The recent dispute between the Construction, Forestry, Mining and Energy Union (CFMEU) and Grocon Pty Ltd (Grocon) in Victoria was extensively reported.  Was it just an old fashioned IR stoush involving a strong, passionate union attempting to stop an employer strip away worker/union rights? Or, was it an example of the ugly side of union militancy and mob thuggery being mobilised to try to crack an employer that dared to defy it?

Whatever your perspective on the recent CFMEU instigated blockades of Grocon building sites, the dispute has renewed scrutiny of Australia’s industrial relations system.

Implications for employers

  • Whatever the underlying rights and wrongs of the issues in dispute, the CFMEU’s conduct constitutes a breach of the law under which the CFMEU is registered. Time will tell whether the strong stand of the employer will pay off or lead to an ongoing IR battle. Such disputes hopefully will continue to be the exception rather than a return to past practices. The Victorian Supreme Court may yet have a serious deterrent role to play in that respect.
  • Fair Work Building and Construction (FWBC) has asserted itself in a tangible way and will seek to dispel suggestions that it lacks the conviction of the Australian Building and Construction Commission (ABCC).

Background

Grocon and the CFMEU had agreed on enterprise agreements which were approved by Fair Work Australia (FWA) in June 2012.

On 22 August 2012, members of the CFMEU blockaded Grocon’s $250 million Myer Emporium construction site in the Melbourne CBD.  Although some claims regarding the safety of Grocon sites were made by the CFMEU, the rationale for the blockade appeared to revolve around the rejection of a demand by the CFMEU that Grocon employ CFMEU stewards at their sites.  The CFMEU also claimed that Grocon refused to allow their employees to talk to union organisers, to wear CFMEU stickers and clothing, and to put up CFMEU posters in break-out rooms.

In response, Grocon claimed the CFMEU were using safety concerns as a smokescreen for lawless behaviour, and called for support from the Victorian and Federal governments to stop what they alleged was a smear campaign with its roots in physical violence and intimidation.

The dispute ran for over two weeks, during which time further blockades were set up at other Grocon sites, attracting protest crowds up to 1,500 strong.  As a result of the blockades, Grocon workers were unable to be safely transported to sites, effectively bringing work on the affected sites to a halt, and allegedly costing Grocon $500,000 per day. Serious allegations were made of confrontations between CFMEU officials and Grocon staff, including one Grocon staff member being hit by a car, numerous instances of abuse and intimidation, padlocks being superglued, and barbeques used as road blocks.

Although Grocon employ CFMEU members, it was reported that no Grocon employees took part in the blockades.  Indeed, some employees ran advertising in the Australian Financial Review deploring the CFMEU’s conduct.

The CFMEU called off the blockades on 6 September 2012, with Grocon agreeing to participate in discussions with the union.

Grocon’s approach to resolving the dispute

Grocon issued proceedings in the Victorian Supreme Court, claiming (as is common in the case of unlawful picketing) that the CFMEU’s conduct breached a range of common law industrial torts, including nuisance and interference with Grocon’s contractual relations. The Victorian Attorney-General successfully applied to be joined as a party to the action.

Grocon eventually obtained an injunction restraining CFMEU officials and members from being within 50 metres of Grocon sites.

As the CFMEU allegedly did not comply with those orders, Grocon then brought contempt proceedings against the union and a number of officials. Grocon is now also pursuing a claim for over $10 million in damages by way of compensation for loss allegedly sustained as a result of the CFMEU’s actions.

Informal talks were mediated by FWA, although neither party made a formal application to FWA.

What other options were available to Grocon?

There were options for Grocon through FWA or the Federal Court, such as for contravening a term of an enterprise agreement, or engaging in adverse action or coercive conduct. However, while some talks did occur through informal industrial relations channels, Grocon’s response was focused on the Supreme Court as the most efficient and effective means to stop the conduct and seek longer term recompense for damage caused. 

There are also other mechanisms under the FW Act which could be used longer term to curtail this sort of conduct, such as potential application for deregistration of the union or suspension or removal of union right of entry permits held by relevant officials. However, such applications are very difficult to sustain in practice. Further, if the relevant union official does not hold a right of entry permit, he or she is not susceptible to FWA discipline.  Accordingly, such processes are not often used and therefore seem to hold little (or no) real deterrence value.

A test for the new Fair Work Building and Construction agency

In the context of this dispute, much criticism was directed at FWBC, the agency which has recently replaced the former ABCC. As the dispute ran into its second week, FWBC was criticised for failing to intervene and suggestions were made (echoing concerns which have been raised since the relevant legislation was amended) that FWBC had less power and was less effective than its predecessor.

In response, FWBC pointed out that the ABCC would have been limited by the same jurisdictional factors and noted that neither agency had the capacity for involvement in the common law proceedings brought by Grocon, although FWBC had undertaken investigation of the parties’ conduct for compliance with relevant legislation. FWBC has since acted decisively by issuing its own proceedings on 5 October 2012 in the Federal Court against the CFMEU and ten individuals for coercion and adverse action under the workplace rights provisions of the FW Act. FWBC is seeking civil penalties and compensation for Grocon and other persons who suffered loss.