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Flynn v CFMEU & Anor and Mathers v Feehan & Anor [2011] FMCA 32 (28 January 2011)

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Flynn v CFMEU & Anor and Mathers v Feehan & Anor [2011] FMCA 32 (28 January 2011)

Last Updated: 2 February 2011

FEDERAL MAGISTRATES COURT OF AUSTRALIA

FLYNN v CFMEU & ANOR
MATHERS v FEEHAN & ANOR

INDUSTRIAL LAW – Strike action – penalty for breach of s.38 of Building and Construction Industry Improvement Act 2005 (Cth) – agreement reached concerning breaches and penalty.


Hills v Sutton (2007) FCA 2033
NW Frozen Foods Pty Ltd v Australian Consumer and Competition
Commission [1996] FCA 1134; (1996) 71 FCR 285
Ponzio v B & P Caelli Constructions Pty Ltd [2007] FCAFC 65; (2007) 158 FCR 543
Stuart Mahoney v CFMEU [2008] FCA 1426

Applicant:
SEAMUS FLYNN

First Respondent:
CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

Second Respondent:
JUSTIN FEEHAN

File Number:
ADG 132 of 2009

Applicant:
JAMES MATHERS

First Respondent:
JUSTIN FEEHAN

Second Respondent:
CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

File Number:
ADG 172 of 2009

Judgment of:
Simpson FM

Hearing date:
13 April 2010

Date of Last Submission:
13 April 2010

Delivered at:
Adelaide

Delivered on:
28 January 2011

REPRESENTATION

ADG 132 of 2009

Counsel for the Applicant:
Mr M Roder SC

Solicitors for the First Applicant:
Piper Alderman

Counsel for the First & Second Respondents:
Mr S Dolphin

Solicitors for the First & Second Respondents:
Lieschke & Weatherill

ADG 172 of 2009

Counsel for the Second Applicant:
Mr M Roder SC

Solicitors for the Second Applicant:
Sparke Helmore

Counsel for the First & Second Respondents:
Mr S Dolphin

Solicitors for the First & Second Respondents:
Lieschke & Weatherill

ORDERS

In action ADG 132 of 2009, there be orders that:

(1) The first respondent, Construction, Forestry, Mining and Energy Union, do pay by way of penalty for two breaches of s.38 of the Building and Construction Industry Improvement Act 2005 (Cth), the sum of $17,000 (seventeen thousand dollars) which sum shall be paid to the Consolidated Revenue Fund.
(2) The second respondent, Justin Feehan, do pay by way of penalty for two breaches of s.38 of the Building and Construction Industry Improvement Act 2005 (Cth), the sum of $3,000 (three thousand dollars) which sum shall be paid to the Consolidated Revenue Fund.

In action ADG 172 of 2009, there be orders that:

(1) The first respondent, Justine Feehan, do pay by way of penalty for breach of s.38 of the Building and Construction Industry Improvement Act 2005 (Cth), the sum of $5,000 (five thousand dollars) which sum shall be paid to the Consolidated Revenue Fund.
(2) The second respondent, Construction, Foresty, Mining and Energy Union, do pay by way of penalty for breach of s.38 of the Building and Construction Industry Improvement Act 2005 (Cth), the sum of $20,000 (twenty thousand dollars) which sum shall be paid to the Consolidated Revenue Fund.
FEDERAL MAGISTRATES
COURT OF AUSTRALIA
AT ADELAIDE

ADG 132 of 2009

SEAMUS FLYNN

Applicant


And


CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

First Respondent


JUSTIN FEEHAN

Second Respondent

ADG 172 of 2009

JAMES MATHERS

Applicant


And


JUSTIN FEEHAN

First Respondent


CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION

Second Respondent


REASONS FOR JUDGMENT

Background

  1. I have before me two sets of proceedings that are related and have conveniently been dealt with together. In each action:
    1. The applicant is an Australian Building Commission Inspector appointed pursuant to s.57 of the Building and Construction Industry Improvement Act 2005 (Cth) (“BCII Act”);
    2. The Construction, Forestry, Mining and Energy Union (“CFMEU”) and Justin Feeham (“Mr Feehan”), a member and employee of the CFMEU, are respondents;
    1. The applicant alleges that the respondents are guilty of contravening s.38 of the BCII Act in that they were involved in unlawful industrial action namely strike action.
  2. In action ADG 132 of 2009, the applicant seeks final orders as follows:
  3. In action ADG 172 of 2009, the applicant seeks the following final orders:
  4. In both actions, the parties have been able to reach agreement about the contraventions that occurred and the penalty that should be imposed. Agreed Facts and Penalty Statements have been filed in both actions.

The agreed facts and penalty in ADG 132 of 2009

1. The Applicant (Flynn) is and has been on and from 29 August 2006 an Australian Building Commission inspector pursuant to Section 57 of the Building and Construction Industry Improvement Act 2005 (the BCII Act).
2. The Second Respondent (the CFMEU) is and at all material times was:
3. At all material times the CFMEU was a party to the following collective agreements:
4. In or about May 2008 the Second Respondent (Feehan) was:
5. As at 30 May 2008, the following corporations, (the contractors) employed or engaged CFMEU members at the construction site located at Flinders University, University Drive, Bedford Park, South Australia (the site).
6. Hindmarsh was the head contractor for the Flinders University, Education Building project which commenced in May 2007 and was due for completion in October 2008.
7. The Flinders University Education Building project involved the construction of a five storey building for offices and commercial infrastructure situated at the site at an estimated cost of $10 million.
8. On 29 May 2008 Feehan provided a notice of entry pursuant to Section 747 of the Work Place Relations Act 1996 to the project manager for Hindmarsh (the notice). The notice stated that there was a suspected breach of industrial instruments applying at the site and it proposed entry on the following day 30 May 2008.
9. Feehan entered the site on 30 May 2008 at approximately 10:30am.
10. On his entry to the site Feehan was requested by the project manager to provide details of the alleged breaches.
11. At approximately 11:00am, Feehan entered the area of the site known as the smoko shed where building employees of the contractors were taking a scheduled break.
12. Feehan held discussion with some of the building employees about safety issues and informed them that he was calling a meeting to take place off site outside of the entry gates to the site.
13. As a result, the building employees on the site ceased work at approximately 11:00am and attended a meeting conducted by Feehan off site outside of the main entry gates to the site.
14. Feehan informed the meeting that as the building employees had already left the site to attend the meeting, that they could be docked four hours pay whether they returned to work or not. Feehan asked if anyone would put a motion and then a motion was put by the floor, and carried, that the building employees would leave site for the rest of the day.
15. As a result of the strike action approximately 30 building employees left the site on Friday, 30 May 2008 and did not return to work on that day.
16. Work on the site was effectively shut down for that day.
17. All workers returned on the morning of the next scheduled working day, Monday, 2 June 2008.
18. Prior to conducting the meeting, Feehan had contacted Safe Work SA regarding his perception of safety issues on site. His complaints related to fall protection in the atrium area, that the drinking water being supplied was not cold and electrical equipment with no proof of testing.
19. On the afternoon of the strike Mr Gibbs, Senior Occupational Health and Safety Inspector of SafeWork SA attended the site, and found that there were no safety problems with the matters raised by Feehan. He did not issue any notices.
20. After Mr Gibbs left the site he rang Feehan and told him that he found no problems on the site and that no notices had been issued.
21. On Monday, 2 June 2008, after the workers had returned to the site, Gibbs was asked to re-attend the site by Feehan. Feehan’s complaint on this occasion referred to:
22. Gibbs met Feehan on site on 2 June 2008 and Feehan made further complaints which referred to:
23. As a result of his further inspection, Gibbs issued four notices to Hindmarsh relating to:
24. The matters identified in the Notices were not of sufficient magnitude to pose an immediate threat to the health and safety of the building employees.
25. The matters identified by the Notices were remedied on that day.
26. The strike action was not authorised or agreed to by the building members’ employers.
27. The strike action included failure to attend for and perform building work within the meaning of the BCII Act.
28. For the purposes of Section 37 of the BCII Act the strike action was:
29. Feehan was involved in the strike action:
30. Thus the CFMEU engaged in the strike action.
31. The parties agree that the action (meeting and the subsequent strike action taken for the rest of the day) taken on 30 May 2008 constitute a single contravention by Feehan and a single contravention by the CFMEU of the BCII Act.
32. By reasons of the matters above Feehan and the CFMEU each contravened Section 38 of the BCII Act.
33. As a result of the strike action approximately 30 workers did not attend for and perform work at the site after 11:00am on 30 May 2008.
34. The strike action thereby caused delay and disruption to the Flinders University project.
35. Feehan and the CFMEU have a record of prior contraventions of the BCII Act or WR Act which will be provided to the Court at the hearing.
36. The parties have agreed that it would be appropriate for the Court to impose the following penalty:

The agreed facts and penalty in ADG 172 of 2009

1. The Applicant (‘Mathers’) is and has been on and from 26 May 2008, an Australian Building Commission Inspector appointed pursuant to Section 57(1) of the Building and Construction Industry Improvement Act 2005 (‘BCII Act’).
2. In July 2008, the First Respondent (‘Feehan’) was an employed Organiser, Officer and Agent of the Second Respondent (‘CFMEU’) acting within the scope of his action or apparent authority.
3. Feehan was in July of 2008 a member and employee of the CFMEU.
4. The CFMEU is and was in July of 2008:
5. In July 2008, the CFMEU was a party to the following collective agreements:
6. In July 2008, the following corporations, partnerships or entities (‘the contractors’) performed building work at a construction site located at 20 Hindmarsh Square, Adelaide SA (‘the site’).
7. Baulderstone were engaged as the head contractor for the construction of a twin tower complex comprising a mixture of retail, commercial and residential usage on the site.
8. Baulderstone had been on site since late June 2008 and completed site preparation on 6 July 2008.
9. On 7 July 2008, Frankipile commenced work on the site pursuant to an engagement as subcontractor in relation to the installation of structural concrete pilings and the construction of a number of retaining walls.
10. On 14 July 2008, Feehan entered the site, (‘the first visit’).
11. In the course of the first visit, Feehan gave notice of intended entry pursuant to Section 747 of the Workplace Relations Act 1996 (‘WRA’) referring to an intended visit the following day Tuesday, 15 July 2008 at 11:00am.
12. On Tuesday, 15 July 2008 at approximately 9:15am, Feehan re-entered the site, (‘the second visit’).
13. On entering the site on the occasion of the second visit, Feehan had a discussion with Mr Albert Joseph Tracey (‘Tracey’) Baulderstone Site Manager.
14. Feehan raised concerns with Tracey regarding:
15. Tracey responded that there was:
16. Feehan contended that the upstairs office area was not an appropriate lunch shed for the workers as this area was already being used by management. Also, that there had been promises made, and not kept, in relation to the installation of a drinking fountain.
17. The Frankipile workers remained aggrieved, Feehan continued his discussions with the workers regarding their concerns.
18. Feehan conducted a meeting of members of CFMEU including Frankipile employees and employees of the other contractors who were engaged in the work being performed by Frankipile under their subcontract.
19. At the meeting possible strike action was debated. Feehan said words to the effect of, “Well, what do you want to do, fellas? Do you want to go out for it and do you want to have a vote first? Do you want to have a vote?”
20. A vote to strike was then taken on the motion of an unidentified worker and carried by a majority.
21. Thereafter employees of the contractors left the site for the day, numbering approximately 12-14.
22. Of those employees, approximately 2 of the Frankipile employees were from interstate and had been working on the site in the morning on the basis that they were to work on another site in the afternoon.
23. The interstate Frankipile employees were engaged in productive labour in the afternoon on the other site.
24. The site was effectively closed for the day.
25. After the strike meeting, Feehan had a further discussion with Tracey about the lack of facilities on site. Feehan said words to the effect of “Frankipile did not provide any overhead protection for workers who wanted to stand outside during their break.”
26. Feehan also approached the Frankipile Project Supervisor after the meeting and told him that the workers had taken a vote and that they were all going home. Feehan said that he did not have a problem with the interstate Frankipile workers going to the submarine base.
27. On 16 July 2008 at 6:45am, Feehan conducted another meeting in the site lunch shed where it was agreed to return to work.
28. Shortly after Feehan advised Frankipile and Baulderstone management that the workers would be returning to work, and that he would be back on site on Friday to ensure that the workers concerns had been addressed.
29. The workers returned to work and there was no further industrial action on site.
30. As a result of the strike action, members of the CFMEU who were employees of Frankipile and subcontractors assisting Frankipile amounting to approximately 5 workers failed to attend for and perform work in connection with the site from about 9:00am on 15 July 2008.
31. The actions referred to in paragraph 30 above, were not authorised by Frankipile or the other contractors.
32. The strike action included failure to attend for and perform building work within the meaning of the BCII Act.
33. For the purposes of Section 37 of the BCII Act, the meeting and the strike action constituted a single course of conduct and was:
34. Feehan was involved in the strike action:
35. Accordingly, the CFMEU engaged in the strike action.
36. By reason of the matters above, Feehan and the CFMEU each contravened Section 38 of the BCII Act.
37. The parties agree that the action (the meeting and subsequent strike action taken for the rest of the day) taken on 15 July 2008 constitute a single contravention by Feehan and a single contravention of the CFMEU of the BCII Act.
38. As a result of the strike action, little meaningful work was undertaken at the site on 15 July 2008 and delay was thereby occasioned to the project.
39. Feehan and the CFMEU have a record of prior contraventions of the BCII Act or WR Act which will be provided to the Court at the hearing.
40. The parties have agreed that it would be appropriate for the Court to impose the following penalty:
  1. I accept the submission put by counsel for each of the parties that where the parties agree on a penalty, the court should not disturb it unless it falls outside the appropriate range. This approach is supported by recent authority. In Hills v Sutton [2007] FCA 2033, a case also concerned with an agreed penalty for breach of industrial legislation, Tracey J came to the same view stating at para.7 of his reasons;
  2. The respondents relied upon an affidavit of the respondent Mr Feehan. He says in his affidavit that he is a Safety Advisor and Industrial Relations Officer with Adelaide Aqua having commenced full time permanent employment with that organisation on 7 September 2009. Prior to obtaining the position with Adelaide Aqua, he had been an employee and official of the CFMEU South Australian branch. He says that he became an official of the Union in or about 1996. Mr Feehan says that in his work as an official, he regularly went to see members at their workplaces. He did so to advise them of their rights, to ensure that their rights were being observed, the assist members in obtaining fair wages and conditions and to deal with other queries and concerns that members had. He says that throughout his time as an official of the Union, he developed a reputation for being an effective advocate for the interests of Union members.
  3. Mr Feehan says in his affidavit that in 2006, charges were brought against him by an inspector and authorised officer of the Australian Building and Construction Commission (“ABCC”). As a result of those charges, Mr Feehan was ordered to pay a small fine as was the Union. He says that as a result of those charges, the changes that occurred in relation to industrial laws at about that time and the activities of the ABCC, he became aware of the need to resolve workplace disputes. He says that unfortunately the expectations of members of the Union as to what the Union and its officials could do for them on worksites had not necessarily kept pace with the changing industrial climate. He says that on many occasions that he attended worksites to assist Union members. The members demanded that he take swift and decisive action. He says that in almost all occasions he was able to resolve member’s concerns and grievances without the need for any industrial action.
  4. Mr Feehan says that in relation to the incident that took place at the Flinders University construction site (ie. the site that the ADG 132/2009 matter was concerned with), the workers, many of whom were not members of the Union, had been complaining for some weeks or months about safety conditions on the site. He says that the workers were very annoyed and agitated as to those safety conditions. He says that many of the workers that they would leave the site until the safety issues had been addressed. Mr Feehan says that on 30 May 2008, he chaired a meeting of Union members which resulted in a motion being put from the floor and carried by the membership that members leave the site for the day. He says that he informed members who were at the meeting that their action would be regarded as strike action and that repercussions may follow. He says that in hindsight he accepts that he probably could have done more to resolve the member’s concerns before the strike action commenced. He says that he was prepared to continue to debate, negotiate and conciliate, however site management were not. He says that he now regrets his lack of such action that led to the contraventions that have been pursued. He says that he is also sorry that his former employer, the Union, is now liable to pay fines as a result of his conduct.
  5. In relation to the Hindmarsh Square site (ie. the site at which the contraventions in action ADG 172 of 2009) the workers again had been complaining for some weeks as to conditions on the site principally in relation to the lack of amenities such as lunch sheds and toilets. Mr Feehan says that he went to the site and assessed that the worker’s concerns were genuine. He says that the workers were concerned that their complaints were not being adequately addressed by site management. He says that as a result of a misunderstanding about the comment made by a senior employee of the head contractor, Baulderstone Hornibrook Pty Ltd, a “very aggressive atmosphere developed”. Mr Feehan says that on 15 July 2008, he chaired a meeting of Union members at which a motion was put from the floor and carried by the membership. The resolution was that members leave the site for the day. Mr Feehan says that he again informed the members of the union that their action would be regarded as strike action and that repercussions may follow. Mr Feehan again says that he accepts that he probably could have done more to resolve the Union member’s concerns before the strike action commenced. He could for example, have continued to debate, negotiate and conciliate with site management. He again says that he regrets his lack of action that led to the contraventions and that he is sorry that his former employer is now liable to pay fines as a result of his conduct. Mr Feehan points out that construction sites can often be very dangerous, inhospitable and aggressive places to work. He says that the amenities and conditions on site are often less than ideal and would not be tolerated by workers in other industries. He says that in his experience, construction workers tend to be more assertive and at times aggressive when threats or perceived threats are being made to their pay and conditions. He says that meetings of construction workers tend to be raucous affairs often with the loudest most aggressive proving persuasive on the collective. He says that as a result, events on construction sites can often move more rapidly and forcefully in one direction or another and in an uncontrolled and unruly manner. He says that given this, there are always difficulties in controlling the expectations and actions of construction workers when they come together as a collective and set their sites on a desired goal. He says that of the hundreds of construction sites that he has visited during his time as an official, the events of 30 May and 15 July 2008 were isolated occasions where site management proved to be particularly difficult in addressing the member’s concerns and issues.
  6. Counsel for the parties have provided me with a schedule of cases in which the CFMEU has been penalised for contravention of various pieces of industrial legislation including the Act. The cases are listed under four headings, namely Industrial Action Cases, Freedom of Association Cases, Coercive Conduct Cases and Discrimination Cases. Most of the cases referred to were heard in either the Federal Court or the Federal Magistrates Court but there are some cases from other courts. I have considered all of the cases referred to in the schedule provided and have found the cases concerned with industrial action particularly helpful.
  7. The authorities suggest that the potentially relevant and applicable considerations for determining the appropriate penalty for a contravention of the BCII Act include:
    1. The nature and extent of the conduct which lead to the breaches;
    2. The circumstances in which that relevant conduct took place;
    1. The nature and extent of any loss or damage sustained as a result of the breaches;
    1. Whether there had been similar previous conduct by the respondent;
    2. Whether the breaches were properly distinct or arose out of the one course of conduct;
    3. The size of the business enterprise involved;
    4. Whether or not breaches were delivered;
    5. Whether senior management was involved in the breaches;
    6. Whether the party committing the breach had exhibited contrition;
    7. Whether the party who committed the breach had taken corrective action;
    8. Whether the party committing the breach had co-operated with the enforcement authorities;
    1. The need to ensure compliance with minimum standards by provision of an effective means for investigating an enforcement of employee entitlements;
    1. The need for specific and general deterrence (see Stuart Mahoney v CFMEU [2008] FCA 1426 per Tracey J at para.40 and the cases referred to therein);
  8. In the Stuart Mahoney case Justice Tracey said that:
  9. Most of the applicable considerations for determining the appropriate penalties for the admitted contraventions have been adequately dealt with in the statements of agreed facts as supplemented by the evidence of Mr Feehan. In addition to that material, I would note that:
  10. Specific deterrence is needed to ensure that these respondents are disinclined to engage in any future conduct of this nature. General deterrence is needed to prevent organisations, corporations and individuals from contravening this and other similar legislation. To achieve specific and general deterrence the penalties must be imposed at a meaningful level.
  11. I am satisfied that the proposed penalties are within the permissible range in that they are neither manifestly inadequate nor manifestly excessive. I propose to make orders as suggested by the parties.

I certify that the preceding 15Error! Style not defined.!Syntax Error, !Error! Style not defined.Error! Style not defined.!Syntax Error, !fifteenfifteen (15) paragraphs are a true copy of the reasons for judgment of Simpson FM


Associate:


Date: 28 January 2011

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