Federal Court imposes penalties totalling $70,000 on Company for failing to consult
Facts
In a recent Federal Court decision, the court imposed two $35,000 penalties on Airservices Australia (Airservices) for contravening section 50 of the Fair Work Act 2009 (Cth) (the Act) due to Airservices failing to comply with consultation and other obligations in their enterprise agreement.
The issue arose in the context of a dispute between the Civil Air Operations Officers’ Association of Australia and Airservices around the implementation of a remote overnight arrival and departure service for the Rockhampton/Mackay sector (Service) by air traffic controllers at Cairns.
One of the contraventions of s. 50 of the Act arose as a consequence of Airservices developing a plan for the Service without fulfilling consultation obligations required by the enterprise agreement.
Another s. 50 contravention was due to Airservices’ non-compliance with consultation obligations under the enterprise agreement relating to roster changes.
The parties accepted the contraventions arose out of a single course of conduct and due to s. 557(1) of the Act, constituted a single breach of s. 50.
Seriousness of the contraventions
Regarding the seriousness of the contraventions, the court, in another case involving a predecessor of the applicable enterprise agreement, observed that consultation is a substantive and meaningful obligation of real industrial importance. The court in the present case commented that such an “observation may be regarded as applicable generally to consultation obligations because of the inherent benefits which flow from an employer consulting with those of its employees likely to be adversely affected by a prospective decision.”
It was held, “…Airservices’ failure to consult was caused, at least in part, by its failure to appreciate the importance of the consultation obligations imposed upon it and the importance of its compliance with those obligations.”
The judge in the case further stated, “In my view, Airservices’ conduct demonstrated that it was prepared to put at risk the benefit of consultation for its employees in order to pursue a commercial benefit for itself. Airservices’ preparedness to put its capacity to meet its consultation obligations at risk is demonstrative of an indifference to those obligations, or in other words, a failure to properly appreciate the importance of the consultation obligations and the significant likely prejudice for affected employees should Airservices fail to comply with them.”
It was held the contraventions, whilst not wilful, were “deliberate and brought about by an irresponsible attitude to compliance with the consultation obligations in the Enterprise Agreement.” Accordingly, the contraventions were serious.
Airservices’ circumstances
Regarding Airservices’ circumstances that supported imposing substantial penalties, the court noted:
- the substantial concern due to Airservices having on repeated occasions contravened its consultation obligations;
- the involvement of senior management in the contraventions; and
- Airservices’ size and capacity to pay in the context of needing to ensure “the penalties have a sting sufficient to meet the level of specific deterrence required”.
General deterrence
In considering general deterrence, the court acknowledged there is real potential for other employers to ignore their consultation obligations under EAs when it is commercially inconvenient. The penalty therefore should be sufficiently high so as to deter other employers from engaging in similar contravening conduct.
Key take-away
This case is an important reminder for employers to be aware of and follow their consultation obligations in their enterprise agreements. As this case demonstrates, the failure to do so may lead to the imposition of significant penalties.
If you would like more information about the case, please contact our office on +61 2 9233 3989.
National Workplace Lawyers
Note — this is for information purposes only and does not purport to be comprehensive or to render legal advice.
16 March 2023 back to news feed | back to top