The applicant has drawn the court's attention to three cases in which Qantas appears as a respondent. The first Gama v Qantas Airways Limited[2006] FMCA 1761 was an action under Race and Disability Discrimination Acts. It did not involve the fixing of a pecuniary penalty and the differences in the factual substratum satisfy me that it is not a relevant consideration in this case. Howe v Qantas Airways Ltd[2004] FMCA 242 also did not involve a pecuniary penalty or civil penalty matter. It related to a dispute over unpaid leave converted to sick leave. Again it seems to me to have little relevance to this case and does not indicate a pattern of breaches by Qantas. The third case Australian & International Pilots Association v Qantas Airways Ltd[2009] FCA 500 was a case in which no penalties were awarded. The court found there was no need for specific deterrence at [9].
The respondents, in their helpful written submissions, between [72] and [84] deal comprehensively with what appears to be a difference of opinion amongst the judges of the Federal Court on the relevance of previous conduct. It would not be appropriate for a judge of a lower court to attempt to reconcile these differences. But I do adopt what Mr Kenzie QC says at [84] of those submissions:
"[84] Ultimately, the difference in opinion amongst the judges of the Federal Court may be more concerned with whether there is an exclusionary rule but may have limited practical effect when one has regard to the overwhelming principles in Veen v The Queen, that is that there must be some rational connection between the previous offences and the present offence whereby the previous offences demonstrate a disregard for the Respondent's obligations under the law."
[2]
I cannot see a demonstrated disregard for the first respondent's obligations in the three cases referred to above.
[3]
Mr Cawthorne has not previously been the subject of a pecuniary penalty in an industrial matter.
[4]
Whether the breaches were properly distinct or arose out of one course of conduct
[5]
The breaches were distinct as between the first and second respondents
[6]
The first respondent, whilst conceding that it is a large well resourced employer with a very large number of employees, submits that its very size is supportive of a lower penalty or no penalty:
"Because in the context of the very large undertaking and the very complex industrial arrangements in place the breach as found by the court is very insignificant and reveals no systematic or deliberate corporate strategy to interfere in the rights of employees."
I do not agree that the breaches are insignificant and whilst I do agree that there was no systematic or deliberate corporate strategy of the type found in Finance Section Union v CBA[2005] FCA 1847; [2005] 224 ALR 467 at [27] there can be no denying that the suspension of postings was intended to interfere with the rights of Mr Murray. The first respondent makes much of the statement in an affidavit of Mr Panagiotopoulos where at [5] he says:
[5] Although at the time of suspending the postings Qantas did not determine the timeframe for which the suspension would remain in place, Qantas did not suspend postings for an indefinite period of time. At the time of the decision to suspend postings, I anticipated that the suspension would remain in place for several weeks while Qantas took steps to determine what had occurred in Mr Murray's case and to ensure that he same did not happen to any other engineers."
[7]
[6] At the time of the decision, Qantas did not intend or anticipate that employees would believe that the suspension may remain in place until late 2010 or early 2011.
[7] Qantas never intended that the suspension would result in Mr Murray being denied the opportunity to obtain an overseas posting in late 2010 or early 2011. At the time the decision was made, I did not anticipate that the decision would have any impact on Mr Murray because Mr Murray had only recently returned from a posting and therefore any opportunity for him to be offered another posting would have been unlikely to arise until at least late 2010 or early 2011, considering operation requirements and availability."
[8]
Mr Panagiotopoulos was not required for cross examination upon his affidavit and I must accept what he says there but the background to the decision was Mr Murray exercising his workplace right which I found influenced the decision to suspend postings.
[9]
The respondent says that the breaches were not deliberate in the sense that they did not deliberately set out to contravene the general protection provisions of the Act and this is probably the case. Nonetheless the actions were a direct result of Mr Murray seeking to exercise his workplace rights and be paid as he was entitled.
[10]
Whether senior management was involved in the breach
[11]
The applicant accepts Mr Panagiotopoulos, Mr Thompson and Mr Cawthorne were middle managers.
[12]
Whether the party committing the breach had exhibited contrition
[13]
In Mr Panagiotopoulos' affidavit of 26 June 2012 he says under the heading "future actions":
"[11] I still believe that it was appropriate for Qantas to suspend international postings from Brisbane in the circumstances that existed in March 2010. Qantas made the decision to suspend postings because of a concern that Qantas would be exposed to potential breaches of its enterprise agreement if it continued sending engineers from Brisbane overseas whilst the issues that Mr Murray had raised remained unresolved.
[12] However, when Qantas made the decision to suspend international posting from Brisbane I assumed that employees would understand that the suspension would only remain in place for a short period of time. I now realise that I was mistaken in this assumption. I now recognise that Qantas should have communicated more clearly to employees that the suspension was only intended to remain in place until the Brisbane roster issue was resolved and that we anticipated that this would only take a few weeks. I regret that I did not communicate clearly to the employees regarding the likely period of the suspension.
[13] I am sorry that the suspension was misconstrued as it has been."
Paragraph 11 seems to be an assertion of the innocence of Qantas' motives. I found at [41] that I could not be satisfied with those explanations. Again I am obliged to accept Mr Panagiotopoulos' assumptions conveyed in [12] about the employee's understanding but I note that Mr Thompson has not sworn an affidavit and he was the person behind the suspension of postings. I cannot say that I have been overly impressed with Qantas' alleged contrition. Mr Cawthorne has been more fulsome in his affidavit of 26 June 2012. Again there is an element of attempting to quarrel with the findings of the court especially at [5] and [6] of that affidavit but between [9] and [13] appropriate contrition is expressed.
[14]
Whether the party committing the breach had taken corrective action
[15]
Qantas submitted two affidavits of Rachel Jane Bernasconi deposing, on information and belief, to steps that Qantas has taken to educate its managers in relation to the Act and in particular in respect of adverse action where some six presentations were made to Qantas engineering managers and employees. She says at [8] and [9] of her affidavit:
"[8] In addition, Blake Dawson conducts investigations and Disciplinary Action Training for managers and supervisors of Qantas Airways Limited approximately every two months. This is a two day course covering workplace investigations, performance management and disciplinary procedures. Adverse action and workplace rights is a component of this training course. We have conducted approximately 14 sessions since the commencement of the Fair Work Act. Each course is attended by approximately 20 to 25 managers/supervisors from various Qantas businesses. I estimate that approximately 300 employees have attended the course in this period.
[9] In part, as a measure in response to the decision in these proceedings, on 17 March 2011 I conducted a briefing and discussion with approximately 30 to 40 Qantas Human Resources Managers on adverse action. A copy of this presentation is annexed and marked "D".
[16]
Whether the party committing the breaches cooperated with the enforcement authorities
[17]
The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements
[18]
The applicant submits at [34] and [35] of his written submissions:
"[34] His efforts were met with the second respondent's conduct which was intended to coerce him into not pursuing his complaint and then the first respondent's conduct to punish him for exercising his workplace rights.
[35] The penalty for the respondents conduct should reflect the need to ensure compliance with the workplace instruments by encouraging those responsible for affording employee's their entitlements to take that responsibility seriously."
The court must be seen to be effective. The legislation provides for penalties where breaches have occurred and the court is able to calibrate such penalties. It should only be in exceptional circumstances that no penalty be awarded.
[19]
In regard to specific deterrence the applicant points to the views expressed by Gray J in Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union[2008] FCAFC 170; (2008) 171 FCR 357 at [37]:
"Specific deterrence focuses on the party on whom the penalty is to be imposed and the likelihood of that party being involved in a similar breach in the future. Much will depend on the attitude expressed by that party as to things like remorse and steps taken to ensure that no future breach will occur."
While I accept that Qantas is taking the steps outlined by Ms Bernasconi to prevent reoccurrence of the infringements, I think that a penalty that contains a salutary element of specific deterrence is appropriate and might assist in ensuring that the infringements are not repeated. I do not take quite the same attitude with Mr Cawthorne because it is clear that some internal assessment of his conduct is likely to take placed based upon the affidavit of Mr Panagiotopoulos and his own affidavit. He has also been the subject of some publicity as detailed in his affidavit and this has naturally had an upsetting effect upon him. In regard to general deterrence I think there is a very strong case to be made for a penalty in respect of both the respondents. The reaction to Mr Murray's attempt to secure himself his entitlements was strong and it should be made clear to other corporations and individuals that it was wrong and should not occur elsewhere.
[20]
I have come to a conclusion that it is appropriate a penalty should be imposed. I have noted the respondents' submissions that it is not such a case. I do not accept that part of the submission which refers to Qantas' contravention as being "the most technical of breaches of the adverse action provisions of the Act". There was nothing technical about suspending postings, at least in part, because an individual had made a claim for his proper remuneration. This was a clear finding made by me and not as a result of the reverse onus. The fact that it did not affect Mr Murray has to be taken into account but that does not make the infringement a technical one. The arguments for no penalty in regard to Mr Cawthorne rely on his accepted contrition and the prospect of some internal critical activity. But that has not yet occurred and the court should not speculate as to what Mr Cawthorne's "counselling" might consist of. Attempting to coerce someone to give up their rights is a serious matter and cannot be overlooked even if, as I accept, it is unlikely to reoccur.
The applicant asks for penalties in the medium to high range. I do not think this is appropriate given the nature of the infringements, the views I have expressed about prior infringements in the case of Qantas and the fact that there have been none in the case of Mr Cawthorne. I also take into account Mr Cawthorne's contrition and the publicity to which he has already been subject. While I was not much impressed with Qantas' contrition, I do note the efforts that it is making in regard to education on these matters. Bearing in mind all the factors which I have discussed in these reasons I am of the view that in respect of the first respondent the appropriate penalty is the sum of $13,200.00 (120 penalty units) and in the case of Mr Cawthorne the appropriate penalty is $2,200.00 (20 penalty units). In each case the penalty is to be paid to the applicant under s.546(3) of the Act. The penalty against the first respondent shall be paid within twenty-eight days. The penalty against the second respondent shall be paid within three months.
[21]
I certify that the preceding twenty-nine (29) paragraphs are a true copy of the reasons for judgment of Raphael FM
Parties
Applicant/Plaintiff:
The Australian Licensed Aircraft Engineers Association
Respondent/Defendant:
Qantas Airways Limited & Anor [2012] FMCA 711
Legislation Cited (2)
Work Act 2009
Relations Act 1996
Cases Cited (14)
On 11 February 2011, after a hearing lasting four days in November and December 2010, I made declarations to the effect that the first respondent had subjected Mr Luke Murray to adverse action in contravention of s.340(1) of the Fair Work Act 2009 (Cth)[1] and that the second respondent took action against Mr Luke Murray with intent to coerce him not to exercise a workplace right in contravention of s.343(1)(a) of the Act. I ordered that proceedings for a penalty be set down for hearing on a date to be fixed. The respondents appealed those orders to the Federal Court where the matter was heard on 18 November 2011 by a Full Bench Gray, North and Besanko JJ. Their Honours gave judgment on 4 May 2012. Their Honours' orders were:
"1. The appeal is allowed in part by substituting for the declarations made by the Federal Magistrates Court on 23 March 2011, the following:
(a) Declare that Qantas Airways Limited contravened s 340(1)(a)(ii) of the Fair Work Act 2009 (Cth) by altering the position of Mr Luke Murray to his prejudice because he exercised a workplace right, in that, on 26 March 2010 Qantas Airways Limited suspended overseas postings for an indeterminate period and thereby denied Mr Murray the opportunity to obtain an overseas posting in late 2010 or early 2011 which he otherwise expected to receive, and Qantas Airways Limited took such action, at least in part, for the reason that Mr Murray had made a claim for entitlements arising from his posting at Narita between 4 December 2009 and 16 January 2010.
(b) Declare that Mr Peter Cawthorne contravened s 343(1) of the Fair Work Act 2009 (Cth) by taking action against Mr Luke Murray with intent to coerce him to not exercise a workplace right, in that, on 8 March 2010 Mr Cawthorne threatened Mr Murray that if he did not withdraw his claim for entitlements arising from his posting at Narita between 4 December 2009 and 16 January 2010, Mr Murray would not be given any further overseas postings.
2. The appeal is otherwise dismissed.
3. The balance of the proceeding is remitted to the Federal Magistrate for determination of issues concerning penalties."
On 3 August 2012, having had the benefit of written submissions from both parties, I conducted a hearing on penalty. The determination of the penalty is made taking into account the general law discussed hereunder and proceeds from two fundamental bases. The first is that the penalties arise out of the conduct which is the subject of the declarations and not out of any other conduct that might have been alleged during the course of the original hearing. The second is that the Parliament has set down the maximum penalties for these breaches which, in the case of the first respondent is $33,000.00, and in the case of the second is $6,600.00. The court is obliged to work within that matrix and cannot allow views by whomsoever expressed about the adequacy of the penalties for corporations as large as the first respondent to influence it: Director of Public Prosecutions v CPD[2009] VSCA 114; (2009) 22 VR 533, R v AB (No 2)[2008] VSCA 39; (2008) 18 VR 391 at [50], R v Tait and Bailey(1979) 24 ALR 473. The responsibility for fixing the maximum amount of penalties is the Parliament's alone: Australian Securities and Investments Commission v Vizard[2005] FCA 1037; (2005) 54 ACSR 394 at [45].
As it is probable that this decision will be read by persons who may not have nor intend to read the original decision and that of the Full Bench it is appropriate that I should shortly set out the background to the original proceedings. They involve Mr Luke Murray, a licensed aircraft maintenance engineer ("LAME") employed by Qantas at its Brisbane facility. In November 2009 Mr Murray who is on a list of LAMEs qualified to undertake work in overseas postings for Qantas, was asked whether he was interested in taking up a posting in Narita to provide relief coverage for approximately six weeks from 4 December 2009 to 16 January 2010. Mr Murray agreed, flew to Narita and carried out his duties working on the Narita shift roster. Upon his return home he discovered that there were significant differences between the Narita roster and the Brisbane roster that he normally worked, the effect of which was that longer hours are worked under the Narita roster and higher shift penalties are paid. Mr Murray raised this matter with the Narita manager and was advised that he would be paid at the higher rate but the payment did not materialise and he took the matter up first with a Mr Honza. Mr Honza himself took the matter up with a Mr Cawthorne, Mr Cawthorne with a Mr Thompson and Mr Thompson with a Mr Panagiatopoulos. Mr Murray's request for additional payment was not well received by the managers at Qantas. After an email exchange between Mr Murray and Mr Cawthorne a telephone conversation ensued in respect of which I found that:
"At the start of the conversation I will describe Mr Cawthorne's tone as aggressive. As the call progressed, it quickly changed to hostile as he was yelling at [Mr Murray]."
During March Mr Cawthorne, Mr Thompson and Mr Panagiatopoulos discussed between themselves ways in which to deal with Mr Murray's claims. Mr Panagiatopoulos accepted Mr Thompson's recommendation that all overseas postings from Brisbane should be suspended. This occurred on 26 March 2010. There was no temporal limit on the suspension at the time it was made and although it affected all Brisbane LAME's proceedings were only brought on behalf of Mr Murray. As Mr Murray had recently completed a posting it was unlikely that he would be offered another until late 2010 or early 2011. Although the posting suspension was withdrawn on 27 April 2010 shortly after these proceedings were commenced, and therefore Mr Murray did not suffer any actual loss, the conduct of the managers was considered by myself and by the Full Bench to have altered Mr Murray's position to his prejudice in the manner described in the first declaration.
The approach that a court should take as to penalty was set out comprehensively in the applicant's written submissions [5] to [8]. The respondent did not cavil with this expression of the relevant principles and I myself have adopted similar in other proceedings as to penalty: Fair Work Ombudsman v Baruch[2011] FMCA 1007, James v Planpac International Pty Ltd and Ors (No 2)[2010] FMCA 845, Community and Public Sector Union v University of Western Sydney(2010) 194 IR 90. I respectfully adopt the applicant's submission as set out below:
"[5] "The approach to be followed in penalty proceedings under industrial laws is well established. The authorities set out the considerations that may be relevant for the assessment of penalty. They include:
a. The nature and extent of the conduct which led to the breaches.
b .The circumstances in which that conduct took place.
c. The nature and extent of any loss or damage sustained as a result of the breaches.
d. Whether there had been similar previous conduct by the respondent.
e. Whether the breaches were properly distinct or arose out of the one course of conduct.
f. The size of the business enterprise involved.
g. Whether or not the breaches were deliberate.
See Mason v Harrington Corp Pty Ltd t/as Pangaea Restaurant & Bar[2007] FMCA 7, Kelly v Fitzpatrick[2007] FCA 1080; (2007) 166 IR 14, Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC8 ) and Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union[2008] FCAFC 170.
"65. Although "check lists" of the above kind are a useful starting point in determining whether a penalty ought to be imposed, and If so the level of such penalty, at the end of the day the task of the Court is to fix a penalty that pays appropriate regard to the contraventions that have occurred: Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith[2008] FCAFC 8; 2008 165 FCR 560at [91]. Moreover, as the Full Court noted in Plancor Pty Ltd v Liquor Hospitality and Miscellaneous Union[2008] FCAFC 170at [60], while general guidance as to the appropriate penalty may be obtained through an analysis of comparable cases, it remains necessary for the Court to give careful consideration to the circumstances of the case before it (see also Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith...at [12] per Gray J."
[7] Lander J in I [2007] FCAFC 65, in the context of the described the purposes of imposing penalties as follows:
(2009) 22 VR 533
(2008) 18 VR 391
(2010) 194 IR 90
(2008) 171 FCR 357
(1979) 24 ALR 473
(2007) 166 IR 14
(2008) 177 IR 306
(1984) 36 SASR 101
(1979) 22 SASR 108
(1975) 11 SASR 217
(2005) 147 IR 462
h. Whether senior management was involved in the breaches.
i. Whether the party committing the breach had exhibited contrition.
j. Whether the party committing the breach had taken corrective action.
k. Whether the party committing the breach had cooperated with the enforcement authorities.
l. The need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements and
"93 There are three purposes at least for imposing a penalty: punishment; deterrence; and rehabilitation. The punishment must be proportionate to the offence and in accordance with the prevailing standards of punishment: R v Hunter (1984) 36 SASR 101 at 103. Therefore the circumstances of the offence or contravention are especially important. The penalty must recognise the need for deterrence, both personal and general. In regard to personal deterrence, an assessment must be made of the risk of re-offending. In regard to general deterrence, it is assumed that an appropriate penalty will act as a deterrent to others who might be likely to offend: Yardley v Betts (1979) 22 SASR 108. The penalty therefore should be of a kind that it would be likely to act as a deterrent in preventing similar contraventions by like minded persons or organisations. If the penalty does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the section. However, the penalty should not be such as to crush the person upon whom the penalty is imposed or used to make that person a scapegoat. In some cases, general deterrence will be the paramount factor in fixing the penalty: R v Thompson (1975) 11 SASR 217. In some cases, although hardly in this type of contravention, rehabilitation is an important factor."
[8] The Federal Court has also observed that the determination of the amount of penalty in workplace relations proceedings is no longer to be approached with a "light hand". See Finance Sector Union v Commonwealth Bank of Australia[2005] FCA 1847; (2005) 147 IR 462 at 483 and Commonwealth Bank of Australia & Anor v Finance Sector Union [2007]; (2007) 157FCR 329 at 298 and 364 per Branson J."