Fears of prosecution over price-fixing forced a Canberra scaffolding contractor to leave enterprise bargaining talks with the construction union, the royal commission has heard.
Petar Josifoski, director of MPR Scaffolding, told the royal commission into unions on Wednesday the CFMEU allegedly told a meeting of Canberra scaffolders that a similar price deal had already been struck in other construction sectors.
The commission has previously heard allegations the CFMEU had set flat rates for Canberra concreters working on commercial buildings.
Counsel assisting the royal commission, Jeremy Stoljar✓, in his opening statement, raised fears cartels for key trades may have been formed as a result of the CFMEU's alleged pattern bargaining practices.
Mr Josifoski on Wednesday said the negotiations had occurred in late 2012 and early 2013, but the subcontractors had opposed a five per cent wage increase for workers, when the consumer price index was only three per cent.
Mr Josifoski said his business could not afford to pay the rates and other proposed entitlements.
He alleged, at a meeting to thrash out the issues, a CFMEU official said the wage increase would be offset by higher job prices, saying words to the effect of: "We are trying to get you more money ... By getting all companies to agree on a minimal price for jobs".
Mr Josifoski claimed he told the meeting that the suggestion was price-fixing and they could be jailed for discussing it.
The commission heard the CFMEU allegedly responded with words to the effect: "Well, we've done it to the formwork sector in Canberra and it's working here."
Mr Josifoski said he walked out of the meeting because: "It doesn't seem like I should be in that conversation".
The contractor said the company that he hired scaffolding equipment from had been urged not to hire MPR because of his refusal to sign the agreement.
He alleged, at another meeting, CFMEU officials assured him he would be left alone if he signed.
When he later refused to sign the enterprise agreement, he alleged Mr Vitler said: "It looks like MPR won't be around much longer in the construction industry".
"It was definitely a threat," Mr Josifoski told the commission.
CFMEU lawyer John Agius, during cross-examination, argued there was a difference between calculating that companies would need to charge a minimum of $16 per metre to cover their EBA obligations, and agreeing that all scaffolders would charge the same rate.
In a witness statement, To The Top Scaffolding director John Ryan said union officials had also suggested each company pay $10,000 into a "kitty", which the CFMEU would hold as security.
Any company that charged prices under the agreed rate would lose their money and it would be shared among the other scaffolders, Mr Ryan said.
The royal commission continues.