The High Court of Australia has confirmed that a CFMEU official can be ordered to pay a penalty out of his own pocket.
The decision follows a Federal Court decision that allowed the union to pay the fine on the official's behalf.
CFMEU official Joe Myles was penalised $18,000 and the union fined a further $60,000 for blockading the taxpayer-funded $4.3 billion Regional Rail Link project site in 2013. This prevented the delivery of tonnes of concrete to the site.
Mr Myles, joined by about 20 other people, parked nine vehicles across the main entrance to the project site which stopped Boral trucks entering and delivering concrete. Mr Myles had demanded that a CFMEU official be put on the site and had threatened "war" if the demand was not met. But he was told the Australian Workers Union, which was a party to an Enterprise Agreement, had already provided a delegate on site.
In 2016, the Federal Court imposed penalties against the CFMEU and Mr Myles for the unlawful blockade.
The Federal Court upheld a CFMEU appeal allowing it to reimburse Mr Myles. But the Australian Building and Construction Commission challenged that decision in the High Court of Australia and won.
The decision on Wednesday means the proceeding will 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.
The High Court found the main aim of ordering a person to pay a penuniary penalty was deterrence.
“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...,” it said.
Andrew Stewart, a Professor of Law at the University of Adelaide, said the decision can be applied to other unions and disputes and it was likely the ABCC would routinely ask for similar penalties against individual union officials in the future.
However, while the High Court decision has given the Federal Court discretion to make such an order, judges may not order union officials to pay their own penalties because of the difficulty of enforcement.
It was unclear how anonymous benefactors could be stopped from making gifts to a person facing a fine or whether a member of the public who paid the fine could be in contempt of court.
"It raises a lot of practical questions even though it resolves the legal issue of whether or not a union official can be forced to pay their own fine. Yes they can be, orders will be made that some of them should pay their own fines. But how that is going to be enforced in practice remains to be seen," Professor Stewart said.
Professor Stewart said the High Court decision was applicable to any penalty imposed under the Fair Work Act.
"What the High Court has confirmed is that the power to impose a penalty carries with it the power to make orders that effectively requires the person penalised to provide the money themselves, rather than look elsewhere for payment," he said.
"But I don't expect we are going to see this being widely used. I find it hard to believe the Fair Work Ombudsman for instance is going to feel the need to seek personal payment orders every time they have a penalty imposed on a director or a manager or an accountant who has breached the Fair Work Act.
"But the ABCC will almost certainly ask for this whenever they seek a penalty against a CFMEU official – something they do with monotonous regularity."
ABCC Commissioner Stephen McBurney said the High Court decision confirmed that 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," Mr McBurney said.
"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."
Australian Industry Group chief executive Innes Willox said decision will discourage CFMEU officials from "blatantly disregarding industrial laws because, if they do, they can be ordered to personally pay large fines from their own assets".
"Despite numerous fines being imposed on the CFMEU and numerous strong criticisms from judges, the CFMEU has not changed its unlawful behaviour. Hopefully, this decision will finally lead to CFMEU officials taking responsibility for their own actions and complying with the law like every citizen."
ACTU secretary Sally McManus said the Turnbull government has done everything in its power to attack working people’s representatives.
"We now see record fines and miles of red tape to hinder working people obtaining pay rises and secure jobs,” Ms McManus said.
“Unfair fines, unjust laws, politicised police raids, royal commissions and constant character attacks did not stop us fighting for working people. Neither will this court decision.”
The Minister for Workplace and Deregulation Craig Laundy said he welcomed the High Court decision confirming that union officials can be ordered to personally pay their own fines "rather than being bailed out by their union".
"Union funds should be used to benefit members, not to fit the bill for union officials who are fined for their continued illegal behaviour,” he said.
In a separate decision on Wednesday, the Federal Court the CFMEU to pay $1 million in penalties for secondary boycotts against Boral and Alsafe at construction sites in Hawthorn and Richmond, Victoria.
The Australian Competition and Consumer Commission said this was the highest penalty ever awarded for a breach of the secondary boycott provisions.
It said the court ruled that the CFMEU contravened section 45D(1) of the Competition and Consumer Act 2010 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. The conduct was held likely to cause substantial loss or damage to Boral.
Justice Middleton ordered the CFMEU to pay a penalty of $500,000 for each of the two contraventions.
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,” he said.
The ACCC said the court is yet to make orders for costs and the time for any appeal on liability will only commence when the costs order is made.