WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

CITATION : 2012 WAIRC 00778

DELIVERED : Thursday, 23 August 2012

FILE NO. : M 38 OF 2011

Claimant

-v-

Director General, Department of Education

Respondent

Catchwords : Breach of Education Assistants’ (Government) General Agreement 2010; Failure to ensure that new employees and redeployees attend induction sessions within three months of commencement; Failure to give claimant at least 14 days’ notice of the time and place of inductions and the names of those attending; Failure to allow the claimant its entitlement of at least 30 minutes to address new employees without employer representatives being present; Whether Court should issue a caution or otherwise impose a penalty; Whether an additional order pursuant to s.83(5) of the Industrial Relations Act 1979 should be made.

Legislation  : Industrial Relations Act 1979

Public Sector Management Act 1994

Instruments  : Education Assistants’ (Government) General Agreement 2007

Education Assistants’ (Government) General Agreement 2010

Cases referred to

in Decision      : Australian Competition and Consumer Commission v Dermalogica Pty Ltd ([2005] 215 ALR 482)

Result : Penalties imposed

  Penalties to be paid to the claimant

            No other order made

Representation : Ms E Palmer (as agent) appeared for the claimant

  Mr D Matthews (Counsel), instructed by the State Solicitor’s Office, appeared for the respondent             

REASONS FOR DECISION

Background

1         The claimant brings this claim pursuant to s.83(1) of the Industrial Relations Act 1979 (IR Act).  It alleges that the respondent has, between January 2011 and 5 June 2011, failed to comply with the Education Assistants’ (Government) General Agreement 2010 (the Agreement).  The following breaches of Clause 10 - Induction (clause 10) of the Agreement are asserted:

1. Failing to ensure that new employees and redeployees attended an induction session within three months of commencement of employment (clause 10.1);
2. The District Offices not being responsible for conducting inductions (clause 10.3);
3. Failing to hold inductions for new employees twice each term during term time for new employees (clause 10.3);
4. Failing to give the claimant at least 14 days’ notice of the time and place of inductions and the names of those attending (clause 10.4); and
5. Not allowing the claimant its entitlement of at least 30 minutes to address new employees without employer representatives being present (clause 10.4).

2         Early in this proceeding the respondent admitted having breached clauses 10.1 and 10.4 of the Agreement as outlined in 1, 4 and 5 above, but denied having breached clause 10.3. For reasons outlined in United Voice WA v Director General, Department of Education [2012 WAIRC 00446] delivered on 19 July 2012, I found that the alleged breaches of clause 10.3 were not made out. These reasons concern whether or not the respondent should be penalised for her 158 breaches of clause 10.1 and her 52 breaches of clause 10.4.

What remedies are available with respect to the admitted breaches?

3         Sections 83(4) and 83(5) of the IR Act provide:

“(4) On the hearing of an application under subsection (1) the industrial magistrate’s court may, by order —

   (a) if the contravention or failure to comply is proved —

    (i) issue a caution; or

(ii) impose such penalty as the industrial magistrate’s court thinks just but not exceeding $2 000 in the case of an employer, organisation or association and $500 in any other case;             

     or

    (b) dismiss the application.

(5) If a contravention or failure to comply with a provision of an instrument to which this  section applies is proved against a person as mentioned in subsection (4) the industrial magistrate’s court may, in addition to imposing a penalty under that subsection, make an order against the person for the purpose of preventing any further contravention or failure to comply with the provision.”

4         The claimant seeks the imposition of a penalty of $1,000 for each breach and the making of an order, pursuant to s.83(5) of the IR Act, preventing the respondent from further breaching clauses 10.1 and 10.4 of the Agreement.  The respondent says that she should not be penalised but rather be cautioned. She contends that because she is unlikely to commit further breaches that the making of an order pursuant to s.83(5) of the IR Act is unnecessary.

5         Any order made must be commensurate with the seriousness of the breaches committed. The seriousness of each breach must be determined by taking into account the statutory penalty for the breach, the circumstances of the commission of the breach, any aggravating factors, and any mitigating factors. Aggravating factors are factors which in the Court’s opinion increases culpability. A breach is not aggravated by the fact that the respondent has been previously found to have breached the provisions of an Award or Agreement nor is it aggravated by the fact that it has a record of breaches. The fact that a previous penalty has not achieved the purpose for which it was imposed is also not an aggravating factor. Mitigating factors are factors which in the Court’s opinion decreases culpability or which otherwise decreases the extent to which that party should be punished. An admission of guilt is a mitigating factor and the earlier in the proceedings that it is made, or indication is given that it will be made, the greater the mitigation.  In circumstances where multiple breaches have occurred and the Court considers that penalties should be imposed, the Court must, in addition to the aforementioned factors, have regard to the total effect of individual penalties. The respondent’s capacity to pay and the extent to which the total penalty will burden the culpable party must also be taken into account.

Is it appropriate to caution the respondent?

6         In considering whether the respondent should be cautioned, regard must be had to the number of breaches and the impact of those breaches, both upon Education Assistants and the claimant.

7         There can be no doubt that the respondent’s failure to comply with the Agreement has considerably impacted both Education Assistants and the claimant. Indeed, numerous Education Assistants have missed out on their inductions. They were, at a time when it was most valuable to them, deprived of important information about their job, their roles, departmental policies, their contracts of employment, the conditions of their employment, available contacts and supports, and of matters appertaining to safety and health. Without the benefit of a proper induction process their knowledge and ability to fit in and perform their duties was made much more difficult. Further, their ability to join the claimant was rendered more difficult.  There can be no doubt that the failure to hold inductions has also negatively impacted on the claimant’s ability to recruit members, and inform new employees of their rights and of ongoing industrial campaigns.

8         Bearing in mind those observations it is obvious that the breaches are not minor or incidental in nature, but rather, are of significant effect. In this instance the issuance of a caution will not be commensurate with the seriousness of the failure to comply. The issuance of a caution may well be appropriate in circumstances where there has been a technical breach which occurs as a result of some significant extenuating circumstance, or where the impact on the affected party is limited. These breaches do not fall into those categories. The breaches have occurred in circumstances where the respondent was, during the course of the Department of Education’s (the Department) restructure, somewhat indifferent to the need to strictly comply with the Agreement. In the circumstances, only the imposition of a monetary penalty will be commensurate with the seriousness of the respondent’s conduct.

What is the appropriate penalty?

9         The claimant calls for the imposition of a penalty set at half the maximum available. It says that in view of the respondent’s “deliberate and wilful conduct” a deterrent penalty of that magnitude is necessary to ensure that she takes seriously her obligations under the Agreement.  With respect, I do not accept that the respondent’s conduct indicates a wilful defiance of clause 10 of the Agreement.  Rather the evidence reveals that the breaches have flowed from ineffectiveness in the implementation of a new government policy concerning the delivery of school services which was announced in early September 2010.

10      It appears that changes in the delivery of school services occurred very quickly and in some respects without sufficient planning.  The way in which the changes would affect the Agreement was not properly considered either before, or soon after the implementation of changes.  That led to considerable confusion. In that state of confusion no-one within the Department took on the responsibility of complying with the Agreement, and it was not until May 2011 that the problem was rectified. By that time the opportunity for compliance with the requirements of clause 10 had passed. The need for compliance with the Agreement was not given the importance it should have been given during the planning and implementation phases of the restructure. That failure resulted from ineptitude rather than deliberate non-compliance with the Agreement.  There were no aggravating factors in the commission of the breaches.

11      These breaches are at the low end of seriousness and should attract a commensurate penalty.  In criminal proceedings, fines set at ten percent of the maximum penalty are often considered to be an appropriate starting point for first offences at the lower end of seriousness. In my view the same approach should be adopted in dealing with the imposition of penalties under s.83(4)(ii) of the IR Act. In this matter, even if the starting point were to be set at ten percent of the maximum penalty, the accumulation of individual penalties, given their number, would result in a significant total penalty with a condign deterrent effect.

12      Taking that as a starting point, I move to take into account mitigating factors. They include the fact that the respondent has not previously breached the Agreement or its predecessor, and that at a very early stage in the proceedings admitted her failure to comply. Her admission alleviated the need for the claimant to prove its case, a task which would have been logistically difficult given the nature and number of alleged breaches.   Further, it is important to recognise that the breaches occurred as a result of a one-off event being the immediate implementation of new government policy.  That occurrence can be viewed as an extenuating element in her failure to comply.  Having regard to those significant mitigatory factors, I conclude that the appropriate penalty for each breach is $100. Given that there are 210 admitted breaches, the respondent will suffer a total penalty of $21,000.  That total penalty is commensurate with what has occurred.  It does not offend the totality principle and is of such significant proportion that it acts as a real and meaningful deterrent penalty.  It is neither nominal nor crushing. When that total penalty is apportioned into its component parts it properly reflects the respondent’s wrong doing. A total penalty of $15,800 for denying 158 employees their induction is commensurate with her conduct, as is the total penalty of $5,200 for failing to comply with clause 10.4 of the Agreement.  I observe that the respondent has the capacity to pay the amount ordered.

Who should the penalties be paid to?

13      The claimant submits that the penalties should be paid to it rather than into consolidated revenue. It says that because it and its members were directly affected by the respondent’s conduct that the penalties will only be meaningful they are paid to the union. Otherwise, there would merely be a transfer of money from one government department to another.

14      Section 83F of the IR Act enables that which is sought.  It provides:

  “83F. Payment of costs and penalties

(1) Where the industrial magistrate’s court, by an order made under section 83, 83A, 83B or 83E, imposes a penalty or costs the industrial magistrate’s court shall state in the order —

    (a) the name of the person liable to pay the penalty or costs; and

(b) the name of the person to whom the penalty is, or costs are, payable.

(2) An industrial magistrate’s court imposing a penalty by order under section 83, 83A, 83B or 83E may order that the amount of the penalty, or part of that amount, be paid to —

(a) a person directly affected by the conduct to which the contravention relates;

    (b) the applicant; or

   (c) the Treasurer.

(3) In making an order for payment to a person referred to in subsection (2)(a) the court must take into account any other compensation that the person has received or is likely to receive in respect of the conduct concerned.”

15      I accept that the claimant has been vigilant in ensuring compliance with the Agreement. It is important that parties who police compliance with industrial agreements be rewarded for their efforts. There can be no doubt that in this instance the claimant has expended considerable resources and time in bringing the claim. The payment of penalties to it will, in part, ameliorate its costs and the harm done. I propose to order that the penalties imposed be paid by the respondent to the claimant.

Further relief

16      The claimant argues that given the degree of irreparable damage which will be done in the event of a further breach that the respondent should be exposed to a higher penalty in the event of such. A real and significant deterrent sanction is required. That is particularly so, given that the Court has heard evidence that the respondent has, subsequent to the institution of these proceedings, continued to fail to appropriately inform the claimant of inductions.  It says that an order pursuant to s.83(5) of the IR Act is required.

17      The s.83(5) order sought is injunctive in nature. In Australian Competition and Consumer Commission v Dermalogica Pty Ltd ([2005] 215 ALR 482), His Honour Goldberg J said, at [110]:

“In determining whether to grant an injunction proscribing future conduct, the court should consider whether all the circumstances of the case – including the scale of the prior contravening conduct, any evidence as to the contravener’s future intentions and the likelihood of damage to other persons as a result of further proscribed conduct – call for the contravener being subject to the more onerous burdens, such as contempt of court, in relation to their future conduct. This consideration is required even though the power of the court to grant an injunction under s 80 is not limited by the requirement of a threat of future contravening conduct.”

18      The same considerations apply in this matter. Prior to the restructure in September 2010 the respondent had been compliant with clause 10 of the Agreement. She only became non-compliant during the Department’s restructure.  That is now complete and there are clear lines of responsibility with respect to compliance with clause 10 of the Agreement. Further, because the respondent has been involved in this proceeding and now knows its outcome she will be acutely aware of the need to strictly comply with the Agreement and of the significant consequences which will flow in the event of further breach. The respondent, who is possibly this state’s largest employer, has in the past been a responsible employer with limited minor breaches of industrial instruments. She is statutorily obliged to comply with the requirement of the Agreement and any non-compliance may render her in contravention of s.30(d) of the Public Sector Management Act 1994, with significant personal consequences. In light of the possible consequences in the event of further non-compliance there is a very strong incentive for compliance.  In the circumstances, the making of an order pursuant to s.83(5) of the IR Act, is not required. The penalty imposed is adequate to serve as a specific deterrent.

19      I will now hear from the parties with respect to the specific terms of the orders to be made.

G. CICCHINI

INDUSTRIAL MAGISTRATE