Industrial Court of New South Wales CITATION: BHP Steel (AIS) Pty Ltd (now known as BlueScope Steel (AIS) Pty Ltd) and The Australian Workers' Union, NSW [2006] NSWIRComm 263 Applicant: PARTIES: BHP Steel (AIS) Pty Ltd (now known as Blue Scope Steel Pty Ltd) Respondent: The Australian Workers' Union, NSW FILE NUMBER(S): IRC1109 of 2003 CORAM: Kavanagh J CATCHWORDS: Breach of dispute orders – whether actions of members and delegates were actions of the union - trade and industrial unions have a legal personality separate from its members - union rules relevant to determine if acts were acts of union in breach – orders valid - no appeal pursued - protected by s179 – whether natural justice - procedural fairness an issue in consideration of penalty - level of seriousness of the offence – mitigation of penalty - penalty imposed – no order as to costs LEGISLATION CITED: Industrial Relations Act 1996 Evidence Act 1995 s140 Australian Workers' Union, New South Wales v Bluescope Steel (AIS) Pty Limited (2006) 151 IR 153 BHP Steel Ltd v The Australian Workers' Union, New South Wales [2003] NSWIRComm 151 BHP Steel (AIS) Pty Limited (now known as Blue Scope Steel Pty Ltd) v The Australian Workers' Union, NSW [2005] NSWIRComm 261 Commonwealth Steamship Owners' Association v Federated Seaman's Union of Australasia (1923) 33 CLR 297 Construction, Forestry, Mining and Energy Union v Clarke (2006) 149 IR 224 Department of Mineral Resources of NSW v AM Hoipo & Sons Pty Ltd (2000) 99 IR 137 CASES CITED: Kelly v Construction, Forestry, Mining & Energy Union (1994) 125 ALR 109 Moore v Doyle (1969) 15 FLR 59 Re Electricity Commission of New South Wales v Public Service Association (unreported decision of Hill J, 30 March 1992, No. IRC 313 of 1991) Rowe v Transport Workers' Union of Australia (1998) 90 FCR 95 Skilled Engineering Limited v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2002) 116 IR 116 Tesco Supermarkets Ltd v Nattrass [1972] AC 153 Waterside Workers' Federation v Burgess Brothers Limited (1916) 21 CLR 129 WorkCover Authority (Inspector Mason) v Wild Geese Building & Maintenance Pty Limited [2006] NSWIRComm 152 HEARING DATES: 26/04/06, 24/05/06 DATE OF JUDGMENT: 09/15/2006 Applicant: Mr R.S. Warren of counsel Solicitors: Mr D.A. Lloyd Blake Dawson Waldron LEGAL REPRESENTATIVES: Respondent: Mr A. Searle of counsel Solicitors: Ms M.S. Cassidy Maurice May & Co JUDGMENT: - 1 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: Kavanagh J 15 September 2006 Matter No IRC 1109 of 2003 BHP STEEL (AIS) PTY LIMITED (now known as BLUE SCOPE STEEL PTY LTD) v THE AUSTRALIAN WORKERS' UNION, NSW Application by BHP Steel (AIS) Pty Limited (now known as Blue Scope Steel Pty Ltd) for summons pursuant to s139 of the Industrial Relations Act 1996 as to alleged contravention of Dispute Orders made by Deputy President Grayson on 28 February 2003 in matter Nos 4413 of 2002 and 722 of 2003 JUDGMENT (Penalty) [2006] NSWIRComm 263 1 On 28 November 2005, Judgment was delivered in the above matter ([2005] NSWIRComm 261). BHP Steel (AIS) Pty Limited had made application by way of a Summons to Show Cause by the Australian Workers' Union, New South Wales pursuant to the provisions of s139 of the Industrial Relations Act 1996. BHP alleged Dispute Orders made on 28 February 2003 by Deputy President Grayson had been contravened by the Union through the activities of its Port Kembla, South Coast and Southern Highlands Branch on 28 February, 1, 2 and 3 March 2003. 2 The Court has made some findings of fact and determined as follows: (1) in the application of s179 of the Act, there exist dispute orders as issued by the Deputy President on 28 February 2003. (2) There was a breach of the said orders by the Australian Workers' Union, NSW Branch. (3) The matter is stood over for relisting as to penalty. 3 BHP at the hearing of the application revealed it would seek, pursuant to s139(3) of the Industrial Relations Act 1996, the imposition of a penalty on the AWU and such other orders against the respondent as the Commission in Court Session considered appropriate. The company has pressed that a penalty be imposed against the Union for the serious breach of the Commission's Orders on 28 February and 1, 2 and 3 March 2003. 4 Relevantly as to penalty, s139(3) states: 139 Contravention of dispute order (1) . . . (2) . . . (3) The Commission may, after hearing any person who answered the summons to show cause and considering any other relevant matter, do any one or more of the following: (a) dismiss the matter if it finds that the dispute order was not contravened or if it finds that the circumstances were such that the Commission should take no action on the contravention, (b) cancel the approval of an enterprise agreement, (c) suspend or modify for any period all or any of the entitlements under an industrial instrument, (d) cancel the registration of an industrial organisation or take any other action authorised by Division 2 of Part 3 of Chapter 5, (e) impose a penalty on an industrial organisation or an employer as provided by subsection (4), (f) make any other determination that the Commission considers would help in resolving the industrial dispute. (4) The maximum penalty that may be imposed on an industrial organisation or employer is: (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. (5) . . . . 5 The relevant Dispute Orders in matter No. IRC722 of 2003 issued by Grayson DP were as follows: 1. From the time these orders take effect as specified in Order2: (a) The Australian Workers' Union, New South Wales (the " Union ") and its respective officers and employees, and its members employed by BHP Steel (AIS) Pty Ltd at the Rail Operations Department of Port Kembla Steelworks in New South Wales must immediately cease and refrain from taking any form of industrial action, including any strike, ban, limitation or restriction on the performance of work; (b) the Union and its officers and employees must immediately cease and refrain from organising, encouraging or inciting any industrial action (including any strike, ban, limitation or restriction on the performance of work) contrary to Order 1(a); and (c) The Union its officers and employees must take all necessary steps to ensure that Order 1(a) is complied with, including, but not limited to advising its members of these orders by 11.20 ( handwritten ) /pm on 28 February 2003. 2. This order will take effect on and from 11.20 ( handwritten )/pm on 28 February 2003 and shall remain in force for a period of three (3) months. or as further ordered by the Commission ( handwritten ) 3. For the purposes of service in accordance with the Industrial Relations Commission Rules 1996, without limitation to other means of service, these orders may be served on each of the Union and its officers, employees and members: (a) by facsimile to the registered office or Wollongong office of the Union; or (b) by handing a copy of these orders to an officer or employee of the Union. 6 Mr R.S. Warren, of counsel, appeared for BHP and Mr A. Searle, of counsel, appeared for AWU. 7 In the prior Judgment of 28 November 2005, I found the following facts established: 1. the members and delegates knew of the Orders of the Commission by the evening shift on Friday 28 February 2003 before they voted to strike. 2. Mr Anderson and Mr Gillespie the relevant Union organiser and Branch Secretary knew of the Orders by mid morning of Sunday 2 March 2003; and 3. There was no return to work until mid Monday afternoon on 3 March 2003. 8 In the consideration as to penalty a further number of issues need to be determined, and were addressed in submissions by both parties arising out of my comments in the prior judgment at [81] and [82] as follows: . . . It is arguable that an organisation can act through its members, officials and employees and, therefore, any contravening act of a member can be a contravention by the AWU. and . . . it could be concluded the acts of the union through its members from the night shift on 28 February and through 1, 2 and 3 March 2003 were in breach of the 28 February 2003 Dispute Orders and the acts of the union, through its secretary and organiser, on 2 and 3 March 2002 were also acts which could be held to be in breach of the Dispute Orders. Submissions 9 Mr Warren, for BHP, submitted penalties should be imposed on the Union for the breach of the Orders on each of four days - 28 February and 1, 2 and 3 March 2003. He asserted there was a breach by the Union of the Orders of the Commission on Friday 28 February 2003 and that breach continued on 1, 2 and 3 March 2003. 10 Mr Warren submitted Mr Anderson, the Union official, on the evening of Friday 28 February 2003 called a meeting on the Friday night shift via a handwritten resolution which resolution recommended industrial action. The company contends the meeting was therefore approved by the Union through Mr Anderson, the organiser, who gave directions to the delegates. The company submitted, given the activities of the delegates and members at the meeting and Mr Anderson's activities in drafting a resolution recommending industrial action, there was defiance of the Commission's Orders by the Union on Friday 28 February 2003. 11 Mr Warren further submitted the question as to whether the union received natural justice at the arbitration of the dispute, in a circumstance where the Orders have been found by the Court to be validly issued, is not relevant to the court's consideration as to penalty. He relies on the words of Hill J in Re Electricity Commission of New South Wales v Public Service Association (unreported decision of 30 March 1992, No. IRC 313 of 1991) (at 20): It need hardly be observed that where the strike or lock out is in progress or threatened and the facts are not seriously in issue then questions of niceties or refinements may not loom large; although the line should be drawn between the conciliation and the arbitration stages. . . . 12 Mr Warren relied upon the industrial history of the AWU at the BHP Port Kembla site and the court's consideration of a number of disputes with the union as evidenced in the transcripts tendered and the history of disputation as recited in the prior judgment. Of relevance, he asserted the Union had, at other times, not attended at Commission hearings when it knew of the listings. 13 The company asserts the Union breached the Dispute Orders made by Grayson DP as follows: 1. Mr Anderson a Union official wrote a resolution passed by the Union on the Friday evening 28 February 2003. 2. Mr Anderson of Union official attended at the site on the Saturday to ensure that the strike continued on 1 March 2003. 3. Both Mr Anderson and Mr Gillespie held discussion on Sunday 2 March 2003 but failed to immediately act upon those discussion to ensure a return to work until late Monday 3 March 2003. There was therefore a breach of Orders by the AWU on each of the four days, 28 February and 1, 2 and 3 March 2003. 14 The company further asserted there is some conflict between Rules 64(2) and 64(5) of the AWU. However, the company asserted authority of the organiser to direct the members is clearly stated in Rule 64(2). 15 The company submitted Mr Anderson handed a resolution to the delegates and in doing so "passed the baton of the union to the delegates" as authorised under Rules 64(2) of the AWU. Further, as the meeting conducted on the evening of 28 February 2003 continued past 11.20 pm (the time the Orders were to have effect) it is asserted the acts of the members therefore became the acts of the Union. 16 Reliance by the company is placed upon the views expressed by Nicholson J in Construction, Forestry, Mining and Energy Union v Clarke (2006) 149 IR 224 (on appeal) who determined a similar act by union members was an act for which the Union should be held liable. The Union 17 Mr Searle, on behalf of the AWU, submitted the terms of the dispute orders makes a distinction between the union, its officers and its employees. The Union submitted the court left open at [82] of its prior Judgment the question as to whether the actions of the delegates, even well informed delegates, were actions of the Union. He submitted the court carefully chose its words saying "it could be concluded" and submitted the court had not reached a conclusion on the question as to whether the acts of the members including its delegates were, in law, acts of the Union. 18 Mr Searle submitted generally the court would not be satisfied the actions of the members, in the circumstances revealed, were the actions of the Union as a matter of fact. 19 Further, he contended, as the Union is the entity which had been required to show cause, the activities of its members can only be attributed to the Union in certain circumstances in accordance with the relevant law and also the relevant Union Rules, in particular, Rules 60 and 64. 20 Mr Searle conceded, given the court's finding officers of the Union knew of the Orders on Sunday morning, to submit that from Sunday 2 March 2003, the Union took all reasonable steps to ensure compliance especially in a circumstance where neither Mr Gillespie nor Mr Anderson called an industrial meeting of members and requested the return to work (see [81]). The court, he submitted should, however, take into account that there had been an immediate application made to the Commission by the Union to set the Orders aside. Evidence revealed because of a misunderstanding between the Union and BHP, the Union had thought the issue was resolved and the orders would not be used to the detriment of the Union. Therefore the application to set aside the orders had been not proceeded with by the Union. This fact should be weighed into the court's consideration on penalty it was submitted. 21 Mr Searle further submitted the issue of natural justice is very relevant to the court's consideration as to penalty. He contends it is common when matters move from conciliation to arbitration for there to be a shifting in the views of the various parties. Because of the failure to give the Union an opportunity to be heard, the Union suffered detriment, it is contended. 22 In assessing the level of seriousness of the offence, the Union submitted the court would be of the view this was not a breach the court would consider most serious even in a circumstance where it is conceded there was no return to work until the Monday afternoon. The Union officials became aware of the orders on Sunday morning and they could not be responsible for any breach on Friday 28 February or Saturday 1 March 2003. 23 Mr Searle developed a comprehensive analysis of the authorities on which he relied: (Waterside Workers' Federation v Burgess Brothers Limited (1916) 21 CLR 129; Commonwealth Steamship Owners' Association v The Federated Seamen's Union of Australasia (1923) 33 CLR; Railway Commissioners for New South Wales v Langshaw [1928] AR (NSW) 557; Grossy v Lynch [1934] AR (NSW) 155; Houssein & Anor v Under Secretary, Department of Industrial Relations & Technology and Industrial Commission of NSW (1982) 38 ALR 577; and Re McJannet & Ors; Ex parte Minister for Employment, Training & Industrial Relations (1995) 184 CLR 620). He submitted the authorities support the proposition the Union can only be held liable in accordance with the relevant Union Rules for the acts of its delegates and members when the facts establish the Union authorised their acts. Relevant Principles 24 The first issue raised is whether an act by members of the Union can be held to be the act of the Union. This question has been given much judicial consideration. Mr Warren for the company relied upon the view expressed by the Federal Court in Skilled Engineering Limited v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2002) 116 IR 116 at [2] and Clarke where Nicholson J said: 60. The respondent challenges the claim of the appellant that the actions taken in this respect are capable of being characterised as intended to be preventative of the undertaking of industrial action by the workers. It is said this is so because the evidence demonstrates that Mr Powell, Mr Molina and Mr Levy pursued the Issues with the Employer after the cessation of work began and while it continued. I accept that there is appropriate evidence that was the case. In the case of s 178 of the Act, the respondent contends the cessation of work itself was sufficient to establish the liability of the first appellant under that section. In the case of s 170MN, the respondent relies on the evidence principally referred to in connection with the preceding group of grounds of appeal. 61. The contentions of the appellants in relation to preventative action can only be of significance if it is open to acceptance that the "Union" (being relevantly the appellants) acted as a separate juristic entity from the Employees. In my opinion, this simply cannot be the case. I have set out earlier in these reasons the particulars of the constitutional arrangements of the Union. Examination of that shows that the Union consists of the Employees. The Union comprises every part of the Union. There is no constitutional concept of the Union on the one hand and the Employees on the other hand. The Employees are as much an integral part of the Union as the officials. The consequence is that if the Employees make a decision to go on strike, the Union is on strike. 25 Mr Searle, however, submitted the Court would reject the view of Nicholson J in Clarke as against the weight of authorities. 26 In Moore v Doyle (1969) 15 FLR 59, the Full Bench held that a trade union holds a separate legal identity from its members (at 116): . . . There is strong authority in the New South Wales Supreme Court (Egan's case (1917) 17 S.R. (N.S.W.) 243 and Wheatley v. Federated Ironworkers' Association of Australia [1960] S.R. (N.S.W.) 161) for the view that a registered trade union is a legal entity separate from its members. This is supported by Heggie's case (1906) 3 CLR 686 in the High Court and by statements in Hursey's case (1959) 103 CLR 30. It is also strongly supported by a persistent line of authority in the New South Wales Industrial Commission, for example-- Brailey v. Sydney Branch of Waterside Workers' Federation [1935] A.R. (N.S.W.) 148; Lasbies v. Mackay [1945] A.R. (N.S.W.) 562; McQuillan v. Bodkin [1960] A.R. (N.S.W.) 373, at p. 392; In re J. V. Benson and Electrical Trades Union [1962] A.R. (N.S.W) 516; In re Electrical Trades Union of Australia, N.S.W. Branch [1963] A.R. (N.S.W) 796. As at present advised we prefer the view that a New South Wales registered trade and industrial union is a separate legal entity with a legal personality of its own distinct from its members at any particular time. Mr. Sweeney examined the provisions of the New South Wales Trade Union Act and the New South Wales Industrial Arbitration Act in considerable detail in support of his argument that whatever may be the position under the Trade Union Acts in England the position in New South Wales is different. He argued that the differences weigh strongly in favour of a New South Wales trade and industrial union having a legal personality separate from its members. . . . 27 In Kelly v Construction, Forestry, Mining & Energy Union (1994) 125 ALR 109, Moore J said of the authority a corporation must give to a natural person to act on its behalf in order for a corporation to be held liable for the natural person's acts (at 116-117): . . . At common law the criminal liability of a corporation for the acts of its employees is not at large. Unless the statute that creates the offence also attributes to the corporation the conduct and intent of any employee (see R v Australasian Films Ltd (1921) 29 CLR 195) then its criminal liability depends upon the status and authority within the corporation of the person whose conduct is criminal. In the second situation the observations of Eveleigh J in R v Andrews-Weatherfoil Ltd [1972] 1 WLR 118 at 124 which are relied on by the defendant, are apt: It is not every "responsible agent'' or "high executive'' or "manager of the housing department'' or "agent acting on behalf of a company'' who can by his actions make the company criminally responsible. It is necessary to establish whether the natural person or persons in question have the status and authority which in law makes their acts in the matter under consideration the acts of the company so that the natural person is to be treated as the company itself. It is often a difficult question to decide whether or not the person concerned is in a sufficiently responsible position to involve the company in liability for the acts in question according to the law as laid down by the authorities. Thus, other than in situations of vicarious corporate criminal liability, the common law recognises that a corporation is only criminally liable for the conduct of a natural person purporting to act on its behalf if it can be demonstrated that the person had the requisite status and authority to engage in the conduct on the corporation's behalf. 28 In Rowe v Transport Workers' Union of Australia (1998) 90 FCR 95, Cooper J, (at 111-113) the view of Lord Reid in Tesco Supermarkets Ltd v Nattras [1972] AC 153 was adopted and applied to a Union's identity and the directing mind of such an identity: . . . The TWU and the TWU (Qld), as bodies corporate and as industrial associations have a legal personality which is a fiction. They cannot act other than through natural persons. The principles applicable to primary corporate liability in respect of a corporation's own acts were stated by Lord Reid in Tesco Supermarkets Ltd v Nattras [1972] AC 153. They were adopted by the High Court of Australia as a correct statement of the law in this country in Hamilton v Whitehead (1988) 166 CLR 121 at 127 and Environment Protection Authority v Caltex Refining Co Pty Ltd (1993) 178 CLR 477 at 514-515. Lord Reid said (at 170): "I must start by considering the nature of the personality which by a fiction the law attributes to a corporation. A living person has a mind which can have knowledge or intention or be negligent and he has hands to carry out his intentions. A corporation has none of these: it must act through living persons, though not always one or the same person. Then the person who acts is not speaking or acting for the company. He is acting as the company and his mind which directs his acts is the mind of the company. There is no question of the company being vicariously liable. He is not acting as a servant, representative, agent or delegate. He is an embodiment of the company or, one could say, he hears and speaks through the persona of the company, within his appropriate sphere, and his mind is the mind of the company. If it is a guilty mind then that guilt is the guilt of the company. It must be a question of law whether, once the facts have been ascertained, a person in doing particular things is to be regarded as the company or merely as the company's servant or agent. In that case any liability of the company can only be a statutory or vicarious liability." This is not the occasion to examine the limits of the directing mind principle or to seek to identify the point at which the conduct of a person or persons ceases to be conduct through the persona of the corporation. It is sufficient to state that there is a point where the conduct of the directing mind becomes so antithetical to the interests of the corporation that it cannot be regarded as the conduct of the corporation: see generally Canadian Dredge & Dock Co Ltd v The Queen (1985) 19 DLR (4th) 314 at 351; Dixon v Deacon Morgan McEwan Easson (1990) 70 DLR (4th) 609 at 612-613; Beach Petroleum NL v Johnson (1993) 43 FCR 1 at 27-32. . . . A body or group of persons which is not authorised by the constitution, rules or membership of an industrial association, cannot bind the industrial association and it is not liable for such conduct unless it ratifies the conduct or takes the benefit of it: Giblan v National Amalgamated Labourers' Union of Great Britain and Ireland [1903] 2 KB 600 at 617, 620, 625; Denaby & Cadeby Main Collieries Ltd v Yorkshire Miners' Association [1906] AC 384 at 390; Waterside Workers' Federation of Australia v Burgess Brothers Ltd (1916) 21 CLR 129 at 133, 136, 137-138; Commonwealth Steamship Owners' Association v Federated Seaman's Union of Australasia (1923) 33 CLR 297 at 303, 307, 311, 314-315. . . . 29 As early as 1916/1923 these principles were established through Waterside Workers' v Burgess and Commonwealth Steamship Owners' Association v The Federated Seamen's Union. The High Court considered the status of members taking industrial action and the role of the Union in such action, stand for the proposition that where the actions of members are inconsistent with the rules of the Union, the Union is not to be held liable. In Waterside Worker', Griffith CJ, Barton and Isaacs JJ held (at 129): . . .that, in the absence of express authority and of any ratification, the organization (sic) was not liable for acts in the nature of a strike done by a branch without the knowledge of the governing body of the organization (sic). Griffith CJ said (at 133) . . . It was, therefore, necessary for the plaintiffs to establish that the acts complained of were done by their authorized agents. There is no question of express authority. The governing body of the appellant organization (sic) had in fact no knowledge of the acts complained of until after they had been done, and then, so far from approving or ratifying them, expressed its disapproval. The persons doing the acts did not even purport to act on behalf of the organization (sic). . . . 30 Therefore there must be an authorisation under the relevant Union Rules for the acts of its members to be held as acts of the Union. 31 The authorities, therefore, require a consideration of the particular Rules of the Union when determining the facts. The Rules of the Australian Workers' Union, New South Wales are comprehensive. The relevant Rules are as follows: RULE 60 REPRESENTATIVES (1) In every industry, workshop, or section of industry where the groups or gangs or teams of workers are working there shall be a Representative who shall be a member of the Union. . . . (2) Representatives shall be elected at least annually, in the first quarter of each year, by the members at a meeting to be held on the job. (3) Such Representatives shall act for the persons on the job and shall have power to call meetings of members on such jobs to discuss Union affairs. . . . RULE 64 DISPUTES (1) In the event of a dispute arising on any job or at any place of employment which cannot be settled amicably, the-members involved shall by their delegate or other representative and before taking any action in furtherance of the dispute, notify the State or the relevant Branch Secretary or some full-time Officer of the Branch. (2) Subject to any directions concerning the dispute given by the State Council or Branch Executive, the members involved shall comply with all directions of the Officer of the Branch or of the Union who has been notified of or who is handling the dispute. (3) The Branch Executive or the Officer of the Branch or of the Union who is handling a dispute may authorise a secret ballot of members who are involved or likely to be involved in a dispute. (4) In the event of a serious dispute arising, or being threatened, the Secretary of the Branch concerned shall communicate with the State Secretary, who shall in conjunction with the relevant Branch Secretary thereupon take such steps for the settlement of the dispute as they deem expedient. For the purpose of this Rule any dispute or threatened dispute which exposes the Union to a pecuniary penalty or to an action for damages or which is likely to involve members of another Branch shall be deemed to be serious dispute. (5) Members ceasing work in respect to any industrial grievance without the sanction of the Branch Executive or State Council shall be liable to bear the responsibility of such action. Members ceasing work under the direction of the Branch Executive or State Council shall not return to work without the sanction of the Branch Executive or the State Council. 32 Under the AWU Rules, therefore, a "serious" industrial dispute (such as where the dispute could attract a pecuniary penalty) must be conducted in accordance with Rule 64. In a dispute, under Rule 64(2), members of the AWU have to comply with all the directions of the officers of the Branch (in this circumstance, Mr Anderson). Under Rule 64(4) the Secretary of the Branch (in this circumstance, Mr Gillespie) shall communicate with the AWU State Secretary and both are obliged to assist in resolution of the dispute. In the application of the Rules to the circumstance revealed before me, I do not consider a conflict is revealed as asserted by Mr Warren. Under Rule 64(2) members were subject to directions from the State Council or Branch Executive or otherwise the directions of the officers of the Branch. 33 To summarise, the AWU Union's delegates, are, under the AWU Rules, called representatives (Rule 60). The moving mind, under the AWU Rules, must be the Branch Secretary, State Secretary and the Branch Executive or State Council through direction from the organiser (known as representatives) of the Union. The Union is only liable for the actions of its members or its representatives if the actions are caused or created or condoned by the moving mind, the Union, through its officers in accordance with the relevant Union Rules. Consideration 34 It is necessary to comment that the court is considering penalty for a breach of the Act which breach is of a civil not a criminal nature. I adopt the reasoning of Haylen J in BHP Steel Ltd v The Australian Workers' Union, New South Wales [2003] NSWIRComm 151 in this regard: 96 . . . Firstly, the tortuous route by which a penalty imposed under s 139 might be recovered in circumstances which could lead to imprisonment under the Fines Act does not, in my view, meet the requirement referred to in Gapes, namely, that a legislative intention to characterise particular conduct as criminal should be found only where such intention is made clear expressly or by implication. The second matter is that, viewed in the context of the Act and in the context of its own provisions, s 139 appears to be a quite distinct approach by the legislature occurring in an arbitral context. The orders may only be made when the Commission is dealing with an industrial dispute in arbitration proceedings. The Commission is empowered by s 139(3)(f) to make any other determination that the Commission considers would help in resolving the industrial dispute. Those provisions, placing s 139 in an arbitral/dispute resolution context, and the quite separate provisions of the Act dealing with criminal proceedings for offences against the Act, in my view, demonstrates the legislature's intention that proceedings under s 139 are civil in nature. 97 . . . Once it is determined that, on its proper construction, a proceeding is a civil proceedings, then s 141 of the Evidence Act requires that the civil onus will apply. It appears that, in the proceedings before Marks J in the Department of Education case, the parties did not deal with the operation of the Evidence Act. As noted earlier, his Honour concluded that s 139 proceedings were civil in nature but having regard to the severity of some of the penalties available determined that the criminal onus was applicable. Section 141 of the Evidence Act does not permit such an approach. (see also Peterson J in Ian Robertson v Marrickville Council [2003] NSWIRComm 394 at [28]). 35 The consideration is also relevantly affected by s140 of the Evidence Act 1995 which section set the ambit of the inquiry made as to liability for the breach (see prior judgment). 140 Civil proceedings: standard of proof . . . (2) Without limiting the matters that the court may take into account in deciding whether it is so satisfied, it is to take into account: (a) the nature of the cause of action or defence; and (b) the nature of the subject-matter of the proceeding; and (c) the gravity of the matters alleged. 36 The first issue raised and addressed by both parties is whether there was a breach by the Union of the Orders of the Commission on 28 February 2003. Further facts must be ascertained. The union official, Mr Anderson, wrote a resolution, on late Friday afternoon, recommending strike action but he wrote the resolution at a time when there were no Orders of the Commission related to the dispute. There is no evidence that later at the time the night shift members voted to strike - which members were acting on the recommendation of the union – that the union at the time of the vote had any knowledge of the Orders of the Commission. 37 I have found at the time on the night shift that the members voted to take the stoppage the evidence discloses the members and some delegates knew about the Dispute Orders (Judgment at [81]). While I accept the Union members and delegates knew of, and breached, the Orders on the Friday evening, on the evidence, I cannot accept the onus has been met to establish that the Union, against which this prosecution lies, at the time the vote was taken by the members on Friday 28 February 2003, had any knowledge of the Orders. The Union official was not at the Friday evening meeting. He wrote the recommendation before the compulsory conference was convened or the arbitration hearing was conducted before the Commission. 38 I further reject the proposition that under the Union Rules, delegates and members could act on the Union's behalf without the approval of the moving mind of the AWU, that is, the Branch Secretary, State Secretary and the Branch Executive or State Council or even under the well informed direction of the organiser. The Branch Executive could not have been informed on the Friday evening before the meeting as neither relevant Officer (Mr Anderson) nor the State Secretary (Mr Gillespie) knew on the Friday evening of either the arbitration of the dispute nor the Orders which were issued following the arbitration. While members under the Rules can take direction from the union representative (Rule 60(2)), the union representative had to have known such a directive was in breach of Orders of the Commission. On the Friday evening there is no evidence to establish Mr Anderson had that knowledge and that would be the effect of his draft motion. 39 Mr Warren proposed that as the evening shift meeting went past 11.20 pm (the stated time the Orders were to have effect) the Court in such a circumstance, could infer the Union had the required knowledge. I reject this proposition. The evidence establishes Mr Gillespie was only given notice of a compulsory conference. There was no evidence of service on him of the Orders on the Friday evening or his expectation of such service. There was no evidence tendered, nor submissions relied upon or pressed by the company, as to service on the AWU Head Office. These events have involved the Port Kembla, South Coast and Southern Highlands Branch of the Australian Workers Union. 40 I therefore reject the proposition there was a breach by the AWU of the Commission's Orders of Friday 28 February 2003. 41 As to whether there was a breach on Saturday 1 March 2003, I am satisfied the evidence reveals Mr Anderson attended at the site at the end of a union meeting and was waived away by the union delegate, Mr Karasu, without any discussion. Mr Anderson said: Q. And you attended a meeting, didn't you, at the rail operations department on the 1 March? A. On the morning of the 1 March? Q. Yes, morning? A I wouldn't say I attended a meeting. I went to make sure that the meeting was held and that there was someone there and as I got there it was just wrapping up. Q. The meeting was wrapping up? A. Yes. Q. So you attended at the rail operations department and the meeting was wrapping up? A. Umm umm. Q. What meeting was that? A. On the 1 March, The morning report, the day shift that was in that morning. Q. What was that report? A. A report why there was a dispute from the day before in the afternoon shift. Q. Seeking the support of the day shift? A. Well I think the resolution is that the two shifts have to support - there has to be a support of two shifts. Q. What resolution? A. The resolution of the crews. Q. When was that resolution passed? A. Some many years before my time I am afraid. . . . A. Well that morning meeting apparently carried a resolution to come back on Monday morning. . . . Q. So you went there, did you, to ensure that the next shift voted in favour of the resolution to authorize the 24 hour stoppage? A. Yes. Q. . . . You went to the rail operations department on the morning of 1 March in your words because it requires a majority on at least two shifts to do so, i.e., if there was going to be a strike for 24 hours. So you went there to do something, to ensure there was a correct report back, didn't you. A. Yes. Q. You went there, didn't you, to ensure that the resolution that had been passed the previous afternoon was informed to those employees, didn't you? A. Yes. . . . Q. And you say when you got there you found Mr Karasu was there? A. I saw Mr Karasu, yes. Q. Well he was there, wasn't he? A. Yes. Q. Did you speak to him? A. No. Q. Why not? A. Because he waived me on and said more - more or less indicated that he was all right so I turned and got back in the car. As I have said there was only maybe five employees, left all the others you could see them leaving in their cars. 42 Mr Karasu gave the following evidence: I do not recall seeing Daryl Anderson at all on 1 March 2003. He may have been there but I did not see him. I had been on the telephone trying to contact the Organisers, either Daryl Anderson, Adny (sic) Gillespie or Andrew Gorman. I had not been able to get on to any of them, which did not surprise me, as I understood they were all going to be unavailable that weekend. 43 I find this evidence fails to meet the onus held by the prosecuting company to establish Mr Anderson the relevant Union official and through him, the Union, knew of the Commission's Orders on Saturday 1 March 2003. However, this finding cannot diminish in any way comment as to the behaviour of any Union official who with full knowledge of industrial action on one of his industrial sites does not keep himself fully informed of all the circumstances on that site but rather turns off his mobile telephone and goes away for a day and two nights. Mr Gillespie, as the Branch Secretary, also failed in his duty under the Union Rules. He had knowledge, by a telephone call on the Friday evening, of a compulsory conference to be held related to a dispute on the BHP/Port Kembla site. The Union Rules (Rule 64(4)) places a severe onus on the Secretary of a Branch where there is a serious industrial disputation to take the necessary steps to resolve such a dispute. This did not occur expeditiously. 44 I have found, and the Union has conceded, Mr Anderson and Mr Gillespie became aware on the Sunday morning of the Orders of the Commission. Mr Anderson described the circumstance in which he became aware as follows: Q. And that is when you turned your mobile 'phone on? A. Well, I checked my home 'phone first to see what was on the message bank and there was no messages on the home 'phone. And I then called Mr Gillespie on the home 'phone first because when I read the letters under the door I was in a state of shock to be honest with you and disbelief. I had never really been in a position where there was a late hearing that I didn't know about or anything like that before, I just didn't believe that this was a possibility. I didn't know it could go ahead. I was probably inexperienced I had only been there for 12 months or so. In my experience it never happened and I didn't understand it could happen. And I rang Mr Gillespie to virtually verify that it could happen or it couldn't happen, I suppose. and in my prior judgment, I recited Mr Gillespie's activity as: 67 Mr Gillespie said after arriving in Wollongong late on Friday night and all day Saturday he left his mobile in the car cradle and did not take any messages. On Saturday he played bowls, had a few drinks at the club and went home. He did not check his mobile telephone for messages until about 11am on the Sunday while mowing the lawn. 45 The Union, through its officers, after they had full knowledge of the Commission's Orders, was obliged by mid-Sunday to take the necessary steps to ensure, in accordance with the Orders to facilitate with its members a return to work. There was no endeavour by the Branch Secretary of the union or the union organiser to ensure a return to work by the Sunday afternoon shift. 46 I reject the submission of the Union that its speedy application to the Commission to set aside the Orders is relevant to my consideration as to whether the relevant union officials took all the necessary steps to resolve the dispute. The application to set aside the Orders was not pursued by the union and the Orders of the Commission have therefore been held to be valid given the effect of s179 of the Act. 47 I find, therefore, there was a breach by the Union of the Orders of the Commission on Sunday 2 March 2003. 48 On Monday 3 March 2003, the Union convened an early morning meeting of members but did not again ensure a return to work. Members stayed in the shed until the mid afternoon. Meetings between the Union and the company were held. While such meetings were directed to facilitating a resolution of the dispute they were held in the context of a failure by the Union to recommend a return to work. The circumstances establish there was a breach of the Orders by the Union on Monday 3 March 2003. 49 I find the breach was a deliberate and premeditated contravention of the Orders of the Commission. The actions of the Union therefore on the Sunday and Monday constituted a wilful and serious breach of the Orders made by Grayson DP on the evening of Friday 28 February 2003. The relevant Organiser and Branch Secretary of the Australian Workers' Union made a conscious decision not to comply with the Orders of the Commission. They have not sought to purge or mitigate the breach by any apology or statement of regret although counsel, on their behalf, after the court found the breach established, in this penalty hearing has accepted the court's finding of breach and has requested the court to consider the circumstance in which an appeal from the orders was not pressed. 50 I accept the court should take into account the circumstance in which these Orders were issued. The proceedings moved from conciliation to arbitration without notifying one party to the dispute, namely, the Union. The Union was therefore unable to put any argument and/or take alternative action before the Orders were issued. As I held in the prior Judgment as to the circumstance in which this dispute went to arbitration: 117 In the circumstance, notwithstanding the unacceptable industrial behaviour of the AWU through its activities of its Port Kembla, South Coast and Southern Highland Branch officials and members and their contemptuous attitude to this Commission expressed generally through a lack of respect for the Commission's procedures and orders as Hill J in Re Electricity Commission of NSW so clearly said "the line should be drawn between the conciliation and the arbitration stages" and that is what the scheme of the 1996 Act effectively does. The union was not given the opportunity to be heard at the arbitration of the dispute. It was not notified of the arbitration hearing. The purpose in the scheme of the Act, with the insertion of s135(8), is to ensure an opportunity was given to the relevant parties to a dispute to be heard before arbitration orders are issued. And further: 122 The provisions of s137 of the 1996 Act set up a particular regime which places obligations upon parties in industrial disputes to comply with orders of the Commission. The circumstances before me reveal the industrial behaviour on the part of the union could be held to be an attempt to thwart the powers of this Commission. There cannot be any condonation of such industrial activity or attitude. Nonetheless, the principle of natural justice and ensuring procedural fairness and the non-compliance with the regime outlined in the 1996 Act as to notification to the parties of the move by the Commission from conciliation to arbitration to facilitate a party's right to be heard would generally require the Commission in Court Session to reject this application. (See also [118]-[121]). 51 I held the Orders could have been set aside but for the effect of s179 of the Act directed to the Finality of Decisions of the Commission which I found protected the Orders in the circumstance where no appeal proceeding from the first instance decision was pressed. 52 The Court grapples therefore with a dilemma. Orders were issued in a circumstance where an appeal would have allowed argument for those orders to be set aside on natural justice and procedural fairness principles. Yet I held the Orders, from which no appeal was pursued, were valid given the effect of s179 of the Act which protects decisions and purported decisions of the Commission. That circumstance is to be balanced against the fact there was no imperative acted upon by the Union to ensure a return to work over a two day period once it had knowledge of Orders of the Commission. 53 Mr Warren has submitted adopting the Full Bench reasoning in Australian Workers' Union (NSW) v Bluescope Steel (AIS) Pty Ltd, the circumstances are such that the court should consider this is a most serious breach of the Act. 54 Notwithstanding I have found the breach was a serious breach of the Orders of the Commission, the Union asks for the benefit of mitigation given the circumstance in which the Orders were issued. There is a principle enunciated in the criminal jurisdiction which is of relevance in guiding my consideration of this submission for mitigation as to penalty. 55 In order to properly assess the objective seriousness of an offence it is necessary to identify the offence committed in its context (see Olbrich v R (1998) 45 NSWLR 538). This approach was adopted by WorkCover Authority (Inspector Mason) v Wild Geese Building & Maintenance Pty Limited [2006] NSWIRComm 152 (on appeal) where it was held at [19]: It is necessary, in order to properly assess the objective seriousness of an offence to identify the whole context of the offence actually committed by the defendant. In Olbrich v R (1998) 45 NSWLR 538 it was said (at 542): Whilst the language of aggravation/mitigation is not inappropriate, what is in fact involved is establishing the objective seriousness of the offence. In R v Laurentiu and Becheru , the charge was possession under s 233B(1)(a) of the Customs Act 1901 (Cth) . As Wood J (with whom Sharp J agreed) said (at 416): "... For his Honour to have sentenced either applicant on the bare fact of possession of the cocaine, the substance of the controlled delivery, would have involved serious error. Without the context of the possession, no assessment could have been made as to where the offences fell in terms of objective seriousness, within the range of uses involving possession of not less than, the traffikable quantity of cocaine." Walton J, Vice-President in Department of Mineral Resources of NSW v AM Hoipo & Sons Pty Ltd (2000) 99 IR 137 said at [19]: There remains the consideration of the appropriate penalty for the defendant. As I indicated in Department of of Mineral Resources of NSW (Chief Inspector Bruce McKensey) v Kembla Coal and Coke Pty Limited (unreported, Walton J, Vice-President, Matter No. IRC142 of 1998, 16 August 1999), notwithstanding the plea of guilty, the Court is required to investigate the whole context of the offence in order to determine the objective seriousness of the offence as well as to identify any issues in mitigation or aggravation which should be considered in sentencing. 56 I accept this principle is applicable to an assessment of penalty for this civil breach. The context in which this breach occurred is therefore a matter for consideration. 57 I accept the submission of the Union that once this dispute moved to arbitration a re-assessment of the circumstance by the Union could have taken place especially in a circumstance where the Union Rules specifically require that where the Union could face a pecuniary penalty (Rule 60(4)) the Secretary of the Branch was obliged to involve the State Secretary and both work for the expedient settlement of the dispute. The Union was not given this opportunity in the context in which these orders issued from an arbitration where the Union was not represented. It is at the arbitration stage of a proceeding that a possible pecuniary penalty becomes a reality and the Union under its Rules had to re-assess and involve the State Secretary of the union. This could not occur in the circumstance where there was no knowledge of an arbitration being conducted without the union as a party and from which these Orders were issued. Given the context in which these orders were issued I find it appropriate to allow for mitigation of penalty. 58 I accept the act contemplates only one offence for which penalties may be applied on an accumulating basis for each day of the breach (Australian Workers' Union (NSW) v Bluescope Steel (AIS) Pty Limited (2006) 151 IR 153 at [67] and s139(4) of the Act). 59 The prior industrial record of the Union relating to dispute orders was placed before me (Australian Workers' Union (NSW) v Bluescope Steel (AIS) Pty Ltd (2006) 151 IR 153; Bluescope Steel Ltd (formerly BHP Steel Ltd) v Australian Workers' Union, NSW (2004) 137 IR 176; Bluescope Steel (AIS) Pty Ltd v Australian Workers Union, New South Wales (No 2) (2004) 136 IR 48). They are of relevance in examination of the industrial record of the Union. The Orders in Matter No IRC Nos 4413 of 2002 and 722 of 2003 were issued by Commission later than the dispute orders that were issued by Grayson DP. Given the terms of s139, which state: 139 Contravention of dispute order . . . (4) The maximum penalty that may be imposed on an industrial organisation or employer is: 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. 60 Given the industrial record of the union is before me, it is necessary to determine if penalty has been imposed on the union for an earlier dispute order. Penalty has to already have been imposed and the dispute orders be an earlier one than the present breach, for s139(4) of the Act to have effect. 61 I find the relevant penalty is that defined in s139(4)(a) as from tendered documents it is clear there has been no prior penalty imposed by the Commission on the Union for an earlier dispute at the time Grayson DP issued the relevant Orders. The maximum penalty for a breach of the Dispute Orders therefore is for the first day $10,000.00 and $5,000.00 a day for a breach on each subsequent day (s139(4)(a) of the Act). 62 I accept it is unnecessary to deal with the question of totality. As said by the Full Bench in Australian Workers' Union, New South Wales v Bluescope Steel (AIS) Pty Limited (2006) 151 IR 153: 71 It is unnecessary on this approach to deal with the question of totality. . . . the legislature has dealt with the issue of totality by prescribing lesser penalties on second and subsequent days of a series of contraventions. 63 I therefore take into account the matters raised and considered above and I accept there should be, in the circumstances, the application of mitigation as to penalty for the two breaches of the Act but, given there was a breach of the orders over two days after the union had knowledge of the orders I find a pecuniary penalty is appropriate and necessary: 1. For the breach of Dispute Orders on Sunday 2 March 2003, the Australian Workers' Union, NSW shall pay a fine of $2,000.00. 2. For the breach of Dispute Orders on Monday 3 March 2003, the Australian Workers' Union, NSW shall pay a fine of $1,000.00. 64 In the application of s181(3) and (4) of the Act there shall be no order as to costs. Orders 65 The Court makes the following Orders: 1. For a breach of Dispute Orders, issued by the Industrial Relations Commission of NSW on 28 February 2003, by the Australian Workers' Union, NSW on Sunday 2 March 2003, the Union is fined in the sum of $2,000.00. 2. For a breach of Dispute Orders, issued by the Industrial Relations Commission of NSW on 28 February 2003, by the Australian Workers' Union, NSW on Monday 3 March 2003, the Union is fined in the sum of $1,000.00. 3. A penalty in the sum of $3,000.00 is imposed on the Australian Workers' Union, NSW for a contravention of Dispute Orders issued by the Commission on 28 February 2003. 4. The penalty is to be paid within 28 days. 5. There shall be no order as to costs. 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