2 min read

Financial penalties can be paid by individuals

The Case

Australian Building and Construction Commission (ABCC) v Construction, Forestry, Mining and Energy Union (CFMEU) & Anor


The ABCC commenced proceedings against the CFMEU and a union official, Mr Myles.

The CFMEU and Mr Myles admitted that they had breached section 348 of the Fair Work Act 2009 (Cth) (FW Act). Section 348 prohibits the taking or organising of action against another person with the intent of coercing a person to engage in industrial activity.

The CFMEU and Mr Myles wanted there to be a CFMEU delegate on a building site, despite another union being a party to the enterprise agreement who had a delegate on the site. So, Mr Myles organised a blockade at the entrance of a building site, preventing wet concrete from being delivered. This resulted in the cancellation of work.

The Verdict

Given the admissions made by the CFMEU and Mr Myles with respect to the breach, the Federal Court imposed financial penalties on both the CFMEU ($60,000) and Mr Myles ($18,000). The CFMEU appealed to the Full Court of the Federal Court, which upheld the appeal. The ABCC appealed to the High Court.

The High Court decision

The High Court held that the Court does have power to order that an individual pay a pecuniary penalty.

However, the High Court found that that power arose pursuant to section 546 of the FW Act (not section 545). Under section 546, the Court can make such orders as are reasonably required or necessary to achieve the statutory objective.

In this case, the statutory objective was the deterrence of the type of conduct engaged in by the CFMEU and Mr Myles.

While section 546 of the FW Act enables a Court to make an order for personal payment, it does not permit the making of a non-indemnification order.

The Court held that while there may be an argument that personal payment orders might be difficult to enforce, the laws of contempt can be utilised if a breach was found to have occurred.

The Lessons

The decision:

  1. Demonstrates that individuals can be ordered to personally pay any pecuniary penalty.
  2. Individuals cannot seek to be indemnified from paying the penalty from another person or entity as the order is that they personally pay the penalty.
  3. Shows the courts will impose sanctions, including personal financial penalty orders to deter breaches of the FW Act by unions and their officials.
  4. The ABCC can issues notice to produce to determine if the penalty has been paid by the union and not by the individual. If a breach is identified then the ABCC can commence contempt proceedings.

Please note: Case law is reported as correct and current at time of publishing. Be aware that cases in lower courts may be appealed and decisions subsequently overturned.

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