Stephens v Australian Postal Corporation (No.3) [2011] FMCA 999 (21 December 2011)

Last Updated: 22 December 2011

FEDERAL MAGISTRATES COURT OF AUSTRALIA

STEPHENS v AUSTRALIAN POSTAL CORPORATION (NO.3)

[2011] FMCA 999

INDUSTRIAL LAW – Penalty for contraventions involving unlawful termination of employment – termination because of disability and workers’ compensation rights – adverse findings based on statutory presumption – need for deterrence – no mitigation for corrective action or contrition shown – aggregation of penalties for same course of conduct – penalty of $25,000 imposed. INDUSTRIAL LAW – Reinstatement order after unlawful termination – ambit of power in relation to employee on fixed term employment – purported reinstatement for nine days only – whether additional orders available or appropriate.

Fair Work Act 2009 (Cth), ss.340, 340(1), 351, 351(1), 361, 545, 545(1), 545(2)(c), 546(1), 546(3)(c), 557, 570(2)(b) Federal Magistrates Court Rules 2001 (Cth), r.16.05(1) Safety, Rehabilitation and Compensation Act 1988 (Cth)

Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560, [2008] FCAFC 8 Australian Postal Corporation v Stephens (No.2) [2011] FCA 992 Australian Postal Corporation v Stephens [2011] FCA 947 Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529 Blackadder v Ramsey Butchering Services Pty Ltd [2005] HCA 22; (2005) 221 CLR 539 Comcare v Australian Postal Corporation [2011] FCA 530 Construction, Forestry, Mining & Energy Union v Cahill (2010) 269 ALR 1, [2010] FCAFC 39 Construction, Forestry, Mining & Energy Union v Williams (2009) 262 ALR 417, [2009] FCAFC 171 DJL v Central Authority [2000] HCA 17; (2000) 201 CLR 226 Kelly v Fitzpatrick (2007) 166 IR 14, [2007] FCA 1080 Mason v Harrington Corporation Pty Ltd [2007] FMCA 7 Re Stephens and Australian Postal Corporation [2011] AATA 824 Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550 Stephens v Australian Postal Corporation (No.2) [2011] FMCA 448 Stephens v Australian Postal Corporation [2010] FMCA 1012, (2010) 202 IR 437 Woodside Burrup Pty Ltd v Construction, Forestry, Mining & Energy Union [2011] FCA 949

Applicant:

LARRY STEPHENS

Respondent:

AUSTRALIAN POSTAL CORPORATION

File Number:

SYG 1429 of 2010

Judgment of:

Smith FM

Hearing date:

28 November 2011

Delivered at:

Sydney

Delivered on:

21 December 2011

REPRESENTATION

Counsel for the Applicant:

Ms J Keys

Counsel for the Respondent:

Mr S Meehan

Solicitors for the Respondent:

Blake Dawson

ORDERS

(1) Pursuant to s.546(1) of the Fair Work Act 2009 (Cth), the respondent, Australian Postal Corporation, must pay one aggregated penalty of $25,000 for its contraventions of ss.340(1) and 351(1).
(2) Pursuant to s.546(3)(c) the penalty must be paid to the applicant, Larry Stephens on or before 4 January 2012.
(3) The applicant’s application in a case filed on 18 November 2011 is refused.
(4) No orders as to costs.

FEDERAL MAGISTRATES COURT OF AUSTRALIA AT SYDNEY

SYG 1429 of 2010

LARRY STEPHENS

Applicant

And

AUSTRALIAN POSTAL CORPORATION

Respondent

REASONS FOR JUDGMENT

1. This judgment is a sequel to the orders and reasons which are found in my judgment in Stephens v Australian Postal Corporation (No.2) [2011] FMCA 448. I must now explain how I have arrived at a penalty to be imposed on Australia Post for the contraventions which I found in that judgment, and why I have decided that no further orders should be made concerning Mr Stephens’ further employment by Australia Post.
2. Mr Stephens was employed by Australia Post as a driver on two term contracts, the last of which was due to expire on 20 January 2010.
   He held reasonable expectations that his employment might be continued beyond that date. On 3 December 2009 he suffered a work injury, for which he claimed compensation under the Safety, Rehabilitation and Compensation Act 1988 (Cth). Australia Post holds a licence under that Act, to act as primary decision-maker as to its own liabilities for compensation and rehabilitation of its injured employees. After receipt of Mr Stephens’ compensation claim, and shortly before his contract was due to expire, he was summarily dismissed on 7 January 2010. The letter of termination alleged that this adverse action was based on events on 5 January 2010, in which he failed to make one customer pick-up and later swore at a supervisor.
3. In the present matter, Mr Stephens sought orders under s.546(1) of the Fair Work Act 2009 (Cth) for the imposition of pecuniary penalties on Australia Post for unlawful termination of employment, and a consequential order under s.545(2)(c) for his reinstatement. Section 340(1) prohibits the taking of adverse action because an employee has workplace rights, such as I found had attached to Mr Stephens’ claim for compensation. Section 351(1) prohibits taking adverse action because of an employee’s physical disability. In my judgment, I examined the above circumstances in detail. I was not satisfied by the evidence adduced by Australia Post directed at showing that the two stated reasons were its only true reasons for terminating Mr Stephens’ employment. I applied the presumption raised by s.361, that this action was taken for reasons which included those made unlawful by ss.340(1) and 351(1).

My judgment on liability

4. Assessing the evidence of the two incidents on 5 January 2010, I said at [66] that “I am left dissatisfied that, objectively viewed, their circumstances provided a rational or probable or sufficient explanation for the decision made on 7 January 2010”. I found at [46] that, before the adverse decision was made by a senior manager, Mr Brennan, it was probable that Mr Crum, the regional manager, and Mr Stephens “made Mr Brennan aware that Mr Stephens’ complaints of disability were on-going, and that both managers must have been aware that his injury might lead to a chronic disability which might need to be addressed by the provision of restricted duties if his employment continued”. At [47] I also inferred that these circumstances “were made known to the Australia Post’s human resources consultant, Mr Craig, with whom Mr Brennan discussed Mr Stephens’ employment on the morning of 7 January 2010, before deciding to terminate his employment only days before it was due to expire”.
5. I explained my reasons for being unpersuaded by the evidence of Mr Brennan at [78]-[81]:
   • 78. I have above pointed to several reasons for not being persuaded by Mr Brennan’s claim that the two incidents were exclusively the only reasons for Mr Stephens’ termination. Importantly, he failed to convince me as a witness, on the balance of probabilities, in relation to this assertion. As a witness, his responses to questioning were carefully considered and shortly expressed. There was a notable lack of candour in his evidence in chief – in particular as to the involvement of Mr Craig and the Australia Post human resources section in his deliberations and the preparation of the termination letter. On many significant elements of his decision-making he claimed to have no recollections and no contemporaneous records, and on some matters, such as times and dates, where it was possible for Mr Stephens’ counsel to test his evidence, his recollections were shown to be incorrect. In the context of concerns as to the true reasons which are raised by the circumstances of the decision which I have adverted to above, I have concluded that Mr Brennan’s assertion that the two incidents provided the exclusive reasons for the termination should not be accepted.
   • 79. The only contemporaneous evidence is the letter of termination itself, and this needs to be treated with caution. In its own terms it refers to the two incidents only as a purported justification for the decision, and does not purport to deny that other considerations were present and had been given material weight before the decision was made. Other considerations appear manifestly relevant to such a serious decision, including consideration of Mr Stephens’ explanations and excuses, and his general work history and contribution, and also workplace considerations in relation to the effects of the summary dismissal on productivity and the operations of the Gosford Hub. As I have suggested above, considerations in relation to the Employer’s potential financial liabilities in relation to the employee’s continuing employment, particularly in relation to the pending compensation claim, also appear as potentially relevant considerations which could have had a material effect on the decision.
   • 80. The evidence presented by Australia Post omitted any explanations as to how these various considerations were identified and assessed, and were then either given weight or excluded in the final decision. It did not call Mr Craig, whose advice must have been influential on Mr Brennan’s decision, nor provide any evidence as to what that advice was, nor explain its relevant general policies and practices relevant to decisions of this type. I am far from satisfied on the evidence before me that considerations of Australia Post’s potential liabilities and possible future decision-making under the SRCAct, in particular, in relation to its potential obligations to provide restricted duties to an injured employee, were entirely segregated from the present decision-making. The evidence leaves me not satisfied that I am able to reach any conclusion on the balance of probabilities as to what were all the true reasons for terminating Mr Stephens’ employment in such a summary manner and in the circumstances shown in the evidence.
   • 81. Australia Post has failed to establish that the real reasons for Mr Stephens’ dismissal were “dissociated from the circumstances” of Mr Stephens’ rights under the SRCAct, in particular, by excluding on the balance of probabilities the possibility of a material influence on the relevant advisors and decision-maker of the potential additional liabilities and management responsibilities which would have accrued in relation to Mr Stephens’ ‘workplace rights’ under the SRCAct if his employment had not been summarily terminated on 7 January 2010. I therefore am satisfied that a contravention of s.340(1) of the Fair Work Act occurred in relation to that action.
6. In relation to contravention of s.351(1), I concluded:
   • 94. I find that at all relevant times Mr Stephens was suffering from a work-related lumbar spine injury, and that the underlying pathological causes of this condition, together with its symptoms and functional impairments, including any resultant functional incapacities for work, constituted a ‘physical or mental disability’ for the purposes of s.351(1) of the Act.
   • 95. The onus therefore fell on Australia Post to prove that the real reasons for Mr Stephens’ dismissal on 7 January 2011 were ‘disassociated from’ the circumstance that he had that disability. In my opinion, it has failed to do so, for the same reasons that I was unpersuaded that Australia Post has established that Mr Stephens’ workplace rights in relation to his injury played no part in actuating his dismissal. As I have explained above, the existence of the disability, including its past, current, and potentially future impairments, was known to the relevant decision-maker and his advisors. For the reasons given above, I am not persuaded by Mr Brennan’s denial that the workplace injury and its resultant disability did not provide a reason for the dismissal.
   • 96. Australia Post did not invoke any of the defences provided under s.351(2).
   • 97. I therefore find that Australia Post has also contravened s.351(1) of the Fair Work Act.
7. Relevant to my upholding Mr Stephens’ application for a reinstatement order in terms of s.545(2)(c), I said:
   • 35. Doing the best I can with the evidence before me, and accepting that a prediction as to Mr Stephens’ continuing employment if he had not been terminated is necessarily speculative, I have concluded that there is a likelihood, which is more probable than not, that if his contract had not been terminated prematurely by Australia Post, his employment at the Gosford Hub would have been extended for at least for another six months on similar terms to his employment in January 2010. I find that it is likely also that he would have been considered for further employment beyond that period, but that it is impossible to make a prediction on the balance of probabilities as to the likely total duration of his fixed term employments, nor whether or not he would have been offered permanent or more desirable terms of employment. I find that it is probable that, if his contract had not been terminated nor expired in January 2010, Australia Post would have given consideration when deciding the terms of his further employment, to its responsibilities under the SRCAct in relation to the provision of suitable employment and rehabilitation to an existing employee in relation to his workplace injury.

...

• 114. I accept the submissions of Mr Stephens’ counsel that such a remedy is the obviously appropriate remedy in the circumstances of the present contraventions, notwithstanding that there are some uncertainties as to how it will be implemented by Australia Post, and as to the extent of the benefits which the order will bring to Mr Stephens. I have above examined whether, if he had not been dismissed, what would have been the likely future of his employment. I concluded that it was probable that he would have been given a further term of employment in the same duties as his previous employment, and that he would have received appropriate consideration in any opportunities for further and permanent employment. I also concluded that Australia Post probably would have considered, and may have been obliged to consider, his further employment in the light of its obligations under the SRCAct to provide rehabilitation and restricted duties. This appears to have been accepted by Australia Post until the matter reached the AAT, and I am not persuaded that the position currently adopted by Australia Post in that litigation is correct, nor that it would be upheld by the AAT if Mr Stephens’ employment were reinstated.
• 115. I do not accept the submission of counsel for Australia Post that my powers are confined, or should be confined as a matter of discretion, to reinstatement for a period of only 9 working days, being the period remaining at the time of dismissal under Mr Stephens’ then current term contract. As I have found, in my opinion, it is probable that Mr Stephens would have been given further employment, including with consideration of any rehabilitation requirements in relation to his work injury. I consider that the powers under s.545 can, and should, be exercised to acknowledge that reality.
• 116. I also do not accept the submission of counsel for Australia Post that it would be futile to order Mr Stephens’ reinstatement, because he has lost the capacity to work. It is true that Dr Powell’s report points to a deterioration in Mr Stephens’ disability since his termination, and that Mr Stephens has been unable to find any other employment, and feels that his work history of injury at Australia Post has hampered his efforts to find work with another employer. It may well be the case that his return to work will now need careful attention from a sympathetic employer. However, there is no evidence elicited by Australia Post in the present case which persuades me that reinstatement would be unachievable by it, particularly into employment where the employer has the facilities and perhaps the obligation to provide an appropriate return-to-work programme.

...

• 118. I am satisfied that I should at this stage make an order for reinstatement of Mr Stephens. I propose to make that order without conditions and specifications, in the hope that the parties can agree upon the details of an appropriate reinstatement and return to work program, in accordance with my judgment and without delay. I accept that it may involve difficult issues as to the terms of the reinstated employment, and the extent to which it will involve restricted duties in a return-to-work program. I would hope that any such difficulties could be resolved by the parties, if necessary, through mediation or other processes available in the course of the pending AAT proceedings. I am also willing to refer the parties to conciliation or mediation on these issues under s.26 of the Federal Magistrates Act 1999 (Cth) and Part 27 of the Federal Magistrates Court Rules 2001 (Cth), should they seek such a reference. Such a reference can also be made to Fair Work Australia, which has a wealth of experience in this area. I shall reserve liberty to apply for further orders in these respects.

8. When publishing my judgment on 8 July 2011 I made the following orders:
   • THE COURT DECLARES THAT:
     • 1. The respondent, Australian Postal Corporation, contravened sections 340(1) and 351(1) of the Fair Work Act 2009 (Cth) when dismissing the applicant, Larry Stephens, from its employment on 7 January 2010.
   • THE COURT ORDERS THAT:
     • 2. The respondent, Australian Postal Corporation must reinstate Larry Stephens as an employee.
     • 3. The parties have liberty to apply by application-in-a-case for further orders in relation to the implementation and operation of the preceding order.
     • 4. The proceedings are to be re-listed for further hearing in relation to the imposition of penalties.
     • 5. The application is otherwise dismissed.
9. According to the records of the Court, no party has yet applied for the entry of these orders, and they remain un-entered.

The proceedings before Rares J and the AAT

10. The evidence now before me shows that Australia Post did not take any immediate steps to reinstate Mr Stephens’ employment in accordance with my second order. Nor did either party promptly exercise the liberty to apply which I gave them, or otherwise seek to vary or supplement my order. As I shall address below, Mr Stephens did not move for any additional relief until he filed an application in a case on 18 November 2011 which I shall address below. Rather, the attentions of the parties moved to the Federal Court and to the Administrative Appeals Tribunal.
11. On 29 July 2011, Australia Post filed in the Federal Court an application for leave to appeal from all my orders. The affidavit and draft notice of appeal asserted errors affecting both my declaration of contraventions and my reinstatement order. On 4 August 2011, Australia Post applied to the duty judge for a stay of the reinstatement order pending determination of its application for leave.
12. Rares J addressed the application for stay at a hearing on 11 August 2011. During the course of that day, he referred the parties to a Registrar for mediation, but this did not achieve any resolution of their disputes. At the resumed hearing, he gave ex tempore reasons for dismissing the application for stay (see Australian Postal Corporation v Stephens [2011] FCA 947).
13. Rares J said that the parties before him were “at loggerheads over what the terms of his Honour’s order for reinstatement mean”, and in particular, whether “the order for reinstatement is not constrained by the fact that his contract had only nine further days to run”. It is clear that Rares J then decided this issue against Mr Stephens. After considering Blackadder v Ramsey Butchering Services Pty Ltd [2005] HCA 22; (2005) 221 CLR 539, which I had also attempted to apply, he said:
    • 15. His Honour took into account in determining whether to order reinstatement, his findings as to the likelihood of Mr Stephens being offered further employment with appropriate adaptation of its conditions to accommodate any rehabilitation requirements arising from his work injury. It is not difficult to see why his Honour chose that path. Since Australia Post had seen Mr Stephens substantively as an employee worthy of its consideration for further employment, it is likely that if he were reinstated, as his Honour found, it would have offered him a further contract. However, his Honour’s reasons for making the order for reinstatement are different from the order he pronounced. Those reasons do not create some basis on which to interpret or confine the clear terms of the actual order for reinstatement or the operation of s 545(2)(c).
    • 16. In my opinion, his Honour’s order for reinstatement made on 8 July operated from that day. It obliged Australia Post to reinstate Mr Stephens to his former employment for the balance of its term of nine further days. It is not arguable that his Honour exercised his power, in effect, to restore the parties to their positions prior to the wrongful termination, while simultaneously ordering a longer or indeterminate period of reinstatement. In those nine further days, the rights of the parties would have to be ascertained and developed according to what happened, as his Honour stated. This would include whether Mr Stephens would have some further rights by reason of any continuing effect of his injury or pre-existing medical condition under other legislation, such as the Safety, Rehabilitation and Compensation Act 1988 (Cth), and whether, having regard to all relevant matters, Australia Post would decide to make him an offer in writing as contemplated under the existing contract for a further contract on terms that it would specify.
    • 17. Mr Stephens’ contention that reinstatement to his position would be impossible on the terms of his previous contract because the date of 20 January 2010 had passed and therefore the order operated to effect a reinstatement for some unspecified term, is untenable. The ordinary and natural meaning of s 545(2)(c) and the fact that it is a remedial provision all tend against such a construction. The purpose of the order for reinstatement is, so far as possible and in a real sense, to put the employee back in the position he or she would have been in but for the wrongful act of the employer that provided the occasion to enliven the power to order reinstatement under s 545. The employee is entitled to neither more nor less. If he or she may achieve more, it will be because of the fact that the employer will have chosen to revisit its own attitude towards the employee and perhaps to have repaired the unfortunate wrong that was done, having regard to its now judicially determined wrongful conduct.
    • 18. Because Australia Post was obliged from 8 July 2011 to reinstate Mr Stephens and has breached that obligation, no purpose would be served by ordering a stay. On one view, the order is spent. If it is not spent and Australia Post wishes to remedy its breach of the order by offering Mr Stephens employment, it can choose to do so now. It is not appropriate for the Court to grant relief retrospectively to stay an order in circumstances where the time for compliance with the order has already, in practical terms, expired. The consequences that flow from any breach of the order is another matter. But neither party explained why, despite persisting in their disagreement about the terms of the reinstatement that had been ordered, neither sought to use the liberty his Honour granted to them to apply. Nor did Australia Post explain its delay in applying for a stay.
14. Rares J then listed Australia Post’s application for leave to appeal for hearing the following week, on 19 August 2011. He gave ex tempore reasons for refusing leave (see Australian Postal Corporation v Stephens (No 2) [2011] FCA 992). In his judgment, he noted that “Australia Post no longer wishes to pursue its application for leave to appeal against the reinstatement order”. Essentially, Rares J was not satisfied that any substantial injustice would result from refusing leave to appeal, since it would be open to Australia Post to challenge my findings of fact in relation to liability after I had given a final judgment on penalty.
15. The evidence now shows that, presumably spurred by Rares J’s first judgment, Australia Post delivered to Mr Stephens a letter on 12 August 2011, which said:
    • We refer to the order of Federal Magistrate Smith dated 8 July 2011 that Australia Post reinstate you as an employee.
    • As you know, by his decision on 11 August 2011, Justice Rares of the Federal Court of Australia dismissed Australia Post’s application for a stay of that order.
    • Accordingly, you are hereby reinstated as an employee of Australia Post commencing on Monday 15 August 2011. You are to report to Glenn Errington at 2pm on Monday at the Gosford Hub, 40 Sunnybank Road, Lisarow NSW 2252.
    • The terms and conditions of your employment upon reinstatement as a Driver/Sorter are those set out in the attached fixed term contract signed by you on 26 October 2009, subject to the following provisions:
      • 1. Your employment is for a fixed term until 25 August 2011.
      • 2. The Cessation Date in the Schedule is 25 August 2011.
      • 3. The Salary in the Schedule has increased to $39,382 (pro rata of 36.75 hours per week).
16. Mr Stephens said in his affidavit sworn on 24 September 2011:
    • 14. In accordance with the Respondent’s letter dated 12 August 2011, I reported for duty at 2pm on Monday 15 August 2011. Before I commenced duty, however, John Craig, HR Advisor had apparently referred me for a workplace assessment, which was conducted by the Respondent’s OH&S Advisor, Helen Beazley in the presence of the acting Manager, Hub Operations, Glenn Errington and the Manager, Kevin Parry. As a result of the workplace assessment, I was restricted from driving and prohibited from sitting on all the chairs which were used in the workplace (the only chairs that I was permitted to sit on were heavy chairs that were located in the lunchroom).
      • ...
    • 15. During my reinstatement for 9 days –
      • (a) I was not provided with any driving duties.
      • (b) I was constantly reminded that I was only reinstated for 9 days.
      • (c) In connection with my attendance at the Federal Court hearing on 19 August 2011, I was advised:
        • “Although it is not standard Australia Post practice to pay employees to attend court hearings, Australia Post is prepared to pay Mr Stephens for 19 August 2011 as though he was on duty for that day. Accordingly, the reinstatement period does not need to be extended”.
      • ...
    • 16. Since the termination of my employment, I have sold various possessions, either because I was unable to use them due to my injury or because I needed money to maintain living expenses, or both. Due to difficulties with maintaining mortgage repayments, my residence is currently on the market, and to date, I have incurred real estate expenses including advertising and auction costs.
17. On 21 November 2011, the Administrative Appeals Tribunal published a decision in relation to Mr Stephens’ compensation matters, which had been heard over four days from 29 August 2011 (see Re Stephens and Australian Postal Corporation [2011] AATA 824). The Tribunal addressed the medical evidence presented to it by the parties, and concluded at [75]-[76] that “any aggravation to Mr Stephens’ underlying degenerative condition had resolved within a few weeks of 3 December 2009” and did “not last beyond 8 January 2010”. The Tribunal also said that: “Even if we had not come to that view ... the evidence supports a finding that there was no resultant incapacity because the restrictions that Mr Stephens had at that time were the restrictions that he would have because of the underlying condition, irrespective of any aggravation”. The Tribunal did not address Mr Stephens’ current level of incapacity for work.

The resumed proceedings before me

18. The hearing on issues of penalty was adjourned on Australia Post’s application, pending the outcome of its applications to the Federal Court. On 26 August 2011, I gave directions for the filing of evidence and submissions relevant to penalty, and listed this issue for hearing on 28 November 2011. I directed that any application for other orders should be filed “no later than 29 September” and be returnable on 28 November 2011.
19. Australia Post has not applied to vary or supplement my orders made on 8 July 2011, nor sought to re-open any of the findings I made in my earlier judgment. It filed an affidavit by a ‘senior workplace relations advisor’, Mr Stavropoulos, in mitigation of penalty, but adduced no other evidence.
20. Mr Stavropoulos deposed to being aware of only two other findings of contravention by Australia Post of federal workplace laws. The first involved a breach of a dispute resolution clause in an enterprise agreement in 2009, for which it was fined $2,500 in 2010. The second involved an agreed penalty of $95,000 imposed by Kenny J in 2011, for breach of occupational health and safety requirements concerning motor cycles at a worksite in the Northern Territory in 2008 (see Comcare v Australian Postal Corporation [2011] FCA 530).
21. Mr Stavropoulos also presented a copy of Australia Post’s webpage referring to its “community investment programs”, and deposed to its “response to the decision reached in these proceedings”. In this respect, his affidavit said only:
    • 14. Australia Post regularly conducts internal briefings and seminars for the purpose of educating its managers and personnel about a range of workplace relations matters and laws.
    • 15. On 28 July 2011, I conducted an educational briefing of Australia Post’s Human Resources Management team (which is comprised of approximately eleven personnel) on the General Protections provisions and how they apply to employees and other relevant personnel engaged by Australia Post. During the briefing we discussed, among other things, the circumstances giving rise to the Court’s finding of contraventions of the General Protections provision in these proceedings.
    • 16. Following this briefing the Australia Post Human Resources Business Advisors for each of the five Business Units conducted similar briefings at their monthly New South Wales Senior Leadership Team meetings which are attended by managers who have the delegation and authority to make decisions about employment issues that have the potential to engage the General Protections provisions.
22. Mr Stephens filed the affidavit from which I have quoted above, concerning Australia Post’s purported reinstatement of his employment over nine days in August 2011.
23. On 18 November 2011, Mr Stephens filed an application in a case seeking:
    • 1. Pursuant to order 3 made on 8 July 2011, the Respondent appoint the Applicant as driver / sorter with immediate effect, and provide duties in accordance with recommendations made by the Applicant’s treating doctor.
    • 2. The Respondent pay the Applicant’s costs under section 570 of the Fair Work Act 2009.
24. No additional evidence was filed in support or in opposition, and Australia Post did not object to my entertaining this application, notwithstanding Mr Stephens’ non-compliance with my directed timetable.

Mr Stephens’ application for further orders on reinstatement

25. In my opinion, it is now too late for Mr Stephens to invoke the liberty to apply which I included in my orders on 8 July 2011. I consider that he failed to invoke this liberty in a timely manner, and that it would now no longer be appropriate for me to make any additional orders in relation to reinstatement as a result of the events occurring in the intervening period.
26. It must have been immediately apparent to Mr Stephens that Australia Post intended to ignore my order while it pursued avenues of appeal. Mr Stephens was then content to argue the effect of the reinstatement order before Rares J, and to pursue his on-going disputes with Australia Post in that forum and in the AAT.
27. The effect of my order was then addressed by Rares J after receiving the submissions of the parties. He gave reasons for accepting the submissions of Australia Post that reinstatement was limited to the unexpired term of Mr Stephens’ previous contract of employment. I do not consider that it would now be appropriate for me to depart from the construction of its terms adopted by his Honour. I accept that there may not be a strict issue estoppel arising from the proceedings before Rares J, which prevents Mr Stephens contending that the order for reinstatement was not limited to the outstanding period of the term contract, and is now spent. However, I am not persuaded that his Honour’s interpretation of my order, in the light of my judgment and his Honour’s opinion as to the ambit of s.545(2)(c) of the Fair Work Act, was clearly wrong, and that I should not follow his Honour’s conclusions for reasons of comity and deference owed by an inferior court. I therefore would conclude that it would now be futile for Mr Stephens to seek further orders which would repeat, vary, or add conditions or other embellishments to order 2 which I made in unqualified terms under s.545(2)(c) on 8 July 2011.
28. In her submissions in support of Mr Stephens’ application for further orders in relation to reinstatement, his counsel invited me to entertain a broader application, in effect, to make additional orders requiring Australia Post to provide employment to Mr Stephens under the broad power found in s.545(1) of the Fair Work Act, of which s.545(2)(c) is not exhaustive. However, in my opinion, the specific reinstatement power is implicitly exhaustive in relation to the ambit of orders aimed at achieving ‘reinstatement’ as a remedy. Accepting the reasoning of Rares J, I have already fully addressed Mr Stephens’ prayer for relief in that respect.
29. Moreover, no broader or different remedy was sought at the trial which led to my orders made on 8 July 2011. Assuming that I have an unconfined discretion now to allow Mr Stephens to re-open his case in relation to the relief sought under s.545, I would refuse to exercise it now in the current circumstances of this litigation.
30. This assumes the availability of unfettered discretion under Federal Magistrates Court Rules r.16.05(1), in circumstances where my earlier orders appear not to have yet been entered. I note in this respect that counsel for Australia Post’s invocation of DJL v Central Authority [2000] HCA 17; (2000) 201 CLR 226 and Bailey v Marinoff [1971] HCA 49; (1971) 125 CLR 529 proceeded on an incorrect assumption (which I may have shared at the hearing) that my order has been entered.
31. Taking into account Mr Stephens’ current unfortunate situation and all that has been said on his behalf by his counsel, I have decided to refuse Mr Stephens’ application in a case, and to refuse to vary or set aside orders 2 and 5 which I made on 8 July 2011. I consider that those orders have already fully answered Mr Stephens’ application for relief under s.545 of the Fair Work Act in relation to Australia Post’s contraventions of that Act.

Consideration of penalty

32. The parties’ written submissions on penalty addressed headings taken from the well-known list of sentencing considerations distilled by Mowbray FM in Mason v Harrington Corporation Pty Ltd [2007] FMCA 7, and summarised by Tracey J in Kelly v Fitzpatrick (2007) 166 IR 14, [2007] FCA 1080 at [14]. The list of considerations can guide, but is not a substitute for “the unrestrained statutory discretion” (cf. Gyles J in Sharpe v Dogma Enterprises Pty Ltd [2007] FCA 1550 at [11]). Ultimately, I must arrive at an amount within the range of penalties provided in the legislation which is proportionate to the gravity of the offence committed, and also takes into account other sentencing considerations including deterrence (cf. Graham J in Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (2008) 165 FCR 560, [2008] FCAFC 8 at [54]). The matters which become determinative in each case differ with the particular circumstances, and recent judgments of the Full Court have emphasised the discretionary nature of the power to impose civil penalties for breach of industrial legislation, and have supported a mental process of ‘instinctive synthesis’ (cf. Australian Ophthalmic Supplies Pty Ltd v McAlary-Smith (supra) at [27]).
33. The non-exhaustive list of considerations suggested in the above authorities is:
    • The nature and extent of the conduct which led to the breaches.
    • The circumstances in which that relevant conduct took place.
    • The nature and extent of any loss or damage sustained as a result of the breaches.
    • Whether there had been similar previous conduct by the respondent.
    • Whether or not the breaches were deliberate.
    • Whether the respondent had exhibited contrition.
    • Whether the respondent had taken corrective action.
    • Whether the respondent had co-operated with the enforcement authority.
    • The need for specific and general deterrence.
34. I have referred above to passages in my judgment on liability which indicate the circumstances of Australia Post’s two contraventions.
    I can explain shortly what I regard as the seriousness of its culpability.
35. Although my findings were confined to conduct relating to one action taken concerning one employee among the thousands of other employees of Australia Post, they give rise to very substantial concerns. The termination action was taken by a senior manager, and apparently had – and still has – the support of his superiors and colleagues. There is no evidence that his conduct is not still regarded at all levels of management within Australia Post as normal and acceptable, when summarily terminating an employee suffering from a work-related disability with a pending compensation claim of potential significance.
36. The full consequences for Mr Stephens of the contraventions are difficult to assess with hindsight. It is particularly difficult now to predict how Australia Post might have dealt with his expiring term of employment in January 2010, if Mr Brennan had not seized upon the two complaints concerning events on 5 January 2010. As I found, there was, before that time, a real prospect that discretions would have been exercised to protract his employment beyond the expiring term, and genuinely to attempt to provide rehabilitation measures in relation to his back incapacity.
37. However, the medical evidence now appears to show that Mr Stephens’ back disability continued to deteriorate, and that it has non-work related foundations. I might have hoped that Australia Post would have adopted a less intransigent stand against re-employing Mr Stephens and might have responded more sympathetically to my reinstatement order, but it is now manifest that its management became committed to defending Mr Brennan’s decision and opposing Mr Stephens’ reinstatement and compensation claims. This is a position which the law allowed it to adopt. How Australia Post managers might otherwise have responded to Mr Stephens’ misfortunes remains in the realm of pure speculation in my mind. In short, I accept that Mr Stephens now finds himself in a most unfortunate situation in relation to both employment and compensation rights. However, I am not positively satisfied on the balance of probabilities that his present misfortunes should be attributed to the contraventions for which I am now assessing penalty.
38. Australia Post led no evidence at the trial, nor at the hearing on penalty, to show that it has established necessary institutional safeguards against abuse of its privileged licence to determine its own workers’ compensation liabilities, in situations where there could be a reality or appearance of conflict of interest in decisions concerning the early termination of its injured workers. The absence of that evidence has left me dissatisfied that its managers with powers of summary dismissal, who are in the same situation as Mr Brennan in the present case, might not be influenced to reduce Australia Post’s exposure to potential liabilities in relation to injured employees, particularly concerning the providing of light duties employment, when making significant decisions in relation to the dismissal of those employees.
39. I remain concerned that Australia Post’s decision-making of this type has still not been shown to be totally segregated from the policies, practices, and personnel, which are involved in the management and determination of Australia Post’s obligations under the Safety, Rehabilitation and Compensation Act 1988 (Cth).
40. Mr Stavropoulos’ evidence, and the submissions made to me on behalf of Australia Post in relation to mitigation, are far from reassuring that lessons have been learned and satisfactorily addressed as a result of my adverse findings, at any level of management in Australia Post. Mr Stavropoulos’ evidence of his briefing given to a human resources management team provides almost no evidence of this. I am left uninformed as to what was said, nor what future actions were agreed to prevent a future exposure to successful prosecution of the present sort, nor the extent to which the most senior levels of management have been made aware of my findings. I note that the briefing occurred at a time when Australia Post was ignoring my order for reinstatement, and was challenging my findings. I am left with no confidence that Australia Post took any serious ‘corrective’ action at that time or subsequently, in relation to its relevant personnel practices. I am also unpersuaded that its subsequent brief period of reemployment of Mr Stephens, at the time when the matter was still pending before Rares J, showed bona fide corrective action in relation to Mr Stephens.
41. I consider that the circumstances of the present contraventions suggest that significant weight should be given to considerations of deterrence when assessing penalty, both in relation to Australia Post itself, and also in relation to managers of other employers who might be tempted to allow their exposure to workers’ compensation liabilities to influence their decisions on terminating injured employees. Although the level of penalty which I have power to impose might not appear likely to be influential on the culture and financial affairs of an employer of the size of Australia Post, the relative level of penalty needs to send a clear message to the most senior levels of management in Australia Post. The message is that they need to give greater attention to establishing or maintaining institutional safeguards to ensure that, in the future, they will be able to rebut the presumption raised by s.361 as to the true reasons motivating managers such as Mr Brennan when summarily terminating the employment of injured employees in Mr Stephens’ situation.
42. In my opinion, my findings as to the circumstances of the contraventions and the need for deterrence reveal that the degree of fault was very considerable, and is now deserving of recognition in a substantial penalty within the range provided by the Fair Work Act.
43. As my observations above explain, when arriving at this assessment, I have given dominant weight to the inadequately evidenced management context in which Mr Brennan made his decision to terminate Mr Stephens’ employment, as well as to the other circumstances in which Australia Post failed to satisfy me that it had rebutted the presumption raised by s.361 of the Fair Work Act raised by Mr Stephens in the present case.
44. I have taken into account the submission of counsel for Australia Post that I did not “make a positive finding that Mr Brennan was actually influenced in his decision making by the existence of Mr Stephens’ workplace rights”, and that there was an absence of evidence that there was “wilful or deliberate” contravention. I have accepted that I should not assess penalty at the highest level. However, s.361 raises an obligation on employers to take active measures which will provide evidence disproving such states of mind when taking adverse action against employees, and the significance in my findings rests in my failure to be so satisfied by Australia Post’s evidence in the present case.
45. I do not consider that a lesser assessment of culpability should be made, by reason of Australia Post not being shown to have previously been in contravention of these provisions of the Fair Work Act or of an equivalent provision in industrial legislation. The concern which I have identified above should have been manifest. I do accept, however, that its previous relatively ‘clean’ record should be taken into account in mitigation, and should point away from the imposition of penalty at the highest level.
46. I have above explained why I would not mitigate penalty because of the taking of ‘corrective action’ by Australia Post following my publication of my judgment. Manifestly, it took no such action while Mr Stephens’ grievances were pending in Fair Work Australia, this Court, and the AAT.
47. In relation to ‘contrition’, as its counsel recognised in his written submissions:
    • 47. In circumstances where it decided to challenge the Liability Decision in the proceedings it commenced in the Federal Court of Australia to which the Applicant has referred, the Respondent does not advance a submission that it has exhibited contrition in respect of the contraventions. Genuine contrition may reduce a penalty, but the absence of contrition is not an aggravating factor; see for example BHP Steel (AIS) Pty Ltd v Construction, Forestry, Mining and Energy Union [2001] FCA 336 per Kiefel J at [10]; Alfred v Construction, Forestry, Mining and Energy Union (No 2) [2011] FCA 557 per Tracey J at [38].

It is notable in this respect, that senior levels of management in Australia Post have shown to me none of the awareness of the seriousness of its contraventions, such as was demonstrated to Kenny J in relation to its OHS obligations (see paragraphs [59]-[61] of her judgment).

48. The maximum penalties which I can impose are $33,000 in relation to each contravention. In my opinion, taking into account all the relevant considerations bearing on each of the contraventions considered separately, an appropriate penalty would be $25,000 for each contravention.
49. However, I accept the submission of counsel for Australia Post that the two contraventions should be regarded as essentially concerning a ‘single course of conduct’, so as to require application of the aggregation principle of sentencing which was recognised by the Full Court in Construction, Forestry, Mining & Energy Union v Williams (2009) 262 ALR 417, [2009] FCAFC 171 at [14]- [19] and Construction, Forestry, Mining & Energy Union v Cahill (2010) 269 ALR 1, [2010] FCAFC 39 at [39]- [42]). In my opinion the overlap is obvious from my above findings.
50. I do not accept the submission of counsel for Mr Stephens that there is an implicit exclusion of this principle, as a result of the absence of reference to contraventions of ss.340 and 351 in the statutory aggregation required under s.557 of the Fair Work Act. The policy reflected in that provision, and its antecedents, can be easily understood without making that drastic implication for the normal sentencing principles which would otherwise arise in relation to other contraventions.
51. I would therefore impose one aggregated penalty of $25,000 in relation to Australia Post’s liability for both contraventions. In these circumstances, no additional reduction under the ‘totality’ principle of sentencing for multiple contraventions was sought by Australia Post, nor would be appropriate.
52. It is common ground that I should order that the penalty should be paid to Mr Stephens pursuant to s.546(3)(c) of the Fair Work Act. I consider that this would be an appropriate application of the usual order (see, for example, Gilmour J in Woodside Burrup Pty Ltd v Construction, Forestry, Mining & Energy Union [2011] FCA 949 at [148]).

Costs

53. Counsel for Mr Stephens sought an order that Australia Post pay all or some of his costs in the proceedings on the special ground provided in s.570(2)(b) that “the court is satisfied that the party’s unreasonable act or omission caused the other party to incur the costs”. She initially also relied upon s.570(2)(c) on the ground that “the party unreasonably refused to participate in a matter before FWA”, but withdrew this submission when I pointed out that the evidence suggested that it was Mr Stephens, and not Australia Post, who terminated conciliation in FWA (see Stephens v Australian Postal Corporation (2010) 202 IR 437, [2010] FMCA 1012 at [5]).
54. I have taken into account all the submissions of Mr Stephens’ counsel as to the course of his dispute with Australia Post, both in this Court and in the AAT. However, the outcomes in both places do not show that Australia Post was without reasonable grounds for opposing the full extent of relief pursued by Mr Stephens. I am insufficiently informed as to the negotiating positions taken by the parties out of court, to assess whether Australia Post acted unreasonably in its negotiations to resolve the dispute prior to judgment. In my opinion, the evidence before me does not show that Australia Post unreasonably defended the allegations of contravention which I have upheld. Nor, in my opinion, should the manner in which it defended the proceedings be characterised as involving an ‘unreasonable act or omission’ in relation to any interlocutory or other procedure.
55. I am therefore not satisfied that s.570(2)(b) applies. I shall therefore make no orders as to costs.

I certify that the preceding fifty-five (55) paragraphs are a true copy of the reasons for judgment of Smith FM

Date: 21 December 2011