Fair Work Ombudsman v Roach [2023] FCA 781 | Case summary

Further evidence 3 Mr Roach swore an affidavit dated 11 May 2023. Mr Roach is currently 50 years old, and lives at home with his wife and two children, aged 17 and five years old. He completed school in 1989 to Year 10. After leaving school he commenced a boilermaking apprenticeship, which he undertook for two-and-a-half years but did not complete. He then worked for about seven years installing neon signs. He commenced work in the construction industry in or around 1998 as a labourer, and since then has worked in the construction industry in a variety of jobs. Mr Roach has a Certificate IV in Occupational Health and Safety and a number of tickets in construction skills such as dogging, forklift operations, boom lift operations, and non-slew crane operations. Mr Roach is currently employed as a labourer, and has held his current position since around June 2022. In July 2022, he was elected the health and safety representative for his workgroup in his current job, having been elected to such positions for workgroups for about 20 years. 4 Mr Roach has been a member of the Union since 5 June 2000, and was first elected as a Union delegate about 20 years ago. Mr Roach estimated that he has inducted tens of thousands of workers onto construction sites and projects, and estimated that at the Two Melbourne Quarter Project alone, he had inducted approximately 4,000 to 4,500 workers. Mr Roach stated that he has never breached industrial law before and that he prided himself on always complying with his obligations. Mr Roach stated that he had read and considered my decision on liability. He stated that although he was disappointed by the findings, he understood the conclusions, and was embarrassed by them. 5 Following publication of the liability judgment, Mr Roach underwent formal and structured training provided by an experienced industrial and employment barrister, Brian Lacy AO, who is a former Presidential Member of the Australian Industrial Relations Commission. Mr Lacy was retained by the Union to explain to Mr Roach the reasons why his conduct on 20 April 2020 was found to have contravened s 348 and s 349 of the FW Act, and otherwise to provide training to Mr Roach that focussed on the contraventions that were found. Mr Lacy swore an affidavit annexing a report that he wrote in relation to the training. The training occurred in person over the course of one hour on 3 May 2023. It included a PowerPoint presentation that was specifically tailored to the training of Mr Roach. The presentation included slides about why there are laws, the content of the rule of law, and references to freedom of association. In his report Mr Lacy recorded the responses of Mr Roach in relation to his understanding of relevant concepts, which included the following - ... Asked what he understood by the meaning of freedom of association, Roach said "you can't make someone join the union if they don't want to". ... He said he understands that the practice of "no ticket no start" is not permitted under the FW Act and that it is a contravention to try to impose union membership on someone. ... In articulating his understanding of s 348 he said "you can't coerce - you can't make a person [...] do something by threatening to stop them working or to take away their choice not to do it." ... Responding to my question about the meaning and application of s 349 of the FW Act, Roach said "you can't make false statements about work or membership of the union." ... 6 In his affidavit, Mr Roach stated that the training that he undertook with Mr Lacy was good, and that it made it easier for him to understand the law. He stated that Mr Lacy broke the law down into parts and put it into more basic language that he could understand. Mr Roach stated that he was committed to complying with the law and assured the Court that he will do so. 7 Mr Roach addressed the impact of the case upon him. He stated that he was made redundant by Lendlease on or around 14 August 2020, and that he had a lot of trouble finding a permanent job in the two-year period thereafter, relying on savings to get him and his family through this period. Mr Roach deposed to a belief that the case affected his ability to find another job, because the allegations made in the proceeding had been published in the press and on the website of the Australian Building and Construction Commission. Mr Roach stated that the case had placed stress on both him and his wife, and had kept him awake at night. 8 There was no evidence of the resources available to Mr Roach to satisfy the payment of a penalty that the Court may order. 9 The applicant adduced evidence of the Union's financial position for the year ended 31 March 2021, and annexed to its submissions a table setting out details of 200 previous decisions of courts over more than 20 years involving findings of contravention of industrial laws by the Union or its members. There was no objection to the Court receiving this table. 10 As to the Union's financial position, its audited accounts for the year ending 31 March 2022 showed total income of over $37 million, but a deficit for the year of over $1.4 million, compared with a surplus for the year to 31 March 2021 of over $2.4 million. As to the asset position, the Union has total net assets of over $86 million. It is noteworthy that current assets include cash and cash equivalents of over $33 million, and that net current assets can be calculated at over $21 million.

Penalties 12 The maximum penalties for each contravention that may be imposed on the respondents are: (1) $12,600 for Mr Roach; and (2) $63,000 for the Union. 13 The principles that guide the imposition of civil penalties for contravention of the FW Act are uncontroversial. It is not necessary in the present case to go beyond the key principles essayed in the joint judgment of Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ in Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; 399 ALR 599 (Pattinson). In summary, those principles are - (1) The purpose of the civil penalty regime under the FW Act is primarily, if not solely, the promotion of the public interest in compliance with provisions of the Act by the deterrence of further contraventions of the Act. (2) Reflecting the text of s 546 of the FW Act, the Court's task is to determine what it considers to be an "appropriate" penalty in a particular case. A penalty should not be greater than is necessary to achieve the object of deterrence, and severity beyond that would be oppression. An appropriate penalty is one that strikes a reasonable balance between oppressive severity and the need for deterrence in respect of the particular case. (3) The assessment of an appropriate penalty may be informed by the factors listed by French J in Trade Practices Commission v CSR Ltd (1991) ATPR 41-076 at 52,152-3 to the extent that those factors relate to deterrence. However, that list is not a rigid catalogue of matters for attention as if it were a legal checklist. Account of the factors listed by French J in CSR, such as an expression of genuine remorse, may moderate the penalty that is appropriate to protect the public interest by deterring future contraventions of the FW Act. (4) Some concepts familiar from criminal sentencing, such as totality, parity, and course of conduct may assist in the assessment of what may be considered reasonably necessary to deter further contraventions of the FW Act. (5) The maximum penalties provided for by the FW Act are not reserved for the worst cases. Rather, what is required is that there be some reasonable relationship between the theoretical maximum and the final penalty imposed viewed through the lens of achieving the deterrence which is the purpose of the FW Act civil penalty regime. (6) In some cases, the circumstances of the contravener may be more significant to the assessment of an appropriate penalty than the circumstances of contravention, because, all other things being equal, a greater financial incentive will be necessary to persuade a well-resourced contravener to abide by the law rather than to adhere to its preferred policy than will be necessary to persuade a poorly resourced contravener that its unlawful policy preference is not sustainable. 14 The applicant submitted that the application of the civil double jeopardy provision in s 556 of the FW Act should have the result that in respect of each respondent one penalty should be imposed for contravention of s 348 of that FW Act, and that accordingly there should be no separate penalty imposed for the contravention of s 349. This was not contested by the respondents, and I accept that it is appropriate to treat the contravention of s 348 as the lead contravention in respect of which penalties should be imposed. 15 The applicant also submitted that in assessing appropriate penalties for the contravention of s 348 the Court may consider all of the relevant conduct engaged in by the respondents which contravened the two separate provisions of the FW Act, including conduct not necessary to establish the constituent elements of s 348, citing Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Quest Apartments Case) (No 2) [2018] FCA 163; 358 ALR 725 at [25]-[28] (Tracey J), and Construction, Forestry, Maritime, Mining and Energy Union v Melbourne Precast Concrete Nominees Pty Ltd (No 3) [2020] FCA 1309 at [27] (O'Callaghan J). In the liability judgment at [234] I held that the action taken by Mr Roach in contravention of s 348 of the FW Act was unlawful, because the action taken included the statements made by Mr Roach that constituted misrepresentations made in contravention of s 349 of the FW Act. In this way the contravention of s 348 encompasses the contravention of s 349, and I approach my appraisal of the conduct of the respondents on that basis. There are no separate constituent elements of the contravention of s 349 that have any practical bearing on the assessment of appropriate penalties in this case. 16 The applicant submitted that the action taken by Mr Roach was in furtherance of a "no-ticket, no start" policy of the Union that had been the subject of findings in other cases, including Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Werribee Shopping Centre Case) [2017] FCA 1235 at [23], [27], [32] and [34] (Tracey J). A "no ticket, no start" policy of the Union was also referred to in the joint judgment in Pattinson at [3]. The respondents countered by submitting that there was no basis for a conclusion that the contravention here was committed in furtherance of a "no ticket, no start" policy of the Union, contending that there was no pleading of such policy, or factual findings made that such a policy existed or that the contravention was in furtherance of such a policy. It was further submitted, and I accept, that findings by other judges in other cases do not support a finding here that a "no ticket, no start" policy existed. It was submitted by the respondents that the contravention was that of Mr Roach alone, with no involvement of senior management of the Union. It is convenient at this point to note that I have some hesitation in acting on a submission from counsel for both respondents that shifts the burden from one respondent to the other in the absence of cogent evidence that Mr Roach acted alone: see the observations of Young CJ in Nangus v Charles Donovan Pty Ltd (in liq) [1989] VR 184 at 185-186. There is also tension between this submission and the acceptance that the conduct of Mr Roach is to be attributed to the Union: see the liability judgment at [245], and the FW Act, s 363 and subs 793(1). 17 In approaching the question of penalty, I do not entertain any thought that Mr Roach was off on some sort of frolic of his own. The Union filed no affidavit evidence other than that of Mr Roach and Mr Lacy, and accepted at trial that Mr Roach's conduct was to be attributed to the Union. I held at [204(g)] of the liability judgment that it was likely that Mr Roach was checking Union cards and the financial status of workers entering the site for the purposes outlined in the Union's Code of Conduct for Delegates, namely to ensure that workers were "financial before they started work, before April 1 and October 1 each year". While no written "no ticket, no start" policy was in evidence before the Court, that was the effect of what Mr Roach did, which was at least consistent with the terms of the Union's Code of Conduct for Delegates. The Union is liable for that conduct. In assessing an appropriate penalty to deter the Union, through its officials, officers, employees, and agents, from engaging in like conduct and to induce compliance with the law, it is appropriate to have regard to findings in other cases and the Union's history of contraventions, not to inform findings of fact in the present case, but to inform the consideration of an appropriate penalty having regard to the circumstances of the Union as a contravenor: see Pattinson at [9], [60], and [61]. 18 During the course of argument by counsel for the respondents, the relevance of the existence of a "no ticket, no start" policy was linked to a submission that there was no evidence of involvement in the contraventions by senior officials of the Union, which inferentially addressed one of the factors referred to by French J in Trade Practices Commission v CSR Ltd, namely whether contravening conduct arose out of the conduct of senior management. The list of factors referred to by French J, as I observed earlier, is not a "rigid catalogue of matters for attention" as if it were a legal checklist: see Pattinson at [19]. In this case, I approach the question of penalty having regard to what Mr Roach did, and on the basis that his conduct as a Union delegate is the Union's conduct: FW Act, s 363 and subs 793(1). In the case of the Union, the question at hand is what is an appropriate penalty to deter the future occurrence of conduct that amounts to a "no-ticket, no start" practice. Another way of looking at the question is to arrive at an appropriate penalty that will operate as an inducement to the Union to take far greater steps than those that are in evidence to have its delegates comply with the law. My analysis of that issue does not depend on any finding that there was some "no ticket, no start" policy of the Union, and I make no such finding beyond addressing what Mr Roach did, and the consistency of his actions with the requirements of the Union's Code of Conduct for Delegates which is silent on matters such as the unlawfulness of "no ticket, no start" practices. 19 I will now say something more about the circumstances of the contravention. Mr Roach was, and is currently, an elected health and safety representative. In Victoria, the critical role of elected health and safety representatives was recognised in the report by Chris Maxwell QC titled Occupational Health and Safety Review, March 2004, at [957]. The Maxwell report preceded the enactment of the Occupational Health and Safety Act 2004 (Vic), which remains in force, and which provides for the election of health and safety representatives. The Maxwell report also recognised the valuable involvement of trade unions in the regulation of occupational health and safety. It is important that the critical roles of health and safety representatives and unions in fostering workplace safety are not undermined by the failure to separate legitimate functions related to workplace safety and the genuine promotion of union membership from unlawful coercive action that is cloaked in the statutory and other responsibilities that are given to health and safety representatives. The evidence in this case presented a picture in which there was a blurring of the distinction between a health and safety representative undertaking the legitimate task of checking qualifications and certification of workers coming onto the site, and the same person as union delegate checking a worker's financial status with the Union which crossed the line into taking unlawful action. These are the circumstances in which I held that Mr Roach exercised illegitimate authority to deny access to the site with the intention of coercing Mr Watterston to pay a fee to the Union against his wishes, and it is this conduct that should be deterred by fixing appropriate penalties. 20 The contravention of s 348 of the FW Act in this case was serious. The respondents accepted that the contraventions were necessarily deliberate. At [123] of the liability judgment I set out some passages from Mr Roach's evidence in which he acknowledged that: (1) he was aware that he could not force someone to become a member of a union; (2) he was aware that he could not prevent someone working on a project simply because they weren't a member or a financial member of a union; and (3) that he knew that he could not compel someone to pay membership fees to the union in order to work on a project. At [237] of the liability judgment I held that Mr Roach knew that the representation that he made to Mr Watterston, which formed an element of the contravention of s 348, was false and misleading. Further, I held at [234] of the liability judgment that the action that was taken was unconscionable in that it departed substantially from acceptable behaviour in an industrial context for the illegitimate object of seeking to interfere with Mr Watterston's free choice in relation to his prior decision to cease membership of the Union. I held that the exercise of illegitimate authority to deny Mr Watterston access to the site interfered with the ability of Melbourne Caulking to undertake the work that it had contracted to perform for the purpose of seeking to have Mr Watterston act otherwise than in accordance with the free choice that he had made not to continue his financial membership of the Union, where freedom of association is one of the values enshrined in the express objects of Part 3-1 of the FW Act and is to be regarded as an industrial norm. There are thousands of small contractors in the building industry which, like Melbourne Caulking, are vulnerable to that misuse of power. Any penalty imposed should be appropriate to deter the unlawful misuse of power over any participants in industry that, in relation to industrial activity, is intended to coerce them to act other than in accordance with their lawful wishes. 21 In the case of Mr Roach, I consider that an appropriate penalty to further the object of deterrence to be $5,040, being 40% of the maximum. In arriving at this amount, I have placed primary weight on the need for general deterrence. I consider that some specific deterrence of Mr Roach is also relevant given his current positions as a Union delegate and as a health and safety representative. However, specific deterrence is less significant having regard to: (1) the absence of any evidence of previous contraventions of industrial laws by Mr Roach during his long career in the building industry and as a Union delegate; (2) Mr Roach's evidence that he suffered embarrassment and that he perceives that he suffered personal and family hardship as a result of these proceedings which I consider will contribute to the deterrence of any future contravention; (3) the evidence of the training that Mr Roach has undertaken with Mr Lacy; and (4) Mr Roach's statement on affidavit that he is committed to complying with the law. 22 In relation to Mr Roach's evidence about his embarrassment and his perception of hardship, I take it into account, not as extra-curial punishment (which is an inapt idea in relation to a penalty regime directed to deterrence), but as contributing to some extent to my consideration of the appropriate penalty to achieve the object of specific deterrence of Mr Roach: cf, Fair Work Ombudsman v Construction, Forestry, Mining, Manufacturing and Energy Union (Kiama Aged Care Centre Appeal) [2023] FCAFC 63 at [47] and [52]-[58]. 23 In relation to Mr Roach's training, the applicant submitted that I should place no weight on it, because it was "rote" training for the purpose of securing a discount in penalty, and involved conveying to Mr Roach what he already knew, based upon the evidence that he gave at trial to which I referred at [123] and [247] of the liability judgment. I do not accept the submission that I should place no weight on the training. There is no sufficient evidentiary foundation to find that the training was "rote" training. As I have already remarked, it appears from the documents produced by Mr Lacy that the training was tailored to Mr Roach's circumstances. As to the submission that the training could not have added to Mr Roach's knowledge that he knew that what he did was unlawful, I do not accept that submission either. It is one thing for Mr Roach to understand that he cannot coerce workers to join or maintain financial membership of the Union. It is another to have that reinforced to him by a judgment of the Court, and a formal, structured explanation by Mr Lacy placed in the context of the importance of the rule of law and the value of freedom of association. 24 In the case of the Union, the applicant submitted that the Court should impose the maximum penalty of $63,000, contending that the present case largely mirrors the relevant facts in Pattinson. In Pattinson, the primary judge's orders imposing two penalties upon the Union that together equated to the maximum penalty was held on appeal to the High Court to be free of error, reversing the decision of the Full Court. There are parallels between this case and Pattinson. However, facts are not for the law books. In this case, I consider that the object of deterrence will be furthered by some tangible acknowledgment that the Union has sought to address the conduct of Mr Roach by arranging and paying for his training by Mr Lacy. The situation in this case may be compared to other cases in the past where there was no evidence that the Union proposed to take any steps to address its future compliance with industrial laws: see, Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining, and Energy Union (Syme Library Case) (No 2) [2019] FCA 1555 at [102]. 25 Having regard to the Union's strong financial position, and its history of contraventions, a penalty towards the maximum is appropriate to give effect to the object of deterrence and to induce compliance. Counsel for the respondents accepted that the Union's history of contravening conduct has the consequence that it is not entitled to any lenience on penalty. The penalty that I consider appropriate is to order that the Union pay $55,000. This is intended to have a high deterrent value so as to induce compliance with the FW Act by the Union through all its officials, officers, employees and agents. It is less than the maximum penalty because inducing compliance with the law is not achieved through penalties alone, but may also be achieved through training, awareness, and the adoption by the Union of different practices and policies. The Court acknowledges the formal training that the Union arranged for Mr Roach by a reduction in what I would otherwise have fixed as an appropriate penalty. The reduction, however, is modest. That is because there was no evidence of any widespread training of Union delegates and officials, or of any compliance programs which are often features of responses to applications for civil penalties under other statutory regimes. Strikingly, there was no affidavit evidence from any officer of the Union that addressed any proposals to encourage compliance with the law by its officials, officers, employees, and agents. Particularly, there was no evidence that the Union's Code of Conduct for Delegates has been revised so as to direct delegates' attention to the need to comply with industrial laws, including clear and practical guidance so as to avoid conduct by delegates amounting to "no ticket, no start" practices which trample upon rights of freedom of association.

Fair Work Ombudsman v Roach

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Judgment (6 paragraphs)

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Cases Cited (7)

Cited By (5)