Individuals are at risk of breaching workplace laws even if their conduct is found only to be silent encouragement of unlawful adverse action, according to the outcome of a recent Federal Circuit Court case.
In the decision of Australian Building and Construction Commissioner v Moses & Ors, the Court found that a failure by a union delegate to correct the coercive and misleading statements of a union organiser was enough to justify a finding of accessorial liability for the union delegate. This was despite the fact that there was no active or verbal encouragement or endorsement of the union organiser’s statements, but rather because of a combination of the union delegate’s knowledge of the falsehood of the union organiser’s statements and their failure to correct the statements.
At a construction site in Gladstone, Queensland a CFMEU organiser Mr Moses met with a group of Smithbridge employees who were contracted to operate the cranes onsite. During these meetings Mr Moses was accompanied by CFMEU delegate Mr Churchman who was working for the primary contractor on the worksite. During a routine pre-start daily meeting, Mr Moses asked the project manager if he could ‘speak to the boys’, Mr Moses then declared the site a CFMEU worksite and notified the Smithbridge employees they had five minutes to consider if they would join the CFMEU. Mr Moses informed the Smithbridge employees this was the only way they could continue their employment on the site. Mr Moses and Mr Churchman left the room for five minutes, then returned. Mr Moses then repeated his ultimatum and decided to give the employees 48 hours to consider if they would join the CFMEU. During these conversations, Mr Churchman did not actively say anything, but did hand out CFMEU information pamphlets and stood beside Mr Moses while he made his proposals.
Mr Moses' contraventions
At trial, the Court heard that Mr Moses made statements to the Smithbridge employees to the effect of:
- 'Smithbridge employees won't be going back to work today if they do not sign up for the CFMEU'
- '(Smithbridge employees) will not go to work unless you sign up to the union'.
It was also submitted that Mr Moses said these words repeatedly and very forcefully.
Mr Moses also asked the Smithbridge group why there were no CFMEU flags flying on the worksite cranes. When notified the Smithbridge employees did not own the cranes, Mr Moses replied with 'you better get (the flags) on there. We will be back on Friday'.
Due to the forcefulness and untruthfulness of these statements, Judge Jarrett was satisfied from these adduced statements that Mr Moses had engaged in conduct that amounted to:
- a threat of adverse action against the workers on the basis of whether they engaged in industrial activities under section 346 of the Fair Work Act; and
- false and misleading representations about an obligation to engage in industrial activity under section 349 of the Fair Work Act.
Did Mr Churchman aid Mr Moses’s contravention?
In considering whether Mr Churchman could be held liable, Judge Jarrett acknowledged that s 550 of the Fair Work Act, required a finding that:
a. Mr Churchman was, by act or omission, directly or indirectly, knowingly concerned in or party to the contravention of Mr Moses; or
b. Mr Churchman aided or abetted Mr Moses’ contraventions
Proving Mr Churchman aided Mr Moses’ contraventions was dependent on characterizing Mr Churchman’s actions as a form of encouragement. Due to the subtle nature of Mr Churchman's silence, the ABCC’s submission relied upon the Queensland Supreme Court's reasoning in R v Beck. Although this was a murder decision, the Court found similarities in the reasoning.
In Beck, the Supreme Court recognised encouragement as a failure to immediately correct another's obviously false statements and then continuing to fail to correct these statements during any of the following opportunities. Mr Churchman, admitted he knew the statements of Mr Moses were false and attempted to defend these claims by characterising the statements made by Mr Moses as separate, individual contraventions. Stemming from this, Mr Churchman believed he could not be found to be liable as the alleged encouragement occurred after each contravention.
However the Federal Circuit Court rejected this as they saw Mr Moses' statements in total as an ongoing contravention through one single course of conduct at the meeting. Therefore Mr Churchman’s encouragement could be seen as occurring during, not after, the contravention. According to Judge Jarrett, the contravention lasted from Mr Moses' initial instructions to the Smithbridge employees to join the CFMEU and concluded when he notified the group they had five minutes to consider his proposal. The contravention was the entire conversation between Mr Moses and the Smithbridge employees. Also, Judge Jarrett concluded the reason why Mr Moses and Mr Churchman left the smoko room was to allow the Smithbridge employees to consider joining the union.
Mr Churchman did not correct these statements. Instead, he allowed Mr Moses to again repeat his ultimatum, which he now clearly knew was false. These subtle acts of inaction allowed the Court toidentify Mr Churchman's behavior as encouragement.
Why is this decision significant?
This decision is very important as it extends the scope of accessorial liability previously enforced by the Court. The Court accepted that in circumstances where a person stands by silently while another makes false and coercive statements, they can be liable for accessorial liability. It means that an individual who knows the statements are false and cannot be said to be ignorant of the intention for those statements being made, has a positive duty to correct the statements or else face the risk of penalties. Mr Churchman’s defenses of claiming to not know Mr. Moses’ intention and claiming to have not encouraged Mr. Moses, were both categorically rejected. Bear in mind, this decision could be appealed at a later date.
Aside from the extension of accessorial liability, this decision is another indication of the ABCC's preparedness to sue individuals on construction sites for any involvement in unlawful behaviour.
Authors: Declan Johnston & Michael Selinger
Charles Power, Partner
T: +61 3 9321 9942
Stephen Trew, Managing Partner, Sydney
T: +61 2 8083 0439
Michael Selinger, Partner
T: +61 2 8083 0430
Rachel Drew, Partner
T: +61 7 3135 0617
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