Wed Jul 27

Killing off the building watchdog may not be the win unionists want

Written by Andrew Stewart, John Bray Professor of Law, University of Adelaide

Australia’s controversial building industry watchdog is earmarked for the chopping block. But federal industrial relations minister Tony Burke has started by pulling a few of its teeth ^[1].

He’s used his ministerial powers to gut the code of conduct ^[2] empowering the Australian Building and Construction Commission to wage war against everything from compulsory union agreements to workers displaying union logos.

The code of conduct applies only to contractors seeking or working on federally funded building projects – but they must comply with it on all their projects. So it has been a big stick for the ABCC.

Burke has likely moved to gut the code now because he can. Abolishing the ABCC will be harder, requiring Senate support to repeal the legislation ^[3] establishing it.

How the ABCC came into existence

The Howard government established the Office of the Australian Building and Construction Commissioner in 2005, following the 2003 final report ^[5] of the Cole royal commission into the building and construction industry.

Workplace relations minister Tony Abbott tables the report of the Cole royal commission into the building and construction Industry on March 27 2003. Alan Porritt/AAP

The royal commission had found “a culture of lawlessness” in the industry, in which participants

instinctively succumb to the exercise of industrial muscle in the interests of commercial expediency and survival.

Criminal activity such as physical violence and taking bribes was not unknown. The larger issue was workers and their union representatives using their collective power – threatening, say, to strike at a critical point – to achieve their demands.

Lawful or not, such behaviour got results, with many employers wary of taking the legal recourse open to them. The ABCC’s main job was to do this on their behalf by enforcing the rules relating to industrial action and freedom of association, among others.

The Gillard Labor government moved to abolish the ABCC in 2012 – though it still saw the value of a specialist regulator, replacing it with the Office of the Fair Work Building Industry Inspectorate.

But the Turnbull Coalition government found the Senate votes in 2016 to re-establish it (with a slightly different name, the Australian Building and Construction Commission).

Since then the ABCC’s main target has been the Construction, Forestry, Maritime, Mining and Energy Union. Of 31 cases it now has before the courts ^[7], 27 involve the union.

Building workers rally against the Australian Building and Construction Commission in Sydney in September 2018. Dan Himbrechts/AAP

Breaking the code

The union has certainly given the regulator reason to be active. Its officials have routinely been implicated in unlawful strikes, coercion and other misbehaviour, and the union has paid many millions of dollars in fines.

But some of the powers given to the ABCC through the Code for the Tendering and Performance of Building Work ^[9] (also introduced by the Turnbull government) were considered petty.

The code included incredibly detailed requirements on how contractors managed worksites, and on what they could agree on through collective bargains.

It banned union imagery because it might imply union membership was compulsory. Even a union’s logo on a safety poster was deemed unacceptable ^[10].

The code also precluded employers from agreeing to anything that limited their “right” to manage. As a result the ABCC ruled that many standard clauses ^[11] in union-negotiated enterprise agreements breached the code, even though they would be lawful under the Fair Work Act and unremarkable in any other sector.

Burke’s ministerial powers

Like the ABCC, the code was mandated through an act of parliament, so it can only be abolished with a further act. But it can be amended by regulation, which is what the minister has done.

Burke’s amendments ^[12] are mostly deletions, leaving just a handful of provisions specifically required by the governing act, and removing the ABCC’s oversight.

Workplace relations minister Tony Burke has gutted the federal government's Code for the Tendering and Performance of Building Work.

New workplace relations minister Tony Burke has gutted the federal Code for the Tendering and Performance of Building Work. Lukas Coch/AAP

Business groups will oppose the changes, but contractors may well breathe a sigh of relief at less red tape. They will no longer have to submit their enterprise agreements or workplace relations management plans for the ABCC’s approval.

Parliament could overule Burke’s amendments ^[13]. But the more likely argument will be in Senate about the ABCC itself.

Shifting responsibility to the Fair Work Ombudsman

With the Greens in support and the Coalition opposed, the government will need one cross-bench vote to abolish the ABCC.

The argument that workers in one industry should not be singled out for special restrictions is a powerful one.

On the other hand, there’s a strong case that CFMMEU officials will not stop breaching what they regard as unjust restrictions. In the absence of the ABCC, it will fall to the Fair Work Ombudsman to investigate alleged breaches of the Fair Work Act by union officials or workers.

Burke has said the ombudsman’s office will get more funding to do this, but not as much ^[14] as the ABCC, because it won’t have as many cases to prosecute.

There is some danger the ombudsman will have to choose between diverting resources from other work (such as combating wage theft ^[15]) and turning a blind eye to misbehaviour in the building industry, leaving it to those adversely affected to take court action of their own, as occurs in other sectors.

To secure a Senate majority the government may have to commit to giving the Fair Work Ombudsman’s greater resources and priorities.

If that results in a special unit for the building industry, with dedicated resources, unions may well wonder how much has really changed.