The Federal Circuit Court in Brisbane has today penalised Forest Meiers Construction and its construction manager a total of $35,000 for refusing to engage subcontractor C&K Tiling because the company did not have an enterprise agreement with the CFMMEU.
The penalty follows a compensation and interest order on 26 June 2019 where Forest Meiers was ordered to pay the tiling subcontractor $240,000 (which included $40,000 interest).
On 24 February 2014, the tiling company submitted a tender to Forest Meiers for its Remora Road project in Hamilton, with the tiling company ultimately becoming the preferred bidder for the project.
During a meeting on 18 July 2014, Forest Meiers Construction Manager William Munro told the tiling company’s Managing Director: “The [CFMMEU] contacted me at around 5:00 yesterday. They threatened action on the site if we signed you up.”
In handing down the penalty judgment today, Judge Jarrett said:
“despite having the best price for the tiling works, a competitor was engaged whose price was some $300,000 more than that tendered by C&K. … such behaviour is not only to the detriment of victims such as C&K, but to the industry and the community at large."
His Honour went on to say:
Mr Munro and Forest Meiers deliberately chose to contravene the Fair Work Act. The evidence clearly establishes that faced with two commercially unpalatable alternatives, they chose the one which led Forest Meiers to knowingly contravene the Fair Work Act, rather than to take a stance against the CFMEU.
Forest Meiers’s conduct against C&K has the potential to perpetuate a culture of submission in the building and construction industry where economic duress is able to be applied to subcontractors to force them to become covered by an enterprise agreement that also covers a union.
The Court imposed a $32,000 penalty against Forest Meiers Construction and a $3,000 penalty against Mr Munro.
ABCC Commissioner Stephen McBurney said the penalty against Forest Meiers and its managing director highlighted the need for companies to respect workplace rights and ensure they do not discriminate against subcontractors.
“This is an all too familiar case where the CFMMEU threatens to take action against a site or a company if they use certain subcontractors that don’t have a CFMMEU enterprise agreement,” Mr McBurney said.
“The Court acknowledged that Forest Meiers was in a difficult position resulting from the conduct of the CFMMEU. It acknowledged that the contraventions took place in an environment consisting of threats of delay, disruption and coercive conduct by the CFMMEU.
“However, the Court has made it very clear, freedom of association laws are designed to ensure that parties such as Forest Meiers do not wittingly or unwittingly lend assistance to others intent on advancing their own agendas, such as the CFMMEU.
“The cost of doing business with the CFMMEU in this case is over $500,000. That’s $300,000 on a more expensive tender, a $240,000 compensation order and $35,000 in penalties.
“The Court’s judgment today has sent a strong message concerning the culture of submission that is an unfortunate feature of the building and construction industry. For those that do not comply with the law, even under economic duress, significant financial penalties will be applied.”