High Court gives green light to CFMEU administration

On 18 June 2025, the High Court of Australia unanimously held that the Federal Government's laws enacted last year forcibly placing the CFMEU Construction and General (C&G) Division into administration are legally valid.

Background

To recap, back in August last year, laws were enacted in Federal Parliament placing various State and Territory branches of the CFMEU C&G Division into administration, for up to 5 years, in the public interest. These administration laws came about following various media reports of alleged criminality, corruption, coercion, violence and intimidation across multiple branches of the CFMEU C&G Division.

Under these laws, existing leaders of the CFMEU C&G Division were removed from their roles, and broad powers were granted to the administrator - including for example the control of the property and affairs of the CFMEU C&G Division and its branches, as well as the ability to expel members (e.g. delegates), disqualify officers, and terminate employees (e.g. organisers).

These administration laws also include strong anti-avoidance provisions prohibiting persons from preventing the administrator effectively administering the scheme. The CFMEU is also required to pay for the costs of this administration.

High Court challenge and decision

In response to these administration laws, former senior officials from the CFMEU C&G Division commenced proceedings in the High Court challenging the legal validity of these laws on various constitutional grounds.

Their arguments included, for example, that the laws were not supported by any head of Commonwealth power under the Australian Constitution, that they infringed the implied freedom of political communication, that they were a constitutionally impermissible exercise of judicial power, and that they invalidly authorised an acquisition of property that was not on just terms.

However, the High Court unanimously rejected all of these arguments (albeit across separate individual judgments) and held that these administration laws were valid. Specifically, the High Court:

• reaffirmed the broad reach of the 'corporations power' in the Australian Constitution, in regulating Federal workplace relations;
• rejected the assertion that these laws impermissibly infringed any implied freedom of political communication (and that, in any event, these laws were for the legitimate purpose of enabling the CFMEU C&G Division to swiftly be returned to a state where it is governed and operates lawfully and effectively in its members' interests);
• rejected the argument that these laws were invalidly punitive or an impermissible exercise of judicial power; and
• rejected that these laws amounted to an acquisition of property that was not on just terms.

What’s next? Key takeaways

Now that the High Court has provided final legal clarity confirming the validity of the CFMEU administration laws, attention now turns to what participants in the construction industry will do next. For example:

• 'Clear Air' now to administer the CFMEU?: Prior to this decision, the CFMEU administrator expressed concerns about his ability to effectively administer the CFMEU, under the possible spectre of removed CFMEU officials returning to their positions in the event of a successful High Court challenge. Now that this challenge has been unsuccessful, a key question will be whether the CFMEU administrator can obtain the necessary support from officials, organisers, delegates and members of the CFMEU (as well as employers and contractors in the industry) in administering the union to a position of compliance over the next ~2-4 years while the CFMEU C&G Division is in administration. Key to this will also be how the administrator exercises his powers to suspend / remove / expel / disqualify CFMEU operators who are undermining the administration.
• Protests and Rallies: Following the High Court decision, various 'pop up' protest rallies have occurred around the country involving construction workers and delegates. Other construction unions (e.g. the ETU) have also continued to express their opposition to the administration. Employers and contractors should continue to monitor whether rallies of this nature will disrupt their projects (and have mitigation plans in place should this occur), and whether other union/s will step in to 'fill the breach' of previous CFMEU militancy.
• 'Anti-Avoidance' Regime: Now that the CFMEU administrator has clear legal validity to administer the scheme, there may be a heightened focus on requests to employers and contractors to assist the administrator in his objectives, as well as to not take any steps to frustrate the administration under the 'anti-avoidance' provisions in the scheme (which if breached carry significant financial penalties and potentially jail terms). Employers and contractors should seek advice in respect of any requests from the administrator, or where any concerns arise that their actions could fall foul of this 'anti-avoidance' regime.

Lander & Rogers' Workplace Relations & Safety team was pleased to secure this outcome for Healthscope. For further guidance on how to manage industrial action and on understanding the potential and limits of s 424, please contact a member of our team.