Why the ABCC Must Be Reborn 2

Wednesday, April 23rd, 2014
liked this article
Karabiner – 300 x 250 (expire August 31 2017)
Building Commission
FavoriteLoadingsave article

Today’s 24-hour media cycle can make news feel even more fleeting than in days when yesterday’s newspapers were tomorrow’s fish and chip paper. But participants in the building and construction industry should not lose sight of the recent criminal contempt of court verdict imposed on the CFMEU.

In its ground-breaking decision, the Victorian Supreme Court found that the union’s defiance of the court’s orders to cease its violent protests at Grocon’s Emporium site in 2012 was criminal.

Boral is also taking legal action against the CFMEU for allegedly orchestrating secondary boycotts to prevent the company supplying Grocon sites.

The criminal contempt verdict and the sworn affidavits of Boral employees in the company’s litigation will help expose the union’s modus operandi to the Heydon Royal Commission into Trade Union Governance and Corruption.

Just as importantly, these cases highlight how the toxic culture of the CFMEU shackles the productivity of a crucial industry and holds an industrial and financial gun to the head of the construction industry.

Only the principled stands of Grocon and Boral CEOs Dan Grollo and Mike Kane and the deep pockets of their respective companies allowed court action against the union to be initiated. The cost of their fight cannot be measured purely in the substantial legal fees and court costs which Grocon had to weather for two years prior to the recent decision. Wage, equipment and materials costs do not evaporate because a site is shut down by industrial action and builders face potential liquidated damages if projects are not completed on time.  Grocon alone has launched a damages claim against the union for approximately $10 million.

The brutal reality is that lack of resources makes such a legal self-defence a pipe dream for the vast majority of the industry of which the union is only too aware.

Only independent regulatory watchdogs with appropriately strong powers can provide any production against a union which does not feel itself bound to behave like normal members of the community or adhere to community standards of behaviour.

Prior to its abolition by the previous Government, the Australian Building and Construction Commission (ABCC) proved successful in suppressing industrial thuggery and ameliorating the influence of the CFMEU’s toxic culture on the construction industry.

The ACCC also has strong powers to investigate if secondary boycotts are occurring and must be encouraged to exercise them.

Union officials have pointed to Royal Commissions and Inquiries into union activities, including in the construction industry, over the past 40 years. They fail to point out that it was the Whitlam Labor Government which first de-registered the infamous Builders Labourer’s Federation (the forerunner of the CFMEU) and the Hawke Labor Government which finally broke the BLF in the 1980s with the help of the then ACTU leadership.

Suppressing industrial thuggery, upholding normal community standards of behaviour and boosting productivity used to enjoy bipartisan support. Labor and the Greens should recall this legacy and support the Government’s Bills to restore the ABCC.

FavoriteLoadingsave article


 characters available
*Please refer to our comment policy before submitting
  1. John Lowry

    It may be so, but it is only a piece of the large productivity puzzle. It's a case of what's good for the goose is good for the gander. Government's also need to address the issue of unreasonable contracting to prevent the unconscionable treatment of subcontractors. This includes contract time-bars that are impossible to meet with current methods, the inappropriate passing down of unmanageable risk and the use of ever more creative contract clauses to avoid payment, including termination for any (or no) reason. Contractors, from top to bottom, have a history of thriving on chaos, but the effect on productivity in the industry is 100% negative.

  2. David Chandler

    There is no question that the ABCC is needed to ensure unlawful industrial behavior is stamped out. The MBA has also hailed the New Building Code as "a weapon to boost productivity". Well that may be so, but what will improved productivity look like. How will it be measured. Surely not with old trailing indicators such as a reduction in days lost due to industrial disruption. Yes that's a start, but what about some leading indicators to point the way to improving the construction industry's overall productivity, cost effectiveness and innovation.
    I agree with John Lowry there is more to this than just putting a leash on the unions.What's good for the goose is good for the gander.
    It's time for construction's management and a few clients to step up and show the way. Construction costs are at least 20% too high. These costs will continue to rise without a plan to modernize the industry and measurably improve its efficiency. Or will this be a period where another opportunity to turn things around be lost by those who are happy work their days out with the status quo.
    I read a recently consented Enterprise Agreement (ref: AE406423) and frankly if that's what will set the productivity agenda from now till 2107 the situation is more dire than I imagined. It would be laughable if it wasn't so sad. There is a provision for a "Special Productivity Payment". In essence it's a payment for turning up because it's not paid otherwise, except for RDO's. The wording requires – "Employees in addition to their normal daily duties to assist the contractor in managing 3 key areas i.e.occupational health and safety, protection of the environment and community relations"
    One would have thought these were the lawful daily duties of an employee and certainly not the core elements of a credible productivity agenda.
    The rest of the Agreement goes on to set-out a series of escalating entitlements that will increase annually in the lead up to 2017.
    Missing might have been a requirement that employees produce work that complies with Australian Standards or their trade qualifications? But that may be restating the obvious as well.
    There is not a single obligation on the contractor to improve project pre-planning, to progressively reduce the need for wasteful on-site fabrication processes, to adopt the use of more off-site manufactures or to demonstrated significant reductions in on-site construction times. So it remains OK for projects to continue with their sub-optimal organisation and avoidable costs. Its OK to continue to transfer avoidable risk to others and to apply unconscionable dealings as described by Lowry.
    Unfortunately the industry these days is every man for themselves. There is no industry long view. The only unifying cause is the fight with unions.
    The challenge to the MBA and other peak bodies will be to propose a meaningful productivity agenda for an industry that has lost its way. I can hear the "buts" – we cannot speak for all, we are a Federation, its hard to get everyone in the tent, etc, etc. The reality is that it's time to stop representing the lowest common denominator and start raising the bar. Otherwise the so called new "weapon to boost productivity" will turn out to be no more than a big stick in a bucket of eggs.