REASONING AS TO PENALTIES
93 Apart from the question of double punishment to which I have referred, the legal principles guiding the imposition of a penalty in a case such as this were not in issue as between the parties. Similarly the relevant facts to which those principles are to be applied were not in issue and indeed were largely the subject of agreement. I have referred to these in detail in relation to the parties' submissions on penalty. In my view, the breaches of s 38 of the BCII Act were serious for the combination of reasons submitted by the applicant. The conduct demonstrated a complete disregard for the terms of the Certified Agreement and struck at the very heart of the main object of the legislation. Such is the case also in relation to those respondents who have admitted contravention of the WR Act. This conduct was even more serious, as it deliberately flouted the very clear terms of an order of the AIRC. Each of the six or seven respondents concerned were provided with a copy of the order by the LKJV. There was no, and could not have been, any suggestion that they were not aware of its terms. Furthermore they were warned on several occasions during the Period at workforce meetings by representatives of the CMFEU that they should not take unlawful industrial action as they would be exposing themselves to very serious penalties if they did so. respondent 12, Mr Gregory Brown, asserted that the ramifications of going out on strike were not explained at the workforce meeting on 24 February. I accept that to be the case. In fact it was at the workforce meetings held on 28 February and 2 March 2006 that the warnings were given. Mr Brown attended both of those meetings but does not assert that at these he was not given such a warning. The consequences of the respondents' action were serious. It has involved very considerable costs to the LKJV, the delay of a very major infrastructure project in this State, involving public inconvenience, it had the potential to have caused substantial safety issues with associated damage to machinery and property.
94 It was urged upon me that the conduct of the LKJV in its attempts to use the question of Ballard's reinstatement as a bargaining chip to enable the LKJV to prevail in respect of two contentious industrial issues, namely a disputed Rostered Day Off Calendar and whether the tunnelling would proceed as a 'special contract need' smacked of 'sharp practice'. It was also said to have been a provocative act on the part of the LKJV.
95 I have given no weight in assessing the appropriate penalties to the view of the workforce that Ballard had been unfairly or unlawfully sacked or in relation to the asserted 'sharp practice' on the part of LKJV: Ponzio at [90] per Lander J. In any event I am unable, on the evidence, to conclude that the respondents' perception that Ballard was unfairly or unlawfully terminated was reasonably based or not. Nor am I in a position to characterise the conditions put by the LKJV for his reinstatement as constituting 'sharp practice', or as being provocative. There was no direct evidence as to this nor am I able to infer it.
96 In any event, if Ballard considered that he had been either unfairly or unlawfully terminated in his employment, then he had both a contractual obligation and a remedy at law. There was a mandatory Dispute Resolution Procedure under the Certified Agreement (cl 4.5) for the resolution of disputes. Ballard was obliged to follow this. He did not. Additionally, an application for relief under s 643(1) of the WR Act was available to Ballard on the ground that the termination was allegedly harsh, unjust or unreasonable. Indeed it was a term of the LKJV New Metro Rail City Project Structural Certified Agreement 2004 that termination of employment by the Joint Venture shall not be harsh, unjust or unreasonable (cl 2.2.3). I was informed by senior counsel for the respondents that Ballard had made an application in relation to his alleged unfair dismissal, claiming that it was harsh, unjust and unreasonable and constituted discrimination.
97 The respondents' perception that Ballard's dismissal was unfair or unlawful did not constitute a warrant for the unlawful industrial action, nor does it constitute any relevant mitigating circumstance. It would be extraordinary if a wilful disregard of the main object of the legislation, and in particular, in this case, the promotion of the rule of law, should be regarded as somehow mitigating the contravention.
98 Mr Rozen, who represented the 7th, 8th, 9th, 12th, 14th, 16th, 28th, 37th and 64th respondents, conceded in argument that the unlawful industrial action was, (in part) clearly motivated by an attempt to bring financial pressure to bear on the LKJV to achieve the reinstatement of Ballard rather than through lawful means. In my view, that concession was correctly made and underlines the seriousness of the conduct.
99 I do not accept that merely because they are employees as opposed to a union, union officials, or an employer, that there is, in principle, any different approach which should be taken on the question of penalty. In any one case there may be different levels of culpability. Each matter requires to be considered by reference to its own facts and circumstances. I was told by senior counsel for the respondents that orders of the AIRC were frequently disobeyed and that this, traditionally, was not regarded as serious. It was also held that this was the first time in which penalty proceedings had been taken against employees in that capacity. This, it was said, was for historical reasons, grounded in the way that industrial disputes have in the past been fought.
100 If that was the position then it is no longer the position. In Finance Sector Union v Commonwealth Bank of Australia at [72], Merkel J observed that:
It may be that breaches by unions and employers of industrial legislation from time to time have been accepted as part of the give and take of industrial disputation. However, in recent years industrial legislation has increasingly codified and prescribed what is acceptable, and what is unacceptable, industrial conduct. The legislature has, over time, also moved to increase the penalties that may be imposed in respect of unlawful industrial conduct. In my view, any light handed approach that might have been taken in the past to serious, wilful and ongoing breaches of the industrial laws should no longer be applicable.
101 The penalty imposed by Merkel J in respect of the contraventions of s 298K of the WR Act in the above case ($600,000) was overturned on appeal and substituted for a penalty of $300,000. Importantly, however, Branson J (with whom Spender J agreed in relation to the reduction in penalty) indicated that there was no demonstrable error of principle affecting the penalty imposed by Merkel J at first instance. Her Honour reaffirmed the warning that it may well be that it is appropriate for penalties imposed under the WR Act to rise and rise appreciably.
102 That case was not concerned with breaches by employees, but as I have said, I do not consider that they stand in any different category.
103 I have had regard to part of the Second Reading Speech of the BCII Act which is instructive in this respect:
This Bill reflects the Government's commitment to ensuring the law applies and is observed equally by all participants in the building and construction industry, regardless of whether they are union officials, employers or workers.
The industrial record of this industry is deplorable.
The Royal Commissioner found that the prevalence of industrial action in the building industry is unique. He noted
Underlying the attitude of participants in the industry is a disregard of the rule of law, and the adoption of a short term attitude, commercially driven, of expediency. In particular, unions know that the prospect of being held civilly responsible for the losses they cause is remote.
[Volume 11, page 10, para 33]
The level of industrial disputation in the construction industry is substantial. For example, in 2003-04 the construction industry employed 8 per cent of all employed persons in Australia. For the same period, these workers accounted for over 21 per cent of working days lost.
Industrial action negatively impacts upon industry productivity. Industrial unrest and time lost through work stoppages cause immediate loss to head contractors, subcontractors and employees. Even short strikes can cause commercial damage because standing charges and overheads continue even if work on site stops. Commissioner Cole found project completion delays, with contractual penalties of up to $250,000 a day, are a compelling incentive for employers to surrender to union demands.
Currently, those who engage in unlawful industrial action in this industry are seldom held accountable. In addition, the current system for recovery of loss due to unlawful industrial action is difficult, costly and time consuming. As Commissioner Cole noted
Litigation for loss recovery is regarded as a bargaining chip to be used in future resolution of industrial disputes, rather than as a serious attempt to hold those causing loss responsible for it.
[Vol 11, page 13, chapter 1]
This Bill seeks to implement a framework where unlawful industrial action is not tolerated and those taking such action are brought to account for their lawlessness.
104 I have also taken into account the mitigating factors which are set out above.
105 I have been advised that any penalties which I impose on the respondents will not be paid by them personally although this would not apply to any suspended penalties which became payable upon a further contravention. From around February 2007, the ACTU and CFMEU established and maintained a national fund, known as the Mandurah Dispute Fighting Fund. The monies in the fund will be used to meet the costs of the penalties and legal costs incurred by the respondents. The impecuniosity of individual respondents is not raised as an issue in the proceedings.
106 The CFMEU, through its Western Australian Branch Secretary Mr Kevin Reynolds, has expressly and publicly stated that:
(a) the Fund which was set up to help the workers would cover their fines so that the strikers would not personally be out of pocket;
(b) the Fund has raised funds nationally, as at late August 2007; and
(c) it will cover the penalties and costs incurred by the respondents.
107 I do not consider it a relevant matter to the penalties to be imposed that they are to be paid by a third party. I propose the following penalties.