FEDERAL COURT OF AUSTRALIA Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 3) [2015] FCA 845 Citation: Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 3) [2015] FCA 845 Parties: DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION, ADAM OLSEN and KANE PEARSON File number: NTD 28 of 2013 Judge: MANSFIELD J Date of judgment: 14 August 2015 Date of hearing: 10 August 2015 Place: Adelaide Division: FAIR WORK DIVISION Category: No catchwords Number of paragraphs: 26 Counsel for the Applicant: Ms K Stewart Solicitors for the Applicant: Clayton Utz Counsel for the Respondents: Mr CW Dowling Solicitors for the Respondents: Hall Payne Lawyers IN THE FEDERAL COURT OF AUSTRALIA NORTHERN TERRITORY DISTRICT REGISTRY FAIR WORK DIVISION NTD 28 of 2013 BETWEEN: DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE Applicant AND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION First Respondent ADAM OLSEN Second Respondent KANE PEARSON Third Respondent JUDGE: MANSFIELD J DATE OF ORDER: 14 AUGUST 2015 WHERE MADE: ADELAIDE THE COURT ORDERS THAT: 1. The Second Respondent, Kane Pearson, pay a pecuniary penalty pursuant to s 546 of the Fair Work Act 2009 (Cth) for the contravention of s 500 of the Fair Work Act 2009 (Cth) in respect of which declaratory orders were made on 22 April 2015 by Order 1 in the sum of $6,000 to the Commonwealth. 2. The Third Respondent, Adam Olsen, pay a pecuniary penalty pursuant to s 546 of the Fair Work Act 2009 (Cth) for the contravention of s 500 of the Fair Work Act 2009 (Cth) in respect of which declaratory orders were made on 22 April 2015 by Order 3 in the sum of $4,600 to the Commonwealth. 3. The First Respondent, the Construction, Forestry, Mining and Energy Union, pay a pecuniary penalty pursuant to s 546 of the Fair Work Act 2009 (Cth) for the contravention of s 348 of the Fair Work Act 2009 (Cth) in respect of which declaratory orders were made on 22 April 2015 by Order 4 in the sum of $35,000 to the Commonwealth. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011. IN THE FEDERAL COURT OF AUSTRALIA NORTHERN TERRITORY DISTRICT REGISTRY FAIR WORK DIVISION NTD 28 of 2013 BETWEEN: DIRECTOR OF THE FAIR WORK BUILDING INDUSTRY INSPECTORATE Applicant AND: CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION First Respondent ADAM OLSEN Second Respondent KANE PEARSON Third Respondent JUDGE: MANSFIELD J DATE: 14 AUGUST 2015 PLACE: ADELAIDE REASONS FOR JUDGMENT 1 On 22 April 2015, the Court made declaratory orders to the following effect: (1) By his conduct on 17 and 19 June 2013, the second respondent, Kane Pearson, contravened s 500 of the Fair Work Act 2009 (Cth) (the FW Act) by acting in an improper manner at the "Central Apartments" project located at 108 Mitchell Street, Darwin, Northern Territory (the Site) in that, while exercising rights of entry under the FW Act: (a) Pearson purported to exercise rights, which rights he did not have, under occupational health and safety legislation; and (b) Pearson organised or took action against Reday Pty Ltd (Reday) with the intent to coerce Reday to pay a fee to the first respondent, the Construction, Forestry, Mining and Energy Union (the Union), being the payment of membership fees to the Union on behalf of Reday employees; (2) By his conduct on 26 June 2013, the third respondent, Adam Olsen, contravened s 348 of the FW Act, in that he organised or took action against Reday with the intent to coerce Reday to pay a fee to the Union, being the payment of membership fees to the Union on behalf of Reday employees; (3) By his conduct on 26 June 2013, Olsen contravened s 500 of the FW Act by acting in an improper manner at the Site in that, while exercising rights of entry under the FW Act, he organised or took action against Reday with the intent to coerce Reday to pay a fee to the Union, being the payment of membership fees to the Union on behalf of Reday employees; and (4) As the result of the conduct of Pearson and Olsen on 19 and 26 June 2013, the Union contravened s 348 of the FW Act. 2 Those orders were made following the judgment published in the matter on 13 March 2015, after a contested hearing: Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 199. This judgment deals with the imposition of pecuniary penalties upon each of Pearson, Olsen and the Union as a result of those contraventions. The maximum penalties available for contraventions of ss 348 and 500 of the FW Act are $51,000 (300 penalty units) in the case of a body corporate, and $10,200 (60 penalty units) in the case of an individual. It is accepted that the Union is a body corporate by operation of s 24 of the Fair Work (Registered Organisations) Act 2009 (Cth). Section 4AA of the Crimes Act 1914 (Cth) defined a penalty unit as $170 at the relevant time. 3 These reasons for judgment are to be read together with the reasons for judgment in the first decision, as it is not necessary to repeat in detail the findings there recorded. 4 The general principles in assessing an appropriate financial penalty or penalties in circumstances such as the present are well established: Director of the Fair Work Building Industry Inspectorate v Cartledge [2014] FCA 1047 at [50]. The task facing the Court is one of "instinctive synthesis": Markarian v The Queen (2005) 228 CLR 357 at [37]. 5 There have been cases setting out a number of the considerations which are, or may be, relevant to the assessment of the appropriate penalties. It is not necessary to set them out. The parties shared a focus on the relevant considerations for this particular matter, and I shall discuss them below. It is also common ground that, in circumstances such as the present, the purposes for imposing penalties for breaches of ss 348 and 500 of the FW Act are firstly to impose a penalty for punishment that is proportionate to the offence and in accordance with prevailing standards: Hoare v The Queen (1989) 167 CLR 348 at 354, and secondly, in doing so, to consider and recognise the need for both specific or personal, and general, deterrence: Ponzio v B & P Caelli Constructions Pty Ltd (2007) 158 FCR 543 at [93]. The third purpose of rehabilitation was not the focus of any submissions. 6 The only contentious issue in the submissions of counsel for the parties (other than as to the appropriate pecuniary penalty for each contravention) concerned the question of whether Olsen should have separate and cumulative pecuniary penalties imposed upon him for his contraventions of ss 348 and 500 of the FW Act. Counsel for the Director sought a pecuniary penalty first to be assessed in respect of the contravention of s 348, and secondly but cumulatively (subject to any issue arising from the application of the totality principle), for his contravention of s 500 of the FW Act. Counsel for Olsen submitted that it was more appropriate to impose first a penalty for the contravention of s 500, and that once that had been done, it would be inappropriate to impose any additional penalty for the contravention of s 348. It was common ground that the contravention of s 500 involved additional factual elements, namely that Olsen was a permit holder to qualify him for entry onto the Site, and that he entered the Site pursuant to that permit, although his conduct thereafter meant that he did not in fact exercise his rights of entry for their purpose but for an improper purpose. The improper purpose, as the declaratory orders record, was the intention to take, and the taking of, action against Reday with the intention of coercing Reday to pay union dues to the Union as membership fees on behalf of its employees. As is apparent, that element of the offence is the conduct which itself constituted the contravention of s 348. 7 It was common ground between counsel that, in the particular circumstances, Olsen's contravention of s 500 was more serious than his contravention of s 348, simply because the contravention of s 500 involved the additional unlawful element of entry pursuant to a permit without being confined to exercising the rights which the entry permitted, because he did engage in the conduct which itself contravened s 348. 8 In my view, the appropriate course is to address and determine first the pecuniary penalty appropriate to the contravention for s 500 in the particular circumstances. That is because it is necessary to take into account the quality of the conduct which was engaged in beyond the conduct authorised by the entry permit, that is, the conduct which constituted the contravention of s 348, to determine, in the circumstances, the pecuniary penalty for the contravention of s 500. The nature of the conduct not authorised by the entry permit will reflect the seriousness of that contravening conduct. Then, because that conduct will have been taken into account in determining the appropriate penalty for the contravention of s 500, I do not intend to impose an additional penalty for the contravention of s 348. Consequently, no issue as to the proper application of the totality principle will apply. There will be no element of double punishment: Stuart v Construction, Forestry, Mining and Energy Union (2010) 185 FCR 308 at [82]-[83] per Besanko and Gordon JJ. In criminal sentencing, it is of course common to impose sentences for each offence, and then to direct the sentences to be served concurrently where much the same conduct constituted the separate offences. That is not available where the penalty imposed is a fine. In such circumstances, the totality principle ensures that the aggregate of the fines is appropriate or enables the imposition of an aggregate fine for all related contraventions: see eg, R v Brown (1982) 5 A Crim R 404; Budget Nursery Pty Ltd v Commissioner of Taxation (1989) 42 A Crim R 81 at 86. 9 I note that neither s 348 nor s 500 are civil remedy provisions for the purposes of the application of s 557 of the FW Act. 10 In my view, the course I propose to adopt is in accordance with the approach of Gilmour J in Fair Work Ombudsman v Offshore Marine Services Pty Ltd (2012) 219 IR 435 at [7]-[8]. 11 I also bear in mind, as counsel for the respondents contended, that the maximum penalty provided should be reserved for the worst type of cases falling within the relevant prohibition: Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union [2012] FCA 189 at [23]. 12 I turn to consider the separate contraventions. 13 Pearson's contravening conduct took place on 17 and 19 June 2013. It is described in detail in the primary judgment. I do not repeat what there appears. The general picture is that he, and others of the Union largely under his direction or leadership, entered the Site not for the legitimate purpose or the legitimate exercise of their right of entry but to indicate the extent to which the Union could, if so minded, disrupt the efficient progress of a building site: see the primary judgment at [103]. That conduct was part of a process to support the threat made to Reday on 19 June 2013 either to procure its employees on the Site to join the Union, or to pay membership fees to the Union of behalf of its employees. It was a serious departure from the conduct which the right of entry permitted. It involved not simply Pearson himself, but Pearson as the leader of a group of the Union employees, supported by the Divisional Branch Secretary, Ravbar. 14 Ravbar was the Divisional Branch Secretary of the Queensland branch of the Union, and was present with a team of Union officials and employees, including Pearson. He was the Assistant Secretary of the Union's Construction and General Division, Queensland Builders Labourers Federation Provisional Branch. 15 I note that the conduct was of relatively short duration, and had limited impact upon work at the Site. I note further that there is no established quantifiable economic loss or damage suffered by Reday as a result of that contravention. 16 I take into account that Pearson was a responsible officer of the Union. He set the example and the tone for the conduct which followed (with at least the acquiescence of Ravbar). He has not expressed any contrition for his conduct, and did not cooperate in the investigation of his conduct. I accept, on the other hand, that the conduct of the trial is not itself a factor relevant to the determination of the appropriate pecuniary penalty. I did not understand the Director to be submitting to the contrary. 17 There are, in effect, no factors to mitigate or tending to reduce the penalty that would otherwise be appropriate to impose upon Pearson. Indeed, his previous contraventions of similar provisions of the FW Act or its ancestors, noted in the submissions, do not provide any warrant for reduction of what would otherwise be an appropriate pecuniary penalty by reason of his character, his attitude to the conduct of which he has been found to have contravened the FW Act, or in other respects. 18 In the circumstances, whilst it is clearly not near the worst of the type of case which s 500 might be seen to contemplate, I consider that a significant pecuniary penalty should be imposed upon him. In my view, the appropriate pecuniary penalty is $6,000. 19 In the case of Olsen, the circumstances are a little different. Again, the offending conduct included not simply the exercise of the right of entry under the Right of Entry Notices which were issued, but the entry then was not only to consult with employees of Reday who were, or eligible to be, members of the Union but for the extraneous and improper purpose of securing, if possible, Reday to pay membership fees to the Union on behalf of its employees. That was accompanied by communications which suggested that, or implied that, the failure to do so would mean that in the future unlawful economic pressure might be brought upon Reday. That conduct was coercive and intended to operate, at a practical level, so as to present a high degree of compulsion on Reday: see primary judgment at [102]. 20 I note that Olsen was not an officer of the Union, but in the circumstances, he attended the Site and spoke to Michael Milatos on behalf of the Union, asserting by his conduct the implied threats to secure an improper objective. That was well beyond the rights afforded to him as a permit holder. He too should have a substantial penalty imposed upon him. 21 He too, has demonstrated no contrition, and has a prior record of a contravention of comparable provisions. His conduct, like that of Pearson's, indicates an attitude of indifference to compliance with the requirements of the FW Act relating to rights of entry. 22 In my view, the appropriate pecuniary penalty in this case is somewhat less than that applicable to Pearson, simply because it did not include the disruptive behaviour that Pearson, and others under his supervision, carried out earlier in the preceding week. I consider that a pecuniary penalty of $4,600 should be imposed on him. 23 The conduct of the Union, amounting to a contravention of s 348 of the FW Act incorporates the conduct of both Pearson and Olsen. As the findings record, the conference of the Union in Darwin, at least substantially, was intended to operate as a vehicle for seeking additional membership of the Union in Darwin, and from the beginning involved the visitation of a number of sites including the Reday Site. As I have found, both Pearson and Olsen entered the Site under their entry permits for purposes which were not confined to, and which largely extended beyond, the authorised purposes. Their conduct confirms that. The Union is accountable for that conduct. Moreover, the conference, as it was called, was under the supervision of Ravbar as the Queensland Branch Secretary of the Union and he at least permitted the conduct of Pearson on 17 and 19 June 2013. 24 As with Pearson and Olsen, there is no suggestion of penitence, corrective action, or cooperation in the investigation by the Director. There is clearly, as other judges have recorded, a strong record of non-compliance on the part of the Union through its officers with provisions of industrial relations legislation, although that does not mean that a disproportionate penalty can or should be imposed. I note that significant past penalties have not caused the Union to alter its apparent attitude to compliance with the entry provisions and restrictions under the FW Act. 25 There is clearly an ongoing need for an order to be made for a pecuniary penalty which has a deterrent effect upon the Union and signals to others who may consider engaging in such conduct or like conduct that it is inappropriate to do so. In my view, in the circumstances, the appropriate pecuniary penalty to impose on the Union is $35,000. 26 The Court therefore orders: (1) Pearson pay a pecuniary penalty of $6,000. (2) Olsen pay a pecuniary penalty of $4,600. (3) The Union pay a pecuniary penalty of $35,000. In each case the penalty should be paid to the Commonwealth, as authorised by s 546(3)(a) of the FW Act. I certify that the preceding twenty-six (26) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Mansfield. Associate: Dated: 14 August 2015