Fair Work Act 2009
s.604 - Appeal of decisions

Australian Building and Construction Commissioner
v
Desmond Savage
Construction, Forestry, Maritime, Mining and Energy Union
(C2021/7781)

Appeal against decision [2021] FWC 6198 of Deputy President Gostencnik at Melbourne on 27 October 2021 in matter number RE2021/932

Introduction and background

[1] The Australian Building and Construction Commissioner (ABC Commissioner) has lodged an appeal, for which permission is required, against a decision of Deputy President Gostencnik issued on 27 October 2021. 1 The decision concerned whether the entry permit held by Mr Desmond Savage, an official of the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU), should be revoked or suspended pursuant to s 510 of the Fair Work Act 2009 (FW Act). Subsections (1) and (2) of s 510 relevantly provide:

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.

…

[2] Subsection (4) of s 510 prescribes the minimum period for a suspension under subsection (1), and subsections (5) and (6) provide that the issue of any further entry permit to the permit holder must be banned for a minimum prescribed period if action is taken under subsection (1).

[3] In a decision issued by the Federal Court (White J) on 13 August 2021, 2 the following declaration was made in respect of Mr Savage:

31. The Ninth Respondent (Mr Savage) contravened s 500 of the FW Act at the Site on 20 June 2019 while exercising rights in accordance with Pt 3-4 of the FW Act by acting in an improper manner by repeatedly swearing at, and speaking in an aggressive and bullying manner towards, a Watpac representative.

[4] The Court also declared that, by reason of Mr Savage’s conduct, the CFMMEU also contravened s 500 of the FW Act. The Court ordered that Mr Savage pay a pecuniary penalty of $4,500 and the CFMMEU $37,500 in respect of these contraventions.

[5] The effect of these orders was to engage s 510 in respect of Mr Savage, and consequently the Commission, as constituted by the Deputy President, commenced a proceeding on its own initiative to consider what action, if any, should be taken in respect of Mr Savage’s entry permit under s 510(1).

[6] On 26 August 2021, the ABC Commissioner gave notice pursuant to s 110(3) of the Building and Construction Industry (Improving Productivity) Act 2016 (BCIIP Act) that he wished to intervene in the matter and make submissions. Mr Savage and the CFMMEU filed written submissions and two statements of evidence in support of their case that the suspension or revocation of Mr Savage’s entry permit would be harsh and unreasonable in all the circumstances and, accordingly, that no action should be taken. The statements of evidence were made by Mr Savage and by Mr Brian Lacy AO, a former presidential member of the Australian Industrial Relations Commission who had provided training to Mr Savage about the rights and obligations of a permit holder under the FW Act and about strategies to ensure that Mr Savage did not again contravene s 500 of the FW Act. The ABC Commissioner filed written submissions in which he contended that the suspension or revocation of Mr Savage’s entry permit would not be harsh or unreasonable and that it should be suspended for a period of 4 to 5 months. The ABC Commissioner did not request the opportunity to cross-examine Mr Savage or Mr Lacy, and it was agreed that the Deputy President should determine the matter on the papers without an oral hearing.

[7] In his decision, the Deputy President concluded that he was satisfied that the suspension or revocation of Mr Savage’s entry permit would be unreasonable in all the circumstances and that consequently he was not required to, nor would he, take any action in respect of that entry permit under s 501(1). 3 In his appeal, the ABC Commissioner contends that the Deputy President erred in reaching this decision on the following grounds:

1. The Deputy President erred in applying the wrong test by effectively replacing, or unduly limiting, the consideration of whether it would be “harsh or unreasonable” to suspend or revoke an entry permit (pursuant to s.510(2) of the FW Act) only to circumstances where it would be “protective and corrective” to do so.

2. In the alternative, the Deputy President erred in failing to properly consider the “protective” function of s.510 of the FW Act, by only taking into account Mr Savage’s personal circumstances, when the Deputy President ought to have also taken into account broader considerations.

3. By reason of the errors in grounds 1 and/or 2, the Deputy President erred in:

(a) finding that it would be “unreasonable” to revoke or suspend the entry permit of Mr Savage;

(b) taking no action under s.510(1) of the FW Act.

The decision under appeal

[8] After dealing with a number of introductory matters in his decision, the Deputy President addressed the principles applicable to the right of entry scheme established by Pt 3-4 of the FW Act and, specifically, s 510. In relation to s 510, the Deputy President said:

“[9] As is evident from the terms of s 510 of the FW Act the occurrence of an event identified in ss 510(1)(a) to (f) since the date on which the first of any entry permits held by a permit holder was issued, results in a suspension or revocation of the relevant permit or permits, unless s 510(1) does not apply by reason of s 510(3) or the Commission exercises a discretion under s 510(2) not to suspend or revoke an entry permit because of the happening of an event in s 510(1)(d) or (f) once it is satisfied that the suspension or revocation would be harsh or unreasonable in the circumstances.

[10] The exercise of the Commission’s powers and functions 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. In deciding whether a suspension or revocation of an entry permit would be harsh or unreasonable; whether to revoke rather than suspend an entry permit; and the duration of any suspension and/or ban period, it will be relevant to have regard to the extent to which the Commission can have confidence that the permit holder would exercise her or his rights as a permit holder under the FW Act in a manner which achieves the necessary balance between the rights mentioned in s 480 of the FW Act.

[11] Other matters that are relevant in assessing whether suspension or revocation of an entry permit under s.510(1) would be harsh or unreasonable in the circumstances include the objects of Part 3-4; the nature and gravity of the underlying contravention of Part 3-4; the impact that the revocation or suspension of the entry permit/s might have on the organisation, its members and the permit holder; whether training has been undertaken by the entry permit holder since the events; and general character evidence. None of this is controversial. (footnotes omitted)

[9] The Deputy President then summarised the contentions advanced by Mr Savage as to why the suspension or revocation of his permit would be harsh and unreasonable and, in relation to those contentions, made the following findings:

(1) Neither the passage of time nor Mr Savage’s inexperience as an official at the time of the contravening conduct were matters which would weigh in favour of a finding that suspension or revocation of his permit would be harsh or unreasonable. 4

(2) Mr Savage’s contravening conduct was serious and this did not tend to favour a conclusion that revocation or suspension would be harsh or unreasonable. 5

(3) Based on his acceptance of the evidence of Mr Savage and Mr Lacy, the Deputy President found that Mr Savage was remorseful for his contravening conduct, fully accepted his responsibility for that conduct, and was committed to not engaging in any further contravening conduct and had given an assurance to that effect. The Deputy President concluded that, together with the fact that there had been no further instances of contravening conduct on the part of Mr Savage, these were “powerful matters” weighing in favour of a conclusion that suspension or revocation would be harsh and unreasonable in the circumstances. 6

(4) There was little probative evidence to support the conclusion that the suspension or revocation of Mr Savage’s entry permit would inconvenience or negatively impact the CFMMEU or its members and. therefore, this matter did not weigh in favour of a conclusion that suspension or revocation would be harsh or unreasonable. 7

[10] The Deputy President then said:

“[28] Section 510(2) provides that the Commission is not required to suspend or revoke an entry permit in the context of a triggering event of the kind at issue here if it is satisfied that revocation or suspension would be harsh or unreasonable in the circumstances. In this context and without setting out an exhaustive list, it seems to me that an assessment whether revocation or suspension would be harsh requires a consideration whether the action would be disproportionate to the gravity of the triggering event, or harsh in the sense of its impact on the circumstances of the permit, his or her organisation or members of that organisation. An assessment whether action taken would be unreasonable is more likely concerned with assessing whether the action is not reasonable or rational, or is excessive, immoderate or exorbitant in the circumstances. All this is to be considered in light of the objects of Part 3-4 of the FW Act and the protective and corrective purpose underpinning the exercise of power under s 510(1). The Commission’s function under s 510 (1) is not punitive, whether in respect of the permit holder or the organisation of which the permit holder is an official. The triggering event at issue here is the order that Mr Savage and the CFMMEU pay a pecuniary penalty in respect of Mr Savage’s contravention of s 500 of the FW Act. Thus, the Court has already imposed a punitive sanction. The function under s 510(1) consistent with the object of Part 3-4, is thus understood to be protective and corrective in nature.

[29] Taking account of the considerations discussed and noting that they do not weigh in the same direction, I am persuaded that the combination of matters related to Mr Savage’s subsequent conduct, his acceptance of wrongdoing and his contrition, the training undertaken and his desire and assurance to do better, which weigh in his favour outweigh matters going the other way. I am also satisfied the risk of Mr Savage engaging in contravening conduct as a permit holder again is very low and that both his contrition and his assurance to the Commission is genuine. I agree with the contentions of the CFMMEU and Mr Savage, that no protective and corrective purpose will, in the circumstances, be served by a suspension or revocation of his entry permit. In such circumstances this is quintessentially a case where suspension or revocation would not be reasonable or rational because of the absence of any protective and corrective purpose. Instead, a suspension or revocation of Mr Savage’s entry permit in the present circumstances would be punitive. I am therefore satisfied that suspension or revocation would be unreasonable in the circumstances.” (footnotes omitted)

[11] Consequently, the Deputy President concluded, no action would be taken in respect of Mr Savage’s entry permit under s 510(1). 8

The ABC Commissioner’s submissions

[12] The ABC Commissioner advanced two contentions of error, which aligned with his first two grounds of appeal respectively. The first contention of error was that the Deputy President applied the wrong test by effectively replacing, or unduly limiting, the consideration of whether it would be “harsh or unreasonable” to suspend or revoke an entry permit only to circumstances where it would be “protective and corrective” to do so. The ABC Commissioner accepted that an important object of s 510 is protective and corrective, but submitted that the Deputy President had effectively used that object as the test in substitution for the statutory test of “harsh or unreasonable”. Although, it was accepted, the Deputy President set out in paragraph [28] the various factors relevant to whether revocation or suspension would be unreasonable, it was submitted that he did not apply this test in his final assessment in paragraph [29]. Having regard to the object of the FW Act in s 3, the object of Pt 3-4 in s 480, and the functions of the Commission in ss 576, 577 and 578, it was submitted, there was no textual support for a test which confines the Commission to a protective and corrective function when making a decision under s 510(2).

[13] The ABC Commissioner’s second contention of error, which was advanced in the alternative, was that the Deputy President failed to consider the “protective” function of s 510 by only taking into account Mr Savage’s personal circumstances, when the Deputy President ought to have also taken into account broader considerations such as general deterrence. The ABC Commissioner submitted that in discharging a protective and corrective function, the Commission is required to look beyond the immediate circumstances of the contravenor/permit holder and engage in a broader assessment, including that of general deterrence, to ensure that other permit holders who might be tempted to engage in conduct like that of Mr Savage do not do so. It was submitted that the decision under appeal failed to consider any broader factors of this kind, since the “powerful matters” the Deputy President considered (at [26]) were limited to the circumstances of Mr Savage personally and did not take into account the wider protective function the Commission needs to serve to achieve a balancing of rights between unions and occupiers by promoting cooperative, harmonious, and productive workplaces – that is, deterrence and the promotion of public interest in compliance. The ABC Commissioner submitted that the Commission, properly discharging its function under s.510 of the FW Act, was required to take into account, in considering the protective object of that provision, the need to send a message of deterrence to all other permit holders that they cannot engage in the sort of abusive and bullying behaviour that Mr Savage engaged in and continue without interruption to enjoy their privileges as a permit holder.

[14] The ABC Commissioner submitted that permission to appeal should be granted because there is public interest in the matter beyond the litigants to ensure that s 510 is construed and applied correctly. In circumstances where a Full Bench has not previously considered the correctness of the proposition that the test in s 510(2) is a protective and corrective one, there is sufficient doubt to warrant reconsideration of this test. The ABC Commissioner accepted that some of his arguments underpinning the grounds of appeal were not expressly raised at first instance and, to the extent necessary, sought leave to argue them on appeal. It was submitted in this connection that the arguments involve questions of interpretation and law that could not have been dealt with through the tendering of any further evidence, there was no prejudice to Mr Savage in allowing these arguments to be made at the appellate level, and there would be real prejudice to the proper administration of justice if arguments as to the application of the law were prohibited from being made.

Consideration

[15] For the reasons which follow, we consider that permission to appeal should be refused.

[16] First, we do not consider that the appeal gives rise to any issue of general significance concerning the interpretation of s 510 or the principles relevant to its application. We have earlier set out in full paragraphs [9]-[11] of the Deputy President’s decision. The ABC Commissioner did not in his appeal submissions contest the correctness of the propositions stated in this part of the decision (on the premise, which we accept, that the second sentence of paragraph [10] is to be read as referring to the statutory object of s 510). The ABC Commissioner likewise took no issue with the propositions stated by the Deputy President in paragraph [28] of the decision, which we have also set out in full above. Paragraphs [9]-[11] and [28] of the decision constitute, we consider, a correct statement of the principles concerning the interpretation and application of s 510, and no different position is taken by the ABC Commissioner. It would therefore serve no purpose to grant permission to appeal in order to consider these matters further.

[17] Second, the ABC Commissioner’s first contention of error is without merit and has no reasonable prospects of success. There is no basis to read paragraph [29] of the decision (set out above) as involving any departure from the statutory test in s 510(2) of “harsh or unreasonable in the circumstances”. The Deputy President made an express finding that the suspension or revocation of Mr Savage’s entry permit would be unreasonable in the circumstances, and he gave his reasons for this conclusion based upon his weighing of the four considerations discussed at length in paragraphs [15]-[27] of the decision (about which no issue is taken by the ABC Commissioner) and his assessment that in light of these matters suspension or revocation would “not be reasonable or rational because of the absence of any protective and corrective purpose”. 9 It was an entirely orthodox approach for the Deputy President to undertake the evaluative judgment required by s 510(2) in a manner informed by the object of the provision - which the ABC Commissioner accepts is protective and corrective in nature. This patently did not involve any substitution of the statutory test established by the text of s 510(2).

[18] Third, the ABC Commissioner’s second contention of error is so directly contrary to the case it advanced at first instance that it would be entirely inappropriate to grant permission to appeal in respect of it. As the ABC Commissioner readily conceded, he advanced no submission at first instance that the Deputy President should take into account any need for general deterrence. Further, the ABC Commissioner made the following submission at first instance:

“The ABCC accepts that there are differences in the tasks being undertaken by the Court and the purpose behind imposing a penalty is to achieve deterrence, whereas the purpose behind suspending a permit is to protect. However, there is clear overlap in the considerations to be taken into account by both decision−makers: for example, the seriousness of the contravention, the impact of the orders, and whether training has been undertaken are all relevant factors. The fact that the two tasks are driven by different purposes is not a sufficient reason for the Court to treat a maximum as a ‘yardstick’ and the Commission to treat the minimum as a ‘default’.”

[19] That submission can only reasonably be read as conveying the proposition that deterrence is not the purpose of, or relevant to, the suspension of an entry permit under s 510. The ABC Commissioner sought to distinguish the submission on the basis that it was only concerned with the length of any suspension of Mr Savage’s entry permit which might be imposed, but that makes no difference. It could not reasonably be suggested, and it was not submitted, that deterrence is not an object of or relevant to the power to determine the length of a suspension but is nonetheless required to be taken into account in determining whether there should be a suspension at all.

[20] In short, the position is that the ABC Commissioner seeks to contend in its appeal that the Deputy President erred in not taking into account a consideration which no party at first instance contended he should take into account, and also erred by approaching the task before him consistently with the ABC Commissioner’s own submission quoted above. We consider that it would be contrary to the interests of justice to grant permission to allow this to occur. The legislature has, by s 110(1) of the BCIIP Act, conferred on the ABC Commissioner the right to intervene in and make submissions in (inter alia) any entry permit matters involving CFMMEU officials. 10 Once the ABC Commissioner exercises that right, he becomes a party to the proceedings by virtue of s 110(2) of the BCIIP Act and is thus able to access the appeal facility in s 604 of the FW Act. Having regard to the ABC Commissioner’s status as an officer of the Commonwealth with the responsibility of discharging the regulatory functions set out in s 16 of the BCIIP Act and the obligation to act as a model litigant, it would in our view constitute a misuse of the rights conferred by or emanating from s 110 of the BCIIP Act for the ABC Commissioner to make submissions on an issue of law at first instance and then to seek to make directly contrary submissions about the same issue in an appeal in order to secure what he perceives to be a desired outcome.

[21] In any event, we do not consider that the ABC Commissioner has advanced any persuasive argument that the Commission is required, under s 510(2) of the FW Act, to take into account (in the sense discussed in Minister for Aboriginal Affairs v Peko-Wallsend 11) the need for general deterrence. There is no express provision in the FW Act to that effect and, having regard to the proposition (accepted by the ABC Commissioner) that the object of s 510 is protective rather than punitive, we do not consider any such requirement arises by implication. General deterrence in respect of any contravention of Pt 3-4 of the FW Act is addressed by the monetary penalty which a relevant court might impose in respect of such a contravention. Section 510 is (relevantly) concerned with the specific issue of whether a union official whose contravention has given rise to such a penalty should continue to hold an entry permit for a specified period or at all and, because this does not involve the exercise of a penal function, there is no basis to conclude that further consideration of the need for general deterrence in respect of the official’s contravention must again be taken into account.

Conclusion

[22] Permission to appeal is refused.

VICE PRESIDENT

Appearances:

M Felman SC with A Denton of counsel on behalf of the appellant.

P Boncardo of counsel on behalf of the respondent.

Hearing details:

2022.

Sydney, Brisbane and Newcastle (via video-link):

2 February.

Printed by authority of the Commonwealth Government Printer

<PR738094>

 1   [2021] FWC 6198

 2   [2021] FCA 951

 3   [2021] FWC 6198 at [29] - [30]

 4   Ibid at [15]

 5   Ibid at [16]

 6   Ibid at [17]-[26]

 7   Ibid at [27]

 8   Ibid at [30]

 9   Ibid at [29]

 10   On the basis that any such official is a “building industry participant” within the definition of that term in s 5 of the BCIIP Act.

 11   [1986] HCA 40, 162 CLR 24 at 40 per Mason J