Federal Court says construction union ‘did not boycott’ and ACCC must pay costs

The ACCC must pay the legal costs of the CFMEU and subcontractor Hutchinson after a Federal Court overturned a $1.3m penalty and a finding they had breached competition law.

The CFMEU has had a court ruling and penalty overturned. Picture: Glenn Campbell

The competition watchdog will have to pay legal costs of the CFMEU and builder Hutchinson, after a Federal Court ruling overturned a combined penalty worth $1.3m and a finding they had breached competition law.

The construction union and subcontractor on Thursday won on appeal and will no longer have to pay penalties of $750,000 and $600,000 each. Previously they had been found to have entered into an agreement to boycott Waterproofing Industries Queensland at a Brisbane building site in 2016.

According to Federal Court judges Michael Wigney, Robert Bromwich and Stewart Anderson, the original decision could not stand.

“The facts as found by the primary judge could not support an inference, to the requisite standard, that the construction company and the union had made or arrived at the alleged arrangement or understanding,” the judgment read.

Hutchinson, one of the nation’s biggest construction companies with 1800 staff and $2.5bn worth of projects annually, engaged Waterproofing Industries Qld (WPI) on the Southpoint A Apartments project in Brisbane in 2016.

But after WPI started supplying services, the Construction, Forestry, Maritime, Mining and Energy Union told Hutchinson it would not permit WPI to work on the Southpoint Project because it was not covered by an enterprise agreement with the union.

The Federal Court in 2022 found that Hutchinson and the CFMEU reached an agreement that Hutchinson would no longer acquire services from WPI and the company would terminate WPI to avoid conflict with, or industrial action by, the union at the site.

Another waterproofing contractor which had an enterprise agreement with the CFMEU was later engaged on the site.

The court had found Hutchinson contravened sections 45E and 45EA of the Competition and Consumer Act, which prohibit contracts, arrangements or understandings for the purpose of preventing or hindering the acquisition of goods or services from a supplier – which is also referred to as a boycott.

Hutchinson pursued nine grounds of appeal including the inference that it made an arrangement, “or arrived at an understanding”, which contained the termination provision as alleged by the ACCC.

“The main thrust of Hutchinson’s challenge to the primary judge’s finding was that it was not open to her Honour to infer, from the primary facts as found, that there was any ‘meeting of minds’ or consensus between Hutchinson and the CFMEU concerning the termination of the contract with WPI,” the judgment reads.

In its appeal, the CFMEU challenged the original finding there was an arrangement between it and Hutchinson.

“Whatever one may think of the propriety of the CFMEU’s conduct in threatening to ‘sit the job down’ if WPI performed waterproofing work at the Southpoint project, the ACCC’s attempt to shoehorn that conduct into the arcane and awkward terms of (the) … act was unsuccessful,” the judgement read.

“The evidence which was before the primary judge was not capable of establishing, to the requisite standard, that Hutchinson made any such arrangement, or arrived at any such understanding, with the CFMEU. Nor was it capable of establishing, to the requisite standard, that both Hutchinson and the CFMEU had the proscribed purpose.”