ACCC Takes Court Action Against CFMEU Alleging Secondary Boycott Action

The Australian Competition and Consumer Commission (ACCC) has instituted proceedings in the Federal Court against the Construction Forestry Mining and Energy Union (CFMEU), alleging it engaged, or attempted to engage, in secondary boycott conduct directed at Boral Resources (Vic) Pty Ltd and Alsafe Premix Concrete Pty Ltd (collectively Boral), in breach of the Competition and Consumer Act 2010 (Cth) (the CCA).

Background

Since 2012, the CFMEU has been in dispute with Grocon. The dispute has included CFMEU initiated work stoppages and picketing at certain Grocon construction sites. In response, Grocon has taken its own proceedings seeking injunctions and damages.

Boral is Grocon’s exclusive concrete supplier. It is alleged that, as a result of Boral continuing to supply Grocon with concrete during the CFMEU’s dispute with Grocon, the CFMEU targeted Boral by banning it from supplying concrete on metropolitan Melbourne commercial construction sites.

In March 2014, the Federal Government established the Royal Commission into Trade Union Governance and Corruption (the Royal Commission). The Royal Commission’s inquiries have included consideration of the conduct by the CFMEU directed at Boral.

Counsel assisting the Royal Commission has made submissions to Commissioner Heydon in relation to this alleged conduct by the CFMEU. Among other things, Counsel assisting the Royal Commission has submitted that:

• the CFMEU engaged in secondary boycott conduct in hindering or preventing the acquisition of Boral concrete at certain commercial construction sites in metropolitan Melbourne; and
• the CFMEU and Boral customers engaged in cartel conduct by entering into a contract, arrangement or understanding to cease acquiring Boral concrete at certain commercial construction sites in metropolitan Melbourne.

The ACCC has conducted its own extensive investigation of allegations against the CFMEU independently of the Royal Commission in accordance with the ACCC’s role as an independent statutory authority. The outcome of ACCC’s investigation supports the submissions made by the Royal Commission in relation to allegations the CFMEU engaged in secondary boycott conduct directed at Boral. However, the ACCC’s investigation did not identify evidence which supported allegations that Boral customers engaged in cartel conduct. The Boral customers that gave evidence to the ACCC after being served with a compulsory notice appear to have made decisions independently of the actions of other Boral customers.

The ACCC alleges that the CFMEU engaged in secondary boycott conduct directed at Boral at commercial construction sites in Deer Park, Officer, Port Melbourne, Hawthorn, Tarneit, Richmond, Lilydale, Notting Hill, Williams Landing, Werribee and, in Flinders Street and Elizabeth Street in Melbourne CBD.

Definition of Secondary Boycott Conduct

Secondary boycott conduct, which is prohibited under s 45D of the CCA, involves at least two people acting in concert to hinder or prevent third parties from acquiring goods or services from, or supplying goods or services to, a fourth person, with the purpose and effect, or likely effect, of causing substantial loss or damage to the business of the fourth person.

The use of undue harassment or coercion in connection with the supply or possible supply of goods or services is prohibited by s 50 of the Australian Consumer Law.

The CCA also relevantly prohibits, in s 45E - contracts, arrangements or understandings between an organisation of employees, such as the CFMEU and a supplier which contain a provision included for the purpose of preventing or hindering the supply of goods to a person whom that supplier is accustomed, or under an obligation, to supply.

Further Allegations Made By The ACCC

The ACCC alleges that between February 2013 and April 2014, the CFMEU instructed shop stewards to ban the use of Boral concrete at commercial construction sites in metropolitan Melbourne. Shop stewards then allegedly told Boral customers that on certain commercial construction sites, Boral concrete was not permitted, or that safety checks on Boral concrete trucks, causing significant delays, would be conducted if a customer proceeded to acquire Boral concrete.

The ACCC also alleges:

• the CFMEU, Mr John Setka, the Secretary of the Victoria – Tasmania Branch of the Construction and General Division of the CFMEU (CFMEU-VIC) and Mr Shaun Reardon, the Assistant Secretary of the CFMEU-VIC, attempted to induce Boral to enter into a contract, arrangement or understanding not to supply concrete to Grocon; and
• the CFMEU, through conduct of Mr Setka and Mr Reardon, engaged in undue harassment or coercion of Boral in relation to the supply of concrete.

ACCC Chairman Rod Sims said:

The ACCC is seeking pecuniary penalties, declarations and injunctions against the CFMEU, Mr Setka and Mr Reardon, as well as publication orders against the CFMEU.

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ACCC takes court action against the CFMEU alleging secondary boycott and undue harassment or coercion - ACCC Release MR 283/14