Chapter 2 - Opposition Senators' Report
Introduction
2.1
The introduction into Parliament of the Building and
Construction Industry Improvement Bill 2005 is in its way a part response to the
reference committee's report Beyond Cole,
tabled in June 2004. The actual response is long-delayed, but the Opposition
party senators see the bill as pursuing a blinkered course of policy toward a
very distant but ever elusive goal of a union-free building and construction
industry.
2.2
The Government's 'vision' for the building and
construction industry is one of 'command and control'. That is, what the
Government refers to as the 'proper balance' in workplace relations will see a
workforce disciplined by individual workplace agreements, and therefore a
'flexible' resource for an increasingly efficient and prosperous industry.
Before this nirvana is reached, however, there are some matters of the real
world to be dealt with, and this bill is but the first of a number of bills to
provide for conditions which will transform the culture of the industry. As the
majority report sets out in detail, the Building and Construction Industry
Improvement Bill 2005 is far more limited in its scope than the original bill which
was the subject of the Senate inquiry. But the policy underpinnings are the
same, as are the assumptions which underlie these. The bill makes a bold demand
on the power of legislation to alter practices and behaviour, characteristic of
the building and construction industry, which have been operating for well over
a century.
2.3
As described in the majority report, the genesis of
this legislation is the fear that the unions involved in building and
construction will make last-ditch attempts to secure for their workers
favourable employment conditions in advance of legislation likely to pass the
Senate post-July 2005, which will eventually see these conditions greatly diminished.
The bill broadens the scope of what may be defined as 'industrial action' and provides
for penalties to be imposed for new breaches of the Workplace Relations Act,
and for increased penalties on current offences. All of this is to operate
retrospectively to 9 March 2005.
2.4
In the view of Opposition senators, this is a bill
which arises from groundless fears the Government has of the need to deal with
a sudden rush of union militancy. The Government alone remains convinced of the
credibility of the findings of the Cole Royal Commission and remains both alert
and alarmed. The introduction of the Building and Construction Industry
Improvement Bill 2005 is unlikely to affect the operations of the industry or,
it is to be hoped, the exercise of rights of any of its participants, including
unions, but the Government presumably believes it necessary to maintain its
legislative offensive. The Opposition finds class warfare legislation
disgraceful, even if its effect is minimal, and deplores the misuse of
Parliament in its making.
Pre-emptive negotiation of enterprise agreements
2.5
The Government has claimed that a flurry of union
activity has signalled a pre-emptive campaign to bring forward negotiations for
new enterprise agreements. It appears that only the Government has been
'spooked' by these reports, but for the Government perception becomes reality,
and provides the imperative for action. 'Reality' as is more commonly
understood, is less dramatic. As the submission from the Rail, Tram and Bus Industry
Union points out:
There has been no evidence provided by the Federal Government
that unions in the building and construction industry and, in particular, the
CFMEU in Victoria, is or has engaged in unlawful industrial action in any
discussions it may be having with employers to re-negotiate the current
certified agreements. Nowhere in the
second reading speech or anywhere else that we are aware of does the Minister go
beyond accusation and allegation into hard and fast evidence.[15]
2.6
The ACTU reminded he committee that this Government was
highly interventionist in the field of industrial relations, and far from
supporting the notion of a 'smaller the better profile for government, it had
taken a highly regulatory approach. This included concocting legislation to
favour one of the parties involved in negotiations.[16] Industrial relations, it appears is
far too important to be left to the interested parties involved, to negotiate
their way around agreements and disputes. The ACTU sees value in early
negotiations of agreements.
Right now, the CFMEU are
engaging in negotiations to try and arrive at enterprise agreements which will
roll over existing agreements for another three years. That is a completely
legitimate thing to do; there is no evidence that that is being done in an
unlawful way. In fact, if they are successful in doing that—and the indications
are that they will be—it will add stability and security to the construction
industry. But what it will also do is place those employers and those workers
in settled industrial relations which will go far beyond August of this year,
at which time this government will introduce into this parliament what in our
view would be a radical set of industrial laws, the essence of which is
inciting and encouraging employers to exploit their work force.[17]
2.7
The ACTU acknowledged that it was likely that the
Government 'could not bear' the thought that there may be some employees who
may in some measure be protected against any 'onslaught' the Government may
launch in the near future to further regulate and restrict the bargaining
rights of employees and their unions.[18]
2.8
Master Builders Australia (Queensland Branch) gave
evidence to the committee describing recent attempts by the state branch of the
CFMEU (known as the Builders Labourers' Federation in Queensland) to open
negotiations for the next enterprise bargaining agreement. The current
agreement expires in October 2005. It was readily conceded by the Queensland
MBA that unions were within their rights in attempting to bring about early
discussion on future enterprise agreements. Opposition senators also note that
in the course of displays of union organisation, including 'stunts' about
nine-day fortnights, 'sacred Saturdays' and a rush of annual leave
applications, no offences were actually committed. Opposition senators agree
that there must be agreement between parties as to when these negotiations
begin, and they note the undertaking of the Queensland MBA that this will occur
no later than three months before the end of the current agreement.
2.9
In the absence of evidence from the BLF, Opposition
senators are restrained from rushing to judgement on this matter. They
recognise that there appears to be a deterioration in relations between
employers and unions in Queensland
since the references committee visited Brisbane
in February 2004 to hear evidence on the predecessor of this bill. The
committee, or its individual members, heard both on and off the record of the
amicable relationship which then existed.
2.10
Opposition senators do not place responsibility for
this development on the majority of employers. There is considerable hard-nosed
industry appreciation of the vital role of unions in the organising of labour
hire and associated arrangements. The lean operations of large construction
firms depend upon strong working relations with union organisers, although the
Government shows no sign of having been informed of this.
2.11
Opposition senators believe it likely that previous
good relations have, in a number of places, been undermined by a campaign of
union vilification which has been part of the Government's policy of
marginalising unions. This has been accompanied by notice given that unions
will play little part in future processes to secure and preserve employee
conditions. Unions are being placed under considerable pressure, and the
consequence is not an intimidated union movement, but an assertive movement,
and, perhaps, unfortunately for good industrial relations, showing some
volatility in the face of determined attempts by the Government to ensure its
future impotence. Unions have little choice but to respond to this provocation
if they value their principles and acknowledge their historical and continuing
role. The Government has ensured that its warnings of union militancy have
become a self-fulfilling prophesy.
Issues of definition
2.12
The broadest possible definitions for 'building work'
and 'unlawful industrial action' are essential for the extension of the
Government's drive for a new workplace culture across the whole workforce. The
opposition of unions to this ambit definition has been made obvious. It is
summed up most eloquently in the submission from the Rail, Tram and Bus
Industry Union. Most of its members work under a federal award, and even those
who do not, mainly Queensland Rail employees will now be included within this
legislation under the 'excluded action definition in clause 72. A major
relevant federal award is the Railways Traffic, Permanent Way and Signalling
Wages Staff Award 2003. As the submission states:
Members involved in infrastructure maintenance work include
fettlers, track repair machine operators, gang protectors, track inspectors and
gangers. It would come as a great surprise to them to suddenly discover that,
by Federal Government fiat, they have been deemed, at least for the purposes of
the BCII 2005, to perform building work as building workers as part of the
building and construction industry. They would quite rightly respond that their
work does not include building or construction work. The cynical distortion
and/or manipulation of the English language by the Federal Government to
enlarge the catchment area for the application of this legislation can hardly
do the credibility of the process of government any good.
2.13
Opposition senators note that the Australian Industry
Group opposes the broad definition of 'building work' because it fears a
flow-on of what it sees as generous building industry working conditions into
the manufacturing sector. Normally, it would
be expected that the Government would react sympathetically to this line of
argument. The AiG has given no hint as to its speculations on why this advice
from the country's peak industrial body should be rejected. There can be no other
reason than the Government's expectation of advantage in quarantining a large
sector of the workforce in an industrial relations regime in which the
influence of trade unions is reduced to the point of being negligible. The fears
of the AiG should be allayed.
2.14
The truth of this is only just apparent from advice
given by DEWR.
The definition is deliberately broad to ensure that application
of the bill extends to the conduct of building workers, employers and
organisations. The definition is appropriate to bring about the structural and
cultural change the industry requires.[19]
2.15
That is, the Government will have the power that it
needs to chase the rabbits down every hole. To claim that this power will be
sufficient to 'reform' the whole industry is a very big claim, and counters the
view that this has only benign effect.
2.16
Opposition senators reject as ingenuous the suggestion
from DEWR that these are ambit powers. They are powers which the Government
will use to the full, and the only limitations on their use will be a
recognition, at some point in the future, of unforeseen consequences resulting
in a breakdown in industry productivity and profitability.
2.17
There are so many anomalies which result from the broad
definition of the building industry that protracted litigation will be
necessary to sort matters out. The Government appears determined to create
massive problems for itself and for building industries and beyond through its
insistence on this drafting. Committee senators believe that in its focus on
short-term political objectives, and its obsessively punitive intentions toward
the building unions, it is oblivious to the unforeseen and dangerous
consequences of imprudent legislation.
Overriding state laws
2.18
Opposition senators also believe that the issue of the
'excluded action' definition is worthy of note. The bill takes up a
recommendation of the Cole Royal Commission that industrial action protected
under state and territory legislation will not be 'excluded action' for the
purposes of this bill. That is, such action will be illegal. The ACTU pointed
to the difficulties that may result from this clause relating to the 'tortured
boundary' between Commonwealth and state laws. Small businesses would find
themselves in trouble if they strayed into disputes with 'constitutional
corporations' even as a result of a knock-on effect. The ACTU asked the
question:
...even if you assume that it is a valid exercise of power under
the corporations power, how on earth does a small employer in the construction
industry—and small employers are far and away the majority of employers in that
industry—work their way through the myriad of laws and find out whether or not
in any particular circumstance they are covered by state of federal law? It is
perhaps impossible to imagine putting such employers and workers in a more
complex legal situation.[20]
2.19
There are likely to be serious problems arising from a
piecemeal exclusion of state laws from the national industrial relations
regime. Opposition senators are opposed to this measure.
Retrospectivity
2.20
The Opposition has serious concerns about the
retrospectivity contained in this legislation, both in regard to the backdating
of the effect of the bill to 9 March
2005, and to increased penalties. The Senate Scrutiny of Bills
Committee noted in Alert Digest No 2 of 2005 that under Chapter 6 of the bill:
industrial action which is currently lawful, or which currently
falls within the definition of ‘protected action’, may be rendered unlawful by
the bill and those taking part in such action retrospectively subjected to the
‘sanctions and greater penalties’ in the bill.
This committee heard rather forced attempts by officers of
the Department of Employment and Workplace Relations to argue that
retrospective legislation is ‘not uncommon’, and claiming that in each of the
previous four parliaments there were over 100 bills with retrospective effect noted
in reports of the Senate Standing Committee for the Scrutiny of Bills. But as noted
by Senator Murray at the
hearing, the overwhelming majority of these retrospective provisions have
either a beneficial affect, make technical amendments, or relate to taxation
measures. At the hearing, DEWR officers noted four bills ‘that imposed
penalties retrospectively’. The Scrutiny of Bills Committee made adverse
comments in relation to those bills and restated its opposition to the
retrospective imposition of criminal sanctions.
In the case of the Criminal
Code Amendment (Anti-Hoax and Other Measures) Bill 2002, the Scrutiny of Bills Committee
wrote to the Attorney-General expressing the view that retrospectively
declaring something to be a crime would establish an unfortunate and
undesirable precedent.[21] The Scrutiny
of Bills Committee reiterated ‘its concern at the use of retrospectivity in the
creation of criminal offences’ and sought an assurance from the
Attorney-General that the provisions ‘will not be used as a precedent for the
retrospective creation of criminal offences in other circumstances.’ The
Attorney provided that assurance.[22]
Opposition senators are not
persuaded that retrospectivity is any way mitigated by vigorous publicity by
the Government. Retrospectivity is a legislative provision of last resort, a
provision restricted to policy of national significance to do with security or
criminal law: matters on which there can be agreement across the Parliament.
Pattern bargaining revisited
2.21
The Government party senators' report has ignored the
several references that were made in submissions and at the public hearing to
the issue of pattern bargaining. It is the case that this bill does not deal
explicitly with the issue but it can never be far away from any matter to do
with enterprise bargaining. This report will deal with some of the evidence
heard.
2.22
The continued ambivalence of the Australian Industry
Group to the issue of pattern bargaining has been noted by the Opposition
because it is considered to be far more representative of employer opinion than
the views expressed by other employer organisations. AiG membership is considered
likely to be rather more pragmatic in its approach because it represents
industry art the 'top end'. Such firms are more accustomed to working with
unions than are smaller businesses. AiG is selective in its support for pattern
bargaining, but it expressed support for a policy that would allow pattern
bargaining, while banning industrial action in support of pattern bargaining.
It was firm in its recommendation that project agreement provisions were
necessary. [23]
2.23
As previous reports from Opposition senators on this
committee have pointed out, there is fairly strong evidence of support for
pattern bargaining among employers. The CEPU provide the committee with
up-to-date evidence of this.
In relation to employers and whether they do or do not prefer
pattern bargaining, we find in the electrical industry that they almost
universally want pattern agreements, for the sorts of reasons you indicated.
The main problem, they say, is that if there is no common level of payment
achieved by a pattern agreement then it is very difficult for them to tender
for work, not knowing what wage structures they are competing against. For
example, yesterday I had a meeting with Spotless Asset Services, who maintain
government buildings like this. They were concerned; they wanted to start
negotiations early for the agreement that expires later this year to ensure
that they are on par with their competitors, because it is a very competitive
industry out there. We normally negotiate with the National Electrical
Contractors in each state in relation to the industry. They prefer and do enter
into agreements with us to provide for pattern agreements, because their
members—that is, the members of the association—demand that they do so.[24]
2.24
Pragmatism and flexibility have become casualties of
the excessively legalistic approach taken by the Government in the field of
industrial relations. Opposition senators will not be surprised to see at some
future time the Building Industry Taskforce launching a joint prosecution
against an employer and a union for their collusion in coming to an agreement
outside the narrow and prescribed path ordained by legislation.
Conclusion
2.25
Opposition senators regard this legislation as
obsessively punitive and opportunistic. Its genesis is Government concern about
union actions taken in accordance with the Workplace Relations Act. The powers
it purports to give employers in order to create 'balance' in enterprise
bargaining processes are already provided for under current legislation. Yet it
is setting up an extraordinary legislative platform which the Government
intends to use to limit the scope of union activity across the whole of the
industrial workforce. It is no consolation to Opposition senators that this grand
scheme will eventually fail. The law can be perverted only so far before it
becomes dysfunctional and manifestly at odds with the public good. The cost of
this discovery will be felt first by employees, and soon after by employers and
their shareholders and bankers.
Recommendation
Opposition members of the committee urge that the Senate
reject this bill.
Senator Gavin
Marshall
Deputy Chair
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