Why John Setka’s ‘thuggish’ CMFEU has been thrown into administration – and what it means for Australia

Australia’s ‘thuggish’ construction union will continue working on big ticket building sites in Victoria despite being in administration, legal experts and the Opposition have warned.

The CFMEU’s Victorian branch was put into administration on Monday following reports of bikies acting as union delegates, including one official earning $250,000 a year as a health and safety officer.

But the branch going bust will have no impact on Victorians building their own homes or even for massive infrastructure projects, experts predict.

The union’s national office has now taken executive control, overriding the state branch, following John Setka’s resignation as Victorian secretary.

But employment law expert Professor Andrew Stewart has warned that CFMEU officials will continue overseeing Victorian building sites despite the state branch going into administration.

‘There’s no legal effect at all, unlike what would happen if, unlikely at present, the union were deregistered,’ the University of Adelaide academic told Daily Mail Australia.

This means the CFMEU will continue to have a stranglehold on major projects including the state Labor government’s $90billion Big Build program, covering 165 road and rail projects  

Senator Michaelia Cash, Opposition employment and workplace relations spokeswoman, said the union will continue with its ‘thuggish’ behaviour unless it was deregistered.

‘The appalling behaviour at the CFMEU, including violence, thuggery, intimidation and bullying has been going on for a number of years,’ she told Daily Mail Australia.

‘It is time that this union is deregistered. They have made it clear over a number of years that they have no intention of changing their ways. 

‘They need to start again.’

Employment and Workplace Relations Minister Tony Burke has so far refused to call for deregistation despite Nine Network’s damaging investigation into the union.

‘The fact that John Setka went is a start – it is in no way the end of what needs to be done,’ he told ABC Insiders on Sunday. 

‘The criminal elements, for example, people involved in outlaw motorcycle gangs having the place of delegates on site – completely unacceptable.’ 

Construction Forestry Mining and Energy Union national secretary Zach Smith said on Monday that he would act to clean up the Victorian branch. 

‘The CFMEU has zero tolerance for criminality and anyone found to have engaged in criminal conduct while representing the CFMEU will be identified and removed,’ he said.

The CFMEU congratulated Prime Minister Anthony Albanese for abolishing the Australian Building and Construction Commission, a Coalition government agency that had targeted the Labor-affiliated building union, in December 2022. 

‘Anthony Albanese and the Labor Party had a clear mandate to abolish the ABCC,’ it said at the time.

Former Labor prime minister Bob Hawke in 1986 disbanded the old Builders Labourers Federation because of bad behaviour and the Coalition now wants the CFMEU to face the same fate.

Professor John Buchanan, an industrial relations expert at the University of Sydney, said the CFMEU was formed to be a clean break from the BLF, where burly unskilled labourers were actively recruited to intimidate management.

‘The whole idea of forming the CFMEU was to try and drive that out – but in the end, problem forces ended up taking over the whole show,’ he told Daily Mail Australia.

‘The CFMEU was supposed to put the carpenters in charge but in the end, the labourers ended up taking over – the irony.

‘The problem’s always been more serious in Victoria.’ 

The CFMEU’s Victorian branch last month secured a 21 per cent pay rise for members over four years.

The union’s national office has voted to assume executive powers, overriding the state branch after John Setka resigned as Victorian secretary

Professor Buchanan said construction industry corruption, involving both unions and building companies, was a global problem. 

‘It’s not the militancy, it’s the corruption that’s the problem,’ he said.

‘There’s a lot of corruption in the building industry and this is just not unique to Australia. 

‘If you talk to anyone who’s honest in the building industry, they’ll say there are just problems with builders who don’t honour contracts – there’s lots of money and lots of uncertainty.’

Master Builders Australia chief executive Denita Wawn has called for the Australian Competition and Consumer Commission and the Fair Work Ombudsman to investigate the CFMEU instead of allowing the national branch to take over the Victorian division.

‘A self-appointed internal investigation simply won’t cut it,’ she said.