DECISION

Fair Work Act 2009
s.510 - Upon referral, revoke or suspend an entry permit

Director of the Fair Work Building Industry Inspectorate
v
Mr Troy Smart
(RE2015/361)

Application by the Director of the Fair Work Building Industry Inspectorate - suspension of an entry permit - ban on the issue of further entry permits - Fair Work Act 2009 ss.500, 507, 510.

Introduction

[1] This decision concerns an application by the Director of the Fair Work Building Industry Inspectorate trading as Fair Work Building and Construction (FWBC) pursuant to s.510(1)(d) and/or s.507 of the Fair Work Act 2009 (the Act). The application is that the entry permit of Mr Troy Smart, an official of the Construction, Forestry, Mining and Energy Union (CFMEU) be suspended for a period of three months and pursuant to s.510(5) of the Act that the Commission ban the issue of any further entry permits to Mr Smart for a period of three months.

[2] At the hearing of the matter, Mr M Kelleher and Mr C Fahey of counsel appeared for FWBC, and Mr K Sneddon, lawyer employed by the CFMEU, appeared for Mr Smart and the CFMEU. I granted permission to counsel to appear because I considered that representation would enable the matter to be dealt with more efficiently taking into account the nature and complexity of the matter.

[3] The matter relates to a decision of White J of the Federal Court 1 in which his Honour made an order that Mr Smart pay a pecuniary penalty arising from a contravention of s.500 of the Act. The application seeks to invoke s.510 of the Act which relevantly provides:

“510 When the FWC must revoke or suspend entry permits

When the FWC must revoke or suspend entry permits

(1) The FWC must, under this subsection, revoke or suspend each entry permit held by a permit holder if it is satisfied that any of the following has happened since the first of those permits was issued:

....

(d) the permit holder, or another person, was ordered to pay a pecuniary penalty under this Act in relation to a contravention of this Part by the permit holder;

...

(2) Despite subsection (1), the FWC is not required to suspend or revoke an entry permit under paragraph (1)(d) or (f) if the FWC is satisfied that the suspension or revocation would be harsh or unreasonable in the circumstances.

(3) Subsection (1) does not apply in relation to a circumstance referred to in a paragraph of that subsection if the FWC took the circumstance into account when taking action under that subsection on a previous occasion.

Minimum suspension period

(4) A suspension under subsection (1) must be for a period that is at least as long as the period (the minimum suspension period) specified in whichever of the following paragraphs applies:

(a) if the FWC has not previously taken action under subsection (1) against the permit holder—3 months;

(b) if the FWC has taken action under subsection (1) against the permit holder on only one occasion—12 months;

(c) if the FWC has taken action under subsection (1) against the permit holder on more than one occasion—5 years.

Banning issue of future entry permits

(5) If the FWC takes action under subsection (1), it must also ban the issue of any further entry permit to the permit holder for a specified period (the ban period).

(6) The ban period must:

(a) begin when the action is taken under subsection (1); and

(b) be no shorter than the minimum suspension period.”

Is there a valid application?

[4] While not contesting the jurisdiction of the Commission to suspend the right of entry permit of Mr Smart, Mr Sneddon submitted that the Director lacked standing to make the application. The argument was advanced on the basis that there is no specific provision regarding applications under s.510 and no express power, as exists in s.507, for the Director to make an application.

[5] The Federal Court has recently observed that the various provisions of Chapter 3 of the Act regarding revocation of right of entry permits complement each other rather than impose limitations. 2 Further, I note that the Acts Interpretation Act 1901 provides:

“Exercise of powers and performance of functions or duties

Powers, functions and duties may be exercised or must be performed as the occasion requires

             (1)  Where an Act confers a power or function or imposes a duty, then the power may be exercised and the function or duty must be performed from time to time as occasion requires.

....”

[6] In a decision concerning s.510 Boulton J observed 3:

“[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.”

[7] Section 585 of the Act provides that an application to the FWC must be in accordance with the procedural rules (if any) relating to applications of that kind. There is no provision in the rules for applications under Part 3-4. The rules provide that a general form may be used if no specific form is prescribed.

[8] In my view the terms of s.510 permit an application being made by a person with a relevant interest. I indicated at the hearing of the matter that I considered that the application by the Director of the FWBC was valid and in any event I would grant the Director leave to intervene in the matter if necessary as he clearly has an interest in the proceedings. The Director was the applicant in the Federal Court proceedings giving rise to this application.

[9] As I have noted, it was conceded by Mr Smart that the Commission has jurisdiction to deal with the matter. It was also conceded that the circumstances in s.510(1)(d) existed by virtue of the decision of White J. It was accepted that the question for determination is whether the suspension required by s.510(1) should not occur because the suspension would be harsh or unreasonable in the circumstances. I turn to consider that question.

Is Suspension Harsh or Unreasonable in the Circumstances?

[10] Mr Smart and the CFMEU contend that the nature of the contravention as well as personal circumstances of Mr Smart and the CFMEU should lead to the conclusion that a three month suspension is harsh and unreasonable in the circumstances. Mr Smart has been an organiser with the CFMEU for over seven years. He says that he would commonly average five safety right of entries and ten other right of entries each week. He says that he has a good understanding of right of entry obligations and has undertaken right of entry training on three occasions, including recently. It was submitted that the harsh consequences of suspension will impact Mr Smart, the CFMEU and its members.

[11] As to the circumstances of the contravention it is submitted that the contravention was a one-off, he was not the instigator, the contravention occurred only for a matter of minutes and was very much at the lower end of the scale of contraventions.

[12] The Director contends that there is no suggestion of any economic or personal hardship if the permit is suspended. Evidence was produced that established that a total of 16 other officials of the WA branch hold right of entry permits, although not all hold organiser positions. While accepting that the role of Mr Smart giving rise to the contravention was a passive one, the Director nevertheless submits that the contravention arose from a breach of fundamental and straightforward right of entry obligations.

[13] White J summarised the circumstances of the relevant contravention as follows:

“The first set of contraventions: 31 March 2014: Action SAD 138 of 2014

13. At relevant times in early 2014, Kennett Pty Ltd (Kennett) was the head contractor on a construction project taking place at 336 Kensington Road, Leabrook, and was the occupier of those premises (the Leabrook Site).

14. On 31 March 2014, the first and second respondents in Action SAD 138 of 2014, Mr Stephenson and Mr Smart, went to the Leabrook Site. They intended entering the premises for the purpose contemplated by s 484 of the FW Act, namely, holding discussions with employees working there whose industrial interests the CFMEU is entitled to represent.

15. Mr Stephenson and Mr Smart met Kennett’s Site Manager, Mr Agresta, and a conversation to the following effect ensued:

Stephenson: We [referring to himself and Mr Smart] want to enter the site to have a look around and chat to the guys.

Agresta: I am sorry, but as I have not received a 24 hour notice of entry form, I cannot allow you on site.

It is an agreed fact that Mr Smart did not pay close attention to this conversation but was within earshot of Mr Stephenson when Mr Agresta gave this response.

16. Mr Agresta called Kennett’s Operations Manager, Mr Allen, on his mobile phone. Mr Stephenson then requested, and was given, Mr Allen’s mobile phone number by Mr Agresta and he telephoned Mr Allen. During the course of their conversation Mr Stephenson said words to the effect:

We [referring to himself and Mr Smart] are here with Michael [Agresta], and we want to get onto site and he asked us to give you a call.

and:

We just want to go onto site.

Mr Allen responded with words to the following effect:

Michael has already explained to you that you haven’t got the notice of entry so why are you still trying to do so?

Look Luke, I have no problems with your visit, if you have your right of entry notice, then I have no dramas.

and:

You are not to go on site, give me the notice and all will be good.

17. After that conversation concluded, a conversation to the following effect occurred:

Stephenson: Regardless of Kennett’s stance, we’re going on site anyway, and if you like you can just walk us through.

Agresta: I won’t walk you through and if you enter the site you will be breaching the current laws and procedures in place.

It is an agreed fact that Mr Smart was within earshot of this conversation.

1. Mr Stephenson and Mr Smart then entered the Site and held discussions with employees who the CMFEU was entitled to represent, of a kind contemplated by s 484 of the FW Act. They remained on the Site for approximately eight minutes. They then walked around the perimeter of the Site and held discussions with employees through the Site fence, and as employees were entering the Site. This included discussions in the carpark of the Leabrook Site but it is an agreed fact that Mr Stephenson and Mr Smart did not realise at the time that the carpark formed part of the Site.

1. Each of Mr Stephenson and Mr Smart admit that, by reason of the conduct just summarised, they acted in an improper manner when exercising or seeking to exercise their rights as a permit holder. Mr Stephenson acted in an improper manner by entering the Leabrook Site despite Mr Agresta telling him that he was not permitted to do so, despite Mr Allen instructing him not to enter the Site but if he provided an entry notice he would be permitted, and despite Mr Agresta warning him that if he did enter the Site he would be in breach of “the current laws and procedures in place”. In addition, Mr Stephenson contravened s 500 by not providing any entry notice at all to Kennett, let alone a notice conforming with s 487 of the FW Act.

1. Mr Smart’s contravention arises from his entering the Site despite Mr Agresta telling him that that was not permitted and because of his failure to provide an entry notice to Kennett as required by s 487 of the FW Act.

1. The CFMEU admits that, by reason of the same matters, and by reason of s 793, it also contravened s 500 of the FW Act by each of the contraventions admitted by Mr Stephenson and Mr Smart.

1. The Director did not claim that Kennett suffered any quantifiable economic loss or damage as a result of the respondents’ contraventions. The Director noted, however, that Mr Agresta and Mr Allen were taken away from duties which they would otherwise have been performing and that employees working on the Site were distracted from their work while Mr Stephenson and Mr Smart undertook the unauthorised discussions with them.”

[14] In relation to penalties White J said:

“Penalties in Action SAD 138 of 2014: the Leabrook Site

1. The conduct of Mr Stephenson and Mr Smart on 31 March 2014 indicates an indifference by them to the restrictions on the exercise of their rights of entry. Their attitude indicated a determination to enter the Site in defiance of the lawful directions of Mr Agresta and Mr Allen that they were not to do so.

1. However, I accept that Mr Stephenson and Smart were on the Leabrook Site for a period of only about eight minutes and there is no suggestion of them hindering or obstructing operations while they were on the Site. I accept that they wished to enter the Leabrook Site for the purpose recognised by s 484 of the FW Act, namely, to hold discussions with employees where industrial interests the CFMEU is entitled to represent.

1. It is apparent that the penalties imposed in the past have not caused the CFMEU and its officials to comply with the requirements of the FW Act and cognate legislation.

1. Mr Stephenson was employed as an organiser by the CFMEU. He had also contravened s 500 of the FW Act on 20 March 2014, only 11 days beforehand. The circumstances of that contravention are described in DFWBI v Cartledge. Mansfield J imposed a penalty of $600.00 in respect of that contravention by Mr Stephenson. He has since resigned from employment with the CFMEU so personal deterrence may not be so important in his case.

1. Mr Smart is employed by the CFMEU as an organiser in Western Australia. In late March 2014, he came to South Australia to assist the South Australian Branch of the CFMEU. The 31 March 2014 was his first day at work in this State. The agreed facts indicate that his role was more passive than that of Mr Stephenson and to that extent less culpable. There is no suggestion in his case that he had contravened s 500 on a previous occasion.

1. In my opinion, a penalty of $1,700.00 is appropriate in the case of Mr Stephenson and a penalty of $1,000.00 in the case of Mr Smart. A higher penalty is appropriate in the case of Mr Stephenson having regard to his previous contravention and to his greater culpability in the contraventions on 31 March.

1. In the case of the CFMEU, I consider it appropriate to fix a single penalty in respect of its contraventions constituted by the conduct of Mr Stephenson and Mr Smart. In fixing that penalty, the previous record of the CFMEU indicates, as I have said, that deterrence must be a very prominent consideration. I also note that it has not made any expression of contrition although, subject to what I have said earlier, it is entitled to some credit in respect of the retraining which it has arranged for its officials and its cooperation in relation to these proceedings. I fix a single penalty of $25,000.00 in the case of the CFMEU in respect of its contraventions constituted by the conduct of Mr Stephenson and Mr Smart on 31 March 2014.”

[15] The above extract makes clear that Mr Stephenson had carriage of the discussions with the employer and that Mr Smart was accompanying him. Mr Smart nevertheless was in earshot of the conversations which included a clear refusal of permission to enter the site, a clear warning that entry is contrary to law and a clear statement by Mr Stevenson that he and Mr Smart would be going onto the site anyway. The contravention was clear, defiant, and with clear knowledge that the law would be broken by entering the premises.

[16] As to the personal and organisational consequences of suspension I am not satisfied that they are significant in either case. Mr Smart’s job and income are unlikely to be affected. There may be an impact on the ability of the union to service its members. However this is the ordinary and inevitable effect of the application of s.510.

[17] In my view s.510 establishes consequential effects, amongst other things, of a permit holder being ordered to pay a pecuniary penalty under the Act. Mr Smart and the CFMEU have not established that suspension of Mr Smart’s right of entry permit for a period of three months, as the notionally prescribed consequence of the Federal Court order, would be harsh or unreasonable. I therefore find that the exception in s.510(2) does not apply.

[18] The order I make in conjunction with this decision will be for suspension of Mr Smart’s permit for three months from 3 June 2015 and a ban on the issue of a further entry permit for the same period.

VICE PRESIDENT

Appearances:

Mr M Kelleher and Mr C Fahey of counsel for Director of FWBC.

Mr K Sneddon for CFMEU and Mr Smart.

Hearing details:

2015.

Perth.

28 May.

Final written submissions:

CFMEU and Mr Smart on 8 May 2015.

Director of FWBC in reply on 22 May 2015.

 1   Director of the Fair Work Building Industry Inspectorate v Stephenson and others [2014] FCA 1432

 2   Asmar v Fair Work Commission [2015] FCA 16 (29 January 2015)

 3   [2011] FWA 2577

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