Why is Australian Building and Construction Commissioner v Pattinson relevant to workplace disputes in Australia?
In the decisions OnNotice has reported, the case is cited for one proposition above all. Under the Fair Work Act, a civil penalty exists primarily, if not solely, to deter further contraventions. In [2026] SAET 106 the tribunal said the purpose of the regime “was definitively explained by the High Court in 2022”.
Courts and tribunals use it when fixing penalties for underpayments and breaches of compliance notices. It also appears in procedural rulings, including how a residual penalty is divided among workers and how much detail an applicant must give in a penalty claim.
How the courts and tribunals use it
| Type of matter | What the decision said | What it means |
|---|---|---|
| Compliance notice penalty [2026] FedCFamC2G 1657 |
“The Court accepts that it is in the public interest that employers be deterred from contravening Fair Work Act legislation when conducting their businesses.” (the Court) | The court relied on the case’s focus on deterrence while fixing a penalty on a dairy business in financial hardship, where any higher penalty would have been crushing. |
| Pecuniary penalties proposed by consent [2026] FedCFamC2G 1645 |
“The principles to be applied in determining a civil penalty generally derive from Australian Building and Construction Commissions v Pattinson” (the Court) | The court treated the case as the source of the penalty principles and applied them through a later Federal Court summary in fixing the penalties. |
| Alleged serious contraventions from breaches of the Hair and Beauty Industry Award [2026] SAET 106 |
“The purpose of the civil penalty regime was definitively explained by the High Court in 2022” (the tribunal) | After finding the right to disconnect claim failed but every other alleged contravention was proven, the tribunal set out the case’s statement of purpose ahead of a separate penalty hearing. |
| Distribution of a penalty to workers [2026] FCA 1160 |
“The present discretionary power being exercised is penal, not compensatory” (the Court) | The court used the case to separate penalty from compensation when it uncoupled a residual penalty from a compensation scheme and divided it among workers by length of service. |
| Particulars of a penalty claim [2026] SAET 99 |
“It would not be in the interests of justice, nor facilitate the object of the civil penalty regime, for a court to adopt a pedantic or otherwise onerous approach to the provision of particulars by an applicant to a respondent.” (the Court) | The deterrent object identified in the case was relied on to refuse a school’s bid for more detailed particulars of a penalty claim. |
| Penalty hearing, failure to pay entitlements [2025] FedCFamC2G 1372 |
“the High Court rejected the principle of proportionality being applied to the calculation of penalties in the civil sphere” (the Court) | The court cited the case for the primacy of deterrence and for the rule that the maximum is not kept for the worst examples when setting penalties over a company’s payroll and payslip obligations. |
Key principles and takeaways
- The decisions OnNotice has reported treat the case as holding that a Fair Work Act civil penalty is imposed “primarily, if not solely” to promote compliance by deterring further contraventions, in the words of the plurality quoted in [2026] FedCFamC2G 1657.
- Courts read it as requiring a penalty high enough that it is not seen as a cost of doing business. [2026] FedCFamC2G 1645 adopts a summary stating that a penalty “must be fixed with a view to ensuring that it is not regarded by the contravener or others as an acceptable cost”.
- The case is cited for the rule that criminal sentencing ideas of retribution and proportionality do not govern civil penalties, and that the maximum is not reserved for the worst contraventions ([2025] FedCFamC2G 1372).
- Deterrence does not demand a crushing penalty. In [2026] FedCFamC2G 1657 the court accepted a penalty as reasonable where any higher amount would have been crushing for a business in financial hardship.
- The case concerns penalty, not compensation. [2026] FCA 1160 said the power it was exercising was “penal, not compensatory”, with compensation dealt with separately.
What the Court decided
A union delegate’s question at a site induction in Frankston, Victoria, about whether two newly arrived workers were “union” and had a “ticket”, ended in the High Court with a ruling on how civil penalties are fixed under the Fair Work Act 2009 (Cth). In Australian Building and Construction Commissioner v Pattinson [2022] HCA 13, a plurality of six Justices held that the power in s 546 to order an “appropriate” pecuniary penalty is not limited by a criminal-law “notion of proportionality”. It also held that the statutory maximum is not reserved for the worst category of contravening conduct.
Judgment was delivered on 13 April 2022, after a hearing on 7 December 2021. The plurality comprised Kiefel CJ, Gageler, Keane, Gordon, Steward and Gleeson JJ. Edelman J wrote separately and would have allowed the appeal only in part.
At a glance
- Parties: Australian Building and Construction Commissioner (appellant); Kevin Pattinson and the Construction, Forestry, Maritime, Mining and Energy Union (respondents)
- Citation: [2022] HCA 13 (M34/2021)
- Section: Fair Work Act 2009 (Cth), ss 349(1) and 546
- Outcome: Appeal allowed. The Full Court’s orders of 16 October 2020 were set aside and the appeal to that Court dismissed, restoring the primary judge’s penalties. Edelman J would have allowed the appeal only in part.
- Question decided: Whether the discretion under s 546 is constrained by a notion of proportionality drawn from the criminal law, and whether the statutory maximum penalty for a civil remedy provision may be imposed only for the worst category of contravening conduct.
Two workers, one induction, no work that day
Multiplex Constructions Pty Ltd was the principal contractor and occupier of the site, where the contraventions took place in September 2018. Mr Pattinson, employed by Multiplex, was also a CFMMEU officer and served as the union’s delegate on the site. Two employees of a subcontractor hired to install solar panels came to the site and went through an induction he ran.
He asked whether they were “union” and whether they had a “ticket”. The plurality said this “alluded to the CFMMEU’s longstanding ‘no ticket, no start’ policy”, which makes union membership a condition of working on construction sites where the CFMMEU is present. It observed that implementing such a policy has been unlawful at least since the Workplace Relations Act 1996 (Cth) came in. Neither worker belonged to the CFMMEU, and they said so. Mr Pattinson then represented to them that they had to join an industrial association before they could do the work they had come to perform. Because of those misrepresentations, the two employees were unable to work on the site that day.
Mr Pattinson and the CFMMEU admitted those facts when the Commissioner brought civil penalty proceedings against them in the Federal Court. It was accepted that he twice contravened s 349(1), once for each worker, and that because he acted as a CFMMEU delegate his conduct was attributable to the union under s 363, so the union also contravened s 349(1) twice.
A person must not knowingly or recklessly make a false or misleading representation about either of the following: (a) another person’s obligation to engage in industrial activity; (b) another person’s obligation to disclose whether he or she, or a third person: (i) is or is not, or was or was not, an officer or member of an industrial association; or (ii) is or is not engaging, or has or has not engaged, in industrial activity.
Section 349(1) is a civil remedy provision. Under s 546(1), the Federal Court may order a pecuniary penalty in an amount it considers “appropriate”, subject to the cap in s 546(2), which points to the maximum set by s 539(2). For s 349(1) that was 60 penalty units for an individual and 300 penalty units for a body corporate. A penalty unit was then $210. The maximums were therefore $12,600 per contravention for Mr Pattinson ($25,200 for both) and $63,000 per contravention for the CFMMEU ($126,000 for both).
From $63,000 to $40,000 and back
The primary judge, Snaden J, imposed $6,000 on Mr Pattinson ($3,000 for each contravention) and $63,000 on the CFMMEU ($31,500 for each). The Commissioner’s material showed the union was well resourced. The primary judge noted roughly 150 contraventions by the union of civil remedy provisions of the Act or its predecessor since about 2000, at least seven of them involving s 349(1). He described the union as a “serial offender” that appeared to treat penalties as “little more than the cost of its preferred business model”.
The primary judge’s starting point was the $63,000 maximum for each CFMMEU contravention. He found that against the union’s “sorry record of statutory contravention” the contraventions were “very much of the gravest, most serious kind”. He then cut each figure in half, because the two contraventions came from one episode, leaving a combined penalty equal to a single maximum. For Mr Pattinson, who had no prior contraventions, he considered the penalty had to deter other CFMMEU delegates and officers as well as Mr Pattinson himself.
The Full Court of the Federal Court (Allsop CJ, Besanko, White, Wigney and Bromwich JJ) allowed an appeal. It held that neither the union’s past contraventions nor the deterrent object of s 546 could support a penalty out of proportion to the nature, gravity and seriousness of the contraventions before the court, and that the maximum ought to be kept for the most serious instances of conduct breaching s 349(1). It substituted $4,500 for Mr Pattinson ($4,000 and $500) and $40,000 for the CFMMEU ($38,000 and $2,000).
- Sep 2018 Misrepresentations made at the Frankston site.
- 16 Oct 2020 Full Court orders reducing the penalties.
- 7 Dec 2021 High Court hearing.
- 13 Apr 2022 High Court judgment delivered.
What each side put to the High Court
that the Full Court went wrong in two connected ways: by reading a “notion of proportionality” into the s 546 discretion, and by using the statutory maximum as a “yardstick” that permits the maximum only for the worst category of contravening conduct.
that earlier High Court authority had not decided that factors grounded in retributive analysis, including proportionality, could never be relevant; that the gravamen of the contraventions was misrepresentation about the policy rather than its furtherance; and that rejecting the Full Court’s approach would mean a penalty approaching the maximum for any contravention by a recidivist.
that even if the Commissioner’s appeal were otherwise successful, the Court should not set aside the penalty fixed by the Full Court in respect of him and restore the penalty fixed by the primary judge: he had since retired, and he was merely a site delegate, not a senior official of the CFMMEU responsible for its policy and strategies, so considerations of specific deterrence did not support the primary judge’s penalty.
that the Commissioner’s contentions “should be accepted and the appeal allowed”, and that the trial penalties were appropriate because they went no further than what could be considered reasonably necessary to deter Mr Pattinson, the CFMMEU or others from similar contraventions.
Deterrence is the purpose, retribution has no part
The plurality said that under the Act’s civil penalty regime, “the purpose of a civil penalty is primarily, if not solely, the promotion of the public interest” in compliance, by deterring further contraventions. It contrasted this with criminal sentencing, where penalties “import notions of retribution and rehabilitation”, quoting the plurality in The Commonwealth v Director, Fair Work Building Industry Inspectorate (the Agreed Penalties Case). It noted the Act itself separates the regimes: a contravention of a civil remedy provision is not an offence (s 549), civil rules of evidence and procedure apply (s 551), and no penalty order may be made against a person already convicted for substantially the same conduct (s 552).
From the Agreed Penalties Case the plurality took the “statutory function of securing compliance” and the “basic differences” that limit transplanting criminal principles. Through that case it adopted French J’s statement in Trade Practices Commission v CSR Ltd that the “principal, and I think probably the only, object of the penalties imposed by s 76 is to attempt to put a price on contravention that is sufficiently high to deter repetition by the contravenor and by others who might be tempted to contravene the Act.” It also set out the factors French J listed as informing the assessment of a penalty of appropriate deterrent value, including the nature and extent of the contravening conduct and the size of the contravening company, while warning against regarding the list as a “rigid catalogue of matters for attention”. From ACCC v TPG Internet and Singtel Optus it took the principle that a penalty must not be regarded “as an acceptable cost of doing business”.
Why the Veen proportionality notion was rejected
The Full Court had drawn its “notion of proportionality” from Veen v The Queen [No 2]. The plurality said that notion “is so closely connected to the central role of retribution in criminal sentencing that it cannot be translated coherently into the civil penalty context of the Act”. In criminal law, it said, Veen [No 2] means a protective sentence must not be disproportionate to the offending, because retribution constrains the discretion; in the Act’s civil penalty regime, “retribution has no part to play”.
The plurality accepted that s 546 requires a penalty to be “proportionate” only in a narrower sense, meaning one that reasonably weighs the need for deterrence against oppressive severity. It drew this from NW Frozen Foods, where Burchett and Kiefel JJ said a penalty should “not be so high as to be oppressive”, and from ACCC v Reckitt Benckiser. In the plurality’s words, an appropriate penalty is one that “strikes a reasonable balance between oppressive severity and the need for deterrence” in respect of the particular case.
Other sentencing concepts survive. The plurality said concepts such as totality, parity and course of conduct “may assist” in assessing what is reasonably necessary to deter. Accepting the answer given by the Commissioner’s counsel, it said proportionality “has a normative character foreign to the purpose of the power”, whereas those concepts are “analytical tools” not so closely tied to retribution.
The maximum is not kept for the worst case
The plurality held the Full Court erred in treating the maximum as requiring contraventions to be graded by seriousness, with the top reserved for the worst. It said: “Considerations of deterrence, and the protection of the public interest, justify the imposition of the maximum penalty” if it is clear that nothing less would effectively deter repetition of that kind of contravention. Where a contravention reflects a strategy of choosing to pay a penalty rather than obey the law, a court may fix the maximum to make that strategy “as unattractive as it is open to the court reasonably to do”.
What is required, the plurality said, quoting Reckitt Benckiser, is “some reasonable relationship between the theoretical maximum and the final penalty imposed”. It said that relationship exists where imposing the maximum goes no further than is reasonably needed to deter the contravenor and others from similar future contraventions. It noted that even in criminal law, under Markarian v The Queen, the maximum is a yardstick to be balanced with all other relevant factors.
“Where it is evident that a contravention has occurred as a matter of industrial strategy pursued without regard for the law, it is open to a court acting under s 546 reasonably to conclude that no penalty short of the maximum would be appropriate.” (Plurality, [67])
The contravenor counts, not only the conduct
The plurality rejected a sharp distinction between the circumstances of the contravention and those of the contravenor, holding both may bear on the need for deterrence and that they may overlap. It said that, all other things equal, “a greater financial incentive will be necessary to persuade” a contravenor with ample resources to obey the law than one with few resources, and the more deliberate the contravention, the greater the incentive needed. Here, the CFMMEU’s “determination and financial ability” to adhere to its policy in defiance of the law were “indisputably the most significant considerations”. It said the absence of violent or intimidatory behaviour should not be overstated, because the gravamen of s 349(1) is interference with rights of association by false or misleading representations.
The plurality also said rejecting the Full Court’s approach does not require a near-maximum penalty for every recidivist contravention. It gave examples where “a modest penalty, if any” may suffice: a one-off contravention resulting from inadvertence; ignorance of the law by a union official; an official disciplined by the union for a deliberate breach. Genuine remorse might justify only a moderate penalty, and a modest penalty might suit a case where changes in an industrial organisation’s membership make a repeat of the occasion unlikely.
Mr Pattinson’s retirement did not change his penalty
The plurality rejected Mr Pattinson’s argument. It said his retirement “says nothing against the appropriateness, as a matter of specific deterrence” of the trial penalty, which also reflected general deterrence of other CFMMEU delegates and officers. The Full Court identified no reason to reduce it, and the primary judge had not imposed “anything like the maximum”. The orders reinstate the primary judge’s penalties: $6,000 on Mr Pattinson and the $63,000 penalty on the CFMMEU.
Edelman J: desert should come first, but the law says deterrence
Edelman J opened with the observation that it is “sometimes just to hang an innocent” person. He added: “That is where the logic of general deterrence leads.” He contrasted a hypothetical billion-dollar corporation whose serious, unintended contraventions would need little deterrence with an individual of modest means facing a near-maximum penalty for a minor breach to deter others. He concluded: “Something is wrong with the law” if such a result could be tolerated. He treated desert as the primary criterion of justice and deterrence as secondary, and said totality, consistency and course of conduct are manifestations of desert that “have never been abolished”, so deterrence “cannot be the only purpose”.
He accepted that the CFMMEU’s “systemic culture of positive defiance of the law” required a high penalty, noting that the union’s Construction and General Division Victoria/Tasmania Divisional Branch alone had revenue of more than $30 million in the year before the contraventions and more than $68 million in net assets. He said the conclusion that the Full Court erred “is required by the present state of the law in Australia”. He drew a sharp contrast with Mr Pattinson’s circumstances: a 70-year-old retired builder with more than two decades as a site delegate and no prior contravention, for whom specific deterrence would warrant only a nominal amount. In his view, “on any view, the Full Court was correct to reduce the penalty imposed upon Mr Pattinson”.
Edelman J noted special leave was limited to the Full Court’s first ground. The second ground, that the primary judge erred in giving no material discount for admissions and cooperation, therefore stood, so the trial decision could not be “mechanically” affirmed. He recorded that, when asked by the Chief Justice, the appellant’s senior counsel replied: “[i]f the Court felt that it was not appropriate to disturb the Full Court’s orders with respect to Mr Pattinson, we do not wish to be heard against that”. He would have ordered that the appeal be allowed in part, that the Full Court’s orders as they related to the CFMMEU be set aside and the matter remitted to the Full Court, and that the appeal otherwise be dismissed.
A question left for Parliament
The plurality said the theory of s 546 is that financial disincentives make contraventions “an economically irrational choice”. It added: “Whether or not experience vindicates the theory of the Act is a matter for Parliament.” Edelman J said deterrence will remain the principal object of civil penalties unless a direct challenge is brought in the High Court or Parliament enacts new language, such as “proportionality”, to replace “appropriateness”.
Source: [2022] HCA 13
General information only. OnNotice reports developments in Australian industrial relations, human resources and workplace law. This article is for education purposes only and is not intended to form professional advice. Always confirm against the primary source and seek specific advice relating to your circumstances.