Stuart-Mahoney v Construction, Forestry, Mining and Energy Union - [2008] FCA 1426 - FCA 2008 case summary — Zoe

CTHFCA

Stuart-Mahoney v Construction, Forestry, Mining and Energy Union

[2008] FCA 1426

Federal Court of Australia|2008-09-19|Before: Tracey J

View original source

At a glance

Source facts

Court

Federal Court of Australia

Decision date

2008-09-19

Before

Tracey J

Source

Original judgment source is linked above.

Judgment (36 paragraphs)

[1]

Between 6 October 2005 and 12 October 2005 each of the respondents contravened s 38 of the Building and Construction Industry Improvement Act 2005 (Cth) by engaging in unlawful industrial action (being the imposition of an overtime ban).
Between 6 October 2005 and 12 October 2005 each of the respondents contravened s 43 of the Building and Construction Industry Improvement Act 2005 (Cth) by organising action (being the imposition of an overtime ban) with intent to coerce Hooker Cockram Projects Ltd to engage a person as a building employee.

[2]

A penalty of $20,000.00 be imposed on the first respondent for contravening s 38 of the Building and Construction Industry Improvement Act 2005 (Cth).
A penalty of $35,000 be imposed on the first respondent for contravening s 43 of the Building and Construction Industry Improvement Act 2005 (Cth).
A penalty of $2,000 be imposed on the second respondent for contravening s 38 of the Building and Construction Industry Improvement Act 2005 (Cth).
A penalty of $6,000 be imposed on the second respondent for contravening s 43 of the Building and Construction Industry Improvement Act 2005 (Cth).
Paragraphs 3 and 4 of these orders be wholly suspended for 12 months from the date of these orders. If the second respondent is not found to have breached any provision of the Building and Construction Industry Improvement Act 2005 (Cth)or the Workplace Relations Act 1996 (Cth) as a result of conduct occurring within 12 months of the date of these orders he shall not be obliged to pay the penalties.

[5]

INTRODUCTION 1 The applicant seeks a declaration that each of the respondents contravened ss 38 and 43 of the Building and Construction Industry Improvement Act 2005 (Cth) ("the BCII Act"). The applicant also seeks an order imposing pecuniary penalties on the first respondent, the Construction, Forestry, Mining and Energy Union ("the CFMEU") and the second respondent ("Parker"), an organiser of the CFMEU, and an employee and member of that organisation. No pecuniary penalty is sought against the third respondent ("Corbett"), who was, at all material times, a CFMEU shop steward and a CFMEU member, but who has since retired. 2 The alleged contraventions arose during a dispute over whether Hooker Cockram Projects Limited ("Hooker Cockram") was required to engage an apprentice throughout the construction period of a police and law courts complex in Morwell, Victoria ("the project"). 3 Work on the project was governed in part by the Hooker Cockram Ltd and CFMEU Building and Construction Industry Collective Bargaining Agreement 2000-2005 ("the Collective Agreement"). The CFMEU understood that it also had an oral agreement with Hooker Cockram that an apprentice would be engaged on the project, for the duration of the project. An apprentice was engaged on the project from around September 2004 when the project commenced until late September 2005. 4 On 28 September 2005, Parker informed Hooker Cockram of the CFMEU's understanding of the parties' agreement in relation to apprentices: Hooker Cockram had agreed to have apprentices employed on the project site, for the lifetime of the project. As there was then no apprentice employed on the site, Hooker Cockram had broken that agreement. Hooker Cockram's position was that it had only agreed to encourage its sub-contractors to engage apprentices. On 6 October 2005 Parker and Corbett held a meeting with all workers at the project site over the issue. Following the meeting, an overtime ban was imposed on the site which continued until 13 October 2005. 5 By a statement of claim filed on 5 December 2006, the applicant claimed that the respondents had contravened ss 38 and 43 of the BCII Act by recommending and supporting the overtime ban. 6 The matter was listed for trial on 21 April 2008. On 16 April 2008 the applicant filed a Statement of Agreed Facts between the applicant and the respondents in which each of the respondents admitted the alleged contraventions. The issues at the trial were thus limited to those relating to what relief, if any, should be granted by the Court.

[6]

THE ADMITTED CONTRAVENTIONS OF SECTION 38 OF THE BCII ACT 7 Section 38 of the BCII Act provides: "A person must not engage in unlawful industrial action." 8 "Unlawful industrial action" is defined in s 37 of the BCII Act as follows: "Building industrial action is unlawful industrial action if: (a) the action is industrially‑motivated; and (b) the action is constitutionally‑connected action; and (c) the action is not excluded action." 9 "Building industrial action" is defined in s 36(1) as: (a) the performance of building work in a manner different from that in which it is customarily performed, or the adoption of a practice in relation to building work, the result of which is a restriction or limitation on, or a delay in, the performance of the work, where: (i) the terms and conditions of the work are prescribed, wholly or partly, by an industrial instrument or an order of an industrial body; or (ii) the work is performed, or the practice is adopted, in connection with an industrial dispute (within the meaning of subsection (4)); or (b) a ban, limitation or restriction on the performance of building work, or on acceptance of or offering for building work, in accordance with the terms and conditions prescribed by an industrial instrument or by an order of an industrial body; or (c) a ban, limitation or restriction on the performance of building work, or on acceptance of or offering for building work, that is adopted in connection with an industrial dispute (within the meaning of subsection (4)); (d) …." Paragraphs (e), (f) and (g) contain certain exceptions, none of which has application to this case. 10 It was an agreed fact that the building and construction work performed at the site constituted building work within the meaning of that term in s 5 of the BCII Act. The building work was required to be performed in accordance with the terms and conditions prescribed by the following industrial instruments: (a) the National Building and Construction Industry Victorian Common Rule Declaration 2005 (which incorporated the terms (with minor exceptions) of the National Building and Construction Industry Award 2000); (b) the National Building and Construction Industry Award 2000; (c) the Collective Agreement; and (d) various industrial agreements applicable to the Hooker Cockram sub-contractors when working on the site. 11 The overtime ban was clearly a ban on the performance of building work in accordance with the terms and conditions prescribed in the industrial instruments, and was therefore, building industrial action within the meaning of ss 36(1)(b). It is, therefore, not necessary for me to express a concluded view as to whether or not paragraphs (a) or (c) might also apply. 12 The overtime ban was also clearly unlawful industrial action within the meaning of s 37 (see paragraph [8] above): a clear purpose of the ban was to disrupt the performance of work (see paragraph (d) of the definition of "industrially-motivated" in s 36(1)) and the ban adversely affected Hooker Cockram in that it jeopardised its ability to meet its contractual commitments on the project and led to it having to pay certain contractors despite them being unable to perform work because of the bans (see paragraph (b) of the definition of "constitutionally-connected" in s 36(1)). It was not suggested that the ban fell within the definition of "excluded action", being protected action within the meaning of the Workplace Relations Act 1996 (Cth) ("the WR Act"). 13 It follows that any person who engaged in the ban contravened s 38 of the BCII Act. A person who is "involved" in a contravention of a civil penalty provision is treated as having contravened that provision (see s 48(2)). A person is involved in a contravention if he or she has aided, abetted, counselled or procured a contravention. It is an agreed fact that, at the 6 October 2005 meeting, Parker and Corbett raised for consideration, encouraged and supported a decision of the meeting that an overtime ban be imposed on the site. Parker and Corbett were clearly involved in the ban, and are therefore treated as each having contravened s 38. Pursuant to s 69(1)(b) of the BCII Act, the conduct of Parker as an organiser of the CFMEU and an employee of that organisation is taken to be conduct of the CFMEU. The conduct of Corbett, as a CFMEU shop steward, is taken to be conduct of the CFMEU pursuant to s 69(1)(d) of the BCII Act. The CFMEU has, therefore, also contravened s 38. 14 The overtime ban was in force from 6 October 2005 to 12 October 2005, inclusive. The question is whether the entire period of the overtime ban should be regarded as one continuing contravention or whether on each day on which the overtime ban was imposed there was a separate contravention. The Court was not invited to treat the ban as being a series of daily bans. The BCII Act does not prescribe the way in which a continuing breach or a course of conduct is to be treated for penalty purposes: cf s 79(2) Trade Practices Act 1974 (Cth) and s 719 WR Act, referred to in Mornington Inn Pty Ltd v Jordan (2008) 247 ALR 714 at [41]. The BCII Act does, however, direct that "a reference to building industrial action includes a reference to a course of conduct consisting of a series of building industrial actions" (s 36(3)). In my view it is appropriate to treat the ban as a single action when determining appropriate penalties.

[7]

THE ADMITTED CONTRAVENTIONS OF SECTION 43 OF THE BCII ACT 15 Section 43(1) of the BCII Act provides that: "A person (the first person) must not organise or take action, or threaten to organise or take action, with intent to coerce another person (the second person): (a) to employ, or not employ, a person as a building employee; or (b) to engage, or not engage, a person as a building contractor; or (c) to allocate, or not allocate, particular responsibilities to a building employee or building contractor; or (d) to designate a building employee or building contractor as having, or not having, particular duties or responsibilities." 16 Parker and Corbett organised a meeting of all workers, and encouraged and supported a decision to impose an overtime ban on the site. They advised Hooker Cockram that the overtime ban would continue until: (a) one or more of the Hooker Cockram sub-contractors or Hooker Cockram employed an apprentice to work at the site on the project; (b) Hooker Cockram and/or one or more of the Hooker Cockram sub-contractors engaged the Gippsland Group Training Scheme or some other apprentice provider as a building contractor so that the apprentice provider could arrange for an apprentice to work at the site on the project; (c) Hooker Cockram and/or one or more of the Hooker Cockram sub-contractors allocated or designated particular duties or responsibilities to an apprentice provider to require an apprentice to be employed at the site on the project; and /or (d) Hooker Cockram allocated or designated particular duties or responsibilities to one or more Hooker Cockram sub-contractors so as to require an apprentice to be employed at the site on the project. These conditions will be referred to, collectively, as "the Employment Requirement". 17 The term "action" in s 43(1) is not defined. Importantly, it is not limited to "building industrial action". The prohibition extends to organising or taking any action where there is an intention to coerce another to engage in the conduct referred to in paragraphs (a) - (d). The intention of the respondent, in imposing the overtime ban, was clearly to ensure that the Employment Requirements were met. By organising the meeting of workers on 6 October 2005 and ensuring the continuation of the overtime ban until the Employment Requirements were met, Parker and Corbett clearly contravened s 43 of the BCII Act. Pursuant to s 69(1)(b) and s 69(1)(d), this conduct is taken to be conduct of the CFMEU. Therefore, the CFMEU also contravened s 43(1).

[18]

CONSIDERATION 39 In Kelly v Fitzpatrick (2007) 166 IR 14 I set out a non-exhaustive range of considerations to which regard may be had in determining whether conduct calls for a penalty, and if so, the amount of such penalty. These considerations were derived from a number of decisions of this Court including Trade Practices Commission v CSR Ltd [1991] ATPR 52,135 (41-076) (which concerned contraventions of the Trade Practices Act 1974 (Cth)) and Construction, Forestry, Mining and Energy Union v Coal and Allied Operations Pty Ltd (No 2) (1999) 94 IR 231 (which concerned contraventions of Part XA of the WR Act). 40 In my view, potentially relevant and applicable considerations for determining the appropriate penalty for a contravention of the BCII Act include: · The nature and extent of the conduct which led to the breaches. · The circumstances in which that relevant conduct took place. · The nature and extent of any loss or damage sustained as a result of the breaches. · Whether there had been similar previous conduct by the respondent. · Whether the breaches were properly distinct or arose out of the one course of conduct. · The size of the business enterprise involved. · Whether or not the breaches were deliberate. · Whether senior management was involved in the breaches. · Whether the party committing the breach had exhibited contrition. · Whether the party committing the breach had taken corrective action. · Whether the party committing the breach had cooperated with the enforcement authorities. · The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements. · The need for specific and general deterrence. cf Hadgkiss v Aldin (2007) 164 FCR 394 at [61]; Furlong v Australian Workers Union (2007) 162 IR 171 at [7] - [10]; Carr v Communications, Electrical, Electronic, Engineering, Information, Postal, Plumbing and Allied Services Union of Australia [2007] FMCA 1526 at [7]; and Cruse v Construction Forestry Mining and Energy Union [2007] FCA 1873 at [71].

[22]

Similar previous conduct 44 This consideration is derived from the decision of Branson J in Coal & Allied Operations. In the present case, the applicant invites the Court to have regard to previous contraventions by the CFMEU of the WR Act in determining the appropriate penalty for the CFMEU's contraventions of the BCII Act. Similar previous conduct demonstrates that the respondent has a history of engaging in the particular conduct in question, that the penalties previously imposed were insufficient to deter the respondent from re-engaging in that conduct and that the respondent has failed to take adequate steps to prevent further contraventions. Conduct which is of a different character does not assist this assessment see: Leighton Contractors Pty Ltd v Constructions, Forestry, Mining and Energy Union (2006) 164 IR 375 at [67]. Similar conduct which has been found to contravene other legislative provisions will have potential relevance. In this case, any previous contraventions of the provisions of Part 9 of the WR Act which relate to unlawful industrial action and coercion are relevant in determining the appropriate penalty. 45 The CFMEU has been found to have breached s 38 of the BCII Act on two previous occasions. In Leighton, the Supreme Court of Western Australia relevantly found that the CFMEU had committed 18 contraventions of s 38 of the BCII Act between 9 March 2005 and 8 March 2006 by convening and conducting unauthorised meetings of employees of Leighton Contractors Pty Ltd and imposing strikes and bans on the performance of work on the New Metrorail City Project in Western Australia. I note that some of this conduct post-dates the overtime bans in the present case. The Court imposed a penalty of $90,000 against the CFMEU. In Cruse, the Federal Magistrates Court found that the CFMEU contravened s 38 of the BCII Act by being involved in unlawful industrial action, in that case a strike, by approximately 300 workers at the Roche Mining (JR) Pty Ltd mineral sands separation plant between 22 and 28 September 2005. The Court imposed a penalty of $35,000 against the CFMEU. 46 The CFMEU has not previously been found to have contravened s 43 of the BCII Act. It has, however, been penalised for coercive conduct under the WR Act see: Ponzio v B & P Caelli Constructions Pty Ltd & Ors (2007) 158 FCR 243. 47 Parker and Corbett have not been found to have contravened the BCII Act or the WR Act.