The Federal Court has ordered the Construction, Forestry, Mining, and Energy Union (CFMEU) to pay $1 million in penalties for secondary boycotts against Boral and Alsafe at construction sites in Hawthorn and Richmond, Victoria.

The court ruled that the CFMEU contravened section 45D(1) of the Competition and Consumer Act 2010 (CCA) by engaging in conduct in concert with a shop steward at both sites which hindered or prevented the acquisition of concrete from Boral and its subsidiary Alsafe for the purpose of causing substantial loss or damage to Boral’s business.

It further ruled that the conduct was likely to have the effect of causing substantial loss or damage to Boral.

Justice Middleton ordered the CFMEU to pay a penalty of $500,000 for each of the two contraventions. His Honour also ordered the CFMEU to include practical training about section 45D of the CCA in each of its shop steward training courses in Victoria for five years.

“This is the highest penalty ever awarded for a breach of the secondary boycott provisions. It signifies the seriousness with which the Court regarded the conduct,” ACCC Chairman Rod Sims said.

“The commercial construction industry is economically important for Australia and this type of conduct can impact the targeted companies as well as sub-contractors and competition in the industry more generally. We pursued this matter for five years because we wanted to send a strong message to others that this sort of conduct is illegal and will not be tolerated.”

The Court is yet to make orders for costs and the time for any appeal on liability will only commence when the costs order is made.

Note to editors

Secondary boycott conduct, which is prohibited under section 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.

Background

The ACCC started proceedings against the CFMEU in November 2014 alleging secondary boycott conduct at 12 commercial construction sites across metropolitan Melbourne. In November 2017 the Federal Court published its judgment on liability in the ACCC v CFMEU case. The Court also made non-publication and suppression orders, meaning parts of the judgment are redacted.

The ACCC is unable to comment further on the judgment and orders because of these non-publication and suppression orders.