Australia: Targeting unlawful picketing in Victoria - new police powers and severe fines

• Unlawful picketing is generally designed to cause significant damage to the 'target' in a relatively short span of time. As such businesses need to react swiftly with a strategic legal, commercial and practical response.
• A recent Supreme Court judgment and the passing of new legislation in Victoria show that unlawful picketers and protesters can face severe fines, criminal conviction and may be subject to police arrest and detention.
• On 12 March 2014, the Victorian Government passed the Summary Offences and Sentencing Amendment Act 2014 (Vic) (the SOSA Act), which arms Victoria police with additional powers to tackle unlawful picketing.
• Last week, the Supreme Court of Victoria handed down its penalty judgment against the Construction, Forestry, Mining and Energy Union (CFMEU) in relation to contempt of Court orders for the CFMEU’s unlawful picketing activities at Grocon construction sites in late 2012 and interferences with Grocon’s suppliers in early 2013. The CFMEU faces an unprecedented fine of $1.25 million. This decision serves as a firm reminder that courts may punish unlawful picketers severely for actions that are in contempt of court orders.

Police powers to ‘move on’ expanded  

Legislation in response to recent unlawful picketing activities

On 12 March 2014, the Victorian Government introduced new picketing laws. The Summary Offences and Sentencing Amendment Act 2014 (Vic) (SOSA Act), which will take effect on 1 September this year, expands the existing powers of Victoria Police under the Summary Offences Act 1996 (Vic) and is intended to ‘end unlawful union pickets and protester blockades that threaten to shut down businesses’.¹

The SOSA Act enacts in full the Summary Offences and Sentencing Amendment Bill 2013 (the Bill), introduced by the Victorian Government at the end of last year, which we canvassed in our previous article.²

Among the key provisions are powers extending the range of circumstances in which police can issue ‘move on’ orders to picketers and protesters. Police can now direct a person to move on from a public place where that person:

• has committed an offence in the public place within the last 12 months,
• is causing or likely to cause an undue obstruction to another person or traffic,
• is impeding or attempting to impede another person from entering or leaving premises, or
• is causing a reasonable apprehension of violence in another person.

Contravention of ‘move on orders’ – penalty and arrest 

The SOSA Act will also allow police to request the name, address and proof of identity of any person they intend to direct to ‘move on’. Failure to comply with a ‘move on’ direction or a request for name, address or proof of identity can attract a $721.80 fine (for FY 2013-2014). Further, the contravention of a ‘move on’ order may result in arrest and detention if police reasonably believe this is necessary to prevent the continuation or repetition of the offence or is in the interests of public safety.

Court’s power – ‘exclusion order’ 

The Magistrates’ Court has also been given powers to deal with unlawful picketing under the SOSA Act. On an application by the police, the Court can make an ‘exclusion order’ which bans a person from entering a public place from which they have repeatedly been directed to move on, for up to 12 months. Contravention of the order is an offence which can attract a penalty of up to two years’ imprisonment.

CFMEU faces severe fine of $1.25 million for criminal and civil contempts  

On 31 March 2014, Justice Cavanough of the Supreme Court of Victoria handed down a penalty judgment in applications brought by Grocon against the CFMEU for contempt in relation to the CFMEU’s interference with access to Grocon sites in 2012 and two related contempt matters in 2013 (Penalty Judgment).³

The CFMEU has been ordered to pay a penalty of $1.25 million. It has also been ordered to pay indemnity costs to Grocon.

Background

In August and September 2012, the CFMEU organised large numbers of people (including at least eight officials and delegates of the CFMEU, but not including Grocon's employees) to picket at a number of Grocon’s construction sites in Melbourne. Grocon responded immediately and ‘vigorously’⁴ by seeking and successfully obtaining multiple injunctions from the Supreme Court.  

As the CFMEU continued to picket at the Myer Emporium and McNab Avenue sites, Grocon made applications for contempt for breach of the Court orders. The Attorney-General for Victoria sought leave to be joined to the proceeding which was granted. In the judgment, his Honour found that all the contempt charges were made out and reserved a further hearing for penalty and costs (see related article).⁵

In August last year, his Honour made two further findings of contempt against the CFMEU for breaching restraining orders made in March 2013 which prevented the CFMEU from interfering with the supply of goods to Grocon’s sites.

Penalty Judgment

The Penalty Judgment dealt with penalties for all the abovementioned contempt charges. In summary, his Honour found that:

• contempt charges in relation to the CFMEU’s unlawful picketing activities in late 2012 were classified as criminal contempt, translating into formal criminal convictions, and the CFMEU was fined $1.15 million,
• contempt charges in relation to the CFMEU interfering with Grocon’s suppliers in early 2013 were classified as civil contempt and the CFMEU was fined $100,000, and
• the CFMEU must pay Grocon’s costs on an indemnity basis.

Criminal contempt

In finding criminal contempt, his Honour held that the CFMEU’s activities amounted to ‘perverse and obstinate resistance to authority’⁶ and involved ‘flagrant, prolonged, deliberate defiance of the orders of this Court’.⁷

His Honour observed these contempts are ‘exceptionally serious. So much so that they warrant explicit classification as criminal contempt, perhaps for the first time in the Australian industrial context’.⁸ 

Quantum of penalty

The Court, in imposing a penalty of $1.25 million, exceeded the penalties imposed in previous decisions against the CFMEU.

The CFMEU had sought that the Court be guided by prior CFMEU contempt cases in which comparatively modest amounts were awarded against it. His Honour, however, found that these cases do not establish a range that the Court should be bound by, and the criminal nature of some of these contempt charges warranted the imposition of a much more severe fine.⁹

One relevant consideration in imposing the fine was whether the CFMEU has exhibited general contrition and made a full and ample apology. His Honour observed that the ‘CFMEU initially ignored the Court. Later it contested its liability. It has made no apology. It does not claim remorse’.¹⁰ His Honour noted that whilst the lack of an apology is not an aggravating feature, it can operate to reduce a penalty, which did not occur in this matter.

Impact on employers  

The Penalty Judgment serves as a precedent that courts can impose criminal liability for non-compliance with an injunction issued in an industrial context.

The decision also highlights the importance of employers addressing unlawful picketing at the earliest stage possible so that effective remedies (such as injunctions) can be granted and if necessary, enforcement processes can follow quickly. The Penalty Judgment should provide some comfort to employers as to the seriousness with which courts view such contempts.

Guidance for employers

The key legal responses to picketing generally occur in courts, not in the Fair Work Commission (because picketing does not fall within the definition of industrial action in the Fair Work Act 2009).

Court action typically includes Supreme Court injunctions based on industrial torts, or Federal Court injunctions for secondary boycotts or coercion. These avenues for redress continue to exist and employers can take comfort from the Penalty Judgment that unlawful picketers and protesters can face severe penalties where the employer chooses to take legal action.

The police intervention contemplated under the SOSA Act, however, may assist in a faster resolution for employers as union protesters and picketers face severe penalties and consequences for their actions at a much earlier point.

In light of these legislative changes, we can assist employers in relation to the management of risks associated with pickets by:

• advising on the most appropriate and effective response strategy from a legal, commercial and industrial perspective (including the relevant causes of action available, supporting evidence required, barriers to obtaining orders, procedure, and likely costs of making the relevant application), and
• assisting in dealings with police including when to brief the police, the relevant information to provide to police and managing interactions with police.

This article was written by John Cooper, Partner, Jessica Chen, Solicitor, and Kate Wilson, Graduate, Melbourne. Herbert Smith Freehills acted for Grocon in the abovementioned proceedings.

Endnotes

1. The Hon Robert Clark MP, ‘Coalition Government to act on unlawful pickets and blockades’ (Media Release,12 December 2013)
2. New police powers to deal with pickets in Victoria.
3. Grocon Constructors (Victoria) Pty Ltd & Ors v CFMEU & Ors [2014] VSC 134
4. Ibid, at [145].
5. CFMEU liable for contempt in relation to the pickets at Grocon's construction sites last year.
6. Ibid, at [134].
7. Ibid, at [144].
8. Ibid, at [201].
9. Ibid, at [200].
10. Ibid, at [193].

More information

For information regarding possible implications for your business, please contact a member of the Employment, Pensions and Incentives Team.