Chance for a CFMEU clean-out – but the devil will be in the detail

Underworld infiltration. Late-night intimidation. Kickbacks for access to big government projects. Bullying and harassment on building sites.

A catalogue of misconduct at the CFMEU’s Victorian and NSW branches, captured on secret surveillance vision and tapped phone calls published by The Age, The Australian Financial Review and 60 Minutes, has revealed how the construction union wields power in the building industry, including on the Victorian government’s $100 billion Big Build.

Genuine reform is needed at the CFMEU.Credit: Peter Rae

The rot started under Norm Gallagher’s Builders Labourers Federation in the 1980s, but continued to flourish under CFMEU boss John Setka. His heavy influence over the Victorian branch since 2012 heralded an aggressive and crooked style of unionism, with bikies joining senior ranks and dissenters intimidated into silence.

Setka resigned as a result of the investigation, which among other things exposed CCTV footage showing the dumping of a suitcase with “dog” scrawled on it at a rival union official’s home. He will go down in history as one of Australia’s most notorious union figures.

The next steps will be key if genuine reform is to be achieved at the CFMEU. A thorough clean-out of Setka’s cronies – the corrupt, the violent and all underworld figures – is needed. A new generation of decent unionists must take their place.

It will require strong and concerted action from the federal Labor government, which ought to get some credit for its swift and effective response so far to the damning revelations.

Powerful construction union boss John Setka resigned this month.Credit: Jason South

Workplace Relations Minister Tony Burke has referred the revelations to the federal police for investigation and called for the Fair Work Ombudsman to review some of the CFMEU’s wage deals. Most significantly, the union will be taken over by an independent administrator who will work as a temporary chief.

Premier Jacinta Allan has paused political donations from the CFMEU, and is pushing state Labor to suspend the union’s local branch.

These decisions, taken in response to the investigation, are positive steps.

But to be effective, the independent administrator will need to be knowledgeable of the complex inner workings of union structures and have strong powers to remove elected officials where necessary. They will need to restructure the organisation, recruit staff and ensure it is run well.

Burke has shown he is serious about genuine reform, committing to put a draft law to parliament if necessary to overcome any objections from the union – but the devil will be in the detail.

The move has been successful in the past. An administrator appointed to take over the formerly corrupt Health Services Union in 2012 successfully cleaned up its culture, leaving it in a far better place, with growing numbers and better advocacy for workers.

Still, one might argue it should not have taken this long for the government to act.

Were Setka’s remarks claiming anti-domestic violence campaigner Rosie Batty’s advocacy had diminished men’s rights, his domestic violence offences and the use of underworld figure Mick Gatto to resolve conflicts not enough? Was Labor hesitant to bite the hand that feeds?

These are fair considerations.

It is evident that the CFMEU cannot be trusted to clean up its own act. It is fanciful to think that reform is possible under some other senior members of the union who have come under fire – the likes of Derek Christopher, the Victorian CFMEU boss positioning to replace Setka, or national secretary Zach Smith, who backs NSW secretary Darren Greenfield and refuses to condemn Setka.

The business community has called for the return of the Australian Building and Construction Commission, which was set up by the Howard government after the Cole royal commission into the building and construction industry.

The regulator is not likely to be restored by Labor, which abolished it in 2022. It is noteworthy that despite presiding over the industry for nearly two decades with extraordinary powers to compel witnesses to provide evidence with the threat of jail, the ABCC did not halt the CFMEU’s crooked dealings.

Australia has held two royal commissions into the CFMEU and the construction industry in a quarter of a century – one in 2002 and 2014. We know the problems. What we need now is radical organisational change.

A deep clean of the union will not happen overnight, but an independent administrator who can root out the seeds of corruption and transform the CFMEU into a democratically run union with good governance, proper checks and balances and strict anti-corruption rules is needed.

It may also be time to implement a “fit and proper person” test for holding a union office.

If carried out effectively, these efforts will shape the future of the construction union and broader labour movement for the better.

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