[2017] FWC 5086
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009
s.510 - Revocation or suspension of an entry permit

Mr Muhammed Kalem
(RE2016/588)

DEPUTY PRESIDENT GOSTENCNIK

MELBOURNE, 18 OCTOBER 2017

ss. 510(1), (2), (4), (5) and (6); penalty imposed on Mr Kalem and CFMEU for a contravention of s.500 of the Act; whether to suspend or revoke entry permit; whether suspension in the circumstances harsh or unreasonable; permit suspended for 3 months; ban period for 3 months.

[1] Mr Muhammed Kalem (Mr Kalem) is an official of the Construction, Forestry, Mining and Energy Union (CFMEU) and is employed by it as an organiser. Mr Kalem is the holder of a right of entry permit issued pursuant to s.512 of the Fair Work Act 2009 (the Act) (the Permit). The Permit was issued to Mr Kalem on 14 April 2016 and will, absent other intervening events, expire on 14 April 2019.

[2] In Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union 1 (Penalty Decision), White J declared, inter alia, that:

[3] His Honour relevantly ordered that, Mr Kalem pay a pecuniary penalty of $1,500.00 in respect of the s.500 contravention the subject of the declaration to which reference is made above. The CFMEU was ordered to pay a pecuniary penalty of $25,000.00 in respect of the s.500 contravention.

[4] On 2 May 2016, the Fair Work Commission initiated consideration of whether the Permit held by Mr Kalem should be revoked or suspended pursuant to s.510 of the Act. On 5 May 2016, I listed the matter for a directions hearing and I also invited the Director of the Fair Work Building Industry Inspectorate (as the office was then known) to attend as an interested party. On 10 May 2016, the Director advised me that an appeal had been lodged by the CFMEU against the decision of White J and that it had no objection to an adjournment being granted pending the determination of the appeal. On 17 May 2016, the CFMEU requested that the directions hearing be vacated pending the outcome of the appeal and on the same day, I granted the adjournment.

[5] On 6 February 2017, the CFMEU advised me that the appeal had been listed for hearing on 2 and 3 March 2017. On 26 May 2017, the CFMEU indicated that a Full Court of the Federal Court had determined not to grant leave to appeal. 4 As such, I issued Directions on 7 June 2017 and listed the matter for hearing on 31 August 2017. Due to varying commitments of the parties involved, I did not hear the matter until 18 September 2017. The Australian Building and Construction Commissioner (the Commissioner) was represented at the hearing.

Consideration

Relevant statutory provisions

[6] As I have earlier observed, the Federal Court imposed a penalty on Mr Kalem and on the CFMEU because Mr Kalem contravened s.500 of the Act. That section provides:

500 Permit holder must not hinder or obstruct

Note 1: This section is a civil remedy provision (see Part 4-1).

[7] Section 500 of the Act, along with s.510 of the Act, are part of a right of entry scheme established by Part 3 – 4 of the Act. Section 510 of the Act relevantly provides the following:

When the FWC must revoke or suspend entry permits

Minimum suspension period

Banning issue of future entry permits

[8] The object of Part 3 – 4 of the Act is to be found in s.480 of the Act and provides:

[9] In Maritime Union of Australia v Fair Work Commission 5 a Full Court of the Federal Court made the following observations about Part 3 – 4 of the Act:

[10] As I observed in another matter, 7 to this I would add, it is also not surprising that the legislature has determined (subject to limited exceptions) to compel the removal of such powers from a person who has contravened any of the prohibitions found in Division 4 of Part 3 – 4 of the Act, and has had a pecuniary penalty imposed on that person or another person by reason on the contravention.

Mr Kalem’s contravening conduct

[11] In Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union 8 (Liability Decision) White J set out the contravening conduct in which Mr Kalem had engaged on 30 October 2013 as follows:

“Flinders University site: 30 October 2013 – findings as to the conduct

[12] Only some of the conduct described above relates to the s.500 contravention.

[13] In considering the pecuniary penalty that should be imposed on Mr Kalem for his contravention of s.500 of the Act, and in fixing $1,500.00 as the appropriate amount for the penalty, his Honour said the following:

“Mr Kalem (Third Respondent)

[14] The gravity of Mr Kalem’s contravening conduct, so far as it is relevant for the purposes of fixing a penalty, is reflected in the observations of his Honour and in the size of the penalty imposed on Mr Kalem relative to those imposed on other officials also found to have contravened s.500 of the Act during their entry to the Flinders University Site 11 and relative to the maximum penalty that may be imposed for the contravention.

Exercise of power under s.510

[15] The starting point is to understand that the happening of an event identified in ss. 510(1)(a) to (f) of the Act since the date on which a relevant entry permit was issued to a permit holder, results in a suspension or revocation of the relevant permit or permits, except in the limited circumstances described in ss. 510(2) or (3). The evident purpose of the provision is thus to ensure that, generally, the licence to enter premises conferred by an entry permit will be suspended or revoked if the conduct of the permit holder results in the happening of one or more of the enumerated events. For present purposes, the relevant exception to that general consequence is satisfaction by the Commission that the suspension or revocation would be harsh or unreasonable in the circumstances.

[16] The decision in Parker and others 12 (Parker) provides some guidance as to the exercise of the power under s.510 of the Act. In particular, Parker provides guidance as to some of the circumstances to take into account in the exercise of the discretion to not suspend or revoke a right of entry permit because the consequence of doing so would be harsh or unreasonable.

[17] In Parker, Boulton J had regarded the following matters as relevant:

[18] Whilst this is not an exhaustive list, I accept that these matters are relevant to the exercise of power under s.510 of the Act. Neither the Commissioner nor the CFMEU submitted otherwise, although the Commissioner contended that additional relevant matters include, whether the permit holder has demonstrated genuine remorse for the contravening conduct and other relevant findings of misconduct against the permit holder. 14 I will return to these matters later in these reasons.

[19] It is accepted that the power of the Commission under ss. 510(1) and 510(2) is to be informed, not by the need to punish a permit holder, but rather by the need to establish or maintain a balancing of rights and obligations between employees, registered organisations, occupiers of premises and employers. The power in s.510 is protective and corrective, not penal. It is not directed to punishing a permit holder, his or her organisation or ultimately the workers whose interests the permit holder might represent.

Would it be harsh or unreasonable in the circumstances to revoke or suspend the Permit?

[20] For Mr Kalem and the CFMEU, it was contended that the following circumstances are relevant to the question of unreasonableness. 15 First, the matters relevant to the proceedings happened almost four years ago.16 Secondly, Mr Kalem was, and has been, of good behaviour for a considerable period of time before and after the contravention.17 Thirdly, Mr Kalem is contrite about what he did, that he has explained how he became involved in the contraventions and that he has promised that he will not engage in contravening conduct again.18 It was contended that although, when viewed individually, these factors may not be indicative of unreasonableness, together they strongly suggest that taking further action against Mr Kalem would be unreasonable.19

[21] I consider that a revocation or suspension of Mr Kalem’s entry permit would be unreasonable in the circumstances if a suspension or revocation was not guided by reason or sound judgment or if it was irrational. Such action might also be unreasonable if a suspension or revocation was not in accordance with practical realities of the circumstances, or was not appropriate in the circumstances, or was excessive, immoderate, or exorbitant in the circumstances.

[22] Without rehearsing the evidence given by Mr Kalem, I accept that he is now contrite and that he is unlikely to engage in contravening conduct again, although I note that he did not admit his contravening conduct in the relevant proceedings, 20 and that the contrition he expressed before me was not evident in the relevant proceedings before Justice White. As his Honour observed:

[23] I accept that some time has passed since the contravening conduct and that during this time Mr Kalem appears not to have engaged in any relevant contravening conduct. I am prepared to accept that these are all matters going to the circumstances and that they weigh in favour of a conclusion that revocation or suspension would be unreasonable in the circumstances.

[24] I also regard as a relevant circumstance that the contravention occurred only a few months after Mr Kalem had commenced employment with the CFMEU and consequently his inexperience or naivety is likely to have contributed to his conduct. I have also taken into account the character evidence given in statements that form part of the evidence before me. 22 These matters have weighed in Mr Kalem’s favour in my assessment as to the genuineness of his contrition and the likelihood of Mr Kalem engaging in any further contravening conduct.

[25] Against all this weigh other factors. First, although Mr Kalem has undertaken further training, the extent to which that training has had a material positive impact on his understanding of his wrongdoing or on his rights and obligations as a permit holder, judging by some of the answers he gave during cross-examination, is to be doubted. 23 This is a circumstance that I do not weigh in favour of the permit holder.

[26] Secondly, there is the nature and gravity of the contravening conduct. Viewed in isolation, the s.500 contravening conduct in which Mr Kalem engaged, although an unlawful interference with another’s proprietary right and right to engage in a business activity unimpeded by the conduct, was not particularly egregious. However, as the Commissioner points out, in assessing the gravity of Kalem’s conduct, it is relevant that the conduct in which Mr Kalem engaged occurred with other CFMEU officials at the Flinders University Site and was part of a multi-site campaign by the CFMEU, involving four separate sites with conduct of a similar kind with close temporal proximity. As Justice White observed:

[27] Thirdly, and also relevant to the nature and gravity of Mr Kalem’s conduct is the impact of the contraventions. White J referred to the CFMEU’s campaign at several sites, including Mr Kalem’s conduct at the Flinders University Site as follows:

[28] Viewed in this way, the nature and gravity of the conduct was serious contravening conduct and weighs strongly against a conclusion that the default position of suspension or revocation should be departed from on the ground that such an outcome would be unreasonable or harsh in the circumstances. This would also be consistent with the objects of Part 3 – 4 of the Act to which effect in part is given by s.510(1).

[29] Mr Kalem and the CFMEU also contended that Mr Kalem’s personal circumstances and the fact that a lengthy period of suspension may see him lose his job suggest that suspension or revocation would be harsh. I am not persuaded on the evidence that there is any real prospect of Mr Kalem losing his job as an organiser in the event that the entry permit currently issued to him was suspended or revoked, except perhaps in the case of a lengthy period of suspension or lengthy period of a ban on the issue of any further permit to Mr Kalem.

[30] Mr Kalem gave evidence that he held discussions with Ms Jane Calvert, the divisional Secretary of the division of the CFMEU in which he is employed. Mr Kalem’s evidence was that during those discussions, Ms Calvert told him that he may lose his job if his permit was suspended or revoked. 26 That a consequence of engaging in an unlawful activity whilst carrying out employment duties as an organiser, might be a suspension of entry rights and subsequent termination of employment, should not come as any particular surprise. However, if the CFMEU wish to seriously advance a proposition that the CFMEU will dismiss an organiser who loses his or her entry permit by suspension or revocation because they have engaged in particular unlawful conduct, then I would expect the relevant authorised official of the CFMEU to come to the Commission and give that evidence. Ms Calvert did not come to give that evidence and the extent to which it is likely that Ms Calvert would give effect to that which Mr Kalem says she told him, cannot be tested and Mr Kalem’s evidence in this regard is given no weight.

[31] Mr Kalem also gave evidence that he currently lives with his parents and that he is able to assist them financially with their expenses and that he is repaying a mortgage on a number property, presumably one in which he does not live. 27 He said that if he lost his job he would suffer financially as a consequence.28 I give this evidence no weight because it is contingent upon a premise that Mr Kalem lose his job in the event that his permit was suspended or revoked. For the reasons given above, that premise has not been made out. Mr Kalem’s evidence about the other possible consequences of a job loss29 is also given no weight for the same reason.

[32] A further matter that weighs against a conclusion that a suspension of revocation would be harsh in the circumstances is the fact that Mr Kalem did not pay the penalty imposed on him by the Court. The CFMEU paid the penalty. 30

[33] The inconvenience that will be caused to Mr Kalem and to the CFMEU in terms of his and its capacity to service and represent members in the event that the right of entry permit is suspended or revoked whilst relevant, is a matter that carries little weight in the circumstances, particularly those described by White J in the Penalty Decision relating to Mr Kalem’s conduct being part of “concerted action which involved deliberate entry onto Lend Lease building sites without providing a notice of entry.” 31 There seems to me to be a guaranteed method to ensure that permit holders and their organisations are not curtailed in their representation of members by the loss or suspension of entry permits – comply with the law.

[34] The Commissioner contended that in addition to Mr Kalem’s conduct contravening s.500 of the Act at Flinders University Site on 30 October 2013, a relevant matter in assessing whether it would be harsh or unreasonable to revoke or suspend Mr Kalem’s entry permit is the findings of Justice White in the Liability Decision as to Mr Kalem’s contraventions of s.348 of the Act. I do not accept that this is a matter I should take into account in this case for two reasons. First, I have already taken into account the conduct in assessing whether Mr Kalem is a fit and proper person to hold an entry permit and I concluded, notwithstanding the contravening conduct, taking into account the other permit qualification matters, that he was a fit and proper person to hold an entry permit. 32 The Director was invited to make submissions in that proceeding, but he did not. Secondly, the circumstances which enliven s.510(1) of the Act are all concerned with contravening conduct by a permit holder of right of entry laws. Taking into account a non-right of entry contravention in the circumstances, in assessing whether it would be harsh or unreasonable to suspend or revoke a right of entry permit bears the hallmarks of punitive action rather than protective. To be clear however, I am not suggesting that such considerations would never be relevant to an assessment under s.510(2) of the Act.

[35] For the reasons given above I do not consider that any of the matters to which Mr Kalem and the CFMEU have pointed lead to a conclusion that it would be harsh in the circumstances to suspend or revoke Mr Kalem’s entry permit. When I consider all of the relevant circumstances as a whole, I am not persuaded that the matters that I have identified as weighing in favour of a conclusion that it would be harsh or unreasonable in the circumstances to suspend the permit outweigh the matters identified which go the other way. I am therefore not persuaded that it would be unreasonable in the circumstances to suspend the entry permit for the minimum suspension period specified in s.510(4)(a) of the Act. I need not express a view as to whether it would be unreasonable in the circumstances to revoke the entry permit because I do not propose to do so.

Revocation or suspension of the Permit

[36] Clearly s.510(1) of the Act provides the Commission with the discretion to decide whether in a particular case revocation or suspension of an entry permit should occur. It seems to me that similar considerations to those, which arise on the question of whether suspension or revocation would be harsh or unreasonable in the circumstances, are appropriate considerations here. In addition, there is the consideration of the consequence of revocation compared with suspension. Revocation will require an organisation to later apply to the Commission for the issue of a permit and require satisfaction that the proposed permit holder is a fit and proper person to hold a permit. Suspension, on the other hand, will usually result in the permit holder being able to immediately exercise his rights pursuant to the permit once the suspension period has passed.

[37] I do not accept the Commissioner’s submission that in light of Mr Kalem’s contravening conduct and the circumstances in which Mr Kalem engaged in the conduct that a mere suspension would be inadequate. I consider for the reasons that follow that a suspension for a period of three months is appropriate.

[38] First, this will be the first occasion on which the Commission has taken action under s.510(1) against Mr Kalem. I accept that the presumptive minimum suspension period of three months should only be departed from with good reason and I am not persuaded that there is a case for a departure in this matter.

[39] Secondly, while the contravention by Mr Kalem on 30 October 2013 was serious, it was not of the most serious or grave kind. That this is the case is reflected in the penalty imposed by the Court, which was less than 15% of the maximum penalty available to the Court.

[40] Thirdly, Mr Kalem continuously held a federal right of entry permit from 2013, he has only once been found to have engaged in conduct in breach of his right of entry obligations and he has not engaged in any contravening conduct of which I am aware since the incident on 30 October 2013.

[41] Fourthly, Mr Kalem has undergone further right of entry training since the events of 30 October 2013, apart from the training administered by Ms Dooley.

[42] Fifthly, Mr Kalem has shown contrition for his conduct on 30 October 2013 and has made it clear that it is his intention not to engage in such conduct in the future. He has said this under oath.

[43] I therefore consider that the right of entry permit issued to Mr Kalem should be suspended for a period of three months and that there should be a period equal to the period of suspension during which there will be a ban on the issue of any further entry permit to Mr Kalem.

[44] An Order giving effect to this decision will be separately issued. Mr Kalem is reminded of his obligation under s.517(1)(a) of the Act to return the entry permit that is suspended to the Commission within 7 days from the date the permit is suspended.



DEPUTY PRESIDENT

Appearances:

For the Commissioner: Mr B Avallone instructed by the Australian Building and Construction Commission

For Mr Kalem and the CFEMU: Mr R Reitano

Hearing details:

Melbourne.

18 September.

2017.

 1   [2016] FCA 413 (Penalty Decision)

 2   Ibid

 3   Ibid

 4   [2017] FCAFC 77

 5   [2015] FCAFC 56

 6   Ibid at [13]-[16]

 7   Director of the Fair Work Building Industry Inspectorate v Perkovic [2015] FWC 4062

 8   [2016] FCA 1293 (Liability Decision)

 9   Ibid

 10   Penalty Decision

 11   The other two officials involved were ordered to pay pecuniary penalties amounting to $1,500.00 each

 12   [2011] FWA 2577

 13   Ibid at [26]-[28], [33] and [34]

 14   Australian Building and Construction Commissioner’s Outline of Submissions, dated 2 August 2017 at [26]

 15   Construction, Forestry, Mining and Energy Union’s Outline of Submissions, dated 12 July 2016 at [9]

 16   Ibid

 17   Ibid

 18   Ibid

 19   Ibid

 20   Penalty Decision at [126]

 21   Ibid at [99]

 22   Exhibit 3, Witness Statement of Mr. Giuseppe Schiavello, dated 17 July 2017 and Exhibit 4, Witness Statement of Mr. Adrian Byl, dated 11 July 2017

 23   Transcript dated 18 September 2017 at PN290 – PN300

 24   Penalty Decision at [71] and [73]

 25   Ibid at [101]-[103]

 26   Exhibit 1, Witness Statement of Mr. Muhammed Kalem, dated 12 July 2017 at [27]

 27   Ibid

 28   Ibid

 29   Ibid

 30   Transcript dated 18 September 2017 at PN175 – PN179

 31   Penalty Decision at [71]

 32   [2016] FWC 2252

Printed by authority of the Commonwealth Government Printer

<Price code C, PR596488>