FEDERAL COURT OF AUSTRALIA Hadgkiss v Blevin [2004] FCA 917 INDUSTRIAL LAW – Workplace Relations Act 1996 (Cth) – Part XA Freedom of Association – fixing of penalty following breach – compensation to dissenting employee – refund of Union fees Workplace Relations Act 1996 (Cth) ss 298U(a) and (c) and 329 Construction, Forestry, Mining and Energy Union v Coal and Allied Operations Pty Limited (No 2) (1999) 94 IR 231 NIGEL HADGKISS AS DELEGATE OF THE EMPLOYMENT ADVOCATE v ALAN BLEVIN, JOSEPH McGAHAN AND CONSTRUCTION FORESTRY MINING AND ENERGY UNION N 414 OF 2003 CONTI J 13 JULY 2004 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY N 414 OF 2003 BETWEEN: NIGEL HADGKISS AS DELEGATE OF THE EMPLOYMENT ADVOCATE APPLICANT AND: ALAN BLEVIN FIRST RESPONDENT JOSEPH McGAHAN SECOND RESPONDENT CONSTRUCTION FORESTRY MINING AND ENERGY UNION THIRD RESPONDENT JUDGE: CONTI J DATE OF ORDER: 13 JULY 2004 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. The first respondent pay the applicant a penalty of $1,100.00 in respect of conduct in contravention of Part XA of the Workplace Relations Act 1996 (Cth) ('the Act'). 2. The second respondent pay the applicant a penalty of $1,100.00 in respect of conduct in contravention of Part XA of the Act. 3. The third respondent pay the applicant a penalty of $5,500.00 in respect of conduct in contravention of Part XA of the Act. 4. The third respondent pay Bakkante Constructions Pty Ltd the sum of $193.63. 5. The first, second and third respondent pay Mr Conrado de los Reyes jointly and severally the sum of $1.093.43. 6. Each sum in orders 1-5 is to be paid by bank cheque to the Australian Government Solicitor for subsequent remission to the respective parties entitled thereto. 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 N 414 OF 2003 BETWEEN: NIGEL HADGKISS AS DELEGATE OF THE EMPLOYMENT ADVOCATE APPLICANT AND: ALAN BLEVIN FIRST RESPONDENT JOSEPH McGAHAN SECOND RESPONDENT CONSTRUCTION FORESTRY MINING AND ENERGY UNION THIRD RESPONDENT JUDGE: CONTI J DATE: 13 JULY 2004 PLACE: SYDNEY REASONS FOR JUDGMENT ON PENALTY 1 In my reasons for judgment on the principal issues arising in the proceedings delivered on 1 June 2004, I found that the applicant had established its case for contravention on the part of the first respondent ('Mr Blevin') and of the second respondent ('Mr McGahan'), and consequently on the part of the third respondent ('the Union') whom they purportedly represented in particular capacities, in each case in breach of the Workplace Relations Act 1996 (Cth) ('the Act'). I stood over for further hearing the making of orders as to penalty, and as to payment of compensation to Mr de los Reyes, pursuant respectively to subss 298U(a) and (c) of the Act. 2 Section 329 of the Act stipulates that in relation to legal proceedings for contraventions of Part XA of the Act, no order as to payment of one party's legal costs and disbursements by the other can be imposed, other than in the limited circumstance of proceedings instituted vexatiously or without reasonable cause. 3 For the purpose of determining whether orders should be made in the present proceedings for the imposition of penalties and/or compensation adversely to the respondents, I received comprehensive written submissions from the legal representatives for both parties, upon which oral submissions were subsequently made. I have been referred in that context by the parties to the guidelines of principle formulated by Branson J in Construction, Forestry, Mining and Energy Union v Coal and Allied Operations Pty Limited (No 2) (1999) 94 IR 231, and to a number of other authorities relating to costs orders in proceedings for statutory contravention, not only in relation to the Act, but also to the Trade Practices Act 1974 (Cth). It is apparent from those authorities that factors such as deliberate defiance or disregard of the requirements and prohibitions of the Act, the need for protection of freedom of industrial association, and deterrence as to breaches generally, may be taken into consideration, as well as any deliberate or intentional nature of the conduct complained of. 4 My adverse findings made against both Mr Blevin and Mr McGahan are set out in summary in [154-172]. Those findings, and the earlier findings made in those reasons for judgment, demonstrate serious breaches of the Act, in relation to which there were no mitigating circumstances, either in favour of Mr Blevin or Mr McGahan, or the Union which they purportedly represented at the material times. There has been no apology of any kind tendered to Mr de los Reyes or his employer Bakkante Constructions Pty Ltd, whether in the light of my conclusions in the proceedings or otherwise. As I indicated in [161] of my reasons for judgment, the Union has of course an important function to discharge in relation to on-site safety precautions, as well as in relation to exploitation of employees and contractors by unscrupulous operators engaged in the building industry. In the present case, it is a matter of profound regret that two of its experienced office bearers knowingly chose to conduct themselves in the manner and to the extent which I have found myself obliged to find, and for the reasons I have established. 5 The Union has submitted that it has been already, and will be further, penalised in effect by legal costs paid or payable to its lawyers, and that in addition, it has sustained 'significant' costs by way of the time and effort input of its senior legal officer. That is an irrelevant consideration, in the light of the adverse findings I have already made in the principal proceedings. Indeed were it not for the terms of s 329 of the Act, an order for payment of the applicant's legal costs would have been inevitably ordered by the Court against the Union, as well as Messrs Blevin and McGahan, in the light of my findings and conclusions, on the basis that legal orders costs of legal proceedings should normally follow the event or outcome. 6 Moreover it is not to be overlooked that the Union chose to raise what might be described as a number of issues collateral to the principal issues as to statutory contravention, being issues which took up not an insignificant amount of the time of the Court, and thus occasioned not insignificant legal and related costs to the applicant, being issues which were substantially resolved adversely to the Union. Apart from the preceding interlocutory proceedings identified in [21] of my reasons for judgment, in relation to which the Union was unsuccessful, the Union raised issues for resolution as to the applicants' locus standi, the purported withdrawal of their defences, the constituent basis of the Union and whether it should have been joined as a respondent to the proceedings in the first place, and the employee or other representative status of Mr Blevin and Mr McGahan in relation to the Union. 7 A matter raised collaterally by the Union, in the context of the proceedings convened to address issues as to penalty, following upon my delivery of reasons for judgment, concerned the alleged absence of workers compensation insurance held by Mr de los Reyes' private family company (Phoenix), which had employed him as a cleaner, inferentially for fiscal considerations. An application was thereby made to the Court that he be reported to the appropriate authority for that apparent infraction of workers compensation law; I say apparent, because the evidence on that essentially irrelevant matter was not entirely clear (see for instance [116(iv)] of my reasons for judgment of 1 June 2004). 8 The Union further submitted that I made no finding that the breaches I established adversely to Mr Blevin were either 'deliberate' or 'trivial' or 'merely technical', and that indeed the breaches were 'at worst a trivial or purely technical breach'. It suffices to say that the submission is substantially at odds with my very detailed findings summarised in [154]-[172] of my reasons for judgment, which carry relatively serious implications as to the industrial conduct of the respondents. The contraventions on the part of both Mr Blevin and Mr McGahan personally constituted serious offences against the Act, targeting as they did Mr de los Reyes with a view to pressuring him to join the Union, at a time when he was in any event a member of another union with an inadequate command of English and in apparent need of work. As my reasons for judgment sufficiently indicate, that activity achieved its objective. Having said that, my judgment is that the breaches committed are probably appropriate to be ranked marginally above the middle of the scale of potential gravity, and in reaching that assessment, I have taken into account in particular the absence of any previous similar contraventions of the Act on the part of either Mr Blevin and Mr McGahan having been brought to my attention. 9 In the circumstances of my adverse findings against the Union and both Messrs Blevin and McGahan, I have reached the view that the appropriate penalties to be imposed should be placed marginally above the middle of the range of gravity implicit in s 329 of the Act, as follows: (i) against the Union in the sum of $5,500.00; and (ii) against each of Messrs Blevin and McGahan respectively in the sum of $1,100.00. 10 I further order that the Union compensate Bakkante Constructions Pty Ltd by the payment to it in the sum of $193.63 in respect of union dues or fees paid by it on behalf of Mr de los Reyes, such payment to be made within twenty-eight days. 11 I further order that the respondents jointly and severally reimburse Mr de los Reyes by payment in the sum of $1,090.43 in respect of his loss of wages. 12 I direct that payment of each of such amounts of penalty may be satisfied by remitting bank cheques for those respective amounts to the Australian Government Solicitor, for subsequent remission in turn to the respective parties entitled thereto. 13 The applicant has requested that I formally declare that Mr de los Reyes did not become a member of the Union by signing or submitting a membership card to the Union on or about 9 December 2002. I do not think that declaratory relief is appropriate. I refer in that regard to [155] of my earlier reasons for judgment. In any event, declaratory relief was not sought by the application, even if it might have been appropriate, which I do not think to be the case. I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Conti. Associate: Dated: 13 July 2004 Counsel for the Applicant: JJ Fernon SC Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: IC Latham Solicitor for the Respondent: Taylor & Scott Date of Hearing: 8 July 2004 Date of Judgment: 13 July 2004