CFMEU muscling construction companies to sign secret contracts through Monty Margjini in ‘mafia shakedown’

Building companies are signing secret contracts which channel all industrial negotiations directly through a union official who made his name as a cage fighter and street gangster. The contracts require businesses to pay the wages of a site delegate, providing an office and a guaranteed payrise, and give the union a say over which subcontractors are used on site. The Fair Work Commission has no oversight over the so-called memorandums of understanding struck between the CFMEU and construction companies keen to appease the militant union. “It’s pretty close to a Mafia shakedown,” one construction company executive said. “The CFMEU is making an offer we can’t refuse.” The informal agreements amount to a handshake deal that affords the union generous concessions and elevates CFMEU hard man Edmond “Monty” Margjini to the position of industrial kingmaker. Mr Margjini, a one-time professional fighter-turned-Sword Boy gangster, is listed in the MOUs as the “contact for all industrial relations and site safety matters.” “This memorandum of understanding (MOU) is to establish cooperative and mutually beneficial relations,” the agreements seen by The West begin. The MOUs guarantee the CFMEU’s right to fly its flags on site and require builders to employ a union delegate on a construction worker level three wage “and transitioned to CW4 within six months.” That site delegate must be given “reasonable facilities as agreed with the CFMEU to facilitate the union delegate performing their duties”. The MOUs are a strategic masterstroke by the CFMEU because they give the union a say over which subcontractors are used. “Prior to engaging any subcontractors on the project after the effective date of the MOU, (the company) will first consult in good faith with the CFMEU about the scope of any subcontractor packages (and) details of those who tendered,” the contract states. “During the consultation (the company) will consider any recommendations by the CFMEU and will use its best endeavours to ensure employees of subcontractors do not receive inferior terms and conditions.” The union is using the contracts to “encourage” builders to contribute to the industry’s redundancy and insurance fund, known as ReddiFund. CFMEU State secretary Mick Buchan said the MOUs were designed to protect the “large number of workers on tier two or tier three sites, doing the same difficult and dangerous work but getting paid less”. “The industry is fluid and workers shift between sites and tiers,” he said. “But the CFMEU is committed to path forward that lifts standards for all construction workers. “WA’s construction pipeline is booming, and the next few years will define the future of our industry. We’re making sure that future is fair for all.” The MOU revelation comes as the Albanese and Cook governments are under pressure to put the WA chapter of the CFMEU into administration alongside the union’s federal branch and some east coast branches. The CFMEU came under the spotlight after investigations revealed the Eastern States branches were overrun by bikies and organised crime figures. The WA branch is considered cleaner than those on the east coast but some builders and the WA Liberal Party believe further scrutiny is required. The WA Master Builders Association has written to the CFMEU’s administrator to express concerns about the increasing use of MOUs, including industry disquiet that they fall outside the remit of the Fair Work Commission and operate outside the umpire’s view. “While the CFMEU is renowned for its one size that fits all EBA, it also uses another form of agreement to capture the fringes of the major building and construction sector,” the MBA said. “This is known as an MOU. This is not a pattern enterprise bargaining agreement, it’s cheaper rates, it’s still a 38-hour week, and it will never be registered with the FWC. “This MOU deal is never going to be an EBA because the union will not be seen conceding less, in a formal EBA, than its standard claims. “So, the MOU allows the union to keep its EBA intact and uses the MOU to gain a foothold away from the major construction projects. The MOU gives the union coverage, membership and influence on the subbies. “The contractor has some relief, as it isolates their MOU to named projects, and is expected to enhance commercial certainty on the construction programme, despite the lack of a formal EBA. “The MOU prescribes significant influence and profile for the union on the project. For example, the union representative is to be consulted on the selection of subcontractors. “One version of the MOU names the union organiser, Edmond Margjini, as the sole representative for the union. He is the contact for everything related to the MOU and the unions interests. “It is not registered and cannot be enforced in the FWC. If there were a dispute over its application, neither party can enforce it in the FWC, although the union could use its right of entry to demonstrate its displeasure. The WA Liberal Party noted that some State Government projects governed by CFMEU MOUs had blown out in price. Government answers provided to Liberal MLC Nick Goiran reveal the budget for one project had been blown by 50 per cent in part because contractors were “including escalation risk into submission costings to mitigate the risk of potential future price increases relating to labour and material cost escalation.” “The increasing power of the CFMEU over the construction sector will inevitably lead to an increase in the cost of projects, including government projects,” State Opposition Leader Basil Zempilas said. “This is the last thing we need at a time of an overheated construction market.” The Cook Government declined to address the propriety of MOUs. “The State Government continues to monitor issues relating to the building industry in Western Australia and other jurisdictions, including meeting with Mr Mark Irving in his role as Administrator of the Construction and General Division of the CFMEU,” a spokesperson said.