Bills Digest Nos. 129 - 130 2003-04
Building and Construction Industry Improvement Bill
2003
Building and Construction Industry Improvement
Consequential and
Transitional) Bill 2003
WARNING:
This Digest was prepared for debate. It reflects the legislation as
introduced and does not canvass subsequent amendments. This Digest
does not have any official legal status. Other sources should be
consulted to determine the subsequent official status of the
Bill.
CONTENTS
Building and Construction Industry Improvement
Bill 2003
Passage History
Purpose
Background
Main Provisions
Building and Construction Industry Improvement
Consequential and Transitional) Bill 2003
Passage History
Main Provisions
Concluding Comments
Annex A - Summary of
Key Issues
Annex B Chapter
Analysis Chapter 1 - Preliminary
Endnotes
Contact Officer & Copyright Details
Building
and Construction Industry Improvement Bill 2003
Passage
History
Building and Construction Industry
Improvement Bill 2003
Date Introduced: 6 November 2003
House: House of
Representatives
Portfolio: Employment and Workplace Relations
Commencement: The main provisions commence on Proclamation, or, if
this does not occur within 6 months of Royal Assent, on the first
day after the end of that period.
The Building and Construction
Industry Improvement Bill introduces additional workplace relations
and occupational health and safety regulation specific to the
Australian building and construction industry.
In his Second Reading Speech on 6 November 2003, the Minister
for Employment and Workplace Relations, Hon. Kevin Andrews MP,
stated that the Bill 'is a key plank in the most significant reform
of the building and construction industry ever attempted'. The
Minister said the Bill is a response to the Royal Commission into
the Building and Construction Industry ('Cole Royal Commission'),
noting that 'at the core of the royal commission's findings about
the building and construction industry is an entrenched culture of
lawlessness, coupled with widespread inappropriate practices that
act against choice, productivity and safety'. According to the
Minister:
-
civil, criminal and industrial laws are breached with impunity
in the building and construction industry due to weaknesses in the
current enforcement mechanisms
-
practices that would not be tolerated in other industries are
widespread in the building and construction industry
-
'pattern bargaining' (seeking common employment conditions
beyond an individual business) is the norm in the industry and
one-size-fits-all 'pattern' agreements are routinely imposed on
employers and employees by unions, with no real opportunity to
negotiate. Such agreements can increase costs and limit
productivity growth
-
choice is denied to construction industry participants. Pressure
is applied to contractors and subcontractors to incorporate
informal industry-wide or project agreements into their workplace
agreements, and
-
the standard of occupational health and safety in the industry
is a serious concern.(1)
The Minister said that the construction industry which
constitutes around six per cent of the Australian economy accounted
for almost 40 per cent of the working days lost to industrial
action in 2002. Analysis by Econtech suggested that if labour
productivity in the commercial construction sector matched labour
productivity in the domestic housing sector, the CPI would be one
per cent lower, GDP would be one per cent higher and consumers
would enjoy $2.3 billion in economic benefits each
year.(2)
In May 1997 the Federal Government with agreement from the
States prepared a
National Building Industry Code of Practice. The Code
restates key provisions of the Workplace Relations Act
1996 and tailors these for the idiosyncrasies of the building
and construction industry.
In July 1997 the (then) Department of Employment, Workplace
Relations and Small Business formed a 'Workplace Reform Group'
targeting four industries for reform: the meat processing industry,
the coal mining industry, the building and construction industry
and the waterfront industry.(3) The Workplace Relations
Act and the Trade Practices Act 1974 were to provide the
legal tools to deliver reform. In essence, this meant re-asserting
managerial prerogative within these industries.
The Cole Royal Commission was established in July 2001 after a
report by the Office of Employment Advocate highlighting various
allegations about the building industry, including:
-
breach of 'freedom of association' principles
-
money laundering
-
maltreatment of illegal immigrants
-
collusion and intimidation by building unions
-
theft and re-sale of construction equipment, false invoicing and
fraud, and
-
involvement of criminal figures in the industry.
Terms of reference for the Cole Royal Commission were signed by
the Governor-General in August 2001. The Commission provided its
first report to
the Government in August 2002. The final 23 volume report was
tabled in Parliament in March 2003, bar the last volume containing
names of those referred for prosecution and options for dealing
with unions.
Summary of Cole Royal Commission
The Royal Commission report contained 212 recommendations, the
bulk of which proposed changes to federal workplace relations
legislation governing the building and construction industry. The
Royal Commissioner found that change was necessary in four key
areas:
-
all participants must recognise that the rule of law applies
within the industry
-
unions, contractors and subcontractors must accept that the
freedom to choose to join or not join a union is a fundamental
right of Australian employees. Breaches should be vigorously
prosecuted
-
head contractors should resume control of their building sites,
control they have largely ceded to the unions, and
-
occupational health and safety must be taken seriously by all
parties.
The key recommendations of the Cole Royal Commission relating to
workplace reform included:
-
the introduction of an 'industry specific' Act;
-
the establishment of a new independent monitoring and regulatory
body to ensure participants comply with industrial, civil and
criminal laws
-
emphasis on bargaining at the enterprise level, with limitations
on 'pattern bargaining'
-
any party causing loss to other participants through unlawful
industrial action to be held responsible for that loss
-
improvements to occupational health and safety, including the
establishment of a Federal Safety Commissioner to oversee such
issues in the construction industry;
-
disputes to be resolved in accordance with dispute resolution
procedures rather than by industrial and commercial pressure,
and
-
changes to the National Building Industry Code of Practice.
The final report of the Cole Royal Commission is available at
http://www.royalcombci.gov.au.
Analysis from the Parliamentary Library can be found in CIB 30
2002-03, 'Building Industry Royal Commission: Background,
Findings and Recommendations'.(4) On 6 November 2003 the
Minister released a report on the Government's progress in
implementing the recommendations of the Cole Royal
Commission.(5)
In November 2002, the Interim Building Industry Task
Force was set up in response to the first report of the Cole Royal
Commission. The task force is the forerunner to the Australian
Building and Construction Commission (see below). The role of the
Task Force is to:
-
investigate freedom of association breaches
-
take legal action in relation to freedom of association, and
-
investigate breaches of Part V1D of the Workplace Relations Act
concerning Australian Workplace Agreements
(AWAs).
On 3 November 2003 the Building Taskforce achieved its first
successful prosecution against a CFMEU organiser for threatening a
company manager due to appear in an industrial relations case. It
was also reported that the Building Industry Taskforce had eight
other matters before the courts.(6)
On 2 April 2003, Federal Cabinet decided to extend the operation
of the Building Industry Task Force, pending the establishment of
the proposed Australian Building and Construction Commission
('ABCC'). Cabinet also supported separate legislation to regulate
the construction industry. On 25 March 2004, the Minister announced
that the taskforce would become a permanent body, and would
'continue to operate until the Building and Construction Industry
Improvement Bill (and the establishment of the ABCC) is passed by
this Parliament'.(7)
The then Minister for Employment and Workplace Relations, Tony
Abbott, released an exposure draft of the current Bill on 17
September 2003. Interested parties had until 17 October 2003 to
comment on the Bill.
The current Bill was introduced into the House of
Representatives on 6 November 2003. It proposes:
-
an Australian Building and Construction Commissioner ('ABC
Commissioner') and a Federal Safety Commissioner (Chapter 2
and Chapter 4 Part 1)
-
a mandatory 'Building Code' (Chapter 3)
-
a new framework for workplace relations negotiation in the
construction industry focussed on 'genuine bargaining' at the
enterprise level while restricting 'pattern bargaining' and
providing for mandatory 'cooling off' periods during which
protected industrial action is not permitted (Chapters 5
and 6)
-
further restrictions beyond those in the Workplace Relations Act
on the range of allowable award matters in the construction
industry (Chapter 5)
-
that all industrial action (within constitutional limits)
in the construction sector should be unlawful, other than protected
industrial action, with industry participants able to recover any
losses they suffer due to unlawful action (Chapter
6)
-
additional freedom of association provisions so a wider range of
behaviour identified by the Cole Royal Commission can be
effectively dealt with (Chapter 7)
-
an amended right of entry system spelling out parties' rights
and responsibilities (Chapter 9)
-
limiting the scope for State law to be used to circumvent
Federal requirements (eg Chapters 7 and 9)
-
ensuring that registered organisations are accountable for the
actions of their officials and employees (Chapter
10), and
-
a strengthened compliance regime through higher penalties and
greater access to damages for unlawful conduct (Chapters 12
and 13).
At the initiative of the Australian Democrats, the Senate
Employment, Workplace Relations and Education References Committee
is conducting an inquiry into the legislation. The committee is due
to present its report on 15 June 2004. Some
90 submissions(8) have been made to the inquiry.
This is on top of a large number of submissions on the exposure
draft and the Cole Royal Commission.
There have been a diverse range of reactions to the current
Bill:
-
Peak employer groups strongly support the proposed
legislation
-
Key unions are just as strongly opposed to it
-
Construction companies are unconvinced that the Bill is in their
interests
-
Other observers (e.g. academics and private law firms) have also
criticised the Bill.
The Australian Industry Group (AIG) believes
that the Cole Royal Commission established 'a substantial case for
reform in the building and construction industry' and that the Bill
'is an important step forward'. The AIG is concerned that the Bill
has not been supported by the non-Government parties, noting
that:
proposals for reform either in accord with those
of Government or as an alternative to them have not been advanced
by the ALP or the Australian Democrats even though the need for
urgent reform is apparent.(9)
The Australian Chamber of Commerce and Industry
strongly supports the 'underpinning rationale' for the legislation,
noting that from the current Bill 'much else by way of reform can
and should flow':
New, clearer and stronger laws are a precondition
for 'on the ground' reform to work practices, attitudes and
culture. The success of new regulators, the extent to which
additional resources can make a difference, and the effectiveness
of enforcement largely depend on the strength of the legal regime
and the rights and obligations it provides.(10)
In its submission to the Senate inquiry, Master Builders
Australia emphasized the need to establish the 'rule of
law' in the Australian building and construction industry:
In supporting the Bill, Master Builders is not out
to create confrontation quite the reverse. We are committed to
ending the 'rule of the jungle' and to adopting instead, the
fairness and equality of the rule of law. A return to the primacy
of the rule of law is the theme of this submission. The
introduction of the Bill will achieve this end.(11)
Similarly, the Housing Industry Association
(HIA) stated that the commercial sector of the building and
construction industry 'often operates outside of the lawful
commercial and regulatory framework that applies to Australian
business':
There has been a lack of accountability or
recrimination for industrial and commercial lawlessness involving
widespread and repeated behaviour that is intimidatory, coercive
and anti-competitive. This endemic behaviour in sectors of the
building and construction industry is commercially and socially
unacceptable.(12)
The HIA believes the Bill will enable a free and unpressured
bargaining climate for workers in the construction industry:
The Bill is not about curbing legitimate union
power, the legal right to strike, or removing union rights of
representation It is about placing employers, employees and their
representatives in a neutral environment where genuine free choices
are available on the basis that all must obey the law of the land
and live with the bargains they have made.(13)
The Australian Council of Trade Unions (ACTU)
strongly opposes the Bill, stating that it is unnecessary and that
'there is no evidence, either from the Cole Royal Commission, or
otherwise, that justifies the application of a draconian regulatory
approach to the industry'. The ACTU says the Bill 'should be
withdrawn in favour of a tripartite process - involving employer
organisations, unions and state and federal governments - to
address all the issues facing the building and construction
industry'.(14) In March 2004 the ACTU submitted a
complaint to the International Labour Organisation, asking whether
the Bill contravenes the Right to Organise and Collective
Bargaining Convention 1949.(15)
The Construction, Forestry, Mining and Energy
Union (CFMEU) believes the Bill is 'totally
one-sided in favour of employer interests':
All but a very limited range of industrial action
would be rendered unlawful by the Bill. Trade union activity
generally is strictly regulated and curtailed. Penalties are
increased tenfold. The discretion of the AIRC is reduced. An agency
of the State could be used to suppress action in the nature of
political expression. That is an excessive and undemocratic
development in Australian industrial relations.(16)
The CFMEU calls for the Bill to be rejected, arguing that
'constructive industry reform should be based on consensus between
employers, unions and government at all levels and should build on
Australia s reputation as a modern, democratic nation that pays
proper regard to fundamental labour rights'.(17)
In its submission to the Senate inquiry,
Multiplex, one of Australia's leading construction
companies, expressed no support for the Bill, calling for creation
of a simpler and cheaper dispute resolution process.(18)
The Queensland State Manager for the Walter Construction
Group Ltd, Mr Greg Packer, said he was 'disturbed' when
the Government said the building industry is 'full of lawlessness
and inappropriate activities':
I personally reject that view because I have been
in the industry for over 30 years and have seen no significant real
evidence of management or unions involved in criminal or illegal
activities. Our industry is no different to other industries, the
police force, or judiciary in that our industry makes up a
cross-section of society. We reflect the good and bad of our
society and I am pleased to say the good predominates in our
industry and if there is a problem, I would say it is very
insignificant I am speaking of the Queensland
industry.(19)
Mr Packer said that unions 'have a major and important role to
play' in the building industry, especially in relation to wages and
safety compliance. He noted that in New Zealand, where unions in
the building industry are 'weak or non-existent', there was a major
problem with a 'highly underpaid, low motivated workforce' and a
'lack of skilled labour'.(20)
Action Construction Services Pty Ltd was
concerned that the Bill 'will negatively impact on the construction
industry', stating that:
Legislation which is designed to retard building
unions ability to access building sites, protect their members
safety and act against the many shonks in the industry, will not
make the industry any better.(21)
Action Construction was particularly concerned that 'pattern
bargaining...should be strengthened, not weakened as this
legislation proposes', stating that it 'is very desirable for the
construction industry'.(22) Concept Engineering
(Aust) Pty Ltd had a similar view, noting that:
Pattern Agreements provide industry with a common
set of standards of employment thereby ensuring that as an employer
in a very competitive industry the means of setting one of the main
components of our fixed costs is the same across the industry. This
ensures that we are competitive with other companies operating in
the same industry.(23)
Professor Andrew Stewart from the School of Law
at Flinders University argues that the Federal Government needs to
demonstrate why the industry's problems were 'so unique' that
Parliament should reverse the trend away from specialised
institutions. He said the building and construction industry
was:
not the only industry in which employers and
employees sometimes failed to comply with legal obligations it was
'a long way short of being an essential service like police,
firefighting, health and power building workers were not the only
employees with significant industrial muscle If these amendments
are worth introducing, why aren't they worth introducing more
generally? (24)
Professor Ron
McCallum, Dean of the Faculty of
Law at the University of Sydney, said he was concerned about the
Bill's 'exclusive focus upon single business enterprise bargaining,
its asymmetrical approach towards employee conduct and the overly
prescriptive nature of many of its provisions'. He believed
that
the Building and Construction Industry Improvement
Bill 2003 should not be enacted in its present form by the
Australian Parliament. In my view, the building and construction
industry will be better served by a Bill which adopts a more
flexible and less prescriptive approach, and which has a
symmetrical approach to employee and employer conduct as does the
current Workplace Relations Act 1996.(25)
Anthony Forsyth, Lecturer, Law
Faculty ANU, suggests that the proposed legislation represents a
shift in the Coalition Government's approach from deregulation to
increased intervention:
the Cole agenda demonstrates a considerable
shift in the Government's approach from its first two terms in
office. Instead of deregulation and a reduced role for government,
we're now going to see a whole new layer of detailed regulation of
labour relations arrangements in a specific industry through
separate legislation and a separate government agency .All of this
looks very much like 'uninvited third party intervention' on a
whole new scale.(26)
One of the strongest reactions came from the law firm
Slater and Gordon, which said in its submission to
the Senate inquiry that the Bill:
is one of the most serious attacks on workers and
unions in Australian history. This is not only a threat to
construction workers and their unions. It is clear that the
government plans to use this extraordinary assault as a precedent
for wider attacks on organised labour .Every democratic-minded
Australian should vigorously oppose the Bill becoming
law.(27)
Key provisions in each chapter of the
Bill are outlined below. A summary of key issues is at
Annex A. A more detailed chapter by chapter
analysis including additional background and reactions to specific
elements of the Bill is at Annex B.
The Bill addresses this issue in clause 72,
which defines 'constitutionally-connected'
industrial action as broadly as possible to bring the maximum
number of Australian workers (and employers) within the scope of
the 'unlawful industrial action' provisions in Chapter
6. It is likely, however, that not all workers and
businesses in the building and construction industry will be
covered. It is unclear, for example, whether employees of an
unincorporated sub-contractor on a building site would be covered
by the Bill, especially if any action they take is only in relation
to their own employer.(28)
Chapter 1 contains the
object of the Bill and key definitions that determine the
Bill's coverage.
Clause 3 states that the object of the Bill is
to provide an improved workplace relations framework for building
work to ensure this is carried out 'fairly, efficiently and
productively for the benefit of all building industry participants
and for the benefit of the Australian economy as a whole'.
Clause 5 contains the key definition of
'building work' which:
determines the scope of the Bill by forming the
basis of terms such as building employee and building
agreement, and hence terms such as building employer
and building association. The coverage of all provisions
of the Bill is ultimately determined by reference to the definition
of building work.(29)
The definition of building work includes a broad range
of activities whether these are traditionally thought of as
'building' or not including fit-out, restoration, repair and
demolition, any work 'part of or preparatory to' such activities,
and 'pre-fabrication of made-to-order components'. As the
Australian Industry Group points out, this appears to deem 'large
parts of the manufacturing sector, together with various service
sectors, as being part of the building and construction
industry'.(30)
Specific exclusions from the definition of 'building work'
include mining and extraction activities and domestic building,
including alteration or extension, except where this is part of a
project including at least 5 single-dwelling houses. Regulations
can be made including or excluding additional activities from the
definition of 'building work'. It is intended that regulations
would be used 'where it is not clear whether or not a particular
activity falls within the definition.'(31)
In clause 4, building agreement,
building award and building certified agreement
include any award or agreement that has application to 'building
work', whether or not they also apply to any other kind of
work. Similarly, building employee means a person
whose employment includes 'building work' even if the employee
performs other work as well as building work.
Chapter 2 establishes a new regulator, the
Australian Building and Construction Commission (ABCC) with
extensive powers to investigate and initiate actions for breaches
of the law in the building industry. As the Government's summary of
the exposure draft said, 'in practical terms, the ABCC will
function as the industry "watch dog"'.(32) It will
either deal with matters itself or refer them to other agencies for
action.(33)
The ABC Commissioner will initially have offices in Melbourne,
Sydney, Perth and Brisbane. These offices will also service the
Northern Territory, South Australia, Tasmania and the Australian
Capital Territory and may include a presence on large regional
projects.(34)
Chapter 12 Part 2 Division 1 gives the ABC
Commissioner a range of powers to compel the provision of
information either through oral evidence or the production of
documents. Under clause 230, it is an offence
punishable by 6 months imprisonment not to provide information by
the time or in the form required by the Commissioner, or not to
answer questions relevant to an investigation. Deliberately
providing inaccurate or incomplete information would also be an
offence under the Commonwealth Criminal Code by
virtue of sections 137.1 or 137.2 ('False or
misleading information or documents'; punishment 12 months
imprisonment) and section 149.1 ('Obstruction of
Commonwealth public officials'; punishment 2 years imprisonment).
The Commissioner can require a person to provide information under
oath or affirmation. Stating facts on oath or affirmation while
knowing those facts to be false amounts to the crime of 'false
swearing' in most Australian jurisdictions.(35)
Clause 231 provides that a person is not
excused from providing information to the ABC Commissioner because
they might incriminate themselves or expose themselves to another
penalty or liability. Such information can be used in evidence
against the person for offences under clause 230
or under sections 137.1, 137.2 and 149.1 of the
Commonwealth Criminal Code, although not for other offences.
The Bill allows the ABC Commissioner to apply to the AIRC for an
order halting building industrial action (clause
134), seek penalty orders and compensation for any person
affected by a contravention of the Bill (clause
227) and apply for deregistration of a building
organisation and/or disqualification of its officials
(clauses 215 and 217). The ABC Commissioner can
obtain an injunction to restrain pattern bargaining (clause
67). The Commissioner can also assess damages resulting
from 'unlawful industrial action' and issue a certificate as prima
facie evidence of the loss suffered (clause
77).
Any gaps in the constitutional coverage of the Bill (see above)
will mean that some participants in the Australian building and
construction industry would be beyond the reach of the ABCC.
Chapter 12 Part 2 Division 2 provides for the
appointment of 'ABC Inspectors'. Under clause 237
inspectors can enter premises if they reasonably believe a breach
of the law (i.e. the Bill, the Workplace Relations Act, an award or
agreement made under Commonwealth industrial law, a court order or
the Building Code) 'has occurred, is occurring or is likely to
occur'. They can also enter premises for the purpose of assessing
damages resulting from unlawful industrial action. An ABC Inspector
can inspect any work, machinery or other item; take samples of
goods; interview any person; take copies of any document; or
require a person with custody of a document to produce it within a
specified period. An ABC Inspector can also enter other 'business
premises' if the inspector has reasonable cause to believe that a
person who performs work or conducts business there has information
'relevant to compliance purposes'.
The ABC Commissioner will have a particular role in monitoring
compliance with the proposed new right of entry requirements
(chapter 9). A permit holder seeking entry will be
required to provide a copy of the 'entry notice' or 'exemption
certificate' to the ABC Commissioner prior to exercising right of
entry (clauses 190 and 200). The
ABC Commissioner will have a right to be heard in right of entry
permit matters before the Industrial Registrar (clause
208).
To enable the ABC Commissioner to monitor the building industry
and take action to enforce the law, the Bill contains a number of
mandatory reporting and similar provisions. These are contained in
various chapters.
Employers must notify the ABC Commissioner if they become
aware:
-
that employees have ceased 'unlawful industrial action'
(clause 76)
-
of action by employees that is 'industrially-motivated' and
'constitutionally-connected' (clause 135)
-
of any claim for 'strike pay' contravening section 187AA of the
Workplace Relations Act (clause 137)
Employers must also notify the ABCC if an employee engages or
threatens to engage in strike action on safety grounds or if the
employer makes a payment for a period when an employee has taken
such action (clauses 48 and 49).
Potential donors must notify the ABCC in writing if they receive
any request that a donation exceeding $500 be made to a
'Commonwealth building organisation' (clause
213).
The ABCC must be notified of the above matters within specified
time limits. Failure to do so could lead to proceedings by the ABCC
with penalties up to $110,000 (for a body corporate) or $22,000
(for an individual) (clause 227).
The Industrial Registrar must give the ABCC at least seven days
notice of hearings relating to the certification of a 'building
agreement' (clause 53) so the ABCC can decide
whether to intervene in the proceedings under clause
250. The Industrial Registrar must also notify the ABCC of
all applications lodged with the AIRC or Australian Industrial
Registry under the Bill or the Workplace Relations Act as affected
by the Bill, and the outcome of each such application
(clause 251).
Proposed Chapter 3 of the Bill allows the
Minister to issue a mandatory code of practice for the building and
construction industry. According to the Government, the purpose of
Chapter 3 is to allow it to 'more rigorously apply and extend' the
National Building Industry Code of Practice introduced in 1997
'to cover all construction projects that have Australian Government
funding, subject to certain financial
thresholds'.(36)
Clause 26 provides that the Minister may issue
a code of practice ('the Building Code') to be complied with in
respect of 'building work'. The clause specifically empowers the
Minister to issue documents in relation to occupational health and
safety, after consulting the proposed Federal Safety Commissioner
(see Chapter 4). 'Constitutional corporations' and
those undertaking work in a Territory or for the Commonwealth can
be required to comply with the Code. The Code must be made publicly
available.
The ABC Commissioner can direct a person required to comply with
the Code to provide a written report on the extent of compliance
(clause 30). The ABC Commissioner can publish
details of non-compliance with the Code, including names of
relevant persons (clause 28).
Chapter 4 is the Government's response to
concerns expressed by the Cole Royal Commission about Occupational
Health and Safety (OHS) in the Australian building and construction
industry. The chapter establishes the Federal Safety Commissioner,
and provides for the establishment of an OHS accreditation scheme
to be administered by the Safety Commissioner. As the Explanatory
Memorandum notes, the accreditation scheme will ensure that any
person wishing to contract with the Commonwealth for building work
must meet certain OHS standards.(37) Chapter
4 also stipulates the process to be followed in cases
where employees stop work due to OHS concerns.
Clause 32 sets out the Federal Safety
Commissioner's functions. Clause 33 provides that
the Minister may direct how the Federal Safety Commissioner is to
exercise his or her powers and functions. Such directions by the
Minister are disallowable instruments and must be tabled in
Parliament within 15 sitting days.
Clause 47 limits the circumstances in which
employees can be paid for periods when they refuse to work due to
OHS concerns. Penalties will be imposed on both employees and
employers if payments are made outside the specified
circumstances.
Clause 50 provides for an accreditation scheme
for persons who wish to enter into building contracts with the
Commonwealth or Commonwealth authorities. Subclause
50(4) prohibits such contracts unless each of the persons
is an 'accredited person' at the time the contract is made. The
accreditation scheme will be set out in regulations. The Federal
Safety Commissioner will be the accrediting authority.
Chapter 12 Part 2 Division
3 sets out proposed powers for 'Federal Safety
Officers'. Federal Safety Officers can use their powers to
determine whether the Building Code or accreditation scheme for
Commonwealth building contracts are being complied with
(clauses 240 and 241). A Federal Safety Officer
can enter premises, inspect any item or work on the premises, take
samples, interview any person and require a person to produce
documents within a specified time. Such officers can also enter any
business premises relevant to compliance with the Building Code or
accreditation scheme. A person who fails to comply with the
requirement to produce a document could be charged with
'obstruction of a Commonwealth public official' under
section 149.1 of the Criminal Code (punishment 2
years imprisonment).
Clause 51 reduces the scope of 'allowable award
matters' for the building and construction industry for the
purposes of the Workplace Relations Act. The 20 allowable award
matters listed in subclause 51(2) are less
extensive than their equivalents in section 89A of the Workplace
Relations Act, i.e. some matters which are able to be included in
awards under the Workplace Relations Act have been omitted from
this Bill. In addition, subclause 51(4) lists
specific issues that are not allowable award matters. Comparing
subclause 51(2) of this Bill and taking into
account subclause 51(4) produces a list of matters
that could not be covered in construction industry awards
made under the Workplace Relations Act. This list is included in
the more detailed analysis of Chapter 5 at Annex
B.
Clause 52 of the Bill requires the AIRC 'to
have regard to the desirability of minimising the number, and
complexity, of allowances' in relation to any building industrial
dispute.
Part 2 Division 1 imposes additional
pre-conditions for certification of building agreements under Part
VIB of the Workplace Relations Act. Such agreements are linked to
the concept of 'protected industrial action' under Part VIB
Division 8 of the Workplace Relations Act.(38)
Clause 53 requires the AIRC to notify the ABC
Commissioner and hold a formal hearing before a building agreement
can be certified. According to the Explanatory Memorandum,
'this will enable the ABC Commissioner to determine whether to
intervene in the proceedings under clause 250 of
the Bill'.(39)
Under clauses 54-58, the AIRC must not certify
a building agreement if it:
-
includes any matter not relating to the employment relationship
between employer and employees
-
has effect for a period other than 3 years
-
includes any obligation on the employer to make retrospective
payments
-
results from 'pattern bargaining' (see below)
-
contains 'objectionable provisions' (see below), or
-
does not contain the statutory 'freedom of association'
statement (set out in Schedule 1 of the Bill).
In addition, a building agreement cannot be certified unless
notice of a bargaining period has been given in accordance with
section 170MI of the Workplace Relations Act
(clause 59). A 'union-related' notice for
initiation of a bargaining period has no effect unless all affected
employees have the opportunity to vote on whether they wish the
union to represent them in the bargaining process (clause
64).
Clause 8 defines 'pattern bargaining' as
seeking common wages or other common conditions of employment
extending beyond a single business. However, conduct is not
'pattern bargaining' if a person is 'genuinely trying to reach
agreement' (subclause 8(2)). Under section 170MW
of the Workplace Relations Act the AIRC can suspend or terminate a
'bargaining period' if a negotiating party organising or taking
industrial action is not 'genuinely trying to reach agreement' with
the other parties. In turn, ending a 'bargaining period' takes any
such action outside the concept of 'protected industrial action'
under Part VIB Division 8 of the Workplace Relations Act, rendering
it 'unlawful'.
-
Under clause 7, a provision is 'objectionable'
if it:
-
requires or permits conduct that would contravene
proposed Chapter 7 (freedom of association)
-
directly or indirectly requires a
person to encourage or discourage another person from becoming or
remaining a member of a building association
-
indicates support or opposition for persons being
members of a building association
-
requires or permits payment of a bargaining services fee to a
building association,
-
requires or permits an officer or employee of a Commonwealth or
State union to exercise rights covered by proposed Chapter
9 (union right of entry)
'Objectionable provisions' in a building certified agreement or
building award are void (clause 69).
Clause 64 provides that initiation by a union
of a bargaining period for a certified agreement has no effect
unless all affected employees have the opportunity to vote on
whether they wish the union to represent them. The vote must be
'fair' and comply with specified notification requirements. Where
there are 10 or more employees affected by the proposed agreement,
the vote must be by secret ballot (see Chapter 6 Part
3 below).
Proposed Part 3 of Chapter 5 gives the Federal
Court power to issue injunctions to stop 'pattern bargaining',
makes 'project' or 'site' agreements unenforceable unless certified
under the Workplace Relations Act, and provides for substantial
penalties for breach of AIRC orders in relation to building awards
and agreements.
Clause 67 allows the ABC Commissioner 'or any
other person' to apply to the Federal Court for an injunction to
restrain pattern bargaining in respect of building employees. The
Court can grant an injunction in whatever terms it consider
appropriate. Clause 68 limits the enforceability
of project or site agreements, with exceptions. It appears to allow
project or site agreements covering individual employees
from different businesses, plus those involving unions or
corporations if they do not go beyond sub-contractors hired for the
particular building project.
Clause 71 alters the application of
Part VIII of the Workplace Relations Act by
providing for substantially increased maximum penalties for breach
of building awards, building certified agreements and building
orders (see Chapter 12 below for general issue of
penalties for non-compliance with the Bill).
Chapter 6 makes certain forms of industrial
action in the building and construction industry unlawful and
provides 'improved access' to sanctions against unlawful industrial
action in the form of injunctions, pecuniary penalties and
compensation for loss. In addition, it sets down additional
requirements for accessing 'protected' industrial action including
a mandatory cooling-off period and secret ballots.
The definition of 'building industrial action'
in subclause 72(1) determines the scope of
'unlawful' building industrial action under Part
2:
-
In contrast to the Workplace Relations Act, it includes
industrial action taken not only in relation to agreements and
other instruments made under Commonwealth law but also in relation
to instruments under State and Territory law (through the
definition of 'industrial instrument' in clause 4)
(see sub-paragraph (1)(a)(i) and paragraph
(1)(b))
-
It includes action taken in relation to an 'industrial dispute'
within the meaning of Chapter 7. The definition of
'industrial dispute' in Chapter 7 goes further than the definition
of the same term in section 4 of the Workplace Relations Act
(sub-paragraph (1)(a)(ii) and paragraph
(1)(c)).
-
It excludes action by an employee based on a 'reasonable concern
about an imminent risk to his or her health or safety', provided
the employee did not unreasonably fail to comply with a direction
to perform other work 'that was safe for the employee to perform'.
This is a narrower exclusion than in section 4 of the Workplace
Relations Act (paragraph (1)(g)). In a further
change from the Workplace Relations Act, where an employee seeks to
rely on paragraph (1)(g) the onus is on the employee to prove that
the action was based on a reasonable concern about an imminent risk
to health and safety (sub-clause 72(2)).
The above provisions increase the scope of 'unlawful' industrial
action compared to the Workplace Relations Act.
In contrast to Part VIB Division 8 of the Workplace Relations
Act which defines 'protected' industrial action, Chapter 6
Part 2 introduces a statutory concept of 'unlawful'
industrial action for the building and construction industry.
Clause 74 prohibits a person from engaging in
'unlawful industrial action'. This is a 'Grade A civil penalty
provision', meaning that contravention could lead to a penalty of
up to $110,000 (for a body corporate) or $22,000 (for an
individual).
Under clauses 75 and 227, court proceedings in
relation to 'unlawful industrial action' can be brought by any
'eligible person' (the ABC Commissioner, a person affected by the
action, e.g. an employer, or a person prescribed in regulations). A
court can impose a penalty, order the defendant to pay compensation
to a person who suffers damage because of the action, or make 'any
other order that the court considers appropriate'. A court can also
grant an injunction restraining unlawful industrial action.
Clause 77 allows the ABCC to assess damages
resulting from 'unlawful industrial action'. Under clause
227, a court can order compensation for any losses. A
certificate issued by an ABC inspector under clause
77 is prima facie evidence of the loss suffered.
Proposed Division 1 of Part 3 outlines
circumstances in which building industrial action will not be
'protected action' for the purposes of the Workplace Relations Act.
As the Explanatory Memorandum notes, 'these circumstances
are in addition to the requirements for protected action under the
[Workplace Relations] Act'.(40) See Chapter Analysis at
Annex B for details.
Clause 81 provides for an automatic 21-day
cooling-off period after two weeks of industrial action. Building
industrial action is not 'protected' if it occurs during this
period.
Under the existing provisions of the Workplace Relations Act,
the AIRC can (but is not required to) order a secret ballot to help
prevent or settle an industrial dispute, or to ascertain whether a
majority of employees are in favour of a proposed certified
agreement (section 135). For further background see Chapter
Analysis at Annex B.
Clause 82 provides that building industrial
action is not 'protected' unless it is authorised in advance by a
secret ballot with the exception of action by employees under
section 170ML(2)(f) of the Workplace Relations Act (i.e. in
response to a lockout by an employer).
Proposed Division 2 of Part 3 contains some 50
clauses setting out the requirements for secret ballots that must
occur before any building industrial action is 'protected' action.
It is almost identical to item 25 of the Workplace Relations
Amendment (Secret Ballots for Protected Action) Bill 2002 which
proposed a new Division 8A for Part VIB of the Workplace Relations
Act. See Chapter Analysis at Annex B for
details.
Similar to section 127 of the Workplace Relations Act, under
clause 134 the AIRC may order building industrial
action to cease or to not occur. The AIRC may make such an order of
its own motion or on the application of:
-
the ABC Commissioner
-
a party to the industrial dispute
-
a person directly affected by the building industrial action
(eg. an employer), or
-
an organisation to which a party to the dispute belongs.
Subclause 134(4) allows the AIRC to make an
interim order to stop or prevent industrial action. There
is no equivalent in section 127 of the Workplace Relations Act.
Under section 127(7), the Federal Court can grant an interim
injunction, but this is only after the AIRC has made a
final order.
Subclause 134(12) will allow the Federal Court
to issue an injunction where a person or organisation fails to
comply with either an order or an interim order of the
AIRC. This goes beyond section 127 of the Workplace Relations
Act.
Clause 138 provides that notice of industrial
action in relation to a proposed building agreement can only be
given once. In other words, under this Bill it will only be
possible to take protected industrial action once in relation to a
proposed building agreement.
Chapter 7 strengthens 'freedom of association'
laws for the building industry, prompted by the Cole Royal
Commission's report that it had 'heard a great deal of evidence of
conduct which had as its object undermining freedom of association
in the building and construction industry.'(41)
Proposed Part 2 aims to cover all conduct that
impedes freedom of association within the building industry,
regardless of whether the participants' other employment rights and
obligations are regulated by Commonwealth or State
legislation.(42) To do this a range of constitutional
powers have been relied upon, most notably the corporations
power(43) through clause 147.
The general prohibitions are:
-
a prohibition on coercion of a building
industry participant to become or not become or remain or cease to
be a member or officer of an employer group, union or other
association (clause 151);
-
a prohibition on making false and misleading statements
about membership of associations: eg saying that a person
must or must not become a member or saying that only members can
receive the benefit of an award or agreement etc (clause
152); and
-
a prohibition on industrial action relating to
membership: that is, taking industrial action because
another person is or is not a member of an association
(clause 153).
Clause 154 prohibits
employers from harming the employment or discriminating against an
employee or prospective employee or independent contractor or
threatening to do so, for a 'prohibited reason'. The 'prohibited
reasons' listed in clause 155 are similar to those
in s 298L of the Workplace Relations Act. Clause
156 prohibits employers or persons engaging contractors
from making promises or threats to employees or contractors to
belong or not to belong to an association. This differs from the
Workplace Relations Act equivalent provision, s 298M, which only
prohibits inducements to cease being a member or officer of an
association.
-
Clause 158 prohibits
industrial action (or threats of industrial action) intended to
coerce an employer to remain a member or officer of an association
or to pay a fee to an association
-
Clauses 159, 160 and 161
prohibit prejudicial action by associations against employees,
members and contractors when it is done for prohibited reasons.
-
Clause 162 prohibits
associations from advising, inciting or coercing a person to take
action in relation to a third person that would involve a
contravention of clause 154(2) (unlawful
discrimination against independent contractors). This provision has
no equivalent in the Workplace Relations Act and reflects the
Government's response to findings of the Cole Royal Commission of
instances of intimidation of contractors by building unions to
enforce 'closed shop' arrangements.
Proposed part 8 sets out the legal relationship
between this Chapter and State and Territory laws and the Workplace
Relations Act. In particular, it provides that no action may be
brought under Part XA of the Workplace Relations Act for conduct
for which an action would lie under this Bill. This ensures that
the stricter provisions and penalties of this Bill would apply to
the building and construction industry.
Clause 170 provides a reverse onus of proof,
i.e. it provides that conduct alleged to be in
contravention of freedom of association provisions has
occurred for a prohibited reason or with prohibited intent.
This is similar to s 298V of the Workplace Relations Act, except
that clause 170 provides that the reverse onus of
proof is not to apply where an interim injunction is sought. Under
this Bill, the reverse onus of proof provisions are linked to
substantially greater financial penalties, which are more likely to
be sought against unions than employers in relation to freedom of
association breaches.
The substantive provisions of
chapter 7 (clauses 151 154, 156
166) are 'Grade A civil penalty provisions'. This means
that fines may be ordered for contraventions of those provisions of
up to $110,000 for bodies corporate and $22,000 for
individuals.(44) This is a significant increase on
penalties which currently apply for similar breaches under the
Workplace Relations Act: $10,000 for bodies corporate and $2,000
for individuals.(45)
Chapter 8 establishes
various civil offences relating to discrimination and coercion in
the building industry.
Clause 172 prohibits action, or the threat of
action, taken by one person 'with intent to coerce' a second person
to employ, engage, or allocate responsibilities to, a particular
employee or contractor. This addresses concerns raised by the Cole
Royal Commission of a culture in the building industry of union
coercion of employers on staffing and contracting issues.
Australian industrial law has recognised that unions may have a
legitimate interest in these issues. In Re: Cram; Ex parte NSW
Colliery Proprietors Association Ltd(46) the High
Court rejected an earlier notion that issues involving the hiring
and firing of staff constituted 'managerial prerogative' outside
the scope of industrial tribunals or union interference. The Cole
Royal Commission recognised that union 'encouragement' of employers
on issues of this type is not 'intrinsically wrong', but that it
had received evidence that unions 'had crossed the line between
encouragement and coercion'.(47)
Clause 173 prohibits action (other than
protected action) and threats of action or inaction intended to
coerce a person in relation to the expiry date of a certified
agreement. It also forbids action by an employer to coerce an
employee not to request union involvement in the bargaining
process. Clause 173 is similar to section 170NC of
the Workplace Relations Act, but as well as prohibiting actions
intended to coerce, it also prohibits undue
pressure.
Undue pressure is a qualitatively different test to
action intended to coerce as it does not require an
assessment of the respondent's state of mind. Whereas action
intended to coerce looks at the matter from the perspective of
the respondent, undue pressure examines the point of view
of the complainant would a complainant have felt pressured in the
circumstances? In practice, this should widen the scope of the
provisions, making prosecutions easier by reducing the elements a
complainant must prove.
Clause 174 prohibits discrimination against an
employer on the basis that its employees are covered, or proposed
to be covered, by a particular type of industrial instrument (ie
award, certified agreement, AWA) or an instrument made with a
particular person. This provision is intended to prohibit conduct
of the following types:
-
a head contractor refusing to give work to a subcontractor
because the subcontractor's employees are covered by a non-union
agreement
-
a head contractor refusing to give work to a subcontractor on
the basis that the subcontractor's agreement is or is not made with
a particular organisation of employees
-
a union disrupting the operations of an employer (other than
through 'protected action') on the basis that the employer's
employees are covered by a State rather than Federal
agreement.(48)
Clause 175 prohibits threats, actions or
inactions intended to coerce employees or employers to contribute
to particular superannuation funds.
The new offences in chapter 8 carry penalties
of $110 000 for bodies corporate and $22 000 for
individuals.
Chapter 9 Union right of entry
The right of union officials to enter workplaces to inspect
conditions, standards and documents or talk to employees for
purposes of information gathering or recruitment is currently
governed by Part IX of the Workplace Relations Act. The Bill makes
the following key changes to that regime as it would apply to the
building industry:
One national
regime: currently, rights of entry and inspection differ
under Commonwealth and various State laws. Using the Commonwealth's
powers under the Constitution over corporations, territories and
Commonwealth places, the Bill attempts to cover unions registered
under a State law (through clause
178,(49) subclause
188(2) and 197(2)-(3), and
clause 204). Clause
204, in particular, excludes the operation of State laws
which may give more liberal rights of entry, with the exception of
occupational, health and safety laws. Note these provisions will
only apply to State unions where the employer is a constitutional
corporation, is in a territory or is on a Commonwealth place.
-
Conditional permits: under the Workplace
Relations Act, union officials must have a permit issued by the
Industrial Registrar before they may exercise rights of entry and
inspection. Clause 181 will allow the Industrial
Registrar to impose conditions on a union official's permit. The
registrar is to have regard to the factors listed under
clause 182 in deciding whether to impose any
conditions.
-
'Fit and proper person': under clause
182 the Industrial Registrar must not issue a right of
entry permit unless the applicant is a 'fit and proper person'.
-
Revocation, suspension and banning of officials: Clauses
184 and 185 expand the circumstances and
processes for revocation and suspension of right of entry
permits.
-
Involvement of ABCC: a requirement to notify
the ABCC (clauses 190 and 200) of
use of a right of entry permit and the right of the ABCC to apply
for disciplinary measures (clause 184) give the
ABCC a significant role in policing union entry rights whether or
not employers lodge objections.
-
New restrictions on exercise of inspection rights and
the right to hold discussions with employees: Chapter 9 Part
4 imposes new limitations on the right of union officials
to enter premises to investigate suspected breaches of industrial
laws, awards or certified agreements, and on the right to enter
premises to hold discussions with employees. See Chapter Analysis
at Annex B for details.
As with other parts of the Bill, the civil penalties for
contravention of provisions in chapter 9 are
significantly increased in comparison to the Workplace Relations
Act to $110,000 for bodies corporate and $22,000 for
individuals.
Chapter 10 contains
various provisions imposing restrictions and reporting requirements
on registered building organisations (unions, employer associations
etc). Key provisions include:
-
Building organisations must provide an annual statement
to the Industrial Registrar and the ABCC detailing any donations
they receive greater than $500. The Industrial Registrar is to
provide a report of these statements to the ABCC and the Minister,
including an analysis of whether the statements comply with
requirements (clause 212)
-
Building organisations must give the ABCC written notice of any
solicitations they make for donations of over $500 from building
clients, employers or contractors (clause 213)
-
The Industrial Registrar must make additional financial
reporting guidelines applying only to building organisations (in
addition to such requirements under the Workplace Relations Act)
(clause 214)
-
Building organisations must provide operating reports for any
related entity (such as a trust or company) or any body in which
they have any financial interest (subclause
214(5)).
-
The ABCC can seek the deregistration of a building organisation
for failure to pay an award of damages for unlawful conduct under
the Bill (eg for taking unprotected industrial action)
(clause 215)
-
the Federal Court may order the deregistration of a building
organisation where it, or a 'substantial number' of its members, or
a 'section or class of members' has failed to comply with an
injunction or interim injunction made under the Bill
(clause 216).
-
the Federal Court may 'trace' transactions by building
organisations designed to avoid a judgment debt. The Court may
order that a person who received assets in those circumstances be
required to pay the judgment debt (clause 218)
-
The ABCC may apply to the Federal Court to disqualify a person
from holding an office in a building organisation for a set period
if the person:
-
has contravened a civil penalty provision of this Bill or the
Workplace Relations Act, or
-
has been disqualified from holding such an office under a State
law (clause 217).
Chapter 11 gives the AIRC additional power to
resolve disputes between unions in the building industry over the
right to cover particular workers (demarcation disputes). The
chapter builds on the provisions of Schedule 1B Chapter 4 of the
Workplace Relations Act. Key differences to the regime in the
Workplace Relations Act include:
-
the right to seek AIRC determination of a demarcation dispute is
extended to 'any person who is, or is likely to be, adversely
affected (whether directly or indirectly) by the demarcation
dispute (clause 219). Currently only
organisations, employers or the Minister may apply to the AIRC for
demarcation orders
-
the need for conciliation to be attempted before an AIRC
determination is removed (clause 220), and
-
failure to comply with an AIRC demarcation order invokes a
'Grade A civil penalty' (clause 223).
Chapter 12 Part 1 introduces a significant
increase in the range of penalties for contraventions of the Bill
compared to contraventions of the Workplace Relations Act. The
chapter establishes one enforcement regime to govern all
contraventions of the Bill's civil penalty provisions.
Clause 227 provides for increased civil
penalties:
-
Contraventions of 'Grade A civil penalty provisions' can attract
a penalty of up to 1,000 penalty units for bodies corporate
($110,000) and 200 penalty units ($22,000) for individuals.
-
'Grade B civil penalty provisions' can attract penalties of up
to 100 penalty units ($11,000) for bodies corporate and 20 units
($2,200) for individuals.
In contrast, the Workplace Relations Act generally provides
maximum pecuniary penalties of $10,000 for bodies corporate and
$2,000 for individuals.(51)
Clause 227 also extends the right to seek
penalty orders, compensation or 'any other order the court
considers appropriate' to any person 'affected by the
contravention'. The ABC Commissioner is specifically included as an
'eligible person' for the purpose of seeking such orders. The ABC
Commissioner will be able to seek compensation for any person who
suffers damage because of a contravention of the Bill. In contrast,
the Workplace Relations Act generally limits the right to
compensation to direct parties, such as employees, employers or
industrial associations.
The ABCC's ability to seek orders under clause
227 together with its extensive powers under
Chapter 12 Part 2 (discussed above in relation to
Chapter 2) emphasises the central role of the new
body in enforcing the provisions of the Bill.
Subclause 226(2) provides that a person 'who is
involved in a contravention of a civil penalty provision'
is deemed to have contravened that provision. To be 'involved in' a
contravention includes 'inducing' or 'conspiring' or 'aiding,
abetting, counselling or procuring' the contravention.
Clauses 228 and 229 describe
the interaction of civil penalties under the Bill with criminal
law.(52) See Chapter Analysis at Annex
B for details.
Clause 248 applies to provisions in the Bill
referring to coercion, undue pressure, encouragement, advice or
incitement of another person to do a particular thing. It provides
that the ability, willingness or eligibility of the other person to
do that thing is irrelevant in determining whether the coercion,
undue pressure etc occurred. When seen alongside provisions such as
clause 226 (which deems 'counselling' someone to
commit a contravention etc to be the same as an actual
contravention of the Bill), this appears to mean that merely
encouraging someone to do something that either cannot be done or
was not in contemplation can amount to a contravention of the Bill
attracting substantial penalties.
Building and Construction Industry Improvement
Consequential and Transitional) Bill 2003
Date Introduced: 6 November 2003
House: House of Representatives
Portfolio: Employment and Workplace
Relations
Commencement: Clause 11, Schedule 1 and
Schedule 2 commence on a date to be fixed by Proclamation or six
months after the Bill receives Royal Assent, whichever is sooner.
The remaining provisions commence on the day the Bill receives
Royal Assent.
To make consequential amendments to the Workplace Relations
Act 1996 and other Acts arising from the provisions of the
separate Building and Construction Industry Improvement Bill 2003
(BCIIB) and to provide application, saving and transitional
provisions concerning the operation of the BCIIB.
Clause 5 provides that Part 1 of Chapter 5 of
the BCIIB, concerning the making of awards by the Australian
Industrial Relations Commission (AIRC), applies to disputes
currently before the AIRC as well as future disputes.
Clause 5 also provides that the AIRC must
review all awards within 12 months of the commencement of Part 1 of
Chapter 5 of the BCIIB to consider whether they contain provisions
that are to be excluded from the award by operation of the
Part.
Clauses 6, 7, 8 and 10 provide
that certain provisions of the BCIIB apply
retrospectively, that is to conduct, transactions
or events that occurred before as well as after
the commencement of the relevant provisions. Other provisions of
the BCIIB will operate prospectively, although
they will apply to industrial action occurring after the
commencement of the relevant provision, even where the action may
have begun beforehand.
Schedule 1 provides for various amendments to
the Workplace Relations Act to give effect to the BCIIB.
Item 42 provides that the AIRC will not have the
power to deal with claims for pay for employees while they were
engaged in building industrial action that is
constitutionally-connected (according to proposed Chapter
6 of the BCIIB). Use of this term from the BCIIB allows broad
application of the provision.
Schedule 2 amends other legislation consequent
to the enactment of the BCIIB, including the Administrative
Decisions (Judicial Review) Act 1977 (ADJR) to provide an
exemption from that Act for decisions made under the BCIIB. A
similar exemption applies for the Workplace Relations Act.
Although it has previously been accepted by Parliament that the
Workplace Relations Act should be exempt from the ADJR, new types
of administrative decisions will arise under the BCIIB. The
proposed Federal Safety Commissioner will act as an accreditation
authority for persons wishing to enter into building contracts with
the Commonwealth or Commonwealth authorities(53). The
Federal Safety Commissioner will make decisions that significantly
affect the rights of parties. The BCIIB also gives expanded powers
to the Industrial Registrar in relation to granting, restricting,
suspending and revoking right of entry permits to union
officials.(54)
Parliament should consider whether the same exemption from ADJR
procedures that applies to the Workplace Relations Act should also
apply to the BCIIB.
The key issues raised by the Bill are highlighted at
Annex A.
The proposed legislation continues the policy choices that the
Coalition Government has put before Parliament in the area of
workplace relations since its election in 1996.
The fundamental issue is the role of organised labour within the
Australian industrial relations system. In relation to the
evolution of labour law in the United Kingdom and Australia,
Creighton and Stewart identify three broad approaches of
'repression, tolerance and accommodation' towards organised labour
to describe different periods between the early nineteenth century
and the present day.(55)
Using this hierarchy, it might be said that there was a period
of 'accommodation' towards the role of organised labour in
Australia in the 1970s and 1980s, followed by a reduced priority on
the role of unions in the industrial relations system and a shift
towards 'tolerance' with the reforms of the early 1990s. The
election of the Coalition Government in 1996 accompanied by the
restrictions on collective action in the Workplace Relations Act
introduced an era of what could be called 'reluctant tolerance'
towards collective labour rights. The provisions in this Bill
further restricting collective action, making broad building
agreements less easy to achieve, introducing an industry 'watchdog'
in the form of the ABCC and providing substantial penalties
including imprisonment for breaches involve a further move away
from 'tolerance' of the role of organised labour in Australia, at
least in the case of the building and construction industry.
There is no question that unions in the construction and
building industry have been a particular target for workplace
relations reform under the Coalition Government. The practice of
'site agreements' requiring workers to be employed under a common
set of conditions has been a special focus. Such agreements have
evolved because of the unique situation in the building industry
where individual construction projects require cooperation amongst
a multitude of players (site owner, developer, head contractor,
sub-contractor, workers). In March 2004 the Australian
Financial Review described the heavy constraints in the Bill
on use of site agreements, noting, however, that 'for head
contractors site agreements are a way of maintaining order and
equity on building sites'.(56)
While site agreements and the role of unions in achieving these
can be justified given the nature of the building industry, there
are also long-standing and well-publicised issues about compliance
with the rule of law in construction projects that culminated in
the Cole Royal Commission in 2001. As the Australian Financial
Review noted in the same article, '12 months on from the $60
million Cole royal commission, nothing has changed construction
companies will not speak publicly about Cole not because they are
scared of the federal government, but for fear of antagonising the
building unions'.(57)
The main theme of the Bill is to tighten the rule of law in the
construction industry. Parliament will need to consider whether the
state of the Australian building and construction industry and the
role of organised labour within it, as revealed by the Cole Royal
Commission and reactions to the Cole Commission report, justify the
approach in the Bill.
The key effect of the Bill would be to substantially restrict
the role of unions in workplace relations in the building and
construction industry. It would do this by, for example:
Substantially reducing the legal scope for
unions to exercise collective industrial power through a broader
definition of 'industrial action' and the complex criteria for
'protected action' (not least the complicated and compulsory secret
ballot requirements) therefore substantially increasing the scope
of 'unlawful' industrial action
-
Requiring a 'cooling off period' of three weeks no matter what
the subject or nature of the building industrial dispute
-
Giving priority to the freedom not to associate over
the freedom to associate encouraged by the International
Labour Organisation
-
Imposing substantial restrictions on pattern bargaining, site
agreements and union right of entry
-
Creating the ABC Commissioner, with the ability to conduct
investigations into compliance with the Bill, to compel production
of information and to prosecute contraventions even where no
parties have a complaint
-
Extending the right to seek penalties and damages against unions
to others besides employers and employees
-
Creating additional hurdles before building agreements can be
certified, thereby encouraging individual Australian Workplace
Agreements in the industry
-
Increasing penalties for contraventions and non-compliance,
including deregistration or disqualification for officials in some
circumstances, and
-
Imposing further restrictions on allowable matters in industry
wide awards.
With all regulatory bodies there is potential for selective
monitoring and enforcement. Arguably the risk of this is higher in
the industrial relations sector where strong ideological divisions
have traditionally influenced policy. In relation to the Bill, it
has been suggested that 'if the Cole commission had been more
even-handed in dealing with unscrupulous employers, the federal
government may have had a better chance of reforming the
industry'.(58) Democrats Senator Andrew Murray noted
that his party did not intend to pass the Bill in its current form,
calling for 'improved outcomes for the industry, both for employees
and employers.'(59) Senator Murray said a national
workplace relations regulator was needed 'to significantly enhance
efficiency and equity in the building and construction
industry':
The unions need help
in making sure that entitlements are paid, that wages and
conditions are observed and that health and safety are properly
looked after. Unions and employers need
help to ensure that people do not defy
court and commission orders and the law. The employers need help with regulators on call when faced with
unreasonable people perverting the law's intent.(60)
The Bill specifies that the ABC Commissioner is to monitor
compliance with the law by 'building industry participants'
(employees, employers and others), investigating suspected
contraventions and instituting proceedings where
necessary.(61) The extent to which the ABCC adopts an
'even-handed' approach to this task may be apparent from the list
of investigations tabled in Parliament as part of its annual
report.(62) In addition, any direction from the Minister
to the ABC Commissioner about how the ABCC should undertake its job
must be published in the government gazette and will be subject to
disallowance by Parliament.(63) Such provisions will
impose some constraint in the form of accountability to the public
and Parliament on the use of the ABCC in a selective manner.
Despite such measures, perceptions of a one-sided approach to
regulation of the building industry appeared sufficient for the
Government to announce in a report on progress with implementing
the Cole Royal Commission the creation of a separate unit within
the Department of Employment and Workplace Relations to 'deal with
rogue employers who do not meet their obligations'. According to
the Minister, the new 'Office of Workplace Services' will:
target the building and construction industry
firstly in Victoria, New South Wales and Western Australia with
education and compliance programs to ensure employers meet their
and employees get their legal obligations.(64)
Parliament might ask what the point is of creating a separate
workplace relations regulator for the building and construction
industry in the form of the ABCC if an additional body is required
to ensure compliance by employers in the building industry with
their legal obligations. Moreover, in addition to the ABCC and the
Office of Workplace Services, the Office of the Employment Advocate
also has a role in relation to monitoring and compliance with the
law in the building and construction industry. This includes
investigations into breaches of freedom of association and
workplace agreement provisions of the Workplace Relations
Act,(65) matters also within the scope of the ABCC in
relation to the building industry. The relationship between these
three government supervisory bodies appears unclear at best.
The restrictions and prohibitions in the Bill affecting the role
of organised labour in the building and construction industry are
made effective by the substantial penalties for non-compliance.
Compared to the Workplace Relations Act, the Bill introduces
significantly greater financial penalties for non-compliance (for
employers and workers), provides for imprisonment for failure to
provide information to the ABCC or for obstructing the ABCC or a
Federal Safety Officer, and allows for de-registration for failure
to comply with court orders. As well as introducing a wider range
of civil and criminal offences in the building and construction
industry, it also lowers the hurdles for establishing that such
offences have been committed.
Compliance problems in the industry highlighted by the report of
the Cole Royal Commission might suggest that such a punitive
approach is needed to ensure an efficient building and construction
sector in Australia.
The risk, however, is that such an approach could have the
opposite effect. The 1985 report of the Committee of Review into
Australian Industrial Relations Laws and Systems ('the Hancock
Report') stated that imposition of fines and imprisonment for
strikes and lockouts were not 'a useful aspect of the conciliation
and arbitration system' and recommended that the (then) Industrial
Relations Act should not contain any provision for such penalties.
It proposed instead that there should be more reliance on measures
that would foster 'a greater commitment to the overall system, the
dispute resolution process and its outcome'.(66)
The Hancock Report was a reaction in part to the era of 'bans
clauses' exemplified by the 1969 O'Shea case. Similar in effect to
provisions of the current Bill, 'bans clauses' were award
provisions that forbade the imposition of bans on work and were
widespread in the 1950s and 1960s in Australia. Non-compliance
meant as in the Workplace Relations Act and this Bill that an
affected party could seek a penalty or an injunction to restrain
any further breach. Failure to observe the terms of an injunction
could lead to further fines and imprisonment (similar to the
process expanded and made easier by this Bill). Creighton and
Stewart note that the use of such provisions led to a
confrontationist approach by employers and unions. In the O'Shea
case, the Victorian State Secretary of the Tramways Union was
imprisoned for contempt of court for refusal to collect fines
outstanding against his union. His imprisonment 'led to widespread
industrial disruption and public demonstrations, with the threat of
worse to come', followed shortly afterwards by legislation amending
the use of bans clauses.(67) As Creighton and Stewart
say:
Perhaps the most important lesson to be drawn from
the O'Shea affair is that excessive and insensitive use of
enforcement procedures especially procedures that do not accord
adequate respect to the right of workers and unions to take
industrial action to protect and promote their legitimate social
and economic interests may well be counter-productive both in terms
of those who seek to use them and in terms of protecting the
integrity of the system of which they are a
part.(68)
The Bill takes workplace relations power away from those with a
practical interest in a cooperative approach on construction
projects i.e. unions, employers and others directly involved and
places this in the hands of a new industry watchdog, the ABCC,
whose raison d'etre will be to ensure compliance with the
Bill and to initiate legal proceedings and seek penalties in the
case of non-compliance. Whatever the extent of current problems in
the industry, Parliament may wish to consider whether this approach
will be the most effective in encouraging a productive and
efficient building and construction sector.
-
Kevin Andrews (Minister for Employment and Workplace Relations),
'Second reading: Building and Construction Industry Improvement
Bill 2003', House of Representatives, Debates, 6 November 2003), p.
22283.
-
ibid.
-
Department of Employment, Workplace Relations and Small
Business, 'Response to the Senate Employment, Workplace Relations,
Small Business and Education Legislation Committee, Senate,
Debates, 10 February 1999.
-
http://www.aph.gov.au/library/pubs/CIB/2002-03/03cib30.htm.
-
The report is available on the Government's
'Australian Workplace' on-line site
(http://www.workplace.gov.au/Workplace/WPDisplay/0,1280,a3%253D5921%2526a0%253D0%
2526a1%253D517%2526a2%253D637,00.html)
-
The Age, 4 November 2003.
-
Kevin Andrews (Minister for Employment and Workplace Relations),
'Ministerial statement: Royal Commission into the building and
construction industry', House of Representatives, Debates,
25 March 2004, p. 27297.
-
http://www.aph.gov.au/Senate/committee/eet_ctte/building03/submissions/sublist.htm
-
Australian Industry Group, letter covering submission to Senate
Employment, Workplace Relations and Education References Committee
Inquiry into Building and Construction Industry Improvement Bill
('Senate inquiry'), 4.11.03.
-
ACCI submission to Senate Inquiry November 2003, p. 13.
-
Master Builders Australia, submission to Senate inquiry 1.12.03,
pp2-3.
-
HIA submission to Senate inquiry, 30.11.03, p 3.
-
ibid.
-
ACTU submission to Senate Inquiry December 2003.
-
Workplace Express, 18.3.04, at
http://www.workplaceexpress.com.au.
-
CFMEU (Construction and General Division) submission to Senate
inquiry December 2003, pp 4-5.
-
ibid.
-
Australian Financial Review, 3 February 2004, p. 3.
-
Mr Greg Packer, submission to Senate Inquiry 3 February 2004, p.
6.
-
ibid.
-
Letter from Action Constructions to Secretary Senate Inquiry, 22
January 2004.
-
ibid.
-
Concept Engineering (Aust) Pty Ltd, letter to Senate inquiry
25.11.03.
-
See interview with Professor Andrew Stewart on the Building
Industry Royal Commission's recommendations in Workplace
Intelligence, May 2003, http://www.cpd.com.au
-
Professor Ron McCallum, statement to Senate Inquiry.
-
Anthony Forsyth, Law Faculty ANU, 'What's in a name? The Federal
Government's IR Agenda', Industrial Law News, issue 7, 16
July 2003, p. 4.
-
Slater and Gordon submission to Senate inquiry, January 2004 p
1:
-
The Commonwealth's ability to legislate in the area of workplace
relations is based on a combination of powers in the Australian
Constitution: primarily s 51(35) 'conciliation and arbitration for
the prevention and settlement of industrial disputes extending
beyond the limits of any one State'. As Creighton and Stewart note,
however, 'the wording of s 51(35) suggests that the founders of the
Constitution intended that the Commonwealth Parliament should have
only a limited power to make laws with respect to industrial
relations'.
Other provisions in the Constitution have been used in an
attempt to broaden the constitutional coverage of Commonwealth
workplace relations laws, including s 51(20) corporations, 51(1)
trade and commerce and 51(29) external affairs. But compared with
the ability of the States to legislate on the full range of
industrial and workplace relations matters, Commonwealth coverage
in this area remains incomplete. According to Creighton and
Stewart, 'relatively few incorporated bodies would now be excluded
from the reach of s 51(20) .Nevertheless, there are many small to
medium employers in Australia who do not have corporate status, but
instead operate as sole traders or partnerships'. Moreover, 'what s
51(1) cannot do is to reach employers engaged only in intrastate
trade, many of whom are likely to be the very businesses who would
also fall outside the scope of the corporations power.' (Labour
Law, an introduction, 3rd edition pp 82-4)
The High Court has held that the external affairs power in s 51
(29) can justify legislation including industrial relations
legislation - that is 'reasonably appropriate and adapted to' the
implementation of an international instrument (Victoria
v Commonwealth (Industrial Relations Case) (1996)
187 CLR 416. Thus, where an international instrument such as an ILO
Convention addresses the relevant area, the external affairs power
can be used to ensure that workers who might not come within the
other heads of power are covered by the Commonwealth legislation.
However there is uncertainty about whether the external affairs
power can be used to implement anything less than an international
'obligation'.
As Harris states, it should be noted that the court in the
Industrial Relations Case 'did not find it necessary to
decide whether mere recommendations (as opposed to treaties) could
form the basis of s51(29) legislation.' (Bede Harris, Essential
Constitutional Law, p 135). According to Blackshield and
Williams, 'despite some peripheral comments on that question in the
Industrial Relations Act Case, the precise effect of
'recommendations' must still be regarded as open'. (Blackshield and
Williams, Australian Constitutional Law and Theory, 3rd
edition, p. 774).
-
Explanatory memorandum, Building and Construction Industry
Improvement Bill, p. 22.
-
'Ai Group submission on the Building and Construction Industry
Improvement Bill' (submission on exposure draft), at
http://www.aigroup.asn.au/scripts/cgiip.exe/ccms.r?Roxy=0x000198c1&PageId=1212.
-
Explanatory memorandum, p. 23.
-
http://www.workplace.gov.au/WP/Content/Files/WP/WR/PublicSector/Technical%20
Summary%206%20November.pdf
-
Explanatory memorandum, pp 9-10.
-
ibid., p. 10.
-
Eg. Crimes Act 1900 (NSW) s 330.
-
Department of Employment and Workplace Relations,
Information Sheet 11, 'Demonstrating Leadership: a new Building
Code' at
http://www.workplace.gov.au/WP/Content/Files/WP/WR/General/BuildingIndustryReforminformationsheet11.pdf.
-
Explanatory memorandum, p. 2.
-
While there was provision for 'certified agreements' in earlier
legislation, they were given prominence by the 1993 reforms to the
Industrial Relations Act 1988 which aimed to encourage bargaining
at an enterprise level without the necessary involvement of trade
unions. Under the Industrial Relations Act and its successor, the
Workplace Relations Act, valid 'certified agreements' prevail over
federal and state awards and orders of the AIRC, and displace
conditions of employment in prescribed Commonwealth laws. (see
Workplace Relations Act, sections 170LY and LZ).
-
Explanatory memorandum, p. 43.
-
Explanatory memorandum, p. 56.
-
Royal Commission into the Building and Construction Industry,
Final Report, volume 1, p.86, at
http://www.royalcombci.gov.au/docs/finalreport/V01Summary_PressFinal.pdf.
-
Explanatory memorandum, p. 78.
-
Constitution section 51 (20).
-
lause 227. See discussion of Chapter 12 below.
-
Workplace Relations Act section 298U.
-
(1987) 163 CLR 117.
-
Cole Royal Commission, op. cit., p. 101.
-
Explanatory memorandum, op. cit., p. 86.
-
Through the definition of 'union' which then affects various
other clauses.
-
Proposed Chapter 12 (Part 2) was discussed above, together with
the ABCC (see discussion of Chapter 2)
-
See for example Workplace Relations Act s 170CR, s 170HI, s
170NF, s 170VV, s 178, s 285F, s 298U and s 533.
-
These provisions appear to be modelled on Regulations 172 175 of
the Workplace Relations (Registration and Accountability of
Organisations) Regulations 2003.
-
See BCIIB Chapter 4 Part 3.
-
See BCIIB Chapter 9.
-
Creighton and Stewart, op. cit., p.28.
-
'Building taskforce targets Multiplex', Australian Financial
Review, 31 March 2004, p. 1.
-
ibid.
-
ibid.
-
Senator Andrew Murray, 'Ministerial statement: Royal commission
into the building and construction industry', Senate,
Debates, 25 March 2004, p. 21971.
-
ibid.
-
Clause 12.
-
Clause 16.
-
Clause 13.
-
Kevin Andrews (Minister for Employment and Workplace Relations),
'Ministerial statement: Royal Commission into the building and
construction industry', House of Representatives, Debates,
25 March 2004, p. 27297.
-
Workplace Relations Act section 83BB.
-
This section is drawn from Creighton and Stewart, p. 385.
-
ibid, p. 384.
-
ibid., p. 385.
Peter Prince and Jacob Varghese
7 May 2004
Bills Digest Service
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