CFMEU holding state progress to ransom

THE militant Construction, Forestry, Mining and Energy Union is waging industrial warfare across the state, pushing up construction costs and robbing at least 1700 Queenslanders of jobs with its increasingly disruptive campaigns.

• Who’s who in the CFMEU

THE building watchdog has been forced to call in interstate reinforcements to deal with a surge in industrial warfare being waged in Queensland by the militant Construc­tion, Forestry, Mining and Energy Union.

As the Federal Government attempts to push legislation through the Senate to curb the CFMEU’s influence, Fair Work Building and Construction says the union is upping the ante with an increasingly strategic campaign of disruption to enforce its stranglehold in the state’s southeast.

It comes as analysis by The Sunday Mail reveals that the excessive construction costs resulting from inflated pay rates and work stoppages are robbing at least 1700 Queenslanders of jobs.

The higher labour costs are pushing up project prices by 11.9 per cent in Queensland, adding $279 million a year to the State Government’s capital works budget, according to a Master Builders-­commissioned report by Deloitte Access ­Economics.

The sites in union sights (scroll down to read more).

That’s more than enough to build the new Townsville Stadium and, based on the Government’s own ­employment figures, could be used to create 808 extra jobs a year.

The union deals will cost an extra $950 million over the next four years in the private commercial building sector, equivalent to the new 1 William St “Tower of Power”, which employed more than 900 workers.

“The level of unlawful behaviour of Queensland construction sites is of grave concern to my agency,” FWBC director Nigel Hadgkiss said.

“In fact, the rate of activity in Queensland is so high that FWBC has had to allocate some of these matters to lawyers based in one of our other offices due to the volume of casework currently being handled by our Brisbane-based legal team.

“More recently, the agency has seen a change in the sophistication and the organisation of alleged unlawful behaviour, with coercion cases now forming the majority of our investigations.”

The strategy involved targeting specific contractors with “multiple disruptions, across multiple sites, on multiple days, even in multiple cities” to “force the contractor to bend to the will of the union”.

The latest action, lodged on Friday, accuses the union of targeting Watpac projects, including a Ronald McDonald House for families of sick children in Brisbane. Seventeen Queensland cases are currently before the courts.

Thirteen involve the CFMEU, with another four against companies that allegedly discriminated against subcontractors who did not have agreements with the union.

“Subcontractors are often family-run enterprises … and the impact of being shut-out of the industry can be devastating to these operators,” Mr Hadgkiss said.

Another 10 investigations are under way, all involving the CFMEU.

And site visits by officials in the state have more than doubled from 37 to 81 for the first eight months of this year.

A rally in Queensland.

Pics: Tim Marsden

Despite a 95 per cent success rate in court, Mr Hadgkiss said “we have not been able to effect a change in the unlawful culture that permeates the commercial building and construction industry”.

The 2013 merger with the Builders Labourers Federation  was a masterstroke for the CFMEU, giving the union unprecedented power over the supply of construction workers, with about 15,000 members in Queensland.

While the CFMEU membership accounts for less than an eighth of the state’s total construction workers, the union’s influence is concentrated — targeting companies that work on major State Government projects and inner-city residential and commercial developments worth $20 million-plus.

During downturns, they will go after lower-value jobs on the city outskirts.

That brings the industrial clout to deliver pay packets ­almost double the federal award — $148,334 for carpenters and $133,359 for labourers — and conditions other employees can only dream of.

Most major companies rely largely on subcontractors for staff and refusal to deal with the CFMEU makes it difficult to source enough workers for key projects.

That, and the fact the union’s domination means the big players do not have to ­compete with each other on ­labour price, means about 70 per cent have signed Enterprise Bargaining Agreements with the CFMEU in the past. Including subcontractors, the number of companies rises to more than 300.

“It’s a case of Stockholm syndrome,” one highly placed industry source said. “Their first thought when they come to do a project is how to keep the union happy and avoid ­disruptions.

“This is the slickest of the slickest of all ‘cartels’.”

CFMEU members.

It is an understandable motivation. Every day of a stoppage on a CBD highrise with an $80 million value costs the builder between $180,000 and $200,000 so the average 1.5 per cent profit margin on a project can be wiped out very quickly.

After winning a tender, the principal contractor will typically vet the list of proposed subcontractors against the CFMEU’s “approved” firms.

Getting on the list means guaranteed access to the big jobs. But it comes at a price.

“Jump-up” clauses in contracts means that regardless of what agreement they may have in place with their employer, all subcontract and labour hire workers get the same level of pay and conditions as those agreed by the main contractor.

Principal contractors will encourage “subbies” to sign an EBA with the union to avoid the inevitable walk-offs that will flow from using non-union labour on their sites.

Some subcontractors are ­reluctant to do so because they would then be stuck with the inflated wages and conditions across their workforce for the four years of the agreement, regardless of the scale of other projects.

To overcome that, subcontractors are commonly urged by the CFMEU to form two companies — Company A with a CFMEU agreement to work on specific developments, and Company B for so-called “private” work.

But some owners deliberately limit the growth of their firms so they do not need to get involved in the scale of projects that would require them to deal with the union — generally projects below $20 million and not within the CBD district of Brisbane.

When a firm is ready to do business, they complete a one-page CFMEU “expression of interest” form — and pay a $1900 fee — for the union to prepare a proposed collective agreement to take back to their staff to vote on, knowing that getting the work depends on a “yes”.

Companies that refuse to sign an EBA, or allow non-union labour on to their sites, can expect to be targeted with expensive and often unlawful industrial action.

The Government’s new Australian Building and Construction Commission legislation will attempt to break up the “cartel” if it is passed by the Senate.

THE SITES IN UNION SIGHTS

■ Nine Hutchinson Builders sites in Brisbane disrupted or shut down 15 times, involving 750 staff, over three weeks. A Federal Court judge earlier this month banned the CFMEU from further stoppages at Hutchie sites.

■ This week, the FWBC filed proceedings in the Federal Court, alleging six Watpac projects, including Chandler’s Anna Meares Velodrome, were shut for two days after the company hired a subcontractor with no CFMEU enterprise agreement.

■ FWBC is still investigating CFMEU actions on LendLease sites after the Fair Work Commission banned industrial action at six sites, after a union-organised week-long blitz of unlawful strikes by 450 workers from 60 subcontractors over stalled EBA talks.

■ Work at Cararra’s Commonwealth Games precinct was effectively halted for 15 days.

NICE WORK IF CFMEU CAN GET IT

The union’s enterprise bargaining agreement for 2015-19 includes:

• Pay rises of 5 per cent per year for five years

• Union delegates to be “reclassified” to higher level 5 per cent above trade level

• “Jump-up” clause requires subcontractors to pay same rates as main builder on project

• Tool allowance of $2380 per year for labourers and $6430 for tradesmen. If an employer “borrows” a power tool for use by another worker, they must replace it with a new one

• Site allowance ranging from $1.70 per hour for a project worth up to $20 million, up to $8 per hour for those over $700 million

• Range of hourly allowances for working with various materials

• 26 guaranteed rostered days off per year, on dates set by the union and usually timed to extend public holidays and weekends. Varied only with approval of divisional branch secretary

• Entry to work sites without notice for delegates

• Paid time off for union meetings or activities for up to two hours twice per shift

• Up to two days of bereavement leave for the death of another worker on the same site or a worker engaged elsewhere by the same contractor

• Up to five days of unpaid leave, without notice and without approval of the employer

Originally published as CFMEU holding state progress to ransom