30 August 2012FWBC action - Grocon dispute

This document provides information about regulatory action taken by Fair Work Building & Construction (FWBC) in response to the Grocon dispute.

1. On Friday, 17 August 2012:

a. FWBC received a report of alleged unlawful conduct at a Grocon site in McNab Avenue, Footscray, Victoria.

b. Fair Work Building Industry Inspectors attended the McNab Avenue site and began an investigation into breaches of the Fair Work Act (FW Act), namely:

i. Section 346 – Protection against adverse action concerning both:

a. the ‘scab’ flyer in respect of the CFMEU parties; and

b. the allegations being made by the CFMEU against Grocon.

ii. Section 348 – Coercion;

iii. Section 355(a) – Coercion to employ, being the essential element of the dispute between the parties;

iv. Section 417 – Industrial action before expiration of nominal expiry date (unprotected industrial action “UIA”); and

v. Section 50 – a person must not contravene an enterprise agreement is also being considered.

 c. Grocon commenced action in the Supreme Court of Victoria.  The application was brought by summons in relation to the picket.  Grocon did not allege breaches of the FW Act. Grocon sought and was granted  injunctive relief against the CFMEU in relation to site at McNab Avenue, Footscray.

2. On 20 August 2012 picketing activity moved to Grocon’s Emporium site.  By summons dated 20 August (and further summonses dated 24 and 28 August 2012) Grocon sought and obtained further injunctive relief against the CFMEU in relation to the Emporium Site and its 150 Collins Street site and Victorian Comprehensive Cancer Centre site.  The injunctive relief is in place until the trial in the substantive matter.  Grocon did not allege FW Act breaches.

3. A summons in relation to 5 proposed individual respondents was adjourned until 3 September 2012. Grocon is to file and serve a statement of claim by 11 September 2012.

4. The FWBC investigation into alleged CFMEU breaches is continuing with the assistance of Grocon.

The FWBC investigation into alleged Grocon breaches has been suspended pending the receipt of any credible evidence from the CFMEU. A request for evidence made to the CFMEU has been ignored.

Further information:

Why didn’t FWBC intervene in Grocon’s case before the Supreme Court of Victoria?

Because FWBC has no jurisdiction to do so.

Why doesn’t FWBC have jurisdiction to intervene?

Because Grocon’s action in the Supreme Court of Victoria does not allege a breach of the FW Act, FWBC has no jurisdiction to intervene in the proceedings.

Could the ABCC have intervened in Grocon’s case?

No. 

Neither the former Workplace Relations Act 1996 nor the Building and Construction Industry Improvement Act 2005 would have invested any predecessor agency with jurisdiction to intervene in the proceedings as they have been brought by Grocon.

But the ABCC did intervene in matters in the past didn’t it?

Yes, the ABCC did intervene in matters in the past.

However, it only did so when breaches of the Workplace Relations Act 1996, the Building and Construction Industry Improvement Act 2005 or Fair Work Act 2009 were being alleged.  That is not the case in the present matter.

Could FWBC commence its own action?

Yes, it could do so in the Federal Court of Australia.

FWBC is undertaking a thorough investigation of potential breaches of the FW Act to determine if there are reasonable prospects of success in commencing civil penalty proceedings in respect of any breaches of the FW Act.

FWBC is obligated under the Commonwealth’s Legal Services Directions to act as a model litigant.  This usually requires completing an investigation and obtaining legal advice that any legal action has reasonable prospects of success.

FWBC also operates in accordance with its Litigation Policy and Statement of Professional and Ethical Standards (Annexure A to the Litigation Policy).

FWBC is complying with these obligations.

But FWBC could have sought an injunction in the Federal Court couldn’t it? 

Yes.  The Legal Services Directions do not prevent FWBC from seeking urgent injunctions.

However, there was little utility in doing so when, as early as 17 August 2012, Grocon had already obtained an injunction in the State jurisdiction and further injunctions in following days.

It would have been premature for FWBC to rush off to get its own injunction.

Doing so would have:

  • had the potential to sabotage Grocon’s legal strategy in the State Supreme Court by providing the CFMEU with a basis for making an application to have the dispute transferred to the Federal Court of Australia; and
  • disabled FWBC from further investigating the matter through the use of statutory powers (e.g. through the service of Notices to Produce documents).  This would have severely impeded the ability of FWBC to fully investigate the matter and obtain all the evidence necessary to properly and successful prosecute civil penalty breaches of the FW Act.

An informed decision was made not to rush off to the Federal Court of Australia.  It had nothing to do with the legislative basis under which FWBC now operates.

FWBC will pursue any breaches of the Fair Work Act in this matter, including the recovery of economic loss suffered by Grocon or any affected subcontractors.

See FWBC Investigative Processes Guidance Note for more information about FWBC’s investigation procedures.

A number of commentators have said your predecessor agency would have stopped the picket.  Does FWBC have strong enough powers to enforce the law?

These claims misunderstand the nature of the dispute.  Previous legislation including the Workplace Relations Act 1996 and the Building and Construction Industry Improvement Act 2005 would not have allowed the regulator jurisdiction to stop the picket.

FWBC has actively pursued alleged breaches with the same strategies and legislative recourse that would have been exercised by any previous regulator.

What will FWBC do about flow-on pickets and work stoppages in other states?

FWBC can confirm it has active investigations related to the Grocon dispute or associated stoppages in Victoria, New South Wales and Queensland.

What is FWBC doing about claims of violence, involvement of bikies and abuse at the pickets?

Violence is unacceptable in the building and construction industry

FWBC has no power to investigate claims of criminal activity, but will refer any relevant information collated in the course of its investigation to the appropriate state policing authority.