Refusing to do business with a tiling subbie has cost a respected building company tens of thousands of dollars in fines and seen two executives individually fined as well – all because the company was doing the union’s bidding.
The subcontractor had advised the construction firm that it was ready to go on a project in the Brisbane suburbs, that it had a team of experienced workers standing by. The major firm indicated that the job was theirs although they wanted to see the subbie’s “union-endorsed EBA”.
When the subcontractor responded that it had its own, validly made and FWC approved agreement which did not involve any union, the major firm pulled the plug on the subbie. In an e-mail, an executive advised the tiling company that since it didn’t have a union agreement, it was not going to be getting any work with that firm.
So the small company complained and the court found for them, saying the behaviour of the larger company had fitted “into the worst category”. The court found that the subbie was entitled to the benefit of its own agreement and therefore had a workplace right which had been infringed.
The judge used strong language in condemning the behaviour of the major firm, claiming that its behaviour “strikes at the heart of freedom of association” and if “the only way in which (small sub-contractors) can break into those circles is to have made an agreement with the CFMEU, then the whole fabric of our industrial relations system will disintegrate”.
The judge fined the company $25,575 (towards the upper limit permissible), and the two executives $1,800 each. This judicial decision is important because if a supplier or sub-contractor is denied work because it does not have a union sanctioned agreement, then adverse action for a prohibited reason has occurred. The union won’t suffer any penalty or reputational damage, the courts will come after the company, and the decision-makers in it. Firms and senior staff need to be very careful about cosying up to unions to this extent.