Industrial Relations Commission of New South Wales in Court Session CITATION: Australian Workers' Union, New South Wales v Bluescope Steel (AIS) Pty Limited [2006] NSWIRComm 71 APPELLANT Australian Workers' Union, New South Wales PARTIES: RESPONDENT Bluescope Steel (AIS) Pty Limited FILE NUMBER(S): IRC 3681 of 2005 CORAM: Wright J President; Walton J Vice-President; Marks J CATCHWORDS: Appeal - industrial dispute - industrial action - contravention of dispute orders - whether "all reasonable steps" taken to ensure compliance with dispute orders - ancillary orders - whether obligations in ancillary orders are not separate dispute orders - calculation of penalty - construction of s 139(4)(a) - leave to appeal refused and appeal dismissed regarding contravention - leave to appeal granted regarding penalty - appeal allowed as to penalty LEGISLATION CITED: Industrial Relations Act 1996 BHP Steel (AIS) Pty Ltd v CFMEU [2000] FCA 1908 Bluescope Steel Ltd (formerly BHP Steel Ltd) v Australian Workers' Union, New South Wales (2004) 137 IR 176 Bluescope Steel (AIS) Pty Limited v AWU and Anor [2005] NSWIRComm 99 CASES CITED: Bluescope Steel (AIS) Pty Limited v AWU and Anor (No 2) [2005] NSWIRComm 210 Briginshaw v Briginshaw (1938) 60 CLR 336 Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380 Parland Pty Limited & Ors v Mariposa Pty Limited (1995) 5 TASR 121 HEARING DATES: 05/12/2005 DATE OF JUDGMENT: 04/07/2006 APPELLANT Mr A Hatcher, counsel SOLICITORS Maurice May Lawyers LEGAL REPRESENTATIVES: RESPONDENT Mr R Buchanan, QC Mr P Coleman, counsel SOLICITORS Blake Dawson Waldron Lawyers JUDGMENT: INDUSTRIAL COURT OF NEW SOUTH WALES FULL BENCH Coram: Wright J, President Walton J, Vice-President Marks J Friday 7 April 2006 Matter No. IRC 3681 of 2005 AUSTRALIAN WORKERS UNION, NEW SOUTH WALES v BLUESCOPE STEEL (AIS) PTY LIMITED Application by The Australian Workers' Union, New South Wales for leave to appeal and appeal against the decisions of Justice Boland given on 5 April 2005 and 24 June 2005 in Matter No IRC 3226 of 2004. JUDGMENT OF THE COURT [2005] NSWIRComm 71 1 The Australian Workers' Union, New South Wales ("the AWU") has applied for leave to appeal and, if leave be granted, to appeal pursuant to s187 of the Industrial Relations Act 1996 ("the Act") from the judgments of Boland J given on 5 April 2005 and 24 June 2005 in Bluescope Steel (AIS) Pty Limited v AWU and Anor [2005] NSWIRComm 99 and Bluescope Steel (AIS) Pty Limited v AWU and Anor (No 2) [2005] NSWIRComm 210 respectively. 2 The first of those judgments concerned a summons directed to the AWU on the application of Bluescope Steel (AIS) Pty Limited ("Bluescope") to show cause why the Court should not take action against the AWU in respect of alleged contraventions of dispute orders made by Commissioner Connor on 16 and 17 February 2004. 3 Boland J made findings pursuant to s 139 of the Act that the AWU had breached certain of the dispute orders, and the matter was listed for hearing to determine what action should be taken in relation to those contraventions. That hearing was the subject of the second judgment from which the AWU now seeks to appeal, in which Boland J imposed a total penalty of $15,000 on the AWU in respect of the contraventions. 4 On 21 July 2005, the AWU sought and was granted a stay of the penalties imposed in Bluescope (No 2) on condition that the AWU pay a third of the total penalty into its solicitors' trust account, and that the AWU give a written undertaking to the Court that it would diligently prosecute the appeal and promptly pay the balance of the fine, if any, at the conclusion of the appeal proceedings. background 5 The background to this matter, which is set out in detail in Bluescope (No 1), related to a dispute over the outsourcing of part of the Coil Handling and Packaging Operations within the Packaging Products Department at Bluescope's Port Kembla steelworks. The dispute has its origins in mid-2002, when Bluescope began discussions regarding the need to upgrade its operations, which ultimately led, in mid-2003, to Bluescope entering into a service agreement with Brambles Industries Limited for the provision of certain coil handling services. There was no doubt that the Brambles service agreement would directly affect the employment of between 56 and 65 Bluescope employees. Negotiations took place between Bluescope and the AWU regarding the implementation of the Brambles service agreement, however those discussions were punctuated with threats of industrial action (and actual industrial action) and on two occasions - in October 2003 and January 2004 - Bluescope notified the Commission of the existence of an industrial dispute, which matters are not directly relevant to the present appeal. 6 The relevant industrial action, the consequent dispute orders, and the subsequent contraventions occurred during February 2004. 7 On 11 February 2004, Bluescope notified the Commission of a dispute as a result of threatened and then actual strike action by Packaging Products employees. The central protagonists included Mr Andrew Gillespie, the Branch Secretary of the AWU's Port Kembla, South Coast and Southern Highlands Branch and Mr David Hancock, an AWU Organiser. The matter came before Commissioner Connor at 10am on 12 February 2004, recommendations were made, and the industrial action consequently ceased shortly after 3pm that afternoon. Further recommendations were issued on the morning of 13 February 2004. However, at 7am on 16 February 2004, industrial action recommenced and the dispute was re-listed before Connor C at 12 noon, this time for hearing of Bluescope's application for dispute orders. 8 At about 12.45pm on 16 February 2004, Commissioner Connor made the following dispute orders: (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; (ii) The AWU, their respective officers and employees shall take all reasonable steps to ensure compliance with that 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. 9 At 3pm on 16 February 2004, a meeting of the striking Packaging Products and shift mechanical trades employees was held. Notwithstanding the existence of dispute orders, and the attempts by Mr Gillespie to ensure compliance with those orders (which we shall discuss later), the employees voted to remain on strike. A further meeting was held at 7am on 17 February 2004 and resulted in the strike escalating to include not only employees at Bluescope's Port Kembla steelworks, but employees of Bluescope Steel Limited at the Springhill steelworks. 10 At 9.30am on 17 February 2004, Mr Gillespie was interviewed by Radio Illawarra, during which he confirmed that further industrial action was planned. 11 At 11.15am on 17 February, the matter was listed again before Commissioner Connor, and at about 12.45pm the following amended dispute orders were issued: 1. The AWU, the AFMEPKIU and the ETU, their respective officers and employees and their respective members employed by either: (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; 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. 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: (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. 4. This order shall come into effect on and from 3.20pm on Monday (sic - 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 12 Notwithstanding paragraph 3(ii) of the amended dispute orders, the AWU did not convene a meeting of its members by 3.20pm on 17 February 2004. A number of employees reported for work that afternoon and were told by Mr Hancock 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". 13 A meeting of delegates took place late on the afternoon of 17 February 2004, at which time Mr Gillespie again attempted to secure a return to work, however the delegates were opposed to a return to work by striking members. A meeting was held at about 7am on 18 February 2004 for all steelwork employees engaged by Bluescope or Bluescope Steel Limited at the Port Kembla or Springhill steelworks, a vote was taken to return to work, and by approximately 9am that day the striking employees returned to work. 14 On 27 February 2004, a stop work meeting was held, attended by Coil Preparation Line employees. 15 On 3 June 2004, Bluescope filed a summons under s 139 of the Act alleging that, on 16, 17, 18 and 27 February 2004, the AWU had contravened the dispute orders made by Commissioner Connor on 16 and 17 February 2004. For convenience and clarity, in this judgment, we shall refer to the dispute orders made on 16 February 2004 as "the original dispute orders" and the dispute orders made on 17 February 2004 as "the amended dispute orders". The decision below - contravention of dispute orders 16 Boland J held that the AWU had contravened both the original and the amended dispute orders. 17 As to the original dispute orders, his Honour considered the attempts made by Mr Gillespie to secure compliance with those orders at the meeting of striking employees held at 3pm on 16 February 2004. Boland J held that, notwithstanding Mr Gillespie's attempts, he did not take all reasonable steps to ensure compliance, and through his failure, as a senior officer of the AWU, the AWU had contravened the dispute order. In arriving at that conclusion Boland J held:(at [106]): It may be accepted that there was hostility amongst members of the AWU at the meeting on 16 February and I also consider in the circumstances, it was understandable that a union official may have felt some reluctance to direct employees to return to work. But I am bound, I believe to take into account a number of other considerations: 1 Dispute orders are rarely made by members of the Commission. Long experience has demonstrated that most matters can be resolved by conciliation and/or arbitration without resorting to the prospect of sanctions. The making of a dispute order is a serious step given the consequences for contravention. Persons against whom a dispute order is made are bound to take it seriously, especially members, officials and employees of organisations who may be putting in jeopardy the very existence of their organisation. 2 Mr Gillespie is a person of very considerable standing and authority at the steel works. He has a strong personality. He has been associated with industrial relations at the steel works for many years. He was in an environment that was not new to him. Indeed, it was very familiar territory. In my opinion, 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. 3 Unlike the position in BHP v AWU , Mr Gillespie's words to his members on 16 February were not "in the nature of a direction" but only a recommendation; the evidence does not suggest the recommendation was forcefully put by a person with the authority and character to do so. By comparison, Mr Gillespie's attempts at the delegate's meeting on the afternoon of 17 February to secure a return to work were much more forceful (see [131]-[132]). 4 From the outset (when Bluescope signed the agreement with Brambles in July 2003) Mr Gillespie manifested strong feelings about the prosecutor's role in the dispute and threatened stridently throughout, that the prosecutor would not achieve its objectives and that it would result in a serious industrial dispute involving industrial action. This is apparent from the evidence of the prosecutor's witnesses and the transcript of various proceedings in the Industrial Relations Commission. Mr Gillespie said in proceedings before Connor C on 16 February 2004 that he was prepared to "cop" fines in defence of his Union's position. The unmistakeable inference is that Mr Gillespie was pre-disposed to a course of action that could lead to a contravention of dispute orders. In his submissions to Connor C on 16 February Mr Gillespie stated: Whatever's going to happen …we are prepared as a union to say, "we are not prepared to tolerate what these people want to introduce". If we think it's going to get bigger, then yes, Commissioner, it is going to get bigger, because there is a, quite a significant issue at stake in this particular matter which doesn't only affect the tin mill. It affects all of BHP. 5 That pre-disposition extended to widening the dispute to include the Hot Strip Mill, Plate Mill, Slab Yard and Springhill. As early as Friday 13 February 2004, before any resolution was passed at the meeting on 16 February for delegates in these other areas to be advised of the dispute, Mr Gillespie advised Mr Meena, the President of the Springhill operation, the dispute would escalate to include those areas. Mr Gillespie said in his evidence that he only indicated to Mr Meena that there was the "potential" for the dispute to spread to those other areas. Whatever words Mr Gillespie used, widening the dispute was clearly in his mind on 13 February. Whilst Mr Gillespie said he was only carrying out the directions of the meeting on 16 February in advising delegates in the Hot Strip Mill, Plate Mill and Slab Yard of the dispute in the Packaging Products Department, which had the effect of widening the industrial action, I consider it is more probable than not that Mr Gillespie knew that his advice to the delegates would mean a widening of the dispute and he took no reasonable steps to prevent that occurring. 18 Similarly, his Honour considered whether the conduct of union officials, including Mr Gillespie, at the meeting at 7am on 17 February 2004 contravened the original dispute orders. He had regard to the circumstances existing at the time, including the angry mood of the employees, and found: [113] Notwithstanding these circumstances, I am not satisfied the union officials took all steps that were reasonable to take to achieve compliance with the dispute orders. That is, the officials did not use their best efforts to get the members to return to work. It may have been the case that a direction by AWU officials would not have achieved compliance, although I am not entirely convinced that the issuing of a direction was not a reasonable step to take. Mr Gillespie was empowered, under the rules of his organisation, to make a direction under rule 64(2). Members of the Union are required to comply with such a direction. ... [117] However, I do not rely on the fact that no direction was given to sustain a finding that all reasonable steps were not taken on 17 February to comply with the dispute orders. I consider that, short of making a direction, reasonable steps were not taken. I do not consider recitation of the orders or a strong recommendation following "heated" debate constituted Mr Gillespie speaking emphatically to his members or that his words were in the nature of a direction, as was the case with Mr Anderson in Bluescope v AWU. [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. 19 As to the amended dispute orders, Boland J considered the conduct of Mr Hancock on the afternoon of 17 February 2004 and held (at [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. 20 Boland J considered that the holding of the meeting on 18 February 2004, whilst in contravention of the amended dispute orders, was arguably the only reasonable step available to the AWU to bring about a cessation of the industrial action, and therefore that the AWU had taken all reasonable and necessary steps on 18 February 2004 to ensure compliance with order 1 of the amended dispute orders. 21 However, although the holding of the mass meeting on 18 February 2004 was found not to be in contravention of the amended dispute orders, Boland J found that the organising of that meeting on the evening of 17 February 2004 did constitute a contravention of the amended dispute orders. His Honour held (at [134]-[136]): In the face of the delegates' rejection of a return to work of striking members Mr Gillespie opted for his fall back position, namely, a mass meeting the next day, 18 February, when he said he would have the numbers to outvote those who wanted to continue with industrial action. The AFMEPKIU supported this position. The organising of the mass meeting on 18 February 2004 was in contravention of order 2 of the amended orders by both the AWU and the AFMEPKIU. Mr Hatcher submitted that the Court was faced with something of a paradox in relation to the organising of the meeting on 18 February. He said that whilst it caused a stop work meeting of a wider group of employees, it was also the means by which a return to work was achieved. Mr Hatcher submitted the Court should dismiss the matter under s 139(3)(a) of the Act. On the other hand, of course, the organising of the stop work meeting on 18 February 2004 may not have been necessary if the AWU had dealt with the outsourcing issue in a responsible fashion in its early stages or if AWU officials had taken reasonable steps to comply with the Commission's orders relating to the earlier episodes of industrial action. I find there was a contravention of order 2 of the amended orders at the delegates' meeting on 17 February by both the AWU and AFMEPKIU. The nature of the contravention and the circumstances in which it occurred may be a matter for consideration in any proceedings pursuant to s 139(3) of the Act but I am not prepared, at least at this stage, to dismiss the matter under s 139(3)(a). 22 As to the stop work meeting on 27 February 2004, Boland J held (at [143]): My view of the evidence is that the meeting was organised, encouraged or incited by the AWU through Mr Gillespie and/or Mr Hancock and was a breach of orders 2 and 3 of the amended dispute orders of 17 February 2004. 23 His Honour's summary of his findings as to contravention were as follows (at [144]): Having regard to the reasons expressed in this decision I make the following findings: 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. The decision below - penalty 24 Section 139(4) of the Act is in the following terms: 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. 25 As to penalty, Boland J made the following findings in Bluescope (No 2) (at [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. ... the appeal 26 The AWU raised twenty grounds of appeal, which can be summarised as follows: (1) Grounds 1 to 3 alleged that Boland J erred in finding that, on 16 February, the AWU contravened a dispute order in that he: (a) erred in finding that by calling a meeting, reading the dispute order, explaining its implications, recommending a return to work and telling employees they were obliged to return to work, the AWU failed to take all reasonable steps to achieve compliance with the dispute order; and (b) erred in finding that a failure to take steps which, on the evidence, would not have achieved compliance, constituted a failure to take all reasonable steps to ensure compliance. (2) Grounds 4 to 6 alleged that Boland J erred in finding that, on 17 February, the AWU contravened a dispute order in that he (a) erred in finding that the AWU contravened a dispute order by organising a meeting of employees that was intended to ensure (and did achieve) a return to work; and (b) erred in finding that a breach occurred by reference to a separate breach, and to conduct which pre-dated the making of the dispute order. (3) Grounds 7 to 10 alleged that Boland J erred in imposing a total penalty of $15,000 in that: (a) the penalty referred to findings of breaches which were themselves erroneous; (b) the penalty is manifestly excessive; and (c) his Honour gave insufficient weight to the steps actually taken by the AWU to seek to ensure compliance with the dispute orders. (4) Grounds 11 to 20 alleged that Boland J erred by determining the penalty contrary to s 139 of the Act in that he: (a) incorrectly treated each part of a dispute order as a separate order for the purposes of identifying the maximum penalty applicable under s 139(4) of the Act; (b) erred in penalising the AWU for the breach of a dispute order on 16 February 2004 by reference to conduct which occurred prior to the making of the dispute order; (c) effectively penalised the AWU twice for conduct which occurred on 17 February 2004, and twice for conducted which occurred on 27 February 2004; (d) penalised the AWU for conduct on 17 February 2004 which was intended to, and did, achieve a return to work in accordance with the dispute orders; (e) penalised the AWU for breach of a dispute order on 27 February 2004 by reference to conduct which occurred prior to, rather than on, that date; (f) gave "insufficient weight to the insignificance of conduct found to have occurred on 17 and 27 February 2005 [sic] in breach of a dispute order in the context of [Bluescope's] overall operations"; and (g) incorrectly took into account a lack of contrition. 27 The AWU was represented in these proceedings by Mr A Hatcher of counsel. Mr R Buchanan, QC appeared for Bluescope with Mr P Coleman of counsel. the awu's submissions 28 As to Boland J's findings that the AWU had breached the original dispute orders on 16 February 2004, the AWU submitted that his Honour incorrectly concluded that Mr Gillespie's conduct constituted a breach of the original dispute order. In that respect, the AWU referred to the five matters which Boland J expressly took into account in arriving at that conclusion, being the matters identified by his Honour in Bluescope (No 1) at [106]. First, it was the AWU's submission that, whilst the making of dispute orders is a serious matter, that proposition does not by itself bear directly on the question of contravention. Secondly, the AWU relied on Parland Pty Limited & Ors v Mariposa Pty Limited (1995) 5 TASR 121 at 133 and Bluescope v AWU at [71] in submitting that a party does not fail to take a reasonable step where, even if that step had been taken, it would have made no difference to the outcome. In those circumstances, given Mr Gillespie's evidence that a "stronger and more effective stand" would have been counter-productive, it was not open to Boland J to conclude that the AWU had failed to take all reasonable steps to ensure compliance with the dispute orders. Thirdly, the AWU submitted that Boland J fell into serious error by drawing an inference from Mr Gillespie's conduct that he was "predisposed to a course of action that could lead to a contravention of a dispute order". According to the AWU, such an inference offends the principle in Briginshaw v Briginshaw (1938) 60 CLR 336 at 362 per Dixon J which applies to matters of this seriousness. In any event, Mr Gillespie's perceived predisposition did not manifest itself in his conduct on 16 February 2004, nor was it relevant. 29 As to Boland J's findings that the AWU had breached the original dispute orders and the amended dispute orders on 17 February 2004, it was submitted by the AWU that "in the face of this finding that the holding of the mass meeting on 18 February was the only reasonable step left to ensure compliance with the dispute order, and did not constitute a breach of the dispute order, it was, with respect, a complete contradiction to find that the organising of that same meeting at the delegates' meeting on 17 February constituted a contravention of the dispute order rather than also being a reasonable step to ensure compliance with it." 30 As to the maximum penalty applicable under s 139, the AWU submitted that Boland J incorrectly treated each part of the dispute orders as a separate order for the purpose of identifying maximum penalties. For instance, on 27 February 2004 the AWU was penalised for both failing to cease and refrain from organising, encouraging or inciting industrial action as well as for failing to take reasonable and necessary steps to ensure that the cease and refrain order was complied with. 31 According to the AWU, s139(4)(a) must be construed within the context of Part 2 of Chapter 3 of the Act as a whole. The power to make an ancillary order (such as an order requiring an organisation to take reasonable steps to ensure members cease or refrain from taking industrial action) is part of the single exercise of the power to make a dispute order of the kind referred to in s 137(1)(a), and it is that single exercise of power to which the maxima specified in s 139(4) were intended to apply. It was submitted that the construction of s139(4) adopted by Boland J would "lead to absurd results", where the maximum penalty for a breach would vary depending upon the way a dispute order is drafted: orders may be contained within a single paragraph (and so treated as a single order subject to a single maximum penalty) or expressed in a number of paragraphs (and potentially attracting separate and additional maximum penalties). It was submitted that this was "plainly not what the legislature intended", and that the better approach, consistent with s 137, is to treat the exercise of power pursuant to s 137(1)(a), however expressed, as a single dispute order for the purpose of s139(4). 32 The AWU further submitted that Boland J incorrectly treated the original and amended dispute orders as separate orders. For instance, on 17 February 2004 the AWU was penalised twice: once for breach of the original dispute order for its conduct in the morning and again for breach of the amended dispute order for its conduct in the afternoon, with the latter breach attracting a higher maximum penalty pursuant to s139(4)(a). The correct approach, it was submitted, was that there was a single dispute order for the purposes of s 139(4)(a), attracting a maximum penalty of $10,000 for the breach on 16 February, and maxima of $5,000 for subsequent breaches on 17 and 27 February. 33 The AWU submitted that these errors resulted in double counting of the relevant penalties, or an incorrect assessment of the range in which the penalty ought to be assessed, on both 17 and 27 February 2004. 34 In the alternative, the AWU submitted that the penalties imposed by Boland J were manifestly excessive. 35 Mr Gillespie's conduct at the meeting of employees on 16 February 2004, which formed the primary basis for the first contravention, must be assessed at the low range of culpability: although Boland J found the AWU did not take all reasonable steps, it did take a number of reasonable steps including calling the meeting before the dispute order was due to take effect; explaining the effect of the order and recommending compliance. In BHP Steel (AIS) Pty Ltd v CFMEU [2000] FCA 1908 the CFMEU was found to have taken no steps at all to comply with the relevant order, and made no attempt to explain or justify its failure in this regard, yet the penalty imposed was $2,200 (with a potential maximum of $10,000). 36 For similar reasons, the contravention arising from the meeting on 17 February should be assessed as one of low-range culpability. The contravention was no more than a failure to take a more forceful or persuasive stand at the meeting. This by itself could not take the matter beyond the low range of culpability. Further, the penalty was assessed relative the wrong maximum: instead of $15,000 the maximum should have been $5,000. 37 In relation to the delegates meeting that evening, Boland J's found that the holding of the meeting was the only reasonable step remaining to the AWU to ensure compliance with the dispute order, notwithstanding that it constituted a technical breach. His Honour found that it would have been "perverse" not to impose a penalty and referred to his earlier finding that "if AWU officials had taken reasonable steps to comply with the Commission's orders relating to earlier episodes of industrial action" the mass meeting may not have been necessary. Since the AWU had already been penalised for the earlier contraventions it was erroneous to have taken them into account as a reason for the imposition of a further penalty. 38 In relation to the penalty for 27 February 2004, the principle of totality would not permit the AWU to be fined twice for what was essentially the same conduct, namely the holding of a stop work meeting. Further, in effectively assessing culpability as falling within the mid-range, Boland J failed to take into account or give sufficient weight to the insignificant nature of the stop-work meeting: it was brief and only involved employees of the Coil Preparation Line. 39 Although in assessment of penalties in civil cases the presence of contrition may be taken into account as a mitigating factor, Boland J erred in that his Honour appears to have taken the absence of contrition into account as an aggravating factor. bluescope's submissions 40 Bluescope made a number of written submissions which we summarise as follows: (1) A central part of Boland J's task was to decide whether all reasonable steps were taken to comply with the dispute orders, as well as whether encouragement was given to breach them. The findings of fact required resolution of competing and conflicting testimony and the making of value judgments: matters particularly in the province of the trial judge. A clear case of error would, therefore, need to be demonstrated before the Full Bench would make its own assessment of the facts based on the evidence at first instance. (2) The findings that contraventions had actually occurred, leading later to the imposition of penalties, were fair, moderate, clearly open on the facts as found and not attended by error such as would invite correction on appeal. (3) The conclusions of Boland J that the AWU had contravened the original dispute order (ii) on both 16 and 17 February 2004; the amended dispute order 2 on 17 and 27 February 2004; and the amended dispute order 3 on 17 and 27 February 2004 were carefully explained and sustained by clear factual findings. Such factual findings were reasonably open to his Honour. (4) No real challenge is made to His Honour's factual conclusions in relation to the first breach on 17 February 2004. Rather, the AWU submitted that the matter was insignificant. It makes no difference that the group of employees Mr Hancock was addressing at that moment was small. On Boland J's findings, the contravention was a deliberate attempt to frustrate the operation of the amended dispute orders. (5) The second contravention on 17 February of Order 2 was constituted by organizing a mass meeting at Wollongong Showground on 18 February. The showground was booked at about 9.25 a.m. on 17 February. This was well before the amended dispute orders were made and the subsequent delegate's meeting which rejected a return to work. At this stage, the meeting for 18 February was clearly planned. Proceeding with those arrangements after the making of the amended dispute orders was a clear breach of those orders (as it would have been of the original orders). (6) His Honour made clear findings of fact in relation to the events on 27 February 2004 and the character of the conduct of Mr Gillespie and Mr Hancock in that regard. On the basis of those findings His Honour concluded, correctly, that contraventions of both orders 2 and 3 of the amended dispute orders had occurred. Again, no real challenge is made to these findings. The argument is that the breach was not serious. (7) Boland J found that aspects of the amended dispute orders involved new and discrete obligations, and that failure to satisfy these obligations attracted a possible maximum penalty of $10,000 in its own right for that reason. This approach was clearly sustainable so far as order 2 of the amended dispute orders is concerned, regardless of whether those orders are treated as an amendment of the original dispute orders or as new orders in their own right. (8) Additionally, however, Boland J concluded that contravention of separate obligations on a single day might lead to the imposition of more than one penalty for that day. Notwithstanding that the prosecutor did not contend that multiple breaches of discrete obligations on the same day might attract more than one penalty on that day, Boland J was free to come to his own view about the proper construction and application of s 139(4). No breach of natural justice was thereby committed and his Honour's approach should not be disturbed on appeal. It should be noted, moreover, that in the present case Boland J was careful not to penalise twice for breach of the same substantive obligation. (9) There is no substance to the complaint that Boland J's construction of s 139(4) would lead to "absurd results". There is nothing novel in the idea that an instrument made under the authority of a statute may impose several, discrete, independent obligations. It is not necessary, for the purposes of enforcement, that separate instruments be created for each obligation. Any such suggestion is an appeal to empty formalism. Penalties for breaches of industrial instruments or the Act itself are available where a relevant obligation exists, without the drafting complexities suggested by the AWU in its written submissions. No different approach is necessary in the case of dispute orders made under s 137. (10) It is incorrect to suggest that the penalties were inflated because no contrition had been shown. Mr Gillespie's attitude before Commissioner Connor and his Honour was a relevant matter to mention. It was in contrast with his preparedness to give undertakings in other proceedings. It meant that no reduction in penalty could be expected for this factor. That is clearly how Boland J approached the matter. (11) The principal of totality was correctly regarded by Boland J as inapplicable to the matters before him. As his Honour observed, the legislature has dealt with the issue by prescribing lesser penalties on second and subsequent days of a series of contraventions. Assuming it is appropriate to fix separate penalties for contravention of discrete aspects of a dispute order then no error is shown if the penalties are fixed independently and then aggregated. The fact that the obligations, and the contraventions, are discrete in character is an important distinction. leave to appeal 41 The matter is one in which leave to appeal is required pursuant to s 188 of the Act. The AWU submitted that the appeal raises "issues of principle and law which are novel, substantial in nature and have wider implications for the jurisprudence of the Commission". Those issues, according to the AWU, relate to the construction and application of s 139(4) of the Act in relation to the imposition of a penalty for breach of a dispute order and the assessment of such penalty. 42 The AWU further submitted that leave to appeal is warranted because the findings at first instance, as to both contravention and assessment of penalty, involved substantial errors of law, and as such, were inconsistent with established law and principle. 43 We are satisfied that the issues raised as to the assessment of penalty pursuant to s139(4) of the Act have some novelty, raise substantial issues of law and principle, and have implications for the wider jurisprudence of the Commission: Knowles v Anglican Church Property Trust (No 2) (1999) 95 IR 380 at 382. Leave to appeal, in that respect, is granted. 44 As to the appeal regarding contravention of the dispute orders, those matters essentially involve a challenge to factual findings. Given that we consider his Honour's findings as to contravention of the dispute orders were reasonably open to him on the facts, leave to appeal would not ordinarily be granted. However, the matter also raised significant questions about the proper approach to the assessment of culpability where contraventions of dispute orders are alleged. We propose granting leave to appeal in order to deal with those matters, but only to the extent that they arise from the findings that the dispute orders were contravened on 16 February 2004. For reasons which we shall give later in our decision, leave to appeal is refused in relation to the findings that the dispute orders were contravened on 17 February 2004, on the basis of an absence of utility of the appeal. CONSIDERATION Appeal against the finding that dispute orders were breached on 16 February 2004 45 The AWU contended that Mr Gillespie had taken all reasonable steps to achieve compliance with the dispute orders. In support of that contention the AWU referred to the fact that Mr Gillespie called a meeting of Packaging Product employees and Shift Mechanical Trades employees on 16 February 2004 at which time he explained the outcome of the proceedings before Connor C, he told them that dispute orders had been issued, he explained the implications of those orders, including that the employees were obliged to return to work, and he recommended a return to work. 46 At the heart of this aspect of the appeal is a question of fact: should Mr Gillespie have directed the employees to return to work? Mr Gillespie gave evidence before Boland J that, having regard to the angry mood amongst employees at the meeting, it would not have been "of any use whatsoever" to issue a direction, and would have inflamed the situation. Accordingly, the AWU submitted that, having regard to the facts and circumstances existing at the time, Mr Gillespie had taken all reasonable steps to ensure compliance with the dispute orders. 47 We are satisfied that Boland J had appropriate regard to the steps taken by Mr Gillespie to attempt to ensure compliance with the dispute orders, and the circumstances in which Mr Gillespie addressed the meeting of striking workers. Those circumstances included Mr Gillespie's strong personality, his considerable standing and authority amongst the workers, his extensive experience dealing with industrial action, and his strong feelings about the events at the steel works which gave rise to the dispute. We are equally satisfied that it was open to his Honour, based on the particular facts and circumstances of the matter, to find that Mr Gillespie could have taken a "stronger and more effective stand" at the meeting on 16 February 2004; that a direction to comply with the dispute orders could have been given; that a direction was not given; and therefore, that all reasonable steps to ensure compliance with the dispute orders had not been taken. 48 In addition to challenging the factual finding regarding the contravention of the dispute orders on 16 February 2004, the appeal raises a question of law as to what constitutes a failure to take "all reasonable steps". 49 The AWU relied on the following passage in Bluescope Steel Ltd (formerly BHP Steel Ltd) v Australian Workers' Union, New South Wales (2004) 137 IR 176 (at [71]) in support of its contention that Boland J failed to find that a failure to take a particular step which, on the evidence, would not have achieved compliance constituted a failure to take all reasonable steps,: The case law clearly establishes that the extent of the obligation to take "reasonable steps" depends on the particular circumstances existing at the time the obligation arises. Further, we consider that, in the context of the orders made by Connor C, the obligation, as with the requirement to use "best endeavours", refers to all steps that are reasonable to take, and does not extend to all steps that are reasonably open in some narrow or theoretical sense (which could encompass, for example, matters not directly within the particular knowledge or experience of a relevant party). 50 Whether or not a particular step, if taken, would have made a difference to the outcome of a dispute is relevant to the determination of whether there has been a breach of a dispute order. However, a finding that a particular step would have made little or no difference to the resolution of a dispute does not necessarily lead to a finding that all reasonable steps were therefore taken, or that there has been no contravention of a dispute order. BHP v AWU is not authority for the proposition that such findings correlate in that way. There was no error of law or principle in his Honour's decision in that respect. 51 In any event, there is no suggestion in Bluescope (No 1) that Boland J accepted the AWU's contention that it would have made no difference to the outcome of the dispute had Mr Gillespie taken a stronger stand. His Honour considered that more could, and should, have been done by Mr Gillespie at the meeting on 16 February 2004. Implicit in Boland J's judgment is the conclusion that Mr Gillespie may well have effected compliance with the dispute orders had he done so. 52 As earlier stated, we are satisfied that his Honour's factual findings in relation to the contravention of dispute orders on 16 February 2004 were reasonably open on the evidence, and disclose no appealable error. Appeal against the finding that dispute orders were breached on 17 February 2004 53 We agree with Mr Hatcher that the divergent findings regarding the organising and holding of the meeting on 18 February 2004 appear illogical. 54 As a matter of policy, we agree that if useful and productive steps are being taken to eradicate a strike, then such steps should be encouraged. In the present matter, the meeting on 18 February 2004 successfully achieved a return to work, albeit by way of a wider stop work meeting. The findings made by Boland J in relation to the organising and holding of the meeting on 18 February 2004 are not only contradictory, but contrary to the objects of the Act. 55 However, ultimately we agree with Mr Buchanan that, given no penalty was awarded in respect of the contravention, there is no utility in this aspect of the appeal. We do not propose to grant leave. 56 The AWU further contended that Boland J erred in "finding that a breach of a dispute order occurred on 17 February 2004 by reference to a separate breach of the dispute order and to conduct which pre-dated the making of the dispute order". The basis for this contention appears to arise solely from the following passage in Bluescope (No 1) (at [135]): On the other hand, of course, the organising of the stop work meeting on 18 February 2004 may not have been necessary if the AWU had dealt with the outsourcing issue in a responsible fashion in its early stages or if AWU officials had taken reasonable steps to comply with the Commission's orders relating to the earlier episodes of industrial action. 57 We consider there is no merit in this contention, and given our view in relation to the utility of the appeal in this respect, leave to appeal is refused. Appeal against calculation of penalty 58 We agree with the AWU that Boland J's approach to the assessment of penalties was affected at the outset by the erroneous construction of s 139(4)(a) of the Act, and the erroneous application of that provision to the facts of this case. 59 This matter raises two questions as to penalty. First, should separate paragraphs, or separate obligations, in a dispute order be treated as separate orders for the purposes of the statutory maxima prescribed in s139(4)(a) of the Act? Secondly, should the amended dispute orders in the present matter be treated as separate orders, to the extent that they impose new or different obligations, for the purposes of determining penalty? 60 We consider both questions must be answered in the negative. It follows that we agree with the AWU that there has been a single contravention of the dispute orders for which a single penalty should be given on a continuing basis. 61 The exercise of power by the Commission under s 137(1)(a) to make dispute orders includes the power to make ancillary orders. Such ancillary orders do not constitute separate dispute orders (for which separate penalties may be imposed in the event of breach) but remain part of the single exercise of power under s 137(1) of the Act (see BHP v AWU at [34]-[36]). To interpret Part 2 of Chapter 3 any other way would be incongruous: the number of obligations imposed on an organisation or employer, and therefore the extent of exposure to penalty, would be entirely dependant on the manner and style in which the orders were drafted. For instance, a dispute order may impose obligations with respect to organising, inciting and encouraging industrial action either as a single obligation or as separate obligations. The manner in which the dispute order is constructed would, if separate obligations are treated as separate dispute orders, have significant implications when determining the maximum penalty to be applied pursuant to s 139(4) in the event of a breach. 62 We agree with Mr Buchanan that it is the single exercise of power under s 137, which includes the power to make such ancillary orders as are necessary to give effect to the statutory purpose of that section, to which the maximum penalties specified in s 139(4) were intended to apply. Accordingly, we consider that Boland J erred in treating the separate paragraphs, or separate obligations, in both the original dispute orders and the amended dispute orders as separate orders for the purposes of calculating penalty. 63 In our view, Boland J further fell into error by treating the orders in the amended dispute orders, to the extent that they varied from the original dispute orders, as "new" and separate. This error is evident in Bluescope (No 2) where his Honour held (at [32]): Order 3 of the amended dispute orders made on 17 February may be regarded as an amended 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 $5,0000. ... and at [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. 64 His Honour's approach was incorrect for a number of reasons. First, as a matter of statutory construction, there was only one contravention for which one penalty is available, arising from one incident of industrial action. 65 Secondly, as a matter of substance, there is no difference between orders 1, 2 and 3 of the amended dispute orders. Orders 2 and 3 are facilitative and do not create new obligations. We do not consider that the ancillary or facilitative orders have a different quality to the "cease and refrain" order, although a contravention may be established by a failure to take those steps even if a breach of the primary obligation is not made out. 66 Finally, as a matter of form, the Summons to Show Cause alleges only one contravention. The Summons is framed in the following terms: It is alleged that on 16, 17, 18 and 27 February 2004 you contravened the dispute orders made by Commissioner Connor of the Industrial Relations Commission of New South Wales on 16 and 17 February 2004 in matter number IRC 423/04 under sections 137 and 138 of the Industrial Relations Act 1996. 67 Whilst the Summons refers to the series of dates on which the contraventions were alleged to have taken place, it does so in the context of making an allegation of contravention of the original dispute orders. The amended dispute orders were a continuation of the original dispute orders, and did not impose fresh obligations or provide the basis for separate allegations of contravention. Accordingly, the charge contemplates only one offence for which penalties may be applied on an accumulating basis for each day of the breach. 68 It follows from our findings that Boland J calculated penalties contrary to s 139(4) of the Act in two ways: First, rather than imposing a single penalty for each day on which the dispute orders were breached, his Honour treated the obligations in the dispute orders as separate orders, and determined separate penalties for each contravention, resulting in the imposition of multiple penalties for contraventions which occurred on a single day. For instance, separate penalties were imposed for contraventions of orders 2 and 3 of the amended dispute orders, both of which occurred on 27 February 2004. Secondly, his Honour incorrectly assessed separate penalties for the contravention of separate obligations within the dispute orders, rather than for the single, ongoing contravention of the dispute orders, resulting in the maximum penalty of $10,000 (being the maximum penalty applicable for the first day of a contravention) being applied more than once. For instance, the maximum penalty of $10,000 was applied in respect of the contravention of the original dispute orders on 16 February 2004, and was again applied in respect of the contravention of order 2 of the amended dispute orders on 17 February 2004, that order being treated by Boland J as a "new order contravened for the first time". 69 In summary, the maximums applied by his Honour, and the penalties imposed, were as follows: Maximum applied Penalty imposed (s 139(4)(a) (1) in relation to the original dispute orders: breach of order (ii) on 16 February 2004 $10,000 $4,000 breach of order (ii) on 17 February 2004 $5,000 $2,500 (2) in relation to the amended dispute orders: breach of order 2 on 17 February 2004 $10,000 $4,500 breach of order 3 on 17 February 2004 $5,000 $0 breach of order 2 on 27 February 2004 $5,000 $2,000 breach of order 3 on 27 February 2004 $5,000 $2,000 Total penalty $15,000 70 Given our findings that there was only one contravention, which was ongoing, the maximum penalty should have been $10,000 for breach of the dispute orders on 16 February 2004, and $5,000 for breaches on subsequent days, that is, 17 and 27 February 2004. No penalty was imposed for contravention of dispute orders on 18 February 2004, but if it were, a maximum of $5,000 would have applied for such a breach, being a subsequent day of the ongoing contravention. 71 It is unnecessary on this approach to deal with the question of totality. We consider that Mr Buchanan correctly submitted that the legislature has dealt with the issue of totality by prescribing lesser penalties on second and subsequent days of a series of contraventions. 72 We agree with the reasoning adopted by Boland J in determining the quantum of the penalties imposed. 73 In the circumstances, we consider the following penalties appropriate: Maximum applied Penalty imposed (s 139(4)(a) (1) breach of dispute orders on 16 February 2004 $10,000 $4,000 (2) breach of dispute orders on 17 February 2004 $5,000 $2,000 (3) breach of dispute orders on 27 February 2004 $5,000 $2,000 Total penalty $8,000 74 There should be no order as to costs: see s 181(3) and (4) of the Industrial Relations Act. orders 75 We make the following orders: (1) Leave to appeal is granted except with respect to the finding as to contravention of dispute orders on 17 February 2004, where for reasons we have given, leave should be refused as there is no utility in the appeal. (2) The appeal is upheld with respect to calculation of penalty. (3) The penalty of $15,000 imposed by Boland J on 24 June 2005 is quashed and a penalty of $8,000 is substituted. (5) The stay order made on 21 July 2005 is lifted. (5) No order as to costs. 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. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.