CFMEU Allegations Batter Bruised Building Sector

Allegations that the Construction, Forestry and Maritime Employees Union (CFMEU) had potential links to criminal gangs have put the future of the union that represents about 100,000 construction workers under a cloud.

The allegations by the Australian Financial Review, The Age, The Sydney Morning Herald and 60 Minutes were wide-ranging and nothing if not explosive. 

Following an investigation by the media organisations, allegations were made that CFMEU officials were engaged in the intimidation of rival union bosses, and suggested that individuals associated with organised crime had infiltrated major Victorian and New South Wales construction projects. 

Criminals, allegedly linked to biker gangs, had reportedly secured jobs as CFMEU delegates and were involved in Victoria’s Big Build project, a $100-billion road and rail infrastructure program.

It was announced Victorian CFMEU boss John Setka had left the union on July 12 ahead of the allegations being made public. On the morning of July 15 it was revealed that the Victorian branch of the union had brought in administrators. 

In a statement to the media, the CFMEU said it had held an emergency meeting at which the national office assumed all senior executive powers in Victoria.

CFMEU national secretary Zach Smith said he would use the new powers “to immediately establish an independent process, overseen by a leading legal figure, to investigate any credible allegations of wrongdoing”.

▲ CFMEU national secretary Zach Smith.

“The CFMEU has zero tolerance for criminality and anyone found to have engaged in criminal conduct while representing the CFMEU will be identified and removed,” Smith said.

“[But] cancel culture will never be our culture.

“Our union operates in a tough industry in which people are badly hurt or killed every week and in which shonky developers and contractors are allowed to run rampant.

“There are corporates and right-wing politicians who want our union to go away and they’re not motivated by any actual ethical concerns, they just don’t believe blue collar workers deserve decent pay or proper safety standards on site.”

The Master Builders of Australia said that union representatives had a “comprehensive disregard for the law and the industry it claims to represent” and urged Prime Minister Anthony Albanese to “clean up this mess”.

“The investigation confirms what we have heard from builders on the ground, ongoing coercion and bullying tactics employed by union representatives to accept pattern EBAs conditions including who they can and can’t hire on site,” the MBA said in a media statement.

“It’s clear the industrial relations system in building and construction is broken.”

▲ The CFMEU accounts for less than 10 per cent of industry participants according to Master Builders, includes workers on Big Build projects.

In an ABC interview, Minister for Employment and Workplace Relations Tony Burke said that the extent of the alleged criminal activity was “absolutely abhorrent”. He did not rule out deregistering the CFMEU altogether. 

But what this means for developments in which CFMEU members are involved is yet to be determined, given the uncertain future of the union and its branches.

And it is not only the Victorian and NSW branches facing issues.

Last week the Fair Work Ombudsman fined CFMEU and three of its officials $247,540 for unlawful conduct described as “thuggish” and “threatening” at a construction site in Adelaide.

According to some in the industry, union interventions are one of the factors to blame for a decline in productivity in the construction sector, with Productivity Commission data highlighting a 1.8 per cent decline in the past year.

Added to increasing materials costs, planning issues and a host of other factors, the CFMEU issues do nothing to bolster confidence in the construction sector.

And as pressure grows for a royal commission or judicial inquiry into the CFMEU, there’s little doubt resolution will neither swift nor easy.