Building industry lobby groups fear a return of lawlessness on construction sites following moves by the new Labor Government to water down both the role and powers of the regulator for workplace relations in the building industry and a code of behaviour which is expected on Commonwealth funded building projects.

In a statement issued on Sunday, Commonwealth Minister for Employment and Workplace Relations Tony Burke announced several changes which he says will help end ‘unfair’ treatment of building and construction workers.

The changes are an interim measure whilst the government drafts legislation to abolish the Australian Building and Construction Commission altogether – legislation it expects to be introduced before the end of this year.

Under the changes:

• Powers of the Australian Building and Construction Commission will be pulled back to a legal minimum (refer below)
• The Code for the Tendering and Performance of Building Work will be amended to remove restrictions which the current code places upon enterprise agreements for companies and workers who are employed on Commonwealth funded building projects (refer below).

Highly regarded by employer groups but despised by unions, the Australian Building and Construction Commission (ABCC) is responsible for enforcing Commonwealth workplace relations legislation in the building and construction industry.

Its remit covers matters such as wages and entitlements, unprotected industrial action, freedom of association, coercion, discrimination, sham arrangements, unlawful industrial action and right of entry.

As part of its work, the ABCC is responsible for administering the Code for the Tendering and Performance of Building Work, which prescribes a range of workplace related behaviours and practices which are expected on major construction projects which are wholly or partially funded by the Commonwealth.

The ABCB was established by the then Coalition Government led by then Prime Minister John Howard in 2005.

It was established in response to Cole Royal Commission, which in 2003 found that the building and construction industry was characterised by widespread disregard for the law and that existing regulatory bodies had insufficient powers to enforce the law effectively.

It was subsequently abolished by the then Labor Government in 2012 in favour of what Labor set up as Fair Work Building and Construction (which had slightly more restricted powers) before being subsequently reinstated by the Coalition in 2016.

Its reinstatement in December 2016 followed further findings of the Royal Commission into Trade Union Governance and Corruption that the union had a culture of lawlessness and had engaged in widespread instances of illegal behaviour.

Since its reinstatement, the ABCC has been active in pursuing its role.

According to an Industry Update issued in January, the Commission in its first five years after its reestablishment:

• Completed 100 cases– 90 of which resulted in successful litigation.
• Achieved imposition of penalties totalling $15.261 million.
• Assessed more than 10,000 enterprise agreements for compliance with the aforementioned code.
• Recovered more than $4.98 million in unpaid wages for 8,200 workers. This includes recoveries of more than $1.6 million for more than 3,100 workers in the first half of 2022.

Of the 100 cases which have been completed, 90 resulted in a successful prosecution whilst a further nine were unsuccessful (one case was discontinued).

Despite being well regarded by employer associations, however, the ABCC has been despised by unions, who see it as an attack dog set up by the Coalition to target workers and unions in the construction sector.

As part of their criticism, unions accuse the regulator of pursuing unions and workers whilst neglecting to crack down on wage theft and safety violations.

Indeed, almost three quarters of the 100 cases which had been completed as of the industry update referred to above, 74 were against the Construction, Forestry, Mining and Energy Union.

Asked about its record earlier this year, a spokesperson for the ABCC pointed to the aforementioned fact that 90 of the 99 cases which the regulator has completed over the past five years have resulted in successful prosecutions.

As for the large number of cases being pursued against the CFMMEU, the spokesperson pointed to frequently reported comments about the union’s extensive history of unlawful conduct from judges.

When handing down fines of $221,000 against the union and two of its Tasmanian officials for contravening right of entry laws on the Elizabeth Street project in Hobart, for example, the Federal Court noted that ‘it is nowadays a notorious fact that the CFMMEU is a well-resourced, recidivist offender of workplace laws’.

Labor had promised to abolish the ABCC again as part of its 2022 election pitch. It expects to introduce legislation to this effect by the end of the year.

As an interim measure, the powers of the ABCC will be pulled back to a legal minimum.

In particular, the Fair Work Ombudsman will take on the role of enforcing the Fair Work Act in the building and construction industry.

All litigation commenced by the Australian Building and Construction Commission will also be managed by the Fair Work Ombudsman.

Meanwhile, the Government will retain the Federal Safety Commissioner, which acts to improve workplace health and safety practices on building and construction sites across Australia by administering the Australian Government Building and Construction Work Health and Safety Accreditation Scheme (the Scheme) and by promoting safety across the industry.

A review will be undertaken to evaluate the FSC’s effectiveness and the merits of adopting a similar approach in other areas of Government procurement.

Powers which the government considers to be more extreme will be scrapped altogether. Examples of these would include dictating whether or not workers could wear stickers on their helmet or preventing the inclusion of union logos on safety signs.

The government has also amended the Code for the Tendering and Performance of Building Work, which prescribes a range of workplace related behaviours and practices which are expected on major construction projects that are wholly or partially funded by the Commonwealth.

Having come into force on Tuesday – less than 48 hours after being announced – the amendments will aim to remove requirements in the Code which do not apply to workers in other industries.

Speaking on ABC radio on Tuesday, Burke said removed requirements included having flags and stickers on uniforms and on work sites along with the previous prohibition on clauses within enterprise agreements that encourage people to get permanent jobs or have apprenticeship requirements attached to them.

In a statement, Burke said the ABCC was a discredited body which had been ineffective in its work.

“The ABCC is a politicised and discredited organisation established by the previous government to target workers purely for ideological reasons, he said.

“It was set up by the Liberals and Nationals to discredit and dismantle unions and undermine the pay, conditions and job security of ordinary Australian workers.

“The ABCC’s record proves it has been more concerned with pursuing and punishing workers than tackling rampant wage theft and compromised safety standards.”

Not surprisingly, the moves to restrict the ABCC’s powers and revise the Code have been welcomed by unions but slammed by employer groups.

Speaking particularly of the aforementioned Code, CFMEU National Construction & General Division Secretary Dave Noonan welcomed the decision to rescind the existing Code and replace it with an amended interim code.

Noonan said the Code had failed to address issues such as workplace safety or wage theft.

He added the Code had led to unnecessary cost and red tape as employers have been required to have enterprise bargaining agreements approved by both Fair Work Australia and the ABCC and had seen hundreds of ABCC inspectors spending time searching for hard hat stickers and Eureka flags.

“The CFMEU welcomes the decision of the Workplace Relations Minister Tony Burke to rescind the Liberal Party’s Construction Code,” Noonan said.

“The Code was the last of a series of anti-union policies enacted by successive Liberal Governments.

“The Code prevented Construction unions and employers from freely bargaining under the Fair Work Act due to provisions banning apprentice ratios, indigenous employment clauses, measures to promote women in construction and even banning workers from wearing union logo stickers on their hard hat

“Even printed safety advice such as Covid information was banned by the draconian Code, simply because the logos of the union and employer groups were on the document.

“This is simply right wing cancel culture gone mad, enforced by a politicised and secretive government agency …

“There are important problems to be addressed in construction industry procurement, but the Code was nothing more than a bizarre and outdated list of Liberal Party prejudice.”

However, employer groups have cautioned that scrapping the regulator would see a return to lawlessness on construction sites and would further drive up the costs of delivering public infrastructure such as health, defence, aged care and transport.

In a statement, Master Builders Australia CEO Denita Wawn said that need for special regulation of the construction sector had been a bi-partisan understanding for decades.

Wawn pointed to findings of an inquiry commissioned under the Rudd Labor Government in 2008 led by the late Murray Willcox AO QC.

That inquiry found that a specialist construction regulatory agency which retained many of the powers of the ABCC was needed in light of the unique circumstances of the building sector.

“Going back decades Labor and Coalition governments at a state and federal level have implemented industry specific measures aimed at improving the performance of the construction industry,” Wawn said.

“Tackling the extreme militancy found only in construction unions has also received long standing bipartisan support. It was Labor Governments at the federal and state level which abolished the notorious Builders Labourers Federation.

“These measures were not focussed on discouraging the flying of construction union flags on construction sites but responded to the overwhelming evidence that construction unions use unlawful industrial tactics to bully, intimidate and coerce people working in the construction industry to sign up to union deals.

“The critics of the ABCC cannot simply ignore the continuous succession of Federal Court judgements documenting this reality.”

Australian Industry Group CEO Innes Willox expressed disappointment at the stripping back of the Code.

“The announcement today by the Federal Government that the Building Code will be stripped back to the bare minimum required by the ABCC Act is of great concern to businesses and should be of great concern to the broader community,” Willox said.

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