Written by Workforce chief journalist Paul Karp.
The Federal Circuit Court has imposed $32k in penalties on Baulderstone and two of its senior HR managers for committing unlawful adverse action by forcing a worker who quit the Construction Forestry Mining Energy Union (CFMEU) off salary and onto an enterprise agreement.
Ordering each of the HR managers to pay $3,500 – just over half the maximum of $6,600 – Judge Nicholas Manousaridis noted they had failed to refuse their superior’s direction but also that the opprobrium from having been “prosecuted” meant the penalty should not include an element for specific deterrence .
In April 2014, Judge Manousaridis found Baulderstone and its HR managers Nicole Kidman and Razz Razlog repudiated the construction worker’s employment contract at their operational manager’s direction because the worker had quit the CFMEU (WF 17/04/14).
In the penalty decision handed down on Friday (August 7), Judge Manousaridis imposed a $25k fine on Baulderstone and $3,500 each on Kidman and Razlog.
The judge found a high penalty was warranted because their conduct was “deliberateand concerted” and “in complete disregard” of the worker’s rights under his contract.
He said the pair had “concealed the true reasons for their conduct” by telling the worker that remaining on salary was incompatible with his role as a safety officer.
Judge Manousaridis did not accept Baulderstone’s breach was “an aberration”, because it failed to call the operational manager to give evidence.
It was therefore “conceivable [the manager] had a general willingness to attempt to allay CFMEU officials’ concerns about an employee not being a union member”.
The judge said the worker was in a position of vulnerability and did not sign the document giving up his salary out of free choice.
He said there was no need to factor in specific deterrence as Lend Lease had acquired Baulderstone and implemented changes. He also considered that Baulderstone had not previously contravened the Fair Work Act.
The $25k penalty reflected general deterrence and the need to denounce the conduct, the judge said.
HR had choice to reject manager direction: judge
With respect to the HR managers’ $3,500 penalties, Judge Manousaridis considered:
- they “did not originate the contravening conduct” but were acting under direction of the operations manager;
- although there may have been negative consequences if they disobeyed the direction, the judge concluded that in the absence of evidence they were forced, Kidman and Razlog “had a choice of not implementing the decision but failed to exercise that choice”; and
- there was no need for the penalty to reflect specific deterrence as the opprobrium of being prosecuted as an individual was “specific enough deterrent”.
The judge ordered the penalties be paid to the Commonwealth and not the worker forced off salary because he did not suffer financial loss as a result of the breach.
It would be inappropriate to allow him to keep the penalties in circumstances where he wouldn’t qualify for compensation under the Fair Work Act, the judge said.
(Fair Work Building Industry Inspectorate v Baulderstone Pty Ltd & Ors (No 2) , FCCA 2129, 7/08/15)
(This story first ran in Workforce Daily 19741, August 10, 2015)
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