential area (and then remaining there) amounts to a breach of the standards of conduct that would be expected of a person in Upton's position by reasonable persons with knowledge of the duties, powers and authority of the position and circumstances of the case: Byrnes at 514-515, cited in Myles at [11]. 43 However, I accept the respondents' submission that Upton's insistence in not holding the discussions in the demountable building did not amount to a breach of the standards of conduct expected of a person in his position. Indeed it is an agreed fact that Upton was not under any obligation to comply with Waller's instructions that the meeting had to take place in the 13 February Meeting Room as it was not a reasonable request. 44 The conduct that was improper was holding the 13 February Discussions in the Fly Camp. The respondents accept this to be so. Upton was not obliged to stay in an area that was not fit for holding discussions. The respondents submit further that subject to complying with reasonable health and safety requests and not entering an area used for residential purposes, Upton was entitled to find an area that was suitable. They rely upon the provisions of s 492 of the FW Act. It is not necessary for me to determine this question. It is sufficient that the Fly Camp chosen by Upton was used mainly for residential purposes. 45 Nonetheless, the respondents accept that the fact that the instructions given to Upton by Waller in relation to the 13 February Discussions in the 13 February Meeting Room were not reasonable did not thereafter give Upton an unfettered right to walk to wherever he wished on the Project, nor did it give him a right to enter the Fly Camp to hold the 13 February Discussions. 46 All parties submit that the fact that it was unreasonable for Bechtel to request the 13 February Discussions be held in the demountable building is relevant to mitigation of penalty but that it does not relieve him of liability for his conduct. It is relevant, I accept, because it explains his desire to find a more suitable place for those discussions. 47 The respondents accept that Upton acted in an improper manner by proceeding to the Fly Camp and conducting the 13 February Discussions there because it was an area used for residential purposes. 48 I find that Upton's conduct in this respect was made in ignorance of the fact that by holding the meeting in the Fly Camp he was contravening the FW Act. I reject the submission therefore that this was a blatant contravention. His refusal to bow to demands from Waller not to use the Fly Camp was blatant but that is not the same thing. Nonetheless, Upton acknowledges now that he should have been more careful. 49 I regard this contravention as considerably less serious than the First Contravention. There are mitigating factors to which I have referred. The need for specific deterrence is low. I will impose a penalty on Upton of $1,000.

CFMEU's contraventions 50 The CFMEU has admitted to two contraventions of s 500 of the FW Act by reason of Upton's contraventions.

Nature and extent of loss or damage 51 It is common ground that no quantifiable economic loss or damage was suffered as a result of the respondents' contraventions.

Course of conduct 52 The applicant seeks a separate declaration, and a separate penalty, for each day of the contravening entries by Upton (and the respondents agree to the making of such declarations). The contraventions are both distinct, occurred approximately four months apart, and are not the subject of any course of conduct. The respondents, correctly in my view, accept that this is so.

Prior relevant conduct 53 The CFMEU has a significant record of non-compliance with the provisions of industrial legislation. A table attached to the applicant's submissions outlines these. In Director of the Fair Work Building Industry Inspectorate v Cartledge [2014] FCA 1047 at [89], Mansfield J said that in relation to such prior contraventions involving the CFMEU: In a general sense, they are of relevance to the overall conclusion as to appropriate penalties because they may inform the assessment of the personal deterrence appropriate in respect of these contraventions. 54 The respondents submit, relying upon the judgment of Dowsett J in Temple v Powell (2008) 169 FCR 169, that only conduct preceding that in question is taken into account in fixing penalties. The passage of his Honour's judgment advanced by the respondents, [62], is hardly authority for this proposition. It stated relevantly: Normally, only conduct preceding that in question is taken into account in fixing penalties. 55 It is obiter and passed without argument on the question. It is not couched in absolute terms. It may be correct that this is normally what occurs. However, I do not take his Honour to be saying that conduct post-dating the contraventions in question is irrelevant to the question of penalty. Justice Kenny in Cahill v Construction, Forestry, Mining and Energy Union (No 4) (2009) 189 IR 304; [2009] FCA 1040, correctly, in my opinion, observed at [41] that "similar conduct subsequently found to have been done after the relevant date [of the contravention]…is not irrelevant to the assessment of appropriate penalty". That case went on appeal including on the grounds that the penalties imposed were manifestly excessive. No point was taken concerning the primary judge's use of post contravention conduct: Construction, Forestry, Mining and Energy Union v Cahill (2010) 269 ALR 1; [2010] FCAFC 39. 56 The post contravention conduct may be relevant to the assessment of penalty because it informs the Court as to matters which particularly affect the question of specific deterrence. It would be artificial to ignore evidence of later contraventions by the same party arising out of similar conduct which constituted the contravention in respect of which appropriate penalties were being assessed. Although adverse to the CFMEU, it is no different in principle to taking account of other post contravention conduct such as evidence of contrition or corrective which may have a mitigating effect upon the amount of penalty to be assessed. 57 Nonetheless, I have had regard only to those cases involving abuse of the right of entry system and the use by CFMEU officials, including senior CFMEU officials, of obscene and abusive language, the making of threats including threats of physical assault and actual assault directed at employees or officers employed by the regulator. The matters to which I have had regard are numbered 1, 2, 4, 23, 30, 32, 35, 39, 43, 46, 50, 59, 65, 68 and 75 in the provided table. Appendix A of these reasons is an abridged and amended version of this table. The amendments are to correct citation and other errors. 58 The CFMEU submits that while contraventions within a different branch of an organisation are relevant, they are given less weight than contraventions within the branch in question. The decision of the Full Court in Draffin v Construction, Forestry, Mining and Energy Union (2009) 189 IR 145; [2009] FCAFC 120 at [72], which was cited in support, is not authority for such a proposition. Indeed, the Full Court at [72] expressly doubted its correctness. 59 I respectfully adopt, in this respect, what was stated by White J in Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (2014) 140 ALD 337 at [58]: I do not consider it correct in principle that a previous contravention by an organisation which is otherwise relevant should be ignored altogether when fixing penalty, or be given less weight, only because it occurred in another state and by a different branch of the organisation. 60 The CFMEU is a national organisation and should be regarded as such where considerations of penalty, in particular, the promotion of specific deterrence are under consideration. 61 Whilst the CFMEU's record does not mean that a disproportionate penalty can or should be imposed, it is nonetheless relevant to the assessment of the level of penalty that is necessary for deterrence (see Temple at [64]). The CFMEU's long history of its officials conducting themselves unlawfully involving the very kind of conduct in which Upton engaged on 8 October 2012 calls for a significant component of specific deterrence. 62 That said, as the CFMEU correctly submits, a respondent is not to be punished again for prior conduct. Relevant prior conduct may diminish leniency, having an upward effect on penalty, but it still must be within the appropriate limits indicated by the circumstances of the contravening conduct. 63 I reject the CFMEU's submission that in this case specific deterrence need not be a major consideration in determining penalty. The CFMEU's history of similar contraventions amply supports the need for specific deterrence.

Whether or not the contraventions were deliberate 64 Upton has admitted to having acted acting in an improper manner on 8 October 2012 and 13 February 2013. His conduct whilst not premeditated was nonetheless deliberate and repeatedly so. 65 I find, however, that whilst Upton's conduct on 13 February 2013 was deliberate and therefore amenable to penalty it was not a knowing but rather a careless contravention.

Size of the CFMEU and involvement of senior management 66 The CFMEU is a large, prominent and influential national union and does not submit that it or Upton have an incapacity to pay. 67 It is common ground that Upton was not in a senior management position of the CFMEU. The CFMEU submits that this consideration supports the view that it would be inappropriate to penalise the CFMEU to a greater extent than any penalty that might ultimately be imposed on Upton. I do not accept that submission. There is no necessary equivalence. I do however, accept that there is no aggravation of the contravention as one committed by a senior official of the CFMEU.

Contrition, corrective action and cooperation with enforcement authorities 68 The applicant submits, and I accept, that the respondents are entitled to credit for their admissions of the facts and the contraventions reflected in the SOAFA, and this is indicative of a willingness to facilitate the course of justice. 69 The applicant also accepts, as do I, that the respondents' admissions came at an early stage of the proceeding and avoided the need for costs to be incurred preparing for any mediation or trial. 70 As I mentioned, I accept that Upton is genuinely apologetic for his conduct and that he proposes to avoid such conduct in the future. 71 The CFMEU submits that it took early steps to discipline Upton for his behaviour and make it clear his conduct was not acceptable. Upton was given a "formal warning" by the CFMEU Construction and General Division WA Branch Secretary Mick Buchan on 19 October 2012, not to conduct himself in the manner he had. I take this to be what the CFMEU means by disciplining Upton. However, there is no evidence of contrition of the part of the CFMEU. It took no steps formally or informally to apologise for Upton's disgraceful conduct toward Cravey. The CFMEU submits that it is also relevant to note Upton's evidence that the CFMEU's training makes it clear that his conduct fell below the standards required by right of entry permit holders. I do not know what this training consists of but whatever it is it needs to be bolstered because history suggests that it is observed in the breach.

The need for specific and general deterrence 72 I find that there is a significant requirement in relation to Upton's First Contravention for specific deterrence against the CFMEU given its history of prior similar contraventions. 73 The circumstances giving rise to the contraventions have been the subject of proceedings before the Fair Work Commission in matter number RE2013/536. As a consequence of those proceedings, Upton was first restricted (between 18 March 2013 and 28 April 2013), and then fully suspended (between 29 April 2013 and 1 January 2014), from exercising any right of entry at the Project. 74 I do not regard the previous orders made by Deputy President McCarthy as of any particular relevance and particularly that is so in the case of the CFMEU. 75 I will impose a penalty upon the CFMEU in respect of Upton's First Contravention of $15,000 and for Upton's Second Contravention, $5,000.

Payment of the penalties to the Commonwealth 76 The parties are agreed that the penalties should be paid to the Commonwealth. This course is authorised by s 546(3)(a) of the FW Act. I accept that this is apt. I certify that the preceding seventy-six (76) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.

Associate: Dated: 3 July 2015 APPENDIX A: ABRIDGED TABLE OF PRIOR PENALTIES AND DECLARATIONS UNDER INDUSTRIAL LAWS AGAINST BUILDING INDUSTRY ASSOCIATIONS AND OTHER PARTICIPANTS Legislation Key: • FW Act - Fair Work Act 2009 (Cth) • BCII Act - Building and Construction Industry Improvement Act 2005 (Cth) • WR Act - Workplace Relations Act 1996 (Cth) REF NO. CASE NAME AND CITATION JURISDICTION AND JUDGE DATES OF RELEVANT CONDUCT NATURE OF CONDUCT DATE OF JUDGMENT ON LIABILITY & PENALTY PENALTY IMPOSED & NUMBER OF CONTRAVENTIONS

  Director of the Fair Work Building Industry Inspectorate v Stephenson                                                                                        Federal Court - Adelaide                               31 March 2014 (SAD 138 of 2014)   CFMEU officials exercising rights of entry on various constructions sites in Adelaide (the Leabrook site on 31 March 2014; the Somerton Park site on 31 March 2014; the Somerton Park site on 7 April 2014; the Grenfell Street site on 7 May 2014).                                                                                                                                                                                                                                                      • Statement of agreed facts                                                     $205,100 comprising:
  [2014] FCA 1432                                                                                                                                              White J                                                31 March 2014 (SAD 140 of 2014)   Officials contravened s 500 of the Fair Work Act by engaging in conduct including failing to give notice, failing to comply with reasonable directions including not to enter the site and to leave the site, and CFMEU official Perkovic engaging in conduct on the Grenfell Street site whereby he engaged in a verbal tirade against a Fair Work Building Industry Inspector.                                                                                                                          • Penalty decision on 23 December 2014                                          • $4,000 against Stephenson for 2 contraventions of s 500 of the FW Act
                                                                                                                                                                                                                      7 April 2014 (SAD 139 of 2014)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              • $1,000 against Smart for 1 contravention of s 500 of the FW Act
                                                                                                                                                                                                                      7 May 2014 (SAD 141 of 2014)                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                • $3,800 against Bolton for 2 contraventions of s 500 of the FW Act
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • $1,100 against Vitler for 1 contravention of s 500 of the FW Act
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • $800 against Huddy for 1 contravention of s 500 of the FW Act
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • $4,000 against McDermott for 1 contravention of s 500 of the FW Act
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • $800 against Jarrett for 1 contravention of s 500 of the FW Act
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • $1,100 against Sloan for 1 contravention of s 500 of the FW Act
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • $3,500 against Pitt for 1 contravention of s 500 of the FW Act
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • $5,000 against Perkovic for 1 contravention of s 500 of the FW Act
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • $180,000 against the CFMEU for all the officials' contraventions of s 500 of the FW Act

  Director of the Fair Work Building Industry Inspectorate v Cartledge                                                                                         Federal Court -Adelaide                                19 and 20 March 2014              CFMEU officials seeking to exercise rights of entry on a construction site at 50 Flinders Street, Adelaide on 19 and 20 March 2014.                                                                                                                                                                                                                                                                                                                                                                       • Statement of agreed facts                                                     $152,600 comprising:
  [2014] FCA 1047                                                                                                                                              Mansfield J                                                                              Officials contravened s 500 of the FW Act by engaging in conduct including failing to give notice, failing to comply with reasonable directions including not to enter the site, and engaging in a physical altercation to gain access to the site.                                                                                                                                                                                                                                                       • Penalty decision on 2 October 2014                                            • $6,000 against O'Connor for 2 contraventions of s 500 of the FW Act ($1,500 for 19 March 2014 and $4,500 for 20 March 2014)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • $9,000 against Pitt for 2 contraventions of s 500 of the FW Act ($3,000 for 19 March 2014 and $6,000 for 20 March 2014)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • $3,000 against Cartledge for 1 contravention of s 500 of the FW Act (20 March 2014)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • $4,000 against Bolton for 1 contravention of s 500 of the FW Act (20 March 2014)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • $600 against Stephenson for 1 contravention of s 500 of the FW Act (20 March 2014)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • $30,000 against the CFMEU for the officials' contraventions of s 500 of the FW Act on (19 March 2014)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • $100,000 against the CFMEU for the officials' contraventions of s 500 of the FW Act on (20 March 2014)

  Brookfield Multiplex Engineering and Infrastructure Pty Ltd v McDonald                                                                                       Federal Court -Perth                                   25, 26 and 27 March 2013          CFMEU officials Joseph McDonald and Walter Molina attended the Mundaring water treatment plant construction site on 25 March 2013 and made demands of Brookfield Multiplex to perform a safety inspection and for workers to remain in the sheds following a safety incident on 23 March 2013.                                                                                                                                                                                                            • Statement of agreed Facts                                                     $123,000 comprising:
  [2014] FCA 389                                                                                                                                               North J                                                                                  Brookfield Multiplex refused and Joseph McDonald and Walter Molina organised 150 employees to take industrial action. Joseph McDonald and Walter Molina attended the site again on 26 and 27 March 2013 engaging in coercive conduct and again organising industrial action. On 27 March 2013, Joseph McDonald was involved in a scuffle threatening employees attempting to enter the site. Joseph McDonald also admitted to organising industrial action during an earlier incident on 4 October 2012.  • Penalty decision on 11 March 2014                                             • $21,000 against McDonald for 2 contraventions of s 346 of the FW Act, 3 contraventions of s 348 of the FW Act and 3 contraventions of s 417 of the FW Act
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • $7,000 against Molina for 2 contraventions of s 346 of the FW Act, 3 contraventions of s 348 of the FW Act and 3 contraventions of s 417 of the FW Act
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  • $95,000 against the CFMEU for 2 contraventions of s 346 of the FW Act, 3 contraventions of s 348 of the FW Act and 3 contraventions of s 417 of the FW Act

 ABCC v Mitchell & Ors                                                                                                                                        Federal Magistrates Court - Sydney                     17 June 2010                      At a Dee Why site, a CFMEU organiser, Mitchell, acted in an improper manner by being loud, extensively using expletives, and personally directing his behaviour at employees of Cavill Properties Pty Ltd.                                                                                                                                                                                                                                                                                                • Statement of agreed facts and agreed penalties proposed                       $12,500 comprising:
 [2011] FMCA 622                                                                                                                                              Raphael FM                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         • Penalty decision on 16 August 2011                                            • $2,500 against Mitchell (for 1 contravention of s 500 of the FW Act)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 • $5,000 against the CFMEU (for 1 contravention of s 500 of the FW Act)
                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 • $5,000 against the CFMEU (NSW) (for 1 contravention of s 500 of the FW Act)

 Director of the Fair Work Building Industry Inspectorate v CFMEU                                                                                             Federal Magistrates Court - Melbourne                  9 October 2009                    A CFMEU officer threatened with assault and repeatedly abused with obscene language a building company's site manager with intent to coerce the company to comply with his request that the site shop steward be permitted to attend site inductions.                                                                                                                                                                                                                                                     • Penalty decision on 20 February 2013                                          $10,000 against the CFMEU (for 1 contravention of s 348 of the FW Act)
 [2013] FMCA 160                                                                                                                                              Whelan FM

32 Helal v Brookfield Multiplex Limited Federal Court 1 August 2009 A CFMEU officer threatened to organise or take action with intent to coerce a company to employ two people as building employees. This occurred in an aggressive telephone discussion between a CFMEU officer and the company's general manager after the company dismissed the employees for misconduct. • Statement of agreed facts and agreed penalties proposed $30,000 and declarations against the CFMEU for 1 contravention of s 43(1) of the BCII Act [2012] FCA 653 (penalty) Bromberg J • Penalty decision on 21 June 2012 35. Lovewell v Pearson & Anor Federal Magistrates Court - Brisbane 5 June 2009 A union official who was a federal permit holder and state authorised representative intentionally hindered and obstructed a company in its work and otherwise acted in an improper manner when he disrupted a concrete pour and swore at employees at a building site in Queensland. • Statement of agreed facts $21,000 comprising: [2011] FMCA 102 Jarrett FM • Penalty decision on 25 February 2011 • $4,500 against Pearson for 1 contravention of s 767(1) of the WR Act • $16,500 against the Australian Building Construction Employees and Builders' Labourers' Federation (Queensland Branch) Union of Employees for 1 contravention of s 767(1) of the WR Act 39. Hardwick v Australian Manufacturing Workers' Union Federal Court 29 November 2008 - 27 March 2009 At Patricia-Baleen Gas Plant site, various unions (including the CFMEU) and organisers took various actions (including threats, pickets and protests) with intent to coerce subcontractors at the site to enter union building agreements. • Statement of agreed facts and agreed penalties proposed $67,500 comprising: (2010) 198 IR 312; [2010] FCA 818 Gordon J • Penalty decision on 4 August 2010 • $9,000 against the CFMEU (for 1 contravention of s 44 of the BCII Act) • $3,500 against Parker (of the CFMEU) (for 1 contravention of s 44 of the BCII Act) • $15,000 against the AMWU (for 1 contravention of s 44 of the BCII Act) • $5,000 against Warren (of the AMWU) (for 1 contravention of s 44 of the BCII Act) • $14,000 against the AWU (for 1 contravention of s 44 of the BCII Act) • $6,000 against Lee (of the AWU) (for 1 contravention of s 44 of the BCII Act) • $11,000 against the CEPU (for 1 contravention of s 44 of the BCII Act) • $4,000 against Mooney (of the CEPU) (for 1 contravention of s 44 of the BCII Act) 43. Gregor v CFMEU & Anor Federal Magistrates Court - Melbourne 24 February 2009 A CFMEU official, Travers, acted in an improper manner when entering to hold discussions by convening an unauthorised meeting and refusing to leave and directing profanities towards management at Tullamarine Airport. • Statement of agreed facts and agreed penalties proposed $6,000 comprising: [2011] FMCA 562 Riethmuller FM • Penalty decision on 22 July 2011 • $5,000 against the CFMEU (for 1 contravention of s 767(1) of the WR Act) • $1,000 against Travers (for 1 contravention of s 767(1) of the WR Act) 46. Darlaston v Parker (2010) 189 FCR 1 (liability) Federal Court 3 - 4 December 2008 CFMEU and CFMEU NSW organisers failed to comply with an occupier's reasonable occupational health and safety request to undertake a site induction. • Liability decision on 23 July 2010 $50,500 comprising: Darlaston v Parker (No 2) (2010) 200 IR 353; [2010] FCA 1382 (penalty) Flick J Another organiser failed to comply with an employer's reasonable occupational health and safety request to stop using scaffolding when requested. • Penalty decision on 10 December 2010 • $15,000 and declarations against the CFMEU (for 7 contraventions of ss 758(3) and 767(1) of the WR Act) An organiser intentionally hindered and obstructed employers and employees by inducing employees to stop work and leave site. • $15,000 and declarations against the CFMEU NSW (for 7 contraventions of ss 758(3) and 767(1) of the WR Act) An organiser failed to comply with an employer's reasonable occupational health and safety request to move vehicles in the vicinity of a crane that was, or was being prepared, to be dismantled. • $8,000 and declarations against Parker (for 2 contraventions of s 758(3) and 1 contravention of s 767(1) of the WR Act) An organiser intentionally acted in an improper manner by driving a vehicle at a gate, behind which stood an employee. • $2,500 and declarations against Hanlon (for 1 contravention of s 758(3) of the WR Act) • $7,500 and declarations against Mitchell (for 1 contravention each of ss 758(3) and 767(1) of the WR Act) • $2,500 and declarations against Kera (for 1 contravention of s 758(3) of the WR Act) 50. Wilson v Nesbit (2009) 195 IR 399; [2009] FCA 1574 Federal Court 23 June 2008 A CFMEU organiser made threats to a company to ban it from any building site in Australia and have it perform a workplace health and safety audit (costing at least $30,000) with intent to coerce the company to terminate its existing workplace agreement and enter into a new workplace agreement with the CFMEU. • Statement of agreed facts $49,000 comprising: Dowsett J • Penalty decision on 23 December 2009 • $40,000 and declarations against the CFMEU (for 1 contravention of s 44 of the BCII Act.) • $9,000 and declarations against Nesbit (for contravention of s 44 of the BCII Act) 59. Gregor v Setka (2010) 199 IR 267; [2010] FMCA 690 (liability) Federal Magistrates Court 6 March 2008 A CFMEU official, Setka, acted in an improper manner by making significant threats to the personal safety of two managers employed by a head contractor. • Liability decision on 21 September 2010 $3,000 against Setka (for 1 contravention of s 767 of the WR Act) Gregor v Setka (No 2) [2010] FMCA 973 (penalty) Burchardt FM • Penalty decision on 20 December 2010 (lowered from $6,000 on appeal) Setka v Gregor (No 2) (2011) 195 FCR 203 (appeal) Full Court of Federal Court • Appeal decision on 28 July 2011 Lander, Tracey and Yates JJ 65. Australian Building and Construction Commissioner [2008] AIRC 1140 (liability) Australian Industrial Relations Commission 19 April 2007 A CFMEU organiser abused his right as a permit holder when he entered a site with the intention to, and then sought to go beyond the scope of his rights, including entering with the intention of doing things other than speaking to employees during meal, or other breaks, including accessing documents and investing suspected underpayments, and by commencing a safety walk. • Liability decision on 22 July 2008 Suspended order suspending Lane's federal permit for 4 months (referable to abuse of right of entry under s 770 of the WR Act) Office of Australian Building and Construction Commissioner v Construction. Forestry, Mining and Energy Union (2008) 177 IR 118; [2008] AIRCFB 898 (appeal) Watson SDP 16 May 2007 • Appeal decision on 19 November 2008 Re Australian Building and Construction Commissioner (2009) 189 IR 244; [2009] AIRC 868 (penalty) Australian Industrial Relations Commission Full Bench • Penalty decision on 29 September 2009 Kaufman and Richards SDPP and Thatcher C 68. Radisich v Buchan, Heath, Molina and Construction, Forestry, Mining and Energy Union Australian Industrial Relations Commission 14 February 2007 A CFMEU organiser abused the right of entry system by his conduct at the Armadale Shopping Centre site, on 14 February 2007. • Settlement and agreed penalty orders proposed For abuse of right of entry under s 770 of the WR Act: [2008] AIRC 896 Lacy SDP 22 February 2007 Another CFMEU organiser abused the right of entry system by his conduct at the Pindan construction site on 22 February 2007. • Penalty decision on 18 November 2008 (reasons published on 20 November 2008) • Federal permit of Buchan suspended for 3 months with further suspended 2-month suspension 24 April 2007 Another CFMEU organiser abused the right of entry system by their conduct at Q-Con site on 24 and 27 April 2007. • Federal permit of Molina suspended for 2 months with further suspended 1-month suspension 27 April 2007 • All CFMEU (C&G Div, WA Div Branch) permits issued in the next two years subject to condition not to enter with McDonald except in certain circumstances • A written direction be given to McDonald by the CFMEU that he is not to purport to rely on any right of entry under the WR Act when he holds no permit 75. Australian Building and Construction Commission v McLoughlin (2007) 165 IR 369; [2007] AIRC 717 Australian Industrial Relations Commission 1 June 2006 A CFMEU organiser abused the right of entry system by his conduct at four separate building sites in Melbourne. • Liability and penalty decision on 29 August 2007 Federal permit of McLoughlin suspended for 2 months and made subject to the condition that the permit holder undertake appropriate training (referable to abuse of right of entry under s 770 of the WR Act) Watson SDP 21 June 2006 6 July 2006 11 July 2006 26 July 2006 3 August 2006 10 August 2006 15 August 2006

Crimes Legislation Amendment (Serious Drugs, Identity Crime and Other Measures) Act 2012(Cth)

Building and Construction Industry Improvement Act 2005(Cth)

Workplace Relations Act 1996(Cth)

Fair Work Act 2009(Cth)ss 484, 493, 500, 539, 546, 793

Crimes Act 1914(Cth)s 4AA(1), s 4AA(1).

At a glance

Court

Decision date

Before

Source

Judgment (19 paragraphs)

Parties

Legislation Cited (6)

Cases Cited (41)