FEDERAL COURT OF AUSTRALIA Furlong v Maxim Electrical Services (Aust) Pty Ltd (No 2) [2006] FCA 740 INDUSTRIAL LAW – payments in relation to periods of industrial action – breach admitted – penalty imposed in accordance with the agreement of the parties operating at arms length Workplace Relations Act 1996 (Cth) ss 84, 178 and 187AA Furlong v Maxim Electrical Services (Aust) Pty Ltd [2005] FCA 1518, considered Pine v Multiplex Constructions (Vic) Pty Ltd [2005] FCA 1428, followed MURRAY FURLONG v MAXIM ELECTRICAL SERVICES (AUST) PTY LTD (ACN 088 295 907), WALTER J PRATT LTD (ACN 004 714 989), COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA, DAVID MIER, MARK GRECH, MICHAEL DOUGLAS and MAXIM ELECTRICAL SERVICES (VIC) PTY LTD (ACN 088 037 290) VID 1580 OF 2004 MARSHALL J 14 JUNE 2006 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 1580 OF 2004 BETWEEN: MURRAY FURLONG APPLICANT AND: MAXIM ELECTRICAL SERVICES (AUST) PTY LTD (ACN 088 295 907) FIRST RESPONDENT WALTER J PRATT LTD (ACN 004 714 989) SECOND RESPONDENT COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA THIRD RESPONDENT DAVID MIER FOURTH RESPONDENT MARK GRECH FIFTH RESPONDENT MICHAEL DOUGLAS SIXTH RESPONDENT MAXIM ELECTRICAL SERVICES (VIC) PTY LTD (ACN 088 037 290) SEVENTH RESPONDENT JUDGE: MARSHALL J DATE OF ORDER: 14 JUNE 2006 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. A penalty of $1,750 be imposed on the seventh respondent for breach of s 187AA of the Workplace Relations Act 1996 (Cth). 2. The penalty so imposed be paid to the Consolidated Revenue Fund within 21 days. 3. It is declared that the seventh respondent committed a breach or non-observance of the Maxim Electrical Services Pty Ltd Enterprise Agreement 2000-2003 by failing to follow the steps detailed in cl 13 of the agreement. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 1580 OF 2004 BETWEEN: MURRAY FURLONG APPLICANT AND: MAXIM ELECTRICAL SERVICES (AUST) PTY LTD (ACN 088 295 907) FIRST RESPONDENT WALTER J PRATT LTD (ACN 004 714 989) SECOND RESPONDENT COMMUNICATIONS, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA THIRD RESPONDENT DAVID MIER FOURTH RESPONDENT MARK GRECH FIFTH RESPONDENT MICHAEL DOUGLAS SIXTH RESPONDENT MAXIM ELECTRICAL SERVICES (VIC) PTY LTD (ACN 088 037 290) SEVENTH RESPONDENT JUDGE: MARSHALL J DATE: 14 JUNE 2006 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 Earlier this morning, after hearing the submissions of counsel for the applicant and the seventh respondent, the Court announced that it would make the following orders and give reasons later this morning for making those orders. What follows are the Court's reasons for making the orders set out below: 1. A penalty of $1,750 be imposed on the seventh respondent for breach of s 187AA of the Workplace Relations Act 1996 (Cth). 2. The penalty so imposed be paid to the Consolidated Revenue Fund within 21 days. 3. It is declared that the seventh respondent committed a breach or non-observance of the Maxim Electrical Services Pty Ltd Enterprise Agreement 2000-2003 by failing to follow the steps detailed in cl 13 of the agreement. 2 At all material times, the applicant, Mr Furlong was an inspector appointed under s 84 of the Workplace Relations Act 1996 (Cth) and a person entitled to bring proceedings for breaches of ss 178 and 187AA of the Act. 3 The seventh respondent, Maxim Electrical Services (Vic) Pty Ltd admits to contravening s 187AA(1). Under that section it is unlawful for an employer, such as Maxim (Vic), to pay wages to an employee for a period during which the employee engages in industrial action. 4 As I said in a previous judgment in this proceeding concerning the second respondent in Furlong v Maxim Electrical Services (Aust) Pty Ltd [2005] FCA 1518 at [1]: "There is a real issue in this proceeding whether the relevant employees did engage in industrial action. That is yet to be determined." 5 Adapting what follows at [1] in the previous judgment to the current circumstances: "All I am currently required to do is to assess the appropriate penalty, if any, to be imposed on [Maxim (Vic)], on the basis of the agreed statement of facts advanced by it and the applicant, Mr Furlong." 6 Maxim (Vic) admits that it made payments to certain of its employees at a time when those employees were engaged in industrial action on 5 and 6 August 2003. Those payments totalled $2,056.83. 7 Maxim (Vic)'s usual policy concerning the payment of "strike pay" is that if employees withdraw their labour, and strike, they are not paid. However, on safety issues, it has abided by rulings of a Dispute Board, under the auspices of the certified agreement referred to at [9] below. 8 Mr Birkett, of Maxim (Vic), authorised the relevant payments because he did not then believe that the relevant employees had undertaken industrial action. 9 Since August 2003 Maxim (Vic) has taken the following steps concerning payment for periods of industrial action: · it has a policy of no payment for stoppages; · work stoppages are noted in site diaries and reviewed before payments are made; · no decision on payment is made until all information is available concerning the background circumstances and until after a report from site supervisors; · if site supervisors report facts and circumstances consistent with industrial action, Maxim (Vic) refuses to pay for the period of the stoppage and the dispute resolution procedure set out in the Maxim Electrical Services Pty Ltd Enterprise Agreement 2000 - 2003 is followed; and · if a stoppage results from a bonafide occupational health and safety issue, and the dispute resolution procedure in the agreement is followed, payment will be made in respect of the period of the stoppage. 10 Maxim (Vic) admits that it did not, on 5 and 6 August 2003, completely follow the steps contained in the dispute resolution clause in the certified agreement. 11 The facts and circumstances of this matter are not materially distinguishable from those referred to in the previous judgment in this proceeding, that is, Furlong v Maxim Electrical Services (Aust) Pty Ltd [2005] FCA 1518. As was the case with the contractor referred to in that judgment, the breaches of s 187AA and of the relevant agreement were inadvertent and unlikely to recur. No utility would ordinarily be served by imposing a penalty. However, the parties, operating at arms length and competently advised, consider that a penalty of $1,750 should be imposed. I see no good reason to depart from that agreement as the sum is not a significant one for the seventh respondent. I will impose the penalty for breach of the Act but not impose any additional penalty for breach of the certified agreement, in respect of which a declaration will be recorded. 12 For the sake of completeness, as I did in the previous judgment, I reiterate that in accepting that Maxim (Vic) breached the agreement I am not expressing any view about the conduct of the third respondent, the Union or any respondent other that Maxim (Vic). 13 At the directions hearing at which this aspect of the proceeding was programmed, counsel for the third to sixth respondents formally submitted that judgment against Maxim (Vic) should not be given at this stage. The submission was only formally advanced given my ruling at [10] to [13] in the previous judgment, in which I accepted the approach of Merkel J in Pine v Multiplex Constructions (Vic) Pty Ltd [2005] FCA 1428. I still adhere to that approach. Therefore there is no reason to withhold judgment concerning Maxim (Vic). I certify that the preceding thirteen (13) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall. Associate: Dated: 14 June 2006 Counsel for the Applicant: Mr P O'Grady Solicitor for the Applicant: Australian Government Solicitor Counsel for the Seventh Respondent: Mr J Twigg Solicitors for the Seventh Respondent: Giannokopoulos Solicitors Date of Hearing: 14 June 2006 Date of Judgment: 14 June 2006