Should the ABCC Be Reborn? 1

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Friday, June 19th, 2015
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Out of all of the current policy issues relevant to the building and construction sector in Australia, few elicit as much raw emotion or polarisation of viewpoints as the Abbott Government’s efforts to reintroduce the Australian Building and Construction Commission (ABCC), with building industry lobby groups lobbying ferociously for the ABCC’s reintroduction but unions lobbying equally aggressively to stop this from happening.

Created in 2005 as part of Howard government efforts to restore law and order to the industry in the wake of the Cole Royal Commission, the ABCC was abolished by the then Gillard Labour government in 2012 in favour of the Fair Work Building Industry Inspectorate under a revised regime which narrowed what the range of actions which were considered to constitute unlawful conduct, reduced maximum penalties for unlawful conduct by up to two-thirds in order to align these with those levied against other industry participants and imposed additional constraints on the way in which the new regulator exercised its powers. Abbott’s Bill to reinstate the former regulator with essentially its full former powers remains stuck in the Senate.

So what are the issues and arguments? And do they stack up?

On the employer side, groups such as Master Builders Australia argue that in the decades prior to the former regulator’s introduction, an environment of fear, intimidation and widespread disregard for the law allowed powerful unions to bully employers into accepting agreements which lock in unproductive workplace arrangements and practices and to engage in unlawful and irresponsible behaviour which disrupted the ability of ordinary managers and workers to go about their everyday business in a safe and productive manner. Largely as a result of the ABCC’s work and that of a temporary taskforce which preceded it from 2002 until 2005, Master Builders says, the rule of law was largely re-established and the industry became safer, more productive and more harmonious.

According to employer groups, the benefits of this flowed through not just to contractors but also to workers, taxpayers and society and the economy at large. In total, the most recent report produced for Master Builders by economic modelling outfit Independent Economics (formerly Econtech), Australian households were $7.5 billion better off because of the cumulative benefits of better workplace practices during the Taskforce/ABCC era. Moreover, a more productive work environment meant more schools hospitals and public infrastructure was able to have been built for the same level of investment than would have otherwise been the case had the regulator not been in place, Master Builders says.

These sentiments are echoed by other industry leaders. Australian Construction Industry Forum Chief Executive Officer Peter Barda, for instance, says that whilst few wanted to see the draconian powers of the former regulator, there was a ‘very firm view’ around the ACIF table that ‘the ABCC seems to have been the only thing that would moderate the lawless behaviour of the handful of people within the industry who disrupt its ability to go about its work productively and efficiently’.

Furthermore, a raw look at some of the historic ABS data does appear to indicate a number of consistencies with some of the aforementioned claims about industrial harmony. In the ten years to June 2012 (a close approximation of the combined Taskforce/ABCC era), for example, overall levels of productivity within the construction sector grew by a total of 21.35 percent – more than double the 10.05 percent over the ten years prior to that. Over the seven years prior to June 2002, the industry lost an annual average of more than 160,000 hours due to industrial stoppages; over the ten year Taskforce/ABCC era, that average fell to just 55,300 days.

Moreover, evidence of widespread lawlessness within the sector has been backed up by several Royal Commissions and inquiries, including the Cole Royal Commission in 2003 and the most recent Royal Commission into Trade Union Governance and Corruption. Indeed, even a report by the Gillard Labour government which was prepared by former Federal Court judge Murray Wilcox in 2009 acknowledged that the ABCC had ‘made a significant contribution to improved conduct and harmony within the construction industry’.

Not surprisingly, however, unions tell a different narrative. The former ABCC, Construction, Forestry, Mining and Energy Union (CFMEU) boss Dave Noonan says, represented part of a WorkChoices era campaign by the then Howard government to drive down wages, entitlements and safety within the sector, and exercised its power in a partisan and unaccountable manner in which unions and workers were targeted but little was done about matters such as unpaid wages or sham contracting. Such partisanship, Noonan says, recommenced when a newly elected Abbott government appointed former ABCC boss Nigel Hadgkiss to head the FWBC in 2013.

On the subject of the Bill itself, the union does raise concerns about specific provisions, such as a clause which expressly abrogates the common law privilege against self-incrimination and prevents people individuals from refusing to comply with information requests even when providing that information could lead to contravention of another law or could possibly lead to self-incrimination – albeit with that clause specifying that documents and information produced as a result will not be admissible as evidence in any proceeding against the person concerned except for under a very limited range of circumstances.

The union also takes issue with the methods involved in the IE report on productivity and disputes its conclusions – Noonan instead insisting that best ways in improve productivity are to promote a more positive industry image and to beef up training efforts.

However, the CFMEU boss says the bigger point is that workers on building sites should be treated no differently to those in other sectors of the economy.

“The issue is the proposition that you have an entirely different set of laws and an inferior set of rights for one group of Australian citizens because they happen to work in the construction industry,” Noonan told Sourceable in a recent interview.

On a number of issues, the unions do appear to have credible support. The Law Council of Australia, for instance, has raised concerns about several aspects of the Bill, including the aforementioned self-incrimination issue and how the Bill does away with requirements for the ABCC to first apply to the Administrative Appeals Tribunal prior to issuing examination notices.

Regarding assertions about the ABCC and productivity, meanwhile, a Productivity Commission report into infrastructure delivery last year found evidence of a large aggregate productivity impact associated with the previous Taskforce/ABCC era contained in the aforementioned IE report to be ‘unconvincing’, although it did acknowledge that the case that more stringent regulatory arrangements had improved productivity in some parts of the industry was ‘compelling’.

The union may also appear to have a point on the topic of regulatory partisanship. A quick glance through some of the media releases FWBC has put out since its change of leadership and direction following the Abbott government’s election does appear to show a lot of actions being brought about in relation to alleged unlawful union conduct (which is welcome) but not much about actions being brought against employers for matters like sham contracting

Furthermore, to a casual observer, a number of the union’s arguments do seem to make intrinsic sense. If people who are subject to investigations involving crimes such as murder, rape and assault have a right to silence, Noonan appears to be justified in arguing, so too should someone who pumps concrete and is the subject of investigations into alleged civil breaches of workplace law. More broadly, the notion of those who operate cranes or dig trenches on commercial construction sites being subject to different workplace regulatory arrangements to someone who works at a warehouse or in a hospital or bank does seem intrinsically problematic.

On that last point, Master Builders counters, special arrangements for the building sector are only necessary because unions for decades had shown wilful disregard for the law, and that all the industry was asking is for construction unions to behave like ‘normal people’ and respect the rule of law. No worker who obeys the law, ACIF’s Barda adds, would have anything to fear from the ABCC’s reinstatement.

Finally, a further viewpoint put by renowned construction industry guru David Chandler is that the ABCC Bill as it currently stands is misdirected. Chandler, who acknowledges that the CFMEU is out of control and needs to be brought back into check (but adds that the same could be said about a lot of employer practices) would instead like the ABCC to be reformed as a broader Construction Industry Productivity Commission which would be invested with specific long-term goals surrounding broader construction productivity and competitiveness measures and would include a sub-element to deal with unlawful workplace and industrial behaviour. Unless we have a civilised industry in which all parties embrace change, Chandler says, innovators, potential leaders and productive workers will opt instead to pursue opportunities in other industries and Australia will continue to fall behind in an increasingly globalising and evolving world construction market.

All in all, debate surrounding the ABCC remains polarised and politicised.

Whilst points raised on all sides have merit, it appears questions about whether or not the former regulator will eventually be reinstated will largely depend upon who is in power and the balance of power in the Senate.

In the meantime, employer groups will continue to push their case for the ABCC’s reinstatement.

Just as fervently, unions will continue to push back.

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  1. chris

    reinstatement is a must in order to have any teeth available to help combat the absolute lawlessness of the CFMEU thugs and crooks