Penalty agreements between prosecutors and defendants in
civil penalty proceedings are not prohibited. This means
prosecutors - including WHS Regulators, the FWBC, the Fair Work
Ombudsman, the ACCC, ASIC and the ATO - can enter into penalty
agreements with parties who have breached civil penalty provisions,
and those agreements can be produced for the consideration of the
This was confirmed yesterday by the High Court, which
unanimously held that, in civil penalty proceedings, courts are not
precluded from considering and, if appropriate, imposing penalties
that are agreed between the parties.1
Yesterday's decision overturned a controversial Full Federal
Court decision2 that parties' agreements on
penalties are inadmissible in civil penalty proceedings. It
confirms that the principle in Pasquale Barbaro v The Queen,
Saverio Zirilli v The Queen (Barbaro) does
not apply to civil penalty proceedings.
THE FULL FEDERAL COURT'S DECISION3
On 1 May 2015, the Full Federal Court held that penalties agreed
upon between the Fair Work Building Industry Inspectorate and the
CFMEU and CEPU (together, the Unions) in respect of the Unions'
breaches of the Building and Construction Industry Improvement
Act 2005 (Cth) (BCII Act), were
The Full Federal Court's decision was based on the High
Court's decision in Barbaro. In Barbaro, the High Court held
that criminal prosecutors are not permitted to make submissions to
a sentencing judge on the range of penalties the prosecution
considers to be open.
The Full Federal Court held that the principle in Barbaro also
applied to civil penalty proceedings brought under the BCII Act,
with the result that the Federal Court could not consider joint
submissions from the parties regarding the agreed penalties.
WHAT HAS CHANGED?
Today's decision confirms that the principles in Barbaro do
not apply to civil penalty proceedings. This means courts can
receive and consider agreements on penalty for breaches of civil
The High Court confirmed that courts are not bound to accept an
agreed penalty if it does not consider it appropriate. The task of
a court is to determine whether, in all the circumstances, the
agreed penalty is appropriate.
WHY IS THIS DECISION IMPORTANT?
The decision is important for federal regulators - like the
FWBC, the Fair Work Ombudsman, the ACCC, ASIC and ATO – as it
means they can enter into agreements on appropriate penalties with
parties who have breached civil penalty provisions.
Similarly, the decision is relevant to work health and safety
(WHS) Regulators and people charged with breaches of civil penalty
provisions under WHS laws (for example, the civil penalty
provisions relating to discriminatory or coercive conduct and
workplace entry by WHS entry permit holders).
In our view, the decision is likely to encourage parties to seek
to resolve, rather than contest, civil penalty proceedings.
1Commonwealth of Australia v Director,
Fair Work Building Industry Inspectorate & Ors; CFMEU &
Anor v Director, Fair Work Building Inspectorate & Anor
 HCA 46 (9 December 2015).
2Director, Fair Work Building Industry
Inspectorate v CFMEU  FCAFC 59 (1 May 2015).
3 See Corrs' further discussion of the
Full Federal Court's decision and its implications
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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