KATZMANN J:
1 This proceeding was instituted by the Australian Building and Construction Commissioner. The conduct the subject of the proceedings involved three officials of the Construction, Forestry, Maritime, Mining and Energy Union which occurred at a building site in Kiama, New South Wales, on 27 and 28 November 2018. The Commissioner alleged multiple contraventions of ss 497, 500 and 503 of the Fair Work Act 2009 (Cth) (FW Act) and s 47 of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) (BCIIP Act). I found some, but not all, of those contraventions proved and that the Union was involved in the proven contraventions: Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (Kiama Aged Care Centre Case) [2021] FCA 920 (liability judgment or LJ).
2 I later imposed penalties on two of the Union officials and the Union: Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (Kiama Aged Care Centre Case) (No 2) [2022] FCA 19 (penalty judgment).
3 In the penalty judgment I ordered the second respondent, Gerasimos Danalis, to pay pecuniary penalties of $6,000 for contravening s 500 of the FW Act and $3,000 for his contravention of s 503 of the FW Act on 27 November 2018; and $2,000 for his contravention of s 500 of the FW Act. I ordered the third respondent, Anthony Dimitriou, to pay a pecuniary penalty of $3,000 in respect of his contravention of s 500 of the FW Act on 28 November 2018. And I ordered that the Union pay the following pecuniary penalties:
(a) $40,000 in respect of each of Mr Danalis's contraventions of s 500 on 27 November 2018;
(b) $50,000 in respect of Mr Danalis's contravention of s 503 on 27 November 2018;
(c) $20,000 in respect of Mr Danalis's contravention of s 500 on 28 November 2018; and
(d) $20,000 in respect of Mr Dimitriou's contravention of s 500 on 28 November 2018.
4 In the penalty judgment I followed the Full Court's judgment in Pattinson v Australian Building and Construction Commissioner (2020) 282 FCR 580 as I was bound to do. For that reason, while I accepted that "[t]he principal, if not sole, purpose of a civil penalty is protective, to operate as a deterrent for the wrongdoer and those who might be tempted to follow suit" (at [24]), I also held that "the penalties must be proportionate to the gravity of the particular contraventions", "even where a large penalty is necessary to provide or promote effective deterrence" (at [24] and [95]) and therefore rejected the Commissioner's submission that a penalty of between 70% to 100% of the maximum available penalties should be imposed on the Union. After my judgment was published, however, the High Court determined that the Full Court erred in holding that a civil penalty must be proportionate to the gravity of the contravening conduct, emphasising the deterrent purpose, and held that the objective seriousness of a contravention and the particular circumstances of a contravenor are only relevant to the extent that they inform the need for deterrence, whether general or specific: Australian Building and Construction Commissioner v Pattinson (2022) 274 CLR 450. A convenient summary of the principles for which Pattinson stands can be found in Fair Work Ombudsman v Roach (The Melbourne Quarter Case) [2023] FCA 781 at [13] (Wheelahan J). It is unnecessary to repeat them here. I am cognisant of them.
5 The Commissioner appealed from both judgments but ultimately only pressed his appeal against the penalties imposed on Mr Dimitriou and the Union. In the meantime, the Australian Building and Construction Commission and the office of Commissioner were abolished by the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) and by Sch 1 Pt 3 Div 5 cl 323(1) the Fair Work Ombudsman was substituted for the Commissioner in this and other proceedings pending on 7 December 2022: see Fair Work Ombudsman (formerly Australian Building and Construction Commissioner) v Construction, Forestry, Maritime, Mining and Energy Union (The Constitution Place Case) (No 2) [2023] FCA 13.
6 On the appeal, the Full Court set aside the orders which imposed penalties on the Union and Mr Dimitriou and remitted the matter to me to reconsider the penalties: Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union (Kiama Aged Care Centre Appeal) [2023] FCAFC 63. The outcome was inevitable after the High Court's decision in Pattinson. The Full Court also found that I erred in taking into account as a mitigating factor in Mr Dimitriou's case the fact that s 510 of the FW Act requires the Fair Work Commission to revoke or suspend Mr Dimitriou's entry permit unless it is satisfied that revocation or suspension would be harsh or unreasonable in the circumstances. As the parties accept, the practical effect of the Full Court's judgment is that the penalties must be increased.
7 This judgment assumes familiarity with all the previous judgments. The gravamen of my findings in the liability judgment appears in the declarations I made. Insofar as they concern Mr Danalis and Mr Dimitriou they were:
1. On 27 November 2018 at a building site on Bonaira St Kiama, New South Wales, the second respondent, Gerasimos Danalis (Danalis), contravened s 500 of the Fair Work Act 2009 (Cth) (FW Act) by intentionally obstructing the driver of a concrete truck from completing delivery of his concrete load to the site; obstructing the project workers from operating the concrete pump to pump the concrete load; and hindering the site manager and a project manager from discharging their duties on the project under construction at the site.
2 On 27 November 2018 Danalis also contravened s 500 of the FW Act at the same building site by intentionally obstructing two other concrete truck drivers from driving their vehicles onto the site to deliver concrete for the pour thereby obstructing project workers from continuing with, and completing, the pour of a concrete slab and hindering the site manager, the project manager, and a traffic controller from discharging their duties on the project.
3. On 27 November 2018 Danalis contravened s 503 of the FW Act at the site by taking action to:
(a) stop the pour of a concrete slab on the project;
(b) stop concrete agitator trucks from entering the site;
(c) shut down the site; and
(d) determine whether or not the site, or part of it, was safe
being reckless as to whether the impression was given that he and two other union officials were authorised by Part 3-4 of the FW Act to do so when they were not authorised.
4. On 28 November 2018 Danalis contravened s 500 of the FW Act by acting in an improper manner at the site by refusing to comply with a reasonable request that he undertake a visitor's induction and then entering the site unaccompanied.
5. On 28 November 2018 the third respondent, Anthony Dimitriou (Dimitriou), contravened s 500 of the FW Act by acting in an improper manner at the site by refusing to comply with a reasonable request that he undertake a visitor's induction and then entering the site unaccompanied.
8 I also declared that on 27 November 2018 the Union contravened s 500 of the FW Act twice by being knowingly concerned in each of Mr Danalis's contraventions of s 500 and once by being knowingly concerned in Mr Danalis's contravention of s 503, and that on 28 November 2018 the Union contravened the FW Act twice by being knowingly concerned in the contraventions of s 500 by Mr Danalis and Mr Dimitriou. The declaration that the Union contravened s 503 by being knowingly concerned in Mr Danalis's contravention of s 503 is wrong and should be corrected. I found the Union had contravened s 503 as a principal, not an accessory (see LJ at [394]-[402]).
9 The maximum penalty the Court may impose on Mr Dimitriou is $12,600 and $63,000 for each contravention by the Union. Section 546(1) of the FW Act gives the Court the power to order a person who has contravened a civil remedy provision of the FW Act to pay a penalty that it considers "appropriate".
10 Since the remittal order, the parties have come to an agreement about the appropriate penalties. They submit that an appropriate penalty for the Union is $250,000 ($80,000 more than the total of the penalties I previously ordered) and $4,000 for Mr Dimitriou ($1,000 more than I previously ordered).
11 In Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 (Agreed Penalties Case), which concerned the imposition of penalties under the Building and Construction Industry Improvement Act 2005 (Cth) (BCII Act), the High Court considered that there was no difficulty in the parties advocating for agreed penalties and the court ordering penalties in accordance with the agreement, provided the court is satisfied that the agreed penalties are appropriate. In doing so, the plurality referred to the "important public policy" of promoting the predictability of outcomes in civil penalty proceedings and that "such predictability of outcome encourages corporations to acknowledge contraventions, which, in turn, assists in avoiding lengthy and complex litigation and thus tends to free the courts to deal with other matters and to free investigating officers to turn to other areas of investigation that await their attention" (at [46] (French CJ, Kiefel, Bell, Nettle and Gordon JJ), Keane J agreeing at [79]). The relevant legislative provisions in the FW Act are not materially different from that those in the BCII Act.
12 In the Agreed Penalties Case Keane J said at [104]:
[A] defendant's agreement to meet a plaintiff's claim for a penalty is relevant as an indication of the defendant's acceptance of responsibility, in a way which is meaningful to the fixing of a proper penalty, for its departure from legal norms which gave rise to the claim. It has significance, of such weight as the court considers appropriate, as an assurance that the defendant may be relied upon not to transgress in that way again. It is relevant to the court's assessment of what is required by way of specific deterrence to prevent departures by the defendant from those standards in the future.
13 As Bromwich J observed in Fair Work Ombudsman v 85 Degrees Coffee Australia Pty Ltd [2022] FCA 1317 at [23], the High Court in Pattinson endorsed the decision in the Agreed Penalties Case.
14 Since the remittal following the Full Court judgment in the present case, each party has adduced additional evidence but neither side asks that my factual findings be revisited. The Ombudsman read an affidavit of William Evans, an AGS lawyer, which updates the material annexed to the affidavit of Emma Gorman upon which the Commissioner relied at the first penalty hearing, by providing the latest publicly available information about the Union's finances and an updated summary of the Union's extensive record of contraventions. The respondents read an affidavit of Brian Lacy AO, who provided "training" to Mr Dimitriou the stated aim of which was to address his previous contravening conduct and "provide him with an opportunity to reflect on and learn from that conduct".
15 Mr Lacy is a Victorian barrister who, between 2001 and 2009 was a presidential member of the Australian Industrial Relations Commission. He deposed that on 20 December 2022 he was briefed by the Union's NSW Construction and General Divisional Branch to provide training to ensure that Mr Dimitriou had the requisite knowledge to enable him to comply with his responsibilities and obligations as a permit holder, including "specific instruction and detail relating to his contravention of the FW Act as disclosed [in the present case]". The training was conducted virtually, took one and a half hours, and consisted of a presentation and discussions around the contents of a PowerPoint, following which Mr Lacy supplied Mr Dimitriou with a written report. That report was annexed to Mr Lacy's affidavit. So were the PowerPoint slides.
16 In his report Mr Lacy stated that "Mr Dimitriou engaged positively in the training". He formed the impression that Mr Dimitriou "takes pride in the role he is required to perform and is keen to have an entry permit so that he can continue to serve the membership of the Union". Mr Lacy concluded (without alteration):
30. Based on his positive participation, his capacity to articulate how his conduct was found to have contravened the relevant provision of the FW Act and his responses to propositions put to him in the training sessions I am satisfied the Mr Dimitriou understands:
a. why the conduct on 28 November 2018 was found to be in contravention of the FW Act;
b. the concepts of hindering, obstructing, and acting in an improper manner;
c. why the conduct in the Kiama Aged Care Centre cases was wrong;
d. the conditions and qualifications for grant of an entry permit under the FW Act and how his past conduct will be relevant to a determination of an application to revoke his permit.
31. In my opinion Mr Dimitriou understands that in order to retain his entry permit he must comply with its conditions and the legislative conditions of entry to a worksite[.] He understands he must comply with the reasonable requests of an occupier when exercising a right of entry.
32 I am satisfied Mr Dimitriou has the knowledge, the ability and willingness to comply with the law in future. He has said he is committed to doing so and that he will comply with the requirements of a permit holder and an Authorised Representative of a Registered Employee Organisation.
17 The Ombudsman did not require Mr Lacy for cross-examination and does not challenge his evidence. I will take the evidence into account. I note, however, that Mr Lacy was engaged only after the appeal from my penalty judgment was allowed and there is no evidence to indicate that the Union took any steps to provide training and instruction on the same or similar subjects to other union officials to prevent contraventions of the same or a like kind.
18 Moreover, nothing in the report indicates that Mr Dimitriou is contrite about his behaviour, except insofar as it has the potential to jeopardise his capacity to retain his permits. There is no reason to believe that he was unaware of his responsibilities as a permit holder when the contravention occurred. To the contrary, under cross-examination in the liability hearing Mr Dimitriou admitted that he had undertaken a SafeWork NSW entry permit training course in March 2018 before acquiring his entry permit under the Work Health and Safety Act 2011 (NSW) the following month, being one of the two entry permits pursuant to which he entered the building site, and the contravention was committed only seven months after he obtained his permit. Mr Lacy said that, "[f]ollowing a discussion with Mr Dimitriou about hindering, obstructing and acting in an improper manner [the conduct proscribed by s 500 of the FW Act], [Mr Dimitriou] demonstrated a clear understanding of the concepts and undertook not to engage in such action in future". But no such undertaking was offered to the Court.
19 This is not the only case in which Mr Lacy's services have been procured by the Union. Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Monash Freeway Widening Case) (No 2) [2021] FCA 1101 is one of several others in which Mr Lacy has provided training and instruction to union officials after they have been found to have contravened the FW Act. Snaden J said (at [50]) that Mr Lacy is "well known to and well respected by those who have practi[s]ed in the field of industrial law over recent decades" and that "[h]is expertise undoubtedly extends to the nature and limits of the rights of entry conferred by part 3-4 of the FW Act". At [59], in remarks endorsed by Logan J in Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (the Titan Cranes Case) [2022] FCA 774 at [46], Snaden J described the practice of Mr Lacy delivering training to officials of the Union as "a welcome development … that reflects well on the Union (for organising it) and on [the union official] (for agreeing to undertake it)". His Honour explained:
It reflects an acknowledgment, on the respondents' part, of wrongdoing- of a problem requiring corrective action. It weighs against other considerations (most obviously, the union's poor history of statutory contravention), which, in the balance, inform the deterrent effect that the court must strive to achieve through the imposition of penalties in this case.
20 In Pattinson at [121] Edelman J, in the course of considering whether the High Court should re-exercise the penalty discretion, remarked that "it would surely be highly relevant in the re-exercise of the discretion to know whether the CFMMEU had committed any similar contraventions in the three years since the contraventions in this case".
21 The evidence in the table annexed to Mr Evans' affidavit discloses that the Union has continued to contravene the FW Act, including s 500, and has also contravened the BCIIP Act. The table includes 20 cases in which pecuniary penalties have been imposed on the Union in respect of contraventions occurring since November 2018:
(1) on 10 December 2018 at a major construction site in Perth;
(2) on 16 January 2019 at a wind farm in Tasmania;
(3) on 25 January, 4, 5 and 14 March 2019 in Coffs Harbour;
(4) on 25, 30 and 31 January and 1 February 2019 at a commercial site in Botany, New South Wales;
(5) on 15 February 2019 at a construction site in Perth;
(6) on 21 February 2019 at a building site in southwest Sydney;
(7) on 8 March 2019 at a building site in the Sunshine Coast;
(8) on 11 and 12 March 2019 at a construction site in Townsville;
(9) on 3 April, 23 and 24 May and 20 June 2019 during the Adelaide Airport redevelopment project;
(10) on 23 and 28 May 2019 at a construction site in Hobart;
(11) on 11 July 2019 at a construction site in Melbourne;
(12) on 22 August 2019 at a construction site in northern New South Wales;
(13) on 16 October 2019 at a construction site in Adelaide;
(14) on 3 and 4 December 2019 during the construction of a bridge at the West Gate Tunnel Project in Melbourne;
(15) on 5 December 2019 at a building site in Perth;
(16) on 14 February 2020 during an inspection of a building site in South Australia;
(17) on 15 April 2020 at a rail construction project in Brisbane;
(18) on 30 April 2020 at a building site on the Gold Coast;
(19) on 5 November 2020 in Brisbane; and
(20) on 12 and 13 January 2021 in Brisbane.
22 Notably, there is no evidence of contravening conduct since January 2021. Still, the Union remains unrepentant. As the Ombudsman submitted, it has expressed no regret, remorse or apology for the conduct of its officials and there is no evidence that it has taken any disciplinary action or imposed any sanction on Mr Dimitriou for his conduct. In my earlier penalty judgment (at [94]), I observed:
The Union adduced no evidence to show that it has any system in place to ensure compliance or prevent or reduce the risk of its officials or employees breaking the law. It has adduced no evidence to indicate that it has taken any corrective action. It appears to have no culture of compliance. If anything, the evidence suggests it has a culture of non-compliance. While it insists on employers complying with the law, it behaves as if it is above the law.
23 I do not consider the use of Mr Lacy to provide training and instruction after a contravention to be evidence of a system to ensure compliance. Mr Lacy appears to be engaged on an ad hoc basis after contraventions have been found in order to reduce the quantum of penalties. If the Union were serious about eliminating or reducing the risk of contravening conduct, it would have rolled out an education program to all union officials across the country upon their engagement and at regular intervals thereafter. It is possible, however, that the deployment of Mr Lacy has contributed to the absence of contravening conduct since January 2021, if indeed that is the true position.
24 In the earlier penalty judgment I accepted the Commissioner's submission that the Union's history of contravening conduct reflected a continuing attitude of disobedience of the law and a heightened need for both specific and general deterrence. While on the face of things the Union's clean record in the last 33 months is encouraging, it is too soon to tell whether there is little or no need anymore for specific deterrence. For all I know, it may merely reflect a diversion of resources away from pursuing the Union or delays in hearing cases or delivering judgment.
25 The recent financial information continues to show that the Union continues to be well-resourced, although its resources have been depleted somewhat by its expenditure on litigation. As I said at [38] of the earlier penalty judgment, this evidence is relevant to the extent of the penalty necessary for it to operate as an effective deterrent. It also indicates that the agreed penalty would not be oppressive.
26 I have some doubt about whether the agreed penalty would be a sufficient deterrent to the Union.
27 The respondents submitted that there are utilitarian reasons for accepting the parties' agreement, referring to the public interest in promoting settlement of litigation, particularly where the litigation is likely to be lengthy, citing Standen v Feehan (No 2) [2008] FCA 1574; 177 IR 276 at [10] where Lander J relied on the reasons in NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285 at 290-291 (Burchett and Kiefel JJ). I am unmoved by this submission. It seems to me that the agreement provides no appreciable benefit to the Ombudsman or the Court because it followed two heavily contested hearings on both liability and orders and the consequential appeal.
28 Nevertheless, for the following reasons I am persuaded that the amounts proposed are within the range of appropriate penalties and are appropriate.
29 First, the amount proposed for the Union is almost 80% of the maximum possible amount for its five contraventions.
30 Second, the Commissioner submitted that the penalty for Mr Dimitriou should be in the low range and the amount now proposed for Mr Dimitriou is nearly one-third of the maximum.
31 Third, there is no evidence to suggest that Mr Dimitriou has ever previously contravened any law and there is reason to think that he has learned a lesson from this case and the training and instruction he received from Mr Lacy, even if he was not prepared to give evidence on the subject himself. What is more, while Mr Dimitriou continues to work as an organiser for the Union and his entry permit has not been revoked or suspended, he has not been found to have reoffended (so to speak) in the nearly five years which have passed since the contravening conduct occurred. Consequently, the need for specific deterrence is nowhere near as great as it is for the Union. While I did not make an order that Mr Dimitriou be required to pay the penalties imposed on him personally and not seek an indemnity from the Union, he should understand that, if he is found again to have contravened the FW Act or related legislation he might well be required to personally pay the price for doing so in order to provide a more effective deterrent.
32 Fourth, the agreed amounts are within the range the Commissioner originally proposed and the Ombudsman as the current regulator accepts that the sums are appropriate.
33 Finally, the imposition of a single penalty on the Union for multiple contraventions has been countenanced where, as here, that course is agreed or the parties accept it is appropriate: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 254 FCR 68 at [149] (Dowsett, Greenwood and Wigney JJ).
34 I will therefore make orders giving effect to the parties' agreement.
I certify that the preceding thirty-four (34) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Katzmann.