The construction union and some of its key leaders have been fined $242,000 for blocking work on the $80 million Perth International Airport expansion.
The Federal Court heard the CFMEU undertook the three-and-a-half hour blockade in 2013 over the reasonable belief that Concealed Interiors and Exteriors had failed to pay some of its staff and sub-contractors for certain work at the site.
About 100 protesters prevented and dissuaded more than 140 workers from entering the site.
The CFMEU and six of its officials, including WA state secretary Mick Buchan and former national president Joe McDonald, were previously fined in the Federal Court a total of $21,225 for the unlawful conduct.
But the Australian Building and Construction Commission appealed, arguing the penalties were manifestly inadequate and the primary judge had failed to take into account the significant prior histories of several of the respondents in contravening workplace laws.
On Wednesday, the full bench of the Federal Court handed down their judgment.
Justice Anthony North ruled the appeal should be dismissed, but Justices Steven Rares and John Dowsett allowed it and set aside the previous penalty.
Justices Rares and Dowsett said the primary judge "failed to have regard to the need to deter serial recidivists" like the CFMEU and Mr McDonald from contravening the Fair Work Act again.
"The conduct of the CFMEU seen in this case brings the trade union movement into disrepute and cannot be tolerated," they said.
They also said the union had "chosen to pay penalties in preference to obeying the law" and was not entitled to any leniency.
ABCC commissioner Nigel Hadgkiss welcomed the judgment.
"In this case, the CFMEU ignored lawful dispute resolution avenues, deliberately choosing instead to take unlawful and disruptive action," Mr Hadgkiss said in a statement.
"It is important that such disregard for the rule of law is appropriately penalised."