In brief

  • The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court against the Construction, Forestry, Mining and Energy Union (CFMEU) and senior CFMEU officials over alleged contraventions of the Competition and Consumer Act 2010 (Cth) (CCA) and Australian Consumer Law (ACL).
  • The decision by the ACCC to commence proceedings against the CFMEU follows calls for action by Boral, industry groups, submissions made by the Royal Commission in relation to the CFMEU’s conduct and the preliminary observations of the National Competition Policy Review.
  • Recent statements by the ACCC Chairman indicate that these proceedings may demonstrate a new appetite by the regulator to challenge inappropriate union behaviour.
  • The CFMEU faces potential fines of up to $10.85 million and may be forced to publish any orders made by the Federal Court. The ACCC is also seeking declarations, injunctions and its costs of bringing the proceedings.

ACCC bring proceedings against the CFMEU

Following an investigation that commenced in April 2013 involving the use of the ACCC’s coercive information gathering powers, the ACCC has instituted proceedings in the Federal Court against the CFMEU and senior union officials, over alleged contraventions of the CCA and ACL.

The ACCC is alleging that the CFMEU engaged in, or attempted to engage in, secondary boycott activity directed at two Boral entities. The conduct allegedly occurred over a period of 14 months, following Boral’s involvement in the CFMEU’s well publicised picketing dispute with Grocon at the Myer Emporium site which resulted in the CFMEU being found guilty of criminal contempt.1

The alleged secondary boycott activity is claimed by the ACCC to involve the CFMEU ordering a ban on the use of Boral concrete at at least 12 construction sites across Melbourne after Boral (Grocon’s exclusive concrete supplier) continued to supply Grocon during the Myer Emporium dispute.

The ACCC is also alleging that the CFMEU and senior CFMEU officials engaged in undue harassment or coercion of Boral in relation to the supply of concrete, and attempted to induce Boral to enter into a contract, arrangement or understanding not to supply concrete to Grocon.

The ACCC has applied for the Federal Court to make declarations that:

  • the CFMEU, in contravention of section 45D of the CCA, took or attempted to take action aimed at causing substantial loss or damage to Boral’s business, and
  • the CFMEU and senior CFMEU officials, in contravention of section 45E of the CCA, attempted to make an arrangement aimed at preventing or hindering Boral’s ongoing supply of concrete to Grocon, and in doing so used undue harassment or coercion in contravention of section 50 of the ACL.

Further, the ACCC has asked the Federal Court to grant injunctions restraining the CFMEU and senior union officials from continuing this conduct for a period of five years.

The CFMEU faces fines of up to a maximum of $10.85 million for the above conduct, comprising:

  • $750,000 for each contravention or attempted contravention of section 45D or 45E of the CCA (of which the ACCC alleges total of 14 breaches, one of which is alleged in the alternative to the remaining 13 breaches), and
  • $1.1 million for contravention of section 50 of the ACL (of which the ACCC alleges one contravention by the CFMEU).

The union officials against whom proceedings have been commenced each face fines of up to $220,000 for contravening the ACL.

The ACCC is also seeking that:

  • the CFMEU publicise any Federal Court orders against the respondents in notices headed ‘CFMEU lifts ban against Boral and Alsafe’, and
  • the CFMEU pay the ACCC’s costs of bringing the proceedings.

A new appetite for action?

The ACCC’s decision to launch these proceedings follows calls for action from the regulator by Boral and industry groups, and supports submissions made in relation to the CFMEU’s conduct by counsel assisting the Royal Commission into Trade Union Governance and Compliance.

The decision also comes following observations published in the National Competition Policy Review Draft Report (the NCP Draft Report) that there is a strong public perception of insufficient public enforcement of the secondary boycott provisions by the ACCC.2  The NCP Draft Report states that timely and effective enforcement serves as a deterrent to boycott activity, and needs to exist.

The current proceedings against the CFMEU constitute the first secondary boycott case brought by the ACCC against a union in eight years. Whilst rarely used by the ACCC to date, there have been a number of cases where damages and substantial penalties have been imposed on trade unions that have engaged in secondary boycotts.3 Most recently, in ACCC v CFMEU,4 the Federal Court ordered the CFMEU and the Construction, Forestry, Mining and Energy Union of Workers (CFMEUW) to pay a total of $100,000 in penalties and $15,000 in costs for contravening secondary boycott provisions when picketing organised by the CFMEU and CFMEUW was found by the Court to have delayed a concrete pour at a Perth construction site.

Recent statements by ACCC Chairman Rod Sims indicate that the current proceedings against the CFMEU may demonstrate a new appetite by the entity to challenge inappropriate union behaviour. Mr Sims has been quoted as stating that:

 ‘…the ACCC will not hesitate to take action where it has evidence that unions or individuals have engaged in conduct which goes beyond what is reasonable to protect workers, and is deliberately targeted at damaging business’.5

In conducting the investigation that led to these proceedings the ACCC has also demonstrated a willingness to use its compulsory information gathering powers. Mr Sims acknowledged that:

‘…the ACCC has only been able to progress the investigation [into the CFMEU’s alleged conduct] by compelling people to give evidence’.6