THE APPROPRIATE LEVEL OF PENALTY
4 In United No 5 I set out (at [25]) the facts and legal consequences that were agreed between the parties. Those facts are an essential part of the submission advanced for the represented respondents as to the orders that should be made in respect of penalty. The agreement was as follows:
…
The applicants and the CFMEU Respondents [defined in para 6 of this statement of agreed facts], CEPU Respondents [defined in para 7 of this statement of agreed facts] and AMWU Respondents [defined in para 8 of this statement of agreed facts] (together, the Respondents) … agree as follows:
Parties
Applicants
1 During the period 22 to 30 January 2010, each applicant was:
(a) a corporation incorporated under the Corporations Act 2001 (Cth) and to which paragraph 51(xx) of the Australian Constitution applied;
(b) the employer of some of the Respondents;
(c) a "building employer" which employed "building employees" within the meaning of the [BCII Act];
(d) a building sub-contractor engaged by [WBPL] to carry out "building work" within the meaning of the BCII Act, on the project known as the "Pluto LNG Project" or "Pluto LNG Development Project" for the development, production and processing of petroleum, including the construction of a single gas processing train and ancillary facilities between Onslow and the Burrup Peninsula in Western Australia (Project); and
(e) a "building industry participant" within the meaning of the BCII Act.
Respondents
2 During the period 22 to 30 January 2010, each Respondent was:
(a) a "building employee" whose employment consisted of or included "building work" within the meaning of the BCII Act;
(b) employed by one of the applicants to undertake "building work" on the Project;
(c) employed under a Commonwealth industrial instrument, which is or was a workplace agreement pursuant to the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (Cth) (Transitional Act); [The applicable industrial instruments are set out in para 4 of this statement of agreed facts] and
(d) a "building industry participant" within the meaning of the BCII Act.
Intervener
3 The intervener is the [ABCC] appointed under s.15 of the BCII Act who intervenes in the proceeding pursuant to section 71 of that Act.
Industrial context
4 During the period 22 to 30 January 2010, the industrial instruments which covered and applied to the applicants and Respondents employed by them were:
(a) United Group Resources Pty Ltd Employee Collective Pluto Project Agreement 2009;
(b) AGC Industries Pty Ltd Employee Collective Pluto Project Agreement 2009;
(c) Modern Access Services Pty Ltd Employee Collective Pluto Project Agreement 2009;
(d) Downer EDI Engineering Power Pty Ltd Employee Collective Pluto Project Agreement 2009;
(e) Monadelphous Engineering Associates Pty Ltd Employee Collective Pluto Project Agreement 2009;
(f) CBI Constructors Pty Ltd Interim Transitional Employment Agreements;
(g) Decmil Australia Pty Ltd Employee Collective Pluto Project Agreement 2009;
(h) Freo Machinery Pluto Project Greenfields Agreement 2008;
(i) Mammoet Australia Pty Ltd Greenfields Agreement 2008;
(j) PCH Group Limited Employee Collective Pluto Project Agreement 2009;
(k) RCR Construction & Maintenance Pluto Project Greenfields Agreement 2008;
(l) Positron Trident Pty Ltd Pluto Project Greenfields Agreement 2009,
(together, the Industrial Instruments).
5 During the period 22 to 30 January 2010, each Respondent employed by:
(a) United Group Resources Pty Ltd (first applicant);
(b) AGC Industries Pty Ltd (second applicant);
(c) MAS Australasia Pty Ltd (third applicant);
(d) Downer EDI Engineering Power Pty Ltd (fourth applicant);
(e) Monadelphous Engineering Associates Pty Ltd (fifth applicant);
(f) Decmil Australia Pty Ltd (seventh applicant);
(g) PCH Group Ltd (tenth applicant); or
(h) RCR Power Pty Ltd (twelfth applicant),
was covered by an "enterprise agreement" for the purposes of section 417 of the [FW Act], each of which is a workplace agreement pursuant to the Transitional Act, and was within its nominal term.
Union membership
6 Each Respondent listed in:
(a) Attachment 1 was a member of the CFMEU during the whole period 23 to 30 January 2010;
(b) Attachment 2 was not a member of the CFMEU during the whole period 23 to 30 January 2010,
(together, the CFMEU Respondents).
7 Each Respondent listed in Attachment 3 was a member of the CEPU during the period 27 November 2009 to 28 February 2010 (together, the CEPU Respondents).
8 Each Respondent listed in:
(a) Attachment 4 was a member of the AMWU during the period 27 November 2009 to 28 February 2010; and
(b) Attachment 5 was not a member of the AMWU during the period 27 November 2009 to 28 February 2010,
(together, the AMWU Respondents).
The Project
9 The events relevant to the proceeding happened on and in relation to the on-shore component of the Project, which is situated approximately 26 km from Karratha. Exhibits A2 to A5 [which were attached to the exhibited agreement] are photographs which show the location of relevant places within and nearby the Project site.
10 The majority owner, operator and manager of the Project is Woodside Burrup, a subsidiary of Woodside Energy Ltd.
11 The Project involves, amongst other things, the construction of a single gas processing train and ancillary facilities to process gas from the Pluto and Xena gas fields located in the Carnarvon Basin about 190km north-west of Karratha, Western Australia.
12 Work on the Project commenced in around July 2007.
13 Since the commencement of work on the Project, Foster Wheeler (WA) Pty Ltd in joint venture with WorleyParsons Pty Ltd, [FWWP], has been the engineering, procurement and construction manager (EPCM) of the Project.
14 The overall performance of the building work on the Project is, and since the commencement of the building work on the Project has been, supervised by [FWWP].
15 Approximately 3800 workers were employed to work on the Project during the period 22 to 30 January 2010. The 3800 workers referred to in this paragraph included construction and non-construction (staff) employees of the applicants and employees of contractors who are not parties to this proceeding.
Rostering on the Project
16 Whilst engaged to work on the Project, the Respondents were required to work pursuant to roster cycles of one of the following configurations:
(a) 4 weeks on, 1 week off;
(b) 5 weeks on, 1 week off; or
(c) 6 [weeks] on, 1 week off.
17 During their rostered "on-time", the Respondents' ordinary hours of work on the Project were usually worked Monday to Saturday on rostered shifts of 10 hours duration, either on a day shift usually commencing at either 6.00am or 6.30am and finishing at 4.30pm or 5.00pm respectively, or on a night shift usually commencing at 6.30pm and finishing at 4.30am.
Accommodation at the Project
18 Many Respondents who perform work on the Project do so on a fly in/fly out basis.
19 Whilst each Respondent was engaged to work on the Project, they were accommodated in one of two accommodation villages (Gap Ridge Village and Searipple Village), or in their own local accommodation near the Project.
20 Gap Ridge Village is located about 20km from the project site and Searipple Village is located about 30km from the project site.
21 Gap Ridge Village contains 2,100 rooms. It is owned by Woodside Burrup and is operated for Woodside Burrup by Sodexho under the management of [FWWP]. Searipple Village is privately owned and operated not by Woodside Burrup.
22 Each of the Industrial Instruments contains terms to the following effect (in clause 42 and Appendix 7, clause 6):
"42. Distant Workers
Employees classified as Distant Workers as defined and International Distant Workers as defined shall be entitled to the conditions contained at Appendix 7 - Distant Work Provisions of this Agreement."
"APPENDIX 7: DISTANT WORK PROVISIONS
(6) The Company shall have the choice of providing each Distant Worker with either suitable board and lodging or paying the Living Away from Home Allowance set out in this Appendix."
23 During the period from 22 to 30 January 2010, many of the Respondents were Distant Workers within the meaning of the Industrial Instruments.
24 The Respondents who were accommodated at Gap Ridge Village in the period from 22 to 30 January 2010 did so on terms and conditions of occupancy which were effective from 17 June 2009 and which applied throughout the period 22 January 2010 to 30 January 2010.
25 During the period from 22 to 30 January 2010 the Applicants paid the owner or operator of the Gap Ridge Village and the Searipple Village a daily fee for the accommodation of each of their employees in those villages.
Motelling
26 Until February 2010, Gap Ridge Village accommodated construction workers in single occupancy en-suite accommodation units. These accommodation units were occupied by construction workers, including some of the Respondents, on a 'dedicated' basis i.e. over the course of their work on the Project for a particular applicant, the Respondent would occupy the same particular accommodation unit during their rostered periods of work.
27 At pre-start meetings on 27 November 2009, the applicants' representatives informed their employees (who were in attendance at those meetings), including many of the Respondents, that, with effect from 4 January 2010, Woodside intended to introduce new accommodation arrangements for employees residing at Gap Ridge Village.
28 Under these new arrangements, construction workers who resided at Gap Ridge Village would no longer have use of the same accommodation unit for each period that they were rostered to work. Instead, they would be assigned a new accommodation unit each time they returned to Gap Ridge Village for a rostered period of work ("Accommodation Changes").
December 2009 dispute
29 On 1 and 2 December 2010 many of the then employees including some of the Respondents who were rostered to work failed to present for work. The absence was not authorised or agreed to by the applicants who were their relevant employers.
30 On 2 December 2009, Deputy President McCarthy of [FWA] made an order under section 418 of the FW Act requiring employees of the first applicant to return to work. The order was to remain in force until 18 January 2010.
31 All construction workers on the Project returned to work on 3 December 2009.
32 During the period 3 December 2009 to 21 January 2010, the Respondents attended work as rostered.
33 On 21 January 2010, [FWWP] delivered a letter entitled 'Subject: Acknowledgement Forms and availability of accommodation at Gap Ridge Village' ([FWWP] Letter) to between 150 and 400 Respondents on the Project who resided at Gap Ridge Village. The [FWWP] Letter concerned the introduction of the Accommodation Changes.
January 2010 dispute
34 On 22, 23, 25, 27, 28, 29 and 30 January 2010, each Respondent failed to attend for work on one or more days on which they were rostered to work, for either the whole or part of their rostered shift.
35 [The schedule to the orders now made by the Court] set out the days on which each Respondent was rostered to work and whether he or she was absent for the whole or part of their shift. Where a Respondent was absent for up to 4 hours of their rostered shift, he or she has been designated as being absent for half a day. Where a Respondent was absent for 4 hours or more of their rostered shift, he or she has been designated as being absent for a full day.
36 In each case, the absence specified in [the schedule to the orders now made by the Court] was not authorised or agreed to by any of the applicants.
37 Between 22 January 2010 and 30 January 2010 inclusive, there was no protected action ballot and no notice of intention to take protected industrial action by the Respondents or any relevant union in relation to the work at the Project.
38 Each Respondent engaged in:
(a) industrial action within the meaning of s.19 of the FW Act; and
(b) building industrial action within the meaning of s.36(1) of the BCII Act
in respect of each day (or part thereof) on which they were absent from work as specified in [the schedule to the orders now made by the Court].
Fair Work Proceedings
39 On 23 January 2010, all applicants and others except the thirteenth applicant applied to [FWA] under section 418 of the FW Act for orders that the Respondents return to work (Application).
40 A copy of the Application was served on the CFMEU, the CEPU and the AMWU by email.
41 A hearing was held before Commissioner Cloghan of [FWA] on 23 January 2010. The hearing was attended by representatives of the applicants, the intervener, the CFMEU, the CEPU and the AMWU.
42 At the conclusion of the hearing on 23 January 2010, Commissioner Cloghan made an interim order under section 420 of the FW Act, known as the Woodside Pluto LNG Project 2009 No. 2 Order (Interim Order).
43 The Interim Order was validly made, and was published on the [FWA] website on Monday 25 January 2010 at 1.40pm AWST in accordance with s.601 of the FW Act. Service of the Interim Order was effected in accordance with the requirements of the Interim Order and the FW Act.
44 Following the making of the Interim Order, certain Respondents continued to fail to attend for work on one or more days on which they were rostered to work, for either the whole or part of their rostered shift as set out in paragraph 35 of this statement of agreed facts.
Federal Court proceedings
45 The applicants commenced this proceeding on 27 January 2010.
46 On 27 January 2010, Justice McKerracher granted an interim injunction which was expressed to operate until 5.00 pm on 5 February 2010.
47 On 5 February 2010, Justice McKerracher extended the interim injunction until 5.00 pm on 18 February 2010.
48 On 18 February 2010, Justice McKerracher further extended the interim injunction until final hearing and determination of the proceeding or further order.
Section 417 FW Act contravention
49 Each Respondent employed by:
(a) United Group Resources Pty Ltd (first applicant);
(b) AGC Industries Pty Ltd (second applicant);
(c) MAS Australasia Pty Ltd (third applicant);
(d) Downer EDI Engineering Power Pty Ltd (fourth applicant);
(e) Monadelphous Engineering Associates Pty Ltd (fifth applicant);
(f) Decmil Australia Pty Ltd (seventh applicant);
(g) PCH Group Ltd (tenth applicant); or
(h) RCR Power Pty Ltd (twelfth applicant)
contravened s.417 of the FW Act in respect of each day on which they took industrial action on 22, 23, 25, 27, 28, 29 and 30 January 2010.
Section 421 FW Act contravention
50 Each Respondent (other than those Respondents referred to in Attachments 2 and 5) contravened s.421 of the FW Act in respect of each day on which they took industrial action on 22, 23, 25, 27, 28, 29 and 30 January 2010.
BCII Act contravention
51 Each Respondent was motivated by one or more of the following purposes in respect of each day of industrial action taken by them on 22, 23, 25, 27, 28, 29 and 30 January 2010:
(a) supporting or advancing a claim against the applicants, alternatively against the applicant which was the Respondent's employer at the time, that motelling not be introduced; or
(b) disrupting the performance of work on the Project.
52 Accordingly, the industrial action taken by each Respondent on 22, 23, 25, 27, 28, 29 and 30 January 2010 was industrially-motivated action within the meaning of s.37(a) of the BCII Act.
53 The industrial action taken by each Respondent on 22, 23, 25, 27, 28, 29 and 30 January 2010:
(a) related to work that was regulated by a Commonwealth industrial instrument; and
(b) adversely affected each of the applicants in their capacity as building industry participants.
54 Accordingly, the industrial action taken by each Respondent on 22, 23, 25, 27, 28, 29 and 30 January 2010 was constitutionally-connected action within the meaning of s.36(1) of the BCII Act.
55 By reason of the facts and matters set out in paragraph 37 above, the industrial action taken by each Respondent on 22, 23, 25, 27, 28, 29 and 30 January 2010 was not excluded action within the meaning of s.36(1) of the BCII Act.
56 Each Respondent contravened s.38 of the BCII Act in respect of each day on which they took industrial action on 22, 23, 25, 27, 28, 29 and 30 January 2010.
57 Paragraphs 1 - 37, 39 - 48 and 51 of this statement are tendered pursuant to s.191 of the Evidence Act (Cth).
58 Paragraphs 38, 49 - 50 and 52 - 56 of this statement contain admissions by the Respondents, which admissions should be treated as though they were made in a points of defence filed on behalf of the relevant Respondents.
5 Notwithstanding the agreement of the parties to these sanctions including the nature and quantum of pecuniary penalties to be imposed, it is accepted by all parties that it is ultimately for the Court to determine what, if any, penalty should be imposed on the respondents.
6 Having regard to the list of factors collected by Kenny J who cited Branson, Sackville and Gyles JJ in Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 (at [51]) in White v Construction Forestry Mining and Energy Union [2011] FCA 192 (at [5])) it can be seen that:
(a) it is the responsibility of the Court to determine the appropriate penalty;
(b) determining the amount of penalty is not an exact science;
(c) within a permissible range the Court to acknowledge the particular figure cannot necessarily be said to be more appropriate than another;
(d) there is a public interest in promoting settlement of litigation, particularly where it is likely to be lengthy;
(e) the view of the regulator as a specialist body is a relevant but not determinative consideration;
(f) in determining whether the proposed penalty is appropriate, the Court examines all of the circumstances of the case; and
(g) where the parties have jointly proposed a penalty it would not be useful to investigate whether the Court would have arrived at that precise figure in the absence of agreement. The question is whether that figure in the Court's view is appropriate in the circumstances of the case. In answering that question, the Court will not reject the agreed figure simply because it would have been disposed to select some other figure. It would be appropriate if it is within the permissible range.
7 In Wotherspoon v Construction Forestry Mining and Energy Union [2010] FCA 111, Jessup J noted (at [8] and [27]) as follows:
8 The authorities make it clear that, notwithstanding the agreement of the parties to a particular proceeding, the determination of the correct penalty is a matter for the court. The court is not obliged to accept the parties' agreement; nor is it entitled to take the easy course of doing so without deliberation. However, the authorities also show that, where the parties have agreed on a penalty, the court should give weight to that agreement, and should generally give effect to it so long as the agreed penalty falls within the appropriate range, that is, so long as it may be described as neither manifestly inadequate nor manifestly excessive. See NW Frozen Foods Pty Ltd v Australian Competition and Consumer Commission (1996) 71 FCR 285, 291 and 298; Minister for Industry, Tourism and Resources v Mobil Oil Australia Pty Ltd [2004] FCAFC 72 at [51]; Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543, 553 [57] and 564 565 [129]. On any view, it will be necessary for the court in a case such as the present to acquaint itself with the facts of, and surrounding, the admitted contraventions and to derive from those facts an understanding of the extent and nature of the conduct of the respondents, and of the gravity of that conduct generally. Without putting itself in this position the court will not, in my assessment, be able to carry out the task committed to it in accordance with the authorities to which I have referred.
…
27 The touchstone by reference to which to approach the question whether the penalties agreed in the present case are either manifestly inadequate or manifestly excessive is that the penalties should pay "appropriate regard to the circumstances in which the contraventions have occurred and the need to sustain public confidence in the statutory regime which imposes the obligations.": Australian Ophthalmic Supplies Pty Ltd v McAlary Smith (2008) 165 FCR 560, 580 [91]: Construction, Forestry, Mining and Energy Union v Williams (2009) 262 ALR 417, 428. Although it is not the function of the court to substitute its own preferred penalties for those agreed by the parties, it is necessary for the court to come at least to a general view about the seriousness of the conduct involved in the admitted contraventions of s 38 of the BCII Act. Before doing so, I should say something about the parties' agreement of 22 September 2008, and about the schedule of proposed penalties upon which the applicant relied.
8 Factors the Court may also take into account in effectively approving or ratifying the agreement include the following:
(a) the Court must be satisfied that the penalties that have been agreed are appropriate in the circumstances of the case; and
(b) the public interest in promoting a settlement of litigation (see, for example, Mobile Oil Australia (at [51]) and in the context of industrial law, White (at [5]) per Kenny J and Wotherspoon (at [8] and [27]) per Jessup J).
9 In addition, the attitude of the ABCC as a regulator of the industry is also a relevant consideration (Hardwick v Australian Manufacturing Workers' Union (2010) 198 IR 312 per Gordon J (at [13])). The ABCC does not contend that the level of the penalties is inadequate. Its concern is with the suspension of them. It submits, and I accept, that:
(a) significant penalties are warranted in the case of each of the represented respondents having regard to the 'deliberate and calculated nature of the unlawful conduct' to which they admitted, the number of employees involved it the unlawful industrial action, the extent of the losses caused by the unlawful industrial action, the objects of the BCII and the FW Acts and the need for specific and (most importantly) general deterrence. It refers to Hadgkiss v Aldin (2007) 164 FCR 394 (at [60]-[66]) per Gilmour J, amongst other cases; and
(b) the penalties on which the applicants and the represented respondents have agreed fall within the permissible range.
10 As to the unrepresented respondents, the ABCC submits, and I accept, that the only relevant point of distinction is that while the former admitted their contraventions of the BCII and the FW Acts, the latter did not. However, the lateness of the represented respondents' admissions and the fact that the unrepresented respondents did not contest the evidence led by the applicants and the ABCC resulted in this point of distinction having little significance. The ABCC submits that the principle of parity should prevail indicating that a penalty in the same amount for both sets of respondents would be appropriate. I accept all these submissions.
11 The ABCC strongly opposes the suspension of the penalties. It points to the fact that the only case in which penalties imposed under s 49(1)(a) of the BCII Act have been suspended are Hadgkiss, referred to above and Stuart-Mahoney v Construction, Forestry, Mining and Energy Union (2008) 177 IR 61 per Tracey J and Stuart v LU Simon Builders Pty Ltd [2009] FCA 107 per Marshall J. I will consider these arguments in detail below.
12 A contravention of industrial laws may now be regarded more seriously than has been the case in the past as noted by Merkel J in Finance Sector Union of Australia v Commonwealth Bank of Australia (2005) 147 IR 462 (at [72]). These observations were endorsed by the Full Court in Plancor Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2008) 171 FCR 357 (at [62]) per Branson and Lander JJ.
13 In Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (No 2) [2010] FCA 977, Barker J noted that the task with which a sentencing judge was faced was one of 'instinctive synthesis' as that expression has been used on a number of occasions. His Honour's approach was upheld by the Full Court (North, McKerracher and Jagot JJ) in McDonald v Australian Building and Construction Commissioner [2011] FCAFC 29.
14 The represented respondents submit and I accept that the authorities show that a non-exhaustive range of factors may be relevant in assessing the appropriate penalty in the circumstances of a particular case and include:
1. the nature and extent of the contravening conduct;
2. the circumstances in which the conduct took place;
3. the period of the conduct;
4. the nature and extent of any loss or damage sustained as a result of the conduct;
5. whether the contraventions were distinct or arose out of the one course of conduct;
6. whether or not the breaches were deliberate;
7. whether senior management was involved in the conduct;
8. whether there has been any contrition exhibited;
9. whether the party committing the breach has taken any corrective action;
10. whether the party committing the breach has cooperated with the prosecutor;
11. whether there has been similar previous conduct by the respondent;
12. the size of the business enterprise involved; and
13. the need for general and specific deterrence.
15 Some caution is required in adopting a check list approach because doing so is counter intuitive to the process of 'instinctive synthesis': see Buchanan J in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560 (at [91]).
16 The present case is unique with an unprecedented number of individual respondents the subject of enforcement proceedings for breaches of industrial laws. All of the represented respondents have made admissions as to their contravening conduct as part of a settlement with the moving parties - the applicants. Those admissions have saved significant Court time and resources. The admissions have promoted the important policy central to all modern litigation that parties be encouraged so far as possible to resolve their disputes in such a way as to minimise recourse to the adversarial system. It is argued, therefore, that considerable weight should be accorded to two central themes. The first of these is the resolution effected between the primary litigating parties and the second is the caution with which any position adopted by the intervener may be permitted to give rise to an outcome inconsistent with that resolution unless there is a compelling basis to do so.
17 It is contended for the represented respondents that the totality of the proposed orders warrants consideration in its entirety. In particular, the represented respondents point to the fact that the duration and nature of the permanent injunction agreed to by each represented respondent is highly significant. A period of seven years restraint covering work to be performed or potentially performed at either of the three very substantial LNG operations in Western Australia is a significant remedy. They submit that the legitimacy of a suspension of the agreed pecuniary penalties is reinforced by the terms of the proposed final injunction. A particularly compelling reason to order suspension in this case, it is argued, is that suspension will promote specific and general deterrence.
18 By s 545(1) of the FW Act, this Court is empowered to, if it be satisfied that a person has contravened a civil remedy provision to make any order that the Court considers appropriate. The generality of that power is not derogated from by particular examples of its exercise enumerated under s 545(2). Further, s 546(1) confers a more specific power upon an applicable court where it is satisfied that a person has contravened a civil remedy provision, to order a person to pay a pecuniary penalty that the Court considers is appropriate. Maximum penalties have been provided for in s 546(2). Those penalties qualify the general express language of s 546(1).
19 In the present circumstances, there is nothing, taken in context or with regard to the purpose of the FW Act, which would militate against a construction of s 545 that would exclude a power to suspend a pecuniary penalty notwithstanding the width of the language employed. If anything, the express purpose of the FW Act as enacted in s 3 and the purpose necessarily implicit in Ch 4 (namely, to enable eligible courts to enforce applicable industrial standards with outcomes that are fair and just), further reinforces that the literal meaning of s 545 is in fact the legal meaning.
20 It is agreed by the primary litigating parties including the ABCC, that the sanctions for imposition on the represented respondents are within a range that would have been fairly open to the Court had the question of penalty been contested. They are neither manifestly excessive nor manifestly inadequate. It is argued, and I accept, that it is in the interests of justice for the Court to endorse the primary litigating parties' resolution by imposing sanctions consistently with the terms of the settlement reached.
21 The ABCC makes the point that the overriding principle is to ensure that the sentence is proportionate to the gravity of the contravening conduct: Attorney-General v Tichy (1982) 30 SASR 84 (at 92-93) per Wells J. As discussed by Lander J in Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 (at [93]-[94]), the purpose is to be served by the imposition of penalties are:
(a) punishment, which must be proportionate to the offence and in accordance with the prevailing standards;
(b) deterrence, both personal (assessing the risk of reoffending) and general (a deterrent to others might be likely to offend); and
(c) rehabilitation.
22 In relation to the statutory scheme, the ABCC stresses that the object of the legislation will be relevant when assessing the appropriateness of any penalty to be imposed against the respondents. In this regard, it points to s 3(1) of the BCII Act which provides that the main object of the Act:
is to provide an improved workplace relations framework for building work to ensure that such work is carried fairly, efficiently and productively for the benefit of all building industry participants and for the benefit of the Australian economy as a whole.
(Woodside Burrup Pty Ltd v Construction, Forestry, Mining and Energy Union [2011] FCA 949 (at [21]-[22] per Gilmour J).
23 The BCII Act aims to achieve that object by the means set out in s 3(2). Those include promoting respect for the rule of law and ensuring that building industry participants are accountable for their unlawful conduct.
24 In the Second Reading Speech of the BCII Act it was stated that industrial action:
negatively impacts on industry productivity. Industrial unrest and time lost through work stoppages cause immediate loss to head contractors, subcontractors and employees … This Bill seeks to implement a framework where unlawful industrial action is not tolerated and those taking such action are brought to account for their lawlessness.
25 In assessing the gravity of the conduct, ABCC submits that regard should be had to the:
(a) obvious consequences that the unlawful industrial action would have had considering the economic significance of such a large scale resources project to the Australian economy as explained by Mr Milne in his affidavit;
(b) the seriousness of the unlawful industrial action having regard, particularly, to its unprecedented scale and the resultant disruption caused to the construction of the Project;
(c) circumstances of aggravation of the respondents' conduct as demonstrated by their continuance of the unlawful industrial action for five days in defiance of the Fair Work order and introduction of issues during the unlawful industrial action unrelated to motelling;
(d) the prolonged period of the unlawful industrial action, being seven days from 22 to 30 January 2010;
(e) the fact that many of the respondents took action in relation to the same issues at the same Project on 1 and/or 2 December 2010;
(f) the fact that the respondents' conduct in all instances was deliberate and in complete disregard to the objectives of the BCII Act;
(g) the fact that some of the respondents are not first time contraveners of the BCII Act;
(h) the impact that the respondents' unlawful conduct had, not only on the operations of the employer but also on follow on trades that were subsequently delayed from performing their work as a result of the unlawful industrial action;
(i) the lack of any evidence of union or third party involvement or encouragement in the unlawful industrial action;
(j) the need for general deterrence;
(k) the need for specific deterrence; and
(l) the failure of the respondents to acknowledge their 'guilt'. In the case of the unrepresented respondents, this is so at all and in the case of the represented respondents, it was not until the late stages of the proceeding, almost two years after the proceeding was commenced and when the hearing of the trial was about to proceed that admissions were made. Indeed, seven hearing dates were required in September 2011 resulting in the parties incurring significant costs that would not have been incurred had the respondents made the admissions as to liability at a much earlier stage.
26 The ABCC points to a list of issues including 11 claims made by respondent who are employees of the first, second, third, fourth and twelfth applicants on 27 and 28 January 2010.
27 The ABCC submits that the Court should infer from the claims included in that list of issues that one or more of those claims amounts to the advancement of claims by respondents employed by applicants to whom the list of issues were issued in respect of the employment of those respondents and the unlawful industrial action was also 'industrially motivated' for the purposes of s 36 of the BCII Act by the list of issues. I pause to observe that that finding has already been made. The list of issues was presented to the applicants four days before the end of the unlawful industrial action. As such, the ABCC submits that given there is no evidence that any of the applicants met the demands made by the respondents it should be inferred that a reason for the continuation of the unlawful industrial action past 27 January 2010 was the applicants' refusal to heed the claims included in the list of issues. The framework of the BCII Act and the FW Act make it plain that it is simply unlawful to take industrial action in support of such claims prior to the nominal expiry date of the particular industrial instruments. The presentation of the list of issues was an opportunistic attempt by those respondents to make demands of their employers in circumstances where they were not entitled to do so under either the BCII Act or the FW Act. The ABCC argues that the issuing of the list of issues to certain applicants was designed to have the effect of placing additional pressure on them to accede to the demands of the respondents if they wanted unlawful industrial action to cease. In addition to their defiance of the Fair Work order, those respondents disregarded their lawful obligations to comply with the BCII Act and the FW Act by presenting that list of issues to certain of the applicants part way through the unlawful industrial action. The ABCC contends this factor ought be weighed heavily in favour of imposing an immediate penalty rather than a suspended penalty, so as to achieve the necessary objectives of general and specific deterrence.
28 The ABCC relies upon an affidavit of Mr Ian Douglas Fraser which refers to two episodes of prior industrial action in which some of the respondents were involved. There were approximately 735 respondents involved in one of those incidents. The first of those episodes was the industrial action that was the subject of Gilmour J's decision in Woodside where the applicant brought proceedings against the CFMEU and Mr McDonald for their unlawful involvement in the industrial action at the Project on 1 and 2 December 2009.
29 The ABCC also points to the evidence of industrial action engaged in by employees of CBI Constructors Pty Ltd during construction phase five of the expansion project in a LNG gas plant that neighbours the Project between 14 and 28 October 2008 (the Phase V strike). The Phase V strike was the subject of a decision of Gilmour J in CBI Construction Pty Ltd v Abbott [2008] FCA 1629 in which the respondents contravened s 38 of the BCII Act by engaging in unlawful industrial action. Fifty-one of the respondents in the proceeding were found to have contravened s 38 of the BCII Act and s 496 of the WR Act which was the predecessor provision to s 421 of the FW Act by engaging in the Phase V strike.
30 It is clear, submits the ABCC, that many of the respondents have previously engaged in industrial action and at least 51 of the respondents are not first time contraveners of the BCII Act or provisions akin to s 421 of the FW Act. They should not, therefore, it is submitted, be treated as first time offenders.
31 Insofar as prior relevant conduct is concerned, the ABCC relies upon the judgment of Barker J in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2010) 187 FCR 293 (the City Square Case) in which the agreed principles of prior conduct to be taken into account in assessing penalty, namely:
(a) Similar prior conduct may be taken into account in assessing penalty, but it cannot be given such weight as to lead to the imposition of a penalty that is disproportionate to the gravity of the instant contravention: Veen v R (No 2) (1988) 164 CLR 465 (at 477).
(b) Similar previous conduct may demonstrate that a 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. Previous contraventions may demonstrate that the respondent has manifested in the commission of the latest contravention a continuing attitude of disobedience of the law. In such a case, ' retribution, deterrence and protection of society may all indicate that a more severe penalty is warranted': Veen (at 477).
(c) A sentencing court looks to the general record of the offender, his or her attitude to the law as disclosed by such conduct, apparent attempts at retribution and similar considerations. Repeated conduct of a particular kind may lead to an indentified need to provide some particularly persuasive form of deterrent against similar future conduct: Temple v Powell (2008) 169 FCR 169 (at [64] per Dowsett J.
(d) A respondent is not to be punished again for the prior conduct. Prior conduct may diminish leniency by reason of good character, having an upward affect on penalty, albeit within the proper limits indicated by the circumstances of the immediately contravening conduct: R v McInerney (1986) 42 SASR 111 (at 113).
(e) The character of the conduct and its relevance to the industrial behaviour which the instant legislation seeks to address is determinative, not whether the prior conduct arose under different legislation or different provisions of the instant legislation: Stuart-Mahoney (at [44]-[46]).
32 Insofar as deterrence is concerned, the ABCC points to the large scale of the industrial action the subject of the case and the widespread publicity that it attracted. It argues that those circumstances render general deterrence and extremely important consideration in the assessment of the appropriate penalty. The general deterrence is directed to ensuring that the penalty will act as a deterrent to others who might be likely to act unlawfully. It should be of the kind that it would be likely to act as a deterrent in preventing similar contraventions by likeminded persons. If it does not demonstrate an appropriate assessment of the seriousness of the offending, the penalty will not operate to deter others from contravening the relevant provision: Gordon (1994) 71 A Crim R 549.
33 The ABCC submits that for the penalty to achieve the two aspects of deterrence, specific and general, 'it must be imposed at a meaningful level consistent with the other considerations that must be taken into account in determining the appropriate level of penalty'. There is a need to show 'the seriousness with which the Court considers such contraventions': Australian Competition and Consumer Commission (ACCC) v IPM Operation and Maintenance Loy Yang Pty Ltd (No 2)[2007] FCA 11 per Young J (at [66]).
34 Insofar as post-contravention conduct is concerned, any contrition, corrective conduct or cooperation with relevant enforcement authorities after the contravention will have relevance to penalty. Contrition may manifest itself in an expression of remorse. The ABCC submits that there is no evidence of any contrition or remorse in these proceedings.
35 Cooperation, on the other hand, can be exhibited in a range of ways such as agreement on facts or agreement on penalty. The timing of any such agreement and the impact it has on the conduct of the trial and witnesses who would have been called at trial are relevant: Stuart-Mahoney (at [52]).
36 It is in this context that the ABCC stresses the lateness of the agreement reached. From this it follows that there should be a very limited discount to the respondents for their admissions and no discount for the unrepresented respondents who have at all times avoided the Court's processes and failed to respond to the proceeding.
37 Moreover, the ABCC submits that the respondents' conduct in the case forms part of a course of conduct for the purposes of s 36(3)(b) of the BCII Act. This amounts to each respondent having committed one act of unlawful industrial action in contravention of s 38 of the BCII Act, for which the maximum penalty is $22,000 and one contravention of s 421 of the FW Act for which the maximum penalty is $6,600: Hadgkiss v Aldin (at [76]).
38 Insofar as the totality principle is concerned, as a final check on the appropriateness of the penalties to be imposed, it is necessary to see whether the overall penalty is just and appropriate in the circumstances. The penalty which is fixed must be appropriate for each individual contravention and then as a check at the end of the process, it must be determined whether the aggregate is appropriate for the total contravening conduct: McDonald v R (1994) 48 FCR 555 (at 556). The aggregate of penalty imposed must not be 'oppressive or crushing': Stuart-Mahoney (at [60]). Impecuniosity of any respondent has not been raised as an issue in the proceeding and should not, therefore, be taken into account in the assessment of penalty, according to the ABCC.
39 The ABCC contends that the application of the totality principle is compulsory, not discretionary. It is said that a court must give effect to the principle where more than one contravention has been established: Johnson v R (2004) 78 ALJR 616 (at [35]).
40 The aggregate of the agreed penalty is, for a respondent who engaged in the full seven day period of the unlawful industrial action and admitted to contravening s 38 of the BCII Act and s 421 of the FW Act, $8,500. For respondents who engaged in the unlawful industrial action for less than the maximum seven day period, it is proposed that the total penalty be reduced by $1,000 per day for the respondents who contravened s 38 of the BCII Act plus an additional $300 per day if the respondent also breached s 421 of the FW Act.
41 The ABCC says, and I accept, that on a proper application of the totality principle, the total amount of the penalties is appropriate and within the permissible range being neither manifestly excessive or manifestly inadequate having regard to the conduct in question taking into account the respondents' prior relevant conduct.