Photo of Director FWBC - Nigel Hadgkiss

Australia’s building and construction industry employs one in nine of all workers. That figure is more than one million people. In addition to this, the industry is the nation’s third largest contributor to gross domestic product. To my mind, there can be no doubt it is an industry where we must ensure that law and order prevails.

I regret to report that the 2014 to 15 financial year has been marked by alarming rates of lawlessness in the building and construction industry. The agency has received more than 3,000 requests for assistance, with more than 2,000 of those coming through our 1800 Hotline.

Throughout the year, the agency has focused on its core business areas of coercion, unprotected industrial action, right of entry, freedom of association and the Building Code 2013.

Since I took over as Director in October 2013, Fair Work Building and Construction’s (FWBC) vision has been that all Australian building and construction workplaces are productive and harmonious . As a consequence, our mission is to ensure that the Rule of Law prevails in the Australian building and construction industry .

I believe the contents of this annual report demonstrate two important points. Firstly, that the Rule of Law is severely lacking in the industry; and secondly, that the agency is doing all it can within its jurisdiction and means to curb that lawlessness. We are winning many battles in court against unlawful behaviour, but we are not winning the war to stamp out this unlawfulness or the notion by some participants that it is acceptable to break the law in this industry. It is not. This has serious consequences within the industry and ultimately for the Australian economy.

FWBC acts impartially and does not single out any industry participant. The extent to which unions and employers are the subject of investigation or legal proceedings, reflects the extent to which complaints are received of alleged contraventions. FWBC responds to the complaints and incidents that are referred to it. If there is a rise in employers breaking the laws we are tasked to enforce, then there will be a consequential rise in the number of employers the agency investigates and ultimately puts before the courts.

During the reporting period, our teams across the country commenced 197 new investigations. As a result, we continued to recruit more investigators and lawyers to deal with this increasing workload. Owing to hot spots which flare up in the industry in different parts of the country, we have placed an emphasis on developing a workforce capable of redeployment at short notice. FWBC has also invested heavily in staff training across all areas of the agency.

Compulsory examination powers have become a critical tool in breaking down the walls of silence in the industry. I conducted 14 examinations this financial year, compared with four the year before. We have filed two cases in court which would not have been possible without using the compulsory examination powers to gather critical evidence. The majority of examinees have been management representatives who have sought the protections of the examinations process to assist in FWBC’s investigations. We did not examine any union officials.

The agency’s compulsory powers were due to expire at the end of May 2015. The Parliament passed the Construction Industry Amendment (Protecting Witnesses) Act 2015 , which extended our compulsory powers for two years.

The increasing battle FWBC faces is best reflected by the number of cases we put before the courts. This financial year we commenced 36 court proceedings, the equivalent of one every 10 days. This is more cases than ever – even when comparing FWBC against its predecessor agencies the Australian Building and Construction Commission (ABCC) and the Building Industry Taskforce. I note that this agency had a 100% success rate of core business matter proceedings finalised in 2014 to 15.

At the Fair Work Commission, FWBC has been committed to scrutinising all right of entry permit applications to ensure full disclosure is made as required under the Fair Work Act 2009 . Holding a Federal right of entry permit is a privilege extended only to union officials, and FWBC is determined to do everything in its power to ensure only fit and proper persons who obey the law are granted this opportunity. FWBC’s legal teams made 26 separate submissions or applications in relation to right of entry permit holders. As a result one permit application was refused, eight permits were suspended, six officials withdrew their applications and one was granted with conditions. A number of the cases are ongoing.

This financial year, the courts issued penalties with total fines of $1.39 million being handed down. Of that figure, $1.179 million were fines against the CFMEU and its affiliates. This amount included $697,500 in penalties for coercion, $356,900 in fines for right of entry breaches, and a $125,000 penalty for contempt of court.

This year also saw the last of ABCC legacy cases that carried higher penalties for contraventions.

The judiciary has expressed its increasing frustration and dismay at the CFMEU’s ongoing disregard for the law. For instance, on 12 June 2015 a Federal Court judgement was handed down against the CFMEU for unlawful coercion on a taxpayer-funded housing project for the long-term homeless. In his judgement, Justice Logan stated:

“An industrial organisation, be it an employer organisation or an employee organisation, which persistently abuses the privilege by engaging in unlawful conduct cannot expect to remain registered”.

In addition, His Honour referred to the CFMEU’s

“outrageous disregard in the past and also in the present case of Australian industrial norms” .

Furthermore, in his 20 April 2015 decision against the CFMEU for coercion, Justice Tracey said,

“The present conduct of one of its officials adds to this depressing litany of misbehaviour. It evidences an ongoing disregard for the Rule of Law and highlights the need for the imposition of meaningful penalties within the limits imposed by the Act.”

The CFMEU, along with all unions, has a role to play in advocating for workers. All this agency asks is that it does so within the law. FWBC will continue to do everything within its power to create an industry where all Australian building and construction workplaces are productive and harmonious.

Nigel Hadgkiss

Director

Fair Work Building and Construction

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