Message from the ABC Commissioner
In the first half of 2011 the ABCC has increased the public value it delivers. We are expanding the scope of our regulatory work and geographic reach, as well as reviewing our educational activities, to make sure we deliver the most valuable and practical services to ensure fair and productive building and construction work.
As well as undertaking our usual suite of regulatory activities, the ABCC has broadened its responsibility to now investigate suspected contraventions of wages and entitlements laws in the building and construction industry and to take action to ensure workers receive their correct entitlements, with more than $100,000 already recovered for workers. You can read more about the ABCC’s wages and entitlements work in this Industry Update edition.
The ABCC’s activity levels are higher than ever. Nationally we have 123 active investigations, 26 matters being assessed by our internal legal department and 36 matters before the courts.
There has been a spike in our investigatory activity in Queensland during May and June 2011 due to industrial action particularly concerned with Queensland Government funded projects. The investigations at the Gold Coast University Hospital and Brisbane Law Courts complex were resolved in a matter of weeks, and swiftly brought before the courts.
Investigatory activity remains constant in Victoria. Allegations of unlawful industrial action persist at the Wonthaggi Desalination Plant in Victoria, and the ABCC has a number of active investigations related to the site. Civil litigation proceedings have already commenced in relation to some of the stoppages, and the ABCC recently became an intervener in proceedings before the Supreme Court of Victoria.
In the last edition I referenced the opening of the ABCC’s ACT office in Canberra. On 27 July 2011 I will open our Darwin office to ensure we are easily able to deliver services to the building and construction industry in the Northern Territory. Having a presence in the territories allows us to quickly respond when compliance issues arise, or when industry members need face-to-face advice. The new Darwin office will also allow us to better assist the NT industry participants to become National Code compliant and therefore eligible to tender for Australian Government work.
The ABCC occupies a unique position in the Australian workplace relations environment. As ABC Commissioner I am accountable for upholding the important principles of impartiality, accessibility and procedural fairness at the ABCC. We are wholly focussed on ensuring building work is carried out fairly efficiently and productively for the benefit of all Australians. In fact, this is the main object of the Building and Construction Industry Improvement Act 2005.
On 20 May 2011 I spoke to the Australian Industry Group’s National Construction Conference in Melbourne about the productivity benefits that flow from having good workplace relations settings. An efficient and productive industry is good for employees and their families, as well as employers, head-contractors and sub-contractors. With skills shortages predicted across the board we must work constructively to create an industry that skilled workers want to be a part of. A culture of harmonious workplace relations can only be brought about by genuine commitment and cooperation between all of the key players in this industry.
I encourage all building and construction industry participants to join in a two-way conversation with the ABCC about the kinds of services, tools and advice you need to implement good workplace relations procedures on your projects.
On a different note, on Thursday, 16 June 2011 I took part in the annual ‘CEO Sleepout’, an event organised by the St Vincent de Paul Society that challenges business and community leaders to experience homelessness first-hand for one night. Joining me in this event were numerous members of the building and construction industry, including CEO of Development for Mirvac (and the leading fundraiser for Victoria) Mr John Carfi, CEO of CBUS Property Mr Adrian Pozzo, and seven Executives from Lend Lease, All money raised goes directly towards the ongoing provision of Vinnies’ homeless services across the country. Donations are still being accepted, so please support a very worthy cause.
Spending a cold winter’s night sleeping on a sheet of cardboard quickly makes you realise how fortunate most of us are and certainly places a different perspective on the problems that we sometimes face in our working lives. The building and construction industry was well represented amongst the participants and the combined efforts of all who took part raised $4.1 million for this worthwhile cause.
I thank those people who supported my participation and also congratulate everyone who took part.
Leigh Johns
ABC Commissioner
Appointment of Deputy Australian Building and Construction Commissioners
The Minister for Tertiary Education, Skills, Jobs and Workplace Relations and Leader of the Government in the Senate, Senator the Hon. Chris Evans has announced the appointment of Mr Michael Campbell and Mr Brian Corney as new Deputy Australian Building and Construction Commissioners.
Both Deputy ABC Commissioners took up their appointments today.
Mr Campbell was previously the Executive Director, Workplace Relations Policy and Education, in the Office of the Fair Work Ombudsman. With qualifications in labour law and business, Mr Campbell brings extensive investigations and regulatory operational experience to the role of Deputy ABC Commissioner (Field Operations).
Immediately prior to his appointment as Deputy ABC Commissioner (Legal), Mr Corney was the Assistant Commissioner (Legal) at the ABCC. Mr Corney has legal and commerce qualifications and extensive legal experience working on the ABCC’s legal issues.
Mr Campbell will be responsible for the efficient and effective function of the ABCC’s field operations, while Mr Corney will be responsible for oversight of legal matters including civil penalty litigation.
In making the appointments the Minister commented that “Mr Campbell has extensive operational and stakeholder management experience in the workplace relations regulatory activities, and Mr Corney has considerable expertise in all aspects of workplace relations law, including as an industrial lawyer working in the building and construction industry.”
The Minister congratulated “Mr Campbell and Mr Corney on their appointment,” and said he looked “forward to them contributing to the work of the ABCC in bringing about fair and productive building and construction work for the benefit of the industry and the Australian economy.”
The ABC Commissioner, Leigh Johns, welcomed the appointments, “The appointments of Mr Corney and Mr Campbell add outstanding talent to the leadership cohort of the ABCC. I am very much looking forward to working with them and am excited about the contribution they will make to our task as a full service regulator of workplace laws in the building and construction industry."
2011 Budget initiatives affecting building and construction industry
The Australian Government introduced a number of new initiatives and measures in the 2011-12 Federal Budget that will affect the building and construction industry. These include new training and apprenticeship opportunities, increased skilled migration, tax measures designed to attract private investment in infrastructure, and tax measures to improve fairness in the building and construction industry.
The budget bills received Royal Assent on 29 June 2011.
Summaries of the major initiatives affecting the building industry are below:
Infrastructure
Six billion dollars has been set aside for a new Regional Infrastructure Fund with $916 million provided for the first eight infrastructure projects to be funded.
Proposed funding to Infrastructure Australia is intended to facilitate the development of priority assessments for better allocation of major national project funding.
There are measures to make a $996 million equity investment in the Australian Rail Track Corporation for upgrades to major rail freight networks.
Investors in projects deemed nationally significant will have access to new tax provisions. Projects that Infrastructure Australia classifies as ‘Ready to Proceed’ or ‘Threshold’ will be able to access exemption from ‘continuity of ownership’ and ‘same business’ tax treatment tests on losses to try to create more certainty for private investors.
The Australian Constructors Association commended the enhanced role to be assumed by Infrastructure Australia with the development of a National Priority List for major projects and an infrastructure financing group to improve prospects for infrastructure-based Public Private Partnerships and private investment. The Master Builders Association also supported the proposal to improve deductibility provisions for some privately funded public infrastructure projects.
Skills
Investments in apprenticeships, addressing skills shortages and paths for skilled migration were also announced.
The Building Australia’s Future Workforce package which commits $3 billion to skills development over the next six years has a focus on training and support to meet skill demand across all sectors, including construction. This includes the establishment of the $558m National Workforce Development Fund as part of a partnership with industry to deliver more training outcomes.
These initiatives received strong support from the Australian Industry Group, Australian Constructors Association, Master Builders Association and the CFMEU.
Countering fraudulent phoenix activities
From 1 July 2011, tax laws to counter phoenix activity will take effect. The changes include:
- making directors personally liable for their company's failure to pay employee superannuation
- new ATO powers to commence recovery against directors for certain unpaid company liabilities that remain unreported after three months of becoming due, and
- the prevention of directors and associates of directors from obtaining credits for withheld amounts in their individual tax returns where the company has failed to pay withheld amounts to the ATO.
The new laws aim to ensure that employees receive their correct entitlements following a company collapse.
Reporting taxable payments
Certain businesses will be required to report annually on payments made to contractors in the building and construction industry. The arrangements will take effect from 1 July 2012.
This measure aims to improve voluntary tax compliance within the building and construction industry.
The Australian Industry Group and Master Builders Association expressed concern that this measure will impose an extra compliance burden on the industry. The CFMEU supports the move as a step towards a fairer system. On 30 May 2011 the Assistant Treasurer released a consultation paper seeking industry views on important aspects of the design of the reporting regime.
More information for these initiatives is available from the Budget 2011-12 website.
FWA ‘can act to revoke or suspend’ ROE permits when court penalties apply
A recent decision by Fair Work Australia (FWA) to suspend the federal right of entry permits of two CFMEU officials highlights its power under s.510 of the Fair Work Act (2009) (FW Act) for such action to be taken when courts hand down penalties for contraventions of right of entry laws.
Section 510(1) of the FW Act details a number of conditions under which FWA ‘must revoke or suspend entry permits’. (See Breakout Box). It does not require a submission to be made by any third party for such action to be taken.
One of the conditions for this action to occur is if a permit holder is ordered to pay a monetary penalty for a right of entry breach. In these circumstances FWA is obliged to suspend or revoke that person’s permit unless the suspension or revocation would be harsh or unreasonable.
On 10 December 2010, penalties totalling $50,500 were imposed on the respondents arising from the ABCC’s proceeding, Darlaston v CFMEU, CFMEU NSW, Parker, Hanlon, Kera & Mitchell, for contravening right of entry laws on a Sydney building site. Following this outcome, FWA suspended the permits of two of the defendants, highlighting both aspects of this power.
CFMEU Assistant Secretaries Brian Parker and Rebel Hanlon, and CFMEU organisers Robert Kera and Tom Mitchell were all found to have failed to comply with occupational health and safety requirements.
In addition, the court found that Mr Parker abused his right as a permit holder by both hindering and obstructing various workers at the construction site by making statements that were ‘blatantly unacceptable’ and that Mr Mitchell had acted in an improper manner when he drove at a gate behind which a worker was standing.
Following that judgment, FWA ruled that because of their role in the union and the nature of the contraventions, Mr Parker and Mr Mitchell would have their permits suspended for a period of three months.
With regard to Mr Hanlon and Mr Kera, even though monetary penalties were handed down against them, FWA considered the nature of their contraventions, their role and function in the CFMEU and the possible consequences of suspending their permits, to determine that suspending their permit was unreasonable.
Right of entry provisions contained in the FW Act ensure that permit holders, site managers and employees are each able perform their roles safely, fairly and productively, and must not be ignored.
Fair Work Act 2009 — Section 510
When FWA must revoke or suspend entry permits
(1) FWA must, under this subsection, revoke or suspend each entry permit held by a permit holder if it is satisfied that any of the following has happened since the first of those permits was issued:
a) the permit holder was found, in proceedings under this Act, to have contravened subsection 503(1) (which deals with misrepresentations about things authorised by this Part);
b) the permit holder has contravened section 504 (which deals with unauthorised use or disclosure of information or documents);
c) the Information Commissioner has, under paragraph 52(1)(b) of the Privacy Act 1988 , found substantiated a complaint relating to action taken by the permit holder in relation to information or documents obtained under section 482, 483, 483B, 483C, 483D or 483E;
d) the permit holder, or another person, was ordered to pay a pecuniary penalty under this Act in relation to a contravention of this Part by the permit holder;
e) a court, or other person or body, under a State or Territory industrial law:
i. cancelled or suspended a right of entry for industrial purposes that the permit holder had under that law; or
ii. disqualified the permit holder from exercising, or applying for, a right of entry for industrial purposes under that law;
f) the permit holder has, in exercising a right of entry under a State or Territory OHS law, taken action that was not authorised by that law.
(2) Despite subsection (1), FWA is not required to suspend or revoke an entry permit under paragraph (1)(d) or (f) if FWA is satisfied that the suspension or revocation would be harsh or unreasonable in the circumstances.
(3) Subsection (1) does not apply in relation to a circumstance referred to in a paragraph of that subsection if FWA took the circumstance into account when taking action under that subsection on a previous occasion.
Also see:
Case Information: Darlaston v CFMEU, CFMEU NSW, Parker, Hanlon, Mitchell & Kera
Media Statement: Right of entry provisions must not be ignored
Sham Contracting Inquiry and Roundtables – UPDATE
As many of you would be aware, in November 2010 ABC Commissioner Leigh Johns convened an inquiry and roundtable consultation into the issue of sham contracting in the building and construction industry. A call for written submissions closed in March 2011 and the ABCC received 20 public submissions.
The next phase of the process was to conduct a series of Roundtables that took place in March and April. These were held in Canberra, Sydney, Melbourne, Perth and Brisbane and attended by close to 150 representatives from federal and state governments, industry associations, employer bodies and contractors.
The discussions at each of the Roundtables highlighted the complexity of the problem and the need for enduring solutions. It became clear that one solution is unlikely to fit all situations.
Inquiry participants suggested a range of targeted measures that they believed could reduce sham contracting, including:
- more comprehensive ‘policing’ of the industry through targeted audit campaigns
- greater use of the National Code for the Construction Industry
- implementation of a licensing system to regulate legitimate contracting arrangements
- a broad range of education activities, including tailored education along the supply chain and education campaigns that take place before compliance programs are commenced, and
- more regulation of ABNs, including how they are obtained and used.
Participants also called for reliable empirical information about the extent of sham contracting in the industry and what sectors of the industry it impacts. A key theme at the Roundtables and in the written submissions was the need to validate any proposed regulatory responses arising from the Inquiry with sound understanding of the extent of the problem.
In response the ABCC is commissioning research to gain a fuller understanding of the extent and impact of sham contracting on Australia’s building and construction industry. The final report of the ABCC Sham Contracting Inquiry that was to be published by late June 2011 will now be postponed until the completion of this research.
The ABCC will continue to keep the industry informed of the progress of the Inquiry and its outcome.
Wages and entitlements – the story so far
On 11 October 2010, the ABCC assumed responsibility for investigating underpayment matters in the building and construction industry, taking over the duty from the Fair Work Ombudsman.
It has been a successful start to the program, recovering over $100,000 in lost wages and site allowance.
To allow ABC Inspectors to conduct these investigations, each Inspector has received additional training and undertaken the certification process to become a Fair Work (FW) Inspector.
As co-badged ABC and FW Inspectors, ABCC officials have an enhanced ability to ask employers for documents, ledgers, pay slips, and other material that can show if an employer has been paying workers as they should be.
If a breach is found, the ABCC can either work with the employer to help them better understand their responsibilities and bring about voluntary compliance or commence litigation to obtain compliance.
The former is the ABCC’s preferred course of action and means matters are resolved quickly and cheaply outside of the courts. Education programs also assist employers to run their business in compliance with all Commonwealth workplace laws.
ABC Commissioner Johns said many underpayments issues in the building and construction industry arise because of a lack of understanding by employers of their legal obligations.
“Employers are ultimately responsible for ensuring they fully comply with workplace laws and pay employees correctly,” he said.
“It is an important priority for the ABCC to educate employers about their obligations and the advice and guidance required to assist employers to comply with workplace laws.”
“The ABCC can provide one-on-one advice to employers in the building and construction industry about classifications and hourly rates, record keeping obligations, leave and termination issues and employment conditions. We also have a range of best practice guides available on our website.”
The ABCC promotes fair and productive building and construction work. It also monitors compliance and investigates breaches of national workplace legislation.
Employers or employees in the building and construction industry seeking advice should contact the ABCC Hotline on 1800 003 338 or visit www.abcc.gov.au.
ABCC joins Australian Indigenous Minority Supplier Council
The ABCC is delighted to announce membership of the Australian Indigenous Minority Supplier Council (AIMSC) as part of the program’s three year pilot.
AIMSC is a collaboration between government, corporate Australia and Indigenous-owned enterprises to promote mutually advantageous business and procurement opportunities. Becoming an AIMSC certified supplier allows Indigenous-owned companies greater opportunities to compete in ABCC procurement processes.
AIMSC aims to build a vibrant and prosperous Indigenous business sector by incorporating Indigenous owned, controlled and managed business into the supply chain of Australian companies and government agencies.
The ABCC’s membership of AIMSC embodies its commitment to facilitating the growth of Indigenous enterprises as highlighted in the ABCC’s Reconciliation Action Plan. For more information about AIMSC see the AIMSC website.
Court orders compensation as a result of union blockade
A case brought by the ABCC over a blockade and other coercive action at the Melbourne Markets relocation project has resulted in $120,000 in compensation for economic loss paid to six subcontractors at the site. The compensation is part of a landmark settlement in which the CFMEU was also found to be in contempt of court. The CFMEU faced a total payout of $560,000 for its conduct.
The Federal Court in Melbourne accepted that the CFMEU acted unlawfully by blockading the Melbourne Markets Relocation Project site between 19 May 2010 and 28 May 2010. The blockade occurred despite injunctive orders to restrain the conduct of the CFMEU and its officials, made by the Court at the ABCC’s application.
ABC Commissioner Leigh Johns said he was particularly pleased that compensation would now be paid to the smaller subcontractors affected by the blockade.
‘The blockade sought to force an agreement with the CFMEU instead of the AWU,’ said ABC Commissioner Johns. ‘Our industrial relations system allows employers to negotiate agreements with any union that covers their workers.’
‘Demarcation disputes threaten productivity, deprive workers of their wages and put hardworking subcontractors at risk.’
‘This decision underscores that the ABCC and the Courts will hold unions to account for the economic consequences of unlawful industrial action,’ said ABC Commissioner Johns.
Compensation under the BCII Act
Section 49 of the Building and Construction Industry Improvement Act 2005 (BCII Act) outlines the types of penalties and other orders that a court can make if it finds that a contravention has occurred.
As well as providing for pecuniary penalties to be made, s.49(1)(b) states that the court can make ‘an order requiring the defendant to pay a specified amount to another person as compensation for damage suffered by the other person as a result of the contravention.’
The ABCC will focus on seeking compensation for any persons who are injured or otherwise affected by the contravention, where damage can be determined. This commitment is reflected in the third edition of the ABCC Litigation Policy issued on 1 July 2011.
Also see:
ABCC website: Alfred v CFMEU
Repeated contraventions waste members’ funds
The results of two matters brought by the ABCC have highlighted the significant costs of repeatedly engaging in unlawful industrial action and coercion. The Federal Court in Melbourne has imposed penalties totalling $415,000 on the CFMEU and seven of its officials, over two matters that occurred in late 2008 and early 2009.
In Gregor v CFMEU, Christopher and Ors, the court imposed penalties totalling $305,000 on the CFMEU and six officials for disrupting work at the Royal Children’s Hospital and six other sites in Melbourne, to coerce the builder into employing a particular person.
In Cozadinos v CFMEU, Christopher & Ors, the court imposed penalties totalling $110,000 on the CFMEU and four of its officials, for disrupting work at the Royal Children’s Hospital and other sites across Melbourne to protest the swipe-card security system utilised by Bovis Lend Lease.
“Coercion and unlawful industrial action remain a high priority of our full service regulation of the building and construction industry,” ABC Commissioner Johns said.
“Our Litigation Policy makes clear that serious breaches like these justify civil penalty proceedings, to hold to account those who show no respect for the rule of law.
“There is no room in the Fair Work system for those who use the blunt instrument of unlawful industrial action to try to force into submission employers operating within the law.
“The community suffers through the economic impact caused by lost productivity, and the hindrance to the construction of vital infrastructure, such as the New Royal Children’s Hospital.
“Of course successful legal action like this is also comes as a significant cost to the unions, a cost that can be avoided. Construction unions can choose to pursue their industrial aims within the bounds of the law.”
The Victorian branch of the CFMEU was ordered to pay $2.5 million dollars in penalties and compensation in the 2010-11 financial year. Almost $1 million dollars was handed down by the courts in June 2011 alone.
“Union members pay their dues in good faith so that the leadership of their union can advance their industrial interests, not so organisers can squander funds paying for repeated unlawful actions, admitted by the unions. This should concern all union members.
“That’s $2.5 million that could otherwise have been spent on training, industrial research, OHS information and other member services, if only the unions’ leadership had complied with the law.”
Also see:
ABCC website: Gregor v CFMEU, Christopher & Ors
Cozadinos v CFMEU, Christopher & Ors