PENALTIES
56 The applicant identified the following relevant considerations in fixing penalties:
(a) the nature of the unlawful industrial action found to have occurred;
(b) the circumstances in which the relevant conduct took place (including whether the conduct was undertaken in deliberate defiance or disregard of the Act);
(c) the likely deterrent effect (both specific and general) of any civil penalty imposed;
(d) the consequences of the conduct found to be in contravention of the BCII Act, both in terms of the amount of loss or damage caused, if any, and less tangible effect on the building and construction industry and public generally;
(e) the period over which the contraventions extended;
(f) the extent of co-operation with regulatory authorities and any acknowledgment of wrong doing;
(g) the need to give effect to the statutory purposes underpinning the BCII Act and the relevant parts of the WR Act;
(h) whether the contraventions involved or were directly attributable to the conduct of senior management;
(i) the Respondents' past record of statutory contraventions and other conduct in industrial relations;
(j) if the contravention involved an association or organization, the size of that association or organization;
(k) A building association's corporate culture; and,
(l) the financial position of each of the Respondents (if the evidence suggests that they will personally pay any penalty that is imposed).
57 The applicant submitted that in fixing civil penalties, the Court should take account of the views of any relevant regulator as a specialist body, but that such views should not be treated as determinative. As much appears to be established by the decision of the Full Court in Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72. Accepting that decision as I must, I observe only that considerable care must be exercised in so doing, particularly where the regulator is a party to the proceedings. Such "views" must be more than bald assertions of the desired outcome in a particular case, or of the regulator's policy. One would expect some factual basis to be demonstrated for the views so advanced. A respondent might expect an opportunity to test the views and the facts upon which they are allegedly based. In other words, it may be necessary for the regulator to provide admissible lay and expert evidence. The Court cannot treat a statement as relevant if it is really only an opinion or statement of preferred outcome. I do not understand this issue to loom large in the present case.
58 The applicant's submissions deal in some detail with the purpose of the WR Act and the BCII Act, pointing to various reasons for treating breaches of industrial legislation as relatively serious. I doubt, however, whether such considerations are of particular relevance in a case such as this where the relevant conduct was limited in scope and effect. All legislation which prescribes penalties, criminal or otherwise, has the purpose of deterring conduct which is deemed to be undesirable. The important point is that the penalty be sufficiently substantial to act as an appropriate deterrent, having regard to matters which may tempt persons to infringe. The penalty must also be proportionate to the infringing conduct.
59 I infer that the First Strike action substantially disrupted work on the Ravensthorpe project. It lasted for 48 hours and involved about 400 workers. It may be, however, that little work would have been done at that time in any event. Weather conditions were unfavourable. No attempt was made to negotiate with the employers prior to taking industrial action. Such pre-emptive action may be attractive to workers and unions. Minimal notice of industrial action probably maximises disruptive effect. It is said that the contraventions "were in manifest defiance of the law". That may be so. However the statement of agreed facts demonstrates that neither Mr Powell nor Mr McDonald directly instigated any discussion concerning strike action. It may be that they deliberately created a situation from which such action was calculated to emerge, but there is no evidence to that effect.
60 There is nothing oppressive about requiring parties in an industrial relationship to adhere to the law. Where the parties have agreed upon dispute resolution procedures there is nothing oppressive about insisting upon their complying with the terms of such agreement. The strike action was quite arbitrary. The absence of any prior negotiations concerning the claims suggests that they may not have been the real, or sole, reason for the strike. The Second Strike action was, in some senses, less serious than the First Strike action. It involved a shorter stoppage and fewer employees. However all striking workers were employed by AGC. It probably aggravated any consequences of the earlier strike.
61 I have previously referred to the decision in Leighton. That case involved alleged breaches of s 38 of the BCII Act. The three respondents were, I understand, the CFMEU, the CFMEUW and Mr McDonald, although this is not entirely clear from the report of the case. Mr McDonald conducted meetings at which industrial action was considered. The relevant industrial action was the holding of the meetings during working hours and subsequent bans and strikes. I note that there were eighteen infringements by the CFMEU and five by the CFMEUW. Mr McDonald committed sixteen infringements. The industrial action extended over a longer period of time than did the presently relevant conduct.
62 The respondents have other industrial "background". The applicant pointed to the decision in Cruse v CFMEU [2007] FMCA 1873. In that case the CFMEU was found to have breached s 38 in connection with an unlawful strike lasting two and a half days. In Australian Competition and Consumer Commissioner v CFMEU [2007] ATPR 42-140 all four of the present respondents were found to have engaged in secondary boycott action by preventing or hindering the supply of concrete to a site by forming a picket line at the gate. Both Mr McDonald and Mr Powell have had their rights of entry revoked or suspended because of their conduct in connection with the exercise of such rights. The applicant asserts that the CFMEU has, on numerous occasions, been found to have contravened other provisions of industrial legislation involving coercive behaviour and false and misleading statements, advising or organising action with intent to coerce an employer and breaching orders. Unfortunately, save in the case of the Leighton matter, I was not told whether this conduct occurred before or after that with which I am present concerned. In Leighton, the relevant conduct occurred in March 2005. Normally, only conduct preceding that in question is taken into account in fixing penalties. In any event, although the respondents have apparently engaged in prior industrial misconduct, I have insufficient information to justify my according great weight to such misconduct.
63 The respondents submitted that in a large organisation such as the CFMEU, with autonomous state branches, it is not necessarily appropriate to treat conduct by all branches throughout the country as relevant past conduct for the purpose of fixing a penalty in connection with the unlawful conduct of one branch. There is substance in that submission. Whether previous misconduct is relevant to fixing a penalty is a question of logic. In some cases a pattern of conduct across the country may suggest a nationwide plan of action or a national culture of misconduct. In other cases it may appear that a particular branch or geographical region has acted alone in adopting a plan of action or has developed a particular culture. It was also submitted that past conduct cannot operate so as to increase the penalty beyond that which is appropriate to the misconduct in question. That proposition may be correct, but it should not be taken as implying that past misconduct is irrelevant to the fixing of penalty.
64 The respondents submitted that "… prior contraventions of industrial legislation per se should not be taken into account when assessing prior conduct. What should be relevant is prior breaches of provisions which contain the same elements in the case under consideration." I do not accept that proposition. On the criminal side, it has never been suggested that only previous convictions for offences similar to that charged are relevant to sentence. Rather, a sentencing court looks to the general record of conduct of the relevant offender, his or her attitude to the law as disclosed by such conduct, apparent attempts at rehabilitation and similar considerations. Repeated conduct of a particular kind may lead to an identified need to provide some particularly persuasive form of deterrent against similar future misconduct.
65 The applicant conceded that the respondents' admissions in the statement of agreed facts have avoided the unnecessary expense, time and effort associated with a lengthy trial. However these proceedings were commenced on 30 November 2006. The admissions were made on 14 January 2008. They were certainly not made at an early stage.
66 The respondents submitted that on each occasion the first and third respondents had entered the site for the purposes of a lawful meeting. This seems to have been the case. At each meeting workers raised matters of concern and decided upon the action to be taken. In connection with the First Strike action Mr McDonald warned the workers of the consequences. The only involvement of the respondents was conducting the meetings, taking the votes, advising the employers of the proposed action and subsequent negotiation. Although 400 people went on strike after the First Strike action only 150 workers had been at the meeting.
67 It was said that notwithstanding the delay in making the relevant admissions "the respondents should be given the full value of the utilitarian discount and the discount for contrition of up to 35% on sentence …". It is very difficult to speak of the "full value of the utilitarian discount and the discount for contrition". It is not clear to me that the volume of industrial prosecutions has been such as to produce a standardised approach to the problem. In any event I am not sure that I should treat the admissions as an act of contrition rather than as a commercial or tactical decision. However I keep them in mind in fixing the penalties.
68 The respondents also submitted that it was relevant to penalty that the Second Strike action was not unlawful action at the relevant time, the BCII Act not having been proclaimed until 12 September 2005. This fact creates a rather uncomfortable situation for the Court. Parliament made it clear that s 38 was to have retrospective effect. The Government gave early warning of its intention to seek such retrospective effect. However the Government cannot, itself, outlaw conduct by executive decree. Citizens should not have to regulate their conduct by reference to the non-binding views of the Government. However the Court must take into account the fact that Parliament has enacted s 38 with retrospective effect.
69 The respondents submitted that both strikes related to disputed matters raised at the first meeting, and that they should be treated as one course of conduct. I am inclined to the view that there were two separate incidents, the First and Second Strike actions. They should be dealt with separately, but the overall penal effect must also be considered. Further, the CFMEU's breach of s 178 was constituted by virtually the same facts as was its breach of s 170MN.
70 The penalties imposed in Leighton offer a convenient starting point for present purposes. Because of the more extensive misconduct in that case, the penalties in this case should be lower. In Leighton the relevant conduct was all contrary to s 38 of the BCII Act. For that reason, and because the maximum penalty for such a breach is higher than those for the WR Act infringements, I will commence by considering the penalties for the infringements of s 38. Mr McDonald was not involved in this aspect of the case.
71 In Leighton the penalty imposed on Mr McDonald was $30,000 against a maximum penalty of $22,000 for each infringement. The applicant suggested that in this case a penalty of $2,500 should be imposed on Mr Powell. The respondents suggested a penalty of $1,000, fully suspended for a period of six months. In other words no penalty would be payable in the event that Mr Powell behaved himself for that period. This approach may have been partially motivated by the view that there was really only one course of unlawful conduct. I find it difficult to take such an indulgent view of Mr Powell's conduct, given that he had some previous history of disobedience to industrial law, and that, as I infer, the second strike imposed additional disruption upon AGC. The substantial penalty imposed upon Mr McDonald in Leighton also dictates something more than a merely nominal penalty in this case. The two unions also have previous histories of industrial misconduct. For each of them the maximum penalty is $110,000. In Leighton the CFMEUW was treated as being less involved in the contraventions than was the CFMEU. This may have reflected the fact that the CFMEU had acknowledged eighteen contraventions whilst the CFMEUW had acknowledged only five. The Court imposed a penalty of $30,000 upon the CFMEUW for those five infringements. In this case, the applicant suggested a penalty of $20,000 for each union. The respondents submitted that a penalty of $5,000, fully suspended, was appropriate. I do not agree. There was nothing trivial about the misconduct in question. I see no real basis for distinguishing between the CFMEU and the CFMEUW.
72 The applicant's recommendation of a penalty of $2,500 for Mr Powell is, in my view, at the lower end of the appropriate range. I adopt it, subject to any adjustment which may be necessary after I have considered the appropriate penalty for him in connection with the First Strike action. The penalties imposed on the CFMEU and CFMEUW should be roughly equivalent to that imposed upon Mr Powell but adjusted, having regard to the higher maximum penalty. I see no reason for treating the two unions as being more or less culpable than was Mr Powell. Subject to the possibility of adjustment for overall effect I fix the penalty at $12,000 in each case.
73 I turn to the First Strike action. It led to a two day strike and involved a much larger number of men, serving a wider range of employers, than did the later strike. It was, in that sense, more serious. On the other hand, in the case of Mr McDonald, it was the only action in which he was involved. The maximum penalties under the WR Act are substantially lower than those under the BCII Act. For Messrs Powell and McDonald the maximum penalty for a breach of s 170MN is $6,600. The maximum for the CFMEU is $33,000. In the case of a corporation, the maximum penalty for a breach of s 178 is $49,500. It is important to keep in mind that the conduct constituting the CFMEU's breach of s 170MN was the same as that constituting its breach of s 178.
74 It is convenient to commence with the CFMEU's contravention of s 178. The applicant submitted that the penalty should be $5,000. The respondents submitted that there should be no penalty or a fully suspended penalty. This was upon the basis of its submission that I should impose a penalty of $5,000, suspended for six months, in connection with its breach of s 170MN. Such an approach is misconceived. It is true that virtually the same conduct constituted the breach of s 170MN and that of s 178. However the maximum penalty for a breach of s 178 is substantially higher than that for a breach of s 170MN. In my view the applicant's figure of $5,000 is, again, towards the lower end of the appropriate range, given that it represents slightly more than 10% of the maximum, a proportion roughly equivalent to that which I have imposed in connection with the s 38 offences. I fix the penalty at $5,000, again, subject to an overall review of the total effect of all of the penalties.
75 With respect to the s 170MN infringement, were I fixing a penalty for the CFMEU upon the basis that its conduct had infringed that section rather than s 178, I would have been inclined to impose a penalty of, again, slightly over 10% of the maximum of $33,000, say about $3,500. That would be a total of $8,500 for the two infringements. To take that approach would, however, be effectively to impose two penalties for substantially the same conduct. It is reasonable to impose some additional penalty, given that the CFMEU not only contravened the statute, but also the agreements to which it had voluntarily become a party. To recognise that the same conduct constituted the two infringements, with the additional factor of disregard for the certified agreements, I fix the penalty for the breach of s 170MN at $1,000.
76 Turning to Messrs Powell and McDonald, the applicant submitted that in Mr Powell's case, the penalty should be $2,500 and in Mr McDonald's, $4,000. The respondents submitted that each should receive a penalty of $1,500 of which two-thirds should be suspended for a period of six months. The distinction between the treatment of Mr McDonald and that of Mr Powell is presumably based upon Mr McDonald's involvement in the Leighton matter and the rather more serious circumstances surrounding the revocation of his entry permits as compared to those surrounding the suspension of Mr Powell's permits. As I have said, it may be unfair and unwise to place much reliance upon the latter matter, given absence of any knowledge concerning the dates of the relevant misconduct. With regard to the Leighton matter, I must keep in mind the fact that Mr McDonald had not been dealt with for such conduct at the time of the First Strike action. However I am inclined to accept that Mr McDonald has a somewhat worse record than does Mr Powell.
77 I do not accept that Mr Powell's infringement of s 170MN (with a maximum penalty of $6,600) should attract the same penalty as his infringement of s 38 of the BCII Act (with a maximum penalty of $22,000). It is true that the first strike was more serious than the second. More employers and employees were involved, and the strike was for two days rather than one. On the other hand, Mr Powell engaged in the Second Strike action knowing that he had previously engaged in the First Strike action, and probably intending to aggravate the effects upon AGC of the earlier strike. These considerations will be best reflected by my imposing a penalty of $1,000 upon Mr Powell in connection with the First Strike action. In the case of Mr McDonald, a penalty of $1,500 is appropriate. Thus, the penalties which I have provisionally fixed are:
s 170MN s 178 s 38 Total
Mr Powell $1,000 Nil $ 2,500 $ 3,500
CFMEUW Nil Nil $12,000 $12,000
Mr McDonald $1,500 Nil Nil $ 1,500
CFMEU $1,000 $5,000 $12,000 $18,000