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ABCC essential to return the rule of law to building sites

"It is essential that the ABCC Bill is passed without delay in order to deliver vital reforms to the building and construction industry and to reduce the costs that are ultimately borne by the entire community. Without its passage the unlawful and inappropriate conduct being constantly and widely displayed by construction unions will continue unabated," Ai Group Chief Executive, Innes Willox, said today.

"The ABCC Bill is about delivering important protections against this ongoing unlawful behavior which has been demonstrated in countless reviews and inquiries.

"The current inadequate laws and arrangements are resulting in higher construction costs which of course reduce the ability of Federal and State Governments to deliver vital community infrastructure like hospitals, schools and roads.

"The reforms in the Bill would apply equally to employers and unions. Those who comply with the law have nothing to fear from the ABCC.

"The unions make ongoing attempts, through misleading information and spurious arguments, to convince people that the ABCC Bill is unwarranted. Six of these spurious arguments against the ABCC bill are dealt with in Ai Group's latest submission and summarised below.

"The existing laws are operating as a major barrier to small subcontractors carrying out work on major construction projects. The existing laws are not effective in preventing union coercion of small subcontractors to sign up to very costly and inflexible industrial arrangements. The laws are also not effective in stopping unions coercing major contractors to only subcontract with those who have agreements with unions.

"We urge all Senators to support the ABCC Bill without delay in order to protect employers, employees, independent contractors and the community from unlawful and inappropriate conduct," Mr Willox said.

Media Enquiries: Tony Melville – 0419 190 347

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Spurious union arguments against the ABCC Bill

Spurious union argument 1 – There is no need for a separate regulator for the construction industry

The establishment of the ABCC was a central recommendation of the Cole Royal Commission. The recent Royal Commission into Trade Union Governance and Corruption (Heydon Royal Commission), supported the maintenance of a separate regulator for the construction industry.

Numerous respected judges have expressed dismay at the blatant disregard that the CFMEU has for the rule of law. In a judgment[1] handed down last year, Justice Tracey of the Federal Court remarked that the CFMEU has a “deplorable attitude…to its legal obligations and the statutory processes which govern relations between unions and employers in this country." He went on to say that: "Their continued willingness to engage in contravening conduct supports the view that earlier penalties, some of them severe, had not had a deterrent effect". In a judgment handed down a few months later in December 2015[2] imposing further fines on the CFMEU, Justice Jessup of the Federal Court described the CFMEU’s record of unlawful behaviour as “egregious”.

The ABCC is vital to the re-establishment and maintenance of the rule of law in the construction industry.

Spurious union argument 2 - The ABCC’s examination powers are unfair

The construction industry regulator's examination powers have been in place since June 2005 – initially with the Building Industry Taskforce, then with the ABCC and now with FWBC.[3] The powers have operated fairly and appropriately throughout this whole period. The ABCC / FWBC examination powers are similar to those possessed by the Australian Securities and Investments Commission (ASIC), the Australian Competition and Consumer Commission (ACCC) and the Australian Taxation Office (ATO). Accordingly, there is nothing particularly exceptional about the ABCC / FWBC examination powers, but it is vital that they be maintained.

The examination powers are subject to very substantial protections, including oversight by the Commonwealth Ombudsman.

History shows that the CFMEU will not cooperate with the Regulator unless the examination powers exist. Prior to the powers being implemented in June 2005, the CFMEU adopted a blanket policy of its officers, staff and delegates refusing to be interviewed by the Regulator, which frustrated many investigations into unlawful conduct. The truth is that the powers have been mainly used by the ABCC / FWBC to interview employer witnesses, who fear retaliation by the CFMEU if they voluntarily give evidence about unlawful union conduct.

Due to a sunset provision in the current legislation, the powers will come to an end on 1 June 2017, i.e. in less than 12 months’ time, unless the ABCC Bill is passed. Clearly, there is an ongoing need for the powers given the CFMEU’s ongoing blatant disregard for the law.

Spurious union argument 3 – Higher penalties for breaches of workplace laws in the construction industry are not warranted

The higher penalties in the ABCC Bill are consistent with recommendations of the Cole Royal Commission and Heydon Royal Commission. The penalties in the ABCC Bill are similar to those which operated between 2005 and 2009 when there was a significant reduction in unlawful conduct in the construction industry.

As discussed above, numerous respected judges have expressed dismay at the blatant disregard that the CFMEU has for the rule of law. The existing penalties are obviously inadequate. Employers, employees, subcontractors and the community are entitled to expect that Parliament will implement appropriate laws to address the unlawful and inappropriate behavior that is occurring.

Spurious union argument 4 – The ABCC Bill would not lead to higher productivity

This argument was analysed and rejected by the Heydon Royal Commission.

Unlawful industrial action, unlawful coercion, bogus safety disputes, unlawful picketing, breaches of union entry rights, and the many other types of unlawful conduct that are commonly occurring obviously have a large, negative impact on productivity. This is common sense. It is also common sense to conclude that there will be significant productivity improvements if this unlawful conduct is effectively addressed.

Spurious union argument 5 – The ABCC Bill would adversely impact upon workplace safety

Perhaps the most spurious of all union arguments about the ABCC Bill is that it would adversely impact upon workplace safety. Work health and safety is a matter that is largely regulated by State and Territory laws and Regulators. The ABCC is responsible for investigating and prosecuting breaches of industrial laws, not WHS laws.

Spurious union argument 6 – The Building Code under the ABCC Bill would impede enterprise bargaining in the construction industry

A key recommendation of both the Gyles Royal Commission in New South Wales and the Cole Royal Commission was the importance of using the substantial purchasing power of Government to stimulate reform and ensure that construction industry participants operate within the law.

The current Building Code 2013, which was made under the Fair Work (Building Industry) Act 2012, is inadequate.  The ABCC Bill provides for the making of a new Building Code. A strong and effective Building Code would have real and measurable impacts on the behaviour of building industry participants with consequent benefits for the whole community.

It is important that the new Building Code only apply to enterprise agreements made after the date when the Code comes into effect under the ABCC legislation. This will enable everyone to understand the Code requirements when they are making a new enterprise agreement, and enable the construction industry to move forward in a productive manner.

 

[1] Director of Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union [2015] FCA 1213 at [62]-[63]:

[2] Director of the Fair Work Building Industry Inspectorate v Construction, Forestry, Mining and Energy Union (The Red & Blue Case) (No 2) [2015] FCA 1462.

[3] Originally the powers were given to the Building Industry Taskforce which was replaced by the ABCC on 1 October 2005 under the Building and Construction Industry Improvement Act 2005. The Building and Construction Industry Improvement Act 2005 was replaced by the Fair Work (Building Industry) Act 2012. The powers are currently held by FWBC under the Fair Work (Building Industry) Act 2012.