FEDERAL COURT OF AUSTRALIA Finance Sector Union of Australia v Australia & New Zealand Banking Group Limited [2002] FCA 1035 INDUSTRIAL LAW – Freedom of association – Penalty. FINANCE SECTOR UNION OF AUSTRALIA v AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED N1512 OF 2001 WILCOX J 23 AUGUST 2002 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N1512 OF 2001 BETWEEN: FINANCE SECTOR UNION OF AUSTRALIA APPLICANT AND: AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED RESPONDENT JUDGE: WILCOX J DATE OF ORDER: 23 AUGUST 2002 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. Pecuniary penalties in the sum of two thousand five hundred dollars ($2,500) be imposed upon the respondent, Australia & New Zealand Banking Group Limited, in respect of each of the following contraventions of the Workplace Relations Act 1996: (i) A contravention of s 170MU(1) of the said Act by requiring an employee, Joy Buckland, to attend counselling on 25 September 2001; (ii) A contravention of s 298K(1) of the said Act by the same conduct; (iii) A contravention of s 170MU(1) of the said Act by delivering to Ms Buckland a warning letter on 5 October 2001; (iv) A contravention of s 298K(1) of the said Act by the same conduct. 2. Within 28 days the said respondent pay the total of the said penalties, ten thousand dollars ($10,000), to the applicant, Finance Sector Union of Australia. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N1512 OF 2001 BETWEEN: FINANCE SECTOR UNION OF AUSTRALIA APPLICANT AND: AUSTRALIA & NEW ZEALAND BANKING GROUP LIMITED RESPONDENT JUDGE: WILCOX J DATE: 23 AUGUST 2002 PLACE: SYDNEY REASONS FOR JUDGMENT ON PENALTY WILCOX J: 1 On 17 May 2002 I published Reasons for Judgment (see [2002] FCA 631) which contained findings on the question whether the respondent, Australia & New Zealand Banking Group Limited ("the Bank"), had infringed s 170MU(1), s 298K(1) and/or s 298M of the Workplace Relations Act 1996 ("the Act"). I held the Bank infringed both s 170MU(1) and s 298K(1) (but not s 298M) in relation to two items of conduct: the counselling, on 25 September 2001, of Joy Buckland and the delivery to her, on 5 October 2001, of a formal warning letter. Pursuant to a request made by counsel, I did not immediately deal with the question of penalty. I directed written submissions on this topic. They have been received and considered. 2 Ms C Howell, counsel for the applicant, Finance Sector Union of Australia ("FSU"), correctly says the respondent has been found to have twice breached each of s 170MU(1) and s 298K(1) of the Act, so there is a total of four statutory breaches. Each attracts a maximum penalty of $10,000: see s 170NF(2) and s 298U(a) of the Act. However, she accepts the "totality principle" applies, the four breaches each arising out of a single course of conduct. Finkelstein J discussed that principle, in relation to breaches of the Act, in CPSU, the Community and Public Sector Union v Telstra Corporation Limited [2001] FCA 1364; 108 IR 228 at para 7. He suggested that, in cases where a penalty is only pecuniary, as distinct from cases where it is necessary to impose a term of imprisonment, the court ought "to resolve upon the appropriate total penalty dividing that penalty by the number of individual contraventions and record that amount as the penalty for each contravention, whether or not the sum produced might be regarded as an inappropriate individual penalty". 3 If I adopt that course, as I think I should, the total available penalty is $40,000. However, it would be inappropriate to impose penalties totalling a sum of that order of magnitude. 4 Five considerations impel me to that opinion. First, as the breaches all arose out of the one course of action, it would be excessive to impose a maximum penalty, or anything like it, four times over. Second, the breaches, though significant, are not the worst imaginable breaches of s 170MU(1) and s 298K(1). Although the actions taken by the Bank had a natural tendency to inhibit the conduct of Ms Buckland (and perhaps other FSU officers and members) in relation to engaging in future protected industrial action, and being or remaining an FSU officer or member, those actions were not the most drastic actions that could have been taken. Ms Buckland was formally counselled and warned, but she was not dismissed or demoted. Third, Mr H Dixon SC and Mr J Tuck, counsel for the Bank, submitted I should take into account the fact that one of the circumstances in which the conduct took place was the difficulty in the personal relationship between Ms Buckland and Mr Inglis; a difficulty to which Ms Buckland made some contribution. This would clearly provide no defence to a claim of contravention but it is, I think, something to be taken account in determining the appropriate penalty. Fourth, the Bank was prepared, in earlier times, reasonably to accommodate Ms Buckland's need to take leave from work in order to carry out her official FSU duties. Finally, it seems this is the first occasion on which the Bank has been held to have transgressed s 170MU(1) or s 298K(1) of the Act or any of their predecessor provisions. 5 The listed considerations omit two factors urged on me by counsel for the Bank. The first of those factors fastened upon the statements in my earlier Reasons that "Mr Inglis' knowledge of industrial matters struck me as sparse and his attitude to them simplistic and naďve" and he "harbours attitudes that seem almost unbelievably unrealistic and unfair". After mentioning these statements, counsel said: "It is submitted that the relevant conduct took place in circumstances which cannot be construed to be in deliberate defiance or disregard for the protection afforded under the Act but rather were a reflection of the industrial inexperience of Mr Inglis the relevant manager and the difficult relationship that existed between him and Ms Buckland." 6 This submission overlooks two matters. First, it reflects poorly upon the Bank's training regime that, with this degree of ignorance and those attitudes, Mr Inglis had achieved promotion, at the date of the trial, to a point where he had responsibility for some 150 subordinate employees. It is not acceptable for senior management to put an unsuitable or insufficiently trained person into a position where he or she is responsible for employer-employee relationships, on a day to day basis, and then attempt to shrug off responsibility for the results of such unsuitability or insufficiency of training. 7 Second, the submission takes no account of the fact that Mr Inglis' actions were supported by specialist and senior officers. On 27 August 2001 Mr Inglis told Ms Buckland that he proposed to contact the Bank's Human Resources Department. On 30 August he advised her that she was required to attend a formal meeting, involving himself and a representative of that Department, on 25 September. During the intervening three working days, Mr Inglis presumably consulted the Human Resources Department. There was every opportunity for consideration of the facts of the case. Having regard to Ms Stanley's presence at the 25 September meeting, it may be inferred that she, or someone else from her Department, was involved in the decision to require Ms Buckland to submit to a counselling meeting. There is nothing in the minute of that meeting, which was taken by Ms Stanley, to suggest otherwise than that she fully supported the views expressed by Mr Inglis at that meeting. Indeed the minute records Ms Stanley as emphasising that Ms Buckland "has an obligation as a manager to ensure the branch opened (as) requested by management". As I explained in para 151 of my earlier Reasons, this was code for saying that Ms Buckland had an obligation to prefer the interests of the Bank to her right to take protected industrial action. 8 As to the letter of 5 October, the evidence is that this was settled in the Bank's head office in Melbourne. It is not possible to regard the terms of that letter – which were conceded on 14 December to require "clarification" to reduce the threat to Ms Buckland – as being the product of Mr Inglis' naivety or personal attitudes; on the contrary, the letter represented the position of the Bank at executive level. 9 The other factor mentioned by counsel for the Bank was contrition. In their written submissions on penalty, counsel said: "We are instructed by the respondent that it severely (sic) regrets the events giving rise to the breaches and that measures are being taken to prevent a recurrence". Counsel did not identify those measures. 10 Repentance always gladdens the heart. However, in this case it comes rather late. Notwithstanding the detailed affidavit evidence filed on behalf of the applicant, the Bank chose to defend this case, vigorously and by senior and junior counsel, on the basis that it had done nothing wrong. Only after that defence failed was there any statement of regret at the Bank's conduct. Whether that regret has been conveyed personally to Ms Buckland or to FSU, I do not know. 11 It would be wrong for me to disregard counsel's intimation of regret. However, under the circumstances, I think it ought to be given little weight. 12 Notwithstanding the five considerations listed in para 4 above, and the expression of regret, this is a case for imposition of a pecuniary penalty. The breaches of the Act were significant. It is possible that those responsible for the Bank's actions did not appreciate they constituted infringements of the Act, but they ought to have done so. In a situation that required care and restraint, senior officers of the Bank deliberately did things that, on any objective basis, were unwarranted and unfair to Ms Buckland. They gave effect to an attitude that Ms Buckland's rights as a person and union officer were of secondary importance to the Bank's corporate and financial interests. 13 I agree with Ms Howell that the Bank's conduct "went to the heart of the rights to be protected under the Act". The right of freedom of association has always been protected under Commonwealth industrial law. As Ms Howell says, the freedom to join and actively participate in industrial activities is frustrated "if employees are not free to articulate their dissatisfaction with respect to work related matters, both as between themselves and through media". 14 Having regard to these matters, it is appropriate to impose upon the Bank more than a nominal penalty. I think the appropriate total penalty is $10,000. Following the course suggested by Finkelstein J in CPSU, I will distribute that sum evenly between the four breaches. I do this regardless of my view that $2,500 would probably be an insufficient penalty if complaint had been made of only one breach of the Act. 15 Ms Howell seeks an order under s 356(b) of the Act that any penalty be paid to the applicant, FSU. It is not unusual for such an order to be made in favour of a registered organisation that has successfully prosecuted a claim for a monetary penalty for breach of the Act: see the discussion by Moore J in Schanka v Employment National (Administration) Pty Limited [2001] FCA 1623; 110 IR 97 at paras 77-87. 16 In CPSU Finkelstein suggested that such an order should not be made if it is likely to result in a "windfall to the organisation". I am not sure I agree with that; the rationale of the practice is that it tends to encourage a "common informer" to police the relevant legislation: see Vehicle Builders' Employees' Federation of Australia v General Motors-Holden Pty Ltd(1977) 32 FLR 100 at 113. That rationale is likely to be defeated if the common informer is not to be allowed to make a profit. 17 However, it is unnecessary to pursue the point. As in Schanka, it is inconceivable that the costs incurred by the applicant in connection with the proceeding are less than the amount of the penalty. 18 In respect of each breach of the Act, I propose to impose a pecuniary penalty in the sum of $2,500 and to order that the amount of the penalty be paid directly to the applicant. I certify that the preceding eighteen (18) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Wilcox. Associate: Dated: 23 August 2002 Counsel for the Applicant: Ms C Howell Solicitor for the Applicant: Turner Freeman Counsel for the Respondent: Mr H J Dixon SC and Mr J Tuck Solicitor for the Respondent: Freehills Date of Hearing: 25-27 March, 22 April 2002 Date of Main Judgment: 17 May 2002 Date of Submissions on Costs: June 2002 Date of Judgment on Costs: 23 August 2002