Construction Workplace Relations Penalties Soar

Tuesday, October 18th, 2016
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The amount of fines and penalties imposed for breaches of workplace relations law within the building and construction industry has soared by 30 percent, a new report has found.

And the number of enquiries received as well as the number of cases brought has also increased.

Releasing the latest version of its annual report, Fair Work Building and Construction (FWBC) said the dollar value of fines and penalties imposed for breaches of workplace relations law with the construction sector surged by 30 percent from $1.397 million in 2014/15 to $1.826 million in 2015/16.

Leading the way were right of entry breaches, penalties with regard to which jumped by more than two and a half times to come in at $915,000.

Penalties for coercion $599,755 actually dropped by around a tenth but those for unlawful industrial action and freedom of association were up more than sixfold and almost twenty-fold from $22,000 to $144,600 and from $7,500 to $133,500 respectively.

Fines and penalties levied for unpaid wages and entitlements as well as sham contracting have dropped away due to responsibility for these matters being transferred away from FWBC to the Fair Work Ombudsman (FWO).

The number of enquiries received by the agency also rose by 17 percent from 3,05 to 3,564.

It should be noted that of the aforementioned numbers for 2015/16 $483,200 worth of fines and penalties which related to alleged right of entry breaches and $166,500 of those relating to alleged coercion breaches were under appeal as of June 30.

Whilst it is possible that the surge in penalties issued and enquiries received could indicate a rise in lawless behaviour, it is also likely that the latest results at least in part reflect more proactive efforts on the part of FWBC as a regulator itself.

After the change of government in late 2013, the agency was given a renewed mandate and focus which saw responsibility for policing matters such as unpaid wages and entitlements and sham contracting allegations transferred away from FWBC to the FWO along with a beefing up of engagement and enforcement efforts in other areas.

As a result, the agency has instituted 327 new investigations into 1,499 possible breaches of the law over the past two years and commenced legal proceedings in 70 cases.

The number of presentations delivered to industry participants and the number of site visits are also on the rise – a phenomenon which reflects a stated desire on the part of FWBC chief executive officer Nigel Hadgkiss to improve the level of visibility of his agency on sites along with the level of awareness about FWBC and what it does.

In 2015/16, the agency gave 187 presentations to 2,984 industry participants – up from 122 presentations to 1,793 industry participants the previous year.

Site visits also increased from 1,290 in 2014/15 to 1,372 in 2015/16.

Whilst some action was taken against allegedly errant employers, by far and away the majority of action undertaken by FWBC involved allegations of unlawful behaviour on the part of unions.

Of 34 cases brought about by FWBC over the past year, 27 of these involved the Construction, Forestry, Mining and Energy Union (CFMEU) and/or its officials.

Throughout the reporting period, FWBC says it consistently had more than 100 officials from the Construction, Forestry, Mining and Energy Union before the court facing more than 1,800 contraventions of the Fair Work Act.

Hadgkiss expressed disappointment about what he said was an ongoing culture of unlawful behaviour within the CFMEU.

“Despite FWBC continuing to achieve overwhelmingly successful outcomes before the courts, with penalties exceeding $1 million for the second year in a row, the agency is having little effect on changing the unlawful culture that clearly prevails within the building and construction industry,” Hadgkiss said.

“When it comes to the culture of the CFMEU and the conduct of its officials, FWBC finds itself regularly placing the same officials before the courts, for contraventions equivalent or similar to those which have previously been proven.”

“This demonstrates that the repercussions for breaches of the law are falling far short of those required to bring about change in the industry and to restore the rule of law on the nation’s construction sites.”

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