Court finds Hutchinson and CFMMEU engaged in “anti-competitive” boycott

Court finds Hutchinson and CFMMEU engaged in “anti-competitive” boycott

The Southpoint Apartments in Brisbane.

Construction giant Hutchinson and the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) have been found by the Federal Court to have entered an agreement to boycott a subcontractor at a building site in South Brisbane.

The finding, welcomed by the Australian Competition and Consumer Commission (ACCC), relates to the pair banning an independent waterproofing contractor from the Southpoint Apartments construction project as the company was not covered by an enterprise bargaining agreement (EBA) with the union.

The company in question, Waterproofing Industries Qld (WPI), was engaged to work on the project in 2016.

The Court found that Hutchinson and the union reached an agreement that the construction company would no longer acquire waterproofing services from WPI to avoid conflict with, or industrial action by, the CFMMEU at the site.

Following this, another waterproofing contractor with an EBA with the CFMMEU was engaged on the site.

As such, the Court found Hutchinson contravened the Competition and Consumer Act which prohibits contracts, arrangements or understandings for the purpose of preventing or hindering the acquisition of goods or services from a supplier - also referred to as a ‘boycott’.

“The ACCC is extremely pleased with the Court’s decision today,” ACCC chair Rod Sims said.

“Boycotts are a kind of anti-competitive conduct which harms the economy as a whole as well as individual businesses.

“We took this action because we considered the agreement between Hutchinson and the union prevented or hindered Hutchinson’s choice about which businesses to hire, and limited subcontractors’ access to construction markets. This type of agreement is likely to have inflated the costs of construction projects.”

The Federal Court’s Justice Downs said that the evidence provided by the ACCC’s witnesses supported a finding that the motive for the arrangement was “to return to a situation where, as a general rule, subcontractors engaged by Hutchinson at the Southpoint project would have an EBA, being something the CFMMEU pressured Hutchinson to do and which Hutchinson did to avoid industrial action”.  

The CFMMEU was also found to have been knowingly concerning in, or party to, the contraventions of the Act by Hutchinson.

Further, the Court found the CFMMEU induced Hutchinson’s contraventions by threatening or implying that there would be conflict with, or industrial action by, the Union if Hutchinson did not stop using WPI.

“We believe this was very serious conduct, and will be putting forward submissions to the Court about the appropriate penalty for this behaviour at a later court hearing,” Sims said.

The Court will decide on penalties and other orders at a later date.

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