The collapse of an unprecedented court action to criminalise unlawful industrial behaviour has emboldened the militant Construction, Forestry, Mining and Energy Union to pursue legal action against lawyers and state and federal police.
Despite a successful civil case imposing a record $1 million fine against the CFMEU Victoria for its black ban against concrete company Boral, the Victorian Director of Public Prosecutions made the shock decision on Wednesday to drop blackmail charges against the union’s leader John Setka and his deputy Shaun Reardon over the ban.
The prosecutors’ decision was made in the middle of pre-trial hearings at the Melbourne Magistrate’s Court, three years after the charges were laid, and followed their successful defence of multiple union appeals against the charges.
CFMEU Victorian secretary John Setka told The Australian Financial Review his lawyers were considering potential legal action against federal and some Victorian police as well as the law firm Herbert Smith Freehills over the failed prosecution.
“Our lawyers, Gordon Legal, are looking at it all and I’d be surprised if [it did not take action against] a few lawyers from Freehills …They ought to be ashamed of themselves,” Mr Setka said. “People will be held to account about what they have done.”
While Herbert Smith Freehills prepared witness statements on the Boral boycott for the trade union royal commission, it is not understood to have drafted contested police statements in the case.
CFMEU lawyers are also considering legal action against the Australian Federal Police over their basis for wire tapping Mr Setka’s phone two years after the Boral incident.
The collapse of the case is a major embarrassment for the royal commission, which recommended the charges and for the federal government, which set up the commission to pursue and prosecute unlawful union behaviour.
Legal experts said the Boral case could have had far-reaching ramifications for industrial relations by subjecting unlawful industrial action to criminal prosecution, raising questions over the demarcation of industrial and criminal law not seen since the 1800s.
University of Adelaide law professor Andrew Stewart said he knew of no other similar case in the common law world, and, despite prosecutors’ withdrawal, there still remained an open question about whether criminal charges could apply to other cases in the future.
“Comments in the royal commission report and the initiation of this prosecution have now placed a very large question mark over the role of criminal law in relation to industrial action and union activities. Today’s decision has done nothing to resolve that.”
CFMEU paid out $10m over boycott
Mr Setka and Mr Reardon were accused of threatening to blockade Boral trucks at Victorian work sites if the company did not stop supplying concrete to builder Grocon, against whom the union was engaged in a fierce industrial campaign over health and safety issues.
The CFMEU has paid more than $10 million over the boycott as a result of civil law action launched by the Australian Competition and Consumer Commission and Boral itself.
However, Victorian police later pursued criminal charges following recommendations by trade union royal commissioner Dyson Heydon that such conduct could constitute blackmail.
“This was going to be a really large case,” Professor Stewart said. “It was going to take the law back a couple of centuries were industrial action and trade union activities were essentially controlled through the criminal law.”
However, he said prosecutors’ decision to withdraw appeared to be based on the specific evidence in the case, not the legal principles attached to it.
“There’s now a cloud of uncertainty which this decision doesn’t dispel – in fact it just ensures the cloud will remain.”
Decision to withdraw ‘the right one’
Boral executives had been giving evidence over the past two weeks as part of committal hearings to determine if there was enough evidence to go to trial.
The court heard one Boral executive witness statement was changed 18 times while the union said another was changed 41 times.
A key phrase, “cut off the supply lines”, alleged to be uttered by the union officials was not in the executives’ original notes and was only included in statements a year later, the CFMEU said.
“After a careful assessment of the evidence we’ve heard, I have instructions to withdraw the charges against both accused,” prosecutor Ray Gibson told the court on Wednesday.
Magistrate Charlie Rozencwajg said he thought the prosecutor’s decision to withdraw was “the right one”.
“This case has highlighted the way the police take statements is far more conducive to getting down the facts as witnesses see them.”
Liberals reject ‘conspiracy’ claims
Lawyer for the unionists, Peter Gordon, said Boral executives’ credibility had been “shredded over the last eight days”, with evidence one executive destroyed their original notes of the meeting where the alleged threats were made.
“Crucially it’s been exposed that neither of the Boral men viewed the coffee shop conversation as any kind of threat at the time and did not think of it as any kind of threat for over a year,” he said.
“And after a year, their view of that coffee shop conversation, their recollection of it got changed.
“It got changed only after various lawyers got involved, internal lawyers for Boral, external lawyers for Boral, lawyers for the ACCC, and crucially lawyers for Dyson Heydon’s trade union royal commission.”
Workplace Relations Minister Craig Laundy said the decision did not alter the CFMEU’s history as one of the country’s most unlawful organisations.
“On this occasion the Victorian DPP decided not to proceed with the charges and this is, of course, a matter for them to determine.
“However, this can hardly be taken to be evidence that the CFMEU is a responsible union that plays by the rules.”
The courts have fined the CFMEU and its officials more than $14.9 million for breaching industrial law, with one judge calling it the “most recidivist corporate offender in Australian history”.
But Mr Gordon called for the same sort of scrutiny that had applied to the CFMEU leaders to apply to Boral, the royal commission and “those responsible for distortion of evidence that made these charges possible”.
Liberal MPs, including Senator Eric Abetz and former Victorian attorney-general Robert Clark, rejected allegations from Mr Setka that they colluded with Boral to bring a criminal prosecution against the union.
“Any suggestion of some ‘conspiracy’ to bring these charges is completely and utterly rejected,” Mr Abetz said.
“Indeed, it is important to note that these charges were laid by Victoria Police in 2015 – almost a year after the Victorian Labor government were elected, which shows that the claims are not only untrue but impossible.”
Mr Clark said CFMEU claims he was in contact with Boral over publicising the criminal case were “fanciful”.