Secretary, Department of Education v The Australian Education Union New South Wales Teachers Federation (NSWTF) Branch (No 2)

By amended summons filed on 3 June 2022, the plaintiff, the Secretary of the Department of Education (the prosecutor), seeks orders which relevantly include the imposition of a monetary penalty on the defendant, The Australian Education Union New South Wales Teachers Federation Branch (the Federation), for alleged breaches of orders made by Commissioner O’Sullivan of the Industrial Relations Commission (the Commission) on 29 November 2021 to restrain the Federation and its members from taking industrial action.

All references to legislation in these reasons are, unless otherwise indicated, references to the Industrial Relations Act 1996 (NSW) (the Act).

The Federation has about 67,000 members, who include 39,000 permanent full-time teachers, about 4,000 temporary teachers, 6,000 casual and unemployed teachers and 6,000 TAFE teachers.

Its rates for full-time members are set out in the table below:

The rates for casual, part-time, retired and student teachers are lower than those in the table.

Prior to 25 November 2021, the Federation commenced its “More than Thanks Campaign” regarding pay and other conditions of employment of teachers engaged in public education in New South Wales. The prosecutor and the Federation conducted negotiations concerning a new Crown Employees (Teachers in Schools and Related Employees) Salaries and Conditions Award (the award).

On 25 November 2021, the prosecutor notified the Commission of an industrial dispute pursuant to s 130 of the Act. The prosecutor applied to the Commission for orders pursuant to s 137 of the Act.

On 27 November 2021, the Federation’s State Council met and directed all of its members to strike for 24 hours on Tuesday 7 December 2021.

On 29 November 2021, the dispute came before Commissioner O’Sullivan for arbitration. At the conclusion of the arbitration, the Commission made the following orders (the dispute orders) pursuant to s 137 of the Act:

Directions were also made to require the Federation to notify its representatives and members of the dispute orders.

It was not disputed that, at the time the dispute orders were made, it was expected that the Commission would hear an application for a new award for teachers and related staff in early May 2022.

On 3 December 2021, the prosecutor filed a summons in this Court seeking orders to issue a summons to show cause. On that day, Dhanji J granted leave for the show cause summons to be issued and made it returnable on 6 December 2021 (the 2021 proceedings).

On 7 December 2021, strike action by the Federation’s members took place throughout New South Wales. On 9 December 2021, the prosecutor filed an amended summons in the 2021 proceedings, seeking the imposition of a monetary penalty against the Federation. The application was heard by Walton J on 16 December 2021. On 14 March 2022, his Honour declared that the Federation had contravened the dispute orders as alleged and imposed a penalty of $30,000 on the Federation: Secretary, NSW Department of Education v The Australian Education Union NSW Teachers Federation (NSWTF) Branch [2022] NSWSC 263 (The First Teachers Case).

On 19 February 2022, the Federation wrote to the Premier of New South Wales informing him that its State Council had resolved to defer industrial action during term 1 of 2022 and sought to enter into a four-week period of negotiations.

On 19 March 2022, the Federation issued a member alert which said in part:

On 25 March 2022, David Withey, Chief Operating Officer for the Department of Education issued an email to school principals which set out focus areas for important changes including the School Success Model for literacy and numeracy. The email directed principals to the “Staff Noticeboard” (on the Department’s website) for further information.

On 7 April 2022, the Minister for Education and Early Learning, the Honourable Sarah Mitchell MLC (the Minister), wrote to the Federation, referring to its letter of 19 February 2022. She referred to the dispute orders and sought confirmation that the Federation and its members would comply with them. She also said:

The first day of Term 2 for public schools in New South Wales was 26 April 2022. The students returned to school on 27 April 2022.

On 26 April 2022, the State Executive of the Federation issued a member alert directing its members to strike for 24 hours on Wednesday 4 May 2022 (the strike) and placing an immediate ban on all new Government (Department and NSW Education Standards Authority) policies and initiatives due for implementation on and from day 1 of term 2 (the ban). It also authorised its members to walk out of a school as long as a Government Member of Parliament was in the school (the walk-outs). The explanation given in the alert for this action was as follows:

Also on 26 April 2022, the Federation published an article in its Educational Journal entitled “Teachers to go on strike on May 4”, which said:

On 27 April 2022, the Department of Education sent an email to all principals. It referred to the proposed strike action on 4 May 2022 and said that industrial action in the form of the 24-hour strike would be deemed to be unauthorised absence and therefore would be unpaid. It informed the principals that arrangements would need to be made to supervise students (and inform parents and caregivers of such arrangements), report industrial action and make deductions from payroll.

On 28 April 2022, the Federation issued a further member alert regarding the ban and the strike.

On 28 April 2022, a representative of the prosecutor wrote to the Federation setting out the Federation’s proposed industrial action (the strike, the ban and the walk-outs) and the dispute orders. The prosecutor continued:

The Federation responded to this letter on 10 May 2022 (see below).

On 29 April 2022, the prosecutor issued an email to all principals concerning the imminent strike. She referred to the need to minimise disruption in schools arising from the strike. She also said:

On 2 May 2022, a representative of the Federation wrote to Transport NSW to inform it that the Federation expected between 500 and 800 teachers to travel by train on 4 May 2022 from Wollongong to Town Hall station to arrive by 9.30am. The representative asked whether a further service could be put on to accommodate these teachers.

On 3 May 2022, the Honourable Stuart Ayres MP visited Jamison High School. Between 9 and 9.30am, 43 of the Federation’s members (56.8% of the teaching staff) walked out as a result. Also on that day, the Honourable Melinda Pavey MP attended Bellingen High School for the school assembly at 10am. When Ms Pavey began to address the assembly, about 12 members of the Federation, representing 25% of teaching staff, walked out and remained absent for a period from 10.10am until 10.40am.

On 3 May 2022, the prosecutor announced the deferral of the application for a new award in the Commission (which was listed for hearing the following week). On 4 May 2022, the Chief Commissioner of the Commission deferred the application for a new award until October 2022.

On 3 May 2022, the Federation issued a further member alert which said:

On 4 May 2022, members of the Federation engaged in a 24-hour strike and attended multiple rallies across New South Wales, which were organised by the Federation. The strike received widespread media coverage. The Federation’s website contained the following article:

Data collected from principals of the 2,219 public schools in New South Wales recorded that 45,611 of the Federation’s members (which comprised 71.11% of the teaching service) participated in the strike on 4 May 2022. About 452 public schools were “non-operational” as staff numbers were insufficient to provide minimal supervision. Although most of the schools were “operational”, about 709,903 students (89.88% of students) were absent from school. Only 79,942 students attended school on 4 May 2022.

On 5 May 2022, the Minister visited three schools in the Central Coast area. Members of the Federation walked out, as set out in the table below.

On 7 May 2022, the Federation’s State Council suspended the ban. The Federation’s General Secretary informed the Premier of this decision on 9 May 2022. On 10 May 2022, the General Secretary responded to the Department’s letter dated 28 April 2022 and informed it that the ban had been suspended.

On 26 May 2022, the Minister visited Leeton. Members of the Federation walked out, as set out in the table below.

After the Minister’s visit to Leeton High School, the following was published on the Department’s “Sentral” school management system, which the Department uses for administration, attendance, reporting and communications:

On 31 May 2022, the prosecutor wrote to the Federation asking that it confirm in writing whether the walk out direction continued to apply. On 3 June 2022, the Federation’s General Secretary responded by saying that the Federation had made no such direction to its members.

Section 6(1) of the Act defines industrial matters, relevantly, as matters affecting the rights and duties of employers and employees in any industry. The examples given in s 6(2) include remuneration and conditions of work.

Chapter 2 of the Act provides for awards. Section 10 confers power on the Commission to make awards. Under s 12(3), an award is binding on industrial organisations that were party to the making of the award.

Chapter 3 of the Act makes provision for industrial disputes. Section 130 provides that certain persons, including an employer or an industrial organisation of employees may notify the Commission of an industrial dispute. Section 133 obliges the Commission to attempt to resolve an industrial dispute by conciliation. However, if an industrial dispute is not resolved by conciliation, the Commission is required, by s 135, to deal with the dispute by arbitration. Section 136(1) provides that, in arbitration proceedings, the Commission may make a dispute order under Part 2.

Section 137, which is in Part 2 of Chapter 3, provides that the dispute orders which the Commission may make include an order that a person cease or refrain from taking industrial action.

The term “industrial action” is defined in the Dictionary to the Act as follows:

Under s 138(1), a dispute order may be made only against, relevantly, a party to the industrial dispute.

This Court’s power with respect to alleged contraventions of dispute orders arises from s 139. The Court, “on application, must deal expeditiously with an alleged contravention of a dispute order”: s 139(1). It is required, before dealing with the alleged contravention, to summon the person to show cause why the Court should not take action for the contravention: s 139(2). Section 139(3) sets out what the Court may do, after hearing any person who answered the summons, including the power to impose a penalty on an industrial organisation as provided by s 139(4). Section 139(4) provides:

It was common ground that, having regard to the penalty imposed by Walton J in The First Teachers Case, s 139(4)(b) applied.

The Explanatory Note to the Bill which became the Act said, of present relevance:

The Industrial Relations (Public Sector Conditions of Employment) Regulation 2014 (NSW) (the Regulation), up until its amendment on 24 June 2022, relevantly provided:

On 24 June 2022, the Regulation was amended to change the cap from 2.5% to 3%.

In the amended summons, the prosecutor alleged four contraventions. The first alleged contribution was pleaded as follows:

Although paragraph 6 of the summons (extracted above) referred to 19 March 2022, the prosecutor did not rely on that date. Rather, Mr Taylor SC, who appeared with Mr Fagir on behalf of the prosecutor, contended that the contravention had started on the date of the first particular, 26 April 2022. Mr Crawshaw SC, who appeared with Mr Boncardo on behalf of the Federation, accepted that the Federation had understood that to be the case.

The particulars of the first allegation are set out in the following table.

The second alleged contravention was pleaded as follows

The particulars of the second allegation were as follows:

The third alleged contravention was alleged as follows:

The particulars of the third allegation were the member alerts which the Federation issued on 26 April 2022 and 28 April 2022 concerning the ban and the suspension of the ban on 7 May 2022 which the Federation notified by letter to the Premier on 9 May 2022.

The fourth alleged contravention was pleaded as follows:

The particulars of the fourth allegation comprised the walk-outs during school visits by Government MPs referred to above.

The Federation argued, on the same basis as was argued before Walton J in The First Teachers Case, that the orders were invalid. His Honour rejected the argument at [212]-[250]. Mr Crawshaw put the argument formally to protect the Federation’s rights on any appeal. I have been informed by the parties that Walton J’s judgment in The First Teachers Case had not been the subject of appeal. Mr Crawshaw accepted that I need not address this argument as it had been determined at first instance by Walton J.

Subject to one matter, the Federation accepted that the prosecutor had proved the contraventions alleged and that this Court would impose a penalty on it pursuant to s 139(3) and (4)(b). The one matter was that the Federation argued that, as an employee organisation, it could not take industrial action itself, but that such action could only be taken by its members. Rather it could only organise industrial action. I do not consider it to be necessary to determine this question since s 139(3) empowers the Court to impose a penalty on an industrial organisation. The dispute orders include Order A4, which is an ancillary order which prohibits conduct that would amount to a breach of Order A1. Further, there is no basis on which, in respect of industrial action which has been directed by the industrial organisation (as in the present case), the industrial organisation would be entitled to a reduction in penalty because it was not capable of engaging in industrial action itself, but only through its members.

The starting point in the imposition of a penalty is to identify the maximum penalty. In the context of sentencing for criminal offences, the High Court (Gleeson CJ, Gummow, Hayne and Callinan JJ) said in Markarian v The Queen (2005) 228 CLR 357; [ 2005] HCA 25 at [31]:

This passage was cited with approval by the plurality (Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ) in Australian Building and Construction Commissioner v Pattinson [2022] HCA 13; (2022) 96 ALJR 426 (Pattinson) at [52] in the context of civil penalties under the Fair Work Act 2009 (Cth). The High Court decided in Pattinson that the maximum penalty has a different operation in civil penalty proceedings (where the purposes of imposing a penalty are limited to specific and general deterrence) than in criminal proceedings (where other purposes, punishment or retribution, denunciation, rehabilitation also play a part). Importantly, the High Court held that the concept of proportionality, which prevents a court from imposing a sentence near or at the maximum except in cases of greatest objective seriousness, has no application when imposing a civil penalty. I will return to the effect of Pattinson after having addressed the maximum penalty in the present case.

There was a significant dispute about the maximum penalty to be applied in the present case. The High Court in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482; [2015] HCA 46 (The Fair Work Building Case) at [46]-[59] held that, unlike in criminal sentencing, the Court can, in a civil penalty proceeding, receive and, if appropriate, accept an agreed or other submission concerning the amount of a pecuniary penalty to be imposed.

Mr Taylor contended that the maximum penalty was $540,000 (calculated as set out below) and that the penalties that ought to be imposed were as follows.

The number of days for the first alleged contravention was calculated from the time of the first breach, 26 April 2022, to the date on which the dispute orders expired, 31 May 2022.

Mr Crawshaw submitted that the separate penalties ought not be imposed in respect of each of the four alleged contraventions because all the conduct was subsumed in the first contravention, which itself amounted to a course of conduct. He submitted that the maximum penalty was $100,000, being $20,000 for the first day (26 April 2022) and then $10,000 for each of the further eight days: 28 April 2022, 2 May 2022, 3 May 2022, 4 May 2022, 5 May 2022, 6 May 2022, 7 May 2022 and 26 May 2022. He contended that it would be wrong to count the period from 26 April 2022 to 26 May 2022 as a continuous period for two reasons. First, he submitted that the ban was not shown to have any effect and can, therefore, be disregarded. Second, he submitted that the prosecutor had not alleged that the course of conduct was continuous; rather, the prosecutor had elected to particularise discrete conduct in support of the alleged contraventions and should be held to the terms of the amended summons.

I accept Mr Crawshaw’s pleading argument. The amended summons does not, in terms, allege that the contraventions were continuous. Instead, the prosecutor has chosen to allege particular contraventions which are said to have been committed on particular days. It was necessary for the prosecutor to alert the Federation to its contention that the contraventions were continuous to avoid the Federation being taken by surprise. I consider that the prosecutor ought be held to the pleaded contraventions.

When I raised the issue of identification of the maximum penalty at the during final address, Mr Taylor sought leave to amend the amended summons to allege that the contraventions were continuous. I refused leave. The effect of allowing such amendment would have been to expand the allegations beyond the particulars and occasion a denial of procedural fairness to the Federation, which came to meet a case based on particularised incidents of contravention rather than an allegation of continuous contravention which started on a particular date (26 April 2022) and ended on the date of the last contravention (26 May 2022). This would, of itself, have caused prejudice to the Federation. The effect of an allegation of continuous contraventions would also have been to increase the maximum penalty from $100,000 (based on the discrete contraventions over a period of 9 days) to $360,000 (over a period of 35 days), even if the pleaded contraventions were regarded as aspects of the same contravention. I considered that it would have been unfair to allow the prosecutor to allege a continuous contravention, having regard to its pleadings. For these reasons, I refused the prosecutor’s application for leave to amend, which was made when the proceedings were all but over, to allege a continuous contravention.

It is necessary to turn to the Federation’s argument that all of the contraventions amount to aspects of a course of conduct and ought, therefore, be treated as a single contravention. As Bathurst CJ (Gleeson and Simpson JJA agreeing) explained in Public Service Association and Professional Officers’ Association Amalgamated Union of New South Wales v Industrial Relations Secretary (2018) 96 NSWLR 762; [2018] NSWCA 39 at [149], where separate acts amount to a single course of conduct which contravenes dispute orders, it is appropriate to treat what occurred as a single contravention of dispute orders. In the present case, the Federation’s breaches of A1 and A4 of the dispute orders were interrelated. Although organising the strike action, the ban and the walk-outs comprised separate acts, they were part of a larger campaign designed to enlist support for the cause of the Federation’s members. So much would appear to have been recognised by the prosecutor in the pleading of the first allegation, which is drafted on the basis that the three arms of attack amount to a single contravention, albeit one with several particulars. This conclusion is consistent with the approach taken by Walton J in The First Teachers Case at [329]-[338].

Mr Taylor conceded that if I accepted Mr Crawshaw’s submission that the contravening conduct should be treated as a course of conduct, the maximum penalty would be $360,000 on the basis of his calculation for the alleged first contravention (which depended on my viewing the conduct as continuing for the period from 26 April 2022 to 26 May 2022 and also my regarding the pleading of the alleged contraventions as sufficient for this purpose).

It follows from my finding that the alleged contraventions should be treated as a single course of conduct that there is only one maximum penalty to be applied. For the reasons given above, the maximum penalty is $100,000 because of the way the prosecutor has pleaded the contraventions.

Mr Crawshaw submitted that Pattinson could be distinguished because there was a distinction between the Fair Work Act and the Act. He referred to the Explanatory Note extracted above in support of his submission that the statutes were not analogous since punishment was relevant to the imposition of a civil penalty under the Act but had been held to be irrelevant to the imposition of such a penalty under the Fair Work Act: Pattinson at [39].

Apart from referring to the Explanatory Note, Mr Crawshaw relied on what Walton J said in Secretary of the Ministry of Health v The New South Wales Nurses and Midwives’ Association [2022] NSWSC 1178 (The Nurses Case), addressed below, as a basis for moderating what was said in Pattinson when fixing the penalty in the present case.

In Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (2020) 271 CLR 495; [2020] HCA 29, Gageler J said of Explanatory Memoranda (the Commonwealth equivalent of an Explanatory Note):

The difficulty with the text of the Explanatory Note is that there is nothing in it which would give the reader any confidence that the author had considered the various purposes of imposing civil penalties and nominated punishment as the only one worth mentioning. Rather, the text tends to indicate that the author simply wished to make the point that, generally speaking, the purpose of a “penalty” is, as the language would tend to indicate, to punish. Further, there is no basis for supposing that the author was acquainted with the line of authority which was upheld by the High Court in Pattinson which established that the purposes of civil penalties were to deter the contravenor (specific deterrence) and others (general deterrence) from repeating the contravening conduct. Nor is there anything in the text of the Act to indicate that the purpose of the imposition of civil penalties was to punish the contravenor.

Further, although a penalty is apt to be experienced by the person on whom or which it is imposed as punishment, it does not follow that punishment is its purpose. As the High Court said in Rich v Australian Securities and Investments Commission (2004) 220 CLR 129; [2004] HCA 42 at [30]-[35] (Gleeson CJ, Gummow, Hayne, Callinan and Heydon JJ), proceedings which have a protective purpose may nonetheless be punitive for the purposes of the privilege against exposure to a penalty, although their purpose is not to punish. The starting premise of mutual exclusivity (between the two concepts of punishment and protection of the public) was found to be erroneous.

For these reasons, I am not persuaded that the text of the Explanatory Note diminishes the extent to which the principles in Pattinson apply in the present case.

In The First Teachers Case (which was decided before Pattinson), Walton J considered and applied the principles enunciated in Pattinson v Australian Building and Construction Commissioner (2020) 282 FCR 580; [2020] FCAFC 177 (Pattinson FFC) on the basis that they were apposite to the imposition of a penalty under s 139 of the Act. Although Pattinson FFC was overturned by the High Court in Pattinson, I understand from Walton J’s reasons in The First Teachers Case that his Honour regarded the principles which applied to the imposition of civil penalties under the Fair Work Act as being applicable to the imposition of civil penalties under the Act, having regard to the analogies between the Commonwealth and New South Wales systems.

However, in The Nurses Case, Walton J was required to consider the applicability of Pattinson (which was decided on 13 April 2022) to the Act. His Honour found there to be some differences between the statutory context of the Fair Work Act and the Act such that the principles in Pattinson were not applicable without qualification. His Honour at [728] said:

Despite the differences, his Honour held that deterrence was an important consideration under both regimes and that Pattinson was generally applicable, with some qualifications. I consider that the matters raised by Walton J in [733] (extracted above) are as germane in the present case as they were in The First Teachers Case. As his Honour observed, the “cost of doing business” does not have any particular meaning in the present context. The Federation, by breaching the dispute orders, can be taken to have been responding to the concerns of its members. These concerns, which I accept to be genuinely felt by the Federation’s members (although it is not for this Court to opine as to their merits), include concerns about the reduction in the value of their remuneration, having regard to the cap on salary increases which is less than the inflation rate, the consequential loss of teachers to the profession and the prospect that people who might once have chosen to become teachers will not do so, leading to shortages in the availability of teachers. Such concerns are amply demonstrated by the content of the member alerts which the Federation sent to its members.

For these reasons, the following passage from The Fair Work Building Case, citing with approval French J’s judgment in Trade Practices Commission v CSR Ltd [1991] ATPR 41-076 at 52,152 (also approved in Pattinson at [16]), would appear to be inapposite in a case such as the present:

It is common ground that a fine is required to be imposed on the Federation for its admitted contravening conduct. Such fine ought be set at an appropriate level having regard to the particular purposes of general and specific deterrence, as well as, to borrow Walton J’s words in [728] of The Nurses Case Case, “the important purpose of helping to resolve the industrial dispute between the parties and promoting the system of conciliation and arbitration established by the Act.”

Any fine I impose must be paid by the Federation, which in turn is funded by its members. Based on the published rates for full-time members (set out above), the Federation’s annual revenue (from that source alone) is $37,543,360. As noted above, because the prosecutor regarded the day taken by those who engaged in strike action on 4 May 2022 as unpaid leave, the participants in the strike must be regarded as having been willing to sacrifice a day’s pay for the purpose of advancing their industrial concerns by breaching the dispute orders in that way.

Having regard to this matter, the number of the Federation’s members and the fact that the Federation fees are paid fortnightly, the impact on individual members of a fine imposed on the Federation, even at the level of the maximum penalty, is unlikely to be oppressive, or to change the members’ minds about the legitimacy of the grievances they sought to advance by participating in the strike which the Federation organised on their behalf. Parliament can be taken to have appreciated these matters when setting the maximum penalties in s 139(4) of the Act. Nor can it be expected to be oppressive to the Federation in the present case. It does not follow that the maximum penalty should be imposed on a well-resourced employee organisation such as the Federation (which is only well-resourced because of the number of its members). Indeed, Mr Taylor did not contend that the maximum penalty would be appropriate in the present case.

The maximum penalty is regarded as an indication of the seriousness with which Parliament regards the proscribed conduct: Camilleri’s Stock Feeds Pty Ltd v Environment Protection Authority (1993) 32 NSWLR 683 at 698 (Kirby P, Campbell and James JJ agreeing). It is significant that the maximum penalty depends not only on whether there have been prior contraventions, but also (and more significantly in mathematical terms) on the number of days over which the breaches continue. Thus, the duration of the breaches of dispute orders would appear to be regarded as more significant than the nature of the breaches of dispute orders. This can be taken to reflect a legislative concern that long-running industrial action in breach of dispute orders is more harmful to the system of conciliation and arbitration sanctioned by the Act than, say, a breach that does not extend beyond a day.

There are several formulations derived from the authorities which precede Pattinson as to the matters which are to be taken into account in determining the amount of a penalty to be imposed. However, the High Court in Pattinson drew a distinction between the purposes of imposing sentences for criminal conduct (which include punishment, retribution, denunciation, rehabilitation as well as general and specific deterrence) and the purposes of imposing civil penalties, which were limited to specific and general deterrence. In Pattinson, other concepts germane to criminal sentencing, including the importance of the objective seriousness of the offence to the concept of proportionality, as considered in Veen v The Queen (No 2) (1988) 164 CLR 465; [1988] HCA 14, and the principle that the punishment should fit the crime, were held to be inapt to the imposition of civil penalties: Pattinson at [39]. Nonetheless other concepts, such as totality, parity and course of conduct were held to be potentially relevant in an assessment of what is reasonably required to deter further contraventions: Pattinson at [45]. It is, accordingly, necessary to address those matters which are particularly relevant to specific and general deterrence, having regard to the importance of those purposes.

Whether a contravenor will contravene again requires some consideration of past conduct as well as an assessment of the contravenor’s attitude to the subject contravention. Mr Taylor relied on contraventions by the Federation in the period leading up to 2012 as evidencing a tendency to breach the Commission’s orders. Having regard to the substantial passage of time between contraventions in and prior to 2012 and the contraventions which were addressed in The First Teachers Case, I do not regard the earlier (up to 2012) contraventions as materially bearing on whether the Federation is likely to contravene future dispute orders made by the Commission.

However, I accept the prosecutor’s submission that the Federation has expressed neither remorse nor contrition and that these matters are relevant to specific deterrence.

Mr Crawshaw submitted that I ought not separately take into account the contraventions which were the subject of The First Teachers Case because those contraventions had already been factored into the appropriate maximum penalty (which was accepted to be the maximum penalty in s 139(4)(b), rather than the lower one in s 139(4)(a)). However, he ultimately accepted that it was necessary for the penalty which I impose for the present contravening conduct to be greater than that imposed by Walton J in The First Teachers Case, it being self-evident that the penalty imposed by his Honour was insufficient to deter the Federation from committing further breaches of the dispute orders.

Mr Crawshaw submitted that I could take into account the motivation of the Federation and its members (to advance the concerns which I have identified above) which was wholly unlike the conduct of the union in Pattinson (in which the union unlawfully excluded non-union members from building sites). I consider the motivation of the Federation and its members to be part of the circumstances surrounding the contravening conduct. The scheme of the Act is, however, designed to encourage employers, such as the Department, and employee organisations, such as the Federation, to resolve their disputes by conciliation and arbitration rather than by industrial action in breach of dispute orders. I understood it to be common ground that the capacity of the Commission to resolve the dispute to the satisfaction of the Federation and its members has been highly constrained by the Regulation (which, until recently, imposed a 2.5% cap on salary increases, which was subsequently increased to 3%). This neither justifies, nor excuses, the breaches of the dispute orders; it does however serve to explain the breaches of the dispute orders.

Mr Crawshaw submitted that I ought take into account that to withdraw one’s labour by striking was an internationally recognised human right. It was not suggested that the Act was, by reason of any inconsistency with international law, invalid or unconstitutional. Whether or not there is such an internationally recognised human right, I am bound by the terms of the Act, which permits dispute orders to be made which prohibit industrial action, including strikes. The dispute orders in the present case prohibited strike action. They were plainly and deliberately breached.

It is important to set the fine at a level such that it will deter not only the Federation but also others who are considering breaching dispute orders and to encourage such organisations to resolve industrial disputes in accordance with the conciliation and arbitration methods provided for in the Act. This cannot be a matter of science or calculation. The maximum penalty is an important yardstick.

While, as the High Court has said in Pattinson, “retribution” is irrelevant when imposing a civil penalty order, it is important to note that the concept of general deterrence incorporates the purpose of maintaining confidence in the relevant system: the system of conciliation and arbitration for the purposes of resolving industrial disputes: see, in the criminal context, Markarian v The Queen, at [82]. Passages to similar effect in The Nurses Case are cited above. Further, the concept of general deterrence includes the importance of the state’s obligation “to express the community’s disapproval of the [contravening] conduct”: Munda v Western Australia (2013) 249 CLR 600; [2013] HCA 38 (Munda) at [54] (French CJ, Hayne, Crennan, Kiefel, Gageler and Keane JJ). Although Munda involved a criminal sentence, what was involved in general deterrence was addressed. In the present case, it is necessary to record that the industrial action organised and promoted by the Federation breached the dispute orders in a material way. These breaches were inimical to the orderly conduct of the conciliation and arbitration system established by the Act.

Having regard to the matters referred to above, I make the following order: