The Federal Court has found that construction company J Hutchinson Pty Ltd (Hutchinson) and the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) entered an agreement to boycott a subcontractor at a building site in Brisbane, in proceedings brought by the ACCC.
In 2016, Hutchinson engaged Waterproofing Industries Qld Pty Ltd (WPI), an independent waterproofing contractor, on the Southpoint A Apartments construction project in Brisbane. Shortly after WPI began supplying services, the CFMMEU informed Hutchinson that it would not permit WPI to work on the Southpoint Project because it was not covered by an enterprise bargaining agreement (EBA) with the CFMMEU.
The Court found that Hutchinson and the CFMMEU reached an agreement that Hutchinson would no longer acquire waterproofing services from WPI and that Hutchinson would terminate WPI to avoid conflict with, or industrial action by, the CFMMEU at the site. Another waterproofing contractor with an EBA with the CFMMEU was later engaged on the site.
The Court found that by making and acting on the agreement, Hutchinson contravened sections 45E and 45EA of the Competition and Consumer Act, which prohibit contracts, arrangements or understandings 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 ACCC is extremely pleased with the Court’s decision today. Boycotts are a kind of anti-competitive conduct which harms the economy as a whole as well as individual businesses,” ACCC Chair Rod Sims said.
“We took this action because we considered the agreement between Hutchinson and the union prevented or hindered Hutchinson’s choice about which businesses to hire, and limited subcontractors’ access to construction markets. This type of agreement is likely to have inflated the costs of construction projects.”
Justice Downes said that the evidence provided by the ACCC’s witnesses supported a finding that the motive for the arrangement was “to return to a situation where, as a general rule, subcontractors engaged by Hutchinson at the Southpoint project would have an EBA, being something the CFMMEU pressured Hutchinson to do and which Hutchinson did to avoid industrial action”.
The CFMMEU was found to have been knowingly concerned in, or party to, the contraventions of sections 45E and 45EA by Hutchinson.
The Court also found that the CFMMEU induced Hutchinson’s contraventions by threatening or implying that there would be conflict with, or industrial action by, the CFMMEU if Hutchinson did not stop using WPI.
“We believe this was very serious conduct, and will be putting forward submissions to the Court about the appropriate penalty for this behaviour at a later court hearing,” Mr Sims said.
The Court will decide on penalties and other orders at a later date.
On 4 December 2020, the ACCC instituted civil proceedings about Hutchinson and the CFMMEU in the Federal Court.
Hutchinson is one of Australia’s biggest privately owned construction companies with around 1,800 staff and over $2.5 billion worth of projects annually.
The CFMMEU is a trade union organisation that represents member employees in a number of industries including the construction industry. At the time of the alleged conduct it was known as the CFMEU.
The ACCC was assisted by the Australian Building and Construction Commission during the course of its investigation. The ACCC and the ABCC signed a Memorandum of Understanding in 2017, which was extended in 2021.
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