The Federal Court has imposed penalties totaling $108,875 against the CFMMEU and Harris HMC Interiors for attempting to coerce a demolition subcontractor to make an enterprise agreement with the CFMMEU at the Kathleen Syme Library and Community Centre in Carlton.

The Court ordered the CFMMEU to pay a penalty of $72,000 and imposed a personal payment order of $9,000 on CFMMEU official Theo Theodorou for his unlawful conduct. The personal payment order will prevent the CFMMEU from paying Mr Theodorou’s penalties.

Construction company Harris HMC Interiors was penalised $23,400 and three of its employees a total of $4,475.

The court found that on 15 November 2013 Mr Theodorou told the subcontractor that because it was “working in the city, it needed to obtain an enterprise agreement with the CFMEU."

During that conversation the subcontractor told Mr Theodorou, “financially I’m not able to sign the enterprise agreement right now”. Mr Theodorou replied “I’m going to make everything very difficult and not let the boys work on the Site”.

Harris HMC operations manager Jason Dwyer later gave an “ultimatum” to the subcontractor that if he didn’t “sign the EBA with the union, then your boys would not be able to work on the site on [the following] Tuesday”.

In handing down the penalty judgment, Justice Wheelahan said:

"In assessing the penalties to be imposed upon the CFMEU, I take account of its substantial financial position, and its history of contraventions of industrial legislation. The table of contraventions that was tendered identified 142 proceedings between 2003 and 2018 in which findings of contraventions of industrial legislation have been made against the CFMEU as a result of its conduct in the building and construction industry.” 

“It could not be supposed that the CFMEU’s conduct in the instant case was an aberration…” 
“… there was no evidence that addressed the question whether the CFMEU has taken any steps to ensure that it will comply with industrial laws in the future. Nor were any submissions made by the CFMEU to suggest that any change in attitude might ever occur”. 

In imposing the personal payment order against Mr Theodorou Justice Wheelahan said:

“The main consideration is to give the penalties that will be imposed upon Mr Theodorou their intended deterrent effect by ensuring that the burden of the penalty is recognised. 
“A personal payment order will, as far as possible, be directed towards the penalties having a burden on Mr Theodorou so as to operate as a specific deterrent on him, and generally on other CFMEU officials”. 

In relation to Harris HMC and its three employees, the Court said: 

“… the contravening conduct in which they engaged was in order to give effect to the CFMEU’s demands that (the subcontractor) enter into an EBA that was suitable to it. That was a practice that was the subject of findings of the Royal Commission into the Building and Construction Industry in February 2003.”
“There are thousands of small contractors in the construction industry, and they are susceptible to pressure being applied by unlawful means to enter into union-approved enterprise agreements as a condition of commencing or continuing their work. I regard the contraventions of the Harris respondents as being a result of deliberate conduct on their part…” 

ABCC Commissioner Stephen McBurney said attempts to coerce subcontractors to sign up to enterprise agreements, whether made by unions or employers, was unacceptable.

“The CFMMEU and Harris Interiors exerted pressure on the subcontractor, essentially threatening his company’s livelihood and that of the workers they employed,” Mr McBurney said.

“The conduct established in this case is too often a feature of the building and construction industry. The ABCC stands ready to assist victims who are subject of threats, intimidation, coercion or unlawful conduct.

“As regulator, we are determined to investigate and use our enforcement powers to expose unlawful conduct. It is important that we safeguard the legal rights of the thousands of subcontractors referred to in the judgment of the Court.”

Media Release
23 September 2019