Bovis Lend Lease ordered to pay $100,000 penalty

A penalty of $100,000, injunctions and costs have been imposed against Bovis Lend Lease for engaging in conduct in contravention of the Trade Practices Act 1974.

The penalty was imposed by Justice Gyles of the Federal Court following proceedings instituted by the Australian Competition and Consumer Commission.

The proceedings related to an alleged agreement between CFMEU and Bovis affecting Bovis' acquisition of plasterboard services from a contractor, Bernmar Projects Pty Ltd, during the construction of medium density apartments in a development known as "Landmark" in the Australian Capital Territory in 2003. In proceedings against Construction Forestry Mining and Energy Union, Bovis Lend Lease Limited and CFMEU members Mr David Noonan and Mr Laslo (Les) Lancsar, the ACCC alleged that the agreement contravened section 45E(3) of the TPA and resulted in the termination of Bernmar's contract which is prohibited under section 45EA.*

Bovis cooperated with the ACCC from an early stage of its investigation and admitted contraventions of ss45E and 45EA of the Act. In a statement of agreed facts filed with the court, the ACCC and Bovis agreed that Bovis terminated Bernmar's contract because it reached an arrangement or understanding with the CFMEU that it had to cease acquiring Bernmar's services at the Landmark site for the CFMEU to continue negotiations with Bovis on a national enterprise agreement.

Justice Gyles ordered Bovis pay a penalty of $100,000, the ACCC's costs and injunctions restraining Bovis' conduct nationally for a period of four years for its admitted contraventions. In making his orders, Justice Gyles noted Bovis had paid compensation to Bernmar and provided an undertaking to the ACCC to improve Bovis' existing compliance procedures.

"This case, along with the $120,000 penalty imposed on IPM Operation and Maintenance Loy Yang in February this year, emphasises that companies must carefully consider s45E of the Trade Practices Act before making decisions about how they acquire services from third parties when under pressure from unions," ACCC Chairman, Mr Graeme Samuel, said today.

Background

The contested case against the CFMEU, David Noonan and Les Lancsar

Justice Gyles heard the case against Bovis based on Bovis' admissions and independently of the ACCC's contested case against CFMEU, Mr Noonan and Mr Lancsar (union respondents). The case against the union respondents was heard by Justice Finn earlier in September and is complete pending judgment. Justice Gyles' findings do not determine the outcome of the contested proceedings against the union respondents, which must be determined on facts found independently by Justice Finn.

*S45E and s45EA of the Trade Practices Act 1974

s45E prohibits certain conduct which indirectly leads to a secondary boycott. s45E(3) prevents a person entering into a contract, arrangement or understanding with an organisation of employees for a purpose of preventing or hindering that first person from acquiring or continuing to acquire goods or services from a second person. Section 45EA prohibits that first person giving effect to that contract, arrangement or understanding.