CFMEU faces $10m fine for Vic boycott

The CFMEU could face a penalty of up to $10 million over allegations of harassment and a secondary boycott of 12 building sites in Melbourne.

Australia's competition watchdog has taken Federal Court action alleging the construction union harassed a concrete company and tried to coerce it into not supplying its product to Grocon building sites.

The Australian Competition and Consumer Commission also alleges the CFMEU tried to ban the use of the concrete at some commercial Melbourne construction sites between February last year and April this year.

ACCC chairman Rod Sims said the commission has evidence of a CFMEU meeting and alleges the union instructed shop stewards to approach developers at 12 Melbourne city sites and say they would rather Boral concrete not be used.

The developers were allegedly told safety checks that would cause significant delays would be conducted on Boral trucks if they bought concrete from Boral, the ACCC says.

Mr Sims said the matter was the biggest secondary boycott case the ACCC had ever taken on.

"This sort of behaviour that we're alleging here, if allowed to go unchecked, can have devastating effects on the economy and on productivity," Mr Sims told reporters in Melbourne on Thursday.

"It's extremely important that we take this course of action."

He said the maximum penalty the union could face could be up to $10 million.

The ACCC's case also makes allegations against Victorian CFMEU secretary John Setka and assistant secretary Shaun Reardon who could face individual penalties of up to $220,000 each.

The ACCC says Mr Setka and Mr Reardon attempted to induce Boral Resources (Vic) Pty Ltd and Alsafe Premix Concrete Pty Ltd, collectively known as Boral, to not supply concrete to Grocon.

It also says Mr Setka and Mr Reardon engaged in undue harassment of Boral in relation to the supply of concrete.

The commission said it used its compulsory information gathering powers to get that evidence after investigators had difficulty getting people to talk to them.

"When you're getting approached by a strong union like the CFMEU that can influence your business you'd probably rather keep your head down than put it up," Mr Sims said.

Master Builders chief executive Wilhelm Harnisch said the ACCC's difficulties in gathering information was the reason the organisation was calling for a tougher building industry watchdog.

He said such an authority should have stronger powers than the Australian Building and Construction Commission to be given responsibility for secondary boycotts in the construction industry.

The CFMEU said it would vigorously defend itself against the claims.