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Threat of union merger becomes a reality


On 6th March 2018 the Fair Work Commission issued an order fixing 27th March 2018 as the Amalgamation Day for the CFMEU, MUA and TCFUA.

“Our members remain extremely concerned that the law allows a merger of unions which have such an extraordinary and entrenched contempt for the law,” Denita Wawn, CEO of Master Builders Australia said.

“These unions will now have even more capacity to cause immense destructive disruption to the economy and as usual it will be the community that is forced to pay the price,” she said.

“For the record, the courts have sounded warning after warning about the threat that the CFMEU’s tactics pose to the public interest. In their decisions numerous judges have provided an insight into how those tactics now pose a test for the new union and its officials,” Denita Wawn said.

“Will they promise the community that they won’t continue to deliberately break laws just because they don’t agree with them? Will they stop behaving as if there is one law for militant unions and another for everyone else? Will they end the thuggery and intimidation? Will they stop putting their own interests above everyone else in the community? These are they tests they now face,” Denita Wawn said.

The CFMEU’s record of non-compliance with legislation of this kind has now become notorious. That record ought to be an embarrassment to the trade union movement.”

Jessup J, 1 July 2016, [2016] FCA 772

“Such conduct strikes at the heart of freedom of association. For subcontractors, such as C & K, a major pathway to growing their business is to be awarded contracts from large construction companies like the first respondent. If the only way in which they can break into those circles is to have made an agreement with the CFMEU, then the whole fabric of our industrial relations system will disintegrate.”

Vasta J, 9 August 2016, [2016] FCCA 2175

“The overwhelming inference is that the CFMEU, not for the first time, decided that its wishes should prevail over the interests of the companies and that this end justified the means.”

“The CFMEU is to be regarded as a recidivist rather than as a first offender.” 

Tracey J, 17 March 2015, [2015] FCA 226

“On any reasonable measure that is an appalling record. It bespeaks an attitude by the CFMEU of ignoring, if not defying, the law and a willingness to contravene it as and when it chooses.”

White J, 22 April 2016, [2016] FCA 413

“The circumstances of these cases …  nonetheless, bespeak a deplorable attitude, on the part of the CFMEU, to its legal obligations and the statutory processes which govern relations between unions and employers in this country. This ongoing willingness to engage in contravening conduct must weigh heavily when the need for both specific and general deterrence is brought to account.”

Tracey J, 1 May 2015, [2015] FCA 407

“It would be apt to describe the behaviour of the First Respondent as “sheer thuggery”. Such thuggery has no place in the Australian workplace. Contraventions of the FW Act that involve such thuggery cannot be tolerated.”

Vasta J, 9 March 2016, FCCA [2016] 488

“There is also extensive material before the Court indicating a significant record of non-compliance with the provisions of the industrial legislation by the CFMEU. Penalties imposed on the CFMEU appear to have no impact – indeed the obvious inference to be drawn is that the CFMEU has ignored such penalties as inconsequential.”

                        Collier J, 19 July 2016, [2016] FCA 817

As to the CFMEU, I am firmly of the view, having regard to its outrageous disregard in the past and also in the present case of Australian industrial norms, as set out materially for this case in s 44 of the BCII Act, that anything less than a penalty of the individual amounts for particular days and the total amount would not serve the main purpose of the Act and the particular public interest, described in the Royal Commission report, which this Act was designed to promote. Had there been evidence of particular economic loss at the site, or worse conduct, and had there not been at least something of the mitigation entailed in an acknowledgement of the contraventions, the penalties in respect of the CFMEU would have been much greater.

Logan J, 12 June 2015, [2015] FCA 614

There was never any legitimate reason for the First Respondent to enter that shed. The only reason he did so was to intimidate the employees and to reinforce to others at the building site, the notion that non-union membership is not going to be tolerated.

Vasta J, 9 March 2016, FCCA [2016] 488

“If an industrial organisation turns a blind eye, or does not concern itself as to the manner and methods employed by officers, servants or agents of the industrial organisation to achieve what they see as the organisation’s ends, the organisation is at risk of being heavily penalised where the means adopted are prohibited and exhibit the worst features of the proscribed conduct.”

Cooper J, 9 May 2002, [2002] FCA 585

“In the period between 1 January 1999 and 31 March 2014, the CFMEU itself or through it officials had been dealt with for 17 contraventions of s 500 or its counterparts in earlier legislation, and for 194 contraventions of s 348 of the FW Act or other provisions proscribing forms of coercive conduct.”

White J, [2016] FCA 415

“The conduct of the CFMEU seen in this case brings the trade union movement into disrepute and cannot be tolerated. 

“In a liberal democracy, it is assumed that citizens, corporations and other organisations will comply with the law.  Such compliance is not a matter of choice.  The community does not accept that a citizen, corporation or other organisation may choose to break the law and simply pay the penalty.  The courts certainly do not accept that proposition.”

North, Dowsett and Rares JJ, 29 March 2017, [2017] FCAFC 53

A number of findings involving unlawful behaviour by officials related to the CFMEU have been made in recent years…[His Honour then cited 12 cases] … ...These various cases illustrate that the federal body has not been effective in ensuring that officials act in accordance with the law. I note that there is no evidence of offending officials… suffering any serious disciplinary penalties.

Gyles J, 11 April 2008, [2008] FCA 466

The ban was imposed in preference to alternative, lawful, actions such as negotiations or resort to dispute resolution procedures which were available to the CFMEU and its members.

…Similar previous conduct demonstrates that the respondent has a history of engaging in the particular conduct in question, that the penalties previously imposed were insufficient to deter the respondent from re-engaging in that conduct and that the respondent has failed to take adequate steps to prevent further contraventions…

Tracey J, 19 September 2008, [2008] FCA 1426

“…the history tends to suggest that the Union has, with respect to anti-coercion and similar provisions of industrial laws, what the High Court in Veen described as ‘a continuing attitude of disobedience of the law’…”

Jessup J, 29 May 2009 [2009] FCA 548; (2009) 182 IR 327

“…the litany of contraventions…[and] the many prior contraventions of relevant statutory proscriptions by the Union…indicating a propensity, on the part of the Union, to engage in proscribed conduct.”

Goldberg, Jacobson and Tracey JJ, 10 September 2009, [2009] FCAFC 120; (2009) 189 IR 145

“Whilst the particular losses caused by the conduct imposed greater losses, it seems, on the members than anyone else it was nonetheless a breach in circumstances where there were real alternatives available and where the union has an unenviable history of past breaches.

Riethmuller FM, [2011] FMCA 284

…I have had referred to me, particularly in Schedule A to the submissions prepared by the applicant, material which identifies at least 38 occasions where the fourth respondent [CFMEU] has been adversely noted as a party to proceedings seeking imposition of penalties. It is fair to infer from that Schedule that, as was submitted, the fourth respondent does have a history of engaging in conduct that brings it adversely to the attention of the courts and, notwithstanding the imposition of significant or at least not insignificant penalties, it does not appear that the penalties imposed have, to date at least, been sufficient to deter it from re-engaging in that conduct. As I have noted in the course of debate with counsel, perhaps the union needs to review its enterprise risk management processes in order to do more to bring attention to this form of behaviour to those who manage the union.

Burnett FM, [2012] FMCA 189

On the material before the Court the CFMEU appears a worse offender than the CEPU, in that the CFMEU has been penalised approximately $1.2 million of members’ money (in addition to penalties personally imposed on individual union officials) in respect of more than 40 contraventions of laws relating specifically to coercive conduct…the facts demonstrate the need to impose penalties which meet the objective of specific deterrence, particularly in relation to the CFMEU whose organisers appear to have shown a somewhat cavalier disregard both of the need to comply with the law and of penalties which have been previously imposed on the union for similar conduct.

Collier J, 20 August 2013, [2013] FCA 846

“The CFMEU has engaged in a significant number of prior contraventions of similar legislation.”

Gordon J, 7 October 2013 [2013] FCA 1014.

“The union has not displayed any contrition or remorse for its conduct. The contravention is serious… Substantial penalties for misconduct, prior to that presently under consideration, have not caused the CFMEU to desist from similar unlawful conduct.

Tracey J, 21 November 2013, C [2013] FCA 1243

It was mentioned above that there are a number of prior incidents involving unlawful industrial action that have resulted in the imposition of penalties against the respondents. It is generally accepted by the parties that the penalties imposed for the conduct described in the cases listed in Sch B of the respondents’ outline of submissions on penalty are relevant in this case, and I take them into account generally when setting penalty. Among other things, they confirm that the respondents are not “cleanskins” when it comes to compliance with industrial laws such as the BCII Act and know that repeated, calculated contraventions will be met with monetary penalties of some significance.

Barker J, 20 December 2013, [2013] FCA 1431.

There is ample evidence of significant contravention by the CFMEU and its ideological fellow travellers. The CFMEU, as a holistic organisation, has an extensive history of contraventions dating back to at least 1999. The only reasonable conclusion to be drawn is that the organisation either does not understand or does not care for the legal restrictions on industrial activity imposed by the legislature and the courts.

My views on that matter are reinforced by my inquiries of the corporate respondents concerning measures of corrective action. This would appropriately involve the development of policy dealing with union entry to work sites, coupled with the training of employees in how to use that policy and undertake their duties responsibly. The unions would be required to supervise the implementation of those policies and provide for sanctions, possibly by way of re-training, for employees who failed to comply with those policies. This would also necessitate internal audit process to check that policies are being applied, are working and are modified if necessary. There is no evidence that any of this, or indeed any corrective action at all, takes place.

Burnett J, 28 February 2014, [2014] FCCA 1429

The CFMEU’s history and the nature of its present contravention indicate that deterrence, both general and specific, should be a significant consideration in the fixation of an appropriate penalty. The CFMEU is not, of course, to be punished again for its previous contraventions but its history does mean that it is not entitled to any leniency by reason of a previous good record, or by reason of a history of attempting to comply with provisions such as s 355. The penalty is to be fixed in the context of the CFMEU’s previous record. 

White J, 5 March 2014, (2014) 140 ALD 337

“…the pattern of repeated defiance of court orders by the CFMEU revealed by those four cases is very troubling.”

Cavanough J, 31 March 2014, [2014] VSC 134

“The record indicates an attitude of indifference by the CFMEU to compliance with the requirements of the legislation regarding the exercise of rights of entry.”

White J, 23 December 2014, [2014] FCA 1432

[The relevant priors] do, however, expose a propensity, on the part of the CFMEU, to continue to commit contempts notwithstanding the imposition of significant sanctions.

Tracey J, 17 March 2015, FCA 226

“The present conduct of one of its officials adds to this depressing litany of misbehaviour.

It evidences an ongoing disregard for the rule of law and highlights the need for the imposition of meaningful penalties within the limits imposed by the Act.

The CFMEU … has not, however, deprecated Mr Berardi’s conduct or expressed any contrition for failing to prevent his contraventions. Nor has it indicated any willingness to take steps to ensure that its officials in future comply with their legal obligations.”

Tracey J, 20 April 2015, FCA 353

As to the CFMEU, I am firmly of the view, having regard to its outrageous disregard in the past and also in the present case of Australian industrial norms, as set out materially for this case in s 44 of the BCII Act, that anything less than a penalty of the individual amounts for particular days and the total amount would not serve the main purpose of the Act and the particular public interest, described in the Royal Commission report, which this Act was designed to promote. Had there been evidence of particular economic loss at the site, or worse conduct, and had there not been at least something of the mitigation entailed in an acknowledgement of the contraventions, the penalties in respect of the CFMEU would have been much greater.

Logan J, 12 June 2015, [2015] FCA 614

“The CFMEU’s long history of its officials conducting themselves unlawfully involving the very kind of conduct in which Upton engaged on 8 October 2012 calls for a significant component of specific deterrence.”

Gilmour J, 3 July 2015, [2015] FCA 672

“There is clearly, as other judges have recorded, a strong record of noncompliance on the part of the Union through its officers with provisions of industrial relations legislation, although that does not mean that a disproportionate penalty can or should be imposed. I note that significant past penalties have not caused the Union to alter its apparent attitude to compliance with the entry provisions and restrictions under the FW Act.

Mansfield J, 14 August 2015, [2015] FCA 845

“The schedule paints, one would have to say, a depressing picture. But it is more than that. I am bound to say that the conduct referred to in the schedule bespeaks an organisational culture in which contraventions of the law have become normalised.”

Jessup J, 4 November 2015, 2015] FCA 1173

The case is devoid of any mitigating circumstances. The Union has shown no contrition, and has not cooperated with the regulator. I accept the submission made on behalf of the respondents that neither of these circumstances should be regarded as an aggravating one. On the other hand, on the facts of the case, and on the way it has been conducted, there is no circumstance to which counsel could point as tending to exert a moderating influence upon the level of the penalty which the court would otherwise impose. 

Jessup J, 22 December 2015, [2015] FCA 1462

“It seems to treat being caught conducting such breaches or as the present one simply as occupational hazards in the way in which they conduct their business. There has been no apology for such appalling behaviour.”

Vasta J, 9 March 2016, FCCA [2016] 488

“The conduct has in common features of abuse of industrial power and the use of whatever means the individuals involved considered likely to achieve outcomes favourable to the interests of the CFMEUThe conduct occurs so regularly, in situations with the same kinds of features, that the only available inference is that there is a conscious and deliberate strategy employed by the CFMEU and its officers to engage in disruptive, threatening and abusive behaviour towards employers without regard to the lawfulness of that action, and impervious to the prospect of prosecution and penalties.”

Mortimer J, 13 May 2016,) [2016] FCA 436

“General deterrence is clearly a relevant consideration and, in light of the CFMEU’s poor record, specific deterrence is an important consideration.”

Besanko J, 19 January 2017, [2017] FCA 10

It is now well-established that deterrence, both specific and general, is the predominant purpose of civil penalties in a statutory regime such as that of the FW Act. The CFMEU is a registered organisation of substantial size, resources and influence. Any suggestion that it did not fully understand the operation of the provisions of the Act under which the Director proceeded could not be taken seriously. Indeed, its past record of encounters with these, or similar, provisions speaks loudly of its familiarity with them. That record, to which I refer further below, justifies only one inference: that the CFMEU has done nothing, over the years, to cause its own staff to comply with the law. Indeed, the inference that the CFMEU will always prefer its own interests, whatever they may be from time to time, to compliance with the law is a compelling one. This case presented yet another instance of that pattern of behaviour. The CFMEU and its members may be grateful that the staff of the banks and other financial institutions to whom it has, I presume, entrusted its considerable assets do not take the same approach to compliance with the law.

The CFMEU’s record of contravention has become so extensive that it presents a challenge to convey, both accurately and comprehensively, the substance of the findings made in particular cases. 

Jessup J, 8 February 2017, [2017] FCA 62

“This… lists 107 separate legal proceedings where the CFMEU was found to have contravened industrial legislation, or committed a civil or criminal contempt.

Barker J, 11 May 2017, [2017] FCA 49

The CFMEU was asserting that it could enter building sites simply because – given its position as a prominent Union – it could.

Such a submission, if properly understood, is astounding. There could be no contravention of s 500 of the Fair Work Act, so the submission ran, because no “right” was being exercised but rather the exercise of industrial power and might and the exercise of industrial muscle.

North, Besanko, Flick JJ, [2017] FCAFC 77

“The respondents’ attempts to coerce Watpac into acceding to the CFMEU’s industrial agenda must be regarded as a very serious matter. It is also a very serious infraction of the law to organise employees to engage in industrial action during the currency of enterprise agreements.”

Rangiah J, 28 July 2017, [2017] FCA 843

The first respondent’s conduct in seeking to negate John Holland’s choice to enforce its…Safety Policy, when it had a statutory duty in relation to the health and safety of its workers, was nothing short of unconscionable.”

Emmet J, 28 July 2017, [2017] FCCA 1772

‘It beggars belief that the CFMEU believe that they can act in a manner where they are the ones who dictate who can or cannot work on a construction site.

… It seems that the CFMEU feel that they can usurp Parliament and that they can set the law in this country. There is no place for such an attitude in Australian society’

Vasta J. 5 September 2017 [2017] FCCA 2128

It may have been expected that there would be righteous condemnation of any person compromising safety on the work site coming from a union that purportedly exists to ensure safety on worksites. The silence from the CFMEU, however, has been deafening.

There has been no remorse from the CFMEU. There has been no evidence of the CFMEU training any of its officers as to the provisions of the FW Act to ensure that such abominable behaviour is not undertaken by any of its representatives ever again.

Given the nature of the contraventions, the recidivist nature of the CFMEU, the lack of acknowledgement of any wrong doing, the lack of any remedial action and the need to deter this kind of behaviour, I can see no reason to ameliorate any of the penalties that I will impose on the  CFMEU .

Vasta J. [2017] FCCA 2519 (19 October 2017)

The past history of contraventions of the FW Act by the CFMEU is astounding. It is no understatement to describe the CFMEU as the most recidivist corporate offender in Australian history. Such a description is apt when all of the matters annexed to the submissions of the ABCC are examined. That annexure reveals approximately 120 occasions that Courts have sanctioned the CFMEU for breaches of industrial law over the past 10 years. I have carefully considered all of those entries in the annexure.

Therefore, in assessing the gravamen of each contravention by the CFMEU, it must be borne in mind that the previous history of the CFMEU does put these contraventions into a category that defies easy comparison. While some may want to sanitize this behaviour as an unremarkable workplace contravention, it is far more than that.

The present case falls into this pattern of repeated disregard for the law. To adopt the language of Mortimer J in Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (No 2) [2016] FCA 436 at [142]: the misconduct forms “part of a deliberate and calculated strategy by the CFMEU, to engage in whatever action, and make whatever threats, it wishes, without regard to the law, and t

hen, once a prosecution is brought, to seek to negotiate its way into a position in which the penalties for its actions can be tolerated as the price of doing its industrial business.” See also Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (Perth Childrens’ Hospital Contraventions Case) [2017] FCA 491 at [83]– [90] (Barker J) and the authorities there cited.

Vasta J. [2017] FCA 1269 (27 October 2017)

Having regard to the history of offending by the CFMEU to which I have referred, it may be doubted that any penalty falling within the available range for contraventions of the kind presently under consideration would be “sufficiently high to deter repetition”. Any penalty will be paid and treated as a necessary cost of enforcing the CFMEU’s demand that all workers on certain classes of construction sites be union members.

Vasta J.[2017] FCA 1269 (27 October 2017)

The CFMEU is a large and well-established organisation. It has an extensive litigation history, both as an applicant seeking to enforce compliance with industrial laws, often successfully, and more notoriously as a respondent or defendant to proceedings in which the CFMEU and its officers have been found to have contravened industrial laws. It is highly active in the industrial sphere. Specific deterrence is relevant to the penalty to be imposed upon the CFMEU in this case.

 the CFMEU has a prior history in respect of threats being made to employees about joining that union. Counsel identified at least seven and perhaps eight previous matters in which conduct similar to that in this case was dealt with by a court…

Jarret J. [2017] FCA 1269 (27 October 2017)

‘Regrettably, there is a long history of the ABCC and FWBC personnel being subjected to abuse and threats from various persons and organisations, including representatives of the CFMEU’

T. Pilgrim [2017] AICmr 125

The respondents have shown no contrition for their actions. No apology has been issued by any of the respondents, nor has there been any acknowledgement of any wrongdoing. Whilst this is not an aggravating circumstance that might increase the penalty, it precludes any mitigation of penalty on that basis. It is also relevant to the role of specific deterrence in this particular case.

Jarret J. [2017] FCCA 2738 (9 November 2017)

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