The High Court has ruled that the practice of prosecuting agencies making submissions regarding an agreed penalty in civil prosecution proceedings is appropriate and may be considered by a court. This decision is helpful as it removes the uncertainty which has existed since the decision of the High Court in Barbaro v The Queen (2014) 253 CLR 53 which found this practice was inappropriate in criminal prosecutions.

Implications for employers

  • Employers and prosecutors retain the ability to make joint submissions to the court for the determination of any penalty or settlement that is agreed between the parties to be appropriate.
  • Courts are not bound to accept the agreed penalty proposed in joint submissions if it is considered inappropriate, but the joint submissions will be influential.
  • Allowing the parties to make joint submissions on penalty should provide employers with greater certainty of outcome in prosecution proceedings and allow penalty proceedings to be resolved on an agreed basis rather than contested in lengthy litigation.

Background

This decision concerns an appeal from a Full Court of the Federal Court addressing whether courts, in civil penalty proceedings, are prevented from considering and imposing penalties that have been agreed between the parties.

In the initial proceedings, the Fair Work Building Commission (FWBC) commenced action against the CFMEU and CEPU (Unions) for contravening a civil penalty provision prohibiting unlawful industrial action. The Unions admitted the contraventions and agreed with FWBCr to seek declarations from the Court for pecuniary penalties.

The key question in the proceedings was whether the High Court decision in Barbaro v the Queen was valid and could apply in a civil context. Barbaro concerned a criminal prosecution which found that prosecutors could not make submissions to a sentencing judge nominating a range of sentences. The Full Federal Court determined this principle should also apply in civil proceedings such as prosecutions commenced by the FWBC or the Fair Work Ombudsman. This meant the parties were not permitted to make joint submissions seeking an agreed penalty.

This finding was challenged in the High Court.

Decision

The High Court found the decision in Barbaro does not apply to civil penalty proceedings. A court can receive and, if appropriate, accept an agreed civil penalty submission.

In drawing its conclusion, the High Court affirmed the decisions in NW Frozen Foods (1996) 71 FCR 285 and Mobil Oil [2004] FCAFC 72which held that it may be appropriate for parties to present evidence in the form of agreed statements. These cases also held that the courts would be required to form their own view about the appropriate range of penalties and not to act merely as a rubber stamp for party wishes.

The High Court recognised civil proceedings generally have considerable scope for parties to agree on the facts and the consequences. It also recognised that there is scope for the Courts to be persuaded on the appropriate remedy. Bearing this in mind, the High Court formed the view that courts should be able to approve a settlement agreed between parties which involves the public interest, as long as the settlement is appropriate.

The High Court overturned the Full Federal Court’s reasoning finding there was an important public policy interest in promoting the predictability of the outcome of civil penalty proceedings. Parties may choose to do this by agreeing on penalties. The practice of accepting agreed penalty submissions increases the certainty of outcome for regulators and wrongdoers and avoids potentially lengthy and complex litigation on the question of penalties.