CFMEU High Court Decision Clears Way for Clean-Up

The CFMEU’s High Court challenge to the appointment of administration to its construction arm last year has failed.

The Federal Government stepped in to force the construction and general division of the union into administration in July last year. 

The Government made the extraordinary move after explosive allegations about the conduct of union officials and links to criminal gangs were made public.

Former union officials went to the High Court late last year in an attempt to have the Government’s actions ruled unconstitutional. 

The High Court released its findings on June 18, deciding against the  officials.

The case

The High Court was told that the administration was undertaken following “a litany of serious allegations of criminality, corruption and other misconduct”, which came to light last year.

External administrator Victorian barrister Mark Irving KC was appointed via the Fair Work (Registered Organisations) Amendment (Administration) Act 2024, and union officers were removed. 

However, former secretaries of the Queensland and Northern Territory branch, who were removed from office in August of 2024 as part of the administration subsequently brought proceedings in the High Court in September of 2024. 

In its deliberations, the Court considered whether the Fair Work Act amendment was constitutionally “invalid” and whether it burdened “freedom of political communication”.

▲ The challenge has been rejected by the High Court.

This was because by putting the division in administration, it was hindered from using its funds for the purposes of political communication. 

It could also not make donations to political parties, as the administrator would have to be satisfied donations were “in the best interests of members”. 

The High Court considered whether parliament had the constitutional power to make the law at all and whether the decision to put the CFMEU in administration was a “legislative punishment” and therefore an “overreach” of the Government’s powers. 

However, the High Court eventually ruled, in a 186-page document, that the introduction of the amendment to the Fair Work Act did not infringe upon the Constitution. 

The High Court’s unanimous ruling said the Act amendment was “valid in all of its applications”. 

Industry reacts

The move was welcomed by the Government and some in the industry.

Federal Minister for Employment and Workplace Relations Amanda Rishworth said the focus needed to be on “shifting the culture in the construction industry”.

“The administrator and his team can now move forward with confidence and continue their essential work in cleaning up the CFMEU,” Rishworth said in a media statement. 

The Civil Contractors Federation said it was a “reassuring outcome for civil contractors” and endorsed the Government reforming the union. 

Australian Constructors Association chief executive Jon Davies said that “the ruling brings much-needed certainty to an industry facing major financial pressures and productivity challenges”.

Meanwhile, Australian Resources and Energy Employer Association chief executive Steve Knott said that in the interests of “fairness and transparency” enterprise agreements and all facets of contracting must comply with Australian law. 

“The High Court ruling returns a strong measure of certainty to the construction sector while sending a powerful message on unlawful conduct across industries,” he said.