A recent Federal Court decision on the quantum of penalty to be imposed for a breach of section 346 of the Fair Work Act 2009 (Cth) (Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 5)  FCA 1384) highlights the need for employers to tread carefully when dealing with the termination of the employment of union delegates or risk attracting penalties at the top end of the scale.
- The background facts to this case are set out inConstruction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 4)  FCA 762 (the judgement on liability). Briefly, the facts are as follows:
- in 2011, BHP Coal Pty Ltd (BHP) terminated the employment of Mr Kevin Adams and Mr Justin Winter (the vice president and secretary/treasurer of the CFMEU mining and energy division's Peak Downs Lodge) following a bullying complaint made against them in 2008;
- human resources at BHP carried out an investigation at the time of the complaint and found that the complaint was unsubstantiated;
- the Lodge vice president commenced defamation proceedings against the complainant. Those proceedings were dismissed however the court found that the two delegates had physically threatened the complainant;
- it was on this basis that BHP terminated the delegates' employment some three years after the relevant events; and
- in the judgement on liability, Justice Collier found that BHP took unlawful adverse action against the delegates in breach of section 346 of the Fair Work Act 2009 (Cth) (Act) because it failed to discharge its onus of proving that the terminations were not because of the employees' union roles and activities.
Decision on penalty
- The maximum penalty for a breach of section 346 of the Act at the relevant time was $33,000.
- Despite the common factual issues between the two terminations, Justice Collier found that there were two separate contraventions of the Act by BHP. Justice Collier was satisfied that BHP's conduct was not a single course of conduct warranting just one penalty.
- Justice Collier stated the following in determining the quantum of penalty:
- BHP's decision to terminate the two union delegates was harsh compared to its response to more extreme bullying in the workplace;
- BHP's conduct was contrary to the objects of the Act and undermined the freedom of association principles contained in the legislation;
- BHP did not display any contrition for its conduct and did not take any corrective action in relation to the contraventions;
- even though BHP may not have specifically intended to breach the Act, the dismissals resulted from deliberate actions of decision-makers within BHP and members of senior management were involved in the contraventions;
- the breaches of the Act were serious and therefore a serious penalty should be imposed for the purposes of general deterrence;
- in relation to specific deterrence, BHP did not have a history of prior conduct. However, a penalty of substance was required because BHP "is a major and profitable Australian corporation, with thousands of employees"; and
- a 10 per cent discount should be applied because the decision-maker placed significance on the outcome of the defamation proceedings – this set the case apart from those in the realm of "bad cases".
- A fine of $60,000 was imposed on BHP – this was more than 90% of the maximum penalty available.
Lessons for employers
- Employers should ensure that their treatment of alleged perpetrators of workplace bullying is consistent throughout the workplace and that disciplinary action taken against an employee union delegate alleged to have engaged in bullying must be substantiated by evidence of bullying, and not wholly or in part because of an employee's union role and activities.
- In determining penalty, contrition and corrective action following a potential contravention of the Act are important considerations. Employers should ensure that their conduct following a potential contravention does not provide a basis for a finding that it is an aggravating factor in determining penalty.
Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd (No 5)  FCA 1384
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