Construction, Forestry, Mining and Energy Union v Fulton Hogan Construction Pty Ltd

[2017] FWC 3411

[2017] FWC 3411

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Construction, Forestry, Mining and Energy Union
v
Fulton Hogan Construction Pty Ltd
(C2017/123)

COMMISSIONER MCKENNA SYDNEY, 30 JUNE 2017

Alleged dispute about any matters arising under the enterprise agreement.

[1] On 9 January 2017, the applicant in this matter, the Construction, Forestry, Mining and Energy Union (“CFMEU”) lodged an application to deal with a dispute pursuant to s.739 of the Fair Work Act 2009 (“the Act”). The respondent to the dispute is Fulton Hogan Construction Pty Ltd (“Fulton Hogan”). At its core, the dispute relates to the CFMEU’s concerns about matters with respect to arrangements around subcontractors, although a broader range of matters also arose in the proceedings.

[2] The relevant enterprise agreement is the Fulton Hogan Eastern Construction (NSW Civil Projects) Enterprise Agreement 2016 (“the Agreement”). The dispute resolution procedure in the Agreement is set-out in cl.48, which reads:

“48. DISPUTE RESOLUTION PROCEDURE

The Parties to this Agreement agree to facilitate the constructive and speedy resolution of any issue of concern at the workplace and recognise that this commitment is critical to maintaining harmonious relations between Fulton Hogan and its Employees and to ensure that the Client and Fulton Hogan achieve the completion of the project within the specified time and cost.

(a) An Employee or Employees with a concern or dispute will first meet and confer with their immediate supervisor. An Employee or Employees may elect to seek the assistance from the Employee Representative or an independent person of their choosing at any stage of discussions and/or the grievance procedure to resolve the concern or dispute.

(b) If the matter is not resolved at such a meeting the parties will arrange further discussions involving more senior management commencing with the Project Manager. Should the matter remain unresolved then it will be referred to the Operations Manager or the manager for Employment Relations, the Division HR manager as deemed appropriate to the particular circumstances.

(c) All Parties must use their best efforts to resolve the grievance expeditiously and to the satisfaction of all Parties. In the event there is no agreement to refer the matter to a more senior level, or if it is agreed that such a reference would not resolve the matter, the parties, or their representatives, shall jointly or individually refer the matter to the Fair Work Commission for assistance in resolving the dispute.

(d) FWC may deal with the dispute using all the procedures available to it under the Act and may attempt to settle the dispute by conciliation or mediation or, where the parties agree, a recommendation or expression of opinion by FWC.

(e) If the dispute remains unresolved, FWC may settle the dispute by arbitration.

(i) Subject to subclause (f) below, a decision of FWC under this dispute resolution procedure will bind the parties.

(ii) Notwithstanding subclause (a) above, either party may exercise a right of appeal against the decision to a Full Bench.

(f) Any decision by the Fair Work Commission shall not be inconsistent with the National Code of Practice for the Construction Industry and the Australian Government Implementation Guidelines for the National Code of Practice for the Construction Industry, together with the NSW Code, the Implementation Guidelines or legislative obligations.

(g) Whilst the above procedures are being carried out, work will continue as it did prior to the issue arising. Sensible time limits must be allowed for completion of the various stages of discussion. However, the parties must co-operate to ensure that the disputes resolution procedures are carried out as quickly as possible.

(h) Neither Party shall be prejudiced as to final settlement by the continuation of work in accordance with this clause.”

[3] Clause 59 of the Agreement relates to the use by Fulton Hogan of subcontractors, in the following terms:

“59. USE OF SUBCONTRACTORS AND LABOUR HIRE

It is acknowledged by the parties that the Company is primarily engaged in the construction of civil infrastructure projects on behalf of the State and Federal Governments. Further, it is acknowledged by the parties that the ongoing capacity of the company to tender for State and Federal Government projects rests on the ability of the company to meet State and Federal Government requirements. The parties acknowledge that the Company's ability to tender for such work impacts on the job security of Employees. As such, the Company commits to the following:

(a) To maintain strict vetting and compliance regimes in respect to contractors and supplementary labour providers who are engaged or are to be engaged by the Company to perform work falling within the application of this agreement,

(b) To engage subcontractors and supplementary labour providers to perform work falling within the application of this agreement, that meet their obligations under the Fair Work Act, applicable industrial instruments, workplace health and safety legislation and other statutory requirements,

(c) To engage subcontractors and supplementary labour providers to perform work falling within the application of this agreement, that adhere to State and Federal Government codes for the building and construction industry as amended from time to time.”

Overview of the evidence

[4] In circumstances where the initial conciliation did not result in a resolution of matters, directions were made (later amended by consent application) concerning the filing and service of materials in advance of the hearing. On the first day of the hearing, Fulton Hogan made the (bold) submission that none of the evidence for the CFMEU ought be admitted. While I declined to accede to that application, I also note that the evidence upon which the CFMEU relied was not without certain difficulties.

[5] Evidence was received from the following witnesses in the cases advanced, respectively, by the CFMEU and Fulton Hogan:

• David Kelly, a CFMEU union organiser;



• Paul Wright, an employee of Fulton Hogan and workplace delegate of the CFMEU who has worked at different sites in New South Wales; and



• Matthew Inkster, a Fulton Hogan human resources/industrial relations manager.

[6] In short form, the evidence adduced in the case for the CFMEU was in support of its contention that Fulton Hogan had not properly met what is required of it under cl.59 of the Agreement. Among other matters, the evidentiary case for the CFMEU referred to some historical examples of issues that had arisen with respect to certain subcontractors and some matters that had arisen in more recent times – described by one witness as being a “snapshot” to illustrate concerns. In the cases of subcontractors to which the CFMEU referred, the union witnesses considered that the responses by Fulton Hogan had been inadequate and not within either the letter or spirit, or both, of cl.59 of the Agreement concerning the use of subcontractors. Among other matters, the evidence for the CFMEU included matters going to pay and conditions of employment for employees of subcontractors; superannuation; workers’ compensation premiums; and workplace safety-related issues.

[7] Again in short form, the evidence adduced in the case for Fulton Hogan indicated that it has in place procedures as set-out in an in-house document titled “Subcontracting, Purchasing, Hiring – Procedures” (“the Procedure”). The evidence for Fulton Hogan was to the effect that, through the adoption of the Procedure, the company had in place processes appropriate to addressing matters not only in relation to the subcontractor clause of the Agreement but also in relation to what is required more generally by operation of obligations arising from other sources, including applicable codes.

[8] The case for Fulton Hogan was that, consistent with its approach to matters described in the Procedure, measures were in place, and in the past steps had been taken when it learned about issues, or was properly informed about issues and/or potential issues. Part of Fulton Hogan’s case was that it had taken steps appropriate to the level of information it had before it where the CFMEU had raised issues of concern or potential concern about sub-contractors; and in that regard, the first it had learned of at least one matter was in evidence adduced in the proceedings. The evidence in Fulton Hogan’s case also drew attention to the provision by subcontractors of statutory declarations; responses provided by subcontractors in response to inquiries made by Fulton Hogan; audits undertaken by Fulton Hogan; and other matters.

Submissions for the CFMEU

[9] In support of the relief proposed by the CFMEU, the written outline of submissions for the CFMEU referred to matters including the following.

• The CFMEU/its members view job security as the key priority, and the use of workers who are not directly-employed by Fulton Hogan is seen as posing a risk to the job security of the employee workforce.



• In its negotiated form, the Agreement sought to address the job security risk by use of outside hire and positively to promote job security. The product of such negotiation was reflected in the following clauses of the Agreement: the overarching intent as set out in certain sub-clauses of cl.6 (Objectives); cl.59 (Use of sub-contractors and labour hire, including maintaining “strict vetting and compliance regimes”); and cl.61 (Supplementary labour). Among other matters, these clauses have as a purpose ensuring outside hire workers are provided decent, safe jobs; and that all relevant obligations are met.



• Fulton Hogan has not complied with obligations set out in cll.6, 59 and 61. There has been widespread and ongoing non-compliance by a significant number of the subcontractors engaged by Fulton Hogan in the past and presently continuing despite the provisions of cl.59 concerning strict vetting and compliance regimes.



• The CFMEU seeks that Fulton Hogan take immediate action to address non-compliance issues in its subcontractor workforce and comply with its obligations under cll.6, 59 and 61 of the Agreement. As the parties have not been able to resolve the differences, a determination is sought.

[10] The CFMEU submitted, among other matters, it was important, in the factual context of this matter, that considerations to what might be described as the “employer interests” carry little weight, e.g. Fulton Hogan cannot reasonably argue it requires to engage a subcontractor, acting unlawfully, as being necessary to meet its commercial needs. The objectives of the Agreement make it clear that Fulton Hogan has “a heavy obligation to act proactively to meet the objectives of the Agreement and to do so in manner that engages with and consults with its employees”. Consulting and engaging to create a “common purpose” requires the adoption of “a collaborative, invested approach to consultation”. Moreover, in a practical sense, meeting the Agreement’s objectives “requires listening and responding to concerns that are being raised, sharing information and developing joint strategies about how to address issues or concern that arise in the workplace”. Clauses 6, 59 and 61 of the Agreement, read collectively, require a “deliberative, thorough, comprehensive and conscientious task” to be undertaken by Fulton Hogan in vetting subcontractors; and that is an ongoing strict vetting process, rather than “a one off process, or the proverbial tick and flick”. Fulton Hogan is required to be highly active and rigorous, meaning that at all times the company must be satisfied, and be able to satisfy employees, that the subcontractors engaged are in strict compliance with their obligation to do the following:

• Ensure employees of subcontractors are paid pursuant to the relevant industrial instrument.



• Ensure that subcontractors are meeting all obligations as required by the Act.



• Ensure that subcontractors are meeting all their obligations as required by health and safety legislation



• Ensure that all other relevant matters, including any other statutory obligations, are the subject of full compliance.

[11] The CFMEU submitted that the dispute resolution procedure and the powers conferred on the Commission are “extremely broad”. In effect, the submission for the CFMEU continued, there is no limitation on matters that may be subject to the dispute settlement procedure other than jurisdictional matters; that is, matters that do not pertain to the employment relationship. Here, the only practical limitation is that the determination must be consistent with provisions contained at cl.48(f) as to matters such as construction-related codes.

[12] The CFMEU submitted that the outcome it seeks is not only consistent with relevant requirements it would promote and further all the various codes and guidelines referred to at cl.48(f) of the Agreement.The outcome sought is a determination that Fulton Hogan has breached the Agreement by acting in contravention of its obligations contained within the Agreement’s cll.6(b), 6(i), 59 and 61. In submitting that its proposed draft orders should be made, the CFMEU submitted the proposed orders were of a procedural nature and seek to address Fulton Hogan’s “ongoing failure to comply with its obligation to strictly vet subcontractors and comply with its obligation” under cll.6, 59 and 61 of the Agreement. In this regard, the CFMEU submitted its proposed orders are reasonable, practical, conservative and appropriate in all of the circumstances of this matter; and will address and resolve the dispute.

[13] The CFMEU contended that, upon a proper consideration of the evidence and submissions, the Commission would find that Fulton Hogan had not been adhering properly to matters involving its use of subcontractors. As such, it would be appropriate, the CFMEU submitted, to determine matters in terms of making an order in the following terms:

“The Commission orders pursuant to clause 48 of the Fulton Hogan Eastern Construction (NSW Civil Projects) Enterprise Agreement 2016 (Agreement) in settlement of a dispute relating to a workplace concern of Employees to whom the Agreement applies in relation to the engagement of subcontractors and labour hire providers by Fulton Hogan Construction Pty Ltd (Fulton Hogan):

(a) Fulton Hogan will provide employees or a representative of employees (which may include the Construction, Forestry, Mining and Energy Union (CFMEU)) on request with a copy of any policy of procedure it may have in place from time to time respect to the vetting of subcontractors and labour hire providers to ensure they comply with their obligations to their employees under the Fair Work Act 2009 (Cth);

(b) Fulton Hogan will provide employees or a representative of employees (which may include the CFMEU) on request with any audit or other like analysis undertaken by Fulton Hogan of subcontractors or labour hire providers in respect to that subcontractor or labour hire provider’s compliance with their obligations to their employees under the Fair Work Act 2009 (Cth);

(c) In the event that Fulton Hogan receives a complaint from an employee or a representative of an employee (which may include the CFMEU) that a subcontractor or labour hire provider engaged by it is not complying with its legal obligations to its employees under the Fair Work Act 2009 (Cth), and that employee or their representative provides reasonable evidence that the subcontractor or labour hire provider is not complying with their legal obligations to their employees, Fulton Hogan will conduct a compliance audit and make the results available to the employee or their representative;

(d) In the event that Fulton Hogan, as a result of conducting an audit envisaged by (c) above determines that a subcontractor or labour hire provider is not complying with their legal obligations to their employees, Fulton Hogan will:

(1) Give that subcontractor or labour hire provider 14 days’ notice to remedy the non-compliance;

(2) If non-compliance is not remedied, Fulton Hogan will terminate the subcontractor of labour hire provider’s contract in accordance with any clause in such contract, including the clause in the contract mandated by s 8(4) of the Code for Tendering and Performance of Building Work 2016 (Cth).”

Submissions for Fulton Hogan

[14] Fulton Hogan submitted that the CFMEU has made a number of serious allegations in the proceedings, including that Fulton Hogan’s subcontractors routinely and systematically breach the law and that the company turns a blind eye to those breaches. On the basis of these allegedly systemic contraventions breaches, the CFMEU asks the Commission to exercise power under the Agreement’s dispute procedure to make what Fulton Hogan described as “unprecedented orders establishing a supply chain compliance regime with the CFMEU at its centre”. Fulton Hogan submitted the application should be dismissed because:

• The Commission cannot be satisfied that the dispute or the relief sought pertain to the relationship between Fulton Hogan and its employees.



• The grant of the relief sought is prohibited by cl.48(f) of the Agreement, concerning consistency with building codes and legislative obligations.



• There is no evidence which would warrant any intervention, as the CFMEU’s case does not come even close to making good its “dramatic allegations” of non-compliance. Rather, the evidence describes a proactive and effective system of vetting and monitoring of subcontractors by Fulton Hogan.



• The relief sought should be rejected on discretionary grounds, as it is unwarranted having regard to the terms of the Agreement and the evidence. What is sought by the CFMEU travels beyond anything required by the Agreement; would amount to a serious imposition on Fulton Hogan; and, importantly, would jeopardise the capacity of Fulton Hogan to win government work in future, thereby undermining its employees’ job security.

[15] Dispute and relief do not pertain: Fulton Hogan submitted that the basis on which the CFMEU contends that this dispute and the relief sought relate to the relationship between Fulton Hogan and its employees is not entirely clear. Fulton Hogan submitted that, as best as may be discerned from the submissions and the evidence, the case advanced by the CFMEU relied on the following propositions: (a) the current compliance regime permits underpayment of legal entitlements; (b) those underpayments allow subcontractors to carry-out work cheaply; (c) that costs saving is passed-on to Fulton Hogan by the subcontractor in the form of cheaper rates; (d) the cost saving passed-on is sufficiently large to create an incentive for Fulton Hogan to sub-contract work which could be performed by its own employees; and a more robust compliance regime would remove that incentive and thereby promote the job security of directly-engaged employees of Fulton Hogan. The difficulty in this case, however, Fulton Hogan submitted, is that none of these premises has been established. To the contrary, subcontractor non-compliance creates a serious commercial risk to Fulton Hogan as it may constitute a breach of the applicable construction codes which would disqualify government projects. Indeed, it is contrary to Fulton Hogan’s interests to engage non-compliant subcontractors.

[16] Relief prohibited by clause 48(f): Even if the relief sought by the CFMEU pertains to the relationship between Fulton Hogan and its employees, the proposed relief could not be granted, Fulton Hogan submitted, due to the limiting effect of cl.48(f) of the Agreement – which mandates that any decision by the Commission shall not be inconsistent with, relevantly, the Implementation Guidelines to the New South Wales Code of Practice for Procurement: Building and Construction 2013 and any legislative obligations. Fulton Hogan’s legislative obligations also include its obligation under s.34 of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth) to comply with the Building Code 2016. For a range of reasons developed it its submissions, Fulton Hogan submitted that the outcome sought by the CFMEU would operate so as to purport to permit various matters which would not be permissible or appropriate. The Australian Building and Construction Commission’s assessment of the Agreement is that it contains provisions which are non-compliant – and it follows that the determination, if made, will exacerbate the problem.

[17] Fulton Hogan submitted that contravention of applicable codes has two consequences for the present proceedings: (a) it is a jurisdictional barrier to the grant of the relief sought, because the relief is prohibited by cl.48(f) of the Agreement; and (b) the risk of contravention of the codes and the loss of government-funded work is an overwhelming discretionary factor weighing against the grant of the relief; and any determination which would create any risk at all of contravention of the building codes is to be avoided at all costs.

[18] The evidence and the appropriate factual findings: Fulton Hogan submitted that findings on the evidence should be made as follows:

• As to compliance and vetting regimes, that Fulton Hogan had, for the reasons identified in its submissions, measures in place to deal properly and appropriately with meeting its strict obligations – with those obligations sourcing not only from the Agreement but from the incidents of obtaining work funded by the Commonwealth and NSW governments and the applicability of building codes. Moreover, a finding should be made that Fulton Hogan responds quickly and deals seriously with allegations of non-compliance. In every case where non-compliance had been alleged, Fulton Hogan reported matters to authorities and itself audited the subcontractor. Where non-compliance was demonstrated, Fulton Hogan insisted that any underpayments be rectified and, except in one case, had been successful in ensuring repayment. The Fulton Hogan compliance regime has, thereby, been almost wholly effective in ensuring compliance notwithstanding the fact that the industry is, on the CFMEU’s view, endemically non-compliant – and the CFMEU identified only a handful of instances of non-compliance albeit Fulton Hogan has engaged several hundreds, or more, subcontractors.



• As to actual non-compliance, that Fulton Hogan had, for the reasons identified in its submissions, dealt appropriately, over the years, with each subcontractor company to which reference was made in the evidence and submissions for the CFMEU by, for example, exclusion on a temporary or permanent basis; attending to ensuring that the relevant company or companies attended to proper payments. Far from establishing widespread and sustained non-compliance, Fulton Hogan submitted the evidence demonstrates that its systems together with “its proactive responses to allegations of non-compliance have been remarkably effective in ensuring compliance”.



• The allegations made by the CFMEU are serious, and allegations of that kind could only be accepted on the basis of cogent, reliable and admissible evidence. However, the evidence for the CFMEU does not provide a proper basis for any findings, let alone findings consistent with the CFMEU’s allegations of sustained and widespread wrongdoing by Fulton Hogan and its subcontractors. Ultimately the CFMEU’s claims of widespread non-compliance cannot be reconciled with the total lack of objective evidence to that effect, nor can they be reconciled with the total absence of any enforcement action by the CFMEU against any Fulton Hogan subcontractor.

[19] Fulton Hogan submitted that, reduced to its essential elements, the case turned on matters different from those posited by the CFMEU, namely that its representatives have not been treated as “the first and final arbiter of compliance” when allegations thereto have been raised.

[20] Fulton Hogan noted that the Agreement provides at cl.47 for the establishment of a Consultative Committee which, it submitted, is specifically empowered to deal with information about subcontractor non-compliance and to investigate breaches, but there was nothing to indicate those processes had been engaged by the CFMEU in respect of its concerns. Moreover, the CFMEU has not itself, through its representative/s, separately acted upon any suspicions it has or has had about alleged underpayments, non-compliance and the like. Fulton Hogan advanced a number of submissions concerning witnesses, which I do not repeat in this decision.

[21] Relief not appropriate: Fulton Hogan submitted even if the relief sought was available, the Commission should refuse to make the order/determination sought by the CFMEU on discretionary grounds, because would require the Commission to take an unprecedented step of establishing a supply chain regulation regime effectively managed by the CFMEU. In summary it would require Fulton Hogan:

(a) to audit subcontractors and labour hire operators at the direction of the CFMEU;

(b) provide copies of all relevant policies, procedures, audit results, analysis or similar records to employees and the CFMEU; and

(c) terminate commercial arrangements following audits.

[22] Fulton Hogan submitted: any determination which threatens its capacity to tender for government work would seriously undermine the purpose of cl.59 of the Agreement; engagement of non-compliant subcontractors does not bear upon the job security of employees; while cl.59 requires strict vetting and compliance regimes it does not require Fulton Hogan to guarantee or warrant perfect compliance by each subcontractor and labour hire provider; cl.59 does not provide any role for the CFMEU in the compliance regime, let alone a role at the centre of such arrangements. The proposed relief would constitute a serious imposition on Fulton Hogan and one which travels well beyond the Agreement; it not a procedure for carrying out obligations in the Agreement but rather amounts to a new and different regime. Moreover, relief proposed by the CFMEU would give rise to a number of practical difficulties, including but not limited to, potential breaches of privacy, and of commercial confidentiality, in the provision of the information to the CFMEU and to employees.

Consideration

[23] As was noted in the evidence for Fulton Hogan, the obligations under cl.59 of the Agreement are “largely co-extensive” with Fulton Hogan’s obligations under NSW and federal construction codes; and Fulton Hogan has procedures and practices in place to give effect to its obligations under those codes and the Agreement.

[24] One of the more surprising aspects of this application made under s.739 of the Act is the high level of dispute about what was otherwise agreed. That is, the parties agreed there is, in effect, a common good or common interest in ensuring that subcontractors undertaking work on Fulton Hogan projects adhere to their own obligations as employers by proper application of terms and conditions of employment under relevant industrial instruments; and that subcontractors have proper arrangements in place concerning matters such as workers’ compensation, superannuation and workplace safety.

[25] Given what is common ground between the parties on that broad level it is regrettable there has not been, for the want of a better description, a better meeting of minds about how to address matters where there is concern about non-compliant subcontractors. True it is, as Fulton Hogan submitted, that cl.59 of the Agreement does not does not require Fulton Hogan to guarantee or warrant perfect compliance by each subcontractor and labour hire provider. Nonetheless, it is also the case that the procedures it described concerning vetting, auditing and the like should, one might think, have picked-up at least some of the matters to which the CFMEU referred (or, in the case of one crane company, for example, detected issues sooner) if the arrangements were as rigorous as contended in the case for Fulton Hogan – albeit not each and every such matter (for example, a single unauthorised deduction involving one subcontractor’s employee) might reasonably be expected to be detected by Fulton Hogan’s own endeavours under the Procedure.

[26] While I accept that there have been some historic instances of matters involving Fulton Hogan’s subcontractors not attending to their obligations, which were not detected in a timely way through Fulton Hogan’s own processes, the evidence does not lead me to a view that there have been systemic failings by Fulton Hogan. Fulton Hogan has processes in place and, as noted in its submissions, apart from issues arising from the contractor/labour hire clause in the Agreement, separately there are other obligations which arise by operation of its role in undertaking Commonwealth and State government-related projects – and subcontractor non-compliance creates serious commercial risk for Fulton Hogan.

[27] While the CFMEU has had past concerns about some subcontractors, and more recent concerns or suspicions about other subcontractors, it appears that the CFMEU has not necessarily raised matters with a level of timeliness, particularity or formality such as to allow Fulton Hogan to be properly aware of what it was contended the concern was – albeit it must be acknowledged that one of the underpinnings of the CFMEU’s case was that any defects in the arrangements any given subcontractor has in place properly should be detected by Fulton Hogan itself if its vetting and auditing processes were as effective and exacting as Fulton Hogan contends. So far as the CFMEU is concerned, I would not think it is sufficient to allude to suspicions without having provided in the past what is now described in its proposal as to providing “reasonable evidence that the subcontractor or labour hire provider is not complying with their legal obligations to their employees”; the evidence did not it indicate it uniformly has done so in the past.

[28] The CFMEU’s proposed determination seeks what it considers to be necessary to give form and substance to the commitment described in cl.59 of the Agreement. As to that, I accept the submissions for Fulton Hogan that what is proposed by the CFMEU travels not only beyond what the text of the Agreement reflects as having been agreed but most likely also travels into areas which do or may run foul of cl.59(f) of the Agreement - even if accepting that there is a nexus between job security issues and contractor-type clauses: Re Schefenacker Vision Systems Australia Pty Ltd, AWU, AMWU Certified Agreement 2004 [2004] AIRC 1064.

[29] On what was before me, I could not be satisfied there is a proper foundation to grant the outcome/relief sought by the CFMEU when considering the operation of the powers bestowed by, and the applicable limitations of, the Agreement. Even if I had been satisfied that Fulton Hogan had systemically not properly been adhering to its superintendent-type role (which is, of course, backed by its strong commercial position with subcontractors), in relation to its Agreement-specified commitments concerning subcontractors, I would not, in the exercise of discretion, make an order/determination of the nature proposed by the CFMEU because, all things considered, I accept the submissions for Fulton Hogan why that could not or should not occur, or both.

[30] I should make a comment about an employee/union delegate who gave evidence in the proceedings, Mr Wright. There was some suggestion in the proceedings that Mr Wright was considered to have given evidence “against” Fulton Hogan. As Mr Wright noted in his evidence:

“I don’t regard myself as acting against the Company at all. I’m actually committed to Fulton Hogan. I work hard and I want the Company to do well. I don’t see how wanting subcontractors to be safe and professional is acting against the Company”.

[31] Mr Wright raised other matters in his evidence about past instances related to, for example, employees of subcontractors undertaking work without due regard for workplace safety measures such as personal protective equipment. Mr Wright was plainly sincere in the concerns to which he referred and in his wish for such matters to be properly assessed by Fulton Hogan. Raising such matters, by bringing them to Fulton Hogan’s attention, squarely goes to Fulton Hogan’s interests as well as to the workers to whom Mr Wright made reference in his evidence. Mr Wright’s evidence was not evidence “against” the company.

[32] I accept without hesitation Mr Wright’s evidence that he raised matters in good faith. If it is the case that Mr Wright is now seen by Fulton Hogan as “a troublemaker”, that is plainly not the case. Indeed, Mr Wright has been responsibly endeavouring in his role as “a carpenter, as a leading hand and as a Union delegate” to draw attention to matters of concern which may not have been picked-up through Fulton Hogan’s own vetting mechanisms. Mr Wright’s evidence was that “All I want is for the Company to work with us when an issue comes up.” As to this, I observe there would be clear benefit in both the CFMEU and Fulton Hogan seeking to address matters with respect to subcontracting companies which are not properly attending their own responsibilities as employers when undertaking work on Fulton Hogan projects. This is so regardless of whether a subcontractor’s failure to attend to its obligations arise from inadvertence or arise from reasons which are less-benign than mere inadvertence.

[33] Finally, I would say this. Taking the evidence and submissions as a whole, it appears there is substance to at least some of the concerns raised in the past by the CFMEU about specific subcontractors (so much is acknowledged by Fulton Hogan, for example, in relation to one problematic subcontractor from the past – and now no longer engaged). Fulton Hogan would be acting against its own interests in terms of its own securing of government work into the future not to properly attend to issues of concern if and when, I emphasise, the CFMEU raises concerns in a proper or structured way, with reasonable information to support its concerns. Equally, the CFMEU cannot reasonably expect Fulton Hogan to act, without more, merely on suspicions that may be aired informally by the CFMEU.

[34] I reiterate that it was common ground between the CFMEU and Fulton Hogan as to not only the desirability but the need for proper attention to subcontractor compliance; it is self-evidently in the interests of Fulton Hogan that it should be able to obtain government work with one corollary being to enhance job security for the CFMEU’s members. A mechanism needs to be developed so that, when the CFMEU has a concern which it considers had not been detected under Fulton Hogan’s own vetting procedures concerning hundreds of subcontractors, that matters are not dealt with on an ad hoc basis but also in a way that would not jeopardise, or potentially jeopardise, Fulton Hogan obtaining government work. This should be attended to as a matter of priority, in the interests of all parties. Fulton Hogan itself flagged utilising a committee mechanism in the proceeding before me and, through counsel, gave certain commitments. This would seem to be a good starting point. I also consider there may be a role for a type of coordinating officer, so that if an issue, such as workers’ compensation, is raised that at least one person would have knowledge as to the current state of affairs from start to finish (rather than one person dealing with matters initially, and then not knowing where matters currently lie).

[35] While it seems to be the case that that the differences between the parties demand a different, more structured approach than apparently has been adopted in the more recent past with respect to achieving what they each identified as being a common good/necessity concerning subcontractors, I also consider that the CFMEU’s present application cannot or should not be granted. As such the application is dismissed.

COMMISSIONER

Appearances:

M Aird for the Construction, Forestry, Mining and Energy Union.

O Fagir of counsel for Fulton Hogan Construction Pty Ltd.

Hearing details:

2017.

Sydney:

June 15, 16

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