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Criminal Sentencing and Civil Penalties – A different Approach

When a person is sentenced for a criminal offence, there is generally a range of possible penalties that can be imposed. As a general proposition, the more serious penalties – such as imprisonment, or longer prison sentences – are only imposed where the accused’s conduct was at the most serious end of the range of misconduct. This approach broadly fits the well-known expression that ‘the punishment should fit the crime’.

A recent High Court decision – delivered on 13 April – has highlighted a subtle but important distinction between how criminal sentencing occurs; and how civil penalties are imposed under, at least, the Fair Work Act (‘FWA’).

In the case, the Construction, Forestry, Maritime, Mining and Energy Union (‘CFMMEU’) and one of its delegates were found to have contravened a civil penalty provision under the FWA for wrongfully telling subcontractors on a particular building site that they could not work on the job unless they joined the CFMMEU. The trial judge imposed the maximum penalty available for a single contravention. That was overturned on appeal when the Full Court decided the penalty was disproportionate to the nature, gravity and seriousness of the contraventions and imposed reduced penalties. The Full Court held it was not open to the trial judge to impose maximum penalties in those circumstances.

The High Court said the Full Court was wrong on that last point. The trial judge imposed maximum penalties taking into account a long history of the CFMMEU breaching the FWA in pursuit of its ‘no ticket, no job’ policy – which was unlawful under the FWA. The High Court said, unanimously, that in civil penalty proceedings it was not the case that the maximum penalty had to be reserved for only the most serious cases. Rather, the major aim of FWA civil penalties was to promote compliance with the act by deterring future non-compliance; and given the prior history of CFMMEU non-compliance, it was reasonable (and open to the trial judge) to impose maximum penalties with a view to making it too expensive for the CFMMEU to continue its unlawful behaviour. The original, maximum, penalties were reinstated.

The nub of the distinction is probably this: criminal sentencing balances a range of factors, including deterrence, rehabilitation, social utility and the like; but deterrence is a much more dominant factor in civil penalty proceedings under the FWA. It suggests a person or enterprise found to have contravened a FWA civil penalty provision can’t necessarily expect that a significant – or even a maximum – penalty will not be imposed.

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