The Federal Court has imposed a penalty of $120,000 on IPM Operation and Maintenance Loy Yang Pty Ltd (IPM) for engaging in conduct in contravention of sections 45E and 45EA of the Trade Practices Act 1974 (TPA). Although IPM cooperated with the Australian Competition and Consumer Commission (ACCC), its penalty was only $5,000 less than the penalty of its uncooperative counterpart, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU).
IPM, the operator of the Loy Yang B power station in Victoria, breached the TPA by entering into an arrangement with the CEPU that included a provision preventing IPM from engaging electrical contractors who did not have an enterprise agreement with the CEPU. As soon as the ACCC advised IPM that its conduct might have breached the TPA, IPM promptly ceased to require that its electrical contractors have enterprise agreements with the CEPU. IPM cooperated with the ACCC investigation, and acknowledged liability early in the proceedings. The CEPU, on the other hand, did not.
In imposing the penalty on IPM, the Federal Court explicitly considered IPM’s cooperation, as well as the numerical parity of the penalty with the CEPU’s penalty. It decided that the $120,000 penalty was appropriate, even though the CEPU only received a $125,000 penalty. This was because:
- IPM breached two provisions of the TPA, whereas the CEPU breached only one, and
- IPM was penalised as a party principal, whereas the CEPU was penalised as an accessory.
It is also important to note that the TPA has rarely been enforced against trade unions, and the $125,000 penalty imposed against the CEPU was a record-setting penalty.
Does cooperation with the ACCC pay? It is worth noting that IPM’s penalty was nowhere near the maximum that could have been imposed ($1.5 million).
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For information regarding possible implications for your business, contact a member of the Competition & Market Regulation team.