White v Benstead & Ors [2011] FMCA 920

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

1. These proceedings were issued on 31 March 2010 seeking orders imposing pecuniary penalties on the third respondent, the Construction, Forestry, Mining and Energy Union ('CFMEU'), and the first and second respondents who are employees of the CFMEU for contravention of ss.500 and 503 of the Fair Work Act 2009 ('the FR Act').
2. On 14 August 2009 in early afternoon, two union officials, the first and second respondents, arrived at the front gates of the Preston Pump project site ('the site') where work was being carried on and had a conversation with the security guard who did not want to allow them onto the site. They pressed their way forward onto the site, despite not having given notice of entry and therefore, not having a right of entry to the site at that time.
3. The first and second respondents say that they had been contacted by employees on the site but I am not provided with any information as to what the specific purpose of the visit was or the complaint or request of their employees were. It seems to me in those circumstances, I should not proceed on the basis that the employees' request had some particular urgency that might, in some way, mitigate in the circumstances.
4. The issues between the site management and the union officials continued until eventually work was interrupted and the police were called. The police were advised by the union officials that they had a right to be on the site when they did not. The whole incident, however, did not last terribly long, and within half an hour of their arrival the two union officials were escorted off the site by the police.
5. Whist the matter has taken some time to come before me, the result of that has been an agreed statement of facts together with agreements between the parties as to what they submit are the appropriate penalties in the facts and circumstances of this particular case, having regard to the conduct of the legislative scheme as a whole and the general principles that apply in determining penalty in these types of circumstances.

1. The appropriate approach in these matters is to have regard to all of the relevant circumstances. There are certain areas which one would commonly turn to, to identify relevant matters to take into account. In Michelle White v Construction Forestry Mining and Energy Union [2011] FCA 192 Kenny J summarised the appropriate approach when looking at a case where there is agreement as to penalty saying as follows:
   • (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 courts have acknowledged that a particular figure cannot necessarily be said to be more appropriate than another;
   • (d) there is 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 will 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 will be appropriate if it is within the permissible range.
2. The parties have indicated a number of factors to address, from the cases. I note that checklists are intended as an aid, and that adopting an approach that simply applies a checklist can be confusing in some cases or overtake the primary task, which is to look at the whole of the circumstances in the context of the legislative instrument and strike an appropriate penalty for the particular conduct in this particular case involving these particular parties. To some extent, this was discussed in A & L Silvestri Pty Ltd v Construction, Forestry, Mining and Energy Union [2008] FCA 466 and Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith [2008] FCAFC 8; (2008) 165 FCR 560.
3. The parties submit that the appropriate penalty for the third respondent, the CFMEU, is $10,000, for the first respondent $2,000, and for the second respondent $1,000. The difference between the respondents lies in the fact that the first respondent hindered and obstructed whereas the second respondent simply made a misrepresentation as to their right to be on the site.
4. The scheme of the legislation is important and the legislation provides for permits for union officers to be able to issue notices and enter building sites. The industry concerned is a difficult industry involving very large numbers of workers and often people undertaking difficult work in difficult conditions such as building sites, and often people earning not high levels of remuneration. The importance of building sites being able to proceed in an organised and expeditious fashion is clear for the community's benefit as a whole, as they are involved in construction of infrastructure and it is also very important that the employees have appropriate representation in those large building sites and industries, to ensure that appropriate conditions as to terms and conditions of employment are in place.
5. In this regard, the breaches are serious in that they are a breach of a scheme that has been put in place to balance those various needs, and to provide for a right of entry to the site to speak to employees upon giving a notice of 24 hours. In this sense, it seems that the breaches were a flagrant breach of the legislation.
6. The individuals concerned have not been the subject of penalties imposed in the past, and there have not been prior findings against them. In this sense, it is a first breach of the Act at least before the courts. There is nothing to suggest that there is previous conduct of those individuals that I should take into account as telling against them.
7. There is no information before me as to the extent of their training or direction from the union. The union itself has an unenviable history before the courts, as was outlined by Tracey J recently in Alfred v Construction Forestry Mining and Energy Union [2011] FCA 556 where his Honour set out in paragraph [84]:
   • Notwithstanding the fact that the CFMEU is a large national organisation which is divided into a series of divisions and branches, it is notable that the branch involved in the present contraventions has caused the organisation to incur an overwhelmingly disproportionate amount in pecuniary penalties when compared with the other constituent elements of the organisation. The BCII Act commenced operation in 2005. Since then the CFMEU and its officials have been found, in 28 cases, to be liable for contraventions of that Act. Of these, 22 cases have involved the Victorian branch of the Construction and General Division of the union ("the branch"). Pecuniary penalties totalling $2,711,150 have been imposed on the CFMEU under the BCII Act. Of this sum $2,328,550 has been attributable to the unlawful activities of the branch. It is inconceivable that the national governing councils of the CFMEU were and are unaware of the significant misconduct of the branch and the detrimental consequences for its members. They are either unable or unwilling to curb the unlawful activities of the branch. Moreover, an earlier offence of the CFMEU is no less an offence by that corporate body because it was committed by a division or branch other than the one responsible for the contravention presently under consideration. As Jessup J observed in Williams v Construction, Forestry, Mining and Energy Union (No 2) [2009] FCA 548 at [20], "the deterrent effect of a penalty would be significantly compromised if the court were obliged to turn a blind eye to a prior contravention merely because it occurred in a different division or branch of an organisation." The CFMEU's deplorable record of contraventions of the BCII Act must rank as a significant consideration when fixing a penalty in the present proceedings. As his Honour pointed out, it is of note that there were 28 cases which his Honour identified for officials of the CFMEU being liable for breaches of the Building and Construction Industry Improvement Act 2005, yet 22 of those involved the Victorian Branch.
8. It seems to me that I must proceed on the basis that the CFMEU has a significant number of breaches of workplace legislation over several years. There does not appear to be any contrition involved in this case and there are no submissions as to any systems being put in place to attempt to ensure such breaches do not occur again. However, there has been co-operation to the extent that agreed facts were reached, a trial did not need to be held and agreed penalties were reached.
9. I have regard to the size of the industry and the fact that the union would be involved in very large numbers of workplaces, and involved with a very large numbers of employees across the state, and bearing in mind that whilst the numbers of cases appear high, that must be seen in the context of a large industry where the union is undertaking activities, it is likely on a daily basis in this arena.
10. I have regard to the maximum penalties that could be imposed upon the union, which is $33,000, and the individuals, which is $6,600. I take the view that this was one course of conduct.
11. I have reflected upon the fact that on one view of it, it was a flagrant breach and in the case of the union, by an organisation that has an unenviable history of breaches, which would be factors weighing in favour of a quite heavy penalty. I also must bear in mind, and it is appropriate to do so, that the particular breach in this case was, on its facts and circumstances, relatively modest. It involved only half of an hour, although it did involve wasting police officers' time having to attend and did involve waste of time on the job site. However, when seen in the context of the types of factual scenarios that are seen across the range of breaches that come before the courts, and many of those can be seen in the authorities relied upon or referred to by the counsel for the union, this must be seen at the lower end of the range of types of conduct.
12. I have reflected upon the sad reality that if I impose the penalties involved in this case, $10,000 for the union and $1,000 and $2,000 respectively for the individuals, ultimately, most of this money will be coming out of union funds which are provided by members contributing from their wages to maintain a union to promote their best interests. It is difficult to see that such expenses are incurred in the best interests of the union members, who are paying from their wages each week to run the union and have the union look after their interests.
13. However, it seems to me that is really a question for the union members, and the conduct of their organisation, and not of itself a relevant matter for me to take into account in determining the penalty in this particular case, or at least certainly not one that anybody suggests that I ought to take into account, and therefore I do not take that into account in this case.
14. Reflecting on the matter as a whole, I am ultimately persuaded that the penalties that are agreed upon by the parties are appropriately within the range and the appropriate penalties that should be imposed in this particular case.
15. I will therefore make orders in terms of the draft provided by the parties.

I certify that the preceding twenty (20) paragraphs are a true copy of the reasons for judgment of Riethmuller FM