The Gold Coast University Hospital project was hit by delays after workers walked off the job amid allegations of sham contracting.

Workers also downed tools on other Lend Lease projects including the Brisbane Supreme Court and District Court project.

Seven union organisers were ordered to pay a $40,000 penalty to the Commonwealth as part of the judgment, which was handed down on October 19, 2012.

The judgement comes after the industry watchdog, Fair Work Building & Construction, also secured $101,930 in compensation payments for subcontractors that worked on the two sites.

FWBC seeking compensation in addition to civil penalties means that lost income is returned directly to affected subcontractors and employees who suffered during the strikes.

FWBC chief executive Leigh Johns said the unions and organisers signed an agreed statement of facts admitting to taking unlawful industrial action over 12 days in May 2011.

“This campaign of unlawful work stoppages delayed the Gold Coast University Hospital project by eight days and the Brisbane law courts project by five days,” Johns said.

“The admitted unlawful industrial action cost the head contractor around $1.21 million.

“It is unacceptable in this day and age for unions and their representatives to take such reckless action to the detriment of major public projects.”

Johns said the unions claimed the action was motivated by a campaign to eradicate alleged sham contracting from the Lend Lease sites.

“I urge union representatives and anyone working in the construction industry to refer all allegations of sham contracting to FWBC,” he said.

“I would like to see unions working with us to prevent sham contracting, rather than take matters into their own hands.”

Lend Lease engaged up to 86 subcontractors on the hospital project and 28 subcontractors on the law courts project.

The company estimated that the daily cost of building the projects was $56,999 for the law courts and $115,722 for the hospital.

The matter will be subject to a further hearing on November 8, 2012, for the parties to provide written submissions on an injunction to prevent any further industrial action on the projects.

This article first appeared in ILN's sister publication ConstructionIndustryNews.net.