Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union

The High Court of Australia considered an appeal by the Australian Building and Construction Commissioner against the Construction, Forestry, Mining and Energy Union (CFMEU) and a union official. The dispute concerned the imposition of pecuniary penalties on both the union official and the CFMEU for contraventions of civil remedy provisions within the *Fair Work Act 2009* (Cth). The core of the appeal involved whether the court had the power to order that the CFMEU could not indemnify the union official against these penalties, or conversely, that the official could not seek or accept such an indemnity.

The legal issues before the High Court were whether sections 545(1) and 546(1) of the *Fair Work Act 2009* (Cth), or section 23 of the *Federal Court of Australia Act 1976* (Cth), empowered the court to make orders prohibiting a union from indemnifying a union official against pecuniary penalties, or prohibiting an official from seeking or accepting such an indemnity.

The High Court reasoned that the power to impose pecuniary penalties under section 546(1) of the *Fair Work Act* does not inherently include an implied power to prohibit indemnification. The Court held that while section 546(1) grants the power to order a person to pay a pecuniary penalty, this express power does not carry with it the necessary implication of a power to make orders that restrict indemnification. Such a restriction was considered to go beyond what was reasonably necessary for the effective exercise of the primary power and would serve to increase the punitive impact of the penalty beyond what was expressly provided for. The Court also found that section 545(1) of the *Fair Work Act* and section 23 of the *Federal Court of Australia Act* did not provide a source of power for such non-indemnification orders.

The High Court allowed the appeal, setting aside the orders of the Full Court of the Federal Court that had prohibited the CFMEU from indemnifying the official. The matter was remitted to the Full Court for the re-imposition of penalties according to law, without the non-indemnification orders.