Judgement was today handed down in the Federal Court against the CFMEU - again - this time for threatening to put a scaffolding company out of business if it did not hire a particular bloke favoured by the CFMEU.
The CFMEU was fined $245K and an individual official copped a hit too - the full judgement is here:
http://www.austlii.edu.au/au/cases/cth/FCA/2015/1462.html
Justice Tracey said:
The case is devoid of any mitigating circumstances. The Union has shown no contrition, and has not cooperated with the regulator. I accept the submission made on behalf of the respondents that neither of these circumstances should be regarded as an aggravating one. On the other hand, on the facts of the case, and on the way it has been conducted, there is no circumstance to which counsel could point as tending to exert a moderating influence upon the level of the penalty which the court would otherwise impose.
He also said:
It has been repeatedly said that an important – probably the main – function of a regime of civil penalties is to secure observance of the law by placing a price upon conduct which contravenes the law. That is to say, the objective is deterrence, both specific and general. Regrettably, in the circumstances of the Union, specific deterrence has become a major consideration in an exercise of the kind with which I am presently concerned. In written submissions filed on his behalf, the applicant summarised a number of the things that have recently been said by judges of this court on the subject of the Union’s preparedness to ignore the statutory prohibitions to which it is subject. Counsel for the respondents did not engage with the point being made in these submissions: indeed, he recognised that the Union’s record of contravention was a serious one. This was a concession fairly and appropriately made, albeit that, as will appear, I consider that reference to the Union’s record as “serious” understates the situation to a significant degree.
The passage in the applicant’s written submissions to which I have referred was as follows:
The CFMEU’s repeated contravening conduct has been the subject of sustained judicial criticism over a long period of time. For example:
(a) On 9 May 2002, Justice Cooper made the following observation:
If an industrial organisation turns a blind eye, or does not concern itself as to the manner and methods employed by officers, servants or agents of the industrial organisation to achieve what they see as the organisation’s ends, the organisation is at risk of being heavily penalised where the means adopted are prohibited and exhibit the worst features of the proscribed conduct.
In the present case, the first and second respondents have chosen to give no evidence as to what those in authority knew of the conduct of the third and fourth respondents at and prior to the matters complained of. Nor is there any evidence as to what, if any, action was taken by the organisation to counsel, or moderate the behaviour of, the officers for the future. [Hamberger v Construction, Forestry, Mining and Energy Union [2002] FCA 585 [20]-[21]]
(b) On 11 April 2008, Justice Gyles made the following observation:
A number of findings involving unlawful behaviour by officials related to the CFMEU have been made in recent years ... [His Honour then cited 12 cases] ... ... These various cases illustrate that the federal body has not been effective in ensuring that officials act in accordance with the law. I note that there is no evidence of offending officials... suffering any serious disciplinary penalties.
In my opinion, notwithstanding the purely vicarious nature of the liability of the CFMEU, the penalty in this case, when compared with the maximum penalty, should adequately reflect the systematic nature of the failure of the CFMEU to deter or prevent actions of the kind involved in this case and act as a spur towards effective action by the CFMEU and the State entities connected with it. [A & L Silvestri Pty Limited v Construction, Forestry, Mining and Energy Union [2008] FCA 466 [13]-[14]]
(c) On 29 May 2009, Justice Jessup said:
... the history tends to suggest that the Union has, with respect to anticoercion and similar provisions of industrial laws, what the High Court in Veen described as ‘a continuing attitude of disobedience of the law’... [Williams v Construction, Forestry, Mining and Energy Union and Mates (No 2) [2009] FCA 548; (2009) 182 IR 327 [29]]
(d) On 10 September 2009 Justices Goldberg, Jacobson and Tracey of the Full Court of the Federal Court referred to:
the litany of contraventions ... [and] the many prior contraventions of relevant statutory proscriptions by the Union ... indicating a propensity, on the part of the Union, to engage in proscribed conduct. [Draffin v CFMEU & Ors (2009) 189 IR 145 [70], [79] and [92]]
(e) On 21 November 2013, Justice Tracey said:
There is also a need for any penalty to have a specific deterrent effect on the CFMEU. It has, as I have already outlined, a deplorable record of contraventions of the BCII Act and similar legislation. The union has not displayed any contrition or remorse for its conduct. The contravention is serious... Substantial penalties for misconduct, prior to that presently under consideration, have not caused the CFMEU to desist from similar unlawful conduct. As a result this consideration must weigh heavily when determining an appropriate penalty. [Cozadinos v Construction, Forestry, Mining and Energy Union [2013] FCA 1243 [43]]
(f) On 23 December 2014, Justice White observed:
The Director provided a schedule of the occasions on which the CFMEU has been dealt with by Courts for contraventions of industrial legislation. It is fair to describe the CFMEU record as dismal. Since 1999, the CFMEU has had penalties imposed on it by a Court on numerous occasions. ...The record indicates an attitude of indifference by the CFMEU to compliance with the requirements of the legislation ... It also indicates that deterrence must be a prominent consideration in the fixing of penalties in the present cases. [Director of the Fair Work Building Industry Inspectorate v Stephenson [2014] FCA 1432; (2014) 146 ALD 75 [76]-[77]]
(g) On 20 April 2015, Justice Tracey observed:
The present conduct of one of its officials adds to this depressing litany of misbehaviour. It evidences an ongoing disregard for the rule of law and highlights the need for the imposition of meaningful penalties within the limits imposed by the Act. [Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 353 [96]-[97]]
(h) On 1 May 2015, Justice Tracey observed:
Underlying the various contraventions some consistent themes are apparent. In seeking to achieve its desired outcomes the CFMEU had available to it lawful processes which it could have pursued. It chose, instead, to prosecute its objectives by means which it must have known or, at least, should have known, were unlawful. Not for the first time the CFMEU sought to impose its will by means of threats and coercion against employers. Its approach was one of entitlement: it was free, despite legal constraint, to deploy its considerable resources in order to achieve its industrial objectives. The concept of the rule of law was anathema to it. [Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2015] FCA 407 [103]]
(i) On 12 June 2015, Justice Logan observed in reference to the CFMEU:
An industrial organisation, be it an employer organisation or an employee organisation, which persistently abuses the privilege by engaging in unlawful conduct cannot expect to remain registered. [Director, Fair Work Building Industry Inspectorate v Cradden [2015] FCA 614 [9]
His Honour later described the CFMEU as having an “outrageous disregard” for “Australian industrial norms”. [[2015] FCA 614 [49]]
Second reference in (i) at end of second para– [[2015] FCA 614 [49]]
(j) On 3 July 2015, Justice Gilmour observed:
The CFMEU’s long history of its officials conducting themselves unlawfully ... calls for a significant component of specific deterrence. [Director of the Fair Work Building Industry Inspectorate v Upton [2015] FCA 672 [61]]
(k) On 14 August 2015, Justice Mansfield observed:
There is clearly, as other judges have recorded, a strong record of noncompliance on the part of the Union through its officers with provisions of industrial relations legislation, although that does not mean that a disproportionate penalty can or should be imposed. I note that significant past penalties have not caused the Union to alter its apparent attitude to compliance with the entry provisions and restrictions under the FW Act.
There is clearly an ongoing need for an order to be made for a pecuniary penalty which has a deterrent effect upon the Union and signals to others who may consider engaging in such conduct or like conduct that it is inappropriate to do so. [Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 3) [2015] FCA 845 [24]-[25]]
(l) On 10 September 2015, Justice Flick observed:
But for the past history of contraventions on the part of the CFMEU, a penalty would have been imposed of $175, 000; when that past history is taken into account it is considered that the penalty should be $225, 000. Approached in this manner, the reasoning at least has the advantage of transparency. The penalty of $225,000 is proportionate to the contraventions that have been found to have occurred. Rather than the penalty of $225,000 being seen as an increase in the penalty “because of prior convictions”, it is more correctly characterised as a penalty that may better serve the objective of deterrence. [Director of the Fair Work Building Industry Inspectorate v Bragdon (No 2) [2015] FCA 998 [21]]
(m) On 4 November 2015, Justice Jessup observed:
As has become customary in cases such as this, the applicant has placed before the court a schedule of the Union’s previous contraventions of civil penalty provisions in the FW Act, and of corresponding provisions in the Building and Construction Industry Improvement Act 2005 (Cth). The pattern of contravention which emerges from material such as this has been the subject of comment by the court on a number of occasions. The schedule paints, one would have to say, a depressing picture. But it is more than that. I am bound to say that the conduct referred to in the schedule bespeaks an organisational culture in which contraventions of the law have become normalised. [Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (The Mitcham Rail Case) [2015] FCA 1173
To the observations set out above should now be added the following, from the judgment of Tracey J in Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1213 at [62]-[63]:
The circumstances of these cases were not identical to those in the present case. They, nonetheless, bespeak a deplorable attitude, on the part of the CFMEU, to its legal obligations and the statutory processes which govern relations between unions and employers in this country. This ongoing willingness to engage in contravening conduct must weigh heavily when the need for both specific and general deterrence is brought to account.
Neither the CFMEU nor any individual respondent is to be punished again for earlier misconduct. They are, however, to be punished more severely than they would have been had they had no adverse record or been responsible for only a few isolated incidents over a period of many years. Their continued willingness to engage in contravening conduct supports the view that earlier penalties, some of them severe, had not had a deterrent effect: cf Veen v R (No 2) [1988] HCA 14; (1988) 164 CLR 465 at 477-8. The longer such recidivism continues the more likely it is that this consideration will carry greater weight than the principle that the maximum available penalty must be reserved for the worst possible offending.
