Industrial Relations Commission of New South Wales CITATION: Director-General, NSW Department of Education and Training v NSW Teachers Federation [2010] NSWIRComm 44 PARTIES: Director-General, New South Wales Department of Education and Training (Prosecutor) New South Wales Teachers Federation (Respondent) FILE NUMBER(S): IRC 98 of 2010 CORAM: Staff J CATCHWORDS: INDUSTRIAL DISPUTE - Contravention of dispute order - TAFE Institutes - Dispute over Award made by Full Bench - Factors to be taken into account in determining penalty - Contravention admitted - Penalty imposed - S 139 Industrial Relations Act 1996 LEGISLATION CITED: Industrial Relations Act 1996 Australian Workers' Union NSW v Bluescope Steel (AIS) Pty Ltd (2006) 151 IR 153 BHP Steel (AIS) Pty Ltd (now known as BlueScope Steel (AIS) Pty Ltd) and The Australian Workers' Union, NSW [2006] NSWIRComm 263 BHP Steel Ltd v The Australian Workers' Union, New South Wales [2003] NSWIRComm 151 Bluescope Steel (AIS) Ltd v AWU and Anor (No 2) [2005] NSWIRComm 210 Bluescope Steel (AIS) Pty Ltd v Australian Workers' Union, New South Wales [2006] NSWIRComm 274 Bluescope Steel Ltd (formerly BHP Steel Ltd) v Australian Workers' Union, New South Wales (No 2) (2005) 141 IR 329 Bluescope Steel Ltd (formerly known as BHP Steel Ltd) v The Australian Workers' Union, New South Wales [2006] NSWIRComm 338 Bluescope Steel v Australian Workers' Union, New South Wales (No 3) [2006] NSWIRComm 307 CASES CITED: Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No. 2) (1999) 94 IR 231 Director-General, Department of Education and Training v New South Wales Teachers' Federation [2000] NSWIRComm 103 Director General, NSW Department of Education and Training v NSW Teachers Federation [2009] NSWIRComm 147 Director General, NSW Department of Education and Training v NSW Teachers Federation [2010] NSWIRComm 10 Hadgkiss v Aldin and Others (2007) 164 FCR 394 Markarian v The Queen (2005) 228 CLR 357 R v Olbrich (1999) 199 CLR 270 R v O'Neill [1979] 2 NSWLR 582 R v Thomson; R v Houlton (2000) 49 NSWLR 383 HEARING DATES: 15 March 2010 DATE OF JUDGMENT: 9 April 2010 Mr M Kimber SC with Ms M Fraser of counsel (Prosecutor) NSW Department of Education and Training and TAFE LEGAL REPRESENTATIVES: Mr S Crawshaw SC with Mr M Gibian of counsel (Respondent) NSW Teachers Federation Mr M Lennon (Intervenor) Unions NSW JUDGMENT: - 1 - INDUSTRIAL COURT OF NEW SOUTH WALES CORAM: STAFF J Friday 9 April 2010 Matter No IRC 98 of 2010 DIRECTOR-GENERAL, NEW SOUTH WALES DEPARTMENT OF EDUCATION AND TRAINING AND THE MANAGING DIRECTOR OF TAFE v NEW SOUTH WALES TEACHERS FEDERATION Application pursuant to section 139 by the Director-General, New South Wales Department of Education and Training and the Managing Director of TAFE as to alleged contravention of dispute orders issued by Justice Boland, President on 4 February 2010 in Director General, NSW Department of Education and Training v NSW Teachers Federation [2010] NSWIRComm 10 JUDGMENT [2010] NSWIRComm 44 1 On 10 February 2010, the Industrial Court of New South Wales issued a summons, on the application of the Director-General, Department of Education and Training and the Managing Director of TAFE ("the Prosecutor") on the New South Wales Teachers Federation ("the Federation"), to show cause why the Court should not take action against the Federation for contravention of dispute orders made by Boland J President on 4 February 2010, under s 137 and s 138 of the Industrial Relations Act 1996 ("the Act") in matter No IRC 30 of 2010. 2 In an amended application, the contravention was alleged to have occurred on 11 February 2010. 3 At the commencement of the hearing on 15 March 2010, Mr S Crawshaw SC, who appeared with Mr M Gibian of counsel for the Federation, informed the Court that the Federation admitted to a contravention of the dispute order. The record of admission was: On 11 February 1010, in contravention of the order made by Boland J President on 4 February 2010 in matter IRC 30 of 2010, the NSW Teachers Federation took industrial action, in that approximately 4,000 employees of the Managing Director of TAFE who are members of the Federation, took industrial action in the form of a 24 hour strike, and this industrial action was authorised by the Federation. 4 On the basis of this admission, the Prosecutor withdrew an alleged further contravention of order 2 made by Boland J on 4 February 2010. It follows that this judgment concerns the issue of what action should be taken pursuant to s 139(3) of the Act in relation to the contravention of the dispute order. This section relevantly provides: 139 Contravention of dispute order ... (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. 5 Mr M Kimber SC, who appeared with Ms M Fraser of counsel for the Prosecutor, pressed for a substantial penalty pursuant to s 139(3)(e) of the Act. Mr Crawshaw submitted that the Court should take no further action in relation to the contravention and dismiss the matter. Alternatively, senior counsel submitted that any penalty imposed upon the Federation should be at the lower end of the range. 6 Section 139(4) of the Act sets out the maximum penalties that may be imposed as follows: 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. Background 7 The background to this matter was set out in detail by Boland J in Director General, NSW Department of Education and Training v NSW Teachers Federation [2010] NSWIRComm 10. His Honour described the history leading to the making of dispute orders as follows: [1] On 4 February 2010, on the application of the Director General of the New South Wales Department of Education and Training and Managing Director of TAFE New South Wales ('the Department'), the Commission made dispute orders requiring the New South Wales Teachers Federation, by its officers, employees and members employed by the Managing Director of TAFE, to refrain from taking industrial action in connection with the Federation's opposition to the implementation of the variations to the Crown Employees (Teachers in TAFE and Related Employees, Bradfield College and Teachers in TAFE Children's Centres) Salaries and Conditions Award 2009 flowing from the decision of the Full Bench in Crown Employees (Teachers in TAFE and Related Employees, Bradfield College and Teachers in TAFE Children's Centres) Salaries and Conditions Award 2009 [2009] NSWIRComm 169. Further that the Federation, its officers, employees and members, were to cease and refrain from authorising, organising, supporting, encouraging or inciting industrial action. What follows are the reasons for the decision to make the orders. [2] On 13 January 2010, the Department notified the existence of an industrial dispute involving industrial action that had occurred and further threatened industrial action by the New South Teachers Federation and its members employed in TAFE. The Commission takes the view that the subject matter of the notification were the same matters that were the subject of proceedings in Matter No IRC 513 of 2008 and that the notification in Matter No IRC 30 of 2010 did not constitute a new or fresh dispute. In the former proceedings conciliation was unsuccessful and a certificate of attempted conciliation had been issued. Arbitration ensued, but the matters that were the subject of the dispute continue to be in dispute, as manifested by the industrial action that has occurred and the further industrial action that is threatened. Industrial action [3] The industrial action and the accompanying campaign appear to be directed to at least three ends: to protest against a decision of the Full Bench of this Commission given on 15 October 2009 in respect of variations made to the Crown Employees (Teachers in TAFE and Related Employees, Bradfield College and Teachers in TAFE Children's Centres) Salaries and Conditions Award 2009 ('the Award'): Crown Employees (Teachers in TAFE and Related Employees, Bradfield College and Teachers in TAFE Children's Centres) Salaries and Conditions Award 2009 [2009] NSWIRComm 169; to pressure the New South Wales Government to not implement the decision of the Full Bench; and to garner the support of school teachers for the stance taken by the Federation and its TAFE members and to have those teachers join the campaign in 2010. 8 His Honour detailed information about the industrial campaign that was being conducted by the Federation since the Full Bench issued its decision on 15 October 2009 (at [4] - [8]). His Honour proceeded to summarise the proceedings which had been conducted by the Commission arising from a notification of dispute by the Department, observing at [15]: In my opinion, given the position of the parties, there would be no utility in further conciliation. The Federation's position expressed most strongly in its communication to members is that it opposes the implementation of the Full Bench decision of 15 October 2009 and has set its face against observing the terms of the award variations arising from that decision. Despite having provided to them the opportunity for discussions about terms for resolving the dispute the parties have been unable to do so. In my view it would not be a proper use of the conciliation processes under the Act and would be against the public interest for a Member of the Commission to engage in conciliation where one party is seeking an outcome entirely inconsistent with a recent Full Bench decision and the terms of a current Award and the other party has indicated it may be prepared to concede that aspects of the decision and the award variations would not be implemented. The proper course, and one I commend to the parties, is for an application to be made under s 17 of the Act. 9 His Honour referred to the Full Bench's decision and observed at [20] that the industrial action planned by the Federation was entirely without justification, in particular, his Honour observed at [20]: An important consideration of the Full Bench in deciding to vary the Award in terms of Schedule B to the Department's application was that the Federation had committed itself to an arbitration in the event the parties were unable to agree on the necessary employee related reform measures and cost savings to fund the salary increase above 2.5 per cent. That is to say, the Federation agreed that in the absence of the matter being settled by the parties themselves, the Full Bench should determine the necessary employee related reform measures and cost savings. That is what the Full Bench did. 10 His Honour set out his conclusions at [22] - [27]: [22] The Federation has made a number of specific criticisms of the Full Bench decision. Most of the criticisms contain a distortion of the actual position. It was suggested, for example, that the Full Bench valued each additional hour of teacher time at less that $3. The Full Bench found that NSW TAFE teachers at the top of the salary scale are currently the highest paid TAFE teachers in Australia. The total annual hours for a TAFE teacher is 1435. The annual salary for a top of the scale teacher from 1 January 2010 is $81,656, making an hourly rate of $56.90. [23] It was further contended by the Federation that teachers will be directed by managers 'as what to do in their duties relating to teaching time'. The Award requires that all teachers will have an 'approved program' that meets the particular Institute's needs and that managers will determine, in consultation with teachers, the duties related to teaching that form part of that program. Any dispute in relation to such matters will be dealt with in accordance with the dispute resolution procedure in the Award. [24] The Federation committed itself to a certain course that involved arbitration in the event conciliation failed. It committed itself to finding employee related cost savings to fund a significant salary increase and in doing so acknowledged that one of the Department's objectives was an increase in direct teaching hours if other savings could not be identified. The Federation did not identify appropriate reforms that would deliver the cost savings it accepted were necessary. In accordance with the process that had been agreed, the matter proceeded to arbitration before a Full Bench. The Federation presented its evidence and submissions using senior and junior counsel and there is no question it was given every opportunity to make out its case. [25] Notwithstanding that the Federation, for many years, has relied on this Commission to deliver wage justice for its members, and there can be no doubt it has been successful in that regard, on this occasion the Federation has decided it does not like the outcome. In what is a dishonest campaign, the Federation has pressured the Government not to implement the Full Bench's decision under threat of industrial action. That pressure appears to have been successful, at least in part, as the Department had indicated to TAFE teachers it was prepared, unilaterally, to postpone implementation of aspects of the award variations. How the Department believes it is open to simply ignore the terms of the Award it so strongly contended for is not apparent, but in any event its concessions have not been enough for the Federation. [26] Resort by the Commission to the making of dispute orders is a rare occurrence in this jurisdiction. In the great majority of cases, the processes of conciliation and arbitration that are available to the parties resolve the dispute. On this occasion, the Federation has chosen to thumb its nose at those processes, leaving the Commission with no choice but to make dispute orders. [27] I would recommend to the Federation that it pause to consider the path it is on and the damage that may ensue to its standing as an industrial organisation registered under the Industrial Relations Act as well as the disruption that will be caused to students and others by its unmeritorious conduct. 11 His Honour's orders and directions were: [31] The Commission confirms the orders made in this matter on 4 February 2010 as follows: A. Pursuant to s 136(1)(c) and s 137(1)(a) of the Industrial Relations Act 1996 the Commission makes the following orders: 1. The NSW Teachers Federation by its officers, employees and members employed by the Managing Director of TAFE are hereby ordered to refrain from taking industrial action in connection with the Federation's opposition to the implementation of the variations to the Crown Employees (Teachers in TAFE and Related Employees, Bradfield College and Teachers in TAFE Children's Centres) Salaries and Conditions Award 2009 flowing from the decision of the Full Bench in Crown Employees (Teachers in TAFE and Related Employees, Bradfield College and Teachers in TAFE Children's Centres) Salaries and Conditions Award 2009 [2009] NSWIRComm 169. 2. The NSW Teachers Federation, its officers, employees and members employed by the Managing Director of TAFE are hereby ordered to cease and refrain from authorising, organising, supporting, encouraging or inciting industrial action, for a period of three months in connection with the Federation's opposition to the implementation of the variations to the Crown Employees (Teachers in TAFE and Related Employees, Bradfield College and Teachers in TAFE Children's Centres) Salaries and Conditions Award 2009 flowing from the decision of the Full Bench in Crown Employees (Teachers in TAFE and Related Employees, Bradfield College and Teachers in TAFE Children's Centres) Salaries and Conditions Award 2009 [2009] NSWIRComm 169. B. Pursuant to s 136(1)(a) of the Industrial Relations Act 1996, the Commission makes the following directions: 1. The NSW Teachers Federation and its officers are hereby directed to take all reasonable steps to ensure that the employees and the members of the NSW Teachers Federation comply with orders A1 and A2, including notifying its members of the said orders by posting the Orders in a prominent position on its website no later than 4 February 2010. 2. Service of orders A1 and A2 and direction B1 may be effected by sending a facsimile copy to the NSW Teachers Federation or by handing a copy of these orders and directions to an officer or employee of the NSW Teachers Federation by 5.00 pm on 4 February 2010. C. Pursuant to s 136(1)(a) of the Industrial Relations Act 1996, the Commission makes the following direction: 1. These orders and directions shall take effect from 4.00 pm on 4 February 2010 and shall remain in force for three months unless, on formal application, they are varied or rescinded in the meantime. Submissions of the Prosecutor 12 Mr Kimber commenced his submissions by observing that s 139 of the Act was not an offence provision and hence proceedings seeking the imposition of penalties for non-compliance with dispute orders are not criminal proceedings: BHP Steel Ltd v The Australian Workers' Union, New South Wales [2003] NSWIRComm 151 at [94] - [99]. 13 Senior counsel submitted that it has been established that, in deciding what approach to take in the fixing of a penalty, a court will take into account a number of matters, including the following: (a) dispute orders are rarely made by the Commission as most matters can be resolved by conciliation and/or arbitration without resorting to the prospect of sanctions. Accordingly, the making of a dispute order is a serious step given the consequences for contravention and 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: see 138 IR 324 at [106]; see also Director General, NSW Department of Education and Training v NSW Teachers Federation [2009] NSWIRComm 147 at [27] - [28]; (b) the circumstances in which the relevant contravention took place (including whether the contravention was undertaken in deliberate defiance or disregard of the dispute order); (c) whether the person found to have been in contravention of a dispute order has been found to have engaged in conduct in contravention of an earlier dispute order (in this respect see s 139(4)(b), which provides for higher maximum penalties where there has been an earlier contravention); (d) the consequences of the conduct found to be in contravention of the dispute order; (e) the importance to the employer of the work disrupted by the industrial action, and whether or not the employees involved in that industrial action knew of its importance; (f) whether the industrial action was contrary to the provisions of an agreed industrial instrument (given that "the quality of observance of such agreements is both strict and solemn"); (g) whether or not the officials of the union in breach of the dispute order were aware of the significance of the work that was disrupted by the industrial action; (h) whether any commitment was given by the defaulting union that its members would henceforth comply with its obligations under the said industrial instrument; (i) the importance of deterring industrial organisations and their members from engaging in industrial action contrary to their obligations under industrial instruments and contrary to dispute orders made by the Commission; See Full Bench in Bluescope Steel Ltd (formerly BHP Steel Ltd) v Australian Workers' Union, New South Wales (No 2) (2005) 141 IR 329 at [4] and Boland J in Bluescope Steel (AIS) Ltd v AWU and Anor (No 2) [2005] NSWIRComm 210 at [37] - [39]. 14 Mr Kimber observed that s 139(2) of the Act requires the Court to consider submissions from a person alleged to have contravened the dispute order as to "why the Court should not take action for the contravention". Senior counsel noted that there are precedents for the Court not imposing any penalty under s 139(4) of the Act, even in circumstances where the contravention was held to be serious: Bluescope Steel (AIS) Pty Ltd v Australian Workers' Union, New South Wales [2006] NSWIRComm 274 at [43] - [45]. 15 Factors and/or circumstances identified by the Court that have supported such an outcome, included the following: (a) where the contravener apologised to the Court for the breach and made a public declaration of belief in, and a willingness to uphold, the integrity of the Commission (such as to instil confidence that there would be no conduct of a similar kind in the future: see Director-General, Department of Education and Training v New South Wales Teachers' Federation [2000] NSWIRComm 103 at [8] - [9]); (b) where officers of the union in breach of the dispute order asserted, in sworn evidence accepted by the Court, that they had not been conversant with the central importance of particular aspects of the employing company's business (that was adversely impacted upon by the industrial action); that they had now become fully aware of the obligations of its members in relation to that matter; and indicated to the Court that the union would ensure compliance with this particular business requirement (ie. the union had demonstrated its commitment to honouring the agreement it had made with the company): see Bluescope Steel Ltd (formerly BHP Steel Ltd) v Australian Workers' Union, New South Wales (No 2) AT [2] - [5]; (c) where the officials of the contravening union via sworn evidence accepted by the Court had held an honest and genuine belief that the dispute orders did not apply to the industrial action in question and there was a reasonable foundation for that belief: see Bluescope Steel at [50]; and (d) where there was evidence that the contravening union had been labouring under a misapprehension as to the scope of the dispute orders (based, in effect, on a misunderstanding of the relevant provisions of the Act with such misunderstanding since being pointed out by a Full Bench of the Court) with an associated statement of regret in respect of that misunderstanding and a commitment to regulate its conduct in accordance with the now clarified operation of dispute orders: see Bluescope Steel at [50] - [51]. 16 Senior counsel observed that, whilst the Prosecutor acknowledged that there were precedents where no penalties had been imposed in spite of a finding that a serious breach of dispute orders had occurred, there were no circumstances that would lead to a similar conclusion in the present case. Accordingly, Mr Kimber contended that a substantial penalty would be appropriate. Submissions of the Federation 17 Mr Crawshaw submitted that where the Court is considering the imposition of a penalty under s 139(3)(e), it should have regard to a range of considerations. In Bluescope Steel (AIS) Ltd v AWU and Anor (No 2) [2005] NSWIRComm 210, Boland J (after referring to the decision of Branson J in Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No. 2) (1999) 94 IR 231), set out a series of matters that may be relevant in considering a contravention of dispute orders. His Honour's reasoning in determining the quantum of penalties to be imposed was approved by the Full Bench in Australian Workers' Union NSW v Bluescope Steel (AIS) Pty Ltd (2006) 151 IR 153 at [72]. 18 Mr Crawshaw submitted that the contravention before the Court was constituted by a single breach of the dispute order, namely, that industrial action took place on 11 February 2010. Senior counsel observed that it should be noted that a plea of guilty only carries with it an admission of the essential legal ingredients of the offence admitted by the plea. Any facts beyond that, and particularly those that are said to aggravate the offence, must either be agreed, or proved in accordance with the relevant principles: see R v O'Neill [1979] 2 NSWLR 582 at 588 - 589 and R v Olbrich (1999) 199 CLR 270 at [25] - [28]. 19 Senior counsel submitted that the industrial action the subject of the contravention, was of a relatively short duration (only 24 hours) and was scheduled in advance permitting TAFE Institutes to prepare and implement contingencies. It was observed that this was not a case in which the Federation sprung industrial action upon an employer to cause maximum disruption and damage. 20 Senior counsel contended that the industrial action was undertaken in the context of a dispute as to the implementation of the TAFE Award. The industrial action was taken because of delays in negotiations to resolve a dispute that had caused frustration on the part of its members within TAFE. 21 Mr Crawshaw observed that the Prosecutor had relied on the decision of Boland J when making the dispute order, as relevant to the conduct of the Federation in taking the industrial action. Senior counsel submitted the most relevant section of the judgment to the conduct of the Federation was that which described the resolution of the Federation's Executive, which resulted in industrial action on 11 February 2010, set out at [6] of his Honour's judgment: Additionally, the evidence indicated that on 3 February 2010 Mr John Dixon, Acting General Secretary, was signatory to an email to TAFE members in the following terms: Dear Colleagues, Tonight the Teachers Federation Executive carried the following: Given the lack of progress in the TAFE dispute, including the failure of the government to honour the undertaking given by the Premier at a meeting at Unions NSW on 18 December 2009 for her office to continue discussions with the Federation on the dispute, Executive determines to call a 24 hour stoppage of all TAFE members on Thursday 11 February 2010. Members are advised that a major rally will be held in Sydney Town Hall at 11.00 am on the day of the strike. It is essential that all TAFE members attend as members will vote on further action. 22 Senior counsel submitted that the dispute had been subject to discussions between the Federation and the Premier of New South Wales, together with the Premier's representatives, which had resulted in a successful resolution of the dispute. Mr Crawshaw observed that the fact that the dispute has been resolved, is plainly relevant to the determination of whether the Court ought to take any action with respect to the contravention: Bluescope Steel Ltd (formerly known as BHP Steel Ltd) v The Australian Workers' Union, New South Wales [2006] NSWIRComm 338 at [40]. It followed, so it was submitted, in light of the resolution of the dispute, that there was no need for the Court to take any action with respect to the contravention in order to help in resolving the dispute. There was no necessity for a penalty to be imposed to restore "industrial order" or prevent the escalation of the dispute, as the dispute had been settled. 23 Mr Crawshaw noted that the Federation had not previously been the subject of any penalty for contravening dispute orders of the Commission. Senior counsel referred to Director-General, Department of Education and Training v New South Wales Teachers' Federation [2000] NSWIRComm 103, where Marks J dismissed proceedings against the Federation without imposing any penalty, although his Honour did find a contravention had occurred. The circumstances of the contravention which took place 10 years ago and which the Commission was satisfied no penalty was warranted, should be disregarded, so it was submitted, when considering this matter. 24 It was submitted that there was no evidence as to the consequences of the industrial action that took place on 11 February 2010 and, contrary to what was submitted by the Prosecutor, there was no onus on the Federation to demonstrate the extent of the consequences of the industrial action. This was something about which the Prosecutor was best placed to give evidence. Although the Federation accepted that an inference could be drawn that some students were inconvenienced by the cancellation of classes, it was submitted that there was no evidence that teaching programmes were disrupted in a manner that could not be recovered in the course of the semester, or that any loss of revenue occurred. It was further submitted that it could be inferred that the financial position of TAFE was improved by being relieved of the cost of the salaries of teachers who took part in the industrial action. It followed, so it was submitted, in those circumstances, no particular weight could be attached to the consequences of the conduct. 25 Mr Crawshaw, in addressing the principle of deterrence, submitted that there was no reason to believe that the Federation was likely to contravene dispute orders in the future, particularly having regard to the settlement of the dispute that gave rise to the dispute orders, and in addition, that it had not been subject to any penalty for contravening dispute orders in the past. These factors indicated that very little (if any) weight should be given to specific deterrence in the determination of penalty: Bluescope Steel (AIS) Ltd v AWU and Anor (No 2). 26 Senior counsel observed that the Court has, on other occasions, stated that the incidence of contraventions of dispute orders is rare, or almost non-existent. In those circumstances, it was submitted, any element for general deterrence must be small in this type of matter: Bluescope Steel (AIS) Ltd v AWU and Anor (No 2) at [53]; Bluescope Steel Ltd (formerly known as BHP Steel Ltd) v The Australian Workers' Union, New South Wales. 27 In dealing with the subjective factors, Mr Crawshaw pointed to the admission by the Federation. Senior counsel observed the fact that the Federation had admitted the contravention was the equivalent of a plea and the utilitarian value of the plea, thereby saving cost and expense on the part of the parties and the Court, ought to be acknowledged in the determination of what, if any, penalty should be imposed: Bluescope Steel Ltd (formerly known as BHP Steel Ltd) v The Australian Workers' Union, New South Wales at [41]; Hadgkiss v Aldin and Others (2007) 164 FCR 394 at [92]. 28 In criminal proceedings, a plea of guilty entered before a trial should receive a discount of up to 25 per cent on the penalty that may otherwise be imposed in recognition of the evidence of contrition, utilitarian value and witness vulnerability. Reliance was placed on R v Thomson; R v Houlton (2000) 49 NSWLR 383 where the Court stated at [3]: It has long been the practice of this Court that a plea of guilty should attract a lower sentence than would otherwise be imposed. Three reasons are usually advanced to justify the practice. First, the plea is a manifestation of remorse or contrition. Secondly, the plea has a utilitarian value to the efficiency of the criminal justice system. Thirdly, in particular cases — especially sexual assault cases, crimes involving children and, often, elderly victims — there is a particular value in avoiding the need to call witnesses, specially victims, to give evidence. 29 The admission by the Federation of a contravention of the dispute order constitutes evidence of contrition, and recognition of conduct in breach of its obligations under the dispute order. It should be given proper weight should the Court be giving consideration to the imposition of a penalty. 30 In conclusion, Mr Crawshaw submitted that, having regard to the resolution of the underlying dispute, the fact that no penalty had previously been imposed upon the Federation and the absence of any need to give weight to general or specific deterrence, that no action need be taken by the Court. In the alternative, it was submitted, any penalty imposed upon the Federation should be at the lower end of the range. 31 Mr M Lennon was granted leave pursuant to s 167(3) of the Act to intervene in the proceedings on behalf of Unions NSW. Mr Lennon supported the submissions of the Federation and submitted that, taking into consideration all of the particular circumstances relied upon by the Federation, no action need be taken by the Court to impose a penalty. Mr Lennon emphasised that the dispute which he had also been involved in had now been resolved. Consideration 32 At the commencement of these reasons, it is appropriate that I make a finding in terms of the admission made by the Federation. I find that, pursuant to s 139 of the Industrial Relations Act 1996, on 11 February 2010, the New South Wales Teachers Federation contravened order 1 made by Boland J on 4 February 2010 in Director General, NSW Department of Education and Training v NSW Teachers Federation. 33 Section 139(4)(a) provides that the maximum penalty that may be imposed for the contravention of a dispute order is a penalty not exceeding in total $10,000 for the first day the contravention occurs and an additional $5,000 for each subsequent day on which the contravention continues. The Court has found that there was a contravention of order 1 made by the Industrial Relations Commission on 4 February 2010. 34 In Bluescope Steel (AIS) Ltd v AWU and Anor (No 2) Boland J (as he then was) in considering the imposition of a penalty under s 139(3)(e) stated: [36] In Construction, Forestry, Mining & Energy Union v Coal & Allied Operations Pty Ltd (No. 2) (1999) 94 IR 231, Branson J considered the principles that should inform a court in determining the amount of penalty to be imposed on a defendant for the contravention of Part XA - Freedom of Association of the Workplace Relations Act 1996 (Cth). At [8] of her judgment her Honour stated: [8] The following matters, which are not intended to comprise an exhaustive list, seem to me to be considerations to which the Court may appropriately have regard in determining whether particular conduct calls for the imposition of a penalty, and assuming that it does, the amount of the penalty: (a) The circumstances in which the relevant conduct took place (including whether the conduct was undertaken in deliberate defiance or disregard of the Act); (b) Whether the respondent has previously been found to have engaged in conduct in contravention of Pt XA of the Act; (c) Where more than one contravention of Pt XA is involved, whether the various contraventions are properly seen as distinct or whether they arise out of the one course of conduct; (d) The consequences of the conduct found to be in contravention of Pt XA of the Act; (e) The need, in the circumstances, for the protection of industrial freedom of association; and (f) The need, in the circumstances, for deterrence. [37] The list of relevant matters identified by her Honour is helpful in compiling a similar list that may be relevant in respect of contraventions of dispute orders under s 139 of the Industrial Relations Act where the conduct constituting a contravention calls for the imposition of a penalty under s 139(3)(e). In my opinion, the matters that may be considered to be relevant and appropriate are: (a) The circumstances in which the relevant contravention took place (including whether the contravention was undertaken in deliberate defiance or disregard of the dispute order); (b) Whether the person found to have been in contravention of a dispute order has previously been found to have engaged in conduct in contravention of an earlier dispute order (in this respect see s 139(4)(b), which provides for higher maximum penalties where there has been an earlier contravention); (c) The consequences of the conduct found to be in contravention of the dispute order; (d) The need, in the circumstances, for deterrence; (e) Any relevant subjective factors including undertakings regarding future conduct. 35 His Honour's reasoning in determining the quantum of penalty to be imposed was approved by the Full Bench in Australian Workers' Union NSW v Bluescope Steel (AIS) Pty Ltd at [72] (although the penalties imposed were themselves overturned for other reasons relating to the maximum penalties applicable to the contraventions). 36 In exercising the discretion as to an appropriate penalty under s 139(3)(e) of the Act, it is necessary for the Court to consider the overall culpability of the guilty person, whilst noting that the imposition of a penalty under s 139 is not an application of the criminal law: see BHP Steel Ltd v The Australian Workers' Union, New South Wales (at [94] - [99]). Regard must also be had to the fact that the legislature has provided for a higher maximum penalty for the first day of the contravention and a lower penalty for each subsequent day the contravention occurs. 37 In my view, contrary to the Federation's submissions, this is plainly a serious offence. In deciding what approach to take in the fixing of a penalty, I take into account the following: (a) the circumstances in which the contravention took place must result in a conclusion that the contravention was undertaken in blatant and deliberate defiance of the dispute order made by Boland J. The executive of the Federation took a conscious decision in the face of the dispute orders to proceed with "a 24 hour stoppage of all TAFE members on Thursday 11 February 2010"; (b) the contravention of the dispute order resulted in approximately 4,000 employees of the Managing Director of TAFE taking 24 hour strike action; (c) the inconvenience to students through the cancellation of classes; (d) that it is absurd to contend that a financial benefit was obtained by TAFE from the illegal strike action because of the savings in the salaries of teachers who took industrial action; (e) the observations of Boland J that the industrial action planned by the Federation was entirely without justification (at [20]); (f) that the making of a dispute order is a serious step given the consequences for contravention and 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: see observations of Boland J (at [26]); (g) the failure of the Federation to apologise to the Court for the breach and to make a public declaration of belief in, and a willingness to uphold the integrity of the Commission: Director-General, Department of Education and Training v New South Wales Teachers' Federation (at [8] - [9]). To the extent that the Federation submitted that its contrition should be taken to have included such factors, I am not prepared to interpret the Federation's contrition as embracing such broad terms; (h) that there was no evidence, nor could there have been, that the Federation had been labouring under a misapprehension as to the scope of the dispute orders; (i) that the Federation committed a single breach of the dispute order. 38 It follows that in light of such factors, the Federation has engaged in serious industrial misconduct. In my view, and I find, this was a serious contravention of a dispute order which cannot be left unsanctioned. It requires some form of condign punishment. However, it does not fall into the worst class of case, as the industrial action occurred on a single day. 39 I accept the submission by Mr Crawshaw that, following the industrial action taken by the Federation, the dispute was settled and that this was plainly relevant to the determination of whether the Court ought to take any action with respect to the contravention. The dispute was the subject of discussions between the Federation and the Premier, together with the Premier's representatives, with the achievement of a successful resolution. 40 I respectfully agree with the observations of Haylen J in Bluescope Steel v Australian Workers' Union (at [40]) that "... It is also of some relevance that the dispute is no longer a live issue calling for the Commission's intervention to restore industrial order and that the parties have now long settled the issues ...". 41 Absent this factor, I would have been disposed to impose a significantly higher penalty. I should add that in light of Boland J's judgment (at [6], set out at [21] of this judgment), I am prepared to draw an inference that the Executive of the Federation was instrumental in bringing about a settlement of the dispute. 42 I consider the penalty should be in the mid range. The contravention of dispute order 1, as I have already observed, arose out of the deliberate flouting of a dispute order. Whether previous contravention 43 The Federation has not previously been the subject of any penalty for contravening dispute orders of the Commission. In Director-General, Department of Education and Training v New South Wales Teachers' Federation, Marks J dismissed proceedings against the Federation without imposing any penalty, although his Honour did find a contravention had occurred. I was informed that there are currently proceedings before his Honour alleging contravention of a dispute order made in 2009 by the Commission: Director General, NSW Department of Education and Training v NSW Teachers Federation [2009] NSWIRComm 147. 44 On 26 October 2009, the Prosecutor commenced proceedings in Matter No IRC 1679 of 2009 alleging breaches of earlier orders made by the Commission on 1 September 2009. Those proceedings, unfortunately, are yet to be finalised. Consequences of the conduct found to be in contravention of the dispute order 45 The consequences of the conduct found to be in contravention was the disruption to teaching programmes and the inconvenience to students caused by the cancellation of classes. There was also the unnecessary loss of wages incurred by employees involved in the industrial action. The contravention was of a relatively short duration, being 24 hours. The need for deterrence 46 The Federation has previously contravened a dispute order. There is no evidence that it is likely to contravene a dispute order in the future, although it is noted that no undertakings were given to the effect that the Federation would not do so or would make best endeavours not to do so in the future. I do not agree with the submission of Mr Crawshaw that there is very little weight to be given to the need for specific deterrence in the determination of penalty. The Federation has been found guilty on a previous occasion. I therefore propose to include an element in the penalty for specific deterrence. 47 It is appropriate to include in the penalty an element to deter others from contravening dispute orders. I note that this Court has observed on previous occasions, that the incidence of contraventions of dispute orders are rare or almost non-existent: see Bluescope Steel (AIS) Ltd v AWU and Anor (No 2) (at [53]); Bluescope Steel Ltd (formerly BHP Steel Ltd) v Australian Workers' Union, New South Wales (No 2) (at [34]). It follows that any element for general deterrence must be small. Relevant subjective factors 48 The Federation has admitted to the contravention of the dispute order and submitted that it is the equivalent of a plea and the utilitarian value of the plea ought to be acknowledged in the determination of any penalty to be imposed. To the extent that the Federation relied upon Bluescope Steel Ltd (formerly BHP Steel Ltd) v Australian Workers' Union, New South Wales (No 2) at [41], it is distinguishable because Haylen J accepted a submission that the apology and regret for the action had been tendered through counsel to the Commission on behalf of the registered union. Mr Crawshaw submitted that the admission by the Federation of the contravention of the dispute order constituted evidence of contrition and recognition of the conduct in breach of its obligations under the dispute order. I propose to take into account the Federation's contrition. However, in doing so, I note that the Federation has neither apologised to the Court for the breach, nor has it made a public declaration of belief in, and a willingness to uphold the integrity of the Commission. 49 To the extent that it was submitted that the admission made by the Federation should be treated as a plea of guilty as entered in criminal proceedings, and receive a discount of 25 per cent for the utilitarian value of the plea, I reject such a submission. These are not criminal proceedings and although I accept that the admission is a manifestation of remorse or contrition, I do not propose to apply strictly the principles in R v Thomson; R v Houlton. However, I do propose to discount the penalty that I would have otherwise imposed upon the Federation for the saving of costs and expenses, and the time of the Court in dealing with this matter. Penalty 50 It is important that careful attention be given to the maximum penalty in determining sentence: see Markarian v The Queen (2005) 228 CLR 357 at [30] - [31]. 51 I find that in light of the orders made by Boland J, and the subsequent conduct of the Federation, that it did not intend to comply with the dispute orders. This finding must result in a further finding that the Federation wilfully disobeyed dispute order 1 made by his Honour and therefore the contravention is of a serious nature. The 24 hour strike was a protest stoppage, which had, as its aim, a desire by the Federation to overturn the decision of the Full Bench in arbitration proceedings. It follows that the contravention of dispute order 1 made by Boland J, was deliberate and pre-meditated. 52 In Director-General, Department of Education and Training v New South Wales Teachers' Federation, Marks J, after finding that the Federation had contravened a dispute order made by the Commission, did not proceed to impose a penalty on the Federation for the following reasons: [9] Notwithstanding the serious nature of the contravention I am, however, persuaded to accede to the application made by Mr Crawshaw for two principal reasons. The first and, in my view, the most significant is the apology made by the respondent, the New South Wales Teachers' Federation and its declaration of belief in and willingness to uphold the integrity of the Industrial Relations Commission of New South Wales. Such a public acknowledgment and declaration should ensure that the New South Wales Teachers' Federation will not engage in any activity or conduct of any kind in the future which will lead it to contravene any orders of the Industrial Relations Commission of New South Wales. [10] The second matter is the fact that the applicant Director General of the Department of Education and Training has supported the dismissal of the proceedings without the imposition of any penalty. 53 In this matter, the Federation has not sought to mitigate the breach by an apology or statement of regret, although as I have already observed, Mr Crawshaw contended that the admission of the contravention should be seen as evidencing the Federation's contrition. 54 Mr Crawshaw, helpfully, referred the Commission to a number of judgments of the Court, or its predecessor the Industrial Relations Commission in Court Session, and the penalties imposed in those matters. See, for example, Bluescope Steel Ltd (formerly BHP Steel Ltd) v Australian Workers' Union, New South Wales (No 2) (2005) 141 IR 329; Australian Workers' Union NSW v Bluescope Steel (AIS) Pty Ltd; BHP Steel (AIS) Pty Ltd (now known as BlueScope Steel (AIS) Pty Ltd) and The Australian Workers' Union, NSW [2006] NSWIRComm 263; Bluescope Steel v Australian Workers' Union, New South Wales (No 3) [2006] NSWIRComm 307; Bluescope Steel Ltd (formerly known as BHP Steel Ltd) v The Australian Workers' Union, New South Wales. This appears to be the first matter in which a respondent has admitted a contravention of a dispute order. 55 I have concluded that, taking into account all of the circumstances, an appropriate penalty would be $4,000 for the breach of the dispute order that occurred on 11 February 2010. The reasons which led Marks J not to proceed to impose any penalty on the Federation are not present in this matter. ORDERS 1. The New South Wales Teachers Federation is found guilty of breaching the dispute order A(1) issued by the Industrial Relations Commission of New South Wales of 4 February 2010 in relation to industrial action which occurred on 11 February 2010. 2. For the breach of the dispute order A(1) issued by the Industrial Relations Commission of New South Wales on 4 February 2010, the New South Wales Teachers Federation shall pay a penalty in the sum of $4,000. 3. The penalty is to be paid within 28 days of the date of this Judgment. 4. No orders 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. 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