ACCC succeeds in claim against Hutchinson Builders and the CFMMEU
Queensland construction giant J Hutchinson Pty Ltd (Hutchinson), and the CFMMEU, are likely to face significant fines for conduct linked to the removal of a subcontractor without a union EBA from a Brisbane construction project in 2016.
Federal Court Justice Kylie Downes has determined that Hutchinson contravened s 45E(3) of the Competition and Consumer Act 2010 (CCA Act) by making an arrangement or arriving at an understanding with the CFMMEU that the company would no longer acquire waterproofing services from Waterproofing Industries Qld Pty Ltd (WPI) at the Southpoint A construction project.
Further, in terminating their contract, Hutchinson gave effect to the boycott provisions and thereby contravened s45EA of the CCA Act.
In addition, Justice Downes determined that the CFMMEU was knowingly concerned in, or party to, the contraventions by Hutchinson and that the union threatened or implied that there would be conflict with or industrial action by the union if Hutchinson did not cease using WPI.
The case originated from Hutchinson being the principal contractor for the Southpoint A construction project located at 269 Grey Street, South Brisbane in Queensland (the Southpoint project).
At that time, Hutchinson was covered by a CFMEU (as the union was then known) enterprise bargaining agreement. The terms of which included an obligation on the builder to consult with its employees and the union about the appointment of any subcontractors and that any subcontracted employees on the project would receive the same terms and conditions (or equivalent) as Hutchinson employees.
WPI, who did not have an EBA with the CFMEU, entered into a subcontract with Hutchinson on 22 March 2016 to perform certain waterproofing works. Shortly thereafter, the union claimed they had not been consulted about the selection of WPI and threatened to engage in industrial action if Hutchinson allowed the subcontractor to continue on the project.
Hutchinson subsequently excluded WPI from the project on 11 June 2016, and their subcontract was terminated by letter dated 26 July 2016.
An affidavit from the Project Manager recalled a conversation with the CFMEU site delegate in June 2016,
“Damon Clarke: They don’t have an EBA. I’ve got strict instructions from Justin to sit the job down if WPI come onsite”. Two days later, he emailed his manager and stated, “I was onsite Saturday morning and Damo (CFMEU Delo) approached me about Charlie (WPI) being on site. He let it go but is under strict instructions from Justin Steele to sit the job down if they come on site”.
Mr Clarke’s denial that such a conversation ever occurred were dismissed by Justice Downes, who she noted, “was not a truthful or careful witness, and I infer that he gave evidence with an agenda of seeking to assist the CFMEU which had called him”.
Justice Downes also preferred the evidence of the Project Manager over CFMEU organiser Justin Steele, accepting his recollection that Steele suggested there would be `issues’ if Hutchinson proceeded to use WFI on the project.
Justice Downes also determined that there was no obligation under the EBA for Hutchinson to consult with the CFMEU about engaging WPI, as Hutchinson’s themselves did not employ any waterproofers who could be `potentially affected Employees’ if the company was selected.
As Justice Downes concluded, “The evidence demonstrates that a consensus was reached between Hutchinson and the CFMEU pursuant to which they committed to a particular course of action, namely that WPI would not be allowed back on to the Southpoint site with the end result that Hutchinson would cease to acquire waterproofing services from WPI, and further that Hutchinson would terminate the WPI subcontract”.
Justice Downes also rejected contentions from the CFMEU that the evidence did not establish it had been a party to an arrangement or understanding `for Hutchinson to terminate WPI’s subcontract’.
As she noted,
“the factual findings demonstrate that the CFMEU knew that the WPI subcontract had been entered and, by its conduct, joined with Hutchinson in preventing WPI from entering the site and performing work pursuant to it. Further, the termination of the WPI subcontract by Hutchinson was the most likely, if not inevitable, culmination of the concurrent conduct engaged in by Hutchinson and the CFMEU as described above. That the CFMEU had such actual knowledge is; therefore, the overwhelming inference having regard to all of the circumstances”.
Justice Downes invited the parties to submit what additional relief should be imposed in the matter.
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