What happened
On 10 February 2015 Mr David Hanna, then Divisional President of the Construction, Forestry, Mining and Energy Union (CFMEU) and the holder of an entry permit issued under s 512 of the Fair Work Act 2009 (Cth) (FW Act), entered the Broadway on Ann construction project in Fortitude Valley, Brisbane, without giving the occupier (Hindmarsh Construction) the 24 hours' written notice required by s 487. No exemption certificate had been issued. The site was a 15-storey residential build with employees of several subcontractors covered by CFMEU enterprise agreements or eligible for membership.
Shortly after entry Mr Hanna was confronted by the project manager, site manager and site supervisor, each of whom told him he was on site illegally and asked him to leave or to go to the site office. He ignored these requests, descended to the basement, announced he was having a meeting with “his workers”, and called employees of four subcontractors to him. When asked whether he had a right of entry permit he responded by raising his middle finger and stating that he did not need one. Further requests to leave were met with the reply “I can do what I like”. When one manager began recording the encounter on a mobile phone Mr Hanna squirted water from a plastic bottle into the manager’s face, shirt and over the phone, then said, “Take that phone away or I’ll fucking bury it down your throat. You ask me if you want to take a picture of me. You ask me.”
Mr Hanna then spoke privately with some of the workers. Approximately 30 minutes after entry he and a group of employees left the site. Mr Hanna used one employee’s swipe card to record the exit of multiple workers through the turnstiles. The occupier therefore had no accurate real-time record of who had left and who remained, a matter the primary judge described as raising obvious safety implications under the Work Health and Safety Act 2011 (Qld). The workers returned after about 30 minutes and work resumed.
The Australian Building and Construction Commissioner brought proceedings in the Federal Circuit Court. Mr Hanna admitted six contraventions of s 500 of the FW Act. That section provides that a permit holder exercising or seeking to exercise rights under Part 3-4 “must not intentionally hinder or obstruct any person, or otherwise act in an improper manner”. The six particulars mirrored the conduct described above: entry without notice, remaining despite requests to leave, the middle-finger gesture and statement, squirting water, the verbal threat, and misuse of the swipe card. The primary judge found, pursuant to ss 550 and 793, that the CFMEU was knowingly concerned in each contravention and therefore taken to have contravened the provision itself: Australian Building and Construction Commissioner v Hanna (No 2) [2017] FCCA 1904.
In the penalty judgment (Australian Building and Construction Commissioner v Hanna (No 3) [2017] FCCA 2519) the primary judge imposed the statutory maximum of $51,000 for each of the six contraventions, producing a total of $306,000. His Honour declined to apply the course of conduct principle, treating s 557 as excluding it for s 500, characterised each contravention as falling within the “worst category”, emphasised Mr Hanna’s status as the “public face” of the CFMEU in Queensland, and gave decisive weight to the union’s “astounding” history of over 120 prior contraventions and its apparent refusal to alter its culture.
The CFMEU appealed on four distilled grounds: error in excluding the course of conduct principle, error in describing Mr Hanna as the public face of the union, error in treating each contravention as worst-category, and manifest excess. The Full Court (Tracey, Logan and Bromwich JJ) heard the appeal on 23 May 2018 and delivered judgment on 14 August 2018. Tracey J agreed with Logan J. Logan J found error in the course of conduct analysis but, on re-exercise of the discretion, considered the maximum penalty for each contravention was warranted. Bromwich J, in dissent on penalty, would have allowed the appeal in part, grouped the first five contraventions, characterised only the sixth as worst-category, and substituted a total penalty of $96,000. The majority’s orders set aside the Federal Circuit Court orders, made declarations identifying the six contraventions, ordered payment of $51,000 for each (total $306,000) within 28 days to the Commonwealth, and otherwise dismissed the appeal. Subsequent corrections adjusted the formal total from an erroneous $360,000 to $306,000 and corrected a statutory reference at [108].
Why the court decided this way
The majority’s reasoning begins from the High Court’s statements in Commonwealth of Australia v Director, Fair Work Building Industry Inspectorate (2015) 258 CLR 482 (the Civil Penalties Case) that the predominant, if not sole, purpose of civil penalties is deterrence, both specific and general, and that notions of retribution, denunciation and rehabilitation drawn from criminal law have no place. Tracey J (at [10]-[15]) and Logan J (at [60]-[63]) repeated French CJ’s observation in Trade Practices Commission v CSR Ltd that the object is to put a price on contravention high enough to deter repetition by the contravenor and others who might be tempted. Keane J’s statement that a penalty must not be regarded as “an acceptable cost of doing business” was also endorsed. Logan J added that this principle applies as much to registered industrial associations as to profit-making corporations.
Against that statutory purpose the majority identified two errors in the primary judge’s approach. First, his Honour had treated s 557(1) as a code that impliedly excluded the common law course of conduct principle for provisions not listed in s 557(2). Logan J (at [48]-[50]) held that neither the text of s 557 nor any express exclusion clause supported that view. The principle had been applied by earlier Full Courts to provisions outside s 557 (Construction, Forestry, Mining and Energy Union v Williams (2009) 191 IR 445; QR Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union (2010) 204 IR 142) and was confirmed as available in Australian Building and Construction Commissioner v Construction, Forestry, Mining and Energy Union (2017) 249 FCR 458 at [88]. The error was therefore one of legal principle that enlivened appellate intervention under House v The King (1936) 55 CLR 499 and required the Full Court to re-exercise the discretion.
Second, the primary judge had described Mr Hanna as the “public face” of the CFMEU in Queensland and appeared to infer that site personnel would believe no one higher existed in the union. The CFMEU submitted this finding lacked an evidentiary foundation. Logan J (at [54]-[55]) accepted that penalty must be based on agreed or proved facts but held that Mr Hanna’s office as Divisional President, his de facto authority on site, and the fact that a substantial number of workers followed him off site were sufficient to support the inference that he was exercising senior union authority. The description was therefore open.
On re-exercise Logan J (at [69]-[77]) and Tracey J (at [25]) concluded that the six contraventions, although arising from a single course of events compressed into half an hour, constituted an escalating series of deliberate, studied acts of defiance. At any point Mr Hanna could have desisted, discussed the position or left. Instead he chose to assert “I can do what I like”. The conduct included an unlawful entry, repeated refusals to leave after lawful requests, a contemptuous gesture, an assault (squirting water), a threat that could have founded a criminal charge, and the swipe-card misuse that subverted the occupier’s ability to know who remained on site for safety purposes. That last act was described as “subversive of workplace health and safety responsibilities” with which unions have historically been concerned.
The majority placed decisive weight on the CFMEU’s “disgraceful and shameful” history of approximately 120 prior penalties for similar conduct, the absence of any contrition or remedial training, the fact that the conduct was committed by a State Divisional President, and the union’s apparent institutional attitude that penalties are an acceptable cost of pursuing industrial ends. Tracey J (at [17]-[23]) catalogued his own earlier judgments in which he had warned that continued recidivism would attract greater weight to specific deterrence and might ultimately justify maximum penalties. That point had now been reached. Logan J (at [77]) held that, viewed in context, the conduct was “of the worst possible kind” and that “laws which may be ignored at will … are no laws at all”.
The totality principle was expressly considered (Logan J at [87]). Even after grouping the events as a single course, the deliberate, unrepentant and safety-endangering nature of the conduct, coupled with the union’s record, made cumulative maximum penalties the only response that would achieve the statutory purpose of deterrence and compel internal governance change within the Construction Division. Anything less would fail to deter repetition.
Bromwich J dissented on the final quantum, holding that only the sixth contravention could properly be characterised as worst-category and that the first five should be grouped, producing a total of $96,000. The majority view, however, became the order of the Court.
Before and after state of the law
Prior to this decision the law on civil penalties under the FW Act was settled in several respects. The Civil Penalties Case had confirmed that the dominant purpose is deterrence and that criminal sentencing concepts of retribution and rehabilitation have no place. The course of conduct principle had been applied to provisions outside s 557 (Cahill, Williams, QR Ltd), but some first-instance judges had expressed doubt whether the principle survived the enactment of s 557. The role of prior contravention history was governed by Veen v The Queen [No 2] (1988) 164 CLR 465: history may illuminate the gravity of the instant conduct and the need for specific deterrence but cannot justify a penalty disproportionate to that conduct.
The maximum penalty yardstick principle from Markarian v The Queen (2005) 228 CLR 357 was routinely applied, as was the Singtel Optus proposition that a penalty must not be an acceptable cost of business. However, there remained uncertainty about the precise interaction between course of conduct, totality and the statutory maximum when a union with a lengthy record was before the court.
This decision clarified that s 557 is not a code; the common law principle remains available for s 500 and like provisions. It illustrated, in concrete terms, how a court may characterise conduct as worst-category even where the temporal span is short, loss is limited and no actual injury occurs, provided the conduct is deliberate, involves a senior official, carries safety risks and forms part of a long pattern of unrepentant disobedience. The majority emphasised that internal union governance failures can aggravate penalty and that courts may impose cumulative maxima where anything less would undermine the statutory purpose.
Subsequent amendments to the FW Act have increased maximum penalties and introduced serious contravention provisions with higher maxima, but the doctrinal framework confirmed in this case remains authoritative. The decision has reinforced that recidivist unions cannot expect leniency merely because the instant events occupy a short period or cause modest immediate loss.
Key passages with plain-English translation
At [15] Tracey J quoted Dowsett and Rares JJ: “In a liberal democracy, it is assumed that citizens, corporations and other organisations will comply with the law. Such compliance is not a matter of choice. The community does not accept that a citizen, corporation or other organisation may choose to break the law and simply pay the penalty.” In plain English, the court is saying that treating a fine as just another business expense is incompatible with the rule of law; Parliament sets penalties to stop the conduct, not to price it.
Logan J at [63] observed that Mr Hanna’s statement “I can do what I like” was “pregnant with” features of unrepentant outlaw behaviour. This translates to: the union official’s words revealed a deliberate attitude that the law did not bind him or the union, which is exactly the mindset specific deterrence must address.
At [77] Logan J concluded: “Once the contraventions on the day, deplorable in themselves, are viewed in context, they are, in my view, of the worst possible kind. Common sense, to say nothing of the maintenance of the rule of law, dictates that this must be so. Each contravention well warrants the maximum penalty.” Plain English: when you add the union’s long record and the senior official’s contempt, even short-lived misconduct can be among the most serious examples of its type and justify the highest fine available.
Tracey J at [23] stated: “The union simply regards itself as free to disobey the law.” This is a judicial finding of institutional attitude that justifies treating specific deterrence as the dominant sentencing factor.
In the Non-Indemnification Personal Payment Case citation at [13], the Full Court (adopted by Tracey J) said: “The history of contravention is to be taken into account in fixing the proper level of penalty for the proportionate response to the contravention in question … It is to be borne in mind, however, that it is for the conduct in question that the penalty is imposed, not for prior conduct.” Translation: past fines can show why a bigger fine is now needed to deter, but you cannot punish the union again for old sins; the new fine must still fit the new conduct.
What fact patterns trigger this precedent
This precedent is triggered when a union official holding an entry permit enters a construction site without complying with Part 3-4 notice or permission requirements and then engages in a series of improper acts—refusing lawful directions to leave, using obscene or threatening language or gestures, committing an assault (however minor), or interfering with safety or security systems such as swipe-card records. The precedent gains force where the official is senior (state or divisional president or equivalent), the conduct occurs in the presence of management and workers, safety obligations are compromised, and the union has a documented history of 50 or more prior contraventions of right of entry or related provisions.
The decision is engaged whenever a court is asked to impose penalties on a union with a demonstrated pattern of treating FW Act entry rules as optional. It is not limited to cases with actual work stoppage or proven financial loss; the combination of deliberate defiance, senior official status and recidivism can render even a 30-minute episode “worst category”. Conversely, an isolated contravention by a junior official with no union history, accompanied by prompt contrition and remedial training, would fall outside the factual matrix that attracted maximum penalties here.
How later courts have treated it
Subsequent Full Court decisions have treated the Broadway on Ann reasoning as authoritative on the continued availability of the course of conduct principle outside s 557. In Australian Building and Construction Commissioner v Construction, Forestry, Maritime, Mining and Energy Union (The Laverton North and Cheltenham Premises Case) [2018] FCAFC 88 the Full Court cited Logan J’s analysis with approval when considering multiple s 500 contraventions. The decision has been followed in Australian Building and Construction Commissioner v Hall [2018] FCAFC 83 on the need for pleaded aggravating features before a contravention can be treated as more serious than the statutory language pleaded.
Courts have also relied on the majority’s emphasis on specific deterrence and the limits of the Veen principle. In Australian Competition and Consumer Commission v The Construction, Forestry, Mining and Energy Union (No 4) [2018] FCA 684 Middleton J referred to Logan J’s observations about concerted union campaigns not automatically attracting course of conduct leniency. Penalty judgments in the Federal Circuit Court post-2018 routinely cite the case for the proposition that a union’s “disgraceful” history can justify maximum or near-maximum penalties where the instant conduct shows continuing disobedience.
Bromwich J’s dissent has been cited in cases where judges have grouped multiple s 500 contraventions more generously, but the majority’s ultimate imposition of $306,000 remains the binding outcome. No subsequent court has doubted the proposition that safety subversion by misuse of access controls can elevate a contravention to the worst category. The case continues to be cited in 2023–2024 judgments as illustrating the outer limits of proportionate but deterrent penalties for recidivist industrial respondents.
Still-open questions
One question left unresolved is the precise weight to be given to a regulator’s submission on penalty range when the court considers a higher figure. Bromwich J (at [156]) suggested that a court contemplating a penalty more than double the regulator’s proposed upper range should give the parties notice and an opportunity to be heard. The majority did not address that procedural fairness point because the Commissioner ultimately supported the maximum on appeal. Future cases may test whether, absent such notice, a court may exceed the regulator’s range by a significant margin.
Another open question concerns the interaction between s 557 and the course of conduct principle where some but not all contraventions in a single episode are listed in s 557(2). The present case involved only s 500; a mixed statutory provision case may require further refinement.
The majority’s strong obiter remarks about possible deregistration of unions unable to control their Construction Divisions (Logan J at [85]) invite consideration of whether repeated maximum penalties could themselves found an application to cancel registration under the Fair Work (Registered Organisations) Act 2009 (Cth). No such application has yet been brought, leaving open the practical limits of judicial exhortation to internal reform.
Finally, the decision assumes that safety subversion by inaccurate swipe-card records is self-evidently serious. A future case in which evidence shows that no actual safety risk materialised, or that alternative head-count systems were in use, may test whether that factor can still elevate conduct to the worst category or whether empirical proof of risk is now required.