Victorian inquiry hears builder feared fallout from CFMEU ties to government

A major construction company was concerned that antagonising the Construction, Forestry and Maritime Employees Union could affect its dealings with Victoria’s government, a royal commission heard on Monday, 9 November. Evidence presented to the inquiry described John Holland’s assessment of the union’s influence during Daniel Andrews’ Labor administration.

The commission, investigating allegations of corruption on Victoria’s major infrastructure projects, is beginning with the CFMEU’s involvement in the Gap Road level crossing removal in Sunbury, north of Melbourne, in 2022. The works included a new rail bridge and underpass. Counsel assisting, Chris Young KC, said 20 witnesses had been compelled to attend November’s hearings. He also warned that some parties had failed to provide documents as ordered, including by citing government policy to explain delays. Noncompliance is a criminal offence.

Young presented a 2017 John Holland email expressing concern about the union’s government relationship and its implications for the company’s dealings with its public sector client. Company officials suspected the CFMEU had considerable knowledge of planned government tenders and input into the tender process. By 2021, company records described the union as increasingly confident following successes on major infrastructure projects and possessing government influence beyond that seen in earlier years.

The hearings will examine how government officials responded at a June 2022 meeting aimed at appeasing the union after it stopped work at Gap Road. Young said industrial action had already been assessed as a very high risk, but the situation escalated in May as union officials attended more frequently. By early June, Rail Network Alliance health and safety manager Neil Thompson was seeking police assistance to remove officials who were obstructing work, including by sitting on barriers.

Internal notes presented to the commission recorded alleged threats against workers who continued on the project. A phone recording and subsequent email showed Thompson was still seeking a way to restart construction on 6 June. He told WorkSafe that both the safety agency and Victoria police had said they could not intervene. Trains had been stopped so the bridge could be built, but construction was stalled.

Young said a 13-minute meeting the following day, followed by another meeting at the CFMEU, resolved the issues. Union officials Joe Myles and Paul Tzimas attended the meeting alongside four project officials. Although investigators had substantial records of the lead-up, Young said little was known about the discussions themselves. Witnesses’ recollections would help establish what halted construction and whether the union used the disruption as leverage.

The stoppage lasted 36 hours, but Young said its total cost and the cost of resolving it remained unclear. Documents showed that traffic controllers engaged afterwards charged substantially higher rates. Standard hourly charges rose from about $45 to $88, while penalty rates increased from $59 to $147. Young said one 10-and-a-half-hour shift consequently cost $1,225 rather than $609.

Around the same period, the Major Transport Infrastructure Authority began considering the financial implications of a CFMEU campaign for higher traffic controller rates. A September briefing for then transport infrastructure minister Jacinta Allan estimated additional costs of $60 million to $78 million for existing projects and well over $400 million for projects being planned.

Premier Ben Carroll said on Monday that Victorians deserved answers from the independent inquiry. He confirmed state support for legal representation for former premiers Allan and Andrews, citing arrangements at previous royal commissions. Opposition leader Jess Wilson criticised taxpayers funding their defence. The hearings are continuing.