ACCC Fails on CFMEU Boycott Case - no arrangement

In 2016, Hutchinson Pty Ltd engaged a subcontractor to provide waterproofing services for the Southpoint A Apartments project in Brisbane. The subcontractor was not a party to an enterprise bargaining agreement with the Construction, Forestry, Maritime, Mining and Energy Union (CFMEU). The CFMEU threatened industrial action if Hutchinson continued to engage the subcontractor.

Shortly thereafter, Hutchinson terminated the subcontractor’s engagement.

background

The Australian Competition and Consumer Commission (ACCC) alleged that Hutchinson and the CFMEU had entered into an unlawful arrangement or understanding to exclude the subcontractor.

The ACCC claimed that the termination reflected a prohibited restriction on trade and services in contravention of ss 45E and 45EA of the Competition and Consumer Act 2010 (Cth).

Hutchinson denied any agreement or understanding, asserting that the decision to terminate was solely a response to the industrial-action threat.

Procedural History

The matter was initially heard in the Federal Court of Australia. The trial judge found that Hutchinson and the CFMEU had entered into a boycott arrangement, concluding that the parties’ conduct constituted a prohibited restriction on trade.

Hutchinson and the CFMEU appealed the decision to the Full Federal Court. The Full Court held that the trial judge erred in inferring that an arrangement or understanding existed.

The Court concluded that Hutchinson’s termination of the subcontractor was a unilateral response to the threat of industrial action and did not involve any agreement or consensus with the CFMEU. The Court therefore overturned the trial finding of an unlawful boycott.

The ACCC subsequently sought special leave to appeal to the High Court. In 2025, the High Court dismissed the ACCC’s appeal, upholding the Full Federal Court’s decision. The dismissal confirmed that the trial court’s finding of a boycott had been overturned and remained overturned.

Legal Considerations

• Competition and Consumer Act 2010 (Cth): ss 45E and 45EA prohibit contracts, arrangements, or understandings that restrict trade, including secondary boycotts targeting third parties.

• Arrangement or Understanding Requirement: Courts must identify evidence of a mutual agreement, consensus, or meeting of minds between parties. Mere reaction to external pressure does not constitute an arrangement.

• Unilateral Conduct vs. Collusion: Decisions made independently in response to threats or operational considerations do not fall within the statutory definition of prohibited conduct.

• Judicial Review of Evidence: Findings of anti‑competitive conduct require sufficient factual basis; appellate courts can overturn trial determinations where the inference of agreement is unsupported.

  
  

Court Findings

• Trial Court: Found that Hutchinson and the CFMEU reached a prohibited boycott arrangement.

• Full Federal Court: Held there was insufficient evidence to support the existence of any arrangement or understanding. Termination of the subcontractor was unilateral and reactive. Trial judgment overturned.

• High Court: Dismissed ACCC’s appeal. Confirmed Full Federal Court ruling, ensuring the trial finding was not reinstated.

  
  

Outcome

The trial court finding of a boycott arrangement was overturned. No civil penalties or further orders were imposed on Hutchinson or the CFMEU. The decision clarifies that unilateral responses to industrial-action threats, without evidence of agreement, do not constitute contraventions of the Competition and Consumer Act’s boycott provisions.

Professional Significance

This case highlights critical points for construction, industrial-relations, and competition law practice:

• Evidentiary Threshold: Regulatory enforcement under the boycott provisions requires clear evidence of an agreement or understanding between parties.

• Separation of Threat and Agreement: Independent corporate decisions taken in response to union threats may be lawful, provided no collusive conduct exists.

• Appellate Review: Trial court findings of anti‑competitive conduct are subject to rigorous evidentiary scrutiny on appeal.

• Guidance for Industry: Contractors, subcontractors, and unions must distinguish between lawful responses to industrial threats and conduct that could be interpreted as coordinated exclusion.

  
  

The case establishes precedent that the existence of a unilateral response to industrial pressure does not automatically amount to a prohibited boycott. It reinforces the importance of distinguishing reactive business decisions from collusive arrangements under ss 45E and 45EA of the Competition and Consumer Act.