IN A LANDMARK ruling that may impact the future industrial strategies of the CFMEU and other militant unions, the High Court has confirmed that a union official can be ordered to personally pay a penalty and not seek reimbursement or indemnity from the union.

The ruling, handed down last Wednesday (14 February), came after the Federal Court imposed penalties against the CFMEU and its official Joseph Myles for his unlawful blockade of the taxpayer-funded $4.3 billion Regional Rail Link project site, which prevented the delivery of concrete to the site and caused tonnes of wastage.

The primary judge found in 2016 that there was: “a conscious and deliberate strategy by the CFMEU and its officers to engage in disruptive, threatening and abusive behaviour towards employers without regard to the lawfulness of that action, and impervious to the prospect of prosecution and penalties”.

For his breaches of the Fair Work Act, Mr Myles was ordered to personally pay a penalty.

The CFMEU appealed the ruling that Mr Myles’ penalty could not be paid by the CFMEU and the Full Federal Court upheld the CFMEU’s appeal.

The Australian Building and Construction Commission, which prosecuted the case, then appealed to the High Court of Australia.

In handing down its judgment in favour of the ABCC, the High Court found:

“…the principal object of an order that a person pay a pecuniary penalty…is deterrence: specific deterrence of the contravener and, by his or her example, general deterrence of other would-be contraveners.

“An order that a contravener must not seek or receive indemnity from his or her co-contravener…assists in accomplishing the calculated level of sting or burden of the pecuniary penalty…”

The proceeding will now return to the Full Federal Court for a re-determination of penalties against Mr Myles, including whether he should be ordered to pay any penalty personally.

ABCC Commissioner Stephen McBurney said: “This is an important decision of the High Court that confirms a personal payment order can be made against an individual. Such orders are designed to ensure that the person responsible for unlawful conduct cannot avoid paying the appropriate penalty.

“The ABCC is committed to ensuring all industry participants, be they employers, employees or unions, comply with Australian workplace laws. Penalties cannot simply be treated as a cost of doing business.”

CFMEU ordered to pay $1m for secondary boycott

The High Court ruling came on the same day the CFMEU was ordered by the Federal Court to pay $1 million in penalties for secondary boycotts against Boral and Alsafe at construction sites in Hawthorn and Richmond, Victoria.

The court ruled that the CFMEU contravened section 45D(1) of the Competition and Consumer Act 2010  (CCA) by engaging in conduct in concert with a shop steward at both sites which hindered or prevented the acquisition of concrete from Boral and its subsidiary Alsafe for the purpose of causing substantial loss or damage to Boral’s business.

It further ruled that the conduct was likely to have the effect of causing substantial loss or damage to Boral.

Justice Middleton ordered the CFMEU to pay a penalty of $500,000 for each of the two contraventions. His Honour also ordered the CFMEU to include practical training about section 45D of the CCA in each of its shop steward training courses in Victoria for five years.

The Australian Competition and Consumer Commission (ACCC), which commenced proceedings against the CFMEU in 2014 over this matter, noted the penalty was the highest ever awarded for a breach of the secondary boycott provisions.

“It signifies the seriousness with which the Court regarded the conduct,” ACCC Chairman Rod Sims said.

“The commercial construction industry is economically important for Australia and this type of conduct can impact the targeted companies as well as sub-contractors and competition in the industry more generally. We pursued this matter for five years because we wanted to send a strong message to others that this sort of conduct is illegal and will not be tolerated.”

Implications for employers and the CFMEU takeover

These matters have significance as growing frustration of the Courts’ limited powers to deter breaches of workplace laws coincides with the looming merger of Australia’s two most lawless unions.

AREEA continues to lobby the federal Parliament to pass legislation reinstating a public interest test for registered organisation mergers, maintaining this is a necessary deterrent which would incentivise compliance with workplace laws.

With a Fair Work Commission decision on the merger application of the CFMEU, MUA and TCFUA now imminent, AREEA is drawing attention to the significant risk this merged union would present to the entire resources and energy industry supply chain.

“With last week’s $1 million fine, the CFMEU alone has racked up well over $11 million in fines since 2004 for illegal industrial activities designed to hurt businesses, disrupt Australia’s economy and bully anyone who doesn’t toe the union line,” said Amanda Mansini, AREEA director workplace relations.

“The prospect of Australia being faced with a merged CFMEU/MUA is highly concerning. This merged union would control $310 million in assets and more than $146 million in annual revenues – more than enough to openly flout the courts and absorb any fines and penalties it is issued.

“We continue to engage our parliamentarians on this issue, and explain that the only way to protect Australian employers, employees, the economy and the broader community from increased union thuggery, backed by unprecedented financial resources, is to ensure this merger is subject to a test of the public interest.”

For more information on any of these matters, contact [email protected]