One of the most senior bureaucrats in Victoria passed on a warning from then-transport minister Jacinta Allan’s office to the consortium removing a level crossing that it would lose future government work if it could not make peace with the construction union.
The royal commission into Victoria’s $109 billion Big Build heard on Friday that rail alliance John Holland and CPB Contractors were warned that “if they can’t handle the industrials in Victoria, then they can’t have any more work”, according to witness Peter Wilkinson, a former chief operating officer with Rail Projects Victoria.
Wilkinson told the hearing that he was told by then-Major Transport Infrastructure Authority chief executive Evan Tattersall to convey the warning from the government to the consortium.
“He gave feedback from the minister’s office to me,” Wilkinson said, adding that although Allan’s office was not mentioned, he assumed this was who Tattersall was referring to.
Wilkinson gave the feedback to Joe Aygur , a project director with John Holland, which was part of a consortium delivering the Gap Road project while also bidding to deliver Melbourne Airport Rail Link.
Wilkinson’s statements added further weight to the growing body of evidence the royal commission has gathered this week that the government implicitly supported the Construction, Forestry and Maritime Employees Union’s pressure tactics at Gap Road, Sunbury.
Gap Road was the last remaining level crossing project in Melbourne that did not have CFMEU representation, instead being covered by rival the Australian Workers’ Union, when the CFMEU forced a two-day stoppage at the site in June 2022.
Organisers with the CFMEU unlawfully occupied the Gap Road site on June 6 and 7, forcing a stoppage during a critical phase of the project. Workers on site were told “that if they recommence work, they would not work in Melbourne again”, Wilkinson said.
The royal commission also tabled a book of Tattersall’s handwritten notes this week, initially submitted by the government in heavily redacted form, in which he jotted: “Wilko re Gap Road: ‘If don’t work this long weekend will need extension’.”
The union ceased its occupation after a tense meeting at its headquarters in which the rail consortium capitulated to its demands to place two union health and safety representatives on site, and hire the union’s preferred labour hire and traffic management companies, BK Labour and CCL.
The consortium had until that point resisted making an enterprise agreement with the CFMEU and had warned the Labor government doing so would add an estimated $2 million in labour hire costs to the Gap Road project.
The commission also heard earlier this week that Allan’s office was briefed by the major transport infrastructure authority that meeting the union’s demands on traffic controllers could add more than $400 million to the total cost of state infrastructure projects .
Wilkinson was one of three witnesses to give evidence on Friday, with two senior members of the rail alliance also quizzed about the circumstances in which the consortium agreed to give the CFMEU control at Gap Road.
Stephen Villella, the rail network alliance’s delivery director on the Gap Road project, was one of four alliance managers who travelled to CFMEU headquarters to resolve the work stoppage in June 2022.
Villella said the CFMEU’s strategy of applying pressure by occupying a work site at a critical period and issuing a string of safety notices was one he had seen on other Melbourne projects.
“I remember it was nasty. It required me to be on site more frequently. It was irrational, and it was, in my view, obviously designed as a point of leverage to change out our traffic and labour hire,” Villella said.
The union’s safety notices were baseless but achieved the objective of forcing a meeting, he said.
“The fact that we were being told we had to go there and bend the knee, if you like, was extraordinarily galling to go and do,” he said.
Villella said he could not recall any specific mention of airport rail in the meeting, but that CFMEU boss Joe Myles had asserted the union had significant influence in the Victorian government and could affect the consortium’s prospects of winning future work.
Allan, Victoria’s premier between September 2023 and July this year, has previously denied allegations that she ever sought to pressure the rail alliance to bow to the union, and has said this week that she will answer whatever questions the royal commission has on the issue.
The final witness of the day, CPB executive Michael Kalinowski, told the hearing that as the Gap Road standoff played out, he was pressed by a government representative on whether the company could be trusted to manage its industrial relations issues.
Kalinowski said he recalled getting a phone call from Darren Driscoll, an industrial relations adviser in the government.
“What I took from the conversation was that he was looking for an assurance from me in this particular phone call that if we were successful, that the sort of things that were happening on Gap Road … wouldn’t happen on a future project,” Kalinoswki said.
He said he could not recall Driscoll mentioning Melbourne airport rail, but that it was the first project he thought of because John Holland and CPB were jointly bidding for it. Kalinowski said he interpreted it as a message that the joint venture needed to resolve its problems with the CFMEU if it wanted to succeed in Victoria.
Meanwhile, the Coalition on Friday accused Labor of delaying a key anti-corruption measure until after the election.
In its latest tranche of reforms to the labour hire industry, the state government had planned for a new licensing framework to apply from October 29.
Labour hire sits at the centre of many of the allegations uncovered by The Age ’s Building Bad series , with the use of CFMEU-aligned labour hire firms often a key part of the union’s demands as it has sought to exert control on projects. The final regulatory changes will require labour hire licences for a range of roles not previously subject to the regulations for state government projects with a total cost over $50 million.
These include traffic management, concreting, crane operating and site security. The licences allow the regulator to perform fit-and-proper person tests and cancel the accreditation of companies that fail these standards.
But these reforms were delayed until January 18 next year in a government notice released on October 16. The reforms had been publicly advertised as starting at the end of October .
The decision was made to “to allow affected businesses sufficient time to apply for a licence” and came after a public consultation process.
But shadow attorney-general James Newbury said the government had delayed new integrity checks at the centre of Big Build corruption.
“These rules were supposed to start on 29 October. Instead, Labor has pushed them back until after the election. The premier needs to explain why,” he said.
Live blog: Official says Allan’s office told contractors to handle CFMEU dispute or they ‘can’t have more work’ The documents: Redacted notes trigger blistering rebuke Opinion : Ben Carroll’s decision to hold a commission was no electoral ploy Background reading: Why the inquiry is looking into the Gap Road level crossing The leaked memo: The document that revealed CFMEU’s level crossing takeover
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