The Federal Court has imposed a $545,000 fine on the Construction, Forestry, Mining and Energy Union (CFMEU) for unlawful industrial action. Justice Logan emphasised the “outrageous disregard in the past and also in the present case of Australian industrial norms” by the union.

Implications for employers

This decision shows that the courts are taking a hard-line approach to unions who disregard industrial laws. In doing so, considerable weight is placed on the need for both specific and general deterrence in relation to contraventions of industrial legislation. In particular, the court is likely to impose large fines where a union has a history of flouting industrial laws.

Background

Grocon Constructors Queensland Pty Ltd (Grocon) was the managing contractor of a Queensland Government Housing project known as the “Common Ground Project”. In February and March 2012, Grocon and the CFMEU were engaged in bargaining with respect to a building enterprise agreement under the Building and Construction Industry Improvement Act 2005 (Cth) (BCII Act).

Grocon employees were engaged in a protected industrial action strike over the period 13 to 23 March 2012 in furtherance of their bargaining objectives. During that period, the CFMEU engaged in its own industrial action, however, its activities did not constitute protected industrial action. The individual respondents, who were at the time either officers or delegates of the CFMEU, were the persons who engaged in these activities on behalf of the CFMEU.

In summary, the activities included:

  1. the parking of vehicles to obstruct the main access point to the Common Ground Project site;
  2. creating a practical impediment to entry to the site by parking a CFMEU van near the entry and setting up and gathering around a barbecue under an awning attached to that van; and
  3. upsetting, intimidating, abusing and threatening various Grocon employees and subcontractors and their employees who sought access to the Common Ground Project site.

These activities impeded, hindered or denied access to the Common Ground Project site for either Grocon employees who were not engaged in the protected industrial action, for employees of subcontractors and/or for persons attempting to deliver goods and materials to the site.

Decision

The relevant provisions considered in the case were as follows.

  • Section 44(1) of the BCII Act states that “a person must not take or threaten to take any action … with intent to coerce another person, or with intent to apply undue pressure to another person, to agree … to make … a building agreement”.
  • Further, section 69 of the BCII Act makes the CFMEU responsible for the conduct of its individual members.
  • Under section 49 of the BCII Act, the maximum penalty for an individual is 200 penalty units in respect of each contravention of section 44(1), and for a body corporate it is 1000 penalty units.

Ultimately, the respondents acknowledged the above behaviours as contraventions of section 44(1), and the case therefore did not proceed to a contested hearing, but only considered the appropriate penalty.

In considering the appropriate penalty, Logan J observed that it was important to assess which of the conduct properly constituted a “course of conduct” in order to avoid over-penalisation. Referring to the joint judgement of Middleton and Gordon JJ in Construction, Forestry, Mining and Energy Union v Cahill (2010) 194 IR 461 at [39] to [41], Logan J determined that the actions by the CFMEU on each day constituted a separate “course of conduct” to which one penalty should be applied.

Logan J also considered the totality principle in relation to the fixing of fines, being that “the court must fix a fine for each offence, and then review the aggregate, considering whether it is just and appropriate, as a reflection of the overall criminality”.

Logan J took into account the mitigating factors raised by the CFMEU, including that:

  1. there was no violence or criminal property damage which occurred in the course of the blockades;
  2. it was still possible to access the site at a subsidiary access point, given that the blockade was only over the main access point;
  3. those seeking to enter the site were able to, despite the abuse and obstructive behaviours;
  4. the case did not proceed to contested hearing; and
  5. there was no direct economic loss to Grocon evidenced.

However, Logan J agreed with observations made by Tracey J in a recent similar case, including that the CFMEU’s “egregious record of repeated and wilful contraventions of the provisions of industrial legislation … must weigh heavily when the need for both specific and general deterrence is brought to account”. His Honour also took into account that there had been “no expression of contrition or remorse”.

Logan J made civil penalty orders for $5,000 per individual per day of involvement, except for the second respondent, who received a penalty of $10,000 per day of involvement as he had previously engaged in other conduct which was later found to be in contravention of the applicable industrial legislation. His Honour made civil penalty orders for $50,000 per day of contravening action against the CFMEU, with the penalties totalling $545,000.

Logan J considered that any lesser penalty “would not serve the main purpose of the Act and the public interest … which this Act was designed to promote”, and that “had there been evidence of particular economic loss at the site, or worse, conduct, and had there not been at least something of the mitigation entailed in an acknowledgement of the contraventions, the penalties in respect of the CFMEU would have been much greater”.

Director, Fair Work Building Industry Inspectorate v Cradden [2015] FCA 614 (12 June 2015)