FEDERAL COURT OF AUSTRALIA Employment Advocate v Barclay Mowlem Construction Limited [2005] FCA 431 INDUSTRIAL LAW – Workplace Relations Act 1996 (Cth) – Part XA Freedom of Association – fixing of penalty following breach – matters to be considered – inferences to be drawn from particular evidence Workplace Relations Act 1996 (Cth) s 298K, s 298U, s 298V, s 356 Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) (1999) 94 IR 231 applied Weissensteiner v R (1993) 178 CLR 217 cited NIGEL HADGKISS ACTING AS DELEGATE OF THE EMPLOYMENT ADVOCATE v BARCLAY MOWLEM CONSTRUCTION LIMITED ACN 009 830 460 NSD 2497 of 2003 BRANSON J 19 APRIL 2005 SYDNEY IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2497 of 2003 BETWEEN: NIGEL HADGKISS ACTING AS DELEGATE OF THE EMPLOYMENT ADVOCATE APPLICANT AND: BARCLAY MOWLEM CONSTRUCTION LIMITED ACN 009 830 460 RESPONDENT JUDGE: BRANSON J DATE OF ORDER: 19 APRIL 2005 WHERE MADE: SYDNEY THE COURT ORDERS THAT: 1. A penalty of $6000 be imposed on the respondent for contravening s 298K(2)(d) of the Workplace Relations Act 1996 (Cth) by refusing on or about 29 November 2002 to engage Robson Excavations Pty Limited as an independent contractor. 2. The penalty referred to in par [1] hereof be paid into the Consolidated Revenue Fund within twenty‑eight days of the date of these orders. 3. The proceeding be otherwise dismissed. IN THE FEDERAL COURT OF AUSTRALIA NEW SOUTH WALES DISTRICT REGISTRY NSD 2497 of 2003 BETWEEN: NIGEL HADGKISS ACTING AS DELEGATE OF THE EMPLOYMENT ADVOCATE APPLICANT AND: BARCLAY MOWLEM CONSTRUCTION LIMITED ACN 009 830 460 RESPONDENT JUDGE: BRANSON J DATE: 19 APRIL 2005 PLACE: SYDNEY REASONS FOR JUDGMENT INTRODUCTION 1 On 20 January 2005 I published reasons for judgment in which I concluded that the respondent had engaged in conduct in contravention of Part XA of the Workplace Relations Act 1996 (Cth) ('the Act'). I found that on or about 29 November 2002 the respondent had refused to engage a subcontractor, namely Robson Excavations Pty Limited ('Robsons'), and that the respondent was to be presumed to have engaged in that conduct for a prohibited reason within the meaning of s 298K of the Act. 2 I have now heard submissions from the parties on the question of the order or orders, if any, that it is appropriate in all of the circumstances of the case for the Court to make. For the reasons set out below I have concluded that it should be ordered that the respondent pay a penalty of $6000. Section 298U 3 Section 298U of the Act, which is contained within Part XA, relevantly provides: 'In respect of conduct in contravention of this Part, the Court may, if the Court considers it appropriate in all the circumstances of the case, make one or more of the following orders: (a) an order imposing on a person or industrial association whose conduct contravened or is contravening the provision in question a penalty of not more than: (i) in the case of a body corporate—$10,000; or (ii) in any other case—$2,000; ….' Appropriate Approach 4 In Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No 2) [1999] FCA 1714; 94 IR 231 ('CFMEU v Coal & Allied Operations Pty Ltd (No 2)') at [7]‑[8] I observed: 'The Act gives no explicit guidance as to the circumstances in which an order imposing a penalty under s 298U of the Act will be appropriate or as to the circumstances in which a penalty of or near the maximum, or alternatively of a lesser amount, may be called for. The Court is simply directed to consider what is appropriate in all the circumstances of the case. The following matters, which are not intended to comprise an exhaustive list, seem to me to be considerations to which the Court may appropriately have regard in determining whether particular conduct calls for the imposition of a penalty, and assuming that it does, the amount of the penalty: (a) The circumstances in which the relevant conduct took place (including whether the conduct was undertaken in deliberate defiance or disregard of the Act); (b) Whether the respondent has previously been found to have engaged in conduct in contravention of Part XA of the Act; (c) Where more than one contravention of Part XA is involved, whether the various contraventions are properly seen as distinct or whether they arise out of the one course of conduct; (d) The consequences of the conduct found to be in contravention of Part XA of the Act; (e) The need, in the circumstances, for the protection of industrial freedom of association; and (f) The need, in the circumstances, for deterrence.' 5 The parties accept that the matters to which I referred in CFMEU v Coal & Allied Operations Pty Ltd (No 2) are appropriate for consideration in the circumstances of this case. Submissions 6 The only order sought by the applicant under s 298U of the Act was an order imposing a penalty under par 298U(a). The applicant submitted that the appropriate penalty was $10 000 or a sum close to $10 000. He supported this submission by references to the substantial nature of the subcontract involved, the failure of the respondent to advance any explanation for its conduct, the respondent's defence of the proceeding, its failure to demonstrate contrition or remorse and the need for general deterrence. 7 The respondent submitted that it was not open to the Court to conclude that the contravention of the Act had involved a deliberate breach of the Act. It also submitted that it has not been shown that the offending conduct had serious consequences for Robsons. Rather, it was submitted, the only available conclusion was that the conduct had no practical consequences. The respondent contended that either no penalty should be imposed or, alternatively, any penalty imposed should be at the lower end of the scale of possible penalties. consideration 8 At [52] of my earlier reasons for judgment I drew the inference that on, or shortly before, 29 November 2002 a decision was made by an officer of the respondent authorised to make such a decision that Robsons was not to be engaged as a subcontractor on the Gosford project. The respondent chose to defend the proceeding brought against it by the applicant without calling evidence from any person able to give evidence about how the respondent's decision 'to go with the contractor from a previous alliance' was reached (see [19]‑[25] of my earlier judgment). No evidence was led by the respondent as to the significance of the note made by Mr Murphy that is referred to at [21] of those reasons for judgment. 9 I reject the submission of the respondent that because the officer of the respondent whose conduct constituted the contravention has not been identified nothing can be inferred about what motivated him or her. First, the presumption created by s 298V of the Act operates for the purpose of this proceeding and thus, in my view, operates for the purpose of determining the appropriate order or orders to be made under s 298U of the Act. Secondly, I see no reason to conclude that the identity of the relevant person is not known to the respondent or that he or she could not have been called to give evidence on behalf of the respondent. Consequently any doubt about inferences available to be drawn from the evidence referred to in [19]‑[25] of my earlier judgment may more readily be discounted (Weissensteiner v R (1993) 178 CLR 217 per Mason CJ, Deane and Dawson JJ at 227). I infer from the evidence referred to at [19]‑[25] of my earlier judgment that the officer of the respondent whose conduct constituted the contravention was motivated by concerns about the industrial instruments to which Robsons was, or proposed to be, a party. 10 I also reject the submission made by the respondent that I should conclude that the Robsons tender would in any event have been rejected as not being the lowest tender. I am satisfied that it is more likely than not that, absent concerns within the respondent about the industrial instruments to which Robsons was, or proposed to be, a party, a recommendation would have been made to Mr Munnings that he approve acceptance of a tender of Robsons and that he would have done so (see [15]‑[37] of my earlier reasons for judgment). 11 No suggestion has been made that the respondent has previously been found to have engaged in conduct in contravention of Part XA of the Act. 12 No evidence has been placed before the Court as to the impact of the contravention of Part XA of the Act on Robsons. I therefore make no assumption that Robsons suffered financial harm as a result of the contravention. It is possible that Robsons was able to enter into an alternative contract that was no less favourable financially than that which it would otherwise have entered into with the respondent. 13 In my view the contravention of Part XA of the Act established in the proceeding was a serious contravention. The imposition of a penalty is, I consider, appropriate. Moreover, the level of the penalty should be such as to constitute a deterrent against future contraventions of the same kind. No mitigating factors, such as contrition or proof of the implementation of management practices or training designed to avoid future contraventions of Part XA of the Act, have been established. conclusion 14 In all of the circumstances I consider it appropriate to make an order imposing on the respondent a penalty of $6000. Neither party made submissions as to the fund or organisation to which any penalty imposed should be paid. I therefore order, pursuant to s 356 of the Act, that the penalty imposed be paid into the Consolidated Revenue Fund within twenty‑eight days of the date of these orders. I certify that the preceding fourteen (14) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson. Associate: Dated: 19 April 2005 Counsel for the Applicant: J Fernon SC and R Bromwich Solicitor for the Applicant: Australian Government Solicitor Counsel for the Respondent: F Corsaro SC and I Neil Solicitor for the Respondent: Corrs Chambers Westgarth Date of Hearing: 9 March 2005 Date of Judgment: 19 April 2005