The state government has denied it discriminated against Lend Lease and its employees over the $630 million Bendigo Hospital tender as it argued in the Federal Court that it had no contract with the builder or even a legal obligation to proceed with the project.
Lawyers for the government sought to counter the arguments from the Construction, Forestry, Mining and Energy Union in a case that is a major test of the government’s crackdown on building unions and rising costs in the industry.
In late 2012, The Age revealed that the government had banned Lend Lease from all publicly funded building work in Victoria after it signed a union-friendly deal with the CFMEU.
That came towards the end of the tender for the Bendigo Hospital.
The court was told on Tuesday that a steering committee had ranked the consortium that included Lend Lease as its builder well ahead of its rival.
But the tender process has had to be extended and the start of the project is now as much as four months behind. Michael Wheelahan, SC, for the government, denied it had entered into any contract with Lend Lease as that tender was still under way and that any contract would be with the consortium, not its builder.
The project contract, he said, was much bigger than just construction work, with design a key aspect along with maintenance for up to 25 years.
Under a probity and process deed the state was also under no obligation to even proceed with the project and tender, Mr Wheelahan said.
The court yesterday heard evidence about a related case involving a small demolition firm, Eco, that also had its workplace agreement ruled as being in breach of the government’s rules.
Under state government rules that took effect in July 2012, any builders that sign deals that breach its rules risk being banned.
In the case of Lend Lease, the breaches included restrictions on the use of outside labour and the requirement to fly of union flags.