[2011] FWA 2577

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FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.510(1)(d) - Revocation or suspension of an entry permit

Brian Parker

(RE2011/2733)

Rebel Hanlon

(RE2011/2734, RE2011/2735)

Robert Kera

(RE2011/2736)

Thomas Mitchell

(RE2011/2737)

JUSTICE BOULTON, SENIOR DEPUTY PRESIDENT

SYDNEY, 13 MAY 2011

Consideration as to whether action to be taken by Fair Work Australia under s.510 following decision of the Federal Court in Darlaston v Parker (No 2) [2010] FCA 1382 - power of FWA to initiate proceedings under s.510 - revocation or suspension of entry permits - exception where harsh or unreasonable

[1] These matters relate to action to be taken by Fair Work Australia (FWA) under s.510 of the Fair Work Act 2009 (the FW Act) where a permit holder has been ordered to pay a pecuniary penalty in relation to a contravention of right of entry provisions.

[2] On 10 December 2010 the Federal Court of Australia in Darlaston v Parker (No. 2) [2010] FCA 1382 imposed penalties on four officials of the Construction, Forestry, Mining and Energy Union, Construction and General Division, NSW Divisional Branch (CFMEU) in relation to a number of contraventions of the right of entry provisions in the Workplace Relations Act 1996 (the WR Act). The contraventions concerned conduct by the four officials (the permit holders) at the site of the St Patricks Estate building project in Manly, which is a joint venture between Lend Lease Development Pty Limited (Lend Lease) and the Roman Catholic Church for the Archdiocese of Sydney. The contraventions were summarised by the Court as follows:

[3] The Court ordered that the following penalties be imposed on the permit holders:

[4] Under s.510 of the FW Act, FWA must revoke or suspend all entry permits held by a permit holder where any of the matters referred to in paragraphs 510(1)(a)-(f) is found to have occurred. For present purposes, the relevant provisions of s.510 are as follows:

“510 When FWA must revoke or suspend entry permits

Section 510 is in Division 5 of Part 3-4 of the FW Act. This Part deals with right of entry and commenced operation on 1 July 2009.

[5] Under the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act) the powers in the FW Act in relation to the suspension or revocation of entry permits will apply to various contraventions under the WR Act. In particular, so far as presently relevant, item 6 of Schedule 14 of the Transitional Act provides:

Part 15 of the WR Act deals with right of entry and includes ss.758 and 767 of the WR Act, the provisions which the permit holders were found to have contravened. Schedule 14 of the Transitional Act commenced on 1 July 2009.

[6] Following the decision of the Court in Darlaston v Parker (No. 2), files were opened by FWA and were referred to me under the panel arrangements. The President also made a direction pursuant to s.582 of the FW Act that the matters were to be dealt with by me. On 29 March 2011 the matters were called on for mention and programming. The substantive hearing took place on 19 April 2011.

[7] The main issues raised on behalf of the permit holders in the proceedings relate to (a) the jurisdiction of FWA to take action pursuant to s.510 of the FW Act in these matters, and (b) the exception in s.510(2) whereby FWA is not required to suspend or revoke an entry permit under s.510(1)(d) where suspension or revocation of the permit would be harsh or unreasonable in the circumstances.

Jurisdictional issues

[8] Two jurisdictional issues were raised by Counsel for the permit holders. The first concerns what was said to be the retrospective operation of s.510 of the FW Act and the second relates to the power of FWA to take action on its own initiative under the section.

[9] It was submitted that s.510 as amended by the Transitional Act does not apply to the conduct of the permit holders which took place in December 2008. This, it was contended, follows from the application of the presumption against retrospectivity. It was said that the amended s.510 brings about a significant change in the liability to penalty or forfeiture of permit holders under the WR Act, in that the power of FWA to revoke or suspend may now be exercised of its own initiative and within no defined procedural restrictions. This is in stark contrast to the provisions in the previous legislation which dealt with the revocation or suspension of entry permits by the Industrial Registrar. It was therefore argued that the amended s.510 should be assumed not to have retrospective operation.

[10] In my view it is doubtful that the amended s.510 has any “unintended” or other operation as would relevantly attract the application of the presumption against retrospectivity.

[11] Even on the limited basis argued in the proceedings, it is doubtful that the amended s.510 can be said to operate in such a way as would attract the presumption against retrospectivity. A comparison of the provisions of s.744 of the WR Act and s.510 of the FW Act suggests that, contrary to the submissions of the permit holders, there is no such significant difference between them and affecting liability to penalty or forfeiture by permit holders as would attract the operation of the presumption. Legislation may be considered to operate retrospectively if it provides that rights or liabilities are changed with effect prior to the commencement of the legislation (see generally Maxwell v Murphy (1957) 96 CLR 261). The only changes between the provisions relate to the need for an application by a workplace inspector, the requirement of a statement of the grounds on which the application is made and the determination of the matter by the Industrial Registrar. The essence of both provisions is the liability to have a permit revoked or suspended where the permit holder has been ordered to pay a penalty in respect of a contravention of the right of entry provisions.

[12] Under s.744 of the WR Act, where the Registrar is satisfied that such an order has been made, the permit must be revoked or suspended in accordance with s.744(4). Where a permit has been revoked or suspended under paragraph 744(5)(b) or (e), the permit holder might apply to the Australian Industrial Relations Commission to have the revocation quashed or varied on the ground that it was harsh or unreasonable in the circumstances (s.744(6)). These powers are similar to those now contained in s.510(1) and (2) of the FW Act and which are to be exercised by FWA. The changes made by the Transitional Act would seem to have more to do with the practice and procedure for dealing with the consequences of an offence by permit holders than with altering the substantive rights or liabilities of those persons (see generally Rodway v the Queen (1990) 169 CLR 515 at 520-521).

[13] However there are stronger reasons for rejecting the submissions of the permit holders invoking the presumption against retrospectivity. The presumption will only apply in the absence of some contrary intention which can be discerned with certainty from the legislation. This is not the case here where the intention of the legislature as to the operation of s.510 as amended by the Transitional Act in regard to penalties imposed under the WR Act is clearly expressed. Further, the presumption cannot apply to the amended s.510 because that section cannot be said to have retrospective operation in any relevant sense. This is because s.510 as amended by the Transitional Act merely takes account of antecedent facts and circumstances - namely, the contraventions under the WR Act - as a basis for what it prescribes for the future (see e.g. Robertson v City of Nunawading [1973] VR 819 at 824; La Macchia v Minister for Primary Industry (1986) 72 ALR 23).

[14] It follows that there is no room for the presumption against retrospectivity to operate in relation to the amended s.510 and no basis for the contention that the section cannot apply to the contraventions committed by the permit holders.

[15] It was also submitted by the permit holders that there was no application properly before FWA to exercise the powers under s.510 and therefore no jurisdiction to make any orders under that section. It was said that other sections within Division 5 of Part 3-4 of the FW Act provide a mechanism by which the exercise of the powers to take action against permit holders are invoked, e.g. on the initiative of FWA and/or on application by an inspector or other person (see ss.505(3), 507(1) and 508(3)). Reference was also made to the position under s.744 of the WR Act which required an application to be made by a workplace inspector or a prescribed person. It was said that there is no such mechanism in s.510 of the FW Act and there is no general power in FWA to initiate proceedings such as was given under s.91 of the WR Act.

[16] Although s.510 does not contain a specific mechanism for invoking the exercise of the powers contained in the provision, this does not mean that the powers cannot be exercised. Section 510 may be distinguished from the other powers given to FWA under Division 5 of Part 3-4 of the FW Act, in that the section provides that FWA must revoke or suspend an entry permit where it is satisfied that any of the matters specified in s.510 (1)(a)-(f) have occurred. The use of the word “must” denotes the mandatory nature of the provision. This is to be contrasted with ss.505, 507 and 508 which give FWA a discretion to deal with disputes or to take certain action against permit holders. The discretionary powers under those sections are, as provided in the legislation, to be exercised upon FWA’s own initiative (ss.505 and 508) or upon application (ss.505, 507 and 508).

[17] In the absence of a specified mechanism for the activation of the powers in s.510, it would seem appropriate that the power to exercise the obligations in the section be implied. As a general concept it would serve no purpose for the legislature to insert a provision in legislation with the deliberate intent that it could not be put into operation. This is especially so when considering a provision such as s.510 in the context of Division 5 of Part 3-4. Section 510 deals with a range of more serious matters relating to the exercise of entry rights and which the FW Act provides should lead to the revocation or suspension of entry permits. The fact that s.510 does not specifically include a mechanism for the exercise of the power contained within it, does not preclude FWA from exercising the power in a manner as stipulated in other provisions in Part 3-4. This construction of s.510 is also supported by reference to the Acts Interpretation Act 1901, and in particular ss.15AA and s.33(1). Section 15AA provides as follows:

Subsection 33(1) of the Acts Interpretation Act 1901 is in the following terms:

[18] Given the nature of s.510 within the scheme of Part 3-4 of the FW Act, it would follow that where FWA becomes aware, whether by application or otherwise, that a matter as specified in the section has occurred, it must perform its functions as required under the section. The functions must be performed and the powers exercised in a manner consistent with the general requirements of the FW Act as set out in ss.577 and 578. These include the requirements for FWA in exercising the powers under s.510 to act in a manner which is “fair and just” and “open and transparent” and which takes into account the objects of the Act and Part 3-4 as well as “equity, good conscience and the merits of the matter.” There is also an overriding requirement that in performing such functions as those in s.510 that the principles of procedural fairness be observed.

[19] The present matters were referred to me through the panel arrangements and by direction of the President. The President is responsible for the overall performance of FWA’s functions. Under s.581 of the FW Act the President is responsible for ensuring that FWA performs its functions and exercises its powers in a manner that is efficient and adequately serves the needs of employers and employees. The President may give directions to FWA Members about how particular functions are to be performed and powers are to be exercised (see s.582).

[20] In these circumstances, there is power and indeed an obligation to proceed with the consideration of the matters under s.510 of the FW Act as amended by the Transitional Act arising from the penalties imposed on the permit holders by the Court in Darlaston v Parker (No. 2).

Whether the entry permits should be revoked or suspended

[21] Section 510 requires that FWA revoke or suspend an entry permit if a pecuniary penalty has been imposed in relation to a relevant contravention by the permit holder. An exception is provided in s.510(2) where FWA is satisfied that the suspension or revocation would be harsh or unreasonable in the circumstances.

[22] It was not contested in the proceedings that the orders of the Federal Court provided an appropriate basis for the operation of s.510. The main submissions and evidence were directed to the exercise of the discretion under s.510(2). It was submitted by Counsel for the permit holders that for the discretion to be exercised, FWA must be satisfied that suspension or revocation would be “harsh or unreasonable in the circumstances.” It was said that these words are to be given their ordinary meaning and are to be applied having regard to the objects of Part 3-4 of the Act. Reference was also made to the oft quoted passage in the joint judgement of McHugh and Gummow JJ in Byrne and Frew v Australian Airlines Limited (1995) 185 CLR 410 where it is stated that a termination of employment “may be harsh in its consequences for the personal and economic situation of the employee or because it is disproportionate to the gravity of the misconduct in respect of which the employer acted” (at 465).

[23] The evidence and material presented in the proceedings relate mainly to the implications of the loss of the entry permits by the four officials for the CFMEU and its members as well as for the individual permit holders and to the actions taken by the CFMEU to ensure that its officials received appropriate training and advice regarding rights of entry.

[24] Some of the main aspects of the evidence presented in the statements of Mr Peter McClelland, CFMEU State President, and Ms Rita Mallia, Legal Officer with the CFMEU, may be summarised as follows:

[25] It was also put that the interplay of both State and Federal law was complex and that this raised legitimate doubts about entry rights in some circumstances, including at the time that the four officials attended the Lend Lease site in December 2008. It was said that the facts of this matter were such that both what amounted to a reasonable request by an occupier under the FW Act and what the organisers perceived were their rights under the Occupational Health and Safety Act 2000 (NSW) were not easy to discern.

[26] Written statements were also provided by each of the permit holders, together with references attesting to their good character and effective representational work on behalf of building workers. The statements deal with the work of the officials, the importance of entry permits in the performance of that work and the personal difficulties and hardships which might result from the loss of the entry permits. I have had regard to all the submissions and evidence presented in reaching my conclusions.

[27] In considering whether, in relation to each of the permit holders, the suspension or revocation of their entry permits would be “harsh” or “unreasonable” in the circumstances, it is appropriate to have regard to the object of Part 3-4 of the FW Act. Part 3-4 establishes a framework for officials of unions to enter premises that balances the rights of unions, employees, occupiers of premises and employers (see s.480). The legislation seeks to do this by conferring rights of entry on union officials to enter premises and exercise various powers and by prohibiting certain conduct by permit holders, providing remedies in the event of contraventions and allowing FWA to take action against permit holders who have misused their entry rights. It is in this context of the balancing of rights and obligations that both the direction under s.510(1) and the exception provided under s.510(2) must be understood.

[28] It is also appropriate to take into account the impact that the revocation or suspension of the entry permits might have on the operations of the CFMEU and the representation services provided to building and construction workers. There is no doubt that union organisers who do not have entry permits will be less capable of performing their functions. There is also a possibility that this might lead the CFMEU to requiring the organisers to take unpaid leave, with consequent personal difficulties or hardship for them. It is also relevant that the CFMEU has taken steps to ensure that all its organisers receive training in relation to the right of entry provisions in relevant legislation and will comply with such legislation. These and other considerations may be taken into account in arriving at a conclusion as to whether, in relation to each of the permit holders, the suspension or revocation would be harsh or unreasonable in the circumstances.

[29] However the weight to be given to such considerations is a matter of judgement for FWA. In the context of the mandatory requirement upon FWA under s.510 to revoke or suspend entry permits where a penalty has been imposed for the contravention of entry rights, I do not accept that the above considerations, which might be applicable in many situations, are on their own sufficient as to satisfy the test under s.510(2) in regard to all the permit holders. However the considerations may be taken into account, along with others, in reaching a conclusion in relation to each of the permit holders.

[30] I now turn to consider the circumstances relating to each permit holder. Mr Parker was found to have contravened s.758(3) of the WR Act on two occasions by failing to undergo a safety induction and by failing to remove vehicles when requested. For these contraventions a total penalty of $5000 was imposed by the Court. Mr Parker was also found to have contravened s.767(1) by hindering and obstructing various parties. For this contravention a penalty of $3000 was ordered. The Court referred to the conduct of Mr Parker as a serious departure from the standards of behaviour expected of those who are clothed with statutory power to enter premises and as being “blatantly unacceptable” even in an industry which has been described as “robust.” Mr Parker is the Assistant Secretary of the CFMEU. In a statement made on 15 April 2011, Mr Parker explains that he spends much of his time on site in meetings, investigating safety issues and supporting the organisers under his supervision and that it is necessary for him to have a federal entry permit in order to do his work. Character references for Mr Parker were provided from an independent auditor, a member of State Parliament and a company director. Two delegates of the CFMEU also made statements regarding Mr Parker’s work within the union and for building workers.

[31] I have considered all the abovementioned matters in reaching a conclusion in relation to Mr Parker. Given the nature and gravity of the contraventions by Mr Parker and the penalties imposed, and taking into account the range of functions performed by him as Assistant Secretary and the somewhat uncertain possibility of him being required by the CFMEU to take leave, I am not satisfied that the suspension or revocation of his entry permits would be harsh or unreasonable in the circumstances.

[32] Mr Hanlon has been since September 2010 an Assistant Secretary of the CFMEU with responsibility for the north and south coast regional areas. He was found to have contravened s.758(3) of the WR Act by failing to undergo a safety induction and a penalty of $2500 was imposed by the Court. In a statement made on 15 April 2011, Mr Hanlon states that his work is principally done on site and explains the efforts and problems facing the union in representing its members and addressing occupational health and safety issues in regional areas. Character references and statements by union delegates were also provided which refer to Mr Hanlon’s commitment to his work and standing in the community.

[33] Having regard to the contravention committed by Mr Hanlon, his role and function within the CFMEU in regional areas and the training undertaken by him and other union officials in relation to entry rights, I am satisfied that it would be unreasonable in the circumstances to suspend or revoke his entry permit.

[34] Mr Kera has been an elected organiser with the CFMEU since 2003. He was found to have contravened s.758(3) of the WR Act by failing to undergo a safety induction and a penalty of $2500 was imposed by the Court. In his statement of 15 April 2011, Mr Kera refers to the union training undertaken on rights of entry, the need for him to have an entry permit to perform his work effectively and the possible effect of a suspension or revocation of the entry permit on his family. Character references and statements from union officials refer to Mr Kera’s commitment to his work and standing in the community.

[35] Having regard to the nature of the contravention by Mr Kera, the training undertaken and the possible consequences of the suspension of his entry permit, I am satisfied that it would be unreasonable in the circumstances to suspend or revoke his entry permit.

[36] Mr Mitchell has worked as an organiser with the CFMEU since 1998 and is currently an elected organiser. He was previously employed in the construction industry as a builders’ labourer and was highly experienced in the area of scaffolding. He was found to have contravened s.758(3) of the WR Act on 3 December 2008 by failing to come down from scaffolding when requested and was fined $3000 for the contravention. He was also found to have contravened s.767(1) of the WR Act by acting “in an improper manner” on 4 December 2008 by deliberately driving a vehicle into a gate with some force when a person was clearly visible behind it and was fined $4500. The Court considered that this penalty was warranted because of the “potential seriousness of the conduct involved.”

[37] In a statement Mr Mitchell says that he spends almost all of his work time on site addressing issues raised by building workers and that a large part of that time is spent investigating occupational health and safety matters. He principally works in the northern beaches area of Sydney where it is said that builders and subcontractors are less attentive to safety. Mr Mitchell said that he is concerned about how he might be utilised by the CFMEU in the event his entry permit is suspended as he spends almost all of his time on sites dealing with issues on behalf of building workers. He also referred to the hardship to his family if he was required by the union to take leave for the period of any suspension. Character references and statements by union delegates and members refer to Mr Mitchell’s commitment to his work and concern for safety issues and his personal qualities.

[38] I have considered all of the abovementioned matters in reaching a conclusion relating to Mr Mitchell. Having regard to the nature of the contraventions, the areas of Mr Mitchell’s responsibilities within the CFMEU and what I consider to be the somewhat uncertain possibility of his union requiring him to take unpaid leave, I am not satisfied that it would be harsh or unreasonable in the circumstances to suspend or revoke his entry permit.

Revocation or suspension of entry permits

[39] Under s.510(1) of the FW Act, where one of the matters specified in paragraphs (a)-(f) of that subsection has been found to have occurred and where the exception in s.510(2) does not apply, FWA is required to revoke or suspend each entry permit held by the permit holder. FWA has a discretion in such circumstances as to whether the appropriate action is suspension or revocation of the entry permit.

[40] In considering this issue, I have again considered the various factors and circumstances referred to earlier in this decision. In particular, I am mindful of the submissions regarding the complexities and uncertainty that may have existed in relation to entry rights as a result of the interaction of federal laws and the NSW occupational health and safety legislation and the efforts of the CFMEU to ensure that its officials are properly trained and advised regarding the observance of entry rights. I am also mindful that there have been no submissions or representations in the proceedings before me from employers or others in the building and construction industry regarding the permit holders and that Messrs Parker and Mitchell have already had substantial penalties imposed upon them by the Court in relation to the contraventions.

[41] In all the circumstances I have decided that the entry permits of Messrs Parker and Mitchell should be suspended. Subsection 510(4) deals with the minimum period of suspension, being at least three months in a matter where previous action has not been taken against the permit holder under s.510(1). For similar reasons as given above, I consider that the appropriate period of suspension in each case is three months.

[42] Accordingly, orders will be issued suspending the entry permits of Messrs Parker and Mitchell and, in accordance with s.510(5) and (6), banning the issue of any further entry permits for the suspension period.

SENIOR DEPUTY PRESIDENT

Appearances:

J. Pearce of counsel, with L. Riches and R. Mallia for the Construction, Forestry, Mining and Energy Union.

Hearing details:

2011.

Sydney.

March 29 and April 19.



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