Fair Work Ombudsman’s Bid to Impose $4M penalty thrown out

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The Federal Court has thrown out the Fair Work Ombudsman’s bid to have $4.1 million in penalties and compensation imposed on the maritime union for seven days of unlawful strikes at Hutchison Ports Australia.

Federal Court judge Jayne Jargot instead today imposed a penalty of just $38,000 against the union which organised the unlawful industrial action in protest at the late night sackings of almost 100 Hutchison workers by email and text.

Fair Work Ombudsman Natalie James said the agency was reviewing the decision and “considering a possible appeal, including in relation to the approach adopted in determining the maximum penalty available at law in the matter”.

Hutchison dismissed 97 of its 224-strong workforce in 2015, prompting union claims the company was trying to bust the influence of the MUA.

Justice Jargot found last year the union decided to go to “war” and “unleash every tool available” against Hutchison because it believed it was being confronted with an “existential threat”.

The Federal Court halted the dismissals, and a settlement secured generous voluntary redundancies for up to 60 wharfies.

The ombudsman subsequently initiated legal action over the unlawful industrial action, seeking $3.5 million in penalties against the union and the payment by the union of $620,217 in compensation to Hutchison.

But in her penalty judgment today, Justice Jargot rejected the ombudsman’s submissions, including that each of the 278 shifts during which employees took industrial action was a discrete contravention of the Fair Work Act.

She said the industrial action that occurred in Sydney and Brisbane arose from a single course of conduct by the union, and the multiple contraventions constituted a single breach, carrying a maximum $54,000 penalty.

Justice Jargot said she accepted the industrial action continued in defiance of a Fair Work Commission order; that it meant the company’s two terminals could not operate for a week and that Hutchison was likely to suffer losses, estimated by the ombudsman at $620,217.

But she said the union was motivated to protect employees from what it considered Hutchison’s unlawful action in not complying with consultation obligations in the enterprise agreement about the redundancies. The union wanted to protect itself from what it perceived to be an existential threat given the scale of the redundancies.

Justice Jargot said she did not accept the FWO’s submission that the conduct of Hutchison was irrelevant to the assessment of penalty.

“HPA’s conduct is an essential part of the context within which the MUA’s contravening conduct took place,’’ she said.

“It is relevant that the MUA considered that HPA was in breach of the enterprise agreement by making employees redundant without complying with its obligations to consult both employees specifically and the MUA.”

She said she accepted she should not attempt to determine whether Hutchison, in fact, was acting unlawfully when it made employees redundant via text messages sent at around 11.30pm on August 6 2015.

“But 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,’’ she said.

“It was a view which was reasonably open given the circumstances. To the extent that the MUA’s view concerned the illegality of HPA’s conduct, it is a view which, at least to the extent of there being an arguable case, this Court must have shared given the grant of the interlocutory orders on 13 August 2015. This is not to condone or excuse the MUA’s unlawful conduct. Nor does it involve any moral judgment of HPA. It is to place the MUA’s conduct in the context in which the conduct occurred, which is always necessary for the determination of penalty.”

She rejected the compensation bid, finding that Hutchison was a multinational company “well able to look after its own interests”. She said there was evidence the company and union managed to resolve the dispute following conciliation.

She said the company had not claimed compensation and she did not know its position on the issue.

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