Australia’s regulator for workplace relations in the construction industry achieved a successful prosecution in each of the court cases which it finalised in 2021/22, the regulator’s annual report shows.

And the regulator has beefed up efforts to crack down on wage underpayments.

But it remains in the process of being scrapped and its functions were transferred to the Fair Work Ombudsman on November 10.

Releasing its annual report for 2021/22, the Australian Building and Construction Commission (ABCC) says it has secured at least one successful prosecution in each of the 22 cases which it brought that involved court proceedings that were finalised during the financial year.

The regulator also recovered $5.278 billion in disputed payments for subcontractors along with $2.570 billion in unpaid or underpaid wages and entitlements for 4,430 workers.

The latest report comes as the ABCC is in the process of being abolished and its functions transferred to the Fair Work Ombudsman.

Re-established by the former Coalition government in 2016 after having previously been abolished by previous Labor Government in 2012, the ABCC has been responsible for regulating workplace relations across the civil and commercial construction sector in Australia.

Since its reintroduction, the ABCC has been supported by construction industry employer groups who see it as a strong and effective regulator of rampant unlawful activity within the building sector.

But it remains opposed by Labor and unions, who argue that the regulator is a politically motivated attack dog which unfairly targets unions and workers whilst failing to crack down on wage underpayments or safety breaches by employers.

Whilst wide-ranging legislation which will abolish the regulator among a raft of broader workplace relations reforms is still being debated, the Commission’s functions for regulating workplace relations were transferred to the Fair Work Ombudsman as of November 10.

According to its report, the ABCC in 2021/22:

  • Was successful in obtaining prosecutions in each of the 22 of its court cases which were finalised throughout the past financial year.
  • Secured more than $5.2 million ($5,278,478) in payments to owed to subcontractors under security of payment laws from a total of 436 cases and 3,789 individual claims of disputed or delayed payments.
  • Recovered more than $2.5 million ($2,569,8520 in unpaid or underpaid wages or entitlements for 4,330 employees relating to 151 employers. Of this, $1.737 million was recovered through auditing activity (161 audits were finalised during the period) whilst $832,436 was recovered through 78 investigations which were finalised following complaints from workers and unions
  • Conducted 1,638 site visits across Australia
  • Finalising 171 investigations and commenced 164 new investigations.
  • Assessed 1,577 enterprise agreements for compliance with the Building Code 2016 and 555 workplace relations management plans
  • Finalising 225 Code audits and 123 Code inspections
  • Delivered 203 educational presentations to 2,692 participants.

Of the 22 cases which the ABCC finalised, several delivered important wins for the agency.

In a High Court judgement handed down in April, for example, the regulator was successful in an appeal in which it argued that courts must impose penalties on offenders that adequately deter them and others from repeatedly breaking the law.

The case concerned a 2018 incident in which the Construction, Forestry, Mining, Maritime and Energy Union (CFMMEU) and its shop steward illegally prevented an apprentice and electrician from working on a Frankston construction site because they were not members of the union.

Whilst a single Federal Court judge had imposed the maximum penalty of $63,000 on the union and $6,000 against the shop steward in 2019 for breaching freedom of association provisions in the Fair Work Act, the Full Federal Count had subsequently reduced these penalties to $38,000 against the union and $4,500 against the steward.

But the ABCC was successful in its High Court appeal and had the maximum penalty reinstated.

In handing down his judgement, High Court Justic Snaden described the union as a ‘serial offender’ which has for many years wilfully breached workplace law and considered the financial penalties associated with doing so as little more than the cost of its preferred law-breaking model of operation.

In another successful judgement in June, the regulator achieved its highest penalty which it had brought in Queensland after the Federal Count awarded $840,000 against the CFMMEU and three of its representatives.

This followed union attempts to threaten or organise crane workers to stop work on three Brisbane construction projects in January 2021 as part of efforts to coerce the crane company and its labour hire provider to transfer the union’s site delegate from the Racecourse Road project to the role of health and safety representative at the Cross River Rail project.

All up, of the $3.087 million in penalties which the regulatory had successfully imposed, around 90 percent $2.723 million were levied against the CFMMEU whilst $211,000 were levied against four other unions and $153,460 were levied against six employers.

As part of its complaints about regulator bias, the CFMMEU has pointed to the portion of court cases and penalties levied against it and other unions compared to the relatively small numbers of cases and penalties which were brought and levied against employers for non-payment of wages.

In response to claims that it is unfairly targeting unions, however, the ABCC points to its high record of obtaining successful prosecutions in court proceedings which it launches along with frequent comments from high-court judges about the union’s record of persistent law-breaking.

On the first point, 90 of the 100 court cases which the regulator completed in its first five years of operation to December 2021 resulted in successful prosecutions whilst each of the 22 cases completed in 2021/22 resulted in successful prosecutions. This, the ABCC says, is evidence that pursues cases only where illegal conduct has been demonstrated to have occurred.

On the second, it points to frequent comments by Federal and High Court judges about the CFMMEU’s record of law-breaking activity.

As for the low number of cases brought against employers (three over the regulator’s first five years of operation) and penalties levied against employers for wage/entitlement underpayment, the regulator points to the amount of wages which it has recovered for workers.

Since its reintroduction in 2016, the ABCC has recovered $5.7 million in wages for 9,044 workers against 361 employers.

The low number of court cases, the ABCC claims, reflects its success in securing repayments for workers without staff needing to wait for long and complex court proceedings before recovering amounts owed.

Whilst unions have welcomed the ABCC’s abolition, employer groups fear that the abolition of the building regulator will lead to greater lawlessness in the construction sector.

In its submission to a Senate Standing Committee which is investigating the Bill, Master Builders Australia argued that the ABCC had been an effective regulator whose work had contributed to greater compliance on building sites.

As for the transfer of powers to the Fair Work Ombudsman, Master Builders argues that the FWO will not be an effective replacement for the ABCC – notwithstanding Master Builders’ level of respect for the work of the FWO and its best of intentions.

This is especially the case as the bill has not afforded the FWO any new powers, the necessary allocation of resources, or anything else to ensure that it is suitably equipped to tackle the widely known lawlessness in the sector.

“Master Builders emphatically opposes any moves that abolish the ABCC,” organisation states in its submission.

”All available evidence shows that the ABCC has been an effective and efficient regulator. The ABCC has made a significant difference in ensuring building industry participants comply with the rule of law and it has driven much needed positive industry cultural change. There are no sound grounds to abolish the ABCC or divert from the long-standing bipartisan approach of maintaining special industrial relations laws for the building and construction industry.

“The work of the ABCC is not yet done and its removal will undo the significant improvements it has delivered for our building and construction industry.

“Master Builders strongly opposes the abolition of the ABCC.”