‘Enough with the small talk. What do yous want?’: CFMEU shakedown revealed at Big Build royal commission

“Enough with the small talk,” CFMEU leader Joe Myles told managers from the John Holland construction company at the union’s Melbourne office in 2022. “What do yous want?”

What they wanted was four CFMEU organisers blocking construction of a rail underpass in the Melbourne suburb of Sunbury to leave the site.

But the John Holland managers were not in the CFMEU construction division boardroom to make demands. They were there to receive them, according to evidence at Victoria’s royal commission into the state’s Big Build on Tuesday.

The inquiry is using the $110 million underpass as the first case study that will illustrate how alleged corruption and abuse of power by the union infected Victoria’s $100 billion-plus of infrastructure projects.

Tuesday’s lead witness, John Holland general superintendent and engineer Steve Testolin, was present on June 6 and 7, 2022, when CFMEU organisers halted work during a crucial stage of the project.

With no support from anyone in authority, including the police, WorkSafe Victoria or the Labor Government, Mr Testolin was required to drive to the union’s offices at 1 Elizabeth St to be presented with a bill for being allowed to do the state’s work.

“We knew we were going in there to agree with a list of demands that the union would make on us,” said Mr Testolin, who had to be compelled to give evidence.

After Mr Myles’ “yous” question, the room went quiet, Mr Testolin said. “I said: ‘How about you cut the bullshit and tell me what you want?’”

Vulnerable

The union wanted John Holland to fire two labour hire and traffic management companies associated with its rival, the Australian Workers’ Union, and replace them with two CFMEU-connected businesses, BK Labour Hire and CCL.

Also, two health and safety representatives nominated by the union would have to be employed. They would have no responsibilities other than enforcing safety rules, unlike the existing representative, a worker who had volunteered to take on the role as well.

“Initially we said this wasn’t going to happen any time soon,” Mr Testolin said. “It was put to Joe Myles we may be able to look at this after the occupation. We were told it needed to be done before then.”

The “occupation” was the period allocated under an agreement with the railway’s owner to the construction crew to build a bridge for the rail line. All trains were stopped for the time.

This period left John Holland, which was sold to the China Communications Construction Company in 2015, acutely vulnerable to disruptions. Union officials knew that failing to get the rail line back into operation would cause huge damage to John Holland’s relationships with almost everyone involved in the project, and the thousands of train travellers forced to put up with buses.

John Holland was given a positive incentive to cooperate too, a shot at building a rail line from the city to Tullamarine Airport, a $12 billion project backed by the current government.

We were told “that if we aligned ourselves with the union then there would be a positive outcome and we would be looked at favourably for future projects,” Mr Testolin said.

“Airport rail, we would be one of the preferred contractors.”

No police help

Which may help explain why the two sub-contractors were immediately replaced and a CFMEU health-and-safety representative arrived the next day. He and a colleague stayed until the underpass was completed despite no substantial complaints about safety ever being raised.

The forecast cost of the project increased by $6m.

The choice of what is known as the Gap Road level-crossing removal as the inquiry’s lead example suggests royal commissioner Christopher Kourakis and his lawyers want to show how building companies were coerced by the union.

In this case, the police refused to help John Holland when one of its supervisors complained the union officials were trespassing. Without any imminent safety risk, officials from WorkSafe Victoria did not show up for two days, by which time the union’s demand had been agreed to.

“We were being left to fend for ourselves,” Mr Testolin said.

Observers hope the royal commission will investigate whether the CFMEU was protected through its close ties to the state Labor government.

Premier Ben Carroll, who was appointed three months ago, created the inquiry to help dispel perceptions his government might want to cover up union-related corruption.

On Monday afternoon the royal commission’s lead barrister complained that some departments in Mr Carroll’s Government had not provided information.

“It is extremely concerning to us, as counsel assisting, that some parties have not complied with the terms of notices to produce or produce documents outside agreed deadlines,” Chris Young KC said. “Those documents must be produced forthwith.

“We have been informed, also on behalf of some state parties, that there have been delays that have been incurred. They have incurred because of the need to receive approval from certain government committees, processes or persons in accordance with some internal government policy.”

Asked about the delay, Mr Carroll said: “That is not good enough. I will do whatever I can, though, to support this royal commission.”

The Government is in caretaker mode ahead of an election on November 28, which polls and betting markets predict it is almost certain to lose.

Opposition leader Jess Wilson said she wants the inquiry expanded to examine if political or financial interests influenced which projects were funded.