Duffy v Construction, Forestry, Mining & Energy Union (No 2) [2009] FCA 299 (31 March 2009)

Last Updated: 1 April 2009

FEDERAL COURT OF AUSTRALIA

Duffy v Construction, Forestry, Mining & Energy Union (No 2) [2009] FCA 299

INDUSTRIAL RELATIONS – penalty hearing – contravention of s 38 of the Building Industry Improvement Act 2005 (Cth) – relevant considerations in determining appropriate penalty – penalty determined

Building and Construction Industry Improvement Act 2005 (Cth) ss 38, 49(2)
Crimes Act 1914 (Cth) s 4AA

Duffy v Construction, Forestry, Mining and Energy Union [2008] FCA 1804, referred to
Australian Competition & Consumer Commission v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2004] FCA 517, referred to
Stuart-Mahoney v Construction, Forestry, Mining & Energy Union [2008] FCA 1426, referred to

TERRY DUFFY v CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

VID 687 of 2007

MARSHALL J
31 MARCH 2009
MELBOURNE

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 687 of 2007

BETWEEN:

TERRY DUFFY Applicant

AND:	CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION Respondent

JUDGE:	MARSHALL J
DATE OF ORDER:	31 MARCH 2009
WHERE MADE:	MELBOURNE

THE COURT ORDERS THAT:

1. A penalty of $5,500 is imposed on the respondent for contravening s 38 of the Building and Construction Industry Improvement Act 2005 (Cth).
2. The penalty imposed is to be paid into the Consolidated Revenue Fund on or before 30 April 2009.
3. The application is otherwise dismissed.
   

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
The text of entered orders can be located using eSearch on the Court’s website.

IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY	VID 687 of 2007

BETWEEN:

TERRY DUFFY Applicant

AND:	CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION Respondent

JUDGE:	MARSHALL J
DATE:	31 MARCH 2009
PLACE:	MELBOURNE

REASONS FOR JUDGMENT

1. On 28 November 2008, the Court published its reasons for judgment on liability issues in this proceeding. In that judgment the Court found that the respondent Union contravened s 38 of the Building and Construction Industry Improvement Act 2005 (Cth) (“the Act”). This judgment deals with the question of the penalty, if any, which should be imposed on the Union for that contravention. These reasons should be read together with the reasons for judgment in the substantive matter (Duffy v Construction, Forestry, Mining and Energy Union [2008] FCA 1804).

THE CONTRAVENTION

2. The Union engaged in unlawful industrial action under the Act by the imposition by its organisers of limited and short lived bans on the performance of work at a building site called the University Hill site. The relevant portion of the judgment in the substantive matter is set out at [16] to [25].
3. The following points from that part of the substantive judgment are of particular current relevance:

(a) 20 October 2005

• a ban was placed on work at the site because of the lack of a female toilet whilst a female worker was present and the absence of a site contamination report;
• after 9.30 am no work was performed on the site, other than by two employees of the head contractor;
• there were only two sub-contractors working on site immediately before the imposition of the ban:

(i) Crushtec Australia Pty Ltd — who had Ms Sally Belcher performing work on site; and

(ii) V&G Concrete Constructions Pty Ltd who had Mr Fred Gilliland and Mr Shannon Gilliland performing work on the site.

(b) 21 October 2005

• At 8.00 am that day the Union lifted the ban on concreting work. It notionally maintained the ban on Crushtec’s work but Crushtec came onto the site that afternoon and completed its work by the next day.

4. At [17] in the substantive judgment the following is said:

Insofar as there was a ban on work at the site, it did not apply to concreting work after 8.00 am on 21 October 2005 or to earthworks on site from the afternoon of 21 October 2005. Effectively from the afternoon of 21 October 2005 there were no operative bans on the site. There appeared to be a ban, in name only, with respect to earthworks, as the organisers appear not to have been aware that Crushtec came back on site on the afternoon of 21 October 2005.

THE PENALTY PROVISION

5. Section 38 of the Act is a Grade A Civil penalty provision. Under s 49(1) of the Act, the Court may impose a pecuniary penalty for its breach. The maximum penalty is $110,000, which equates to 200 penalty units; see s 49(2) of the Act and s 4AA of the Crimes Act 1914 (Cth).

SUBMISSIONS ON PENALTY

6. Counsel for Mr Duffy submitted that there are no factors in the present case which warrant a lenient approach to penalty. Counsel referred to prior conduct of the Union which breached s 38 of the Act. Counsel noted that four of the contraventions were in respect of pre-20 October 2005 conduct.
7. Counsel for Mr Duffy also contended that there was a need for a meaningful penalty which satisfied the requirements for general deterrence. He said that the Union was a large organisation with substantial income and assets. Specific deterrence was also required as it was said that the Union is a repeat offender which has not been deterred by low-scale fines in the past.
8. Counsel for the Union drew attention to the importance for safety in the availability of a contamination report on site and the laxity of the head contractor in not having a female toilet on site.
9. The Union’s counsel submitted that the existence of prior contraventions could not justify a heavier fine than might otherwise be imposed if that fine is disproportionate to the circumstances of the offence.
10. On the topic of prior contraventions it was contended by the Union that:
    • prior contraventions by another autonomous division of the Union should not be taken into account;
    • conduct pre-20 October 2005 for which a contravention is not recorded until after that time is not a relevant prior contravention; and
    • such conduct is to be given less weight than a prior contravention.
11. Counsel for the Union referred to recent financial records showing the Construction Division had made a loss according to its returns for 2007. Counsel also referred to the Union as not being a profit making body but existing for the benefit of its members.
12. The Union’s counsel further submitted that deterrence is of less significance in this case than many others because of the circumstances — the absence of a contamination report and a female toilet and the short lived bans.

CONSIDERATION

13. The conduct of the Union through its organisers was unlawful. The effect of this case is that it is unlawful to place a ban on work at a building site even though there may be a doubt as to the safety of working on that site (in the absence of a soil contamination report) and even though the head contractor did not provide a female toilet. The circumstances do not entirely excuse the breach. The matter could have been the subject of an urgent hearing in the Australian Industrial Relations Commission (“the Commission”). Also it may have been referred to State occupational health and safety authorities. However, the circumstances show that the organisers reacted to incompetent management by the head contractor. In fact the head contractor had a site contamination report but its Site Manager did not know. It was also inexcusable in this modern age for there not to be a female toilet on the site.
14. The bans, although invited by incompetent and bizarre management, were nonetheless illegal bans. However, they lasted a very short period of time, had minimal effect and occurred at a very early stage of the project where no significant disruption or inconvenience occurred.
15. The contravention was deliberate in the sense that it was imposed in a calculated way in response to management incompetence. There is no evidence that senior management of the Union was involved in the placing of the ban.
16. Within about six months of the relevant events, the Union organised a seminar designed to educate its officials about the effects of the Act. This conduct indicates a desire to avoid repetition of conduct in breach of the Act; see Stuart-Mahoney v Construction, Forestry, Mining & Energy Union [2008] FCA 1426 at [53] per Tracey J.
17. There is similar previous conduct, most relevantly in Stuart-Mahoney. The events of which occurred about a fortnight before the current events, although that case is not a prior contravention it shows that similar conduct had been undertaken in the past. I say “similar” in a rather loose sense because the imposition of the overtime ban in that matter was far more serious and had far more widespread effects than the transient bans in this matter.
18. Deterrence is important, both general and specific. That is why, notwithstanding the conduct of the head contractor which led to the short lived bans of little consequence, there should be some monetary penalty imposed to reflect that a statutory provision has been breached. It is not as if there was no alternative but to impose a ban. Focussed talks with the head contractor at a high level and/or a referral of the issue to the Commission and/or Worksafe inspectors were alternative available courses of action.
19. In Stuart-Mahoney, Tracey J imposed a penalty of $20,000 for breach of s 38 of the Act in respect of events occurring about the same time as the instant events. Even taking into account the application of the totality principle in that case, the significance and seriousness of the current breach are far less than the circumstances considered by Tracey J. Accordingly, I consider a fine of $5,500 to be appropriate in the current circumstances.
20. In recording that fine, I acknowledge that Union is a large body with considerable assets but it is a body which does not exist to make profit but exists for the benefit of its members; see Australian Competition & Consumer Commission v Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union [2004] FCA 517 at [8] per Gray J.
21. It also should be acknowledged, in mitigation of penalty, that the relevant organisers, in imposing the bans, acted in response to what they perceived to be an unsafe workplace where as they were told by the site manager that no soil contamination report had been obtained for the site.

COSTS

22. The parties agree that each party should bear his and its own costs of the proceeding.
    

I certify that the preceding twenty-two (22) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Marshall.

Associate:

Dated: 31 March 2009

Counsel for the Applicant:	Mr R Dalton
Solicitor for the Applicant:	DLA Phillips Fox
Counsel for the Respondent:	Mr E White
Solicitor for the Respondent:	Slater & Gordon

Date of Hearing:	31 March 2009
Date of Judgment:	31 March 2009