Industrial Relations Commission of New South Wales in Court Session CITATION: Bluescope Steel (AIS) Ltd v AWU and Anor (No 2) [2005] NSWIRComm 210 PROSECUTOR Bluescope Steel (AIS) Ltd PARTIES: DEFENDANTS Australian Workers' Union, New South Wales Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch FILE NUMBER(S): IRC 3223 and 3226 of 2004 CORAM: Boland J CATCHWORDS: Industrial dispute - Contravention of dispute orders - Steel Industry - Dispute over outsourcing at steel mill - Relevant factors to be taken into account in determining penalty - Penalties imposed Industrial Relations Act 1996 LEGISLATION CITED: Workplace Relations Act 1996 (Cth) BHP Steel (AIS) Pty Ltd v CFMEU [2000] FCA 1908 Transport Workers Union of Australia v Glynburn Contractors (Salisbury) Pty Ltd (1991) 37 IR 313 CASES CITED: Bluescope Steel v AWU and Anor (2005) 138 IR 324 Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No. 2) (1999) 94 IR 231 Bluescope Steel (AIS) Pty Limited v The Australian Workers' Union, New South Wales (No 2) (2004) 136 IR 48 HEARING DATES: 05/13/2005 DATE OF JUDGMENT: 06/24/2005 PROSECUTOR Mr R Warren of counsel Solicitor: Mr D Lloyd BlakeDawsonWaldron LEGAL REPRESENTATIVES: DEFENDANTS AWU Mr A Hatcher of counsel Solicitor: Mr J Howard Maurice May & Co AFMEPKIU Mr I Morrison JUDGMENT: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES IN COURT SESSION CORAM: Boland J Friday 24 June 2005 Matter No IRC 3223 of 2004 BLUESCOPE STEEL (AIS) PTY LTD v AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION, NEW SOUTH WALES BRANCH v (No 2) Application by Bluescope Steel (AIS) Pty Ltd for summons to show cause under section 139 of the Industrial Relations Act 1996 Matter No IRC 3226 of 2004 BLUESCOPE STEEL (AIS) PTY LTD v THE AUSTRALIAN WORKERS' UNION (No 2) Application by Bluescope Steel (AIS) Pty Ltd for summons to show cause under section 139 of the Industrial Relations Act 1996 JUDGMENT [2005] NSWIRComm 210 1 In Bluescope Steel v AWU and Anor (2005) 138 IR 324, a judgment given on 5 April 2005, the Court gave its reasons for deciding that the Australian Workers' Union, New South Wales ("the AWU") had, pursuant to s 139 of the Industrial Relations Act 1996, contravened dispute orders and amended dispute orders made on 16 and 17 February 2004 in matter No IRC 423 of 2004 and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch ("the AFMEPKIU") had also contravened amended dispute orders made on 17 February 2004 in matter No IRC 423 of 2004. 2 This judgment concerns what action should be taken pursuant to s 139(3) of the Act in relation to the contraventions of the dispute orders and amended dispute orders. Whilst s 139(3) provides a number of options as to what the Court may do in relation to a contravention of a dispute order, Bluescope Steel (AIS) Pty Ltd ("the prosecutor") pressed for a penalty pursuant to s 139(3)(e). Section 139(4) of the Act sets out the maximum penalties that may be imposed as follows: (a) except as provided by paragraph (b)—a penalty not exceeding in total $10,000 for the first day the contravention occurs and an additional $5,000 for each subsequent day on which the contravention continues, or (b) if a penalty has previously been imposed on the industrial organisation or employer for a contravention of an earlier dispute order—a penalty not exceeding in total $20,000 for the first day the contravention occurs and an additional $10,000 for each subsequent day on which the contravention continues. 3 The Court's findings in relation to the contraventions are set out at [144] of its earlier judgment as follows: Matter No IRC 3226 of 2004 - Summons on the AWU 1 On 16 and 17 February 2004, the AWU and its officers and employees did not take all reasonable steps to ensure compliance with the dispute orders made on 16 February 2004 in contravention of order (ii) of the dispute orders made on 16 February 2004 in matter No IRC 423 of 2004. 2 Pursuant to s 139 of the Industrial Relations Act 1996, on 16 and 17 February 2004, the AWU contravened the dispute orders made on 16 February 2004 in matter No IRC 423 of 2004. 3 On 17 February 2004, the AWU and its officers and employees did not take all reasonable and necessary steps to ensure compliance with order 1 of the amended dispute orders made on 17 February 2004 in contravention of order 3 of the amended dispute orders made on 17 February 2004 in matter No IRC 423 of 2004. 4 On 17 February 2004, the AWU and its officers and employees did not immediately cease and refrain from organising, encouraging or inciting any industrial action contrary to order 1 of the amended dispute orders made on 17 February 2004 in contravention of order 2 of the amended dispute orders made on 17 February 2004 in matter No IRC 423 of 2004. 5 On 27 February 2004, the AWU, its officers and employees did not immediately cease or refrain from organising, encouraging or inciting any industrial action contrary to order 1 of the amended dispute orders made on 17 February 2004 in contravention of order 2 of the amended orders made on 17 February 2004 in matter No IRC 423 of 2004. 6 On 27 February 2004, the AWU and its officers and employees did not take all reasonable and necessary steps to ensure compliance with order 1 of the amended dispute orders made on 17 February 2004 in contravention of order 3 of the amended dispute orders made on 17 February 2004 in matter No IRC 423 of 2004. 7 Pursuant to s 139 of the Industrial Relations Act 1996, on 17 and 27 February 2004, the AWU contravened the amended dispute orders made on 17 February 2004 in matter No IRC 423 of 2004. Matter No. IRC 3223 of 2004 - Summons on the AFMEPKIU 1 On 17 February 2004, the AFMEPKIU and its officers and employees did not immediately cease and refrain from organising, encouraging or inciting any industrial action contrary to order 1 of the amended dispute orders made on 17 February 2004 in contravention of order 2 of the amended dispute orders made on 17 February 2004 in matter No IRC 423 of 2004. 2 Pursuant to s 139 of the Industrial Relations Act 1996, on 17 February 2004, the AFMEPKIU contravened the amended dispute orders made on 17 February 2004 in matter No IRC 423 of 2004. SUBMISSIONS OF THE PROSECUTOR 4 In relation to the contraventions by the AWU the prosecutor submitted monetary penalties should be imposed in the high range. It was submitted the case against the AWU was exacerbated by findings that its officials did not just fail to take all reasonable steps to ensure compliance with the dispute orders, but the officials positively organised, encouraged and incited its members to defy the dispute orders. It was found that the AWU had scant regard for the dispute orders and pursued a course of action that caused it to contravene the orders: see judgment on contravention at [120]. 5 It was submitted the contravention found on 16 February 2004 comprised the failure of Mr Gillespie, a senior official of the AWU, to take all reasonable steps to ensure compliance with the Commissioner's dispute orders ([107]) and that the conduct of Mr Gillespie included taking positive steps that had the effect of widening the industrial action ([106]). 6 Mr R Warren of counsel for the prosecutor submitted that in relation to the contraventions on 17 February 2004 by the AWU, they were: (i) the failure of Mr Gillespie to take all reasonable steps to ensure compliance with the Commissioner's dispute orders at a meeting of the AWU's (and AMWU's) members on the morning of 17 February 2004 ([113], [117] and [118]); (ii) the failure of Mr Gillespie and Mr Hancock, an official of the AWU, to cease and refrain from organising, encouraging or inciting industrial action in the afternoon of 17 February 2004 contrary to the Commissioner's amended dispute orders ([122], [134] and [136]); (iii) the failure of the AWU to take all reasonable and necessary steps to ensure compliance with the Commissioner's amended dispute orders ([144]). 7 On 27 February 2004 it was submitted the contraventions were: (i) the failure of Mr Gillespie and/or Mr Hancock to cease and refrain from organising, encouraging or inciting industrial action contrary to the Commissioner's amended dispute orders; and (ii) the failure of Mr Gillespie and/or Mr Hancock to take all reasonable and necessary steps to ensure compliance with the Commissioner's amended dispute orders. 8 Mr Warren submitted that in respect of the contravention by the AWU of the dispute order found to have occurred on 16 February, the maximum penalty applicable was $10,000. The further breach of that order on 17 February attracted a maximum penalty of $5,000. Further, it was submitted the contravention of the amended dispute order 3 on 17 February attracted a maximum penalty of $10,000 and the contravention of the amended dispute order 2 on 17 February, $10,000. In respect of the further contraventions of the amended dispute orders 2 and 3 on 27 February, the prosecutor submitted these attracted maximum penalties of $5,000 each. Accordingly, what the prosecutor submitted was that the total maximum penalty was $45,000. 9 As to the penalty to be imposed on the AFMEPKIU, the prosecutor submitted it should be in the mid-range of a maximum penalty of $10,000. Mr Warren submitted relevant to penalty was the finding that when the relevant official of the AFMEPKIU, Mr Phillips, was informed on 13 February 2004 that the work changes did not affect the AFMEPKIU's members, he did not challenge this nor did he inform the members of the situation at the time. The members of the AFMEPKIU were swept into the dispute due to the inaction of Mr Phillips ([68] and [133]). SUBMISSIONS OF THE AWU 10 The AWU's primary submission on penalty was that the Court should dismiss the matter under section 193(3)(a) on the basis that the circumstances were such that no action should be taken on the contravention. In the alternative, it was submitted any financial penalty imposed on the AWU ought be in the low range. As to the maximum available penalties, Mr Hatcher of counsel for the AWU submitted that only one maximum of $10,000 was applicable and that was in respect of the first contravention on 16 February. In respect of the other contraventions on 17 and 27 February the maximum applicable penalty in each case was $5,000. 11 In this respect, Mr Hatcher submitted: Our view is that the relevant maximum of 10,000 for the breach found to occur on the 16th, 5,000 on the 17th and 5,000 alone, and a further 5,000 on the 27th - now I say that for this reason that the provisions which my learned friend took you to at s 139(4), paragraph (a) applies here and set mandatory maximum penalties for contraventions of dispute orders. Now what Mr Warren was attempting to do today, which hasn't been apparent in the proceedings before, was to try and characterize these proceedings as involving two separate orders which would, as it were, allow the Act to be applied twice. We say that it is not available for a number of reasons. Firstly, it is clear, when one reads the decision of Connor C in relation to what he did on 17 February, that the Commissioner did not make new orders. He amended the existing orders. So what we have is a single order, albeit varied, on the 17th throughout the three relevant days on which the breach has been found. When one comes to the conclusion that there was a single order, which is clear from the material, then the statutory provisions apply and would not permit your Honour to approach the penalty in the way raised by my learned friend. We would add to that procedurally. This case proceeded by a single summons against my client. If we had received that summons as pleading breaches of two different orders, we would complain that it was duplicitous. But as we understood the proceedings, that's right from the time the summons was issued until now, it was on the basis that there was only one set of orders which was the subject in the summons. 12 In relation to 16 February Mr Hatcher submitted that, in essence, the contravention found by the Court consisted of a failure by Mr Gillespie at the meetings of members which occurred on 16 February 2004 to take a "stronger and more effective stand" and to put his recommendation for compliance with the dispute orders more "forcefully". In assessing the objective seriousness of the contravention found to have occurred, Mr Hatcher submitted the most significant consideration was that although the AWU had been found not to have taken all reasonable steps to achieve compliance with the dispute order, the AWU did take a number of significant steps to achieve compliance. In particular: (i) The AWU called a meeting of the affected employees at between 1.00 pm and 3.00pm [par 49 of the judgment]. This occurred after the orders were made (at about 12.45 pm) but before the orders were due to come into effect (at 3.00 pm). This was not a specific step required to be taken by the orders (as compared with the varied orders of 17 February 2004), and thus was taken at the initiative of the AWU. (ii) At that meeting, Mr Gillespie read the orders to the employees, explained their effect, recommended compliance with the orders, and told the employees that they were obliged to accept the Commission's direction and return to work [pars 37-38]. 13 It was submitted for the AWU it was also significant that whilst the Court has found that Mr Gillespie could have done more at the meeting, there was nothing in the evidence to suggest that if he had done so (for example, by issuing a direction), he would have been successful in achieving a return to work. Indeed, it was put the evidence was to the contrary: the Court has accepted that there was hostility amongst the employees at the meeting and that it was understandable that in those circumstances a union official might feel reluctant: [106]. This hostility extended to an attack on Mr Gillespie's integrity by the suggestion that he was "taking backhanders from the Company": [38]. This factor, it was submitted, made this case distinguishable from one in which there was a reasonable step available that would have achieved compliance with the order, but was not taken. 14 Mr Hatcher sought to compare the conduct of the AWU as found in this case to that found by the Federal Court (Beaumont J) in relation to the Construction, Forestry, Mining and Energy Union ("CFMEU") in BHP Steel (AIS) Pty Ltd v CFMEU [2000] FCA 1908. In that decision, which concerned the breach by the CFMEU of orders made under s 127 of the Workplace Relations Act 1996 (Cth), it was asserted the CFMEU was found to have taken no steps at all to comply with the relevant order, and had made no attempt to explain or to justify its failure in this regard. The penalties imposed amounted to $2,200 (out of a maximum of $10,000). In this case, it was submitted, where the AWU had demonstrated that it had taken steps to achieve compliance, and where the failure to achieve compliance was explicable by reference to the hostility of the members, the contravention involved was far less objectively serious. 15 Mr Hatcher submitted: Can I, for your Honour's benefit, deal with a range of different conducts as to where they would fall in terms of characterization, leaving aside the issue of Mr Hancock on the 17th? It is clear that the findings your Honour made against my client on the 16th and the 17th must be in relation to what was done or not done at the meeting with the members and later at the delegates meeting and that in terms of the wide coverage of the dispute it was the thrust of what happened. Now one constructs these serious scenarios that at the worst end you might have a union official who goes to a meeting and says, "Look, the Commission has issued orders. I order you to defy those orders. The strike will continue and we are not going to obey those orders", and the dispute continues and gets worsened. Below that there would be an official who attends a meeting after that and says nothing either way as to whether the orders should be complied or not complied with and that's a case of the union taking no steps at all to achieve compliance with the orders. Where we are, we are all below that. We went to the meeting, and your Honour has found that, although we didn't do everything that could have been done, it's clear that your Honour found that we did a number of things and at least made the employees at the meeting aware of the fact that the orders had been made by the Commission and made the employees aware of their contents, advised the employees and put before them in brief terms what the legal effect of the order is and at least to the first of those made a recommendation that those orders be complied with and at the delegates meeting I think your Honour found that my client put things further than that. So we say if one characterizes the range of categories which might arise in that way, it is clear that this case must fall within the low range and I think on that basis I think the Commission should not follow the indication that my friend has referred to. 16 Referring to the contraventions on 17 February counsel for the AWU submitted they rested on the following findings: (i) That at the meeting held at 7.00 am, Mr Gillespie was again insufficiently emphatic and forceful in the position which he conveyed to the meeting, and that the words he used when speaking to the meeting were not in the nature of a direction [pars 117-118]. (ii) That Mr Hancock had encouraged a group of employees to take industrial action at about 4.00 pm [par 122]. (iii) That the organisation of the mass meeting for the morning of 18 February 2004 at the delegates meeting held on the evening of 17 February constituted a contravention [par 134]. 17 In relation to the first finding it was submitted Mr Gillespie made a strong recommendation that the orders be complied with. Again, although the Court has found that Mr Gillespie did not do all that he could have done, what he did do nonetheless constituted a significant step on his part to achieve compliance with the orders. And again, the evidence is that if Mr Gillespie had gone further and made a direction, in the face of what the Court accepted was a vocal, angry and abusive group of employees ([109]), it would not have made any difference to the outcome and may well have inflamed the situation. 18 As to the second finding, counsel submitted the group of employees involved in this incident was small and in the context of the industrial action which occurred, insignificant. 19 As to the third finding it was submitted the Court had accepted that at the delegates' meeting on the evening of 17 February 2004: (i) Mr Gillespie, more forcefully than at the other meetings, told the delegates it was necessary that the orders be complied with, in circumstances where the meeting was heated and aggressive [par 132]. (ii) The giving of a formal direction to return to work was not a reasonable step required to be taken under the orders [par 131]. (iii) The decision by Mr Gillespie to proceed with the mass meeting the next day was a "fall back" position necessitated by the rejection by the delegates of a return to work [par 134]. (iv) The calling of the mass meeting for 18 February 2004 to use the numbers of the full complement of employees to outvote the striking workers was the only reasonable step remaining to the AWU to achieve compliance with the dispute orders once the delegates had declined to return to work [par 139]. 20 Mr Hatcher submitted that in light of these findings: [T]he contravention of the orders which the Court has found to have occurred at the delegates meeting on 17 February 2004 could not be assessed as involving any culpability at all. The AWU was now in the position where it had to commit a technical breach of the orders (in organising the mass meeting) in order to achieve substantial compliance with the orders. Paradoxically, this technical breach of the orders has been accepted by the Court as also being a reasonable step required to be taken under the terms of the orders, and in addition was ultimately successful in achieving compliance with the orders. The AWU could not possibly be penalised for its conduct in these circumstances. 21 In relation to the meeting that occurred on 27 February 2004, it was submitted the evidence was that the meeting proper only lasted a very short time. Mr Hatcher referred to Mr Hancock's evidence, which he said was not contested in this respect, was that he told the employees who attended the meeting that there were orders in place and that the employees had to return to work. The employees thereupon returned to work. In the context of a meeting which the employees had requested should occur, it was submitted this was clearly responsible conduct on the part of Mr Hancock and involved the taking of reasonable steps - albeit, as the Court has found, not all reasonable and necessary steps - to achieve compliance with the orders. Counsel submitted this, therefore, could not be regarded as involving any serious contravention of the orders. 22 Counsel for the AWU submitted the principle of totality should also be applied where there is an interlocking relationship between the contraventions found to have occurred: see BHP Steel (AIS) Pty Ltd v CFMEU and Transport Workers Union of Australia v Glynburn Contractors (Salisbury) Pty Ltd (1991) 37 IR 313 per Lee J at 314. This would be particularly applicable, it was submitted, to the contraventions found to have occurred on 16 and 17 February 2004. SUBMISSIONS OF THE AFMEPKIU 23 The contravention by the AFMEPKIU was in relation to the delegates' meeting on 17 February 2004. Mr I Morrison for the Union submitted that the circumstances of the contravention were such that the Court should take no action. 24 Mr Morrison submitted, firstly, there was little Mr Phillips could have done to prevent the contravention and, secondly, the actions of Mr Phillips and the members of the AFMEPKIU were identical to that of Mr Tomlins the ETU official and the members of the ETU. It was submitted that the prosecutor, for its own purposes, had chosen not to proceed against the ETU. However, as the conduct of the ETU and its official and members was the same as that of the AFMEPKIU, it would be manifestly unfair for the AFMEPKIU to be penalised. Mr Morrison submitted that if the Court found a penalty was warranted it should be a small financial penalty. CONSIDERATION 25 Section 139(4)(a) provides that the maximum penalty that may be imposed for the contravention of a dispute order is a penalty not exceeding in total $10,000 for the first day the contravention occurs and an additional $5,000 for each subsequent day on which the contravention continues. 26 The Court found that there was a contravention of order (ii) of the orders made by Connor C on 16 February 2004 and that contravention occurred on 16 February in that the AWU and its officers and employees did not take all reasonable steps to ensure compliance with order (i), namely: That members of the AWU and AFMEPKIU employed in its coil handling and packaging operations shall cease and refrain from taking any further industrial action and shall work in accordance with normal work requirements and their contracts of employment effective from 3.00 pm Monday, 16 February 2004. Orders (i) and (ii) remained in force until 30 March 2004 unless varied or rescinded. 27 The Court also found there was a contravention of order (ii) on 17 February 2004 in that the AWU and its officers and employees again did not take all reasonable steps to ensure compliance with order (i) in circumstances where the strike that commenced the previous day continued. 28 In respect of the contravention of order (ii) on 16 February a maximum penalty of $10,000 applies. In respect of the contravention of order (ii) on 17 February a maximum penalty of $5,000 applies. 29 On 17 February 2004 Connor C did not issue a new set of dispute orders. Instead, he amended the orders made the previous day. A comparison of the two sets of orders is set out in the table below: Dispute Orders Amended Dispute Orders 16 February 2004 17 February 2004 1. The AWU, the AFMEPKIU and the ETU, their respective officers and employees and their respective members employed by either: i) That members of the AWU and the AFMEPKIU employed in its coil handling and packaging operations shall cease and refrain from taking any further industrial action and shall work in accordance with normal work requirements and their contracts of employment effective from 3.00 pm on Monday, 16 February, 2004; (a) Bluescope Steel (AIS) Pty Limited at its Port Kembla steelworks; or (b) Bluescope Steel Limited at its Springhill works, must immediately cease and refrain from taking any form of industrial action, including any strike, stop work meeting, ban, limitation or restriction on the performance of work; 3. The AWU, the AFMEPKIU and the ETU and their respective officers and employees must take all reasonable and necessary steps to ensure that order in para 1 is complied with, including, but not limited to: (ii) The AWU, their respective officers and employees shall take all reasonable steps to ensure compliance with that order in para 1 above (i) advising their members of these orders by no later than 3.20pm on Tuesday, 17 February 2004; and (ii) convening a meeting by 3.20pm on Tuesday, 17 February, 2004 of all members who are engaging in industrial action and directing them to comply with the order in para. 1. 2. The AWU, the AFMEPKIU and the ETU and their respective officers and employees must immediately cease and refrain from organising, encouraging or inciting any industrial action (including any strike, stop work meeting, ban, limitation or restriction on the performance of work) contrary to the order in para 1 above. (iii) This order shall come into effect from 3.00 pm on Monday, 16 February, 2004 and shall remain in force until Tuesday, 30 March, 2004 unless, on formal application, it is varied or rescinded in the meantime. 4. This order shall come into effect on and from 3.20pm on Tuesday, 17 February, 2004 and shall remain in force until Tuesday, 30 March, 2004 unless, on formal application, it is varied or rescinded in the meantime. 30 It is arguable that all of the orders made on 17 February were new orders given that they took effect from a different time to those made on 16 February 2004, applied much more widely than the previous orders and had the effect of entirely superseding the previous orders. 31 Nevertheless, that is not how the parties approached the orders of 17 February and the orders have consistently been treated as amendments. Connor C explicitly referred to the orders he made on 17 February as "amended dispute orders". It would be unfair now to regard them otherwise. However, that does not mean that all contraventions subsequent to 16 February attract only a maximum penalty of $5,000. 32 Order 3 of the amended dispute orders made on 17 February may be regarded as an amendment to order (ii) made the previous day and which had been contravened on that day. Accordingly, the maximum penalty for contravention of order 3 on 17 February is $5,000. However, it is not cumulative on the penalty applicable in respect of the contravention on 17 February of order (ii) of the 16 February orders because although it is a second contravention the contraventions have to be considered on a daily basis. So that even if there are multiple contraventions of a dispute order on a particular day the maximum penalty is not cumulative. 33 Order 2 of the amended dispute orders made on 17 February was a new order contravened for the first time (albeit on two occasions on the same day) by the AWU on 17 February and, therefore, attracts a single (because the contravention is daily) maximum penalty of $10,000. 34 Contraventions of orders 2 and 3 of the amended dispute orders on 27 February 2004 attract a maximum penalty of $5,000 each, they being subsequent contraventions of two separate dispute orders. I do not consider that only one penalty applies on the basis that a penalty for a contravention is to be considered on a daily basis because there were contraventions of two different dispute orders on the same day. 35 The contravention by the AFMEPKIU on 17 February 2004 of order 2 of the amended dispute orders attracts a maximum penalty of $10,000. 36 In Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No. 2) (1999) 94 IR 231, Branson J considered the principles that should inform a court in determining the amount of penalty to be imposed on a defendant for the contravention of Part XA - Freedom of Association of the Workplace Relations Act 1996 (Cth). At [8] of her judgment her Honour stated: [8] 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 Pt XA of the Act; (c) Where more than one contravention of Pt 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 Pt 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. 37 The list of relevant matters identified by her Honour is helpful in compiling a similar list that may be relevant in respect of contraventions of dispute orders under s 139 of the Industrial Relations Act where the conduct constituting a contravention calls for the imposition of a penalty under s 139(3)(e). In my opinion, the matters that may be considered to be relevant and appropriate are: (a) The circumstances in which the relevant contravention took place (including whether the contravention was undertaken in deliberate defiance or disregard of the dispute order); (b) Whether the person found to have been in contravention of a dispute order has previously been found to have engaged in conduct in contravention of an earlier dispute order (in this respect see s 139(4)(b), which provides for higher maximum penalties where there has been an earlier contravention); (c) The consequences of the conduct found to be in contravention of the dispute order; (d) The need, in the circumstances, for deterrence; (e) Any relevant subjective factors including undertakings regarding future conduct. 38 The AWU raised the question of whether it was appropriate to apply the principle of totality, a concept drawn from the criminal law where: [T]he sentencing judge will evaluate, in a broad sense, the overall criminality involved in all of the offences and, having done so, will determine what, if any, downward adjustment is necessary, whether by telescoping or otherwise, in the aggregate sentences in order to achieve an appropriate relativity between the totality of the criminality and the totality of the sentences: R v Holder [1983] 3 NSWLR 245 at 260 per Street CJ. 39 In exercising the discretion as to an appropriate penalty under s 139(3)(e) of the Act it is appropriate to consider the overall culpability of the guilty person but the imposition of a penalty under s 139 is not an application of the criminal law and regard must be had to the fact that the legislature has provided for a higher maximum penalty for the first day of the contravention and a lower penalty for each subsequent day the contravention occurs. The penalty structure appears to countenance that contraventions of dispute orders may involve a single course of conduct arising from a particular industrial situation and the higher initial penalty is designed to deter any potential offender from embarking on a course of contravention. The subsequent lower penalties would appear to be an acknowledgment, at least in part, of the totality principle in that the contravener should not to be punished more than once for common elements of the contravention. In exercising its discretion in this case the Court has had regard to these matters. The circumstances in which the relevant contravention took place 40 In relation to the contravention by the AWU of order (ii) of the 16 February orders on that day, I accept that a meeting was called of members prior to the orders coming into effect and that Mr Gillespie read the orders to the employees, explained their effect, recommended compliance with the orders, and told the employees that they were obliged to accept the Commission's direction and return to work. 41 It was also found, however, at [106] that: · Mr Gillespie was well capable of taking, and should have taken, a stronger and more effective stand in encouraging members to cease and refrain from industrial action on 16 February 2004 if he had been of a mind to; he did not use his best endeavours to achieve compliance. · The unmistakeable inference is that Mr Gillespie was pre-disposed to a course of action that could lead to a contravention of dispute orders. 42 In relation to the contravention by the AWU of order (ii) of the 16 February orders on 17 February 2004, it was submitted that although the Court found that Mr Gillespie did not do all that he could have done, what he did do nonetheless constituted a significant step on his part to achieve compliance with the orders. Further, that the evidence was that if Mr Gillespie had gone further and made a direction, in the face of what the Court accepted was a vocal, angry and abusive group of employees ([109]), it would not have made any difference to the outcome and may well have inflamed the situation. 43 That submission, however, has to be weighed against the Court's other findings at [118]: 118 There are some additional considerations. These are referred to earlier in this decision regarding the meeting on 16 February, namely Mr Gillespie's personal threats of industrial action being widened, his stated disregard in proceedings before Connor C for dispute orders, his standing and authority to be more forceful in securing compliance with the dispute orders by dint of his strong character and his position as Secretary. There was nothing that occurred between the meeting on 16 February and the next meeting on 17 February that would have caused Mr Gillespie to have a different perspective on the direction of the dispute. In other words, if, as I have found, all reasonable steps were not taken at the meeting on 16 February to have the industrial action cease, nothing occurred before 7.00am on 17 February to cause Mr Gillespie to become more forceful or persuasive in his attempts to secure a cessation of the industrial action. I consider that Mr Gillespie was not inclined to, and did not, take all reasonable steps to have his members cease and refrain from taking industrial action. 44 On 17 February Connor C issued his amended dispute orders at about 1.45 pm. At about 4.00 pm Mr Hancock was present at the plant to ensure that there was no return to work by members of the AWU in response to calls made earlier to employees by the prosecutor's managers to return to work. Counsel for the AWU submitted the group of employees involved in this incident was small and in the context of the industrial action which occurred, insignificant. However, at [120] and [122] the Court found: 120 At about 4.00pm Mr Bland and Mr Towers saw Mr Hancock talking to a group of the returning employees. Both Mr Bland and Mr Towers heard Mr Hancock say words to the effect of, "We broke the Commission's orders yesterday and we are doing it today as well." I accept this evidence of Mr Towers and Mr Bland, despite Mr Hancock's denials, and it reinforces my opinion that the AWU had scant regard for the dispute orders and pursued a course of action that caused it to contravene those orders of 16 February and the amended orders of 17 February. … 122 I am prepared to infer that the group of employees who Mr Hancock was addressing on the afternoon of 17 February were members of the AWU. These members were previously on strike as a consequence of the meeting earlier that morning and were responding to calls from managers to return to work. In my opinion, Mr Hancock was present to ensure there was no return to work by his members and I am satisfied he used the words attributed to him by both Mr Bland and Mr Towers. Both of those witnesses were adamant Mr Hancock used words to the effect, "I can't tell you to go home, but I want to tell you all that you are all on strike". Mr Towers had an independent recollection and relied on notes he made about an hour later. The words can only sensibly be regarded as an encouragement of industrial action and thereby constitute a contravention of order 2 of the amended orders of 17 February. Mr Hancock's attitude to the dispute orders indicates a deliberate disregard for them. 45 Later in the afternoon of 17 February a combined delegates' meeting took place. It was submitted by counsel for the AWU that the delegates' meeting was a necessary technical breach of the orders (in organising the mass meeting) in order to achieve substantial compliance with the orders. Paradoxically, it was submitted this technical breach of the orders was accepted by the Court as also being a reasonable step required to be taken under the terms of the orders, and in addition was ultimately successful in achieving compliance with the orders. It was submitted the AWU could not possibly be penalised for its conduct in these circumstances. 46 Notwithstanding the paradox to which Mr Hatcher referred, it would be perverse not to impose some sanction on the AWU for the contravention arising from the delegates' meeting. Whilst it was contended the meeting was necessary in order to effect a return to work at the mass meeting the following day, the meeting may well have not been necessary at all as the Court found at [135] of its judgment " if AWU officials had taken reasonable steps to comply with the Commission's orders relating to the earlier episodes of industrial action", and if Mr Phillips of the AFMEPKIU had taken early action to keep his members out of the dispute because they were not affected by the outsourcing arrangements. 47 Notwithstanding that a proper basis exists for imposing a penalty for contravention of order 2 of the amended dispute orders in relation to what took place at the delegates' meeting (although I consider the penalty would be at the low end of the range) order 2 was contravened earlier that day at about 4.00 pm when it was held Mr Hancock encouraged industrial action (a mid range contravention). The contraventions of order 2 on 17 February can only attract one maximum penalty given that contraventions are to be considered on a daily basis and not as separate contraventions. 48 The contraventions of orders 2 and 3 of the amended dispute orders on 27 February arose out of what may be regarded as deliberate flouting of those orders. Both Mr Gillespie and Mr Hancock were advised the prosecutor would provide a venue for the meeting that had been requested provided that the meeting did not impact on production. Mr Gillespie did not respond to this offer. A stop work meeting went ahead at 7.00 am on 27 February 2004, albeit only for a short period but, nevertheless, causing a loss of steel production. Whether previous contravention 49 Neither the AWU nor the AFMEPKIU have previously contravened a dispute order. Accordingly, s 139(4)(b) of the Act does not apply. The consequences of the conduct found to be in contravention of the dispute order 50 The consequences for the prosecutor of the conduct found to be in contravention was, of course, the disruption to its business and the loss of production for the time employees were engaged in industrial action on 16, 17 18 and 27 February 2005. There was also the unnecessary loss of wages incurred by employees involved in the industrial action, particularly by members of the AFMEPKIU, who had no proper basis for being involved. 51 The prosecutor's losses were not quantified and it is, therefore, difficult to gauge the consequences of the contraventions. But it would not appear the loss was massive. In the case of the AFMEPKIU the consequences of the contravention would appear to have been relatively slight. The need for deterrence 52 Neither the AWU nor the AFMEPKIU have previously contravened a dispute order and there is no evidence that the two Unions are likely to contravene dispute orders in the future although it is noted no undertakings were given in this respect to the effect that the contraveners would not do so or would make their best endeavours not to do so. Nevertheless, there is very little weight to be given to the need for specific deterrence in the determination of penalty. 53 It is appropriate to include in the penalty an element to deter others from contravening dispute orders. However, the incidence of contraventions of dispute orders in this jurisdiction is almost non-existent and so any element for general deterrence must be small. Relevant subjective factors 54 There has been no expression of remorse or contrition for the contravention of the orders, which is in stark contrast to the apology given by Mr Gillespie in Bluescope Steel (AIS) Pty Limited v The Australian Workers' Union, New South Wales (No 2) (2004) 136 IR 48 and the undertaking to "work with Bluescope and the Industrial Relations Commission in the future to ensure that such a situation never arises again." That judgment determined the amount of penalty to be imposed for contravention of a provision of an industrial instrument. The Court stated in that case at [25]: 25 If it had not been for the defendant's good record of not having previously contravened s 357 and in the absence of Mr Gillespie's contrition and his undertaking to endeavour to ensure that such a situation never arises again, the Court would have been inclined to impose a penalty at the high end of the scale. The undertaking by Mr Gillespie is a solemn one and I accept that it was given in good faith. I regard a penalty of $6, 500 as appropriate. 55 Nevertheless, the Court notes the otherwise good records of the two Unions in not having previously had imposed on them a penalty for contravention of a dispute order. 56 The AFMEPKIU contended that its actions were no different to those of the ETU, against whom the prosecutor decided not to proceed. Whilst I can understand this may give rise to a sense of injustice on the part of the AFMEPKIU, I have no information before me regarding the prosecutor's motives for not proceeding against the ETU or what understanding or arrangement might have been reached between those two organisations or, if there was an arrangement reached with the ETU, whether a similar arrangement was offered to the AFMEPKIU but for its own reasons it declined the offer. I have nothing, therefore, upon which I could judge that the AFMEPKIU has a justifiable sense of grievance. In any event, the contravention fell on the shoulders of the AFMEPKIU and any penalty is not one that would be shared between that Union and the ETU if the latter had been successfully prosecuted. Penalty 57 The Court considers the appropriate penalties in this case to be as follows: Matter No IRC 3226 of 2004 - Summons on the AWU 16 February 2004 (1) Contravention of order (ii) of the dispute orders made on 16 February 2004: $ 4,000. 17 February 2004 (2) Contravention of order (ii) of the dispute orders made on 16 February 2004: $ 2,500. (3) Contravention of order 2 of the amended dispute orders made on 17 February 2004: $ 4,500. (4) Contravention of order 3 of the amended dispute orders made on 17 February 2004: No penalty. 27 February 2004 (5) Contravention of order 2 of the amended dispute orders made on 17 February 2004: $ 2,000. (6) Contravention of order 3 of the amended dispute orders made on 17 February 2004: $2,000. Matter No. IRC 3223 of 2004 - Summons on the AFMEPKIU 17 February 2004 (1) Contravention of order 2 of the amended dispute orders made on 17 February 2004: $ 2,000. Orders 58 The Court makes the following orders: Matter No IRC 3226 of 2004 - Summons on the AWU (1) The Australian Workers Union, New South Wales is fined an amount of $15,000. Matter No. IRC 3223 of 2004 - Summons on the AFMEPKIU (1) The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch is fined an amount of $2,000. _____________________________ DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. 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