Fair Work Ombudsman loses bid for hefty fine in MUA strike case
Employment June 21, 2018 11:16 pm By Christine Caulfield | Melbourne

The Fair Work Ombudsman lost its argument for $4.1 million in penalties against the CFMMEU for industrial action at shipping terminals in Sydney and Brisbane, with a judge instead fining the union just $38,000.

Federal Court Justice Jayne Jagot ruled Thursday that the week-long coordinated strikes by the then Maritime Union of Australia in August 2015 at Hutchison Ports was a single contravention of the Fair Work Act and that no further compensation was appropriate.

The penalty ruling followed a December judgement of liability against the union, which has since merged with the Construction, Forestry, Mining and Energy Union. The MUA launched the strikes over Hutchison’s plans for large-scale redundancies at the two terminals. The company lost $620,000 over the week, the court heard.

The Ombudsman had sought $3.5 million in penalties and another $620,000 in compensation to Hutchison. It argued that the maximum penalty in the case was $30 million because the strikes amounted to 278 lost working shifts, each shift was a separate contravention of the Fair Work Act that attracted a maximum fine of $54,000 and the MUA both organised and was involved in the strikes, so breached the law twice for each contravention.

In siding with the union, Judge Jagot ruled the Ombudsman’s argument for 278 contraventions was an “artificial construct of the FWO’s making”.

“The MUA was engaged in one overall concerted action to bring industrial pressure to bear on HPA not to implement the proposed redundancies at the Sydney and Brisbane terminals in a manner which the MUA considered would be in breach of the enterprise agreement, would result in the unlawful termination of around 100 employees, and destroy its own capacity to continue to function as an effective industrial organisation,” the judge said.

“On this basis the MUA organised industrial action by employees once, with that industrial action organised to occur in two locations, Sydney and Brisbane.”

She also declined to find that the MUA organised employees not to attend work on 278 separate occasions.

“Even if the FWO’s case that the MUA’s conduct involved organising the industrial action of employees at Sydney separately from Brisbane is accepted, I am unable to characterise the MUA as having engaged in 278 separate acts of organisation,” she said.

The Ombudsman had also argued that the prior misconduct of the CFMEU should be taken into account when assessing the penalty for specific deterrence. Again Judge Jagot disagreed, saying the Fair Work Act required that the amalgamated union be treated as if it were the old MUA.

“To take into account the CFMEU’s conduct or the fact that it is part of the CFMMEU as relevant to specific deterrence, in my view, would involve an error of law because s 79(b) [of the FW Act] creates a statutory fiction under which the proceeding is to continue, the fiction being that the amalgamated organisation, the CFMMEU, is and always has been the deregistered organisation, the MUA,” she said.

The judge did, however, consider Hutchison’s conduct in sacking 100 workers by email — which the union claimed was an unlawful breach of their enterprise agreement — to be relevant in assessing the penalty.

She also refused to fine the union a separate $620,000 as compensation to Hutchison.

“It is relevant that the MUA’s apparent view, that HPA was acting unlawfully (and also in a seemingly high-handed manner, objectively likely to cause employees to be both distressed and angry), was not idiosyncratic. It was a view which was reasonably open given the circumstances,” she said.

The FWO said Thursday it was reviewing the ruling and considering an appeal.

The CFMEU is represented by Slater & Gordon.

The case is Fair Work Ombudsman v Construction, Forestry, Maritime, Mining and Energy Union.

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Christine Caulfield

Christine Caulfield has been a journalist for 18 years. She was most recently the Co-Managing Editor at US legal news publication Law360. Prior to that she worked as the County Court reporter for The Herald Sun. She is Co-Founder and Editor of Lawyerly.