Two of the most influential unions in the construction sector in Australia have been fined for taking unlawful action at the site at two sites in Queensland as part of a campaign by the CFMEU against commercial building giant Brookfield Multiplex.

The Federal Circuit Court of Australia has ordered the Construction, Forestry, Mining and Energy Union and the Communications, Electrical and Plumbing Union a total of $65,000 for their involvement in two instances of unlawful industrial action which took place in February 2011.

Those actions include a day and a half work stoppage involving 37 workers at the Gold Coast Hilton Site and a full day stop work at the same time undertaken by 65 workers at the Wintergarden shopping precinct in Brisbane.

In both cases, the unions had told workers Brookfield Multiplex had been involved in sham contracting – a claim FWBC says has not been found to be true.

In the Hilton case, it CFMEU representatives told the staff sham contracting had taken place while a representative from both unions was involved in the Wintergarden case.

Fair Work building and construction director Val Gostenick says no one has a right to take the law into their own hands and there are better ways to pursue sham contracting concerns than to resort to unlawful industrial action.

“It is unacceptable to ignore established dispute settlement procedures and other lawful avenues and instead to pursue grievances through unlawful means,” Gostenick says.

“The CFMEU and CEPU had a range of lawful options available to them to pursue their concerns. By choosing to respond in an unlawful manner, each organisation exposed itself to significant penalties and damaged the reputation of the industry. Members’ money should be spent on servicing their needs rather than paying court imposed penalties for unlawful conduct.”

The Court ordered the CFMEU to pay $50,000 in penalties and the CEPU to pay $15,000. Those penalties were based upon an agreement between FWBC, the CFMEU and the CEPU about the outcome of the matter.

Sham contracting occurs in cases where the nature of a working relationship essentially represents one of an employer and employee but the worker is hired as an independent contractor rather than as an employee. This is done to allow the employer to escape the need to pay superannuation, annual leave and other forms of entitlement.

While unions say such practices are rife in some parts of the construction industry, building industry lobby groups such as the Master Builders Association doubt this, and say that in many cases, workers opt to be engaged as contractors of their own free will because of the additional flexibility associated with this type of arrangement.