Majority Report
1.1
On 16 March
2005 the Senate referred to this committee the provision of the
Building and Construction Industry Improvement and the Building and
Construction Industry Improvement (Consequential and Transitional) Bill 2005.
Background to the bill
1.2
This bill replicates part of the bill of the same title
introduced in 2003, and which lapsed when the Parliament was prorogued for the
2004 elections. It was introduced in the House of Representatives on 9 March 2005 by the Minister, Hon
Kevin Andrews MP. The Minister cited the findings of the Cole Royal Commission
as identifying the sources of industrial problems in the building and
construction industry.
1.3
The immediate spur to this legislation was the actions
of unions, particularly in Victoria,
in threatening industrial action aimed at coercing employers to sign enterprise
agreements before the current round of enterprise agreements expired. These
threats occurred during 2004, but since the election, and with the likelihood
of the Senate passing Government bills after 1 July 2005, increased union pressure for favourable
agreements was considered likely.[1] Such
industrial action would be unlikely to be protected under current provisions of
the Workplace Relations Act. The committee notes that the legislation provides
for retrospective effect from 9 March
2005, the date of the bill's introduction. The Government's
announcement about this retrospectivity attracted some attention at the time, a
point to be noted in regard to comment about retrospectivity during this
inquiry.
1.4
The Government has expressed its concern that should
unions be successful in reaching new agreements with employers, they may be
passed on to parties further down the contractual chain without there taking
place any genuine negotiation.[2] The
widespread use of pattern bargaining in the industry would probably encourage
this development.
1.5
There remains an element of doubt about this, and it is
possible that existing remedies are insufficient to support employers who
resist union pressure.[3] The Government
notes the decision of the Federal Court in the Emwest decision[4], in which
it held that a union may take industrial action during the course of a
certified agreement in relation to a matter not included in the agreement. The
provisions of the bill which strengthen the position of employers are set out
below.
1.6
The Government
has announced its intention of reintroducing bills covering the residue of
matters included in the 2003 bill, and the committee understands this will
occur in the second half of 2005.
Key provisions of the bill
Definition of building work
1.7
The committee majority notes the wide definition given
to building work, which is to include fit-out, restoration, repair and
demolition, and prefabrication of made-to-order components of buildings.
Regulations are to define particular activities, as circumstances require.
Definition of industrial action
1.8
Chapter 6 of the bill makes certain forms of industrial
action in the industry unlawful, and provides for easier legal remedies against
unlawful action. In contrast to provisions in the Workplace Relations Act,
which relate only to Commonwealth law, the definition of building industrial
action in this bill includes action taken in violation of state and territory
laws. The definition of 'industrial dispute' is broadened. On the contentious
matter of health and safety, which is often a pretext for unrelated industrial
action, the onus is placed on the employee to prove that industrial action was
based on reasonable concern about risk of injury or ill-health.
1.9
The bill introduces a statutory concept of 'unlawful
industrial action' in the industry. This is defined as 'all
constitutionally-connected, industrially motivated building industrial action
that is not excluded action', as defined in clause 72. An unlawful industrial
action would include a demarcation dispute between unions. It would also
include industrial action taken before the nominal expiry date of a certified
agreement. This clause is drafted so as to override the Federal Court's decision
in the Emwest case.
Penalties and enforcement
1.10
Civil penalties for unlawful industrial action are
provided, and these have been considerably increased. Unions taking unlawful
industrial action can be fine up to $110 000. The bill also increases penalties
for contravention of the 'strike-pay' provisions of the Workplace Relations
Act, where employees make payments for the support of workers on strike. The
maximum penalty is increased from $33 000 to $110 000.
1.11
Courts may order compensation to be paid to anyone
suffering damage as a result of unlawful action. Third parties - those not
directly involved in a dispute but suffering damage nonetheless - may also be
compensated. The bill also widens the scope of possible offenders to include
those who aid and abet, or advise, or conspire with those more directly
involved in unlawful action, and those who have some knowledge of the action.
Consideration of evidence
1.12
The committee received 11 submissions. It held a public
hearing on 4 May at which it heard from the Department of Employment and
Workplace Relations, six union or industry organisations, and from one
individual witness. The list of submissions and witnesses are in appendices to
this report. Questions and discussions ranged across all aspects of the legislation
and beyond, to the hypothetical matters likely to be included in the
substantial amendments to the bill in the shape of new chapters covering
industrial relations matters related to the building and construction industry.
This committee revisited a number of key issues dealt with in 2003-04 by the
references committee on the 2003 bill.
1.13
The bill received strong support from employer
organisations whose members provided them with up-to-date information on recent
and continued union campaigns aimed at creating instability in the industry in
the lead-up to new agreement negotiations. This softening-up strategy has long
been endured, but can no longer be tolerated. While the Australian Industry
Group has some reservations about some clauses in the bill, it gave unequivocal
support to the Government in its endeavours to legislate for peace and
stability in the industry. Commentary and analysis of the main issues
considered by the committee, and as represented by Government senators, are set
out below.
The definition of the 'building
industry'
1.14
There was concern expressed by both the Australian
Industry Group (AiG) and the Communications Electrical and Plumbing Union
(CEPU) about the wide scope of the definition of the 'building industry'. The
perspective of each of these organisations was different, but their objections
ran on parallel lines. The AiG was concerned that the broad-based definition
favoured by the Government would result in a campaign by general manufacturing
workers engaged in construction-related to the building industry, such as
manufacturers of bathroom fittings, doors or lifts, to have included in
enterprise agreements benefits currently restricted to mainstream building
workers.[5] This flow-on through the
metals industry and other industries would affect the profitability of general
manufacturing.
1.15
The CEPU saw the proposed definition as depriving
workers of rights they might enjoy as non-building workers, should the original
provisions of the 2003 bill be enacted any time after July 2005. It argued that
it was inappropriate for electricians working for railway infrastructure
authorities to be classed as working in the construction industry.[6]
1.16
DEWR officers explained to the committee that the
Government had noted the objections to the definition of building work by some
employer organisations, but considered their fears to be overstated.
.. I think it is overstating it to say that, if you fall within
the definition of building industry work, you are for all purposes part of the
building and construction industry. The bill does say that if you are
performing that sort of work then the prohibitions that the bill applies to
conduct relating to building industry work apply to you. It does not mean that,
if you are a truck driver who sometimes delivers to building sites, that for
all purposes you are part of the building and construction industry. It just
means that if you engage in industrial action associated with work associated
with the building industry then the prohibitions that this bill imposes will
apply to you.[7]
1.17
The committee was also told that the bill provides a
mechanism for regulating out certain classes of work that might be captured
inadvertently by this legislation. If the Government believed that that was not
appropriate to the objectives of the legislation it would be possible to make a
regulation which excised them from the coverage of the bill.[8]
1.18
The committee noted that there was less concern about
the definition of 'unlawful industrial action'.
1.19
Government party senators support policy and the
substance of clauses in the bill relating to these matters.
Retrospectivity
1.20
A number of submissions and witnesses commented on the
retrospective operation of the bill in regard to unlawful industrial actions
after the date of the introduction of the bill: 9 March 2005.
1.21
Union submissions pointed to the fact that few unions
or individuals would be aware of this clause in the bill, and the implications
for those unaware that they would even be covered by the scope of the
definition of 'building work' would be doubly severe. Government senators agree
that retrospectivity should be carefully considered before its provision in
legislation, and used sparingly. There will be circumstances that warrant its
use in this legislation, particularly in light of the record of some unions in
engaging in provocatively illegal behaviour. The committee majority believes that
retrospective prosecutions would not be lightly undertaken, and that it is
inconceivable that advantage would be taken of it to launch indiscriminate
prosecutions.
1.22
There was some discussion at the hearings for this
inquiry as to the incidence of retrospective legislation over recent
parliaments. According to research by DEWR, at the request of Senator
Murray, the incidence of retrospective
legislation, which for agreed purposes excludes those cases which are remedial,
which are benign, or which deal with tax laws, has been relatively constant. The
response from DEWR to Senator Murray's
question is at Appendix Z of this report. It is beyond the scope of this report
to comment on the comparative significance of the retrospectivity provided for
in this bill. While giving a customary caution about retrospectivity, the
Senate Scrutiny of Bills Committee recognises that the extent which
retrospectivity can be justified, or otherwise, is in each instance a matter
for the Senate to determine.[9]
Pre-emptive negotiations of
enterprise agreements
1.23
This issue was the raison
d'etre of the bill. The committee heard much conflicting evidence of the
extent to which this practice was occurring. The ACTU told the committee that
the current round of negotiations involving the CFMEU, intended to role over
current agreements was lawful and likely to result in improved stability in the
industry.[10] This, Government party
senators note, is the union whose Victorian branch secretary, as reported in The Age on 13 October 2004, promised that
employers had a choice: they could negotiate industry-wide (pattern bargaining)
agreements in 2005 in a 'peaceful climate' or, by following the Government's
urgings, in a climate of 'crippling disputes'.[11]
This comment was punctuated by language of the kind which deliberately scorns
the decencies of civilised discourse. Government party senators note this
language of class warfare: the proclamation of an image of thuggery and
contempt. It highlights the need for a cultural change in the industry.
1.24
The most compelling recent evidence of the practice of
disruption was presented by an official of the Queensland branch of Master
Builders Australia, who described the tactics employed by the state branch of
the CFMEU, known in that state as the Builders Labourers Federation. In an
attempt to conduct a state-wide campaign for early re-negotiation, the union
has orchestrated a series of threatened stop-work meetings over issues like annual
leave, Saturday work rosters and variations to nine-day working week rosters. Sporadic
stop-work meetings were held, and there have been frequent site meetings, all
of then contrary to enterprise agreements and therefore illegal. The unions
have not reported to prolonged strikes, as these would breach the relevant
provisions of the WRA. What industrial action has taken place has been highly disruptive.
1.25
The MBA submission included a large amount of evidence
of union intimidation, particularly in Western Australia,
Victoria and Queensland.
There has been no diminution in the level of industrial action. Unions in the
building and construction industry are responsible for about 30 per cent of the
total workdays lost around the country, even though the industry employs only
about 8 per cent of the total workforce.[12]
A high proportion of these disputes appear to be related to the negotiation of
enterprise agreements. Details are in the following table.
Construction
Industry Working Days Lost 2000-2004 (thousands)
|
Year to
December |
National
Total |
Construction
Industry |
Construction
as a percentage of total |
|
2000 |
469.1 |
108.8 |
23.2 |
|
2001 |
393.1 |
120.7 |
30.7 |
|
2002 |
259.1 |
101.6 |
39.2 |
|
2003 |
439.5 |
123.3 |
28.1 |
|
2004 |
379.8 |
120.1 |
31.6 |
Source: ABS Cat No 6321.0.55.001, December quarter
2004, released 17 March 2005.[13]
1.26
One of many instances of this was described by the
Australian Industry Group to the committee at its public hearing. It was
related how the AMWU in Victoria
attempted to pattern bargain for an enterprise agreement during the last
bargaining round. The AMWU
sent out an identical notice initiating bargaining periods right
throughout the industry to 1,000 companies. They then had a statewide stoppage
on the same day at the same time and sent out the same protected action notice
throughout the whole industry. That is just an industry wide stoppage
misrepresented as a stoppage about enterprise bargaining. We pursued that
matter in the industrial commission with the use of a QC before Justice
Munro. There were a lot of issues. But
within the space of two or three days, which was the only time we had to
organise that hearing, there was evidence of a large number of workplaces that
had not even started bargaining, they had no idea where this notice came from
or why it was there. The employer went to the employees and said, ‘We have just
had a notice saying you’re going to go on strike. What does this mean?’ The
employees said, ‘We did not even know we were going on strike. We know nothing
about it.’ So it just a misrepresentation of industrial action rights that were
put into the act in 1993-94 for enterprise bargaining, and it is a
misrepresentation to use that for industry bargaining.[14]
1.27
Government party senators take the view that such union
practices as have been described in the submissions to this inquiry are
intolerable in a modern industrial society. Harassment and intimidation have no
place in modern industrial relations. Whether such practices are a cause or an
outcome of an industry beset by obsolete practices is academic. Government
party senators believe that strong intervention is needed at the point where
most of the damage occurs. At some point an archaic work culture must be
reformed. The civilising of workplace relations is the place to start.
Conclusion
1.28
At the heart of this legislation lies the Government's
determination to deal with coercion by unions to achieve their ends in defiance
of the Workplace Relations Act. During the public hearing for this inquiry, members
of the legislation committee traversed old ground with questions and responses
on allegations of union intimidation, having dealt extensively with this matter
during the reference committee's inquiry into the findings of the Cole Royal
Commission and the provisions of the Building and Construction Industry
Improvement Bill 2003.
1.29
The committee majority is concerned about false
perceptions of so-called Government 'union-bashing' legislation, and the
failure of the Government's critics to recognise cause and effect. If building
union leadership in all states was more effective through being exercised more
intelligently, and if in all circumstances this leadership showed more respect
for the law, the culture of the industry would be sufficiently vibrant and
responsible not to require such targeted legislation as is currently before the
Senate.
1.30
As was revealed in the hearings held by the references
committee inquiry into the 2003 bill, the behaviour of both the Western
Australian and Victorian branches of the CFMEU is characterised by a confrontational
culture which sees industrial relations as a theatre of class warfare. The
committee notes that as a consequence building costs in Perth
and Melbourne are significantly
higher than in other cities. The economic and social benefits likely to flow
from the reform of the building industry will be quickly apparent, and will
result in benefit to the whole nation. This bill is but one step in promoting
this advance.
Recommendation
The committee majority
commends this bill to the Senate and urges that it be passed without amendment.
Senator Judith Troeth
Chair
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