Australia: High Court confirms judges can make orders preventing unions from paying penalties on behalf of individual union officials

A majority of the High Court, being Kiefel CJ, and Keane, Nettle and Gordon JJ (Gageler J dissenting), has held that section 546 of the FW Act allows a judge to make an order that a penalty made under that section be paid personally by a contravener.

Section 546 allows a Judge to impose a pecuniary penalty against a person if they are satisfied that that person has contravened a civil remedy provision of the FW Act.

The majority held that the power to order a person to personally pay a penalty is legally ancillary to the effect of deterring a person from contravening civil remedy provisions of the FW Act – being the purpose that the penalty is calculated to achieve.

In the present case, a trade union official was ordered to personally pay a penalty of $18,000 for engaging in coercive conduct in contravention of section 348 of the FW Act. However, as section 546 applies generally to contraventions of civil remedy provisions, there is no reason why the majority’s decision would not apply to any person held to have breached any civil remedy provision under the FW Act.

However, the Court unanimously held that neither the FW Act nor the Federal Court of Australia Act 1976 (Cth) allows a judge to issue a non-indemnification order in respect of any pecuniary penalties imposed on a person. Such an order would be penal and beyond the power of either legislative schemes.

The plurality (Keane, Nettle and Gordon JJ) also held that section 546 does not support the making of a non-indemnification order as the provision does not authorise an order, directed at any person other than the contravener, to be made.