Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union

On 1 May 2015 the Full Federal Court handed down its decision in Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union.

Note: The High Court granted special leave to appeal the Federal Court decision; subsequently the High Court overturned the decision of the Federal Court, finding that the Barbaro principles did not apply in relation to submission of agreed penalties in civil cases.

See: Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate; Construction, Forestry, Mining and Energy Union v Director, Fair Work Building Industry Inspectorate [2015] HCA 46 (2015) ALR 476 (9 December 2015)

The primary issue dealt with by the Court related to joint submissions as to pecuniary penalties. In Barbaro (Barbaro v The Queen [2014] HCA 2; (2014) 305 ALR 323), the High Court held that in criminal sentencing proceedings, the prosecution should not nominate a sentencing result or range. In this case the Federal Court considered whether or not the decision in Barbaro should be applied regarding the penalties the parties had agreed. The Court concluded the reasoning in Barbaro should apply to this case and that therefore they should not have any regard to the figures agreed by the parties in relation to penalties, 'other than to the extent that the agreement demonstrates a degree of remorse and/or cooperation on the part of the respondent' (para 2).

Although this case did not involve the ACCC, the ACCC was permitted an appeareance in this case; the decision has implications for the common practice of the ACCC to submit agreed penalties after cooperation and negotiation with parties that are the subject of civil prosecutions under the CCA.

Director, Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCAFC 59
Justices Dowsett, Greenwood and Wigney JJ (1 May 2015)

Special leave to appeal to the High Court was granted on 18 June 2015

• Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Ors [2015] HCATrans 149 (at Jade)
• Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate & Ors [2015] HCATrans 149 (at AustLII)

Addisons

• Sarah Andrews and Rachel White, 'Let judges be judges: The Federal Court asserts its ultimate discretion in determining pecuniary penalties' (Addisons, Focus Papers, 13 May 2015)

Corrs Chambers Westgarth

• Ayman Guirguis, Richard Filtcroft and Asa Lam, 'Where to now for Agreed Civil Penalty Outcomes following the CFMEU and Barbaro Decisions' (Corrs Chambers Westgarth, 'Corrs in Brief', 8 May 2015)
  Authors consider that the decision 'creates significant uncertainty for regulators and potential respondents alike' and is 'likely to lead to a significant chilling effect on the preparedness of parties to seek to resolve, rather than to contest, matters'.

DLA Piper

• Belinda Randall, 'Federal Court Changes the Playing Field on ‘Agreed’ Civil Penalties in Regulatory Proceedings' (DLA Piper, JDSupra, 7 May 2015)

Gilbert + Tobin

• Gilbert + Tobin, 'No Deal! Director v CFMEU and the future of negotiated resolutions in ACCC penalty proceedings' (Updates in Competition + Regulation, May 2015)

Herbert Smith Freehills

• Chris Jose, Andrew Eastwood, Paul Hughes, Jeremy Birch and Felicity Lee, 'Federal Court delivers a blow to agreed outcomes in civil penalty proceedings' (Herbert Smith Freehills Legal Briefing, 4 May 2015)

Johnson Winter & Slattery

• Sat Katdare & Wolfgant Hellman, 'Over 20 years of jurisprudence on “agreed penalties” overturned!' (Johnson Winter & Slattery, May 2015)

King&Wood Mallesons

• Peta Stevenson and Trish Henry, 'Full Federal Court restates position on use of agreed penalties' (King&Wood Mallesons Insights, 4 May 2015)
• Peta Stevenson, 'Full Court Rules Against Agreed Penalties' (King&Wood Mallesons, In Competition, 1 May 2015)

Lander and Rogers

• Calum Henderson, Scott Traeger and Caroline Walker, 'Unsettling: Federal Court rejects propriety of agreed civil penalty submissions' (Lander & Rogers, Competition Law update, 12 May 2015)

Commentary

Julie Clarke, The Federal Court of Australia rules against submissions on agreed penalties (Fair Work Building Industry Inspectorate / Construction, Forestry, Mining and Energy Union), e-Competitions Bulletin June 2015, Art. N° 73596

Media

John Durie, 'Ruling upsets agreed settlements applecart' (The Australian, 4 May 2015)

Click here for Full Federal Court decision from AustLII

Click here for Full Federal Court decision from Jade