23 September, 2015
Boral settles damages claim with CFMEU
The fallout from the Construction, Forestry, Mining and Energy Union's (CFMEU) industrial campaign against Grocon over the course of 2012 to 2014 has continued.
On 17 September 2015, Boral settled its damages claim against the CFMEU arising from a black ban that the CFMEU had placed on the use of Boral concrete at construction sites. The black ban was linked to Boral’s decision to continue to supply concrete to Grocon following unlawful blockades at Grocon’s construction sites in 2012.
The settlement is significant, and involves the CFMEU paying Boral between $7 million and $9 million in damages and legal expenses, the CFMEU being required to release a public statement confirming that it will not interfere with Boral’s services, and legally-binding contractual mechanisms prohibiting CFMEU interference with Boral’s business for a period of three years (with significant payments in the event of any breaches).
The cost of illegal conduct grows
To date, the CFMEU’s campaign against Grocon has cost it in excess of $12 million (excluding the CFMEU’s own legal fees which would be significant), comprising of:
- $1.25 million for findings of criminal contempt of court arising from blockades at Grocon sites and interference with subcontractors;
- $3.55 million in legal costs to settle Grocon’s civil claim;
- $545,000 handed down by the Federal Court for unlawful coercion at a Grocon housing project for the long-term homeless in Brisbane; and
- payment of between approximately $7 million and $9 million to Boral.
- In addition, the CFMEU is facing further consequences:
- The Federal Court ruled in March 2015 that the CFMEU and its officials took action against Grocon with the intention of coercing it into complying with industrial demands, in breach of the Fair Work Act. A decision on penalties is pending.
- The ACCC has taken action in the Federal Court alleging that the CFMEU engaged in secondary boycott conduct directed at Boral (in contravention of the Competition and Consumer Act) and that its officials engaged in undue harassment or coercion of Boral in relation to the supply of concrete.
- The Royal Commission into Trade Union Governance and Corruption has heard evidence in relation to the conduct of CFMEU officials, including allegations of blackmail which have been referred to police.
Taking a stand
Boral’s settlement with the CFMEU is largely attributable to the resolute position taken by the company in the face of alleged unlawful interference with its business. The settlement sum is the most significant to date, and provides Boral with an important measure of protection from future interference.
The settlement has been described by an independent market commentator as "an innovative landmark in industrial relations" that "establishes a new and unprecedented template for success in the protection of lawful commerce from illegal union behaviour."
Boral's CEO Mike Kane has stated "we have crafted this as a solution to Boral's problems. We are not saying this is the only way to do it. But this is a creative solution that the lawyers came up with in response to our need to have a clear and swift regime that manages the potential of delay."
The last three years has seen a strong stand taken by building industry employers (Grocon and Boral) and regulators (the FWBC and ACCC) against the CFMEU and its officials for unlawful conduct. To date, Courts have made it clear that such behaviour is unacceptable and carries consequences. This can only serve as a deterrent to future unlawful conduct, and provides employers with a roadmap to follow in future cases.
At the very least, these outcomes demonstrate the importance of companies acting quickly in response to alleged unlawful behaviour, and pressing claims for injunctions and damages following breaches of workplace laws.
For further information, please contact:
John Cooper, Partner, Herbert Smith Freehills
john.cooper@hsf.com
