Federal Court has Eureka moment with union flag on a worksite and the Building Code

In a significant win for the Australian Building and Construction Commission (ABCC), the Federal Court has found that, notwithstanding it being “poorly worded”, the 2016 Building Code prohibits the display of building association logos, mottos and indicia on employer equipment in a worksite.

The case of Lendlease Building Contractors v ABCC [2022] FCA 192 revolved around the issuing of a compliance notice to Lendlease by an inspector from the ABCC (the Notice) relating to breaches of the Code for Tendering and Performance of Building Work 2016 (Cth) (the Building Code) identified on a construction site at Monash University.

The Notice related to the display of posters and notices bearing union logos, mottos and indicia (including “united we stand” and “we support John Setka”) in the site’s lunch rooms, as well as the display of Eureka flags on two of the site’s tower cranes. The Notice claimed that the display of these posters and flags was in contravention of section 13 of the Building Code, which aims to protect freedom of association. Specifically, to achieve that aim, section 13(2)(j) states:

"the code covered entity must ensure that…building association logos, mottos or indicia are not applied to clothing, property or equipment supplied by, or which provision is made for by, the employer or any other conduct which implies that membership of a building association is anything other than an individual choice for each employee."

In challenging the validity of the Notice, Lendlease (supported by the CFMMEU as an intervener) put forward two main arguments:

1. the inspector incorrectly interpreted the operation of section 13(2)(j) of the Building Code, and its correct construction permits the display of posters, notices and flags in the manner in question; or
2. in the alternative, to prevent the display of posters, notices and flags on a construction site would illegally infringe on the implied freedom of political communication and be in contravention of the Constitution.

1: How to interpret the “poorly worded” Building Code

In providing his judgment, Justice Snaden was critical of the text of section 13(2)(j) of the Building Code, describing it as “poorly worded” and impossible to understand it in a way that is “grammatically functional”. The text of the Code was so confusing that when making submissions as to the correct interpretation of section 13(2)(j), both Lendlease and the ABCC argued words should be inserted into the text in question. His Honour sought to summarise the respective positions as set out in the table below (emphasis added):

In other words, on Lendlease’s interpretation, in order for section 13(2)(j) of the Building Code to be contravened, the logo, motto or indicia must lead to an implication that membership of a building association is anything but a free choice, whereas the ABCC interpretation suggests that the presence of logos, mottos or indicia on its own is sufficient to contravene.

In his judgment, Justice Snaden preferred the interpretation put forward by the ABCC, describing it as the “'brighter line’ construction than the alternative.” In doing so, his Honour paid particular attention to the freedom of association provisions found in the Fair Work Act 2009 (Cth), as well as the following other sections of the Building Code:

• section 11(1)(c), which prohibits a code covered entity from being covered by an enterprise agreement that include clauses that “are inconsistent with freedom of association requirements set out in section 13” of the Building Code; and
• section 11(3)(l), which prohibits enterprise agreements applying to code covered entities that “include requirements to apply building association logos, mottos or indicia to company supplied property or equipment”.

In the context of these clauses, his Honour concluded that the ABCC interpretation was favourable, saying:

"It is, then, difficult to escape the conclusion that the blanket ban (in s 11(3)(l)) upon enterprise agreement clauses that require the application of building association logos, mottos or indicia to project-supplied property or equipment must have been intended to marry with an equivalent requirement in s 13. To put it another way: the interaction between the two provisions seems to contemplate that code-covered entities must adopt practices to ensure against the occurrence of that which s 11 prohibits enterprise agreements from requiring." [emphasis added]

2: Does the Building Code impinge on the implied freedom of political communication?

The Court considered its alternative argument: the ban on building association logos, mottos or indicia being displayed on employer property or equipment unlawfully hindered the implied freedom of political communication imported into the Constitution by the High Court in Lange v Australian Broadcasting Corporation (1997) 189 CLR 520.

In considering this question, Justice Snaden applied the three-step test:

What this means for employers in the construction sector

This case is a strong reinforcement of the freedom of association laws contained both in the Building Code and the Fair Work Act. If you are an employer on a construction site and you wish to do Commonwealth Government work (which is regulated by the Building Code), notwithstanding the level of unionisation in your workforce, you must ensure that no mottos, logos or indicia are displayed on your property irrespective of whether an inference can be drawn about the requirement to be a member of a union or not.

It is important to note, however, that the Building Code only prohibits the display of building association logos, mottos or indicia on employer equipment, clothing or property, meaning personal items are not subject to the same restriction.