Office of the Australian Building and Construction Commissioner

Ai Group National Construction Conference

3 May 2010

The Langham Hotel Southbank

• The ABCC commenced operations in October 2005.
• We have undertaken our role in a determined and professional manner. The topic for this presentation contains a question, is the job done? The answer is no!
• The activities of the ABCC continue unabated. The number of investigations undertaken was 262 in 2008/09 and 272 to date in 2009/10.
• The matters we investigate range across various types of contravention. The most common in the current year are unlawful industrial action, coercion and right of entry abuse.
• The number of court cases commenced was 21 in 2008/09 and 25 in 2009/10 to date. We have 34 matters currently before the courts.
• Penalties levied in all ABCC cases total over $2 million.
• We conducted 59 compulsory examinations in 2008/09 and 36 to date in 2009/10.
• Some in the industry choose not to exercise reasonable care in understanding the law or the National Code. On 3 May 2010 we had to issue an ealert drawing attention to union pressure in Queensland on contractors to sign a MOU with the union. An employer signing the MOU would not be National Code compliant.
•  We devote considerable resources to the major investigations and cases. High profile cases involving the following projects, for example:
• the Westgate Bridge;
• Perth to Mandurah railway;
• Maryvale pulp mill;
• Royal Childrens’ hospital; and
• Pluto LNG plant in the Pilbara
• This is only part of the story. Just as important to the credibility of the ABCC are the numerous small cases we attend to. It is wrong for any employee or subcontractor to go to work facing the prospect that they will encounter threats, coercion and intimidation. If such conduct is allowed to persist the economic and commercial consequences are potentially serious. Respect for the rule of law and social cohesion can suffer.
• We treat every contravention of the law seriously. If you encounter unlawful conduct on a small project let us know. It will be thoroughly investigated.
• I said earlier that our job is continuing. I will now refer to some recent concluded cases that demonstrate the need for continuing vigilance. The cases indicate that some in the industry remain ready to exploit any complacency in regulation.
• In December 2009 the Federal Court in Brisbane penalised the CFMEU and an organiser $49,000 after an ABCC investigation revealed they attempted to coerce an elderly company director into making a union agreement.
• The well-established shop-fitting company had an AIRC-certified agreement in place. The union showed no regard for the company’s existing lawful arrangements. The union organiser visited their site and threatened to ‘blackball’ the company and ban them from all building sites in Australia, unless they terminated their agreement and entered into a new one with the CFMEU.
• Without seeing the company’s workshop, the union warned this elderly gentleman that they would do a workplace health and safety audit of the workshop that would require more than $30,000 worth of improvements. The Court regarded the union’s conduct as ‘extreme and completely unacceptable.’
• The major contractor LU Simon unlawfully discriminated against two small subcontractors at a Docklands construction site, because one of the subcontractors didn’t have a CFMEU agreement. This occurred in March 2007.
• LU Simon engaged Axiom Design to install a glass handrail on the project. Axiom then subcontracted the work to Vanderkley who employed two people. Vanderkley’s two employees were not covered by a CFMEU agreement.
• LU Simon refused Vanderkley entry to the site on three occasions. The LU Simon site foreman told Vanderkley to go to the CFMEU office and sign a CFMEU agreement. He was told he needed to do this before he would be allowed to begin work at the site. After about a three week stand off LU Simon varied Axiom’s contract so that it was no longer required to install the handrail. Vanderkley did not work at the site.
•  LU Simon admitted to infringing the rights of Axiom and Vanderkley. The Federal Court imposed a penalty of $55,000.
• In another case Walton Construction engaged Monjon to undertake security services and traffic management at a Brunswick Police station site. A CFMEU shop steward discovered that the Monjon employees were engaged on individual agreements. The union and its officials demanded Walton Construction terminate the services of Monjon. Walton Construction then terminated the Monjon contract.
• This was a flagrant breach of the law. It is unlawful to take action to coerce a contractor to not engage a person as a building contractor. It is also unlawful to discriminate against a contractor because of the type of industrial instrument their employees are employed under.
• The CFMEU, its shop steward and officials were penalised a total of $ 82,750. Walton Construction was penalised $50,000.
• I will now move to the lessons I have learnt as ABC Commissioner and what they portend for the future and the assessment of whether our job is done.
•  You, the industry’s contractors, sub-contractors, management and employees play an important role in setting the tone and culture for the industry. I submit that you need to make a stand against unlawful conduct. If you feel unable to do so then I suggest you tell us or the AiG:
• why you are unable to make a stand; and
• what could be done to allow you to do so.
• The conduct of the industry has improved. Industrial disputation and unlawful conduct are reduced. This is more apparent in states other than Victoria.
• The information I have presented earlier demonstrates that the atmosphere and culture on a number of sites is wrong. Sub-contractors and employees still encounter unlawful conduct such as strikes, coercion and intimidation. Right of entry requirements are ignored.
•  We will continue to vigorously pursue cases. We are not deterred by the intimidation and criticism that we attract. We will strongly support those who are prepared to take a stand against unlawful conduct.
• The ABCC’s compulsory examination power is integral to the fight against unlawful conduct. The code of silence, enforced through threats of reprisals if seen to be cooperating in an investigation is still perpetrated. We continue to use the compulsory examination power. You can avail yourself of its protection if you are subject to pressure not to assist an investigation of unlawful conduct.
• It is important to recognise the important protections that attach to the use of the power. We have to believe on reasonable grounds that a person has information relevant to an investigation. A written notice to attend is given at least 14 days before an examination. Legal representation of an examinee is a right. A person who gives information in good faith is not liable to:
• any proceedings for contravening any other law because of the conduct; and
• civil proceedings for loss, damage or injury suffered by another person because of the conduct.
• The powers and role of the ABCC attract comment and some of that is critical. Some of that criticism will be unfounded. An example of such misinformation is that the ABCC is somehow a cause of the industry’s poor OHS record.
• The BCII Act permits employees to stop work if they have a reasonable concern about an imminent risk to their OHS. The ABCC has no jurisdiction over OHS. State OHS agencies, Comcare and the Federal Safety Commissioner have responsibility for the industry’s OHS regulation. We refer matters to and work with these agencies when circumstances dictate. At the same time it is wrong, as the Federal Court has found, for OHS to be used as a ruse to advance an industrial agenda.
•  In conclusion, I believe that it is right to claim that the job of the ABCC has been successfully undertaken. But the job is not completed. More needs to be done.
• A lasting change in the conduct and culture of the industry will only be achieved if those who are inclined to contravene the law know they will be held to account. The law and the National Code are designed to achieve this. You have an active and committed regulator in the ABCC. The active engagement of the industry’s contractors will greatly assist in this task. Then the job may be done.

John Lloyd

13 May 2010