Somebody buy the movie rights to this story, quick. It has everything. Unions, stand over tactics, boycotts, a Royal Commission, and now a Federal Court prosecution. The only things missing are Jason Statham and a hard rock soundtrack.
It all started when the Construction Forestry Mining and Energy Union (CFMEU) fell out with construction company Grocon. The Union stopped work and picketed Grocon sites. Boral got caught in the crossfire because it was the exclusive concrete supplier to Grocon.
Earlier this year the trade unions Royal Commission heard allegations that CFMEU members banned use of Boral concrete at construction sites in Melbourne or delayed supply by stringing out safety checks on Boral trucks.
It turns out the ACCC was already investigating, and it has now commenced prosecution proceedings against the CFMEU and a couple of its key officers. It alleges secondary boycotts, attempts to coerce Boral to block supply to Grocon, and harassment of Boral generally.
So what’s the deal with boycotts and union actions like this, legally speaking? Although the Competition and Consumer Act primarily targets commercial dealings between businesses, or between businesses and consumers, there are a lot of ways it can get a union into trouble.
- Secondary boycotts: When two or more people, say union members, get together to hinder the supply or acquisition of goods or services between a third and fourth person, say Grocon and Boral, causing the fourth person, Boral, loss, that’s a secondary boycott. It’s prohibited under the Competition and Consumer Act and the maximum penalty is $750k.
- Harassment and coercion: The Australian Consumer Law prohibits undue harassment and coercion in connection with the supply of goods or services. Although originally intended to apply to conduct between a trader and a consumer, the prohibition is broad and should readily extend to cover strong arming, shirtfronting, standing over, and other such union conduct. The maximum penalty is $1.1M.
- Attempts to induce anticompetitive conduct: To top it off, any attempt by a union to induce a business to engage in anticompetitive conduct can earn it up to another $10M in penalties.
All in all, it’s a pretty damning set of allegations. The CFMEU says it will defend the case, although it’s not clear on what basis at this stage. Maybe they’re still trying to figure that part out.