Case: Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426 ; (2008) 177 IR 61
Outcome: referred to
are various considerations that may be relevant in determining an appropriate penalty for a contravention of the Building and Construction Industry Improvement Act . They include: (a) the circumstances in which the relevant conduct took place; (b) the nature and extent of the conduct which led to the breaches, including whether the conduct was undertaken in deliberate disregard of the applicable law; (c) the consequences of the contravening conduct, including the nature and extent of any loss or damage sustained as a result; (d) where more than one contravention of the Act is involved, whether the contraventions are properly seen as distinct or whether they arise out of the one course of conduct; (e) whether the respondent has previously been found to have engaged in similar unlawful conduct; and (f) the need for specific and general deterrence. See Stuart-Mahoney v Construction, Forestry, Mining and Energy Union [2008] FCA 1426 ; (2008) 177 IR 61 , at 69 [40] per Tracey J and Construction, Forestry, Mining and Energy Union v Coal and Allied Operations Pty Ltd (No 2) [1999] FCA 1714 ; (1999) 94 IR 231 at [7] - [8] per Branson J, both of which have been cited with approval. These factors are relevant in this case. In Stuart-Mahoney , Tracey J also included a number of other factors, such as the size of the business enterprise involved; whether senior management was involved in the breaches; whether the party committing the breach had exhibited contrition; whether the party committing the breach had taken corrective action; whether the party committing the breach had cooperated with the enforcement authorities; and the need to ensure compliance with minimum standards by provision of an effective means for investigation and enforcement of employee entitlements. As appears in the following discussion, some of these factors have some bearing on the appropriate penalties in this case. It is convenient to consider the question of penalties, having regard to the various factors falling for consideration. Similar unlawful conduct in the past is relevant and may justify a heavier penalty than might otherwise be imposed, although not a penalty that is disproportionate to the contravention in question: see Coal and Allied Operations Pty Ltd (No 2) 94 IR at 232 [7]-[8] per Branson J. As Tracey J observed in Stuart-Mahoney 177 IR at 70 [44], "[s]imilar previous conduct demonstrates that the respondent has a history of engaging in the particular conduct in question, that the penalties previously imposed were insufficient to deter the respondent from re-engaging in that conduct and that the respondent has failed to take adequate steps to prevent further contraventions". Also, as his Honour went on to say: Conduct which is of a different character does not assist this assessment: see Leighton Contractors Pty Ltd v Construction, Forestry, Mining and Energy Union [2006] WASC 317 ; (2006) 164 IR 375 at 389 [67] . Similar conduct which has been found to contravene other legislative provisions will have potential relevance. In this case, any previous contraventions by the respondents of s 43 of the Building and Construction Industry Improvement Act will be relevant. The applicant submitted that the Union had previously been found to have contravened s 43 of the Building and Construction Industry Improvement Act in Stuart-Mahoney 177 IR 61. In Stuart-Mahoney 177 IR 61, the respondent Union admitted (on 16 April 2008) that, in October 2005, it had contravened ss 38 and 43 of that Act. On 19 September 2008, the Court made declarations to that effect and imposed penalties. The respondents noted, correctly in my view, that this contravention of s 43 is not properly treated as a prior contravention: the conduct in question preceded the first contravention here (on 15 February 2006) but was not the subject of judicial decision (or admission) until last year. Stuart-Mahoney shows, however, that the Union did in fact engage in similar conduct prior to 15 February 2006 a fact that may be taken into account although accorded less significance than if the matter had been dealt with by the Court before 15 February 2006. In Stuart-Mahoney 177 IR at 71 [49], Tracey J held that the Union was a very large national organisation. On the basis of Mr Gregor's affidavit, I would reach the same conclusion. Its financial report for the year ending 31 December 2007 stated that, as at 31 December 2007, the Union had 103,850 members and net assets of $382,393. Mr Mates stands in a very different position to the Union. He is an individual employed as a worker on a building site. There was in this case no evidence that any senior official or members of the governing bodies of the Union were involved in the contravening conduct. Accordingly, the present case is distinguishable from the situation in Finance Sector Union v Commonwealth Bank of Australia [2005] FCA 1847 ; (2005) 224 ALR 467 , where Merkel J found (at 475 [27]) that CBA acted through senior executives in its contravening conduct. The case is also distinguishable from Stuart-Mahoney 177 IR 61, where (at 71 [51]) Tracey J noted that the contraventions in that case took place with the knowledge and consent of senior Union officials. This is not an aggravating circumstance in this case. Section 3(1) of the Building and Construction Industry Improvement Act specifically states that the main object of the Act is "to provide an improved workplace relations framework for building work to ensure that building work is carried out fairly, efficiently and productively for the benefit of all building industry participants and for the benefit of the Australian economy as a whole". The imposition of penalties for contraventions of provisions such as s 43 is one way in which this is achieved. As already noted, the contraventions under consideration were clear. Bearing these factors in mind, the need for general deterrence is plain enough, with the result that penalties should be imposed at what has been termed a "meaningful level" to serve as a general deterrence to others who may be disposed to engage in the conduct in question: see Stuart-Mahoney 177 IR 61 at 72 [58], citing Australian Competition and Consumer Commission v IPM Operation and Maintenance Loy Yang Pty Ltd (No 2) [2007] FCA 11 at [66] ; Finance Sector Union v Commonwealth Bank of Australia 224 ALR at 479 [41]; and Australian Competition and Consumer Commission v ABB Transmission &amp; Distribution Ltd [2001] FCA 383 ; [2001] ATPR 41-815 at [13] . The respondents argued for lower penalties, bearing in mind Stuart-Mahoney 177 IR 61, which they noted involved the imposition of an overtime ban over a period of six days for all employees, in response to the builder's refusal to engage apprentices. The trial judge held that the ban was designed to disrupt work, and senior management of the Union knew of and consented to its imposition. The respondents submitted that, in all the relevant circumstances, the appropriate level of penalty that should be imposed on the Union was $10,000, and on Mr Mates, $2,500. The respondents argued that such a level of penalty was consistent with the fact that what was involved in this case was significantly less serious than the contravening conduct found in Stuart-Mahoney 177 IR 61 (also a s 43 breach). The applicant replied that this case warranted a significantly higher penalty than in Stuart-Mahoney , noting other alleged features of the respective cases. Ultimately, whilst consideration of Stuart-Mahoney is helpful, the fact remains that each case must be considered, having regard to its own facts. Unsurprisingly, Stuart-Mahoney was different from this case in a number of material respects.