The Full Federal Court has upheld appeals by the Construction, Forestry and Maritime Employees Union (CFMEU) and construction company J Hutchinson Pty Ltd against an earlier judgment in favour of the ACCC.
The trial judge had found that the CFMEU and Hutchinson entered into an agreement to boycott a waterproofing subcontractor at the Brisbane Southpoint A apartments construction site in 2016, meaning the subcontractor could no longer perform the work.
The decision by the Full Federal Court overturns the trial judge’s decision that the CFMEU and Hutchinson entered into and gave effect to a boycott agreement. The Full Court found that there was insufficient evidence to support the inference that there had been an agreement between CFMEU and Hutchinson to terminate the waterproofing contractor to avoid conflict with, or industrial action by, the CFMEU at the site.
“We brought these enforcement proceedings because we believed that the arrangement between the union and the builder prevented a waterproofing subcontractor from supplying its services,” ACCC Chair Gina Cass-Gottlieb said.
“Boycott conduct is a type of anti-competitive arrangement, which is a serious matter. This type of conduct can stifle competition, including in the construction industry where it can lead to inflated construction costs.”
“All businesses and trade unions should be aware that boycott conduct is illegal, and that the ACCC will take appropriate enforcement action against this type of anti-competitive conduct,” Ms Cass-Gottlieb said.
The ACCC is carefully considering the Full Court’s judgment.
Background
Hutchinson is one of Australia’s largest privately owned construction companies.
The Construction, Forestry and Maritime Employees Union is a trade union organisation that represents members in a number of industries including the construction industry. At the time of the proceedings it was known as the ‘CFMMEU’, and today as the ‘CFMEU’.
On 4 December 2020 the ACCC instituted proceedings against Hutchinson and the CFMEU.
On 14 February 2022 the Federal Court found that by making and acting on the agreement, Hutchinson contravened the Competition and Consumer Act, which prohibit contracts, arrangements or understandings containing a provision included for the purpose of preventing or hindering the acquisition of goods or services from a supplier, which is also referred to as a boycott.
The CFMEU was found to have been knowingly concerned in, or party to, the contraventions by Hutchinson.
The Court also found that the CFMEU induced Hutchinson’s contraventions by threatening or implying that there would be conflict with, or industrial action by, the CFMEU if Hutchinson did not stop using the particular subcontractor.
On 30 August 2022 the Federal Court ordered Hutchinson and the CFMEU to pay penalties of $600,000 and $750,000 respectively, which have been paid.