Royal commission hears construction firm feared angering powerful union
Evidence shows the CFMEU held enough sway over the Labor government that a major builder suspected it knew about tenders before they were released.
By Harper Collins ·
A major construction company feared that offending the Construction, Forestry and Maritime Employees Union would damage its relationship with the Victorian government. The commission into corruption on major infrastructure projects heard this fear was rooted in the union’s close ties to the Labor government led by Daniel Andrews.
Counsel assisting Chris Young KC told the commission that internal documents from John Holland revealed the company’s anxiety. In a 2017 email, the firm noted the union’s relationship with the Andrews government and how it would impact client relationships. The company suspected the CFMEU possessed substantial knowledge of proposed government tenders before they went to market.
John Holland officials wrote that they were mindful of the optics in their interactions with union stakeholders. By 2021, the company’s view had hardened. It noted that the union was emboldened by its success on major projects and enjoyed a level of influence within the state government not seen in previous years.
The hearings focus on a level crossing removal project at Gap Road in Sunbury, north of Melbourne. The project involved building a new rail bridge and underpass. Four CFMEU officials who later stopped work at this site had also interfered with the Metro Tunnel project. Young told the commission these officials entered the Gap Road eastern portal 29 times in January 2020 to conduct activity considered unlawful.
The risk of industrial action on the Gap Road project was rated as very high. The situation escalated in May 2022 as union officials appeared on site more regularly. By early June, Neil Thompson, the health and safety manager for the Rail Network Alliance, was calling police for help. Union officials were sitting on barriers and refusing to move, stopping work on the bridge construction.
Internal notes from that period contained warnings to workers. The CFMEU officials allegedly told staff that they better not turn up for night shifts or they would be smashed during the day. They also threatened that workers’ lives would be made very difficult if they continued on the project.
On June 6, 2022, Thompson called WorkSafe. He said Victoria Police could not force the union off site. He noted that WorkSafe had also said there was nothing they could do. Thompson said the team was just having to put up with no work happening.
The next day, a 13-minute meeting took place, followed by a session at the CFMEU. Joe Myles and Paul Tzimas, two CFMEU officials, attended along with four project officials. The meeting resolved the immediate issues. Young noted that the commission has documentation on the events leading up to this meeting but relies on witness memory for what happened inside it.
The disruption lasted 36 hours. After the stoppage, the project hired new traffic controllers. Their hourly rate jumped from about $45 to $88, or from $59 to $147 for penalty rates. A single 10.5 hour shift that previously cost $609 now cost $1,225.
A September briefing for then Transport Minister Jacinta Allan estimated that the union’s campaign to increase traffic controller rates could cost the Major Transport Infrastructure Authority $60 million to $78 million on current projects. The cost for projects in the planning stage was estimated to be well in excess of $400 million.
