The following examples of significant cases are illustrative of the continuing serious unlawful conduct within the building and construction industry.

Director FWBII v CFMEU & Ors [2015]

FCA 225

This proceeding arose from a ‘bitter industrial dispute’ between Grocon and the Construction Forestry Mining & Energy Union (CFMEU) in 2012. Grocon faced ongoing union demands for the company to employ people nominated by the CFMEU as shop stewards and employee representatives. When Grocon maintained their lawful position that they employed people on merit, the CFMEU threatened to ‘smash ‘em’. The CFMEU blockaded two Grocon sites for almost two weeks: one in central Melbourne and the other at Footscray, Victoria. Because some of these blockade activities contravened injunctions granted by the Supreme Court of Victoria, the CFMEU was later ordered to pay substantial fines for criminal contempt of court.

During the blockades senior CFMEU officials were verbally abusive and physically intimidating. For example, Victorian State Secretary John Setka was mentioned in the evidence as being involved with a group of men who physically threatened a security guard when they pinned him to a wall in an alleyway. On another occasion Setka punched the window of a bus full of workers, saying twice to the driver (who was battling cancer) ‘I hope you die from your cancer’.

Another example of similar behaviour was exhibited by CFMEU Victorian Branch President Ralph Edwards. Mr Edwards used a megaphone to tell those at a blockade in Melbourne city ‘if you recognise any of the Grocon employees, get personal, up close and personal with them right’. Mr Setka and CFMEU Assistant State Secretary Shaun Reardon were involved in the blockade where Victoria Police horses were punched. Evidence was given of Setka calling workers ‘f**king dogs, rats’ and other pejorative terms. Workers were subjected to similar ‘vitriolic abuse’ from protesters at other times as they walked past the blockade barricades, including ‘scabs’, ’you’re a f**king bastard’, ‘I am going to kill your family’ and ‘you’ve got to f**king die’.

In FWBC’s proceedings, the Federal Court found the CFMEU and eight of its officials had contravened ss 348 and 355 of the Fair Work Act (2009) (FW Act) (coercion provisions). In addition, the Federal Court found Mr Setka had contravened s 346 (adverse action) by using foul and abusive language towards the group of Grocon employees. The Court has reserved its decision on penalties.

Director FWBII v CFMEU [2015] (No. 2) [2015]

FCA 407

The Bald Hills Wind Farm project was valued at $400 million and is expected to produce 380,000 MWh of electricity per year once operational. Hazell Bros was the principal subcontractor engaged for the civil component of the works. In late 2013, Hazell Bros decided to terminate negotiations with the CFMEU for an enterprise agreement and instead commence negotiations with the Australian Workers Union (AWU). At a meeting with Hazell Bros, CFMEU Victorian Branch President Ralph Edwards threatened company representatives, saying the CFMEU would ‘f**k you over’ if they did not make a CFMEU enterprise agreement.

In January 2014 Hazell Bros made an enterprise agreement with the AWU. CFMEU officials subsequently parked a number of vehicles across a gate to the project and prevented workers from accessing the site until police arrived.

In March 2014, there was an alleged election of a CFMEU shop steward and Health and Safety Representative (HSR), employed on a casual basis by a crane subcontractor at the site. The following day the CFMEU complained that he had been assaulted on-site. The crane subcontractor stood him down pending the outcome of investigations by the principal contractor and Worksafe Victoria into the alleged assault and the validity of his appointment as a HSR.

The CFMEU demanded that the HSR be reinstated immediately and then blockaded the site at dawn for a number of hours on three separate days, again preventing work. Senior Victorian CFMEU official Gareth Stephenson threatened further blockades, stating ‘We will see you soon’.

The CFMEU held a further blockade on in April 2014 and was subsequently found to be in contempt of court (see following case), with the Court noting ‘CFMEU officials treated Fair Work Building Industry inspectors with disdain’. It was further noted by the Court that CFMEU Branch Vice-President Derek Christopher ‘was near one of the subsidiary entrances. He saw two inspectors driving past and made a crude gesture towards them’ and not long afterwards another union organiser ‘saw the same inspectors driving past another entrance. When he saw them he grabbed his crotch and mouthed the words “f**k off” to them’.

The Court found that the CFMEU contravened section 340(1)(a) of the FW Act (adverse action) on three occasions and section 355(a) (coercion) on four occasions, and that senior CFMEU official Gareth Stephenson engaged in one contravention each of ss 355(a) and 494(1) (failure to hold federal right of entry permit).

The Court imposed a total penalty of $109,500 for the contraventions, consisting of:

  • $102,500 on the CFMEU; and
  • $7,000 on Mr Stephenson.

The Court also continued an injunction against the CFMEU preventing it from placing or leaving any cars or other equipment within 200 metres of the Bald Hills site.

Director FWBII v CFMEU [2015]

FCA 226

In late March 2014, FWBC applied for an injunction to restrain the CFMEU and its agents from hindering access to the Bald Hills Wind Farm project (see previous case), however the union provided the Federal Court with an undertaking that it would not ‘prevent, hinder or interfere with free access to and free egress from’ the site. As part of the undertaking, the Court ordered the CFMEU to also file and serve an affidavit, setting out the steps they would take to publish the undertakings on the CFMEU website, with copies provided to some of their officials. Despite having given the undertakings, the CFMEU, on 15 April 2014, subsequently caused vehicles to be placed across gates preventing access to the project.

Federal Court Justice Tracey found the CFMEU and its senior official Gareth Stephenson subsequently engaged in ‘a co-ordinated blockade of seven entrances to the compounds at the site. At least eight paid officials (including Victorian Vice President Derek Christopher) converged on the remote construction site at dawn. They were intent on preventing work proceeding at the site on the day or at least to severely impede the performance of work’.

Justice Tracey said the blockade displayed the CFMEU’s ‘cavalier attitude, which could only serve to undermine respect for Court processes’. His Honour said the union had ‘opted for a show of industrial force’ and had, ’not for the first time, decided that its wishes should prevail over the interests of the companies and that this end justified the means’. Justice Tracey also said the failure of the CFMEU to file the affidavit ‘constituted a deliberate and flagrant breach of’ the Court’s orders’.

The CFMEU was found guilty of contempt and fined $125,000. The Court also made an order for indemnity costs against the CFMEU.

Director FWBII v Cartledge & Ors [2014]

FCA 1047

The Federal Court penalised the CFMEU and five of its officials a total of $152,600 after they admitted to conduct including a physical altercation at the $75 million Cbus construction site on Flinders Street in Adelaide.

The Court found the union officials contravened right of entry laws. The contraventions included:

  • entering a site without notice to the occupier and holding a meeting of employees;
  • entering a site and refusing to produce permits for inspection on request; and
  • acting in an improper manner and intentionally hindering and obstructing head contractors Hansen & Yuncken management, including engaging in a physical altercation.

Specifically, the site manager on one occasion told CFMEU South Australian State Secretary Aaron Cartledge that he was not allowed on the site because he had failed to give 24 hours’ notice. Mr Cartledge replied ‘You have to do what you have to do and we are going to do what we want to do’ before entering the site.

CFMEU organiser Brendan Pitt, who had travelled from Victoria to join his South Australian colleagues, said ‘you are making a big mistake for stopping our entry. There will be trouble’. Mr Pitt and CFMEU organiser Jim O’Connor then used physical force against the site supervisor to gain access to the site. After the physical altercation Mr Pitt said, ‘you’ve just made things a hell of a lot harder for you now’. In relation to this physical altercation, the Court said ‘the situation was created by the deliberate decision of Pitt and O’Connor (and Cartledge and [CFMEU organiser David] Bolton) that afternoon to pursue entry to the site in breach of the entry requirements’.

The entry of the union officials was in relation to a concern about a subcontractor not employing full-time employees in preference to casual employees. However, the Court said, ‘I have remarked upon the fact that each of the individual respondents’ conduct indicates that each simply did not care about complying with the entry provisions. In the case of Pitt and Cartledge, as senior officers of the CFMEU and therefore as demonstrating to the other organisers the attitude of the CFMEU to such requirements, that conduct is egregious’.

Director FWBII v Stephenson & Ors [2014]

FCA 1432

The CFMEU and 10 current and former officials were penalised $205,100 for illegal activity on three Adelaide construction sites over the course of five weeks. They admitted to hindering, obstructing and acting in an improper manner at two sites during March, April and May 2014.

On 31 March 2014, two CFMEU officials entered a Leabrook site without notice or consent and held discussions with employees. On the same day, two other CFMEU officials entered a Somerton Park site without notice and held discussions, but refused to produce permits on request and refused requests to leave, resulting in them being escorted from the site by site management.

On 7 April 2014, two CFMEU officials entered the Somerton Park site without notice, refused to produce their permits on multiple requests, and failed to leave the site when directed to do so multiple times, instead holding discussions with employees.

On 1 May 2014, six CFMEU officials entered a Grenfell St site in Adelaide without notice, refused requests to produce permits, refused a request to leave the site, and held discussions with employees, remaining on-site for two hours.

The conduct on the third occasion included Victorian CFMEU official John Perkovic abusing an FWBC Investigator, including calling him a ‘f**king piece of shit’. Despite the interaction being captured on video, Mr Perkovic did not admit to this behavior. The Court said Mr Perkovic’s ‘conduct in the… incident was particularly egregious. He instigated the incident and engaged in sustained intimidatory and abusive conduct towards [the FWBC Investigator]. … Mr Perkovic attempted to belittle, humiliate and intimidate [the FWBC Investigator]…It is on the contrary to [the FWBC Investigator’s] credit that he stood his ground and did not respond in kind. Mr Perkovic created circumstances which could easily have developed into something more serious…Mr Perkovic positioned himself so closely to [the FWBC Investigator] during the incident as to attempt physical intimidation’. The Court said Government employees should be free to go about their work free from ‘harassment, bullying or intimidation’.

Director FWBII v CFMEU [2015]

FCAFC 59

This case concerned three Queensland Government projects in Brisbane: the Queensland Children’s Hospital (QCH) project worth $800 million; the Brisbane Convention and Exhibition Centre (BCEC) worth $120 million; and the Queensland Institute of Medical Research (QIMR).

On three days in 2011, employees of the head contractor and subcontractors engaged in unlawful industrial action for which up to 12 union officials or agents of the CFMEU and Communications Electrical Plumbers Union (CEPU) were liable as accessories. At the time of the action the two unions were publicising concerns about sham contracting on Queensland Government sites.

The Full Federal Court observed that this was ‘coordinated coercive action’ at the three sites because:

  • at the QCH site organisers told employees that there would be no work, convening and addressing a meeting in which a vote was taken to strike for 72 hours;
  • at the BCEC site a union official convened a meeting of about 260 employees, at which a vote was taken to strike for 24 hours and to meet the following morning. The following morning a meeting of the employees and three officials decided to remain on strike for a further two days; and
  • at the QIMR site three organisers convened a meeting about ‘sham contracting’ and then told a head contractor representative that the employees would return to work three days later. Union officials were present at the site during the strike to ensure that only very limited work was performed.

The proceedings sought pecuniary penalties and associated declaratory relief against the respondents for alleged breaches of the BCII Act.

The agreed penalties proposed by the parties were $105,000 (CFMEU) and $45,000 (CEPU). The Commonwealth of Australia was granted leave to intervene and was heard in relation to issues arising out of the decision of the High Court in Barbaro v The Queen (2014) 305 ALR 323. In Barbaro the majority of the High Court held that in criminal sentencing proceedings, the prosecution should not nominate the specific sentencing result or the range within which it should fall.

After the Full Federal Court considered whether the decision in Barbaro should be applied in this noncriminal case, the Court decided that the reasoning in Barbaro did apply to these proceedings. As such, the Court determined they would give no regard to any agreed penalty figures in fixing the amounts of the penalties to be imposed, other than to the extent that the agreement demonstrates a degree of remorse and/or cooperation on the part of each respondent.

This decision will have significant implications for Commonwealth regulatory agencies. A special leave application to the High Court has been granted.

Director FWBII v Cradden & Ors [2015]

FCA 614

FWBC brought proceedings against the CFMEU and five of its officials following a dispute in 2012 between the union and Grocon Constructors Qld (Grocon). During negotiations for a new enterprise agreement, protected industrial action coordinated by the CFMEU occurred at Grocon’s ‘Common Ground’ project in South Brisbane. This action caused work on the project to stop.

The stoppage involved not only Grocon employees but also workers from numerous subcontractors working on the project who were not covered by the protected action. The union and its officials prevented workers from entering the site, using ‘verbal threats and statements’ as well as physically blocking the main gate with vehicles.

CFMEU organiser Joseph Myles told Grocon employees on the project words to the effect of, ‘you’ve got a long time left in the industry, and we can influence your future jobs’.

When a subcontractor asked, ‘what are the consequences to my business if I bring my boys on site?’ CFMEU organiser Paul Cradden replied, ‘You want to know what the consequences are? You would be committing industrial suicide’. On another day, Cradden whispered in a Grocon site manager’s ear, ‘you’re f*cked‘.

The CFMEU and its officials admitted 33 contraventions of section 44 of the Building and Construction Industry Improvement Act 2005 (BCII Act). On 12 June 2015 Justice Logan found the respondents’ conduct ‘was a deliberate stratagem on the part of the CFMEU to supplement lawful bargaining…’. His Honour stated, ‘An industrial organisation, be it an employer organisation or an employee organisation, which persistently abuses the privilege by engaging in unlawful conduct cannot expect to remain registered’.

The court referred to the CFMEU’s ‘outrageous disregard in the past and also in the present case of Australian industrial norms.’ Justice Logan stated, ‘there can be no doubt [the CFMEU’s behaviour in this case] was neither unique to that site or to those times. Rather, it displayed a paradigm example of behaviour described by the Honourable Terence Cole RFD, as Royal Commissioner, in the Final Report of the Royal Commission into the Building and Construction Industry’.

The Court fined the respondents a total of $545,000 broken down as follows:

  • Joe Myles – $40,000
  • Paul Cradden – $30,000
  • Mark O’Brien – $30,000
  • Jack Cummins – $25,000
  • Mike Davis – $20,000
  • CFMEU – $400,000

The Court also ordered the CFMEU to pay $10,000 to FWBC by way of costs.