Penalty hearing
1. The Federal Court at Perth today considered submissions on penalty for 87 respondents in the Hadgkiss v Aldin & Ors, Perth to Mandurah Railway Project, proceeding.
2. Justice Gilmour was provided with statements of agreed facts that set out the details of the unlawful conduct. It disclosed that 87 respondents admitted taking unlawful industrial action contrary to s38 of the Building and Construction Industry Improvement Act 2005 (BCII Act). Sixty-seven of these respondents also admitted breaching an order of the Australian Industrial Relations Commission (AIRC) contrary to s178 of the Workplace Relations Act 1996 (WR Act).
3. The ABCC submitted that the court should impose:
• a penalty of $9,000 for each respondent who engaged in unlawful industrial
action: $3,000 to be paid in 28 days, $6,000 suspended for 3 years;
• an additional penalty of $3,000 for each respondent who breached the order of
the AIRC: $1,000 to be paid within 28 days, $2,000 suspended for 3 years; and
• the suspended penalties would be paid if a respondent contravenes the BCII Act
or the WR Act during the 3 year period.
4. The ABCC submitted that the BCII Act was introduced to ensure that building work is carried out fairly, efficiently and productively for the benefit of all building participants.
The BCII Act implements a framework to curb unlawful strikes in the building and
construction industry. In assessing an appropriate penalty, the ABCC submitted that
deterrence should be the primary factor under consideration.
5. The ABCC argued that the unlawful industrial action was serious because the strike:
• was deliberate and knowingly in defiance of the law;
• lasted from 24 February to 3 March 2006 and caused substantial loss to the
employer;
• was in contravention of an AIRC order not to take industrial for the remainder of
the project;
• created a substantial risk to property by halting tunnelling under the CBD in Perth;
and
• delayed the project which was for the public benefit and hence caused public
inconvenience.
6. The ABCC recognised the following mitigating factors in its submission:
• each of the respondents admitted the contraventions, avoiding the expense of a
lengthy trial; and
• no penalty has previously been imposed on any of the respondents under the BCII
Act or WR Act.
7. Counsel for the respondents confirmed that any penalties imposed or legal costs
incurred by the respondents were to be paid out of the ‘Mandurah Dispute Fighting
Fund’.
8. The respondents argued that any penalty imposed should be fully suspended.
9. His Honour Mr Justice Gilmour reserved his decision on penalty.
Maximum penalties
10. The maximum penalties that may be imposed are:
• $22,000 for a contravention of s38 of the BCII Act; and
• $6,600 for a contravention of the AIRC order under the WR Act.
Other Respondents
11. Proceedings were discontinued against 14 respondents. No order as to costs was made.
12. Of the remaining respondents:
• four respondents have failed to file an appearance or defence. A penalty hearing
for these respondents is listed for 14 November 2007; and
• two respondents remain unserved.
Background facts
13. On 5 July 2006, the ABCC filed proceedings in the Federal Court at Perth against 107 employees working on the Perth to Mandurah Railway Project.
14. The statement of claim alleged that from 24 February 2006 to 3 March 2006 on the section of the railway known as New Metro Rail City Project - Package F:
• 107 employees contravened section 38 of the BCII Act by taking unlawful
industrial action; and
• 82 of those employees breached an order to the AIRC made pursuant to section
127 of the WR Act. The order directed the CFMEU members employed by the
Leighton Kumagai Joint Venture on the Package F not to take industrial action
for the remainder of the Project.
15. The issue that precipitated the strike was the termination of a CFMEU shop steward.
16. The employees’ union, the CFMEU, was not subject to the proceedings. A CFMEU official addressed the stopwork meetings and advised the employees they were exposed to severe penalties by taking strike action and recommended a return to work. The employees rejected this recommendation on three separate occasions.
17. The ABCC sent ‘show cause’ letters to the workers on 3 March 2006. The purpose of the letters was to inform employees that they risked prosecution and invited them to provide a valid reason for their absence from work. Workers who provided a satisfactory explanation for their absence were not prosecuted.