Striking CFMEU workers at the Grocon Emporium building site in Melbourne make their feelings known in September, 2012. Credit: Jesse Marlow The CFMEU has been facing fresh scrutiny in the royal commission over conduct on worksites and its relationship with an organised crime figure in NSW. Further hearings are likely to be held in Victoria. The Victorian CFMEU's simmering feud with arch-enemy Grocon was raised in the royal commission last year amid evidence that state secretary John Setka allegedly led a two-year "black ban" of Boral construction materials from almost all CBD worksites to force the concrete company to stop supplying Grocon. The feud between the CFMEU and Grocon, largely over site safety and the appointment of shop stewards, famously came to a head in 2012 when a blockade at Grocon's large Myer Emporium worksite on Lonsdale Street erupted into violent clashes with police, shutting down part of the CBD. The CFMEU has previously been convicted and handed heavy fines for defying court orders and unlawfully stopping work on the Emporium project and a Footscray building development.

Grocon's Emporium site on September 7, 2012. Credit:Luis Enrique Ascui Fines of $1.25 million for contempt were among the heaviest handed down against an Australian union. Grocon executive chairman Daniel Grollo confirmed on Sunday that the CFMEU would pay Grocon $3.55 million to settle the company's damages claim. "For well over a decade, Grocon has advocated that the law should be upheld by all participants in the construction industry – employers, employees and unions alike – as it is in other industries in Australia," Mr Grollo said. "We are pleased that the legal process has resulted in a commercial resolution of this matter."

A CFMEU spokesman said the settlement deed denied liability and the sum was only a payment for Grocon's lawyers' legal costs, with "not one cent" going to the company. "This dispute was always and will always be about the safety of building workers and the general public," a spokesman said. "This settlement means that not one cent of CFMEU members' money will go to a company that continues to flout safety and put lives at risk in the name of profit." Legal sources said Grocon's legal costs were up to $3.9 million. In separate proceedings on Friday, the Federal Court issued a strong warning to the CFMEU as it handed down fines of $545,000 for union officials' unlawful coercion at a Grocon housing project in Brisbane.

"An industrial organisation, be it an employer organisation or an employee organisation, which persistently abuses the privilege by engaging in unlawful conduct, cannot expect to remain registered," Justice John Logan said. Several CFMEU officials, including Joseph Myles, were fined up to $40,000 each, while the union was fined $400,000, for disrupting work on the housing project for seven days in a bid to coerce Grocon to sign an enterprise agreement. The court referred to the CFMEU's "outrageous disregard in the past and also in the present case of Australian industrial norms". According to the court, CFMEU officials' actions "impeded, hindered or denied" Grocon employees, subcontractors and delivery people from accessing the site through "verbal threats and statements" as well as physically blocking the main gate with vehicles.