Carr v Higgins Coatings Pty Ltd [2005] FCA 1809 (24 November 2005)

FEDERAL COURT OF AUSTRALIA

Carr v Higgins Coatings Pty Ltd [2005] FCA 1809

WORKPLACE RELATIONS – industrial action – payments to employees for period while they were taking industrial action – whether penalty should be imposed – whether declaration should be made – whether declaration of agreed contravention is proper exercise of Court’s power.

Workplace Relations Act 1996 (Cth) ss 4(1), 187AA, 187AC, 187AD, 347
Federal Court of Australia Act 1976 (Cth) s 21
Workplace Relations Regulations 1996 (Cth) reg 32B

Australian Competition and Consumer Commission v Francis [2004] FCA 487 (2004) 142 FCR 1 referred to
Rural Press Ltd v Australian Competition and Consumer Commission [2003] HCA 75 (2003) 216 CLR 53 considered

DENNIS JAMES CARR v HIGGINS COATINGS PROPRIETARY LIMITED
(ACN 005 632 708)
VID 1512 of 2004

GRAY J
24 NOVEMBER 2005
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 1512 of 2004

BETWEEN:	DENNIS JAMES CARR APPLICANT
AND:	HIGGINS COATINGS PROPRIETARY LIMITED (ACN 005 632 708) RESPONDENT
JUDGE:	GRAY J
DATE OF ORDER:	24 NOVEMBER 2005
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. Dennis James Carr be substituted for Adrian Edwards as the applicant in the proceeding and the title of the proceeding be amended accordingly.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 1512 of 2004

BETWEEN:	DENNIS JAMES CARR APPLICANT
AND:	HIGGINS COATINGS PROPRIETARY LIMITED (ACN 005 632 708) RESPONDENT

JUDGE:	GRAY J
DATE:	24 NOVEMBER 2005
PLACE:	MELBOURNE

1 This proceeding arises out of events on 5 August 2003 at a building site at 336 Russell Street, Melbourne, at which a building called Concept Blue Apartments was being constructed. At the time, the respondent, a body corporate, had employees on the site whose task was to perform painting work in the course of the construction of the building. On that day, two particular employees, Michael Czyzewski and Ian Dryden, either did not commence work or, having commenced work, ceased work at about 8.30 am, and remained at the site for the balance of what would have been their working hours, without performing any work. The respondent paid them in respect of that time. The total amount of $334.40 was paid to the two employees.

2 In consequence of that, an inspector appointed under the Workplace Relations Act 1996 (Cth) (‘the Workplace Relations Act) commenced this proceeding in this Court by filing an application on 13 December 2004. The name of that inspector was Adrian Edwards. Mr Edwards has now resigned from the employ of the Australian Building and Construction Commission, formerly the Building Industry Taskforce. As a consequence of his resignation, a notice of motion was filed in the Court on 22 November 2005, seeking leave to substitute Dennis James Carr, another inspector appointed under the Workplace Relations Act, as the applicant in the place of Mr Edwards. The motion is not opposed and, in the circumstances, it is appropriate to order that Mr Carr be substituted for Mr Edwards as the applicant in the proceeding, and that the title to the proceeding be amended accordingly.

3 The application seeks relief substantially of two kinds. In the first place, it seeks a declaration that the respondent has contravened s 187AA of the Workplace Relations Act, by making a payment or payments to each of Mr Czyzewski and Mr Dryden for a period or periods on 5 August 2003 in which they engaged in industrial action. The second form of relief sought is the imposition of a penalty, or penalties, pursuant to s 187AD(1) of the Workplace Relations Act, for contravention or contraventions of s 187AA by making payments to Mr Czyzewski and Mr Dryden in relation to a period or periods during which they engaged in industrial action.

5 Section 187AA(3) provides that a contravention of s 187AA(1) is not an offence. Section 187AC(1) provides that an application may be made to this Court for orders under s 187AD in respect of a contravention of s 187AA. Section 187AC(2) provides that the application may be made by, among others, a person prescribed by the regulations. Regulation 32B of the Workplace Relations Regulations 1996 (Cth) prescribes that the application may be made by an inspector appointed under the Workplace Relations Act. Section 187AD(1) provides:

6 Subsequent to 5 August 2003, the amount of the maximum penalty that can be imposed has been amended by legislation. That amount is now $33 000, but it is not contended that the higher amount should be applicable in the present case.

7 The trial of the proceeding has been conducted on a statement of agreed facts. It is an agreed fact that the respondent was an employer who made a payment to its employees, Mr Czyzewski and Mr Dryden, in the amount of $334.40 in relation to a period on 5 August 2003 during which they engaged in industrial action. It is said that the industrial action constituted a failure or refusal by the two employees to perform any work during the period from the time they were about to commence work or alternatively from 8.30 am until about 3.30 pm on 5 August 2003. It is agreed that their failure or refusal to work was in accordance with the Construction, Forestry, Mining and Energy Union’s On-site Fatalities Policy and Procedure. It is also agreed that the respondent was a body corporate bound by a certified agreement called the Higgins Coatings Pty Ltd and CFMEU/FTAA (Master Painters and Signwriters) Building and Construction Industry Collective Bargaining Agreement 2002-2005.

8 The policy, in accordance with which it is agreed that the two employees did not work, was a published policy regarding procedures to be undertaken following a death in the construction industry of a union member from an industrial accident. The policy provided for the calling of a mass meeting on the day following the death at all other sites in the industry, to hear a report on the incident. The mass meeting was to be followed by the conduct of a safety audit, and only once any identified safety issues were rectified would work resume on the site.

9 On 1 August 2003, a labourer was killed near Shepparton, when a crane on which he was working struck overhead powerlines. That incident was not connected with any work being performed on the site at which the respondent’s employees were working, but on the following working day, which was 5 August 2003, work ceased on the Concept Blue site in accordance with the policy. As the safety audit had not been completed by the afternoon, no work was done by the end of the scheduled day at about 3.30 pm.

10 A dispute arose between the head contractor at the site and the unions over whether workers should be paid for the time that they were idle and sitting in the sheds. Those workers, of course, include the respondent’s two employees. The admitted facts are not absolutely clear as to what occurred. The relevant paragraph of the statement of agreed facts is par 9 which reads as follows:

11 I think that it is undesirable that a statement of agreed facts containing alternatives of this nature should be put before the Court. If there are to be agreed facts then, in my view, the precise facts ought to be ascertained and agreed, at least if that is at all possible. The vagueness of par 9 of the agreed statement of facts caused me to query exactly what was the industrial action that the respondent’s two employees were alleged to have been undertaking. The result is that it is conceded that what they were doing fell within par (d) of the definition of industrial action in s 4(1) of the Workplace Relations Act, in that it was:

12 There can be little doubt that the respondent, which is admitted to be a body corporate, and in the title to the proceeding has attributed to it an ACN number, would be a constitutional corporation. I can assume that it trades, when it undertakes painting work for a head contractor on a building site, and it therefore falls within par (c) of the definition of ‘constitutional corporation’ in s 4(1) of the Workplace Relations Act.

13 It appears from the agreed statement of facts that the respondent had a policy not to pay employees for periods when they were engaged in industrial action. It had not paid employees on other sites on 5 and 6 August 2003, when they had taken industrial action. The payment was authorised by a supervisor at the Concept Blue site, who made the decision having regard to Mr Czyzewski’s 27 years and Mr Dryden’s six years of service to the respondent, and to the fact that they were not responsible for the strike action. The decision of the supervisor was not the result of any pressure from any union. It was not approved by the directors of the respondent, who were not aware of it at the time, and only became aware of it in 2005. The directors have made inquiries, and are not aware of the respondent paying strikers on any other occasion. Subsequently, the directors have instructed the supervisor concerned that there is to be no exemption from the policy of not paying employees engaged in industrial action.

14 It is also agreed that there was no cost to the respondent from the stoppages on the Concept Blue site. The respondent’s works on the site were completed within time and within budget.

15 The respondent has had no prior contravention of Pt VIIIA of the Workplace Relations Act alleged against it. The applicant concedes that the respondent has cooperated since the commencement of this proceeding, and that that is a mitigating factor to be taken into account.

16 In light of the various mitigating factors, counsel for the applicant has conceded that this would be an appropriate case for the Court to impose no penalty. This is a case in which individual deterrence has no operation whatsoever. Having regard to its existing policy not to pay employees for periods when they were engaged in industrial action, the respondent was already deterred. The payment that was made to each of the two employees was a payment unauthorised by the respondent in the sense that its directing mind and will was unaware that the supervisor proposed to make the payment, despite the respondent’s policy that such payments should not be made.

17 In those circumstances, it is difficult to see how the imposition of any penalty at all could be appropriate in relation to the particular respondent. General deterrence is, in such circumstances, not an appropriate reason for imposing a penalty. The penalisation of those whose conduct is essentially innocent, in order to deter others, is more likely to bring the law into disrepute than to preserve the integrity of the statutory scheme and to bring about widespread compliance with it.

19 Counsel for the applicant contends that I should nevertheless make a declaration in the form sought in the application. A declaration is not, and is not contended to be, an order consequential upon any of the orders referred to in s 187AD(1) of the Workplace Relations Act. In order to find a power for the Court to grant a declaration it is necessary to go, as the applicant concedes, to s 21 of the Federal Court of Australia Act 1976 (Cth). Subsection (1) of that section provides:

20 As I have said in my judgment in Australian Competition and Consumer Commission v Francis [2004] FCA 487 (2004) 142 FCR 1 at [92]–[113], I have great difficulty accepting that a declaration which does nothing more than record a historical event is properly described as a declaration of right. A declaration of right settles a state of dispute between parties, by declaring what the rights of one or other or both of them are, and enables them to conduct their relations in the future on the basis that their rights are thereby established. In essence, it is a remedy looking towards future conduct, rather than at past conduct.

21 It is also important to note that a declaration settles a controversy; it does not simply give effect to an agreement. In the present case, there is an agreement that there has been a contravention by the respondent of s 187AA(1)(b) of the Workplace Relations Act. In my view, the making of a declaration reflecting that agreement would not be a proper exercise of the Court’s power. I am aware that it has become a practice under the Trade Practices Act 1975 (Cth) (‘the Trade Practices Act’) for applicants to seek, and for the Court to make, declarations that appear to do nothing other than reflect the fact that past conduct amounts to a contravention of provisions of that Act. Declarations in that form have often been made in cases in which the option of a penalty has not been available, but have also been made in cases where a penalty is an option, and even in cases in which penalties have been opposed. It is perhaps too late to protest about that practice under that Act, it having been sanctioned by the High Court of Australia, at least impliedly, in Rural Press Ltd v Australian Competition and Consumer Commission [2003] HCA 75 (2003) 216 CLR 53 at [89]–[90] per Gummow, Hayne and Heydon JJ, by the failure of the High Court to condemn the making of declarations of that kind, even though it condemned the particular, rather vague, form of the declarations that had been made in that case.

22 Recent cases under s 187AA of the Workplace Relations Act suggest that the practice is threatening to spill over from the Trade Practices Act to that area. There have been a number of cases in which judges have made declaratory orders where they have not imposed penalties under s 187AA. In no case, so far as I am aware, has any judge engaged in discussion in reasons for judgment about whether the making of such a declaration is appropriate.

23 In my view, it is not. Counsel for the applicant contends that the making of a declaration would send the right message to others that the law is being enforced. I am not sure that a case such as this would gain such notoriety that others would inevitably learn what they would learn from reading s 187AA of the Act, namely that it is unlawful to make payments to employees who are engaging, or have engaged, in industrial action.

24 As I have said, there are circumstances in which the making of orders by courts in relation to conduct of parties that is essentially innocent can operate more to bring into disrepute the laws under which the orders are made than to maintain the integrity of that system of laws. I think it would be unfortunate to be making any declaration in a case such as this, which I think would not tend to promote respect for the law.

25 For all of those reasons, it appears to me that the only appropriate order is to dismiss the application. I don’t accept that such an order will send any wrong message. All that it accomplishes is that the relief sought in the application is not to be granted. It in no way condones what the respondent has done and certainly does not send any message that the respondent has not contravened s 187AA.

1. Dennis James Carr be substituted for Adrian Edwards as the applicant in the proceeding and the title of the proceeding be amended accordingly.

I certify that the preceding twenty-seven (27) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gray.

Counsel for the applicant:	P O’Grady

Solicitor for the applicant:	Australian Government Solicitor

Counsel for the respondent:	RA Millar

Solicitor for the respondent:	Norton Gledhill

Date of Hearing:	24 November 2005

Date of Judgment:	24 November 2005