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

Secretary, Department of Education v The Australian Education Union New South Wales Teachers Federation - [2022] NSWSC 1365 - NSWSC 2022 case summary — Zoe

[6]

The dispute orders

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.]
Directions were also made to require the Federation to notify its representatives and members of the dispute orders.
It was not disputed that, at the time the dispute orders were made, it was expected that the Commission would hear an application for a new award for teachers and related staff in early May 2022.

[7]

The 2021 proceedings

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).
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).
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.
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 …"
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.
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 first day of Term 2 for public schools in New South Wales was 26 April 2022. The students returned to school on 27 April 2022.

[8]

The proposed industrial action

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."
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.'"
On 27 April 2022, the Department of Education sent an email to all principals. It referred to the proposed strike action on 4 May 2022 and said that industrial action in the form of the 24-hour strike would be deemed to be unauthorised absence and therefore would be unpaid. It informed the principals that arrangements would need to be made to supervise students (and inform parents and caregivers of such arrangements), report industrial action and make deductions from payroll.
On 28 April 2022, the Federation issued a further member alert regarding the ban and the strike.
On 28 April 2022, a representative of the prosecutor wrote to the Federation setting out the Federation's proposed industrial action (the strike, the ban and the walk-outs) and the dispute orders. The prosecutor continued: "The Department requests that the Federation cease organising and refraining from directing, supporting and encouraging its members to take industrial action in contravention of Orders A1 and A4 as identified in 1, 2 and 3 above. The Federation is requested to write to the Department by Friday 29 April 2022 at 3.00PM, to advise whether it will cease and desist from directing, encouraging and supporting its members to take any industrial action as identified in 1, 2 and 3 above, failing which the Department will commence proceedings in the Supreme Court of NSW seeking relief for the alleged contravention of the Dispute Orders unless the Federation can show cause why such action should not be taken. In relation to proposed industrial action identified at 2 above, the Department's Consolidated School Schedule has identified the following focus areas for important school changes in Term 2, including the School Success Model (SSM) changes for literacy and numeracy, the continuation of the Inclusive, Engaging and Respectful (IER) Schools policies and important policy and procedure updates. The Department requests that you identify which new policies and initiatives the Federation has directed its members not to comply with and for how long. I also note that Regulation 9 of the Teaching Service Regulation 2017 requires that the member of the Teaching Service who is in charge of the school (i.e. the school principal) must manage the school in a proper, efficient, economic and equitable manner. This includes implementing and managing programs for student safety, welfare and well-being and compliance with the Work Health Safety Act 2011 regarding the safety of staff and students in a school. As it is the principal's responsibility under Regulation 9 to ensure that students are supervised appropriately, they must at all times act in a manner that is consistent with these requirements. They are obliged not to encourage or permit school staff to walk out and leave students unsupervised at any time and should implement departmental policies and initiatives to ensure that their school is properly managed and student safety and welfare is not compromised."
The Federation responded to this letter on 10 May 2022 (see below).
On 29 April 2022, the prosecutor issued an email to all principals concerning the imminent strike. She referred to the need to minimise disruption in schools arising from the strike. She also said: "We have engaged with the Teachers Federation throughout the award negotiations, including extensive conciliation in the IRC, and are committed to securing an award that enables us to attract and retain the best teachers. We are seeking the maximum remuneration increase available of 2.5% (comprising a 2.04% salary increase and 0.5% superannuation guarantee) per year across the new 3-year award, including the 2.5% remuneration increase for teachers and related employees that the department already delivered from the start of 2022."
On 2 May 2022, a representative of the Federation wrote to Transport NSW to inform it that the Federation expected between 500 and 800 teachers to travel by train on 4 May 2022 from Wollongong to Town Hall station to arrive by 9.30am. The representative asked whether a further service could be put on to accommodate these teachers.

[10]

The deferral of proceedings in the Commission

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.
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."

[11]

The strike on 4 May 2022

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."
Data collected from principals of the 2,219 public schools in New South Wales recorded that 45,611 of the Federation's members (which comprised 71.11% of the teaching service) participated in the strike on 4 May 2022. About 452 public schools were "non-operational" as staff numbers were insufficient to provide minimal supervision. Although most of the schools were "operational", about 709,903 students (89.88% of students) were absent from school. Only 79,942 students attended school on 4 May 2022.

[15]

The Act

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.
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.
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.
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.
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."
Under s 138(1), a dispute order may be made only against, relevantly, a party to the industrial dispute.
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."
It was common ground that, having regard to the penalty imposed by Walton J in The First Teachers Case, s 139(4)(b) applied.
The Explanatory Note to the Bill which became the Act said, of present relevance: "Part 2 Dispute orders This Part confers powers on the Commission to make dispute orders to deal with industrial disputes (including orders preventing or restraining industrial action, requiring the reinstatement of employees and preventing secondary boycotts). The Commission may punish breaches of dispute orders in a number of ways (including deregulation of an industrial organisation and the imposition of a fine)." [Emphasis added.]

[18]

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."
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."
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."
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.
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."
The particulars of the fourth allegation comprised the walk-outs during school visits by Government MPs referred to above.

[20]

The identification of the maximum penalty

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."
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.
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.
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

[21]

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.
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.
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.
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.
It is necessary to turn to the Federation's argument that all of the contraventions amount to aspects of a course of conduct and ought, therefore, be treated as a single contravention. As Bathurst CJ (Gleeson and Simpson JJA agreeing) explained in Public Service Association and Professional Officers' Association Amalgamated Union of New South Wales v Industrial Relations Secretary (2018) 96 NSWLR 762; [2018] NSWCA 39 at [149], where separate acts amount to a single course of conduct which contravenes dispute orders, it is appropriate to treat what occurred as a single contravention of dispute orders. In the present case, the Federation's breaches of A1 and A4 of the dispute orders were interrelated. Although organising the strike action, the ban and the walk-outs comprised separate acts, they were part of a larger campaign designed to enlist support for the cause of the Federation's members. So much would appear to have been recognised by the prosecutor in the pleading of the first allegation, which is drafted on the basis that the three arms of attack amount to a single contravention, albeit one with several particulars. This conclusion is consistent with the approach taken by Walton J in The First Teachers Case at [329]-[338].
Mr Taylor conceded that if I accepted Mr Crawshaw's submission that the contravening conduct should be treated as a course of conduct, the maximum penalty would be $360,000 on the basis of his calculation for the alleged first contravention (which depended on my viewing the conduct as continuing for the period from 26 April 2022 to 26 May 2022 and also my regarding the pleading of the alleged contraventions as sufficient for this purpose).
It follows from my finding that the alleged contraventions should be treated as a single course of conduct that there is only one maximum penalty to be applied. For the reasons given above, the maximum penalty is $100,000 because of the way the prosecutor has pleaded the contraventions.

[22]

The relevance of Pattinson to the present case

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].
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.
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 difficulty with the text of the Explanatory Note is that there is nothing in it which would give the reader any confidence that the author had considered the various purposes of imposing civil penalties and nominated punishment as the only one worth mentioning. Rather, the text tends to indicate that the author simply wished to make the point that, generally speaking, the purpose of a "penalty" is, as the language would tend to indicate, to punish. Further, there is no basis for supposing that the author was acquainted with the line of authority which was upheld by the High Court in Pattinson which established that the purposes of civil penalties were to deter the contravenor (specific deterrence) and others (general deterrence) from repeating the contravening conduct. Nor is there anything in the text of the Act to indicate that the purpose of the imposition of civil penalties was to punish the contravenor.
Further, although a penalty is apt to be experienced by the person on whom or which it is imposed as punishment, it does not follow that punishment is its purpose. As the High Court said in Rich v Australian Securities and Investments Commission (2004) 220 CLR 129; [2004] HCA 42 at [30]-[35] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ), proceedings which have a protective purpose may nonetheless be punitive for the purposes of the privilege against exposure to a penalty, although their purpose is not to punish. The starting premise of mutual exclusivity (between the two concepts of punishment and protection of the public) was found to be erroneous.
For these reasons, I am not persuaded that the text of the Explanatory Note diminishes the extent to which the principles in Pattinson apply in the present case.
In The First Teachers Case (which was decided before Pattinson), Walton J considered and applied the principles enunciated in Pattinson v Australian Building and Construction Commissioner (2020) 282 FCR 580; [2020] FCAFC 177 (Pattinson FFC) on the basis that they were apposite to the imposition of a penalty under s 139 of the Act. Although Pattinson FFC was overturned by the High Court in Pattinson, I understand from Walton J's reasons in The First Teachers Case that his Honour regarded the principles which applied to the imposition of civil penalties under the Fair Work Act as being applicable to the imposition of civil penalties under the Act, having regard to the analogies between the Commonwealth and New South Wales systems.
However, in The Nurses Case, Walton J was required to consider the applicability of Pattinson (which was decided on 13 April 2022) to the Act. His Honour found there to be some differences between the statutory context of the Fair Work Act and the Act such that the principles in Pattinson were not applicable without qualification. His Honour at [728] said: "[728] First, although the majority's judgment was expressed broadly, their Honours nevertheless emphasised that their decision based on the features of the Act in that case, that is, the Fair Work Act: see, eg, at 322 [66]. The civil penalty provisions in s 546 of that Act have a 'statutory function of securing compliance with provisions of the [statutory] regime': Commonwealth v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; [2015] HCA 46 at 495 [24] (French CJ, Kiefel, Bell, Nettle and Gordon JJ, as Kiefel CJ then was) ('Commonwealth v FWBII'). In this respect, the purpose of civil penalties in s 546 of the Fair Work Act and s 139 of the NSW Act are distinguishable. Although securing compliance with orders of the Commission is an important purpose, the latter [NSW] regime also serves 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. … [733] Secondly, there is a tension with the reference to the 'cost of doing business' in Pattinson with s 139 of the Act. The concept of the 'cost of doing business' is very understandable in the context of competition and consumer law where, for example, the advantage to be gained from engaging in unlawful anti-competitive behaviour or making misleading and deceptive statements can be clearly seen. It can also be discerned in the facts of Pattinson where the union dues collected from the implementation of a 'no ticket, no start' policy can be estimated. But it becomes more difficult for a court to calculate the 'cost' or gains, in a monetary amount, from organising or taking industrial action in support of a claim for conditions of employment for its members. The prosecutor did not suggest how this should be calculated or considered in these proceedings." [Emphasis added.]
Despite the differences, his Honour held that deterrence was an important consideration under both regimes and that Pattinson was generally applicable, with some qualifications. I consider that the matters raised by Walton J in [733] (extracted above) are as germane in the present case as they were in The First Teachers Case. As his Honour observed, the "cost of doing business" does not have any particular meaning in the present context. The Federation, by breaching the dispute orders, can be taken to have been responding to the concerns of its members. These concerns, which I accept to be genuinely felt by the Federation's members (although it is not for this Court to opine as to their merits), include concerns about the reduction in the value of their remuneration, having regard to the cap on salary increases which is less than the inflation rate, the consequential loss of teachers to the profession and the prospect that people who might once have chosen to become teachers will not do so, leading to shortages in the availability of teachers. Such concerns are amply demonstrated by the content of the member alerts which the Federation sent to its members.
For these reasons, the following passage from The Fair Work Building Case, citing with approval French J's judgment in Trade Practices Commission v CSR Ltd [1991] ATPR 41-076 at 52,152 (also approved in Pattinson at [16]), would appear to be inapposite in a case such as the present: "No less importantly, whereas criminal penalties import notions of retribution and rehabilitation, the purpose of a civil penalty, as French J explained in Trade Practices Commission v CSR Ltd, is primarily if not wholly protective in promoting the public interest in compliance (107): 'Punishment for breaches of the criminal law traditionally involves three elements: deterrence, both general and individual, retribution and rehabilitation. Neither retribution nor rehabilitation, within the sense of the Old and New Testament moralities that imbue much of our criminal law, have any part to play in economic regulation of the kind contemplated by Pt IV [of the Trade Practices Act] … The principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.'"

[23]

The imposition of a fine

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."
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.
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.
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.
There are several formulations derived from the authorities which precede Pattinson as to the matters which are to be taken into account in determining the amount of a penalty to be imposed. However, the High Court in Pattinson drew a distinction between the purposes of imposing sentences for criminal conduct (which include punishment, retribution, denunciation, rehabilitation as well as general and specific deterrence) and the purposes of imposing civil penalties, which were limited to specific and general deterrence. In Pattinson, other concepts germane to criminal sentencing, including the importance of the objective seriousness of the offence to the concept of proportionality, as considered in Veen v The Queen (No 2) (1988) 164 CLR 465; [1988] HCA 14, and the principle that the punishment should fit the crime, were held to be inapt to the imposition of civil penalties: Pattinson at [39]. Nonetheless other concepts, such as totality, parity and course of conduct were held to be potentially relevant in an assessment of what is reasonably required to deter further contraventions: Pattinson at [45]. It is, accordingly, necessary to address those matters which are particularly relevant to specific and general deterrence, having regard to the importance of those purposes.
Whether a contravenor will contravene again requires some consideration of past conduct as well as an assessment of the contravenor's attitude to the subject contravention. Mr Taylor relied on contraventions by the Federation in the period leading up to 2012 as evidencing a tendency to breach the Commission's orders. Having regard to the substantial passage of time between contraventions in and prior to 2012 and the contraventions which were addressed in The First Teachers Case, I do not regard the earlier (up to 2012) contraventions as materially bearing on whether the Federation is likely to contravene future dispute orders made by the Commission.
However, I accept the prosecutor's submission that the Federation has expressed neither remorse nor contrition and that these matters are relevant to specific deterrence.
Mr Crawshaw submitted that I ought not separately take into account the contraventions which were the subject of The First Teachers Case because those contraventions had already been factored into the appropriate maximum penalty (which was accepted to be the maximum penalty in s 139(4)(b), rather than the lower one in s 139(4)(a)). However, he ultimately accepted that it was necessary for the penalty which I impose for the present contravening conduct to be greater than that imposed by Walton J in The First Teachers Case, it being self-evident that the penalty imposed by his Honour was insufficient to deter the Federation from committing further breaches of the dispute orders.
Mr Crawshaw submitted that I could take into account the motivation of the Federation and its members (to advance the concerns which I have identified above) which was wholly unlike the conduct of the union in Pattinson (in which the union unlawfully excluded non-union members from building sites). I consider the motivation of the Federation and its members to be part of the circumstances surrounding the contravening conduct. The scheme of the Act is, however, designed to encourage employers, such as the Department, and employee organisations, such as the Federation, to resolve their disputes by conciliation and arbitration rather than by industrial action in breach of dispute orders. I understood it to be common ground that the capacity of the Commission to resolve the dispute to the satisfaction of the Federation and its members has been highly constrained by the Regulation (which, until recently, imposed a 2.5% cap on salary increases, which was subsequently increased to 3%). This neither justifies, nor excuses, the breaches of the dispute orders; it does however serve to explain the breaches of the dispute orders.
Mr Crawshaw submitted that I ought take into account that to withdraw one's labour by striking was an internationally recognised human right. It was not suggested that the Act was, by reason of any inconsistency with international law, invalid or unconstitutional. Whether or not there is such an internationally recognised human right, I am bound by the terms of the Act, which permits dispute orders to be made which prohibit industrial action, including strikes. The dispute orders in the present case prohibited strike action. They were plainly and deliberately breached.
It is important to set the fine at a level such that it will deter not only the Federation but also others who are considering breaching dispute orders and to encourage such organisations to resolve industrial disputes in accordance with the conciliation and arbitration methods provided for in the Act. This cannot be a matter of science or calculation. The maximum penalty is an important yardstick.
While, as the High Court has said in Pattinson, "retribution" is irrelevant when imposing a civil penalty order, it is important to note that the concept of general deterrence incorporates the purpose of maintaining confidence in the relevant system: the system of conciliation and arbitration for the purposes of resolving industrial disputes: see, in the criminal context, Markarian v The Queen, at [82]. Passages to similar effect in The Nurses Case are cited above. Further, the concept of general deterrence includes the importance of the state's obligation "to express the community's disapproval of the [contravening] conduct": Munda v Western Australia (2013) 249 CLR 600; [2013] HCA 38 (Munda) at [54] (French CJ, Hayne, Crennan, Kiefel, Gageler and Keane JJ). Although Munda involved a criminal sentence, what was involved in general deterrence was addressed. In the present case, it is necessary to record that the industrial action organised and promoted by the Federation breached the dispute orders in a material way. These breaches were inimical to the orderly conduct of the conciliation and arbitration system established by the Act.
Having regard to the matters referred to above, I make the following order: 1. Pursuant to s 139(3)(e) of the Industrial Relations Act 1996 (NSW), impose a fine on the defendant of $60,000.

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