Secretary, Department of Education v The Australian Education Union New South Wales Teachers Federation

Solicitors: NSW Crown Solicitor's Office (Prosecutor) NEW Law (Defendant) File Number(s): 2022/152167

Introduction

1. By amended summons filed on 3 June 2022, the plaintiff, the Secretary of the Department of Education (the prosecutor), seeks orders which relevantly include the imposition of a monetary penalty on the defendant, The Australian Education Union New South Wales Teachers Federation Branch (the Federation), for alleged breaches of orders made by Commissioner O'Sullivan of the Industrial Relations Commission (the Commission) on 29 November 2021 to restrain the Federation and its members from taking industrial action.
2. All references to legislation in these reasons are, unless otherwise indicated, references to the Industrial Relations Act 1996 (NSW) (the Act).

The Federation

1. The Federation has about 67,000 members, who include 39,000 permanent full-time teachers, about 4,000 temporary teachers, 6,000 casual and unemployed teachers and 6,000 TAFE teachers.
2. Its rates for full-time members are set out in the table below: Type of member Annual fee Fortnightly fee Permanent $901.04 $34.66 Temporary $600.70 $23.10 TAFE permanent $901.04 $34.66

1. The rates for casual, part-time, retired and student teachers are lower than those in the table.

The genesis of the dispute

1. Prior to 25 November 2021, the Federation commenced its "More than Thanks Campaign" regarding pay and other conditions of employment of teachers engaged in public education in New South Wales. The prosecutor and the Federation conducted negotiations concerning a new Crown Employees (Teachers in Schools and Related Employees) Salaries and Conditions Award (the award).
2. On 25 November 2021, the prosecutor notified the Commission of an industrial dispute pursuant to s 130 of the Act. The prosecutor applied to the Commission for orders pursuant to s 137 of the Act.
3. On 27 November 2021, the Federation's State Council met and directed all of its members to strike for 24 hours on Tuesday 7 December 2021.

The dispute orders

1. On 29 November 2021, the dispute came before Commissioner O'Sullivan for arbitration. At the conclusion of the arbitration, the Commission made the following orders (the dispute orders) pursuant to s 137 of the Act: "A. … 1. The Australian Education Union New South Wales Teachers Federation (NSWTF) Branch ('the Federation'), its officers, employees, agents and its members employed in the Teaching Service, are hereby ordered to immediately cease organising and refrain from taking any form of industrial action that relates to the Federation's current wage claims for employees of the Teaching Service, including the 24 hour strike to occur on 7 December 2021, and including, but not limited to, any other strike, stop work meeting, ban, relieving ban, limitation or restriction on the performance of work and are further ordered to not recommence, engage in or threaten to engage in any such industrial action whilst these orders are in force. 2. The Federation shall by no later than 4pm on 30 November 2021 issue a public statement which retracts and revokes its: a) direction to members to strike for 24 hours on 7 December 2021; b) its call on members from Greater Sydney, Newcastle, The Central Coast, Wollongong, the Southern Highlands and the Blue Mountains to rally in Macquarie St, Sydney and for all other members to rally at designated regional centres across the state on 7 December 2021; and c) its call on officers, councillors, association executive, fed reps, Women's contacts and FWC members to mobilise the membership. 3. Without limiting the steps required to be taken by order 2, the Federation must take the following steps by 4pm on 30 November 2021: a) remove any reference to the 24-hour strike to occur on 7 December 2021 from its website or any documents linked to its website including the document titled 'Why we must take industrial action over salaries and workloads' dated 27 November 2021 and the media release titled 'Teachers to strike over workload, salaries, and shortages' dated 27 November 2021; b) remove any reference to the 24-hour strike to occur on 7 December 2021 from the morethanthanks.com.au website. c) publish in a prominent position on its website and the morethanthanks.com.au website, the Federation's Facebook and Twitter pages, Order A1 and a direction to members that they comply with those orders and not take industrial action during school hours. d) Take all reasonable steps to send by email and mobile telephone message to all members of the Teaching Service a link to Order A1 and a direction to comply with those orders and not take industrial action during school hours. 4. The Federation, its officers, employees and agents, must not induce, advise, authorise, support, encourage, direct, aid or abet members of the Federation to organise or take industrial action contrary to Order A1. 5. Federation members of the Teaching Service must not induce, advise, authorise, support, encourage, direct, aid or abet other members of the Federation to organise or take industrial action contrary to Order A1. 6. These orders shall come into effect on and from 4:00pm on 29 November 2021 and shall remain in force until 4:00pm on 31 May 2022. [Emphasis in original.]

The 2021 proceedings

1. On 3 December 2021, the prosecutor filed a summons in this Court seeking orders to issue a summons to show cause. On that day, Dhanji J granted leave for the show cause summons to be issued and made it returnable on 6 December 2021 (the 2021 proceedings).
2. On 7 December 2021, strike action by the Federation's members took place throughout New South Wales. On 9 December 2021, the prosecutor filed an amended summons in the 2021 proceedings, seeking the imposition of a monetary penalty against the Federation. The application was heard by Walton J on 16 December 2021. On 14 March 2022, his Honour declared that the Federation had contravened the dispute orders as alleged and imposed a penalty of $30,000 on the Federation: Secretary, NSW Department of Education v The Australian Education Union NSW Teachers Federation (NSWTF) Branch [2022] NSWSC 263 (The First Teachers Case).
3. On 19 February 2022, the Federation wrote to the Premier of New South Wales informing him that its State Council had resolved to defer industrial action during term 1 of 2022 and sought to enter into a four-week period of negotiations.
4. On 19 March 2022, the Federation issued a member alert which said in part: "[t]he Premier failed to act on this opportunity [to negotiate] … The profession is now left with no alternative but to recommit to the full range of strategies available to it to achieve the required reset in the salaries and the conditions of the profession …"
5. On 25 March 2022, David Withey, Chief Operating Officer for the Department of Education issued an email to school principals which set out focus areas for important changes including the School Success Model for literacy and numeracy. The email directed principals to the "Staff Noticeboard" (on the Department's website) for further information.
6. On 7 April 2022, the Minister for Education and Early Learning, the Honourable Sarah Mitchell MLC (the Minister), wrote to the Federation, referring to its letter of 19 February 2022. She referred to the dispute orders and sought confirmation that the Federation and its members would comply with them. She also said: "As the Federation is aware, all NSW government agencies are required to follow the NSW Public Sector Wages Policy - August 2021 (the Wages Policy). The Department's application for a three year award will be arbitrated by a Full Bench of the [Commission] in May 2022 and that arbitration needs to take its course."

The proposed industrial action

1. On 26 April 2022, the State Executive of the Federation issued a member alert directing its members to strike for 24 hours on Wednesday 4 May 2022 (the strike) and placing an immediate ban on all new Government (Department and NSW Education Standards Authority) policies and initiatives due for implementation on and from day 1 of term 2 (the ban). It also authorised its members to walk out of a school as long as a Government Member of Parliament was in the school (the walk-outs). The explanation given in the alert for this action was as follows: "In term 1, Federation took an historic step suspending industrial action. An act of good faith, it provided the Premier a singular opportunity to enter into genuine negotiations to address by way of mutual agreement the teacher shortage and its underlying cause: uncompetitive salaries and unsustainable workloads. The Premier failed to embrace that opportunity and heed the volumes of evidence which unequivocally demand urgent action on teacher salaries and conditions if we are to attract and retain the teachers we need. Instead, the Perrottet Government and its department continues to pursue the imposition of a 3 year Award on the profession with salary increases at 2.04% per annum and nothing to address the crippling workload of teachers in the Industrial Relations Commission (IRC). The Perrottet Government and its department is doing so in the full knowledge that: ● its own regulations effectively prevent the IRC from addressing the causes of the teacher shortage; ● its own regulations will result in a predetermined outcome consistent with the government's 2.5% salary cap; ● far from addressing the decline of teachers' salaries relative to other professions and crippling workloads presenting a disincentive in attracting and retaining the teachers we need, inflation is running at 3.8% and predicted to exceed 4% per annum, inflicting a real wage cut on the teaching profession. The profession is now left with no alternative but to act in the interest of our students and our profession to achieve the reset in salaries and conditions to attract and retain the teachers we need to ensure the right of every child being taught by a qualified teacher is realised."
2. Also on 26 April 2022, the Federation published an article in its Educational Journal entitled "Teachers to go on strike on May 4", which said: "NSW Teachers Federation State Executive has today made the unanimous decision to proceed with strike action on Wednesday May 4. The Federation also placed an immediate ban on all new Government (Department and NSW Education Standards Authority) policy/initiatives due for implementation on and from day 1 term 2. In addition, should NSW Government MPs seek to enter school grounds, Federation members are authorised to walk out for as long as these MPs remain on-site. A new poll of 10,000 NSW teachers released today has found: ● 73% say their workload is unmanageable ● 70% are reconsidering their position due to workload ● 90% disagree that their pay reflects their expertise and responsibilities ● 89% say shortages are very significant ● 82% say shortages are leading to higher teacher workloads at their school NSW Teachers Federation President Angelo Gavrielatos said the Premier has failed students, their parents, and the teaching profession. 'If we don't pay teachers what they are worth, we won't get the teachers we need. 'That the Government is pursuing a new Award that seeks to impose a 2.04 per cent salary cap, with no change to the crippling working conditions experienced by the profession for a three-year period, is contemptuous. 'At a time when inflation is running at 3.5 per cent and predicted to grow, this would constitute a cut to teachers' real income. 'Acting on uncompetitive salaries and unsustainable workloads is the only way to stop more teachers leaving and attract the people into the profession we need to fix the shortages,' he said. 'The profession is now left with no alternative but to act in the interest of our students and our profession, and take industrial action. 'One of the most fundamental roles of a government is to ensure there is a qualified teacher in every classroom with the time and support to meet the needs of each child. 'The teacher shortage has created a crisis in our classrooms. As of February, there were a total of 2,383 permanent vacancies across 1,251 schools in NSW. 'Government report after government report has stated the main reasons why people don't want to enter the profession and why teachers don't want to stay in the profession are unsustainable workloads and uncompetitive salaries. 'The solution to the teacher shortage and its causes, unsustainable working conditions and uncompetitive pay cannot be addressed nor resolved in the Industrial Relations Commission (IRC). The Government's own regulations effectively prevent the IRC from addressing the causes of the teacher shortage. Its own regulations will result in a predetermined outcome consistent with the government's 2.5 per cent salary cap.'"

The first walk-outs

1. On 3 May 2022, the Honourable Stuart Ayres MP visited Jamison High School. Between 9 and 9.30am, 43 of the Federation's members (56.8% of the teaching staff) walked out as a result. Also on that day, the Honourable Melinda Pavey MP attended Bellingen High School for the school assembly at 10am. When Ms Pavey began to address the assembly, about 12 members of the Federation, representing 25% of teaching staff, walked out and remained absent for a period from 10.10am until 10.40am.

The deferral of proceedings in the Commission

1. On 3 May 2022, the prosecutor announced the deferral of the application for a new award in the Commission (which was listed for hearing the following week). On 4 May 2022, the Chief Commissioner of the Commission deferred the application for a new award until October 2022.
2. On 3 May 2022, the Federation issued a further member alert which said: "From: NSW Teachers Federation Sent: Tuesday, 3 May 2022 11:43 AM Subject: All out tomorrow Dear , Tomorrow's strike is about you, your students and our profession. Every teacher, in every school standing together to demand an end to unsustainable workloads and uncompetitive salaries. We look forward to seeing you there, sending a powerful message to this government about the need for urgent action. You may have seen today the DoE secretary's email announcing the deferral of the arbitration on salaries scheduled for next week in the Industrial Relations Commission. The secretary's announcement comes after a vague commitment last week by the NSW Premier to address public sector wages in the June budget. There is no information about what will be in the budget and whether the government will abandon its 2.5% salary cap at a time when inflation is running at 5.1%. The Government refuses to negotiate intending instead to have the matter return to the IRC after the budget in the full knowledge that the IRC cannot deal with the teacher shortage and its underlying causes. There is also no commitment to address workloads. The NSW Government continues to ignore the profession on this critically important issue. We must make our concerns heard tomorrow across the state. One profession. One voice. Let's make it too loud to ignore. Regards Angelo Gavrielatos President Maxine Sharkey General Secretary P.S. If you haven't seen this video with young teachers talking about the very personal impact of crippling teacher shortages and unsustainable workloads it is definitely worth watching and sharing. It is a powerful reminded of why we must act tomorrow."

The strike on 4 May 2022

1. On 4 May 2022, members of the Federation engaged in a 24-hour strike and attended multiple rallies across New South Wales, which were organised by the Federation. The strike received widespread media coverage. The Federation's website contained the following article: "Teachers send a loud and clear message to Premier More than 15,000 members descended on NSW Parliament in Sydney on 4 May to send a loud and clear message to the Premier and his Government: Enough is enough! The teachers taking strike action called on the Government to urgently act on the teacher shortage and its underlying causes, uncompetitive salaries and unsustainable workloads. Meanwhile, thousands more members protested in 15 regional rallies across the state, drawing attention to how the National Party is failing our kids in the bush. At the Sydney rally, a number of teachers took to the stage to share their experiences of how the teacher shortage is affecting them, their students, and their communities. Braidwood Central School teacher Alisa Stephens said the teacher shortage was having an untold impact on student learning in schools across NSW. 'My youngest son's kindergarten class was without a teacher for 14 days last term due to the shortages. This highlights the dire need for action,' she said. Uralla Central School principal Michael Rathborne explained the effect of chronic shortages on his school. 'I've had seven counsellors in eight years, too many classes uncovered and had to go through a two-year process to get a specialist Industrial Arts teacher. Kids in the bush are being let down by politicians in Sydney,' he said. Federation President Angelo Gavrielatos said the Premier has failed students, their parents, and the teaching profession. 'We took industrial action today because we care deeply about the education that every child in every public school receives. 'We protested outside Parliament House because we cannot accept the crippling teacher shortages that are costing our children opportunities to learn, costing them their future. 'Despite our teachers' best efforts, hundreds of classes are being combined every day. 'Thousands of students are being left in playgrounds with only minimal supervision on a regular basis. To say their learning is being disrupted is a massive understatement. 'One of the most fundamental roles of a government is to ensure there is a qualified teacher in every classroom with the time and support to meet the needs of each child. 'The time for government posturing, spin and gimmickry has long passed,' added Mr Gavrielatos. 'Our children can't put their education on hold and wait for the Premier and his Government to stop ignoring their needs. They need real action now. 'The Perrottet Government cannot be allowed to make the schoolchildren of tomorrow pay for the neglect of sound policy and planning by the politicians of today. 'Acting on uncompetitive salaries and unsustainable workloads is the only way to stop more teachers leaving and to attract the people into the profession we need to fix the shortages. This is an investment in our children's futures. 'Our children are relying on us. We have a responsibility to them and we will not let them down. 'We won't accept anything less than what the profession and our children deserve,' he said."

Further industrial action

1. On 5 May 2022, the Minister visited three schools in the Central Coast area. Members of the Federation walked out, as set out in the table below. School Number of Federation's members who walked out % of teaching staff Duration of walk-out Terrigal High 48 61.5% 9.10-11am Erina Heights 2 8.7% 11.30am-12.15pm Kincumber 6 20.7% 12.40pm-1.40pm

1. On 7 May 2022, the Federation's State Council suspended the ban. The Federation's General Secretary informed the Premier of this decision on 9 May 2022. On 10 May 2022, the General Secretary responded to the Department's letter dated 28 April 2022 and informed it that the ban had been suspended.
2. On 26 May 2022, the Minister visited Leeton. Members of the Federation walked out, as set out in the table below. School Number of Federation's members who walked out % of teaching staff Duration of walk-out Leeton High 29 56% 10.15-11.05am Leeton Public 7 30% 10-11am Yanco Agricultural High 21 68% 11.15am-12.15pm

1. After the Minister's visit to Leeton High School, the following was published on the Department's "Sentral" school management system, which the Department uses for administration, attendance, reporting and communications: "The Federation members at Leeton High School condemn the NSW Minister for Education and the Perrottet government for failing to address the critical issues causing the state-wide staffing crisis that affects every public school in NSW. Members note that the crippling workload, uncompetitive salaries, inadequate release time and the shortage of qualified teachers, specialist support and supply casual teachers required to implement quality education programs require urgent government action now! The continued failure by the NSW Government to act on resolving these issues is negatively impacting every student and every teacher, every day. Our students deserve a fully staffed and resourced public education system, and our teachers deserve more than thanks! This meeting endorses the Federation directive to take action by walking out when the Minister for Education walks into the Leeton Public/Leeton High School's Educational Precinct."
2. On 31 May 2022, the prosecutor wrote to the Federation asking that it confirm in writing whether the walk out direction continued to apply. On 3 June 2022, the Federation's General Secretary responded by saying that the Federation had made no such direction to its members.

The Act

1. Section 6(1) of the Act defines industrial matters, relevantly, as matters affecting the rights and duties of employers and employees in any industry. The examples given in s 6(2) include remuneration and conditions of work.
2. Chapter 2 of the Act provides for awards. Section 10 confers power on the Commission to make awards. Under s 12(3), an award is binding on industrial organisations that were party to the making of the award.
3. Chapter 3 of the Act makes provision for industrial disputes. Section 130 provides that certain persons, including an employer or an industrial organisation of employees may notify the Commission of an industrial dispute. Section 133 obliges the Commission to attempt to resolve an industrial dispute by conciliation. However, if an industrial dispute is not resolved by conciliation, the Commission is required, by s 135, to deal with the dispute by arbitration. Section 136(1) provides that, in arbitration proceedings, the Commission may make a dispute order under Part 2.
4. Section 137, which is in Part 2 of Chapter 3, provides that the dispute orders which the Commission may make include an order that a person cease or refrain from taking industrial action.
5. The term "industrial action" is defined in the Dictionary to the Act as follows: "industrial action means a strike by employees or a lock-out by an employer, and includes - (a) a practice relating to the performance of work, adopted in connection with an industrial dispute, that restricts, limits or delays the performance of work, or (b) a ban, limitation or restriction affecting the performance of work, or the offering or acceptance of work, that is adopted in connection with an industrial dispute, or (c) any failure or refusal in connection with an industrial dispute to attend for work or to perform work, but does not include any action taken by employees with the agreement of their employer or any action taken by employers with the agreement of their employees."
6. Under s 138(1), a dispute order may be made only against, relevantly, a party to the industrial dispute.
7. This Court's power with respect to alleged contraventions of dispute orders arises from s 139. The Court, "on application, must deal expeditiously with an alleged contravention of a dispute order": s 139(1). It is required, before dealing with the alleged contravention, to summon the person to show cause why the Court should not take action for the contravention: s 139(2). Section 139(3) sets out what the Court may do, after hearing any person who answered the summons, including the power to impose a penalty on an industrial organisation as provided by s 139(4). Section 139(4) provides: "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."

Industrial Relations (Public Sector Conditions of Employment) Regulation 2014

1. The Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 (NSW) (the Regulation), up until its amendment on 24 June 2022, relevantly provided: "6 Other policies (1) The following policies are also declared, but are subject to compliance with the declared paramount policies: (a) Public sector employees may be awarded increases in remuneration or other conditions of employment, but only if employee-related costs in respect of those employees are not increased by more than 2.5% per annum as a result of the increases awarded together with any new or increased superannuation employment benefits provided (or to be provided) to or in respect of the employees since their remuneration or other conditions of employment were last determined. (b) Increases in remuneration or other conditions of employment can be awarded even if employee-related costs are increased by more than 2.5% per annum, but only if sufficient employee-related cost savings have been achieved to fully offset the increased employee-related costs beyond 2.5% per annum. For this purpose: (i) whether relevant savings have been achieved is to be determined by agreement of the relevant parties or, in the absence of agreement, by the Commission, and (ii) increases may be awarded before the relevant savings have been achieved, but are not payable until they are achieved, and (iii) the full savings are not required to be awarded as increases in remuneration or other conditions of employment. … (3) The relevant parties in relation to a matter requiring agreement under this clause are the employer and any other party to the proceedings that is an industrial organisation of employees with one or more members whose interests are directly affected by the matter."
2. On 24 June 2022, the Regulation was amended to change the cap from 2.5% to 3%.

The alleged contraventions

1. In the amended summons, the prosecutor alleged four contraventions. The first alleged contribution was pleaded as follows: "1. Directing members to take second state-wide strike, immediate ban on implementation of new policies and walk-outs on NSW Government Ministers/Members of Parliament (Contravention of Orders A1 and A4) 6 On 19 March 2022, the Defendant contravened Orders A1 and A4 of the Dispute Orders in force, by: a. not ceasing to organise industrial action that relates to the Defendant's current wage claims for employees of the Teaching Service; and b. inducing, advising, authorising, supporting, encouraging, directing, aiding and abetting members of the Defendant to organise and/or take industrial action."
2. Although paragraph 6 of the summons (extracted above) referred to 19 March 2022, the prosecutor did not rely on that date. Rather, Mr Taylor SC, who appeared with Mr Fagir on behalf of the prosecutor, contended that the contravention had started on the date of the first particular, 26 April 2022. Mr Crawshaw SC, who appeared with Mr Boncardo on behalf of the Federation, accepted that the Federation had understood that to be the case.
3. The particulars of the first allegation are set out in the following table. Date Action or threat of action 26 April 2022 Member alert directing members to strike for 24 hours on 4 May 2022 26 April 2022 Media release publicising strike action in the Education Journal of the Federation 26 April 2022 Publication of article concerning strike action in the Education Journal of the Federation 28 April 2022 Member alert directing the ban and the walk-out 2 May 2022 Communication from Federation to NSW Transport about train travel for those teachers expected to travel to the demonstration 3 May 2022 Further member alert regarding the strike

1. The second alleged contravention was pleaded as follows "2. Failed to refrain from taking industrial action - 24-hour strike (Contravention of Order A1) 7 The Defendant contravened Order A1 by not refraining from taking industrial action namely the 24-hour state-wide strike which occurred on 4 May 2022."
2. The particulars of the second allegation were as follows: "a) On 4 May 2022, a 24-hour strike and multiple rallies occurred across the State of New South Wales, which was organised by the Defendant. b) 45,611 members of the Defendant participated in the strike on 4 May 2022 which represents 71.11% of the teaching service. c) Approximately 452 public schools were non-operational, as not enough staff were available to work at that school on the day of strike action to safely provide minimal supervision and have students attend. d) Even though the majority of public schools were operational, approximately 709,903 students, that is 89.88% of public-school students across the State were absent from school. Only 79,942 students attended school."
3. The third alleged contravention was alleged as follows: "3. Failed to refrain from taking industrial action - ban on implementation of new policies (Contravention of Order A1) 8 The Defendant has contravened Order A1 by imposing a ban on the implementation of all new policies."
4. The particulars of the third allegation were the member alerts which the Federation issued on 26 April 2022 and 28 April 2022 concerning the ban and the suspension of the ban on 7 May 2022 which the Federation notified by letter to the Premier on 9 May 2022.
5. The fourth alleged contravention was pleaded as follows: "4. Failed to refrain from taking industrial action - walk-out by members of Federation on 3, and 5 and 26 May 2022 at five eight schools (Contravention of Order A1) 9 The Defendant contravened Order A1 by its members walking out at eight schools on 3, 5 and 26 May 2022 when a New South Wales Government MP entered the school grounds."
6. The particulars of the fourth allegation comprised the walk-outs during school visits by Government MPs referred to above.

The validity of the dispute orders

1. The Federation argued, on the same basis as was argued before Walton J in The First Teachers Case, that the orders were invalid. His Honour rejected the argument at [212]-[250]. Mr Crawshaw put the argument formally to protect the Federation's rights on any appeal. I have been informed by the parties that Walton J's judgment in The First Teachers Case had not been the subject of appeal. Mr Crawshaw accepted that I need not address this argument as it had been determined at first instance by Walton J.
2. Subject to one matter, the Federation accepted that the prosecutor had proved the contraventions alleged and that this Court would impose a penalty on it pursuant to s 139(3) and (4)(b). The one matter was that the Federation argued that, as an employee organisation, it could not take industrial action itself, but that such action could only be taken by its members. Rather it could only organise industrial action. I do not consider it to be necessary to determine this question since s 139(3) empowers the Court to impose a penalty on an industrial organisation. The dispute orders include Order A4, which is an ancillary order which prohibits conduct that would amount to a breach of Order A1. Further, there is no basis on which, in respect of industrial action which has been directed by the industrial organisation (as in the present case), the industrial organisation would be entitled to a reduction in penalty because it was not capable of engaging in industrial action itself, but only through its members.

The identification of the maximum penalty

1. The starting point in the imposition of a penalty is to identify the maximum penalty. In the context of sentencing for criminal offences, the High Court (Gleeson CJ, Gummow, Hayne and Callinan JJ) said in Markarian v The Queen (2005) 228 CLR 357; [ 2005] HCA 25 at [31]: "[C]areful attention to maximum penalties will almost always be required, first because the legislature has legislated for them; secondly, because they invite comparison between the worst possible case and the case before the court at the time; and thirdly, because in that regard they do provide, taken and balanced with all of the other relevant factors, a yardstick."
2. This passage was cited with approval by the plurality (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ) in Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; (2022) 96 ALJR 426 (Pattinson) at [52] in the context of civil penalties under the Fair Work Act 2009 (Cth). The High Court decided in Pattinson that the maximum penalty has a different operation in civil penalty proceedings (where the purposes of imposing a penalty are limited to specific and general deterrence) than in criminal proceedings (where other purposes, punishment or retribution, denunciation, rehabilitation also play a part). Importantly, the High Court held that the concept of proportionality, which prevents a court from imposing a sentence near or at the maximum except in cases of greatest objective seriousness, has no application when imposing a civil penalty. I will return to the effect of Pattinson after having addressed the maximum penalty in the present case.
3. There was a significant dispute about the maximum penalty to be applied in the present case. The High Court in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; [2015] HCA 46 (The Fair Work Building Case) at [46]-[59] held that, unlike in criminal sentencing, the Court can, in a civil penalty proceeding, receive and, if appropriate, accept an agreed or other submission concerning the amount of a pecuniary penalty to be imposed.
4. Mr Taylor contended that the maximum penalty was $540,000 (calculated as set out below) and that the penalties that ought to be imposed were as follows. Alleged contravention No of days Maximum penalty Prosecutor's submission 1 35 (26 April 2022-31 May 2022) $360,000 ($20,000 for the first day and $10,000 a day for the following 34 days) $150,000 2 1 (4 May 2022) $20,000 $20,000 3 11 days (26 April 2022-7 May 2022) $120,000 ($20,000 for the first day and $10,000 a day for the following 10 days) $30,000 4 3 days (3, 5, and 26 May 2022) $40,000 ($20,000 for the first day and $10,000 a day for the following 2 days) $20,000 Overall penalty Total maximum penalty: $540,000 $220,000

1. The number of days for the first alleged contravention was calculated from the time of the first breach, 26 April 2022, to the date on which the dispute orders expired, 31 May 2022.
2. Mr Crawshaw submitted that the separate penalties ought not be imposed in respect of each of the four alleged contraventions because all the conduct was subsumed in the first contravention, which itself amounted to a course of conduct. He submitted that the maximum penalty was $100,000, being $20,000 for the first day (26 April 2022) and then $10,000 for each of the further eight days: 28 April 2022, 2 May 2022, 3 May 2022, 4 May 2022, 5 May 2022, 6 May 2022, 7 May 2022 and 26 May 2022. He contended that it would be wrong to count the period from 26 April 2022 to 26 May 2022 as a continuous period for two reasons. First, he submitted that the ban was not shown to have any effect and can, therefore, be disregarded. Second, he submitted that the prosecutor had not alleged that the course of conduct was continuous; rather, the prosecutor had elected to particularise discrete conduct in support of the alleged contraventions and should be held to the terms of the amended summons.
3. I accept Mr Crawshaw's pleading argument. The amended summons does not, in terms, allege that the contraventions were continuous. Instead, the prosecutor has chosen to allege particular contraventions which are said to have been committed on particular days. It was necessary for the prosecutor to alert the Federation to its contention that the contraventions were continuous to avoid the Federation being taken by surprise. I consider that the prosecutor ought be held to the pleaded contraventions.
4. When I raised the issue of identification of the maximum penalty at the during final address, Mr Taylor sought leave to amend the amended summons to allege that the contraventions were continuous. I refused leave. The effect of allowing such amendment would have been to expand the allegations beyond the particulars and occasion a denial of procedural fairness to the Federation, which came to meet a case based on particularised incidents of contravention rather than an allegation of continuous contravention which started on a particular date (26 April 2022) and ended on the date of the last contravention (26 May 2022). This would, of itself, have caused prejudice to the Federation. The effect of an allegation of continuous contraventions would also have been to increase the maximum penalty from $100,000 (based on the discrete contraventions over a period of 9 days) to $360,000 (over a period of 35 days), even if the pleaded contraventions were regarded as aspects of the same contravention. I considered that it would have been unfair to allow the prosecutor to allege a continuous contravention, having regard to its pleadings. For these reasons, I refused the prosecutor's application for leave to amend, which was made when the proceedings were all but over, to allege a continuous contravention.

The relevance of Pattinson to the present case

1. Mr Crawshaw submitted that Pattinson could be distinguished because there was a distinction between the Fair Work Act and the Act. He referred to the Explanatory Note extracted above in support of his submission that the statutes were not analogous since punishment was relevant to the imposition of a civil penalty under the Act but had been held to be irrelevant to the imposition of such a penalty under the Fair Work Act: Pattinson at [39].
2. Apart from referring to the Explanatory Note, Mr Crawshaw relied on what Walton J said in Secretary of the Ministry of Health v The New South Wales Nurses and Midwives' Association [2022] NSWSC 1178 (The Nurses Case), addressed below, as a basis for moderating what was said in Pattinson when fixing the penalty in the present case.
3. In Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2020) 271 CLR 495; [2020] HCA 29, Gageler J said of Explanatory Memoranda (the Commonwealth equivalent of an Explanatory Note): "[71] Having regard to their provenance and to the circumstances of their creation, explanatory memoranda for Government Bills introduced into the Commonwealth Parliament can ordinarily be taken by courts to be reliable guides to the policy intentions underlying Government sponsored legislation. They can ordinarily be relied on by courts to explain the overall legislative design and the intended practical operation of provisions and combinations of provisions. Their use of examples of the contemplated operation of provisions can inform in both those respects. They can sometimes even yield insight into the precise grammatical sense in which words appear in the texts of provisions. [72] Lacking both the force of law and the precision of parliamentary drafting, however, an explanatory memorandum cannot be taken to be an infallible and exhaustive guide to the legal operation of a provision. Notoriously, explanatory memoranda sometimes get the law wrong. The potential for error in examples of the contemplated operation of provisions set out in explanatory memoranda is highlighted by the acknowledgement of the Parliament in s 15AD(b) of the Acts Interpretation Act that even an enacted example of the operation of a provision might get the legal operation of the provision wrong: 'if the example is inconsistent with the provision, the provision prevails'." [Footnotes omitted.]

The imposition of a fine

1. It is common ground that a fine is required to be imposed on the Federation for its admitted contravening conduct. Such fine ought be set at an appropriate level having regard to the particular purposes of general and specific deterrence, as well as, to borrow Walton J's words in [728] of The Nurses Case Case, "the important purpose of helping to resolve the industrial dispute between the parties and promoting the system of conciliation and arbitration established by the Act."
2. Any fine I impose must be paid by the Federation, which in turn is funded by its members. Based on the published rates for full-time members (set out above), the Federation's annual revenue (from that source alone) is $37,543,360. As noted above, because the prosecutor regarded the day taken by those who engaged in strike action on 4 May 2022 as unpaid leave, the participants in the strike must be regarded as having been willing to sacrifice a day's pay for the purpose of advancing their industrial concerns by breaching the dispute orders in that way.
3. Having regard to this matter, the number of the Federation's members and the fact that the Federation fees are paid fortnightly, the impact on individual members of a fine imposed on the Federation, even at the level of the maximum penalty, is unlikely to be oppressive, or to change the members' minds about the legitimacy of the grievances they sought to advance by participating in the strike which the Federation organised on their behalf. Parliament can be taken to have appreciated these matters when setting the maximum penalties in s 139(4) of the Act. Nor can it be expected to be oppressive to the Federation in the present case. It does not follow that the maximum penalty should be imposed on a well-resourced employee organisation such as the Federation (which is only well-resourced because of the number of its members). Indeed, Mr Taylor did not contend that the maximum penalty would be appropriate in the present case.
4. The maximum penalty is regarded as an indication of the seriousness with which Parliament regards the proscribed conduct: Camilleri's Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698 (Kirby P, Campbell and James JJ agreeing). It is significant that the maximum penalty depends not only on whether there have been prior contraventions, but also (and more significantly in mathematical terms) on the number of days over which the breaches continue. Thus, the duration of the breaches of dispute orders would appear to be regarded as more significant than the nature of the breaches of dispute orders. This can be taken to reflect a legislative concern that long-running industrial action in breach of dispute orders is more harmful to the system of conciliation and arbitration sanctioned by the Act than, say, a breach that does not extend beyond a day.

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