Union delegates are demanding construction companies honour back pay from March 1

Construction companies working on Big Build projects are being told to back pay huge bills or risk being kicked off sites due to the new wage agreement for CFMEU members.

Construction companies working on Big Build projects say they face back-pay bills of $100,000 to $500,000 each or risk being kicked off sites due to the new wage agreement for CFMEU members.

Subcontractors who provide services on building sites such as traffic management have revealed that union delegates are demanding they honour back pay from March 1, despite the fact the workplace agreement has not yet been ticked off by the Fair Work Commission.

The deal, which was thrashed out by multinational building giants and industry representatives such as the Master Builders Association, includes a wage increase of 5 per cent a year over four years, which would also be applied to allowances.

Members of the Victorian CFMEU construction division, which is set to be put in administration due to allegations of kickbacks, rorts, and consorting with criminals, voted to back the deal last month when one official joked that with a 20 per cent pay hike there were “not enough Ford Rangers in the country” to satisfy demand.

Members of the Victorian CFMEU construction division voted for the pay deal last month. Picture: Nicki Connolly

The union’s website has already published the new pay rates, which would see labourers on Big Build projects – working 56-hour weeks – earn more than $216,000.

Building companies, who declined to be named due to a fear of repercussions from the union and its enforcers, said they were told to agree to back-pay terms, which could cost half a million dollars for those with hundreds of workers on sites, if they wanted to keep working on government sites.

One subcontractor told the Herald Sun that with more than 200 employees they could not pay the bill and would collapse, and said EBAs should be renegotiated in light of allegedly corrupt practices recently unveiled.

“They (the CFMEU) are wanting back pay so they can go back to their members beating their chests and saying ‘yeah boys we got them to back pay you’,” they said.

Building companies said they were told to agree to back-pay terms if they wanted to keep working on government sites. Picture: Andrew Henshaw

“But they have no idea about business. They don’t realise that money has to come from somewhere. And that’s people losing their jobs. The union just think it’s endless cash. Take, take, take. It’s all they know how to do.”

The subcontractor said union delegates had warned companies that refused to back pay to March 1 would be black-listed from CFMEU EBAs, which major builders are now using as prerequisite for subcontractor deals for work on mega projects such as the $26bn North East Link and $34.5bn Suburban Rail Loop.

“How is it that these massive companies are allowing this to happen? It kills competition,” one industry source said.

CFMEU national secretary Zach Smith said this week the current EBA sitting with the Fair Work Commission would not be affected when the national branch put the Victorian branch into administration.

Companies have been warned that if they refuse to back pay to March 1 they will be black-listed from CFMEU EBAs. Picture: David Geraghty

However, Victorian Premier Jacinta Allan has urged the federal government to review all EBAs, and Workplace Relations Minister Tony Burke said on Wednesday he had requested that the Fair Work Ombudsman probe all enterprise agreements made by the Victorian branch that applied to Big Build projects.

“We’re seeking information on coercive behaviour,” Mr Burke said.

“The government has no intention of taking any action which would put at risk the terms and conditions of employment of the workers who are covered by those agreements. This is not their fault.”

Master Builders Victoria, which was a party to the EBA negotiations for a pattern CFMEU deal, backed the agreement.

“Where enterprise agreements have been freely made by employers and genuinely agreed by employees, there is no reason for any enterprise agreement application to be stopped or reviewed after approval,” a statement said.

“We understand the template CFMEU enterprise agreement will not be appropriate for every business.”

Jacinta Allan has urged the federal government to review all EBAs. Picture: Andrew Henshaw

It comes as ACTU boss Sally McManus revealed that she has no doubt Mr Setka “hates her guts”, after the organisation moved to suspend the Victorian branch.

Labor’s national executive has also suspended the militant union, barring it from giving political donations.

The ALP’s national secretary Paul Erickson said the suspension would be enforced “until further notice” and apply to the union’s construction divisions in NSW, Victoria, South Australia and Tasmania.

Senior Albanese government ministers have backed the decision to stop donations from the union.

“The ALP has an interest in making sure that donations we receive aren’t tainted from infiltration from criminal gangs, which seems to be occurring here,” Senator Murray Watt said.

Former union boss Bill Shorten said he expected that the executive would stop receiving donations from the CFMEU “until their house is cleaned”.

Coalition analysis of donations data shows Labor has received $6.2m from the CFMEU since Mr Albanese became leader in 2019, including almost $1m from the Victorian branch.