Case Study: CFMMEU and Queensland Construction Company Fined $1.35 M for Subcontractor Boycott

Another maximum penalty has been handed down to the CFMMEU for breaching competition laws. The Federal Court has fined the CFMMEU $750,000 for pressuring a Queensland construction company (the builder) to boycott a non-union subcontractor. The builder was also fined $600,000 for participating in breaching the boycott provisions of the Competition and Consumer Act 2010 (Cth) (the Act).

In June 2016, the builder entered into a subcontract with a waterproofing company that didn’t have a CFMMEU enterprise bargaining agreement (EBA). After becoming aware of the engagement, CFMMEU complained to the builder that it was not consulted prior to its engagement.  CFMMEU then threatened to engage in industrial action if the builder allowed the waterproofer to continue working on the site. The waterproofer was excluded from the site and 2 weeks later, its subcontract was terminated.

S 45E (3) of the Act prohibits a person to make an arrangement with an organisation of employees (union) or an officer of such an organisation if the proposed arrangement is preventing or hindering the person from acquiring or continuing to acquire such goods or services from another person.

The builder was found to have contravened the boycott provisions of the Act by:

1. Making an arrangement or arriving at an understanding with the CFMMEU containing the boycott.
2. Ceasing to acquire waterproofing services from the waterproofer and terminating its subcontract with the waterproofer.

The builder was fined $300,000 for each contravention, totalling $600,000. The Court said, “the amount will serve to protect the public interest from future contraventions of the Act by [the builder] as well as by others in the construction industry which are in the same position as [the builder]”.

The CFMMEU was found to have induced the builder’s contraventions by threatening or implying that there would be conflict with, or industrial action by, the CFMMEU if the builder did not cease the waterproofer.

The Court has ordered the maximum penalty of $750,000 to be imposed on the CFMMEU.  The Judge said, “no lesser penalty will be an effective deterrent against future contraventions of like kind by the CFMMEU as well as by others which are in the same position as the CFMMEU”.

Here is the full decision of the case if you are interested to read.