Backed by the federal and state governments, building company Grocon has escalated its offensive at a major Melbourne construction site, dismissing an offer by the Construction Forestry Mining and Energy Union (CFMEU) to suspend its blockade of the site indefinitely.

The union’s offer has only encouraged Grocon to recommence work on the Myer-Colonial First site and step up its legal actions against the blockade as the spearhead of a broader attack on workers’ conditions. From the outset, the aim of the CFMEU has been to reach a deal with the company, not to defend the rights of workers, but to maintain its role as the industrial policeman for construction companies.

Building workers outside the Grocon site in Melbourne

Yesterday morning, with several hundred police surrounding the site and escorting workers into work, CFMEU officials appealed to protesting building workers to remain “calm.” They urged workers to maintain an increasingly ineffective “peaceful demonstration”—meaning that no action should be taken to block access to the site.

CFMEU construction national secretary Dave Noonan confirmed on Monday that the union had retreated from its earlier offer of a 14-day “cooling off” period, in which it would suspend the blockade for two weeks if the company similarly suspended its legal action in the Victorian Supreme Court.

Grocon CEO Daniel Grollo last week rejected the “cooling off” offer, which had been endorsed by the federal Labor government’s Fair Work Australia (FWA) industrial tribunal. Similarly he immediately dismissed the union’s latest offer as “worse” than the FWA proposal.

Last week, hundreds of workers resisted an attempt by mounted and riot police to break through the blockade. Police have since erected a wire fence around the site entrance and are maintaining a strong presence, which includes the dog squad, mounted police and officers in riot gear.

When around 500 construction workers turned up to the site yesterday morning, the union’s instruction meant they should do nothing when police escorted around 50 workers through a side entrance. In response, Grollo declared: “I’m pleased to say that Grocon employees at our sites in Melbourne, Sydney and Brisbane are back at work doing their jobs.”

Prime Minister Julia Gillard today made explicit her government’s backing for Grocon, describing the blockade as “grossly unacceptable.” Gillard appealed for further talks in the FWA and denounced the protesting construction workers. She told Australian Broadcasting Corporation radio: “It’s illegal action and picketing and everybody should take a step back and get this dispute resolved. There’s no excuse ever for unlawful conduct and no-one should be engaging in that conduct.”

The CFMEU insists that the industrial action was sparked when the company reneged on a deal in June to allow the union and Grocon to jointly nominate health and safety delegates on the site. However, the company’s deliberate escalation of the confrontation points to a broader agenda.

Big business and the corporate media is utilising the Grocon dispute to intensify pressure on the Gillard government to strengthen its already draconian industrial relations regime, to enforce employers’ control over all aspects of the workplace.

The central demand of business in recent strikes has been the abolition of any impediment to employers’ “right to manage.” Qantas set the pace last year by grounding its fleet and threatening to lock out workers in order to ram through its far reaching restructuring plans.

This offensive is now being stepped up as the Australian mining boom collapses, deepening the slump throughout most of the economy. Employers are demanding lower labour costs in line with those imposed on workers in the US, Europe and internationally since the onset of the global financial crisis in 2008.

The Grocon dispute is being used to establish new precedents to ram through this corporate agenda. The company is continuing with legal action in the Victorian Supreme Court for contempt orders against CFMEU officials, claiming the union had breached injunctions to end the blockade, and for damages for alleged losses of $370,000 per day since the picketing began on August 22. The Victorian state Liberal government of Premier Ted Baillieu, which has mobilised the police, announced on Monday it was joining the company’s legal action.

Victorian police block construction workers

In a move to identify individual union officials and workers, the Supreme Court has already issued subpoenas to television channels to handover footage of the blockade. Additional subpoenas have been served on inspectors from the Gillard government’s Fair Work Building and Construction (FWBC) agency to testify.

The corporate establishment is insisting that the Gillard government use the FWBC’s extensive punitive powers against the union and construction workers. The agency’s chief, Leigh Johns, confirmed last week that investigations had already begun that could lead to civil penalty proceedings against the CFMEU and its members.

Like Gillard, Workplace Relations Minister Bill Shorten has accused the protesting construction workers of “intimidation, violence and thuggery.” But the corporate media, led by the Australian Financial Review and the Australian, has condemned Shorten and the government for seeking to mediate the dispute in the FWA tribunal, instead of insisting that the CFMEU abide by the Supreme Court injunction and unconditionally end all picketing.

In an Australian Financial Review column yesterday, Ian Hanke of the pro-business H.R. Nicholls Society charged that the Labor government was trying to “return to an era that was believed to have been consigned to history—that of the IR [industrial relations] Club, where the minister was front and centre, the industrial commission acted as a broker and the law was blithely ignored.”

The corporate elite is making clear to the Labor government that it must change the industrial relations regime to outlaw even the most minimal industrial action and enable a swifter crackdown on any form of workers’ resistance. Gillard’s statement today, declaring the blockade “illegal” and “grossly unacceptable,” demonstrates the government will willingly comply.

Building workers at the Grocon blockade yesterday morning spoke to the WSWS, expressing shock and disgust at the developments. None wanted to be identified.

“Fred,” who has worked in the industry for 35 years and is now unemployed, commented: “It’s absolutely disgusting that the police are involved. It should be sorted out between the boss and the workers. The crux of it is that people want to appoint their own reps on site. In a democratic world that’s done with a vote. You can’t have a boss coming up and deciding.”

“Craig” said workers were angry about unsafe conditions. “I’ve worked on Grocon sites previously,” he said. “They are hypocritical on safety. They are tough on some areas but not in others. For example, they wanted us to wear helmets, glasses and gloves but to get to the area where that gear was you had to walk underneath other guys who had started working early… It’s worse on Grocon sites. Other builders tend to co-operate more.”

“Jimmy,” who has worked in the industry for eight years, commented: “Certainly there is an agenda. There’s a grudge against the unions. On ‘The Project’ (a TV talk show) [Grocon CEO Daniel] Grollo would not deny that he wants the return of individual contracts. This dispute could bankrupt the union. Essentially they [the employers] want to maximise their profit margins.”