The Federal Circuit Court in Brisbane has penalised Devine Constructions, its general manager and a senior employee $38,000 for refusing to engage a steel fabrication company because it did not have a CFMEU enterprise agreement.
Today’s penalty judgment follows the ABCC commencing proceedings against Devine Constructions in August 2015. The judgment requires half the penalties, $19,000, to be paid to the steel fabrication company – Craig’s Engineering.
At the time of the contraventions Devine Constructions was the head contractor for the Double One 3 Apartments project at 113 Commercial Road, Teneriffe.
In July 2013, a project manager sent an email to all employees of Devine Constructions with an instruction to not engage contractors unless they had an agreement with the CFMEU.
In October 2013, Craig’s Engineering submitted a tender for the structural steel works. The Court heard evidence that Devine Constructions’ contracts administrator Andrew Blore advised the tenderer “We would like you to do the job but you don’t have an EBA Agreement.”
In December 2013, Steel Construct was invited to tender for the project and was told they “would be an easier option for us” if they had an EBA with the CFMEU.
Steel Construct submitted a revised quotation that included additional costs “with regards to the EBA with CFMEU”. Steel Construct advised Devine that they would use Mulherin Rigging as site installers and that Mulherin Rigging held an EBA (with the CFMEU).
Devine awarded the structural steel works to Steel Construct. Craig’s Engineering were unsuccessful and were told they needed a signed EBA to work on the site.
The ABCC produced further evidence to Court of an email from the successful tenderer to Devine saying “Are unions still attending regularly?’ and stating “My guys could install quicker than Mulherin for a lot less.”
The Court found Devine Constructions, its general manager Michael Tucker and contracts administrator Andrew Blore contravened the Fair Work Act when the company refused to engage Craig’s Engineering’s because it did not have an enterprise agreement with the CFMEU.
Devine Constructions was penalised $32,000, Mr Tucker $3,000 and Mr Blore $3,000 for taking adverse action against Craig’s Engineering. All three were also found to have discriminated against the subcontractor.
In his penalty judgment Judge Jarrett said:
"There is no doubt that Devine was faced with a difficult situation arising from the conduct of the CFMEU at this project site. Mr Blore and Mr Tucker both had difficult situations facing them. The relevant conduct took place in an environment in which the CFMEU were making threats of delay and disruption and engaging in coercive conduct.”
Judge Jarrett went on to say:
"I accept…that the respondents' conduct against Craig's Engineering has the potential to perpetuate a culture of submission in the building and construction industry where economic duress is able to be applied to sub−contractors to force them to become covered by an enterprise agreement that also covers a union. If that potential is realised, the freedom of association provisions in the Fair Work Act will be subverted.”
The judgment, follows on the heels of the Forest Meiers decision, handed down by Judge Jarrett in the Federal Circuit Court, less than a week ago. The Court noted this case bears a striking similarity to the facts of the Forest Meiers case.
ABCC Commissioner Stephen McBurney said:
“In attempting to appease the CFMEU, Devine Constructions has done the wrong thing and is now paying the price through today’s penalty judgement.
“The Court has reaffirmed the protections in the Fair Work Act designed to level the playing field and which recognise the choice that employers and employees have to engage with unions. The offending conduct in this case prevented a tender from being considered on its merits.
“For this project, Devine paid an increased rate to Structural Steel so it could meet the rates payable under the CFMEU agreement. The Court concluded that such behaviour is detrimental to the industry and the community at large.
“It is significant that the Court has ordered half the penalties be paid to the victim. This is an important measure to address discrimination and hold those who break the law to account for their unlawful conduct.”