Fire and Rescue NSW on behalf of Department of Premier and Cabinet v New South Wales Fire Brigade Employees' Union

Consideration 21The application in this matter is brought under s 139 of the Act which is in the following terms: 139 Contravention of dispute order (1) The Commission, on application, must deal expeditiously with an alleged contravention of a dispute order. The application may be made by the person who applied for the order or any other person who was authorised to apply for the order. (2) Before dealing with an alleged contravention of the order, the Commission is required to summon the person alleged to have contravened the order to show cause why the Commission should not take action for the contravention. (3) The Commission may, after hearing any person who answered the summons to show cause and considering any other relevant matter, do any one or more of the following: (a) dismiss the matter if it finds that the dispute order was not contravened or if it finds that the circumstances were such that the Commission should take no action on the contravention, (b) cancel the approval of an enterprise agreement, (c) suspend or modify for any period all or any of the entitlements under an industrial instrument, (d) cancel the registration of an industrial organisation or take any other action authorised by Division 2 of Part 3 of Chapter 5, (e) impose a penalty on an industrial organisation or an employer as provided by subsection (4), (f) make any other determination that the Commission considers would help in resolving the industrial dispute. (4) The maximum penalty that may be imposed on an industrial organisation or employer is: (a) except as provided by paragraph (b)-a penalty not exceeding in total $10,000 for the first day the contravention occurs and an additional $5,000 for each subsequent day on which the contravention continues, or (b) if a penalty has previously been imposed on the industrial organisation or employer for a contravention of an earlier dispute order-a penalty not exceeding in total $20,000 for the first day the contravention occurs and an additional $10,000 for each subsequent day on which the contravention continues. (5) Any such penalty may be recovered in the same way as a penalty imposed by the Commission for an offence against this Act.

Contravention admitted 22There was no issue as to whether the FBEU contravened the dispute orders made by Ritchie C. The FBEU acknowledged this was so. The Court finds that the FBEU contravened the dispute orders made by Ritchie C on 21 October 2011 in IRC Matter No 1631 of 2011 in that the bans referred to in the dispute orders did not immediately cease on 21 October 2011, that on 21 October 2011 the Secretary of the FBEU authorised additional bans to be imposed and that industrial action by the FBEU and its members including the bans covered by the dispute orders did not cease until approximately 6.00 pm on 22 October 2011.

Penalty - principles 23The only issue for the Court to determine is the question of penalty. The law in that respect is reasonably well settled: see Bluescope Steel (AIS) Ltd v AWU and Anor (No 2) [2005] NSWIRComm 210; Australian Workers' Union (NSW) v Bluescope Steel (AIS) Pty Ltd [2006] NSWIRComm 71; (2006) 151 IR 153; Director-General, NSW Department of Education and Training v NSW Teachers Federation [2010] NSWIRComm 44 ("Teachers No 1"); Director General, NSW Department of Education and Training and the Managing Director of TAFE v NSW Teachers Federation [2010] NSWIRComm 77 ("Teachers No 2)"; Director-General of the NSW Department of Education and Communities and Managing Director of TAFE NSW v New South Wales Teachers Federation [2012] NSWIRComm 58 ("Teachers No 3)". 24In Bluescope (No 2) at [37], the Court identified a list of matters that may be relevant in respect of contraventions of dispute orders under s 139 where the conduct constituting a contravention called for the imposition of a penalty under s 139(3)(e). In the Court's opinion, the matters that may be considered to be relevant and appropriate were: (a) The circumstances in which the relevant contravention took place (including whether the contravention was undertaken in deliberate defiance or disregard of the dispute order); (b) Whether the person found to have been in contravention of a dispute order has previously been found to have engaged in conduct in contravention of an earlier dispute order (in this respect see s 139(4)(b), which provides for higher maximum penalties where there has been an earlier contravention); (c) The consequences of the conduct found to be in contravention of the dispute order; (d) The need, in the circumstances, for deterrence; (e) Any relevant subjective factors including undertakings regarding future conduct. 25The Court did not suggest the list was exhaustive. In Teachers (No 1) Staff J adopted what the Court had said in Bluescope (No 2). In Teachers (No 1) Staff J added at [36]-[37]: [36] In exercising the discretion as to an appropriate penalty under s 139(3)(e) of the Act, it is necessary for the Court to consider the overall culpability of the guilty person, whilst noting that the imposition of a penalty under s 139 is not an application of the criminal law: see BHP Steel Ltd v The Australian Workers' Union, New South Wales (at [94] - [99]). Regard must also be had to the fact that the legislature has provided for a higher maximum penalty for the first day of the contravention and a lower penalty for each subsequent day the contravention occurs. [37] In my view, contrary to the Federation's submissions, this is plainly a serious offence. In deciding what approach to take in the fixing of a penalty, I take into account the following: (a) the circumstances in which the contravention took place must result in a conclusion that the contravention was undertaken in blatant and deliberate defiance of the dispute order made by Boland J. The executive of the Federation took a conscious decision in the face of the dispute orders to proceed with "a 24 hour stoppage of all TAFE members on Thursday 11 February 2010"; (b) the contravention of the dispute order resulted in approximately 4,000 employees of the Managing Director of TAFE taking 24 hour strike action; (c) the inconvenience to students through the cancellation of classes; (d) that it is absurd to contend that a financial benefit was obtained by TAFE from the illegal strike action because of the savings in the salaries of teachers who took industrial action; (e) the observations of Boland J that the industrial action planned by the Federation was entirely without justification (at [20]); (f) that the making of a dispute order is a serious step given the consequences for contravention and persons against whom a dispute order is made are bound to take it seriously, especially members, officials and employees of organisations who may be putting in jeopardy the very existence of their organisation: see observations of Boland J (at [26]); (g) the failure of the Federation to apologise to the Court for the breach and to make a public declaration of belief in, and a willingness to uphold the integrity of the Commission: Director-General, Department of Education and Training v New South Wales Teachers' Federation (at [8] - [9]). To the extent that the Federation submitted that its contrition should be taken to have included such factors, I am not prepared to interpret the Federation's contrition as embracing such broad terms; (h) that there was no evidence, nor could there have been, that the Federation had been labouring under a misapprehension as to the scope of the dispute orders; (i) that the Federation committed a single breach of the dispute order. 26In Teachers (No 2) Marks J, after referring to Teachers (No 1), stated: [14] However, it is also necessary to make reference to one additional matter, namely the context in which dispute orders are made and the part that dispute orders play in the overall regulation of industrial matters in New South Wales. Chapter 3 of the Industrial Relations Act deals with industrial disputes and provides for mandatory conciliation and then arbitration. There is provision in the Act for the enforcement of awards and determinations made by the industrial tribunal. Furthermore, the tribunal is empowered to make dispute orders (s 136) of a kind described in s 137 and subject to conditions set out in s 138. Section 139 empowers this Court to impose a penalty for breach of a dispute order. Accordingly, the regulation of industrial disputes in New South Wales involves the empowerment of a third party umpire to make binding orders on parties which can be enforced through mechanisms established by the State and which include the creation of civil penalties as part of the armoury of measures that may be taken to ensure compliance with and enforcement of awards, orders and determinations. [15] The existence of a system such as that established by the Industrial Relations Act 1996 reflects a sophisticated and civilised approach to dealing with industrial disputation, including differences of opinion which do not necessarily manifest themselves in any industrial action. In any sophisticated and civilised regime that regulates the manner in which persons, and entities that represent them, conduct their affairs, it is necessary to provide an overarching structure to ensure that the regime works in practice. Without such an overarching structure, there would be no means of compelling obedience to authority and this would lead to anarchy. So that any teacher who might read this judgment may fully understand the situation to which I am referring, the need for a hierarchical structure of authority, and means of implementing it, is replicated in TAFE and school campuses. 27In Teachers (No 3) Haylen J referred to Teachers (No 1) and Teachers (No 2). In respect of the latter case, Haylen J distinguished the factual situation that there existed from the circumstances his Honour was required to deal with: [35] The present case is distinctly different. As indicated by Marks J in the compulsory conferences held on 5 and 6 September 2011, the underlying issue was not an industrial matter which the Commission had jurisdiction to entertain or in relation to which it could make an order or award. His Honour pointed out that, in the normal case, he would not hesitate to give a direction or a Recommendation that no industrial action take place and would then attempt to conciliate the matter and if conciliation was unsuccessful, the matter would be open to arbitration. This was not such a case and there was nothing that Marks J could do to influence the Federation from taking industrial action by joining Unions NSW and other public sector unions in their protest rally against Government industrial policy and amendments made to the Industrial Relations Act. Because the Commission lacked jurisdiction, there could be no serious challenge to its authority by the Federation rejecting any recommendation or direction regarding this industrial action: indeed, Marks J made neither a recommendation nor gave a directions regarding the strike. Although his Honour issued a certificate of failed conciliation at the request of the Director-General, he accepted that he had not undertaken conciliation in the usual manner when dealing with an industrial matter otherwise within jurisdiction. He concluded the dispute proceedings by indicating that he would not relist the matter again unless the parties required assistance with a matter within the jurisdiction and power of the Commission and that might be made by way of a fresh notice of dispute. ... [40] Having regard to the circumstances surrounding the lateness of the application and the period of notice given by the Federation, the Court is unable to conclude that these breaches are of the same order of seriousness as the previous two breaches by the Federation. This industrial action involved protest rallies against Government policy, not open to arbitration: the rally itself was supported by all public sector unions under the auspices of Unions NSW, the State peak council for employees under s 215 of the Act. Further, it is appropriate that the penalty for each day encompass the entirety of the actions taken by the Federation in breach of the dispute order - this approach appears to reflect the structure of s 139.

Circumstances of the contravention 28In considering the circumstances in which the contravention took place I note the FBEU's submission that there were "special and extraordinary" circumstances to be taken into account in assessing the Union's culpability. It was submitted the dispute was "provoked" by the applicant reneging on an agreement regarding the staffing of LSVs. 29The FBEU submitted that it was always prepared to lift the bans it had imposed if the applicant complied with the 2010 LSV agreement. It submitted the bans were lifted immediately once the applicant agreed to observe the 2010 agreement, a step it should have taken from the outset. 30It was submitted for the FBEU that although the contravention was admitted it was not in the same class of the serious contraventions considered in Bluescope (No 2) or Teachers (No 1) and Teachers (No 2). Mr J Nolan of counsel for the FBEU submitted that the consequences of the FBEU's conduct was to be measured against the fact that the solution to the dispute was at all times in the hands of the applicant - by simply abiding by the industrial agreement it had made with the Union. 31The FBEU contended that when Justice Walton ordered the "status quo" to apply in relation to the LSVs until 24 October 2011 when the matter was to come before Ritchie C, the status quo was the 2010 agreement. However, the applicant refused to recognise that was the case. 32There seems to have been an initial difference of opinion between the parties as to what exactly the Vice-President meant by "status quo". The applicant obviously did not believe the status quo was the 2010 LSV agreement because if it had, one could reasonably have expected the bans to be lifted shortly after his Honour made his recommendations on 20 October 2011. However, in his letter to Mr Casey late on 21 October 2011 (and after Ritchie C had made the dispute orders) Commissioner Mullins agreed to observe the "status quo", which he belatedly said was "essentially the same as the 2010 arrangements". It is apparent that the applicant's position outlined in the Commissioner's letter of 21 October 2011 could have been put to the FBEU at an earlier time and any bans could have been entirely avoided. 33Whilst this might be a matter taken into account in mitigation, it by no means excuses the FBEU's conduct. 34The fact is that when Walton J made his recommendations on 20 October 2011 he arranged for Ritchie C to further deal with the matter on 24 October. If the bans had been lifted in the meantime, undoubtedly conciliation would have ensued and in the event that was unsuccessful, arbitration could have followed. 35In other words, there was at the FBEU's disposal a "sophisticated and civilised" regime for dealing with its grievance against the applicant that rendered entirely unnecessary resort to industrial action. 36The issue for the FBEU was whether the applicant had reneged on an agreement made in 2010 regarding the staffing of LSVs. It was a classic industrial matter within the Commission's jurisdiction. The dispute could have been notified to the Commission by the Union and the conciliation and arbitration processes set in train. The Commission gives such matters priority as the Vice-President's recommendations show. 37If the Union had demonstrated the applicant had unreasonably or without justification reneged on an agreement regarding the LSVs the Commission could have recommended to the applicant that it observe the agreement or the Commission could have made an award to settle the dispute by arbitration. There was no compelling force at work such that a reasonable person would consider there was an imperative to force the applicant to concede immediately by resort to industrial action. 38In compounding the seriousness of the contravention and in a gesture confirming the FBEU was thumbing its nose completely at the Commission's orders, the Union not only maintained the bans in place after the dispute orders were made, but it put in place additional bans.

Whether any prior penalty 39It was common ground that a penalty had not previously been imposed on the FBEU for a contravention of an earlier dispute order: s 139(4)(b). In that case the maximum penalty is one not exceeding in total $10,000 for the first day the contravention occurred and an additional $5,000 for the second day: s 139(4)(a).

Consequences of the contravention conduct 40As noted earlier it was Mr Brown's evidence, not effectively challenged, that there was a cost of necessary additional overtime worked during the period of the bans. This was estimated to be approximately $183,000. It is accepted this consequence does not fall into the same class as the fallout of the teachers' strikes in Teachers (No 1) and (No 2), which caused widespread disruption. Moreover, the bans did not affect the Brigade's ability to deal with any outbreak of fire.

Deterrence 41One of the objectives of imposing a penalty under s 139 is to deter the offender from contravening the Act in future as well as others that might contemplate similar offences. In relation to the FBEU, regrettably there is no evidence that it will not engage in similar conduct in the future; there is no evidence of any remorse or contrition on its part. Indeed, I fear that the Union believes that its conduct was justified. There is a strong case for including in the penalty an element for specific deterrence. The penalty will also include an element of general deterrence.

Subjective factors 42An important mitigating factor is that despite the Unions' long history of involvement in the State's system of industrial relations, this is the first time it has been found that the FBEU contravened a dispute order. It is regrettable the Union has tarnished that fine record, particularly because it did so in circumstances where it was completely unnecessary and where after having had a disputes order made against it, the Union escalated the bans. 43Another mitigating factor is the applicant declining to acknowledge there was any agreement of the nature claimed by the FBEU, only to accept on 22 October that it would accept a status quo that was "essentially the same as the 2010 arrangements". I am prepared to take that into account, but for the reasons I have given, it cannot carry a great deal of weight. 44The only other mitigating factor is that the FBEU admitted the contravention. Any penalty should accordingly be discounted for the utilitarian value of the admission, although it must be said that there was a very strong case against the FBEU.

Conclusion 45I have concluded that in all the circumstances the contravention was serious. In the words of counsel for the applicant it was also "contumacious". It should attract a penalty of $7,500 for the first day the contravention occurred, namely, 21 October 2011 and $3,500 for the second day, namely, 22 October 2011, making a total penalty of $11,000.

Orders 46The Court makes the following orders: (1)The Fire Brigade Employees' Union is guilty of contravening the dispute orders made by Ritchie C on 21 October 2011 in IRC Matter No 1631 of 2011. (2)The Fire Brigade Employees' Union is fined an amount of: (a)$7,500 in relation to the contravention on 21 October 2011; and (b)$3,500 in relation to the contravention on 22 October 2011. (3)The penalties imposed by order 2(a) and 2(b) hereof are payable within 28 days of the date of this judgment.

DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 19 July 2012